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As filed with the Securities and Exchange Commission on January 4, 2000
Registration No. 333-___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
TECHNITROL, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-1292472
- -------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1210 Northbrook Drive
Suite 385
Trevose, PA 19053
(215) 355-2900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PULSE ENGINEERING, INC. 401(k) PLAN, AS AMENDED
(Full title of the Plan)
Drew A. Moyer
Corporate Controller and Secretary
1210 Northbrook Drive, Suite 385
Trevose, PA 19053
(215) 355-2900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------------
Copies to:
Ann Marie Janus, Esquire
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
--------------------------
<TABLE>
<CAPTION>
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CALCULATION OF REGISTRATION FEE
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Amount to be Proposed maximum Proposed maximum Amount of
Title of securities to be registered registered(1) offering price per Aggregate offering registration
Share Price (3) fee
- ----------------------------------------- --------------- ------------------- ---- -------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock, $.125 par value per share 200,000 $44.00 (2) $8,000,000 $2,324
shares
- ----------------------------------------- --------------- ------------------- ---- -------------------- --------------
</TABLE>
(1) Such additional, indeterminable number of shares that may be issuable by
reason of the anti-dilution provisions of the Pulse Engineering, Inc.
401(k) Plan, as amended (the "Plan") are hereby registered. In addition,
pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interests to be offered or
sold pursuant to the Plan.
(2) Pursuant to Rule 457(h)(1) and (c), the average of the high and low prices
per share of the Common Stock reported on the New York Stock Exchange on
January 3, 2000 has been used to determine the registration fee.
(3) Estimated solely for the purpose of determining the registration fee.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
As used in this Registration Statement, unless the context
otherwise requires, the terms "Technitrol" and the "Company" mean Technitrol,
Inc. and its subsidiaries and the term the "Plan" shall mean the Pulse
Engineering, Inc. 401(k) Plan, as amended.
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents, previously filed by the Company or
the Plan with the U.S. Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
are hereby incorporated by reference in this Registration Statement, except as
superseded or modified herein:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
(b) all other reports filed by the Company pursuant to Section 13(a) or
15(d) of the 1934 Act since the end of the fiscal year covered by the annual
report referred to above; and
(c) the description of the Company's common stock, par value $.125 per
share ("Common Stock"), contained in the Company's Registration Statement on
Form 8-A/A dated April 10, 1998, including any amendments or reports filed for
the purpose of updating such description.
All documents filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act on or after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be 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.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
Article VII of the Company's Bylaws generally provides for the
indemnification of officers, directors and third parties acting on behalf of the
Company if such person acted in good faith and in a manner reasonably believed
to be in and not opposed to the best interest of the Company, and, with respect
to any criminal action or proceeding, the indemnified party had no reasonable
cause to believe his conduct was unlawful.
Section 518 of the Pennsylvania Business Corporation Law
permits a corporation to include in its bylaws, and in agreements between the
corporation and its directors and officers, provisions expanding the scope of
indemnification beyond that specifically provided by the current law; provided;
however, indemnification shall not be permitted in any case where the act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
In addition, the Company maintains directors and officers
insurance under which its directors and officers are insured against certain
liabilities that may be incurred by them in their capacities as such.
<PAGE>
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
---------
Pulse will submit or has submitted the Plan and any amendments thereto
to the Internal Revenue Service ("IRS") in a timely manner and has made or will
make all changes required by the IRS in order to qualify the Plan under Section
401 of the Internal Revenue Code of 1986, as amended.
Exhibits:
4.1 Pulse Engineering, Inc. 401(k) Plan, as amended.
23.1 Consent of Certified Public Accountants.
24.1 Power of Attorney (included in signature page on page
II-4 herein).
Item 9. Undertakings.
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(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended ("1933 Act");
(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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, That paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to section 13 or section
15(d) of the 1934 Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
1933 Act, 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
II-2
<PAGE>
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) that is incorporated by reference in
the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the 1933 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 1933 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant Technitrol, Inc. 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 Trevose, Pennsylvania, on December
30, 1999.
TECHNITROL, INC.
By: /s/ James M. Papada, III
------------------------
James M. Papada, III
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Each person whose signature appears below constitutes and
appoints Drew A. Moyer and James M. Papada, III, jointly and severally, his
attorneys-in-fact, each with the power of substitution, for him in any and all
capacities to sign any amendments to this Registration Statement on Form S-8,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Name Title Date
- ---- ----- ----
/s/ James M. Papada, III Chairman, President and December 30, 1999
- ------------------------ Chief Executive Officer
James M. Papada, III (Principal Executive Officer)
/s/ Albert Thorp, III Vice President - Finance December 30, 1999
- ------------------------ and Chief Financial Officer
Albert Thorp, III (Principal Financial Officer)
/s/ Drew A. Moyer Corporate Controller and December 30, 1999
- ------------------------ Secretary
Drew A. Moyer (Principal Accounting Officer)
Director December 30, 1999
- ------------------------
Roy E. Hock
/s/ J. Barton Harrison Director December 30, 1999
- ------------------------
J. Barton Harrison
/s/ Graham Humes Director December 30, 1999
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Graham Humes
/s/ Edward M. Mazze Director December 30, 1999
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Edward M. Mazze
/s/ Stanley E. Basara Director December 30, 1999
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Stanley E. Basara
/s/ John E. Burrows, Jr. Director December 30, 1999
- ------------------------
John E. Burrows, Jr.
/s/ Rajiv L. Gupta Director December 30, 1999
- ------------------------
Rajiv L. Gupta
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of
1933, the trustees (or other persons who administer the employee benefit plan)
have duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in San Diego, California, on December
30, 1999.
PULSE ENGINEERING, INC. 401(k) PLAN
By: Pulse Engineering, Inc., as Plan Administrator
By: /s/ Joel A. Miller
------------------
Joel A. Miller
Vice President, Human Resources
EXHIBIT INDEX
Exhibit # Description
4.1 Pulse Engineering, Inc. 401(k) Plan, as amended.
23.1 Consent of Certified Public Accountants.
24.1 Power of Attorney (included in signature page on page II-4
herein).
II-5
EXHIBIT 4.1
ADOPTION AGREEMENT - ARTICLE 1
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 Plan Information:
(a) Name of Plan: This is the Pulse Engineering, Inc. 401(k) Plan
(the "Plan").
(b) Type of Plan:
(1) [X] 401(k) and Profit Sharing
(2) [ ] Profit Sharing Only
(3) [ ] 401(k) Only
(c) Name of Plan Administrator, if not the Employer:
Name:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal process
for the Plan.
(d) Limitation Year (check one):
(1) [ ] Calendar Year
(2) [X] Plan Year
(3) [ ] Other:
(e) Three-Digit Plan Number: 001
(f) Plan Year End (month/day): December 31
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(g) Plan Status (check one):
(1) [ ] Effective Date of new Plan:
(2) [X] Amendment Effective Date: February 1, 1999 This is
(check one):
(A) [X] an amendment of The CORPORATE plan for
Retirement [ ] Adoption Agreement previously
executed by the Employer; or
(B) [ ] a conversion from another plan document
into The CORPORATE plan for Retirement [ ].
The original Effective Date of the Plan: July 1, 1986
The substantive provisions of the Plan shall apply prior to the
Effective Date to the extent required by the Tax Reform Act of
1986 or other applicable laws.
1.02 Employer:
(a) The Employer is: Pulse Engineering, Inc.
Address: 12220 World Trade Drive
San Diego, CA 92128
Contact's Name: Mr. Patrick McCready
Telephone Number: (619) 674-8100
(1) Employer's Tax Identification Number: 23-2808999
(2) Business form of Employer (check one):
(A) [X] Corporation
(B) [ ] Sole Proprietor or Partnership
(C) [ ] Subchapter S Corporation
(D) [ ] Governmental
(E) [ ] Tax-exempt Organization
(F) [ ] Rural Electric Cooperative
(3) Employer's fiscal year end: December 31
(4) Date business commenced: 1955
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<PAGE>
(b) The term "Employer" includes the following Related Employer(s) (as
defined in Section 2.01(a)(26)):
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
1.03 Coverage:
(a) All Employees who meet the conditions specified below will be
eligible to participate in the Plan:
(1) Service requirement (check one):
(A) [X] no service requirement for Employees who are
employed on a full-time basis (i.e., 35 or
more hours per week)
(B) [ ] three consecutive months of service
(no minimum number Hours of Service can be
required).
(C) [ ] six consecutive months of service
(no minimum number Hours of Service can be
required).
(D) [X] one Year of Service.
(1,000 Hours of Service is required during
the Eligibility Computation Period.) for
Employees who are not employed on a
full-time basis (i.e., less than 35 hours
per week)
(2) Age requirement: (check one)
(A) [X] no age requirement.
(B) [ ] must have attained age (not to exceed 21).
(3) The class of Employees eligible to participate in the Plan
(check one):
(A) [ ] includes all Employees of the Employer.
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<PAGE>
(B) [X] includes all Employees of the Employer
except for (check the appropriate box(es)):
(i) [ ] Employees covered by a collective
bargaining agreement.
(ii) [ ] Highly Compensated Employees as defined in
the Code Section 414(q).
(iii) [ ] Leased Employees as defined in Section
2.01(a)(18).
(iv) [X] Nonresident aliens who do not receive any
earned income from the Employer which
constitutes United States source income.
(v) [X] Other: Union employees who have retirement
benefits pursuant to a collective
bargaining agreement.
Note: No exclusion in this section may create a discriminatory
class of Employees. An Employer's Plan must still pass the
Internal Revenue Code coverage and participation requirements if
one or more of the above groups of Employees have been excluded
from the Plan.
(b) The Entry Date(s) shall be (check one):
(1) [ ] the first day of each Plan Year (do not select if
Section 1.03(a)(1)(D) is elected or if there is an
age requirement of greater than 20 1/2 in Section
1.03(a)(2)(B)).
(2) [ ] the first day of each Plan Year and the date six months
later.
(3) [X] the first day of each Plan Year and the first day of the
fourth, seventh, and tenth months.
(4) [ ] the first day of each month.
(c) Date of Initial Participation - An Employee will become a
Participant unless excluded by Section 1.03(a)(3) above on the
Entry Date immediately following the date the Employee completes
the service and age requirement(s) in Section 1.03(a), if any,
except (check one):
(1) [ ] No exceptions.
(2) [ ] Employees employed on the Effective Date on
Section 1.01(g) will become Participants on that date.
(3) [X] Employees who meet the age and service requirement(s) of
Section 1.03(a) on the Effective Date in Section 1.01(g)
will become Participants on that date.
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<PAGE>
1.04 Compensation:
(a) For purposes of determining contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7), but
excluding (check the appropriate box(es)):
(1) [ ] Overtime Pay.
(2) [ ] Bonuses.
(3) [ ] Commissions.
(4) [ ] The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer to the
extent such value is includable in the Employee's
taxable income.
Note: These exclusions shall not apply for purposes of the
"Top-Heavy" requirements in Section 9.03 or for allocating
Discretionary Employer Contributions if an Integrated Formula is
elected in Section 1.05(a)(2).
(5) [X] No exclusions.
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee first becomes
a Participant shall be determined based on the Employee's
Compensation (check one):
(1) [X] For the entire Plan Year.
(2) [ ] For the portion of the Plan Year in which the Employee
is eligible to participate in the Plan.
1.05 Contributions:
(a) [ ] Employer Contributions:
(1) [ ] Fixed Formula - Nonintegrated Formula (check (A) or (B)
and fill in the blank):
(A) [ ] Fixed Percentage Employer Contribution:
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For each Plan Year, the Employer will contribute
for each eligible Participant an amount equal
to _____% (not to exceed 15%) of such
Participant's Compensation.
(B) [ ] Fixed Flat Dollar Employer Contribution:
For each Plan Year, the Employer will contribute
for each eligible Participant an amount equal
to $______.
(2) [ ] Discretionary Formula
The Employer may decide each Plan Year whether to make a
discretionary Employer contribution on behalf of eligible
Participants in accordance with Section 4.06. Such contributions
shall be allocated to eligible Participants based upon the
following (check (A) or (B)):
(A) [ ] Nonintegrated Allocation Formula:
In the ratio that each eligible Participant's
Compensation bears to the total Compensation paid
to all eligible Participants for the Plan Year.
(B) [ ] Integrated Allocation Formula:
In accordance with Section 4.06.
Note: An Employer who maintains any other plan that provides for
Social Security Integration (permitted disparity) may not elect
(2)(B).
(3) Eligibility Requirement(s)
A Participant shall be entitled to Employer contributions for a
Plan Year under this Subsection (a) if the Participant satisfies
the following requirement(s) (Check the appropriate box(ex) -
Options (B) and (C) may not be elected together):
(A) [ ] is employed by the Employer on the last day of the
Plan Year.
(B) [ ] earns at least 500 Hours of Service during the Plan
Year.
(C) [ ] earns at least 1,000 Hours of Service during the
Plan Year.
(D) [ ] no requirements.
Note: If option (A), (B), or (C) above is selected, then Employer
contributions can only be funded by the Employer after Plan Year
end. Employer contributions funded during the Plan Year shall not
be subject to the eligibility requirements of this section
1.05(a)(3).
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<PAGE>
(b) |X| Deferral Contributions
(1) Regular Contributions
The Employer shall make a Deferral Contribution in accordance with
Section 4.01 on behalf of each Participant who has an executed
salary reduction agreement in effect with the Employer for the
payroll period in question, not to exceed 15 % (no more than 15%)
-----
of Compensation for that period.
(A) A Participant may increase or decrease, on a prospective
basis, his salary reduction agreement percentage (check one):
(i) [ ] As of the beginning of each payroll period.
(ii) [ ] As of the first day of each month.
(iii) [ ] As of the next Entry Date.
(iv) [X] (Specify, but must be at least once per Plan
Year.)
January 1
--------------------------------------------
July 1
--------------------------------------------
(B) A Participant may revoke, on a prospective basis, a salary
reduction agreement at any time upon proper notice to the
Administrator but in such case may not file a new salary
reduction agreement until (check one):
(i) [ ] The first day of the next Plan Year.
(ii) [X] Any subsequent Plan Entry Date.
(iii) [ ] (Specify, but must be at least once per Plan
Year.)
--------------------------------------------
--------------------------------------------
(2) [ ] Catch-Up Contributions
The Employer may allow Participants upon proper notice and
approval to enter into a special salary reduction agreement to
make additional Deferral Contributions in an amount up to 100% of
their Compensation for the payroll period(s) in the final month of
the Plan Year.
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<PAGE>
(3) [ ] Bonus Contributions
The Employer may allow Participants upon proper notice and
approval to enter into a special salary reduction agreement to
make Deferral Contributions in an amount up to 100% of any
Employer-paid cash bonuses made for such Participants during the
Plan Year. The Compensation definition elected by the Employer in
Section 1.04(a) must include bonuses if bonus contributions are
permitted.
Note: A Participant's contributions under (2) and/or (3) may not
cause the Participant to exceed the percentage limit specified by
the Employer in (1) after the Plan Year. The Employer has the
right to restrict a Participant's right to make Deferral
Contributions if they will adversely affect the Plan's ability to
pass the actual deferral percentage test and/or the actual
contribution percentage test.
(4) [X] Qualified Discretionary Contributions
The Employer may contribute an amount which it designates as a
Qualified Discretionary Contribution to be included in the actual
deferral percentage or actual contribution percentage test.
Qualified Discretionary Contributions shall be allocated to
Non-highly Compensated Employees (check one):
(A) [X] in the ratio which each such Participant's
Compensation for the Plan Year bears to the total
of all such Participants' Compensation for the
Plan Year.
(B) [ ] as a flat dollar amount for each such Participant
for the Plan Year.
* (c) [X] Matching Contributions (only if Section 1.05(b) is checked)
(1) The Employer shall make a Matching Contribution on behalf of
each Participant in an amount equal to the following percentage of
a Participant's Deferral Contributions during the Plan Year (check
one):
(A) [ ] 50%
(B) [X] 100%
(C) [ ] _____________ %
(D) [ ] (Tiered Match) ______________ % of the first
_____________ % of the
* Amendment to Section 1.05(c)(3)(A) is effective September 1, 1999
-8-
<PAGE>
Participant's Compensation contributed to the
Plan.
_____________% of the next _________________% of
the Participant's Compensation contributed to
the Plan.
_____________% of the next _________________% of
the Participant's Compensation contributed to
the Plan.
Note: The percentages specified above for Matching Contributions
may not increase as the percentage of Compensation contributed
increases.
(E) [ ] The percentage declared for the year, if any,
by a Board of Directors' Resolution or by a
Letter of Intent for a Sole Proprietor or
Partnership.
(2) [ ] The Employer may at Plan Year end make an additional
Matching Contribution equal to a percentage declared by the
Employer through a Board of Directors' Resolution or by a Letter
of Intent for a Sole Proprietor or Partnership of the Deferral
Contributions made by each Participant during the Plan Year (only
if an option is checked under Section 105(c)(1)).
* (3) [X] Matching Contribution Limits (check the appropriate box):
(A) [X] Deferral Contributions in excess of 6 % of
---
the Participant's Compensation for the period in
question shall not be considered for Matching
Contributions.
Note: If the Employer elects a percentage limit in (A) above and
requests the Trustee to account separately for matched and
unmatched Deferral Contributions, the Matching Contributions
allocated to each Participant must be computed, and the percentage
limit applied, based upon each payroll period.
(B) [ ] Matching Contributions for each Participant for
each Plan Year shall be limited to $_____________.
(4) Eligibility Requirement(s)
A Participant who makes Deferral Contributions during the Plan
Year under Section 1.05(b) shall be entitled to Matching
Contributions for that Plan Year if the Participant
* Amendment to Section 1.05(c)(3)(A) is effective September 1, 1999
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<PAGE>
satisfies the following requirement(s) (Check the appropriate
box(es). Options (B) and (C) may not be elected together):
(A) [ ] Is employed by the Employer on the last day of the
Plan Year.
(B) [ ] Earns at least 500 Hours of Service during the Plan
Year.
(C) [ ] Earns at least 1,000 Hours of Service during the
Plan Year.
(D) [ ] Is not a Highly Compensated Employee for the Plan
Year.
(E) [ ] Is not a Partner of the Employer, if the Employer
is a Partnership.
(F) [X] No requirements.
Note: If option (A), (B), or (C) above is selected, then Matching
Contributions can only be funded by the Employer after the Plan
Year ends. Any Matching Contribution funded before Plan Year end
shall not be subject to the eligibility requirements of this
Section 1.05(c)(4). If option (A), (B), or (C) is adopted during a
Plan Year, such option shall not become effective until the first
day of the next Plan Year.
(d) [ ] Employee After-Tax Contributions (check one):
(1) [ ] Future Contributions
Participants may make voluntary non-deductible Employee
contributions pursuant to Section 4.09 of the Plan. This option
may only be elected if the Employer has elected to permit Deferral
Contributions under Section 1.05(b). Matching Contributions by the
Employer are not allowed on any voluntary non-deductible Employee
contributions. Withdrawals are limited to one per year unless
Employee contributions were allowed under a previous plan document
which authorized more frequent withdrawals.
(2) [X] Frozen Contributions
Participants may not make voluntary non-deductible Employee
contributions, but the Employer does maintain frozen Participant
voluntary non-deductible Employee Contribution Accounts.
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1.06 Retirement Age(s):
(a) [X] The Normal Retirement Age under the Plan is (check one):
(1) [X] age 65.
(2) [ ] age (specify between 55 and 64).
---------
(3) [ ] later of the age ____________ (cannot exceed 65) or the
fifth anniversary of the Participant's Employment
Commencement Date.
(b) [ ] The Early Retirement Age is the first day of the month
after the Participant attains age (specify 55 or greater)
and completes Years of Service for Vesting.
(c) [X] A Participant is eligible for Disability Retirement if
he/she (check the appropriate box(es)):
(1) [X] satisfies the requirements for benefits under the
Employer's Long-Term Disability Plan.
(2) [ ] satisfies the requirements for Social Security
disability benefits.
(3) [ ] is determined to be disabled by a physician approved by
the Employer.
1.07 Vesting Schedule: See Addendum 1A
(a) The Participant's vested percentage in Employer contributions
(Fixed or Discretionary) elected in Section 1.05(a) and/or
Matching Contributions elected in Section 1.05(c) shall be based
upon the schedule(s) selected below, except with respect to any
Plan Year during which the Plan is Top-Heavy. The schedule elected
in Section 1.12(d) shall automatically apply for a Top-Heavy Plan
Year and all Plan Years thereafter unless the Employer has already
elected a more favorable Vesting Schedule below.
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<TABLE>
<CAPTION>
(1) Employer Contributions (2) Matching Contributions
(check one): (check one):
<S> <C> <C> <C> <C> <C>
(A) [ ] N/A - No Employer Contributions (A) [ ] N/A - No Matching Contributions
(B) [X] 100% Vesting immediately (B) [X] 100% Vesting immediately
(C) [ ] 3-year cliff (see C below) (C) [ ] 3-year cliff (see C below)
(D) [ ] 5-year cliff (see D below) (D) [ ] 5-year cliff (see D below)
(E) [ ] 6-year graduated (see E below) (E) [ ] 6-year graduated (see E below)
(F) [ ] 7-year graduated (see F below) (F) [ ] 7-year graduated (see F below)
(G) [ ] Other vesting (complete G1 below) (G) [ ] Other vesting (complete G2 below)
</TABLE>
VESTING SCHEDULE
- -----------------------------------------------------------------------
Years of
Service for C D E F G1 G2
Vesting
- -----------------------------------------------------------------------
0 0% 0% 0% 0% ___ ___
1 0% 0% 0% 0% ___ ___
2 0% 0% 20% 0% ___ ___
3 100% 0% 40% 20% ___ ___
4 100% 0% 60% 40% ___ ___
5 100% 100% 80% 60% ___ ___
6 100% 100% 100% 80% ___ ___
7 100% 100% 100% 100% 100% 100%
- -----------------------------------------------------------------------
Note: A schedule elected under G1 or G2 above must be at least as favorable as
one of schedules in C, D, E, or F above.
(b) [ ] Years of Service for Vesting shall exclude (check one):
(1) [ ] for new plans service prior to the Effective Date as
defined in Section 1.01(g)(1).
(2) [ ] for existing plans converting from another plan
document service prior to the original Effective Date
as defined in Section 1.01(g)(2).
-12-
<PAGE>
Pulse Engineering, Inc. 401(k) Plan
Addendum No. 1A to the
Fidelity Profit Sharing/401(k) Plan
Non-Standardized Adoption Agreement 002
Basic Plan No. 07
Employer contributions and matching contributions to the Cash
or Deferred Profit Sharing Plan for Employees of GTI
Corporation and its Affiliates, which has been merged into the
Plan as of February 1, 1999, shall be subject to the following
vesting schedule:
Years of
Service for
Vesting Vesting Schedule
------- ----------------
0 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
-13-
<PAGE>
1.08 Predecessor Employer Service:
Service for purposes of eligibility in Section 1.03(a)(1) and vesting in
Section 1.07(a) of this Plan shall include service with the following
employer(s):
(a) Xircom, Inc. (see Addendum No. 2)
(b) Technitrol, Inc.
(c) GTI Corporation and Valor Electronics, Inc., including all service
credited under the Cash or Deferred Profit Sharing Plan for Employees
of GTI Corporation and its Affiliates.
(d)
1.09 Participant Loans:
Participant loans (check (a) or (b)):
(a) [X] will be allowed in accordance with Section 7.09, subject to
a $1,000 minimum amount, and will be granted (check (1)
or (2)):
(1) [ ] for any purpose.
(2) [ ] for hardship withdrawal (as defined in Section 7.10)
purposes only:
(3) [X] for the following purposes: education, home
improvement or purchase, medical or hardship or any
other purpose approved by the Pulse Engineering, Inc.
401(k) Administrative Committee
(b) [ ] will not be allowed.
1.10 Hardship Withdrawals:
Participant withdrawals for hardship prior to termination of employment
(check one):
(a) [X] will be allowed in accordance with Section 7.10, subject to
a $1,000 minimum amount.
(b) [ ] will not be allowed.
-14-
<PAGE>
Pulse Engineering, Inc. 401(k) Plan
Addendum No. 2 to the
Fidelity Profit Sharing/401(k) Plan
Non-Standardized Adoption Agreement 002
Basic Plan No. 07
Section 1.08 - Predecessor Employer Service
-------------------------------------------
A Participant's service with Technitrol, Inc., Xircom, Inc., GTI
Corporation and Valor Electronics (including service credited under the
Cash or Deferred Profit Sharing Plan of GTI Corporation and its Affiliates)
shall be included for purposes of sharing in Matching Contributions
described in Section 1.05(c)(1).
-15-
<PAGE>
1.11 Distributions:
(a) Subject to Articles 7 and 8 and (b) below, distributions under the
Plan will be paid (check the appropriate box(es)):
(1) [X] as a lump sum
(2) [ ] under a systematic withdrawal plan (installments).
(b) [ ] Check if a Participant will be entitled to receive a
distribution of all or any portion of the following Accounts
without terminating employment upon attainment of age 59 1/2
(check one):
(1) [ ] Deferral Contribution Account.
(2) [X] All Accounts.
(c) [X] Check if the Plan was converted (by Plan amendment) from
another defined contribution plan, and the benefits were payable
as (check the appropriate box(es)):
(1) [X] a form of single or joint and survivor life annuity.
(2) [ ] an in-service withdrawal of vested Employer
contributions maintained in a Participant's Account
(check (A) and/or (B)):
(A) [ ] for at least ________ (24 or more) months.
(B) [ ] after the Participant has at least 60 months of
participation.
(3) [X] another distribution option that is a "protected benefit"
under Section 411(d)(6) of the Internal Revenue Code. Please
attach a separate page identifying the distribution option(s).
These additional forms of benefit may be provided for such plans
under Articles 7 or 8.
Note: Under Federal Law, distributions to Participants must
generally begin no later than April 1, following the year in which
the Participant attains age 70 1/2.
-16-
<PAGE>
Pulse Engineering, Inc. 401(k) Plan
Addendum No. 3 to the
Fidelity Profit Sharing/401(k) Plan
Non-Standardized Adoption Agreement 002
Basic Plan No. 07
Section 1.11(c)(3) - Protected Benefit Options
----------------------------------------------
The following distribution options shall be made available under
the Plan with respect to the accounts of Participants that were transferred to
the Plan, effective as of February 1, 1999, from the Cash or Deferred Profit
Sharing Plan for Employees of GTI Corporation and its Affiliates:
1. single life annuity;
2. period certain and life annuity (5, 10 or 15 years);
3. joint and survivor annuity (with 50% or 100% continuation);
4. full cash refund annuity;
5. annual installments over a period of five years;
6. after-tax contributions and earnings thereon can be
withdrawn at any time, but in no event less than
$500. If the Participant's total after-tax
contribution account is less than $500, he may
withdraw the total.
-17-
<PAGE>
1.12 Top-Heavy Status:
(a) The Plan shall be subject to the Top-Heavy Plan requirements of Article
9 (check one):
(1) [ ] for each Plan Year.
(2) [X] for each Plan Year, if any, for which the Plan is
Top-Heavy as defined in Section 9.02.
(3) [ ] Not applicable. (This option is available for
plans covering only employees subject to a collective
bargaining agreement and there are no Employer or
Matching Contributions elected in Section 1.05.)
(b) In determining Top-Heavy status, if necessary, for an Employer
with at least one defined benefit plan, the following assumptions
shall apply:
(1) [X] Interest rate: 7 1/2% per annum.
(2) [ ] Mortality table: 1983 GAM Table
(3) [ ] Not applicable.
(c) In the event that the Plan is treated as Top-Heavy for a Plan
Year, each Non-Key Employee shall receive an Employer contribution
of at least 3 (3, 4, 5 or 7 1/2)% of Compensation for the Plan
Year in accordance with Section 9.03 (check one):
(1) [ ] under this Plan in any event.
(2) [X] under this Plan only if the Participant is not
entitled to such contribution under another qualified
plan of the Employer.
(3) [ ] Not applicable. (This option is available for
plans covering only Employees subject to a collective
bargaining agreement and there are no Employer or
Matching Contributions elected in Section 1.05.)
Note: Such minimum Employer contribution may be less than the
percentage indicated in (c) above to the extent provided in
Section 9.03(a).
-18-
<PAGE>
(d) In the event that the Plan is treated as Top-Heavy for a Plan
Year, the following Vesting Schedule shall apply instead of the
schedule(s) elected in Section 1.07(a) for such Plan Year and each
Plan Year thereafter (check one):
(1) [X] 100% vested after 0 (not in excess of 3) Years of
Service for Vesting.
(2) [ ] Years of Service Vesting Percentage Must be at
Least
0 0%
-----------
1 0%
-----------
2 20%
-----------
3 40%
-----------
4 60%
-----------
5 80%
-----------
6 100%
-----------
Note: If the schedule(s) elected in Section 1.07(a) is(are) more
favorable in all cases than the schedule elected in (d) above,
then the schedule(s) in Section 1.07(a) will continue to apply
even in Plan Years in which the Plan is Top-Heavy.
1.13 Two or More Plans
- - Code Section 415 limitation on annual additions:
If the Employer maintains or ever maintained another qualified
plan in which any Participant in this Plan is (or was) a
participant or could become a participant, the Employer must
complete this section. The Employer must also complete this
section if it maintains a welfare benefit fund, as defined in
Section 419(c) of the Code, or an individual medical account, as
defined in Section 415(1)(2) of the Code, under which amounts are
treated as Annual Additions with respect to any Participant in
this Plan.
(a) If the Employer maintains, or maintained, any other defined
contribution plan which is not a Master or Prototype Plan, Annual
Additions for any Limitation Year to this Plan will be limited
(check one):
-20-
<PAGE>
(1) [X] in accordance with Section 5.03 of this Plan.
(2) [ ] in accordance with another method set forth on an
attached separate sheet.
(3) [ ] Not applicable.
(b) If the Employer maintains, or maintained, any defined benefit
plan(s), the sum of the Defined Contribution Fraction and Defined
Benefit Fraction for a Limitation year may not exceed the
limitation specified in Code Section 415(c), modified by section
416(h)(1) of the Code. This combined plan limit will be met as
follows (check one):
(1) [X] Annual Additions to this Plan are limited so that the
sum of the Defined Contribution Fraction and the
Defined Benefit Fraction does not exceed 1.0.
(2) [ ] another method of limited Annual Additions or
reducing projected annual benefits is set forth on an
attached scheduled.
(3) [ ] Not applicable.
1.14 Establishment of Trust and Investment Decisions:
(a) Investment Directions
Participant Accounts will be invested (check one):
(1) [ ] in accordance with investment directions provided
to the Trustee by the Employer for allocating all
Participant Accounts among the options listed in (b)
below.
(2) [X] in accordance with investment directions provided
to the Trustee by each Participant for allocating his
entire Account among the options listed in (b) below.
(3) [ ] in accordance with investment directions provided
to the Trustee by each Participant for all
contribution sources in a Participant's Account
except the following sources shall be invested as
directed by the Employer (check (a) and/or (B)):
(A) [ ] Fixed or Discretionary Employer contributions;
(B) [ ] Employer Matching Contributions
-20-
<PAGE>
The Employer must direct the applicable sources among the same
investment options made available for Participant-directed
sources listed in (b) below.
(b) Plan Investment Options
The Employer hereby establishes a Trust under the Plan in
accordance with the provisions of Article 14 and the Trustee
signified acceptance of its duties under Article 14 by its
signature below. Participant Accounts under the Trust will be
invested among the Fidelity Funds listed below pursuant to
Participant and/or Employer directions.
Fund Name Fund Number
(1) Fidelity Retirement Money Market 0630
(2) Fidelity Intermediate Bond Fund 0032
(3) Fidelity Growth & Income Portfolio 0027
(4) Fidelity Growth Company Fund 0025
(5) Fidelity Overseas Fund 0094
(6) Fidelity Puritan Fund (January 1, 1996) 0004
(7) Fidelity Magellan Fund (January 1, 1996) 0021
(8) Fidelity Export & Multinational Fund (July 1, 1997) 0332
(9) Fidelity Low-Priced Stock Fund (July 1, 1997) 0316
(10) Fidelity Emerging Markets Fund (July 1, 1997) 0322
To the extent that the Employer selects as an investment option
the Managed Income Portfolio of the Fidelity Group Trust for
Employee Benefit Plans (the "Group Trust"), the Employer hereby
(A) agrees to the terms of the Group Trust and adopts said terms
as a part of this Agreement and (B) acknowledges that it has
received from the Trustee a copy of the Group Trust, the
Declaration of Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed Income
Portfolios.
-21-
<PAGE>
Note: The method and frequency for change of investments will be
determined under the rules applicable to the selected funds or, if
applicable, the rules of the Employer adopted in accordance with
Section 6.03. Information will be provided regarding expenses, if
any, for changes in investment options.
1.15 Reliance on Opinion Letter:
An adopting Employer may not rely on the opinion letter issued by
the National office of the Internal Revenue Service as evidence
that this Plan is qualified under Section 401 of the Code. If the
Employer wishes to obtain reliance that his/her Plan(s) are
qualified, application for a determination letter should be made
to the appropriate Key District Director of the Internal Revenue
Service. Failure to fill out the Adoption Agreement properly may
result in disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with
Fidelity Prototype Plan Basic Plan Document No. 07. The Prototype
Sponsor shall inform the adopting Employer of any amendments made
to the Plan or of the discontinuance or abandonment of the
prototype plan document.
1.16 Prototype Information:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype
document may be directed to
the following telephone number:
1 800 343-9184.
-22-
<PAGE>
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed
this 3rd day of August , 1999 .
--------------------- ------------------- ----------------------
Employer PULSE ENGINEERING, INC.
By /s/ Joel A. Miller
--------------------------------------------------------------
Title Vice President, Human Resources
--------------------------------------------------------------
Employer ______________________________________________________________
By ______________________________________________________________
Title ______________________________________________________________
Accepted by Fidelity Management Trust Company, as Trustee
By /s/ Eric L. Wichmann Date 9/20/99
---------------------------------------- ---------------
Title Authorized Signatory
--------------------------------------------------------------
-23-
<PAGE>
EXECUTION PAGE
(FIDELITY'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed
this day of , 19 .
--------------------- ------------------- ----------------------
Employer PULSE ENGINEERING, INC.
By ______________________________________________________________
Title ______________________________________________________________
Employer ______________________________________________________________
By ______________________________________________________________
Title ______________________________________________________________
Accepted by Fidelity Management Trust Company, as Trustee
By ________________________________________ Date ______________
Title ______________________________________________________________
-24-
<PAGE>
The CORPORATEplan for Retirement
THE PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 07
EXHIBIT 4.1 page i
<PAGE>
THE CORPORATE PLAN FOR RETIREMENT
PROFIT SHARING/401(K) PLAN
ARTICLE 1
ADOPTION AGREEMENT
ARTICLE 2
DEFINITIONS
2.01 - Definitions
ARTICLE 3
PARTICIPATION
3.01 - Date of Participation
3.02 - Resumption of Participation Following Reemployment
3.03 - Cessation or Resumption of Participation Following a Change in Status
3.04 - Participation by Owner-Employee; Controlled Businesses
3.05 - Omission of Eligible Employee
ARTICLE 4
CONTRIBUTIONS
4.01 - Deferral Contributions
4.02 - Additional Limit on Deferral Contributions
4.03 - Matching Contributions
4.04 - Limit on Matching Contributions and Employee Contributions
4.05 - Special Rules
4.06 - Fixed/Discretionary Employer Contributions
4.07 - Time of Making Employer Contributions
4.08 - Return of Employer Contributions
4.09 - Employee Contributions
4.10 - Rollover Contributions
4.11 - Deductible Voluntary Employee Contributions
4.12 - Additional Rules for Paired Plans
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.01 - Individual Accounts
5.02 - Valuation of Accounts
5.03 - Code Section 415 Limitations
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.01 - Manner of Investment
6.02 - Investment Decisions
6.03 - Participant Directions to Trustee
ARTICLE 7
RIGHT TO BENEFITS
7.01 - Normal or Early Retirement
7.02 - Late Retirement
7.03 - Disability Retirement
7.04 - Death
7.05 - Other Termination of Employment
7.06 - Separate Account
7.07 - Forfeitures
7.08 - Adjustment for Investment Experience
7.09 - Participant Loans
7.10 - In-Service Withdrawals
7.11 - Prior Plan In-Service Distribution Rules
EXHIBIT 4.1 page ii
<PAGE>
ARTICLE 8
DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE
8.01 - Distribution of Benefits to Participants and Beneficiaries
8.02 - Annuity Distributions
8.03 - Joint and Survivor Annuities/Preretirement Survivor Annuities
8.04 - Installment Distributions
8.05 - Immediate Distributions
8.06 - Determination of Method of Distribution
8.07 - Notice to Trustee
8.08 - Time of Distribution
8.09 - Whereabouts of Participants and Beneficiaries
ARTICLE 9
TOP-HEAVY PROVISIONS
9.01 - Application
9.02 - Definitions
9.03 - Minimum Contribution
9.04 - Adjustment to the Limitation on Contributions and Benefits
9.05 - Minimum Vesting
ARTICLE 10
AMENDMENT AND TERMINATION
10.01 - Amendment by Employer
10.02 - Amendment by Prototype Sponsor
10.03 - Amendments Affecting Vested and/or Accrued Benefits
10.04 - Retroactive Amendments
10.05 - Termination
10.06 - Distribution Upon Termination of the Plan
10.07 - Merger or Consolidation of Plan; Transfer of Plan Assets
ARTICLE 11
AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS
TO OR FROM OTHER QUALIFIED PLANS
11.01 - Amendment and Continuation of Predecessor Plan
11.02 - Transfer of Funds from an Existing Plan
11.03 - Acceptance of Assets by Trustee
11.04 - Transfer of Assets from Trust
ARTICLE 12
MISCELLANEOUS
12.01 - Communication to Participants
12.02 - Limitation of Rights
12.03 - Nonalienability of Benefits and Qualified Domestic Relations Orders
12.04 - Facility of Payment
12.05 - Information Between Employer and Trustee
12.06 - Effect of Failure to Qualify Under Code
12.07 - Notices
12.08 - Governing Law
ARTICLE 13
PLAN ADMINISTRATION
13.01 - Powers and Responsibilities of the Administrator
13.02 - Nondiscriminatory Exercise of Authority
13.03 - Claims and Review Procedures
13.04 - Named Fiduciary
13.05 - Costs of Administration
EXHIBIT 4.1 page iii
<PAGE>
ARTICLE 14
TRUST AGREEMENT
14.01 - Acceptance of Trust Responsibilities
14.02 - Establishment of Trust Fund
14.03 - Exclusive Benefit
14.04 - Powers of Trustee
14.05 - Accounts
14.06 - Approving of Accounts
14.07 - Distribution from Trust Fund
14.08 - Transfer of Amounts from Qualified Plan
14.09 - Transfer of Assets from Trust
14.10 - Separate Trust or Fund for Existing Plan Assets
14.11 - Voting; Delivery of Information
14.12 - Compensation and Expenses of Trustee
14.13 - Reliance by Trustee on other Persons
14.14 - Indemnification by Employer
14.15 - Consultation by Trustee with Counsel
14.16 - Persons Dealing with the Trustee
14.17 - Resignation or Removal of Trustee
14.18 - Fiscal Year of the Trust
14.19 - Discharge of Duties by Fiduciaries
14.20 - Amendment
14.21 - Plan Termination
14.22 - Permitted Reversion of Funds to Employer
14.23 - Governing Law
EXHIBIT 4.1 page iv
<PAGE>
Article 1. Adoption Agreement.
-------------------
Article 2. Definitions.
------------
2.01. Definitions.
------------
(a) Wherever used herein, the following terms have the meanings set
forth below, unless a different meaning is clearly required by the
context:
(1) "Account" means an account established on the books of the Trust
for the purpose of recording contributions made on behalf of a
Participant and any income, expenses, gains or losses incurred
thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article 1, under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates
the optional provisions selected by the Employer, and the Trustee
accepts its responsibilities under Article 14. The provisions of the
Adoption Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period
for which an amount is payable as an annuity or in any other form.
(5) "Beneficiary" means the person or persons entitled under Section
7.04 to receive benefits under the Plan upon the death of a
Participant, provided that for purposes of Section 7.04 such term
shall be applied in accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(7) "Compensation" shall mean
(A) for purposes of Article 4 (Contributions), compensation as
defined in Section 5.03(e)(2) excluding any items elected by
the Employer in Section 1.04(a), reimbursements or other
expense allowances, fringe benefits (cash and non-cash), moving
expenses, deferred compensation and welfare benefits, but
including amounts that are not includable in the gross income
of the Participant under a salary reduction agreement by reason
of the application of Sections 125, 402(a)(8), 402(h), or
403(b) of the Code; and
(B) for purposes of Section 2.01(a)(16) (Highly Compensated
Employees), Section 5.03 (Code Section 415 Limitations), and
Section 9.03 (Top-Heavy Plan Minimum Contribution),
compensation as defined in Section 5.03(e)(2).
Compensation shall generally be based on the amount actually
paid to the Participant during the Plan Year or, for purposes of
Article 4 if so elected by the Employer in Section 1.04(b), during
that portion of the Plan Year during which the Employee is eligible
to participate. Notwithstanding the preceding sentence, compensation
for purposes of Section 5.03 (Code Section 415 Limitations) shall be
based on the amount actually paid or made available to the
Participant during the Limitation Year. Compensation for the initial
Plan Year for a new plan shall be based upon eligible Participant
EXHIBIT 4.1 page 1
<PAGE>
Compensation, subject to Section 1.04(b), from the Effective Date
listed in Section 1.01(g)(1) through the end of the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall
mean the Individual's Earned Income.
For years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account for determining
all benefits provided under the plan for any determination period
shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Section
415(d) of the Code, except that the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in
such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If a plan determines
Compensation on a period of time that contains fewer than 12 calendar
months, then the annual Compensation limit is the amount equal to the
annual Compensation limit for the calendar year in which the
Compensation period begins multiplied by the ratio obtained by
dividing the number of full months in the period by 12.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for the
current determination period, the Compensation for such prior year is
subject to the applicable annual compensation limit in effect for
that prior year. For this purpose, for years beginning before January
1, 1990, the applicable annual compensation limit is $200,000.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except that in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19 before the close of
the year. If the $200,000 limitation is exceeded as a result of the
application of these rules, then the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Compensation as determined under this Section prior to
the application of this limitation.
(8) "Earned Income" means the net earnings of a Self-Employed
Individual derived from the trade or business with respect to which
the Plan is established and for which the personal services of such
individual are a material income-providing factor, excluding any
items not included in gross income and the deductions allocated to
such items, except that for taxable years beginning after December
31, 1989 net earnings shall be determined with regard to the
deduction allowed under Section 164(f) of the Code, to the extent
applicable to the Employer. Net earnings shall be reduced by
contributions of the Employer to any qualified plan, to the extent a
deduction is allowed to the Employer for such contributions under
Section 404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month
period beginning with the Employment Commencement Date and each
anniversary thereof or, in the case of an Employee who, before
completing the eligibility requirements set forth in Section
1.03(a)(1), incurs a break in service for participation purposes and
thereafter returns to the employ of the Employer or Related Employer,
each 12-consecutive month period beginning with the first day of
reemployment and each anniversary thereof.
EXHIBIT 4.1 page 2
<PAGE>
A "break in service for participation purposes" shall mean an
Eligibility Computation Period during which the participant does not
complete more than 500 Hours of Service with the Employer.
(10) "Employee" means any employee of the Employer, any Self-Employed
Individual or Owner-Employee. The Employer must specify in Section
1.03(a)(3) any Employee or class of Employees not eligible to
participate in the Plan. If the Employer elects to exclude collective
bargaining employees, the exclusion applies to any employee of the
Employer included in a unit of employees covered by an agreement
which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers
unless the collective bargaining agreement requires the employee to
be included within the Plan. The term "employee representatives" does
not include any organization more than half the members of which are
owners, officers, or executives of the Employer.
For purposes of the Plan, an individual shall be considered to
become an Employee on the date on which he first completes an Hour of
Service and he shall be considered to have ceased to be an Employee
on the date on which he last completes an Hour of Service. The term
also includes a Leased Employee, such that contributions or benefits
provided by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided by
the Employer. Notwithstanding the above, a Leased Employee shall not
be considered an Employee if Leased Employees do not constitute more
than 20 percent of the Employer's non-highly compensated work-force
(taking into account all Related Employers) and the Leased Employee
is covered by a money purchase pension plan maintained by the leasing
organization and providing (A) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined for purposes
of Section 415(c)(3) of the Code, but including amounts contributed
pursuant to a salary reduction agreement which are excludable from
gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code, (B) full and immediate vesting, and (C)
immediate participation by each employee of the leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any
Related Employers required by this Section 2.01(a)(11). If Article 1
of the Employer's Plan is the Standardized Adoption Agreement, the
term "Employer" includes all Related Employers. If Article 1 of the
Employer's Plan is the Non-standardized Adoption Agreement, the term
"Employer" includes those Related Employers designated in Section
1.02(b).
(12) "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or
Managed Income Portfolio of the Fidelity Group Trust for Employee
Benefit Plans which is made available to plans utilizing the
CORPORATEplan for Retirement.
(15) "Fund Share" means the share, unit, or other evidence of
ownership in a Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated
active Employees and highly compensated former Employees.
EXHIBIT 4.1 page 3
<PAGE>
A highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year and
who, during the "look-back year," (A) received compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code), (B) received compensation from the Employer in excess
of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and
was a member of the top-paid group for such year, or (C) was an
officer of the Employer and received compensation during such year
that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term "Highly Compensated
Employee" also includes (i) Employees who are both described in the
preceding sentence if the term "determination year" is substituted
for the term "look-back year" and the Employee is one of the 100
Employees who received the most compensation from the Employer during
the determination year, and (ii) Employees who are 5-percent owners
at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (C)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a highly
compensated Employee.
For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the twelve-month period immediately
preceding the determination year. The Employer may elect to make the
look-back year calculation for a determination on the basis of the
calendar year ending with or within the applicable determination
year, as prescribed by Section 414(q) of the Code and the regulations
issued thereunder.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or
after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5-percent owner who is an active or
former Employee or a highly compensated Employee who is one of the 10
most highly compensated Employees ranked on the basis of compensation
paid by the Employer during such year, then the family member and the
5-percent owner or top-ten highly compensated Employee shall be
aggregated. In such case, the family member and 5-percent owner or
top-ten highly compensated Employee shall be treated as a single
Employee receiving compensation and plan contributions or benefits
equal to the sum of such compensation and contributions or benefits
of the family member and 5-percent owner or top-ten highly
compensated Employee. For purposes of this Section, family member
includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants
and descendants.
The determination of who is a highly compensated Employee,
including the determinations of the number and identity of Employees
in the top-paid group, the top 100 Employees, the number of Employees
treated as officers, and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the
regulations thereunder.
EXHIBIT 4.1 page 4
<PAGE>
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, for the performance of duties for
the Employer or a Related Employer, each such hour to be
credited to the Employee for the Eligibility Computation Period
in which the duties were performed;
(B) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer or Related
Employer (including payments made or due from a trust fund or
insurer to which the Employer contributes or pays premiums) on
account of a period of time during which no duties are
performed (irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty, or leave of
absence, each such hour to be credited to the Employee for the
Eligibility Computation Period in which such period of time
occurs, subject to the following rules:
(i) No more than 501 Hours of Service shall be credited
under this paragraph (B) on account of any single
contin-uous period during which the Employee performs no
duties;
(ii) Hours of Service shall not be credited under this
paragraph (B) for a payment which solely reimburses the
Employee for medically-related expenses, or which is made
or due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws;
and
(iii) If the period during which the Employee performs
no duties falls within two or more Eligibility Computation
Periods and if the payment made on account of such period
is not calculated on the basis of units of time, the Hours
of Service credited with respect to such period shall be
allocated between not more than the first two such
Eligibility Computation Periods on any reasonable basis
consistently applied with respect to similarly situated
Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which
back pay, irrespective of mitigation of damages, has been
either awarded or agreed to be paid by the Employer or a
Related Employer, shall be credited to the Employee for the
Eligibility Computation Period to which the award or agreement
pertains rather than the Eligibility Computation Period in
which the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of
the Employer and of all Related Employers will be treated as
employed by a single employer. For purposes of paragraphs (B)
and (C) above, Hours of Service will be calculated in
accordance with the provisions of Section 2530.200b-2(b) of the
Department of Labor regulations, which are incorporated herein
by reference.
Solely for purposes of determining whether a break in
service for participation purposes has occurred in a
computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
hours of service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 hours of service per day of
EXHIBIT 4.1 page 5
<PAGE>
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (i) by
reason of the pregnancy of the individual, (ii) by reason of a
birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes
of caring for such child for a period beginning immediately
following such birth or placement. The hours of service
credited under this paragraph shall be credited (a) in the
computation period in which the absence begins if the crediting
is necessary to prevent a break in service in that period, or
(b) in all other cases, in the following computation period.
(18) "Leased Employee" means any individual who provides services to the
Employer or a Related Employer (the "recipient") but is not otherwise an
employee of the recipient if (A) such services are provided pursuant to
an agreement between the recipient and any other person (the "leasing
organization"), (B) such individual has performed services for the
recipient (or for the recipient and any related persons within the
meaning of Section 414(n)(6) of the Code) on a substantially full-time
basis for at least one year, and (C) such services are of a type
historically performed by employees in the business field of the
recipient.
(19) "Normal Retirement Age" means the normal retirement age specified in
Section 1.06(a) of the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in Section 1.06(a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship,
the individual who is the sole proprietor, or if the Employer is a
partnership, a partner who owns more than 10 percent of either the
capital interest or the profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the plan established by the Employer in the form of the
prototype plan, as set forth herein as a new plan or as an amendment to
an existing plan, by executing the Adoption Agreement, together with any
and all amendments hereto.
(23) "Plan Year" means the 12-consecutive-month period ending on the date
designated by the Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research Company
or its successor.
(25) "Registered Investment Company" means any one or more corporations,
partnerships or trusts registered under the Investment Company Act of
1940 for which Fidelity Management and Research Company serves as
investment advisor.
(26) "Related Employer" means any employer other than the Employer named
in Section 1.02(a) if the Employer and such other employer are members of
a controlled group of corporations (as defined in Section 414(b) of the
Code) or an affiliated service group (as defined in Section 414(m)), or
are trades or businesses (whether or not incorporated) which are under
common control (as defined in Section 414(c)), or such other employer is
required to be aggregated with the Employer pursuant to regulations
issued under Section 414(o).
EXHIBIT 4.1 page 6
<PAGE>
(27) "Self-Employed Individual" means an individual who has Earned Income
for the taxable year from the Employer or who would have had Earned
Income but for the fact that the trade or business had no net profits for
the taxable year.
(28) "Trust" means the trust created by the Employer in accordance with
the provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and the
Trustee, as set forth in Article 14, under which the assets of the Plan
are held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for
the Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its
successor.
(32) "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee has
been credited with at least 1,000 Hours of Service. If the Plan
maintained by the Employer is the plan of a predecessor employer, an
Employee's Years of Service for Participation shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for
the Employer, to the extent provided in Section 1.08.
(33) "Years of Service for Vesting" means, with respect to any Employee,
the number of whole years of his periods of service with the Employer or
a Related Employer (the elapsed time method to compute vesting service),
subject to any exclusions elected by the Employer in Section 1.07(b). An
Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's Employment Commencement Date and ending on
the date a break in service begins, unless any such years are excluded by
Section 1.07(b). An Employee will also receive credit for any period of
severance of less than 12 consecutive months. Fractional periods of a
year will be expressed in terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks in
service, all years of service after such breaks in service will be
disregarded for the purpose of vesting the Employer-derived account
balance that accrued before such breaks, but both pre-break and
post-break service will count for the purposes of vesting the
Employer-derived account balance that accrues after such breaks. Both
accounts will share in the earnings and losses of the fund.
In the case of a Participant who does not have 5 consecutive 1-year
breaks in service, both the pre-break and post-break service will count
in vesting both the pre-break and post-break employer-derived account
balance.
A break in service is a period of severance of at least 12
consecutive months. Period of severance is a continuous period of time
during which the Employee is not employed by the Employer. Such period
begins on the date the Employee retires, quits or is discharged, or if
earlier, the 12-month anniversary of the date on which the Employee was
otherwise first absent from service.
In the case of an individual who is absent from work for maternity
or paternity reasons, the 12-consecutive month period beginning on the
EXHIBIT 4.1 page 7
<PAGE>
first anniversary of the first date of such absence shall not constitute
a break in service. For purposes of this paragraph, an absence from work
for maternity or paternity reasons means an absence (A) by reason of the
pregnancy of the individual, (B) by reason of the birth of a child of the
individual, (C) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (D)
for purposes of caring for such child for a period beginning immediately
following such birth or placement.
If the Plan maintained by the Employer is the plan of a predecessor
employer, an Employee's Years of Service for Vesting shall include years
of service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for
the Employer to the extent provided in Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include the
feminine gender unless the context clearly indicates otherwise.
Article 3. Participation.
--------------
3.01. Date of Participation. All Employees in the eligible class (as defined in
---------------------
Section 1.03(a)(3)) who are in the service of the Employer on the Effective Date
will become Participants on the date elected by the Employer in Section 1.03(c).
Any other Employee will become a Participant in the Plan as of the first Entry
Date on which he first satisfies the eligibility requirements set forth in
Section 1.03(a). In the event that an Employee who is not a member of an
eligible class (as defined in Section 1.03(a)(3)) becomes a member of an
eligible class, the individual shall participate immediately if such individual
had already satisfied the eligibility requirements and would have otherwise
previously become a Participant.
If an eligibility requirement other than one Year of Service is elected in
1.03(a)(1), an Employee may not be required to complete a minimum number of
Hours of Service before becoming a Participant. An otherwise eligible Employee
subject to a minimum months of service requirement shall become a Participant on
the first Entry Date following his completion of the required number of
consecutive months of employment measured from his Employment Commencement Date
to the coinciding date in the applicable following month. For purposes of
determining consecutive months of service, the Related Employer and predecessor
employer rules contained in Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
3.02. Resumption of Participation Following Reemployment. If a Participant
--------------------------------------------------
ceases to be an Employee and thereafter returns to the employ of the Employer he
will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his reemployment
and is in the eligible class of Employees as defined in Section
1.03(a)(3), and
(b) any distribution which he is receiving under the Plan will cease
except as otherwise required under Section 8.08.
3.03. Cessation or Resumption of Participation Following a Change in Status. If
---------------------------------------------------------------------
any Participant continues in the employ of the Employer or Related Employer but
ceases to be a member of an eligible class as defined in Section 1.03(a)(3), the
individual shall continue to be a Participant for most purposes until the entire
amount of his benefit is distributed; however, the individual shall not be
entitled to receive an allocation of contributions or forfeitures during the
EXHIBIT 4.1 page 8
<PAGE>
period that he is not a member of the eligible class. Such Participant shall
continue to receive credit for service completed during the period for purposes
of determining his vested interest in his Accounts. In the event that the
individual subsequently again becomes a member of an eligible class of
Employees, the individual shall resume full participation immediately upon the
date of such change in status.
3.04. Participation by Owner-Employee; Controlled Businesses.
------------------------------------------------------
If the Plan provides contributions or benefits for one or more Owner-Employees
who control both the trade or business with respect to which the Plan is
established and one or more other trades or businesses, the Plan and any plan
established with respect to such other trades or businesses must, when looked at
as a single plan, satisfy Sections 401(a) and 401(d) of the Code with respect to
the employees of this and all such other trades or businesses. If the Plan
provides contributions or benefits for one or more Owner-Employees who control
one or more other trades or businesses, the Employees of each such other trade
or business must be included in a plan which satisfies Sections 401(a) and
401(d) of the Code and which provides contributions and benefits not less
favorable than provided for Owner-Employees under the Plan.
If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such Owner-Employees together, (a) own the entire interest in
an unincorporated trade or business or (b) in the case of a partnership, own
more than 50 percent of either the capital interest or the profits interest in
such partnership. For this purpose, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership controlled by such
Owner-Employee or such Owner-Employees.
3.05. Omission of Eligible Employee. If any Employee who should be included as a
-----------------------------
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution, if necessary, so that the
omitted Employee receives the total amount which the said Employee would have
received had he not been omitted. For purposes of this Section 3.05, the term
"contribution" shall not include Deferral Contributions and Matching
Contributions made pursuant to Sections 4.01 and 4.03, respectively.
Article 4. Contributions.
-------------
4.01. Deferral Contributions.
----------------------
(a) 4.01. If so provided by the Employer in Section 1.05(b), each
Participant may elect to execute a salary reduction agreement with the
Employer to reduce his Compensation by a specified percentage not
exceeding 15% per payroll period, subject to any exceptions elected by
the Employer in Section 1.05(b)(2) and 1.05(b)(3) and equal to a whole
number multiple of one (1) percent. Such agreement shall become effective
on the first day of the first payroll period for which the Employer can
reasonably process the request. The Employer shall make a Deferral
EXHIBIT 4.1 page 9
<PAGE>
Contribution on behalf of the Participant corresponding to the amount of
said reduction, subject to the restrictions set forth below. Under no
circumstances may a salary reduction agreement be adopted retroactively.
(b) A Participant may elect to change or discontinue the percentage by
which his Compensation is reduced by notice to the Employer as provided
in Section 1.05(b)(1).
(c) No Participant shall be permitted to have Deferral Contributions made
under the Plan, or any other qualified plan maintained by the Employer,
during the taxable year, in excess of the dollar limitation contained in
Section 402(g) of the Code in effect at the beginning of such taxable
year.
A Participant may assign to the Plan any Excess Deferrals made during
the taxable year of the Participant by notifying the Plan Administrator
on or before March 15 following the taxable year of the amount of the
Excess Deferrals to be assigned to the Plan. A Participant is deemed to
notify the Administrator of any Excess Deferrals that arise by taking
into account only those Deferral Contributions made to the Plan and any
other plan of the Employer. Notwithstanding any other provision of the
Plan, Excess Deferrals, plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15 to any Participant
to whose Account Excess Deferrals were so assigned for the preceding year
and who claims Excess Deferrals for such taxable year.
"Excess Deferrals" shall mean those Deferral Contributions that are
includable in a Participant's gross income under Section 402(g) of the
Code to the extent such Participant's Deferral Contributions for a
taxable year exceed the dollar limitation under such Code section. For
purposes of determining Excess Deferrals, the term "Deferral
Contributions" shall include the sum of all Employer Contributions made
on behalf of such Participant pursuant to an election to defer under any
qualified CODA as described in Section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in Section
402(h)(1)(B) of the Code, any eligible deferred compensation plan under
Section 457 of the Code, any plan as described under Section 501(c)(18)
of the Code, and any Employer Contributions made on the behalf of a
Participant for the purchase of an annuity contract under Section 403(b)
of the Code pursuant to a salary reduction agreement. Deferral
Contributions shall not include any deferrals properly distributed as
excess annual additions. Excess Deferrals shall be treated as annual
additions under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the Participant's taxable
year.
Excess Deferrals shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Deferrals is
(1) income or loss allocable to the Participant's Deferral Contributions
Account for the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Deferrals for the year and the
denominator is the Participant's Account balance attributable to Deferral
Contributions without regard to any income or loss occurring during such
taxable year, or (2) such other amount determined under any reasonable
method, provided that such method is used consistently for all
Participants in calculating the distributions required under this Section
4.01(c) and Sections 4.02(d) and 4.04(d) for the Plan Year, and is used
by the Plan in allocating income or loss to Participants' Accounts.
Income or loss allocable to the period between the end of the Plan Year
and the date of distribution shall be disregarded in determining income
or loss.
EXHIBIT 4.1 page 10
<PAGE>
(d) In order for the Plan to comply with the requirements of Sections
401(k), 402(g) and 415 of the Code and the regulations promulgated
thereunder, at any time in a Plan Year the Administrator may reduce the
rate of Deferral Contributions to be made on behalf of any Participant,
or class of Participants, for the remainder of that Plan Year, or the
Administrator may require that all Deferral Contributions to be made on
behalf of a Participant be discontinued for the remainder of that Plan
Year. Upon the close of the Plan Year or such earlier date as the
Administrator may determine, any reduction or discontinuance in Deferral
Contributions shall automatically cease until the Administrator again
determines that such a reduction or discontinuance of Deferral
Contributions is required.
4.02. Additional Limit on Deferral Contributions.
------------------------------------------
(a) The Actual Deferral Percentage (hereinafter "ADP") for Participants
who are Highly Compensated Employees for each Plan Year and the ADP for
participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(1) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
2.0, provided that the ADP for Participants who are Highly
Compensated Employees does not exceed the ADP for Participants who
are Non-highly Compensated Employees by more than two (2) percentage
points.
(b) The following special rules apply for the purposes of this Section:
(1) The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Deferral Contributions
(and Qualified Discretionary Contributions if treated as Deferral
Contributions for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Section 401(k)
of the Code that are maintained by the Employer, shall be determined
as if such Deferral Contributions (and, if applicable, such Qualified
Discretionary Contributions) were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Section 401(k) of the Code.
(2) In the event that this Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy
the requirements of such Sections of the Code only if aggregated with
this plan, then this Section shall be applied by determining the ADP
of Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order
to satisfy section 401(k) of the Code only if they have the same Plan
Year.
EXHIBIT 4.1 page 11
<PAGE>
(3) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the Deferral Contributions (and Qualified Discretionary
Contributions if treated as Deferral Contributions for purposes of
the ADP test) and Compensation of such Participant shall include the
Deferral Contributions (and, if applicable, Qualified Discretionary
Contributions) and Compensation for the Plan Year of Family Members
(as defined in Section 414(q)(6) of the Code). Family Members, with
respect to between the end of the Plan Year and the date of
distribution shall be disregarded in determining income or loss.
Excess Contributions shall be distributed from the Participant's
Qualified Discretionary Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's Deferral
Contributions account.
(4) For purposes of determining the ADP test, Deferral Contributions
and Qualified Discretionary Contributions must be made before the
last day of the twelve-month period immediately following the Plan
Year to which contributions relate.
(5) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Discretionary Contributions used in such test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (A) the amount of
Employer contributions actually paid over to the Trust on behalf of
such Participant for the Plan Year to (B) the Participant's
Compensation for such Plan Year. Employer contributions on behalf of
any Participant shall include (i) any Deferral Contributions made
pursuant to the Participant's deferral election, including Excess
Deferrals of Highly Compensated Employees, but excluding (a) Excess
Deferrals of Non-highly Compensated Employees that arise solely from
Deferral Contributions made under the Plan or plans of the Employer
and (b) Deferral Contributions that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied both
with and without exclusion of these Deferral Contributions) and (ii)
at the election of the Employer, Qualified Discretionary
Contributions. Matching Contributions, whether or not non-forfeitable
when made, shall not be considered as Employer Contributions for
purposes of this paragraph. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the
failure to make Deferral Contributions shall be treated as a
Participant on whose behalf no Deferral Contributions are made.
(2) "Excess Contributions" shall mean, with respect to any Plan Year,
the excess of
(a) The aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
EXHIBIT 4.1 page 12
<PAGE>
(b) The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
(3) "Qualified Discretionary Contributions" shall mean contributions
made by the Employer as elected in Section 1.05(b)(4) and allocated
to Participant Accounts of Non-highly Compensated Employees that such
Participants may not elect to receive in cash until distributed from
the Plan, that are nonforfeitable when made, and that are
distributable only in accordance with the distribution provisions
that are applicable to Deferral Contributions. Participants shall not
be required to satisfy any hours of service or employment requirement
in order to receive an allocation of such contributions.
(d) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year. If such excess amounts are distributed more
than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten- (10-) percent excise tax will be imposed on
the Employer maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on the basis
of the respective portions of the Excess Contributions attributable to
each of such employees. Excess Contributions of Participants who are
subject to the family member aggregation rules of Section 414(q)(6) of
the Code shall be allocated among the family members in proportion to the
Deferral Contributions (and amounts treated as Deferral Contributions) of
each family member that is combined to determine the combined ADP.
Excess Contributions shall be treated as annual additions under the Plan.
Excess Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess
Contributions is (1) income or loss allocable to the Participant's
Deferral Contribution Account (and if applicable, the Qualified
Discretionary Contribution Account) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Contributions for the year and the denominator is the Participant's
Account balance attributable to Deferral Contributions without regard to
any income or loss occurring during such Plan Year, or (2) an amount
determined under any reasonable method, provided that such method is used
consistently for all Participants in calculating any distributions
required under Section 4.02(d) and Sections 4.01(c) and 4.04(d) for the
Plan Year, and is used by the Plan in allocating income or loss to the
Participants' Accounts. Income or loss allocable to the period between
the end of the Plan Year and the date of distibution shall be disregarded
in determining income or loss.
Excess Contributions shall be distributed from the Participant's
Qualified Discretionary Contribution Account only to the extent that such
Excess Contributions exceed the balance in the Participant's Deferral
Contributions Account.
4.03 Matching Contributions: If so provided by the Employer in Section 1.05(c),
----------------------
the Employer shall make a Matching Contribution on behalf of each Participant
who had Deferral Contributions made on his behalf during the year and who meets
the requirement, if any, of Section 1.05(c)(4). The amount of the Matching
EXHIBIT 4.1 page 13
<PAGE>
Contribution shall be determined in accordance with Section 1.05(c), subject to
the limitations set forth in Section 4.04 and Section 404 of the Code. Matching
Contributions will not be allowed to be made by the Employer on any voluntary
non-deductible Employee Contributions.
4.04 Limit on Matching Contributions and Employee Contributions:
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
two (2), provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for Participants who
are Non-highly Compensated Employees by more than two (2) percentage
points.
(b) The following special rules apply for purposes of this section:
(1) If one or more Highly Compensated Employees participate in both a
qualified cash or deferred arrangement described in Section 401(k) of
the Code (hereafter "CODA") and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds
the Aggregate Limit, then the ACP of those Highly Compensated
Employees who also participate in a CODA will be reduced (beginning
with such Highly Compensated Employee whose ACP is the highest) so
that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP
of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does
not occur if either the ADP or ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP of the
Non-highly Compensated Employees.
(2) For purposes of this section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible
to have Contribution Percentage Amounts allocated to his or her
account under two or more plans described in section 401(a) of the
Code, or arrangements described in section 401(k) of the Code that
are maintained by the Employer, shall be determined as if the total
of such Contribution Percentage Amounts was made under each plan. If
a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Section 401(m) of the Code.
EXHIBIT 4.1 page 14
<PAGE>
(3) In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if aggregated
with one or more other plans, or if one or more other plans satisfy
the requirements of such sections of the Code only if aggregated with
this Plan, then this section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For plan years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(m) of the Code only
if they have the same Plan Year.
(4) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for the Plan Year of
family members (as defined in Section 414(q)(6) of the Code). Family
members, with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Contribution
Percentage both for Participants who are Non-highly Compensated
Employees and for Participants who are Highly Compensated Employees.
(5) For purposes of determining the Contribution Percentage test,
Employee Contributions made pursuant to Section 1.05(d)(1) are
considered to have been made in the Plan Year in which contributed to
the Trust. Matching Contributions and Qualified Discretionary
Contributions will be considered made for a Plan Year if made no
later than the end of the twelve-month period beginning on the day
after the close of the Plan Year.
(6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Discretionary Contributions used in such test.
(7) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Aggregate Limit" shall mean the greater of (A) or (B) where (A)
is the sum of (i) 125 percent of the greater of the ADP of the
Non-highly Compensated Employees for the Plan Year or the ACP of
Non-highly Compensated Employees under the Plan subject to Section
401(m) of the Code for the Plan Year beginning with or within the
Plan Year of the CODA and (ii) the lesser of 200% or two plus the
lesser of such ADP or ACP and where (B) is the sum of (i) 125 percent
of the lesser of the ADP of the Non-highly Compensated Employees for
the Plan Year or the ACP of Non-highly Compensated Employees under
the Plan subject to Section 401(m) of the Code for the Plan Year
beginning with or within the Plan Year of the CODA and (ii) the
lesser of 200% or two plus the greater of such ADP or ACP.
(2) "Average Contribution Percentage" or "ACP" shall mean the average
of the Contribution Percentages of the Eligible Participants in a
group.
(3) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to
the Participant's Compensation for the Plan Year.
EXHIBIT 4.1 page 15
<PAGE>
(4) "Contribution Percentage Amounts" shall mean the sum of the
Employee Contributions and Matching Contributions made under the plan
on behalf of the Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions. If so elected by the
Employer in Section 1.05(b)(4), the Employer may include Qualified
Discretionary Contributions in the Contribution Percentage Amounts.
The Employer also may elect to use Deferral Contributions in the
Contribution Percentage Amounts so long as the ADP test is met before
the Deferral Contributions are used in the ACP test and continues to
be met following the exclusion of those Deferral Contributions that
are used to meet the ACP test.
(5) "Deferral Contribution" shall mean any contribution made at the
election of the Participant pursuant to a salary reduction agreement
in accordance with Section 4.01(a).
(6) "Eligible Participant" shall mean any Employee who is eligible to
make an Employee Contribution, or a Deferral Contribution (if the
Employer takes such contributions into account in the calculation of
the Contribution Percentage), or to receive a Matching Contribution.
(7) "Employee Contribution" shall mean any voluntary non-deductible
contribution made to the plan by or on behalf of a Participant that
is included in the Participant's gross income in the year in which
made and that is maintained in a separate Account to which earnings
and losses are allocated.
(8) "Matching Contribution" shall mean an Employer contribution made
to this or any other defined contribution plan on behalf of a
Participant on account of a Participant's Deferral Contribution.
(9) "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of
(A) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(B) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in the order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining
Excess Deferrals pursuant to Section 4.01 and then determining
Excess Contributions pursuant to Section 4.02.
(d) Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed no
later than the last day of each Plan Year to Participants to whose
Accounts such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of Participants who
are subject to the family member aggregation rules of Section 414(q)(6)
of the Code shall be allocated among the family members in proportion to
EXHIBIT 4.1 page 16
<PAGE>
the Employee and Matching Contributions of each family member that is
combined to determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2 1/2 months after the last day
of the Plan Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the employer maintaining the Plan with
respect to those amounts. Excess Aggregate Contributions shall be treated
as annual additions under the Plan.
Excess Aggregate Contributions shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is (1) income or loss allocable to the
Participant's Employee Contribution Account, Matching Contribution
Account (if any, and if all amounts therein are not used in the ADP test)
and if applicable, Qualified Non-elective Contribution Account for the
Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year and the
denominator is the Participant's Account balance(s) attributable to
Contribution Percentage Amounts without regard to income or loss
occurring during such Plan Year, or (2) such other amount determined
under any reasonable method, provided that such method is used
consistently for all Participants in calculating any distributions
required under Section 4.04(d) and Sections 4.01(c) and 4.02(d) for the
Plan Year, and is used by the Plan in allocating income or loss to the
Participants' Accounts. Income or loss allocable to the period between
the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions; the forfeitures shall be held in the money
market fund, if any, listed in Section 1.14(b) pending such application.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a prorata basis from the Participant's Employee
Contribution Account, Matching Contribution Account and if applicable,
the Participant's Deferral Contributions Account or Qualified
Discretionary Contribution Account or both.
4.05. Special Rules. Deferral Contributions and Qualified Discretionary
-------------
Contributions and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or beneficiary's or beneficiaries' election, earlier than upon
separation from service, death, or disability, except as otherwise provided in
Section 7.10, 7.11 or 10.06. Such amounts may also be distributed, but after
March 31, 1988, in the form of a lump sum only, upon
(a) Termination of the Plan without establishment of another
defined contribution plan, other than an employee stock ownership plan
(as defined in Section 4975(e) or Section 409 of the Code) or a
simplified employee pension plan as defined in Section 408(k) of the
Code.
(b) The disposition by a corporation to an unrelated corporation
of substantially all of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade or business of such corporation if
such corporation continues to maintain this Plan after the disposition,
but only with respect to Employees who continue employment with the
corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the meaning of
Section 409(d)(2) of the Code) if such corporation continues to maintain
this Plan, but only with respect to Employees who continue employment
with such subsidiary.
EXHIBIT 4.1 page 17
<PAGE>
The Participant's accrued benefit derived from Deferral Contributions,
Qualified Discretionary Contributions and Employee Contributions (as defined in
Section 4.09) is nonforfeitable. Separate Accounts for Deferral Contributions,
Qualified Discretionary Contributions, Employee Contributions and Matching
Contributions will be maintained for each Participant. Each Account will be
credited with the applicable contributions and earnings thereon.
4.06. Fixed/Discretionary Employer Contributions. If so provided by the Employer
------------------------------------------
in Sections 1.05(a)(1) or 1.05(a)(2), for the Plan Year in which the Plan is
adopted and for each Plan Year thereafter, the Employer will make Fixed or
Discretionary Employer contributions to the Trust in accordance with Section
1.05 to be allocated as follows:
(a) Fixed Employer contributions shall be allocated among
eligible Participants (as determined in accordance with Section
1.05(a)(3)) in the manner specified in Section 1.05(a).
(b) Discretionary Employer contributions shall be allocated
among eligible Participants, as determined in accordance with Section
1.05(a)(3), as follows:
(1) If the Non-Integrated Formula is elected in
Section 1.05(a)(2)(A), such contributions shall be
allocated to eligible Participants in the ratio that
each Participant's Compensation bears to the total
Compensation paid to all eligible Participants for the
Plan Year; or
(2) If the Integrated Formula is elected in Section
1.05(a)(2)(B), such contributions shall be allocated
in the following steps:
(A) First, to each eligible Participant in the
same ratio that the sum of the Participant's
Compensation and Excess Compensation for the Plan
Year bears to the sum of the Compensation and
Excess Compensation of all Participants for the
Plan Year. This allocation as a percentage of the
sum of each Participant's Compensation and Excess
Compensation shall not exceed 5.7%.
(B) Any remaining Discretionary Employer
Contribution shall be allocated to each eligible
Participant in the same ratio that each
Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for
the Plan Year.
For purposes of this Section, "Excess Compensation"
means Compensation in excess of the taxable wage base,
as determined under Section 230 of the Social Security
Act, in effect on the first day of the Plan Year.
Further, this Section 4.06(b)(2) shall be modified as
provided in Section 9.03 for years in which the Plan is
top heavy under Article 9.
4.07. Time of Making Employer Contributions. The Employer will pay its
-------------------------------------
contribution for each Plan Year not later than the time prescribed by law for
filing the Employer's federal income tax return for the fiscal (or taxable) year
with or within which such Plan Year ends (including extensions thereof). The
EXHIBIT 4.1 page 18
<PAGE>
Trustee will have no authority to inquire into the correctness of the amounts
contributed and paid over to the Trustee, to determine whether any contribution
is payable under this Article 4, or to enforce, by suit or otherwise, the
Employer's obligation, if any, to make a contribution to the Trustee.
4.08. Return of Employer Contributions. The Trustee shall, upon request by the
--------------------------------
Employer, return to the Employer the amount (if any) determined under Section
14.22. Such amount shall be reduced by amounts attributable thereto which have
been credited to the Accounts of Participants who have since received
distributions from the Trust, except to the extent such amounts continue to be
credited to such Participants' Accounts at the time the amount is returned to
the Employer. Such amount shall also be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the gains and
income attributable thereto, but will not be increased by the gains and income
of the Trust attributable thereto, if and to the extent such gains and income
exceed the losses attributable thereto. In no event will the return of a
contribution hereunder cause the balance of the individual Account of any
Participant to be reduced to less than the balance which would have been
credited to the Account had the mistaken amount not been contributed.
4.09. Employee Contributions. If the Employer elected to permit Deferral
----------------------
Contributions in Section 1.05(b) and if so provided by the Employer in Section
1.05(d), each Participant may elect to make Employee Contributions to the Plan
in accordance with the rules and procedures established by the Employer and in
an amount not less than one percent (1%) and not greater than ten percent (10%)
of such Participant's Compensation for the Plan Year. Such contributions and all
Employee Contributions for Plan Years beginning after December 31, 1986, shall
be subject to the nondiscrimination requirements of Section 401(m) of the Code
as set forth in Section 4.04.
For purposes of this Plan, "Employee Contributions" shall mean any
voluntary non-deductible contribution made to a plan by or on behalf of a
Participant that is or was included in the Participant's gross income in the
year in which made and that is maintained under a separate account to which
applicable earnings and losses are allocated. Excess Contributions may not be
recharacterized as Employee Contributions.
Employee Contributions shall be paid over to the Trustee not later than
thirty (30) days following the end of the month in which the Participant makes
the contribution. A Participant shall have a fully vested 100% nonforfeitable
right to his Employee Contributions and the earnings or losses allocated
thereon. Distributions of Employee Contributions shall be made in accordance
with Section 7.10.
4.10. Rollover Contributions.
----------------------
(a) Rollover of Eligible Rollover Distributions
-------------------------------------------
(1) An Employee who is or was a distributee of an "eligible rollover
distribution"(as defined in Section 402(c)(4) of the Code and the
regulations issued thereunder) from a qualified plan may directly
transfer all or any portion of such distribution to the Trust or
transfer all or any portion of such distribution to the Trust within
sixty (60) days of payment. The transfer shall be made in the form of
cash or allowable Fund Shares only.
(2) The Employer may refuse to accept rollover contributions or
instruct the Trustee not to accept rollover contributions under the
Plan.
EXHIBIT 4.1 page 19
<PAGE>
(b) Treatment of Rollover Amount.
----------------------------
(1) An account will be established for the transferring Employee
under Article 5, the rollover amount will be credited to the account
and such amount will be subject to the terms of the Plan, including
Section 8.01, except as otherwise provided in this Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) Entry into Plan by Transferring Employee. Although an amount may be
----------------------------------------
transferred to the Trust Fund under this Section 4.10 by an Employee who
has not yet become a Participant in accordance with Article 3, and such
amount is subject to the terms of the Plan as described in paragraph (b)
above, the Employee will not become a Participant entitled to share in
Employer contributions until he has satisfied such requirements.
(d) Monitoring of Rollovers.
-----------------------
(1) The Administrator shall develop such procedures and require such
information from transferring Employees as it deems necessary to
insure that amounts transferred under this Section 4.10 meet the
requirements for tax-free rollovers established by such Section and
by Section 402(c) of the Code. No such amount may be transferred
until approved by the Administrator.
(2) If a transfer made under this Section 4.10 is later determined by
the Administrator not to have met the requirements of this Section or
of the Code or Treasury regulations, the Trustee shall, within a
reasonable time after such determination is made, and on instructions
from the Administrator, distribute to the Employee the amounts then
held in the Trust attributable to the transferred amount.
4.11. Deductible Voluntary Employee Contributions. The Administrator will not
-------------------------------------------
accept deductible Employee Contributions which are made for a taxable year
beginning after December 31, 1986. Contributions made prior to that date will be
maintained in a separate Account which will be nonforfeitable at all times and
which will share in the gains and losses of the trust in the same manner as
described in Section 5.02. No part of the deductible voluntary contribution
Account will be used to purchase life insurance. Subject to Article 8, the
Participant may withdraw any part of the deductible voluntary contribution
Account upon request.
4.12. Additional Rules for Paired Plans. If the Employer has adopted a qualified
---------------------------------
plan under Fidelity Basic Plan Document No. 09 which is to be considered as a
paired plan with this Plan, the elections in Section 1.03 must be identical to
the Employer's corresponding elections for the other plan. When the paired plans
are top-heavy or are deemed to be top-heavy as provided in Section 9.01, the
plan paired with this Plan will provide a minimum contribution to each non-key
Employee which is equal to 3 percent (or such other percent elected by the
Employer in Section 1.12(c)) of such Employee's Compensation. Notwithstanding
the preceding sentence, the minimum contribution shall be provided by this Plan
if contributions under the other plan paired with this Plan are frozen.
Article 5. Participants' Accounts.
----------------------
5.01. Individual Accounts. The Administrator will establish and maintain an
-------------------
Account for each Participant which will reflect Employer and Employee
EXHIBIT 4.1 page 20
<PAGE>
Contributions made on behalf of the Participant and earnings, expenses, gains
and losses attributable thereto, and investments made with amounts in the
Participant's Account. The Administrator will establish and maintain such other
accounts and records as it decides in its discretion to be reasonably required
or appropriate in order to discharge its duties under the Plan.
5.02. Valuation of Accounts. Participant Accounts will be valued at their fair
---------------------
market value at least annually as of a date specified by the Administrator in
accordance with a method consistently followed and uniformly applied, and on
such date earnings, expenses, gains and losses on investments made with amounts
in each Participant's Account will be allocated to such Account. Participants
will be furnished statements of their Account values at least once each Plan
Year.
5.03. Code Section 415 Limitations. Notwithstanding any other provisions of
----------------------------
the Plan:
Subsections (a)(1) through (a)(4)--(These subsections apply to Employers
who do not maintain any qualified plan, including a Welfare Benefit Fund, an
Individual Medical Account, or a simplified employee pension in addition to this
Plan.)
(a)(1) If the Participant does not participate in, and has never
participated in any other qualified plan, Welfare Benefit Fund,
Individual Medical Account, or a simplified employee pension, as defined
in section 408(k) of the Code, maintained by the Employer, which
provides an annual addition as defined in Section 5.03(e)(1), the amount
of Annual Additions to a Participant's Account for a Limitation Year
shall not exceed the lesser of the Maximum Permissible Amount or any
other limitation contained in this Plan. If the Employer contribution
that would otherwise be contributed or allocated to the Participant's
Account would cause the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount.
(a)(2) 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 a reasonable estimation of the
Participant's compensation for such Limitation Year, 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.
(a)(3) 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.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the
allocation of forfeitures or a reasonable error in determining the total
Elective Deferrals there is an Excess Amount with respect to a
Participant for a Limitation Year, such Excess Amount shall be disposed
of as follows:
(A) Any nondeductible voluntary employee contributions ("employee
contributions") or Elective Deferrals, to the extent they would reduce
the Excess Amount, will be returned to the Participant. Any gains
attributable to returned employee contributions will also be returned or
will be treated as additional employee contributions for the Limitation
Year in which the employee contributions were made.
EXHIBIT 4.1 page 21
<PAGE>
(B) If after the application of paragraph (A) an Excess amount
still exists and the Participant is in the service of the Employer which
is covered by the Plan at the end of the Limitation Year, then such
Excess Amount shall be reapplied to reduce future Employer contributions
under this Plan for the next Limitation Year (and for each succeeding
year, as necessary) for such Participant, so that in each such Year the
sum of actual Employer contributions plus the reapplied amount shall
equal the amount of Employer contributions which would otherwise be made
to such Participant's Account.
(C) If after the application of paragraph (A) an Excess Amount
still exists and the Participant is not in the service of the Employer
which is covered by the Plan at the end of a Limitation Year, then such
Excess Amount will be held unallocated in a suspense account. The
suspense account will be applied to reduce future Employer contributions
for all remaining Participants in the next Limitation Year and each
succeeding Limitation Year if necessary.
(D) If a suspense account is in existence at any time during the
Limitation Year pursuant to this subsection, it will not participate in
the allocation of the Trust Fund's investment gains and losses. All
amounts in the suspense account must be allocated to the Accounts of
Participants before any Employer contribution may be made for the
Limitation Year. Except as provided in paragraph (A), Excess Amounts may
not be distributed to Participants or former Participants.
Subsections (b)(1) through (b)(6)--(These subsections apply to Employers
who, in addition to this Plan, maintain one or more plans, all of which are
qualified Master or Prototype defined contribution Plans, any Welfare Benefit
Fund, any Individual Medical Account, or any simplified employee pension.)
(b)(1) If, in addition to this Plan, the Participant is covered under
any other qualified defined contribution plans (all of which are
qualified Master or Prototype Plans), Welfare Benefit Funds, Individual
Medical Accounts, or simplified employee pension Plans, maintained by
the Employer, that provide an annual addition as defined in Section
5.03(e)(1), the amount of Annual Additions to a Participant's Account
for a Limitation Year shall not exceed the lesser of
(A) the Maximum Permissible Amount, reduced by the sum of any
Annual Additions to the Participant's accounts for the same Limitation
Year under such other qualified Master or Prototype defined contribution
plans, and Welfare Benefit Funds, Individual Medical Accounts, and
simplified employee pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other
qualified Master or Prototype defined contribution Plans, Welfare
Benefit Funds, Individual Medical Accounts, and simplified employee
pensions maintained by the Employer are less than the maximum
permissible amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's account under this plan
would cause the annual additions for the limitation year to exceed this
limitation, the amount contributed or allocated will be reduced so that
the annual additions under all such plans and funds for the limitation
year will equal the maximum permissible amount. If the annual additions
with respect to the Participant under such other qualified Master or
Prototype defined contribution Plans, Welfare Benefit Funds, Individual
Medical Accounts, and simplified employee pensions in the aggregate are
EXHIBIT 4.1 page 22
<PAGE>
equal to or greater than the maximum permissible amount, no amount will
be contributed or allocated to the Participant's account under this plan
for the limitation year.
(b)(2) Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the amounts referred to in
(b)(1)(A) above may be determined on the basis of a reasonable
estimation of the Participant's compensation for such Limitation Year,
uniformly determined for all Participants similarly situated. Any
Employer contribution based on estimated annual compensation shall be
reduced by any Excess Amounts carried over from prior years.
(b)(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be
determined on the basis of the Participant's actual Compensation for
such Limitation Year.
(b)(4) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall be
deemed to consist of the Annual Additions last allocated, except that
Annual Additions attributable to a simplified employee pension will be
deemed to have been allocated first, followed by Annual Additions to a
Welfare Benefit Fund or Individual Medical Account regardless of the
actual allocation date.
(b)(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the
product of
(A) the total Excess Amount allocated as of such date (including
any amount which would have been allocated but for the limitations
of Section 415 of the Code), and
(B) the ratio of (i) the Annual Additions allocated to the
Participant as of such date under this Plan, and (ii) the Annual
Additions allocated as of such date under all qualified defined
contribution plans (determined without regard to the limitations
of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of
as provided in subsection (a)(4).
Subsection (c)--(This subsection applies only to Employers who, in
addition to this Plan, maintain one or more qualified plans which are qualified
defined contribution plans other than Master or Prototype Plans.)
(c) If the Employer also maintains another plan which is a qualified
defined contribution plan other than a Master or Prototype Plan, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of (b)(1) through (b)(6), as
though the other plan were a Master or Prototype Plan, unless the
Employer provides other limitations in the Adoption Agreement.
Subsection (d)--(This subsection applies only to Employers who, in
addition to this Plan, maintain or at any time maintained a qualified defined
benefit plan.)
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan, the sum of any Participant's Defined Benefit
Fraction and Defined Contribution Fraction shall not exceed the combined
EXHIBIT 4.1 page 23
<PAGE>
plan limitation of 1.0 in any Limitation Year. The combined plan
limitation will be met as provided by the Employer in the Adoption
Agreement.
Subsections (e)(1) through (e)(11)--(Definitions.)
--------------------------------------------------
(e)(1) "Annual Additions" means the sum of the following amounts
credited to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee Contributions,
(C) all forfeitures,
(D) amounts allocated, after March 31, 1984, to an Individual
Medical Account which is part of a pension or annuity plan
maintained by the Employer are treated as Annual Additions to a
defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee, as defined in Section 419A(d)(3) of the Code,
under a Welfare Benefit Fund maintained by the Employer are
treated as Annual Additions to a defined contribution plan, and
(E) allocations under a simplified employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce
Employer contributions under subsection (a)(4) shall also be included as
Annual Additions.
(e)(2) "Compensation" means wages as defined in Section 3401(a) of the
Code and all other payments of compensation to an employee by the
employer (in the course of the employer's trade or business) for which
the employer is required to furnish the employee a written statement
under Sections 6041(d) and 6051(a)(3) of the Code. Compensation must be
determined without regard to any rules under Section 3401(a) of the Code
that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the Code.)
For any Self-Employed Individual compensation will mean Earned Income.
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation
year is the compensation actually paid or made available during such
limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of
which is the sum of the Participant's annual benefits (adjusted to an
actuarially equivalent straight life annuity if such benefit is
expressed in a form other than a straight life annuity or qualified
joint and survivor annuity) under all the defined benefit plans (whether
or not terminated) maintained by the Employer, each such annual benefit
computed on the assumptions that the Participant will remain in
employment until the normal retirement age under each such plan (or the
Participant's current age, if later) and that all other factors used to
determine benefits under such plan will remain constant for all future
Limitation Years, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year
EXHIBIT 4.1 page 24
<PAGE>
under Sections 415(b)(1)(A) and 415(d) of the Code or 140 percent of the
Participant's highest average Compensation for 3 consecutive calendar
years of service during which the Participant was active in each such
plan, including any adjustments under Section 415(b) of the Code.
However, if the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which were in existence
on May 6, 1986 then the denominator of the Defined Benefit Fraction
shall not be less than 125 percent of the Participant's total accrued
benefit as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986, under all such defined benefit plans that
met, individually and in the aggregate, the requirements of Section 415
of the Code for all Limitation Years beginning before January 1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator
of which is the sum for the current and all prior Limitation Years of
(A) all Annual Additions (if any) to the Participant's accounts under
each defined contribution plan (whether or not terminated) maintained by
the Employer and (B) all Annual Additions attributable to the
Participant's nondeductible Employee Contributions to all defined
benefit plans (whether or not terminated) maintained by the Employer,
and the Participant's Annual Additions attributable to all Welfare
Benefit Funds, Individual Medical Accounts, and simplified employee
pensions, maintained by the Employer, and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
Limitation Years during which the Participant was an Employee
(regardless of whether the Employer maintained a defined contribution
plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser
of 125 percent of the dollar limitation in effect under Section
415(c)(1)(A) of the Code for each such year or 35 percent of the
Participant's Compensation for each such year.
If the Participant was a participant as of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more
defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, then the numerator of the Defined Contribution
Fraction shall be adjusted if the sum of this fraction and the Defined
Benefit Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment an amount equal to the product of (i) the excess of
the sum of the fractions over 1.0 and (ii) the denominator of this
fraction will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and conditions
of the plan made after May 6, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January 1,
1987.
The annual addition for any limitation year beginning before
January 1, 1987 shall not be recomputed to treat all employee
contributions as annual additions.
(e)(5) "Employer" means the Employer and any Related Employer that
adopts this Plan. In the case of a group of employers which constitutes
a controlled group of corporations (as defined in Section 414(b) of the
Code as modified by Section 415(h)) or which constitutes trades or
businesses (whether or not incorporated) which are under common control
EXHIBIT 4.1 page 25
<PAGE>
(as defined in Section 414(c) of the Code as modified by Section 415(h)
of the Code) or which constitutes an affiliated service group (as
defined in Section 414(m)of the Code) and any other entity required to
be aggregated with the Employer pursuant to regulations issued under
Section 414(o) of the Code, all such employers shall be considered a
single employer for purposes of applying the limitations of this Section
5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical account
as defined in Section 415(l)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified plans of the
Employer must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the
amendment is made.
(e)(9) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with
respect to any Participant the lesser of (A) $30,000 or, if greater, 25
percent of the dollar limitation set forth in Section 415(b)(1) of the
Code, as in effect for the Limitation Year, or (B) 25 percent of the
Participant's Compensation for the Limitation Year. If a short
Limitation Year is created because of an amendment changing the
Limitation Year to a different 12-consecutive-month period, the Maximum
Permissible Amount will not exceed the limitation in (e)(10)(A)
multiplied by a fraction whose numerator is the number of months in the
short Limitation Year and whose denominator is 12.
The compensation limitation referred to in subsection (e)(10)(B)
shall not apply to any contribution for medical benefits within the
meaning of Section 401(h) or Section 419A(f)(2) of the Code after
separation from service which is otherwise treated as an Annual Addition
under Section 419A(d)(2) or Section 415(l)(1) of the Code.
(e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined
in Section 419(e) of the Code.
Article 6. Investment of Contributions.
---------------------------
6.01. Manner of Investment. All contributions made to the Accounts of
--------------------
Participants shall be held for investment by the Trustee. The Accounts of
Participants shall be invested and reinvested only in eligible investments
selected by the Employer in Section 1.14(b), subject to Section 14.10.
6.02. Investment Decisions. Investments shall be directed by the Employer or by
--------------------
each Participant or both, in accordance with the Employer's election in Section
1.14(a). Pursuant to Section 14.04, the Trustee shall have no discretion or
authority with respect to the investment of the Trust Fund.
(a) With respect to those Participant Accounts for which Employer
investment direction is elected, the Employer has the right to direct the
EXHIBIT 4.1 page 26
<PAGE>
Trustee in writing with respect to the investment and reinvestment of
assets comprising the Trust Fund in the Fidelity Fund(s) designated in
Section 1.14(b) and as allowed by the Trustee.
(b) If Participant investment direction is elected, each Participant
shall direct the investment of his Account among the Fidelity Funds
listed in Section 1.14(b). The Participant shall file initial investment
instructions with the Administrator, on such form as the Administrator
may provide, selecting the Funds in which amounts credited to his Account
will be invested.
(1) Except as provided in this Section 6.02, only authorized Plan
contacts and the Participant shall have access to a Participant's
Account. While any balance remains in the Account of a Participant
after his death, the Beneficiary of the Participant shall make
decisions as to the investment of the Account as though the
Beneficiary were the Participant. To the extent required by a
qualified domestic relations order as defined in Section 414(p) of
the Code, an alternate payee shall make investment decisions with
respect to a Participant's Account as though such alternate payee
were the Participant.
(2) If the Trustee receives any contribution under the Plan as to
which investment instructions have not been provided, the Trustee
shall promptly notify the Administrator and the Administrator shall
take steps to elicit instructions from the Participant. The Trustee
shall credit any such contribution to the Participant's Account and
such amount shall be invested in the Fidelity Fund selected by the
Employer for such purposes or, absent Employer selection, in the most
conservative Fidelity Fund listed in Section 1.14(b), until
investment instructions have been received by the Trustee.
(c) All dividends, interest, gains and distributions of any nature
received in respect of Fund Shares shall be reinvested in additional
shares of that Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is
made.
6.03. Participant Directions to Trustee. All Participant initial investment
---------------------------------
instructions filed with the Administrator pursuant to the provisions of Section
6.02 shall be promptly transmitted by the Administrator to the Trustee. A
Participant shall transmit subsequent investment instructions directly to the
Trustee by means of the telephone exchange system maintained by the Trustee for
such purposes. The method and frequency for change of investments will be
determined under the (a) rules applicable to the investments selected by the
Employer in Section 1.14(b) and (b) the additional rules of the Employer, if
any, limiting the frequency of investment changes, which are included in a
separate written administrative procedure adopted by the Employer and accepted
by the Trustee. The Trustee shall have no duty to inquire into the investment
decisions of a Participant or to advise him regarding the purchase, retention or
sale of assets credited to his Account.
Article 7. Right to Benefits.
-----------------
7.01. Normal or Early Retirement. Each Participant who attains his Normal
--------------------------
Retirement Age or, if so provided by the Employer in Section 1.06(b), Early
EXHIBIT 4.1 page 27
<PAGE>
Retirement Age, will have a 100-percent nonforfeitable interest in his Account
regardless of any vesting schedule elected in Section 1.07. If a Participant
retires upon the attainment of Normal or Early Retirement Age, such retirement
is referred to as a normal retirement. Upon his normal retirement the balance of
the Participant's Account, plus any amounts thereafter credited to his Account,
subject to the provisions of Section 7.08, will be distributed to him in
accordance with Article 8.
If a Participant separates from service before satisfying the age
requirements for early retirement, but has satisfied the service requirement,
the Participant will be entitled to elect an early retirement distribution upon
satisfaction of such age requirement.
7.02. Late Retirement. If a Participant continues in the service of the Employer
---------------
after attainment of Normal Retirement Age, he will continue to have a
100-percent nonforfeitable interest in his Account and will continue to
participate in the Plan until the date he establishes with the Employer for his
late retirement. Until he retires, he has a continuing election to receive all
or any portion of his Account. Upon the earlier of his late retirement or the
distribution date required under Section 8.08, the balance of his Account, plus
any amounts thereafter credited to his Account, subject to the provisions of
Section 7.08, will be distributed to him in accordance with Article 8 below.
7.03. Disability Retirement. If so provided by the Employer in Section 1.06(c),
---------------------
a Participant who becomes disabled will have a 100-percent nonforfeitable
interest in his Account, the balance of which Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section 7.08,
will be distributed to him in accordance with Article 8 below. A Participant is
considered disabled if he cannot engage in any substantial, gainful activity
because of a medically determinable physical or mental impairment likely to
result in death or to be of a continuous period of not less than 12 months, and
terminates his employment with the Employer. Such termination of employment is
referred to as a disability retirement. Determinations with respect to
disability shall be made by the Administrator who may rely on the criteria set
forth in Section 1.06(c) as evidence that the Participant is disabled.
7.04. Death. Subject, if applicable, to Section 8.04, if a Participant dies
-----
before the distribution of his Account has commenced, or before such
distribution has been completed, his Account shall become 100 percent vested and
his designated Beneficiary or Beneficiaries will be entitled to receive the
balance or remaining balance of his Account, plus any amounts thereafter
credited to his Account, subject to the provisions of Section 7.08. Distribution
to the Beneficiary or Beneficiaries will be made in accordance with Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change
any prior designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one person
is designated as the Beneficiary, their respective interests shall be as
indicated on the designation form. In the case of a married Participant, the
Participant's spouse shall be deemed to be the designated Beneficiary unless the
Participant's spouse has consented to another designation in the manner
described in Section 8.03(d).
A copy of the death notice or other sufficient documentation must be
filed with and approved by the Administrator. If upon the death of the
Participant there is, in the opinion of the Administrator, no designated
Beneficiary for part or all of the Participant's Account, such amount will be
paid to his surviving spouse or, if none, to his estate (such spouse or estate
shall be deemed to be the Beneficiary for purposes of the Plan). If a
EXHIBIT 4.1 page 28
<PAGE>
Beneficiary dies after benefits to such Beneficiary have commenced, but before
they have been completed, and, in the opinion of the Administrator, no person
has been designated to receive such remaining benefits, then such benefits shall
be paid in a lump sum to the deceased Beneficiary's estate.
7.05. Other Termination of Employment. If a Participant terminates his
-------------------------------
employment for any reason other than death or normal, late, or disability
retirement, he will be entitled to a termination benefit equal to the sum of (a)
the vested percentage(s) of the value of the Matching and/or Fixed/Discretionary
Contributions to his Account, as adjusted for income, expense, gain, or loss,
such percentage(s) determined in accordance with the vesting schedule(s)
selected by the Employer in Section 1.07, and (b) the value of the Deferral,
Employee, Qualified Discretionary and Rollover Contributions to his Account as
adjusted for income, expense, gain or loss. The amount payable under this
Section 7.05 will be subject to the provisions of Section 7.08 and will be
distributed in accordance with Article 8 below.
7.06. Separate Account. If a distribution from a Participant's Account has been
----------------
made to him at a time when he has a nonforfeitable right to less than 100
percent of his Account, the vesting schedule in Section 1.07 will thereafter
apply only to amounts in his Account attributable to Employer contributions
allocated after such distribution. The balance of his Account immediately after
such distribution will be transferred to a separate account which will be
maintained for the purpose of determining his interest therein according to the
following provisions.
At any relevant time prior to a forfeiture of any portion thereof under
Section 7.07, a Participant's nonforfeitable interest in his Account held in a
separate account described in the preceding paragraph will be equal to P(AB +
(RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time
determined under Section 7.05; AB is the account balance of the separate account
at the relevant time; D is the amount of the distribution; and R is the ratio of
the account balance at the relevant time to the account balance after
distribution. Following a forfeiture of any portion of such separate account
under Section 7.07 below, any balance in the Participant's separate account will
remain fully vested and nonforfeitable.
7.07. Forfeitures. If a Participant terminates his employment, any portion of
-----------
his Account (including any amounts credited after his termination of employment)
not payable to him under Section 7.05 will be forfeited by him upon the complete
distribution to him of the vested portion of his Account, if any, subject to the
possibility of reinstatement as described in the following paragraph. For
purposes of this paragraph, if the value of an Employee's vested Account balance
is zero, the Employee shall be deemed to have received a distribution of his
vested interest immediately following termination of employment. Such
forfeitures will be applied to reduce the contributions of the Employer next
payable under the Plan (or administrative expenses of the Plan); the forfeitures
shall be held in a money market fund pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but again becomes an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or gains
of the assets credited to his Account since the date forfeited, will be
recredited to his Account (or to a separate account as described in Section
7.06, if applicable) but only if he repays to the Plan before the earlier of
five years after the date of his reemployment or the date he incurs 5
consecutive 1-year breaks in service following the date of the distribution the
amount previously distributed to him, without interest, under Section 7.05. If
EXHIBIT 4.1 page 29
<PAGE>
an Employee is deemed to receive a distribution pursuant to this Section 7.07,
and the Employee resumes employment before 5 consecutive 1-year breaks in
service, the Employee shall be deemed to have repaid such distribution on the
date of his reemployment. Upon such an actual or deemed repayment, the
provisions of the Plan (including Section 7.06) will thereafter apply as if no
forfeiture had occurred. The amount to be recredited pursuant to this paragraph
will be derived first from the forfeitures, if any, which as of the date of
recrediting have yet to be applied as provided in the preceding paragraph and,
to the extent such forfeitures are insufficient, from a special Employer
contribution to be made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his
Account following his termination of employment, the non-vested portion of his
Account shall be forfeited after the Participant has incurred five consecutive
1-year breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's
withdrawal of Employee contributions.
7.08. Adjustment for Investment Experience. If any distribution under this
------------------------------------
Article 7 is not made in a single payment, the amount retained by the Trustee
after the distribution will be subject to adjustment until distributed to
reflect the income and gain or loss on the investments in which such amount is
invested and any expenses properly charged under the Plan and Trust to such
amounts.
7.09. Participant Loans. If permitted under Section 1.09, the Administrator
-----------------
shall allow Participants to apply for a loan from the Plan, subject to the
following:
(a) Loan Application. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the Administrator
on forms available from the Administrator. Loans shall be made available
to all Participants on a reasonably equivalent basis. For this purpose,
the term "Participant" means any Participant or Beneficiary, including an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, who is a party-in-interest (as determined
under ERISA Section 3(14)) with respect to the Plan except no loans will
be made to (1) an Employee who makes a rollover contribution in
accordance with Section 4.10 who has not satisfied the requirements of
Section 3.01 or (2) a shareholder-employee or Owner-Employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section 318(a)(1) of
the Code), on any day during the taxable year of such corporation, more
than 5% of the outstanding stock of the corporation.
A Participant with an existing loan may not apply for another
loan until the existing loan is paid in full and may not refinance an
existing loan or attain a second loan for the purpose of paying off the
existing loan. A Participant may not apply for more than one loan during
each Plan Year.
(b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other Employees. No loan to any Participant or
Beneficiary can be made to the extent that such loan when added to the
outstanding balance of all other loans to the Participant or Beneficiary
would exceed the lesser of (1) $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans during the one-year period
ending on the day before the loan is made over the outstanding balance of
EXHIBIT 4.1 page 30
<PAGE>
loans from the plan on the date the loan is made, or (2) one-half the
present value of the nonforfeitable Account of the Participant. For the
purpose of the above limitation, all loans from all plans of the Employer
and Related Employers are aggregated. A Participant may not request a
loan for less than $1,000. The Employer may provide that loans only be
made from certain contribution sources within Participant Account(s) by
notifying the Trustee in writing of the restricted source.
Loans may be made for any purpose or if elected by the Employer
in Section 1.09(a), on account of hardship only. A loan will be
considered to be made on account of hardship only if made on account of
an immediate and heavy financial need described in Section 7.10(b)(1).
(c) Terms of Loan. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates
charged by persons in the business of lending money for loans which would
be made under similar circumstances. The determination of a reasonable
rate of interest must be based on appropriate regional factors unless the
Plan is administered on a national basis in which case the Administrator
may establish a uniform reasonable rate of interest applicable to all
regions.
All loans shall by their terms require that repayment (principal
and interest) be amortized in level payments, not less than quarterly,
over a period not extending beyond five years from the date of the loan
unless such loan is for the purchase of a Participant's primary
residence, in which case the repayment period may not extend beyond ten
years from the date of the loan. A Participant may prepay the outstanding
loan balance prior to maturity without penalty.
(d) Security. Loans must be secured by the Participant's Accounts not to
exceed 50 percent of the Participant's vested Account. A Participant must
obtain the consent of his or her spouse, if any, to use a Participant
Account as security for the loan, if the provisions of Section 8.03 apply
to the Participant. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is
to be so secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a Plan representative or
notary public. Such consent shall thereafter be binding with respect to
the consenting spouse or any subsequent spouse with respect to that loan.
(e) Default. The Administrator shall treat a loan in default if
(1) any scheduled repayment remains unpaid more than 90 days or
(2) there is an outstanding principal balance existing on a
loan after the last scheduled repayment date.
Upon default or termination of employment, the entire
outstanding principal and accrued interest shall be immediately due and
payable. If a distributable event (as defined by the Code) has occurred,
the Administrator shall direct the Trustee to foreclose on the promissory
note and offset the Participant's vested Account by the outstanding
balance of the loan. If a distributable event has not occurred, the
Administrator shall direct the Trustee to foreclose on the promissory
note and offset the Participant's vested Account as soon as a
distributable event occurs.
EXHIBIT 4.1 page 31
<PAGE>
(f) Pre-existing loans. The provision in paragraph (a) of this Section
7.09 limiting a Participant to one outstanding loan shall not apply to
loans made before the Employer adopted this prototype plan document. A
Participant may not apply for a new loan until all outstanding loans made
before the Employer adopted this prototype plan have been paid in full.
The Trustee may accept any loans made before the Employer adopted this
prototype plan document except such loans which require the Trustee to
hold as security for the loan property other than the Participant's
vested Account.
As of the effective date of amendment of this Plan in Section
1.01(g)(2), the Trustee shall have the right to reamortize the
outstanding principal balance of any Participant loan that is delinquent.
Such reamortization shall be based upon the remaining life of the loan
and the original maturity date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account used as a security interest held by the plan
by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the Account payable at
the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's vested
Account (determined without regard to the preceding sentence) is payable
to the surviving spouse, then the Account shall be adjusted by first
reducing the vested Account by the amount of the security used as
repayment of the loan, and then determining the benefit payable to the
surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent
that such loan when added to the outstanding balance of all other loans
to the Participant or Beneficiary would exceed the lesser of (1) $50,000
reduced by the excess (if any) of the highest outstanding balance of
loans during the one-year period ending on the day before the loan is
made over the outstanding balance of loans from the plan on the date the
loan is made or (2) one-half the present value of the nonforfeitable
Account of the Participant. For the purpose of the above limitation, all
loans from all plans of the Employer and Related Employers are
aggregated.
7.10. In-Service/Hardship Withdrawals. Subject to the provisions of Article 8, a
-------------------------------
Participant shall not be permitted to withdraw any Employer or Employee
Contributions (and earnings thereon) prior to retirement or termination of
employment, except as follows:
(a) Age 59 1/2. If permitted under Section 1.11(b), a Participant who has
attained the age of 59 1/2 is permitted to withdraw upon request all or any
portion of the Accounts specified by the Employer in 1.11(b).
(b) Hardship. If permitted under Section 1.10, a Participant may apply to
the Administrator to withdraw some or all of his Deferral Contributions (and
earnings thereon accrued as of December 31, 1988) and, if applicable, Rollover
Contributions and such other amounts allowed by a predecessor plan, if such
withdrawal is made on account of a hardship. For purposes of this Section, a
distribution is made on account of hardship if made on account of an immediate
and heavy financial need of the Employee where such Employee lacks other
available resources. Determinations with respect to hardship shall be made by
the Administrator and shall be conclusive for purposes of the Plan, and shall be
based on the following special rules:
(1) The following are the only financial needs considered immediate
and heavy: expenses incurred or necessary for medical care (within the
EXHIBIT 4.1 page 32
<PAGE>
meaning of Section 213(d) of the Code) of the Employee, the Employee's
spouse, children, or dependents; the purchase (excluding mortgage
payments) of a principal residence for the Employee; payment of
tuition and related educational fees for the next twelve (12) months
of post-secondary education for the Employee, the Employee's spouse,
children or dependents; or the need to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the Employee's
principal residence.
(2) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other than the
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all plans maintained by
the Employer;
(ii) The Employee suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the
date of his hardship distribution. The suspension must also
apply to all elective contributions and Employee Contributions
to all other qualified plans and non-qualified plans maintained
by the Employer, other than any mandatory employer contribution
portion of a defined benefit plan, including stock option, stock
purchase and other similar plans, but not including health and
welfare benefit plans (other than the cash or deferred
arrangement portion of a cafeteria plan);
(iii) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary
to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution); and
(iv) The Employee agrees to limit Deferral Contributions
(elective contributions)to the Plan and any other qualified plan
maintained by the Employer for the Employee's taxable year
immediately following the taxable year of the hardship
distribution to the applicable limit under Section 402(g) of the
Code for such taxable year less the amount of such Employee's
Deferral Contributions for the taxable year of the hardship
distribution.
(3) A Participant must obtain the consent of his or her spouse, if
any, to obtain a hardship withdrawal, if the provisions of Section
8.03 apply to the Participant.
(c) Employee Contributions. A Participant may elect to withdraw, in
cash, up to one hundred percent of the amount then credited to his
Employee Contribution Account. Such withdrawals shall be limited to one
(1) per Plan Year unless this prototype plan document is an amendment of
a prior plan document, in which case the rules and restrictions
governing Employee Contribution withdrawals, if any, are incorporated
herein by reference.
7.11. Prior Plan In-Service Distribution Rules. If designated by the Employer in
----------------------------------------
Section 1.11(b), a Participant shall be entitled to withdraw at anytime prior to
his termination of employment, subject to the provisions of Article 8 and the
prior plan, any vested Employer Contributions maintained in a Participant's
Account for the specified period of time.
EXHIBIT 4.1 page 33
<PAGE>
Article 8. Distribution of Benefits Payable After Termination of Service.
-------------------------------------------------------------
8.01. Distribution of Benefits to Participants and Beneficiaries.
----------------------------------------------------------
(a) Distributions from the Trust to a Participant or to the Beneficiary
of the Participant shall be made in a lump sum in cash or, if elected by
the Employer in Section 1.11, under a systematic withdrawal plan
(installment(s)) upon retirement, death, disability, or other termination
of employment, unless another form of distribution is required or
permitted in accordance with paragraph (d) of this Section 8.01 or
Sections 1.11(c), 8.02, 8.03, 8.04 or 11.02. A distribution may be made
in Fund Shares, at the election of the Participant, pursuant to the
qualifying rollover of such distribution to a Fidelity Investments
individual retirement account.
(b) Distributions under a systematic withdrawal plan must be made in
substantially equal annual, or more frequent, installments, in cash, over
a period certain which does not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary, or, if the Participant dies prior to the commencement of his
benefits the life expectancy of the Participant's Beneficiary, as further
described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s)
was, $3,500 or less, the balance of such Account shall be distributed in
a lump sum as soon as practicable following retirement, disability, death
or other termination of employment.
(d) This paragraph (d) applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article 8, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. The following definitions shall apply for purposes
of this paragraph (d):
(1) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code;
and the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. However, in
EXHIBIT 4.1 page 34
<PAGE>
the case of an eligible rollover distribution to a surviving spouse,
an eligible retirement plan is an individual retirement account or
individual retirement annuity.
(3) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
8.02. Annuity Distributions. If so provided in Section 1.11(c), a Participant
---------------------
may elect distributions made in whole or in part in the form of an annuity
contract subject to the provisions of Section 8.03.
(a)An annuity contract distributed under the Plan must be purchased from
an insurance company and must be nontransferable. The terms of an
annuity contract shall comply with the requirements of the Plan and
distributions under such contract shall be made in accordance with
Section 401(a)(9) of the Code and the regulations thereunder.
(b)The payment period of an annuity contract distributed to the
Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or
designated Beneficiary, the payment period of an annuity contract may be
for as long as either the Participant or his spouse or designated
Beneficiary lives. Such an annuity may provide for an annuity certain
feature for a period not exceeding the life expectancy of the
Participant. If the annuity is payable to the Participant and his spouse
such period may not exceed the joint life and last survivor expectancy
of the Participant and his spouse, or, if the annuity is payable to the
Participant and a designated Beneficiary, the joint life and last
survivor expectancy of the Participant and such Beneficiary. If the
Participant dies prior to the commencement of his benefits, the payment
period of an annuity contract distributed to the Beneficiary of the
Participant may be as long as the Participant's Beneficiary lives, and
may provide for an annuity certain feature for a period not exceeding
the life expectancy of the Beneficiary. Any annuity contract distributed
under the Plan must provide for nonincreasing payments.
8.03. Joint and Survivor Annuities/Preretirement Survivor Annuities.
-------------------------------------------------------------
(a) Application. The provisions of this Section supersede any conflicting
-----------
provisions of the Plan; however, paragraph (b) of this Section shall not
apply if the Participant's Account does not exceed or at the time of any
prior distribution did not exceed $3,500. A Participant is described in
this Section only if (i) the Participant has elected distribution of his
Account in the form of an Annuity Contract in accordance with Section
8.02, or (ii) the Trustee has directly or indirectly received a transfer
of assets from another plan (including a predecessor plan) to which
Section 401(a)(11) of the Code applies with respect to such Participant.
(b) Retirement Annuity. Unless the Participant elects to waive the
------------------
application of this subsection in a manner satisfying the requirements of
subsection (d) below, to the extent applicable to the Participant, within
the 90-day period preceding his Annuity Starting Date (which election may
be revoked, and if revoked, remade, at any time in such period), the
EXHIBIT 4.1 page 35
<PAGE>
vested Account due any Participant to whom this subsection (b) applies
will be paid to him by the purchase and delivery to him of an annuity
contract described in Section 8.02 providing a life annuity only form of
benefit or, if the Participant is married as of his Annuity Starting
Date, providing an immediate annuity for the life of the Participant with
a survivor annuity for the life of the Participant's spouse (determined
as of the date of distribution of the contract) which is 50 percent of
the amount of the annuity which is payable during the joint lives of the
Participant and such spouse. The Participant may elect to receive
distribution of his benefits in the form of such annuity as of the
earliest date on which he could elect to receive retirement benefits
under the Plan. Within the period beginning 90 days prior to the
Participant's Annuity Starting Date and ending 30 days prior to such
Date, the Administrator will provide such Participant with a written
explanation of (1) the terms and conditions of the annuity contract
described herein, (2) the Participant's
to make, and the effect of, an election to waive application of this
subsection, (3) the rights of the Participant's spouse under subsection
(d), and (4) the right to revoke and the period of time necessary to
revoke the election to waive application of this subsection.
(c) Annuity Death Benefit. Unless the Participant elects to waive the
---------------------
application of this subsection in a manner satisfying the requirements of
subsection (d) below at any time within the applicable election period
(which election may be revoked, and if revoked, remade, at any time in
such period), if a married Participant to whom this Section applies dies
before his Annuity Starting Date, then notwithstanding any designation of
a Beneficiary to the contrary, 50 percent of his vested Account will be
applied to purchase an annuity contract described in Section 8.02
providing an annuity for the life of the Participant's surviving spouse,
which contract will then be promptly distributed to such spouse. In lieu
of the purchase of such an annuity contract, the spouse may elect in
writing to receive distributions under the Plan as if he or she had been
designated by the Participant as his Beneficiary with respect to 50
percent of his Account. For purposes of this subsection, the applicable
election period will commence on the first day of the Plan Year in which
the Participant attains age 35 and will end on the date of the
Participant's death, provided that in the case of a Participant who
terminates his employment the applicable election period with respect to
benefits accrued prior to the date of such termination will in no event
commence later than the date of his termination of employment. A
Participant may elect to waive the application of this subsection prior
to the Plan Year in which he attains age 35, provided that any such
waiver will cease to be effective as of the first day of the Plan Year in
which the Participant attains age 35.
The Administrator will provide a Participant to whom this subsection
applies with a written explanation with respect to the annuity death
benefit described in this subsection (c) comparable to that required
under subsection (b) above. Such explanation shall be furnished within
whichever of the following periods ends last: (1) the period beginning
with the first day of the Plan Year in which the Participant reaches age
32 and ending with the end of the Plan Year preceding the Plan Year in
which he reaches age 35, (2) a reasonable period ending after the
Employee becomes a Participant, (3) a reasonable period ending after this
Section 8.04 first becomes applicable to the Participant in accordance
with Section 8.04(a), (4) in the case of a Participant who separates from
service before age 35, a reasonable period of time ending after
separation from service. For purposes of the preceding sentence, the
EXHIBIT 4.1 page 36
<PAGE>
two-year period beginning one year prior to the date of the event
described in clause (2), (3) or (4), whichever is applicable, and ending
one year after such date shall be considered reasonable, provided, that
in the case of a Participant who separates from service under (4) above
and subsequently recommences employment with the Employer, the applicable
period for such Participant shall be redetermined in accordance with this
subsection.
(d) Requirements of Elections. This subsection will be satisfied with
-------------------------
respect to a waiver or designation which is required to satisfy this
subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing, which
consent must acknowledge the effect of such waiver or designation and
be witnessed by a notary public or Plan representative, or
(2) the Participant establishes to the satisfaction of the
Administrator that the consent of the Participant's spouse cannot be
obtained because there is no spouse, because the spouse cannot be
located, or because of such other circumstances as the Secretary of
Treasury may prescribe.
Any consent by a spouse, or establishment that the consent of a
spouse may not be obtained, will be effective only with respect to a
specific Beneficiary (including any class of Beneficiaries or any
contingent Beneficiaries) or form of benefits identified in the
Participant's waiver or designation, unless the consent of the spouse
expressly permits designations by the Participant without any
requirement of further consent by the spouse. A consent which permits
such designations by the Participant shall acknowledge that the
spouse has the right to limit consent to a specific Beneficiary and
form of benefits and that the spouse voluntarily elects to relinquish
both such rights. A consent by a spouse shall be irrevocable once
made. Any such consent, or establishment that such consent may not be
obtained, will be effective only with respect to such spouse. For
purposes of subsections (b) and (c) above, no consent of a spouse
shall be valid unless the notice required by whichever subsection is
applicable has been provided to the Participant.
(e) Former Spouse. For purposes of this Section 8.03, a former spouse of
-------------
a Participant will be treated as the spouse or surviving spouse of the
Participant, and a current spouse will not be so treated, to the extent
required under a qualified domestic relations order, as defined in
Section 414(p) of the Code.
(f) Vested Account Balance. For purposes of this Section, vested Account
----------------------
shall include the aggregate value of the Participant's vested Account
derived from Employer and Employee Contributions (including rollovers),
whether vested before or upon death. The provisions of this Section shall
apply to a Participant who is vested in amounts attributable to Employer
contributions, Employee Contributions, or both, upon death or at the time
of distribution.
8.04 Installment Distributions. This Section shall be interpreted and applied in
-------------------------
accordance with the regulations under Section 401(a)(9) of the Code, including
the minimum distribution incidental benefit requirement of Section 1.401(a)(9)-2
of the Proposed Treasury Regulations, or any successor regulations of similar
import.
(a) In General. If a Participant's benefit may be distributed in
----------
accordance with Section 8.01(b), the amount to be distributed for each
EXHIBIT 4.1 page 37
<PAGE>
calendar year for which a minimum distribution is required shall be at
least an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the life expectancy of the
Participant or Beneficiary or the joint life and last survivor
expectancy of the Participant and his Beneficiary, whichever is
applicable. For calendar years beginning before January 1, 1989, if a
Participant's Beneficiary is not his spouse, the method of distribution
selected must insure that at least 50 percent of the present value of
the amount available for distribution is paid within the life expectancy
of the Participant. For calendar years beginning after December 31,
1988, the amount to be distributed for each calendar year shall not be
less than an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the lesser of (1) the
applicable life expectancy under Section 8.01(b), or (2) if a
Participant's Beneficiary is not his spouse, the applicable divisor
determined under Section 1.401(a)(9)-2, Q&A 4 of the Proposed Treasury
Regulations, or any successor regulations of similar import.
Distributions after the death of the Participant shall be made using the
applicable life expectancy under (1) above, without regard to Section
1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section
8.08(b), occurs shall be made on or before the Participant's required
beginning date, as so determined. Minimum distributions for other
calendar years shall be made on or before the close of such calendar
year.
(b) Additional Requirements for Distributions After Death of
--------------------------------------------------------
Participant.
------------
(1) Distribution beginning before Death. If the Participant dies
-----------------------------------
before distribution of his benefits has begun, distributions shall be
made in accordance with the provisions of this paragraph.
Distributions under Section 8.01(a) shall be completed by the close
of the calendar year in which the fifth anniversary of the death of
the Participant occurs. Distributions under Section 8.01(b) shall
commence, if the Beneficiary is not the Participant's spouse, not
later than the close of the calendar year immediately following the
calendar year in which the death of the Participant occurs.
Distributions under Section 8.01(b) to a Beneficiary who is the
Participant's surviving spouse shall commence not later than the
close of the calendar year in which the Participant would have
attained age 70 1/2 or, if later, the close of the calendar year
immediately following the calendar year in which the death of the
Participant occurs. In the event such spouse dies prior to the date
distribution to him or her commences, he or she will be treated for
purposes of this subsection (other than the preceding sentence) as if
he or she were the Participant. If the Participant has not designated
a Beneficiary, or the Participant or Beneficiary has not effectively
selected a method of distribution, distribution of the Participant's
benefit shall be completed by the close of the calendar year in which
the fifth anniversary of the death of the Participant occurs.
Any amount paid to a child of the Participant will be treated as if
it had been paid to the surviving spouse if the amount becomes
payable to the surviving spouse when the child reaches the age of
majority.
For purposes of this subsection (b)(1), the life expectancy of a
Beneficiary who is the Participant's surviving spouse shall be
EXHIBIT 4.1 page 38
<PAGE>
recalculated annually unless the Participant's spouse irrevocably
elects otherwise prior to the time distributions are required to
begin. Life expectancy shall be computed in accordance with the
provisions of subsection (a) above.
(2) Distribution beginning after Death. If the Participant dies after
----------------------------------
distribution of his benefits has begun, distributions to the
Participant's Beneficiary will be made at least as rapidly as under
the method of distribution being used as of the date of the
Participant's death.
For purposes of this Section 8.04(b), distribution of a
Participant's interest in his Account will be considered to begin as of
the Participant's required beginning date, as determined under Section
8.08(b). If distribution in the form of an annuity irrevocably commences
prior to such date, distribution will be considered to begin as of the
actual date distribution commences.
(c) Life Expectancy. For purposes of this Section, life expectancy shall
---------------
be recalculated annually in the case of the Participant or a Beneficiary
who is the Participant's spouse unless the Participant or Beneficiary
irrevocably elects otherwise prior to the time distributions are required
to begin. If not recalculated in accordance with the foregoing, life
expectancy shall be calculated using the attained age of the Participant
or Beneficiary, whichever is applicable, as of such individual's birth
date in the first year for which a minimum distribution is required
reduced by one for each elapsed calendar year since the date life
expectancy was first calculated. For purposes of this Section, life
expectancy and joint life and last survivor expectancy shall be computed
by use of the expected return multiples in Table V and VI of section
1.72-9 of the income tax Regulations.
A Participant's interest in his Account for purposes of this Section
8.04 shall be determined as of the last valuation date in the calendar
year immediately preceding the calendar year for which a minimum
distribution is required, increased by the amount of any contributions
allocated to, and decreased by any distributions from, such Account after
the valuation date. Any distribution for the first year for which a
minimum distribution is required made after the close of such year shall
be treated as if made prior to the close of such year.
8.05. Immediate Distributions. If the Account distributable to a Participant
-----------------------
exceeds, or at the time of any prior distribution exceeded, $3,500, no
distribution will be made to the Participant before he reaches his Normal
Retirement Age (or age 62, if later), unless the written consent of the
Participant has been obtained. Such consent shall be made in writing within the
90-day period ending on the Participant's Annuity Starting Date. Within the
period beginning 90 days before the Participant's Annuity Starting Date and
ending 30 days before such Date, the Administrator will provide such Participant
with written notice comparable to the notice described in Section 8.03(b)
containing a general description of the material features and an explanation of
the relative values of the optional forms of benefit available under the Plan
and informing the Participant of his right to defer receipt of the distribution
until his Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the
Participant is subject to the provisions of Section 8.03(a), unless the
distribution will be made in the form of the applicable retirement annuity
contract described in Section 8.03(b). A spouse's consent to early distribution,
if required, must satisfy the requirements of Section 8.03(d).
EXHIBIT 4.1 page 39
<PAGE>
Neither the consent of the Participant nor the Participant's spouse shall
be required to the extent that a distribution is required to satisfy Section
401(a)(9) or Section 415 of the Code. In addition, upon termination of the Plan
if it does not offer an annuity option (purchased from a commercial provider)
and if the Employer or any Related Employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)) the Participant's Account will, without the
Participant's consent, be distributed to the Participant. However, if any
Related Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the Code) then
the Participant's Account will be transferred, without the Participant's
consent, to the other plan if the Participant does not consent to an immediate
distribution.
8.06. Determination of Method of Distribution. The Participant will determine
---------------------------------------
the method of distribution of benefits to himself and may determine the method
of distribution to his Beneficiary. Such determination will be made prior to the
time benefits become payable under the Plan. If the Participant does not
determine the method of distribution to his Beneficiary or if the Participant
permits his Beneficiary to override his determination, the Beneficiary, in the
event of the Participant's death, will determine the method of distribution of
benefits to himself as if he were the Participant. A determination by the
Beneficiary must be made no later than the close of the calendar year in which
distribution would be required to begin under Section 8.04(b) or, if earlier,
the close of the calendar year in which the fifth anniversary of the death of
the Participant occurs.
8.07. Notice to Trustee. The Administrator will notify the Trustee in writing
-----------------
whenever any Participant or Beneficiary is entitled to receive benefits under
the Plan. The Administrator's notice shall indicate the form of benefits that
such Participant or Beneficiary shall receive and (in the case of distributions
to a Participant) the name of any designated Beneficiary or Beneficiaries.
8.08. Time of Distribution. In no event will distribution to a Participant be
--------------------
made latest than the earlier of the dates described in (a) and (b) below:
(a) Absent the consent of the Participant (and his spouse, if
appropriate), the 60th day after the close of the Plan Year in which
occurs the later of the date on which the Participant attains age 65, the
date on which the Participant ceases to be employed by the Employer, or
the 10th anniversary of the year in which the Participant commenced
participation in the Plan; and
(b) April 1 of the calendar year first following the calendar year in
which the Participant attains age 70 1/2 or, in the case of a Participant
who had attained age 70 1/2 before January 1, 1988, the required
beginning date determined in accordance with (1) or (2) below:
(1) The required beginning date of a Participant who is not a
5-percent owner is the first day of April of the calendar year
following the calendar year in which the later of retirement or
attainment of age 70 1/2 occurs.
(2) The required beginning date of a Participant who is a 5-percent
owner during any year beginning after December 31, 1979, is the first
day of April following the later of
(A) the calendar year in which the Participant attains age
70 1/2, or
EXHIBIT 4.1 page 40
<PAGE>
(B) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the
Participant retires.
Notwithstanding the foregoing, in the case of a Participant who attained
age 70 1/2 during 1988 and who had not retired prior to January 1, 1989, the
required beginning date described in this paragraph shall be April 1, 1990.
Notwithstanding (a) above, the failure of a Participant (and spouse) to
consent to a distribution while a benefit is immediately distributable, within
the meaning of Section 8.05, shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy (a) above.
Once distributions have begun to a 5-percent owner under (b) above, they
must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
For purposes of (b) above, a Participant is treated as a 5-percent owner
if such Participant is a 5-percent owner as defined in Section 416(i) of the
Code (determined in accordance with Section 416 but without regard to whether
the Plan is top-heavy) at any time during the Plan Year ending with or within
the calendar year in which such owner attains age 66 1/2 or any subsequent Plan
Year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution rules
set forth in this Section.
8.09. Whereabouts of Participants and Beneficiaries. The Administrator will at
---------------------------------------------
all times be responsible for determining the whereabouts of each Participant or
Beneficiary who may be entitled to benefits under the Plan and will at all times
be responsible for instructing the Trustee in writing as to the current address
of each such Participant or Beneficiary. The Trustee will be entitled to rely on
the latest written statement received from the Administrator as to such
addresses. The Trustee will be under no duty to make any distributions under the
Plan unless and until it has received written instructions from the
Administrator satisfactory to the Trustee containing the name and address of the
distributee, the time when the distribution is to occur, and the form which the
distribution will take. Notwithstanding the foregoing, if the Trustee attempts
to make a distribution in accordance with the Administrator's instructions but
is unable to make such distribution because the whereabouts of the distributee
is unknown, the Trustee will notify the Administrator of such situation and
thereafter the Trustee will be under no duty to make any further distributions
to such distributee until it receives further written instructions from the
Administrator. If a benefit is forfeited because the Administrator determines
that the Participant or Beneficiary cannot be found, such benefit will be
reinstated by the Sponsor if a claim is filed by the Participant or Beneficiary
with the Administrator and the Administrator confirms the claim to the Sponsor.
Article 9. Top-Heavy Provisions.
--------------------
9.01 Application. If the Plan is or becomes a Top-Heavy Plan in any Plan Year or
-----------
is automatically deemed to be Top-Heavy in accordance with the Employer's
election in Section 1.12(a)(1) of the Adoption Agreement, the provisions of this
Article 9 shall supersede any conflicting provision in the Plan.
EXHIBIT 4.1 page 41
<PAGE>
9.02 Definitions. For purposes of this Article 9, the following terms have the
-----------
meanings set forth below:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary of
------------
any such Employee) who at any time during the determination period was
(1) an officer of the Employer whose annual Compensation exceeds 50
percent of the dollar limitation under Section 415(b)(1)(A) of the Code,
(2) an owner (or considered an owner under Section 318 of the Code) of
one of the ten largest interests in the Employer if such individual's
annual Compensation exceeds the dollar limitation under Section
415(c)(1)(A) of the Code, (3) a 5-percent owner of the Employer, or (4) a
1-percent owner of the Employer who has annual Compensation of more than
$150,000. For purposes of this paragraph, the determination period is the
Plan Year containing the Determination Date and the four preceding Plan
Years. The determination of who is a Key Employee shall be made in
accordance with Section 416(i)(1) of the Code and the regulations
thereunder. Annual Compensation means compensation as defined in Section
5.03(e)(2), but including amounts contributed by the Employer pursuant to
a salary reduction agreement which are excludable from the employee's
gross income under Section 125, Section 402(a)(8), and Section 403(b) of
the Code.
(b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following
--------------
conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group,
(2) the Plan is a part of a Required Aggregation Group but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60 percent, or
(3) the Plan is a part of a Required Aggregation Group and a
Permissive Aggregation Group and the Top-Heavy Ratio for both Groups
exceeds 60 percent.
(c) Top-Heavy Ratio.
---------------
(1) With respect to this Plan, or with respect to any Required
Aggregation Group or Permissive Aggregation Group that consists
solely of defined contribution plans (including any simplified
employee pension plans) and the Employer has not maintained any
defined benefit plan which during the 5-year period ending on the
determination date(s) has or has had accrued benefits, the Top-Heavy
Ratio is a fraction, the numerator of which is the sum of the account
balances of all Key Employees under the plans as of the Determination
Date (including any part of any account balance distributed in the
5-year period ending on the Determination Date), and the denominator
of which is the sum of all account balances (including any part of
any account balance distributed in the 5-year period ending on the
Determination Date) of all participants under the plans as of the
Determination Date. Both the numerator and denominator of the
Top-Heavy Ratio shall be increased, to the extent required by Section
416 of the Code, to reflect any contribution which is due but unpaid
as of the Determination Date.
(2) With respect to any Required Aggregation Group or Permissive
Aggregation Group that includes one or more defined benefit plans
which, during the 5-year period ending on the Determination Date, has
covered or could cover a Participant in this Plan, the Top-Heavy
Ratio is a fraction, the numerator of which is the sum of the account
EXHIBIT 4.1 page 42
<PAGE>
balances under the defined contribution plans for all Key Employees
and the present value of accrued benefits under the defined benefit
plans for all Key Employees, and the denominator of which is the sum
of the account balances under the defined contribution plans for all
participants and the present value of accrued benefits under the
defined benefit plans for all participants. Both the numerator and
denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the
5-year period ending on the Determination Date and any contribution
due but unpaid as of the Determination Date.
(3) For purposes of (1) and (2) above, the value of Accounts and the
present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in
Section 416 of the Code and the regulations thereunder for the first
and second plan years of a defined benefit plan. The Account and
accrued benefits of a Participant (A) who is not a Key Employee but
who was a Key Employee in a prior year, or (B) who has not been
credited with at least one Hour of Service with the Employer at any
time during the 5-year period ending on the Determination Date, will
be disregarded. The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and transfers are taken
into account, shall be made in accordance with Section 416 of the
Code and the regulations thereunder. Deductible employee
contributions shall not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans, the value of
Accounts and accrued benefits shall be calculated with reference to
the Determination Dates that fall within the same calendar year.
For purposes of determining if the Plan, or any other plan
included in a Required Aggregation Group of which this Plan is a
part, is a Top-Heavy Plan, the accrued benefit in a defined benefit
plan 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 maintained by the Employer, 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 rate
of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group plus any
----------------------------
other qualified plans of the Employer or a Related Employer which, when
considered as a group with the Required Aggregation Group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group.
--------------------------
(1) Each qualified plan of the Employer or Related Employer in which
at least one Key Employee participates, or has participated at any
time during the determination period (regardless of whether the plan
has terminated), and
(2) any other qualified plan of the Employer or Related Employer
which enables a plan described in (1) above to meet the requirements
of Sections 401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent to the
------------------
first Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date.
--------------
EXHIBIT 4.1 page 43
<PAGE>
(h) Present Value. Present value shall be based only on the interest rate
-------------
and mortality table specified in the Adoption Agreement.
9.03. Minimum Contribution.
--------------------
(a) Except as otherwise provided in (b) and (c) below, the
Fixed/Discretionary Contributions made on behalf of any Participant who
is not a Key Employee shall not be less than the lesser of 3 percent (or
such other percent elected by the Employer in Section 1.12(c)) of such
Participant's Compensation or, in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401 of
the Code, the largest percentage of Employer contributions, as a
percentage of the first $200,000 of the Key Employee's Compensation, made
on behalf of any Key Employee for that year. If the Employer selected the
Integrated Formula in Section 1.05(a)(2), the minimum contribution shall
be determined under paragraph (e) of this Section 9.03. Further, the
minimum contribution under this Section 9.03 shall be made even though,
under other Plan provisions, the Participant would not otherwise be
entitled to receive a contribution, or would have received a lesser
contribution for the year, because (1) the Participant failed to complete
1,000 Hours of Service or any equivalent service requirement provided in
the Adoption Agreement; or (2) the Participant's Compensation was less
than a stated amount.
(b) The provisions of (a) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a
defined benefit plan maintained by the Employer shall not be less than 5
percent of such Participant's Compensation, unless the Employer has
provided in Section 1.12(c) that the minimum contribution requirement
will be met in the other plan or plans of the Employer.
(d) The minimum contribution required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not
be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(e) If the Employer elected an Integrated Formula in Section 1.05(a)(2),
the allocation steps in Section 4.06(b)(2) shall be preceded by the
following steps:
(1) The Discretionary Employer Contributions will be allocated
to each eligible Participant (as determined under this Section 9.03)
in the ratio that the Participant's Compensation bears to all
Participants' Compensation, but not in excess of 3%(or such other
percent elected by the Employer in Section 1.12(c).
(2) Any Discretionary Employer Contributions remaining after
(e)(1) above will be allocated to each eligible Participant in the
ratio that the Participant's Excess Compensation for the Plan Year
bears to the Excess Compensation of all eligible Participants, but
not in excess of 3%(or such other percent elected by the Employer in
Section 1.12(c)).
9.04. Adjustment to the Limitation on Contributions and Benefits. If this Plan
----------------------------------------------------------
is in Top-Heavy status, the number 100 shall be substituted for the number 125
in subsections (e)(3) and (e)(4) of Section 5.03. However, this substitution
EXHIBIT 4.1 page 44
<PAGE>
shall not take effect with respect to this Plan in any Plan Year in which the
following requirements are satisfied:
(a)The Employer contributions for such Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a
defined benefit plan maintained by the Employer is not less than 7 1/2
percent of such Participant's Compensation.
(b)The sum of the present value as of the Determination Date of (1) the
aggregate accounts of all Key Employees under all defined contribution
plans of the Employer and (2) the cumulative accrued benefits of all Key
Employees under all defined benefit plans of the Employer does not
exceed 90 percent of the same amounts determined for all Participants
under all plans of the Employer that are Top-Heavy Plans, excluding
Accounts and accrued benefits for Employees who formerly were but are no
longer Key Employees.
The substitutions of the number 100 for 125 shall not take effect in
any Limitation Year with respect to any Participant for
whom no benefits are accrued or contributions made for such Year.
9.05. Minimum Vesting. For any Plan Year in which the Plan is a Top-Heavy Plan
---------------
and all Plan Years thereafter, the Top-Heavy vesting schedule elected in Section
1.12(d) will automatically apply to the Plan. The Top-Heavy vesting schedule
applies to all benefits within the meaning of Section 411(a)(7) of the Code
except those attributable to Employee Contributions or those already subject to
a vesting schedule which vests at least as rapidly in all cases as the schedule
elected in Section 1.12(d), including benefits accrued before the Plan becomes a
Top-Heavy Plan. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as a Top-Heavy Plan changes
for any Plan Year. However, this Section 9.05 does not apply to the Account of
any Employee who does not have an Hour of Service after the Plan has initially
become a Top-Heavy Plan and such Employee's Account attributable to Employer
Contributions will be determined without regard to this Section 9.05.
Article 10. Amendment and Termination.
-------------------------
10.01 Amendment by Employer. The Employer reserves the authority, subject to
---------------------
the provisions of Article 1 and Section 10.03, to
amend the Plan:
(a) Changes to Elections Contained in the Adoption Agreement. By filing
--------------------------------------------------------
with the Trustee an amended Adoption Agreement, executed by the Employer
only, on which said Employer has indicated a change or changes in
provisions previously elected by it. Such changes are to be effective on
the effective date of such amended Adoption Agreement except that
retroactive changes to a previous election or elections pursuant to the
regulations issued under Section 401(a)(4) of the Code shall be
permitted. Any such change notwithstanding, no Participant's Account
shall be reduced by such change below the amount to which the Participant
would have been entitled if he had voluntarily left the employ of the
Employer immediately prior to the date of the change. The Employer may
from time to time make any amendment to the Plan that may be necessary to
satisfy Sections 415 or 416 of the Code because of the required
aggregation of multiple plans by completing overriding plan language in
the Adoption Agreement. The Employer may also add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as an
individually designed plan; or
EXHIBIT 4.1 page 45
<PAGE>
(b) Other Changes. By amending any provision of the Plan for any reason
-------------
other than those specified in (a) above. However, upon making such
amendment, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, the Employer may no longer participate in
this prototype plan arrangement and will be deemed to have an
individually designed plan. Following such amendment, the Trustee may
transfer the assets of the Trust to the trust forming part of such newly
adopted plan upon receipt of sufficient evidence (such as a determination
letter or opinion letter from the Internal Revenue Service or an opinion
of counsel satisfactory to the Trustee) that such trust will be a
qualified trust under the Code.
10.02. Amendment by Prototype Sponsor. The Prototype Sponsor may in its
------------------------------
discretion amend the Plan or the Adoption Agreement at any time, subject to the
provisions of Article 1 and Section 10.03, and provided that the Prototype
Sponsor mails a copy of such amendment to the Employer at its last known address
as shown on the books of the Prototype Sponsor.
10.03. Amendments Affecting Vested and/or Accrued Benefits.
---------------------------------------------------
(a)Except as permitted by Section 10.04, no amendment to the Plan shall
be effective to the extent that it has the effect of decreasing a
Participant's Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment.
Furthermore, if the vesting schedule of the Plan is amended, the
nonforfeitable interest of a Participant in his Account, determined as
of the later of the date the amendment is adopted or the date it becomes
effective, will not be less than the Participant's nonforfeitable
interest in his Account determined without regard to such amendment.
(b)If the Plan's vesting schedule is amended, including any amendment
resulting from a change to or from Top-Heavy Plan status, or the Plan is
amended in any way that directly or indirectly affects the computation
of a Participant's nonforfeitable interest in his Account, each
Participant with at least three (3) Years of Service for Vesting with
the Employer may elect, within a reasonable period after the adoption of
the amendment, to have the nonforfeitable percentage of his Account
computed under the Plan without regard to such amendment. The
Participant's election may be made within 60 days from the latest of (1)
the date the amendment is adopted, (2) the date the amendment becomes
effective, or (3) the date the Participant is issued written notice of
the amendment by the Employer or the Administrator.
10.04. Retroactive Amendments. An amendment made by the Prototype Sponsor in
----------------------
accordance with Section 10.02 may be made effective on a date prior to the first
day of the Plan Year in which it is adopted if such amendment is necessary or
appropriate to enable the Plan and Trust to satisfy the applicable requirements
of the Code or to conform the Plan to any change in federal law, or to any
regulations or ruling thereunder. Any retroactive amendment by the Employer
shall be subject to the provisions of Section 10.01.
10.05. Termination. The Employer has adopted the Plan with the intention and
-----------
expectation that contributions will be continued indefinitely. However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate the
Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.
EXHIBIT 4.1 page 46
<PAGE>
10.06. Distribution upon Termination of the Plan. Upon termination or partial
-----------------------------------------
termination of the Plan or complete discontinuance of contributions thereunder,
each Participant (including a terminated Participant with respect to amounts not
previously forfeited by him) who is affected by such termination or partial
termination or discontinuance will have a fully vested interest in his Account,
and, subject to Section 4.05 and Article 8, the Trustee will distribute to each
Participant or other person entitled to distribution the balance of the
Participant's Account in a single lump sum payment. In the absence of such
instructions, the Trustee will notify the Administrator of such situation and
the Trustee will be under no duty to make any distributions under the Plan until
it receives written instructions from the Administrator. Upon the completion of
such distributions, the Trust will terminate, the Trustee will be relieved from
all liability under the Trust, and no Participant or other person will have any
claims thereunder, except as required by applicable law.
10.07. Merger or Consolidation of Plan; Transfer of Plan Assets. In case of any
--------------------------------------------------------
merger or consolidation of the Plan with, or transfer of assets and liabilities
of the Plan to, any other plan, provision must be made so that each Participant
would, if the Plan then terminated, receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he would have been entitled to receive immediately before the merger,
consolidation or transfer if the Plan had then terminated.
Article 11. Amendment and Continuation of Predecessor Plan; Transfer of
-----------------------------------------------------------
Funds to or from Other Qualified Plans.
--------------------------------------
11.01. Amendment and Continuation of Predecessor Plan. In the event the Employer
----------------------------------------------
has previously established a plan (the "predecessor plan") which is a defined
contribution plan under the Code and which on the date of adoption of the Plan
meets the applicable requirements of section 401(a) of the Code, the Employer
may, in accordance with the provisions of the predecessor plan, amend and
continue the predecessor plan in the form of the Plan and become the Employer
hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor plan immediately
prior to the effective date of such amendment and continuation will
become a Participant or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the Adoption
Agreement if such election would reduce the benefits of a Participant
under the Plan to less than the benefits to which he would have been
entitled if he voluntarily separated from the service of the Employer
immediately prior to such amendment and continuation;
(c) No amendment to the Plan shall decrease a Participant's accrued
benefit or eliminate an optional form of benefit and if the amendment of
the predecessor plan in the form of the Plan results in a change in the
method of crediting service for vesting purposes between the general
method set forth in Section 2530.200b-2 of the Department of Labor
Regulations and the elapsed-time method in Section 2.01(a)(33) of the
Plan, each Participant with respect to whom the method of crediting
vesting service is changed shall be treated in the manner set forth by
the provisions of Section 1.410(a)-7(f)(1) of the Treasury Regulations
which are incorporated herein by reference;
EXHIBIT 4.1 page 47
<PAGE>
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent the
amounts properly attributable to (1) contributions by the Participant and
(2) contributions by the Employer and forfeitures will constitute the
opening balance of his Account or Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor plan will continue to
be paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement annuity in
effect after August 23, 1984, under the predecessor plan immediately
before such amendment and continuation will be deemed a valid election
and waiver of Beneficiary under Section 8.04 if such designation
satisfies the requirements of Section 8.04(d), unless and until the
Participant revokes such election and waiver under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of
the predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the
Trustee as soon as reasonably practicable pursuant to Article 6. The
Employer agrees to assist the Trustee in any way requested by the Trustee
in order to facilitate the transfer of assets from the predecessor trust
to the Trust Fund.
11.02. Transfer of Funds from an Existing Plan. The Employer may from time to
---------------------------------------
time direct the Trustee, in accordance with such rules as the Trustee may
establish, to accept cash, allowable Fund Shares or participant loan promissory
notes transferred for the benefit of Participants from a trust forming part of
another qualified plan under the Code, provided such plan is a defined
contribution plan. Such transferred assets will become assets of the Trust as of
the date they are received by the Trustee. Such transferred assets will be
credited to Participants' Accounts in accordance with their respective interests
immediately upon receipt by the Trustee. A Participant's interest under the Plan
in transferred assets which were fully vested and nonforfeitable under the
transferring plan will be fully vested and nonforfeitable at all times. Such
transferred assets will be invested by the Trustee in accordance with the
provisions of paragraph (g) of Section 11.01 as if such assets were transferred
from a predecessor plan. No transfer of assets in accordance with this Section
may cause a loss of an accrued or optional form of benefit protected by Section
411(d)(6) of the Code.
11.03. Acceptance of Assets by Trustee. The Trustee will not accept assets which
-------------------------------
are not either in a medium proper for investment under the Plan, as set forth in
Section 1.14(b), or in cash. Such assets shall be accompanied by written
instructions showing separately the respective contributions by the prior
employer and by the Employee, and identifying the assets attributable to such
contributions. The Trustee shall establish such accounts as may be necessary or
appropriate to reflect such contributions under the Plan. The Trustee shall hold
such assets for investment in accordance with the provisions of Article 6, and
shall in accordance with the written instructions of the Employer make
appropriate credits to the Accounts of the Participants for whose benefit assets
have been transferred.
11.04. Transfer of Assets from Trust. The Employer may direct the Trustee to
-----------------------------
transfer all or a specified portion of the Trust assets to any other plan or
plans maintained by the Employer or the employer or employers of a former
Participant or Participants, provided that the Trustee has received evidence
satisfactory to it that such other plan meets all applicable requirements of the
Code. The assets so transferred shall be accompanied by written instructions
EXHIBIT 4.1 page 48
<PAGE>
from the Employer naming the persons for whose benefit such assets have been
transferred, showing separately the respective contributions by the Employer and
by each Participant, if any, and identifying the assets attributable to the
various contributions. The Trustee shall have no further liabilities with
respect to assets so transferred.
Article 12. Miscellaneous.
-------------
12.01. Communication to Participants. The Plan will be communicated to all
-----------------------------
Participants by the Employer promptly after the Plan is adopted.
12.02. Limitation of Rights. Neither the establishment of the Plan and the
--------------------
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against the Employer, Administrator or
Trustee, except as provided herein; and in no event will the terms of employment
or service of any Participant be modified or in any way affected hereby. It is a
condition of the Plan, and each Participant expressly agrees by his
participation herein, that each Participant will look solely to the assets held
in the Trust for the payment of any benefit to which he is entitled under the
Plan.
12.03. Nonalienability of Benefits and Qualified Domestic Relations Orders. The
-------------------------------------------------------------------
benefits provided hereunder will not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind, either voluntarily or
involuntarily, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law. The
preceding sentence shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined by the Plan
Administrator to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985. The Administrator must establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Administrator will promptly notify the Participant and any
alternate payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the order. Within
a reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must notify
the Participant and each alternate payee, in writing, of its determination. The
Administrator must provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period
the Administrator is making its determination of the qualified status of the
domestic relations order, the Administrator must make a separate accounting of
the amounts payable. If the Administrator determines the order is a qualified
domestic relations order within 18 months of the date amounts first are payable
following receipt of the order, the Administrator will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrator does not make his determination of the qualified status of the
order within the 18-month determination period, the Administrator will direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and will apply the order prospectively if
the Administrator later determines the order is a qualified domestic relations
order.
EXHIBIT 4.1 page 49
<PAGE>
A domestic relations order will not fail to be deemed a qualified
domestic relations order merely because it requires the distribution or
segregation of all or part of a Participant's Account with respect to an
alternate payee prior to the Participant's earliest retirement age (as defined
in Section 414(p) of the Code) under the Plan. A distribution to an alternate
payee prior to the Participant's attainment of the earliest retirement age is
available only if (a) the order specifies distribution at that time and (b) if
the present value of the alternate payee's benefits under the Plan exceeds
$3,500, and the order requires, and the alternate payee consents to, a
distribution occurring prior to the Participant's attainment of earliest
retirement age.
12.04. Facility of Payment. In the event the Administrator determines, on the
-------------------
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may direct the Trustee to disburse such payments
to a person or institution designated by a court which has jurisdiction over
such recipient or a person or institution otherwise having the legal authority
under state law for the care and control of such recipient. The receipt by such
person or institution of any such payments shall be complete acquittance
therefore, and any such payment to the extent thereof, shall discharge the
liability of the Trust for the payment of benefits hereunder to such recipient.
12.05. Information between Employer and Trustee. The Employer agrees to furnish
----------------------------------------
the Trustee, and the Trustee agrees to furnish the Employer, with such
information relating to the Plan and Trust as may be required by the other in
order to carry out their respective duties hereunder, including without
limitation information required under the Code and any regulations issued or
forms adopted by the Treasury Department thereunder or under the provisions of
ERISA and any regulations issued or forms adopted by the Labor Department
thereunder.
12.06. Effect of Failure to Qualify Under Code. Notwithstanding any other
---------------------------------------
provision contained herein, if the Employer fails to obtain or retain approval
of the Plan by the Internal Revenue Service as a qualified Plan under the Code,
the Employer may no longer participate in this prototype Plan arrangement and
will be deemed to have an individually designed plan.
12.07. Notices. Any notice or other communication in connection with this Plan
-------
shall be deemed delivered in writing if addressed as provided below and if
either actually delivered at said address or, in the case of a letter, three
business days shall have elapsed after the same shall have been deposited in the
United States mails, first-class postage prepaid and registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth
in the Adoption Agreement, to the attention of the person specified to
receive notice in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the Adoption
Agreement;
or, in each case at such other address as the addressee shall have specified by
written notice delivered in accordance with the foregoing to the addressor's
then effective notice address.
12.08. Governing Law. The Plan and the accompanying Adoption Agreement will be
-------------
construed, administered and enforced according to ERISA, and to the extent not
preempted thereby, the laws of the Commonwealth of Massachusetts.
EXHIBIT 4.1 page 50
<PAGE>
Article 13. Plan Administration.
--------------------
13.01. Powers and Responsibilities of the Administrator. The Administrator has
------------------------------------------------
the full power and the full responsibility to administer the Plan in all of its
details, subject, however, to the requirements of ERISA. The Administrator's
powers and responsibilities include, but are not limited to, the following:
(a) To make and enforce such rules and regulations as it deems necessary
or proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to be
final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will be
paid;
(g) To authorize the payment of benefits and provide for the distribution
of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as may
be required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of ERISA.
13.02. Nondiscriminatory Exercise of Authority. Whenever, in the administration
---------------------------------------
of the Plan, any discretionary action by the Administrator is required, the
Administrator shall exercise its authority in a nondiscriminatory manner so that
all persons similarly situated will receive substantially the same treatment.
13.03. Claims and Review Procedures.
----------------------------
(a) Claims Procedure. If any person believes he is being denied any
----------------
rights or benefits under the Plan, such person may file a claim in
writing with the Administrator. If any such claim is wholly or partially
denied, the Administrator will notify such person of its decision in
writing. Such notification will contain (1) specific reasons for the
denial, (2) specific reference to pertinent Plan provisions, (3) a
description of any additional material or information necessary for such
person to perfect such claim and an explanation of why such material or
information is necessary, and (4) information as to the steps to be taken
if the person wishes to submit a request for review. Such notification
will be given within 90 days after the claim is received by the
EXHIBIT 4.1 page 51
<PAGE>
Administrator (or within 180 days, if special circumstances require an
extension of time for processing the claim, and if written notice of such
extension and circumstances is given to such person within the initial
90-day period). If such notification is not given within such period, the
claim will be considered denied as of the last day of such period and
such person may request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a person
----------------
receives a written notice of a denied claim (or, if applicable, within 60
days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (1) file a
written request with the Administrator for a review of his denied claim
and of pertinent documents and (2) submit written issues and comments to
the Administrator. The Administrator will notify such person of its
decision in writing. Such notification will be written in a manner
calculated to be understood by such person and will contain specific
reasons for the decision as well as specific references to pertinent Plan
provisions. The decision on review will be made within 60 days after the
request for review is received by the Administrator (or within 120 days,
if special circumstances require an extension of time for processing the
request, such as an election by the Administrator to hold a hearing, and
if written notice of such extension and circumstances is given to such
person within the initial 60-day period). If the decision on review is
not made within such period, the claim will be considered denied.
13.04. Named Fiduciary. The Administrator is a "named fiduciary" for purposes of
---------------
Section 402(a)(1) of ERISA and has the powers and responsibilities with respect
to the management and operation of the Plan described herein.
13.05. Costs of Administration. Unless some or all are paid by the Employer, all
-----------------------
reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in
administering the Plan and Trust will be paid first from the forfeitures (if
any) resulting under Section 7.07, then from the remaining Trust Fund. All such
costs and expenses paid from the Trust Fund will, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all
Participants on a prorata basis or in such other reasonable manner as may be
directed by the Employer.
Article 14. Trust Agreement.
----------------
14.01. Acceptance of Trust Responsibilities. By executing the Adoption
------------------------------------
Agreement, the Employer establishes a trust to hold the assets of the Plan. By
executing the Adoption Agreement, the Trustee agrees to accept the rights,
duties and responsibilities set forth in this Article 14.
14.02. Establishment of Trust Fund. A trust is hereby established under the Plan
---------------------------
and the Trustee will open and maintain a trust account for the Plan and, as part
thereof, Participants' Accounts for such individuals as the Employer shall from
time to time give written notice to the Trustee are Participants in the Plan.
The Trustee will accept and hold in the Trust Fund such contributions on behalf
of Participants as it may receive from time to time from the Employer. The Trust
Fund shall be fully invested and reinvested in accordance with the applicable
provisions of the Plan in Fund Shares or as otherwise provided in Section 14.10.
14.03. Exclusive Benefit. The Trustee shall hold the assets of the Trust Fund
-----------------
for the exclusive purpose of providing benefits to Participants and
EXHIBIT 4.1 page 52
<PAGE>
Beneficiaries and defraying the reasonable expenses of administering the Plan.
No assets of the Plan shall revert to the Employer except as specifically
permitted by the terms of the Plan.
14.04. Powers of Trustee. The Trustee shall have no discretion or authority with
-----------------
respect to the investment of the Trust Fund but shall act solely as a directed
trustee of the funds contributed to it. In addition to and not in limitation of
such powers as the Trustee has by law or under any other provisions of the Plan,
the Trustee will have the following powers, each of which the Trustee exercises
solely as directed Trustee in accordance with the written direction of the
Employer except to the extent a Plan asset is subject to Participant direction
of investment and provided that no such power shall be exercised in any manner
inconsistent with the provisions of ERlSA:
(a) to deal with all or any part of the Trust Fund and to invest all or
a part of the Trust Fund in investments available under the Plan, without regard
to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or
advisable, without liability for interest thereon, for the administration of
the Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or
any part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights on behalf
of the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) to employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and protecting the
Trust Fund or the assets thereof and to pay them reasonable compensation;
(f) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with
Section 8.02;
(i) to hold securities unregistered, or to register them in its own name
or in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with stock
clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments
that it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect to
all or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates
of the Trustee may act as its agent in the performance of ministerial,
nonfiduciary duties under the Trust. The expenses and compensation of such agent
shall be paid by the Trustee.
EXHIBIT 4.1 page 53
<PAGE>
The Trustee shall provide the Employer with reasonable notice of any
claim filed against the Plan or Trust or with regard to any related matter, or
of any claim filed by the Trustee on behalf of the Plan or Trust or with regard
to any related matter.
14.05. Accounts. The Trustee will keep full accounts of all receipts and
--------
disbursements and other transactions hereunder. Within 60 days after the close
of each Plan Year, within 60 days after termination of the Trust, and at such
other times as may be appropriate, the Trustee will determine the then net fair
market value of the Trust Fund as of the close of the Plan Year, as of the
termination of the Trust, or as of such other time, whichever is applicable, and
will render to the Employer and Administrator an account of its administration
of the Trust during the period since the last such accounting, including all
allocations made by it during such period.
14.06. Approving of Accounts. To the extent permitted by law, the written
---------------------
approval of any account by the Employer or Administrator will be final and
binding, as to all matters and transactions stated or shown therein, upon the
Employer, Administrator, Participants and all persons who then are or thereafter
become interested in the Trust. The failure of the Employer or Administrator to
notify the Trustee within six (6) months after the receipt of any account of its
objection to the account will, to the extent permitted by law, be the equivalent
of written approval. If the Employer or Administrator files any objections
within such six (6) month period with respect to any matters or transactions
stated or shown in the account, and the Employer or Administrator and the
Trustee cannot amicably settle the question raised by such objections, the
Trustee will have the right to have such questions settled by judicial
proceedings. Nothing herein contained will be construed so as to deprive the
Trustee of the right to have judicial settlement of its accounts. In any
proceeding for a judicial settlement of any account or for instructions, the
only necessary parties will be the Trustee, the Employer and the Administrator.
14.07. Distribution from Trust Fund. The Trustee shall make such distribution
----------------------------
from the Trust Fund as the Employer or Administrator may in writing direct, as
provided by the terms of the Plan, upon certification by the Employer or
Administrator that the same is for the exclusive benefit of Participants or
their Beneficiaries, or for the payment of expenses of administering the Plan.
14.08. Transfer of Amounts from Qualified Plan. If the Plan provides that
---------------------------------------
amounts may be transferred to the Plan from another qualified plan or trust
under Section 401(a) of the Code, such transfer shall be made in accordance with
the provisions of the Plan and with such rules as may be established by the
Trustee. The Trustee will only accept assets which are in a medium proper for
investment under this agreement or in cash. Such amounts shall be accompanied by
written instructions showing separately the respective contributions by the
prior employer and the transferring Employee, and identifying the assets
attributable to such contributions. The Trustee shall hold such assets for
investment in accordance with the provisions of this agreement.
14.09. Transfer of Assets from Trust. Subject to the provisions of the Plan, the
-----------------------------
Employer may direct the Trustee to transfer all or a specified portion of the
Trust assets to any other plan or plans maintained by the Employer or the
employer or employers of a former Participant or Participants, provided that the
Trustee has received evidence satisfactory to it that such other plan meets all
applicable requirements of the Code. The assets so transferred shall be
accompanied by written instructions from the Employer naming the persons for
EXHIBIT 4.1 page 54
<PAGE>
whose benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any, and
identifying the assets attributable to the various contributions. The Trustee
shall have no further liabilities with respect to assets so transferred.
14.10. Separate Trust or Fund for Existing Plan Assets. With the consent of the
-----------------------------------------------
Trustee, the Employer may maintain a trust or fund (including a group annuity
contract) under this prototype plan document separate from the Trust Fund for
Plan assets purchased prior to the adoption of this prototype plan document
which are not Fidelity Funds listed in Section 1.14(b). The Trustee shall have
no authority and no responsibility for the Plan assets held in such separate
trust or fund. The duties and responsibilities of the trustee of a separate
trust shall be provided by a separate trust agreement, between the Employer and
the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate of
the Trustee may agree in writing to provide ministerial recordkeeping services
for guaranteed investment contracts held in the separate trust or fund. The
guaranteed investment contract(s) shall be valued as directed by the Employer or
the Trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee")
will be the owner of any insurance contract purchased prior to the adoption of
this prototype plan document. The insurance contract(s) must provide that
proceeds will be payable to the trustee; however the trustee shall be required
to pay over all proceeds of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this plan. A
Participant's spouse will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Article 8. Under no circumstances shall the trust retain any part of the
proceeds. In the event of any conflict between the terms of this plan and the
terms of any insurance contract purchased hereunder, the plan provisions shall
control.
Any life insurance contracts held in the Trust Fund or in the separate
trust are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such
contracts are held, less than 1/2 of the aggregate employer contributions
allocated to any Participant will be used to pay the premiums
attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate employer
contributions allocated to any participant will be used to pay the
premiums on term life insurance contracts, universal life insurance
contracts, and all other life insurance contracts which are not ordinary
life.
(c) Combination - The sum of 1/2 of the ordinary life insurance premiums
and all other life insurance premiums will not exceed 1/4 of the
aggregate employer contributions allocated to any Participant.
14.11. Voting; Delivery of Information. The Trustee shall deliver, or cause to
-------------------------------
be executed and delivered, to the Employer or Plan Administrator all notices,
prospectuses, financial statements, proxies and proxy soliciting materials
received by the Trustee relating to securities held by the Trust or, if
applicable, deliver these materials to the appropriate Participant or the
Beneficiary of a deceased Participant. The Trustee shall not vote any securities
EXHIBIT 4.1 page 55
<PAGE>
held by the Trust except in accordance with the written instructions of the
Employer, Participant or the Beneficiary of the Participant, if the Participant
is deceased; however, the Trustee may, in the absence of instructions, vote
"present" for the sole purpose of allowing such shares to be counted for
establishment of a quorum at a shareholders' meeting. The Trustee shall have no
duty to solicit instructions from Participants, Beneficiaries, or the Employer.
14.12. Compensation and Expenses of Trustee. The Trustee's fee for performing
------------------------------------
its duties hereunder will be such reasonable amounts as the Trustee may from
time to time specify by written agreement with the Employer. Such fee, any taxes
of any kind which may be levied or assessed upon or with respect to the Trust
Fund, and any and all expenses, including without limitation legal fees and
expenses of administrative and judicial proceedings, reasonably incurred by the
Trustee in connection with its duties and responsibilities hereunder will,
unless some or all have been paid by said Employer, be paid first from
forfeitures resulting under Section 7.07, then from the remaining Trust Fund and
will, unless allocable to the Accounts of particular Participants, be charged
against the respective Accounts of all Participants, in such reasonable manner
as the Trustee may determine.
14.13. Reliance by Trustee on Other Persons. The Trustee may rely upon and act
------------------------------------
upon any writing from any person authorized by the Employer or Administrator to
give instructions concerning the Plan and may conclusively rely upon and be
protected in acting upon any written order from the Employer or Administrator or
upon any other notice, request, consent, certificate, or other instructions or
paper reasonably believed by it to have been executed by a duly authorized
person, so long as it acts in good faith in taking or omitting to take any such
action. The Trustee need not inquire as to the basis in fact of any statement in
writing received from the Employer or Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Administrator as to any person or persons
authorized to act for the Employer or Administrator hereunder and to sign on
behalf of the Employer or Administrator any directions or instructions, until it
receives from the Employer or Administrator written notice that such authority
has been revoked.
Notwithstanding any provision contained herein, the Trustee will be under
no duty to take any action with respect to any Participant's Account (other than
as specified herein) unless and until the Employer or Administrator furnishes
the Trustee with written instructions on a form acceptable to the Trustee, and
the Trustee agrees thereto in writing. The Trustee will not be liable for any
action taken pursuant to the Employer's or Administrator's written instructions
(nor for the collection of contributions under the Plan, nor the purpose or
propriety of any distribution made thereunder).
14.14. Indemnification by Employer. The Employer shall indemnify and save
---------------------------
harmless the Trustee from and against any and all liability to which the Trustee
may be subjected by reason of any act or conduct (except willful misconduct or
negligence) in its capacity as Trustee, including all expenses reasonably
incurred in its defense.
14.15. Consultation by Trustee with Counsel. The Trustee may consult with legal
------------------------------------
counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
will, to the extent permitted by law, be full and complete protection in respect
of any action taken or omitted by the Trustee hereunder in good faith and in
accordance with the opinion of such counsel.
EXHIBIT 4.1 page 56
<PAGE>
14.16. Persons Dealing with the Trustee. No person dealing with the Trustee will
--------------------------------
be bound to see to the application of any money or property paid or delivered to
the Trustee or to inquire into the validity or propriety of any transactions.
14.17. Resignation or Removal of Trustee. The Trustee may resign at any time by
---------------------------------
written notice to the Employer, which resignation shall be effective 60 days
after delivery to the Employer. The Trustee may be removed by the Employer by
written notice to the Trustee, which removal shall be effective 60 days after
delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a
successor trustee. Any such successor trustee will, upon written acceptance of
his appointment, become vested with the estate, rights, powers, discretion,
duties and obligations of the Trustee hereunder as if he had been originally
named as Trustee in this Agreement.
Upon resignation or removal of the Trustee, the Employer will no longer
participate in this prototype plan and will be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer the
assets of the Trust to the successor trustee upon receipt of sufficient evidence
(such as a determination letter or opinion letter from the Internal Revenue
Service or an opinion of counsel satisfactory to the Trustee) that such trust
will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery
to the Trustee of written notice that the Employer has appointed such successor
trustee, and written acceptance of such appointment by the successor trustee.
The Trustee may, upon transfer and delivery of the Trust Fund to a successor
trustee, reserve such reasonable amount as it shall deem necessary to provide
for its fees, compensation, costs and expenses, or for the payment of any other
liabilities chargeable against the Trust Fund for which it may be liable. The
Trustee shall not be liable for the acts or omissions of any successor trustee.
14.18. Fiscal Year of the Trust. The fiscal year of the Trust will coincide with
------------------------
the Plan Year.
14.19. Discharge of Duties by Fiduciaries. The Trustee and the Employer and any
----------------------------------
other fiduciary shall discharge their duties under the Plan and this Trust
Agreement solely in the interests of Participants and their Beneficiaries in
accordance with the requirements of ERISA.
14.20. Amendment. In accordance with provisions of the Plan, and subject to the
---------
limitations set forth therein, this Trust Agreement may be amended by an
instrument in writing signed by the Employer and the Trustee. No amendment to
this Trust Agreement shall divert any part of the Trust Fund to any purpose
other than as provided in Section 2 hereof.
14.21. Plan Termination. Upon termination or partial termination of the Plan or
----------------
complete discontinuance of contributions thereunder, the Trustee will make
distributions to the Participants or other persons entitled to distributions as
the Employer or Administrator directs in accordance with the provisions of the
Plan. In the absence of such instructions and unless the Plan otherwise
provides, the Trustee will notify the Employer or Administrator of such
situation and the Trustee will be under no duty to make any distributions under
the Plan until it receives written instructions from the Employer or
Administrator. Upon the completion of such distributions, the Trust will
EXHIBIT 4.1 page 57
<PAGE>
terminate, the Trustee will be relieved from all liability under the Trust, and
no Participant or other person will have any claims thereunder, except as
required by applicable law.
14.22. Permitted Reversion of Funds to Employer. If it is determined by the
----------------------------------------
Internal Revenue Service that the Plan does not initially qualify under Section
401 of the Code, all assets then held under the Plan will be returned by the
Trustee, as directed by the Administrator, to the Employer, but only if the
application for determination is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan was adopted or such
later date as may be prescribed by regulations. Such distribution will be made
within one year after the date the initial qualification is denied. Upon such
distribution the Plan will be considered to be rescinded and to be of no force
or effect.
Contributions under the Plan are conditioned upon their deductibility
under Section 404 of the Code. In the event the deduction of a contribution made
by the Employer is disallowed under Section 404 of the Code, such contribution
(to the extent disallowed) must be returned to the Employer within one year of
the disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact must
be returned to the Employer within one year of the contribution.
14.23. Governing Law. This Trust Agreement will be construed, administered and
-------------
enforced according to ERISA and, to the extent not preempted thereby, the laws
of the Commonwealth of Massachusetts.
EXHIBIT 4.1 page 58
<PAGE>
ADDENDUM
to
CORPORATEplan for Retirement
THE PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT No. 07
Re: Retroactive Effective Dates
This Addendum is intended to clarify and set forth the effective dates of
certain provisions of the Plan with respect to the adopting Employer. This
Addendum applies only to the extent that the Employer has not amended the Plan
with respect to the applicable provisions of the Tax Reform Act of 1986 ("TRA
'86"). Unless otherwise specifically provided by the terms of the Plan, this
amendment and restatement is effective with respect to each change made to
satisfy the provisions of (i) TRA '86, (ii) any other change in the Code or
ERISA, or (iii) regulations, rulings, or other published guidance issued under
the Code, ERISA, or TRA '86, the first day of the first period (which may or may
not be the first day of a Plan year) with respect to which such change became
required because of such provision (including any day that became such as a
result of an election or waiver by an Employer or a waiver or exemption issued
under the Code, ERISA, or TRA `86), including, but not limited to, the
following:
(a) The following changes as required by TRA '86 are effective for Plan Years
beginning after December 31, 1986, unless a delayed effective date applies
because the Plan is collectively-bargained or because of an applicable exemption
or waiver:
(1) Changes in the definition of Employee in Section 2.01(a)(10)
to reflect changes in the safe harbor exclusion for Leased
Employees;
(2) Changes in the definition of Highly Compensated Employee in
Section 2.01(a)(16)
(3) Addition of the aggregate deferral limit under Section 402(g)
of the Code in Section 4.01(c);
(4) Changes to the Code Section 401(k) discrimination test in
Section 4.02;
(5) Addition of the Code Section 401(m) discrimination test and
application of the Aggregate Limit in Section 4.04;
(6) Compliance with the Code Section 414(s) compensation
definition requirements in Sections 5.03 and 9.03;
(7) Changes in the Participant Loan provisions in Section 7.09; if
applicable, to reflect new dollar limitations, repayment
requirements, and restrictions applicable to Highly
Compensated Employees under Section 72(p) of the Code;
(8) Changes in the definition of Key Employee in Section 9.02(a);
and
(9) Changes in the definition of Top-Heavy Ratio in Section
9.02(c)(3) to provide for ratable accrual.
(b) Changes in the 415 limitations in Section 5.03 as required by TRA '86 are
effective for limitation years beginning after December 31, 1986, unless a
delayed effective date applies because the Plan is collectively-bargained or
because of an applicable waiver or exemption; provided, however, that Annual
Additions shall not be recalculated to take into account all Employee
contributions for limitation years beginning before the effective date.
EXHIBIT 4.1 (ADDENDUM) page 1
<PAGE>
(c) The following changes as required by TRA '86 are effective for Plan years
beginning After December 31, 1987, unless a delayed effective date applies
because the Plan is collectively-bargained or because of an applicable waiver or
exemption:
(1) Changes required to provide that allocations shall not be
decreased or discontinued because of attainment of any age,
if any; and
(2) Changes in the definition of Normal Retirement Age in Section
1.06(a), if any, to reflect the five years of participation
rule.
(d) The following changes as required by TRA '86 are effective for Plan Years
beginning after December 31, 1988, unless a delayed effective date applies
because the Plan is collectively-bargained or because of an applicable waiver or
exemption:
(1) Changes in the vesting schedule specified in Section 1.07, if
applicable;
(2) Changes in the permitted disparity rules in Section
4.06(b0(2), if applicable; and
(3) Changes in the requirements for electing a former vesting
schedule in Section 10.03, if applicable.
Notwithstanding the foregoing and subject to applicable law, with respect to
Plan years beginning after December 31, 1986, and before the date of this
restatement of the Plan, the Employer may elect to operate the Plan in
accordance with any transitional rule published by the Internal Revenue Service
or a reasonable, good faith interpretation of TRA '86 and related applicable
law, in which event such transitional rule or good faith interpretation shall
prevail over the provisions in this restatement of the Plan with respect to such
Plan Year.
Each other change made under the Plan is effective as of the date specified in
Section 1.01(g) of the Adoption Agreement, unless otherwise specifically
provided by the terms of the Plan.
EXHIBIT 4.1 (ADDENDUM) page 2
<PAGE>
CORPORATEplan for Retirement[SM]
Profit Sharing/401(k) Plan
Fidelity Basic Plan Document No. 07
Amendment One
Section 2.01(a)(7) "Compensation" is amended to include:
- --------------------------------------------------------
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each Employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision. Notwithstanding
2.01(a)(7)(A), for purpose of Section 4.02 (Additional Limit on Deferral
Contributions) and Section 4.04 (Limit on Matching Contributions), the Employer
may use Compensation as defined in Section 5.03(e)(2) excluding reimbursements
or other expense allowances, fringe benefits (cash and non-cash), moving
expenses, deferred compensation and welfare benefits, but including amounts that
are not includable in the gross income of the Participant under a salary
reduction agreement by reason of the application of Section 125, 402(a)(8),
402(h) or 403(b) of the Code.
If compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
Section 8.01(d) "Distribution of Benefits to Participants and Beneficiaries" is
- ----------------------------------------------------------------------------
amended to include:
(5) If a distribution is one to which sections 401(a)(11) and 417 of
the Internal Revenue Code do not apply, such distribution may commence less than
30 days after the notice required under section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option), and
the Participant, after receiving the notice, affirmatively elects a
distribution.
EXHIBIT 4.1 (ADDENDUM) page 3
<PAGE>
Model Amendment to
The CORPORATEplan FOR RETIREMENT[SM]
PROFIT SHARING / 401 (k) PLAN
(Document No. 07)
This amendment is effective for plan years beginning after December 11,
1994.
Notwithstanding any provision of this plan to the contrary, to the
extent any optional form of benefit under this plan permits a distribution prior
to the employee's retirement, death, disability, or severance from employment,
and prior to plan termination, the optional form of benefit is not available
with respect to benefits attributable to assets (including the post-transfer
earnings thereon) and liabilities that are transferred, within the meaning of
ss. 414 (1) of the Internal Revenue Code, to this plan from a money purchase
pension plan qualified under ss. 401(a) of the Internal Revenue Code (other than
any portion of those assets and liabilities attributable to voluntary employee
contributions).
EXHIBIT 4.1 (ADDENDUM) page 4
<PAGE>
CORPORATEplan for Retirement[SM]
Profit Sharing/401(k) Plan
Fidelity Basic Plan Document No. 07
Amendment Two
Effective December 1, 1996, Section 2.01(a)(25) shall be amended to read as
follows:
(25) "Registered Investment Company" means any one or more corporations,
partnerships or trusts registered under the Investment Company Act of
1940.
EXHIBIT 4.1 (ADDENDUM) page 5
<PAGE>
SAFE HARBOR CONTRIBUTION
PLAN AMENDMENT
WHEREAS, Pulse Engineering, Inc. (the "Employer") adopted the Pulse
Engineering, Inc. 401(k) Plan (the "Plan") through adoption of the CORPORATEplan
for RETIREMENT[sm] Profit Sharing/401(k) Adoption Agreement and Basic Plan
Document No. 07;
WHEREAS, the Employer desires to amend the Plan to add a safe harbor
contribution provision;
NOW THEREFORE, the Employer amends the Plan effective January 1, 2000
to add the following Addendum to the Adoption Agreement:
SAFE HARBOR ADDENDUM
Notwithstanding any other provision of the Plan to the contrary, if the Employer
has elected one of the safe harbor contributions in this Addendum and complies
with the notice requirements of Code Section 401(k)(12)(D) for the Plan Year,
the Plan shall be deemed to have satisfied the Actual Deferral Percentage test
("ADP test") described in Section 4.02. In addition, if the Employer has elected
one of the safe harbor contributions in Part II of this Addendum and does not
provide for a match on Deferral Contributions in excess of six percent of a
Participant's Compensation, the Plan shall be deemed to have satisfied the
Average Contribution Percentage test ("ACP test") described in Section 4.04 with
respect to Matching Contributions. If the Plan provides for Employee
Contributions, the ACP test described in Section 4.04 must be applied with
respect to such Employee Contributions. For purposes of applying the ACP test
with respect to Employee Contributions, Matching Contributions and Employer
Contributions that satisfy the vesting and distribution requirements applicable
to safe harbor contributions, but which are not required to comply with the safe
harbor contribution requirements may be taken into account.
1
<PAGE>
PART I - If a selection is made under this Part I, Part I shall amend and
- ------
restate Sections 1.05(a)(1) and (2) of the Adoption Agreement.
(a) [ ] Employer Contributions.
(1) [ ] Safe Harbor Employer Contribution - For each
Plan Year, the Employer shall contribute for each
eligible Participant an amount equal to % (not less
than 3% nor more than 15%) of such Participant's
Compensation.
Note: If the Employer elects the Safe Harbor Employer
Contribution and wants to be deemed to have satisfied
the ACP test, the percentage of contributions matched
may not increase as the percentage of Compensation
contributed increases and the contributions matched
may not exceed 6% of a Participant's Compensation.
(A) [ ] The formula specified at (a)(1) above
is also intended to satisfy the safe harbor
contribution requirement for deemed
satisfaction of the ACP test with respect to
Matching Contributions and therefore,
notwithstanding any other provision of the
Plan to the contrary, contributions matched
shall not exceed 6% of a Participant's
Compensation. (Employee Contributions must
still be tested.)
Note: Notwithstanding any other provision of the Plan to
the contrary, contributions made under this
Subsection (a)(1) shall be 100% vested when made and
are distributable only in accordance with the
distribution provisions that are applicable to
Deferral Contributions.
(2) [ ] Discretionary Contribution - The
Employer may decide each Plan Year whether
to make a discretionary Employer
Contribution on behalf of eligible
Participants in accordance with Section
4.06. Such contribution may only be funded
by the Employer after the Plan Year ends and
shall be allocated to eligible Participants
based upon the following (check (A) or (B)):
(A) [ ] Nonintegrated Allocation Formula - In
the ratio that each eligible Participant's
Compensation bears to the total Compensation
paid to all eligible Participants for the
Plan Year.
(B) [ ] Integrated Allocation Formula - In
accordance with Section 4.06.
2
<PAGE>
Note: An Employer who maintains any other plan
that provides for Social Security
Integration (permitted disparity) may not
elect (a)(2)(B). Also, any contribution made
pursuant to (a)(2)(B) shall be made in
addition to the Safe Harbor Employer
Contribution in Subsection (a)(1) and such
Safe Harbor Employer Contributions shall not
be taken into account in determining whether
the allocation made pursuant to (a)(2)(B) as
a percentage of the sum of each
Participant's Compensation and Excess
Compensation exceeds 5.7%.
Part II - If a selection is made under this Part II, Part II shall amend
- -------
and restate Sections 1.05(c)(1), (2) and (3) of the Adoption
Agreement.
(c) [X] Matching Contributions.
(1) [X] Safe Harbor Matching Contributions
(A) [ ] 100% of the first 3% of the
Participant's Compensation contributed to
the Plan and 50% of the next 2% of the
Participant's Compensation contributed to
the Plan.
Note: This formula also meets the safe harbor
contribution requirements for deemed
satisfaction of the ACP test with respect to
Matching Contributions. (Employee
Contributions must still be tested.)
(B) [X] Other Tiered Match: 100% of the first
6% of the Participant's Compensation
contributed to the Plan,
100% of the next 6% of the Participant's
Compensation contributed to the Plan,
_________% of the next ____________% of the
Participant's Compensation contributed to
the Plan.
Note: To satisfy the safe harbor contribution
requirement for the ADP test, the
percentages specified above for Matching
Contributions may not increase as the
percentage of Compensation contributed
increases, and the aggregate amount of
Matching Contributions at such rates must at
least equal the aggregate amount of Matching
Contributions which would be made under the
percentages described in Section
1.05(c)(1)(A) of this Addendum.
3
<PAGE>
(i) [X] The formula specified at (c)(1)(B)
above is also intended to satisfy the safe
harbor contribution requirement for deemed
satisfaction of the ACP test with respect to
Matching Contributions. (Employee
Contributions must still be tested.)
Note: Matching Contributions made under this Section
1.05(c)(1) shall be 100% vested when made and are
distributable only in accordance with the
distribution provisions that are applicable to
Deferral Contributions.
(2) [ ] Additional Matching Contributions - The
Employer may at Plan Year end make an additional
Matching Contribution equal to a percentage declared
by the Employer, through a Board of Directors'
Resolution (or by a Letter of Intent of a Sole
Proprietor or Partnership), of the Deferral
Contributions made by each Participant during the
Plan Year. The Board of Directors' Resolution (or
Letter of Intent, if applicable) may limit the
Deferral Contributions matched to a specific dollar
amount or percentage of Compensation.
Note: If the Employer elects the Safe Harbor Matching
Contribution and the additional Matching Contribution
above and wants to be deemed to have satisfied the
ADP test, the percentage of contributions matched may
not increase as the percentage of Compensation
contributed increases. In addition, if the Employer
wants to be deemed to have satisfied the ACP test,
the contributions matched may not exceed 6% of a
Participant's Compensation.
Notwithstanding any other provision of the Plan to the contrary, if Article 1 of
the Employer's Plan is the Non-Standardized Adoption Agreement any compensation
exclusions (i.e., bonuses, commissions, overtime pay, etc.) selected under
Section 1.04(a) of the Adoption Agreement shall not apply for purposes of
determining Safe Harbor Matching Contributions or Safe Harbor Employer
Contributions. However, for purposes of Safe Harbor Matching Contributions, a
Participant's Compensation shall not include reimbursements or other expense
allowances, fringe benefits, moving expenses, deferred compensation, welfare
benefits, sick pay, severance pay, restricted stock awards and amounts
includible in income under a stock option or employee stock purchase plan.
Further notwithstanding any other provision of the Plan to the contrary, any
hours of service and/or last day eligibility requirement(s) specified in Section
1.05(a)(3) shall not apply with respect to Safe Harbor Employer Contributions.
In addition, if Article 1 of the Employer's Plan is the Non-Standardized
Adoption Agreement, any hours of service and/or last day eligibility
requirements or provisions excluding Highly Compensated Employees and/or
Partners under Section 1.05(c)(4) shall not apply with respect to Safe Harbor
Matching Contributions.
4
<PAGE>
IN WITNESS WHEREOF, the Employer has caused this Amendment to be
executed this 19th day of November , 1999.
Employer: Pulse Engineering, Inc.
By: /s/ Joel A. Miller
--------------------------------
Title: Vice President - Human Resources
Accepted by:
Fidelity Management Trust Company, as Trustee
By: /s/ Eric L. Wichmann Date: 12/2/99
---------------------------------- -----------------
Title: Authorized Signatory
----------------------------------
5
<PAGE>
AMENDMENT NO. 1 TO THE
PULSE ENGINEERING, INC. 401(k) PLAN
WHEREAS, the Pulse Engineering, Inc. (the "Employer") adopted the
Pulse Engineering, Inc. 401(k) Plan (the "Plan") through adoption of the
Fidelity Investments CORPORATE plan for Retirement[sm] Profit Sharing/401(k)
Basic Plan Document No. 07, effective as of July 1, 1986; and
WHEREAS, the Sponsor desires to amend the Plan to add employer stock as
an investment option:
NOW, THEREFORE, the Sponsor amends the Plan as follows effective as of
January 1, 2000;
1. Section 2.01(a)(34)is added to the Basic Plan Document No. 07 as
follows:
"Permissible Investment" means the investments specified by the
Employer as available for investment of assets of the Trust and agreed to by the
Trustee.
2. Section 14.24 is added to the Basic Plan No. 07 as follows:
14.24 Employer Stock Option. If one of the Permissible Investments is equity
securities issued by the Employer or a Related Company which are publicly traded
and which are "qualifying employer securities" within the meaning of Section
407(d)(5) of ERISA ("Employer stock"), investments in "Employer stock" shall be
made via the "Employer stock" investment fund (the "stock fund") which shall
consist of shares of "Employer stock" and short-term liquid investments
consisting of mutual fund shares or commingled money market pool units as agreed
to by the Employer and the Trustee, necessary to satisfy the "stock fund's" cash
needs for transfers and payments. A cash target range shall be maintained in the
"stock fund". Such target range may be changed as agreed to in writing by the
Employer and the Trustee. The Trustee is responsible for ensuring that the
actual cash held in the "stock fund" falls within the agreed upon range over
time.
Each Participant's interest in the "stock fund" shall be measured
either in actual shares of "Employer stock" that are allocated to the
Participant's Account and a proportionate interest in all other assets of the
"stock fund" or units of participation, as provided in the Service Agreement. If
accounting is by units of participation, such units shall represent a
proportionate interest in all assets of the "stock fund," which includes shares
of "Employer stock", short-term investments and at times, receivables for
dividends and/or "Employer stock" sold and payables for "Employer stock"
purchased. A net asset value per unit shall be determined daily for each cash
unit outstanding of the "stock fund". The return earned by the "stock fund"
shall represent a combination of the dividends paid on the shares of "Employer
stock" held by the "stock fund", gains or losses realized on sales of "Employer
stock", appreciation or depreciation in the market price of those shares owned,
and interest on the short-term investments held by the "stock fund".
Dividends received by the "stock fund" are reinvested in additional
shares of "Employer Stock". Investments in "Employer Stock" shall be subject to
the following limitations:
(a) Acquisition Limit. Pursuant to the Plan, the Trust may be invested
in "Employer stock" to the extent necessary to comply with investment directions
under Section 6.02 of the Plan. Notwithstanding the foregoing, effective for
deferral contributions made for Plan Years beginning on or after January 1,
1999, the portion of a Participant's Deferral Contributions that the Employer
may require to be invested in "Employer stock" for a Plan Year cannot exceed
one-percent of such Participant's Compensation for the Plan Year.
1
<PAGE>
(b) Fiduciary Duly of "Named Fiduciary". The Administrator or any
person designated by the Administrator as a named fiduciary under Section 13.01
(the "named fiduciary") shall continuously monitor the suitability under the
fiduciary duty rules of ERISA Section 404(a)(1) (as modified by ERISA Section
404(a)(2) of acquiring and holding "Employer stock". The Trustee shall not be
liable for any loss, or by reason of any breach, which arises from the
directions of the "named fiduciary" with respect to the acquisition and holding
of "Employer stock", unless it is clear on their face that the actions to be
taken under those directions would be prohibited by the foregoing fiduciary duty
rules or would be contrary to the terms of the Plan or this Trust Agreement.
(c) Execution of Purchases and Sales. Purchases and sales of "Employer
stock" (other than for exchanges) shall be made on the open market on the date
on which the Trustee receives from the Employer in good order all information
and documentation necessary to accurately effect such purchases and sales (or,
in the case of purchases, the subsequent date on which the Trustee has received
a wire transfer of the funds necessary to make such purchases). Such general
rules shall not apply in the following circumstances:
(1) If the Trustee is unable to determine the number of shares
required to be purchased or sold on such day;
(2) If the Trustee is unable to purchase or sell the total number
of shares required to be purchased or sold on such day as a result of
market conditions; or
(3) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory body
from purchasing or selling any or all of the shares required to be
purchased or sold on such day.
In the event of the occurrence of the circumstances described in (1), (2), or
(3) above, the Trustee shall purchase or sell such shares as soon as possible
thereafter and shall determine the price of such purchases or sales to be the
average purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the "named fiduciary" to
deviate from the above purchase and sale procedures provided that such direction
is made in writing by the "named fiduciary".
(a) Purchases and Sales from or to Employer. If directed by the
Employer in writing prior to the trading date, the Trustee may purchase or sell
"Employer stock" from or to the Employer if the purchase or sale is for adequate
consideration (within the meaning of ERISA Section 3(18) and no commission is
charged. If Employer contributions or contributions made by the Employer on
behalf of the Participants under the Plan are to be invested in "Employer
stock", the Employer may transfer "Employer stock" in lieu of cash to the Trust.
In either case, the number of shares to be transferred shall be determined by
dividing the total amount of "Employer stock" to be purchased or sold by the
closing price of the "Employer stock" on any national securities exchange on the
trading date.
Use of "Affiliated Broker" to Purchase "Employer Stock". The Employer hereby
directs the Trustee to use the "affiliated broker" designated below to provide
brokerage services in connection with any purchase or sale of "Employer stock"
in accordance with investment directions from Participants and/or the Employer
if and to the extent that each has authority to direct investments under Section
1.14 of the Adoption Agreement. The provision of brokerage services hereunder by
the "affiliated broker" shall be subject to the provisions discussed in this
Subsection.
2
<PAGE>
The Employer hereby directs the Trustee to use Fidelity Brokerage
Services, Inc. ("affiliated broker") to purchase or sell individual
securities for Participant Accounts in accordance with investment
directions provided by such Participants. In accordance with the
requirements of Department of Labor Prohibited Transaction Class
Exception ("PTCE") 86-128, the ("affiliated broker") may not be a
trustee (other than a non-discretionary trustee), the Administrator, or
an Employer, unless otherwise permitted under Section IV of PTCE
86-128. The provision of brokerage services by the ("affiliated
broker") shall be subject to the following:
1. In accordance with the procedures set forth in PTCE 86-128,
the Trustee shall provide the Employer with the following
documents: (i) a description of the "affiliated brokers"
brokerage placement practices; (ii) a copy of PTCE 86-128;
(iii) an annual report which summarizes all securities
transaction-related charges incurred by the Plan; and (iv) a
form by which the Employer may terminate this authorization to
use a broker affiliated with the Trustee. The Trustee shall
provide the Employer with the termination form described above
annually.
2. Any successor organization of the ("affiliated broker")
through reorganization, consolidation, merger, or similar
transactions, shall, upon consummation of such transaction,
become the successor broker in accordance with the terms of
this authorization provision.
3. The Trustee and the ("affiliated broker") shall continue to
rely on this authorization provision until notified to the
contrary. The Employer reserves the right to terminate this
authorization upon a sixty (60) days written notice to the
("affiliated broker") (or its successor) and the Trustee, and
in accordance with Section 14.24 of this Agreement.
(f) Securities Law Reports. The "named fiduciary" shall be responsible
for filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of "Employer stock"; including, without
limitation, any reports required under Section 13 or 16 of the Securities
Exchange Act of 1934 and shall immediately notify the Trustee in writing of any
requirement to stop purchases or sales of "Employer stock" pending the filing of
any report. The Trustee shall provide to the "named fiduciary" such information
on the Trust's ownership of "Employer stock" as the "named fiduciary" may
reasonably request in order to comply with Federal or state securities laws.
(g) Voting and Tender Offers. Notwithstanding any other provision of
the Trust Agreement the provisions of this Subsection shall govern the voting
and tendering of "Employer stock". If the Plan uses share accounting with
respect to the "stock fund", each Participant shall be designated as a named
fiduciary under ERISA with respect to shares of "Employer stock" credited to the
Participant's Account that were not acquired at the direction of the Participant
in accordance with ERISA Section 404(c). If accounting with respect to the
"stock fund" is by units of participation, each Participant shall be designated
a named fiduciary under ERISA with respect to shares of "Employer stock"
attributable to units in the "stock fund" credited to the Participant's Account
not acquired at the direction of the Participant in accordance with ERISA
Section 404(c).
The Employer, after consultation with the Trustee, shall provide and
pay for all printing, mailing, tabulation and other costs associated with the
voting and tendering of "Employer stock", except as required by law.
3
<PAGE>
(1) Voting.
-------
(A) When the issuer of the "Employer stock" prepares for any
annual or special meeting, the Employer shall notify the
Trustee thirty (30) days in advance of the intended record
date and shall cause a copy of all materials to be sent to the
Trustee. Based on these materials the Trustee shall prepare a
voting instruction form. At the time of mailing of notice of
each annual or special stockholders meeting of the issuer of
the "Employer stock", the Employer shall cause a copy of the
notice and all proxy solicitation materials to be sent to each
Participant with an interest in "Employer stock" held in the
Trust, together with the foregoing voting instruction form to
be returned to the Trustee or its designee. The form shall
show the proportional interest in the number of full and
fractional shares of "Employer stock" credited to the
Participant's SubAccounts held in the "stock fund". The
Employer shall provide the Trustee with a copy of any
materials provided to the Participants and shall (if the
mailing is not handled by the Trustee) certify that the
materials have been mailed or otherwise sent to Participants.
(B) Each Participant with an interest in the "stock fund"
shall have the right to direct the Trustee as to the manner in
which the Trustee is to vote (including not to vote) that
number of shares of "Employer stock" that is credited to his
Account, if the Plan uses share accounting, or, if accounting
is by units of participation, that reflects such Participant's
proportional interest in the "stock fund" (both vested and
unvested). Directions from a Participant to the Trustee
concerning the voting of "Employer stock" shall be
communicated in writing, or by mailgram or similar means.
These directions shall be held in confidence by the Trustee
and shall not be divulged to the Employer, or any officer or
employee thereof, or any other person. Upon its receipt of the
directions, the Trustee shall vote the shares of "Employer
stock" that are credited to a Participant's Account, if the
Plan uses share accounting, or, if accounting is by units of
participation, that reflect the Participant's proportional
interest in the "stock fund" as directed by the Participant.
The Trustee shall not vote shares of "Employer stock" that are
credited to a Participant's Account, if the Plan uses share
accounting, or, if accounting is by units of participation,
that reflect a Participant's proportional interest in the
"stock fund" for which the Trustee has received no direction
from the Participant, except as required by law.
(2) Tender Offers.
--------------
(A) Upon commencement of a tender offer for any securities
held in the Trust that are "Employer stock", the Employer
shall notify each Participant with an interest in such
"Employer stock" of the tender offer and utilize its best
efforts to timely distribute or cause to be distributed to the
Participant the same information that is distributed to
shareholders of the issuer of "Employer stock" in connection
with the tender offer, and, after consulting with the Trustee,
shall provide and pay for a means by which the Participant may
direct the Trustee whether or not to tender the "Employer
stock" that is credited to a Participant's Account, if the
Plan uses share accounting, or, if accounting is by units of
participation, that reflects such Participant's proportional
interest in the "stock fund" (both vested and unvested). The
Employer shall provide the Trustee with a copy of any material
provided to the Participants and shall (if the mailing is not
handled by the Trustee) certify to the Trustee that the
materials have been mailed or otherwise sent to Participants.
4
<PAGE>
(B) Each Participant shall have the right to direct the
Trustee to tender or not to tender some or all of the shares
of "Employer stock" that are credited to his Account, if the
Plan uses share accounting, or, if accounting is by units of
participation, that reflect such Participant's proportional
interest in the "stock fund" (both vested and unvested).
Directions from a Participant to the Trustee concerning the
tender of "Employer stock" shall be communicated in writing,
or by mailgram or such similar means as is agreed upon by the
Trustee and the Employer under the preceding paragraph. These
directions shall be held in confidence by the Trustee and
shall not be divulged to the Employer, or any officer of
employee thereof, or any other person, except to the extend
that the consequences of such directions are reflected in
reports regularly communicated to any such persons in the
ordinary course of the performance of the Trustee's services
hereunder. The Trustee shall tender or not tender shares of
"Employer stock" as directed by the Participant. The Trustee
shall not tender shares of "Employer stock" that are credited
to a Participant's Account, if the Plan uses share accounting,
or, if accounting is by units of participation, that reflect a
Participant's proportional interest in the "stock fund" for
which the Trustee has received no direction from the
Participant.
(C) A Participant who has directed the Trustee to tender some
or all of the shares of "Employer stock" that are credited to
his Account, if the Plan uses share accounting, or, if
accounting is by units of participation, that reflect the
Participant's proportional interest in the "stock fund" may,
at any time prior to the tender offer withdrawal date, direct
the Trustee to withdraw some or all of such tendered shares,
and the Trustee shall withdraw the directed number of shares
from the tender offer prior to the tender offer withdrawal
deadline. A Participant shall not be limited as to the number
of directions to tender or withdraw that the Participant may
give to the Trustee.
(D) A direction by a Participant to the Trustee to tender
shares of "Employer stock" that are credited to the
Participant's Account, if the Plan uses share accounting, or,
if accounting is by units of participation, that reflect the
Participant's proportional interest in the "stock fund" shall
not be considered a written election under the Plan by the
Participant to withdraw, or have distributed, any or all of
his withdrawable shares. If the Plan uses share accounting,
the Trustee shall credit to the Participant's Account the
proceeds received by the Trustee in exchange for the shares of
"Employer stock" tendered from the Participant's Account. If
accounting is by units of participation, the Trustee shall
credit to each proportional interest of the Participant from
which the tendered shares were taken the proceeds received by
the Trustee in exchange for the shares of "Employer stock"
tendered from that interest. Pending receipt of direction
(through the Administrator) from the Participant or the "named
fiduciary", as provided in the plan, as to which of the
remaining permissible investments the proceeds should be
invested in, the Trustee shall invest the proceeds in the
Permissible Investment specified for such purposes in the
Service Agreement or, if no such Permissible Investment has
been specified, the most conservative Permissible Investment
designated by the Employer in the Service Agreement.
(h) Shares Credited. If accounting with respect to the "stock fund" is
by units of participation, then for all purposes of this Section 14.24, the
number of shares of "Employer stock" deemed "credited" or "reflected" to a
Participant's proportional interest shall be determined as of the last preceding
valuation date. The trade date is the date the transaction is valued.
5
<PAGE>
(i) General. With respect to all rights other than the right to vote,
the right to tender, and the right to withdraw shares previously tendered, in
the case of "Employer stock" credited to a Participant's Account or proportional
interest in the "stock fund", the Trustee shall follow the directions of the
Participant and if no such directions are received, the directions of the "named
fiduciary". The Trustee shall have no duty to solicit directions from
Participants.
(j) Conversion. All provisions in this Section 14.24 shall also apply
to any securities received as a result of a conversion to "Employer stock".
IN WITNESS WHEREOF, the Employer has signed this instrument this 19th day of
November 1999.
PULSE ENGINEERING, INC.
By: /s/ Joel A. Miller
----------------------------
Title: V.P. Human Resources
----------------------------
6
Consent of Independent Auditors
The Board of Directors
Technitrol, Inc.:
We consent to the use of our report included in the Annual Report on Form 10-K
of Technitrol, Inc. for the year ended December 31, 1998, which has been
incorporated by reference in this Registration Statement on Form S-8.
/s/ KPMG LLP
- ---------------------------
KPMG LLP
Philadelphia, Pennsylvania
January 3, 2000
