REGISTRATION NO. 33-80677
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 2, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WATERS CORPORATION
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-3234558
- ------------------------ -------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
34 MAPLE STREET
MILFORD, MASSACHUSETTS 01757-3696
----------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
WATERS EMPLOYEE INVESTMENT PLAN
(FORMERLY WATERS TECHNOLOGIES EMPLOYEE INVESTMENT PLAN)
-------------------------------------------------------
(FULL TITLE OF THE PLAN)
PHILIP S. TAYMOR
WATERS CORPORATION
34 MAPLE STREET
MILFORD, MASSACHUSETTS 01757-3696
508-478-2000
---------------------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
BRUCE B. BARTH, ESQ.
ROBINSON & COLE LLP
280 TRUMBULL STREET
HARTFORD, CONNECTICUT 06103-3597
TELEPHONE: 860-275-8200
<PAGE>
DESCRIPTION OF EXHIBITS
-----------------------
EXHIBIT NO. DESCRIPTION OF EXHIBITS
----------- -----------------------
4.1 Waters Employee Investment Plan, as amended effective August
19, 1994 (1)
4.1 Waters Employee Investment Plan, as amended (formerly the
Waters Technologies Employee Investment Plan) effective
October 1, 1996 (2)
5.2 Undertaking of Registrant (1)
23.1 Consent of Coopers & Lybrand L.L.P. (1)
23.2 Consent of Coopers & Lybrand L.L.P. (1)
(1) Previously filed.
(2) Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Post Effective
Amendment No. 1 to the foregoing Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Milford,
Commonwealth of Massachusetts, on this 15th day of July, 1999.
WATERS CORPORATION
By: /s/ Philip S. Taymor
--------------------------
Philip S. Taymor
Senior Vice President, Finance and Administration
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 15, 1999.
Signature Capacity
--------- --------
/s/ Douglas A. Berthiaume Chairman, President, and Chief
- --------------------------- Executive Officer
Douglas A. Berthiaume
/s/ Philip S. Taymor Senior Vice President, Finance and
- --------------------------- Administration and Chief Financial
Philip S. Taymor Officer
<PAGE>
/s/ Joshua Bekenstein Director
- ---------------------------
Joshua Bekenstein
/s/ Dr. Michael J. Berendt Director
- ---------------------------
Dr. Michael J. Berendt
/s/ Philip Caldwell Director
- ---------------------------
Philip Caldwell
/s/ Edward Conard Director
- ---------------------------
Edward Conard
/s/ Dr. Laurie H. Glimcher Director
- ---------------------------
Dr. Laurie H. Glimcher
/s/ William J. Miller Director
- ---------------------------
William J. Miller
/s/ Thomas P. Salice Director
- ---------------------------
Thomas P. Salice
<PAGE>
THE PLAN. Pursuant to the requirement of the Securities Act of 1933, the
Plan Administrator for the Plan has caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized, in the City
of Milford, Commonwealth of Massachusetts, on July 15, 1999.
Waters Employee Investment Plan
By : Employee Benefits Administration Committee
By : /s/ Brian K. Mazar
----------------------------------
Brian K. Mazar
Secretary
<PAGE>
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION OF EXHIBITS
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4.1 Waters Employee Investment Plan, as amended effective August
19, 1994 (1)
4.1 Waters Employee Investment Plan, as amended (formerly the
Waters Technologies Employee Investment Plan) effective
October 1, 1996 (2)
5.2 Undertaking of Registrant (1)
23.1 Consent of Coopers & Lybrand L.L.P. (1)
23.2 Consent of Coopers & Lybrand L.L.P. (1)
(1) Previously filed.
(2) Filed herewith.
WATERS EMPLOYEE INVESTMENT PLAN
Amended and Restated
Effective October 1, 1996
except as otherwise provided herein
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS......................................................1
ARTICLE 2 - PARTICIPATION...................................................14
2.1 PARTICIPATION REQUIREMENTS......................................14
2.2 ELECTIONS REQUIRED..............................................14
2.3 PARTICIPATION UPON REEMPLOYMENT.................................14
2.4 CESSATION OF PARTICIPATION......................................15
2.5 PARTICIPATION OF TRANSFERRED EMPLOYEES..........................15
ARTICLE 3 - PARTICIPANT CONTRIBUTIONS.......................................17
3.1 PARTICIPANT CONTRIBUTIONS.......................................17
3.2 INCREASE OR DECREASE IN RATE OF CONTRIBUTIONS...................17
3.3 SUSPENSION AND RESUMPTION OF CONTRIBUTIONS......................17
3.4 ROLLOVER CONTRIBUTIONS AND TRANSFERRED AMOUNTS..................18
3.5 MAXIMUM AMOUNT OF SALARY DEFERRAL...............................19
ARTICLE 4 - EMPLOYER CONTRIBUTIONS..........................................22
4.1 EMPLOYER MATCHING CONTRIBUTIONS.................................22
4.2 PAYMENT OF EMPLOYER MATCHING CONTRIBUTIONS......................22
4.3 EMPLOYER MATCHING CONTRIBUTIONS NOT CONDITIONED ON PROFITS......22
ARTICLE 5 - INVESTMENT PROVISIONS AND PARTICIPANT ACCOUNTS..................23
5.1 INVESTMENT FUNDS................................................23
5.2 INVESTMENTS IN COMPANY SHARES...................................23
5.3 INVESTMENT ELECTION.............................................24
5.4 CHANGE IN INVESTMENT ELECTION...................................24
5.5 TRANSFER AMONG FUNDS............................................24
5.6 RESPONSIBILITY OF PARTICIPANT IN SELECTING INVESTMENT FUNDS.....25
5.7 ESTABLISHMENT OF PARTICIPANT ACCOUNTS...........................25
5.8 VALUATION OF PARTICIPANTS' ACCOUNTS.............................26
5.9 CORRECTION OF ERROR.............................................26
5.10 ALLOCATION SHALL NOT VEST TITLE.................................26
5.11 VOTING OF COMPANY SHARES........................................26
5.12 PAYMENT OF COMPANY SHARES.......................................27
5.13 RULE 16b-3......................................................27
(i)
<PAGE>
ARTICLE 6 - VESTING.........................................................28
6.1 VESTING.........................................................28
6.2 FORFEITURES.....................................................28
6.3 MICROMASS EMPLOYEES.............................................28
ARTICLE 7 - WITHDRAWALS AND LOANS DURING EMPLOYMENT.........................29
7.1 DISCRETIONARY WITHDRAWALS.......................................29
7.2 HARDSHIP WITHDRAWALS............................................29
7.3 RESTORATION OF WITHDRAWALS......................................31
7.4 LOANS...........................................................31
7.5 LOAN CONDITIONS.................................................32
7.6 APPLICATION OF LOAN TO ACCOUNT BALANCES.........................34
7.7 DISCRETION......................................................35
ARTICLE 8 - DISTRIBUTIONS...................................................36
8.1 DISTRIBUTION AMOUNT.............................................36
8.2 DISTRIBUTION ON RETIREMENT, DISABILITY, OR OTHER
TERMINATION OF SERVICE..........................................36
8.3 DISTRIBUTION ON DEATH...........................................37
8.4 QUALIFIED DOMESTIC RELATIONS ORDERS.............................39
8.5 NOTICE TO PAYEES................................................42
8.6 INVESTMENT OF DEFERRED DISTRIBUTIONS............................42
8.7 DESIGNATION OF BENEFICIARY......................................42
8.8 PROOF OF DEATH..................................................43
8.9 LOAN AS A DISTRIBUTION..........................................43
8.10 BENEFITS PAYABLE ONLY FROM TRUST FUND...........................43
8.11 GENERAL DISTRIBUTION REQUIREMENTS...............................43
8.12 DIRECT ROLLOVER DISTRIBUTIONS...................................44
ARTICLE 9 - ADMINISTRATION OF THE PLAN......................................46
9.1 THE COMMITTEES..................................................46
9.2 ORGANIZATION OF THE COMMITTEES..................................46
9.3 POWERS, DUTIES, AND RESPONSIBILITIES OF THE COMMITTEES..........46
9.4 RECORDS OF THE COMMITTEES.......................................48
9.5 PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN..................48
9.6 UNCLAIMED BENEFITS..............................................49
9.7 DISTRIBUTION TO MINORS AND INCAPACITATED PAYEES.................49
9.8 EXPENSES........................................................50
9.9 INVESTMENT MANAGER..............................................50
9.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY..............50
(ii)
<PAGE>
9.11 INDEMNIFICATION.................................................51
9.12 FIDUCIARY INSURANCE.............................................51
9.13 RELIANCE ON STATEMENTS OF PARTICIPANTS AND BENEFICIARIES........51
9.14 DISCHARGE OF LIABILITY..........................................52
ARTICLE 10 - ADMINISTRATION OF THE TRUST....................................53
10.1 TRUST AGREEMENT.................................................53
10.2 EXCLUSIVE BENEFIT OF PARTICIPANTS...............................53
10.3 RETURN OF CONTRIBUTIONS.........................................53
ARTICLE 11 - AMENDMENT, TERMINATION OR MERGER OF THE PLAN...................54
11.1 RIGHT TO AMEND..................................................54
11.2 RIGHT TO TERMINATE..............................................54
11.3 TERMINATION OF TRUST............................................54
11.4 DISCONTINUANCE OF CONTRIBUTIONS.................................55
11.5 MERGER OF PLANS.................................................55
ARTICLE 12 - GENERAL PROVISIONS.............................................56
12.1 FILINGS WITH THE EMPLOYEE BENEFITS ADMINISTRATION COMMITTEE.....56
12.2 STATEMENTS OF ACCOUNTS..........................................56
12.3 NONALIENABILITY OF BENEFITS.....................................56
12.4 NO CONTRACT OF EMPLOYMENT.......................................56
12.5 LIMITATIONS ON CONTRIBUTIONS....................................57
12.6 NONDISCRIMINATION LIMITATIONS ON PARTICIPANT
CONTRIBUTIONS AND EMPLOYER MATCHING CONTRIBUTIONS...............61
12.7 TOP HEAVY PROVISIONS............................................69
12.8 PARTICIPATING EMPLOYERS.........................................74
12.9 GOVERNING LAW...................................................74
(iii)
<PAGE>
INTRODUCTION
Waters Corporation adopted the Waters Employee Investment Plan (the "Plan")
effective August 19, 1994. The purpose of the Plan is to facilitate systematic
savings by Eligible Employees and to provide Eligible Employees with funds for
their retirement or possible earlier needs. The Plan is hereby amended by Waters
Technologies Corporation (the "Sponsoring Employer") effective October 1, 1996,
except as otherwise provided herein, to reflect current laws and regulations and
to specify current procedures for the Plan. The Plan was also amended to merge
the Micromass, Inc. 401(k) into the Plan effective January 1, 1998. The
Sponsoring Employer intends that the Plan and Trust be recognized as a qualified
profit sharing plan under Sections 401(a) and 501(a) of the Internal Revenue
Code and that the cash or deferral arrangement forming part of the Plan qualify
under Section 401(k) of the Internal Revenue Code.
(iv)
<PAGE>
ARTICLE 1 - DEFINITIONS
1.1 "AFFILIATED EMPLOYER" means any of the following (other than the
Employer):
(a) Any corporation which is a member of a controlled group of
corporations which includes an Employer, determined under the
provisions of Section 414(b) of the Code;
(b) Any trade or business which is under common control (as defined in
Section 414(c) of the Code) with the Employer;
(c) Any organization (whether or not incorporated) which is a member of
an affiliated service group (as defined in Section 414(m) of the
Code) which includes the Employer; and
(d) Any other entity required to be aggregated with the Employer
pursuant to regulations under Section 414(o) of the Code.
A corporation, trade or business or member of an affiliated service group
shall be treated as an Affiliated Employer only while it is a member of
the controlled group.
1.2 "AFTER-TAX CONTRIBUTION" means a contribution to the Trust Fund which was
made by certain Participants and included in the Participant's gross
income for federal income tax purposes for the year in which such
contribution was made.
1.3 "ALTERNATE PAYEE" means any spouse, former spouse, child, or other
dependent of a Participant recognized by a Qualified Domestic Relations
Order as having a right to receive all, or a portion of, the Participant's
nonforfeitable benefits under the Plan. For purposes of Section 8.12, the
term "Alternate Payee" excludes a child or other dependent of the
Participant.
1.4 "BEFORE-TAX CONTRIBUTION" means a contribution to the Trust Fund which is
made on behalf of certain Participants as specified in Section 3.1
pursuant to a Salary Deferral Agreement and which is not included in the
Participant's gross income for Federal income tax purposes for the year in
which such contribution was made.
1.5 "BENEFICIARY" means any person or persons (including a trust established
for the benefit of such person or persons) designated by a Participant or
by the terms of the Plan as provided in Section 8.7, who is or who may
become entitled to receive benefits from the Plan. Any person who is an
Alternate Payee shall be considered a Beneficiary for purposes of the
Plan.
1.6 "BENEFIT COMMENCEMENT DATE" means the first Valuation Date as of which an
amount is paid in accordance with the provisions of Article 8.
1.7 "BOARD" means the Board of Directors of the Sponsoring Employer.
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<PAGE>
1.8 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code shall include such
provision, any valid regulation or ruling promulgated thereunder, and any
provision of future law that amends, supplements, or supersedes such
provision.
1.9 "COMMITTEE" means one or both of the Committees appointed by the Board as
set forth in Section 9.1 whichever shall be applicable.
1.10 "COMPANY SHARES" means the common stock of Waters Corporation.
1.11 "COMPENSATION" means, in the case of each Employee, all compensation paid
in the Plan Year to the Employee by the Employer for services rendered, as
reported on the Employee's Federal Income Tax Withholding Statement (Form
W-2), including salary; commissions; unused vacation pay; shift
differentials; short term disability pay; lump-sum cash payments of merit
pay increases; overtime pay; Senior Level Profit Share Plan and Profit
Share Plan on or after January 1, 1997; effective January 1, 1996,
management incentive bonuses; and effective January 1, 1997, bonuses paid
under the Performance Bonus Plan; but excluding, for purposes of Section
3.1, any severance pay or termination pay, moving expenses, tuition
reimbursement, bonuses not specifically included, and any other forms of
extraordinary earnings or the value thereof.
Compensation also includes contributions made on behalf of an Employee by
the Employer pursuant to a Salary Deferral Agreement and/or a salary
reduction agreement pursuant to a cafeteria plan established under Section
125 of the Code.
In no event shall a Participant's Compensation taken into account under
the Plan for any Plan Year exceed $150,000 or such other amount as the
Secretary of the Treasury may determine for such Plan Year in accordance
with Section 401 (a)(17) of the Code. Any change in the dollar amount set
forth above as adjusted by the Secretary of the Treasury in accordance
with Section 401(a)(17) of the Code shall apply only to Compensation taken
into account for Plan Years beginning with the Plan Year in which such
change is effective.
For Plan Years prior to January 1, 1997, in determining the Compensation
of a Participant for purposes of this dollar 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 of the Participant
and any lineal descendants of the Participant who have not attained age 19
before the close of such year. If, as a result of applying such rules, the
dollar limitation is exceeded, the limitation shall be prorated among the
affected family members in proportion to each such individual's
Compensation, as determined under this Section, before application of the
dollar limitation.
Compensation shall not include any amounts paid or payable to an Eligible
Employee for services rendered prior to the date the Eligible Employee
becomes a Participant. Compensation for an Eligible Employee's first Plan
Year of participation shall be equal to the Employee's actual compensation
for the period commencing on the Employee's Entry Date and ending on the
last day of the Plan Year. In the event the Employee's actual
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<PAGE>
compensation for such period is unavailable, Compensation shall be equal
to the Employee's annual compensation for such Plan Year, prorated for the
period during which the Employee was a Participant during the Plan Year.
1.12 "COMPENSATION DEFERRAL LIMIT" for any Plan Year means the maximum
percentage (determined in accordance with the provisions of Section 12.7)
of an Employee's Compensation which may be contributed to the Plan
pursuant to a Salary Deferral Agreement. The EBAC shall establish the
Compensation Deferral Agreement for each Plan Year for the purpose of
meeting the nondiscrimination tests of Sections 401(k) and 401(m) of the
Code, and shall apply the limit to such Employees as is necessary to
assure compliance with such tests.
1.13 "CONTRIBUTION PERCENTAGE LIMIT" for any Plan Year means the maximum
percentage (determined in accordance with the provisions of Section 12.6)
of Employer Matching Contributions which may be contributed to the Plan
under Section 401(m) of the Code. The EBAC shall establish the
Contribution Percentage Limit for each Plan Year for the purpose of
meeting the nondiscrimination tests of Section 401(m) of the Code, and
shall apply the limit to such Employees as is necessary to assure
compliance with such tests.
1.14 "DETERMINATION YEAR" means the Plan Year that is being tested for purposes
of determining if an Employee is a Highly Compensated Employee.
1.15 "DISABILITY" or "DISABLED" as applied to any Participant means that:
(a) The Participant is wholly and permanently prevented from engaging in
any regular occupation or employment for wages or profit as a result
of bodily injury or disease, either occupational or nonoccupational
in origin; and
(b) The Participant is entitled to receive a Social Security disability
award, or long term disability benefits under a plan sponsored by
the Employer.
"Disability" or "Disabled" does not mean, however, any incapacity which
was contracted, suffered, or incurred while the Participant was engaged
in, or resulted from the Participant having engaged in, a felonious
enterprise, or which resulted from the Participant's habitual drunkenness
or addiction to narcotics, a self-inflicted injury, or service in the
armed forces of any country.
The Employer shall have the right to require the Participant to submit
reasonable proof of such Disability. Such proof may include a requirement
that the Participant submit to a medical examination from time to time by
a qualified physician or physicians selected by the Employer. Medical
examinations shall not be required more frequently than semi-annually.
1.16 "EBAC" means the Employee Benefits Administration Committee appointed by
the Board as set forth in Section 9.1.
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1.17 "EBIC" means the Employee Benefits Investment Committee appointed by the
Board as set forth in Section 9.1.
1.18 "EFFECTIVE DATE" means August 19, 1994 except that this amended and
restated Plan shall be effective October 1, 1996.
1.19 "ELIGIBLE EMPLOYEE" means any person who is an Employee of the Employer,
excluding, however:
(a) Any Employee who is a member of a unit of employees covered by a
collective bargaining agreement to which the Employer is a party and
which does not specifically provide for the coverage of such
employees under the Plan;
(b) Any Employee who is a nonresident alien receiving no earned income
from sources within the United States";
(c) Any director of the Employer not otherwise so employed, or any
person who is compensated by special fees pursuant to a special
contract or arrangement;
(d) Any Employee who is a leased employee (within the meaning of Section
414(n)(2) of the Code);
(e) Any Employee who is a seasonal or temporary worker; or
(f) Any other Employee in a specified plant, operating unit, or job
classification of the Employer as determined by the Employer in its
sole discretion, provided that any such determination shall not
prevent the Plan from qualifying under Sections 401(a)(4),
401(a)(26), or 410(b) of the Code.
1.20 "EMPLOYEE" means any person employed by the Employer or an Affiliated
Employer.
1.21 "EMPLOYER" means Waters Technologies Corporation as the Sponsoring
Employer, and any Participating Employer, and any successor which shall
maintain this Plan.
1.22 "EMPLOYER MATCHING CONTRIBUTIONS" means the total matching contributions
made by the Employer on behalf of a Participant in accordance with Section
4.1.
1.23 "EMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee is
first credited with an Hour of Service for the Employer or an Affiliated
Employer, disregarding, however, hours of service credited for employment
with an Affiliated Employer prior to the date on which such employer
became an Affiliated Employer.
1.24 "ENTRY DATE" means the first day of each payroll period as determined
under Section 2.1, or such other date as determined under Section 2.5(a)
for a transferred Employee.
1.25 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to a specific provision of ERISA
shall include such provision, any
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valid regulation or ruling promulgated thereunder, and any provision of
future law that amends, supplements, or supersedes such provision.
1.26 "FISCAL YEAR" means the accounting period for Federal income tax purposes,
which is the period of twelve consecutive months commencing on January 1
of each year and ending on the following December 31.
1.27 "FIVE PERCENT OWNER" means an Employee who owns more than five percent of
the value of the outstanding stock of the Employer or stock possessing
more than five percent of the total outstanding combined voting power of
all stock of the Employer. An Employee shall be considered to own stocks
that such Employee is deemed to own under Section 318 of the Code but
substituting "5%" for "50%" in Section 318(a)(2)(C).
1.28 "HIGHLY COMPENSATED EMPLOYEE" means, with respect to Plan Years:
(a) beginning prior to January 1, 1997, any Employee who performs
services for the Employer or an Affiliated Employer during the
Determination Year and who, during the calendar year:
(i) Was a Five Percent Owner at any time during such year;
(ii) Received compensation from the Employer or an Affiliated
Employer in excess of $75,000 (as adjusted pursuant to Section
415(d) of the Code);
(iii) Received compensation from the Employer or an Affiliated
Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was among the top 20% of Employees
when ranked on the basis of compensation paid during the
Look-Back Year, excluding however, Employees who:
(1) have less than six months of eligibility service;
(2) are under age 21;
(3) ordinarily work not more than six months per year;
(4) ordinarily work less than 17-1/2 hours per week;
(5) are included in a unit of Employees covered by a
collective bargaining agreement if 90% or more of the
Employer's Employees are covered by collective
bargaining agreements and the Plan covers only those
Employees who are not covered by such agreements; or
(iv) Was an officer of the Employer or an Affiliated Employer and
received compensation during the Look-Back Year of more than
50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code. No more than 50 Employees (or, if
fewer, the greater of 3 Employees or 10% of the
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Employees) shall be treated as officers. If no officer has
satisfied this requirement during the Look-Back Year, the
highest paid officer for that year shall be treated as a
Highly Compensated Employee.
Any Employee who during the Determination Year is either a Five Percent
Owner at any time during such year, or who (a) satisfies the requirements
in paragraphs (ii), (iii), or (iv) above, or if no officer satisfies the
requirements of paragraph (iv) for that year, the highest paid officer for
that year, and (b) is among the top 100 Employees ranked by compensation
for the Determination Year shall be treated as a Highly Compensated
Employee.
The term Highly Compensated Employee shall also include any former Highly
Compensated Employee who terminated employment with the Employer or an
Affiliated Employer prior to the Determination Year, performs no services
for the Employer or an Affiliated Employer during the Determination Year,
and was a Highly Compensated Employee in either his or her year of
termination of employment or in any Determination Year ending on or after
his or her attainment of age 55.
If an Employee is, during a Determination Year or Look-Back Year, a member
of the "family" (within the meaning of Section 414(q)(6)(B) of the Code)
of a Five Percent Owner or of one of the ten most Highly Compensated
Employees when ranked on the basis of compensation paid during such year,
then such individual shall not be treated as a separate Employee and any
compensation received by such individual and any contribution or benefit
of such individual shall be aggregated with the compensation and
contribution or benefit of the Five Percent Owner or Highly Compensated
Employee.
For purposes of determining an Employee's compensation under this Section,
compensation shall mean the Employee's Section 415 Compensation (as
defined in Section 13.5(b)), but including any amounts contributed on
behalf of the Employee by an Employer or Affiliated Employer pursuant to a
salary deferral agreement under this Plan (or any other cash or deferred
arrangement described in Section 401(k) of the Code) or a salary reduction
agreement pursuant to a cafeteria plan established under Section 125 of
the Code, or toward the purchase of an annuity described in Section 403(b)
of the Code.
(b) beginning on or after January 1, 1997, any employee who:
(i) was a Five Percent Owner at any time during current or the
immediately preceding Plan Year, or
(ii) for the immediately preceding Plan Year, had compensation from
the Employer in excess of $80,000, as adjusted pursuant to
Section 415 of the Code;
For purposes of this definitional Section, "compensation" means
compensation as defined in Section 414(s) of the Code but including salary
reduction amounts excluded from income under Sections 125, 402(a)(8) and
402(h)(1)(B) of the Code.
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1.29 "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 or an Affiliated Employer
during the Plan Year.
(b) Each hour for which an Employee is directly or indirectly paid, or
entitled to payment by the Employer or an Affiliated Employer, on
account of a period of time during which no duties are performed for
the Employer or an Affiliated Employer (irrespective of whether the
employment relationship has terminated) due to and in accordance
with procedures regarding vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave
of absence.
Notwithstanding the preceding sentence,
(i) No more than 501 Hours of Service will be credited to an
Employee pursuant to the provisions of this paragraph (b) on
account of any single continuous period during which the
Employee performs no duties (whether or not such period occurs
during a single Plan Year).
(ii) No Hours of Service will be credited to an Employee for a
period during which no duties are performed if payment to the
Employee was made or due under a plan maintained solely for
the purpose of complying with workers' compensation,
unemployment compensation or disability insurance laws.
(iii) No Hours of Service will be credited for a payment which
solely reimburses an Employee for medical or medically related
expenses incurred by the Employee or his or her dependents.
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer or an Affiliated
Employer, but 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). Hours credited under this paragraph (c) shall be
credited to the Plan Year in which the award or agreement pertains,
rather than to the Plan Year in which the award, agreement or
payment is made.
(d) Effective December 12, 1994, notwithstanding any provision of this
Plan to the contrary, contributions, benefits, and services credit
with respect to qualified military service shall be provided in
accordance with Section 414(u) of the Code.
The determination of Hours of Service shall be in accordance with the
rules set forth in Department of Labor Regulations Section 2530.200b-2(a)
through (c) which are incorporated herein by this reference.
1.30 "INVESTMENT MANAGER" means any person, firm, or corporation who:
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(a) is a registered investment adviser under the Investment Advisers Act
of 1940, a bank, or an insurance company;
(b) has the power to manage, acquire, or dispose of Plan assets; and
(c) acknowledges in writing a fiduciary responsibility to the Plan.
1.31 "LEAVE OF ABSENCE" means an absence granted in writing by the Employer or
an Affiliated Employer in accordance with the employer's personnel
policies or as required by law, uniformly applied to all employees,
including, but not limited to, absences for reasons of health, education,
jury duty, or service in the armed forces of the United States.
1.32 "LIMITATION YEAR" means the calendar year.
1.33 "LOAN FUND" means the fund to be invested in loans to Participants.
1.34 "LOOK-BACK YEAR" means the period of twelve consecutive months immediately
preceding the Determination Year. In determining the identity of a Highly
Compensated Employee, however, the Committee may elect that the Look-Back
Year shall be the calendar year ending with or within the Determination
Year.
1.35 "MILLIPORE PLAN" means the Millipore Corporation Employees' Participation
and Savings Plan, as in effect on August 18, 1994.
1.36 "MICROMASS PLAN" means the Micromass, Inc. 401(k) Plan, as in effect on
December 31, 1997.
1.37 "NONHIGHLY COMPENSATED EMPLOYEE" means an Employee who is not a Highly
Compensated Employee.
1.38 "NORMAL RETIREMENT DATE" means the date on which the Employee shall have
attained age 65.
1.39 "PARTICIPANT" means any Eligible Employee who participates in the Plan in
accordance with the provisions of Article 2. An Eligible Employee shall
cease to be a Participant in the Plan in accordance with the provisions of
Section 2.4.
1.40 "PARTICIPATING EMPLOYER" means any Affiliated Employer that has adopted
this Plan with the approval of the Sponsoring Employer.
1.41 "PERIOD OF SERVICE" or "SERVICE" means, the aggregate of the following:
(a) The period beginning on the Employee's Employment Commencement Date
(or Reemployment Commencement Date) and ending on the Employee's
Severance from Service Date;
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(b) If an Employee performs an Hour of Service within twelve months of a
Severance from Service Date on account of his or her resignation,
retirement, or discharge, the period from such Severance from
Service Date to such Hour of Service;
(c) In the case of an Employee who leaves employment with the Employer
or an Affiliated Employer to enter service with the armed forces of
the United States, the period of such military service, provided the
individual resumes employment with the Employer or Affiliated
Employer within the period during which his or her reemployment
rights are protected by applicable law; and
(d) Notwithstanding the foregoing, in the case of an individual who
transfers directly to a position with the Employer in which he or
she is an Eligible Employee, from employment with Millipore
Corporation, or any of its subsidiaries, including any individuals
who are returning from a leave of absence and who were receiving
payments under a workers' compensation plan or a long term
disability plan, without any intervening employment, the period
beginning on the date such individual was first credited with an
Hour of Service for Millipore Corporation, or any of its
subsidiaries, if the Employer, Millipore Corporation, or the
applicable subsidiary and the individual have so agreed in writing.
(e) An Employee's Service shall include the years of eligibility service
he or she had accumulated under the Prior Plan on August 18, 1994,
in accordance with the provisions of the Prior Plan on such date if
(i) the individual was an Employee on August 18, 1994, or (ii) the
individual becomes an Employee before the earlier of August 18, 1999
or the fifth anniversary of the date he or she terminated employment
from Millipore Corporation. In no event will an Employee duplicate
service credit for any period of employment.
(f) Notwithstanding any provision of this Plan to the contrary,
contributions and service credit with respect to qualified military
service shall be provided in accordance with Code Section 414(u).
(g) An Employee's Service shall include the years of eligibility service
he or she had accumulated under the Micromass Plan on December 31,
1997, in accordance with the provisions of the Micromass Plan on
such date if the individual was an Employee on December 31, 1997.
1.42 "PLAN" means Waters Employee Investment Plan as set forth herein, and as
may be amended from time to time.
1.43 "PLAN YEAR" means the twelve consecutive months commencing on January 1 of
each year and ending on the following December 31. The Plan's first Plan
Year is a short Plan Year which begins on August 19, 1994 and ends on
December 31, 1994.
1.44 "QUALIFIED DOMESTIC RELATIONS ORDER" means a domestic relations order
which meets the requirements of Section 414(p) of the Code, as determined
by the EBAC.
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1.45 "REEMPLOYMENT COMMENCEMENT DATE" means the date on which an Employee is
first credited with an Hour of Service for the Employer or an Affiliated
Employer following a Severance from Service Date.
1.46 "RETIREMENT DATE" means the Participant's Normal Retirement Date or any
actual date of retirement.
1.47 "ROLLOVER CONTRIBUTION" means a rollover of a distribution from a
qualified plan or conduit individual retirement account to this Plan,
provided the distribution is:
(a) received from a qualified plan as an "eligible rollover
distribution" (within the meaning of Section 402(c)(4) of the Code);
(b) eligible for a tax-free rollover to a qualified plan; and
(c) either rolled over within 60 days following the date the Eligible
Employee received the distribution, or paid to the Plan as a "direct
rollover" (within the meaning of Section 401(a)(31) of the Code).
A Rollover Contribution may not include amounts attributable to voluntary
deductible employee contributions.
1.48 "SALARY DEFERRAL AGREEMENT" means an agreement in the form prescribed by
the Committee in which an Eligible Employee agrees to reduce his or her
Compensation paid and to have the amount of such reduction contributed by
the Employer to the Trust Fund on behalf of the Eligible Employee pursuant
to Section 401(k) of the Code. An Eligible Employee may enter into a new
Salary Deferral Agreement from time to time pursuant to Article 3.
1.49 "SEVERANCE FROM SERVICE DATE" means the earlier of:
(a) The date on which an Employee ceases to be employed by the Employer
or an Affiliated Employer because he or she resigns, retires, is
discharged or dies.
(b) The first anniversary of the date on which an Employee remains
absent from service (with or without pay) with an Employer or an
Affiliated Employer for any reason other than resignation,
retirement, discharge or death, such as Disability, taking a Leave
of Absence under the Family and Medical Leave Act, layoff, or,
subject to paragraph (c) below, a Leave of Absence.
(c) The date on which a Leave of Absence began if the Employee fails to
return to active employment upon the expiration of such leave (or,
in the case of military leave, during the period his or her
reemployment rights are protected by applicable law), unless such
failure is the result of retirement, Disability, or death.
1.50 "SPONSORING EMPLOYER" means Waters Technologies Corporation or its
successor or successors.
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1.51 "SPOUSE" means the person, if any, to whom the Participant is lawfully
married at the date of his or her death or at his or her Benefit
Commencement Date, whichever is earlier, provided, however, that a former
spouse will be treated as the Participant's Spouse to the extent provided
under a Qualified Domestic Relations Order.
1.52 "TOTAL ACCOUNT" means the total amounts held under the Plan for a
Participant, consisting of the following accounts:
(a) "BASIC BEFORE-TAX CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Basic Before-Tax
Contributions made in accordance with Section 3.1(a), basic
before-tax contributions (including any investment earnings) which
were contributed to the Millipore Plan and which were transferred to
the Plan on or about August 19, 1994, plus (or minus) any investment
earnings (or losses) on such contributions, less any distributions
from such account.
(b) "BASIC AFTER-TAX CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Basic After-Tax
Contributions made plus (or minus) any investment earnings (or
losses) on such contributions, less any distributions from such
account.
(c) "SUPPLEMENTAL BEFORE-TAX CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Supplemental Before-Tax
Contributions made in accordance with Section 3.1(b), Supplemental
before-tax contributions (including any investment earnings) which
were contributed to the Millipore Plan and which were transferred to
the Plan on or about August 19, 1994, plus (or minus) any investment
earnings (or losses) on such contributions, less any distributions
from such account.
(d) "SUPPLEMENTAL AFTER-TAX CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Supplemental After-Tax
Contributions (including any investment earnings) which were
contributed to the Millipore Plan and which were transferred to the
Plan on or about August 19, 1994, plus (or minus) any investment
earnings (or losses) on such contributions, less any distributions
from such account.
(e) "EMPLOYER MATCHING CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Employer Matching
Contributions made in accordance with Section 4.1, and employer
matching contributions (including any investment earnings) which
were contributed to the Millipore Plan and which were transferred to
the Plan on or about August 19, 1994, plus (or minus) any investment
earnings (or losses) on such contributions, less any distributions
from such account.
(f) "PARTICIPATION PLAN ACCOUNT" - The portion of the Participant's
Total Account consisting of profit sharing contributions (including
any investment earnings) which were contributed to the Millipore
Plan and which were transferred to the Plan on or
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about August 19, 1994, plus (or minus) any investment earnings (or
losses) on such contributions, less any distributions from such
account.
(g) "ROLLOVER ACCOUNT" - The portion of the Participant's Total Account
consisting of any Rollover Contributions made on behalf of the
Participant in accordance with Section 3.4, plus (or minus) any
investment earnings (or losses) on such contributions, less any
distributions from such account.
(h) "QUALIFIED MATCHING CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Qualified Matching
Contributions made in accordance with Section 12.6, plus (or minus)
any investment earnings (or losses) on such contributions, less any
distributions from such account.
(i) "QUALIFIED NONELECTIVE CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of Qualified Nonelective
Contributions made in accordance with Section 12.6, plus (or minus)
any investment earnings (or losses) on such contributions, less any
distributions from such account.
(j) "MICROMASS EMPLOYEE PRE-TAX ACCOUNT" - The portion of the
Participant's Total Account consisting of pre-tax contributions the
Participant made under the Micromass Plan on or before December 31,
1997, plus (or minus) any investment earnings (or losses) on such
contributions, less any distributions from such account.
(k) "MICROMASS COMPANY MATCHING ACCOUNT" - The portion of the
Participant's Total Account consisting of matching contributions
made for the Participant under the Micromass Plan on or before
December 31, 1997, plus (or minus) any investment earnings (or
losses) on such contributions, less any distributions from such
account.
(l) "MICROMASS ROLLOVER CONTRIBUTION ACCOUNT" - The portion of the
Participant's Total Account consisting of any rollover contributions
made on behalf of the Participant on or before December 31, 1997
under the Micromass Plan, plus (or minus) any investment earnings
(or losses) on such contributions, less any distributions from such
account.
1.53 "TRANSFERRED AMOUNT" means an amount of cash which is transferred directly
from a qualified plan and trust described in Section 401(a) of the Code
and, if applicable, Section 401(k) of the Code, which constitutes all or a
portion of an Eligible Employee's entire interest in such trust and which
is not subject to the qualified joint and survivor annuity requirements of
Section 401(a)(11) and 417 of the Code. A Transferred Amount shall not
include balances attributable to voluntary deductible employee
contributions, qualified matching contributions, or qualified nonelective
contributions.
1.54 "TRUSTEE" means the Trustee or Trustees appointed by the Sponsoring
Employer to administer the Trust Fund in accordance with Article 10.
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1.55 "TRUST FUND" means the trust established to hold and invest the assets of
the Plan.
1.56 "VALUATION DATE" means at least the last day of every month on which the
New York Stock Exchange is open for trading, or such other date or dates
as the Committee deems appropriate.
1.57 "YEAR OF ELIGIBILITY SERVICE" is completed when an Eligible Employee is
credited with a one-year Period of Service.
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ARTICLE 2 - PARTICIPATION
2.1 PARTICIPATION REQUIREMENTS
(a) Any individual who is an Eligible Employee as of the Effective Date
shall become a Participant on the Effective Date.
(b) Except as provided in paragraph (c) below, any individual who
becomes an Eligible Employee after the Effective Date shall become a
Participant on the first Entry Date coincident with or next
following the date on which he or she has completed a thirty-day
period of Service by making elections pursuant to Section 2.2.
(c) Any individual who, after the Effective Date, transfers from
Millipore Corporation, or any subsidiary thereof, shall become a
Participant on the first Entry Date on or after the date on which he
or she becomes an Eligible Employee by making elections pursuant to
Section 2.2.
(d) In the event that an individual who was not classified as an
Employee or a common-law employee is legally reclassified as an
Employee or a common-law employee of the Employer, such Employee
shall only be considered to be an Employee at the time of such
reclassification, or if later, at the time such individual is
initially treated as an Employee or common-law employee on the
payroll of the Employer.
2.2 ELECTIONS REQUIRED
An Eligible Employee shall become a Participant by making elections in the
manner prescribed by the EBAC. Any elections made pursuant to Section 4.1
shall become effective beginning with the first paycheck received by the
Eligible Employee on or after the Entry Date after the date the Eligible
Employee files his or her elections, as administratively feasible. A
Participant's elections made pursuant to Section 3.1 shall remain in
effect (subject to the contribution limitations under Sections 3.5, 12.5,
and 12.6) while the Participant is an Eligible Employee or until such time
as he or she files a new election with the recordkeeper appointed by the
Employer.
2.3 PARTICIPATION UPON REEMPLOYMENT
(a) If an Eligible Employee has a Severance from Service Date after he
or she has one year or more of Service and he or she is subsequently
reemployed as an Eligible Employee, he or she may resume making
contributions or having contributions made on his or her behalf to
the Plan as of his or her Reemployment Commencement Date, by
elections pursuant to Section 2.2.
(b) If an Eligible Employee has a Severance from Service Date before he
or she has a year of Service, and he or she is subsequently
reemployed as an Eligible Employee with a Reemployment Commencement
Date that is less than or equal to a year from the Severance from
Service Date, he or she may resume making
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contributions or having contributions made on his or her behalf to
the Plan after completing a thirty day period of Service. For
purposes of this paragraph, Service prior to the Severance from
Service Date shall be counted when calculating the 30 day Service
requirement.
(c) If an Eligible Employee has a Severance from Service Date before he
or she has a year of Service, and he or she is subsequently
reemployed as an Eligible Employee with a Reemployment Commencement
date that is more than a year from the Severance from Service Date,
he or she will become a Participant on the Entry Date coinciding
with or next following the Reemployment Commencement Date, and all
Service prior to the Employee's Severance from Service Date shall
not be counted when calculating this Service.
2.4 CESSATION OF PARTICIPATION
A Participant's participation in the Plan shall continue until the later
of:
(a) The Participant's Severance from Service Date, or
(b) Such time as all nonforfeitable amounts credited to the
Participant's Total Account shall have been distributed in full in
accordance with the terms of the Plan.
2.5 PARTICIPATION OF TRANSFERRED EMPLOYEES
(a) If an Employee transfers to a position in which he or she is an
Eligible Employee from employment with the Employer or an Affiliated
Employer in which he or she was not an Eligible Employee, including
any individuals who are returning from a leave of absence and who
were receiving payments under a workers' compensation plan or a long
term disability plan, the transferred Employee may participate in
the Plan on the later of (1) the date of such transfer or (2) the
first day of the first payroll period, as administratively feasible,
on which he or she would have first become a Participant under
Section 2.1 had his or her service before the date of such transfer
been service as an Eligible Employee, by making elections pursuant
to Section 2.2.
(b) If an Employee transfers to a position with the Employer or an
Affiliated Employer in which he or she is no longer an Eligible
Employee, Before-Tax Contributions and Employer Matching
Contributions shall cease to be made by or on behalf of the
Participant for Periods of Service rendered on or after the
Participant's date of transfer. The Participant's Total Account will
continue to share in the investment experience of the Trust Fund as
long as a balance remains in the Plan.
If such Employee returns to a position in which he or she is again
an Eligible Employee, he or she may resume making contributions or
having contributions made on his or her behalf under the Plan as of
the date of transfer by making elections pursuant to Section 2.2.
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(c) If a Participant transfers among Employers participating in the Plan
and remains an Eligible Employee, such Participant's rights under
the Plan shall not be affected, and the Participant's participation
in the Plan shall continue without interruption.
(d) An Employee's Years of Eligibility Service shall include the years
of eligibility service he or she had accumulated under the Prior
Plan on August 18, 1994, in accordance with the provisions of the
Prior Plan on such date if (i) the individual was an Employee on
August 18, 1994 or (ii) the individual becomes an Employee before
the earlier of August 18, 1999 or the fifth anniversary of the date
he or she terminated employment from Millipore Corporation. In no
event will an Employee receive duplicate service credit for any
period of employment.
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ARTICLE 3 - PARTICIPANT CONTRIBUTIONS
3.1 PARTICIPANT CONTRIBUTIONS
Each Eligible Employee may, upon becoming eligible to participate in the
Plan, elect to have a contribution made on his or her behalf to the Trust
Fund at the rate of 1% to 15% of Compensation. Effective June 1, 1998, the
Contribution rate will increase to a maximum of 20% of Compensation. The
rate of contribution will be in increments of 1%. Such election shall be
in the form of a payroll deduction authorization and/or a Salary Deferral
Agreement, and shall be subject to the Compensation Deferral Limit and/or
Contribution Percentage Limit, if any, applicable to such Participant as
established by the EBAC from time to time for purposes of meeting the
nondiscrimination tests of Section 401(k) of the Code and, the
nondiscrimination tests of Section 401(m) of the Code. Contributions made
in accordance with this Section 3.1 shall also be subject to the maximum
limits in effect under Sections 3.5, 12.5, and 12.6.
Such Participant's contributions may consist of Basic Before-Tax
Contributions and Supplemental Before-Tax Contributions, as described
below:
(a) BASIC BEFORE-TAX CONTRIBUTIONS - The first 6% of Compensation for a
payroll period which is contributed on the Participant's behalf
under a Salary Deferral Agreement shall be known as the
Participant's Basic Before-Tax Contributions and shall be
contributed to the Participant's Basic Before-Tax Contribution
Account.
(b) SUPPLEMENTAL BEFORE-TAX CONTRIBUTIONS - Contributions made on the
Participant's behalf under a Salary Deferral Agreement in excess of
6% of Compensation for a payroll period shall be known as the
Participant's Supplemental Before-Tax Contributions and shall be
contributed to the Participant's Supplemental Before-Tax
Contribution Account.
3.2 INCREASE OR DECREASE IN RATE OF CONTRIBUTIONS
(a) A Participant may elect to change the rate of his or her Before-Tax
Contributions, which shall be effective by the next payroll period
after the recordkeeper designated by the Employer is notified, as
administratively feasible, or at such other time as specified by the
Committee.
(b) A Participant's change in his or her rate of Before-Tax
Contributions shall be subject to the contribution limitations in
effect under Sections 3.5, 12.5, and 12.6 at the time the change is
made.
3.3 SUSPENSION AND RESUMPTION OF CONTRIBUTIONS
(a) A Participant may elect to suspend or resume his or her Before-Tax
Contributions at any time, effective as of the first day of the next
succeeding payroll period after the recordkeeper is notified, as
administratively feasible.
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(b) A Participant may not make up suspended Before-Tax Contributions.
(c) During a period of suspension, the Participant's Total Account will
continue to share in the investment experience of the Trust Fund,
and the Participant will remain entitled to those benefits and
rights under the Plan not conditioned on Before-Tax Contributions
and the right to make an in-service withdrawal or receive a Plan
loan.
(d) Participants must reinitiate payroll deductions following a
suspension through application to the recordkeeper designated by the
Employer. A Participant's election to resume making Before-Tax
Contributions shall remain in effect while the Participant is an
Eligible Employee or until such time as he or she files a new
election. Any election to resume making Before-Tax Contributions
shall be subject to the contribution limitations in effect under
Sections 3.5, 12.5, and 12.6.
3.4 ROLLOVER CONTRIBUTIONS AND TRANSFERRED AMOUNTS
(a) ROLLOVERS - An Eligible Employee may file a written request with the
EBAC to accept his or her Rollover Contribution provided that such
Rollover Contribution constitutes a distribution from a qualified
401(k) plan or a conduit individual retirement account. Any such
request shall state the amount of the Rollover Contribution and
include a statement that such contribution constitutes a Rollover
Contribution.
The EBAC shall determine, in accordance with a uniform and
nondiscriminatory policy, whether or not such contribution shall be
accepted, and may require the Eligible Employee to submit such other
evidence and documentation as it determines necessary to ensure that
the contribution qualifies as a Rollover Contribution.
All Rollover Contributions must be made in cash.
The amount paid to the Trust Fund in the form of a Rollover
Contribution and any subsequent investment experience on such amount
shall be credited to the Eligible Employee's Rollover Account.
(b) TRANSFERRED AMOUNTS - An Eligible Employee may file a written
request with the Committee to accept his or her Transferred Amount.
Any such request shall:
(i) state the amount of the Transferred Amount;
(ii) include a statement that such amount constitutes a Transferred
Amount;
(iii) indicate the portion, if any, of the Transferred Amount that
is subject to the qualified joint and survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code; and
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(iv) indicate the portion, if any, of the Transferred Amount that
consists of employee before-tax contributions, employee
after-tax contributions, employer matching contributions,
other employer contributions, or rollover contributions.
The amount paid to the Trust Fund in the form of a Transferred
Amount, and any subsequent investment experience on such amount,
shall be credited to the appropriate accounts described in Section
5.7.
The Plan shall prohibit the transfer of assets to the Plan from any
other plan if such assets are subject to the qualified joint and
survivor annuity requirements of Sections 401(a)(11) and 417 of the
Code.
The EBAC shall determine, in accordance with a uniform and
nondiscriminatory policy, whether or not such amount shall be
accepted, and may require the Eligible Employee to submit such other
evidence and documentation as it determines necessary to ensure that
the amount qualifies as a Transferred Amount.
(c) An Eligible Employee shall have at all times a nonforfeitable
interest in 100% of his or her Rollover Contribution and/or
Transferred Amount, and any investment experience on such amounts.
(d) At the time the Rollover Contribution or Transferred Amount is made
to the Trust Fund, the Eligible Employee must elect to have it
invested in accordance with the terms of Section 5.3.
(e) An Eligible Employee who makes a Rollover Contribution or on whose
behalf a Transferred Amount is made to the Trust Fund shall be
deemed to be a Participant with respect to such amount for all
purposes of the Plan, except for purposes of Sections 2.1 through
2.4, Sections 3.1 through 3.3, Sections 4.1 and 4.2, and Section
12.6.
(f) In no event shall any Rollover Contribution or Transferred Amount be
subject to Employer Matching Contributions.
3.5 MAXIMUM AMOUNT OF SALARY DEFERRAL
(a) Subject to the provisions of paragraph (b) below, contributions made
during a Participant's taxable year (which is presumed to be the
calendar year) on behalf of the Participant under a Salary Deferral
Agreement shall be limited to $9,500 (or such other limit as may be
in effect at the beginning of such taxable year under Section
402(g)(1) of the Code), reduced by the amount of "elective
deferrals" (as defined in Section 402(g)(3) of the Code) made during
the taxable year of the Participant under any plans or agreements
maintained by the Employer or an Affiliated Employer other than this
Plan. Elective deferrals shall not include any elective deferrals
returned to the Employee pursuant to Section 12.5(d).
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(b) If a Participant receives a hardship withdrawal under the provisions
of Section 7.2 which includes Before-Tax Contributions, the maximum
amount of elective deferrals (within the meaning of Section
402(g)(3) of the Code) that may be made on the Participant's behalf
under this Plan and any other plan of the Employer or an Affiliated
Employer for the Plan Year immediately following the Plan Year in
which the Participant received such hardship withdrawal may not
exceed an amount equal to the excess of (i) over (ii) below:
(i) The maximum amount of elective deferrals which otherwise could
be made in accordance with the provisions of paragraph (a)
above for the Plan Year following the Plan Year in which the
Participant received the hardship withdrawal.
(ii) The amount of elective deferrals made on the Participant's
behalf for the Plan Year in which the Participant received the
hardship withdrawal.
(c) If contributions made on a Participant's behalf for the preceding
taxable year of the Participant under a Salary Deferral Agreement,
and any other elective deferrals (within the meaning of Section
402(g)(3) of the Code) made on the Participant's behalf under any
other qualified cash or deferred arrangement of the Employer or an
Affiliated Employer for such taxable year exceed $9,500 (or such
other amount as adjusted in accordance with paragraphs (a) and (b)
above), the EBAC shall notify the Participant of the amount of such
excess.
If the elective deferral limit is exceeded for a Participant for a
taxable year, the excess amount, adjusted (as described below) for
allocable gains or losses for the taxable year with respect to which
the deferral was made, shall be refunded to the Participant in a
single payment no later than April 15 of the taxable year following
the taxable year in which such excess deferral arose. If the
Participant's Before-Tax Contribution Account is invested in more
than one investment fund, such refund shall be made pro rata, to the
extent practicable, from all such investment funds. The amount
refunded shall not exceed the Participant's Before-Tax Contributions
under the Plan for the taxable year. The payment shall be deemed to
have been made before the close of the taxable year in which such
excess deferral arose. Any Employer Matching Contributions made with
respect to returned excess deferral amounts shall be forfeited and
used to reduce subsequent Employer Contributions.
Excess deferrals shall be adjusted for allocable gains or losses for
the taxable year in which the excess deferrals arose by multiplying
the gains or losses credited to the Participant's Basic and
Supplemental Before-Tax Contribution Accounts for that taxable year
by a fraction, the numerator of which is the excess deferral amount
made by the Participant for the taxable year, and the denominator of
which is the sum of (i) the balance in the Participant's Basic and
Supplemental Before-Tax Contribution Accounts as of the beginning of
the taxable year, and (ii) the amount
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of Before-Tax Contributions credited to the Participant's Basic and
Supplemental Before-Tax Contribution Accounts for the taxable year.
(d) Notwithstanding the provisions of paragraph (c) above, the amount of
excess Before-Tax Contributions that may be distributed to a
Participant for a taxable year shall be reduced, but not below zero,
by any excess contributions previously distributed with respect to
the Participant for the Plan Year beginning with or within such
taxable year in accordance with Section 12.6.
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ARTICLE 4 - EMPLOYER CONTRIBUTIONS
4.1 EMPLOYER MATCHING CONTRIBUTIONS
At the times specified in Section 5.8(b), an Employer Matching
Contribution shall be credited to the Employer Matching Contribution
Account of each Participant who has completed one Year of Eligibility
Service and who is contributing Basic Before-Tax Contributions to the
Trust Fund. The amount of Employer Matching Contributions made on behalf
of each such Participant shall be 50% of the Participant's Basic
Before-Tax Contributions made since the previous determination.
In addition, effective June 1, 1998, an additional Employer Matching
Contribution may be allocated to the Matching Contribution Account of each
Participant who has completed one Year of Eligibility Service, who is
contributing Basic Before-Tax Contributions to the Trust Fund for the
determination period, who is actively employed on December 31 of the Plan
Year, and who has made the maximum permissible Before-Tax Contributions
under Section 3.5(a). Such additional contribution shall equal the amount
necessary to make the total Employer Matching Contribution for the Plan
Year equal 3% of the Participant's Compensation.
No Employer Matching Contributions shall be made with respect to
Supplemental Before-Tax Contributions made by or on behalf of any
Participant.
4.2 PAYMENT OF EMPLOYER MATCHING CONTRIBUTIONS
Employer Matching Contributions for a Plan Year shall be contributed to
the Trust Fund as soon as practicable, but in no event later than the time
prescribed by law (including extensions thereof) for filing the Employer's
Federal income tax return for the Fiscal Year of the Employer which
includes the last day of the Plan Year for which such contributions are
made.
4.3 EMPLOYER MATCHING CONTRIBUTIONS NOT CONDITIONED ON PROFITS
Employer Matching Contributions made for a Plan Year shall be made without
regard to the Employer's current or accumulated earnings and profits for
the taxable year or years ending with or within such Plan Year.
Notwithstanding the foregoing, the Plan shall continue to be regarded as a
profit sharing plan for purposes of Section 401(a) of the Code.
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ARTICLE 5 - INVESTMENT PROVISIONS AND PARTICIPANT ACCOUNTS
5.1 INVESTMENT FUNDS
The Trustee shall establish one or more investment funds as the EBIC may
from time to time direct. The EBIC may direct that each investment fund be
invested:
(a) At the discretion of the Trustee in accordance with such investment
guidelines and objectives as may be established by the EBIC for such
investment fund; or
(b) At the discretion of a duly appointed Investment Manager in
accordance with such investment guidelines and objectives as may be
established by the EBIC; or
(c) In such investments as the EBIC may specify for such investment
fund.
The EBIC may from time to time change its direction with respect to any
investment fund and may, at any time, eliminate any investment fund or
establish additional funds. Whenever an investment fund is eliminated, the
Trustee shall promptly liquidate the assets of such investment fund and
reinvest the proceeds thereof in accordance with the directions of the
EBIC.
The Trustee may maintain from time to time reasonable amounts in cash or
cash equivalents in any fund as it shall deem necessary to carry out the
purposes of the Plan. All expenses properly attributable to an investment
fund, including but not limited to brokerage fees and stock transfer
taxes, shall be paid from such investment fund, unless paid by the
Employer.
For investment elections made pursuant to Section 5.3, there is
established a "Waters Stock Fund" which normally shall be invested and
reinvested in Company Shares which constitute "qualifying employer
securities" under Section 407(d)(5) of ERISA.
5.2 INVESTMENTS IN COMPANY SHARES.
Subject to Section 5.3, Participants may elect to have a portion of their
Total Account invested by the Trustee in the Waters Stock Fund. For this
purpose it is intended that the Plan be considered an "eligible individual
account plan" which explicitly provides for the acquisition and holding of
"qualifying employer securities" (as such term is defined in Sections
407(d)(3) and 407(d)(5) of ERISA) and that the Trustee may invest up to
100% of the Waters Stock Fund held by it in Company Shares, to the extent
elected by Participants. Company Shares may be acquired by the Trustee
through purchases on the open market, private purchases, purchases from
the Employer (including purchases from the Sponsoring Employer of treasury
shares or authorized but unissued shares), or otherwise. Except with
respect to Company Shares purchased on the open market, no purchase of
Company Shares shall be made at a price in excess of the closing price on
the New York Stock Exchange for Company Shares on the business day on
which Company Shares were last traded next preceding the date of purchase.
Pending investment in
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Company Shares, Participant Total Accounts invested in the Waters Stock
Fund pursuant to Participants' investment elections may be invested in
cash.
5.3 INVESTMENT ELECTION
(a) At the time an Eligible Employee becomes a Participant in the Plan
and makes an election in accordance with Section 3.1, the Eligible
Employee must choose the percentage in which contributions made by
or on behalf of such Participant are to be invested in each
investment fund. Such percentage may be 0%, or in increments of 1%,
up to a total of 100%. A Participant's investment elections must
total 100%.
(b) During the absence of a valid election by a Participant, the
contributions made by or on behalf of such Participant, and loan
repayments, if any, shall be credited to the fund with the least
investment risk.
5.4 CHANGE IN INVESTMENT ELECTION
A Participant may elect on any business day, effective the next following
payroll period as administratively feasible, or at such other time as
specified by the EBAC, upon telephonic notification to the recordkeeper
appointed by the Employer, or such other form of notification as specified
by the EBAC, subsequent to his or her initial participation in the Plan,
to have future contributions invested in a proportion different from that
previously selected. Such new election shall be made in accordance with
the percentage specifications provided in Section 5.3. For purposes of the
Plan, a "business day" shall be any day the New York Stock Exchange is
open for trading.
5.5 TRANSFER AMONG FUNDS
A Participant may elect upon telephonic notification to the recordkeeper
appointed by the Employer, or such other form of notification as specified
by the EBAC, on any business day, to reallocate, in dollar or 1%
increments, his or her Total Account among the investment funds. The
minimum dollar increment which may be reallocated is $250 or the entire
fund balance, whichever is less, or such limits as determined by the EBAC.
The EBAC may from time to time:
(a) Limit or restrict a Participant's ability to change the allocation
of his or her Total Account among the investment funds and/or
withdraw balances from the various investment funds in order to
conform to the practices, provisions, or restrictions of any
investment media held in any such investment fund; and
(b) Adopt procedures relating to the determination and allocation of the
investment earnings among the Participants' Total Accounts, in order
to facilitate the administration of the Plan on an equitable and
practicable basis.
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5.6 RESPONSIBILITY OF PARTICIPANT IN SELECTING INVESTMENT FUNDS
The selection of an investment fund or funds is the sole responsibility of
each Participant. The Committees, the Trustee, the Investment Manager, the
Employer, or any other fiduciary to the Plan may not advise a Participant
as to the election of any investment fund or the manner in which
contributions shall be invested. The fact that a security is available to
Participants for investment under the Plan shall not be construed as a
recommendation as to the purchase of that security, nor shall the
designation of an investment fund impose any liability on the Committees,
the Trustee, the Investment Manager, the Employer, or any other fiduciary
to the Plan.
5.7 ESTABLISHMENT OF PARTICIPANT ACCOUNTS
(a) The Employer shall establish and maintain for each Participant a
Total Account, consisting of the following accounts, as applicable,
and any such other accounts as may be deemed necessary by the
Committee:
(i) Basic Before-Tax Contribution Account;
(ii) Basic After-Tax Contribution Account;
(iii) Supplemental Before-Tax Contribution Account;
(iv) Supplemental After-Tax Contribution Account;
(v) Employer Matching Contribution Account;
(vi) Participation Plan Account;
(vii) Rollover Account;
(viii) Qualified Matching Contribution Account;
(ix) Qualified Nonelective Contribution Account;
(x) Micromass Employee Pre-Tax Account;
(xi) Micromass Company Matching Account; and
(xii) Micromass Rollover Contribution Account.
(b) Within each of the accounts described in paragraph (a) above,
separate records shall be kept of the portion of the account
credited to each investment fund and the Loan Fund.
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5.8 VALUATION OF PARTICIPANTS' ACCOUNTS
(a) Each Participant's balance in his or her various accounts and
investment funds will be valued individually on each business day by
adjusting shares and/or units within the Participant's account to
reflect the activity related to that account and investment fund,
including, but not necessarily limited to, investment earnings,
losses, expenses, contributions, dividends, distributions,
investment fund transfers, and forfeitures, and then multiplying the
share and/or unit balance by the price at the close of that business
day.
(b) Each Participant's Before-Tax Contributions, loan repayments and
Employer Matching Contributions shall be periodically credited to
the appropriate investment funds in accordance with the
Participant's most recent investment elections under Section 5.3.
(c) Distributions and withdrawals from the Participant's Total Account
shall be debited at a frequency to be determined by the EBAC.
5.9 CORRECTION OF ERROR
The EBAC may adjust the Total Accounts of any or all Participants or
Beneficiaries in order to correct errors or rectify omissions, including,
without limitation, any allocations to a Participant's Total Account made
in excess of the limits specified in Sections 3.5, 12.5, and 12.6, in such
manner as it believes will best result in the equitable and
nondiscriminatory administration of the Plan.
5.10 ALLOCATION SHALL NOT VEST TITLE
The fact that an allocation is made and amounts are credited to the Total
Account of a Participant shall not vest in such Participant any right,
title, or interest in and to any assets except at the time or times and
upon the terms and conditions expressly set forth in this Plan, nor shall
the Trustee be required to segregate physically the assets of the Trust
Fund by reason thereof.
5.11 VOTING OF COMPANY SHARES
Proxies for voting are sent to Participants with both vested and unvested
Company Shares. Participants must indicate their directions to the Trustee
on their proxies. The Trustee shall vote and/or tender Company Shares in
the Waters Stock Fund as directed by the proxies. If the Trustee does not
receive a proxy for a share, it shall vote and/or tender Company shares in
the Waters Stock Fund in its discretion pursuant to the terms of the Trust
Fund and the requirements of ERISA.
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5.12 PAYMENT OF COMPANY SHARES
Amounts payable from the Waters Stock Fund will be paid in cash provided,
however, the Participant may request that all or a portion of his or her
account invested in the Waters Stock Fund be distributed in Company
Shares, and provided further that fractional shares shall be paid in cash.
5.13 RULE 16B-3
With respect to each person subject to Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act"), transactions under this Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of this
Plan or action by a Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the
Committee.
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ARTICLE 6 - VESTING
6.1 VESTING
A Participant's Total Account shall be fully vested at all times.
6.2 FORFEITURES
Effective December 31, 1996, assets which are transferred to the Plan
pursuant to the merger of the TA Instruments, Inc. Savings and Investment
Plan (the "TA Plan") into the Plan and which constitute forfeitures as
defined by and subject to section 7.07 of the TA Plan will be applied to
reduce the contributions of the Employer next payable under the Plan (or
administrative expenses of the Plan).
6.3 MICROMASS EMPLOYEES
All employees of Micromass, Inc. on the date of the merger with Waters
Technologies Corporation became fully vested in their Total Account at the
time of the merger. A prior employee of Micromass, Inc. who was not
employed by Micromass, Inc. on the date of the merger, but who
subsequently becomes an Employee before incurring a "forfeiture break in
service" may have the Plan restore the Participant's nonvested
contributions which were forfeited under the Micromass Plan by repaying
the amount of distribution attributable to Micromass employer
contributions received by the individual at the prior termination of
employment. Such repaid and restored contributions will be allocated to
the Participant's Total Account.
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ARTICLE 7 - WITHDRAWALS AND LOANS DURING EMPLOYMENT
7.1 DISCRETIONARY WITHDRAWALS
(a) An active Participant who has attained the age of 59-1/2 may elect
to withdraw, without a suspension of contributions, all or any part
of his or her Total Account, determined as of the Valuation Date
immediately preceding the date of withdrawal. The amount to be
withdrawn shall be taken from the Participant's Total Account in the
following order, with the full amount available from each account to
be fully withdrawn before any amount is taken from the next account:
(i) from the Participant's Supplemental After-Tax Contribution
Account;
(ii) from the Participant's Basic After-Tax Contribution Account;
(iii) from the Participant's Micromass Rollover Contribution
Account;
(iv) from the Participant's Rollover Account;
(v) from the Participant's Micromass Employee Pre-Tax Account;
(vi) from the Participant's Supplemental Before-Tax Contribution
Account;
(vii) from the Participant's Basic Before-Tax Contribution Account;
(viii) from the Participant's Micromass Company Matching Account;
(ix) from the Participant's Employer Matching Contribution
Account;
(x) from the Participant's Participation Plan Account.
(b) The request for a discretionary withdrawal must be received by the
EBAC in the prescribed form at least 10 days before the Valuation
Date as of which the withdrawal is to be made.
(c) If the amount to be withdrawn is invested in more than one
investment fund, then the percentage of each investment fund to be
withdrawn shall, to the extent practicable be equal to the ratio of
the amount to be withdrawn from the account to the total value of
the account.
7.2 HARDSHIP WITHDRAWALS
(a) A Participant may request a hardship withdrawal, in the form
prescribed by the EBAC, in an amount which does not exceed the
amount required to meet the immediate and heavy financial need
created by the hardship (including any amounts necessary to pay any
federal, state, or local income taxes or penalties reasonably
anticipated to result from the distribution), and provided the
Participant has obtained
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all distributions (other than hardship distributions) and all
nontaxable loans available under all qualified plans maintained by
the Employer and all Affiliated Employers. The amount available for
withdrawal shall be determined as of the Valuation Date immediately
preceding the date of withdrawal. Each hardship withdrawal shall be
subject to the approval of the EBAC.
A withdrawal will be deemed to be made on account of an immediate
and heavy financial need of the Participant if the withdrawal is
for:
(i) expenses for medical care described in Section 213(d) of the
Code (and not covered by insurance) previously incurred by
the Participant, the Participant's Spouse, or any dependent
of the Participant (as defined in Section 152 of the Code),
or necessary for these persons to obtain medical care
described in Section 213(d) of the Code;
(ii) costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(iii) payments necessary to prevent the eviction of the Participant
from a principal residence or foreclosure on the mortgage of
the Participant's principal residence; or
(iv) payment for tuition and related educational fees for the next
twelve months of post-secondary education for the
Participant, or the Participant's Spouse, children or
dependents (as defined in Section 152 of the Code).
(b) In the event a hardship withdrawal is made from the Participant's
Basic Before-Tax Contribution Account and/or Supplemental Before-Tax
Contribution Account, no Before-Tax Contributions or Employer
Matching Contributions shall be made on the Participant's behalf for
a period of at least twelve consecutive calendar months, commencing
with the Valuation Date next following the date of the hardship
withdrawal. The Participant must reinitiate payroll deductions
through the recordkeeper designated by the EBAC following this
twelve month period.
(c) Hardship withdrawals shall be withdrawn from the Participant's Total
Account in the following order with the full amount available from
each account fully withdrawn before any amount is taken from the
next account:
(i) from the Participant's Supplemental After-Tax Contribution
Account;
(ii) from the Participant's Basic After-Tax Contribution Account;
(iii) from the Participant's Micromass Rollover Contribution
Account;
(iv) from the Participant's Rollover Account;
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(v) from the Participant's Micromass Employee Pre-Tax Account;
(vi) from the Participant's Supplemental Before-Tax Contribution
Account, exclusive of earnings allocable thereto after 1988;
and
(vii) from the Participant's Basic Before-Tax Contribution Account,
exclusive of earnings allocable thereto after 1988.
If the amount of the withdrawal is such that only a portion of one
of the above accounts is to be withdrawn, and if the account is
invested in more than one investment fund, then the percentage of
each investment fund to be withdrawn shall, to the extent
practicable, be equal to the ratio of the amount to be withdrawn
from the account to the total value of the account.
7.3 RESTORATION OF WITHDRAWALS
A Participant shall not be permitted to restore to the Plan any amounts
withdrawn under the provision of Sections 7.1 or 7.2.
7.4 LOANS
(a) Any Participant or Beneficiary who is a party in interest (as
defined in Section 3(14) of ERISA) may request a loan in an amount
which does not exceed the lesser of (i), (ii) or (iii) below:
(i) $50,000 reduced by the individual's highest outstanding loan
balance from this Plan and all other qualified plans of the
Employer and all Affiliated Employers during the 12 month
period ending on the date of the loan request.
(ii) 50% of the individual's vested interest in the Trust Fund,
reduced by the outstanding balance of all previous loans made
to the individual from this Plan.
(iii) The sum of the account balances in the individual's Basic
Before-Tax Contribution Account, Supplemental Before-Tax
Contribution Account, Rollover Account, Basic After-Tax
Contribution Account, Supplemental After-Tax Contribution
Account and Participation Plan Account.
(b) A loan may either be a general purpose loan or a housing loan. A
housing loan must be used to purchase or build a primary residence.
(c) Loans shall be borrowed from the individual's Total Account in the
following order with the full amount available from each account to
be fully withdrawn before any amount is taken from the next account:
(i) from his or her Micromass Employee Pre-Tax Account;
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(ii) from his or her Basic Before-Tax Contribution Account;
(iii) from his or her Supplemental Before-Tax Contribution Account;
(iv) from his or her Micromass Rollover Contribution Account;
(v) from his or her Rollover Account;
(vi) from his or her Basic After-Tax Contribution Account;
(vii) from his or her Supplemental After-Tax Contribution Account;
(viii) from his or her Micromass Company Matching Account;
(ix) from his or her Employer Matching Contribution Account; and
(x) from his or her Participation Plan Account.
(d) A general purpose loan request that meets the conditions set forth
in Section 7.5 shall be pre-approved by the EBAC. A housing loan
will be granted by the EBAC if it determines that the loan will not
constitute a taxable distribution from the Plan, the loan is
adequately secured, and the loan applicant has agreed to the loan's
repayment conditions. A loan shall not be granted where the
Committee determines that the requested loan, when considered with
the applicant's other financial commitments, including an existing
Plan loan, may result in the applicant's inability to repay the
requested loan in accordance with the loan's repayment conditions.
(e) A Participant may request a loan in the form prescribed by the EBAC.
If a Participant requests a housing loan, a purchase and sale
agreement or a construction contract and any other documentation the
Committee may request must be submitted to the Committee. Decisions
by the Committee regarding loans shall be final and shall be
communicated to the applicant no more than 30 days from the date the
loan application is received by the EBAC.
7.5 LOAN CONDITIONS
A loan shall be subject to the following conditions:
(a) There shall be no more than two loans outstanding.
(b) The minimum loan shall be $1,000.
(c) The loan shall be based upon the vested balance in the applicant's
Total Account as of the Valuation Date preceding the date the loan
is made.
(d) Each loan shall bear a reasonable rate of interest established in
accordance with the specific written procedures adopted from time to
time by the EBAC. Such rate of
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interest shall provide the Plan with a return commensurate with the
prevailing interest rate charged on similar loans by institutions in
the business of lending money. The interest rate established for
Plan loans shall be reviewed by the EBAC on a quarterly basis and
may be adjusted by the EBAC to assure a reasonable rate of return
and compliance with Department of Labor Regulation 2550.408b-1(e).
(e) Each loan shall be secured by collateral consisting of the
applicant's interest in the Trust Fund, supported by a promissory
note for the amount of the loan, made payable to the Trustee.
(f) Each loan shall be assessed administrative charges and processing
fees established by the EBAC. All administrative charges and
processing fees shall be paid by the Participant.
(g) In applying for a general purpose loan, the applicant shall agree to
repay the loan plus interest over a period not to exceed five years,
as elected by the applicant, unless the loan is to be used for the
purchase of or construction of the applicant's principal place of
residence, in which case the repayment period cannot exceed twenty
years, as elected by the applicant.
The EBAC may, however, on the basis of uniform and nondiscriminatory
standards, establish a maximum repayment period of less than five
years (or less than twenty years in the case of loans used for the
purchase or construction of the applicant's principal place of
residence).
(h) Repayment by Participants actively employed by the Employer during
the repayment period shall be in equal installments by payroll
deduction and shall commence with the first paycheck received by the
Participant following receipt of the loan.
If a Participant is on Leave of Absence and he or she has not
terminated employment, repayments may be made by check. If such
repayments are not made, and if a Participant is on a Leave of
Absence and is receiving Compensation that is less than the amount
due as payments on the Participant's outstanding loan, the EBAC may
permit the Participant to miss these payments for a period not to
exceed twelve months; provided that the repayment period does not
extend beyond the original maximum period permitted under (g).
Interest will be added to the outstanding balance of the loan, and
the repayment amount shall be recalculated (at the original interest
rate) when the Participant resumes active employment in order to
repay such outstanding balance within the loan repayment period.
(i) Full repayment of the entire outstanding balance of a loan may be
made by a cashier's check, bank check, or money order as of any
Valuation Date following the date on which repayment is scheduled to
commence. Partial repayments shall not be permitted.
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If a Participant (other than a Participant on an approved Leave of
Absence) fails to make any loan repayments, the EBAC shall notify
the Participant in writing that the loan will be in default if loan
repayments are not resumed. The EBAC may permit the Participant the
"grace period" allowed under the Code to cure the default in order
to avoid a deemed distribution.
If a loan is in default, the EBAC shall authorize the Trustee to
report a taxable distribution occurring in the year of the default
equal to the remaining balance of the loan, including interest
thereon. The loan shall remain due and payable, and interest
accruing on the loan balance shall be reported as taxable income at
the end of each taxable year of the Participant to the extent the
loan remains in default for that taxable year. If the loan remains
in default on the Participant's Benefit Commencement Date, the EBAC
shall authorize the Trustee to cancel and distribute the promissory
note in accordance with the provisions of Section 8.9.
A loan in default shall be considered a deemed distribution for
federal income purposes and shall not be treated as an eligible
rollover distribution (as described in Section 8.12).
The EBAC may, on the basis of uniform and nondiscriminatory
standards, establish such rules and procedures as it deems necessary
or proper to remedy loans in default.
7.6 APPLICATION OF LOAN TO ACCOUNT BALANCES
(a) Loans shall be withdrawn from the Participant's Total Account in the
following order with the full amount available from each account to
be fully withdrawn before any amount is taken from the next account:
(i) the Basic Before-Tax Contribution Account;
(ii) the Micromass Employee Pre-Tax Account;
(iii) the Supplemental Before-Tax Contribution Account;
(iv) the Rollover Account;
(v) the Micromass Rollover Contribution Account;
(vi) the Basic After-Tax Contribution Account;
(vii) the Supplemental After-Tax Contribution Account;
(viii) the Employer Matching Contribution Account;
(ix) the Micromass Company Matching Account; and
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(x) the Participation Plan Account.
(b) As of each Valuation Date, the balance of the Loan Fund shall be
reduced by the payments made since the previous Valuation Date. Loan
repayments shall be applied in the reverse order designated in
paragraph (a) above.
(c) Loan repayments shall be allocated among the investment funds in the
same percentage as the individual's most recent investment election
in effect under the Plan.
7.7 DISCRETION
In approving or disapproving a withdrawal or loan, the EBAC shall use
objective written criteria and shall exercise only such discretion as is
necessary to determine if such criteria have been met.
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ARTICLE 8 - DISTRIBUTIONS
8.1 DISTRIBUTION AMOUNT
All payments made pursuant to this Article 8 shall be based on the
undistributed vested balance in the Participant's Total Account as of the
Valuation Date immediately preceding the date of payment, plus the vested
portion of the Participant's Employer Matching Contribution, if any, due
under Article 4 on or after such Valuation Date.
8.2 DISTRIBUTION ON RETIREMENT, DISABILITY, OR OTHER TERMINATION OF SERVICE
(a) After retirement at his or her Retirement Date or date of
Disability, or after termination of service for any other reason, a
Participant's entire undistributed vested interest in his or her
Total Account (reduced by any security interest held by the Plan by
reason of a loan outstanding to the Participant) shall be available
to be distributed in a single lump sum cash payment. For those
Participants who have invested part of their Total Account Company
Shares, such participants are entitled to receive the Company Shares
which represent the Participant's investment.
Notwithstanding the foregoing, any prior participant in the
Micromass Plan prior to January 1, 1998 may, after retirement at his
or her Retirement Date or date of Disability, or after termination
of service for any other reason, elect to receive all or a portion
of his or her benefit accrued as of December 31, 1997, in
installments. Such installments may be made annually, quarterly, or
monthly, over a specified period of time not exceeding the
Participant's life expectancy or the joint life expectancy of the
Participant and his or her designated Beneficiary.
Upon the written request of the Participant and in accordance with
Section 8.12, all or part of the vested interest in the
Participant's Total Account (inclusive or exclusive of amounts
contributed on his or her behalf through a payroll deduction
authorization) may be transferred to the trustee of a qualified plan
and exempt trust (under Sections 401(a) and 501(a) of the Code,
respectively) maintained by the Participant's new employer.
(b) A Participant who ceases to be an Employee shall receive payment of
the nonforfeitable portion of the undistributed balance in his or
her Total Account as of one of the following dates:
(i) If the value of the Participant's nonforfeitable interest in
the Trust Fund at his or her Benefit Commencement Date exceeds
$3,500 ($5,000 effective January 1, 1998):
(A) The Valuation Date coincident with or next following the
later of the Participant's (1) Severance from Service
Date or (2) Retirement Date; or
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(B) At the written election of the Participant, the
Valuation Date coincident with or next following his or
her Severance from Service Date, but not later than the
Valuation Date coincident with or next following his or
her Normal Retirement Date.
Distributions shall be made as soon as practicable after the applicable
Valuation Date following the Participant's request. Unless the Participant
elects to defer receipt of his or her benefits, distribution shall be made
no later than 60 days after the close of the Plan Year in which occurs the
latest of the Participant's (A) Normal Retirement Date, (B) 10th
anniversary of Plan participation, or (C) separation from service with the
Employer and all Affiliated Employers. The failure of a Participant to
make proper application for benefits by a date specified in paragraph
(b)(i)(B) above shall be deemed to be an election by the Participant to
defer the payment of any benefit to a date described in the previous
sentence.
(ii) Effective for Plan Years beginning prior to January 1, 1998,
if the value of the Participant's nonforfeitable interest in
the Trust Fund at his or her Benefit Commencement Date does
not exceed $3,500, the Participant will be notified once
following the date he or she ceases to be an Employee, and
will be given 45 days to move his or her interest or an
automatic payout will occur. For Plan Years beginning on or
after January 1, 1998, if the value of the Participant's
nonforfeitable interest in the Trust Fund at his or her
Benefit Commencement Date does not exceed $5,000, the
Participant will be notified one time per quarter following
the date he or she ceases to be an Employee and will be given
45 days to move his or her interest or an automatic payout
will occur.
(c) Notwithstanding the foregoing, for Plan Years prior to January 1,
1999, and for Five Percent Owners distribution of the single lump
sum benefit from the Plan shall be made no later than April 1 of the
calendar year following the calendar year in which the Participant
attains age 70 1/2. For Plan Years beginning January 1, 1999,
distribution of the single lump sum benefit from the Plan for
Participants who are not Five Percent Owners shall be made no later
than April 1 of the calendar year following the calendar year in
which the Participant attains age 70 1/2 or retires, whichever is
later. Notwithstanding the foregoing, Participants who attain age 70
1/2 in 1997 or 1998 may elect to begin distributions at age 70 1/2
or defer distributions until their Retirement Date.
8.3 DISTRIBUTION ON DEATH
Upon the death of any Participant, whether serving as an active Employee
or having terminated service for any reason whatsoever, and prior to
commencement of, or complete distribution of, the Participant's Total
Account, the Participant's nonforfeitable interest in the Trust Fund shall
be distributed to the Participant's designated Beneficiary in accordance
with the following rules:
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(a) If the Participant has a Spouse at his or her date of death, the
Participant's nonforfeitable interest in the Trust Fund shall be
paid to his or her Spouse as designated Beneficiary. The
Participant's nonforfeitable interest in the Trust Fund may be paid
to a designated Beneficiary other than the Participant's Spouse
while the Spouse is living only with the written consent of the
Participant's Spouse. A spousal consent under this Section 8.3 must:
(i) be in writing on a form provided by the EBAC;
(ii) specify the Beneficiary;
(iii) acknowledge the effect of such consent; and
(iv) be witnessed by a notary public or Plan representative.
Any such consent will be valid only with respect to the Spouse who
signs the consent. A spousal consent is not required, however, if
the Participant establishes to the satisfaction of the EBAC that
there is no Spouse; that the Spouse cannot be located; that the
Participant is legally separated or has been abandoned by the Spouse
(within the meaning of local law) and evidenced by a court order; or
that spousal consent is not required under other applicable
regulations
If the Participant does not have a Spouse at his or her date of
death, the Participant's nonforfeitable interest in the Trust Fund
shall be paid to the designated Beneficiary elected by the
Participant.
If a Participant's designated Beneficiary shall have predeceased the
Participant, or if a Beneficiary designation shall have lapsed or
failed for any reason, payment will be made to the Beneficiary
designated under Section 8.7.
(b) If the Participant dies before commencement of his or her
nonforfeitable interest in his or her Total Account, such interest
(reduced by any security interest held by the Plan by reason of a
loan outstanding to the Participant) shall be distributed to the
Participant's designated Beneficiary within 90 days after the date
the Participant's death is reported to the EBAC, or within a
reasonable period of time thereafter, and provided the designated
Beneficiary has filed a proper distribution election form with the
EBAC.
Distribution shall be made in a single lump sum cash payment.
Distribution of the Participant's entire nonforfeitable interest in
his or her Total Account shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's
death, except to the extent an election is made to receive
distributions in accordance with (i) below:
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(i) If distribution is to be made to the Participant's surviving
Spouse, the Spouse may elect, on the appropriate form provided
by the EBAC, to defer distribution until December 31 of the
calendar year in which the deceased Participant would have
attained age 70-1/2. Such election must be made no later than
December 31 of the calendar year immediately following the
calendar year in which the Participant died.
If the Spouse dies before any distribution is made, the provisions
of this paragraph, with the exception of paragraph (b)(i) above,
shall be applied as though the Spouse were the Participant.
(c) If the amount of distribution available under this Section cannot be
determined by the date distribution is required to begin, payment
will be made no later than 60 days after the date the amount of
distribution can be determined.
(d) Effective for Plan Years beginning prior to January 1, 1998, if the
benefit payable to a designated Beneficiary under this Section does
not exceed $3,500, distribution shall be made to the designated
Beneficiary in a single lump sum cash payment as soon as practicable
after the Valuation Date next following the date the Participant's
death is reported to the EBAC. Effective for Plan Years beginning on
or after January 1, 1998, if the benefit payable to a designated
Beneficiary under this Section does not exceed $5,000, distribution
shall be made to the designated Beneficiary in a single lump sum
cash payment as soon as practicable after the Valuation Date next
following the date the Participant's death is reported to the EBAC.
8.4 QUALIFIED DOMESTIC RELATIONS ORDERS
(a) GENERAL RULES. Notwithstanding anything contained in this Plan to the
contrary, in the case of any Qualified Domestic Relations Order whereby a
distribution will be made, a distribution may be made in accordance with this
Section.
(b) DEFINITIONS. The following definitions will be used within this
Section:
(i) "QUALIFIED DOMESTIC RELATIONS ORDER" shall mean a Domestic
Relations Order (as defined in (ii) below) which:
(1) creates or recognizes the existence of an Alternate
Payee's right to, or assigns to an Alternate Payee the
right to, receive all or a portion of the benefits
payable with respect to a Participant under this Plan;
(2) clearly specifies:
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(A) the name and last known mailing address of the
Participant and the name and mailing address of
each Alternate Payee covered by such order;
(B) the amount or percentage of the Participant's
Account Balances to be paid by the Plan to each
such Alternate Payee, or the manner in which such
amount or percentage is to be determined;
(C) the number of payments or period to which such
order applies; and
(D) each Plan to which such order applies; and
(3) does not require:
(A) the Plan to provide any type or form of benefit,
or any option, not otherwise provided under the
Plan except that the order may require payment to
be made prior to the time a Participant has
separated from service;
(B) the payment of benefits to an Alternate Payee
which are required to be paid to another Alternate
Payee under another order previously determined to
be a Qualified Domestic Relations Order.
(ii) "DOMESTIC RELATIONS ORDER" shall mean any judgment, decree, or
order (including approval of a property settlement agreement)
which:
(1) relates to the provisions of child support, alimony
payments, or marital property rights to a Spouse, child,
or other dependent of a Participant; and
(2) is made pursuant to a state domestic relations law,
including a community property law.
(iii) "ALTERNATE PAYEE" shall mean any Spouse, former Spouse, child
or other dependent of a Participant who is recognized by a
Domestic Relations Order as having a right to receive all or a
portion of the benefits payable under the Plan with respect to
such Participant.
(c) DISTRIBUTIONS. Distributions pursuant to a Qualified Domestic
Relations Order shall only be made in the manner, form and time as
the distribution rules set forth in Article 8 of this Plan except
that payment may commence prior to the time a Participant has
separated from service.
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(d) NOTICE. Upon receipt of a Domestic Relations Order, the EBAC shall
promptly notify the Participant and any Alternate Payee of the
receipt of such order and the procedures for determining the
qualified status of such order. After making a determination as to
the qualified status of such order, the EBAC shall notify the
Participant and each Alternate Payee of such determination.
(e) PLAN PROCEDURES. Upon receipt of a Domestic Relations Order, the
EBAC shall give due consideration and review to the order and shall
determine whether or not the order is qualified within nine months
of receipt of such order unless special circumstances require an
extension of time to determine the qualified status of such order.
If such an extension of time is required, written notice of the
extension shall be furnished to the Participant and each Alternate
Payee prior to the expiration of such initial nine month period. The
extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the EBAC expects to
render a final decision which date may not exceed an additional nine
months after the initial period expires unless the qualified status
of such order is being determined by a court of competent
jurisdiction. If a court of competent jurisdiction is determining
the status of an order, in no event shall a final decision be
rendered prior to the time the status of such order is determined to
be non-qualified by the EBAC. The EBAC shall furnish the claimant
with a written notice setting forth (in a manner calculated to be
understood by the claimant) the specific reason or reasons for the
determination of the non-qualified status of the order.
(f) SEGREGATION AND PAYMENT OF BENEFITS. During any period in which the
issue of whether a Domestic Relations Order is qualified is being
determined by the EBAC, by a court of competent jurisdiction, or
otherwise, the EBAC shall order the Trustee to determine the amount
which would have been payable to the Alternate Payee during such
period if the order had been determined to be a Qualified Domestic
Relations Order. The amount shall be segregated and invested in the
safest investment fund. There shall be allocated to said segregated
amount all earnings attributable to such amounts. If within 18
months after receipt of the order, or modification thereof, it is
determined to be a Qualified Domestic Relations Order, the EBAC
shall order the Trustee to pay the amounts plus increments thereto
to the person or persons entitled thereto. If within 18 months after
receipt it is determined that the order is not a Qualified Domestic
Relations Order, or the issue as to whether such order is a
Qualified Domestic Relations Order is not resolved, then the EBAC
shall order the Trustee to pay the amounts plus increments thereto
to the person or persons who would have been entitled to such
amounts if there had been no order. If the determination of the
qualified status of a Domestic Relations Order is made after 18
months after receipt, the order shall only apply to benefits
distributed after the date of such determination.
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8.5 NOTICE TO PAYEES
At the time a Participant or Beneficiary makes application for benefits,
the EBAC shall furnish the individual with a written notice of
distribution. The notice shall include a general description of the terms
and conditions of the benefits available to the individual and the timing
of distribution of such benefits.
If the benefit payable to an individual constitutes an eligible rollover
distribution (within the meaning of Section 402(c)(4) of the Code), the
description of benefits shall be furnished within a reasonable period of
time before the Benefit Commencement Date and shall include an explanation
of:
(a) the rules under which a distribution may be made in a direct
rollover to an eligible retirement plan;
(b) the tax withholding rules for direct rollovers and for the 60-day
rollover option;
(c) the effect of a direct rollover election on subsequent periodic
payments, if any; and
(d) the requirements for favorable tax treatment in accordance with
applicable law.
8.6 INVESTMENT OF DEFERRED DISTRIBUTIONS
Any amounts deferred in accordance with this Article 8 shall be held in
the Participant's Total Account, shall continue to be subject to the
transfer provisions of Section 5.5, and shall continue to share in the
investment experience of the Trust Fund as long as a balance remains.
8.7 DESIGNATION OF BENEFICIARY
(a) Each Participant may designate, on a form provided by the Committee,
a Beneficiary or Beneficiaries to receive any benefits distributable
hereunder after the death of the Participant. Such designation of a
Beneficiary or Beneficiaries shall not be effective for any purpose
unless and until it has been filed by the Participant with the EBAC,
and provided that any such designation shall take effect
prospectively only and without prejudice to any payor or payee on
account of any payments made before receipt of such designation by
the EBAC.
Notwithstanding the above, the following provisions shall apply:
(i) A Participant's Beneficiary shall be his or her surviving
Spouse, if the Participant has a surviving Spouse, unless the
Participant has designated another Beneficiary pursuant to the
spousal consent requirements of Section 8.3 (a).
(ii) A Participant may change his or her designated Beneficiary or
Beneficiaries any number of times, but any such designation
which has the effect of
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naming a person other than the Participant's surviving Spouse,
if any, as sole Beneficiary is subject to the spousal consent
requirements of Section 8.3(a).
(b) In the absence of a Beneficiary designation by the deceased
Participant, or if a designation of Beneficiary lapses or fails for
any reason, distribution of the deceased Participant's
nonforfeitable interest in the Trust Fund shall be distributed to
the surviving Spouse of the Participant or, if there be none
surviving, to the Participant's estate.
(c) An Alternate Payee may designate a Beneficiary or Beneficiaries to
receive any benefits from the Plan after the death of the Alternate
Payee, if no contrary designation is made under the Qualified
Domestic Relations Order. If an Alternate Payee who is eligible to
designate a Beneficiary does so, and if such designation lapses or
fails for any reason, distribution of the deceased Alternate Payee's
nonforfeitable interest in the Trust Fund shall be distributed to
the Alternate Payee's estate.
8.8 PROOF OF DEATH
The EBAC may, as a condition precedent to making payment to any
Beneficiary, require that a death certificate, burial certificate, or
other evidence of death acceptable to it be furnished.
8.9 LOAN AS A DISTRIBUTION
At the time a Participant or Beneficiary becomes eligible to receive a
distribution in accordance with this Article 8, the individual shall be
given the opportunity to repay his or her outstanding loan balance, if
any. Repayment must be made prior to the date of distribution.
If the individual fails to repay fully any outstanding loan balance at the
time a lump sum distribution is made, the individual's loan shall be
deemed canceled and the remaining outstanding loan balance shall be
treated as part of the individual's lump sum distribution.
8.10 BENEFITS PAYABLE ONLY FROM TRUST FUND
All benefits payable under this Plan shall be paid or provided for solely
from the Trust Fund, and neither the Employer nor its shareholders,
directors, employees, or any member of the Committees shall have any
liability or responsibility therefor. Except as otherwise provided by law,
the Employer does not assume any obligations under this Plan except those
specifically stated in the Plan.
8.11 GENERAL DISTRIBUTION REQUIREMENTS
(a) Notwithstanding any other provision of the Plan, a Participant's
Basic and Supplemental Before-Tax Contribution Accounts, Qualified
Matching Contribution
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Account, Participation Plan Account, and Qualified Nonelective
Contribution Account shall not be distributable prior to his or her
separation from service, Disability, or death, except:
(i) in cases of hardship, as provided in Section 8.2;
(ii) upon attainment of age 59-1/2;
(iii) upon termination of the Plan without establishment or
maintenance of a "successor plan" within the meaning of Income
Tax Regulation 1.401(k)1(d)(3);
(iv) upon disposition by the Employer or an Affiliated Employer of
substantially all of the assets used by such corporation in a
trade or business, in the case of a Participant who continues
employment with the corporation acquiring such assets; or
(v) upon disposition by the Employer or an Affiliated Employer of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code), with respect to a
Participant who continues employment with such subsidiary.
No distribution shall be authorized by paragraphs (iii), (iv), or
(v) above, unless the distribution qualifies as a "lump sum
distribution" within the meaning of Section 401(k)(10)(B)(ii) of the
Code.
(b) All distributions made under this Article 8 shall be determined and
made in accordance with the provisions of Section 401(a)(9) of the
Code. The consent of neither the Participant nor the Participant's
Spouse shall be required to the extent a distribution must be made
to satisfy the provisions of Section 401(a)(9) of the Code.
8.12 DIRECT ROLLOVER DISTRIBUTIONS
(a) Notwithstanding any provision of the Plan to the contrary, if any
distribution to a Participant, surviving Spouse or Alternate Payee,
(i) totals $200 or more and (ii) constitutes an "eligible rollover
distribution" (within the meaning of Section 404(c)(4) of the Code),
the individual may elect on a form provided by the Committee to have
all or part of such eligible rollover distribution paid in a direct
rollover to an "eligible retirement plan" (as defined in paragraph
(b) below) selected by the individual.
(b) The term "eligible retirement plan" means:
(i) an individual retirement account described in Section 408(a)
of the Code;
(ii) an individual retirement annuity (other than an endowment
contract) described in Section 408(b) of the Code;
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(iii) with respect to Participants and Alternate Payees, a qualified
defined contribution plan and exempt trust described in
Sections 401(a) and 501(a) of the Code respectively, the terms
of which permit the acceptance of rollover contributions; or
(iv) with respect to Participants and Alternate Payees, an annuity
plan described in Section 403(a) of the Code
(c) If an election is made to have only a part of an eligible rollover
distribution paid in a direct rollover, the amount of the direct
rollover must total $500 or more.
(d) Direct rollovers shall be accomplished in accordance with procedures
established by the EBAC, including, in the case of distributions not
subject to the consent requirements of Section 411(a)(11) of the
Code, procedures for affirmatively waiving the minimum notice period
described in Income Tax Regulation 1.402(c)-2.
The procedures established by the EBAC shall be made in accordance
with the rules set forth in Income Tax Regulation 1.401(a)(31)-1.
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ARTICLE 9 - ADMINISTRATION OF THE PLAN
9.1 THE COMMITTEES
The Plan shall be administered by two Committees, the Employee Benefits
Administration Committee ("EBAC") and the Employee Benefits Investment
Committee ("EBIC") (collectively, the "Committees"), whose members shall
be appointed by the Board of the Sponsoring Employer. Any person,
including, but not limited to, the directors, officers, and Employees of
the Employer, shall be eligible to serve as a Committee member, provided
that no Participant shall participate in any determination by either
Committee specifically relating to the disposition of his or her Total
Account. A Committee member may resign by delivering his or her written
resignation to the Sponsoring Employer, or may be removed by the
Sponsoring Employer by delivery to such member of written notice of
removal, to take effect at a date specified therein, or upon delivery of
such written notice to the Committee if no date is specified.
9.2 ORGANIZATION OF THE COMMITTEES
The Committees shall each have a chairman appointed by the Board of the
Sponsoring Employer and a secretary appointed by the applicable Committee.
Actions of each Committee shall be by a majority vote. The actions of such
majority, expressed either by a vote at a meeting or in writing without a
meeting, shall constitute the actions of the Committee. A certificate of
the secretary of the Committee setting forth the names of the members of
the Committee, or actions taken by the Committee shall be sufficient
evidence at all times as to the persons constituting the Committee, or
such actions taken.
9.3 POWERS, DUTIES, AND RESPONSIBILITIES OF THE COMMITTEES
The Committees are the "named fiduciaries" for purposes of Section
402(a)(1) of ERISA with the authority to control and manage the
administration of the Plan.
(a) EBAC.
The primary responsibility of the EBAC is to administer the Plan for
the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The EBAC shall administer
the Plan in accordance with its terms to the extent consistent with
applicable law, and shall have the power to determine all questions
arising in connection with the administration, interpretation, and
application of the Plan. Any such determination by the EBAC shall be
conclusive and binding upon all affected parties.
The EBAC may correct any defect, supply any information, or
reconcile any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purpose of
the Plan, provided, however, that any interpretation or construction
shall be done in a nondiscriminatory manner and shall be consistent
with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Section 401(a) of the Code and to
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comply with the terms of ERISA. The EBAC shall have all powers
necessary or appropriate to accomplish its duties under the Plan.
The EBAC shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the
following:
(i) To determine all questions relating to the eligibility of an
Employee to participate or remain a Participant hereunder.
(ii) To certify and direct the Trustee with respect to the amount
of benefit to which any Participant or Beneficiary shall be
entitled hereunder.
(iii) To authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the
Trust Fund.
(iv) To maintain all necessary records for the administration of
the Plan.
(v) To interpret the provisions of the Plan and to make and
publish such rules for administration of the Plan as are
consistent with the terms hereof, including, but not limited
to, procedures for presenting claims for benefits under the
Plan, procedures for review of claims which are denied in
whole or in part, and procedures for complying with the
requirements of Section 414(p) of the Code with respect to
Qualified Domestic Relations Orders.
(vi) To adopt any amendment to the Plan, provided that any
amendment that is reasonably expected to have more than a
deminimus financial effect on the Employer shall be approved
by the President or Chairman of the Board of the Company
before such amendment shall become effective.
(vii) To engage such counsel, accountants, and consultants as may
be required to assist in administering the Plan.
(viii) To comply with the reporting and disclosure requirements of
ERISA.
(b) EBIC.
The EBIC shall be charged with the duties of the management of the
assets of the Plan and the funding of the Plan, including, but not
limited to, the following:
(i) To exercise any powers on behalf of the Board under any trust
agreement;
(ii) To engage any Trustee, investment advisor or Investment
Manager or other professional consultant as may be required
in managing the assets of the Plan, and to direct such
individuals as to the investment of all or any portion of the
assets of the Plan;
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(iii) To establish or modify any funding arrangement of the Plan;
(iv) To establish and communicate to the Trustee, or any other
investment advisor, the funding policy of the Plan;
(v) To establish, implement and supervise the continuing
appropriateness of the investment strategy for the Plan, with
the intention that EBIC shall have no fiduciary
responsibility for the management of assets accumulated under
any insurance contract issued in conjunction with the Plan,
unless such assets are subject to management at the
discretion of the Company.
9.4 RECORDS OF THE COMMITTEES
All acts and determinations of each Committee shall be duly recorded by,
or under the supervision of, the secretary of the Committee, and all such
records, together with such other documents as may be necessary for the
administration of the Plan, shall be preserved in the custody of the
secretary.
9.5 PROCEDURE FOR CLAIMING BENEFITS UNDER THE PLAN
(a) Claims for benefits under the Plan made by a Participant or
Beneficiary covered by the Plan must be submitted in writing to the
EBAC. Approved claims will be processed and instructions issued to
the Trustee authorizing payments as claimed.
If a claim is denied in whole or in part, the EBAC shall notify the
claimant of its decision by written notice, in a manner calculated
to be understood by the claimant. The EBAC shall set forth in the
notice:
(i) the specific reason or reasons for the denial of the claim;
(ii) the specific references to the pertinent Plan provisions on
which the denial is based;
(iii) a description of any additional material or information
necessary to perfect the claim, and an explanation of why
such material or information is necessary; and
(iv) an explanation of the Plan's claim review procedure.
Such notification shall be given within 90 days after the claim is
received by the EBAC (or within 180 days, if special circumstances
require an extension of time for processing the claim, and provided
written notice of such extension and circumstances is given to the
claimant within the initial 90 day period). If notification is not
given within such period, the claim will be considered denied as of
the last day of such period and the claimant may request a review of
the claim.
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(b) Upon denial of a claim in whole or in part, a claimant or his or her
duly authorized representative shall have the right to submit a
written request to the EBAC for a full and fair review of the denied
claim, to be permitted to review documents pertinent to the denial,
and to submit issues and comments in writing. A request for review
of a claim must be submitted within 90 days of receipt by the
claimant of written notice of the denial of the claim (or, if
applicable, within 90 days after the date on which such denial is
considered to have occurred).
The EBAC will advise the claimant of the results of the review
within 60 days after receipt of the written request for review (or
within 120 days if special circumstances require an extension of
time for processing the request, such as an election by the EBAC to
hold a hearing, and if written notice of such extension and
circumstances is given to such claimant within the initial 60 day
period). The decision on review shall be in writing. If the decision
on review is not made within such period, the claim will be
considered denied.
The decision of the EBAC by majority vote shall be final and binding
upon any and all claimants, including but not limited to
Participants and their Beneficiaries, and any other individuals
making a claim through or under them.
9.6 UNCLAIMED BENEFITS
If the EBAC is unable after any benefit becomes due hereunder to authorize
payment because the whereabouts of a Participant or Beneficiary cannot be
ascertained, the EBAC shall send written notice of such benefit to the
Participant or Beneficiary at his or her last known mailing address as
shown by the records of the Employer.
If the EBAC, by making a reasonably diligent effort, cannot locate the
Participant or Beneficiary, the amount payable to such Participant or
Beneficiary shall be forfeited at such time as the EBAC shall determine in
its sole discretion (but in all events prior to the time such benefit
would otherwise escheat under any applicable law). The forfeiture shall be
applied to reduce future Employer Contributions.
Should the Participant or Beneficiary subsequently make application for
benefits, the amount so forfeited shall be paid to the Participant or
Beneficiary, and the Employer shall reimburse the Trust Fund for the
payment by making a special contribution for such purpose.
9.7 DISTRIBUTION TO MINORS AND INCAPACITATED PAYEES
In the event a distribution is to be made to a minor or an adult unable to
attend to his or her affairs for any reason (including, but not limited
to, illness, infirmity or mental incapacity), the EBAC may in its
discretion direct that such distribution be made (a) directly to him or
her, or (b) to the parent or other legal guardian, committee or
conservator of such person. Payment to any such person shall fully
discharge the EBAC, Trustee, Employer, and Plan from further liability on
account thereof.
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9.8 EXPENSES
The EBAC shall determine the method by which expenses shall be paid and
the extent to which the Participants and/or the Employer shall pay such
expenses. Members of the Committees may receive compensation for the
performance of their duties under the Plan, as may be agreed upon with the
Sponsoring Employer, provided that no Committee member who is in the
full-time employ of an Employer shall receive any compensation from the
Trust Fund. The Committees shall be reimbursed for all reasonable and
necessary expenses incurred in the performance of their duties under the
Plan.
9.9 INVESTMENT MANAGER
The EBIC may appoint one or more Investment Managers to direct the
investment and management of all or any portion of the assets of the Trust
Fund. The duties of the Investment Manager shall be set forth in the
agreement pursuant to which the Investment Manager is appointed, and shall
designate the portion of the Trust Fund to be managed and controlled by
such Investment Manager. The EBIC may, from time to time, remove any such
Investment Manager, and any such Investment Manager may resign. The EBIC
may, upon removal or resignation of an Investment Manager, provide for the
appointment of a successor Investment Manager.
9.10 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
(a) The named fiduciaries specified herein shall have the authority to
control and manage the operation and administration of the Plan.
Each named fiduciary shall be responsible for the proper exercise of
its own powers, duties, responsibilities, and obligations under the
Plan and the trust agreement. Subject to the provisions of Section
405(a) of ERISA, no named fiduciary is responsible for the acts or
omissions of any other named fiduciary.
Each named fiduciary may allocate its duties among its members or to
individuals who are not named fiduciaries.
Each named fiduciary and every other fiduciary under the Plan shall
exercise its duties and responsibilities for the sole benefit of
Participants and Beneficiaries.
(b) The Employer, acting through its board of directors, shall have the
sole responsibility for making Employer Contributions, and the sole
authority to discontinue the Plan for its Employees.
(c) The Sponsoring Employer shall have the sole authority to appoint and
remove (or designate another to appoint and remove) the Trustee, and
any Investment Manager; to formulate (or designate another to
formulate) the Plan's funding policy; and to amend, in whole or in
part, the trust agreement.
(d) The EBAC shall have the sole responsibility for the administration
of the Plan.
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(e) The Trustee shall have the sole responsibility for managing the
assets held under the trust agreement, except those assets, the
management of which has been assigned to an Investment Manager who
shall be solely responsible for the management of the assets
assigned to it.
9.11 INDEMNIFICATION
The Sponsoring Employer shall indemnify and hold harmless the named
fiduciaries (other than the Trustee) and any other directors, officers, or
employees of any Participating Employer or Affiliated Employer who are or
may be determined to be fiduciaries as that term is defined in ERISA from
and against any and all claims, cost, damages, expenses (including counsel
fees approved by the Sponsoring Employer), and liabilities (including any
amounts paid in settlement with the Sponsoring Employer's approval)
arising from any action or failure to act, except where such claims,
costs, damages, expenses, and liabilities are judicially determined to be
due to the gross negligence or willful misconduct of such person. The
Sponsoring Employer's obligation hereunder shall be offset by any other
source of indemnification, including any insurance policy or policies
maintained by the Employer.
9.12 FIDUCIARY INSURANCE
The Sponsoring Employer may secure to the extent practicable and maintain
in the force and effect insurance on behalf of all persons, including
employees, independent professional advisors and service organizations who
are or may be determined to be fiduciaries, as that term is defined in
ERISA, to cover liabilities or losses occurring by reason of the act or
omission of each such person, unless such act or omission is due to the
gross negligence, willful misconduct or willful breach of fiduciary duty
of such person.
9.13 RELIANCE ON STATEMENTS OF PARTICIPANTS AND BENEFICIARIES
The Employer, any Affiliated Employer, the Committees, and the Trustee(s)
may rely upon any certificate, statement, or other representation made to
them by any Employee, Participant, Spouse, or other Beneficiary with
respect to age, length of service, leave of absence, date of cessation of
employment, marital status, or other fact required to be determined under
any of the provisions of this Plan, and shall not be liable on account of
any payment or the performance of any act in reliance upon any such
certificate, statement, or other representation.
Any such certificate, statement, or other representation made by an
Employee or Participant shall be conclusively binding upon such Employee
or Participant and his or her Spouse or other Beneficiary, and such
Employee, Participant, Spouse, or Beneficiary shall thereafter and forever
be estopped from disputing the truth and correctness of such certificate,
statement, or other representation.
Any such certificate, statement, or other representation made by a
Participant's Spouse or other Beneficiary shall be conclusively binding
upon such Spouse or Beneficiary, and such
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Spouse or Beneficiary shall thereafter and forever be estopped from
disputing the truth and correctness of such certificate, statement, or
other representation.
9.14 DISCHARGE OF LIABILITY
If distribution of all or a portion of a Participant's Total Account is
made to a person reasonably believed by the EBAC or its delegate to
qualify properly as the Participant's Beneficiary (taking into account any
document purporting to be a valid consent of the Participant's Spouse, or
any representation by the Participant that he or she is not married), the
Plan shall have no further liability with respect to the amount
distributed from such Total Account.
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ARTICLE 10 - ADMINISTRATION OF THE TRUST
10.1 TRUST AGREEMENT
Pursuant to the term and provisions of the trust agreement entered into by
the Sponsoring Employer, such Trustee(s) as the Sponsoring Employer may
appoint will receive and invest all contributions made under the Plan to
the Trust Fund and all income derived therefrom. The EBIC may remove a
Trustee and may appoint successor or additional trustees and may divide
their duties and responsibilities as it sees fit.
10.2 EXCLUSIVE BENEFIT OF PARTICIPANTS
All assets of the Trust Fund shall be held for the exclusive purposes of
providing benefits to Participants and Beneficiaries under the Plan and
defraying reasonable expenses of administering the Plan. In no event shall
it be possible at any time prior to the satisfaction of all liabilities,
fixed or contingent, under the Plan for any part of the assets of the
Trust Fund, whether principal or income, to be used for, or diverted to,
purposes other than those stated herein.
10.3 RETURN OF CONTRIBUTIONS
Nothing herein shall prohibit a return to the Employer, within one year
after payment, of excess sums contributed to the Trust Fund as a result of
a mistake of fact.
In the event that the Commissioner of Internal Revenue (or his or her
delegate) determines that the Plan is not initially qualified under the
Code, any Employer contributions made to the Plan shall be returned to the
Employer within one year after the date the initial qualification is
denied, provided application for qualification is made by the time
prescribed by law for filing the Employer's return for the Fiscal Year in
which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
Each Employer contribution is conditioned on the deductibility of the
contribution under Section 404 of the Code, and to the extent such
contribution is disallowed, the contribution shall be returned to the
Employer within one year after the date of disallowance.
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ARTICLE 11 - AMENDMENT, TERMINATION OR MERGER OF THE PLAN
11.1 RIGHT TO AMEND
The Sponsoring Employer reserves the right at any time and from time to
time by action of its Board (or, to the extent permitted by resolution of
such Board, by action of a Committee or a duly authorized officer of the
Sponsoring Employer) to modify or amend the Plan by an instrument in
writing, provided, however, that no such modification or amendment shall
be made which would:
(a) Increase the duties or liabilities of the Committees or Trustee
without their written consent;
(b) Decrease a Participant's account balance or eliminate an optional
form of payment with respect to benefits accrued as of the later of
(i) the date such amendment is adopted, or (ii) the date the
amendment becomes effective;
(c) Cause or permit any portion of the Trust Fund to revert to or become
the property of an Employer, except as required to pay taxes or
administrative expenses, or as provided in Sections 10.3 or 11.2;
(d) Cause any portion of the Trust Fund to be used for purposes other
than the exclusive benefit of Participants and their Beneficiaries;
or
(e) Adversely affect the qualification of the Plan under Section 401(a)
of the Code;
unless such modification or amendment is necessary or appropriate to
enable the Plan or Trust Fund to qualify under Section 401(a) of the Code,
or to retain for the Plan or Trust Fund its qualified status.
11.2 RIGHT TO TERMINATE
The Plan may be terminated at any time by resolution of the Board provided
that no such action shall permit any part of the assets of the Trust Fund,
whether principal or income, to revert to the Employer or to be used for
or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries until all liabilities, fixed or
contingent, under the Plan with respect to such Participants and
Beneficiaries shall have been liquidated in full.
11.3 TERMINATION OF TRUST
(a) If the Plan is terminated, the Total Accounts of all affected
Participants shall be non-forfeitable. The Trust Fund shall be
revalued as of the date the remaining assets are to be distributed,
and the then current value of all Total Accounts, adjusted to
reflect the expenses of termination, to the extent such expenses are
not paid by the Employer, shall be distributed in the manner
described in Article 8 (but without requiring the written consent of
affected Participants).
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If a "successor plan" within the meaning of Income Tax Regulation
1.401(k)-(d)(3) is established or maintained, distribution shall not
be made until a Participant's actual separation from service (within
the meaning of Section 401(k)(2)(B) of the Code).
Until all Total Accounts are fully distributed, any remaining Total
Accounts held in the Trust Fund shall continue to be adjusted in
accordance with the provisions of Article 5, and to reflect the
expenses of termination.
(b) In the event of the partial termination of the Plan, the Total
Accounts of all affected Participants shall be nonforfeitable and
the provisions of paragraph (a) above shall apply with respect to
such Participants' Total Accounts.
11.4 DISCONTINUANCE OF CONTRIBUTIONS
Any Employer may at any time, by resolution of its board of directors,
completely discontinue its participation in and contributions under the
Plan. If such Employer completely discontinues its contributions under the
Plan, either by resolution of its board of directors or for any other
reason, the amounts credited to the Total Accounts of all affected
Participants (other than Participants who, in connection with the
discontinuance of Employer contributions, transfer employment to an
Employer which continues to contribute under the Plan) shall be
nonforfeitable.
11.5 MERGER OF PLANS
Subject to the provisions of this Section, the Plan may be amended to
provide for the merger of the Plan with, or a transfer of all or part of
its assets to, any other qualified plan within the meaning of Section
401(a) of the Code. In the case of any merger or consolidation with, or
transfer of assets or liabilities to, any other plan, each Participant in
this Plan shall be entitled to a benefit immediately after such merger,
consolidation, or transfer equal to or greater than the benefit the
Participant would have received (including optional benefit forms and
benefits that are protected under Section 411(d)(6) of the Code) if the
Plan had been terminated immediately prior to the merger, consolidation,
or transfer.
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ARTICLE 12 - GENERAL PROVISIONS
12.1 FILINGS WITH THE EMPLOYEE BENEFITS ADMINISTRATION COMMITTEE
For all purposes of the Plan, any designation or change of Beneficiary,
distribution election, or other form or document required under the Plan
shall become effective only upon receipt by the EBAC of such designation,
change or election, or other form or document.
12.2 STATEMENTS OF ACCOUNTS
The EBAC shall cause to be furnished to each Participant, no less
frequently than once in each Plan Year, a statement showing the value of
his or her Total Account invested in each investment fund and the vested
portion of his or her Total Account.
12.3 NONALIENABILITY OF BENEFITS
No benefit which shall be payable out of the Trust Fund to any person
(including a Participant or his or her Beneficiary) shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt, either voluntarily or
involuntarily, to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be void; and no such benefit shall in
any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be
subject to attachment or legal process for or against such person, and the
same shall not be recognized by the Trustee, except to such extent as may
be required by law.
In the event a Participant's benefits are garnished or attached by order
of any court, the EBAC may bring an action for a declaratory judgment in a
court of competent jurisdiction to determine the proper recipient of the
benefits to be paid by the Plan. During the pendency of said action, any
benefits that become payable shall be paid into the court as they become
payable, to be distributed by the court to the recipient it deems proper
at the close of said action.
Notwithstanding the foregoing, the EBAC shall recognize and honor any
judgment, decree, or order entered under a state's domestic relations law
which the Committee determines to be a Qualified Domestic Relations Order
in accordance with the procedures and requirements of Section 8.4.
12.4 NO CONTRACT OF EMPLOYMENT
All benefits created by the Plan constitute a voluntary act on the part of
the Employer and are not to be deemed or construed to be a part of any
contract of employment, or as giving any person any enforceable right
against the Employer, except as provided by ERISA. The Trust Fund shall be
the sole source of all benefits provided for in the Plan. The Employer
does not guarantee the Trust Fund against any loss or depreciation in
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value. Neither the action of the Employer in establishing the Plan nor any
action hereafter taken by the Employer or by any committees in connection
with the Plan shall be construed as giving to any Participant a right to
be retained in the service of the Employer or any right or claim to any
benefit under the Plan except as expressly provided in the Plan.
12.5 LIMITATIONS ON CONTRIBUTIONS
(a) The maximum annual addition that may be contributed or allocated to
a Participant's accounts under this Plan, all other defined
contribution plans, all individual medical accounts (as defined in
Section 415(1)(2) of the Code) which are part of a defined benefit
plan, and all separate accounts for post-retirement medical benefits
of key employees (as defined in Section 419A(d)(3) of the Code)
under a welfare benefit and (as defined in Section 419(e) of the
Code), maintained by all Employers and Affiliated Employers for any
Limitation Year shall not exceed the lesser of (i) or (ii) below:
(i) $30,000 (or, if greater, 25% of the defined benefit dollar
limitation in effect under Section, 415 (b)(1)(A) of the Code
for the Limitation Year), or
(ii) 25% of the Participant's "Section 415 Compensation" (as
defined in paragraph (b) below) for such Limitation Year.
(b) The term "Section 415 Compensation" means wages, salaries, and fees
for professional services and other amounts received from the
Employer and all Affiliated Employers during the Limitation Year
(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, to the extent such amounts are includable in gross
income, including, but not limited to, overtime pay, tips, bonuses,
commissions to paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums,
fringe benefits, reimbursements, and expense allowances, and
excluding the following:
(i) effective only for Plan Years prior to January 1, 1998,
amounts contributed by the Employer or Affiliated Employer on
behalf of the Employee pursuant to a salary deferral
agreement under this Plan or any other cash or deferred
arrangement described in Section 401(k) of the Code, to any
salary reduction agreement pursuant to a cafeteria plan
established under Section 125 of the Code, or to any other
plan of deferred compensation, and which are not includable
in the Employee's gross income for the taxable year in which
contributed, or any distributions from a plan of deferred
compensation.
(ii) 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;
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(iii) amounts realized with respect to the sale, exchange, or other
disposition of stock acquired under a qualified stock option;
and
(iv) other amounts which receive 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 excludable from the Employee's gross
income).
For purposes of applying the limitations of this Section, the term
"Section 4l5 Compensation" means the compensation actually paid or
includable in the Employee's gross income for the Limitation Year.
(c) For purposes of the Plan, an annual addition consists of the amounts
allocated to a Participant's accounts during the Limitation Year
that constitute:
(i) Employer contributions and forfeitures allocable to a
Participant under all plans (or portions thereof) maintained
by the Employer subject to Section 4l5(c) of the Code;
(ii) the Participant's employee contributions under all such plans
(or portions thereof); and
(iii) amounts allocated to an individual medical account (as
defined in Section 415(l)(2) of the Code) under a pension or
annuity plan maintained by the Employer, or amounts derived
from contributions paid or accrued 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 419(A)(d)(3) of the Code)
under a welfare benefit fund (as defined in Section 419(e) of
the Code) maintained by the Employer.
Any excess amount applied under paragraph (d) below in the
Limitation Year to reduce Employer Contributions shall be considered
annual additions for such Limitation Year.
A Participant's employee contributions as described in clause (ii)
above shall be determined without regard to any rollover
contributions, any employee contributions transferred directly from
another plan qualified under Section 401(a) of the Code, any loan
repayments, or any prior distributions repaid upon the exercise of
buy-back rights.
Employer and employee contributions taken into account as annual
additions shall include "excess contributions" as defined in Section
401(k)(8)(B) of the Code, "excess aggregate contributions" as
defined in Section 401(m)(6)(B) of the Code, and "excess deferrals"
as defined in Section 402(g) of the Code, regardless of whether such
amounts are distributed, recharacterized or forfeited, unless such
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amounts constitute "excess deferrals" that were distributed to the
Participant no later than April 15 of the taxable year following the
taxable year of the Participant in which such deferrals were made.
(d) In the event a Participant's total annual additions for a Limitation
Year exceed the limitations of paragraph (a) above, Employer
Contributions otherwise required with respect to such Participants
under Article 4 shall be reduced to the extent necessary to comply
with the limitations of paragraph (a) above. If such reduction is
not effected in time to prevent such allocations for any Limitation
Year from exceeding the limitations of paragraph (a), such excess
amount shall, if permissible under Income Tax Regulation
1.415-6(b)(6)(iv), be distributed to the Participant. If such excess
amount is not distributed, it shall be used to reduce Employer
Contributions for such Participant in the next Limitation Year, and
each succeeding Limitation Year, if necessary, provided that if the
Participant is not covered by the Plan at the end of the current
Limitation Year, the portion exceeding the limitation set forth in
paragraph (a) above shall be held unallocated in a suspense account
for such Limitation Year, and shall be reallocated in the next
Limitation Year to the accounts of other Participants to the extent
such allocations do not exceed the limitations of paragraph (a)
above.
All amounts held in the suspense account shall be used to reduce
future Employer Contributions for all remaining Participants in
succeeding Limitation Years (subject to the limitations of paragraph
(a) above) before any Employer Matching Contributions, or Before-Tax
Contributions, which would constitute annual additions may be made
to the Plan for the Limitation Year.
If a suspense account is in existence at any time during a
Limitation Year, it will participate in the allocation of the Trust
Fund's investment gains or losses
Upon termination of the Plan, any unallocated amounts remaining in a
suspense account shall be allocated to the extent possible under
this Section for the Limitation Year of termination. Any amount
remaining in such suspense account upon termination of the Plan
shall be returned to the Employer, notwithstanding any other
provision of the Plan or trust agreement.
(e) For Plan Years commencing prior to January 1, 2000, if the Employer
maintains, or at any time maintained a qualified defined benefit
plan covering any Participant in this Plan, the sum of the
Participant's defined benefit plan fraction and defined contribution
plan fraction (as described below) for any Limitation Year shall not
exceed 1.0.
The DEFINED BENEFIT PLAN FRACTION for any Limitation Year is a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator
of which is the lesser of 1.25 times the dollar limit determined
under Sections 415(b) and 415(d) of the Code for the Limitation
Year, or 1.4 times
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100% of the Participant's highest average annual Section 415
Compensation (including any adjustments under Section 415(b) of the
Code) for any three consecutive years.
The DEFINED CONTRIBUTION PLAN FRACTION for any Limitation Year is a
fraction, the numerator of which is the sum of the annual additions
to the Participant's accounts under all 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 of service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The aggregate amount in any Limitation
Year is the lesser of 1.25 times the dollar limitation determined
under Sections 415(b) and 415(d) of the Code in effect under Section
415(c)(1)(A) of the Code, or 35% of the Participant's Section 415
Compensation for such Limitation Year.
For purposes of calculating the numerator in the defined
contribution plan fraction, a Participant's after payroll deduction
contributions made before 1987, if any, shall be taken into account
to the extent such contributions exceed the lesser of:
(i) 6% of the Participant's Section 415 Compensation for the
Limitation Year, or
(ii) 50% of the amount of such payroll deduction contributions for
the Limitation Year.
Any adjustment necessary to comply with the limitations of this
paragraph (e) shall be made in the Participant's benefit payable
under the relevant defined benefit plan; but under no circumstances
may the accrued benefit of a Participant in a defined benefit plan
decrease as a result of a Plan amendment to change the combined plan
limits.
(f) For purposes of this Section, the Employer and all Affiliated
Employers shall be considered one employer, and the limitations
shall be applicable to the total benefits received from the Employer
and all Affiliated Employers. Furthermore, in determining who is an
Affiliated Employer for this purpose, the phrase "more than 50%"
shall be substituted for "at least 80%" each place it appears in
Section 1563(a)(i) of the Code.
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12.6 NONDISCRIMINATION LIMITATIONS ON PARTICIPANT CONTRIBUTIONS AND EMPLOYER
MATCHING CONTRIBUTIONS
(a) For purposes of this Section, the following terms shall have the
meaning indicated below:
(i) "ACTUAL DEFERRAL PERCENTAGE" means the average (expressed as
a percentage) of the deferral percentages of Eligible
Employees in a group. An Eligible Employee's deferral
percentage is equal to the ratio (expressed as a percentage)
of the Employee's Before-Tax Contributions (including
Before-Tax Contributions returned to the Employee pursuant to
Section 3.5(c) but excluding Before-Tax Contributions
returned to the Employee pursuant to Section 12.5(d)) and any
Qualified Matching Contributions or Qualified Nonelective
Contributions contributed to the Trust Fund in the Plan Year
to the Eligible Employee's Compensation for that Plan Year.
The individual ratios and the percentages for any groups of
individuals shall be calculated to the nearest one-hundredth
of one percent (.01%).
(ii) "ACTUAL CONTRIBUTION PERCENTAGE" means the average (expressed
as a percentage) of the contribution percentages of Eligible
Employees in a group. An Eligible Employee's contribution
percentage is equal to the ratio of the Employer Matching
Contributions (other than Qualified Matching Contributions)
and any Qualified Nonelective Contributions contributed to
the Trust Fund in the Plan Year to the Eligible Employee's
Compensation for that Plan Year. The individual ratios and
the percentages for any groups of individuals shall be
calculated to the nearest one-hundredth of one percent
(.01%).
(iii) "ELIGIBLE EMPLOYEE" means any Employee of the Employer who,
during the Plan Year, is eligible to make Before-Tax
Contributions in accordance with the provision of Section
3.1, or who is eligible to receive Employer Matching
Contributions in accordance with the provisions of Section
4.1. An individual shall be treated as an Eligible Employee
for a Plan Year if he or she so qualifies for any part of the
Plan Year, and whether or not his or her right to share in
Before-Tax Contributions has been suspended under Section
7.2. For Plan Years beginning on January 1, 1999, Employees
with less than one year of Service shall be disregarded.
(iv) "COMPENSATION" means the Employee's Section 415 Compensation
(as defined in Section 12.5(b)) but not in excess of the
limit under Section 401(a)(17) of the Code, and including any
amounts contributed by the Employer or an Affiliated Employer
on behalf of the Employee pursuant to a salary deferral
agreement under this Plan (or any other cash or deferred
arrangement described in Section 401(k) of the Code) or a
salary reduction
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agreement pursuant to a cafeteria plan established under
Section 125 of the Code, or toward the purchase of an annuity
described in Section 403(b) of the Code.
Notwithstanding the foregoing, in determining the amount of
Compensation to be taken into account for purposes of this
Section, the Employer may limit the period used to determine
an Employee's Compensation for the Plan Year to the portion
of the Plan Year in which the Employee was an Eligible
Employee (as defined in subparagraph (iii) above), provided
that this limit is applied uniformly to all Eligible
Employees with respect to such Plan Year.
(v) "QUALIFIED MATCHING CONTRIBUTIONS" means Employer Matching
Contributions that are subject to the distribution and
nonforfeitability requirements under Section 401(k) of the
Code when made and that are taken into account in determining
the Actual Deferral Percentage of Eligible Employees who are
Nonhighly Compensated Employees in the Plan Year being
tested.
(vi) "QUALIFIED NONELECTIVE CONTRIBUTIONS" means the special
contributions made by the Employer to the Plan that are
subject to the distribution and nonforfeitability
requirements under Section 401(k) of the Code when made and
that are designated by the Employer to be taken into account
in determining the Actual Deferral Percentage and/or Actual
Contribution Percentage, whichever is applicable, of Eligible
Employees who are Nonhighly Compensated Employees in the Plan
Year being tested.
(b) For Plan Years commencing prior to January 1, 1997, for purposes of
determining the Actual Deferral Percentage and Actual Contribution
Percentage of an Eligible Employee who is a Five Percent Owner or
one of the ten most Highly Compensated Employees, and, for purposes
of his or her excess contributions and excess aggregate
contributions, if any, the Compensation, Before-Tax Contributions
and Employer Matching Contributions of such Employee shall include
the Compensation, Employee Contributions, and Employer Matching
Contributions for the Plan Year of his or her family members. For
this purpose, the term "family member" means such Employee's Spouse
and lineal ascendants and descendants, and the spouses of such
lineal ascendants and descendants. Family members shall be
disregarded in determining the Actual Deferral Percentage and Actual
Contribution Percentage for Eligible Employees who are not Five
Percent Owners or among the ten most Highly Compensated Employees.
(c) If more than one plan providing for a cash or deferred arrangement,
or for matching contributions, or employee contributions (within the
meaning of Sections 401(k) and 401(m) of the Code) is maintained by
the Employer or an Affiliated Employer, then the individual ratios
of any Highly Compensated Employee who participates in more than one
such plan or arrangement shall, for purposes of determining the
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individual's Actual Contribution Percentage and Actual Deferral
Percentage, be determined as if all such arrangements were a single
plan or arrangement. If a Highly Compensated Employee participates
in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, plans that are mandatorily
disaggregated pursuant to regulations under Section 401(k) of the
Code shall not be aggregated for purposes of this paragraph but
shall be treated as separate plans.
(d) In the event that this Plan satisfies the requirements of Sections
401(a)(4) and 410(b) of the Code only if aggregated with one or more
other plans, and all such plans have the same Plan Year, then this
Section shall be applied by determining the Actual Deferral
Percentage, and Actual Contribution Percentage of Eligible Employees
as if all such plans were a single plan.
(e) In accordance with the nondiscrimination requirements of Section
401(k) of the Code, the EBAC shall establish a Compensation Deferral
Limit with respect to Before-Tax Contributions credited to a
Participant's Total Account during a Plan Year and may adjust such
deferral limit (in accordance with paragraph (g)(i) below) from time
to time during the Plan Year in order to satisfy one of the
following tests:
(i) The Actual Deferral Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the
current Plan Year shall not exceed the applicable Actual
Deferral Percentage of the group of Eligible Employees who
are Nonhighly Compensated Employees multiplied by 1.25.
(ii) The Actual Deferral Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the
current Plan Year shall not exceed the applicable Actual
Deferral Percentage of the group of Eligible Employees who
are Nonhighly Compensated Employees multiplied by two,
provided that the Actual Deferral Percentage for such Highly
Compensated Employees is not more than two percentage points
higher than the applicable Actual Deferral Percentage for
such Nonhighly Compensated Employees.
(f) In accordance with the nondiscrimination requirements of Section
401(m) of the Code, the EBAC shall establish a Contribution
Percentage Limit with respect to Employer Matching Contributions
credited to a Participant's Total Account during each Plan Year and
may adjust such percentage limit (in accordance with paragraph
(g)(i) below) from time to time during the Plan Year in order to
satisfy one of the following tests:
(i) The Actual Contribution Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the
current Plan Year shall not exceed the applicable Actual
Contribution Percentage of the group of
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Eligible Employees who are Nonhighly Compensated Employees
multiplied by 1.25.
(ii) The Actual Contribution Percentage of the group of Eligible
Employees who are Highly Compensated Employees for the
current Plan Year shall not exceed the applicable Actual
Contribution Percentage of the group of Eligible Employees
who are Nonhighly Compensated Employees, multiplied by two,
provided that the Actual Contribution Percentage for such
Highly Compensated Employees is not more than two percentage
points higher than the applicable Actual Contribution
Percentage for such Nonhighly Compensated Employees.
(g) The EBAC may take the following actions to assure compliance with
the nondiscrimination limitations of Section 401(k) and/or Section
401(m) of the Code:
(i) If the average percentages described in paragraphs (e) and/or
(f) above applicable to the group of Eligible Employees who
are Highly Compensated Employees are expected to exceed the
maximum average percentage necessary to comply with the rules
described in said paragraphs, the EBAC may direct that the
Actual Deferral Percentage and/or the Actual Contribution
Percentage, as the case may be, for each member of such group
of Highly Compensated Employees be reduced, prospectively
only.
(ii) If the average percentages described in paragraphs (e) and/or
(f) above applicable to the group of Eligible Employees who
are Highly Compensated Employees exceed the maximum average
percentage necessary to comply with the rules described in
said paragraphs, the EBAC shall direct the successive
reductions of the highest individual Actual Deferral
Percentage and/or Actual Contribution Percentage attributable
to one or more members of such group of Highly Compensated
Employees beginning with the Highly Compensated Employee
whose Actual Deferral Percentage or Actual Contribution
Percentage, as the case may be, is the highest or for Plan
Years commencing on or after January 1, 1997, beginning with
the Highly Compensated Employee with the highest dollar
amounts, until the average percentage for such group of
Highly Compensated Employees does not exceed the applicable
limit.
For Plan Years commencing prior to January 1, 1997, the reduction of
a Highly Compensated Employee's Actual Deferral Percentage and/or
Actual Contribution Percentage shall be made in accordance with the
following procedure:
FIRST, if a Highly Compensated Employee's Actual Deferral Percentage
for the Plan Year exceeds the limit described in paragraph (e)
above, his or her Actual Deferral Percentage shall be reduced by
returning to him or her all (or a portion) of the amount contributed
for such Plan Year in excess of such limit.
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Any amounts to be returned shall first be reduced, but not below
zero, by any excess deferrals contributed for the Plan Year and
previously returned to the Employee in the taxable year ending with
or within that Plan Year pursuant to Section 3.5.
The reduction of excess contributions shall be made by first
reducing the Participant's Supplemental Before-Tax Contributions
and, if that is insufficient, by reducing his or her Basic
Before-Tax Contributions.
SECOND, in the case of a Participant to whom Basic Before-Tax
Contributions are returned, the amount of his or her Employer
Matching Contributions shall be reduced by distributing to the
Participant his or her vested Employer Matching Contributions that
were attributable to such Basic Before-Tax Contribution.
THIRD, if a Highly Compensated Employee's Actual Contribution
Percentage for the Plan Year exceeds the limit described in
paragraph (f) above, his or her Actual Contribution Percentage shall
be reduced by returning to him or her the amount contributed for
such Plan Year in excess of such limit.
The reduction of excess aggregate contributions shall be made by
reducing the amount of the Participant's Employer Matching
Contributions.
For Plan Years commencing on or after January 1, 1997, the reduction
of a Highly Compensated Employee's contributions shall be made in
accordance with the Code.
Contributions which are returned, or distributed shall be adjusted
for allocable gains and losses for the Plan Year with respect to
which the contributions were made in accordance with the method
described below for such contributions.
ALLOCATING INCOME TO EXCESS CONTRIBUTIONS. Excess contributions
shall be adjusted for allocable gains or losses for the Plan Year in
which such excess contributions arose by multiplying the gains or
losses credited to the Participant's Employer Matching Contribution
Account (and, if applicable, his or her Qualified Matching
Contribution Account and Qualified Nonelective Contribution Account)
for such Plan Year by a fraction, the numerator of which is the
Participant's excess contributions for the Plan Year, and the
denominator of which is the sum of (i) the balance in the
Participant's Employer Matching Contribution Account (and, if
applicable, his or her Qualified Matching Contribution Account and
Qualified Nonelective Contribution Account) as of the beginning of
the Plan Year, and (ii) the amount of Employer Matching
Contributions (and, if applicable Qualified Matching Contributions
and Qualified Nonelective Contributions) credited to the
Participant's Total Account for the Plan Year.
ALLOCATING INCOME TO EXCESS AGGREGATE CONTRIBUTIONS. Excess
aggregate contributions shall be adjusted for allocable gains or
losses for the Plan Year in which such excess aggregate
contributions arose by multiplying the gains or losses credited to
the Participant's Employer Matching Contribution Account (and, if
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applicable, his or her Qualified Nonelective Contribution Account)
for such Plan Year by a fraction, the numerator of which is the
Participant's excess aggregate contributions for the Plan Year, and
the denominator of which is the sum of (i) the balance in the
Participant's Employer Matching Contribution Account (and, if
applicable, his or her Qualified Nonelective Contribution Account)
as of the beginning of the Plan Year, and (ii) the amount of
Employer Matching Contributions (and, if applicable, Qualified
Nonelective Contributions) credited to the Participant's Total
Account for the Plan Year.
Excess contributions and excess aggregate contributions (and income
allowable thereto) shall be returned, distributed, or, if
applicable, forfeited, not later than the last day of the Plan Year
following the close of the Plan Year in which such excess arose.
Excess contributions shall be allocated to Participants who are
subject to the family aggregation rules of Section 413(q)(6) of the
Code in the manner prescribed by applicable regulations.
(h) In addition to the actions described in paragraph (g) above, the
Employer may take the following actions to assure compliance with
the nondiscrimination limitations of Section 401(k) and/or Section
401(m) of the Code:
(i) QUALIFIED MATCHING CONTRIBUTIONS. If for a Plan Year the
average percentage described in paragraph (e) above,
applicable to the group of Eligible Employees who are Highly
Compensated Employees exceeds the maximum average percentage
necessary to comply with the rules described in said
paragraph, the Employer may, in its sole discretion, make a
Qualified Matching Contribution (as defined in paragraph
(a)(v) above) to the Qualified Matching Contribution Accounts
of one or more members of the group of Participants who are
Nonhighly Compensated Employees and who made Basic Before-Tax
Contributions during such Plan Year (beginning with the
Participant who has the smallest Compensation for the Plan
Year) so that the average percentage for the group of Highly
Compensated Employees does not exceed the applicable limit.
Qualified Matching Contributions shall be allocated to each
eligible Participant in the same proportion as the
Participant's Basic Before-Tax Contributions for the Plan
Year bears to the Basic Before-Tax Contributions of all
eligible Participants. Amounts credited to the Nonhighly
Compensated Employee's Qualified Matching Contribution
Account shall be fully and immediately vested when made and
shall be subject to the restrictions on distributions
described in Section 8.11(a).
(ii) QUALIFIED NONELECTIVE CONTRIBUTIONS. If for a Plan Year the
average percentages described in paragraphs (e) and/or (f)
above, applicable to the group of Eligible Employees who are
Highly Compensated Employees exceeds the maximum average
percentage necessary to comply with the rules described in
said paragraphs, the Employer may, in its sole discretion,
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make a Qualified Nonelective Contribution (as defined in
paragraph (a)(vi) above) to the Qualified Nonelective
Contribution Accounts of one or more members of the group of
Participants who are Nonhighly Compensated Employees during
such Plan Year (beginning with the Participant who has the
smallest Compensation for the Plan Year) so that the average
percentage for the group of Highly Compensated Employees does
not exceed the applicable limit. Qualified Nonelective
Contributions shall be allocated to each eligible Participant
in the same proportion as the Participant's Compensation for
the Plan Year bears to the total Compensation for the Plan
Year of all eligible Participants. Amounts credited to a
Participant's Qualified Nonelective Contribution Account
shall be fully and immediately vested when made and shall be
subject to the restrictions on distributions described in
Section 8.11(a). Qualified Nonelective Contributions used to
satisfy the Actual Deferral Percentage Test may not be used
to satisfy the Actual Contribution Percentage Test.
Qualified Matching Contributions or Qualified Nonelective
Contributions shall not be treated as Before-Tax Contributions for
purposes of satisfying the Actual Deferral Percentage test described
in paragraph (e) above, unless such contributions satisfy the
requirements of Income Tax Regulation 1.401(k)-l(b)(5) which are
incorporated herein by this reference. Qualified Nonelective
Contributions shall not be treated as Employer Matching
Contributions for purposes of satisfying the Actual Contribution
Percentage test described in paragraph (f) above, unless such
contributions satisfy the requirements of Income Tax Regulation
1.401(m)-l(b)(5) which are incorporated herein by this reference.
If more than one plan providing for a cash or deferred arrangement,
or for matching contributions, or employee contributions is
maintained by the Employer or an Affiliated Employer, and such plans
are aggregated for purposes of determining the Actual Deferral
Percentages and Actual Contribution Percentages of Eligible
Employees for a Plan Year, Qualified Matching Contributions and
Qualified Nonelective Contributions shall not be taken into account
for purposes of satisfying the Actual Deferral Percentage test or
the Actual Contribution Percentage test unless all such plans have
the same Plan Year.
Qualified Matching Contributions and Qualified Nonelective
Contributions shall be paid to the Trust Fund not later than the
last day of the Plan Year following the Plan Year to which such
contributions relate and shall be made in accordance with Income Tax
Regulations prescribed under Section 401(k) and Section 401(m) of
the Code (including regulations for satisfying the provisions of
Section 401(a)(4) and Section 410(b) of the Code).
(i) For purposes of this Section, the "aggregate limit" for any
Plan Year shall mean a percentage equal to the greater of (i)
or (ii) below:
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(i) The percentage equal to the sum of (A) and (B) below:
(A) 125% of the greater of:
(1) The applicable Actual Deferral Percentage
for Eligible Employees who are Nonhighly
Compensated Employees, or
(2) The applicable Actual Contribution
Percentage of such Eligible Employees, and
(B) 2% plus the lesser of (A)(1) or (A)(2) above. In
no event, however, shall this percentage exceed
200% of the lesser of (A)(1) or (A)(2) above.
(ii) The percentage equal to the sum of (A) and (B) below:
(A) 125% of the lesser of:
(1) The applicable Actual Deferral Percentage
for Eligible Employees who are Nonhighly
Compensated Employees, or
(2) The applicable Actual Contribution
Percentage of such Eligible Employees, and
(B) 2% of the greater of (A)(1) or (A)(2) above. In no
event, however, shall this percentage exceed 200%
of the greater of (A)(1) or (A)(2) above.
The "aggregate limit" shall be calculated to the nearest
one-hundredth of one percent (.01%).
The "aggregate limit" shall be applied to reduce allocations
otherwise permissible for a Plan Year if after application of
paragraph (g) above (and, if applicable paragraph (h) above), the
sum of the average percentages described in paragraphs (e) and (f)
above applicable to the group of Eligible Employees who are Highly
Compensated Employees exceeds the "aggregate limit" for such Plan
Year.
The "aggregate limit" shall not apply to reduce allocations
otherwise permissible for a Plan Year unless the Actual Deferral
Percentage and the Actual Contribution Percentage for Eligible
Employees who are Highly Compensated Employees for the Plan Year
each exceed 125% of the corresponding applicable percentages
determined for Eligible Employees who are Nonhighly Compensated
Employees.
The reduction of the Actual Contribution Percentage and/or Actual
Deferral Percentage of the group of Eligible Employees who are
Highly Compensated
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Employees shall be applied to those Highly Compensated Employees who
are eligible to make Before-Tax Contributions or are eligible to
receive Employer Matching Contributions. Reductions shall be made in
the manner described in paragraph (g) above to the extent necessary
to comply with the aggregate limit, except that the reductions shall
be applied first to reduce Actual Contribution Percentages and then,
if necessary, to reduce Actual Deferral Percentages.
12.7 TOP HEAVY PROVISIONS
(a) For purposes of this Section, the following terms shall have the
meanings indicated below:
(i) "KEY EMPLOYEE" means any employee or former employee
(including any deceased employee) of the Employer or an
Affiliated Employer who at any time during the Plan Year
containing the Determination Date for the Plan Year in
question, or any of the four preceding Plan Years is:
(A) An officer of the Employer or an Affiliated Employer, if
such individual received Annual Compensation (as defined
in subparagraph (ii) below) of more than 50% of the
dollar limitation in effect under Section 415(b)(1)(A)
of the Code. No more than 50 employees (or, if fewer,
the greater of 3 employees or 10% of the employees)
shall be treated as officers (exclusive of employees
described in Section 414(q)(8) of the Code).
(B) One of the 10 employees owning or considered as owning
(within the meaning of Section 416(i) of the Code) both
more than a 1/2 percent ownership interest and one of
the ten largest ownership interests in the Employer or
an Affiliated Employer, if such employee's Annual
Compensation (as defined in subparagraph (ii) below)
exceeds 100% of the maximum annual limit under Section
415(c)(1)(A) of the Code.
(C) A 5% owner of the Employer or an Affiliated Employer. A
"5% owner" means a person owning (or considered as
owning, within the meaning of Section 416(i) of the
Code) more than 5% of the outstanding stock of the
Employer or an Affiliated Employer, or stock possessing
more than 5% of the total combined voting power of all
stock of the Employer or Affiliated Employer (or having
more than 5% of the capital or profits interest in any
Employer or Affiliated Employer that is not a
corporation determined under similar principles).
(D) A 1% owner of the Employer or an Affiliated Employer
having Annual Compensation (as defined in subparagraph
(ii) below) of more than $150,000. A "1% owner" means
any person who would
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be described in paragraph (a)(1)(C) above if " 1% " were
substituted for "5% " in each place where it appears in
paragraph (a)(1)(C).
A Key Employee shall be determined in accordance with the
provisions of Section 416(i) of the Code.
(ii) "ANNUAL COMPENSATION" means Section 415 Compensation (as
defined in Section 12.5(b)) but including any amounts
contributed on behalf of the Employee by an Employer or an
Affiliated Employer pursuant to a salary deferral agreement
under the Plan (or any other cash or deferred arrangement
described in Section 401(k) of the Code) or a salary reduction
agreement pursuant to a cafeteria plan established under
Section 125 of the Code, or toward the purchase of an annuity
described in Section 403(b) of the Code.
(iii) "DETERMINATION DATE" means the last day of the preceding Plan
Year, except that for the first Plan Year the Determination
Date is the last day of that Plan Year.
(iv) "AGGREGATION GROUP" means either:
(A) A "REQUIRED AGGREGATION GROUP". In determining a
Required Aggregation Group hereunder, each qualified
plan of the Employer or an Affiliated Employer in which
a Key Employee participates and each other qualified
plan of the Employer or an Affiliated Employer
(including terminated plans within the five-year period
ending on the Determination Date) which enables any plan
in which a Key Employee participates to meet the
requirements of Sections 401(a) or 410 of the Code will
be required to be aggregated. Such group shall be known
as a Required Aggregation Group.
Solely for purposes of determining if the Plan or any
other plan in the Required Aggregation Group is a top
heavy plan for a Plan Year, the accrued benefits of
Non-Key Employees shall be determined under the method,
if any, which is uniformly applied for accrual purposes
under all defined benefit plans maintained by the
Employer or Affiliated Employers or, if there is no such
method, as if such benefit accrued not more rapidly than
under the slowest accrual rate permitted under Section
411(b)(1)(C) of the Code.
(B) A "PERMISSIVE AGGREGATION GROUP". The Committee may also
include any other qualified plan not required to be
included in the Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to
satisfy the provisions of Sections 401(a)(4) and 410 of
the Code. Such group shall be known as a Permissive
Aggregation Group.
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In no event shall this Plan be considered a top heavy plan if
it is part of a Required Aggregation Group or a Permissive
Aggregation Group that is not a top heavy group.
Only those plans of the Employer or Affiliated Employers in
which the determination dates fall within the same calendar
year shall be aggregated in order to determine whether such
plans are Top Heavy plans.
(v) "NON-KEY EMPLOYEE" means an employee who is not a Key
Employee, including any employee who is a former Key Employee.
(vi) "VALUATION DATE" means the date used to calculate the value of
account balances or accrued benefits for purposes of
determining the top heavy ratio specified in paragraph (b)
below.
For purposes of this Plan, the Valuation Date shall be the
Determination Date. For each other plan, the Valuation Date
shall be, subject to Section 416 of the Code, the most recent
Valuation Date which falls within or ends within the twelve
consecutive months ending on the applicable determination date
for such plan.
(vii) "EMPLOYEE", "FORMER EMPLOYEE", "KEY EMPLOYEE" and "NON-KEY
EMPLOYEE" shall also include Beneficiaries of such an
employee.
(b) TOP HEAVY PLAN. The Plan shall be deemed a Top Heavy Plan for a Plan
Year if, as of a Valuation Date the sum of the account balances of
Key Employees under this Plan and all other defined contribution
plans in the Aggregation Group, and the present value of accrued
benefits of Key Employees under all defined benefit plans in the
Aggregation Group exceeds 60% of the sum of the account balances of
all Participants under this Plan and all other defined contribution
plans in the Aggregation Group and the present value of accrued
benefits of all Participants under all defined benefit plans in the
Aggregation Group (but excluding Participants who are former Key
Employees).
For purposes of this test, the following rules shall apply:
(i) Subject to paragraph (ii) below, any part of an account
balance distributed from this Plan or any other plan in the
Aggregation Group, and any accrued benefit distributed from
any other plan in the Aggregation Group during the five Plan
Years ending on the Determination Date shall be taken into
consideration.
(ii) The accounts of all former employees who have not been
credited with at least one Hour of Service during the period
of five years ending on the Determination Date shall be
disregarded, provided, however, that if such former Employee
again completes an Hour of Service with the Employer
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after such five year period, such former Employee's accounts
shall be taken into consideration.
(iii) If an Employee is a Non-Key Employee for the Plan Year
containing the Determination Date, but such individual was a
Key Employee during any previous Plan Year, the value of his
or her accounts shall not be taken into consideration.
(iv) The determination of account balances under all defined
contribution plans in the Aggregation Group shall be increased
for contributions due as of the Determination Date to the
extent required under Section 416 of the Code.
(v) The determination of the present value of accrued benefits
under all defined benefit plans in the Aggregation Group shall
be based on the interest rate and mortality table specified in
the qualified defined benefit plan for salaried employees
maintained by the Sponsoring Employer.
(vi) Distributions, rollovers and trust to trust transfers shall be
taken into consideration to the extent required under Section
416 of the Code.
(vii) "Deductible employee contributions" (within the meaning of
Section 501(c) (18)(D) of the Code) contributed to any plan in
the Aggregation Group shall not be taken into consideration.
The calculation of the top heavy ratio shall be made in accordance
with the provisions of Section 416 of the Code.
(c) Notwithstanding any other provision of the Plan to the contrary, for
any Plan Year in which the Plan is deemed to be a top heavy plan,
the following provision shall apply:
(i) Minimum Contribution. The Employer shall make a minimum
contribution for each Participant who is a Non-Key Employee
and who is employed by the Employer or an Affiliated Employer
on the last day of the Plan Year as follows:
(A) If the Participant is also a participant in a defined
benefit plan or another defined contribution plan
sponsored by the Employer or an Affiliated Employer
which provides a top heavy minimum benefit, then the
minimum contribution to this Plan is 0%.
(B) If the Participant is also a participant in a defined
benefit plan or another defined contribution plan
sponsored by the Employer or an Affiliated Employer
which provides a top heavy minimum benefit offset by the
minimum benefit under this Plan, or if the Participant
is not a participant in any other defined benefit plan
or defined
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<PAGE>
contribution plan sponsored by the Employer or an
Affiliated Employer, then the minimum contribution to
this Plan is the lesser of:
(1) 3% of the Participant's Section 415 Compensation
(as defined in Section 12.5(b)) for such Plan
Year, or
(2) The largest percentage of Employer Contributions,
as a percentage of Section 415 Compensation (as
defined in Section 12.5(b)), allocated to the
Total Account of any Key Employee for such Plan
Year, provided no Key Employee is allocated an
amount in excess of 3% of his or her Section 415
Compensation (as defined in Section 12.5(b) but
including amounts of deferred compensation not
currently includable in income for Federal income
tax purposes for such Plan Year).
For purposes of this paragraph (c)(i), Participants shall also
include Eligible Employees who have waived participation in
this Plan.
(d) In any Plan Year in which the Plan is a Top Heavy Plan, but not a
super top heavy plan (substituting 90% for 60% in paragraph (b)
above), Section 12.5(e) shall be applied by substituting "1.0" for
"1.25", unless subparagraph (c)(ii)(B)(1) above is amended to
substitute "4% " for "3% therein.
(e) In any Plan Year in which the Plan is a Super Top Heavy Plan
(substituting 90% for 60% in paragraph (b) above), the factor of
"1.25" shall be changed to "1.0" in Section 12.5(e).
(f) In any Plan Year that the Plan ceases to be a Top Heavy Plan, the
above provisions shall no longer apply, except that the portion of a
Participant's Employer Matching Contribution Account and
Participation Plan Account which was vested pursuant to paragraph
(c)(i) above shall remain vested.
(g) The minimum allocation provisions of paragraph (c)(ii) above shall,
to the extent necessary, be satisfied by special contributions made
by the Employer for that purpose. Neither Before-Tax Contributions
nor Employer Matching Contributions shall be taken into account in
satisfying the minimum allocation provisions of paragraph (c)(ii)
above.
(h) Employer contributions for a Non-Key Employee that are taken into
account to meet the minimum allocation requirements of this Section
shall be disregarded in applying the provisions of Section 12.6.
(i) The provisions of paragraph (c) above shall not apply to any
Employee included in a unit of Employees covered by a collective
bargaining agreement if, within the
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meaning of Section 416(i)(4) of the Code, retirement benefits were
the subject of good faith bargaining.
12.8 PARTICIPATING EMPLOYERS
(a) Any Affiliated Employer may adopt this Plan with the approval of the
Board. Upon so adopting the Plan, the Affiliated Employer shall
become a Participating Employer hereunder and shall come within the
meaning of Employer for all purposes of the Plan.
(b) If all or substantially all of the assets or shares of stock of any
other company or business in the United States is acquired, and if
such other company or business becomes a Participating Employer
hereunder, the Board (or such committee as it may appoint), may
authorize that the Plan shall take into account for eligibility or
vesting purposes, or both, an Eligible Employee's service with such
acquired company or business for any period prior to the date on
which such other company or business was acquired.
(c) A Participating Employer may discontinue or revoke its participation
in the Plan with respect to its Eligible Employees. At the time of
discontinuance or revocation, the Committee may authorize the
Trustee to transfer, deliver, and assign vested Trust Fund assets
attributable for die Participants employed by such Participating
Employer to a new trustee as shall have been designated by the
Participating Employer, in the event that it has established a
separate qualified plan for its employees. If a separate qualified
plan is not established, the Trustee shall retain such assets for
the benefit of the Participants employed by such Participating
Employer. In no event shall any part of the corpus or income of the
Trust Fund as it relates to such Participating Employer be used for
or diverted to purposes other than for the exclusive benefit of the
Participants employed by such Participating Employer and their
Beneficiaries.
12.9 GOVERNING LAW
The Plan and Trust shall be construed, administered, and enforced in
accordance with ERISA and the laws of the Commonwealth of Massachusetts
(or such other state of competent jurisdiction) to the extent such laws
are not inconsistent with or preempted by ERISA.
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IN WITNESS WHEREOF, this Plan is effective the first day of October 1996.
Date this 3rd day of August, 1998.
WITNESS: EBAC:
/s/ Bonnie Cook /s/ Philip S. Taymor
- ---------------------------------- ----------------------------------
Philip S. Taymor
Senior Vice President,
Finance & Administration,
Chief Financial Officer,
Treasurer & Assistant Secretary
/s/ Bonnie Cook /s/ Thomas W. Feller
- ---------------------------------- ----------------------------------
Thomas W. Feller
Senior Vice President, Operations
/s/ Bonnie Cook /s/ Brian K. Mazar
- ---------------------------------- ----------------------------------
Brian K. Mazar
Vice President, Human Resources &
Investor Relations
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