AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY , 1996
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
TEAM RENTAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------
Delaware 59-3227576
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
125 BASIN STREET
SUITE 210
DAYTONA BEACH, FLORIDA 32114
(904) 238-7035
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------------------
TEAM RENTAL GROUP, INC. Section 401(K) PROFIT SHARING PLAN
(FULL TITLE OF THE PLAN)
---------------------------
SANFORD MILLER
125 BASIN STREET
SUITE 210
DAYTONA BEACH, FLORIDA 32114
(904) 238-7035
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------------------
COPY TO:
JEFFREY M. STEIN
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
(404) 572-4600
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO AGGREGATE PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share...... 35,000 $14.63 $512,050 $177
Interests in Team Rental Group, Inc.
Section 401(k) Profit Sharing Plan............... (2) (2) (2) (2)
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) based on the basis of the average of the high and
low sales prices per share of Common Stock of Team Rental, Inc. as
reported on the Nasdaq National Market on May 22, 1996.
(2) Pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers interests to be offered or sold
pursuant to the employee benefit plan described herein.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents have been previously filed by Team Rental
Group, Inc. (the "Company") with the Securities and Exchange Commission and
are hereby incorporated by reference into this Registration Statement as of
their respective dates:
(a) Annual Report on Form 10-K for the year ended December 31,
1995;
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 since December 31,
1995; and
(c) The description of the Common Stock of the Company included
in the Company's Registration Statement on Form 8-A, dated
April 24, 1994.
All documents filed by the Company or the Team Rental Group, Inc.
Section 401(k) Profit Sharing Plan (the "Plan") pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration
Statement that indicates that all securities offered hereunder have been
sold or that deregisters all such securities then remaining unsold shall be
deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Inapplicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
("DGCL") provides that a corporation has the power to indemnify any director
or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) against the
expenses, (including attorney's fees), judgments, fines or amounts paid in
settlement actually and reasonably incurred by them in connection with the
defense of any action by reason of being or having been directors or officers,
if such person shall have acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, provided that such
person had no reasonable cause to believe his conduct was unlawful, except
that, if such action shall be in the right of the corporation, no such
indemnification shall be provided as to any claim, issue or matter as to which
such person shall have been judged to have been liable to the corporation
unless and to the extent that the Court of Chancery of the State of Delaware,
or any court in which such suit or action was brought, shall determine upon
application that, in view of all of the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as such court
shall deem proper.
-1-
<PAGE>
As permitted by Section 102(b)(7) of the DGCL, the Amended and
Restated Certificate of Incorporation of the Company (the "Restated
Certificate of Incorporation") provides that no director shall be liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director other that (a) for breaches of the director's duty of
loyalty to the Company and its stockholders, (b) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (c) for the unlawful payment of dividends or unlawful stock purchases or
redemptions under Section 174 of the DGCL, and (d) for any transaction from
which the director derived an improper personal benefit.
The Company's Bylaws provide indemnification of the Company's
directors and officers, both past and present, to the fullest extent permitted
by the DGCL, and allow the Company to advance or reimburse litigation expenses
upon submission by the director or officer of an undertaking to repay such
advances or reimbursements if it is ultimately determined that indemnification
is not available to such director or officer pursuant to the Bylaws. The
Company's Bylaws will also authorize the Company to purchase and maintain
insurance on behalf of an officer or director, past or present, against any
liability asserted against him in any such capacity whether or not the Company
would have the power to indemnify him against such liability under the
provisions of the Restated Certificate of Incorporation or Section 145 of the
DGCL.
The Company has entered into indemnification agreements with each of
its directors and certain of its executive officers. The indemnification
agreements require the Company, among other things, to indemnify such
directors and officers against certain liabilities that may arise by reason of
their status or service as directors or officers (other than liabilities
arising from willful misconduct of a culpable nature), and to advance their
expenses incurred as a result of any preceding against them as to which they
could be indemnified.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Inapplicable.
The undersigned Registrant hereby undertakes to submit the Plan and
any amendment thereto to the Internal Revenue Service ("IRS") in a timely
manner and will make all changes made by the IRS in order to qualify the Plan
ITEM 8. EXHIBITS.
4.1 -- Amended and Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1, File No. 33-78274).
4.2 -- Bylaws of the Company (incorporated by reference to Exhibit 3.2 to
the Company's Registration Statement on Form S-1, File No. 33-
78274).
10.1 -- Prototype Defined Contribution Retirement Plan
10.2 -- Prototype Defined Contribution Retirement Plan Adoption Agreement
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of Michael Silver & Company
-2-
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers
or sales are being made, a post-effective
amendment to this Registration Statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date
of the Registration Statement (or the
most recent post-effective amendment
thereof) which, individually or in the
aggregate, represent a fundamental change
in the information set forth in the
Registration Statement; 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;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That for purposes of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered
therein, and the offering of such securities at
that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is
-3-
<PAGE>
against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the
final adjudication of such issue.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this Registration Statement by reference
from the Company's Annual Report on Form 10-K for the year ended December 31,
1995 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The financial statements of BRAC-OPCO, Inc. as of December 31, 1994
and 1993, and the related statements of income, stockholders equity, and cash
flows for each of the three years in the period ended December 31, 1994
included in the Company's Form 8-K/A dated October 20, 1995 and incorporated
by reference herein have been audited by Coopers & Lybrand, L.L.P.,
independent accountants, as stated in the report thereon included in such Form
8-K/A dated October 20, 1995 and incorporated by reference in reliance upon
the authority of that firm as experts in accounting and auditing.
The financial statements of Arizona Rent-A-Car Systems, Inc. as of
February 29, 1996 and February 28, 1995 and 1994 and for the three years ended
February 29, 1996 and February 28, 1995 and 1994 included in the Company's
Form 8-K/A dated February 27, 1996 and incorporated herein by reference have
been audited by Michael Silver & Company, independent accountants, as stated
in their report thereon included in such Form 8-K/A dated February 27, 1996
and incorporated herein by reference upon the authority of that firm as
experts in accounting and auditing.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia on the 29th day of May,
1996.
TEAM RENTAL GROUP, INC.
By: /s/ Sanford Miller
-------------------
Sanford Miller
Chairman of the Board and
Chief Executive Officer
-5-
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sanford Miller and John Kennedy and
each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for such person and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement, 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 or necessary to be done in and about the premises, as fully and to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
as of the 29th day of May, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Sanford Miller Chairman of the Board and Chief Executive Officer
------------------- (Principal Executive Officer) and Director
Sanford Miller
/s/ John P. Kennedy President, Chief Operating Officer, Director
---------------------
John P. Kennedy
/s/ Jeffrey D. Congdon Chief Financial Officer (Principal Financial and
----------------------- Accounting Officer), Secretary and
Jeffrey D. Congdon Director
/s/ Ronald D. Agronin Director
---------------------
Ronald d. Agronin
/s/ Dr. Stephen L. Weber Director
------------------------
Dr. Stephen L. Weber
/s/ James Calvano Director
--------------------------
James Calvano
/s/ Jeffrey R. Mirkin Director
--------------------------
Jeffrey R. Mirkin
/s/ Alan D. Liker Director
--------------------------
Alan D. Liker
</TABLE>
-6-
<PAGE>
Pursuant to the requirements of the Securities Act, the trustee
of the Team Rental Group, Inc. Section 401(k) Profit Sharing Plan has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia
on the 29th day of May, 1996.
TEAM RENTAL GROUP, INC.
Section 401(k) PROFIT SHARING PLAN
BY: /s/ Sanford Miller
----------------------------
Name: Sanford Miller
PLAN TRUSTEE
-7-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
No. Exhibit Numbered Page
<S> <C> <C>
4.1 -- Amended and Restated Certificate of Incorporation
of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement
on Form S-1, File No. 33-78274).
4.2 -- Bylaws of the Company (incorporated by reference
to Exhibit 3.2 to the Company's Registration
Statement on Form S-1, File No. 33-78274).
10.1 -- Prototype Defined Contribution Retirement Plan
10.2 -- Prototype Defined Contribution Retirement Plan
Adoption Agreement
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Coopers & Lybrand L.L.P.
23.3 -- Consent of Michael Silver & Company
</TABLE>
-8-
MCDONALD & COMPANY SECURITIES, INC.
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN
Basic Plan Document 01
February 1, 1996
<PAGE>
McDonald & Company Securities, Inc.
Prototype Defined Contribution
Retirement Plan
Table of Contents
Page
Article I. Preliminary Provisions
1.1 Intent of Plan 1
1.2 Interpretation 1
1.3 Nonguarantee of Employment or Other Benefits 1
1.4 Applicable Law; Severability 1
Article II. Definitions 2
Article III. Participation
3.1 Computation of Eligibility Service 14
a. Eligibility Computation Period
b. Service with Predecessor Employer
3.2 Commencement of Participation 14
a. At Effective Date
b. After Effective Date
3.3 Termination of Participation 14
3.4 Participation after Reemployment 14
3.5 Participation upon Return to Eligible Class 15
3.6 Participation by Employees of Controlled 15
or Affiliated Employers
3.7 Employee Transfers 15
3.8 Participation by Owner-employees of 15
More than One Trade or Business
Article IV. Employer Contributions
4.1 Contributions 17
4.2 Allocation to Individual Participant 17
Accounts
4.3 Return of Employer Contributions 17
4.4 Forfeitures 18
a. Treatment and Allocation of Forfeited
Amounts
b. Restoration of Forfeited Amounts
4.5 Limited Effect of Allocation 19
4.6 Limitation on Allocations 19
Article V. Employee Contributions
5.1 Voluntary Employee Contributions Not 23
Permitted
5.2 Rollover Contributions 23
5.3 Transferred Contributions 23
<PAGE>
Article VI. 401(k) Arrangement
6.1 Definitions 25
6.2 Participation 27
6.3 Elective Deferrals 27
a. Compensation Reduction Election
b. Elective Deferral Contributions
c. Limitation on Elective Deferral
Contributions
d. Distribution of Excess Deferrals
e. Actual Deferral Percentage Test
f. Distribution of Excess Contributions
6.4 Matching Contributions; Qualified 30
Matching Contributions
a. Forfeitures and Vesting of Matching
Contributions
b. Limitation on Matching Contributions
c. Distribution or Forfeiture of Excess
Aggregate Contributions
6.5 Qualified Nonelective Contributions 33
6.6 Nonforfeitability of Certain Subaccounts 33
6.7 Distribution Requirements 33
6.8 Hardship Distribution 33
6.9 Top-Heavy Requirements 35
Article VII. Accounts and Valuation
7.1 Establishment of Accounts 36
7.2 Establishment of Subaccounts 36
a. Rollover Subaccount
b. Transfer Subaccount
c. Segregated Subaccount
d. Participant Loan Subaccount
e. Deductible Employee Contribution
Subaccount
f. Nondeductible Employee Contribution
Subaccount
g. Matching Contribution Subaccount
h. Qualified Matching Contribution
Subaccount
i. Qualified Nonelective Contribution
Subaccount
j. Elective Deferral Subaccount
7.3 Valuation and Allocation to Accounts 37
Article VIII. Investment of Contributions
8.1 Direction of Investments 39
8.2 Segregation of Accounts Before Retirement 39
8.3 Participant Direction of Investments 39
a. Time and Manner of Investment Direction
b. Cost of Investment
c. Specified Funds
d. Information to be Furnished to Participants
e. Relief of Fiduciary Liability
f. Participant as Investment Director
8.4 Insurance Provisions 41
a. Purchase of Life Insurance Policies
b. Applications
c. Designation of Beneficiary of Insurance
d. Payment of Premiums, Etc.
e. Disposition of Policies upon Termination
f. Additional Provisions as to Insurer
ii
<PAGE>
Article IX. Time and Amount of Distribution
9.1 Normal Retirement 43
9.2 Early Retirement 43
9.3 Late Retirement 43
9.4 Disability Retirement 43
9.5 Death Benefits 43
9.6 Termination, Resignation, or Discharge 43
a. Vested Benefit Amount
b. Determining Service for Vesting
9.7 Time of Payment 44
9.8 Loans 44
a. In General
b. Spousal Consent
c. Default and Foreclosure
d. Limitation on Availability of Loans
e. Limitation on Outstanding Loan
Balance and Repayment
9.9 Withdrawals from Nondeductible Employee 46
Contributions
9.10 Distribution of Certain Subaccounts 46
Article X. Method of Distribution
10.1 Election of Participant Required 47
a. Limited Applicability
b. Payment of Vested Benefits of $3,500.00
or Less
10.2 Distribution Requirements 48
a. General Rules
b. Limits on Distribution Periods
c. Determination of Amount to be Distributed
Each Year
d. Death Distribution Provisions
e. Transitional Rule
10.3 Optional Forms of Benefit 51
10.4 Joint and Survivor Annuity Requirements 52
a. Participants Covered
b. Qualified Joint and Survivor Annuity
c. Qualified Preretirement Survivor Annuity
d. Notice Requirements
e. Safe Harbor Rules
f. Transitional Rules
10.5 Eligible Rollover Distributions 55
a. General
b. Definitions
Article XI. Participating Employers
11.1 Adoption of Plan by Two or More Employers 57
11.2 Contribution to the Plan by Participating 57
Employers
11.3 Allocation of Contributions and Forfeitures 57
11.4 Delegation of Duties 57
11.5 Designation of Agent 57
11.6 Discontinuance of Participation 57
11.7 Use of Identical Trustee 57
Article XII. Top-Heavy Provisions
12.1 Top-Heavy Plan 58
12.2 Top-Heavy Ratio 58
12.3 Top-Heavy Minimum Benefit 59
12.4 Vesting if Plan is Top-Heavy 60
iii
<PAGE>
Article XIII. Amendment, Termination, and Merger
13.l Amendment 61
a. Amendment by Sponsoring Organization
b. Amendment by Employer
c. Internal Revenue Service Approval
d. Limitation on Amendment
e. Amendment of Vesting Schedule
13.2 Termination of Plan 62
a. Termination of Plan by Employer
b. Termination by Death, Disability or
Dissolution
c. Vesting upon Termination
d. Discontinuance of Contributions
13.3 Merger or Consolidation 62
Article XIV. Administration of Plan
14.1 Selection of Plan Administrator 63
14.2 Agents for Plan Administrator 63
14.3 Actions of Plan Administrator 63
14.4 Indemnification of Plan Administrator 63
14.5 Facility of Payment 63
a. Payment to Incapacitated Persons
b. Inability to Locate Payee
14.6 Claims Procedures 63
Article XV. Trust: Duties and Powers of Trustee, Custodian, and
Investment Director
15.1 Single Trust Fund 65
15.2 Records and Reports 65
15.3 Compensation and Expenses of Trustee or Custodian 65
15.4 Agents and Attorneys for Trustee 65
15.5 Powers 65
a. General Power Over Trust Funds
b. Investment Powers
c. Power to Vote Stock
d. Right to Use Nominee
e. Borrowing
15.6 Investment in Mutual Funds, Common Trust Funds,
and Trustee Deposits 66
15.7 Miscellaneous Provisions 67
15.8 Termination of Services of Trustee 67
15.9 Appointment of Custodian 68
15.10 Establishment of Custodial Account 68
15.11 Transmittal of Contributions
to Custodial Account 68
15.12 Disbursements for Custodial Account 68
15.13 Records and Reports from Custodian 68
15.14 Information for Participants; Voting 69
15.15 Transfer, Resignation or Removal of
Custodian 69
15.16 Custodian's Responsibilities and Obligations 69
15.17 Types of Investments 70
15.18 Duties of Investment Director 70
Article XVI. Assignment of Benefits
16.1 Rights not Assignable 72
16.2 Procedures for Reviewing Domestic Relations 72
Orders
iv
<PAGE>
Article XVII. Fiduciary Responsibility
17.1 Prudent Man Rule 74
17.2 Responsibility for Agents 74
17.3 Liability While Not Acting as a Fiduciary 74
17.4 Liability for Breach by Co-fiduciary 74
17.5 Prohibited Transactions 74
Article XVIII. General Provisions
18.1 Participants to Furnish Information 76
18.2 Successors and Assigns 76
18.3 Limitation of Liability 76
18.4 Agency and Court Proceedings 76
18.5 Application for Letter 76
v
<PAGE>
MCDONALD & COMPANY SECURITIES, INC.
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN
BASIC PLAN DOCUMENT 01
INTRODUCTION
By executing the related Adoption Agreement, the Employer hereby
establishes a Prototype Retirement Plan, effective as of the Effective Date
listed in Item 4 of the Adoption Agreement. This Plan shall be known by the
name set forth in the Adoption Agreement, and consists of the provisions of
this document together with the Adoption Agreement.
Article I: Preliminary Provisions
1.1 Intent of Plan: The Employer intends to establish a plan of retirement
benefits for its eligible Employees, for the exclusive benefit of Participants
and their Beneficiaries. This Plan is intended to qualify as a retirement plan
under applicable provisions of the Internal Revenue Code of 1986 (the Code).
1.2 Interpretation: This Plan shall be interpreted and administered in a manner
consistent with the requirements of the Code and the Employee Retirement Income
Security Act of 1974 (ERISA). All discretionary powers granted to any party
under this Plan shall be exercised in a nondiscriminatory manner. All
provisions of this document and the Adoption Agreement shall be interpreted so
as not to discriminate in favor of officers, shareholders, Highly-compensated
Employees, Owner-employees or Self-employed Individuals.
1.3 Nonguarantee of Employment or Other Benefits: Neither this Plan nor any
payment of benefits shall be construed to create a contract of employment or in
any way affect the right of Employer to suspend, discharge or discipline any
Employee, nor shall it give any Participant or other person any legal or
equitable right against the Employer, Plan Administrator, Investment Director,
Sponsoring Organization, or Custodian except as may be specifically provided by
the Plan or by federal law.
1.4 Applicable Law; Severability: The Plan shall be construed and its validity
determined according to the laws of the State of Ohio to the extent they are
not preempted or superseded by ERISA or other applicable federal law. If any
provision of this Plan is held illegal or invalid for any reason, this
illegality or invalidity shall not affect the remaining parts of the Plan, and
it shall be construed and enforced as if the illegal or invalid provision had
never been included in the Plan.
<PAGE>
Article II: Definitions
The following words and phrases shall have the meaning set forth below
when capitalized and used in the Plan or the Adoption Agreement, unless the
context clearly indicates otherwise. Where appearing in the Plan or Adoption
Agreement, the masculine shall include the feminine, and the singular shall
include the plural, and vice versa, unless the context clearly indicates
otherwise.
2.1 Account means an Account established and held by the Trustee for an
individual Participant, as described in Article VII. Unless the context clearly
indicates otherwise, the term "Account" shall include any and all subaccounts
established and held by the Trustee for the Participant.
2.2 Accounting Period means the period used by the Employer for federal income
tax or federal tax reporting purposes.
2.3 Accrued Benefit means the aggregate value of the Participant's Account
balance derived from Employer contributions.
2.4 Adoption Agreement means the Agreement signed by Employer, the Trustee, and
the Sponsoring Organization under which Employer adopted this Plan, and which
shall be considered a part of this Plan.
2.5 Annual Additions means the sum of the following amounts credited to a
Participant's Account for the Limitation Year:
a. Employer contributions;
b. Employee contributions;
c. forfeitures;
d. amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Section 415(1)(2) of the Code, which
is part of a pension or annuity plan maintained by the Employer;
e. amounts derived from contributions paid or accrued after December
31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits, allocated to the
separate account of a Key Employee, as defined in Section
419A(d)(3) of the Code, under a welfare benefit fund, as defined in
Section 419(e) of the Code, maintained by the Employer; and
f. allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections 4.6(a)(3) or
4.6(b)(5) in the Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year.
2.6 Annuity Starting Date means the first day of the first period for which an
amount is paid as an annuity or any other form.
2.7 Applicable Life Expectancy means the Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the Participant (or
Designated Beneficiary) as of the Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first calculated. If Life
Expectancy is being recalculated, the Applicable Life Expectancy shall be the
life expectancy 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 10.1 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 Participant's death with the
Participant's remaining interest, the applicable calendar year is the year of
purchase.
2
<PAGE>
2.8 Beneficiary means a person who will actually receive benefits from this
Plan after and because of a Participant's death. The Beneficiary of a
Participant shall be his Designated Beneficiary at the time of his death. If
the Participant has not designated a beneficiary, or if his beneficiary
designation does not comply with the requirements of Section 10.4, the
Participant's Beneficiary shall be the first of the following groups in which
there are any survivors: the Participant's Spouse on the date of his death, the
Participant's children, the Participant's grandchildren, the Participant's
parents, or the Participant's estate.
2.9 Break in Service means a 12-consecutive month period (computation period)
during which the Participant does not complete more than 500 Hours of Service
with the Employer.
2.10 Code means the Internal Revenue Code of 1986, as amended, and as it is
hereafter amended, and any Regulations promulgated thereunder.
2.11 Compensation means a Participant's Earned Income, wages, salaries, and
fees for professional services and other amounts received for personal services
actually rendered in the course of employment with the Employer maintaining the
Plan (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, and reimbursements or other expense
allowances under a nonaccountable plan (as described in Regulation Section
1.62-2(c)), and excluding 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, or any distributions from a plan of deferred
compensation;
b. Amounts realized from the exercise of a nonqualified stock option,
or when restricted stock (or property) held by the Employee either
becomes freely transferable 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 (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in
Section 403(b) of the Code (whether or not the contributions are
actually excludible from the gross income of the Employee).
Compensation for a Limitation Year is the Compensation actually paid or
includible in gross income during such Limitation Year. For Limitation Years
beginning after December 31, 1991, for purposes of applying the limitations of
this Section, Compensation for a Limitation Year is the Compensation actually
paid or made available in gross income during such Limitation Year.
Notwithstanding the preceding sentences, Compensation for a Participant
in a defined contribution plan who is permanently and totally disabled (as
defined in Section 22(e)(3) of the Internal Revenue Code) is the Compensation
such Participant would have received for the Limitation Year if the Participant
had been paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled. Such imputed Compensation 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. Compensation for purposes of
determining allocations or other benefits under this Plan is defined in Section
2.49, Plan Compensation.
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2.12 Custodial Account means the account established by the Trustee with the
Custodian (if the Employer has designated a Custodian) to maintain and invest
the assets of the Plan. If the Employer has designated a Custodian and if the
Employer has designated each Participant as the Investment Director in Item 9
of the Adoption Agreement, the Trustee shall establish a separate Custodial
Account for each Participant's Account.
2.13 Custodian means the entity (if any) named by the Employer in Item 14 of
the Adoption Agreement.
2.14 Date of Employment means the date on which an individual first completes
an Hour of Service with Employer.
2.15 Defined Benefit Fraction means a fraction, the numerator of which is the
sum of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Sections 415(b) and (d) of the Code or
140 percent of the highest average compensation, including any adjustments
under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as of
the first day of the first Limitation Year beginning after December 31, 1986,
in one or more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be less
than 125 percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the Plan after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the requirements of
Section 415 of the Code for all limitation years beginning before January 1,
1987.
2.16 Defined Contribution Dollar Limitation means $30,000.00 or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
2.17 Defined Contribution Fraction means a fraction, the numerator of which is
the sum of the Annual Additions to the Participant's Account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all
welfare benefit funds, individual medical accounts, and simplified employee
pensions maintained by the Employer), and the denominator of which is the sum
of the maximum aggregate amounts for the current and all prior Limitation Years
of service with the Employer (regardless of whether a defined contribution plan
was maintained by the Employer). The maximum aggregate amount in any Limitation
Year is the lesser of 125 percent of the dollar limitation determined under
Sections 415(b) and (d) of the Code in effect under Section 415(c)(1)(A) of the
Code or 35 percent of the Participant's Compensation for such year. If the
Employee was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (1)
the excess of the sum of the fractions over 1.0 times (2) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the Plan made
after May 5, 1986, but using the Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
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The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all Employee contributions as Annual
Additions.
2.18 Designated Beneficiary means the individual who is designated by the
Participant to be entitled to receive a benefit by reason of the Participant's
death, according to the provisions of the Plan and in accordance with Section
401(a)(9) of the Code and the proposed regulations thereunder. The Designated
Beneficiary of a married Participant shall be his Spouse, notwithstanding any
other designation he has made, unless such other designation is a Qualified
Election.
2.19 Determination Date means the last day of the preceding Plan Year for any
Plan Year subsequent to the first Plan Year. For the first Plan Year of the
Plan, Determination Date means the last day of that Plan Year.
2.20 Disabled or Disability means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than 12 months. The
permanence and degree of such impairment shall be supported by medical
evidence.
2.21 Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to Article X.
2.22 ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and as it is hereafter amended, and any Regulations promulgated
thereunder.
2.23 Earliest Retirement Age means the earliest date on which, under Article IX
of the Plan, and Item 10 of the Adoption Agreement, the Participant could elect
to receive Retirement benefits.
2.24 Earned Income means 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 a qualified plan to the extent deductible under Section 404
of the Code.
Net earnings shall be determined with regard to the deduction allowed
to the Employer by Section 164(f) of the Code for taxable years beginning after
December 31, 1989.
2.25 Election Period means the period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the first
day of the Plan Year in which age 35 is attained, with respect to his Account
balance as of the date of separation, the Election Period shall begin on the
date of separation. The Election Period for a Participant who will not yet
attain age 35 as of the end of any current Plan Year shall begin on the date of
such election and end on the first day of the Plan Year in which the
Participant will attain age 35; a new Election Period for the Participant will
then begin on the first day of the Plan Year in which the Participant attains
age 35.
2.26 Eligibility Service means the service, if any, required under Item 5(A) of
the Adoption Agreement in order to be eligible to participate in the Plan.
Computation of Eligibility Service is described in Section 3.1 of this Plan.
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2.27 Employee means any eligible employee of the Employer maintaining the Plan
or of any other employer required to be aggregated with such Employer under
Sections 414(b), (c), (m), or (o) of the Code.
The term Employee shall also include (a) any Self-employed Individual
who adopts the Plan, and (b) any Leased Employee deemed to be an employee of
any employer described in the previous paragraph as provided in Sections 414(n)
or (o) of the Code.
2.28 Employer means the individual or entity adopting this Plan, any successor
to such individual or entity, and any parent, subsidiary, member of a group of
trades or businesses under common control, or affiliated entity with respect to
the individual or entity (as defined under Section 414 of the Code), which also
maintains this Plan.
2.29 Excess Amount means the excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
2.30 Highest Average Compensation means the average Compensation for the three
consecutive years of service with the Employer that produces the highest
average. A year of service with the Employer is the 12-consecutive month period
defined in Item 4(C) of the Adoption Agreement.
2.31 Highly-compensated Employee means both Highly-compensated Active
Employees and Highly-compensated Former Employees.
A Highly-compensated Active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year: (a) received Compensation from the Employer in excess of
$75,000.00 (as adjusted pursuant to Section 415(d) of the Code); (b) received
Compensation from the Employer in excess of $50,000.00 (as adjusted pursuant to
Section 415(d) of the Code) and was a member of the top-paid group for such
year; or (c) was an officer of the Employer and received Compensation during
such year that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term Highly-compensated Employee
also includes: (1) Employees who are both described in the preceding sentence
if the term "determination year" is substituted for the term "look-back year"
and the Employee is one of the 100 Employees who received the most Compensation
from the Employer during the determination year; and (2) Employees who are five
percent owners at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (c) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a Highly-compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the 12-month period immediately preceding the
determination year.
A Highly-compensated Former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a Highly-compensated Active Employee for either the
separation year or any determination year ending on or after the Employee's
55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a five percent owner who is an active or former
Employee or a Highly-compensated Employee who is one of the ten most
Highly-compensated Employees ranked on the basis of Compensation paid by the
Employer during such year, then the family member and the five percent owner or
top-ten Highly-compensated Employee shall be aggregated. In such case, the
family member and five percent owner or top-ten Highly-compensated Employee
shall be treated as a single Employee receiving Compensation and Plan
contributions or benefits equal to the sum of such Compensation and
contributions or benefits of the family member and five percent owner or
top-ten Highly-compensated Employee. For
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purposes of this Section, family member includes the Spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
The determination of who is a Highly-compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers and
the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
2.32 Hour of Service means:
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
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), 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 is 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.
d. Hours of Service will be credited for employment with other members
of an affiliated service group (under Section 414(m) of the Code),
a controlled group of corporations (under Section 414(b) of the
Code), or a group of trades or businesses under common control
(under Section 414(c) of the Code) of which the adopting Employer
is a member, and any other entity required to be aggregated with
the Employer pursuant to Section 414(o) of the Code.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Section
414(n) or Section 414(o) of the Code.
e. Solely for purposes of determining whether a Break in Service for
participation and vesting purposes has occurred in a computation
period, an Employee 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 Employee but for
such absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such absence. 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 Employee, (2) by reason of a birth of a child of the
Employee, (3) by reason of the placement of a child with the
Employee in connection with the adoption of such child by such
Employee, 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 (A) in the
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computation period in which the absence begins if the crediting is
necessary to prevent a Break in Service in that period, or (B) in
all other cases, in the following computation period.
2.33 Immediately Distributable means that any part of the Account balance could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained if not deceased) the later of Normal Retirement
Age or age 62.
2.34 Investment Director means the party designated by the Employer in Item 9
of the Adoption Agreement to direct the Custodian in the investment of
contributions and earnings of the Custodial Account.
2.35 Key Employee means any Employee or former Employee (and the Beneficiaries
of such Employee) who at any time during the determination period was (a) an
officer of the Employer if such individual's Annual Compensation exceeds 50
percent of the dollar limitation under Section 415(b)(1)(A) of the Code, (b) an
owner (or considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's Compensation exceeds 100
percent of the dollar limitation under Section 415(c)(1)(A) of the Code, (c) a
five-percent owner of the Employer, or (d) a one-percent owner of the Employer
who has an Annual Compensation of more than $150,000.00. Annual Compensation
means compensation as defined in Section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction agreement
which are excludible from the Employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code. The
determination period is the Plan Year containing the Determination Date and the
four preceding Plan Years.
The determination of who is a Key Employee will be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
2.36 Leased Employee means any person (other than an Employee of the recipient)
who pursuant to an agreement between the recipient and any other person
(leasing organization) has performed services for the recipient (or for the
recipient and related persons determined in accordance with 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 recipient Employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable
to services performed for the recipient Employer shall be treated as provided
by the recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient
if: (a) such employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least ten percent of
compensation, as defined in Section 415(c)(3) of the Code, but including
amounts contributed pursuant to a salary reduction agreement which are
excludible from the Employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B), or Section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (b) Leased Employees do
not constitute more than 20 percent of the recipient's nonhighly-compensated
workforce.
2.37 Leave of Absence means any of the following:
a. That period of interruption of active employment of an Employee
caused by entrance into the Armed Services of the United States
under such circumstances that he becomes entitled to reemployment
rights under the law, this period being deemed to terminate at the
expiration of the reemployment rights;
b. That period of interruption of active employment of an Employee
granted by Employer at the Employee's request with the
understanding that he will return to active employment at the
expiration of the period, provided that the interruption of active
employment does not exceed two years and is granted on a
nondiscriminatory basis for a
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specified reason such as sickness, disability, research, study,
pregnancy, or family responsibilities;
c. A period of layoff not to exceed two years; or
d. A period of jury duty.
2.38 Life Expectancy and Joint and Last Survivor Expectancy mean a period of
time 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 Participant (or Spouse, in the case of
distributions described in Section 10.2) by the time distributions are required
to begin, Life Expectancies shall be recalculated annually. Such election shall
be irrevocable as to the Participant (or Spouse) and shall apply to all
subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be
recalculated.
2.39 Limitation Year means the period specified in Item 4(C) of the Adoption
Agreement. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
2.40 Master or Prototype Plan means a plan the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.
2.41 Maximum Permissible Amount means the maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year, which shall not exceed the lesser of:
a. the Defined Contribution Dollar Limitation; or
b. 25 percent of the Participant's Compensation for the Limitation
Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits (within the meaning of Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise treated as an Annual
Addition under Sections 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment changing
the Limitation Year to a different 12-consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
2.42 Normal Retirement Age is the age selected in Item 10(A) of the Adoption
Agreement. If the Employer enforces a mandatory retirement age, the Normal
Retirement Age is the lesser of that mandatory age or the age specified in the
Adoption Agreement.
2.43 Owner-employee means an individual who is a sole proprietor, or who is a
partner owning more than ten percent of either the capital or profits interest
of the partnership.
2.44 Participant means an Employee who has begun to participate in the Plan
according to Section 3.2, and who has not ceased participation according to
Section 3.3. A Participant is treated as benefiting under the Plan for any Plan
Year during which the Participant received or is deemed to receive an
allocation in accordance with Section 1.410(b)-3(a) of the Regulations.
2.45 Participation Date means the date or dates on which Employees may become
Participants in the Plan, as specified in Item 5(C) of the Adoption Agreement.
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2.46 Permissive Aggregation Group means the Required Aggregation Group of plans
plus any other plan or plans of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the requirements
of Sections 401(a)(4) and 410 of the Code.
2.47 Plan means the program of retirement benefits established by Employer
according to the provisions contained in this document and the Adoption
Agreement, as named in the preamble of the Adoption Agreement.
2.48 Plan Administrator means the individual or entity named in Item 2 of the
Adoption Agreement, which shall be a named fiduciary of this Plan.
2.49 Plan Compensation means the amount of a Participant's W-2 earnings
determined for the period selected by the Employer in Item 6(B) of the Adoption
Agreement. For any Self-employed Individual covered under the Plan, Plan
Compensation will mean Earned Income. Plan Compensation shall include only that
compensation which is actually paid to an Employee while he is a Participant
during the determination period. Except as provided elsewhere in this Plan, the
determination period shall be the period elected by the Employer in the
Adoption Agreement. If the Employer makes no election, the determination period
shall be the Plan Year. If so elected by the Employer in Item 6(B) of the
Adoption Agreement, Plan Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includible in the gross income of the Employee under Sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
For years beginning on or after January 1, 1989, and before January 1,
1994, the annual Plan Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan Year shall not
exceed $200,000. This limitation shall be adjusted by the Secretary at the same
time and in the same manner as under Section 415(d) of the Code, except that
the dollar increase in effect on January 1 of any calendar year is effective
for Plan Years beginning in such calendar year and the first adjustment to the
$200,000 limitation is effective on January 1, 1990. For Plan Years beginning
on or after January 1, 1994, the annual Plan Compensation of each Participant
taken into account for determining all benefits provided under the Plan for any
Plan Year shall not exceed $150,000, as adjusted for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal Revenue Code.
The cost-of-living adjustment in effect for a calendar year applies to any
determination period beginning in such calendar year. If a determination period
consists of fewer than 12 months, the annual Plan Compensation limit is an
amount equal to the otherwise applicable annual Plan Compensation limit
multiplied by a fraction, the numerator of which is the number of months in the
short determination period, and the denominator of which is 12. In determining
the Plan Compensation of a Participant for purposes of this limitation, the
rules of Section 414(q)(6) of the Code shall apply, except in applying such
rules, the term "family" shall include only the Spouse of the Participant and
any lineal descendants of the Participant who have not attained age 19 before
the close of the year. If, as a result of the application of such rules the
adjusted annual Plan Compensation limitation is exceeded, then (except for
purposes of determining the portion of Plan Compensation up to the integration
level, if this plan provides for permitted disparity) the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Plan Compensation as determined under this Section prior to the application of
this limitation.
If Plan Compensation for any prior determination period is taken into
account in determining a Participant's allocations for the current Plan Year,
the Plan Compensation for such prior determination period is subject to the
applicable annual Plan Compensation limit in effect for that prior period. For
this purpose, in determining allocations in Plan Years beginning on or after
January 1, 1989, the annual Plan Compensation limit in effect for determination
periods beginning before that date is $200,000.
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In addition, in determining allocations in Plan Years beginning on or
after January 1, 1994, the annual Plan Compensation limit in effect for
determination periods beginning before that date is $150,000.
2.50 Plan Year means the 12-consecutive month period designated by the Employer
in Item 4(B) of the Adoption Agreement.
2.51 Projected Annual Benefit means the annual retirement benefit (adjusted to
an actuarially equivalent Straight Life Annuity if such benefit is expressed in
a form other than a Straight Life Annuity or Qualified Joint and Survivor
Annuity) to which the Participant would be entitled under the terms of a plan
assuming:
a. the Participant will continue employment until normal retirement
age under the plan (or current age, if later); and
b. the Participant's Compensation for the current limitation year
and all other relevant factors used to determine benefits under
the plan will remain constant for all future limitation years.
Straight Life Annuity means an annuity payable in equal installments
for the life of the Participant that terminates upon the Participant's death.
2.52 Qualified Election means a designation of beneficiary by the Participant,
or a waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity, which satisfies all of the following: (a) the
Participant's Spouse consents in writing to the election; (b) the election
designates a specific beneficiary, including any class of beneficiaries or any
contingent beneficiaries, which may not be changed without Spousal consent (or
the Spouse expressly permits designations by the Participant without any
further Spousal consent); (c) the Spouse's consent acknowledges the effect of
the election; (d) the Spouse's consent is witnessed by a Plan representative or
notary public; and (e) the election designates a form of benefit payment which
may not be changed without Spousal consent (or the Spouse expressly permits
designations by the Participant without any further Spousal consent). If it is
established to the satisfaction of a Plan representative that there is no
Spouse or that the Spouse cannot be located, a waiver which does not satisfy
(a) through (e) above will be deemed a Qualified Election.
Any consent by a Spouse obtained under this provision (or establishment
that the consent of a Spouse may not be obtained) shall be effective only with
respect to that Spouse. A consent that permits designations by the Participant
without any requirement of further consent by the Spouse must acknowledge that
the Spouse has the right to limit consent to a specific beneficiary, and a
specific form of benefit where applicable, and that the Spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the Spouse at any
time before the commencement of benefits; the number of revocations shall not
be limited. No consent obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 10.4(d).
2.53 Qualified Joint and Survivor Annuity means an immediate annuity for the
life of the Participant 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 Participant and
the Spouse and which is the amount of benefit which can be purchased with the
Participant's Vested Account Balance. The percentage of the survivor annuity
under the Plan shall be 50%.
2.54 Required Aggregation Group means (a) each qualified plan of the Employer
in which at least one Key Employee participates or participated at any time
during the determination period (regardless of whether the plan has
terminated), and (b) any other qualified plan of the Employer which enables a
plan described in (a) to meet the requirements of Sections 401(a)(4) or 410 of
the Code.
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2.55 Required Beginning Date means the first day of April of the calendar year
following the calendar year in which the Participant attains age 70-1/2.
a. Five-percent Owner. A Participant is treated as a five-percent
owner for purposes of this Section if such Participant is a
five-percent owner as defined in Section 416(i) of the Code
(determined in accordance with Section 416 but without regard to
whether the Plan is top heavy) at any time during the Plan Year
ending with or within the calendar year in which such owner attains
age 66-1/2 or any subsequent Plan Year.
b. Once distributions have begun to a five-percent owner under this
Section, they must continue to be distributed even if the
Participant ceases to be a five-percent owner in a subsequent year.
The Required Beginning Date of a Participant who attains age 70-1/2
before January 1, 1988, shall be determined in accordance with (c) or (d)
below:
c. Participants Other Than Five-Percent Owners. The Required Beginning
Date of a Participant who is not a five-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.
d. Five-percent Owners. The Required Beginning Date of a Participant
who is a five-percent owner during any year beginning after
December 31, 1979, is the first day of April following the later
of:
1. the calendar year in which the Participant attains age
70-1/2, or
2. the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a five-percent
owner, or the calendar year in which the Participant retires.
The Required Beginning Date of a Participant who is not a five-percent
owner and who attains age 70-1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
2.56 Self-employed Individual means an individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established;
also, 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.
2.57 Sponsoring Organization means McDonald & Company Securities, Inc., and any
entity which is a successor thereto.
2.58 Spouse (Surviving Spouse) means the lawful spouse or surviving spouse of
the Participant, provided that a former spouse will be treated as the Spouse or
Surviving Spouse and a current spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as described in Section 414(p) of the Code.
2.59 Trustee means the individuals or entities named in Item 1(C) of the
Adoption Agreement (referred to both individually and collectively as
"Trustee") and successors, if any, each of which shall be a named fiduciary
hereunder.
2.60 Valuation Date means the date or dates elected by the Employer in Item
4(D) of the Adoption Agreement as of which Account balances or Accrued Benefits
are valued.
2.61 Vested Account Balance means the aggregate value of the Participant's
Vested Accrued Benefit plus any Nondeductible or Deductible Employee
Contribution Subaccount, Elective Deferral Subaccount, Rollover Subaccount,
and Transfer
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Subaccount as provided in Article VII, whether vested before or upon death,
including the proceeds of insurance contracts, if any, on the Participant's
life, adjusted as follows:
a. The Vested Account Balance as of the last Valuation Date in the
calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year), increased by the amount of any
contributions or forfeitures allocated to the Account 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.
b. For purposes of paragraph (a), 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.
2.62 Vested Accrued Benefit means the nonforfeitable portion of a Participant's
Accrued Benefit, as provided in Article IX, and which a Participant or his
Beneficiary shall have an unconditional and legally enforceable right to
receive.
2.63 Year of Service is a 12-consecutive month period (computation period)
during which the Employee completes at least 1,000 Hours of Service.
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Article III: Participation
3.1 Computation of Eligibility Service:
a. Eligibility Computation Period. If the Employer has specified a
service requirement in Item 5(A) of the Adoption Agreement, then
for purposes of determining Years of Service and Breaks in Service
for purposes of eligibility, the initial eligibility computation
period is the 12-consecutive month period beginning on the
Employee's Date of Employment. The succeeding 12-consecutive month
periods commence with the first anniversary of the Employee's Date
of Employment. Years of Service and Breaks in Service will be
measured on the same eligibility computation period.
b. Service with Predecessor Employer. If the Employer maintains the
plan of a predecessor employer, service with the predecessor
employer will be treated as service with the Employer.
3.2 Commencement of Participation:
a. At Effective Date. Each Employee who has satisfied the eligibility
requirements specified in Item 5(A) of the Adoption Agreement on
the Effective Date shall become a Participant in this Plan as of
that date. If this Plan is a restatement of a plan maintained by
Employer or is a replacement or successor to the previous plan
maintained by Employer, each Employee who, on the Effective Date,
was a Participant in the plan prior to the restatement or who was a
Participant in the prior plan, shall be a Participant in this Plan
as of the Effective Date.
b. After Effective Date. Each Employee who did not become a
Participant on the Effective Date will become a Participant on the
Participation Date specified in Item 5(C) of the Adoption
Agreement.
3.3 Termination of Participation: An Employee who has become a
Participant shall cease to be a Participant on the first Participation Date on
which he satisfies both of the following:
a. he is no longer an Employee or no longer satisfies any one of the
requirements specified in Item 5(A) of the Adoption Agreement; and
b. he has received or has been deemed to receive distribution of his
entire Vested Accrued Benefit.
3.4 Participation After Reemployment: If the Years of Service required for 100%
Vesting selected by the Employer under Item 12(A) of the Adoption Agreement
equal the Years of Service required for eligibility selected by the Employer
under Item 5(A) of the Adoption Agreement, then if an Employee has a Break in
Service before satisfying the requirement of Item 5(A) of the Adoption
Agreement, any service before the Break in Service will be disregarded. If the
Employer has selected options other than the foregoing, then, in the case of a
Participant who does not have any nonforfeitable right to the Account balance
derived from Employer contributions, Years of Service before a period of
consecutive one-year Breaks in Service will be disregarded in computing
Eligibility Service if the number of consecutive one-year Breaks in Service in
such period equals or exceeds the greater of five or the Participant's
aggregate number of Years of Service. Such aggregate number of Years of Service
will not include any Years of Service disregarded under the preceding sentence
by reason of prior Breaks in Service.
If a Participant's Years of Service are disregarded pursuant to the
preceding paragraph, such Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of Service may not be
disregarded pursuant to the preceding paragraph, such Participant shall
continue to participate in the Plan, or if terminated, shall participate
immediately upon reemployment.
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3.5 Participation upon Return to Eligible Class: In the event a Participant no
longer meets the requirements of Item 5(A) of the Adoption Agreement and
therefore becomes ineligible to participate, but has not incurred a Break in
Service, such Employee will participate immediately upon return to a class of
Employees satisfying the requirements of Item 5(A) of the Adoption Agreement.
If such Participant incurs a Break in Service, eligibility will be determined
under the Break in Service rules of the Plan. In the event an Employee who has
been ineligible to participate in the Plan because he did not meet the
eligibility requirements of Item 5(A) of the Adoption Agreement becomes
eligible to participate in the Plan, such Employee will participate immediately
if such Employee has satisfied the minimum age and service requirements and
would have otherwise previously become a Participant.
3.6 Participation by Employees of Controlled or Affiliated Employers: If
Employer is a member of an affiliated service group (as defined in Section
414(m) of the Code), a controlled group of corporations (as defined in Section
414(b) of the Code), a group of trades or businesses under common control (as
defined in Section 414(c) of the Code), or any other group defined under
Section 414(o) of the Code, an Employee will receive credit for any Hours of
Service rendered on behalf of any related employer. These Hours of Service will
count in determining Eligibility Service and the right to accrue benefits and
in determining service for vesting; however, an Employee shall not become a
Participant in this Plan if the employer for which he is rendering services at
the time he would first be eligible to participate has not adopted this Plan.
Employees of related employers shall be treated as employed by a single
employer for purposes of the employee benefit requirements listed in Section
414(m)(4) of the Code.
3.7 Employee Transfers: If an Employee is transferred between Participating
Employers, the Employee shall carry with him his accumulated service. A
transfer shall not be considered a termination of employment under the Plan,
and the Participating Employer to which the Employee is transferred shall be
obligated under the Plan with respect to the transferred Employee in the same
manner as was the Participating Employer from whom the Employee was
transferred. After the transfer, the Account balance of the transferred
Employee shall be administered and accounted for as the responsibility of the
Participating Employer to whom the Participant is transferred.
3.8 Participation by Owner-employees of More Than One Trade or Business: 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 such
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 those 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 such individual 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
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<PAGE>
b. in the case of a partnership, own more than 50 percent 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.
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Article IV: Employer Contributions
4.1 Contributions: At any time during the Accounting Period or at any other
time permitted under Section 404(a)(6) of the Code, Employer may make
deductible contributions to the Trust or Custodial Account, in cash, on behalf
of each Participant entitled to receive an allocation under Section 4.2 or
under Article VI. Item 6(A) of the Adoption Agreement specifies the required
amount of contribution, if any. If a Participant is not entitled to the full
contribution specified in Item 6(A) due to the limitations of Section 415 of
the Code (which are described in Section 4.6 of this Plan), then the Employer
contribution for that Participant shall be reduced to the amount to which the
Participant is actually entitled. If the Employer maintains both a
Profit-Sharing Plan and a Money Purchase Pension Plan under this Prototype
Plan, only one of the two plans may provide for disparity in contributions as
permitted under Section 401(l) of the Code.
4.2 Allocation to Individual Participant Accounts: The Plan Administrator shall
allocate the amounts contributed for that Plan Year to the Accounts of the
Participants entitled to an allocation. The amounts contributed shall be
allocated to each Participant's Account as provided in this Section 4.2,
according to the Employer's election in Item 6(A) of the Adoption Agreement. A
Participant shall be entitled to an allocation of the Employer contribution and
forfeitures, if any, according to the requirements selected by the Employer in
Item 6(C) of the Adoption Agreement. In the event that a Plan Year is less than
12 months, the number of Hours of Service required for entitlement to an
allocation of Employer contributions and forfeitures (if any) shall be equal to
the Hours of Service required for a full Plan Year multiplied by a fraction,
the numerator of which is the number of months in the shortened Plan Year and
the denominator of which is 12.
4.3 Return of Employer Contributions: Except as otherwise provided in this
Section and Section 4.6, all contributions by Employer to the Trust or
Custodial Account shall be irrevocable but only if they are determined to be
deductible by the Employer under the Code. The deductible contributions and any
income thereon may not be diverted to or used for any purpose other than the
exclusive benefit of the Participants or their Beneficiaries. Any contribution
made by the Employer because of a mistake of fact must be returned to the
Employer within one year of the contribution.
In the event that the Commissioner of the Internal Revenue determines
that the Plan is not initially qualified under the Code, any contribution made
incident to that initial qualification by the Employer must be returned to the
Employer within one year after the date the initial qualification is denied,
but only if the application for qualification is made by the time prescribed by
law for filing the Employer's tax return for the taxable year in which the Plan
is adopted, or such later date as the Secretary of the Treasury may prescribe.
If an Employer contribution is made by reason of a good faith mistake in
determining the deductibility of the contribution, the contribution may be
returned to Employer within one year after the disallowance of its deduction.
The amount returned to Employer under the preceding sentences shall not exceed
the lesser of:
a. the amount contributed due to such mistake; or
b. if the over-contribution preceded the most recent previous
Valuation Date and if, as of such date, there was a loss in the
value of the entire fund since the next most recent previous
Valuation Date (excluding current year contributions), the amount
contributed due to such mistake, less an amount determined as
follows:
1. determine the percentage of loss in the fund value between
the two Valuation Dates;
2. multiply the percentage obtained in (1) by the amount of
the over-contribution;
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3. multiply the number obtained in (2) by the number of full
months between the date of the contribution due to such
mistake and the next succeeding Valuation Date;
4. divide the number obtained in (3) by the number of months
between the two Valuation Dates.
4.4 Forfeitures: No forfeitures will occur solely as a result of an Employee's
withdrawal of Employee contributions. If an Employee terminates service, and
elects, in accordance with the provisions of Articles IX and X, to receive the
value of the Employee's Vested Accrued Benefit, the nonvested portion will be
treated as a forfeiture. If the Employee elects to have distributed less than
the entire vested portion of the Account balance derived from Employer
contributions, the part of the nonvested portion that will be treated as a
forfeiture is the total nonvested portion multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to Employer
contributions and the denominator of which is the total value of the vested
Employer derived Account balance. If a Participant has no Vested Accrued
Benefit at the time of his termination of employment, he shall be deemed to
have received a distribution of his entire Vested Accrued Benefit at the time
of his termination of employment, and to have forfeited his entire Account
balance.
a. Treatment and Allocation of Forfeited Amounts. If all or any
portion of a Participant's Accrued Benefit is forfeited in
accordance with this Section and Section 9.6, the forfeited
amount shall be held by the Plan until the last Valuation Date in
the Plan Year in which the Participant receives distribution of
his Vested Account balance. On that date, the value of the
forfeited portion shall be used first to restore any previously
forfeited amounts as required under Section 4.4(b) of this Plan.
If there are any forfeited portions available after that
allocation, they may be applied to reduce the amount of any
required Employer contribution for the next Plan Year. If any
forfeiture amounts remain after that allocation, they shall be
allocated to the Account of each Participant entitled to an
allocation of Employer's contribution for the Plan Year in the
ratio which the Participant's Plan Compensation bears to the
total Plan Compensation of all Participants entitled to an
allocation of the Employer contribution for that Plan Year. If
any forfeited amounts are held by the Plan at the time of the
termination of this Plan, these amounts shall be allocated to
each Participant's Account in the ratio that each Participant's
Plan Compensation bears to the total Plan Compensation of all
Participants entitled to an allocation of the Employer
contribution for the Plan Year during which the termination
occurs.
b. Restoration of Forfeited Amounts. Under certain circumstances, the
forfeited portion of a Participant's Accrued Benefit must be
restored to the Participant's Account. If a benefit is forfeited
because the Participant or Beneficiary cannot be found, such
benefit will be reinstated if a claim is made by the Participant or
Beneficiary. If the Participant is reemployed, the following rules
apply:
1. If the Participant has not received a distribution of his
Vested Accrued Benefit and is reemployed before incurring
five or more consecutive Breaks in Service, the forfeited
portion must be restored to the Participant's Account. To
the extent possible, current forfeitures shall be used to
restore the Participant's Account. If current forfeitures
are insufficient to restore the Participant's Account,
unallocated earnings shall next be used to restore the
Account. If necessary, a special Employer contribution
shall be made, subject to the limitations of the Code.
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2. If a Participant receives a distribution pursuant to this
Section and the Participant resumes employment covered
under this Plan, the Participant's Employer-derived 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 five years after the
first date on which the Participant is subsequently
reemployed by the Employer, or the date the Participant
incurs five consecutive one-year Breaks in Service
following the date of the distribution.
3. If a Participant is deemed to receive a distribution
pursuant to this Section, and the Participant resumes
employment covered under this Plan before the date the
Participant incurs five consecutive one-year Breaks in
Service, upon the reemployment of such Participant, the
Employer-derived Account Balance of the Participant will be
restored to the amount on the date of such deemed
distribution.
4. Regardless of whether the Participant has received or was
deemed to have received a distribution of his Vested Accrued
Benefit, if he is reemployed after incurring five or more
consecutive Breaks in Service, the forfeited portion of his
Account shall not be restored.
4.5 Limited Effect of Allocation: The fact that an allocation of contributions,
forfeitures, or earnings is made shall not, by itself, vest in any Participant
or Beneficiary a right or interest in any specific asset or portion of the
Plan. If an allocation of contributions, forfeitures, earnings or losses is
incorrectly made, the Plan Administrator shall direct the Trustee to reallocate
amounts to the extent necessary to correct the error.
4.6 Limitation on Allocations:
a. If the Participant does not participate in, and has never
participated in, another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in Section 419(e)
of the Code), maintained by the Employer, or an individual
medical account (as defined in Section 415(1)(2) of the Code)
maintained by the Employer, or a simplified employee pension, as
defined in Section 408(k) of the Code, maintained by the
Employer, which provides an Annual Addition, the amount of Annual
Additions which may be credited to the Participant's Account for
any Limitation Year will not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this
Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's Account would cause
the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated
will be reduced so that the Annual Additions for the Limitation
Year will equal the Maximum Permissible Amount.
1. Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of
a reasonable estimation of the Participant's Compensation for
the Limitation Year, uniformly determined for all
Participants similarly situated.
2. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
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3. If, pursuant to Section 4.6(a)(2), or as a result of the
allocation of forfeitures, there is an Excess Amount, the
excess will be disposed of as follows:
A. Any nondeductible voluntary Employee contributions to
the extent they would reduce the Excess Amount, will
be returned to the Participant;
B. If after the application of paragraph (A) an Excess
Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant's Account will be
used to reduce Employer contributions (including any
allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding
Limitation Year if necessary;
C. If after the application of paragraph (A) an Excess
Amount still exists, and the Participant is not
covered by the Plan at the end of a Limitation Year,
the Excess Amount will be held unallocated in a
suspense account. The suspense account will be
applied to reduce future Employer contributions
(including allocation of any forfeitures) for all
remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary;
D. If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, it
will not participate in the allocation of the Trust's
investment gains and losses. If a suspense account
is in existence at any time during a particular
Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants'
accounts before any Employer contributions may be
made to the Plan for that Limitation Year. Excess
Amounts may not be distributed to Participants or
former Participants.
b. This Section 4.6(b) applies if, in addition to this Plan, the
Participant is covered under another qualified master or
prototype defined contribution plan maintained by the Employer, a
welfare benefit fund maintained by the Employer, an individual
medical account maintained by the Employer, or a simplified
employee pension maintained by the Employer, that provides an
Annual Addition during any Limitation Year. The Annual Additions
which may be credited to a Participant's Account under this Plan
for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a
Participant's account under the other qualified master and
prototype defined contribution plans, welfare benefit funds,
individual medical accounts, and simplified employee pensions for
the same Limitation Year. If the Annual Additions with respect
to the Participant under other qualified master and prototype
defined contribution plans, welfare benefit funds, individual
medical accounts, and simplified employee pensions maintained by
the Employer are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and funds for
the Limitation Year will equal the Maximum Permissible Amount.
If the Annual Additions with respect to the Participant under
such other qualified master and prototype defined contribution
plans, welfare benefit funds, individual medical accounts, and
simplified employee pensions in the aggregate are equal to or
greater than the
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Maximum Permissible Amount, no amount will be contributed or
allocated to the Participant's Account under this Plan for the
Limitation Year. If the Employer maintains more than one type of
plan under this Prototype Plan, the Annual Additions with respect
to the Participant under a Profit-Sharing Plan shall be reduced
first, the Annual Additions to a Money Purchase Pension Plan
shall be reduced next, and the Annual Additions to a Target
Benefit Plan shall be reduced last.
1. Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant in the manner
described in Section 4.6(a)(1).
2. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
3. If, pursuant to Section 4.6(b)(2) or as a result of the
allocation of forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an
Excess Amount for a Limitation Year, the Excess Amount will
be deemed to consist of the Annual Additions last
allocated, except that Annual Additions attributable to a
simplified employee pension will be deemed to have been
allocated first followed by Annual Additions to a welfare
benefit fund or individual medical account, regardless of
the actual allocation date.
4. If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed
to this Plan will be the product of:
A. the total Excess Amount allocated as of such date;
times
B. the ratio of (i) the Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this Plan to (ii) the total Annual Additions
allocated to the Participant for the Limitation Year as
of such date under this and all the other qualified
master or prototype defined contribution plans.
5. Any Excess Amount attributed to this Plan will be disposed
of in the manner described in Section 4.6(a)(3).
c. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be credited
to the Participant's Account under this Plan for any Limitation
Year will be limited in accordance with Section 4.6(b) as though
the other plan were a Master or Prototype Plan unless the
Employer provides other limitations in Item 7(A) of the Adoption
Agreement.
d. If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the
sum of the Participant's Defined Benefit Fraction and Defined
Contribution Fraction will not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year
will be limited in accordance with Item 7(B) of the Adoption
Agreement.
e. For purposes of this Section 4.6, Employer shall mean the Employer
that adopts this Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified
by Section 415(h)), all commonly controlled trades or businesses
(as defined in Section 414(c) of the Code as modified
21
<PAGE>
by Section 415(h)) or affiliated service groups (as defined in
Section 414(m) of the Code ) of which the adopting Employer is a
part, and any other entity required to be aggregated with the
Employer pursuant to Regulations under Section 414(o) of the Code.
22
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Article V: Employee Contributions
5.1 Voluntary Employee Contributions Not Permitted: The Plan will not accept
any nondeductible Employee contributions for Plan Years beginning after the
Plan Year in which this Plan is adopted by the Employer. Employee Contributions
for Plan Years beginning after December 31, 1986, together with any Matching
Contributions as defined in Section 401(m) of the Code, will be limited so as
to meet the Nondiscrimination test of Section 401(m). If this Plan is a
replacement for any prior plan which permitted voluntary Employee
contributions, the following provisions apply:
a. Employee contributions and earnings thereon will be
nonforfeitable at all times.
b. The Plan will not accept Deductible Employee Contributions which
are made for a taxable year beginning after December 31, 1986.
Deductible Employee Contributions made for taxable years
beginning before January 1, 1987, will be maintained in a
separate subaccount which will be nonforfeitable at all times.
This Subaccount will share in gains and losses under the Plan in
the same manner as described in Article VII of the Plan. No part
of the Deductible Employee Contribution Subaccount will be used
to purchase life insurance. Subject to Section 10.4 (if
applicable), the Participant may withdraw any part of his
Deductible Employee Contribution Subaccount by making a written
application to the Plan Administrator.
5.2 Rollover Contributions: If the Employer has elected to permit Rollover
Contributions under Item 8(A) of the Adoption Agreement, an Employee may
request that the Trustee or Custodian accept cash or other property
representing his interest in another qualified retirement plan, including a
plan previously maintained by this Employer. This cash or property may be
received from the Employee no later than 60 days after he has received a
qualifying rollover distribution, as defined in Section 402(a)(5)(D) of the
Code. The Employee's interest in this cash or other property received shall be
fully vested and nonforfeitable. No cash or other property will be accepted by
this Plan which is attributable to deductible or nondeductible voluntary
contributions of the Employee or contributions to an Individual Retirement
Account or Individual Retirement Annuity. Any assets received by the Trustee or
Custodian in accordance with this Section shall be recorded in a separate
subaccount on the books of this Plan and shall be invested in the same manner
as a Participant's Accrued Benefit from Employer's contributions. However, the
Trustee or Investment Director, either upon the Employee's request or on its
own initiative, may require that such assets be segregated and invested in
another manner. This Subaccount shall be distributable at the same time and in
the same manner as are the other funds of this Plan.
5.3 Transferred Contributions: If the Employer has elected to permit this Plan
to receive funds transferred from other qualified plans according to Item 8(B)
of the Adoption Agreement, an Employee may request to transfer to the Trust or
Custodial Account cash or other property representing his interest in another
qualified retirement plan, including a plan previously maintained by this
Employer. No cash or other property will be accepted by this Plan which is
attributable to deductible voluntary contributions of the Employee or
contributions to an Individual Retirement Account or Individual Retirement
Annuity. This cash or property shall be received directly from the other
qualified plan in a trustee-to-Trustee, custodian-to-Trustee, or Custodian to
Custodian transfer. The Employee's interest in this cash or other property
transferred to the Trustee or Custodian shall be fully vested and
nonforfeitable. Any assets received by the Trustee or Custodian in accordance
with this Section shall be recorded in a separate subaccount on the books of
this Plan and shall be invested in the same manner as a Participant's Accrued
Benefit from Employer's contributions. However, the Trustee or Investment
Director, either upon the Employee's request or on its own initiative, may
require that such assets be segregated and invested in another manner. This
Subaccount shall be
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distributable at the same time and in the same form as are other funds of this
Plan, except that distribution of any funds from this Subaccount which were
subject to requirements similar to Section 10.4 of this Plan (without regard to
Section 10.4(e)) shall be distributed only in accordance with Section 10.4.
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Article VI: 401(k) Arrangement
If, and only if, the Employer has elected in the Adoption Agreement to
include a 401(k) Arrangement, the provisions of this Article VI shall be
operative, and shall take precedence over any conflicting provisions in this
Plan. All ratios and percentages referenced in this Article VI shall be
calculated to the nearest hundredth.
6.1 Definitions: The following terms shall have the meanings specified when
initially capitalized and used throughout this Article VI and the Adoption
Agreement.
a. Actual Deferral Percentage (ADP) means, for a specified group of
Participants for a Plan Year, the average of the ratios
(calculated separately for each Participant in such group) of (1)
the amount of certain Employer contributions actually paid over
to the Trust or Custodial Account on behalf of such Participant
for the Plan Year, to (2) the Participant's Plan Compensation for
such Plan Year (whether or not the Employee was a Participant for
the entire Plan Year). For purposes of the ADP, Employer
contributions on behalf of any Participant shall include: (A)
any Elective Deferrals made pursuant to the Participant's
deferral election of Section 6.3, including Excess Elective
Deferrals of Highly-compensated Employees, but excluding (i)
Excess Elective Deferrals of Nonhighly-compensated Employees that
arise solely from Elective Deferrals made under the plan or plans
of this Employer, and (ii) Elective Deferrals that are taken into
account in the Contribution Percentage test (provided the ADP
test is satisfied both with and without exclusion of these
Elective Deferrals); and (B) at the election of the Employer,
Qualified Nonelective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the
failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
b. Aggregate Limit means the sum of (1) 125 percent of the greater
of the ADP of the Participants who are Nonhighly-compensated
Employees for the Plan Year or the ACP of the Participants who
are Nonhighly-compensated Employees under the Plan subject to
Code Section 401(m) for the Plan Year beginning with or within
the Plan Year of the 401(k) Arrangement, and (2) the lesser of
200% or two plus the lesser of such ADP or ACP. "Lesser" is
substituted for "greater" in (1) above, and "greater" is
substituted for "lesser" after "two plus the" in (2) if it would
result in a larger Aggregate Limit.
c. Average Contribution Percentage (ACP) means the average of the
Contribution Percentages of the Eligible Participants in a
group.
d. Contribution Percentage means the ratio (expressed as a percentage)
of the Participant's Contribution Percentage Amounts to the
Participant's Plan Compensation for the Plan Year (whether or not
the Employee was a Participant for the entire Plan Year).
e. Contribution Percentage Amount means the sum of the Matching
Contributions and Qualified Matching Contributions (to the extent
not taken into Account for purposes of the ADP test) made under
the Plan on behalf of the Participant for the Plan Year. Such
Contribution Percentage Amounts shall not include Matching
Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the Contributions to which
they relate are Excess Deferrals, Excess Contributions, or Excess
Aggregate Contributions. The Employer may include Qualified
Nonelective Contributions in the Contribution Percentage Amounts.
The Employer also may elect to use Elective Deferrals in the
Contribution
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Percentage Amounts so long as the ADP test of Section 6.3(d) is
met before the Elective Deferrals are used in the ACP test of
Section 6.4(b), and the ADP test continues to be met following the
exclusion of those Elective Deferrals that are used to meet the
ACP test.
f. Elective Deferral means any Employer contribution made to the
Plan at the election of the Participant, in lieu of cash
compensation, and shall include contributions made pursuant to a
salary reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective Deferral is
the sum of all Employer contributions made on behalf of such
Participant pursuant to any of the following: an election to
defer under any qualified cash or deferred arrangement ("CODA")
as described in Section 401(k) of the Code; any simplified
employee pension cash or deferred arrangement as described in
Section 402(h)(1)(B) of the Code; any eligible deferred
compensation plan under Section 457 of the Code; any plan as
described under Section 501(c)(18); or the purchase of an annuity
contract under Section 403(b) of the Code pursuant to a salary
reduction agreement. Elective Deferrals shall not include any
deferrals properly distributed as excess Annual Additions.
g. Eligible Participant means any Employee who is eligible to make an
Elective Deferral (if the Employer takes such contributions into
account in the calculation of the Contribution Percentage), or to
receive a Matching Contribution (including forfeitures) or a
Qualified Matching Contribution.
h. Excess Aggregate Contribution means, with respect to any Plan
Year, the excess of:
1. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly-compensated
Employees for such Plan Year, over
2. The maximum Contribution Percentage Amounts permitted by
the ACP test of Section 6.4(b) (determined by reducing
contributions made on behalf of Highly-compensated
Employees in order of their Contribution Percentages
beginning with the highest of such percentages). The
determination of Excess Aggregate Contributions shall be
made after first determining Excess Elective Deferrals and
then determining Excess Contributions.
i. Excess Contribution means, with respect to any Plan Year, the
excess of:
1. The aggregate amount of Employer contributions actually
taken into account in computing the ADP of
Highly-compensated Employees for such Plan Year, over
2. The maximum amount of such contributions permitted by the ADP
test of Section 6.3(e) (determined by reducing contributions
made on behalf of Highly-compensated Employees in order of
the ADPs, beginning with the highest of such percentages).
Excess Contributions shall be treated as Annual Additions
under the Plan.
j. Excess Elective Deferrals means those Elective Deferrals that are
includible in a Participant's gross income under Section 402(g) of
the Code to the extent such Participant's Elective Deferrals for a
taxable year exceed the dollar limitation under Section 402(g).
Excess Elective Deferrals shall be treated as Annual Additions
under
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the Plan, unless such amounts are distributed no later than the
first April 15 following the close of the Participant's taxable
year.
k. 401(k) Participant means a Participant who satisfies the
requirements of Section 6.2, and who makes the compensation
reduction election of Section 6.3.
l. Matching Contribution means an Employer contribution made to this
or any other defined contribution plan on behalf of a Participant
on account of an Employee contribution made by such Participant, or
on account of a Participant's Elective Deferral under a plan
maintained by the Employer.
m. Qualified Matching Contributions means Matching Contributions which
are subject to the distribution and nonforfeitability requirements
under Section 401(k) of the Code.
n. Qualified Nonelective Contributions means contributions (other
than Matching Contributions or Qualified Matching Contributions)
made by the Employer and allocated to Participants' Accounts that
the Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable; and that are
distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals and Qualified Matching
Contributions.
6.2 Participation: Each Employee who, either on or after the Effective Date,
elects the Eligibility requirements for this 401(k) Arrangement (as selected by
the Employer in Item 5(B) of the Adoption Agreement) shall be entitled to make
the election provided in Section 6.3.
6.3 Elective Deferrals:
a. Compensation Reduction Election. An Employee who is eligible to
become a 401(k) Participant may elect to either (1) receive his
full Plan Compensation directly in cash; or (2) reduce his Plan
Compensation and have the Employer make corresponding payments as
contributions to the Plan on the 401(k) Participant's behalf in
accordance with his compensation reduction election. Any such
election must be filed with the Plan Administrator before the
Participation Date on which it is to be effective, or such other
dates as designated by the Plan Administrator, and will become
effective as soon as administratively feasible following the date
it is so filed. A 401(k) Participant may modify or revoke his
election at any time, provided that any such change will become
effective only when filed with the Plan Administrator. Any
election filed by a 401(k) Participant under this Section will
remain in effect until it is modified or revoked by the 401(k)
Participant.
b. Elective Deferral Contributions. For each 401(k) Participant who
has filed the Compensation reduction election of Section 6.3(a),
the Employer shall contribute to the Plan an amount equal to the
amount by which the Participant's Plan Compensation is reduced. The
Employer shall contribute these Elective Deferral amounts to the
Plan within 30 days after each time the 401(k) Participant receives
any payment of reduced Plan Compensation.
c. Limitation on Elective Deferral Contributions. No Participant shall
be permitted to have Elective Deferrals made under this Plan, or
any other qualified plan maintained by the Employer, during any
taxable year, which exceed the dollar limitation of Section 402(g)
of the Code in effect at the beginning of such taxable year.
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<PAGE>
d. Distribution of Excess Deferrals. A Participant may assign to
this Plan any Excess Elective Deferral he has made during his
taxable year to this or any other plan maintained by the
Employer. To make this assignment, the Participant shall so
notify the Plan Administrator on or before the date specified in
the Adoption Agreement of the amount of the Excess Elective
Deferrals to be assigned to this Plan. A Participant is deemed
to notify the Plan Administrator of any Excess Elective Deferrals
that arise by taking into account only those Elective Deferrals
made to this Plan and any other plans of this Employer.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to
whose Account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such
taxable year. Excess Elective Deferrals shall be adjusted for
any income or loss up to the date of distribution. The income or
loss allocable to Excess Elective Deferrals is the sum of:
1. Income or loss allocable to the Participant's Elective
Deferral Subaccount for the taxable year multiplied by a
fraction, the numerator of which is such Participant's Excess
Elective Deferrals for the year and the denominator is the
Participant's Account balance attributable to Elective
Deferrals without regard to any income or loss occurring
during such taxable year; and
2. Ten percent of the amount determined under (1) multiplied by
the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution,
counting the month of distribution if distribution occurs
after the 15th day of such month.
e. Actual Deferral Percentage Test.
1. The Actual Deferral Percentage ("ADP") for Participants who
are Highly-compensated Employees for each Plan Year and the
ADP for Participants who are Nonhighly-compensated Employees
for the same Plan Year must satisfy one of the following
tests:
A. The ADP for Participants who are Highly-compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are Nonhighly-compensated
Employees for the same Plan Year multiplied by 1.25;
or
B. The ADP for Participants who are Highly-compensated
Employees for the Plan Year shall not exceed the ADP
for Participants who are Nonhighly-compensated
Employees for the same Plan Year multiplied by two,
provided that the ADP for Participants who are
Highly-compensated Employees does not exceed the ADP
for Participants who are Nonhighly-compensated
Employees by more than two percentage points.
2. The ADP for any Participant who is a Highly-compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Nonelective Contributions
or Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) allocated
to his accounts under two or more arrangements described in
Section 401(k) of the Code that are maintained by the
Employer, shall be determined as if such Elective Deferrals
(and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both)
were made under a single arrangement. If a
Highly-compensated Employee
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<PAGE>
participates in two or more cash or deferred arrangements
that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate
if mandatorily disaggregated under Regulations under
Section 401(k) of the Code.
3. In the event that 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 this
Section shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For
plan years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(k) of the Code
only if they have the same plan year.
4. For purposes of determining the ADP of a Participant who is
a five-percent owner or one of the ten most highly-paid
Highly-compensated Employees, the Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions or both, if treated as Elective Deferrals for
purposes of the ADP test) and Plan Compensation of such
Participant shall include the Elective Deferrals (and, if
applicable, Qualified Nonelective Contributions and
Qualified Matching Contributions, or both) and Plan
Compensation for the Plan Year of Family Members (as
defined in Section 414(q)(6) of the Code). Family Members,
with respect to such Highly-compensated Employees, shall be
disregarded as separate Employees in determining the ADP
both for Participants who are Nonhighly-compensated
Employees and for Participants who are Highly-compensated
Employees.
5. For purposes of determining the ADP test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the
12-month period immediately following the Plan Year to which
contributions relate.
6. The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
7. The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
f. Distribution of Excess Contributions. Notwithstanding any other
provision of the Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed no later
than the last day of each Plan Year to Participants to whose
Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such Excess Contributions are
distributed more than two and one-half months after the last day
of the Plan Year in which they arose, a ten percent excise tax
will be imposed on the Employer maintaining the Plan with respect
to such amounts. Such distributions shall be made to
Highly-compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of such
Employees. Excess Contributions of Participants who are subject
to the Family Member aggregation rules of Section 414(q)(6) of
the Code shall be allocated among the Family Members in
proportion to the Elective Deferrals (and amounts treated
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<PAGE>
as Elective Deferrals) of each Family Member that is combined to
determine the combined ADP.
Excess Contributions shall be treated as Annual Additions under the
Plan.
Excess Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable to the
Participant's Elective Deferral Subaccount (and, if applicable, the
Qualified Nonelective Contribution Subaccount or the Qualified
Matching Contribution Subaccount, or both) for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the denominator
is the Participant's Account balance attributable to Elective
Deferrals (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss
occurring during such Plan year; and (2) ten percent of the amount
determined under (1) multiplied by the number of whole calendar
months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution
occurs after the 15th day of such month. Excess Contributions shall
be distributed from the Participant's Elective Deferral Subaccount
and Qualified Matching Contribution Subaccount (if applicable) in
proportion to the Participant's Elective Deferrals and Qualified
Matching Contributions (to the extent used in the ADP test) for the
Plan Year. Excess Contributions shall be distributed from the
Participant's Qualified Nonelective Contribution Subaccount only to
the extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral Subaccount and Qualified Matching
Contribution Subaccount.
6.4 Matching Contributions; Qualified Matching Contributions: If elected in
Item 6(A)(ii)(a) and Item 6(A)(ii)(b) of the Adoption Agreement, the Employer
will make Matching Contributions or Qualified Matching Contributions. These
Matching Contributions or Qualified Matching Contributions (or both) may either
be discretionary contributions or required contributions, depending on the
election of the Employer in the Adoption Agreement.
If the Employer has elected to make Matching Contributions in the Adoption
Agreement, and if the Employer actually makes Matching Contributions, the
Employer shall make such Matching Contributions and Qualified Matching
Contributions to the Participants which the Employer has designated in Item
6(A)(ii)(a)(2) and Item 6(A)(ii)(b)(3) of the Adoption Agreement.
a. Forfeitures and Vesting of Matching Contributions. Matching
Contributions shall be vested according to the Employer's
election in the Adoption Agreement. Matching Contributions shall
be fully vested at Normal Retirement Age, upon the complete or
partial termination of this Plan, or upon the complete
discontinuance of Employer contributions. Forfeitures of
Matching Contributions, other than Excess Aggregate
Contributions, shall be made in accordance with Section 4.4.
b. Limitation on Matching Contributions.
1. The Average Contribution Percentage (ACP) for Participants
who are Highly-compensated Employees for each Plan Year and
the ACP for Participants who are Nonhighly-compensated
Employees for the same Plan Year must satisfy one of the
following tests:
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A. The ACP for Participants who are Highly-compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are Nonhighly-compensated
Employees for the same Plan Year multiplied by 1.25;
or
B. The ACP for Participants who are Highly-compensated
Employees for the Plan Year shall not exceed the ACP
for Participants who are Nonhighly-compensated
Employees for the same Plan Year multiplied by two,
provided that the ACP for Participants who are
Highly-compensated Employees does not exceed the ACP
for Participants who are Nonhighly-compensated
Employees by more than two percentage points.
2. Multiple Use. If one or more Participants who are
Highly-compensated Employees participate in both a 401(k)
Arrangement and a plan subject to the ACP test maintained
by the Employer and the sum of the ADP and ACP of those
Highly-compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of those
Participants who are Highly-compensated Employees and who
also participate in the 401(k) Arrangement will be reduced
(beginning with such Highly-compensated Employee whose ACP
is the highest) so that the limit is not exceeded. The
amount by which each Highly-compensated Employee's
Contribution Percentage Amount is reduced shall be treated
as an Excess Aggregate Contribution. The ADP and ACP of
the Highly-compensated Employees are determined after any
corrections required to meet the ADP and ACP tests.
Multiple use does not occur if both the ADP and ACP of the
Highly-compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Nonhighly-compensated
Employees.
3. For purposes of this Section 6.4(b), the Contribution
Percentage for any Participant who is a Highly-compensated
Employee and who is eligible to have Contribution
Percentage Amounts allocated to his account under two or
more plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code, that
are maintained by the Employer, shall be determined as if
the total of such Contribution Percentage Amounts was made
under each plan. If a Highly-compensated Employee
participates in two or more cash or deferred arrangements
that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate
if mandatorily disaggregated under Regulations under
Section 401(m) of the Code.
4. In the event that 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 this
Section 6.4(b) shall be applied by determining the
Contribution Percentage of Participants as if all such
plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to
satisfy Section 401(m) of the Code only if they have the
same plan year.
5. For purposes of determining the Contribution Percentage of
a Participant who is a five-percent owner or one of the ten
most highly-paid Highly-compensated Employees, the
Contribution Percentage Amounts and Plan
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Compensation of such Participant shall include the
Contribution Percentage Amounts and Plan Compensation for the
Plan Year of Family Members (as defined in Section 414(q)(6)
of the Code). Family Members, with respect to
Highly-compensated Employees, shall be disregarded as
separate Employees in determining the Contribution Percentage
both for Participants who are Nonhighly-compensated Employees
and for Participants who are Highly-compensated Employees.
6. For purposes of determining the Contribution Percentage test
of Section 6.4(b)(1), Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan
Year if made no later than the end of the 12-month period
beginning on the day after the close of the Plan Year.
7. The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
8. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
c. Distribution or Forfeiture of Excess Aggregate Contributions.
1. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or,
if not forfeitable, distributed no later than the last day
of each Plan Year to Participants to whose Accounts such
Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the Family Member
aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the Family Members in proportion to the
Matching Contributions (or amounts treated as Matching
Contributions) of each Family Member that is combined to
determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than two and one-half
months after the last day of the Plan Year in which such
excess amounts arose, a ten percent excise tax will be
imposed on the Employer maintaining the Plan with respect
to those amounts. Excess Aggregate Contributions shall be
treated as Annual Additions under the Plan.
2. Determination of Income or Loss. Excess Aggregate
Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable
to Excess Aggregate Contributions is the sum of: (A) income
or loss allocable to the Participant's Employee
Contribution Subaccount, Matching Contribution Subaccount,
Qualified Matching Contribution Subaccount (if any, and if
all amounts therein are not used in the ADP test) and, if
applicable, Qualified Nonelective Contribution Subaccount
and Elective Deferral Subaccount for the Plan Year
multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year
and the denominator of which is the Participant's Account
balance attributable to Contribution Percentage Amounts
without regard to any income or loss occurring during such
Plan Year; and (B) ten percent of the amount determined
under (A) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of
distribution, counting the month of distribution if
distribution occurs after the 15th day of such month.
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<PAGE>
3. Forfeitures of Excess Aggregate Contributions. Forfeitures
of Excess Aggregate Contributions may either be reallocated
to the Accounts of Nonhighly-compensated Employees or
applied to reduce Employer contributions, as elected by the
Employer in Item 6(A) of the Adoption Agreement.
4. Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be forfeited, if forfeitable,
or distributed on a pro rata basis from the Participant's
Matching Contribution Subaccount and Qualified Matching
Contribution Subaccount (and, if applicable, the
Participant's Qualified Nonelective Contribution Subaccount
or Elective Deferral Subaccount, or both).
6.5 Qualified Nonelective Contributions: The Employer may elect to make
Qualified Nonelective Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement. In addition, in lieu of distributing Excess
Contributions as provided in Section 6.3(f) or Excess Aggregate Contributions
as provided in Section 6.4(c), and to the extent elected by the Employer in the
Adoption Agreement, the Employer may make Qualified Nonelective Contributions
on behalf of Participants who are Nonhighly-compensated Employees that are
sufficient to satisfy either the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to the Code.
6.6 Nonforfeitability of Certain Subaccounts: The Participant's Accrued Benefit
derived from Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions is nonforfeitable. Separate Subaccounts for
Elective Deferrals, Matching Contributions, Qualified Nonelective
Contributions, and Qualified Matching Contributions will be maintained
according to the provisions of Article VII for each Participant. Each
Subaccount will be credited with the applicable contributions and earnings
thereon.
6.7 Distribution Requirements:
a. Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each, are
not distributable to a Participant or to his Beneficiary or
Beneficiaries, in accordance with such Participant's or
Beneficiary's election, earlier than upon separation from service,
death, or disability, except as provided by the Employer in Item
6(A) of the Adoption Agreement.
b. All distributions are subject to the Spousal and Participant
consent requirements (if applicable) contained in Sections
411(a)(11) and 417 of the Code, and in Article X of this Plan. In
addition, distributions after March 31, 1988, that are triggered by
any of the last three events described in Item 6(A)(ii)(g) of the
Adoption Agreement must be made in a single sum.
6.8 Hardship Distribution:
a. If so elected by the Employer in Item 6(A) of the Adoption
Agreement, distribution of Elective Deferrals (and any earnings
credited to a Participant's Account as of the end of the last
Plan Year ending before July 1, 1989) may be made to a 401(k)
Participant in the event of Hardship. For purposes of this
Section 6.8, Hardship is defined as an immediate and heavy
financial need of the Participant (as defined in Section 6.8(d))
where such Participant lacks other available resources (pursuant
to Section 6.8(e)). Hardship distributions are subject to the
Spousal consent requirements (if applicable) contained in
Sections 401(a)(11) and 417 of the Code and Article X of this
Plan.
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b. Employer contributions pursuant to Section 6.3 (Elective Deferrals)
for a 401(k) Participant who receives a Hardship distribution from
this Plan will be suspended for 12 months after the receipt of the
distribution.
c. If a 401(k) Participant elects to resume Elective Deferrals after
the suspension period of paragraph (b) of this section, then for
the 401(k) Participant's taxable year immediately following the
taxable year of the Hardship distribution, the 401(k) Participant
may not make Elective Deferrals in excess of:
1. the applicable limit under Section 402(g) of the Code for
that taxable year, less
2. the amount of the 401(k) Participant's Elective Deferrals
for the taxable year of the Hardship distribution.
d. The following are the only financial needs considered to be
immediate and heavy:
1. Expenses incurred or necessary for medical care, described
in Section 213(d) of the Code, of the 401(k) Participant,
or of the 401(k) Participant's Spouse, children, or
dependents;
2. The purchase (excluding mortgage payments) of a principal
residence for the 401(k) Participant;
3. Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the 401(k)
Participant, or for the 401(k) Participant's Spouse,
children or dependents; or
4. The need to prevent the eviction of the 401(k) Participant
from, or a foreclosure on the mortgage of, the 401(k)
Participant's principal residence.
e. A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the 401(k) Participant only
if:
1. The 401(k) Participant has obtained all distributions,
(other than Hardship distributions) and all nontaxable
loans under all plans maintained by the Employer;
2. All plans maintained by the Employer provide that the 401(k)
Participant's Elective Deferrals (and any Employee
contributions) will be suspended for 12 months after the
receipt of the Hardship distribution;
3. The distribution is not in excess of the amount of an
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); and
4. All plans maintained by the Employer provide that the 401(k)
Participant may not make Elective Deferrals for the 401(k)
Participant's taxable year immediately following the taxable
year of the Hardship distribution in excess of:
A. the applicable limit under Section 402(g) of the Code
for such taxable year, less
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B. the amount of such 401(k) Participant's Elective
Deferrals for the taxable year of the Hardship
distribution.
6.9 Top-Heavy Requirements: Neither Elective Deferrals nor Matching
Contributions may be taken into account for the purpose of satisfying any
minimum allocation required under Article XII.
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Article VII: Accounts and Valuation
7.1 Establishment of Accounts: The Trustee or Custodian shall establish and
maintain a separate Account for the benefit of each Participant. Each Plan Year
the Trustee or Custodian shall credit each Participant's Account with the
Participant's share of any Employer contribution as determined under Articles
IV and VI. In addition, the Trustee or Custodian shall credit each
Participant's Account with the Participant's share of any earnings or losses in
accordance with Section 7.3 or any forfeiture in accordance with Section 4.4.
7.2 Establishment of Subaccounts: Under Section 5.2 of this Plan, if so
permitted according to the Adoption Agreement, a Participant may roll over
assets from another qualified plan to this Plan. Under Section 5.3, if so
permitted according to the Adoption Agreement, a Participant may directly
transfer assets from another qualified plan to this Plan, in a
Trustee-to-Trustee, or Custodian-to-Custodian, or Custodian-to-Trustee
transfer. Under Section 8.2, if so elected by the Employer in Item 9 of the
Adoption Agreement, a Participant who is within five years of the Plan's Normal
Retirement Age may elect to have his Account segregated and invested in the
specified forms of investments. In addition, if the Employer has so elected, or
if this Plan is a restatement of a prior plan or a successor to a prior plan,
the Trust or Custodial Account may hold Participant loans under Section 9.8, or
assets attributable to voluntary deductible or nondeductible employee
contributions under Section 5.1, or Elective Deferrals under Article VI. Assets
subject to any of these Sections of the Plan shall be held in subaccounts as
described below.
a. Rollover Subaccount. The Trustee or Custodian shall establish
and maintain a subaccount for any amounts rolled over from
another qualified plan. Amounts held in a Rollover Subaccount
shall be commingled with other assets of the Plan for investment
purposes, except as otherwise provided by Sections 8.2 or 8.3.
This Subaccount will be credited with earnings and losses as
provided in Section 7.3. A Participant shall have a fully vested
interest in his Rollover Subaccount.
b. Transfer Subaccount. The Trustee or Custodian shall establish
and maintain a subaccount for any amounts directly transferred
from another qualified plan. Amounts held in a Transfer
Subaccount shall be commingled with other assets of the Plan for
investment purposes, except as otherwise provided by Sections 8.2
or 8.3. This Subaccount will be credited with earnings and
losses as provided in Section 7.3. A Participant shall have a
fully vested interest in his Transfer Subaccount.
c. Segregated Subaccount. The Trustee or Custodian shall establish and
maintain a subaccount for amounts segregated at the request of a
Participant who is within five years of the Plan's Normal
Retirement Age according to Section 8.2. The Segregated Subaccount
shall not be commingled with other Plan assets for investment
purposes. Gains or losses on this Subaccount shall be accounted for
separately.
d. Participant Loan Subaccount. If a Participant has any outstanding
loans which were made in accordance with the terms of the prior
plan, or which are made in accordance with Section 9.8, the Trustee
or Custodian shall establish and maintain a subaccount for such
outstanding loans. This Participant Loan Subaccount will be
credited with any interest paid on any such loans.
e. Deductible Employee Contribution Subaccount. If this Plan is a
restatement of a prior plan or a successor to a prior plan, and
in accordance with the terms of the prior plan, a Participant had
made Deductible Employee Contributions to that prior plan, the
Trustee or Custodian shall establish and maintain a subaccount
for any amounts attributable to Deductible Employee
Contributions. The amounts in this Subaccount shall be
commingled with the other assets of the
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Plan for investment purposes, except as otherwise provided by
Section 8.3. This Subaccount will be credited with earnings and
losses as provided in Section 7.3. A Participant shall have a fully
vested interest in his Deductible Employee Contribution Subaccount.
No further Deductible Employee Contributions shall be permitted
under this Plan. In no event shall the Deductible Employee
Contribution Subaccount be used to pay for life insurance. The
Trustee or Custodian shall separately report the amount paid out
of the Deductible Employee Contribution Subaccount from other
benefits being distributed under the Plan.
f. Nondeductible Employee Contribution Subaccount. If this Plan is
a restatement of a prior plan or a successor to a prior plan, and
in accordance with the terms of the prior plan a Participant had
made voluntary nondeductible employee contributions to that prior
plan, the Trustee or Custodian shall establish and maintain a
subaccount for any amounts attributable to those voluntary
nondeductible employee contributions. The amounts in this
Subaccount shall be commingled with the other assets of the Plan
for investment purposes, except as otherwise provided by Section
8.3. This Subaccount will be credited with earnings and losses
as provided in Section 7.3. A Participant shall have a fully
vested interest in his Nondeductible Employee Contribution
Subaccount. No further nondeductible employee contributions
shall be permitted under this Plan.
g. Matching Contribution Subaccount. If this Plan includes a 401(k)
Arrangement, the Trustee or Custodian shall establish and
maintain a subaccount for any amounts attributable to Matching
Contributions. The amounts in this Subaccount shall be
commingled with the other assets of the Plan for investment
purposes, except as otherwise provided by Section 8.3. This
Subaccount will be credited with earnings and losses as provided
in Section 7.3.
h. Qualified Matching Contribution Subaccount. If this Plan
includes a 401(k) Arrangement, the Trustee or Custodian shall
establish and maintain a subaccount for any amounts attributable
to Qualified Matching Contributions. The amounts in this
Subaccount shall be commingled with the other assets of the Plan
for investment purposes, except as otherwise provided by Section
8.3. This Subaccount will be credited with earnings and losses
as provided in Section 7.3. A Participant shall have a fully
vested interest in his Qualified Matching Contribution Subaccount.
i. Qualified Nonelective Contribution Subaccount. If this Plan
includes a 401(k) Arrangement, the Trustee or Custodian shall
establish and maintain a subaccount for any amounts attributable
to Qualified Nonelective Contributions. The amounts in this
Subaccount shall be commingled with the other assets of the Plan
for investment purposes, except as otherwise provided by Section
8.3. This Subaccount will be credited with earnings and losses
as provided in Section 7.3. A Participant shall have a fully
vested interest in his Qualified Nonelective Contribution
Subaccount.
j. Elective Deferral Subaccount. If this Plan includes a 401(k)
Arrangement, the Trustee or Custodian shall establish and
maintain a separate subaccount for any amounts attributable to a
Participant's Elective Deferrals. The amounts in this Subaccount
shall be commingled with the other assets of the Plan for
investment purposes, except as otherwise provided by
Section 8.3. This Subaccount will be credited with earnings and
losses as provided in Section 7.3. A Participant shall have a
fully vested interest in his Elective Deferral Subaccount.
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7.3 Valuation and Allocation to Accounts: As of each Valuation Date, the
Trustee (or Custodian) shall determine the adjusted net worth of the Trust
assets (or assets held in a Custodial Account). The adjusted net worth shall be
the fair market value of all assets of the Plan excluding (a) Segregated
Subaccounts, Participant Loan Subaccounts, and any Subaccounts for which the
Participant directs investments, and the net income, gains, and losses
attributable thereto; (b) an amount equal to all contributions made for the
current Plan Year; and (c) the value of all insurance and annuity contracts.
The Trustee (or Custodian) shall allocate to the Account of each Participant
his proportionate share of the increase or decrease in the adjusted net worth
of the Trust (or Custodial Account) from the date of the most recent previous
valuation. The forfeited portion of a Participant's Account shall be held and
valued as any other Participant's Account until allocated as provided in
Section 4.4. The allocation of the increase or decrease in the adjusted net
worth shall be made in the ratio that the value of the Participant's Account
(after excluding the amounts described above) on the most recent previous
Valuation Date bears to the total value of all Participants' Accounts (after
excluding the amounts described above) on the same date. Notwithstanding the
foregoing, if the Employer has elected in the Adoption Agreement to include a
401(k) Arrangement, the Trustee (or Custodian) may allocate the increase or
decrease in net worth in a manner which accounts for the Participant's Elective
Deferrals. After the allocation described in the preceding sentences, the
following will be added to each Participant's Account: (1) the fair market
value of assets in any Segregated Subaccount or Participant Loan Subaccount for
such Participant or Beneficiary; (2) if such valuation is at the end of the
Plan Year, such Participant's share of forfeitures to be allocated for the Plan
Year, if any; (3) Employer contributions to be allocated to such Participant
for the Plan Year, if any; (4) the value of any Subaccounts for which the
Participant directs investments; and (5) the value of any insurance and annuity
contracts for such Participant. The Account balance so determined shall be the
Participant's Account balance until the next Valuation Date. For purposes of
valuing Accounts for payment to a Participant or Beneficiary, the Plan
Administrator may select additional Valuation Date(s) provided that such date
must fall on a regular business day of the Trustee (or Custodian), and shall be
selected and administered in a uniform and nondiscriminatory manner.
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<PAGE>
Article VIII: Investment of Contributions
8.1 Direction of Investments: Subject to the following sentences, the Trustee
or Investment Director shall have the specific responsibility to manage and
control the types of investments to be made for the Trust (or Custodial
Account, if applicable) in accordance with the provisions of Article XV. If the
Employer has designated a Custodian in addition to a Trustee, the Trustee shall
direct the Custodian with respect to the investment of all funds of the Trust,
whether awaiting investment or held pending distribution. If the Employer has
designated a Custodian, the Custodian shall invest all assets of the Plan in
accordance with instructions received from the Trustee or Investment Director.
If Participant direction of investments is not permitted by the Employer in
Item 9 of the Adoption Agreement, each Participant will have a ratable interest
in all assets of the Trust (or Custodial Account, if applicable). If the
Employer has elected in Item 9 of the Adoption Agreement, an eligible
Participant may instruct the Custodian or Trustee as to investment of that
portion of his Account which is permitted to be invested as described in
Sections 8.2 or 8.3 below.
8.2 Segregation of Accounts Before Retirement: If the Employer has elected to
permit segregation of investment before retirement in Item 9 of the Adoption
Agreement, a Participant may, at any time within the period of time elected by
the Employer in Item 9 of the Adoption Agreement preceding his Normal
Retirement Age, instruct the Trustee or Custodian in writing to cause all or
any portion of the amount credited to his Account to be invested in any fixed
or guaranteed income form of investment in which the Trustee or Investment
Director is empowered to invest. This includes, but is not limited to, savings
accounts and certificates, treasury bills, bonds and notes, commercial paper,
bank acceptances, and repurchase agreements. The Trustee (or Custodian) shall
then segregate an amount equal to the designated portion of the Participant's
Account balance within 60 days of the receipt of the Participant's written
direction, unless the segregation would require liquidation of Plan investments
in an imprudent manner. If for this reason the Trustee (or Custodian) is unable
to comply with the Participant's request, it shall so notify the Participant.
Subject to Section 7.2, the Trustee or Custodian shall then segregate the
appropriate amount and invest it as directed. All income, gains, and losses on
the segregated amount shall be credited or charged to the Participant's
Segregated Subaccount. If elected in Item 9 of the Adoption Agreement, all
additional costs arising from the segregation and direction of investments by
the Participant shall be paid directly by the Participant. If the Participant
fails to pay these costs, they shall be paid by the Trustee or Custodian from
the Participant's Segregated Subaccount. This Subaccount shall be distributed
at the same time and in the same form as are other funds of this Plan.
8.3 Participant Direction of Investments: If the Employer so chooses in Item 9
of the Adoption Agreement, a Participant, or his Beneficiary if the Participant
has died, may direct the Trustee or Custodian in writing to have all or any
portion of the amount credited or to be credited to his Account as designated
in Item 9 of the Adoption Agreement invested in the manner designated in Item 9
of the Adoption Agreement. Any portion of a Participant's Account which is not
directed by the Participant shall be commingled with the other assets of the
Trust (or Custodial Account, if applicable) for investment purposes.
a. Time and Manner of Investment Direction. Investment
direction shall be made in writing on a form prescribed by
the Plan Administrator and delivered to the Trustee or
Custodian at the times selected by Employer in Item 9 of
the Adoption Agreement. These instructions may be for the
purpose of an initial investment or for the Participant to
direct the sale or conversion of any asset in his Account,
subject to the amounts which may be directed and the time
of direction specified in Item 9 of the Adoption
Agreement. Upon receipt of written direction from the
Participant, the Trustee (or Custodian) shall segregate an
amount equal to the portion of the Participant's Accrued
Benefit which the Participant chooses to direct, determined
as of the most recent previous
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<PAGE>
valuation, subject to the following sentence. If the segregation of a
Participant's Account would require liquidation of Plan investments in an
imprudent manner, the Trustee or Custodian shall not comply with the
Participant's request and it shall so notify the Participant. Investments
acquired at the direction of a Participant or Beneficiary shall be segregated
by the Trustee (or Custodian) within the Participant's Account and all income,
gains, and losses thereon shall be credited or charged to that portion of the
Participant's Account. Such investments shall be held by the Trustee (or
Custodian) until the earlier of (1) receipt of further directions from the
Participant, (2) forfeiture of any portion of the Account balance of the
Participant, (3) distribution in accordance with this Plan, or (4) direction
from the Plan Administrator to dispose of such investments.
b. Cost of Investment. The cost of the exercise of investment
direction by a Participant or Beneficiary will be paid by
the Employer or by the Participant or Beneficiary, as
specified in Item 9 of the Adoption Agreement.
c. Specified Funds. If so provided in Item 9 of the Adoption
Agreement, a Participant or Beneficiary may request that
the portion of his Account which may be directed as
indicated in the Adoption Agreement be invested between and
among the funds designated for use in connection with this
Plan by the Trustee (or Custodian). Information regarding
these funds and any such other funds will be provided to
Participants and Beneficiaries in accordance with
paragraphs (d) and (e) below.
d. Information to be Furnished to Participants. The Plan
Administrator shall furnish to Participants and
Beneficiaries a description of the investment alternatives
available under the Plan. Participants and Beneficiaries
shall be informed of the investment objective of each
investment alternative, the risk and return characteristics
of each investment alternative, and the type and
diversification of assets comprising the portfolio of the
investment alternative. In addition, such other
information which is provided to the Plan Administrator in
connection with the investment alternatives offered under
this Plan, including but not limited to prospectuses,
financial statements and reports, the value of shares or
units in specific investment alternatives and the value of
shares or units in investment alternatives which are held
in the Account of a Participant or Beneficiary, as well as
any such other information necessary to provide each
Participant or Beneficiary with the ability to make an
informed choice with regard to the direction of investment
of his Account, shall be provided by the Plan Administrator
to Participants and Beneficiaries in a timely fashion as
prescribed by Regulations issued under Section 404(c) of
the Code. If an investment manager has been appointed,
Participants and Beneficiaries shall be informed of the
identity of the investment manager.
e. Relief of Fiduciary Liability. If the Employer elects Item
9(B)(iv)(4) and either Item 9(B)(v)(3), (4), or (5) of the
Adoption Agreement, this Plan is intended to comply with
Section 404(c) of ERISA by providing Participants and
Beneficiaries with the ability to exercise independent
control over the assets in their Accounts (or a portion
thereof), by providing a broad range of investment
alternatives, and by providing frequency of investment
direction which comports with the volatility of each
investment alternative. If, based on the choices selected
by the Employer in the Adoption
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<PAGE>
Agreement, the operation of this Section complies with Section
404(c) of ERISA, then the Trustee, the Plan Administrator, and any
other fiduciary with respect to this Plan shall not be liable for
any loss which results from a direction of investments under this
Section by a Participant or Beneficiary.
f. Participant as Investment Director. If no Trustee is named, the
Participant shall be the Investment Director, subject to the
limitations of this Section and Item 9 of the Adoption Agreement.
The Participant as Investment Director shall have the powers
described in Article XV of the Plan, unless otherwise limited in
the Adoption Agreement.
8.4 Insurance Provisions:
a. Purchase of Life Insurance Policies. If the Employer has so
elected in Item 9 of the Adoption Agreement, the Participant may
direct the Trustee or Custodian to cause assets of the Plan to be
invested in life insurance contracts issued on the Participant's
life by a legal reserve life insurance company; provided, that at
all times, the total of all premiums paid shall be less than (1)
50% (in the case of life insurance that provides for both
nondecreasing death benefits and nonincreasing premiums, or a
cash value) or (2) 25% (in the case of universal life insurance
or life insurance that does not provide for a cash value) of the
total of all Employer contributions allocated to an individual
Participant's Account. If both cash value and noncash value life
insurance is purchased, the total of the noncash value premiums
plus one-half of the cash value premiums shall not exceed 25% of
the total of all Employer contributions allocated to the
Participant's Account. On or before a Participant's termination
of employment, the Plan Administrator shall direct the Trustee
(or Custodian) to distribute or convert all life insurance
policies on the Participant's life, or transfer their ownership
according to Section 8.4(e), so that no portion of the Trust (or
Custodial Account) can be used to provide life insurance for the
Participant after his termination of employment.
b. Applications. Until a Participant executes the application forms
required for insurance coverage and furnishes the information
required on the forms, he shall not be entitled to life insurance
coverage. Until life insurance coverage is in force as defined by
the insurer, the total amount to be received by Beneficiaries upon
a Participant's death shall not exceed his Accrued Benefit on the
day before his death.
c. Designation of Beneficiary of Insurance. A Participant shall not
own, control or be deemed to have any incidents of ownership over
any insurance contract on his life purchased by the Trust (or
Custodial Account). All rights provided under an insurance
contract or permitted by the insurance company shall be reserved
to the Trustee (or Custodian, if applicable) as owner of the
contract. The insurance contract must provide that the proceeds
will be payable to the Trustee (or Custodian, if applicable),
however the Trustee (or Custodian) shall be required to pay over
all proceeds of the contract to the Participant's Designated
Beneficiary in accordance with the distribution provisions of
this Plan. A Participant's Spouse will be the Designated
Beneficiary of the proceeds in all circumstances unless a
Qualified Election has been made. Under no circumstances shall
the Trust (or Custodial Account) retain any part of the
proceeds. In the event of any conflict between the terms of this
Plan and the terms of any insurance contract purchased hereunder,
the Plan provisions shall control.
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<PAGE>
d. Payment of Premiums, Etc. The Trustee (or Custodian, if
applicable) shall pay premiums on insurance contracts held by the
Trust as they come due. Any dividends or credits earned on
insurance contracts will be allocated to the Participant's
Account derived from Employer contributions for whose benefit the
contract is held. The Trustee may decide at any time not to pay
the premium on any contract, in which event the Trustee shall, in
its sole discretion, decide what action, if any, is to be taken
including surrendering the policy for cash, borrowing against the
cash value of the policy to pay the premium, electing paid-up
insurance, or electing extended term coverage.
e. Disposition of Policies Upon Termination. When the employment of
any Participant terminates, or if this Trust terminates, the Plan
Administrator shall direct the Trustee (or Custodian, if
applicable) to dispose of any insurance contract on a
Participant's life. Subject to the applicable Participant and
Spousal consent requirements, the Trustee (or Custodian, if
applicable) may dispose of any contract by either (1)
surrendering the contract for its cash value, (2) converting the
contract to paid-up insurance for the Participant, or (3)
electing any option available under the contract for the
Participant's benefit. At the Participant's request, a contract
on his life may be transferred to him, provided that (A) the
Participant's Vested Accrued Benefit is at least equal to its
cash value, if any, or (B) a loan on the sole security of the
contract is first obtained by the Plan Administrator from the
insurer in an amount equal to the excess of the cash value over
the insured Participant's Vested Accrued Benefit, or (C) the
insured Participant pays to the Trust (or Custodial Account, if
applicable) the amount by which the cash value of the contract
exceeds the amount of his Vested Accrued Benefit. Any contract
providing for deferred payments which is distributed to a
Participant upon termination of employment shall be
nontransferable by its terms.
f. Additional Provisions as to Insurer. The insurer shall deal with
the Trustee (or Custodian, if applicable) as the sole owner of
any insurance contract, and the insurer shall have no obligation
to determine whether any action or failure to act by the Trustee
(or Custodian, if applicable) is in accordance with or authorized
by the terms of this Plan. The insurer shall be fully discharged
from all liability for any action taken or any amount paid in
accordance with the directions of the Plan Administrator, Trustee
(or Custodian, if applicable) and the insurer shall not be
obligated to follow the distribution or application of any amount
so paid. Any instrument executed by the Trustee (or Custodian,
if applicable) or Plan Administrator shall be accepted by the
insurer as the duly authorized act of the Trustee (or Custodian,
if applicable) or Plan Administrator.
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Article IX: Time and Amount of Distribution
9.1 Normal Retirement: Upon reaching his Normal Retirement Age, a Participant
shall be entitled to retire and elect payment of his Accrued Benefit in
accordance with Article X. If a Participant is still employed on the day he
reaches Normal Retirement Age, he shall be 100% vested in his Accrued Benefit.
9.2 Early Retirement: If Employer has provided for an Early Retirement Benefit
in Item 10(B) of the Adoption Agreement, a Participant who attains the age and
service requirements, if any, specified under that Item shall be entitled to
retire and receive payment of his Accrued Benefit in accordance with Article X.
If Employer has designated a service requirement for Early Retirement in Item
10(B) of the Adoption Agreement, and a Participant separates from employment
after completing the service requirement but before attaining the Early
Retirement Age, such a Participant shall, upon attainment of the Early
Retirement Age, be eligible to elect to receive the Early Retirement Benefit
specified in this Section 9.2. If a Participant is still employed on the day he
is entitled to elect Early Retirement, he shall be 100% vested.
9.3 Late Retirement: If a Participant continues as an Employee after the day he
reaches Normal Retirement Age, he shall continue to be a Participant and shall
be 100% vested in his Accrued Benefit. He shall be entitled to retire and
receive payment of his Accrued Benefit in accordance with Article X. If elected
by the Employer in Item 10(B) of the Adoption Agreement, a Participant who
attains Normal Retirement Age, but who has not terminated employment, may
receive a distribution of his Accrued Benefit in accordance with Article X.
9.4 Disability Retirement: If Employer has provided for Disability Retirement
under Item 10(B) of the Adoption Agreement, a Participant who (a) becomes
Disabled and (b) terminates employment due to that Disability, shall be 100%
vested in his Accrued Benefit. He shall be entitled to elect to receive payment
of his Accrued Benefit in accordance with Article X.
9.5 Death Benefits: If a Participant dies while still an Employee, he shall be
100% vested in his Accrued Benefit. His Vested Accrued Benefit shall be paid to
his Beneficiary. Upon the death of a Participant who is no longer an Employee,
and who has not already received his entire Vested Accrued Benefit, the unpaid
portion of his Vested Accrued Benefit shall be paid to his Beneficiary in the
manner designated by the Participant. All benefits under this Section shall be
paid in accordance with Article X of this Plan.
9.6 Termination, Resignation, or Discharge:
a. Vested Benefit Amount. A Participant whose employment terminates
and who is not entitled to any other Retirement or Death benefits
described in this Article IX shall be entitled to the vested
portion of his Accrued Benefit, determined according to the
vesting schedule set forth in Item 12(A) of the Adoption
Agreement. Such a Participant may request payment according to
the time provided by the Employer in Item 10 of the Adoption
Agreement. Any portion of a Participant's Account which is not
vested at the time his employment terminates shall be forfeited
and allocated in accordance with Section 4.4. A Participant
shall at all times have a fully vested and nonforfeitable
interest in the subaccounts representing (a) the rollover or
transfer of assets from another qualified plan or (b) the amounts
attributable to voluntary deductible or nondeductible employee
contributions, Elective Deferrals, Qualified Matching
Contributions, or Qualified Nonelective Contributions made to
this Plan or a prior plan.
b. Determining Service for Vesting. Except as provided in this
Section 9.6(b), the Years of Service with Employer described in
Item 12(B) of the Adoption Agreement shall be counted in
determining a Participant's Vested Accrued Benefit. However, an
Employee shall not accrue Hours of Service for purposes of
vesting while on a Leave
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<PAGE>
of Absence. In the case of a Participant who has five or more
consecutive one-year Breaks in Service, all service after such
Breaks in Service will be disregarded for the purpose of vesting
the Participant's Accrued Benefit that accrued before such Breaks
in Service. Such Participant's pre-break service will count in
vesting the post-break Accrued Benefit only if either:
1. such Participant has a Vested Accrued Benefit greater than
zero at the time of separation from service; or
2. upon returning to service the number of consecutive
one-year Breaks in Service is less than the number of Years
of Service.
Separate accounts will be maintained for the Participant's
pre-break and post-break Accrued Benefits. Both accounts will share
in the earnings and losses of the fund. Years of Service and Breaks
in Service for purposes of vesting shall always be computed on the
basis of a 12-month period corresponding to the Plan Year. If the
Plan Year is changed, vesting service shall be measured both during
the 12-month period corresponding to the Plan Year prior to the
change as well as during the 12-month period corresponding to the
Plan Year after the change. Hours of Service accrued during the
overlapping period shall count for both the 12-month period
corresponding to the Plan Year prior to the change and the 12-month
period corresponding to the Plan Year after the change. If a
Participant has 1,000 Hours of Service in each of these periods, he
shall be credited with two Years of Service for vesting purposes.
If the Employer maintains the plan of a predecessor employer,
service with the predecessor employer shall be treated as service
with the Employer.
9.7 Time of Payment:
a. Except as described in Section 9.3 and subject to the provisions of
this Section 9.7, Section 9.9, and Section 9.10, no payment of
benefits shall be made to a Participant before he actually
terminates employment.
b. Unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the latest of the close
of the Plan Year in which:
1. the Participant attains the Normal Retirement Age;
2. occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
3. the Participant terminates service with the Employer.
c. Notwithstanding the foregoing, the failure of a Participant and
Spouse to consent to a distribution while a benefit is Immediately
Distributable shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this
Section.
d. Notwithstanding any Participant election, the entire interest of a
Participant must be distributed or begin to be distributed no later
than the Participant's Required Beginning Date.
9.8 Loans: If the Employer has elected not to permit borrowing from the Trust
in Item 8(C) of the Adoption Agreement, a Participant shall not be permitted to
borrow from the assets of the Trust under this Plan. However, if this Plan is a
restatement of a prior plan or a successor to a prior plan, and the prior plan
permitted Participants or Beneficiaries to borrow from the plan, any loans that
are outstanding as of the Effective Date shall continue to be treated as
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Participant loans. Participants or Beneficiaries who have outstanding loans
shall not borrow additional amounts from the Plan. All outstanding loans shall
be repaid in accordance with their terms and the interest paid on these loans
shall be credited to the Participant Loan Subaccount of the Participant or
Beneficiary who originally borrowed the funds, in accordance with Article VII.
After these outstanding loans are repaid, no new loans shall be permitted.
If the Employer has chosen in Item 8(C) of the Adoption Agreement to
permit borrowing from the Trust, the following provisions shall apply:
a. In General. A Participant or Beneficiary may apply for a loan by
making a request to the Plan Administrator in writing. Loans
shall be made only on approval of the Plan Administrator, and
shall be available to Participants and Beneficiaries on a
reasonably equivalent and nondiscriminatory basis. The Plan
Administrator shall determine the amount of the loan, the
repayment terms, the interest rate, the security required, and
all other terms of the loan, and may adopt a written policy with
regard to the granting of loans under this Section. No
Participant loan shall exceed the limits set forth in Section
9.8(e). A Participant's acceptance of a loan shall constitute an
automatic and continuing assignment of his entire Vested Accrued
Benefit in this Plan as security for such loan until the loan is
repaid in full, with interest. Interest on a loan shall be at
approximately the same rate charged for similar loans under
similar circumstances by persons in the business of lending money
in the county of Employer's principal place of business.
b. Spousal Consent. A Participant must obtain the consent of his
Spouse, if any, for use of the Account balance as security for
the loan. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the
loan is to be so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a
Plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting Spouse or
any subsequent Spouse with respect to that loan. A new consent
shall be required if the Account balance is used for
renegotiation, extension, renewal, or other revision of the
loan. Spousal consent shall not be required for a loan to a
Participant from a Profit-Sharing Plan to which Section 10.4(e)
applies.
c. Default and Foreclosure. The Plan Administrator may, by written
notice, demand accelerated payment of the principal balance and
accrued interest of, or deduct from the Participant's Account
balance, any loan outstanding from the Trust, if (1) this Plan is
terminated, (2) benefits become payable to a Participant or his
Beneficiary, or (3) the Participant's employment terminates. In
no event shall payment be due prior to 60 days from the date of a
Participant's receipt of the Plan Administrator's demand for such
payment. If any amount of a loan to a Participant is overdue and
unpaid, this shall constitute default, and the Plan Administrator
may exercise all legal and equitable rights available to it to
collect the entire outstanding principal balance of such loan
plus accrued interest, including the right to levy against the
Participant's Vested Accrued Benefit. If a valid Spousal consent
has been obtained in accordance with Section 9.8(b), then,
notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Account Balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of
determining the amount of the Account balance payable at the time
of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's
Vested Account Balance (determined without regard to the
preceding sentence) is payable to the
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Surviving Spouse, then the Account balance shall be adjusted by
first reducing the Vested Account Balance by the amount of the
security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
d. Special Limitations. No loans will be made to any
Shareholder-employee or Owner-employee. For purposes of this
requirement, a Shareholder-employee means an employee or officer
of an electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year of
such corporation, more than five percent of the outstanding stock
of the corporation. Loans shall not be made available to Highly
Compensated Employees in amounts greater than amounts made
available to other Participants or Beneficiaries.
e. Limitation on Outstanding Loan Balance and Repayment. No loan to
any Participant or Beneficiary can be made to the extent that
such loan, when added to the outstanding balance of all other
loans to the Participant or Beneficiary, would exceed the lesser
of (1) $50,000.00 reduced by the excess (if any) of the highest
outstanding balance of loans during the one-year period ending on
the day before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made, or (2) one-half
of the present value of the nonforfeitable Accrued Benefit of the
Participant. For the purpose of the above limitation, all loans
from all plans of the Employer and other members of a group of
employers described in Sections 414(b), (c), and (m) of the Code
are aggregated. Furthermore, any loan shall by its terms require
that repayment of principal and interest be amortized in level
payments, payable not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan,
unless such loan is used to acquire a dwelling unit which within
a reasonable time (determined at the time the loan is made) will
be used as the principal residence of the Participant.
9.9 Withdrawals from Nondeductible Employee Contributions: If, according to the
provisions of Section 7.2(f), a Nondeductible Employee Contribution Subaccount
has been established for a Participant, then subject to the requirements of
Article X, a Participant may withdraw any amount from this Subaccount by giving
written notice to the Plan Administrator, which shall direct the Trustee to
make payment within 60 days after the Valuation Date following the date of such
notice; provided that the amount withdrawn shall not exceed the value of such
Subaccount on the date of withdrawal; and provided further, that the total of
all amounts withdrawn as of any time before termination of employment shall not
exceed the amounts attributable to the total contributions of the Participant
to the Subaccount up to such time. Any distribution from such Subaccount shall
be treated as being made proportionately from the Participant's contributions
and the earnings thereon in accordance with Section 72(e) of the Code.
9.10 Distribution of Certain Subaccounts: If this Plan provides a 401(k)
Arrangement as indicated by the Adoption Agreement, then in addition to the
other provisions of this Article IX, distribution of a Participant's interest
in his Elective Deferral Subaccount, his Qualified Matching Contribution
Subaccount, and his Qualified Nonelective Contribution Subaccount will be
available as indicated by the Employer in Item 6(A) of the Adoption Agreement,
and as provided in Section 6.7 of this Plan.
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Article X: Method of Distribution
10.1 Election of Participant Required: If the value of a Participant's Vested
Accrued Benefit derived from Employer and Employee contributions exceeds (or at
the time of any prior distribution exceeded) $3,500.00, and the benefit is
Immediately Distributable, the Participant and the Participant's Spouse (or
where either the Participant or the Spouse has died, the survivor) must consent
to any distribution of the Vested Accrued Benefit. The consent of the
Participant and the Participant's Spouse shall be obtained in writing within
the 90-day period ending on the Annuity Starting Date. The Plan Administrator
shall notify the Participant and the Participant's Spouse of the right to defer
any distribution until the Participant's Account balance is no longer
Immediately Distributable. Such notification shall also include a general
description of the material features, and an explanation of the relative values
of, the optional forms of benefit available under the Plan in a manner that
would satisfy the notice requirements of Section 417(a)(3) of the Code, and
shall be provided no less than 30 days and no more than 90 days prior to the
Annuity Starting Date. However, distribution may commence less than 30 days
after the notice described in the preceding sentence is given, provided (1) the
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, (2) the Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (3) the Participant,
after receiving the notice, affirmatively elects a distribution.
a. Limited Applicability. Notwithstanding the foregoing, only the
Participant need consent to the commencement of a distribution in
the form of a Qualified Joint and Survivor Annuity while the
Vested Accrued Benefit is Immediately Distributable; no consent
to the distribution in this form shall be required when the
benefit is no longer Immediately Distributable. Furthermore, if
payment in the form of a Qualified Joint and Survivor Annuity is
not required with respect to the Participant pursuant to Section
10.4(e), only the Participant need consent to any distribution of
a Vested Accrued Benefit that is Immediately Distributable; no
consent to this distribution shall be required when the benefit
is no longer Immediately Distributable. Neither the consent of
the Participant nor the Participant's Spouse shall be required to
the extent that a distribution is required to satisfy Section
401(a)(9) or Section 415 of the Code. In addition, upon
termination of this Plan, if the Plan does not offer an annuity
option (purchased from a commercial provider) and if the Employer
or any entity within the same controlled group as the Employer
does not maintain another defined contribution plan (other than
an employee stock ownership plan as defined in Section 4975(e)(7)
of the Code, the Participant's Vested Accrued Benefit will,
without the Participant's consent, be distributed to the
Participant. However, if any entity within the same controlled
group as the Employer maintains another defined contribution plan
(other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code) then the Participant's Vested
Accrued Benefit will be transferred, without the Participant's
consent, to the other plan if the Participant does not consent to
an immediate distribution.
For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of
the first Plan Year beginning after December 31, 1988, the
Participant's Vested Accrued Benefit shall not include amounts
attributable to accumulated Deductible Employee Contributions
within the meaning of Section 72(o)(5)(B) of the Code.
b. Payment of Vested Benefits of $3,500.00 or Less. Regardless of
the provisions of this Article X, if a Participant terminates
employment, retires, or dies and his Vested Account Balance is
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$3,500.00 or less, and the Employer has so elected in Item 10(B)
of the Adoption Agreement, the Plan Administrator may direct
the Trustee (or Custodian) to distribute the entire Vested
Account Balance to the Participant or his Beneficiary (in the
case of the Participant's death) in a single sum payment within
90 days after the Valuation Date which first follows the
Participant's termination of employment. If the present value
of the Vested Account Balance at the time of any distribution
exceeds $3,500.00, the present value of the Vested Account
Balance at any subsequent time will be deemed to exceed $3,500.00.
The nonvested portion of the Participant's Account, if any,
shall be treated as a forfeiture in accordance with Section 4.4.
If a Participant has no Vested Account Balance at the time of his
termination of employment, he shall be deemed to have received a
distribution of his entire Vested Account Balance at the time of
his termination of employment.
10.2 Distribution Requirements:
a. General Rules.
1. Subject to Section 10.4, the requirements of this Section
10.2 shall apply to any distribution of a Participant's
Vested Account Balance and will take precedence over any
inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this Section 10.2 apply to
calendar years beginning after December 31, 1984.
2. All distributions required under this Section 10.2 shall be
determined and made in accordance with Section 401(a)(9) of
the Code, including the minimum distribution incidental
benefit requirement of Proposed Regulation 1.401(a)(9)-2.
b. 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):
1. the life of the Participant,
2. the life of the Participant and a Designated Beneficiary,
3. a period certain not extending beyond the Life Expectancy
of the Participant, or
4. a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and a Designated
Beneficiary.
c. Determination of Amount to be Distributed Each Year. If the
Participant's interest is to be distributed in other than a
single sum, the following minimum distribution rules shall apply
on or after the Required Beginning Date:
1. Individual Account.
A. If a Participant's Vested Account Balance is to be
distributed over
i. a period not extending beyond the Life
Expectancy of the Participant or the Joint Life
and Last Survivor Expectancy of the Participant
and the Participant's Designated Beneficiary, or
ii.a period not extending beyond the Life
Expectancy of the Designated Beneficiary,
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<PAGE>
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 Participant's Vested
Account Balance by the Applicable Life
Expectancy.
B. For calendar years beginning before January 1, 1989, if
the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least fifty percent of the present value
of the amount available for distribution is paid within
the Life Expectancy of the Participant.
C. For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning
with distributions for the first Distribution
Calendar Year shall not be less than the quotient
obtained by dividing the Participant's Vested Account
Balance by the lesser of (i) the Applicable Life
Expectancy or (ii) if the Participant's Spouse is not
the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of
Proposed Regulation 1.401(a)(9)-2. Distributions
after the death of the Participant shall be
distributed using the Applicable Life Expectancy as
the relevant divisor without regard to Proposed
Regulation 1.401(a)(9)-2.
D. The minimum distribution required for the
Participant's first Distribution Calendar Year must
be made on or before the Participant's Required
Beginning Date. The minimum distribution for other
calendar years, including the minimum distribution
for the Distribution Calendar Year in which the
Employee's Required Beginning Date occurs, must be
made on or before December 31 of that Distribution
Calendar Year.
2. Other Forms. If the Participant's Vested Account Balance 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 proposed regulations thereunder.
d. Death Distribution Provisions.
1. Distribution Beginning Before Death. If the Participant dies
after distribution of his or her Vested Account Balance has
begun, the remaining portion of the Vested Account Balance
will continue to be distributed at least as rapidly as under
the method of distribution being used prior to the
Participant's death.
2. Distribution Beginning After Death. If the Participant
dies before distribution of his or her Vested Account
Balance begins, distribution of the Participant's entire
Vested Account Balance shall be completed by December 31 of
the calendar year containing the fifth anniversary of the
Participant's death except to the extent that an election
is made to receive distributions in accordance with (A) or
(B) below.
A. If any portion of the Participant's Vested Account
Balance is payable to a Beneficiary other than the
Spouse, distributions may be made over the life of the
Beneficiary or over a period certain not greater than
the Life Expectancy of the Beneficiary, commencing on
or
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before December 31 of the calendar year immediately
following the calendar year in which the Participant
died;
B. If the Beneficiary is the Participant's Surviving
Spouse, the date distributions are required to begin
in accordance with (A) above shall not be earlier
than the later of (i) December 31 of the calendar
year immediately following the calendar year in which
the Participant died and (ii) December 31 of the
calendar year in which the Participant would have
attained age 70-1/2.
If the Participant has not made an election pursuant to this
Article X by the time of his death, the Participant's
Beneficiary must elect the method of distribution no later
than the earlier of (i) December 31 of the calendar year in
which distributions would be required to begin under this
Section, or (ii) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the
Participant. If the Beneficiary does not elect a method of
distribution, distribution of the Participant's entire Vested
Account Balance must be completed by December 31 of the
calendar year containing the fifth anniversary of the
Participant's death.
3. For purposes of Section 10.2(d)(2) above, if the Surviving
Spouse dies after the Participant, but before payments to
such Spouse begin, the provisions of Section 10.2(d)(2), with
the exception of paragraph (B) therein, shall be applied as
if the Surviving Spouse were the Participant.
4. For purposes of this Section 10.2(d), any amount paid to a
child of the Participant will be treated as if it had been
paid to the Surviving Spouse if the amount becomes payable to
the Surviving Spouse when the child reaches the age of
majority.
5. For the purposes of this Section 10.2(d), distribution of a
Participant's interest is considered to begin on the
Participant's Required Beginning Date (or, if Section
10.2(d)(3) above is applicable, the date distribution is
required to begin to the Surviving Spouse pursuant to
Section 10.2(d)(2) above). If distribution in the form of
an annuity described in Section 10.2(c)(2) above
irrevocably commences to the Participant before the
Required Beginning Date, the date distribution is
considered to begin is the date distribution actually
commences.
e. Transitional Rule.
1. Notwithstanding the other requirements of this Article and
subject to the requirements of Section 10.4, distribution on
behalf of any Employee, including a five-percent owner, may
be made in accordance with all of the following requirements
(regardless of when such distribution commences):
A. The distribution by the Plan is one which would not
have disqualified the Plan under Section 401(a)(9) of
the Code as in effect prior to amendment by the Deficit
Reduction Act of 1984.
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B. The distribution is in accordance with a method of
distribution designated by the Employee whose Vested
Account Balance is being distributed or, if the
Employee is deceased, by a Designated Beneficiary of
such Employee.
C. Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
D. The Employee had accrued a benefit under the Plan as
of December 31, 1983.
E. The method of distribution designated by the Employee
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 Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
2. 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
Employee.
3. For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the Employee
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 Section
10.2(e)(1)(A) and 10.2(e)(1)(E).
4. If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) and the
proposed regulations thereunder. If a designation is
revoked subsequent to the date distributions are required
to begin, the Plan must distribute, by the end of the
calendar year following the calendar year in 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 proposed
regulations thereunder, but for the Section 242(b)(2)
election. For calendar years beginning after December 31,
1988, such distributions must meet the minimum distribution
incidental benefit requirements in Proposed Regulation
1.401(a)(9)-2. 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
shall apply.
10.3 Optional Forms of Benefit: The optional forms of benefit provided by this
Plan are as selected by Employer in Item 11 of the Adoption Agreement. A
married Participant's election of an optional form of payment will not be
effective unless it is a Qualified Election. A Qualified Election shall not be
valid unless it is made during the 90-day period prior to the Annuity Starting
Date. Payment of benefits from the Trust in a single sum or installments may be
in cash
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<PAGE>
or property valued at its fair market value. If property other than cash is
distributed, a Participant shall not be required to accept more than his pro
rata share of that property. If a Participant has elected to receive
substantially equal installment payments of his Vested Account Balance, his
Account shall be segregated from assets of the Trust held for other
Participants' Accounts and separately invested. All costs arising from the
investment of the Participant's Account once segregated shall be paid by the
Participant, and if not so paid, shall be deducted from his Account. Any
annuity contract disbursed herefrom must be nontransferable, and the terms of
any such annuity contract purchased and distributed by the Plan Administrator
or Trustee to a Participant or Spouse shall comply with the requirements of
this Plan.
10.4 Joint and Survivor Annuity Requirements:
a. Participants Covered. The provisions of this Section 10.4 shall
apply to any Participant who is credited with at least one Hour
of Service with the Employer on or after August 23, 1984, and
such other Participants as provided in Section 10.4(f).
b. Qualified Joint and Survivor Annuity. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the
90-day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of
a Qualified Joint and Survivor Annuity and an unmarried
Participant's Vested Account Balance will be paid in the form of
a life annuity. The Participant may elect to have such annuity
distributed upon attainment of the Earliest Retirement Age under
the Plan.
c. Qualified Preretirement Survivor Annuity. Unless an optional
form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a Participant dies before
the Annuity Starting Date, the Participant's Vested Account
Balance shall be applied toward the purchase of an annuity for
the life of the Surviving Spouse. The Surviving Spouse may elect
to have such annuity distributed within a reasonable period after
the Participant's death.
d. Notice Requirements.
1. In the case of a Qualified Joint and Survivor Annuity, the
Plan Administrator shall, no less than 30 days and no more
than 90 days prior to the Annuity Starting Date, provide each
Participant a written explanation of:
A. the terms and conditions of a Qualified Joint and
Survivor Annuity;
B. the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor
Annuity form of benefit;
C. the rights of a Participant's Spouse; and
D. the right to make, and the effect of, a revocation of
a previous election to waive the Qualified Joint and
Survivor Annuity.
2. In the case of a Qualified Preretirement Survivor Annuity
as described in Section 10.4(c), the Plan Administrator
shall provide each Participant within the applicable period
for such Participant a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such
manner as would be comparable to the explanation provided
for meeting the requirements of Section 10.4(d)(1)
applicable to a Qualified Joint and Survivor Annuity.
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The applicable period for a Participant is whichever of the
following periods ends last:
A. the period beginning with the first day of the Plan
Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
B. a reasonable period ending after the individual
becomes a Participant;
C. a reasonable period ending after Section 10.4(d)(3)
ceases to apply to the Participant;
D. a reasonable period ending after this Section 10.4
first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within
a reasonable period ending after separation from service in
the case of a Participant who separates from service before
attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events
described in (B), (C), and (D) is the end of the two-year
period beginning one year prior to the date the applicable
event occurs, and ending one year after that date. In the
case of a Participant who separates from service before the
Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior
to separation and ending one year after separation. If such a
Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be
redetermined.
3. Notwithstanding the other requirements of this Section
10.4(d), the respective notices prescribed by this Section
need not be given to a Participant if (A) the plan "fully
subsidizes" the costs of a Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity, and
(B) the plan does not allow the Participant to waive the
Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity and does not allow a married
Participant to designate a nonspouse beneficiary. For
purposes of this Section 10.4(d)(3), a Plan fully
subsidizes the costs of a benefit if no increase in cost,
or decrease in benefits, to the Participant may result from
the Participant's failure to elect another benefit.
e. Safe Harbor Rules.
1. This Section 10.4(e) shall apply to a Participant in a
profit-sharing plan, and to any distribution, made on or
after the first day of the first Plan Year beginning after
December 31, 1988, from or under a separate account
attributable solely to accumulated deductible Employee
contributions, as defined in Section 72(o)(5)(B) of the
Code, and maintained on behalf of a Participant in a money
purchase pension plan (including a target benefit plan), if
the following conditions are satisfied: (A) the
Participant does not or cannot elect payments in the form
of a life annuity; and (B) if the Employer has elected in
Item 11(B) of the Adoption Agreement that on the death of a
Participant, the Participant's Vested Account Balance will
be paid in a single sum to the Participant's Surviving
Spouse, but if there is no Surviving Spouse, or if the
Surviving Spouse has consented in
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a manner conforming to a Qualified Election, then to the
Participant's Designated Beneficiary. The Surviving Spouse
may elect to have distribution of the Vested Account Balance
commence within the 90-day period following the date of the
Participant's death. The Vested Account Balance shall be
adjusted for gains or losses occurring after the Participant's
death in accordance with the provisions of the Plan governing
the adjustment of Account balances for other types of
distributions. This Section 10.4(e) shall not be operative
with respect to a Participant in a profit-sharing plan if the
Plan is a direct or indirect transferee of a defined benefit
plan, money purchase plan, a target benefit plan, stock bonus
plan, or profit-sharing plan which is subject to the survivor
annuity requirements of Section 401(a)(11) and Section 417 of
the Code. If this Section 10.4(e) is operative, then the
provisions of this Article, other than Section 10.4(f), shall
be inoperative.
2. The Participant may waive the Spousal death benefit described
in this Section at any time during the Election Period
provided that no such waiver shall be effective unless it is
a Qualified Election (except for the notification requirement
referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
f. Transitional Rules.
1. Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits
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 Participant is credited with
at least one Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after
January 1, 1976, and such Participant had at least ten
years of vesting service when he separated from service.
2. Any living Participant not receiving 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 benefits paid in accordance
with Section 10.4(f)(4).
3. The respective opportunities to elect (as described in this
Section 10.4(f)) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise commence to
such Participants.
4. Any Participant who has elected pursuant to Section
10.4(f)(2) of this Article and any Participant who does not
elect under Section 10.4(f)(1) or who meets the
requirements of Section 10.4(f)(2) except that such
Participant does not have at least ten years of vesting
service when he separates from service, shall have his
benefits distributed in accordance with all of the
following requirements if benefits would have been payable
in the form of a life annuity.
A. Automatic joint and survivor annuity. If benefits in
the form of a life annuity become payable to a
married Participant who:
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i. begins to receive payments under the Plan on or
after Normal Retirement Age; or
ii. dies on or after Normal Retirement Age while
still working for the Employer; or
iii. begins to receive payments on or after the
Qualified Early Retirement Age; or
iv. separates from service on or after attaining
Normal Retirement Age (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 Participant has elected otherwise during the
election period. The election period must begin at
least six months before the Participant attains
Qualified Early Retirement Age and end not more than 90
days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
B. Election of early survivor annuity. A Participant
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 Participant 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 Participant had retired on
the day before his death. Any election under this
provision will be in writing and may be changed by
the Participant at any time. The election period
begins on the later of (i) the 90th day before the
Participant attains the Qualified Early Retirement
Age, or (ii) the date on which participation begins;
and ends on the date the Participant terminates
employment.
C. For purposes of this Section 10.4(f), Qualified Early
Retirement Age is the latest of:
i. the earliest date, under the Plan, on which the
Participant may elect to receive Retirement
benefits,
ii. the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Age, or
iii. the date the Participant begins participation.
10.5 Eligible Rollover Distributions.
a. General. This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this Section, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution that is
equal to at least $500 paid directly to an Eligible Retirement Plan specified
by the Distributee in a Direct Rollover.
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b. Definitions.
1. Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any
portion of the balance to the credit of the
Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or Life Expectancy) of the Distributee or
the joint lives (or Joint Life Expectancies) of the
Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years
or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of
the Code; 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); and any other
distribution that is reasonably expected to total
less than $200 during a year.
2. Eligible Retirement Plan. An Eligible Retirement Plan is
an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity
plan described in Section 403(a) of the Code, or a
qualified plan 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.
3. 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, as defined in Section 414(p) of the
Code, are Distributees with regard to the interest of
the Spouse or former Spouse.
4. Direct Rollover. A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
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Article XI: Participating Employers
11.1 Adoption of Plan by Two or More Employers: Two or more Employers may
maintain this Plan simultaneously for the benefit of their respective
Employees. To do so, each Employer shall execute the Adoption Agreement. This
execution may take place simultaneously, or the additional adopting Employer or
Employers may execute the Adoption Agreement at any time after the original
adopting Employer executed the Adoption Agreement. If two or more Employers
adopt this Plan, they shall be deemed Participating Employers.
11.2 Contribution to the Plan by Participating Employers: Each Participating
Employer shall contribute the amount determined under Section 4.1, but only on
behalf of the Participants employed by that Participating Employer. If the
Adoption Agreement executed by the Employer defines this Plan as a
Profit-Sharing Plan, each Participating Employer shall make the same percentage
contribution on behalf of its Employees, in accordance with Section 4.1.
11.3 Allocation of Contributions and Forfeitures: Allocations of a
Participating Employer's contribution shall be made in accordance with Articles
IV and VI. This allocation shall be made only among the Participants employed
by the Participating Employer which made the contribution. Allocations of
forfeitures (if any) shall be made in accordance with Section 4.4. However,
forfeitures shall be allocated only among the Participants who are employed by
the Participating Employer that employed the Participant who incurred the
forfeiture.
11.4 Delegation of Duties: If two or more Employers adopt and maintain this
Plan, an Employer may delegate to another Employer all of its rights, duties
and obligations under this Plan, except its obligation to make contributions on
behalf of its own Employees and any duties or obligations imposed by law which
cannot be delegated. Any delegation under this Section shall be made by written
resolution or other appropriate written action.
11.5 Designation of Agent: Each Participating Employer shall be deemed to have
designated irrevocably the Plan Administrator as its agent. Unless the context
of the Plan clearly indicates the contrary, the word "Employer" shall be deemed
to include each Participating Employer as related to its adoption of the Plan.
11.6 Discontinuance of Participation: Any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan. Written
evidence of any such discontinuance or revocation shall be delivered to the
Sponsoring Organization, to the Trustee and to the Plan Administrator. The
Trustee shall transfer any Plan assets allocable to the Participants of such
Participating Employer to the new custodian designated by such Employer, if it
has established a separate plan for its Employees. Upon such transfers, the
(former) Participating Employer shall be deemed to have created an individually
designed plan, and Section 13.1(b) shall apply. If no separate plan has been
established, the Plan Administrator, the Sponsoring Organization and the
Trustee shall proceed as though the Plan had been terminated with respect to
the Participants of such Participating Employer in accordance with Article
XIII. In no event shall any part of the assets of the Plan attributable to such
Participating Employer be used for or diverted to purposes other than for the
exclusive benefit of the Employees of such Participating Employer.
11.7 Use of Identical Trustee: Each Participating Employer shall be required to
use the same Trustee and all assets shall be held in one Trust. The Trustee
may, but shall not be required to, commingle all contributions made by
Participating Employers, as well as all investment gains, for investment
purposes. On the basis of information furnished by the Plan Administrator, the
Trustee shall keep separate accounting records for each Participating Employer
hereunder.
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Article XII: Top-Heavy Provisions
12.1 Top-Heavy Plan: For any Plan Year beginning after December 31, 1983,
this Plan is top heavy if any of the following conditions exists:
a. The top-heavy ratio for this Plan exceeds 60 percent and this Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
b. This Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the top-heavy ratio
for the group of plans exceeds 60 percent.
c. This Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the top-heavy ratio for
the Permissive Aggregation Group exceeds 60 percent.
12.2 Top-Heavy Ratio:
a. If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer
has not maintained any defined benefit plan which, during the
five-year period ending on the Determination Date(s), has or has
had accrued benefits, the top-heavy ratio for this plan alone or
for the Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of the Account
balances of all Key Employees as of the Determination Date(s)
(including any part of any Account balance distributed in the
five-year period ending on the Determination Date(s)), and the
denominator of which is the sum of all Account balances
(including any part of any Account balance distributed in the
five-year period ending on the Determination Date(s)), both
computed in accordance with Section 416 of the Code and the
regulations thereunder. Both the numerator and denominator of
the top-heavy ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required
to be taken into account on that date under Section 416 of the
Code and the regulations thereunder.
b. If the Employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the Employer
maintains or has maintained one or more defined benefit plans
which, during the five-year period ending on the Determination
Date(s), has or has had any accrued benefits, the top-heavy ratio
for any Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of account
balances under the aggregated defined contribution plan or plans
for all Key Employees, determined in accordance with (a) above,
and the present value of accrued benefits under the aggregated
defined benefit plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of
the account balances under the aggregated defined contribution
plan or plans for all Participants, determined in accordance with
(a) above, and the present value of accrued benefits under the
defined benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with Section
416 of the Code and the regulations thereunder. The accrued
benefits under a defined benefit plan in both the numerator and
denominator of the top-heavy ratio are increased for any
distribution of an accrued benefit made in the five-year period
ending on the Determination Date.
c. For purposes of (a) and (b) of this Section 12.2, the value of
account balances and the present value of accrued benefits will
be determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the Code
and the regulations
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thereunder for the first and second plan years of a defined
benefit plan. The account balances and accrued benefits of
a Participant (1) who is not a Key Employee but who was a
Key Employee in a prior year, or (2) who has not been
credited with at least one Hour of Service with any employer
maintaining the Plan at any time during the five-year period
ending on the Determination Date will be disregarded. The
calculation of the top-heavy ratio and the extent to which
distributions, rollovers, and transfers are taken into account
will be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions will not
be taken into account for purposes of computing the top-heavy ratio.
When aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (A) the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
maintained by the Employer, 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 rule of Section 411(b)(1)(C) of
the Code.
d. Present value for purposes of this Article XII shall be determined
only according to the interest rate and mortality table specified
by the Employer in Item 7(D) of the Adoption Agreement.
12.3 Top-Heavy Minimum Benefit: If the Plan is or becomes top heavy as provided
in Sections 12.1 and 12.2 in any Plan Year beginning after December 1, 1983,
the provisions of Sections 12.3 and 12.4 will supersede any conflicting
provisions in the Plan or Adoption Agreement.
a. Except as otherwise provided below, the Employer contributions
and forfeitures allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser of three percent
of such Participant's Compensation or, in the case where the
Employer has no defined benefit plan which designates this Plan
to satisfy Section 401 of the Code, the largest percentage of
Employer contributions and forfeitures, as a percentage of the
Key Employee's Compensation, as limited by Section 401(a)(17) of
the Code, allocated on behalf of any Key Employee for that year.
The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made
even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive an allocation, or would have
received a lesser allocation for the year because of (1) the
Participant's failure to complete 1,000 Hours of Service (or any
equivalent provided in the Plan), or (2) the Participant's Plan
Compensation is less than a stated amount.
b. The provision in Section 12.3(a) shall not apply to any
Participant who was not employed by the Employer on the last day
of the Plan Year.
c. Except as provided below in Section 12.3(d), the provision in
Section 12.3(a) shall not apply to any Participant to the extent
the Participant is covered under any other plan or plans of the
Employer and the Employer has provided in Item 7 of the Adoption
Agreement that the minimum allocation or benefit requirement
applicable to top-heavy plans will be met in the other plan or
plans.
d. Regardless of Section 12.3(c), if the Employer adopts the
Standardized Money Purchase Pension Plan and the Standardized
Profit Sharing Plan with 401(k) Arrangement as Paired Plans, and
such plans are top heavy, the plan designated by the Employer in
Item 7 of the Adoption Agreement will provide the minimum
allocation to
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Participants provided that: (1) each of the Paired Plans benefits
the same Participants, and (2) that the Plans have identical
eligibility requirements and entitlement to allocations provisions.
If the Paired Plans do not benefit the same Participants or the
Plans do not contain identical eligibility requirements or
entitlement to allocations provisions, each Plan will provide the
top-heavy minimum allocation as described in Section 12.3(a).
e. The minimum allocation required (to the extent required to be
nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
12.4 Vesting if Plan is Top Heavy: For any Plan Year in which this Plan is top
heavy, the Minimum Vesting Schedule elected by the Employer in Item 12 of the
Adoption Agreement will automatically apply to the Plan. The Minimum Vesting
Schedule applies to all benefits within the meaning of Section 411(a)(7) of the
Code except those attributable to Employee contributions, including benefits
accrued before the effective date of Section 416 of the Code and benefits
accrued before the Plan became top heavy. Further, no decrease in a
Participant's nonforfeitable percentage may occur in the event the Plan's
top-heavy status changes for any Plan Year. However, this Section does not
apply to the Account balance of any Employee who does not have an Hour of
Service after the Plan has initially become top heavy and such Employee's
Vested Accrued Benefit will be determined without regard to this Section 12.4.
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Article XIII: Amendment, Termination, and Merger
13.1 Amendment:
a. Amendment by Sponsoring Organization. The Sponsoring
Organization may amend any part of the Plan, subject to the
limitations of this Section 13.1.
b. Amendment by Employer. The Employer may (1) change the choice of
options in the Adoption Agreement, (2) add overriding language in
the Adoption Agreement when such language is necessary to satisfy
Section 415 or Section 416 of the Code because of the required
aggregation of multiple plans, and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan
to be treated as individually designed. An Employer who changes
the choice of options of the Adoption Agreement must obtain the
written acceptance of the Sponsoring Organization for such change
to be effective. An Employer that amends the Plan for any other
reason, including a waiver of the minimum funding requirement
under Section 412(d) of the Code, or who fails to obtain the
written acceptance of the Sponsoring Organization for a change of
choice of options in the Employer's Adoption Agreement, will no
longer participate in this Master or Prototype Plan and will be
considered to have an individually designed plan.
c. Internal Revenue Service Approval. The Sponsoring Organization
shall submit this Prototype Plan to the Internal Revenue Service
for issuance of an Opinion Letter as to its qualification under
the Code. An Employer may adopt this Prototype Plan after it is
submitted to the Internal Revenue Service but before a favorable
Opinion Letter is issued. When this Prototype Plan receives a
favorable Opinion Letter, such Prototype Plan in effect with
Sponsoring Organization shall automatically be superseded and
replaced by this Plan in its approved form without the necessity
of each Employer executing a new Adoption Agreement, unless
changes in the Adoption Agreement have been required in order to
obtain the favorable Opinion Letter. Each Employer shall be
governed by the terms of the final Plan.
d. Limitation on Amendment. No amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a
Participant's Accrued Benefit. Notwithstanding the preceding
sentence, a Participant's Account balance may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a plan amendment which has the effect
of decreasing a Participant's Account balance or eliminating an
optional form of benefit, with respect to benefits attributable
to service before the amendment, shall be treated as reducing an
Accrued Benefit. Furthermore, if the vesting schedule of a Plan
is amended, in the case of an Employee who is a Participant as of
the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as
of such date) of such Employee's Employer-derived Accrued Benefit
will not be less than the percentage computed under the Plan
without regard to such amendment.
e. Amendment of Vesting Schedule. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or
indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each
Participant with at least three Years of Service with the
Employer may elect, within a reasonable period after the adoption
of the amendment or change, to have the nonforfeitable percentage
computed
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under the Plan without regard to such amendment or change.
For Participants who do not have at least one Hour of
Service in any Plan Year beginning after December 31, 1988,
the preceding sentence shall be applied by substituting
"five Years of Service" for "three Years of Service" where
such language appears.
The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and
shall end on the latest of:
1. 60 days after the amendment is adopted;
2. 60 days after the amendment becomes effective; or
3. 60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
13.2 Termination of Plan:
a. Termination of Plan by Employer. By establishing this Plan, the
Employer represents that such Plan is intended to be a permanent
and continuing program for providing retirement benefits to
Participants. However, the Employer nevertheless reserves the right
to terminate the Plan at any time. An Employer may terminate this
Plan by filing with the Trustee and the Sponsoring Organization
written notice of intention to terminate.
b. Termination by Death, Disability or Dissolution. The Plan shall
terminate upon the death or disability of a sole proprietor, if
the Employer is a sole proprietorship, upon the termination of
the Partnership for federal income tax purposes, if the Employer
is a partnership, or upon a judicially declared bankruptcy or
insolvency or in the event of dissolution, merger or
consolidation, if the Employer is a corporation, unless in any
such case, provision is made by a successor to the business of
the Employer for the continuation of the Plan, upon terms
satisfactory to the Sponsoring Organization and the Trustee.
c. Vesting upon Termination. In the event of the termination or
partial termination of the Plan the entire Account balance of
each affected Participant will be nonforfeitable.
d. Discontinuance of Contributions. If the Adoption Agreement executed
by the Employer defines this Plan as a Profit-Sharing Plan, then in
the event of a complete discontinuance of contributions under the
Plan, the entire Account balance of each affected Participant will
be nonforfeitable.
13.3 Merger or Consolidation: The Employer may merge or consolidate this Plan
at any time, subject to the provisions of Sections 13.1 and 13.2. In the event
of a merger or consolidation with, or transfer of assets or liabilities to, any
other Plan, each Participant will receive a benefit immediately after such
merger, etc. (if the Plan then terminated) which is at least equal to the
benefit the Participant was entitled to immediately before such merger, etc.
(if the Plan had terminated).
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Article XIV: Administration of Plan
14.1 Selection of Plan Administrator: Employer shall in Item 2 of the Adoption
Agreement appoint a Plan Administrator, and shall in the Adoption Agreement
indicate the Employer's agent for purposes of notice. Employer may at any time
remove or replace the Plan Administrator. The Sponsoring Organization and the
Trustee may rely upon notification of the Plan Administrator received from the
Employer. All expenses of the Plan Administrator, including agent and legal
counsel fees, shall be paid by Employer. The Plan Administrator shall have a
lien against the Plan assets for expenses and, if they have not been paid
within 90 days after presentment to Employer, the Trustee shall pay the
expenses from the Trust upon demand.
14.2 Agents for Plan Administrator: The Plan Administrator may, by written
designation, employ suitable accountants, actuaries, attorneys, and other
agents to aid in carrying out its duties hereunder, all of whom shall first
acknowledge in writing their acceptance of such employment.
14.3 Actions of Plan Administrator: In exercising all discretionary powers
given to it by this document, the Plan Administrator shall have sole and
unlimited discretion, and its decisions shall be binding upon all parties. The
discretion of the Plan Administrator shall be exercised in a reasonable and
nondiscriminatory manner, and the decisions of the Plan Administrator shall be
uniformly applied.
14.4 Indemnification of Plan Administrator: The Employer shall indemnify and
hold harmless the Plan Administrator (if other than Employer) from any and all
claims, damages, expenses, losses and liability arising from any act or
omission of the Plan Administrator in its official capacity in the
administration of the Plan, including all expenses reasonably incurred in its
defense (in case Employer fails to provide the defense). Employer shall not
indemnify the Plan Administrator if the act or omission was due to willful
misconduct or gross negligence. The indemnification provisions of this Section
shall not relieve the Plan Administrator from any liability he may have under
ERISA for breach of a fiduciary duty.
14.5 Facility of Payment:
a. Payment to Incapacitated Persons. If a Participant or
Beneficiary is declared incompetent by a court having
jurisdiction, and a guardian of his estate is appointed, any
benefits to which he is entitled shall be paid to such guardian.
The Trustee shall have no liability for any payment to a
guardian, or for payment to a Participant who may be incompetent
but has not been declared incompetent by a court having
jurisdiction.
b. Inability to Locate Payee. If a Participant or Beneficiary
becomes entitled to benefits under this Plan, and such person
cannot be located within three years after reasonable efforts
have been made to locate him, the Plan Administrator may declare
such benefits forfeited. Any amounts forfeited in accordance
with this Section shall be treated and allocated in accordance
with Section 4.4. Such benefit shall be reinstated if a claim is
made by the Participant or Beneficiary. To the extent possible,
current forfeitures shall be used to restore the Participant's
Account. If necessary, a special Employer contribution shall be
made, subject to the limitations of the Code.
14.6 Claims Procedure: A Participant or Beneficiary who has a claim relating to
his benefits under this Plan or the operation or maintenance of this Plan shall
file that claim in writing with the Plan Administrator. If the Plan
Administrator creates a claim form, then all claims shall be filed on that
form. If the Plan Administrator denies a claim in whole or in part, the Plan
Administrator shall provide a written notice to the Participant or Beneficiary
setting forth (a) the specific reason for the denial or decision, (b) a
specific
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reference to pertinent Plan provisions upon which the denial or decision is
based, (c) a description of any additional material or information necessary
for the Participant or Beneficiary to perfect his claim and an explanation of
why the material or information is necessary, and (d) an explanation of the
claim review procedure set forth in this Section. This notice shall set forth
the above information in a manner calculated to be understood by the
Participant or Beneficiary. It shall be sent by first class mail to the last
known address of the Participant or Beneficiary who made the request or
objection. If the notice is not received and if the claim has not been granted
within 90 days after the request or objection is made, the claim shall be
deemed denied and shall be subject to review as set forth below. The
Participant or Beneficiary shall have 90 days from the date the claim is deemed
denied, or 90 days from receipt of the notice denying the claim, to deliver a
written application to the Plan Administrator requesting a review and
specifying the reasons his claim should be granted. If no such request is
filed, the denial of the claim shall be final. Upon receipt of this
application, the Plan Administrator shall review the claim. The Participant or
Beneficiary or his duly authorized representative may review all documents
relating to the claim and may submit comments in writing to the Plan
Administrator in support of his claim. The decision of the Plan Administrator
shall be presented in writing delivered to the Participant or Beneficiary or
his authorized representative within 60 days after the request for review is
received. In special circumstances, the decision may be delayed but must in any
event be rendered no later than 120 days after the request for review. The Plan
Administrator's decision shall include specific reasons for the decision,
written in a manner calculated to be understood by the Participant or
Beneficiary. It shall also contain specific references to the Plan provisions
upon which the decision is based. If no decision is made within the prescribed
time period, the claimant may consider the claim denied. Any person whose claim
has been denied in whole or in part must exhaust this administrative review
procedure prior to initiating any claim for judicial review.
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Article XV: Trust: Duties and Powers of Trustee, Custodian and Investment
Director
15.1 Single Trust Fund. If the Employer has appointed a Trustee in Item 1(C) of
the Adoption Agreement, the Trustee shall receive, hold, administer, and
distribute the assets of the Trust in accordance with the terms of this Plan.
The Trustee shall invest and reinvest the Trust assets, together with the
income thereon, as a single trust fund. The Trustee shall not be required to
segregate principal and income, except on its books, or to separately invest
the Accrued Benefit of any Participant in the Trust, unless specifically
provided in this Plan. The Trustee shall have no duty or authority to enforce
the payment of contributions by Employer.
15.2 Records and Reports. The Trustee shall keep accurate and detailed records
of its administration of the Trust, and such records shall be open to
inspection during regular business hours by any person designated in writing by
the Plan Administrator or Employer. As soon as administratively possible after
the last day of each Plan Year, but no later than 120 days after the end of the
Plan Year, the Trustee shall file with Employer a written statement setting
forth all investments, receipts, disbursements, and other transactions made
during the preceding year. Such statement shall contain such information and be
prepared in such a manner as to enable the Plan Administrator to comply with
all federal reporting requirements. Such statement shall contain an exact
description of all securities purchased and sold, with the cost or net proceeds
of sale, and shall identify the securities and investments held together with
the value of each item as of the last day of the Plan Year.
15.3 Compensation and Expenses of Trustee or Custodian. The Trustee (or
Custodian if applicable) shall be entitled to reasonable compensation for
services rendered and expenses incurred in connection with the administration
of the Trust, including agent and counsel fees. Employer shall pay such
compensation and expenses. A Trustee who is a full-time Employee of Employer or
of an employee organization whose members are covered by this Plan shall not
receive compensation, but shall receive reimbursement of expenses. To the
extent the Trustee (or Custodian if applicable) does not receive such
compensation and reimbursement of expenses properly due and payable by
Employer, it shall have a lien against the Trust assets or Custodial Account(s)
(if applicable). If such compensation or expenses are unpaid at the expiration
of 90 days after a claim is presented to Employer, the Trustee (or Custodian if
applicable) may deduct such amount from the Trust assets (or Custodial
Account).
15.4 Agents and Attorneys for Trustee. The Trustee may, by written designation,
employ accountants, actuaries, attorneys, and other agents to aid in carrying
out its duties hereunder, all of whom shall first acknowledge in writing their
acceptance of such employment. Any attorney so employed may be, but need not
be, attorney for Employer.
15.5 Powers. The Trustee as a fiduciary shall have, in addition to all other
powers granted to trustees by law, the authority to take all actions
appropriate to administer and carry out the provisions of this Plan including,
but not limited to, the following:
a. General Power Over Trust Funds. To sell, transfer, or
exchange any or all of the property of the Trust at such
prices and upon such terms as it considers proper; to
retain securities issued by any corporate trustee or any
parent or affiliate thereof serving hereunder; to lease as
lessor or lessee any property for any term of years without
limitation by the period of the Trust; to execute and
deliver such deeds, leases, and other instruments as it
considers proper in administering the Trust; to compromise
and adjust claims in favor of or against the Trust upon
such terms as it considers best for the Trust; and in
general, full power and authority to do everything in the
management of and for the preservation of the Trust assets
which is proper and in the best interests
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of the Trust; provided that the powers granted in this
paragraph (a) are subject to the provisions of paragraph
(b) hereof;
b. Investment Powers. To invest and reinvest Trust assets in
such securities, real estate, leaseholds, notes and other
evidences of indebtedness, certificates of deposit,
commercial paper, partnership interests, common trust
funds, insurance and annuity contracts, and other property
as the Trustee considers wise, without regard to any
statute or rule otherwise restricting investments by
fiduciaries; other than the provisions of ERISA and the
Code, as they may be amended; provided that the Trustee
shall have the express power to purchase securities on
margin which is not less than the minimum percentage
required by law; and provided that in further amplification
of the above-stated powers without limiting the breadth of
such powers in any way, the Trustee at all times shall have
the power to:
(1) purchase and sell listed or unlisted securities on the
New York Stock Exchange, American Stock Exchange, Midwest
Stock Exchange, and over-the-counter markets;
(2) purchase and sell put-and-call options, either covered or
uncovered;
(3) purchase and sell corporate and U.S. Treasury bonds, and
U.S. Treasury bills and notes;
(4) purchase and sell or withdraw from any investment trust or
fund, cash management, ready asset, liquid asset, or
similar type of account, whether listed or unlisted;
(5) open, operate, and maintain security brokerage accounts
in which any security may be bought or sold, on
margin or otherwise;
(6) hypothecate, borrow upon, purchase, and sell existing
securities in such accounts as the Trustee may deem
appropriate and useful;
c. Power to Vote Stock. To represent and vote stock held by the
Trustee at any corporate meeting; to represent and vote such
stock in reorganization proceedings; and to grant proxies
authorizing others to vote such stock at such meetings or in such
proceedings;
d. Right to Use Nominee. To take and hold any securities or other
assets in bulk, in bearer form, or in the name of either the person
acting as Trustee, or its nominee, without disclosing any fiduciary
capacity and to deposit securities or other assets with any
depository or depository's nominee; but the Trustee shall be
responsible for all assets of the Trust in whatever form or name
held or deposited;
e. Borrowing. To borrow money upon such terms as it considers proper
for the improvement or preservation of the Trust estate, and for
any sums so borrowed, to issue its promissory note or notes as
Trustee and secure the payment thereof by mortgaging or pledging
any part or all of the Trust assets.
15.6 Investment in Mutual Funds, Common Trust Funds, and Trustee Deposits. The
Trustee is authorized to invest any portion or all of the funds of the Trust in
shares of mutual funds. While a bank is Trustee of this Trust, the Trustee is
expressly authorized to invest assets of the Trust in its own deposits which
pay a reasonable rate of interest. The Trustee is also authorized to commingle
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assets of the Trust with the assets of other trusts through the medium of any
common trust fund established and administered by a bank or trust company; in
such case, the Trust created by any declaration of trust establishing such
common trust fund shall be deemed part of the Plan under which this Trust was
established and is administered.
The Trustee is authorized to commingle assets of the Trust with the
assets of other trusts, which in each case form a part of a pension or profit
sharing plan qualified under the Code and constitute an exempt trust within the
meaning of the Code. Such assets may be commingled through the medium of any
group trust for employee benefit trusts which provides for the pooling of the
assets of plans and trusts qualified under the Code, provided that such group
trust is exempt from taxation under Section 501(a) of the Code and satisfies
the requirements of Revenue Ruling 81-100, or any successor thereto. To the
extent of the equitable share of the Trust in any such group trust, the
instrument establishing such group trust, as the same has been or may be
amended, and the trust maintained thereunder, shall be deemed a part of this
Plan as if fully set forth herein. The provisions of the group trust shall
govern any investment of Trust assets in that group trust.
15.7 Miscellaneous Provisions. The Trustee shall not be obligated to pay
interest on reasonable amounts of uninvested funds. The Trustee shall not be
required to determine the identity or mailing address of a person entitled to
benefits under this Plan, and shall have discharged its obligation in that
respect when it has sent checks and other papers by ordinary mail to such
persons at the addresses last furnished to it by the Plan Administrator. The
Trustee may withhold payment of any funds subject to dispute until the dispute
is settled by the parties or resolved by a court having jurisdiction.
If two persons are serving as Trustee, they shall act by unanimous
consent, and if more than two persons are serving as Trustee, they shall act by
majority vote. The persons serving as Trustee may act either by vote at a
meeting or in writing without a meeting. The Trustee may, by agreement in
writing signed by all Trustees and delivered to Employer, designate one Trustee
to assume specific responsibilities, obligations, or duties, including, but not
limited to, the investment of a portion or all of the Trust assets, preparation
of reports, payment of benefits, and communication with Participants or
Beneficiaries. Any person dealing with the Trust may rely upon the act or the
authorization of the designated Trustee.
The Employer shall indemnify and hold the Trustee harmless from any and
all claims, losses, damages, expenses (including reasonable counsel fees
approved by Employer), and liability (including any reasonable amount paid in
settlement with the approval of Employer) arising from any act or omission of
the Trustee, unless such act or omission is due to the negligence or willful
misconduct of the Trustee.
15.8 Termination of Services of Trustee. A Trustee may be removed by Employer
by delivering to the Trustee a written notice to that effect. A Trustee may
resign as Trustee hereunder by delivering a written notice to Employer. Such
removal or resignation shall be effective on the date agreed to by Employer and
the Trustee. A trustee who is removed, resigns, or dies may be replaced by
Employer; provided, that upon the removal, resignation, or death of the sole
Trustee, a successor Trustee shall be appointed by Employer immediately. Such
successor Trustee, upon accepting the appointment in writing delivered to
Employer and to the replaced Trustee (or his executor or administrator), shall
become vested with the same rights, powers, duties, privileges, and immunities
as the replaced Trustee. If the replaced Trustee was the sole Trustee, he (or
his executor or administrator) shall immediately, upon delivery of the
acceptance of the successor Trustee, assign and deliver to the successor
Trustee all the funds, securities, and other property then held by it under the
Trust and such records as may reasonably be required by the successor Trustee
or Employer to properly administer the Trust. If the replaced Trustee was the
sole Trustee, he (or his executor or administrator) shall within 60 days from
the delivery of the acceptance of the successor Trustee, (or in the case of
death, within 60 days
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after the appointment of the executor or administrator) file with Employer a
statement of the actions and accounts of the Trust covering the period from the
last annual statement to the date of such acceptance or appointment, in a form
similar to such last annual statement. No successor Trustee shall have any duty
or obligation to inquire into the administration of the Trust prior to his
acceptance as Trustee.
15.9 Appointment of Custodian: The Employer may appoint a Custodian under the
Plan by designating one under Item 14 in the Adoption Agreement. The Custodian
shall accept appointment by executing the Adoption Agreement. The Custodian
shall have the powers, rights and duties as described in Sections 15.10 to
15.17 hereof.
15.10 Establishment of Custodial Account: The Custodian shall establish and
maintain a Custodial Account for the Plan or in the name of each Plan
Participant, as elected by the Employer in Item 14 of the Adoption Agreement.
The Custodian shall credit contributions to, and make payments and
disbursements from, this Account as directed by the Plan Administrator.
15.11 Transmittal of Contributions to Custodial Account: All contributions to
the Plan shall be transmitted to the Custodian by the Plan Administrator along
with written instructions specifying the Custodial Account(s) to which the
contributions are to be credited, the amounts to be credited thereto, and any
other relevant information required by the Custodian. The Custodian shall be
responsible only for the contributions it receives.
15.12 Disbursements for Custodial Account: The Custodian shall make payments
from the Custodial Account or the Trust from time to time in accordance with
instructions received from the Plan Administrator. Distributions to
Participants or their Beneficiaries shall be made in such manner and in such
amount as may be specified in writing by the Plan Administrator. The Custodian
shall be under no liability for any distribution made by it pursuant to any
such written instruction of the Plan Administrator, and the Custodian shall
have no duty to inquire as to whether any such distribution is made in
accordance with the provisions of this Plan.
15.13 Records and Reports from Custodian: The Custodian shall keep records of
all contributions, receipts, investments, distributions, disbursements and all
other transactions. Such records shall reflect separately the amounts
contributed to the Custodial Account or the Trust by the Employer and the
amounts held in the Custodial Account or the Trust for each Participant under
Articles V and VI. Within 90 days of the close of each Plan Year or after
distribution or transfer of a Participant's Account balance or the Custodian's
resignation or removal, the Custodian shall file with the Plan Administrator or
the Trustee a written report (which may consist of copies of regularly issued
broker-dealer statements) reflecting all transactions effected by the Custodian
during the period in question and including a statement of the assets in the
Trust and the fair market value of such assets. In the absence of the filing in
writing with the Custodian by the Plan Administrator or Trustee of exceptions
or objections to the report within 60 days after mailing such report, the Plan
Administrator or Trustee, as applicable, shall be deemed to have approved such
report and the Custodian shall be released, relieved and discharged from all
liability to anyone with respect to all matters set forth in such report as
though such account had been settled by the decree of a court of competent
jurisdiction. No person other than the Plan Administrator, Trustee, or legal
representative of any of the parties may require an accounting or bring any
action against the Custodian. The Custodian shall have the right at any time to
apply to a Court of competent jurisdiction for judicial settlement of its
accounts, or for a determination of any questions of construction which may
arise, or for instructions. The only necessary party defendant to such an
action shall be the Plan Administrator, Trustee, or his legal representative,
but the Custodian may, if it so elects, bring in as a party defendant any other
person or persons. The cost, including attorneys' fees, of any such action
shall be charged to the Trust as an administrative expense as provided herein.
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The Custodian shall file any tax forms or returns concerning the
Custodial Account in the Trust that are required by law to be filed by
Custodian.
15.14 Information for Participants; Voting: The Custodian shall deliver to the
Trustee or Investment Director (if applicable) all notices, prospectuses,
financial statements, proxies and proxy solicitation material relating to the
securities in the Trust. The Custodian shall not vote any shares held hereunder
except in accordance with the instructions of the Trustee or Investment
Director (if applicable).
15.15 Transfer, Resignation or Removal of Custodian: The Custodian may resign
by written notice to the Employer and to the Sponsoring Organization which
shall be effective 60 days after delivery. The Custodian may be removed by the
Employer by written notice to the Custodian and to the Sponsoring Organization
which shall be effective 60 days after delivery. The Custodian shall deliver
the contents of the Custodial Account in the Trust to its successor on the
effective date of the resignation or removal or as soon thereafter as
practicable, provided that this shall not waive any lien the Custodian may have
upon the Trust or Accounts for its compensation or expenses.
15.16 Custodian's Responsibilities and Obligations: The Custodian shall be
under no responsibility whatsoever except such responsibility as is
specifically set forth in this Plan. Custodian shall not make any investments
or dispose of any investment held in a Trust or Custodial Account except upon
the direction of the Trustee or Investment Director. Custodian shall be under
no duty to question any such direction, to review any securities or other
property held in the Trust or Custodial Account, or to make suggestions to the
Trustee or Investment Director with respect to the investment, retention or
disposition of any assets held in the Trust or Custodial Account. The Custodian
shall be under no liability for any loss of any kind which may result by reason
of any failure to act because of the absence of any such directions. The
Custodian shall have no discretion to direct any aspect of the business
administration of the Trust or Custodial Account, but is merely authorized to
acquire and hold particular investments specified by the Trustee or Investment
Director (if applicable). The Custodian shall be fully protected in acting upon
any instrument, certificate, or paper believed by it to be genuine and signed
or presented by the proper person or persons, and the Custodian shall be under
no duty to make any investigation or inquiry as to any statement contained in
any such writing but may accept the same as conclusive evidence of the truth
and accuracy of the statements therein contained. The Employer, Investment
Director, and/or Participant shall at all times fully indemnify and hold
harmless the Custodian from any liability which may arise hereunder except
liability arising from the negligence or willful misconduct of the Custodian.
The Custodian, pursuant to the instructions of Section 8.1, may
exercise or sell options, conversion privileges, or rights to subscribe for
additional securities and may make payments therefor. In the absence of such
directions, the Custodian shall take no action.
Pursuant to the directions of Section 8.1, the Custodian may consent to
or participate in dissolutions, reorganizations, consolidations, mergers,
sales, leases, mortgages, transfers or other changes affecting securities held
by the Custodian. In the absence of such directions, the Custodian shall take
no action.
Pursuant to the directions of Section 8.1, the Custodian may apply for
annuity contracts and may exercise all rights of policy ownership including but
not limited to conversion, surrender, designation of beneficiaries and the
election of dividend, nonforfeiture and settlement options. In the event of any
conflicts between the provisions of this Plan and the terms of any policy or
contract issued under the Plan, the provisions of the Plan will control.
The Custodian may hold any securities in the name of the Custodian,
without qualification or description, or in the name of any nominee.
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The Custodian may make, execute and deliver as Custodian any and all
contracts, waivers, releases or other instructions in writing necessary or
proper for the exercise of any of the foregoing powers. The Custodian shall not
be liable for any losses which may result from its failure to take action as
described above in the absence of directions from the Trustee or Investment
Director (if applicable). The Custodian may, pursuant to the directions of
Section 8.1, grant options to purchase securities held by the Custodian or to
repurchase options previously granted with respect to securities held by the
Custodian.
15.17 Types of Investments: The Custodian shall have no duty to diversify and
may make such investments in accordance with the instructions of the Trustee or
Investment Director (if applicable) without regard to whether such property is
authorized by the laws of any jurisdiction for custodial investment.
15.18 Duties of Investment Director: Subject to Article VIII and Item 9 of the
Adoption Agreement, the Investment Director as a fiduciary shall have the
authority to take all actions appropriate to direct the Custodian as to the
investment of the assets of the Custodial Account including, but not limited
to, the following:
a. General Power Over Custodial Account Investment. To direct the
Custodian to sell, transfer, or exchange any or all of the
property of the Custodial Account at prices and upon terms that
it considers proper; to compromise and adjust claims in favor of
or against the Custodial Account upon the terms that it considers
best for the Custodial Account, subject to the approval of the
Employer, and in general, full power and authority to do
everything in the management and for the preservation of the
Custodial Account assets which is proper and in the best
interests of the Custodial Account; provided that the powers
granted in this paragraph (a) are subject to the provisions of
paragraph (b) that follows.
b. Investment Powers. To direct the Custodian to invest and
reinvest Custodial Account assets in any securities, real estate,
leaseholds, notes and other evidences of indebtedness,
certificates of deposit, commercial paper, partnership interests,
common trust funds, and other property that the Investment
Director considers wise, without regard to any statute or rule
otherwise restricting investments by fiduciaries, other than the
provisions of ERISA and the Code; provided that the Investment
Director shall have the express power to direct the Custodian to
purchase securities on margin which is not less than the minimum
percentage required by law; and provided that in further
amplification of the above stated powers without limiting the
breadth of these powers in any way, the Investment Director at
all times shall have the power to direct the Custodian to:
1. purchase and sell listed or unlisted securities on the New
York Stock Exchange, American Stock Exchange, Midwest Stock
Exchange, and over-the-counter markets;
2. purchase and sell covered call options;
3. purchase and sell corporate and U.S. Treasury bonds, and
U.S. Treasury bills and notes;
4. purchase and sell or withdraw from any investment trust or
fund, cash management, ready asset, liquid asset, or
similar type of account, whether listed or unlisted; and
5. hypothecate, borrow upon, purchase, and sell existing
securities in whatever accounts the Investment Director may
deem appropriate.
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c. Power to Vote Stock. To represent and vote stock held by the
Custodial Account at any corporate meeting; to represent and vote
stock in reorganization proceedings; and to grant proxies
authorizing others to vote stock at such meetings or proceedings.
d. Right to Use Nominee. To take and hold any securities or other
assets in bulk, in bearer form, or in the name of either the person
acting as Custodian, or its nominee, without disclosing any
fiduciary capacity; and to deposit securities or other assets with
any depository; but the Custodian shall be responsible for all
assets of the Custodial Account in whatever form or name held or
deposited.
e. Mutual Funds. The Investment Director is authorized to direct
the Custodian to invest any portion or all of the funds of the
Custodial Account in shares of mutual funds.
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Article XVI: Assignment of Benefits
16.1 Rights not Assignable: No benefit or interest available hereunder will be
subject to assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to be a Qualified
Domestic Relations Order, as defined in Section 414(p) of the Code. A domestic
relations order entered before January 1, 1985, will be treated as a Qualified
Domestic Relations Order if payment of benefits pursuant to the order has
commenced as of such date, and may at the sole discretion of the Plan
Administrator be treated as a Qualified Domestic Relations Order if payment of
benefits has not commenced as of such date, even though the order does not
satisfy the requirements of Section 414(p).
16.2 Procedures for Reviewing Domestic Relations Orders: Upon receipt of a
domestic relations order, the Plan Administrator shall promptly notify the
Participant and each Alternate Payee who is named in the order of the Plan
Administrator's receipt of the order. The notification shall also include a
copy of these procedures. The notification shall be sent to the Participant and
each Alternate Payee at the address for each set forth in the domestic
relations order. An Alternate Payee may designate a representative to receive
copies of all notices that are to be sent to the Alternate Payee with respect
to the domestic relations order. The Plan Administrator shall determine, within
a reasonable period of time, whether the domestic relations order specifies all
of the following:
a. The name and last known mailing address of the Participant and the
name and mailing address of each Alternate Payee covered by the
order.
b. The amount or percentage of a Participant's benefits to be paid by
the Plan to each Alternate Payee or the manner in which such amount
or percentage is to be determined.
c. The number of payments or the period of time to which the order
applies.
The Plan Administrator shall also determine, within a reasonable period of
time, whether the domestic relations order meets the following requirements:
1. It does not require the Plan to provide for any type or form
of benefits, or any option, not otherwise provided under the
Plan.
2. It does not require the Plan to provide increased benefits
(determined on the basis of actuarial value).
3. It does not require that benefits be paid to an Alternate
Payee that are required to be paid to another Alternate Payee
under another order previously determined to be a Qualified
Domestic Relations Order.
While the qualified status of the domestic relations order is being determined,
the Plan Administrator shall instruct the Trustee to segregate or escrow any
amount payable to the Alternate Payee which is currently in pay status and the
Trustee shall so segregate any such amount. If the domestic relations order is
determined to be a Qualified Domestic Relations Order (QDRO) within 18 months
after its receipt by the Plan, the Plan Administrator shall direct the Trustee
to pay the segregated or escrowed amounts, plus any interest thereon, to the
person or persons entitled to receive them. If the domestic relations order is
determined not to be a QDRO or if the issue cannot be resolved within 18 months
after its receipt by the Plan and if benefits are in pay status, then the Plan
Administrator shall direct the Trustee to pay the segregated amounts, plus any
interest thereon, to the person or persons who would have been entitled to such
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amounts if there had been no domestic relations order. Any determination that a
domestic relations order is a QDRO which is made by the Plan Administrator
after the close of the 18-month determination period shall be applied
prospectively only. Notwithstanding anything herein to the contrary, payment to
an Alternate Payee may be made at any time after the domestic relations order
is determined to be a QDRO under Section 414(p) of the Code and any such order
shall not fail to be a QDRO solely because it calls for payment to be made to
an Alternate Payee as soon as administratively possible after such
determination by the Plan Administrator.
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Article XVII: Fiduciary Responsibility
17.1 Prudent Man Rule: In all actions taken under this Plan, each fiduciary
shall discharge his duties solely in the interest of the Participants and their
Beneficiaries, for the exclusive purpose of providing benefits to Participants
and their Beneficiaries and of defraying reasonable expenses of administering
the Plan. It shall do so with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims. Investments of the Plan shall be diversified
so as to minimize the risk of large losses, unless under the circumstances it
is clearly prudent not to do so. The investment of all or any portion of the
Plan assets in federally insured accounts shall be permitted. This Plan shall
be administered in accordance with the provisions of this document (including
the Adoption Agreement) and applicable law.
17.2 Responsibility for Agents: Subject to the other provisions of this
Article, neither the Employer, the Plan Administrator (if different than
Employer), the Investment Director, the Sponsoring Organization, the Custodian,
nor the Trustee, shall be liable for an act or omission of any agent appointed
by any one of them in carrying out the responsibility for which the agent was
appointed, unless with respect to the delegation of authority to appoint, or
the designation of such agent, or in continuing the delegation or designation,
the Employer, the Plan Administrator, the Investment Director, the Sponsoring
Organization, the Custodian, or the Trustee has breached its duties set forth
in this Plan.
17.3 Liability While Not Acting as a Fiduciary: No fiduciary of this Plan
shall be liable for a breach of fiduciary duty, unless the breach was
committed while he was a fiduciary.
17.4 Liability for Breach by Co-Fiduciary: A fiduciary shall not be
liable for the acts or omissions of a co-fiduciary unless:
a. he knowingly participates in or attempts to conceal an act or
omission of another fiduciary when he knows the act or omission
is a breach of fiduciary responsibility by the other fiduciary; or
b. he knows of a breach by another fiduciary and does not make
reasonable efforts to remedy the breach; or
c. the fiduciary's breach of his own fiduciary responsibility
enables the other fiduciary to commit a breach.
17.5 Prohibited Transactions: Subject to the last sentence of this Section, a
fiduciary shall not cause the Plan to engage in a transaction if he knows or
should know that the transaction is a direct or indirect:
a. sale, exchange, or leasing of any property between the Plan and a
disqualified person as defined in Section 4975(e)(2) of the Code;
b. lending of money or other extension of credit between the Plan
and a disqualified person, except as expressly permitted by this
Plan;
c. furnishing of goods, services, or facilities between the Plan and
a disqualified person;
d. transfer to, or use by, or for the benefit of, a disqualified
person of the income or assets of the Plan;
e. act by a disqualified person who is a fiduciary whereby he deals
with the income or assets of the Plan in his own interest or for
his own account; or
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f. receipt of any consideration for his own personal account by any
disqualified person who is a fiduciary from any party dealing
with the Plan in connection with a transaction involving the
income or assets of the Plan.
A fiduciary shall not in his individual or in any other capacity, act
in any transaction involving the Plan on behalf of a party (or representing a
party) whose interests are adverse to the interests of the Plan or the
interests of its Participants or Beneficiaries. A fiduciary who has authority
or discretion to control or manage the assets of the Trust shall not permit the
Trust to hold any Employer security or Employer real property if the fiduciary
knows or should know that holding the security or real property would violate
the limitations set forth in Sections 406 and 407 of ERISA. The restrictions of
this Section shall not be applicable to any transaction which is exempted from
the requirements of Sections 406 and 407 of ERISA by Section 408 of ERISA or
other statute, regulation, or ruling.
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Article XVIII: General Provisions
18.1 Participants to Furnish Information: Each Participant entitled to benefits
under the Plan shall furnish to the Plan Administrator evidence, data, or
information that the Plan Administrator considers necessary or desirable in
order to properly administer the Plan.
18.2 Successors and Assigns: The Plan shall be binding upon the
successors and assigns of Employer.
18.3 Limitation of Liability: Neither Employer, nor the Plan Administrator, nor
the Investment Director, nor the Sponsoring Organization, nor the Custodian,
nor the Trustee, shall be liable to any person in acting upon any notice,
request, consent, letter, telegram, or other instrument believed without
negligence and in good faith to be genuine and to have been signed or sent by
the proper person or persons.
18.4 Agency and Court Proceedings: In any application to or proceeding before
an administrative agency or in any court action, only the agent for the
Employer as designated in Item 2 of the Adoption Agreement (if different than
the Employer) shall be a necessary party. No Participant or other person having
an interest in the Plan shall be entitled to any notice or service of process,
except as required by law upon submission of this Plan or any amendment thereto
to the Internal Revenue Service for a determination as to its qualified status.
Any decision or judgment entered in any application, proceeding, or action
shall be conclusive upon all persons claiming an interest in this Plan. Service
of process shall be made upon Employer at its principal place of business and
upon the Plan Administrator at its principal place of business.
18.5 Application for Letter: Except as otherwise provided in Item 15 of the
Adoption Agreement, Employer shall promptly submit the Adoption Agreement and
all necessary supporting documents to the Internal Revenue Service with a
request for a determination letter that the Plan set forth in this document
meets the requirements of Section 401(a) of the Code, and shall notify each
Employee of this request on or before the submission date. In the event that
the Commissioner of Internal Revenue determines that the Plan is not initially
qualified under the Code, any contribution made incident to that initial
qualification by the Employer must be returned to the Employer within one year
after the date the initial qualification is denied, but only if the application
for the qualification is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe. If the Employer's
Plan fails to attain or retain qualification, such Plan will no longer
participate in this Prototype Plan and will be considered an individually
designed Plan.
76
McDONALD & COMPANY SECURITIES, INC.
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN
ADOPTION AGREEMENT 003
NONSTANDARDIZED PROFIT-SHARING PLAN
WITH 401(K) ARRANGEMENT
In accordance with the Employee Retirement Income Security Act of 1974
(ERISA), the undersigned Employer by this Adoption Agreement establishes the
Team Rental Group, Inc. 401(k) Profit Sharing Plan, Employer-assigned Plan
Number 001, upon the terms and conditions set forth in this Adoption Agreement
and the provisions of the McDonald & Company Securities, Inc. Prototype Defined
Contribution Retirement Plan document (the "Plan"), which the Employer has read,
accepts, and specifically incorporates herein by reference. All terms used in
this Adoption Agreement, when capitalized, shall have the meanings set forth in
Article II of the Plan document.
The Employer hereby certifies that the following information is correct
and makes the following elections granted under the provisions of the Plan.
1. PRELIMINARY INFORMATION
A. Employer
Name of Employer: Team Rental Group, Inc.
Business Address: 45 Riverside Avenue
City: Westport State: Connecticut Zip Code: 06880
Phone Number: 203/222-7053 Tax Identification Number: 59-3227576
The Employer is a: Sole Proprietor Partnership
X Corporation S Corporation
Employer's Year for Federal Income Tax or Tax Reporting Purposes:
X Calendar Year Fiscal Year beginning on first day of
----------------------- each year
(month)
B. Additional Adopting Employers
Effective January 1, 1996
Name of Additional Adopting Employer: Team Rental of Southern
California, Inc.
Business Address: 130 West Central Avenue
City: Santa Ana State: California Zip Code: 92707
Phone Number: 714/662-0635 Tax Identification Number: 95-4219502
The Employer is a: Sole Proprietor Partnership
X Corporation S Corporation
Employer's Year for Federal Income Tax or Tax Reporting Purposes:
X Calendar Year Fiscal Year beginning on first day of
------------------------ each year
(month)
Effective March 1, 1996
Name of Additional Adopting Employer: Arizona Rent-a-Car Systems, Inc.
Business Address: 2114 East Mohave, P.O. Box 20368
City: Phoenix State: Arizona Zip Code: 85036
Phone Number: 602/267-4000 Tax Identification Number: 86-0340172
The Employer is a: Sole Proprietor Partnership
X Corporation S Corporation
Employer's Year for Federal Income Tax or Tax Reporting Purposes:
Calendar Year X Fiscal Year beginning on first day of
March each year
-----------------
(month)
If more space is needed, attach additional sheets.
C. Trustee
The Trustee shall be the person(s)/entity named below, hereinafter
referred to as "Trustee".
Trustee: John P. Kennedy/Jeffrey D. Conqdon/Sandord Miller
Business Address: 45 Riverside Avenue
City: Westport State: Connecticut Zip Code: 06880
Phone Number: 203/222-7053 Tax Identification Number:
2. ADMINISTRATOR
The Plan Administrator, unless otherwise designated below, is the
Employer. The Plan Administrator will be the "named fiduciary" for the
Plan and shall be the agent for the service of legal process.
Name of Administrator: Team Rental Group, Inc.
Address: 45 Riverside Avenue
City: Westport State: Connecticut Zip Code: 06880
Phone Number: 203/222-7053 Tax Identification Number: 59-3227576
3. SPONSORING ORGANIZATION
A. The Sponsoring Organization of this Plan is:
McDonald & Company Securities, Inc.
800 Superior Avenue
Cleveland, OH 44114
(216) 443-2300
B. The Sponsoring Organization will inform the Employer of any
amendments made to the Plan, or of the discontinuance of its sponsorship of this
Plan as a Prototype Plan.
2
4. PLAN DATES
A. Effective Date (Choose one)
( ) This is a New Plan, with an effective date of ,
19 .
(X) This is an amended and restated Plan. The original Effective
Date of the Plan was January 1, 1996. The effective date of
this restatement is January 1, 1996.
B. Plan Year (Choose one)
i. Initial Plan Year (New Plan). If this is a New Plan its first
plan year shall run from to . Thereafter, the Plan
Year shall be the 12-consecutive month period commencing on
and each anniversary thereof.
If no Plan Year is specified, the Plan Year shall be the
12-consecutive month period ending on the last day of the
Employer's Accounting Period.
ii. Plan Year (Restated Plan). The Plan Year shall be the
12-consecutive month period commencing on January 1, 1996 and
ending on December 31, 1996 and any subsequent 12-month period
beginning on any January 1. For periods prior to the Effective
Date specified above, a Plan Year means any period specified in
prior plan documents. If no Plan Year is specified, the Plan
Year shall be the 12-consecutive month period ending on the last
day of the Employer's Accounting Period.
C. Limitation Year
The Limitation Year shall be the 12-consecutive month period
commencing on January 1, 1996 and each anniversary thereof. All
qualified plans maintained by the Employer must use the same
Limitation Year. If no Limitation Year is specified, the Limitation
Year shall be the Plan Year.
D. Valuation Date
The Valuation Date shall be last day of each (Choose one)
( ) Plan Year.
( ) Calendar Quarter.
(X) Other Daily.
If no date is chosen, the Valuation Date shall be the last day of
each Plan Year.
5. ELIGIBILITY
A. Age and Service Requirements
Each Employee will be eligible to participate in this Plan on the
applicable Participation Date specified in Item 5(C), in accordance
with Article III, except the following:
(X) Age Requirement. Employees who have not attained the age of
21 (cannot exceed 21).
3
(X) Service Requirement. Employees who have not completed Year(s)
of Service (cannot exceed 1 year unless the Plan provides a
nonforfeitable right to 100% of the Participant's Account balance
derived from Employer contributions after not more than two Years
of Service, in which case up to two years is permissible). If
the Year(s) of Service selected is or includes a fractional year,
an Employee will not be required to complete any specified number
of Hours of Service to receive credit for such fractional year.
(X) Employees included in a unit of employees covered by a collective
bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good
faith bargaining. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are employees who are owners, officers, or
executives of the Employer.
(X) Employees who are nonresident aliens and who receive no earned
income from the Employer which constitutes income from sources
within the United States.
(X) Other See Attachment A.
( ) Notwithstanding the requirements listed above, each employee who
is an employee on will be eligible to
participate in the Plan as of .
Individuals who become employed after
shall become participants on the Participation Date described in
Item 5(C) after completing the eligibility requirements described
above.
B. Elibibility for 401(k) Option
(X) This Plan shall include a 401(k) Arrangement in accordance with
Article VI. Each Employee shall be eligible to make the election
in Section 6.3 and participate in the 401(k) Arrangement of
Article VI, except the following:
(X) Age requirement. Employees who have not attained the age of 21
(cannot exceed 21).
(X) Service requirement. Employees who have not completed 1 Year of
Service (cannot exceed 1).
(X) Employees included in a unit of employees covered by a collective
bargaining agreement between the Employer and employee
representatives, if retirement benefits were the subject of good
faith bargaining. For this purpose, the term "employee
representatives" does not include any organization more than half
of whose members are employees who are owners, officers, or
executives of the Employer.
(X) Employees who are nonresident aliens and who receive no earned
income from the Employer which constitutes income from sources
within the United States.
(X) Other See Attachment B.
( ) Notwithstanding the requirements listed above, each employee who
is employed on will be eligible to participate
in the Plan as of .
4
Individuals who become employed after
shall become participants on the Participation Date described
in Item 5(C) after completing the eligibility requirements
described above.
C. Participation Dates (Choose (i), (ii), (iii), or (iv))
(i) ( ) Single Participation Date each year:
(Choose One) (month and day)
( ) An Employee shall become a Participant on the
Participation Date nearest the date he satisifies the
requirements of Item 5(A).
( ) An Employee shall become a Participant on the
Participation Date in the Plan Year in which the
Employee satisfies the requirements of Item 5(A)
(retroactive entry date).
(ii) (X) Dual Participation Date. The Participation Dates shall be
the first day of the Plan Year, and the first day of the
seventh month of the Plan Year. An Employee shall become a
Participant on the Participation Date (Choose one)
( ) nearest
(X) coincident with or first following
the date he satisfies the requirements of Item 5(A).
(iii) ( ) Multiple Participation Dates. The Participation Dates shall
be the first day of the period designated below coincident
with or first following the date an Employee satisfies the
requirements of Item 5(A). (Choose one)
( ) month
( ) calendar year quarter
( ) Plan Year quarter.
(iv) ( ) Daily Participation Dates. The Participation Dates shall be
the day coincident with the date an Employee satisfies the
requirements of Item 5(A).
If no date is specified, the Participation Date shall be a single
Participation Date as described in C(i) above, which shall be the first day of
the Plan Year nearest the date the Participant satisfies the requirements of
Item 5(A).
6. EMPLOYER CONTRIBUTIONS
A. Contributions
i. Allocation of Employer Discretionary Contributions
The Employer in its sole discretion may contribute any amount as
it shall decide for each Plan Year. Contributions to the Plan
shall be made from the general assets of Employer and shall not
exceed 15% of the total Plan Compensation paid to all
Participants in this Plan from its Effective Date. If this Plan
is maintained by an entity other than a corporation, the
contribution shall not exceed 15% of the Plan Compensation
5
paid to all Participants for the Accounting Period for which the
contribution is being made.
Employer Contributions shall be allocated to the Account of each
Participant entitled to an allocation under 6(C) as selected
below. The amount allocated on behalf of any individual
Participant will not exceed the lesser of 25% of Compensation or
$30,000,000 (or such larger amount determined by the Secretary
of Treasury).
(Note: the Plan Compensation of a Self-employed Individual is
defined as his net earnings from self-employment as reduced by
any deductible contribution to this Plan. As a result, the
maximum deductible percentage of Plan Compensation that may be
contributed for a Self-employed Individual is 13.04348% of his
net earnings from self-employment before any Employer
contributions to this Plan.)
(Choose one form of allocation)
( ) Uniform Allocation for all Participants
After allocation of any Minimum Contribution required by
Article XII because the Plan is top heavy, the Employer's
conribution shall be credited to the Account of each
Participant entitled to an allocation under Section 6(C) in
the proportion that each Participant's total Plan
Compensation for the Plan Year bears to the total Plan
Compensation of all Participants for the Plan Year.
(X) Allocation Integrated with Social Security
Subject to the overall permitted disparity limit. Employer
contributions for the Plan Year will be allocated to the
Accounts of Participants entitled to an allocation under
Section 6(C) as follows:
Step One: If the Plan is top heavy, contributions will be
allocated to each Participant's Account in the ratio that
each Participant's Plan Compensation bears to the total of
all Participants' Plan Compensation, but not in excess of
3% of each Participant's Plan Compensation.
Step Two: If the Plan is top heavy, any contributions
remaining after the allocation in Step One will be allocated
to each Participant's Account in the ratio that each
Participant's Plan Compensation for the Plan Year in excess
of the Integration Level bears to the total excess Plan
Compensation of all Participants, but not in excess of 3% of
each Participant's Plan Compensation in excess of the
Integration Level. For purposes of this Step Two, in the
case of any Participant who has exceeded the cumulative
permitted disparity limit described below, such
Participant's total Plan Compensation for the Plan Year
will be taken into account.
Step Three: Any contributions remaining after the allocation
in Step Two will be allocated to each Participant's Account
in the ratio that the sum of each Participant's Plan
Compensation and Plan Compensation in excess of the
Integration Level bears to the sum of all
6
Participants' Plan Compensation and Plan Compensation in
excess of the Integration Level, but not in excess of the
Profit Sharing Maximum Disparity Rate times the sum of the
Participant's Plan Compensation and Plan Compensation in
excess of the Integration Level. For purposes of this Step
Three, in the case of any Participant who has exceeded the
cumulative permitted disparity limit described below, two
times such Participant's total Plan Compensation for the
Plan Year will be taken into account.
Step Four: Any remaining Employer contributions will be
allocated to each Participant's Account in the ratio that
such Participant's Plan Compensation bears to the total of
all Participants' Plan Compensation.
Annual Overall Permitted Disparity Limit: Notwithstanding
the preceding paragraphs, for any Plan Year this Plan
benefits any Participant who benefits under another
qualified plan or simplified employee pension, as defined
in Section 408(k) of the Code, maintained by the Employer
that provides for permitted disparity (or imputes
disparity), Employer contributions will be allocated to the
Account of each Participant who is entitled to an allocation
under Section 6(C) in the ratio that such Participant's
total Plan Compensation bears to the total Plan Compensation
of all Participants.
Cumulative Permitted Disparity Limit: Effective for Plan
Years beginning on or after January 1, 1995, the cumulative
permitted disparity limit for a Participant is 35 total
cumulative permitted disparity years. Total cumulative
permitted years means the number of years credited to the
Participant for allocation or accrual purposes under this
Plan, any other qualified plan or simplified employee
pension plan (whether or not terminated) ever maintained by
the Employer. For purposes of determining the Participant's
cumulative permitted disparity limit, all years ending in
the same calendar year are treated as the same year. If the
Participant has not benefited under a defined benefit or
target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no cumulative disparity
limit.
The Profit Sharing Maximum Disparity Rate is equal to the
lesser of:
(a) If the plan is top heavy 2.7%; otherwise 5.7%; or
(b) the applicable percentage determined in accordance
with the table below:
<TABLE>
<CAPTION>
If the Integration Level the applicable
--------------
is more than but not more than percentage is
- ------------ ----------------- --------------
<S> <C> <C> <C>
If the Plan If the Plan
is top heavy is not top
heavy
$0 X 2.7% 5.7%
X 80% of TWB 1.3% 4.3%
80% of TWB Y 2.4% 5.4%
</TABLE>
7
TWB = Taxable Wage Base
X = the greater of $10,000 or 20 percent of the TWB
Y = any amount more than 80% of the TWB but less than 100% of the TWB
If the Integration Level selected is equal to the Taxable Wage Base, the
applicable percentage is 2.7% if the Plan is top heavy, and 5.7% if the
Plan is not top heavy.
The Taxable Wage Base is the contribution and benefits base in effect under
Section 230 of the Social Security Act in effect as of the beginning of the
Plan Year.
The Integration Level is equal to (Choose one):
(X) Taxable Wage Base
( ) $ (a dollar amount less than the Taxable Wage Base)
( ) % of TWB (not to exceed 100%)
ii. 401(k) Arrangement
(X) This Plan shall include a 401(k) Arrangement in accordance with
Article VI.
A Participant may contribute (Choose one)
( any amount up to % of Plan Compensation.
(X) any amount from 1% to 15% of Plan Compensation.
a. Matching Contributions. (Choose (1) or (2)).
(1) ( ) Employer may not make Matching Contributions.
(2) (X) Employer may make Matching Contributions as
described below.
(A) Matching Contributions. (Choose (i) or (ii) below).
(i) ( ) Discretionary Matching Contribution. In its
discretion the Employer may allocate an amount
to each eligible Participant's Matching
Contribution Subaccount. Such amount shall be
determined in the sole discretion of the Employer.
Eligible Participants are those Participants
designated as eligible below.
(ii) (X) Nondiscretionary Matching Contributions. The
Employer shall allocate to each Participant's
Matching Contribution Subaccount an
8
amount equal to 25% of the Participant's Elective
Deferrals. The Employer shall not match amounts
provided above in excess of (Choose one):
( ) $ .
( ) 4% of the Participant's Plan Compensation.
Eligible Participants are designated below.
(B) Eligibility for Matching Contributions. As selected
above, the Employer shall allocate the matching
contribution (if made) to (Choose one):
(i) (X) all 401(k) Participants.
(ii) ( ) all 401(k) Participants who are Nonhighly-
compensated Employees
who make Elective Deferrals to the Plan.
(C) Matching Contributions will be vested in accordance with
the following schedule (Choose one):
(i) (X) nonforfeitable at all times.
(ii) ( ) the vesting schedule selected by the Employer in
Item 12 of ths Adoption Agreement.
b. Qualified Matching Contributions. (Choose (1) or (2)).
(1) ( ) Discretionary Qualified Matching Contributions. In
its discretion the Employer may make Qualified
Matching Contributions to the Plan on behalf of the
Participant selected below.
(2) ( ) Nondiscretionary Qualified Matching Contributions.
The Employer shall contribute and allocate to each
Participant's Qualified Matching Contribution
Subaccount an amount equal to % of the Participant's
Elective Deferrals. The Employer shall not match
amounts provided above in excess of (Choose one).
$ .
% of the Participant's Plan Compensation.
(3) As selected above the Employer will allocate Qualified
Matching Contributions (if made) to the Plan on behalf
of (Choose one).
9
( ) all 401(k) Participants
( ) all 401(k) Participants who are Nonhighly-
compensated Employees
who make Elective Deferrals to the Plan.
c. Qualified Nonelective Contributions. The Employer may make
Qualified Nonelective Contributions to the Plan in such amount
and at such times as may be determined by the Employer. Allocation
of Qualified Nonelective Contributions shall be made to the Accounts
of (Choose one):
( ) all Participants.
(X) all Participants who are Nonhighly-compensated Employees.
Allocation of Qualified Nonelective Contributions shall be made
(Choose one):
(X) in the ratio which each Participant's Plan Compensation for
the Plan Year bears to the total Plan Compensation of all
Participants for such Plan Year.
( ) in the ratio which each Participant's Plan Compensation not
in excess of $ for the the Plan Year bears to the total
Plan Compensation of all Participants not in excess of $
for such Plan Year.
d. Actual Deferral Percentage (ADP) Test. Qualified Matching
Contributions and Qualified Nonelective Contributions may be taken
into account as Elective Deferrals for purposes of calculating the
ADP. In determining Elective Deferrals for the purpose of the ADP
test, the Employer shall include Qualified Matching Contributions
and Qualified Nonelective Contributions under this Plan or any other
plan of the Employer, as provided by Regulations. The Amount of
Qualified Matching Contributions and Qualified Nonelective
Contributions made and taken into account as Elective Deferrals
for purposes of calculating the ADP, subject to such other
requirements as may be prescribed by the Secretary of the Treasury,
shall be such as are needed to meet the Actual Deferral Percentage
test stated in Article VI.
e. Average Contribution Percentage. In computing the Average
Contribution Percentage, the Employer shall take into account,
and include as Contribution Percentage Amounts. Elective Deferrals
and Qualified Nonelective Contributions under this Plan or any
other plan of the Employer, as provided by Regulations. The amount
of Elective Deferrals and Qualified Nonelective Contributions that
are made under this Plan and taken into Account as Contribution
Percentage Amounts for purposes of calculating the Average
Contribution Percentage, subject to such other requirements as
may be prescribed by the Secretary of the Treasury, shall be such
as are needed to meet the Average Contribution
10
Percentage test stated in Article VI. Forfeitures of Excess
Aggregate Contributions shall be (Choose one):
(X) applied to reduce Employer contributions.
( ) allocated, after all other forfeitures under the Plan, to each
Participant's Matching Contribution Subaccount in he ratio which
each Participant's Plan Compensation for the Plan Year bears to
the total Plan Compensation of all Participants for such Plan
Year. Such forfeitures will not be allocated to the Account of
any Highly-compensated Employee.
f. Excess Elective Deferrals. Participants who claim Excess Elective
Deferrals for the preceding taxable year must submit their claims
in writing to the Plan Administrator by March 15. (Specify a date
before April 15 to allow the Plan Administrator to distribute any
Excess Elective Deferrals by April 15.)
g. Distribution of Elective Deferrals, Qualified Nonelective
Contributions, and Qualified Matching Contributions. Distribution
of such amounts shall be in accordance with Article X of the Plan.
Distribution of such amounts may also be made upon the occurrence
of the following events (Choose all that apply):
( ) the attainment of age 59-1/2 by a Participant. See Attachment C.
(X) the termination of the Plan without the establishment of another
defined contribution plan, other than an employee stock ownership
plan (as defined in Section 4975(e) or Section 409 of the Code)
or a simplified employee pension plan as defined in Section
408(k) of the Code.
(X) the disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of
Section 409(d)(2) of the Code) used in a trade or business of
such corporation if such corporation continues to maintain
this Plan after the disposition, but only with respect to
Employees who continue employment with the corporation
acquiring such assets.
(X) the disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of
Section 409(d)(3) of the Code) if such corporation continues to
maintain this Plan, but only with respect to Employees who
continue employment with such subsidiary.
h. Hardship Distributions (Choose one):
( ) The Employer will permit distribution of a Participant's
Elective Deferrals on account of the Hardship of the
Participant as described in Section 6.8.
(X) The Employer will not permit distribution of a Participant's
Elective Deferrals on account of
11
the Hardship of the Participant as described in Section 6.8.
B. Compensation
Plan Compensation for purpose of contributions will mean all of
each Participant's W-2 earnings which are actually paid to the
Participant for (Choose one):
(X) the Plan Year.
( ) a 12-consecutive month period ending with or within the Plan
Year, commencing on . For Employees whose
date of hire is less than 12 months before the end of the 12
month period designated above, compensation will be determined
over the Plan Year.
( ) the calendar year ending with or within the Plan Year.
If no period is specified, Plan Compensation shall be determined
based on the Plan Year.
Plan Compensation ( ) shall include (X) shall not include Employer
contributions made pursuant to a salary reduction agreement which
are not includible in the gross income of the Employee under
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
C. Entitlement to Allocation
Participants entitled to an allocation of the Employer contribution
described in Item 6(A)(i) shall be those who (Choose all that apply):
(X) are employed on the last day of the Plan Year for which the
Employer contribution is made.
(X) terminate employment with the Employer during the Plan Year
for which the contribution is made, but only if the Participant
has been credited with at least 501 Hours of Service during
that Plan Year.
( ) are credited with at least (not more than 1,000) Hours of
Service during the Plan Year for which the Employer contribution
is made, whether or not employed by the Employer on the last day
of the Plan Year.
( ) are employed on the last day of the Plan Year for which the
Employer contribution is made and are credited with at least
(not more than 1000) Hours of Service during the Plan Year for
which the contribution is made.
7. LIMITATION OF ALLOCATIONS
If the Employer maintains or ever maintained another qualified plan in which
any Participant in this Plan is (or was) a participant or could become a
participant, the Employer must complete this section.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a Master
or Prototype Plan (Choose one):
(X) the provisions of Section 4.6 will apply as if the other plan
were a Master of Prototype Plan.
( ) --------------------------------------------------------------
12
--------------------------------------------------------------
--------------------------------------------------------------
(Provide the method under which the plans will limit total
Anual Additions to the Maximum Permissable Amount, and will
properly reduce any Excess Amounts, in a manner that precludes
Employer discretion.)
B. If the Participant is or has ever been a participant in a defined
benefit plan maintained by the Employer, the amount of any Annual
Additions to a Participant's Account will be limited as follows:
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
C. The minimum allocation required for any year in which this Plan is
top heavy (Choose one):
(X) shall be made to this Plan.
( ) shall be made to another plan maintained by the Employer as
follows: ----------------------------------------------------
-------------------------------------------------------------
D. Present value: For purposes of establishing present value to
compute the top-heavy ratio, any benefit shall be discounted only
for mortality and interest based on an interest rate of 6% and the
UP 1984 Mortality Table unless otherwise specified below:
Interest Rate: -----%
Mortality Table: --------------------------------------------
8. ROLLOVERS AND TRANSFERS TO PARTICIPANT'S ACCOUNT; LOANS TO PARTICIPANTS
A. Rollovers (Choose one):
(X) This Plan shall permit an Employee to roll over cash or other
property he has received from his interest in another qualified
plan, according to Section 5.2.
( ) This Plan shall not accept rollover contributions from Employees.
B. Transfers (Choose one)
(X) This Plan shall permit an Employee to request a direct transfer
to this Plan of his interest in another qualified plan, according
to Section 5.3.
( ) This Plan shall not accept transfers from another qualified plan.
C. Loans (Choose one):
(X) This Plan shall permit a Participant or Beneficiary to borrow
from his Vested Account Balance.
( ) This Plan shall not pemit loans to Participants or Beneficiaries.
9. INVESTMENT DIRECTION (Choose one source of investment direction between A
or B)
13
A. ( ) A Participant may not request that all or any portion of his
Account be segregated and invested as the Participant directs.
If a Trustee is named the Trustee shall make all investment
decisions. If no Trustee is named, the Employer shall name an
Investment Director below:
Name of Investment Director ---------------------------------
Address -----------------------------------------------------
City ------------------------------- State ----- Zip---------
B. (X) A Participant may request that all or part of his Account be
segregated and invested as the Participant directs in accordance
with Section 8.3 of the Plan and as specified below:
If a Trustee is named, the Participant shall direct the Trustee
in accordance with the limitations as described in this Item 9(B)
and Section 8.3 of the Plan. If no Trustee is named, the
Participant shall be the Investment Director in accordance with
the limitations described in this Item 9(B) and Section 8.3 of
the Plan.
(i) Portion of Account Available for Self-Direction. A
Participant may request that (Choose one):
1. (X) All or any portion of his Account may be invested
as he directs.
2. ( ) Only the portion of his Account attributable to the
Participant Elective Deferrals be invested as he
directs, but only in increments of % of his
Elective Deferrals.
(ii) Participants Who May Self-Direct. The following
Participants may direct the investment of the amounts
designated by the Employer in Item 9(B)(i) above:
(Choose one):
1. (X) All Participants.
2. ( ) Only Participants who are with years of
Normal Retirement Age.
(iii) Cost of Self-Direction. The costs of self-direction of
investment shall be paid by (Choose one):
1. (X) The Employer.
2. ( ) The Participant.
(iv) Investment Options for Self-Direction. A Participant may
direct the portion of his Account designated in Item
9(B)(i) above to be invested as follows: (Choose one):
1. ( ) In any manner in which the Participant directs,
subject to the provisions of Section 8.3 of the
Plan.
2. (X) Between and among the following investment options
or funds:
Team Rental Group, Inc. Stock*
AIM Money Market Fund**
14
AIM Constellation Fund**
The Bond Fund of America**
Franklin Equity Income Fund**
Templeton Foreign Fund**
3. ( ) Between and among the investment options chosen
by the Trustee (or Employer) from time to time.
4. ( ) Between and among the investment options chosen by
the Trustees (or Employer) from time to time in a
manner designed to comply with Section 404(c) of
ERISA.
(v) Time for Investment Instruction. A Participant may give
investment directions at the following time or times
(Choose one):
1. (X) annually, on January 1 each year *switching out of
Team Rental Group, Inc.
2. ( ) semi-annually, on and Stock
each year.
3. ( ) quarterly on , , and
each year.
4. ( ) monthly, on the last day of each month.
5. (X) daily.**
Allowing Participants to change investment direction
quarterly, monthly, or daily may meet the safe harbor
requirements of Section 404(c) of ERISA regarding the
timing of direction of investments based on the volatility
of the assets, subject to compliance with all other
requirements of Section 404(c).
C. Insurance Provisions (Choose one):
(i) (X) The Trustee (or Custodian) may not invest the assets of
the Plan in life insurance contracts.
(ii) ( ) If the Employer has selected Item 9(A) above such that a
Participant may not direct the investment of his account,
a Participant may instruct the Trustee (or Custodian) to
invest a portion of the Participant's Account in life
insurance contracts on the Participant's life in accordance
with Section 8.4.
(iii) ( ) If the Employer has selected Item 9(B) and permits a
Participant to direct the investment of some or all of
his Account, the Participant may direct the Trustee (or
Custodian) to invest a portion of his Account in a life
insurance contract on the Participant's life in accordance
with Section 8.4.
10. RETIREMENT
A. For each Participant, Normal Retirement Age is (Choose one).
(X) age 65 (not to exceed 65).
15
( ) the later of age (not to exceed 65) or the (not to exceed 5th)
anniversary of the participation commencement date. If, for Plan
Years beginning before January 1, 1988, Normal Retirement Age was
determined with reference to the anniversary of the participation
commencement date (more than 5 but not to exceed 10 years), the
anniversary date for Participants who first commenced participation
under the Plan before the first Plan Year beginning on or after
January 1, 1988, shall be the earlier of (A) the tenth anniversary
of the date the Participant commenced participation in the Plan (or
such anniversary as had been elected by the Employer, if less than
10) or (B) the fifth anniversary of the first day of the first Plan
Year beginning on or after January 1, 1988. The participation
commencement date is the first day of the first Plan Year in which
the Participant commenced participation in the Plan.
B. Availability of Retirement Benefits (if none are indicated, benefits
will be available only upon Normal or Late Retirement, or at Death):
(X) Early Retirement. A Participant shall be eligible for Early
Retirement benefits according to Section 9.2 upon attainment of
age 55 and completion of 6 Years of Service.
(X) Disability Retirement. A Disabled Participant shall be eligible for
Disability Retirement according to Section 9.4 provided he has
completed N/A Years of Service.
(X) Termination of Employment. Payment of any total Account balance
of more than $3,500.00 may be made at the Participant's request
after termination of employment and before the Early (if applicable)
or Normal Retirement Age selected by the Employer.
(X) Late Retirement. A Participant who has attained Normal Retirement
Age but who has not terminated employment may request a payment of
benefits in accordance with Section 9.3.
(X) Small Benefit Payment. Payment of any total Account balance of less
than $3,500.00 to which the Participant is entitled shall not require
the consent of the Participant, and shall be made within 90 days
after the first Valuation Date following the Participant's
termination of employment.
11. FORM OF BENEFITS
A. Form of Retirement Benefits
i. The normal (automatic) form of benefits paid from this Plan shall
be (Choose one):
(X) single sum payment.
( ) Joint and 50% Survivor Annuity for married Participants, and
life annuity for unmarried Participants.
ii. The Participant or Beneficiary may instead elect to receive benefits
in any of the following optional forms, subject to the provisions of
Article X:
( ) single sum payment.
( ) Joint and 50% Survivor Annuity.
16
( ) life annuity.
(X) equal installments, paid 1, 2, 4, or 12 (as elected by the
Participant) times per year, for a period of ** years (but not
longer than the maximum period described in Section 10.2(b) of
the Plan).
( ) **As elected by the Participant all forms available under this
Plan as maintained by the Employer prior to this Agreement
(specify forms). -----------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
(X) other (describe) See Attachment D.
B. Form of Death Benefits
If the Participant dies before payment of his Account balance has
begun, his Account balance shall be paid to his Designated Beneficiary
(which, in the case of a married Participant, shall be his Spouse unless
the Spouse has provided written, notarized consent to the Particpant's
designation of another Beneficiary). The automatic form of Death Benefit
shall be (Choose one):
(X) a single sum payment representing the total Account balance. See
Attachment E.
( ) a 50% survivor annuity, payable in accordance with Article X.
12. VESTING
A. i. Normal Vesting Schedule--(Choose (1), (2), (3), (4), or (5) and
fill in the appropriate percentages).
A Participant shall have a nonforfeitable interest in his Account
in accordance with the following schedule:
(1) A Participant shall at all times have a fully vested and
nonforfeitable interest in his Account.
<TABLE>
<CAPTION>
Years 2-Year Other 7-Year Other
of Cliff Cliff Graded Graded
Service (2) (3) (4) (5) X
- ------- ------ ----- ------ ------
<S> <C> <C> <C> <C>
0 0 % 0 0%
1 0 % 0 0%
2 100% % 0 20%
3 100% % 20% 40% (at least 20%)
4 100% % 40% 60% (at least 40%)
5 100% 100% 60% 80% (at least 60%)
6 100% 100% 80% 100% (at least 80%)
7 or more 100% 100% 100% 100%
</TABLE>
If the vesting schedule under the Plan shifts in or out of the
above schedule for any Plan Year because of the Plant's top-heavy
status, such shift is an amendment to the vesting schedule and the
election described in Section 13.2(e) shall apply.
17
ii. Top-Heavy Minimum Vesting Schedule--(Choose (1), (2), (3), (4), or
(5) and fill in the appropriate percentages).
For any year in which this Plan is top-heavy as determined under
Section 12.1 of the Plan, the following vesting schedule shall
apply:
(1) A Participant shall at all times have a fully vested and
nonforfeitable interest in his Account.
<TABLE>
<CAPTION>
Years 2-Year Other 5-Year Other
of Cliff Cliff Graded Graded
Service (2) (3) (4) X (5)
- ------- ----- ----- ------ ------
<S> <C> <C> <C> <C>
0 0 % 0 %
1 0 % 0 %
2 100% % 20% % (at least 20%)
3 100% 100% 40% % (at least 40%)
4 100% 100% 60% % (at least 60%)
5 100% 100% 80% % (at least 80%)
6 or more 100% 100% 100% 100%
</TABLE>
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top-heavy status,
such shift is an amendment to the vesting schedule and the election
described in Section 13.1(e) shall apply.
iii. Vesting of 401(k) Matching Contributions-- The nonforfeitable
interest of each Participant in his Matching Contribution Subaccount
shall be determined on the basis of the Employer's election in Item
6(A)(ii) above, and the following (Choose one and fill in the
appropriate percentages): Nonforfeitable at all times.
<TABLE>
<CAPTION>
Years 2-Year Other 7-Year Other
of Cliff Cliff Graded Graded
Service (1) (2) (3) (4)
- ------- ------ ----- ------ ------
<S> <C> <C> <C> <C>
0 0 % 0 %
1 0 % 0 %
2 100% % 0 %
3 100% % 20% % (at least 20%)
4 100% % 40% % (at least 40%)
5 100% 100% 60% % (at least 60%)
6 100% 100% 80% % (at least 80%)
7 or more 100% 100% 100% 100%
</TABLE>
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top-heavy status,
such shift is an amendment to the vesting schedule and the election
described in Section 13.1(e) shall apply.
18
B. Service Credited for Vesting
All of an Employee's Years of Service with the Employer are counted to
determine the nonforfeitable percentage in the Employee's Account balance
derived from Employer contributions except:
( ) Years of Service before age 18.
( ) Years of Service during a period for which the Employee made no
mandatory contributions.
( ) Years of Service before the Employer maintained this Plan or a
predecessor plan.
13. DUTIES OF EMPLOYER OR ADMINISTRATOR
The Employer specifically reserves to itself, the Plan Administrator and the
Trustee (or Custodian, if applicable) sole management of each Trust (or
Custodial Account) under the Plan. Control of investments and reinvestments
shall be retained as provided in Item 9 of this Adoption Agreement.
14. CUSTODIAN
A. Name of Custodian. (This Section must be completed if a Trustee is not
named in Section 1(C).) The Custodian of the assets of this Plan shall
be:
(X) McDonald & Company Securities, Inc.
( ) Other --------------------------------------------------------------
------------------------------------------------------------------------
B. Accounts
(X) The Custodian shall establish a Custodial Account for the Plan.
( ) The Custodian shall establish a separate Custodial Account for each
Participant.
The Custodian agrees to carry out the duties and responsibilities of the
Custodian as set forth in the Plan and Adoption Agreement. The Custodian
shall not make any distribution of property held in each Custodial Account,
except on the written direction of the Employer or Plan Administrator or the
Trustee, for each Participant or his Beneficiaries. If a Custodian is named,
the Custodian shall be compensated for its services under the Plan in
accordance with the current custodial fee schedule which may be amended from
time to time by the Custodian.
15. RELIANCE
The adopting Employer may not rely on an opinion letter issued by the
National Office of the Internal Revenue Service as evidence that the Plan
is qualified under Section 401 of the Internal Revenue Code. In order to
obtain reliance with respect to plan qualification, the Employer must apply
to the appropriate key District Director of Internal Revenue for a
determination letter.
19
This Adoption Agreement may be used only in conjunction with the McDonald &
Company Securities, Inc. Prototype Defined Contribution Retirement Plan (Basic
Plan Document No. 01). The Employer may amend its choice of options provided by
this Adoption Agreement, except that any change shall be valid only upon written
notice to, and acceptance by, McDonald & Company Securities, Inc. Any change or
amendment of this Adoption Agreement shall be subject to the provisions of
Section 13.1 of the Plan. Failure to properly complete this Adoption Agreement
may result in disqualification of the Plan.
The Employer certifies that it has conferred with and acted upon the advice
of its legal counsel and/or tax advisor in adopting this Prototype Retirement
Plan.
IN WITNESS WHEREOF, the Employer, Trustee, Custodian (if any) and the
Sponsoring Organization have executed this Adoption Agreement on this day
of 19 .
Team Rental Group, Inc.
By: ----------------------------------
(Signature of sole proprietor,
partner, or corporate officer)
EMPLOYER
Team Rental of Southern
California, Inc.
By: ---------------------------------
(Signature of sole proprietor,
partner, or corporate officer)
ADDITIONAL ADOPTING EMPLOYER
- ----------------------------------- Arizona Rent-a-Car
John P. Kennedy, Trustee Systems, Inc.
- ----------------------------------- By: ----------------------------------
Jeffrey D. Congdon, Trustee ADDITIONAL ADOPTING EMPLOYER
McDonald & Company
Securities, Inc.
- ----------------------------------
Sandord Miller, Trustee
By: ----------------------------------
CUSTODIAN
This Adoption Agreement is accepted this day of , 19 .
MCDONALD & COMPANY
SECURITIES, INC.
By: ----------------------------------
(Authorized Signature)
SPONSORING ORGANIZATION
20
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Team Rental Group, Inc. on Form S-8 of our report dated April 12, 1996,
appearing in the Annual Report on Form 10-K of Team Rental Group, Inc. for the
year ended December 31, 1995 and to the reference to us under the heading
"Experts" in this Registration Statement.
DELOITTE & TOUCHE LLP
Indianapolis, Indiana
May 29, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 (Registration No. 333- ) of our report dated
March 23, 1995, on our audits of the financial statements of BRAC-OPCO, Inc.
as of December 31, 1994 and 1993 and for each of the three years in the period
ended December 31, 1994. We also consent to the reference to our firm under the
caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Sherman Oaks, California
May 29, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our auditors report dated May 3, 1996
(covering the years ended February 28, 1994 and 1995 and February 29, 1996) for
Arizona Rent-A-Car Systems, Inc. into this Registration Statement on Form S-8 of
Team Rental Group, Inc. We also consent to the reference to our firm under the
caption "Experts."
Michael Silver & Company
Certified Public Accountants
Skokie, Illinois
May 30, 1996
