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As filed with the Securities and Exchange Commission on June 13, 1997
Reg No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HASKEL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4107640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 East Graham Place
Burbank, California 91502 91502
(Address of principal executive offices) (Zip Code)
401(k) PROFIT SHARING PLAN
(Full title of the plan)
LONNIE D. SCHNELL
HASKEL INTERNATIONAL, INC.
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA
(818) 843-4000
(Name, address and telephone number, including area code, of agent for service)
Copy to:
WILLIE R. BARNES, ESQ.
MUSICK, PEELER & GARRETT LLP
ONE WILSHIRE BLVD., SUITE 2000
LOS ANGELES, CALIFORNIA 90017
(213) 629-7600
CALCULATION OF REGISTRATION FEE
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Proposed Proposed Amount of
Title of Securities Amount to be Maximum Maximum Registration
to be Registered Registered(1) Offering Price Aggregate Fee
Per Share(2) Offering Price(2)
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Class A Common
Stock, 259,607 Shares $9 5/8 $2,498,718 $758
without par value
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(1) In addition, pursuant to Rule 416(c) and (h)(1) under the Securities Act of
1933, as amended, this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee benefit
plan described herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
on the last reported sale price of the Registrant's Class A Common Stock as
reported on the NASDAQ National Market on June 9, 1997.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE UPON FILING IN ACCORDANCE
WITH RULE 462 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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THIS DOCUMENT CONSTITUTES A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
HASKEL INTERNATIONAL, INC.
401(k) Profit Sharing Plan
259,607 Shares of Class A Common Stock
and Employee Participations
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Participation in the Haskel International, Inc. 401(k) Profit Sharing
Plan (the "Plan") as explained herein is available to eligible employees of
Haskel International, Inc. (the "Company") and designated subsidiary
corporations of the Company. The Plan is comprised of applicable provisions of
the Louis Kravitz & Associates, Inc. Master 401(k) Profit Sharing Plan, Master
Trust Agreement and Adoption Agreement executed by the Company. The information
contained herein amends and restates all other documents dated prior to June 13,
1997 constituting the Prospectus relating to the Plan. It is suggested that this
Prospectus be retained for further reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus does not cover resales of shares of the Company's Class
A Common Stock acquired hereunder. However, persons who are not affiliates of
the Company as defined in Rule 405 of the Securities Act of 1933, as amended
(the "Act") ordinarily may publicly resell such shares acquired hereunder
without registration under the Act, in reliance on Section 4(1) thereof. An
affiliate of the Company may not publicly resell shares acquired hereunder
without compliance with Rule 144 promulgated under the Act or registration under
this Act.
THE DATE OF THIS PROSPECTUS IS JUNE 13, 1997
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TABLE OF CONTENTS
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AVAILABLE INFORMATION........................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................. 2
THE COMPANY..................................................................... 4
INFORMATION ABOUT THE 401(k) PROFIT SHARING PLAN................................ 4
General................................................................ 4
Administration......................................................... 4
ERISA.................................................................. 5
Termination Of The Plan................................................ 6
SUMMARY OF THE PLAN............................................................. 6
Eligibility............................................................ 6
Employee Elective Deferrals............................................ 7
Company Contributions.................................................. 7
Investments............................................................ 8
Capital Preservation Fund.............................................. 9
Dreyfus Lifetime Portfolios, Inc.-Income Portfolio..................... 9
Dreyfus Lifetime Portfolios, Inc. Growth And Income Portfolio.......... 10
Dreyfus Lifetime Portfolios, Inc. Growth Portfolio..................... 10
Dreyfus New Leaders Fund, Inc.......................................... 11
Neuberger & Berman Focus Trust......................................... 11
Investment Performance ................................................ 12
Vesting of Company Contributions....................................... 13
Employer Contributions Account......................................... 13
Matching Contributions Account......................................... 13
Deferred Income Account................................................ 13
WITHDRAWALS DURING EMPLOYMENT................................................... 13
Loans.................................................................. 14
Loan Provisions........................................................ 14
Distributions.......................................................... 15
Roll-Overs and Direct Transfers........................................ 15
Forfeitures............................................................ 15
Voting Rights.......................................................... 15
Other Information...................................................... 16
Termination of Employment.............................................. 16
FEDERAL INCOME TAX CONSEQUENCES................................................. 17
Limitation on Elective Deferrals....................................... 17
In-Service Withdrawals................................................. 17
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TABLE OF CONTENTS (CONTINUED)
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Distributions and Termination of Employment................................................... 17
Tax Withholding............................................................................... 18
IRA Rollovers................................................................................. 18
RESTRICTIONS ON RESALE................................................................................. 19
INSIDER TRADING RESTRICTIONS........................................................................... 19
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED HEREIN, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE CLASS A COMMON
STOCK OR INTERESTS IN THE PLAN OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH STATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: Northeast Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048; and Midwest Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained at prescribed rates
by writing to the Commission, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission; the address of the
Commission's Web site is http://www.SEC.gov. This Prospectus does not contain
all of the information set forth in the Company's registration statement and
exhibits thereto filed with the Commission to which reference is hereby made.
Copies of such registration statement and exhibits may be obtained from the
Commission at its principal office in Washington, D.C. upon payment of the
charges prescribed by the Commission.
The shares of the Company's outstanding Class A Common Stock are
admitted to trading on the NASDAQ NATIONAL MARKET under the Symbol HSKL.
Reports, proxy statements and other information concerning the Company may be
inspected at such Exchange.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company and the Plan hereby incorporate herein by reference the
following documents on file with the Commission:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1996, File No. 0-25068;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended August 31, 1996, November 30, 1996, and February 28, 1997, File No.
0-25068;
3. The description of the Company's Class A Common Stock
contained in the Company's Registration Statement on Form 8-A filed on September
19, 1994, including any amendment or report subsequently filed by the Company
for the purpose of updating that description, File No. 0-25068.
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All documents hereafter filed by the Company and the Plan pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the date of
this Prospectus and prior to the termination of the Class A Common Stock offered
hereby, shall be deemed to be incorporated herein by reference and to be a part
hereof from the respective dates of filing thereof (such documents and the
documents enumerated above, being hereafter referred to as "Incorporated
Documents"). Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, upon the oral or written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, excluding the exhibits thereto, and copies of all other
documents pertaining to the Plan pursuant to Rule 428(b) of the Rules and
Regulations under the Securities Act of 1933. Requests for such documents should
be directed to Haskel International, Inc., 100 East Graham Place, Burbank,
California 91502; Attention: Lonnie D. Schnell, Telephone Number (818) 843-4000.
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THE COMPANY
The Company, incorporated under the laws of the State of California in
1946 manufactures pneumatically (compressed air or gas) and hydraulically (oil)
driven, high-pressure low-flow, fixed displacement, reciprocating plunger,
liquid pumps, gas boosters, chemical ejection pumps and air pressure amplifiers
("HASKEL(R) Specialty Pumps") for industrial, commercial, aerospace and military
applications. The principal executive offices of the Company are located in
Burbank, California and its mailing address is 100 East Graham Place, Burbank,
California 91502, telephone number (818) 843-4000.
INFORMATION ABOUT THE 401(k) Profit Sharing Plan
GENERAL
This Prospectus is designed to furnish eligible employees of the
Company and its wholly owned subsidiaries information regarding the Plan which
in its original form was effective as of June 1, 1984. The Board of Directors
approved this restated Plan on May 29, 1997, effective as of June 1, 1997. The
Plan is qualified as a profit sharing plan under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and is also designed to meet the
requirements of a cash or deferred arrangement under Section 401(k) of the Code.
The Plan is designed to be a supplemental retirement program for
eligible employees of the Company and its operating subsidiary corporations,
Haskel Electronic Products, Inc. and Haskel-Hogan Sales and Services, Inc.
("Participating Employers"). It is primarily intended to provide a convenient
program of regular savings and investment for eligible employees of the
Participating Employers. In addition, discretionary contributions may also be
made to the Plan by the Participating Employers. As of April 30, 1997, there
were approximately 208 employees participating in the Plan.
ADMINISTRATION
All funds contributed under the Plan and Plan earnings will be held in
a trust fund by a trustee appointed by, and subject to removal by, the Board of
Directors. The Trustee has exclusive authority and discretion to manage and
control the trust fund; provided however that the Trustee's authority and
discretion is subject to the proper, written directions of the Committee and is
further subject to the individual investment selections of each participating
employee ("Participant"), as permitted by the Plan. The Trustee does not make
any discretionary decisions about the administration of the Plan. The trustee is
First Trust Corporation, 717 17th Street, Suite 2600, Denver, Colorado
80202-3323.
The Plan will be administered by an Administrative Committee (the
"Committee"). The members of the Committee will be appointed by the Board of
Directors of the Company and each member will serve at the pleasure of the
Board of Directors.
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The Committee has full power to administer the Plan and to construe and
apply all of its provisions on behalf of the Company. The present members of the
Committee and their positions at the Company are:
Lonnie D. Schnell Chief Financial Officer
Pamela Karno Human Resource Manager
Derek Aldred Vice-President, Engineering
Donald Garabedian Product Manager
Jesse Romero Machine Shop Programmer.
The Committee will assist in maintaining records for the trust fund and
for the Plan accounts of each Participant. The Committee will provide
information regarding Plan account balances, investment options under the Plan,
and will also administer all loans to Participants of moneys in the Plan.
Information concerning the Plan and its administrators may be obtained by
contacting:
Haskel International, Inc.
401(k) Profit Sharing Plan
100 East Graham Place
Burbank, California 91502
(818) 843-4000
Attention: Pamela Karno
While certain administrative fees and other expenses may be charged to
the accounts of individual Participants if the fees are incurred solely for the
benefit of that Participant, such as loan initiation fees, and while the Plan
authorizes the Trustee to pay other administrative fees, including its own fees,
from the general assets of the trust fund if not paid by the Company, the
Company will pay most administrative fees, including the Trustee's fees, from
its general funds and these fees will not be charged against Participants'
accounts.
Statements for each Participant's accounts will be mailed to each
Participant on not less than an annual basis.
ERISA
The Plan is an "employee pension benefit plan" as defined in Section
3(2) of the Employee Retirement Income Security Act ("ERISA") and is qualified
as a profit sharing plan as described in Section 401(a) of the Code. As such,
the Plan is subject to Titles I and II of ERISA, dealing with reporting and
disclosure, participation and vesting, funding, fiduciary responsibility,
administration and enforcement, and requirements for tax qualification. As an
"individual account plan" within the meaning of Section 3(34) of ERISA, the Plan
is not subject to the Plan termination insurance provisions of Title IV of
ERISA. Hence, benefits under the Plan are not guaranteed by the Pension Benefit
Guaranty Corporation. The Company does not extend to any Participant any
guarantee of benefits under the Plan.
All required reports will be filed with the proper authorities and
delivered at least annually to Participants in accordance with the requirements
of ERISA.
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TERMINATION OF THE PLAN
The Company presently intends to continue the Plan indefinitely.
Nevertheless, each Participating Employer retains the right to terminate the
Plan as to its employees and, in certain cases, the Participating Employers may
also amend the Plan. In no case, however, may any termination, amendment or
revision adversely affect or eliminate any benefits which have accrued for the
benefit of Participants or beneficiaries under the Plan.
If the Plan is terminated, the entire account balances of each
Participant will become fully vested and will be distributed as soon as
administratively feasible thereafter.
SUMMARY OF THE PLAN
The following is a summary of the provisions of the Plan. For a full
statement of terms and conditions, reference is made to the complete text of the
Plan, a copy of which is available in the Company's main office at 100 East
Graham Place, Burbank, California 91502. Nothing in the summary should be
construed as changing any provisions of the Plan.
ELIGIBILITY
Except for certain union employees whose retirement benefits are
covered by a collective bargaining agreement and certain nonresident alien
employees who receive no earned income from sources within the United States,
each employee of a Participating Employer who has completed six months of
service is eligible to become a Participant in the Plan on the first day of the
month following the month in which he or she satisfies the eligibility
requirements. There is no minimum age requirement.
A former Participant who is rehired by a Participating Employer will
again become a Participant immediately upon being rehired. A former employee who
was not a participant who is rehired will be considered a new employee for
eligibility purposes, if the number of consecutive one-year breaks in service
equals or exceeds the greater of five or the aggregate number of years of
service before such breaks in service and will participate in the Plan
commencing on the first day of the month following the month he or she satisfies
the eligibility requirements. If a former employee described in the preceding
sentence is not considered a new employee, then he or she will participate
immediately upon his or her reemployment with a Participating Employer if he or
she has then satisfied the Plan's eligibility requirements or, if not, on the
first day of the month following the month in which the participant satisfies
the Plan's eligibility requirements. Employees who continue to work after normal
retirement age will continue to be eligible to be active Participants.
A Participant has the right to select the fund or funds in which his or
her contributions will be invested and the right to direct the voting of the
Company's Class A Common Stock held in his or her accounts.
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EMPLOYEE ELECTIVE DEFERRALS
Each Participant may participate in the Plan through a salary reduction
agreement which authorizes a payroll deduction from his or her regular
compensation ("Elective Deferrals"). Elective Deferrals are made in whole
percentages of no less than one percent (1%), but no more than fifteen percent
(15%) of a Participant's compensation. Elective Deferrals may be made with
respect to bonus compensation payable to a Participant from time to time.
Elective Deferrals are made on a pre-tax basis. No after-tax employee
contributions are permitted under the Plan. A Participant's Elective Deferrals
for any calendar year may not exceed an annual indexed dollar limit imposed by
the Code ($9,500 for calendar year 1997).
Each Participant's Elective Deferrals are allocated to his or her
Deferred Income Account. Participants may elect the investment options in which
contributions to their Deferred Income Accounts will be invested. A Participant
can, at any time, elect or change the investment option or options in which
contributions to his or her Deferred Income Account is to be invested by
delivering notice to the Trustee. Investment decisions regarding the Company's
Class A Common Stock are subject to the Trading Limitations set out in the
Company's Securities Trading Policy. Investment elections or changes directed by
Participants will be effective at the earliest opportunity within the
limitations of this policy. See Insider Trading Restrictions.
A Participant may modify the amount of his or her Elective Deferrals as
of June 1, September 1, December 1, and March 1 of each calendar year. A
Participant may suspend Elective Deferrals effective the first day of any pay
period.
COMPANY CONTRIBUTIONS
Each Participating Employer, in the discretion of its Board of
Directors, may contribute a matching contribution on behalf of each Participant
who makes Elective Deferrals to the Plan. The amount of matching contributions,
if any, will be determined by each Participating Employer's Board of Directors,
at the commencement of each fiscal year and thereafter will be allocated to a
Participant's Matching Contributions Account on a payroll withholding basis as
Elective Deferrals are made. In addition, at the discretion of each
Participating Employer's Board of Directors, Employer discretionary
contributions may be made on behalf of a Participant during each Plan year.
Employer discretionary contributions will be allocated to each Participant's
Employer Contribution Account. Total Company contributions, including Elective
Deferrals, and contributions on behalf of each Participant are subject to
several limitations imposed on qualified plans by the Code.
The Company and each Participating Employer will make a matching
contribution for the initial plan fiscal year. Accordingly, for this initial
plan fiscal year, a Participant will receive a matching contribution equal to
200% of the first $250 of Elective Deferrals; thereafter, a Participant will
receive a Matching Contribution equal to 25% of Elective Deferrals. The maximum
matching contribution is limited to the first 6% of Compensation deferred. Any
non vested portion of a Participant's account balance which is forfeited upon
termination of employment will be credited toward the Company's matching
contribution obligation.
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INVESTMENTS
Contributions made on behalf of a Participant, including Elective
Deferrals, will be invested in one or more investment funds, or in the Company's
Class A Common Stock (the "Haskel Stock Fund") as directed by the Participant. A
Participant's contribution for purchase of the Company Class A Common Stock is
combined with contributions of other employees to purchase Company Class A
Common Stock on the open market at the current market price. When a Participant
invests in Company Class A Common Stock, the value of the investment is subject
to fluctuations in market value and other variables affecting the financial
outlook of the Company as well as general market and economic conditions. There
is no guarantee of principal, investment growth or income. A Participant's
investment directions can be changed, at the discretion of the Participant, on
any day by the Participant's submission of new or amended investment directions
to the Trustee. However, during the initial 60 day period following the
effective date of the Plan, June 1, 1997 (the transition period), investment
changes will not be permitted.
If the Participant fails to designate a fund his or her accounts will
be invested in the Capital Preservation Fund.
The funds are selected by the Committee and may be changed from time to
time. A Participant may invest 100% of the contributions allocated to his or her
accounts in any of the funds or may split his or her investment in minimum
increments of 1.0% among any combination of the funds.
The following options are available for investment under the 401(k)
Profit Sharing Plan:
Capital Preservation Fund
Dreyfus New Leaders Fund, Inc.
Neuberger & Berman Focus Trust
Dreyfus LifeTime Portfolios, Inc.-Grown and Income Portfolio
Dreyfus LifeTime Portfolios, Inc.-Income Portfolio
Dreyfus LifeTime Portfolios, Inc.-Growth Portfolio
Haskel Stock Fund
THE INFORMATION SET FORTH BELOW WITH RESPECT TO THE FUNDS SPECIFIED IS
ONLY A SUMMARY OF CERTAIN INFORMATION THAT HAS BEEN PUBLISHED OR PROVIDED BY
SUCH FUNDS AND DOES NOT PURPORT TO BE A COMPLETE DISCUSSION OF OR TO EVALUATE
THE VARIOUS RISKS ASSOCIATED WITH EACH FUND. THE COMPANY HAS NOT VERIFIED THE
ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND MAKES NO REPRESENTATION WITH
RESPECT THERETO. PROSPECTIVE PARTICIPANTS SHOULD NOTE THAT THE PERFORMANCE OF
EACH FUND WILL FLUCTUATE AS MARKET CONDITIONS CHANGE, AND THAT PAST PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS.
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CAPITAL PRESERVATION FUND
The Capital Preservation Fund is a collective investment fund for
employee benefits trusts and plans investing primarily in guaranteed investment
contracts, bank investment contracts, money market instruments, separate
account structures and alternative investment contracts. The objective of the
Fund is preservation of principal while achieving a competitive current income
return. All GICs purchased will be from insurance companies which, at the time
of issuance, are rated at least A by the A.M. Best Company, Inc. In addition,
they will carry at least a minimum Townsend & Schupp rating of capital A-. All
companies rated by Standard & Poor's at the time of purchase, must carry an AA-
rating. All U.S. Treasury and agency obligations are considered to be AAA
equivalents. All other investments will be from an approved list of bank and
corporate issuers.
The maximum average maturity of the fund will be three years. No.
GIC/BIC will be purchased with a maturity over 5 years. Any alternative GIC/BIC
purchased will have an average life limited to 6 years. In addition, the fund
generally will hold approximately 5% in money market instruments and at least
20% of the fund's investments will mature in less than one year
The Portfolio is managed by La Salle National Trust, N.A., a pioneer in
the development of GIC Funds. In seeking its dual goals of high current income
and price stability, the Capital Preservation Fund's management follows a
conservative investment approach. Safety of principal is the primary concern.
There can be no assurance that the fund will achieve its investment
objective of high current income and stability of principal.
DREYFUS LIFETIME PORTFOLIOS, INC.-INCOME PORTFOLIO
The Fund is a series fund that permits investment in three separate
diversified portfolios: Income, Growth and Growth and Income. The Income
Portfolio employs a strategic asset allocation investment technique that
involves an ongoing comparison of the relative values of stocks and bonds across
different markets and allocates the Portfolio's assets among common stock, fixed
income securities, and short-term money market instruments. The Portfolio's
composition is subject to change.
In selecting investments for the Portfolio, Mellon Equity employs a
multi-step process that, first, establishes an asset allocation baseline, or
weighting of the Portfolio's assets toward a particular asset class; second,
establishes ranges within which to allocate the Portfolio's assets among the
asset classes; third, uses proprietary asset allocation models to recommend an
allocation among asset classes; and fourth, selects the securities within the
asset classes.
The Income Portfolio invests exclusively in domestic securities and may
invest up to 10% of its assets in money market instruments. The target
allocation is 25% equity securities and 75% fixed-income securities. All equity
investments will consist of large capitalization stocks (typically with market
capitalization of greater than $ 1.4 billion).
There is no assurance that this Fund will achieve its investment
objective.
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DREYFUS LIFETIME PORTFOLIOS, INC. GROWTH AND INCOME PORTFOLIO
The Fund is a series fund that permits investment in three separate
diversified portfolios: Income, Growth and Growth and Income. The Growth and
Income Portfolio employs a strategic asset allocation investment technique that
involves an on-going comparison of the relative value of stocks and bonds across
different markets and allocates the Portfolio's assets among common stocks and
fixed income securities. The Portfolio's composition is subject to change.
In selecting investments for the Portfolio, Mellon Equity will employ a
multi-step process that, first, establishes an asset allocation baseline, or
weighting of the Portfolio's assets toward a particular asset class; second,
establishes ranges within which to allocate the Portfolio's assets among the
asset classes; third, uses proprietary asset allocation models to recommend an
allocation among asset classes and; fourth, selects the securities within the
asset classes.
A target allocation is set for the Growth and Income Portfolio and then
adjusted within defined ranges based upon Mellon Equity's assessment of return
and risk characteristics of each. The Growth and Income Portfolio divides its
investments between equity securities and fixed-income securities and may invest
up to 15% of its assets in international securities. Domestic equity investments
and fixed-income securities may range from 35% to 65% of the Portfolio with a
target allocation of 50% in each asset class. The domestic equity portion is
divided into 80% large capitalization stocks and 20% small capitalization stocks
(typically with market capitalizations of less than $1.4 billion).
There is no assurance that this Fund will achieve its investment
objective.
DREYFUS LIFETIME PORTFOLIOS, INC. GROWTH PORTFOLIO
The Fund is a series fund that permits investments in three separate
diversified portfolios: Income, Growth and Growth and Income. The Growth
Portfolio employs a strategic asset allocation investment technique that
involves an on-going comparison of the relative value of stocks and bonds across
different markets and allocates the Portfolio's assets among common stocks and
fixed-income securities. The Portfolio's composition is subject to change.
In selecting investments for the Portfolio, Mellon Equity will employ a
multi-step process that, first, establishes an asset allocation baseline, or
weighting of the Portfolio's assets toward a particular asset class; second,
establishes ranges within which to allocate the Portfolio's assets among the
asset classes; third, uses proprietary asset allocation models to recommend an
allocation among asset classes and; fourth, selects the securities within the
asset classes.
A target allocation is set for the Growth Portfolio and then adjusted
within defined ranges based upon Mellon Equity's assessment of return and risk
characteristics of each. The Growth Portfolio divides its investments between
equity securities and fixed-income securities and may invest up to 25% of its
assets in international securities. Domestic equity investments may range from
65% to 95% of the Portfolio with a target allocation of 80%. The domestic
equity portion is divided into 80% large capitalization stocks and 20% small
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capitalization stocks (typically with market capitalizations of less than $1.4
billion). Domestic fixed-income investments may range from 0% to 35% of the
Portfolio with a target allocation of 20%.
There is no assurance that this fund will achieve its investment
objective.
DREYFUS NEW LEADERS FUND, INC.
The Fund invests primarily in common stocks of domestic and foreign
issuers typically with market capitalizations below $750 million at time of
purchase. There are approximately 5,000 companies available for consideration in
this market capitalization range. The Fund may invest up to 25% of the value of
its assets in the securities of foreign companies which are not publicly traded
in the United States and the debt securities of foreign governments. Investments
in foreign securities involve additional risks. For defensive purposes, the Fund
may invest in short-term money market instruments and cash. The Fund's share
price and investment return fluctuate such than an investor's shares may be
worth more or less than original cost upon redemption.
There is no assurance that this Fund will achieve its investment
objective.
NEUBERGER & BERMAN FOCUS TRUST
The Portfolio's objective is to seek long-term capital appreciation. To
maximize potential return, the Portfolio normally makes at least 90% of its
investments in not more than six sectors it identifies as under-valued. Where a
particular industry may fall within more than one sector, N&B Management uses
its judgment and experience to determine the placement of that industry within a
sector. The Portfolio uses the value-oriented investment approach to identify
undervalued stocks in sectors of the economy. The Portfolio then focuses its
investments in those sectors in which the under-valued stocks are clustered.
These are believed to offer the greatest potential for capital growth. This
investment approach is different from that of most other mutual funds that
emphasize sector investments. Those funds either invest in only a single
economic sector, or choose a number of sectors by analyzing general economic
trends. While this value-oriented approach is intended to limit risks, the
Portfolio -- with its concentration in sectors -- may be more greatly affected
by any single economic, political or regulatory development than a more
diversified mutual fund.
The Portfolio will not (i) invest more than 50% of its total assets in
any one sector, (ii) as a fundamental policy, concentrate 25% or more of its
total assets in the securities of companies having their principal business
activity in any one industry, or (iii) invest more than 5% of its total assets
in the securities of any one company.
There is no assurance that this Fund will achieve its investment
objective.
-11-
<PAGE> 16
Neither the Company, the Committee nor the Trustee monitors a
Participant's investment choices or is responsible if one of those choices
results in a loss or fails to provide the rate of return anticipated by the
Participant. The Company intends that the 401(k) Profit Sharing Plan be subject
to the rules of ERISA Section 404(c) and Title 29 of the Code of Federal
Regulations, Section 2550.404c-1 and, as a result, the liability of the Company,
the Committee members, the Trustee and other Plan fiduciaries, if any, will be
significantly limited if a Participant or beneficiary who directs the investment
of his or her accounts incurs losses or suffers poor investment returns due to
the necessary result of investment instructions given by the Participant or
beneficiary. The Committee will review the general investment of each Fund and
may from time to time change or modify the investment options made available to
participants and beneficiaries.
INVESTMENT PERFORMANCE
Set forth below for each of the past five years is the available annual
total return for each of the Funds, other than the Haskel Stock Fund offered as
an investment under the 401(k) Profit Sharing Plan.
<TABLE>
<CAPTION>
TOTAL RETURN FOR
CALENDAR YEARS
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Capital Preservation Fund 7.10% 6.12% 6.11% 6.38% 6.38%
Dreyfus LifeTime Portfolios, Inc. ---- ---- ---- 12.08%(1) 7.07%
-
Income Portfolio
Dreyfus New Leaders Fund, Inc. 9.43% 17.07% -0.15% 29.80% 17.31%
Dreyfus LifeTime Portfolio, Inc. ---- ---- ---- 19.54%(1) 15.22%
-
Growth and Income Portfolio
Neuberger & Berman Focus Trust 21.10% 19.60% 0.93% 36.03% 16.29%
Dreyfus LifeTime Portfolio, Inc. ---- ---- ---- 24.92%(1) 21.45%
-
Growth Portfolio
Haskel Stock Fund(2) ---- ---- ---- ---- ----
-
</TABLE>
(1) Represents total return from inception of Fund, March 31, 1995 to December
31, 1995.
(2) Represents that portion of the Trust which will be invested and reinvested
in Company Class A Common Stock.
THE RETURNS ON INVESTMENT SHOWN ABOVE ARE FOR PURPOSES OF ILLUSTRATION ONLY.
SINCE THEY ARE BASED ON HISTORICAL DATA, THEY SHOULD NOT BE CONSIDERED
PREDICTIVE CONCERNING HOW ANY OF THE FUNDS WILL PERFORM IN ANY FUTURE YEAR. THE
COMPANY DOES NOT GUARANTEE THE PERFORMANCE OF ANY OF THE FUNDS.
-12-
<PAGE> 17
VESTING OF COMPANY CONTRIBUTIONS
The vested interest of each Employee (who has been credited with at
least one Hour of Service on or after January 1, 1989) in his or her accounts
will be determined on the basis described below.
EMPLOYER CONTRIBUTIONS ACCOUNT
The Participant's interest in his or her Employer Contribution Account
will vest at the rate of 20% for each Year of Service. A Year of Service is each
Plan year during which the Participant is credited with at least 1,000 Hours of
Service. A Participant who is credited with Five Years of Service or more will
be 100% vested in his or her Employer Contributions Account.
MATCHING CONTRIBUTIONS ACCOUNT
The Participant's interest in his or her Matching Contributions Account
will vest at the rate of 20% for each Year of Service. A Year of Service is each
Plan year during which the Participant is credited with at least 1,000 Hours of
Service. A Participant who is credited with Five Years of Service or more will
be 100% vested in his or her Matching Contributions Account.
DEFERRED INCOME ACCOUNT
A Participant will always be 100% vested in his or her Deferred Income
Account.
WITHDRAWALS DURING EMPLOYMENT
If a Participant has attained the age of 59 1/2 or has incurred
financial hardship, he or she may withdraw funds from his or her Deferred Income
Account even if he or she is still employed by a participating Employer. In
addition, Participants who attain normal retirement age while still employed may
make a one-time election to withdraw their entire balance from all accounts. If
a Participant who has attained normal retirement age makes such an election, he
or she will continue to participate in the Plan during the balance of their
employment but will not have any further rights to in-service withdrawals,
except for those withdrawals permitted from his or her Deferred Income Account
as a result of having attained the age of 59 1/2. Withdrawals from a
Participant's Deferred Income Account during his or her employment on account of
a financial hardship can only be made in accordance with the following rules:
The financial hardship must involve an expenditure of funds under one
or more of the following circumstances:
o Payment of expenses for medical care described in Section
213(d) of the Code incurred by a Participant or necessary to
obtain care for a Participant or a member of a Participant's
immediate family,
o The purchase of a principal residence for the Participant,
-13-
<PAGE> 18
o Twelve months of post-secondary educational expenses for a
Participant or the Participant's spouse, children or
dependents,
o Prevention of eviction or foreclosure of the mortgage on the
Participant's principal residence,
o Such other financial need which the Commissioner of Internal
Revenue deems to be immediate and heavy.
In addition, financial hardship distributions are subject to the
following requirements:
1. The distribution must not be in excess of the amount of the
immediate and heavy financial need (including amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution) of the Participant;
2. The Participant must have obtained all distributions other
than hardship distributions, and all nontaxable loans currently available under
all plans maintained by his or her Employer;
3. Elective Deferrals under this Plan and all other qualified and
nonqualified deferred compensation plans maintained by his or her Employer must
be suspended for at least four months after receipt of the hardship
distribution;
4. The Plan and all other plans maintained by the Participant's
Employer must provide that the Employee may not make elective deferrals for the
Employee's taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Section 402(g) of the Code
for such next taxable year less the amount of such Employee's elective deferrals
for the taxable year of the hardship distribution.
LOANS
A Participant is permitted to borrow an amount which, when added to the
balance of all other Plan loans of such Participant then outstanding, does not
exceed the lesser of $50,000 reduced by the excess, if any, of (i) the highest
outstanding balance of loans from the Plan during the one year period ending on
the day before the date on which such loan was made over (ii) the outstanding
balance of loans from the Plan on the date such loans were made, or one-half of
the Participant's or Beneficiary's vested interest under the Plan.
LOAN PROVISIONS
Loans shall be evidenced by a Promissory Note and secured by an
assignment of the Participant's vested interest in the Plan.
Loans shall bear a reasonable rate of interest, as determined by the
Committee. The rate of interest must be commensurate with the interest rates
charged for loans made under similar circumstances by persons in the business of
lending money. Loans shall require substantially level repayment of principal
and interest (with repayments not less frequently than quarterly)
-14-
<PAGE> 19
over a period generally not to exceed five years. A loan used to acquire any
dwelling which within a reasonable period of time (to be determined at the time
the loan is made) is to be used as the principal residence of the Participant
may be for a longer term than five years in the discretion of the Committee. In
the event of default, foreclosure on the Note and attachment of the security
will not occur until a distributable event occurs under the terms of the Plan.
DISTRIBUTIONS
Participants will receive a distribution of their vested benefits as
soon as administratively feasible following their termination of employment with
a participating Employer, provided that if the value of the Employee's vested
account balance is greater than $3,500, then, except for minimum distributions
which are required for Participants who have reached the age of 70 1/2, no
amount will be distributed unless the Participant consents to the distribution.
A Participant will receive his or her distribution in a lump sum distribution.
ROLL-OVERS AND DIRECT TRANSFERS
With the consent of the Committee, a Participant may transfer account
balances from another plan qualified under Section 401(a) of the Code, either in
the form of rollover contributions or a direct plan-to-plan transfer. These
contributions will be allocated to a Participant's Rollover Account. A
Participant will always be 100% vested in his or her Rollover Account.
FORFEITURES
If a Participant terminates employment with the Participating Employer
and the value of the Participant's vested account balance is not greater than
$3,500, the Employee shall receive a distribution of the value of the entire
vested portion of such account balance, and the non-vested portion will be
treated as a forfeiture. If a Participant terminates employment with the
Participating Employer and consents to receive the value of his or her vested
account balance, the non-vested portion will be treated as a forfeiture. If a
Participant who receives a distribution resumes employment, then any forfeited
portion of his or her account balance will be restored to the amount on the date
of distribution if the Participant repays to the Plan the full amount of the
distribution attributable to Employer contributions before the earlier of (i)
five years after the Participant's Re-employment Commencement Date, or (ii) the
date the Participant incurs five consecutive one-year service breaks following
the date of distribution.
VOTING RIGHTS
At each annual or special meeting of stockholders of the company, each
Participant will be provided with a proxy which will enable the Participant to
instruct the Trustee how to vote the shares of Class A Common Stock of the
Company held in any account of such Participant. The trustee will vote shares of
Company Class A Common Stock for which it has not received instructions from the
Participant as directed by the Committee or, in the absence of Committee
directions, in direct proportion to the voting instructions received by the
Trustee from Participants.
-15-
<PAGE> 20
In the event of a tender or exchange offer for any Company Class A
Common Stock held by the Trustee, the Trustee will use its best efforts to
distribute or cause to be distributed to each affected Participant in a timely
manner all information and material that are distributed to the Company
stockholders in connection with the offer, together with directions as to how
the Participant may instruct the Trustee whether or not to tender or exchange
the Company Class A Common Stock credited to the Participant's accounts (both
vested and non-vested). Each Participant will be entitled to direct the Trustee
to tender or exchange shares of Company Class A Common Stock credited to such
Participant's account. The Trustee will tender Class A Common Stock credited to
a Participant's accounts only if instructed to do so by the Participant. The
Trustee will not express its opinion or recommendation to any Participant
concerning the tender offer or exchange of shares.
Under the terms of the Plan, the Trustee may delegate to the Committee
some or all of its responsibilities to provide information and documents to, or
otherwise communicate with Participants concerning any shareholder vote or
tender offer which involves Class A Common Stock held in the Plan. The Committee
cannot be viewed as disinterested in such matter, and may have a conflict of
interest in providing advice to Participants.
OTHER INFORMATION
Except in certain situations involving the dissolution of a
Participant's marriage where Plan assets are divided between a Participant and
his or her spouse pursuant to a qualified domestic relations order, a
Participant's interest under the Plan cannot be sold, assigned or transferred
prior to the distribution to the Participant. A Participant cannot pledge his or
her interest under the Plan for any loan or other purpose. No lien exists on any
funds or securities held under the Plan, nor may any such lien be created.
TERMINATION OF EMPLOYMENT
Retirement. If employment is terminated following attainment of normal
retirement age, a Participant's payable benefit is 100% percent of the value of
his or her accounts.
Death. If employment is terminated by death, the payable benefit to the
Participant's beneficiary under the Plan is one hundred percent of the value of
the Participant's accounts.
Disability. If a Participant becomes permanently and totally disabled,
the payable benefit is one hundred percent of his or her accounts.
Other. If a Participant terminates employment in any manner other than
retirement, death or disability, the payable benefit is the vested value of his
or her accounts.
-16-
<PAGE> 21
FEDERAL INCOME TAX CONSEQUENCES
The Plan is a qualified plan under Section 401(a) of the Code and the
trust thereunder is exempt from federal income taxes. In addition, the Plan
contains a cash or deferred arrangement which meets the requirements of Section
401(k) of the Code.
A Participant in the Plan is not subject to federal income taxation on
Company discretionary or matching contributions or on Elective Deferrals
contributed on behalf of a Participant to the Plan, until such amounts are
distributed to or withdrawn by the Participant. Further, the Participant is not
subject to federal income taxation on the earnings allocated to such
contributions, including interest, dividends, or profits from sales of
securities received by the Trustee and credited to the Participant's accounts,
until such amounts are distributed to or withdrawn by the Participant. However,
Elective Deferrals are treated in the year of contribution as wages subject to
the Social Security tax.
Limitation on Elective Deferrals. The Code imposes an annually indexed
dollar limit ($9,500 for calendar year 1997) on deferrals under the Plan.
In-Service Withdrawals. The Plan permits Participants to withdraw funds
from their Deferred Income Account while they are still employed if they have
attained the age of 59 1/2 or have incurred a "financial hardship", as that term
is defined in the Plan. In addition, Participants who attain normal retirement
age while still employed may make a one-time election to withdraw their entire
balance from all accounts. If a Participant who has attained normal retirement
age makes such an election, he or she will continue to participate in the Plan
during the balance of their employment but will not have any further rights to
in-service withdrawals, except for those withdrawals permitted from his or her
Deferred Income Accounts as a result of having attained the age of 59 1/2.
Participants who receive an in-service withdrawal will generally be taxed at
ordinary income tax rates on the entire amount of the withdrawal. In addition,
if a Participant has not reached age 59 1/2 at the time of the withdrawal, then
the amount withdrawn will be subject to a 10% early withdrawal tax. Although
withdrawals generally are taxed at ordinary income tax rates, if the
Participant's entire interest in the Plan is withdrawn after age 59 1/2, special
lump sum treatment may be available, as discussed below.
Distributions and Termination of Employment. All distributions at
termination of employment are made in a single sum payment. The taxation of such
distributions depends on several factors, including the timing of the
distribution, the Participant's age, the Participant's length of participation
in the Plan and certain elections made by the Participant.
Since payment will be made in a lump sum distribution, the distribution
will be taxed as ordinary income, unless the Participant is eligible for certain
averaging rules and elects to compute the tax on that basis or unless the
Participant timely rolls over the distribution to either an individual
retirement account or another qualified plan. If the Participant receives the
lump sum payment after age 59 1/2 and has been a Participant in the Plan for
five or more taxable years before the taxable year of the distribution and does
not roll over any portion of the distribution, the Participant is eligible to
elect to have special five-year averaging rules apply in calculating the income
tax for such payment. If the Participant makes the election, the income tax for
the lump sum payment is computed separately from the Participant's other items
of income and may result in a lower tax rate for that payment. However, as a
-17-
<PAGE> 22
result of 1996 legislation, the five-year averaging rules are repealed for
taxable years beginning after 1999. Certain transition rules allow different
averaging rules to apply to Participants who had attained age fifty prior to
January 1, 1986. These rules are not repealed by the 1996 legislation.
If the Participant has not reached age 59 1/2 by the date of the
distribution, an additional early distribution tax of 10% will be imposed on the
taxable portion of the distribution unless the distribution is made on account
of the Participant's death or disability, is made to defray a medical expense
deductible under Section 213 of the Code, or is made subsequent to the
Participant's separation from service after age 55. The 10% tax does not apply
to a distribution made pursuant to a qualified domestic relations order. The 10%
penalty tax does not apply to any portion of a distribution rolled over to an
individual retirement account or another qualified plan, although such penalty
tax may apply to subsequent distributions from such individual retirement
account or qualified plan.
A 15% excise tax is payable by Participants on the amount by which the
taxable portion of an annual distribution exceeds a threshold amount
determinable each year with reference to the Code. If averaging was elected for
a lump sum distribution, the tax is payable to the extent that the taxable
portion of the lump sum payment exceeds five times the threshold amount. Amounts
attributable to after-tax voluntary contributions, or amounts rolled over to an
individual retirement account or qualified retirement plan within 60 days of
receipt, are not included in computing the tax. The 15% excise tax on excess
distributions is suspended for a three-year period beginning January 1, 1997 and
distributions received during 1997, 1998 and 1999 will not be subject to this
additional tax. A separate 15% estate tax applies at a Participant's death to
the excess of a Participant's total balances in all qualified retirement plans,
annuity plans, tax sheltered annuities, and individual retirement accounts, over
an amount equal to the present value, as of the Participant's death, of a
hypothetical single life annuity with annual payments equal to the applicable
threshold amount. This separate 15% estate tax is not suspended during 1997,
1998 and 1999.
Tax Withholding. The taxable portion of a distribution is generally
subject to federal income tax withholding at a rate of twenty percent (20%) of
the distribution. Distributions, however, for which the employee elects a direct
rollover to another qualified retirement plan or to an IRA are not subject to
withholding. In order to elect a direct rollover, the Participant must direct
the trustee to transfer the rollover amount directly to another qualified plan
or IRA. The nontaxable portion of a distribution and certain other
distributions, such as required distributions after age 70 1/2, are not eligible
for rollover and therefore are not subject to withholding. The Participant may
nevertheless elect withholding, whether or not required.
Special rules apply to distributions of Company Stock. The Code
generally does not require withholding on distributions of Company Stock.
However, if the taxable portion of a distribution consists of both cash and
Company Stock, the value of the stock will be added to the cash amount of the
distribution to determine the amount to be withheld. In that case, the amount
withheld may not exceed the cash portion of the taxable distribution.
IRA Rollovers. A Participant in most cases may rollover any part of the
taxable portion of a distribution from the Plan to another qualified retirement
plan or an IRA. As discussed
-18-
<PAGE> 23
above, a Participant may require the Plan to make a direct transfer to the other
plan or the IRA and avoid income tax withholding on the amount transferred.
A Participant who fails to make a direct rollover may still make a
rollover of the taxable portion, if the rollover is made within 60 days of the
receipt of the distribution. The amount subject to rollover is the entire
taxable amount, including the amount withheld. The employee, however, can make
the full rollover only by replacing the amount withheld from personal sources.
If the withheld amount is not replaced, the Participant will be subject to
income tax and penalty on that amount.
The foregoing statements are based on current federal tax laws and
regulations in effect and do not purport to be a complete explanation of all
income tax and other tax aspects of the Plan. Participants may additionally be
subject to state and local taxes with respect to Plan benefits, which are not
described herein. Each Participant should consult the Participant's own tax
advisor with regard to the tax aspects of the participation in the Plan,
including any applicable state and local income tax laws, the effect of which
may differ substantially from federal tax law.
RESTRICTIONS ON RESALE
There are restrictions on resales of securities acquired pursuant to
the Plan by Participants who are "affiliates" of the Company (i.e., controlling
persons of the Company) within meaning of the term "affiliate" as defined in
Rule 405 as promulgated by the Commission under the Securities Act of 1933, as
amended (the "Act"). Such persons may not offer or sell shares of the Company's
Class A Common Stock acquired pursuant to the Plan unless such offers and
sales are made pursuant to an effective Registration Statement under that Act or
pursuant to an exemption from the registration requirements of the Act, such as
that provided by Rule 144 thereunder. In connection with such offers and sales,
a Participant selling a large number of shares, whether or not an affiliate, may
be deemed an "underwriter" within the meaning of that term as set forth in the
Act, and therefore is subject to the registration requirements of the Act,
unless an exemption therefrom is applicable.
Section 16 of the Exchange Act provides, among other things, that an
officer, director or any person who is a beneficial owner of more than 10% of an
equity security of the Company registered under the Exchange Act is liable to
the Company for profit realized from any purchase and sale (or any sale and
purchase) of any equity security of the Company within a period of less than six
months, irrespective of the intention on the part of such person in entering the
transaction. The term "equity security" may include rights to acquire shares
upon exercise of warrants or options on conversion of convertible securities or
otherwise.
INSIDER TRADING RESTRICTIONS
All transactions involving Haskel Class A Common Shares, including all
reallocations of account balances under the Plan which will result in the
purchase of Class A Common Shares of the Company, are subject to Rule 10b-5 of
the Securities Exchange Act of 1934. Accordingly, a Participant must not trade
-19-
<PAGE> 24
in Haskel Class A Common Shares (including through reallocation of account
balances from the investment funds to acquisitions of the Company's Class A
Common Shares) at any time when a Participant is in possession of material
non-public information about the Company. In addition, Participants are subject
to Company's stock trading window policy and must observe such policy in
connection with transactions involving the Company's Class A Common Shares.
-20-
<PAGE> 25
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
- ----------------
* INFORMATION REQUIRED BY ITEMS 1 AND 2 OF PART I TO BE CONTAINED IN THE
SECTION 10(a) PROSPECTUS IS OMITTED FROM THE REGISTRATION STATEMENT IN
ACCORDANCE WITH RULE 428 UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE NOTE TO PART I OF FORM S-8.
<PAGE> 26
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Haskel International, Inc. (the
"Registrant" or "Company") and the Haskel International, Inc. 401(k) Profit
Sharing Plan (the "Plan") with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934 (the "Exchange Act")
(Commission File No. 0-25068) are incorporated herein by reference: (a) the
Company's Annual Report on Form 10-K for the fiscal year ended May 31, 1996; (b)
the Company's Quarterly Reports on Form 10-Q for the quarters ended August 31,
1996, November 30, 1996 and February 28, 1997; and (c) the description of the
Company's Class A Common Stock contained in the Company's Registration Statement
on Form 8-A filed on September 19, 1994 with the Commission under the Exchange
Act, including any amendment or report subsequently filed by the Company for the
purpose of updating that description.
Each document filed by the Registrant or the Plan with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the date of this Registration Statement, but prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered herein have been sold or that deregisters all such securities
then remaining unsold, will be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
Any statement contained herein or in a document, all or a portion of
which is incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or amended, to constitute
a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Class A Common Stock registered hereby is a class of securities
registered under Section 12(g) of the Exchange Act.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
II-1
<PAGE> 27
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under California law, a California corporation may eliminate or limit
the personal liability of a director to the corporation for monetary damages for
breach of the director's duty of care as a director, provided that the breach
does not involve certain enumerated actions, including, among other things,
intentional misconduct or knowing and culpable violation of the law, acts or
omissions that the director believes to be contrary to the best interests of the
corporation or its shareholders or that involve an absence of good faith on the
part of the director, any transaction from which a director derives an improper
personal benefit, acts or omissions that show a reckless disregard for the
director's duty to the corporation or its shareholders in circumstances in which
the director was aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the corporation
or its shareholders, and acts or omissions that constitute an unexcused pattern
of inattention that amounts to an abdication of the director's duty to the
corporation or its shareholders. The Company's Articles of Incorporation include
such provisions.
The Company's Articles of Incorporation and Bylaws also impose a
mandatory obligation on the Company to indemnify its agents, including officers
and directors of the Company to the fullest extent authorized or permitted by
law (as now or hereinafter in effect), including under circumstances in which
indemnification would otherwise be at the direction of the Company.
The foregoing indemnification provisions are broad enough to encompass
certain liabilities of directors under the Securities Act of 1933, as amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following is a complete list of exhibits filed as part of this
Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
4 Haskel International, Inc. 401(k) Profit Sharing
Plan.
23.01 Consent of Deloitte & Touche LLP.
23.02 Consent of Price Waterhouse UK.
24.01 Power of Attorney (Contained in Part II).
</TABLE>
II-2
<PAGE> 28
The Registrant will submit the Plan and any amendments thereto to the
Internal Revenue Service ("IRS") in a timely manner and has made or will make
all changes required by the IRS in order to qualify the Plan.
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, 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 of 1933, as amended, 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,
II-3
<PAGE> 29
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Burbank, State of California, on
June 13, 1997.
HASKEL INTERNATIONAL, INC.
By: /s/ R. MALCOLM GREAVES
_________________________
R. Malcolm Greaves
Chief Executive Officer
II-5
<PAGE> 31
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edward Malkowicz and Lonnie D. Schnell,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8 and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, to all intent and purposes and as full as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ EDWARD MALKOWICZ Chairman of the Board and June 13, 1997
- ---------------------------------------- Director
Edward Malkowicz
/s/ R. MALCOLM GREAVES Chief Executive Officer and June 13, 1997
- ---------------------------------------- Director
R. Malcolm Greaves
/s/ LONNIE D. SCHNELL Chief Financial Officer (Principal June 13, 1997
- ---------------------------------------- Financial and Accounting Officer)
Lonnie D. Schnell
- ---------------------------------------- Director ______ __, 199_
Richard Detweiler
/s/ MARVIN L. GOLDBERGER
- ---------------------------------------- Director June 13, 1997
Marvin L. Goldberger
</TABLE>
II-6
<PAGE> 32
<TABLE>
<S> <C> <C>
/s/ STANLEY T. MYERS
- ---------------------------------------- Director June 13, 1997
Stanley T. Myers
/s/ TERRENCE A. NOONAN
- ---------------------------------------- Director June 13, 1997
Terrence A. Noonan
/s/ JOHN VINKE
- ---------------------------------------- Director June 13, 1997
John Vinke
</TABLE>
II-7
<PAGE> 33
EXHIBIT INDEX
EXHIBIT NO.
- -----------
4 Haskel International, Inc. 401(k) Profit Sharing Plan
23.01 Consent of Deloitte & Touche LLP
23.02 Consent of Price Waterhouse
II-8
<PAGE> 34
Pursuant to the requirements of the Securities Act of 1933,
the trustee has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Denver,
State of Colorado on June 13, 1997.
Haskel International, Inc. 401(k) Profit Sharing Plan
By First Trust Corporation
as Trustee
By /s/ MARK A. KELLEY
------------------------------------------
Mark A. Kelley
Senior Vice President
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<PAGE> 1
LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER TRUST AGREEMENT
It is hereby certified that the following is a true and
correct copy of the Louis Kravitz & Associates, Inc.
Master Trust Agreement,
as adopted by the Company in the Adoption Agreement.
LOUIS KRAVITZ & ASSOCIATES, INC.
BY LOUIS KRAVITZ
---------------------------------
Copyright (C) 1993 Louis Kravitz & Associates, Inc. All Rights Reserved.
<PAGE> 2
LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER TRUST AGREEMENT
This Trust Agreement between the Company and the Trustee is effective as
of the Effective Date specified in the Adoption Agreement.
RECITALS
WHEREAS, the Company established the Plan; and
WHEREAS, the Plan provides among other things, that the Company shall
execute a trust agreement for the purpose of carrying out the Plan; and that
contributions made or caused to be made by the Company and any Employers
pursuant to the Plan shall be paid over to the Trustee; and
WHEREAS, the Company desires to establish a trust as provided in the
Plan to implement and carry out provisions thereof; and this Trust Agreement is
so designed for that purpose and has been designated as a part of the Plan
intended to meet the requirements of Sections 401 and 501 of the Internal
Revenue Code of 1986, as amended; and
WHEREAS, the Company desires the Trustee to act as Trustee of the Trust
and the Trustee is willing to so act pursuant to the terms of this Trust
Agreement;
NOW, THEREFORE, in consideration of the mutual undertakings of the
parties hereto, it is hereby agreed by the undersigned as follows:
<PAGE> 3
ARTICLE I
DEFINITIONS
The following words and phrases when used herein shall have the
following meanings, unless the context clearly indicates otherwise. All
definitions included in the Plan shall be deemed to be incorporated herein to
the extent necessary.
1.01 "ADMINISTRATOR" shall be the Plan Administrator named in the
Adoption Agreement.
1.02 "COMPANY" shall mean the Company named in the Adoption
Agreement, or its successor or successors.
1.03 "EMPLOYER" OR "EMPLOYERS" shall mean the Company and each other
Affiliated Company which may become an Employer pursuant to the terms of
the Plan.
1.04 "ERISA" shall mean Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to time.
1.05 "INVESTMENT MANAGER", if any, shall mean an "investment manager"
as defined in Section 3(38) of ERISA, appointed by the Administrator in
accordance with the terms of this Trust Agreement and the Plan.
1.06 "PLAN" shall mean the Plan named in the Adoption Agreement, as
amended from time to time.
1.07 "TRUST" OR "TRUST AGREEMENT" shall mean the Trust named in the
Adoption Agreement, and the trust agreement set forth herein, as amended
from time to time.
1.08 "TRUST FUND" shall mean all sums contributed or transferred to
this Trust, together with all other property and accruals therefrom,
which may hereafter become subject to the Trust.
1.09 "TRUSTEE" OR "TRUSTEES" shall mean the Trustee(s) named in the
Adoption Agreement. If more than one Trustee is named in the Adoption
Agreement, the power to act as Trustee shall require the actions
described in the Adoption Agreement (e.g., any
I-1
<PAGE> 4
Trustee acting alone, a majority of Trustees acting together, or such
other method described in the Adoption Agreement).
If there is a change in Trustee pursuant to Sections 4.08 and
4.09, the Plan and Trust Agreement need not be amended to include such
changes. In lieu of an amendment, the written notice of resignation,
removal or appointment/acceptance, or the formal resolution of the
Company shall constitute the amendment and be made a part of the Plan
and Trust Agreement.
I-2
<PAGE> 5
ARTICLE II
FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
2.01 FIDUCIARIES
The following persons are hereby named as fiduciaries under this Trust.
(a) Fiduciaries With Respect to Appointment of Others
(i) The Company: Acting through its Governing Body, the
Company shall be responsible for the appointment, removal, or
replacement of the Administrator and the Trustee.
(ii) The Administrator: The Administrator shall be
responsible for the appointment, removal, or replacement of any
Investment Manager.
(b) Fiduciary With Respect to Control or Management of the Assets
(i) The Trustee: The Trustee shall be the named fiduciary
with respect to the investment of Trust assets only during such
times as it has exclusive authority and discretion to manage and
control the investment of the Trust Fund. Otherwise, the
Administrator shall be the named fiduciary with respect to the
investment of the Trust Fund, unless the Administrator appoints an
Investment Manager.
(ii) Investment Manager: In its discretion the Administrator
may appoint one or more Investment Managers to manage, acquire, and
dispose of all or a portion of the Trust Fund designated by the
Administrator.
(iii) Administrator: The Administrator may assume the
authority to manage, acquire, and dispose of all or a portion of the
Trust Fund.
(c) Fiduciary With Respect to Plan Administration: The
Administrator shall be the Fiduciary with respect to administration of the Plan.
The responsibilities and duties of the Administrator are set forth in the Plan.
II-1
<PAGE> 6
2.02 JOINT FIDUCIARY RESPONSIBILITIES
This Article II is intended to allocate to each Fiduciary the individual
responsibility for the prudent execution of the functions assigned to him. None
of such responsibilities, nor any other responsibility, shall be shared by two
or more of such Fiduciaries unless such sharing shall be provided by specific
provision of the Plan or of this Trust; and such Fiduciaries have expressly
accepted such responsibilities. Whenever one Fiduciary is required by the Plan
or the Trust to follow the directions of another Fiduciary, the two Fiduciaries
shall not be deemed to have been assigned a shared responsibility. The
responsibility of the Fiduciary giving the directions shall be deemed his sole
responsibility. The responsibility of the Fiduciary receiving those directions
shall be to follow them, insofar as such instructions are consistent with the
provisions of this instrument.
2.03 ALLOCATION OR DELEGATION OF FIDUCIARY RESPONSIBILITIES
By written instrument, each of the Fiduciaries (other than the Trustee
and any Investment Manager) may allocate to others and delegate to others any of
its rights, powers and duties, terminable upon such notice as the delegating
Fiduciary deems prudent. Anyone may serve in more than one fiduciary capacity
with respect to the Plan and Trust.
2.04 CO-FIDUCIARY LIABILITY
It is the intent of this Trust Agreement that each of the Fiduciaries
under the Plan and Trust shall be solely responsible for its own acts or
omissions. Except to the extent imposed by ERISA, no Fiduciary shall have the
duty to question whether any other Fiduciary is fulfilling all of the
responsibilities imposed upon such other Fiduciary by ERISA, as the same may be
amended from time to time, or by any regulations or rulings issued thereunder.
No Fiduciary shall have any liability for a breach of fiduciary responsibility
of another Fiduciary with respect to this Plan and Trust Agreement unless:
(a) he participates knowingly in such breach;
(b) he knowingly undertakes to conceal such breach;
(c) he has actual knowledge of such breach and fails to take
responsible remedial action to remedy said breach; or,
II-2
<PAGE> 7
(d) he has enabled such other Fiduciary to commit a breach of the
latter's fiduciary responsibilities through his negligence in performing
his own specific fiduciary responsibilities under this Trust Agreement.
If the Company establishes more than one trust with a different trustee
pursuant to the terms of the Plan, the Trustee of this Trust and such other
trustee(s) of such other trust(s) shall not be co-trustees (as described in
ERISA). The Trustee shall act only with respect to the Trust established
pursuant to this Trust Agreement.
2.05 INDEMNITY
The Company shall indemnify and hold harmless the Trustee and Trust Fund
against any loss or liability, including reasonable attorney fees imposed upon
the Trustee as a result of any acts taken in accordance with written directions;
by reason of failure to act because of no written directions from the
Administrator, Investment Manager or any other person designated to act on their
behalf; or by reason of the Trustee's good faith execution of its duties in the
administration of this Trust, unless such loss or liability is due to the
Trustee's negligence or misconduct.
2.06 PARTICIPANT DIRECTED FUND
Notwithstanding any provisions of the Trust, a Fiduciary shall not be
responsible for any portion of the Trust attributable to a Participant Directed
Fund. Rules governing a Participant Directed Fund are contained in the Plan.
II-3
<PAGE> 8
ARTICLE III
INVESTMENT OF THE TRUST FUND
3.01 POWERS AND RESPONSIBILITIES
Unless otherwise directed in writing by the Administrator, the Trustee
shall have the full power and authority to invest the funds of the Trust in any
investment permitted by law for the investment of the assets of an employee
benefit trust. The Administrator may appoint an Investment Manager to direct the
investment and management of all or a portion of the Trust Fund, or assume such
responsibilities itself. The Administrator shall notify the Trustee in writing
of its assumption of investment responsibilities, or of the appointment of an
Investment Manager, and may revoke any such appointment by giving written notice
thereof to the Trustee. The appointment, selection, and retention of a qualified
Investment Manager shall be solely the responsibility of the Administrator. The
Trustee is authorized and entitled to rely upon the fact that said Investment
Manager is at all times a qualified Investment Manager under ERISA, until such
time as the Trustee has received a written notice from the Administrator to the
contrary, or otherwise has knowledge of the disqualification of the Investment
Manager. The Trustee shall rely upon the fact that said Investment Manager is
authorized to direct the investment and management of the assets of the Trust,
until such time as the Administrator shall notify the Trustee in writing that
another Investment Manager has been appointed in the place and stead of the
Investment Manager named; or, alternatively, that the Investment Manager named
has been removed and the responsibility for the investment and management of the
Trust assets has been transferred back to the Trustee.
In the event an Investment Manager is appointed by the Administrator, he
shall direct the Trustee with respect to the investment and management of all or
a portion of the assets of the Trust Fund. The Trustee shall not be liable nor
responsible for losses or unfavorable results arising from its compliance with
proper directions of the Investment Manager that are made in accordance with the
terms of the Plan and Trust, and which are not contrary to the provisions of any
applicable Federal or State statute regulating such investment and management of
the assets of an employee benefit trust. All Investment Manager directions
concerning investments shall be signed by such person or persons, acting on
behalf of the Investment Manager, as may be duly authorized in writing. The
Trustee shall be under no duty to question any Investment Manager
III-1
<PAGE> 9
directions; nor to review any securities or other property of the Trust
constituting assets thereof with respect to which an Investment Manager has
investment responsibility; nor to make any suggestions to such Investment
Manager in connection therewith. As promptly as possible, the Trustee shall
comply with any written direction given by the Investment Manager hereunder. The
Trustee shall not be liable in any manner, nor for any reason, for the making or
retention of any investment pursuant to such directions of the Investment
Manager. The Investment Manager shall not direct the purchase, sale, or
retention of any assets of the Trust Fund, if such directions are not in
compliance with any applicable Federal or State statute regulating such
investment and management of the assets of an employee benefit trust.
During any such period or periods of time an Investment Manager is
authorized to direct the investment and management of the Trust assets, the
Trustee shall have no obligation to determine the existence of any conversion,
redemption, exchange, subscription, or other right relating to any securities.
Unless the Trustee receives written instructions from the Investment Manager
within a reasonable time prior to the expiration of any right described in the
preceding sentence, there shall be no obligation by the Trustee to exercise any
such right.
Except as may be provided in ERISA, the Trustee and Investment Manager
shall not be liable for the acts or omissions of the Administrator or the
Employer, nor shall they be liable or responsible for the portion or portions of
the Trust Fund managed by persons other than themselves.
3.02 INSURANCE COMPANIES PROTECTED IN DEALING WITH TRUSTEE
Insurance companies issuing contracts to the Trustee under this Trust
Agreement may deal with the Trustee alone in accordance with the terms and
conditions of such contracts. They shall be fully protected in accepting and
acting upon the request, advice or representation of, or any instrument executed
by, the Trustee. For all such purposes, the Trustee shall be regarded as sole
owner of such contracts. No insurance company shall be required to inquire into
the terms of this Trust Agreement, nor to determine whether action taken by the
Trustee is authorized thereby. No insurance company dealing with the Trustee
shall have any obligation to determine that any person upon whose life the
Trustee makes any contract application is, in fact, an employee of the Employer
or is otherwise eligible for retirement benefits or otherwise participates in
the Plan. Such insurance company shall not be responsible for: the validity of
this Trust; the acts of any person or of the Company in its establishment,
maintenance or administration; or the proper application or disposition of any
money paid by such insurance company, either as dividends or as annuity
payments, as death proceeds
III-2
<PAGE> 10
under contracts, under pledge, or pursuant to surrender thereof. It shall be
conclusively presumed in favor of insurance companies and others dealing with
the Trust in good faith, that any and all actions taken by the Trustee in
connection with any matter or thing connected with this Trust has been duly
authorized, pursuant to the terms of this Trust Agreement.
3.03 OWNERSHIP OF INSURANCE CONTRACTS AND PAYMENT OF INSURANCE
PREMIUMS
The Administrator may direct the Trustee to acquire insurance or annuity
contracts on the lives of individual Participants, or may direct the Trustee to
enter into a group deposit administration contract or contracts with an
insurance company for the purpose of investing all or a portion of the Trust
Fund.
Subject to the power of the Administrator to direct the Trustee as
reserved in the preceding paragraph of this Section 3.03, the Trustee shall have
all the rights and authority of a legal owner of any insurance or annuity
contracts held in the Trust, including the right to execute all necessary
receipts and releases to the insurer. However, the Trustee shall have no duty to
make applications for the purchase of any such contracts, or to pay any premiums
thereon, or to exercise any rights, privileges or options, or to take any other
action with respect to such contracts unless the Trustee receives written
directions to do so by the Administrator.
The Trustee shall notify the Administrator upon receipt of notice of any
premiums due on any such contracts held by it, but shall not be liable for
payment of any premiums on any such contracts unless there are sufficient funds
in the Trust available for the payment of such premiums. The Trustee shall not
have any duty to pay premiums on any such contracts, except out of funds
designated by the Administrator as available therefor.
3.04 STANDARD OF PRUDENCE
In carrying out each of its responsibilities under this Trust, the
Trustee, the Administrator, the Company, and Investment Manager, if any, shall
act solely in the interest of the Members and Beneficiaries. They shall act with
the care, skill, prudence, and diligence, under the circumstances then
prevailing and in the conduct of an enterprise of a like character and with like
aims, as that used by a prudent man acting in a like capacity and familiar with
such matters.
III-3
<PAGE> 11
ARTICLE IV
RIGHTS, POWERS AND DUTIES
4.01 GENERAL DUTIES OF THE TRUSTEE
It shall be the duty of the Trustee to hold the funds received from time
to time from the Employer; to manage, invest and reinvest the Trust Fund
pursuant to the provisions hereinafter set forth; and to collect the income
therefrom. Upon receipt by the Trustee, such funds shall become a part of the
corpus of the Trust Fund, and shall be invested and reinvested as such. The
Trustee shall make payments from the Trust Fund pursuant to the directions of
the Administrator as hereinafter provided. The Trustee shall be responsible only
for such sums as shall actually be received by it as Trustee. It shall not be
the duty of the Trustee to collect any sum from any Employer, nor to determine
or verify the accuracy thereof. The Trustee shall not be concerned with the
determination of the benefits payable to any Member or Beneficiary under the
Plan.
The Trustee shall use ordinary care and reasonable diligence in the
exercise of its powers and the performance of its duties as Trustee hereunder.
It shall not be liable for: any mistake of judgment; any action taken in good
faith; or any loss, unless resulting from its own negligence or willful
misconduct; all, however, subject to the applicable responsibilities imposed
upon the Trustee under ERISA.
4.02 GENERAL DUTIES OF ADMINISTRATOR
The Administrator shall have the duty, authority and responsibility to
direct the administration of the Plan. To the extent provided in the Plan and
this Trust, the Trustee shall follow the written directions of the
Administrator.
When so directed in writing by the Administrator, the Trustee shall
segregate the Trust Fund, set up special trust accounts, and disburse the Trust
Fund when disbursement becomes proper under the terms of the Plan. During the
existence of the Plan, the Administrator may not direct that any payments be
made which would cause any portion of the Trust Fund to be used for or diverted
to purposes other than for the exclusive benefit of the Members and
Beneficiaries.
IV-1
<PAGE> 12
4.03 THIRD PERSONS DEALING WITH TRUSTEE
With respect to any action whatsoever concerning the money, funds or
property in the hands of the Trustee, the signature of the Trustee shall be
sufficient as to any persons not a party hereto. No person not a party hereto
shall be required to interpret the terms and conditions of the Plan or of this
Trust Agreement as to the authority of the Trustee; nor be responsible for
ascertaining that any action of the Trustee is authorized by the terms of the
Plan or of this Trust Agreement.
4.04 SPECIFIC POWERS OF TRUSTEE
Except for those of the following powers which are investment powers,
and which have been delegated specifically by the Administrator to an Investment
Manager separate from the Trustee, and subject to all limitations stated
elsewhere in the Plan and Trust Agreement, the Trustee shall have the following
powers affecting the Trust and Trust Fund:
(a) To hold, invest and reinvest, the principal or income of the
Trust Fund in bonds, common or preferred stock, other securities, or
property (personal, real or mixed, improved or unimproved, and tangible
or intangible);
(b) To hold, invest and reinvest, in any type of
interest-bearing account maintained by any bank or savings and loan
association selected by the Trustee, including: any owned by the Trustee
or any of its affiliates; or any common or collective trust fund, or
pooled investment fund, established and maintained by the Trustee for
trusts exempt under Section 501 of the Internal Revenue Code.
The assets so invested shall be subject to all the provisions of
the instruments establishing and governing such funds. Those instruments
of group trusts, including any subsequent amendments, are hereby
incorporated and made a part of this Trust Agreement.
(c) To acquire an interest as a limited partner in any
partnership or joint venture, all in accordance with the provisions of
ERISA and any regulations issued pursuant thereto;
IV-2
<PAGE> 13
(d) To manage, control, purchase, sell, convey, exchange,
partition, divide, subdivide, improve, or repair, any or all property of
the Trust Fund. In connection with any disposal of property, to grant
options and sell upon deferred payments. Upon termination of the Trust,
to sell forthwith any or all property of the Trust Fund and convert the
same into cash;
(e) To borrow or raise money for the purpose of the Trust upon
such terms as the Trustee may determine;
(f) If the Trust Fund shall at any time contain any real
property, to lease such property or any part thereof, for terms within
or extending beyond the duration of the Trust. To grant for like terms
the right to mine or drill for and remove therefrom gas, oil, and other
minerals; to create restrictions, easements, and other servitudes
thereon;
(g) With respect to bonds, shares of stock, and other
securities: to have all the rights, powers, and privileges of an owner,
including though without limiting the foregoing, the power of voting,
giving proxies, payment of calls, assessments, and other powers deemed
expedient for the protection of the interests of the Trust Fund; to
participate in voting trusts, pooling agreements, assenting to corporate
sales, leases and encumbrances, regardless of any limitations elsewhere
in the Plan and this Trust Agreement relative to investments by the
Trustee; to have the power of selling or exercising stock subscription
or conversion rights, participating in foreclosures, reorganizations,
consolidations, mergers, and liquidations. In connection with any such
proceedings, to deposit securities with and transfer titles to any
protective or other committee, under such terms respecting deposit
thereof as the Trustee shall determine;
(h) To hold, sell, collect, sue for, or change any investments,
in its own name or in its name as Trustee or in the name of its nominee
or nominees, with or without disclosure of fiduciary relationship, with
the Trustee being responsible for the acts of any such nominee affecting
such property, and the books of the Trustee showing at all times that
all such investments are part of the Trust Fund;
IV-3
<PAGE> 14
(i) To retain all or any portion of the Trust Fund in cash
temporarily awaiting investment without liability for interest thereon;
to retain in cash without liability for interest thereon so much of the
Trust Fund as the Trustee may deem advisable for the purpose of meeting
contemplated payments under the Plan; and to deposit cash in any bank or
savings and loan association selected by it, including any owned by the
Trustee or any of its affiliates;
(j) To abandon, compromise, contest, and arbitrate claims and
demands; to institute, compromise, and defend actions at law or equity
(but without obligation to do so); and to employ such counsel as the
Trustee shall deem advisable, all at the risk and expense of the Trust
Fund;
(k) To make loans to participants, if provided for in the Plan,
and only upon the direction of the Administrator;
(l) To advance its own funds to the Trust, if permitted by law,
for any Trust purpose. Such advances with legal interest thereon shall
be a first lien on the principal and the gross income of the Trust Fund,
and to be first repaid out of the gross income or principal of the Trust
Fund;
(m) Upon any division, or partial or final distribution of the
Trust Fund, to partition, allot, and distribute the Trust Fund in
undivided interest or in kind, or partly in money and partly in kind, at
fair market values determined by the Trustee; and in the Administrator's
sole discretion, to sell such property as the Administrator may deem
necessary to make division or distribution;
(n) To hold, invest and reinvest, in any single premium contract
or group annuity contract of deposit administration, immediate
participation or other group-type or individual-type contract issued by
a life insurance company authorized to do business under the laws of two
or more States and qualified to be an Investment Manager. However, the
Trustee shall not be liable for the validity of any statements contained
in any application for any such contract, which statements cover
information beyond the Trustee's knowledge;
(o) To pay expenses of administering the Plan and Trust pursuant
to Section 4.07, to the extent such expenses are not paid by the
Employer.
IV-4
<PAGE> 15
All discretions in this Trust Agreement conferred upon the Trustee
shall, unless specifically limited, be absolute. The enumeration of certain
powers and discretions of the Trustee is not to be construed as limiting its
general powers and discretions. The Trustee is hereby vested with and has, as to
the Trust Fund, and in the execution of this Trust Agreement (but subject at all
times to any specific provisions and limitations in the Plan and this Trust
Agreement contained), all the powers and discretions that any absolute owner of
property has or may have.
4.05 RECORDS TO BE MAINTAINED BY TRUSTEE
The Trustee shall maintain full and complete records of its transactions
for, and funds held for the account of, the Trust. Its books and records
relating thereto shall be open to inspection and audit at all reasonable times
by the Company, the Administrator, or their duly authorized representatives.
4.06 REPORTS TO BE FURNISHED BY THE TRUSTEE
Within sixty (60) days after the end of each Plan Year and at such other
times determined by the Administrator, the Trustee shall file with the
Administrator a written statement of account setting forth all investments,
transactions, receipts, and disbursements effected by it during the period. Such
statement shall contain an exact description of all property purchased and sold,
the cost or proceeds of sale, and show the investments held on the last day
thereof, including the cost of each item as carried on the books of the Trustee,
and the fair market value thereof, if applicable.
When the Trustee is unable to arrive at a value based upon information
from independent sources, it may rely upon information from the Company,
Administrator, appraisers, or other sources; and shall not incur any liability
for inaccurate valuation based on good faith reliance upon such information. The
reasonable costs incurred in establishing values of Trust assets shall be a
charge against the Trust Fund.
The Administrator may approve the Trustee's written statement of account
by written notice of approval delivered to the Trustee, or by failure to deliver
to the Trustee written objections to such statement of account within sixty (60)
days from the date the statement of account was delivered to the Administrator.
IV-5
<PAGE> 16
The statement of account shall be deemed approved upon receipt by the
Trustee of the Administrator's written approval of the statement of account, or
upon the passage of the sixty day period of time, except for any matters covered
by written objections that have been delivered to the Trustee by the
Administrator and for which the Trustee has not given an explanation or made an
adjustment satisfactory to the Administrator.
4.07 COMPENSATION OF THE TRUSTEE, PAYMENT OF TAXES, ETC.
All expenses of administering the Plan and Trust, including the
Trustee's compensation for its services as may from time to time be agreed upon,
shall be paid from the Trust Fund unless paid by the Employer. However, if the
Trustee is an Employee receiving full-time pay from an Employer, he shall not
receive compensation for his services. The Trustee is authorized to determine
and pay out of the Trust all other expenses, including taxes, fees, and
investment and other expenses incurred in connection with the administration of
the Trust Fund; or for which the Trust, or the Trustee in discharge of its
duties as Trustee thereunder, may become liable, unless paid by the Employer. If
the Trust or any part of it shall become liable for the payment of any property,
estate, inheritance, income, or other charge, tax or assessment which the
Trustee shall be required to pay, the Trustee shall be authorized to pay such
item out of any monies or other property in its hands for the account of the
persons whose interest hereunder is liable therefor. At least ten (10) days
prior to making any such payment, the Trustee shall give the Administrator
written notice of its intention to do so. Prior to making any transfers or
distributions from the Trust Fund, the Trustee also may require such release or
other documents from any lawful taxing authority as it shall deem necessary or
advisable.
Any amount hereunder due the Trustee, or for which the Trustee may
become liable as Trustee under the Plan and this Trust Agreement, which has not
been paid by the Employer within a reasonable time shall become a lien on the
Trust Fund and said amount may be paid by the Trustee from the Trust Fund as an
expense thereof.
In the event any distributions made to Members or Beneficiaries shall
constitute taxable income under the Federal Insurance Contributions Act, the
Federal Unemployment Tax Act, or any amendments thereto, or under the laws of
any State, then at the time distribution is made and upon direction of the
Administrator to the Trustee, any Federal or State income tax due thereon shall
be withheld from any distributions made to the Member or Beneficiary. The
amounts so withheld by the Trustee shall be paid to the respective Federal and
State governments.
IV-6
<PAGE> 17
4.08 RESIGNATION OR REMOVAL
The Trustee may resign by mailing to the Administrator and the Company,
at their last known addresses, written notice of resignation, which shall become
effective upon the expiration of thirty (30) days following the date of mailing
or upon written acceptance of the resignation by the Company prior to that time.
The Company may remove the Trustee on thirty (30) days written notice,
by mailing to the Trustee written notice of removal (which notice may be waived
by the Trustee).
In the event of its resignation or removal, the Trustee shall transfer,
assign and deliver the Trust Fund to the successor Trustee, after retaining such
reasonable amount it deems necessary to provide for its expenses in the
settlement of its accounts, its compensation, and any taxes or advances
chargeable against or payable out of the Trust Fund and known to the Trustee.
The Trustee shall render a full and complete accounting of all assets and funds
held by it within thirty (30) days of its giving notice of resignation or the
receipt by the Trustee of notice of removal.
Upon acceptance of the Trust and without further assignment or transfer,
the successor shall become vested with all the title, estate, rights and powers
(including discretionary powers), and be subject to all the duties and
obligations of the Trustee originally appointed. The resigned or removed Trustee
shall have no further responsibility to act hereunder except as to the rendering
of a final accounting.
Until the date it shall have become such successor Trustee, no successor
Trustee shall be liable or responsible for anything done or omitted in the
administration of the Trust; nor, except upon the Administrator's written
direction, shall it be required to inquire into or take any action concerning
the acts of any predecessor Trustee.
Upon the failure of the Company to appoint a successor Trustee by the
effective date of the resignation or removal of the Trustee, the Administrator
shall become successor Trustee until another successor Trustee is appointed.
IV-7
<PAGE> 18
4.09 FILLING VACANCIES
Vacancies occurring in the trusteeship, however caused, shall be filled
by written designation of the Company of a successor Trustee and the successor
Trustee's written acceptance of the Trust. Within sixty (60) days after its
occurrence, any vacancy not filled under the foregoing provisions may be filled
by appointment of a Trustee by a court of competent jurisdiction on application
by the Company or any person interested in the Trust.
4.10 INTERPLEADER, ETC., IN CASE OF DISPUTES
In the event that any dispute shall arise as to the person or persons to
whom payment or delivery of any funds, contracts or property shall be made, the
Trustee may retain such funds, contracts or property without liability for
interest. Until a satisfactory agreement covering such dispute, or a final
adjudication concerning it, shall have been made, the Trustee may decline to
make delivery. In such event, the Trustee may file an appropriate action in
interpleader, the costs of same to be borne by the parties thereto, and not by
the Trustee. However, if the costs described are not borne by the parties, then
they shall be costs of administering the Trust.
4.11 COURT PROCEEDINGS
In any application to the courts, or proceeding or action in the courts,
only the Company and the Trustee shall be necessary parties, and no Members or
other persons shall be entitled to any notice or service of process. After all
appeals, if any, any judgment entered in such a proceeding or action shall be
conclusive upon all claimants under this Trust.
4.12 ADEQUACY OF TRUST FUND
The Trustee shall not be responsible for the adequacy of the Trust Fund
to meet and discharge any or all payments and liabilities under the Plan. Except
for the Administrator, all persons dealing with the Trustee are released from
the necessity of inquiring into the decision or authority of the Trustee to act,
and from responsibility for the application of any monies, securities or other
property paid or delivered to the Trustee.
IV-8
<PAGE> 19
4.13 DIRECTIONS TO TRUSTEE
As evidence of the authority of any person or persons acting as
Administrator, The Trustee may accept a certified copy of the resolutions of the
Governing Body of the Company naming such person or persons as the
Administrator; and shall be entitled to recognize as such and act upon the
instructions, directions, consents, and requests of the Administrator last
certified to it. The Trustee may accept, as evidence of any action taken or
resolution adopted by the Administrator, a written memorandum or certificate
signed by any one or more persons authorized in writing by the Administrator to
so sign. The Trustee may continue to act in accordance with any such action or
resolution until receipt by it of notice rescinding or superseding such action
or resolution.
The Trustee shall be held harmless in relying upon any certificate,
notice, resolution, consent, order, or other communication purporting to have
been signed by the Administrator which it believes to be genuine, and without
obligation on the part of the Trustee to ascertain whether or not the provisions
of the Plan are thereby being complied with.
The Trustee shall not be required to make any investigation to determine
the mailing address of any Member or the identity or mailing address of any
Beneficiary, and shall be entitled to withhold making any payments until such
information is certified to it by the Administrator.
Notices or communications from the Trustee to the Administrator shall be
addressed to such person or persons as shall have been certified to the Trustee
by the Administrator, and shall be sent to such person or persons at whatever
address he or they shall have prescribed in writing to the Trustee.
4.14 ADVICE OF ADMINISTRATOR
If at any time the Trustee is in doubt concerning the course which it
shall follow in connection with any matter relating to the administration of the
Trust, it may request the Administrator to advise it with respect thereto. The
Trustee may rely, without liability, upon the advice or direction which is given
by the Administrator in response to such request.
IV-9
<PAGE> 20
4.15 RECEIPT FOR BENEFIT PAYMENT
On final payment or distribution to any Member or his Beneficiary or the
legal representatives of any such person in accordance with the provisions of
the Plan and this Trust Agreement, the Trustee shall be entitled to demand a
receipt for full satisfaction of all claims against the Trust, the Trustee, the
Administrator, and the Employers.
4.16 INVESTMENT IN SECURITIES OF THE COMPANY
The Administrator may direct that the Trust Fund be invested and
reinvested in the common stock, preferred stocks, bonds, or other securities of
the Company; and to purchase from and to loan to the Company any property
(whether real, personal or mixed), provided such investments are made in
accordance with ERISA and regulations issued thereunder.
Section 407 of ERISA limits the percentage of the Trust Fund that may be
invested in "qualifying employer securities" or "qualifying employer real
properties" (both as defined in Section 407(d) of ERISA). In general, the
maximum percentage is as follows:
(a) If the Plan is an "eligible individual account plan" (as
defined in Section 407(d) of ERISA; e.g., a defined contribution plan,
but not a money purchase plan [unless a money purchase plan meets
certain requirements described in clause (iii) of Section 407(d)(3)(A)
of ERISA]), up to 100% of the Trust Fund may be so invested.
(b) If the Plan is a defined benefit plan or a money purchase
plan which is not an "eligible individual account plan", only up to 10%
of the Trust Fund may be so invested. In general, the preceding 10% is
determined as of the date of the acquisition of such "qualifying"
investments.
4.17 TRANSFER OF TRUST ASSETS
Upon the direction of the Administrator, the Trustee shall transfer
assets to the trust of another qualified retirement plan, or to such other trust
or trusts created pursuant to the terms of the Plan; and accept the transfer of
assets from a trust created pursuant to a qualified retirement plan.
IV-10
<PAGE> 21
ARTICLE V
AMENDMENT, TERMINATION AND DURATION OF TRUST
5.01 AMENDMENT
The Company shall have the right at any time and from time-to-time to
modify or amend this Trust Agreement in whole or in part. However, except as
otherwise expressly provided in the Plan and Trust, no amendment shall be made
at any time pursuant to which the Trust Fund may be diverted to purposes other
than for the exclusive benefit of the Members and Beneficiaries. Further, no
modification or amendment which affects the rights, duties or responsibilities
of the Trustee may be made without the Trustee's consent.
Notwithstanding anything contained herein to the contrary, upon
reasonable notice to the Trustee, this Trust Agreement may be amended at any
time by the Company if deemed necessary to conform to the provisions and
requirements of ERISA or the Internal Revenue Code or regulations promulgated
pursuant thereto in order to maintain the tax-exempt status hereof thereunder,
or to conform to the provisions and requirements of any law, regulation, order
or ruling affecting the character or purpose of the Plan or Trust.
5.02 TERMINATION
This Trust Agreement may be terminated at any time by a written
instrument signed on behalf of the Company by its appropriate officer or
officers and delivered to the Trustee. As the result of such termination, no
part of the Trust Fund shall be used for or diverted to purposes other than for
the exclusive benefit of the persons entitled to benefits under the Plan, except
as provided in this Section 5.02, or as otherwise expressly provided for in the
Plan and Trust.
Notwithstanding anything contained in this Trust Agreement to the
contrary, if the Plan is a defined benefit pension plan (as defined by ERISA),
and upon termination of the Plan there remains funds in the Trust Fund after
payment of all expenses and the satisfaction of all liabilities with respect to
persons entitled to benefits under the Plan, then the Trustee shall disburse
such remaining funds in accordance with the provisions of the Plan, which may
include returning such funds to an Employer.
V-1
<PAGE> 22
5.03 TRUST IRREVOCABLE
The Trust hereby created shall be irrevocable. However, nothing herein
contained shall prevent the Company from terminating the Trust in the manner
provided in Section 5.02.
5.04 DURATION OF TRUST
The Trust hereby created shall continue in effect for the maximum period
of time permitted by law, unless this Trust is terminated in accordance with
Section 5.02.
V-2
<PAGE> 23
ARTICLE VI
MISCELLANEOUS
6.01 RELATION TO PLAN
All words and phrases used herein shall have the same meaning as in the
Plan, and this Trust Agreement and the Plan shall be read and construed
together. In the event of an irreconcilable conflict between this Trust
Agreement and the Plan with regards to the duties, liabilities, rights, and
powers of the Trustee, this Trust Agreement shall prevail and control. Whenever
in the Plan it is provided that the Trustee shall act as therein provided, it
shall be empowered, and is hereby authorized, to do so for all purposes as fully
as though specifically so provided herein. However, no amendments to the Plan
made subsequent to the date hereof which substantially increase the duties or
responsibilities of the Trustee shall bind or affect the Trustee until approved
in writing by the Trustee. The Administrator shall furnish the Trustee with
copies of the Plan and all amendments thereto.
6.02 ASSIGNMENT
Except as may be provided in the Plan, none of the benefits, payments,
proceeds, claims or rights of any Member or Beneficiary hereunder shall be
subject to any claims of any creditor of any Member or Beneficiary. In
particular, the same shall not be subject to attachment or garnishment or other
legal process by any creditor of any Member or Beneficiary. No Member or
Beneficiary shall have the right to alienate, anticipate, commute, pledge,
encumber, or assign any of the benefits which he may expect to receive,
contingently or otherwise, under this Trust Agreement and the Plan. The
provisions of this Section shall not apply in the case of a Qualified Domestic
Relations Order.
6.03 SUCCESSOR COMPANY
If any successor to the Company continues the Plan, it shall
concurrently become a successor party to this Trust Agreement by giving to the
Trustee written notice by duly authorized persons of its adoption of the Plan
and this Trust Agreement. Said written notice shall constitute such successor a
signatory hereto.
VI-1
<PAGE> 24
6.04 USE OF TRUST FUNDS
Except as provided for in this Trust Agreement and the Plan, under no
circumstances shall any contributions by an Employer to the Trust, or any part
of the Trust Fund, be recoverable by an Employer from the Trustee, or be used
for or diverted to purposes other than for the exclusive purposes of providing
benefits to Members and Beneficiaries; provided, however, that:
(a) In the event an Employer requests an initial letter of
determination from the Internal Revenue Service to the effect that the
Plan and this Trust satisfy the requirements of Sections 401 and 501 of
the Internal Revenue Code, but such request is denied, the contributions
of such Employer shall be returned by the Trustee to the Employer within
one (1) year of such denial, but only if the request was 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.
(b) To the extent disallowed as a deduction under the Internal
Revenue Code Section 404, a contribution of an Employer for any Plan
Year shall be returned by the Trustee to the Employer within one (1)
year after the final disallowance of the deduction by the Internal
Revenue Service or the Courts.
(c) A contribution made by an Employer due to a mistake of fact
may be returned to the Employer within one (1) year after payment of the
contribution.
6.05 UNENFORCEABLE PROVISIONS
If any provision of this Trust Agreement shall be for any reason invalid
or unenforceable, the remaining provisions shall, nevertheless, be carried into
effect.
6.06 CONSTRUCTION
This Trust Agreement shall be construed, administered, and enforced
fairly and equitably in accordance with the purposes of the Plan and in
accordance with ERISA and the Internal Revenue Code; and where State law is
applicable, under laws of the state specified in the Adoption Agreement.
VI-2
<PAGE> 25
6.07 POOLING OF ASSETS
In the event the Company adopts or becomes a contributing employer under
another plan which is qualified under Section 401(a) of the Internal Revenue
Code of 1954, as amended, or any successor to such Section 401(a) plan, the
Trustee from time to time may pool all or any portion of the assets of this
Trust Fund with assets belonging to such other tax-qualified plan into one
single Trust Fund. The Trustee may commingle such assets, make joint or common
investments, and carry joint accounts on behalf of this Trust Fund and such
other trust, allocating undivided shares or interests in such investments or
accounts or in any pooled assets to the two or more trusts in accordance with
their respective interests. The Trustee may also buy or sell any assets or
undivided interests therein in this Trust Fund, or in any other trust with which
the assets of this Trust Fund may be pooled, to or from this Trust Fund or such
other trust at such prices or valuations as the Trustee may in good faith
determine to be the fair market value of such assets or undivided interests.
6.08 INDEMNITY AND INSURANCE
This Section shall apply only if the Trustee or Trustees are individuals
employed by the Company or an Employer. This Section shall not apply if the
Trustee is a bank, trust company, insurance company or other corporation.
In its discretion, the Company may obtain, pay for, and keep current a
policy or policies of insurance, insuring the Trustees against any and all
liabilities, costs and expenses (including attorney's fees) incurred by the
Trustees as a result of any act, or omission to act, in connection with the
performance of their duties, responsibilities, and obligations under the Plan
and Trust and any applicable Federal or State law.
If the Company does not obtain, pay for, and keep current any type of
insurance policy or policies referred to in the preceding paragraph, or if such
insurance is provided but the Trustees incur any costs or expenses which are not
covered under such policies, then, in either event, the Company, to the extent
permitted by law, shall indemnify and hold harmless such parties against any and
all costs, expenses, and liabilities incurred by such parties in performing
their duties and responsibilities under the Plan and Trust, including attorney's
fees, provided such party or parties were acting in good faith within what was
reasonably believed to have been in the best interests of the Plan and Trust and
the Participants and Beneficiaries of the Plan and Trust.
VI-3
<PAGE> 26
MODIFICATION TO LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER TRUST AGREEMENT
Notwithstanding anything contained within or to the contrary in the
Louis Kravitz & Associates, Inc. Master Trust Agreement, the following shall
apply to the Haskel International, Inc. Retirement Savings Trust effective June
1, 1997.
1. Section 2.05 is hereby amended by deleting the phrase "in accordance
with written directions;" and inserting in lieu thereof "in accordance
with oral, electronic or written directions received from an Investment
Manager, the Administrator or a Participant with investment
discretion;".
2. Section 3.01 is hereby amended by inserting the following new sentence
immediately before the second sentence of the first paragraph:
"If the Trustee is a nondiscretionary Trustee, the Trustee is not
authorized to and will not make any decision or direction with respect
to the investment of the Trust Fund."
3. Section 4.01 is hereby amended by inserting the following new sentence
immediately before the second sentence of the first paragraph:
"A nondiscretionary Trustee will only manage, invest and reinvest the
funds at the direction of an Investment Manager, the Administrator or a
Participant with investment discretion."
4. Section 4.04 is hereby amended by inserting the following new paragraph
immediately before the last paragraph:
"In the case of a nondiscretionary Trustee, the exercise of any of the
preceding powers may not conflict with the investment direction of any
Investment Manager, the Administrator or any Participant with investment
discretion."
5. Section 4.04(e) is hereby amended in its entirety to read as follows:
"(e) To borrow or raise money for the purpose of the Trust upon such
terms as the Trustee may determine, if a discretionary Trustee;"
6. Section 4.04(g) is hereby amended by adding at the end thereof the
following paragraph:
"If the provisions of Articles VII and VIII conflict with this
subsection (g), the provisions of Articles VII and VIII shall govern."
<PAGE> 27
7. Section 4.04(i) is hereby amended by deleting the phrase "as the Trustee
may deem advisable" and inserting in lieu thereof "as reasonable".
8. Section 4.04 is hereby amended by deleting the phrase "The Trustee is
hereby vested" in the last sentence of the last paragraph, and inserting
in lieu thereof "The Trustee, with the exception of any nondiscretionary
Trustee, is hereby vested".
9. Section 4.06 is hereby amended by deleting the phrase "Within sixty (60)
days after the end of each Plan Year" in the first paragraph, and
inserting in lieu thereof "At the end of each month".
10. Section 6.06 is hereby amended by deleting the phrase "the state
specified in the Adoption Agreement" and inserting in lieu thereof "the
state of Colorado".
11. New Articles VII and VIII are hereby added to read as attached hereto as
Exhibit II.
IN WITNESS WHEREOF, the Company and the Trustee have adopted this
Modification as of the 3rd day of June , 1997.
------- ---------
/s/Haskel International, Inc.
--------------------------------------
The "Company"
By /s/[SIG], Secretary
-----------------------------------
First Trust Corporation
The "Trustee"
By
-----------------------------------
<PAGE> 28
7. Section 4.04(i) is hereby amended by deleting the phrase "as the Trustee
may deem advisable" and inserting in lieu thereof "as reasonable".
8. Section 4.04 is hereby amended by deleting the phrase "The Trustee is
hereby vested" in the last sentence of the last paragraph, and inserting
in lieu thereof "The Trustee, with the exception of any nondiscretionary
Trustee, is hereby vested".
9. Section 4.06 is hereby amended by deleting the phrase "Within sixty (60)
days after the end of each Plan Year" in the first paragraph, and
inserting in lieu thereof "At the end of each month".
10. Section 6.06 is hereby amended by deleting the phrase "the state
specified in the Adoption Agreement" and inserting in lieu thereof "the
state of Colorado".
11. New Articles VII and VIII are hereby added to read as attached hereto as
Exhibit II.
IN WITNESS WHEREOF, the Company and the Trustee have adopted this
Modification as of the 3rd day of June , 1997.
------- ---------
/s/Haskel International, Inc.
--------------------------------------
The "Company"
By /s/LONNIE D. SCHNELL, Secretary
-----------------------------------
First Trust Corporation
The "Trustee"
By /s/MARK A. KELLEY, SVP
-----------------------------------
<PAGE> 29
EXHIBIT II
ARTICLE VII
VOTING/PROXY CONTESTS
7.01 INFORMATION TO TRUSTEE
At least two (2) weeks before the date scheduled for a meeting of the
shareholders of the Company or for the submission of a matter to the
shareholders to act without a meeting by means of written consent, the
Administrator shall deliver to the Trustee a list of the names and addresses of
Participants entitled to deliver proxies or consents for Company Stock showing
the number of shares of Company Stock each Participant is entitled to vote. The
Administrator shall date and certify as correct the Participant list.
7.02 INFORMATION TO PARTICIPANTS
Before each meeting of, or the submission of consent forms to, the
Company's shareholders, the Company shall timely deliver to the Trustee any
proxy or consent solicitation materials the Company may have prepared. Upon
receipt of such materials, the Trustee shall distribute copies thereof to each
Participant entitled to vote Company Stock, together with a form prepared or
approved by the Trustee by which the Participant may instruct the Trustee on how
to vote the Company Stock credit to his Account or whether such consent is to be
given. The Trustee shall also distribute to Participants copies of materials
prepared and submitted to the Trustee by parties other than the Company
regarding any contested matter under consideration, together with a similar
instruction form prepared or approved by the Trustee.
7.03 EXPENSES
The Trustee shall have the right to require payment in advance by the
Company and any such contesting parties of all reasonable anticipated expenses
of the Trustee in connection with the distribution of information to and the
processing of instructions received from the Participants.
<PAGE> 30
7.04 VOTING
The Trustee shall vote Company Stock through proxy or consent in
accordance with instructions received from Participants. The Trustee shall vote
or give consent with respect to Company Stock for which instructions are not
received, as directed by the Administrator, and, in the absence of direction by
the Administrator, the Trustee shall vote or give consent in the same
proportions and in the same way as shares of Company Stock credited to
Participants' Accounts are voted in accordance with Participant instructions.
7.05 CONFIDENTIALITY
The Trustee shall keep Participant voting instructions in confidence.
The Trustee shall not reveal any such instructions to the Company, its officers,
directors, employees or representatives. Notwithstanding the foregoing, the
Trustee may inform the Company or a contesting party, at the request of either
of them, of the number of shares of Company Stock for which voting instructions
have been received at a given point in time, but the Trustee shall not reveal
the manner in which such shares of Company Stock are to be voted until the votes
are cast.
7.06 DELEGATION OF TRUSTEE DUTIES
To the extent permitted by law, the Trustee may delegate to the
Administrator any one or more of the rights, powers and duties prescribed for it
under this Article VII. Any delegation of the Trustee's rights, powers and
duties hereunder shall be terminable by the Trustee upon such notice to the
Administrator as the Trustee deems appropriate.
<PAGE> 31
ARTICLE VIII
TENDER OFFERS
8.01 RETENTION/SALE OF COMPANY STOCK
The Trustee has no authority or responsibility to sell or dispose of
Company Stock acquired by the Trust, regardless of fluctuations in value of the
Company Stock, except in the following circumstances:
(a) In the normal course of Trust administration, the Trustee
shall sell Company Stock if directed to do so by the Participant or to
satisfy Plan administration and distribution requirements as directed by
the Administrator, or in accordance with provisions of this Trust
Agreement specifically authorizing such sales.
(b) In the event of a Tender Offer, the Trustee shall sell,
convey, or transfer Company Stock only in accordance with the written
instructions of Participants delivered to the Trustee as hereafter
provided in this Article VIII.
8.02 SUSPENSION OF COMPANY STOCK PURCHASES
In the event of a Tender Offer, the Trustee shall suspend all purchases
of Company Stock.
8.03 INFORMATION TO TRUSTEE
Promptly after the Filing Date, the Administrator shall deliver to the
Trustee a list of the names and addresses of Participants with Company Stock
credited to their Accounts showing the number of such shares so credited. The
Administrator shall date and certify as correct the Participant list.
<PAGE> 32
8.04 INFORMATION TO PARTICIPANTS
The Trustee shall request confidential written instructions from
Participants who wish to tender Company Stock credited to their Accounts
pursuant to the Tender Offer. In seeking such instructions, the Trustee shall
distribute and/or make available to each affected Participant all or any portion
of the following materials deemed relevant by the Trustee:
(a) A copy of the description of the terms and conditions of the
Tender Offer filed with the Securities and Exchange Commission on
Schedule 14D-1.
(b) If requested by the Company, a statement from Company
management setting forth its position with respect to the Tender Offer
which is filed with the Securities and Exchange Commission on Schedule
14D-9 and/or a communication from the Company conforming with 17 C.F.R.
240.14d-9(e), as amended.
(c) An instruction form to be used by any Participant who wishes
to instruct the Trustee to tender all shares of Company Stock held in
the Participant's Account in response to the Tender Offer. The
instruction form shall state that (i) if the Participant fails to return
an instruction form to the Trustee by the indicated deadline, the
Trustee will not tender any shares of Company Stock held in the
Participant's Accounts and (ii) the Participant's instructions to the
Trustee shall be kept confidential.
(d) Such additional material or information as the Trustee may
consider necessary to assist the Participant in completing or delivering
the instruction form (and any amendments thereto) to the Trustee on a
timely basis.
<PAGE> 33
8.05 EXPENSES
The Trustee shall have the right to require payment in advance by the
Company and the party making the Tender Offer of all reasonably anticipated
expenses of the Trustee in connection with the distribution of information to
and the processing of instructions received from Participants.
8.06 FOLLOW-UP EFFORTS; OTHER INFORMATION
The Trustee shall make such reasonable follow-up efforts including,
without limitation, additional mailings or deliveries, bulletins, and postings
in work areas, as the Trustee considers appropriate under the circumstances to
ensure that each Participant is made aware of his right to respond to the Tender
Offer. The Company shall furnish the information described in Section 8.04 to
former Participants who have received shares of Company Stock so recently as to
not be shareholders of record. The Trustee is hereby authorized to tender any
shares of Company Stock it may received from such former Participants in
accordance with appropriate instructions from them.
8.07 NO RECOMMENDATIONS
Neither the Administrator nor the Trustee shall express any opinion or
give any advice or recommendation to any Participant concerning the Tender
Offer, nor shall they have any authority or responsibility to do so. The Trustee
has no duty to monitor or police the party making the Tender Offer or the
Company in promoting or resisting the Tender Offer; provided, however, that if
the Trustee becomes aware of activity which on its face reasonably appears to
the Trustee to be materially false, misleading, or coercive, the Trustee shall
demand promptly that the offending party take appropriate corrective action. If
the offending party fails or refuses to take appropriate corrective action, the
Trustee shall communicate with affected Participants in such manner as it deems
advisable.
8.08 TENDER OF COMPANY STOCK
The Trustee shall sell, convey, or transfer Company Stock pursuant to
the terms and conditions of the Tender Offer as directed by Participants on the
instruction forms.
<PAGE> 34
8.09 CONFIDENTIALITY
The Trustee shall keep Participant instructions to tender Company Stock
in confidence. The Trustee shall not reveal or release any such instructions to
the Company, its officers, directors, employees or representatives. If some but
not all shares of Company Stock held in the Trust are sold pursuant to the
Tender Offer, the Company, with the Trustee's cooperation, shall take such
action as is necessary to maintain the confidentiality of Participant records
including, without limitation, establishment of security systems and procedures
which restrict access to Participant records and retention of any independent
agent to maintain such records. If an independent recordkeeping agent is
retained, such agent must agree, as a condition of its retention by the Company,
not to disclose the composition of any Participant Account to the Company, its
officers, directors, employees or representatives.
8.10 INVESTMENT OF PROCEEDS
If Company Stock is sold pursuant to the Tender Offer, the
Administrator, the Investment Manager or the Participant shall direct the
Trustee regarding the investment of the proceeds of such sale; provided,
however, that such proceeds shall not be reinvested in Company Stock in the
absence of written instructions to the Trustee from affected Participants.
8.11 DELEGATION OF TRUSTEE DUTIES
To the extent permitted by law, the Trustee may delegate to the
Administrator any one or more of the rights, powers and duties prescribed for it
under this Article VIII. Any delegation of the Trustee's rights, powers and
duties hereunder shall be terminable by the Trustee upon such notice to the
Administrator as the Trustee deems appropriate.
<PAGE> 35
HASKEL INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN
<PAGE> 36
MODIFICATION TO LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER 401(k) PROFIT SHARING PLAN
AND ADOPTION AGREEMENT
RE: HASKEL INTERNATIONAL, INC.
RETIREMENT SAVINGS PLAN
Notwithstanding anything contained within or to the contrary in the
Louis Kravitz & Associates, Inc. Master 401(k) Profit Sharing Plan and Adoption
Agreement, the following shall apply to the Haskel International, Inc.
Retirement Savings Plan effective June 1, 1997.
1. Section 2.53 is hereby amended in its entirety to read as follows:
"2.53 "Investment Income" shall mean the net gain or loss of the Trust
from investments, as reflected by interest payments, dividends, realized
and unrealized gains and losses on securities, and other similar
transactions. In determining the Investment Income of the Trust for any
period, assets shall be valued on the basis of their fair market value
as determined in accordance with Section 5.02. The Investment Income, if
any, of assets held under each Investment Fund(s) or segregated accounts
maintained by the Trustee on the direction of the Administrator shall be
determined separately."
2. Article V is hereby amended by inserting a new Section 5.04A after
Section 5.04, to read as follows:
"5.04A Allocation of Expenses
Section 5.04 discusses the allocation of Investment Income. This Section
5.04A discusses the allocation of expenses. In general, Article XII
provides that expenses of the Plan and Trust shall be paid from the
assets of the Trust to the extent such expenses are not paid by an
Employer. In addition, if Section 5.07 so provides, Forfeitures
attributable to Employer Contribution Accounts shall be used to pay
expenses of the Plan and Trust.
If expenses of the Plan and Trust are paid either (1) by an Employer, or
(2) through the use of Forfeitures, there is no need to allocate such
expenses to the Accounts of Members and Beneficiaries. However, where
expenses are paid from the assets of the Trust, such expenses shall be
allocated to Accounts in accordance with uniform, consistent and
nondiscriminatory rules established by the Administrator. [For example,
expenses may be allocated to only certain Accounts or all Accounts. In
addition, each affected Account may be allocated a prorata share of an
expense, or each affected Account may be allocated an equal share of an
expense.]"
<PAGE> 37
3. Section 7.07(a) is hereby amended by deleting the phrase "(to which no
Investment Income shall be credited)".
4. Section 2.100 is hereby amended in its entirety to read as follows:
"2.100 "Valuation Date(s)" shall generally mean the end of each
"business" day unless the Investment Fund or the per share value of the
Investment Fund is not normally valued daily. For example, the
Investment Fund may be valued weekly, monthly, quarterly, annually or at
other time intervals.
In the case of an Investment Fund which meets the foregoing exception,
the term Valuation Date shall mean the date(s) such Investment Fund is
actually valued. However, in no event shall a valuation occur less
frequently than annually, with the last day of each Plan Year serving as
a Valuation Date (or one of the Valuation Dates)."
5. Section 2.01 is hereby amended by adding the following paragraph at the
end thereof:
"Notwithstanding anything in the Plan to the contrary, the value of an
Account as of any time shall be determined on a "cash" basis. That is,
contributions or Investment Income which have accrued to an Account
shall not be recognized for purposes of determining the value of such
Account until such amount is actually credited (or deposited) to such
Account."
6. Article II is hereby amended by adding at the end thereof the following
new Sections:
"2.104 `Company Stock' shall mean Class A Common Stock of the Company
and any other security, debenture or other property convertible into
Company Class A Common Stock. Company stock shall also include warrants
or rights to purchase Company common stock which are received by the
Trustee as a result of its holding Company common stock under the terms
of the Trust Agreement.
2.105 `Company Stock Fund' shall mean that portion of the Trust which
shall be invested and reinvested in Company Stock. The Company Stock
Fund shall also include such cash which is insufficient to purchase an
entire share of Company Stock.
2.106 `Filing Date' shall mean the date Schedule 14D-1 and any other
relevant documents concerning a Tender Offer are first filed with the
Securities and Exchange Commission.
2.107 `Matching Allocation Period' shall mean a `payroll period'.
2.108 'Tender Offer' shall mean a transaction involving Company Stock
evidenced by the filing of Schedule 14D-1 with the Securities and
Exchange Commission, or any other similar transaction."
-2-
<PAGE> 38
7. The first sentence of Section 2.15 is hereby amended by deleting the
phrase "during a Plan Year." and inserting in lieu thereof "during a
Matching Allocation Period.".
8. Sections 7.04(b) and 7.05 are each hereby amended by deleting the words
"Plan Year" wherever they appear, and inserting in lieu thereof
"Matching Allocation Period".
9. The next-to-last paragraph of Section 2.15 is hereby amended in its
entirety to read as follows:
"For Plan Years beginning in 1989 and later, Compensation taken into
account under the Plan for any Plan Year shall not exceed the
"401(a)(17) Limit" (as defined herein) for such Plan Year. That is, the
sum of Compensations for all Matching Allocation Periods within any Plan
Year shall not exceed the 401(a)(17) Limit for such Plan Year.
Accordingly, the Administrator shall establish uniform and
nondiscriminatory rules to provide for those situations in which the
preceding sum of Compensations will exceed the 401(a)(17) Limit.
For purposes of this Section, the term "401(a)(17) Limit" shall mean the
amount determined under Section 401(a)(17) of the Code for the
applicable Plan Year.
(a) The 401(a)(17) Limit shall be adjusted in accordance with (i)
Section 415(d) of the Code [for Plan Years beginning before 1994]
or (ii) Section 401(a)(17)(B) of the Code [for Plan Years
beginning after 1993].
(b) The 401(a)(17) Limit may take into account the "reasonable,
good-faith standards during the transition years", as elaborated
in an Internal Revenue Service field directive dated June 12,
1992 regarding such subject. That is, although regulations under
Section 401(a)(17) of the Code require that the 401(a)(17) Limit
for any calendar year applies to Plan Years beginning in such
calendar year, such regulations are not effective until the Plan
Year beginning in 1994. During the "transition years", the IRS
field directive shall be operative. Accordingly, if a Plan Year
ends in 1989 or earlier, the 401(a)(17) Limit is $200,000;
$209,200 if the Plan Year ends in 1990; ....; $150,000 if the
Plan Year begins in 1994, etc.
(c) If a Plan Year is less than 12 months, the 401(a)(17) Limit for
such short Plan Year shall be prorated."
10. Item M of the Adoption Agreement is hereby amended in its entirety to
read as follows:
"1. Funding of Contribution (Section 7.04(a)): Matching Contributions
shall be
[ ] unavailable under this Plan (ignore the remainder of this Item M
of the Adoption Agreement)
[X] discretionary (ignore Item 4 below)
[ ] required (ignore Item 3 below).
-3-
<PAGE> 39
2. Eligibility for Matching Contribution (Section 7.04(b)): Check
applicable item(s).
[ ] Participants who complete the following number of Hours of
Service during the Matching Allocation Period:
[ ] more than 500 [ ] at least 1,000
[ ] other (not more than 1,000): ________________
[ ] Participants who are still employed by the Employer on the
last day of the Matching Allocation Period.
[ ] Notwithstanding any of the above requirements, a Participant
who has experienced a Termination of Employment during the
Matching Allocation Period on account of death, Disability or
retirement on or after his Normal Retirement Date shall be
eligible for a Matching Contribution.
[X] An Employee who was a Participant at any time during the
Matching Allocation Period.
[ ] A Participant who is not a Highly Compensated Participant.
This provision is effective as of __________________________.
[ ] A Participant who is not a Partner-Employee. This provision
is effective as of __________________.
[ ] A Participant who has _____ (not more than 2) Year(s) of
Service. For Plan Years beginning before January 1, 1989, the
___ Year(s) of Service in the preceding sentence shall be
replaced by ____ (not more than 3) Year(s) of Service. (Note:
Depending upon the effect of these eligibility requirements,
the Matching Contribution Account may have to be 100% vested
in Item M.5 below.)
[ ] A Participant who would have also been a Participant if the
minimum service eligibility requirement in Section 3.01(a)
were ________________________ (not more than 2 Years of
Service). For Plan Years beginning before January 1, 1989, the
________________________ in the preceding sentence shall be
replaced by ________________________ (not more than 3 Years of
Service). (Note: Depending upon the effect of these
eligibility requirements, the Matching Contribution Account
may have to be 100% vested in Item M.5 below.)
3. Allocation of Discretionary Matching Contributions (Section 7.05(a))
For purposes of Section 7.05(a), a Participant's Deferrals in excess
of 6% of Compensation shall not be taken into account.
4. Allocation of Required Matching Contribution (Section 7.05(b)) N/A
-4-
<PAGE> 40
5. Vesting of Matching Contribution Account (Section 7.06). The
elections described below shall apply only for purposes of
determining vesting of the Matching Contribution Account.
a. Vested Percentage
i. The Vested Percentage for Plan Years beginning prior to
January 1, 1989 shall be: N/A
[ ] Same as Vested Percentage applicable to Employer
Contribution Account (see Item K.2.a of the Adoption
Agreement).
[ ] 100% immediately
[ ] 100% after ____ Year(s) of Service.
[ ] determined in accordance with Schedule ___ below:
<TABLE>
<CAPTION>
Vested Percentage
-------------------------------------------------------------
Years of Service Schedule A Schedule B Schedule C Schedule D Schedule E
---------------- ---------- ---------- ---------- ---------------------
<S> <C> <C> <C> <C> <C>
Less than 1 year 0% 0% 0% 0% ______%
1 but less than 2 10% 0% 0% 0% ______%
2 but less than 3 20% 0% 0% 20% ______%
3 but less than 4 30% 0% 0% 40% ______%
4 but less than 5 40% 40% 40% 60% ______%
5 but less than 6 50% 45% 50% 80% ______%
6 but less than 7 60% 50% 60% 100% ______%
7 but less than 8 70% 60% 70% 100% ______%
8 but less than 9 80% 70% 80% 100% ______%
9 but less than 10 90% 80% 90% 100% ______%
10 but less than 11 100% 90% 100% 100% ______%
11 or more 100% 100% 100% 100% ______%
</TABLE>
ii. The Vested Percentage for Plan Years beginning after
December 31, 1988 shall be (Note: The schedules below must
comply with Section 411(a)(2) of the Code.):
[X] Same as Vested Percentage applicable to Employer
Contribution Account (see Item K.2.b. of the Adoption
Agreement).
[ ] 100% immediately
[ ] 100% after _____ Year(s) of Service
-5-
<PAGE> 41
[ ] determined in accordance with Schedule ___ below:
<TABLE>
<CAPTION>
Vested Percentage
---------------------------------------
Years of Service Schedule A Schedule B Schedule C
---------------- ---------- ---------- ----------
<S> <C> <C> <C>
Less than 1 year 0% 0% _____%
1 but less than 2 0% 0% _____%
2 but less than 3 20% 0% _____%
3 but less than 4 40% 20% _____%
4 but less than 5 60% 40% _____%
5 but less than 6 80% 60% _____%
6 but less than 7 100% 80% _____%
7 or more 100% 100% 100%
</TABLE>
b. Vested Percentage For Certain Participants: If this Plan is an
amendment of a Prior Plan to comply with TRA86: (Note: The
schedule selected below must be no worse than the schedule in
Item 5.a.ii. above.) N/A
[ ] The schedule in Item 5.a.ii. above shall be applicable
since it results in Vested Percentages at least equal to
the Vested Percentages determined under the schedule in
Item 5.a.i. above.
[ ] An Employee who was a Participant in the Plan on the day
before the first day of the Plan Year beginning in 1989
shall have his Vested Percentage determined in accordance
with:
[ ] the schedule in Item 5.a.i. above
[ ] the schedule below:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
Less than 1 year ____%
1 but less than 2 ____%
2 but less than 3 ____%
3 but less than 4 ____%
4 but less than 5 ____%
5 but less than 6 ____%
6 but less than 7 ____%
7 or more 100%"
</TABLE>
11. The second "flush left" paragraph of Section 4.02 is hereby amended in
its entirety to read as follows:
"This Section 4.02 is effective for Plan Years beginning on or after the
date specified in the Adoption Agreement. (For Plan Years beginning
prior to the preceding Plan Years, the treatment of Forfeitures and
allocation of Forfeiture Accounts attributable to Employer Contribution
Accounts shall be determined under the terms of the Prior Plan.)
Forfeitures shall occur as of the date a Forfeiture Account is
established in accordance with subsection (a) below."
-6-
<PAGE> 42
12. The first paragraph of Section 4.02(a) is hereby amended by deleting the
last two sentences and inserting in lieu thereof the following:
"Such Forfeiture Accounts shall be allocated in accordance with Section
5.07."
13. The second paragraph of Section 4.02(a) is hereby deleted in its
entirety.
14. The second paragraph of Section 5.07 is hereby amended in its entirety
to read as follows:
"For Plan Years beginning prior to the effective date specified for
Section 4.02, the allocation of Forfeitures attributable to Employer
Contribution Accounts shall be determined under the terms of the Prior
Plan. For Plan Years beginning on or after the effective date specified
for Section 4.02, Forfeitures which have become available for allocation
during a Plan Year in accordance with Section 4.02 shall be [ ] used to
pay administrative expenses of the Plan and Trust. [X] treated in the
same manner as Forfeiture Accounts attributable to Matching Contribution
Accounts (see Section 7.07). [ ] added to Profit Sharing Contributions.
If any Forfeitures still remain, such excess shall be held in a suspense
account and be applied as previously described in future Plan Years."
15. The following Sections are hereby deleted in their entirety: 6.06(a);
6.07; 7.09(b); 7.11; and 7.14(c)(i).
16. The first paragraph of Section 7.07 is hereby amended in its entirety to
read as follows:
"This Section 7.07 is effective for Plan Years beginning on or after
June 1, 1997. For Plan Years beginning prior to the preceding Plan
Years, the treatment of Forfeitures and allocation of Forfeiture
Accounts attributable to Matching Contribution Accounts on account of a
Participant's Termination of Employment with less than 100% vesting
shall be determined under the terms of the Prior Plan."
17. Section 7.13(i)(ii)(1) is hereby amended in its entirety to read as
follows:
"(1) the eligible Non-Highly Compensated Participants are those (A) who
made Deferrals during the Plan Year, and (B) whose Matching Contribution
Accounts are greater than zero dollars as of the end of the Plan Year."
18. Section 5.03(c) is hereby amended in its entirety to read as follows:
"(c) Change of Investment Election: The Administrator shall establish
rules and procedures under which Participants may:
(i) change their investment election with respect to future
contributions under subsection (a), and
-7-
<PAGE> 43
(ii) transfer their Account(s) (all or a portion) from one
Investment Fund to another."
19. Section 5.10(c) is hereby amended in its entirety to read as follows:
"(c) Application: An application for a loan by a Participant shall be
made in writing to the Administrator on such form or forms as the
Administrator may require. The Administrator may also require (if
applicable) the Participant to produce such documents and other evidence
of a financial need and the amount of the financial need. If the loan is
secured by any part of the Participant's Account, the loan application
must also include the Participant's consent to a possible reduction of
his Benefit to satisfy the repayment of such loan. The preceding consent
shall be obtained no earlier than 90 days before the date such loan is
made.
If (1) the Plan is subject to the provisions of Article X, (2) a loan is
secured by any part of a Participant's Account, and (3) such Participant
is married at the time of the loan, the loan application must also
include the spouse's consent to and acknowledgment of the effect of the
possible reduction described in the preceding paragraph. The spouse's
consent shall (1) be obtained no earlier than 90 days before the date
such loan is made, and (2) be witnessed by a notary public (or if
permitted by the Administrator, by a representative of the
Administrator). If the Participant is unmarried at the time of the loan
or if the Participant later remarries, the consent of the new spouse
shall not be required."
20. Section 6.11(b)(iv) is hereby amended by deleting the last sentence
thereof.
21. Section 13.09 is hereby amended in its entirety to read as follows:
"13.09 FORMS
Where necessary, the Administrator shall develop written election forms,
applications, etc. that a Member or Beneficiary must complete and submit
(including any additional pertinent information). The Administrator may
rely upon all such information so furnished it, including such person's
current mailing address. The Administrator may accept forms sent by
facsimile.
Notwithstanding the foregoing, the Administrator may establish rules,
procedures and circumstances under which an individual may make
elections, applications, etc. in a form other than a written form (e.g.,
telephonic voice response system), unless such non-written form is
prohibited by law."
-8-
<PAGE> 44
22. A new Article XVIII is hereby added to read as attached hereto as
Exhibit I.
IN WITNESS WHEREOF, the Company has adopted this Modification as of the
3rd day of June , 1997.
- ----- --------
Haskel International, Inc.
The "Company"
By /s/L. D. SCHNELL
------------------------------
-9-
<PAGE> 45
EXHIBIT I
ARTICLE XVIII
COMPANY STOCK
18.01 VOTING OF COMPANY STOCK
A Participant shall direct the Trustee as to the manner in which Company
Stock allocated to his Account shall be voted. Before each meeting of the
Company's shareholders, the Trustee shall deliver to each Participant a copy of
any proxy solicitation materials together with a form by which the Participant
may instruct the Trustee on how to vote the Company Stock allocated to his
Account. The Trustee shall vote Company Stock through proxy in accordance with
instructions received from Participants. In the case of Company Stock for which
instructions are not received, the Trustee shall vote such stock in accordance
with the direction of the Administrator, or, in the absence of any direction by
the Administrator, in direct proportion to the instructions to vote received
from the Participants.
18.02 TENDER OFFERS
In the event of a Tender Offer, the Trustee shall sell, convey or
transfer Company Stock only in accordance with the written instructions of
Participants.
The Trustee shall deliver to each Participant:
(a) a copy of the description of the terms and conditions of
the Tender Offer filed with the Securities and Exchange Commission on
Schedule 14D-1;
(b) if requested by the Company, a copy of the statement from
Company management setting forth its position with respect to the Tender
Offer filed with the Securities and Exchange Commission on Schedule
14D-9;
<PAGE> 46
(c) an instruction form to be used by any Participant who
wishes to instruct the Trustee to tender Company Stock in response to
the Tender Offer which states that Company Stock allocated to the
Participant will not be tendered if no instruction form is returned to
the Trustee by the indicated deadline; and
(d) such other materials or information as the Trustee may
deem necessary or appropriate.
The Trustee shall sell, convey, or transfer shares of Company Stock
pursuant to the terms of the Tender Offer as directed by the Participants on the
instruction forms. The Trustee shall not express any opinion or recommendation
to any Participant concerning the Tender Offer.
18.03 DELEGATION OF TRUSTEE DUTIES
To the extent permitted by law, the Trustee may delegate to the
Administrator any one or more of the rights, powers and duties prescribed for it
under this Article XVIII. Any delegation of the Trustee's rights, powers and
duties hereunder shall be terminable by the Trustee upon such notice to the
Administrator as the Trustee deems appropriate.
18.04 TRUST AGREEMENT
If the provisions of this Article conflict with the provisions of the
Trust Agreement, the provisions of the Trust Agreement shall govern.
<PAGE> 47
LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER 401(k) PROFIT SHARING PLAN
ADOPTION AGREEMENT
TABLE OF CONTENTS
Page
Number
------
A. COMPANY and EMPLOYER INFORMATION .................................. 1
B. PLAN INFORMATION .................................................. 2
C. PLAN and TRUST IDENTIFICATION ..................................... 3
D. HIGHLY COMPENSATED EMPLOYEE ....................................... 4
E. ELIGIBILITY REQUIREMENTS .......................................... 5
F. YEARS OF SERVICE .................................................. 6
G. EARNINGS and COMPENSATION ......................................... 6
H. VOLUNTARY and ROLLOVER CONTRIBUTIONS
BY PARTICIPANTS ................................................... 7
I. ALLOCATION OF PROFIT SHARING CONTRIBUTIONS ........................ 8
J. FORFEITURES ATTRIBUTABLE TO EMPLOYER
CONTRIBUTION ACCOUNTS ............................................. 9
K. VESTING OF EMPLOYER CONTRIBUTION ACCOUNT .......................... 9
L. 401(k) DEFERRALS, HARDSHIP WITHDRAWALS
AND RELATED RULES ................................................. 12
M. MATCHING CONTRIBUTIONS AND RELATED RULES .......................... 13
N. JOINING BONUSES ................................................... 16
O. INVESTMENT FUNDS .................................................. 16
P. PAYMENT OF BENEFITS ............................................... 17
Q. CODE SECTION 415 REQUIREMENTS IF EMPLOYER
MAINTAINS MORE THAN ONE PLAN ...................................... 18
R. LOANS ............................................................. 18
S. TOP HEAVY MINIMUM BENEFITS ........................................ 19
SIGNATURES ................................................................ 19
<PAGE> 48
LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER 401(k) PROFIT SHARING PLAN
ADOPTION AGREEMENT
The undersigned Company and each other named Employer, if any, hereby adopt the
Louis Kravitz & Associates, Inc. Master 401(k) Profit Sharing Plan (the "Plan")
and the related Trust Agreement (the "Trust"), subject to the terms, conditions
and elections of this Adoption Agreement.
The Company and each Employer have read and understand the terms of the Plan and
Trust. The Company and each Employer are hereby advised to consult legal counsel
in completing this Adoption Agreement, in applying for Internal Revenue Service
approval, and in determining the tax-deductibility of contributions to the
Plan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
A. COMPANY AND EMPLOYER INFORMATION
1. Name of Company: HASKEL INTERNATIONAL, INC.
------------------------------------------------
2. Address: 100 EAST GRAHAM PLACE
-------------------------------------------------------
BURBANK, CA 91502
--------------------------------------------------------
--------------------------------------------------------
3. Telephone: (818) 843-4000 4. Accounting Method: [ X ] Cash [ ] Accrual
--------------------------
5. Fiscal Year-End: 5/31 6. Federal Tax I.D. No.: 95-4107640
--------------------- ---------------
7. Type of Entity: [ X ] Regular Corporation [ ] S Corporation
[ ] Partnership [ ] Sole Proprietorship [ ] Other:
------------
NOTE: TAX-EXEMPT ORGANIZATIONS ARE NOT ELIGIBLE TO MAINTAIN A 401(k) PLAN!
----
8. Date Business Commenced: 1946 9. Date Incorporated: 11/3/86
------ ---------
10. Predecessor Employer: If another entity was predecessor to the
Company, complete the following:
a. Name of Predecessor:
--------------------------------
b. Date Business Commenced:
----------------------------
c. Type of Entity: [ ] Regular Corporation [ ] S Corporation
[ ] Partnership [ ] Sole Proprietorship [ ] Other:
------------------------
d. Predecessor's Plan(s), if any: [ ] Defined Benefit Plan [ ] Defined Contribution Plan
</TABLE>
<PAGE> 49
11. Other Employers Adopting Plan (Section 2.26):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Federal Tax Relation to
Name of Employer Identification No. Fiscal Year-End Company
---------------- ------------------ --------------- -------
HASKEL ELECTRONIC PRODUCTS, INC. 95-4445588 5/31 OWNED
---------------------------------- -------------------- -------------- -----------------
HASKEL - HOGAN SYSTEMS AND
SERVICE COMPANY 76-0520206 5/31 OWNED
---------------------------------- -------------------- -------------- -----------------
---------------------------------- -------------------- -------------- -----------------
---------------------------------- -------------------- -------------- -----------------
B. PLAN INFORMATION (ARTICLE I)
1. New or Amended Plan or Plan Amendment (Section 1.01 or 1.06)
[ ] New Plan: This is a new plan.
[X] Amended Plan: This is an amendment and restatement of the
existing plan and trust, i.e. the
Prior Plan (Section 2.78) identified below:
a. Name of Prior Plan: HASKEL INTERNATIONAL, INC. PROFIT SHARING PLAN
-------------------------------------------------
b. Type of Plan: PROFIT SHARING PLAN
-------------------------------------------------------
c. Effective Date of Prior Plan: 6/1/84
--------------------------------------
d. Prior Plan Account(s) (Section 2.79) shall:
[X] Constitute the beginning balance(s) of a
Participant's successor Account(s) in this Plan as of
the Effective Date of this amended Plan.
[ ] Be maintained as separate Account(s) (i.e. Prior Plan
Account(s)) in this Plan as of the Effective Date of this
amended Plan. Such Prior Plan Account(s) shall be maintained
in a manner similar to Rollover Contribution Accounts
pursuant to Section 4.03. In addition, Prior Plan Account(s)
shall be fully vested at all times.
[ ] Plan Amendment Number ______: This is an amendment to the
latest Adoption Agreement
previously executed with respect
to this Plan and Trust. The Plan
Amendment Effective Date
(Section 2.75) shall be
----------------
2. Permitted Disparity in Other Plans of an Employer (Section 1.07)
Does any Employer maintain another plan which (i) provides for permitted disparity
under Section 401(l) of the Code, and (ii) covers a Participant of this Plan?
[ ] Yes (also see Item I.2 of the Adoption Agreement)
[X] No
</TABLE>
-2-
<PAGE> 50
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
C. PLAN AND TRUST IDENTIFICATION
1. Name of Plan: HASKEL INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN
-------------------------------------------------------
2. Name of Trust: HASKEL INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN
------------------------------------------------------
3. Trust Agreement: [X] Louis Kravitz & Associates, Inc. Master Trust Agreement
[ ] Other. Trustee(s): _________________________________
If Louis Kravitz & Associates, Inc. Master Trust Agreement, complete below:
a. Trustee(s) (Section 1.09 of Trust Agreement):
FIRST TRUST CORPORATION
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
b. If more than one individual is named as Trustee, the power to act
as Trustee shall require the action of
[ ] any Trustee acting alone
[ ] all Trustees acting together
[ ] a majority of Trustees acting together
[ ] other: ___________________________________________________
___________________________________________________
4. Original Effective Date of Plan: 6/1/84
--------------------------------
5. Effective Date of Plan and Trust: 6/1/97
--------------------------------
6. a. Plan Year Ends: 5/31
---------------------------------------------
b. Has Plan Year been amended since the Original Effective Date?
[X] No [ ] Yes (complete c. below)
c. If there has been a change in Plan Year (attach additional pages if there has been
more than one change of Plan Years),
i. What was the last day of the prior full Plan Year? _____________(MM/DD/YY)
ii. What was the period of the short Plan Year?_____________ to _____________(MM/DD/YY)
iii. What is the first day of the new full Plan Year?______________(MM/DD/YY)
</TABLE>
-3-
<PAGE> 51
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
7. a. Limitation Year Ends: 5/31
---------------------------------
b. Has Limitation Year been amended since the Original Effective Date?
[X] No [ ] Yes (complete c. below)
c. If there has been a change in Limitation Year (attach additional pages if there has
been more than one change of Limitation Years),
i. What was the last day of the prior full Limitation Year? ______________(MM/DD/YY)
ii. What was the period of the short Limitation Year?______________ to______________ (MM/DD/YY)
iii. What is the first day of the new full Limitation Year?______________(MM/DD/YY)
8. Administrator of Plan: [ ] The Company [X] Other: ADMINISTRATIVE COMMITTEE UNDER THE HASKEL
INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN
----------------------------------------------------------------------
9. State whose law shall govern: [X] California [ ] Other:
--------------------------------
D. HIGHLY COMPENSATED EMPLOYEE (SECTION 2.45). This option must be the same under all plans of
the Employer.
1. For purposes of determining (i) who is a Highly Compensated Employee and (ii) the size
of the "officer group" or "Top 20% Group," the term Employee shall (Section 2.45(d))
a. [ ] include [X] exclude Leased Employees who meet certain safe-harbor exceptions
under IRS regulation 1.414(q)-1T,A-7(b)(2).
b. [ ] include [X] exclude Employees covered by a collective bargaining agreement, if
certain conditions are met.
2. For purposes of determining the size of the "officer group" or "Top 20% Group," the
following Employees shall be excluded:
[X] The Employees listed in Section 2.45(f)(iii)
[ ] Employees who
i. have not completed ________ (not more than 6) months of service
ii. normally work less than ________ (not more than 17-1/2) hours per week
iii. normally work not more than ________ (not more than 6) months a year
iv. have not attained age ________ (not more than 21).
</TABLE>
-4-
<PAGE> 52
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
3. If the size of the "officer group" or "Top 20% Group" is not a whole
integer, the calculated result shall be rounded to the
[X] lower [ ] nearer [ ] higher integer.
4. If the Plan Year of this Plan (and all other plans of the Employer) is the calendar
year, the Look-Back Year shall be N/A
[ ] the 12-month period immediately preceding the Plan Year [normal method].
[ ] the Plan Year or applicable 12-month period [special method of IRS regulation
1.414(q)-1T, A-14(b)].
E. ELIGIBILITY REQUIREMENTS
1. Age and Service Requirements to Become an Eligible Employee (Section 3.01)
a. Minimum Age: _________ (not more than 21)
b. Minimum Service:
I. For Plan Years beginning before January 1, 1989: N/A
i. Calculation Method: [ ] Hours of Service [ ] Elapsed Time [ ] N/A
ii. [ ] No minimum service requirement
[ ] ______ Year(s) of Service
[ ] Less Than One Year of Service: The earlier of (i) ______ month(s) of employment,
during which the Employee completes __________ Hours of Service or (ii) the completion of
One Year of Service.
[ ] ________ month(s) of employment.
II. For Plan Years beginning after December 31, 1988:
i. Calculation Method: [ ] Hours of Service [X] Elapsed Time [ ] N/A
ii. [ ] No minimum service requirement
[ ] One Year of Service
[ ] Less Than One Year of Service: The earlier of (i) ______ month(s) of employment,
during which the Employee completes __________ Hours of Service or (ii) the completion of
One Year of Service.
[X] 6 month(s) of employment.
----
</TABLE>
-5-
<PAGE> 53
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2. Excluded Employee (Section 2.33)
The following Employees or classes of Employees shall be excluded
from participation in the Plan:
a. Leased Employees (Section 2.58) are [X] excluded [ ] not excluded.
b. Employees Excluded: _______________________________________________________
c. Class of Employees Excluded: ________________________________________________
3. Entry Date(s) (Section 2.29) (Note: The Effective Date and the first day of any Plan
Year are also Entry Dates.)
[ ] The first day of the Plan Year and the first day of the seventh month of the Plan Year.
[ ] The last day of the Plan Year and the last day of the sixth month of the Plan Year.
[X] The first day of each of the following months: JANUARY, FEBRUARY, MARCH, APRIL,
-------------------------------------
MAY, JUNE, JULY, AUGUST, SEPTEMBER, OCTOBER, NOVEMBER, DECEMBER
------------------------------------------------------------------------------------
4. Irrevocable Waiver of Participation (Section 3.08): [ ] Permitted [X] Not
permitted
F. YEARS OF SERVICE
1. Calculation Method (Section 3.05): [X] Hours of Service [ ] Elapsed Time
2. Parity Break (Section 2.70) (Note: Once an Employee becomes a Participant, he shall
not have a Parity Break regardless of the number of his Breaks-In-Service.)
[X] Include Parity Break rule in Plan.
[ ] Exclude Parity Break rule so that all Years of Service are aggregated for purposes of
eligibility and vesting.
3. Years of Service with the following Prior Employer(s) (Section 2.77) count for purposes
of eligibility and vesting: ___________________________________________________________
______________________________________________________________________________________
G. EARNINGS (SECTION 2.21) AND COMPENSATION (SECTION 2.15)
1. Accounting Method: [X] Paid [ ] Accrued
(Note: "Accrued" may not be elected if the Plan is first (originally) adopted on or after
May 14, 1990. In addition, the election to use "Accrued" (if made) shall expire at the end
of the "applicable period" which begins in 1991.)
</TABLE>
-6-
<PAGE> 54
2. Earnings (for purposes of Section 415 of the Code) shall mean:
[X] Form W-2 Earnings
[ ] Safe Harbor Earnings #A
[ ] Safe Harbor Earnings #B
3. Compensation shall mean:
[ ] Gross Earnings (Note: This is Earnings plus salary reduction
amounts.)
[X] Adjusted Gross Earnings (Note: This is Gross Earnings,
reduced by certain prescribed items.)
[ ] Wages, plus
[ ] no additions
[ ] Overtime [ ] Bonuses [ ] Commissions
[ ] Other taxable, cash and/or non-cash compensation
as follows:
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
(Note: If the "Wages" or "Other" category is elected, such
definition of Compensation must annually meet the
non-discrimination requirements of temporary regulation
1.414(s)-1T(d).)
4. Compensation in First Year of Participation: For purposes of
allocating the Employer's contribution and Forfeitures for the
Plan Year in which a Participant begins or resumes participation
in the Plan, Compensation paid before a Participant's
participation began or resumed shall be [ ] included [X]
excluded.
H. VOLUNTARY AND ROLLOVER CONTRIBUTIONS BY PARTICIPANTS (SECTION 4.03)
1. Employee voluntary contributions are [ ] permitted [X] not
permitted. If permitted, Employee voluntary contributions for
any Plan Year shall be limited as follows:
[ ] no maximum limits
[ ] maximum of $____________
[ ] maximum of ______% of Compensation
2. Rollover Contributions are [X] permitted [ ] not permitted.
-7-
<PAGE> 55
I. ALLOCATION OF PROFIT SHARING CONTRIBUTIONS
1. Eligibility for Profit Sharing Contribution (Section 5.05).
Check applicable item(s): (Note: The term "Participant" below
shall also include the term "Inactive Participant" where
applicable.)
[X] Participants who complete the following number of Hours of
Service during the Plan Year:
[ ] more than 500 [X] at least 1,000
[ ] other (not more than 1,000):
[X] Participants who are still employed by the Employer on the
last day of the Plan Year.
[ ] During his first Plan Year of participation, a Participant
must complete a pro-rata portion of ___________ Hours of
Service based upon the number of days of participation. A
Participant must complete __________ Hours of Service during
his second and subsequent Plan Years of participation.
[ ] Participants who either complete more than 500 Hours of
Service (or are employed more than 91 consecutive calendar
days, in the case of a Plan that has selected the Elapsed
Time method in Section 3.05) during the Plan Year or are
still employed by the Employer on the last day of the Plan
Year. This election shall be effective as of the Plan Year
beginning _______________________, and shall supersede the
elections chosen above (if any).
[ ] Notwithstanding any of the above requirements, a Participant
who has experienced a Termination of Employment during the
Plan Year on account of death, Disability or retirement on
or after his Normal Retirement Date shall be eligible for an
Employer contribution.
[ ] Participants who have ______ Year(s) of Service. This
provision is effective _______________________. (Note:
Depending upon the effect of his eligibility requirement,
the Vested Percentage in Item K.2 may have to be 100%.)
2. Allocation Formula: The Profit Sharing Contribution shall be
allocated in accordance with the method elected below. (Note:
The Integrated Allocation Method may not be elected if the
Employer maintains another plan which (i) provides for permitted
disparity under Section 401(l) of the Code, and (ii) covers a
Participant of this Plan. See Section 1.07 for details.)
[ ] Integrated Allocation Method (Section 5.06(a)). Integration
Level (Section 2.49) shall mean:
[ ] The Social Security Taxable Wage Base in effect on the first
day of the Plan Year.
[ ] $_______________. Commencing with the Plan Year beginning
_______________________, the $_______________ shall be
increased by $_________________ annually. However, the
$________________ (or such increased amount) may not exceed
the Social Security Taxable Wage Base in effect on the first
day of any Plan Year.
[ ] ______% (not to exceed 100%) of the Social Security Taxable
Wage Base in effect on the first day of the Plan Year. This
election shall be effective as of the Plan Year beginning
_________________________, and shall supersede the election
chosen above (if any).
[X] Non-Integrated Allocation Method (Section 5.06(b)).
-8-
<PAGE> 56
J. FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION ACCOUNTS
1. Availability of Forfeiture Account for Allocation (Section
4.02(a)) [for Plan Years beginning after December 31, 1988].
a. A Former Participant's Forfeiture Account shall become
available for allocation (either treated as Qualified
Nonelective Contributions pursuant to Sections 6.07,
7.11 or 7.14, or allocated in accordance with Section
5.07) as of the end of the Plan Year in which
[X] such Former Participant receives a distribution of
his Benefit.
[ ] such Former Participant incurs _____ (not more
than 5) consecutive Break(s)-In-Service.
b. The second paragraph of Section 4.02(a) allows a
"postponement" of allocation of certain Forfeiture
Accounts. The preceding "Delayed Forfeiture Allocation
Method" is
[ ] elected
[X] not elected.
[ ] not applicable because the Plan automatically
restores Forfeiture Accounts upon reemployment
prior to 5 consecutive Breaks-In-Service under
Section 4.02(b)(ii).
2. Restoration of Forfeiture Account (Section 4.02(b)) [for Plan
Years beginning after December 31, 1988].
The restoration of a Former Participant's Forfeiture Account
shall be governed by:
[X] Section 4.02(b)(i); repayment of prior distribution is
required.
[ ] Section 4.02(b)(ii); repayment of prior distribution is not
required.
K. VESTING OF EMPLOYER CONTRIBUTION ACCOUNT. The elections described below
shall apply only for purposes of determining vesting of the Employer
Contribution Account.
1. Years of Service for Vesting Purposes (Section 2.101)
[X] All Years of Service shall be counted for purposes of
Vested Percentage.
[ ] The following Years of Service are excluded for purposes of
Vested Percentage (Note: This election is available only if
the Original Effective Date is later than December 31, 1988
or the Plan previously excluded such Years of Service):
[ ] Years of Service prior to age 18 during which the Employee
was not a Participant.
[ ] Years of Service prior to the Original Effective Date (and
taking into account a "predecessor plan," as defined in IRS
regulation 1.411(a)-5(b)(3)).
-9-
<PAGE> 57
2. Vested Percentage (Section 2.101)
a. The Vested Percentage for Plan Years beginning prior to January
1, 1989 shall be:
[ ] 100% immediately.
[ ] 100% after _______ Year(s) of Service.
[ ] determined in accordance with Schedule _____ below:
<TABLE>
<CAPTION>
Vested Percentage
----------------------------------------------------------------
Years of Service Schedule A Schedule B Schedule C Schedule D Schedule E
---------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Less than 1 year 0% 0% 0% 0% %
1 but less than 2 10% 0% 0% 0% %
2 but less than 3 20% 0% 0% 20% %
3 but less than 4 30% 0% 0% 40% %
4 but less than 5 40% 40% 40% 60% %
5 but less than 6 50% 45% 50% 80% %
6 but less than 7 60% 50% 60% 100% %
7 but less than 8 70% 60% 70% 100% %
8 but less than 9 80% 70% 80% 100% %
9 but less than 10 90% 80% 90% 100% %
10 but less than 11 100% 90% 100% 100% %
11 or more 100% 100% 100% 100% %
</TABLE>
b. The Vested Percentage for Plan Years beginning after December
31, 1988 shall be (Note: The schedules below must comply with
Section 411(a)(2) of the Code.):
[ ] 100% immediately.
[ ] 100% after _____ Year(s) of Service.
[X] determined in accordance with Schedule C below:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service Schedule A Schedule B Schedule C
<S> <C> <C> <C>
Less than 1 year 0% 0% 0%
1 but less than 2 0% 0% 20%
2 but less than 3 20% 0% 40%
3 but less than 4 40% 20% 60%
4 but less than 5 60% 40% 80%
5 but less than 6 80% 60% 100%
6 but less than 7 100% 80% 100%
7 or more 100% 100% 100%
</TABLE>
-10-
<PAGE> 58
3. Alternate Vesting Schedule For Certain Participants: If this Plan is an
amendment of a Prior Plan to comply with TRA86: (Note: The schedule
selected below must be no worse than the schedule in Item 2.b above.)
N/A
[ ] The schedule in Item 2.b above shall be applicable since it results
in Vested Percentages at least equal to the Vested Percentages
determined under the schedule in Item 2.a above.
[ ] An Employee who was a Participant in the Plan on the day before the
first day of the Plan Year beginning in 1989 shall have his Vested
Percentage determined in accordance with:
[ ] the schedule in Item 2.a above.
[ ] the schedule below:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 1 year _____%
1 but less than 2 _____%
2 but less than 3 _____%
3 but less than 4 _____%
4 but less than 5 _____%
5 but less than 6 _____%
6 but less than 7 _____%
7 or more 100%
</TABLE>
4. Top Heavy Vesting Schedule (Section 2.95) shall mean:
[X] Same as Vested Percentage (Item 2.b above). (Note: This
schedule must be as favorable as either of the schedules
below.)
[ ] 100% vesting after three Years of Service.*
[ ] Graded Vesting as follows:
<TABLE>
<CAPTION>
Years of Service* Vested Percentage
----------------- -----------------
<S> <C>
Less than 2 years 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
</TABLE>
- ---------------
* For purposes of determining a Participant's nonforfeitable percentage, his
Years of Service prior to the Original Effective Date shall be excluded. See
Section 11.03 regarding service under a predecessor plan.
-11-
<PAGE> 59
L. 401(k) DEFERRALS, HARDSHIP WITHDRAWALS AND RELATED RULES
1. Limitations on Deferrals (Section 6.03)
a. Amount of Deferrals: Check applicable item(s)
[X] Participants may make Deferrals of from 1% to 15%
of their Compensation for each "payroll period" (may
vary for different groups of Employees)
[ ] Participants may make Deferrals of from $______ to
$______ for each "payroll period" (may vary for
different groups of Employees)
b. "Make-Up" Deferrals are [X] permitted [ ] not permitted.
2. Failure to Satisfy ADP Test (Section 6.06)
If the Plan fails the ADP Test, Section 6.11 provides that
Discriminatory Deferrals may be recharacterized.
Recharacterization is
[X] not applicable because Section 4.03 does not allow voluntary
contributions
[ ] permitted
[ ] not permitted.
3. Hardship Withdrawals (Section 6.12): For Plan Years beginning
after December 31, 1988 (with certain exceptions), the following
provisions shall govern hardship withdrawals:
a. Other Resources (Section 6.12(d)):
[X] Safe Harbor Rule
[ ] Facts and Circumstances Rule
b. Maximum Number of Hardship Withdrawals (Section 6.12(f)):
[ ] no limits imposed
[X] a Participant must wait another 12 months after a
hardship withdrawal
[ ] ______ per any 12-month period. The 12-month period
shall be the
[ ] Plan Year [ ] calendar year [ ] other: __________
[ ] Notwithstanding any limits imposed above, the
Administrator shall establish special rules for
hardship withdrawals for tuition for post-secondary
education. These rules are necessary to satisfy IRS
regulations which require that tuition be granted
only on a quarterly or semester basis, rather than an
annual basis.
-12-
<PAGE> 60
M. MATCHING CONTRIBUTIONS AND RELATED RULES
1. Funding of Contribution (Section 7.04(a)): Matching Contributions
shall be (SEE MODIFICATION)
[ ] unavailable under this Plan (ignore the remainder of this
Item M of the Adoption Agreement)
[ ] discretionary (ignore Item 4 below)
[ ] required (ignore Item 3 below).
2. Eligibility for Matching Contribution (Section 7.04(b)): Check
applicable item(s). (SEE MODIFICATION)
[ ] Participants who complete the following number of Hours
of Service during the Plan Year:
[ ] more than 500 [ ] at least 1,000
[ ] other (not more than 1,000):_____________
[ ] Participants who are still employed by the Employer on the
last day of the Plan Year.
[ ] Notwithstanding any of the above requirements, a Participant
who has experienced a Termination of Employment during the
Plan Year on account of death, Disability or retirement on or
after his Normal Retirement Date shall be eligible for a
Matching Contribution.
[ ] An Employee who was a Participant at any time during the Plan
Year.
[ ] A Participant who is not a Highly Compensated Participant.
This provision is effective as of __________________________.
[ ] A Participant who is not a Partner-Employee. This provision
is effective as of _____________.
[ ] A Participant who has _____ (not more than 2) Year(s) of
Service. For Plan Years beginning before January 1, 1989, the
___ Year(s) of Service in the preceding sentence shall be
replaced by ____ (not more than 3) Year(s) of Service. (Note:
Depending upon the effect of these eligibility requirements,
the Matching Contribution Account may have to be 100% vested
in Item M.5 below.)
[ ] A Participant who would have also been a Participant if the
minimum service eligibility requirement in Section 3.01(a)
were ________________________ (not more than 2 Years of
Service). For Plan Years beginning before January 1, 1989,
the ________________________ in the preceding sentence shall
be replaced by ________________________ (not more than 3
Years of Service). (Note: Depending upon the effect of these
eligibility requirements, the Matching Contribution Account
may have to be 100% vested in Item M.5 below.)
3. Allocation of Discretionary Matching Contributions (Section
7.05(a)) (SEE MODIFICATION)
a. For purposes of Section 7.05(a), a Participant's
Deferrals in excess of the following amount shall not be
taken into account: Check applicable item(s):
[ ] All Deferrals are taken into account
[ ] ____% (not more than 6%) of his Compensation. For
Plan Years beginning after _____________________,
Deferrals in excess of ______% of his Compensation
will not be taken into account.
[ ] $________________.
-13-
<PAGE> 61
b. Matching Contributions on behalf of any Participant
shall be limited to the following amount: Check
applicable item(s): (SEE MODIFICATION)
[ ] no limit is applicable
[ ] ____% of his Deferrals
[ ] ____% of his Compensation
[ ] $_______.
4. Allocation of Required Matching Contribution (Section 7.05(b))
(SEE MODIFICATION)
a. An eligible Participant shall be allocated a Matching
Contribution equal to ____% of his Deferrals for the
Plan Year.
b. Matching Contributions on behalf of any Participant
shall be limited to the following amount: Check
applicable item(s):
[ ] no limit is applicable
[ ] _____% of his Compensation. For Plan Years beginning
after ____________________, Matching Contributions
shall be limited to _____% of his Compensation.
[ ] $_________.
5. Vesting of Matching Contribution Account (Section 7.06). The
elections described below shall apply only for purposes of
determining vesting of the Matching Contribution Account. (SEE
MODIFICATION)
a. Vested Percentage
i. The Vested Percentage for Plan Years beginning
prior to January 1, 1989 shall be:
[ ] Same as Vested Percentage applicable to
Employer Contribution Account (see Item
K.2.a of the Adoption Agreement).
[ ] 100% immediately
[ ] 100% after ____ Year(s) of Service.
[ ] determined in accordance with Schedule
___ below:
<TABLE>
<CAPTION>
Vested Percentage
----------------------------------------------------------------
Years of Service Schedule A Schedule B Schedule C Schedule D Schedule E
---------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Less than 1 year 0% 0% 0% 0% %
1 but less than 2 10% 0% 0% 0% %
2 but less than 3 20% 0% 0% 20% %
3 but less than 4 30% 0% 0% 40% %
4 but less than 5 40% 40% 40% 60% %
5 but less than 6 50% 45% 50% 80% %
6 but less than 7 60% 50% 60% 100% %
7 but less than 8 70% 60% 70% 100% %
8 but less than 9 80% 70% 80% 100% %
9 but less than 10 90% 80% 90% 100% %
10 but less than 11 100% 90% 100% 100% %
11 or more 100% 100% 100% 100% %
</TABLE>
-14-
<PAGE> 62
ii. The Vested Percentage for Plan Years beginning after December
31, 1988 shall be (Note: The schedules below must comply with
Section 411(a)(2) of the Code.):
[ ] Same as Vested Percentage applicable to Employer
Contribution Account (see Item K.2.b. of the Adoption
Agreement).3
[ ] 100% immediately
[ ] 100% after _____ Year(s) of Service
[ ] determined in accordance with Schedule ___ below:
<TABLE>
<CAPTION>
Vested Percentage
---------------------------------------
Years of Service Schedule A Schedule B Schedule C
---------------- ---------- ---------- ----------
<S> <C> <C> <C>
Less than 1 year 0% 0% %
1 but less than 2 0% 0% %
2 but less than 3 20% 0% %
3 but less than 4 40% 20% %
4 but less than 5 60% 40% %
5 but less than 6 80% 60% %
6 but less than 7 100% 80% %
7 or more 100% 100% 100%
</TABLE>
b. Vested Percentage For Certain Participants: If this Plan is an amendment
of a Prior Plan to comply with TRA86: (Note: The schedule selected below
must be no worse than the schedule in Item 5.a.ii. above.)
[ ] The schedule in Item 5.a.ii. above shall be applicable since it
results in Vested Percentages at least equal to the Vested
Percentages determined under the schedule in Item 5.a.i. above.
[ ] An Employee who was a Participant in the Plan on the day before the
first day of the Plan Year beginning in 1989 shall have his Vested
Percentage determined in accordance with:
[ ] the schedule in Item 5.a.i. above
[ ] the schedule below:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than 1 year %
1 but less than 2 %
2 but less than 3 %
3 but less than 4 %
4 but less than 5 %
5 but less than 6 %
6 but less than 7 %
7 or more 100%
</TABLE>
-15-
<PAGE> 63
N. JOINING BONUSES (SECTION 7.03)
1. Are Joining Bonuses provided under the Plan?
[X] No [ ] Yes (complete Items 2, 3 and 4 below)
2. Joining Bonuses are
[ ] discretionary.
[ ] Required. Each eligible Participant (and Inactive Participant)
shall be entitled to a Joining Bonus of $__________.
3. In addition to the requirements described in Section 7.03(b), a
Participant (and Inactive Participant) must meet the following
requirement(s) to be eligible for a Joining Bonus:
[ ] He must complete the following number of Hours of Service
during the Plan Year:
[ ] more than 500 [ ] at least 1,000
[ ] other (not more than 1,000):_________________
[ ] He must still be employed by the Employer on the last day
of the Plan Year.
[ ] Notwithstanding either of the above requirements, a
Participant who has experienced a Termination of Employment
during the Plan Year on account of death, disability or
retirement on or after his Normal Retirement Date shall be
eligible for a Joining Bonus.
4. A Participant's Vested Percentage in his Joining Bonus Account
shall be
[ ] 100%
[ ] determined by the vesting schedule applicable to the
Matching Contribution Account (see Item M.5 of the
Adoption Agreement).
O. INVESTMENT FUNDS
Section 5.03 allows the establishment of separate Investment Funds.
[ ] Separate Investment Funds are not established.
[X] Separate Investment Funds are established. Complete Items 1 and
2 below:
1. A Participant Directed Fund [ ] shall [ ] shall not be
established.
2. Which Account(s) may be invested in Investment Funds?
[X] All Accounts
[ ] Deferred Income Account
[ ] Employer-type Accounts (i.e. Employer Contribution Account
and Qualified Nonelective Contribution Account)
[Additional options on next page]
-16-
<PAGE> 64
[ ] Employee-type Accounts (i.e. Employee Contribution Account,
Prior Plan Account and Rollover Contribution Account)
[ ] Matching-type Accounts (i.e. Joining Bonus Account,
Matching Contribution Account and Qualified Matching
Contribution Account)
(Note: If an Account is not invested in any Investment
Fund, such Account (and related contributions) shall be
invested in the General Fund.)
P. PAYMENT OF BENEFITS
1. Normal Retirement Age (Section 2.66) shall mean the latest of
(Note: See Section 2.66 for other restrictions):
a. The Participant's 62nd (not later than 65th) birthday
b. The date the Participant completes N/A Years of
-----
Service
c. The 5th anniversary of the Participant's Entry Date.
2. Section 8.01(a)(ii) allows a distribution of Benefits to a
Participant who reaches his Normal Retirement Date, but does not
have a Termination of Employment. This option is
[ ] Not available. No payments will be made prior to a
Termination of Employment.
[X] Available. Distribution will be made as of the "Deemed
Retirement Date."
3. Section 8.02(d) allows payment of Benefits in installments. Such
method of installment payment is [ ] permitted [X] not
permitted.
4. Is this Plan an amendment or restatement of a Prior Plan
(Section 8.02(d))?
[ ] No.
[X] Yes. Did the Prior Plan provide for forms of payments other
than lump sums or installments, and such forms of payment
may not be eliminated pursuant to Section 411(d)(6) of the
Code?
[X] No.
[ ] Yes. The Plan must be amended to include such
forms of payment.
5. Section 8.02(b) generally provides that payment of Benefits will
be paid as soon as practical after the end of the Plan Year in
which a distributable event occurs. Section 8.02(b) also allows
an alternative method regarding the timing of payment. An
alternative method is hereby [X] not elected [ ] elected. If
elected, payment of Benefits will be deferred until
[ ] the Participant's Normal Retirement Date or age 62, if
later.
[ ] the Participant incurs _______ consecutive Break(s)-In-
Service.
-17-
<PAGE> 65
Q. CODE SECTION 415 REQUIREMENTS IF EMPLOYER MAINTAINS MORE THAN ONE PLAN
(SECTION 5.09). This option must be consistent under all plans of the
Employer.
1. Code Section 415(f)(1)(B):
[X] Code Section 415(f)(1)(B) is not applicable because the
Employer has never maintained more than one defined
contribution plan at the same time.
[ ] Additions under this Plan shall be reduced first.
[ ] Additions under the following plan(s) shall be reduced
first (specify plan(s) in sequence of reduction):
2. Code Section 415(e):
[X] The Employer maintains no defined benefit plans so that
Code Section 415(e) is not applicable.
[ ] No Employee is covered by more than one type of plan, so
that Code Section 415(e) is not applicable.
[ ] Contributions under a defined contribution plan maintained
by the Employer shall first be reduced or discontinued in
order to satisfy Code Section 415(e) (see Item 1 above).
[ ] Benefits under a defined benefit plan maintained by the
Employer shall first be reduced to satisfy Code Section
415(e).
R. LOANS (SECTION 5.10)
Loans are [X] permitted [ ] not permitted.
-18-
<PAGE> 66
S. TOP HEAVY MINIMUM BENEFITS (SECTION 11.05(e)). THIS OPTION MUST BE THE
SAME UNDER ALL PLANS OF THE EMPLOYER. (Note: Minimum benefits under
Section 11.05[(a) through (e)] are computed based upon Gross Earnings.)
If a Participant is covered under both a defined benefit and defined
contribution plan, the minimum benefit requirements of Section 11.05(e)
will be satisfied by the method chosen below:
[X] Section 11.05(e) is not applicable because no Employee is covered
under both a defined benefit plan and a defined contribution plan.
[ ] The Participant receives the defined benefit minimum.
[ ] The Participant receives the defined benefit minimum, but there is a
"floor offset" arrangement with the defined contribution plan.
[ ] The Participant does not receive any special minimum, but only if a
comparability analysis shows that total benefits under both types of
plans are equivalent to the defined benefit minimum.
[ ] The Participant receives contributions and forfeitures under the
defined contribution plan equal to 5% of his Gross Earnings (while a
Participant) for the Plan Year.
The Company and each Employer, acting upon the advice of legal counsel and
pursuant to a duly authorized resolution of the Company's and each Employer's
Governing Body, and each Trustee (if using the Louis Kravitz & Associates, Inc.
Master Trust Agreement) HEREBY AGREE to the provisions of the Plan and Trust,
and IN WITNESS WHEREOF, the parties below have executed the Plan and Trust on
this 3rd day of June, 1997.
NOTE: The Company and other adopting Employers may not rely upon the IRS
advisory letter issued to Louis Kravitz & Associates, Inc. with respect to the
qualification of this Plan. The Company and other adopting Employers must apply
to the appropriate IRS office for its own determination letter in order to
obtain reliance.
HASKEL INTERNATIONAL, INC.
-----------------------------------------------
The Company
By /s/ LONNIE D. SCHNELL
---------------------------------------------
LONNIE D. SCHNELL
-----------------------------------------------
Print Name
[See next page for additional signatures]
-19-
<PAGE> 67
OTHER ADOPTING EMPLOYER(S):
<TABLE>
<CAPTION>
PRINT NAME
NAME OF EMPLOYER OF AUTHORIZED PERSON SIGNATURE
---------------- -------------------- ---------
<S> <C> <C>
HASKEL ELECTRONIC PRODUCTS, INC. L.D. SCHNELL /s/ L.D. SCHNELL
- ---------------------------------- --------------------------------- ------------------------------
HASKEL - HOGAN SYSTEMS AND
SERVICE COMPANY L.D. SCHNELL /s/ L.D. SCHNELL
- ---------------------------------- --------------------------------- ------------------------------
- ---------------------------------- --------------------------------- ------------------------------
TRUSTEE(S) (If using the Louis Kravitz & Associates, Inc. Master Trust Agreement):
PRINT NAME SIGNATURE
---------- ---------
FIRST TRUST CORPORATION
- ----------------------------------------- ------------------------------------------------------
- ----------------------------------------- ------------------------------------------------------
- ----------------------------------------- ------------------------------------------------------
PLAN ADMINISTRATOR (If other than the Company): ADMINISTRATATIVE COMMITTE UNDER THE HASKEL
INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN
PRINT NAME BY
---------- --
DEREK ALDRED /s/ DEREK ALDRED
- ----------------------------------------- ------------------------------------------------------
DON GARBEDIAN /s/ DON GARBEDIAN
- ----------------------------------------- ------------------------------------------------------
PAM KARNO /s/ PAM KARNO
- ----------------------------------------- ------------------------------------------------------
JESSE ROMERO /s/ JESSE ROMERO
- ----------------------------------------- ------------------------------------------------------
LONNIE D. SCHNELL /s/ LONNIE D. SCHNELL
- ----------------------------------------- ------------------------------------------------------
Attorney's Approval of Plan and Adoption Agreement as to Form and Content:
Print Name Signature
---------- ---------
- ----------------------------------------- ------------------------------------------------------
</TABLE>
-20-
<PAGE> 68
OTHER ADOPTING EMPLOYER(S):
<TABLE>
<CAPTION>
PRINT NAME
NAME OF EMPLOYER OF AUTHORIZED PERSON SIGNATURE
---------------- -------------------- ---------
<S> <C> <C>
HASKEL ELECTRONIC PRODUCTS, INC. L.D. SCHNELL /s/ L.D. SCHNELL
- ---------------------------------- --------------------------------- ------------------------------
HASKEL - HOGAN SYSTEMS AND
SERVICE COMPANY L.D. SCHNELL /s/ L.D. SCHNELL
- ---------------------------------- --------------------------------- ------------------------------
- ---------------------------------- --------------------------------- ------------------------------
TRUSTEE(S) (If using the Louis Kravitz & Associates, Inc. Master Trust Agreement):
PRINT NAME SIGNATURE
---------- ---------
FIRST TRUST CORPORATION MARK A. KELLEY, SVP
- ----------------------------------------- ------------------------------------------------------
- ----------------------------------------- ------------------------------------------------------
- ----------------------------------------- ------------------------------------------------------
PLAN ADMINISTRATOR (If other than the Company): ADMINISTRATIVE COMMITTEE UNDER THE HASKEL
INTERNATIONAL, INC. RETIREMENT SAVINGS PLAN
PRINT NAME BY
---------- --
DEREK ALDRED /s/ DEREK ALDRED
- ----------------------------------------- ------------------------------------------------------
DON GARBEDIAN /s/ DON GARBEDIAN
- ----------------------------------------- ------------------------------------------------------
PAM KARNO /s/ PAM KARNO
- ----------------------------------------- ------------------------------------------------------
JESSE ROMERO /s/ JESSE ROMERO
- ----------------------------------------- ------------------------------------------------------
LONNIE D. SCHNELL /s/ LONNIE D. SCHNELL
- ----------------------------------------- ------------------------------------------------------
Attorney's Approval of Plan and Adoption Agreement as to Form and Content:
Print Name Signature
---------- ---------
- ----------------------------------------- ------------------------------------------------------
</TABLE>
-20-
<PAGE> 69
LOUIS KRAVITZ & ASSOCIATES, INC.
MASTER 401(K) PROFIT SHARING PLAN
It is hereby certified that the following is a true and
correct copy of the Louis Kravitz & Associates, Inc.
Master 401(k) Profit Sharing Plan, as adopted by
the Company in the Adoption Agreement.
LOUIS KRAVITZ & ASSOCIATES, INC.
BY LOUIS KRAVITZ
---------------------------
Copyright (C) 1994 Louis Kravitz & Associates, Inc. All Rights Reserved.
November 1, 1994
<PAGE> 70
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C> <C>
Article I General................................................I-1
Article II Definitions...........................................II-1
Article III Eligibility, Participation and Service...............III-1
Article IV Contributions and Forfeitures.........................IV-1
Article V Allocations and Loans..................................V-1
Article VI Deferrals and Hardship Withdrawals....................VI-1
Article VII Matching Contributions, Joining
Bonuses and Coordination with Deferrals..............VII-1
Article VIII Payments of Benefits................................VIII-1
Article IX Age 70 1/2 Distribution Requirements..................IX-1
Article X Joint and Survivor Annuity Requirements................X-1
Article XI Top-Heavy Provisions..................................XI-1
Article XII The Trust............................................XII-1
Article XIII Administration......................................XIII-1
Article XIV Amendments, Action by Employer
and Mergers..........................................XIV-1
Article XV Plan Termination......................................XV-1
Article XVI Adoption and Withdrawal by
Other Organizations..................................XVI-1
Article XVII Miscellaneous.......................................XVII-1
</TABLE>
<PAGE> 71
ARTICLE I
GENERAL
1.01 PURPOSE
This new (or amended and restated) Plan is created for the purpose of
enabling eligible employees of the Employer to secure retirement, disability and
other benefits. It is the Plan's objective to provide employees of the Employer
with a greater incentive to work efficiently, to stimulate such employees'
desire to remain with the Employer, and to develop in them a sense of
responsibility and sincere interest in the successful operation of the Employer.
The Plan is designed to qualify as a profit sharing plan for purposes of
Sections 401(a), 402, 412 and 417 of the Internal Revenue Code of 1986 (the
"Code"). The Plan also provides for (1) a qualified cash or deferred arrangement
designed to meet the requirements of Section 401(k) of the Code, and (2)
matching contributions and after-tax voluntary employee contributions designed
to meet the requirements of Section 401(m) of the Code. The Plan and Trust are
intended to meet the requirements of Sections 401(a) and 501(a) of the Code, and
applicable state law.
Contributions made pursuant to the Plan shall be for the exclusive benefit
of participants and beneficiaries, and shall be held and invested pursuant to
the terms of the Trust Agreement, which is intended to form a part of the Plan.
The provisions of the Plan and Trust shall apply only to Employees who are
employed by the Employers on or after the Effective Date specified in the
Adoption Agreement.
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<PAGE> 72
1.02 QUALIFIED CASH OR DEFERRED ARRANGEMENT AND MATCHING CONTRIBUTIONS
This Plan provides for a qualified cash or deferred arrangement and
matching contributions, as defined by Sections 401(k) and 401(m), respectively,
of the Code. Accordingly, the Plan provides for three types of Employer
contributions: Deferrals, Matching Contributions and Profit Sharing
Contributions (including Employer contributions to satisfy the "Top-Heavy"
requirements of Article XI). These contributions are generally allocated to the
Deferred Income Account, the Matching Contribution Account (or Joining Bonus
Account) and the Employer Contribution Account, respectively.
The Plan also permits the Company to apply different eligibility, vesting
and forfeiture rules to each type of Employer contribution. Accordingly,
definitions and Plan provisions relating to eligibility, vesting and forfeitures
shall be applied according to the type of Employer contribution to which such
definition or Plan provision relates.
1.03 EFFECTIVE DATES
If this Plan is a new plan (that is, the Original Effective Date is in
calendar year 1989 or later), the provisions of this Plan shall be effective as
of the Original Effective Date.
If this Plan is an amendment and restatement of an existing plan to comply
with current and prior tax laws, the provisions of this Plan shall generally be
effective as of the later of (i) the Original Effective Date or (ii) the first
day of the Plan Year beginning in 1987. Notwithstanding the preceding, certain
provisions relating to changes to the following laws or subjects shall be
effective as follows:
I-2
<PAGE> 73
<TABLE>
<CAPTION>
LAW OR SUBJECT EFFECTIVE DATE
-------------- --------------
<S> <C> <C> <C>
1. Retirement Equity Act of 1984 Plan Years beginning in 1985
(REA) (in general)
2. Loan requirements (REA-related) Loans made after August 18, 1985
3. Section 417(a)(2)(A) of the Code Plan Years beginning after
(REA technical correction October 22, 1986
regarding spousal waiver)
4. Section 415 of the Code Limitation Years beginning in 1987
5. Omnibus Budget Reconciliation No provisions necessary; Plan
Act of 1986 already complied prior to Plan
Years beginning in 1988.
6. Leased Employees Services performed after
December 31, 1986
7. Section 401(a)(27) of the Code Plan Years beginning in 1986
(no profits required for profit
sharing contribution)
8. Loan requirements (Department of a. Loans made after
Labor regulations) October 18, 1989, and
b. Loans made on or after
the last day of the Plan
Year beginning in 1989.
9. Tax Reform Act of 1986 (most Plan Years beginning in 1989
provisions)
10. Section 411(d)(6) of the Code Plan Years beginning in 1989
(for "existing" plans - see
IRS regulations)
11. Hardship withdrawals from a. Withdrawals made after
Deferred Income Accounts March 31, 1989, and
b. Withdrawals made in Plan Years
beginning after 1988.
</TABLE>
I-3
<PAGE> 74
1.04 ADDITIONAL REQUIREMENTS FOR PLANS BENEFITING OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is established
and one or more other trades or businesses, this Plan and the plan established
for other trades or businesses must, when looked at as a single plan, satisfy
Sections 401(a) and (d) of the Code for the Employees of this and all other
trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies Sections 401(a) and (d) of the Code and which provides contributions
and benefits not less favorable than provided for Owner-Employees under this
Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or business,
or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control within the meaning
of the preceding sentence.
I-4
<PAGE> 75
1.05 NO LIFE INSURANCE
This Plan does not provide for the purchase of individual life insurance
contracts on the life of any Participant, the premiums for which are charged to
the Account of such Participant. If the Company wishes to provide such
insurance, it must amend the Plan to include all applicable provisions regarding
insurance (e.g. incidental death benefit rules).
1.06 CHANGES TO PLAN PROVISIONS
This Plan and Trust may be amended either by the adoption of an
individually drafted amendment or the execution of another Adoption Agreement.
The provisions of the amended Adoption Agreement shall apply only to Employees
who are employed by the Employer(s) on or after the Plan Amendment Effective
Date specified in the Adoption Agreement.
Any amendment which affects the Vested Percentage of a Participant shall
be subject to the following conditions:
(a) A Participant's Vested Percentage shall be no less than his
Vested Percentage as of the later of the date such amendment is adopted
or the date such amendment is effective.
(b) A Participant who has at least 3 Years of Service (5 Years of
Service for Plan Years beginning before January 1, 1989) shall be
permitted to elect (in accordance with procedures prescribed by the
Administrator) to have his Vested Percentage computed under the vesting
schedule in effect prior to such amendment.
If any provision of this Plan (including any applicable Plan rules and
procedures) results in any discrimination prohibited by Section 401(a)(4) of the
Code, such provision shall be rendered invalid (including any benefit accrued
under such provision). Instead, the affected provision shall be operated in a
manner consistent with Section 401(a)(4) of the Code.
I-5
<PAGE> 76
1.07 PERMITTED DISPARITY
If an Employer maintains another plan which (a) provides for permitted
disparity under Section 401(l) of the Code, and (b) covers a Participant of this
Plan, then the Integrated Allocation Method may not be selected in Section 5.06.
The intent of this Section 1.07 is to prevent an accidental violation of the
"overall permitted disparity" limits of regulation 1.401(l)-5. (Note: The
Company may use permitted disparity in this Plan and in another plan of an
Employer by amending the Plan to include the requirements of regulation
1.401(l)-5(a)(2). However, the Company shall then be considered to have adopted
an "individually-designed plan", rather than a "volume submitter plan".)
1.08 COMPLIANCE WITH SECTIONS 410(B) AND 401(A)(26) OF THE CODE
If the Plan (or a portion of the Plan) fails to satisfy Section 410(b) of
the Code for a Plan Year (1) even after all administrative methods have been
applied (e.g. designating two or more separate plans of the Employer as a single
plan), and (2) solely because Section 5.05 or 7.04(b) [whichever is applicable]
requires the completion of more than 500 Hours of Service and/or employment on
the last day of the Plan Year, then the following individuals (in the following
order and only to the extent necessary to satisfy Section 410(b) of the Code for
such Plan Year) shall also be eligible for an allocation of Profit Sharing
Contributions or Matching Contributions [whichever is applicable] for such Plan
Year:
(a) Participants (but not Inactive Participants who become Inactive
Participants during the Plan Year) who (i) are still employed by the
Employer on the last day of the Plan Year, and (ii) complete at least 999
Hours of Service during the Plan Year;
(b) Step (a) shall be applied again, but substituting "998 Hours of
Service" for "999 Hours of Service" in clause (ii) of step (a). This step
(b) shall be repeated as many times as necessary to satisfy Section 410(b)
of the Code for the Plan Year, by successively reducing the Hours of
Service requirement by one Hour each time;
(c) Inactive Participants who (i) become Inactive Participants
during the Plan Year, (ii) are still employed by the Employer on the last
day of the Plan Year, and (iii) complete at least 999 Hours of Service
during the Plan Year;
(d) Step (c) shall be applied again, but substituting "998 Hours of
Service" for "999 Hours of Service" in clause (iii) of step (c). This step
(d) shall be repeated as many times as necessary to satisfy Section 410(b)
of the Code for the Plan Year, by successively reducing the Hours of
Service requirement by one Hour each time;
I-6
<PAGE> 77
(e) Participants (but not Inactive Participants who become Inactive
Participants during the Plan Year) who (i) are not employed by the
Employer on the last day of the Plan Year, and (ii) complete at least 999
Hours of Service during the Plan Year;
(f) Step (e) shall be applied again, but substituting "998 Hours of
Service" for "999 Hours of Service" in clause (ii) of step (e). This step
(f) shall be repeated as many times as necessary to satisfy Section 410(b)
of the Code for the Plan Year, by successively reducing the Hours of
Service requirement by one Hour each time (but not below 500 Hours of
Service);
(g) Inactive Participants who (i) become Inactive Participants
during the Plan Year, (ii) are not employed by the Employer on the last
day of the Plan Year, and (iii) complete at least 999 Hours of Service
during the Plan Year;
(h) Step (g) shall be applied again, but substituting "998 Hours of
Service" for "999 Hours of Service" in clause (iii) of step (g). This step
(h) shall be repeated as many times as necessary to satisfy Section 410(b)
of the Code for the Plan Year, by successively reducing the Hours of
Service requirement by one Hour each time (but not below 500 Hours of
Service).
If the Plan fails to satisfy Section 401(a)(26) of the Code for a Plan
Year, then rules similar to the foregoing rules shall become applicable.
1.09 REVISED $150,000 COMPENSATION LIMIT UNDER CODE SECTION 401(A)(17)
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan Years
beginning on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual 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.
I-7 (11/1/94)
<PAGE> 78
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account
in determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
I-8 (11/1/94)
<PAGE> 79
ARTICLE II
DEFINITIONS
Where the following words and phrases appear in this Plan, they shall have
the respective meanings set forth below, unless the context clearly indicates to
the contrary:
2.01 "ACCOUNT" OR "ACCOUNTS" shall mean the records relating to any (if
one exists) of the following (depending upon its usage in the applicable Plan
provision): (a) Deferred Income Account, (b) Employee Contribution Account, (c)
Employer Contribution Account, (d) Forfeiture Account, (e) Joining Bonus
Account, (f) Matching Contribution Account, (g) Prior Plan Account, (h)
Qualified Matching Contribution Account, (i) Qualified Nonelective Contribution
Account, (j) Rollover Contribution Account, and/or (k) such other individual
account(s) created by the Administrator pursuant to the provisions of the Plan.
2.02 "ADDITIONS" shall mean the total of the following amounts allocated
to a Participant's Account with respect to each Limitation Year:
(a) Employer contributions (as defined in Section 4.01(a)) and
Forfeitures,
(b) Voluntary contributions, and
(c) Any amounts attributable to Sections 401(h), 415(l) and 419A(d)
[all relating to certain medical benefits] of the Code, but only to the
extent provided by such sections of the Code.
Notwithstanding the foregoing, Additions shall not include (i) Employer
contributions (including Deferrals), Forfeitures and voluntary contributions
which are either distributed to a Participant or held in a suspense account
(both as described in the fourth paragraph of Section 5.09) and (ii) Excess
Deferrals which are distributed in accordance with Sections 6.04(c) and (e). In
addition, for Limitation Years beginning before January 1, 1987, not all
voluntary contributions are Additions. Instead, only the lesser of (i) one-half
of the Participant's voluntary contributions, or (ii) the amount of the
Participant's voluntary contributions in excess of 6% of his Earnings for such
Limitation Year, shall be considered Additions.
2.03 "ADJUSTED GROSS EARNINGS" shall mean Gross Earnings, reduced by all
of the following items (even if includible in gross income): reimbursements or
other expense allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation and
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<PAGE> 80
welfare benefits. In the case of certain Self-Employed Individuals, Adjusted
Gross Earnings shall mean a percentage of his Earned Income. The preceding
percentage shall be determined in accordance with regulation 1.414(s)-1(f)(1),
which takes into account what portion of the Gross Earnings of Non-Highly
Compensated Employees (as a group) is included in the Adjusted Gross Earnings of
Non-Highly Compensated Employees (as a group).
2.04 "ADOPTION AGREEMENT" shall mean the Adoption Agreement executed by
the Employer adopting this Plan. The Adoption Agreement shall be a part of this
Plan.
2.05 "ADMINISTRATOR" shall mean the Company, or the person or persons, or
the committee named in the Adoption Agreement to administer the Plan in
accordance with Article XIII.
2.06 "AFFILIATED COMPANY(IES)" shall mean any corporation which is a
member of a controlled group of corporations of which the Employer is a part,
and any trade or business (whether or not incorporated) which is under common
control with an Employer or an affiliated service group of which the Employer is
a member, as determined under Sections 414(b), 414(c) and 414(m) of the Code,
and for purposes of determining the "maximum benefit" under Section 5.09, under
Section 415(h) of the Code. The term Affiliated Company shall also include any
other entity required to be aggregated with the Employer pursuant to regulations
under Section 414(o) of the Code.
2.07 "AUTHORIZED LEAVE OF ABSENCE" shall mean an absence from employment
by an Employee authorized by the Employer under the Employer's standard
personnel practices. An absence due to service in the armed forces of the United
States during a period of declared war or national emergency or through the
operation of a compulsory military service law and/or during the period
thereafter in which an Employee's reemployment rights are guaranteed by federal
law shall be considered an Authorized Leave of Absence.
2.08 "BALANCED FUND" shall mean that portion of the Trust which shall be
invested and reinvested in types (and combinations) of investments authorized
for the Equity Fund, Fixed Income Fund and the Short-Term Income Fund, as the
Administrator, Trustee or Investment Manager shall deem suitable.
2.09 "BENEFICIARY" shall mean the person or persons (natural or otherwise)
designated by a Member in accordance with Section 8.04 of this Plan to receive
any death benefit which shall be payable under this Plan.
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<PAGE> 81
2.10 "BENEFIT" shall mean the value of a Member's nonforfeitable interest
in his Account(s) which he or his Beneficiary is entitled to receive pursuant to
Article VIII. Depending upon the context in which it is used, the term Benefit
may mean a Member's Benefit attributable to a single Account.
2.11 "BREAK-IN-SERVICE" shall mean either (a) or (b) below:
(a) If the Elapsed Time method of computing Years of Service is
chosen in the Adoption Agreement, any twelve consecutive month period of
severance commencing on the date an Employee experiences a Termination of
Employment or on the anniversary of such date, and during which time he is
not an Employee. Notwithstanding the foregoing, a period of severance
shall not include the period between the first and second anniversaries of
the date the Employee is first absent from work for maternity or paternity
reasons.
(b) If the Hours of Service method of computing Years of Service is
chosen in the Adoption Agreement, a Computation Period during which an
Employee fails to complete more than 500 Hours of Service.
2.12 "CODA" shall mean a cash or deferred arrangement, under which a
covered employee may elect to have his employer either (i) contribute an amount
on the employee's behalf to a trust which is a part of a tax-qualified plan, or
(ii) provide such amount to the employee in cash (or other form of taxable
benefit). A CODA shall also include a salary reduction arrangement. A QUALIFIED
CODA is a CODA which (i) satisfies the requirements of Section 401(k) of the
Code, and (ii) is part of a tax-qualified plan.
2.13 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.14 "COMPANY" shall mean the corporation, partnership or sole
proprietorship named in the Adoption Agreement, including any successor to the
Company.
2.15 "COMPENSATION" shall mean those amounts elected in the Adoption
Agreement which are paid to a Participant during a Plan Year. The Administrator
may establish rules to provide that certain Compensation earned, but not yet
paid because of the timing of payroll periods/pay days, shall be treated as
"paid" if the conditions described in regulation 1.415-2(d)(5)(ii) are
satisfied.
(a) If not specifically stated otherwise, any amounts that are
included or excluded from the definition of Compensation shall also
include or exclude, respectively, elective Employer contributions
attributable to such amounts made pursuant to a salary
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<PAGE> 82
reduction agreement which are not includible in the gross income of the Employee
under Sections 125, 402(a)(8),402(h) or 403(b) of the Code.
(b) If not specifically stated otherwise, Compensation includes
Earned Income as a Self-Employed Individual to the extent allowed under
regulation 1.414(s)-1(f)(1), which takes into account what portion of the
Gross Earnings of Non-Highly Compensated Employees (as a group) is
included in the Compensations of Non-Highly Compensated Employees (as a
group).
(c) If not specifically stated otherwise, Compensation shall exclude
all Compensation from entities other than an Employer.
(d) Compensation shall exclude all Compensation paid to an Inactive
Participant during the period he is an Inactive Participant.
Notwithstanding the first sentence of this Section, in the case of a Plan
which was originally adopted prior to May 14, 1990, and if elected in the
Adoption Agreement, Compensation shall be determined on an "accrued" basis.
However, the preceding election (if made) shall expire at the end of the Plan
Year which begins in 1991.
For Plan Years beginning in 1989 and later, Compensation shall not exceed
$200,000 (or such higher amount in accordance with Sections 401(a)(17) and
415(d) of the Code). If a Plan Year is less than 12 months, the $200,000 (or
such higher amount) shall be prorated accordingly.
If a Leased Employee becomes a Participant, his Compensation shall include
similar Compensation from the leasing organization which is attributable to
services performed for an Employer.
2.16 "COMPUTATION PERIOD" shall mean the 12-consecutive month period used
in measuring an Employee's Year(s) of Service and Break(s)-In-Service. In
general, for purposes of determining eligibility to participate in the Plan, the
Computation Period shall be the 12-consecutive month period starting on the
Employee's Employment Commencement Date and anniversaries thereof. However, see
Section 3.01(a) regarding whether the eligibility Computation Period will shift
to a Plan Year basis. The Computation Period used in determining Years of
Service and Breaks-in-Service for purposes of vesting shall be the Plan Year if
the Hours of Service method of computing Years of Service (as described in
Section 3.05(a)) is selected in the Adoption Agreement.
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<PAGE> 83
2.17 "DEFERRAL(S)" shall mean the amount of a Participant's Compensation
withheld and contributed to the Plan in accordance with the salary reduction
agreement described in Article VI. Deferrals constitute Employer contributions.
For purposes of Sections 6.03(c) [regarding the limits of Section 402(g) of the
Code], 6.05 [regarding the ADP Test] and 7.09(a) [regarding the ACP Test],
Deferrals shall not include those Deferrals distributed pursuant to the fourth
paragraph of Section 5.09 [regarding Section 415 of the Code].
2.18 "DEFERRED INCOME ACCOUNT" shall mean the Account of a Participant to
which Deferrals and any investment gains or losses thereon are credited.
2.19 "DISABILITY" shall mean a physical or mental condition which
permanently prevents an Employee from satisfactorily performing his usual duties
for the Employer or the duties of such other position or job which the Employer
makes available to him and for which such Employee is qualified by reason of his
training, education or experience. The determination whether a Participant
satisfies this definition of Disability shall be made by the Administrator in
accordance with nondiscriminatory rules and procedures established by the
Administrator (which may include a physical examination, medical reports and
other evidence).
2.20 "EARNED INCOME" shall mean "earned income" within the meaning of
Section 401(c)(2) of the Code as an "employee" or "owner-employee" as defined in
Sections 401(c)(l) and 401(c)(3) of the Code. That is, it shall mean the net
earnings from self-employment in the trade or business with respect to which the
Plan is established, for which personal services of the individual are a
material income-producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to such
items. Net earnings are reduced by contributions by the Employer to this Plan or
any other qualified Plan to the extent deductible under Code Section 404. Net
earnings are further reduced by the deduction allowed to the Employer by Code
Section 164(f) for taxable years beginning after December 31, 1989 (relating to
FICA taxes on self-employment income).
2.21 "EARNINGS" shall mean the amounts specified in the Adoption
Agreement. Earnings for any applicable period (Plan Year, Limitation Year, etc.)
is the Earnings paid (or treated as "paid" under rules described in the first
paragraph of Section 2.15 [the definition of Compensation]) during such
applicable period. However, Earnings may be determined on an "accrued" basis if
the conditions of the second "flush left" paragraph of Section 2.15 (modified by
substituting the term "applicable period" for the term "Plan Year") are
satisfied.
Notwithstanding the preceding paragraph, Earnings for a Participant in a
defined contribution plan who is permanently and totally disabled (as defined in
Section 22(e)(3) of the
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<PAGE> 84
Code) is the Earnings such Participant would have received for the Limitation
Year if the Participant had been paid at the rate of Earnings paid immediately
before becoming permanently and totally disabled; such imputed Earnings for the
disabled Participant may be taken into account only if the Participant is not a
Highly Compensated Employee and contributions made on behalf of such Participant
are nonforfeitable when made.
2.22 "EFFECTIVE DATE" shall mean the date specified in the Adoption
Agreement.
2.23 "ELIGIBLE EMPLOYEE" shall mean an Employee other than an Excluded
Employee who has satisfied the requirements for eligibility for participation as
set forth in the Adoption Agreement.
2.24 "EMPLOYEE" shall mean any person who is receiving remuneration for
personal services rendered to an Employer (or would be receiving such
remuneration except for an Authorized Leave of Absence) in the capacity of an
"employee," as defined in Section 3121(d)(l) or (2) of the Code (as opposed to
that of an independent contractor), but excluding nonresident aliens who receive
no U.S. earned income from the Employer. The term Employee shall also include an
individual who is (i) a Self-Employed Individual of an Employer, or (ii) a
Leased Employee of an Employer, unless such Leased Employee is excluded pursuant
to Section 2.58.
2.25 "EMPLOYEE CONTRIBUTION ACCOUNT" shall mean the Account maintained to
record a Participant's voluntary contributions and adjustments relating thereto
as provided in Section 4.03.
2.26 "EMPLOYER" OR "EMPLOYERS" shall mean the Company, other adopting
Employers, if any, listed in the Adoption Agreement, and any other Affiliated
Company which may adopt this Plan in accordance with Article XVI (including any
successor to the Employer).
2.27 "EMPLOYER CONTRIBUTION ACCOUNT" shall mean the Account maintained to
record a Participant's share of the contributions of the Employer and
adjustments relating thereto.
2.28 "EMPLOYMENT COMMENCEMENT DATE" shall mean the date an Employee first
performed an Hour of Service with the Employer or any Prior Employer, if
earlier.
2.29 "ENTRY DATE" shall mean the date or dates Eligible Employees commence
participation in the Plan as specified in the Adoption Agreement. In addition,
the Effective Date and the first day of any Plan Year are Entry Dates.
2.30 "EQUITY FUND" shall mean that portion of the Trust which shall be
invested and reinvested in common stocks, preferred stocks, or in bonds, notes,
or debentures which are
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convertible into common or preferred stocks, mutual or pooled equity investment
funds and the type of investments authorized for the Short Term Income Fund as
the Administrator, Trustee or Investment Manager shall deem suitable.
2.31 "ERISA" shall mean Public Law No. 93-406, the Employee Retirement
Income Security Act of 1974, as amended from time to time.
2.32 "EXCESS COMPENSATION" shall mean a Participant's Compensation, if
any, in excess of the Integration Level.
2.33 "EXCLUDED EMPLOYEE" shall mean an Employee defined as such in the
Adoption Agreement. In addition, an Excluded Employee shall include an Employee
who is a member of a legally recognized collective bargaining unit, but only if
(i) a collective bargaining agreement does not provide for participation by
covered Employees in this Plan, and (ii) the representative of such collective
bargaining unit has had an opportunity to bargain in good faith concerning
retirement benefits.
2.34 "FAMILY MEMBER" shall mean an Employee who is related to a Key Highly
Compensated Employee because he is such Key Highly Compensated Employee's spouse
or lineal ascendant or descendant, or is the spouse of such a lineal
ascendant/descendant.
For purposes of applying Section 401(a)(17) of the Code to a Key Highly
Compensated Employee and his Family Members under Section 5.08 (regarding
allocations of Employer contributions), the term "Family Member" shall include
only the Key Highly Compensated Employee's spouse and lineal descendants who
have not attained age 19 by the end of the Plan Year.
2.35 "FIDUCIARIES" shall mean the Employers, the Administrator, Trustee,
any Investment Manager, and such other persons or entities designated as
Fiduciaries, but only with respect to the specific responsibilities of each for
Plan and Trust administration, all as described herein.
2.36 "FIXED INCOME FUND" shall mean that portion of the Trust which shall
be invested and reinvested in investments providing a return which is fixed,
limited or determinable in advance by the terms of the contract or the
instrument creating or evidencing such investment, such as corporate bonds,
corporate notes or corporate debentures, insurance company investment contracts,
mortgages, real estate loans secured by trust deeds, Treasury Bonds, Treasury
Bills, Treasury Notes or other such similar short-term obligations of the United
States Government or any instrumentality thereof, in savings accounts,
certificates of deposit or other
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interest bearing accounts which provide a reasonable rate of interest, in
commercial paper or bankers' acceptances, in other similar securities or
evidences of indebtedness, or mutual or pooled fixed income investment funds as
the Trustee, Administrator or Investment Manager shall deem suitable.
2.37 "FORFEITURE ACCOUNT" shall mean the Account(s) established pursuant
to Section 4.02 or Section 7.07, depending upon the context in which such term
is used.
2.38 "FORFEITURE(S)" shall mean (i) the portion of a Member's Account(s)
which is forfeited because of Termination of Employment before full vesting as
determined under Section 8.01(d), or (ii) the portion of an Excess Aggregate
Contribution which is forfeited in accordance with Sections 7.13(a) or
7.14(c)(iii).
2.39 "FORM W-2 EARNINGS" shall mean amounts from an Employer , Affiliated
Company, or any entity predecessor to the Employer that are required to be
reported as wages on Form W-2 [box 10 on the 1991 Form W-2] for income tax
purposes pursuant to Sections 6041(d) and 6051(a)(3) of the Code. However, Form
W-2 Earnings shall exclude moving expense payments/reimbursements to the extent
such amounts are reasonably believed to be deductible under Section 217 of the
Code. In the case of a Self-Employed Individual, Form W-2 Earnings shall mean
his Earned Income.
2.40 "FORMER PARTICIPANT" shall mean a Participant or Inactive Participant
who experienced a Termination of Employment, who has a balance in his Account
which has not been paid in full and who has not again become a Participant
pursuant to Article III.
2.41 "GENERAL FUND" shall mean a special Investment Fund, established to
hold and invest assets of the Trust not invested in the other Investment Funds.
2.42 "GOVERNING BODY" shall mean:
(a) in the case of a corporation, its board of directors.
(b) in the case of a partnership, the partners designated to act on
behalf of the partnership.
(c) in the case of a sole proprietorship, the sole proprietor.
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2.43 "GROSS EARNINGS" shall mean Earnings, plus elective Employer
contributions (attributable to Earnings) made pursuant to a salary reduction
agreement which are not includible in the gross income of the Employee under
Sections 125, 402(a)(8), 402(h) or 403(b) of the Code.
2.44 "GUARANTEED FUND" shall mean that portion of the Trust which shall be
invested and reinvested in securities backed by the United States Government, or
its agencies or subsidiaries, and/or insurance contract or contracts which
provide for a guaranteed rate of interest.
2.45 "HIGHLY COMPENSATED EMPLOYEE" shall mean, for any Plan Year, an
Employee who is considered "highly compensated" during the "Look-Back Year" or
the "Determination Year."
(a) An Employee shall be considered highly compensated during the
Look-Back Year if the Employee, at any time during the Look-Back Year, is
in one of the following categories:
(i) a greater than 5% owner of an Employer or an Affiliated
Company,
(ii) receives Gross Earnings in excess of $75,000,
(iii) an officer of an Employer or an Affiliated Company and
receives Gross Earnings in excess of 50% of the amount in effect
under Section 415(b)(1)(A) for the calendar year in which the
Look-Back Year begins, or
(iv) receives Gross Earnings in excess of $50,000 and is in
the "Top 20% Group."
(b) An Employee shall be considered highly compensated during the
Determination Year if the Employee, at any time during the Determination
Year:
(i) is a greater than 5% owner of an Employer or an Affiliated
Company, or
(ii) (1) is described in subsections (a)(ii), (a)(iii) [where
subsection (a)(iii) is modifiedby substituting Determination Year
for Look-Back Year] or (a)(iv), and
(2) is one of the 100 Employees paid the highest Gross
Earnings.
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(c) For purposes of this Section, the following definitions are
applicable:
(i) "Determination Year" shall mean the Plan Year.
(ii) "Look-Back Year" shall mean the 12-month period
immediately preceding the Determination Year (see special exception
in subsection (h) below).
(iii) "Top 20% Group" shall mean the group of Employees who
are paid the highest Gross Earnings during the applicable period.
The size of the Top 20% Group is equal to 20% of the number of
Employees (see subsection (g) below for exclusion and rounding
rules).
(d) For purposes of this Section, the term Employee shall include or
exclude (as elected in the Adoption Agreement):
(i) Leased Employees who meet certain safe-harbor exceptions
under IRS regulation 1.414(q)-1T,A-7(b)(2); and/or
(ii) Employees who are covered by a collective bargaining
agreement, but only if (1) 90% or more of the Employees of the
Employer and Affiliated Companies are covered under collective
bargaining agreements, and (2) the Plan does not cover any Employee
covered by a collective bargaining agreement.
(e) The $75,000 and $50,000 in subsections (a)(ii) and (a)(iv),
respectively, shall automatically increase (starting with the
Determination/Look-Back Year beginning in 1988) to reflect cost-of-living
increases described in Section 415(d) of the Code. The increased amount
for any Determination/Look-Back Year shall be the dollar limitation in
effect for the calendar year in which such Determination/Look-Back Year
begins.
(f) For purposes of subsection (a)(iii),
(i) The maximum number of officers who are considered Highly
Compensated Employees shall be determined as follows:
<TABLE>
<CAPTION>
MAXIMUM NUMBER OF OFFICERS
CONSIDERED HIGHLY
NUMBER OF EMPLOYEES COMPENSATED EMPLOYEES
------------------- ---------------------
<S> <C>
30 or less 3
31 to 500 10% of the number of Employees
500 or more 50
</TABLE>
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If the number of officers exceeds the maximum number of
officers considered Highly Compensated Employees according to the
above schedule, only those with the highest Gross Earnings during
the applicable period shall be considered Highly Compensated
Employees.
(ii) If no officer has Gross Earnings in excess of 50% of the
amount in effect under Section 415(b)(1)(A) of the Code, then the
officer with the highest Gross Earnings during the applicable period
shall be deemed a Highly Compensated Employee.
(iii) For purposes of determining the number of Employees in
the left-hand column of the schedule in paragraph (i) above, the
following Employees shall be excluded (unless modified in the
Adoption Agreement):
(1) Employees who have not completed 6 months of service
by the end of the applicable period
(2) Employees who normally work less than 17-1/2 hours
per week
(3) Employees who normally work not more than 6 months a
year
(4) Employees who have not attained age 21 by the end of
the applicable period
(iv) If "10% of the number of Employees" in the right-hand
column of the schedule in paragraph (i) above is not an integer, the
result shall be rounded in the manner specified in the Adoption
Agreement.
(g) For purposes of determining the size of the Top 20% Group in
subsections (a)(iv) and (c)(iii):
(i) The number of Employees to which the 20% is multiplied
shall take into account the exclusions described in subsection
(f)(iii) above.
(ii) If "20% of the number of Employees" is not an integer,
the result shall be rounded in the same manner as described in
subsection (f)(iv) above.
(h) Notwithstanding subsections (a), (b), and (c), if the Plan Year
of this Plan (and all other plans of the Employer) is the calendar year,
the Company may elect in the Adoption Agreement to define the Look-Back
Year as the Plan Year (if the Plan Year is
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not a 12-month period, the Look-Back Year shall mean the 12-month period
which ends on the last day of the Plan Year). If this election is made, no
Determination Year calculations will be necessary, and the Look-Back Year
rules will apply to the Plan Year (or applicable 12-month period). [See
IRS regulation 1.414(q)-1T,A-14(b)].
2.46 "HIGHLY COMPENSATED PARTICIPANT" shall mean, for any Plan Year, a
Highly Compensated Employee who is also an "eligible employee" for such Plan
Year (as defined in regulation 1.401(k)-1(g)(4) or 1.401(m)-1(f)(4), for
purposes of Article VI or VII, respectively). Accordingly, a Highly Compensated
Employee is a Highly Compensated Participant if he is directly or indirectly
eligible (1) to make a Deferral (in the case of Article VI), or (2) to have
Aggregate Contributions [as defined in Section 7.02] allocated to his Account(s)
(in the case of Article VII). While the preceding sentence generally covers all
Highly Compensated Employees who are Participants, the term Highly Compensated
Participant also includes a Highly Compensated Employee who is not a Participant
solely because of any of the following reasons:
(a) he has not contributed to another plan of the Employer,
(b) he is "suspended" because of a distribution/withdrawal, a loan,
or an election not to participate (unless the election not to participate
is made pursuant to a "one-time election" as defined in regulation
1.401(k)-1(g)(4)(ii) or 1.401(m)-1(f)(4)(ii), for purposes of Article VI
or VII, respectively), or
(c) he may not receive an Addition on account of Section 415(c)(1)
or 415(e) of the Code.
By contrast, if the Plan provides for a "service" requirement to be
eligible for Deferrals or Aggregate Contributions, a Highly Compensated Employee
shall not be considered a Highly Compensated Participant unless the service is
actually performed. For example, if Section 7.04(b) requires 1,000 Hours of
Service or employment on the last day of the Plan Year, a Highly Compensated
Employee who does not receive a Matching Contribution because of failure to
satisfy such service requirement is not considered a Highly Compensated
Participant for such Plan Year.
2.47 "HOUR OF SERVICE" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours will be
credited to the Employee for the Computation Period in which the duties
are performed; and
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(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during 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. No
more than 501 Hours of Service will be credited under this paragraph for
any single continuous period (whether or not such period occurs in a
single Computation Period). Hours under this paragraph will be calculated
and credited pursuant to Section 2530.200b-2 of the Department of Labor
Regulations which are incorporated herein by this reference; and
(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 will not be credited both under paragraph (a) or paragraph (b), as
the case may be, and under this paragraph (c). These hours will be
credited to the Employee for the Computation Period or Periods to which
the award or agreement pertains rather than the Computation Period in
which the award, agreement or payment is made.
Hours of Service will be credited for employment with an Employer or with
an Affiliated Company which is not an Employer, and with any other entity
required to be aggregated with the Employer pursuant to Sections 414(n) and (o)
of the Code.
Effective for absences in Plan Years beginning with or in calendar year
1985 and solely for purposes of determining whether a Break-In-Service for
participation and vesting purposes has occurred in a Computation Period, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been credited
to such individual but for such absence, or in any case in which such hours
cannot be determined, 8 Hours of Service per day of such absence. For purposes
of this paragraph, an absence from work for maternity or paternity reasons means
an absence (1) by reason of the pregnancy of the individual, (2) by reason of a
birth of a child of the individual, (3) by reason of the placement of a child
with the individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service credited
under this paragraph shall be credited (1) only in the Computation Period in
which the absence begins if the crediting is necessary to prevent a
Break-In-Service in that period, or (2) in all other cases, in the following
Computation Period. The Administrator may require the Participant to furnish
such timely information as the Administrator may reasonably require to establish
that the absence from work was for maternity or paternity reasons (as described
in this paragraph) and the number of days for which there was such an absence.
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The Administrator shall determine Hours of Service on the basis of actual
hours for which an Employee is paid or entitled to payment. However, if records
of such hours are not available, the Administrator may determine Hours of
Service based upon days of employment in a Computation Period by crediting an
Employee with 10 Hours of Service for each day for which the Employee would be
required to be credited with at least one Hour of Service under the preceding
paragraphs. Alternatively, the Administrator may adopt such other equivalency
rule as permitted under Department of Labor Regulations Section 2530.200b-3 (as
amended from time to time), which are incorporated herein by this reference.
The Administrator shall determine the number of Hours of Service, if any,
to be credited to an Employee under the foregoing rules in a uniform and
nondiscriminatory manner and in accordance with Section 2530.200b-2 of the
Department of Labor Regulations (as amended from time to time), which are
incorporated herein by this reference.
2.48 "INACTIVE PARTICIPANT" shall mean an Employee who has become a
Participant in the Plan pursuant to Article III, but whose participation in the
Plan is suspended because of his becoming included in one of the following
categories:
(a) A Participant who becomes an Excluded Employee (see Section
3.03(b)).
(b) A Participant who has been transferred from employment with an
Employer to either employment with a unit of an Employer or an Affiliated
Company not participating in this Plan (see Section 3.06).
(c) A Participant who has waived further participation in this Plan
(see Section 3.08).
(d) A Participant whose participation in the Plan has otherwise
ceased but whose employment has not terminated.
2.49 "INTEGRATION LEVEL" shall mean the amount specified in the Adoption
Agreement.
2.50 "INTEGRATION PERCENTAGE" shall mean:
(a) In the case of a Plan Year beginning prior to 1989, the rate of
tax under Section 3111(a) of the Code (relating to the Employer's OASDI
tax) at the beginning of the Plan Year, or
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<PAGE> 93
(b) In the case of a Plan Year beginning in 1989 and later, the
product of (i) the "Fraction" in the schedule below and (ii) the greater
of (1) 5.7%, or (2) the rate of tax under Section 3111(a) of the Code at
the beginning of the Plan Year attributable to the old-age insurance
portion of OASDI.
IF THE INTEGRATION LEVEL
<TABLE>
<CAPTION>
THE
BUT IS LESS THAN "FRACTION"
EXCEEDS OR EQUAL TO IS
------- ----------- --
<S> <C> <C>
1. $0 the greater of (a) $10,000
or (b) 20% of SSTWB in effect
on the first day of the
Plan Year 1.0
2. the greater of (a) 80% of SSTWB in effect on
$10,000, or (b) 20% the first day of the
of SSTWB in effect Plan Year. 4.3
on the first day of ---
the Plan Year. 5.7
3. 80% of SSTWB in less than 100% of SSTWB in
effect on the first effect on the first day of
day of the Plan the Plan Year. 5.4
Year. ---
5.7
4. If the Integration Level equals the SSTWB in effect on the first
day of the Plan Year, the "Fraction" is 1.0.
</TABLE>
2.51 "INTERIM VALUATION DATES(S)" shall mean the date or dates during the
Plan Year on which an interim valuation is made in accordance with Section
5.04(b).
2.52 "INVESTMENT FUND(S)" shall mean the investment funds established by
the Trustee on the direction of the Administrator. Such funds may include (but
are not limited to) a Balanced Fund, Equity Fund, Fixed Income Fund, Guaranteed
Fund, Participant Directed Fund and Short-Term Income Fund. If separate
Investment Funds are not established, Investment Fund shall mean the assets of
the Trust.
2.53 "INVESTMENT INCOME" shall mean the net gain or loss of the Trust from
investments, as reflected by interest payments, dividends, realized and
unrealized gains and losses on securities, other investment transactions and
expenses paid from the Trust. In
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determining the Investment Income of the Trust for any period, assets shall be
valued on the basis of their fair market value as determined in accordance with
Section 5.02. The Investment Income, if any, of assets held under each
Investment Fund(s) or segregated accounts maintained by the Trustee on the
direction of the Administrator shall be determined separately. Expenses shall be
allocated by the Administrator to each separate fund, if any, on a reasonable
and equitable basis as it may in its sole discretion decide.
2.54 "INVESTMENT MANAGER" shall mean any Fiduciary (other than a trustee
or named fiduciary, as defined in Section 402(a)(2) of ERISA):
(a) who has the power to manage, acquire, or dispose of any assets
of the plan;
(b) who is (1) registered as an investment advisor under the
Investment Advisors Act of 1940; (2) is a bank as defined in ERISA; or (3)
is an insurance company qualified to perform services described in
paragraph (a) under the laws of more than one State; and
(c) who has acknowledged in writing that he is a Fiduciary with
respect to the Plan.
2.55 "JOINING BONUS" shall mean an Employer contribution made pursuant to
Article VII to newly eligible Participants to encourage such Participants to
make Deferrals to the Plan.
2.56 "JOINING BONUS ACCOUNT" shall mean the Account of a Participant to
which a Joining Bonus and any investment gains or losses thereon are credited.
The Administrator may choose not to establish a separate Joining Bonus Account,
in which case a Joining Bonus shall be credited to the Matching Contribution
Account. The preceding sentence shall not be applicable if different vesting
schedules apply to the Joining Bonus Account and to the Matching Contribution
Account.
2.57 "KEY HIGHLY COMPENSATED EMPLOYEE" shall mean a Highly Compensated
Employee who is either:
(a) a greater than 5% owner of an Employer or Affiliated Company, or
(b) one of the 10 Highly Compensated Employees paid the greatest
Gross Earnings during the Plan Year.
2.58 "LEASED EMPLOYEE" shall mean an individual who is treated as an
Employee of an Employer (if he is not already an Employee of an Employer)
because such individual, pursuant
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to an agreement between an Employer and any other person ("leasing
organization"), has performed services for an Employer (or for an Employer and
related persons determined in accordance with Section 414(n)(6) of the Code) 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 Employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
A Leased Employee shall not be considered an Employee of an Employer if:
(a) such individual is covered by a money purchase pension plan
providing:
(i) a nonintegrated employer contribution rate of at least 10%
of Gross Earnings (Gross Earnings from the leasing organization
which is attributable to services performed for an Employer shall be
treated as Gross Earnings from an Employer),
(ii) immediate participation, and
(iii) full and immediate vesting; and
(b) Leased Employees constitute 20% or less of the Employer's
Non-Highly Compensated Employees.
2.59 "LIMITATION YEAR" shall mean the 12-consecutive month period ending
on the date specified in the Adoption Agreement, including periods before the
Effective Date. If the Limitation Year has been amended since the Original
Effective Date, the provisions of the related amendment shall be incorporated
into this Plan by reference.
2.60 "MATCHING CONTRIBUTION ACCOUNT" shall mean the Account of a
Participant to which Matching Contributions and any investment gains or losses
thereon are credited. The Administrator may choose not to establish a separate
Matching Contribution Account, in which case Matching Contributions shall be
credited to the Employer Contribution Account. The preceding sentence shall not
be applicable if different vesting schedules apply to the Employer Contribution
Account and to the Matching Contribution Account.
2.61 "MATCHING CONTRIBUTIONS" shall mean Employer contributions made
pursuant to Article VII to match Deferrals contributed to the Plan.
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2.62 "MAXIMUM ADDITION" shall mean, with respect to any Limitation Year,
the greater of (i) $30,000, or (ii) one-fourth of the defined benefit dollar
limitation in effect under Section 415(b)(1)(A) of the Code for such Limitation
Year. With respect to a Limitation Year of less than 12 months because of an
amendment changing the Limitation Year to a different 12-consecutive month
period, Maximum Addition shall mean the amount described in the preceding
sentence, multiplied by a fraction: the numerator of which is the number of
months in such short Limitation Year, and the denominator of which is 12.
2.63 "MEMBER(S)" shall mean Participants, Former Participants and Inactive
Participants.
2.64 "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean, for any Plan Year, an
Employee of the Employer who is neither a Highly Compensated Employee nor a
Family Member.
2.65 "NON-HIGHLY COMPENSATED PARTICIPANT" shall mean, for any Plan Year, a
Non-Highly Compensated Employee who is also an "eligible employee" for such Plan
Year (as defined in regulation 1.401(k)-1(g)(4) or 1.401(m)-1(f)(4), for
purposes of Article VI or VII, respectively). In addition, the rules in the
definition of "Highly Compensated Participant" shall similarly apply here. This
may be accomplished by substituting the word "Non-Highly" for the word "Highly"
wherever it appears in the definition of "Highly Compensated Participant".
2.66 "NORMAL RETIREMENT AGE" shall mean the age or date specified in the
Adoption Agreement. Notwithstanding the foregoing, Normal Retirement Age shall
not be later than the later of (i) age 65, or (ii) the 5th ("10th" for Plan
Years beginning before January 1, 1988) anniversary of the Participant's Entry
Date.
2.67 "NORMAL RETIREMENT DATE" shall mean the first day of the month in
which the Member attains his Normal Retirement Age.
2.68 "ORIGINAL EFFECTIVE DATE" shall mean the date this Plan was first put
into effect as specified in the Adoption Agreement.
2.69 "OWNER-EMPLOYEE" shall mean an individual who is a sole proprietor,
or who is a partner owning more than 10 percent of either the capital or profits
interest of the partnership.
2.70 "PARITY BREAK" shall mean, if elected in the Adoption Agreement,
either (a) or (b) below:
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(a) If the Elapsed Time method of computing Years of Service is
chosen in the Adoption Agreement, a Break-In-Service which causes an
Employee's Years of Service prior to such Break-In-Service to be
cancelled. An Employee will incur a Parity Break if he has a
Break-In-Service and his continuous period of severance (in determining an
Employee's period of severance, the period between the first and second
anniversaries of the date the Employee is first absent from work for
maternity or paternity reasons shall not be considered a period of
severance) equals or exceeds:
(i) For Plan Years commencing in or after calendar year 1985,
the greater of five years or the period of Years of Service earned
prior to such Break-In-Service; or
(ii) For Plan Years commencing prior to calendar year 1985,
the period of Years of Service earned prior to such
Break-In-Service. If an Employee completed a Parity Break before the
beginning of the Plan Year commencing with or in 1985, his prior
Years of Service shall be cancelled even if the Parity Break
included less than five consecutive Breaks-In-Service.
(b) If the Hours of Service method of computing Years of Service is
chosen in the Adoption Agreement, a Break-In-Service which causes an
Employee's Years of Service prior to such Break-In-Service to be
cancelled. An Employee will incur a Parity Break if he has a
Break-In-Service and the number of his consecutive one-year
Breaks-In-Service equals or exceeds:
(i) For Plan Years commencing in or after calendar year 1985,
the greater of five years or the aggregate number of Years of
Service earned prior to such Break-In-Service; or
(ii) For Plan Years commencing prior to calendar year 1985,
the aggregate number of Years of Service earned prior to such
Break-In-Service. If an Employee completed a Parity Break before the
beginning of the Plan Year commencing with or in 1985, his prior
Years of Service shall be cancelled even if the Parity Break
included less than five consecutive Breaks-In-Service.
For purposes of determining whether or not a Parity Break has occurred,
Years of Service (or the "aggregate number of Years of Service" if the Elapsed
Time method is elected) shall not include any Years of Service previously
cancelled by reason of any other prior Break-In-Service or Parity Break.
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Once an Employee becomes a Participant, a Deferred Income Account is
established on his behalf. Because a Participant is always 100% vested in his
Deferred Income Account, any Employee who has become a Participant shall not
incur a Parity Break regardless of the number of his one-year Breaks-In-Service.
2.71 "PARTICIPANT" shall mean an Employee of an Employer participating in
the Plan in accordance with the provisions of Article III, and is not a Former
Participant or an Inactive Participant.
2.72 "PARTICIPANT DIRECTED FUND" shall mean that portion of a
Participant's Accounts which are held in a segregated fund within the Trust and
invested under the Participant's direction. A Participant shall be solely
responsible for the portion of his Account(s) so invested. The Participant shall
have the right and power to select any broker, salesman, or agent he desires to
execute his investment orders. The Participant shall also have the right and
power to designate an Investment Manager, who shall have control over the
selection of the investments. This power of delegation must be exercised in
writing delivered to the Trustee and Administrator and must be signed and dated
by both the Participant and the Investment Manager. If a Participant dies before
his Account(s) is totally distributed, his control over the selection of
investments for the portion of his Account(s) in the Participant Directed Fund
shall immediately vest in the person or organization he designated as Investment
Manager. If no person or organization is so designated, then the control of
investment shall immediately vest in the Beneficiaries of his Account(s) on a
proportionate basis. If no Beneficiary is designated, the control shall
immediately vest in the personal representative of his estate, or if none, then
in the Trustee.
Neither the Trustee nor the Administrator shall have any investment
responsibility with respect to such Participant Directed Fund. All expenses
resulting from investments made at the direction of a Participant and all
Trustee expenses attributable to a Participant Directed Fund shall be borne
solely by such Participant's Participant Directed Fund. The Administrator shall
allocate other expenses attributable to administering Participant Directed Funds
on a reasonable and equitable basis to each such Participant Directed Fund.
The Administrator and the Trustee shall not be liable nor responsible for
any loss resulting to any Participant or Beneficiary by reason of any sale or
investment made or other action taken pursuant to and in accordance with the
direction of the Participant, any Investment Manager or any other investment
advisor selected by the Participant or Beneficiary.
2.73 "PARTNER-EMPLOYEE" shall mean, in the case of a partnership, an
individual who is a partner of the Employer.
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2.74 "PLAN" shall mean the plan as set forth herein and as amended from
time to time. The name of the Plan shall be the name specified in the Adoption
Agreement.
2.75 "PLAN AMENDMENT EFFECTIVE DATE" shall mean the date, if applicable,
specified in the Adoption Agreement.
2.76 "PLAN YEAR" shall mean the 12-consecutive month period ending on the
date specified in the Adoption Agreement, including periods before the Effective
Date. If the Plan Year has been amended since the Original Effective Date, the
provisions of the related amendment shall be incorporated into this Plan by
reference.
2.77 "PRIOR EMPLOYER(S)" shall mean those entities, if any, specified in
the Adoption Agreement.
2.78 "PRIOR PLAN" shall mean the plan, if any, specified in the Adoption
Agreement, that existed immediately prior to its complete amendment and
restatement into this Plan.
2.79 "PRIOR PLAN ACCOUNT" shall mean the account(s) of Participants who
were participants in the Prior Plan on the day before the Effective Date of this
Plan and shall be maintained in accordance with the Adoption Agreement.
2.80 "PROFIT SHARING CONTRIBUTIONS" shall mean discretionary Employer
contributions which are allocated in accordance with Section 5.06 (including
contributions to satisfy the requirements of Sections 5.06(c) and 11.05).
2.81 "QUALIFIED DOMESTIC RELATIONS ORDER" shall mean a qualified domestic
relations order as described in Section 414(p) of the Code.
2.82 "QUALIFIED MATCHING CONTRIBUTION ACCOUNT" shall mean the Account of a
Participant to which Qualified Matching Contributions and any investment gains
or losses are credited. For Plan Years beginning before January 1, 1989, the
Administrator may choose not to establish a separate Qualified Matching
Contribution Account, in which case Qualified Matching Contributions shall be
credited to the Deferred Income Account, the Matching Contribution Account or
the Employer Contribution Account (in accordance with rules established by the
Administrator).
If the Matching Contribution Account meets the requirements applicable to
the Qualified Matching Contribution Account specified in Section 6.09 (regarding
full vesting and withdrawal/distribution restrictions), the Administrator may
choose not to establish a separate
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Qualified Matching Contribution Account, in which case Qualified Matching
Contributions shall be credited to the Matching Contribution Account.
2.83 "QUALIFIED MATCHING CONTRIBUTIONS" shall mean Matching Contributions
which are used by the Administrator for the purpose of either:
(a) avoiding the nondiscrimination requirements of Section 7.08 (the
ACP Test), or
(b) enabling the Plan to comply with the nondiscrimination
requirements of Section 6.05 (the ADP Test).
(See Sections 7.08 and 6.09 for details regarding such
contributions.)
2.84 "QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT" shall mean the Account
of a Participant to which Qualified Nonelective Contributions made to this Plan
(as opposed to such contributions under another plan of the Employer) and any
investment gains or losses are credited. For Plan Years beginning before January
1, 1989, the Administrator may choose not to establish a separate Qualified
Nonelective Contribution Account, in which case Qualified Nonelective
Contributions shall be credited to the Deferred Income Account or the Employer
Contribution Account (in accordance with rules established by the
Administrator).
2.85 "QUALIFIED NONELECTIVE CONTRIBUTIONS" shall mean amounts (including
certain Forfeitures) contributed by the Employer for the purpose of enabling the
Plan to comply with the nondiscrimination requirements of Sections 6.05 (the ADP
Test), 7.08 (the ACP Test) or 7.14 (the Multiple Use Test). (See Sections 6.08,
7.12 and 7.14 for details regarding such contributions.)
2.86 "REA" shall mean Public Law No. 98-397, the Retirement Equity Act of
1984, as amended from time to time.
2.87 "ROLLOVER CONTRIBUTION" shall mean the taxable portion of:
(a) With respect to periods before January 1, 1993, a "qualified
total distribution" within the meaning of Section 402(a)(5)(E)(i) of the
Code, or a "rollover contribution" within the meaning of Section
408(d)(3)(A)(ii) of the Code; or
(b) With respect to periods after December 31, 1992, an "eligible
rollover distribution" within the meaning of Section 402(c)(4) of the
Code, or a "rollover contribution" within the meaning of Section
408(d)(3)(A)(ii) of the Code.
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A Rollover Contribution shall also include a transfer by a trustee from another
qualified retirement plan to the Trustee of this Plan of a Participant's
interest in such other qualified retirement plan.
2.88 "SAFE HARBOR EARNINGS #A" shall mean an Employee's Earned Income,
wages, salaries and fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the Employer,
Affiliated Company, or any entity predecessor to the Employer to the extent that
such amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, reimbursements and expense allowances).
Safe Harbor Earnings #A shall include foreign earned income (as defined in
Section 911(b) of the Code), whether or not excludable from gross income under
Section 911 of the Code; and Safe Harbor Earnings #A shall exclude the
following:
(a) Employer contributions to a plan of deferred compensation which
are not includible in the Employee's gross income for the taxable year in
which contributed or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferrable or is no longer subject to a substantial risk
of forfeiture;
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, or
contributions made by the Employer or Affiliated Company (whether or not
under a salary reduction agreement) towards the purchase of an annuity
described in Section 403(b) of the Code (whether or not the amounts are
actually excludable from the gross income of the Employee).
2.89 "SAFE HARBOR EARNINGS #B" shall mean Safe Harbor Earnings #A, plus
the following:
(a) Amounts described in Sections 104(a)(3), 105(a) and 105(h) of
the Code, but only to the extent that these amounts are includible in the
gross income of the Employee;
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(b) Amounts paid or reimbursed by the Employer, Affiliated Company,
or an entity predecessor to the Employer, for moving expenses incurred by
an Employee, but only to the extent that these amounts are not deductible
by the Employee under Section 217 of the Code;
(c) The value of a non-qualified stock option granted to an Employee
by the Employer, Affiliated Company, or an entity predecessor to the
Employer, but only to the extent that the value of the option is
includible in the gross income of the Employee for the taxable year in
which granted; and
(d) The amount includible in the gross income of an Employee upon
making the election described in Section 83(b) of the Code.
2.90 "SELF-EMPLOYED INDIVIDUAL" shall mean an individual who has Earned
Income for the taxable year from the trade or business for which the Plan is
established (including an individual who would have had Earned Income but for
the fact that the trade or business had no net profits for the taxable year), or
a Partner-Employee or an Owner-Employee.
2.91 "SHORT-TERM INCOME FUND" shall mean that portion of the Trust which
shall be invested and reinvested in short-term investments providing a known
return such as Treasury Bills, Treasury Notes or other such similar short-term
obligations of the United States Government or any instrumentality thereof, in
savings accounts, certificates of deposit, repurchase agreements, or other
interest bearing accounts which provide a reasonable rate of interest, in
commercial paper or bankers' acceptances, or in other similar investments, or in
mutual or pooled investment funds as the Administrator, Trustee or Investment
Manager shall deem suitable and in loans to Participants.
2.92 "SOCIAL SECURITY TAXABLE WAGE BASE (SSTWB)" shall mean the maximum
amount of earnings which may be considered wages in a given calendar year under
Sections 3121(a)(l) and 3121(x)(1) of the Code for purposes of computing Social
Security (OASDI) taxes.
2.93 "TERMINATION OF EMPLOYMENT" shall mean separation from active
employment with an Employer resulting from retirement, death, Disability,
voluntary or involuntary severance of employment, or failure to return to active
employment with an Employer by the date on which an Authorized Leave of Absence
expired.
2.94 "TEFRA" shall mean Public Law No. 97-248, the Tax Equity and Fiscal
Responsibility Act of 1982, as amended from time to time.
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2.95 "TOP HEAVY VESTING SCHEDULE" shall mean the schedule specified in the
Adoption Agreement.
2.96 "TRA86" shall mean Public Law No. 99-514, the Tax Reform Act of 1986,
as amended from time to time.
2.97 "TRUST" OR "TRUST FUND" shall mean the employee benefit trust fund
maintained in accordance with a Trust Agreement which the Employer(s) has
adopted, or in lieu thereof, or in addition thereto, the fund or funds held and
invested in accordance with the terms of a group deposit administration or
similar insurance contract or contracts.
2.98 "TRUST AGREEMENT" shall mean that certain agreement or agreements
between the Company and the Trustee establishing the Trust or Trusts, or in lieu
thereof, or in addition thereto, the group deposit administration or similar
insurance contract or contracts, which shall be a part of this Plan.
2.99 "TRUSTEE" shall mean the corporation or corporations (including
without limitation any legal reserve life insurance company or companies) or
individual or individuals named in the Trust Agreement and appointed to hold,
invest, reinvest, and disburse the Trust Fund.
2.100 "VALUATION DATE(S)" shall mean the last day of each Plan Year.
However, the Administrator may direct that valuations occur more frequently on a
one-time or on a regular basis.
2.101 "VESTED PERCENTAGE" shall mean the percentage (which may differ
depending upon the Account to which such percentage relates) of a Participant's
nonforfeitable interest in his Employer Contribution Account, Joining Bonus
Account or Matching Contribution Account (depending upon the applicable Plan
provision), determined in accordance with the schedule(s) specified in the
Adoption Agreement.
(a) If applicable, the Vested Percentage of an Employee who was a
Participant in the Plan on the day before the first day of the Plan Year
beginning in 1989 shall be determined in accordance with the alternative
schedule specified in the Adoption Agreement.
(b) In determining a Participant's Vested Percentage, all his Years
of Service shall be included, unless otherwise specified in the Adoption
Agreement. Such exclusion of certain Years of Service shall only be
permitted if (i) the Original Effective Date of this Plan is in calendar
year 1989 or later; or (ii) the Plan or Prior Plan previously excluded
such Years of Service.
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(c) If Years of Service prior to the Original Effective Date are
excluded, the Original Effective Date is modified (extended to an earlier
date) to include service under a "predecessor plan," as defined in IRS
Regulation 1.411(a)-5(b)(3).
(d) Notwithstanding the foregoing, a Participant's Vested Percentage
shall be 100% upon the attainment of his Normal Retirement Age (but only
if he is employed on such date).
2.102 "WAGES" shall mean regular (base) salary or wages from an Employer
for personal services rendered, including elective Employer contributions
(attributable to Wages) made pursuant to a salary reduction agreement which are
not includible in the gross income of the Employee under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code. In the case of certain Self-Employed
Individuals, Wages shall mean a percentage of his Earned Income. The preceding
percentage shall be determined in accordance with regulation 1.414(s)-1(f)(1),
which takes into account what portion of the Gross Earnings of Non-Highly
Compensated Employees (as a group) is included in the Wages of Non-Highly
Compensated Employees (as a group).
2.103 "YEARS OF SERVICE" shall mean an Employee's period of employment as
determined in accordance with Article III.
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ARTICLE III
Eligibility, Participation and Service
3.01 ELIGIBILITY
(a) Eligible Employee: An Employee other than an Excluded Employee
shall become an Eligible Employee upon attainment of the minimum age and
completion of the minimum service specified in the Adoption Agreement (and
taking into account how service is computed for purposes of eligibility to
participate: the Hours of Service method [Section 3.05(a)] or the Elapsed
Time method [Section 3.05(b)]). If the minimum service requirement
specified in the Adoption Agreement is one Year of Service (using the
Hours of Service method), the second and subsequent eligibility
Computation Periods shall be measured in terms of Plan Years, commencing
with the Plan Year in which occurs the first anniversary of the Employee's
Employment Commencement Date, but excluding Years of Service cancelled
because of a Parity Break.
(b) Special Rule For Two or Three Years of Service: This subsection
shall apply if the Adoption Agreement provides that an Employee must
complete two or three Years of Service to become an Eligible Employee. If
an Employee has a Break-In-Service prior to completing one Year of Service
in each of two or three (whichever is applicable) Computation Periods, his
Hours of Service prior to such Break-In-Service shall be cancelled and he
shall be treated as a new Employee for purposes of meeting the
requirements for becoming an Eligible Employee in this Section.
(c) Special Rule for Hours of Service Method: This subsection shall
apply if the Adoption Agreement provides that the Hours of Service method
under Section 3.05(a) is used for purposes of eligibility to participate.
An Employee shall not be credited with a Year of Service until the end of
the Computation Period in which he is credited with at least 1,000 Hours
of Service.
(d) Compliance with TRA86 One-Year Eligibility Requirement: If the
minimum service requirement used in subsection (a) above is greater than
one Year of Service (or equivalent, e.g. 12 or less months of employment,
depending upon the number of Hours of Service completed), such minimum
service requirement shall no longer be permitted
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for Plan Years beginning after December 31, 1988. Accordingly, a separate
minimum service requirement (no greater than one Year of Service or
equivalent) for Plan Years beginning after December 31, 1988 must be
specified in the Adoption Agreement.
Note: Had this Plan not had a qualified CODA, the Plan would have been
permitted to have a minimum service requirement greater than one Year of
Service. This "plan design" can still be accomplished by selecting the
appropriate requirements in Sections 5.05 or 7.04(b) to be eligible for an
allocation of Profit Sharing Contributions or Matching Contributions,
respectively.
(e) Loss of Service: The provisions of Section 3.05(c) regarding
cancellation of certain Years of Service shall also apply for purposes of
eligibility to participate.
3.02 DATE OF PARTICIPATION
(a) Prior Plan Participants: An Employee participating under the
provisions of the Prior Plan, if any, on the day preceding the Effective
Date, shall continue to participate in accordance with the provisions of
this Plan as of the Effective Date.
(b) Effective Date Employees: An Employee who is an Eligible
Employee on the Effective Date shall become a Participant in the Plan on
the Effective Date, provided he is employed by an Employer on the
Effective Date.
(c) Other Employees: Each Employee who does not become a Participant
in this Plan pursuant to subsections (a) and (b) above, shall become a
Participant in the Plan on the Entry Date coinciding with or immediately
succeeding the date such Employee becomes an Eligible Employee, provided
he is employed by an Employer on such Entry Date.
(d) Termination of Employment: A Participant who experiences a
Termination of Employment shall cease to participate in the Plan as of his
date of Termination of Employment.
3.03 EXCLUDED EMPLOYEES
(a) Participation in Plan: An Employee who ceases to be an Excluded
Employee shall become a Participant in this Plan on the later of (i) the
date he ceases to be an Excluded Employee, or (ii) the Entry Date on which
he would have otherwise become a Participant had he not been an Excluded
Employee.
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(b) Cessation of Participation: Notwithstanding any other provision
of this Plan, if any Participant becomes an Excluded Employee, such
Participant shall cease further participation under this Plan and shall
become an Inactive Participant, and shall continue in such status
thereafter. Such Inactive Participant may again become a Participant in
this Plan in accordance with subsection (a) above.
3.04 PARTICIPATION UPON REEMPLOYMENT
Upon the reemployment of an Employee who experienced a Termination of
Employment, the following rules shall apply in determining his participation in
the Plan.
(a) Former Participants: If an Employee who was a Participant is
reemployed, he shall become a Participant on his date of reemployment
unless such Employee is an Excluded Employee.
(b) Other Former Employees: If a former Employee who was not a
Participant is reemployed, he shall be eligible to participate in the Plan
in accordance with Section 3.01, taking account of his prior Years of
Service unless cancelled by reason of a Parity Break or Section 3.01(b).
However, if such Employee on his Termination of Employment date was an
Eligible Employee but had not become a Participant in the Plan, then such
Employee shall participate in the Plan on the later of his date of
reemployment or the Entry Date on which he would have otherwise become a
Participant had he not had a Termination of Employment unless such
Employee's prior Years of Service are cancelled by reason of a Parity
Break or Section 3.01(b).
3.05 YEARS OF SERVICE
This Section 3.05 shall apply for purposes other than eligibility to
participate in the Plan, which is covered by Section 3.01.
(a) Hours of Service Method for Crediting Years of Service: This
subsection shall apply if the Hours of Service method is selected in the
Adoption Agreement. Subject to the loss of service provisions of Section
3.05(c), an Employee shall be credited with a Year of Service for each
Computation Period during which he is credited with 1,000 or more Hours of
Service. Years of Service shall include the following:
(i) Periods of employment with an Employer, an Affiliated
Company and a Prior Employer, if one is specified in the Adoption
Agreement;
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(ii) Periods of employment with a corporation, trade or
business predecessor to an Employer;
(iii) Periods of employment as an "employee" or
"owner-employee" (as defined in Sections 401(c)(l) and 401(c)(3) of
the Code) of any sole proprietorship or partnership which was
predecessor to an Employer; and
(iv) Periods of employment as a Leased Employee.
(b) Elapsed Time Method For Crediting Years of Service: This
subsection shall apply if the Elapsed Time method is selected in the
Adoption Agreement. Years of Service shall be measured in whole years and
fractions of a year with fractions of a Year of Service determined on the
basis of 365 days equaling one year. Subject to the loss of service
provisions of Section 3.05(c), an Employee's Years of Service shall be
determined from his Employment Commencement Date and anniversaries
thereof, and shall include the following:
(i) The total period or periods of employment with an
Employer, an Affiliated Company and a Prior Employer, if one is
specified in the Adoption Agreement;
(ii) Any period of severance of employment following a
Termination of Employment, if the Employee returns to employment
with the Employer or an Affiliated Company within 12 months of such
severance;
(iii) The first 12 months of any Authorized Leave of Absence,
including an absence for maternity or paternity reasons;
(iv) If the Employee quits, is discharged, or retires at any
time during the first 12 months of an Authorized Leave of Absence,
the period of severance after the date he so quits, is discharged,
or retires, if he returns to employment with the Employer or an
Affiliated Company within 12 months of the date when his Authorized
Leave of Absence began;
(v) Periods of employment with a corporation, trade or
business predecessor to an Employer;
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(vi) Periods of employment as an "employee" or
"owner-employee" (as defined in Sections 401(c)(l) and 401(c)(3) of
the Code) of any sole proprietorship or partnership which was
predecessor to an Employer; and
(vii) Periods of employment as a Leased Employee.
(c) Loss of Service: An Employee's Years of Service for purposes of
eligibility to participate in this Plan and/or vesting may be cancelled if
such Employee incurs a Break-In-Service in accordance with the following
rules:
(i) Participants: Because a Participant shall not incur a
Parity Break (see the last paragraph of the definition of Parity
Break in Article II), a Participant's Years of Service earned prior
to his Break-In-Service shall be aggregated with his Years of
Service earned after such Break-In-Service.
(ii) Other Employees: If an Employee not included in
subparagraph (i) incurs a Break-In-Service, his Years of Service
prior to such Break-In-Service shall be cancelled if he incurs a
Parity Break.
This subsection (c) shall not apply if the Adoption Agreement
provides that Employees must complete more than one Year of Service to
become an Eligible Employee.
3.06 TRANSFER OF EMPLOYMENT
If a Participant transfers employment between Employers, he shall maintain
all his rights and obligations under the Plan so long as he remains a
Participant in the Plan. In such a case, his employment shall be considered to
be uninterrupted as if no transfer had been made. However, if a Participant's
employment is transferred to an Affiliated Company or a unit of an Employer not
participating in the Plan, such Participant shall become an Inactive Participant
on the date of such transfer. Such an Inactive Participant may again become a
Participant upon his transfer to an Employer or unit of an Employer
participating in the Plan or by the adoption of the Plan by the Affiliated
Company.
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3.07 INACTIVE PARTICIPANTS
Compensation received by an Employee during the period he is an Inactive
Participant is not taken into account under this Plan. Accordingly, an Inactive
Participant shall not be entitled to (1) share in Profit Sharing Contributions
and Forfeitures allocated pursuant to Article V, (2) make Deferrals pursuant to
Article VI, or (3) share in Matching Contributions allocated pursuant to Article
VII, on account of such Compensation. Upon Termination of Employment, an
Inactive Participant shall have the value of his Accounts determined and
distributed in accordance with Article VIII.
3.08 IRREVOCABLE WAIVER OF PARTICIPATION
If permitted in the Adoption Agreement, an Employee who would otherwise be
eligible to participate in the Plan may irrevocably waive his right to
participate in the Plan. The Employee shall complete such form or forms as may
be required by the Administrator and the Employer, which may include a statement
which releases and holds harmless the Administrator and the Employer from any
and all liability and responsibility associated with the Employee's election to
irrevocably waive his right to participate in the Plan.
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ARTICLE IV
CONTRIBUTIONS AND FORFEITURES
4.01 EMPLOYER CONTRIBUTIONS
(a) Amount of Contribution: Each Employer agrees to contribute for each
Plan Year an amount, if any, to be determined in its sole discretion by the
Governing Body of the Employer. However, such amount shall not be less than the
sum of (1) total Deferrals for such Plan Year, (2) total Matching Contributions
and Joining Bonuses required, if any, under Article VII, and (3) total
"Top-Heavy" minimum contributions required, if any, under Section 11.05.
Each Employer shall designate what portion of the contributions under
this Section 4.01(a) is attributable to (1) Deferrals, (2) Matching
Contributions and/or Joining Bonuses, and (3) Profit Sharing Contributions.
(b) Time of Payment: All contributions of the Employer shall be paid to
the Trustee, and payment shall normally be made not later than the time
prescribed by law for filing the federal income tax return of the Employer,
including any extensions which may be granted for the filing of such tax return.
(c) Corrections: In the event the Administrator determines that a
Participant was excluded from participation in error, or was mistakenly omitted
and was not credited with allocations pursuant to Articles V, VI, and/or VII, or
an error caused a Participant to be credited with less than his full allocations
pursuant to Articles V, VI, and/or VII, the Administrator shall determine the
amounts (or additional amounts) which should have been credited to such
Participant's Account. To correct any such error or omission, the corrected
amount may be deducted from Forfeitures and/or Investment Income prior to
allocating such amounts to other Participants in lieu of adjusting Accounts of
other Participants. In addition to (or instead of) the preceding adjustment, the
Employer may make a special contribution (in addition to the contribution
described in Section 4.01(a)) to correct any such error or omission.
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4.02 DISPOSITION OF FORFEITURES ATTRIBUTABLE TO EMPLOYER
CONTRIBUTION ACCOUNTS
This Section 4.02 discusses the treatment of Forfeitures attributable
only to Employer Contribution Accounts. For a discussion of Forfeitures
attributable to the Matching Contribution Accounts and the Joining Bonus
Accounts, see Sections 7.07 and 7.13.
For Plan Years beginning prior to January 1, 1989, the treatment of
Forfeitures and Forfeiture Accounts attributable to Employer Contribution
Accounts shall be determined under the terms of the Prior Plan. For Plan Years
beginning after December 31, 1988, the provisions of this Section 4.02 shall be
applicable. Forfeitures shall occur as of the date a Forfeiture Account is
established in accordance with subsection (a) below.
(a) Establishment of Forfeiture Accounts: The Administrator
shall establish a Forfeiture Account to record a Former Participant's
Forfeiture, if any. A Former Participant's Forfeiture Account shall be
established as of the earlier of the date the Former Participant
receives a distribution of his Benefit, or the end of the Plan Year in
which the Former Participant incurs five consecutive Breaks-In-Service.
The value of the preceding Forfeiture Account shall be equal to the
value of the non-vested portion of such Former Participant's Employer
Contribution Account on the date the Forfeiture Account is established.
Forfeiture Accounts shall become available for allocation as of the end
of the Plan Year described in the Adoption Agreement, or, if earlier,
as of the end of the Plan Year in which the Former Participant incurs
five consecutive Breaks-In-Service. Such Forfeiture Accounts shall
first be used as Qualified Nonelective Contributions pursuant to
Sections 6.07, 7.11 or 7.14 (Note: Sections 6.07, 7.11 and 7.14 are
effective for Plan Years beginning after December 31, 1990). Any
Forfeiture Accounts not used as Qualified Nonelective Contributions
shall be allocated to the Employer Contribution Accounts of eligible
Participants in accordance with Section 5.07.
If elected in the Adoption Agreement, then notwithstanding the
preceding paragraph, in the case of a Plan subject to subsection (b)(i)
below (repayment of a prior distribution is required in order to
restore a Former Participant's Forfeiture Account), the Forfeiture
Accounts of certain Former Participants shall only become available for
allocation under the "Delayed Forfeiture Allocation Method." Under the
Delayed Forfeiture Allocation Method, if (i) the Forfeiture Account of
a Former Participant has not yet become available for allocation in
accordance with the preceding paragraph, (ii) such Former Participant
returns to employment with the Employer, and (iii) such Former
Participant is eligible for a restoration of his Forfeiture Account
pursuant to
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subsection (b)(i) below, then his Forfeiture Account shall not become
available for allocation in accordance with the preceding paragraph
until the end of the Plan Year in which occurs the end of the repayment
period described in subsection (b)(i) below.
(b) Restoration of Forfeiture Accounts: If a Former
Participant receives a distribution of less than his entire Employer
Contribution Account and subsequently returns to employment with the
Employer before having five consecutive Breaks-In-Service, his right to
the restoration of his prior Forfeiture Account shall be governed by
paragraph (i) or (ii) below, whichever is selected in the Adoption
Agreement:
(i) Repayment of Prior Distribution: If such Former
Participant repays the amount of such distribution, the repaid
amount and his Forfeiture Account shall be added to his new
Employer Contribution Account as of the end of the Plan Year
in which such amount is repaid. Such repayment must be made on
or before the earlier of (1) the Participant incurring five
consecutive one-year Breaks-In-Service following the date of
distribution, or (2) the date five years after the date of
resumption of employment. If such Former Participant does not
make repayment within the prescribed period, his right to the
restoration of his prior Forfeiture Account shall lapse.
(ii) No Repayment Required: The Administrator shall
add back to the (Former) Participant's Employer Contribution
Account the Forfeiture Account as of the Valuation Date
immediately preceding the date of reemployment. To determine
such Participant's vested interest in his Employer
Contribution Account upon any subsequent Termination of
Employment, the following formula shall be applicable:
X = P (AB + D) - D, where
"X" equals the vested interest
"P" equals the Vested Percentage
"AB" equals the value of the Employer Contribution
Account "D" equals the amount of the prior
distribution(s).
(c) Forfeiture Accounts at Plan Termination: Notwithstanding
Section 4.02(b), an individual's rights to Forfeiture restoration shall
lapse when this Plan is terminated and such individual has either (i)
failed to repay his prior distribution in accordance with Section
4.02(b)(i) prior to the date the Plan is terminated or (ii) not resumed
employment prior to the date the Plan is terminated. Any Forfeiture
Accounts
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remaining on the date the Plan is terminated shall be disposed of in
accordance with Section 15.03.
(d) Source of Funds for Restored Forfeitures: If a Forfeiture
Account has already been allocated pursuant to Sections 4.02(a), 5.07,
6.07, 7.11 or 7.14, but such Forfeiture Account must be restored in
accordance with Sections 4.02(a) or (b), such restoration shall be made
from: (i) other Forfeitures which become available, (ii) Employer
contributions under Section 4.01(a), or (iii) Investment Income.
Alternatively, the Employer may make a special contribution to restore
such Forfeiture Account.
(e) Non-Vested Former Participants: For purposes of this
Section 4.02 and Article VIII, if the value of a Former Participant's
(or Inactive Participant's) Benefit is zero at his date of Termination
of Employment, the Former Participant (or Inactive Participant) shall
be deemed to have received a distribution of his Benefit on his date of
Termination of Employment.
4.03 VOLUNTARY AND ROLLOVER CONTRIBUTIONS BY PARTICIPANTS
(a) Company Discretion: If provided in the Adoption Agreement,
Participants may be permitted to elect to make voluntary contributions
to the Trust, and/or Participants may be permitted to contribute
Rollover Contributions. The Administrator shall give Participants
adequate advance notice prior to the beginning of a Plan Year for which
voluntary contributions will, or will not, be permitted. If voluntary
contributions are permitted under this Plan, Section 6.11 may provide
that Discriminatory Deferrals can be recharacterized as voluntary
contributions.
(b) Amount of Voluntary Contributions: With respect to a Plan
Year when voluntary contributions are permitted, the amount of
voluntary contributions (including Discriminatory Deferrals
recharacterized as voluntary contributions in accordance with Section
6.11) made by any Participant shall be subject to the limitations set
forth in the Adoption Agreement and Article V. Voluntary contributions
may be made by payroll deductions or by other methods and at other
intervals in accordance with rules established by the Administrator.
Voluntary contributions received by the Employer shall be transmitted
to the Trustee within 30 days after they have been collected.
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(c) Rollover Contributions: With the approval of the
Administrator, a Participant may contribute a Rollover Contribution
into the Trust. The Administrator, in its sole discretion, shall
determine whether or not a Participant shall be permitted to make a
Rollover Contribution. The Administrator shall develop like and
non-discriminatory rules and procedures. The Administrator may require
the Participant to supply all the information it deems necessary,
including but not limited to the amount and nature of the property to
be contributed, and a statement that such contribution constitutes a
Rollover Contribution.
(d) Separate Fund: The voluntary contributions and Rollover
Contributions of Participants shall be accounted for separately from
that portion of the Trust attributable to Employer contributions. Such
contributions may, but need not, be held and invested in a segregated
separate fund within the Trust established and maintained for this
purpose.
(e) Individual Accounts: The Administrator shall create and
maintain adequate records to record the interest in the Trust of
voluntary contributions and Rollover Contributions. Such records shall
be in the form of individual Accounts in accordance with Section 5.01.
Each Participant electing to make voluntary contributions shall have an
Employee Contribution Account, and each Participant contributing a
Rollover Contribution shall have a Rollover Contribution Account.
(f) Valuation and Allocations: If Employee Contribution
Accounts and/or Rollover Contribution Accounts are held and invested in
a separate fund, the Administrator or Trustee shall determine the net
worth of the assets of the separate fund or funds as of each Valuation
Date or Interim Valuation Date in accordance with Section 5.02.
Investment Income shall be allocated to the Employee Contribution
Accounts and/or Rollover Contribution Accounts as of each Valuation
Date or Interim Valuation Date as provided in Section 5.04.
(g) Vesting: A Participant's Employee Contribution Account
and/or Rollover Contribution Account shall at all times be fully vested
and shall not be forfeitable for any cause.
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(h) Withdrawals from Employee Contribution Accounts: The
Administrator shall adopt uniform rules and procedures pertaining to
the withdrawal from Employee Contribution Accounts. A Participant may
elect to make a withdrawal from his Employee Contribution Account by
filing an adequate advance written notice with the Administrator. Such
withdrawal may be up to an amount equal to the balance then credited to
said Account, determined as of the last preceding Valuation Date (or
Interim Valuation Date), including any contributions made after such
Valuation Date (or Interim Valuation Date) up to the date of
withdrawal. Withdrawals from Rollover Contribution Accounts shall not
be permitted. A withdrawal under this subsection (h) shall not have any
effect on either his other Accounts in the Plan or his Vested
Percentage in such other Accounts.
(i) Distribution: Upon Termination of Employment, a
Participant's Employee Contribution Account and/or Rollover
Contribution Account shall be distributed in accordance with Article
VIII in the same manner and conditions as other Accounts.
(j) Forms: Elections to make contributions, withdraw
contributions, discontinue contributions or resume contributions shall
be in writing, signed by the Participant and on such form or forms as
the Administrator shall require.
(k) Consent and Annuity Requirements: Notwithstanding Sections
4.03(h) and (i), any withdrawal or distribution of an Account described
in this Section 4.03 shall:
(i) require the consent of the Participant if the
value of all of the Participant's Accounts in this Plan
exceeds $3,500; and
(ii) be subject to the requirements of Article X (but
only to the extent Article X is otherwise applicable).
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ARTICLE V
ALLOCATIONS AND LOANS
5.01 INDIVIDUAL ACCOUNTS
The Administrator shall create and maintain adequate records to
disclose the interest in the Trust of each Member and Beneficiary. Such records
shall be in the form of individual Accounts, and credits and charges shall be
made to such Accounts in the manner herein described. The maintenance of
individual Accounts is only for accounting purposes, and a segregation of the
assets of the Trust to each Account shall not be required.
5.02 VALUATION OF THE TRUST
The Administrator, or if it so directs, the Trustee, shall determine
the net worth of the assets of the Trust and of any separate fund therein as of
each Valuation Date and Interim Valuation Date. In determining such net worth,
the Administrator or Trustee shall evaluate the assets at their "fair market
value" as of such Valuation Date or Interim Valuation Date as described herein.
The "fair market value" of the Trust Fund assets shall be determined in
compliance with this Section and the principles of Section 3(26) of ERISA and
regulations issued pursuant thereto. Valuation shall be based upon information
reasonably available to the Administrator, including data from, but not limited
to, newspapers and financial publications of general circulation, statistical
and valuation services, records of securities exchanges, appraisals by qualified
persons, transactions and bona fide offers in assets of the type in question and
other information customarily used in the valuation of property for purposes of
Internal Revenue Code. The Administrator may elect to value any bank deposit,
certificate of deposit, bond, interest-bearing insurance contract, promissory
note or other evidence of indebtedness at its unpaid face value, with interest
accrued to the Valuation Date or Interim Valuation Date, if the obligation is
not in default. The value of any real property held in the Trust Fund,
determined as of the end of any Plan Year, shall be considered to remain
unchanged until the end of the following Plan Year. In determining the value of
the Plan's investment in a collective investment fund, separate account,
partnership or similar entity, the Administrator may (but need not) rely upon
the most recent prior valuation of units or interests in the fund, separate
account, partnership or entity made on or on behalf of the fund, separate
account, partnership
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or entity. With respect to securities for which there is a generally recognized
market, the published selling prices on or nearest to such Valuation Date or
Interim Valuation Date shall establish the fair market value of such security.
The fair market value so determined shall be conclusive for all purposes of the
Plan and Trust.
5.03 INVESTMENT OF ACCOUNTS
If elected in the Adoption Agreement, separate Investment Funds shall
be established. In addition, such election may limit the type(s) of Account (and
contributions attributable to such Account) which may be invested in such
Investment Funds.
(a) "Eligible Accounts": If permitted above, a Participant's
Account(s) (and related contributions) shall be invested in the
Investment Fund or Funds in accordance with the Participant's
investment election as made on the form or forms provided by the
Administrator.
(b) "Non-Eligible Accounts": If separate Investment Funds are
established, but an Account is not invested in any Investment Fund
(because either (i) a Participant does not wish to invest such Account
in any Investment Fund, or (ii) Investment Funds are limited to certain
type(s) of Account), the "non-eligible" Account (and related
contributions) shall be invested in the General Fund.
(c) Change of Investment Election: A Participant may change
his investment election with respect to future contributions under
subsection (a) as of the first day of the Plan Year and/or at such
other times as the Administrator shall provide under uniform rules and
procedures.
The Administrator, in its sole discretion, may also permit
Participants to change the investment of their entire Account(s). If
the Administrator permits such a change, it shall establish such rules
and procedures as it deems appropriate. For example, the Administrator
could require that the Participant's Account be invested (i) in the
same Investment Fund or Funds and in the same proportions as the future
contributions made on such Participant's behalf, or (ii) in any or all
of the Investment Funds in even percentages of 10%, 20% or 25%. The
effective date of such a change with respect to a Participant's entire
Account shall be as of such date as determined by the Administrator.
The Administrator may require Participants to provide written
notification of a change of investment up to 60 days in advance on such
form or forms and in accordance with such procedures as the
Administrator shall determine.
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(d) Temporary Investments: Pending the investment election of
monies in one of the Investment Funds, the Trustee or Investment
Manager may invest such monies in the Short-Term Income Fund, if any,
or a separate fund with similar type short-term investments.
5.04 ALLOCATION OF INVESTMENT INCOME
(a) Allocation on Valuation Date: As of each Valuation Date,
the Investment Income of each Investment Fund (or if none, of the
Trust) and each separate fund in the Trust, if any, since the preceding
Valuation Date, shall be determined by the Administrator and allocated
to the Account or Accounts of Members and Beneficiaries who had
balances in their Accounts on the Valuation Date.
Investment Income of each of the Investment Funds (or if none,
of the Trust) shall be allocated to each Account in the Investment Fund
on the Valuation Date according to the ratio that a person's "Adjusted
Account Balance" (as defined herein) bears to the total of the
"Adjusted Account Balances" of all persons as of such Valuation Date in
such Investment Fund.
For purposes of this Section, a person's "Adjusted Account
Balance" as of any Valuation Date shall be:
(i) The balance in the person's Account in the
Investment Fund (or if none, in the Trust) as of the
immediately preceding Valuation Date; plus
(ii) A portion of Deferrals, Matching Contributions,
voluntary contributions and Rollover Contributions made on the
person's behalf and not withdrawn since the immediately
preceding Valuation Date; plus
(iii) A portion of transfers from another Investment
Fund to the person's Account since the immediately preceding
Valuation Date; less
(iv) Distributions, withdrawals, and transfers to
another Investment Fund, from the person's Account since the
immediately preceding Valuation Date. For purposes of this
paragraph (iv), the Deferrals, Matching Contributions,
voluntary contributions and Rollover Contributions made on the
person's behalf and withdrawn since the preceding Valuation
Date shall not be treated as withdrawals.
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The Investment Income of any special separate fund or funds in
the Trust shall be allocated among the Accounts in such separate fund
or funds in the same manner as for the Investment Funds.
The Administrator may adopt any other non-discriminatory
method or methods, in addition to or in lieu of the foregoing, to
equitably allocate Investment Income to Accounts and/or to determine
Adjusted Account Balances for purposes of such allocations.
No Investment Income shall be allocated to Forfeiture
Accounts. Investment Income on funds held in Forfeiture Accounts shall
be allocated to Participants in a nondiscriminatory manner as
determined by the Administrator.
(b) Interim Valuation Date: The Administrator may, but shall
not be required to provide for an interim valuation of the Accounts in
the Trust (or any separate fund therein) for the purpose of making
distributions to Members or providing for the transfer between
Investment Funds since the preceding Valuation Date or Interim
Valuation Date. The Administrator shall determine the percentage
increase or decrease in the net worth of the assets in the Trust
(and/or separate fund in the Trust) or in each Investment Fund from the
preceding Valuation Date to the Interim Valuation Date after excluding
all distributions made since the preceding Valuation Date or Interim
Valuation Date. In determining such percentage increase or decrease in
the net worth of such assets, all Investment Income of the Trust
(and/or separate fund therein) or of each Investment Fund during the
period between the preceding Valuation Date and Interim Valuation Date
shall be included and determined in the same manner as provided for in
subsection (a). The revalued Accounts from which a distribution or
transfer shall be made shall be multiplied by the appropriate
percentages so determined in order to reflect such increase or
decrease.
The percentages once so determined shall be applied to all
Accounts from which distributions or transfers are made until the next
Valuation Date or Interim Valuation Date, whichever is earlier. Any
increase or decrease in the net worth of the assets so distributed to
or retained from such Accounts shall increase or decrease the total
Investment Income which is to be allocated on the next following
Valuation Date or Interim Valuation Date.
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5.05 ELIGIBILITY FOR ALLOCATION OF PROFIT SHARING CONTRIBUTION
As of the end of each Plan Year, the Profit Sharing Contributions for
the Plan Year made pursuant to Section 4.01 shall be allocated among those
Participants and those Inactive Participants who became Inactive Participants
during such Plan Year and who meet the requirements specified in the Adoption
Agreement. Such allocation shall be made in accordance with Section 5.06.
5.06 ALLOCATION OF PROFIT SHARING CONTRIBUTION
The Profit Sharing Contributions shall be allocated to eligible
Participants and Inactive Participants in accordance with either subsection (a)
or (b) below, whichever is elected in the Adoption Agreement.
(a) Integrated Allocation Method
(i) Excess Allocation: The Profit Sharing
Contribution shall first be allocated to the Employer
Contribution Accounts of eligible Participants and Inactive
Participants who earned Excess Compensation during such Plan
Year in accordance with either paragraph (1) or (2) below.
Paragraph (1) shall be applicable for Plan Years beginning
prior to 1989, and paragraph (2) shall be applicable for Plan
Years beginning in 1989 and later.
(1) For Plan Years which begin prior to
1989, the Employer Contribution Account of each
eligible Participant and Inactive Participant shall
receive an allocation equal to the Integration
Percentage multiplied by the individual's Excess
Compensation, unless some other smaller percentage is
chosen by the Company with respect to such Plan Year
(this includes the situation where the amount of the
Employers' contribution is less than the Integration
Percentage multiplied by the total Excess
Compensation of all eligible individuals).
(2) For Plan Years beginning in and after
1989, the Employer Contribution Account of each
eligible Participant and Inactive Participant shall
receive an allocation equal to a percentage
multiplied by the individual's Excess Compensation.
The percentage referred to in the preceding sentence
is that percentage which is equivalent to the ratio
determined by dividing the Employers' contribution by
the sum of (I) the total Compensation of all such
eligible individuals and (II) the total Excess
Compensation of all such eligible
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individuals (unless the Company chooses a smaller
percentage for such Plan Year). However, the
percentage may not exceed the Integration Percentage
for the Plan Year.
(ii) Remaining Allocation: The remaining portion, if
any, of the Profit Sharing Contribution for the Plan Year
which is in excess of the amounts allocated under paragraph
(i) above shall be allocated to the Employer Contribution
Accounts of all eligible Participants and Inactive
Participants according to the ratio that each Participant's or
Inactive Participant's Compensation for the Plan Year bears to
the total Compensation of all eligible Participants and
Inactive Participants for the Plan Year.
(b) Non-Integrated Allocation Method: The Profit Sharing
Contribution shall be allocated to the Employer Contribution Accounts
of all eligible Participants and Inactive Participants according to the
ratio that each Participant's or Inactive Participant's Compensation
for the Plan Year bears to the total Compensation of all eligible
Participants and Inactive Participants for the Plan Year.
(c) Top-Heavy Allocation: Notwithstanding subsections (a) or
(b) above, if this Plan is "Top-Heavy" (as defined in Article XI) for
the Plan Year, the Profit Sharing Contribution shall first be allocated
to satisfy the minimum allocation required under Section 11.05(b)
(unless such requirement is satisfied by another defined contribution
plan). The remaining Profit Sharing Contribution, if any, shall be
allocated in accordance with the terms of subsections (a) or (b) (and
treating the "Top-Heavy" allocation under this subsection (c) as an
allocation under subsections (a) or (b)).
5.07 ALLOCATION OF FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION
ACCOUNTS
This Section 5.07 discusses the allocation of Forfeitures attributable
only to Employer Contribution Accounts. For a discussion of Forfeitures
attributable to the Matching Contribution Accounts and the Joining Bonus
Accounts, see Sections 7.07 and 7.13.
For Plan Years beginning prior to January 1, 1989, the allocation of
Forfeitures attributable to Employer Contribution Accounts shall be determined
under the terms of the Prior Plan. For Plan Years beginning after December 31,
1988, Forfeitures which have become available for allocation during a Plan Year
in accordance with Section 4.02 (other than Forfeitures which have been deemed
Qualified Nonelective Contributions pursuant to Sections
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6.07, 7.11 or 7.14) shall be added to Profit Sharing Contributions for such Plan
Year, and allocated in accordance with Section 5.06.
5.08 POSSIBLE REDUCTION OF ALLOCATION TO KEY HIGHLY COMPENSATED
EMPLOYEES AND FAMILY MEMBERS
Notwithstanding Sections 5.06 and 5.07, the allocations of Profit
Sharing Contributions and Forfeitures to the Employer Contribution Accounts of a
Key Highly Compensated Employee and his Family Members shall be reduced to
comply with Sections 401(a)(17) and 414(q)(6) of the Code, but only to the
extent required by applicable regulations. Any "excess" resulting from such
reduction shall be reallocated to all Participants and Inactive Participants
(including Key Highly Compensated Employees and Family Members) under Sections
5.06 and 5.07. If after such reallocation there still remains an "excess" on
account of this Section 5.08, the additional "excess" shall again be
reallocated. This process may be repeated as many times as necessary until such
"excess" is exhausted.
5.09 MAXIMUM ALLOCATION
The contribution on behalf of or by Participants shall be limited in
accordance with Code Section 415 and regulations thereunder, which are
incorporated by reference. This Section explains the application of Code Section
415 and in the event of any omission or conflicting statements, Code Section 415
and regulations thereunder shall govern.
Notwithstanding anything contained in this Plan to the contrary, the
total Additions made to the Account of a Participant for any Limitation Year
shall not exceed the lesser of (a) the Maximum Addition or (b) 25% of the
Participant's Earnings for the Limitation Year. (Certain Additions attributable
to Code Sections 401(h), 415(l) and 419A(d) (relating to certain medical
benefits) are not subject to the 25% limit in the preceding sentence.)
To comply with Section 415(f)(1)(B) of the Code (which provides that
all defined contribution plans [including voluntary employee contribution
accounts in a defined benefit plan] of the Employer, whether or not terminated,
shall be considered as one defined contribution plan), Additions shall be
limited as described in the Adoption Agreement.
If Additions shall exceed the above limitation because of circumstances
described in regulation 1.415-6(b)(6), any Deferrals and/or voluntary
contributions (under this Plan or any other qualified plan of the Employer) made
by the Participant for the Limitation Year which caused the excess shall be paid
to the Participant. If excess Additions still exist, the method described in
regulation 1.415-6(b)(6)(ii) shall be used; that is, such excess Additions shall
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generally be held in a suspense account (to which no Investment Income shall be
credited) and be used to reduce future Employer contributions for the affected
Participant.
Notwithstanding the foregoing, the otherwise permissible Additions for
any Participant under this Plan may be reduced to the extent necessary to
prevent disqualification of the Plan under Code Section 415(e), which imposes
additional limitations on the benefits for Participants who also participate in
one or more tax-qualified defined benefit pension plan of the Employer. The
Administrator shall advise affected Participants of any additional limitation of
their Additions required by the preceding sentence.
The Administrator shall comply with the provisions of the preceding
paragraph as specified in the Adoption Agreement and to the extent necessary so
that the sum of the Defined Contribution Fraction and the Defined Benefit
Fraction (both defined below) shall not exceed one (1.0):
(a) Defined Contribution Fraction
(i) Numerator: The numerator of the Defined
Contribution Fraction is the sum of the Annual Additions for
all Limitation Years, where "Annual Addition" is defined as
the total of the following amounts allocated to a
Participant's accounts under all defined contribution plans
maintained by the Employer (except as otherwise provided under
Section 415(c)(6) of the Code) with respect to each Limitation
Year:
(1) Employer contributions (including
"salary deferrals" and forfeitures, if any),
(2) voluntary contributions, and
(3) any amounts attributable to Sections
401(h), 415(l) and 419A(d) (relating to certain
medical benefits) of the Code, but only to the extent
provided by such sections of the Code.
Notwithstanding the foregoing, Annual Additions shall
not include amounts which are deemed not to be Annual
Additions pursuant to regulations 1.415-6(b)(l)(i) and
1.415-6(b)(6). In addition, for Limitation Years beginning
before January 1, 1987, not all voluntary contributions are
Annual Additions. Instead, only the lesser of (i) one-half of
the Participant's voluntary contributions, or (ii) the amount
of the Participant's voluntary contributions in excess of 6%
of his Earnings for such Limitation Year, shall be considered
Annual Additions.
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In addition, the numerator shall take into account
any reductions allowed as a result of changes caused by TEFRA
(the pre-TEFRA "1.4 rule") and Top-Heavy restrictions (the
pre-Top-Heavy TEFRA "1.0 rule"). [See paragraph (iii) below
for an additional numerator reduction.]
(ii) Denominator: The denominator of the Defined
Contribution Fraction is either (1) or (2) as follows:
(1) The sum of the "Adjusted Maximum Annual
Addition" for each Limitation Year.
(2) The sum of (A) and (B) as follows:
(A) The sum of the "Maximum Annual Addition" for
each Limitation Year ending before January 1, 1983,
multiplied by the "Transition Fraction."
(B) The sum of the "Adjusted Maximum Annual
Addition" for each Limitation Year ending after
December 31, 1982.
The Plan Administrator shall select only one of the
above denominators to be used under this Section 5.09, and
such denominator shall be applied to each Participant.
However, the denominator described in clause (ii)(2) may only
be elected if the affected Plan was in existence on July 1,
1982.
(iii) Numerator Reduction: If this Plan and all other
plans required to be aggregated under Section 415(f) of the
Code satisfied Section 415 of the Code as of the end of the
Limitation Year beginning before January 1, 1987 (that is, the
pre-TRA86 "1.0 rule"), the numerator of the Defined
Contribution Fraction shall be reduced (but not below "zero")
to the extent necessary so that the sum of the Defined
Contribution Fraction and the Defined Benefit Fraction (both
computed in accordance with Sections 415 and 416(h) of the
Code, as amended by TRA86) does not exceed 1.0 for the
Limitation Year beginning before January 1, 1987. In
determining the amount of the reduction, the denominator of
the Defined Contribution Fraction shall take into account the
Transition Fraction method (as modified, if applicable, by
Section 416(h) of the Code), if elected, under Section
415(e)(6) of the Code.
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(iv) Certain Terms: For purposes of this subsection
(a):
(1) "Maximum Annual Addition" shall mean the
lesser of the dollar amount described in Section
415(c)(l)(A) of the Code for the applicable
Limitation Year, or 25% of the Participant's Earnings
for the applicable Limitation Year.
(2) "Adjusted Maximum Annual Addition" shall
mean the lesser of 1.25 times the dollar amount
described in Section 415(c)(l)(A) of the Code for the
applicable Limitation Year, or 1.4 times 25% of the
Participant's Earnings for the applicable Limitation
Year.
(3) "Transition Fraction" shall mean the
fraction,
(A) the numerator of which is the
lesser of
(I) $51,875, or
(II) 1.4 times 25% of the
Participant's Earnings for the
Limitation Year ending in 1981, and
(B) the denominator of which is the
lesser of
(I) $41,500, or
(II) 25% of the Participant's
Earnings for the Limitation Year
ending in 1981.
(4) With respect to a Limitation Year of
less than 12 months because of an amendment changing
the Limitation Year to a different 12-consecutive
month period, the "dollar amount described in Section
415(c)(1)(A) of the Code" used in subparagraphs (1)
and (2) above shall be prorated to reflect the number
of months in such short Limitation Year.
(b) Defined Benefit Fraction: The numerator of the
Defined Benefit Fraction is the "projected annual benefit" (as
defined below) of the Participant under all defined benefit
plans required to be aggregated under Section 415 of the Code,
determined as of the
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close of the Limitation Year. The denominator of the Defined Benefit
Fraction is the lesser of 1.25 times 12 times the Maximum Monthly
Pension or 1.4 times 12 times the Participant's monthly average
Earnings paid by the Employers and each Affiliated Company during the
three consecutive Limitation Years when such Earnings were the highest.
A Participant's "projected annual benefit" is equal to the
projected benefit under the applicable Plan (taking into account the
Participant's accrued pensions determined as of (1) the end of the
Limitation Year which began prior to 1983 [the pre-TEFRA grandfather
accrued pension] and (2) the end of the Limitation Year which began
prior to 1987 [the pre-TRA86 grandfather accrued pension]), based upon
the following assumptions:
(i) The Participant will continue in employment until
reaching normal retirement age.
(ii) The Participant's compensation for the
Limitation Year under consideration will remain the same until
reaching normal retirement age.
(iii) All other relevant factors will remain constant
for all future Limitation Years.
For purposes of this subsection (b),
(i) "Maximum Monthly Pension" shall mean one-twelfth
of the greater of (1) the dollar amount described in Section
415(b)(l)(A) of the Code for the applicable Limitation Year,
and (2) the Participant's pre-TRA86 grandfather accrued
pension (after taking into account his pre-TEFRA grandfather
accrued pension).
(ii) The denominator of the Defined Benefit Fraction
shall be further adjusted as required under Section 415(b) of
the Code to reflect the form of the benefit, the Participant's
social security retirement age, the date the benefit commences
and length of service of less than 10 years.
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5.10 LOANS TO PARTICIPANTS WHO ARE PARTIES-IN-INTEREST
If permitted in the Adoption Agreement, the Administrator may, in its sole
discretion, authorize the Trustee to loan money to a Participant or an Inactive
Participant who is a "party-in-interest" (as defined by Section 3(14) of ERISA)
from the Trust. The general terms and conditions of loans (which are intended to
comply with Section 2550.408b-1 of the Department of Labor Regulations) shall be
determined pursuant to the provisions of this Section 5.10. Loans under this
Section 5.10 shall (i) be made available to all eligible individuals on a
reasonably equivalent basis, and (ii) not be made available to Highly
Compensated Employees in an amount greater than the amount made available to
other Employees. The Administrator shall adopt additional rules and regulations
necessary to carry out the provisions of this Section 5.10. Such rules shall be
uniformly applicable to all eligible individuals, and the determination of
whether to approve an application for a loan shall be on a like and
nondiscriminatory basis.
(a) Administration of Loan Program: The Administrator shall
administer the provisions of this Section 5.10, unless the Administrator
delegates such responsibility to another person pursuant to Section 13.04.
(b) Purpose of Loan: The Administrator may choose to limit loans to
a specific purpose(s).
(c) Application: An application for a loan by a Participant shall be
made in writing to the Administrator on such form or forms as the
Administrator may require. The Administrator may also require (if
applicable) the Participant to produce such documents and other evidence
of a financial need and the amount of the financial need. If the loan is
secured by any part of the Participant's Account, the loan application
must also include the Participant's consent to a possible reduction of his
Benefit to satisfy the repayment of such loan. If the Participant is
married at the time of the loan, the application must also include the
spouse's consent to and acknowledgement of the effect of such possible
reduction. The consents required under this paragraph shall be obtained no
earlier than 90 days before the date such loan is made, and the spouse's
consent shall be witnessed by a notary public (or, if permitted by the
Administrator, by a representative of the Administrator). If the
Participant is unmarried at the time of the loan or if the Participant
later remarries, the consent of the new spouse shall not be required.
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(d) Amount of Loan: The Administrator shall require that the total
balance of all loans outstanding for a Participant shall not exceed the
limits described in Section 2550.408b-1 of the Department of Labor
Regulations. In addition, the Administrator may refuse to grant any loan
to the extent such loan is treated as a taxable distribution under Section
72(p) of the Code.
(e) Interest: Each loan shall bear a reasonable rate of interest to
be fixed by the Administrator and/or the Trustee. The Administrator and
Trustee shall not discriminate among Participants in the matter of
interest rates; but loans granted at different times or for different
durations may bear different interest rates if the difference in rates is
justified by different general economic conditions.
(f) Repayment of Loan: Repayment shall normally be by payroll
deduction on an installment basis (but not less frequently than
quarterly), with the amortization of the principal and interest over the
period of the loan. A different arrangement for repayment may be made by
mutual agreement between the Administrator and the Participant, provided
that such arrangement is consistent with bank practices for similar type
loans. The period of repayment for any loan shall be arrived at by mutual
agreement between the Administrator and the Participant, but shall
normally not extend beyond five years for loans other than for the
purchase of the principal residence of the Participant. Refinancing of the
loan shall not be made available by the Administrator. That is, in the
event interest rates have dropped due to a change in economic conditions,
a new loan at the current interest rate may not be negotiated to replace
the prior loan(s). If a Participant's employment terminates or the Plan
terminates, the loan shall become immediately due. No distribution of
Benefits shall be made to any Participant, Inactive Participant or to a
Beneficiary of any such Participant or Inactive Participant unless and
until all unpaid loans, including interest thereon, have been liquidated.
(g) Fees/Expenses:The Administrator may charge reasonable set-up and
periodic service fees and other related expenses directly to the
Participant.
(h) Security: Loans shall be evidenced by the Participant's
promissory note and shall be secured by the Participant's Account or any
other form of security acceptable to the Administrator. If on any date the
value of such security is less than the unpaid principal amount of any
loan to the Participant outstanding on such date, the Administrator shall
require such Participant to either tender additional security
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acceptable to the Administrator equal in value to the difference between
the value of such Participant's security and the unpaid principal then
outstanding, or accelerate principal repayment to the extent necessary to
make the unpaid principal amount of such loan equal to the value of the
Participant's security.
(i) Loan Default: Foreclosure on any loan and attachment of the
security shall generally not occur until the Participant's Benefit becomes
payable in accordance with Article VIII.
(j) Hardship Withdrawals of Deferrals: The Administrator may
establish special rules and limits for loans in situations involving a
concurrent hardship withdrawal under Section 6.12(d).
(k) Additional Limits: The Administrator may further limit the
amount loaned to any Participant in order to maintain a reserve chargeable
against the Participant's Benefit for income taxes which would have to be
withheld by the Trustee if the loan becomes a deemed distribution to the
Participant. Any such taxes required to be withheld by the Trustee
(whether or not such a reserve has been created) shall be charged to and
reduce the Participant's Benefit to the extent possible and any excess
shall be treated as an administrative expense of the Plan which shall be
reimbursed by the Participant in question.
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ARTICLE VI
DEFERRALS AND HARDSHIP WITHDRAWALS
6.01 GENERAL
This Article VI is intended to provide guidelines regarding special
qualification, nondiscrimination and distribution rules under Section 401(k) and
other related Sections of the Code. The Administrator shall adopt additional
rules necessary (1) to carry out this Article VI (including, if applicable,
special rules unique to Partner-Employees), and (2) to implement special,
transitional and operational rules permitted under IRS regulations (for example,
the "restructuring" rules of regulation 1.401(k)-1(h)(3)(iii)).
Regulations under Sections 401(a)(4) and 410(b) consider the portion of
this Plan attributable to Deferrals to be a separate plan apart from the
portions of the Plan attributable to Profit Sharing Contributions or Matching
Contributions. Accordingly, if the provisions of this Article conflict with any
other provisions of this Plan, the provision that shall govern depends upon
whether such provision applies to Deferrals, Profit Sharing Contributions or
Matching Contributions.
6.02 DEFINITIONS
For purposes of this Article VI, the following words or phrases shall have
the following meanings:
(a) "Actual Deferral Percentage (ADP)" shall mean the percentage
obtained by dividing the Participant's Deferrals for the Plan Year by the
Participant's ADP Compensation for the Plan Year. However, see Sections
6.06(a), (b) and (c) and 7.09(a) regarding whether (i) additional amounts
are added to Deferrals to increase the ADP, or (ii) certain Deferrals are
excluded to lower the ADP. In addition, see subsection (b) below and
Sections 6.06(d) and (e) regarding situations where the ADP of a Highly
Compensated Participant is decreased to satisfy the ADP Test in Section
6.05. If a Participant's ADP Compensation for the Plan Year is "zero", no
ADP shall be computed for such Participant (see Section 6.05(b)(iv)).
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(b) "Adjusted ADP" shall mean, in the case of a Plan which fails to
satisfy the ADP Test in Section 6.05, the eventual ADP calculated under
the following leveling method, under which the ADP of the Highly
Compensated Participant with the highest ADP is reduced to the extent
required to:
(i) enable the Plan to satisfy the ADP Test, or
(ii) cause such Highly Compensated Participant's ADP to equal
the ADP of the Highly Compensated Participant with the next highest
ADP.
This process must be repeated until the Plan satisfies the ADP Test.
In addition, the term Adjusted ADP shall be substituted for the term ADP
wherever such term is used in the Plan.
(c) "ADP Compensation" shall mean the Participant's Compensation for
the Plan Year, unless the definition of Compensation fails to satisfy the
requirements of Section 414(s) of the Code ["Condition A"].
(i) If Condition A exists, then ADP Compensation shall instead
mean the Participant's Compensation for the Plan Year, but excluding
Deferrals made for the Plan Year.
(ii) If Condition A continues to exist after the definition of
ADP Compensation has been revised in accordance with paragraph (i)
above, then ADP Compensation shall instead mean the Participant's
Compensation for the entire Plan Year, including Compensation earned
prior to his Entry Date.
(iii) If Condition A continues to exist after the definition
of ADP Compensation has been revised in accordance with paragraph
(ii) above, then ADP Compensation shall instead mean the
Participant's Compensation for the entire Plan Year, including
Compensation earned prior to his Entry Date, but excluding Deferrals
made for the Plan Year.
(iv) If Condition A continues to exist after the definition of
ADP Compensation has been revised in accordance with paragraph (iii)
above, then the Plan must be amended to provide for a definition of
ADP Compensation that satisfies the requirements of Section 414(s)
of the Code.
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For Plan Years beginning in 1989 and later, ADP Compensation shall
not exceed $200,000 (or such higher amount in accordance with Sections
401(a)(17) and 415(d) of the Code). If a Plan Year is less than 12 months,
the $200,000 (or such higher amount) shall be prorated accordingly.
(d) "Discriminatory Deferrals" shall mean those Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions which
caused the ADP Test in Section 6.05 to be exceeded. The amount of
Discriminatory Deferrals attributable to any Highly Compensated
Participant is equal to such Participant's Deferrals (or other amounts
treated as Deferrals) minus the product of (i) such Participant's Adjusted
ADP, times (ii) such Participant's ADP Compensation.
(e) "Excess Deferrals" shall mean, for any calendar year, Deferrals
made by a Participant in excess of the greater of (i) $7,000 or (ii) the
dollar limitation in effect under Section 402(g)(1) of the Code for such
calendar year (see Section 6.03(c)).
6.03 ELECTION TO MAKE DEFERRALS
(a) Election Forms: The Administrator shall provide each Participant
with an election form authorizing the deferral of his Compensation.
Compensation which is "currently available" (as described in regulation
1.401(k)-1(a)(3)(iii)) may not be deferred. The timing/frequency, amount
and any other limitations regarding the Deferrals shall be governed by the
terms specified in the Adoption Agreement.
If elected in the Adoption Agreement, the Administrator shall define
the term "Make-Up" Deferrals and establish rules and procedures regarding
how such Deferrals may be made. The general intent is to allow
Participants to make Deferrals in excess of "current" limits, as long as
the "cumulative" limits for the Plan Year are not exceeded. An example of
the preceding is a plan which has a maximum individual deferral rate of
10% of compensation, but which allows a participant who defers nothing in
the first half of the plan year to defer 20% of compensation for the
remainder of the plan year.
In addition to (or in lieu of) the terms specified in the Adoption
Agreement, the Administrator may establish such rules and procedures as
are necessary to implement this subsection (a). The election made under
this subsection (a) will remain in effect until modified in accordance
with subsection (b) below.
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(b) Modification of Deferral Election: The Administrator shall
establish rules and procedures regarding when (at least once each Plan
Year) and how a Participant may increase, decrease, suspend or resume
Deferrals (or begin Deferrals, in the case of a Participant who does not
elect to make Deferrals when first eligible).
(c) Maximum Amount of Deferrals: Notwithstanding subsection (a)
above, no Participant shall be permitted to make Deferrals under this Plan
(including similar amounts under other plan(s) maintained by the
Employer), for any calendar year, in excess of the greater of $7,000 or
the dollar limitation in effect under Section 402(g)(1) of the Code for
such calendar year. The foregoing limit shall not apply to certain
"transitional" Deferrals (i) of certain Partner-Employees (see Section
1105(c)(4) of TRA86) or (ii) attributable to services performed during
1986 (see Section 1105(c)(5) of TRA86).
In addition, no Participant shall be permitted to make Deferrals to
the extent total Additions allocated to the Participant would exceed the
limits of Section 5.09 (regarding Section 415 of the Code). However, those
Deferrals distributed pursuant to the fourth paragraph of Section 5.09 are
not treated as Additions.
(d) Automatic Cessation of Deferrals: Notwithstanding subsections
(a) and (b) above, the Administrator may suspend the Deferrals of a Highly
Compensated Participant in order to meet the ADP Test in Section 6.05.
This suspension can be based upon the results of the ADP Test on an
"actual" or "projected" basis, in accordance with rules and procedures
established by the Administrator.
In addition, the Administrator may suspend the Deferrals of any
Participant to comply with subsection (c) above.
(e) Allocation of Deferrals: Deferrals shall be credited to the
Participant's Deferred Income Account, which shall be 100% vested at all
times, and shall normally be paid by the Employer to the Trustee within 30
days following the month for which the amount was withheld (but no later
than the end of the 12-month period following the Plan Year to which such
Deferrals relate).
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6.04 DISTRIBUTION OF EXCESS DEFERRALS
(a) General: If a Participant has made Excess Deferrals for the calendar
year, whether because of oversight, because the Participant is covered by more
than one qualified CODA of the Employer or because the Participant is covered by
a qualified CODA of another unrelated employer, such Excess Deferrals (including
gains/losses) shall be returned to the Participant.
(b) Gains and Losses: The gains and losses (collectively referred to as
"income") to be distributed under subsection (a) above shall be the Investment
Income for the calendar year attributable to Excess Deferrals, as determined in
accordance with methods described in Section 5.04. The Administrator may also
elect to distribute income for the period between the end of the applicable
calendar year and the date of distribution (the "gap period"). Such election
shall be applied consistently to all Excess Deferrals attributable to a
particular calendar year. However, the Administrator may change such election
from year to year.
Notwithstanding the foregoing, for periods before the issuance of final
regulations under Section 402(g) of the Code on August 15, 1991, the
determination of distributable income may be determined under proposed
regulation 1.402(g)-1(d)(5), which generally provided for specific methods of
determining income for both the calendar year and the gap period.
(c) Timing: A distribution under this Section 6.04 shall generally be made
by the April 15th of the following calendar year, subject to the following
rules:
(i) If a Participant's Deferrals under this Plan for a calendar year
exceeds the $7,000 (or higher) limitation described in Section 6.03(c),
the Administrator shall distribute such Excess Deferrals (and allocable
income) without any special instructions from the Participant [i.e., the
Participant shall be deemed to have notified the Administrator that he has
made Excess Deferrals under the Plan].
(ii) If any of a Participant's Deferrals under this Plan is an
Excess Deferral solely because the Participant is covered under more than
one qualified CODA (whether of this Employer or another unrelated
employer), it shall be the responsibility of the Participant to inform the
Administrator in writing by the March 1st preceding the above April 15th
date, of the amount of Excess Deferrals made to this Plan. The
Administrator shall not be required to investigate the accuracy of the
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information provided by the Participant; and if such information is
provided after March 1st, the Administrator shall not guarantee that
distribution of the Excess Deferrals (including allocable income) will
occur by April 15th.
(iii) If Excess Deferrals are distributed to the Participant in the
same calendar year as the calendar year in which such Excess Deferrals
arose, the allocable income from the beginning of the calendar year to the
date of distribution shall be determined in a manner similar to the method
described in subsection (b)(ii) above.
(d) Consent Not Needed: Distributions of Excess Deferrals shall not be
subject to the requirements of Section 8.02(b)(iv) and Article X (regarding the
notice and consent rules of Sections 411(a)(11) and 417 of the Code).
(e) Treatment Under Code Section 415: Deferrals which become Excess
Deferrals shall continue to be considered Additions, unless such Excess
Deferrals are distributed by April 15th of the following calendar year in
accordance with subsection (c) above.
6.05 SPECIAL NONDISCRIMINATION TESTS
Deferrals of Highly Compensated Participants shall be limited in
accordance with this Section 6.05, which is intended to comply with the
nondiscrimination tests described in Section 401(k)(3) of the Code and related
regulations.
(a) Average Deferral Percentage Test: For any Plan Year, the Average
ADP for the group of Highly Compensated Participants shall not exceed the
Average ADP for the group of Non-Highly Compensated Participants as
follows:
<TABLE>
<CAPTION>
IF THE AVERAGE ADP FOR THE THEN THE AVERAGE ADP FOR THE
GROUP OF NON-HIGHLY COMPENSATED GROUP OF HIGHLY COMPENSATED
PARTICIPANTS FOR THE PARTICIPANTS FOR THE
PLAN YEAR (DENOTED "R") IS: PLAN YEAR SHALL NOT EXCEED:
--------------------------- ---------------------------
<S> <C>
2% or less 2.0 times "R"
2% to 8% 2.0% plus "R"
8% or more 1.25 times "R"
</TABLE>
The nondiscrimination limits of this Section 6.05(a) shall be
referred to as the "ADP Test."
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(b) Special Rules: For purposes of applying the ADP Test of
subsection (a) above, the following rules are applicable:
(i) Excess Deferrals: Excess Deferrals shall count as
Deferrals for purposes of determining the ADP of a Highly
Compensated Participant. However, Excess Deferrals shall not count
as Deferrals for purposes of determining the ADP of a Non-Highly
Compensated Participant.
(ii) Required Aggregation: If this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Sections of the Code
only if aggregated with this Plan, then all the cash or deferred
arrangements included in such other plans shall be aggregated with
the cash or deferred arrangement included in this Plan.
Notwithstanding the preceding paragraph,
(1) for Plan Years beginning after December 31, 1988, an
"ESOP" plan may not be aggregated with this Plan.
(2) for Plan Years beginning after December 31, 1989, a
plan whose plan year differs from the Plan Year of this Plan
may not be aggregated with this Plan.
(iii) Aggregation of Deferrals of Highly Compensated
Employees: If a Highly Compensated Employee is also a participant
under another plan of the Employer which includes a cash or deferred
arrangement, the ADP of such Highly Compensated Employee under this
Plan shall take into account such other cash or deferred
arrangement. For Plan Years beginning after December 31, 1988, if
the plan year of such other plan differs from the Plan Year of this
Plan, the ADP of such Highly Compensated Employee for such Plan Year
under this Plan shall be determined by including only amounts
attributable to plan years which end in the same calendar year as
this Plan Year.
This paragraph (iii) shall not be effective if the affected
plans are mandatorily disaggregated under regulation
1.401(k)-1(g)(11)(iii).
(iv) Deferrals Refunded Under Code Section 415: Deferrals
which are distributed pursuant to the fourth paragraph of Section
5.09 shall be disregarded for purposes of the ADP Test.
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(v) Participants Taken Into Account: Any Employee who was a
Participant at any time during the Plan Year shall be taken into
account, even if such Participant has experienced a Termination of
Employment prior to the last day of such Plan Year. However, a
Participant whose ADP Compensation for the Plan Year is "zero" shall
not be taken into account.
(vi) Rounding of Percentages: For Plan Years beginning after
December 31, 1988, the ADP and the Average ADP shall be rounded to
the nearest one-hundredth of 1%.
(vii) Family Members: The ADP of a Family Member shall not be
separately calculated. Instead, the ADP of the Key Highly
Compensated Employee shall be computed by combining his Deferrals
and ADP Compensation with those of his Family Member(s).
Notwithstanding the $200,000 limit on ADP Compensation in Section
6.02, for Plan Years beginning after December 31, 1988, the ADP
Compensation of such "aggregated" Key Highly Compensated Employee
shall be the sum of (1) plus (2), as follows:
(1) the sum of the ADP Compensation of each of the Key
Highly Compensated Employee, his spouse, and lineal
descendants who have not attained age 19 before the close of
such Plan Year; and such sum shall be limited to $200,000 (or
such larger amount described in Section 6.02), plus
(2) the sum of the ADP Compensation of each other Family
Member not described in (1), where each individual ADP
Compensation shall be limited to $200,000 (or such larger
amount described in Section 6.02).
6.06 FAILURE TO PASS THE ADP TEST
If the ADP Test is not satisfied, the Employer and/or Administrator may
take one or more of the following steps:
(a) treat Forfeitures attributable to Employer Contribution Accounts
as Qualified Nonelective Contributions for Plan Years beginning after
December 31, 1990 (see Section 6.07)
(b) include Qualified Nonelective Contributions in the ADP (see
Section 6.08)
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(c) include Qualified Matching Contributions in the ADP (see Section
6.09)
(d) refund Deferrals which exceeded the limits (see Section 6.10)
(e) recharacterize certain Deferrals as voluntary contributions (see
Section 6.11).
6.07 FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION ACCOUNTS
For Plan Years beginning on or after January 1, 1991, if the ADP Test is
not satisfied, Forfeiture Accounts which have become available for allocation
pursuant to Section 4.02 shall not be allocated in accordance with Section 5.07.
Instead, enough Forfeitures as necessary shall be treated as Qualified
Nonelective Contributions pursuant to Section 6.08 to satisfy the ADP Test. That
is, for purposes of the Plan, such Forfeitures shall not be subject to the
provisions of Section 5.07, but will be subject to the provisions of Section
6.08.
Any Forfeitures not deemed to be Qualified Nonelective Contributions
pursuant to the preceding paragraph shall be allocated in accordance with
Section 5.07, unless such Forfeitures are deemed to be Qualified Nonelective
Contributions pursuant to Sections 7.11 or 7.14, to satisfy the ACP Test or the
Multiple Use Test, respectively.
6.08 QUALIFIED NONELECTIVE CONTRIBUTIONS
If the ADP Test is not satisfied, the Employer may elect to make Qualified
Nonelective Contributions for the Plan Year. Such contributions shall be
allocated to Non-Highly Compensated Participants (including Non-Highly
Compensated Participants who have a Termination of Employment prior to the end
of the Plan Year) in the following manner:
(a) The initial allocation shall be made to the Non-Highly
Compensated Participant with the lowest ADP Compensation for the Plan
Year. The amount of such allocation shall be the lesser of (i) total
Qualified Nonelective Contributions made for the Plan Year under this
Section 6.08, or (ii) the maximum amount permitted under Section 5.09
(regarding Section 415 of the Code). [Note: Instead of the term
"Compensation," this Section 6.08 uses the term "ADP Compensation" and
Section 5.09 uses the term "Earnings." Since these three terms generally
have different meanings, care should be exercised when carrying out this
Section 6.08.]
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(b) If there still remain Qualified Nonelective Contributions after
step (a) above, the second allocation shall be made to the Non-Highly
Compensated Participant with the next lowest ADP Compensation for the Plan
Year. Similarly, the amount of such allocation shall be the lesser of (i)
remaining Qualified Nonelective Contributions, or (ii) the maximum amount
permitted under Section 5.09.
(c) If there still remain Qualified Nonelective Contributions after
step (b) above, step (b) shall then be applied to the Non-Highly
Compensated Participant with the next lowest ADP Compensation for the Plan
Year. In addition, step (b) shall be repeated as many times as necessary
until Qualified Nonelective Contributions are exhausted.
Qualified Nonelective Contributions under this Section 6.08 shall
(a) be allocated to the Qualified Nonelective Contribution Account
(or a "substitute" Account described in Section 2.84),
(b) be made within 12 months after the end of the applicable Plan
Year, and
(c) be treated as Deferrals for purposes of Sections 6.02(a) and
6.05.
The Qualified Nonelective Contribution Account (or other Account to which
Qualified Nonelective Contributions are allocated) shall
(a) be fully vested at all times, and
(b) be subject to the withdrawal and distribution restrictions in
Section 6.12.
Even if the Employer does not make Qualified Nonelective Contributions to
this Plan, the Administrator may nevertheless elect to treat other Employer
contributions to this Plan or any other defined contribution plan of the
Employer as Qualified Nonelective Contributions for this Plan. The preceding
sentence shall only apply to Employer contributions if the "account" to which
such contributions are allocated
(a) meets the requirements of the preceding paragraph applicable to
the Qualified Nonelective Contribution Account, and
(b) meets other nondiscrimination requirements described in
regulations under Section 401(k) of the Code.
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6.09 QUALIFIED MATCHING CONTRIBUTIONS
If the ADP Test is not satisfied (or if the Administrator wishes to avoid
[completely or partially] the nondiscrimination requirements of Section 7.08
[the ACP Test]), the Administrator may elect to treat Qualified Matching
Contributions as Deferrals for purposes of Sections 6.02(a) and 6.05.
Qualified Matching Contributions shall be allocated to the Qualified
Matching Contribution Account (or a "substitute" Account described in Section
2.82), and such Account shall
(a) be fully vested at all times, and
(b) be subject to the withdrawal and distribution restrictions in
Section 6.12.
Even if the Employer does not make Qualified Matching Contributions to
this Plan, the Administrator may nevertheless elect to treat Employer matching
contributions to any other defined contribution plan of the Employer as
Qualified Matching Contributions for this Plan. The preceding sentence shall
only apply to Employer matching contributions if the "account" to which such
contributions are allocated
(a) meets the requirements of the preceding paragraph applicable to
the Qualified Matching Contribution Account, and
(b) meets other nondiscrimination requirements described in
regulations under Sections 401(k) and (m) of the Code.
This Section 6.09 is effective only if the Qualified Matching
Contributions to be treated as Deferrals for a Plan Year are made within 12
months after the end of such Plan Year.
6.10 REFUND OF DISCRIMINATORY DEFERRALS
(a) General: If the ADP Test is not satisfied and Qualified
Nonelective Contributions and/or Qualified Matching Contributions (if any)
are still insufficient to satisfy the ADP Test, the Discriminatory
Deferrals (including gains/losses) attributable to a Highly Compensated
Participant shall be distributed to the Participant.
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(b) Family Members: A distribution of Discriminatory Deferrals under
this Section 6.10 to a Key Highly Compensated Employee and his Family
Members shall be accomplished by allocating the Discriminatory Deferrals
among such Employees in proportion to the Deferrals (including Qualified
Nonelective Contributions and Qualified Matching Contributions treated as
Deferrals) of each such Employee for the applicable Plan Year.
(c) Gains and Losses: The gains and losses (collectively referred to
as "income") to be distributed under subsection (a) above shall be the
Investment Income for the Plan Year attributable to Discriminatory
Deferrals, as determined in accordance with methods described in Section
5.04. The Administrator may also elect to distribute income for the period
between the end of the applicable Plan Year and the date of distribution
(the "gap period"). Such election shall be applied consistently to all
Discriminatory Deferrals attributable to a particular Plan Year. However,
the Administrator may change such election from year to year.
Notwithstanding the foregoing, for periods before the issuance of
final regulations under Section 401(k) of the Code on August 15, 1991, the
determination of distributable income may be determined under proposed
regulation 1.401(k)-1(f)(4)(ii), which generally provided for specific
methods of determining income for both the Plan Year and the gap period.
(d) Timing: A distribution under this Section 6.10 must be made by
the end of the following Plan Year. (Note: The Employer is subject to a
10% excise tax if Discriminatory Deferrals are distributed more than 2-1/2
months after the end of the applicable Plan Year.)
(e) Consent Not Needed: Distributions of Discriminatory Deferrals
shall not be subject to the requirements of Section 8.02(b)(iv) and
Article X (regarding the notice and consent rules of Sections 411(a)(11)
and 417 of the Code).
6.11 RECHARACTERIZATION OF DISCRIMINATORY DEFERRALS
(a) General: If permitted in the Adoption Agreement, a Highly
Compensated Participant who would otherwise receive a refund of his
Discriminatory Deferrals in accordance with Section 6.10 may instead elect
to have such Discriminatory Deferrals recharacterized as voluntary
contributions to the Plan.
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(b) Limitations:
(i) This Section 6.11 shall become effective only if voluntary
contributions are permitted under Section 4.03.
(ii) Qualified Nonelective Contributions and Qualified
Matching Contributions may not be recharacterized.
(iii) Discriminatory Deferrals of a Participant may not be
recharacterized to the extent such Deferrals, when added to other
voluntary contributions of such Participant, exceed the limits (if
any) permitted under Section 4.03.
(iv) Discriminatory Deferrals which have been recharacterized
shall continue to be treated as Deferrals for purposes of Sections
404, 409, 411, 412, 415, 416 and 417 of the Code. Discriminatory
Deferrals attributable to Plan Years beginning after December 31,
1988 shall be subject to Section 6.12 (regarding
withdrawal/distribution restrictions).
(v) Discriminatory Deferrals which have been recharacterized
shall not be treated as "compensation" for purposes of Sections 404
and 415 of the Code.
(c) Taxability: The Deferrals which are to be recharacterized shall
be the earliest Deferrals made for the Plan Year ("first-in, first-out").
(Note: Such recharacterized Deferrals shall be includible in the Highly
Compensated Participant's gross income in the calendar year for which such
Deferrals were made.)
(d) Timing and Methodology: Recharacterization of Discriminatory
Deferrals may not be made later than the later of (1) 2-1/2 months
following the end of the applicable Plan Year, or (2) October 24, 1988.
For purposes of this Section 6.11, recharacterization will be deemed to
have occurred on the date the last affected Highly Compensated Participant
is given written notification of the amount recharacterized and the
consequences thereof. (Note: See regulation 1.401(k)-1(f)(3)(ii) and
(iii). The preceding regulation also requires the reporting of
recharacterization to the Employer and the IRS.)
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6.12 WITHDRAWALS AND DISTRIBUTIONS FROM THE DEFERRED INCOME, QUALIFIED
NONELECTIVE CONTRIBUTION AND QUALIFIED MATCHING CONTRIBUTION
ACCOUNTS
(a) General: Notwithstanding any provision of the Plan to the
contrary, distributions or withdrawals from the Deferred Income Account,
the Qualified Nonelective Contribution Account or the Qualified Matching
Contribution Account shall not be made except in one of the following
circumstances:
(i) An event described in Sections 8.01(b), (c) or (d)
[regarding disability, death or Termination of Employment].
(ii) An event described in Section 8.01(a) [regarding Normal
Retirement Date], but only if the Benefit is payable on account of
either Termination of Employment or attainment of at least age
59-1/2. That is, if Normal Retirement Age were age 55, a Participant
who reaches age 55, but has not had a Termination of Employment, may
not receive a distribution of his Deferred Income Account.
(iii) Attainment of age 59-1/2.
(iv) Termination of this Plan without establishment or
maintenance of another defined contribution plan (see Section 15.04
for specific details).
(v) In the case of a corporation, the sale (or other
disposition) by the corporation of either (I) "substantially all" of
its assets or (II) its interest in a subsidiary. The preceding
sentence shall apply only to Employees who continue employment with
the (I) buyer or (II) subsidiary, respectively. After March 31,
1988, a distribution may not be made under this paragraph (v) unless
it is a "lump sum distribution" (as defined in Section 401(k)(10)(B)
of the Code).
(vi) Occurrence of a hardship (see subsection (b) below).
(vii) Distribution of Excess Deferrals for any calendar year
(see Section 6.04).
(viii) Failure to satisfy the ADP, ACP or Multiple Use Tests
of Sections 6.05, 7.08 and 7.14, respectively.
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(b) Hardship Withdrawals
(i) For Plan Years beginning before January 1, 1989, hardship
withdrawals shall be governed by the terms of the Prior Plan (if one
existed), if such terms were a reasonable interpretation of Section
401(k) of the Code [in the absence of IRS final and proposed
regulations issued August 5, 1988]. Operation in accordance with IRS
proposed regulations issued November 10, 1981 shall be deemed a
reasonable interpretation.
(ii) Hardship withdrawals made on or before March 31, 1989
shall also be governed by the standards described in paragraph (i)
above.
(iii) Hardship withdrawals not described in either paragraph
(i) or (ii) above shall be governed by the "immediate and heavy
financial need test" described in subsection (c) below and the
"other resources test" described in subsection (d) below.
(c) Immediate and Heavy Financial Need: A hardship withdrawal shall
only be made if the Participant has an "immediate and heavy financial
need". A Participant shall be deemed to have an immediate and heavy
financial need if the hardship withdrawal is for any of the following:
(i) Expenses incurred for (or necessary to obtain) the medical
care of the Participant, his spouse and his dependents. Such medical
care must normally be tax-deductible within the meaning of Section
213(d) of the Code.
(ii) Costs directly related to the purchase of the principal
residence of the Participant (excluding mortgage payments).
(iii) Tuition and related educational fees for the next 12
months of post-secondary education for the Participant and his
spouse, children (whether or not still a dependent) and dependents.
(iv) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of his
principal residence.
The amount of the immediate and heavy financial need shall include
amounts necessary to pay anticipated federal, state or local income taxes
or penalties attributable to a hardship withdrawal.
VI-15
<PAGE> 146
(d) Other Resources: A hardship withdrawal shall only be made if it
is necessary to satisfy the financial need described in subsection (c)
above. The determination of whether the hardship withdrawal is necessary
shall be determined on the basis of the Safe Harbor Rule or the Facts and
Circumstances Rule (both described below), as elected in the Adoption
Agreement.
(i) Safe Harbor Rule: A hardship withdrawal shall be deemed to
be necessary if all of the following are satisfied:
(1) The withdrawal does not exceed the amount of the
immediate and heavy financial need.
(2) The Participant has obtained all distributions other
than hardship withdrawals (such as withdrawal of after-tax
voluntary contributions) and all non-taxable loans currently
available under all plans maintained by the Employer.
(3) All qualified and non-qualified plans (but not
health or welfare plans) of the Employer provide that the
Participant will not be allowed to make Deferrals and other
employee contributions for a period of at least 12 months
after the date of the hardship withdrawal. However, the
preceding rule shall not require the suspension of mandatory
employee contributions under a defined benefit plan.
(4) All "401(k)" plans of the Employer limit the amount
of Deferrals that the Participant may make in the calendar
year following the calendar year of the hardship withdrawal to
the difference between the maximum allowed for such later
calendar year (see Section 6.03(c)) and the amount of the
Participant's Deferrals for the calendar year of the hardship
withdrawal.
(ii) Facts and Circumstances Rule: A hardship withdrawal shall
generally be treated as necessary if the Employer relies upon the
Participant's written representation (unless the Employer has actual
knowledge to the contrary) that the need cannot reasonably be
relieved by one or more of the following methods:
(1) Through reimbursement or compensation by insurance
or otherwise.
VI-16
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(2) By the reasonable liquidation of the Participant's
assets, or the assets of his spouse and minor children that
are reasonably available to the Participant.
(3) By borrowing from commercial sources at reasonable
terms.
(4) By discontinuing Deferrals or after-tax employee
contributions to the Plan.
(5) By other distributions or non-taxable loans from
plans maintained by the Employer or by any other unrelated
employer.
A Participant shall not be required to avail himself of any of
the above resources if the effect would be to increase his hardship
or need. For example, if a plan loan would disqualify a Participant
from obtaining necessary financing to purchase a principal
residence, a plan loan will not be a required method of relieving
such Participant's hardship need.
(e) Amount Available for Hardship Withdrawals: For Plan Years
beginning before January 1, 1989, the amount available for hardship
withdrawals under this Section 6.12 shall be the sum of the values of the
Deferred Income Account, the Qualified Nonelective Contribution Account
and the Qualified Matching Contribution Account, reduced by any amounts
which are "offsetted" against the foregoing Accounts. Such "offsetting"
amounts would include (but are not limited to) outstanding Plan loan(s)
(including loans made to satisfy the requirements of subsection (d)
above).
For Plan Years beginning after December 31, 1988, the amount
available for hardship withdrawals under this Section 6.12 shall be (i)
plus (ii) plus (iii) plus (iv) less (v) less (vi) as follows:
(i) the value of the Deferred Income Account as of the
Transitional Valuation Date (as defined herein), plus
(ii) Deferrals made after the Transitional Valuation Date,
plus
(iii) the value as of the Transitional Valuation Date of that
portion of the Qualified Nonelective Contribution Account
attributable to amounts which enable the Plan to comply with the ADP
Test in Section 6.05 (Note: The Qualified Nonelective Contribution
Account also contains amounts which enable the Plan to comply with
the ACP Test and the Multiple Use Test), plus
VI-17
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(iv) the value of the Qualified Matching Contribution Account
as of the Transitional Valuation Date, less
(v) any hardship withdrawals since the Transitional Valuation
Date, less
(vi) any other amounts which (1) are "offsetted" against the
foregoing Accounts, and (2) are attributable to either (A) the value
of the foregoing Accounts as of the Transitional Valuation Date, or
(B) Deferrals made after the Transitional Valuation Date. Such
"offsetting" amounts would include (but are not limited to)
distributions and outstanding Plan loan(s) (including loans made to
satisfy the requirements of subsection (d) above). In determining
whether the preceding amounts are attributable to any portion of the
foregoing Accounts, the Administrator shall apply the same rules
established elsewhere in the Plan regarding "timing"; e.g. "last-in;
first-out," etc.
For purposes of this subsection (e), the term Transitional Valuation
Date shall mean the later of (1) the last day of the last Plan Year ending
before July 1, 1989, or (2) December 31, 1988. If the Transitional
Valuation Date is not a Valuation Date or Interim Valuation Date, this
subsection (e) shall be applied by substituting the phrase "Valuation (or
Interim Valuation) Date immediately preceding the Transitional Valuation
Date" for "Transitional Valuation Date" in paragraphs (i) through (vi)
above.
(f) Maximum Number of Hardship Withdrawals: During any 12-month
period, the maximum number of hardship withdrawals shall be limited as
provided in the Adoption Agreement.
(g) Consent Requirements: Unless specifically provided otherwise in
the Plan, distributions and withdrawals under this Section 6.12 shall be
subject to the requirements of Section 8.02(b)(iv) and Article X
(regarding the notice and consent rules of Sections 411(a)(11) and 417 of
the Code).
(h) Forms and Procedures: The Administrator shall establish forms
and procedures necessary to carry out this Section 6.12.
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ARTICLE VII
MATCHING CONTRIBUTIONS, JOINING BONUSES
AND COORDINATION WITH DEFERRALS
7.01 GENERAL
This Article VII is intended to provide guidelines regarding special
qualification, nondiscrimination and distribution rules under Section 401(m) and
other related Sections of the Code. The Administrator shall adopt additional
rules necessary (1) to carry out this Article VII (including, if applicable,
special rules unique to Partner-Employees), and (2) to implement special,
transitional and operational rules permitted under IRS regulations (for example,
the "restructuring" rules of regulation 1.401(m)-1(g)(5)(ii)).
Regulations under Sections 401(a)(4) and 410(b) consider the portion of
this Plan attributable to Matching Contributions to be a separate plan apart
from the portions of the Plan attributable to Profit Sharing Contributions or
Deferrals. Accordingly, if the provisions of this Article conflict with any
other provisions of this Plan, the provision that shall govern depends upon
whether such provision applies to Matching Contributions, Profit Sharing
Contributions or Deferrals.
If contributions under this Article VII are discretionary, the Employer
shall designate what portion, if any, of the Employer contributions under
Section 4.01 shall be used to fund Matching Contributions and/or Joining
Bonuses.
7.02 DEFINITIONS
For purposes of this Article VII, the following words or phrases shall
have the following meanings:
(a) "Actual Contribution Percentage (ACP)" shall mean the percentage
obtained by dividing the Participant's Aggregate Contributions for the
Plan Year by the Participant's ADP Compensation for the Plan Year.
However, see Sections 6.06(c) and (e), and 7.09(a), (b) and (c) regarding
whether (i) additional amounts are added to Aggregate Contributions to
increase the ACP, or (ii) certain Matching Contributions are excluded
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to lower the ACP. In addition, see subsection (c) below and Section 7.13
regarding situations where the ACP of a Highly Compensated Participant is
decreased to satisfy the ACP Test in Section 7.08. If a Participant's ADP
Compensation for the Plan Year is "zero", no ACP shall be computed for
such Participant (see Section 7.08(b)(iv)).
(b) "ADP Compensation" shall have the same meaning as such term is
used in Section 6.02. Because the ACP Test is independent of the ADP Test,
the definition of ADP Compensation for purposes of this Article VII may
differ from the definition of ADP Compensation for purposes of Article VI.
(c) "Adjusted ACP" shall mean, in the case of a Plan which fails to
satisfy the ACP Test in Section 7.08, the eventual ACP calculated under
the following leveling method, under which the ACP of the Highly
Compensated Participant with the highest ACP is reduced to the extent
required to:
(i) enable the Plan to satisfy the ACP Test, or
(ii) cause such Highly Compensated Participant's ACP to equal
the ACP of the Highly Compensated Participant with the next highest
ACP.
This process must be repeated until the Plan satisfies the ACP Test.
In addition, the term Adjusted ACP shall be substituted for the term ACP
wherever such term is used in the Plan.
(d) "Aggregate Contributions" shall mean, with respect to any Plan
Year and any Participant, the total of (i) his voluntary contributions
made for such year, and (ii) Matching Contributions allocated to his
Matching Contribution Account (and, if applicable, his Qualified Matching
Contribution Account) during such year. Voluntary contributions include
Discriminatory Deferrals which have been recharacterized as voluntary
contributions for the Plan Year in accordance with Section 6.11. However,
voluntary contributions that are distributed pursuant to the fourth
paragraph of Section 5.09 shall not be considered Aggregate Contributions.
(e) "Average ACP" shall mean, for a group of Participants, the
average of the ACP's for each Participant in such group.
(f) "Average ADP" shall mean, for a group of Participants, the
average of the ADP's for each Participant in such group.
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(g) "Combined ADP/ACP Limit" shall mean, in the case of a Plan Year
beginning after December 31, 1988, the greater of (i) the Primary Combined
ADP/ACP Limit, or (ii) the Secondary Combined ADP/ACP Limit.
(h) "Excess Aggregate Contributions" shall mean those Aggregate
Contributions and Qualified Nonelective Contributions which caused the ACP
Test to be exceeded. The amount of Excess Aggregate Contributions
attributable to any Highly Compensated Participant is equal to such
Participant's Aggregate Contributions (or other amounts treated as
Aggregate Contributions) minus the product of (i) such Participant's
Adjusted ADP, times (ii) such Participant's ADP Compensation.
(i) "Primary Combined ADP/ACP Limit" shall mean the sum of
(i) 1.25 times the greater of (1) the Average ADP for the
group of Non-Highly Compensated Participants, or (2) the Average ACP
for the group of Non-Highly Compensated Participants for the plan
year beginning with or within the plan year of the plan containing
the cash or deferred arrangement; plus
(ii) the lesser of
(1) 2.0 times the lesser of the Average ADP or Average
ACP described in paragraph (i) above, or
(2) 2% plus the lesser of the Average ADP or Average ACP
described in paragraph (i) above.
(j) "Secondary Combined ADP/ACP Limit" shall mean the sum of
(i) 1.25 times the lesser of (1) the Average ADP for the group
of Non-Highly Compensated Participants, or (2) the Average ACP for
the group of Non-Highly Compensated Participants for the plan year
beginning with or within the plan year of the plan containing the
cash or deferred arrangement; plus
(ii) the lesser of
(1) 2.0 times the greater of the Average ADP or Average
ACP described in paragraph (i) above, or
(2) 2% plus the greater of the Average ADP or Average
ACP described in paragraph (i) above.
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<PAGE> 152
7.03 JOINING BONUS
If elected in the Adoption Agreement, eligible Participants (and Inactive
Participants) shall receive an allocation of a Joining Bonus.
(a) Funding: The funding of the Joining Bonus by the Employer shall
be discretionary or required, as elected in the Adoption Agreement.
(b) Eligibility: A Participant (and Inactive Participant who became
an Inactive Participant during the Plan Year) shall be eligible for a
Joining Bonus for a Plan Year if he meets all of the following
requirements:
(i) he meets the requirements specified in the Adoption
Agreement,
(ii) his Entry Date occurs in such Plan Year (that is, such
Plan Year is his first Plan Year of participation, even if his
Deferrals for such Plan Year is $0).
(iii) he has made Deferrals (greater than $0) for each payroll
period (from his Entry Date to the last day of the Plan Year) during
which he received Compensation and was eligible to make Deferrals,
and
(iv) he has never received a Joining Bonus during any prior
period of Plan participation.
(c) Allocation:
(i) If the funding of the Joining Bonus is required to be made
by the Employer, the Joining Bonus Account of each eligible
individual shall receive an allocation of the amount specified in
the Adoption Agreement.
(ii) If the funding of the Joining Bonus is discretionary on
the part of the Employer, the total Employer contribution
attributable to Joining Bonuses shall be allocated to the Joining
Bonus Account of each eligible individual so that each eligible
Account shall be allocated the same amount.
(d) Vesting of Joining Bonus Account: A Participant's Vested
Percentage in his Joining Bonus Account shall be either (i) 100%, or (ii)
determined in accordance with the vesting schedule applicable to such
Participant's Matching Contribution Account, whichever is elected in the
Adoption Agreement. (Note: If the same vesting schedule applies to both
the Joining Bonus Account and the Matching Contribution Account, the
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<PAGE> 153
Administrator may choose not to establish a separate Joining Bonus
Account, in which case a Joining Bonus shall be allocated to the Matching
Contribution Account.)
(e) Treatment as Matching Contributions: Unless specifically
provided otherwise in this Section 7.03, Plan provisions applicable to
Matching Contributions shall similarly apply to Joining Bonuses.
7.04 MATCHING CONTRIBUTIONS
If elected in the Adoption Agreement, eligible Participants (and Inactive
Participants) shall receive an allocation of a Matching Contribution.
(a) Funding: The funding of Matching Contributions by the Employer
shall be discretionary or required, as elected in the Adoption Agreement.
If the funding is required, the Employer shall contribute such amount as
necessary to satisfy Section 7.05(b), taking into account Forfeitures
under Sections 7.07(a) and 7.13(i)(i).
(b) Eligibility: A Participant (and Inactive Participant who became
an Inactive Participant during the applicable Plan Year) shall be eligible
for a Matching Contribution if he meets the requirement(s) specified in
the Adoption Agreement.
(c) Loss of Matching Contribution: Notwithstanding any provision in
this Plan to the contrary, a Matching Contribution (or a portion thereof)
shall not be allocated to the extent such allocation results in any
discrimination prohibited by Section 401(a)(4) of the Code because such
Matching Contribution relates to an Excess Deferral, a Discriminatory
Deferral [both as defined in Section 6.02], or an Excess Aggregate
Contribution. In addition, such "forfeited" Matching Contribution shall
not be taken into account under any provision of this Plan. For example,
the forfeited Matching Contribution shall not be treated as an Aggregation
Contribution for purposes of the ACP Test in Section 7.08.
7.05 ALLOCATION OF MATCHING CONTRIBUTION
Matching Contributions shall be allocated as of the last day of the Plan
Year in accordance with either subsection (a) or (b) below, whichever is
applicable.
(a) Discretionary Funding: If the funding of the Matching
Contribution is discretionary on the part of the Employer, the total
Employer contribution attributable to Matching Contributions shall be
allocated to the Matching Contribution Accounts of
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<PAGE> 154
all eligible individuals according to the ratio that each individual's
Deferrals for the Plan Year bears to the total Deferrals of all eligible
individuals. For purposes of this subsection (a), Deferrals in excess of
the amount specified in the Adoption Agreement shall not be taken into
account in determining the ratio described in the preceding sentence. In
addition, an individual's allocation of Matching Contributions shall be
limited to the amount described in the Adoption Agreement.
(b) Required Funding: If the funding of the Matching Contribution is
required to be made by the Employer, the Matching Contribution Account of
each eligible individual shall receive an allocation of a percentage of
his Deferrals for the Plan Year, as specified in the Adoption Agreement,
and subject to the limitations specified in the Adoption Agreement.
7.06 VESTING OF MATCHING CONTRIBUTION ACCOUNT
This Plan may provide that a Participant's (or Inactive Participant's)
Vested Percentage in his Matching Contribution Account will differ from his
Vested Percentage in his Employer Contribution Account, according to the
elections made in the Adoption Agreement.
7.07 FORFEITURES ATTRIBUTABLE TO THE MATCHING CONTRIBUTION ACCOUNT
For Plan Years beginning prior to January 1, 1989, the treatment of
Forfeitures and Forfeiture Accounts attributable to Matching Contribution
Accounts on account of a Participant's Termination of Employment with less than
100% vesting shall be determined under the terms of the Prior Plan. For Plan
Years beginning after December 31, 1988, the provisions of this Section 7.07
shall be applicable.
In general, the treatment of Forfeitures and Forfeiture Accounts
attributable to Matching Contribution Accounts under this Section 7.07 shall be
exactly the same treatment applied to Forfeitures and Forfeiture Accounts
attributable to Employer Contribution Accounts, as described in Section 4.02. In
other words, in applying the provisions of Section 4.02 to this Section 7.07,
Section 4.02 shall be read by substituting the term "Matching Contribution
Account(s)" for the term "Employer Contribution Account(s)" wherever it appears.
For example, a Former Participant's Forfeiture Account attributable to
Matching Contribution Accounts shall be established as of the earlier of the
date the Former Participant receives a distribution of his Benefit, or the end
of the Plan Year in which the Former
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<PAGE> 155
Participant incurs five consecutive Breaks-In-Service. Similarly, Forfeiture
Accounts attributable to Matching Contribution Accounts shall become available
for allocation at the same time as Forfeiture Accounts attributable to Employer
Contribution Accounts (i.e., as of the end of the Plan Year described in the
Adoption Agreement, or, if earlier, as of the end of the Plan Year in which the
Former Participant incurs five consecutive Breaks-In-Service). However, where
Section 4.02(a) provides for the allocation of Forfeiture Accounts in accordance
with Section 5.07, the allocation of Forfeiture Accounts attributable to
Matching Contribution Accounts shall instead be governed by the applicable
method below:
(a) If the funding of Matching Contributions is required (see
Section 7.04(a)), Forfeitures under this Section 7.07 shall be applied to
reduce the amount of the contribution required to be made by the Employer
of the Former Participant or Inactive Participant pursuant to Sections
7.04(a) and 7.05. If Forfeitures available for the Plan Year exceed the
required Employer contribution for the Plan Year, such excess Forfeitures
shall be held in a suspense account (to which no Investment Income shall
be credited) and be used to reduce future contributions required to be
made by such Employer.
(b) If the funding of Matching Contributions is discretionary (see
Section 7.04(a)), Forfeitures under this Section 7.07 shall be added to
the Employer contribution for the Plan Year, and allocated in accordance
with Section 7.05(a).
7.08 SPECIAL NONDISCRIMINATION TESTS
Aggregate Contributions of Highly Compensated Participants shall be
limited in accordance with this Section 7.08, which is intended to comply with
the nondiscrimination tests described in Section 401(m)(2) of the Code and
related regulations.
(a) Average Contribution Percentage Test: For any Plan Year, the
Average ACP for the group of Highly Compensated Participants shall not
exceed the Average ACP for the group of Non-Highly Compensated
Participants as follows:
<TABLE>
<CAPTION>
IF THE AVERAGE ACP FOR THEN THE AVERAGE ACP FOR
THE GROUP OF NON-HIGHLY COMPENSATED THE GROUP OF HIGHLY COMPENSATED
PARTICIPANTS FOR THE PARTICIPANTS FOR THE
PLAN YEAR (DENOTED "R") IS: PLAN YEAR SHALL NOT EXCEED:
--------------------------- ---------------------------
<S> <C> <C>
2% or less 2.0 times "R"
2% to 8% 2.0% plus "R"
8% or more 1.25 times "R"
</TABLE>
VII-7
<PAGE> 156
The nondiscrimination limits of this Section 7.08(a) shall be
referred to as the "ACP Test."
(b) Special Rules: For purposes of applying the ACP Test of
subsection (a) above, the following rules are applicable:
(i) Qualified Matching Contributions: Qualified Matching
Contributions which have been taken into account under the ADP Test
(see Section 6.09) shall be disregarded for purposes of the ACP
Test.
(ii) Required Aggregation: If this Plan satisfies the
requirements of Sections 401(m), 401(a)(4), or 410(b) of the Code
only if aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Sections of the Code
only if aggregated with this Plan, then all the Aggregate
Contributions included in such other plans shall be aggregated with
the Aggregate Contributions included in this Plan.
Notwithstanding the preceding paragraph,
(1) for Plan Years beginning after December 31, 1988, an
"ESOP" plan may not be aggregated with this Plan.
(2) for Plan Years beginning after December 31, 1989, a
plan whose plan year differs from the Plan Year of this Plan
may not be aggregated with this Plan.
(iii) Aggregation of Aggregate Contributions of Highly
Compensated Employees: If a Highly Compensated Employee is also a
participant under another plan of the Employer which includes
Aggregate Contributions, the ACP of such Highly Compensated Employee
under this Plan shall take into account such other Aggregate
Contributions. For Plan Years beginning after December 31, 1988, if
the plan year of such other plan differs from the Plan Year of this
Plan, the ACP of such Highly Compensated Employee for such Plan Year
under this Plan shall be determined by including only amounts
attributable to plan years which end in the same calendar year as
this Plan Year.
This paragraph (iii) shall not be effective if the affected
plans are mandatorily disaggregated under regulation
1.401(m)-1(f)(14), which references regulation
1.401(k)-1(g)(11)(iii).
VII-8
<PAGE> 157
(iv) Voluntary Contributions Refunded Under Code Section 415:
Voluntary contributions which are distributed pursuant to the fourth
paragraph of Section 5.09 shall be disregarded for purposes of the
ACP Test.
(v) Participants With No Compensation: A Participant whose ADP
Compensation for the Plan Year is "zero" shall not be taken into
account.
(vi) Rounding of Percentages: For Plan Years beginning after
December 31, 1988, the ACP and the Average ACP shall be rounded to
the nearest one-hundredth of 1%.
(vii) Family Members: The ACP of a Family Member shall not be
separately calculated. Instead, the ACP of the Key Highly
Compensated Employee shall be computed by combining his Aggregate
Contributions and ADP Compensation with those of his Family
Member(s). Notwithstanding the $200,000 limit on ADP Compensation in
Section 6.02, for Plan Years beginning after December 31, 1988, the
ADP Compensation of such "aggregated" Key Highly Compensated
Employee shall be the sum of (1) plus (2), as follows:
(1) the sum of the ADP Compensation of each of the Key
Highly Compensated Employee, his spouse, and lineal
descendants who have not attained age 19 before the close of
such Plan Year; and such sum shall be limited to $200,000 (or
such larger amount described in Section 6.02), plus
(2) the sum of the ADP Compensation of each other Family
Member not described in (1), where each individual ADP
Compensation shall be limited to $200,000 (or such larger
amount described in Section 6.02).
7.09 FAILURE TO PASS THE ACP TEST
If the ACP Test is not satisfied, the Employer and/or Administrator may
take one or more of the following steps:
(a) include certain Deferrals in the ACP (see Section 7.10)
(b) treat Forfeitures attributable to Employer Contribution Accounts
as Qualified Nonelective Contributions for Plan Years beginning after
December 31, 1990 (see Section 7.11)
VII-9
<PAGE> 158
(c) include Qualified Nonelective Contributions in the ACP (see
Section 7.12)
(d) distribute or forfeit Aggregate Contributions which exceeded the
limits (see Section 7.13)
7.10 DEFERRALS
If the ACP Test is exceeded, the Administrator may elect to treat certain
Deferrals (but not Deferrals which are distributed pursuant to the fourth
paragraph of Section 5.09) of Non-Highly Compensated Participants as Aggregate
Contributions for purposes of the ACP Test. This Section 7.10 is effective only
if the ADP Test in Section 6.05 is satisfied both with and without taking such
Deferrals into account.
7.11 FORFEITURES ATTRIBUTABLE TO EMPLOYER CONTRIBUTION ACCOUNTS
For Plan Years beginning on or after January 1, 1991, if the ACP Test is
not satisfied, Forfeiture Accounts which have become available for allocation
pursuant to Section 4.02 shall not be allocated in accordance with Section 5.07.
Instead, if any Forfeitures remain after the application of Section 6.07
(regarding the use of Forfeitures to satisfy the ADP Test), enough Forfeitures
as necessary shall be treated as Qualified Nonelective Contributions pursuant to
Section 7.12 to satisfy the ACP Test. That is, for purposes of the Plan, such
Forfeitures shall not be subject to the provisions of Section 5.07, but will be
subject to the provision of Section 7.12.
Any Forfeitures not deemed to be Qualified Nonelective Contributions
pursuant to the preceding paragraph shall be allocated in accordance with
Section 5.07, unless such Forfeitures are deemed to be Qualified Nonelective
Contributions pursuant Section 7.14 to satisfy the Multiple Use Test.
7.12 QUALIFIED NONELECTIVE CONTRIBUTIONS
If the ACP Test is exceeded, the Employer may elect to make Qualified
Nonelective Contributions for the Plan Year. Such contributions shall be
allocated to Non-Highly Compensated Participants (including Non-Highly
Compensated Participants who have a Termination of Employment prior to the end
of the Plan Year) in the following manner:
(a) The initial allocation shall be made to the Non-Highly
Compensated Participant with the lowest ADP Compensation for the Plan
Year. The amount of such allocation shall be the lesser of (i) total
Qualified Nonelective Contributions made for the Plan
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Year under this Section 7.12, or (ii) the maximum amount permitted under
Section 5.09 (regarding Section 415 of the Code). [Note: Instead of the
term "Compensation," this Section 7.12 uses the term "ADP Compensation"
and Section 5.09 uses the term "Earnings." Since these three terms
generally have different meanings, care should be exercised when carrying
out this Section 7.12.]
(b) If there still remain Qualified Nonelective Contributions after
step (a) above, the second allocation shall be made to the Non-Highly
Compensated Participant with the next lowest ADP Compensation for the Plan
Year. Similarly, the amount of such allocation shall be the lesser of (i)
remaining Qualified Nonelective Contributions, or (ii) the maximum amount
permitted under Section 5.09.
(c) If there still remain Qualified Nonelective Contributions after
step (b) above, step (b) shall then be applied to the Non-Highly
Compensated Participant with the next lowest ADP Compensation for the Plan
Year. In addition, step (b) shall be repeated as many times as necessary
until Qualified Nonelective Contributions are exhausted.
Qualified Nonelective Contributions under this Section 7.12 shall
(a) be allocated to the Qualified Nonelective Contribution Account
(or a "substitute" Account described in Section 2.84),
(b) be treated as Aggregate Contributions for purposes of Sections
7.02(a) and 7.08,
(c) not include Qualified Nonelective Contributions which have been
treated as Deferrals in accordance with Section 6.08, and
(d) be made within 12 months after the end of the applicable Plan
Year.
The Qualified Nonelective Contribution Account (or other Account to which
Qualified Nonelective Contributions are allocated) shall
(a) be fully vested at all times, and
(b) be subject to the withdrawal and distribution restrictions in
Section 6.12.
Even if the Employer does not make Qualified Nonelective Contributions to
this Plan, the Administrator may nevertheless elect to treat other Employer
contributions to this Plan or any other defined contribution plan of the
Employer as Qualified Nonelective Contributions for
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this Plan. The preceding sentence shall only apply to Employer contributions if
the "account" to which such contributions are allocated
(a) meets the requirements of the preceding paragraph applicable to
the Qualified Nonelective Contribution Account, and
(b) meets other nondiscrimination requirements described in
regulations under Section 401(k) of the Code.
7.13 DISTRIBUTION OR FORFEITURE OF EXCESS AGGREGATE CONTRIBUTIONS
(a) General: If the ACP Test is not satisfied and Qualified
Nonelective Contributions and/or Deferrals (if any) are still insufficient
to satisfy the ACP Test, the Excess Aggregate Contribution (including
gains/losses) attributable to a Highly Compensated Participant shall be
disposed of as follows:
(i) In the case of a Participant whose Vested Percentage in
his Matching Contribution Account as of the end of the applicable
Plan Year is 0%, the Excess Aggregate Contribution (including
gains/losses) shall become a Forfeiture as of the end of the
applicable Plan Year.
(ii) In the case of a Participant whose Vested Percentage in
his Matching Contribution Account as of the end of the applicable
Plan Year is 100%, the Excess Aggregate Contribution (including
gains/losses) shall be distributed to the Participant.
(iii) In the case of a Participant whose Vested Percentage in
his Matching Contribution Account as of the end of the applicable
Plan Year is greater than 0%, but less than 100%, the Excess
Aggregate Contribution (including gains/losses) shall become a
Forfeiture under paragraph (i) to the extent non-vested and be
distributed under paragraph (ii) to the extent vested.
(b) Deferrals: Notwithstanding anything to the contrary in this
Section 7.13, Deferrals shall not be forfeited or distributed under this
Section 7.13.
(c) Accounting for Excess Aggregate Contributions: The Administrator
shall establish rules regarding what portions, if any, of the following
amounts for the Plan Year constitute Excess Aggregate Contributions:
voluntary Employee contributions, Matching Contributions and Qualified
Nonelective Contributions.
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(d) Voluntary Employee Contributions: Notwithstanding subsections
(a)(i) and (a)(iii) above, voluntary Employee contributions shall not
become Forfeitures. Instead, voluntary Employee contributions which are
Excess Aggregate Contributions shall be distributed to the Participant.
(e) Family Members: Excess Aggregate Contributions attributable to a
Key Highly Compensated Employee and his Family Members shall be allocated
among such Employees in proportion to the Aggregate Contributions
(including Qualified Nonelective Contributions treated as Aggregate
Contributions) of each such Employee for the applicable Plan Year. Excess
Aggregate Contributions allocated in accordance with the preceding
sentence shall then be distributed and/or forfeited in accordance with
subsections (a)(i), (a)(ii) or (a)(iii) above, whichever is applicable.
(f) Gains and Losses: The gains and losses (collectively referred to
as "income") to be distributed under subsection (a) above shall be the
Investment Income for the Plan Year attributable to Excess Aggregate
Contributions, as determined in accordance with methods described in
Section 5.04. The Administrator may also elect to distribute income for
the period between the end of the applicable Plan Year and the date of
distribution (the "gap period"). Such election shall be applied
consistently to all Excess Aggregate Contributions attributable to a
particular Plan Year. However, the Administrator may change such election
from year to year.
Notwithstanding the foregoing, for periods before the issuance of
final regulations under Section 401(m) of the Code on August 15, 1991, the
determination of distributable income may be determined under proposed
regulation 1.401(m)-1(e)(3)(ii), which generally provided for specific
methods of determining income for both the Plan Year and the gap period.
(g) Timing: A distribution under this Section 7.13 must be made by
the end of the following Plan Year. (Note: The Employer is subject to a
10% excise tax if Excess Aggregate Contributions are distributed more than
2-1/2 months after the end of the applicable Plan Year.)
(h) Consent Not Needed: Distributions of Excess Aggregate
Contributions shall not be subject to the requirements of Section
8.02(b)(iv) and Article X (regarding the notice and consent rules of
Sections 411(a)(11) and 417 of the Code).
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(i) Forfeitures: Any amounts forfeited pursuant to subsections
(a)(i) and (a)(iii) above shall be treated as follows:
(i) If the funding of the Matching Contribution is required to
be made by the Employer (see Section 7.04(a)), Forfeitures under
subsections (a)(i) and (a)(iii) above shall be applied to reduce the
amount of the contribution required to be made by the Employer
pursuant to Sections 7.04(a) and 7.05 for the Plan Year for which
Excess Aggregate Contributions arose, or for the next Plan Year (if
not possible or practical for the current Plan Year).
(ii) If the funding of the Matching Contributions is
discretionary (see Section 7.04(a)), Forfeitures under subsections
(a)(i) and (a)(iii) above shall be allocated to the Matching
Contribution Accounts of eligible Non-Highly Compensated
Participants for the Plan Year for which Excess Aggregate
Contributions arose in the following manner:
(1) the eligible Non-Highly Compensated
Participants are those who meet the requirements for
eligibility for a Matching Contribution under Section
7.04(b).
(2) the allocation shall be pro rata according to
the ratio that each eligible individual's Matching
Contribution for the Plan Year bears to the total
Matching Contributions of all eligible individuals for
the Plan Year.
(3) if it is not possible or practical to make the
allocation as of the end of the current Plan Year, the
above Forfeitures shall be added to the discretionary
Employer contribution for the next Plan Year.
(j) Treatment of Excess Aggregate Contributions: Aggregate
Contributions (and amounts treated as Aggregate Contributions) which are
considered Employer contributions for purposes of Sections 404 and 415 of
the Code shall continue to be considered Employer contributions when such
Aggregate Contributions become Excess Aggregate Contributions (even if
such Excess Aggregate Contributions are forfeited or distributed in
accordance with this Section 7.13).
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7.14 MULTIPLE USE LIMITATION
(a) General: This Section 7.14 describes the rules to implement
Section 401(m)(9)(A) of the Code and regulation 1.401(m)-2, which
generally provide that the Employer cannot use the "2 times/2% plus"
discrimination test under more than one plan or cash or deferred
arrangement of the Employer.
This Section 7.14 shall take effect only if one or more Highly
Compensated Employee is eligible under both a plan of the Employer which
contains a cash or deferred arrangement (e.g. Deferrals) and a plan of the
Employer which provides for voluntary Employee contributions or Matching
Contributions. (Note: These plans could be one single plan or separate
plans of the Employer.) If the Employer has more than one plan which
contains a cash or deferred arrangement and/or more than one plan which
provides for voluntary Employee contributions or Matching Contributions,
this Section 7.14 shall be applied separately with respect to each
combination of plans of different types.
This Section 7.14 shall not take effect if
(i) the Plan Year begins before January 1, 1989, or
(ii) during the Plan Year, either the Average ADP or the
Average ACP of Highly Compensated Participants (under this Plan and
any other affected plan of the Employer) does not exceed 1.25 times
the Average ADP or the Average ACP, respectively, of Non-Highly
Compensated Participants.
(b) Multiple Use Test: Deferrals, voluntary contributions and
Matching Contributions (including amounts treated as such) shall be
limited in accordance with this subsection (b) to comply with Section
401(m)(9)(A) of the Code. The nondiscrimination limits of this subsection
(b) shall be referred to as the "Multiple Use Test," which provides that
the sum of the Average ADP and Average ACP of Highly Compensated
Participants (under this Plan and any other affected plan of the Employer)
shall not exceed the Combined ADP/ACP Limit (which is calculated taking
into account the Average ADP and Average ACP of Non-Highly Compensated
Participants).
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For purposes of determining the Average ADP and Average ACP of
Highly Compensated Participants, the following rules are applicable:
(i) Qualified Nonelective Contributions, Qualified Matching
Contributions and Deferrals (whichever is applicable) shall be taken
into account to the extent necessary to satisfy the ADP Test and the
ACP Test.
(ii) Deferrals may be treated as Matching Contributions only
to the extent necessary to satisfy the ACP Test. That is, Deferrals
which are not necessary to satisfy the ACP Test may not be treated
as Matching Contributions.
(iii) Excess Deferrals, Discriminatory Deferrals and Excess
Aggregate Contributions shall be disregarded. That is, the preceding
amounts must be first corrected, and such corrected amounts will not
be used to determine the Average ADP and Average ACP.
(c) Failure to Pass the Multiple Use Test. If the Multiple Use Test
in subsection (b) above is not satisfied, the Administrator shall take one
of the following steps (or combinations of steps) in accordance with rules
and procedures it has established, to the extent necessary to satisfy the
Multiple Use Test:
(i) Treat Forfeitures attributable to Employer Contribution
Accounts as Qualified Nonelective Contributions for Plan Years
beginning after December 31, 1990, similar to the treatment of
Forfeitures used to satisfy the ADP Test (see Section 6.07).
However, Forfeitures used to satisfy the ADP Test (see Section 6.07)
or the ACP Test (see Section 7.11) may not be used to satisfy the
Multiple Use Test.
(ii) Refund Deferrals in a manner similar to rules for
Discriminatory Deferrals;
(iii) Distribute or forfeit Aggregate Contributions in a
manner similar to rules for Excess Aggregate Contributions.
The Highly Compensated Participants who shall be affected by this
subsection (c) shall be those who meet one of the following requirements
(or any combinations) in accordance with rules and procedures established
by the Administrator:
(i) only those Highly Compensated Participants who have made
Deferrals;
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(ii) only those Highly Compensated Participants who have had
Aggregate Contributions made on their behalf;
(iii) only those Highly Compensated Participants who have made
Deferrals and have had Aggregate Contributions made on their behalf;
(iv) only those Highly Compensated Participants who are
eligible to make Deferrals and eligible to have Aggregate
Contributions made on their behalf (whether or not Deferrals or
Aggregate Contributions have actually been made).
Distributions of any amounts under this subsection (c) shall not be
subject to the requirements of Section 8.02(b)(iv) and Article X (regarding the
notice and consent rules of Sections 411(a)(11) and 417 of the Code).
7.15 zcoordination of excess deferrals, discriminatory deferrals and
excess aggregate contributions
The Administrator shall establish rules to coordinate the distribution
and/or forfeiture of the following amounts which may occur in the same Plan Year
(or calendar year, if applicable):
(a) Excess Deferrals under Section 6.04,
(b) Discriminatory Deferrals as a result of the failure of the Plan
to satisfy the ADP Test in Section 6.05, and
(c) Excess Aggregate Contributions as a result of the failure of the
Plan to satisfy the ACP Test in Section 7.08.
Such coordination shall take into account (1) the gains/losses applicable
to such amounts, (2) the ADP, ACP and Multiple Use Tests under Sections 6.05,
7.08 and 7.14, respectively, and (3) IRS regulations regarding such matters.
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ARTICLE VIII
PAYMENT OF BENEFITS
8.01 TYPES OF BENEFITS
(a) Normal Retirement Benefit: A Participant or an Inactive
Participant who has attained his Normal Retirement Date shall be entitled
to receive a normal retirement Benefit as follows:
(i) in the case of a Participant (or Inactive Participant) who
has experienced a Termination of Employment, the entire value of his
Accounts payable in accordance with Section 8.02.
(ii) in the case of a Participant (or Inactive Participant)
who is still employed by an Employer, either paragraph (1) or (2)
below as elected in the Adoption Agreement:
(1) No amount is payable until there is a Termination of
Employment.
(2) An amount equal to the entire value of his Accounts
as of his "Deemed Retirement Date," but subject to the
limitations of Section 6.12(a)(ii) regarding a distribution
from the Deferral Income Account. For purposes of this
paragraph (2), a Participant's (or Inactive Participant's)
Deemed Retirement Date is the date (if any) selected by such
Participant (or Inactive Participant). Such Benefit shall be
payable in accordance with Section 8.02 in the same manner as
if the Participant (or Inactive Participant) had actually
experienced a Termination of Employment on his Deemed
Retirement Date.
A Participant (or Inactive Participant) may exercise the
option under this paragraph (2) only once. That is, a
Participant (or Inactive Participant) who has received a
distribution of his Benefit while still employed by an
Employer shall not be entitled to another "in-service"
distribution (unless required by Article IX).
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Notwithstanding any provision of the Plan to the
contrary, a Participant (or Inactive Participant) who has
received a distribution of his Benefit under this paragraph
(2) shall continue to be eligible (if otherwise eligible) for
an allocation under Articles V, VI, VII and XI.
(b) Disability Benefit: If a Participant's or Inactive Participant's
Termination of Employment with the Employer is on account of Disability,
he shall be entitled to receive a disability Benefit equal to the entire
value of his Accounts payable in accordance with Sections 8.02 and 8.03.
(c) Death Benefit: In the event that the Termination of Employment
of a Participant or Inactive Participant is caused by his death, his
Beneficiary shall be entitled to a death Benefit equal to the entire value
of his Accounts payable in accordance with Sections 8.02 and 8.03 after
receipt by the Administrator of acceptable proof of death.
(d) Other Termination Benefits: In the event of the Termination of
Employment of a Participant or Inactive Participant before becoming
eligible for a Benefit under subsections (a), (b) or (c), the Participant
or Inactive Participant shall be entitled to receive a Benefit equal to
his Vested Percentage (which may differ depending upon the Account to
which such Vested Percentage relates) in the value of his Accounts payable
in accordance with Section 8.02.
8.02 PAYMENT OF BENEFITS
Except as may be required by the provisions of Section 8.03 or Article X,
payment of Benefits shall be made in accordance with this Section.
(a) Application for Payment: Upon a Member's or Beneficiary's
entitlement to payment of Benefits under Section 8.01, he shall file with
the Administrator his written application on such form or forms, and
subject to any other uniform and nondiscriminatory conditions, as the
Administrator may require. The Administrator may withhold payment of a
Benefit until proper application is made.
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(b) Time of Payment: Payment of Benefits shall be made according to
this subsection (b), unless the Company elects another method regarding
the timing of payment in the Adoption Agreement.
(i) Upon entitlement to a Benefit under Section 8.01(c) (on
account of death), full payment or commencement of payment shall be
made within the 90-day period following the date of death (or
receipt by the Administrator of acceptable proof of death) if the
Beneficiary is the Member's spouse. If the Beneficiary is not the
Member's spouse, rules similar to those described in paragraph (ii)
below shall apply.
(ii) Upon entitlement to a Benefit under Sections 8.01(a) or
(b) (for reasons of retirement or Disability), full payment or
commencement of payment shall be made as soon as practical following
the last day of the Plan Year in which the retirement or Disability
occurs or receipt by the Administrator of acceptable proof of
Disability, if later. However, the Administrator may establish rules
for earlier payment where practical.
(iii) Upon entitlement to a Benefit under Section 8.01(d),
full payment or commencement is as follows:
(1) With respect to a Member whose Vested Percentage in
all his Accounts is 100%, payment shall generally be made as
soon as practical following the last day of the Plan Year in
which his Termination of Employment occurs. However, the
Administrator may establish rules for earlier payment where
practical.
(2) With respect to a Member whose Vested Percentage in
any Account is less than 100%, payment shall generally be made
as soon as practical following the last day of the Plan Year
in which his Termination of Employment occurs. However, the
Administrator may establish rules for earlier payment where
practical.
(3) With respect to a Member whose Benefit (determined
separately with respect to each Account) is zero (because
either his Vested Percentage is 0% or the value of his Account
is zero), the Member shall be deemed to have received a
distribution of such Benefit on his date of Termination of
Employment for purposes of this Article VIII and Sections 4.02
and 7.07.
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(iv) If a Member's Benefit under Sections 8.01(a), (b) or (d)
exceeds $3,500, payment of his Benefit may not be made without his
consent. If a Member does not consent to immediate payment, his
Benefit shall remain in the Trust and be paid upon the earliest of
(1) his death, (2) attainment of the later of age 62 or his Normal
Retirement Date, or (3) his subsequent consent to payment on an
earlier date. The Administrator shall also require consent of the
Member's spouse if such consent is required pursuant to Article X.
(v) Unless a Member elects otherwise, payment of a Member's
Benefit must commence not later than 60 days after the close of the
Plan Year following the latest of (1) his Termination of Employment,
(2) attainment of age 65 or his Normal Retirement Date, if earlier,
or (3) the 10th anniversary of the date on which the Member
commenced participation in the Plan. For purposes of this paragraph,
the failure of a Member to consent to a distribution payable in
accordance with this paragraph shall be deemed to be an election by
such Member to defer commencement of his Benefit.
(vi) Payment of Benefits under Section 8.01(c) to a Member's
Beneficiary on account of the Member's death shall not require the
consent of the Beneficiary, even if the Death Benefit exceeds
$3,500.
(c) Determination of Benefit: A Member's Benefit shall be based upon
the value of his Account determined as of the Valuation Date coinciding
with or immediately preceding the date of distribution, plus (i)
Deferrals, Matching Contributions, voluntary contributions and Rollover
Contributions made during the period since such Valuation Date, and less
(ii) any distributions or withdrawals from the Account(s) since such
Valuation Date. The value of the Account may be further adjusted to
reflect Interim Valuations made pursuant to Section 5.04(b). If a Member's
Benefit exceeds $3,500 at the time of any distribution, then such Member's
Benefit at any subsequent time shall be deemed to exceed $3,500.
Accordingly, any reference in this Plan to "exceeds $3,500" shall take
into account the preceding "deemed to exceed $3,500" rule. [An
illustration of how this paragraph is intended to operate is as follows:
Suppose the Plan allows periodic installment payments, and Member X elects
to receive his $5,000 Benefit over 60 monthly installments of
approximately $100 each. After 24 monthly installments, X's remaining
Benefit is $3,200. The Member may not be "cashed-out" with a single sum
distribution of $3,200 without his consent because although his current
Benefit does not exceed $3,500, his initial Benefit exceeded $3,500.]
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(d) Method of Payment: Payment of Benefits shall be in a single sum
unless (i) a different form is otherwise required by Article X, (ii)
periodic installment payments are permitted in the Adoption Agreement, or
(iii) the Prior Plan provided forms of payment which may not be eliminated
pursuant to Section 411(d)(6) of the Code, in which case the Plan must be
amended to include such forms of payment. If periodic installment payments
are permitted, they shall be in substantially equal amounts (but not less
than $100 per month) for a specified number of years, but not to exceed
the Member's actuarially determined life expectancy at the date payments
are to commence. Such periodic payments shall be made not less frequently
than annually. The Administrator may direct the Trustee to segregate and
deposit a cash sum equal to the Member's Benefit in one or more bank
savings accounts, savings certificates or other separate fund as the
Administrator may from time to time have established and maintained by the
Trustee for this purpose, and to pay such Investment Income as may accrue
on the sum so deposited. Periodic installment payments shall also be
subject to the rules contained in Article IX.
The amount which a Member or Beneficiary is entitled to receive at
any time, and from time to time, may be paid in cash or in securities, or
in any combination thereof.
8.03 PAYMENT OF DISABILITY AND DEATH BENEFITS
(a) Disability Benefit: Payment of a Disability Benefit to a Member
shall be in a single sum unless the provisions of Article X apply.
(b) Death Benefit: Payment of a Death Benefit to the
Beneficiary(ies) of a deceased Member shall be in a single sum unless the
provisions of Article X apply.
8.04 DESIGNATION OF BENEFICIARY
Subject to the applicable state laws governing a Member's right to
retirement plan benefits, any Qualified Domestic Relations Order and the
restrictions contained herein, a Member may designate a Beneficiary to receive
the Benefit payable upon his death, or may change any such designation (without
consent of any previously designated Beneficiary) on any form acceptable to the
Administrator and received by the Administrator at any time prior to the
Member's death.
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A Member's surviving spouse shall automatically be his Beneficiary unless:
(a) The spouse has consented in writing to the designation of a
Beneficiary other than the spouse, the spouse's consent acknowledges the
effect of such designation and the spouse's consent has been witnessed by
a notary public, or if permitted by the Administrator, by a representative
of the Administrator, or
(b) It is established to the satisfaction of the Administrator or
his representative that the consent of the Member's spouse may not be
obtained because there is no spouse, because the spouse cannot be located
or because of such other circumstances as may be permitted under Internal
Revenue Service regulations pertaining to Section 417(a)(2) of the Code,
or
(c) The Member and the Member's spouse (if entitled to a
Pre-Retirement Spouse's Annuity) have elected to waive the Pre-Retirement
Spouse's Annuity as provided in Section 10.06.
The consent or waiver described in paragraphs (a) and (c) above shall be
valid only if such consent or waiver specifically acknowledges the chosen
Beneficiary. That is, the Member may not designate another Beneficiary without
the consent of the Member's spouse.
A designation of Beneficiary other than the spouse shall be automatically
revoked on the marriage or remarriage (other than a common law marriage) of a
Member, and any designation of the spouse as Beneficiary shall be automatically
revoked upon any finalized divorce of a Member subsequent to the date of filing
of his designation of Beneficiary.
If there is no designated Beneficiary alive when a death Benefit becomes
payable, the Beneficiary shall be deemed to be (1) the Member's surviving
spouse, or, if none, (2) the Member's surviving children (including any adopted
children) in equal shares, or, if none, (3) the Member's heirs-at-law as
determined in the reasonable judgement of the Administrator, or if none exist,
(4) the Plan.
Payments made pursuant to the foregoing shall be a complete discharge of
the liabilities under the Plan for such payments and the Administrator may
require the Beneficiary to execute such application forms and releases as the
Administrator deems necessary and appropriate.
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8.05 UNCLAIMED BENEFITS
The Administrator, the Trustee and the Employers shall not be required to
determine, or to make investigation to determine, the identity or mailing
address of any Member or Beneficiary, and they shall have discharged their
obligation when they shall have sent checks and other papers by registered or
certified mail to such Member or Beneficiary at the address designated to it by
such Member or Beneficiary, or if the Member or Beneficiary makes no such
designation, at his last address in the records of the Employers.
In the event a Member or a Beneficiary cannot be located, the
Administrator may direct the Trustee to segregate and deposit a cash sum equal
to such Member's or Beneficiary's Benefit in a separate fund within the Trust to
be invested in one or more savings accounts, savings certificates or such other
investment vehicle as the Administrator shall determine. Any Investment Income
as may accrue in such separate fund shall be added to the Member's or
Beneficiary's Benefit.
If a Benefit remains unclaimed for a period of three years following the
date the Benefit first becomes payable to a Member or Beneficiary under the
terms of this Article, the Administrator may consider that such Benefit is
forfeited. Such Forfeiture shall be allocated on the next succeeding Valuation
Date with other Forfeitures; provided, however, if such Member or Beneficiary is
located after such allocation and makes a claim for his Benefit, such Member or
Beneficiary shall be paid an amount equal to the Benefit which was forfeited in
accordance with this Section 8.05. Payment of such Benefit shall be from the
current Forfeitures, or the Employer, in its sole discretion, may make a special
contribution.
8.06 QUALIFIED DOMESTIC RELATIONS ORDERS
This Plan specifically permits the payment of Benefits to an "alternate
payee" (as defined in Section 414(p)(8) of the Code) pursuant to the terms of a
Qualified Domestic Relations Order. In addition, payment of Benefits to a Member
(or his Beneficiary) may not be made to the extent such payment conflicts with
the terms of a Qualified Domestic Relations Order.
The Administrator shall adopt rules and procedures to implement this
Section 8.06, including procedures to determine whether a "domestic relations
order" (as defined in Section 414(p)(1)(B) of the Code) qualifies as a Qualified
Domestic Relations Order.
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8.07 CODE SECTION 401(A)(31) REQUIREMENTS
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 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.
For purposes of this Section, the following words or phrases shall have
the following meanings:
(a) Eligible Rollover Distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to
the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse who
is the alternate payee under a Qualified Domestic Relations Order are
distributees with regard to the interest of the spouse or former spouse.
(d) Direct Rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
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8.08 WAIVER OF THE 30-DAY NOTICE PERIOD
Notwithstanding any provision of the Plan to the contrary, if a
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(a) the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
This Section shall generally apply to distributions made on or after
January 1, 1994. However, this Section may be applied to earlier distributions
in accordance with Section IV of IRS Notice 93-26.
VIII-9 (11/1/94)
<PAGE> 175
ARTICLE IX
AGE 70-1/2 DISTRIBUTION REQUIREMENTS
9.01 GENERAL RULES
(a) Except as otherwise provided in Article X, Joint and Survivor
Annuity Requirements, the requirements of this Article shall apply to any
distribution of a Member's Benefit and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise specified, the
provisions of this Article apply to calendar years beginning after
December 31, 1984.
(b) All distributions required under this Article shall be
determined and made in accordance with the Income Tax Regulations under
Section 401(a)(9) of the Code, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the
regulations.
9.02 REQUIRED BEGINNING DATE
The entire interest of a Member must be distributed or begin to be
distributed no later than the Member's Required Beginning Date.
9.03 LIMITS ON DISTRIBUTION PERIODS
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 a
combination thereof):
(a) The life of the Member;
(b) The life of the Member and a Designated Beneficiary;
(c) A period certain not extending beyond the Life Expectancy of the
Member; or
(d) A period certain not extending beyond the joint and last
survivor expectancy of the Member and a Designated Beneficiary.
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9.04 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR
If the Member's Benefit is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the Required
Beginning Date:
(a) Individual Account
(i) If a Member's Benefit is to be distributed over (1) a
period not extending beyond the Life Expectancy of the Member or the
joint life and last survivor expectancy of the Member and the
Member's Designated Beneficiary, or (2) a period not extending
beyond the Life Expectancy of the Designated Beneficiary, the amount
required to be distributed for each calendar year, beginning with
distributions for the first Distribution Calendar Year, must at
least equal the quotient obtained by dividing the Member's Benefit
by the Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if
the Member'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 Member.
(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 Member's Benefit by the lesser of
(1) the Applicable Life Expectancy, or (2) if the Member'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
Income Tax Regulations. Distributions after the death of the Member
shall be distributed using the Applicable Life Expectancy in Section
9.04(a)(i) as the relevant divisor without regard to regulations
Section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Member's first
Distribution Calendar Year must be made on or before the Member's
Required Beginning Date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution
Calendar Year in which the Member's Required Beginning Date occurs,
must be made on or before December 31 of that Distribution Calendar
Year.
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(b) Other Forms: If the Member'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 Section
401(a)(9) of the Code and the regulations thereunder.
9.05 DEATH DISTRIBUTION PROVISIONS
(a) Distribution Beginning Before Death: If the Member dies after
distribution of his or her Benefit has begun, the remaining portion of
such Benefit will continue to be distributed at least as rapidly as under
the method of distribution being used prior to the Member's death.
(b) Distribution Beginning After Death: If the Member dies before
the distribution of his or her Benefit begins, distribution of the
Member's entire Benefit shall be completed by December 31 of the calendar
year containing the fifth anniversary of the Member'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 Member's Benefit 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
Member died;
(ii) If the Designated Beneficiary is the Member's surviving
spouse, the date distributions are required to begin in accordance
with (i) above shall not be earlier than the later of (1) December
31 of the calendar year immediately following the calendar year in
which the Member died, or (2) December 31 of the calendar year in
which the Member would have attained age 70-1/2.
If the Member has not made an election pursuant to this Section 9.05(b) by
the time of his or her death, the Member's Designated Beneficiary must elect the
method of distribution no later than the earlier of (1) December 31 of the
calendar year in which distributions would be required to begin under this
Section 9.05, or (2) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Member. If the Member has no Designated
Beneficiary, or if the Designated Beneficiary does not elect a method of
distribution, distribution of the Member's entire Benefit must be completed by
December 31 of the calendar year containing the fifth anniversary of the
Member's death.
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(c) For purposes of Section 9.05(b), if the surviving spouse dies
after the Member, but before payments to such spouse begin, the provisions
of Section 9.05(b), with the exception of paragraph (ii) therein, shall be
applied as if the surviving spouse were the Member.
(d) For purposes of this Section 9.05, any amount paid to a child of
the Member will be treated as if it has been paid to the surviving spouse
if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
(e) For the purposes of this Section 9.05, distribution of a
Member's Benefit is considered to begin on the Member's Required Beginning
Date (or, if Section 9.05(c) is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section 9.05(b)). If
distribution in the form of an annuity described in Section 9.04(b)
irrevocably commences to the Member before the Required Beginning Date,
the date distribution is considered to begin is the date distribution
actually commences.
9.06 DEFINITIONS
(a) Applicable Life Expectancy: The Life Expectancy (or joint and
last survivor expectancy) calculated using the attained age of the Member
(or Designated Beneficiary) as of the Member'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 as so recalculated. The
applicable calendar year shall be the first Distribution Calendar Year,
and if Life Expectancy is being recalculated such succeeding calendar
year. If annuity payments commence in accordance with Section 9.04(b)
before the Required Beginning Date, the applicable calendar year is the
year such payments commence. If distribution is in the form of an
immediate annuity purchased after the Member's death with the Member's
remaining Benefit, the applicable calendar year is the year of purchase.
(b) Designated Beneficiary: The individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the
Code and the regulations thereunder.
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(c) Distribution Calendar Year: A calendar year for which a minimum
distribution is required. For distributions beginning before the Member's
death, the first Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Member's
Required Beginning Date. For distributions beginning after the Member's
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 9.05.
(d) Life Expectancy: Life Expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in Tables
V and VI of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Member (or spouse, in the case of
distributions described in Section 9.05(b)(ii)), by the time distributions
are required to begin, Life Expectancies shall be recalculated annually.
Such election shall be irrevocable as to the Member (or spouse) and shall
apply to all subsequent years. The Life Expectancy of a nonspouse
Beneficiary may not be recalculated.
(e) Member's Benefit
(i) The Account 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 as of dates in the Valuation
Calendar Year after the Valuation Date and decreased by
distributions made in the Valuation Calendar Year after the
Valuation Date.
(ii) Exception for Second Distribution Calendar Year: For
purposes of paragraph (i) 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.
(f) Required Beginning Date
(i) General Rule: The Required Beginning Date of a Member is
the first day of April of the calendar year following the calendar
year in which the Member attains age 70-1/2.
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(ii) Transitional Rules
(1) The Required Beginning Date of a Member who attains
age 70-1/2 before January 1, 1988, shall be determined in
accordance with (A) or (B) below:
(A) Non-5-percent owners: The Required Beginning
Date of a Member 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.
(B) 5-percent owners: The Required Beginning Date
of a Member who is a 5-percent owner during any year
beginning after December 31, 1979, is the first day of
April following the later of:
(I) the calendar year in which the Member
attains age 70-1/2, or
(II) the earlier of the calendar year with
or within which ends the Plan Year in which the
Member becomes a 5-percent owner, or the calendar
year in which the Member retires.
(2) The Required Beginning Date of a Member who is not a
5-percent owner who attains age 70-1/2 during 1988 who has not
retired as of January 1, 1989, is April 1, 1990.
(iii) 5-percent owner: A Member is treated as a 5-percent
owner for purposes of this Section if such Member is a 5-percent
owner as defined in Section 416(i) of the Code (determined in
accordance with Section 416 of the Code 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.
(iv) Once distributions have begun to a 5-percent owner under
this Section, they must continue to be distributed, even if the
Member ceases to be a 5-percent owner in a subsequent year.
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<PAGE> 181
9.07 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article X, distribution on behalf of any
Member, including a 5-percent owner, may be made in accordance with all of
the following requirements (regardless of when such distribution
commences):
(i) The distribution by the Trust is one which would not have
disqualified such Trust under Section 401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of 1984.
(ii) The distribution is in accordance with a method of
distribution designated by the Member whose Benefit in the Trust is
being distributed or, if the Member is deceased, by a Beneficiary of
such Member.
(iii) Such designation was in writing, was signed by the
Member or Beneficiary, and was made before January 1, 1984.
(iv) The Member had accrued a Benefit under the Plan as of
December 31, 1983.
(v) The method of distribution designated by the Member or the
Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Member's death, the Beneficiaries of the
Member listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to
be made upon the death of the Member.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Member or the Beneficiary, to whom
such distribution is being made, will be presumed to have designated the
method of distribution under which the distribution is being made if the
method of distribution was specified in writing and the distribution
satisfies the requirements in Sections 9.07(a)(i) and (v).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Section 401(a)(9) of the Code and the
regulations thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must distribute by the end
of the calendar year following the calendar year in
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which the revocation occurs the total amount not yet distributed which
would have been required to have been distributed to satisfy Section
401(a)(9) of the Code and the regulations thereunder, but for the TEFRA
Section 242(b)(2) election. For calendar years beginning after December
31, 1988, such distributions must meet the minimum distribution incidental
benefit requirements in Section 1.401(a)(9)-2 of the Income Tax
Regulations. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or addition
of another Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation,
so long as such substitution or addition does not alter the period over
which distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring life). In the
case in which an amount is transferred or rolled over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3 of regulation Section
1.401(a)(9)-1 shall apply.
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ARTICLE X
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
10.01 COVERAGE
(a) General: The provisions of this Article will apply to this Plan
unless:
(i) Members cannot or do not elect payment of their Benefits
in the form of a life annuity, and
(ii) On the death of a Member, his Benefit (reduced by the
amount of such Member's loan(s) pursuant to Section 5.10(c)) will be
paid to the Member's surviving spouse, or if there is no surviving
spouse, or if the surviving spouse has already consented in a manner
conforming to the waiver requirements set forth in this Article,
then to the Member's designated Beneficiary.
(b) Certain Participants Covered: The provisions of this Article
shall apply to a Member even if the Plan is otherwise not covered, if this
Plan (with respect to such Member) is a direct or indirect transferee on
or after January 1, 1985 of one of the following plans:
(i) a defined benefit plan,
(ii) a defined contribution plan which is subject to the
funding standards of Section 412 of the Code,
(iii) any other plan which does not meet the exceptions
described in subsection (a) above, or
(iv) a plan which received amounts from another transferee
plan.
However, the provisions of this Article shall apply only to the
amount transferred to this Plan on or after January 1, 1985 and not to the
Member's entire Benefit.
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<PAGE> 184
(c) Precedence: If this Article applies to this Plan or a Member,
the provisions of this Article shall take precedence over any conflicting
provision in this Plan.
(d) Exception: The provisions of this Article shall not apply to a
Member (or Beneficiary) whose Benefit is $3,500 or less. Such Member (or
Beneficiary) shall receive payment of his Benefit in accordance with the
otherwise applicable provisions of this Plan.
10.02 JOINT AND SURVIVOR ANNUITY
A Member's Benefit shall be paid in the form of a joint and survivor
annuity. In the case of a Member who is not married, the term "joint and
survivor annuity" shall mean an annuity for the life of such Member. However,
the Member and spouse or former spouse may elect not to receive a joint and
survivor annuity, as provided in this Article, in which case the Member's
Benefit will be paid in accordance with the otherwise applicable provisions of
this Plan. More than one spouse may be entitled to survivor annuity benefits.
For example, two former spouses may have been awarded survivor benefits and
there may also be a current spouse. In such case, this Section shall be applied
by dividing the Member's Benefit in proportion to the spousal entitlements and
then applying this Section to each portion as if each portion were a separate
Benefit belonging to the Member and the spouse or former spouse in question. The
rules in this Section apply to all former Members with vested Benefits, the
distribution of which had not commenced prior to January 1, 1985.
10.03 PURCHASE OF ANNUITY
The joint and survivor annuity payable under this Article shall be
provided by purchasing a nontransferable annuity contract from an insurance
company with the Member's Benefit (subject to the apportionment rules in Section
10.02 relating to multiple spouses). The annuity contract shall provide for
monthly payments to the Member for life, beginning on the date selected by the
Member (but no later than the latest of the Member's (1) Normal Retirement Date,
(2) 62nd birthday, or (3) date of Termination of Employment). These payments
shall end with the payment for the calendar month in which the Member's death
occurs, with the provision that if the Member dies after his Benefit commences
and is survived by a spouse or former spouse entitled to survivor benefits, such
spouse or former spouse shall receive monthly payments of between 50 and 100
percent of the Member's Benefit (as elected by the Member), beginning with the
payment for the calendar month following the month in which the Member
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died and ending with the payment for the calendar month in which the spouse or
former spouse dies.
In addition, the annuity contract must contain provisions which meet all
requirements of this Article (e.g. consent, waiver, etc.).
10.04 WAIVER
A Member and his spouse or former spouse may elect, in the manner
prescribed by the Administrator, not to receive a joint and survivor annuity (in
which case the Member shall receive his or her Benefit as otherwise provided in
the Plan). Such an election may be made or revoked at any time, but it shall
become irrevocable when payment of the Member's Benefit commences, or an annuity
contract is purchased, if earlier. Spousal consents to elections waiving the
joint and survivor annuity are required and must be given in writing witnessed
by a notary public, or, if permitted, by the Administrator, or by a
representative of the Administrator. The preceding consent or waiver shall not
be valid unless such consent or waiver specifically acknowledges the chosen
Beneficiary. Accordingly, the Member may not designate another Beneficiary
without the consent of the Member's spouse. Spousal consent may be waived by the
Administrator if a Member has no spouse or the spouse cannot be located, or for
such other reasons authorized in applicable Treasury Regulations.
10.05 NOTICE REQUIREMENTS
The Administrator shall provide each Member within the Election Period a
written explanation of: (i) the terms and conditions of a joint and survivor
annuity; (ii) the Member's right to make and the effect of an election to waive
the joint and survivor annuity form of payment; (iii) the rights of a Member's
spouse; and (iv) the right to make and the effect of a revocation of a previous
election to waive the joint and survivor annuity.
For purposes of this Section:
(a) "Election Period" shall mean the period no earlier than 30 days
and no later than 90 days before the Member's Annuity Starting Date.
(b) "Annuity Starting Date" shall mean the first day of the first
period for which the amount is payable as an annuity, or if a benefit is
not payable in the form of an annuity, the first day on which all events
have occurred which entitle the Member to such benefit.
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<PAGE> 186
10.06 PAYMENT OF DEATH BENEFIT
The payment of Benefits due upon the death of a Member pursuant to Section
8.01(c) shall be governed by this Section 10.06.
(a) Married Members: The Benefit payable upon the death of a married
Member shall be in the form of a "Pre-retirement Spouse's Annuity" (as
defined herein) unless one of the following applies:
(i) The single sum value of the Benefit payable to the
spouse is $3,500 or less.
(ii) The Member and his spouse have elected to waive the
Pre-retirement Spouse's Annuity.
(iii) The Member's spouse, after the death of the
Member, elects to receive the Benefit in a form other than the
Pre-retirement Spouse's Annuity.
For purposes of this Plan, "Pre-retirement Spouse's Annuity" shall mean an
annuity payable for the life of the surviving spouse, which can be purchased by
the Member's Benefit payable upon the death of the Member (but reduced by the
amount of such Member's loan(s) pursuant to Section 5.10(c)). Such
Pre-retirement Spouse's Annuity shall be provided by purchasing a
nontransferable annuity contract from an insurance company chosen by the
Administrator.
The Pre-retirement Spouse's Annuity shall commence within a reasonable
time after the death of the Member. The spouse may elect to defer payment of the
annuity to a later date, but not beyond the April 1 following the date the
Member would have attained age 70-1/2.
The Member's spouse may elect in writing and in the manner prescribed by
the Administrator, not to receive payment of the Benefit in the form of the
Pre-retirement Spouse's Annuity. The spouse may elect to receive payment of the
Benefit as provided in Section 8.02(d).
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<PAGE> 187
Under rules established by the Administrator, the Administrator shall
notify Members of their right to make a "Qualified Election" and to revoke any
such election within the "Election Period." The Administrator shall comply with
the foregoing sentence by providing each Member, during the "Disclosure Period,"
a written explanation of the Pre-retirement Spouse's Annuity in such terms and
in such manner as would be comparable to the explanation described in Section
10.05.
For purposes of this Section 10.06,
(i) "Qualified Election" shall mean a waiver of a
Pre-retirement Spouse's Annuity. The waiver must be in writing and
must be consented to by the Member's spouse. The spouse's consent to
a waiver must be witnessed by a representative of the Administrator
or notary public. Notwithstanding this consent requirement, if the
Member establishes to the satisfaction of the Administrator that
such written consent may not be obtained because there is no spouse
or the spouse cannot be located, a waiver will be deemed a Qualified
Election. Any consent necessary under this provision will be valid
only with respect to the spouse who signs the consent, or in the
event of a deemed Qualified Election, the designated spouse.
Additionally, a revocation of a prior waiver may be made by a Member
without the consent of the spouse at any time before the
commencement of benefits. The number of revocations shall not be
limited.
If the Qualified Election is made prior to the first day of
the Plan Year in which the Member attains age 35, such Qualified
Election shall become invalid as of such date. To extend the waiver
of the Pre-retirement Spouse's Annuity beyond such date, another
Qualified Election must be made.
(ii) "Election Period" shall mean the period which begins on
the Member's Entry Date and ends on the date of the Member's death.
(iii) "Disclosure Period" shall mean (and subject to
regulations under Section 417 of the Code) the latest of the
following:
(1) the period beginning on the Member's Entry Date and
ending with the close of the Plan Year preceding the Plan Year
in which the Member attains age 35, or
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<PAGE> 188
(2) the two-year period beginning one year preceding the
date the Member becomes a Participant and ending one year
following such date, or
(3) the two-year period beginning one year preceding the
date Section 10.01(b) becomes applicable to a Member and
ending one year following such date.
If a Member experiences a Termination of Employment before age
35, such Member's Disclosure Period shall be the two-year period
beginning one year preceding such Member's date of Termination of
Employment and ending one year following such date. If such Member
resumes employment with an Employer, his Disclosure Period shall be
redetermined.
If a former spouse of a Member is entitled to receive a portion of
the Member's Benefit under a Qualified Domestic Relations Order, the
requirement to pay the Member's death Benefit in the form of a
Pre-retirement Spouse's Annuity shall not apply unless it is consistent
with such Qualified Domestic Relations Order.
More than one spouse may be entitled to a Pre-retirement Spouse's
Annuity. For example, two former spouses may have been awarded survivor
benefits and there may also be a current spouse. In such case, this
Section shall be applied by dividing the Member's Benefit in proportion to
the spousal entitlements and then applying this Section to each portion as
if each portion were a separate Benefit belonging to the Member and the
spouse or former spouse in question.
(b) Other Members: The benefit payable to a Beneficiary upon the
death of either:
(i) A Member who is not married on his date of death, or
(ii) A Member whose spouse will not receive a Pre-retirement
Spouse's Annuity in accordance with subsection (a) hereof shall be in a
single sum unless the Plan permits some other form of payment.
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10.07 TRANSITIONAL RULES
(a) Any living Member not receiving payment of Benefits on August
23, 1984, who would otherwise not receive payment of his Benefit
prescribed by the previous sections of this Article must be given the
opportunity to elect to have the prior sections of this Article apply if
such Member is credited with at least one Hour of Service under the Plan
or a predecessor Plan in a Plan Year beginning on or after January 1,
1976, and such Member had at least 10 Years of Service when he separated
from service.
(b) Any living Member not receiving payment of Benefits on August
23, 1984, who was credited with at least one Hour of Service under this
Plan or a predecessor Plan on or after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year beginning on or after
January 1, 1976, must be given the opportunity to have his Benefit paid in
accordance with subsection (d) of this Section.
(c) The respective opportunities to elect (as described in
subsections (a) and (b) above) must be afforded to the appropriate Members
during the period commencing on August 23, 1984, and ending on the date
Benefit payment would otherwise commence to said Members.
(d) Any Member who has elected pursuant to subsection (b) of this
Section and any Member who does not elect under subsection (a) or who
meets the requirements of subsection (a) except that such Member does not
have at least 10 Years of Service when he or she separates from service,
shall have his Benefit distributed in accordance with all of the following
requirements if Benefits would have been payable in the form of a life
annuity:
(i) Automatic Joint and Survivor Annuity. If Benefits in the
form of a life annuity become payable to a married Member who:
(1) begins to receive payments under the Plan on or
after Normal Retirement Date; or
(2) dies on or after Normal Retirement Date while still
working for the Employer; or
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(3) begins to receive payments on or after the qualified
early retirement age; or
(4) separates from service on or after attaining
Normal Retirement Date (or the qualified early retirement age) and
after satisfying the eligibility requirements for the payment of
Benefits under the Plan and thereafter dies before beginning to
receive such Benefits;
then such Benefits will be received under this Plan in the form of a
qualified joint and survivor annuity, unless the Member has elected
otherwise during the election period. The election period must begin at
least 6 months before the Member attains qualified early retirement age
and end not more than 90 days before the commencement of Benefit payment.
Any election hereunder will be in writing and may be changed by the Member
at any time.
(ii) Election of Early Survivor Annuity. A Member who is employed
after attaining the qualified early retirement age will be given the
opportunity to elect, during the election period, to have a survivor
annuity payable on death. If the Member elects the survivor annuity,
payments under such annuity must not be less than the payments which would
have been made to the spouse under the qualified joint and survivor
annuity if the Member had retired on the day before his or her death. Any
election under this provision will be in writing and may be changed by the
Member at any time. The election period begins on the later of (1) the
90th day before the Member attains the qualified early retirement age, or
(2) the date on which participation begins, and ends on the date the
Member terminates employment.
(iii) For purposes of this subsection (d):
(1) Qualified early retirement age is the latest of:
(A) the earliest date, under the Plan, on which the
Member may elect to receive retirement Benefits,
(B) the first day of the 120th month
beginning before the Member reaches his Normal Retirement
Date, or
(C) the date the Member begins participation.
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(2) Qualified joint and survivor annuity is an annuity
for the life of the Member with a survivor annuity for the
life of the spouse which is not less than 50 percent and not
more than 100 percent of the amount of the annuity which is
payable during the joint lives of the Member and the spouse
and which is the amount of annuity which can be purchased with
the Member's Benefit.
10.08 WAIVER OF ANNUITY PAYMENTS
The waivers described in Sections 10.04 and 10.06 must specify a
particular form of benefit to be provided. Such particular form of benefit may
be changed only if the spouse executes another waiver.
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ARTICLE XI
TOP-HEAVY PROVISIONS
11.01 GENERAL
For any Plan Year during which the Plan is a member of a "Top-Heavy
Group," the provisions of this Article shall become applicable, to the extent
such provisions are more liberal than the remaining provisions of this Plan.
Notwithstanding the foregoing, the Plan is not a member of a "Top-Heavy Group"
if it is also a member of an Aggregation Group which is not a "Top-Heavy Group."
The term "Top-Heavy Group" shall mean an Aggregation Group in which more
than 60% of all Benefits (as of the Determination Date) provided under the plans
in such Aggregation Group are attributable to Key Employees. The terms
"Top-Heavy" and "Top-Heavy Plan" shall have similar meanings.
11.02 DEFINITIONS
(a) "Actuarial Equivalent" or "Actuarially Equivalent" shall mean,
for purposes of this Article, equality in value of the aggregate amounts
expected to be received under different forms of payment, based upon an
interest rate of 8% per annum and the 1983 Individual Annuity Mortality
Table (these actuarial assumptions are derived from regulation
1.401(a)(4)-3(d)(5)(iv)(B)). If the actuarial assumptions contained in the
top heavy provisions of the applicable defined benefit plan conflict with
the preceding sentence, the top heavy provisions of the applicable defined
benefit plan shall take precedence.
(b) "Aggregation Group" shall mean the group of plans which includes
(i) each plan (whether or not terminated) of the Employer in which a Key
Employee is a Participant at any time during the applicable Plan Year or
any of the 4 preceding Plan Years;
(ii) each other plan of the Employer which enables any plan
described in
(i) above to meet the requirements of Code Sections 401(a)(4)
or 410; and
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(iii) any other plan of the Employer which the Employer may
designate as part of the Aggregation Group, but only if the
resulting Aggregation Group continues to meet the requirements of
Code Sections 40l(a)(4) and 410.
(c) "Benefits" shall mean, for purposes of this Article, the
following:
(i) In the case of a defined benefit plan, the single sum
Actuarial Equivalent present value of the accrued pension of each
Participant. The value of such Benefits as of any Determination Date
shall be the value as of the most recent Valuation Date which is
within a 12-month period ending on the Determination Date.
For purposes of this Article, the accrued pension of an
Employee other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Employers, or (b) if there is no such
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
(ii) In the case of a defined contribution plan, the value of
the Accounts of each Participant. The value of such Accounts as of
any Determination Date shall be the value as of the most recent
Valuation Date which is within a 12-month period ending on the
Determination Date. If this Plan is not subject to the minimum
funding requirements of Section 412 of the Code, the value of an
Account shall not include Employer contributions made after the
Determination Date, except for the first Plan Year.
(iii) In the case of all plans, the accrued benefit
attributable to nondeductible Employee contributions.
(iv) Benefits shall include all distributions made (under a
plan described in subsection (b) above) during the 5-year period
ending on the Determination Date. Such distributions include those
under a terminated and liquidated plan which, if it had not been
liquidated, would have been required to be included in the
Aggregation Group.
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(v) Benefits shall not include:
(1) Benefits of a Former Key Employee.
(2) any rollover (or similar transfers) initiated by the
Participant and made after December 31, 1983. This sentence
shall only be applicable to the transferee plan and only to
the extent provided in government regulations.
(3) amounts which are deductible Employee contributions
(IRA-type).
(4) Benefits of any Former Participant who has not
performed services for the Employer at any time during the
5-year period ending on the Determination Date.
(d) "Determination Date" shall mean, with respect to any Plan
Year,
(i) the last day of the preceding Plan Year, or
(ii) in the case of the first Plan Year of any plan, the last
day of such Plan Year.
(e) "Employer" shall mean, for purposes of this Article, the
Employer and the Affiliated Companies.
(f) "Former Key Employee" shall mean, for any Plan Year, an Employee
(or his Beneficiary) who is a Non-Key Employee for such Plan Year, but was
a Key Employee in a prior Plan Year.
(g) "Key Employee" shall mean, for any Plan Year, an Employee or
former Employee (or their Beneficiaries) who, at any time during the Plan
Year containing the Determination Date for the Plan Year in question or
any of the 4 preceding Plan Years, is or was
(i) an officer of an Employer having annual Earnings (Gross
Earnings for Plan Years beginning after December 31, 1988) greater
than 50 percent of the amount in effect under Section 415(b)(1)(A)
of the Code for the applicable Plan Year. For purposes of the
preceding sentence, the maximum number of officers who may be deemed
Key Employees shall be determined as follows:
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<TABLE>
Maximum Number of Officers
Number of Employees* Deemed Key Employees
-------------------- --------------------
<S> <C>
30 or less 3
31 to 500 10% of the number of Employees**
500 or more 50
</TABLE>
----------
*For purposes of determining the number of Employees, see Section 2.45
(regarding Highly Compensated Employees) regarding which Employees may be
excluded.
** If the result is not an integer, the result shall be increased to the
next integer. Notwithstanding the preceding sentence, if IRS regulations
applicable to Top-Heavy plans are amended (either formally or informally)
to conform to similar regulations applicable to Highly Compensated
Employees, then the rounding rules under Section 2.45 shall be applicable
to this Section 11.02(g)(i).
In addition, if the number of officers exceeds the maximum number of
officers deemed Key Employees according to the above schedule, only those
with the highest one-year Earnings (Gross Earnings for Plan Years
beginning after December 31, 1988) during the applicable period shall be
deemed Key Employees.
(ii) One of the 10 Employees
(1) owning (or considered as owning within the meaning
of Section 318 of the Code) both more than a 1/2% interest and
the largest interests in an Employer (if two Employees have
the same interest in an Employer, the Employee having the
greater annual Earnings (Gross Earnings for Plan Years
beginning after December 31, 1988) shall be treated as owning
a larger interest), and
(2) having an annual Earnings (Gross Earnings for Plan
Years beginning after December 31, 1988) greater than the
amount in effect under Code Section 415(c)(l)(A).
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(iii) a greater than 5% owner of an Employer, or
(iv) a greater than 1% owner of an Employer having an annual
Earnings (Gross Earnings for Plan Years beginning after December 31, 1988)
greater than $150,000.
For purposes of determining ownership in paragraphs (ii), (iii) and
(iv) above, the rules of subsections (b), (c) and (m) of Section 414 of
the Code shall not apply.
(h) "Non-Key Employee" shall mean an Employee who is not a Key Employee.
(i) "Participant" shall mean, for purposes of this Article, Participants
(as defined in Article II) and in the case of a Code Section 401(k) plan, an
Employee who has met the eligibility requirements of such plan, but who has
declined to reduce his salary according to the terms of the plan. Participants
shall not include, for purposes of this Article, Employees who have waived their
right to participate in this Plan in accordance with Section 3.08. Participants
shall include an Employee excluded from Plan participation merely because his
Compensation is below a stated amount.
(j) "Valuation Date" shall mean
(i) in the case of a defined benefit plan, the date used for
computing annual plan costs for minimum funding under Section 412 of the
Code, regardless of whether a valuation is performed for the applicable
year.
(ii) in the case of a defined contribution plan, the date used for
allocating trust earnings, contributions or forfeitures.
11.03 VESTING
The Vested Percentage of each Participant who has at least one Hour of
Service while the Plan was Top-Heavy shall be not less than the percentage
determined under the Top Heavy Vesting Schedule. For purposes of determining a
Participant's nonforfeitable percentage under the Top Heavy Vesting Schedule,
his Years of Service prior to the Original Effective Date shall be excluded.
However, the Original Effective Date shall be modified to include service under
a "predecessor plan," as defined in IRS regulation 1.411(a)-5(b)(3).
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In the event the Plan ceases to be Top-Heavy, a Participant's Vested
Percentage shall thereafter be determined by the schedule in effect prior to the
Plan being Top-Heavy. Notwithstanding the foregoing,
(a) A Participant's Vested Percentage shall be no less than his
Vested Percentage as of the end of the last year during which the Plan was
Top-Heavy.
(b) A Participant who has at least 5 Years of Service (3 Years of
Service for Plan Years beginning after December 31, 1988) shall be
permitted to elect (in accordance with procedures prescribed by the
Administrator) to have his Vested Percentage computed under the Top Heavy
Vesting Schedule, in lieu of the schedule in effect prior to the Plan
being Top-Heavy.
11.04 COMPENSATION
Notwithstanding the definition of Compensation in Article II, Compensation
shall not exceed $200,000 or such higher amount for the Plan Year as permitted
under Section 416(d) of the Code. This Section 11.04 shall expire at the end of
the Plan Year which begins in 1988.
11.05 MINIMUM BENEFITS
(a) In the case of a defined benefit plan,
(i) The Accrued Pension of a Participant who is Non-Key
Employee shall not be less than the product of (1), (2) and (3) as
follows:
(1) 2%
(2) Years of Top-Heavy Service (maximum of 10)
(3) Average Top-Heavy Gross Earnings
(ii) For purposes of this Section, Years of Top-Heavy Service
shall mean an Employee's Years of Service, but excluding
(1) Years of Service during a Plan Year which begins
before January 1, 1984;
(2) Years of Service in which the Plan is not Top-Heavy;
and
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(3) Years of Service prior to the Participant's date of
participation in the defined benefit plan.
(iii) For purposes of this Section, Average Top-Heavy Gross
Earnings shall mean an Employee's average monthly Gross Earnings
during the five consecutive Plan Years which produces the highest
average, but excluding Gross Earnings during Plan Years beginning
after the last Plan Year in which the Plan is Top-Heavy.
(iv) The minimum accrued pension described in this Section
shall be payable in the form of a "single life pension." If the
accrued pension is actually paid in any other form, it shall be
adjusted so that it is actuarially equivalent (as determined under
the defined benefit plan) to the "single life pension" form.
(v) In the event the Plan ceases to be Top-Heavy, a
Participant's accrued pension shall not be less than the accrued
pension computed under this Section 11.05.
(b) In the case of a defined contribution plan, the Employer
Contribution Account for the Plan Year of a Participant who is a Non-Key
Employee and who is employed on the last day of the Plan Year (regardless
of whether such Participant completed 1,000 Hours of Service in such Plan
Year) shall be allocated an amount at least equal to the product of (i)
and (ii) as follows:
(i) the Participant's Gross Earnings (while a Participant) for
the Plan Year;
(ii) the lesser of (1) 3% and (2) the allocation of Employer
contributions and forfeitures (under all defined contribution plans
in the Aggregation Group) for such Plan Year on behalf of the most
highly benefited Key Employee, expressed as a percentage of such
Employee's Earnings (not in excess of $200,000 or such higher amount
as permitted under Code Section 416(d)[Code Section 401(a)(17) for
Plan Years beginning after December 31, 1988]). Item (2) shall not
be applicable if any of the defined contribution plans required to
be included in the Aggregation Group enables a defined benefit plan
required to be included in the Aggregation Group to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
To the extent it does not conflict with the "allocation" formula
under the defined contribution plan, the minimum allocation required under
this subsection (b) shall be satisfied by first allocating the Employer
contribution for the Plan Year towards the minimum allocation. This would
generally be true in the case of a defined contribution plan which is not
subject to Section 412 of the Code (relating to minimum funding rules).
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For example, an integrated profit sharing plan would apply the Employer
contribution first to the minimum allocation under this subsection (b),
and then to the "integrated" portion of the plan.
If the Employer contribution is entirely allocated under the terms
of the allocation formula under the defined contribution plan, any
additional amount necessary to satisfy the minimum allocation required
under this subsection (b) shall be contributed by the Employer.
For purposes of this subsection (b), Employer contributions
attributable to a salary reduction or similar arrangement shall not be
taken into account for Plan Years beginning before 1985. For Plan Years
beginning after 1984 and before 1989, such contributions shall offset the
minimum Benefits required pursuant to this Article. For Plan Years
beginning after 1988, such contributions may not be used to offset the
minimum Benefits required pursuant to this Article.
For purposes of this subsection (b), "matching contributions" (as
defined in Section 401(m)(4)(A) of the Code) used to satisfy the
requirements of Sections 401(k) and (m) of the Code may not be used to
offset the minimum Benefits required pursuant to this Article for Plan
Years beginning after 1988.
(c) The defined benefit plan minimum described in subsection (a) may
be satisfied by one or a combination of defined benefit plans. In
addition, Participants covered only under a defined benefit plan shall
receive the defined benefit minimum.
(d) The defined contribution plan minimum described in subsection
(b) may be satisfied by one or a combination of defined contribution
plans. In addition, Participants covered only under a defined contribution
plan shall receive the defined contribution minimum.
(e) If a Participant is covered under both a defined benefit plan
and a defined contribution plan, the minimum benefit requirements of this
Section 11.05 may be satisfied by one of the following methods (in lieu of
subsections (a), (b), (c) or (d)), as elected in the Adoption Agreement:
(i) The Participant receives only the minimum described in
subsection (a).
(ii) The Participant receives the minimum described in
subsection (a) and the vested Benefit under the defined benefit plan
is offset by the annuitized value of the vested Benefit under the
defined contribution plan (i.e. "floor offset").
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(iii) No special minimums are required, provided that a
comparability analysis (using rules and regulations prescribed by
the Internal Revenue Service) proves that total benefits (on an
aggregated basis for all Participants) under both the defined
benefit and defined contribution plans are at least equal to the
defined benefit minimum (on an aggregated basis for all
Participants).
(iv) The Participant receives contributions and forfeitures
under the defined contribution plan equal to 5% of his Gross
Earnings (while a Participant) for the Plan Year.
11.06 CODE SECTION 415 LIMITATIONS
If the Plan is Top-Heavy, the provisions of the Plan containing maximum
benefits under Section 415 of the Code shall be amended by substituting "1.0"
for "1.25" wherever it appears and substituting "$41,500" for "$51,875" wherever
it appears.
This Section 11.06 shall not be effective if the exceptions of Sections
416(h)(2) and (3) of the Code are met.
11.07 TERMINATED (OR PARTIALLY TERMINATED) DEFINED BENEFIT PLANS
Notwithstanding anything in this Plan to the contrary, in the case of a
defined benefit plan which has been terminated (or partially terminated with
respect to a group of Participants) and is in the process of distributing all
affected plan assets (or transferring such assets to another plan) as soon as
administratively feasible,
(a) minimum benefits under Section 11.05(a) shall cease to accrue as
of the date of plan termination, and
(b) for purposes of Section 11.05(e), such terminated defined
benefit plan shall be deemed to have ceased to exist as of the date of
plan termination, so that the Participant will not be considered to be
covered under both a defined benefit plan and a defined contribution plan.
This Section 11.07 shall not be effective if the Employer maintains
another defined benefit plan which is a member of the Top-Heavy Group.
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ARTICLE XII
THE TRUST
For the purpose of providing for the payment of Benefits under the Plan
and to hold, invest and administer the assets of the Plan, the Company shall
enter into one or more Trust Agreements with one or more Trustees, or in lieu
thereof, or in addition thereto, one or more contracts with a legal reserve life
insurance company.
The Company shall have the responsibility of selecting the Trustee,
monitoring the Trustee's performance, removing the Trustee, selecting
successors, and determining the form and the terms of the agreement to be
entered into with the Trustee. All contributions under this Plan shall be paid
to the Trustee and deposited in the Trust.
All contributions made by an Employer are expressly conditioned upon the
continued qualification of the Plan under the Code, including any amendments to
the Plan, and upon the deductibility (unless the Employer is a "tax-exempt"
organization) under Section 404 of the Code of such contributions made to
provide Plan benefits. All assets of the Trust, including Investment Income,
shall be retained for the exclusive benefit of Members and Beneficiaries and
shall be used to pay benefits to such persons or to pay administrative expenses
of the Plan and Trust to the extent not paid by an Employer and shall not revert
to or inure to the benefit of any Employer.
Notwithstanding anything herein to the contrary, if permitted under the
Code or regulations thereunder, upon an Employer's request, any contribution
which was made by a mistake of fact, or was conditioned upon initial
qualification of the Plan (but only if the application for qualification was
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), or upon the deductibility of the contribution
under Section 404 of the Code, shall be returned to the Employer within one year
after the payment of the contribution, the denial of the initial qualification,
or the disallowance of the deduction (to the extent disallowed), whichever is
applicable.
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The assets of the Trust may be invested in any investment permitted by law
for the investment of the assets of an employee benefit trust in accordance with
the terms of the Trust Agreement. In particular, up to 100% of Plan assets may
be invested and reinvested in qualifying common stock, preferred stock, bonds,
notes, other securities and/or real property of the Employer to the extent
permitted under ERISA.
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ARTICLE XIII
ADMINISTRATION
13.01 FIDUCIARY RESPONSIBILITY
The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically granted or delegated to
them under the Plan and the Trust. It is intended under the Plan and the Trust
that each Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities, and obligations as provided for under this
Plan and the Trust, and shall not be responsible for any act or failure to act
of another Fiduciary.
A Fiduciary from time to time may allocate or delegate to any other
persons or organizations any of its rights, powers, duties and responsibilities,
except Trustee duties. Any such allocation or delegation shall be made in
writing.
Wherever in the Plan or the Trust Agreement it is provided that a person
or entity has the power to appoint another person or entity with discretionary
authority or control respecting the operation or administration of the Plan or
the Trust, the responsibility of the appointing party with respect to that
appointment is limited to the selection of the appointee and the periodic review
of the performance of the appointee. Any violation of the responsibilities by
the appointee will not be considered a breach by the appointing party.
13.02 RESPONSIBILITY OF TRUSTEE
The Trustee shall be the named Fiduciary for asset management, and shall
have exclusive authority and discretion to manage and control the assets of the
Plan, except to the extent that such authority and discretion for all or a
specified portion of the Plan's asset is delegated and allocated by the
Administrator to one or more Investment Managers or assumed by the
Administrator. The Trustee and Investment Manager shall not be liable for the
acts or omissions of the Administrator or the Employers, nor shall they be
liable or responsible for the portion or portions of the Trust managed by
persons other than themselves.
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In the event all or a portion of the Trust is invested in the general
account of an insurance company pursuant to a deposit administration contract
(or contract of like purpose), the Administrator shall be the named Fiduciary
with respect to the portion of the Trust so invested; provided, however, the
insurance company shall be the Investment Manager with respect to any portion of
the Trust invested in one or more separate accounts (as distinguished from the
general account) of the insurance company pursuant to such contract. The
insurance company will hold such portion or portions of the Trust in accordance
with the contract and will keep records of all investments, receipts,
disbursements, transfers, and other transactions, and will make available such
information as is required to be made available by ERISA and by regulations
thereunder to the Administrator in order to allow it to make such reports as are
required by ERISA. The insurance company will provide such valuations of the
Plan's assets as may be made in accordance with the terms of the contract in
order to enable the Administrator to comply with ERISA.
13.03 APPOINTMENT OF ADMINISTRATOR
The Plan shall be administered by the Administrator who shall be appointed
by and serve at the pleasure of the Company. The Administrator may resign by
giving notice in writing to the Company and the Trustee.
All usual and reasonable expenses of the Administrator may be paid in
whole or in part by the Employers, and any expenses not paid by the Employers
shall be paid by the Trustee out of the principal or income of the Trust. If an
Employee serves as the Administrator, either individually or jointly with
others, he shall not receive compensation with respect to his services as such.
13.04 AUTHORITY OF ADMINISTRATOR
The Administrator is the named Fiduciary to administer the Plan. The
Administrator shall have authority to control and manage the operation and
administration of the Plan and shall discharge its duties with respect to the
Plan solely in the interest of the Members and Beneficiaries. The Administrator
shall have all powers necessary to exercise its authority and discharge its
responsibilities, including, but not by way of limitation, the following:
(a) To decide all questions relating to eligibility and to determine
the amount, manner and time of payment of any Benefits hereunder;
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(b) To maintain in conjunction with the Employers all necessary
records for the administration of the Plan and Trust other than those
maintained by the Trustee or other Fiduciaries;
(c) To certify to the Trustee the amount and kind of Benefits
payable under the Plan and authorize all Benefit disbursements by the
Trustee from the Trust;
(d) To appoint and remove any Investment Manager and to periodically
review their performance;
(e) To construe and interpret the Plan and Trust Agreement and to
make and publish such rules for the regulation of the Plan and the Trust
as are not inconsistent with their terms;
(f) To employ one or more persons to render advice with regard to
any responsibility any Fiduciary has under the Plan;
(g) To receive from the Employers, Members and Beneficiaries such
information and prescribe the use of such forms as shall be necessary for
the proper administration of the Plan and the Trust, including procedures
to be followed by distributees in obtaining Benefits;
(h) To prepare and distribute, in such manner as it determines to be
appropriate, information explaining the Plan;
(i) To furnish the Employers, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(j) To delegate, if the Administrator is a committee, to one or more
of its members the rights to act in its behalf in all matters connected
with the administration of the Plan;
(k) To receive and review reports of the financial condition and of
the receipts and disbursements of the Trust from the Trustee;
(l) To appoint and contract with such independent public accountant
or accountants as shall be necessary to comply with the reporting and
disclosure requirements of any applicable federal or state law, or such
legal counsel, actuarial counsel or other counsel as it deems necessary or
advisable in discharging its duties hereunder.
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The Administrator may from time to time allocate or delegate to any
member(s), person(s) or organization(s) any of its rights, powers, duties, and
responsibilities, provided that such allocation or delegation is made to and
accepted in writing by such member(s), person(s), or organization(s). Any such
allocation or delegation shall be reviewed periodically by the Administrator and
shall be terminable upon such notice as the Administrator in its discretion
deems reasonable and proper under the circumstances.
13.05 RULES AND DECISIONS
The Administrator may adopt such rules as it deems necessary, desirable,
or appropriate. When making a determination or calculation, the Administrator
shall be entitled to rely upon information furnished by a Member, Beneficiary,
Employer, the legal counsel of an Employer, the Trustee or Investment Manager.
The Administrator and any representative whom it chooses to assist it to
carry out its responsibilities under the Plan shall have the maximum
discretionary authority permitted by law to interpret, construe, and administer
the Plan, to make determinations regarding Plan participation, enrollment and
eligibility for benefits, to evaluate and determine the validity of benefit
claims, and to resolve any and all claims and disputes regarding the rights and
entitlements of individuals to participate in the Plan and to receive benefits
and payments pursuant to the Plan. The decisions of the Administrator and its
representatives shall be given the maximum deference permitted by law.
13.06 PROCEDURES
The Administrator, if more than one person, may act at a meeting or in
writing without a meeting. Such Administrator shall elect one of its members as
chairman, appoint a secretary, who may or may not be a member, and advise the
Trustee of such actions in writing. The secretary shall keep a record of all
meetings and forward all necessary communications to the Employers and the
Trustee. The Administrator may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs. All decisions of the Administrator
shall be taken by action of a majority of its members including actions at a
meeting or in writing without a meeting. A quorum of the Administrator shall
consist of a majority of members present. A member who is a Participant shall
not vote on any question relating specifically to himself.
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13.07 INFORMATION
To enable the Administrator to perform its functions, the Employers shall
supply full and timely information to the Administrator on all matters relating
to Members, including their Compensation, retirement, death, Termination of
Employment, and the cause thereof, and such other pertinent facts as the
Administrator may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's administration
of the Trust.
13.08 FUNDING POLICY AND METHOD
The Administrator from time to time shall establish a funding policy and
method for carrying out the objectives of the Plan which is consistent with the
requirements of ERISA. In this connection, the Administrator shall consider the
Plan's short and long run financial needs and communicate those requirements to
the Trustee and any Investment Manager.
13.09 APPLICATION FOR BENEFIT AND OTHER FORMS
The Administrator may require a Member or Beneficiary to complete and file
an application for Benefit payments and all such other forms approved by the
Administrator and to furnish all pertinent information requested by the
Administrator. The Administrator may rely upon all such information so furnished
it, including such person's current mailing address.
13.10 CLAIMS PROCEDURE
The Administrator shall make all determinations as to the right of any
person to a Benefit.
Claims shall be made and processed according to the following procedures:
(a) Claims must be in writing and must be delivered to the
Administrator.
(b) The Administrator will act on a claim within a reasonable period
of time after its receipt. Claims shall be acted upon within 90 days after
receipt of the claim by the Administrator, unless special circumstances
require an extension of time. If such an extension of time is required,
written notice of the extension and the special
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circumstances shall be given to the claimant prior to the termination of the
initial 90-day period. In no event shall such extension exceed a period of 90
days from the end of such initial period. Claims not acted upon within the time
prescribed herein shall be deemed denied for purposes of proceeding to the
review stage.
(c) The Administrator shall provide to every claimant whose claim is
denied written notice setting forth in a manner calculated to be
understood by the claimant:
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent Plan provisions on which
the denial is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary;
(iv) An explanation of the Plan's claim review procedure.
(d) The claimant shall be afforded a reasonable opportunity to
appeal a denial of the claim to the Administrator for a full and fair
review. Such appeal must be made in writing upon application to the
Administrator and may not be made more than 60 days following receipt by
the claimant of written notification of denial of his claim. The claimant
or his duly authorized representative shall be permitted to review
pertinent documents and submit issues and comments in writing.
The decision upon review shall be made promptly, and not later than 60
days after receipt of a request for a review, unless special circumstances
require an extension of time for processing, in which case a decision shall be
rendered as soon as possible but not later than 120 days after receipt of a
request for review. If requested, a hearing shall be granted by the
Administrator.
The decision on review shall be in writing and shall include specific
references to the pertinent Plan provisions on which the decision is based.
The Administrator may designate a representative to receive, review and
decide claims in accordance with subparagraphs (a), (b), and (c) of this
Section. However, the Administrator will receive, review and decide all appeals
in accordance with subparagraph (d) of this Section.
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13.11 FACILITY OF PAYMENT
Whenever, in the Administrator's opinion, a person entitled to receive any
payment of a Benefit or installment thereof hereunder is under a legal
disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Administrator may direct the Trustee to make payments to
such person or to his legal representative or to a relative or friend of such
person for his benefit, or the Administrator may direct the Trustee to apply the
payment for the Benefit of such person in such manner as the Administrator
considers advisable. Any payment of a Benefit or installment thereof in
accordance with the provisions of this Section shall be a complete discharge of
any liability for the making of such payment under the provisions of the Plan.
13.12 RECORDS AND REPORTS
The Administrator shall exercise such authority and responsibility as it
deems appropriate in order to comply with ERISA and governmental regulations
issued thereunder relating to maintenance of plan records and filing of such
reports as may be required by federal or state agencies.
13.13 SERVICE OF PROCESS
The Administrator shall be the agent of the Plan for the service of legal
process.
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ARTICLE XIV
AMENDMENTS, ACTION BY EMPLOYER AND MERGERS
14.01 AMENDMENTS
The Company may, by action described in Section 14.02, make from time to
time any amendment (including the termination or partial termination of this
Plan in accordance with Article XV) or amendments to this Plan which do not
cause any part of the Trust to be used for, or diverted to, any purpose other
than the exclusive benefit of Members and their Beneficiaries; provided,
however, that the Company may make any amendment it determines necessary or
desirable, with or without retroactive effect, to comply with the Code and
regulations thereunder.
Except to the extent allowed under regulations, no amendment may be made
which has the effect of:
(a) decreasing the Account of a Member,
(b) eliminating or reducing an early retirement benefit or a
retirement-type subsidy, or
(c) eliminating an optional form of benefit,
with respect to benefits attributable to service before such amendment. In the
case of a retirement-type subsidy, the preceding sentence shall apply only with
respect to a Participant who satisfies (either before or after the amendment)
the pre-amendment conditions for the subsidy.
14.02 ACTION BY EMPLOYER
Any action by the Company, or by any Employer other than the Company, may
be by resolution of its Governing Body, or may be taken by any person or persons
duly authorized by resolution of the Governing Body of such Employer to take
such action. Any Employer may delegate to the Company the authority to act on
its behalf with respect to the administration of
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the Plan or the adoption of such additional amendments to the Plan as may be
required by the Internal Revenue Service.
14.03 SUCCESSOR EMPLOYER
In the event of the dissolution, merger, consolidation, or reorganization
of an Employer, provision may be made by which the Plan and Trust will be
continued by the successor, and, in that event, such successor shall be
substituted for the Employer under the Plan. The substitution of the successor
shall constitute an assumption of Plan liabilities by the successor and the
successor shall have all of the powers, duties and responsibilities of such
Employer under the Plan.
14.04 PLAN ASSETS
In the event of any merger or consolidation of the Plan with, or transfer
in whole or in part of the assets or liabilities of the Trust to, another fund
held under any other plan of deferred compensation maintained or to be
established for the benefit of all or some of the Members of this Plan, the
assets of the Trust applicable to such Members shall be transferred to the other
fund only if:
(a) Each Member would (if either this Plan or the other Plan then
terminated) receive a Benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the Benefit he would have
been entitled to receive immediately before the merger, consolidation or
transfer (if this Plan had then terminated);
(b) Resolutions of the Governing Body of an Employer under this
Plan, and of any new or successor employer of the affected Members, shall
authorize such transfer of assets; and, in the case of the new or
successor employer of the affected Members, its resolutions shall include
an assumption of liabilities with respect to such Member's inclusion in
the new employer's plan; and
(c) Such other plan and fund are qualified under Sections 401(a) and
501(a) of the Code.
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ARTICLE XV
PLAN TERMINATION
15.01 RIGHT TO TERMINATE
The Employers hope and expect to continue the Plan indefinitely.
Nevertheless, the Employers maintain the right to terminate or partially
terminate the Plan with respect to any of its Employees at any time. The
Employers also reserve the right to suspend or to discontinue, partially or
completely, its contributions under the Plan with respect to any of its
Employees at any time. In the event of any dissolution, merger, consolidation,
or reorganization of the Company, the Plan shall terminate and the Trust shall
be liquidated, unless the Plan is continued by a successor to the Company in
accordance with Section 14.03.
15.02 PARTIAL TERMINATION
Upon termination of the Plan with respect to a group of Participants and
Inactive Participants which constitutes a partial termination of the Plan, the
Trustee shall, in accordance with the directions of the Administrator, allocate
and segregate for the benefit of the Participants and Inactive Participants then
or theretofore employed by the Employer with respect to whom the Plan is being
terminated the proportionate interest of such Participants and Inactive
Participants in the Trust as reflected by their Accounts, which shall become
fully vested. In addition, the Trustee shall similarly allocate and segregate
the proportionate interest of affected Former Participants and Beneficiaries in
the Trust as reflected by their vested Accounts. The assets so allocated and
segregated under this Section 15.02 shall be used by the Trustee to pay Benefits
to or on behalf of the preceding individuals in accordance with Section 15.04.
15.03 FORFEITURES UPON PLAN TERMINATION
If any unallocated Forfeiture Accounts exist on the date the Plan is
terminated (because such Forfeiture Accounts have not yet become available for
allocation under Section 5.07, a (Former) Participant's rights to Forfeiture
restoration have lapsed in accordance with Section 4.02(c), or Forfeitures have
not yet been allocated under Section 7.13(i)), such Forfeiture
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Accounts shall be disposed of in accordance with Plan provisions established by
the Company. Such Plan provisions may include (but are not limited to)
provisions that cause Forfeiture Accounts to be (1) allocated to some or all
Participants in a nondiscriminatory manner, (2) used to reduce Employer
contributions required, if any, under the Plan, (3) used to pay administrative
expenses of the Plan and Trust, and/or (4) reverted to an Employer
(notwithstanding any Plan provision to the contrary). In addition, such Plan
provisions (1) may be established at the time the Plan is initially adopted (or
amended and restated) or at the time the Plan is terminated, and (2) shall form
a part of this Plan.
15.04 LIQUIDATION OF THE TRUST FUND
Upon termination of the Plan, the Accounts of all Participants and
Inactive Participants affected thereby shall become fully vested, and the
Administrator shall direct the Trustee to distribute the assets remaining in the
Trust, subject to the restrictions below, after payment of any expenses properly
chargeable thereto, to Participants, Inactive Participants, Former Participants,
and Beneficiaries affected by the termination in proportion to their respective
vested Account balances.
In the case of assets attributable to the Deferred Income Account, the
Qualified Nonelective Contribution Account and the Qualified Matching
Contribution Account, such assets may not be distributed unless (1) the Employer
or an Affiliated Company does not establish or maintain another defined
contribution plan [other than (i) an "ESOP" (as defined in Section 4975(e) or
409 of the Code), (ii) a "SEP" (as defined in Section 408(k) of the Code), or
(iii) a plan in which fewer than 2% of the Participants of this Plan are
eligible to participate at any time 12 months before or 12 months after the
termination of this Plan] at any time during the 12-month period following the
date of final distribution of all such assets, and (2) with respect to
distributions after March 31, 1988, the distribution is a "lump sum
distribution" (as defined in Section 401(k)(10)(B) of the Code).
If the assets attributable to the Deferred Income Account, the Qualified
Nonelective Contribution Account and the Qualified Matching Contribution Account
cannot be distributed because the above requirements are not satisfied, such
assets shall first be transferred (if possible) to such other defined
contribution plan. Then the assets attributable to the remaining Accounts shall
be distributed in accordance with the first paragraph of this Section. This
sequence of events shall be followed to preserve any favorable tax and rollover
rules under Section 402 of the Code.
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15.05 MANNER OF DISTRIBUTION
Any distribution may be made, in whole or in part, in cash, securities or
other assets in kind as the Administrator in its sole discretion shall
determine. All non-cash distributions shall be valued at fair market value at
date of distribution. In addition, notwithstanding Section 8.02(b)(iv),
distributions with a value in excess of $3,500 may:
(a) in the case where the Employer or an Affiliated Company
maintains no other defined contribution plan (other than an "ESOP"), be
distributed to the Participant without his/her consent; or
(b) in the case where the Employer or an Affiliated Company
maintains another defined contribution plan (other than an "ESOP"), be
transferred to such other plan if the Participant does not consent to an
immediate distribution.
15.06 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS
In the event of the complete discontinuance of contributions to the Plan
by an Employer, the Accounts of all Participants and Inactive Participants
employed by such Employer shall as of the date of such discontinuance become
nonforfeitable.
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ARTICLE XVI
ADOPTION AND WITHDRAWAL BY OTHER ORGANIZATIONS
16.01 PROCEDURE FOR ADOPTION
(a) Affiliated Company: Subject to the provisions of Section 16.03,
an Affiliated Company now in existence or hereafter formed or acquired,
which is not already an Employer under this Plan, and which is otherwise
legally eligible may, with the consent and approval of the Company, adopt
the Plan and Trust, for all or any classification of persons in its
employment, and thereby from and after the specified effective date become
an Employer under this Plan. Such adoption shall be effectuated and
evidenced by a formal resolution of the Governing Body of such Affiliated
Company. The adopting resolution may contain such specific changes and
variations in the Plan or the Trust as may be acceptable to the Company
and the Trustee. The adopting resolution of an Affiliated Company shall
become, as to such Affiliated Company and its Employees, a part of this
Plan as then in effect. It shall not be necessary for such adopting
Affiliated Company to execute the Plan or Trust as then in effect. The
effective date of the Plan for any such adopting Affiliated Company shall
be that stated in the adopting resolution and from and after such
effective date such adopting Affiliated Company shall assume all the
rights, obligations and liabilities of an Employer under the Plan and
Trust.
(b) Acquisition of Entity Which Becomes Part of Employer: In the
event the Employer acquires an entity which becomes part of the Employer
(as opposed to the situation where the acquired entity becomes a separate
Affiliated Company as described in subsection (a) above), service
performed for such prior entity shall not constitute service performed for
the Employer unless the Company amends the Plan to provide otherwise. Such
amendment may also contain other changes and variations in the Plan or the
Trust as are necessary to carry out the Company's intent.
16.02 WITHDRAWAL
Any participating Employer, by action of its Governing Body and notice to
the Company and Trustee, may withdraw from the Plan and Trust at any time
without affecting other
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Employers not withdrawing by complying with the provisions of the Plan and
Trust. A withdrawing Employer may arrange for the continuation by itself or its
successor of this Plan and Trust in separate forms for its own Employees, with
such amendments if any, as it may deem proper, and may arrange for continuation
of the Plan and Trust by merger with an existing plan and fund and transfer of
Trust assets.
16.03 ADOPTION CONTINGENT UPON AND CONTINUED QUALIFICATION
The adoption of this Plan and its related Trust by an Affiliated Company
as provided in Section 16.01(a) is hereby made contingent and subject to the
condition precedent that the Plan after its adoption by the Affiliated Company
continues to meet all the statutory requirements for qualified plans, including
but not limited to Sections 401(a) and 501(a) of the Code, as amended. The
Company may request a determination from the appropriate District Director of
Internal Revenue to the effect that the Plan and Trust herein set forth, or as
amended before the receipt of such letter, continues to meet the requirements of
the applicable federal statutes for tax qualification purposes after the
adoption of the Plan by the Affiliated Company. If such an approval letter is
denied, such adoption shall become void and inoperative and any contributions
made by or for such organization shall be promptly refunded by the Trustee.
Furthermore, if the Plan or the Trust in its operation becomes disqualified or
would become disqualified under the Code for any reason because of the Plan's
adoption by any Employer, the portion of the Trust allocable to the Employees of
such Employer shall be segregated as soon as is administratively feasible,
pending either the prompt
(a) correction of the conditions which would cause the
disqualification to the satisfaction of the Internal Revenue Service, so
as not to affect the continued qualified status of the Plan;
(b) requalification of the Plan and Trust;
(c) withdrawal of such Employer from this Plan and Trust and a
continuation by itself or its successor, of a plan and trust separately
from this Plan and Trust, or by merger with another existing plan and
fund, with a transfer of said segregated portion of Trust assets, as
provided by Section 16.02; or
(d) termination of the Plan and Trust as to such Employer and its
Employees.
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ARTICLE XVII
MISCELLANEOUS
17.01 NONGUARANTEE OF EMPLOYMENT
Nothing contained in this Plan shall be construed as a contract of
employment between an Employer and any Employee, or as a right of any Employee
to be continued in the employment of an Employer, or as a limitation of the
right of an Employer to discharge any of its Employees, with or without cause.
17.02 RIGHT TO TRUST ASSETS
No Employee shall have any right to, or interest in, any assets of the
Trust upon termination of his employment or otherwise, except as provided from
time to time under this Plan, and then only to the extent of the Benefits
payable under the Plan to such Employee out of the assets of the Trust.
17.03 NONALIENATION OF BENEFITS
Except as otherwise provided in the Plan, Benefits payable under this Plan
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, including any such liability which is for
alimony or other payments for the support of a spouse or former spouse, or for
any other relative of the Employee, prior to actually being received by the
person entitled to the Benefit under the terms of the Plan; and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, or
otherwise dispose of any right to Benefits payable hereunder shall be void. The
Trust shall not in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements, or torts of any person entitled to Benefits
hereunder. The provisions of this Section shall not apply in the case of a
Qualified Domestic Relations Order.
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17.04 GOVERNING LAW
Except as otherwise specifically provided under any federal law applicable
to this Plan, this Plan shall be construed and applied according to the laws of
the State specified in the Adoption Agreement.
17.05 BONDING, INSURANCE AND INDEMNITY
(a) Bonding: To the extent required under ERISA or any other federal
law of similar import, the Company shall obtain, pay for, and keep current
a bond or bonds with respect to the Administrator and each Employee who
receives, handles, disburses, or otherwise exercises custody or control of
any of the assets of the Plan.
(b) Insurance: The Company may, in its discretion obtain, pay for,
and keep current a policy or policies of insurance, insuring the
Administrator, the members of its Governing Body, or each other Employer
and Employees to whom any fiduciary responsibility with respect to the
administration of the Plan has been delegated, against any and all
liabilities, costs and expenses incurred by such persons, including
attorney's fees, as a result of any act, or omission to act, in connection
with the performance of their duties, responsibilities and obligations
under the Plan and any applicable federal or state law.
(c) Indemnity: If the Company does not obtain, pay for and keep
current any type of insurance policy or policies referred to in subsection
(b), or if such insurance is provided but any of the parties referred to
in subsection (b) above incur any liabilities, costs or expenses which are
not covered or exceed the limits under such policies, then, in either
event, the Employers shall, to the extent permitted by law, indemnify and
hold harmless such parties against any and all liabilities, costs and
expenses incurred by such parties in performing their duties and
responsibilities under this Plan, including attorney's fees, provided such
party or parties were acting in good faith within what was reasonably
believed to have been in the best interests of the Plan and its
Participants.
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17.06 ADOPTION CONTINGENT UPON INITIAL AND CONTINUED QUALIFICATION
The adoption of this Plan and its related Trust by the Employers is hereby
made contingent and subject to the condition precedent that the Plan and Trust
meet all the statutory requirements for qualified plans, including but not
limited to Sections 401(a) and 501(a) of the Code. The Employers may request an
initial letter of determination from the appropriate District Director of
Internal Revenue to the effect that the Plan and Trust, as herein set forth or
as amended before the receipt of such letter, meets the requirements of the
applicable federal statutes for tax qualification purposes for the Employers and
its covered Employees. If the request for initial qualification is denied, the
adoption shall become void and inoperative and any contributions made by the
Employers shall be returned to the Employers within one year after the date of
the denial, but only if the request for initial qualification was 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.
17.07 TRANSFER OF ASSETS
This Plan specifically permits a transfer from the Trust of a Member's
Account to another qualified retirement plan.
17.08 SEVERABILITY CLAUSE
If any portion of this Plan shall be rendered invalid by a court of
competent jurisdiction, such rendering shall not impair the validity of the
remaining portions of the Plan.
17.09 GENDER, TENSE AND HEADINGS
Whenever any words are used in the masculine gender, they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply. Whenever any words used herein are in the singular
form, they shall be construed as though they were also used in the plural form
in all cases where they would so apply.
Headings of Articles, Sections and subsections as used herein are inserted
solely for convenience and reference and constitute no part of the Plan.
XVII-3
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement of Haskel International, Inc. on Form S-8 of our report
dated August 23, 1996, appearing in the Annual Report on Form 10-K of Haskel
International, Inc. for the year ended May 31, 1996.
/s/ Deloitte & Touche LLP
Los Angeles, California
June 6, 1997
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
August 23, 1996 included in Haskel International, Inc.'s Form 10-K for the year
ended May 31, 1996 and to all references to our firm included in this
Registration Statement.
/s/ Price Waterhouse
Price Waterhouse
Chartered Accountants
and Registered Auditors
Newcastle upon Tyne
United Kingdom
June 4, 1997
