As filed with the Securities and Exchange Commission on September __, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HOME PROPERTIES OF NEW YORK, INC.
(exact name of registrant as specified in its charter)
MARYLAND 16-1455126
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
850 Clinton Square, Rochester, New York 14604
(Address of Principal Executive Offices) (Zip Code)
HOME PROPERTIES RETIREMENT SAVINGS PLAN
(Full title of the Plan)
Ann M. McCormick, Esq.
Vice President, Secretary and General Counsel
Home Properties of New York, Inc.
850 Clinton Square
Rochester, New York 14604
(716) 546-4900
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
Deborah McLean Quinn, Esq.
Nixon, Hargrave, Devans & Doyle LLP
900 Clinton Square
Rochester, New York 14604
(716) 263-1000
___________________________________________________________________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
to be Amount to be price per Offering Registration
Registered(1) Registered(1) share(2) Price(2) Fee
- ------------- ------------- ---------- ---------- ------------
Common Stock 50,000 $20.375 $1,018,750 $351.30
$.01 par value
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement covers an indeterminate amount of interests to be
offered or sold pursuant to the Home Properties Retirement Savings Plan.
(2)Inserted solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and based upon the average of the high and low prices
for the registrant's Common Stock on the New York Stock Exchange reported as
of September 20, 1996.
Approximate date of commencement of the proposed sale of the securities to
the public: From time to time after the Registration Statement becomes
effective.<PAGE>
Part II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents which have been filed by Home Properties of New
York, Inc. (the "Company") with the Securities and Exchange Commission are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1995, filed pursuant to Section 13 of the Securities
Exchange Act of 1934.
(b) All other reports filed by the Company pursuant to Sections 13(a)
and 15(d) of the Securities Exchange Act of 1934 since December 31, 1995,
including specifically, but not limited to, the Form 11-K filed concurrently
with this Registration Statement.
(c) The description of the Company's Common Stock contained in the
Company's registration statement filed under Section 12 of the Securities and
Exchange Act, including all amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Company or the Home Properties
Retirement Savings Plan (the "Plan") pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold
or which deregisters all securities remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the Plan and Common Stock has been passed upon by Ann M.
McCormick, Esq., Vice President, Secretary and General Counsel of the
Company. Mrs. McCormick is eligible to and does participate in the Plan.
Mrs. McCormick also owns 8,491 shares of Common Stock of the Company and
2,302 limited partnership units in Home Properties of New York, L.P.
Item 6. Indemnification of Directors and Officers.
The Company's officers and directors are and will be indemnified under
Maryland law, the Articles of Incorporation of the Company and the
Partnership Agreement ("Operating Partnership Agreement") of Home Properties
of New York, L.P., a New York limited partnership of which the Company is the
general partner (the "Operating Partnership"), against certain liabilities.
The Articles of Incorporation require the Company to indemnify its directors
and officers to the fullest extent permitted from time to time by the laws of
Maryland. The Bylaws contain provisions which implement the indemnification
provisions of the Articles of Incorporation.
The Maryland General Corporation Law ("MGCL") permits a corporation to
indemnify its directors and officers, among others, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by
them in connection with any proceeding to which they may be made a party by
reason of their service in those or other capacities unless it is established
that the act or omission of the director or officer was material to the
matter giving rise to the proceeding and was committed in bad faith or was
the result of active and deliberate dishonesty, or the director or officer
actually received an improper personal benefit in money, property or
services, or in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was unlawful. No
amendment of the Articles of Incorporation of the Company shall limit or
eliminate the right to indemnification provided with respect to acts or
omissions occurring prior to such amendment or repeal. Maryland law permits
the Company to provide indemnification to an officer to the same extent as a
director, although additional indemnification may be provided if such officer
is not also a director.
The MGCL permits the articles of incorporation of a Maryland corporation
to include a provision limiting the liability of its directors and officers
to the corporation and its stockholders for money damages, subject to
specified restrictions. The MGCL does not, however, permit the liability of
directors and officers to the corporation or its stockholders to be limited
to the extent that (1) it is proved that the person actually received an
improper benefit or profit in money, property or services (to the extent such
benefit or profit was received) or (2) a judgment or other final adjudication
adverse to such person is entered in a proceeding based on a finding that the
person's action, or failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated in the
proceeding. The Articles of Incorporation of the Company contain a provision
consistent with the MGCL. No amendment of the Articles of Incorporation
shall limit or eliminate the limitation of liability with respect to acts or
omissions occurring prior to such amendment or repeal.
The Operating Partnership Agreement also provides for indemnification of
the Company and its officers and directors to the same extent indemnification
is provided to officers and directors of the Company in its Articles of
Incorporation, and limits the liability of the Company and its officers and
directors to the Operating Partnership and its partners to the same extent
liability of officers and directors of the Company to the Company and its
stockholders is limited under the Company' Articles of Incorporation.
The Company has entered into indemnification agreements with each of the
Company's directors and certain of its officers. The indemnification
agreements require, among other things, that the Company indemnify its
directors and those officers to the fullest extent permitted by law, and
advance to the directors and officers all related expenses, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. The Company also must indemnify and advance all expenses incurred
by directors and officers seeking to enforce their rights under the
indemnification agreements, and cover directors and officers under the
Company's directors' and officers' liability insurance. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by provisions in the Articles of Incorporation and the Bylaws and
the Operating Partnership Agreement of the Operating Partnership, it provides
greater assurance to directors and officers that indemnification will be
available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or by the stockholders to eliminate the
rights it provides.
The Company has purchased insurance under a policy that insures both the
Company and its officers and directors against exposure and liability
normally insured against under such policies, including exposure on the
indemnities described above.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
See Exhibit Index.
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 of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-8, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Rochester, State of New York, on
the 18th day of September, 1996.
HOME PROPERTIES OF NEW YORK, INC.
/s/ Norman Leenhouts
By: ------------------------------
Norman P. Leenhouts
Chairman and Co-Chief
Executive Officer
/s/ Nelson B. Leenhouts
By: ------------------------------
Nelson B. Leenhouts
President and Co-Chief
Executive Officer
KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby severally constitutes and appoints Norman P. Leenhouts, Nelson
B. Leenhouts, Richard J. Crossed and Amy L. Tait, and each of them, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective
amendments) to the 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 attorney-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 fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
each said attorneys-in-fact and agents or any of them or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated.
/s/ Norman P. Leenhouts Director, Chairman September 18, 1996
- ----------------------------- and Co-Chief Executive
Norman P. Leenhouts Officer (Principal
Executive Officer)
/s/ Nelson B. Leenhouts Director, President September 17, 1996
- ----------------------------- and Co-Chief Executive
Nelson B. Leenhouts Officer (Principal
Executive Officer)
/s/ Richard J. Crossed Director, Executive September 17, 1996
- ----------------------------- Vice President
Richard J. Crossed
/s/ Amy L. Tait Director, Executive September 18, 1996
- ----------------------------- Vice President and
Amy L. Tait Chief Operating Officer
/s/ David P. Gardner Vice President, September 18, 1996
- ----------------------------- Chief Financial
David P. Gardner Officer and Treasurer
(Principal Financial
and Accounting Officer)
/s/ Burton S. August, Sr. Director September 18, 1996
- -----------------------------
Burton S. August, Sr.
/s/ William Balderston, III Director September 23, 1996
- -----------------------------
William Balderston, III
/s/ Leonard F. Helbig, III Director September 23, 1996
- -----------------------------
Leonard F. Helbig, III
/s/ Roger W. Kober Director September 18, 1996
- -----------------------------
Roger W. Kober
/s/ Clifford W. Smith, Jr. Director September 23, 1996
- -----------------------------
Clifford W. Smith, Jr.
/s/ Paul L. Smith Director September 17, 1996
- -----------------------------
Paul L. Smith<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the Home Properties Retirement
Savings Plan) have duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Rochester, State of New York, on September 23, 1996.
HOME PROPERTIES RETIREMENT SAVINGS PLAN
By: /s/ David P. Gardner
------------------------------------
Name: David P. Gardner
----------------------------------
Title: Chairman of the Administrative
Committee, the Administrator of
the Plan
---------------------------------<PAGE>
EXHIBIT INDEX
Exhibit No. Description Location
- ----------- ----------- ----------------
4-1 Home Properties Retirement Filed Herewith
Savings Plan, as amended
4-2 Articles of Incorporation of Home Incorporated by
Properties of New York, Inc. reference to Home
Properties of
New York, Inc.
Registration Statement
on Form S-11, File No.
33-78862 (the "S-11
Registration
Statement")
4-3 Articles of Amendment and Restatement Incorporated by
of Articles of Incorporation of reference
Home Properties of New York, Inc. to the S-11
Registration
Statement
4-4 Amended and Restated By-laws of Incorporated by
Home Properties of New York, Inc. reference to the
S-11 Registration
Statement
5-1 Opinion of Ann M. McCormick, Esq. Filed Herewith
as to legality of the Plan and the
Common Stock
23-1 Consent of Ann M. McCormick, Esq. Contained in opinion
filed as Exhibit 5
to this Registration
Statement
23-2 Consent of Coopers & Lybrand L.L.P., Filed Herewith
independent public accountants
As approved by IRS
[4/1/93]
ADOPTION AGREEMENT FOR THE
NIXON, HARGRAVE, DEVANS & DOYLE
NON-STANDARDIZED REGIONAL PROTOTYPE 401(k)
RETIREMENT SAVINGS PLAN
By filling out and signing this adoption agreement, the
employer adopts the Nixon, Hargrave, Devans & Doyle
Non-Standardized Regional Prototype 401(k) Retirement Savings
Plan for the benefit of its employees who are eligible to
participate. Blank spaces must be filled in and boxes must be
checked [x] as appropriate to fit the employer's specific plan
design.
EMPLOYER INFORMATION
Name and Address: Home Properties of New York, Inc.
850 Clinton Square
Rochester, New York 14604
Telephone: (716) 546-4900
Type of Business Entity (corporation, partnership, etc.):
Corporation
Employer Tax I.D. No.: 16-1455126
Fiscal Year Ends: December 31
Related Entities (if any):
Related Entities covered by this Plan (if any) (a
participating entity is responsible for making contributions
on behalf of its employees who participate in the plan.):
PLAN INFORMATION (Section references are to the prototype plan
document.)
Name of plan: Home Properties Retirement Savings Plan
Plan number: 0 0 1
Name and address of trustee: Exeter Trust
c/o Custody First
P.O. Box 41178
Rochester, NY 14614
The plan year ends (Section 1.60): December 31
If you wish the plan's limitation year (Section 5.5) to be
different than the plan year, enter the limitation year end
here:
Title or name of plan administrator(s) (if the employer, so
state):
Administrative Committee as appointed by the
Board
Telephone of administrator (if not the employer):
Complete one of the following:
[ ] This is a new plan with an effective date of __________.
[x] This is an amended and restated plan with an effective
date for the amendment and restatement of January 1,
1996. The effective date of the original plan was
February 1, 1989.
ELIGIBILITY REQUIREMENTS (Section 2.1):
Coverage (select one):
[ ] This plan covers all employees.
[x] This plan covers all employees except (check as many as
apply):
[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 and if less than two percent of the
employees of the employer who are covered pursuant
to that agreement are professionals as defined in
Section 1.410(b)-9(g) of the Regulations. 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] leased employees.
[ ] employees who are nonresident aliens (within the
meaning of Code section 7701(b)(1)(B)) and who
receive no earned income (within the meaning of
Code section 911(d)(2)) from the employer which
constitutes income from sources within the United
States (within the meaning of Code section 861
(a)(3)).
[ ] other employees (please specify)_____________.
Waiting Period for Employee Elective Deferrals (select one):
[ ] no waiting period.
[x] one year of service.
[ ] other (specify period which is less than one
year):(1) ___________.
Waiting Period for Employer Contributions (select one):
[ ] no waiting period.
[x] one year of service.
[ ] two years of service.(2)
[ ] other (specify period which is less than one
year)(1): _____________.
Age (select one):
[ ] No minimum age required.
[x] Age (fill in) 21.(3)
Check one of the following if desired:
[ ] All employees covered by the plan who are
employees on the plan's effective date shall be
eligible to make elective deferrals regardless of
whether they have met the waiting period or age
requirements.
[ ] All employees covered by the plan who are
employees on the plan's effective date shall be
eligible to make elective deferrals and share in
the employer's contributions regardless of whether
they have met the waiting period or age
requirements.
Computation of Hours of Service:
For purposes of determining service under the plan, an
employee's hours of service (Section 1.37) will be
calculated under the method selected below (select one):
[x] On the basis of actual hours for which he or she is
paid or entitled to payment.
[ ] On the basis of days worked. An employee will be
credited with ten (10) hours of service if under
Section 1.37 of the plan he or she would be credited
with at least one (1) hour of service during the day.
[ ] On the basis of weeks worked. An employee will be
credited with forty-five (45) hours of service if under
Section 1.37 of the plan he or she would be credited
with at least one (1) hour of service during the week.
[ ] On the basis of semi-monthly payroll periods. An
employee will be credited with ninety-five (95) hours
of service if under Section 1.37 of the plan he or she
would be credited with at least one (1) hour of service
during the semi-monthly payroll period.
[ ] On the basis of months worked. An employee will be
credited with one hundred ninety (190) hours of service
if under Section 1.37 of the plan he or she would be
credited with at least one (1) hour of service during
the month.
Entry Date (Section 1.28) (select one):
An employee who has met the plan's eligibility
requirements will become a plan participant on (select one):
[ ] the first day of the next month.
[ ] the first day of the next quarter (i.e. the next _____,
_____, _____, or _____ [insert the month and day
on which each of the plan quarters begins]).
[ ] the last day of the next quarter (i.e. the next _____,
_____, _____, or _____ [insert the month and day
on which each of the plan quarters ends]).
[x] the first day of the next semi-annual period (i.e. the
next 1/1 or 7/1 [insert the month and day on which
the plan year and third quarter begin]).
[ ] the last day of the next semi-annual period (i.e. the
next _____ or _____ [insert the month and day on which
the plan year and second quarter end]).
[ ] the first day of the next year (may be used only if the
waiting period is six months or less).
[ ] the last day of the current year (may be used only if
the waiting period is six months or less).
COMPUTATION OF YEARS OF SERVICE:
An employee will be credited with a full year of
service (Section 1.61) after completing the following number
of hours of service (Section 1.37) in that year (select
one):(4)
[ ] One hour of service.
[x] 1000 hours of service.
[ ] Other (please specify a number of hours less than
1000):
Check the following if desired:
[x] An employee who is rehired shall be given credit for
all pre-termination years of service for eligibility
and vesting purposes. (If not checked service for
certain persons who terminated without vested benefits
can be disregarded).
SALARY DEFERRAL ELECTIONS:
A plan participant may elect to begin elective deferrals
(Section 3.2) effective on the first day of the first payroll
period beginning after (select one):
[ ] his entry date.
[ ] the first day of any month following his entry date.
[ ] the first day of any plan quarter following his entry
date.
[x] the first day of any plan semi-annual period following
his entry date.
[ ] the first day of any plan year following his entry date
(may be elected only if the waiting period is six
months or less).
A plan participant may elect to modify elective deferrals
(Section 3.2) effective on the first day of the first payroll
period beginning after (select one):
[ ] the first day of any month.
[ ] the first day of any plan quarter.
[x] the first day of any plan semi-annual period.
[ ] the first day of any plan year.
Complete the following, if desired:
Plan participants may modify the amount of their
elective deferrals a maximum of _____ times during any _____
(no period greater than a year).
COMPENSATION (Section 1.12) (select one) (if this is an
integrated plan, you
must check Total Compensation.):
[x] Total Compensation
[ ] Base Salary or Wages
[ ] Base Salary or Wages plus one or more of the following
amounts as checked:
[ ] overtime
[ ] bonuses
[ ] commissions
[ ] other (please specify):
[ ] Income Tax Withholding Wages
Impact of salary reductions on Compensation (select one):
[x] An employee's compensation shall equal the amount
determined above before any salary reduction under this
or any other salary reduction plan.
[ ] An employee's compensation shall equal the amount
determined above reduced by elective deferrals under
this plan.
[ ] An employee's compensation shall equal the amount
determined above reduced by salary reduction
contributions to this and to all other 401(k) plans,
simplified employee pension plans, cafeteria plans and
403(b) plans.
New Participants:
For contribution purposes, an employee's compensation
during the year he or she first becomes a participant shall
consist of (select one):
[ ] Compensation for the entire plan year.
[x] Compensation paid only after participation begins.
CONTRIBUTIONS
Elective Deferrals (Section 3.2):
[x] Employees may make elective deferrals subject to the
following limitations (complete one or more as
desired):
[x] Elective deferrals may be in any whole percentage
of compensation up to 15 percent of
compensation.
[ ] Elective deferrals must be in even increments of
______ dollars.
[x] The minimum percentage of compensation which may be
deferred is 1%.
[ ] The minimum dollar amount of compensation which may
be deferred is $________ per pay period.
[ ] The maximum amount of the compensation which may be
deferred, subject to any limitations in the plan,
is $________.
[x] Participants may make separate elective deferrals
out of bonuses in amounts up to 100 percent of
each bonus, subject to plan limitations.
Rollover Contributions (Section 3.5) (check one of the
following if desired):
[x] All employees who have met the eligibility
requirements of the plan except for the waiting
period requirement, if any, may make rollover
contributions.
[ ] Only those employees who have satisfied the
eligibility requirements of the plan may make
rollover contributions.
Matching Contributions (Section 3.3):
Complete this section only if the employer will make
matching contributions (select one):
[x] The employer will contribute 75 percent
(e.g. 25%, 50%, 66 2/3%, etc.) of a participant's
elective deferrals up to a maximum matching
contribution that will not exceed (select one):
3 percent of the participant's compensation
or
________ dollars.
[ ] The employer will match a participant's elective
deferrals on a tiered basis, as follows:
[ ] The employer will contribute ____% (e.g. 25%, 50%,
66 2/3%, etc.) of the first ____% or $________
of a participant's elective deferrals.
[ ] The employer will contribute ____% (e.g. 25%, 50%,
66 2/3%, etc.) of the next ____% or $________ of
a participant's elective deferrals.
[ ] The employer will contribute ____% (e.g. 25%, 50%,
66 2/3%, etc.) of the next ____% or $________ of
a participant's elective deferrals.
[ ] The employer, in its discretion, may make matching
contributions to the plan in any amount. Such
contributions will be allocated pro rata to each
participant who has made elective deferrals during
the year based on his or her compensation compared
to total participant compensation for the year.
[ ] The employer, in its discretion, may make matching
contributions to the plan in any amount. Such
contributions will be allocated to each participant
in the ratio that the total of his or her elective
deferrals for the year bears to the total elective
deferrals made by all participants for the year.
However, no participant will receive an allocation
with respect to elective deferrals that exceed
____% of his or her compensation for the year.
Discretionary Contributions (Section 3.1):
Complete this section only if the employer may make
discretionary contributions:
[x] The employer, in its discretion, may make
contributions to the plan in any amount of dollars,
percentage of compensation, or percentage of
profits which it may determine as of the last day
of the plan year.
Discretionary contributions shall be allocated (Section
4.2(b)) (select one):
[x] pro rata to each participant based on his or
her compensation compared to total participant
compensation.
[ ] on a basis that takes into account permitted
disparity (Section 4.2(b)). The integration
level under this option shall be (choose one):
[ ] Social Security Taxable Wage Base.
[ ] $__________ (cannot exceed the Social
Security Taxable Wage Base).
Procedures to Meet IRS Testing Requirements (Select one or
more as desired):
[x] The employer may make qualified non-elective
contributions (Section 3.4) as follows (select
one):
[ ] ____% of the compensation of all participants
eligible to share in the allocation.
[ ] ____% of the employer's net profits for the
plan year, up to a maximum of $____________.
[x] A discretionary amount determined by the
employer.
Such contributions shall be allocated as
follows:
[x] The contribution shall be allocated to the
accounts of all non-highly compensated
employees in the ratio that each such
employee's compensation bears to the
compensation of all such employees.
[ ] The contribution shall be allocated to the
accounts of all non-highly compensated
employees in the ratio that each such
employee's compensation, not in excess of
$______________, bears to the
compensation of all such employees, not in
excess of $_____________, for such plan
year.
[ ] The contribution shall be allocated to the
accounts of those participants with
compensation not in excess of $_________ in
the ratio that each such participant's
compensation bears to the compensation of
all such participants.
[x] The plan administrator may direct those
participants who are highly compensated employees
to cease making elective deferrals.
[x] The plan administrator may direct the trustee to
return a portion of the elective deferrals made by
those participants who are highly compensated
employees.
[x] The plan administrator may reallocate all or a
portion of any discretionary contribution pro rata
among those participants who are not highly
compensated employees.
Qualified non-elective contributions (complete this section
if the employer may make qualified non-elective contributions to
the plan.)
[x] Qualified non-elective contributions may be taken
into account as elective deferrals for purposes of
calculating the actual deferral percentages.
The amount of qualified non-elective contributions taken
into account as elective deferrals for purposes of calculating
the actual deferral percentages shall be:
[ ] All such qualified non-elective contributions.
[x] Such qualified non-elective contributions that are
needed to meet the actual deferral percentage test.
Average Contribution Percentage Test
In computing the average contribution percentage, the
employer may take into account, and include as contribution
percentage amounts:
[x] Elective deferrals.
[x] Qualified non-elective contributions.
The amount of qualified non-elective contributions that are
taken into account as contribution percentage amounts for
purposes of calculating the average contribution percentage shall
be:
[ ] All such qualified non-elective contributions.
[x] Such qualified non-elective contributions that are
needed to meet the average contribution percentage
test.
The amount of elective deferrals taken into account as
contribution percentage amounts for purposes of calculating the
average contribution percentage shall be:
[ ] All such elective deferrals.
[x] Such elective deferrals that are needed to meet the
average contribution percentage test.
SPECIAL ALLOCATIONS RULES
Allocations to Terminated Employees (select one):
[x] Plan participants who are not employees on the last
day of the plan year will not receive a
discretionary or a matching contributions.
[ ] Plan participants who are no longer employed on the
last day of the plan year will receive allocations
of the following contributions if otherwise
eligible (select one or both):
[ ] Discretionary contributions.
[ ] Matching contributions.
[ ] Plan participants who have terminated their
employment before the last day of the plan year for
the following reasons will receive discretionary
and matching contributions if otherwise eligible
(select one or more):
[ ] Retirement.
[ ] Death.
[ ] Disability.
[ ] Plan participants who were not employed during
the period for which the employer's
contribution is made shall not receive an
allocation.
Forfeitures (Section 4.2(e)):
Forfeitures will be allocated as follows (select one):
[ ] Not applicable (select this option if the plan will
provide immediate vesting.)
[ ] To offset the employer's contribution to the plan.
[ ] To the accounts of all employees entitled to an
allocation of regular contributions for the plan
year, if made, in accordance with the allocation
formula under the plan.
[x] To the accounts of those employees entitled to an
allocation of regular contributions for the plan
year, if made, who have made elective deferrals
during that plan year, in accordance with the
allocation formula under the plan.
Nonvested balances of participants terminating
employment will be forfeited (select one):
[ ] Not applicable (select this option if the plan will
provide immediate vesting.)
[ ] Immediately upon payment of the vested balance to
the participant (select this option only if there
has been a distribution).
[x] At the end of the plan year (select this option
only if there has been a distribution).
[ ] Upon incurring a one-year break in service (select
this option only if there has been a distribution).
[ ] Upon incurring a five-year break in service.
VESTING
The following employer contributions are subject to the
vesting requirements (select one or both):
[x] Matching contributions.
[x] Discretionary contributions.
Normal Vesting Schedules (Section 6.3) (select one):
[ ] 100% vested immediately.
[ ] 100% vested after five years of service.
[ ] 100% vested after ______ years of service [must be
five years or less].
[ ] 20% vested after three years of service
40% vested after four years of service
60% vested after five years of service
80% vested after six years of service
100% vested after seven years of service.
[x] Graduated vesting under the following schedule
(fill in as desired):
0% vested after one year of service
20% vested after two years of service
40% vested after three years of service [must be
at least 20%]
60% vested after four years of service [must be
at least 40%]
80% vested after five years of service [must be
at least 60%]
100% vested after six years of service [must be at
least 80%]
___% vested after seven years of service [must be
100%].
Vesting Schedules if Plan is or Becomes Top-Heavy (Section
12.1) (select one):
[ ] 100% vested immediately.
[ ] 100% vested after three years of service.
[x] 20% vested after two years of service
40% vested after three years of service
60% vested after four years of service
80% vested after five years of service
100% vested after six years of service.
[ ] The vesting schedule will not change if the plan
becomes top-heavy because the vesting schedule
elected above already satisfies the top-heavy
requirements.
Years of Service Not Counted for Vesting (select one or
both, if desired):
[ ] Years of service occurring before the participant's
18th birthday.
[ ] Years of service occurring before the effective
date of the plan or predecessor plan.
PAYMENT OF BENEFITS
Upon Retirement (Sections 1.16 and 1.45):
Normal Retirement (select one):
[x] The plan's normal retirement age is 65 (not to
exceed age 65).
[ ] The plan's normal retirement age is the later of
age _____ not to exceed age 65) or the ______ (not
to exceed 5th) anniversary of the date the
participant commenced participation in the plan.
Early Retirement (select one):
[x] Age 55 after completing 6 years of service
(insert zero if early retirement is conditioned
only on age).
[ ] No early retirement is offered under this plan.
Loans (Section 6.11):
Complete the following if plan loans are permitted:
[x] Employees may borrow money from their plan accounts
in accordance with the plan. Loans may be made
from the following accounts only (select one or
more options):
[x] All vested amounts.
[ ] Elective deferrals.
[ ] Vested amounts of employer contributions.
[ ] Other (please specify) _________________.
[x] Loans are subject to the following restrictions
(check as many as apply):
[ ] The maximum number of loans a participant may
have outstanding in one plan year is _____.
[x] The minimum dollar amount of a loan is $1,000
(cannot exceed $1,000).
[ ] Loans are restricted to financial emergency.
[x] Other conditions (specify):
A participant may only have two loans
outstanding at any time.
A participant may only apply for two loans
during any calendar year.
Other Payments:
Vested amounts will be distributable (with participant
consent where required) in the following circumstances
in addition to retirement, death or disability (check
the desired options, if any):
[x] Separation from service.
[x] Upon a participant's attainment of age 59-1/2.
[x] Withdrawal of elective deferrals will be permitted,
upon the hardship of a participant as provided for
in the plan (Section 6.10(a) and in government
regulations.
[x] If a participant makes a withdrawal of his
elective deferrals, he will not be permitted
to contribute elective deferrals for a period
of ________________________ (one year, six
months, etc).
[ ] The minimum amount of any withdrawal is
$________ or 100 percent of the participant's
account balance, whichever is less.
[ ] Participants may only make withdrawals once
every _________.
[ ] Withdrawal of the following employer contributions
will be permitted upon the hardship of a
participant as provided for in the plan (Section
6.10(b)):
[ ] Matching contributions
[ ] Discretionary contributions
[ ] The minimum amount of any withdrawal is
$_______ or 100 percent of the participant's
account balance, whichever is less.
[ ] Participants may only make withdrawals once
every _________.
[x] Termination of the plan without the establishment
of a successor plan.
[x] As soon as administratively feasible after the sale
of substantially all of the employer's assets used
in the trade or business in which the participant
is employed to an unaffiliated entity.
Distribution Options (Section 6.7) (select all that apply):
[x] Lump sum.
[ ] Periodic payments over the participant's life
expectancy or the joint life expectancies of the
participant and the participant's beneficiary.
[x] Periodic payments over not more than 15 years.
[ ] Life annuity (election of this option may trigger
application of qualified joint and survivor rules).
[ ] Five-year certain annuity payment (election of this
option may trigger application of qualified joint
and survivor rules).
[ ] Ten-year certain annuity payment (election of this
option may trigger application of qualified joint
and survivor rules).
[ ] Fifteen-year certain annuity payment (election of
this option may trigger application of qualified
joint and survivor rules).
[ ] Joint and 100% survivor annuity payment (election
of this option may trigger application of qualified
joint and survivor rules).
[ ] Joint and 75% survivor annuity payment (election of
this option may trigger application of qualified
joint and survivor rules).
[ ] Joint and 50% survivor annuity payment (election of
this option may trigger application of qualified
joint and survivor rules).
Check the following, if applicable:
[ ] This plan is subject to the requirement that
benefits be paid in the form of a qualified joint
and survivor annuity (Section 6.4).
INVESTMENTS (Section 7.3) (Complete this section, if desired and
select all that apply):
[x] Participants may direct the investment of all the
amounts held in their accounts in such investments
as may be designated from time to time by the plan
administrator.(5)
[ ] Participants may only direct investments of the
following sub-accounts (select one or more
options):
[ ] Elective deferrals.
[ ] All matching contributions.
[ ] Vested matching contributions amounts only.
[ ] All discretionary contributions.
[ ] Vested discretionary contributions only.
[ ] Participants who have attained age _____ or are
within ______ years of retirement may direct that
their accounts be placed in an interest bearing
account or in a fund with the primary investment
objectives of the highest possible income
consistent with a high degree of liquidity and the
preservation of capital at any time.
[ ] If the participant has chosen periodic payments he
may designate whether he wishes to have the
remaining balance of his accounts invested in the
same manner as other accounts under the plan or
invested in a savings-type investment.
[ ] Participants may change their investment
directions for future contributions ______ times
every _______, and reinvest their existing
balances _____ times every ______.
[x] Participants may change their investment
directions for future contributions on (6) and
(6), and reinvest their existing balances on (6)
and (6).
MISCELLANEOUS
Excess Elective Deferrals (amounts in excess of $7,000
limit) (Section 4.3):
Participants who claim excess elective deferrals
(Section 4.3) for the preceding calendar year must submit their
claims in writing to the administrator by March 1
(specify a date between March 1 and before April 15).
Forfeiture of excess aggregate contributions may be (Section
4.3) (select one):
[ ] allocated to the accounts of non-highly
compensated employees, or
[x] used to reduce the employer's contribution.
Provisions for Employers with Plans in Addition to this
Plan:
If the employer maintains or has ever maintained
another defined contribution plan other than a regional
prototype plan that ever covered a participant in this plan
or a welfare benefit fund as defined in Section 419(e) of
the Code, or an individual medical account as defined in
Section 415(1)(2) of the Code, under which amounts are
treated as annual additions with respect to any participant
in this plan and the annual additions to both plans in the
aggregate exceed the maximum permissible amount (for 1990,
$30,000 or 25% of such participant's compensation) (select
one):
[x] The annual additions allocated to the
participant's accounts under this plan shall be
reduced by first returning elective deferrals to
the participant in an amount necessary to meet the
limitation. If after returning such elective
deferrals an excess still exists, the employer's
contributions shall be removed from the
participant's accounts in the manner described in
Section 5.1 of the plan.
[ ] Annual additions under the other defined
contribution plan shall be reduced pursuant to the
method described in the other plan.
If the employer maintains or has ever maintained a
defined benefit plan that ever covered a participant in this
plan and the aggregate benefit accruals and annual additions
to both plans in the aggregate exceed the maximum
permissible amount (select one):
[x] The annual additions allocated to the
participant's accounts under this plan shall be
reduced by first returning elective deferrals to
the participant in an amount necessary to meet the
limitation. If after returning such elective
deferrals an excess still exists, the employer's
contributions shall be removed from the
participant's accounts in the manner described in
Section 5.1 of the plan.
[ ] The participant's accrual under the defined
benefit plan shall be reduced by an amount
necessary to meet the limitation.
Provision for Minimum Contributions and Benefits in the
event this Plan is or becomes Top-Heavy.
If the employer maintains a defined benefit plan in
which a participant in this plan participates, the minimum
contribution/benefit shall be satisfied through one of the
following methods (select one):
[x] The employer will provide the minimum benefit
under the defined benefit plan only.
[ ] The employer will provide the minimum benefit
under the defined benefit plan, offset by any
benefit provided under this plan.
[ ] The employer's contribution to this plan plus
forfeitures will equal 5% of the participant's
compensation.
[ ] The employer will provide a combination of
contributions and benefits as necessary to meet
the minimum, and will maintain the data necessary
to provide a comparability analysis that will show
that the minimum has been met.
If the employer maintains another defined contribution
plan in which a participant in this plan participates, the
minimum contribution shall be satisfied through one of the
following methods (select one):
[ ] The employer will provide the minimum contribution
under this plan.
[x] The employer will provide the minimum contribution
under the other defined contribution plan.
For purposes of establishing present value to compute
the top-heavy ratio, any benefit shall be discounted only
for mortality and interest based on the following:
Interest rate: 6%
Mortality table: UP 1984 Mortality Table.
Determination of Highly Compensated Employees
[ ] Check if the employer elects to use the calendar
year calculation method provided by Treas. Reg.
Section 1.414(g)-1T A-14(b)(1) in determining who is a
highly compensated employee.
ADMINISTRATION
The adopting employer may not rely on a notification letter
issued by the National or District Office of the Internal Revenue
Service to Nixon, Hargrave, Devans & Doyle on the prototype plan
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 office for a determination letter.
Failure to properly fill out this adoption agreement may
result in disqualification of the employer's plan.
This adoption agreement may be used only in conjunction with
basic plan document #02.
The Sponsoring Organization of this prototype plan is Nixon,
Hargrave, Devans & Doyle, P.O. Box 1051, Clinton Square,
Rochester, New York 14603. Questions about this prototype plan
or about Nixon, Hargrave, Devans & Doyle's other services should
be directed to either Richard S. Fischer or Robert W. Wild at
(716) 263-1000.
The Sponsoring Organization will inform the employer of any
amendments made to the plan or of the discontinuance or
abandonment of the plan. The employer must notify the Sponsoring
Organization of any changes it makes to its selections in this
adoption agreement.
The employer hereby adopts this Adoption Agreement and the
associated Nixon, Hargrave, Devans & Doyle Non-Standardized
Regional Prototype 401(k) Retirement Savings Plan by causing its
duly authorized officer or partner to execute this Adoption
Agreement on its behalf this 28 day of December 1995.
/s/ David P. Gardner
Employer-Authorized Signature
[FN]
(1) If a waiting period of less than one year, there can be no
hours of service requirement for eligibility purposes.
Employees must be eligible to participate regardless of the
number of hours of service completed during the waiting
period.
(2) For receiving a portion of the employer's contribution, the
waiting period may be two years provided there is immediate
vesting.
(3) The age requirement may not exceed 21 except for a plan
maintained exclusively for employees of an educational
institution by an employer which is exempt from tax under
Section 501(a) of the Code which may use an age requirement
of 26, provided that participants are 100% vested at all
times.
(4) Effective January 1, 1996, those employees who were
previously employees of Conifer Realty, Inc. will be given
credit for their years of service with Conifer for purposes
of determining eligibility and vesting under this plan.
(5) Effective January 1, 1996, participants may direct the
investment of their accounts among investment options
offered by the Employer. Effective October 1, 1996, common
stock of the Employer will be offered as an investment
option. Up to 100 percent of the plan's assets may be
invested in common stock of the employer.
(6) Participants may change their investment directions for
existing balances and future contributions quarterly.
[/FN]
<PAGE>
As approved by IRS
[1/10/94]
NIXON, HARGRAVE, DEVANS & DOYLE llp
hereby creates the
NIXON, HARGRAVE, DEVANS & DOYLE llp
REGIONAL PROTOTYPE 401(K) RETIREMENT SAVINGS PLAN
to enable an Employer who executes an Adoption Agreement
to establish a non-standardized 401(k) plan
for the exclusive benefit of its employees.
Plan Document # 02
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - Definitions............................ 1
ARTICLE II - Participation and Service.............. 17
ARTICLE III - Contributions and Forfeitures.......... 21
ARTICLE IV - Allocations to Participants' Accounts.. 24
ARTICLE V - Limitations on Allocations............. 36
ARTICLE VI - Benefits............................... 47
ARTICLE VII - Trust Fund............................. 76
ARTICLE VIII - Administrative Committee and Other
Fiduciaries............................ 80
ARTICLE IX - Amendments............................. 84
ARTICLE X - Successor Employer and Merger or
Consolidation of Plans................. 85
ARTICLE XI - Plan Termination....................... 86
ARTICLE XII - Top-Heavy Provisions................... 88
ARTICLE XIII - Miscellaneous.......................... 95
<PAGE>
ARTICLE I
Definitions
SECTION 1.1 "Actual Deferral Percentage" or "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 Employer contributions
actually paid over to the Trust on behalf of a Participant for
the Plan Year to (2) the Participant's Compensation for such Plan
Year (whether or not the Employee was a Participant for the
entire Plan Year). Employer contributions on behalf of any
Participant shall include: (1) any Elective Deferrals made
pursuant to the Participant's deferral election, excluding Excess
Elective Deferrals and Elective Deferrals that are taken into
account in the Contribution Percentage test (provided the Actual
Deferral Percentage test is satisfied both with and without
exclusion of these Elective Deferrals); and (2) at the election
of the Employer, Qualified Non-elective 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.
SECTION 1.2 "Adoption Agreement" means the document
executed by the Employer which sets forth certain provisions that
in conjunction with this document constitute the Plan.
SECTION 1.3 "Adoption Date" means the date the
Adoption Agreement is signed.
SECTION 1.4 "Affiliated Company" means (1) a member of
an affiliated service group within the meaning of Section 414(m)
of the Code of which the Employer is a member; (2) a member of a
controlled group of corporations within the meaning of
Section 414(b) of the Code of which the Employer is a member;
(3) an unincorporated business which is part of a group of trades
or businesses (whether or not incorporated) under common control
with the Employer as determined pursuant to Section 414(c) of the
Code; or (4) any other entity required to be aggregated with the
Employer under Code Section 414. For purposes of this Section, a
controlled group of corporations means a group defined under
Section 1563(a) of the Code determined without regard to Code
Sections 1563(a)(4) and 1563(e)(3)(C). All employees, including
Leased Employees, of Affiliated Companies shall be treated as
employed by a single employer.
SECTION 1.5 "Aggregate Limit" shall mean the sum of
(i) 125 percent of the greater of the ADP of the Non-highly
Compensated Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the plan subject to Code
section 401(m) for the Plan Year beginning with or within the
Plan Year of the CODA and (ii) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted for "greater"
in "(i)", above, and "greater" is substituted for "lesser" after
"two plus the" in "(ii)" if it would result in a larger Aggregate
Limit.
SECTION 1.6 "Average Contribution Percentage" or "ACP"
shall mean the average of the Contribution Percentages of the
Eligible Participants in a group.
SECTION 1.7 "Beneficiary" means the Participant's
surviving spouse or, in the event there is no surviving spouse or
the surviving spouse elects in writing not to receive any
benefits under the Plan, the person or persons (including a
trust) designated by a Participant to receive any death benefit
which shall be payable under this Plan.
SECTION 1.8 "Board" means the Board of Directors of
the Employer or its equivalent governing body in the case of a
non-corporate Employer.
SECTION 1.9 "Break in Service" means that an Employee
fails to complete more than 500 Hours of Service during either an
Eligibility Computation Period or a Plan Year, whichever is
applicable (or one Hour of Service in the case of any Employer
who elects in the Adoption Agreement to define a Year of Service
as one Hour of Service in a Plan Year).
SECTION 1.10 "Code" means the Internal Revenue Code of
1986, as amended from time to time.
SECTION 1.11 "Committee" means the Administrative
Committee appointed by the Board pursuant to Article VIII to
administer the Plan.
SECTION 1.12 "Compensation" means either Total
Compensation, Base Salary or Wages, Base Salary or Wages with
inclusions, or Income Tax Withholding Wages, as elected in the
Adoption Agreement. Total Compensation means the total
remuneration before salary reduction, if any, under this Plan or
any other employee benefit plan governed by Code Sections 125,
402(a)(8), 402(h) or 403(b), paid during the Plan Year to a
Participant by the Employer for personal services actually
rendered for the Plan Year, excluding any Employer contributions
paid under this Plan or any other employee benefit plan and,
effective for Plan Years beginning after December 31, 1988, all
remuneration in excess of $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 years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1,
1990. If a plan determines Compensation on a period of time that
contains fewer than 12 calendar months, then the annual
Compensation limit is an amount equal to the annual Compensation
limit for the calendar year in which the Compensation period
begins multiplied by the ratio obtained by dividing the number of
full months in the period by 12. If Compensation for any prior
Plan Year is taken into account in determining an Employee's
contributions or benefits for the current year, the Compensation
for such prior Year is subject to the applicable annual
Compensation limit in effect for that prior Year. For this
purpose, for Years beginning before January 1, 1990, the
applicable annual compensation limit is $200,000.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section 414(q)(6) of
the Code shall apply, except that in applying such rules, the
term "family" shall include only the spouse 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 $200,000 limitation is exceeded, then
(except for purposes of determining the portion of Compensation
up to the integration level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected
Employees in proportion to each such Employee's Compensation as
determined under this Section prior to the application of this
limitation. In the case of a new Participant, Compensation, for
contribution purposes only, shall mean Compensation for the
entire Plan Year, or Compensation only after the date he becomes
a Participant, as elected in the Adoption Agreement.
Base Salary or Wages means the basic salary or wages
paid or accrued to a Participant by the Employer for personal
services actually rendered during the Plan Year, excluding
overtime, bonuses and any other extra remuneration of whatever
nature received during the Plan Year. If the employer elects
Base Salary or Wages (with or without inclusions) in the Adoption
Agreement, the Committee shall be responsible for ensuring
compliance with any applicable anti-discrimination tests required
under Code Section 414(s) and shall notify any affected
Participant of adjustments that may be required to satisfy such
tests.
Income Tax Withholding Wages means wages within the
meaning of Section 3401(a) of the Code and all other payments of
compensation to the Employee by the Employer (in the course of
the Employer's trade or business) for which the Employer is
required to furnish the Employee a written statement under
Sections 6041(d), 6051(a)(3) and 6052 of the Code, determined
without regard to any rules under Section 3401(a) that limit the
remuneration included in wages based on the nature or location of
the employment or the services performed.
Effective for Plan Years beginning after December 31,
1988, Compensation shall not include any remuneration in excess
of $200,000 (adjusted for cost of living increases as permitted
under the Code). In determining the Compensation of a
Participant for purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except that in applying such
rules, the term "family" shall include only the spouse and any
lineal descendents 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 $200,000 limitation is
exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan provides
for permitted disparity), the limitation shall be prorated among
the affected Employees in proportion to each such Employee's
Compensation as determined under this Section prior to the
application of this limitation. In the case of a new
Participant, Compensation, for contribution purposes only, shall
mean Compensation for the entire Plan Year, or Compensation only
after the date he becomes a Participant, as elected in the
Adoption Agreement.
In addition to other applicable limitations set forth
in the Plan, and notwithstanding any other provision of the Plan
to the contrary, for Plan Years beginning on or after January 1,
1994, the annual compensation of each Employee taken into account
under the Plan shall not exceed the OBRA '93 annual compensation
limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Code. The cost-
of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994,
any reference in this plan to the limitation under
section 401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If compensation for any prior determination period is
taken into account in determining an Employee's benefits accruing
in the current Plan Year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the
first day of the first Plan Year beginning on or after January 1,
1994, the OBRA '93 annual compensation limit is $150,000.
If any Employees are Self-employed Individuals,
Compensation shall mean the net earnings from self-employment in
the trade or business with respect to which the Plan is
established, for which personal services of the individual are a
material income-producing factor. Net earnings will be
determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are
reduced by contributions by the Employer to a qualified plan to
the extent deductible under Section 404 of the Code. Net
earnings shall be determined with regard to the deduction allowed
for one-half of self-employment taxes under Section 164(f) of the
Code for taxable years beginning after December 31, 1989.
SECTION 1.13 "Contribution Percentage" shall mean the
ratio (expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's Compensation
for the Plan Year (whether or not the Employee was a Participant
for the entire Plan Year).
SECTION 1.14 "Contribution Percentage Amounts" shall
mean the sum of employee contributions made to this Plan between
the first day of the Plan Year beginning after December 31, 1986
and the Adoption Date, and any employee contributions made under
any other plan which may be aggregated with this Plan for testing
purposes, and 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. Such Contribution Percentage Amounts shall
include forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's accounts which shall
be taken into account in the Year in which such forfeiture is
allocated. If so elected in the Adoption Agreement the Employer
may include Qualified Non-elective Contributions in the
Contribution Percentage Amounts. The Employer also may elect to
use Elective Deferrals in the Contribution Percentage Amounts so
long as the ADP test is met before the Elective Deferrals are
used in the ACP test and continues to be met following the
exclusion of those Elective Deferrals that are used to meet the
ACP test.
SECTION 1.15 "Disability" means an 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.
SECTION 1.16 "Early Retirement Age" means the date a
Participant satisfies the requirements for early retirement
specified in the Adoption Agreement. If a Participant separates
from service before satisfying the age requirement for early
retirement, but has satisfied the service requirement, the
Participant will be entitled to elect an early retirement benefit
upon satisfaction of such age requirement.
SECTION 1.17 "Effective Date" means the date
designated as such in the Adoption Agreement.
SECTION 1.18 "Elective Deferrals" means any Employer
contributions 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 an
election to defer under any qualified cash or deferred
arrangement 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) of the Code, and any
Employer contributions made on behalf of a Participant for the
purchase of an annuity contract under Section 403(b) of the Code
pursuant to a salary reduction agreement.
SECTION 1.19 "Elective Deferral Account" means the
account maintained for a Participant to record his Elective
Deferrals, if any, as provided in Section 1.18 and adjustments
relating thereto.
SECTION 1.20 "Eligibility Computation Period" -- 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 Employment Date including service prior to the date
this Plan was originally adopted. In the case of a Plan which
requires one Year of Service for eligibility to participate, the
succeeding 12-consecutive month periods commence with the first
Plan Year which commences prior to the first anniversary of the
Employee's Employment Date regardless of whether the Employee is
entitled to be credited with 1,000 Hours of Service (or such
lesser number of Hours as may be designated in the Adoption
Agreement) during the initial Eligibility Computation Period. An
Employee who is credited with 1,000 Hours of Service (or such
lesser number of Hours as may be designated in the Adoption
Agreement) in both the initial Eligibility Computation Period and
the first Plan Year which commences prior to the first
anniversary of the Employee's initial Eligibility Computation
Period will be credited with two Years of Service for purposes of
eligibility to participate.
In the case of a Plan which requires two Years of
Service for eligibility to participate, succeeding 12-consecutive
month periods will commence on the anniversaries of the
Employee's Employment Date.
SECTION 1.21 "Eligible Participant" shall mean 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).
SECTION 1.22 "Employee" means any employee of, or
Self-employed Individual with an ownership interest in, the
Employer maintaining the Plan or of any other employer required
to be aggregated with the Employer under Sections 414(b), (c),
(m), or (o) of the Code. The term Employee shall also include
any Leased Employee deemed to be an employee of any employer
described in the previous sentence as provided in Sections 414(n)
or (o) of the Code.
SECTION 1.23 "Employee Contribution Account" means the
account maintained for a Participant to record any after-tax
contributions made to this Plan.
SECTION 1.24 "Employer" means the entity on whose
behalf the Adoption Agreement is executed and its predecessor or
successor.
SECTION 1.25 "Employer Discretionary Contributions"
means Employer contributions (other than Matching Contributions
or Qualified Non-elective 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.
SECTION 1.26 "Employer Discretionary Contribution
Account" means the account maintained for a Participant to record
his share of the Employer Discretionary Contributions as provided
in Section 1.23, Forfeitures, and adjustments relating thereto.
SECTION 1.27 "Employment Date" means the date on which
an Employee first performs one Hour of Service for the Employer.
SECTION 1.28 "Entry Date" means the date so designated
in the Adoption Agreement.
SECTION 1.29 "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from time to time.
SECTION 1.30 "Excess Aggregate Contributions" shall
mean, with respect to any Plan Year, the excess of:
(a) 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
(b) The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by reducing
contributions made on behalf of Highly Compensated
Employees in order of their Contribution
Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals and then determining Excess Contributions
pursuant to Section 4.3.
SECTION 1.31 "Excess Contributions" means, with
respect to any Plan Year, the excess of:
(a) The aggregate amount of Employer contributions
actually taken into account in computing the ADP
of Highly Compensated Employees for such Plan
Year, over
(b) The maximum amount of such contributions permitted
by the ADP test (determined by reducing
contributions made on behalf of Highly Compensated
Employees in order of the ADPs, beginning with the
highest of such percentages).
SECTION 1.32 "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 such Code Section.
SECTION 1.33 "Five Percent Owner" means the owner of
more than five percent of the outstanding stock of the Employer,
as further defined in Section 416 of the Code.
SECTION 1.34 "Forfeiture" means that portion of a
Participant's Employer Discretionary Contribution Account or
Matching Contribution Account which is forfeited before full
vesting.
SECTION 1.35 "Former Participant" means a Participant
on whose behalf no current contributions are being made due to
termination of employment or other reasons but who has a vested
account balance under the Plan which has not been paid in full.
SECTION 1.36 "Highly Compensated Employee" means
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: (i)
received Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (ii) received
Compensation from the Employer in excess of $50,000 (as adjusted
pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) 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: (i) 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 (ii) 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 (iii) above during either a determination year or
look-back year, the highest paid officer for such year shall be
treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the
Plan Year. The look-back year shall be the twelve-month period
immediately preceding the determination year.
A highly compensated former Employee 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 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 or 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.
SECTION 1.37 "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), layoff, jury duty, military duty or
leave of absence. No more than 501 Hours of
Service will be credited under this paragraph for
any single continuous period (whether or not such
period occurs in a single computation period).
Hours under this paragraph will be calculated and
credited pursuant to Section 2530.200b-2(b) and
(c) 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.
Hours of Service will be credited for employment
with other members of an affiliated service group
(under Code Section 414(m)), a controlled group of
corporations (under Code Section 414(b)), or a
group of trades or businesses under common control
(under Code Section 414(c)) of which the adopting
employer is a member, and any other entity
required to be aggregated with the Employer
pursuant to Code Section 414 and the regulations
thereunder.
Hours of Service will also be credited for any
individual considered an Employee for purposes of
this plan under Code Section 414(n) or Section
414(o) and the regulations thereunder.
Solely for purposes of determining whether a Break
in Service, as defined in Section 1.8, for
participation and vesting purposes has occurred in
a computation period, an individual who is absent
from work for maternity or paternity reasons shall
receive credit for the Hours of Service which
would otherwise have been credited to such
individual but for such absence, or in any case in
which such hours cannot be determined, 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 individual,
(2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a
child with the individual in connection with the
adoption of such child by such individual, or (4)
for purposes of caring for such child for a period
beginning immediately following such birth or
placement. The Hours of Service credited under
this paragraph shall be credited (1) in the
computation period in which the absence begins if
the crediting is necessary to prevent a Break in
Service in that period, or (2) in all other cases,
in the following computation period.
(d) An Hour of Service shall be credited for each hour
of the normally scheduled work hours for each day
during any period the Employee is on leave of
absence from the Employer or any Affiliated
Company for military service with the Armed Forces
of the United States, but not to exceed the period
required under the law pertaining to veterans'
reemployment rights; provided that if the Employee
fails to report for work at the end of such leave
during which he has employment rights, he shall
not receive credit for hours on such leave.
SECTION 1.38 "Income" means the net gain or loss of
the Trust Fund from investments, as reflected by interest
payments, dividends, realized and unrealized gains and losses on
securities, other investment transactions and expenses paid from
the Trust Fund.
SECTION l.39 "Investment Manager" means any individual
or corporation who may be appointed by the Board to manage all or
a portion of the Plan's assets and who (i) is registered as an
investment adviser under the Investment Adviser's Act of l940; or
(ii) is a bank as defined in that Act; or (iii) is an insurance
company qualified to manage, acquire or dispose of plan assets
under the laws of more than one state and such individual or
corporation acknowledges in writing that he or the corporation,
as the case may be, is a fiduciary with respect to the Plan.
SECTION 1.40 "Leave of Absence" means any absence
authorized by the Committee provided that all persons under
similar circumstances must be treated alike in the granting of
such Leaves and provided further that the Participant returns
within the period of authorized absence.
SECTION 1.41 "Leased Employee" means any person (other
than an employee of the Employer) who pursuant to an agreement
between the Employer and any other person (the "leasing
organization") has performed services for the Employer (or for
the Employer and related persons determined in accordance with
Section 414(n)(6) of the Code) on a substantially full time basis
for a period of at least one year, and such services are of a
type historically performed by employees in the business field of
the Employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided
by the Employer.
A Leased Employee shall not be considered an employee
of the Employer if: (i) such employee is covered by a money
purchase pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as
defined in Section 415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the employee's gross income
under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code, (2) immediate participation, and (3) full and
immediate vesting; and (ii) Leased Employees do not constitute
more than 20 percent of the Employer's Non-highly Compensated
Employee work force.
SECTION 1.42 "Matching Contribution" means an Employer
contribution, as specified in the Adoption Agreement 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 this
Plan or any other plan maintained by the Employer.
SECTION 1.43 "Matching Contribution Account" means the
account maintained for a Participant to record his share of the
Employer's Matching Contributions, if any, under Section 1.40 of
this Plan and adjustments relating thereto.
SECTION 1.44 "Non-highly Compensated Employee" means
an Employee who is not a Highly Compensated Employee.
SECTION 1.45 "Normal Retirement Age" means the age
designated as such in the Adoption Agreement.
SECTION 1.46 "Owner-employee" means an individual who
is a sole proprietor, or who is a partner owning more than 10
percent of either the capital or profits interest of the
partnership.
SECTION 1.47 "Participant" means an Employee
participating in the Plan in accordance with the provisions of
Section 2.1.
SECTION 1.48 "Plan" means this Nixon, Hargrave, Devans
& Doyle llp Regional Prototype 401(k) Retirement Savings Plan as
set forth herein and in the Adoption Agreement, as amended from
time to time.
SECTION 1.49 "Qualified Joint and Survivor Annuity"
means an immediate annuity for the life of the Participant with a
survivor annuity for the life of the Participant's spouse which
equals one-half of the annuity payable during the joint lives of
the Participant and the Participant's spouse. The Qualified
Joint and Survivor Annuity will be the amount of benefit which
can be purchased with the Participant's account balance.
SECTION 1.50 "Qualified Non-elective Contributions"
means contributions (other than 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 when made; and that are
distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals.
SECTION 1.51 "Qualified Non-elective Contribution
Account" means the account maintained for a Participant to record
his share of the Employer's Qualified Non-elective Contributions,
if any, under Section 1.50 and adjustments relating thereto.
SECTION 1.52 "Qualified Pre-retirement Survivor
Annuity" means an annuity for the surviving spouse of a
Participant in an amount equal to the amount payable to such
surviving spouse if benefits had been paid as a Qualified Joint
and Survivor Annuity. If the Participant dies after his Early
Retirement Date, the benefit amount shall be determined as if the
Participant had retired with an immediate Qualified Joint and
Survivor Annuity on the day before his death. In the case of a
Participant who has any vested Accrued Benefit and who dies on or
before his Early Retirement Age, the benefit amount shall be
calculated as if he had (a) separated from service on his date of
death; (b) survived to his Early Retirement Age; (c) retired with
an immediate Qualified Joint and Survivor Annuity on his Early
Retirement Age; and (d) died on the day after what would have
been his Early Retirement Age.
SECTION 1.53 "Rollover Account" means the account
maintained in accordance with Section 3.6 to hold the assets of
any tax qualified retirement plan which are transferred to this
plan.
SECTION 1.54 "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 and 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.
SECTION 1.55 "Social Security Taxable Wage Base" means
the maximum amount of earnings which may be considered wages for
any given year under Section 3121(a)(1) of the Code in effect at
the beginning of the Plan Year.
SECTION 1.56 "Sponsor" means Nixon, Hargrave, Devans &
Doyle llp, a law partnership with its principal office in
Rochester, New York.
SECTION 1.57 "Trust" or "Trust Fund" means the assets
held under the Plan by the Trustee.
SECTION 1.58 "Trustee" means any trustee that may be
designated by the Employer.
SECTION 1.59 "Valuation Date" means the last day of
each Plan Year or the last day of any other shorter period on
which the Trust may have been valued in the discretion of the
Committee. Use of shorter periods and the subsequent adjustment
to each Participant's account shall not discriminate in favor of
Highly Compensated Employees.
SECTION 1.60 "Year" or "Plan Year" means the
12-consecutive-month period designated in the Adoption Agreement.
The Plan Year shall be the vesting computation period and, unless
a different period is designated in the Adoption Agreement, the
limitation year as these terms are used in regulations
promulgated pursuant to ERISA.
SECTION 1.61 "Year of Service" means, for eligibility
purposes, any Eligibility Computation Period during which an
Employee completes at least 1000 (or such lesser number as may be
designated in the Adoption Agreement) Hours of Service with the
Employer or with an Affiliated Company. For vesting purposes,
Year of Service means a Plan Year during which an Employee
completes at least 1000 (or such lesser number as may be
designated in the Adoption Agreement) Hours of Service with the
Employer or with an Affiliated Company, but shall not include any
years excluded under the Adoption Agreement. Hours shall be
credited pursuant to the method designated in the Adoption
Agreement. For vesting purposes a Participant's Years of Service
shall not include any years excluded in the Adoption Agreement.
SECTION 1.62 The masculine gender whenever used shall
include the feminine and the singular shall include the plural,
unless the context clearly indicates the contrary.
<PAGE>
ARTICLE II
Participation and Service
Eligi- SECTION 2.1 Where this Plan amends a prior
bility plan, each Employee who is a Participant in the
and Plan immediately preceding the Effective Date
Parti- shall continue as a Participant. Each Employee
cipation who is not a Participant on such date shall be
eligible to become a Participant upon completion of
the eligibility standards (age, service, and/or
class of employee) set forth in the Adoption
Agreement. An Employee who otherwise satisfies all
the eligibility requirements other than meeting the
service requirement during his initial Eligibility
Computation Period shall be eligible to become a
Participant on the last day of the first Year
(beginning with the Year which includes the first
anniversary of the Employment Date) in which he does
complete the service requirement. Participation in
the Plan will commence as of the Entry Date set
forth in the Adoption Agreement. Notwithstanding
anything herein to the contrary, each Employee will
participate no later than the earlier of: (1) the
first day of the Plan Year beginning after the date
on which the Employee has met the minimum age and
service requirements or (2) six months after the
date the requirements are met. In the event the
Employer chooses a six month or less service
requirement with a single Entry Date, an Employee
will be eligible to participate upon satisfying the
specified service requirement regardless of the
number of Hours of Service he has completed.
Furthermore, Employees will commence participation
in the Plan on the single Entry Date regardless of
the provisions of this paragraph. Participation
shall cease as of the last day of the Plan Year
during which a Participant terminates employment
with the Employer; provided, however, that if the
Employer has elected in the Adoption Agreement to
make an allocation of Matching Contributions and/or
Employer Discretionary Contributions to certain
Participants who are not employed on the last day of
the Plan Year, then such allocations will be made.
Inactive SECTION 2.2 In the event that any Participant
Status shall fail, in any Plan Year after the Effective
Date, to complete 1000 Hours of Service (or such
lesser number of hours specified in the Adoption
Agreement as constituting a Year of Service), or if
he ceases to be a member of the class of Employees
eligible to participate without terminating
employment, he shall be treated as an inactive
Participant with respect to discretionary Employer
contributions under Article III and shall not share
in the Employer's discretionary contributions for
any such Plan Year, but he may continue to make
Elective Deferrals to the extent permitted by the
Adoption Agreement and shall continue to receive
Income allocations in accordance with
Section 4.2(a). In the event such Participant
completes 1000 Hours of Service (or such lesser
number of Hours specified in the Adoption Agreement)
or rejoins the class of eligible Employees in a
subsequent Plan Year, he shall revert to active
status with full rights and privileges under this
Plan restored.
Participa- SECTION 2.3 If so elected in the Adoption
tion and Agreement, in the case of any Employee who
Service terminates employment from the Employer or
upon any Affiliated Company and is later rehired
Reem- by the Employer, all pre-termination Years
ployment of Service shall be taken into account under
the Plan. If no such election is made, in the case
of a Participant who does not have any non-
forfeitable right to the account balance derived
from Employer contributions, Years of Service before
a period of consecutive one year Breaks in Service
will not be taken into account 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 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.
In the case of any Participant who has a one year
Break in Service, years of eligibility service
before such Break will not be taken into account
until the Employee has completed one Year of Service
after returning to employment.
Such Year of Service will be measured by the
12-consecutive month period beginning on an
Employee's reemployment commencement date and, if
necessary, Plan Years beginning with the Plan Year
which includes the first anniversary of the
reemployment commencement date.
The reemployment commencement date is the first
day on which the Employee is credited with an Hour
of Service for the performance of duties after the
first Eligibility Computation Period in which the
Employee incurs a one year Break in Service.
If a Participant completes one Year of Service in
accordance with this provision, his participation
will be reinstated as of the reemployment
commencement date.
In the event a Participant is no longer a member
of an eligible class of Employees and becomes
ineligible to participate but has not incurred a
Break in Service, such Employee will participate
immediately upon returning to an eligible class of
Employees. 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 is not a member of an
eligible class of Employees becomes a member of an
eligible class, such Employee will participate
immediately if such Employee has satisfied the
minimum age and service requirements and would have
otherwise previously become a Participant.
Owner- SECTION 2.4 If this Plan provides contributions
Employee or benefits for one or more Owner-employees who
Provi- control both the business for which this Plan is
sion established and one or more other trades or
businesses, this Plan and the plan established for
other trades or businesses must, when looked at as a
single plan, satisfy Sections 401(a) and (d) of the
Code for the employees of this and all other trades
or businesses. If the Plan provides contributions
or benefits for one or more Owner-employees who
control one or more other trades or businesses, the
employees of the other trades or businesses must be
included in a plan which satisfies Sections 401(a)
and (d) and which provides contributions and
benefits not less favorable than provided for
Owner-employees under this Plan. Furthermore, if an
individual is covered as an Owner-employee under the
plans of two or more trades or businesses which are
not controlled and the individual controls a trade
or business, then the contributions or benefits of
the employees under the plan of the trades or
businesses which are controlled must be as favorable
as those provided for him under the most favorable
plan of the trade or business which is not
controlled.
For purposes of this provision, an Owner-employee,
or two or more Owner-employees, will be considered
to control a trade or business if the
Owner-employee, or two or more Owner-employees
together:
(a) own the entire interest in an unincorporated
trade or business, or
(b) in the case of a partnership, own more than
50 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.
<PAGE>
ARTICLE III
Contributions and Forfeitures
Employer SECTION 3.1 Each Plan Year the Employer
Discre- shall make a Discretionary Contribution, if
tionary any, as specified in the Adoption Agreement.
Contri-
butions
Employee SECTION 3.2 A Participant may contribute
Elective any such percentage or amount of Compensation
Defer- during a payroll period or such percentage or
rals- amount of any bonus as may be provided in the
Adoption Agreement that would otherwise be payable
by the Employer to him currently in cash. For
purposes of this Section, Compensation shall mean
Compensation with any modifications specified in the
Adoption Agreement. Notwithstanding the foregoing,
no such Elective Deferral can exceed the
contribution limitations set forth in Article IV
nor, except as permitted by the Committee as part of
an arrangement to satisfy the contribution
limitations set forth in Article IV, the amount of
Compensation paid to the Participant for the
contribution period.
Elective Deferrals under this Section may be made
solely pursuant to a salary reduction or bonus
deferral agreement between an individual Participant
and the Employer. The agreement shall be in such
form and subject to such rules as the Committee may
prescribe. Under the agreement, the Participant
agrees to reduce his Compensation by a specified
amount and the Employer agrees to contribute this
salary-reduced amount to the Plan on behalf of the
Participant. Salary reduction agreements may be
entered into or amended as set forth in the Adoption
Agreement. Unless the Committee in its sole
discretion permits additional agreements, no other
agreements will be permitted during a Year but an
agreement may be terminated at any time during the
Plan Year. An agreement will not be considered
terminated solely because the Participant fails to
receive any Compensation during a payroll period.
The Employer will remit Elective Deferrals to the
Trustee as soon as practicable following each
contribution period. Employee contributions under
this Section shall be allocated to a Participant's
Elective Deferral Account.
Employer SECTION 3.3 The Employer shall contribute
Matching as Matching Contributions each Plan Year an amount,
Contri- if any, equal to a percentage of the aggregate
butions Elective Deferrals under Section 3.2 of eligible
Participants, as specified in the Adoption
Agreement.
Qualified SECTION 3.4 The Employer may elect to make
Non- Qualified Non-elective Contributions under the
elective Plan on behalf of Employees as provided in the
Contri- Adoption Agreement. Such contributions shall be
butions made for the purpose of permitting the Plan to pass
the Average Contribution Percentage test, or the
Average Deferral Percentage test, or both, under
Section 4.3, and, therefore, shall be fully vested
at all times and subject to the distribution
limitations of Section 6.7.
In addition, in lieu of distributing Excess
Contributions as provided in Section 4.5 of the
Plan, or Excess Aggregate Contributions as provided
in Section 4.6 of the Plan, and to the extent
elected by the Employer in the Adoption Agreement,
the Employer may make Qualified Non-elective
Contributions on behalf of Non-highly Compensated
Employees that are sufficient to satisfy either the
Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to
regulations under the Code.
Rollover SECTION 3.5 Notwithstanding the limitations
Contri- on Elective Deferrals under Section 3.2, the
butions Employer may elect in the Adoption Agreement to
permit either Employees who have satisfied the
eligibility requirements of the Plan except for the
waiting period required by the Adoption Agreement,
if any, or Participants to make rollover
contributions (as defined in Sections 402(a)(5),
403(a)(4), 408(d)(3) and 409(b)(3)(C) of the Code)
in accordance with rules the Committee may
establish. In addition, the Committee in its sole
discretion may arrange for a Participant's or an
Employee's account in any tax-qualified plan of any
prior employer of the Participant to be transferred
directly to his Rollover Account under this Plan.
No rollover contribution or transfer shall be
permitted if it could adversely affect the tax
qualification of this Plan.
Form and SECTION 3.6 All Employer contributions
Timing shall be made in cash or in other property
of acceptable to the Trustee. The Employer's
Employer contributions for a Plan Year shall be paid
Contri- to the Trustee not later than the date
butions prescribed by law for filing the Employer's
federal income tax returns (including extensions
thereof) for the Employer's taxable year ending
coincident with or next following the Plan Year to
which the contributions relate.
Employee SECTION 3.7 If this Plan permitted
Contri- Participants to make after-tax contributions
butions and if the Employee Contribution Accounts were in
existence between the first day of the Plan Year
beginning after December 31, 1986 and the Adoption
Date, the following provisions shall become
applicable:
(a) If employee contributions are being made as
of the Adoption Date, such contributions
shall cease as soon as administratively
possible following the Adoption Date.
(b) Employee contributions made during the Plan
Years beginning after December 31, 1986 must
pass the Average Contributions Percentage
Test of Section 401(m) as described in
Section 4.3 of this Plan.
(c) Contributions made by a Participant and the
earnings thereon shall be allocated to the
Participant's Employee Contribution Account.
Employee contributions shall be
nonforfeitable at all times.
(d) A Participant may elect to withdraw any
amount up to 100 percent of the balance in
his Employee Contribution Account. Any such
withdrawal may be made at any time but only
one withdrawal will be permitted in each Plan
Year.
<PAGE>
ARTICLE IV
Allocations to Participants' Accounts
Individual SECTION 4.1 The Committee shall create and
Accounts maintain individual accounts as records for
disclosing the interest in the Trust of each
Participant, Former Participant and Beneficiary.
Such accounts shall record credits and charges in
the manner herein described. When appropriate, a
Participant shall have five separate accounts, an
Employer Discretionary Contribution Account, a
Matching Contribution Account, a Qualified
Non-elective Contribution Account, an Elective
Deferral Account, and a Rollover Account. The
maintenance of individual accounts is only for
accounting purposes, and a segregation of the assets
of the Trust Fund to each account shall not be
required. Distributions and withdrawals made from
an account shall be charged to the account as of the
date paid, and the account balance shall be
determined as of the most recent Valuation Date.
Account SECTION 4.2 The accounts of Participants, Former
Adjust- Participants and Beneficiaries shall be adjusted in
ments accordance with the following:
(a) Income: The Income of the Trust Fund shall
be allocated to the accounts of Participants,
Former Participants and Beneficiaries who had
balances in their accounts on each Valuation
Date, and to accounts which are holding
Forfeitures was pending disposition under
subsection (f). This allocation shall be
made in the ratio that the value of each
Participant's account bears to the total
value of all Participant accounts similarly
invested. Each valuation shall be based on
the fair market value of the assets in the
Trust Fund on the Valuation Date.
(b) Employer Contributions: As of the end of
each Plan Year, the Employer's Matching
Contributions under Section 3.3, and
Qualified Non-elective Contributions under
Section 3.4 for the Plan Year on behalf of a
Participant shall be allocated to that
Participant's Matching Contribution Account
and Qualified Non-elective Contribution
Account, respectively, provided the
Participant is eligible to receive an
allocation of the contributions. Unless the
Plan is integrated with Social Security as
described below, the Employer Discretionary
Contributions for the Plan Year under
Section 3.l shall be allocated among the
Employer Discretionary Contribution Accounts
of those Participants whose accounts were not
inactive as determined under Section 2.2.
All Employer Discretionary Contributions
shall be allocated in accordance with the
terms of the Adoption Agreement.
In the case of an Adoption Agreement
which provides for permitted disparity, the
Employer's Discretionary Contribution plus
any Forfeitures will be allocated to
Participants' accounts as follows:
(i) The Employer's contributions and
Forfeitures (if Forfeitures are
reallocated under the Adoption
Agreement) will be allocated to each
Participant's Employer Discretionary
Contribution Account in the ratio that
the sum of the Participant's total
Compensation and Compensation in excess
of the integration level specified in
the Adoption Agreement bears to the sum
of all Participants' total Compensation
and Compensation in excess of the
integration level, but not in excess of
the maximum disparity rate.
(ii) Any remaining Employer Discretionary
Contribution or Forfeitures will be
allocated to each Participant's Employer
Discretionary Contribution Account in
the ratio that each Participant's total
Compensation for the Plan Year bears to
all Participants' total Compensation for
that Year.
For purposes of these allocations the integration
level shall be equal to the Social Security
Taxable Wage Base or such lesser amount elected by
the Employer in the Adoption Agreement.
The maximum disparity rate is equal to the lesser
of:
(i) 5.7 percent, or
(ii) the applicable percentage determined in
accordance with the table below:
If the Integration But not The applicable
Level is more than more than percentage is
$0 the greater of 5.7%
$10,000 or 20%
of the Social
Security Taxable
Wage Base
the greater of 80% of Social 4.3%
$10,000 or 20% Security Taxable
of the Social Wage Base
Security
Taxable Wage
Base
80% of Social 100% of the 5.4%
Security Taxable Social Security
Wage Base Taxable Wage Base
If the integration level used is equal to the
Social Security Taxable Wage Base, the applicable
percentage is 5.7 percent. If the rate of tax
under Section 3111(a) (in effect at the beginning
of the year) which is attributable to old-age
insurance exceeds 5.7 percent, such higher rate
shall be effective each place where 5.7 percent is
used as the applicable percentage.
In the event this Plan is or becomes top heavy in
any Plan Year an initial allocation shall be made
prior to (i) above of all Employer Discretionary
Contributions and Forfeitures to each
Participant's Employer Discretionary Contribution
Account (or Matching Contribution Account if
Employer Discretionary Contributions are not made
under this Plan) in the ratio that each
Participant's total Compensation bears to all
Participants' total Compensation but not in excess
of three percent of each Participant's
Compensation.
(c) Employee Contributions: Any employee
after-tax contributions shall be allocated to
the Participant's Employee Contribution
Account.
(d) Elective Deferrals: A Participant's Elective
Deferrals during a month shall be allocated
to his Elective Deferral Account as of the
end of each month.
(e) Forfeitures: As of the end of each Plan
Year, Forfeitures which have become available
during such Plan Year and are not required
for allocation under Section 4.2(f) below
shall be allocated to Participants or used to
reduce the Employer's contributions as
provided for in the Adoption Agreement.
(f) Forfeiture Account: If a distribution is
made at a time when a Participant has a
nonforfeitable right to less than 100 percent
of the account balance derived from Employer
contributions and the Participant may
increase the nonforfeitable percentage in the
account:
(i) A separate account will be established for
the Participant's interest in the Plan as of
the time of the distribution; and
(ii) At any relevant time the Participant's
nonforfeitable portion of the separate
account will be equal to an amount ("X")
determined by the formula:
X=P(AB + (R x D)) - (R x D)
For purposes of applying the formula: P is the
nonforfeitable percentage at the relevant time, AB
is the account balance at the relevant time, D is
the amount of the distribution, and R is the ratio
of the account balance at the relevant time to the
account balance after distribution.
Limi- SECTION 4.3 Notwithstanding the contribution
tations levels specified in Article III, no contributions
on Con- will be permitted in excess of the limits set
tribu- forth in Article V or the limits set forth below:
tions
Code A Participant's Elective Deferrals to this
Section Plan and any other plan in which he may
402(g) participate shall not exceed $7,000 (adjusted for
Limits cost of living increases after 1987 as provided
under Code Section 402(g)(5)) in any taxable year of
the Participant. To meet this limit no contribution
to this Plan in excess of $7,000 (or such higher
amount as adjusted for cost of living increases)
shall be accepted on behalf of any Participant
during a calendar year. If a Participant
participates in more than one Plan, he shall notify
the Committee of any Excess Elective Deferrals in a
calendar year by the date specified in the Adoption
Agreement. A Participant is deemed to notify the
Committee of any Excess Elective Deferrals that
arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of
the Employer. The Committee shall then cause the
portion of such excess (and the earnings and losses
attributable thereto) allocated to this Plan,
together with the earnings attributable thereto, to
be returned to the Participant by April 15 following
the calendar year to which the Excess Elective
Deferral relates.
Code The Actual Deferral Percentage, or ADP, for
Section Participants who are Highly Compensated Employees
401(k) for each Plan Year and the ADP for Participants who
Limits are Non-highly 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
Non-highly 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
Non-highly Compensated Employees for the same
Plan Year multiplied by 2.0, provided that
the ADP for Participants who are Highly
Compensated Employees does not exceed the ADP
for Participants who are Non-highly
Compensated Employees by more than two
percentage points.
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
Non-elective Contributions, 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 Non-elective Contributions) were
made under a single arrangement. If a Highly
Compensated Employee participates in two or more
cash or deferred arrangements that have different
Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall
be treated as a single arrangement.
For purposes of the ADP Test, compensation
means compensation as defined in Section 414(s) of
the Code. The period during which compensation is
determined for a Plan Year shall be either the
Plan Year or the calendar year ending with or
within the Plan Year as determined by the
Committee. The period selected shall be applied
uniformly to all eligible Employees.
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.
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
Non-elective Contributions, if treated as Elective
Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the
Elective Deferrals (and, if applicable, Qualified
Non-elective Contributions) and 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
Non-highly Compensated Employees and for
Participants who are Highly Compensated Employees.
For purposes of determining the ADP test,
Elective Deferrals, Qualified Non-elective
Contributions must be made before the last day of
the twelve-month period immediately following the
Plan Year to which the contributions relate.
The Employer shall maintain records
sufficient to demonstrate satisfaction of the ADP
test and the amount of Qualified Non-elective
Contributions used in such test.
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.
Code The Average Contribution Percentage, or ACP, for
Section Participants who are Highly Compensated Employees
401(m) for each Plan Year and the ACP for Participants
Limits who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following
tests:
(a) The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall
not exceed the ACP for Participants who are
Non-highly 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
Non-highly 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 Non-highly
Compensated Employees by more than two
percentage points.
If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement
as defined in Section 401(k) of the Code 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
ADP of those Highly Compensated Employees who also
participate in the plan subject to the ACP test
will be reduced (beginning with the Highly
Compensated Employee whose ADP is the highest) so
that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Actual
Deferral Percentages is reduced shall be treated
as an Excess Contribution. If reduction of the
ADP's of Highly Compensated Employees fails to
result in the Plan's satisfying the Aggregate
Limit, then the ACP of those Highly Compensated
Employees who also participate in the cash or
deferred arrangement will next be reduced
(beginning with the 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
Amounts 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 Non-highly Compensated Employees.
For purposes of this Section, 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.
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 shall be applied by determining the
Contribution Percentages 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(m) of
the Code only if they have the same Plan Year.
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
Amount and Compensation of such Participant shall
include the Contribution Percentage Amounts and
Compensation for the Plan Year of family members
(as defined in Section 414(g)(6) of the Code).
Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate
employees in determining the Contribution
Percentages both for Participants who are
Non-highly Compensated Employees and for
Participants who are Highly Compensated Employees.
For purposes of determining the Contribution
Percentage test, Matching Contributions and
Qualified Non-elective Contributions will be
considered made for a Plan Year if made no later
than the end of the twelve-month period beginning
on the day after the close of the Plan Year.
The Employer shall maintain records
sufficient to demonstrate satisfaction of the ACP
test and the amount of Qualified Non-elective
Contributions used in such test.
The Committee shall have the responsibility
for monitoring compliance with this test and shall
have the power to take any steps it deems
appropriate to ensure compliance, including
limiting the amount of salary reduction permitted
by the Highly Compensated Employees or requiring
that the contributions for the Highly Compensated
Employees be delayed or held in escrow before
being paid over to the Trustee until such time as
the Committee determines that contributions can be
made on behalf of the Highly Compensated Employees
without violating the requirements of Code
section 401(k). Within two and one-half months
following the end of a Plan Year the Committee
shall distribute such contributions (and earnings
attributable thereto) as may be in excess of the
amounts required to satisfy the special
nondiscrimination test under this Section, or
shall make such additional contributions under
Sections 3.4 and 3.5 as necessary to satisfy the
test.
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.
Distrib- SECTION 4.4 Notwithstanding any other provision
ution of of this Plan, Excess Contributions, plus any income
Excess and minus any loss allocable thereto, shall be
Contrib- distributed no later than the last day of each Plan
utions Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more
than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten
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 as Elective Deferrals) of each family member
that is combined to determine the combined ADP.
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 Account (and, if
applicable, the Qualified Non-elective Contribution
Account) for the Plan Year multiplied by a fraction,
the numerator of which is such Participant's Excess
Contributions for the Year and the denominator of
which is the Participant's account balance
attributable to Elective Deferrals (and Qualified
Non-elective Contributions, 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 of such month.
Excess Contributions shall be distributed from the
Participant's Elective Deferral Account (if
applicable) in proportion to the Participant's
Elective Deferrals (to the extent used in the ADP
test) for the Plan Year. Excess Contributions shall
be distributed from the Participant's Qualified
Non-elective Contribution Account only to the extent
that such Excess Contributions exceed the balance in
the Participant's Elective Deferral Account.
Distrib- SECTION 4.5 Notwithstanding any other provision
ution of this Plan, Excess Aggregate Contributions, plus
of any income and minus any loss allocable thereto,
Excess shall be forfeited, if forfeitable, or if not
Aggre- forfeitable, distributed, no later than the last day
gate of each Plan Year to Participants to whose accounts
Contrib- such Excess Aggregate Contributions were allocated
utions for the preceding Plan Year. Excess Aggregate
Contributions shall be allocated to Participants who
are subject to the family member aggregation rules
of Section 414(q)(6) of the Code in the manner
prescribed by the regulations. If such Excess
Aggregate Contributions are distributed more than
2 1/2 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.
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: (1)
income or loss allocable to the Participant's
Matching Contribution Account (if any, and if all
amounts therein are not used in the ADP test) and,
if applicable, Qualified Non-elective Contribution
Account and Elective Deferral Account 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 (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 of such month.
Forfeitures of Excess Aggregate Contributions may
either be reallocated to the accounts of Non-highly
Compensated Employees or applied to reduce Employer
contributions, as elected by the Employer in the
Adoption Agreement.
Excess Aggregate Contributions shall be forfeited,
if forfeitable or distributed on a pro-rata basis
from the Participant's Matching Contribution Account
(and, if applicable, the Participant's Qualified
Non-elective Contribution Account or Elective
Deferral Account, or both).
Notifi- SECTION 4.6 Once each Plan Year the Committee
cation shall notify each Participant in writing of the
to Par- amounts standing to his credit in his accounts. The
tici- Committee shall also advise affected Participants of
pants any reductions in contributions or benefits arising
out of the limitations of this Article IV or of
Article V. At such time each Participant shall be
informed of the amounts in his Employer
Discretionary Contribution Account and Matching
Contribution Account which are vested or, if no
benefits have become vested, the earliest date on
which the benefits can become vested. Such
statement shall include a notice to the Participant
of any benefits which are forfeitable if the
Participant dies before a certain date.
<PAGE>
ARTICLE V
Limitations On Allocations
(See Section 5.5 for special definitions applicable
to this Article V.)
Limits SECTION 5.1
Where (a) If the Participant does not participate in,
No Other and has never participated in another
Plan 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 which provides an
Annual Addition as defined in Section 5.5,
the amount of Annual Additions which may be
allocated under this Plan on a Participant's
behalf for a Limitation Year shall not exceed
the lesser of the Maximum Permissible Amount
or any other limitation contained in this
Plan. If the contributions that would
otherwise be contributed or allocated to a
Participant's accounts 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.
(b) Prior to the determination of the
Participant's actual compensation for a
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.
(c) As soon as is administratively feasible after
the end of the Limitation Year, the Maximum
Permissible Amount for such Limitation Year
shall be determined on the basis of the
Participant's actual compensation for such
Limitation Year.
(d) If, pursuant to subsection (c) or as a result
of the allocation of Forfeitures, there is an
Excess Amount with respect to a Participant
for a Limitation Year, such Excess Amount
shall be disposed of as follows:
(i) If the Participant is covered by the
Plan at the end of the Limitation Year,
the Excess Amount in the Participant's
accounts 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.
(ii) If after the application of paragraph
(i) an Excess Amount still exists, and
the Participant is not covered by the
Plan at the end of the 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.
(iii) If a suspense account is in existence at
any time during the 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 or any Employee
contributions may be made to the Plan
for that Limitation Year. Excess
amounts may not be distributed to
Participants or Former Participants.
Limits Where SECTION 5.2
Other (a) If, in addition to this Plan, the
Master Participant is covered under another
or qualified regional prototype defined
Prototype contribution plan maintained by the
Plan Employer, 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, which
provides an Annual Addition as defined in
Section 5.5 during any Limitation Year, the
amount of Annual Additions which may be
allocated under this Plan on a Participant's
behalf for a Limitation Year, shall not
exceed the Maximum Permissible Amount reduced
by the Annual Additions credited to a
Participant's account under the other plans
and welfare benefit funds for the same
Limitation Year. If the Annual Additions
with respect to the Participant under other
defined contribution plans and welfare
benefit funds 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 defined
contribution plans and welfare benefit funds
in the aggregate are equal to or greater than
the Maximum Permissible Amount, no amount
will be contributed or allocated to the
Participant's account under this Plan for the
Limitation Year.
(b) Prior to the determination of the
Participant's actual compensation for the
Limitation Year, the Employer may determine
the Maximum Permissible Amount for a
Participant in a manner described in
Section 5.1(b).
(c) As soon as is administratively feasible after
the end of the Limitation Year, the Maximum
Permissible Amount shall be determined on the
basis of the Participant's actual
compensation for such Limitation Year.
(d) If pursuant to Section 5.2(c) or as a result
of the allocation of Forfeitures, a
Participant's Annual Additions under this
Plan and all such other plans result in an
Excess Amount, such Excess Amount shall be
deemed to consist of the Annual Additions
last allocated, except that Annual Additions
attributable to a welfare benefit fund or
individual medical account will be deemed to
have been allocated first regardless of the
actual allocation date.
(e) 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
(i) the total Excess Amount allocated as of
such date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under
this Plan, to (2) the total Annual
Additions allocated to the Participant
for the Limitation Year as of such date
under this and all other qualified
master or prototype defined contribution
plans.
(f) Any Excess Amounts attributed to this Plan
shall be disposed of as provided in
Section 5.1(d).
Other SECTION 5.3 If the Participant is covered under
Defined another qualified defined contribution plan
Contri- maintainedby the Employer which is not a regional
bution prototype plan, Annual Additions allocated under
Plan this Plan on behalf of any Participant shall be
limited in accordance with the provisions of
Section 5.2, as though the other plan were a
regional prototype plan unless the Employer provides
other limitations in accordance with the Adoption
Agreement.
Other SECTION 5.4 If the Employer maintains, or at any
Defined time maintained, a qualified defined benefit plan
Benefit covering any Participant in this Plan, the sum of
Plans the Participant's defined benefit plan fraction and
defined contribution plan 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
determined in accordance with the Adoption
Agreement.
Defini- SECTION 5.5 For purposes of this Article V, the
tions following definitions shall apply:
"Annual Additions" - The sum of the following
amounts allocated on behalf of a Participant for a
Limitation Year:
(a) Employer contributions,
(b) Employee contributions (but not including
amounts determined to be excess elective
deferrals under Code Section 402(g) which are
distributed no later than the first April 15
following the close of the Participant's
taxable year),
(c) Forfeitures,
(d) Excess contributions (including amounts
recharacterized),
(e) Excess aggregate contributions, and
(f) 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, are treated as Annual
Additions. Also, 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 416(i) of the Code, under
a welfare benefit fund, as defined in
Section 419(e) of the Code, maintained by the
Employer, are treated as Annual Additions to
a defined contribution plan.
For this purpose, any Excess Amount applied
under Sections 5.1(d) or 5.2(f) in the
Limitation Year to reduce Employer
contributions will be considered Annual
Additions for such Limitation Year.
"Compensation" - A Participant's earned income, if
a self-employed individual, wages, salaries, and
fees for professional services and other amounts
received (without regard to whether or not an amount
is paid in cash) for personal services actually
rendered in the course of employment with the
Employer maintaining the Plan to the extent that the
amounts are includable in gross income (including,
but not limited to, commissions paid to salesmen,
compensation for services on the basis of a
percentage of profits, commissions on insurance
premiums, tips, fringe benefits, reimbursement and
expense allowances, and bonuses), 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 to the extent such contributions
are deductible by the Employee, or any
distributions from a plan of deferred
compensation;
(b) Amounts realized from the exercise of a
non-qualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely 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 described in Section 403(b) of the
Code (whether or not the amounts are actually
excludable from the gross income of the
Employee).
For any self-employed individual, compensation
will mean earned income.
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 includible in
gross income during such year.
Notwithstanding the preceding sentence,
compensation for a Participant in a defined
contribution plan who is permanently and totally
disabled (as defined in Section 22(e)(3) of the
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.
"Defined Benefit Fraction" - 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 for all Limitation Years beginning
before January 1, 1987.
"Defined Contribution Dollar Limitation" - $30,000
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 Years.
"Defined Contribution Fraction" - A fraction, the
numerator of which is the sum of the Annual
Additions to the Participant's accounts under all
the defined contribution plans (whether or not
terminated) maintained by the Employer for the
current and all prior Limitation Years (including
the Annual Additions attributable to the
Participant's nondeductible Employee contributions
to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the
Annual Additions attributable to all welfare benefit
funds, as defined in Section 419(e) of the Code, and
individual medical accounts, as defined in
Section 415(1)(2) of the Code, 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 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 in effect under Section 415(c)(1)(A)
of the Code or 35 percent of the Participant's
Compensation of 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 6, 1986, but
using the Section 415 limitation applicable to the
first Limitation Year beginning on or after
January 1, 1987. The Annual Addition for any
Limitation Year beginning before January 1, 1987
shall not be recomputed to treat all Employee
contributions as Annual Additions.
"Employer" - For purposes of this Article V,
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) as modified by Section 415(h)) or
affiliated service groups (as defined in
Section 414(m)) 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.
"Excess Amount" - The excess of the Participant's
Annual Additions for the Limitation Year over the
Maximum Permissible Amount.
"Highest Average Compensation" - The average
compensation for the three consecutive Years of
Service as an active Participant with the Employer
that produces the highest average. A Year of
Service with the Employer is the 12-consecutive
month period defined in the Adoption Agreement.
"Limitation Year" - A calendar year, or the
12-consecutive month period elected by the Employer
in the Adoption Agreement. All qualified plans
maintained by the Employer must use the same
Limitation Year. 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.
"Maximum Permissible Amount" - The maximum Annual
Addition that may be contributed or allocated to a
Participant's account under the Plan for any
Limitation Year 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
"Projected Annual Benefit" - 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 a
Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the
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.
"Regional Prototype Plan" - A plan the form of
which is the subject of a favorable opinion letter
from the Internal Revenue Service.
<PAGE>
ARTICLE VI
Benefits
Retire- SECTION 6.1 If a Participant's employment with
ment or the Employer is terminated at or after he attains
Disabil- his Normal Retirement Age, or his Early Retirement
ity Age, or if his employment is terminated at an
earlier age because of Disability, he shall be
entitled to receive the entire amount then in each
of his accounts in accordance with Section 6.7.
Death SECTION 6.2 In the event that the termination of
employment of a Participant is caused by his death,
the entire amount then in each of his accounts shall
be paid to his Beneficiary in accordance with
Section 6.7 after receipt by the Committee of
acceptable proof of death.
Termina- SECTION 6.3 If a Participant's employment with
tion for the Employer is terminated for any reason other than
Other retirement, Disability or death, the Participant
Reasons shall be entitled to the sum of:
(a) The entire amounts credited to his Elective
Deferral Account, plus
(b) The entire amounts credited to his Qualified
Non-elective Contribution Account, plus
(c) The entire amounts credited to his Rollover
Account (which consists of rollovers and
transfers), plus
(d) The entire amount credited to his Employee
Contribution Account, plus
(e) An amount equal to the vested portions of his
Employer Discretionary Contribution Account
and Matching Contribution Account.
For purposes of subsection (d) above, the vesting
schedule shall be the schedule set forth in the
Adoption Agreement. 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 pursuant to
Article XII, each Participant shall be vested
according to the pre-amendment or post-amendment
schedule, whichever one may provide him with the
highest percentage of vesting at any particular
point in time.
Any Forfeitures that arise by virtue of the
application of this Section shall be treated in
accordance with the provisions of Section 4.2.
Payment of benefits due under this Section shall
be made in accordance with Section 6.7.
Qualified SECTION 6.4 If the Adoption Agreement indicates
Annui- that the Plan is subject to the Qualified Joint and
ties Survivor Annuity requirements, the provisions of
For this Section shall apply to any Participant who is
Married credited with at least one Hour of Service with the
Parti- Employer on or after August 23, 1984, and to such
cipants other Participants as provided below.
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.
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.
The following definitions apply to this Section:
(a) "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 the account
balance as of the date of separation, the
election period shall begin on the date of
separation.
(b) "Earliest retirement age" means the earliest
date on which, under the Plan, the
Participant could elect to receive retirement
benefits.
(c) "Qualified election" means a waiver of a
Qualified Joint and Survivor Annuity or a
Qualified Pre-retirement Survivor Annuity.
Any waiver of a Qualified Joint and Survivor
Annuity or a Qualified Pre-retirement
Survivor Annuity shall not be effective
unless: (1) the Participant's spouse
consents in writing to the election; (2) 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
Participant's spouse expressly permits
designations by the Participant without any
further spousal consent); (3) the spouse's
consent acknowledges the effect of the
election; and (4) the spouse's consent is
witnessed by a Plan representative or notary
public. Additionally, a Participant's waiver
of the Qualified Joint and Survivor Annuity
shall not be effective unless 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 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 such
spouse. A consent that permits designations
by the Participant without any requirement of
further consent by such 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
below.
(d) "Spouse (surviving spouse)" means the 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.
(e) "Annuity starting date" means the first day
of the first period for which an amount is
paid as an annuity or any other form.
(f) "Vested account balance" means the aggregate
value of the Participant's vested account
balance derived from Employer and Employee
contributions (including rollovers), whether
vested before or upon death, including the
proceeds of insurance contracts, if any, on
the Participant's life. The provisions of
this Section shall apply to a Participant who
is vested in amounts attributable to Employer
contributions, Employee contributions, or
both at the time of death or distribution.
In the case of a Qualified Joint and Survivor
Annuity as described in this Section, the Committee
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 (1) the terms
and conditions of a Qualified Joint and Survivor
Annuity; (2) the Participant's right to make and the
effect of an election to waive the Qualified Joint
and Survivor Annuity form of benefit; (3) the rights
of a Participant's spouse; and (4) the right to
make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor
Annuity.
In the case of a Qualified Pre-retirement Survivor
Annuity, the Committee shall provide each
Participant within the applicable period for such
Participant a written explanation of the Qualified
Pre-retirement Survivor Annuity in such terms and in
such manner as would be comparable to the
explanation provided for meeting the requirements
applicable to a Qualified Joint and Survivor
Annuity.
The applicable period for a Participant is
whichever of the following periods ends last: (1)
the period beginning with the first day of the Plan
Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
(2) a reasonable period ending after the individual
becomes a Participant; (3) a reasonable period
ending after the Plan ceases to fully subsidize the
cost of the Qualified Pre-retirement Survivor
Annuity; (4) a reasonable period ending after this
Section 6.4 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 (2), (3), and (4) 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.
Notwithstanding the other requirements of this
Section 6.4, the respective notices prescribed by
this Section need not be given to a Participant if
(1) the Plan "fully subsidizes" the costs of a
Qualified Joint and Survivor Annuity or Qualified
Pre-retirement Survivor Annuity and (2) the Plan
does not allow the Participant to waive the
Qualified Joint and Survivor Annuity or Qualified
Pre-retirement Survivor Annuity, and does not allow
a married Participant to designate a nonspouse
Beneficiary. For purposes of this Section, the 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.
Special SECTION 6.5 This Section shall apply to a
Rules Participant in a profit sharing plan, and to any
For distribution made on or after the first day of the
Profit first Plan Year beginning after December 31, 1988,
Sharing from or under a separate account attributable solely
Plans 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:
(1) the Participant cannot or does not elect
payments in the form of a life annuity, and (2) on
the death of the Participant, the Participant's
vested account balance will be paid to the
Participant's surviving spouse, but if there is no
surviving spouse, or, if the surviving spouse has
already consented in 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 account
balances 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 shall not be
operative with respect to the Participant in a
profit sharing plan if the Plan is a direct or
indirect transferee of a defined benefit plan, money
purchase pension plan (including a target benefit
plan), stock bonus, or profit sharing plan which is
subject to the survivor annuity requirements of
Sections 401(a)(11) and 417 of the Code. If this
Section is operative, then except to the extent
otherwise provided below, the provisions of Section
6.4 shall be inoperative.
The Participant may waive the spousal death
benefit described in this Section at any time
provided that no such waiver shall be effective
unless it satisfies the conditions that would apply
to the Participant's waiver of the Qualified
Pre-retirement Survivor Annuity.
For the purposes of this Section, vested account
balance shall have the same meaning as provided in
Section 6.4(f).
Transi- SECTION 6.6
tion (a) Any living Participant not receiving
Rules benefits on August 23, 1984, who would
For otherwise not receive the benefits
Quali- prescribed by Section 6.4 of this Plan must
fied be given the opportunity to elect to have
Annui- Section 6.4 apply if such Participant is
ties 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 10
Years of Service when he terminated
employment with the Employer.
(b) 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 as a
Qualified Joint and Survivor Annuity.
(c) The respective opportunities to elect 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 said Participants.
(d) Any Participant who has elected pursuant to
Section 6.6(b) and any Participant who does
not elect under Section 6.6(a) or who meets
the requirements of Section 6.6(a) except
that such Participant does not have at least
10 Years of Service when he or she separates
from service, shall have his or her benefits
distributed in accordance with all of the
following requirements if benefits would have
been payable in the form of a life annuity:
(i) Automatic joint and survivor annuity.
If benefits in the form of a life
annuity become payable to a married
Participant who:
(A) begins to receive payments under
the Plan on or after Normal
Retirement Age; or
(B) dies on or after Normal Retirement
Age while still working for the
Employer; or
(C) begins to receive payments on or
after the qualified early
retirement age; or
(D) 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 paid 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.
(ii) 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 or her
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 (1) the 90th day before the
Participant attains the qualified early
retirement age, or (2) the date on which
participation begins, and ends on the
date the Participant terminates
employment.
(iii) For purposes of this Section qualified
early retirement age is the latest of:
(A) the earliest date, under the Plan,
on which the Participant may elect
to receive retirement benefits,
(B) the first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age, or
(C) the date the Participant begins
participation.
Payment SECTION 6.7 In the event benefits become payable
of Bene- to a Participant or, in the event of his death
fits become payable to his Beneficiary, the Committee
shall pay the benefits in such manner and at such
time as the Participant or Beneficiary directs in
accordance with the terms of this Section and the
Adoption Agreement. Notwithstanding the preceding
sentence, Elective Deferrals, Qualified Non-elective
Contributions, and Income allocable to each are not
distributable to a Participant or his Beneficiary,
in accordance with such Participant's or
Beneficiary's election earlier than upon separation
from service, death, or Disability.
If the value of the Participant's vested account
balances derived from Employer and Employee
contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the account
balance 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 such
account balances. 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 annuity starting date
has the same meaning as provided in Section 6.4(e).
The Committee shall notify the Participant and the
Participant's spouse of the right to defer any
distribution until the Participant's account
balances are no longer immediately distributable.
Such notification shall 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), and shall be provided no less
than 30 days and no more than 90 days prior to the
annuity starting date.
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 account balance is
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 6.4 of the Plan,
only the Participant need consent to the
distribution of an account balance that is
immediately distributable. Neither the consent of
the Participant nor the Participant's spouse shall
be required to the extent that a distribution is
required to satisfy 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), the
Participant's account balances may, with the
Participant's consent, be distributed to the
Participant or transferred to another defined
contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of
the Code) within the same controlled group without
the Participant's consent.
An account balance is immediately distributable if
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.
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 account balance shall not include amounts
attributable to accumulated deductible employee
contributions within the meaning of
Section 72(o)(5)(B) of the Code.
The amount which a Participant, Former Participant
or Beneficiary is entitled to receive at any time
and from time to time shall be paid by the Trustee
at the direction of the Committee. Except as
provided in Section 6.4, payments will be made in
cash in accordance with any one of the following
options as selected by the Employer in the Adoption
Agreement and elected by the Participant:
(a) Lump Sum Payment. Under this option the
entire balance in the Participant's accounts
shall be paid in a single sum.
(b) Periodic Payments. Under this option
periodic payments of substantially equal
amounts will be paid for a specified number
of years not in excess of the number of years
set forth in the Adoption Agreement (or, if
less, the life expectancy of the Participant
or the joint life expectancies of the
Participant and his designated individual
Beneficiary), in which event the unpaid
balance at the end of each Plan Year shall
receive an Income allocation. Such periodic
payments shall be made not less frequently
than annually. If permitted by the Adoption
Agreement, in the event periodic payments are
elected, the Participant may designate
whether he wishes to have the remaining
balance of his account invested in the same
manner as other accounts under the Plan or
invested in savings-type investments.
(c) Life Annuity. Under this option the entire
balance in the Participant's accounts shall
be used to provide payments during his
lifetime with no further payments provided
after his death.
(d) 5 Year Certain Payments. This option
provides for a retirement income payable
monthly during the Participant's life with
the provision that in the event of his death
prior to receiving 60 monthly installments,
the remainder thereof shall be paid to his
Beneficiary.
(e) 10 Year Certain Payments. This option
provides for a retirement income payable
monthly during the Participant's life with
the provision that in the event of his death
prior to receiving 120 monthly installments,
the remainder thereof shall be paid to his
Beneficiary.
(f) 15 Year Certain Payments. This option
provides for a retirement income payable
monthly during the Participant's life with
the provision that in the event of his death
prior to receiving 180 monthly installments,
the remainder thereof shall be paid to his
Beneficiary.
(g) 100% Survivor Annuity. This option provides
for a retirement income payable during the
Participant's life with the provision that
after his death the same level of such income
shall be continued during the life of, and
shall be paid to, his Beneficiary.
(h) 75% Survivor Annuity. This option provides
for a retirement income payable during the
Participant's life with the provision that
after his death an income at 3/4 the rate of
his income shall be continued during the life
of, and shall be paid to, his Beneficiary.
(i) 50% Survivor Annuity. This option provides
for a retirement income payable during the
Participant's life with the provision that
after his death an income at l/2 the rate of
his income shall be continued during the life
of, and shall be paid to, his Beneficiary.
The options described in (c) through (i) above
will only become operative if the Plan is subject to
the requirements of Section 6.4 and do not satisfy
the exception to the Qualified Joint and Survivor
Annuity requirement described in Section 6.5.
Furthermore, the terms of any annuity contract
purchased pursuant to an option described in (c)
through (i) above must comply with the Plan's
requirements and must provide that such annuity
contract is nontransferable when distributed.
Payments shall normally begin by the April 1
following the calendar year during which termination
of employment or death shall have occurred.
Notwithstanding the foregoing, a Participant's
benefits shall commence no later than the April 1 of
the year following the year he reaches age 70 1/2
even if he continues in the employ of the Employer.
In no event shall payments begin later than the 60th
day after the close of the Plan Year in which occurs
the latest of the following: (1) the Participant
attains age 65 or Normal Retirement Age, if earlier;
(2) the tenth anniversary of the year in which the
Participant commenced participation in the Plan;
(3) the termination of the Participant's service
with the Employer; or (4) the date specified in
writing to the Committee by the Participant or his
Beneficiary (but not later than April 1 following
the calendar year in which the Participant turns or
would have turned age 70 1/2). Notwithstanding the
foregoing, the failure of a Participant and spouse
to consent to a distribution while a benefit is
immediately distributable, within the meaning of
this Section 6.7, shall be deemed to be an election
to defer commencement of payment of any benefit
sufficient to satisfy this Section.
Except as otherwise may be required by the
Qualified Joint and Survivor Annuity requirements of
Section 6.4, the requirements of this Section shall
apply to any distribution of a Participant's
interest and will take precedence over any
inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this Section
apply to calendar years beginning after December 31,
1984. All distributions required under this Section
shall be determined and made in accordance with the
Income Tax Regulations under Code Section 401(a)(9),
including the minimum distribution incidental
benefit requirement of Section 1.401(a)(9)-2 of the
regulations.
The entire interest of a Participant must be
distributed or begin to be distributed no later than
the Participant's required beginning date. As of
the first distribution calendar year, distributions,
if not made in a single-sum, may only be made over
one of the following periods (or a combination
thereof):
(a) the life of the Participant,
(b) the life of the Participant and a designated
Beneficiary,
(c) a period certain not extending beyond the
life expectancy of the Participant, or
(d) a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and a designated Beneficiary.
If a Participant's benefit is to be distributed
over (1) 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 (2) a period
not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first distribution calendar
year, must at least equal the quotient obtained by
dividing the Participant's benefit by the applicable
life expectancy.
For calendar years beginning before January 1,
1989, if the Participant's spouse is not the
designated Beneficiary, the method of distribution
selected must assure that at least 50 percent of the
present value of the amount available for
distribution is paid within the life expectancy of
the Participant.
For calendar years beginning after December 31,
1988, the amount to be distributed each year,
beginning with distributions for the first
distribution calendar year shall not be less than
the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not
the designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of
Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant
shall be distributed using the applicable life
expectancy as the relevant divisor without regard to
regulations Section 1.401(a)(9)-2.
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.
If the Participant's benefit is distributed in the
form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Section
401(a)(9) of the Code and the regulations
thereunder.
If the Participant dies after distribution of his
interest has begun, the remaining portion of such
interest will continue to be distributed at least as
rapidly as under the method of distribution being
used prior to the Participant's death.
If the Participant dies before distribution of his
interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of
the calendar year containing the fifth anniversary
of the Participant's death except to the extent that
an election is made to receive distributions in
accordance with (a) or (b):
(a) if any portion of the Participant's interest
is payable to a designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the designated Beneficiary
commencing on or before December 31 of the
calendar year immediately following the
calendar year in which the Participant died;
(b) if the designated 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 (1) December 31 of
the calendar year immediately following the
calendar year in which the Participant died
and (2) 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 Section 6.7 by the time of his or
her death, the Participant's designated Beneficiary
must elect the method of distribution no later than
the earlier of (1) December 31 of the calendar year
in which distributions would be required to begin
under this Section, or (2) December 31 of the
calendar year which contains the fifth anniversary
of the date of death of the Participant. If the
Participant has no designated Beneficiary, or if the
designated Beneficiary does not elect a method of
distribution, distribution of the Participant's
entire interest must be completed by December 31 of
the calendar year containing the fifth anniversary
of the Participant's death. If the surviving spouse
dies after the Participant, but before payments to
such spouse begin, this provision shall be applied
as if the surviving spouse were the Participant.
For purposes of this Section 6.7, 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. Also for
purposes of this Section 6.7, distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, the date
distribution is required to begin to the surviving
spouse). If the distribution in the form of an
annuity irrevocably commences to the Participant
before the required beginning date, the date
distribution is considered to begin is the date
distribution actually commences.
For purposes of this Section, the following
definitions will apply:
"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.
"Designated Beneficiary" means the individual who
is designated as the Beneficiary under the Plan in
accordance with Code Section 401(a)(9) and the
regulations thereunder.
"Distribution calendar year" means a calendar year
for which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first distribution calendar year is the
calendar year immediately preceding the calendar
year which contains the Participant's required
beginning date. For distributions beginning after
the Participant's death, the first distribution
calendar year is the calendar year in which
distributions are required to begin.
"Life expectancy" means life expectancy and joint
and last survivor expectancy 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 by the time distributions are required to
begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to
the Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
"Participant's benefit" means the account balances
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 balances 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. If any portion of the
minimum distribution for the first distribution
calendar year is made in the second distribution
calendar year on or before the required beginning
date, the amount of the minimum distribution made in
the second distribution calendar year shall be
treated as if it had been made in the immediately
preceding distribution calendar year.
"Required beginning date" means the first day of
April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
The required beginning date of a Participant who
attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (a) or (b) below:
(a) Non-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. The
required beginning date of a Participant who
is not a Five Percent Owner who attains age
70 1/2 during 1988 and who has not retired as
of January 1, 1989, is April 1, 1990.
(b) 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:
(i) the calendar year in which the
Participant attains age 70 1/2, or
(ii) the earlier of the calendar year with or
within which ends the Plan Year in which
the Participant becomes a Five Percent
Owner, or the calendar year in which the
Participant retires.
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. 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.
Transi- SECTION 6.8 Notwithstanding the other
tion requirements of this Article and subject to the
Rules joint and survivor annuity requirements of
Section 6.4 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 Trust is one which
would not have disqualified such Trust under
Section 401(a)(9) of the Code as in effect
prior to amendment by the Deficit Reduction
Act of 1984.
(b) The distribution is in accordance with a
method of distribution designated by the
Participant whose interest in the Trust is
being distributed or, if the Participant is
deceased, by a Beneficiary of such
Participant.
(c) Such designation was in writing, was signed
by the Participant or the Beneficiary, and
was made before January 1, 1984.
(d) The Participant has accrued a benefit under
the Plan as of December 31, 1983.
(e) The method of distribution designated by the
Participant 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
Participant's death, the Beneficiaries of the
Participant listed in order of priority.
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 Participant.
For any distribution which commences before
January 1, 1984, but continues after December 31,
1983, the Participant, 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
subsections (a) and (e).
If a designation is revoked, any subsequent
distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked subsequent
to the date distributions are required to begin, the
Trust must distribute by the end of the calendar
year following the calendar year in which the
revocation occurs the total amount not yet
distributed which would have been required to have
been distributed to satisfy Section 401(a)(9) of the
Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such
distributions must meet the minimum distribution
incidental benefit requirements in Section
1.401(a)(9)-2 of the Income Tax Regulations. Any
changes in the designation will be considered to be
a revocation of the designation. However, the mere
substitution or addition of another Beneficiary (one
not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or
addition does not alter the period over which
distributions are to be made under the designation,
directly or indirectly (for example, by altering the
relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan
to another plan, the rules in Q&A J-2 and J-3 of
Section 1.401(a)(9)-2 of the Income Tax Regulations
shall apply.
Rollovers SECTION 6.9 This Section applies to distributions
from Plan made on or after January 1, 1993. Notwithstanding
any provision of the Plan to the contrary that would
otherwise limit a Participant's election under this
Section, a Participant may elect, at the time and in
the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by
the Participant in a direct rollover.
An eligible rollover distribution is any
distribution of all or any portion of the balance to
the credit of the Participant 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 Participant or the joint lives
(or joint life expectancies) of the Participant and
the Participant's designated Beneficiary, or for a
specified period of ten years or more, any
distribution to the extent such distribution is
required under section 401(a)(9) of the code: and
the portion of any distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
An eligible retirement plan is an individual
retirement account described in section 408(a) of
the code, an individual retirement annuity described
in section 408(b) of the code, an annuity plan
described in section 403(a) of the code, or a
qualified trust described in section 401(a) of the
code, that accepts the Participant'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.
A Participant 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
Participants with regard to the interest of the
spouse or former spouse. A direct rollover is a
payment by the Plan to the eligible retirement plan
specified by the Participant.
Break in SECTION 6.10 In the case of a Participant who
Service has five or more consecutive one year Breaks in
Rules Service all service after such Breaks in Service
will be disregarded for the purpose of vesting the
Employer-derived account balances that accrued
before such Breaks in Service. Such Participant's
pre-Break service will count in vesting the
post-Break Employer-derived account balance only if
either:
(a) such Participant has any nonforfeitable
interest in the account balance attributable
to Employer contributions at the time of
separation from service; or
(b) 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
Employer-derived account balance. Both accounts
will share in the earnings and losses of the Trust.
If an Employee terminates service, and the value
of the Employee's vested account balance derived
from Employer and Employee contributions is not
greater than $3,500, the Employee will receive a
distribution of the value of the entire vested
portion of such account balance and the nonvested
portion will be treated as a Forfeiture. For
purposes of this Section, if the value of an
Employee's vested account balance is zero, the
Employee shall be deemed to have received a
distribution of such vested account balance. A
Participant's vested account balance shall not
include accumulated deductible Employee
contributions within the meaning of
section 72(o)(5)(B) of the Code for Plan Years
beginning prior to January 1, 1989.
If an Employee terminates service and elects in
accordance with the requirements of Section 6.7, to
receive the value of the Employee's vested account
balance, 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 an Employee receives a distribution pursuant to
this Section and the Employee resumes employment
covered under this Plan, the Employee's
Employer-derived account balance will be restored to
the amount on the date of distribution if the
Employee 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
re-employed by the Employer, or the date the
Participant incurs five consecutive one-year Breaks
in Service following the date of the distribution.
If an Employee is deemed to receive a distribution
pursuant to this Section, and the Employee resumes
employment covered under this Plan before the date
the Participant incurs five consecutive one-year
Breaks in Service, upon the reemployment of such
Employee, the Employer-derived account balance of
the Employee will be restored to the amount on the
date of such deemed distribution.
Hardship SECTION 6.11
With-
drawals (a) Elective Deferrals Distribution of Elective
Deferrals (and earnings thereon accrued as of
December 31, 1988) may be made to a Participant in
the event of hardship. For the purposes of this
Section, hardship is defined as an immediate and
heavy financial need of the Participant where such
Participant lacks other available resources.
Hardship distributions are not subject to the
spousal consent requirements contained in Sections
401(a)(11) and 417 of the Code unless the Plan is
subject to such requirements.
The following are the only financial needs
considered immediate and heavy: deductible medical
expenses (within the meaning of Section 213(d) of
the Code) of the Participant, the Participant's
spouse, children, or dependents; the purchase
(excluding mortgage payments) of a principal
residence for the Participant; payment of tuition
and related educational fees for the next twelve
months of post-secondary education for the
Participant, the Participant's spouse, children or
dependents; or the need to prevent the eviction of
the Participant from, or a foreclosure on the
mortgage of, the Participant's principal residence.
A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the
Participant only if:
(i) The Participant has obtained all
distributions, other than hardship
distributions, and all nontaxable loans under
all plans maintained by the Employer;
(ii) All plans maintained by the Employer
provide that the Participant's Elective
Deferrals will be suspended for twelve
months after the receipt of the hardship
distribution;
(iii) The distribution is not in excess of the
amount of an immediate and heavy
financial need plus amounts necessary to
pay federal, state or local income taxes
or penalties reasonably anticipated to
result from the withdrawal; and
(iv) All plans maintained by the Employer
provide that the Participant may not
make Elective Deferrals for the
Participant's taxable year immediately
following the taxable year of the
hardship distribution in excess of the
applicable limit under Section 402(g) of
the Code for such taxable year less the
amount of such Participant's Elective
Deferrals for the taxable year of the
hardship distribution.
(b) Other Withdrawals. If so elected in the
Adoption Agreement, the Employer's matching
contributions and/or discretionary contributions,
and the earnings thereon, that have been allocated
to an Employee's account for two or more years may
be withdrawn for reasons of financial emergency
under such rules as may be established by the
Administrative Committee. Such rules shall be
uniformly applied with respect to all Employees who
request such in-service withdrawals. The Employer's
contributions and the earnings thereon that have not
been allocated to an Employee's accounts for at
least two years may be withdrawn only for financial
hardship in accordance with the rules for
withdrawing Elective Deferrals on account of
hardship described in subsection (a) above.
Loans to SECTION 6.12 If the Adoption Agreement permits
Parti- loans, the Trustee shall, when directed by the
cipants Committee, lend Trust Fund assets to a Participant
or Beneficiary on the following terms:
(a) An application for a loan by a Participant or
Beneficiary shall be made in writing to the
Committee, which has full responsibility for
administering the loan program, including the
authority to fully review each application
for a loan and the sole discretion to approve
or deny such applications on the basis of the
criteria set forth in this Section.
(b) Loans shall be made available to all
Participants and Beneficiaries on a
reasonably equivalent basis. Loans to
Beneficiaries shall be made only to the
extent a Beneficiary has a separate account
under the Plan that is derived from the
Participant (e.g., following the
Participant's death).
(c) Loans shall not be made available to Highly
Compensated Employees (as defined in Section
414(q) of the Code) in an amount greater than
the amount made available to other
Participants.
(d) Loans must be adequately secured and bear a
rate of interest commensurate with the rates
charged by persons in the business of lending
money for loans which would be made under
similar circumstances. Interest rates
granted at different times and to
Participants in differing circumstances may
vary depending on such differences.
Collateral for each loan will be the
borrower's entire right, title and interest
in and to the Trust Fund, supported by the
borrower's collateral promissory note,
including interest, payable to the order of
the Trustee.
(e) In the event of default, foreclosure on the
note and attachment of security will not
occur until a distributable event occurs in
the Plan.
(f) Loans may be restricted in number or have
minimum dollar requirements as may be
specified in the Adoption Agreement.
(g) If the Plan is subject to the joint and
survivor rules of Code sections 401(a)(11)
and 417, a Participant must obtain the
consent of his spouse, if any, to use 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.
(h) If a valid spousal consent has been obtained
in accordance with (g), 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 balances payable at the time of death
or distribution, but only if the reduction is
used as repayment of the loan. If less than
100 percent of the Participant's vested
account balance (determined without regard to
the preceding sentence) is payable to the
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.
(i) 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 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 account balance of the
Participant or Beneficiary. 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), 414(c), 414(m) and 414(o) of the Code
are to be aggregated.
(j) Any loan will by its terms require repayment
(principal and interest) to be amortized in
level payments, 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.
(k) A loan shall be treated as a directed
investment by the borrower with respect to
his account with the interest paid on the
loan being credited to the account and the
amount outstanding on the loan not otherwise
sharing in the income of the Trust.
(l) An assignment or pledge of any portion of the
Participant's interest in the Plan and a
loan, pledge or assignment with respect to
any insurance contract purchased under the
Plan, will be treated as a loan under this
paragraph.
(m) 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
considering 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.
Designa- SECTION 6.13 If a Participant is married
of Bene- his Beneficiary shall be his spouse who
ficiary shall be entitled to his remaining account balance
upon the Participant's death. Upon the written
election of the Participant, with his spouse's
written consent, a Participant may designate another
Beneficiary. This election and consent must either
be notarized or be witnessed by a Plan
representative and returned to the Committee. If
such election has been made or if the Participant is
not married, the Participant may from time to time
designate any person or persons (who may be
designated contingently or successively and who may
be an entity other than a natural person) as his
Beneficiary to whom his Plan
benefits shall be paid if he dies before receipt of
all such benefits. Each Beneficiary designation
shall be on a form prescribed by the Committee and
will be effective only when filed with the Committee
during the Participant's lifetime. Each Beneficiary
designation filed with the Committee will cancel all
Beneficiary designations previously filed with the
Committee. The revocation of a Beneficiary
designation other than the spouse, no matter how
effected, shall not require the consent of any
designated Beneficiary.
If any unmarried Participant fails to designate a
Beneficiary in the manner provided above, or if the
Beneficiary predeceases the Participant or dies
before complete distribution of the Participant's
benefits, the Committee, in its discretion, may
direct the Trustee to distribute such Participant's
benefits (or the balance thereof) to either:
(a) Any one or more or all of the next of kin
(including the surviving spouse) of such
Participant in such proportions as the
Committee determines; or
(b) The estate of the last to die of such
Participant and his Beneficiary or
Beneficiaries.
QDRO's SECTION 6.14 Benefits shall be payable under this
Plan to an alternate payee pursuant to the terms of
any qualified domestic relations order. The
Committee has the responsibility for determining if
a domestic relations order is qualified and whether
its payment terms are consistent with the terms of
the Plan. If appropriate, the amounts subject to a
QDRO may be segregated from the Participant's
accounts and placed in a separate account for the
benefit of the alternate payee who shall thereupon
be treated for Plan purposes as a Participant.
Benefits SECTION 6.15 If this Plan is integrated
Affected with Social Security pursuant to the Adoption
by Sub- Agreement, any benefits which are being paid
sequent to a Participant, Former Participant, Beneficiary
Social or Contingent Annuitant under this Plan and the
Security vested benefit of a Participant or Former
Changes Participant who has separated from the service of
the Employer shall not be decreased by reason of any
post-separation increase in the benefit levels or
the wage base under Title II of the Social Security
Act effective after the later of September 2, 1974,
or the date of first receipt of any benefit provided
by this Plan. In the case of a Participant who
separates from the service of the Employer with a
vested benefit and who returns to employment and
participation in the Plan, his vested benefit shall
not be decreased by reason of any post-separation
increase in Social Security benefit levels or the
wage base effective after September 2, 1974, and
during separation from service which would decrease
the benefits to which he would have been entitled
had he not returned to service after his separation.
<PAGE>
ARTICLE VII
Trust Fund
Exclu-
sive SECTION 7.l All contributions under
Benefit this Plan shall be paid to the Trustee and
of deposited in the Trust Fund. All assets of the
Partici- Trust Fund, including investment income, shall be
pants retained for the exclusive benefit of Participants,
Former Participants and Beneficiaries and shall be
used to pay benefits to such persons or to pay
administrative expenses of the Plan and Trust Fund
to the extent not paid by the Employer and shall not
revert to or inure to the benefit of the Employer.
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 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 tax return for the taxable
year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe.
All Employer contributions to this Plan are made
contingent upon their deductibility under the Code.
Any contribution which is disallowed as a deduction
shall, upon the request of the Committee, be
returned to the Employer (to the extent disallowed)
within one year of the disallowance of the
deduction.
Insurance SECTION 7.2 In the event the Committee
Con- authorizes the purchase of life insurance as
tracts an investment under this Plan, the Trustee shall,
upon the Committee's direction, apply up to 24.9
percent of the contributions by or on behalf of a
Participant each Year to the purchase of or the
payment of premiums on term life insurance contracts
on the life of such Participant. If ordinary life
insurance is purchased, up to 49.9 percent of the
contributions may be used to pay the premiums on
such policies. Each such contract shall be
purchased, effective on the first day of each Plan
Year, from any legal reserve life insurance company
designated by the Trustee which is authorized to do
business in the state in which the Employer's
principal place of business is located.
If, pursuant to the rules of the designated
company, no contract can be purchased, or if the
Participant elects not to have any insurance
purchased on his behalf, the amounts that would
otherwise have been used for premium payments shall
be invested by the Trustee in accordance with the
Trust Agreement. If a Participant does not qualify
for insurance at standard rates, the Trustee, if the
Committee so directs, may purchase a contract for a
reduced face amount. Coverage shall also be reduced
by converting a portion of the life insurance to
paid-up insurance, if in any Plan Year the
Participant's contribution is such that a premium
payment in such Plan Year would exceed the
percentage limitation.
All contracts purchased pursuant to this Section
shall be allocated to the account of the insured
Participant from which the premium payments are
being made. The Trustee shall for all purposes be
the complete and absolute owner of all such
contracts and shall possess all incidents of
ownership, including the right to designate the
Beneficiary and to exercise all other rights under
the contracts. The Trustee shall not exercise any
loan rights under a contract except for the benefit
of a Participant insured by such contract.
(a) Ordinary Life - For purposes of these
incidental insurance provisions, ordinary life
insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing
premiums. If such contracts are purchased, less
than 1/2 of the aggregate Employer contributions
allocated to any Participant will be used to pay the
premiums attributable to them.
(b) Term and Universal Life - No more than 1/4 of
the aggregate Employer contributions allocated to
any Participant will be used to pay the premiums on
term life insurance contracts, universal life
insurance contracts, and all other life insurance
contracts which are not ordinary life.
(c) Combination - The sum of 1/2 of the ordinary
life insurance premiums and all other life insurance
premiums will not exceed 1/4 of the aggregate
Employer contributions allocated to any Participant.
Subject to Article 6.4, the contracts on a
Participant's life will be converted to cash or an
annuity or distributed to the Participant upon
commencement of benefits.
The Trustee shall apply for and will be the owner
of any insurance contract purchased under the terms
of this Plan. The insurance contract(s) must
provide that proceeds will be payable to the
Trustee, however the Trustee shall be required to
pay over all proceeds of the contract(s) 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 in
accordance with Section 6.4. Under no circumstances
shall the Trust 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.
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.
Each Employee will have a ratable interest in all
assets of the Trust.
Invest- SECTION 7.3 All amounts allocated to
ment of a Participant's accounts that are not used to
Partici- purchase life insurance may be subject to
pant the investment direction of the Participant
Accounts as provided in this Section and the Adoption
Agreement. For this purpose, the Trustee shall
establish any equity, fixed income or other
investment funds requested by the Committee.
All Participant investment directions shall be
made to the Committee at such time and under such
terms and conditions as the Committee, after
consultation with the Trustee, may prescribe,
provided that all such rules shall be uniformly
applicable to all Participants.
<PAGE>
ARTICLE VIII
Administrative Committee
and Other Fiduciaries
Appoint- SECTION 8.1 The Board shall appoint an
ment of Administrative Committee to administer the Plan.
Commit- Any person, including an officer or other employee
tee of the Employer, is eligible for appointment as a
member of the Committee. Such members shall serve
at the pleasure of the Board. Any member may resign
by delivering his written resignation to the Board.
Vacancies in the Committee arising by resignation,
death, removal or otherwise, shall be filled by the
Board.
Named SECTION 8.2 The Committee shall be the Named
Fiduci- Fiduciary and Plan Administrator as these terms
ary and are used in the Employee Retirement Income Security
Plan Act of 1974. The Committee shall appoint a
Adminis- Secretary, who need not be a member of the
trator Committee, who shall be the agent for the service of
legal process.
Powers SECTION 8.3 The Committee shall administer the
and Plan in accordance with its terms and shall have
Duties all powers necessary to carry out the provisions of
of the Plan, except such powers as are specifically
Com- reserved to the Board or some other person. The
mittee Committee's powers include the power to make and
publish such rules and regulations as it may deem
necessary to carry out the provisions of the Plan.
The Committee shall interpret the Plan and shall
determine all questions arising in the
administration, interpretation, and application of
the Plan. Any such determination by the Committee
shall be conclusive and binding on all persons.
The Committee shall notify the Trustee of the
liquidity and other requirements of the Plan from
time to time.
Operation SECTION 8.4 The Committee shall act by a majority
of Com- of its members at the time in office, and such
mittee action may be taken either by a vote at a meeting
or without a meeting. Any action taken without a
meeting shall be reflected in a written instrument
signed by a majority of the members of the
Committee. A member of the Committee who is also a
Participant shall not vote on any question relating
specifically to himself. Any such question shall be
decided by the majority of the remaining members of
the Committee. The Committee may authorize any one
or more of its members to execute any document or
documents on behalf of the Committee, in which event
the Committee shall notify the Trustee in writing of
such action and the name or names of its member or
members so designated. The Trustee thereafter shall
accept and rely upon any document executed by such
member or members as representing action by the
Committee until the Committee shall file with the
Trustee a written revocation of such designation.
The Committee may adopt such by-laws or regulations
as it deems desirable for the conduct of its
affairs. The Committee shall keep a record of all
its proceedings and acts and shall keep all such
books of account, records, and other data as may be
necessary for the proper administration of the Plan.
Power to SECTION 8.5 The Committee and/or Trustee may
Appoint appoint such actuaries, accountants, attorneys and
Advisers and other persons as it deems necessary or desirable
in connection with the administration of this Plan
and Trust. Such persons may, but need not, be
performing services for the Employer and/or Trustee.
The Committee and/or Trustee shall be entitled to
rely upon any opinions or reports which shall be
furnished to it by any such actuary, accountant,
attorney or other specialist.
Expenses SECTION 8.6 The members of the Committee shall
of Com- serve without compensation for services as such, but
mittee their reasonable expenses shall be paid by the
Employer. All other reasonable expenses of the
Committee in administering the Plan shall be paid by
the Employer, including, but not limited to, fees of
actuaries, accountants, attorneys, and other
specialists.
Duties of SECTION 8.7 All fiduciaries under the Plan and
Fidu- Trust shall act solely in the interests of the
ciaries Participants and their Beneficiaries and in
accordance with the terms and provisions of the Plan
and Trust insofar as such documents are consistent
with ERISA, and with the care, skill, prudence, and
diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct
of an enterprise of like character and with like
aims. Any person may serve in more than one
fiduciary capacity with respect to the Plan and
Trust.
Liabil- SECTION 8.8 Neither the Trustee nor any member of
ity of the Committee shall incur any liability for any
Members action or failure to act, excepting only liability
for his own breach of fiduciary duty. To the extent
not covered by insurance, the Employer shall
indemnify each member of the Committee and any
employee acting on its behalf against any and all
claims, loss, damages, expense, and liability
arising from any action or failure to act.
Alloca- SECTION 8.9 The Board, Committee, Investment
tion of Manager and Trustee possess certain specified
Respon- powers, duties, responsibilities and obligations
sibility under the Plan and Trust. It is intended under this
Plan and Trust that each be responsible solely for
the proper exercise of its own functions and that
each shall not be responsible for any act or failure
to act of another, unless otherwise responsible as a
breach of its own fiduciary duty. Generally, the
Board shall be responsible for appointing the
Committee, the Investment Manager and the Trustee
and for their removal, and for amending and
terminating the Adoption Agreement and Trust. The
Committee is responsible for administering the Plan
as described herein; and the Trustee or the
Investment Manager, as the case may be, is
responsible for the management and control of the
Trust Fund as specifically provided in the Trust
Agreement. The Sponsor is responsible for amending
or terminating this Prototype Plan and its
associated Trust Agreement. The Board and Committee
may designate persons, including committees, other
than named fiduciaries to carry out fiduciary
responsibilities (other than trustee
responsibilities as defined in Section 405(c)(3) of
ERISA) under the Plan.
Claims SECTION 8.10 The Committee shall maintain a
Review procedure under which any Participant or Beneficiary
Proce- may assert a claim for benefits under the Plan. Any
dure such claim shall be submitted in writing to the
Committee within such reasonable period as the rules
of the Committee may provide. The Committee shall
take action on the claim within 60 days following
its receipt and if it is denied shall at such time
give the claimant written notice which clearly sets
forth the specific reason or reasons for such
denial, the specific Plan provision or provisions on
which the denial is based, any additional
information necessary for the claimant to perfect
the claim, if possible, an explanation of why such
additional information is needed, and an explanation
of the Plan's claims review procedure. The review
procedure shall allow a claimant at least 60 days
after receipt of the written notice of denial to
request a review of such denied claim, and the
Committee shall make its decision based on such
review within 60 days (120 days if special
circumstances require more time) of its receipt of
the request for review. The decision on review
shall be in writing and shall clearly describe the
reasons for the Committee's decision.
<PAGE>
ARTICLE IX
Amendments
The Employer through its Board reserves the right to
make from time to time any amendment to its Adoption Agreement
which does not cause any part of the Trust Fund to be used for,
or diverted to, any purpose other than the exclusive benefit of
Participants, Former Participants or their Beneficiaries,
provided, however, that the Board may make any amendment it
determines necessary or desirable, with or without retroactive
effect, to comply with applicable laws. 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 that amends the Plan for any other reason will no
longer participate in this Plan and will be considered to have an
individually designed plan. The Sponsor may amend any part of
the Plan. Such amendments shall be effective when communicated
to the Trustee or Employer as the case may be, except that the
Sponsor possesses the sole authority to make such amendments
which it deems necessary to enable the Plan and Trust to meet the
requirements of applicable laws and regulations.
No amendment to the Plan shall decrease a
Participant's account balance or eliminate an optional form of
distribution. Furthermore, no amendment to the Plan shall have
the effect of decreasing a Participant's vested interest
determined without regard to such amendment as of or after the
date such amendment is adopted or the date it becomes effective.
<PAGE>
ARTICLE X
Successor Employer and Merger or
Consolidation of Plans
Successor SECTION 10.1 In the event of the dissolution,
Employer merger, consolidation or reorganization of the
Employer, provision may be made by which the Plan
and Trust will be continued by the successor; and,
in that event, such successor shall be substituted
for the Employer under the Plan. The substitution
of the successor shall constitute an assumption of
Plan liabilities by the successor and the successor
shall have all of the powers, duties and
responsibilities of the Employer under the Plan.
Plan SECTION 10.2 In the event of any merger or
Assets consolidation of the Plan with, or transfer in
wholeor in part of the assets or liabilities of the
Trust Fund after September 2, 1974, to another trust
fund held under any other plan of deferred
compensation maintained or to be established for the
benefit of all or some of the Participants of this
Plan, the assets of the Trust Fund applicable to
such Participants shall be transferred to the other
trust fund only if:
(a) each Participant will receive a benefit
immediately after the merger, consolidation
or transfer (if the Plan then terminated)
which is at least equal to the benefit the
Participant was entitled to immediately
before such merger, consolidation or transfer
(if this Plan had terminated);
(b) resolutions of the Boards of Directors of the
Employer under this Plan, or of any new or
successor employer of the affected
Participants, shall authorize such transfer
of assets; and, in the case of the new or
successor employer of the affected
Participants, its resolutions shall include
an assumption of liabilities with respect to
such Participants' inclusion in the new
employer's plan; and
(c) such other plan and trust are qualified under
Sections 401(a) and 501(a) of the Code.<PAGE>
ARTICLE XI
Plan Termination
Right to SECTION 11.1 In accordance with the procedures
Termi- set forth in this Article, and consistent with the
nate provisions of Title IV of ERISA, the Board may
terminate the Plan or its participation in this
prototype Plan at any time. In the event of
dissolution, merger, consolidation or reorganization
of the Employer, the Plan shall terminate and the
Trust Fund shall be liquidated unless the Plan is
continued by a successor to the Employer in
accordance with Section 10.1.
Partial SECTION 11.2 Upon termination of the Plan with
Termina- respect to a group of Participants which constitutes
tion a partial termination of the Plan, the Trustee
shall, in accordance with the directions of the
Committee, allocate and segregate for the benefit of
the Participants or Former Participants with respect
to which the Plan is being terminated the
proportionate interest of such persons in the Trust
Fund. The funds so allocated and segregated shall
be used by the Trustee to pay benefits in accordance
with Section 11.4.
Discontin- SECTION 11.3 In the event of a complete
uance of discontinuance of contributions under the Plan,
Employer the account balances of each affected Participant
Contri- will be nonforfeitable.
butions
Liquida- SECTION 11.4 Upon a complete or partial
tion of termination of the Plan or discontinuance of
the Employer contributions, the accounts of all
Trust Participants affected thereby shall become fully
Fund vested, and the Committee shall direct the Trustee
to distribute the assets remaining in the Trust
Fund, after payment of any expenses properly
chargeable thereto, to Participants, Former
Participants and Beneficiaries in proportion to
their respective account balances. Such
distributions shall be made in accordance with the
modes of distribution provided in Article VI.
Manner of SECTION 11.5 To the extent that no discrimination
Distri- in value results, any distribution after termination
bution of the Plan may be made, in whole or in part, in
cash, in securities, or other assets in kind, as the
Committee, pursuant to the provisions of
Section 6.7, may determine. All non-cash
distributions shall be valued at fair market value
at the date of distribution.
<PAGE>
ARTICLE XII
Top-Heavy Provisions
Rules to SECTION l2.1 Notwithstanding any other
Apply if relevant provision of this Plan to the
Plan contrary, the following rules will apply for
Top- any Plan Year that the Plan becomes "top-heavy"
Heavy (as defined in Section 12.2):
(a) Vesting. For any Plan Year in which this
Plan is top-heavy, one of the minimum vesting
schedules as elected by the Employer in the
Adoption Agreement will automatically apply
to the Plan. In the event the Plan is no
longer top-heavy, this vesting schedule will
continue to apply to the Plan and will not
convert to a different vesting schedule. 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 and benefits
accrued before the Plan became top-heavy.
However, this Section does not apply to the
account balances of any Employee who does not
have an Hour of Service after the Plan has
initially become top-heavy and such
Employee's account balance attributable to
Employer contributions and Forfeitures will
be determined without regard to this Section.
(b) Minimum Contributions. 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 first
$200,000 of the key employee's Compensation,
allocated on behalf of any key employee for
that Year. The minimum allocation is
determined without regard to any Social
Security contribution, and, beginning
January 1, 1989, without regard to Elective
Deferrals or Matching Contributions that may
be made to the Plan on behalf of a
Participant. 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 failure to
make mandatory Employee contributions to the
Plan, or (3) compensation less than a stated
amount.
For purposes of computing the minimum
allocation, Compensation shall mean
Compensation as defined in Section 1.12 of
the Plan.
The minimum contribution shall not be
made 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 the Adoption Agreement that the
minimum allocation or benefit requirement
applicable to top-heavy plans will be met in
the other plan or plans.
The minimal contribution shall not be
made to any Participant who was not employed
on the last day of the Plan Year.
The minimum allocation required (to the
extent required to be nonforfeitable under
Section 416(b)) may not be forfeited under
Section 411(a)(3)(B) or 411(a)(3)(D).
(c) Limitation on Benefits. In applying the
dollar limitations under Section 4l5(e) of
the Code, the l.25 limitation shall be
supplanted by a l.0 limitation.
(d) Maximum Compensation. The maximum annual
compensation of each Employee that may be
taken into account under the Plan shall not
exceed $200,000 (or such larger amount based
on cost of living adjustments as may be
permitted under the Code).
Defini- SECTION 12.2 For purposes of this Section,
tions the following definitions will apply:
(a) "Key employee" means any Employee or former
Employee (and the Beneficiaries of such
Employee) who at any time during the
determination period was 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, 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, a Five Percent
Owner, or a one-percent owner of the Employer
who has an annual compensation of more than
$150,000. 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
excludable from the Employee's gross income
under Section 125, Section 402(a)(8), Section
402(h) 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 shall be made in
accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
(b) "Top-heavy plan". For any Plan Year beginning
after December 31, 1983, this Plan is
top-heavy if any of the following conditions
exists:
(i) If 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.
(ii) If 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.
(iii) If 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.
(c) Top-heavy ratio:
(i) If the Employer maintains one or more
defined contribution plans (including
any Simplified Employee Pension Plan)
and the Employer has not maintained any
defined benefit plan which during the
5-year period ending on the
determination date(s) has or has had
accrued benefits, the top-heavy ratio
for this Plan alone or for the required
or permissive aggregation group as
appropriate is a fraction, the numerator
of which is the sum of the account
balances of all key employees as of the
determination date(s) (including any
part of any account balance distributed
in the 5-year period ending on the
determination date(s)), and the
denominator of which is the sum of all
account balances (including any part of
any account balance distributed in the
5-year period ending on the
determination date(s)), both computed in
accordance with Section 416 of the Code
and the regulations thereunder. Both
the numerator and denominator of the
top-heavy ratio are increased to reflect
any contribution not actually made as of
the determination date, but which is
required to be taken into account on
that date under Section 416 of the Code
and the regulations thereunder.
(ii) If the Employer maintains one or more
defined contribution plans (including
any Simplified Employee Pension Plan)
and the Employer maintains or has
maintained one or more defined benefit
plans which during the 5-year period
ending on the determination date(s) has
or has had any accrued benefits, the
top-heavy ratio for any required or
permissive aggregation group as
appropriate is a fraction, the numerator
of which is the sum of account balances
under the aggregated defined
contribution plan or plans for all key
employees, determined in accordance with
(i) 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 (i) 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 5-year
period ending on the determination date.
(iii) For purposes of (i) and (ii) above 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 thereunder for the first and
second plan years of a defined benefit
plan. The account balances and accrued
benefits of a Participant (1) who is not
a key employee but who was a key
employee in a prior year, or (2) who has
not been credited with at least one Hour
of Service with any employer maintaining
the Plan at any time during the 5-year
period ending on the determination date
will be disregarded. The 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 (1) the
method, if any, that uniformly applies
for accrual purposes under all defined
benefit plans maintained by the
Employer, or (2) 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) "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.
(e) "Required aggregation group" means (1) 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 (2) any other
qualified plan of the Employer which enables
a plan described in (i) to meet the
requirements of Sections 401(a)(4) or 410 of
the Code.
(f) "Determination date" means, for any Plan Year
subsequent to the first Plan Year, the last
day of the preceding Plan Year. For the
first Plan Year of the Plan, the
determination date is the last day of that Year.
(g) "Valuation date" means the Valuation Date
defined in Section 1.59.
(h) "Present Value" means the present value based
only on the interest and mortality rates
specified in the Adoption Agreement.
Relation- SECTION 12.3 If the Plan's top-heavy status
ship of changes and this change alters the Plan's normal
the Normal vesting schedule, no Participant's vested accrued
and the benefit immediately prior to such change in status
Top-Heavy shall be diminished on account of the change in the
Vesting vesting schedule. In addition, the vesting for each
Schedules Participant in the Plan at the time of the change
in status shall be determined under whichever
schedule provides the greatest vested benefit at
any particular point in time.
Partici- SECTION 12.4 A non-key employee who
pation participates in both this Plan and another
in Other top-heavy plan maintained by the Employer shall
Plans not be entitled to receive minimum benefits and/or
minimum contributions under all such plans. If the
other plan is a defined contribution plan, the
minimum contribution required shall be satisfied if
the total contributions to both plans satisfy the
minimum contribution requirement. If the other plan
is a defined benefit plan, the minimum shall be
satisfied in either the defined benefit plan or in
this Plan as specified in the Adoption Agreement.<PAGE>
ARTICLE XIII
Miscellaneous
Nonguar- SECTION 13.1 Nothing contained in this Plan shall
antee of be construed as a contract of employment between the
Employ- Employer and any Employee, or as a right of any
ment Employee to be continued in the employment of the
Employer, or as a limitation on the right of the
Employer to discharge any of its Employees, with or
without cause.
Rights to SECTION 13.2 No Participant, Former Participant
Trust or Beneficiary shall have any right to, or interest
Assets in, any assets of the Trust Fund upon termination of
employment or otherwise, except as provided from
time to time under this Plan, and then only to the
extent of the benefits payable under the Plan to
such Participant, Former Participant or Beneficiary
out of the assets of the Trust Fund. All payments
of benefits provided for in this Plan shall be made
solely out of the assets of the Trust Fund.
Nonalien- SECTION 13.3 No benefit or interest available
ation of hereunder will be subject to assignment or
Benefits 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, or any domestic relations order entered before
January 1, 1985.
Governing SECTION 13.4 To the extent not pre-empted by
Law federal law, this Plan and the associated Adoption
Agreement shall be interpreted and enforced in
accordance with the laws of the State of New York.
Qualified SECTION 13.5 The use of this prototype Plan
Plans and its associated Trust shall be available only to
Only the plans of Employers which meet the requirements
of the Code, as amended, as well as other rules
governing qualified plans, and 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.
ROC09:104585
[Home Properties of New York, Inc. Letterhead]
September 23, 1996
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
RE: Home Properties of New York, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
I am Vice President, Secretary and General Counsel of Home Properties of New
York, Inc. (the "Company") and have acted on behalf of the Company in
connection with its Registration Statement on Form S-8 to register under the
Securities Act of 1933, as amended, an aggregate of 50,000 shares of Common
Stock of the Company (the "Shares") to be issued in connection with the
Company's Retirement Savings Plan, as amended (the "Plan").
I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary or appropriate in connection
with rendering this opinion.
Based on the foregoing, I am of the opinion that the Shares described in the
above-referenced Registration Statement have been duly authorized by the
Company for issuance in connection with the Plan and will, when issued in
connection with the Plan, be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the above-
mentioned Registration Statement on Form S-8 and any reference to me
contained therein.
Very truly yours,
/s/ Ann M. McCormick
Ann M. McCormick
Vice President, Secretary
and General Counsel
Consent of Independent Accounts
We consent to the incorporation by reference in the Registration Statement on
Form S-8 to be filed by Home Properties of New York, Inc. with respect to the
Home Properties Retirement Savings Plan of our report dated February 1, 1996,
on our audits of the consolidated financial statements of Home Properties of
New York, Inc. as of December 31, 1995 and 1994, for the year ended December
31, 1995 and the period from August 4, 1994 through December 31, 1994, and the
combined financial statements of the Original Properties for the period from
January 1, 1994 through August 3, 1994, and the year ended December 31, 1993,
which report is included in the Annual Report on Form 10-K/A Amendment No.1.
/s/ Coopers & Lybrand L.L.P.
Rochester, New York
September 23, 1996
