<PAGE> 1
As filed with the Securities and Exchange Commission on September 13, 1996
Registration No. 333- . . . . . .
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
----------------------
NHP INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 52-1445137
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
</TABLE>
8065 Leesburg Pike, Suite 400
Vienna, Virginia 22182
(703) 394-2400
(Address of Principal Executive Offices)
NHP INCORPORATED
AMENDED AND RESTATED 401(k) RETIREMENT PLAN
(Full title of the plan)
J. RODERICK HELLER, III
8065 Leesburg Pike, Suite 400
Vienna, Virginia 22182
(703) 394-2400
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
==============================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities To Be Offering Price Aggregate Registration
To Be Registered Registered Per Share Offering Price Fee
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common
Stock, $.01 par
value (1) 500,000 $19.00 $9,500,000 $3,275.86
Plan Interests (2)
</TABLE>
(1) The number of shares covered by this registration statement is the estimate
of NHP Incorporated (the "Company") of the number of shares of common stock of
the Company ("Common Stock") that will be purchased by the NHP Incorporated
Amended and Restated 401(k) Retirement Plan (the "Plan"). The price of the
Common Stock is estimated in accordance with Rules 457(h) and 457(c) under the
Securities Act of 1933 (the "Securities Act") solely for the purpose of
calculating the registration fee on the basis of the average of the high and low
prices of the Common Stock of the Company as quoted on the NASDAQ National
Market System on September 9, 1996.
(2) Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement covers an indeterminate amount of interests to be offered or sold
pursuant to the Plan (the "Plan Interests").
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I will be sent
or given to employees as specified by Rule 428(b)(1). In accordance with the
instructions to Part I of Form S-8, such documents will not be filed with the
Securities and Exchange Commission (the "Commission") either as part of this
registration statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company or
the Plan are incorporated herein by reference:
(a) The annual report on Form 10-K of the Company filed on March 29,
1996 for the fiscal year ended December 31, 1995 (the "Annual Report") pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act").
(b) All documents filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year covered by the Annual Report referred to in
(a) above.
(c) The description of the Common Stock, par value $.01 per share of the
Company (the "Common Stock") contained in the Company's Registration Statement
on Form 8-A filed with the Commission on August 7, 1995, including any amendment
or report filed for the purpose of updating such description.
In addition, all reports and other documents filed by the Company after the
date of this registration statement pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
that indicates that all securities offered have been sold or that deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") provides
that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving at the corporation's request in
such capacity in another corporation or business association, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement,
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, if such person acted in good faith and in a manner such
person reasonably believes to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. Similar
indemnity is permitted to be provided to such persons in connection with an
action or suit by or in the right of the corporation, provided such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and provided further (unless
and to the extent that a court of competent jurisdiction provides otherwise),
that such person shall not have been adjudged liable to the corporation.
Section 8.01 of the Company's Bylaws provides in effect that the Company shall
indemnify its directors and officers to the fullest extent permitted by
Section 145 of the DGCL.
Section 102(b)(7) of the DGCL provides that a corporation shall have
the power, if its certificate of incorporation so permits, to eliminate or limit
the personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director except for the
liability of a director (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL (regarding unlawful payments of dividends
and unlawful stock purchases and redemptions) or (iv) for any transaction from
which the director derived an improper personal benefit. The Company's
Certificate of Incorporation limits directors' liability to the maximum extent
permitted by law.
See Item 9 for the Registrant's undertakings with respect to
indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The Exhibits to this registration statement are listed on the Index to
the Exhibits on page 7 of this registration statement which Index is herein
incorporated by reference.
The undersigned registrant undertakes that it will submit the Plan and
any amendments thereto to the Internal Revenue Service in a timely manner and
will make all changes required by the Internal Revenue Service in order to
qualify the Plan.
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<PAGE> 4
ITEM 9. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; except, in the case of phrases (i)
and (ii), to the extent the information required is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated herein by reference.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth in Item 6, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Vienna, Virginia on the 13th day of September, 1996.
NHP INCORPORATED
By: /S/ J. Roderick Heller, III
----------------------------
J. Roderick Heller, III
Chief Exectuvie Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signature" constitutes and appoints J. Roderick
Heller, III and Joel F. Bonder as his or her true and lawful attorneys-in-fact
each acting alone, with full power of substitution and resubstitution, for him
or her and in his or her name, place and stead, in any and all capacities to
sign any or all amendments (including post-effective amendments) to this
registration statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully for all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact, or their substitutes, each acting alone, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ J. Roderick Heller, III
- --------------------------- Chairman of the Board, September 13, 1996
J. Roderick Heller, III Chief Executive Officer,
President and Director
(principal executive officer)
/s/ Ann Torre Grant
- --------------------------- Executive Vice President, September 13, 1996
Ann Torre Grant Chief Financial Officer
and Treasurer
(principal financial officer)
/s/ Jeffrey J. Ochs
- --------------------------- Vice President and Chief September 13, 1996
Jeffrey J. Ochs Accounting Officer
(principal accounting officer)
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard S. Bodman
- --------------------------- Director September 13, 1996
Richard S. Bodman
/s/ John W. Creighton, Jr.
- --------------------------- Director September 13, 1996
John W. Creighton, Jr.
/s/ Lloyd N. Cutler
- --------------------------- Director September 13, 1996
Lloyd N. Cutler
/s/ Michael R. Eisenson
- --------------------------- Director September 13, 1996
Michael R. Eisenson
/s/ Tim R. Palmer
- --------------------------- Director September 13, 1996
Tim R. Palmer
/s/ Herbert S. Winokur, Jr.
- --------------------------- Director September 13, 1996
Herbert S. Winokur, Jr.
</TABLE>
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Plan Administrator has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Vienna, Virginia,
on September 13, 1996.
NHP Incorporated Amended and Restated
401(k) Retirement Plan
By: /s/ Ann Torre Grant
------------------------------------
Name: Ann Torre Grant
Title: Chief Financial Officer
and Executive Vice President
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<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
4.1 The NHP Incorporated Amended and Restated 401(k) Retirement
Plan, as amended.
4.2 Certificate of Incorporation of the Company, including all
amendments thereto, filed as Exhibit 3.1 to Form S-1 on
June 5,
1995 (Registration No. 33-93110) and incorporated herein by
reference.
4.3 By-Laws of the Company filed as Exhibit 3.2 to Form S-1
(Registration No. 33-93110) on June 5, 1995 and
incorporated
herein by reference.
5 Opinion of Wilmer, Cutler & Pickering.
23.1 Consent of Wilmer, Cutler & Pickering (contained in their
opinion filed as Exhibit 5).
23.2 Consent of Arthur Andersen LLP dated September 11, 1996.
24 Power of attorney (included on signature page).
-7-
</TABLE>
<PAGE> 1
Exhibit 4.1
NATIONAL CORPORATION FOR HOUSING PARTNERSHIPS
AMENDED AND RESTATED 401(k) RETIREMENT PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE CONTENTS PAGE
- ------- -------- ----
<S> <C> <C>
I Definitions 2
II Service 10
2.1 Service 10
2.2 Absence From Employment 10
2.3 Hour of Service 11
2.4 Break in Service 12
2.5 Determining Vesting Percentage 12
2.6 Year of Service 12
2.7 Excluded Years of Service 13
III Eligibility, Enrollment and Participation 13
3.1 Eligibility 13
3.2 Enrollment and Participation 14
3.3 Re-Employed Employee 14
3.4 Ineligibility of Leased Employees 14
IV Contributions 14
4.1 Salary Reduction Contributions 14
4.2 Salary Reduction Agreements 15
4.3 Excess Deferrals 15
4.4 Matching Contributions 17
4.5 Basic Discretionary Contributions 17
4.6 Integrated Discretionary Contributions 17
4.7 Deductibility of Contributions 18
4.8 Administrative Expenses 18
4.9 Crediting of Employer Contributions 18
4.10 Rollovers 18
4.11 Profit Sharing Plan 19
V Limitations on Allocations 19
5.1 Limitations on Allocations 19
5.2 Limitations on Allocations 21
(i)
<PAGE> 3
5.3 Limitations on Allocations 22
VI Top-Heavy Provisions 24
6.1 Top-Heavy Rules 24
6.2 Minimum Contributions 24
6.3 Reserved 25
6.4 Reserved 25
6.5 Determination of Top-Heaviness 25
6.6 Calculation of Top-Heavy Ratios 25
6.7 Cumulative Accounts 26
6.8 Other Definitions 26
6.9 Limit on Annual Additions 28
VII Nondiscrimination Tests 29
7.1 Definitions 29
7.2 Average Deferral Percentage Test 31
7.3 Contribution Percentage Test 32
7.4 Corrective Distributions 33
VIII Self Directed Account and Participant's Accounts 36
8.1 Self Directed Account 36
8.2 Description of Self Directed Account 36
8.3 Participant's Account 37
8.4 Accounting 37
8.5 Transfers Among the Investment Accounts 37
8.6 Value of Account 37
8.7 Cancellation of Account 38
IX Distribution of Benefits 38
9.1 Distributions in General 38
9.2 Payment of Benefits 38
9.3 Election of Benefits 39
9.4 Small Accounts 39
9.5 Qualified Joint and Survivor Annuity 39
9.6 Forms of Benefit 40
9.7 Limitations on Payments 40
9.8 Non-Transferable 41
9.9 Consent to Distribution 41
(ii)
<PAGE> 4
9.10 Eligible Rollover Distribution - Income Tax
Withholding 41
9.11 Eligible Rollover Distribution - Withholding
Exception 41
X Retirement Benefits 42
10.1 Normal Retirement 42
10.2 Early Retirement 42
10.3 Late Retirement 42
10.4 Disability Retirement 43
10.5 Distribution 43
XI Death Benefits 43
11.1 From Participants' Accounts 43
11.2 Beneficiary 44
(iii)
<PAGE> 5
XII Termination of Employment 44
12.1 Distribution 44
12.2 Forfeiture 45
XIII Withdrawals 45
13.1 Withdrawal for Serious Financial Hardship 45
13.2 Pre-Retirement Distribution 47
13.3 Notification 48
13.4 Non-Repayment 48
13.5 Spousal Consent 48
13.6 Allocation of Withdrawals 48
XIV Loans 48
14.1 General Loan Provisions 48
14.2 Terms of Loans 49
14.3 Source of Funds 49
14.4 Repayment 49
14.5 Withdrawal from Plan 50
XV Fiduciary Duties and Responsibilities 50
15.1 General Fiduciary Standard of Conduct 50
15.2 Service in Multiple Capacities 50
15.3 Limitations on Fiduciary Liability 50
15.4 Investment Manager 51
XVI The Plan Administrator 51
16.1 Designation and Acceptance 51
16.2 Duties and Responsibility 51
16.3 Expenses and Compensation 52
16.4 Information from Employer 52
16.5 Appointment of Investment Manager 52
16.6 Delegation of Duties 52
XVII Participants' Rights 52
17.1 General Rights of Participants
(iv)
<PAGE> 6
and Beneficiaries 52
17.2 Filing a Claim for Benefits 52
17.3 Denial of Claim 53
17.4 Remedies Available to Participants 53
17.5 Limitation of Rights 54
17.6 Mergers of Transfers 54
XVIII The Investment Manager 54
18.1 Duties and Responsibilities 54
18.2 Relation to Employer, Plan Administrator and
Participants 54
XIX Amendment or Termination of the Plan 54
19.1 Amendment of Plan 54
19.2 Conditions of Amendment 55
19.3 Termination of the Plan 55
19.4 Full Vesting 56
19.5 Application of Forfeitures 56
19.6 Approval by the Internal Revenue Service 56
19.7 Subsequent Unfavorable Determination 56
XX Miscellaneous 57
20.1 Non-Reversion 57
20.2 Gender and Number 57
20.3 Reference to the Code and ERISA 57
20.4 Governing Law 57
20.5 Compliance with the Code and ERISA 57
20.6 Non-Alienation 57
20.7 Contribution Recapture 58
20.8 IRS Determination 58
</TABLE>
(v)
<PAGE> 7
NATIONAL CORPORATION FOR HOUSING PARTNERSHIPS
AMENDED AND RESTATED 401(k) RETIREMENT PLAN
The National Corporation for Housing Partnerships (hereinafter, the
"Employer") pursuant to the action of its Board of Directors taken on the
day of , 199 , has Amended and Restated its 401(k) Retirement
Plan (the "Plan") effective January 1, 1995 except as is otherwise set forth
below.
WITNESSETH
WHEREAS, the Employer, on April 29, 1988, adopted the National
Corporation for Housing Partnerships 401(k) Retirement Plan effective January 1,
1988 (the "Original Plan"); and
WHEREAS, the Original Plan has been amended by that (i) certain First
Amendment to National Corporation for Housing Partnerships 401(k) Retirement
Plan adopted on March 17, 1989 but effective as of January 1, 1988 (the "First
Amendment"), (ii) certain Second Amendment to National Corporation for Housing
Partnerships 401(k)
<PAGE> 8
Retirement Plan adopted on November 30, 1989 but effective as of January 1, 1988
(the "Second Amendment"), (iii) certain Third Amendment to National Corporation
for Housing Partnerships 401(k) Retirement Plan adopted on November 30, 1989 but
effective as of January 1, 1989 (the "Third Amendment") and (iv) certain Fourth
Amendment to National Corporation for Housing Partnerships 401(k) Retirement
Plan adopted on February 26, 1993 but generally effective as of January 1, 1993
(the "Fourth Amendment") (The Original Plan and the First Amendment, the Second
Amendment, the Third Amendment and the Fourth Amendment are sometimes
hereinafter referred to as the "Off-Site Plan"); and
WHEREAS, the Employer, on November 29, 1989, adopted the National
Corporation for Housing Partnerships Site Employees 401(k) Retirement Plan
effective January 1, 1990 (the "Original Site Plan"); and
WHEREAS, the Original Site Plan has been amended by that (i) certain
First Amendment to National Corporation for Housing Partnerships Site Employee
401(k) Retirement Plan adopted on December 31, 1992 but effective as of June 1,
1992 (the "First Amendment") and (ii) certain Second Amendment to National
Corporation for Housing Partnerships Site Employees 401(k) Retirement Plan
adopted on February 26, 1993 but generally effective as of January 1, 1993 (the
"Second Amendment") (The Original Site Plan and the First Amendment and the
Second Amendment are sometimes hereinafter referred to as the "Site Plan"); and
WHEREAS, the Employer has determined that it is in the best interests
of the Employer and its Employees that the Site Plan be merged into the Off-Site
Plan and that the Off-Site Plan be amended and restated to reflect such merge
and to modify the Off-Site Plan to comply with the changes required by the
Omnibus Budget Reconciliation Act of 1993.
NOW, THEREFORE, the Off-Site Plan shall be and hereby is amended and
restated as follows:
ARTICLE I
DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value on any
applicable date of the Participant's Account.
1.2 ACTIVE PARTICIPANT. The term Active Participant means any Participant
who performs duties as an Employee for the Employer and has satisfied the
requirements for eligibility under Article III.
1.3 ANNUITY STARTING DATE. The term Annuity Starting Date means, for
benefits payable as an annuity, the first day of the first period for which an
amount is payable as an annuity and, for benefits not payable as an annuity, the
first day on which all events have occurred which entitle the Participant to
such benefit.
1.4 PLAN ADMINISTRATOR. The term Plan Administrator means the Person or
Persons designated to administer the Plan by the Board of Directors of the
National Corporation for Housing Partnerships and any successor(s) thereto.
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<PAGE> 9
1.5 BENEFICIARY. The term Beneficiary means the beneficiary or
beneficiaries entitled to any benefits under a Participant's Account hereunder
upon the death of a Participant or a Beneficiary.
1.6 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.7 CALENDAR YEAR. The term Calendar Year means the taxable year of the
Participant.
1.8 CODE. The term Code means the Internal Revenue Code of 1986, as it
may be amended or restated from time to time.
1.9 COMPENSATION. The term Compensation means the Participant's total
compensation for services performed for the Employer and currently includible in
income in respect of Hours of Service completed during the part of the Plan Year
in which the Participant participated under the Plan. Notwithstanding the
preceding sentence, Compensation shall include Salary Reduction Contributions
(as defined by Section 4.1) and, effective October 1, 1994, salary reduction
accruals ("Salary Reduction Accruals") pursuant to the National Corporation for
Housing Partnerships Executive Savings Plan effective October 1, 1994. A
Participant's compensation shall not include the value of or income attributable
to any fringe benefits provided by the Employer, employer contributions made to
any plan or fund or to Social Security on behalf of the Participant or on
account of hours worked by the Participant, or amounts of deferred compensation
(other than Salary Reduction Contributions and, effective October 1, 1994,
Salary Reduction Accruals) whether credited to the Participant in a qualified
retirement plan or otherwise. The Compensation of any Participant taken into
account under the Plan shall not exceed $200,000 (or such other amount as the
Secretary of the Treasury may designate pursuant to Section 401(a)(17) of the
Code). The term Compensation shall include salary reduction contributions under
any cafeteria plan maintained by the Employer under Section 125 of the Code, but
shall in no event include any amounts in excess of $200,000 (as adjusted for
increases in the cost of living pursuant to section 401(a)(17) of the
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<PAGE> 10
Code). Notwithstanding the foregoing, for Plan Years beginning on or after
January 1, 1994, the annual Compensation of each Participant taken into account
under the Plan shall not exceed the OBRA 1993 Annual Compensation Limit.
1.10 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period specified by the Employer for which Salary Reduction Contributions and
Matching Contributions shall be made. No change in the Contribution Period may
be made except as of a Renewal Date.
1.11 CURRENT ACCRUED BENEFIT. The term Current Accrued Benefit shall mean
a Participant's accrued benefit under any defined benefit plan of the Employer,
determined as if the Participant had separated from Service as of December 31,
1986, when expressed as an annual benefit within the meaning of Section
415(b)(2) of the Code. In determining the amount of a Participant's Current
Accrued Benefit, the following shall be disregarded:
(a) Any change in the terms and conditions of the defined
benefit plan or plans after May 5, 1986; and
(b) Any cost of living adjustment occurring after May 5, 1986.
1.12 DISABILITY. The term Disability means that the Plan Administrator has
determined, based upon medical reports from a medical examiner satisfactory to
the Plan Administrator or such other evidence as he deems appropriate, that a
Participant is mentally or physically disabled permanently from further
-4-
<PAGE> 11
satisfactory performance of his usual duties for the Employer or the duties of
such other position or job which the Employer makes available to him and for
which such Employee is qualified by reason of his training, education, or
experience; provided, however, that a Participant who is or becomes able to
perform alternative job duties with no reduction in Compensation, and who is
offered the opportunity to perform such alternative job duties by the Employer
and refuses, shall not be considered permanently disabled. All Participants in
similar circumstances shall be treated alike.
1.13 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined that a
Participant's incapacity is a Disability.
1.14 RESERVED.
1.15 EARLY RETIREMENT DATE. The term Early Retirement Date means the first
day of the month coinciding with or next following the date a Participant is
separated from Service with the Employer on or after the later of (a) the date
he attains age 55 and (b) the date on which he completes five (5) Years of
Service, provided that on such date the Participant has not attained his Normal
Retirement Age.
1.16 EFFECTIVE DATE. The term Effective Date means January 1, 1988.
1.16A ELIGIBLE RETIREMENT PLAN. The term Eligible Retirement Plan
means (i) an individual retirement account described in Section 408(a) of the
Code, (ii) an individual retirement annuity described in Section 408(b) of the
Code (other than an endowment account), (iii) an employees' trust described in
Section 401(a) of the Code which is exempt from tax under Section 501(a) of the
Code (but only if the employees' trust is a defined contribution plan the terms
of which permit the
-5-
<PAGE> 12
acceptance of rollover distributions) and (iv) an annuity plan described in
Section 403(a) of the Code.
1.16B ELIGIBLE ROLLOVER DISTRIBUTION. The term Eligible Rollover
Distribution means any distribution to a Participant of all or any portion of
the balance the Participant's Account exclusive of (a) any distribution which is
one of a series of substantially equal periodic payments (not less frequently
than annually) made either (i) for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of the Participant
and the Participant's Beneficiary or (ii) for a specified period of ten (10)
years or more and (b) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code.
1.17 EMPLOYEE. The term Employee means any individual in the employ of the
Employer and, to the extent required under Section 414(n) and 414(q) of the
Code, shall include "leased employees" within the meaning of Section 414(n)(2)
of the Code. Notwithstanding the foregoing, if such leased employees constitute
less than twenty percent (20%) of the Employer's nonhighly compensated work
force within the meaning of Section 414(n)(5)(C)(ii) of the Code, the term
Employee shall not include those leased employees covered by a plan described in
Section 414(n)(5) of the code unless otherwise provided by the terms of the
Plan. Additionally, the term Employee shall not include any person included in
a unit of employees covered under a collective bargaining agreement between
employee representatives and the Employer unless such collective bargaining
agreement expressly provides for the inclusion of such persons as Participants
in the Plan.
For Plan Years ending prior to January 1, 1995, no Employee who was
eligible to participate in the National Corporation for Housing Partnerships
Site Employees 401(k) Retirement Plan was eligible to participate in this Plan.
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<PAGE> 13
1.18 EMPLOYER. The term Employer means National Corporation for Housing
Partnerships and any successor organization thereto which elects to continue the
Plan.
1.19 EMPLOYER CONTRIBUTIONS. The term Employer Contributions means (a)
Salary Reduction Contributions described in Section 4.1, Matching Contributions
described in Section 4.4, and (c) Integrated Discretionary Contributions
described in Section 4.6.
1.20 ENTRY DATE. The term Entry Date means, with respect to any
Participant, either the Effective Date or the first January 1, April 1, July 1,
or October 1 thereafter when an Employee who has fulfilled the eligibility
requirements commences participation in the Plan. With respect to any
Participant who, on the date of the closing of the Employer's acquisition of the
property management services of Oxford Development Corp., was an "Eligible
Employee", as that term is defined by Section TWO F. of the Oxford Y.E.S. 401(k)
Plan, the term Entry Date means the quarterly entry date coinciding with or next
following such closing.
1.21 ERISA. The term ERISA means the Employee Retirement Income Security
Act of 1974 (P.L. No. 93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto, as such Act and such regulations affect
this Plan.
1.22 EXCESS EARNINGS. The term Excess Earnings means that portion of a
Participant's Compensation, if any, that exceeds the Taxable Wage Base.
1.23 FIDUCIARY. The term Fiduciary means any or all of the following, as
applicable:
(a) Any Person who exercises any discretionary authority or control
respecting the management of the Plan or its assets;
(b) Any Person who renders investment advice for a fee or other
compensation, direct or indirect,
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<PAGE> 14
respecting any monies or other property of the Plan or has authority or
responsibility to do so;
(c) Any Person who has discretionary authority or responsibility in
the administration of the Plan; or
(d) Any Person who has been designated by a Named Fiduciary pursuant
to authority granted by the Plan, who acts to carry out a fiduciary
responsibility, subject to any exceptions granted directly or indirectly by
ERISA.
1.24 FIXED ANNUITY. The term Fixed Annuity means an annuity providing a
series of payments that are payable in specified dollar amounts.
1.25 FORFEITURE. The term Forfeiture means the amount, if any, by which
the value of a Participant's Account exceeds his Vested Interest upon such
Participant's Termination of Employment.
Any Forfeitures shall be used to reduce, and in lieu of, the Employer
Contributions, other than Salary Reduction Contributions, next due at the
earliest opportunity after such Forfeiture becomes available.
1.26 RESERVED.
1.27 INACTIVE PARTICIPANT. The term Inactive Participant means any
Participant who does not currently meet the requirements to be an Active
Participant.
1.28 INVESTMENT MANAGER. The term Investment Manager means Fidelity
Investments Retirement Services Company or any entity qualified under the
Investment Advisers Act of 1940.
1.29 LATE RETIREMENT DATE. The term Late Retirement Date means the first
day of the month coinciding with or next following the date a Participant is
separated from
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<PAGE> 15
Service with the Employer after his Normal Retirement Age, for any reason other
than death.
1.30 NAMED FIDUCIARY. The Plan Administrator shall be the Named Fiduciary
of the Plan. The Named Fiduciary may allocate his fiduciary responsibilities in
any manner that to him shall appear appropriate, and he may delegate any of his
functions to any other Person or Persons. Subject to approval of the Board of
Directors of the Employer, the Named Fiduciary may employ Advisors and
Investment Managers.
1.31 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the date
the Participant attains age 65.
1.32 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the
first day of the month coinciding with or next following the date a Participant
attains his Normal Retirement Age.
1.32A OBRA 1993 ANNUAL COMPENSATION LIMIT. Effective for Plan Years
beginning on or after January 1, 1994, the term OBRA 1993 Annual Compensation
Limit means $150,000 (as adjusted for increases in the cost of living pursuant
to section 401(a)(17) of the Code).
1.33 PARTICIPANT. The term Participant means any Employee of the Employer
who is or becomes eligible to participate under this Plan in accordance with its
provisions and shall include an Active Participant and an Inactive Participant.
Effective January 1, 1995, any Employee of the Employer who was a Participant in
the National Corporation for Housing Partnerships Site Employees 401(k)
Retirement Plan shall be a Participant in this Plan.
1.34 PARTICIPANT'S ACCOUNT. The term Participant's Account means each
Participant's individual account maintained by the Investment Manager in
accordance with the terms of this Plan. Each Participant's Account will be
maintained so as to reflect separately the amounts attributable to Salary
Reduction Contributions,
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Matching Contributions, Integrated Discretionary Contributions, and Rollover
Contributions and the earnings thereon. Effective January 1, 1995, the
Participant's Account for each Employee of the Employer who was a Participant in
the National Corporation for Housing Partnerships Site Employees 401(k)
Retirement Plan shall be maintained as a Participant's Account under this Plan.
1.35 PERSON. The term Person means any natural person, partnership,
corporation, trust, or estate.
1.36 PLAN. The term Plan means the National Corporation for Housing
Partnerships 401(k) Retirement Plan, the terms of which are set forth herein, as
it may be amended from time to time.
1.37 PLAN YEAR. The term Plan Year means the twelve-month period
commencing on January 1 and ending the following December 31.
1.38 QUALIFIED JOINT AND SURVIVOR ANNUITY. The term Qualified Joint and
Survivor Annuity means a monthly Fixed Annuity payable for the life of the
Participant with a survivor annuity for the life of the Participant's spouse.
The monthly annuity payment to the spouse shall be equal to fifty percent (50%)
of the amount which was payable to the Participant. Such annuity shall be the
Actuarial Equivalent of the value of the Participant's Account which is
distributable to the Participant pursuant to Articles X and XI. "Actuarial
Equivalent" means a benefit having the same present value as the benefit it
replaces.
1.39 RENEWAL DATE. The term Renewal Date means each January 1, April 1,
July 1 and October 1 as of which certain determinations,transactions, and
calculations shall be made, as more fully indicated in the body of the Plan.
1.40 ROLLOVER CONTRIBUTIONS. The term Rollover Contributions shall mean
amounts rolled over to the Plan pursuant to Section 4.10.
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<PAGE> 17
1.41 SALARY REDUCTION AGREEMENT. The term Salary Reduction Agreement means
an agreement between a Participant and the Employer to reduce the Participant's
Compensation for the purpose of making Contributions to the Plan.
1.42 SELF DIRECTED ACCOUNT. The term Self Directed Account means the
account(s) established for a Participant by the Investment Manager for purposes
of permitting a Participant to direct the investment of his or her Participant's
Account.
1.43 SPOUSAL CONSENT. The term Spousal Consent means that (a)(i) a
Participant's spouse consents in writing to the Participant's election of a form
of benefit or designation of a beneficiary, (ii) the spouse's consent
acknowledges the effect of the election or designation, and (iii) the spouse's
consent is witnessed by the Plan Administrator or a notary public, or (b) it is
established to the satisfaction of the Plan Administrator that the spouse's
consent cannot be obtained because (i) there is no spouse, (ii) the spouse
cannot be located, or (iii) other circumstances described in the regulations
under Section 417 of the Code are present. The consent is not revocable;
however, in the event that the Participant, after obtaining Spousal Consent,
changes the election of a form of benefit to any form other than the Qualified
Joint and Survivor Annuity or the designation of Beneficiary to anyone other
than the Participant's spouse, the consent shall be invalid until new consent is
obtained unless the initial consent expressly permitted designations or
elections by the Participant without any requirement of further consent. In the
event a Participant remarries, consent of the new spouse must be obtained in
accordance with the requirements of this Section.
1.44 TAXABLE WAGE BASE. The term Taxable Wage Base means the maximum
amount of compensation which may be considered wages under Section 3121(a)(1) of
the Code
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for the calendar year during which such Plan Year begins.
1.45 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Early Retirement,
Disability, or death.
1.46 VARIABLE ANNUITY. The term Variable Annuity means an annuity
providing a series of payments that increase or decrease to reflect changes in
investment performance of the underlying portfolio.
1.47 VESTED INTEREST. The term Vested Interest on any date means the
nonforfeitable right to an immediate or deferred benefit in the amount which is
equal to the sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the Participant's
Account that is attributable to and derived from Salary Reduction Contributions,
if any;
(b) The value on that date of that portion of the Participant's
Account that is attributable to and derived from Matching Contributions;
(c) The value on that date of the portion of the Participant's
Account that is attributable to and derived from Integrated Discretionary
Contributions multiplied by his Vesting Percentage determined on the applicable
date.
1.48 VESTING PERCENTAGE. The term Vesting Percentage means the
Participant's nonforfeitable percentage interest in Integrated Discretionary
Contributions credited to his account plus the earnings thereon, computed as of
the occurrence of some event in accordance with the following schedule based on
Years of Service with the Employer:
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<PAGE> 19
<TABLE>
<CAPTION>
COMPLETED YEARS OF SERVICE VESTING PERCENTAGE
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or More 100%
</TABLE>
Effective January 1, 1995, the Years of Service for each Employee of
the Employer who was a Participant in the National Corporation for Housing
Partnerships Site Employees 401(k) Retirement Plan shall include all such Years
of Service credited to each such Employee under the National Corporation for
Housing Partnerships Site Employees 401(k) Retirement Plan.
ARTICLE II
SERVICE
2.1 SERVICE. The term Service means active employment with the Employer as an
Employee.
2.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave of
absence authorized by the Employer pursuant to the Employer's established leave
policy will be counted as employment with the Employer, provided that such leave
of absence is of not more than six months' duration. Absence from employment on
account of active duty with the Armed Forces of the United States, temporary
lay-off, Employer-approved vacation, sick leave, jury duty, or a labor
management dispute will be counted as employment with the Employer. If the
Employee does not return to active employment with the Employer, his Service
will be deemed to have ceased on the date the Plan Administrator receives
notice that such Employee will not return to the active Service of the Employer.
The Employer's leave policy shall be applied in a uniform and nondiscriminatory
manner to all Participants under similar circumstances.
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<PAGE> 20
2.3 HOUR OF SERVICE. The term Hour of Service means a period of Service during
which an Employee shall be credited with one Hour of Service as described in
(a), (b), (c), (d), and (e) below:
(a) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for the performance of duties. These
hours shall be credited to the Employee for the computation period or periods in
which the duties are performed.
(b) Each hour for which an Employee is directly or indirectly paid,
or entitled to payment, by the Employer for reasons (such as vacation, sickness
or disability) other than for the performance of duties. Hours under this
subsection shall be calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which are incorporated herein by this
reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer. These hours
shall be credited to the Employee for the computation period or periods to which
the award or agreement pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Each hour for which an Employee is on an authorized unpaid leave
which is counted as employment with the Employer pursuant to Section 2.2. These
hours shall be credited to the Employee for the computation period or periods in
which such authorized leave takes place. However, no more than 501 hours shall
be credited under this subsection (d).
(e) If an Employee is absent from work without pay for any period
because of the Employee's pregnancy, the birth of the Employee's child, the
placement
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<PAGE> 21
of a child with the Employee in connection with the adoption of the child or the
provision of care for a child for a period immediately following such birth or
placement, the Employee shall be credited with an Hour of Service for each hour
the Employee would have worked but for such absence (or, if normal work hours
are unknown, 8 Hours of Service for each normal workday during such absence);
provided, however, that no Employee shall be credited with more than 501 Hours
of Service for a period or periods of absence in connection with any such birth
and related pregnancy or adoption. Hours of Service credited pursuant to this
subsection shall be credited (i) to the computation period in which the absence
from work begins to the extent necessary to prevent the Employee from incurring
a Break in Service in such period and (ii) thereafter to the immediately
following computation period. No credit will be given pursuant to this
subsection unless the Employee furnishes the Plan Administrator such timely
information as the Plan Administrator may reasonably require to establish that
the absence from work is for reasons referred to in this subsection and the
number of days for which there was such an absence. If the Employee's absence
from work is authorized by the Employer, the provisions of this subsection (e)
shall not become effective until the Employee has been credited with the maximum
Hours of Service allowable under subsection (d).
2.4 BREAK IN SERVICE. Except as provided in Section 2.6(a), the term Break in
Service means any Plan Year during which an Employee fails to complete more than
500 Hours of Service.
2.5 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each
Year of Service except those periods specified in Section 2.7.
If an individual who ceases to be an Employee and is subsequently rehired
as an Employee enrolls (or re-enrolls)
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in the Plan, upon his participation (or re-participation) his Vesting Percentage
shall then take into account all Years of Service except those specified in
Section 2.7.
2.6 YEAR OF SERVICE. The term Year of Service means a 12 consecutive month
period during which an Employee has completed at least 1,000 Hours of Service.
(a) Eligibility Computation Period. In determining Years of Service
and Breaks in Service for purposes of eligibility, the 12 consecutive month
period shall begin with the date on which an Employee's employment commenced
and, where additional periods are necessary, succeeding anniversaries of his
employment commencement date. The employment commencement date is the date on
which the Employee first performs an Hour of Service for the Employer
maintaining the Plan.
(b) Vesting Computation Period. In computing Years of Service and
Breaks in Service for purposes of Vesting, the 12 consecutive month period shall
be the Plan Year. Active participation as of the last day of the Plan Year is
not required in order for a Participant to be credited with a Year of Service
for vesting purposes.
2.7 EXCLUDED YEARS OF SERVICE. In determining the vesting Percentage of an
Employee, all Years of Service with the Employer shall be taken into account
except Years of Service prior to a Break in Service if:
(a) the Participant had no Vested Interest at the time the Break in
Service occurred, and
(b) the number of consecutive Breaks in Service equals or exceeds the
greater of (i) five or (ii) the Years of Service before the break occurred.
Notwithstanding any contrary direction in this Section, Years of Service
prior to a Break in Service will not count for purposes of determining Vesting
Percentage until the
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<PAGE> 23
Participant has completed one Year of Service following the Break in Service.
ARTICLE III
ELIGIBILITY, ENROLLMENT AND PARTICIPATION
3.1 ELIGIBILITY. All Employees who, as of April 1, 1988, have attained age 18
and have not terminated their employment with the Employer shall be eligible to
become Participants as of the Effective Date. Each other Employee shall be
eligible to become a Participant on the Entry Date coinciding with or next
following the later of the date on which he attains age 18 or completes one Year
of Service provided he has not terminated his employment with the Employer as of
such date. All On-Site employees with a hire date prior to January 1, 1990
became employees of the Employer as of January 1, 1990. Any Employee who, on
the date of the closing of the Employer's acquisition of the property management
services of Oxford Development Corp., was an "Eligible Employee", as that term
is defined by Section TWO F. of the Oxford Y.E.S. 401(k) Plan, shall become
eligible to become a Participant as of the quarterly entry date coinciding with
or next following such closing.
3.2 ENROLLMENT AND PARTICIPATION. Each eligible Employee may enroll as of his
Entry Date by completing and delivering to the Plan Administrator a Salary
Reduction Agreement. He will then become a Participant as of his Entry Date.
3.3 RE-EMPLOYED EMPLOYEE. In the case of an individual who ceases to be an
Employee and is subsequently rehired as an Employee, the following provisions
shall apply in determining his eligibility to participate again in the Plan:
(a) If the Employee satisfied the eligibility requirements specified
in Section 3.1 prior to his separation from employment, he shall become an
Active Participant in the Plan in accordance with Section 3.2 as of the date he
is re-employed.
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<PAGE> 24
(b) If the Employee did not satisfy the eligibility requirements
specified in Section 3.1 prior to his separation from employment, he shall be
eligible to participate in the Plan on the first Entry Date following his
fulfillment of such eligibility requirements.
For purposes of this Section, all Years of Service with the Employer,
including any Years of Service prior to any Breaks in Service and including any
Years of Service credited under the National Corporation for Housing
Partnerships Site Employees 401(k) Retirement Plan for service after December
31, 1989, shall be taken into account in determining eligibility except those
specified in Section 2.7 as excluded Years of Service.
3.4 INELIGIBILITY OF LEASED EMPLOYEES. Notwithstanding any other provisions of
the Plan, no "leased employees" within the meaning of Section 414(n)(2) of the
Code shall be eligible to become Participants.
ARTICLE IV
CONTRIBUTIONS
4.1 SALARY REDUCTION CONTRIBUTIONS. Each Active Participant may elect to enter
into a written Salary Reduction Agreement with the Employer for an amount equal
to not less than one percent (1%) nor more than fifteen percent (15%) of his
Compensation for the Contribution Period. In consideration of such agreement,
the Employer will make a contribution for each Contribution Period equal to the
total amount which the Participant's Compensation was reduced during the
Contribution Period pursuant to the Salary Reduction Agreement then in effect.
Salary Reduction Contributions shall be deducted by the Employer from the Active
Participant's earnings and shall be paid by the Employer to the Investment
Manager not less frequently than monthly, but in no event later than 30 days
following the end of the Plan Year.
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<PAGE> 25
4.2 SALARY REDUCTION AGREEMENTS. Salary Reduction Agreements shall be governed
by the following provisions:
(a) Each Active Participant may designate an allowable percentage of
his Compensation for the Contribution Period as a Salary Reduction Contribution
rate. Thirty days before each Renewal Date, each Active Participant may
redesignate a new allowable percentage of his Compensation for the Contribution
Period as a Salary Reduction Contribution. Such redesignation shall be made as
if it were an original designation in accordance with this Section and shall be
effective as of such Renewal Date.
(b) A Salary Reduction Agreement may be completely suspended by a
Participant by filing written notice with the Plan Administrator at any time.
The Salary Reduction Agreement shall be suspended within 31 days after receipt
of the notice. Salary Reduction Contributions shall be resumed on the Renewal
Date next following the Participant's filing of a request to reinstate a
suspended Salary Reduction Agreement.
(c) The Employer may change or suspend the amount by which the
Participant's Compensation is reduced pursuant to a Salary Reduction Agreement
at any time if the Employer determines that such decrease or suspension is
necessary to ensure that the Average Deferral Percentage Test of Section 7.2 of
the Plan is satisfied or that amounts allocated to a Participant's Account do
not exceed the amounts permitted under Article V. Any suspensions to ensure
satisfaction of Section 7.2 shall apply to all Highly Compensated Employees, as
defined in Section 7.1, in a nondiscriminatory manner.
(d) If the Employer changes or suspends its Salary Reduction
Agreements as described in subsection (c), the affected Participants shall
continue to participate in the Plan. When the situation which
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<PAGE> 26
resulted in the change or suspension of the Salary Reduction Agreements ceases
to exist, the Employer shall reinstate the Salary Reduction Agreements to the
fullest extent possible for all affected Participants in a nondiscriminatory
manner.
4.3 EXCESS DEFERRALS.
(a) No Active Participant shall be permitted to make Salary Reduction
Contributions in excess of $7,000 (as adjusted for all increases in the cost of
living pursuant to Section 402(g)(5) of the Code). In the event that Salary
Reduction Contributions would otherwise exceed $7,000 for any Participant, the
Plan Administrator shall direct the Investment Manager to distribute the portion
of the Salary Reduction Contributions in excess of $7,000 ("Excess Deferrals")
and any earnings thereon to the Participant no later than the first April 15
following the close of the Calendar Year in which the deferrals were made.
(b) If, during a Calendar Year, a Participant makes Salary Reduction
Contributions through more than one qualified cash or deferred arrangement
described in Section 401(k) of the Code or makes other "Elective Deferrals" (as
defined in Section 402(g)(3) of the Code) to plans or arrangements other than
the Plan and such Participant notifies the Plan Administrator in writing no
later than the first March 1 following that Calendar Year that all or a
specified portion of the Salary Reduction Contributions made on his behalf for
the Calendar Year should be paid to him (together with any earnings thereon)
because such Salary Reduction Contributions constitute Excess Deferrals,
distribution of such amounts to him shall occur no later than the first April 15
following that Calendar Year.
(c) Distribution of Excess Deferrals (and earnings thereon) pursuant to
this Section shall be made notwithstanding
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any provision of the Plan which would otherwise limit or delay distributions or
require Spousal Consent and shall occur before distribution of Excess
Contributions pursuant to Section 7.4(a) or Excess Aggregate Contributions
pursuant to Section 7.4(b).
(d) The earnings allocable to Excess Deferrals shall be the sum of the
following amounts: (i) the amount determined by multiplying net income or net
loss for the Plan Year in which an Excess Deferral occurs that is allocable to
the Participant's Salary Reduction Contributions by a fraction, the numerator of
which is the Excess Deferral on behalf of the Participant for such Plan Year and
the denominator of which is the portion of the Participant's Account
attributable to Salary Reduction Contributions as of the last day of such Plan
Year, and (ii) an amount determined by multiplying 10 percent (10%) times the
number of months that have elapsed, as of the date of the distribution, since
the end of such Plan year times the amount determined under paragraph (i) above.
For purposes of this subsection, a distribution on or before the fifteenth day
of the month shall be treated as occurring on the last day of the preceding
month, and a distribution after the fifteenth day shall be treated as occurring
on the first day of the following month.
4.4 MATCHING CONTRIBUTIONS. The Employer may, in its discretion, make, for
each Plan Year, a Matching Contribution on behalf of each Participant in an
amount of up to $.50 for each $1.00 of such Participant's Salary Reduction
Contributions for such Plan Year; provided, however, that the Employer shall not
make any such Matching Contribution with respect to any Salary Reduction
Contribution amount in excess of six percent (6%) of a Participant's
Compensation.
4.5 RESERVED.
4.6 INTEGRATED DISCRETIONARY CONTRIBUTIONS.
(a) The Employer may, at its discretion, make an Integrated
Discretionary Contribution to the Plan
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for each Plan Year. The Integrated Discretionary Contribution shall be
allocated among the accounts of Participants as set forth in this Section.
(b) Initial Allocation. The Integrated Discretionary Contribution
shall first be allocated to Participants with Excess Earnings, in the ratio
that each such Participant's Excess Earnings bears to the Excess Earnings of all
Participants. The percentage of Excess Earnings allocated to any Participant's
Account in this Initial Allocation shall not exceed the LESSER of:
(i) 5.7% or
(ii) the percentage of total Compensation which would be
allocated to Participants under paragraph (c) of this Section from the remaining
amount of Integrated Discretionary Contributions.
(c) Final Allocation. The portion of the Integrated Discretionary
Contribution remaining after the Initial Allocation shall be allocated among all
Participants in the same ratio that each Participant's Compensation bears to the
total Compensation of all Participants.
(d) Minimum Allocation for 1989 Plan Year. Notwithstanding the
foregoing, the amount allocated to any Participant under this Section shall not
be less than 5% of the first $10,000 of such Participant's Compensation, to the
extent that the contribution made pursuant to paragraph (a) is sufficient to
provide such allocation.
(e) All references in the Plan to Integrated Discretionary
Contributions shall also include Basic Discretionary Contributions made with
respect to the 1988 Plan Year.
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4.7 DEDUCTIBILITY OF CONTRIBUTIONS. In no event shall Employer Contributions
made hereunder during a taxable year of the Employer exceed the annual
deductible limit for contributions to a qualified profit-sharing plan as set
forth in Section 404(a)(3) of the Code, as limited by Section 404(j) of the
Code.
4.8 ADMINISTRATIVE EXPENSES. Unless it elects otherwise in accordance with the
terms of the agreement with the Investment Manager, the Employer will contribute
to the Plan the amount necessary to pay the expense charges and administrative
charges described in the agreement with the Investment Manager.
4.9 CREDITING OF EMPLOYER CONTRIBUTIONS. The Salary Reduction Contributions,
Matching Contributions and Integrated Discretionary Contributions shall be
credited to the Participant's Account of each Participant for whom such
Contributions are made, in accordance with the provisions of Article VIII.
4.10 ROLLOVERS. With the written permission of the Plan Administrator and
without regard to the limitations imposed under Article V, the Plan may receive
on behalf of an Employee of the Employer all or part of the entire amount of any
lump sum distribution theretofore received by such Participant from a plan
qualifying under Section 401(a) of the Code, either directly from such plan or
directly from the Employee within 60 days after receipt by such Employee, or
through the medium of a qualified individual retirement plan, provided that the
amounts to be rolled over are attributable solely to employer contributions and
earnings thereon and to earnings on employee contributions. The Plan,
notwithstanding the provisions of Article V, may receive the assets of any
predecessor Plan. Amounts received pursuant to this Section shall be separately
accounted for and may be invested in any manner authorized under the provisions
of this Plan.
4.11 PROFIT SHARING PLAN. The Employer shall make Salary Reduction
Contributions and may make other Employer Contributions to the Plan without
regard to the Employer's
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current or accumulated net profits. Notwithstanding the preceding sentence, the
Plan shall continue to be designed to qualify as a discretionary profit-sharing
plan for purposes of Sections 401(a), 402, 412, and 417 of the Code.
ARTICLE V
LIMITATIONS ON ALLOCATIONS
5.1 LIMITATIONS ON ALLOCATIONS. Definitions - The following definitions are
atypical terms which refer only to terms used in the Limitation on Allocations
Sections of this Article V.
(a) Affiliate -- The term Affiliate shall be defined as in Section
6.8(a).
(b) Annual Additions -- The term Annual Additions shall mean the sum
of the following amounts allocated on behalf of a Participant for a Limitation
Year:
(i) all Employer Contributions,
(ii) all Forfeitures, and
(iii) all Employee Contributions.
For purposes of this Article, Excess Amounts reapplied to reduce
Employer Contributions under Section 5.2(d) and Excess Contributions and Excess
Aggregate Contributions shall also be included as Annual Additions.
(c) Compensation -- The term Compensation shall mean a Participant's
earned income, wages, salaries, and fees for professional services and other
amounts received for personal services actually rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salesmen, compensation for services on the basis
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of a percentage of profits, commissions on insurance premiums, tips, and
bonuses), and excluding the following:
(i) Employer contributions (exclusive of Salary Reduction
Contributions and, effective October 1, 1994, Salary Reduction Accruals) to a
plan of deferred compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or Employer contributions
under a simplified employee pension plan to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation; and
(ii) Other amounts which received special tax benefits.
For purposes of applying the Limitations of this Article,
Compensation for a Limitation Year is the Compensation actually paid or
includible in gross income during such year.
(d) Employee Contributions -- The term Employee Contributions shall
mean a Participant's after-tax contributions, if any.
(e) Excess Amount -- The term Excess Amount shall mean the excess of
the Participant's Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(f) Limitation Year -- The term Limitation Year shall mean the Plan
Year.
(g) Maximum Permissible Amount -- The term maximum Permissible Amount
shall mean the lesser of (1) $30,000 (or, if greater, 1/4 of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code) or (2) 25 percent
(25%) of the Participant's Compensation for the Limitation Year. If a short
Limitation Year is created because of an amendment changing the Limitation
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Year to a different 12-consecutive-month period, the maximum Permissible Amount
for the short Limitation Year will be the lesser of (1) $30,000 (or, if greater,
1/4 of the dollar limitation in effect under Section 415(b)(1)(A) of the Code)
multiplied by a fraction the numerator of which is the number of months in the
short Limitation Year and the denominator of which is 12 or (2) 25% of the
Participant's Compensation for the short Limitation Year.
5.2 LIMITATIONS ON ALLOCATIONS. Employers who do not maintain any qualified
Plan in addition to this Plan.
(a) if an Employer does not maintain any other qualified Plan, the amount
of Annual Additions which may be allocated under this Plan on a Participant's
behalf for a Limitation Year shall not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan.
(b) Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on the
basis of the Participant's estimated annual Compensation. Such Compensation
shall be determined on a reasonable basis and shall be uniformly determined for
all Participants similarly situated. Any Employer Contributions based on
estimated annual Compensation shall be reduced by any Excess Amounts carried
over from prior years.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the maximum Permissible Amount for such Limitation Year shall
be determined on the basis of the Participant's actual Compensation for such
Limitation Year. In the event a Participant separates from the Service of the
Employer prior to the end of the Limitation Year, the Maximum Permissible Amount
for such Participant shall be determined prior to any distribution of his
Account on the basis of his actual
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Compensation. Any Excess Amounts shall be disposed of in accordance with
Section 5.2(d).
(d) If, pursuant to Section 5.2(c), there is an Excess Amount with respect
to a Participant for a Limitation Year, such Excess Amount shall be disposed of
as follows:
(i) First, any Employee Contributions shall be returned to the
Participant, to the extent that the return would reduce the Excess Amount.
(ii) Second, any then remaining Excess Amount attributable to Employer
Contributions, other than Salary Reduction Contributions, shall be reapplied to
reduce Employer Contributions, other than Salary Reduction Contributions, for
the Participant under this Plan for the next Limitation Year (and for succeeding
Limitation Years, as necessary). In each such succeeding Limitation Year the
sum of actual Employer Contributions (other than Salary Reduction
Contributions), plus the reapplied amount resulting from Excess Amounts, if any,
shall equal the amount of such Employer Contributions that would otherwise be
allocated to each Participant's Account.
(iii) Third, any then remaining Excess Amount attributable to
Salary Reduction Contributions shall be recharacterized as Employee
Contributions and returned to the Participant.
(iv) Fourth, any Excess Amounts then still remaining shall be
allocated to accounts of other Participants in the same manner as the
Contributions to which such excess is attributable were allocated.
5.3 LIMITATIONS ON ALLOCATIONS. Participants participating in both a Defined
Benefit plan and a Defined Contribution plan:
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(a) if an individual is a Participant at any time in both a defined
benefit plan and a defined contribution plan maintained by the Employer, the sum
of the defined benefit plan fraction and the defined contribution plan fraction
for any year may not exceed 1.0.
(b) The defined benefit plan fraction for any year is a fraction, the
numerator of which is the Participant's projected annual benefit under the
defined benefit plan (determined as of the close of the Limitation Year), and
the denominator of which is the lesser of (i) or (ii) below:
(i) 1.25 times the dollar limitation in effect under Section
415(b)(1)(A) of the Code on the last day of the Limitation Year; or
(ii) 1.4 times the amount which may be taken into account under
Section 415(b)(1)(B) of the Code with respect to such Participant for the
Limitation Year.
Notwithstanding the foregoing provisions of Subsection (b), if
the Participant was a participant in one or more defined benefit plans
maintained by the Employer which were in existence on July 1, 1982, the
denominator of this fraction will not be less than 125 percent (125%) of the sum
of the annual benefits under such plans which the Participant had accrued as of
the later of the end of the last Limitation Year beginning before January 1,
1983 or June 30, 1983. Moreover, if the Participant was a participant in one or
more defined benefits 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 (125%) of the Current Accrued Benefit. The preceding two sentences
apply only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section
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415 of the Code as in effect for all Limitation Years.
(c) A Participant's projected annual benefit is equal to the annual
benefit to which the Participant would be entitled under the terms of the
defined benefit plan based upon the following assumptions:
(i) The Participant will continue employment until reaching
normal retirement age as determined under the terms of the plan (or current age,
if that is later).
(ii) The Participant's Compensation for the Limitation Year under
consideration will remain the same until the date the Participant attains the
age described in paragraph (i) of this subsection.
(iii) All other relevant factors used to determine benefits
under the plan for the Limitation Year under consideration will remain constant
for all future Limitation Years.
(d) The defined contribution plan fraction for any Limitation Year is
a fraction, the numerator of which is the sum of the Annual Additions. to the
Participant's Accounts in such Limitation Year and for all prior Limitation
Years, and the denominator of which is the lesser of (i) or (ii) below for such
Limitation Year and for all prior Limitation Years of such Participant's
Employment (assuming for this purpose, that Section 415(c) of the Code had been
in effect during such prior Limitation Years):
(i) 1.25 times the dollar limitation in effect under Section
415(c)(1)(A) of the Code on the last day of the Limitation Year; or
(ii) 1.4 times the amount which may be taken into account under
Section 415(c)(1)(B) of the
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Code with respect to such Participant for the Limitation Year.
For purposes of this Section 5.3, all defined benefit plans of
the Employer or an Affiliate, whether or not terminated, are to be treated as
one defined benefit plan and all defined contributions plans of the Employer or
an Affiliate, whether or not terminated, are to be treated as one defined
contribution plan.
ARTICLE VI
TOP-HEAVY PROVISIONS
6.1 TOP-HEAVY RULES. For any Plan Year in which the Plan is a Top-Heavy Plan,
the requirements of Sections 6.2 through 6.4 and of Section 6.9 must be
satisfied. The Top-Heavy provisions contained in this Article are intended to
be construed in accordance with Section 416 of the Code, and regulations and
rulings thereunder.
6.2 MINIMUM CONTRIBUTIONS. For any Plan Year in which the Plan is a Top-Heavy
Plan, each Active Participant who is not a Key Employee and who has not had
allocated to his accounts under this Plan and all other plans maintained by the
Employer or an Affiliate an amount (excluding Salary Reduction Contributions) at
least equal to the lesser of (a) or (b) shall be allocated Employer
Contributions (other than Salary Reduction Contributions) and forfeitures to the
extent necessary to equal the lesser of ---
(a) three percent (3%) of the Participant's Compensation for the
portion of the Plan Year during which he was a Participant; or
(b) the percentage of Compensation at which Employer Contributions
(including Salary Reduction Contributions and effective, October 1, 1994, Salary
Reduction Accruals) are allocated under the
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Plan for the Key Employee for whom such percentage is the highest for the year.
This Section 6.2 shall not be applicable with respect to a Participant
who is also covered by a defined benefit pension plan if that Plan provides such
Participant with the benefit specified by Section 416(c)(1) of the Code. For
purposes of this Section, all defined contribution plans required to be included
in an Aggregation Group shall be treated as one plan.
6.3 RESERVED.
6.4 RESERVED.
6.5 DETERMINATION OF TOP-HEAVINESS. The determination as to whether the Plan
is Top-Heavy shall be made as follows:
(a) If the Plan is not required to be included in an Aggregation
Group with other plans, then it shall be Top-Heavy only if when considered by
itself it is a Top-Heavy Plan.
(b) If the Plan is required to be included in an Aggregation Group
with other plans, it shall be Top-Heavy only if the Aggregation Group, including
any plans that may be permissively included in the Aggregation Group, is Top-
Heavy.
(c) If the Plan is not Top-Heavy and is not required to be included
in an Aggregation Group, it shall not be Top-Heavy even if it is permissively
included in an Aggregation Group which is Top-Heavy.
(d) Solely for the purpose of determining if the Plan, or any other
plan required to be included in the Aggregation Group of which this Plan is a
part, is Top-Heavy, the accrued benefit of an Employee other than a Key Employee
shall be determined under (i) the method, if any, that uniformly applies for
accrual purposes under all plans
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maintained by the Employer or its Affiliates, or (ii) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under the fractional accrual rule of Section 411(b)(1)(C) of the
Code.
6.6 CALCULATION OF TOP-HEAVY RATIOS. The Plan shall be Top-Heavy and an
Aggregation Group in which the Plan is included shall be Top-Heavy with respect
to any Plan Year if, as of the Determination Date, the sum of the Cumulative
Accounts of Participants who are Key Employees and Beneficiaries of deceased Key
Employees exceeds sixty percent (60%) of the sum of the Cumulative Accounts of
all Participants and Beneficiaries, excluding former Key Employees. For
purposes of determining the value of accounts and benefits for this Section, the
values shall be computed as of the "Valuation Date." The Valuation Date for a
defined benefit plan shall be the same date used for computing plan costs for
minimum funding. The Valuation Date for a defined contribution plan shall be
the most recent valuation date within a 12-month period ending on the
Determination Date.
6.7 CUMULATIVE ACCOUNTS. The Cumulative Account for any Participant shall be
the sum of the following --
(a) the amount credited to a Participant or beneficiary's accounts as
of the Determination Date (including amounts to be credited as of the
Determination Date but which have not yet been credited) under the Plan or any
defined contribution plan included in an Aggregation Group;
(b) the present value of the accrued benefit credited as of the
Determination Date to a Participant or Beneficiary under any qualified defined
benefit plan which is part of an Aggregation Group; and
(c) the amount of distributions to the Participant or Beneficiary
under the Plan or any plan included in an Aggregation Group during the 5 year
period ending on the Determination Date (including
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distributions under a terminated plan which, if it had not been terminated,
would have been required to be included in the Aggregation Group) but excluding
any distribution which is a tax-free rollover or similar transfer that is not
initiated by the participant or that is made to a plan maintained by the
Employer;
reduced by --
(d) the amount credited as of a Determination Date under the Plan or
a plan forming part of the Aggregation Group that is attributable to tax-free
rollovers or similar transfers (and earnings thereon) which were initiated by
the Participant and derived from a plan other than a plan maintained by the
Employer.
The Cumulative Account of a Participant who (a) was a Key Employee and who
subsequently meets none of the conditions of Section 6.8(e) for the Plan Year
containing the Determination Date or (b) has not performed services for the
Employer during the five-year period ending on the Determination Date shall not
be taken into account under this Section.
6.8 OTHER DEFINITIONS. For purposes of this Article, the following definitions
shall apply:
(a) "Affiliate" means (i) any organization which together with the
Employer is under "common control" as that term is defined in Section 414(c) of
the Code, (ii) any organization which together with the Employer is an
"affiliated service group" as that term is defined in Section 414(m) of the
Code, or (iii) any corporation which together with the Employer is a member of a
"controlled group of corporations" as that term is defined in Section 414(b) of
the Code.
(b) "Aggregation Group" means a plan or group of plans whose
Determination Date falls within the same calendar year and which includes (i)
each
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qualified plan maintained by the Employer or an Affiliate in which a Key
Employee is, or has been, a Participant during the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and (ii) any other
qualified plan which, during this period, enables any plan in which a Key
Employee is a participant to meet the requirements of Section 401(a)(4) or
410(b) of the Code. In addition, the Employer may elect to include any other
qualified plan maintained by the Employer or an Affiliate provided the expanded
Aggregation Group meets the requirements of Sections 401(a)(4) and 410(b) of the
Code.
(c) "Compensation" shall exclude Salary Reduction Contributions and,
effective October 1, 1994, Salary Reduction Accruals and be otherwise defined in
accordance with the regulations under Section 415 of the Code;
(d) "Determination Date" means, with respect to any Plan Year, the
last day of the preceding Plan Year or, in the case of the first Plan Year, the
last day of such Plan Year.
(e) "Key Employee' means any Employee or former Employee who at any
time during the Plan Year, or during any 1 of the 4 preceding Plan Years is or
was any one or more of the following:
(i) an officer of the Employer or an Affiliate receiving
Compensation from the Employer or an Affiliate greater than 50 percent (50%) of
the limitation amount specified in Section 415(b)(1)(A) of the Code; provided,
however, that no more than the lesser of (1) 50 Employees or (2) the greater of
3 Employees or 10 percent (10%) of all Employees shall be treated as officers,
and such officers shall be those with the highest annual Compensation in the 5
year period.
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(ii) one of the 10 Employees who owns both more than a one-half
percent (0.5%) interest and one of the largest interests in the Employer or an
Affiliate and who receives annual Compensation in an amount equal to or more
than the dollar limitation specified in Section 415(b)(1)(A) of the Code;
(iii) a 5-percent (5%) owner of the Employer or an Affiliate;
or
(iv) a 1-percent (1%) owner of the Employer or an Affiliate who
receives annual Compensation of more than $150,000.
Ownership shall be determined in accordance with Sections 416(i)(1)(B) and
(C) of the Code. For purposes of paragraph (ii), if two Employees have the same
ownership interest, the Employee receiving the greatest annual Compensation
shall be treated as having a larger interest.
6.9 LIMIT ON ANNUAL ADDITIONS.
(a) For any Plan Year in which the Plan is Top-Heavy, Section 5.3
shall be applied by substituting "1.0" for "1.25."
(b) Subsection (a) above shall not apply if
(i) Section 6.2(a) is applied by substituting "4%" for "3%"; and
(ii) the Plan would not be Top-Heavy if "90%" is substituted for
"60% in Section 6.6.
(c) If, but for this subsection, subsection (a) above would begin to
apply with respect to a Plan, the application of subsection (a) above shall be
suspended with respect to a Participant so long as there are --
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(i) no Employer Contributions or Forfeitures allocated to such
Participant; and
(ii) no accruals under a qualified defined benefit plan for such
Participant.
ARTICLE VII
NONDISCRIMINATION TESTS
7.1 DEFINITIONS.
(a) "Actual Deferral Percentage" for any Eligible Participant shall mean
the ratio (expressed as a percentage) of (i) Salary Reduction Contributions made
under the Plan on behalf of the Eligible Participant for the Plan Year to (ii)
the Eligible Participant's Compensation for the Plan Year.
(b) "Average Deferral Percentage" for Highly Compensated Employees and for
Nonhighly Compensated Employees for any Plan Year shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages for Eligible
Participants in each category.
(c) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Matching Contributions made under the Plan on behalf of an
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year.
(d) "Average Contribution Percentage" for Highly Compensated Employees and
for Nonhighly Compensated Employees for a Plan Year shall mean the average
(expressed as a percentage) of the Contribution Percentages for Eligible
Participants in each category.
(e) "Eligible Participant" shall mean, for purposes of Section 7.2, any
Employee who is permitted under the terms of the Plan to have Salary Reduction
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Contributions allocated to his account for the Plan Year and shall mean, for
purposes of Section 7.3, any Employee who is permitted under the terms of the
Plan to have Matching Contributions allocated to his account for the Plan Year.
(e.1) "Employee" shall mean, for purposes of this Article, persons who
are Employees, as defined in Section 1.17, of the Employer or of its Affiliates,
as defined in Section 6.8(a), including any entity that would be an Affiliate if
section 414(o) of the Code were also referenced in Section 6.8(a).
(f) "Excess Contributions" shall mean, for any Plan Year, the excess of
(i) the aggregate amount of Salary Reduction Contributions actually paid over to
the Trust on behalf of Highly Compensated Employees for such Plan Year over (ii)
the maximum amount of such contributions permitted under Section 7.2 of the
Plan.
(g) "Excess Aggregate Contributions" shall mean, for any Plan Year, the
excess of (i) the aggregate Matching Contributions actually made on behalf of
Highly Compensated Employees for such Plan Year over (ii) the maximum amount of
such contributions permitted under Section 7.3 of the Plan.
(h) "Family Member" shall mean, with respect to any Employee who is a five
percent owner as determined under Section 416(i)(1) of the Code or who is one of
the ten Highly Compensated Employees paid the greatest Compensation for the Plan
Year, the Employee's spouse and lineal ascendants and descendants and the
spouses of such lineal ascendants and descendants.
(i) "Highly Compensated Employee" shall mean any Employee who during the
Plan Year or the preceding Plan Year (i) was at any time a five percent (5%)
owner as determined under Section 416(i)(1) of the Code; (ii) received
Compensation from the Employer in excess of $75,000; (iii) received Compensation
from the Employer in excess of $50,000 and was in the Top Paid Group for such
Plan
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Year; or (iv) was at any time an officer and received Compensation greater than
50 percent (50%) of the amount in effect under Section 415(b)(1)(A) for such
Plan Year. No Employee shall be treated as described in paragraph (ii), (iii),
or (iv) of this subsection for the current year unless the Employee is one of
the 100 Employees paid the greatest Compensation for the current Plan Year. No
more than the lesser of (i) fifty Employees or (ii) the greater of three
Employees or ten percent (10%) of all Employees shall be treated as officers,
but if no officer received Compensation greater than 50 percent (50%) of the
amount in effect under Section 415(b)(1)(A) for such Plan Year, the highest paid
officer for such Plan Year shall be treated as described in paragraph (iv) of
this subsection. "Highly Compensated Employee" shall include any Employee who
separated from service (or was deemed to have separated) prior to the Plan Year
being tested, performed no services for the Employer during the Plan Year being
tested, and would have been found to be a Highly Compensated Employee under the
rules for active Employees for either the separation year or any Plan Year
ending on or after the Employee's 55th birthday. With respect to any Employee
who separated from service before January 1, 1987, the Employee shall be counted
as a Highly Compensated Employee only if the Employee was a five percent owner
or received Compensation in excess of $50,000 during (1) the Employee's
separation year (or the year preceding such separation year) or (2) any year
ending on or after such individual's 55th birthday (or the last year ending
before such Employee's 55th birthday).
(j) "Nonhighly Compensated Employee" shall mean Participants in the Plan
who are not Highly Compensated Employees.
(k) "Top Paid Group" shall mean the group consisting of the top twenty
percent (20%) of the Employees ranked on the basis of Compensation paid during
the Plan Year but the number of Employees shall be determined by excluding
(i) Employees who have not completed six months of
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service, (ii) Employees who normally work fewer than 17 1/2 hours per week,
(iii) Employees who normally work during not more than six months during any
Plan Year, (iv) Employees who have not attained age 21, (v) Employees who are
nonresident aliens and who receive no earned income (within the meaning of
Section 911(d)(2) of the Code) from the Employer which constitutes income from
sources within the United States (within the meaning of Section 861(a)(3) of the
Code), and (vi) Employees included in a collective bargaining unit covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement. The Plan Administrator may elect to apply paragraphs (i), (ii),
(iii), or (iv) by substituting a shorter period of service, smaller number of
hours or months, or lower age for the period of service, number of hours or
months or age specified in this subsection.
7.2 AVERAGE DEFERRAL PERCENTAGE TEST.
(a) At no time shall the Average Deferral Percentage for Participants
who are Highly Compensated Employees exceed the Average Deferral Percentage for
Nonhighly Compensated Employees multiplied by 1.25. If the Average Deferral
Percentage for Participants who are Highly Compensated Employees exceeds the
Average Deferral Percentage for Nonhighly Compensated Employees by no more than
two percentage points or such lesser amount as the Secretary of the Treasury
shall prescribe to prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee, the 1.25 multiplier in the preceding
sentence shall be replaced by 2.
(b) The Actual Deferral Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is eligible to have
Salary Reduction Contributions allocated to his account under two or more plans
or arrangements described in Section 401(k) of the Code that are maintained by
the Employer or an Affiliate shall
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be determined as if all such Salary Reduction Contributions were made under a
single arrangement.
(c) For purposes of determining the Actual Deferral Percentage of a
Participant who is a Highly Compensated Employee, the Salary Reduction
Contributions and Compensation of such Participant shall include the Salary
Reduction Contributions and Compensation of Family Members, and the Salary
Reduction Contributions and Compensation of such Family Members shall be
disregarded in determining the Average Deferral Percentage for Nonhighly
Compensated Employees.
(d) The determination and treatment of the Salary Reduction
Contributions and Actual Deferral Percentage of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the Treasury.
7.3 CONTRIBUTION PERCENTAGE TEST.
(a) At no time shall the Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees exceed the Average
Contribution Percentage for Nonhighly Compensated Employees multiplied by 1.25.
If the Average Contribution Percentage for Participants who are Highly
Compensated Employees exceeds the Average Contribution Percentage for Nonhighly
Compensated Employees by no more than two percentage points or such lesser
amount as the Secretary of the Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any Highly Compensated
Employee, the 1.25 multiplier in the preceding sentence shall be replaced by 2.
(b) The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to have
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matching contributions allocated to his account under two or more plans or
arrangements described in Section 401(k) of the Code that are maintained by the
Employer or an Affiliate shall be determined as if all such matching
contributions were made under a single arrangement.
(c) In the event that the Plan satisfies the requirements of Section
410(b) of the Code only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of Section 410(b) of the Code only if
aggregated with the Plan, then the Average Contribution Percentage Test shall be
applied by determining the Contribution Percentages of Eligible Participants as
if all such plans were a single plan.
(d) For purposes of determining the Contribution Percentage of an
Eligible Participant who is a Highly Compensated Employee, the Matching
Contributions and Compensation of such Eligible Participant shall include the
Matching Contributions and Compensation of Family Members, and the Matching
Contribution and Compensation of such Family Members shall be disregarded in
determining the Average Contribution Percentage for Nonhighly Compensated
Employees.
(e) The determination and treatment of the Contribution Percentage of
any Eligible Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
7.4 CORRECTIVE DISTRIBUTIONS.
(a) Salary Reduction Contributions for Highly Compensated Employees
may be limited by the Plan Administrator to the extent necessary to satisfy
Section 7.2. For this purpose, within two and one-half (2 1/2) months after the
end of the Plan Year (if possible, but in no event later than the
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last day of the Plan Year following such Plan Year) in which Excess
Contributions were made and notwithstanding any other provision of the Plan
which would otherwise limit or delay distributions or require Spousal Consent,
the Plan Administrator shall direct the Investment Manager to distribute any
Excess Contributions (and any earnings thereon) to the Highly Compensated
Employee on whose behalf such contributions were made during the preceding Plan
Year. The distribution of Excess Contributions pursuant to this subsection
shall occur after distribution of Excess Deferrals pursuant to Section 4.3 and
before distribution of Excess Aggregate Contributions pursuant to Section
7.4(b). The Highly Compensated Employees to whom Excess Contributions are to be
distributed and the amount to be distributed to each shall be determined in the
following manner:
(i) If all Highly Compensated Employees have equal Actual
Deferral Percentages, Excess Contributions shall be allocated among such Highly
Compensated Employees pro rata in accordance with their Compensation.
(ii) If Highly Compensated Employees have unequal Actual Deferral
Percentages, Excess Contributions shall be allocated to the Highly Compensated
Employee(s) with the highest Actual Deferral Percentage(s) until the Actual
Deferral Percentage(s) of such Highly Compensated Employee(s) equal the Actual
Deferred Percentage(s) of the Highly Compensated Employee(s) with the next
highest Actual Deferral Percentage(s). The allocation procedure described in
this subsection shall be repeated until all Excess Contributions are allocated.
The earnings allocable to Excess Contributions shall be the sum
of the following amounts: (i) the amount determined by multiplying net income
or
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net loss for the Plan Year with respect to which a distribution occurs that is
allocable to the Participant's Salary Reduction Contributions by a fraction, the
numerator of which is the Excess Contribution on behalf of the Participant for
such Plan Year and the denominator of which is the sum of the Participant's
account balances attributable to Salary Reduction Contributions as of the last
day of such Plan Year and (ii) an amount determined by multiplying ten percent
(10%) times the number of months that have elapsed, as of the date of the
distribution, since the end of such Plan Year times the amount determined under
paragraph (i) above. For purposes of this subsection, a distribution on or
before the fifteenth day of the month shall be treated as occurring on the last
day of the preceding month and a distribution after the fifteenth day shall be
treated as occurring on the first day of the following month. The Excess
Contributions (and earnings thereon) which would otherwise be distributable to
the Participant shall be reduced, in accordance with Treasury regulations, by
the amount of Excess Deferrals distributed to the Participant with respect to
the preceding Plan Year.
(b) Matching Contributions for Highly Compensated Employees may be
limited by the Plan Administrator to the extent necessary to satisfy Section
7.3. For this purpose, within two and one-half (2 1/2) months after the end of
the Plan Year (if possible, but in no event later than the last day of the Plan
Year after such Plan Year) in which the Excess Aggregate Contributions were made
and notwithstanding any other provision of the Plan which would otherwise limit
or delay distributions or require Spousal Consent, the Plan Administrator shall
direct the Investment Manager to distribute any Excess Aggregate Contributions
(and any earnings thereon) to the Highly Compensated Participant who made such
contributions, or on
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whose behalf such contributions were made, during the preceding Plan Year.
The distribution of Excess Aggregate Contributions pursuant to
this subsection shall occur after distribution of Excess Deferrals pursuant to
Section 4.3 and Excess Contributions pursuant to Section 7.4(a).
The Highly Compensated Employees to whom Excess Aggregate
Contributions are to be distributed and the amount to be distributed to each
shall be determined in the following manner:
(i) If all Highly Compensated Employees have equal Contribution
Percentages, Excess Aggregate Contributions shall be distributed among such
Highly Compensated Employees pro rata in accordance with their Compensation.
(ii) If Highly Compensated Employees have unequal Contribution
Percentages, Excess Aggregate Contributions shall be allocated to the Highly
Compensated Employee(s) with the highest Contribution Percentage(s) until the
Contribution Percentage(s) of such Highly Compensated Employee(s) equal the
Contribution Percentage(s) of the Highly Compensated Employee(s) with the next
highest Contribution Percentage(s). The allocation procedure described in this
subsection shall be repeated until all Excess Aggregate Contributions are
allocated.
The earnings allocable to Excess Aggregate Contributions shall be
the sum of the following amounts: (i) the amount determined by multiplying net
income or net loss for the Plan Year with respect to which the distribution
occurs that is allocable to the Participant's Matching Contributions by a
fraction, the numerator of which is the Excess Aggregate Contribution on
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behalf of the Participant for such Plan Year and the denominator of which is the
portion of the Participant's Account attributable to Matching Contributions as
of the last day of such Plan Year, and (ii) an amount determined by multiplying
10 percent (10%) times the number of months that have elapsed, as of the date of
the distribution, since the end of such Plan Year times the amount determined
under paragraph (i) above. For purposes of this subsection, a distribution on
or before the fifteenth day of the month shall be treated as occurring on the
last day of the preceding month and a distribution after the fifteenth day shall
be treated as occurring on the first day of the following month.
ARTICLE VIII
SELF DIRECTED ACCOUNT AND PARTICIPANT'S ACCOUNT
8.1 SELF DIRECTED ACCOUNT. The Employer shall contract with the Investment
Manager who shall establish a Self Directed Account for each Participant which
permits each Participant to direct the investment of his or her Participant
Account by selecting from among various investment alternatives offered by the
Investment Manager.
8.2 DESCRIPTION SELF DIRECTED ACCOUNT INVESTMENT ALTERNATIVES. At a minimum,
the Investment Manager shall offer the Participants the following investment
alternatives: (i) a money market fund investing in high-quality money market
instruments; (ii) a managed income portfolio seeking preservation of capital and
a competitive income over time investing in high-quality short and long term
investment contracts and short-term money market instruments; (iii) an
intermediate bond fund investing primarily in investment grade fixed income
obligations rated Baa or better my Moody's or BBB or better by Standard & Poor's
with a dollar-weighted average portfolio maturity between three and ten years;
(iv) a growth and income fund seeking long-term capital growth,
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current income and growth of income consistent with reasonable investment risk
with investments in common stocks, securities convertible into common stocks,
preferred stocks and fixed income securities; (v) a growth fund seeking long-
term capital appreciation by investing in securities of foreign and domestic
companies with potentially above-average growth potential and correspondingly
higher level risk; and (vi) a growth fund seeking long-term capital appreciation
by investing primarily in common stocks and securities convertible into common
stocks including the common stocks of smaller, less well known companies in
emerging areas of the economy.
8.3 PARTICIPANT'S ACCOUNT. A Participant's Account shall be maintained on
behalf of each Participant until such account is used to provide an annuity or
otherwise distributed in accordance with the terms of this Plan. Contributions
on behalf of a Participant shall be made to such Participant's Account (except
for any portion of such amounts which may be retained by the Investment Manager
as an administrative or expense charge under the written agreement with the
Investment Manager), and such Participant shall have the responsibility to
decide the portion of the amount of such Contributions that shall be paid to the
various investment funds offered by the Investment Manager as set forth in the
preceding Section of the Plan. The Participant shall elect the manner in which
the Contributions will be allocated by designating multiples of whole
percentages on the proper form. The Participant may, in writing on the
prescribed form, change such amounts four times during a Plan Year in accordance
with the terms of the written agreement with the Investment Manager. The change
may be at any time and shall be effective on the first business day of the first
full pay period beginning fifteen (15) days after written notice is received by
the Plan Administrator.
8.4 ACCOUNTING. The Investment Manager shall maintain a separate accounting
record with respect to Salary Reduction Contributions, Matching Contributions,
Integrated Discretionary Contributions, and Rollover Contributions credited to
each Participant's Account, as well as of any
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income, expenses, gains, or losses on each such separately recorded amounts.
Amounts allocated to such Accounts on behalf of a Participant shall be
credited to his Participant's Account. Any other credits (including any income,
gains, dividends or interest credits, if applicable), debits (including any
expenses or losses, if applicable), transfers or withdrawals to or from any such
Account shall be appropriately and equitably allocated to the Participant's
Account of each Participant.
A Participant's Account shall be maintained for or with respect to each
Participant under this Plan unless or until cancelled by the Investment Manager
in accordance with the provision of Section 8.7.
8.5 TRANSFERS AMONG THE INVESTMENT ACCOUNTS. Where permitted by the terms and
limitation of the written agreement with the Investment Manager, amounts in a
Participant's Account may be transferred among the investments described in
Section 8.2.
8.6 VALUE OF ACCOUNT. The value of the funds standing to the credit of a
Participant in his Participant's Account at any time shall be equal to the value
of the Funds held on his behalf in the various investment alternatives offered
pursuant to Section 8.2 and shall reflect the total value of his interest in
said Accounts. At least once during each year the Investment Manager shall
furnish the Plan Administrator and each Participant with a written report of the
value of the Participant's Account. As of the last day of each Plan Year (and
at such additional times as the Investment Manager shall determine in accordance
with the provisions of the written agreement with the Investment Manager), the
Participant's Account of each Participant shall be appropriately and equitably
adjusted to reflect any dividends, interest credits, other credits or other
gains or losses on the investments and any changes in the value of investments
in accordance with the procedures set forth in the written agreement with the
Investment Manager.
8.7 CANCELLATION OF ACCOUNT. Upon the application of a Participant's Account
to provide a distribution to a
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Participant (or his Beneficiary) in accordance with the distribution provisions
(other than distributions under the withdrawal provisions of Article XIII or
the loan provisions of Article XIV), such Participant's Account shall be
cancelled by the Investment Manager and be of no further force or effect under
this Plan or under the written agreement with the Investment Manager.
ARTICLE IX
DISTRIBUTION OF BENEFITS
9.1 DISTRIBUTIONS IN GENERAL. All distributions hereunder, whether in the form
of an annuity or cash, or a combination thereof, shall be made by the Investment
Manager as of the date specified, in accordance with the terms and conditions
set forth in the Plan. The Investment Manager shall be entitled to receive
written instructions and proper notice from the Plan Administrator at least 31
days prior to the effective date of any distribution. Benefits paid in the form
of annuity must be payable on the first day of each calendar month.
9.2 PAYMENT OF BENEFITS. The payment of benefits shall begin as provided in
Articles X, XI, and XII but not later than the 60th day after the close of the
Plan Year in which the later of (a), (b) or (c) occurs:
(a) The date on which the Participant attains his Normal Retirement
Age;
(b) The date on which occurs the tenth anniversary of the year in
which the Participant commenced participation in the Plan; or
(c) The date on which the Participant terminates his Service
(including Early Retirement, Termination of Employment, death, or Disability)
with the Employer.
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A Participant may designate a later date for commencement of benefits than
that required above; provided, however, that distribution of retirement benefits
must begin no later than the April 1 following the close of the calendar year in
which the Participant attains age 70 1/2, regardless of whether the Participant
is still employed. However, such distribution shall not be required if the
Participant had reached age 70 1/2 prior to January 1, 1989, unless such
Participant was, at any time after reaching age 66 1/2, a five-percent owner, as
that term is defined in Section 416(i)(1)(B) of the Code.
9.3 ELECTION OF BENEFITS. Subject to the limitations provided in this Article,
each Participant may elect the form of distribution of his benefits; provided,
however, that no such election shall be effective before the Annuity Starting
Date unless made in accordance with Section 9.5 or Section 11.2.
9.4 SMALL ACCOUNTS. If a Participant's vested Interest is $3,500 or less, the
distribution shall be in the form of a single cash payment.
9.5 QUALIFIED JOINT AND SURVIVOR ANNUITY.
(a) The benefit of each married Participant who elects an annuity
form of distribution pursuant to Section 9.3 shall be payable to the Participant
in the form of a Qualified Joint and Survivor Annuity.
(b) For purposes of informing the Participant concerning the election
provided under Section 9.5(a), the Plan Administrator shall provide to each
Participant within a reasonable time before his Annuity Starting Date a written
explanation of the terms and conditions of the Qualified Joint and Survivor
Annuity. Such notice shall include an explanation of the Participant's right to
make (and the effect of) an election to waive the Qualified Joint and Survivor
Annuity, the rights of the Participant's spouse with respect to such election,
and the right to make (and the effect of) a revocation of the election to waive
the
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Qualified Joint and Survivor Annuity. Such explanation shall be consistent with
such regulations as the Secretary of the Treasury may prescribe.
(c) For purposes of Section 9.5(a), a Participant may, with Spousal
Consent, elect at any time during the 90-day period ending on the Annuity
Starting Date to waive the Qualified Joint and Survivor Annuity form of benefit
and may revoke such election in writing at any time up to the date on which
payments to the Participant are to begin.
9.6 FORMS OF BENEFIT. A Participant (with spousal consent, if married) or his
beneficiary may choose any of the following forms of benefits: (a) a lump sum
cash payment, (b) a contingent annuity, (c) a life annuity with no period
certain, or (d) a life annuity with a period certain ten, or fifteen years. The
normal form of benefit for an unmarried Participant who elects an annuity shall
be a single life annuity for the life of the Participant unless the Participant
elects a different form of annuity. An unmarried Participant who elects to
receive an annuity shall receive information similar to that required by Section
9.5(b) above.
9.7 LIMITATIONS ON PAYMENTS. The form of distribution elected by the
Participant must satisfy the following requirements:
(a) The entire benefit may not be retained in the Participant's
Account for distribution to the Participant's beneficiary at his death.
(b) If benefit payments commence before the death of the Participant,
benefit payments may not extend
(i) beyond the life or life expectancy of the Participant; or
(ii) beyond the lives or life expectancies of the Participant and
a designated Beneficiary.
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(c) If the Participant dies before benefit payments commence, the
Participant's entire interest must be distributed within five years of the
Participant's death unless --
(i) payments are to be made to a designated Beneficiary over
such Beneficiary's life and commence within one year of the Participant's death;
(ii) payments are to be made to the Participant's spouse over a
period not extending beyond the life or life expectancy of the spouse; or
(iii) the spouse is the designated Beneficiary and dies
before benefit payments commence, and payments to a designated Beneficiary are
to be completed within five years of the spouse's death.
(d) if the Beneficiary dies after the Participant but before benefit
payments commence, distribution shall be made in the form of a lump sum payment.
In the event that a Participant's Beneficiary is entitled to annuity
payments, each monthly annuity payment payable to the Beneficiary shall be no
greater than each monthly annuity payment payable to the Participant during the
Participant's lifetime. Such restriction shall not prevent an increase in the
amount of any Variable Annuity payment which occurs as the result of an increase
in the value of the underlying portfolio. If a Participant begins receiving
benefits and dies before his entire interest is distributed, the remainder of
his interest shall be distributed to his Beneficiary at least as rapidly as
under the method of distribution to the Participant on the date of the
Participant's death.
9.8 NON-TRANSFERABLE. The Participant's (or Beneficiary's) right to any
Annuity payments, benefits and refunds is not transferable and shall be free
from the claims of all creditors to the fullest extent permitted by law.
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9.9 CONSENT TO DISTRIBUTION. Notwithstanding anything to the contrary herein
(other than Sections 4.3 and 7.4), if the Participant's Vested Interest exceeds
$3,500, no distribution may be made before the Participant attains (or would
have attained) Normal Retirement Age unless the Participant, if living, consents
to such distribution and Spousal Consent is obtained. If distribution commences
in the form of a Qualified Joint and Survivor Annuity, the form of distribution
may be varied only with the consent of the Participant, if living, and with
Spousal Consent, and if permitted under the terms of the annuity.
9.10 ELIGIBLE ROLLOVER DISTRIBUTION - INCOME TAX WITHHOLDING. Effective for
Eligible Rollover Distributions after December 31, 1992, the Plan Administrator,
Investment Manager or any other person who is the payor of a distribution which
is an Eligible Rollover Distribution shall deduct and withhold from such
distribution, prior to the distribution of such funds, the amount of tax
required to be withheld by Section 3405(c)(1) of the Code except to the extent
that Section 9.11 hereof provides otherwise.
9.11 ELIGIBLE ROLLOVER DISTRIBUTION - WITHHOLDING EXCEPTION. Effective for
Eligible Rollover Distributions after December 31, 1992, the income tax
withholding provisions of Section 9.10 hereof shall not apply if the distributee
of such distribution elects, in the manner specified herein, to have such
distribution paid directly to one and only one Eligible Retirement Plan. To
elect the application of this Section 9.11, a distributee of an Eligible
Rollover Distribution must deliver a written notice of election to the Plan
Administrator no later than the thirty-first (31st) day prior to the effective
date of such distribution. To be effective, such election must identify with
reasonable specificity the name and address of the specific Eligible Retirement
Plan to which such distribution is to be paid. If the written election
designates more than one Eligible Retirement Plan or if the distributee's
election fails to comply with the requirements of this Section 9.11, such
election shall be null and void and such Eligible Rollover Distribution shall be
subject to the withholding requirements of Section 9.10. If a distributee of an
Eligible Rollover Distribution makes a
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valid election under this Section 9.11, the amount of such Eligible Rollover
Distribution (reduced by the portion thereof that would not be included in the
distributee's gross income if such distribution were made under Section 9.10
above) shall made in the form of a direct trustee-to-trustee transfer to the
Eligible Retirement Plan specified by the distributee. Any portion of the
Eligible Rollover Distribution which would not be included in the distributee's
gross income if such distribution were made under Section 9.10 above shall be
paid to the distributee.
ARTICLE X
RETIREMENT BENEFITS
10.1 NORMAL RETIREMENT. A Participant who attains his Normal Retirement Age
shall have a Vesting Percentage of 100 percent (100%). Subject to Article IX,
if a Participant retires from the active Service of the Employer on his Normal
Retirement Date he shall receive a distribution of the entire value of his
Participant's Account as of his Normal Retirement Date.
10.2 EARLY RETIREMENT. A Participant who retires from the Service of the
Employer on or after his Early Retirement Date shall have a Vesting Percentage
of 100 percent (100%) and, subject to Article IX, shall receive a distribution
of the entire value of his Participant's Account.
10.3 LATE RETIREMENT. A Participant may continue in the Service of the Employer
after his Normal Retirement Age, and in such event he shall retire on his Late
Retirement Date. Such Participant shall continue as a Participant under this
Plan until such Late Retirement Date. The Participant shall have a Vesting
Percentage of 100 percent (100%) and, subject to Article IX, shall receive a
distribution of the entire value of his Participant's Account as of his Late
Retirement Date. Notwithstanding the foregoing, distribution of retirement
benefits shall begin no later than the April 1 following the close of the
calendar year in which the Participant attains age 70 1/2, in accordance with
the regulations under section 401(a)(9) of the Code, even if the Participant is
still
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employed at such time, subject to the exception contained in Section 9.2 of the
Plan.
10.4 DISABILITY RETIREMENT. A Participant who retires from the Service of the
Employer on account of Disability shall have a Vesting Percentage of 100 percent
(100%) and, subject to Article IX, shall receive a distribution of the entire
value of his Participant's Account as of his Disability Retirement Date.
10.5 DISTRIBUTION. Subject to Section 9.9, a Participant shall receive a
complete distribution of his entire Vested Interest within 60 days after the
close of the Plan Year in which the Participant's retirement occurs.
Notwithstanding the preceding sentence, a Participant with a Vested Interest in
excess of $3,500 may elect to defer distribution. Distribution after retirement
may not be deferred beyond Normal Retirement Age. Distributions and deferrals
shall be subject to the terms and conditions of Article IX.
ARTICLE XI
DEATH BENEFITS
11.1 FROM PARTICIPANTS' ACCOUNTS.
(a) Death before Distribution. Upon the death of any Participant
prior to the date of distribution on account of his retirement or his
Termination of Employment, his Beneficiary shall receive a distribution of the
entire value of the Participant's Account. Subject to the limitations of
Article IX, the Beneficiary may elect the form of distribution.
(b) Death after Distribution. Upon the death of any Participant on
or after the date of distribution on account of his retirement or his
Termination of Employment, the death benefit, if any, attributable to his
Participant's Account will be determined in accordance with the form of annuity,
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if any, provided for the Participant under the Plan.
11.2 BENEFICIARY. Each Participant shall have the right, before distributions
commence, in writing, with Spousal Consent, (a) to designate a Beneficiary and
to specify the form of distribution the Beneficiary is to receive and (b) to
change the Beneficiary and/or form of distribution at any time. If a
Participant does not designate a Beneficiary, or if the Participant's designated
Beneficiary does not survive the Participant, the value of the Participant's
Account shall be distributed to the Participant's spouse, if living, in
accordance with the provisions of this Article; otherwise, to the Participant's
surviving issue PER STIRPES.
ARTICLE XII
TERMINATION OF EMPLOYMENT
12.1 DISTRIBUTION. Subject to Section 9.9 of the Plan, a Participant shall
receive a complete distribution of his entire Vested Interest within 60 days
after the close of the Plan Year in which the Participant's Termination of
Employment occurs. Notwithstanding the preceding sentence, a Participant with a
Vested Interest in excess of $3,500 may elect to defer distribution.
Distribution after Termination of Employment may not be deferred beyond Normal
Retirement Age. Distributions and deferrals shall be subject to the terms and
conditions of Article IX.
If at the time of Termination the Participant is not 100 percent (100%)
vested, the nonvested portion of his Participant's Account shall be forfeited.
The amount so forfeited shall be restored to the credit of that former
Participant in his Participant's Account in the event he:
(a) resumes Service as an Employee before he incurs five (5)
consecutive Breaks in Service and again becomes an Active Participant in
accordance with the provisions of Section 3.1 before having received a
distribution from the plan, or
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(b) repays to this Plan the full amount previously withdrawn as a
Plan distribution, whether paid to him as a lump sum cash payment or in the form
of an immediate or deferred annuity, provided that such repayment is made by the
former Participant either (i) before he incurs five (5) consecutive Breaks in
Service commencing after the date on which such withdrawal was made or (ii) if
he does not incur five (5) consecutive Breaks in SerVice commencing after the
date on which such withdrawal was made, within five (5) years following his
resumption of Service as an Employee.
In the event of (a), the amount of the value of the nonvested portion
of such former Participant's Account as of his Termination of Employment,
adjusted for gains and losses, shall be restored to the credit of the now Active
Participant. In the event of (b), the amount of the value of the nonvested
portion of such former Participant's Account as of his Termination of
Employment, unadjusted for gains and losses, shall be restored to the credit of
the now Active Participant and combined with the amount of such Active
Participant's repayment to restore for his benefit the full value of his
Participant's Account. When the Participant's Account is so restored, as
described in the preceding sentence, it shall be deemed to be composed of value
attributable to the various types of Employer Contributions in a manner
identical to the composition of his Participant's Account as of his Termination
of Employment. Thereafter, such Participant's Account as so restored, shall be
treated as if a withdrawal, repayment, and restoration as described in this
Section had never been made.
12.2 FORFEITURE. Any Forfeitures shall be used by the Employer to reduce, and
in lieu of, the Employer Contribution next due under Sections 4.4, 4.5, or 4.6
at the earliest opportunity after such Forfeiture becomes available.
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ARTICLE XIII
WITHDRAWALS
13.1 WITHDRAWAL FOR FINANCIAL HARDSHIP.
(a) Subject to approval of the Plan Administrator, a Participant may
withdraw, not more than twice during each Plan Year, up to 100 percent of such
Participant's Salary Reduction Contributions, vested Basic Discretionary
Contributions (made with respect to the Plan Year ended December 31, 1988), and
vested Rollover Contributions in the event of a financial hardship ("hardship
withdrawal"). Application for such withdrawal shall be made on the Appropriate
Form prescribed by the Plan Administrator. The Participant shall demonstrate to
the satisfaction of the Plan Administrator that the Participant is confronted
with a financial hardship, as defined below. An approved hardship withdrawal
shall be distributed in a lump sum as soon as feasible following approval of the
Plan Administrator. The amount of such hardship withdrawal shall be determined
based on the value of the Participant's Account as of the day on which the
request for such hardship withdrawal is made. (The withdrawal may not include
any earnings on Salary Reduction Contributions allocated with respect to
contributions after December 31, 1988 unless the Participant would otherwise be
unable to withdraw an amount equal to the sum of his Salary Reduction
Contributions and the earnings allocable thereto as of December 31, 1988.) For
purposes of this section, a distribution is on account of "financial hardship"
only if such distribution is (i) on account of an immediate and heavy financial
need of a Participant and (ii) necessary to satisfy such need.
(b) A distribution will be considered to be made on account of an
immediate and heavy financial need of the Participant if the distribution is on
account of -
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(i) Medical expenses described in Section 213(d) of the Code
incurred by the Participant, the Participant's spouse, or any dependent (as
defined in Section 152 of the Code) of the Participant;
(ii) The purchase (excluding mortgage payments) of a principal
residence of the Participant;
(iii) Payment of tuition for the next semester or quarter of
post-secondary education for the Participant, his spouse, child, or dependent;
or
(iv) The need to prevent eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence.
The foregoing notwithstanding, the Plan Administrator shall not
approve a hardship withdrawal for any reason unless such hardship withdrawal
complies with any applicable Treasury regulations, including (but not limited
to) Treas. Reg. 1.401(k)-1(d).
(c) A distribution will be considered necessary to satisfy an
immediate and heavy financial need of the Participant if paragraph (i) and
either paragraph (ii) or both paragraphs (iii) and (iv) are satisfied:
(i) The distribution does not exceed the amount of the immediate
and heavy financial need of the Participant.
(ii) The Participant represents that the need cannot be relieved
- -
(I) through reimbursement or compensation by insurance or
otherwise,
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(II) by reasonable liquidation of the Participant's assets,
to the extent such liquidation would not itself cause an immediate and heavy
financial need,
(III) by cessation of Salary Reduction Contributions under
the Plan, or
(IV) by other distributions, other than hardship
withdrawals, or nontaxable (at the time of the loan) loans from qualified plans
maintained by the Employer or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
For purposes of paragraph (ii), the Participant's
resources shall be deemed to include those assets of his spouse and minor
children that are reasonably available to the Participant
(iii) The Participant has obtained all distributions, other
than hardship withdrawals, and all nontaxable loans currently available under
all plans maintained by the Employer.
(iv) The Participant agrees to forego making Salary Reduction
Contributions, exercising any stock options, or purchasing any stock through a
stock purchase plan for at least twelve (12) months after receipt of the
hardship withdrawal, and agrees to forego making Salary Reduction Contributions
for the Participant's Calendar Year immediately following the hardship
withdrawal in excess of (a) the applicable limit under Section 402(g) of the
Code for such next taxable year less (b) the amount of such Participant's
elective contributions for the Calendar Year of the hardship withdrawal.
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13.2 PRE-RETIREMENT DISTRIBUTION. A Participant who has attained at least age
59 1/2 may elect to withdraw all or any portion of his Participant's Account
attributable to his Salary Reduction Contributions and Matching Contributions.
Such withdrawal shall be distributed in the manner provided in Article IX.
A Participant who has elected to make such a withdrawal shall continue to
participate in the Plan on the same basis as any other Employee. A Participant
may make only one withdrawal under this Section.
13.3 NOTIFICATION. The Participant shall notify the Plan Administrator in
writing of his request to make a withdrawal under Sections 13.1 or his election
to receive a distribution under Section 13.2. Any such election shall be
effective as of the date specified in such notice, which date must be at least
thirty-one days after such notice is filed. Payment of the withdrawal shall be
subject to the terms and conditions of this Article and Article IX.
13.4 NON-REPAYMENT. Withdrawals made in accordance with this Article may not be
repaid.
13.5 SPOUSAL CONSENT. A Participant shall not be permitted to make a withdrawal
pursuant to Section 13.1 or receive a distribution pursuant to Section 13.2
without Spousal Consent.
13.6 ALLOCATION OF WITHDRAWALS. The Investment Manager, insofar as possible
under this Section, shall withdraw funds to make a distribution under this
Section from the Participant's Account investments as designated by the
Participant or, if the Participant fails to designate in a timely manner, from
the Participant's investments in the following order of priority: (i) all money
market accounts; (ii) all short-term bond funds; (iii) all intermediate bond
funds; (iv) all long-term bond funds; (v) all equity funds; (vi) all growth
funds; and (vii) all other investment alternatives. If the Investment Manager
is required to withdraw funds from any investment category and, at the time of
such withdrawal, such
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Participant has more than one fund investment within such investment category,
the Investment Manager shall withdraw funds from among such funds as the
Investment Manager determines.
ARTICLE XIV
LOANS
14.1 GENERAL LOAN PROVISIONS. The Plan Administrator may, under rules to be
issued by such Administrator, authorize the Investment Manager to loan to any
Participant an amount or amounts not to exceed in the aggregate the lesser of
(a) $50,000 reduced by the highest outstanding loan balance incurred by the
Participant during the one-year period ending on the day before the date on
which such loan was made or (b) fifty percent (50%) of the value of his Vested
Interest his Participant's Account. No loan may be made for less than $2,500,
and only one loan shall be permitted during any period of twelve consecutive
months. No loans shall be made on or after the termination of the Plan. Such
loans shall not be made available to Participants who are highly compensated
Employees in percentage amounts greater than percentage amounts made available
to other Participants. Loans will be made available to all Participants on a
reasonably equivalent basis. For purposes of this Section, all plans maintained
by the Employer and its Affiliates shall be treated as one plan.
14.2 TERMS OF LOANS. Loans shall be made at an interest rate set forth in
Section 14.4 below. Loans may be subject to repayment through payroll
withholding on a definite schedule as determined by the Plan Administrator, but
must be repayable within five (5) years (ten (10) years in the case of any loan
used to acquire any dwelling unit which within a reasonable time is to be used
as a principal residence of the Participant). The obligation of the Participant
shall be evidenced by a note which shall contain the terms of repayment and
provisions covering default and which shall be secured by the Participant's
Account and such other security
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as the Plan Administrator may require. No loan may be made to a married
Participant unless Spousal Consent is obtained within 90 days prior to the
making of the loan.
14.3 SOURCE OF FUNDS. The loan shall be made by withdrawing funds from the
Participant's Account in the same manner that withdrawals are allocated pursuant
to Section 13.6. A loan set-up fee shall be deducted from the Participant's
Account for administrative charges by the Investment Manager.
14.4 REPAYMENT.
(a) Loan repayment is due on a monthly basis beginning as of the end
of the month following the date the loan is made. Each monthly payment shall be
equal to the sum of (i) the monthly equivalent of the annual loan interest rate
determined by the Plan Administrator at the time the loan is made (such annual
loan interest rate shall be the rate of interest declared by the Plan
Administrator based on the "Prime Rate" as reported by the WALL STREET JOURNAL
at the beginning of the calendar quarter plus two percent (2%) and (ii) a
monthly installment payment of the loan principal. Each monthly installment
shall be an amount determined at the time the loan is made such that the loan
shall be fully amortized over its term.
(b) Each repayment, inclusive of interest, shall be allocated to the
portion or portions of the Participant Account from which it was withdrawn.
(c) In no event may any portion of such repayment be treated as a new
or current contribution made by the Participant to the Self Directed Account.
14.5 WITHDRAWAL FROM PLAN. When a total withdrawal is made from a Participant's
Account for purposes of making a distribution to such Participant, any
outstanding loan balance will then be considered to be part of such total
withdrawal.
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ARTICLE XV
FIDUCIARY DUTIES AND RESPONSIBILITIES
15.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the Participants and
their Beneficiaries and for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan. Each Fiduciary shall act with the care, skill, prudence
and diligence under the circumstances that a prudent man acting in a like
capacity and familiar with such matters would use in conducting an enterprise of
like character and with like aims, in accordance with the documents and
instruments governing this Plan, insofar as such documents and instruments are
consistent with this standard.
15.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of persons may serve
in more than one Fiduciary capacity with respect to this Plan.
15.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which he may be
entitled as a Participant or Beneficiary in this Plan, so long as the benefit is
computed and paid on a basis which is consistent with the terms of this Plan as
applied to all other Participants and Beneficiaries. Nor shall this Plan be
interpreted to prevent any Fiduciary from receiving any reasonable compensation
for services rendered, or for the reimbursement of expenses properly and
actually incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer shall
receive compensation from this Plan, except for reimbursement of expenses
properly and actually incurred.
15.4 INVESTMENT MANAGER. When an Investment Manager has been appointed pursuant
to Section 16.5 of this Plan, he is required to acknowledge in writing that he
has undertaken a Fiduciary responsibility with respect to the Plan. The
Investment Manager's liability as a Fiduciary is limited to
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that arising from its management of any assets of the Plan held by the
Investment Manager in its Separate Accounts.
ARTICLE XVI
THE PLAN ADMINISTRATOR
16.1 DESIGNATION AND ACCEPTANCE. The Board of Directors of the Employer shall
designate a Plan Administrator who shall have the responsibility for the
operation and administration of the Plan and who by joining in the operation and
administration of this Plan accepts such appointment and agrees to act in
accordance with the terms of the Plan. The offices of the Plan Administrator
shall be located at 1225 Eye Street, NW, Washington, DC 20005.
16.2 DUTIES AND RESPONSIBILITY. The Plan Administrator shall administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries in a
nondiscriminatory manner subject to the specific terms of the Plan. The Plan
Administrator shall have and shall exercise discretionary authority in
interpreting the terms of the Plan and in considering and reviewing claims by
Participants or Beneficiaries for benefits to the extent permitted by Treas.
Reg. 1.401 (a)-4.
The Plan Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms thereof.
This shall include notification to the Investment Manager of any adjustment made
to a Participant's Account in accordance with Article V.
The Plan Administrator shall comply with the regulatory provisions of ERISA
and shall furnish to each Participant covered under this Plan (a) a summary plan
description, (b) upon written request, a statement of his total benefits accrued
and his vested benefits if any and (c) information concerning the election of
benefits under the Plan. The Plan Administrator shall also file the appropriate
annual reports and any other data which may be required by appropriate
regulatory agencies.
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Furthermore, the Plan Administrator shall take the necessary steps to
notify the appropriate interested parties whenever an application is made to the
Secretary of the Treasury for a determination letter in accordance with Section
7476 of the Code.
16.3 EXPENSES AND COMPENSATION. The expenses necessary to administer the Plan
shall be borne by the Employer, including but not limited to those involved in
retaining necessary professional assistance from an attorney, an accountant, an
actuary, or an investment advisor. Nothing shall prevent the Plan Administrator
from receiving reasonable compensation for services rendered in administering
this Plan, provided the Plan Administrator is not a full-time Employee of the
Employer.
16.4 INFORMATION FROM EMPLOYER. To enable the Plan Administrator to perform his
functions, the Employer shall supply full and timely information to the Plan
Administrator on all matters relating to this Plan as the Plan Administrator may
require.
16.5 APPOINTMENT OF INVESTMENT MANAGER. The Plan Administrator may appoint an
Investment Manager or Managers and delegate to him the authority to manage,
acquire, invest or dispose of all or any part of the Plan assets. With regard
to the assets entrusted to his care, the Investment Manager shall provide
written instructions and directions to the Plan Administrator, who shall in turn
be entitled to rely upon such written direction. This appointment and
delegation shall be evidenced by a signed written agreement.
16.6 DELEGATION OF DUTIES. The Plan Administrator shall have the power, to the
extent permitted by law, to delegate the performance of such Fiduciary and non-
Fiduciary duties, responsibilities and functions as the Plan Administrator shall
deem advisable for the proper management and administration of the Plan in the
best interests of the Participants and their Beneficiaries.
ARTICLE XVII
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PARTICIPANTS' RIGHTS
17.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is established
and the Plan assets are held for the exclusive purpose of providing benefits for
such Employees and their Beneficiaries as have qualified to participate under
the terms of the Plan.
17.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary or the Employer
acting in his behalf, shall notify the Plan Administrator of a claim of benefits
under the Plan. Such request shall be in writing to the Plan Administrator and
shall set forth the basis of such claim and shall authorize the Plan
Administrator to conduct such examinations as may be necessary to determine the
validity of the claim and to take such steps as may be necessary to facilitate
the payment of any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
A decision by the Plan Administrator shall be made promptly and not later
than 90 days after the Plan Administrator's receipt of the claim of benefits
under the Plan, unless special circumstances require an extension of the time
for processing in which case a decision shall be rendered as soon as possible,
but not later than 90 days after receipt of the claim of benefits under the
Plan.
17.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by the Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the claimant, must be
delivered or mailed to the claimant within 90 days after such denial. Such
notice shall set forth (a) the specific reasons for the denial; (b) a specific
reference to pertinent Plan provisions on which the denial is based; (c) a
description of any additional material or information necessary for the claimant
to perfect the claim and an explanation of why such material or information is
necessary; and (d) an explanation of the Plan's claim review procedure.
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17.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary shall
have 60 days after receipt by the claimant of written notification of a denial
of a claim to request a review of a denied claim. A Participant or Beneficiary
(a) may request a review by the Plan Administrator upon written application to
the Plan; (b) may review pertinent Plan documents; and (c) may submit issues and
comments in writing to the Plan Administrator.
A decision by the Plan Administrator shall be made not later than 60 days
after receipt of a request for review, unless special circumstances require an
extension of the time for processing in which case a decision shall be rendered
as soon as possible, but not later than 120 days after receipt of a request for
review. The decision shall be in writing and shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
and specific references to the pertinent Plan provisions on which the decision
is based.
A Participant or Beneficiary shall be entitled, either in his own name or
in conjunction with any other interested parties, to bring such actions in law
or equity or to undertake such administrative actions or to seek such relief as
may be necessary or appropriate to compel the disclosure of any required
information, to enforce or protect his rights, to recover present benefits due
to him or to clarify his rights to future benefits under the Plan.
17.5 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or any other
rights or interest in the Plan fund other than those specifically herein set
forth.
17.6 MERGERS OR TRANSFERS. The Plan shall not be merged or consolidated with,
nor shall any assets or liabilities be transferred to, any other plan, unless
the benefits payable to each Participant, if the Plan were terminated
immediately after such action, would be equal to, or greater than, the benefits
to which such Participant would have entitled if the Plan had been terminated
immediately before such action.
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ARTICLE XVIII
THE INVESTMENT MANAGER
18.1 DUTIES AND RESPONSIBILITIES. The Investment Manager shall assumes all the
duties and responsibilities set forth in the written agreement with the
Investment Manager. The terms of the written agreement with the Investment
Manager may be changed with the written consent of the Employer without amending
this Plan, provided such changes shall conform (a) to the requirements for
qualification under Section 401(a) of the Internal Revenue Code, as amended from
time to time, and (b) to ERISA, as amended from time to time.
18.2 RELATION TO EMPLOYER, PLAN ADMINISTRATOR AND PARTICIPANTS. The Investment
Manager may receive the statement of the Plan Administrator or, if the Plan
Administrator so designates, the Employer, as conclusive evidence of any of the
matters decided in the Plan and the Investment Manager shall be fully protected
in taking or permitting any action on the basis thereof and shall incur no
liability or responsibility for so doing. The Investment Manager shall not be
required to question any action by the Employer or the Plan Administrator or any
Participant nor to determine that such action is properly taken under the Plan.
The Investment Manager's responsibility shall be limited to performance under
the terms of the Plan.
ARTICLE XIX
AMENDMENT OR TERMINATION OF THE PLAN
19.1 AMENDMENT OF PLAN. The Employer shall have the right from time to time to
modify or amend, in whole or in part any or all provisions of the Plan. Such
amendment shall be effected by an instrument in writing, executed on behalf of
the Employer and under its corporate seal, by the President or Vice President
and by the Secretary or Assistant Secretary of the Employer, pursuant to a
resolution of the Board of Directors of the Employer authorizing such amendment.
Upon
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any such modification or amendment, the Plan Administrator shall be furnished a
copy thereof. No amendment shall
(a) either directly or indirectly give the Employer any interest
whatsoever in any funds or property held in Participants' Accounts or permit
such funds or property to be used for or devoted to purposes other than the
exclusive benefit of Participants or their beneficiaries or
(b) either directly or indirectly deprive any Participant of his
vested and nonforfeitable interest as of the time of such amendment or, except
as provided by Treasury regulations, eliminate any optional form of benefit.
If the vesting schedule under Section 1.48 of the Plan is amended to
provide a schedule under which the participant's Vesting Percentage after any
period of service would be less than if the vesting schedule had not been
amended, then each Participant who is employed on the date such amendment is
adopted or made effective (whichever is later) and who has three (3) or more
Years of Service (as defined in Section 2.6(b)) as of the end of the election
period described below may elect to have his Vesting Percentage computed under
the vesting schedule in effect prior to the amendment. Any such election is
irrevocable.
Each Participant eligible to make such an election shall be given written
notice of the availability of the election. The election must be made in
writing and delivered to the Plan Administrator within 60 days after the later
of (i) the Participant's receipt of the notice or (ii) the effective date of the
amendment.
19.2 CONDITIONS OF AMENDMENT. The Employer shall not make any amendment which
would cause the Plan to lose its status as a qualified plan within the meaning
of Section 401(a) of the Code.
19.3 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but
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reserves the right to terminate the Plan at any time by resolution of its Board
of Directors. Upon such termination, the liability of the Employer to make
Employer Contributions hereunder shall terminate. The Plan shall terminate
automatically upon complete discontinuance of Employer Contributions hereunder.
19.4 FULL VESTING. Upon the termination or partial termination of the Plan or
upon complete discontinuance of Employer Contributions, the rights of all
affected Participants in and to the amounts credited to each such Participant's
Account shall be 100 percent (100%) vested and nonforfeitable. Thereupon, each
Participant shall receive a total distribution of his Participant's Account
(including any Forfeitures allocated in accordance with Section 19.5) in
accordance with the terms and conditions of Article IX.
19.5 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
Forfeitures which have not been applied as of such termination to reduce the
Employer Contribution shall be credited on a pro rata basis to the Participant's
Accounts of the then Active Participants in the same manner as the last Employer
Contribution made under the Plan.
19.6 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is subject to the
condition precedent that the Employer's Plan shall be approved and qualified by
the Internal Revenue Service as meeting the requirements of Section 401(a) of
the Code. In the event the Plan initially fails to qualify and the Internal
Revenue Service issues a final ruling that the Employer's Plan fails to so
qualify as of the Effective Date, all liability of the Employer to make further
Employer Contributions hereunder shall cease. The Investment Manager, Plan
Administrator, and any other Named Fiduciary shall be notified immediately by
the Employer, in writing, of such failure to qualify. Upon such notification,
the value of the Participants' Accounts shall be distributed in cash to the
Employer, subject to the terms and conditions of Article IX. The Employer shall
then distribute Salary Reduction Contributions to the Participants with respect
to which the Contributions had been made.
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19.7 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no longer
qualified within the meaning of Section 401(a) of the Code, and if the Employer
shall fail within a reasonable time to make any necessary changes in order that
the Plan shall so qualify, the Participants' Accounts under the Plan shall be
fully vested and nonforfeitable and shall be disposed of in the manner set forth
in Section 19.4 above.
ARTICLE XX
MISCELLANEOUS
20.1 NON-REVERSION. This Plan has been established by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except as
otherwise provided in Sections 19.6 and 20.7, under no circumstances shall any
funds contributed hereunder at any time revert to or be used by the Employer,
nor shall any such funds or assets of any kind be used other than for the
benefit of the Participants or their Beneficiaries.
20.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except when
otherwise indicated by the context, either the masculine or the neuter pronoun
shall be deemed to include the masculine, the feminine, and the neuter, and the
singular shall be deemed to include the plural.
20.3 REFERENCE TO THE CODE AND ERISA. Any reference to any Section of the Code
or ERISA herein or to any other statute or law shall be deemed to include any
successor law of similar import.
20.4 GOVERNING LAW. The Plan shall be governed and construed in accordance with
the laws of the District of Columbia.
20.5 COMPLIANCE WITH THE CODE AND ERISA. This Plan is intended to comply with
all requirements for qualification under the Code and ERISA, and if any
provision hereof is subject to more
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than one interpretation or any term used herein is subject to more than one
construction, such ambiguity shall be resolved in favor of that interpretation
or construction which is consistent with the Plan being so qualified. If any
provision of the Plan is held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions, and the Plan shall be
construed and enforced as if such provision had not been included.
20.6 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that, except in the case of a qualified
domestic relations order, no right or interest of any Participant in the Plan
shall be assignable or transferable in whole or in part, either directly or by
operation of law or otherwise, including, but without limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no
right or interest of any Participant in the Plan shall be liable for or subject
to any obligation or liability of such Participant. The Plan Administrator
shall adopt reasonable procedures to determine the qualified status of domestic
relations orders under Section 414(p) of the Code and to administer
distributions under such qualified orders.
20.7 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this Plan,
(a) in the case of a contribution which is made by the Employer by a mistake of
fact, Section 20.1 shall not prohibit the return of such contribution to the
Employer within one year after the payment of the contribution, and (b) if a
contribution is conditioned upon the deductibility of the contribution under
Section 404 of the then, to the extent the deduction is disallowed, Section 20.1
shall not prohibit the return to the Employer of such contribution (to the
extent disallowed) within one year after the disallowance of the deduction. The
amount which may be returned to the Employer is the excess of (a) the amount
contributed over )b) the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction. Earnings
attributable to the excess contribution may not be returned to the Employer, but
losses attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to
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the mistaken contribution would cause the balance of the individual account of
any Participant to be reduced to less than the balance which would have been in
the account had the mistaken amount not been contributed, then the amount to be
returned to the Employer would have to be limited so as to avoid such reduction.
20.8 IRS DETERMINATION. Notwithstanding anything herein to the contrary, if,
pursuant to an application filed by or on behalf of the Plan, the Commissioner
of Internal Revenue Service or his delegate should determine that the Plan as
amended and restated does not initially qualify as a tax-exempt plan and trust
under Sections 401 and 501-of the Code, and such determination is not contested,
or if contested, is finally upheld, then the Plan shall operate as if it had not
been amended and restated.
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IN WITNESS WHEREOF, the National Corporation for Housing Partnerships,
pursuant to resolutions of its Board of Directors, has caused this Plan to be
executed by its duly authorized officer on this day of , 199
.
NATIONAL CORPORATION FOR
HOUSING PARTNERSHIPS
ATTEST:
---------------------------------------
Name:
Title:
- ----------------------------------
Name:
Secretary/Assistant Secretary
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<PAGE> 81
FIRST AMENDMENT TO
NHP INCORPORATED AMENDED AND RESTATED 401(k) RETIREMENT PLAN
(formerly National Corporation for Housing Partnerships
Amended and Restated 401(k) Retirement Plan)
NHP Incorporated ("NHP") pursuant to the authorization its Board of
Directors, has amended the National Corporation for Housing Partnerships Amended
and Restated 401(k) Retirement Plan ("Plan") effective May 1, 1995 as set forth
below.
WITNESSETH
WHEREAS, National Corporation for Housing Partnerships ("NCHP"), on April
29, 1988, adopted the National Corporation for Housing Partnerships 401(k)
Retirement Plan effective January 1, 1988 ("Original Plan"); and
WHEREAS, the Original Plan has been amended by that (i) certain First
Amendment to National Corporation for Housing Partnerships 401(k) Retirement
Plan adopted on March 17, 1989 but effective as of January 1, 1988 (the "First
Amendment"), (ii) certain Second Amendment to National Corporation for Housing
Partnerships 401(k) Retirement Plan adopted on November 30, 1989 but effective
as of January 1, 1988 (the "Second Amendment"), (iii) certain Third Amendment to
National Corporation for Housing Partnerships 401(k) Retirement Plan adopted on
November 30, 1989 but effective as of January 1, 1989 (the "Third Amendment")
and (iv) certain Fourth Amendment to National Corporation for Housing
Partnerships 401(k) Retirement Plan adopted on February 26, 1993 but generally
effective as of January 1, 1993 (the "Fourth Amendment") (The Original Plan and
the First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment are sometimes hereinafter referred to as the "Off-Site Plan"); and
WHEREAS, NCHP, on November 29, 1989, adopted the National Corporation for
Housing Partnerships Site Employees 401(k) Retirement Plan effective January 1,
1990 ("Original Site Plan"); and
WHEREAS, the Original Site Plan has been amended by that (i) certain First
Amendment to National Corporation for
<PAGE> 82
Housing Partnerships Site Employee 401(k) Retirement Plan adopted on December
31, 1992 but effective as of June 1, 1992 (the "First Amendment") and (ii)
certain Second Amendment to National Corporation for Housing Partnerships Site
Employees 401(k) Retirement Plan adopted on February 26, 1993 but generally
effective as of January 1, 1993 (the "Second Amendment") (The Original Site Plan
and the First Amendment and the Second Amendment are sometimes hereinafter
referred to as the "Site Plan"); and
WHEREAS, effective as of January 1, 1995, NCHP merged the Site Plan into
the Off-Site Plan and amended and restated the Off-Site Plan to reflect such
merge and to modify the Off-Site Plan to comply with the changes required by the
Omnibus Budget Reconciliation Act of 1993 and changed the name of the former
Off-Site Plan to the National Corporation for Housing Partnerships Amended and
Restated 401(k) Retirement Plan; and
WHEREAS, NHP is the parent of NCHP; and
WHEREAS, pursuant to a reorganization of NHP and its affiliates, NCHP, as
part of that reorganization, has transferred all its employees to NHP, and these
employees will continue to provide the same property management services and
certain other service-related activities that they performed as employees of
NCHP, from the same locations and using the same resources as before the
transfer; and
WHEREAS, pursuant to Section 1.18 of Article I of the Plan, NHP elects to
become a successor organization to NCHP and elects to continue the Plan,
NOW, THEREFORE, the Plan shall be and hereby is amended as follows:
1. Pursuant to Section 1.18 of Article I of the Plan, NHP elects to
become a successor organization to NCHP and elects to continue the Plan.
2. Hereinafter, all references to NCHP shall be deemed to refer to NHP
and the Plan shall be known as NHP Incorporated Amended and Restated 401(k)
Retirement Plan.
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3. Section 1.18 of Article I of the Plan is deleted and a new Section
1.18 is added to Article I of the Plan to read as follows:
1.18 EMPLOYER. The term Employer means NHP Incorporated and any successor
organization thereto which elects to continue the Plan.
4. In all other respects the Plan is confirmed and ratified as amended
hereby.
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IN WITNESS WHEREOF, NHP Incorporated, pursuant to the authorization of its
Board of Directors, has caused this amendment to be executed by its duly
authorized officer on this day of , 199 .
NHP INCORPORATED
ATTEST:
------------------------------------
Name:
Title:
- ----------------------------
Name:
Secretary/Assistant Secretary
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EXHIBIT 5
[WILMER, CUTLER & PICKERING LETTERHEAD]
September 13, 1996
NHP Incorporated
8065 Leesburg Pike, Suite 400
Vienna, VA 22182
Re: NHP Incorporated Amended and Restated 401(k) Retirement Plan
Ladies and Gentlemen:
We have acted as counsel to NHP Incorporated, a Delaware corporation (the
"Company"), in connection with the preparation by the Company of a Registration
Statement on Form S-8 (the "Registration Statement") under the Securities Act of
1933, as amended, for the registration of interests ("Plan Interests") in the
NHP Incorporated Amended and Restated 401(k) Retirement Plan, and 500,000 shares
of Common Stock of the Company to be offered to employees pursuant to the Plan
("Common Stock").
For purposes of this opinion, we have examined copies of the following
documents:
1. An executed copy of the Form S-8;
2. The Plan, as last amended on February 21, 1996 as certified by the
Assistant Secretary of the Company on September 13, 1996, as then being
complete, accurate and in effect.
3. Documents disclosing material information to Plan participants
prepared in connection with the Form S-8;
4. The Restated Certificate of Incorporation and Bylaws of the Company as
certified by the Assistant Secretary of the Company on September 13, 1996, as
then being complete, accurate and in effect;
5. A copy of a Resolution of the Board of Directors dated January 25,
1988 as certified by the Assistant Secretary of the Company on September 13,
1996 as then being complete, accurate and in effect;
<PAGE> 2
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, and the conformity
with the original documents of all documents submitted to us as certified,
telecopied, photostatic, or reproduced copies. We have assumed the accuracy of
the foregoing certifications, on which we are relying, and have made no
independent investigation thereof.
We are members of the Bar of the District of Columbia and the State of
Maryland and do not hold ourselves out as being experts in the law of any other
state. This opinion is limited to the laws of the United States and the General
Corporation Law of Delaware. Although we do not hold ourselves out as being
experts in the laws of Delaware, we have made an independent investigation of
such laws to the extent necessary to render our opinion. Our opinion is
rendered only with respect to the laws and the rules, regulations and orders
thereunder that are currently in effect.
Based upon, subject to, and limited by the foregoing, we are of the
opinion that,
1. assuming, with respect to the shares of Common Stock issued after
the date hereof, (i) the receipt of proper consideration for the issuance
thereof in excess of the par value thereof, (ii) the availability of a
sufficient number of shares of Common Stock authorized by the Company's
Certificate of Incorporation then in effect, (iii) compliance with the terms of
any agreement entered into in connection with any options or shares of Common
Stock issued or allocated in connection with the Plan, and (iv) no change occurs
in the applicable law or the pertinent facts, shares of Common stock allocable
to Participants' accounts under the Plan will be legally issued, fully paid and
non-assessable shares of Common Stock, and
2. when issued by the Company in the manner provided in the Plan,
the Plan Interests will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject, as to
enforcement, (i) to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, and (ii) to general principles of equity, whether such
enforcement is considered in a proceeding in equity or at law.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the filing of the Form S-8 on September
13, 1996, and should not be quoted in whole or in part or otherwise be referred
to, nor otherwise be filed with or furnished to any governmental agency or other
person or entity, without our express prior written consent.
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<PAGE> 3
We hereby consent to the filing of this opinion as an exhibit to the
Form S-8. Nothing herein shall be construed to cause us to be considered
"experts" within the meaning of Section 11 of the Securities Act of 1933, as
amended.
Sincerely,
WILMER, CUTLER & PICKERING
By: /s/ Richard W. Cass
----------------------------
- ----
Richard W. Cass, a partner
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<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 26, 1996
(except for the matters discussed in Note 13 to the consolidated financial
statements, as to which the date is March 21, 1996) included in NHP
Incorporated's Form 10-K for the year ended December 31, 1995 and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
September 11, 1996
Washington, D.C.
