<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1997
REGISTRATION NO.333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
HORIZON HEALTH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2293354
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 WATERS RIDGE DRIVE
LEWISVILLE, TEXAS 75057-6011
(Address of principal executive offices)
HORIZON HEALTH CORPORATION
EMPLOYEES SAVINGS AND PROFIT SHARING PLAN
(Full title of the plan)
JAMES KEN NEWMAN
CHIEF EXECUTIVE OFFICER
HORIZON HEALTH CORPORATION
1500 WATERS RIDGE DRIVE
LEWISVILLE, TEXAS 75057-6011
(972) 420-8200
(Name, address and telephone number of agent for service)
COPIES TO:
STRASBURGER & PRICE, L.L.P.
901 MAIN STREET, SUITE 4300
DALLAS, TEXAS 75202
(214) 651-4300
ATTN: DAVID K. MEYERCORD, ESQ.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
Amount to be offering price per aggregate offering Amount of
Title of securities to be registered registered (1)(2) share (3) price (3) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 100,000 shares $25.1875 $2,518,750 $763.26
====================================================================================================================================
</TABLE>
(1) Represents the maximum aggregate number of shares of Common Stock that
it is anticipated will be purchased by the employee benefit plan
described herein.
(2) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this Registration Statement also includes an indeterminate
amount of interests to be offered or sold pursuant to the employee
benefit plan described herein.
(3) Estimated solely for purposes of computing the amount of the
registration fee in accordance with Rule 457(h) under the Securities Act
of 1933, as amended, based on the average of the high and low prices of
the Common Stock on the Nasdaq Stock Market on September 30, 1997.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this
Registration Statement by Horizon Health Corporation, a Delaware corporation
(the "Registrant"), and Horizon Health Corporation Employees Savings and Profit
Sharing Plan (the "Savings Plan"):
(a) the Annual Report on Form 10-K of the Registrant for the fiscal
year ended August 31, 1996, as amended by the Form 10-K/A filed
with the Securities and Exchange Commission (the "Commission") on
July 2, 1997;
(b) the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended November 30, 1996, filed with the Commission on
January 8, 1997;
(c) the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended February 28, 1997, filed with the Commission on
March 31, 1997;
(d) the Current Report on Form 8-K of the Registrant dated January
31, 1997 and filed with the Commission on May 8, 1997;
(e) the Quarterly Report on Form 10-Q of the Registrant for the
quarter ended May 31, 1997, filed with the Commission on July 14,
1997;
(f) the Current Report on Form 8-K of the Registrant filed with the
Commission on August 25, 1997 and dated August 11, 1997;
(g) the description of the Common Stock, $.01 par value per share
(the "Common Stock"), of the Registrant contained in Item 1 of
the Registration Statement on Form 8-A filed pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), relating to the Common Stock, as declared
effective on March 13, 1995 (File No. 1-13626), including all
amendments or reports filed for the purpose of updating such
description; and
(h) the description of the Rights to Purchase Common Stock of the
Registrant contained in Item 1 of the Registration Statement on
Form 8-A/12G filed pursuant to Section 12 of the Exchange Act,
relating to the Rights to Purchase Common Stock, as declared
effective on February 18, 1997 (File No 000-22123), including all
amendments or reports filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant or the Savings Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or replaces such
statement. Any statement so modified shall not be deemed in its unmodified
form to constitute a part of this Registration Statement. Any statement so
superseded shall not be deemed to constitute a part of this Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Section 145 of the Delaware General Corporation Law ("Delaware
Law"), the Registrant has broad powers to indemnify its directors, officers,
employees and agents against liabilities they may incur in such capacities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"). The Registrant's Certificate of Incorporation provides that
the Registrant shall indemnify its directors and officers to the fullest extent
permitted by law, and requires the Registrant to advance litigation expenses in
the case of stockholder derivative actions or other actions, against an
undertaking by the director or officer to repay such advances if it is
ultimately determined that the director or officer is not entitled to
indemnification. The Certificate of Incorporation also provides that rights
conferred under such Certificate of Incorporation shall not be deemed to be
exclusive of any other right such persons may have or acquire under any
statute, the Bylaws, agreement, resolution of stockholders or directors, or
otherwise.
The Certificate of Incorporation further provides that, pursuant to
Delaware Law, no director of the Registrant shall be liable to the Registrant
or its stockholders for monetary damages for breach of the director's fiduciary
duty as a director. This provision in the Certificate of Incorporation does
not eliminate the duty of care, and in appropriate circumstances equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Delaware Law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant or its stockholders, for acts or omissions not in good faith or
involving intentional misconduct, for knowing violations of law, for actions
leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware Law. The provision also does not affect a director's
responsibilities under any other law, such as the Federal securities laws.
The stock option plans, as amended, of the Registrant generally provide
that no member of the Board of Directors of the Registrant or any member of the
committee administering such plans shall be liable for any act, omission or
determination taken or made in good faith with respect to the plans or any
option granted thereunder. The plans further generally provide that members of
the Board of Directors and such committee shall be entitled to indemnification
and reimbursement by the Registrant in respect of any claim, loss, damage or
expense (including attorneys' fees, the cost of settling any suit, provided
such settlement is approved by independent legal counsel selected by the
Registrant, and amounts paid in satisfaction of a judgment, except a judgment
based on a finding of bad faith) arising therefrom to the full extent permitted
by law and under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect.
The Savings Plan provides that the Savings Plan Administrator and
Trustee will be entitled to reimbursement by the Registrant for any costs,
attorney's fees and other expenses incurred in connection with a claim, suit or
other proceeding regarding the Savings Plan or the Trust except to the extent
that (a) the Savings Plan Administrator or the Trustee is adjudged to have been
grossly negligent, to have acted in bad faith or to have acted with intentional
misconduct or (b) the settling of a claim in excess of an amount approved by
the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
3.1 Amended and Restated Certificate of Incorporation of the
Registrant, as amended (incorporated herein by reference to
Exhibit 3.1 to the Current Report on Form 8-K of the Registrant
filed with the Commission and dated August 11, 1997 (the "Form 8-
K Filing").
3.2 Bylaws of the Registrant, as amended (incorporated herein by
reference to Exhibit 3.2 to Amendment No. 2 as filed with the
Commission on February 16, 1995 to the Company's Registration
Statement on Form S-1 as filed with the Commission on January 6,
1996, Registration No. 33-88314).
4.1 Specimen Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 to the Form 8-K Filing).
3
<PAGE> 4
4.2 Rights Agreement dated as of February 6, 1997, between the
Registrant and American Stock Transfer & Trust Company, as Rights
Agent (incorporated herein by reference to Exhibit 4.1 to the
Registration Statement on Form 8-A of the Registrant,
Registration Number 000-22123, as filed with the Commission on
February 7, 1997).
4.3 Defined Contribution Master Plan and Trust Agreement and Adoption
Agreement #011 Nonstandardized Code Section 401(k) Profit Sharing
Plan between Horizon Health Corporation and Texas Commerce Bank
National Association (filed herewith).
4.4 Amendment No. 3 to Horizon Health Corporation Employees Savings
and Profit Sharing Plan (filed herewith).
5.1 Favorable determination letter issued by the Internal Revenue
Service ("IRS") with respect to the Savings Plan on June 4, 1997
(filed herewith).
23.1 Consent of Price Waterhouse LLP (filed herewith).
24.1 Power of Attorney (contained on signature page of this
Registration Statement).
The undersigned Registrant hereby undertakes that it has submitted or
will submit in a timely manner to the IRS the Savings Plan and all amendments
thereto made since the date of its most recent determination letter from the
IRS and has made or will make all changes required by the IRS in order to
qualify the Savings Plan as so amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in
the information set forth in this Registration
Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities
offered (if the total dollar value of securities
offered would not exceed that which was registered)
and any deviation from the low or high end of the
estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than
a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in the Registration Statement or any material
change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
4
<PAGE> 5
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(Remainder of page intentionally left blank)
5
<PAGE> 6
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Lewisville, State of Texas, on
September 29, 1997.
HORIZON HEALTH CORPORATION
By: /s/ James Ken Newman
--------------------------
James Ken Newman
Chief Executive Officer
POWER OF ATTORNEY
Each individual whose signature appears below constitutes and appoints
James Ken Newman and James W. McAtee, and each of them, such person's true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for such person and in such person's name, place, and stead, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement, and to file the same with
all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that such attorneys-in-fact and
agents, or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ James Ken Newman Director; Chairman of the Board and Chief September 29, 1997
------------------------------------ Executive Officer
James Ken Newman
/s/ James W. McAtee Director; Executive Vice President, September 29, 1997
------------------------------------ Principal Financial Officer and Treasurer
James W. McAtee
/s/ Cliff W. Gardner Vice President-Controller; Financial September 29, 1997
------------------------------------ Accounting Officer
Cliff W. Gardner
/s/ Jack R. Anderson Director September 29, 1997
------------------------------------
Jack R. Anderson
/s/ George E. Bello Director September 19, 1997
------------------------------------
George E. Bello
Director September __, 1997
------------------------------------
James E. Buncher
/s/ Howard B. Finkel Director September 19, 1997
- -------------------------------------
Howard B. Finkel
/s/ William H. Longfield Director September 29, 1997
- -------------------------------------
William H. Longfield
/s/ Keith B. Pitts Director September 29, 1997
- -------------------------------------
Keith B. Pitts
/s/ Donald E. Steen Director September 29, 1997
- -------------------------------------
Donald E. Steen
</TABLE>
6
<PAGE> 7
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Lewisville, State of Texas, on September 29, 1997.
HORIZON HEALTH CORPORATION EMPLOYEES
SAVINGS AND PROFIT SHARING PLAN
By: Horizon Health Corporation, as Plan
Administrator
By: /s/ James W. McAtee
----------------------------------
Its: Executive Vice President
------------------------------
7
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Registrant, as amended (incorporated herein by reference to
Exhibit 3.1 to the Registrant's Current Report on Form 8-K of the
Registrant as filed with the Commission on August 25, 1997 (the
"Form 8-K Filing").
3.2 Bylaws of the Registrant, as amended (incorporated herein by
reference to Exhibit 3.2 to Amendment No. 2 as filed with the
Commission on February 16, 1995 to the Company's Registration
Statement on Form S-1 as filed with the Commission on January 6,
1995, Registration No. 33-88314).
4.1 Specimen Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 to the Form 8-K Filing).
4.2 Rights Agreement dated as of February 6, 1997, between the
Registrant and American Stock Transfer & Trust Company, as Rights
Agent (incorporated herein by reference to Exhibit 4.1 to the
Registration Statement on Form 8-A of the Registrant,
Registration Number 000-22123, as filed with the Commission on
February 7, 1997).
4.3 Defined Contribution Master Plan and Trust Agreement and Adoption
Agreement #011 Nonstandardized Code Section 401(k) Profit Sharing
Plan between Horizon Health Corporation and Texas Commerce Bank
National Association (filed herewith).
4.4 Amendment No. 3 to Horizon Health Corporation Employees Savings
and Profit Sharing Plan (filed herewith).
5.1 Favorable determination letter issued by the Internal Revenue
Service ("IRS") with respect to the Savings Plan on June 4, 1997
(filed herewith).
23.1 Consent of Price Waterhouse LLP (filed herewith).
24.1 Power of Attorney (contained on signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.3
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
DEFINED CONTRIBUTION MASTER PLAN
AND
TRUST AGREEMENT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ALPHABETICAL LISTING OF DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
ARTICLE I DEFINITIONS
1.01 Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
1.02 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
1.03 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
1.04 Adoption Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
1.05 Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
1.06 Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
1.07 Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
1.08 Self-Employed Individual/Owner-Employee . . . . . . . . . . . . . . . . . . . . . . . . 1.02
1.09 Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
1.10 Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
1.11 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
1.12 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
1.13 Earned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.14 Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.15 Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.16 Nonforfeitable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.17 Plan Year/Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.18 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.19 Plan Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.20 Accounting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.21 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.22 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.23 Nontransferable Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.24 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.25 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.26 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05
1.27 Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06
1.28 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
1.29 Service for Predecessor Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
1.30 Related Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
1.31 Leased Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
1.32 Special Rules for Owner-Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08
1.33 Determination of Top Heavy Status . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08
1.34 Paired Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.10
1.35 Retirement Investment Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.10
ARTICLE II EMPLOYEE PARTICIPANTS
2.01 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
2.02 Year of Service - Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
2.03 Break in Service - Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
2.04 Participation upon Re-employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
2.05 Change in Employee Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
2.06 Election Not to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE III EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
3.02 Determination of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
3.03 Time of Payment of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
3.04 Contribution Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
3.05 Forfeiture Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
3.06 Accrual of Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
3.07 - 3.16 Limitations on Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05
3.17 Special Allocation Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07
3.18 Defined Benefit Plan Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07
3.19 Definitions - Article III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07
ARTICLE IV PARTICIPANT CONTRIBUTIONS
4.01 Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . 4.01
4.02 Participant Deductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
4.03 Participant Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
4.04 Participant Contribution - Forfeitability . . . . . . . . . . . . . . . . . . . . . . . 4.02
4.05 Participant Contribution - Withdrawal/Distribution . . . . . . . . . . . . . . . . . . . 4.02
4.06 Participant Contribution - Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . 4.02
ARTICLE V TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
5.02 Participant Disability or Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
5.03 Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
5.04 Cash-Out Distributions to Partially-Vested Participants/Restoration
of Forfeited Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01
5.05 Segregated Account for Repaid Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
5.06 Year of Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
5.07 Break in Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
5.08 Included Years of Service - Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
5.09 Forfeiture Occurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
ARTICLE VI TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 Time of Payment of Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
6.02 Method of Payment of Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . 6.03
6.03 Benefit Payment Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04
6.04 Annuity Distributions to Participants and Surviving Spouses . . . . . . . . . . . . . . 6.06
6.05 Waiver Election - Qualified Joint and Survivor Annuity . . . . . . . . . . . . . . . . . 6.07
6.06 Waiver Election - Preretirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . 6.08
6.07 Distributions Under Domestic Relations Orders . . . . . . . . . . . . . . . . . . . . . 6.08
ARTICLE VII EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 Information to Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
7.02 No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
7.03 Indemnity of Certain Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
7.04 Employer Direction of Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02
7.05 Amendment to Vesting Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02
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ARTICLE VIII PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01
8.02 No Beneficiary Designation/Death of Beneficiary . . . . . . . . . . . . . . . . . . . . 8.01
8.03 Personal Data to Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.04 Address for Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.05 Assignment or Alienation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.06 Notice of Change in Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.07 Litigation Against the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.08 Information Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.09 Appeal Procedure for Denial of Benefits . . . . . . . . . . . . . . . . . . . . . . . . 8.02
8.10 Participant Direction of Investment . . . . . . . . . . . . . . . . . . . . . . . . . . 8.03
ARTICLE IX ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 Members' Compensation, Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
9.02 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
9.03 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
9.04 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01
9.05 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.06 Manner of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.07 Authorized Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.08 Interested Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.09 Individual Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.10 Value of Participant's Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . 9.02
9.11 Allocation and Distribution of Net Income Gain or Loss . . . . . . . . . . . . . . . . . 9.03
9.12 Individual Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.03
9.13 Account Charged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.03
9.14 Unclaimed Account Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.03
ARTICLE X CUSTODIAN/TRUSTEE, POWERS AND DUTIES
10.01 Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
10.02 Receipt of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
10.03 Investment Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01
10.04 Records and Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
10.05 Fees and Expenses from Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
10.06 Parties to Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
10.07 Professional Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
10.08 Distribution of Cash or Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
10.09 Distribution Directions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.10 Third Party/Multiple Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.11 Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.12 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.13 Interim Duties and Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.14 Valuation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.15 Limitation on Liability - If Investment Manager, Ancillary
Trustee or Independent Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.07
10.16 Investment in Group Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.08
10.17 Appointment of Ancillary Trustee or Independent Fiduciary . . . . . . . . . . . . . . 10.08
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10.18 Evidence of Action by the Advisory Committee . . . . . . . . . . . . . . . . . . . . . 10.09
10.19 Allocation of Responsibilities Among Fiduciaries . . . . . . . . . . . . . . . . . . . 10.09
10.20 Special Provisions Regarding Retirement Investment Trusts . . . . . . . . . . . . . . 10.10
ARTICLE XI PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 Insurance Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
11.02 Limitation on Life Insurance Protection . . . . . . . . . . . . . . . . . . . . . . . 11.01
11.03 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
11.04 Dividend Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.02
11.05 Insurance Company Not a Party to Agreement . . . . . . . . . . . . . . . . . . . . . . 11.02
11.06 Insurance Company Not Responsible for Trustee's Actions . . . . . . . . . . . . . . . 11.02
11.07 Insurance Company Reliance on Trustee's Signature . . . . . . . . . . . . . . . . . . 11.03
11.08 Acquittance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
11.09 Duties of Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
ARTICLE XII MISCELLANEOUS
12.01 Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.02 No Responsibility for Employer Action . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.03 Fiduciaries Not Insurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.04 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.05 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.06 Word Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.07 State Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.08 Employer's Right to Participate . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
12.09 Employment Not Guaranteed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.02
ARTICLE XIII EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 Exclusive Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
13.02 Amendment By Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.01
13.03 Amendment By Master Plan Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
13.04 Discontinuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
13.05 Full Vesting on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
13.06 Merger/Direct Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02
13.07 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.03
ARTICLE XIV CODE Section 401(K) & CODE Section 401(M) ARRANGEMENTS
14.01 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01
14.02 Code Section 401(k) Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01
14.03 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.02
14.04 Matching Contributions/Employee Contributions . . . . . . . . . . . . . . . . . . . . 14.03
14.05 Time of Payment of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03
14.06 Special Allocation Provisions - Deferral Contributions,
Matching Contributions and Qualified Nonelective Contributions . . . . . . . . . . . . 14.04
14.07 Annual Elective Deferral Limitation . . . . . . . . . . . . . . . . . . . . . . . . . 14.05
14.08 Actual Deferral Percentage ("ADP") Test . . . . . . . . . . . . . . . . . . . . . . . 14.06
14.09 Nondiscrimination Rules for Employer Matching Contributions
and Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . 14.07
14.10 Multiple Use Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.09
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14.11 Distribution Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10
14.12 Special Allocation Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11
ARTICLE A APPENDIX TO BASIC PLAN DOCUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
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ALPHABETICAL LISTING OF DEFINITIONS
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<CAPTION>
PLAN DEFINITION SECTION REFERENCE
(PAGE NUMBER)
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100% Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(l) (3.09)
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.14 (1.05)
Accounting Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.20 (1.05)
Accrued Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 (1.05)
Actual Deferral Percentage ("ADP") Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 (14.06)
Adoption Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.04 (1.01)
Advisory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.06 (1.02)
Annual Addition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(a) (3.07)
Average Contribution Percentage Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.09 (14.07)
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.11 (1.03)
Break in Service for Eligibility Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03 (2.01)
Break in Service for Vesting Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07 (5.03)
Cash-out Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04 (5.01)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 (1.05)
Code Section 411(d)(6) Protected Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.02 (13.01)
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.12 (1.03)
Compensation for Code Section 401(k) Purposes . . . . . . . . . . . . . . . . . . . . . . . . 14.03(f) (14.02)
Compensation for Code Section 415 Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(b) (3.07)
Compensation for Top Heavy Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(3) (1.10)
Contract(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03(c) (11.02)
Custodian Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[B] (10.03)
Deemed Cash-out Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04(C) (5.02)
Deferral Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(g) (14.02)
Deferral Contributions Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06 (14.04)
Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(i) (3.08)
Defined Benefit Plan Fraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(j) (3.08)
Defined Contribution Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(h) (3.08)
Defined Contribution Plan Fraction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(k) (3.09)
Determination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(7) (1.10)
Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.28 (1.07)
Distribution Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01 (6.01)
Distribution Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(m) (14.03)
Earned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.13 (1.05)
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.18 (1.05)
Elective Deferrals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(h) (14.02)
Elective Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.06(A) (13.02)
Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(c) (14.02)
Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07 (1.02)
Employee Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(n) (14.03)
Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01 (1.01)
Employer Contribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06 (14.04)
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Employer for Code Section 415 Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c) (3.07)
Employer for Top Heavy Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(6) (1.10)
Employment Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02 (2.01)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.24 (1.05)
Excess Aggregate Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.09 (14.07)
Excess Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(d) (3.07)
Excess Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 (14.06)
Exempt Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01 (8.01)
Forfeiture Break in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08 (5.03)
Group Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.16 (10.07)
Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(A)(4) (6.02)
Hardship for Code Section 401(k) Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.11 (14.10)
Highly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.09 (1.02)
Highly Compensated Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(d) (14.02)
Hour of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.27 (1.06)
Incidental Insurance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01 (11.01)
Insurable Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03(d) (11.02)
Investment Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04(i) (9.01)
Issuing Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03(b) (11.02)
Joint and Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04(A) (6.06)
Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(1) (1.10)
Leased Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.31 (1.08)
Limitation Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17 and 3.19(e) (1.05) and (3.08)
Loan Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04(A) (9.02)
Mandatory Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04 (14.03)
Mandatory Contributions Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.04 (14.03)
Master or Prototype Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(f) (3.08)
Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(i) (14.03)
Maximum Permissible Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(g) (3.08)
Minimum Distribution Incidental Benefit (MDIB) . . . . . . . . . . . . . . . . . . . . . . . . 6.02(A) (6.03)
Multiple Use Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.10 (14.09)
Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[D] (10.04)
Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(j) (14.03)
Nonforfeitable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.16 (1.05)
Nonhighly Compensated Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(b) (14.02)
Nonhighly Compensated Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(e) (14.02)
Non-Key Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(2) (1.10)
Nontransferable Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.23 (1.05)
Normal Retirement Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01 (5.01)
Owner-Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 (1.02)
Paired Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.34 (1.10)
Participant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.10 (1.03)
Participant Deductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02 (4.01)
Participant Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05 (3.03)
Participant Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[E] (10.05)
Participant Nondeductible Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01 (4.01)
Permissive Aggregation Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(5) (1.10)
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03 (1.01)
</TABLE>
vii
<PAGE> 9
<TABLE>
<S> <C>
Plan Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.05 (1.02)
Plan Entry Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.19 (1.05)
Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.17 (1.05)
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03(a) (11.02)
Predecessor Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.29 (1.07)
Preretirement Survivor Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.04(B) (6.06)
Qualified Domestic Relations Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07 (6.09)
Qualified Matching Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(k) (14.03)
Qualified Nonelective Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03(l) (14.03)
Qualifying Employer Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[F] (10.05)
Qualifying Employer Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[F] (10.05)
Related Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.30 (1.07)
Required Aggregation Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33(B)(4) (1.10)
Required Beginning Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(B) (6.02)
Rollover Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03 (4.01)
Self-Employed Individual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08 (1.02)
Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.26 (1.06)
Term Life Insurance Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03 (11.02)
Top Heavy Minimum Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04(B) (3.01)
Top Heavy Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.33 (1.09)
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21 (1.05)
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02 (1.01)
Trustee Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03[A] (10.01)
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.22 (1.05)
Weighted Average Allocation Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.12 (14.11)
Year of Service for Eligibility Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02 (2.01)
Year of Service for Vesting Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06 (5.03)
</TABLE>
viii
<PAGE> 10
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
DEFINED CONTRIBUTION MASTER PLAN AND TRUST AGREEMENT
BASIC PLAN DOCUMENT # 03
Texas Commerce Bank National Association, in its capacity as Master Plan
Sponsor, establishes this Master Plan intended to conform to and qualify under
Section 401 and Section 501 of the Internal Revenue Code of 1986, as amended.
An Employer establishes a Plan and Trust under this Master Plan by executing an
Adoption Agreement. If the Employer adopts this Plan as a restated Plan in
substitution for, and in amendment of, an existing plan, the provisions of this
Plan, as a restated Plan, apply solely to an Employee whose employment with the
Employer terminates on or after the restated Effective Date of the Employer's
Plan. If an Employee's employment with the Employer terminates prior to the
restated Effective Date, that Employee is entitled to benefits under the Plan
as the Plan existed on the date of the Employee's termination of employment.
ARTICLE I
DEFINITIONS
1.01 "Employer" means each employer who adopts this Plan by executing
an Adoption Agreement.
1.02 "Trustee" means the person or persons who as Trustee execute the
Employer's Adoption Agreement, or any successor in office who in writing
accepts the position of Trustee. The Employer must designate in its Adoption
Agreement whether the Trustee will administer the Trust as a discretionary
Trustee or as a nondiscretionary Trustee. If a person acts as a discretionary
Trustee, the Employer also may appoint a Custodian. See Article X. If the
Master Plan Sponsor is a bank, savings and loan, credit union or similar
financial institution, a person other than the Master Plan Sponsor (or its
affiliate) may not serve as Trustee or as Custodian of the Employer's Plan
without the written consent of the Master Plan Sponsor.
1.03 "Plan" means the retirement plan established or continued by the
Employer in the form of this Agreement, including the Adoption Agreement under
which the Employer has elected to participate in this Master Plan. The Employer
must designate the name of the Plan in its Adoption Agreement. An Employer may
execute more than one Adoption Agreement offered under this Master Plan, each
of which will constitute a separate Plan and Trust established or continued by
that Employer. The Plan and the Trust created by each adopting Employer is a
separate Plan and a separate Trust, independent from the plan and the trust of
any other employer adopting this Master Plan. All section references within the
Plan are Plan section references unless the context clearly indicates
otherwise.
1.04 "Adoption Agreement" means the document executed by each Employer
adopting this Master Plan. The terms of this Master Plan as modified by the
terms of an adopting Employer's Adoption Agreement constitute a separate Plan
and Trust to be construed as a single Agreement. Each elective provision of the
Adoption Agreement corresponds by section reference to the section of the Plan
which grants the election. Each Adoption Agreement offered under this Master
Plan is either a Nonstandardized Plan or a Standardized Plan, as identified in
the preamble to that Adoption Agreement. The provisions of this Master Plan
apply equally to Nonstandardized Plans and to Standardized Plans unless
otherwise specified.
1.01
<PAGE> 11
1.05 "Plan Administrator" is the Employer unless the Employer
designates another person to hold the position of Plan Administrator. In
addition to his other duties, the Plan Administrator has full responsibility
for compliance with the reporting and disclosure rules under the Code and ERISA
as respects the Plan and Trust.
1.06 "Advisory Committee" means the Employer's Advisory Committee as
from time to time constituted.
1.07 "Employee" means any employee (including a Self-Employed
Individual) of the Employer. The Employer must specify in its Adoption
Agreement any Employee, or class of Employees, not eligible to participate in
the Plan. If the Employer elects to exclude collective bargaining employees,
the exclusion applies to any employee of the Employer included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or
more employers unless the collective bargaining agreement requires the employee
to be included within the Plan. The term "employee representatives" does not
include any organization more than half the members of which are owners,
officers, or executives of the Employer.
1.08 "Self-Employed Individual/Owner-Employee." "Self-Employed
Individual" means an individual who has Earned Income (or who would have had
Earned Income but for the fact that the trade or business did not have net
earnings) for the taxable year from the trade or business for which the Plan is
established. "Owner-Employee" means a Self-Employed Individual who is the sole
proprietor in the case of a sole proprietorship. If the Employer is a
partnership, "Owner-Employee" means a Self-Employed Individual who is a partner
and owns more than 10% of either the capital or profits interest of the
partnership.
1.09 "Highly Compensated Employee" means an Employee who, during the
Plan Year or during the preceding 12-month period:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of Code
Section 318, for an unincorporated entity);
(b) has Compensation in excess of $75,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year);
(c) has Compensation in excess of $50,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year) and is part of
the top-paid 20% group of employees (based on Compensation for the
relevant year); or
(d) has Compensation in excess of 50% of the dollar amount prescribed in
Code Section 415(b)(1)(A) (relating to defined benefit plans) and is an
officer of the Employer.
If the Employee satisfies the definition in clause (b), (c) or (d) in
the Plan Year but does not satisfy clause (b), (c) or (d) during the preceding
12-month period and does not satisfy clause (a) in either period, the Employee
is a Highly Compensated Employee only if he is one of the 100 most highly
compensated Employees for the Plan Year. The number of officers taken into
account under clause (d) will not exceed the greater of 3 or 10% of the total
number (after application of the Code Section 414(q) exclusions) of Employees,
but no more than 50 officers. If no Employee satisfies the Compensation
requirement in clause (d) for the relevant year, the Advisory Committee will
treat the highest paid officer as satisfying clause (d) for that year.
For purposes of this Section 1.09, "Compensation" means Compensation as
defined in Section 1.12, except any exclusions from Compensation elected in the
Employer's Adoption Agreement Section 1.12 do not apply, and Compensation must
include "elective contributions" (as defined in Section 1.12). The Advisory
Committee must make the determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of the top paid 20%
group, the top 100 paid Employees, the number of officers includible in clause
(d) and the relevant Compensation, consistent with Code Section 414(q) and
regulations issued under that Code section. The Employer may make a calendar
year election to determine the Highly Compensated Employees for the Plan Year,
as prescribed by Treasury regulations. A calendar year election must apply to
all plans and arrangements of the Employer. For purposes of applying any
nondiscrimination test required under the Plan or under the Code, in a manner
consistent
1.02
<PAGE> 12
with applicable Treasury regulations, the Advisory Committee will treat a
Highly Compensated Employee and all family members (a spouse, a lineal
ascendant or descendant, or a spouse of a lineal ascendant or descendant) as a
single Highly Compensated Employee, but only if the Highly Compensated Employee
is a more than 5% owner or is one of the 10 Highly Compensated Employees with
the greatest Compensation for the Plan Year. This aggregation rule applies to a
family member even if that family member is a Highly Compensated Employee
without family aggregation.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or any Plan Year ending on or after his
55th birthday. If the former Employee's Separation from Service occurred prior
to January 1, 1987, he is a Highly Compensated Employee only if he satisfied
clause (a) of this Section 1.09 or received Compensation in excess of $50,000
during: (1) the year of his Separation from Service (or the prior year); or (2)
any year ending after his 54th birthday.
1.10 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.11 "Beneficiary" is a person designated by a Participant who is or
may become entitled to a benefit under the Plan. A Beneficiary who becomes
entitled to a benefit under the Plan remains a Beneficiary under the Plan until
the Trustee has fully distributed his benefit to him. A Beneficiary's right to
(and the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.12 "Compensation" means, except as provided in the Employer's
Adoption Agreement, the Participant's Earned Income, wages, salaries, fees for
professional service and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). The Employer must elect in its Adoption Agreement
whether to include elective contributions in the definition of Compensation.
"Elective contributions" are amounts excludible from the Employee's gross
income under Code Sections 125, 402(a)(8), 402(h) or 403(b), and contributed by
the Employer, at the Employee's election, to a Code Section 401(k) arrangement,
a Simplified Employee Pension, cafeteria plan or tax-sheltered annuity. The
term "Compensation" does not include:
(a) Employer contributions (other than "elective contributions," if
includible in the definition of Compensation under Section 1.12 of the
Employer's Adoption Agreement) to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the
Employee for the taxable year in which contributed, on behalf of an
Employee to a Simplified Employee Pension Plan to the extent such
contributions are excludible from the Employee's gross income, and any
distributions from a plan of deferred compensation, regardless of
whether such amounts are includible in the gross income of the Employee
when distributed.
(b) Amounts realized from the exercise of a non-qualified stock option,
or when restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a substantial
risk of forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a stock option described in Part II, Subchapter D,
Chapter 1 of the Code.
(d) Other amounts which receive special tax benefits, such as premiums
for group term life insurance (but only to the extent that the premiums
are not includible in the gross income of the Employee), or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the contributions are
excludible from the gross income of the Employee), other than "elective
contributions," if elected in the Employer's Adoption Agreement.
1.03
<PAGE> 13
Any reference in this Plan to Compensation is a reference to the
definition in this Section 1.12, unless the Plan reference specifies a
modification to this definition. The Advisory Committee will take into account
only Compensation actually paid for the relevant period. A Compensation payment
includes Compensation by the Employer through another person under the common
paymaster provisions in Code Sections 3121 and 3306.
(A) LIMITATIONS ON COMPENSATION.
(1) COMPENSATION DOLLAR LIMITATION. For any Plan Year beginning after
December 31, 1988, the Advisory Committee must take into account only the first
$200,000 (or beginning January 1, 1990, such larger amount as the Commissioner
of Internal Revenue may prescribe) of any Participant's Compensation. For any
Plan Year beginning prior to January 1, 1989, this $200,000 limitation (but not
the family aggregation requirement described in the next paragraph) applies
only if the Plan is top heavy for such Plan Year or operates as a deemed top
heavy plan for such Plan Year.
(2) APPLICATION OF COMPENSATION LIMITATION TO CERTAIN FAMILY MEMBERS.
The $200,000 Compensation limitation applies to the combined Compensation of
the Employee and of any family member aggregated with the Employee under
Section 1.09 who is either (i) the Employee's spouse; or (ii) the Employee's
lineal descendant under the age of 19. If, for a Plan Year, the combined
Compensation of the Employee and such family members who are Participants
entitled to an allocation for that Plan Year exceeds the $200,000 (or adjusted)
limitation, "Compensation" for each such Participant, for purposes of the
contribution and allocation provisions of Article III, means his Adjusted
Compensation. Adjusted Compensation is the amount which bears the same ratio to
the $200,000 (or adjusted) limitation as the affected Participant's
Compensation (without regard to the $200,000 Compensation limitation) bears to
the combined Compensation of all the affected Participants in the family unit.
If the Plan uses permitted disparity, the Advisory Committee must determine the
integration level of each affected family member Participant prior to the
proration of the $200,000 Compensation limitation, but the combined integration
level of the affected Participants may not exceed $200,000 (or the adjusted
limitation). The combined Excess Compensation of the affected Participants in
the family unit may not exceed $200,000 (or the adjusted limitation) minus the
affected Participants' combined integration level (as determined under the
preceding sentence). If the combined Excess Compensation exceeds this
limitation, the Advisory Committee will prorate the Excess Compensation
limitation among the affected Participants in the family unit in proportion to
each such individual's Adjusted Compensation minus his integration level. If
the Employer's Plan is a Nonstandardized Plan, the Employer may elect to use a
different method in determining the Adjusted Compensation of the affected
Participants by specifying that method in an addendum to the Adoption
Agreement, numbered Section 1.12.
(B) NONDISCRIMINATION. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.12, except: (1) the Employer may
elect to include or to exclude elective contributions, irrespective of the
Employer's election in its Adoption Agreement regarding elective contributions;
and (2) the Employer will not give effect to any elections made in the
"modifications to Compensation definition" section of Adoption Agreement
Section 1.12. The Employer's election described in clause (1) must be
consistent and uniform with respect to all Employees and all plans of the
Employer for any particular Plan Year. If the Employer's Plan is a
Nonstandardized Plan, the Employer, irrespective of clause (2), may elect to
exclude from this nondiscrimination definition of Compensation any items of
Compensation excludible under Code Section 414(s) and the applicable Treasury
regulations, provided such adjusted definition conforms to the
nondiscrimination requirements of those regulations.
1.13 "Earned Income" means net earnings from self-employment in the
trade or business with respect to which the Employer has established the Plan,
provided personal services of the individual are a material income producing
factor. The Advisory Committee will determine net earnings without regard to
items excluded from gross income and the deductions allocable to those items.
The Advisory Committee will determine net earnings after the deduction allowed
to the Self-Employed Individual for all contributions made by the Employer to a
qualified plan and, for Plan Years beginning after December 31, 1989, the
deduction allowed to the Self-Employed under Code Section 164(f) for
self-employment taxes.
1.04
<PAGE> 14
1.14 "Account" means the separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Employer's Plan.
1.15 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from both Employer contributions and Employee
contributions, if any.
1.16 "Nonforfeitable" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Accrued Benefit.
1.17 "Plan Year" means the fiscal year of the Plan, the consecutive
month period specified in the Employer's Adoption Agreement. The Employer's
Adoption Agreement also must specify the "Limitation Year" applicable to the
limitations on allocations described in Article III. If the Employer maintains
Paired Plans, each Plan must have the same Plan Year.
1.18 "Effective Date" of this Plan is the date specified in the
Employer's Adoption Agreement.
1.19 "Plan Entry Date" means the date(s) specified in Section 2.01 of
the Employer's Adoption Agreement.
1.20 "Accounting Date" is the last day of an Employer's Plan Year.
Unless otherwise specified in the Plan, the Advisory Committee will make all
Plan allocations for a particular Plan Year as of the Accounting Date of that
Plan Year.
1.21 "Trust" means the separate Trust created under the Employer's
Plan.
1.22 "Trust Fund" means all property of every kind held or acquired by
the Employer's Plan, other than incidental benefit insurance contracts.
1.23 "Nontransferable Annuity" means an annuity which by its terms
provides that it may not be sold, assigned, discounted, pledged as collateral
for a loan or security for the performance of an obligation or for any purpose
to any person other than the insurance company. If the Plan distributes an
annuity contract, the contract must be a Nontransferable Annuity.
1.24 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.25 "Code" means the Internal Revenue Code of 1986, as amended.
1.26 "Service" means any period of time the Employee is in the employ
of the Employer, including any period the Employee is on an unpaid leave of
absence authorized by the Employer under a uniform, nondiscriminatory policy
applicable to all Employees. "Separation from Service" means the Employee no
longer has an employment relationship with the Employer maintaining this Plan.
1.27 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties,
irrespective of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation
of damages, to which the Employer has agreed or for which the Employee
has received an award. The Advisory Committee credits Hours of Service
under this paragraph (b) to the Employee for the computation period(s)
to which the award or the agreement pertains rather than for the
computation period in which the award, agreement or payment is made; and
1.05
<PAGE> 15
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during
a computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than 501 Hours
of Service under this paragraph (c) to an Employee on account of any
single continuous period during which the Employee does not perform any
duties (whether or not such period occurs during a single computation
period). The Advisory Committee credits Hours of Service under this
paragraph (c) in accordance with the rules of paragraphs (b) and (c) of
Labor Reg. Section 2530.200b-2, which the Plan, by this reference,
specifically incorporates in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more
than one of the above paragraphs. A computation period for purposes of this
Section 1.27 is the Plan Year, Year of Service period, Break in Service period
or other period, as determined under the Plan provision for which the Advisory
Committee is measuring an Employee's Hours of Service. The Advisory Committee
will resolve any ambiguity with respect to the crediting of an Hour of Service
in favor of the Employee.
(A) METHOD OF CREDITING HOURS OF SERVICE. The Employer must elect in its
Adoption Agreement the method the Advisory Committee will use in crediting an
Employee with Hours of Service. For purposes of the Plan, "actual" method means
the determination of Hours of Service from records of hours worked and hours
for which the Employer makes payment or for which payment is due from the
Employer. If the Employer elects to apply an "equivalency" method, for each
equivalency period for which the Advisory Committee would credit the Employee
with at least one Hour of Service, the Advisory Committee will credit the
Employee with: (i) 10 Hours of Service for a daily equivalency; (ii) 45 Hours
of Service for a weekly equivalency; (iii) 95 Hours of Service for a
semimonthly payroll period equivalency; and (iv) 190 Hours of Service for a
monthly equivalency.
(B) MATERNITY/PATERNITY LEAVE. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care of the Employee's
child immediately following the child's birth or placement. The Advisory
Committee credits Hours of Service under this paragraph on the basis of the
number of Hours of Service the Employee would receive if he were paid during
the absence period or, if the Advisory Committee cannot determine the number of
Hours of Service the Employee would receive, on the basis of 8 hours per day
during the absence period. The Advisory Committee will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee's
Break in Service. The Advisory Committee credits all Hours of Service described
in this paragraph to the computation period in which the absence period begins
or, if the Employee does not need these Hours of Service to prevent a Break in
Service in the computation period in which his absence period begins, the
Advisory Committee credits these Hours of Service to the immediately following
computation period.
1.28 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.28 in a nondiscriminatory, consistent and uniform manner. If the Employer's
Plan is a Nonstandardized Plan, the Employer may provide an alternate
definition of disability in an addendum to its Adoption Agreement, numbered
Section 1.28.
1.06
<PAGE> 16
1.29 SERVICE FOR PREDECESSOR EMPLOYER. If the Employer maintains the
plan of a predecessor employer, the Plan treats service of the Employee with
the predecessor employer as service with the Employer. If the Employer does not
maintain the plan of a predecessor employer, the Plan does not credit service
with the predecessor employer, unless the Employer identifies the predecessor
in its Adoption Agreement and specifies the purposes for which the Plan will
credit service with that predecessor employer.
1.30 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code Section
414(c)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours
of Service, determining Years of Service and Breaks in Service under Articles
II and V, applying the Participation Test and the Coverage Test under Section
3.06(E), applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. However, an Employer may contribute to the Plan
only by being a signatory to the Execution Page of the Adoption Agreement or to
a Participation Agreement to the Employer's Adoption Agreement. If one or more
of the Employer's related group members become Participating Employers by
executing a Participation Agreement to the Employer's Adoption Agreement, the
term "Employer" includes the participating related group members for all
purposes of the Plan, and "Plan Administrator" means the Employer that is the
signatory to the Execution Page of the Adoption Agreement.
If the Employer's Plan is a Standardized Plan, all Employees of the
Employer or of any member of the Employer's related group, are eligible to
participate in the Plan, irrespective of whether the related group member
directly employing the Employee is a Participating Employer. If the Employer's
Plan is a Nonstandardized Plan, the Employer must specify in Section 1.07 of
its Adoption Agreement, whether the Employees of related group members that are
not Participating Employers are eligible to participate in the Plan. Under a
Nonstandardized Plan, the Employer may elect to exclude from the definition of
"Compensation" for allocation purposes any Compensation received from a related
employer that has not executed a Participation Agreement and whose Employees
are not eligible to participate in the Plan.
1.31 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee
of the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one year and
who performs services historically performed by employees in the Employer's
business field. If a Leased Employee is treated as an Employee by reason of
this Section 1.31 of the Plan, "Compensation" includes Compensation from the
leasing organization which is attributable to services performed for the
Employer.
(A) SAFE HARBOR PLAN EXCEPTION. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of
the Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.12).
(B) OTHER REQUIREMENTS. The Advisory Committee must apply this Section 1.31 in
a manner consistent with Code Sections 414(n) and 414(o) and the regulations
issued under those Code sections. The Employer must specify in the Adoption
Agreement the manner in which the Plan will determine the allocation of
Employer contributions and Participant forfeitures on behalf of a Participant
if the Participant is a Leased Employee covered by a plan maintained by the
leasing organization.
1.07
<PAGE> 17
1.32 SPECIAL RULES FOR OWNER-EMPLOYEES. The following special provisions
and restrictions apply to Owner-Employees:
(a) If the Plan provides contributions or benefits for an
Owner-Employee or for a group of Owner-Employees who controls the trade
or business with respect to which this Plan is established and the
Owner-Employee or Owner-Employees also control as Owner-Employees one or
more other trades or businesses, plans must exist or be established with
respect to all the controlled trades or businesses so that when the plans
are combined they form a single plan which satisfies the requirements of
Code Section 401(a) and Code Section 401(d) with respect to the employees
of the controlled trades or businesses.
(b) The Plan excludes an Owner-Employee or group of Owner-Employees
if the Owner-Employee or group of Owner- Employees controls any other
trade or business, unless the employees of the other controlled trade or
business participate in a plan which satisfies the requirements of Code
Section 401(a) and Code Section 401(d). The other qualified plan must
provide contributions and benefits which are not less favorable than the
contributions and benefits provided for the Owner-Employee or group of
Owner-Employees under this Plan, or if an Owner-Employee is covered under
another qualified plan as an Owner-Employee, then the plan established
with respect to the trade or business he does control must provide
contributions or benefits as favorable as those provided under the most
favorable plan of the trade or business he does not control. If the
exclusion of this paragraph (b) applies and the Employer's Plan is a
Standardized Plan, the Employer may not participate or continue to
participate in this Master Plan and the Employer's Plan becomes an
individually-designed plan for purposes of qualification reliance.
(c) For purposes of paragraphs (a) and (b) of this Section 1.32, an
Owner-Employee or group of Owner-Employees controls a trade or business
if the Owner-Employee or Owner-Employees together (1) own the entire
interest in an unincorporated trade or business, or (2) in the case of a
partnership, own more than 50% of either the capital interest or the
profits interest in the partnership.
1.33 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only
qualified plan maintained by the Employer, the Plan is top heavy for a Plan
Year if the top heavy ratio as of the Determination Date exceeds 60%. The top
heavy ratio is a fraction, the numerator of which is the sum of the present
value of Accrued Benefits of all Key Employees as of the Determination Date and
the denominator of which is a similar sum determined for all Employees. The
Advisory Committee must include in the top heavy ratio, as part of the present
value of Accrued Benefits, any contribution not made as of the Determination
Date but includible under Code Section 416 and the applicable Treasury
regulations, and distributions made within the Determination Period. The
Advisory Committee must calculate the top heavy ratio by disregarding the
Accrued Benefit (and distributions, if any, of the Accrued Benefit) of any
Non-Key Employee who was formerly a Key Employee, and by disregarding the
Accrued Benefit (including distributions, if any, of the Accrued Benefit) of an
individual who has not received credit for at least one Hour of Service with
the Employer during the Determination Period. The Advisory Committee must
calculate the top heavy ratio, including the extent to which it must take into
account distributions, rollovers and transfers, in accordance with Code Section
416 and the regulations under that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is
terminated, this Plan is top heavy only if it is part of the Required
Aggregation Group, and the top heavy ratio for the Required Aggregation Group
and for the Permissive Aggregation Group, if any, each exceeds 60%. The
Advisory Committee will calculate the top heavy ratio in the same manner as
required by the first paragraph of this Section 1.33, taking into account all
plans within the Aggregation Group. To the extent the Advisory Committee must
take into account distributions to a Participant, the Advisory Committee must
include distributions from a terminated plan which would have been part of the
Required Aggregation Group if it were in existence on the Determination Date.
The Advisory Committee will calculate the present value of accrued benefits
under defined benefit plans or simplified employee pension plans included
within the group in accordance with the terms of those plans, Code Section 416
and the regulations under that Code section. If a Participant in a defined
benefit plan is a Non-Key Employee, the Advisory Committee will determine his
accrued benefit under the accrual method, if any, which is applicable uniformly
to all defined benefit plans maintained by the Employer or, if there is no
uniform method, in accordance with the slowest accrual rate permitted under the
fractional rule accrual method described in
1.08
<PAGE> 18
Code Section 411(b)(1)(C). If the Employer maintains a defined benefit plan,
the Employer must specify in Adoption Agreement Section 3.18 the actuarial
assumptions (interest and mortality only) the Advisory Committee will use to
calculate the present value of benefits from a defined benefit plan. If an
aggregated plan does not have a valuation date coinciding with the
Determination Date, the Advisory Committee must value the Accrued Benefits in
the aggregated plan as of the most recent valuation date falling within the
twelve-month period ending on the Determination Date, except as Code Section
416 and applicable Treasury regulations require for the first and second plan
year of a defined benefit plan. The Advisory Committee will calculate the top
heavy ratio with reference to the Determination Dates that fall within the same
calendar year.
(A) STANDARDIZED PLAN. If the Employer's Plan is a Standardized Plan, the Plan
operates as a deemed top heavy plan in all Plan Years, except, if the
Standardized Plan includes a Code Section 401(k) arrangement, the Employer may
elect to apply the top heavy requirements only in Plan Years for which the Plan
actually is top heavy. Under a deemed top heavy plan, the Advisory Committee
need not determine whether the Plan actually is top heavy. However, if the
Employer, in Adoption Agreement Section 3.18, elects to override the 100%
limitation, the Advisory Committee will need to determine whether a deemed top
heavy Plan's top heavy ratio for a Plan Year exceeds 90%.
(B) DEFINITIONS. For purposes of applying the provisions of this Section 1.33:
(1) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year
in the Determination Period: (i) has Compensation in excess of 50% of
the dollar amount prescribed in Code Section 415(b)(1)(A) (relating to
defined benefit plans) and is an officer of the Employer; (ii) has
Compensation in excess of the dollar amount prescribed in Code Section
415(c)(1)(A) (relating to defined contribution plans) and is one of the
Employees owning the ten largest interests in the Employer; (iii) is a
more than 5% owner of the Employer; or (iv) is a more than 1% owner of
the Employer and has Compensation of more than $150,000. The
constructive ownership rules of Code Section 318 (or the principles of
that section, in the case of an unincorporated Employer,) will apply to
determine ownership in the Employer. The number of officers taken into
account under clause (i) will not exceed the greater of 3 or 10% of the
total number (after application of the Code Section 414(q) exclusions)
of Employees, but no more than 50 officers. The Advisory Committee will
make the determination of who is a Key Employee in accordance with Code
Section 416(i)(1) and the regulations under that Code section.
(2) "Non-Key Employee" is an employee who does not meet the definition
of Key Employee.
(3) "Compensation" means Compensation as determined under Section 1.09
for purposes of identifying Highly Compensated Employees.
(4) "Required Aggregation Group" means: (i) each qualified plan of the
Employer in which at least one Key Employee participates at any time
during the Determination Period; and (ii) any other qualified plan of
the Employer which enables a plan described in clause (i) to meet the
requirements of Code Section 401(a)(4) or of Code Section 410.
(5) "Permissive Aggregation Group" is the Required Aggregation Group
plus any other qualified plans maintained by the Employer, but only if
such group would satisfy in the aggregate the requirements of Code
Section 401(a)(4) and of Code Section 410. The Advisory Committee will
determine the Permissive Aggregation Group.
(6) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.30.
(7) "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the Plan,
the Accounting Date of that Plan Year. The "Determination Period" is the
5 year period ending on the Determination Date.
1.09
<PAGE> 19
1.34 "Paired Plans" means the Employer has adopted two Standardized
Plan Adoption Agreements offered with this Master Plan, one Adoption Agreement
being a Paired Profit Sharing Plan and one Adoption Agreement being a Paired
Pension Plan. A Paired Profit Sharing Plan may include a Code Section 401(k)
arrangement. A Paired Pension Plan must be a money purchase pension plan or a
target benefit pension plan. Paired Plans must be the subject of a favorable
opinion letter issued by the National Office of the Internal Revenue Service.
This Master Plan does not pair any of its Standardized Plan Adoption Agreements
with Standardized Plan Adoption Agreements under a defined benefit master plan.
1.35 "Retirement Investment Trust" means the open-end, diversified,
management investment company, or any successor thereto by change of name or
otherwise, that offers collective investment funds for retirement accounts as
to which Texas Commerce Bank National Association or an affiliated bank serves
as a trustee. The Retirement Investment Trust is explained concisely in the
current Retirement Investment Trust Prospectus.
* * * * * * * * * * * * * * *
1.10
<PAGE> 20
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the Plan in
accordance with the participation option selected by the Employer in its
Adoption Agreement. If this Plan is a restated Plan, each Employee who was a
Participant in the Plan on the day before the Effective Date continues as a
Participant in the Plan, irrespective of whether he satisfies the participation
conditions in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Adoption Agreement Section 2.01, the Plan takes
into account all of his Years of Service with the Employer, except as provided
in Section 2.03. "Year of Service" means an eligibility computation period
during which the Employee completes not less than the number of Hours of
Service specified in the Employer's Adoption Agreement. The initial eligibility
computation period is the first 12 consecutive month period measured from the
Employment Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the Employer in
its Adoption Agreement. If the Employer elects to measure subsequent periods on
a Plan Year basis, an Employee who receives credit for the required number of
Hours of Service during the initial eligibility computation period and during
the first applicable Plan Year will receive credit for two Years of Service
under Article II. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer. If the Employer
elects a service condition under Adoption Agreement Section 2.01 based on
months, the Plan does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs a "Break
in Service" if during any 12 consecutive month period he does not complete more
than 500 Hours of Service with the Employer. The "12 consecutive month period"
under this Section 2.03 is the same 12 consecutive month period for which the
Plan measures "Years of Service" under Section 2.02.
(A) 2-YEAR ELIGIBILITY. If the Employer elects a 2 years of service condition
for eligibility purposes under Adoption Agreement Section 2.01, the Plan treats
an Employee who incurs a one year Break in Service and who has never become a
Participant as a new Employee on the date he first performs an Hour of Service
for the Employer after the Break in Service.
(B) SUSPENSION OF YEARS OF SERVICE. The Employer must elect in its Adoption
Agreement whether a Participant will incur a suspension of Years of Service
after incurring a one year Break in Service. If this rule applies under the
Employer's Plan, the Plan disregards a Participant's Years of Service (as
defined in Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan suspends the
Participant's participation in the Plan. If the Participant completes a Year of
Service following his Break in Service, the Plan restores that Participant's
pre-Break Years of Service (and the Participant resumes active participation in
the Plan) retroactively to the first day of the computation period in which the
Participant earns the first post-Break Year of Service. The initial computation
period under this Section 2.03(B) is the 12 consecutive month period measured
from the date the Participant first receives credit for an Hour of Service
following the one year Break in Service period. The Plan measures any
subsequent periods, if necessary, in a manner consistent with the computation
period selection in Adoption Agreement Section 2.02. This Section 2.03(B) does
not affect a Participant's vesting credit under Article V and, during a
suspension period, the Participant's Account continues to share fully in Trust
Fund allocations under Section 9.11. Furthermore, this Section 2.03(B) will
not result in the restoration of any Year of Service disregarded under the
Break in Service rule of Section 2.03(A).
2.01
<PAGE> 21
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
with the Employer terminates will re-enter the Plan as a Participant on the
date of his re-employment, subject to the Break in Service rule, if applicable,
under Section 2.03(B). An Employee who satisfies the Plan's eligibility
conditions but who terminates employment with the Employer prior to becoming a
Participant will become a Participant on the later of the Plan Entry Date on
which he would have entered the Plan had he not terminated employment or the
date of his re-employment, subject to the Break in Service rule, if applicable,
under Section 2.03(B). Any Employee who terminates employment prior to
satisfying the Plan's eligibility conditions becomes a Participant in
accordance with Adoption Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not incurred a
Separation from Service but ceases to be eligible to participate in the Plan,
by reason of employment within an employment classification excluded by the
Employer under Adoption Agreement Section 1.07, the Advisory Committee must
treat the Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The Advisory
Committee determines a Participant's sharing in the allocation of Employer
contributions and Participant forfeitures, if applicable, by disregarding his
Compensation paid by the Employer for services rendered in his capacity as an
Excluded Employee. However, during such period of exclusion, the Participant,
without regard to employment classification, continues to receive credit for
vesting under Article V for each included Year of Service and the Participant's
Account continues to share fully in Trust Fund allocations under Section 9.11.
If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes
into account all of the Participant's included Years of Service with the
Employer as an Excluded Employee for purposes of vesting credit under Article
V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is a
Standardized Plan, the Plan does not permit an otherwise eligible Employee nor
any Participant to elect not to participate in the Plan. If the Employer's Plan
is a Nonstandardized Plan, the Employer must specify in its Adoption Agreement
whether an Employee eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be effective for a
particular Plan Year, the Employee or Participant must file the election in
writing with the Plan Administrator not later than the time specified in the
Employer's Adoption Agreement. The Employer may not make a contribution under
the Plan for the Employee or for the Participant for the Plan Year for which
the election is effective, nor for any succeeding Plan Year, unless the
Employee or Participant re-elects to participate in the Plan. After an
Employee's or Participant's election not to participate has been effective for
at least the minimum period prescribed by the Employer's Adoption Agreement,
the Employee or Participant may re-elect to participate in the Plan for any
Plan Year and subsequent Plan Years. An Employee or Participant may re-elect to
participate in the Plan by filing his election in writing with the Plan
Administrator not later than the time specified in the Employer's Adoption
Agreement. An Employee or Participant who re-elects to participate may again
elect not to participate only as permitted in the Employer's Adoption
Agreement. If an Employee is a Self-Employed Individual, the Employee's
election (except as permitted by Treasury regulations without creating a Code
Section 401(k) arrangement with respect to that Self-Employed Individual) must
be effective no later than the date the Employee first would become a
Participant in the Plan and the election is irrevocable. The Plan Administrator
must furnish an Employee or a Participant any form required for purposes of an
election under this Section 2.06. An election timely filed is effective for the
entire Plan Year.
A Participant who elects not to participate may not receive a
distribution of his Accrued Benefit attributable either to Employer or to
Participant contributions except as provided under Article IV or under Article
VI. However, for each Plan Year for which a Participant's election not to
participate is effective, the Participant's Account, if any, continues to share
in Trust Fund allocations under Article IX. Furthermore, the Employee or the
Participant receives vesting credit under Article V for each included Year of
Service during the period the election not to participate is effective.
* * * * * * * * * * * * * * *
2.02
<PAGE> 22
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
PART 1. AMOUNT OF EMPLOYER CONTRIBUTIONS AND PLAN ALLOCATIONS: SECTIONS 3.01
THROUGH 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to the Trust
the amount determined by application of the contribution option selected by the
Employer in its Adoption Agreement. The Employer may not make a contribution to
the Trust for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its contribution
is not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's contribution
made by the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code Section 404. The Trustee will
not return any portion of the Employer's contribution under the provisions of
this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only
to the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution
returnable for any losses attributable to it. The Trustee may require the
Employer to furnish it whatever evidence the Trustee deems necessary to enable
the Trustee to confirm the amount the Employer has requested be returned is
properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its
contribution for each Plan Year in one or more installments without interest.
The Employer must make its contribution to the Plan within the time prescribed
by the Code or applicable Treasury regulations. Subject to the consent of the
Trustee, the Employer may make its contribution in property rather than in
cash, provided the contribution of property is not a prohibited transaction
under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) METHOD OF ALLOCATION. The Employer must specify in its Adoption Agreement
the manner of allocating each annual Employer contribution to this Trust.
(B) TOP HEAVY MINIMUM ALLOCATION. The Plan must comply with the provisions of
this Section 3.04(B), subject to the elections in the Employer's Adoption
Agreement.
(1) TOP HEAVY MINIMUM ALLOCATION UNDER STANDARDIZED PLAN. Subject to the
Employer's election under Section 3.04(B)(3), the top heavy minimum allocation
requirement applies to a Standardized Plan for each Plan Year, irrespective of
whether the Plan is top heavy.
(a) Each Participant employed by the Employer on the last day
of the Plan Year will receive a top heavy minimum allocation for
that Plan Year. The Employer may elect in Section 3.04 of its
Adoption Agreement to apply this paragraph (a) only to a Participant
who is a Non-Key Employee.
3.01
<PAGE> 23
(b) Subject to any overriding elections in Section 3.18 of the
Employer's Adoption Agreement, the top heavy minimum allocation is
the lesser of 3% of the Participant's Compensation for the Plan Year
or the highest contribution rate for the Plan Year made on behalf of
any Participant for the Plan Year. However, if the Employee
participates in Paired Plans, the top heavy minimum allocation is 3%
of his Compensation. If, under Adoption Agreement Section 3.04, the
Employer elects to apply paragraph (a) only to a Participant who is
a Non-Key Employee, the Advisory Committee will determine the
"highest contribution rate" described in the first sentence of this
paragraph (b) by reference only to the contribution rates of
Participants who are Key Employees for the Plan Year.
(2) TOP HEAVY MINIMUM ALLOCATION UNDER NONSTANDARDIZED PLAN. The top
heavy minimum allocation requirement applies to a Nonstandardized Plan only in
Plan Years for which the Plan is top heavy. Except as provided in the
Employer's Adoption Agreement, if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and is employed
by the Employer on the last day of the Plan Year will receive a top
heavy minimum allocation for that Plan Year, irrespective of whether
he satisfies the Hours of Service condition under Section 3.06 of
the Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser of 3% of the
Non-Key Employee's Compensation for the Plan Year or the highest
contribution rate for the Plan Year made on behalf of any Key
Employee. However, if a defined benefit plan maintained by the
Employer which benefits a Key Employee depends on this Plan to
satisfy the antidiscrimination rules of Code Section 401(a)(4) or
the coverage rules of Code Section 410 (or another plan benefiting
the Key Employee so depends on such defined benefit plan), the top
heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key
Employees.
(3) SPECIAL ELECTION FOR STANDARDIZED CODE SECTION 401(K) PLAN. If the
Employer's Plan is a Standardized Code Section 401(k) Plan, the Employer may
elect in Adoption Agreement Section 3.04 to apply the top heavy minimum
allocation requirements of Section 3.04(B)(1) only for Plan Years in which the
Plan actually is a top heavy plan.
(4) SPECIAL DEFINITIONS. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his Compensation level or because
of his failure to make elective deferrals under a Code Section 401(k)
arrangement or because of his failure to make mandatory contributions. For
purposes of subparagraph (1)(b) or (2)(b), "Compensation" means Compensation as
defined in Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to include
these amounts in Section 1.12 of its Adoption Agreement, any exclusion selected
in Section 1.12 of the Adoption Agreement (other than the exclusion of elective
contributions) does not apply, and any modification to the definition of
Compensation in Section 3.06 does not apply.
(5) DETERMINING CONTRIBUTION RATES. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of all Employer
contributions (not including Employer contributions to Social Security) and
forfeitures allocated to the Participant's Account for the Plan Year divided by
his Compensation for the entire Plan Year. However, for purposes of satisfying
a Participant's top heavy minimum allocation in Plan Years beginning after
December 31, 1988, the Participant's contribution rate does not include any
elective contributions under a Code Section 401(k) arrangement nor any Employer
matching contributions allocated on the basis of those elective contributions
or on the basis of employee contributions, except a Nonstandardized Plan may
include in the contribution rate any matching contributions not necessary to
satisfy the nondiscrimination requirements of Code Section 401(k) or of Code
Section 401(m).
If the Employee is a Participant in Paired Plans, the Advisory Committee
will consider the Paired Plans as a single Plan to determine a Participant's
contribution rate and to determine whether the Plans satisfy this top heavy
minimum allocation requirement. To determine a Participant's contribution rate
under a Nonstandardized Plan, the Advisory Committee must treat all qualified
top heavy defined contribution plans maintained by the Employer (or by any
related Employers described in Section 1.30) as a single plan.
3.02
<PAGE> 24
(6) NO ALLOCATIONS. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Participant (for purposes of
Section 3.04 (B)(1)(b)) or for any Key Employee (for purposes of Section
3.04(B)(2)(b)), the Plan does not require any top heavy minimum allocation for
the Plan Year, unless a top heavy minimum allocation applies because of the
maintenance by the Employer of more than one plan.
(7) ELECTION OF METHOD. The Employer must specify in its Adoption
Agreement the manner in which the Plan will satisfy the top heavy minimum
allocation requirement.
(a) If the Employer elects to make any necessary additional contribution
to this Plan, the Advisory Committee first will allocate the Employer
contributions (and Participant forfeitures, if any) for the Plan Year in
accordance with the provisions of Adoption Agreement Section 3.04. The
Employer then will contribute an additional amount for the Account of
any Participant entitled under this Section 3.04(B) to a top heavy
minimum allocation and whose contribution rate for the Plan Year, under
this Plan and any other plan aggregated under paragraph (5), is less
than the top heavy minimum allocation. The additional amount is the
amount necessary to increase the Participant's contribution rate to the
top heavy minimum allocation. The Advisory Committee will allocate the
additional contribution to the Account of the Participant on whose
behalf the Employer makes the contribution.
(b) If the Employer elects to guarantee the top heavy minimum allocation
under another plan, this Plan does not provide the top heavy minimum
allocation and the Advisory Committee will allocate the annual Employer
contributions (and Participant forfeitures) under the Plan solely in
accordance with the allocation method selected under Adoption Agreement
Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued
Benefit forfeited under the Plan is a Participant forfeiture. The Advisory
Committee will allocate Participant forfeitures in the manner specified by the
Employer in its Adoption Agreement. The Advisory Committee will continue to
hold the undistributed, non-vested portion of a terminated Participant's
Accrued Benefit in his Account solely for his benefit until a forfeiture occurs
at the time specified in Section 5.09 or if applicable, until the time
specified in Section 9.14. Except as provided under Section 5.04, a Participant
will not share in the allocation of a forfeiture of any portion of his Accrued
Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the
accrual of benefit (Employer contributions and Participant forfeitures) on the
basis of the Plan Year in accordance with the Employer's elections in its
Adoption Agreement.
(A) COMPENSATION TAKEN INTO ACCOUNT. The Employer must specify in its Adoption
Agreement the Compensation the Advisory Committee is to take into account in
allocating an Employer contribution to a Participant's Account for the Plan
Year in which the Employee first becomes a Participant. For all other Plan
Years, the Advisory Committee will take into account only the Compensation
determined for the portion of the Plan Year in which the Employee actually is a
Participant. The Advisory Committee must take into account the Employee's
entire Compensation for the Plan Year to determine whether the Plan satisfies
the top heavy minimum allocation requirement of Section 3.04(B). The Employer,
in an addendum to its Adoption Agreement numbered 3.06(A), may elect to measure
Compensation for the Plan Year for allocation purposes on the basis of a
specified period other than the Plan Year.
(B) HOURS OF SERVICE REQUIREMENT. Subject to the applicable minimum allocation
requirement of Section 3.04, the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's
Account if the Participant does not complete the applicable minimum Hours of
Service requirement specified in the Employer's Adoption Agreement.
3.03
<PAGE> 25
(C) EMPLOYMENT REQUIREMENT. If the Employer's Plan is a Standardized Plan, a
Participant who, during a particular Plan Year, completes the accrual
requirements of Adoption Agreement Section 3.06 will share in the allocation of
Employer contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan Year. If the
Employer's Plan is a Nonstandardized Plan, the Employer must specify in its
Adoption Agreement whether the Participant will accrue a benefit if he is not
employed by the Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit plan, whether
Nonstandardized or Standardized, the Plan conditions benefit accrual on
employment with the Employer on the last day of the Plan Year for the Plan Year
in which the Employer terminates the Plan.
(D) OTHER REQUIREMENTS. If the Employer's Adoption Agreement includes options
for other requirements affecting the Participant's accrual of benefits under
the Plan, the Advisory Committee will apply this Section 3.06 in accordance
with the Employer's Adoption Agreement selections.
(E) SUSPENSION OF ACCRUAL REQUIREMENTS UNDER NONSTANDARDIZED PLAN. If the
Employer's Plan is a Nonstandardized Plan, the Employer may elect in its
Adoption Agreement to suspend the accrual requirements elected under Adoption
Agreement Section 3.06 if, for any Plan Year beginning after December 31, 1989,
the Plan fails to satisfy the Participation Test or the Coverage Test. A Plan
satisfies the Participation Test if, on each day of the Plan Year, the number
of Employees who benefit under the Plan is at least equal to the lesser of 50
or 40% of the total number of Includible Employees as of such day. A Plan
satisfies the Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly
Compensated Employees as of such day. "Includible" Employees are all Employees
other than: (1) those Employees excluded from participating in the Plan for the
entire Plan Year by reason of the collective bargaining unit exclusion or the
nonresident alien exclusion under Adoption Agreement Section 1.07 or by reason
of the participation requirements of Sections 2.01 and 2.03; and (2) any
Employee who incurs a Separation from Service during the Plan Year and fails to
complete at least 501 Hours of Service for the Plan Year. A "Nonhighly
Compensated Employee" is an Employee who is not a Highly Compensated Employee
and who is not a family member aggregated with a Highly Compensated Employee
pursuant to Section 1.09 of the Plan.
For purposes of the Participation Test and the Coverage Test, an
Employee is benefiting under the Plan on a particular date if, under Adoption
Agreement Section 3.04, he is entitled to an allocation for the Plan Year.
Under the Participation Test, when determining whether an Employee is entitled
to an allocation under Adoption Agreement Section 3.04, the Advisory Committee
will disregard any allocation required solely by reason of the top heavy
minimum allocation, unless the top heavy minimum allocation is the only
allocation made under the Plan for the Plan Year.
If this Section 3.06(E) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service, from the latest to
the earliest Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If two or more
Includible Employees have a Separation from Service on the same day, the
Advisory Committee will suspend the accrual requirements for all such
Includible Employees, irrespective of whether the Plan can satisfy the
Participation Test and the Coverage Test by accruing benefits for fewer than
all such Includible Employees. If the Plan suspends the accrual requirements
for an Includible Employee, that Employee will share in the allocation of
Employer contributions and Participant forfeitures, if any, without regard to
the number of Hours of Service he has earned for the Plan Year and without
regard to whether he is employed by the Employer on the last day of the Plan
Year. If the Employer's Plan includes Employer matching contributions subject
to Code Section 401(m), this suspension of accrual requirements applies
separately to the Code Section 401(m) portion of the Plan, and the Advisory
Committee will treat an Employee as benefiting under that portion of the Plan
if he is an Eligible Employee for purposes of the Code Section 401(m)
nondiscrimination test. The Employer may modify the operation of this Section
3.06(E) by electing appropriate modifications in Section 3.06 of its Adoption
Agreement.
3.04
<PAGE> 26
PART 2. LIMITATIONS ON ALLOCATIONS: SECTIONS 3.07 THROUGH 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants in this
Plan who do not participate, and who have never participated, in another
qualified plan or in a welfare benefit fund (as defined in Code Section 419(e))
maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount. If the amount the Employer otherwise
would contribute to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the Employer
will reduce the amount of its contribution so the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount. If an allocation of
Employer contributions, pursuant to Section 3.04, would result in an Excess
Amount (other than an Excess Amount resulting from the circumstances described
in Section 3.10) to the Participant's Account, the Advisory Committee will
reallocate the Excess Amount to the remaining Participants who are eligible for
an allocation of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the Participant whose
Account otherwise would receive the Excess Amount is not eligible for an
allocation of Employer contributions.
3.08 Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Advisory Committee may determine the
Maximum Permissible Amount on the basis of the Participant's estimated annual
Compensation for such Limitation Year. The Advisory Committee must make this
determination on a reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer contributions
(including any allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.
3.09 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the Maximum Permissible
Amount for such Limitation Year on the basis of the Participant's actual
Compensation for such Limitation Year.
3.10 If, pursuant to Section 3.09, or because of the allocation of
forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Advisory Committee will dispose of such Excess Amount as
follows:
(a) The Advisory Committee will return any nondeductible voluntary
Employee contributions to the Participant to the extent the return would
reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Advisory Committee will use the Excess Amount(s) to
reduce future Employer contributions (including any allocation of
forfeitures) under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the Participant. If the
Employer's Plan is a profit sharing plan, the Participant may elect to
limit his Compensation for allocation purposes to the extent necessary
to reduce his allocation for the Limitation Year to the Maximum
Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including allocation
of forfeitures) for all remaining Participants in the next Limitation
Year, and in each succeeding Limitation Year if necessary. Neither the
Employer nor any Employee may contribute to the Plan for any Limitation
Year in which the Plan is unable to allocate fully a suspense account
maintained pursuant to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
3.05
<PAGE> 27
[Note: Sections 3.11 through 3.16 apply only to Participants who, in
addition to this Plan, participate in one or more plans (including Paired
Plans), all of which are qualified Master or Prototype defined contribution
plans or welfare benefit funds (as defined in Code Section 419(e)) maintained
by the Employer during the Limitation Year.]
3.11 The amount of Annual Additions which the Advisory Committee may
allocate under this Plan on a Participant's behalf for a Limitation Year may
not exceed the Maximum Permissible Amount, reduced by the sum of any Annual
Additions allocated to the Participant's Accounts for the same Limitation Year
under this Plan and such other defined contribution plan. If the amount the
Employer otherwise would contribute to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to exceed this
limitation, the Employer will reduce the amount of its contribution so the
Annual Additions under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other than an
Excess Amount resulting from the circumstances described in Section 3.10) to
the Participant's Account, the Advisory Committee will reallocate the Excess
Amount to the remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The
Advisory Committee will make this reallocation on the basis of the allocation
method under the Plan as if the Participant whose Account otherwise would
receive the Excess Amount is not eligible for an allocation of Employer
contributions.
3.12 Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Advisory Committee may determine the
amounts referred to in 3.11 above on the basis of the Participant's estimated
annual Compensation for such Limitation Year. The Advisory Committee will make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Advisory Committee must reduce any Employer
contribution (including allocation of forfeitures) based on estimated annual
Compensation by any Excess Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end of the
Limitation Year, the Advisory Committee will determine the amounts referred to
in 3.11 on the basis of the Participant's actual Compensation for such
Limitation Year.
3.14 If pursuant to Section 3.13, or because of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount will consist of the
Amounts last allocated. The Advisory Committee will determine the Amounts last
allocated by treating the Annual Additions attributable to a welfare benefit
fund as allocated first, irrespective of the actual allocation date under the
welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the Excess
Amount attributed to this Plan, if the Advisory Committee allocates an Excess
Amount to a Participant on an allocation date of this Plan which coincides with
an allocation date of another plan.
3.16 The Advisory Committee will dispose of any Excess Amounts
attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in addition to
this Plan, participate in one or more qualified plans which are qualified
defined contribution plans other than a Master or Prototype plan maintained by
the Employer during the Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual Additions
which the Advisory Committee may allocate under this Plan on behalf of any
Participant are limited in accordance with the provisions of Section 3.11
through 3.16, as though the other plan were a Master or Prototype plan, unless
the Employer provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.06
<PAGE> 28
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer maintains a
defined benefit plan, or has ever maintained a defined benefit plan which the
Employer has terminated, then the sum of the defined benefit plan fraction and
the defined contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0. The Employer must provide in Adoption Agreement
Section 3.18 the manner in which the Plan will satisfy this limitation. The
Employer also must provide in its Adoption Agreement Section 3.18 the manner in
which the Plan will satisfy the top heavy requirements of Code Section 416
after taking into account the existence (or prior maintenance) of the defined
benefit plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III, the
following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year, of (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee
contributions. Except to the extent provided in Treasury regulations,
Annual Additions include excess contributions described in Code Section
401(k), excess aggregate contributions described in Code Section 401(m)
and excess deferrals described in Code Section 402(g), irrespective of
whether the plan distributes or forfeits such excess amounts. Annual
Additions also include Excess Amounts reapplied to reduce Employer
contributions under Section 3.10. Amounts allocated after March 31,
1984, to an individual medical account (as defined in Code Section
415(l)(2)) included as part of a defined benefit plan maintained by the
Employer are Annual Additions. Furthermore, Annual Additions include
contributions paid or accrued after December 31, 1985, for taxable years
ending after December 31, 1985, attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as defined
in Code Section 419A(d)(3)) under a welfare benefit fund (as defined in
Code Section 419(e)) maintained by the Employer.
(b) "Compensation" - For purposes of applying the limitations of Part 2
of this Article III, "Compensation" means Compensation as defined in
Section 1.12, except Compensation does not include elective
contributions, irrespective of whether the Employer has elected to
include these amounts as Compensation under Section 1.12 of its Adoption
Agreement, and any exclusion selected in Section 1.12 of the Adoption
Agreement (other than the exclusion of elective contributions) does not
apply.
(c) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.30. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.30 by modifying Code
Sections 414(b) and (c) in accordance with Code Section 415(h).
(d) "Excess Amount" - The excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer under
Adoption Agreement Section 1.17. All qualified plans of the Employer
must use the same Limitation Year. If the Employer amends the Limitation
Year to a different 12 consecutive month period, the new Limitation Year
must begin on a date within the Limitation Year for which the Employer
makes the amendment, creating a short Limitation Year.
(f) "Master or Prototype Plan" - A plan the form of which is the subject
of a favorable notification letter or a favorable opinion letter from
the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
Section 415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for
the Limitation Year. If there is a short Limitation Year because of a
change in Limitation Year, the Advisory Committee will multiply the
$30,000 (or adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
3.07
<PAGE> 29
(h) "Defined contribution plan" - A retirement plan which provides for
an individual account for each participant and for benefits based solely
on the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account.
The Advisory Committee must treat all defined contribution plans
(whether or not terminated) maintained by the Employer as a single plan.
Solely for purposes of the limitations of Part 2 of this Article III,
the Advisory Committee will treat employee contributions made to a
defined benefit plan maintained by the Employer as a separate defined
contribution plan. The Advisory Committee also will treat as a defined
contribution plan an individual medical account (as defined in Code
Section 415(l)(2)) included as part of a defined benefit plan maintained
by the Employer and, for taxable years ending after December 31, 1985, a
welfare benefit fund under Code Section 419(e) maintained by the
Employer to the extent there are post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code
Section 419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does not provide
for individual accounts for Employer contributions. The Advisory
Committee must treat all defined benefit plans (whether or not
terminated) maintained by the Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (l) apply only if the
limitation described in Section 3.18 applies to the Employer's Plan.]
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined benefit plan(s)
- --------------------------------------------------------------------------------
The lesser of (i) 125% (subject to the "100% limitation" in paragraph (l)) of
the dollar limitation in effect under Code Section 415(b)(1)(A) for the
Limitation Year, or (ii) 140% of the Participant's average Compensation
for his high three (3) consecutive Years of Service
To determine the denominator of this fraction, the Advisory Committee
will make any adjustment required under Code Section 415(b) and will determine a
Year of Service, unless otherwise provided in an addendum to Adoption Agreement
Section 3.18, as a Plan Year in which the Employee completed at least 1,000
Hours of Service. The "projected annual benefit" is the annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life annuity or qualified
joint and survivor annuity) of the Participant under the terms of the defined
benefit plan on the assumptions he continues employment until his normal
retirement age (or current age, if later) as stated in the defined benefit plan,
his compensation continues at the same rate as in effect in the Limitation Year
under consideration until the date of his normal retirement age and all other
relevant factors used to determine benefits under the defined benefit plan
remain constant as of the current Limitation Year for all future Limitation
Years.
CURRENT ACCRUED BENEFIT. If the Participant accrued benefits in one or
more defined benefit plans maintained by the Employer which were in existence on
May 6, 1986, the dollar limitation used in the denominator of this fraction will
not be less than the Participant's Current Accrued Benefit. A Participant's
Current Accrued Benefit is the sum of the annual benefits under such defined
benefit plans which the Participant had accrued as of the end of the 1986
Limitation Year (the last Limitation Year beginning before January 1, 1987),
determined without regard to any change in the terms or conditions of the Plan
made after May 5, 1986, and without regard to any cost of living adjustment
occurring after May 5, 1986. This Current Accrued Benefit rule applies only if
the defined benefit plans individually and in the aggregate satisfied the
requirements of Code Section 415 as in effect at the end of the 1986 Limitation
Year.
3.08
<PAGE> 30
(k) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual Additions
to the Participant's Account under the defined contribution plan(s)
------------------------------------------------------------------------
The sum of the lesser of the following amounts determined for the
Limitation Year and for each prior Year of Service with the Employer:(i)
125% (subject to the "100% limitation" in paragraph (l)) of the
dollar limitation in effect under Code Section 415(c)(1)(A) for the
Limitation Year (determined without regard to the special dollar
limitations for employee stock ownership plans), or (ii) 35%
of the Participant's Compensation for the Limitation Year
For purposes of determining the defined contribution plan fraction, the
Advisory Committee will not recompute Annual Additions in Limitation Years
beginning prior to January 1, 1987, to treat all Employee contributions as
Annual Additions. If the Plan satisfied Code Section 415 for Limitation Years
beginning prior to January 1, 1987, the Advisory Committee will redetermine the
defined contribution plan fraction and the defined benefit plan fraction as of
the end of the 1986 Limitation Year, in accordance with this Section 3.19. If
the sum of the redetermined fractions exceeds 1.0, the Advisory Committee will
subtract permanently from the numerator of the defined contribution plan
fraction an amount equal to the product of (1) the excess of the sum of the
fractions over 1.0, times (2) the denominator of the defined contribution plan
fraction. In making the adjustment, the Advisory Committee must disregard any
accrued benefit under the defined benefit plan which is in excess of the Current
Accrued Benefit. This Plan continues any transitional rules applicable to the
determination of the defined contribution plan fraction under the Employer's
Plan as of the end of the 1986 Limitation Year.
(l) "100% limitation." If the 100% limitation applies, the Advisory Committee
must determine the denominator of the defined benefit plan fraction and the
denominator of the defined contribution plan fraction by substituting 100% for
125%. If the Employer's Plan is a Standardized Plan, the 100% limitation applies
in all Limitation Years, subject to any override provisions under Section 3.18
of the Employer's Adoption Agreement. If the Employer overrides the 100%
limitation under a Standardized Plan, the Employer must specify in its Adoption
Agreement the manner in which the Plan satisfies the extra minimum benefit
requirement of Code Section 416(h) and the 100% limitation must continue to
apply if the Plan's top heavy ratio exceeds 90%. If the Employer's Plan is a
Nonstandardized Plan, the 100% limitation applies only if: (i) the Plan's top
heavy ratio exceeds 90%; or (ii) the Plan's top heavy ratio is greater than 60%,
and the Employer does not elect in its Adoption Agreement Section 3.18 to
provide extra minimum benefits which satisfy Code Section 416(h)(2).
* * * * * * * * * * * * * * *
3.09
<PAGE> 31
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does not
permit Participant nondeductible contributions unless the Employer maintains
its Plan under a Code Section 401(k) Adoption Agreement. If the Employer does
not maintain its Plan under a Code Section 401(k) Adoption Agreement and, prior
to the adoption of this Master Plan, the Plan accepted Participant
nondeductible contributions for a Plan Year beginning after December 31, 1986,
those contributions must satisfy the requirements of Code Section 401(m). This
Section 4.01 does not prohibit the Plan's acceptance of Participant
nondeductible contributions prior to the first Plan Year commencing after the
Plan Year in which the Employer adopts this Master Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan may not
accept Participant deductible contributions after April 15, 1987. If the
Employer's Plan includes Participant deductible contributions ("DECs") made
prior to April 16, 1987, the Advisory Committee must maintain a separate
accounting for the Participant's Accrued Benefit attributable to DECs,
including DECs which are part of a rollover contribution described in Section
4.03. The Advisory Committee will treat the accumulated DECs as part of the
Participant's Accrued Benefit for all purposes of the Plan, except for purposes
of determining the top heavy ratio under Section 1.33. The Advisory Committee
may not use DECs to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant, with the
Employer's written consent and after filing with the Trustee the form
prescribed by the Advisory Committee, may contribute cash or other property to
the Trust other than as a voluntary contribution if the contribution is a
"rollover contribution" which the Code permits an employee to transfer either
directly or indirectly from one qualified plan to another qualified plan.
Before accepting a rollover contribution, the Trustee may require an Employee
to furnish satisfactory evidence that the proposed transfer is in fact a
"rollover contribution" which the Code permits an employee to make to a
qualified plan. A rollover contribution is not an Annual Addition under Part 2
of Article III.
The Trustee will invest the rollover contribution in a segregated
investment Account for the Participant's sole benefit unless the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee designation), in
its sole discretion, agrees to invest the rollover contribution as part of the
Trust Fund. The Trustee will not have any investment responsibility with
respect to a Participant's segregated rollover Account. The Participant,
however, from time to time, may direct the Trustee in writing as to the
investment of his segregated rollover Account in property, or property
interests, of any kind, real, personal or mixed; provided however, the
Participant may not direct the Trustee to make loans to his Employer. A
Participant's segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the Participant.
As of the Accounting Date (or other valuation date) for each Plan Year, the
Advisory Committee will allocate and credit the net income (or net loss) from a
Participant's segregated rollover Account and the increase or decrease in the
fair market value of the assets of a segregated rollover Account solely to that
Account. The Trustee is not liable nor responsible for any loss resulting to
any Beneficiary, nor to any Participant, by reason of any sale or investment
made or other action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Trustee will hold, administer and
distribute a rollover contribution in the same manner as any Employer
contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's eligibility
conditions, may make a rollover contribution to the Trust to the same extent
and in the same manner as a Participant. If an Employee makes a rollover
contribution to the Trust prior to satisfying the Plan's eligibility
conditions, the Advisory Committee and Trustee must treat the Employee as a
Participant for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or Participant
forfeitures under the Plan until he actually becomes a Participant in the Plan.
If the Employee has a Separation from Service prior to becoming a Participant,
the Trustee will distribute his rollover contribution Account to him as if it
were an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A Participant's
Accrued Benefit is, at all times, 100% Nonforfeitable to the extent the value
of his Accrued Benefit is derived from his Participant contributions described
in this Article IV.
4.01
<PAGE> 32
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A
Participant, by giving prior written notice to the Trustee, may withdraw all or
any part of the value of his Accrued Benefit derived from his Participant
contributions described in this Article IV. A distribution of Participant
contributions must comply with the joint and survivor requirements described in
Article VI, if those requirements apply to the Participant. A Participant may
not exercise his right to withdraw the value of his Accrued Benefit derived
from his Participant contributions more than once during any Plan Year. The
Trustee, in accordance with the direction of the Advisory Committee, will
distribute a Participant's unwithdrawn Accrued Benefit attributable to his
Participant contributions in accordance with the provisions of Article VI
applicable to the distribution of the Participant's Nonforfeitable Accrued
Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The Advisory
Committee must maintain a separate Account(s) in the name of each Participant
to reflect the Participant's Accrued Benefit under the Plan derived from his
Participant contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the balance of his
separate Participant contribution Account(s).
* * * * * * * * * * * * * * *
4.02
<PAGE> 33
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal
Retirement Age in its Adoption Agreement. A Participant's Accrued Benefit
derived from Employer contributions is 100% Nonforfeitable upon and after his
attaining Normal Retirement Age (if employed by the Employer on or after that
date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect in its
Adoption Agreement to provide a Participant's Accrued Benefit derived from
Employer contributions will be 100% Nonforfeitable if the Participant's
Separation from Service is a result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01 and 5.02,
for each Year of Service, a Participant's Nonforfeitable percentage of his
Accrued Benefit derived from Employer contributions equals the percentage in
the vesting schedule completed by the Employer in its Adoption Agreement.
(A) ELECTION OF SPECIAL VESTING FORMULA. If the Trustee makes a distribution
(other than a cash-out distribution described in Section 5.04) to a
partially-vested Participant, and the Participant has not incurred a Forfeiture
Break in Service at the relevant time, the Advisory Committee will establish a
separate Account for the Participant's Accrued Benefit. At any relevant time
following the distribution, the Advisory Committee will determine the
Participant's Nonforfeitable Accrued Benefit derived from Employer
contributions in accordance with the following formula: P(AB + (R x D)) -
(R x D).
To apply this formula, "P" is the Participant's current vesting
percentage at the relevant time, "AB" is the Participant's Employer-derived
Accrued Benefit at the relevant time, "R" is the ratio of "AB" to the
Participant's Employer-derived Accrued Benefit immediately following the
earlier distribution and "D" is the amount of the earlier distribution. If,
under a restated Plan, the Plan has made distribution to a partially-vested
Participant prior to its restated Effective Date and is unable to apply the
cash-out provisions of Section 5.04 to that prior distribution, this special
vesting formula also applies to that Participant's remaining Account. The
Employer, in an addendum to its Adoption Agreement, numbered Section 5.03, may
elect to modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/
RESTORATION OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a
partially-vested Participant receives a cash-out distribution before he incurs
a Forfeiture Break in Service (as defined in Section 5.08), the cash-out
distribution will result in an immediate forfeiture of the nonvested portion of
the Participant's Accrued Benefit derived from Employer contributions. See
Section 5.09. A partially-vested Participant is a Participant whose
Nonforfeitable Percentage determined under Section 5.03 is less than 100%. A
cash-out distribution is a distribution of the entire present value of the
Participant's Nonforfeitable Accrued Benefit.
(A) RESTORATION AND CONDITIONS UPON RESTORATION. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other
valuation date. Restoration of the Participant's Accrued Benefit includes
restoration of all Code Section 411(d)(6) protected benefits with respect to
that restored Accrued Benefit, in accordance with applicable Treasury
regulations. The Advisory Committee will not restore a re-employed
Participant's Accrued Benefit under this paragraph if:
(1) 5 years have elapsed since the Participant's first re-employment
date with the Employer following the cash- out distribution; or
5.01
<PAGE> 34
(2) The Participant incurred a Forfeiture Break in Service (as defined
in Section 5.08). This condition also applies if the Participant makes
repayment within the Plan Year in which he incurs the Forfeiture Break
in Service and that Forfeiture Break in Service would result in a
complete forfeiture of the amount the Advisory Committee otherwise would
restore.
(B) TIME AND METHOD OF RESTORATION. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory
Committee will restore the Participant's Accrued Benefit as of the Plan Year
Accounting Date coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Advisory Committee, to the
extent necessary, will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the Advisory
Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net income or gain for
the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B), the Employer
may eliminate as a means of restoration any of the amounts described in clauses
(1), (2) and (3) or may change the order of priority of these amounts. To the
extent the amounts described in clauses (1), (2) and (3) are insufficient to
enable the Advisory Committee to make the required restoration, the Employer
must contribute, without regard to any requirement or condition of Section
3.01, the additional amount necessary to enable the Advisory Committee to make
the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will make the restoration allocations
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan
Year of all re-employed Participants. The Advisory Committee will not take into
account any allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.
(C) 0% VESTED PARTICIPANT. The Employer must specify in its Adoption Agreement
whether the deemed cash-out rule applies to a 0% vested Participant. A 0%
vested Participant is a Participant whose Accrued Benefit derived from Employer
contributions is entirely forfeitable at the time of his Separation from
Service. If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a Separation from
Service, the Advisory Committee will apply the deemed cash-out rule as if the
0% vested Participant received a cash-out distribution on the date of the
Participant's Separation from Service. If the Participant's Account is entitled
to an allocation of Employer contributions or Participant forfeitures for the
Plan Year in which he has a Separation from Service, the Advisory Committee
will apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the first day of the first Plan Year beginning after
his Separation from Service. For purposes of applying the restoration
provisions of this Section 5.04, the Advisory Committee will treat the 0%
vested Participant as repaying his cash-out "distribution" on the first date of
his re-employment with the Employer. If the deemed cash-out rule does not apply
to the Employer's Plan, a 0% vested Participant will not incur a forfeiture
until he incurs a Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the Advisory
Committee restores the Participant's Accrued Benefit, as described in Section
5.04, the Trustee will invest the cash-out amount the Participant has repaid in
a segregated Account maintained solely for that Participant. The Trustee must
invest the amount in the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a combination of
both), or in other fixed income investments. Until commingled with the balance
of the Trust Fund on the date the Advisory Committee restores the Participant's
Accrued Benefit, the Participant's segregated Account remains a part of the
Trust, but it alone shares in any income it earns and it alone bears any
expense or loss it incurs. Unless the repayment qualifies as a rollover
contribution, the Advisory Committee will direct the Trustee to repay to the
Participant as soon as is administratively practicable the full amount of the
Participant's segregated Account if the Advisory Committee determines either of
the conditions of Section 5.04(A) prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayment.
5.02
<PAGE> 35
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section
5.03, Year of Service means any 12- consecutive month period designated in the
Employer's Adoption Agreement during which an Employee completes not less than
the number of Hours of Service (not exceeding 1,000) specified in the
Employer's Adoption Agreement. A Year of Service includes any Year of Service
earned prior to the Effective Date of the Plan, except as provided in Section
5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any vesting computation
period he does not complete more than 500 Hours of Service. If, pursuant to
Section 5.06, the Plan does not require more than 500 Hours of Service to
receive credit for a Year of Service, a Participant incurs a Break in Service
in a vesting computation period in which he fails to complete a Year of
Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with the Employer except:
(a) For the sole purpose of determining a Participant's Nonforfeitable
percentage of his Accrued Benefit derived from Employer contributions
which accrued for his benefit prior to a Forfeiture Break in Service,
the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive Breaks in
Service.
(b) The Plan disregards any Year of Service excluded under the Employer's
Adoption Agreement.
The Plan does not apply the Break in Service rule under Code Section
411(a)(6)(B). Therefore, an Employee need not complete a Year of Service after
a Break in Service before the Plan takes into account the Employee's otherwise
includible Years of Service under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his
Accrued Benefit derived from Employer contributions occurs under the Plan on
the earlier of:
(a) The last day of the vesting computation period in which the
Participant first incurs a Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's
Accrued Benefit forfeiture, if any, under this Section 5.09 solely by reference
to the vesting schedule of Section 5.03. A Participant does not forfeit any
portion of his Accrued Benefit for any other reason or cause except as
expressly provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * * * * * * *
5.03
<PAGE> 36
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to Section
6.03, the Participant or the Beneficiary elects in writing to a different time
or method of payment, the Advisory Committee will direct the Trustee to
commence distribution of a Participant's Nonforfeitable Accrued Benefit in
accordance with this Section 6.01. A Participant must consent, in writing, to
any distribution required under this Section 6.01 if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of the distribution
to the Participant, exceeds $3,500 and the Participant has not attained the
later of Normal Retirement Age or age 62. Furthermore, the Participant's spouse
also must consent, in writing, to any distribution, for which Section 6.04
requires the spouse's consent. For all purposes of this Article VI, the term
"annuity starting date" means the first day of the first period for which the
Plan pays an amount as an annuity or in any other form. A distribution date
under this Article VI, unless otherwise specified within the Plan, is the date
or dates the Employer specifies in the Adoption Agreement, or as soon as
administratively practicable following that distribution date. For purposes of
the consent requirements under this Article VI, if the present value of the
Participant's Nonforfeitable Accrued Benefit, at the time of any distribution,
exceeds $3,500, the Advisory Committee must treat that present value as
exceeding $3,500 for purposes of all subsequent Plan distributions to the
Participant.
(A) SEPARATION FROM SERVICE FOR A REASON OTHER THAN DEATH.
(1) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500.
If the Participant's Separation from Service is for any reason other than
death, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in a lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, but in no event later
than the 60th day following the close of the Plan Year in which the Participant
attains Normal Retirement Age. If the Participant has attained Normal
Retirement Age at the time of his Separation from Service, the distribution
under this paragraph will occur no later than the 60th day following the close
of the Plan Year in which the Participant's Separation from Service occurs.
(2) PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. If the
Participant's Separation from Service is for any reason other than death, the
Advisory Committee will direct the Trustee to commence distribution of the
Participant's Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of an election by
the Participant, the Advisory Committee will direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in a lump sum (or, if
applicable, the normal annuity form of distribution required under Section
6.04), on the 60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains Normal Retirement
Age; (b) the Participant attains age 62; or (c) the Participant's Separation
from Service.
(3) DISABILITY. If the Participant's Separation from Service is because
of his disability, the Advisory Committee will direct the Trustee to pay the
Participant's Nonforfeitable Accrued Benefit in lump sum, on the distribution
date the Employer specifies in the Adoption Agreement, subject to the notice
and consent requirements of this Article VI and subject to the applicable
mandatory commencement dates described in Paragraphs (1) and (2).
(4) HARDSHIP. Prior to the time at which the Participant may receive
distribution under Paragraphs (1), (2) or (3), the Participant may request a
distribution from his Nonforfeitable Accrued Benefit in an amount necessary to
satisfy a hardship, if the Employer elects in the Adoption Agreement to permit
hardship distributions. Unless the Employer elects otherwise in the Adoption
Agreement, a hardship distribution must be on account of any of the following:
(a) medical expenses; (b) the purchase (excluding mortgage payments) of the
Participant's principal residence; (c) post- secondary education tuition, for
the next semester or quarter, for the Participant or for the Participant's
spouse, children or dependents; (d) to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of the
Participant's principal residence; (e) funeral expenses of the Participant's
family member; or (f) the Participant's disability. A partially-vested
Participant may not receive a hardship distribution described in this Paragraph
(A)(4) prior to incurring a Forfeiture Break in Service, unless the hardship
distribution is a cash-out distribution (as defined in Article V). The Advisory
Committee will direct the Trustee to make the hardship
6.01
<PAGE> 37
distribution as soon as administratively practicable after the Participant
makes a valid request for the hardship distribution.
(B) REQUIRED BEGINNING DATE. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date, subject to the
transitional election, if applicable, under Section 6.03(D). A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70 1/2. However, if the Participant,
prior to incurring a Separation from Service, attained age 70 1/2 by January 1,
1988, and, for the five Plan Year period ending in the calendar year in which
he attained age 70 1/2 and for all subsequent years, the Participant was not a
more than 5% owner, the Required Beginning Date is the April 1 following the
close of the calendar year in which the Participant separates from Service or,
if earlier, the April 1 following the close of the calendar year in which the
Participant becomes a more than 5% owner. Furthermore, if a Participant who was
not a more than 5% owner attained age 70 1/2 during 1988 and did not incur a
Separation from Service prior to January 1, 1989, his Required Beginning Date
is April 1, 1990. A mandatory distribution at the Participant's Required
Beginning Date will be in lump sum (or, if applicable, the normal annuity form
of distribution required under Section 6.04) unless the Participant, pursuant
to the provisions of this Article VI, makes a valid election to receive an
alternative form of payment.
(C) DEATH OF THE PARTICIPANT. The Advisory Committee will direct the Trustee,
in accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death. Subject to the requirements of
Section 6.04, the Advisory Committee will determine the death benefit by
reducing the Participant's Nonforfeitable Accrued Benefit by any security
interest the Plan has against that Nonforfeitable Accrued Benefit by reason of
an outstanding Participant loan.
(1) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT DOES NOT
EXCEED $3,500. The Advisory Committee, subject to the requirements of Section
6.04, must direct the Trustee to distribute the deceased Participant's
Nonforfeitable Accrued Benefit in a single sum, as soon as administratively
practicable following the Participant's death or, if later, the date on which
the Advisory Committee receives notification of or otherwise confirms the
Participant's death.
(2) DECEASED PARTICIPANT'S NONFORFEITABLE ACCRUED BENEFIT EXCEEDS
$3,500. The Advisory Committee will direct the Trustee to distribute the
deceased Participant's Nonforfeitable Accrued Benefit at the time and in the
form elected by the Participant or, if applicable by the Beneficiary, as
permitted under this Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct the Trustee to
distribute the Participant's undistributed Nonforfeitable Accrued Benefit in a
lump sum on the first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first distribution date
following the date the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form
(other than a joint and survivor annuity) this Article VI would permit for a
Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the annuity
distribution requirements, if any, prescribed by Section 6.04, and any
restrictions prescribed by Section 6.03, a Participant or Beneficiary may elect
distribution under one, or any combination, of the following methods: (a) by
payment in a lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not exceeding the life
expectancy of the Participant, or the joint life and last survivor expectancy
of the Participant and his Beneficiary. The Employer may elect in its Adoption
Agreement to modify the methods of payment available under this Section 6.02.
6.02
<PAGE> 38
The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued Benefit, at
the time of the distribution to the Participant, exceeds $3,500. To facilitate
installment payments under this Article VI, the Advisory Committee may direct
the Trustee to segregate all or any part of the Participant's Accrued Benefit
in a separate Account. The Trustee will invest the Participant's segregated
Account in Federally insured interest bearing savings account(s) or time
deposit(s) (or a combination of both), or in other fixed income investments. A
segregated Account remains a part of the Trust, but it alone shares in any
income it earns, and it alone bears any expense or loss it incurs. A
Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit, subject to the requirements of Section 6.04.
(A) MINIMUM DISTRIBUTION REQUIREMENTS FOR PARTICIPANTS. The Advisory Committee
may not direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit, nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution requirements
under Code Section 401(a)(9) and the applicable Treasury regulations. The
minimum distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date preceding the
beginning of the calendar year divided by the Participant's life expectancy or,
if applicable, the joint and last survivor expectancy of the Participant and
his designated Beneficiary (as determined under Article VIII, subject to the
requirements of the Code Section 401(a)(9) regulations). The Advisory Committee
will increase the Participant's Nonforfeitable Accrued Benefit, as determined
on the relevant valuation date, for contributions or forfeitures allocated
after the valuation date and by December 31 of the valuation calendar year, and
will decrease the valuation by distributions made after the valuation date and
by December 31 of the valuation calendar year. For purposes of this valuation,
the Advisory Committee will treat any portion of the minimum distribution for
the first distribution calendar year made after the close of that year as a
distribution occurring in that first distribution calendar year. In computing a
minimum distribution, the Advisory Committee must use the unisex life
expectancy multiples under Treas. Reg. Section 1.72-9. The Advisory Committee,
only upon the Participant's written request, will compute the minimum
distribution for a calendar year subsequent to the first calendar year for
which the Plan requires a minimum distribution by redetermining the applicable
life expectancy. However, the Advisory Committee may not redetermine the joint
life and last survivor expectancy of the Participant and a nonspouse designated
Beneficiary in a manner which takes into account any adjustment to a life
expectancy other than the Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method
of payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee must determine
whether benefits to the Beneficiary are incidental as of the date the Trustee
is to commence payment of the retirement benefits to the Participant, or as of
any date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due
by the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives distribution in the form of a Nontransferable
Annuity Contract, the distribution satisfies this Section 6.02(A) if the
contract complies with the requirements of Code Section 401(a)(9) and the
applicable Treasury regulations.
6.03
<PAGE> 39
(B) MINIMUM DISTRIBUTION REQUIREMENTS FOR BENEFICIARIES. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury regulations. If the Participant's death
occurs after his Required Beginning Date or, if earlier, the date the
Participant commences an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had commenced for
the Participant. If the Participant's death occurs prior to his Required
Beginning Date, and the Participant had not commenced an irrevocable annuity
pursuant to Section 6.04, the method of payment to the Beneficiary, subject to
Section 6.04, must provide for completion of payment to the Beneficiary over a
period not exceeding: (i) 5 years after the date of the Participant's death; or
(ii) if the Beneficiary is a designated Beneficiary, the designated
Beneficiary's life expectancy. The Advisory Committee may not direct payment of
the Participant's Nonforfeitable Accrued Benefit over a period described in
clause (ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of the calendar
year in which the Participant's death occurred or, if later, and the designated
Beneficiary is the Participant's surviving spouse, December 31 of the calendar
year in which the Participant would have attained age 70 1/2. If the Trustee
will make distribution in accordance with clause (ii), the minimum distribution
for a calendar year equals the Participant's Nonforfeitable Accrued Benefit as
of the latest valuation date preceding the beginning of the calendar year
divided by the designated Beneficiary's life expectancy. The Advisory Committee
must use the unisex life expectancy multiples under Treas. Reg. Section 1.72-9
for purposes of applying this paragraph. The Advisory Committee, only upon the
written request of the Participant or of the Participant's surviving spouse,
will recalculate the life expectancy of the Participant's surviving spouse not
more frequently than annually, but may not recalculate the life expectancy of a
nonspouse designated Beneficiary after the Trustee commences payment to the
designated Beneficiary. The Advisory Committee will apply this paragraph by
treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Advisory Committee must direct the Trustee to accelerate
payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as
soon as administratively practicable following the effective date of that
request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not
later than 30 days, before the Participant's annuity starting date, the
Advisory Committee must provide a benefit notice to a Participant who is
eligible to make an election under this Section 6.03. The benefit notice must
explain the optional forms of benefit in the Plan, including the material
features and relative values of those options, and the Participant's right to
defer distribution until he attains the later of Normal Retirement Age or age
62.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02 and of Section 6.04. The Participant or Beneficiary must make an election
under this Section 6.03 by filing his election with the Advisory Committee at
any time before the Trustee otherwise would commence to pay a Participant's
Accrued Benefit in accordance with the requirements of Article VI.
(A) PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. If the present value
of a Participant's Nonforfeitable Accrued Benefit exceeds $3,500, he may elect
to have the Trustee commence distribution as of any distribution date permitted
under the Employer's Adoption Agreement Section 6.03. The Participant may
reconsider an election at any time prior to the annuity starting date and elect
to commence distribution as of any other distribution date permitted under the
Employer's Adoption Agreement Section 6.03. If the Participant is
partially-vested in his Accrued Benefit, an election under this Paragraph (A)
to distribute prior to the Participant's incurring a Forfeiture Break in
Service (as defined in Section 5.08), must be in the form of a cash-out
distribution (as defined in Article V). A Participant may not receive a
cash-out distribution if, prior to the time the Trustee actually makes the
cash-out distribution, the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant who has
separated from Service may elect distribution as of any distribution date,
irrespective of the elections under Adoption Agreement Section 6.03.
6.04
<PAGE> 40
(B) PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE. The Employer must
specify in its Adoption Agreement the distribution election rights, if any, a
Participant has prior to his Separation from Service. A Participant must make
an election under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election is to be
effective. In his written election, the Participant must specify the percentage
or dollar amount he wishes the Trustee to distribute to him. The Participant's
election relates solely to the percentage or dollar amount specified in his
election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in
his election form terminates on the Accounting Date. The Trustee must make a
distribution to a Participant in accordance with his election under this
Section 6.03(B) within the 90 day period (or as soon as administratively
practicable) after the Participant files his written election with the Trustee.
The Trustee will distribute the balance of the Participant's Accrued Benefit
not distributed pursuant to his election(s) in accordance with the other
distribution provisions of this Plan.
(C) DEATH BENEFIT ELECTIONS. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $3,500, the Participant's Beneficiary
may elect to have the Trustee distribute the Participant's Nonforfeitable
Accrued Benefit in a form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated in writing by
the Participant and not revoked as of his date of death.
(D) TRANSITIONAL ELECTIONS. Notwithstanding the provisions of Sections 6.01 and
6.02, if the Participant (or Beneficiary) signed a written distribution
designation prior to January 1, 1984, the Advisory Committee must distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if applicable, of
Sections 6.04, 6.05 and 6.06. This Section 6.03(D) does not apply to a pre-1984
distribution designation, and the Advisory Committee will not comply with that
designation, if any of the following applies: (1) the method of distribution
would have disqualified the Plan under Code Section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Accrued Benefit as of
December 31, 1983; (3) the distribution designation does not specify the timing
and form of the distribution and the death Beneficiaries (in order of
priority); (4) the substitution of a Beneficiary modifies the payment period of
the distribution; or, (5) the Participant (or Beneficiary) modifies or revokes
the distribution designation. In the event of a revocation, the Plan must
distribute, no later than December 31 of the calendar year following the year
of revocation, the amount which the Participant would have received under
Section 6.02(A) if the distribution designation had not been in effect or, if
the Beneficiary revokes the distribution designation, the amount which the
Beneficiary would have received under Section 6.02(B) if the distribution
designation had not been in effect. The Advisory Committee will apply this
Section 6.03(D) to rollovers and transfers in accordance with Part J of the
Code Section 401(a)(9) Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING
SPOUSES.
(A) JOINT AND SURVIVOR ANNUITY. The Advisory Committee must direct the
Trustee to distribute a married or unmarried Participant's Nonforfeitable
Accrued Benefit in the form of a qualified joint and survivor annuity, unless
the Participant makes a valid waiver election (described in Section 6.05)
within the 90 day period ending on the annuity starting date. If, as of the
annuity starting date, the Participant is married, a qualified joint and
survivor annuity is an immediate annuity which is purchasable with the
Participant's Nonforfeitable Accrued Benefit and which provides a life annuity
for the Participant and a survivor annuity payable for the remaining life of
the Participant's surviving spouse equal to 50% of the amount of the annuity
payable during the life of the Participant. If, as of the annuity starting
date, the Participant is not married, a qualified joint and survivor annuity is
an immediate life annuity for the Participant which is purchasable with the
Participant's Nonforfeitable Accrued Benefit. On or before the annuity starting
date, the Advisory Committee, without Participant or spousal consent, must
direct the Trustee to pay the Participant's Nonforfeitable Accrued Benefit in a
lump sum, in lieu of a qualified joint and survivor annuity, in accordance with
Section 6.01, if the Participant's Nonforfeitable Accrued Benefit is not
greater than $3,500. This Section 6.04(A) applies only to a Participant who has
completed at least one Hour of Service with the Employer after August 22, 1984.
6.05
<PAGE> 41
(B) PRERETIREMENT SURVIVOR ANNUITY. If a married Participant dies prior to his
annuity starting date, the Advisory Committee will direct the Trustee to
distribute a portion of the Participant's Nonforfeitable Accrued Benefit to the
Participant's surviving spouse in the form of a preretirement survivor annuity,
unless the Participant has a valid waiver election (as described in Section
6.06) in effect, or unless the Participant and his spouse were not married
throughout the one year period ending on the date of his death. A preretirement
survivor annuity is an annuity which is purchasable with 50% of the
Participant's Nonforfeitable Accrued Benefit (determined as of the date of the
Participant's death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity is
attributable to Employer contributions and to Employee contributions in the
same proportion as the Participant's Nonforfeitable Accrued Benefit is
attributable to those contributions. The portion of the Participant's
Nonforfeitable Accrued Benefit not payable under this paragraph is payable to
the Participant's Beneficiary, in accordance with the other provisions of this
Article VI. If the present value of the preretirement survivor annuity does not
exceed $3,500, the Advisory Committee, on or before the annuity starting date,
must direct the Trustee to make a lump sum distribution to the Participant's
surviving spouse, in lieu of a preretirement survivor annuity. This Section
6.04(B) applies only to a Participant who dies after August 22, 1984, and
either (i) completes at least one Hour of Service with the Employer after
August 22, 1984, or (ii) separated from Service with at least 10 Years of
Service (as defined in Section 5.06) and completed at least one Hour of Service
with the Employer in a Plan Year beginning after December 31, 1975.
(C) SURVIVING SPOUSE ELECTIONS. If the present value of the preretirement
survivor annuity exceeds $3,500, the Participant's surviving spouse may elect
to have the Trustee commence payment of the preretirement survivor annuity at
any time following the date of the Participant's death, but not later than the
mandatory distribution periods described in Section 6.02, and may elect any of
the forms of payment described in Section 6.02, in lieu of the preretirement
survivor annuity. In the absence of an election by the surviving spouse, the
Advisory Committee must direct the Trustee to distribute the preretirement
survivor annuity on the first distribution date following the close of the Plan
Year in which the latest of the following events occurs: (i) the Participant's
death; (ii) the date the Advisory Committee receives notification of or
otherwise confirms the Participant's death; (iii) the date the Participant
would have attained Normal Retirement Age; or (iv) the date the Participant
would have attained age 62.
(D) SPECIAL RULES. If the Participant has in effect a valid waiver election
regarding the qualified joint and survivor annuity or the preretirement
survivor annuity, the Advisory Committee must direct the Trustee to distribute
the Participant's Nonforfeitable Accrued Benefit in accordance with Sections
6.01, 6.02 and 6.03. The Advisory Committee will reduce the Participant's
Nonforfeitable Accrued Benefit by any security interest (pursuant to any offset
rights authorized by Section 10.03[E]) held by the Plan by reason of a
Participant loan to determine the value of the Participant's Nonforfeitable
Accrued Benefit distributable in the form of a qualified joint and survivor
annuity or preretirement survivor annuity, provided any post-August 18, 1985,
loan satisfied the spousal consent requirement described in Section 10.03[E] of
the Plan. For purposes of applying this Article VI, the Advisory Committee
treats a former spouse as the Participant's spouse or surviving spouse to the
extent provided under a qualified domestic relations order described in Section
6.07. The provisions of this Section 6.04, and of Sections 6.05 and 6.06, apply
separately to the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the portion of the
Participant's Nonforfeitable Accrued Benefit not subject to that order.
(E) PROFIT SHARING PLAN ELECTION. If this Plan is a profit sharing plan, the
Employer must elect the extent to which the preceding provisions of Section
6.04 apply. If the Employer elects to apply this Section 6.04 only to a
Participant described in this Section 6.04(E), the preceding provisions of this
Section 6.04 apply only to the following Participants: (1) a Participant as
respects whom the Plan is a direct or indirect transferee from a plan subject
to the Code Section 417 requirements and the Plan received the transfer after
December 31, 1984, unless the transfer is an elective transfer described in
Section 13.06; (2) a Participant who elects a life annuity distribution (if
Section 6.02 or Section 13.02 of the Plan requires the Plan to provide a life
annuity distribution option); and (3) a Participant whose benefits under a
defined benefit plan maintained by the Employer are offset by benefits provided
under this Plan. If the Employer elects to apply this Section 6.04 to all
Participants, the preceding provisions of this Section 6.04 apply to all
Participants described in the first two paragraphs of this Section 6.04,
without regard to the limitations of this Section 6.04(E). Sections 6.05 and
6.06 only apply to Participants to whom the preceding provisions of this
Section 6.04 apply.
6.06
<PAGE> 42
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY. Not
earlier than 90 days, but not later than 30 days, before the Participant's
annuity starting date, the Advisory Committee must provide the Participant a
written explanation of the terms and conditions of the qualified joint and
survivor annuity, the Participant's right to make, and the effect of, an
election to waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the Participant's right
to make, and the effect of, a revocation of a waiver election. The Plan does
not limit the number of times the Participant may revoke a waiver of the
qualified joint and survivor annuity or make a new waiver during the election
period.
A married Participant's waiver election is not valid unless (a) the
Participant's spouse (to whom the survivor annuity is payable under the
qualified joint and survivor annuity), after the Participant has received the
written explanation described in this Section 6.05, has consented in writing to
the waiver election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his representative)
witnesses the spouse's consent, (b) the spouse consents to the alternate form
of payment designated by the Participant or to any change in that designated
form of payment, and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary designation
or to any change in the Participant's Beneficiary designation. The spouse's
consent to a waiver of the qualified joint and survivor annuity is irrevocable,
unless the Participant revokes the waiver election. The spouse may execute a
blanket consent to any form of payment designation or to any Beneficiary
designation made by the Participant, if the spouse acknowledges the right to
limit that consent to a specific designation but, in writing, waives that
right. The consent requirements of this Section 6.05 apply to a former spouse
of the Participant, to the extent required under a qualified domestic relations
order described in Section 6.07.
The Advisory Committee will accept as valid a waiver election which does
not satisfy the spousal consent requirements if the Advisory Committee
establishes the Participant does not have a spouse, the Advisory Committee is
not able to locate the Participant's spouse, the Participant is legally
separated or has been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other circumstances exist
under which the Secretary of the Treasury will excuse the consent requirement.
If the Participant's spouse is legally incompetent to give consent, the
spouse's legal guardian (even if the guardian is the Participant) may give
consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY. The
Advisory Committee must provide a written explanation of the preretirement
survivor annuity to each married Participant, within the following period which
ends last: (1) the period beginning on the first day of the Plan Year in which
the Participant attains age 32 and ending on the last day of the Plan Year in
which the Participant attains age 34; (2) a reasonable period after an Employee
becomes a Participant; (3) a reasonable period after the joint and survivor
rules become applicable to the Participant; or (4) a reasonable period after a
fully subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period described in
clauses (2), (3) and (4) is the period beginning one year before and ending one
year after the applicable event. If the Participant separates from Service
before attaining age 35, clauses (1), (2), (3) and (4) do not apply and the
Advisory Committee must provide the written explanation within the period
beginning one year before and ending one year after the Separation from
Service. The written explanation must describe, in a manner consistent with
Treasury regulations, the terms and conditions of the preretirement survivor
annuity comparable to the explanation of the qualified joint and survivor
annuity required under Section 6.05. The Plan does not limit the number of
times the Participant may revoke a waiver of the preretirement survivor annuity
or make a new waiver during the election period.
6.07
<PAGE> 43
A Participant's waiver election of the preretirement survivor annuity is
not valid unless (a) the Participant makes the waiver election no earlier than
the first day of the Plan Year in which he attains age 35 and (b) the
Participant's spouse (to whom the preretirement survivor annuity is payable)
satisfies the consent requirements described in Section 6.05, except the spouse
need not consent to the form of benefit payable to the designated Beneficiary.
The spouse's consent to the waiver of the preretirement survivor annuity is
irrevocable, unless the Participant revokes the waiver election. Irrespective
of the time of election requirement described in clause (a), if the Participant
separates from Service prior to the first day of the Plan Year in which he
attains age 35, the Advisory Committee will accept a waiver election as
respects the Participant's Accrued Benefit attributable to his Service prior to
his Separation from Service. Furthermore, if a Participant who has not
separated from Service makes a valid waiver election, except for the timing
requirement of clause (a), the Advisory Committee will accept that election as
valid, but only until the first day of the Plan Year in which the Participant
attains age 35. A waiver election described in this paragraph is not valid
unless made after the Participant has received the written explanation
described in this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained
in this Plan prevents the Trustee, in accordance with the direction of the
Advisory Committee, from complying with the provisions of a qualified domestic
relations order (as defined in Code Section 414(p)). This Plan specifically
permits distribution to an alternate payee under a qualified domestic relations
order at any time, irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code Section 414(p)) under the Plan.
A distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (1) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $3,500, and the
order requires, the alternate payee consents to any distribution occurring
prior to the Participant's attainment of earliest retirement age. The Employer,
in an addendum to its Adoption Agreement numbered 6.07, may elect to limit
distribution to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section 6.07 gives a
Participant a right to receive distribution at a time otherwise not permitted
under the Plan nor does it permit the alternate payee to receive a form of
payment not otherwise permitted under the Plan.
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Advisory Committee promptly will notify the Participant
and any alternate payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic
relations order, the Advisory Committee must determine the qualified status of
the order and must notify the Participant and each alternate payee, in writing,
of its determination. The Advisory Committee must provide notice under this
paragraph by mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of Labor
regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
Committee determines the order is a qualified domestic relations order within
18 months of the date amounts first are payable following receipt of the order,
the Advisory Committee will direct the Trustee to distribute the payable
amounts in accordance with the order. If the Advisory Committee does not make
its determination of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.
6.08
<PAGE> 44
To the extent it is not inconsistent with the provisions of the
qualified domestic relations order, the Advisory Committee may direct the
Trustee to invest any partitioned amount in a segregated subaccount or separate
account and to invest the account in Federally insured, interest-bearing
savings account(s) or time deposit(s) (or a combination of both), or in other
fixed income investments. A segregated subaccount remains a part of the Trust,
but it alone shares in any income it earns, and it alone bears any expense or
loss it incurs. The Trustee will make any payments or distributions required
under this Section 6.07 by separate benefit checks or other separate
distribution to the alternate payee(s).
* * * * * * * * * * * * * * *
6.09
<PAGE> 45
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current
information to the Advisory Committee as to the name, date of birth, date of
employment, annual compensation, leaves of absence, Years of Service and date
of termination of employment of each Employee who is, or who will be eligible
to become, a Participant under the Plan, together with any other information
which the Advisory Committee considers necessary. The Employer's records as to
the current information the Employer furnishes to the Advisory Committee are
conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or Beneficiaries for any
act of, or failure to act, on the part of its Advisory Committee (unless the
Employer is the Advisory Committee), the Trustee, the Custodian, if any, or the
Plan Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. Subject to the provisions of
this Section 7.03, to the full extent permitted by law, the Employer shall
indemnify each past, present and future Plan Administrator, member of the
Advisory Committee and Trustee (or Custodian) (hereinafter all such indemnified
persons and entities shall be jointly and severally referred to as the
"Indemnified Party") against, and each Indemnified Party shall be entitled
without further act on his part to indemnity from the Employer for, any and all
losses, liabilities, costs and expenses (including the amount of judgements,
court costs, reasonable attorneys' fees, and the amount of approved settlements
made with a view to the curtailment of costs of litigation, other than amounts
paid to the Employer itself) incurred by such Indemnified Party in connection
with or arising out of any pending, threatened or anticipated possible action,
suit, or other proceeding, including any investigation that might lead to such
a proceeding, in which he is or may be involved by reason of or in connection
with his being or having been a Plan Administrator, member of the Advisory
Committee, Trustee or Custodian, whether or not he continues to be a Plan
Administrator, member of the Advisory Committee, Trustee or Custodian at the
time of incurring any such losses, liabilities, costs and expenses
(collectively, the "Losses"); provided, however, that such indemnity shall not
include any losses, liabilities, costs and expenses incurred by such
Indemnified Party (i) with respect to any matters as to which he is finally
adjudged in any such action, suit or proceeding to have been guilty of gross
negligence, bad faith or intentional misconduct in the performance of his
duties as a Plan Administrator, member of the Advisory Committee, Trustee or
Custodian, or (ii) with respect to any matter to the extent that a settlement
thereof is effected in an amount in excess of the amount approved by the
Employer, which approval shall not be unreasonably withheld.
THE EMPLOYER'S OBLIGATION HEREUNDER TO INDEMNIFY THE INDEMNIFIED PARTY SHALL
EXIST WITHOUT REGARD TO THE CAUSE OR CAUSES OF THE MATTERS FOR WHICH INDEMNITY
IS OWED AND EXPRESSLY INCLUDES (BUT IS NOT LIMITED TO) THE LOSSES, DIRECTLY OR
INDIRECTLY, RELATING TO, BASED UPON, ARISING OUT OF, OR RESULTING FROM ANY
CONCEIVABLE OR POSSIBLE COMBINATION OF NEGLIGENCE, FAULT OR WRONG DOING, IT
BEING THE EXPRESS SPECIFIC INTENT OF THE EMPLOYER TO PROVIDE THE MAXIMUM
POSSIBLE INDEMNIFICATION PROTECTION HEREUNDER, BUT EXCLUDING ANY SUCH LOSSES
THAT ARE FOUND BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED SOLELY
FROM GROSS NEGLIGENCE, BAD FAITH OR INTENTIONAL MISCONDUCT.
No right of indemnification hereunder shall be available to, or
enforceable by, any such Indemnified Party unless, within sixty (60) days after
his actual receipt of service of process in any such action, suit or other
proceeding (or such longer period as may be approved by the Employer), he shall
have offered the Employer, in writing, the opportunity to handle and defend
same at its sole expense. The decision by the Employer to handle the
proceeding shall conclusively determine that such Indemnified Party is entitled
to the indemnity provided herein unless then otherwise expressly agreed by the
Indemnified Party. Until and unless a final judicial determination has been
made that indemnity is not applicable, all such Indemnified Party's expenses
shall be promptly and fully paid or reimbursed by the Employer upon demand by
such person. The foregoing right of indemnification shall inure to the benefit
of the successors and assigns, and of the heirs, executors, administrators and
personal representatives of each such Indemnified Party and shall be in
additions to all other rights to which such Indemnified Party may be entitled
as a matter of law, contract, or otherwise. The indemnification provisions of
this Section 7.03 shall not relieve any
7.01
<PAGE> 46
Indemnified Party from any liability he may have under ERISA for breach of
fiduciary duty. Furthermore, any Indemnified Party and the Employer may
execute a letter agreement further delineating the indemnification agreement of
this Section 7.03, provided the letter agreement must be consistent with and
does not violate ERISA. Subject to the above provisions of this Section 7.03,
the indemnification provisions of this Section 7.03 extend to each Indemnified
Party except to the extent provided by a letter agreement executed by the
Employer and any person who otherwise would be an Indemnified Party under this
Section 7.03.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to
direct the Trustee with respect to the investment and re-investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit
such direction. If the Trustee consents to Employer direction of investment,
the Trustee and the Employer must execute a letter agreement as a part of this
Plan containing such conditions, limitations and other provisions they deem
appropriate before the Trustee will follow any Employer direction as respects
the investment or re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the
right to amend the vesting schedule at any time, the Advisory Committee will
not apply the amended vesting schedule to reduce the Nonforfeitable percentage
of any Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the amendment, or
the date the amendment becomes effective) to a percentage less than the
Nonforfeitable percentage computed under the Plan without regard to the
amendment. An amended vesting schedule will apply to a Participant only if the
Participant receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting schedule,
each Participant having at least 3 Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least 5 Years of Service with the Employer. The
Participant must file his election with the Advisory Committee within 60 days
of the latest of (a) the Employer's adoption of the amendment; (b) the
effective date of the amendment; or (c) his receipt of a copy of the amendment.
The Advisory Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with
an explanation of the effect of the amendment, the appropriate form upon which
the Participant may make an election to remain under the vesting schedule
provided under the Plan prior to the amendment and notice of the time within
which the Participant must make an election to remain under the prior vesting
schedule. The election described in this Section 7.05 does not apply to a
Participant if the amended vesting schedule provides for vesting at least as
rapid at all times as the vesting schedule in effect prior to the amendment.
For purposes of this Section 7.05, an amendment to the vesting schedule
includes any Plan amendment which directly or indirectly affects the
computation of the Nonforfeitable percentage of an Employee's rights to his
Employer derived Accrued Benefit. Furthermore, the Advisory Committee must
treat any shift in the vesting schedule, due to a change in the Plan's top
heavy status, as an amendment to the vesting schedule for purposes of this
Section 7.05.
* * * * * * * * * * * * * * *
7.02
<PAGE> 47
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit (including any
life insurance proceeds payable to the Participant's Account) in the event of
his death and the Participant may designate the form and method of payment. The
Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
(A) COORDINATION WITH SURVIVOR REQUIREMENTS. If the joint and survivor
requirements of Article VI apply to the Participant, this Section 8.01 does not
impose any special spousal consent requirements on the Participant's
Beneficiary designation. However, in the absence of spousal consent (as
required by Article VI) to the Participant's Beneficiary designation: (1) any
waiver of the joint and survivor annuity or of the preretirement survivor
annuity is not valid; and (2) if the Participant dies prior to his annuity
starting date, the Participant's Beneficiary designation will apply only to the
portion of the death benefit which is not payable as a preretirement survivor
annuity. Regarding clause (2), if the Participant's surviving spouse is a
primary Beneficiary under the Participant's Beneficiary designation, the
Trustee will satisfy the spouse's interest in the Participant's death benefit
first from the portion which is payable as a preretirement survivor annuity.
(B) PROFIT SHARING PLAN EXCEPTION. If the Plan is a profit sharing plan, the
Beneficiary designation of a married Exempt Participant is not valid unless the
Participant's spouse consents (in a manner described in Section 6.05) to the
Beneficiary designation. An "Exempt Participant" is a Participant who is not
subject to the joint and survivor requirements of Article VI. The spousal
consent requirement in this paragraph does not apply if the Exempt Participant
and his spouse are not married throughout the one year period ending on the
date of the Participant's death, or if the Participant's spouse is the
Participant's sole primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section
6.02 in the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in
equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its Adoption Agreement.
If the Plan is a profit sharing plan, and the Plan includes Exempt
Participants, the Employer may not specify a different order of priority in the
Adoption Agreement unless the Participant's surviving spouse will be first in
the different order of priority. The Advisory Committee will direct the Trustee
as to the method and to whom the Trustee will make payment under this Section
8.02.
8.01
<PAGE> 48
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each
Beneficiary of a deceased Participant must furnish to the Advisory Committee
such evidence, data or information as the Advisory Committee considers
necessary or desirable for the purpose of administering the Plan. The
provisions of this Plan are effective for the benefit of each Participant upon
the condition precedent that each Participant will furnish promptly full, true
and complete evidence, data and information when requested by the Advisory
Committee, provided the Advisory Committee advises each Participant of the
effect of his failure to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary
of a deceased Participant must file with the Advisory Committee from time to
time, in writing, his post office address and any change of post office
address. Any communication, statement or notice addressed to a Participant, or
Beneficiary, at his last post office address filed with the Advisory Committee,
or as shown on the records of the Employer, binds the Participant, or
Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating
to qualified domestic relations orders, neither a Participant nor a Beneficiary
may anticipate, assign or alienate (either at law or in equity) any benefit
provided under the Plan, and the Trustee will not recognize any such
anticipation, assignment or alienation. Furthermore, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or other legal or
equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the
time prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction
may authorize any appropriate equitable relief to redress violations of ERISA
or to enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any
Beneficiary may examine copies of the Plan description, latest annual report,
any bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator
will maintain all of the items listed in this Section 8.08 in his office, or in
such other place or places as he may designate from time to time in order to
comply with the regulations issued under ERISA, for examination during
reasonable business hours. Upon the written request of a Participant or
Beneficiary the Plan Administrator must furnish him with a copy of any item
listed in this Section 8.08. The Plan Administrator may make a reasonable
charge to the requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee has denied. The Plan Administrator's
notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the
Advisory Committee based its denial;
(c) A description of any additional material and information needed for
the Claimant to perfect his claim and an explanation of why the material
or information is needed; and
8.02
<PAGE> 49
(d) That any appeal the Claimant wishes to make of the adverse
determination must be in writing to the Advisory Committee within 75
days after receipt of the Plan Administrator's notice of denial of
benefits. The Plan Administrator's notice must further advise the
Claimant that his failure to appeal the action to the Advisory Committee
in writing within the 75-day period will render the Advisory Committee's
determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, feels are pertinent. The Claimant,
or his duly authorized representative, may review pertinent Plan documents. The
Advisory Committee will re-examine all facts related to the appeal and make a
final determination as to whether the denial of benefits is justified under the
circumstances. The Advisory Committee must advise the Claimant of its decision
within 60 days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the 60-day limit unfeasible, but in no event may the Advisory Committee render
a decision respecting a denial for a claim for benefits later than 120 days
after its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has the right
to direct the Trustee with respect to the investment or re-investment of the
assets comprising the Participant's individual Account only if the Trustee
consents in writing to permit such direction. If the Trustee consents to
Participant direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written agreement), as a
part of this Plan, containing such conditions, limitations and other provisions
the parties deem appropriate. The Trustee or, with the Trustee's consent, the
Advisory Committee, may establish written procedures, incorporated specifically
as part of this Plan, relating to Participant direction of investment under
this Section 8.10. The Trustee will maintain a segregated investment Account to
the extent a Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable for any
breach, resulting from a Participant's direction of the investment of any part
of his directed Account.
The Advisory Committee, to the extent provided in a written loan policy
adopted under Section 9.04, will treat a loan made to a Participant as a
Participant direction of investment under this Section 8.10. To the extent of
the loan outstanding at any time, the borrowing Participant's Account alone
shares in any interest paid on the loan, and it alone bears any expense or loss
it incurs in connection with the loan. The Trustee may retain any principal or
interest paid on the borrowing Participant's loan in an interest bearing
segregated Account on behalf of the borrowing Participant until the Trustee (or
the Named Fiduciary, in the case of a nondiscretionary Trustee) deems it
appropriate to add the amount paid to the Participant's separate Account under
the Plan.
If the Trustee consents to Participant direction of investment of his
Account, the Plan treats any post-December 31, 1981, investment by a
Participant's directed Account in collectibles (as defined by Code Section
408(m)) as a deemed distribution to the Participant for Federal income tax
purposes.
* * * * * * * * * * * * * * *
8.03
<PAGE> 50
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an
Advisory Committee to administer the Plan, the members of which may or may not
be Participants in the Plan, or which may be the Plan Administrator acting
alone. In the absence of an Advisory Committee appointment, the Plan
Administrator assumes the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve without
compensation for services as such, but the Employer will pay all expenses of
the Advisory Committee, except to the extent the Trust properly pays for such
expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and
duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to
participate in the Plan, the value of a Participant's Accrued Benefit and
the Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the
proper and efficient administration of the Plan provided the rules are
not inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust;
(f) To review and render decisions respecting a claim for (or
denial of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the Employer may
require for tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to
assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or Managers (as
defined in ERISA Section 3(38)), each of whom will have full power and
authority to manage, acquire or dispose (or direct the Trustee with
respect to acquisition or disposition) of any Plan asset under its
control;
(j) To establish, in its sole discretion, a nondiscriminatory
policy (see Section 9.04(A)) which the Trustee must observe in making
loans, if any, to Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account and to
make credits and charges to the account to the extent required by and in
accordance with the provisions of the Code.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.01
<PAGE> 51
(A) LOAN POLICY. If the Advisory Committee adopts a loan policy, pursuant to
paragraph (j), the loan policy must be a written document and must include: (1)
the identity of the person or positions authorized to administer the
participant loan program; (2) a procedure for applying for the loan; (3) the
criteria for approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for determining a
reasonable rate of interest; (6) the types of collateral which may secure the
loan; and (7) the events constituting default and the steps the Plan will take
to preserve plan assets in the event of default. This Section 9.04 specifically
incorporates a written loan policy as part of the Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not less
often than annually, all pertinent Employee information and Plan data in order
to establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members
appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may
authorize any one of its members, or its Secretary, to sign on its behalf any
notices, directions, applications, certificates, consents, approvals, waivers,
letters or other documents. The Advisory Committee must evidence this authority
by an instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may
decide or determine any matter concerning the distribution, nature or method
of settlement of his own benefits under the Plan, except in exercising an
election available to that member in his capacity as a Participant, unless the
Plan Administrator is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or
direct the Trustee to maintain, a separate Account, or multiple Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. If a Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit, unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the Trustee
to make its allocations, to the Accounts of the Participants in accordance with
the provisions of Section 9.11. The Advisory Committee may direct the Trustee
to maintain a temporary segregated investment Account in the name of a
Participant to prevent a distortion of income, gain or loss allocations under
Section 9.11. The Advisory Committee must maintain records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental benefit insurance
contracts held by the Trustee on the Participant's life.
For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit is its value as of the valuation date immediately
preceding the date of the distribution. Any distribution (other than a
distribution from a segregated Account) made to a Participant (or to his
Beneficiary) more than 90 days after the most recent valuation date may include
interest on the amount of the distribution as an expense of the Trust Fund. The
interest, if any, accrues from such valuation date to the date of the
distribution at the rate established in the Employer's Adoption Agreement.
9.02
<PAGE> 52
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A
"valuation date" under this Plan is each Accounting Date and each interim
valuation date determined under Section 10.14. As of each valuation date the
Advisory Committee must adjust Accounts to reflect net income, gain or loss
since the last valuation date. The valuation period is the period beginning the
day after the last valuation date and ending on the current valuation date.
(A) TRUST FUND ACCOUNTS. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The
Advisory Committee first will adjust the Participant Accounts, as those
Accounts stood at the beginning of the current valuation period, by reducing
the Accounts for any forfeitures arising under Section 5.09 or under Section
9.14, for amounts charged during the valuation period to the Accounts in
accordance with Section 9.13 (relating to distributions) and Section 11.01
(relating to insurance premiums), and for the cash value of incidental benefit
insurance contracts. The Advisory Committee then, subject to the restoration
allocation requirements of Section 5.04 or of Section 9.14, will allocate the
net income, gain or loss pro rata to the adjusted Participant Accounts. The
allocable net income, gain or loss is the net income (or net loss), including
the increase or decrease in the fair market value of assets, since the last
valuation date.
(B) SEGREGATED INVESTMENT ACCOUNTS. A segregated investment Account receives
all income it earns and bears all expense or loss it incurs. The Advisory
Committee will adopt uniform and nondiscriminatory procedures for determining
income or loss of a segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and investment
directions occurring during a valuation period. As of the valuation date, the
Advisory Committee must reduce a segregated Account for any forfeiture arising
under Section 5.09 after the Advisory Committee has made all other allocations,
changes or adjustments to the Account for the Plan Year.
(C) ADDITIONAL RULES. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. If the Employer maintains its Plan under a Code
Section 401(k) Adoption Agreement, the Employer may specify in its Adoption
Agreement alternate valuation provisions authorized by that Adoption Agreement.
This Section 9.11 applies solely to the allocation of net income, gain or loss
of the Trust. The Advisory Committee will allocate the Employer contributions
and Participant forfeitures, if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting
Date of each Plan Year, but within the time prescribed by ERISA and the
regulations under ERISA, the Plan Administrator will deliver to each
Participant (and to each Beneficiary) a statement reflecting the condition of
his Accrued Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No Participant,
except a member of the Advisory Committee, has the right to inspect the records
reflecting the Account of any other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from that Account to the
Participant, to his Beneficiary or to an alternate payee. The Advisory
Committee also will charge a Participant's Account for any administrative
expenses incurred by the Plan directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require
either the Trustee or the Advisory Committee to search for, or to ascertain
the whereabouts of, any Participant or Beneficiary. At the time the
Participant's or Beneficiary's benefit becomes distributable under Article VI,
the Advisory Committee, by certified or registered mail addressed to his last
known address of record with the Advisory Committee or the Employer, must
notify any Participant, or Beneficiary, that he is entitled to a distribution
under this Plan. The notice must quote the provisions of this Section 9.14 and
otherwise must comply with the notice requirements of Article VI. If the
Participant, or Beneficiary, fails to claim his distributive share or make his
whereabouts known in writing to the Advisory Committee within 6 months from the
date of mailing of the notice, the Advisory Committee will treat the
Participant's or Beneficiary's unclaimed payable Accrued Benefit as forfeited
and will reallocate the unclaimed payable Accrued Benefit in accordance with
Section 3.05. A forfeiture under this paragraph will occur at the end of the
notice period or, if later, the earliest date applicable Treasury regulations
would permit the forfeiture. Pending
9.03
<PAGE> 53
forfeiture, the Advisory Committee, following the expiration of the notice
period, may direct the Trustee to segregate the Nonforfeitable Accrued Benefit
in a segregated Account and to invest that segregated Account in Federally
insured interest bearing savings accounts or time deposits (or in a combination
of both), or in other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section
9.14 makes a claim, at any time, for his forfeited Accrued Benefit, the
Advisory Committee must restore the Participant's or Beneficiary's forfeited
Accrued Benefit to the same dollar amount as the dollar amount of the Accrued
Benefit forfeited, unadjusted for any gains or losses occurring subsequent to
the date of the forfeiture. The Advisory Committee will make the restoration
during the Plan Year in which the Participant or Beneficiary makes the claim,
first from the amount, if any, of Participant forfeitures the Advisory
Committee otherwise would allocate for the Plan Year, then from the amount, if
any, of the Trust Fund net income or gain for the Plan Year and then from the
amount, or additional amount, the Employer contributes to enable the Advisory
Committee to make the required restoration. The Advisory Committee must direct
the Trustee to distribute the Participant's or Beneficiary's restored Accrued
Benefit to him not later than 60 days after the close of the Plan Year in which
the Advisory Committee restores the forfeited Accrued Benefit. The forfeiture
provisions of this Section 9.14 apply solely to the Participant's or to the
Beneficiary's Accrued Benefit derived from Employer contributions.
* * * * * * * * * * * * * * *
9.04
<PAGE> 54
ARTICLE X
CUSTODIAN/TRUSTEE, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond
for the faithful performance of its duties under the Trust to the extent
required by ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the
Employer for the funds contributed to it by the Employer, but does not have any
duty to see that the contributions received comply with the provisions of the
Plan. The Trustee is not obliged to collect any contributions from the
Employer, nor is obliged to see that funds deposited with it are deposited
according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] DISCRETIONARY TRUSTEE DESIGNATION. If the Employer, in Adoption Agreement
Section 1.02, designates the Trustee to administer the Trust as a discretionary
Trustee, then the Trustee has full discretion and authority with regard to the
investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset properly subject to Employer, Participant or Advisory Committee
direction of investment. The Trustee must coordinate its investment policy with
Plan financial needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds (including mutual
funds established and maintained as collective investment funds for trust
accounts by the Trustee or its affiliate), put and call options traded on a
national exchange, United States retirement plan bonds, corporate bonds,
debentures, convertible debentures, commercial paper, U.S. Treasury Bills,
U.S. Treasury notes and other direct or indirect obligations of the United
States Government or its agencies, improved or unimproved real estate
situated in the United States, limited partnerships, insurance contracts of
any type, mortgages, notes, including but not limited to master notes, or
other property of any kind, real or personal or mixed, whether tangible or
intangible or productive of income, to buy or sell options on common stock
on a nationally recognized exchange with or without holding the underlying
common stock, to buy and sell commodities, commodity options and contracts
for the future delivery of commodities, and to make any other investments
the Trustee deems appropriate, as a prudent man would do under like
circumstances with due regard for the purposes of this Plan. Any
investment made or retained by the Trustee in good faith is proper but must
be of a kind constituting a diversification considered by law suitable for
trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem
advisable to satisfy the liquidity needs of the Plan and to deposit any
cash held in the Trust fund in a bank account at reasonable interest and to
hold uninvested at any time, without liability for interest thereon for a
reasonable period of time, any amount of money received by the Trustee or
raised by the Trustee from the sale of investments or otherwise until same
can be reinvested or disbursed.
(c) To invest, if the Trustee is a bank or similar financial
institution supervised by the United States or by a State, in any type of
deposit of the Trustee (or of a bank related to the Trustee within the
meaning of Code Section 414(b)) at a reasonable rate of interest or in a
common trust fund, as described in Code Section 584, or in a collective
investment fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference, which the Trustee
(or its affiliate, as defined in Code Section 1504) maintains exclusively
for the collective investment of money contributed by the bank (or the
affiliate) in its capacity as trustee and which conforms to the rules of
the Comptroller of the Currency.
10.01
<PAGE> 55
(d) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure, lease for any
term even though commencing in the future or extending beyond the term of
the Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making any
payment or distribution. The Trustee is accountable only to the Advisory
Committee for any payment or distribution made by it in good faith on the
order or direction of the Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands,
in its discretion.
(h) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to participate in
any voting trusts, mergers, consolidations or liquidations, and to exercise
or sell stock subscriptions or conversion rights.
(i) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests in
oil, gas and other minerals; and to enter into operating agreements and to
execute division and transfer orders.
(j) To hold any securities or other property in the name of the
Trustee or its nominee, with depositories or agent depositories, in Federal
Reserve Book-Entry or bearer form or in another form as it may deem best
without disclosing the relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until final adjudication is made by a
court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) Nothing herein contained shall impair the right of the Trustee to
a judicial settlement, in any state or federal court of competent
jurisdiction, of any account including the final accounting, rendered by
the Trustee.
(o) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the Trustee is
not obliged or required to do so unless indemnified to its satisfaction.
(p) To invest any of the funds of the Trust into the Retirement
Investment Trust, or any other open-end, diversified, management investment
company that is specified in an addendum to the Employer's Adoption
Agreement and that offers collective investment funds for retirement
accounts as to which Texas Commerce Bank National Association or any
affiliated bank serves as a trustee.
(q) To exercise all the rights, powers, options and privileges now or
hereafter granted to trustees under applicable state law (as defined in
Section 12.07), except such as conflict with the terms of the Plan or ERISA.
The Trustee shall have, hold, manage, control, use, invest and reinvest,
disburse and dispose of the Trust Fund as if the Trustee were the owner
thereof in fee simple instead of in trust, subject only to such limitations
as are required under applicable state law (as defined in Section 12.07)
that cannot be waived, and subject to ERISA.
10.02
<PAGE> 56
[B] NONDISCRETIONARY TRUSTEE DESIGNATION/APPOINTMENT OF CUSTODIAN. If the
Employer, in its Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a nondiscretionary Trustee, then the Trustee will not
have any discretion or authority with regard to the investment of the Trust
Fund, but must act solely as a directed trustee of the funds contributed to it.
A nondiscretionary Trustee, as directed trustee of the funds held by it under
the Employer's Plan, is authorized and empowered, by way of limitation, with
the following powers, rights and duties, each of which the nondiscretionary
Trustee exercises solely as directed trustee in accordance with the written
direction of the Named Fiduciary (except to the extent a Plan asset is subject
to the control and management of a properly appointed Investment Manager or
subject to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds (including mutual
funds established and maintained as collective investment funds for
trust accounts by the Trustee or its affiliate), put and call options
traded on a national exchange, United States retirement plan bonds,
corporate bonds, debentures, convertible debentures, commercial paper,
U.S. Treasury Bills, U.S. Treasury notes and other direct or indirect
obligations of the United States Government or its agencies, improved or
unimproved real estate situated in the United States, limited
partnerships, insurance contracts of any type, mortgages, notes,
including or not limited to master notes, or other property of any kind,
real or personal or mixed, whether tangible or intangible or productive
of income, to buy or sell options on common stock on a nationally
recognized exchange with or without holding the underlying common stock,
to buy and sell commodities, commodity options and contracts for the
future delivery of commodities, and to make any other investments the
Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the Named Fiduciary
may direct in writing to satisfy liquidity needs of the Plan and to
deposit any cash held in the Trust Fund in a bank account at reasonable
interest, including, specific authority to invest in any type of deposit
of the Trustee (or of a bank related to the Trustee within the meaning
of Code Section 414(b) at reasonable interest and to hold uninvested at
any time as directed by the Named Fiduciary, without liability for
interest thereon for a reasonable period of time, any amount of money
received by the Trustee or raised by the Trustee from the sale of
investments or otherwise until same can be reinvested or disbursed.
(c) To sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any payee
or distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making
any payment or distribution. The Trustee is accountable only to the
Advisory Committee for any payment or distribution made by it in good
faith on the order or direction of the Advisory Committee.
(e) To borrow money, to assume indebtedness, extend mortgages and
encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of an individual
owner, including the power to give proxies, to participate in any voting
trusts, mergers, consolidations or liquidations, and to exercise or sell
stock subscriptions or conversion rights, provided the exercise of any
such powers is in accordance with and at the written direction of the
Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to create
mineral severances by grant or reservation; to pool or unitize interests
in oil, gas and other minerals; and to enter into operating agreements
and to execute division and transfer orders, provided the exercise of
any such powers is in accordance with and at the written direction of
the Named Fiduciary.
10.03
<PAGE> 57
(h) To hold any securities or other property in the name of the
nondiscretionary Trustee or its nominee, with depositories or agent
depositories, in Federal Reserve Book-Entry or bearer form or in another
form as the Named Fiduciary may deem best, with or without disclosing
the custodial relationship.
(i) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make payment or
delivery of the funds or property until a court of competent
jurisdiction makes final adjudication.
(j) To file all tax returns required of the Trustee.
(k) Nothing herein contained shall impair the right of the
nondiscretionary Trustee to a judicial settlement, in any state or
federal court of competent jurisdiction, of any account including the
final accounting, rendered by the nondiscretionary Trustee.
(l) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not
obliged or required to do so unless indemnified to its satisfaction.
(m) To exercise all the rights, powers, options and privileges now or
hereafter granted to trustees under applicable state law (as defined in
Section 12.07), except such as conflict with the terms of the Plan or
ERISA. The Trustee shall have, hold, manage, control, use, invest and
reinvest, disburse and dispose of the Trust Fund as if the Trustee were
the owner thereof in fee simple instead of in trust, subject only to
such limitations as are required under applicable state law (as defined
in Section 12.07) that cannot be waived, and subject to ERISA.
(n) To invest any of the funds of the Trust into the Retirement
Investment Trust, or any other open-end, diversified, management
investment company that is specified in an addendum to the Employer's
Adoption Agreement and that offers collective investment funds for
retirement accounts as to which Texas Commerce Bank National Association
or any affiliated bank serves as a trustee.
APPOINTMENT OF CUSTODIAN. The Employer may appoint a Custodian under the
Plan, the acceptance by the Custodian indicated on the execution page of the
Employer's Adoption Agreement. If the Employer appoints a Custodian, the
Employer's Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B]. The Custodian
accepts the terms of the Plan and Trust by executing the Employer's Adoption
Agreement. Any reference in the Plan to a Trustee also is a reference to a
Custodian where the context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the Custodian's
liability. Any action taken by the Custodian at the discretionary Trustee's
direction satisfies any provision in the Plan referring to the Trustee's taking
that action.
MODIFICATION OF POWERS/LIMITED RESPONSIBILITY. The Employer and the
Custodian or nondiscretionary Trustee, by letter agreement, may limit the
powers of the Custodian or nondiscretionary Trustee to any combination of
powers listed within this Section 10.03[B]. If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the Employer, in
adopting this Plan acknowledges the Custodian or nondiscretionary Trustee has
no discretion with respect to the investment or re-investment of the Trust Fund
and that the Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets comprising the
Trust Fund.
[C] LIMITATION OF POWERS OF CERTAIN CUSTODIANS. If a Custodian is a bank which,
under its governing state law, does not possess trust powers, then paragraphs
(a), (c), (e), (f), (g) of Section 10.03[B], Section 10.16 and Article XI do
not apply to that bank and that bank only has the power and authority to
exercise the remaining powers, rights and duties under Section 10.03[B].
10.04
<PAGE> 58
[D] NAMED FIDUCIARY/LIMITATION OF LIABILITY OF NONDISCRETIONARY TRUSTEE OR
CUSTODIAN. Under a nondiscretionary Trustee designation, the Named Fiduciary
under the Employer's Plan has the sole responsibility for the management and
control of the Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment Manager or with
respect to a Plan asset properly subject to Participant or Advisory Committee
direction of investment. If the Employer appoints a Custodian, the Named
Fiduciary is the discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another person or
persons to serve as Named Fiduciary, the Named Fiduciary under the Plan is the
president of a corporate Employer, the managing partner of a partnership
Employer or the sole proprietor, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its written
direction to the nondiscretionary Trustee or to the Custodian, whichever
applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to review or to
make recommendations regarding investments made at the written direction of the
Named Fiduciary. The nondiscretionary Trustee or Custodian must retain any
investment obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of such
investment. The nondiscretionary Trustee or Custodian is not liable in any
manner or for any reason for making, retaining or disposing of any investment
pursuant to any written direction described in this paragraph. Furthermore, the
Employer agrees to indemnify and to hold the nondiscretionary Trustee or
Custodian harmless from any damages, costs or expenses, including reasonable
counsel fees, which the nondiscretionary Trustee or Custodian may incur as a
result of any claim asserted against the nondiscretionary Trustee, the
Custodian or the Trust arising out of the nondiscretionary Trustee's or
Custodian's compliance with any written direction described in this paragraph.
[E] PARTICIPANT LOANS. This Section 10.03[E] specifically authorizes the
Trustee to make loans on a nondiscriminatory basis to a Participant or to a
Beneficiary in accordance with the loan policy established by the Advisory
Committee, provided: (1) the loan policy satisfies the requirements of Section
9.04; (2) loans are available to all Participants and Beneficiaries on a
reasonably equivalent basis and are not available in a greater amount for
Highly Compensated Employees than for other Employees; (3) any loan is
adequately secured and bears a reasonable rate of interest; (4) the loan
provides for repayment within a specified time; (5) the default provisions of
the note prohibit offset of the Participant's Nonforfeitable Accrued Benefit
prior to the time the Trustee otherwise would distribute the Participant's
Nonforfeitable Accrued Benefit; (6) the amount of the loan does not exceed (at
the time the Plan extends the loan) the present value of the Participant's
Nonforfeitable Accrued Benefit; and (7) the loan otherwise conforms to the
exemption provided by Code Section 4975(d)(1). If the joint and survivor
requirements of Article VI apply to the Participant, the Participant may not
pledge any portion of his Accrued Benefit as security for a loan made after
August 18, 1985, unless, within the 90 day period ending on the date the pledge
becomes effective, the Participant's spouse, if any, consents (in a manner
described in Section 6.05 other than the requirement relating to the consent of
a subsequent spouse) to the security or, by separate consent, to an increase in
the amount of security. If the Employer is an unincorporated trade or business,
a Participant who is an Owner-Employee may not receive a loan from the Plan,
unless he has obtained a prohibited transaction exemption from the Department
of Labor. If the Employer is an "S Corporation," a Participant who is a
shareholder-employee (an employee or an officer) who, at any time during the
Employer's taxable year, owns more than 5%, either directly or by attribution
under Code Section 318(a)(1), of the Employer's outstanding stock may not
receive a loan from the Plan, unless he has obtained a prohibited transaction
exemption from the Department of Labor. If the Employer is not an
unincorporated trade or business nor an "S Corporation," this Section 10.03[E]
does not impose any restrictions on the class of Participants eligible for a
loan from the Plan.
[F] INVESTMENT IN QUALIFYING EMPLOYER SECURITIES AND QUALIFYING EMPLOYER REAL
PROPERTY. The investment options in this Section 10.03[F] include the ability
to invest in qualifying Employer securities or qualifying Employer real
property, as defined in and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption Agreement to
permit the aggregate investments in qualifying Employer securities and in
qualifying Employer real property to exceed 10% of the value of Plan assets.
Unless the qualifying Employer Securities are readily traded on an established
securities market, the Named Fiduciary shall obtain from an "independent
appraiser," within the meaning of Section 401(a)(28)(C) of the Code, an annual
appraisal of such qualified Employer Securities with respect to activities
carried on by the Plan. A copy of such independent appraisal shall be attached
to this Agreement each year.
10.05
<PAGE> 59
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to
the Plan must be open to the inspection of the Plan Administrator, the Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or
Advisory Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or Custodian will receive
reasonable annual compensation as may be agreed upon from time to time between
the Employer and the Trustee or Custodian. No person who is receiving full pay
from the Employer may receive compensation for services as Trustee or as
Custodian. The Trustee will pay from the Trust Fund all fees and expenses
reasonably incurred by the Plan, to the extent such fees and expenses are for
the ordinary and necessary administration and operation of the Plan, unless the
Employer pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to the Plan,
provided the fee or expense relates to the ordinary and necessary
administration of the Fund. If all or a portion of the Trust is invested by the
Trustee in the Retirement Investment Trust, then funds from the Trust that are
so invested shall be subject to the compensation and expenses that are set
forth in the then-effective Prospectus of the Retirement Investment Trust,
which will be provided to the Employer when funds from the Trust are so
invested. The provisions of this Section 10.05 shall equally apply to any
other open-end, diversified management company described in Section
10.03[A](p).
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, no
Participant or Beneficiary is a necessary party or is required to receive
notice of process in any court proceeding involving the Plan, the Trust Fund or
any fiduciary of the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Custodian, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the
Trust Fund reasonable compensation to agents, attorneys, accountants and other
persons to advise the Trustee as in its opinion may be necessary. The Trustee
may delegate to any agent, attorney, accountant or other person selected by it
any non-Trustee power or duty vested in it by the Plan, and the Trustee may act
or refrain from acting on the advice or opinion of any agent, attorney,
accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make
distribution under the Plan in cash or property, or partly in each, at its fair
market value as determined by the Trustee. For purposes of a distribution to a
Participant or to a Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided the contract
satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or
distribution made from the Trust, the Trustee must promptly notify the
Advisory Committee and then dispose of the payment in accordance with the
subsequent direction of the Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee
is obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certificate of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certificate. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or
investment of the Trust Fund or of any portion of the Trust Fund with respect
to which such persons act as Trustee. However, the signature of only one
Trustee is necessary to effect any transaction on behalf of the Trust.
10.06
<PAGE> 60
10.11 RESIGNATION. The Trustee or Custodian may resign its position at
any time by giving 30 days' written notice in advance to the Employer and to
the Advisory Committee. If the Employer fails to appoint a successor Trustee
within 60 days of its receipt of the Trustee's written notice of resignation,
the Trustee will treat the Employer as having appointed itself as Trustee and
as having filed its acceptance of appointment with the former Trustee. The
Employer, in its sole discretion, may replace a Custodian. If the Employer does
not replace a Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in
advance to the Trustee, may remove any Trustee or Custodian. In the event of
the resignation or removal of a Trustee, the Employer must appoint a successor
Trustee if it intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such person, during any
period the selection of a replacement is pending, or during any period such
person is unable to serve for any reason, the remaining person or persons will
act as the Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee
succeeds to the title to the Trust vested in his predecessor by accepting in
writing his appointment as successor Trustee and by filing the acceptance with
the former Trustee and the Advisory Committee without the signing or filing of
any further statement. The resigning or removed Trustee, upon receipt of
acceptance in writing of the Trust by the successor Trustee, must execute all
documents and do all acts necessary to vest the title of record in any
successor Trustee. Each successor Trustee has and enjoys all of the powers,
both discretionary and ministerial, conferred under this Agreement upon his
predecessor. A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required under ERISA. With
the approval of the Employer and the Advisory Committee, a successor Trustee,
with respect to the Plan, may accept the account rendered and the property
delivered to it by a predecessor Trustee without incurring any liability or
responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of
each Accounting Date to determine the fair market value of each Participant's
Accrued Benefit in the Trust. The Trustee also must value the Trust Fund on
such other valuation dates as directed in writing by the Advisory Committee or
as required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER, ANCILLARY
TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee is not liable for the
acts or omissions of any Investment Manager the Advisory Committee may appoint,
nor is the Trustee under any obligation to invest or otherwise manage any asset
of the Plan which is subject to the management of a properly appointed
Investment Manager. The Advisory Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager.
The limitation on liability described in this Section 10.15 also applies
to the acts or omissions of any ancillary trustee or independent fiduciary
properly appointed under Section 10.17 of the Plan. However, if a discretionary
Trustee, pursuant to the delegation described in Section 10.17 of the Plan,
appoints an ancillary trustee, the discretionary Trustee is responsible for the
periodic review of the ancillary trustee's actions and must exercise its
delegated authority in accordance with the terms of the Plan and in a manner
consistent with ERISA. The Employer, the discretionary Trustee and an ancillary
trustee may execute a letter agreement as a part of this Plan delineating any
indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by adopting this
Plan, specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans qualified under
Code Section 401(a). This authorization applies solely to a group trust fund
exempt from taxation under Code Section 501(a) and the trust agreement of which
satisfies the requirements of Revenue Ruling 81-100. The provisions of the
group trust fund agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The provisions of the group trust fund
will govern any investment of Plan assets in that fund. The Employer must
specify in an attachment to its adoption agreement the group trust fund(s) to
which this authorization applies. If the Trustee is acting as a
nondiscretionary Trustee, the investment in the group trust fund is available
only in accordance with a proper
10.07
<PAGE> 61
direction, by the Named Fiduciary, in accordance with Section 10.03[B].
Pursuant to paragraph (c) of Section 10.03[A] of the Plan, a Trustee has the
authority to invest in certain common trust funds and collective investment
funds without the need for the authorizing addendum described in this Section
10.16.
Furthermore, at the Employer's direction, the Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY. The
Employer, in writing, may appoint any person in any State to act as ancillary
trustee with respect to a designated portion of the Trust Fund, subject to the
consent required under Section 1.02 if the Master Plan Sponsor is a financial
institution. An ancillary trustee must acknowledge in writing its acceptance of
the terms and conditions of its appointment as ancillary trustee and its
fiduciary status under ERISA. The ancillary trustee has the rights, powers,
duties and discretion as the Employer may delegate, subject to any limitations
or directions specified in the instrument evidencing appointment of the
ancillary trustee and to the terms of the Plan or of ERISA. The investment
powers delegated to the ancillary trustee may include any investment powers
available under Section 10.03 of the Plan including the right to invest any
portion of the assets of the Trust Fund in a common trust fund, as described in
Code Section 584, or in any collective investment fund, the provisions of which
govern the investment of such assets and which the Plan incorporates by this
reference, but only if the ancillary trustee is a bank or similar financial
institution supervised by the United States or by a State and the ancillary
trustee (or its affiliate, as defined in Code Section 1504) maintains the
common trust fund or collective investment fund exclusively for the collective
investment of money contributed by the ancillary trustee (or its affiliate) in
a trustee capacity and which conforms to the rules of the Comptroller of the
Currency. The Employer also may appoint as an ancillary trustee, the trustee of
any group trust fund designated for investment pursuant to the provisions of
Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by providing
at least 30 days' advance written notice to the Employer, unless the Employer
waives this notice requirement. The Employer, in writing, may remove an
ancillary trustee at any time. In the event of resignation or removal, the
Employer may appoint another ancillary trustee, return the assets to the
control and management of the Trustee or receive such assets in the capacity of
ancillary trustee. The Employer may delegate its responsibilities under this
Section 10.17 to a discretionary Trustee under the Plan, but not to a
nondiscretionary Trustee or to a Custodian, subject to the acceptance by the
discretionary Trustee of that delegation.
10.08
<PAGE> 62
If the U.S. Department of Labor ("the Department") requires engagement
of an independent fiduciary to have control or management of all or a portion
of the Trust Fund, the Employer will appoint such independent fiduciary, as
directed by the Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will exercise
those duties, responsibilities and powers in accordance with the terms,
restrictions and conditions established by the Department and, to the extent
not inconsistent with ERISA, the terms of the Plan. The independent fiduciary
must accept its appointment in writing and must acknowledge its status as a
fiduciary of the Plan.
10.18 EVIDENCE OF ACTION BY ADVISORY COMMITTEE. Any action to be taken
or any direction to be given by the Advisory Committee shall be taken or given
by written instrument signed on behalf of the Advisory Committee by the person
or persons designated by the Advisory Committee to give notification,
instructions or advice to the Trustee, as the case may be. The chairman of the
Advisory Committee shall certify to the Trustee the name or names of any person
or persons designated to give notifications, instructions or advice to the
Trustee. Until the Advisory Committee notifies the Trustee that any such
person is no longer authorized to act for the Advisory Committee, the Trustee
may continue to rely on the authority of such person.
The Trustee may rely upon any certificate, notice or direction purporting to
have been signed on behalf of the Advisory Committee which the Trustee believes
to have been signed by the person or persons authorized to act for the Advisory
Committee.
In the event that any dispute shall arise as to the persons to whom payment of
any funds or delivery of any assets shall be made by the Trustee, the Trustee
may withhold such payment or delivery until such dispute shall have been
determined by a court of competent jurisdiction or shall have been settled by
the parties concerned.
The Employer hereby agrees to indemnify the Trustee against any and all claims,
liabilities, costs or expenses incurred by the Trustee resulting from the
breach or an alleged breach of a fiduciary duty to the Plan by a party other
than the Trustee, including but not limited to, any fiduciary duty or
responsibility owed to the Plan by an Investment Manager appointed hereunder or
any predecessor trustee; provided, however, that, except as otherwise provided
in Section 7.03, nothing herein shall be construed as an indemnification of the
Trustee for any claims, liabilities, costs or expenses resulting from a breach
of its own fiduciary duties with respect to the Plan or Trust or its own gross
negligence or willful misconduct.
Communications to the Trustee shall be sent to the Trustee's registered office
or to such other address as the Trustee may specify in writing. No
communications shall be binding upon the Trust Fund or the Trustee until it is
received by the Trustee.
Communications to the Advisory Committee or to the Employer shall be sent to
the Employer's principal office or to such other address as the Employer may
specify in writing.
10.19 ALLOCATION OF RESPONSIBILITIES AMONG FIDUCIARIES. For purposes
of ERISA, it is recognized that the Employer, Trustee, Plan Administrator,
Advisory Committee and the Investment Manager, if any, are fiduciaries
(collectively referred to herein as "Fiduciaries"), but only with respect to
those specific powers, duties, responsibilities and obligations as are
specifically given them under the Plan; provided, however, that nothing herein
shall prevent a Fiduciary from acting in more than one fiduciary capacity under
the Plan. Each Fiduciary may rely upon any such direction, information or
action of another Fiduciary as being proper under the Plan and in the absence
of actual knowledge to the contrary is not required under the Plan to inquire
into the propriety of any such direction, information or action. It is
intended that each Fiduciary shall be responsible for the proper exercise of
its own powers, duties, responsibilities and obligations under the Plan and,
except as otherwise provided by applicable law which cannot be waived, shall
not be responsible for any act or failure to act of another Fiduciary. No
Fiduciary guarantees the Trust fund in any manner against investment loss or
depreciation in asset values.
10.20 SPECIAL PROVISIONS REGARDING RETIREMENT INVESTMENT TRUSTS. If
the Trustee invests funds of the Trust in the Retirement Investment Trust,
funds so invested will be subject to the fees charged by the Retirement
Investment Trust and the otherwise applicable Trustee fees may be modified as
described in Section 10.05
10.09
<PAGE> 63
of this Plan, which may result in an overall increase in the total fees charged
to the Trust, all as more fully set forth in the current Prospectus of the
Retirement Investment Trust (the "Prospectus"). The Plan Administrator in the
Adoption Agreement shall specifically authorize the Supervisory Committee of
the Retirement Investment Trust to appoint an investment advisor according to
its Rules and Procedures and to pay the investment advisor the fees and
expenses described in the Prospectus. Furthermore, with respect to any
investment in the Retirement Investment Trust, the Employer shall in the
Adoption Agreement waive in advance its right under Texas law to receive
written confirmations of purchases and sales of interests in the Retirement
Investment Trust. The Employer shall acknowledge to the Trustee receipt of the
current Prospectus and shall deliver a copy thereof to each Participant in the
Plan, if direction of investment is permitted, and shall deliver to each
Participant making contributions and each new Participant, a copy of the
then-current Prospectus. The provisions of this Section 10.20 shall equally
apply to any other open-ended, diversified management company described in
Section 10.03[A](p).
* * * * * * * * * * * * * * *
10.10
<PAGE> 64
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental
life insurance benefits for insurable Participants who consent to life
insurance benefits by signing the appropriate insurance company application
form. The Trustee will not purchase any incidental life insurance benefit for
any Participant prior to an allocation to the Participant's Account. At an
insured Participant's written direction, the Trustee will use all or any
portion of the Participant's nondeductible voluntary contributions, if any, to
pay insurance premiums covering the Participant's life. This Section 11.01
also authorizes the purchase of life insurance, for the benefit of the
Participant, on the life of a family member of the Participant or on any person
in whom the Participant has an insurable interest. However, if the policy is on
the joint lives of the Participant and another person, the Trustee may not
maintain that policy if that other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance contracts
issued under the Plan as assets of the Trust created under the Plan.
(A) INCIDENTAL INSURANCE BENEFITS. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the
following percentages of the aggregate of the Employer's contributions
allocated to any Participant's Account: (i) 49% in the case of the purchase of
ordinary life insurance contracts; or (ii) 25% in the case of the purchase of
term life insurance or universal life insurance contracts. If the Trustee
purchases a combination of ordinary life insurance contract(s) and term life
insurance or universal life insurance contract(s), then the sum of one-half of
the premiums paid for the ordinary life insurance contract(s) and the premiums
paid for the term life insurance or universal life insurance contract(s) may
not exceed 25% of the Employer contributions allocated to any Participant's
Account.
(B) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. If the Employer's Plan is a
profit sharing plan, the incidental insurance benefits requirement does not
apply to the Plan if the Plan purchases life insurance benefits only from
Employer contributions accumulated in the Participant's Account for at least
two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond his annuity
starting date (as defined in Article VI). If the Trustee holds any incidental
benefit insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the Trustee must
proceed as follows:
(a) If the entire cash value of the contract(s) is vested in the
terminating Participant, or if the contract(s) will have no cash value
at the end of the policy year in which termination of employment occurs,
the Trustee will transfer the contract(s) to the Participant endorsed so
as to vest in the transferee all right, title and interest to the
contract(s), free and clear of the Trust; subject however, to
restrictions as to surrender or payment of benefits as the issuing
insurance company may permit and as the Advisory Committee directs;
11.01
<PAGE> 65
(b) If only part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee, to the extent the Participant's
interest in the cash value of the contract(s) is not vested, may adjust
the Participant's interest in the value of his Account attributable to
Trust assets other than incidental benefit insurance contracts and
proceed as in (a), or the Trustee must effect a loan from the issuing
insurance company on the sole security of the contract(s) for an amount
equal to the difference between the cash value of the contract(s) at the
end of the policy year in which termination of employment occurs and the
amount of the cash value that is vested in the terminating Participant,
and the Trustee must transfer the contract(s) endorsed so as to vest in
the transferee all right, title and interest to the contract(s), free
and clear of the Trust; subject however, to the restrictions as to
surrender or payment of benefits as the issuing insurance company may
permit and the Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is vested in the
terminating Participant, the Trustee must surrender the contract(s) for
cash proceeds as may be available.
In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements,
if applicable, of Article VI. In this regard, the Trustee either must convert
such a contract to cash and distribute the cash instead of the contract, or
before making the transfer, require the issuing company to delete the
unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a term life
insurance contract issued by an insurer on the life of a Participant.
(b) "Issuing insurance company" is any life insurance company which has
issued a policy upon application by the Trustee under the terms of this
Agreement.
(c) "Contract" or "Contracts" means a policy of insurance. In the event
of any conflict between the provisions of this Plan and the terms of any
contract or policy of insurance issued in accordance with this Article
XI, the provisions of the Plan control.
(d) "Insurable Participant" means a Participant to whom an insurance
company, upon an application being submitted in accordance with the
Plan, will issue insurance coverage, either as a standard risk or as a
risk in an extra mortality classification.
11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must use
all dividends for a contract to purchase insurance benefits or additional
insurance benefits for the Participant on whose life the insurance company has
issued the contract. Furthermore, the Trustee must arrange, where possible, for
all policies issued on the lives of Participants under the Plan to have the
same premium due date and all ordinary life insurance contracts to contain
guaranteed cash values with as uniform basic options as are possible to obtain.
The term "dividends" includes policy dividends, refunds of premiums and other
credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
solely in its capacity as an issuing insurance company, is a party to this
Agreement nor is the company responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No
insurance company, solely in its capacity as an issuing insurance company, need
examine the terms of this Agreement nor is responsible for any action taken by
the Trustee.
11.02
<PAGE> 66
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the
purpose of making application to an insurance company and in the exercise of
any right or option contained in any policy, the insurance company may rely
upon the signature of the Trustee and is saved harmless and completely
discharged in acting at the direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged from all
liability for any amount paid to the Trustee or paid in accordance with the
direction of the Trustee, and is not obliged to see to the distribution or
further application of any moneys it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep
such records, make such identification of contracts, funds and accounts within
funds, and supply such information as may be necessary for the proper
administration of the Plan under which it is carrying insurance benefits.
Note: The provisions of this Article XI are not applicable, and the Plan
may not invest in insurance contracts, if a Custodian signatory to the Adoption
Agreement is a bank which has not acquired trust powers from its governing
state banking authority.
* * * * * * * * * * * * * * *
11.03
<PAGE> 67
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. The
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor
the Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or
make any payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not require the
Trustee or the Advisory Committee to collect any contribution required under
the Plan, or to determine the correctness of the amount of any Employer
contribution. Neither the Trustee nor the Advisory Committee need inquire into
or be responsible for any action or failure to act on the part of the others,
or on the part of any other person who has any responsibility regarding the
management, administration or operation of the Plan, whether by the express
terms of the Plan or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a corporate Employer
must be by its Board of Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. All benefits payable under the Plan
shall be paid or provided for solely from the Trust Fund. The Trustee, the
Advisory Committee, the Plan Administrator and the Employer in no way guarantee
the Trust Fund from loss or depreciation. The Employer does not guarantee the
payment of any money which may be or becomes due to any person from the Trust
Fund. the liability of the Advisory Committee and the Trustee to make any
payment from the Trust Fund at any time and all times is limited to the then
available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan
may waive the notice, unless the Code or Treasury regulations prescribe the
notice or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to
benefits under the Plan, their respective heirs and legal representatives, upon
the Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the
feminine where applicable, and wherever the context of the Employer's Plan
dictates, the plural includes the singular and the singular includes the
plural.
12.07 STATE LAW. The law of the state of the Master Plan Sponsor's
principal place of business (unless otherwise designated in an addendum to the
Employer's Adoption Agreement) will determine all questions arising with
respect to the provisions of this Agreement except to the extent superseded by
Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's Plan fails to
qualify or to maintain qualification or if the Employer makes any amendment or
modification to a provision of this Plan (other than a proper completion of an
elective provision under the Adoption Agreement or the attachment of an
addendum authorized by the Plan or by the Adoption Agreement), the Employer may
no longer participate under this Master Plan. The Employer also may not
participate (or continue to participate) in this Master Plan if the Trustee or
Custodian (or a change in the Trustee or Custodian) does not satisfy the
requirements of Section 1.02 of the Plan. If the Employer is not entitled to
participate under this Master Plan, the Employer's Plan is an
individually-designed plan and the reliance procedures specified in the
applicable Adoption Agreement no longer will apply.
12.01
<PAGE> 68
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or
with respect to the establishment of the Trust, or any modification or
amendment to the Plan or Trust, or in the creation of any Account, or the
payment of any benefit, gives any Employee, Employee-Participant or any
Beneficiary any right to continue employment, any legal or equitable right
against the Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator, except as expressly
provided by the Plan, the Trust, ERISA or by a separate agreement.
* * * * * * * * * * * * * * *
12.02
<PAGE> 69
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the
Employer has no beneficial interest in any asset of the Trust and no part of
any asset in the Trust may ever revert to or be repaid to an Employer, either
directly or indirectly; nor, prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries under the Plan, may any
part of the corpus or income of the Trust Fund, or any asset of the Trust, be
(at any time) used for, or diverted to, purposes other than the exclusive
benefit of the Participants or their Beneficiaries. However, if the
Commissioner of Internal Revenue, upon the Employer's request for initial
approval of this Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the Employer's
contributions (and increment attributable to the contributions) to the
Employer. The Trustee must make the return of the Employer contribution under
this Section 13.01 within one year of a final disposition of the Employer's
request for initial approval of the Plan. The Employer's Plan and Trust will
terminate upon the Trustee's return of the Employer's contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time
and from time to time:
(a) To amend the elective provisions of the Adoption Agreement in
any manner it deems necessary or advisable in order to qualify (or
maintain qualification of) this Plan and the Trust created under it under
the provisions of Code Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a waiver
of the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than
the part which is required to pay taxes and administration expenses) to be used
for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or
permit any portion of the Trust Fund to revert to or become a property of the
Employer. The Employer also may not make any amendment which affects the
rights, duties or responsibilities of the Trustee, the Plan Administrator or
the Advisory Committee without the written consent of the affected Trustee, the
Plan Administrator or the affected member of the Advisory Committee. The
Employer must make all amendments in writing. Each amendment must state the
date to which it is either retroactively or prospectively effective. See
Section 12.08 for the effect of certain amendments adopted by the Employer.
(A) CODE Section 411(d)(6) PROTECTED BENEFITS. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code
Section 412(c)(8), and may not reduce or eliminate Code Section 411(d)(6)
protected benefits determined immediately prior to the adoption date (or, if
later, the effective date) of the amendment. An amendment reduces or eliminates
Code Section 411(d)(6) protected benefits if the amendment has the effect of
either (1) eliminating or reducing an early retirement benefit or a
retirement-type subsidy (as defined in Treasury regulations), or (2) except as
provided by Treasury regulations, eliminating an optional form of benefit. The
Advisory Committee must disregard an amendment to the extent application of the
amendment would fail to satisfy this paragraph. If the Advisory Committee must
disregard an amendment because the amendment would violate clause (1) or clause
(2), the Advisory Committee must maintain a schedule of the early retirement
option or other optional forms of benefit the Plan must continue for the
affected Participants.
13.01
<PAGE> 70
13.03 AMENDMENT BY MASTER PLAN SPONSOR. The Master Plan Sponsor (or
PPD, as agent of the Master Plan Sponsor), without the Employer's consent, may
amend the Plan and Trust, from time to time, in order to conform the Plan and
Trust to any requirement for qualification of the Plan and Trust under the
Internal Revenue Code. The Master Plan Sponsor may not amend the Plan in any
manner which would modify any election made by the Employer under the Plan
without the Employer's written consent. Furthermore, the Master Plan Sponsor
may not amend the Plan in any manner which would violate the proscription of
Section 13.02. A Trustee does not have the power to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any time, to
suspend or discontinue its contributions under the Plan, and to terminate, at
any time, this Plan and the Trust created under this Agreement. The Plan will
terminate upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor
makes provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of
the Plan resulting from this paragraph (b) is not effective until
compliance with any applicable notice requirements under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or partial
termination of the Plan, or, if applicable, upon complete discontinuance of
profit sharing plan contributions to the Plan, an affected Participant's right
to his Accrued Benefit is 100% Nonforfeitable, irrespective of the
Nonforfeitable percentage which otherwise would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a
party to, any merger or consolidation with another plan, or to a transfer of
assets or liabilities to another plan, unless immediately after the merger,
consolidation or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee possesses the specific authority to enter into merger
agreements or direct transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to transfer plan
assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts such a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
(A) ELECTIVE TRANSFERS. The Trustee, after August 9, 1988, may not consent to,
or be a party to a merger, consolidation or transfer of assets with a defined
benefit plan, except with respect to an elective transfer, or unless the
transferred benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in accordance with the
terms of the transferor plan and in a manner consistent with the Code and with
ERISA. The Trustee will hold, administer and distribute the transferred assets
as a part of the Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose behalf the
Trustee accepted the transfer in order to reflect the value of the transferred
assets. Unless a transfer of assets to this Plan is an elective transfer, the
Plan will preserve all Code Section 411(d)(6) protected benefits with respect
to those transferred assets, in the manner described in Section 13.02. A
transfer is an elective transfer if: (1) the transfer satisfies the first
paragraph of this Section 13.06; (2) the transfer is voluntary, under a fully
informed election by the Participant; (3) the Participant has an alternative
that retains his Code Section 411(d)(6) protected benefits (including an option
to leave his benefit in the transferor plan, if that plan is not terminating);
(4) the transfer satisfies the applicable spousal consent requirements of the
Code; (5) the transferor plan satisfies the joint and survivor notice
requirements of the Code, if the Participant's transferred benefit is subject
to those requirements; (6) the Participant has a right to immediate
distribution from the transferor plan, in lieu of the elective transfer; (7)
the transferred benefit is at least the greater of the single sum distribution
provided by the transferor plan for which the Participant is eligible or the
13.02
<PAGE> 71
present value of the Participant's accrued benefit under the transferor plan
payable at that plan's normal retirement age; (8) the Participant has a 100%
Nonforfeitable interest in the transferred benefit; and (9) the transfer
otherwise satisfies applicable Treasury regulations. An elective transfer may
occur between qualified plans of any type. Any direct transfer of assets from a
defined benefit plan after August 9, 1988, which does not satisfy the
requirements of this paragraph will render the Employer's Plan
individually-designed. See Section 12.08.
(B) DISTRIBUTION RESTRICTIONS UNDER CODE Section 401(K). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.07 TERMINATION.
(A) PROCEDURE. Upon termination of the Plan, the distribution provisions of
Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $3,500, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued Benefit
to him in lump sum as soon as administratively practicable after the
Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500, the Participant or the Beneficiary, in addition
to the distribution events permitted under Article VI, may elect to have
the Trustee commence distribution of his Nonforfeitable Accrued Benefit
as soon as administratively practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $3,500 and the Participant does not elect an immediate
distribution pursuant to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of the
preceding provisions of this Section 13.07 and the distribution provisions of
Article VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan, irrespective of
the present value of the Participant's Nonforfeitable Accrued Benefit and
whether the Participant consents to that distribution. This paragraph does not
apply if: (1) the Plan provides an annuity option; or (2) as of the period
between the Plan termination date and the final distribution of assets, the
Employer maintains any other defined contribution plan (other than an ESOP).
The Employer, in an addendum to its Adoption Agreement numbered 13.07, may
elect not to have this paragraph apply.
The Trust will continue until the Trustee in accordance with the
direction of the Advisory Committee has distributed all of the benefits under
the Plan. On each valuation date, the Advisory Committee will credit any part
of a Participant's Accrued Benefit retained in the Trust with its proportionate
share of the Trust's income, expenses, gains and losses, both realized and
unrealized. Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to the
conditions of the Treasury regulations permitting such a reversion. A
resolution or amendment to freeze all future benefit accrual but otherwise to
continue maintenance of this Plan, is not a termination for purposes of this
Section 13.07.
13.03
<PAGE> 72
(B) DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(K). If the Employer's Plan
includes a Code Section 401(k) arrangement or if transferred assets described
in Section 13.06 are subject to the distribution restrictions of Code Sections
401(k)(2) and (10), the special distribution provisions of this Section 13.07
are subject to the restrictions of this paragraph. The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to elective
contributions (or to amounts treated under the Code Section 401(k) arrangement
as elective contributions) is not distributable on account of Plan termination,
as described in this Section 13.07, unless: (a) the Participant otherwise is
entitled under the Plan to a distribution of that portion of his Nonforfeitable
Accrued Benefit; or (b) the Plan termination occurs without the establishment
of a successor plan. A successor plan under clause (b) is a defined
contribution plan (other than an ESOP) maintained by the Employer (or by a
related employer) at the time of the termination of the Plan or within the
period ending twelve months after the final distribution of assets. A
distribution made after March 31, 1988, pursuant to clause (b), must be part of
a lump sum distribution to the Participant of his Nonforfeitable Accrued
Benefit.
* * * * * * * * * * * * * * *
13.04
<PAGE> 73
ARTICLE XIV
CODE Section 401(K) AND CODE Section 401(M) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's Plan only
if the Employer is maintaining its Plan under a Code Section 401(k) Adoption
Agreement.
14.02 CODE Section 401(k) ARRANGEMENT. The Employer will elect in
Section 3.01 of its Adoption Agreement the terms of the Code Section 401(k)
arrangement, if any, under the Plan. If the Employer's Plan is a Standardized
Plan, the Code Section 401(k) arrangement must be a salary reduction
arrangement. If the Employer's Plan is a Nonstandardized Plan, the Code Section
401(k) arrangement may be a salary reduction arrangement or a cash or deferred
arrangement.
(A) SALARY REDUCTION ARRANGEMENT. If the Employer elects a salary reduction
arrangement, any Employee eligible to participate in the Plan may file a salary
reduction agreement with the Advisory Committee. The salary reduction agreement
may not be effective earlier than the following date which occurs last: (i) the
Employee's Plan Entry Date (or, in the case of a reemployed Employee, his
reparticipation date under Article II); (ii) the execution date of the
Employee's salary reduction agreement; (iii) the date the Employer adopts the
Code Section 401(k) arrangement by executing the Adoption Agreement; or (iv)
the effective date of the Code Section 401(k) arrangement, as specified in the
Employer's Adoption Agreement. Regarding clause (i), an Employee subject to the
Break in Service rule of Section 2.03(B) of the Plan may not enter into a
salary reduction agreement until the Employee has completed a sufficient number
of Hours of Service to receive credit for a Year of Service (as defined in
Section 2.02) following his reemployment commencement date. A salary reduction
agreement must specify the amount of Compensation (as defined in Section 1.12)
or percentage of Compensation the Employee wishes to defer. The salary
reduction agreement will apply only to Compensation which becomes currently
available to the Employee after the effective date of the salary reduction
agreement. The Employer will apply a reduction election to all Compensation
(and to increases in such Compensation) unless the Employee specifies in his
salary reduction agreement to limit the election to certain Compensation. The
Employer will specify in Adoption Agreement Section 3.01 the rules and
restrictions applicable to the Employees salary reduction agreements.
(B) CASH OR DEFERRED ARRANGEMENT. If the Employer elects a cash or deferred
arrangement, a Participant may elect to make a cash election against his
proportionate share of the Employer's Cash or Deferred Contribution, in
accordance with the Employer's elections in Adoption Agreement Section 3.01. A
Participant's proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred Contribution which
bears the same ratio that the Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year. For
purposes of determining each Participant's proportionate share of the Cash or
Deferred Contribution, a Participant's Compensation is his Compensation as
determined under Section 1.12 of the Plan (as modified by Section 3.06 for
allocation purposes), excluding any effect the proportionate share may have on
the Participant's Compensation for the Plan Year. The Advisory Committee will
determine the proportionate share prior to the Employer's actual contribution
to the Trust, to provide the Participants the opportunity to file cash
elections. The Employer will pay directly to the Participant the portion of his
proportionate share the Participant has elected to receive in cash.
(C) ELECTION NOT TO PARTICIPATE. A Participant's or Employee's election not
to participate, pursuant to Section 2.06, includes his right to enter into a
salary reduction agreement or to share in the allocation of a Cash or Deferred
Contribution, unless the Participant or Employee limits the effect of the
election to the non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible Employee who
satisfies the definition in Section 1.09 of the Plan. Family members
aggregated as a single Employee under Section 1.09 constitute a single
Highly Compensated Employee, whether a particular family member is a
Highly Compensated Employee or a Nonhighly Compensated Employee without
the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible Employee who
is not a Highly Compensated
14.01
<PAGE> 74
Employee and who is not a family member treated as a Highly Compensated
Employee.
(c) "Eligible Employee" means, for purposes of the ADP test described
in Section 14.08, an Employee who is eligible to enter into a salary
reduction agreement for the Plan Year, irrespective of whether he
actually enters into such an agreement, and a Participant who is
eligible for an allocation of the Employer's Cash or Deferred
Contribution for the Plan Year. For purposes of the ACP test described
in Section 14.09, an "Eligible Employee" means a Participant who is
eligible to receive an allocation of matching contributions (or would be
eligible if he made the type of contributions necessary to receive an
allocation of matching contributions) and a Participant who is eligible
to make nondeductible contributions, irrespective of whether he actually
makes nondeductible contributions. An Employee continues to be an
Eligible Employee during a period the Plan suspends the Employee's right
to make elective deferrals or nondeductible contributions following a
hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible Employees
who are Highly Compensated Employees for the Plan Year.
(e) "Nonhighly Compensated Group" means the group of Eligible
Employees who are Nonhighly Compensated Employees for the Plan Year.
(f) "Compensation" means, except as specifically provided in this
Article XIV, Compensation as defined for nondiscrimination purposes in
Section 1.12(B) of the Plan. To compute an Employee's ADP or ACP, the
Advisory Committee may limit Compensation taken into account to
Compensation received only for the portion of the Plan Year in which the
Employee was an Eligible Employee and only for the portion of the Plan
Year in which the Plan or the Code Section 401(k) arrangement was in
effect.
(g) "Deferral contributions" are Salary Reduction Contributions and
Cash or Deferred Contributions the Employer contributes to the Trust on
behalf of an Eligible Employee, irrespective of whether, in the case of
Cash or Deferred Contributions, the contribution is at the election of
the Employee. For Salary Reduction Contributions, the terms "deferral
contributions" and "elective deferrals" have the same meaning.
(h) "Elective deferrals" are all Salary Reduction Contributions and
that portion of any Cash or Deferred Contribution which the Employer
contributes to the Trust at the election of an Eligible Employee. Any
portion of a Cash or Deferred Contribution contributed to the Trust
because of the Employee's failure to make a cash election is an elective
deferral. However, any portion of a Cash or Deferred Contribution over
which the Employee does not have a cash election is not an elective
deferral. Elective deferrals do not include amounts which have become
currently available to the Employee prior to the election nor amounts
designated as nondeductible contributions at the time of deferral or
contribution.
(i) "Matching contributions" are contributions made by the Employer
on account of elective deferrals under a Code Section 401(k) arrangement
or on account of employee contributions. Matching contributions also
include Participant forfeitures allocated on account of such elective
deferrals or employee contributions.
(j) "Nonelective contributions" are contributions made by the
Employer which are not subject to a deferral election by an Employee and
which are not matching contributions.
(k) "Qualified matching contributions" are matching contributions
which are 100% Nonforfeitable at all times and which are subject to the
distribution restrictions described in paragraph (m). Matching
contributions are not 100% Nonforfeitable at all times if the Employee
has a 100% Nonforfeitable interest because of his Years of Service taken
into account under a vesting schedule. Any matching contributions
allocated to a Participant's Qualified Matching Contributions Account
under the Plan automatically satisfy the definition of qualified
matching contributions.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and which are
subject to the distribution restrictions described in paragraph (m).
Nonelective contributions are not 100% Nonforfeitable at all times if
the Employee has a 100% Nonforfeitable interest because of his Years
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<PAGE> 75
of Service taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified Nonelective
Contributions Account under the Plan automatically satisfy the
definition of qualified nonelective contributions.
(m) "Distribution restrictions" means the Employee may not receive a
distribution of the specified contributions (nor earnings on those
contributions) except in the event of (1) the Participant's death,
disability, termination of employment or attainment of age 59 1/2, (2)
financial hardship satisfying the requirements of Code Section 401(k)
and the applicable Treasury regulations, (3) a plan termination, without
establishment of a successor defined contribution plan (other than an
ESOP), (4) a sale of substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or business, but only to an
employee who continues employment with the corporation acquiring those
assets, or (5) a sale by a corporation of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)), but only to an employee
who continues employment with the subsidiary. For Plan Years beginning
after December 31, 1988, a distribution on account of financial
hardship, as described in clause (2), may not include earnings on
elective deferrals credited as of a date later than December 31, 1988,
and may not include qualified matching contributions and qualified
nonelective contributions, nor any earnings on such contributions,
credited after December 31, 1988. A plan does not violate the
distribution restrictions if, instead of the December 31, 1988, date in
the preceding sentence the plan specifies a date not later than the end
of the last Plan Year ending before July 1, 1989. A distribution
described in clauses (3), (4) or (5), if made after March 31, 1988, must
be a lump sum distribution, as required under Code Section 401(k)(10).
(n) "Employee contributions" are contributions made by a Participant
on an after-tax basis, whether voluntary or mandatory, and designated,
at the time of contribution, as an employee (or nondeductible)
contribution. Elective deferrals and deferral contributions are not
employee contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The Employer may
elect in Adoption Agreement Section 3.01 to provide matching contributions. The
Employer also may elect in Adoption Agreement Section 4.01 to permit or to
require a Participant to make nondeductible contributions.
(A) MANDATORY CONTRIBUTIONS. Any Participant nondeductible contributions
eligible for matching contributions are mandatory contributions. The Advisory
Committee will maintain a separate accounting, pursuant to Section 4.06 of the
Plan, to reflect the Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section 4.05, may
prescribe special distribution restrictions which will apply to the Mandatory
Contributions Account prior to the Participant's Separation from Service.
Following his Separation from Service, the general distribution provisions of
Article VI apply to the distribution of the Participant's Mandatory
Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must make Salary
Reduction Contributions to the Trust within an administratively reasonable
period of time after withholding the corresponding Compensation from the
Participant. Furthermore, the Employer must make Salary Reduction
Contributions, Cash or Deferred Contributions, Employer matching contributions
(including qualified Employer matching contributions) and qualified Employer
nonelective contributions no later than the time prescribed by the Code or by
applicable Treasury regulations. Salary Reduction Contributions and Cash or
Deferred Contributions are Employer contributions for all purposes under this
Plan, except to the extent the Code or Treasury regulations prohibit the use of
these contributions to satisfy the qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL CONTRIBUTIONS, MATCHING
CONTRIBUTIONS AND QUALIFIED NONELECTIVE CONTRIBUTIONS. To make allocations
under the Plan, the Advisory Committee must establish a Deferral Contributions
Account, a Qualified Matching Contributions Account, a Regular Matching
Contributions Account, a Qualified Nonelective Contributions Account and an
Employer Contributions Account for each Participant.
(A) DEFERRAL CONTRIBUTIONS. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the amount of Deferral
Contributions the Employer makes to the Trust on behalf of the Participant. The
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<PAGE> 76
Advisory Committee will make this allocation as of the last day of each Plan
Year unless, in Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) MATCHING CONTRIBUTIONS. The Employer must specify in its Adoption
Agreement whether the Advisory Committee will allocate matching contributions
to the Qualified Matching Contributions Account or to the Regular Matching
Contributions Account of each Participant. The Advisory Committee will make
this allocation as of the last day of each Plan Year unless, in Adoption
Agreement Section 3.04, the Employer elects more frequent allocation dates for
matching contributions.
(1) To the extent the Employer makes matching contributions under a
fixed matching contribution formula, the Advisory Committee will
allocate the matching contribution to the Account of the Participant on
whose behalf the Employer makes that contribution. A fixed matching
contribution formula is a formula under which the Employer contributes a
certain percentage or dollar amount on behalf of a Participant based on
that Participant's deferral contributions or nondeductible contributions
eligible for a match, as specified in Section 3.01 of the Employer's
Adoption Agreement. The Employer may contribute on a Participant's
behalf under a specific matching contribution formula only if the
Participant satisfies the accrual requirements for matching
contributions specified in Section 3.06 of the Employer's Adoption
Agreement and only to the extent the matching contribution does not
exceed the Participant's annual additions limitation in Part 2 of
Article III.
(2) To the extent the Employer makes matching contributions under a
discretionary formula, the Advisory Committee will allocate the
discretionary matching contributions to the Account of each Participant
who satisfies the accrual requirements for matching contributions
specified in Section 3.06 of the Employer's Adoption Agreement. The
allocation of discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's eligible
contributions bear to the total eligible contributions of all
Participants. If the discretionary formula is a tiered formula, the
Advisory Committee will make this allocation separately with respect to
each tier of eligible contributions, allocating in such manner the
amount of the matching contributions made with respect to that tier.
"Eligible contributions" are the Participant's deferral contributions or
nondeductible contributions eligible for an allocation of matching
contributions, as specified in Section 3.01 of the Employer's Adoption
Agreement.
If the matching contribution formula applies both to deferral
contributions and to Participant nondeductible contributions, the matching
contributions apply first to deferral contributions. Furthermore, the matching
contribution formula does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last elective deferrals made for a
calendar year. Under a Standardized Plan, an Employee forfeits any matching
contribution attributable to an excess contribution or to an excess aggregate
contribution, unless distributed pursuant to Sections 14.08 or 14.09. Under a
Nonstandardized Plan, this forfeiture rule applies only if specified in
Adoption Agreement Section 3.06. The provisions of Section 3.05 govern the
treatment of any forfeiture described in this paragraph, and the Advisory
Committee will compute a Participant's ACP under 14.09 by disregarding the
forfeiture.
(C) QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's Adoption
Agreement. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation for
the Plan Year bears to the total Compensation of all eligible Participants for
the Plan Year. The Advisory Committee will determine a Participant's
Compensation in accordance with the general definition of Compensation under
Section 1.12 of the Plan, as modified by the Employer in Sections 1.12 and 3.06
of its Adoption Agreement.
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<PAGE> 77
(D) NONELECTIVE CONTRIBUTIONS. To the extent the Employer makes nonelective
contributions for the Plan Year which, at the time of contribution, it does not
designate as qualified nonelective contributions, the Advisory Committee will
allocate those contributions in accordance with the elections under Section
3.04 of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09, the Advisory
Committee may treat nonelective contributions allocated under this paragraph as
qualified nonelective contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) ANNUAL ELECTIVE DEFERRAL LIMITATION. An Employee's elective deferrals
for a calendar year beginning after December 31, 1986, may not exceed the
402(g) limitation. The 402(g) limitation is the greater of $7,000 or the
adjusted amount determined by the Secretary of the Treasury. If, pursuant to a
salary reduction agreement or pursuant to a cash or deferral election, the
Employer determines the Employee's elective deferrals to the Plan for a
calendar year would exceed the 402(g) limitation, the Employer will suspend the
Employee's salary reduction agreement, if any, until the following January 1
and pay in cash the portion of a cash or deferral election which would result
in the Employee's elective deferrals for the calendar year exceeding the 402(g)
limitation. If the Advisory Committee determines an Employee's elective
deferrals already contributed to the Plan for a calendar year exceed the 402(g)
limitation, the Advisory Committee will distribute the amount in excess of the
402(g) limitation (the "excess deferral"), as adjusted for allocable income, no
later than April 15 of the following calendar year. If the Advisory Committee
distributes the excess deferral by the appropriate April 15, it may make the
distribution irrespective of any other provision under this Plan or under the
Code. The Advisory Committee will reduce the amount of excess deferrals for a
calendar year distributable to the Employee by the amount of excess
contributions (as determined in Section 14.08), if any, previously distributed
to the Employee for the Plan Year beginning in that calendar year.
If an Employee participates in another plan under which he makes
elective deferrals pursuant to a Code Section 401(k) arrangement, elective
deferrals under a Simplified Employee Pension, or salary reduction
contributions to a tax- sheltered annuity, irrespective of whether the Employer
maintains the other plan, he may provide the Advisory Committee a written claim
for excess deferrals made for a calendar year. The Employee must submit the
claim no later than the March 1 following the close of the particular calendar
year and the claim must specify the amount of the Employee's elective deferrals
under this Plan which are excess deferrals. If the Advisory Committee receives
a timely claim, it will distribute the excess deferral (as adjusted for
allocable income) the Employee has assigned to this Plan, in accordance with
the distribution procedure described in the immediately preceding paragraph.
(B) ALLOCABLE INCOME. For purposes of making a distribution of excess
deferrals pursuant to this Section 14.07, allocable income means net income or
net loss allocable to the excess deferrals for the calendar year in which the
Employee made the excess deferral, determined in a manner which is uniform,
nondiscriminatory and reasonably reflective of the manner used by the Plan to
allocate income to Participants' Accounts.
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's Code Section 401(k)
arrangement satisfies either of the following ADP tests:
(i) The average ADP for the Highly Compensated Group does not exceed
1.25 times the average ADP of the Nonhighly Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does not exceed
the average ADP for the Nonhighly Compensated Group by more than two
percentage points (or the lesser percentage permitted by the multiple
use limitation in Section 14.10) and the average ADP for the Highly
Compensated Group is not more than twice the average ADP for the
Nonhighly Compensated Group.
(A) CALCULATION OF ADP. The average ADP for a group is the average of the
separate ADPs calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's ADP for a Plan Year is the ratio of the Eligible
Employee's deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members treated as a
single Highly Compensated Employee, the ADP of the family unit is the
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<PAGE> 78
ADP determined by combining the deferral contributions and Compensation of all
aggregated family members. A Nonhighly Compensated Employee's ADP does not
include elective deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the 402(g)
limitation described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by taking into
account qualified nonelective contributions or qualified matching
contributions, or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not include qualified
nonelective contributions in the ADP test unless the allocation of nonelective
contributions is nondiscriminatory when the Advisory Committee takes into
account all nonelective contributions (including the qualified nonelective
contributions) and also when the Advisory Committee takes into account only the
nonelective contributions not used in either the ADP test described in this
Section 14.08 or the ACP test described in Section 14.09. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ADP test any qualified nonelective contributions or qualified matching
contributions under another qualified plan unless that plan has the same plan
year as this Plan. The Advisory Committee must maintain records to demonstrate
compliance with the ADP test, including the extent to which the Plan used
qualified nonelective contributions or qualified matching contributions to
satisfy the test.
For Plan Years beginning prior to January 1, 1992, the Advisory
Committee may elect to apply a separate ADP test to each component group under
the Plan. Each component group separately must satisfy the commonality
requirement of the Code Section 401(k) regulations and the minimum coverage
requirements of Code Section 410(b). A component group consists of all the
allocations and other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component group. The
correction rules described in this Section 14.08 apply separately to each
component group.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the ADP of any Highly Compensated Employee, the deferral contributions taken
into account must include any elective deferrals made by the Highly Compensated
Employee under any other Code Section 401(k) arrangement maintained by the
Employer, unless the elective deferrals are to an ESOP. If the plans containing
the Code Section 401(k) arrangements have different plan years, the Advisory
Committee will determine the combined deferral contributions on the basis of
the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN CODE SECTION 401(K) ARRANGEMENTS. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code Section 401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. For Plan Years beginning after December 31, 1989, an
aggregation of Code Section 401(k) arrangements under this paragraph does not
apply to plans which have different plan years and, for Plan Years beginning
after December 31, 1988, the Advisory Committee may not aggregate an ESOP (or
the ESOP portion of a plan) with a non- ESOP plan (or non-ESOP portion of a
plan).
(D) CHARACTERIZATION OF EXCESS CONTRIBUTIONS. If, pursuant to this Section
14.08, the Advisory Committee has elected to include qualified matching
contributions in the average ADP, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated Employee's excess
contributions for the Plan Year exceeds his deferral contributions or qualified
matching contributions for the Plan Year, the Advisory Committee will treat the
remaining portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the amount of
excess contributions for a Plan Year distributable to a Highly Compensated
Employee by the amount of excess deferrals (as determined in Section 14.07), if
any, previously distributed to that Employee for the Employee's taxable year
ending in that Plan Year.
(E) DISTRIBUTION OF EXCESS CONTRIBUTIONS. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, it must
distribute the excess contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer will incur an excise tax equal to 10%
of the amount of excess contributions for
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<PAGE> 79
a Plan Year not distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess contributions
are the amount of deferral contributions made by the Highly Compensated
Employees which causes the Plan to fail to satisfy the ADP test. The Advisory
Committee will distribute to each Highly Compensated Employee his respective
share of the excess contributions. The Advisory Committee will determine the
respective shares of excess contributions by starting with the Highly
Compensated Employee(s) who has the greatest ADP, reducing his ADP (but not
below the next highest ADP), then, if necessary, reducing the ADP of the Highly
Compensated Employee(s) at the next highest ADP level (including the ADP of the
Highly Compensated Employee(s) whose ADP the Advisory Committee already has
reduced), and continuing in this manner until the average ADP for the Highly
Compensated Group satisfies the ADP test. If the Highly Compensated Employee is
part of an aggregated family group, the Advisory Committee, in accordance with
the applicable Treasury regulations, will determine each aggregated family
member's allocable share of the excess contributions assigned to the family
unit.
(F) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.08, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess contributions arose.
"Allocable income" means net income or net loss. To calculate allocable income
for the Plan Year, the Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner used by the Plan
to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan Years beginning
after December 31, 1986, the Advisory Committee must determine whether the
annual Employer matching contributions (other than qualified matching
contributions used in the ADP under Section 14.08), if any, and the Employee
contributions, if any, satisfy either of the following average contribution
percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not exceed 1.25
times the ACP of the Nonhighly Compensated Group; or
(ii) The ACP for the Highly Compensated Group does not exceed the ACP
for the Nonhighly Compensated Group by more than two percentage points
(or the lesser percentage permitted by the multiple use limitation in
Section 14.10) and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Nonhighly Compensated Group.
(A) CALCULATION OF ACP. The average contribution percentage for a group is
the average of the separate contribution percentages calculated for each
Eligible Employee who is a member of that group. An Eligible Employee's
contribution percentage for a Plan Year is the ratio of the Eligible Employee's
aggregate contributions for the Plan Year to the Employee's Compensation for
the Plan Year. "Aggregate contributions" are Employer matching contributions
(other than qualified matching contributions used in the ADP test under Section
14.08) and employee contributions (as defined in Section 14.03). For aggregated
family members treated as a single Highly Compensated Employee, the
contribution percentage of the family unit is the contribution percentage
determined by combining the aggregate contributions and Compensation of all
aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the Eligible
Employees by taking into account qualified nonelective contributions (other
than qualified nonelective contributions used in the ADP test under Section
14.08) or elective deferrals, or both, made to this Plan or to any other
qualified Plan maintained by the Employer. The Advisory Committee may not
include qualified nonelective contributions in the ACP test unless the
allocation of nonelective contributions is nondiscriminatory when the Advisory
Committee takes into account all nonelective contributions (including the
qualified nonelective contributions) and also when the Advisory Committee takes
into account only the nonelective contributions not used in either the ADP test
described in Section 14.08 or the ACP test described in this Section 14.09. The
Advisory Committee may not include elective deferrals in the ACP test, unless
the Plan which includes the elective deferrals satisfies the ADP test both with
and without the elective deferrals included in this ACP test. For Plan Years
beginning after December 31, 1989, the Advisory Committee may not include in
the ACP test any qualified nonelective contributions or elective deferrals
under another qualified plan unless that plan has the same plan year as this
Plan.
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<PAGE> 80
The Advisory Committee must maintain records to demonstrate compliance with the
ACP test, including the extent to which the Plan used qualified nonelective
contributions or elective deferrals to satisfy the test. For Plan Years
beginning prior to January 1, 1992, the component group testing rule permitted
under Section 14.08(A) also applies to the ACP test under this Section 14.09.
(B) SPECIAL AGGREGATION RULE FOR HIGHLY COMPENSATED EMPLOYEES. To determine
the contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.
(C) AGGREGATION OF CERTAIN PLANS. If the Employer treats two plans as a unit
for coverage or nondiscrimination purposes, the Employer must combine the plans
to determine whether either plan satisfies the ACP test. This aggregation rule
applies to the contribution percentage determination for all Eligible
Employees, irrespective of whether an Eligible Employee is a Highly Compensated
Employee or a Nonhighly Compensated Employee. For Plan Years beginning after
December 31, 1989, an aggregation of plans under this paragraph does not apply
to plans which have different plan years and, for Plan Years beginning after
December 31, 1988, the Advisory Committee may not aggregate an ESOP (or the
ESOP portion of a plan) with a non-ESOP plan (or non-ESOP portion of a plan).
(D) DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will determine excess aggregate contributions after determining excess
deferrals under Section 14.07 and excess contributions under Section 14.08. If
the Advisory Committee determines the Plan fails to satisfy the ACP test for a
Plan Year, it must distribute the excess aggregate contributions, as adjusted
for allocable income, during the next Plan Year. However, the Employer will
incur an excise tax equal to 10% of the amount of excess aggregate
contributions for a Plan Year not distributed to the appropriate Highly
Compensated Employees during the first 2 1/2 months of that next Plan Year. The
excess aggregate contributions are the amount of aggregate contributions
allocated on behalf of the Highly Compensated Employees which causes the Plan
to fail to satisfy the ACP test. The Advisory Committee will distribute to each
Highly Compensated Employee his respective share of the excess aggregate
contributions. The Advisory Committee will determine the respective shares of
excess aggregate contributions by starting with the Highly Compensated
Employee(s) who has the greatest contribution percentage, reducing his
contribution percentage (but not below the next highest contribution
percentage), then, if necessary, reducing the contribution percentage of the
Highly Compensated Employee(s) at the next highest contribution percentage
level (including the contribution percentage of the Highly Compensated
Employee(s) whose contribution percentage the Advisory Committee already has
reduced), and continuing in this manner until the ACP for the Highly
Compensated Group satisfies the ACP test. If the Highly Compensated Employee is
part of an aggregated family group, the Advisory Committee, in accordance with
the applicable Treasury regulations, will determine each aggregated family
member's allocable share of the excess aggregate contributions assigned to the
family unit.
(E) ALLOCABLE INCOME. To determine the amount of the corrective distribution
required under this Section 14.09, the Advisory Committee must calculate the
allocable income for the Plan Year in which the excess aggregate contributions
arose. "Allocable income" means net income or net loss. The Advisory Committee
will determine allocable income in the same manner as described in Section
14.08(F) for excess contributions.
(F) CHARACTERIZATION OF EXCESS AGGREGATE CONTRIBUTIONS. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his Employee contributions which are voluntary contributions, if any; (2) then
as matching contributions allocable with respect to excess contributions
determined under the ADP test described in Section 14.08; (3) then on a pro
rata basis to matching contributions and to the deferral contributions relating
to those matching contributions which the Advisory Committee has included in
the ACP test; (4) then on a pro rata basis to Employee contributions which are
mandatory contributions, if any, and to the matching contributions allocated on
the basis of those mandatory contributions; and (5) last to qualified
nonelective contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are attributable to
matching contributions, and he is not 100% vested in his Accrued Benefit
attributable to matching contributions, the Advisory Committee will
14.08
<PAGE> 81
distribute only the vested portion and forfeit the nonvested portion. The
vested portion of the Highly Compensated Employee's excess aggregate
contributions attributable to Employer matching contributions is the total
amount of such excess aggregate contributions (as adjusted for allocable
income) multiplied by his vested percentage (determined as of the last day of
the Plan Year for which the Employer made the matching contribution). The
Employer will specify in Adoption Agreement Section 3.05 the manner in which
the Plan will allocate forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning after December
31, 1988, if at least one Highly Compensated Employee is includible in the ADP
test under Section 14.08 and in the ACP test under Section 14.09, the sum of
the Highly Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice
the lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple use
limitation as the sum of (i) and (ii), may elect to determine the multiple use
limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated
Group under the Code Section 401(k) arrangement; or (b) the ACP of the
Nonhighly Compensated Group for the Plan Year beginning with or within
the Plan Year of the Code Section 401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than
twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.08 and the
ACP test under Section 14.09 and after making any corrective distributions
required by those Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to satisfy the multiple use
limitation, the Advisory Committee will correct the failure by treating the
excess amount as excess contributions under Section 14.08 or as excess
aggregate contributions under Section 14.09, as it determines in its sole
discretion. This Section 14.10 does not apply unless, prior to application of
the multiple use limitation, the ADP and the ACP of the Highly Compensated
Group each exceeds 125% of the respective percentages for the Nonhighly
Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in Section 6.03
the Adoption Agreement the distribution events permitted under the Plan. The
distribution events applicable to the Participant's Deferral Contributions
Account, Qualified Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions described in
paragraph (m) of Section 14.03.
(A) HARDSHIP DISTRIBUTIONS FROM DEFERRAL CONTRIBUTIONS ACCOUNT. The Employer
must elect in Adoption Agreement Section 6.03 whether a Participant may receive
hardship distributions from his Deferral Contributions Account prior to the
Participant's Separation from Service. Hardship distributions from the Deferral
Contributions Account must satisfy the requirements of this Section 14.11. A
hardship distribution option may not apply to the Participant's Qualified
Nonelective Contributions Account or Qualified Matching Contributions Account,
except as provided in paragraph (3).
(1) DEFINITION OF HARDSHIP. A hardship distribution under this
Section 14.11 must be on account of one or more of the following immediate and
heavy financial needs: (1) medical care described in Code Section 213(d)
incurred by the Participant, by the Participant's spouse, or by any of the
Participant's dependents, or necessary to obtain such medical care; (2) the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition and related
educational fees, for the next 12-month period, for the
14.09
<PAGE> 82
Participant, for the Participant's spouse, or for any of the Participant's
dependents (as defined in Code Section 152); (4) to prevent the eviction of the
Participant from his principal residence or the foreclosure on the mortgage of
the Participant's principal residence; or (5) any need prescribed by the
Revenue Service in a revenue ruling, notice or other document of general
applicability which satisfies the safe harbor definition of hardship.
(2) RESTRICTIONS. The following restrictions apply to a Participant
who receives a hardship distribution: (a) the Participant may not make elective
deferrals or employee contributions to the Plan for the 12-month period
following the date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need (including any
amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution); (c) the Participant
must have obtained all distributions, other than hardship distributions, and
all nontaxable loans (determined at the time of the loan) currently available
under this Plan and all other qualified plans maintained by the Employer; and
(d) the Participant agrees to limit elective deferrals under this Plan and
under any other qualified Plan maintained by the Employer, for the
Participant's taxable year immediately following the taxable year of the
hardship distribution, to the 402(g) limitation (as described in Section
14.07), reduced by the amount of the Participant's elective deferrals made in
the taxable year of the hardship distribution. The suspension of elective
deferrals and employee contributions described in clause (a) also must apply to
all other qualified plans and to all nonqualified plans of deferred
compensation maintained by the Employer, other than any mandatory employee
contribution portion of a defined benefit plan, including stock option, stock
purchase and other similar plans, but not including health or welfare benefit
plans (other than the cash or deferred arrangement portion of a cafeteria
plan).
(3) EARNINGS. For Plan Years beginning after December 31, 1988, a
hardship distribution under this Section 14.11 may not include earnings on an
Employee's elective deferrals credited after December 31, 1988. Qualified
matching contributions and qualified nonelective contributions, and any
earnings on such contributions, credited as of December 31, 1988, are subject
to the hardship withdrawal only if the Employer specifies in an addendum to
this Section 14.11. The addendum may modify the December 31, 1988, date for
purposes of determining credited amounts provided the date is not later than
the end of the last Plan Year ending before July 1, 1989.
(B) DISTRIBUTIONS AFTER SEPARATION FROM SERVICE. Following the Participant's
Separation from Service, the distribution events applicable to the Participant
apply equally to all of the Participant's Accounts, except as elected in
Section 6.03 of the Employer's Adoption Agreement.
(C) CORRECTION OF ANNUAL ADDITIONS LIMITATION. If, as a result of a
reasonable error in determining the amount of elective deferrals an Employee
may make without violating the limitations of Part 2 of Article III, an Excess
Amount results, the Advisory Committee will return the Excess Amount (as
adjusted for allocable income) attributable to the elective deferrals. The
Advisory Committee will make this distribution before taking any corrective
steps pursuant to Section 3.10 or to Section 3.16. The Advisory Committee will
disregard any elective deferrals returned under this Section 14.11(C) for
purposes of Sections 14.07, 14.08 and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code Section 401(k) arrangement
provides for salary reduction contributions, if the Plan accepts Employee
contributions, pursuant to Adoption Agreement Section 4.01, or if the Plan
allocates matching contributions as of any date other than the last day of the
Plan Year, the Employer must elect in Adoption Agreement 9.11 whether any
special allocation provisions will apply under Section 9.11 of the Plan. For
purposes of the elections:
(a) A "segregated Account" direction means the Advisory Committee
will establish a segregated Account for the applicable contributions
made on the Participant's behalf during the Plan Year. The Trustee must
invest the segregated Account in Federally insured interest bearing
savings account(s) or time deposits, or a combination of both, or in any
other fixed income investments, unless otherwise specified in the
Employer's Adoption Agreement. As of the last day of each Plan Year
(or, if earlier, an allocation date coinciding with a valuation date
described in Section 9.11), the Advisory Committee will reallocate the
segregated Account to the Participant's appropriate Account, in
accordance with Section 3.04 or Section 4.06, whichever applies to the
contributions.
14.10
<PAGE> 83
(b) A "weighted average allocation" method will treat a weighted
portion of the applicable contributions as if includible in the
Participant's Account as of the beginning of the valuation period. The
weighted portion is a fraction, the numerator of which is the number of
months in the valuation period, excluding each month in the valuation
period which begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of months in
the valuation period. The Employer may elect in its Adoption Agreement
to substitute a weighting period other than months for purposes of this
weighted average allocation.
* * * * * * * * * * * * * * *
14.11
<PAGE> 84
ARTICLE A
APPENDIX TO PLAN AND TRUST AGREEMENT
This Article is necessary to comply with the Unemployment Compensation
Amendments Act of 1992 and is an integral part of the basic plan document.
Section 12.08 applies to any modification or amendment of this Article.
A-1. APPLICATIONS. This Article applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Article, a distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
A-2. DEFINITIONS.
(a) "Eligible rollover distribution." An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Code Section 401(a)(9); and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion of net unrealized appreciation with respect to employer
securities).
(b) "Eligible retirement plan." An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a),
that accepts the distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
(c) "Distributee." A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the interest of the spouse or
former spouse.
(d) "Direct rollover." A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
A-1
<PAGE> 85
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
The undersigned, Horizon Health Corporation ("Employer"), by executing
this Adoption Agreement, elects to become a participating Employer in the Texas
Commerce Bank National Association Defined Contribution Master Plan (basic plan
document #03) by adopting the accompanying Plan and Trust in full as if the
Employer were a signatory to that Agreement. The Employer makes the following
elections granted under the provisions of the Master Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is:
(Choose (a) or (b))
[ ] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[X] (b) A nondiscretionary Trustee. See Section 10.03[B] of the
Plan. [Note: The Employer may not elect Option (b) if a Custodian
executes the Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is
Horizon Health Corporation Employees Savings and Profit Sharing Plan.
1.07 EMPLOYEE. The following Employees are not eligible to
participate in the Plan: (Choose (a) or at least one of (b) through (g))
[ ] (a) No exclusions.
[ ] (b) Collective bargaining employees (as defined in Section 1.07
of the Plan). [Note: If the Employer excludes union employees from
the Plan, the Employer must be able to provide evidence that
retirement benefits were the subject of good faith bargaining.]
[X] (c) Nonresident aliens who do not receive any earned income (as
defined in Code Section 911(d)(2)) from the Employer which
constitutes United States source income (as defined in Code Section
861(a)(3)).
[ ] (d) Commission Salesmen.
[ ] (e) Any Employee compensated on a salaried basis.
[ ] (f) Any Employee compensated on an hourly basis.
[X] (g) (Specify) Independent Contractors .
LEASED EMPLOYEES. Any Leased Employee treated as an Employee under Section
1.31 of the Plan, is: (Choose (h) or (i))
[ ] (h) Not eligible to participate in the Plan.
<PAGE> 86
[X] (i) Eligible to participate in the Plan, unless excluded by
reason of an exclusion classification elected under this Adoption
Agreement Section 1.07.
RELATED EMPLOYERS. If any member of the Employer's related group (as defined
in Section 1.30 of the Plan) executes a Participation Agreement to this
Adoption Agreement, such member's Employees are eligible to participate in this
Plan, unless excluded by reason of an exclusion classification elected under
this Adoption Agreement Section 1.07. In addition: (Choose (j) or (k))
[X] (j) No other related group member's Employees are eligible to
participate in the Plan.
[ ] (k) The following nonparticipating related group member's
Employees are eligible to participate in the Plan unless excluded
by reason of an exclusion classification elected under this
Adoption Agreement Section 1.07:
_____________________________________________________________.
1.12 COMPENSATION.
TREATMENT OF ELECTIVE CONTRIBUTIONS. (Choose (a) or (b))
[X] (a) "Compensation" includes elective contributions made by the
Employer on the Employee's behalf.
[ ] (b) "Compensation" does not include elective contributions.
MODIFICATIONS TO COMPENSATION DEFINITION. (Choose (c) or at least one of (d)
through (j))
[ ] (c) No modifications other than as elected under Options (a) or
(b).
[ ] (d) The Plan excludes Compensation in excess of $_____________.
[ ] (e) In lieu of the definition in Section 1.12 of the Plan,
Compensation means any earnings reportable as W-2 wages for Federal
income tax withholding purposes, subject to any other election
under this Adoption Agreement Section 1.12.
[X] (f) The Plan excludes bonuses.
[X] (g) The Plan excludes overtime.
[X] (h) The Plan excludes Commissions.
[ ] (i) Compensation will not include Compensation from a related
employer (as defined in Section 1.30 of the Plan) that has not
executed a Participation Agreement in this Plan unless, pursuant to
Adoption Agreement Section 1.07, the Employees of that related
employer are eligible to participate in this Plan.
[X] (j) (Specify) Compensation with respect to any Participant
means such Participant's regular salary and wages paid by the
Employer for a Plan Year, but excluding overtime, commissions and
bonuses. Amounts contributed by the Employer under the within
Plan, except for an Employee's Compensation that is deferred
pursuant to ARTICLE 3.01, Part III (k) (ii), and any non-taxable
fringe benefits shall not be considered as Compensation.
If, for any Plan Year, the Plan uses permitted disparity in the contribution or
allocation formula elected under Article III, any election of Options (f), (g),
(h) or (j) is ineffective for such Plan Year with respect to any Nonhighly
Compensated Employee.
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<PAGE> 87
SPECIAL DEFINITION FOR MATCHING CONTRIBUTIONS. "Compensation" for purposes of
any matching contribution formula under Article III means: (Choose (k) or (l)
only if applicable)
[X] (k) Compensation as defined in this Adoption Agreement Section
1.12.
[ ] (l) (Specify) ________________________________________________.
SPECIAL DEFINITION FOR SALARY REDUCTION CONTRIBUTIONS. An Employee's salary
reduction agreement applies to his Compensation determined prior to the
reduction authorized by that salary reduction agreement, with the following
exceptions: (Choose (m) or at least one of (n) or (o), if applicable)
[X] (m) No exceptions.
[ ] (n) If the Employee makes elective contributions to another
plan maintained by the Employer, the Advisory Committee will
determine the amount of the Employee's salary reduction
contribution for the withholding period: (Choose (1) or (2))
[ ] (1) After the reduction for such period of elective
contributions to the other plan(s).
[ ] (2) Prior to the reduction for such period of elective
contributions to the other plan(s).
[ ] (o) (Specify) ___________________________________________.
1.17 PLAN YEAR/LIMITATION YEAR.
PLAN YEAR. Plan Year means: (Choose (a) or (b))
[X] (a) The 12 consecutive month period ending every December 31.
[ ] (b) (Specify) ___________________________________________.
LIMITATION YEAR. The Limitation Year is: (Choose (c) or (d))
[ ] (c) The Plan Year.
[X] (d) The 12 consecutive month period ending every December 31.
1.18 EFFECTIVE DATE.
NEW PLAN. The "Effective Date" of the Plan is ____________________.
RESTATED PLAN. The restated Effective Date is July 1, 1996.
This Plan is a substitution and amendment of an existing retirement plan(s)
originally established October 1, 1990. [Note: See the Effective Date
Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service is:
(Choose (a) or (b))
[X] (a) The actual method.
[ ] (b) The _ equivalency method, except:
[ ] (1) No exceptions.
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<PAGE> 88
[ ] (2) The actual method applies for purposes of: (Choose at least
one)
[ ] (i) Participation under Article II.
[ ] (ii) Vesting under Article V.
[ ] (iii) Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll
periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): Mental Health
Management, Inc., Geriatric Medical Care, Inc., NME, and Community Care
Systems, Inc. Service with the designated predecessor employer(s) applies:
(Choose at least one of (a) or (b); (c) is available only in addition to (a) or
(b))
[X] (a) For purposes of participation under Article II.
[X] (b) For purposes of vesting under Article V.
[X] (c) Except the following Service: Prior service with Geriatric Medical
Care, Inc. and Community Care Systems, Inc. shall not apply for purposes
of Vesting under Article V.
[Note: If the Plan does not credit any predecessor service under this
provision, insert "N/A" in the first blank line. The Employer may attach a
schedule to this Adoption Agreement, in the same format as this Section 1.29,
designating additional predecessor employers and the applicable service
crediting elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan
and also participates in a plan maintained by the leasing organization: (Choose
(a) or (b))
[X] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without taking
into account the Leased Employee's allocation, if any, under the leasing
organization's plan.
[ ] (b) The Advisory Committee will reduce a Leased Employee's allocation of
Employer nonelective contributions (other than designated qualified
nonelective contributions) under this Plan by the Leased Employee's
allocation under the leasing organization's plan, but only to the extent
that allocation is attributable to the Leased Employee's service provided
to the Employer. The leasing organization's plan:
[ ] (1) Must be a money purchase plan which would satisfy the
definition under Section 1.31 of a safe harbor plan, irrespective
of whether the safe harbor exception applies.
[ ] (2) Must satisfy the features and, if a defined benefit plan,
the method of reduction described in an addendum to this Adoption
Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
ELIGIBILITY CONDITIONS. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose (a) or (b) or both; (c)
is optional as an additional election)
[X] (a) Attainment of age 21 (specify age, not exceeding 21).
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<PAGE> 89
[X] (b) Service requirement. (Choose one of (1) through (3))
[X] (1) One Year of Service.
[ ] (2) __ months (not exceeding 12) following the Employee's
Employment Commencement Date.
[ ] (3) One Hour of Service.
[ ] (c) Special requirements for non-401(k) portion of plan. (Make elections
under (1) and under (2))
(1) The requirements of this Option (c) apply to participation in:
(Choose at least one of (i) through (iii))
[ ] (i) The allocation of Employer nonelective contributions
and Participant forfeitures.
[ ] (ii) The allocation of Employer matching contributions
(including forfeitures allocated as matching contributions).
[ ] (iii) The allocation of Employer qualified nonelective
contributions.
(2) For participation in the allocations described in (1), the
eligibility conditions are: (Choose at least one of (i) through (iv))
[ ] (i) _ (one or two) Year(s) of Service, without an
intervening Break in Service (as described in Section
2.03(A) of the Plan) if the requirement is two Years of
Service.
[ ] (ii) __ months (not exceeding 24) following the Employee's
Employment Commencement Date.
[ ] (iii) One Hour of Service.
[ ] (iv) Attainment of age ____ (Specify age, not exceeding 21).
PLAN ENTRY DATE. "Plan Entry Date" means the Effective Date and: (Choose (d),
(e) or (f))
[ ] (d) Semi-annual Entry Dates. The first day of the Plan Year and the
first day of the seventh month of the Plan Year.
[ ] (e) The first day of the Plan Year.
[X] (f) (Specify entry dates) 1) the first day of any month; August 1, 1994,
for Employees who were employed by Mental Health Management, Inc. on July
31, 1994; March 15, 1997, for Employees who were employed by Geriatric
Medical Care, Inc. on March 14, 1997; August 11, 1997, for Employees who
were employed by Specialty Healthcare Management, Inc. or Community Care
Systems, Inc. on August 10, 1997.
TIME OF PARTICIPATION. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option (c)(1)),
unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date
(if employed on that date): (Choose (g), (h) or (i))
[X] (g) immediately following
[ ] (h) immediately preceding
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<PAGE> 90
[ ] (i) nearest
the date the Employee completes the eligibility conditions described in Options
(a) and (b) (or in Option (c)(2) if applicable) of this Adoption Agreement
Section 2.01. [Note: The Employer must coordinate the selection of (g), (h) or
(i) with the "Plan Entry Date" selection in (d), (e) or (f). Unless otherwise
excluded under Section 1.07, the Employee must become a Participant by the
earlier of: (1) the first day of the Plan Year beginning after the date the
Employee completes the age and service requirements of Code Section 410(a); or
(2) 6 months after the date the Employee completes those requirements.]
DUAL ELIGIBILITY. The eligibility conditions of this Section 2.01 apply to:
(Choose (j) or (k))
[ ] (j) All Employees of the Employer, except: (Choose (1) or (2))
[ ] (1) No exceptions.
[ ] (2) Employees who are Participants in the Plan as of the
Effective Date.
[X] (k) Solely to an Employee employed by the Employer after August 11, 1997.
If the Employee was employed by the Employer on or before the specified
date, the Employee will become a Participant: (Choose (1), (2) or (3))
[ ] (1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age ____ (not to exceed
21).
[ ] (2) Under the eligibility conditions in effect under the Plan
prior to the restated Effective Date. If the restated Plan
required more than one Year of Service to participate, the
eligibility condition under this Option (2) for participation in
the Code Section 401(k) arrangement under this Plan is one Year
of Service for Plan Years beginning after December 31, 1988.
[For restated plans only]
[X] (3) (Specify) On August 11, 1997, if the Employee is eligible to
participate in the Specialty Healthcare Management 401(k) Plan on
August 10, 1997; the entry date specified in Section 2.01(f)
immediately following the date the Employee employed by Specialty
Healthcare Management, Inc. on August 10, 1997, would enter the
Plan if the eligibility computation period specified in Section
2.02(c) is used to determine Years of Service for participation,
if earlier than the date determined under this Section 2.01; and
on the date the Employee would otherwise enter the Plan under
this Section 2.01 for all other Employees of the Employer
employed on or before August 11, 1997.
2.02 YEAR OF SERVICE - PARTICIPATION.
HOURS OF SERVICE. An Employee must complete: (Choose (a) or (b))
[X] (a) 1,000 Hours of Service
[ ] (b) ____ Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000.]
ELIGIBILITY COMPUTATION PERIOD. After the initial eligibility computation
period described in Section 2.02 of the Plan, the Plan measures the eligibility
computation period as: (Choose (c) or (d))
[ ] (c) The 12 consecutive month period beginning with each anniversary of an
Employee's Employment Commencement Date.
[X] (d) The Plan Year, beginning with the Plan Year which includes the first
anniversary of the Employee's Employment Commencement Date.
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<PAGE> 91
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule described
in Section 2.03(B) of the Plan: (Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan.
[ ] (b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b))
[X] (a) Does not permit an eligible Employee or a Participant to elect not to
participate.
[ ] (b) Does permit an eligible Employee or a Participant to elect not to
participate in accordance with Section 2.06 and with the following rules:
(Complete (1), (2), (3) and (4))
(1) An election is effective for a Plan Year if filed no later than
_______________________________________.
(2) An election not to participate must be effective for at least __ Plan
Year(s).
(3) Following a re-election to participate, the Employee or Participant:
[ ] (i) May not again elect not to participate for any subsequent
Plan Year.
[ ] (ii) May again elect not to participate, but not earlier than the
__________ Plan Year following the Plan Year in which the
re-election first was effective.
(4) (Specify) ___________________________________________ [Insert "N/A"
if no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
PART I. [OPTIONS (a) THROUGH (g)] AMOUNT OF EMPLOYER'S CONTRIBUTION. The
Employer's annual contribution to the Trust will equal the total amount of
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions, as determined under this Section
3.01. (Choose any combination of (a), (b), (c) and (d), or choose (e))
[X] (a) DEFERRAL CONTRIBUTIONS (CODE SECTION 401(k) ARRANGEMENT). (Choose
(1) or (2) or both)
[X] (1) Salary reduction arrangement. The Employer must contribute
the amount by which the Participants have reduced their
Compensation for the Plan Year, pursuant to their salary
reduction agreements on file with the Advisory Committee. A
reference in the Plan to salary reduction contributions is a
reference to these amounts.
[ ] (2) Cash or deferred arrangement. The Employer will contribute
on behalf of each Participant the portion of the Participant's
proportionate share of the cash or deferred contribution which he
has not elected to receive in cash. See Section 14.02 of the
Plan. The Employer's cash or deferred contribution is the amount
the Employer may from time to time deem advisable which the
Employer designates as a cash or deferred contribution prior to
making that contribution to the Trust.
[X] (b) MATCHING CONTRIBUTIONS. The Employer will make matching
contributions in accordance with the formula(s) elected in Part II of
this Adoption Agreement Section 3.01.
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<PAGE> 92
[X] (c) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS. The Employer, in its
sole discretion, may contribute an amount which it designates as a
qualified nonelective contribution.
[ ] (d) NONELECTIVE CONTRIBUTIONS. (Choose any combination of (1) through
(4))
[ ] (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
[ ] (2) The amount (or additional amount) the Employer may from time
to time deem advisable, separately determined for each of the
following classifications of Participants: (Choose (i) or (ii))
[ ] (i) Nonhighly Compensated Employees and Highly
Compensated Employees.
[ ] (ii) (Specify classifications) ________________________.
Under this Option (2), the Advisory Committee will allocate the
amount contributed for each Participant classification in
accordance with Part II of Adoption Agreement Section 3.04, as if
the Participants in that classification were the only Participants
in the Plan.
[ ] (3) ______% of the Compensation of all Participants under the
Plan, determined for the Employer's taxable year for which it
makes the contribution. [Note: The percentage selected may not
exceed 15%.]
[ ] (4) ______% of Net Profits but not more than $_____________.
[ ] (e) FROZEN PLAN. This Plan is a frozen Plan effective ________. The
Employer will not contribute to the Plan with respect to any period
following the stated date.
NET PROFITS. The Employer: (Choose (f) or (g))
[X] (f) Need not have Net Profits to make its annual contribution under this
Plan.
[ ] (g) Must have current or accumulated Net Profits exceeding $_________ to
make the following contributions: (Choose at least one)
[ ] (1) Cash or deferred contributions described in Option (a)(2).
[ ] (2) Matching contributions described in Option (b), except:
_____________________.
[ ] (3) Qualified nonelective contributions described in Option (c).
[ ] (4) Nonelective contributions described in Option (d).
The term "Net Profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of account
in accordance with generally accepted accounting practices consistently applied
without any deductions for Federal and state taxes upon income or for
contributions made by the Employer under this Plan or under any other employee
benefit plan the Employer maintains. The term "Net Profits" specifically
excludes N/A . [Note: Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the
Employer does not have sufficient
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<PAGE> 93
Net Profits under Option (g), it will reduce the matching contribution under a
fixed formula on a prorata basis for all Participants. A Participant's share
of the reduced contribution will bear the same ratio as the matching
contribution the Participant would have received if Net Profits were sufficient
bears to the total matching contribution all Participants would have received
if Net Profits were sufficient. If more than one member of a related group (as
defined in Section 1.30) execute this Adoption Agreement, each participating
member will determine Net Profits separately but will not apply this reduction
unless, after combining the separately determined Net Profits, the aggregate
Net Profits are insufficient to satisfy the matching contribution liability.
"Net Profits" includes both current and accumulated Net Profits.
PART II. [OPTIONS (h) THROUGH (j)] MATCHING CONTRIBUTION FORMULA. [Note: If
the Employer elected Option (b), complete Options (h), (i) and (j).]
[X] (h) AMOUNT OF MATCHING CONTRIBUTIONS. For each Plan Year, the Employer's
matching contribution is: (Choose any combination of (1), (2), (3), (4)
and (5))
[ ] (1) An amount equal to ______% of each Participant's eligible
contributions for the Plan Year.
[ ] (2) An amount equal to ______% of each Participant's first tier
of eligible contributions for the Plan Year, plus the following
matching percentage(s) for the following subsequent tiers of
eligible contributions for the Plan
__________________________________________________________________
___________ .
[X] (3) Discretionary formula.
[X] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem
advisable of the Participant's eligible contributions for
the Plan Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem
advisable of each tier of the Participant's eligible
contributions for the Plan Year.
[ ] (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year, based on
the Participant's Years of Service:
<TABLE>
<CAPTION>
Number of Years of Service Matching Percentage
- ------------------------------------------------------------------------------------------------
<S> <C>
---------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
The Advisory Committee will apply this formula by determining
Years of Service as follows: _______________
_____________________________________________________________.
[ ] (5) A Participant's matching contributions may not: (Choose (i)
or (ii))
[ ] (i) Exceed ___________________________________________.
[ ] (ii) Be less than __________________________________.
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RELATED EMPLOYERS. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect
different matching contribution formulas by attaching to the Adoption
Agreement a separately completed copy of this Part II. Note: Separate
matching contribution formulas create separate current benefit structures
that must satisfy the minimum participation test of Code Section
401(a)(26).]
[X] (i) DEFINITION OF ELIGIBLE CONTRIBUTIONS. Subject to the requirements of
Option (j), the term "eligible contributions" means: (Choose any
combination of (1) through (3))
[X] (1) Salary reduction contributions.
[ ] (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred
contribution which the Employer defers without the Participant's
election).
[ ] (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the Plan.
[X] (j) AMOUNT OF ELIGIBLE CONTRIBUTIONS TAKEN INTO ACCOUNT. When
determining a Participant's eligible contributions taken into account
under the matching contributions formula(s), the following rules apply:
(Choose any combination of (1) through (4))
[X] (1) The Advisory Committee will take into account all eligible
contributions credited for the Plan Year.
[ ] (2) The Advisory Committee will disregard eligible contributions
exceeding _______________________________ _____.
[ ] (3) The Advisory Committee will treat as the first tier of
eligible contributions, an amount not exceeding:
________________________________________.
The subsequent tiers of eligible contributions are: ____________.
[ ] (4) (Specify) ___________________________________________.
PART III. [OPTIONS (k) AND (l)]. SPECIAL RULES FOR CODE SECTION 401(k)
ARRANGEMENT. (Choose (k) or (l), or both, as applicable)
[X] (k) SALARY REDUCTION AGREEMENTS. The following rules and restrictions
apply to an Employee's salary reduction agreement: (Make a selection
under (1), (2), (3) and (4))
(1) Limitation on amount. The Employee's salary reduction contributions:
(Choose (i) or at least one of (ii) or (iii))
[ ] (i) No maximum limitation other than as provided in the
Plan.
[X] (ii) May not exceed 15% of Compensation for the Plan Year,
subject to the annual additions limitation described in Part
2 of Article III and the 402(g) limitation described in
Section 14.07 of the Plan.
[X] (iii) Based on percentages of Compensation must equal at
least 2% and in increments of 1%.
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(2) An Employee may revoke, on a prospective basis, a salary reduction
agreement: (Choose (i), (ii), (iii) or (iv))
[ ] (i) Once during any Plan Year but not later than
____________________________________________________ _____
of the Plan Year.
[ ] (ii) As of any Plan Entry Date.
[ ] (iii) As of the first day of any month.
[X] (iv) (Specify, but must be at least once per Plan Year) any
time during the Plan Year.
(3) An Employee who revokes his salary reduction agreement may file a new
salary reduction agreement with an effective date: (Choose (i), (ii),
(iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[ ] (ii) As of any subsequent Plan Entry Date.
[ ] (iii) As of the first day of any month subsequent to the
month in which he revoked an Agreement.
[X] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation) as of any Plan Entry
Date following a six month waiting period.
(4) A Participant may increase or may decrease, on a prospective basis,
his salary reduction percentage or dollar amount: (Choose (i), (ii),
(iii) or (iv))
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[ ] (iii) As of any Plan Entry Date.
[X] (iv) (Specify, but must permit an increase or a decrease at
least once per Plan Year) January 1, April 1, July 1, or
October 1 .
[ ] (l) CASH OR DEFERRED CONTRIBUTIONS. For each Plan Year for which the
Employer makes a designated cash or deferred contribution, a Participant
may elect to receive directly in cash not more than the following portion
(or, if less, the 402(g) limitation described in Section 14.07 of the
Plan) of his proportionate share of that cash or deferred contribution:
(Choose (1) or (2))
[ ] (1) All or any portion.
[ ] (2) __________________________________%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate
deferral contributions, matching contributions, qualified nonelective
contributions and nonelective contributions in accordance with Section 14.06
and the elections under this Adoption Agreement Section 3.04.
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PART I. [OPTIONS (a) THROUGH (d)]. SPECIAL ACCOUNTING ELECTIONS. (Choose
whichever elections are applicable to the Employer's Plan)
[X] (a) MATCHING CONTRIBUTIONS ACCOUNT. The Advisory Committee will allocate
matching contributions to a Participant's: (Choose (1) or (2); (3) is
available only in addition to (1))
[X] (1) Regular Matching Contributions Account.
[ ] (2) Qualified Matching Contributions Account.
[ ] (3) Except, matching contributions under Option(s) _ of Adoption
Agreement Section 3.01 are allocable to the Qualified Matching
Contributions Account.
[X] (b) SPECIAL ALLOCATION DATES FOR SALARY REDUCTION CONTRIBUTIONS. The
Advisory Committee will allocate salary reduction contributions as of the
Accounting Date and as of the following additional allocation dates: as
soon as administratively feasible following receipt by the Trustee.
[X] (c) SPECIAL ALLOCATION DATES FOR MATCHING CONTRIBUTIONS. The Advisory
Committee will allocate matching contributions as of the Accounting Date
and as of the following additional allocation dates: as soon as
administratively feasible following receipt by the Trustee.
[X] (d) DESIGNATED QUALIFIED NONELECTIVE CONTRIBUTIONS - DEFINITION OF
PARTICIPANT. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (Choose (1), (2) or (3))
[ ] (1) All Participants.
[X] (2) Participants who are Nonhighly Compensated Employees for the
Plan Year.
[ ] (3) (Specify) ___________________________________________.
PART II. METHOD OF ALLOCATION - NONELECTIVE CONTRIBUTION. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee will
allocate and credit each annual nonelective contribution (and Participant
forfeitures treated as nonelective contributions) to the Employer Contributions
Account of each Participant who satisfies the conditions of Section 3.06, in
accordance with the allocation method selected under this Section 3.04. If the
Employer elects Option (e)(2), Option (g)(2) or Option (h), for the first 3% of
Compensation allocated to all Participants, "Compensation" does not include any
exclusions elected under Adoption Agreement Section 1.12 (other than the
exclusion of elective contributions), and the Advisory Committee must take into
account the Participant's Compensation for the entire Plan Year. (Choose an
allocation method under (e), (f), (g) or (h); (i) is mandatory if the Employer
elects (f), (g) or (h); (j) is optional in addition to any other election.)
[N/A] (e) NONINTEGRATED ALLOCATION FORMULA. (Choose (1) or (2))
[ ] (1) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
[ ] (2) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year. For purposes of this Option
(2), "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year, any
other Participant entitled to a top heavy minimum allocation
under Section 3.04(B), but such Participant's allocation will not
exceed 3% of his Compensation for the Plan Year.
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<PAGE> 97
[ ] (f) TWO-TIERED INTEGRATED ALLOCATION FORMULA - MAXIMUM DISPARITY. First,
the Advisory Committee will allocate the annual Employer nonelective
contributions in the same ratio that each Participant's Compensation plus
Excess Compensation for the Plan Year bears to the total Compensation
plus Excess Compensation of all Participants for the Plan Year. The
allocation under this paragraph, as a percentage of each Participant's
Compensation plus Excess Compensation, must not exceed the applicable
percentage (5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table
following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
[ ] (g) THREE-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual Employer nonelective contributions in
the same ratio that each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year.
The allocation under this paragraph, as a percentage of each
Participant's Compensation may not exceed the applicable percentage
(5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table following
Option (i). Solely for purposes of the allocation in this first
paragraph, "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year: (Choose (1)
or (2))
[ ] (1) No other Participant.
[ ] (2) Any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's
allocation under this Option (g) will not exceed 3% of his
Compensation for the Plan Year.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year. The allocation under
this paragraph, as a percentage of each Participant's Excess
Compensation, may not exceed the allocation percentage in the first
paragraph.
Finally, the Advisory Committee will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
[ ] (h) FOUR-TIERED INTEGRATED ALLOCATION FORMULA. First, the Advisory
Committee will allocate the annual Employer nonelective contributions in
the same ratio that each Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for the Plan Year,
but not exceeding 3% of each Participant's Compensation. Solely for
purposes of this first tier allocation, a "Participant" means, in
addition to any Participant who satisfies the requirements of Section
3.06 for the Plan Year, any other Participant entitled to a top heavy
minimum allocation under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding 3%
of each Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the
annual Employer contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the
total Compensation plus Excess Compensation of all Participants for the
Plan Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation plus Excess Compensation, must not exceed the
applicable percentage (2.7%, 2.4% or 1.3%) listed under the Maximum
Disparity Table following Option (i).
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<PAGE> 98
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
[ ] (i) EXCESS COMPENSATION. For purposes of Option (f), (g) or (h), "Excess
Compensation" means Compensation in excess of the following Integration
Level: (Choose (1) or (2))
[ ] (1) _____% (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act, in
effect on the first day of the Plan Year: (Choose any combination
of (i) and (ii) or choose (iii))
[ ] (i) Rounded to _________________________________________
(but not exceeding the taxable wage base).
[ ] (ii) But not greater than $______.
[ ] (iii) Without any further adjustment or limitation.
[ ] (2) $____________ [Note: Not exceeding the taxable wage base for
the Plan Year in which this Adoption Agreement first is
effective.]
MAXIMUM DISPARITY TABLE. For purposes of Options (f), (g) and (h), the
applicable percentage is:
<TABLE>
<CAPTION>
Integration Level (as Applicable Percentages for Applicable Percentages
percentage of taxable wage base) Option (f) or Option (g) for Option (h)
- -------------------------------- -------------------------- ----------------------
<S> <C> <C>
100% 5.7% 2.7%
More than 80% but less than 100% 5.4% 2.4%
More than 20% (but not less than $10,001)
and not more than 80% 4.3% 1.3%
20% (or $10,000, if greater) or less 5.7% 2.7%
</TABLE>
[ ] (j) ALLOCATION OFFSET. The Advisory Committee will reduce a
Participant's allocation otherwise made under Part II of this Section
3.04 by the Participant's allocation under the following qualified
plan(s) maintained by the Employer:
____________________________________________________________________.
The Advisory Committee will determine this allocation reduction: (Choose
(1) or (2))
[ ] (1) By treating the term "nonelective contribution" as including
all amounts paid or accrued by the Employer during the Plan Year
to the qualified plan(s) referenced under this Option (j). If a
Participant under this Plan also participates in that other plan,
the Advisory Committee will treat the amount the Employer
contributes for or during a Plan Year on behalf of a particular
Participant under such other plan as an amount allocated under
this Plan to that Participant's Account for that Plan Year. The
Advisory Committee will make the computation of allocation
required under the immediately preceding sentence before making
any allocation of nonelective contributions under this Section
3.04.
[ ] (2) In accordance with the formula provided in an addendum to
this Adoption Agreement, numbered 3.04(j).
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<PAGE> 99
TOP HEAVY MINIMUM ALLOCATION - METHOD OF COMPLIANCE. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum
allocation to which he is entitled under Section 3.04(B): (Choose (k) or (l))
[X] (k) The Employer will make any necessary additional contribution to the
Participant's Account, as described in Section 3.04(B)(7)(a) of the Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation under the
following plan(s) it maintains: __________
___________________________________________________. However, the
Employer will make any necessary additional contribution to satisfy the
top heavy minimum allocation for an Employee covered only under this Plan
and not under the other plan(s) designated in this Option (l). See
Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an addendum
to this Adoption Agreement, numbered Section 3.04, any modifications to the
Plan necessary to satisfy the top heavy requirements under Code Section 416.
RELATED EMPLOYERS. If two or more related employers (as defined in Section
1.30) contribute to this Plan, the Advisory Committee must allocate all
Employer nonelective contributions (and forfeitures treated as nonelective
contributions) to each Participant in the Plan, in accordance with the
elections in this Adoption Agreement Section 3.04: (Choose (m) or (n))
[X] (m) Without regard to which contributing related group member employs the
Participant.
[ ] (n) Only to the Participants directly employed by the contributing
Employer. If a Participant receives Compensation from more than one
contributing Employer, the Advisory Committee will determine the
allocations under this Adoption Agreement Section 3.04 by prorating among
the participating Employers the Participant's Compensation and, if
applicable, the Participant's Integration Level under Option (i).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation
required under Sections 5.04 or 9.14, the Advisory Committee will allocate a
Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b); (c)
and (d) are optional in addition to (a) or (b))
[X] (a) As an Employer nonelective contribution for the Plan Year in which
the forfeiture occurs, as if the Participant forfeiture were an
additional nonelective contribution for that Plan Year.
[ ] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (Choose (1) or (2))
[ ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (c) To the extent attributable to matching contributions: (Choose (1),
(2) or (3))
[ ] (1) In the manner elected under Options (a) or (b).
[ ] (2) First to reduce Employer matching contributions for the Plan
Year: (Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[ ] (ii) immediately following the Plan Year in which the
forfeiture occurs,
then as elected in Options (a) or (b).
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<PAGE> 100
[X] (3) As a discretionary matching contribution for the Plan
Year in which the forfeiture occurs, in lieu of the manner
elected under Options (a) or (b).
[X] (d) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year and then will allocate any remaining
forfeitures in the manner described in Options (a), (b) or (c), whichever
applies. If the Employer elects Option (c), the forfeitures used to
reduce Plan expenses: (Choose (1) or (2))
[X] (1) relate proportionately to forfeitures described in Option
(c) and to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option ____.
ALLOCATION OF FORFEITED EXCESS AGGREGATE CONTRIBUTIONS. The Advisory Committee
will allocate any forfeited excess aggregate contributions (as described in
Section 14.09): (Choose (e), (f) or (g))
[ ] (e) To reduce Employer matching contributions for the Plan Year: (Choose
(1) or (2))
[ ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (f) As Employer discretionary matching contributions for the Plan Year in
which forfeited, except the Advisory Committee will not allocate these
forfeitures to the Highly Compensated Employees who incurred the
forfeitures.
[ ] (g) In accordance with Options (a) through (d), whichever applies, except
the Advisory Committee will not allocate these forfeitures under Option
(a) or under Option (c)(3) to the Highly Compensated Employees who
incurred the forfeitures.
3.06 ACCRUAL OF BENEFIT.
COMPENSATION TAKEN INTO ACCOUNT. For the Plan Year in which the Employee first
becomes a Participant, the Advisory Committee will determine the allocation of
any cash or deferred contribution, designated qualified nonelective
contribution or nonelective contribution by taking into account: (Choose (a) or
(b))
[ ] (a) The Employee's Compensation for the entire Plan Year.
[X] (b) The Employee's Compensation for the portion of the Plan Year in which
the Employee actually is a Participant in the Plan.
ACCRUAL REQUIREMENTS. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of cash or deferred
contributions, matching contributions, designated qualified nonelective
contributions, nonelective contributions and Participant forfeitures, if any,
for the Plan Year, a Participant must satisfy the conditions described in the
following elections: (Choose (c) or at least one of (d) through (f))
[ ] (c) SAFE HARBOR RULE. If the Participant is employed by the Employer on
the last day of the Plan Year, the Participant must complete at least one
Hour of Service for that Plan Year. If the Participant is not employed
by the Employer on the last day of the Plan Year, the Participant must
complete at least 501 Hours of Service during the Plan Year.
[X] (d) HOURS OF SERVICE CONDITION. The Participant must complete the
following minimum number of Hours of Service during the Plan Year:
(Choose at least one of (1) through (5))
[X] (1) 1,000 Hours of Service.
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[ ] (2) (Specify, but the number of Hours of Service may not exceed
1,000) ____________________________.
[ ] (3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (Choose (i), (ii)
or (iii))
[ ] (i) Death.
[ ] (ii) Disability.
[ ] (iii) Attainment of Normal Retirement Age in the
current Plan Year or in a prior Plan Year.
[ ] (4) ____ Hours of Service (not exceeding 1,000) if the
Participant terminates employment with the Employer during the
Plan Year, subject to any election in Option (3).
[ ] (5) No Hour of Service requirement for an allocation of the
following contributions: _________________________________________
__________________________.
[X] (e) EMPLOYMENT CONDITION. The Participant must be employed by the
Employer on the last day of the Plan Year, irrespective of whether he
satisfies any Hours of Service condition under Option (d), with the
following exceptions: (Choose (1) or at least one of (2) through (5))
[ ] (1) No exceptions.
[X] (2) Termination of employment because of death.
[X] (3) Termination of employment because of disability.
[X] (4) Termination of employment following attainment of Normal
Retirement Age.
[ ] (5) No employment condition for the following contributions:
______________________________________________________.
[ ] (f) (Specify other conditions, if applicable): ________________________.
SUSPENSION OF ACCRUAL REQUIREMENTS. The suspension of accrual requirements of
Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
[ ] (g) Applies to the Employer's Plan.
[X] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as described in an
addendum to this Adoption Agreement, numbered Section 3.06(E).
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<PAGE> 102
SPECIAL ACCRUAL REQUIREMENTS FOR MATCHING CONTRIBUTIONS. If the Plan allocates
matching contributions on two or more allocation dates for a Plan Year, the
Advisory Committee, unless otherwise specified in Option (l), will apply any
Hours of Service condition by dividing the required Hours of Service on a
prorata basis to the allocation periods included in that Plan Year.
Furthermore, a Participant who satisfies the conditions described in this
Adoption Agreement Section 3.06 will receive an allocation of matching
contributions (and forfeitures treated as matching contributions) only if the
Participant satisfies the following additional condition(s): (Choose (j) or at
least one of (k) or (l))
[ ] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the Plan
Year. This Option (k) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) _____________
of Adoption Agreement Section 3.01.
[X] (l) (Specify) Excess matching contributions will be forfeited unless
distributed pursuant to Sections 14.08 or 14.09.
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15
apply, the Excess Amount attributed to this Plan equals: (Choose (a), (b) or
(c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date (including
any amount which the Advisory Committee would have allocated but
for the limitations of Code Section 415), times
(ii) the ratio of (1) the amount allocated to the Participant as
of such date under this Plan divided by (2) the total amount
allocated as of such date under all qualified defined
contribution plans (determined without regard to the limitations
of Code Section 415).
[X] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
APPLICATION OF LIMITATION. The limitation under Section 3.18 of the Plan:
(Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan because the Employer does not
maintain and never has maintained a defined benefit plan covering any
Participant in this Plan.
[ ] (b) Applies to the Employer's Plan. To the extent necessary to satisfy
the limitation under Section 3.18, the Employer will reduce: (Choose (1)
or (2))
[ ] (1) The Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[ ] (2) Its contribution or allocation on behalf of the Participant
to the defined contribution plan under which the Participant
participates and then, if necessary, the Participant's projected
annual benefit under the defined benefit plan under which the
Participant participates.
[Note: If the Employer selects (a), the remaining options in this Section 3.18
do not apply to the Employer's Plan.]
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<PAGE> 103
COORDINATION WITH TOP HEAVY MINIMUM ALLOCATION. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the
Plan with the following modifications: (Choose (c) or at least one of (d) or
(e))
[ ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the top heavy
minimum allocation is the minimum allocation described in Section 3.04(B)
determined by substituting ____% (not less than 4%) for "3%," except:
(Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined benefit plan,
the top heavy minimum is: (Choose (1) or (2))
[ ] (1) 5% of Compensation (as determined under Section 3.04(B) or
the Plan) irrespective of the contribution rate of any Key
Employee, except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "7 1/2%" for "5%" if the top heavy
ratio does not exceed 90%.
[ ] (2) 0%. [Note: The Employer may not select this Option (2)
unless the defined benefit plan satisfies the top heavy minimum
benefit requirements of Code Section 416 for these Non-Key
Employees.]
ACTUARIAL ASSUMPTIONS FOR TOP HEAVY CALCULATION. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and
mortality assumptions to value accrued benefits under a defined benefit plan:
_____________________________________________________________.
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code Section
416, the Employer must provide the appropriate provisions in an addendum to
this Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or
(b); (c) is available only with (b))
[X] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant to Section
14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible
contributions for the Plan Year are mandatory contributions under Option
(i)(3) of Adoption Agreement Section 3.01: (Choose (1) or (2))
[ ] (1) The amount which is not less than: ____________________
_______.
[ ] (2) The amount which is not greater than: ___________________
__________.
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ALLOCATION DATES. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (Choose (d) or (e))
[ ] (d) No other allocation dates.
[ ] (e) (Specify) _______________________________________________.
As of an allocation date, the Advisory Committee will credit all nondeductible
contributions made for the relevant allocation period. Unless otherwise
specified in (e), a nondeductible contribution relates to an allocation period
only if actually made to the Trust no later than 30 days after that allocation
period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Mandatory Contributions Account, if any, prior to his Separation
from Service: (Choose (a) or at least one of (b) through (d))
[ ] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral
Contributions Account prior to the Participant's Separation from Service,
as elected in Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election to
receive all or any portion of his Mandatory Contributions Account if:
(Choose (1) or at least one of (2) through (4))
[ ] (1) No conditions.
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[ ] (2) The mandatory contributions have accumulated for at least __
Plan Years since the Plan Year for which contributed.
[ ] (3) The Participant suspends making nondeductible contributions
for a period of ___ months.
[ ] (4) (Specify) _______________________________________________.
[ ] (d) (Specify) ______________________________________________.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose
(a) or (b))
[ ] (a) _____ [State age, but may not exceed age 65].
[X] (b) The later of the date the Participant attains 65 years of age or the
5th anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [The age selected may
not exceed age 65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section
5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c))
[ ] (a) Does not apply.
[X] (b) Applies to death.
[X] (c) Applies to disability.
5.03 VESTING SCHEDULE.
DEFERRAL CONTRIBUTIONS ACCOUNT/QUALIFIED MATCHING CONTRIBUTIONS
ACCOUNT/QUALIFIED NONELECTIVE CONTRIBUTIONS ACCOUNT/MANDATORY CONTRIBUTIONS
ACCOUNT. A Participant has a 100% Nonforfeitable interest at all times in his
Deferral Contributions Account, his Qualified Matching Contributions Account,
his Qualified Nonelective Contributions Account and in his Mandatory
Contributions Account.
REGULAR MATCHING CONTRIBUTIONS ACCOUNT/EMPLOYER CONTRIBUTIONS ACCOUNT. With
respect to a Participant's Regular Matching Contributions Account and Employer
Contributions Account, the Employer elects the following vesting schedule:
(Choose (a) or (b); (c) and (d) are available only as additional options)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The
Employer must elect Option (a) if the eligibility conditions under
Adoption Agreement Section 2.01(c) require 2 years of service or more
than 12 months of employment.]
Horizon Health Corporation 21 8/11/97
<PAGE> 106
[X] (b) Graduated Vesting Schedules.
<TABLE>
<CAPTION>
TOP HEAVY SCHEDULE NON TOP HEAVY SCHEDULE
(MANDATORY) (OPTIONAL)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
--------- -------------- --------- --------------
<S> <C> <C> <C>
Less than 1 0% Less than 1 0%
1 0% 1 0%
2 20% 2 0%
3 40% 3 20%
4 60% 4 40%
5 80% 5 60%
6 or more 100% 6 80%
7 or more 100%
</TABLE>
[X] (c) Special vesting election for Regular Matching Contributions Account.
In lieu of the election under Options (a) or (b), the Employer elects the
following vesting schedule for a Participant's Regular Matching
Contributions Account: (Choose (1) or (2))
[ ] (1) 100% Nonforfeitable at all times.
[X] (2) In accordance with the vesting schedule described in the
addendum to this Adoption Agreement, numbered 5.03(c). [Note: If
the Employer elects this Option (c)(2), the addendum must
designate the applicable vesting schedule(s) using the same
format as used in Option (b).]
[Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy
Schedule which satisfies Code Section 416. The Employer, at its option, may
complete a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy
Code Section 411(a)(2). Also see Section 7.05 of the Plan.]
[X] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (Choose (1) or (2))
[X] (1) Only in a Plan Year for which the Plan is top heavy.
[ ] (2) In the Plan Year for which the Plan first is top heavy and
then in all subsequent Plan Years. [Note: The Employer may not
elect Option (d) unless it has completed a Non Top Heavy
Schedule.]
MINIMUM VESTING. (Choose (e) or (f))
[X] (e) The Plan does not apply a minimum vesting rule.
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will never be
less than the lesser of $______ or his entire Accrued Benefit, even if
the application of a graduated vesting schedule under Options (b) or (c)
would result in a smaller Nonforfeitable Accrued Benefit.
Horizon Health Corporation 22 8/11/97
<PAGE> 107
LIFE INSURANCE INVESTMENTS. The Participant's Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (g) or
(h))
[N/A] (g) Subject to the vesting election under Options (a), (b) or (c).
Horizon Health Corporation 23 8/11/97
<PAGE> 108
[ ] (h) 100% Nonforfeitable at all times, irrespective of the vesting
election under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/ RESTORATION
OF FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section
5.04(C) of the Plan: (Choose (a) or (b))
[ ] (a) Does not apply.
[X] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
VESTING COMPUTATION PERIOD. The Plan measures a Year of Service on the basis
of the following 12 consecutive month periods: (Choose (a) or (b))
[X] (a) Plan Years.
[ ] (b) Employment Years. An Employment Year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and each
successive 12 consecutive month period measured from each anniversary of
that Employment Commencement Date.
HOURS OF SERVICE. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
[X] (c) 1,000 Hours of Service.
[ ] (d) ____ Hours of Service. [Note: The Hours of Service requirement may
not exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically
excludes the following Years of Service: (Choose (a) or at least one of (b)
through (e))
[ ] (a) None other than as specified in Section 5.08(a) of the Plan.
[X] (b) Any Year of Service before the Participant attained the age of 18.
Note: The age selected may not exceed age 18.
[ ] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[ ] (d) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This
exception applies only if the Participant is 0% vested in his Accrued
Benefit derived from Employer contributions at the time he has a Break in
Service. Furthermore, the aggregate number of Years of Service before a
Break in Service do not include any Years of Service not required to be
taken into account under this exception by reason of any prior Break in
Service.
[ ] (e) Any Year of Service earned prior to the effective date of ERISA if
the Plan would have disregarded that Year of Service on account of an
Employee's Separation from Service under a Plan provision in effect and
adopted before January 1, 1974.
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<PAGE> 109
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
CODE SECTION 411(d)(6) PROTECTED BENEFITS. The elections under this Article VI
may not eliminate Code Section 411(d)(6) protected benefits. To the extent the
elections would eliminate a Code Section 411(d)(6) protected benefit, see
Section 13.02 of the Plan. Furthermore, if the elections liberalize the
optional forms of benefit under the Plan, the more liberal options apply on the
later of the adoption date or the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
DISTRIBUTION DATE. A distribution date under the Plan means any day of the
Plan Year. [Note: The Employer must specify the appropriate date(s). The
specified distribution dates primarily establish annuity starting dates and the
notice and consent periods prescribed by the Plan. The Plan allows the Trustee
an administratively practicable period of time to make the actual distribution
relating to a particular distribution date.]
NONFORFEITABLE ACCRUED BENEFIT NOT EXCEEDING $3,500. Subject to the
limitations of Section 6.01(A)(1), the distribution date for distribution of a
Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b), (c),
(d) or (e))
[ ] (a) _____________________________________________ of the ______________
_______________ Plan Year beginning after the Participant's Separation
from Service.
[X] (b) as soon as administratively feasible following the Participant's
Separation from Service.
[ ] (c) _____________________________________________ of the Plan Year after
the Participant incurs ____ Break(s) in Service (as defined in Article V).
[ ] (d) ________________________________________________________ following
the Participant's attainment of Normal Retirement Age, but not earlier
than _____________________ days following his Separation from Service.
[ ] (e) (Specify) ______________________________________________________.
NONFORFEITABLE ACCRUED BENEFIT EXCEEDS $3,500. See the elections under Section
6.03.
DISABILITY. The distribution date, subject to Section 6.01(A)(3), is: (Choose
(f), (g) or (h))
[ ] (f) _____________________________________________ after the Participant
terminates employment because of disability.
[X] (g) The same as if the Participant had terminated employment without
disability.
[ ] (h) (Specify) _____________________________________________________.
HARDSHIP. (Choose (i) or (j))
[X] (i) The Plan does not permit a hardship distribution to a Participant who
has separated from Service.
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<PAGE> 110
[ ] (j) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution
policy stated in: (Choose (1), (2) or (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
[ ] (3) The addendum to this Adoption Agreement, numbered Section
6.01.
DEFAULT ON A LOAN. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to Section
9.04, the Plan: (Choose (k), (l) or (m))
[N/A] (k) Treats the default as a distributable event. The Trustee, at
the time of the default, will reduce the Participant's Nonforfeitable
Accrued Benefit by the lesser of the amount in default (plus accrued
interest) or the Plan's security interest in that Nonforfeitable
Accrued Benefit. To the extent the loan is attributable to the
Participant's Deferral Contributions Account, Qualified Matching
Contributions Account or Qualified Nonelective Contributions Account,
the Trustee will not reduce the Participant's Nonforfeitable Accrued
Benefit unless the Participant has separated from Service or unless
the Participant has attained age 59 1/2.
[ ] (l) Does not treat the default as a distributable event. When an
otherwise distributable event first occurs pursuant to Section 6.01
or Section 6.03 of the Plan, the Trustee will reduce the
Participant's Nonforfeitable Accrued Benefit by the lesser of the
amount in default (plus accrued interest) or the Plan's security
interest in that Nonforfeitable Accrued Benefit.
[ ] (m) (Specify) _________________________________________________.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will
apply Section 6.02 of the Plan with the following modifications: (Choose (a) or
at least one of (b), (c), (d) and (e))
[ ] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available:_______________________________.
[X] (c) An installment distribution: (Choose (1) or at least one of (2) or
(3))
[X] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of _________ years or the maximum
period permitted under Section 6.02.
[ ] (3) (Specify) _____________________________________________.
[ ] (d) The Plan permits the following annuity options: _____________________
_________________________________________________________________.
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [Note: The Employer may specify additional annuity
options in an addendum to this Adoption Agreement, numbered 6.02(d).]
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<PAGE> 111
[ ] (e) If the Plan invests in qualifying Employer securities, as described
in Section 10.03(F), a Participant eligible to elect distribution under
Section 6.03 may elect to receive that distribution in Employer
securities only in accordance with the provisions of the addendum to this
Adoption Agreement, numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
PARTICIPANT ELECTIONS AFTER SEPARATION FROM SERVICE. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may
elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose
at least one of (a) through (c))
[ ] (a) As of any distribution date, but not earlier than
___________________________________ of the ______________ Plan Year
beginning after the Participant's Separation from Service.
[X] (b) As of the following date(s): (Choose at least one of Options (1)
through (6))
[ ] (1) Any distribution date after the close of the Plan Year in
which the Participant attains Normal Retirement Age.
[X] (2) Any distribution date following his Separation from Service
with the Employer.
[ ] (3) Any distribution date in the ________________ Plan Year(s)
beginning after his Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the Participant
incurs ________________ Break(s) in Service (as defined in
Article V).
[ ] (5) Any distribution date following attainment of age _________
and completion of at least ____ Years of Service (as defined in
Article V).
[ ] (6) (Specify) _____________________________________________.
[ ] (c) (Specify) ___________________________________________________________
_____________________.
The distribution events described in the election(s) made under Options
(a), (b) or (c) apply equally to all Accounts maintained for the Participant
unless otherwise specified in Option (c).
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - REGULAR MATCHING
CONTRIBUTIONS ACCOUNT AND EMPLOYER CONTRIBUTIONS ACCOUNT. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer Contributions
Account prior to his Separation from Service: (Choose (d) or at least one of
(e) through (h))
[X] (d) No distribution options prior to Separation from Service.
[ ] (e) Attainment of Specified Age. Until he retires, the Participant has a
continuing election to receive all or any portion of his Nonforfeitable
interest in these Accounts after he attains: (Choose (1) or (2))
[ ] (1) Normal Retirement Age.
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<PAGE> 112
[ ] (2) ______ years of age and is at least ______% vested in these
Accounts. [Note: If the percentage is less than 100%, see the
special vesting formula in Section 5.03.]
[ ] (f) After a Participant has participated in the Plan for a period of not
less than ______ years and he is 100% vested in these Accounts, until he
retires, the Participant has a continuing election to receive all or any
portion of the Accounts. [Note: The number in the blank space may not be
less than 5.]
[ ] (g) Hardship. A Participant may elect a hardship distribution prior to
his Separation from Service in accordance with the hardship distribution
policy: (Choose (1), (2) or (3); (4) is available only as an additional
option)
[ ] (1) Under Section 6.01(A)(4) of the Plan.
[ ] (2) Under Section 14.11 of the Plan.
[ ] (3) Provided in the addendum to this Adoption Agreement,
numbered Section 6.03.
[ ] (4) In no event may a Participant receive a hardship
distribution before he is at least ______% vested in these
Accounts. [Note: If the percentage in the blank is less than
100%, see the special vesting formula in Section 5.03.]
[ ] (h) (Specify)
__________________________________________________________________________
___________________________ __________________________.
[Note: The Employer may use an addendum, numbered 6.03, to provide additional
language authorized by Options (b)(6), (c), (g)(3) or (h) of this Adoption
Agreement Section 6.03.]
PARTICIPANT ELECTIONS PRIOR TO SEPARATION FROM SERVICE - DEFERRAL CONTRIBUTIONS
ACCOUNT, QUALIFIED MATCHING CONTRIBUTIONS ACCOUNT AND QUALIFIED NONELECTIVE
CONTRIBUTIONS ACCOUNT. Subject to the restrictions of Article VI, the
following distribution options apply to a Participant's Deferral Contributions
Account, Qualified Matching Contributions Account and Qualified Nonelective
Contributions Account prior to his Separation from Service: (Choose (i) or at
least one of (j) through (l))
[X] (i) No distribution options prior to Separation from Service.
[ ] (j) Until he retires, the Participant has a continuing election to
receive all or any portion of these Accounts after he attains: (Choose
(1) or (2))
[ ] (1) The later of Normal Retirement Age or age 59 1/2.
[ ] (2) Age ______ (at least 59 1/2).
[ ] (k) Hardship. A Participant, prior to this Separation from Service, may
elect a hardship distribution from his Deferral Contributions Account in
accordance with the hardship distribution policy under Section 14.11 of
the Plan.
[ ] (l) (Specify) _____________________________________________________.
[Note: Option (l) may not permit in service distributions prior to age
59 1/2 (other than hardship) and may not modify the hardship policy
described in Section 14.11.]
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<PAGE> 113
SALE OF TRADE OR BUSINESS/SUBSIDIARY. If the Employer sells substantially all
of the assets (within the meaning of Code Section 409(d)(2)) used in a trade or
business or sells a subsidiary (within the meaning of Code Section 409(d)(3)),
a Participant who continues employment with the acquiring corporation is
eligible for distribution from his Deferral Contributions Account, Qualified
Matching Contributions Account and Qualified Nonelective Contributions Account:
(Choose (m) or (n))
[X] (m) Only as described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
[ ] (n) As if he has a Separation from Service. After March 31, 1988, a
distribution authorized solely by reason of this Option (n) must
constitute a lump sum distribution, determined in a manner consistent
with Code Section 401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The
annuity distribution requirements of Section 6.04: (Choose (a) or (b))
[X] (a) Apply only to a Participant described in Section 6.04(E) of the Plan
(relating to the profit sharing exception to the joint and survivor
requirements).
[ ] (b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than
a distribution from a segregated Account and other than a corrective
distribution described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan)
occurs more than 90 days after the most recent valuation date, the distribution
will include interest at: (Choose (a), (b) or (c))
[X] (a) 0% per annum. [Note: The percentage may equal 0%.]
[ ] (b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
[ ] (c) (Specify) ______________________________________________.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. Pursuant to
Section 14.12, to determine the allocation of net income, gain or loss:
(Complete only those items, if any, which are applicable to the Employer's
Plan)
[X] (a) For salary reduction contributions, the Advisory Committee will:
(Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section
14.12.
[ ] (3) Use the weighted average method described in Section
14.12, based on a ____________________ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of
the valuation period ______% of the salary reduction
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
________________________________________________________.
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<PAGE> 114
[X] (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(a).
[X] (b) For matching contributions, the Advisory Committee will: (Choose (1),
(2), (3) or (4))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the weighted average method described in Section
14.12, based on a ____________________ weighting period.
[ ] (3) Treat as part of the relevant Account at the beginning of
the valuation period ______% of the matching contributions
allocated during the valuation period.
[X] (4) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(b).
[ ] (c) For Participant nondeductible contributions, the Advisory Committee
will: (Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section
14.12.
[ ] (3) Use the weighted average method described in Section
14.12, based on a ____________________ weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of
the valuation period ______% of the Participant nondeductible
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
______________________________________________________ .
[ ] (5) Apply the allocation method described in the addendum to
this Adoption Agreement numbered 9.11(c).
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan, the
aggregate investments in qualifying Employer securities and in qualifying
Employer real property: (Choose (a) or (b))
[ ] (a) May not exceed 10% of Plan assets.
[X] (b) May not exceed 100% of Plan assets. [Note: The percentage may not
exceed 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee
must value the Trust Fund on the following valuation date(s): (Choose (a) or
(b))
[ ] (a) No other mandatory valuation dates.
[X] (b) (Specify) Any day of the plan year upon which assets can be purchased
or sold, commonly referred to as "Daily" accounting.
Horizon Health Corporation 30 8/11/97
<PAGE> 115
EFFECTIVE DATE ADDENDUM
(RESTATED PLANS ONLY)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the
restated effective date for at least one of the provisions listed in this
addendum. In lieu of the restated Effective Date in Adoption Agreement Section
1.18, the following special effective dates apply: (Choose whichever elections
apply)
[ ] (a) COMPENSATION DEFINITION. The Compensation definition of Section 1.12
(other than the $200,000 limitation) is effective for Plan Years
beginning after ____________________. [Note: May not be effective later
than the first day of the first Plan Year beginning after the Employer
executes this Adoption Agreement to restate the Plan for the Tax Reform
Act of 1986, if applicable.]
[ ] (b) ELIGIBILITY CONDITIONS. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after ____________________.
[ ] (c) SUSPENSION OF YEARS OF SERVICE. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for Plan
Years beginning after ____________________.
[ ] (d) CONTRIBUTION/ALLOCATION FORMULA. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation
elected under Adoption Agreement Section 3.04 is effective for Plan Years
beginning after ___________________.
[ ] (e) ACCRUAL REQUIREMENTS. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after __ _________________.
[ ] (f) EMPLOYMENT CONDITION. The employment condition of Section 3.06 is
effective for Plan Years beginning after ___ ________________.
[ ] (g) ELIMINATION OF NET PROFITS. The requirement for the Employer not to
have net profits to contribute to this Plan is effective for Plan Years
beginning after ____________________. [Note: The date specified may not
be earlier than December 31, 1985.]
[ ] (h) VESTING SCHEDULE. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
____________________.
[ ] (i) ALLOCATION OF EARNINGS. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after ____________________.
[X] (j) (Specify) (1) VALUATION OF TRUST. The valuation provisions elected
under Adoption Agreement Section 10.14 are effective on the date assets
are transferred to the AVESTA system. ______(2) ALLOCATION OF EARNINGS.
The special allocation provisions elected under Adoption Agreement
Section 9.11 are effective the date assets are transferred to the AVESTA
system.
For Plan Years prior to the special Effective Date, the terms of the Plan
prior to its restatement under this Adoption Agreement will control for
purposes of the designated provisions. A special Effective Date may not result
in the delay of a Plan provision beyond the permissible Effective Date under
any applicable law requirements.
Horizon Health Corporation 31 8/11/97
<PAGE> 116
EXECUTION PAGE
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Master Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee
(and Custodian, if applicable) signified its acceptance, on this 17th day of
July, 1996.
Name and EIN of Employer: Horizon Mental Health Management, Inc. 75-2293354
-------------------------------------------------
Signed: /s/ James W. McAtee
-------------------
Name(s) of Trustee: Texas Commerce Bank National Association
----------------------------------------
Signed: /s/ James T. Allen
-------------------------------------------------------------------
-------------------------------------------------------------------
Name of Custodian:
--------------------------------------------------------
Signed: /s/ James W. McAtee
-----------------------------------------------------------------
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03
of the Plan.]
PLAN NUMBER. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 001.
USE OF ADOPTION AGREEMENT. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
3-digit number assigned to this Adoption Agreement (see page 1) is solely for
the Master Plan Sponsor's recordkeeping purposes and does not necessarily
correspond to the plan number the Employer designated in the prior paragraph.
MASTER PLAN SPONSOR. The Master Plan Sponsor identified on the first page of
the basic plan document will notify all adopting employers of any amendment of
this Master Plan or of any abandonment or discontinuance by the Master Plan
Sponsor of its maintenance of this Master Plan. For inquiries regarding the
adoption of the Master Plan, the Master Plan Sponsor's intended meaning of any
plan provisions or the effect of the opinion letter issued to the Master Plan
Sponsor, please contact the Master Plan Sponsor at the following
address and telephone number: P.O. Box 2558, AVE$TA Division, Houston, Texas
77252-8342 (713) 750-7906.
RELIANCE ON OPINION LETTER. The Employer may not rely on the Master Plan
Sponsor's opinion letter covering this Adoption Agreement. For reliance on the
Plan's qualification, the Employer must obtain a determination letter from the
applicable IRS Key District office.
Horizon Health Corporation 32 8/11/97
<PAGE> 117
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Plan identified in Section 1.03 of
the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by Horizon Mental Health Management, Inc., the Signatory Employer
to the Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: July 1, 1996.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as Horizon Mental Health
Management Employees Savings and Profit Sharing Plan, and having an
original effective date of October 1, 1990.
Dated this 17th day of July, 1996.
Name of Participating Employer: HHG Colorado, Inc.
(Mountain Crest Hospital)
-------------------------
Signed: /c/ James W. McAtee
---------------------------------
Employer's EIN: 84-1155351
----------
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE ADOPTION
AGREEMENT AND BY THE TRUSTEE.
Name of Signatory Employer: Horizon Mental Health
Management, Inc.
----------------
Accepted:
--------------
[Date] Signed: /c/ James W. McAtee
------------------------------------------
Name(s) of Trustee: Texas Commerce Bank National
Association
------------------------------
Accepted: July 17, 1996
--------------
[Date] Signed: /s/ James T. Allen
------------------------------------------
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Master Plan information.]
Horizon Health Corporation 33 8/11/97
<PAGE> 118
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Plan identified in Section 1.03 of
the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by Horizon Mental Health Management, Inc., the Signatory Employer
to the Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: July 1, 1996.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as Horizon Mental Health
Management Employees Savings and Profit Sharing Plan, and having an
original effective date of October 1, 1990.
Dated this 17th day of July, 1996.
<TABLE>
<S> <C>
Name of Participating Employer: Horizon Mental Health Management, Inc. (Formerly
Horizon Mental Health Svcs.).
----------------------------
Signed: /s/ James W. McAtee
----------------------------------------------
Participating Employer's EIN: 36-3709746
----------
</TABLE>
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE ADOPTION
AGREEMENT AND BY THE TRUSTEE.
<TABLE>
<S> <C>
Name of Signatory Employer: Horizon Mental Health Management, Inc.
--------------------------------------
Accepted:
--------------
[Date] Signed: /s/ James W. McAtee
---------------------------------------------------------
Name(s) of Trustee: Texas Commerce Bank National Association
---------------------------------------------
Accepted: 7-17-96
--------------- Signed: /s/ James T. Allen
[Date] ---------------------------------------------------------
</TABLE>
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Master Plan information.]
Horizon Health Corporation 34 8/11/97
<PAGE> 119
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Plan identified in Section 1.03 of
the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by Horizon Mental Health Management, Inc., the Signatory Employer
to the Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: July 1, 1996.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as Horizon Mental Health
Management Employees Savings and Profit Sharing Plan, and having an
original effective date of October 1, 1990.
Dated this 17th day of July, 1996.
<TABLE>
<S> <C>
Name of Participating Employer: Mental Health Outcomes, Inc.
----------------------------
Signed: /s/ James W. McAtee
----------------------------------------------
Participating Employer's EIN: 75-2614919
----------
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE ADOPTION AGREEMENT AND BY THE TRUSTEE.
Name of Signatory Employer: Horizon Mental Health Management, Inc.
--------------------------------------
Accepted:
-------------
[Date] Signed: /s/ James W. McAtee
----------------------------------------------
Name(s) of Trustee: Texas Commerce Bank National Association
----------------------------------------
Accepted: 7-17-96
--------------- Signed: /s/ James T. Allen
[Date] -------------------------------------------
</TABLE>
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Master Plan information.]
Horizon Health Corporation 35 8/11/97
<PAGE> 120
PARTICIPATION AGREEMENT
FOR PARTICIPATION BY RELATED GROUP MEMBERS (PLAN SECTION 1.30)
The undersigned Employer, by executing this Participation Agreement, elects
to become a Participating Employer in the Plan identified in Section 1.03 of
the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Agreement. The Participating Employer accepts, and agrees to
be bound by, all of the elections granted under the provisions of the Master
Plan as made by Horizon Health Corporation, Inc., the Signatory Employer to the
Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's participation in the
designated Plan is: August 11, 1997.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Employer, identified as Horizon Health Corporation
Employees Savings and Profit Sharing Plan, and having an original
effective date of October 1, 1990.
Dated this 11th day of August, 1997.
<TABLE>
<S> <C>
Name of Participating Employer: Specialty Healthcare Management, Inc.
-------------------------------------
Signed: /s/ Larry Reiff
----------------------------------------------
Participating Employer's EIN: 84-1285635
----------
ACCEPTANCE BY THE SIGNATORY EMPLOYER TO THE EXECUTION PAGE OF THE ADOPTION AGREEMENT AND BY THE TRUSTEE.
Name of Signatory Employer: Horizon Health Corporation
--------------------------
Accepted: 8/11/97
--------------
[Date] Signed: /s/ James W. McAtee
----------------------------------------------
Name(s) of Trustee: Texas Commerce Bank National Association
----------------------------------------
Accepted: 8/05/97
---------------- Signed: /s/ Alice Wilcox
[Date] -------------------------------------------
</TABLE>
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Master Plan information.]
Horizon Health Corporation 36 8/11/97
<PAGE> 121
ADDENDUM 5.03(A)
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
In lieu of the special vesting formula used in Section 5.03(A), to determine
the Participant's Nonforfeitable Accrued Benefit derived from Employer
contributions, the Advisory Committee will use the following formula:
P(AB+D)-D.
To apply this formula, "P" is the Participant's current vesting percentage at
the relevant time, "AB" is the Participant's Employer-derived Accrued Benefit
at the relevant time and "D" is the amount of the earlier distribution.
Horizon Health Corporation 37 8/11/97
<PAGE> 122
ADDENDUM 5.03(c)
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
A Participant in the Specialty Healthcare Management 401(k) Plan on or before
August 11, 1997, shall have the nonforfeitable percentage in their accrued
benefit derived from Employer Matching Contributions, Nonelective Contributions
and forfeitures determined in accordance with the following schedule:
[X] (b) Graduated Vesting Schedules.
<TABLE>
<CAPTION>
TOP HEAVY SCHEDULE NON TOP HEAVY SCHEDULE
(MANDATORY) (OPTIONAL)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
--------- -------------- --------- --------------
<S> <C> <C>
Less than 1 0% Less than 1 ---
1 0% 1 ---
2 25% 2 ---
3 50% 3 ---
4 75% 4 ---
5 or more 100% 5 ---
6 ---
7 or more ---
</TABLE>
An Employee of Specialty Healthcare Management, Inc. who has not become
eligible to participate in the Specialty Healthcare Management 401(k) Plan as
of August 11, 1997, shall have their nonforfeitable percentage in their accrued
benefits derived from Employer Matching Contributions, Nonelective
Contributions and forfeitures determined in accordance with the vesting
schedule described in Section 5.03(b) of this Adoption Agreement #011.
A Participant in the Specialty Healthcare Management 401(k) Plan on or before
August 11, 1997, shall receive credit, as of August 11, 1997, for a number of
Years of Service equal to the number of 1-year periods of service credited to
the Participant as of August 11, 1997, under the Specialty Healthcare
Management 401(k) Plan, including 1-year periods of service prior to the
Participant's attainment of age 18.
For the period from January 1, 1997, through August 11, 1997, a Participant in
the specialty Healthcare Management 401(k) Plan on or before August 11, 1997,
shall receive credit for the number of Hours of Service determined by applying
the semi-monthly equivalency method of crediting Hours of Service specified in
Section 1.05 of the Basic Plan Document to any fractional part of a year
credited to the Participant as of August 11, 1997.
Effective August 11, 1997, service for the purposes of determining the
nonforfeitable percentage of Employer Matching Contributions, Nonelective
Contributions and forfeitures of Participants of Specialty Healthcare
Management 401(k) Plan shall be determined using the Hours of Service method of
crediting service, based on actual Hours of Service pursuant to the options
selected in Sections 1.27, and 5.06 of this Adoption Agreement #011.
Horizon Health Corporation 38 8/11/97
<PAGE> 123
ADDENDUM 6.02(e)
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
ADDITIONAL PROVISIONS CONCERNING QUALIFYING EMPLOYER SECURITIES
The following additional provisions concerning qualifying employer securities
are included as part of the Adoption Agreement completed by Horizon Health
Corporation ("Employer"), in accordance with Section 6.02(e) of the Adoption
Agreement:
(1) PROVISION FOR INVESTMENT IN HORIZON HEALTH CORPORATION COMMON STOCK.
The investment options in Section 10.03[F] of the Plan include the
ability to invest in "qualifying employer securities", as defined in
section 407(d)(5) of ERISA, which specifically includes shares
("SHARES") of common stock, $.01 par value per share, of Horizon
Health Corporation, a Delaware corporation ("HORIZON HEALTH
CORPORATION COMMON STOCK"). Texas Commerce Bank National Association
("Trustee") is expressly authorized to invest so much of the Trust
Fund (up to 100% thereof as provided in Section 10.03 of the Adoption
Agreement) in Horizon Health Corporation Common Stock as is necessary
to invest Participant Account balances in Horizon Health Corporation
Common Stock in accordance with the directions of the Participants
under Section 10.03[B] of the Plan; subject to the restrictions on
investment in Horizon Health Corporation Common Stock set forth in
paragraph (9).
(2) DIVIDENDS AND INCOME. All cash dividends, stock dividends, and stock
splits received by the Trustee with respect to Horizon Health
Corporation Common Stock shall be credited to Participant accounts in
accordance with Section 9.11 of the Plan. All cash dividends will be
used to purchase shares of Horizon Health Corporation Common Stock.
(3) PURCHASES AND SALES OF COMMON STOCK. Except as provided below with
respect to matching purchase and sale orders to acquire or dispose of
Horizon Health Corporation Common Stock, or as otherwise mutually
agreed upon in writing by the Employer and the Trustee, all purchases
and sales of Horizon Health Corporation Common Stock shall be made on
the open market in accordance with the following rules:
(a) The Trustee shall execute purchase and sale orders to acquire
or dispose of Horizon Health Corporation Common Stock pursuant
to Participant direction for or from Participant Accounts as
soon as administratively feasible following the receipt of
such Participant directions by the Trustee, and shall do so in
accordance with any legal restrictions on the Plan's trading
activity and in as similar a manner as is administratively
feasible for similarly situated Participants. Where, on
account of legal trading or broker restrictions, investment
directions received from two or more Participants are executed
as part of a grouping of orders, some or all of which are
executed at different prices, the Trustee shall determine, in
its sole discretion (but, insofar as reasonably possible,
treating all similarly situated Participants in as similar a
manner as is administratively feasible) the average price at
which shares in the group were purchased or sold net of any
brokerage commissions, dealer spreads, transfer fees, and/or
similar charges actually incurred in executing the purchases
and/or sales.
(b) Where, on account of receiving directions that are
simultaneous or in close time proximity from different
Participants, on account of an intra-asset transfer, or on
account of any other transaction or series of transactions for
which the Trustee determines that the matching of transactions
is appropriate, the Trustee may, in its discretion, match some
or all such orders and make only any resulting net purchase or
sale on the open market. The price assigned to such matched
transaction (or the average price assigned to the action as
provided in subparagraph (a) above, if subparagraph (a) is
applicable) shall be the price paid or obtained for the
acquisition or disposition of Shares of Horizon Health
Corporation Common Stock in the most recent open market trade
made by the Plan in such Shares, if a trade was made in such
Shares that day, or, if no trade was made in such Shares that
day, the closing price paid or obtained for such Shares on the
most recent business day that such Shares were last traded.
The Trustee shall take any action that it deems to be
necessary or appropriate to ensure that there is payment of no
more, or receipt of no less, than "adequate consideration" (as
that
39
Horizon Health Corporation 10/01/97
<PAGE> 124
term is defined in Section 3(18) of ERISA) in the case of the
purchase or sale of Horizon Health Corporation Common Stock by
the Plan.
(c) Any brokerage commissions, dealer spreads, transfer fees
and/or other similar expenses actually incurred in executing
purchases or sales of Horizon Health Corporation Common Stock
by the Trustee shall be equitably allocated among the Shares
purchased and sold (including, without limitation, Shares
which are netted) in the manner determined by the Trustee as
most likely to cause the Accounts of Participants who are
similarly situated with respect to acquisitions or
dispositions of Horizon Health Corporation Common Stock for or
from their Accounts to bear similar trading costs.
(d) Plan level Purchases shall be made only in whole Shares.
Participant accounts shall be invested in whole and fractional
shares. Any cash allocated to a Participant's Horizon Health
Corporation Common Stock Account which is not so invested,
shall be invested in a money market fund within a reasonable
time of its receipt.
(e) It shall be the responsibility of the Employer to insure that
the Plan is registered under the Federal Securities Act of
1933, and no purchase of Shares will be made if the Trustee
knows such registration is not in effect.
(4) VOTING AND TENDER OF SHARES. The right to vote ("Voting Rights") and
the right to tender ("Tender Rights") Shares allocated to a
Participant's Account(s) shall be passed through to such Participants.
The Company may appoint an agent, (hereinafter "Designated Agent") who
shall be responsible for soliciting and tabulating proxies and tenders
from Plan Participants or, in the absence of any such appointment, the
Trustee shall perform such functions (future references shall, for
convenience, assume a Designated Agent has been appointed). The
Trustee shall provide Participant data required for such solicitation
via magnetic media to the Designated Agent, to the extent the
Participant account records contain the information required. Such
information includes, but is not limited to: Participant name,
Participant social security number, number of Horizon Health
Corporation Common Stock shares held on the record date, and
Participant mailing address. The Employer will provide the same
information and materials to the Designated Agent (and to the Trustee
for its records) for distribution to Plan Participants as is provided
to other holders of Horizon Health Corporation Common Stock, and the
Designated Agent shall certify to the Trustee that all such materials
have been mailed or otherwise sent to all Participants. The results of
the Participant's exercise of his Voting Rights or his Tender Rights
will be provided by the Designated Agent to the Trustee in time for
the Trustee to vote or tender (as the case may be) the shares in
accordance with Participants' instructions.
In the absence of the exercise of his Voting Rights or his Tender
Rights shares held in a Participant Account shall not be voted or
tendered (as the case may be) by the Trustee. Shares held in the Trust
other than in Participant's Account(s) shall not be voted or tendered
by the Trustee except at the specific written direction of the
Employer.
Participant voting instructions may be transmitted in any reasonable
form agreed upon by the Trustee and the Designated Agent.
(5) The Trustee and the Designated Agent shall act with respect to all
matters relating to the exercise of Voting Rights and Tender Rights in
such a way as to reasonably insure that there is no disclosure to the
Employer or a related party of a Participant's vote, or of acceptance
of a tender offer. Notwithstanding the foregoing, unless otherwise
advised in writing by the representative of the Employer responsible
for working with the Trustee and Designated Agent to maintain
confidentiality, the Trustee may furnish the Employer with information
relating to the overall purchase, sale, voting, tender or similar
matters relating to all of the Shares held by the Trustee so long as
such information does not identify, and cannot be reasonably
anticipated as identifying, the actions of any specific Participant
with respect to such Shares.
Without limiting the generality of the foregoing, the Designated Agent
shall establish procedures for the exercise of Tender Rights which
will ensure that a Participant who has directed any Designated Agent
to tender or withhold from tender any or all of the shares may, at any
time prior to the tender offer withdrawal deadline, instruct the
Designated Agent to withdraw or tender, and the Designated Agent shall
withdraw or
40
Horizon Health Corporation 10/01/97
<PAGE> 125
tender such shares prior to the tender offer tender or withdrawal
deadline. A Participant shall not be limited as to the number of
instructions to tender or withdraw that the Participant may give to
the Designated Agent.
Anything to the contrary notwithstanding, (i) information relating to
the purchase, holding and sale of securities, and the exercise of
voting, tender and similar rights with respect to such securities by
Participants and beneficiaries, shall be maintained in accordance with
procedures which are designed to safeguard the confidentiality of such
information, except to the extent necessary to comply with Federal
laws or state laws not preempted by ERISA; (ii) the Administrative
Committee shall be responsible as a fiduciary for insuring that (a)
the procedures required under clause (i) of this sentence are
sufficient to safeguard the confidentiality of the information
described therein, (b) such procedures are being followed, and (c) the
independent fiduciary required by clause (iii) of this sentence is
appointed; and (iii) the Administrative Committee shall appoint the
Trustee or other independent fiduciary to carry out activities
relating to any situation or situations which the Administrative
Committee determines involve a potential for undue employer influence
upon Participants and beneficiaries with respect to direct or indirect
exercise of shareholder rights. For purposes of this provision, a
fiduciary is not independent if the fiduciary is affiliated with any
sponsor of the Plan.
(6) DISTRIBUTION OF ACCRUED BENEFITS. The portion of a Participant's
Accrued Benefit payable under Article VI (other than a Hardship
Withdrawal, which shall always be distributed in cash) shall, to the
extent of the Participant's account investment in Horizon Health
Corporation Common Stock, be distributed entirely in cash or entirely
by delivery of shares as directed by the Participant. In the event the
Participant directs a distribution in cash, the Trustee shall sell the
Shares allocated to his Account as near as reasonably possible (as
determined under a uniform procedure designed to treat Participants
similarly situated in a similar manner) to the date of distribution.
(7) ACCOUNT REALIGNMENT. Participants may request realignment of their
Account investments at any time, subject to the restrictions on
investment in Horizon Health Corporation Common Stock set forth in
paragraph (9) below.
(8) PARTIAL ACCOUNT LIQUIDATION. All in-service account liquidations, for
such events as withdrawals, fee payments, or participant loans, shall
be prorata, across all funds in the source or sources liquidated
including, without limitation, the Horizon Health Corporation Common
Stock Account.
(9) RESTRICTION ON PARTICIPANT ACCOUNT INVESTMENT IN HORIZON HEALTH
CORPORATION COMMON STOCK. The percentage of a Participant's
contributions or account balance, in the case of an account
realignment, that a Participant may direct to be invested in Horizon
Health Corporation Common Stock shall not exceed thirty percent (30%).
The percentage of a Participant Account directed to be invested in
Horizon Health Corporation Common Stock upon account realignment shall
be calculated based upon the closing asset prices for the most recent
trading day prior to the date of the Participant realignment order
entry. Neither the Trustee, the Advisory Committee, nor the Employer
shall be liable to a Participant for lost profits or income as a
result of a failure to execute an instruction from the Participant
that is contrary to the 30% stock limitation. The Trustee is under no
obligation, legal or otherwise, to notify any Participant of a voided
transaction resulting from a Participant direction which is contrary
to the 30% stock limitation. Such limitation percentage shall be
effective only at the time the transaction purchase is entered into by
the Participant. No subsequent adjustments to Participant accounts
shall be executed for the purpose of adjusting account percentages due
to fluctuations in the Market value of plan assets.
41
Horizon Health Corporation 10/01/97
<PAGE> 126
ADDENDUM 9.11
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
Sections 9.11 (a)(5) and (b)(4) apply with the following modifications:
Participants shall not be entitled to share in any earnings allocated after
payment of the entire vested balance except to the extent the funds were
advanced from the Participant's account at the time of payment.
Contributions received in an account subsequent to the distribution of the
total vested balance shall be entitled to earnings until the vested balance is
distributed.
Any Salary Reduction Contributions, Matching Contributions, Qualified
Nonelective Contributions, forfeitures and earnings which are unallocated as of
the date immediately prior to the effective date of a merger of Plan assets
shall be allocated as of the effective date of such merger only to the accounts
of those Participants eligible to participate in the Plan immediately prior to
the effective date of the merger
Horizon Health Corporation 42 8/11/97
<PAGE> 127
ADDENDUM 10.03 [B]
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
Funds held in the AVESTA Trust may be made available to Participants for
Direction of Investments. Initially the funds available for investment will
be:
Fidelity Retirement Government Money Market Portfolios Fund
Fidelity Managed Income Fund
Franklin Custodian Funds-Income Series
Fidelity Equity Income Fund
Fidelity Magellan Fund
Franklin Balance Sheet Investment Fund
Templeton Foreign Fund
Federated Max Capital 500 Fund
The Plan Administrator may designate additional funds, including AVESTA Trust
Funds, or discontinue any such funds by delivery of written instruction to the
Trustee.
Any account balances held by the Trust which have not been directed by the
Participant will be invested in the Fidelity Retirement Government Money Market
Portfolios Fund.
Horizon Health Corporation 43 8/11/97
<PAGE> 128
ADDENDUM 13.02
ADOPTION AGREEMENT #011
NONSTANDARDIZED CODE SECTION 401(k) PROFIT SHARING PLAN
Schedule of early retirement options or other optional forms of benefit
pursuant to Section 13.02 of the Basic Plan Document.
For Participants in the Specialty Healthcare Management 401(k) Plan on August
10, 1997, the following Normal Retirement Age shall apply:
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is: (Choose
(a) or (b))
[X] (a) 59 1/2 [State age, but may not exceed age 65].
[ ] (b) The later of the date the Participant attains __ years of age or the
__ anniversary of the first day of the Plan Year in which the Participant
commenced participation in the Plan. [The age selected may not exceed
age 65 and the anniversary selected may not exceed the 5th.]
The Normal Retirement Age for Employees of Specialty Healthcare Management,
Inc., who have not met the requirements for eligibility to participate in the
Specialty Healthcare Management 401(k) Plan as of August 11, 1997, shall be the
Normal Retirement Age specified in Section 5.01 of this Adoption Agreement
#011.
Horizon Health Corporation 44 8/11/97
<PAGE> 1
EXHIBIT 4.4
HORIZON HEALTH CORPORATION
EMPLOYEES SAVINGS AND PROFIT SHARING PLAN,
AS AMENDED AND RESTATED EFFECTIVE JULY 1, 1996
___________________
AMENDMENT THREE
___________________
Recitals
A. Horizon Health Corporation (the "Corporation"), a corporation duly
organized and existing under the laws of the State of Delaware,
amended and completely restated the Horizon Health Employees Savings
and Profit Sharing Plan (the "Plan"), effective July 1, 1996, pursuant
to the terms and conditions of the Texas Commerce Bank National
Association Defined Contribution Master Plan and Trust Agreement
(basic plan document #03) (the "Master Plan and Trust") and the
Adoption Agreement #011 Nonstandardized Code Section 401(k) Profit
Sharing Plan (the "Adoption Agreement") which was executed by James W.
McAtee on behalf of the Corporation on July 16, 1996; and
B. The name of the Plan was subsequently changed to Horizon Health
Corporation Employees Savings and Profit Sharing Plan (as amended, the
"Plan"); and
C. Subsequent to the restatement of the Plan which was effective July 1,
1996, the Corporation has further amended the Plan by the adoption of
Amendments One and Two thereof; and
D. The Corporation desires to further amend the Plan for the purpose of
enabling participants in the Plan to invest amounts in their accounts
in shares of the Corporation's common stock.
E. Pursuant to Section 13.02 of the Master Plan and Trust, the
Corporation has the right and power to amend the Restated Plan as
permitted pursuant to said Section 13.02.
Amendments
The Corporation hereby further amends the Plan as set forth below,
effective as of the date specified below:
1. The Adoption Agreement is amended to add thereto new Addendum
6.02(e) in the form attached hereto.
2. The Adoption Agreement is amended by deleting existing
Addendum 10.03[B] thereto and substituting in lieu thereof
Addendum 10.03[B] to the Adoption Agreement in the form
attached hereto.
1
<PAGE> 2
The amendments made herein shall be effective on the 1st day of
October, 1997.
Except as hereinabove amended, the provisions of the Plan, as
previously amended by Amendments One and Two, shall remain in full force and
effect.
IN WITNESS WHEREOF, the Corporation has caused this Amendment Three to
the Plan to be executed on this 1st day of October, 1997.
HORIZON HEALTH CORPORATION
By: /s/ James W. McAtee
----------------------------------------
Its: Executive Vice President
------------------------------------
2
<PAGE> 1
EXHIBIT 5.1
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P. 0. BOX 2508
CINCINNATI, OH 45201
Employer Identification Number:
Date: June 4, 1997 75-2293354
DLN:
HORIZON MENTAL HEALTH MANAGEMENT, INC. 17007099207007
C/O GAYLE A. ROLLINS Person to Contact:
AVESTA DIVISION CINDY PERRY
PO BOX 2558 Contact Telephone Number:
HOUSTON, TX 77252-8342 (513) 241-5199
Plan Name:
SAVINGS AND PROFIT SHARING PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some events that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
This determination letter is applicable for the amendment(s) adopted
on July 17, 1996.
This plan has been mandatorily disaggregated, permissively aggregated,
or restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a design-based
safe harbor described in the regulations.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefitting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
Except as otherwise specified this letter may not be relied upon with
respect to whether the plan satisfies the qualification requirements as amended
by the Ureguay Round Agreements Act, Pub. L. 103-465
<PAGE> 2
-2-
HORIZON MENTAL HEALTH MANAGEMENT
and by the Small Business Job Protection Act of 1996 (SBJPA), Pub. L. 104-108,
other than the requirements of Code section 401(a)(26).
Based on the information supplied, we have determined that your plan
meets the requirements of section 401(k) of the Internal Revenue Code.
This letter considers the amendments required by the Tax Reform Act of
1986, except as otherwise specified in this letter.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
/s/ C. Ashley Bullard
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Horizon Health Corporation (formerly
named Horizon Mental Health Management, Inc.) of our report on Horizon Mental
Health Management, Inc. dated October 7, 1996, except as to Note 13, which is
as of April 29, 1997, appearing on page F-1 of Horizon Mental Health
Management, Inc.'s Annual Report on Form 10-K/A for the year ended August 31,
1996. We also consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears on page S-1 of such Annual Report
on Form 10-K/A.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Horizon Health Corporation of our report
on Specialty Healthcare Management, Inc. dated April 25, 1997 appearing on page
F-9 of Horizon Health Corporation's Current Report on Form 8-K dated August 11,
1997.
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of Horizon Health Corporation of our report
on National Medical Management Services, a division of National Medical
Enterprises, Inc., dated May 8, 1997, appearing on page F-20 of Horizon Health
Corporation's Current Report on Form 8-K dated August 11, 1997.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Dallas, Texas
September 29, 1997
