As filed with the Securities and Exchange Commission on November 30, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
ANICOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3885212
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
6133 North River Road, Suite 1000, Rosemont, Illinois 60018-5171
(Address of Principal Executive Offices including Zip Code)
(847) 518-8700
(Issuer's telephone number, including area code)
Anicom 401(k) Savings Plan
(Full title of plans)
Scott C. Anixter
6133 North River Road, Suite 1000, Rosemont, Illinois 60018-5171
(Name, address and telephone number of agent for service)
Copies to:
Jeffrey R. Patt, Esq.
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, Illinois 60661
(312) 902-5200
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
| | Proposed | Proposed |
Title of securities to be | Amount to be | maximum offering | maximum aggregate | Amount of
registered | registered | price per share(1) | offering price(1) | registration fee
- ------------------------------------------------------------------------------------------------------------
| | | |
<S> | <C> | <C> | <C> | <C>
Common Stock, | | | |
($.001 par value) | 200,000 | $10.1563 | $2,031,260 | $565
- ----------------------------|----------------|---------------------|---------------------|------------------
Interests in the Plan | (2) | | |
============================================================================================================
<FN>
(1) Based on the average of high and low sales prices as reported on the Nasdaq
National Market on November 24, 1998 and used solely for the purpose of
calculating the registration fee pursuant to Rule 457(h)(1) under the
Securities Act of 1933.
(2) This Registration Statement covers an indeterminate amount of interests to
be offered or sold pursuant to the Anicom 401(k) Savings Plan in accordance
with Rule 416(c) of the Securities Act.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The information called for in Part I of Form S-8 is currently included
in the prospectus for the Anicom 401(k) Savings Plan, (the "Plan"), and is not
being filed with or included in this Form S-8 in accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed by Anicom, Inc. (the
"Company") with the SEC are incorporated in this Registration Statement by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998, June 30, 1998 and September 30, 1998;
3. The Company's Current Reports on Form 8-K, dated September 22,
1998 and October 5, 1998 and the Company's Current Reports on
Form 8-K/A dated May 23, 1996, November 5, 1996, September 25,
1997, February 13, 1998, April 20, 1998, July 31, 1998,
October 29, 1998 and November 20, 1998; and
4. The description of the Common Stock contained in the Company's
registration statement on Form 8-A filed under Section 12 of
the Exchange Act as filed with the Commission on January 10,
1995 and all amendments thereto and reports filed for the
purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Registration Statement 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 subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.
The Company will provide, without charge, to each person who has
received a copy of any of the prospectuses to which this registration statement
relates, on the written or oral request of such person, a copy of any or all the
documents that have been or may be incorporated herein by reference (other than
exhibits thereto, unless such exhibits are specifically incorporated by
reference therein). Written or telephone requests for such copies should be
directed to the Company's principal executive office: Anicom, Inc., 6133 River
Road, Suite 1000, Rosemont, Illinois 60018-5171, Attention: Donald C.
Welchko (telephone: 847-518-8700).
II-1
<PAGE>
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Article 12 of the Company's Amended and Restated Certificate of
Incorporation provides that the Company shall indemnify its directors to the
full extent permitted by the General Corporation Law of the State of Delaware
and may indemnify its officers and employees to such extent, except that the
Company shall not be obligated to indemnify any such person (i) with respect to
proceedings, claims or actions initiated or brought voluntarily by any such
person and not by way of defense, or (ii) for any amounts paid in settlement of
an action indemnified against by the Company without the prior written consent
of the Company. The Company has entered into indemnity agreements with each of
its directors. These agreements may require the Company, among other things, to
indemnify such directors against certain liabilities that may arise by reason of
their status or service as directors, to advance expenses to them as they are
incurred, provided that they undertake to repay the amount advanced if it is
ultimately determined by a court that they are not entitled to indemnification
and to obtain directors' liability insurance if available on reasonable terms.
In addition, Article 12 of the Company's Amended and Restated
Certificate of Incorporation provides that a director of the Company shall not
be personally liable to the Company or its stockholders for monetary damages for
breach of his or her fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for willful or negligent conduct
in paying dividends or repurchasing stock out of other than lawfully available
funds or (iv) for any transaction from which the director derives an improper
personal benefit.
Reference is made to Section 145 of the General Corporation Law of the
State of Delaware which provides for indemnification of directors and officers
in certain circumstances.
The Company has obtained a directors' and officers' liability insurance
policy which entitles the Company to be reimbursed for certain indemnity
payments it is required or permitted to make to its directors and officers.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1* Restated Certificate of Incorporation of the Company,
as amended.
4.2** Restated Bylaws of the Company.
4.3*** Specimen Common Stock Certificate.
4.4 Anicom, Inc. 401(k) Savings Plan.
23.1 Consent of PricewaterhouseCoopers LLP.
II-2
<PAGE>
23.2 Consent of KPMG LLP.
24 Power of Attorney (included on the signature page of
this Registration Statement).
____________________________
* Incorporated by reference to Exhibit 3 of the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998.
** Incorporated by reference to Exhibit 3.3 of the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1996.
*** Incorporated by reference to the corresponding Exhibit of the Company's
Registration Statement on Form SB-2, as amended (Registration Statement
No. 33-87736C).
An opinion of counsel (Exhibit No. 5) is not being filed since the
securities being registered are not original issue securities and because the
Registrant hereby undertakes to submit the Anicom 401(k) Savings Plan and any
amendment thereto to the Internal Revenue Service ("IRS") in a timely manner and
will make all changes required by the IRS in order to qualify such plan.
II-3
<PAGE>
Item 9. Undertakings.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually, or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Company pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(b) 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.
(c) 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.
2. The Company hereby undertakes that, for the purpose of determining
any liability under the Securities Act of 1933, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized on this 30th day of November, 1998.
ANICOM, INC.
By: /S/ SCOTT C. ANIXTER
------------------------------------------
Scott C. Anixter
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Scott C. Anixter and Donald C. Welchko, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, to sign on
his behalf, individually and in each capacity stated below, all amendments and
post-effective amendments to this Registration Statement on Form S-8 and to file
the same, with all exhibits thereto and any other documents in connection
therewith, with the Securities and Exchange Commission under the Securities Act
of 1933, granting unto said attorneys-in-fact and agents 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 and to all intents and purposes
as each might or could do in person, hereby ratifying and confirming each act
that said attorneys-in-fact and agents may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on this 30th day of November, 1998
by the following persons in the capacities indicated.
Signature Title
- -------------------------------- -------------------------------------
/S/ SCOTT C. ANIXTER Chairman, Chief Executive Officer
- -------------------------------- (Principal Executive Officer) and
Scott C. Anixter Director
/S/ ALAN B. ANIXTER
- -------------------------------- Chairman of the Board and Director
Alan B. Anixter
/S/ CARL E. PUTNAM President, Chief Operating Officer and
- -------------------------------- Director
Carl E. Putnam
/S/ DONALD C. WELCHKO Vice President, Chief Financial Officer
- -------------------------------- and Director (Principal Financial and
Donald C. Welchko Accounting Officer)
/S/ MICHAEL SEGAL Director
- --------------------------------
Michael Segal
/S/ LEE B. STERN Director
- --------------------------------
Lee B. Stern
II-5
<PAGE>
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
Rosemont, State of Illinois, on this 30th day of November, 1998.
Anicom 401(k) Savings Plan
By Anicom, Inc., the Plan Administrator
/S/ SCOTT C. ANIXTER
---------------------------------------
Scott C. Anixter
Chairman and Chief Executive Officer
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.4 Anicom 401(k) Savings Plan.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of KPMG LLP.
24 Power of Attorney (included on the signature
page of this Registration Statement).
II-7
EXHIBIT 4.4
PUTNAM BASIC PLAN DOCUMENT #07
ARTICLE 1. INTRODUCTION
By executing the Plan Agreement, the Employer has established a
retirement plan (the "Plan") according to the terms and conditions of the Plan
Agreement and this Putnam Basic Plan Document #07, for the purpose of providing
a retirement fund for the benefit of Participants and Beneficiaries. A Plan
established hereunder pursuant to a Plan Agreement is intended to qualify under
Section 401(a) of the Code.
ARTICLE 2. DEFINITIONS
The terms defined in Sections 2.1 through 2.52 appear generally
throughout the document. Sections 2.53 through 2.63 and Article 5 contain
definitions of terms used only in a CODA and Section 10.4 contains additional
definitions related to distributions from the Plan. Articles 6 and 1.1 contain
additional definitions of terms used only in those Articles.
a. Account means any of, and Accounts means all of, a
Participant's Employer Contribution Account, Participant Contribution
Account, Rollover Account, Deductible Employee Contribution Account and
if the Plan contains a CODA, the accounts maintained for the
Participant pursuant to Article 5.
b. Affiliated Employer, for purposes of the Plan other than
Article 6, means the Employer and a trade or business, whether or not
incorporated, which is any of the following:
i. A member of a group of controlled corporations (within the
meaning of Section 414(b) of the Code) which includes the Employer; or
ii. A trade or business under common control (within the meaning
of Section 414(c) of the Code) with the Employer; or
iii. A member of an affiliated service group (within the meaning
of Section 414(m) of the Code) which includes the Employer; or
iv. An entity otherwise required to be aggregated with the
Employer pursuant to Section 414(o) of the Code.
In determining an Employee's service for vesting and for eligibility to
participate in the Plan, all employment with Affiliated Employers will be
treated as employment by the Employer.
1
<PAGE>
For purposes of Article 6 only, the definitions in paragraphs (a) and
(b) of this Section 2.2 shall be modified by adding at the conclusion of the
parenthetical phrase in each such paragraph the words "as modified by Section
415(h) of the Code."
c. Authorized Leave of Absence means a leave of absence from
employment granted in writing by an Affiliated Employer. Authorized
Leave of Absence shall be granted on account of military service for
any period during which an Employee's right to re-employment is
guaranteed by law, and for such other reasons and periods as an
Affiliated Employer shall consider proper, provided that Employees in
similar situations shall be similarly treated.
d. Base Contribution Percentage means the percentage so
specified in the Plan Agreement.
e. Beneficiary means a person entitled to receive benefits
under the Plan upon the death of a Participant, in accordance with
Section 7.2 and Articles 10 and 11.
f. CODA means a cash or deferred arrangement that meets the
requirements of Section 401(k) of the Code, adopted as part of a profit
sharing plan.
g. Code means the Internal Revenue Code of 1986, as amended.
h. Compensation means all of an Employee's compensation
determined in accordance with the definition and for the purpose
elected by the Employer in the Plan Agreement. For purposes of that
election, "Form W-2 earnings" means "wages" within the meaning of
Section 3401(a) of the Code in connection with income tax withholding
at the source, and all other compensation paid to the Employee by the
Employer in the course of its trade or business, for which the Employer
is required to furnish the Employee with a written statement under
Sections 6041(d), 6051(a)(3) and 6052 of the Code, determined without
regard to exclusions based on the nature or location of the employment
or the services performed (such as the exception for agricultural labor
in Section 3401(a)(2) of the Code). Compensation shall include only
amounts actually paid to the Employee during the Plan Year, except that
if the Employer so elects in the Plan Agreement, in an Employee's
initial year of participation in the Plan, Compensation shall include
only amounts actually paid to the Employee from the Employee's
effective date of participation pursuant to Section 3.1 to the end of
the Plan Year. In addition, if the Employer so elects in the Plan
Agreement, Compensation shall include any amount which is contributed
to an employee benefit plan for the Employee by the Employer pursuant
to a salary reduction agreement, and which is not includible in the
gross income of the Employee under Section 125, 402(e)(3), 402(h)(1)(B)
or 403(b) of the Code. If the Employer so elects in the Plan Agreement,
Compensation shall not include overtime pay, bonuses, commissions or
other similar types of pay, or Compensation above a specified amount,
all as designated in the Plan Agreement, provided, that such election
may not be made if the Employer elects in the Plan Agreement to
integrate the Plan with Social Security. (For a self-employed person,
the relevant term is Earned Income, as defined in Section 2.12.)
i. Date of Employment means the first date on which an
Employee performs an Hour of Service; or, in the case of an Employee
who has incurred one or more One-Year Eligibility Breaks and who is
treated as a new Employee under the rules of Section 3.3, the first
date on which he performs an Hour of Service after his return to
employment.
j. Deductible Employee Contribution Account means an account
maintained on the books of the Plan on behalf of a Participant, in
which are recorded amounts contributed by him to the Plan on a
tax-deductible basis under prior law, and the income, expenses, gains
and losses thereon.
2
<PAGE>
k. Disabled means unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12
months. The permanence and degree of such impairment shall be supported
by medical evidence.
l. Earned Income means a Self-Employed Individual's net
earnings from self- employment in the trade or business with respect to
which the Plan is established, excluding items not included in gross
income and the deductions allocable to such items, and reduced by (i)
contributions by the Employer to qualified plans, to the extent
deductible under Section 404 of the Code, and (ii) the deduction
allowed to the taxpayer under Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
m. Earnings, for determining all benefits provided under the
Plan, means the first $150,000 (as adjusted periodically by the
Secretary of the Treasury for inflation) of the sum of the Compensation
and Earned Income received by an Employee during a Plan Year. To
calculate an allocation to a Participant's Account for any Plan Year
shorter than 12 months, the dollar limit on Earnings must be multiplied
by a fraction of which the denominator is 12 and the numerator is the
number of months in the Plan Year. In determining the Earnings of a
Participant, the rules of Section 414(q)(6) of the Code shall apply,
except that in applying those rules the term "family" shall include
only the Participant's spouse and the Participant"s lineal descendants
who have not reached age 19 by the last day of the Plan Year. If, as a
result of the application of such rules, the applicable Earnings
limitation described above is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Earnings as determined under this Section prior to the
application of this limitation.
n. Effective Date means the date so designated in the Plan
Agreement. If the Plan Agreement indicates that the Employer is
adopting the Plan as an amendment of an existing plan, the provisions
of the existing plan apply to all events preceding the Effective Date,
except as to specific provisions of the Plan which set forth a
retroactive effective date in accordance with Section 1140 of the Tax
Reform Act of 1986.
o. Eligibility Period means a period of service with the
Employer which an Employee is required to complete in order to commence
participation in the Plan. A 12-month Eligibility Period is a period of
12 consecutive months beginning on an Employee's most recent Date of
Employment or any anniversary thereof, in which he is credited with at
least 1,000 Hours of Service or the number of Hours of Services set
forth in the Plan Agreement. A 6-month Eligibility Period is a period
of 6 consecutive months beginning on an Employee's most recent Date of
Employment or any anniversary thereof, or on the 6-month anniversary of
such Date of Employment or any anniversary thereof, in which he is
credited with at least 500 Hours of Service or the number of Hours of
Service set forth in the Plan Agreement. If the Employer has selected
another period of service as the Eligibility Period under the Plan,
Eligibility Period means the period so designated in which the Employee
is credited with the number of hours designated in the Plan Agreement.
Notwithstanding the foregoing, if an Employee is credited with 1,000
Hours of Service during a 12-consecutive-month period following his
Date of Employment or any anniversary thereof, he shall be credited
with an Eligibility Period. In the case of an Employee in a seasonal
industry (as defined under regulations prescribed by the Secretary of
Labor) in which the customary extent of employment during a calendar
year is fewer than 1,000 Hours of Service in the case of a 12- month
Eligibility Period, the number specified in any regulations prescribed
by the Secretary of Labor dealing with
3
<PAGE>
years of service shall be substituted for 1,000. If the Employer so elects in
the Plan Agreement, an Employee's most recent Date of Employment for purposes of
this Section 2.15 shall be the first date on which he performed services for a
business acquired by the Employer.
p. Employee means a common law Employee of an Affiliated
Employer; in the case of an Affiliated Employer which is a sole
proprietorship, the sole proprietor thereof; in the case of an
Affiliated Employer which is a partnership, a partner thereof; and a
Leased Employee of an Affiliated Employer. The term "Employee" includes
an individual on Authorized Leave of Absence, a Self-Employed
Individual and an Owner-Employee.
q. Employer means the Employer named in the Plan Agreement and
any successor to all or the major portion of its assets or business
which assumes the obligations of the Employer under the Plan Agreement.
r. Employer Contribution Account means an account maintained
on the books of the Plan on behalf of a Participant, in which are
recorded the amounts allocated for his benefit from contributions by
the Employer (other than contributions pursuant to Article 5 (i.e. the
CODA provisions)), Forfeitures by former Participants (if the Plan
provides for reallocation of Forfeitures), amounts reapplied under
Section 6.1(d), and the income, expenses, gains and losses incurred
thereon.
s. Employer Stock means securities constituting "qualifying
employer securities" of an Employer within the meaning of Section
407(d)(5) of ERISA.
t. ERISA means the Employee Retirement Income Security Act of
1974, as amended.
u. Excess Earnings means a Participant's Earnings in excess of
the Integration Level of the Plan.
v. Forfeiture means a nonvested amount forfeited by a former
Participant, pursuant to Section 8.3, or an amount forfeited by a
former Participant or Beneficiary who cannot be located, pursuant to
Section 9.5.
w. Hour of Service means each hour described in paragraphs
(a), (b), (c), (d) or (e) below, subject to paragraphs (f) and (g)
below.
i. Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Affiliated Employer.
These hours shall be credited to the Employee for the computation
period or periods in which the duties are performed.
ii. Each hour for which an Employee is paid, or entitled to
payment, by an Affiliated Employer on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous period of
absence (whether or not such period occurs in a single computation
period) unless the Employee's absence is not an Authorized Leave of
Absence. Hours under this paragraph shall be calculated and
4
<PAGE>
credited pursuant to Section 2530.200b-2 of the Department of Labor
Regulations, which are incorporated herein by this reference.
iii. Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by an Affiliated Employer.
The same Hours of Service shall not be credited under both paragraph
(a) or paragraph (b), as the case may be, and under this paragraph (c);
and no more than 501 Hours of Service shall be credited under this
paragraph (c) with respect to payments of back pay, to the extent that
such pay is agreed to or awarded for a period of time described in
paragraph (b) during which the Employee did not perform or would not
have performed any duties. These hours shall be credited to the
Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the
award, agreement or payment is made.
iv. Each hour during an Authorized Leave of Absence. Such
hours shall be credited at the rate of a customary full work week for
an Employee.
v. Solely for purposes of determining whether a One-Year
Vesting Break or a One-Year Eligibility Break has occurred, each hour
which otherwise would have been credited to an Employee but for an
absence from work by reason of: the pregnancy of the Employee, the
birth of a child of the Employee, the placement of a child with the
Employee in connection with the adoption of the child by the Employee,
or caring for a child for a period beginning immediately after its
birth or placement. If the Plan Administrator cannot determine the
hours which would normally have been credited during such an absence,
the Employee shall be credited with eight Hours of Service for each day
of absence. No more than 501 Hours of Service shall be credited under
this paragraph by reason of any pregnancy or placement. Hours credited
under this paragraph shall be treated as Hours of Service only in the
Plan Year or Eligibility Period or both, as the case may be, in which
the absence from work begins, if necessary to prevent the Participant's
incurring a One-Year Vesting Break or One-Year Eligibility Break in
that period, or, if not, in the period immediately following that in
which the absence begins. The Employee must timely furnish to the
Employer information reasonably required to establish (i) that an
absence from work is for a reason specified above, and (ii) the number
of days for which the absence continued.
vi. Hours of Service shall be determined on the basis of
actual hours for which an Employee is paid or entitled to payment, or
as otherwise specified in the Plan Agreement.
vii. If the Employer maintains the plan of a predecessor
Employer, service for the predecessor Employer shall be treated as
service for the Employer. If the Employer does not maintain the plan of
a predecessor Employer, service for the predecessor Employer shall be
treated as service for the Employer only to the extent that the
Employer so elects in the Plan Agreement.
viii. Hours of Service shall be credited to a Leased Employee
as though he were an Employee.
x. Integration Level means the Earnings amount selected by the
Employer in the Plan Agreement.
5
<PAGE>
y. Investment Company means an open-end registered investment
company for which Putnam Mutual Funds Corp., or its affiliate acts as
principal underwriter, or for which Putnam Investment Management, Inc.,
or its affiliate serves as an investment adviser; provided that its
prospectus offers its shares under the Plan.
z. Investment Company Shares means shares issued by an
Investment Company.
aa. Investment Products means any of the investment products
specified by the Employer in accordance with Section 13.2, from the
group of those products sponsored, underwritten or managed by Putnam as
shall be made available by Putnam under the Plan, and such other
products as shall be expressly agreed to in writing by Putnam for
availability under the Plan.
bb. Leased Employee means any person (other than an Employee
of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a substantially
full time basis for a period of at least one year, and such services
are of a type historically performed by Employees in the business field
of the recipient Employer. The compensation of a Leased Employee for
purposes of the Plan means the Compensation (as defined in Section 2.8)
of the Leased Employee attributable to services performed for the
recipient Employer. Contributions or benefits provided to a leased
Employee by the leasing organization which are attributable to services
performed for the recipient Employer shall be treated as provided by
the recipient Employer. Provided that leased Employees do not
constitute more than 20% of the recipient's nonhighly compensated
workforce, a leased Employee shall not be considered an Employee of the
recipient if he is covered by a money purchase pension plan providing:
(1) a nonintegrated Employer contribution rate of at least 10% of
compensation (as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under Section
125, Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the
Code), (2) immediate participation, and (3) full and immediate vesting.
cc. One-Year-Eligibility Break means a 12-month Eligibility
Period during which an individual is not credited with more than 500
Hours of Service; provided, however, that in the case of an Employee in
a seasonal industry, there shall be substituted for 500 the number of
Hours of Service specified in any regulations of the Secretary of Labor
dealing with breaks in service, and provided further that if the
Employer has elected in the Plan Agreement to establish a number less
than 500 as the requisite Hours of Service for crediting a 12-month
Eligibility Period, that number shall be substituted for 500.
dd. One-Year Vesting Break means a Year of Service measuring
period, as elected by the Employer in the Plan Agreement, during which
an individual is not credited with more than 500 Hours of Service;
provided, however, that in the case of an Employee in a seasonal
industry, there shall be substituted for 500 the number of Hours of
Service specified in any regulations for the Secretary of Labor dealing
with breaks in service, and provided further that if the Employer has
elected in the Plan Agreement to establish a number less than 500 as
the requisite Hours of Service for crediting a Year of Service, that
number shall be substituted for 500.
ee. Owner-Employee means the sole proprietor of an Affiliated
Employer that is a sole proprietorship, or a partner owning more than
10% of either the capital or profits interest
6
<PAGE>
of an Affiliated Employer that is a partnership. The Plan
Administrator shall be responsible for identifying Owner-Employees to
the Recordkeeper.
ff. Participant means each Employee who has met the
requirement for participation in Article 3. An Employee is not a
Participant for any period before the entry date applicable to him.
gg. Participant Contribution means an after-tax contribution
made by a Participant in accordance with Section 4.6.
hh. Participant Contribution Account means an account
maintained on the books of the Plan, in which are recorded Participant
Contributions by a Participant and any income, expenses, gains or
losses incurred thereon.
ii. Plan means the form of defined contribution retirement
plan and trust agreement adopted by the Employer, consisting of the
Plan Agreement and the Putnam Basic Plan Document #07 as set forth
herein, together with any and all amendments and supplements thereto.
jj. Plan Administrator means the Employer or its appointee
pursuant to Section 15.1.
kk. Plan Agreement means the separate agreement entered into
between the Employer and the Trustee and accepted by Putnam, under
which the Employer adopts the Plan and selects among its optional
provisions.
ll. Plan Year means the period of 12 consecutive months
specified by the Employer in the Plan Agreement, as well as any initial
short plan year period specified by the Employer in the Plan Agreement.
mm. Profit Sharing Contribution means a contribution made for
the benefit of a Participant by the Employer pursuant to Section
4.2(a).
nn. Putnam means (i) Putnam Mutual Funds Corp., or a company
affiliated with it which Putnam Mutual Funds Corp. has designated as
its agent performing specified actions or procedures in its capacity as
sponsor of this prototype Plan, and (ii) Putnam Fiduciary Trust Company
when performing in its capacity as Recordkeeper or Trustee.
oo. Qualified Domestic Relations Order means any judgment,
decree or order (including approval of a property settlement agreement)
which constitutes a "qualified domestic relations order" within the
meaning of Code Section 414(p). A judgment, decree or order shall not
fail to be a Qualified Domestic Relations Order merely because it
requires a distribution to an alternate payee (or the segregation of
accounts pending distribution to an alternate payee) before the
Participant is otherwise entitled to a distribution under the Plan.
pp. Qualified Participant means any Participant who satisfies
the requirements for being a Qualified Participant as elected by the
Employer in the Plan Agreement, for the purposes set forth in the Plan
Agreement. If the Plan is not adopted to replace an existing plan, this
Section 2.42 is effective on the Effective Date. If the Plan replaces
an existing plan,
7
<PAGE>
this Section 2.42 is effective on the Effective Date, and the
provision of the existing plan that this Section 2.42 replaces shall
continue to apply until that time.
qq. Recordkeeper means the person or entity designated by the
Employer in the Plan Agreement to perform the duties described in
Section 15.4, and any successor thereto. If Putnam is the Recordkeeper,
the terms and conditions of its service will be as specified in a
service agreement between the Employer and Putnam.
rr. Retirement means ceasing to be an Employee in accordance
with Section 7.1.
ss. Rollover Account means an account established for an
Employee who makes a rollover contribution to the Plan pursuant to
Section 4.5.
tt. Self-Employed Individual means an individual whose
personal services are a material income-producing factor in the trade
or business for which the Plan is established, and who has Earned
Income for the taxable year from that trade or business, or would have
Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
uu. Shareholder-Employee means any officer or Employee of an
electing small business corporation, within the meaning of Section 1362
of the Code, who on any day during a taxable year of the Employer owns
(or is considered as owning under Section 318(a)(1) of the Code) more
than 5% of the outstanding stock of the Employer. The Plan
administrator shall be responsible for identifying
Shareholder-Employees to the Recordkeeper.
vv. Social Security Wage Base means the maximum amount
considered as wages under Section 3121(a)(1) of the Code as in effect
on the first day of the Plan Year.
ww. Trust and Trust Fund mean the trust fund established under
Section 13.1.
xx. Trustee means the person, or the entity with trustee
powers, named in the Plan Agreement as trustee, and any successor
thereto.
yy. Valuation Date means each day when the New York Stock
Exchange is open, or such other date or dates as the Employer may
designate by written agreement with the Recordkeeper.
zz. Year of Service means a Plan Year or a 12-month
Eligibility Period, as elected by the Employer in the Plan Agreement,
in which an Employee is credited with at least 1,000 Hours of Service;
provided, however, that if the Employer has elected in the Plan
Agreement to establish a number less than 1,000 as the requisite for
crediting a Year of Service, that number shall be substituted for
1,000, and provided further that in the case of an Employee in a
seasonal industry (as defined under regulations prescribed by the
Secretary of Labor) in which the customary extent of employment during
a calendar year is fewer than 1,000 Hours of Service, the number
specified in any regulations prescribed by the Secretary of Labor
dealing with years of service shall be substituted for 1,000. An
Employee's Years of Service shall include service credited prior to the
Effective Date under any predecessor plan. If the initial Plan Year is
shorter than 12 months, each Employee who is credited with at least
1,000 Hours of Service in the 12-month period ending on the last day of
the initial Plan Year shall be credited with a Year of Service with
respect to the initial Plan Year.
8
<PAGE>
If the Employer has so elected in the Plan Agreement, Years of Service
for vesting shall not include:
i. Service in any Plan Year (or comparable period prior to
the Effective Date) completed before the Employee reached age 18;
ii. Service completed during a period in which the Employer
did not maintain the Plan or any predecessor plan (as defined under
regulations prescribed by the Secretary of the Treasury).
If the Employer has so elected in the Plan Agreement, Years of Service
for vesting shall include employment by a business acquired by the Employer,
before the date of the acquisition.
The following definitions apply only to cash or deferred arrangements
under Section 401(k) (CODA):
aaa. Deferral Agreement means an Employee's agreement to make
one or more Elective Deferrals in accordance with Section 5.2.
bbb. Elective Deferral means any contribution made to the Plan
by the Employer at the election of a Participant, in lieu of cash
compensation, including contributions made pursuant to a Deferral
Agreement or other deferral mechanism.
ccc. Elective Deferral Account means an account maintained on
the books of the Plan, in which are recorded a Participant's Elective
Deferrals and the income, expenses, gains and losses incurred thereon.
ddd. Employer Matching Account means an account maintained on
the books of the Plan, in which are recorded the Employer Matching
Contributions made on behalf of a Participant and the income, expenses,
gains and losses incurred thereon.
eee. Employer Matching Contribution means a contribution made
by the Employer (i) to the Plan pursuant to Section 5.8, or (ii) to
another defined contribution plan on account of a Participant's
"elective deferrals" or "employee contributions," as those terms are
used in Section 401(m)(4) of the Code.
fff. Highly Compensated Employee means any highly compensated
active Employee or highly compensated former Employee as defined in
subsection (a) below; provided, however, that if the Employer so elects
in the Plan Agreement, Highly Compensated Employee means any highly
compensated Employee under the simplified method described in
subsection (b) below.
i. Regular Method. A highly compensated active Employee
includes any Employee who performs service for the Employer during the
determination year and who during the look-back year: (i) received
compensation from the Employer in excess of $75,000 (as adjusted
pursuant to Section 415(d) of the Code); (ii) received compensation
from the Employer in excess of $50,000 (as adjusted pursuant to Section
415(d) of the Code) and was a member of the top-paid group for such
9
<PAGE>
year; or (iii) was an officer of the Employer and received
compensation during such year that is greater than 50% of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code. The term
also includes (A) Employees who are both described in the preceding
sentence if the term "determination year" is substituted for the term
"look-back year," and among the 100 Employees who received the most
compensation from the Employer during the determination year; and (B)
Employees who are 5% owners at any time during the look-back year or
determination year. If no officer has satisfied the compensation
requirement of (iii) above during either a determination year or look-
back year, the highest paid officer for such year shall be treated as
a Highly Compensated Employee.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) before the
determination year, performed no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the year of separation from service or any determination year
ending on or after the Employee's 55th birthday.
If during a determination year or look-back year an Employee
is a family member of either a 5% owner who is an active or former
Employee, or a Highly Compensated Employee who is one of the 10 most
highly paid Highly Compensated Employees ranked on the basis of
compensation paid by the Employer during the year, then the family
member and the 5% owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving compensation and Plan
contributions or benefits equal to the sum of the compensation and
contributions or benefits of the family member and the 5% owner or
top-ten Highly Compensated Employee. For purposes of this Section
2.58(a), family members include the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
For purposes of this subsection (a), the "determination year"
shall be the Plan Year, and the "look-back year" shall be the 12-month period
immediately preceding the determination year; provided, however, that in a Plan
for which the Plan Year is the calendar year, the current Plan Year shall be
both the "determination year" and the "look-back year" if the Employer so elects
in the Plan Agreement.
ii. Simplified Method. An Employee is a Highly Compensated
Employee under this simplified method if (i) the Employee is a 5% owner
during the Plan Year; (ii) the Employee's compensation for the Plan
Year exceeds $75,000 (as adjusted pursuant to Section 415(d) of the
Code); (iii) the Employee's compensation for the Plan Year exceeds
$50,000 (as adjusted pursuant to Section 415(d) of the Code) and the
Employee is in the top-paid group of Employees; or (iv) the Employee is
an officer of the Employer and received compensation during the Plan
Year that is greater than 50% of the dollar limitation under Code
Section 415(b)(1)(A).
The lookback provisions of Code Section 414(q) do not apply to
determining Highly Compensated Employees under this simplified method.
An Employer that applies this simplified method for determining Highly
Compensated Employees may choose to apply this method on the basis of
the Employer's workforce as of a single day during the Plan Year
("snapshot day"). In applying this simplified method on a snapshot
basis, the Employer shall determine who is a Highly Compensated
Employee on the basis of the data as of the snapshot day. If the
determination of who is a Highly
10
<PAGE>
Compensated Employee is made earlier than the last day of the Plan
Year, the Employce's compensation that is used to determine an
Employee's status must be projected for the Plan Year under a
reasonable method established by the Employer.
Notwithstanding the foregoing, in addition to those Employees
who are determined to be hiahly compensated on the Plan's snapshot day,
as described above, where there are Employees who are not employed on
the snapshot day but who are taken into account for purposes of testing
under Section 5.6 or 5.10, the Employer must treat as a Highly
Compensated Employee any Eligible Employee for the Plan Year who:
(1) terminated prior to the snapshot day and was a
Highly Compensated Employee in the prior year;
(2) terminated prior to the snapshot day and (i) was
a 5% owner, (ii) had compensation for the Plan Year greater
than or equal to the projected compensation of any Employee
who is treated as a Highly Compensated Employee on the
snapshot day (except for Employees who are Highly Compensated
Employees solely because they are 5% owners or officers), or
(iii) was an officer and had compensation greater than or
equal to the projected compensation of any other officer who
is a Highly Compensated Employee on the snapshot day solely
because that person is an officer; or
(3) becomes employed subsequent to the snapshot day
and (i) is a 5% owner, (ii) has compensation for the Plan Year
greater than or equal to the projected compensation of any
Employee who is treated as a Highly Compensated Employee on
the snapshot day (except for Employees who are Highly
Compensated Employees solely because they are 5% owners or
officers), or (iii) is an officer and has compensation greater
than or equal to the projected compensation of any other
officer who is a Highly Compensated Employee on the snapshot
day solely because that person is an officer.
If during a Plan Year an Employee is a family member of either
a 5% owner who is an Employee, or a Highly Compensated Employee who is
one of the ten most highly paid Highly Compensated Employees ranked on
the basis of compensation paid by the Employees during the year, then
the family member and the 5% owner or top
ten-Highly-Compensated-Employee shall be treated as a single Employee
receiving compensation and Plan contributions or benefits equal to the
sum of the compensation and contributions or benefits of the family
member and the 5% owner or top-ten Highly-Compensated-Employee. For
purposes of this Section 2.58(b), family members include the spouse,
lineal ascendants and descendants of the Employee and the spouses of
such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers and
the compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder. The Plan Administrator is
responsible for identifying the Highly Compensated Employees and reporting such
data to the Recordkeeper.
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<PAGE>
ggg. Non-Highly Compensated Employee means an Employee who is
not a Highly Compensated Employee.
hhh. Qualified Matching Account means an account maintained on
the books of the Plan, in which are recorded the Qualified Matching
Contributions on behalf of a Participant and the income, expense, gain
and loss attributable thereto.
iii. Qualified Matching Contribution means a contribution made
by the Employer that: (i) is allocated with respect to a Participant's
Elective Deferrals or Participant Contributions or both (as elected by
the Employer in the Plan Agreement), (ii) is fully vested at all times
and (iii) is distributable only in accordance with Section 5.13.
jjj. Qualified Nonelective Contribution means a contribution
(other than an Employer Matching Contribution or Qualified Matching
Contribution) made by the Employer, that: (i) a Participant may not
elect to receive in cash until it is distributed from the Plan; (ii) is
fully vested at all times; and (iii) is distributable only in
accordance with Section 5.13.
kkk. Qualified Nonelective Contribution Account means an
account maintained on the books of the Plan, in which are recorded the
Qualified Nonelective Contributions on behalf of a Participant and the
income, expense, gain and loss attributable thereto.
ARTICLE 3. PARTICIPATION
a. Initial Participation. Upon completion of the eligibility
for Plan participation requirements specified in the Plan Agreement, an
Employee shall begin participation in the Plan as of the entry date
specified in the Plan Agreement, or as of the Effective Date, whichever
is later; provided, however, that:
i. if the Plan is adopted as an amendment of a predecessor
plan of the Employer, every Employee who was participating under the
predecessor plan when it was so amended shall become a Participant in
the Plan as of the Effective Date, whether or not he has satisfied the
age and service requirements specified in the Plan Agreement; and
ii. if the Employer so specifies in the Plan Agreement, any
individual who is (i) a nonresident alien receiving no earned income
from an Affiliated Employer which constitutes income from sources
within the United States, (ii) included in a unit of Employees covered
by a collective bargaining agreement between the Employer and Employee
representatives (excluding from the term "Employee representatives" any
organization of which more than half of the members are Employees who
are owners, officers, or executives of an Affiliated Employer), if
retirement benefits were the subject of good faith bargaining and no
more than 2% of the Employees covered by the collective bargaining
agreement are professionals as defined in Section 1.410(b)-9 of the
Income Tax Regulations, (iii) is an Employee of an Affiliated Employer
specified by the Employer in the Plan Agreement, (iv) is a Leased
Employee, or (v) is a member of such other class of Employees specified
by the Employer in the Plan Agreement, shall not participate in the
Plan until the later of the date on which he ceases to be described in
clause (i), (ii), (iii), (iv) or (v), whichever are applicable, or the
entry date specified by the Employer in the Plan Agreement; and
12
<PAGE>
iii. if the Plan is not adopted as an amendment of a
predecessor plan of the Employer, Employees on the Effective Date shall
begin participation on the Effective Date, to the extent so elected by
the Employer in the Plan Agreement; and
iv. a Participant shall cease to participate in the Plan when
he becomes a member of a class of Employees ineligible to participate
in the Plan, and shall resume participation immediately upon his return
to a class of Employees eligible to participate in the Plan.
In the case of a Plan to which the CODA provisions of Article 5 apply
and for which the Employer has elected in the Plan Agreement to apply
different minimum service requirements for purposes of participation in
Profit Sharing Contributions, for purposes of participation in the CODA
provisions and/or for purposes of participation in Employer Matching
Contributions, this Article 3 shall be applied separately with regard
to participation under Article 4, with regard to participation under
the CODA provisions of Article 5 and/or with regard to participation in
Employer Matching Contributions under Article 5.
b. Special Participation Rule. With respect to a Plan in which
the Employer has specified full and immediate vesting in the Plan
Agreement, an Employee who incurs a One- Year Eligibility Break before
completing the number of Eligibility Periods required under Section 3.1
shall not thereafter be credited with any Eligibility Period completed
before the One-Year Eligibility Break.
c. Resumed Participation. A former Employee who incurs a
One-Year Eligibility Break after having become a Participant shall
participate in the Plan as of the date on which he again becomes an
Employee, if (i) his Accounts had become partially or fully vested
before he incurred a One-Year Vesting Break, or (ii) the number of
consecutive One-Year Eligibility Breaks he incurred are fewer than the
greater of five or the number of Eligibility Periods completed before
such One-Year Eligibility Breaks. In any other case, when he again
becomes an Employee he shall be treated as a new Employee under Section
3.1.
d. Benefits for Owner-Employees. If the Plan provides
contributions or benefits for one or more Owner-Employees who control
both the trade or business with respect to which the Plan is
established and one or more other trades or businesses, the Plan and
plans established with respect to such other trades or businesses must,
when looked at as a single plan, satisfy Sections 401(a) and (d) of the
Code with respect to the Employees of this and all such other trades or
businesses. If the Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the Employees of each such other trade or business must be
included in a plan which satisfies Sections 401(a) and (d) of the Code
and which provides contributions and benefits not less favorable than
those provided for such Owner-Employees under the Plan. If an
individual is covered as an Owner- Employee under the plans of two or
more trades or businesses which he does not control and such individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trade or business which he does control
must be as favorable as those provided for him under the most favorable
plan of the trade or business which he does not control. For purposes
of this Section 3.4, an Owner-Employee, or two or more Owner-
Employees, shall be considered to control a trade or business if such
Owner-Employee, or such two or more Owner-Employees together:
i. own the entire interest in an unincorporated trade or
business, or
13
<PAGE>
ii. in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in such partnership.
For purposes of the preceding sentence, an Owner-Employee or two or
more Owner- Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee or such two or more Owner- Employees are considered to control
within the meaning of the preceding sentence.
e. Changes in Classification. If a Participant ceases to be a
member of a classification of Employees eligible to participate in the
Plan, but does not incur a One-Year Eligibility Break, he will continue
to be credited with Years of Service for vesting while he remains an
Employee, and he will resume participation as of the date on which he
again becomes a member of a classification of Employees eligible to
participate in the Plan. If such a Participant incurs a One-Year
Eligibility Break, Section 3.3 will apply. If a Participant who ceases
to be a member of a classification of Employees eligible to participate
in the Plan becomes a member of a classification of Employees eligible
to participate in another plan of the Employer, his Account, if any,
under the Plan shall, upon the Administrator's direction, be
transferred to the plan in which he has become eligible to participate,
if such plan permits receipt of such Account.
If an Employee who is not a member of a classification of Employees
eligible to participate in the Plan satisfies the age and service requirements
specified in the Plan Agreement, he will begin to participate immediately upon
becoming a member of an eligible classification. If such an Employee has account
balances under another plan of the Employer, such account balances shall be
transferred to the Plan upon the Employee's commencement of participation in the
Plan, if such other plan permits such transfer.
ARTICLE 4. CONTRIBUTIONS
a. Provisions Applicable to All Plans.
i. Payment and Crediting of Contributions. The Employer shall
pay to the order of the Trustee the aggregate contributions to the
Trust Fund for each Plan Year. Each contribution shall be accompanied
by instructions from the Employer, in the manner prescribed by Putnam.
Neither the Trustee nor Putnam shall be under any duty to inquire into
the correctness of the amount or the timing of any contribution, or to
collect any amount if the Employer fails to make a contribution as
provided in the Plan.
ii. Time for Payment. Elective Deferrals will be transferred
to the Trustee as soon as such contributions can reasonably be
segregated from the general assets of the Employer, but in any event
within 90 days after the date on which the Compensation to which such
contributions relate is paid. The aggregate of all other contributions
with respect to a Plan Year shall be transferred to the Trustee no
later than the due date (including extensions) for filing the
Employer's federal income tax return for that Plan Year.
iii. Limitations on Allocations. All allocations shall be
subject to the limitations in Article 6.
14
<PAGE>
iv. Establishment of Accounts. The Employer will establish and
maintain (or cause to be established and maintained) for each
Participant individual accounts adequate to disclose his interest in
the Trust Fund, including such of the following separate accounts as
shall apply to the Participant: Employer Contribution Account,
Participant Contribution Account, Deductible Employee Contribution
Account, and Rollover Account; and in a Plan with a CODA, Elective
Deferral Account, Qualified Nonelective Account, Qualified Matching
Account and Employer Matching Account. The maintenance of such accounts
shall be only for recordkeeping purposes, and the assets of separate
accounts shall not be required to be segregated for purposes of
investment. For purposes of the Plan, a Participant is treated as
benefitting under the Plan for any Plan Year during which the
Participant received or is deemed to receive an allocation to an
Account in accordance with Treasury Regulation ss. 1.410(b)-3(a).
v. Restoration of Accounts. Notwithstanding any other
provision of the Plan, for any Plan Year in which it is necessary to
restore any portion of a Participant's Account pursuant to Section
8.3(b) or 9.5, to the extent that the amount of Forfeitures available
is insufficient to accomplish such restoration, the Employer shall
contribute the amount necessary to eliminate the insufficiency,
regardless of whether the contribution is currently deductible by the
Employer under Section 404 of the Code. Forfeitures shall be considered
available for allocation pursuant to Sections 4.4 and 5.14 in a Plan
Year only after all necessary restoration of Accounts has been
accomplished.
b. Provisions Applicable Only to Profit Sharing Plans.
i. Amount of Annual Contribution. The Employer will contribute
for each Plan Year as a Profit Sharing Contribution an amount
determined in accordance with the formula specified by the Employer in
the Plan Agreement, less any amounts reapplied for the Plan Year under
Section 6.1(d), not to exceed the amount deductible under Section 404
of the Code.
ii. Allocation of Profit Sharing Contributions; General Rule.
As of the last day of each Plan Year, the Profit Sharing Contribution
(and any amounts reapplied under Section 6.1(d)) for the Plan Year
shall be allocated as indicated by the Employer in the Plan Agreement.
iii. Plans Integrated with Social Security. If the Employer
elects in the Plan Agreement an allocation formula integrated with
Social Security, Profit Sharing Contributions (and any amounts
reapplied under Section 6.1(d)) shall be allocated as of the last day
of the Plan Year, as follows:
(1) Top-Heavy Integration Formula. If the Plan is
required to provide a minimum allocation for the Plan Year
pursuant to the Top-Heavy Plan rules of Article 14, or if the
Employer has specified in the Plan Agreement that this
paragraph (1) will apply whether or not the Plan is Top-Heavy,
then:
(a) First, among the Employer Contribution
Accounts of all Qualified Participants, in the ratio
that each Qualified Participant's Earnings bears to
all Qualified Participants' Earnings. The total
amount allocated in this manner shall be equal to
three percent (3%) of all
15
<PAGE>
Qualified Participants' Earnings (or, if less, the
entire amount to be allocated).
(b) Next, among the Employer Contribution
Accounts of all Qualified Participants who have
Excess Earnings, in the ratio that each Qualified
Participant's Excess Earnings bears to all Qualified
Participants' Excess Earnings. The total amount
allocated in this manner shall be equal to three
percent (3%) of all Qualified Participants' Excess
Earnings (or, if less, the entire amount remaining to
be allocated). In the case of any Qualified
Participant who has exceeded the cumulative permitted
disparity limit described in subparagraph (5) below,
all of such Qualified Participant's Earnings shall be
taken into account.
(c) Next, among the Employer Contribution
Accounts of all Qualified Participants, in the ratio
that the sum of each Qualified Participant's Earnings
and Excess Earnings bears to the sum of all Qualified
Participants' Earnings and Excess Earnings. The total
amount allocated in this manner shall not exceed the
lesser of (i) the sum of all Participants' Earnings
and Excess Earnings multiplied by the Top-Heavy
Maximum Disparity Percentage determined under
subparagraph (1)(E), or (ii) the entire amount
remaining to be allocated. In the case of any
Qualified Participant who has exceeded the cumulative
permitted disparity limit described in subparagraph
(5) below, two times such Qualifying Participant's
Earnings shall be taken into account.
(d) Finally, any amount remaining shall be
allocated among the Employer Contribution Accounts of
all Qualified Participants in the ratio that each
Qualified Participant's Earnings bears to all
Qualified Participants' Earnings.
(e) The Top-Heavy Maximum Disparity
Percentage shall be the lesser of (i) 2.7% or (ii)
the applicable percentage from the following table:
If the Plan's Integration The applicable
Level is more than: But not more than: percentage is:
$0 The greater of $10,000 or 2.7%
20% of the Social Security
Wage Base
The greater of $10,000 or 80% of the Social Security 1.3%
20% of the Social Security Wage Base
Wage Base
80% of the Social Security Less than the Social Security 2.4%
Wage Base Wage Base
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<PAGE>
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Top- Heavy Maximum Disparity Percentage is 2.7%.
(2) Non-Top-Heavy Integration Formula. If the Plan is
not required to provide a minimum allocation for the Plan Year
pursuant to the Top-Heavy Plan rules of Article 14, and the
Employer has not specified in the Plan Agreement that
paragraph (1) will apply whether or not the Plan is Top-Heavy,
then:
(a) An amount equal to (i) the Maximum
Disparity Percentage determined under subparagraph
(2)(C) multiplied by the sum of all Qualified
Participants' Earnings and Excess Earnings, or (ii)
if less, the entire amount to be allocated, shall be
allocated among the Employer Contribution Account of
all Participants in the ratio that the sum of each
Qualified Participant's Earnings and Excess Earnings
bears to the sum of all Qualified Participants'
Earnings and Excess Earnings. In the case of any
Qualified Participant who has exceeded the cumulative
permitted disparity limit described in subparagraph
(5) below, two times such Qualified Participant's
Earnings shall be taken into account.
(b) Any amount remaining after the
allocation in paragraph (2)(A) shall be allocated
among the Employer Contribution Accounts of all
Qualified Participants in the ratio that each
Qualified Participant's Earnings bears to all
Qualified Participants' Earnings.
(c) The Maximum Disparity Percentage shall
be the lesser of (i) 5.7% or (ii) the applicable
percentage from the following table:
If the Plan's Integration The applicable
Level is more than: But not more than: percentage is:
$0 The greater of $10,000 or 5.7%
20% of the Social Security
Wage Base
The greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Wage Base
Wage Base
80% of the Social Security Less than the Social Security 5.4%
Wage Base Wage Base
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Top- Heavy Maximum Disparity Percentage is 5.7%.
(3) In this Section 4.2, "Earnings" means Earnings as
defined in Section 2.13.
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(4) Annual overall permitted disparity limit.
Notwithstanding subparagraphs (1) through (3) above, for any
Plan Year this Plan benefits any Participant who benefits
under another qualified plan or simplified employee pension
(as defined in Section 408(k) of the Code) maintained by the
Employer that provides for permitted disparity (or imputes
disparity), Profit Sharing Contributions and Forfeitures will
be allocated among the Employer Contribution Accounts of all
Qualified Participants in the ratio that such Qualified
Participant's Earnings bears to the Earnings of all
Participants.
(5) Cumulative Permitted Disparity Limit. Effective
for Plan years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant is 35
cumulative permitted disparity years. Total cumulative
permitted disparity years means the number of years credited
to the Participant for allocation or accrual purposes under
the Plan, any other qualified plan or simplified employee
pension plan (whether or not terminated) ever maintained by
the Employer. For purposes of determining the Participant's
cumulative permitted disparity limit, all years ending in the
same calendar year are treated as the same year. If the
Participant has not benefitted under a defined benefit or
target benefit plan for an year beginning on or after January
1, 1994, the Participant has no cumulative disparity limit.
c. Provisions Applicable Only to Money Purchase Pension Plans.
i. Amount of Annual Contributions. The Employer will
contribute for each Plan Year an amount described in paragraph (b) or
(c) below, whichever is applicable, less any amounts reapplied for the
Plan Year under Section 6.1(d), not to exceed the amount deductible
under Section 404(c) of the Code.
ii. Allocation of Contributions; General Rule. The Employer
shall contribute an amount equal to the product of the Earnings of all
Qualified Participants and the Base Contribution Percentage, and the
contribution shall be allocated as of the last day of the Plan Year
among the Employer Contribution Accounts of all Qualified Participants
in the ratio that the Earnings of each Qualified Participant bears to
the Earnings of all Qualified Participants. This general rule does not
apply to a Plan that is integrated with Social Security.
iii. Plans Integrated with Social Security. If the Employer
has elected in the Plan Agreement to integrate the Plan with Social
Security, the Employer shall contribute an amount equal to the sum of
the following amounts, and the contribution shall be allocated as of
the last day of the Plan Year as follows:
(1) To the Employer Contribution Account of each
Qualified Participant, an amount equal to the product of the
Base Contribution Percentage and his Earnings, and
(2) To the Employer Contribution Account of each
Qualified Participant who has Excess Earnings, the product of
his Excess Earnings and the lesser of (i) the Base
Contribution Percentage or (ii) the Money Purchase Maximum
Disparity Percentage determined under paragraph (d).
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<PAGE>
(3) The Base Contribution Percentage shall be no less
than three percent (3%) in either of the following
circumstances: (i) any Plan Year of a Plan for which the Plan
Agreement does not specify that the Employer will perform
annual Top-Heavy testing, or (ii) any Plan Year in which the
Plan is required to provide a minimum allocation for the Plan
Year pursuant to the Top-Heavy Plan rules of Article 14.
(4) Notwithstanding subparagraphs (1) through (3)
above, in the case of any Participant who has exceeded the
cumulative permitted disparity limit described in paragraph
(f) below, the amount shall be each Qualified Participant's
Earnings multiplied by the percentage determined in
subparagraph (2) above.
iv. The Money Purchase Maximum Disparity Percentage is equal
to the lesser of (i) 5.7% or (ii) the applicable percentage from the
following table:
If the Plan's Integration The applicable
Level is more than: But not more than: percentage is:
$0 The greater of $10,000 or 5.7%
20% of the Social Security
Wage Base
The greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Wage Base
Wage Base
80% of the Social Security Less than the Social Security 5.4%
Wage Base Wage Base
If the Plan's Integration Level is equal to the Social Security Wage
Base, the Maximum Purchase Maximum Disparity Percentage is 5.7%.
v. Annual overall permitted disparity limit. Notwithstanding
the preceding paragraphs, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or simplified
employee pension (as defined in Section 408(k) of the Code) maintained
by the Employer that provides for permitted disparity (or imputes
disparity), the Employer shall contribute for each Qualified
Participant an amount equal to the Qualified Participant's Earnings
multiplied by the lesser of (i) the Base Contribution Percentage or
(ii) the Money Purchase Maximum Disparity Percentage determined under
paragraph (d). For all purposes under the Plan, a Participant is
treated as benefitting under a plan (including this Plan) for any plan
year during which the Participant receives or is deemed to receive an
allocation under a plan in accordance with Section 1.410(b)-3(a) of the
Treasury Regulations.
vi. Cumulative Permitted Disparity Limit. Effective for Plan
Years beginning on or after January 1, 1995, the cumulative permitted
disparity limit for a Participant is 35 total cumulative permitted
disparity years. Total cumulative permitted
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<PAGE>
disparity years means the number of years credited to the Participant
for allocation or accrual purposes under the Plan, any other qualified
plan or simplified employee pension (whether or not terminated) ever
maintained by the Employer. For purposes of determining the
Participant's cumulative permitted disparity limit, all years ending in
the same calendar year are treated as the same year. If the Participant
has not benefitted under a defined benefit plan or target benefit plan
for any year beginning on or after January 1, 1994, the Participant has
no cumulative disparity limit.
d. Forfeitures. Forfeitures from Employer Contribution
Accounts shall be used, as elected by the Employer in the Plan
Agreement, either to reduce other contributions required of the
Employer, as specified in the Plan Agreement, or shall be reallocated
as additional contributions by the Employer. If the Employer elects to
use Forfeitures from Employer Contribution Accounts to reduce other
contributions required of the Employer, the amount of such Forfeitures
in a Plan Year shall be treated as a portion of such required
contribution. If the Employer elects to reallocate Forfeitures from
Employer Contribution Accounts as additional contributions, such
forfeitures shall be allocated (i) in the case of a profit sharing
plan, in accordance with Section 4.2(b) (provided that such Forfeitures
may be allocated under paragraphs (c)(1)(B), (c)(1)(C) and (c)(2)(C) of
Section 4.2 only to the extent that the limitation described therein
has not been fully utilized), and (ii) in the case of a money purchase
plan, among the Employer Contribution Accounts of all Qualified
Participants in proportion to their Earnings for the Plan Year.
e. Rollover Contributions. An Employee in an eligible class
may contribute at any time cash or other property (which is not a
collectible within the meaning of Section 408(m) of the Code)
acceptable to the Trustee representing qualified rollover amounts under
Sections 402, 403, or 408 of the Code. Amounts so contributed shall be
credited to a Rollover Account for the Participant.
f. Participant Contributions. If so specified in the Plan
Agreement, a Participant may make Participant Contributions to the Plan
in accordance with the Plan Agreement. Such contributions, together
with any matching contributions (as defined in section 401(m)(4) of the
Code) if applicable, shall be limited so as to meet the
nondiscrimination test of section 401 (m) of the Code, as set forth in
Section 5.10 of the Plan. Participant Contributions will be allocated
to the Participant Contributions Account of the contributing
Participant. All Participant Contribution Accounts will be fully vested
at all times.
g. No Deductible Employee Contributions. The Plan
Administrator shall not accept deductible employee contributions, other
than those held in a Deductible Employee Contribution Account
transferred from a predecessor plan of the Employer.
ARTICLE 5. CASH OR DEFERRED ARRANGEMENT UNDER SECTION 401(k)
(CODA)
a. Applicability; Allocations. This Article 5 applies to any
plan adopted pursuant to Plan Agreement #001, which Plan Agreement by
its terms includes a CODA permitting Elective Deferrals to be made
under the Plan. The Employer may specify in the Plan Agreement that
contributions will be made to the Plan only under the CODA, or that
contributions may be made under Section 4.2 as well as under the CODA.
Allocations to Participants' Accounts of contributions made pursuant to
this Article 5 shall be made as soon
20
<PAGE>
as administratively feasible after their receipt by the Trustee,
but in any case no later than as of the last day of the Plan Year for
which the contributions were made.
b. CODA Participation. Each Employee who has met the
eligibility requirements of Article 3 may make Elective Deferrals to
the Plan by completing and returning to the Plan Administrator a
Deferral Agreement form which provides that the Participant's cash
compensation from the Employer will be reduced by the amount indicated
in the Deferral Agreement, and that the Employer will contribute an
equivalent amount to the Trust on behalf of the Participant. The
following rules will govern Elective Deferrals:
i. Subject to the limits specified in the Plan Agreement and
set forth in Section 5.3, a Deferral Agreement may apply to any amount
or percentage of the Earnings payable to a Participant in each year,
and, if so specified by the Employer in the Plan Agreement, separately
to bonuses payable to a Participant from time to time, even if such
bonuses have otherwise been excluded from Compensation under the Plan
Agreement.
ii. In accordance with such reasonable rules as the Plan
Administrator shall specify, a Deferral Agreement will become effective
as soon as is administratively feasible after the Deferral Agreement is
returned to the Plan Administrator, and will remain effective until it
is modified or terminated. No Deferral Agreement may become effective
retroactively.
iii. A Participant may modify his Deferral Agreement by
completing and returning to the Plan Administrator a new Deferral
Agreement form as of any of the dates specified in the Plan Agreement,
and any such modification will become effective as described in
paragraph (b).
iv. A Participant may terminate his Deferral Agreement at any
time upon advance written notice to the Plan Administrator, and any
such termination will become effective as described in paragraph (b).
c. Annual Limit on Elective Deferrals. During any taxable year
of a Participant, his Elective Deferrals under the Plan and any other
qualified plan of an Affiliated Employer shall not exceed the dollar
limit contained in Section 402(g) of the Code in effect at the
beginning of the taxable year. With respect to any taxable year, a
Participant's Elective Deferrals for purposes of this Section 5.3
include all Employer contributions made on his behalf pursuant to an
election to defer under any qualified CODA as described in Section
401(k) of the Code, any simplified employee pension cash or deferred
arrangement (SARSEP) as described in Section 402(h)(1)(B) of the Code,
any eligible deferred compensation plan under Section 457 of the Code,
any plan described under Section 501(c)(18) of the Code, and any
Employer contributions made on behalf of the Participant for the
purchase of an annuity contract under Section 403(b) of the Code
pursuant to a salary reduction agreement. The limit under Section
402(g) of the Code on the amount of Elective Deferrals of a Participant
who receives a hardship withdrawal pursuant to Section 12.2 shall be
reduced, for the taxable year next following the withdrawal, by the
amount of Elective Deferrals made in the taxable year of the hardship
withdrawal.
d. Distribution of Certain Elective Deferrals. "Excess
Elective Deferrals" means those Elective Deferrals described in Section
5.3 that are includible in a Participant's gross income under Section
402(g) of the Code,
21
<PAGE>
to the extent that the Participant's aggregate elective deferrals
for a taxable year exceed the dollar limitation under that Code
Section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, whether or not they are distributed under
this Section 5.4. A Participant may designate to the Plan any Excess
Elective Deferrals made during his taxable year by notifying the
Employer on or before the following March 15 of the amount of the
Excess Elective Deferrals to be so designated. A Participant who has
Excess Elective Deferrals for a taxable year, taking into account only
his Elective Deferrals under the Plan and any other plans of the
Affiliated Employers, shall be deemed to have designated the entire
amount of such Excess Elective Deferrals.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose Account Excess
Elective Deferrals were so designated or deemed designated for the preceding
year. The income or loss allocable to Excess Elective Deferrals is the income or
loss allocable to the Participant's Elective Deferral Account for the taxable
year multiplied by a fraction, the numerator of which is the Participant's
Excess Elective Deferrals for the year and the denominator of which is the
Participant's Account balance attributable to Elective Deferrals without regard
to any income or loss occurring during the year.
To the extent that the return to a Participant of his Elective
Deferrals would reduce an Excess Amount (as defined in Section 6.5(f)), such
Excess Deferrals shall be distributed to the Participant in accordance with
Article 6.
e. Satisfaction of ADP and ACP Tests. In each Plan Year, the
Plan must satisfy the ADP test described in Section 5.6 and the ACP
test described in Section 5.10. The Employer may cause the Plan to
satisfy the ADP or ACP test or both tests for a Plan Year by any of the
following methods or by any combination of them:
i. By the distribution of Excess Contributions in accordance
with Section 5.7, or the distribution of Excess Aggregate Contributions
in accordance with Section 5.1, or both; or
ii.By recharacterization of Excess Contributions in accordance
with Section 5.9; or
iii. If the Employer has so elected in the Plan Agreement, by
making Qualified Nonelective Contributions or Qualified Matching
Contributions or both, in accordance with the Plan Agreement and
Section 5.12.
f. Actual Deferral Percentage Test Limit. The Actual Deferral
Percentage (hereinafter "ADP") for Participants who are Highly
Compensated Employees for each Plan Year and the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year must
satisfy one of the following tests:
i. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
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<PAGE>
ii. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following special rules shall apply to the computation of the ADP:
iii. "Actual Deferral Percentage" means, for a specified group
of Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in the group) of (1) the amount of
Employer contributions actually paid over to the Trust on behalf of the
Participant for the Plan Year to (2) the Participant's Earnings for the
Plan Year (or, provided that the Employer applies this method to all
Employees for a Plan Year, the Participant's Earnings for that portion
of the Plan Year during which he was eligible to participate in the
Plan). Employer contributions on behalf of any Participant shall
include: (i) his Elective Deferrals, including Excess Elective
Deferrals of Highly Compensated Employees, but excluding (A) Excess
Elective Deferrals of Non-Highly Compensated Employees that arise
solely from Elective Deferrals made under the Plan or another plan
maintained by an Affiliated Employer, and (B) Elective Deferrals that
are taken into account in the Average Contribution Percentage test
described in Section 5.10 (provided the ADP test is satisfied both with
and without exclusion of these Elective Deferrals), and excluding
Elective Deferrals returned to a Participant to reduce an Excess Amount
as defined in Section 6.5(f); and (ii) if the Employer has elected to
make Qualified Nonelective Contributions, such amount of Qualified
Nonelective Contributions, if any, as shall be necessary to enable the
Plan to satisfy the ADP test and not used to satisfy the ACP test; and
(iii) if the Employer has elected to make Qualified Matching
Contributions, such amount of Qualified Matching Contributions, if any,
as shall be necessary to enable the Plan to satisfy the ADP test and
not used to satisfy the ACP test. For purposes of computing Actual
Deferral Percentages, an Employee who would be a Participant but for
his failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
iv. In the event that the Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with the
Plan, then this Section 5.6 shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have the same Plan
Year.
v. The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if these are treated as Elective
Deferrals for purposes of the ADP test) allocated to his Accounts under
two or more CODAs described in Section 401(k) of the Code that are
maintained by the Affiliated Employers shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single CODA. If a Highly Compensated Employee participates in
two or more CODAs that have different Plan Years, all
23
<PAGE>
CODAs ending with or within the same calendar year shall be treated as
a single CODA, except that CODAs to which mandatory disaggregation
applies in accordance with regulations issued under Section 401(k) of
the Code shall be treated as separate CODAS.
vi. For purposes of determining the ADP of a Participant who
is a 5% owner or one of the ten most highly-paid Highly Compensated
Employees, the Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if these
are treated as Elective Deferrals for purposes of the ADP test) and the
Earnings of such a Participant shall include the Elective Deferrals
(and, if applicable, Qualified Nonelective Contributions and Qualified
Matching Contributions, or both) and Earnings for the Plan Year of his
Family Members (as defined in Section 414(q)(6) of the Code). Family
Members of such Highly Compensated Employees shall be disregarded as
separate employees in determining the ADP both for Participants who are
Non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees.
vii. For purposes of the ADP test, Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions must be made before the last day of the 12-month period
immediately following the Plan Year to which those contributions
relate.
viii. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in satisfying the test.
ix. The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
g. Distribution of Excess Contributions. "Excess
Contributions" means, with respect to any Plan Year, the excess of:
i. The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly Compensated Employees
for the Plan Year, over
ii. The maximum amount of Employer contributions permitted by
the ADP test, determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their ADPS, beginning with the
highest of such percentages.
Notwithstanding any other provision of the Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed no
later than the last day of each Plan Year to Participants to whose Accounts
Excess Contributions were allocated for the preceding Plan Year. The income or
loss allocable to Excess Contributions is the income or loss allocable to the
Participant's Elective Deferral Account (and, if applicable, his Qualified
Nonelective Account or Qualified Matching Account or both) for the Plan Year
multiplied by a fraction, the numerator of which is the Participant's Excess
Contributions for the year and the denominator is the Participant's account
balance attributable to Elective Deferrals (and Qualified nonelective
Contributions or Qualified Matching Contributions, or both, if any of
24
<PAGE>
these are included in the ADP test) without regard to any income or loss
occurring during the Plan Year. If such excess amounts are distributed more than
2 1/2 months after the last day of the Plan Year in which the excess amounts
arose, an excise tax equal to 10% of the excess amounts will be imposed on the
Employer maintaining the Plan. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each of them. Excess Contributions shall be
allocated to a Participant who is a family member subject to the family member
aggregation rules of Section 414(q)(6) of the Code in the proportion that the
Participant's Elective Deferrals (and other amounts treated as his Elective
Deferrals) bear to the combined Elective Deferrals (and other amounts treated as
Elective Deferrals) of all of the Participants aggregated to determine his
family members' combined ADP. Excess Contributions shall be treated as Annual
Additions under the Plan.
Excess Contributions shall be distributed from the Participant's
Elective Deferral Account and Qualified Matching Account (if applicable) in
proportion to the Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's Qualified Nonelective
Account only to the extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral Account and Qualified Matching Account.
h. Matching Contributions. If so specified in the Plan Agreement, the
Employer will make Matching Contributions to the Plan in accordance with the
Plan Agreement, but no Matching Contribution shall be made with respect to an
Elective Deferral or a Participant Contribution that is returned to a
Participant because it represents an Excess Elective Deferral, an Excess
Contribution, an Excess Aggregate Contribution or an Excess Amount (as defined
in Section 6.5(f)); and if a Matching Contribution has nevertheless been made
with respect to such an Elective Deferral or Participant Contribution, the
Matching Contribution shall be forfeited, notwithstanding any other provision of
the Plan. Employer Matching Contributions will be allocated among the Employer
Matching Accounts of Qualified Participants in proportion to their Elective
Deferrals or Participant Contributions, if applicable, as specified in the Plan
Agreement. Employer Matching Accounts shall become vested according to the
vesting schedule specified in the Plan Agreement, but regardless of that
schedule shall be fully vested upon the Participant's Retirement (or, if
earlier, his fulfillment of the requirements for early retirement, if any, or
attainment of the normal retirement age specified in the Plan Agreement), his
death during employment with an Affiliated Employer, and in accordance with
Section 18.3. Forfeitures of Employer Matching Contributions, other than Excess
Aggregate Contributions, shall be made in accordance with Section 8.3.
i. Recharacterization of Excess Contributions. Provided that
the Plan Agreement permits all Participants to make Participant
Contributions, the Employer may treat a Participant's Excess
Contributions as an amount distributed to the Participant and then
contributed by the Participant to the Plan as a Participant
Contribution. Recharacterized amounts will remain nonforfeitable and
subject to the same distribution requirements as Elective Deferrals.
Amounts may not be recharacterized by a Highly Compensated Employee to
the extent that a recharacterized amount in combination with other
Participant Contributions made by that Employee would exceed any stated
limit under the Plan on Participant Contributions. Recharacterization
must occur no later than two and one-half months after the last day of
the Plan Year in which the Excess Contributions arose, and is deemed to
occur no earlier than the date the last Highly Compensated Employee is
informed in writing by the Employer of the amount recharacterized and
the consequences thereof. Recharacterized
25
<PAGE>
amounts will be taxable to the Participant for his tax year in which
the Participant would have received them in cash.
j. Average Contribution Percentage Test Limit and Aggregate
Limit. The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year
and the ACP for Participants who are Non- Highly Compensated Employees
for the same Plan Year must satisfy one of the following tests:
i. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
ii. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants
who are Non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the ACP for Participants who are
Highly Compensated Employees does not exceed the ACP for Participants
who are Non-Highly Compensated Employees by more than two percentage
points.
The following rules shall apply to the computation of the ACP:
iii. "Average Contribution Percentage" means the average of
the Contribution Percentages of the Eligible Participants in a group.
iv. "Contribution Percentage" means the ratio (expressed as a
percentage) of a Participant's Contribution Percentage Amounts to the
Participant's Earnings for the Plan Year (or, provided that the
Employer applies this method to all Employees for a Plan Year, the
Participant's Earnings for that portion of the Plan Year during which
he was eligible to participate in the Plan).
v. "Contribution Percentage Amounts" means the sum of the
Participant Contributions, Employer Matching Contributions, and
Qualified Matching Contributions (to the extent not taken into account
for purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts
shall include Forfeitures of Excess Aggregate Contributions or Employer
Matching Contributions allocated to the Participant's Account, taken
into account in the year in which the allocation is made. If the
Employer has elected in the Plan Agreement to make Qualified
Nonelective Contributions, such amount of Qualified Nonelective
Contributions, if any, as shall be necessary to enable the Plan to
satisfy the ACP test and not used to satisfy the ADP test shall be
included in the Contribution Percentage Amounts. Elective Deferrals
shall also be included in the Contribution Percentage Amounts to the
extent, if any, needed to enable the Plan to satisfy the ACP test, so
long as the ADP test is met before the Elective Deferrals are used in
the ACP test, and continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
vi. "Eligible Participant" means any Employee who is eligible
to make a Participant Contribution, or an Elective Deferral, if
Elective Deferrals are taken into
26
<PAGE>
account in the calculation of the Contribution Percentage, or to
receive an Employer Matching Contribution (or a Forfeiture thereof) or
a Qualified Matching Contribution.
vii. "Aggregate Limit" means the sum of (i) 125% of the
greater of the ADP of the Non-Highly Compensated Employees for the Plan
Year, or the ACP of Non- Highly Compensated Employees under the Plan
subject to Code Section 401(m) for the Plan Year beginning with or
within the Plan Year of the CODA, and (ii) the lesser of 200% of, or
two plus, the lesser of the ADP or ACP. "Lesser" is substituted for
"greater" in clause (i) of the preceding sentence, and "greater" is
substituted for "lesser" after the phrase "two plus the" in clause (ii)
of the preceding sentence, if that formulation will result in a larger
Aggregate Limit.
viii. If one or more Highly Compensated Employees participate
in both a CODA and a plan subject to the ACP test maintained by an
Affiliated Employer, and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ACP of those Highly Compensated Employees who
also participate in a CODA will be reduced (beginning with the Highly
Compensated Employee whose ACP is the highest) so that the Aggregate
Limit is not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amount is reduced shall be treated
as an Excess Aggregate Contribution. In determining the Aggregate
Limit, the ADP and ACP of Highly Compensated Employees are determined
after any corrections required to meet the ADP and ACP tests. The
Aggregate Limit will be considered satisfied if both the ADP and ACP of
the Highly Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the Non-Highly Compensated Employees.
ix. For purposes of this section, the Contribution Percentage
for any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his
account under two or more plans described in Section 401 (a) of the
Code, or CODAs described in Section, 401(k) of the Code, that are
maintained by an Affiliated Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under each plan.
If a Highly Compensated Employee participates in two or more CODAs that
have different plan years, all CODAs ending with or within the same
calendar year shall be treated as a single CODA, except that CODAs to
which mandatory disaggregation applies in accordance with regulations
issued under Section 401(k) of the Code shall be treated as separate
CODAs.
x. In the event that the Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with the
Plan, then this Section 5. 10 shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a single
plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only if they
have the same Plan Year.
xi. For purposes of determining the Contribution Percentage of
a Participant who is a 5% owner or one of the ten most highly-paid
Highly Compensated Employers, the Contribution Percentage Amounts and
Earnings of the Participant shall include the Contribution Percentage
Amounts and Earnings for the Plan Year of Family Members (as defined in
Section 414(q)(6) of the Code). Family Members of such
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Highly Compensated Employees shall be disregarded as separate employees
in determining the Contribution Percentage both for Participants who
are Non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
xii. For purposes of the ACP test, Employer Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions will be considered made for a Plan Year if
made no later than the end of the 12-month period beginning on the day
after the close of the Plan Year.
xiii. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or both,
used in the ACP test.
xiv. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
k. Distribution of Excess Aggregate Contributions.
Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited if forfeitable, or if not forfeitable, distributed
no later than the last day of each Plan Year to Participants to whose
Accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. The income or loss allocable to Excess Aggregate
Contributions is the income or loss allocable to the Participant's
Employer Matching Contribution Account, Qualified Matching Contribution
Account (if any, and if all amounts therein are not used in the ADP
test), and, if applicable, Qualified Nonelective Account, Participant
Contribution Account and Elective Deferral Account for the Plan Year,
multiplied by a fraction, the numerator of which is the Participant's
Excess Aggregate Contributions for the year and the denominator of
which is the Participant's account balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during the Plan Year. Excess Aggregate Contributions shall be
allocated to a Participant who is subject to the family member
aggregation rules of Section 414(q)(6) of the Code in the proportion
that the Participant's Employer Matching Contributions (and other
amounts treated as his Employer Matching Contributions) bear to the
combined Employer Matching Contributions (and other amounts treated as
Employer Matching Contributions) of all of the Participants aggregated
to determine its family members' combined ACP. If excess amounts
attributable to Excess Aggregate Contributions are distributed more
than 21/2months after the last day of the Plan Year in which such
excess amounts arose, an excise tax equal to 10% of the excess amounts
will be imposed on the Employer maintaining the Plan. Excess Aggregate
Contributions shall be treated as Annual Additions under the Plan.
Excess Aggregate Contributions shall be forfeited if forfeitable, or
distributed on a pro-rata basis from the Participant's Participant Contribution
Account, Employer Matching Account, and Qualified Matching Account (and, if
applicable, the Participant's Qualified Nonelective Account or Elective Deferral
Account, or both).
Excess Aggregate Contributions means, with respect to any Plan Year,
the excess of:
i. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage and
actually made on behalf of Highly Compensated Employees for the Plan
Year, over
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ii. The maximum Contribution Percentage Amounts permitted by
the ACP test and the Aggregate Limit (determined by reducing
contributions made on behalf of Highly Compensated Employees in order
of their Contribution Percentages, beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess
Elective Deferrals pursuant to Section 5.4, and then determining Excess
Contributions pursuant to Section 5.7.
l. Qualified Nonelective Contributions; Qualified Matching
Contributions. An Employer shall make Qualified Nonelective
Contributions and/or Qualified Matching Contributions as provided by
the Employer in the Plan Agreement. Qualified Nonelective Contributions
and Qualified Matching Contributions shall be allocated to the
Qualified Nonelective Contribution Accounts and Qualified Matching
Accounts, respectively, of Participants as provided by the Employer in
the Plan Agreement.
m. Restriction on Distributions. Except as provided in
Sections 5.4, 5.7 and 5.1, no distribution may be made from a
Participant's Elective Deferral Account, Qualified Nonelective
Contribution Account or Qualified Matching Account until the occurrence
of one of the following events:
i. The Participant's Disability, death or termination of
employment with the Affiliated Employers;
ii. Termination of the Plan without the establishment of
another defined contribution plan other than an employee stock
ownership plan as defined in Section 4975(e) or Section 409 of the
Code, or a simplified employee pension plan as defined in Section
408(k) of the Code;
iii. The Participant's attainment of age 59 1/2 (if the
Employer has elected in the Plan Agreement to permit such
distributions); or
iv. In the case of an Employer that is a corporation, the
disposition by the Employer to an unrelated entity of (i) substantially
all of the assets (within the meaning of Section 409(d)(2) of the Code)
used in a trade or business of the Employer, if the Employer continues
to maintain the Plan after the disposition, but only with respect to
Employees who continue employment with the entity acquiring such
assets; or (ii) the Employer's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code), if the Employer continues to
maintain the Plan after the disposition, but only with respect to
Employees who continue employment with such subsidiary.
In addition, if the Employer has elected in the Plan Agreement to
permit such distributions, a distribution may be made from a Participant's
Elective Deferral Account in the event of his financial hardship as described in
Section 12.2. All distributions upon any of the events listed above are subject
to the conditions of Article 10, Joint and Survivor Annuity Requirements. In
addition, distributions made after March 31, 1988, on account of an event
described in subsection (b) or (d) above must be made in a lump sum.
n. Forfeitures of Employer Matching Contributions. Forfeitures
from Employer Matching Accounts shall be used, as elected by the
Employer in the Plan Agreement, either
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to reduce other contributions required of the Employer, as
specified in the Plan Agreement, or shall be reallocated as additional
Employer Matching Contributions or Profit Sharing Contributions as
specified in the Plan Agreement. If the Employer elects to use
Forfeitures from Employer Matching Accounts to reduce other
contributions required of the Employer, the amount of such Forfeitures
in a Plan Year shall be treated as a portion of such contribution. If
the Employer elects to reallocate Forfeitures from Employer Matching
Contributions as additional Employer Matching Contributions, such
Forfeitures shall be allocated in accordance with Section 5.8. If the
Employer elects to reallocate Forfeitures from Employer Matching
Accounts as additional Profit Sharing Contributions, such Forfeitures
shall be allocated in accordance with Section 4.2(b) (provided that
such Forfeitures may be allocated under paragraphs (c)(1)(B), (c)(1)(C)
and (c)(2)(C) of Section 4.2 only to the extent that the limitation
described therein has not been fully utilized). Forfeitures of Excess
Aggregate Contributions determined under Section 5.10 that are Employer
Matching Contributions shall be used as provided above in this Section
5.14.
o. Special Effective Dates. If the Plan is adopted as an
amendment of an existing plan, the provisions of Sections 5.3 and
Section 5.7 through 5.10 are effective as of the first day of the first
Plan Year beginning after December 31, 1986.
ARTICLE 6. LIMITATIONS ON ALLOCATIONS
a. No Additional Plan. If the Participant does not participate
in and has never participated in another qualified plan, or a welfare
benefit and (as defined in Section 419(e) of the Code), or an
individual medical account (as defined in Section 415(l)(2) of the
Code), or a simplified employee pension (as defined in Section 408(k)
of the Code), which provides an Annual Addition as defined in Section
6.5(a), maintained by an Affiliated Employer:
i. The amount of Annual Additions (as defined in Section
6.5(a)) which may be credited to the Participant's Accounts for any
Limitation Year will not exceed the lesser of the Maximum Annual
Additions or any other limitation contained in this Plan. If the
Employer contribution that would otherwise be contributed or allocated
to the Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Annual Additions, the amount
contributed or allocated will be reduced so that the Annual Additions
for the Limitation Year will equal the Maximum Annual Additions.
ii. Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the Participant on the basis of a
reasonable estimation of the Participant's Section 415 Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
iii. As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Annual Additions for the Limitation
Year will be determined on the basis of the Participant's actual
Section 415 Compensation for the Limitation Year.
iv. If pursuant to paragraph (c), or as a result of the
reallocation of Forfeitures, or as a result of a reasonable error in
determining the amount of Elective Deferrals that may be made by a
Participant, the Annual Additions exceed the Maximum Annual Additions,
the Excess Amount will be disposed of as follows:
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(1) Any Participant Contributions and Elective
Deferrals, to the extent they would reduce the Excess Amount,
will be returned to the Participant.
(2) If after the application of (1) above an Excess
Amount still exists, and the Participant is covered by the
Plan at the end of the Limitation Year, the Excess Amount in
the Participant's Accounts will be used to reduce Employer
contributions (including any allocation of Forfeitures) for
such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(3) If after the application of (1) above an Excess
Amount still exists, and the Participant is not covered by the
Plan at the end of a Limitation Year, the Excess Amount will
be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
contributions (including allocation of any Forfeitures) for
all remaining Participants in the next Limitation Year, and
each succeeding Limitation Year if necessary.
(4) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section 6.1(d), it
will participate in the allocation of investment gains and
losses. If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or any Employee
contributions may be made to the Plan for that Limitation
Year. Excess amounts may not be distributed to Participants or
former Participants.
b. Additional Master or Prototype Plan. If in addition to this
Plan a Participant is covered under another qualified Master or
Prototype defined contribution plan or a welfare benefit fund (as
defined in Section 419(e) of the Code), or an individual medical
account (as defined in Section 415(l)(2) of the Code), or a simplified
employee pension (as defined in Section 408(k) of the Code), which
provides an Annual Addition as defined in Section 6.5(a), maintained by
an Affiliated Employer during any Limitation Year:
i. The Annual Additions which may be credited to a
Participant's Accounts under this Plan for any such Limitation Year
will not exceed the Maximum Annual Additions reduced by the Annual
Additions credited to a Participant's accounts under the other defined
contribution plans, welfare benefit funds, individual medical accounts
and simplified employee pensions for the same Limitation Year. If the
Annual Additions with respect to the Participant under other defined
contribution plans, welfare benefit funds, individual medical accounts
and simplified employee pensions maintained by an Affiliated Employer
are less than the Maximum Annual Additions, and the Employer
contribution that would otherwise be contributed or allocated to the
Participant's Accounts under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount
contributed or allocated to this Plan will be reduced so that the
Annual Additions under all such plans and funds for the Plan Year will
equal the Maximum Annual Additions. If the Annual Additions with
respect to the Participant under such other defined contribution plans,
welfare benefit funds, individual medical accounts and simplified
employee pensions in the aggregate are equal to or greater than the
Maximum Annual Additions, no amount will be contributed or allocated to
the Participant's Accounts under this Plan for the Limitation Year.
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ii. Before determining a Participant's actual Section 415
Compensation for a Limitation Year, the Employer may determine the
Maximum Annual Additions for the Participant in the manner described in
Section 6.1(b).
iii. As soon as is administratively feasible after the end of
the Plan Year, the Maximum Annual Additions for the Plan Year will be
determined on the basis of the Participant's actual Section 415
Compensation for the Plan Year.
iv. If, pursuant to Section 6.2(c) or as a result of the
allocation of Forfeitures, or of a reasonable error in determining the
amount of Elective Deferrals that may be made by him, a Participant's
Annual Additions under this Plan and such other plans would result in
an Excess Amount for a Limitation Year, the Excess Amount will be
deemed to consist of the Annual Additions last allocated under any
qualified Master or Prototype defined contribution plan, except that
Annual Additions to any simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a welfare
benefit fund or individual medical account, regardless of the actual
allocation date.
v. If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the
product of X and Y, where (X) is the total Excess Amount allocated as
of such date, and (Y) is the ratio of: (1) the Annual Additions
allocated to the Participant for the Limitation Year as of such date
under this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this and all
the other qualified Master or Prototype defined contribution plans.
vi. Any Excess Amount attributed to this Plan will be disposed
of in the manner described in Section 6.1(d).
c. Additional Non-Master or Non-Prototype Plan. If the
Participant is covered under another qualified defined contribution
plan maintained by an Affiliated Employer which is not a Master or
Prototype plan, Annual Additions which may be credited to the
Participant's Accounts under this Plan for any Limitation Year will be
limited in accordance with Section 6.2 as though the other plan were a
Master or Prototype plan, unless the Employer provides other
limitations in the Plan Agreement.
d. Additional Defined Benefit Plan. If an Affiliated Employer
maintains, or at any time maintained, a qualified defined benefit plan
covering any Participant in this Plan, the sum of the Participant's
Defined Benefit Plan Fraction and Defined Contribution Plan Fraction
will not exceed 1.0 in any Limitation Year. The Annual Additions which
may be credited to the Participant's Accounts under this Plan for any
Limitation Year will be limited in accordance with the Plan Agreement.
e. Definitions.
i. Annual Additions means the sum of the following amounts
credited to a Participant's accounts hereunder or otherwise for the
Limitation Year:
(1) Employer contributions;
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(2) For any Limitation Year beginning after
December 31, 1986, Participant Contributions;
(3) Forfeitures;
(4) Amounts allocated after March 31, 1984, to any
individual medical account, as defined in Section 415(l)(2) of
the Code, which is part of a pension or annuity plan
maintained by an Affiliated Employer;
(5) Amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after
such date, which are attributable to postretirement medical
benefits allocated to the separate account of a key Employee,
as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund as defined in Section 419(e) of the Code,
maintained by an Affiliated Employer;
(6) In a Plan that includes a CODA, Excess Elective
Deferrals, Excess Contributions (including recharacterized
Elective Deferrals) and Excess Aggregate Contributions; and
(7) Allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under Sections 6.1(d) or
6.2(e) in the Limitation Year to reduce Employer contributions will be
considered Annual Additions for such Limitation Year. Any rollover contribution
will not be considered an Annual Addition.
ii. Section 415 Compensation means, for a Self-Employed
Individual, his Earned Income; and for any other Participant, his "Form
W-2 earnings" as defined in Section 2.8, if the Employer has elected in
item 7 of the Plan Agreement a definition of Compensation based on
"Form W-2 earnings"; or if the Employer has not so elected, his wages,
salaries, and fees for professional services and other amounts received
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense allowances
under a nonaccountable plan as described in Income Tax Regulations
Section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the Participant's
gross income for the taxable year in which contributed, or
Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred
compensations;
(2) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or
property) held by the Participant either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
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(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(4) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or
not under a salary reduction agreement) towards the purchase
of an annuity contract described in Section 403(b) of the Code
(whether or not the contributions are actually excludable from
the gross income of the Participant).
For purposes of applying the limitations of this Article 6, Section 415
Compensation for a Limitation Year is the Section 415 Compensation
actually paid or made available during such Limitation Year.
iii. Defined Benefit Fraction means a fraction, the numerator
of which is the sum of the Participant's Projected Annual Benefits
under all the defined benefit plans (whether or not terminated)
maintained by the Affiliated Employers, and the denominator of which is
the lesser of 125% of the dollar limitation in effect for the
Limitation Year under Sections 415(b) and (d) of the Code, or 140% of
the Participant's Highest Average Compensation including any
adjustments under Section 415(b) of the Code. Notwithstanding the
foregoing, if the Participant was a Participant as of the first day of
the first Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by an Affiliated Employer which
were in existence on May 6, 1986, the denominator of this fraction will
not be less than 125% of the sum of the annual benefits under such
plans which the Participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any
change in the terms and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Section
415 of the Code for all Limitation Years beginning before January 1,
1987.
iv. Defined Contribution Dollar Limitation means $30,000 or if
greater, one-fourth of the defined benefit dollar limitation set forth
in Section 415(b)(1) of the Code as in effect for the Limitation Year.
v. Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution plans
(whether or not terminated) maintained by Affiliated Employers for the
current and all prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible Employee contributions
to all defined benefit plans, whether or not terminated, maintained by
the Affiliated Employers, and the Annual Additions attributable to all
welfare benefit funds, as defined in Section 419(e) of the Code, and
individual medical accounts, as defined in Section 415(l)(2) of the
Code), and the denominator of which is the sum of the Maximum Annual
Additions for the current and all prior Limitation Years of service
with the Affiliated Employers (regardless of whether a defined
contribution plan was maintained by any Affiliated Employer). The
Maximum Annual Additions in any Plan Year is the lesser of 125% of the
dollar limitation determined under Sections 415(b) and (d) of the Code
in effect under Section 415(c)(1)(A) of the Code, or 35% of the
Participant's Section 415 Compensation for such year. If the Employee
was a Participant as of the end of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more
defined contribution plans maintained by an Affiliated Employer which
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<PAGE>
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to product of the excess of the
sum of the fractions over 1.0, multiplied by the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan after May 5, 1986, but using the Section 415
limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to treat
100% of nondeductible Employee contributions as Annual Additions.
vi. Excess Amount means, with respect to any Participant, the
amount by which Annual Additions exceed the Maximum Annual Additions.
vii. Highest Average Compensation means the average
compensation for the three consecutive Years of Service with the
Employer that produces the highest average. For this purpose, a Year of
Service with the Employer is determined based on the Plan Year.
viii. Limitation Year means the Plan Year. All qualified plans
maintained by the Employer must use the same Limitation Year. If the
Limitation Year is amended to a different period of 12 consecutive
months, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
ix. Master or Prototype plan means a plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
x. Maximum Annual Additions, which is the maximum annual
addition that may be contributed or allocated to a Participant's
account under the plan for any Limitation Year, means an amount not
exceeding the lesser of (a) the Defined Contribution Dollar Limitation
or (b) 25% of the Participant's Section 415 Compensation for the
Limitation Year. The compensation limitation referred to in (b) shall
not apply to any contribution for medical benefits (within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code) which is otherwise
treated as an Annual Addition under Section 415(l)(1) or Section
419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different period of 12 consecutive
months, the Maximum Annual Additions will not exceed the Defined
Contribution Dollar Limitation multiplied by the following fraction:
number of months in the
short Limitation Year
12
xi. Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent Straight Life Annuity if
such benefit is expressed in a form
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other than a Straight Life Annuity or Qualified Joint and Survivor
Annuity) to which the Participant would be entitled under the terms of
the Plan assuming:
(1) The Participant will continue employment until
normal retirement age under the Plan (or current age, if
later), and
(2) The Participant's Section 415 Compensation for
the current Limitation Year and all other relevant factors
used to determine benefits under the plan will remain constant
for all future Limitation Years.
xii. Straight Life Annuity means an annuity payable in equal
installments for the life of the Participant that terminates upon the
Participant's death.
ARTICLE 7. ELIGIBILITY FOR DISTRIBUTION OF BENEFITS
a. Retirement. After his Retirement, the amount credited to a
Participant's Accounts will be distributed to him in accordance with
Article 9. The termination of a Participant's employment with the
Affiliated Employers after he has (i) attained the normal retirement
age specified in the Plan Agreement, (ii) fulfilled the requirements
for early retirement (if any) specified in the Plan Agreement, or (iii)
become Disabled will constitute his Retirement. Upon a Participant's
Retirement (or, if earlier, his attainment of the normal retirement age
specified in the Plan Agreement or fulfillment of the requirements for
early retirement, if any, specified in the Plan Agreement) the
Participant's Accounts shall become fully vested, regardless of the
vesting schedule specified by the Employer in the Plan Agreement. A
Participant who separates from service with any vested balance in his
Accounts, after satisfying the service requirements for early
retirement (if any is specified in the Plan Agreement) but before
satisfying the age requirement for early retirement (if any is
specified in the Plan Agreement), shall be entitled to a fully vested
early retirement benefit upon his satisfaction of such age requirement.
b. Death. If a Participant dies before the distribution of his
Accounts has been completed, his Beneficiary will be entitled to
distribution of benefits in accordance with Article 9. A Participant's
Accounts will become fully vested upon his death before termination of
his employment with the Affiliated Employers, regardless of the vesting
schedule specified by the Employer in the Plan Agreement.
A Participant may designate a Beneficiary by completing and returning
to the Plan Administrator a form provided for this purpose. The form most
recently completed and returned to the Plan Administrator before the
Participant's death shall supersede any earlier form. If a Participant has not
designated any Beneficiary before his death, or if no Beneficiary so designated
survives the Participant, his Beneficiary shall be his surviving spouse, or if
there is no surviving spouse, his estate. A married Participant may designate a
Beneficiary other than his spouse only if his spouse consents in writing to the
designation, and the spouse's consent acknowledges the effect of the consent and
is witnessed by a notary public or a representative of the Plan. The beneficiary
or beneficiaries named in the designation to which the spouse has so consented
may not be changed without further written spousal consent unless the terms of
the spouse's original written consent expressly permit such a change, and
acknowledge that the spouse voluntarily relinquishes the right to limit the
consent to a specific beneficiary. The marriage of a Participant shall nullify
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<PAGE>
any designation of a beneficiary previously executed by the Participant. If it
is established to the satisfaction of the Plan Administrator that the
Participant has no spouse or that the spouse cannot be located, the requirement
of spousal consent shall not apply. Any spousal consent, or establishment that
spousal consent cannot be obtained, shall apply only to the particular spouse
involved.
c. Other Termination of Employment. A Participant whose
employment terminates for any reason other than his Retirement or death
will be entitled to distribution, in accordance with Article 9, of
benefits equal to the amount of the vested balance of his Accounts as
determined under Article 8.
ARTICLE 8. VESTING
a. Vested Balance. The vested balance of a Participant's Accounts will
be determined as follows:
i. General Rule. A Participant's Participant Contribution
Account and Rollover Account shall be fully vested at all times. The
vested portion of his Employer Contribution Account shall be equal to
the percentage that corresponds, in the vesting schedule specified in
the Plan Agreement, to the number of Years of Service credited to the
Participant as of the end of the Year of Service in which his
employment terminates.
ii. Special Rules for CODA. In a Plan that includes a CODA, a
Participant's Elective Deferral Account, Qualified Nonelective Account,
and Qualified Matching Account shall be fully vested at all times. The
vested portion of his Employer Matching Account shall be equal to the
percentage that corresponds, in the vesting schedule specified in the
Plan Agreement, to the number of Years of Service credited to the
Participant as of the end of the Year of Service in which his
employment terminates.
iii. Retirement. All of a Participant's Accounts shall become
fully vested upon his Retirement or his earlier attainment of early
retirement age (if any) or the normal retirement age elected by the
Employer in the Plan Agreement.
For so long as a former Employee does not receive a distribution (or a
deemed distribution) of the vested portion of his Accounts, the undistributed
portion shall be held in a separate account which shall be invested pursuant to
Section 13.3 and shall share in earnings and losses of the Trust Fund pursuant
to Section 13.4 in the same manner as the Accounts of active Participants.
b. Vesting of Accounts of Returned Former Employees. The
following rules apply in determining the vested portion of the Accounts
of a Participant who incurs one or more consecutive One-Year Vesting
Breaks and then returns to employment with an Affiliated Employer:
i. If the Participant incurred fewer than five consecutive
One-Year Vesting Breaks, then all of his Years of Service will be taken
into account in determining the vested portion of his Accounts, as soon
as he has completed one Year of Service following his return to
employment.
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ii. If the Participant incurred five or more consecutive
One-Year Vesting Breaks, then:
(1) no Year of Service completed after his return to
employment will be taken into account in determining the
vested portion of his Accounts as of any time before he
incurred the first One-Year Vesting Break;
(2) years of Service completed before he incurred the
first One-Year Vesting Break will not be taken into account in
determining the vested portion of his Accounts as of any time
after his return to employment (i) unless some portion of his
Employer Contribution Account or Employer Matching Account had
become vested before he incurred the first One-Year Vesting
Break, and (ii) until he has completed one Year of Service
following his return to employment; and
(3) separate sub-accounts will be maintained for the
Participant's pre- break and post-break Employer Contribution
Account and Employer Matching Account, until both sub-accounts
become fully vested. Both sub-accounts will share in the
earnings and losses of the Trust Fund.
c. Forfeiture of Non-Vested Amounts. The portion of a former
Employee's Accounts that has not become vested under Section 8.1 shall
become a Forfeiture in accordance with the following rules, and shall
be reallocated in accordance with Section 4.4 or Section 5.14
(whichever applies) no later than the end of the Plan Year in which it
becomes a Forfeiture.
i. If Distribution Is Made. If any or all of the vested
portion of a Participant's Accounts is distributed in accordance with
Section 9.1 or 9.2 before the Participant incurs five consecutive
One-Year Vesting Breaks, the nonvested portion of his Accounts shall
become a Forfeiture in the Plan Year in which the distribution occurs.
For purposes of this Section 8.3, if the value of the vested portion of
a Participant's Accounts is zero, the Participant shall be deemed to
have received a distribution of the entire vested balance of his
Accounts on the day his employment terminates. If the Participant
elects to have distributed less than the entire vested portion of his
Employer Contribution Account or Employer Matching Accounts, the part
of the nonvested portion that will become a Forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is
the amount of the distribution and the denominator of which is the
total value of the entire vested portion of such Accounts.
ii. Right of Repayment. If a Participant who receives a
distribution pursuant to paragraph (a) returns to employment with an
Affiliated Employer, the balance of his Employer Contribution Account
and Employer Matching Account will be restored to the amount of such
balance on the date of distribution, if he repays to the Plan the full
amount of the distribution, before the earlier of (i) the fifth
anniversary of his return to employment or (ii) the date he incurs five
consecutive One-Year Vesting Breaks following the date of distribution.
If an Employee is deemed to receive a distribution pursuant to this
Section 8.3, and he resumes employment covered under this Plan before
the date he incurs five consecutive One-Year Vesting Breaks, upon his
reemployment the Employer-derived account balance of the Employee will
be restored to the amount on the date of such deemed distribution. Such
restoration will be made,
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first, from the amount of any Forfeitures available for reallocation as
of the last day of the Plan Year in which repayment is made, to the
extent thereof; and to the extent that Forfeitures are not available or
are insufficient to restore the balance, from contributions made by the
Employer pursuant to Section 4.1 (e).
iii. If No Distribution Is Made. If no distribution (nor
deemed distribution) is made to a Participant before he incurs five
consecutive One-Year Vesting Breaks, the nonvested portion of his
Accounts shall become a Forfeiture at the end of the Plan Year that
constitutes his fifth consecutive One-Year Vesting Break.
iv. Adjustment of Accounts. Before a Forfeiture is incurred, a
Participant's Accounts shall share in earnings and losses of the Trust
Fund pursuant to Section 13.4 in the same manner as the Accounts of
active Participants.
v. Accumulated Deductible Contributions. For Plan Years
beginning before January 1, 1989, a Participant's vested Account
balance shall not include accumulated deductible contributions within
the meaning of Section 72(o)(5)(B) of the Code.
d. Special Rule in the Event of a Withdrawal. If a withdrawal
pursuant to Section 12.2, 12.3 or 12.4 is made from a Participant's
Employer Contribution Account or Employer Matching Account before the
Account is fully vested, and the Participant may increase the vested
percentage in the Account, then a separate account will be established
at the time of the withdrawal, and at any relevant time after the
withdrawal the vested portion of the separate account will be equal to
the amount "X" determined by the following formula:
X = P(AB + D) - D
For purposes of the formula, P is the Participant's vested percentage
at the relevant time, AB is the account balance at the relevant time,
and D is the amount of the withdrawal.
e. Vesting Election. If the Plan is amended to change any
vesting schedule, or is amended in any way that directly or indirectly
affects the computation of a Participant's vested percentage, each
Participant who has completed not less than three Years of Service may
elect, within a reasonable period after the adoption of the amendment
or change, in a writing filed with the Employer to have his vested
percentage computed under the Plan without regard to such amendment.
For a Participant who is not credited with at least one Hour of Service
in a Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "five Years of Service" for
"three Years of Service." The period during which the election may be
made shall commence with the date the amendment is adopted, or deemed
to be made, and shall end on the latest of (a) 60 days after the
amendment is adopted; (b) 60 days after the amendment becomes
effective; or (c) 60 days after the Participant is issued written
notice of the amendment by the Employer.
ARTICLE 9. PAYMENT OF BENEFITS
a. Distribution of Accounts. A Participant or Beneficiary who
has become eligible for-a distribution of benefits pursuant to Article
7 may elect to receive such benefits at any time, subject to the terms
and conditions of this Article 9, Article 10 and Article 11. Unless a
Participant or Beneficiary
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elects otherwise, distribution of benefits will begin no later than
the 60th day after the end of the Plan Year in which the latest of the
following events occurs:
i. The Participant attains age 65 (or if earlier, the normal
retirement age specified by the Employer in the Plan Agreement); or
ii. The tenth anniversary of the year in which the Participant
commenced participation in the Plan; or
iii. The Participant's employment with the Affiliated
Employers terminates.
A Beneficiary who is the surviving spouse of a Participant may elect to have
distribution of benefits begin within the 90-day period following the
Participant's death.
For purposes of this Section 9. 1, the failure of a Participant (and
his spouse, if spousal consent is required pursuant to Article 10) to consent to
a distribution while a benefit is "immediately distributable" within the meaning
of Section 9.2 shall be considered an election to defer commencement of payment.
If the Employer has so specified in the Plan Agreement, the vested portion of a
Participant's Accounts will be distributed in a lump sum in cash no later than
60 days after the end of the Plan Year in which his employment terminates, if at
the time the Participant first became entitled to a distribution the value of
such vested portion derived from Employer and Employee contributions does not
exceed $3,500. Commencement of distributions in any case shall be subject to
Section 9.4.
b. Restriction on Immediate Distributions. A Participant's
account balance is considered "immediately distributable" if any part
of the account balance could be distributed to the Participant (or his
surviving spouse) before the Participant attains, or would have
attained if not deceased, the later of the normal retirement age
specified in the Plan Agreement or age 62.
i. If the value of a Participant's vested account balance
derived from Employer and Employee contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the account
balance is immediately distributable, the Participant and his spouse
(or where either the Participant or the spouse has died), the survivor
must consent to any such distribution, unless an exception described in
paragraph (b) applies. The consent of the Participant and his spouse
shall be obtained in writing within the 90-day period ending on the
annuity starting date, which is the first day of the first period for
which an amount is paid as an annuity (or any other form). The Plan
Administrator shall notify the Participant and the spouse, no less than
30 days and no more than 90 days before the annuity starting date, of
the right to defer any distribution until the Participant's account
balance is no longer immediately distributable. Such notification shall
include a general description of the material features of the optional
forms of benefit available under the Plan and an explanation of their
relative values, in a manner that would satisfy the notice requirements
of Section 417(a)(3) of the Code. If a distribution is one to which
Sections 401(a)(11) and 417 of the Code do not apply, such distribution
may commence less than 30 days after the required notification is
given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to
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consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution
option); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
ii. Notwithstanding paragraph (a), only the Participant need
consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the account balance is
immediately distributable. Furthermore, if payment in the form of a
Qualified Joint and Survivor Annuity is not required with respect to
the Participant pursuant to Section 10.1 (b) of the Plan, only the
Participant need consent to the distribution of an account balance that
is immediately distributable. Neither the consent of the Participant
nor the spouse shall be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of the Plan, if the Plan does not offer an
annuity option purchased from a commercial provider), and no Affiliated
Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Code), a Participant's account balance shall be distributed to the
Participant without his consent. If any Affiliated Employer maintains
another defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code), a
Participant's account balance shall be transferred to that defined
contribution plan without his consent, unless he consents to an
immediate distribution. For purposes of determining the applicability
of the foregoing consent requirements to distributions made before the
first day of the first Plan Year beginning after December 31, 1988, the
Participant's vested account balance shall not include amounts
attributable to accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code.
c. Optional Forms of Distribution. Provided that the Employer
has so elected in the Plan Agreement, if at the time a Participant
first becomes entitled to a distribution the value of his vested
Account balance derived from Employer and Employee contributions does
not exceed $3,500, distribution shall be made in a lump sum in cash.
Subject to the preceding sentence and to the rules of Article 10
concerning joint and survivor annuities, a Participant or Beneficiary
may elect to receive benefits in any of the following optional forms:
i. A lump sum payment. If a Participant's Accounts are
invested in Employer Stock, a lump sum payment may be made in cash or
in Employer Stock or in a combination of both;
ii. A series of installments over a period certain that meets
the requirements of Article 11;
iii. A nontransferable annuity contract, purchased by the Plan
Administrator from a commercial provider, with terms complying with the
requirements of Article 11; provided, however, that an annuity for the
life of any person shall be available as an optional form of
distribution only if the Employer has so elected in the Plan Agreement;
or
iv. In the event that the Plan is adopted as an amendment to
an existing plan, any optional form of distribution available under the
existing plan. Such optional
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<PAGE>
forms of distribution may be made available where necessary through the
purchase by the Plan Administrator of an appropriate annuity contract
in accordance with paragraph (c). If the Plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, target
benefit plan, stock bonus plan, or profit sharing plan which is subject
to the survivor annuity requirements of Sections 401(a)(11) and 417 of
the Code, the provisions of Article 10 shall apply.
d. Distribution Procedure. The Trustee shall make or commence
distributions to or for the benefit of Participants only on receipt of
an instruction from the Employer in writing or by such other means as
shall be acceptable to the Trustee, certifying that a distribution of a
Participant's benefits is payable pursuant to the Plan, and specifying
the time and manner of payment. The amount to be distributed shall be
determined as of the Valuation Date coincident with or next following
the Employer's order. The Trustee shall be fully protected in acting
upon the directions of the Employer in making benefit distributions,
and shall have no duty to determine the rights or benefits of any
person under the Plan or to inquire into the right or power of the
Employer to direct any such distribution. The Trustee shall be entitled
to assume conclusively that any determination by the Employer with
respect to a distribution meets the requirements of the Plan. The
Trustee shall not be required to make any payment hereunder in excess
of the net realizable value of the assets of the Account in question at
the time of such payment, nor to make any payment in cash unless the
Employer has furnished instructions as to the assets to be converted to
cash for the purposes of making payment.
e. Lost Distributee. In the event that the Plan Administrator
is unable with reasonable effort to locate a person entitled to
distribution under the Plan, the Accounts distributable to such a
person shall become a Forfeiture at the end of the third Plan Year
after the Plan Administrator's efforts to locate such person began;
provided, however, that the amount of the Forfeiture shall be restored
in the event that such person thereafter submits a claim for benefits
under the Plan. Such restoration will be made, first, from the amount
of Forfeitures available for reallocation as of the last day of the
Plan Year in which the claim is made, to the extent thereof; and to the
extent that Forfeitures are not available or are insufficient to
restore the balance, from contributions made by the Employer pursuant
to Section 4.1(e). A Forfeiture occurring under this Section 9.5 shall
be reallocated as though it were an Employer contribution.
f. Direct Rollovers. Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a distributee's election
under this Section, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributes in a direct rollover. For purposes of
this Section 9.6, the following definitions shall apply:
i. Eligible Rollover Distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributes, 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 distributes or
the joint lives (or joint life expectancies) of the distributees and
the distributee's Designated Beneficiary (as defined in Section 11.3),
or for a specified period of ten years or more, any distribution to the
extent such distribution is required under section 401(a)(9) of the
Code, and the portion of any distribution that is not includible in
gross income (determined without
42
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regard to the exclusion for net unrealized appreciation with respect to
employer securities).
ii. Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
iii. Distributee. A distributes includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a Qualified Domestic Relations Order
are distributees with regard to the interest of the spouse or former
spouse.
iv. Direct Rollover. A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributes.
g. Distributions Required by a Qualified Domestic Relations
Order. To the extent required by a Qualified Domestic Relations Order,
the Plan Administrator shall make distributions from a Participant's
Accounts to any alternate payee named in such order in a manner
consistent with the distribution options otherwise available under the
Plan, regardless of whether the Participant is otherwise entitled to a
distribution at such time under the Plan.
ARTICLE 10. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
a. Applicability.
i. Generally. The provisions of Sections 10.2 through 10.5
shall generally apply to a Participant who is credited with at least
one Hour of Service on or after August 23, 1984, and such other
Participants as provided in Section 10.6.
ii. Exception for Certain Plans. The provisions of Sections
10.2 through 10.5 shall not apply to a Participant in a profit sharing
plan if: (i) the Participant does not or cannot elect payment of
benefits in the form of a life annuity, and (ii) on the death of the
Participant, his Vested Account Balance will be paid to his surviving
spouse (unless there is no surviving spouse, or the surviving spouse
has consented to the designation of another Beneficiary in a manner
conforming to a Qualified Election) and the surviving spouse may elect
to have distribution of the Vested Account Balance (adjusted in
accordance with Section 13.4 for gains or losses occurring after the
Participant's death) commence within the 90-day period following the
date of the Participant's death. The Participant may waive the spousal
death benefit described in this paragraph (b) at any time, provided
that no such waiver shall be effective unless it satisfies the
conditions applicable under Section 10.4(c) to a Participant's waiver
of a Qualified Preretirement Survivor Annuity. The exception in this
paragraph (b) shall not be operative with respect to a Participant in a
profit sharing plan if the Plan:
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(1) is a direct or indirect transferee of a defined
benefit plan, money purchase pension plan, target benefit
plan, stock bonus plan, or profit sharing plan which is
subject to the survivor annuity requirements of Sections
401(a)(11) and 417 of the Code; or
(2) is adopted as an amendment of a plan that did not
qualify for the exception in this paragraph (b) before the
amendment was adopted.
For purposes of this paragraph (b), Vested Account Balance
shall have the meaning provided in Section 10.4(f). The provisions of
Sections 10.2 through 10.6 set forth the survivor annuity requirements
of Sections 401(a)(11) and 417 of the Code.
iii. Exception for Certain Amounts. The provisions of Sections
10.2 through 10.5 shall not apply to any distribution made on or after
the first day of the first Plan Year beginning after December 31, 1988,
from or under a separate account attributable solely to accumulated
deductible employee contributions as defined in Section 72(o)(5)(B) of
the Code, and maintained on behalf of a Participant in a money purchase
pension plan or a target benefit plan, provided that the exceptions
applicable to certain profit sharing plans under paragraph (b) are
applicable with respect to the separate account (for this purpose,
Vested Account Balance means the Participant's separate account balance
attributable solely to accumulated deductible employee contributions
within the meaning of Section 72(o)(5)(B) of the Code).
b. Qualified Joint and Survivor Annuity. Unless an optional
form of benefit is selected pursuant to a Qualified Election within the
90-day period ending on the Annuity Starting Date, a married
Participant's Vested Account Balance will be paid in the form of a
Qualified Joint and Survivor Annuity and an unmarried Participant's
Vested Account Balance will be paid in the form of a life annuity. In
either case, the Participant may elect to have such an annuity
distributed upon his attainment of the Earliest Retirement Age under
the Plan.
c. Qualified Preretirement Survivor Annuity. Unless an
optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, the Vested Account Balance of a
Participant who dies before the Annuity Starting Date shall be applied
toward the purchase of an annuity for the life of his surviving spouse
(a "Qualified Preretirement Survivor Annuity"). The surviving spouse
may elect to have such an annuity distributed within a reasonable
period after the Participant's death. For purposes of this Article 10,
the term "spouse" means the current spouse or surviving spouse of a
Participant, except that a former spouse will be treated as the spouse
or surviving spouse (and a current spouse will not be treated as the
spouse or surviving spouse) to the extent provided under a qualified
domestic relations order as described in Section 414(p) of the Code.
d. Definitions. The following definitions apply:
i. "Election Period" means the period beginning on the first
day of the Plan Year in which a Participant attains age 35 and ending
on the date of the Participant's death. If a Participant separates from
service before the first day of the Plan Year in which he reaches age
35, the Election Period with respect to his account balance as of the
date of separation shall begin on the date of separation. A Participant
who will not attain age 35 as of the end of a Plan Year may make a
special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period
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<PAGE>
beginning on the date of such election and ending on the first day of
the Plan Year in which the Participant will attain age 35. Such an
election shall not be valid unless the Participant receives a written
explanation of the Qualified Preretirement Survivor Annuity in such
terms as are comparable to the explanation required under Section 10.5.
Qualified Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after that date shall
be subject to the full requirements of this article.
ii. "Earliest Retirement Age" means the earliest date on which
the Participant could elect to receive Retirement benefits under the
Plan.
iii. "Qualified Election" means a waiver of a Qualified Joint
and Survivor Annuity or a Qualified Preretirement Survivor Annuity. Any
such waiver shall not be effective unless: (1) the Participant's spouse
consents in writing to the waiver; (2) the waiver designates a specific
Beneficiary, including any class of beneficiaries or any contingent
beneficiaries, which may not be changed without spousal consent (unless
the spouse's consent expressly permits designations by the Participant
without any further spousal consent); (3) the spouse's consent
acknowledges the effect of the waiver; and (4) the spouse's consent is
witnessed by a plan representative or notary public. Additionally, a
Participant's waiver of the Qualified Joint and Survivor Annuity shall
not be effective unless the waiver designates a form of benefit payment
which may not be changed without spousal consent (unless the spouses
consent expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction of a
plan representative that there is no spouse or that the spouse cannot
be located, a waiver will be deemed a Qualified Election. Any consent
by a spouse obtained under these provisions (and any establishment that
the consent of a spouse may not be obtained) shall be effective only
with respect to the particular spouse involved. A consent that permits
designations by the Participant without any requirement of further
consent by the spouse must acknowledge that the spouse has the right to
limit the consent to a specific Beneficiary and a specific form of
benefit where applicable, and that the spouse voluntarily elects to
relinquish either or both of those rights. A revocation of a prior
waiver may be made by a Participant without the consent of the spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in Section 10.5.
iv. "Qualified Joint and Survivor Annuity" means an immediate
annuity for the life of a Participant, with a survivor annuity for the
life of the spouse which is not less than 50% and not more than 100% of
the amount of the annuity which is payable during the joint lives of
the Participant and the spouse, and which is the amount of benefit that
can be purchased with the Participant's Vested Account Balance. The
percentage of the survivor annuity under the Plan shall be 50%.
v. "Annuity Starting Date" means the first day of the first
period for which an amount is paid as an annuity (or any other form).
vi. "Vested Account Balance" means the aggregate value of the
Participant's vested account balance derived from Employer and Employee
contributions (including rollovers), whether vested before or upon
death, including the proceeds of insurance contracts, if any, on the
Participant's life. The provisions of this Article 10 shall apply
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<PAGE>
to a Participant who is vested in amounts attributable to Employer
contributions, Employee contributions or both at the time of death or
distribution.
e. Notice Requirements. In the case of a Qualified Joint and
Survivor Annuity, no less than 30 days (or such other period permitted
by law) and no more than 90 days before a Participant's Annuity
Starting Date the Plan Administrator shall provide to him a written
explanation of (i) the terms and conditions of a Qualified Joint and
Survivor Annuity, (ii) the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor Annuity form
of benefit, (iii) the rights of the Participant's spouse, and (iv) the
right to make, and the effect of, a revocation of a previous election
to waive the Qualified Joint and Survivor Annuity.
In the case of a Qualified Preretirement Survivor Annuity, within the
applicable period for a Participant the Plan Administrator shall provide to him
a written explanation of the Qualified Preretirement Survivor Annuity, in terms
and manner comparable to the requirements applicable to the explanation of a
Qualified Joint and Survivor Annuity as described in the preceding paragraph.
The applicable period for a Participant is whichever of the following periods
ends last: (i) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (ii) a
reasonable period ending after an individual becomes a Participant; (iii) a
reasonable period ending after this Article 10 first applies to the Participant.
Notwithstanding the foregoing, in the case of a Participant who separates from
service before attaining age 35, notice must be provided within a reasonable
period ending after his separation from service.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii) and (iii) is the end of the
two-year period beginning one year before the date the applicable event occurs,
and ending one year after that date. In the case of a Participant who separates
from service before the Plan Year in which he reaches age 35, notice shall be
provided within the two-year period beginning one year before the separation and
ending one year after the separation. If such a Participant thereafter returns
to employment with the Employer, the applicable period for the Participant shall
be redetermined.
f. Transitional Rules.
i. Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the
preceding Sections of this Article 10, must be given the opportunity to
elect to have those Sections apply if the Participant is credited with
at least one Hour of Service under the Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and the Participant
had at least ten years of vesting service when he or she separated from
service.
ii. Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of Service under the
Plan or a predecessor plan on or after September 2, 1974, and who is
not otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his
benefits paid in accordance with paragraph (d) of this Section 10.6.
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iii. The respective opportunities to elect (as described in
paragraphs (a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to be paid to
those Participants.
iv. Any Participant who has so elected pursuant to paragraph
(b) of this Section 10.6, and any Participant who does not elect under
paragraph (a), or who meets the requirements of paragraph (a) except
that he does not have at least ten years of vesting service when he
separates from service, shall have his benefits distributed in
accordance with all of the following requirements, if his benefits
would otherwise have been payable in the form of a life annuity:
(1) Automatic joint and survivor annuity. If benefits
in the form of a life annuity become payable to a married
Participant who:
(a) begins to receive payments under the
Plan on or after normal retirement age; or
(b) dies on or after normal retirement age
while still working for the Employer; or
(c) begins to receive payments on or after
the qualified early retirement age; or
(d) separates from service on or after
attaining normal retirement age (or the qualified
early retirement age) and after satisfying the
eligibility requirements for the payment of benefits
under the Plan and thereafter dies before beginning
to receive such benefits;
then such benefits will be received under the Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election period,
which must begin at least six months before the Participant
attains qualified early retirement age and end not more than
90 days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of early survivor annuity. A Participant
who is employed after attaining the qualified early retirement
age will be given the opportunity to elect during the election
period to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the spouse under the Qualified Joint and Survivor
Annuity if the Participant had retired on the day before his
death. Any election under this provision will be in writing,
and may be changed by the Participant at any time. The
election period begins on the later of (i) the 90th day before
the Participant attains the qualified early retirement age, or
(ii) the date on which participation begins, and ends on the
date the Participant terminates employment.
(3) For purposes of this Section 10.6, qualified
early retirement age is the latest of the earliest date under
the Plan on which the Participant may
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elect to receive Retirement benefits, the first day of the
120th month beginning before the Participant reaches normal
retirement age, or the date the Participant begins
participation.
ARTICLE 11. MINIMUM DISTRIBUTION REQUIREMENTS
a. General Rules. Subject to Article 10, Joint and Survivor
Annuity Requirements, the requirements of this Article 11 shall apply
to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of the Plan. All
distributions required under this Article 11 shall be determined and
made in accordance with the Income Tax Regulations issued under Section
401(a)(9) of the Code (including proposed regulations, until the
adoption of final regulations), including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the proposed
regulations.
b. Required Beginning Date. The entire interest of a
Participant must be distributed, or begin to be distributed, no later
than the Participant's required beginning date, determined as follows.
i. General Rule. The required beginning date of a Participant
is the first day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
ii. Transitional Rules. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5% owners. The required beginning date of a
Participant who is not a 5% owner is the first day of April of
the calendar year following the calendar year in which the
later of his Retirement or his attainment of age 70 1/2
occurs.
(2) 5% owners. The required beginning date of a
Participant who is a 5% owner during any year beginning after
December 31, 1979, is the first day of April following the
later of:
(a) the calendar year in which the
Participant attains age 70 1/2, or
(b) the earlier of the calendar year with or
within which ends the Plan Year in which the
Participant becomes a 5% owner, or the calendar year
in which the Participant retires.
The required beginning date of a Participant who is not a 5%
owner, who attains age 70 1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
iii. Rules for 5% Owners. A Participant is treated as a 5%
owner for purposes of this Section 11.2 if he is a 5% owner as defined
in Section 416(i) of the Code (determined in accordance with Section
416 but without regard to whether the
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Plan is top heavy) at any time during, the Plan Year ending with or
within the calendar year in which he attains age 66 1/2, or any
subsequent Plan Year. Once distributions have begun to a 5% owner under
this Section 11.2, they must continue, even if the Participant ceases
to be a 5% owner in a subsequent year.
c. Limits on Distribution Periods. As of the first
Distribution Calendar Year, distributions not made in a single sum may
be made only over one or a combination of the following periods:
i. the life of the Participant,
ii. the life of the Participant and his Designated
Beneficiary,
iii. a period certain not extending beyond the Life Expectancy
of the Participant, or
iv. a period certain not extending beyond the Joint and Last
Survivor Expectancy of the Participant and his Designated Beneficiary.
"Designated Beneficiary" means the individual who is designated as the
Beneficiary under the Plan in accordance with Section 401(a)(9) of the Code and
the regulations issued thereunder (including proposed regulations, until the
adoption of final regulations) and Section 7.2.
"Distribution Calendar Year" means a calendar year for which a minimum
distribution is required under Section 401(a)(9) of the Code and this Section
11.3. For distributions beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately preceding the
calendar year which contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first Distribution
Calendar Year is the calendar year in which distributions are required to begin
pursuant to Section 11.5.
"Life Expectancy" and "Joint and Last Survivor Expectancy" are computed
by use of the expected return multiples in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations. Unless otherwise elected by the Participant (or his
spouse, in the case of distributions described in Section 11.5(b)) by the time
distributions are required to begin, Life Expectancies shall be recalculated
annually. Any such election shall be irrevocable as to the Participant (or
spouse) and shall apply to all subsequent years. The Life Expectancy of a
nonspouse beneficiary may not be recalculated.
d. Determination of Amount to Be Distributed Each Year. If the
Participant's interest is to be distributed in other than a single sum,
the following minimum distribution rules shall apply on or after the
required beginning date. Paragraphs (a) through (d) apply to
distributions in forms other than the purchase of an annuity contract.
i. If a Participant's Benefit (as defined below) is to be
distributed over (1) a period not extending beyond the Life Expectancy
of the Participant or the Joint Life and Last Survivor Expectancy of
the Participant and his Designated Beneficiary, or (2) a period not
extending beyond the Life Expectancy of the Designated Beneficiary, the
amount required to be distributed for each calendar year, beginning
with distributions
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for the first Distribution Calendar Year, must at least equal the
quotient obtained by dividing the Participant's Benefit by the
Applicable Life Expectancy (as defined below).
ii. For calendar years beginning before January 1, 1989, if
the Participant's spouse is not the Designated Beneficiary, the method
of distribution selected must assure that at least 50% of the present
value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
iii. For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for
the first Distribution Calendar Year, shall not be less than the
quotient obtained by dividing the Participant's Benefit by the lesser
of (1) the Applicable Life Expectancy or (2) if the Participant's
spouse is not the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2
of the Proposed Income Tax Regulations. Distributions after the death
of the Participant shall be distributed using the Applicable Life
Expectancy in paragraph (a) above as the relevant divisor, without
regard to Proposed Regulations Section 1.401(a)(9)-2.
iv. The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before the
Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
Distribution Calendar Year in which the Employee's required beginning
date occurs, must be made on or before December 31 of that Distribution
Calendar Year.
v. If the Participant's Benefit is distributed in the form of
an annuity contract purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of Section
401(a)(9) of the Code and the regulations issued thereunder (including
proposed regulations, until the adoption of final regulations).
"Applicable Life Expectancy" means the Life Expectancy (or Joint and
Last Survivor Expectancy) calculated using the attained age of the Participant
(or Designated Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year, reduced by one for each
calendar year which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the Applicable Life
Expectancy shall be the Life Expectancy as so recalculated. The applicable
calendar year shall be the first Distribution Calendar Year, and if Life
Expectancy is being recalculated such succeeding calendar year. If annuity
payments commence in accordance with Section 11.4(e) before the required
beginning date, the applicable calendar year is the year such payments commence.
If distribution is in the form of an immediate annuity purchased after the
Participant's death with the Participant's remaining interest in the Plan, the
applicable calendar year is the year of purchase.
"Participant's Benefit" means the account balance as of the last
valuation date in the calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year), increased by the amount of any
contributions or Forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. For purposes of
the preceding sentence, if any portion of the minimum distribution for the first
Distribution Calendar Year is made in the second Distribution Calendar Year on
or before the required beginning date, the
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amount of the minimum distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately preceding
Distribution Calendar Year.
e. Death Distribution Provisions.
i. Distribution Beginning before Death. If the Participant
dies after distribution of his interest has begun, the remaining
portion of his interest will continue to be distributed at least as
rapidly as under the method of distribution being used before the
Participant's death.
ii. Distribution Beginning after Death. If the Participant
dies before distribution of his interest begins, distribution of his
entire interest shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death, except to
the extent that an election is made to receive distributions in
accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is
payable to a Designated Beneficiary, distributions may be made
over the Designated Beneficiary's life, or over a period
certain not greater than the Life Expectancy of the Designated
Beneficiary, commencing on or before December 31 of the
calendar year immediately following the calendar year in which
the Participant died; or
(2) If the Designated Beneficiary is the
Participant's surviving spouse, the date distributions are
required to begin in accordance with (1) above shall not be
earlier than the later of (i) December 31 of the calendar year
immediately following the calendar year in which the
Participant died, and (ii) December 31 of the calendar year in
which the Participant would have attained age 70 1/2
If the Participant has not made an election pursuant to this Section
11.5 by the time of his death, the Participant's Designated Beneficiary must
elect the method of distribution no later than the earlier of (i) December 31 of
the calendar year in which distributions would be required to begin under this
Section 11.5, or (ii) December 31 of the calendar year which contains the fifth
anniversary of the date of death of the Participant. If the Participant has no
Designated Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, distribution of the Participant's entire interest must be
completed by December 31 of the calendar year, containing the fifth anniversary
of the Participant's death.
iii. For purposes of paragraph (b), if the surviving spouse
dies after the Participant, but before payments to the spouse begin,
the provisions of paragraph (b), with the exception of subparagraph (2)
therein, shall be applied as if the surviving spouse were the
Participant.
iv. For purposes of this Section 11.5, any amount paid to a
child of the Participant will be treated as if it had been paid to the
surviving spouse of the Participant if the amount becomes payable to
the surviving spouse when the child reaches the age of majority.
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v. For the purposes of this Section 11.5, distribution of a
Participant's interest is considered to begin on the Participant's
required beginning date (or, if paragraph (c) above is applicable, the
date distribution is required to begin to the surviving spouse pursuant
to paragraph (b) above). If distribution in the form of an annuity
contract described in Section 11.4(e) irrevocably commences to the
Participant before the required beginning date, the date distribution
is considered to begin is the date distribution actually commences.
f. Transitional Rule. Notwithstanding the other requirements
of this Article 11, and subject to the requirements of Article 10,
Joint and Survivor Annuity Requirements, distribution on behalf of any
Participant, including a 5% owner, may be made in accordance with all
of the following requirements (regardless of when such distribution
commences):
i. The distribution is one which would not have disqualified
the Trust under Section 401(a)(9) of the Internal Revenue Code of 1954
as in effect before its amendment by the Deficit Reduction Act of 1984.
ii. The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Trust is
being distributed or, if the Employee is deceased, by a Beneficiary of
the Employee.
iii. The designation specified in paragraph (b) was in
writing, was signed by the Employee or the Beneficiary, and was made
before January 1, 1984.
iv. The Employee had accrued a benefit under the Plan as of
December 31, 1983.
v. The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution will commence,
the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the Beneficiaries of the
Employee listed in order of priority.
A distribution upon death will not be covered by this transitional rule
unless the information in the designation contains the required information
described above with respect to the distributions to be made upon the death of
the Employee. For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee or the Beneficiary to whom such
distribution is being made will be presumed to have designated the method of
distribution under which the distribution is being made, if the method of
distribution was specified in writing and the distribution satisfies the
requirements in paragraphs (a) and (e).
If a designation is revoked, any subsequent distribution must satisfy
the requirements of Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked after the date distributions are
required to begin, the Trust must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the regulations thereunder, but for
the designation described in paragraphs (b) through (e). For calendar years
beginning after December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. Any changes in the designation generally will
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<PAGE>
be considered to be a revocation of the designation, but the mere substitution
or addition of another beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation, so
long as the substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case of an amount
transferred or rolled over from one plan to another plan, the rules in Q&A J-2
and Q&A J-3 of Section 1.401(a)(9)-l of the Proposed Income Tax Regulations
shall apply.
ARTICLE 12. WITHDRAWALS AND LOANS
a. Withdrawals from Participant Contribution and Rollover
Accounts. Subject to the requirements of Article 10, a Participant may
upon written notice (or in such other manner as shall be made available
and agreed upon by the Employer and Putnam) to the Employer withdraw
any amount from his Participant Contribution Account or Rollover
Account. A withdrawn amount may not be repaid to the Plan. No
Forfeiture will occur solely as a result of an Employee's withdrawal
from a Participant Contribution Account or Rollover Account.
b. Withdrawals on Account of Hardship.
i. If the Employer has so elected in the Plan Agreement, upon
a Participant's written request (or in such other manner as shall be
made available and agreed upon by the Employer and Putnam), the Plan
Administrator may permit a withdrawal of funds from the vested portion
of the Participant's Accounts on account of the Participant's financial
hardship, which must be demonstrated to the satisfaction of the Plan
Administrator, provided, that no hardship withdrawal shall be made from
a Qualified Nonelective Contribution Account or Qualified Matching
Account. In considering such requests, the Plan Administrator shall
apply uniform standards that do not discriminate in favor of Highly
Compensated Employees. If hardship withdrawals are permitted from more
than one of the Elective Deferral Account, Rollover Account, Employer
Matching Account, and Employer Contribution Account, they shall be made
first from a Participant's Elective Deferral Account, then from his
Rollover Account, then from his Employer Matching Account, and finally
from his Employer Contribution Account, as applicable. A withdrawn
amount may not be repaid to the Plan.
ii. The maximum amount that may be withdrawn on account of
hardship from an Elective Deferral Account after December 31, 1988,
shall not exceed the sum of (1) the amount credited to the Account as
of December 31, 1988, and (2) the aggregate amount of the Elective
Deferrals made by the Participant after December 31, 1988, and before
the hardship withdrawal.
iii. Hardship withdrawals shall be permitted only on account
of the following financial needs:
(1) Expenses for medical care described in Section
213(d) of the Code for the Participant, his spouse, children
and dependents, or necessary for these persons to obtain such
care;
(2) Purchase of the principal residence of the
Participant(excluding regular mortgage payments);
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(3) Payment of tuition and related educational fees
and room and board expenses for the upcoming 12 months of
post-secondary education for the Participant, his spouse,
children or dependents; or
(4) Payments necessary to prevent the Participant's
eviction from, or the foreclosure of a mortgage on, his
principal residence.
iv. Hardship withdrawals shall be subject to the spousal
consent requirements contained in Sections 411(a)(11) and 417 of the
Code, to the same extent that those requirements apply to a Participant
pursuant to Section 10.1.
v. A hardship withdrawal will be made to a Participant only
upon satisfaction of the following conditions:
(1) The Participant has obtained all nontaxable loans
and all distributions other than hardship withdrawals
available to him from all plans maintained by the Affiliated
Employers;
(2) The hardship withdrawals does not exceed the
amount of the Participant's financial need as described in
paragraph (c) plus any amounts necessary to pay federal, state
and local income taxes and penalties reasonably anticipated to
result from the withdrawals;
(3) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the Participant's Elective Deferrals
and voluntary after-tax contributions will be suspended for a
period of 12 months following his receipt of a hardship
withdrawal; and
(4) With respect to withdrawals from an Elective
Deferral Account, all plans maintained by the Affiliated
Employers provide that the amount of Elective Deferrals that
the Participant may make in his taxable year immediately
following the year of a hardship withdrawal will not exceed
the applicable limit under Section 402(g) of the Code for the
taxable year, reduced by the amount of Elective Deferrals made
by the Participant in the taxable year of the hardship
withdrawal.
c. Withdrawals After Reaching Age 59 1/2. If so specified by
the Employer in the Plan Agreement, a Participant who has reached age
59 1/2 may upon written request to the Employer (or in such other
manner as shall be made available and agreed upon by the Employer and
Putnam) withdraw during his employment any amount not exceeding the
vested balance of his Accounts. A withdrawn amount may not be repaid to
the Plan.
d. Other Withdrawals. If so elected by the Employer in the
Plan Agreement, a Participant may make a withdrawal from his Employer
Contribution Account or Employer Matching Account for any reason upon
written request to the Employer (or in such other manner as shall be
made available and agreed upon by the Employer and Putnam), provided
that (a) the Participant has been a Participant for at least five
years, or (b) the withdrawal from such Account is limited to the excess
of the balance of such Account on the date of the withdrawal over the
aggregate of the amounts credited to such Account during the two year
period immediately preceding the date of such withdrawal. No such
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<PAGE>
withdrawal shall exceed the vested portion of the Participant's
Account from which the withdrawal is made. A withdrawn amount may not
be repaid to the Plan.
e. Loans. If the Employer has so elected in the Plan
Agreement, the Employer may direct the Trustee to make a loan to a
Participant or Beneficiary from the vested portion of his Accounts,
subject to the following terms and conditions and to such reasonable
additional rules and regulations as the Plan Administrator may
establish for the orderly operation of the program:
i. The Plan Administrator shall administer the loan program
subject to the terms and conditions of this Section 12.5.
ii. A Participant's or Beneficiary's request for a loan shall
be submitted to the Plan Administrator by means of a written
application on a form supplied by the Plan Administrator (or in such
other manner as shall be made available and agreed upon by the Employer
and Putnam). Applications shall be approved or denied by the Plan
Administrator on the basis of its assessment of the borrower's ability
to collateralize and repay the loan, as revealed in the loan
application.
iii. If the Employer has so elected in the Plan Agreement,
loans to a Participant or Beneficiary shall only be made in the event
of hardship of the Participant or Beneficiary. For this purpose, a loan
shall considered to be made in the event of hardship only if is made on
account of the following financial needs:
(1) Expenses for medical care described in Section
213(d) of the Code for the Participant, his spouse, children
and dependents, or necessary for these persons to obtain such
care;
(2) Purchase of the principal residence of the
Participant (excluding regular mortgage payments);
(3) Payment of tuition and related educational fees
and room and board expenses for the upcoming 12 months of
post-secondary education for the Participant, his spouse,
children or dependents; or
(4) Payments necessary to prevent the Participant's
eviction from, or the foreclosure of a mortgage on, his
principal residence.
iv. Loans shall be made to all Participants and Beneficiaries
on a reasonably equivalent basis. Loans shall not be made available to
Highly Compensated Employees (as defined in Section 414(q) of the Code)
in amounts greater than the amounts made available to other Employees
(relative to the borrower's Account balance).
v. Loans must be evidenced by the Participant's promissory
note for the amount of the loan payable to the order of the Trustee,
and adequately secured by assignment of not more than fifty percent
(50%) of the Participant's entire right, title and interest in and to
the Trust Fund, exclusive of any asset as to which Putnam is not the
Trustee.
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vi. Loans must bear a reasonable interest rate comparable to
the rate charged by commercial lenders in the geographical area for
similar loans. The Plan Administrator shall not discriminate among
Participants in the matter of interest rates, but loans may bear
different interest rates if, in the opinion of the Plan Administrator,
the difference in rates is justified by conditions that would
customarily be taken into account by a commercial lender in the
Employer's geographical area.
vii. The period for repayment for any loan shall not exceed
five years, except in the case of a loan used to acquire a dwelling
unit which within a reasonable time is to be used as the principal
residence of the Participant, in which case the repayment period may
exceed five years. The terms of a loan shall require that it be repaid
in level payments of principal and interest not less frequently then
quarterly throughout the repayment period, except that alternative
arrangements for repayment may apply in the event that the borrower is
on unpaid leave of absence for a period not to exceed one year.
viii. To the extent that a Participant would be required under
Article 10 to obtain the consent of his spouse to a distribution of an
immediately distributable benefit other than a Qualified Joint and
Survivor Annuity, the consent of the Participant's spouse shall be
required for the use of his Account as security for a loan. The
spouse's consent must be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to be so
secured, and obtained in accordifice with the requirements of Section
10.4(c) for a Qualified Election. Any such consent shall thereafter be
binding on the consenting spouse and any subsequent spouse of the
Participant. A new consent shall be required for use of the Account as
security for any extension, renewal, renegotiation or revision of the
original loan.
ix. If valid spousal consent has been obtained in accordance
with Section 12.5(h), then notwithstanding any other provision of the
Plan the portion of the Participant's account balance used as a
security interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of determining
the amount of the account balance payable at the time of death or
distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's vested account balance
(determined without regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be adjusted by first
reducing the vested account balance by the amount of the security used
as repayment of the loan, and then determining the benefit payable to
the surviving spouse.
x. In the event of default on a loan by a Participant who is
an active Employee, foreclosure on the Participant's Account as
security will not occur until the Employer has reported to the Trustee
the occurrence of an event permitting distribution from the Plan in
accordance with Article 9 or Section 5.13.
xi. No loan shall be made to an Owner-Employee or a
Shareholder-Employee unless a prohibited transaction exemption is
obtained by the Employer.
(1) No loan to any Participant or Beneficiary can be
made to the extent that the amount of the loan, when added to
the outstanding balance of all other loans to the Participant
or Beneficiary, would exceed the lesser of (a) $50,000 reduced
by the excess (if any) of the highest outstanding balance of
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<PAGE>
loans during the one year period ending on the day before the
loan is made, over the outstanding balance of loans from the
Plan on the date the loan is made, or (b) one-half the value
of the vested account balance of the Participant. For the
purpose of the above limitation, all loans from all qualified
plans of the Affiliated Employers are aggregated.
xii. Loans shall be considered investments directed by a
Participant pursuant to Section 13.3. The amount loaned shall be
charged solely against the Accounts of the Participant, and repaid
amounts and interest shall be credited solely thereto.
f. Procedure; Amount Available. Withdrawals and loans shall be
made subject to the terms and conditions applicable to distributions
pursuant to Section 9.4, except that the amount of any withdrawal or
loan shall be determined by reference to the vested balance of the
Participant's Account as of the most recent Valuation Date preceding
the withdrawal or loan, and shall not exceed the amount of the vested
account balance.
g. Protected Benefits. Notwithstanding any provision to the
contrary, if an Employer amends an existing retirement plan ("prior
plan") by adopting this Plan, to the extent any withdrawal option or
form of payment available under the prior plan is an optional form of
benefit within the meaning of Code Section 411(d)(6), such option or
form of payment shall continue to be available to the extent required
by such Code Section.
h. Restrictions Concerning Transferred Assets. Notwithstanding
any provision to the contrary, if an Employer amends an existing
defined benefit or money purchase pension plan ("prior pension plan")
by adopting this Plan, accrued benefits attributable to the assets and
liabilities transferred from the prior pension plan (which accrued
benefits include the account balance of such Participant in the Plan
attributable to such accrued benefits as of the date of the transfer
and any earnings on such account balance subsequent to the transfer)
shall be distributable only on or after the events upon which
distributions are or were permissible under the prior pension plan.
ARTICLE 13. TRUST FUND AND INVESTMENTS
a. Establishment of Trust Fund. The Employer and the Trustee
hereby agree to the establishment of a Trust Fund consisting of all
amounts as shall be contributed or transferred from time to time to the
Trustee pursuant to the Plan, and all earnings thereon. The Trustee
shall hold the assets of the Trust Fund for the exclusive purpose of
providing benefits to Participants and Beneficiaries and defraying the
reasonable expenses of administering the Plan, and no such assets shall
ever revert to the Employer, except that:
i. contributions made by the Employer by mistake of fact, as
determined by the Employer, may be returned to the Employer within one
(1) year of the date of payment,
ii. contributions that are conditioned on their deductibility
under Section 404 of the Code may be returned to the Employer, to the
extent disallowed, within one (1) year of the disallowance of the
deduction,
iii. contributions that are conditioned on the initial
qualification of the Plan under the Code, and all investment gains
attributable to them, may be returned to the
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Employer within one (1) year after such qualification is denied by
determination of the Internal Revenue Service, but only if an
application for determination of such qualification is made within the
time prescribed by law for filing the Employer's federal income tax
return for its taxable year in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe,
iv. amounts held in a suspense account may be returned to the
Employer on termination of the Plan, to the extent that they may not
then be allocated to any Participant's Account in accordance with
Article 6, and
v. if the Employer has elected to use Forfeitures for either
Employer Contribution Accounts or Employer Matching Accounts to reduce
other required contributions of the Employer, Forfeitures held under
the Plan with respect to the Accounts for which such election has been
made may be returned to the Employer on termination of the Plan, to the
extent not required to reduce any contributions required of the
Employer.
All Employer contributions under the Plan other than those made
pursuant to Section 4.1(e) are hereby expressly conditioned on the initial
qualification of the Plan and their deductibility under the Code. Investment
gains attributable to contributions returned pursuant to Subsections (a) and (b)
shall not be returned to the contributing Employer, and investment losses
attributable to such contributions shall reduce the amount returned.
b. Management of Trust Fund. The assets of the Trust Fund
shall be held in trust by the Trustee and accounted for in accordance
with this Article 13, and shall be invested in accordance with Section
13.3 in the Investment Products specified by the Employer in the Plan
Agreement and from time to time thereafter in writing (or in such other
manner as shall be made available and agreed upon by the Employer and
Putnam). The Employer shall have the exclusive authority and discretion
to select the Investment Products available under the Plan. In making
that selection, the Employer shall use the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims. The
Employer shall cause the available Investment Products to be
diversified sufficiently to minimize the risk of large losses, unless
under the circumstances it is clearly prudent not to do so. It is
especially intended that the Trustee shall have no discretionary
authority to determine the investment of Trust assets. Notwithstanding
the foregoing, assets of the Trust Fund shall also be invested in
Employer Stock if so elected by the Employer and agreed to by Putnam
under the service agreement executed by the Employer and Putnam
pursuant to the establishment of the Plan.
c. Investment Instructions. All amounts held in the Trust Fund
under the Plan shall be invested in Investment Products. If the
Employer has elected in the Plan Agreement to make investment decisions
with respect to Elective Deferrals, Participant Contributions, Rollover
Contributions, Profit Sharing and other Employer Contributions,
Employer Matching Contributions, Deductible Employee Contributions,
Qualified Matching Contributions and/or Qualified Nonelective
Contributions, investment instructions as to the Accounts for such
contributions shall be the fiduciary responsibility of the Employer,
and each of such affected Accounts shall have a pro rata interest in
all assets of the Trust to which the Employer's instructions apply. To
the extent the Employer has not elected to make investment decisions
for all of the Accounts of the Plan, then assets of the Trust over
which the Employer has not elected to make investment decisions shall
be invested solely in accordance with the
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instructions of the Participant to whose Accounts they are
allocable, as delivered to Putnam in accordance with its service
agreement with the Employer. Instructions shall apply to future
contributions, past accumulations, or both, according to their terms,
and shall be communicated by the Employer to Putnam in accordance with
procedures prescribed in the service agreement between the Employer and
Putnam. Instructions shall be effective prospectively, coincident with
or within a reasonable time after their receipt in good order by
Putnam. An instruction once received shall remain in effect until it is
changed by the provision of a new instruction. New instructions shall
be accepted by Putnam at the time and in the manner provided in the
Plan Agreement. To the extent any assets of the Trust are to be
invested solely in accordance with the instructions of the
Participants, the Plan is intended to constitute a plan described in
section 404(c) of ERISA and Title 29 of the Code of Federal Regulations
section 2550.404c-1. In such case, the Employer shall be the Plan
fiduciary responsible for providing the Participants with all
information required to be given pursuant to ERISA section 404(c) and
Title 29 of the Code of Federal Regulations section 2550.404c-1.
In the event that the Employer adopts a Putnam prototype plan as an
amendment to or restatement of an existing plan, the Employer shall specify one
or more Investment Products to serve as the sole investments for all
Participants' Accounts during the period in which existing records of the Plan
are transferred to the Recordkeeper. During that period, new investment
instructions as to existing assets of the Plan cannot be carried out, nor can
distributions be made from the Plan except to the extent permitted under the
terms of the service agreement between the Employer and Putnam. The Employer and
the Recordkeeper shall use their best efforts to minimize the duration of the
period to which the preceding sentence applies.
To the extent specifically authorized and provided in the service
agreement between the Employer and Putnam, the Employer may direct the Trustee
to establish as an Investment Product a fund all of the assets of which shall be
invested in shares of stock of the Employer that constitute "qualifying employer
securities" within the meaning of section 407(d)(5) of ERISA ("Employer Stock").
The Plan Administrator as named fiduciary shall continually monitor the
suitability of acquiring and holding Employer Stock under the fiduciary duty
rules of section 404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA)
and the requirements of section 404(c) of ERISA, and shall be responsible for
ensuring that the procedures relating to the purchase, holding and sale of
Employer Stock, and the exercise of any and all rights with respect to such
Employer Stock shall be in accordance with section 404(c) of ERISA unless the
Employer retains voting, tender or similar rights with respect to the Employer
Stock. The Trustee shall not be liable for any loss, or by reason of any breach,
which arises from the direction of the Plan Administrator with respect to the
acquisition and holding of Employer Stock. The Employer shall be responsible for
determining whether, under the circumstances prevailing at a given time, its
fiduciary duty to Plan Participants and Beneficiaries under the Plan and ERISA
requires that the Employer follow the advice of independent counsel as to the
voting and tender or retention of Employer Stock.
Putnam shall be under no duty to question or review the directions
given by the Employer or to make suggestions to the Employer in connection
therewith. Putnam shall not be liable for any loss, or by reason of any breach,
that arises from the Employer's exercise or non-exercise of rights under this
Article 13, or from any direction of the Employer unless it is clear on the face
of the direction that the actions to be taken under the direction are prohibited
by the fiduciary duty rules of Section 404(a) of ERISA. All interest, dividends
and other income received with respect to, and any proceeds received from the
sale or other disposition of, securities or other property held in an investment
fund shall be credited to and reinvested in such investment fund, and all
expenses of the Trust that are properly allocated to a
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particular investment fund shall be so allocated and charged. The Employer may
at any time direct Putnam to eliminate any investment fund or funds, and Putnam
shall thereupon dispose of the assets of such investment fund and reinvest the
proceeds thereof in accordance with the directions of the Employer.
Neither the Employer nor the Trustee nor Putnam shall be responsible
for questioning any instructions of a Participant or for reviewing the
investments selected therein, or for any loss resulting from instructions of a
Participant or from the failure of a Participant to provide or to change
instructions. Neither Putnam nor the Trustee shall have any duty to question any
instructions received from the Employer or a Participant or to review the
investments selected thereby, nor shall Putnam or the Trustee be responsible for
any loss resulting from instructions received from the Employer or a Participant
or from the failure of the Employer or a Participant to provide or to change
instructions. In the event that Putnam or the Trustee receives a contribution
under the Plan as to which no instructions are delivered, or such instructions
as are delivered are unclear to Putnam or the Trustee, such contribution shall
be invested until clear instructions are received in the default investment
option set forth in the service agreement between the Employer and Putnam, or if
no such option is so set forth, the Employer, by execution of the Plan
Agreement, shall affirmatively elect to have such contributions invested in the
Putnam Money Market Fund. Neither Putnam nor the Trustee shall have any
discretionary authority or responsibility in the investment of the assets of the
Trust Fund.
d. Valuation of the Trust Fund. As of each Valuation Date, the
Trustee shall determine the fair market value of the Trust Fund, and
the net earnings or losses and expenses of the Trust Fund for the
period elapsed since the most recent previous Valuation Date shall be
allocated among the Accounts of Participants. Earnings, losses and
expenses which pertain to investments which are specifically held for a
given Participant's Account shall be allocated solely to that Account.
In the event that an investment is not specifically held for a given
Participant's Account, the earnings, losses and expenses pertaining to
that investment shall be allocated among all Participants' Accounts in
the ratio that each such Account bears to the total of all Accounts of
all Participants. Each Participant's Accounts shall be adjusted
pursuant to this Section 13.4 until such time as they are either fully
distributed or forfeited, regardless of whether the Participant
continues to be an Employee.
e. Distributions on Investment Company Shares. Subject to
Section 9.3, all dividends and capital gains or other distributions
received on any Investment Company Shares credited to Participant's
Account will (unless received in additional Investment Company Shares)
be reinvested in full and fractional shares of the same Investment
Company at the price determined as provided in the then current
prospectus of the Investment Company. The shares so received or
purchased upon such reinvestment will be credited to such accounts. If
any dividends or capital gain or other distributions may be received on
such Investment Company Shares at the election of the shareholder in
additional shares or in cash or other property, that Trustee will elect
to receive such dividends or distributions in additional Investment
Company Shares.
f. Registration and Voting of Investment Company Shares. All
Investment Company Shares shall be registered in the name of the
Trustee or its nominee. Subject to any requirements of applicable law,
the Trustee will transmit to the Employer copies of any notices of
shareholders' meetings, proxies and proxy-soliciting materials,
prospectuses and the annual or other reports to shareholders, with
respect to Investment Company Shares held in the Trust Fund. The
Trustee shall act in accordance with directions received from the
Employer
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with respect to matters to be voted upon by the shareholders of the
Investment Company. Such directions must be in writing on a form
approved by the Trustee, signed by the Employer and delivered to the
Trustee within the time prescribed by it. The Trustee will not vote
Investment Company Shares as to which it receives no written
directions.
g. Investment Manager. The Employer, with the consent of
Putnam, may appoint an investment manager, as defined in Section 3(38)
of ERISA with respect to all or a portion of the assets of the Trust
Fund. The Trustee shall have no liability in connection with any action
or nonaction pursuant to directions of such an investment manager.
h. Employer Stock.
i. Voting Rights. Notwithstanding any other provision of the
Plan, the provisions of this Section 13.8(a) shall govern the voting of
Employer Stock held by Putnam as Trustee under the Plan. The Trustee
shall vote Employer Stock in accordance with the directions of the
Employer unless the Employer has elected in the Plan Agreement that
Participants shall be appointed named fiduciaries as to the voting of
Employer Stock and shall direct the Trustee as to the voting of
Employer Stock in accordance with the provisions of this Section
13.8(a). In either case, the Employer shall be responsible for
determining whether, under the circumstances prevailing at a given
time, its fiduciary duty to Participants and Beneficiaries under the
Plan and ERISA requires that the Employer follow the advice of
independent counsel as to the voting of Employer Stock. The remainder
of this Section 13.8(a) applies only if the Employer elects in the Plan
Agreement that Participants shall direct the Trustee as to the voting
of Employer Stock. For purposes of this Section 13.8(a), the term
"Participant" includes any Beneficiary with an Account in the Plan
which is invested in Employer Stock.
When the issuer of Employer Stock files preliminary proxy
solicitation materials with the Securities and Exchange Commission, the
Employer shall cause a copy of all the materials to be simultaneously
sent to the Trustee, and the Trustee shall prepare a voting instruction
form based upon these materials. At the time of mailing of notice of
each annual or special stockholders' meeting of the issuer of Employer
Stock, the Employer shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Participant, together with
the foregoing voting instruction form to be returned to the Trustee or
its designee. The form shall show the number of full and fractional
shares of Employer Stock credited to the Participant's Accounts,
whether or not vested. For purposes of this Section 13.8(a), the number
of shares of Employer Stock deemed credited to a Participant's Accounts
shall be determined as of the date of record determined by the Employer
for which an allocation has been completed and Employer Stock has
actually been credited to Participant's Accounts. Procedures for the
execution of purchases and sales of Employer Stock shall be as set
forth in the service agreement between the Employer and Putnam. The
Employer shall provide the Trustee with a copy of any materials
provided to Participants and shall certify to the Trustee that the
materials have been mailed or otherwise sent to Participants.
Each Participant shall have the right to direct the Trustee as
to the manner in which to vote that number of shares of Employer Stock
held under the Plan (whether or not vested) equal to a fraction, of
which the numerator is the number of shares of Employer Stock credited
to his Account and the denominator is the number of shares of Employer
Stock credited to all Participants' Accounts. Such directions shall be
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communicated in writing (or in such other manner as shall be made
available and agreed upon by the Employer and Putnam) and shall be held
in confidence by the Trustee and not divulged to the Employer, or any
officer or employee thereof, or any other persons. Upon its receipt of
directions, the Trustee shall vote the shares of Employer Stock as
directed by the Participant. The Trustee shall not vote those shares of
Employer Stock credited to the Accounts of Participants for which no
voting directions are received. With respect to shares of Employer
Stock held in the Trust which are not credited to a Participant's
Account, the Plan Administrator shall retain the status of named
fiduciary and shall direct the voting of such Employer Stock.
ii. Tendering Rights. Notwithstanding any other provision of
the Plan, the provisions of this Section 13.8(b) shall govern the
tendering of Employer Stock by Putnam as Trustee under the Plan. In the
event of a tender offer, the Trustee shall tender Employer Stock in
accordance with the directions of the Employer unless the Employer has
elected in the Plan Agreement that Participants shall be appointed
named fiduciaries as to the tendering of Employer Stock in accordance
with the provisions of this Section 13.8(b). The remainder of this
Section 13.8(b) applies only if the Employer elects in the Plan
Agreement that Participants shall direct the Trustee as to the
tendering of Employer Stock. For purposes of this Section 13.8(b), the
term "Participant" includes any Beneficiary with an Account in the Plan
which is invested in Employer Stock.
Upon commencement of a tender offer for any Employer Stock,
the Employer shall notify each Plan Participant, and use its best
efforts to distribute timely or cause to be distributed to Participants
the same information that is distributed to shareholders of the issuer
of Employer Stock in connection with the tender offer, and after
consulting with the Trustee shall provide at the Employer's expense a
means by which Participants may direct the Trustee whether or not to
tender the Employer Stock credited to their Accounts (whether or not
vested). The Employer shall provide to the Trustee a copy of any
material provided to Participants and shall certify to the Trustees
that the materials have been mailed or otherwise sent to Participants.
Each Participant shall have the right to direct the Trustee to
tender or not to tender some or all of the shares of Employer Stock
credited to his Accounts. Directions from a Participant to the Trustee
concerning the tender of Employer Stock shall be communicated in
writing (or in such other manner as shall be made available and agreed
upon by the Employer and Putnam) as is agreed upon by the Trustees and
the Employer. The Trustee shall tender or not tender shares of Employer
Stock as directed by the Participant. A Participant who has directed
the Trustee to tender some or all of the shares of Employer Stock
credited to his Accounts may, at any time before the tender offer
withdrawal date, direct the Trustee to withdraw some or all of the
tendered shares, and the Trustee shall withdraw the directed number of
shares from the tender offer before the tender offer withdrawal
deadline. A Participant shall not be limited as to the number of
directions to tender or withdraw that he may give to the Trustee. The
Trustee shall not tender shares of Employer Stock credited to a
Participant's Accounts for which it has received no directions from the
Plan Participant. The Trustee shall tender that number of shares of
Employer Stock not credited to Participants' Accounts determined by
multiplying the total number of such shares by a fraction, the
numerator of which is the number of shares of Employer Stock credited
to Participants' Accounts for which the Trustee has received directions
from Participants to tender (which directions have not been withdrawn
as of the date of this
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determination), and the denominator of which is the total number of
shares of Employer Stock credited to Participants' Accounts.
A direction by a Participant to the Trustee to tender shares
of Employer Stock credited to his Accounts shall not be considered a
written election under the Plan by the Participant to withdraw or to
have distributed to him any or all of such shares. The Trustee shall
credit to each Account of the Plan Participant from which the tendered
shares were taken the proceeds received by the Trustee in exchange for
the shares of Employer Stock tendered from that Account. Pending
receipt of directions through the Administrator from the Participant as
to the investment of the proceeds of the tendered shares, the Trustee
shall invest the proceeds as the Administrator shall direct. To the
extent that any Participant gives no direction as to the tendering of
Employer stock that he has the right to direct under this Section
13.8(a), the Trustee shall not tender such Employer Stock.
iii. Other Rights. With respect to all rights in connection
with Employer Stock other than the right to vote and the right to
tender, Participants are hereby appointed named fiduciaries to the same
extent (if any) as provided in the foregoing paragraphs of this Section
13.8 with regard to the right to vote, and the Trustee shall follow the
directions of Participants and the Plan Administrator with regard to
the exercise of such rights to the same extent as with regard to the
right to vote.
i. Insurance Contracts. If so provided in the Plan Agreement
or other agreement between the Employer and the Trustee, the Plan
Administrator may direct the Trustee to receive and hold or apply
assets of the Trust to the purchase of individual or group insurance or
annuity contracts ("policies" or "contracts") issued by any insurance
company and in a form approved by the Plan Administrator (including
contracts under which the contract holder is granted options to
purchase insurance or annuity benefits), or financial agreements which
are backed by group insurance or annuity contracts ("financial
agreements"). If such investments are to be made, the Plan
Administrator shall direct the Trustee to execute and deliver such
applications and other documents as are necessary to establish record
ownership, to value such policies, contracts or financial agreements
under the method of valuation selected by the Plan Administrator, and
to record or report such values to the Plan Administrator or any
investment manager selected by the Plan Administrator, in the form and
manner agreed to by the Plan Administrator.
The Plan Administrator may direct the Trustee to exercise or may
exercise directly the powers of contract holder under any policy, contract or
financial agreement, and the Trustee shall exercise such powers only upon
direction of the Plan Administrator. The Trustee shall have no authority to act
in its own discretion, with respect to the terms, acquisition, valuation,
continued holding and/or disposition of any such policy, contract or financial
agreement or any asset held thereunder. The Trustee shall be under no duty to
question any direction of the Plan Administrator or to review the form of any
such policy, contract or financial agreement or the selection of the issuer
thereof, or to make recommendations to the Plan Administrator or to any issuer
with respect to the form of any such policy, contract or financial agreement.
The Trustee shall be fully protected in acting in accordance with
written directions of the Plan Administrator, and shall be under no liability
for any loss of any kind which may result by reason of any action taken or
omitted by it in accordance with any direction of the Plan Administrator, or by
reason of inaction in the absence of written directions from the Plan
Administrator. In the event that the Plan Administrator directs that any monies
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or property be paid or delivered to the contract holder other than for the
benefit of specific individual beneficiaries, the Trustee agrees to accept such
monies or property as assets of the Trust subject to all the terms hereof.
13.10. Registration and Voting of Non-Putnam Investment Company Shares.
All shares of registered investment companies other than Investment Companies
shall be registered in the name of the Trustee or its nominee. Subject to any
requirements of applicable law and to the extent provided in an agreement
between Putnam and a third party investment provider, the Trustee shall transmit
to the Employer copies of any notices of shareholders' meetings, proxies or
proxy-soliciting materials, prospectuses or the annual or other reports to
shareholders, with respect to shares of registered investment companies other
than Investment Companies held in the Trust Fund. Notwithstanding any other
provision of the Plan, the Trustee shall vote shares of registered investment
companies other than Investment Companies in accordance with the directions of
the Employer. Directions as to voting such shares must be in writing on a form
approved by the Trustee or such other manner acceptable to the Trustee, signed
by the Employer and delivered to the Trustee within the time prescribed by it.
The Trustee shall vote those shares of registered investment companies other
than Investment Companies for which no voting directions are received in the
same proportion as it votes those shares for which it has received voting
directions.
ARTICLE 14. TOP-HEAVY PLANS
a. Superseding Effect. For any Plan Year in which Plan is determined to
be a Top-Heavy Plan under Section 14.2(b), the provisions of this Article 14
will supersede any conflicting provisions in the Plan or the Plan Agreement.
b. Definitions. For purposes of this Article 14, the terms below shall
be defined as follows:
i. Key Employee means any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was: (i) an officer of the Employer having annual
compensation greater than 50% of the amount in effect under Section
415(b)(1)(A) of the Code; (ii) an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in the
Employer having annual compensation exceeding the dollar limitation
under Section 415(c)(1)(A) of the Code; (iii) a 5% owner of the
Employer; or (iv) a 1% owner of the Employer having annual compensation
of more than $150,000. Annual compensation means compensation
satisfying the definition elected by the Employer in the Plan
Agreement, but including (i) amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code, and (ii) amounts of special pay
such as overtime, bonuses and commissions which are excluded from the
definition of Compensation in the Plan Agreement. The determination
period is the Plan Year containing the Determination Date and the four
preceding Plan Years. The determination of who is a Key Employee will
be made in accordance with Section 416(i)(1) of the Code and the
Regulations thereunder.
ii. Top-Heavy: The Plan is Top-Heavy for any Plan Year if any
of the following conditions exists:
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(1) If the Top-Heavy Ratio for this Plan exceeds 60%
and this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group
and the Top-Heavy Ratio for the group of plans exceeds 60%.
(3) If this plan is part of a Required Aggregation
Group and part of a Permissive Aggregation Group of Plans and
the Top-Heavy Ratio for the Permissive Aggregation group
exceeds 60%.
iii. Top-Heavy Ratio means the following:
(1) If the Employer maintains one or more qualified
defined contribution plans (or any simplified employee pension
plan) and the Employer has not maintained any qualified
defined benefit plan which during the 5-year period ending on
the Determination Date(s) has or has had accrued benefits, the
Top-Heavy ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date(s) (including any
part of any account distributed in the 5-year period ending on
the Determination Date(s)), and the denominator of which is
the sum of all account balances (including any part of any
account balance distributed in the 5-year period ending on the
Determination Date(s)), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both
the numerator and denominator of the Top-Heavy Ratio are
increased to reflect any contribution not actually made as of
the Determination Date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
(2) If the Employer maintains one or more qualified
defined contribution plans (or any simplified employee pension
plan) and the Employer maintains or has maintained one or more
qualified defined benefit plans which during the 5-year period
ending on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or Permissive
Aggregation Group as appropriate is a fraction, the numerator
of which is the sum of account balances under the aggregated
qualified defined contribution plan or plans for all Key
Employees, determined in accordance with (1) above, and the
Present Value of accrued benefits under the aggregated
qualified defined benefit plan or plans for all Key Employees
as of the Determination Date(s), and the denominator of which
is the sum of the account balances under the aggregated
qualified defined contributions plan or plans for all
Participants, determined in accordance with (1) above, and the
Present Value of accrued benefits under the qualified defined
benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with
Section 416 of the Code and the regulations thereunder. The
accrued benefits under a defined benefit plan in both the
numerator and denominator of the Top-Heavy Ratio are increased
for any distribution of an accrued benefit made in the 5-year
period ending on the Determination Date.
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(3) For purposes of (1) and (2) above, the value of
account balances and the Present Value of accrued benefits
will be determined as of the most recent Valuation Date that
falls within or ends with the 12-month period ending on the
Determination Date; except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
Plan Years of a defined benefit plan. The account balances and
accrued benefits of a Participant (A) who is not a Key
Employee but who was a Key Employee in a prior Plan Year, or
(B) who has not been credited with at least one Hour of
Service for the Employer during the 5-year period ending on
the Determination Date, will be disregarded. The calculation
of the Top-Heavy Ratio, and the extent to which distributions,
rollovers and transfers are taken into account will be made in
accordance with Section 416 of the Code and the regulations
thereunder. Deductible Employee contributions will not be
taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of account balances
and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (a) the method, if any,
that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
iv. Permissive Aggregation Group means the Required
Aggregation Group of plans plus any other qualified plan or plans (or
simplified employee pension plan) of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Sections 401(a)(4) and 410 of
the Code.
v. Required Aggregation Group means (i) each qualified plan of
the Employer in which at least one Key Employee participates or
participated at any time during the determination period (regardless of
whether the Plan has terminated) and (ii) any other qualified plan of
the Employer which enables a plan described in (i) to meet the
requirements of Section 401(a)(4) or 410 of the Code.
vi. Determination Date means, for any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan Year. For the
first Plan Year of the Plan, the Determination Date is the last day of
that Plan Year.
vii. Valuation Date means the last day of the Plan Year.
viii. Present Value means present value based only on the
interest and mortality rates specified by the Employer in the Plan
Agreement.
c. Minimum Allocation.
i. Except as otherwise provided in paragraphs (c) and (d)
below, the Employer contributions and Forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be less than the
lesser of 3% of such Participant's
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Earnings, or in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Section 401 of the Code, the
largest percentage of Employer contributions and Forfeitures, as a
percentage of the Key Employee's Earnings, allocated on behalf of any
Key Employee for that year. The minimum allocation is determined
without regard to any Social Security contribution. This minimum
allocation shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive an allocation,
or would have received a lesser allocation of the Employer's
contributions and Forfeitures for the Plan Year because of (1) the
Participant's failure to be credited with at least 1,000 Hours of
Service, or (2) the Participant's failure to make mandatory Employee
contributions to the Plan, or (3) the Participant's receiving Earnings
less than a stated amount. Neither Elective Deferrals, Employer
Matching Contributions nor Qualified Matching Contributions for non-Key
Employees shall be taken into account for purposes of satisfying the
requirement of this Section 14.3(a).
ii. For purposes of computing the minimum allocation, Earnings
will mean Section 415 Compensation as defined in Section 6.5(b) of the
Plan.
iii. The provision in paragraph (a) above shall not apply to
any Participant who was not employed by the Employer on the last day of
the Plan Year.
iv. The provision in paragraph (a) above shall not apply to
any Participant to the extent he is covered under any other plan or
plans of the Employer, and the Employer has provided in the Plan
Agreement that the minimum allocation requirement applicable to
Top-Heavy Plans will be met in the other plan or plans. Notwithstanding
the foregoing, if the Employer has adopted Putnam paired plans (as
described in Section 4.6) and the Participant is eligible to
participate in both paired plans, the minimum allocation described in
paragraph (a) shall be provided by the Putnam Money Purchase Pension
Plan.
v. The minimum allocation required (to the extent required to
be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or (D) of the Code.
d. Adjustment of Fractions. For any Plan Year in which the
Plan is Top-Heavy, the Defined Benefit Fraction and the Defined
Contribution Fraction described in Article 6 shall each be computed
using 100% of the dollar limitations specified in Sections 415(b)(1)(A)
and 415(c)(1)(A) instead of 125%. The foregoing requirement shall not
apply if the Top-Heavy Ratio does not exceed 90% and the Employer has
elected in the Plan Agreement to provide increased minimum allocations
or benefits satisfying Section 416(h)(2) of the Code.
e. Minimum Vesting Schedules. For any Plan Year in which this
Plan is Top-Heavy (and, if the Employer so elects in the Plan
Agreement, for any subsequent Plan Year), a minimum vesting schedule
will automatically apply to the Plan, as follows:
i. If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule 100% immediate vesting, the Three-Year
Cliff, Five-Year Graded or Six-Year Graded schedule, then the schedule
selected in the Plan Agreement shall continue to apply for any Plan
Year to which this Section 14.5 applies.
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ii. If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule the Five-Year Cliff schedule, then the
Three-Year Cliff schedule shall apply in any Plan Year to which this
Section 14.5 applies.
iii. If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule the Seven-Year Graded schedule, then
the Six-Year Graded schedule shall apply in any Plan Year to which this
Section 14.5 applies.
iv. If the Employer has selected in the Plan Agreement as the
Plan's regular vesting schedule a schedule other than those described
in paragraphs (a), (b) and (c), then the Top-Heavy schedule specified
by the Employer in the Plan Agreement for this purpose shall apply in
any Plan Year to which this Section 14.5 applies.
The minimum vesting schedule applies to all benefits within the meaning
of Section 411(a)(7) of the Code except those attributable to Elective
Deferrals, rollover contributions described in Section 4.5, Qualified Matching
Contributions, Qualified Nonelective Contributions, or Participant
Contributions, but including benefits accrued before the effective date of
Section 416 of the Code and benefits accrued before the Plan became Top-Heavy.
Further, no reduction in a Participant's nonforfeitable percentage may occur in
the event the Plan's status as Top-Heavy changes for any Plan Year. However, the
vested, portion of the Employer Contribution Account or Employer Matching
Account of any Employee who does not have an Hour of Service after the Plan has
initially become Top-Heavy will be determined without regard to this Section
14.5.
ARTICLE 15. ADMINISTRATION OF THE PLAN
a. Plan Administrator. The Plan shall be administered by the
Employer, as Plan Administrator and Named Fiduciary within the meaning
of ERISA, under rules of uniform application; provided, however, that
the Plan Administrator's duties and responsibilities may be delegated
to a person appointed by the Employer or a committee established by the
Employer for that purpose, in which case the committee shall be the
Plan Administrator and Named Fiduciary. The members of such a committee
shall act by majority vote, and may by majority vote authorize any one
or ones of their number to act for the committee. The person or
committee (if any) initially appointed by the Employer may be named in
the Plan Agreement, but the Employer may remove any such person or
committee member by written notice to him, and any such person or
committee may resign by written notice to the Employer, without the
necessity of amending the Plan Agreement. To the extent permitted under
applicable law, the Plan Administrator shall have the sole authority to
enforce the terms hereof on behalf of any and all persons having or
claiming any interest under the Plan, and shall be responsible for the
operation of the Plan in accordance with its terms. The Plan
Administrator shall have discretionary authority to determine all
questions arising out of the administration, interpretation and
application of the Plan, all of which determinations shall be
conclusive and binding on all persons. The Plan Administrator, in
carrying out its responsibilities under the Plan, may rely upon the
written opinions of its counsel and on certificates of physicians.
Subject to the provisions of the Plan and applicable law, the Plan
Administrator shall have no liability to any person as a result of any
action taken or omitted hereunder by the Plan Administrator.
b. Claims Procedure. Claims for participation in or
distribution of benefits under the Plan shall be made in writing to the
Plan Administrator, or
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an agent designated by the Plan Administrator whose name shall have
been communicated to all Participants and other persons as required by
law. If any claim so made is denied in whole or in part, the claimant
shall be furnished promptly by the Plan Administrator with a written
notice:
i. setting forth the reason for the denial,
ii. making reference to pertinent Plan provisions,
iii. describing any additional material or information from
the claimant which is necessary and why, and
iv. explaining the claim review procedure set forth herein.
Within 60 days after denial of any claim for participation or
distribution under the Plan, the claimant may request in writing a review of the
denial by the Plan Administrator. Any claimant seeking review hereunder shall be
entitled to examine all pertinent documents and to submit issues and comments in
writing. The Plan Administrator shall render a decision on review hereunder;
provided, that if the Plan Administrator determines that a hearing would be
appropriate, its decision on review shall be rendered within 120 days after
receipt of the request for review. The decision on review shall be in writing
and shall state the reason for the decision, referring to the Plan provisions
upon which it is based.
c. Employer's Responsibilities. The Employer shall be responsible for:
i. Keeping records of employment and other matters containing
all relevant data pertaining to any person affected hereby and his
eligibility to participate, allocations to his Accounts, and his other
rights under the Plan;
ii. Periodic, timely filing of all statements, reports and
returns required to be filed by ERISA;
iii. Timely preparation and distribution of disclosure
materials required by ERISA;
iv. Providing notice to interested parties as required by
Section 7476 of the
Code;
v. Retention of records for periods required by law; and
vi. Seeing that all persons required to be bonded on account
of handling assets of the Plan are bonded.
d. Recordkeeper. The Recordkeeper is hereby designated as
agent of the Employer under the Plan to perform directly or through
agents certain ministerial duties in connection with the Plan, in
particular:
i. To keep and regularly furnish to the Employer a detailed
statement of each Participant's Accounts, showing contributions thereto
by the Employer and the Participant, Investment Products purchased
therewith, earnings thereon and Investment
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Products purchased therewith, and each redemption or distribution made
for any reason, including fees or benefits; and
ii. To the extent agreed between the Employer and the
Recordkeeper, to prepare for the Employer or to assist the Employer to
prepare such returns, reports or forms as the Employer shall be
required to furnish to Participants and Beneficiaries or other
interested persons and to the Internal Revenue Service or the
Department of Labor; all as may be more fully set forth in a service
agreement executed by the Employer and the Recordkeeper. If the
Employer does not appoint another person or entity as Recordkeeper, the
Employer itself shall be the Recordkeeper.
e. Prototype Plan. Putnam is the sponsor of the Putnam Basic
Plan Document, a prototype plan approved as to form by the Internal
Revenue Service. Provided that an Employer's adoption of the Plan is
made known to and accepted by Putnam in accordance with the Plan
Agreement, Putnam will inform the Employer of amendments to the
prototype plan and provide such other services in connection with the
Plan as may be agreed between Putnam and the Employer. Putnam may
impose for its services as sponsor of the prototype plan such fees as
it may establish from time to time in a fee schedule addressed to the
Employer. Such fees shall, unless paid by the Employer, be paid from
the Trust Fund, and shall in that case be charged pro rata against the
Accounts of all Participants. The Trustee is expressly authorized to
cause Investment Products to be sold or redeemed for the purpose of
paying such fees.
ARTICLE 16. TRUSTEE
a. Powers and Duties of the Trustee. The Trustee shall have
the authority, in addition to any authority given by law, to exercise
the following powers in the administration of the Trust:
i. To invest all or a part of the Trust Fund in Investment
Products in accordance with the investment instructions delivered by
the Employer pursuant to Section 13.3, without restriction to
investments authorized for fiduciaries, including without limitation
any common, collective or commingled trust fund maintained by the
Trustee (or any other such fund, acceptable to Putnam and the Trustee,
that qualifies for exemption from federal income tax pursuant to
Revenue Ruling 81-100). Any investment in, and any terms and conditions
of, any such common, collective or commingled trust fund available only
to employee trusts which meet the requirements of the Code, or
corresponding provisions of subsequent income tax laws of the United
States, shall constitute an integral part of this Agreement;
ii. If Putnam and the Trustee have consented thereto in
writing, to invest without limit in stock of the Employer or any
affiliated company;
iii. To dispose of all or part of the investments, securities
or other property which may from time to time or at any time constitute
the Trust Fund in accordance with the written directions furnished by
the Employer for the investment of Participants' separate Accounts or
the payment of benefits or expenses of the Plan, and to make, execute
and deliver to the purchasers thereof good and sufficient deeds of
conveyance therefore, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title and
ownership thereto, free and discharged
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of all trusts and without liability on the part of such purchasers to
see to the application of the purchase money;
iv. To hold cash uninvested to the extent necessary to pay
benefits or expenses of the Plan;
v. To follow the directions of an investment manager appointed
pursuant to Section 13.7;
vi. To cause any investment of the Trust Fund to be registered
in the name of the Trustee or the name of its nominee or nominees or to
retain such investment unregistered or in a form permitting transfer by
delivery; provided that the books and records of the Trustee shall at
all times show that all such investments are part of the Trust Fund;
vii. Upon written direction of or through the Employer, to
vote in person or by proxy (in accordance with Sections 13.6 and 13.10
and, in the case of stock of the Employer, at the direction of the
Employer or Participants in accordance with Section 13.8) with respect
to all securities that are part of the Trust Fund;
viii. To consult and employ any suitable agent to act on
behalf of the Trustee and to contract for legal, accounting, clerical
and other services deemed necessary by the Trustee to manage and
administer the Trust Fund according to the terms of the Plan;
ix. Upon the written direction of the Employer, to make loans
from the Trust Fund to Participants in amounts and on terms approved by
the Plan Administrator in accordance with the provisions of the Plan;
provided that the Employer shall have the sole responsibility for
computing and collecting all loan repayments required to be made under
the Plan; and
x. To pay from the Trust Fund all taxes imposed or levied with
respect to the Trust Fund or any part thereof under existing or future
laws, and to contest the validity or amount of any tax assessment,
claim or demand respecting the Trust Fund or any part thereof.
b. Limitation of Responsibilities. Except as may otherwise be
required under applicable law, neither the Trustee nor any of its
agents shall have any responsibility for:
i. Determining the correctness of the amount of any
contribution for the sole collection or payment of contributions, which
shall be the sole responsibility of the Employer;
ii. Loss or breach caused by any Participant's exercise of
control over his Accounts, which shall be the sole responsibility of
the Participant;
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iii. Loss or breach caused by the Employer's exercise of
control over Accounts pursuant to Section 13.3, which shall be the sole
responsibility of the Employer;
iv. Performance of any other responsibilities not specifically
allocated to them under the Plan.
c. Fees and Expenses. The Trustee's fees for performing its
duties hereunder shall be such reasonable amounts as shall be
established by the Trustee from time to time in a fee schedule
addressed to the Employer. Such fees, any taxes of any kind which may
be levied or assessed upon or in respect of the Trust Fund and any and
all expenses reasonably incurred by the Trustee shall, unless paid by
the Employer, be paid from the Trust Fund and shall, unless allocable
to the Accounts of specific Participants, be charged pro rata against
the Accounts of all Participants either pro rata, on the basis of a
fixed sum per Participant, or on the basis of a fixed sum per Account
of a Participant, as shall be provided in the Service Agreement. The
Trustee is expressly authorized to cause Investment Products to be sold
or redeemed for the purpose of paying such amounts. Charges and
expenses incurred in connection with a specific Investment Product,
unless allocable to the Accounts of specific Participants, shall be
charged pro rata against the Accounts of all Participants for whose
benefit amounts have been invested in the specific Investment Product
either pro rata, on the basis of a fixed sum per Participant, or on the
basis of fixed sum per Account of a Participant, as shall be provided
in the Service Agreement.
d. Reliance on Employer. The Trustee and its agents shall rely
upon any decision of the Employer, or of any person authorized by the
Employer, purporting to be made pursuant to the terms of the Plan, and
upon any information or statements submitted by the Employer or such
person (including those relating to the entitlement of any Participant
to benefits under the Plan), and shall not inquire as to the basis of
any such decision or information or statements, and shall incur no
obligation or liability for any action taken or omitted in reliance
thereon. The Trustee and its agents shall be entitled to rely on the
latest written instructions received from the Employer as to the person
or persons authorized to act for the Employer hereunder, and to sign on
behalf of the Employer any directions or instructions, until receipt
from the Employer of written notice that such authority has been
revoked.
e. Action Without Instructions. If the Trustee receives no
instructions from the Employer in response to communications sent by
registered or certified mail to the Employer at its last known address
as shown on the books of the Trustee, then the Trustee may make such
determinations with respect to administrative matters arising under the
Plan as it considers reasonable, notwithstanding any prior instructions
or directions given by or on behalf of the Employer, but subject to any
instruction or direction given by or on behalf of the Participants. To
the extent permitted by applicable law, any determination so made will
be binding on all persons having or claiming any interest under the
Plan or Trust, and the Trustee will incur no obligation or
responsibility for any such determination made in good faith or for any
action taken pursuant thereto. In making any such determination the
Trustee may require that it be furnished with such relevant documents
as it reasonable considers necessary.
f. Advice of Counsel. The Trustee may consult with legal
counsel (who may, but need not be, counsel for the Employer) concerning
any questions which may arise with respect to its rights and duties
under the Plan, and the opinion of such counsel shall be full and
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complete protection to the extent permitted by applicable law in the
respect of any action taken or omitted by the Trustee hereunder in
accordance with the opinion of such counsel.
g. Accounts. The Trustee shall keep full accounts of all
receipts and disbursements which pertain to investments in Investment
Products, and of such other transactions as it is required to perform
hereunder. Within a reasonable time following the close of each Plan
Year, or upon its removal or resignation or upon termination of the
Trust and at such other times as may be appropriate, the Trustee shall
render to the Employer and any other persons as may be required by law
an account of its administration of the Plan and Trust during the
period since the last previous such accounting, including such
information as may be required by law. The written approval of any
account by the Employer and all other persons to whom an account is
rendered shall be final and binding as to all matters and transactions
stated or shown therein, upon the Employer and Participants and all
persons who then are or thereafter become interested in the Trust. The
failure of the Employer or any other person to whom an account is
rendered to notify the party rendering the account within 60 days after
the receipt of any account of his or its objection to the account shall
be the equivalent of written approval. If the Employer or any other
person to whom an account is rendered files any objections within such
60-day period with respect to any matters or transactions stated or
shown in the account and the Employer or such other person and the
party rendering the account cannot amicably settle the questions raised
by such objections, the party rendering the account and the Employer or
such person shall have the right to have such questions settled by
judicial proceedings, although the Employer or such other person to
whom an account is rendered shall have, to the extent permitted by
applicable law, only 60 days from filing of written objection to the
account to commence legal proceedings. Nothing herein contained shall
be construed so as to deprive the Trustee of the right to have a
judicial settlement of its accounts. In any proceeding for a judicial
settlements of any account or for instructions, the only necessary
parties shall be the Trustee, the Employer and persons to whom an
account is required by law to be rendered.
h. Access to Records. The Trustee shall give access to its
records with respect to the Plan at reasonable times and on reasonable
notice to any person required by law to have access to such records.
i. Successors. Any corporation into which the Trustee may
merge or with which it may consolidate or any corporation resulting
from any such merger or consolidation shall be the successor of the
Trustee without the execution or filing of any additional instrument or
the performance of any further act.
j. Persons Dealing with Trustee. No person dealing with the
Trustee shall be bound to see to the application of any money or
property paid or delivered to the Trustee or to inquire into the
validity or propriety of any transactions.
k. Resignation and Removal; Procedure. The Trustee may resign
at any time by giving 60 days' written notice to the Employer and to
Putnam. The Employer may remove the Trustee at any time by giving 60
days' written notice to the party removed and to Putnam. In any case of
resignation or removal hereunder, the period of notice may be reduced
to such shorter period as is satisfactory to the Trustee and the
Employer. Notwithstanding anything to the contrary herein, any
resignation hereunder shall take effect at the time notice thereof is
given if the Employer may no longer participate in the prototype Plan
and is deemed to have an individually designed plan at the time notice
is given.
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l. Action of Trustee Following Resignation or Removal. When
the resignation or removal of the Trustee becomes effective, the
Trustee shall perform all acts necessary to transfer the Trust Fund to
its successor. However, the Trustee may reserve such portion of the
Trust Fund as it may reasonably determine to be necessary for payment
of its fees and any taxes and expenses, and any balance of such reserve
remaining after payment of such fees, taxes and expenses shall be paid
over to its successor. The Trustee shall have no responsibility for
acts or omissions occurring after its resignation becomes effective.
m. Effect of Resignation or Removal. Resignation or removal of
the Trustee shall not terminate the Trust. In the event of any vacancy
in the position of Trustee, whether the vacancy occurs because of the
resignation or removal of the Trustee, the Employer shall appoint a
successor to fill the vacant position. If the Employer does not appoint
such a successor who accepts appointment by the later of 60 days after
notice of resignation or removal is given or by such later date as the
Trustee and Employer may agree in writing to postpone the effective
date of the Trustee's resignation or removal, the Trustee may apply to
a court of competent jurisdiction for such appointment or cause the
Trust to be terminated, effective as of the date specified by the
Trustee, in writing delivered to the Employer. Each successor Trustee
so appointed and accepting a trusteeship hereunder shall have all of
the rights and powers and all of the duties and obligations of the
original Trustee, under the provisions hereof, but shall have no
responsibility for acts or omissions before he becomes a Trustee.
n. Fiscal Year of Trust. The fiscal year of the Trust will
coincide with the Plan Year.
o. Limitation of Liability. Except as may otherwise be
required by law and other provisions of the Plan, no fiduciary of the
Plan, within the meaning of Section 3(21) of ERISA, shall be liable for
any losses incurred with respect to the management of the Plan, nor
shall he or it be liable for any acts or omissions except those caused
by his or its own negligence or bad faith in failing to carry out his
or its duties under the terms contained in the Plan.
p. Indemnification. Subject to the limitations of applicable
law, the Employer agrees to indemnify and hold harmless (i) all
fiduciaries, within the meaning of ERISA Sections 3(21) and 404, and
(ii) Putnam, for all liability occasioned by any act of such party or
omission to act, in good faith and without negligence, and for all
expenses incurred by any such party in determining its duty or
liability under ERISA with respect to any question under the Plan.
ARTICLE 17. AMENDMENT
a. General. The Employer reserves the power at any time or
times to amend the provisions of the Plan and the Plan Agreement to any
extent and in any manner that it may deem advisable. If, however, the
Employer makes any amendment (including an amendment occasioned by a
waiver of the minimum funding requirement under Section 412(d) of the
Code) other than
i. a change in an election made in the Plan Agreement,
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ii. amendments stated in the Plan Agreement which allow the
Plan to satisfy Section 415 and to avoid duplication of minimums under
Section 416 of the Code because of the required aggregation of multiple
plans, or
iii. model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause
the Plan to be treated as individually designed,
the Employer shall cease to participate in this prototype Plan and will be
considered to have an individually designed plan. In that event, Putnam shall
have no further responsibility to provide to the Employer any amendments or
other material incident to the prototype plan, and Putnam may resign immediately
as Trustee and as Recordkeeper. Any amendment shall be made by delivery to the
Trustee (and the Recordkeeper, if any) of a written instrument executed by the
Employer providing for such amendment. Upon the delivery of such instrument to
the Trustee, such instrument shall become effective in accordance with its terms
as to all Participants and all persons having or claiming any interest
hereunder, provided, that the Employer shall not have the power:
(1) to amend the Plan in such a manner as would cause
or permit any part of the assets of the Trust to be diverted
to purposes other than the exclusive benefit of Participants
or their Beneficiaries, or as would cause or permit any
portion of such assets to revert to or become the property of
the Employer.
(2) to amend the Plan retroactively in such a manner
as would have the effect of decreasing a Participant's accrued
benefit, except that a Participant's Account balance may be
reduced to the extent permitted under Section 412(c)(8) of the
Code. For purposes of this paragraph (2), an amendment shall
be treated as reducing a Participant's accrued benefit if it
has the effect of reducing his Account balance, or of
eliminating an optional form of benefit with respect to
amounts attributable to contributions made performed before
the adoption of the amendment; or
(3) to amend the Plan so as to decrease the portion
of a Participant's Account balance that has become vested, as
compared to the portion that was vested, under the terms of
the Plan without regard to the amendment, as of the later of
the date the amendment is adopted or the date it becomes
effective.
(4) to amend the Plan in such a manner as would
increase the duties or liabilities of the Trustee or the
Recordkeeper unless the Trustee or the Recordkeeper consents
thereto in writing.
b. Delegation of Amendment Power. The Employer and all
sponsoring organizations of the Putnam Basic Plan Document delegate to
Putnam Mutual Funds Corp., the power to amend the Plan (including the
power to amend this Section 18.2 to name a successor to which such
power of amendment shall be delegated), for the purpose of adopting
amendments which are certified to Putnam Mutual Funds Corp., by counsel
satisfactory to it, as necessary or appropriate under applicable law,
including any regulation or ruling issued by the United States Treasury
Department or any other federal or state department or agency; provided
that Putnam Mutual Funds Corp., or such successor may amend the Plan
only if it has mailed a copy of the proposed amendment to the Employer
at its last known
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address as shown on its books by the d ate on which it delivers
written instrument providing for such amendment, and only if the same
amendment is made on said date to all plans in this form as to which
Putnam Mutual Funds Corp., or such successor has a similar power of
amendment. If a sponsoring organization does not adopt any amendment
made by Putnam Mutual Funds Corp., such sponsoring organization shall
cease to participate in this prototype Plan and will be considered to
have an individually designed plan. If, upon the submission of this
Putnam Basic Plan Document #07 to the Internal Revenue Service for a
determination letter, the Internal Revenue Service determines that
changes are required to the Basic Plan Document but not to the form of
Plan Agreement, Putnam shall furnish a copy of the revised Basic Plan
Document to the Employer and the Employer will not be required to
execute a revised Plan Agreement.
ARTICLE 18. TERMINATION OF THE PLAN AND TRUST
a. General. The Employer has established the Plan and the
Trust with the bonafide intention and expectation that contributions
will be continued indefinitely, but the Employer shall have no
obligation or liability whatsoever to maintain the Plan for any given
length of time and may discontinue contributions under the Plan or
terminate the Plan at any time by written notice delivered to the
Trustee, without any liability whatsoever for any such discontinuance
or termination.
b. Events of Termination. The Plan will terminate upon the
happening of any of the following events:
i. Death of the Employer, if a sole proprietor, or dissolution
or termination of the Employer, unless within 60 days thereafter
provision is made by the successor to the business with respect to
which the Plan was established for the continuation of the Plan, and
such continuation is approved by the Trustee;
ii. Merger, consolidation or reorganization of the Employer
into one or more corporations or organizations, unless the surviving
corporations or organizations adopt the Plan by an instrument in
writing delivered to the Trustee within 60 days after such a merger,
consolidation and reorganization;
iii. Sale of all or substantially all of the assets of the
Employer, unless the purchaser adopts the Plan by an instrument in
writing delivered to the Trustee within 60 days after the sale;
iv. The institution of bankruptcy proceedings by or against
the Employer, or a general assignment by the Employer to or for the
benefit of its creditors; or
v. Delivery of notice of termination as provided in Section
18.1.
c. Effect of Termination. Notwithstanding any other provisions
of this Plan, other than Section 18.4, upon termination of the Plan or
complete discontinuance of contributions thereunder, each Participant's
Accounts will become fully vested and nonforfeitable, and upon partial
termination of the Plan, the Accounts of each Participant affected by
the partial termination will become fully vested and nonforfeitable.
The Employer shall notify the Trustee in writing of such termination,
partial termination or complete discontinuance of contributions. In the
event of the complete termination of the Plan or
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discontinuance of contributions, the Trustee will, after payment of
all expenses of the Trust Fund, make distribution of the Trust assets
to the Participants or other persons entitled thereto, in such form as
the Employer may direct pursuant to Article 10 or, in the absence of
such direction, in a single payment in cash or in kind. Upon
completion of such distributions under this Article, the Trust will
terminate, the Trustee will be relieved from their obligations under
the Trust, and no Participant or other person will have any further
claim thereunder.
d. Approval of Plan. Notwithstanding any other provision of
the Plan, if the Employer fails to obtain or to retain the approval by
the Internal Revenue Service of the Plan as a qualified plan under
Section 401(a) of the Code, then (i) the Employer shall promptly notify
the Trustee, and (ii) the Employer may no longer participate in the
Putnam prototype plan, but will be deemed to have an individually
designed plan. If it is determined by the Internal Revenue Service that
the Plan upon its initial adoption does not qualify under Section 401
(a) of the Code, all assets then held under the Plan will be returned
within one year of the denial of initial qualification to the
Participants and the Employer to the extent attributable to their
respective contributions and any income earned thereon, but only if the
application for qualification is made by the time prescribed by law for
filing the Employer's federal income tax return for the taxable year in
which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe. Upon such distribution, the Plan will be
considered to be rescinded and to be of no force or effect.
ARTICLE 19. TRANSFERS TO OR FROM OTHER QUALIFIED PLANS;
MERGERS
a. General. Notwithstanding any other provision hereof,
subject to the approval of the Trustee there may be transferred to the
Trustee all or any of the assets held (whether by a trustee, custodian
or otherwise) in respect of any other plan which satisfies the
applicable requirements of Section 401(a) of the Code and which is
maintained for the benefit of any Employee (provided, however, that the
Employee is not a member of a class of Employees excluded from
eligibility to participate in the Plan). Any such assets so transferred
shall be accompanied by written instructions from the Employer naming
the persons for whose benefit such assets have been transferred and
showing separately the respective contributions made by the Employer
and by the Participants and the current value of the assets
attributable thereto. Notwithstanding the foregoing, if a Participant's
employment classification changes under Section 3.5 such that he begins
participation in another plan of the Employer, his Account, if any,
shall, upon the Administrator's direction, be transferred to the plan
in which he has become eligible to participate, if such plan permits
receipt of such Account.
b. Amounts Transferred. The Employer shall credit any assets
transferred pursuant to Section 19.1 or Section 3.5 to the appropriate
Accounts of the persons for whose benefit such assets have been
transferred. Any amounts credited as contributions previously made by
an employer or by such persons under such other plan shall be treated
as contributions previously made under the Plan by the Employer or by
such persons, as the case may be.
c. Merger or Consolidation. The Plan shall not be merged or
consolidated with any other plan, nor shall any assets or liabilities
of the Trust Fund be transferred to any other plan, unless each
Participant would receive a benefit immediately after the transaction,
if the Plan then terminated, which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
transaction if the Plan had then terminated.
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ARTICLE 20. MISCELLANEOUS
a. Notice of Plan. The Plan shall be communicated to all
Participants by the Employer on or before the last day on which such
communication may be made under applicable law.
b. No Employment Rights. Neither the establishment of the Plan
and the Trust, nor any amendment thereof, nor the creation of any fund
or account, nor the payment of any benefits shall be construed as
giving to any Participant or any other person any legal or equitable
right against the Employer or the Trustee, except as provided herein or
by ERISA; and in no event shall the terms of employment or service of
any Participant be modified or in any way be affected hereby.
c. Distributions Exclusively From Plan. Participants and
Beneficiaries shall look solely to the assets held in the Trust for the
payment of any benefits under the Plan.
d. No Alienation. The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution
or levy of any kind, and any attempt to cause such benefits to be so
subjected shall not be recognized, except as provided in Section 12.4
or in accordance with a Qualified Domestic Relations Order. The Plan
Administrator shall determine whether a domestic relations order is
qualified in accordance with written procedures adopted by the Plan
Administrator. Notwithstanding the foregoing, an order shall not fail
to be a Qualified Domestic Relations Order merely because it requires a
distribution to an alternate payee (or the segregation of accounts
pending distribution to an alternate payee) before the Participant is
otherwise entitled to a distribution under the Plan.
e. Provision of Information. The Employer and the Trustee
shall furnish to each other such information relating to the Plan and
Trust as may be required under the Code or ERISA and any regulations
issued or forms adopted by the Treasury Department or the Labor
Department or otherwise thereunder.
f. No Prohibited Transactions. The Employer and the Trustee
shall, to the extent of their respective powers and authority under the
Plan, prevent the Plan from engaging in any transaction known by that
person to constitute a transaction prohibited by Section 4975 of the
Code and any rules,.or regulations with respect thereto.
g. Governing Law. The Plan shall be construed, administered,
regulated and governed in all respects under and by the laws of the
United States, and to the extent permitted by such laws, by the laws of
the Commonwealth of Massachusetts.
h. Gender. Whenever used herein, a pronoun in the masculine
gender includes the feminine gender unless the context clearly
indicates otherwise.
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<PAGE>
ANICOM 401(k) SAVINGS PLAN
PLAN AGREEMENT #001
This is the Plan Agreement for the ANICOM 401(k) SAVINGS PLAN with optional
profit sharing plan provisions. Pleas consult a tax or legal advisor and review
the entire form before you sign it. If you fail to fill out this Plan Agreement
properly, the Plan may be disqualified. By executing this Plan Agreement, the
Employer establishes a 401(k) and profit sharing plan and trust upon the terms
and conditions of Putnam Basic Plan Document #07, as supplemented and modified
by the provisions elected by the Employer in this Plan Agreement. Due to the
Addendum to the document and pursuant to section 17.1 of Putnam Basic Plan
Document #07, this Plan is NOT a Putnam Prototype but is an individually
designed plan.
* * * * *
1. Employer Information. The Employer adopting this Plan is:
A. Employer Name: Anicom, Inc.
B. Employer Identification Number: 36-3885212
C. Employer Address: 6133 North River Road
Suite 1000
Rosemont, IL 60018
D. SIC Code: 5063
E. Employer Contact: Name: Gregory Fix
Title: VP & General Counsel
Phone#: 847-518-8700
F. Fiscal Year: January 1 through December 31
(month/day) (month/day)
G. Type of Entity (check one):
|X| Corporation |_| Partnership |_| Subchapter S Corporation
|_| Sole proprietorship |_| Other ___
H. Plan Name: Anicom 401(k) Savings Plan
I. Plan Number: 001 (complete)
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<PAGE>
2. Plan Information.
A. Plan Year. Check one:
|X| (1) The Calendar Year
|_| (2) The Plan Year will be the same as the Fiscal
Year of the Employer shown in 1.F. above.
If the Fiscal Year of the Employer changes,
the Plan Year will change accordingly.
|_| (3) The Plan Year will be the period of 12
months beginning on the first day of
__________ (month) and ending on the last
day of ___ (month).
|_| (4) A short Plan Year commencing on
__________ (month/day/year) and ending on
__________ (month/day/year) and immediately
thereafter the 12-consecutive month period
commencing on __ (month/day).
The Plan Year will also be your Plan's Limitation Year for
purposes of the contribution limitation rules in Article 6 of
the Plan.
B. Effective Date of Adoption of Plan.
(1) Are you adopting this Plan to replace an existing
plan?
|X| (a) Yes |_| (b) No
(2) If you answered Yes in 2.B(1) above, the Effective
Date of your adoption of this Replacement Plan will
be the first day of the current Plan Year unless you
elect a later date in (2)(b) below. Please complete
the following:
(a) January 1, 1995
Original Effective Date of the Plan you are Replacing
(b) December 1, 1998
Effective Date of this Replacement Plan
(3) If you answered No in 2B(1) above, the Effective Date
of your adoption of this Plan will be the day you
select below (not before the first day of the current
Plan Year, and not before the day your Business
began):
(a) The Effective Date is: ____________
month/day/year
C. Identifying Highly Compensated Employees.
Check either (1) or (2).
|X| (1) The Plan will use the regular method under
Plan Section 2.58(a) for identifying Highly
Compensated Employees.
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<PAGE>
If you selected this option and your Plan
Year is the calendar year, do you wish to
make the regular method's "calendar year
election" for identifying your Highly
Compensated Employees?
|X| (a) Yes |_| (b) No
|_| (2) The Plan will use the simplified method
under Plan Section 2.58(b) for identifying
Highly Compensated Employees.
3. Eligibility for Plan Participation (Plan Section 3.1).
Employees will be eligible to participate in the Plan when
they complete the requirements you select in A, B, C and D
below.
A. Classes of Eligible Employees. The Pla n will cover
all employees who have met the age and service
requirements with the following exclusions:
|_| (1) No exclusions. All job
classifications will be eligible.
|X| (2) The Plan will exclude employees
in a unit of Employees covered by a
collective bargaining agreement with
respect to which retirement benefits
were the subject of good faith
bargaining, with the exception of
the following collective bargaining
units, which will be included:
_____.
|X| (3) The Plan will exclude employees who
are non-resident aliens without U.S.
source income.
|_| (4) Employees of the following
Affiliated Employers (specify):
-----
-----
|_| (5) Leased Employees
|X| (6) Employees in the following other
classes (specify):
Employees of any acquired business
covered by another qualified plan
(unless otherwise provided).
B. Age Requirement (check and complete (1) or (2)):
|_| (1) No minimum age required for participation
|X| (2) Employees must reach age 21 (not over 21) to
participate
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<PAGE>
C. Service Requirements.
(1) Elective Deferrals. To become eligible, an employee must
complete (choose one):
|_| (a) No minimum service required.
|X| (b) One 6-month Eligibility Period
|_| (c) One _____-month Eligibility Period
(must be less than 12)
|_| (d) One 12-month Eligibility Period
(2) Employer Matching Contributions. To become eligible,
an employee must complete (choose one):
|_| (a) No minimum service required.
|X| (b) One 6-month Eligibility Period
|_| (c) One ___-month Eligibility Period
(must be less than 12)
|_| (d) One 12-month Eligibility Period
|_| (e) Two 12-month Eligibility Periods
(may only be chosen if you adopt the
vesting schedule under item
9.A(3)(a) to provide 100% full and
immediate vesting of Employer
Matching Contributions).
|_| (f) Not applicable. The Employer will
not make Employer Matching
Contributions.
(3) Profit Sharing Contributions. To become eligible, an
employee must complete (choose one):
|_| (a) No minimum service required.
|X| (b) One 6-month Eligibility Period
|_| (c) One ___-month Eligibility Period
(must be less than 12)
|_| (d) One 12-month Eligibility Period
|_| (e) Two 12-month Eligibility Periods
(may only be chosen if you adopt the
vesting schedule under item
9.a(3)(a) to provide for 100% full
and immediate vesting of Profit
Sharing Contributions)
|_| (f) Not applicable. The Employer will
not make Profit Sharing
Contributions.
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<PAGE>
(4) If the Employer acquired a business on or before the
Effective Date of this Plan and the Eligibility
Periods selected in (1), (2) and (3) for former
employees of that acquired business will include the
former employees' periods of employment with that
business, list the business below. Any acquired
business which had a plan which the Employer now
maintains must be listed below.
Periods of employment with businesses acquired by the
Employer will be included for purposes of the
Eligibility Periods selected above in every instance.
TW Communications is the only plan of an acquired
business which is being currently maintained by the
Employer.
(5) If the Employer acquires a business after the
Effective Date, the Eligibility Periods for an
employee of the acquired business will be the periods
selected in (1), (2) and (3) beginning on (check (a)
or (b)):
|X| (a) the date the employee began work
with the acquired business.
|_| (b) the date of the acquisition (i.e.,
the date the employee begins work
for the Employer).
(6) Hours of Service for Eligibility Periods.
(a) 6-Month Eligibility Period. To receive
credit for a 6-month Eligibility Period, an
employee must complete 6 months of service,
during which he completes at least:
|X| (i) 500 Hours of Service
|_| (ii) _______ Hours of Service
(under 500)
(b) 12-Month Eligibility Period. To receive
credit for a 12-month Eligibility Period, an
employee must complete 12 months of service,
during which he completes at least:
|_| (i) 1,000 Hours of Service
|_| (ii) _____ Hours of Service
(under 1,000)
(c) Other Eligibility Period. To receive credit
for the Eligibility Period selected in
3.C(1)(c), 3.C(2)(c) and/or 3.C(3)(c) above,
an employee must complete during it at
least:
|_| (i) ____ Hours of Service
(under 1000)
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<PAGE>
(7) Method of Crediting Hours of Service For Eligibility
and Vesting. Hours of Service will be credited to an
employee by the following method (check one):
|X| (a) Actual hours for which an employee
is paid
|_| (b) Any employee who has one actual
paid hour in the following period
will be credited with the number of
Hours of Service indicated (check
one):
|_| (i) Day (10 Hours of
Service)
|_| (ii) Week (45 Hours of
Service)
|_| (iii) Semi-monthly
payroll period
(95 Hours of
Service)
|_| (iv) Month (190 Hours
of Service)
(8) Entry Dates. Each employee in an eligible class who
completes the age and service requirements specified
above will begin to participate in the Plan on (check
one):
|_| (a) The first day of the month in which
he fulfills the requirements.
|X| (b) The first of the following dates
occurring after he fulfill the
requirements (check one):
|_| (i) The first day of the month
following the date he
fulfills the requirements
(monthly).
|_| (ii) The first day of the first,
fourth, seventh and tenth
months in a Plan Year
(quarterly).
|_| (iii) The first day of the first
month and the seventh month
in a Plan Year
(semiannually).
|X| (c) Other: Notwithstanding the
foregoing, in the case of an
acquired business, the entry date
shall be the second of such dates,
or, if administratively feasible,
the date provided for above. (May be
no later than (i) the first day of
the Plan Year after which he
fulfills the requirements, and (ii)
the date six months after the date
on which he fulfills the
requirements, whichever occurs
first.)
D. (For New Plans Only) Will all eligible Employees as of the
Effective Date be required to meet the age and service
requirements for participation specified in B and C above?
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<PAGE>
|_| (a) Yes
|_| (b) No. Eligible Employees will be eligible to
become Participants as of the Effective Date
even if they have not satisfied (check one
or both):
|_| (i) the age requirement.
|_| (ii) the service requirement.
4. Contributions.
A. Elective Deferrals (Plan Section 5.2). Your Plan will allow
employees to elect pre-tax contributions under Section 401(k)
of the Code. You must complete this part A.
(1) A Participant may make Elective Deferrals for each
year in an amount not to exceed (check one):
|X| (a) 15% of his Earnings
|_| (b) _____% of his Earnings not to exceed
$___________
(specify a dollar amount)
|_| (c) $________ (specify a dollar amount)
(2) Will a Participant be required to make a minimum
Elective Deferral in order to make Elective Deferrals
under the Plan?(check one and complete as applicable)
|X| (a) No.
|_| (b) Yes. The minimum Elective Deferral
will be _____% of the Participant's
Earnings.
(3) A Participant may begin to make Elective Deferrals,
or change the amount of his Elective Deferrals, as of
the Following dates (check one):
|X| (a) First business day of each month
(monthly).
|_| (b) First business day of the first,
fourth, seventh and tenth months of
the Plan Year (quarterly).
|_| (e) First business day of the first and
seventh months of the Plan Year
(semiannually).
|_| (d) First business day of the Plan Year
only (annually).
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<PAGE>
|_| (e) Other: ______
(4) Will Participants be permitted to make separate
Elective Deferrals of bonuses, even if bonuses have
otherwise been excluded from Compensation for the
purpose of Elective Deferrals under 7.A(1)?
|X| (a) Yes |_| (b) No
B. Employer Matching Contributions. (Plan Section 5.8). Complete
this part B only if you will make Employer Matching
Contributions under the Plan.
(1) The Employer will contribute and will allocate to
each Qualified Participant's Employee Matching
Account an Employer Matching Contribution on the
basis set forth below:
|X| (a) Discretionary matching
contributions. (The Employer may
select this option in addition to
option (b) if the Employer wishes to
have the option to make
discretionary matching contributions
in addition to fixed matching
contributions.)
|_| (b) Fixed matching contributions.
|_| (i) based on Elective Deferrals:
|_| (A) ____% of Elective
Deferrals
|_| (B) ____% of Elective
Deferrals up to
____% of Earnings.
|_| (C) _____% of Elective
Deferrals up to ___%
of Earnings and ___%
of Elective
Deferrals over that
percentage of
Earnings and up to
___% of Earnings.
(The third
percentage number
must be less than
the first percentage
number.)
|_| (D) _____% of Elective
Deferrals up to of
Elective Deferrals.
|_| (E) _____% of
Elective Deferrals
up to $_____ of
Elective Deferrals
and ____% of
Elective Deferrals
over that dollar
amount and up to
$____ of Elective
Deferrals. (The
last percentage
must be less than
the first
percentage.)
|_| (ii) based on after-tax
Participant Contributions:
|_| (A) _____% of
Participant
Contributions
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<PAGE>
|_| (B) ____% of Participant
Contributions up to
____% of Earnings.
|_| (C) ____% of
Participant
Contributions up
to _____% of
Earnings and
_____% of
Participant
Contributions over
that percentage of
Earnings and up to
_____% of
Participant
Contributions.
(The third
percentage must be
less than the
first percentage.)
|_| (D) ____% of Participant
Contributions up to
$____ of Participant
Contributions.
|_| (F) _____% of
Participant
Contributions up
to $_____of
Participant
Contributions and
_____% of
Participant
Contributions over
that dollar amount
and up to $_____
of Participant
Contributions.
(The last
percentage must be
less than the
first percentage.)
(2) Qualified Participant. In order to receive an
allocation of Employer Matching Contributions for a
Plan Year, an employee must be a Qualified
Participant for that purpose. Select below either (a)
alone, or any combination of (b), (c) and (d).
|_| (a) To be a Qualified Participant
eligible to receive Employer
Matching Contributions for a Plan
Year, an Employee must (check (i) or
(ii)):
|_| (i) Either be
employed on the
last day of the
Plan Year,
complete more than
500 Hours of
Service in the
Plan Year, or
retire, die or
become disabled in
the Plan Year.
|_| (ii) Either be employed
on the last day of
the Plan Year or
complete more than
500 Hours of Service
in the Plan Year.
Stop here if you checked (a). If you did not check
(a), check (b), (c) or (d), or any combination of
(b), (c) and (d).
To be a Qualified Participant eligible to receive
Employer Matching Contributions for a Plan Year, an
Employee must:
|X| (b) Be credited with 1 (choose 1, 501 or
1,000) Hours of Service in the Plan
Year.
|_| (c) Be an Employee on the last day of
the Plan Year.
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<PAGE>
|_| (d) Retire, die or become disabled during
the Plan Year.
(3) Will the Employer have the option of making all or
any portion of its Employer Matching Contributions in
Employer Stock?
|_| (a) Yes |X| (b) No
C. Profit Sharing Contributions. (Plan Sections 4.1 and 4.2)
(1) Profit Limitation. Will Profit Sharing Contributions
to the Plan be limited to the current and accumulated
profits of your Business? Check one:
|_| (a) Yes |X| (b) No
(2) Amount. The Employer will contribute to the Plan for
each Plan Year (check one):
|X| (a) An amount chosen by the Employer
from year to year
|_| (b) _____% of the Earnings of all
Qualified Participants for the
Plan Year
|_| (c) $____ for each Qualified Participant
per __________
(enter time period, e.g. payroll
period, plan year)
(3) Allocations to Participants.
(a) Allocation to Participants. Profit Sharing
Contributions will be allocated:
|X| (i) Pro rata (percentage based
on compensation)
|_| (ii) Uniform Dollar amount
|_| (iii) Integrated With Social
Security (complete (b) and
(c) below)
(b) Integration with Social Security. (Complete
only if you have elected in 4.C(3)(a) to
integrate your Plan with Social Security.)
Profit Sharing Contributions will be
allocated to Qualified Participants as you
check below:
|_| (i) Profit Sharing
Contributions will be
allocated according to the
Top-Heavy Integration
Formula in Plan Section
4.2(c)(1) in every Plan
Year, whether or not the
Plan is top-heavy.
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<PAGE>
|_| (ii) Profit Sharing
Contributions will be
allocated according to the
Top-Heavy Integration
Formula in Plan Section
4.2(c)(1) only in Plan
Years in which the Plan is
top-heavy. In all other
Plan Years, contributions
will be allocated according
to the Non-Top-Heavy
Integration Formula in Plan
Section 4.2(c)(2).
(c) Integration Level. (Complete only if you
have elected in 4.C(3)(a) to integrate your
Plan with Social Security.) The Integration
Level will be (check one):
|_| (i) The Social Security Wage
Base in effect at the
beginning of the Plan Year.
|_| (ii) _____% (not more than 100%)
of the Social Security Wage
Base in effect at the
beginning of the Plan Year.
|_| (iii) $_______ (not more than the
Social Security Wage Base).
Note: The Social Security
Wage Base is indexed
annually to reflect
increases in the cost of
living.
(4) Qualified Participants. In order to receive an
allocation of Profit Sharing Contributions for a Plan
Year, an Employee must be a Qualified Participant for
this purpose. Select below either (a) alone, or any
combination of (b), (c) and (d).
|X| (a) To be a Qualified Participant
eligible to receive an allocation of
Profit Sharing Contributions for a
Plan Year, an Employee must (check
(i) or (ii)):
|X| (i) Either be employed
on the last day of
the Plan Year,
complete more than
500 Hours of Service
in the Plan Year, or
retire, die or
become disabled in
the Plan Year.
|_| (ii) Either be employed
on the last day of
the Plan Year or
complete more than
500 Hours of Service
in the Plan Year.
Stop here if you checked (a). If you did not check
(a), check (b), (c) or (d), or any combination of
(b), (c) and (d).
To be a Qualified Participant eligible to receive an
allocation of Profit Sharing Contributions for a Plan
Year, an Employee must:
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<PAGE>
|_| (b) Be credited with ______ (choose 1,
501 or 1,000) Hours
of Service in the Plan Year.
|_| (c) Be an Employee on the last day of
the Plan Year.
|_| (d) Retire, die or become disabled
during the Plan Year.
D. Participant Contributions (Plan Section 4.6). Will your Plan
allow Participants to make after-tax contributions?
|_| (1) Yes |X| (2) No
E. Qualified Matching Contributions (Plan Section 2.61). Skip
this part E if you will not make Qualified Matching
Contributions.
(1) Qualified Matching Contributions will be made with
respect to (check one):
|_| (a) Elective Deferrals made by all
Qualified Participants (as
defined in 4.B(2))
|X| (b) Elective Deferrals made only by
Qualified Participants (as defined
in 4.B(2)) who are not Highly
Compensated Participants
(2) The amount of Qualified Matching Contributions made
with respect to a Participant will be:
|X| (a) discretionary
|_| (b) fixed (check and complete (i), (ii
or (iii))
|_| (i) _____% of Elective Deferrals
|_| (ii) _____% of Elective Deferrals
that do not exceed
_____% of Earnings
|_| (iii) _____% of Elective Deferrals
that do not exceed $______.
F. Qualified Nonelective Contributions (Plan Section 2.62): Skip
this part F if you will not make Qualified Nonelective
Contributions.
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<PAGE>
(1) Qualified Nonelective Contributions will be made on
behalf of (check either (a) or (b) and either (c)
or (d));
|_| (a) All Participants
|X| (b) Only Participants who are not Highly
Compensated Employees who also, for
the Plan Year for which the Qualified
Nonelective Contributions are made:
|_| (c) Are Qualified Participants (as defined
in 4.C(4))
|X| (d) Made Elective Deferrals
(2) The amount of Qualified Nonelective Contributions for
a Plan Year will be (check one):
|_| (a) _____% (not over 15%) of the Earnings
of Participants on whose behalf
Qualified Nonelective Contributions
are made
|X| (b) An amount determined by the Employer
from year to year, to be shared in
proportion to their Earnings by
Participants on whose behalf Qualified
Nonelective Contributions are made
G. Forfeitures
(1) Employer Matching Contributions. Forfeitures of
Employer Matching Contributions will be used as
follows (check and complete (a) or (b)):
|X| (a) Applied to reduce the following
contributions required of
the Employer (check (i) and/or (ii)):
|X| (i) Employer Matching
Contributions
|_| (ii) Profit Sharing
Contributions
|_| (b) Reallocated as follows
(check (i) or (ii)):
|_| (i) As additional
Employer Matching
Contributions
|_| (ii) As additional Profit
Sharing
Contributions
(2) Profit Sharing Contributions. Forfeitures of Profit
Sharing Contributions will be used as follows
(check (a) or (b)):
|_| (a) Applied to reduce the following
contributions required of
the Employer (check (i) and/or (ii)):
|_| (i) Profit Sharing
Contributions
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<PAGE>
|_| (ii) Employer Matching
Contributions
|X| (b) Reallocated as additional Profit
Sharing Contributions
5. Top-Heavy Minimum Contributions (Plan Section 14.3). Skip paragraphs A
and B below if you do not maintain any other qualified plan in addition
to this Plan.
A. For any Plan Year in which the Plan is Top-Heavy, the
Top-Heavy minimum contribution (or benefit) for Non-Key
employees participating both in this Plan and another
qualified plan maintained by the Employer will be provided in
(check one):
|X| (1) This Plan |_| (2) The other qualified plan
B. If you maintain a defined benefit plan in addition to this
Plan, and the Top-Heavy Ratio (as defined in Plan Section
14.2(c)) for the combined plans is between 60% and 90%, you
may elect to provide an increased minimum allocation or
benefit pursuant to Plan Section 14.4. Specify your election
by completing the statement below:
The Employer will provide an increased (specify contribution
or benefit) _________ in its (specify defined contribution or
defined benefit) _________ plan as permitted under Plan
Section 14.4.
6. Other Plans. You must complete this section if you maintain or ever
maintained another qualified plan in which any Participant in this Plan
is (or was) a participant or could become a participant. The Plan and
your other plan(s) combined will meet the contribution limitation rules
in Article 6 of the Plan as you specify below:
A. If a Participant in the Plan is covered under another
qualified defined contribution plan maintained by your
Business, other than a master or prototype plan (check one):
|X| (1) The provisions of Section 6.2 of the Plan
will apply as if the other plan were a
master or prototype plan.
|_| (2) The plans will limit total annual
additions to the maximum permissible amount,
and will properly reduce any excess amounts,
in the manner you describe below.
B. If a Participant in the Plan is or has ever been a participant
in a defined benefit plan maintained by your Business, the
plans will meet the limits of Article 6 in the manner you
describe below:
If your Business has ever maintained a defined benefit plan,
state below the interest rate and mortality table to be used
in establishing the present value of any benefit under the
defined benefit plan for purposes of computing the top-heavy
ratio:
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<PAGE>
Interest rate: _____%
Mortality Table: _____
7. Compensation (Plan Section 2.8).
A. Amount.
(1) Elective Deferrals and Employer Matching
Contributions. Compensation for the purposes of
determining the amount and allocation of Elective
Deferrals and Employer Matching Contributions will be
determined as follows (choose either (a) or (b), and
(c) and/or (d) as applicable).
|X| (a) Compensation will include Form W-2
earnings as defined in Section 2.8
of the Plan.
|_| (b) Compensation will include all
compensation included in the
definition of Code Section 415
Compensation in Plan Section 6.5(b)
of the Plan.
|X| (e) In addition to the amount
provided in either (a) or (b) above,
Compensation will also include any
amounts withheld from the employee
under a 401(k) plan, cafeteria plan,
SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457
deferred compensation plan, and
contributions described in Code
Section 414(h)(2) that are picked up
by a governmental employer.
|_| (d) Compensation will also exclude the
following amount
(choose each that applies):
|_| (i) overtime pay.
|_| (ii) bonuses.
|_| (iii) commissions.
|_| (iv) other pay (describe):
_____
|_| (v) compensation in excess
of $____
(2) Profit Sharing Contributions. Compensation for the
purposes of determining the amount and allocation of
Profit Sharing Contributions shall be determined as
follows (choose either (a) or (b), and (c) and/or
(d), as applicable).
|X| (a) Compensation will include Form W-2
earnings as defined in Section 2.8
of the Plan.
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<PAGE>
|_| (b) Compensation will include all
compensation included in the
definition of Code Section 415
Compensation in Section 6.5(b) of
the Plan.
|X| (c) In addition to the amount
provided in either (a) or (b) above,
compensation will also include any
amounts withheld from the employee
under a 401(k) plan, cafeteria plan,
SARSEP, tax sheltered 403(b)
arrangement, or Code Section 457
deferred compensation plan, and
contributions described in Code
Section 414(h)(2) that are picked up
by a governmental employer.
|_| (d) Compensation will also exclude
the following amounts
(choose each that applies):
|_| (i) overtime pay
|_| (ii) bonuses
|_| (iii) commissions
|_| (iv) other pay describe:
__________
|_| (v) compensation in excess
of $________
Note: No exclusion under (d) may be selected
if Profit Sharing Contributions will be
integrated with Social Security under
4.C(3)(a)(iii). In addition, no exclusion
under (d) will apply for purposes of
determining the top-heavy minimum
contribution if the Plan is top-heavy.
B. Measuring Period. Compensation will be based on the Plan
Year. However, for an Employee's initial year of participation
in the Plan, Compensation will be recognized as of
|X| (1) the first day of the Plan Year.
|_| (2) the date the Participant enters the Plan.
8. Distributions and Withdrawals.
A. Retirement Distributions.
(1) Normal Retirement Age (Plan Section 7.1). Normal
retirement age will be the later of 65 (not over age
65) or ___ (not more than 5) years of participation
in the Plan.
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<PAGE>
(2) Early Retirement (Plan Section 7.1). Select one:
|X| (a) No early retirement will be permitted.
|_| (b) Early retirement will be permitted at
age ______.
|_| (c) Early retirement will be permitted at
age _____ with at least _____ Years of
Service.
(3) Annuities (Plan Section 9.3). Will your Plan permit
distributions in the form of a life annuity? You must
check Yes if this Plan replaces or serves as a
transferee plan for an existing Plan that permits
distributions in a life annuity form.
|_| (a) Yes |X| (b) No
B. Hardship Distributions (Plan Section 12.2). Will your Plan
permit hardship distributions?
|_| (1) No
|X| (2) Yes. Indicate below from which Accounts
hardship withdrawals will be permitted
(check all that apply):
|X| (a) Elective Deferral Account
|X| (b) Rollover Account
|_| (c) Employer Matching Account
|_| (d) Employer Contribution Account (i.e.
Profit Sharing Contributions)
C. Withdrawals after Age 59-1/2 (Plan Section 12.3). Will your
Plan permit employees over age 59Y2 to withdraw amounts upon
request? You must check Yes if this Plan replaces an existing
Plan that permits withdrawals after age 59- 1/2.
|X| (1) Yes |_| (2) No
D. Withdrawals following Five Years of Participation or Two Years
--------------------------------------------------------------
after Contribution (Plan Section 12.4). Will your Plan permit
--------------------------------------
employees to withdraw amounts from the vested portion of their
Employer Matching Contributio Accounts and Employer
Contribution Accounts (i.e., Profit Sharing Contributions)
if either (i) the Participant has been a Participant for at
least five years, or (ii) the amount withdrawn from each of
these Accounts is limited to the amounts that were credited to
that Account prior to the date two years before the
withdrawal? You must check yes if this Plan replaces a Plan
which permits withdrawals in these circumstances.
|_| (1) Yes |X| (2) No
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<PAGE>
E. Loans (Plan Section 12.5). Will your Plan permit loans to
employees from the vested portion of their Accounts?
|_| (1) No
|_| (2) Yes. Indicate below whether loans will be
permitted for any reason or only on account
of hardship:
|X| (a) Any reason.
|_| (b) Hardship only.
F. Automatic Distribution of Small Accounts (Plan Section 9.1).
Will your Plan automatically distribute vested account
balances not exceeding $5,000 within 60 days after the end of
the Plan Year in which a Participant separates from
employment?
|X| (1) Yes |_| (2) No
9. Vesting (Plan Article 8)
A. Time of Vesting (select (1) or (2) below and complete vesting
--------------------------------------------------------------
schedule).
---------
|X| (1) Single Vesting Schedule:
The vesting schedule selected below will apply to
both Employer Matching Contributions and Profit
Sharing Contributions.
|_| (2) Dual Vesting Schedules:
The vesting schedule marked with an "MC' below will
apply to Employer Matching Contributions and the
vesting schedule marked with a "PS" below will apply
to Profit Sharing Contributions.
(3) Vesting Schedules:
|_| (a) 100% vesting immediately upon participation in the Plan.
|X| (b) Five-Year Graded Schedule:
Vested Percentage 20% 40% 60% 90% 100%
Years of Service 1 2 3 4 5
|_| (c) Seven-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
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<PAGE>
Years of Service 3 4 5 6 7
|_| (d) Six-Year Graded Schedule:
Vested Percentage 20% 40% 60% 80% 100%
Years of Service 2 3 4 5 6
|_| (e) Three-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-2 3
|_| (f) Five-Year Cliff Schedule:
Vested Percentage 0% 100%
Years of Service 0-4 5
|_| (g) Other Schedule (must be at least as favorable as Seven-
Year Graded Schedule or Five-Year Cliff Schedule):
(i) Vested Percentage __% __% __% __% __% __%
(ii) Years of Service __ __ __ __ __ __
(4) Top Heavy Schedule:
(a) If you selected above an "Other
Schedule," specify in the space
below the schedule that will apply
in Plan Years that the Plan is
top-heavy. The schedule you specify
must be at least as favorable to
employees, at all years of service,
as either the Six-Year Graded
Schedule or the Three-Year Cliff
Schedule. The top-heavy vesting
schedule will be:
|_| (i) the same "Other Schedule" selected above
|_| (ii) the following schedule:
Vested Percentage __% __% __% __% __% __%
Years of Service __ __ __ __ __ __
|_| (iii) Six-Year Graded Schedule
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<PAGE>
|_| (iv) Three-Year Cliff Schedule
(b) If the Plan becomes top-heavy in a
Plan Year, will the top-heavy
vesting schedule apply for all
subsequent Plan Years?
|_| (i) Yes |_| (ii) No
B. Service for Vesting (select (1) or (2), and complete (3)).
|X| (1) All of an employee's service will be used to
determine his Years of Service for purposes
of vesting
|_| (2) An employee's Years of Service for vesting
will include all years
except (check all that apply):
|_| (a) (New plan) service before the
effective date of the plan
|_| (b) (Existing plan) service before the
effective date of the existing plan
|_| (c) Service, before the Plan Year in which
an employee reached age 18
(3) Will an employee's service for a business
acquired by the Employer that was performed
before the acquisition be included in
determining an employee's Years of Service
for vesting?
|X| (a) Yes |_| (b) No
List below any business acquired on or
before the Effective Date for which an
employee's service will be included in
determining an employee's Years of Service
for vesting. Service of an employee for a
predecessor employer (which includes an
acquired business) whose plan the Employer
maintains must be included as service for
the Employer under this Plan. Therefore,
also list below any predecessor employer
whose plan the Employer maintains:
Service with businesses acquired by the
Employer will be included in determining an
employee's Years of Service for vesting in
every instance. TW Communications is the
only plan of an acquired business which is
being currently maintained by the Employer.
C. Hours of Service for Vesting. The number of Hours of Service
required for crediting a Year of Service for vesting will be
(check one):
|X| (1) 1,000 Hours of Service
|_| (2) _____ Hours of Service
(under 1,000)
Hours of Service for vesting will be credited according to the
method selected under 3.C(6).
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<PAGE>
D. Year of Service Measuring Period for Vesting (Plan Section
2.52). The periods of 12 months used for measuring Years of
Service will be (check one):
|X| (1) Plan Years
|_| (2) 12-month Eligibility Periods
Note: If you are adopting this Plan to replace an existing plan,
employees will be credited under this Plan with all service credited to
them under the plan you are replacing.
10. Investments (Plan Sections 13.2 and 13.3).
A. Available Investment Products (Plan Section 13.2).
-------------------------------------------------
The investment options available under the Plan are
identified in the Service Agreement or such other written
instructions between the Employer and Putnam, as the case
may be. All Investment Products must be sponsored,
underwritten, managed or expressly agreed to in writing by
Putnam. If there is any amount in the Trust Fund for which
no instructions or unclear instructions are delivered, it
will be invested in the default option selected by the
Employer in its Service Agreement with Putnam, or such other
written instructions as the case may be, until instructions
are received in good order, and the Employer will be deemed
to have selected the option indicated in its Service
Agreement, or such other written instructions as the case
may be, as an available Investment Product for that purpose.
B. Instructions (Plan Section 13.3). Investment instructions
for amounts held under the Plan generally will be given by
each Participant for his own Accounts and delivered to
Putnam as indicated in the Service Agreement between Putnam
and the Employer. Check below only if the Employer will make
investment decisions under the Plan with respect to the
following contributions made to the Plan. (Check all
applicable options.)
|_| (1) The Employer will make all investment
decisions with respect to all employee
contributions, including Elective Deferrals,
Participant Contributions, Deductible
Employee Contributions and Rollover
Contributions,
|_| (2) The Employer will make all investment
decisions with respect to all Employer
contributions, including Profit Sharing
Contributions, Employer Matching
Contributions, Qualified Matching
Contributions and Qualified Nonelective
Contributions.
|_| (3) The Employer will make investment decisions
with respect to Employer Matching
Contributions and Qualified Matching
Contributions.
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<PAGE>
|_| (4) The Employer will make investment decisions
with respect to Qualified Nonelective
Contributions.
|_| (5) The Employer will make investment decisions
with respect to Profit Sharing
Contributions.
|_| (6) Other (Describe. An Employer may elect to
make investment decisions with respect to a
specified portion of a specific type of
contribution to the Plan.):
______
______
C. Changes. Investment instructions may be changed (check one):
|X| (1) on any Valuation Date (daily)
|_| (2) on the first day of any month (monthly)
|_| (3) on the first day of the first, fourth,
seventh and tenth months in a
Plan Year (quarterly)
D. Employer Stock. (Skip this paragraph if you did not designate
Employer Stock as an investment under the Service Agreement.)
(1) Voting. Employer Stock will be voted as follows:
|_| (a) In accordance with the Employer's
instructions,
|X| (b) In accordance with the
Participant's instructions,
Participants are hereby appointed
named fiduciaries for the purpose of
the voting of Employer Stock in
accordance with Plan Section 13.8.
(2) Tendering. Employer stock will be tendered as
follows:
|_| (a) In accordance with the Employee's
instructions.
|X| (b) In accordance with the
Participant's instructions.
Participants are hereby appointed
named fiduciaries for the purpose of
the tendering of Employer Stock in
accordance with Plan Section 13.8.
11. Administration.
A. Plan Administrator (Plan Section 15.1). You may appoint a
person or a committee to serve as Plan Administrator.
If you do not appoint a Plan Administrator, the Plan provides
that the Employer will be the Plan Administrator.
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<PAGE>
The initial Plan Administrator will be (check one):
|_| This person: ____
|_| A committee composed of these people:
____
____
____
B. Recordkeeper (Plan Section 15.4). Unless Putnam expressly
permits otherwise, you must appoint Putnam as Recordkeeper to
perform certain routine services determined upon execution of
a written Service Agreement between Putnam and the Employer.
The initial Record keeper will be:
Putnam Fiduciary Trust Company
(Name)
Putnam Retail 401(k) B-2-B
859 Willard St.
Quincy, MA 02269-9110
(Address)
12. Determination Letter Required. You may not rely on an opinion letter
issued to Putnam by the National Office of the Internal Revenue Service
as evidence that the Plan is qualified under Section 401 of the
Internal Revenue Code. In order to obtain reliance with respect to
qualification of the Plan, you must receive a determination letter from
the appropriate Key District Office of Internal Revenue.
* * * * *
If you have any questions regarding this Plan Agreement, contact Putnam
at:
Putnam Defined Contribution Plans
One Putnam Place B2B
859 Willard Street
Quincy, MA 02269
Phone: 1-800-752-5766
101
<PAGE>
* * * * *
EMPLOYER'S ADOPTION OF THE
ANICOM 401(k) SAVINGS PLAN
The Employer named below hereby adopts the ANICOM 401(k) SAVINGS PLAN, and
appoints Putnam Fiduciary Trust Company to serve as Trustee of the Plan.
Investment Options
The Employer hereby elects the following as the investment options available
under the Plan:
Putnam Money Market Fund Putnam Income Fund
The George Putnam Fund of Boston The Putnam Fund for Growth & Income
Putnam International Growth Fund Putnam Investors Fund
Putnam New Opportunities Fund Putnam Voyager Fund
Putnam Vista Fund Anicom Inc. Stock
The following investment option shall be the default option: Putnam Money Market
Fund (select the default option from among the investment options listed above).
Employer signature(s) to adopt Plan: Date of signature:
__________________________________ ___________________
__________________________________ ___________________
Please print name(s) of authorized person(s) signing above:
__________________________________
__________________________________
A new Plan must be signed by the last day of the Plan Year in which the Plan is
to be effective.
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<PAGE>
* * * * *
ACCEPTANCE OF PUTNAM FIDUCIARY TRUST COMPANY AS TRUSTEE
The Trustee accepts appointment in accordance with the terms and conditions of
the Plan, effective as of the date of execution by the Employer set forth above.
Putnam Fiduciary Trust Company, Trustee
By:____________________________________
103
<PAGE>
* * * * *
ACCEPTANCE BY PUTNAM
Putnam hereby accepts this Employer's Plan.
Putnam Mutual Funds Corp.
By: ______________________
104
<PAGE>
ADDENDUM
Notwithstanding any provision in the Plan to the contrary, the
provisions of Section 9.3(b) shall be inoperative, and Section 16.16 shall not
be applicable to Putnam.
By accepting this Plan, Putnam acknowledges that the Plan is not
intended to be a prototype plan, and waives any rights it may have with respect
to a prototype plan that ceases to be such a plan.
105
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 (Registration No. 333- ) of our report dated March 30,
1998 on our audits of the financial statements of Anicom, Inc., appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, our
report dated July 27, 1998 on the financial statements of TW Communication Corp.
appearing in the Company's Current Report on 8-K/A dated July 31, 1998, our
report dated September 9, 1997 on the financial statements of Energy Electric
cable, a division of Connectivity Products Incorporated appearing in the
Company's Current Report on Form 8-K/A (Amendment No. 1), dated September 25,
1997, our report dated April 25, 1996 on the financial statements of Northern
Wire & Cable, Inc. appearing in the Company's Current Report on Form 8- K/A
(Amendment No. 2) dated May 23, 1996, and our report dated October 1, 1996 on
the financial statements of Norfolk Wire & Cable, Inc. appearing in the
Company's Current Report on Form 8-K/A (Amendment No. 2), dated November 5,
1996.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
November 30, 1998
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
The Board of Directors
Anicom, Inc.
We consent to the incorporation by reference in the registration
statement (No. 333- ) on Form S-8 of our report dated August 25, 1998, except as
to Note 12 which is as of September 21, 1998, with respect to the combined
balance sheets of Texcan Cables Inc. and Texcan Cables Limited (collectively,
the "Company") as of March 31, 1998 and 1997 and the related combined statements
of earnings, retained earnings (deficit) and cash flows for each of the years in
the three year period ended March 31, 1998, which report appears in the Form
8-K/A (Amendment No. 2) of Anicom, Inc. dated November 20, 1998.
/s/ KPMG LLP
Chartered Accountants
Richmond, Canada
November 30, 1998
