SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 15, 1997
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Physicians Resource Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-13778 76-0456864
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State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Three Lincoln Centre, Suite 1540, 5430 LBJ Freeway, Dallas, TX 75240
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 982-8200
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Item 5. Other Events.
EquiMed, Inc. v. Physicians Resource Group, Inc. and PRG Georgia,
Inc. On November 5, 1996, Physicians Resource Group, Inc. (the
"Company") acquired the assets of the eye care division of EquiMed,
Inc. ("EquiMed"), a publicly held multispecialty physician practice
management company. On May 15, 1997, EquiMed initiated arbitration
proceedings against the Company and a wholly-owned subsidiary of the
Company before the American Arbitration Association, Philadelphia,
Pennsylvania, alleging breach of contract, fraud, trespass and
conversion based principally on the alleged failure of the Company to
cooperate with EquiMed in completing additional acquisitions that could
have resulted in the payment of additional consideration to EquiMed,
the alleged failure by the Company to provide EquiMed with access to
EquiMed's accounting records and the Company's assertion against
EquiMed of an offset claim. EquiMed has asserted entitlement to
damages in excess of $30 million plus punitive damages, costs and
attorneys' fees. PRG intends to vigorously defend such claims and will
assert counterclaims against EquiMed arising from EquiMed's breaches
of contract and tortious conduct.
<PAGE>
Item 7. Exhibits.
Exhibit No. Description
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4.1 - Restated Certificate of Incorporation of Physicians
Resource Group, Inc.(1)
4.2 - Certificate of Designations, Preferences, Rights and
Limitations of Class A Preferred Stock of Physicians
Resource Group, Inc.(1)
4.3 - Third Amended and Restated Bylaws of Physicians
Resource Group, Inc.(2)
4.4 - Form of Warrant Certificate(1)
4.5 - Rights Agreement dated as of April 19, 1996 between
Physicians Resource Group, Inc. and Chemical Mellon
Shareholder Services(3)
4.6 - Form of certificate evidencing ownership of Common
Stock of Physicians Resource Group, Inc.(1)
99.1 - Physicians Resource Group, Inc. 401(k) Plan(4)
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(1) - Previously filed as an exhibit to the Company's
Registration Statement on Form S-1 (No. 33-91440) and
incorporated herein by reference.
(2) - Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31,
1995, and incorporated herein by reference.
(3) - Previously filed as an exhibit to the Company's
Registration Statement on Form S-1 (No. 333-3852) and
incorporated herein by reference.
(4) - Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
PHYSICIANS RESOURCE GROUP, INC.
Date: June 9, 1997 By: /s/ Richard J. D'Amico
--------------------------------
Richard J. D'Amico
Executive Vice President, Chief
Administrative Officer
and Secretary
PHYSICIANS RESOURCE GROUP, INC.
401(K) PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 10
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY 11
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR 11
2.4 RECORDS AND REPORTS 12
2.5 APPOINTMENT OF ADVISERS 12
2.6 PAYMENT OF EXPENSES 12
2.7 CLAIMS PROCEDURE 13
2.8 CLAIMS REVIEW PROCEDURE 13
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 13
3.2 EFFECTIVE DATE OF PARTICIPATION 13
3.3 DETERMINATION OF ELIGIBILITY 14
3.4 TERMINATION OF ELIGIBILITY 14
3.5 OMISSION OF ELIGIBLE EMPLOYEE 14
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 14
3.7 ELECTION NOT TO PARTICIPATE 14
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION 14
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 15
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION 17
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS 17
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS 21
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 22
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS 23
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE
TESTS 24
4.9 MAXIMUM ANNUAL ADDITIONS 25
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 28
4.11 TRANSFERS FROM QUALIFIED PLANS 28
4.12 DIRECTED INVESTMENT ACCOUNT 29
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 30
5.2 METHOD OF VALUATION 30
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 30
6.2 DETERMINATION OF BENEFITS UPON DEATH 31
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 32
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 32
<PAGE>
6.5 DISTRIBUTION OF BENEFITS 36
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 40
6.7 TIME OF SEGREGATION OR DISTRIBUTION 42
6.8 DISTRIBUTION FOR MINOR BENEFICIARY 43
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 43
6.10 PRE-RETIREMENT DISTRIBUTION 43
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 43
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 44
6.13 DIRECT ROLLOVER 44
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT 45
7.2 TERMINATION 46
7.3 MERGER OR CONSOLIDATION 46
7.4 LOANS TO PARTICIPANTS 46
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS 47
8.2 DETERMINATION OF TOP HEAVY STATUS 47
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS 50
9.2 ALIENATION 50
9.3 CONSTRUCTION OF PLAN 50
9.4 GENDER AND NUMBER 50
9.5 LEGAL ACTION 51
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS 51
9.7 BONDING 51
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 51
9.9 INSURER'S PROTECTIVE CLAUSE 51
9.10 RECEIPT AND RELEASE FOR PAYMENTS 52
9.11 ACTION BY THE EMPLOYER 52
9.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY 52
9.13 HEADINGS 52
9.14 APPROVAL BY INTERNAL REVENUE SERVICE 52
9.15 UNIFORMITY 53
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS 53
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS 53
10.3 DESIGNATION OF AGENT 54
10.4 EMPLOYEE TRANSFERS 54
10.5 PARTICIPATING EMPLOYER CONTRIBUTION 54
10.6 AMENDMENT 54
10.7 DISCONTINUANCE OF PARTICIPATION 54
10.8 ADMINISTRATOR'S AUTHORITY 54
<PAGE>
PHYSICIANS RESOURCE GROUP, INC.
401(K) PLAN
Physicians Resource Group, Inc., a Delaware corporation (the
"Employer") hereby establishes the Physicians Resource Group, Inc.
401(k) Plan (the "Plan") upon the following terms and conditions:
RECITALS:
WHEREAS, the Employer desires to recognize the contribution made
to its successful operation by its employees and to reward such
contribution by means of a tax-qualified retirement savings plan for
those employees who shall qualify as Participants hereunder;
NOW, THEREFORE, effective January 1, 1997, (hereinafter called
the "Effective Date"), the Employer hereby establishes the Plan for
the exclusive benefit of the Participants and their Beneficiaries.
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to
administer the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member
of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Code
Section 414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Code Section 414(m)) which includes the Employer; and any
other entity required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant,
the value of all accounts maintained on behalf of a Participant,
whether attributable to Employer or Employee contributions, subject to
the provisions of Section 8.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Annuity Starting Date" means, with respect to any
Participant, the first day of the first period for which an amount is
paid as an annuity or any other form.
1.7 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the
restrictions of Sections 6.2 and 6.6.
<PAGE>
1.8 "Code" means the Internal Revenue Code of 1986, as amended
or replaced from time to time.
1.9 "Compensation" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code
Section 3401(a) (for the purposes of income tax withholding at the
source) but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code Sections
125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Employee's effective date
of participation pursuant to Section 3.2.
Compensation in excess of $150,000 shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in
accordance with Code Section 401(a)(17), except that the dollar
increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such calendar
year. For any short Plan Year, the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which
the Plan Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).
For purposes of this Section, if the Plan is a plan
described in Code Section 413(c) or 414(f) (a plan maintained by more
than one Employer), the limitation applies separately with respect to
the Compensation of any Participant from each Employer maintaining the
Plan.
1.10 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy, or annuity contract (group or
individual) issued pursuant to the terms of the Plan.
1.11 "Deferred Compensation" with respect to any Participant
means the amount of the Participant's total Compensation which has
been contributed to the Plan in accordance with the Participant's
deferral election pursuant to Section 4.2 excluding any such amounts
distributed as excess "annual additions" pursuant to Section 4.10(a).
<PAGE>
1.12 "Early Retirement Date" means the first day of the month
(prior to the Normal Retirement Date) coinciding with or following the
date on which a Participant or Former Participant attains age 55, and
has completed at least 5 Years of Service with the Employer (Early
Retirement Age). A Participant shall become fully Vested upon
satisfying this requirement if still employed at his Early Retirement
Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who
thereafter reaches the age requirement contained herein shall be
entitled to receive his benefits under this Plan.
1.13 "Elective Contribution" means the Employer contributions to
the Plan of Deferred Compensation excluding any such amounts
distributed as excess "annual additions" pursuant to Section 4.10(a).
In addition, any Employer Qualified Non-Elective Contribution made
pursuant to Section 4.1(c) and Section 4.6(b) which is used to satisfy
the "Actual Deferral Percentage" tests shall be considered an Elective
Contribution for purposes of the Plan. Any contributions deemed to be
Elective Contributions (whether or not used to satisfy the "Actual
Deferral Percentage" tests) shall be subject to the requirements of
Sections 4.2(b) and 4.2(c) and shall further be required to satisfy
the nondiscrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
1.14 "Eligible Employee" means any Employee.
Employees whose employment is governed by the terms of a
collective bargaining agreement between Employee representatives
(within the meaning of Code Section 7701(a)(46)) and the Employer
under which retirement benefits were the subject of good faith
bargaining between the parties will not be eligible to participate in
this Plan unless such agreement expressly provides for coverage in
this Plan.
Employees who are nonresident aliens (within the meaning of
Code Section 7701(b)(1)(B)) and who receive no earned income (within
the meaning of Code Section 911(d)(2)) from the Employer which
constitutes income from sources within the United States (within the
meaning of Code Section 861(a)(3)) shall not be eligible to
participate in this Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have
specifically adopted this Plan in writing.
1.15 "Employee" means any person who is employed by the Employer
or Affiliated Employer, but excludes any person who is an independent
contractor. Employee shall include Leased Employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5)
and such Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
<PAGE>
Notwithstanding the foregoing, any person who receives
compensation from Physicians Resource Group, Inc. or one of its
subsidiaries but who is a Leased Employee with respect to a
Participating Employer, or an entity that otherwise would be eligible
to become a Participating Employer, shall not be an Employee of
Physicians Resource Group, Inc. or one of its subsidiaries for any
purpose of the Plan.
1.16 "Employer" means Physicians Resource Group, Inc. and any
successor which shall maintain this Plan; and any predecessor which
has maintained this Plan. The Employer is a corporation, with
principal offices in the State of Texas. In addition, where
appropriate, the term Employer shall include any Participating
Employer (as defined in Section 10.1) which shall adopt this Plan.
1.17 "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of Highly Compensated
Participants for such Plan Year, over the maximum amount of such
contributions permitted under the limitations of Section 4.7(a).
1.18 "Excess Compensation" with respect to any Participant means
the Participant's Compensation which is in excess of 80% of the
Taxable Wage Base plus $1.00. For any short year, 80% of the Taxable
Wage Base plus $1.00 shall be reduced by a fraction, the numerator of
which is the number of full months in the short year and the
denominator of which is twelve (12).
1.19 "Excess Contributions" means, with respect to a Plan Year,
the excess of Elective Contributions used to satisfy the "Actual
Deferral Percentage" tests made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such
contributions permitted under Section 4.5(a). Excess Contributions
shall be treated as an "annual addition" pursuant to Section 4.9(b).
1.20 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of
such Participant's Deferred Compensation and the elective deferrals
pursuant to Section 4.2(f) actually made on behalf of such Participant
for such taxable year, over the dollar limitation provided for in Code
Section 402(g), which is incorporated herein by reference. Excess
Deferred Compensation shall be treated as an "annual addition"
pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year.
Additionally, for purposes of Sections 8.2 and 4.4(f), Excess Deferred
Compensation shall continue to be treated as Employer contributions
even if distributed pursuant to Section 4.2(f). However, Excess
Deferred Compensation of Non-Highly Compensated Participants is not
taken into account for purposes of Section 4.5(a) to the extent such
Excess Deferred Compensation occurs pursuant to Section 4.2(d).
<PAGE>
1.21 [RESERVED]
1.22 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management
of the Plan or exercises any authority or control respecting
management or disposition of its assets, (b) renders investment advice
for a fee or other compensation, direct or indirect, with respect to
any monies or other property of the Plan or has any authority or
responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its
representative body, and the Administrator.
1.23 "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1st of each year and ending the following
December 31st.
1.24 "Forfeiture" means that portion of a Participant's Account
that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the
case of a Terminated Participant whose Vested benefit is zero, such
Terminated Participant shall be deemed to have received a distribution
of his Vested benefit upon his termination of employment. Restoration
of such amounts shall occur pursuant to Section 6.4(e)(2). In
addition, the term Forfeiture shall also include amounts deemed to be
Forfeitures pursuant to any other provision of this Plan.
1.25 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.26 "415 Compensation" with respect to any Participant means
such Participant's wages for the Plan Year within the meaning of Code
Section 3401 (a) (for the purposes of income tax withholding at the
source) but determined without regard to any rules that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
1.27 "414(s) Compensation" with respect to any Participant means
such Participant's "415 Compensation" paid during a Plan Year. The
amount of "414(s) Compensation" with respect to any Participant shall
include "414(s) Compensation" for the entire twelve (12) month period
ending on the last day of such Plan Year, except that "414(s)
Compensation" shall only be recognized for that portion of the Plan
Year during which an Employee was a Participant in the Plan.
<PAGE>
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed
by the Employer pursuant to a salary reduction agreement and which are
not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be
disregarded. Such amount shall be adjusted for increases in the cost
of living in accordance with Code Section 401(a)(17), except that the
dollar increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such calendar
year. For any short Plan Year, the "414(s) Compensation" limit shall
be an amount equal to the "414(s) Compensation" limit for the calendar
year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve
(12).
1.28 "Highly Compensated Employee" means any Employee who:
(a) was a 5-percent owner (as defined in Section
1.34(c)) at any time during the year or the preceding year, or
(b) for the preceding year--
(1) had "415 Compensation" from the Employer in
excess of $80,000, and
(2) if the Employer elects the application of
this clause for such preceding year, was in the Top Paid Group of
Employees for such preceding year.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed
by the Employer pursuant to a salary reduction agreement and which are
not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions. Additionally, the dollar threshold amount
specified in (b)(1) above shall be adjusted at such time and in such
manner as under Code Section 415(d), except that the base period shall
be the calendar quarter ending September 30, 1996.
In determining who is a Highly Compensated Employee,
Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer constituting United States source income within the meaning
of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be
applied on a uniform and consistent basis for all of the Employer's
<PAGE>
retirement plans. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they
performed services during the "determination year."
1.29 "Highly Compensated Former Employee" means a former Employee
who was:
(a) a Highly Compensated Employee when such Employee
separated from service of the Employer, or
(b) a Highly Compensated Employee at any time after
attaining age 55.
1.30 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.31 "Hour of Service" means (1) each hour for which an Employee
is directly or indirectly compensated or entitled to compensation by
the Employer for the performance of duties (these hours will be
credited to the Employee for the computation period in which the
duties are performed); (2) each hour for which an Employee is directly
or indirectly compensated or entitled to compensation by the Employer
(irrespective of whether the employment relationship has terminated)
for reasons other than performance of duties (such as vacation,
holidays, sickness, jury duty, disability, lay-off, military duty or
leave of absence) during the applicable computation period (these
hours will be calculated and credited pursuant to Department of Labor
regulation 2530.200b-2 which is incorporated herein by reference); (3)
each hour for which back pay is awarded or agreed to by the Employer
without regard to mitigation of damages (these hours will be credited
to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in
which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may
be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any
single continuous period during which the Employee performs no duties
(whether or not such period occurs in a single computation period);
(ii) an hour for which an Employee is directly or indirectly paid, or
entitled to payment, on account of a period during which no duties are
performed is not required to be credited to the Employee if such
payment is made or due under a plan maintained solely for the purpose
of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service
are not required to be credited for a payment which solely reimburses
an Employee for medical or medically related expenses incurred by the
Employee.
For purposes of this Section, a payment shall be deemed to
be made by or due from the Employer regardless of whether such payment
is made by or due from the Employer directly, or indirectly through,
among others, a trust fund, or insurer, to which the Employer
contributes or pays premiums and regardless of whether contributions
<PAGE>
made or due to the trust fund, insurer, or other entity are for the
benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be
credited for employment with other Affiliated Employers. The
provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
1.32 "Income" means the income or losses allocable to Excess
Deferred Compensation, Excess Contributions or Excess Aggregate
Contributions which amount shall be allocated in the same manner as
income or losses are allocated pursuant to Section 4.4(e).
1.33 "Investment Manager" means an entity that (a) has the power
to manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be
a person, firm, or corporation registered as an investment adviser
under the Investment Advisers Act of 1940, a bank, or an insurance
company.
1.34 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or
former Employee (as well as each of his Beneficiaries) is considered a
Key Employee if he, at any time during the Plan Year that contains the
"Determination Date" or any of the preceding four (4) Plan Years, has
been included in one of the following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code Section 416)
having annual "415 Compensation" greater than 50 percent of the amount
in effect under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than the
dollar limitation in effect under Code Section 415(c)(1)(A) for the
calendar year in which such Plan Year ends and owning (or considered
as owning within the meaning of Code Section 318) both more than one-
half percent interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than five percent (5%) of
the outstanding stock of the Employer or stock possessing more than
five percent (5%) of the total combined voting power of all stock of
the Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
<PAGE>
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than $150,000.
"One percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than one percent
(1%) of the outstanding stock of the Employer or stock possessing more
than one percent (1%) of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed
by the Employer pursuant to a salary reduction agreement and which are
not includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
1.35 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement
Date after having reached his Normal Retirement Date.
1.36 "Leased Employee" means any person (other than an Employee
of the recipient) who pursuant to an agreement between the recipient
and any other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined
in accordance with Code Section 414(n)(6)) on a substantially full
time basis for a period of at least one year, and such services are
performed under the primary direction or control of the recipient
employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for
the recipient employer shall be treated as provided by the recipient
employer. A Leased Employee shall not be considered an Employee of
the recipient:
(a) if such employee is covered by a money purchase
pension plan providing:
(1) a non-integrated employer contribution rate
of at least 10% of compensation, as defined in Code Section 415(c)(3),
but including amounts which are contributed by the Employer pursuant
to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
<PAGE>
(b) if Leased Employees do not constitute more than
20% of the recipient's non-highly compensated work force.
1.37 "Non-Elective Contribution" means the Employer contributions
to the Plan excluding, however, contributions made pursuant to the
Participant's deferral election provided for in Section 4.2 and any
Qualified Non-Elective Contribution used in the "Actual Deferral
Percentage" tests.
1.38 "Non-Highly Compensated Participant" means any Participant
who is not a Highly Compensated Employee.
1.39 "Non-Key Employee" means any Employee or former Employee
(and his Beneficiaries) who is not a Key Employee.
1.40 "Normal Retirement Age" means the Participant's 65th
birthday. A Participant shall become fully Vested in his Participant's
Account upon attaining his Normal Retirement Age.
1.41 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement
Age.
1.42 1 -Year Break in Service" means the applicable computation
period during which an Employee has not completed more than 500 Hours
of Service with the Employer. Further, solely for the purpose of
determining whether a Participant has incurred a 1-Year Break in
Service, Hours of Service shall be recognized for "authorized leaves
of absence" and "maternity and paternity leaves of absence." Years of
Service and 1-Year Breaks in Service shall be measured on the same
computation period.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an
established nondiscriminatory policy, whether occasioned by illness,
military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any
period by reason of the Employee's pregnancy, birth of the Employee's
child, placement of a child with the Employee in connection with the
adoption of such child, or any absence for the purpose of caring for
such child for a period immediately following such birth or placement.
For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if
credit therefore is necessary to prevent the Employee from incurring a
1-Year Break in Service, or, in any other case, in the immediately
following computation period. The Hours of Service credited for a
"maternity or paternity leave of absence" shall be those which would
normally have been credited but for such absence, or, in any case in
which the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of
absence" shall not exceed 501.
<PAGE>
1.43 "Participant" means any Eligible Employee who participates
in the Plan and has not for any reason become ineligible to
participate further in the Plan.
1.44 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as
shall be established pursuant to Section 4.12 and observed by the
Administrator and applied to Participants who have Participant
Directed Accounts.
1.45 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to
his total interest in the Plan and Trust resulting from the Employer
Non-Elective Contributions.
A separate accounting shall be maintained with respect to
that portion of the Participant's Account attributable to Employer
matching contributions made pursuant to Section 4.1(b), Employer
discretionary contributions made pursuant to Section 4.1(d) and any
Employer Qualified Non-Elective Contributions.
1.46 "Participant's Combined Account" means the total aggregate
amount of each Participant's Elective Account and Participant's
Account.
1.47 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the
Participant has directed the investment in accordance with the
Participant Direction Procedure.
1.48 "Participant's Elective Account" means the account
established and maintained by the Administrator for each Participant
with respect to his total interest in the Plan and Trust resulting
from the Employer Elective Contributions used to satisfy the "Actual
Deferral Percentage" tests. A separate accounting shall be maintained
with respect to that portion of the Participant's Elective Account
attributable to such Elective Contributions pursuant to Section 4.2
and any Employer Qualified Non-Elective Contributions.
1.49 "Plan" means this instrument, including all amendments
thereto.
1.50 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1st of each year and ending the following
December 31st.
1.51 "Pre-Retirement Survivor Annuity" means a death benefit
which is an immediate annuity for the life of the Participant's spouse
the payments under which must be equal to the amount of benefit which
can be purchased with 50% of the accounts of a Participant.
A proportionate share of each of the Participant's accounts
shall be used to provide the Pre-Retirement Survivor Annuity.
<PAGE>
1.52 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and
Section 4.8(h). Such contributions shall be considered an Elective
Contribution for the purposes of the Plan and may be used to satisfy
the "Actual Deferral Percentage" tests or the "Actual Contribution
Percentage" tests.
1.53 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary of the Treasury or his delegate, and as amended from
time to time.
1.54 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under
the Plan.
1.55 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether
such retirement occurs on a Participant's Normal Retirement Date,
Early or Late Retirement Date (see Section 6.1).
1.56 "Super Top Heavy Plan" means a plan described in Section
8.2(b).
1.57 "Taxable Wage Base" means, with respect to any Plan Year,
the contribution and benefit base in effect under Section 230 of the
Social Security Act at the beginning of the Plan Year.
1.58 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by
death, Total and Permanent Disability or retirement.
1.59 "Top Heavy Plan" means a plan described in Section 8.2(a).
1.60 "Top Heavy Plan Year" means a Plan Year during which the
Plan is a Top Heavy Plan.
1.61 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (determined for this
purpose in accordance with Section 1.28) received from the Employer
during such year. All Affiliated Employers shall be taken into
account as a single employer, and Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees
unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained
by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section
911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861 (a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of
active Employees in any year, the following additional Employees shall
also be excluded; however, such Employees shall still be considered
for the purpose of identifying the particular Employees in the Top
Paid Group:
<PAGE>
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2 hours
per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to
be collective bargaining agreements between Employee representatives
and the Employer, and the Plan covers only Employees who are not
covered under such agreements, then Employees covered by such
agreements shall be excluded from both the total number of active
Employees as well as from the identification of particular Employees
in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which
the Code Section 414(q) definition is applicable.
1.62 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or
mental disorder which renders him incapable of continuing his usual
and customary employment with the Employer. The disability of a
Participant shall be determined by a licensed physician chosen by the
Administrator. The determination shall be applied uniformly to all
Participants.
1.63 "Trustee" means the person or entity named as trustee herein
or in any separate trust forming a part of this Plan, and any
successors.
1.64 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.65 "Valuation Date" means each business day of the Plan Year on
which the New York Stock Exchange is open for business and also the
last day of the Plan Year if the New York Stock Exchange is not open
for business on such day.
1.66 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.67 "Year of Service" means the computation period of twelve
(12) consecutive months, herein set forth, during which an Employee
has at least 1000 Hours of Service.
<PAGE>
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee
first performs an Hour of Service. The participation computation
period beginning after a 1-Year Break in Service shall be measured
from the date on which an Employee again performs an Hour of Service.
The participation computation period shall shift to the Plan Year
which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the
required Hours of Service in both the initial computation period (or
the computation period beginning after a 1-Year Break in Service) and
the Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service, shall be credited with
two (2) Years of Service for purposes of eligibility to participate.
For vesting purposes, the computation periods shall be the
Plan Year, including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not
otherwise set forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service
shall be made in accordance with Department of Labor regulation
2530.203-2(c). However, in determining whether an Employee has
completed a Year of Service for benefit accrual purposes in the short
Plan Year, the number of the Hours of Service required shall be
proportionately reduced based on the number of full months in the
short Plan Year.
Years of Service with other employers shall be recognized at
the written direction of the Employer.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit of
the Participants and their Beneficiaries in accordance with the terms
of the Plan, the Code, and the Act. The Employer may appoint counsel,
specialists, advisers, agents (including any nonfiduciary agent) and
other persons as the Employer deems necessary or desirable in
connection with the exercise of its fiduciary duties under this Plan.
The Employer may compensate such agents or advisers from the assets of
the Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by the
Employer.
<PAGE>
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee with respect to any or
all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the
investment.
(c) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is a
long run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its investment
policy. The communication of such a "funding policy and method" shall
not, however, constitute a directive to the Trustee as to investment
of the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the requirements
of Title I of the Act.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may
appoint any person, including, but not limited to, the Employees of
the Employer, to perform the duties of the Administrator. Any person
so appointed shall signify his acceptance by filing written acceptance
with the Employer. Any person so appointed may resign by delivering
written notification of his resignation to the Employer or may be
removed by the Employer by delivery of written notice of removal, said
resignation or removal to take effect at a date specified in such
notice or upon delivery of such notice if no date is specified. Any
appointee who is an employee of the Employer shall be deemed to have
resigned effective upon the termination of his employment with the
Employer unless expressly provided to the contrary by written
instrument delivered to the Employer prior to such termination of
employment. Upon the resignation or removal of any individual
performing the duties of the Administrator, the Employer may designate
a successor.
<PAGE>
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms
and shall have the power and discretion to construe the terms of the
Plan and to determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding
upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in
such manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided, however,
that any procedure, discretionary act, interpretation or construction
shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan
under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to
accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to
be contributed to the Plan;
<PAGE>
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to elect
joint and survivor annuities and Pre-Retirement Survivor Annuities as
required by the Act and regulations thereunder if required pursuant to
the Plan in connection with an adoption agreement entered into between
the Employer and a Participating Employer;
(j) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation
deferred or paid to them in cash;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other
data that may be necessary for proper administration of the Plan and
shall be responsible for supplying all information and reports to the
Internal Revenue Service, Department of Labor, Participants,
Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents
(including nonfiduciary agents) and other persons as the Administrator
or the Trustee deems necessary or desirable in connection with the
administration of this Plan, including but not limited to agents and
advisers to assist with the administration and management of the Plan,
and thereby to provide, among such other duties as the Administrator
may appoint, assistance with maintaining Plan records and the
providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or
persons retained or appointed by any Named Fiduciary incident to the
exercise of their duties under the Plan, including, but not limited
to, fees of accountants, counsel, Investment Managers, agents
(including nonfiduciary agents) appointed for the purpose of assisting
the Administrator or the Trustee in carrying out the instructions of
Participants as to the directed investment of their accounts and other
specialists and their agents, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the
Trust Fund.
<PAGE>
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with
the Administrator. Written notice of the disposition of a claim shall
be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial
shall be specifically set forth in the notice in language calculated
to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the
claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims
review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to
Section 2.7 shall be entitled to request the Administrator to give
further consideration to his claim by filing with the Administrator
(on a form which may be obtained from the Administrator) a request for
a hearing. Such request, together with a written statement of the
reasons why the claimant believes his claim should be allowed, shall
be filed with the Administrator no later than 60 days after receipt of
the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at
which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in
support of his claim. At the hearing (or prior thereto upon 5
business days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in
the possession of the Administrator which are pertinent to the claim
at issue and its disallowance. Either the claimant or the
Administrator may cause a court reporter to attend the hearing and
record the proceedings. In such event, a complete written transcript
of the proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim
shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day
period). Such communication shall be written in a manner calculated
to be understood by the claimant and shall include specific reasons
for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
<PAGE>
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who was employed on December 31, 1996 shall
be eligible to participate and shall enter the Plan as of the first
day of such Plan Year. Any other Eligible Employee who has completed
one (1) Year of Service and has attained age 18 shall be eligible to
participate hereunder as of the date he has satisfied such
requirements.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of
the earlier of the first day of the Plan Year or the first day of the
seventh month of such Plan Year coinciding with or next following the
date such Employee met the eligibility requirements of Section 3.1,
provided said Employee was still employed as of such date (or if not
employed on such date, as of the date of rehire if a 1-Year Break in
Service has not occurred).
In the event an Employee who is not a member of an eligible class
of Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee has satisfied the minimum age
and service requirements and would have otherwise previously become a
Participant.<PAGE>
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information
furnished by the Employer. Such determination shall be conclusive and
binding upon all persons, as long as the same is made pursuant to the
Plan and the Act. Such determination shall be subject to review per
Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible Employee, such
Former Participant shall continue to vest in his interest in the Plan
for each Year of Service completed while a noneligible Employee, until
such time as his Participant's Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings or losses
of the Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate,
such Employee will participate immediately upon returning to an
eligible class of Employees.
<PAGE>
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such
omission is not made until after a contribution by his Employer for
the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which
the said Employer would have contributed with respect to him had he
not been omitted. Such contribution shall be made regardless of
whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be
entitled to recover the contribution made with respect to the
ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the
amount contributed with respect to the ineligible person shall
constitute a Forfeiture (except for Deferred Compensation which shall
be distributed to the ineligible person) for the Plan Year in which
the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least
thirty (30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of
all Participants made pursuant to Section 4.2(a), which amount shall
be deemed an Employer Elective Contribution.
(b) On behalf of each Participant who is eligible to share
in matching contributions for the Plan Year, a discretionary matching
contribution equal to a uniform percentage of each such Participant's
Deferred Compensation, the exact percentage, if any, to be determined
each year by the Employer, which amount, if any, shall be deemed an
Employer Non-Elective Contribution.
<PAGE>
(c) On behalf of each Non-Highly Compensated Participant
and Non-Key Employee who is eligible to share in the Qualified Non-
Elective Contribution for the Plan Year, a discretionary Qualified
Non-Elective Contribution equal to a uniform percentage of each
eligible individual's Compensation, the exact percentage, if any, to
be determined each year by the Employer. Any Employer Qualified Non-
Elective Contribution shall be deemed an Employer Elective
Contribution.
(d) A discretionary amount, which amount, if any, shall be
deemed an Employer Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404, except to the extent necessary to provide the top heavy
minimum allocations, if any, and except as provided in Section
4.4(l)(3) below. All contributions by the Employer shall be made in
cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his Compensation
which would have been received in the Plan Year, but for the deferral
election, by up to 15%. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which
is currently available on or before the date the Participant executed
such election or, if later, the latest of the date the Employer adopts
this cash or deferred arrangement, or the date such arrangement first
became effective. For purposes of this Section, Compensation shall be
determined prior to any reductions made pursuant to Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as Employer
contributions.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective
Account.
(b) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the contrary,
amounts held in the Participant's Elective Account may not be
distributable (including any offset of loans) earlier than:
(1) a Participant's separation from service, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as that term is
described in Regulation 1.401(k)-1(d)(3);
<PAGE>
(4) the date of disposition by the Employer to an
entity that is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 409(d)(2)) used in a trade
or business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a Participant
who continues employment with the corporation acquiring such assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an entity
which is not an Affiliated Employer but only with respect to a
Participant who continues employment with such subsidiary; or
(6) the proven financial hardship of a Participant,
subject to the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans, contracts or
arrangements of the Employer maintaining this Plan shall not exceed,
during any taxable year of the Participant, the limitation imposed by
Code Section 402(g), as in effect at the beginning of such taxable
year. If such dollar limitation is exceeded, a Participant will be
deemed to have notified the Administrator of such excess amount which
shall be distributed in a manner consistent with Section 4.2(f). The
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution from his Participant's Elective Account pursuant to
Section 6.11(b) or pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from
any other plan maintained by the Employer, then such Participant shall
not be permitted to elect to have Deferred Compensation contributed to
the Plan on his behalf for a period of twelve (12) months following
the receipt of the distribution. Furthermore, the dollar limitation
under Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which the
hardship distribution was made, by the amount of such Participant's
Deferred Compensation, if any, pursuant to this Plan (and any other
plan maintained by the Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation under this
Plan together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension (as
defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed by
Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1 following the close of the Participant's taxable year, notify
the Administrator in writing of such excess and request that his
Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may
<PAGE>
direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's taxable
year. Any distribution of less than the entire amount of Excess
Deferred Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The amount
distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year (and any Income allocable to such
excess amount). Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on
which the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution
as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Matching contributions which relate to Excess Deferred
Compensation which is distributed pursuant to this Section 4.2(f)
shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero, by
any distribution of Excess Contributions pursuant to Section 4.6(a)
for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant
in a federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate, or
other short-term debt security acceptable to the Trustee until such
time as the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with the
following:
(1) A Participant must make his initial salary
deferral election within a reasonable time, not to exceed thirty (30)
days, after entering the Plan pursuant to Section 3.2. If the
Participant fails to make an initial salary deferral election within
such time, then such Participant may thereafter make an election in
accordance with the rules governing modifications. The Participant
<PAGE>
shall make such an election by entering into a written salary
reduction agreement with the Employer and filing such agreement with
the Administrator. Such election shall initially be effective
beginning with the pay period following the acceptance of the salary
reduction agreement by the Administrator, shall not have retroactive
effect and shall remain in force until revoked.
(2) A Participant may modify a prior election at any
time during the Plan Year and concurrently make a new election by
filing a written notice with the Administrator within a reasonable
time before the pay period for which such modification is to be
effective. Any modification shall not have retroactive effect and
shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke
his salary reduction agreement in its entirety at any time during the
Plan Year by providing the Administrator with thirty (30) days written
notice of such revocation (or upon such shorter notice period as may
be acceptable to the Administrator). Such revocation shall become
effective as of the beginning of the first pay period coincident with
or next following the expiration of the notice period. Furthermore,
the termination of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any salary
reduction agreement then in effect, effective immediately following
the close of the pay period within which such termination or cessation
occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution
to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer federal
income tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest
date on which such contributions can reasonably be segregated from the
Employer general assets, but in any event no later than the 15th
business day of the month following the month in which such amounts
would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional
Employer contributions which are allocable to the Participant's
Elective Account for a Plan Year shall be paid to the Plan no later
than the twelve-month period immediately following the close of such
Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date all amounts allocated to each
such Participant as set forth herein.
<PAGE>
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer Elective Contribution
made pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective
Contribution made pursuant to Section 4.1(b), to each Participant's
Account in accordance with Section 4.1(b).
(3) With respect to the Employer Qualified Non-
Elective Contribution made pursuant to Section 4.1(c), when used to
satisfy the "Actual Deferral Percentage" tests to each Participant's
Elective Account or when used to satisfy the "Actual Contribution
Percentage" tests to each Participant's Account.
Only Non-Highly Compensated Participants and Non-
Key Employees who have completed a Year of Service during the Plan
Year shall be eligible to share in the Qualified Non-Elective
Contribution for the year.
(4) With respect to the Employer Non-Elective
Contribution made pursuant to Section 4.1(d), in the following manner:
(i) A dollar amount equal to 5.4% of the sum of
each Participant's total Compensation plus Excess Compensation shall
be allocated to each Participant's Account. If the Employer does not
contribute such amount for all Participants, each Participant will be
allocated a share of the contribution in the same proportion that his
total Compensation plus his total Excess Compensation for the Plan
Year bears to the total Compensation plus the total Excess
Compensation of all Participants for that year.
(ii) The balance of the Employer Non-Elective
Contribution over the amount allocated above, if any, shall be
allocated to each Participant's Account in the same proportion that
his total Compensation for the Plan Year bears to the total
Compensation of all Participants for such year.
No other qualified plan or simplified employee
pension, as defined in Code Section 408(k), maintained by the Employer
shall (A) impute disparity pursuant to Regulation 1.401(a)(4)-7 for
any Participant and (B) provide for permitted disparity pursuant to
Code Section 401(l).
<PAGE>
Additionally, the cumulative permitted disparity
limit for a Participant is 35 total cumulative permitted disparity
years. Total cumulative permitted years means the number of years
credited to the Participant for allocation or accrual purposes under
this Plan, any other qualified plan or simplified employee pension
plan (whether or not terminated) ever maintained by the Employer. For
purposes of determining the Participant's cumulative permitted
disparity limit, all years ending in the same calendar year are
treated as the same year. If the Participant has not benefited under
a Defined Benefit or Target Benefit Plan for any year beginning after
December 31, 1993, the Participant has no cumulative disparity limit.
Notwithstanding the preceding paragraphs, any
Participant whose cumulative permitted disparity limit would exceed 35
will receive the allocation above by substituting total Compensation
for Excess Compensation.
Only Participants who are actively employed on the
last day of the Plan Year or who complete more than 500 Hours of
Service during the Plan Year prior to terminating employment shall be
eligible to share in the discretionary contribution for the year. In
determining whether a Participant has completed more than 500 Hours of
Service during a short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full
months in the short Plan Year.
(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 6.4(e)(2). The
remaining Forfeitures, if any, shall be used to reduce the
contribution of the Employer hereunder for the Plan Year in which such
Forfeitures occur in the following manner:
(1) Forfeitures attributable to Employer matching
contributions made pursuant to Section 4.1(b) shall be used to reduce
the Employer contribution for the Plan Year in which such Forfeitures
occur.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(d) shall be used to reduce
the Employer contribution for the Plan Year in which such Forfeitures
occur.
(d) For any Top Heavy Plan Year, Non-Key Employees not
otherwise eligible to share in the allocation of contributions as
provided above, shall receive the minimum allocation provided for in
Section 4.4(f) if eligible pursuant to the provisions of Section
4.4(h).
<PAGE>
(e) As of each Valuation Date, before the current valuation
period allocation of Employer contributions, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of
such date. Earnings or losses with respect to a Participant's
Directed Account shall be allocated in accordance with Section 4.12.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings and
losses (net appreciation or net depreciation) of the Trust Fund in the
same manner provided above. Each segregated account maintained on
behalf of a Participant shall be credited or charged with its separate
earnings and losses.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the Employer contributions allocated to the Participant's Combined
Account of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key
Employee in any defined contribution plan included with this plan in a
Required Aggregation Group). However, if (1) the sum of the Employer
contributions allocated to the Participant's Combined Account of each
Key Employee for such Top Heavy Plan Year is less than three percent
(3%) of each Key Employee's "415 Compensation" and (2) this Plan is
not required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer contributions allocated to
the Participant's Combined Account of each Non-Key Employee shall be
equal to the largest percentage allocated to the Participant's
Combined Account of any Key Employee. However, in determining whether
a Non-Key Employee has received the required minimum allocation, such
Non-Key Employee's Deferred Compensation and matching contributions
needed to satisfy the "Actual Contribution Percentage" tests pursuant
to Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required
in this Plan for any Non-Key Employee who participates in another
defined contribution plan subject to Code Section 412 included with
this Plan in a Required Aggregation Group.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined Account
of any Key Employee shall be equal to the ratio of the sum of the
Employer contributions allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations
set forth above shall be allocated to the Participant's Combined
Account of all Non-Key Employees who are Participants and who are
employed by the Employer on the last day of the Plan Year, including
Non-Key Employees who have (1) failed to complete a Year of Service;
and (2) declined to make mandatory contributions (if required) or, in
the case of a cash or deferred arrangement, elective contributions to
the Plan.
<PAGE>
(i) For the purposes of this Section, "415 Compensation"
shall be limited to $150,000. Such amount shall be adjusted for
increases in the cost of living in accordance with Code Section
401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with
or within such calendar year. For any short Plan Year, the "415
Compensation" limit shall be an amount equal to the "415 Compensation"
limit for the calendar year in which the Plan Year begins multiplied
by the ratio obtained by dividing the number of full months in the
short Plan Year by twelve (12).
(j) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the Plan
Year shall share in the salary reduction contributions made by the
Employer for the year of termination without regard to the Hours of
Service credited.
(k) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
(l) Notwithstanding anything to the contrary, if this is a
Plan that would otherwise fail to meet the requirements of Code
Sections 410(b)(1) or 410(b)(2)(A)(i) and the Regulations thereunder
because Employer contributions would not be allocated to a sufficient
number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include
the minimum number of Participants who would not otherwise be eligible
as are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of
this paragraph shall be those who are actively employed on the last
day of the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of Service
in the Plan Year.
(2) If, after application of the preceding paragraph,
the applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution for the
Plan Year shall be further expanded to include the minimum number of
Participants who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Participants who shall be eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
<PAGE>
(3) Nothing in this Section shall permit the reduction
of a Participant's accrued benefit. Therefore, any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount that would be deductible under Code Section 404.
Any adjustment to the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the last day of the Plan
Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the
annual allocation derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group for the Plan Year shall not be more than
the "Actual Deferral Percentage" of the Non-Highly Compensated
Participant group for the preceding Plan Year multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for
the Highly Compensated Participant group for the Plan Year over the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group for the preceding Plan Year shall not be more than
two percentage points. Additionally, the "Actual Deferral Percentage"
for the Highly Compensated Participant group for the Plan Year shall
not exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group for the preceding Plan Year multiplied
by 2. The provisions of Code Section 401(k)(3) and Regulation
1.401(k)-1(b) are incorporated herein by reference.
The Employer or a Participating Employer may elect
to apply subparagraphs (1) and (2) above by using the Plan Year rather
than the preceding Plan Year except that if such an election is made,
it may not be changed except as provided by the Secretary of the
Treasury.
In the case of the first Plan Year of the Plan
(other than a successor plan) with respect to the Employer or any
Participating Employer, the amount taken into account as the actual
deferral percentage of Nonhighly Compensated Employees for the
preceding year shall be three percent.
However, in order to prevent the multiple use of
the alternative method described in (2) above and in Code Section
401(m)(9)(A), any Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions under this Plan or
under any other plan maintained by the Employer or an Affiliated
Employer shall have a combination of his actual deferral ratio and his
actual contribution ratio reduced pursuant to Regulation 1.401(m)-2,
the provisions of which are incorporated herein by reference.
<PAGE>
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year,
the average of the ratios, calculated separately for each Participant
in such group, of the amount of Employer Elective Contributions
allocated to each Participant's Elective Account for the applicable
Plan Year, to such Participant's "414(s) Compensation" for the
applicable Plan Year. The actual deferral ratio for each Participant
and the "Actual Deferral Percentage" for each group shall be
calculated to the nearest one-hundredth of one percent. Employer
Elective Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess Deferred
Compensation to the extent such excess amounts are made under this
Plan or any other plan maintained by the Employer.
(c) [RESERVED]
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made or
suspended pursuant to Section 4.2.
(e) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include cash
or deferred arrangements are considered one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more
cash or deferred arrangements may be considered as a single
arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In
such a case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k). Plans may be aggregated under
this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more cash or
deferred arrangements (other than a cash or deferred arrangement which
is part of an employee stock ownership plan as defined in Code Section
4975(e)(7) or 409) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral ratio
with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different plan years, this
<PAGE>
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a single
arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer
Elective Contributions made pursuant to Section 4.4 do not satisfy one
of the tests set forth in Section 4.5(a), the Administrator shall
adjust Excess Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participants having the highest actual deferral dollar amounts shall
have their Excess Contributions distributed to them in the manner
prescribed by the Internal Revenue Service. However, in determining
the amount of Excess Contributions to be distributed with respect to
an affected Highly Compensated Participant as determined herein, such
amount shall be reduced pursuant to Section 4.2(f) by any Excess
Deferred Compensation previously distributed to such affected Highly
Compensated Participant for his taxable year ending with or within
such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close
of the Plan Year following the Plan Year to which they are allocable;
(ii) shall be adjusted for Income; and
(iii)shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of
Excess Contributions shall be treated as a pro rata distribution of
Excess Contributions and Income.
(3) [RESERVED]
(4) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related matching
contribution is distributed as an Excess Aggregate Contribution
pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the Plan
Year, the Employer may make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants electing
salary reductions pursuant to Section 4.2 in an amount sufficient to
satisfy one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated to the Participant's Elective Account
of each Non-Highly Compensated Participant electing salary reductions
pursuant to Section 4.2 in the same proportion that each such Non-
Highly Compensated Participant's Deferred Compensation for the year
bears to the total Deferred Compensation of all such Non-Highly
Compensated Participants.
<PAGE>
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the order
provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly
Compensated Participant group for the Plan Year shall not exceed the
greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group for the preceding Plan Year; or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group for the preceding Plan
Year, or such percentage for the Non-Highly Compensated Participant
group for the preceding Plan Year plus 2 percentage points. However,
to prevent the multiple use of the alternative method described in
this paragraph and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section
4.2 or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee contributions
or to receive matching contributions under this Plan or under any plan
maintained by the Employer or an Affiliated Employer shall have a
combination of his actual deferral ratio and his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2. The provisions of
Code Section 401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
The Employer or a Participating Employer may elect
to apply subparagraphs (1) and (2) above by using the Plan Year rather
than the preceding Plan Year except that if such an election is made,
it may not be changed except as provided by the Secretary of the
Treasury.
Rules similar to the rules of Code Section
401(k)(3)(E) shall apply for purposes of this paragraph.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately
for each Participant in each group) of:
(1) the sum of Employer matching contributions made
pursuant to Section 4.1(b) on behalf of each such Participant for the
applicable Plan Year; to
<PAGE>
(2) the Participant's "414(s) Compensation" for the
applicable Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant
to Section 4.8(d), only Employer matching contributions contributed to
the Plan prior to the end of the succeeding applicable Plan Year shall
be considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-1(b)) and
qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall
be treated as Employer matching contributions subject to Regulation
1.401(m)-1(b)(5) which is incorporated herein by reference. However,
the Plan Year must be the same as the plan year of the plan to which
the elective deferrals and the qualified non-elective contributions
are made.
(d) [RESERVED]
(e) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are
made are treated as one plan for purposes of Code Sections 401(a)(4)
or 410(b) (other than the average benefits test under Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as though such aggregated plans
were a single plan. Plans may be aggregated under this paragraph (e)
only if they have the same plan year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be aggregated
with this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant
under two or more plans (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7) or 409) which are maintained by
the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall
be aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans have
different plan years, this paragraph shall be applied by treating all
plans ending with or within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant shall
include any Employee eligible to have Employer matching contributions
pursuant to Section 4.1(b) (whether or not a deferral election was
made or suspended pursuant to Section 4.2(e)) allocated to his account
for the Plan Year.
<PAGE>
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage"
for the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to Highly Compensated Participants
having the highest actual contribution dollar amounts, his Vested
portion of Excess Aggregate Contributions (and Income allocable to
such contributions) and, if forfeitable, forfeit such non-Vested
Excess Aggregate Contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) in the manner
prescribed by the Internal Revenue Service.
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in proportion
to the Vested and non-Vested portion of such contributions, then the
Vested portion of the Participant's Account attributable to Employer
matching contributions after the correction shall be subject to
Section 6.5(h).
(b) Any distribution and/or forfeiture of less than the
entire amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution and/or forfeiture of Excess
Aggregate Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution of
Excess Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with Section
4.4.
(c) Excess Aggregate Contributions, including forfeited
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
Forfeited matching contributions that are reallocated
to Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of the Highly Compensated
Participant (determined prior to the application of this paragraph)
minus the amount determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined after application
of this paragraph) by his "414(s) Compensation." The actual
contribution ratio must be rounded to the nearest one-hundredth of one
percent. In no case shall the amount of Excess Aggregate Contribution
with respect to any Highly Compensated Participant exceed the amount
<PAGE>
of Employer matching contributions made pursuant to Section 4.1(b) and
any qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k)) maintained by the Employer that ends
with or within the Plan Year.
(f) [RESERVED]
(g) If during a Plan Year the projected aggregate amount of
Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the tests
set forth in Section 4.7(a), cause the Plan to fail such tests, then
the Administrator may automatically reduce proportionately or in the
order provided in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of the
tests set forth in Section 4.7(a). Such contribution shall be
allocated to the Participant's Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate
accounting of any special Qualified Non-Elective Contribution shall be
maintained in the Participant's Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any "limitation
year" shall equal the lesser of: (1) $30,000 adjusted annually as
provided in Code Section 415(d) pursuant to the Regulations, or (2)
twenty-five percent (25%) of the Participant's "415 Compensation" for
such "limitation year." For any short "limitation year," the dollar
limitation in (1) above shall be reduced by a fraction, the numerator
of which is the number of full months in the short "limitation year"
and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1) Employer
contributions, (2) Employee contributions, (3) forfeitures, (4)
<PAGE>
amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2) which is part of a
pension or annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable to post-
retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit plan (as defined in Code Section 419(e)) maintained by the
Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is otherwise
treated as an "annual addition," or (2) any amount otherwise treated
as an if annual addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to another
is not an "annual addition." In addition, the following are not
Employee contributions for the purposes of Section 4.9(b)(2): (1)
rollover contributions (as defined in Code Sections 402(e)(6),
403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant to Code
Section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable from gross
income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or businesses
under common control (as defined by Code Section 1563(a) or Code
Section 414(b) and (c) as modified by Code Section 415(h)), is a
member of an affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all
Employees of such Employers shall be considered to be employed by a
single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
<PAGE>
(h) (1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under this
Plan shall equal the maximum "annual additions" for the "limitation
year" minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, "annual additions" will
be credited to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date, the maximum
"annual additions" under this Plan shall equal the product of (A) the
maximum "annual additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs (1) or (2) above,
multiplied by (B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's accounts
under this Plan without regard to the limitations of Code Section 415
and (ii) the denominator of which is such "annual additions" for all
plans described in this subparagraph.
(i) If an Employee is (or has been) a Participant in one or
more defined benefit plans and one or more defined contribution plans
maintained by the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined benefit
plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar
limitation determined for the "limitation year" under Code Sections
415(b) and (d) or 140 percent of the highest average compensation,
including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation year"
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and in
the aggregate satisfied the requirements of Code Section 415 for all
"limitation years" beginning before January 1, 1987.
<PAGE>
(k) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is the sum of
the annual additions to the Participant's Account under all the
defined contribution plans (whether or not terminated) maintained by
the Employer for the current and all prior "limitation years"
(including the annual additions attributable to the Participant's
nondeductible Employee contributions to all defined benefit plans,
whether or not terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as defined in
Code Section 419(e), and individual medical accounts, as defined in
Code Section 415(l)(2), maintained by the Employer), and the
denominator of which is the sum of the maximum aggregate amounts for
the current and all prior "limitation years" of service with the
Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any
"limitation year" is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in effect
under Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the
first day of the first "limitation year" beginning after December 31,
1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the fractions as
they would be computed as of the end of the last "limitation year"
beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the
Code Section 415 limitation applicable to the first "limitation year"
beginning on or after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
(l) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under the
limits of Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to be
<PAGE>
exceeded for any Participant, the Administrator shall (1) distribute
any elective deferrals (within the meaning of Code Section 402(g)(3))
or return any Employee contributions (whether voluntary or mandatory),
and for the distribution of gains attributable to those elective
deferrals and Employee contributions, to the extent that the
distribution or return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining after
the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to reduce Employer contributions for
that Participant if that Participant is covered by the Plan as of the
end of the "limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary) to
all Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are made to
the Plan for such "limitation year" (4) reduce Employer contributions
to the Plan for such "limitation year" by the amount of the "Section
415 suspense account" allocated and reallocated during such
"limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, of
(1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of Code
Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of "excess
amounts" for all Participants in the Plan during the "limitation
year." The "Section 415 suspense account" shall not share in any
earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Eligible Employees, provided
that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax consequences
for the Employer. The amounts transferred shall be set up in a
separate account herein referred to as a "Participant's Rollover
Account." Such account shall be fully Vested at all times and shall
not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to elective contributions
(as defined in Regulation 1.401(k)-1(g)(3)), including amounts treated
<PAGE>
as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation 1.401(k)-1(d).
(d) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the amount
credited to the Participant's Rollover Account. Any distributions of
amounts held in a Participant's Rollover Account shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of
a Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers
made after a Valuation Date be segregated into a separate account for
each Participant in a federally insured savings account, certificate
of deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as
part of the general Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) distributions from another qualified plan which are eligible
rollover distributions and which are either transferred by the
Employee to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover; (iii)
amounts transferred to this Plan from a conduit individual retirement
account provided that the conduit individual retirement account has no
assets other than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum distribution, (B)
were eligible for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said assets;
and (iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of
this Section and may also require the Employee to provide an opinion
of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
<PAGE>
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of any
"Section 41 1 (d)(6) protected benefit" as described in Section 7.1.
(i) Notwithstanding any provision of the Plan to the
contrary, to the extent that any optional form of benefit under the
Plan permits a distribution prior to the Participant's retirement,
death, disability or severance from employment, and prior to Plan
termination, the optional form of benefit is not available with
respect to benefits attributable to assets (including the post-
transfer earnings thereon) and liabilities that are transferred,
within the meaning of Code Section 414(l), to the Plan from a money
purchase pension plan qualified under Code Section 401(a) (other than
any portion of those assets and liabilities attributable to voluntary
employee contributions).
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by
the Administrator (the Participant Direction Procedures) and applied
in a uniform nondiscriminatory manner, direct the Trustee to invest
all of their accounts in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction
Procedures. That portion of the interest of any Participant so
directing will thereupon be considered a Participant's Directed
Account.
(b) As of each Valuation Date, all Participant Directed
Accounts shall be charged or credited with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in the
market value using publicly listed fair market values when available
or appropriate.
(1) To the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets or investments,
the allocation of earnings, gains and losses of each Participant's
Directed Account shall be based upon the total amount of funds so
invested, in a manner proportionate to the Participant's share of such
pooled investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets, the
allocation of earnings, gains and losses from such assets shall be
made on a separate and distinct basis.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust
<PAGE>
Fund as it exists on the Valuation Date. In determining such net
worth, the Trustee shall value the assets comprising the Trust Fund at
their fair market value as of the Valuation Date and shall deduct all
expenses for which the Trustee has not yet obtained reimbursement from
the Employer or the Trust Fund. The Trustee may update the value of
any shares held in the Participant Directed Account by reference to
the number of shares held by that Participant, priced at the market
value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the
Administrator shall direct the Trustee to value the same at the prices
they were last traded on such exchange preceding the close of business
on the Valuation Date. If such securities were not traded on the
Valuation Date, or if the exchange on which they are traded was not
open for business on the Valuation Date, then the securities shall be
valued at the prices at which they were last traded prior to the
Valuation Date. Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the
Valuation Date, which bid price shall be obtained from a registered
broker or an investment banker. In determining the fair market value
of assets other than securities for which trading or bid prices can be
obtained, the Trustee may appraise such assets itself, or in its
discretion, employ one or more appraisers for that purpose and rely on
the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the
termination of his employment with the Employer to a later date, in
which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4,
shall continue until his Late Retirement Date. Upon a Participant's
Retirement Date or attainment of his Normal Retirement Date without
termination of employment with the Employer, or as soon thereafter as
is practicable, the Trustee shall distribute, at the election of the
Participant, all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
<PAGE>
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any remaining Vested
amounts credited to the accounts of a deceased Former Participant to
such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment
of the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any person
to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant
to this Section shall be the Participant's spouse. Except, however,
the Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected
to relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and be witnessed by a Plan representative or a
notary public. Further, the spouse's consent must be irrevocable and
must acknowledge the specific nonspouse Beneficiary.
<PAGE>
6.2 DETERMINATION OF BENEFITS UPON DEATH (THIS SECTION 6.2 APPLIES IN
LIEU OF THE PRECEDING SECTION 6.2 ONLY IF SPECIFIED IN PARTICIPATING
EMPLOYER'S ADOPTION AGREEMENT)
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any remaining Vested
amounts credited to the accounts of a deceased Former Participant to
such Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the Pre-Retirement
Survivor Annuity.
(d) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment
of the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any person
to receive payment shall be conclusive.
(e) Unless otherwise elected in the manner prescribed in
Section 6.6, the Participant's spouse shall receive a death benefit
equal to the Pre-Retirement Survivor Annuity. The Participant may
designate a Beneficiary other than his spouse to receive that portion
of his death benefit which is not payable as a Pre-Retirement Survivor
Annuity. The Participant may also designate a Beneficiary other than
his spouse to receive the Pre-Retirement Survivor Annuity but only if:
(1) the Participant and his spouse have validly waived
the Pre-Retirement Survivor Annuity in the manner prescribed in
Section 6.6, and the spouse has waived his or her right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
<PAGE>
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant
may at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary of that portion of the
death benefit that would otherwise be paid as a Pre-Retirement
Survivor Annuity unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elected to relinquish such right. The
Participant may, at any time, designate a Beneficiary to receive death
benefits that are in excess of the Pre-Retirement Survivor Annuity.
In the event no valid designation of Beneficiary exists at the time of
the Participant's death, the death benefit shall be payable to his
estate.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment,
all amounts credited to such Participant's Combined Account shall
become fully Vested. In the event of a Participant's Total and
Permanent Disability, the Trustee, in accordance with the provisions
of Sections 6.5 and 6.7, shall distribute to such Participant all
amounts credited to such Participant's Combined Account as though he
had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability or retirement, such Participant shall be entitled to such
benefits as are provided hereinafter pursuant to this Section 6.4.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated
Participant. Any distribution under this paragraph shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations
thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause the
entire Vested benefit to be paid to such Participant in a single lump
sum.
<PAGE>
For purposes of this Section 6.4, if the value of a
Terminated Participant's Vested benefit is zero, the Terminated
Participant shall be deemed to have received a distribution of such
Vested benefit.
(b) The Vested portion of any Participant's Account shall
be a percentage of the total amount credited to his Participant's
Account determined on the basis of the Participant's number of Years
of Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 20%
2 20%
3 40%
4 60%
5 80%
6 100%
(c) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer contributions to the Plan or
upon any full or partial termination of the Plan, all amounts credited
to the account of any affected Participant shall become 100% Vested
and shall not thereafter be subject to Forfeiture.
(d) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. For this
purpose, the Plan shall be treated as having been amended if the Plan
provides for an automatic change in vesting due to a change in top
heavy status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period may
elect to have his nonforfeitable percentage computed under the Plan
without regard to such amendment. If a Participant fails to make such
election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after the latest
of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
(e) (1) If any Former Participant shall be reemployed by
the Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if such
termination had not occurred.
<PAGE>
(2) If any Former Participant shall be reemployed by
the Employer before five (5) consecutive 1-Year Breaks in Service, and
such Former Participant had received, or was deemed to have received,
a distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated only if he
repays the full amount distributed to him before the earlier of five
(5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive 1-Year Breaks in Service commencing
after the distribution, or in the event of a deemed distribution, upon
the reemployment of such Former Participant. In the event the Former
Participant does repay the full amount distributed to him, or in the
event of a deemed distribution, the undistributed portion of the
Participant's Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the Valuation Date coinciding
with or preceding his termination. The source for such reinstatement
shall first be any Forfeitures occurring during the year. If such
source is insufficient, then the Employer shall contribute an amount
which is sufficient to restore any such forfeited Accounts provided,
however, that if a discretionary contribution is made for such year
pursuant to Section 4.1(d), such contribution shall first be applied
to restore any such Accounts and the remainder shall be allocated in
accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-
Year Break in Service has occurred, Years of Service shall include
Years of Service prior to his 1-Year Break in Service subject to the
following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be used for
computing Years of Service for eligibility and for vesting purposes
only after he has been employed for one (1) Year of Service following
the date of his reemployment with the Employer;
(ii) Any Former Participant who under the Plan
does not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits otherwise
allowable under (i) above if his consecutive 1-Year Breaks in Service
equal or exceed the greater of (A) five (5) or (B) the aggregate
number of his pre-break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of post-break
service;
(iv) If a Former Participant is reemployed by the
Employer, he shall participate in the Plan immediately on his date of
reemployment;
<PAGE>
(v) If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service disregarded pursuant
to (ii) above (a 1-Year Break in Service previously occurred, but
employment had not terminated) is credited with an Hour of Service
after the first eligibility computation period in which he incurs a 1-
Year Break in Service, he shall participate in the Plan immediately.
(f) In determining Years of Service for purposes of vesting
under the Plan, Years of Service prior to the vesting computation
period in which an Employee attained his eighteenth birthday shall be
excluded.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one lump-sum payment in cash or in property.
(b) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age or
age 62. With regard to this required consent:
(1) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the distribution of any
benefit. However, any election to defer the receipt of benefits shall
not apply with respect to distributions which are required under
Section 6.5(c).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no more than 90
days before the first day on which all events have occurred which
entitle the Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant receives the
notice and must not be made more than 90 days before the first day on
which all events have occurred which entitle the Participant to such
benefit.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does not
consent to the distribution.
If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution may commence less
than 30 days after the notice required under Regulation 1.41(a)-11(c)
is given, provided that: (1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at least
30 days after receiving the notice to consider the decision of whether
<PAGE>
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.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year following the later
of (i) the calendar year in which the Participant attains age 70 1/2 or
(ii) the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who becomes a "five
(5) percent owner" during any subsequent Plan Year, clause (ii) shall
no longer apply and the required beginning date shall be the April 1st
of the calendar year following the calendar year in which such
subsequent Plan Year ends.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the incidental
death benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
(d) All annuity Contracts under this Plan shall be non-
transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall
comply with all of the requirements of the Plan.
(e) If a distribution is made at a time when a Participant
is not fully Vested in his Participant's Account (employment has not
terminated) and the Participant may increase the Vested percentage in
such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution;
and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the account balance at
the relevant time, D is the amount of distribution, and R is the ratio
of the account balance at the relevant time to the account balance
after distribution.
<PAGE>
6.5 DISTRIBUTION OF BENEFITS (THIS SECTION 6.5 APPLIES IN LIEU OF THE
PREVIOUS SECTION 6.5 ONLY IF SPECIFIED IN PARTICIPATING EMPLOYER'S
ADOPTION AGREEMENT)
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the Annuity Starting Date and who does
not die before the Annuity Starting Date shall receive the value of
all of his benefits in the form of a joint and survivor annuity. The
joint and survivor annuity is an annuity that commences immediately
and shall be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall continue to
the spouse during the spouse's lifetime at a rate equal to 50% of the
rate at which such benefits were payable to the Participant. This
joint and 50% survivor annuity shall be considered the designated
qualified joint and survivor annuity and automatic form of payment for
the purposes of this Plan. However, the Participant may elect to
receive a smaller annuity benefit with continuation of payments to the
spouse at a rate of seventy-five percent (75%) or one hundred percent
(100%) of the rate payable to a Participant during his lifetime, which
alternative joint and survivor annuity shall be equal in value to the
automatic joint and 50% survivor annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life annuity.
Such unmarried Participant, however, may elect in writing to waive the
life annuity. The election must comply with the provisions of this
Section as if it were an election to waive the joint and survivor
annuity by a married Participant, but without the spousal consent
requirement. The Participant may elect to have any annuity provided
for in this Section distributed upon the attainment of the "earliest
retirement age" under the Plan. The "earliest retirement age" is the
earliest date on which, under the Plan, the Participant could elect to
receive retirement benefits.
(2) Any election to waive the joint and survivor
annuity must be made by the Participant in writing during the election
period and be consented to by the Participant's spouse. If the spouse
is legally incompetent to give consent, the spouse's legal guardian,
even if such guardian is the Participant, may give consent. Such
election shall designate a Beneficiary (or a form of benefits) that
may not be changed without spousal consent (unless the consent of the
spouse expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Administrator that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election
made by the Participant and consented to by his spouse may be revoked
by the Participant in writing without the consent of the spouse at any
time during the election period. The number of revocations shall not
be limited. Any new election must comply with the requirements of
this paragraph. A former spouse's waiver shall not be binding on a
new spouse.
<PAGE>
(3) The election period to waive the joint and
survivor annuity shall be the 90 day period ending on the Annuity
Starting Date.
(4) With regard to the election, the Administrator
shall provide to the Participant no less than 30 days and no more than
90 days before the Annuity Starting Date a written explanation of:
(i) the terms and conditions of the joint and
survivor annuity,
(ii) the Participant's right to make, and the
effect of, an election to waive the joint and survivor annuity,
(iii) the right of the Participant's spouse to
consent to any election to waive the joint and survivor annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(5) Any distribution provided for in this Section 6.5
may commence less than 30 days after the notice required by Code
Section 417(a)(3) is given, provided that:
(i) the Administrator clearly informs the
Participant that the Participant has a right to a period of 30 days
after receiving the notice to consider whether to waive the joint and
survivor annuity and consent to a form of distribution other than a
joint and survivor annuity,
(i) the Participant is permitted to revoke an
affirmative distribution election at least until the Annuity Starting
Date, or, if later, at any time prior to the expiration of the 7-day
period that begins the day after the explanation of the joint and
survivor annuity is provided to the Participant,
(iii) the Annuity Starting Date is after the date
that the explanation of the joint and survivor annuity is provided to
the Participant. However, the Annuity Starting Date may be before the
date that any affirmative distribution election is made by the
Participant and before the date that the distribution is permitted to
commence under (iv) below, and
(iv) distribution in accordance with the
affirmative election does not commence before the expiration of the 7-
day period that begins the day after the explanation of the joint and
survivor annuity is provided to the Participant.
(b) In the event a married Participant duly elects pursuant
to paragraph (a)(2) above not to receive his benefit in the form of a
joint and survivor annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the
election of the Participant, shall direct the Trustee to distribute to
a Participant or his Beneficiary any amount to which he is entitled
under the Plan in one or more of the following methods:
<PAGE>
(1) One lump-sum payment in cash or in property.
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments. In order to
provide such installment payments, the Administrator may (A) segregate
the aggregate amount thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings and loan
association, money market certificate or other liquid short-term
security or (B) purchase a nontransferable annuity contract for a term
certain (with no life contingencies) providing for such payment. The
period over which such payment is to be made shall not extend beyond
the Participant's life expectancy (or the life expectancy of the
Participant and his designated Beneficiary).
(3) Purchase of or providing an annuity. However,
such annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the Participant (or
the lives of the Participant and his designated Beneficiary) or the
life expectancy of the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(4) Any alternative method of equivalent value
contained in the Plan or any tax-qualified plan of a Participating
Employer if assets of such plan are merged or transferred into the
Plan at any time on or after the first day of the first Plan Year
beginning after the Effective Date of the Plan.
(c) The present value of a Participant's joint and survivor
annuity derived from Employer and Employee contributions may not be
paid without his written consent if the value exceeds, or has ever
exceeded, $3,500 at the time of any prior distribution. Further, the
spouse of a Participant must consent in writing to any immediate
distribution. Any written consent required by this Section 6.5(c)
must be obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with Section
6.5(a)(2).
If the value of the Participant's benefit derived from
Employer and Employee contributions does not exceed $3,500 and has
never exceeded $3,500 at the time of any prior distribution, the
Administrator may immediately distribute such benefit without such
Participant's consent. No distribution may be made under the
preceding sentence after the Annuity Starting Date unless the
Participant and his spouse consent in writing to such distribution.
(d) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution commences prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
<PAGE>
(1) No consent shall be valid unless the Participant
has received a general description of the material features and an
explanation of the relative values of the optional forms of benefit
available under the Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the commencement of payment of
any benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required under
Section 6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no more than 90
days before the Annuity Starting Date.
(4) Written consent of the Participant to the
distribution must not be made before the Participant receives the
notice and must not be made more than 90 days before the Annuity
Starting Date.
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does not
consent to the distribution.
Any such distribution may commence less than 30
days, subject to Section 6.5(a)(5), after the notice required under
Regulation 1.411(a)-Il(c) is given, provided that: (1) the
Administrator clearly informs the Participant that the Participant has
a right to a period of at least 30 days after receiving the notice to
consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (2) the
Participant, after receiving the notice, affirmatively elects a
distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits, whether under
the Plan or through the purchase of an annuity contract, shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed or
must begin to be distributed to him not later than April 1st of the
calendar year following the later of (i) the calendar year in which
the Participant attains age 70 1/2 or (ii) the calendar year in which
the Participant retires, provided, however, that this clause (ii)
shall not apply in the case of a Participant who is a "five (5)
percent owner" at any time during the five (5) Plan Year period ending
in the calendar year in which he attains age 70 1/2 or, in the case of a
Participant who becomes a "five (5) percent owner" during any
<PAGE>
subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the calendar year
following the calendar year in which such subsequent Plan Year ends.
Such distributions shall be equal to or greater than any required
distribution.
Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as determined under the
preceding paragraph and must be made over the life of the Participant
(or the lives of the Participant and the Participant's designated
Beneficiary) or the life expectancy of the Participant (or the life
expectancies of the Participant and his designated Beneficiary) in
accordance with Regulations.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the incidental
death benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations.
The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-
transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall
comply with all of the requirements of the Plan.
(h) If a distribution is made at a time when a Participant
is not fully Vested in his Participant's Account and the Participant
may increase the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution;
and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the
Vested percentage at the relevant time, AB is the account balance at
the relevant time, D is the amount of distribution, and R is the ratio
of the account balance at the relevant time to the account balance
after distribution.
<PAGE>
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall
be paid to the Participant's Beneficiary in one lump-sum payment in
cash or in property subject to the rules of Section 6.6(b).
(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder. If
it is determined pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining portion of
such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of his date
of death. If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before distributions
are deemed to have begun pursuant to Regulations, then his death
benefit shall be distributed to his Beneficiaries by December 31st of
the calendar year in which the fifth anniversary of his date of death
occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary), be distributed over a period not extending beyond the
life expectancy of such designated Beneficiary provided such
distribution begins not later than December 31st of the calendar year
immediately following the calendar year in which the Participant died.
However, in the event the Participant's spouse (determined as of the
date of the Participant's death) is his Beneficiary, the requirement
that distributions commence within one year of a Participant's death
shall not apply. In lieu thereof, distributions must commence on or
before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died;
or (2) December 31st of the calendar year in which the Participant
would have attained age 70 1/2. If the surviving spouse dies before
distributions to such spouse begin, then the 5-year distribution
requirement of this Section shall apply as if the spouse was the
Participant.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH (THIS SECTION 6.6 APPLIES IN
LIEU OF THE PREVIOUS SECTION 6.6 ONLY IF SPECIFIED IN PARTICIPATING
EMPLOYER'S ADOPTION AGREEMENT)
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the Annuity Starting Date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid
to his surviving spouse. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence within a
<PAGE>
reasonable period after the Participant's death. If the spouse does
not so direct, payment of such benefit will commence at the time the
Participant would have attained the later of his Normal Retirement Age
or age 62. However, the spouse may elect a later commencement date.
Any distribution to the Participant's spouse shall be subject to the
rules specified in Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the Participant
in writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
6.5(a)(2). Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elects
to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in
which the Participant attains age 35 and end on the date of the
Participant's death. An earlier waiver (with spousal consent) may be
made provided a written explanation of the Pre-Retirement Survivor
Annuity is given to the Participant and such waiver becomes invalid at
the beginning of the Plan Year in which the Participant turns age 35.
In the event a Vested Participant separates from service prior to the
beginning of the election period, the election period shall begin on
the date of such separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect to
such Participant (and consistent with Regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 6.5(a)(4).
For the purposes of this paragraph, the term "applicable period"
means, with respect to a Participant, whichever of the following
periods ends last:
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the Pre-Retirement Survivor
Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
<PAGE>
(5) A reasonable period after separation from service
in the case of a Participant who separates before attaining age 35.
For this purpose, the Administrator must provide the explanation
beginning one year before the separation from service and ending one
year after such separation. If such a Participant thereafter returns
to employment with the Employer, the applicable period for such
Participant shall be redetermined.
For purposes of applying this Section 6.6(d), a
reasonable period ending after the enumerated events described in
paragraphs (2), (3) and (4) is the end of the two year period
beginning one year prior to the date the applicable event occurs, and
ending one year after that date.
(e) If the aggregate value of the Participant's account
balance derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the immediate
distribution of the present value of the Pre-Retirement Survivor
Annuity to the Participant's spouse. No distribution may be made
under the preceding sentence after the Annuity Starting Date unless
the spouse consents in writing. If the value exceeds, or has ever
exceeded, $3,500 at the time of any prior distribution, an immediate
distribution of the entire amount of the Pre-Retirement Survivor
Annuity may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any written consent
required under this paragraph must be obtained not more than 90 days
before commencement of the distribution and shall be made in a manner
consistent with Section 6.5(a)(2).
(f) (1) To the extent the death benefit is not paid in the
form of a Pre-Retirement Survivor Annuity, it shall be paid to the
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary), subject to the rules
specified in Section 6.6(g):
(i) One lump-sum payment in cash or in property.
(ii) Payment in monthly, quarterly, semi-annual,
or annual cash installments over a period to be determined by the
Participant or his Beneficiary. After periodic installments commence,
the Beneficiary shall have the right to direct the Trustee to reduce
the period over which such periodic installments shall be made, and
the Trustee shall adjust the cash amount of such periodic installments
accordingly.
(2) In the event the death benefit payable pursuant to
Section 6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct the Trustee to segregate the
death benefit into a separate account, and the Trustee shall invest
such segregated account separately, and the funds accumulated in such
account shall be used for the payment of the installments.
<PAGE>
(g) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder. If
the death benefit is paid in the form of a Pre-Retirement Survivor
Annuity, then distributions to the Participant's surviving spouse must
commence on or before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If it is determined
pursuant to Regulations that the distribution of a Participant's
interest has begun and the Participant dies before his entire interest
has been distributed to him, the remaining portion of such interest
shall be distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of death.
If a Participant dies before he has begun to receive any distributions
of his interest under the Plan or before distributions are deemed to
have begun pursuant to Regulations (and distributions are not to be
made in the form of a Pre-Retirement Survivor Annuity), then his death
benefit shall be distributed to his Beneficiaries by December 31st of
the calendar year in which the fifth anniversary of his date of death
occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary), be distributed over the life of such designated
Beneficiary (or over a period not extending beyond the life expectancy
of such designated Beneficiary) provided such distribution begins not
later than December 31st of the calendar year immediately following
the calendar year in which the Participant died. However, in the
event the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's death shall
not apply. In lieu thereof, distributions must commence on or before
the later of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the Participant would have
attained age 70 1/2. If the surviving spouse dies before distributions
to such spouse begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(h) For purposes of Section 6.6(g), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement must be made no later than December 31st of the calendar
year following the calendar year of the Participant's death. Except,
however, with respect to a designated Beneficiary who is the
Participant's surviving spouse, the election must be made by the
earlier of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died or, if
later, the calendar year in which the Participant would have attained
<PAGE>
age 70 1/2; or (2) December 31st of the calendar year which contains the
fifth anniversary of the date of the Participant's death. An election
by a designated Beneficiary must be in writing and shall be
irrevocable as of the last day of the election period stated herein.
In the absence of an election by the Participant or a designated
Beneficiary, the 5-year distribution requirement shall apply.
(i) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations.
The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee
is to make a distribution or to commence a series of payments the
distribution may be made or begun as soon as is practicable. However,
unless a Former Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more
than incidental), the payment of benefits shall begin not later than
the 60th day after the close of the Plan Year in which the latest of
the following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age specified
herein; (b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the Participant
terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible
adult with whom the Beneficiary maintains his residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or
Gift to Minors Act, if such is permitted by the laws of the state in
which said Beneficiary resides. Such a payment to the legal guardian,
custodian or parent of a minor Beneficiary shall fully discharge the
Trustee, Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the
later of the Participant's attainment of age 62 or his Normal
Retirement Age, remain unpaid solely by reason of the inability of the
Administrator, after sending a registered letter, return receipt
<PAGE>
requested, to the last known address, and after further diligent
effort, to ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be treated as a
Forfeiture pursuant to the Plan. In the event a Participant or
Beneficiary is located subsequent to his benefit being reallocated,
such benefit shall be restored unadjusted for earnings or losses.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of 59 1/2
years, the Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount then
credited to the accounts maintained on behalf of the Participant.
However, no distribution from the Participant's Account shall occur
prior to 100% vesting. In the event that the Administrator makes such
a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner
consistent with Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 417 and 411(a)(11) and the
Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted prior to the
Participant attaining age 59 1/2 except as otherwise permitted under the
terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any one
Plan Year up to the lesser of 100% of his Participant's Elective
Account valued as of the last Valuation Date or the amount necessary
to satisfy the immediate and heavy financial need of the Participant.
Any distribution made pursuant to this Section shall be deemed to be
made as of the first day of the Plan Year or, if later, the Valuation
Date immediately preceding the date of distribution, and the
Participant's Elective Account shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the Participant, his spouse, or
any of his dependents (as defined in Code Section 152) or necessary
for these persons to obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage payments);
(3) Payment of tuition, related educational fees, and
room and board expenses for the next twelve (12) months of post-
secondary education for the Participant, his spouse, children, or
dependents; or
<PAGE>
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's representation
and such other facts as are known to the Administrator, determines
that all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant. The amount
of the immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable (at the time of
the loan) loans currently available under all plans maintained by the
Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective deferrals and
voluntary Employee contributions will be suspended for at least twelve
(12) months after receipt of the hardship distribution or, the
Participant, pursuant to a legally enforceable agreement, will suspend
his elective deferrals and voluntary Employee contributions to the
Plan and all other plans maintained by the Employer for at least
twelve (12) months after receipt of the hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make elective deferrals
for the Participant's taxable year immediately following the taxable
year of the hardship distribution in excess of the applicable limit
under Code Section 402(g) for such next taxable year less the amount
of such Participant's elective deferrals for the taxable year of the
hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited solely to the Participant's total Deferred Compensation as of
the date of distribution, reduced by the amount of any previous
distributions pursuant to this Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 417 and 411(a)(11) and the Regulations
thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to
any "alternate payee" under a "qualified domestic relations order."
Furthermore, a distribution to an "alternate payee" shall be permitted
if such distribution is authorized by a "qualified domestic relations
<PAGE>
order," even if the affected Participant has not separated from
service and has not reached the "earliest retirement age" under the
Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the
meaning set forth under Code Section 414(p).
6.13 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Section, a distributes may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly to
an eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section, the following definitions
shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is required
under Code Section 401(a)(9); the portion of any other distribution
that is not includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to employer
securities); and any other distribution that is reasonably expected to
total less than $200 during a year.
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is
an individual retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Code Section 414(p), are distributees with regard to the
interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
<PAGE>
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer, acting pursuant to authorization of the
Employer's Board of Directors or other governing body, shall have the
right at any time to amend the Plan, subject to the limitations of
this Section. In addition, the Chief Executive Officer of the
Employer shall have the right at any time to amend technical and other
provisions of the Plan that do not materially increase the cost to the
Employer of providing benefits under the Plan. Any amendment to the
Plan shall be by written instrument signed by the Chief Executive
Officer or other presiding officer of the Employer. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator, other than an amendment to remove the
Trustee or Administrator, may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part
as is required to pay taxes and administration expenses) to be used
for or diverted to any purpose other than for the exclusive benefit of
the Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become
property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment
or transaction having the effect of a Plan amendment (such as a
merger, plan transfer or similar transaction) shall be effective to
the extent it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on
such benefit unless such protected benefits are preserved with respect
to benefits accrued as of the later of the adoption date or effective
date of the amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination. Upon any full or partial
termination, all amounts credited to the affected Participants'
Combined Accounts shall become 100% Vested as provided in Section 6.4
and shall not thereafter be subject to forfeiture, and all unallocated
amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
<PAGE>
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or in property or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not result
in the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only
if the benefits which would be received by a Participant of this Plan,
in the event of a termination of the plan immediately after such
transfer, merger or consolidation, are at least equal to the benefits
the Participant would have received if the Plan had terminated
immediately before the transfer, merger or consolidation, and such
transfer, merger or consolidation does not otherwise result in the
elimination or reduction of any "Section 411(d)(6) protected benefits"
in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make
loans to Participants and Beneficiaries under the following
circumstances: (1) loans shall be made available to all Participants
and Beneficiaries on a reasonably equivalent basis; (2) loans shall
not be made available to Highly Compensated Employees in an amount
greater than the amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of interest; (4)
loans shall be adequately secured; and (5) shall provide for repayment
over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date on which
such loan is made, over the outstanding balance of loans from the Plan
to the Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the
Employer shall be considered one plan.
<PAGE>
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a period
not to exceed five (5) years. However, loans used to acquire any
dwelling unit which, within a reasonable time, is to be used
(determined at the time the loan is made) as a principal residence of
the Participant shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years. For this purpose, a
principal residence has the same meaning as a principal residence
under Code Section 1034.
(d) [THIS SUBPARAGRAPH (d) APPLIES ONLY IF ANY PORTION OF A
PARTICIPANT'S COMBINED ACCOUNT IS SUBJECT TO THE JOINT AND SURVIVOR
ANNUITY AND PRE-RETIREMENT ANNUITY PROVISIONS OF THE PLAN] Any loan
made pursuant to this Section where the Vested interest of the
Participant is used to secure such loan shall require the written
consent of the Participant's spouse in a manner consistent with
Section 6.5(a). Such written consent must be obtained within the 90-
day period prior to the date the loan is made. However, no spousal
consent shall be required under this paragraph if the total accrued
benefit subject to the security is not in excess of $3,500.
(e) Any loans granted or renewed shall be made pursuant to
a Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized
to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
Such Participant loan program shall be contained
in a separate written document which, when adopted by the
Administrator, is hereby incorporated by reference and made a part of
the Plan. Furthermore, such Participant loan program may be modified
or amended in writing from time to time without the necessity of
amending this Section.
Loan repayments will be suspended under the Plan
as permitted under Code Section 414(u)(4).
<PAGE>
ARTICLE VIII
TOP HEAVY
8.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code
Section 416(c) pursuant to Section 4.4 of the Plan.
8.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior Plan Year,
such Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former Participant has
not performed any services for any Employer maintaining the Plan at
any time during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant shall
not be taken into account for the purposes of determining whether this
Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as
of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due on or
before the Determination Date, except for the first Plan Year when
such adjustment shall also reflect the amount of any contributions
made after the Determination Date that are allocated as of a date in
that first Plan Year.
<PAGE>
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
Valuation Date and prior to the Determination Date, such distributions
are not included as distributions for top heavy purposes to the extent
that such distributions are already included in the Participant's
Aggregate Account balance as of the Valuation Date. Notwithstanding
anything herein to the contrary, all distributions, including
distributions under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation
Group, will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a part
of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always consider such
rollovers or plan-to-plan transfers as a distribution for the
purposes of this Section. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as a distribution
for purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or plan-to-
plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in (5) and (6) above,
all employers aggregated under Code Section 414(b), (c), (m) and (o)
are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the Employer in
which a Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and each
other plan of the Employer which enables any plan in which a Key
Employee participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated. Such group shall
be known as a Required Aggregation Group.
<PAGE>
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group,
only a plan that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is a
Top Heavy Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is not
a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top Heavy
Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the last five (5)
years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the
last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee, shall be as determined using
the single accrual method used for all plans of the Employer and
Affiliated Employers, or if no such single method exists, using a
method which results in benefits accruing not more rapidly than the
slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall 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 Code Section 416 and the Regulations thereunder for the
first and second plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
<PAGE>
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing
contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge any Participant
or Employee at any time regardless of the effect which such discharge
shall have upon him as a Participant of this Plan. Notwithstanding
any provision of the Plan to the contrary, contributions, benefits and
service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
9.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable out of the Trust Fund to any person (including
a Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a result of a
loan from the Plan. At the time a distribution is to be made to or
for a Participant's or Beneficiary's benefit, such proportion of the
amount distributed as shall equal such loan indebtedness shall be paid
by the Trustee to the Trustee or the Administrator, at the direction
of the Administrator, to apply against or discharge such loan
indebtedness. Prior to making a payment, however, the Participant or
Beneficiary must be given written notice by the Administrator that
such loan indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or Beneficiary
does not agree that the loan indebtedness is a valid claim against his
Vested Participant's Combined Account, he shall be entitled to a
review of the validity of the claim in accordance with procedures
provided in Sections 2.7 and 2.8.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order," a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
<PAGE>
9.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of Texas, other than its laws respecting
choice of law, to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used
in another gender in all cases where they would so apply, and whenever
any words are used herein in the singular or plural form, they shall
be construed as though they were also used in the other form in all
cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding
the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses
pertaining thereto incurred by them for which they shall have become
liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or
of the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any trust fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes other
than the exclusive benefit of Participants, Retired Participants, or
their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so returned.
<PAGE>
9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such Fiduciary
handles; provided, however, that the minimum bond shall be $1,000 and
the maximum bond, $500,000. The amount of funds handled shall be
determined at the beginning of each Plan Year by the amount of funds
handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is
no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to
the Plan against any loss by reason of acts of fraud or dishonesty by
the Fiduciary alone or in connivance with others. The surety shall be
a corporate surety company (as such term is used in Act Section
412(a)(2)), and the bond shall be in a form approved by the Secretary
of Labor. Notwithstanding anything in the Plan to the contrary, the
cost of such bond shall be an expense of and may, at the election of
the Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any Contract
issued hereunder or for the failure on the part of the insurer to make
payments provided by any such Contract, or for the action of any
person which may delay payment or render a Contract null and void or
unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or
legal aspects of this Plan. The insurer shall be protected and held
harmless in acting in accordance with any written direction of the
Trustee, and shall have no duty to see to the application of any funds
paid to the Trustee, nor be required to question any actions directed
by the Trustee. Regardless of any provision of this Plan, the insurer
shall not be required to take or permit any action or allow any
benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of the
Plan, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer, either of whom
may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
<PAGE>
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done
and performed by a person duly authorized by its legally constituted
authority or such person or persons designated by its legally
constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall
have only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan or as
accepted by or assigned to them pursuant to any procedure provided
under the Plan, including but not limited to any agreement allocating
or delegating their responsibilities, the terms of which are
incorporated herein by reference. In general, unless otherwise
indicated herein or pursuant to such agreements, the Employer shall
have the duties specified in Article II hereof, as the same may be
allocated or delegated thereunder, including but not limited to the
responsibility for making the contributions provided for under Section
4.1; and shall have the authority to appoint and remove the Trustee
and the Administrator; to formulate the Plan's "funding policy and
method"; and to amend or terminate, in whole or in part, the Plan.
The Administrator shall have the responsibility for the administration
of the Plan, including but not limited to the items specified in
Article II of the Plan, as the same may be allocated or delegated
thereunder. The Trustee shall have the responsibility of management
and control of the assets held under the Trust, except to the extent
directed pursuant to Article II or with respect to those assets, the
management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned
to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance
with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary
may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required
under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own
powers, duties, responsibilities and obligations under the Plan as
specified or allocated herein. No named Fiduciary shall guarantee the
Trust Fund in any manner against investment loss or depreciation in
asset value. Any person or group may serve in more than one Fiduciary
capacity. In the furtherance of their responsibilities hereunder, the
"named Fiduciaries" shall be empowered to interpret the Plan and Trust
and to resolve ambiguities, inconsistencies and omissions, which
findings shall be binding, final and conclusive.
<PAGE>
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of
the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by
law for filing the Employer's return for the taxable year in which the
Plan was adopted, or such later date as the Secretary of the Treasury
may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.5, 3.6, and 4.1(e), any contribution by the Employer to the
Trust Fund is conditioned upon the deductibility of the contribution
by the Employer under the Code and, to the extent any such deduction
is disallowed, the Employer may, within one (1) year following the
disallowance of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one
(1) year following the disallowance. Earnings of the Plan
attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount
so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict
between the terms of this Plan and any Contract purchased hereunder,
the Plan provisions shall control.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent
of the Employer and Trustee, any other corporation or entity, whether
an affiliate or subsidiary or not, may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a
Participating Employer, by a properly executed document evidencing
said intent and will of such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to
use the same Trustee as provided in this Plan.
<PAGE>
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof. However,
the assets of the Plan shall, on an ongoing basis, be available to pay
benefits to all Participants and Beneficiaries under the Plan without
regard to the Employer or Participating Employer who contributed such
assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer
or a Participating Employer, shall not affect such Participant's
rights under the Plan, and all amounts credited to such Participant's
Combined Account as well as his accumulated service time with the
transferor or predecessor, and his length of participation in the
Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants of the
Employer or Participating Employer by which the forfeiting Participant
was employed, except if the Forfeiture is for an Employee whose
Employer is an Affiliated Employer, then said Forfeiture shall inure
to the benefit of the Participants of those Employers who are
Affiliated Employers. Should an Employee of one ("First") Employer be
transferred to an associated ("Second") Employer which is an
Affiliated Employer, such transfer shall not cause his account balance
(generated while an Employee of "First" Employer) in any manner, or by
any amount to be forfeited. Such Employee's Participant Combined
Account balance for all purposes of the Plan, including length of
service, shall be considered as though he had always been employed by
the "Second" Employer and as such had received contributions,
forfeitures, earnings or losses, and appreciation or depreciation in
value of assets totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this
Plan; provided, however, that with respect to all of its relations
with the Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably
the Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to include
each Participating Employer as related to its adoption of the Plan.
<PAGE>
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and
eligibility. No such transfer shall effect a termination of
employment hereunder, and the Participating Employer to which the
Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the
Participating Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year
shall be allocated only among those Participants of the Employer or
Participating Employer making the contribution, except if the
contribution is made by an Affiliated Employer, in which event such
contribution shall be allocated among all Participants of all
Participating Employers who are Affiliated Employers in accordance
with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books
and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register
Contracts so as to evidence that a particular Participating Employer
is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing
Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the
written action of each and every Participating Employer and with the
consent of the Trustee where such consent is necessary in accordance
with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or
revoke its participation in the Plan. At the time of any such
discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee. The
Trustee shall thereafter transfer, deliver and assign Contracts and
other Trust Fund assets allocable to the Participants of such
Participating Employer to such new Trustee as shall have been
designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided
however, that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected benefits"
in accordance with Section 7.1(c). If no successor is designated, the
Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of the Trust. In no
such event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted to
purposes other than for the exclusive benefit of the Employees of such
Participating Employer.
<PAGE>
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating
Employers and all Participants, to effectuate the purpose of this
Article. IN WITNESS WHEREOF, Physicians Resource Group, Inc. has
caused this instrument to be executed on the _____ day of December,
1996, but effective as of 1st day of January, 1997.
PHYSICIANS RESOURCE GROUP, INC.,
a Delaware Corporation
________________________________
By: /s/Richard J. D'Amico
Its: Executive Vice President
