EXHIBIT 10.15
-------------
WACHOVIA BANK OF GEORGIA, N.A.
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN AND TRUST
AMENDED AND RESTATED
--------------------
NON-STANDARDIZED FORM
PROFIT-SHARING PLAN ADOPTION AGREEMENT - 002
THIS AGREEMENT made the 17th day of December, 1992, by and
between ATLANTIC TELE-NETWORK, INC. (the "Employer"), having its principal
office at [insert address] Chase Financial Center, Orange Grove, Christiansted,
St. Croix, U.S.V.I. 00821, and WACHOVIA BANK OF GEORGIA, N.A. (the "Trustee"), a
national banking association with its principal office at Xxxxx 0000, 0
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or such other location as may be
designated by the Trustee;
W I T N E S S E T H:
-------------------
WHEREAS, the Employer desires to establish a profit-sharing
retirement plan for the benefit of the Employer's eligible employees; and
WHEREAS, Wachovia Bank of Georgia, N.A., as sponsor, has
created the Wachovia Bank of Georgia, N.A. Prototype Profit-Sharing Plan and
Trust (Non-Standardized Form) (the "plan"), which is qualified as to form under
Section 401(a) of the Internal Revenue Code as evidenced by an opinion letter by
the Commissioner of Revenue, dated March 12, 1990 (Serial No. D344777a);
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Terms used in this Adoption Agreement shall have the same
meaning as in the plan, unless some other meaning is expressly herein set forth.
The Employer hereby represents and warrants that the plan has been adopted by
the Employer upon proper authorization and the Employer hereby elects to join
the plan for the benefit of its participants as referred to in the plan. By the
execution of this Adoption Agreement, the Employer hereby agrees to be bound by
the terms of the plan and acknowledges receipt of a copy of the Trustee's fee
schedule for its services hereunder and indicates acceptance thereof.
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This Adoption Agreement may be used only in connection with
the Wachovia Bank of Georgia, N.A. Prototype Defined Contribution Retirement
Plan and Trust (Plan Document 01).
The Trustee will inform the Employer of any amendments to the
plan as of the discontinuance or abandonment of the plan. For questions
concerning the Plan, the Employer may call the Trustee at (000) 000-0000.
ARTICLE II
The Employer hereby makes the following designations or
elections for the purpose of the plan [Section references below correspond to
Section references in the plan]:
1.3 ADJUSTMENT DATE: The accounts of participants shall be
adjusted on the last day of each plan year and such other times as may be
designated below [check any additional desired adjustment dates]:
X (a) The last day of each month during the plan year.
---
___ (b) The last day of each third month during the plan year.
___ (c) The last day of each sixth month during the plan year.
1.10 COMPENSATION: The "compensation" of a participant (other
than a participant who is a self-employed individual) shall mean each
participant's [check only one]:
___ (i) W-2 earnings
X (ii) Compensation (as that term is defined in Section
--- 22.5.2 of the plan for purposes of Section 415(c)(3)
of the Code)
which is actually paid to the participant during [check only one]:
X A. The plan year.
___ B. The taxable year ending with or within the plan year.
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___ C. The limitation year ending with or within the plan
year.
Notwithstanding the foregoing, compensation SHALL/SHALL NOT (strike one) include
Employer contributions made pursuant to a salary reduction agreement which are
not includible in the gross income of the employees under Sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
For the purpose of Section 2.2, if a participant enters the plan during a plan
year, his compensation for such plan year shall be the following [check desired
choice]:
X A. His compensation for the full plan year.
---
___ B. His compensation for the plan year following the date
he enters the plan.
The compensation of a participant shall not include the following [check
applicable exclusions] [NOTE: The Employer may not select any of the following
exclusions if option (B) of Section 2.2 is chosen, and these exclusions shall
not apply in any plan year in which the plan is top-heavy]:
___ (a) Overtime
X (b) Bonuses
---
X (c) Commissions
---
___ (d) Compensation in excess of $___
1.13 EFFECTIVE DATE: The effective date of the plan is January
1, 1993. [If this plan amends and supersedes a prior plan, complete the blank
with the effective date of the amendment. See Section 15 for the effective date
of the prior plan.]
1.14 ELIGIBLE EMPLOYEES: All employees shall be eligible
employees except the following [check desired exclusions]:
___ (a) Employees of an affiliated employer that is not a
party to the plan.
___ (b) Leased employees.
X (c) Other: Employees covered by a collective
---
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bargaining agreement.
1.16 EMPLOYER: As of the effective date, the following
affiliated employers are parties to the plan [list all employer-parties,
including the Employer][:
Name Address EIN
---- ------- ---
All affiliates of Employer _______________
incorporated in the United States or _______________ _______
its territories.
--------------- --------------- -------
---------------
--------------- --------------- -------
---------------
1.19 HOURS OF SERVICE: For purposes of the plan, hours of
service for all employees shall be determined on the basis of the following
method [check only one]:
X A. On the basis of actual hours for which an employee is
--- paid or entitled to payment.
___ B. On the basis of days worked. An employee shall be
credited with 10 hours of service for a day if under
Section 1.19 of the plan he would be credited with at
least one hour of service for the day.
___ C. On the basis of weeks worked. An employee shall be
credited with 45 hours of service for a week if under
Section 1.19 of the plan he would be credited with at
least one hour of service for the week.
___ D. On the basis of semi-monthly payroll periods. An
employee shall be credited with 95 hours of service for
such a payroll period if under Section 1.19 of the plan
he would be credited with at least one hour of service
for such payroll period.
___ E. On the basis of calendar months worked. An employee
shall be credited with 190 hours of service for a month
if under Section 1.19 of the plan he
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would be credited with at least one hour of service for
the month.
1.21 NET PROFIT: In determining its net profit for the purpose
of determining the amount of the Employer's contribution to the plan, the
Employer elects to [check desired choice, if any]:
___ A. Exclude a return on the net worth of the Employer of
_% of such net worth.
___ B. Exclude $____ from such net profit as computed for
other purposes.
1.22 NORMAL RETIREMENT AGE: For each participant normal
retirement age is [check one]:
___ A. Age _____ (not to exceed 65).
X B. The later of age 65 (not to exceed 65) or the 5th (not
---
to exceed the fifth) anniversary of the participation
commencement date. The participation commencement date is the
first day of the first plan year in which the participant
commenced participation in the plan.
1.24 PAIRED PLANS: This plan is not a paired plan.
1.25 ELIGIBILITY: The following provisions shall apply with
respect to eligibility to participate in the plan (check either A or B,
whichever is selected):
___ A. An employee not otherwise a participant in the plan
shall enter the plan as of the effective date of the plan, if
he is in service on such date and has attained age __. Any
other employee shall enter the plan on the date designated
below which shall be applicable with respect to him [check
desired choice and fill in the blanks]:
___ (i) The first day of the plan year coincident
with or next following the date he shall have both
completed his first hour of service and attained age
___.
___ (ii) The first day of the month coincident with
or next following the date he shall
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have both completed his first hour of service and
attained age ___.
___ (iii) The date he shall have both completed his
first hour of service and attained age ___.
___ (iv) The first day of the plan year in which he
shall have both completed his first hour of service
and attained age ___. [NOTE: This is a retroactive
entry date.]
NOTE: In completing A above, the oldest age which an employee must attain as a
condition to becoming a participant cannot exceed age 20 1/2. If there is no
minimum age requirement, insert "O."
X B. An employee not otherwise a participant in the plan
---
shall enter the plan as of the date designated below which
shall be applicable with respect to him:
(i) The effective date of the plan, if the employee
is in service on such date and, as of such date, he has
attained age 0 and completed 0 year(s) of service;
(ii) If the employee is not described in (i), check
(a) or (b) and fill in the blanks:
X (a) The first day of the plan year or the
--- first day of the seventh month of the
plan year coincident with or next
following the date the employee has
attained age 21 and completed 1 year(s)
--
of service.
___ (b) The first day of the plan year in which
the employee has attained age and
completed __ year(s) of service. [NOTE:
This is a retroactive entry date.]
NOTE: In completing (i) and (ii), no more than 2 years of service shall be
required, and no more than one year of service shall be required unless the
Employer has elected to provide participants with immediate 100% vesting
pursuant to (iii) of Section 5.2 of this Adoption Agreement; and the oldest age
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which an employee must attain as a condition to becoming a participant can not
exceed age 21. If there is no minimum age requirement, insert "O."
1.26 PLAN: The name of the plan as applied to the Employer is
the (See Below) [insert name of Employer] and the plan identification number of
---------
this plan as applied to the Employer is 004 [insert 3 digit plan number).
Atlantic Tele-Network, Inc. Management
Employee Savings Plan
1.27 PLAN YEAR: The plan year shall be [check one and complete
the appropriate blanks]:
___ A. The 12 consecutive calendar month period ending on the
last day of the month of __________, 19__, and each
anniversary thereof.
X B. The 12 consecutive calendar month period which coincides
---
with the limitation year.
1.30 SERVICE [check if desired]: X An employee shall be
---
given credit for service with an employer prior to its becoming an affiliated
employer.
1.33 STANDARDIZED FORM PLAN: This plan is not a standardized
form plan.
2.1 EMPLOYER CONTRIBUTIONS: The Employer hereby selects the
contribution provision or formula designated below [check one and fill in the
appropriate blanks]:
___ (i) Such amount out of the current or accumulated net
profit of the Employer for such year as the Employer in its
discretion shall determine.
___ (ii) ___% of the net profit of the Employer for such year
plus such additional amount, if any, out of the current or
accumulated net profit of the Employer as the Employer in its
discretion shall determine.
___ (iii) An amount of the net profit of the Employer for such
year determined as follows: ___% of the first $_______ of such
net profit plus ___% of
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the next $_______ of such net profit, plus ___% of all such
net profit over $_______.
___ (iv) ___% of the net profit of the Employer for such year.
X (v) Such amount as the Employer in its discretion shall
---
determine without regard to current or accumulated net profit.
No adjustment affecting net profit for any fiscal year of the Employer made
subsequent to the filing of the federal income tax return of the Employer for
such year, whether resulting from audit of the Employer's tax returns or
otherwise, shall change the amount of the Employer's contribution for such year.
2.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS: The contribution
made by the Employer (including forfeitures as provided in Section 5.3) shall be
allocated as of the adjustment date for which such contribution was made among
the participants entitled to share therein (the "eligible participants") in the
manner determined as follows [check one and fill in blank if applicable]:
X A. The Employer contribution and forfeitures shall be
---
allocated in the ratio that each eligible participant's
compensation bears to the compensation for all eligible
participants.
___ B. The Employer contribution and forfeitures shall be
allocated as follows:
(i) If the plan is top-heavy and the minimum
allocation is required in this plan, there
shall be allocated to the account of each
eligible participant (including for this
purpose each employee entitled to the
minimum allocation provided in Section
21.2.1 of the plan) the amount determined
by multiplying the minimum allocation
percentage times his compensation. [If the
plan is not top-heavy or the minimum
allocation is not required in this plan,
go to paragraph (iii) below.]
(ii) If any portion of the Employer
contribution and forfeitures shall remain
to be allocated, the remaining portion,
not ex-
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ceeding the amount determined by
multiplying the minimum allocation
percentage times the excess compensation
of eligible participants, shall be
allocated in the ratio that each eligible
participant's excess compensation bears to
the excess compensation for all eligible
participants.
(iii) If any portion of the Employer
contribution and forfeitures shall remain
to be allocated, the remaining portion,
not exceeding the amount determined by
multiplying (a) times (b), where (a) is a
percentage equal to the maximum
profit-sharing disparity rate minus the
minimum allocation percentage [if
allocated pursuant to paragraph (i)] and
(b) is the sum of the compensation plus
the excess compensation of eligible
participants, shall be allocated in the
ratio that the sum of each eligible
participant's compensation plus excess
compensation bears to the sum of the
compensation plus excess compensation for
all eligible participants.
(iv) If any portion of the Employer
contributions or forfeitures shall remain
to be allocated, the remaining portion
shall be allocated in the ratio that the
compensation of each eligible participant
bears to the compensation for all eligible
participants.
For this purpose, the following definitions shall apply:
(a) "Compensation" shall mean compensation as
defined in Section 1.10.
(b) "Excess compensation" shall mean
compensation in excess of the integration
level.
(c) "Integration level" shall mean (elect one
and complete the blank):
___ (i) the taxable wage base.
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___ (ii) $_______ (a dollar amount less
than the taxable wage base).
___ (iii) ___% of the taxable wage base
(not to exceed 100 %).
(d) "Maximum profit-sharing disparity rate"
shall mean the lesser of 5.7%, or the
applicable percentage determined in
accordance with the following table:
(I) If the integration level is:
more than but not more than the applicable
_________ _________________ percentage is
-------------
$ 0 X 5.7%
X of TWB 80% of TWB 4.3%
80% of TWB Y 5.4%
X = the greater of $10,000 or 20% of TWB
Y = any amount more than 80% of TWB but
less than 100% of TWB.
(II) If the integration level is equal to the taxable wage base, the applicable
percentage is 5.7%.
(e) "Minimum allocation percentage" shall mean
the percentage specified in Section 21.2.1
of the Adoption Agreement.
(f) "Taxable wage base" or "TWB" shall mean the
maximum amount of earnings which may be
considered wages for a year under Section
3121(a)(1) of the Code as in effect as of
the first day of the plan year.
To be entitled to share in contributions by the Employer for any plan year, an
employee must be a participant during such plan year, must not have a break in
service during such plan year, and he must (check desired choice or choices, if
any]:
___ (i) Have a year of service within the plan year.
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___ (ii) Be in service on the last day of such plan
year.
Provided, that neither of conditions (i) or (ii) shall apply with respect to a
participant who shall retire or die while in service during such plan year.
3.1 CASH OR DEFERRED ARRANGEMENT [check if desired]: X The
---
plan shall include a Cash or Deferred Arrangement ("CODA") described in Section
401(k) of the Code.
3.2.1 ELECTIVE DEFERRALS: A participant may elect to have his
compensation reduced by the following percentage or amount per pay period, or
for a specified pay period or periods, as designated in-writing to the
plan-administrator- [check any applicable options and fill in the appropriate
blanks]:
X (i) An amount not in excess of 6% of the
--- participant's compensation.
___ (ii) An amount not in excess of $___________.
The elective deferrals of a participant shall be subject to the following
special provisions [complete the blanks below]:
A. An employee who is not otherwise eligible to
participate in the plan shall be considered a
participant solely for the purpose of making elective
deferrals to the plan as of the first day of the
MONTH/QWWOM (strike one) next following the date the
employee X [check if desired, otherwise no waiting
---
period required] completes one year of service and
attains age 21 [insert age not to exceed 21].
--
B. A participant may elect to commence elective
deferrals as of [insert any desired limitation]
___________________________
_______________________________________. Such
election shall become effective as of the first full
pay period following the receipt by the plan
administrator of the participant's election to
commence elective deferrals, or as soon as
administratively feasible thereafter.
C. A participant's election to make elective deferrals
pursuant to a salary reduction agreement shall remain
in effect until modified or termi-
-12-
nated. A participant may modify the amount of
elective deferrals as of [insert any desired
limitation) 1st day of each quarter .
---------------------------------------
Such election shall become effective as of the first
full pay period following the receipt by the plan
administrator of the participant's election to modify
elective deferrals, or as soon as administratively
feasible thereafter.
3.2.3 ACTUAL DEFERRAL PERCENTAGE: Qualified matching
contributions and qualified non-elective contributions may be taken into account
as elective deferrals for purposes of calculating the actual deferral
percentages. In determining elective deferrals for purposes of the ADP test, the
Employer shall include [elect as appropriate]:
X (i) Qualified, matching contributions
---
___ (ii) Qualified non-elective contributions
under this plan or any other plan of the Employer, as provided by regulations
under the Code.
The amount of qualified matching contributions taken into account as elective
deferrals for purposes of calculating the actual deferral percentage, subject to
such other requirements as may be prescribed by the Secretary of the Treasury,
shall be [elect as appropriate]:
___ (i) All such qualified matching contributions.
X (ii) Such qualified matching contributions that are
---
needed to meet the actual deferral percentage
test.
The amount of qualified non-elective contributions taken into account as
elective deferrals for purposes of calculating the actual deferral percentage,
subject to such other requirements as may be prescribed by the Secretary of the
Treasury, shall be [elect as appropriate]:
___ (i) All such qualified non-elective contributions.
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___ (ii) Such qualified non-elective contributions that
are needed to meet the actual deferral percentage
test.
3.2.7 QUALIFIED NON-ELECTIVE CONTRIBUTIONS [check if desired]:
___ The Employer shall make qualified non-elective contributions to the plan. If
the Employer does make such contributions to the plan, then the amount of such
contributions for each plan year shall be [elect one]:
___ (i) ___% (not to exceed 15 %) of the compensation of
all participants eligible to share in the
allocation.
___ (ii) ___% of the net profit of the Employer, but in no
event more than $ for any plan year.
___ (iii) An amount determined each plan year by the
Employer.
Allocation of qualified non-elective contributions shall be made to the accounts
of (elect one]:
___ (i) All participants.
___ (ii) Only non-highly compensated participants.
Allocation of qualified non-elective contributions shall be made [elect one]:
___ (i) In the ratio which each participant's
compensation for the plan year bears to the total
compensation of all participants for such plan
year.
___ (ii) In the ratio which each participant's
compensation not in excess of $.. for the plan
year bears to the total compensation of all
participants not in excess of $____ for such plan
year.
3.3 EMPLOYEE CONTRIBUTIONS [check if desired): X The Employer
---
shall permit participants to make employee contributions as provided in plan.
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3.4.1 MATCHING CONTRIBUTIONS [check if desired]: X
---
The Employer shall make matching contributions to the plan. If the Employer does
make such contributions to the plan, then the Employer shall make matching
contributions to the plan on behalf of [elect one]:
X (i) All participants
---
___ (ii) All participants who are non-highly
compensated employees who have satisfied the eligibility requirement specified
in [elect one]:
X (i) Section 1.25 of this Adoption Agreement
---
___ (ii) Section 3.2.1(A) of this Agreement
who make [elect one or both]:
X (i) Elective deferrals
---
___ (ii) Employee contributions
to the plan, and who [elect one or both, if desired]:
___ (y) Have a year of service within the plan
year.
X (z) Are in service on the last day of such
--- plan year.
Provided, that neither of conditions (y) or (z) shall apply with respect to a
participant who shall retire or die while in service during such plan year.
The Employer shall contribute and allocate to each participant's matching
contribution account an amount equal to:
X (i) 50 % of the participant's elective
--- deferrals.
___ (ii) ___% of the participant's employee
contributions.
___ (iii) An amount.-. determined each plan year
by the Employer.
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The Employer shall not match amounts provided above in excess of $___ or in
excess of 6 %, of the participant's compensation.
3.4.2 QUALIFIED MATCHING CONTRIBUTIONS [check if desired]: X
---
The Employer shall make qualified matching contributions to the plan. If the
Employer does make such contributions to the plan, then the Employer shall make
qualified matching contributions to the plan on behalf of [elect one]:
X (i) All participants
---
___ (ii) All participants who are non-highly
compensated employees
who make [elect one or both]:
X (i) Elective deferrals
---
___ (ii) Employee contributions
to the plan, and who [elect one or both, if desired]:
___ (y) Have a year of service within the plan
year.
X (z) Are in service on the last day of such
--- plan year.
Provided, that neither of conditions (y) or (z) shall apply with respect to a
participant who shall retire or die while in service during such plan year.
The Employer shall contribute and allocate to each participant's qualified
matching contribution account an amount equal to:
___ (i) ___% of the participant's elective
deferrals.
___ (ii) ___% of the participant's employee
contributions.
X (iii) An amount determined each plan year by
--- the Employer.
The Employer shall not match amounts provided above in excess of $_______, or in
excess of ___% of the participant's compensation.
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3.4.4 VESTING OF MATCHING CONTRIBUTIONS: Matching
contributions will be vested in accordance with the following schedule [elect
one]:
___ (i) Nonforfeitable when made.
X (ii) The vesting schedule described in
--- Section 5.2.
3.4.5 FORFEITURE OF MATCHING CONTRIBUTIONS: Matching
contributions which are forfeited as provided in Section 5.3 shall be treated as
follows [elect one]:
___ (i) Such forfeitures shall be reallocated
among all participants in the same
manner as any Employer contribution is
allocated as provided in Section 2.2.
___ (ii) Such forfeitures shall be combined with
any matching contribution made by the
Employer and allocated to all
participants entitled to share in the
matching contribution as provided in
Section 3.4.1.
X (iii) Such forfeitures shall be used to
--- reduce the amount of the matching
contribution which the Employer is
otherwise obligated to make under
Section 3.4.1.
3.5 AVERAGE CONTRIBUTION PERCENTAGE: In computing the average
contribution percentage, the Employer shall take into account and include as
contribution percentage amounts:
X (i) Elective deferrals
---
___ (ii) Qualified non-elective contributions
under this plan or any other plan of the Employer, as provided by regulations.
The amount of qualified non-elective contributions that are taken into account
as contribution percentage amounts for purposes of calculating the average
contribution percentage, subject to such other requirements as may be prescribed
by the Secretary of the Treasury, shall be:
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___ (i) All such qualified non-elective
contributions.
___ (ii) Such qualified non-elective
contributions that are needed to meet
the average contribution percentage
test.
The amount of elective deferrals taken into account as
contribution percentage amounts for purposes of calculating the average
contribution percentage, subject to such other requirements as may be prescribed
by the Secretary of the Treasury, shall be:
___ (i) All such elective deferrals.
X (ii) Such elective deferrals that are needed
--- to meet the average contribution
percentage test.
Forfeitures of excess aggregate contributions shall be:
X (i) Applied to reduce Employer
--- contributions.
___ (ii) Allocated, after all other forfeitures
under the plan, to each participant's
matching contribution account in the
ratio which each participant's
compensation for the plan year bears to
the total compensation of all
participants for such plan year. Such
forfeitures will not be allocated to the
account of any highly compensated
employee.
3.6 LIMITATIONS ON DISTRIBUTIONS: Elective deferrals,
qualified nonelective contributions and income allocable to such amounts shall
be distributable upon termination of service, death, or disability, as defined
in the plan, and, in addition [elect options, if any]:
X (i) Termination of the plan without the
--- establishment of another defined
contribution plan.
___ (ii) The disposition by the Employer to an
unrelated corporation of substantially
all of the assets (within the meaning of
section 409(d)(2) of the Code) used in a
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trade or business of the Employer 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.
___ (iii) The disposition by the Employer to an
unrelated entity of the Employer's
interest in a subsidiary (within the
meaning of section 409(d)(3) of the
Code) if such entity continues to
maintain this plan, but only with
respect to employees who continue
employment with such subsidiary.
X (iv) The attainment of age 59 1/2 of the
--- participant.
X (v) The hardship of the participant as
--- described in Section 3.6.2 of the plan.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the spousal and participant consent
requirements (if applicable) contained in Sections 401(a)(11) and 417 of the
Code.
4.4 EARLY RETIREMENT (check if desired]: X The Employer elects
---
to provide for early retirement. If early retirement is to be permitted, it
shall be subject to the following eligibility requirements [check (i), (ii) or
(iii) as desired and fill in appropriate blanks]:
___ (i) Completion of ___ years of service.
___ (ii) Attainment of age
X (iii) Completion of 5 years of service and
--- ---
attainment of age 55
----
4.5.1 TERMINATION OF SERVICE: A participant who terminates
service before he is eligible to retire may elect to receive a distribution of
his vested accrued benefit as of the adjustment date specified below (the
"termination adjustment date") [check one]:
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X (i) The adjustment date coincident with or
--- next following the termination of the
participant.
___ (ii) The adjustment date coincident with the
close of the plan year in which the
participant incurs his FIRST/FIFTH
(strike one) consecutive break in
service.
___ (iii) The adjustment date coincident with or
next following the normal retirement
date of the participant.
___ (iv) The adjustment date next preceding the
termination of the participant. This
option may only be elected if included
in a prior plan.]
NOTE: A prior plan cannot be amended to eliminate or reduce an existing optional
form of benefit, including payment schedule, time of commencement, and medium of
distribution.
4.5.3 DEFERRED PAYMENT ACCOUNT [check if desired]: The Trustee
shall segregate for investment purposes the vested accrued benefit of a
terminated participant as provided in Section 4.5.3 of the plan.
4.7 JOINT AND SURVIVOR ANNUITY REQUIREMENTS [check if
desired]: ___ The requirements of Section 4.7 of the plan shall apply
notwithstanding the provisions of Section 4.7.5 of the plan.
4.7.3 QUALIFIED JOINT AND SURVIVOR ANNUITY [check if desired]:
The amount of the survivor annuity shall be 100% of the amount payable during
the joint lives of the participant and his spouse. [If not checked, the
percentage of the survivor annuity shall be 50%.)
4.11 OPTIONAL WITHDRAWALS [check if desired]: ____ The
Employer elects to permit optional withdrawals by a plan participant from his
Employer contribution account while in the employment of the Employer as
provided in Section 4.11 of the plan, and subject to the provisions thereof. [If
option B of Section 2.2 above was chosen, this plan does not permit optional
withdrawals.
4.12 LOANS [check if desired): X The Employer elects to permit
---
loans to participants or beneficiaries (other
-20-
than owner-employees or shareholder-employees) as provided in Section 4.12 of
the Plan, and subject to the provisions thereof.
4.12.7 DEFAULT [this section shall apply only if loans are
permitted under the plan]: If an event of default shall occur with respect to a
borrowing participant or beneficiary, the entire unpaid principal amount of the
note plus accrued and unpaid interest shall immediately become due and payable,
and such unpaid principal and interest shall bear interest at a rate 2
percentage points greater than the rate set forth in the note. All such interest
shall be treated as income of the trust and shall be allocated among the
accounts of the participants as of such adjustment date in accordance with the
provisions of Section 6. Unless such unpaid principal and interest are paid on
or prior to the adjustment date next following such default, such unpaid
principal and interest shall be charged against his vested accrued benefit as a
payment therefrom to the extent permitted under the plan. If such unpaid
principal and interest shall exceed the amount of the defaulting participant's
or beneficiary's vested accrued benefit, all or any part of any additional
security pledged by the participant or beneficiary to secure the loan may, in
the discretion of the Committee, be sold at private or public sale. The proceeds
of such sale shall be applied first to pay the expenses of conducting the sale,
including reasonable attorneys' fees, and then to pay any sums due from the
borrowing participant or beneficiary to the trust, with such payment to be
applied first to accrued interest and then to principal. The participant or
beneficiary shall remain liable for any deficiency, and any surplus remaining
shall be payable to the borrowing participant or beneficiary. No distribution to
which such participant or beneficiary is entitled under the plan shall be made
to such participant or beneficiary unless and until all unpaid loans, including
interest thereon, have been satisfied. If any portion of the Employer
contribution account of a participant is applied to repay a loan pursuant to
this Section 4.12.7 at a time when he is not fully vested in such account and he
may increase the nonforfeitable percentage in such account, at any subsequent
relevant time the participant's nonforfeitable portion of the Employer
contribution account shall be not less than an amount ("X") determined by the
formula: X = P (AB + D) - D. For purposes of applying the formula: P is the
nonforfeitable percentage at the relevant time; AB is the account balance in the
Employer contribution account at the relevant time; D is the amount of the
participant's Employer contribution account applied to repay the loan; and the
rele-
-21-
vant time is the time under the plan at which the nonforfeitable percentage
of his account balance cannot increase.
5.2 VESTING: The nonforfeitable percentage of each participant
in his accrued benefit attributable to Employer contributions and forfeitures
shall be as follows [check (i), (ii), (iii) or (iv)]:
___ (i) 100% vesting after ___ (not to exceed 5) years of
service.
___ (ii) Number of Years of Vested
Service Percentage
------- ----------
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
___ (iii) immediate 100% vesting.
X (iv) Number of Years of Vested
--- Service Percentage
------- ----------
Less than 1 0
---
1 20
---
2 40
---
3 60 (at least 20%)
----
4 80 (at least 40%)
----
5 100 (at least 60%)
----
6 (at least 80%)
----
7 or more 100%
-----
5.2.2 YEARS OF SERVICE FOR VESTING: All years of service with
the Employer are counted to determine the vested percentage in the participant's
accrued benefit derived from Employer contributions except [check desired
exclusions, if any]:
X A. Years of service before age _ [not to
--- exceed age 18].
___ B. Years of service during a period for which
the participant made no mandatory
contributions, if required.
-22-
___ C. Years of service before the Employer
maintained this plan (including a prior plan
within the meaning of Section 15, if
applicable), subject to the provisions of
Section 5.2 and 15.
___ D. Years of service before January 1, 1971,
unless the employee has had at least 3 years
of service after December 31, 1970.
___ E. Years of service before the effective date
of ERISA if such service would have been
disregarded under the break in service rules
of a prior plan in effect from time to time
before such date. For this purpose, break in
service rules are rules which result in the
loss of prior vesting or benefit accruals,
or which deny an employee eligibility to
participate, by reason of separation or
failure to complete a required period of
service within a specified period of time.
5.3 FORFEITURES: In the case of a participant who shall
forfeit a portion of his accrued benefit as of the adjustment date provided in
Section 5.3 of the plan, the portion of his accrued benefit so forfeited shall
be combined with the amounts forfeited by all other such participants as of such
adjustment date, and the aggregate of such forfeitures shall be reallocated
among all participants who are entitled to share in the Employer contribution
for the plan year ending on such adjustment date in the same manner as the
Employer contribution is allocated as provided in Section 2.2. Notwithstanding
the foregoing, forfeitures shall only be allocated for the benefit of employees
of the Employer who adopted this plan.
7. PLAN ADMINISTRATION: The plan administrator shall be
[check desired choice]:
X A. The Chairman of the Committee; or
---
___ B. Other [insert title or other description]:
______________________.
The business telephone number of the plan administrator is (000) 000-0000.
-23-
In the event there shall be more than one employer-party to the plan, the
Committee shall be appointed by the Board of _________. [Insert name of one
employer-party.]
X The Committee hereby delegates to the Trustee all responsibility for
---
accounting for the accrued benefits of participants [check if desired].
15. PRIOR PLAN [check if applicable]: X This plan amends and
---
supersedes a previously existing defined contribution plan as described in
Section 15 of the plan. The effective date of the prior plan was 8/1/88.
------
20. PURCHASE OF INSURANCE POLICIES [check if desired]: ___ The
Employer elects to permit each participant, acting through the Committee, to
direct the Trustee to invest assets of the trust in life insurance as provided
in Section 20 of the plan.
21.1.4 CUMULATIVE ACCRUED BENEFIT: For purposes of
establishing present value to compute the cumulative accrued benefit, any
benefit shall be discounted only for mortality and interest based on the
following [not applicable if the Employer has not maintained a defined benefit
plan for the current or 4 preceding plan years]:
Interest rate _________%
Mortality table _______
21.2.1 MINIMUM ALLOCATION: For purposes of minimum top-heavy
allocations, contributions and forfeitures equal to 0 % of each non-key
---
employee's compensation will be allocated to the employee's account when the
plan is top-heavy. [Employer must insert a percentage that is not less than 3%;
provided that "0" may be inserted if the minimum allocation will be provided to
participants under any other plan or plans of the Employer. If permitted
pursuant to Section 21.2.1 of the plan, such percentage shall in no event exceed
the largest percentage of Employer contributions and forfeitures allocated on
behalf of any key employee. The Employer may attach additional provisions as
necessary to satisfy Section 416 of the Code because of the required aggregation
of multiple plans.]
21.2.2 MINIMUM VESTING SCHEDULE [complete this section only if
a vesting schedule other than option (iii) of Section 5.2 above was selected]:
For any plan year in which the plan is top-heavy, the nonforfeitable percentage
of each par-
-24-
ticipant in his accrued benefit attributable to Employer contributions shall be
determined on the basis of the following [check one]:
___ (i) 100% vesting after ___ (not to exceed 3)
years of service.
___ (ii) Number of Years of Vesting
Service Percentage
------------------ ----------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
22. LIMITATIONS ON ALLOCATIONS: In administering the plan, the
following special provisions shall apply [the Employer must complete this
Section 22 if it maintains or ever maintained another qualified plan in which
any participant in this plan is (or was) a participant; or if it maintains a
welfare benefit fund as defined in Section 419(e) of the Code, or an individual
medical account as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any participant in this plan]:
22.1.4 If as a result of the allocation of forfeitures, an
error in estimating a participant's compensation, or other limited facts and
circumstances, the maximum permissible amount would be exceeded for any
limitation year, such excess amount with respect to a participant for such
limitation year shall be disposed of in the following order:
(a) Any nondeductible employee contributions (and any gains
attributable thereto) to the extent of such excess shall be returned to
the participant.
(b) If further reductions are necessary, then such
participant's share of the Employer contribution for the limitation
year shall be reduced to the extent of such remaining excess. The
amount of the reduction shall be reallocated among the remaining
participants in the ratio which each of such participant's compensation
during the limitation year in question bears to the aggregate
compensation of all such participants during such limitation year and
before any nondeductible employee contributions or Employer
Contributions for such limitation year are al-
-25-
located. If all of the amount of such reduction cannot be reallocated
without causing the account of each other participant to exceed the
maximum permissible amount, then such remaining amount shall be
credited to a separate special account, designated as the "suspense
account."
(c) If further reductions are necessary, then such
participant's share of the forfeitures for the limitation year shall be
reduced to the extent of such remaining excess. The amount of such
reduction shall be reallocated among the remaining participants in the
ratio which such participant's compensation during the limitation year
in question bears to the aggregate compensation of all such
participants during such limitation year and before any nondeductible
employee contributions or Employer contributions for such limitation
year are allocated. If all of the amount of such reduction cannot be
reallocated without causing the account of each other participant to
exceed the maximum permissible amount, then such remaining amount shall
be credited to the suspense account established pursuant to (b)
immediately preceding.
(d) The suspense account shall contain the excess amounts of
Employer contributions and forfeitures from all limitation years. Such
excess amounts shall be allocated for each succeeding limitation year
among the accounts of participants in the ratio, which each of such
participant's compensation for the limitation year in question bears to
the aggregate compensation of all such participants during such
limitation year and before any nondeductible employee contributions or
Employer contributions for such year are allocated. The suspense
account shall be adjusted annually for additions thereto and
distributions therefrom and for any net income or net loss attributable
thereto. In the event the plan is terminated, any balance in the
suspense account shall be returned to the Employer.
22.3 If the participant is covered under another qualified
defined contribution plan maintained by the Employer, other than a master or
prototype plan [check one]:
X The provisions of Section 22.2.1 through 22.2.6 will apply as if the
---
other plan were a master or prototype plan.
___ [Provide the method under which the plans will limit total annual
additions to the maximum permissi-
-26-
ble amount, and will properly reduce any excess amounts, in a manner
that precludes Employer discretion].
22.4 If the participant is or has ever been a participant in a
defined benefit plan maintained by the Employer [Employer must insert provision
which satisfies 1.0 limitation of Section 415(e) of the Code. See Treasury
Regulation Section 1.415-1 for guidance.]: See Exhibit A attached
-------------------------------------
--------------------------------------------------------------------------------
22.5.9 The limitation year is the following 12 consecutive
month period: calendar year.
-------- ----
23. PARTICIPANT DIRECTING INVESTMENT [check if desired]: X The
Employer elects to permit each participant, acting through the Committee, to
direct the Trustee as to the investment or reinvestment of his account as
provided in [check either or both, if desired]:
X Section 23.1 of the plan.
---
___ Section 23.2 of the plan. [Section 23.2 of the plan
shall not apply to an unincorporated employer.]
If the Employer has elected this Section 23, the participant may direct the
investment of [elect one]:
X A. his entire account.
---
___ B. his elective deferral account described in
Section 3.2.8 only.
___ C. the following separate accounts which are a
part of his entire account [elect one or
more as desired]:
___ (i) the Employer contribution account
described in Section 2.2;
___ (ii) the deductible contribution
account described in Section 2.4;
___ (iii) the mandatory contribution
account described in Section 2.5;
-27-
___ (iv) the elective deferral account
described in Section 3.2.8;
___ (v) the qualified non-elective
contribution account described in
Section 3.2.8;
___ (vi) the employee contribution account
described in Section 3.3.3;
___ (vii) the matching contribution
account described in Section 3.4.3;
___ (viii) the qualified matching
contribution account described in Section
3.4.3;
___ (ix) the rollover account described
in Section 16; and
___ (x) the direct transfer account
described in Section 17.
NOTE: THIS IS AN IMPORTANT DOCUMENT HAVING COMPLEX TAX AND OTHER LEGAL
IMPLICATIONS. THE SPONSOR HEREBY ADVISES THAT THE EMPLOYER CONSULT WITH ITS OWN
ATTORNEY BEFORE SIGNING.
-28-
IN WITNESS WHEREOF, this Agreement has been executed by the
parties hereto on the day and year first above stated.
Atlantic Tele-Network, Inc.
----------------------------------
NAME OF EMPLOYER
/s/ Xxxxx X. Xxxxxx
By:_________________________________________
PRESIDENT, PARTNER, OR SOLE PROPRIETOR
Xxxxx X. Xxxxxx, Chief Financial Officer
Attest/Witness:
/s/ Xxxxx Xxxxxx
-------------------
[Corporate Seal]
WACHOVIA BANK OF GEORGIA, N.A.
/s/ X. Xxxx, Vice President
By:_________________________________________
AUTHORIZED OFFICER
Attest/Witness:
/s/ Xxxxxxx X. Xxxxx
--------------------
ASSISTANT SECRETARY
[Corporate Seal]
NOTE: The 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 the plan is qualified, application for a determination
letter should be made to the appropriate Key District Director of Internal
Revenue. Failure to properly complete the Adoption Agreement may result in the
disqualification of the plan.
EXHIBIT A
COMBINED PLAN LIMITATION
The Employer shall reduce its contributions under the defined
contribution plan to the extent necessary to prevent the sum of the following
fractions, computed as of the close of the Limitation Year, from exceeding 1.0:
Projected Annual Benefit of the Participant
under the defined benefit plan
--------------------------------------------------------------------------------
The lessor of (i) 125% of the Participant's dollar limitation in effect under
Code Section 415(b)(1)(A) for the Limitation Year, or (ii) 1.4 times the
Participant's average Compensation limitation under Section 3.05
plus
the sum of the Annual Additions to the Participant's Account under the defined
contribution plan(s) as of the close
of the Limitation Year
--------------------------------------------------------------------------------
the sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service
with the Employer: (i) 125% of the dollar limitation in effect
under Code Section 415(c)(1)(A) for the Limitation Year
(determined without regard to the special dollar limitations
for employee stock ownership plans), or (ii) 35% of the
Participant's Compensation for the Limitation Year
The Advisory Committee shall determine the denominator of the first
fraction by taking into account the years of participation and the years of
service the Advisory Committee reasonably can project the Participant will have
at the time his Projected Annual Benefit is payable. The Advisory Committee may
use on a uniform basis any transitional rules prescribed by law to compute the
Participant's fractions. The denominator of the first fraction shall not be less
than 125% of the Participant's Current Accrued Benefit (as determined under
Section 3.05). For purposes of the second fraction, the Advisory Committee shall
not recompute Annual Additions in Limitation Years beginning prior to January 1,
1987, to treat all Employee contributions as Annual Additions. If the plan
satisfied Code Section 415 for Limitation Years beginning prior to January 1,
1987, the Advisory Committee will redetermine the fractions as of the end of the
last Limitation Year beginning before January 1, 1987, in accordance with this
Section 3.07. If the sum of the redetermined fractions exceeds 1.0, the Advisory
Committee will subtract permanently from the numerator of
-2-
the second fraction an amount equal to the product of (1) the excess of the sum
of the fractions over 1.0, times (2) the denominator of the second fraction. In
making the adjustment, the Advisory Committee shall disregard any Accrued
Benefit in excess of the Current Accrued Benefit.
WACHOVIA BANK OF GEORGIA, N.A.
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN AND TRUST
TABLE OF CONTENTS
WACHOVIA BANK OF GEORGIA, N.A.
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN AND TRUST
Page
----
Section 1. Definitions:................................................. 1
Section 2. Contributions to the Trust and Allocation Thereof:........... 15
2.1. Employer contributions.................................. 15
2.2. Allocation of Employer contributions.................... 15
2.3. Voluntary nondeductible employee contributions.......... 16
2.4. Voluntary deductible employee contributions............. 16
2.5. Mandatory employee contributions........................ 16
Section 3. Cash or Deferred Arrangement:................................. 17
3.1. General................................................. 17
3.2. Elective deferrals...................................... 17
3.3. Employee contributions.................................. 23
3.4. Matching contributions.................................. 24
3.5. Limitations on matching contributions and employee
contributions................................. 25
3.6. Special distribution rules.............................. 28
3.7. Top-heavy requirements.................................. 30
3.8. Definitions............................................. 30
Section 4. Retirement; Termination of Service; Death:................... 33
4.1. Normal retirement....................................... 33
4.2. Delayed retirement...................................... 33
4.3. Disability.............................................. 33
4.4. Early retirement........................................ 33
4.5. Termination of service.................................. 34
4.6. Distribution requirements............................... 35
4.7. Joint and survivor annuity requirements................. 45
4.8. Small amount............................................ 52
4.9. Interim payments........................................ 53
4.10. Continued share in profits or losses of trust fund..... 53
4.11. Optional withdrawals................................... 53
4.12. Loans.................................................. 54
Section 5. Vesting:...................................................... 56
Section 6. Accounts of Participants:..................................... 59
Section 7. Administration by Committee:.................................. 60
-i-
Page
----
Section 8. Management of Funds and Amendment or Termination of Plan:.... 63
Section 9. Allocation of Responsibilities Among Named Fiduciaries:...... 65
Section 10. Benefits Not Assignable; Facility of Payments:............... 67
Section 11. Beneficiary:................................................. 68
Section 12. Termination of Plan and Trust; Removal of Trustee; Merger or
Consolidation of Plan:.................................... 68
12.1. Complete termination.................................. 68
12.2. Partial termination................................... 69
12.3. Removal and resignation of Trustee.................... 69
12.4. Merger or consolidation............................... 69
Section 13. Communication to Participants:............................... 70
Section 14. Claims Procedure:............................................ 70
Section 15. Previously Existing Qualified Plans of the Employer:......... 72
Section 16. Special Provisions Relating to Transfers From Qualified
Plans:.................................................... 72
Section 17. Rollovers:................................................... 73
Section 18. Trust Provisions:............................................ 75
18.1. Trustee's powers...................................... 75
18.2. Accountings........................................... 81
18.3. Compensation of Trustee............................... 82
18.4. Responsibilities and scope of duties of Trustee....... 82
18.5. Failure to direct Trustee............................. 83
Section 19. Qualification of Plan:....................................... 83
Section 20. Purchase of Insurance Policies:.............................. 84
Section 21. Special Top-Heavy Provisions:................................ 86
Section 22. Limitations on Allocations:.................................. 91
Section 23. Participant Directing Investment:............................ 98
Section 24. Miscellaneous Provisions:....................................104
-ii-
WACHOVIA BANK OF GEORGIA, N.A.
PROTOTYPE DEFINED CONTRIBUTION
RETIREMENT PLAN AND TRUST
PLAN DOCUMENT
Section 1. Definitions:
--------- -----------
As used in the plan, including this Section 1, references to one
gender shall include the other and, unless otherwise indicated by the context:
1.1. "Account" shall mean the aggregate of the separate accounts to be
kept with respect to each participant. To the extent applicable, such separate
accounts shall include the following:
(i) the Employer contribution account described in Section 2.2;
(ii) the deductible contribution account described in Section 2.4;
(iii) the mandatory contribution account described in Section 2.5;
(iv) the elective deferral account described in Section 3.2.8;
(v) the qualified non-elective contribution account described in
Section 3.2.8;
(vi) the employee contribution account described in Section 3.3.3;
(vii) the matching contribution account described in Section 3.4.3;
(viii) the qualified matching contribution account described in Section
3.4.3;
(ix) the rollover account described in Section 16; and
(x) the direct transfer account described in Section 17.
-2-
1.2. "Accrued benefit" shall mean with respect to each participant the
balance in his account as of the applicable adjustment date following adjustment
thereof as provided in Section 6.
1.3. "Adjustment date" shall mean the last day of each plan year, and
such other times as shall be designated in the Adoption Agreement.
1.4. "Adoption Agreement" shall mean the written agreement pursuant to
which the Employer adopts the plan, which agreement shall be between the
Employer and the Trustee. The Adoption Agreement is a part of the plan as
applied to the Employer.
1.5. "Affiliated employer" shall mean (i) any corporation which is a
member of a controlled group of corporations (as defined in Section 414(b) of
the Code) which includes the Employer; (ii) any trade or business (whether or
not incorporated) that is under common control (as defined in Section 414(c) of
the Code) with the Employer; (iii) any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined in
Section 414(m) of the Code) which includes the Employer; and (iv) any other
entity required to be aggregated with the Employer pursuant to regulations
prescribed by the Secretary of the Treasury under Section 414(o) of the Code.
1.6. "Board" shall mean the Board of Directors of the Employer if the
Employer is a corporation. If the Employer is an unincorporated employer,
"Board" shall mean the Employer.
1.7. A "break in service," as applied to the service of an employee,
shall mean a designated 12 consecutive calendar month period (a "computation
period") in which the employee shall not have completed more than 500 hours of
service. Such period shall be the plan year unless otherwise specifically
provided herein.
1.8. "Code" shall mean the Internal Revenue Code of 1986 and rules and
regulations issued thereunder.
1.9. "Committee" shall mean the administrative committee provided for
in Section 7.
1.10. "Compensation" shall mean all of each participant's (i) W-2
earnings or (ii) compensation (as that term is defined in Section 415(c)(3) of
the Code) as elected by the Em-
-3-
ployer in the Adoption Agreement. For any self-employed individual covered under
the plan, "compensation" shall mean earned income. Compensation shall include
only that compensation which is actually paid to the participant during the
applicable period. Except as otherwise provided in the plan, the applicable
period shall be the period elected by the Employer in the Adoption Agreement. If
the Employer makes no election, the applicable period shall be the plan year.
Notwithstanding the foregoing, if elected by the Employer in the Adoption
Agreement, compensation shall include any amount which is contributed by the
Employer pursuant to a salary reduction agreement and which is not includible in
the gross income of the employee under Sections 125, 402(a)(8), 402(h) or 403(b)
of the Code. The annual compensation of each participant taken into account
under the plan year for any year beginning on or after January 1, 1989 shall not
exceed $200,000, as adjusted at the same time and in the same manner as under
Section 415(d) of the Code. 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, as a result of the
application of such rules the adjusted $200,000 limitation is exceeded, then
(except for purposes of determining the portion of compensation up to the
integration level if this plan provides for permitted disparity), the limitation
shall be prorated among the affected individuals in proportion to each such
individual's compensation as determined under this Section 1.10 prior to the
application of this limitation.
1.11. "Disability" shall mean the inability to engage in any gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which can be expected to last for a
continuous period of not less than 12 months. The determination of the existence
or nonexistence of disability shall be made by the Committee in a
nondiscriminatory manner pursuant to a medical examination by a medical doctor
selected or approved by the Committee.
1.12. "Earned income" shall mean the net earnings from self-employment
in the trade or business with respect to which the plan is established for which
personal services of the individual are a material income-producing factor. Net
earnings will be determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are reduced by
contributions by the Em-
-4-
ployer to a qualified plan to the extent deductible by the Employer under
Section 404 of the Code. Net earnings shall be determined with regard to the
deduction allowed to the Employer by Section 164(f) of the Code for taxable
years beginning after December 31, 1989.
1.13. "Effective date of the plan" shall mean the date that the plan
becomes effective with respect to the Employer, as specified by the Employer in
the Adoption Agreement.
1.14. "Eligible employee" shall mean each employee; provided, that if
the plan is not a standardized form plan, "eligible employee" shall mean each
employee except those excluded pursuant to the Adoption Agreement.
1.15. "Employee" shall mean, except as otherwise provided herein, an
individual in the service of the Employer if the relationship between him and
the Employer is the legal relationship of employer and employee. In determining
who is an employee for the purposes of this plan, the following special
provisions shall apply:
1.15.1. Except as provided in Section 22.5.6, all employees of an
affiliated employer shall be treated as employees of the Employer.
1.15.2. All leased employees deemed to be employees of the Employer or
an affiliated employer as provided in Sections 414(n) or 414(o) of the
Code and the regulations thereunder shall be treated as employees of
the Employer.
1.15.3. All employees included in a unit of employees covered by a
collective bargaining agreement, if retirement benefits were the
subject of good faith bargaining, shall not be treated as employees of
the Employer.
1.15.4. All employees who are nonresident aliens and who receive no
income from the Employer which constitutes income from sources within
the United States shall not be treated as employees of the Employer.
See Sections 1.14 and 1.25 for provisions governing eligibility of an employee
to become a participant in the plan. See Section 1.5 for definition of
affiliated employer.
1.16. "Employer" shall mean each employer entering into an Adoption
Agreement with the Trustee. All references herein to the "Employer" shall be
applied to each such Employer
-5-
as if the plan were solely the plan of that Employer. The Employer entering into
an Adoption Agreement with the Trustee may be a corporation, or a partnership or
sole proprietorship (herein, an "unincorporated employer"). If the plan is a
standardized form plan, each affiliated employer must become a party to the plan
by entering into the Adoption Agreement with the Trustee. If the plan is not a
standardized form plan, each affiliated employer may become a party to the plan,
if desired, by entering into the Adoption Agreement with the Trustee. With
respect to each affiliated employer which becomes a party to the plan, the
following special provisions shall apply:
1.16.1. As used in the plan, unless otherwise indicated by the
context, the term "Employer" shall mean collectively all employer-
parties to the plan.
1.16.2. The plan shall be applied as a single plan with respect to all
employer-parties as if there were only one employer-party, and service
for purposes of the plan shall be interchangeable among employer-
parties to the plan and shall not be deemed to be interrupted by the
transfer at any time of an employee from the service of one employer-
party to the plan to the service of another employer-party.
1.16.3. Notwithstanding anything to the contrary, there shall be a
single Committee with respect to all employer-parties to the plan,
which shall be the Committee designated pursuant to the provisions of
Section 7 of the Adoption Agreement.
1.17. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended (including amendments of the Internal Revenue Code affected
thereby), and rules and regulations issued thereunder.
1.18. "Highly compensated participant" shall mean any participant who
is a highly compensated employee. A "non-highly compensated participant" shall
mean any participant who is neither a highly compensated participant nor a
family member (within the meaning of Section 1.18.4). Any individual who has
been a highly compensated participant but who has ceased to be a participant for
any reason shall be treated as a highly compensated participant if he is a
former employee within the meaning of Section 1.18.5. A "highly compensated
employee" shall mean any employee who, during the plan year or the preceding
plan year:
-6-
(i) was at any time a 5% owner (as defined in Section 416(i)(1)(iii)
of the Code);
(ii) received compensation from the Employer and affiliated employers
in excess of $75,000 (adjusted pursuant to Section 415(d) of the Code);
(iii) received compensation from the Employer and affiliated employers
in excess of $50,000 (adjusted pursuant to Section 415(d) of the Code)
and was in the top-paid group of employees for such year; or
(iv) was at any time an officer and received compensation greater than
50% of the dollar limitation in effect under Section 415(b)(1)(A) of
the Code for such year. No more than 50 employees (or, if lesser, the
greater of 3 employees or 10% of the employees) shall be treated as
officers. If for any year no officer of the Employer receives
compensation greater than 50% of the dollar limitation in effect for
such year, the highest paid officer of the Employer for such year shall
be treated as a highly compensated employee.
For purposes of this Section 1. 18, the following special provisions shall
apply:
1.18.1. Notwithstanding the provisions of Section 1.15, the term
employee" shall mean an individual in the service of the Employer if
the relationship between him and the Employer is the legal relationship
of employer and employee.
1.18.2. An employee not described in (ii), (iii), or (iv) above for
the preceding plan year (without regard to this Section 1.18.2) shall
not be treated as described in subparagraph (ii), (iii) or (iv) in the
current plan year unless he is one of the 100 employees paid the
greatest compensation during the current plan year.
1.18.3. An employee who performs service for the Employer any time
during the year is in the top-paid group of employees for any year if
such employee is in the group consisting of the top 20% of the
employees when ranked on the basis of compensation paid during such
year. For purposes of determining the number of employees in the top-
paid group (but not for identifying the particular employ-
-7-
ees in the top-paid group), the following employees shall be excluded:
(A) employees who have not completed 6 months of service;
(B) employees who normally work less than 17 1/2 hours
per week;
(C) employees who normally work not more than 6 months
during any year;
(D) employees who have not attained age 21;
(E) employees who are included in a unit of employees covered
by a bona fide collective bargaining agreement with the Employer; and
(F) employees who are nonresident aliens and who receive no
earned income (within the meaning of Section 911(d)(2) of the Code)
from the Employer which constitutes income from sources within the
United States (within the meaning of Section 861(a)(3) of the Code).
The Committee may elect to apply subparagraph (A), (B), (C), or (D) of this
Section 1.18.3 by substituting a shorter period of service, smaller number of
hours or months, or lower age for that specified in such subparagraphs.
1.18.4. If any individual is a member of the family of a 5 % owner or
of a highly compensated employee who is one of the 10 most highly
compensated employees during the plan year, then (i) such individual
shall not be considered a separate employee, and (ii) any compensation
paid to such individual (and any contribution or benefit on behalf of
such individual) shall be treated as if it were paid to (or on behalf
of) the 5% owner or highly compensated employee. For purposes of this
Section 1.18.4, the term "family" or "family member" means, with
respect to any employee, such employee's spouse and lineal ascendants
or descendants and the spouses of lineal ascendants or descendants.
1.18.5. A former employee shall be treated as a highly compensated
employee if he was a highly compensated employee when he separated from
service, or at any time after attaining age 55.
-8-
1.18.6. The determination of who is a highly compensated employee,
including determination of the number and identity of employees in the
top paid group, the 100 employees paid the greatest compensation, the
number of employees treated as officers, and the compensation
considered for purposes of this Section 1.18, shall be made in
accordance with Section 414(q) of the Code and the regulations
thereunder.
1.19. "Hour of service" shall mean (a) each hour for which an employee
is paid or entitled to payment by the Employer for service (to be credited to
the employee for the computation period in which the service is performed); (b)
each hour for which an employee is paid or entitled to payment by the Employer
on account of a period of time during which no service is performed
(irrespective of whether the employment relationship has terminated) [such as
vacation, holiday, illness, incapacity (including disability), lay-off, jury
duty, military duty or leave of absence]; (c) each hour [to the extent not
included in (a) or (b)] for which back pay (irrespective of mitigation of
damages) has been either awarded or agreed to by the Employer (to be credited to
the employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made); and (d) each hour for which an employee is not
actually in service but is required to be given credit for service under any law
of the United States; provided, that in applying paragraph (b) for periods in
which an employee is not actually in service, the following special provisions
shall apply:
(i) The number of hours to be credited with respect
to any single continuous period shall be the lesser of. (A)
501 hours, or (B) the number of hours for which the employee
is paid with respect to such period; provided, that in
determining whether an employee has incurred a break in
service, the provisions of this subdivision (i) shall not
limit the number of hours to be credited to such employee on
account of a leave of absence;
(ii) No hours shall be credited with respect to
payments made to the employee for the purpose of complying
with applicable worker's compensation, unemployment
compensation or disability insurance laws, or payments solely
to reimburse an employee for medical or medically related
expenses incurred by the employee; and
-9-
(iii) An amount paid to an employee by the Employer
indirectly, such as by a trust, fund or insurer to which the
Employer makes contributions or pays premiums, shall be deemed
to be paid by the Employer.
The provisions of this Section 1.19 shall be applied in accordance with the
provisions of Section 1.30 of the plan, and United States Department of Labor
Regulations Sections 2530.200b-2(b) and (c) (which provisions are incorporated
herein by reference). The method used for determining hours of service shall be
as selected in the Adoption Agreement. Notwithstanding the foregoing provisions
of this Section 1.19, solely for the purpose of determining whether an employee
has incurred a break in service for participation and vesting purposes in a
computation period, the following special provisions shall apply:
(A) In addition to hours for which an employee is entitled to
credit under (a) through (d) above, such employee shall also receive
credit for each hour with respect to the period that he is on a leave
of absence approved by the Employer for which he is not paid or
entitled to payment.
(B) An employee 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 employee but for such
absence, or in any case in which such hours cannot be determined, 8
hours of service per day of such absence. For purposes of this
paragraph (B), an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the employee, (2) by
reason of a birth of a child of the employee, (3) by reason of the
placement of a child with the employee in connection with the adoption
of such child by such employee, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or
placement. "Me hours of service credited under this paragraph (B) shall
be credited with respect to the computation period used in determining
years of service and breaks in service in which the absence begins, if
the crediting is necessary to prevent a break in service in that
period; in all other cases, such hours of service shall be credited in
the following computation period.
1.20. "Leased employee" shall mean any individual (other than an
employee of the recipient) who, pursuant to an
-10-
agreement between the recipient employer and any other person (the "leasing
organization") has performed services for the recipient employer (or the
recipient employer and related persons determined in accordance with Section
414(n) of the Code) on a substantially full-time basis for a period of at least
one year, and such services are of a type historically performed by employment
in the business field of the recipient employer. Contributions or benefits
provided a leased employee by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as provided by
the recipient employer. A leased employee shall not be considered an employee of
the recipient employer if: (a) such individual is covered by a money purchase
pension plan providing: (i) a nonintegrated employer contribution rate of at
least 10% of compensation, as defined in Section 415(c)(3) of the Code, but
including amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Sections 125,402(a)(8), 402(h)
or 403(b) of the Code, (ii) immediate participation, and (iii) full and
immediate vesting; and (b) leased employees do not constitute more than 20% of
the recipient employer's non-highly compensated workforce.
1.21. "Net profit" shall mean the current or accumulated
earnings of the Employer as determined according to generally accepted
accounting principles and practices by the accountant of the Employer, subject
to the following adjustments: (i) gains or losses arising from the sale or other
disposition of fixed or capital assets of the Employer shall be excluded; (ii)
taxes based upon income shall not be deducted; and (iii) contributions of the
Employer under this plan or any other defined contribution plan maintained by
the Employer shall not be deducted; provided, that by so specifying in the
Adoption Agreement the Employer may exclude from "net profit" a stated base
amount, or a specified return on the net worth of the Employer determined as of
the close of the fiscal year of the Employer next preceding the fiscal year for
which the contribution is being made.
1.22. "Normal retirement age" of a participant shall mean the
age specified in the Adoption Agreement. The "normal retirement date" of a
participant shall mean the date he attains his normal retirement age.
1.23. "Owner-employee" shall mean an individual who is a sole
proprietor, or who is a partner owning more than 10% of either the capital
interest or profits interest in a partnership. If this plan provides
contributions or benefits for
-11-
one or more owner-employees who control both the business for which this plan is
established and one or more other trades or businesses, this plan and the plan
established for such other trades or businesses must, when looked at as a single
plan, satisfy Sections 401(a) and (d) of the Code for the employees of this and
all 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 the other trades or businesses must be included in
a plan which satisfies Sections 401(a) and (d) of the Code and which provides
contributions and benefits not less favorable than provided for owner-employees
under this plan. If an individual is covered as an owner-employee under the
plans of 2 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 the preceding
provisions of this Section 1.23, an owner-employee, or 2 or more owner-
employees, will be considered to control a trade or business if the owner-
employee, or 2 or more 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% of either the capital interest or the profits interest in the
partnership. For purposes of the preceding sentence, an owner-employee, or 2 or
more owner-employees, shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such owner-
employee, or such 2 or more owner-employees, are considered to control within
the meaning of the preceding sentence.
1.24. "Paired plans" shall mean the Wachovia Bank of Georgia,
N.A. Prototype Profit-Sharing Retirement Plan and Trust (Standardized Form)
(Plan Number 001) and the Wachovia Bank of Georgia, N.A. Prototype Money
Purchase Pension Plan and Trust (Standardized Form) (Plan Number 003), if each
of such plans are adopted or maintained by the Employer.
1.25. "Participant" shall mean with respect to any plan year
an eligible employee who has entered the plan and any former employee who has an
accrued benefit which is not wholly forfeitable for the plan year pursuant to
Section 5. An eligible employee or former employee on the effective date of the
plan who was a participant in a prior plan (as specified in Section 15)
immediately preceding such effective date shall automatically be a participant
in this plan as of such effective date. An eligible employee who was not such a
participant
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in a prior plan and has not otherwise entered the plan shall enter the plan and
become a participant in accordance with the provisions elected in the Adoption
Agreement. For purposes of determining eligibility to participate, the following
special provisions shall apply to the extent applicable:
1.25.1. In determining years of service and breaks in service
for purposes of eligibility, the initial 12 calendar month period (the
"eligibility computation period") shall commence on the date the
employee first completes an hour of service. Subsequent 12 calendar
month periods shall be plan years, beginning with the first plan year
which includes the anniversary of the date the employee first completes
an hour of service regardless of whether the employee is entitled to be
credited with 1,000 hours of service during the initial 12 calendar
month period. An employee who is credited with 1,000 hours of service
in both the initial 12 calendar month period and the first plan year
which commences prior to the end of the initial 12 calendar month
period shall be credited with 2 years of service for purposes of
eligibility. For the purpose of determining the date an employee first
completes an hour of service under this Section 1.25.1, the second
sentence of Section 1.25.3 shall apply (treating such employee as if he
were a former participant for this purpose).
1.25.2. If an employee who is not a participant shall have a
break in service, his years of service, if any, prior to such break
shall not be taken into account until he has completed a year of
service following such break in service. Such year of service shall be
measured by the 12 consecutive month period beginning on an employee's
reemployment commencement date and, if necessary, plan years beginning
with the plan year which includes the first anniversary of the
reemployment commencement date. For this purpose, the "reemployment
commencement date" is the first day on which the employee is credited
with an hour of service after the first eligibility computation period
in which the employee incurs a one-year break in service. If an
employee completes a year of service in accordance with this Section
1.25.2, he will reenter the plan as of his reemployment commencement
date if he has then satisfied the eligibility requirements for
participation.
1.25.3. A participant who shall have a break in service shall
reenter the plan immediately upon his return
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to service if such participant has a nonforfeitable right to all or a
portion of his accrued benefit at the time of such break. A former
participant who shall have a break in service and who did not have a
nonforfeitable right to any portion of his accrued benefit at the time
of such break shall be considered a new employee for eligibility
purposes if the number of consecutive one-year breaks in service equals
or exceeds the greater of (i) 5 consecutive one-year breaks in service,
or (ii) the aggregate number of years of service before such break;
otherwise, he shall reenter the plan immediately. Such former
participant's aggregate number of years of service shall not include
any years of service disregarded under the preceding sentence by reason
of prior breaks in service.
1.25.4. In the event a participant shall lose his status as an
eligible employee, but shall not incur a break in service, such
employee shall reenter the plan immediately upon his return to such
eligible class. If such employee incurs a break in service, his
eligibility to reenter the plan shall be determined pursuant to Section
1.25.3. In the event an employee who is not a member of the eligible
class of employees becomes a member of such eligible class, such
employee shall enter the plan immediately if he has satisfied the
minimum age and service requirements and would have previously entered
the plan had he been in the eligible class.
1.26. "Plan" shall mean the Wachovia Bank of Georgia, N.A.
Prototype Defined Contribution Retirement Plan and Trust as herein set out or as
duly amended. The name of the plan as applied to the Employer shall be as set
forth in the Adoption Agreement.
1.27. "Plan year" shall mean the 12 calendar month period
ending with the last day of the month specified by the Employer in the Adoption
Agreement.
1.28. "Retire" or "retirement" shall mean retirement within
the meaning of Section 4.1, 4.2, 4.3 or 4.4.
1.29. "Self-employed individual" shall mean an individual who
has earned income for the taxable year, or an individual who would have had
earned income but for the fact that the trade or business had no net profits for
the taxable year.
1.30. "Service" shall mean employment by the Employer as an
employee. In determining service, all employees
-14-
of an affiliated employer and individuals deemed to be employees for purposes of
the plan under Sections 414(n) or 414(o) of the Code and the regulations
thereunder shall be deemed to be in service of the Employer. For purposes of
this Section 1.30, the following special provisions shall apply:
1.30.1. Nothing in this Section 1.30 shall be construed as
including as a participant an individual who is in the service of an
affiliated employer which is not a party to the plan. See Section 1.16
for requirement that each affiliated employer must become a party to a
standardized form plan.
1.30.2. Unless otherwise elected by the Employer in the
Adoption Agreement, service with an employer prior to becoming an
affiliated employer shall be disregarded for all purposes of the plan.
1.30.3. In any case in which the Employer maintains the plan
of a predecessor employer, service with such predecessor employer shall
be treated as service with the Employer.
1.31. "Shareholder-employee" shall mean an individual owning
(or considered as owning within the meaning of Section 318(a)(1) of the Code)
more than 5% of the outstanding stock of the Employer if, with respect to any
taxable year of the Employer, the Employer is an S Corporation within the
meaning of Section 1361(a) of the Code.
1.32. "Sponsor" shall mean Wachovia Bank of Georgia, N.A.,
which has caused the plan to be established.
1.33. "Standardized form plan" shall mean a master or
prototype plan which satisfies the requirements of Section 3.08 of Revenue
Procedure 89-9. This plan is a standardized form plan if so designated in the
Adoption Agreement.
1.34. "Taxable wage base" shall mean the maximum amount of
earnings which may be considered wages under Section 3121(a)(1) of the Code.
1.35. "Trust" or "trust fund" shall mean the trust fund held
by the Trustee under the plan.
1.36. "Trustee" shall mean Wachovia Bank of Georgia, N.A., as
Trustee under the plan, or any bank or trust company
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into which Wachovia Bank of Georgia, N.A. may hereafter be merged or
consolidated.
1.37. A "year of service" shall mean 1,000 or more hours of
service during a period of 12 consecutive calendar months (a "computation
period"). Such period shall be the plan year (and the 12 calendar month period
which is substantially the same as the plan year for periods prior to the
effective date of the plan) unless otherwise specifically provided herein.
Notwithstanding the foregoing provisions of this Section 1.37, with respect to
service prior to the computation date (as defined in the next sentence), a year
of service shall mean uninterrupted service for a full plan year. Service prior
to the computation date shall be taken into account only with respect to
employees in service on such date, and with respect to each such employee only
to the extent of full plan years of uninterrupted service preceding such date
(or his normal retirement age, if earlier). For this purpose, the "computation
date" shall mean the later of (i) the first day of the plan year beginning in
1976, or (ii) the effective date of the plan (or, if the Employer was a party to
a prior plan within the meaning of Section 15, the effective date of the prior
plan).
Section 2. Contributions to the Trust and
--------- ------------------------------
Allocation Thereof:
------------------
2.1. Employer contributions: The Employer shall contribute to
the trust for the taxable year of the Employer that ends with or within the plan
year such amount as provided in the Adoption Agreement. In no event shall the
total contribution for any plan year exceed the maximum amount deductible for
federal income tax purposes by the Employer for the taxable year. Each
contribution to the plan shall be made conditional upon being deductible under
Section 404 of the Code and upon the plan being qualified under Section 401(a)
of the Code for the plan year for which such contribution is made.
2.2. Allocation of Employer contributions: The Committee shall
maintain a separate account, designated as the participant's "Employer
contribution account," with respect to that portion of the participant's accrued
benefit that is attributable to Employer contributions under the plan. Subject
to the provisions of Sections 22 and 23, as of each adjustment date the
contribution of the Employer for the plan year ending on such adjustment date
shall be allocated to the Employer contribution accounts of those participants
specified by the Em-
-16-
ployer in the Adoption Agreement in the manner specified in the Adoption
Agreement.
2.3. Voluntary nondeductible employee contributions: Effective
as of the first day of the plan year following adoption of the plan by the
Employer, a participant may only make voluntary nondeductible employee
contributions to a profit-sharing plan which contains a Cash or Deferred
Arrangement in accordance with the provisions of Section 3. Voluntary
nondeductible employee contributions made with respect to plan years beginning
on and after January 1, 1987 must comply with the average contribution
percentage test described in Section 401(m) of the Code. Any voluntary
nondeductible employee contribution made by a participant for any plan year, and
all amounts stemming therefrom, shall be allocated to the participant's employee
contribution account as provided in Section 3.3.3. Voluntary nondeductible
employee contributions and earnings thereon will be nonforfeitable at all times.
2.4. Voluntary deductible employee contributions: A
participant may not make voluntary deductible employee contributions to the plan
with respect to his taxable years beginning after December 31, 1986. The
Committee shall maintain a separate account, designated as the participant's
"deductible contribution account," with respect to each participant having made
such voluntary deductible employee contributions under the plan prior to January
1, 1987. The deductible contribution account of each participant shall be fully
vested and shall be adjusted as of each adjustment date in accordance with the
provisions of Section 6. In no event shall any forfeiture under the plan be
allocated to the participant's deductible contribution account. Assets in the
participant's deductible contribution account may be commingled for investment
with other funds of the trust.
2.5. Mandatory employee contributions: A participant shall not
be required to make contributions to the trust for any plan year beginning on or
after the effective date of the plan. The Committee shall maintain a separate
account, designated as the participant's "mandatory contribution account," with
respect to each participant having made mandatory contributions under a prior
plan. The mandatory contribution account of each participant shall be fully
vested and shall be subject to adjustment as of each adjustment date in
accordance with the provisions of Section 6. In no event shall any forfeiture
under the plan be allocated to the participant's mandatory contribution account.
Assets in the participant's mandatory
-17-
contribution account may be commingled for investment with other funds of the
trust.
Section 3. Cash or Deferred Arrangement:
--------- ----------------------------
3.1. General: If elected by the Employer in the Adoption
Agreement, it is the intention of the Employer to incorporate a Cash or Deferred
Arrangement (a "CODA"), which satisfies the requirements of Section 401(k) of
the Code, as part of its profit-sharing plan. Notwithstanding any other
provisions of the plan, Employer contributions may be made under this Section 3
without regard to the current or accumulated net profit of the Employer.
3.2. Elective deferrals:
3.2.1. Salary reduction agreement: To the extent provided in
the Adoption Agreement, a participant may elect to make elective
deferrals under this plan. Elective deferrals shall include both
single-sum and continuing contributions made pursuant to a salary
reduction agreement. A participant shall be afforded a reasonable
period at least once each calendar year, as specified in the Adoption
Agreement, to elect to commence elective deferrals. Such election shall
not become effective before the time specified in the Adoption
Agreement. A participant's election to commence elective deferrals
shall remain in effect until modified or terminated. A participant
shall be afforded a reasonable period at least once each calendar year,
as specified in the Adoption Agreement, to modify the amount or
frequency of his elective deferrals. A participant may terminate his
election to make elective deferrals at any time.
3.2.2. Maximum amount of elective deferrals: A participant's
elective deferrals are subject to any limitations imposed in the
Adoption Agreement and any further limitations under the plan. No
participant shall be permitted to have elective deferrals made under
this plan during any taxable year of the participant in excess of the
dollar limitation contained in Section 402(g) of the Code in effect at
the beginning of such taxable year.
3.2.3. Distribution of excess elective deferrals:
Notwithstanding any other provisions of the plan, excess elective
deferrals, plus any income and minus any loss allocable thereto, shall
be distributed no later than each
-18-
April 15 to participants to whose accounts excess elective deferrals
were allocated for the preceding taxable year and who claim excess
elective deferrals for such taxable year. Excess elective deferrals
shall be treated as annual additions under the plan. The participant's
claim under this Section 3.2.3 shall be in writing; shall be submitted
to the plan administrator not later than March 1; shall specify the
amount of the participant's excess elective deferral for the preceding
taxable year; and shall be accompanied by the participant's written
statement that if such amounts are not distributed, such excess
elective deferrals, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k), or 403(b) of the
Code, will exceed the limit imposed on the participant by Section
402(g) of the Code for the taxable year in which the deferral occurred.
The excess elective deferral shall be adjusted for income or loss up to
the date of distribution. The income or loss allocable to excess
elective deferrals is the sum of (i) income or loss allocable to the
participant's elective deferral account for the taxable year multiplied
by a fraction, the numerator of which is such participant's excess
elective deferrals for the year and the denominator of which is the
participant's accrued benefit attributable to elective deferrals
without regard to any income or loss occurring during such taxable
year; and (ii) 10% of the amount determined under (i) multiplied by the
number of whole calendar months between the end of the participant's
taxable year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
3.2.4. Actual deferral percentage: The ADP for highly
compensated participants for each plan year and the ADP for non-highly
compensated participants for the same plan year must satisfy one of the
following tests:
(i) The ADP for highly compensated participants for
the plan year shall not exceed the ADP for non-highly
compensated participants for the plan year multiplied by 1.25;
or
(ii) The ADP for highly compensated participants for
the plan year shall not exceed the ADP for non-highly
compensated participants for the plan year multiplied by 2;
provided, that the ADP for highly compensated participants
does not exceed the ADP for
-19-
non-highly compensated participants by more than 2
percentage points.
3.2.5. Special rules:
(a) The ADP for any highly compensated participant
for the plan year and who is eligible to have elective
deferrals (and qualified non-elective contributions or
qualified matching contributions, or both, if treated as
elective deferrals for purposes of the ADP test) allocated to
his account under 2 or more arrangements described in Section
401(k) of the Code that are maintained by the Employer shall
be determined as if Such elective deferrals (and if
applicable, qualified matching contributions or qualified
non-elective contributions or both) were made under a single
arrangement. If a highly compensated employee participates in
2 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.
(b) 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
the ADP test shall be applied by determining the actual
deferral percentages 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.
(c) For purposes of determining the actual deferral
percentage of a participant who is a 5% owner or one the 10
most highly compensated employees, the elective deferrals
(qualified non-elective contributions or qualified matching
contributions, or both, if treated as elective deferrals for
purposes of the ADP test) and compensation of such participant
shall include the elective deferrals (qualified non-elective
contributions, or qualified matching contributions, or both)
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
-20-
compensated employees shall be disregarded as separate
employees in determining the ADP both for non-highly
compensated participants and for highly compensated
participants.
(d) For purposes of determining the ADP test,
elective deferrals, qualified non-elective contributions and
qualified matching contributions must be made before the last
day of the 12 month period immediately following the plan year
to which contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
qualified non-elective contributions or qualified matching
contributions, or both, used in such test.
(f) The determination and treatment of the ADP of any
participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
3.2.6. Distribution of excess contributions:
(a) Notwithstanding any other provisions of
the plan, except Section 3.2.7(b) herein, 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 10% excise tax will be imposed on
the Employer 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 shall be allocated to
participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code in
the manner prescribed by the regulations. Excess
contributions (including the amounts recharacterized)
shall be treated as annual additions under the plan.
-21-
(b) Determination of income or loss: Excess
contributions shall be adjusted for income or loss up
to the date of distribution. The income or loss
allocable to excess contributions is the sum of: (i)
income or loss allocable to the participant's
elective deferral account (and, if applicable, the
qualified non-elective contribution account or the
qualified matching contributions account or both) for
the plan year multiplied by a fraction, the numerator
of which is such participant's excess contributions
for the year and the denominator of which is the
participant's accrued benefit attributable to
elective deferrals (and qualified non-elective
contributions or qualified matching contributions, or
both, if any of such contributions are included in
the ADP test) without regard to any income or loss
occurring during such plan year; and (ii) 10% of the
amount determined under (i) multiplied by the number
of whole calendar months between the end of the plan
year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th
of such month.
(c) Accounting for excess contributions:
Amounts distributed under this Section 3.2.6 shall
first be treated as distributions from the
participant's elective deferral account and qualified
matching contribution account (if applicable) in
proportion to the participant's elective deferrals
and qualified matching contributions (to the extent
used in the ADP test) for the plan year. Excess
contributions shall be distributed from the
participant's qualified non-elective contribution
account only to the extent that such excess
contributions exceed the balance in the participant's
elective deferral account and qualified matching
contribution account.
(d) Recharacterization: A participant may
treat his excess contributions (without adjustment
for income or loss allocable thereto) as an amount
distributed to the participant and then contributed
by the participant to the plan. Recharacterized
amounts will remain nonforfeitable and subject to the
same distribution require-
-22-
ments as elective deferrals. Amounts may not be
recharacterized by a highly compensated employee to
the extent that such amounts in combination with
other employee contributions made by that employee
would exceed any stated limit under the plan on
employee contributions. Recharacterization must occur
no later than 2 1/2 months after the last day of the
plan year in which such excess contributions arose
and is deemed to occur no earlier than the date the
last highly compensated employee is informed in
writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be
taxable to the participant for the participant's
taxable year in which the participant would have
received them in cash.
3.2.7. Qualified non-elective contributions:
(a) The Employer may elect to make qualified
non-elective contributions under the plan on behalf
of employees as provided in the Adoption Agreement.
(b) In lieu of distributing excess
contributions as provided in Section 3.2.6 above, and
to the extent provided in the Adoption Agreement, the
Employer may make special qualified non-elective
contributions on behalf of non-highly compensated
employees that are sufficient to satisfy either the
ADP test or the ACP test, or both, pursuant to
regulations under the Code. Allocations of qualified
non-elective contributions to each non-highly
compensated employee's account shall be made in
accordance with the Adoption Agreement.
3.2.8. Separate accounts: The Committee shall maintain a
separate account, designated as the participant's "elective deferral
account," with respect to that portion of the participant's accrued
benefit that is attributable to elective deferrals. The Committee shall
maintain a separate account, designated as the participant's "qualified
non-elective contribution account," with respect to that portion of the
participant's accrued benefit that is attributable to qualified
nonelective contributions. Each separate account shall be credited with
the applicable contributions, earnings and losses, distribu-
-23-
tions, and other applicable adjustments in the manner provided in
Section 6.
3.2.9. Allocation of contributions: The Employer shall
contribute and allocate to each participant's elective deferral account
an amount equal to the amount of the participant's elective deferrals.
Under no circumstances may elective deferrals and qualified
non-elective contributions be contributed and allocated to the trust
under the plan later than 30 days after the close of the plan year for
which the contributions are deemed to be made, or such other time as
provided in applicable regulations under the Code.
3.3. Employee contributions:
3.3.1. If the Employer so specifies in the Adoption Agreement,
each participant may at his option make employee contributions to the
plan.
3.3.2. All employee contributions by a participant shall be
made in the form of cash prior to the close of business of the plan for
the year with respect to which such contributions are made, and shall
be credited to the participant's employee contribution account. The
Employer may, at its election and expense, permit participants to make
employee contributions by payroll deduction, subject to such
limitations and requirements as shall be determined by the Employer.
The Employer shall deliver such contributions to the Trustee as soon as
practicable following each payroll date, along with a designation of
the participants to whose employee contribution accounts the
contributions are to be credited and such other information as the
Trustee shall reasonably require.
3.3.3. The Committee shall cause a separate account,
designated as the participant's "employee contribution account," to be
kept with respect to each participant making such employee
contributions under the plan. The employee contribution account of each
participant shall be fully vested and shall be subject to adjustment as
of each adjustment date in accordance with the provisions of Section 6.
In no event shall any forfeiture under the plan be allocated to the
participant's nondeductible contribution account. Assets in the
participant's employee contribution account may be commingled for
investment with other funds of the trust; provided, that employee
contributions
-24-
shall not be invested in the securities of the Employer or any
affiliate of the Employer.
3.3.4. A participant may at his option make one or more
withdrawals from his employee contribution account. Application for
withdrawal shall be made by the participant in writing on a form
approved by the Committee and filed with the Committee, and not more
than one application may be filed during any plan year. If the
requirements of Section 4.7 apply with respect to the plan, such
application must constitute a qualified election as defined in Section
4.7.3(d) of the plan.
3.4. Matching contributions:
3.4.1. Matching contributions: If elected by the Employer in
the Adoption Agreement, the Employer shall make matching contributions
to the plan. The amount of such matching contributions shall be
calculated by reference to the participant's elective deferrals as
specified by the Employer in the Adoption Agreement.
3.4.2. Qualified matching contributions: If elected by the
Employer in the Adoption Agreement, the Employer will make qualified
matching contributions to the plan. The amount of such qualified
matching contributions shall be calculated by reference to the
participant's elective deferrals as specified in the Adoption
Agreement.
3.4.3. Separate accounts: The Committee shall maintain a
separate account, designated as the participant's "matching
contribution account," to be kept with respect to that portion of a
participant's accrued benefit that is attributable to matching
contributions. If all matching contributions made by the Employer do
not satisfy the requirements of qualified matching contributions, then
the Committee shall maintain a separate account, designated as the
participant's "qualified matching contribution account," to be kept
with respect to that portion of the participant's accrued benefit that
is attributable to qualified matching contributions. Such separate
accounts shall be credited with the applicable contributions, earnings
and losses, distributions, and other adjustments in the manner provided
in Section 6.
3.4.4. Vesting: Matching contributions will be vested in
accordance with the Employer's election in the Adoption Agreement. In
any event, matching contributions
-25-
shall be fully vested upon the occurrence of an event described in
Section 5.1.
3.4.5. Forfeitures: Forfeitures of matching contributions
other than excess aggregate contributions shall be made in accordance
with the forfeiture provisions elected by the Employer in the Adoption
Agreement.
3.5. Limitations on matching contributions and employee
contributions:
3.5.1. Average contribution percentage: The ACP for highly
compensated participants for each plan year and the ACP for non-highly
compensated participants for the same plan year must satisfy one of the
following tests:
(i) The ACP for highly compensated participants for
the plan year shall not exceed the ACP for non-highly
compensated participants for the plan year multiplied by 1.25;
or
(ii) The ACP for highly compensated participants for
the plan year shall not exceed the ACP for non-highly
compensated participants for the plan year multiplied by 2;
provided, that the ACP for highly compensated participants
does not exceed the ACP for non-highly compensated
participants by more than 2 percentage points.
3.5.2. Special rules:
(a) If one or more highly compensated employees
participate in both a 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 the 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 both the ADP and ACP of the highly
compensated employees does not exceed 1.25 multiplied
-26-
by the ADP and ACP of the non-highly compensated employees.
(b) For purposes of this Section 3.5, the
contribution percentage for any participant who is a highly
compensated employee and who is eligible to have contribution
percentage amounts allocated to his account under 2 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 2 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 the same arrangement.
(c) 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
the ACP test shall be applied by determining the contribution
percentages of participants 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.
(d) For purposes of determining the contribution
percentage of a participant who is a 5% owner or one of the 10
most 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 non-highly
compensated participants and for highly compensated
participants.
(e) For purposes of the ACP test, employee
contributions are considered to have been made in the plan
year in which contributed to the trust. Matching contributions
and qualified non-elective contri-
-27-
butions will be considered made for a plan year if made no
later than the end of the 12 month period beginning on the day
after the close of the plan year.
(f) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
qualified non-elective contributions or qualified matching
contributions, or both, used in such test.
(g) The determination and treatment of the
contribution percentage of any participant shall satisfy such
other requirements as may be prescribed by the Secretary of
the Treasury.
3.5.3. Distribution of excess aggregate contributions:
(a) General rule: Notwithstanding any other provision
of this 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
shall be allocated to participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the
Code in the manner prescribed by the regulations. 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 10% 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.
(b) Determination of income or loss: Excess aggregate
contributions shall be adjusted for income or loss up to the
date of distribution. The income or loss allocable to excess
aggregate contributions is the sum of: (i) 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 and elective
deferral account for the plan year multiplied by a fraction,
the numerator of which is such
-28-
participant's excess aggregate contributions for the year and
the denominator of which is the participant's accrued benefit
attributable to contribution percentage amounts without regard
to any income or loss occurring during such plan year; and
(ii) 10% of the amount determined under (i) multiplied by the
number of whole calendar months between the end of the plan
year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such
month.
(c) Treatment of forfeitures: Forfeitures of excess
aggregate contributions may either be used to reduce Employer
contributions or may be reallocated to the accounts of
non-highly compensated participants, as elected by the
Employer in the Adoption Agreement. Amounts forfeited by
highly compensated participants under this Section 3.5 shall
be treated as annual additions under the plan. The allocation
of such forfeitures shall be made pursuant to the Adoption
Agreement. However, no forfeitures arising under this Section
3.5 shall be allocated to the account of any highly
compensated participant.
(d) Accounting for excess aggregate contributions:
Excess aggregate contributions shall be forfeited if
forfeitable, or distributed on a pro-rata basis from the
participant's employee contribution account, matching
contribution account, and qualified matching contribution
account (and, if applicable, the participant's qualified
non-elective contribution account or elective deferral
account, or both).
(e) Order of determination: The determination of the
excess aggregate contributions shall be made after first
determining the excess elective deferrals, and then
determining the excess contributions.
3.6. Special distribution rules:
3.6.1. Limitations on distribution: Except as provided in the
Adoption Agreement, elective deferrals, qualified non-elective
contributions, qualified matching contributions, and income allocable
thereto are not distributable to the participant, or the participant's
beneficiary, earlier than upon separation from service, death, or
disability of the participant.
-29-
3.6.2. Hardship: If elected by the Employer in the Adoption
Agreement, distributions of elective deferrals (and earnings thereon
accrued as of December 31, 1988) may be made to the participant on
account of financial hardship. For purposes of this Section 3.6.2,
hardship is defined as an immediate and heavy financial need of the
participant where the participant lacks other available resources.
Hardship distributions are subject to the spousal consent requirements
of Sections 401(a)(11) and 417 of the Code.
3.6.3. Special rules:
(a) The following are the only financial needs
considered immediate and heavy: deductible medical expenses
(within the meaning of Section 213(d) of the Code) of the
participant, the participant's spouse, children, or
dependents; the purchase (excluding mortgage payments) of a
principal residence for the participant; payment of tuition
for the next quarter or semester of post-secondary education
for the participant, the participant's spouse, children or
dependents; or the need to prevent the eviction of the
participant from, or a foreclosure on the mortgage of, the
participant's principal residence.
(b) A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of the
participant only if:
(i) The participant has obtained all
distributions, other than hardship distributions, and
all nontaxable loans under all plans maintained by
the Employer;
(ii) All plans maintained by the Employer
provide that the participant's elective deferrals
(and employee contributions) will be suspended for 12
months after the receipt of the hardship
distribution;
(iii) The distribution is not in excess of
the amount of an immediate and heavy financial need;
and
(iv) All plans maintained by the Employer
provide that the participant may not make elective
deferrals for the participant's taxable
-30-
year immediately following the taxable year of the
hardship distribution in excess of the applicable
limit under Section 402(g) of the Code for such
taxable year less the amount of such participant's
elective deferrals for the taxable year of the
hardship distribution.
3.7. Top-heavy requirements: Neither elective deferrals nor
matching contributions made by the Employer under this Section 3 shall be taken
into account for purposes of the minimum allocation required under Section
21.2.1 in the event this plan is top-heavy and another plan of the Employer is
not designated to satisfy the top-heavy requirements of Section 416 of the Code.
3.8. Definitions: The following definitions shall apply for
purposes of this Section 3:
3.8.1. "Actual deferral percentage" or "ADP" 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
(i) the amount of Employer contributions actually paid over to the
trust on behalf of such participant for the plan year to (ii) the
participant's compensation for such plan year (whether or not the
employee was a participant for the entire plan year). Employer
contributions on behalf of any participant shall include: (a) any
elective deferrals made pursuant to the participant's deferral
election, including excess elective deferrals, but excluding elective
deferrals that are taken into account in the contribution percentage
test (provided the ADP test is satisfied both with and without
exclusion of these elective deferrals); and (b) at the election of the
Employer, qualified non-elective contributions and qualified matching
contributions. For purposes of computing actual deferral percentages,
an employee who would be a participant but for the failure to make
elective deferrals shall be treated as a participant on whose behalf no
elective deferrals are made.
3.8.2. "Aggregate limit" shall mean the sum of (i) 125% of the
greater of the ADP of the non-highly compensated participants for the
plan year or the ACP of the non-highly compensated participants for the
plan year, and (ii) the lesser of 200% or 2 plus the lesser of such ADP
or ACP.
-31-
3.8.3. "Average contribution percentage" or "ACP" shall mean
the average of the contribution percentages of the eligible
participants in a group.
3.8.4. "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
(whether or not the employee was a participant for the entire plan
year).
3.8.5. "Contribution percentage amounts" shall mean the sum of
the employee contributions, matching contributions, and qualified
matching contributions (to the extent not taken into account for
purposes of the ADP test) made under the plan on behalf of the
participant for the plan year. Such contribution percentage amounts
shall include forfeitures of excess aggregate contributions or matching
contributions allocated to the participant's account which shall be
taken into account in the year in which such forfeitures are allocated.
If so elected in the Adoption Agreement, the Employer may include
qualified non-elective contributions in the contribution percentage
amounts. The Employer also may elect to use elective deferrals in the
contribution percentage amounts so long as the ADP test is met before
the elective deferrals are used in the ACP test and continues to be met
following the exclusion of those elective deferrals that are used to
meet the ACP test.
3.8.6. "Elective deferrals" shall mean contributions made to
the plan during the plan year by the Employer, at the election of the
participant, in lieu of cash compensation and shall include
contributions that are made pursuant to a salary reduction agreement or
other deferral mechanism. Such contributions must be nonforfeitable
when made and distributable only as specified in Section 3.6. With
respect to any taxable year, a participant's elective deferral is 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), any eligible
deferred compensation plan under Section 457, any plan as described
under Section 501(c)(18), and any employer contributions made on the
behalf of a participant for the purchase of an annuity contract under
Section 403(b) pursuant to a salary reduction agreement.
-32-
3.8.7. "Eligible participant" shall mean any employee who is
eligible to make an employee contribution, or an elective deferral (if
the Employer takes such contributions into account in the calculation
of the contribution percentage), or to receive a matching contribution
(including forfeitures) or a qualified matching contribution. If an
employee contribution is required as a condition of participation in
the plan, any employee who would be a participant in the plan if such
employee made such a contribution shall be treated as an eligible
participant on behalf of whom no employee contributions are made.
3.8.8. "Employee contribution" shall mean any 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 under a separate account to which earnings and losses are
allocated.
3.8.9. "Excess aggregate contributions" shall mean, with
respect to any plan year, the excess of: (i) the aggregate contribution
percentage amounts taken into account in computing the numerator of the
contribution percentage actually made on behalf of highly compensated
employees for such plan year, over (ii) the maximum contribution
percentage amounts permitted by the ACP test (determined by reducing
contributions made on behalf of highly compensated employees in order
of their contribution percentages, beginning with the highest of such
percentages).
3.8.10. "Excess contributions" shall mean, with respect to any
plan year, the excess of the aggregate amount of the Employer
contributions actually taken into account in computing the ADP of
highly compensated employees for such plan year, over the maximum
amount of such contributions permitted under 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).
3.8.11. "Excess elective deferrals" shall mean those elective
deferrals that are includible in a participant's gross income under
Section 402(g) of the Code to the extent such elective deferrals exceed
the dollar limitation under Section 402(g).
3.8.12. "Matching contribution" shall mean an Employer
contribution made to this or any other defined con-
-33-
tribution plan maintained by the Employer on behalf of a participant on
account of an employee contribution made by such participant, or on
account of a participant's elective deferral.
3.8.13. "Qualified non-elective contributions" shall mean
contributions (other than matching contributions or qualified matching
contributions) made by the Employer and allocated to a participant's
account that the participant may not elect to receive in cash until
distributed from the plan; that are nonforfeitable when made; and that
are distributable only as specified in Section 3.6.1.
3.8.14. "Qualified matching contributions" shall mean any
contributions to the plan made by the Employer for the plan year and
allocated to a participant's account by reason of elective deferrals;
that are nonforfeitable when made; and that are distributable only as
specified in Section 3.6.1.
Section 4. Retirement; Termination of Service; Death:
--------- -----------------------------------------
4.1. Normal retirement: A participant who is in service may
retire from service at his normal retirement date.
4.2. Delayed retirement: If a participant shall remain in
service following his normal retirement date, his retirement date shall be the
date he shall actually retire. During the period that such participant remains
in service pursuant to this Section 4.2, he shall continue to participate for
and including each plan year in which he meets the requirements therefor. If an
employee not otherwise a participant becomes eligible to enter the plan
following his normal retirement date, the provisions of this Section 4.2 shall
apply in determining his retirement date.
4.3. Disability: If a participant suffers disability while in
service, he shall retire as of the date of establishment of his disability and
his benefit shall be payable as provided in Section 4.6 or 4.7.
4.4. Early retirement: If so specified by the Employer in the
Adoption Agreement, and subject to the requirements for early retirement set
forth therein, a participant may elect early retirement effective as of any
adjustment date prior to his normal retirement date by filing written notice
-34-
with the Committee on or before such adjustment date. Such election shall be
irrevocable when filed.
4.5. Termination of service: The following provisions shall
apply in the event a participant terminates service before he is eligible to
retire under the plan:
4.5.1. Such participant may elect to receive a distribution of
his vested accrued benefit as of the termination adjustment date
specified in the Adoption Agreement, or to defer such distribution
until a later date provided in this Section 4.5. The plan administrator
shall notify the participant of his rights under this Section 4.5.1 as
soon as practicable following receipt by the plan administrator of
notice that the participant has terminated service, but in no event
more than 90 days prior to the termination adjustment date. Such
notification shall include a general description of the material
features and an explanation of the relative values of the optional
forms of benefit available under the plan in a manner that satisfies
the notice requirements of Section 417(a)(3) of the Code. The
participant's election shall be submitted in writing to the Committee
within the 90 day period ending on the termination adjustment date, or,
if later, on or before the 30th day after the participant receives
notice of his rights under this Section 4.5.1. Such election shall be
irrevocable when filed, except that the election shall be disregarded
if the participant is in service when benefit payments are to commence.
If the participant elects to receive a distribution of his vested
accrued benefit as of the termination adjustment date, the manner of
distribution shall be determined under Sections 4.6 and 4.7 as if the
termination adjustment date were the normal retirement date of the
participant. If the requirements of Section 4.7 apply to the plan and
the participant elects for his vested accrued benefit to be paid as of
the termination adjustment date in a manner other than a qualified
joint and survivor annuity, the election of the participant pursuant to
this Section 4.5.1 must satisfy the requirements of a qualified
election as described in Section 4.7.3(d).
4.5.2. If the participant has not received his vested accrued
benefit pursuant to Section 4.5.1, he may elect to receive his vested
accrued benefit as of the adjustment date coincident with or next
following the date on which he satisfies the age requirement for early
retirement (the "early retirement adjustment date"). This
-35-
Section 4.5.2 shall only apply if the plan permits early retirement and
the participant had satisfied any service requirement but not the age
requirement therefor at the time of his termination from service. The
plan administrator shall notify such participant of his rights under
this Section 4.5.2, and the participant shall make the election
provided in this Section 4.5.2, at the time and in the manner described
in Section 4.5.1, treating for this purpose the early retirement
adjustment date as if it were the termination adjustment date.
4.5.3. If the vested accrued benefit of the participant is not
distributed pursuant to Section 4.5.1 or 4.5.2, it shall be held under
the plan for future payment until the first to occur of: (i) his death,
or (ii) the later of his normal retirement age or age 62, whereupon it
shall be payable to him or his beneficiary, as the case may be, in the
same manner as if he were then in service. If elected by the Employer
in the Adoption Agreement, the amount of the vested accrued benefit
which shall be held for the participant under this Section 4.5.3 shall
be set aside in a special account (the "deferred payment account"). The
Trustee shall segregate the deferred payment account from the general
assets of the trust as of the adjustment date coincident with or next
following the participant's termination from service. The deferred
payment account shall be invested by the Trustee in short-term
interest-bearing securities or certificates which may be readily
converted to cash without penalty, and which provides for maximum
safety of principal. The deferred payment account shall be subject to
adjustment as of each adjustment date in the manner specified in the
applicable provisions of Section 6, treating for this purpose the
assets in which the deferred payment account are invested as if they
composed the entire trust fund.
4.6. Distribution requirements: Subject to the requirements of
Section 4.7, the requirements of this Section 4.6 shall apply to any
distribution of a participant's accrued benefit and shall take precedence over
any inconsistent provisions of the plan, as follows:
4.6.1. Payment of retirement benefits: As of the close of
business of the plan on the adjustment date coincident with or next
following the date an active participant retires, or as of such later
adjustment date as shall be elected by the participant pursuant to
paragraph (b) of this Section 4.6.1, his vested accrued benefit, as
ad-
-36-
justed as of such adjustment date, shall be paid to him or applied
for his benefit under one of the following options, as elected by the
participant:
(i) Life annuity: Application of the vested accrued
benefit to the purchase of an immediate noncashable and
nontransferable annuity from a legal reserve life insurance
company providing approximately equal monthly installments for
as long as he lives; provided, that this paragraph (i) shall
only apply to a plan which is subject to the requirements of
Section 4.7.
(ii) Term certain: Subject to the provisions of
Section 4.10, payment of the vested accrued benefit to him in
approximately equal monthly installments over a whole number
of years not exceeding the life expectancy of the participant
or the joint life expectancy of the participant and his
designated beneficiary.
(iii) Lump sum: Payment of the vested accrued benefit
to him in a lump sum.
Such election shall be made in writing and filed with the Committee on
or before the adjustment date as of which payment is to commence, and
shall be irrevocable on or after such adjustment date (except as
otherwise provided in paragraph (e) of this Section 4.6.1). In applying
the foregoing provisions of this Section 4.6.1, the following special
provisions shall apply:
(a) If a participant shall fail to elect one of the
foregoing options, his vested accrued benefit shall be paid to
him under Section 4.6.1(iii).
(b) Unless a participant shall file an election
pursuant to this paragraph to defer the commencement of
payment of his vested accrued benefit, such payment must
commence within 60 days following the latest of the year-end
adjustment date for the plan year in which: (i) the
participant attains age 65 (or normal retirement age, if
earlier); (ii) occurs the tenth anniversary of the year in
which the participant commenced participation in the plan; or
(iii) the participant retires or otherwise terminates service.
In the event that, within the applicable 60 day period, the
amount of the payment to commence cannot
-37-
be determined or the recipient thereof cannot be located after
a reasonable effort has been made to locate him, payments
retroactive to the close of such 60 day period shall be made
within 60 days after the amount has been determined or the
recipient has been located, whichever shall be applicable.
Subject to the provisions of paragraph (c) of this Section
4.6.1, prior to the adjustment date as of which payment of the
benefit of a participant is to commence, such participant may
elect to defer commencement thereof to a subsequent adjustment
date, including an adjustment date following the latest of
(i), (ii) or (iii) above. Such election shall be filed in
writing with the Committee prior to the adjustment date as of
which his benefit would otherwise commence. Such election may
be revoked or changed as of any adjustment date between the
date filed and the adjustment date to which the benefit is
deferred by filing a written revocation or change with the
Committee prior to the adjustment date as of which the
revocation or change is to be effective. Notwithstanding the
foregoing, the failure of a participant to elect to receive a
distribution under Sections 4.5.1 or 4.5.2 (or, if required,
the failure of his spouse to consent to such election) shall
be deemed to be an election to defer commencement of payment
sufficient to satisfy the requirements of this paragraph (b).
(c) The vested accrued benefit of a participant must
be distributed or begin to be distributed no later than his
required beginning date.
(d) If a participant's vested accrued benefit is to
be distributed pursuant to Section 4.6.1(ii), the distribution
must satisfy the following requirements:
(i) The amount required to be distributed
for each calendar year, beginning with the first
distribution calendar year, must at least equal the
quotient obtained by dividing the participant's
benefit by the applicable life expectancy.
(ii) For calendar years beginning before
January 1, 1989, if the participant's spouse is not
the designated beneficiary, the term certain selected
must assure that at least 50% of the
-38-
present value of the amount available for
distribution is paid within the life expectancy of
the participant.
(iii) For calendar years beginning after
December 31, 1988, the amount to be distributed each
year, beginning with the distribution for the first
distribution calendar year shall not be less than the
quotient obtained by dividing the participant's
benefit by the lesser of the applicable life
expectancy or, if the participant's spouse is not the
designated beneficiary, the applicable divisor
determined from the table set forth in Q&A 4 of
Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the participant
shall be distributed using the applicable life
expectancy determined for purposes of (i) above as
the relevant divisor without regard to Section
1.401(a)(9)-2.
(iv) The minimum distribution required for
the participant's first distribution calendar year
must be made on or before the participant's required
beginning date. The minimum distributions for other
calendar years, including the minimum distributions
for the distribution calendar year in which the
participant's required beginning date occurs, must be
made on or before December 31 of that distribution
calendar year.
(e) Upon a written direction to the Committee prior
to any adjustment date by a participant who is receiving
benefit payments pursuant to Section 4.6.1(ii),the participant
may direct that an alternative method of payment of the
balance of the participant's vested accrued benefit be made,
commencing with the first payment following such adjustment
date. Such alternative method of payment shall be determined
in accordance with the provisions of paragraphs (i), (ii), or
(iii) of Section 4.6.1 as of the adjustment date (the
"alternative adjustment date") as of which such alternative
method becomes effective. If a participant marries or
remarries following the adjustment date as of which payments
commenced under Section 4.6.1(ii), his "spouse" for purposes
of Section 4.6.1(ii) shall mean the spouse on such alternative
adjustment date.
-39-
(f) Subject to the provisions of Sections 4.6.1(i)
and 4.7, distributions from the plan shall be made in cash
unless the participant (or his beneficiary) shall request that
distributions from his individually directed investment
account (described in Section 23) be made in kind, or partly
in cash and partly in kind. Any annuity contract purchased and
distributed from the plan shall comply with the requirements
of the plan and Section 401(a)(9) of the Code and the
regulations thereunder.
(g) Notwithstanding the foregoing provisions of this
Section 4.6.1, if a participant who is receiving benefit
payments pursuant to Section 4.6.1(ii) shall reenter service
prior to his normal retirement date, such payments shall cease
during the period that he is in service. When he subsequently
retires, dies or otherwise terminates service, his then vested
accrued benefit shall be payable to or with respect to him
pursuant to the applicable provisions of the plan.
4.6.2. Payment of death benefits: Upon the death of the
participant, the following provisions shall apply:
(a) If the participant dies after distribution of his
vested accrued benefit has begun, the remaining portion of
such benefit shall continue to be distributed to his
designated beneficiary at least as rapidly as under the method
of distribution in effect at his death. Should the beneficiary
die before receiving all the payments due him, any remaining
payment shall continue to the recipient determined in
accordance with Section 11.
(b) If the participant dies before distribution of
his vested accrued benefit begins, the participant's vested
accrued benefit must be distributed no later than December 31
of the calendar year containing the fifth anniversary of the
participant's death except to the extent that an election is
made to receive distributions under (i) or (ii), as follows:
(i) If any portion of the participant's
vested accrued benefit is payable to a designated
beneficiary, distributions may be made in
substantially equal installments over the life or
over a term certain not greater than the life
expectancy of the designated beneficiary com-
-40-
mencing on or before December 31 of the calendar year
immediately following the calendar year in which the
participant died.
(ii) If the designated beneficiary is the
participant's surviving spouse, the date
distributions are required to begin in accordance
with (i) above shall not be before the later of
December 31 of the calendar year immediately
following the calendar year in which the participant
died, or December 31 of the calendar year in which
the participant would have attained age 70 1/2.
If the surviving spouse dies before payments begin, subsequent
distributions shall be made pursuant to this paragraph (b)
(except for subparagraph (ii) hereof) as if the spouse had
been the participant.
(c) The vested accrued benefit of the participant
shall be payable in the manner provided in paragraphs (i),
(ii) or (iii) of Section 4.6.1 (treating the beneficiary for
this purpose as the participant), as elected by the
participant before his death in writing to the Committee or,
if the participant shall not have made such election, as
elected by the beneficiary in writing to the Committee no
later than the first to occur of (i) December 31 of the
calendar year in which distributions are required to commence
under paragraph (b) above, or (ii) December 31 of the calendar
year which contains the fifth anniversary of the participant's
death. If the participant has no designated beneficiary or if
the designated beneficiary fails to elect a method of
distribution, distribution of the participant's vested accrued
benefit must be completed by December 31 of the calendar year
containing the fifth anniversary of the participant's death.
(d) For purposes of this Section 4.6.2, any amount
paid to a child of the participant shall 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.
(e) Upon a written direction to the Committee prior
to any adjustment date by a designated beneficiary who is
receiving benefit payments pursuant to
-41-
Section 4.6.1(ii), the designated beneficiary may direct that
an alternative method of payment of the balance of the
participant's vested accrued benefit be made, commencing with
the first payment following such adjustment date; provided,
that distribution of such balance under any alternative method
of payment must be completed at least as rapidly as under the
method of payment in effect prior to such adjustment date.
(f) For purposes of this Section 4.6.2, distribution
of a participant's vested accrued benefit is considered to
begin on the participant's required beginning date (or if the
last sentence of paragraph (b) above is applicable, the date
distribution is required to begin to the surviving spouse
pursuant to paragraph (b) above). If distribution in the form
of a life annuity as described in Section 4.6.1(i) irrevocably
commences to the participant before the required beginning
date, the date distribution is considered to begin is the date
distribution actually commenced.
4.6.3. Transitional rule: Notwithstanding any other
requirements of this Section 4.6, but subject to Section 4.7,
distribution on behalf of any participant, including a 5% owner in a
top-heavy plan, may be made in accordance with the following
requirements (regardless of when such distribution commences):
(a) The distribution by the trust is one which would
not have disqualified such trust under Section 401(a)(9) of
the Code as in effect prior to amendment by the Deficit
Reduction Act of 1984 ("DEFRA").
(b) The distribution is in accordance with a method
of distribution designated by the participant whose interest
in the trust is being distributed or, if the participant is
deceased, by a beneficiary of such participant.
(c) Such designation was in writing, was signed by
the participant or the beneficiary, and was made before
January 1, 1984.
(d) The participant had an accrued benefit under the
plan as of December 31, 1983.
-42-
(e) The method of distribution designated by the
participant or the beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the participant's death, the beneficiaries
of the participant listed in order of priority.
A distribution upon death will not be covered by this Section 4.6.3
unless the information in the designation contains the required
information described above with respect to the distributions to be
made upon the death of the participant. For any distribution which
commences before January 1, 1984, but continues after December 31,
1983, the participant, or the beneficiary, to whom such distribution is
being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method
of distribution was specified in writing and the distribution satisfies
the requirements in subparagraphs (a) and (e) above. If a designation
made pursuant to this Section 4.6.3 is revoked, any subsequent
distribution must satisfy the requirements of Section 401(a)(9) of the
Code and the regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin, the trust
must distribute by the end of the calendar year in which the revocation
occurs the total amount not yet distributed to satisfy Section
401(a)(9) of the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after December
31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of the Income
Tax Regulations. Any change in the designation will be considered to be
a revocation of the designation. However, the mere substitution or
addition of another beneficiary (one not named in the designation)
under the designation will not be considered to be a revocation of the
designation, so long as such substitution or addition does not directly
or indirectly alter the period over which distributions are to be made
under the designation. In the case in which an amount is transferred or
rolled over from one plan to another plan, the rules in Q&A J-2 and Q&A
J-3 of Sections 1.401(a)(9)-2 of the Income Tax Regulations shall
apply.
4.6.4. Definitions: The following definitions shall apply
for purposes of this Section 4.6:
-43-
(a) "Applicable life expectancy" shall mean the life
expectancy (or joint and last survivor expectancy) calculated
using the attained age of the participant (or designated
beneficiary) as of the participant's (or designated
beneficiary's) birthday in the applicable calendar year
reduced by one for each calendar year which has elapsed since
the date life expectancy was first calculated. If life
expectancy is being recalculated, the applicable life
expectancy shall be the life expectancy as so recalculated.
The applicable calendar year shall be the first distribution
calendar year, and if life expectancy is being recalculated
each succeeding calendar year. If annuity payments commence in
accordance with Section 4.6.1(i) before the required beginning
date, the applicable calendar year is the year such payments
commence. If distribution is in the form of an immediate
annuity purchased after the participant's death with the
participant's remaining interest, the applicable calendar year
is the year of purchase.
(b) "Designated beneficiary" shall mean the
individual who is designated as the beneficiary under the plan
in accordance with Section 401(a)(9) of the Code and the
regulations thereunder.
(c) "Distribution calendar year" shall mean a
calendar year for which a minimum distribution is required.
For distributions beginning before the participant's death,
the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the
participant's required beginning date. For distributions
beginning after the participant's death, the first
distribution calendar year is the calendar year in which
distributions are required to begin pursuant to Section 4.6.2
above.
(d) "Life expectancy" shall mean life expectancy and
joint and last survivor expectancy as computed by use of the
expected return multiples in Tables V and VI of Section 1.72-9
of the Income Tax Regulations. Unless otherwise elected by the
participant (or spouse, in the case of distributions described
in Section 4.6.2(b)(ii) above) by the time distributions are
required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the
participant (or
-44-
spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
(e) "Participant's benefit" shall mean his accrued
benefit as of the last adjustment date in the calendar year
immediately preceding the distribution calendar year
("valuation calendar year") increased by the amount of any
contributions or forfeitures allocated to the accrued benefit
as of dates in the valuation calendar year after the
adjustment date and decreased by distributions made in the
valuation calendar year after the adjustment date.
Notwithstanding the foregoing, if any portion of the minimum
distribution for the first distribution calendar year is made
in the second distribution calendar year on or before the
required beginning date, the amount of the minimum
distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately
preceding distribution calendar year.
(f) "Required beginning date" shall generally mean
the first day of April of the calendar year following the
calendar year in which the participant attains age 70 1/2.
Notwithstanding the foregoing, the following special
provisions shall apply:
(i) The required beginning date of a
participant who attains age 70 1/2 before January 1,
1988, shall be determined in accordance with (1) or
(2) below:
(1) The required beginning date of a
participant who is not a 5% owner is the first day of
April of the calendar year following the calendar
year in which the later of retirement or attainment
of age 70 1/2 occurs. The required beginning date of
a participant who is not a 5% owner who attains age
70 1/2 during 1988 and who has not retired as of
January 1, 1989, is April 1, 1990.
(2) The required beginning date of a
participant who is a 5% owner during any year
beginning after December 31, 1979 is the first day of
April following the later of: (A) the calendar year
in which the participant attains age
-45-
70 1/2, or (B) the earlier of the calendar year with
or within which ends the plan year in which the
participant becomes a 5% owner, or the calendar year
in which the participant retires.
(ii) A participant is treated as a 5% owner
for purposes of this paragraph (f) if such
participant is a 5% owner as defined in Section
416(i) of the Code (determined in accordance with
Section 416 but without regard to whether the 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.
(iii) Once distributions have begun to a 5%
owner under this paragraph (f), they must continue
even if the participant ceases to be a 5% owner in a
subsequent year.
All distributions under this Section 4.6 shall be determined and made in
accordance with Section 401(a)(9) of the Code and the regulations thereunder,
including the minimum distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the Income Tax Regulations.
4.7. Joint and survivor annuity requirements: The provisions
of this Section 4.7 shall apply to any participant who is credited with at least
one hour of service with the Employer on or after August 23, 1984, and such
other participants as provided in Section 4.7.6, as follows:
4.7.1. Qualified retirement annuity: Unless an optional form
of benefit described in Section 4.6.1 is elected pursuant to a
qualified election within the 90 day period ending on the annuity
starting date, a participant's vested accrued benefit shall be applied
to the purchase of a qualified retirement annuity. The participant may
elect to have such annuity distributed upon the attainment of the
earliest retirement age under the plan.
4.7.2. Qualified preretirement survivor annuity: Unless an
optional form of benefit has been selected within the election period
pursuant to a qualified election, if the participant dies before the
annuity starting date, then his vested accrued benefit shall be applied
toward the purchase of a qualified preretirement survivor annuity. The
surviving spouse may elect by written notice
-46-
to the Committee to have such annuity distributed to her within a
reasonable period following the death of the participant. If the
participant leaves no surviving spouse, or elects an optional form of
death benefit, his vested accrued benefit shall be payable as provided
in Section 4.6.2.
4.7.3. Definitions: The following definitions shall apply
for purposes of this Section 4.7:
(a) "Annuity starting date" shall mean the first day
of the first period for which an amount is paid in an annuity
or any other form.
(b) "Election period" shall mean the period which
begins on the first day of the plan year in which the
participant attains age 35 and ends on the date of the
participant's death. If a participant terminates from service
prior to the first day of the plan year in which he attains
age 35, with respect to his accrued benefit as of the date of
separation, the election period shall begin on the date of
termination. A participant who will not yet attain age 35 as
of the end of any current plan year may make a special
qualified election to waive the qualified preretirement
survivor annuity for the period beginning on the date of such
election and ending on the first day of the plan year in which
the participant will attain age 35. Such election shall not be
valid unless the participant receives a written explanation of
the qualified preretirement survivor annuity in such terms as
are comparable to the explanation required under Section
4.7.4. Qualified preretirement survivor annuity coverage will
be automatically reinstated as of the first day of the plan
year in which the participant attains age 35. Any new waiver
on or after such date shall be subject to the full
requirements of this Section 4.7.
(c) "Earliest retirement age" shall mean the earliest
date on which the participant could elect to receive
retirement benefits under the plan.
(d) "Qualified election" shall mean the waiver of a
qualified retirement annuity or a qualified preretirement
survivor annuity. Any such election shall not be effective
unless: (i) the participant's spouse (if any) consents in
writing to the election; (ii)
-47-
the election designates a specific beneficiary, including any
class of beneficiaries or contingent beneficiaries, which may
not be changed without spousal consent (or the spouse
expressly permits designations by the participant without any
further spousal consent); (iii) the spouse's consent
acknowledges the effect of the election; and (iv) the spouse's
consent is witnessed by a plan representative or notary
public. Additionally, a participant's qualified election shall
not be effective unless it designates a form of benefit
payment which may not be changed without spousal consent (or
the spouse expressly permits designations by the participant
without any further spousal consent). If it is established to
the satisfaction of a plan representative that there is no
spouse or that the spouse cannot be located, an election by
the participant will be deemed a qualified election. Any
consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such spouse.
A consent that permits designations by the participant without
any requirement of further consent by such spouse must
acknowledge that the spouse has the rights to limit consent to
a specific beneficiary, and a specific form of benefit (where
applicable), and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior election may be made by a participant without the
consent of the spouse at any time before the commencement of
benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless
the participant has received notice as provided in Section
4.7.4.
(e) "Qualified joint and survivor annuity" shall mean
an immediate noncashable and nontransferable annuity purchased
from a legal reserve life insurance company providing
approximately equal monthly installments for the life of the
participant with a survivor annuity for the life of the
participant's spouse which is not less than 50% and not more
than 100% of the amount of the annuity payable during the
joint lives of the participant and the participant's spouse.
The joint and survivor annuity shall be the amount of benefit
which can be purchased with the participant's vested accrued
benefit. The percentage of the survivor annuity under the plan
shall be 50%
-48-
unless otherwise elected by the Employer in the Adoption
Agreement.
(f) "Qualified preretirement survivor annuity" shall
mean an immediate noncashable and nontransferable annuity
purchased from a legal reserve life insurance company
providing approximately equal monthly installments for the
life of the participant's surviving spouse, if any.
(g) "Qualified retirement annuity," with respect to a
participant who is married on the annuity starting date, shall
mean a qualified joint and survivor annuity. A qualified
retirement annuity, with respect to a participant who is not
married on the annuity starting date, shall mean a life
annuity as described in Section 4.6.1(i).
(h) "Spouse" or "surviving spouse" shall mean the
legally married spouse or surviving spouse of the participant,
provided that a former spouse shall be treated as the spouse
or surviving spouse to the extent provided under a qualified
domestic relations order as described in Section 414(p) of the
Code.
4.7.4. Notice requirements: The following notice requirements
shall apply for purposes of this Section 4.7:
(a) In the case of a qualified retirement annuity
payable pursuant to Section 4.7.1, the plan administrator
shall no less than 30 days and no more than 90 days prior to
the annuity starting date provide the participant a written
explanation of: (i) the terms and conditions of a qualified
retirement annuity; (ii) the participant's right to make and
the effect of an election to waive the qualified retirement
annuity form of benefit; (iii) the rights of a participant's
spouse; and (iv) the right to make and the effect of a
revocation of a previous election to waive the qualified
retirement annuity.
(b) In the case of a qualified preretirement survivor
annuity payable pursuant to Section 4.7.2, the plan
administrator shall provide the participant, within the
applicable period for such participant, a written explanation
of the qualified preretirement survivor annuity. Such
explanation shall set forth the information specified in (i)
through (iv) of Sec-
-49-
tion 4.7.4(a), except that references to the qualified
retirement annuity shall instead be to the qualified
preretirement survivor annuity. The applicable period for a
participant is the last to end of the following periods: (i)
the period beginning with the first day of the plan year in
which the participant attains age 32 and ending with the close
of the plan year in which the participant attains age 35; (ii)
a reasonable period ending after the individual becomes a
participant; or (iii) a reasonable period after this Section
4.7 first applies to the participant. For purposes of applying
the preceding sentence, a reasonable period ending after the
events described in (ii) and (iii) is the end of the 2 year
period beginning one year prior to the date the applicable
event occurs and ending one year after that date. In the case
of a participant who separates from service before the plan
year in which age 35 is attained, notice shall be provided
within the 2 year period beginning one year prior to
separation and ending one year after separation. If such
participant thereafter returns to employment with the
Employer, the applicable period for such participant shall be
redetermined.
4.7.5. Safe harbor rules: Except to the extent otherwise
elected by the Employer in the Adoption Agreement or as provided in
Section 4.7.6, the requirements of this Section 4.7 shall not apply to
a participant in a profit-sharing plan, and to any distribution made on
or after the first day of the first plan year beginning after December
31, 1988 from the participant's deductible contribution account under a
money purchase pension plan, if the following conditions are met:
(a) The participant cannot or does not elect payments
in the form of a life annuity.
(b) Upon the death of the participant, the
participant's vested accrued benefit will be paid to the
participant's surviving spouse, or, if the surviving spouse
has already consented in a manner conforming to a qualified
election, then to the participant's designated beneficiary.
The surviving spouse may elect to have distribution of the
vested accrued benefit commence within the 90-day period
following the date of the participant's death. The accrued
benefit shall be adjusted for gains and losses occur-
-50-
ring after the participant's death in accordance with Section
4.10.
(c) The profit-sharing plan with respect to the
participant is not determined to be the direct or indirect
transferee of a defined benefit plan, money purchase pension
plan (including a target benefit plan), stock bonus or
profit-sharing plan which is subject to the survivor annuity
requirements of Sections 401(a) and 417 of the Code.
For purposes of this Section 4.7.5, "vested accrued benefit" shall
refer, in the case of a money purchase plan, only to the balance in the
participant's deductible contribution account.
4.7.6. Transitional rules: Notwithstanding the foregoing
provisions of this Section 4.7, the following provisions shall apply:
(a) Any participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits
prescribed by the provisions of this Section 4.7, must be
given the opportunity to elect to have the provisions of this
Section 4.7 apply if such participant is credited with at
least one hour of service under this plan or a prior plan in a
plan year beginning on or after January 1, 1976, and such
participant had at least 10 years of service when he separated
from service.
(b) Any participant not receiving benefits on August
23, 1984, who was credited with at least one hour of service
under this plan or a prior plan on or after September 2, 1974,
and who is not otherwise credited with any service in a plan
year beginning on or after January 1, 1976, must be given the
opportunity to have his benefits paid in accordance with
paragraph (d) of this Section 4.7.6.
(c) The respective opportunities to elect (as
described in paragraphs (a) and (b) of this Section 4.7.6)
must be afforded to the appropriate participants during the
period commencing on August 23, 1984, and ending on the date
benefits would otherwise commence to said participants.
-51-
(d) Any participant who has elected pursuant to
paragraph (b) of this Section 4.7.6 and any participant who
does not elect under paragraph (a) of this Section 4.7.6, or
who meets the requirements of paragraph (a) except that such
participant does not have at least 10 years of service when he
separates from service, shall have his benefits distributed in
accordance with all of the following requirements if but for
this paragraph (d) the participant's benefit would have been
payable in the form of a life annuity:
(i) Automatic joint and survivor annuity:
If benefits in the form of a life annuity become
payable to a married participant who: (A) begins to
receive payments under the plan on or after normal
retirement age; or (B) dies on or after normal
retirement age while still working for the Employer;
or (C) begins to receive payments on or after the
qualified early retirement age; or (D) separates from
service on or after attaining normal retirement age
(or the qualified early retirement age) and after
satisfying the eligibility requirements for the
payment of benefits under the plan and thereafter
dies before beginning to receive such benefits; then
such benefits shall be received under this plan in
the form of a qualified joint and survivor annuity,
unless the participant has elected otherwise during
the election period. The election period must begin
at least 6 months before the participant attains
qualified early retirement age and end not more than
90 days before the commencement of benefits. Any
election hereunder will be in writing and may be
changed by the participant at any time.
(ii) Election of early survivor annuity: A
participant who is employed after attaining the
qualified early retirement age will be given the
opportunity to elect, during the election period, to
have a survivor annuity payable on death. If the
participant elects the survivor annuity, payments
under such annuity must not be less than the payments
which would have been made to the spouse under the
qualified joint and survivor annuity if the
participant had retired on the day before his or her
death. Any elec-
-52-
tion under this provision will be in writing and may
be changed by the participant at any time. The
election period begins on the later of (A) the 90th
day before the participant attains the qualified
early retirement age, or (B) the date on which
participation begins, and ends on the date the
participant terminates employment.
(iii) Definitions: The following definitions
shall apply for purposes of this paragraph (d):
(1) "Qualified early retirement age" shall
mean the latest of:
(A) the earliest date, under the plan, on
which the participant may elect to receive retirement
benefits,
(B) the first day of the 120th month
beginning before the participant reaches normal
retirement age, or
(C) the date the participant begins
participation.
(2) "Qualified joint and survivor annuity"
shall mean an annuity for the life of the participant
with a survivor annuity for the life of the spouse as
described in paragraph (e) of Section 4.7.3.
4.8. Small amount: Notwithstanding any other provision of the
plan, if the vested accrued benefit of a participant does not exceed $3,500 as
of the adjustment date coincident with or next following the date of his
termination of service for any reason, including death, or any previous
adjustment date as of which a distribution was made, then his vested accrued
benefit shall be paid in a lump sum as of such adjustment date to the person
entitled thereto without regard to any election made by the participant or any
consent of the participant or the participant's spouse. For purposes of this
Section 4.8, if the value of a participant's vested accrued benefit is zero, the
participant shall be deemed to have received distribution of such vested accrued
benefit. If a distribution is made to a participant before he attains age 59
1/2, such participant shall be advised by the plan administrator that an
additional income tax may be imposed in an amount
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equal to 10% of the amount so received which is included in his taxable income
for such taxable year.
4.9. Interim payments: Except as provided in Section 4.7, the
Committee may in a nondiscriminatory manner cause one or more interim payments
to be made to a participant or his beneficiary, as the case may be, between the
date the participant shall retire, or the date of death of the participant, and
the adjustment date as of which retirement or death benefits would ordinarily be
paid or commence to be paid; provided, that in no event shall the aggregate of
such interim payments exceed 50% of the vested accrued benefit of such
participant as of the close of business of the plan on the adjustment date next
preceding the date he shall retire or die.
4.10. Continued share in profits or losses of trust fund: If
all or any part of the accrued benefit of any individual is being paid to him
from the trust in installments, or is being held in the trust for future payment
to him, his account shall continue to be adjusted as provided in Section 6. With
respect to an individual who is receiving installment payments from the trust,
the amount of the installment payments shall be adjusted as of each adjustment
date to reflect the adjusted amount in his account (or deferred payment account
as the case may be) as of such adjustment date.
4.11. Optional withdrawals: If the requirements of Section 4.7
shall not apply with respect to the plan and if permitted by the Adoption
Agreement, a participant in service may at his option make one or more
withdrawals from his Employer contribution account subject to the following
provisions:
4.11.1. No withdrawal hereunder shall exceed 50% of the vested
amount in the Employer contribution account of the participant as of
the adjustment date next preceding the date of the withdrawal;
provided, that in any event the amount remaining in the participant's
Employer contribution account following any such withdrawal shall not
be less than the aggregate of the Employer contributions and
forfeitures under the plan credited to his account for the 2 plan years
preceding such withdrawal.
4.11.2. A participant may not withdraw any portion of the
Employer contribution allocable to him for the plan year in which an
application for withdrawal is filed.
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4.11.3. Application for a withdrawal shall be made by the
participant in writing on a form approved by the Committee and filed
with the Committee, and not more than one application shall be filed
during any plan year.
4.11.4. If any portion of the Employer contribution account of
a participant is distributed to him at a time when he has a
nonforfeitable right to less than 100% of his Employer contribution
account, at any subsequent relevant time the participant's
nonforfeitable portion of the Employer contribution account shall not
be less than an amount ("X") determined by the following formula: X = P
(AB + D) - D. For purposes of applying the formula: P is the
nonforfeitable percentage at the relevant time; AB is the account
balance in the Employer contribution account at the relevant time; D is
the amount of the distribution, and the relevant time is the time under
the plan at which the nonforfeitable percentage of his account balance
cannot increase.
4.12. Loans: If permitted by the Adoption Agreement, upon the
written application of any participant or beneficiary (other than an
owner-employee or shareholder-employee), the Committee in accordance with its
uniform, nondiscriminatory policy may direct the Trustee to permit the
participant to borrow from his account, subject to the following provisions:
4.12.1. The minimum principal amount of any loan made to a
participant shall be $1,000. The maximum principal amount of any loan
made to the participant or beneficiary, when added to the then unpaid
balance on all loans previously made to the participant or beneficiary,
shall not exceed the lesser of
(a) $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 day the loan
is made; or
(b) 50% of the vested accrued benefit of the
participant.
For purposes of this Section 4.12, the participant's vested accrued
benefit shall be determined as of the adjustment date next preceding
the date he files his application for a loan. If a participant shall
have a vested accrued benefit in more than one tax-qualified retirement
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plan of the Employer, the limitation in (a) or (b) shall be applied
both with respect to this plan only and with respect to all such plans
in the aggregate. In applying the limitations with respect to this
plan, only loans to the participant under this plan and his vested
accrued benefit under this plan shall be taken into account. In
applying the limitations with respect to all such plans in the
aggregate, all loans to the participant under all such plans and the
sum of his vested accrued benefits under all such plans shall be taken
into account.
4.12.2. All loans shall by their terms require that repayment
be amortized in level payments of principal and interest, not less
frequently than quarterly, over a period not exceeding 5 years from the
date made, except that the obligation to repay shall not exceed 10
years with respect to a loan made to a participant for the purpose of
acquiring any dwelling unit which is used or will be used within a
reasonable time (determined at the time the loan is made) as the
primary residence of the participant or beneficiary.
4.12.3. Each participant or beneficiary making an application
for a loan shall receive from the Trustee a statement of the charges
involved in the loan transaction. This statement shall include the
amount financed and the annual interest rate. If the requirements of
Section 4.7 shall apply with respect to the plan, no loan shall be made
to a participant unless the participant has obtained, within the 90 day
period next preceding the loan, the written consent of his spouse, if
any, to such loan. The consent of the spouse must be obtained in a
manner which constitutes a qualified election as defined in Section
4.7.3(d). A new consent must be obtained from the spouse for any
renegotiation, extension, renewal, or other revision of the loan.
4.12.4. Each loan shall be secured by the pledge of 50% of the
borrowing participant's or beneficiary's vested accrued benefit
(determined at the time the loan is made), and by the pledge of such
further security as the Committee, in its discretion, deems necessary
or desirable to assure repayment of the borrowed amount and all
interest payable thereon in accordance with the terms of the loan.
4.12.5. Each loan shall be evidenced by a negotiable
promissory note (the "note") in form acceptable to the Trustee, payable
to the order of the Trustee, bearing in-
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terest at a rate commensurate with the prevailing rate charged by
commercial lenders in the geographic region of the Employer, as
determined by the Trustee, and, except as provided in Section 4.12.2,
payable in full not more than 5 years from the date thereof. The
borrowing participant or beneficiary shall execute any additional
documents as shall be deemed necessary or advisable by the Committee to
consummate the loan and to provide reasonable safeguards. The principal
amount of each loan to a participant or beneficiary shall be an
investment allocated solely to the account of the borrowing participant
or beneficiary, and the rate and all interest paid thereon shall be
allocated solely to the account of the borrowing participant or
beneficiary. If so directed by the Committee, the Employer shall
establish a procedure for withholding at appropriate intervals from a
borrowing participant's regular payroll checks amounts necessary to
satisfy the borrowing participant's repayment obligations under the
note. All amounts so withheld shall be transferred immediately to the
Trustee.
4.12.6. The occurrence of any one or more of the following
events of default shall constitute a default by the borrowing
participant or beneficiary under the terms of the loan, whereupon the
unpaid balance of the note, together with accrued interest, will
immediately become due and payable without presentment, demand,
protest, or notice of any kind. Events of default include: (i) failure
to make any payment when due, whether by acceleration or otherwise;
(ii) bankruptcy or insolvency of the borrowing participant or
beneficiary; or (iii) death of the borrowing participant or
beneficiary.
4.12.7. If an event of default shall occur with respect to a
borrowing participant or beneficiary, the entire unpaid principal
amount of the note, plus accrued and unpaid interest shall immediately
become due and payable in accordance with the terms and provisions set
forth in Section 4.12.7 of the Adoption Agreement; provided, that
foreclosure on the note and attachment of the participant's or
beneficiary's vested accrued benefit shall not occur until a
distributable event occurs under the plan.
Section 5. Vesting:
--------- -------
5.1. Notwithstanding the vesting schedule elected by the
Employer in Section 5 2 of the Adoption Agreement and sub-
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ject to the provisions of Section 5.3, the accrued benefit of each participant
shall be fully vested (that is, not subject to forfeiture) immediately following
the first to occur of:
5.1.1. Completion by the participant of his first hour of
service on or after attainment of his normal retirement age;
5.1.2. Retirement of the participant under Section 4,
including early retirement, if permitted, and disability retirement;
5.1.3. Death of the participant while in service;
5.1.4. Termination or partial termination of the plan by the
Employer;
5.1.5. If the plan is a profit-sharing plan, termination by
the Employer of contributions to the plan, or a suspension or reduction
of such contributions which amounts in effect to a termination of
contributions; and
5.1.6. A final determination of disqualification of the plan
at any time following initial determination by the Internal Revenue
Service that the plan is qualified.
5.2. A participant whose accrued benefit is not fully vested
as provided in Section 5.1 shall be vested in all or a percentage of his
Employer contribution account depending upon the number of his years of service
at the time such vested percentage is being determined, as specified by the
Employer in the Adoption Agreement. For purposes of determining the vested
percentage of a participant, the following special provisions shall apply:
5.2.1. The 12 month period for determining years of service
and breaks in service shall be the plan year.
5.2.2. All years of service shall be taken into account except
as otherwise elected by the Employer in the Adoption Agreement.
5.2.3. With respect to any participant who shall have had a
prior break in service:
(a) No year of service prior to a one-year break in
service shall be taken into account until
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such participant shall have completed at least one year of
service following such break in service.
(b) Notwithstanding paragraph (a) immediately
preceding, if an employee shall have a break in service
following the computation date (as defined in Section 1.37)
and shall not have any vested interest in his Employer
contribution account at the time of such break in service, and
the period of consecutive one-year breaks in service equals or
exceeds the greater of (i) 5, or (ii) the aggregate number of
years of service before such period, all years of such service
prior to such period shall be disregarded. For the purpose of
determining years of service prior to such period, there shall
be excluded any years of service previously disregarded under
this paragraph (b).
(c) No year of service following 5 consecutive
one-year breaks in service shall be taken into account in
determining the vested percentage of his accrued benefit with
respect to his service prior to such break.
5.2.4. In the event the Employer shall amend the provisions of
the plan for determining the vested percentages of participants, or if
the plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule as provided in Section 21.2.2, each
participant with at least 3 years of service with the Employer may
elect, within a reasonable period after the adoption of the amendment,
to have his vested percentage determined without regard to such
amendment. For participants who do not have at least one hour of
service in any plan year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 years of
service" for "3 years of service" where such language appears. The
period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the
latest of: (i) 60 days after the amendment is adopted; (ii) 60 days
after the amendment becomes effective; or (iii) 60 days after the
participant is issued written notice of the amendment by the Employer
or plan administrator.
5.3. A participant who is not fully vested in his accrued
benefit shall forfeit the portion of his accrued benefit which is not vested as
of the year-end adjustment date for
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the plan year in which first occurs the following: (i) he shall have 5
consecutive one-year breaks in service, (ii) he shall terminate service and die
following such termination and prior to having a break in service, or (iii) he
shall terminate service and receive or be deemed to receive a distribution
pursuant to Section 4.5 or 4.8 (regardless of whether he had incurred a break in
service). The portion of his accrued benefit which is not vested shall be
determined as of the adjustment date described in the immediately preceding
sentence, following the adjustments to his accrued benefit as provided in
Section 6. The portion of his accrued benefit so forfeited shall be treated as
provided in Section 5.3 of the Adoption Agreement. No forfeitures will occur
solely as a result of an employee's withdrawal of employee contributions.
Notwithstanding the foregoing provisions of the Section 5.3, if the participant
receives or is deemed to receive a distribution pursuant to Section 4.5 or 4.8
and subsequently reenters service, the participant's Employer contribution
account shall be restored to the balance that existed in such account as of the
distribution date if the participant repays to the trust the full amount of the
distribution attributable to the Employer contribution account before the
earlier of 5 years after the participant first reenters service or the last day
of the plan year in which the participant incurs his fifth consecutive one-year
break in service following the distribution date.
Section 6. Accounts of Participants:
The Committee shall cause an account to be kept under the plan
with respect to each participant, which account shall include to the extent
applicable the separate accounts described in Section 1.1. The amount in each
separate account with respect to the participant as of each adjustment date,
ascertained under this Section 6 and herein called the "basic credit," shall be
adjusted as of each succeeding adjustment date in the order set forth below:
6.1. There shall be debited the total amount of any payments
made from the account since the last preceding adjustment date to or for the
benefit of the individual entitled thereto.
6.2. There shall be credited or debited that portion of the
net income or net loss of the trust since the last preceding adjustment date
which the basic credit as of the last preceding adjustment date, further
adjusted as provided in Section 6. 1, bears to the total of all the basic
credits as of
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such preceding adjustment date so adjusted. The net income or net loss of the
trust shall be ascertained by the Trustee and shall mean the profits and income
actually realized and received, less the losses and expenses actually incurred
and paid, plus any net increase or minus any net decrease in the fair market
value of the assets of the trust not actually realized and received or incurred
and paid. In ascertaining such value the expense of liquidation shall not be
taken into account. "Basic credit as of the last preceding adjustment date"
shall be such credit after the adjustments under this Section 6 shall have been
made.
6.3. There shall be credited any contribution for the current
plan year allocated to him as provided in the plan.
Section 7. Administration by Committee:
7.1. The Committee shall consist of not more than five
individuals who shall be appointed by the Board to serve at the pleasure of the
Board. Any member of the Committee may resign, and his successor, if any, shall
be appointed by the Board. The Committee shall be responsible for the general
administration and interpretation of the plan and for carrying out its
provisions, except to the extent all or any of such obligations are specifically
imposed on the Trustee or the Board. The Committee shall furnish to the Trustee
such information as the Trustee shall require for the proper administration of
the trust. The plan administrator, who shall be a member of the Committee, shall
be designated in the Adoption Agreement. The plan administrator shall be agent
for service of legal process on the plan.
7.2. The members of the Committee shall elect a Chairman and
may elect an acting Chairman. They shall also elect a Secretary and may elect an
acting Secretary, either of whom may be but need not be a member of the
Committee. The Committee may appoint from its membership such subcommittees with
such powers as the Committee shall determine, and may authorize one or more of
its members or any agent to execute or deliver any instruments or to make any
payment in behalf of the Committee.
7.3. The Committee shall hold such meetings upon such notice,
at such places and at such intervals as it may from time to time determine.
Notice of meetings shall not be required if notice is waived in writing by all
the members of
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the Committee at the time in office, or if all such members are present at the
meeting.
7.4. A majority of the members of the Committee at the time in
office shall constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee at any meeting shall be by
vote of a majority of those present at any such meeting and entitled to vote.
Resolutions may be adopted or other action taken without a meeting upon written
consent thereto signed by all of the members of the Committee.
7.5. The Committee shall maintain full and complete records of
its deliberations and decisions. The minutes of its proceedings shall be
conclusive proof of the facts of the operation of the plan. The records of the
Committee shall contain all relevant data pertaining to individual participants
and their rights under the plan and in the trust fund.
7.6. Subject to the limitations of the plan and of ERISA the
Committee may from time to time establish rules or by-laws for the
administration of the plan and the transaction of its business.
7.7. No individual member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself or to any of
his rights or benefits under the plan (except that such member may sign
unanimous written consent to resolutions adopted or other action taken without a
meeting) except to the extent such right shall be generally provided to
participants pursuant to the terms of the plan.
7.8. The Committee may correct errors and, so far as
practicable, may adjust any benefit or credit or payment accordingly. The
Committee may in its discretion waive any notice requirements in the plan;
provided, that a waiver of a requirement to notify the Trustee shall be made
only with the consent of the Trustee. A waiver of notice in one or more cases
shall not be deemed to constitute a waiver of notice in any other case. With
respect to any power or authority which the Committee has discretion to exercise
under the plan, such discretion shall be exercised in a nondiscriminatory
manner.
7.9. Subject to the claims procedure set forth in Section 14,
the Committee and the plan administrator shall have the duty, authority, and
discretion to interpret and construe the provisions of the plan and to decide
any dispute which may arise regarding the rights of participants hereunder,
including
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the authority to construe uncertain provisions of the plan and to make
determinations as to the eligibility of employees for plan participation and of
employees and beneficiaries for benefits under the plan. Determinations by the
Committee and plan administrator shall apply uniformly to all persons similarly
situated and shall be binding and conclusive upon all interested persons.
7.10. The Committee may engage an attorney, accountant or any
other technical advisor on matters regarding the operation of the plan and to
perform such other duties as shall be required in connection therewith, and may
employ such clerical and related personnel as the Committee shall deem requisite
or desirable in carrying out the provisions of the plan. The Committee shall
from time to time, but no less frequently than annually, review the financial
condition of the plan and determine the financial and liquidity needs of the
plan as required by ERISA. The Committee shall communicate such needs to the
Employer and to the Trustee so that the funding policy and investment policy may
be appropriately coordinated to meet such needs.
7.11. No fee or compensation shall be paid to any member of
the Committee for his service as such.
7.12. The Committee shall be entitled to reimbursement out of
the trust fund for its reasonable expenses properly and actually incurred in the
performance of its duties in the administration of the plan; provided, that the
Employer may, in the discretion of the Board, pay such expenses.
7.13. All requests, directions, requisitions and instructions
of the Committee to the Trustee shall be in writing and signed by such person or
persons as shall be designated in writing by the Committee.
7.14. To the maximum extent permitted by ERISA, no member of
the Committee shall be personally liable by reason of any contract or other
instrument executed by him or on his behalf as a member of the Committee nor for
any mistake of judgment made in good faith, and the Employer shall indemnify and
hold harmless, directly from its own assets (including the proceeds of any
insurance policy the premiums for which are paid from the Employer's own
assets), each member of the Committee and each other officer, employee, or
director of the Employer to whom any duty or power relating to the
administration or interpretation of the plan may be delegated or allocated,
against any unreimbursed or uninsured cost or expense (including any
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sum paid in settlement of a claim with the prior written approval of the Board)
arising out of any act or omission to act in connection with the plan unless
arising out of such person's own fraud, bad faith, willful misconduct or gross
negligence.
Section 8. Management of Funds and Amendment or Termination
--------- ------------------------------------------------
of Plan:
-------
8.1. All assets of the plan shall be held in a trust forming
part of the plan, which shall be administered as a trust fund to provide for the
payment to the participants or their successors in interest, out of the income
and principal of the trust, of benefits as provided in the plan. All fiduciaries
(as defined in ERISA) with respect to the plan shall discharge their duties as
such solely in the interest of the participants and their successors in
interest, and (i) for the exclusive purposes of providing benefits to
participants and their successors in interest and defraying reasonable expenses
of administering the plan, including the trust which is a part of the plan, (ii)
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of like character and with
like aims, and (iii) in accordance with the plan, except to the extent such
document may be inconsistent with the then applicable federal laws relating to
fiduciary responsibility. The trust fund shall be used for the exclusive benefit
of the participants and beneficiaries and to pay administrative expenses of the
plan and trust to the extent not paid by the Employer, and no portion of the
trust fund shall ever revert to or inure to the benefit of the Employer (except
as otherwise provided in this Section 8.1). Notwithstanding the foregoing
provisions of this Section 8.1, the following special provisions shall apply:
8.1.1. The Sponsor expressly reserves the right to amend or
terminate the plan and liquidate the trust, and the Employer, by
execution of the Adoption Agreement, delegates to the Sponsor the
authority to amend or terminate the plan and to liquidate the trust by
written instrument signed by the duly authorized representative of the
Sponsor, and the Employer shall be deemed to have consented to any such
amendments or termination. No amendment to the plan shall be effective
to the extent that it has the effect of decreasing a participant's
accrued benefit. Notwithstanding the preceding sentence, a
participant's accrued benefit may be reduced to the extent permitted
under Section 412(c)(8) of the Code. For purposes
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of this Section 8.1.1, a plan amendment which has the effect of
decreasing a participant's accrued benefit or eliminating an optional
form of benefit, with respect to benefits attributable to service
before the amendment, shall be treated as reducing an accrued benefit.
Furthermore, if the vesting schedule of a plan is amended, in the case
of an employee who is a participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
employee's right to his employer-derived accrued benefit will not be
less than his percentage computed under the plan without regard to such
amendment.
8.1.2. An Employer may amend the plan by (i) changing the
choice of options in the Adoption Agreement, (ii) adding overriding
plan language to the Adoption Agreement where such language is
necessary to satisfy Sections 415 or 416 of the Code because of the
required aggregation of multiple plans under these sections, and (iii)
adding certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause
the plan to be treated as individually designed. The Employer shall be
considered to have an individually designed plan if the Employer amends
the plan or nonelective portions of the Adoption Agreement for any
other reason, including a waiver of the minimum funding requirements
under Section 412(d) of the Code. If the plan or any nonelective
provision of the Adoption Agreement is amended by the Employer except
as permitted in this Section 8.1.2, the funds of the plan shall be
segregated from the trust by the Trustee as soon as is practicable. The
Employer may terminate the plan as applicable to it, subject to the
provisions of Sections 12.1 and 12.2.
8.1.3. Notwithstanding any other provisions of the plan, if
the Employer shall (i) make a contribution to the plan by a mistake of
fact, or (ii) shall make a contribution to the plan conditioned upon
its deductibility under Section 404 of the Code and such contribution
shall be determined to be nondeductible, or (iii) shall make a
contribution to the plan conditional upon the initial qualification of
the plan under Section 401(a) of the Code and the qualified status of
the plan with respect to the year for which such contribution is made
shall be denied, then in any such event such contribution shall be
returned to the Employer without interest or other increment as soon
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as practicable, but in no event later than one year after said mistaken
payment or after it shall be finally determined that the contribution
is not deductible or after final determination of denial of qualified
status of the plan, whichever shall be applicable. The amount to be so
returned shall reflect trust net losses, if any, following said
contribution, and shall be limited to the extent necessary to avoid a
reduction of the accrued benefit of any participant below what his
accrued benefit would have been if such contribution (to the extent
made by mistake or determined to be nondeductible or made with respect
to a year for which the plan is disqualified) had not been made.
8.2. The Employer shall, upon proper authorization, adopt the
plan and execute the Adoption Agreement. When such Adoption Agreement has been
accepted and executed by the Trustee and an initial contribution has been
received by the Trustee from the Employer, the plan as applied to the Employer
shall become effective as of the date specified in the Adoption Agreement.
Section 9. Allocation of Responsibilities Among Named
--------- ------------------------------------------
Fiduciaries:
-----------
9.1. The named fiduciaries with respect to the plan and the
fiduciary duties and other responsibilities allocated to each are as follows:
9.1.1. Board:
(a) To amend the plan (subject to Sections 8.1.1
and 8.1.2);
(b) To appoint and remove members of the
Committee, including the plan administrator;
(c) To appoint and remove the Trustee under the
plan;
(d) To determine the amount to be contributed
to the plan each year by the Employer; and
(e) To terminate the plan.
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9.1.2. Committee:
(a) To interpret the provisions of the plan and to
determine the rights of participants under the plan, except to
the extent otherwise provided in Section 14 relating to claims
procedure;
(b) To administer the plan in accordance with its
terms, except to the extent powers to administer the plan are
specifically delegated to another named fiduciary or other
person or persons as provided in the plan;
(c) To account for the accrued benefits of
participants; and
(d) To direct the Trustee in the distribution of
trust assets.
9.1.3. Plan Administrator:
(a) To file such reports as may be required with the
United States Department of Labor, the Internal Revenue
Service and any other government agencies to which reports may
be required to be submitted from time to time;
(b) To comply with requirements of law for disclosure
of plan provisions and other information relating to the plan
to participants and other interested parties; and
(c) To administer the claims procedure to the extent
provided in Section 14.
9.1.4. Trustee:
(a) To invest and reinvest trust assets;
(b) To make distributions to plan participants
as directed by the Committee;
(c) To render annual accountings to the Employer
as provided in the plan; and
(d) Otherwise to hold, administer and control the
assets of the trust as provided in Section 18 of the plan.
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9.1.5. Investment Manager: In the event the Board shall
appoint an investment manager to manage (including the power acquire
and dispose of) assets of the trust, as provided in Section 18.1.2 of
the plan, the duties of the investment manager shall be to manage,
acquire and dispose of assets of the trust, or to direct the Trustee in
the management, acquisition and disposition of assets of the trust.
9.2. Except as otherwise provided in ERISA, a named fiduciary
shall not be responsible or liable for any act or omission of another named
fiduciary with respect to fiduciary responsibilities allocated to such other
named fiduciaries, and a named fiduciary of the plan shall be responsible and
liable only for its own acts or omissions with respect to fiduciary duties
specifically allocated to it and designated as its responsibility.
Section 10. Benefits Not Assignable; Facility of Payments:
---------- ---------------------------------------------
10.1. No portion of any benefit held or paid under the plan
with respect to any participant shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge the same shall be void, nor shall any portion of such accrued benefit be
in any manner payable to any assignee, receiver or trustee, or be liable for his
debts, contracts, liabilities, engagements or torts, or be subject to any legal
process to levy upon or attach; provided, that this Section 10.1 shall not apply
to the creation, assignment, or recognition of a right to any benefit payable
with respect to a participant pursuant to a qualified domestic relations order,
as defined in Section 414(p) of the Code, or any domestic relations order
entered before January 1, 1985.
10.2. If any individual entitled to receive any payments under
the plan shall be physically, mentally or legally incapable of receiving or
acknowledging receipt of such payment, the Committee, upon the receipt of
satisfactory evidence of his incapacity and satisfactory evidence that another
person or institution is maintaining him and that no guardian or committee has
been appointed for him, may cause any payment otherwise payable to him to be
made to such person or institution so maintaining him. Payment to such person or
institution shall
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be in full satisfaction of all claims by or through the participant to the
extent of the amount thereof.
Section 11. Beneficiary:
---------- -----------
Each participant shall name a beneficiary (which may include
more than one person, natural or otherwise, and one or more secondary or
contingent beneficiaries) who shall be entitled to any death benefits payable
from the trust under the plan, which beneficiary shall be subject to change upon
request in writing of such participant to the Committee; provided, that if such
beneficiary dies prior to asserting a written claim for such death benefit, or
if such participant fails to designate a beneficiary, then and in either of such
events, such benefit shall be payable to the surviving spouse of such
participant or, if he shall leave no surviving spouse, then to his estate.
Notwithstanding the foregoing, if the plan is not otherwise subject to the
requirements of Section 4.7 and the participant leaves a surviving spouse, such
spouse shall be his primary beneficiary unless the spouse consents to another
beneficiary in the manner which constitutes a qualified election as defined in
Section 4.7.3(d). If a beneficiary is receiving payments from the trust fund and
dies before receiving all of the payments due him, any remaining payments shall
be made to the contingent beneficiary, if any. If there is no contingent
beneficiary, any remaining payments shall be paid to the estate of the
beneficiary. Any beneficiary may disclaim all or any part of any benefit to
which such beneficiary shall be entitled hereunder by filing a written
disclaimer with the Committee at least 10 days before payment of such benefit is
to be made. Such a disclaimer shall be made in form satisfactory to the
Committee, and shall be irrevocable when filed. Any benefit disclaimed shall be
payable from the plan in the same manner as if the beneficiary who filed the
disclaimer had died on the date of such filing.
Section 12. Termination of Plan and Trust; Removal of
---------- -----------------------------------------
Trustee; Merger or Consolidation of Plan:
----------------------------------------
12.1. Complete termination: In the event of termination of the
plan, all contributions shall cease and no additional participants shall enter
the plan. The assets under the plan shall thereupon vest (that is, become
nonforfeitable) in the participants, beneficiaries or other successors in
interest, as their interests may appear, and such vested benefit of
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each such individual shall be held in the plan for distribution in accordance
with the provisions of Section 4; provided, that the Committee may in its
discretion provide for a liquidation of the trust and distributions to the
participants of their vested accrued benefits in cash, in kind, in the form of
nontransferable annuity contracts, or in any combination thereof. In addition,
if upon termination the plan does not offer an annuity option (purchased from a
commercial provider), the participant's accrued benefit may, without the
participant's consent, be distributed to the participant or transferred to
another defined contribution plan (other than an employee stock ownership plan
defined in Section 4975(e)(7) of the Code) of an affiliated employer. For
purposes of the plan, a termination of Employer contributions or a suspension or
reduction of such contributions which amounts in effect to a termination of
contributions shall be regarded as a termination of the plan.
12.2. Partial termination: In the event of a partial
termination of the plan, the provisions of Section 12.1 regarding a complete
termination shall apply in determining interests and rights of the participants
and their beneficiaries with respect to whom the partial termination shall
occur, and shall apply to the portion of the trust fund allocable to such
participants and beneficiaries.
12.3. Removal and resignation of Trustee: The Employer, at any
time by written notice of at least 90 days to the Trustee, may remove the
Trustee as trustee under the plan. The Trustee may resign at any time upon 90
days notice in writing to the Employer. As of the date of any such removal or
resignation of the Trustee, the Trustee shall transfer the assets of the trust
attributable to the plan as applied to the Employer to the successor trustee or
custodian named in the notice and the Employer shall thereupon be considered to
have an individually designed plan. Prior to such transfer, the accounts of the
Trustee shall be finally settled. Following such transfer, the Trustee and the
Sponsor shall be released and discharged from all further accountability or
liability with respect to the assets of the trust fund and shall not be
responsible in any way for further disposition of such assets or any part
thereof.
12.4. Merger or consolidation: In the event of any merger or
consolidation of the plan with any other plan, or a transfer of assets or
liabilities of the plan to any other plan (which merged, consolidated or
transferee plan shall be referred to in this Section 12.4 as the "successor
plan"), the amount which each participant would receive if the successor
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plan (and this plan, if he has any interest remaining therein) were terminated
immediately after the merger, consolidation or transfer shall be equal to or
greater than the amount he would have received if this plan (and the successor
plan, if he had any interest therein immediately prior to the merger,
consolidation or transfer) had been terminated immediately preceding the merger,
consolidation or transfer.
Section 13. Communication to Participants:
---------- -----------------------------
In accordance with the requirements of ERISA, the Employer
shall communicate the principal terms of the plan to the participants. The
Employer shall make available for inspection by participants and their
beneficiaries during reasonable hours, at the principal office of the Employer
and at such other places as may be required by ERISA, a copy of the plan and of
the trust agreement and of such other documents as may be required by ERISA.
Section 14. Claims Procedure:
---------- ----------------
The following claims procedure shall apply with respect to the
plan:
14.1. Filing of a claim for benefits: If a participant or
beneficiary (the "claimant") believes that he is entitled to benefits under the
plan which are not being paid to him or which are not being accrued for his
benefit, he shall file a written claim therefor with the plan administrator. In
the event the plan administrator shall be the claimant, all actions which are
required to be taken by the plan administrator pursuant to this Section 14 shall
be taken instead by another member of the Committee designated by the Committee.
14.2. Notification to claimant of decision: Within 90 days
after receipt of a claim by the plan administrator (or within 180 days if
special circumstances require an extension of time), the plan administrator
shall notify the claimant of his decision with regard to the claim. In the event
of such special circumstances requiring an extension of time, there shall be
furnished to the claimant prior to expiration of the initial 90 day period
written notice of the extension, which notice shall set forth the special
circumstances and the date by which the decision shall be furnished. If such
claim shall be wholly or partially denied, notice thereof shall be in writing
and worded in a manner calculated to be understood by the
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claimant, and shall set forth: (i) the specific reason or reasons for the
denial; (H) specific reference to pertinent provisions of the plan on which the
denial is based; (iii) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and (iv) an explanation of the procedure
for review of the denial. If the plan administrator fails to notify the claimant
of the decision in a timely manner, the claim shall be deemed denied as of the
close of the initial 90 day period (or the close of the extension period, if
applicable).
14.3. Procedure for review: Within 60 days following receipt
by the claimant of notice denying his claim, in whole or in part, or, if such
notice shall not be given, within 60 days following the latest date on which
such notice could have been timely given, the claimant shall appeal denial of
the claim by filing a written application for review with the Committee.
Following such request for review, the Committee shall fully and fairly review
the decision denying the claim. Prior to the decision of the Committee, the
claimant shall be given an opportunity to review pertinent documents and to
submit issues and comments in writing.
14.4. Decision on review: The decision on review of a claim
denied in whole or in part by the plan administrator shall be made in the
following manner:
14.4.1. Within 60 days following receipt by the Committee of
the request for review (or within 120 days if special circumstances
require an extension of time), the Committee shall notify the claimant
in writing of its decision with regard to the claim. In the event of
such special circumstances requiring an extension of time, written
notice of the extension shall be furnished to the claimant prior to the
commencement of the extension. If the decision on review is not
furnished in a timely manner, the claim shall be deemed denied as of
the close of the initial 60 day period (or the close of the extension
period, if applicable).
14.4.2. With respect to a claim that is denied in whole or in
part, the decision on review shall set forth specific reasons for the
decision, shall be written in a manner calculated to be understood by
the claimant, and shall cite specific references to the pertinent plan
provisions on which the decision is based.
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14.4.3. The decision of the Committee shall be final and
conclusive.
14.4.4. Action by authorized representative of claimant: All
actions set forth in this Section 14 to be taken by the claimant may
likewise be taken by a representative of the claimant duly authorized
by him to act in his behalf on such matters. The plan administrator and
the Committee may require such evidence as either may reasonably deem
necessary or advisable of the authority to act of any such
representative.
Section 15. Previously Existing Qualified Plans of the
---------- ------------------------------------------
Employer:
--------
By so designating in the Adoption Agreement, adoption of the
instant plan shall amend and supersede in its entirety a previously existing
defined contribution plan of the Employer which is qualified under Section
401(a) of the Code immediately prior to such adoption, as evidenced by a current
favorable determination letter or opinion letter issued by the Commissioner of
Internal Revenue or his delegate (which previously existing plan shall be
referred to herein as the "prior plan"). Adoption of the instant plan shall be
deemed to amend and supersede the prior plan and shall not be deemed to be a
termination thereof. In applying the provisions of Section 5.2 following
adoption of this plan, each participant in this plan on the effective date of
adoption of this plan who was a participant in the prior plan immediately before
such effective date shall have a vested percentage in his accrued benefit which
shall not be less than the percentage of his benefit in the prior plan which
would have been vested in him if the prior plan had continued in effect through
the adjustment date for the plan year in which the vested percentage is being
determined.
Section 16. Special Provisions Relating to Transfers From
---------- ---------------------------------------------
Qualified Plans:
---------------
With the written approval of the Committee in accordance with
procedures approved by the Committee, the Trustee shall receive and hold, as a
part of the trust fund, assets (hereinafter referred to as the "transferred
assets," which shall be deemed to include all increments allocable to such
transferred assets) transferred directly from the trustee or custodian of any
other retirement plan (hereinafter referred to as the "transferor plan") which
is qualified under Section
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401(a) of the Code. Such transferred assets may include cash or other types of
property. In applying the provisions of this Section 16, the following special
provisions shall apply:
16.1. The transferred assets and all rights to or derived
therefrom shall be at the time of the transfer and at all times thereafter fully
nonforfeitable and vested in the respective participants (and in the
proportions) to whom such transferred assets had been allocated under the
transferor plan.
16.2. The Trustee under this plan shall not be liable or
responsible for any acts or omissions in the administration of any transferor
plan and the trust thereunder of any other person or entity who was trustee,
custodian or other fiduciary under any such transferor plan, and the Trustee
shall be held harmless from such liability or responsibility.
16.3. The Trustee shall keep a separate and identifiable
account with respect to the transferred assets of each participant (which may be
commingled for investment purposes with other assets of the trust), designated
as the "direct transfer account." The direct transfer account of each
participant shall be adjusted in the manner specified in Section 6.
16.4. To the extent not inconsistent with the provision of
this Section 16, the Committee may promulgate rules or bylaws supplementing and
implementing the provisions of this Section 16.
Section 17. Rollovers:
---------- ---------
An employee who receives a distribution of his entire interest
from another retirement plan which is qualified under Section 401(a) of the Code
on the date of such distribution may, with the written consent of the Committee
and in accordance with procedures approved by the Committee, transfer all or a
part of such distribution to the Trustee under this plan. The amount so
transferred may include cash or other types of property. In applying the
provisions of this Section 17, the following special provisions shall apply:
17.1. The transfer to the Trustee must occur on or before the
60th day following the receipt by the employee of such distribution or, if such
distribution has previously been deposited in an individual retirement account
or individual retirement annuity (as defined in Section 408 of the Code), the
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transfer must occur on or before the 60th day following the receipt by the
employee of the balance to his credit under such individual retirement account
or individual retirement annuity.
17.2. The distribution made to the employee must be a
qualified total distribution within the meaning of Section 402(a)(5)(E)(i) of
the Code.
17.3. The amount transferred to the Trustee is limited to the
maximum rollover amount as provided in Section 402(a)(5)(B) of the Code.
17.4. The amount transferred to the Trustee shall be credited
to a separate account with respect to the employee, designated as the "rollover
account." With respect to each rollover account, the following special
provisions shall apply:
(a) Except as provided in paragraph (c) hereof, each rollover
account shall be adjusted in the manner specified in Section 6.
(b) Each employee having a rollover account shall have a
nonforfeitable interest therein.
(c) Except as otherwise provided in this Section 17, the
assets in the rollover account shall be administered by the Trustee in
the same manner as other trust assets. Assets of the rollover account
may be commingled for investment with other assets of the trust fund;
provided, that with respect to a rollover contribution made other than
on an adjustment date, such contribution shall not be commingled until
immediately following the next adjustment date, and for the period
preceding such adjustment date the employee's rollover account shall be
adjusted under Section 6 as if such account constituted the entire
trust fund.
17.5. If an employee who makes such a transfer is eligible to
participate in the plan but has not completed the participation requirements of
Section 1.25, his rollover account shall represent his sole interest in the plan
until he becomes a participant.
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Section 18. Trust Provisions:
---------- ----------------
18.1. Trustee's powers:
18.1.1. The Trustee shall receive, hold, manage, convert,
sell, exchange, invest, reinvest, disburse and otherwise deal with the
assets of the trust, including contributions made by the Employer and
employees to the trust and the income and profits therefrom, in the
manner and for the uses and purposes in the plan and as herein
provided. In the investment, reinvestment and management of the fund
constituting the trust, and subject to the provisions of Sections 8.1,
18.1.2 and 18.1.3, the Trustee is hereby authorized and empowered:
(a) To receive all rents, issues, dividends, income,
profits and properties of every nature due the trust, and to
hold or make distribution thereof in accordance with the terms
of the plan and this trust agreement.
(b) To retain the properties now or hereafter
received by the trust, or to dispose of them as and when
deemed advisable by public or private sale or exchange or
otherwise, for cash or upon credit, or partly upon cash and
partly upon credit, and upon such terms and conditions as
shall be deemed proper.
(c) To participate in any plan of liquidation,
reorganization, consolidation, merger, or other financial
adjustment of any corporation or business in which the trust
is or shall be financially interested, and to exchange any
property held in the trust for property issued under any such
plan.
(d) To invest or reinvest principal and income of the
funds belonging to the trust in (i) common or preferred stocks
or options to buy and sell such stocks, (ii) bonds, notes or
other securities (including commercial paper and other
short-term obligations), (iii) mutual funds, (iv) guaranteed
investment contracts issued by a legal reserve life insurance
company, (v) real or personal properties or interests therein,
(vi) cash equivalent deposits, certificates of deposit or
accounts (including such deposits or accounts issued by the
Trustee), or any combination of (i) through (vi), as shall
from time to time be approved by the Trustee, or to hold any
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part of such principal or income in cash as may from time to
time be determined by the Trustee.
(e) To hold any investment belonging to the trust in
bearer form, or to register and hold the same in the name of
the Trustee or in the name of its duly authorized nominee.
(f) To borrow for the benefit of the trust for such
periods of time and upon such terms and conditions as may be
deemed proper, any sum or sums of money, and to secure such
loans by mortgage or pledge of any property belonging to the
trust, without personal liability therefor.
(g) To execute such deeds, leases, contracts, bills
of sale, notes, proxies and other instruments in writing as
shall be deemed requisite or desirable in the proper
administration of the trust.
(h) To compromise, arbitrate or otherwise adjust or
settle claims in favor of or against the trust, except to the
extent the plan provides otherwise with respect to claims for
benefits under the plan.
(i) To make distributions to participants or
their beneficiaries at the direction of the Committee.
(j) To renew or extend or participate in the renewal
or extension of any mortgage, upon such terms as may be deemed
advisable, and to agree to a reduction in the rate of interest
on any mortgage or to any other modification or change in the
terms of any mortgage or of any guarantee pertaining thereto,
in any manner and to any extent that may be deemed advisable
for the protection of the trust fund or the preservation of
the value of any investment of the trust fund, to waive any
default, whether in the performance of any covenant or
condition of any mortgage or in the performance of any
guarantee, or to enforce any such default in such manner and
to such extent as may be deemed advisable, to exercise and
enforce any and all rights of foreclosure, to bid in property
on foreclosure, to take a deed in lieu of foreclosure with or
without paying a consideration therefor, and in connection
therewith to release the obligation on
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the bond secured by such mortgage, and to exercise and enforce
in any action, suit or proceeding at law or in equity any
rights or remedies in respect to any mortgage or guarantee.
(k) To repair, alter or improve any buildings which
may be on any real estate forming part of the trust fund or to
erect entirely new structures thereon.
(l) To exercise the right to vote any securities held
in the trust, or to grant proxies to vote such securities,
except to the extent that the right to vote any such
securities may specifically be designated to another
hereunder.
(m) To make loans from the trust to participants in
accordance with the provisions of Section 4.12.
(n) To receive and hold, as part of the trust fund,
direct transfers (as described in Section 16) and rollovers,
(as described in Section 17), subject to all limitations and
requirements set forth in the plan.
(o) To acquire life insurance policies in accordance
with Section 20 of the plan.
(p) To permit participants to direct the investments
and reinvestments of the amounts credited to their accounts in
accordance with the provisions of Section 23.
(q) To transfer, at any time and from time to time, a
portion of the assets held by it pursuant to this plan to any
common trust fund within the meaning of Section 584 of the
Code or to any trust which is qualified under Section 401(a)
and exempt under Section 501(a) of the Code, and which common
trust fund is maintained as a medium for the pooling of funds
of pension and profit-sharing trusts for diversifying
investments. The terms and provisions of any such trust shall,
upon such transfer and execution, be incorporated by reference
into this plan to the extent of the assets so transferred.
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(r) To transfer monies of this trust to a separate
fund or funds maintained solely for the assets of the trust
established with respect to the plan maintained by the
Employer, which fund or funds shall not be commingled, pooled
or consolidated for investment with assets of another
qualified trust. Each such fund shall be referred to herein as
an "Investment Fund" and collectively as "Investment Funds."
Assets transferred to an Investment Fund shall be invested and
reinvested by the Trustee in accordance with the provisions of
this Section 18.
(s) To do all acts and to exercise any and all
powers, although not specifically set forth herein, as the
Trustee may deem are for and in the best interest of the plan,
the participants and beneficiaries.
18.1.2. The Board may at any time direct the Trustee to
segregate all or a specified portion of the trust assets into a
separate fund (the "directed fund") and invest it in accordance with
the directions of one or more investment managers appointed by the
Board, subject to the following provisions:
(a) Any investment manager so appointed shall (i) be
registered as an investment advisor under the Investment
Advisers Act of 1940; (ii) be a bank, as defined in the
Investment Advisers Act of 1940; or (iii) be an insurance
company qualified under the laws of more than one state to
manage, acquire and dispose of assets of the trust under the
plan.
(b) The Board shall deliver to the Trustee a copy of
a written acknowledgment by the investment manager that it
meets the requirements of paragraph (a), that it is a
fiduciary with respect to the plan, and that it has accepted
appointment as an investment manager. The Trustee shall be
protected in assuming that the appointment of an investment
manager remains in effect until the Trustee shall be notified
in writing by the Board that such investment manager has been
removed or has resigned.
(c) The Trustee shall invest and reinvest the
directed funds only to the extent and in the manner directed
by the investment manager. If the Trustee has not received
instructions from an investment man-
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ager with respect to the investment of all or a part of the
directed fund, the Trustee shall invest such amounts in
interest bearing obligations having maturities of 90 days or
less, or in a common fund comprised substantially of such
obligations, until directed otherwise by the investment
manager.
(d) Any investment manager may from time to time
issue orders for the purchase or sale of securities directly
to a broker or dealer, and the Trustee, upon direction from
the investment manager, shall execute and deliver appropriate
trading authorization. Written notice of the issuance of each
order and of execution of each order shall be authority to the
Trustee to receive securities purchased against payment
therefor and to deliver securities sold against receipt of the
proceeds therefrom, as the case may be.
(e) Upon removal or resignation of an investment
manager, and pending appointment of a substitute investment
manager, the Trustee shall invest any uninvested cash in the
manner described in paragraph (c), and shall not sell or
liquidate any investments of the directed fund.
(f) No plan fiduciary other than an investment
manager shall be liable for any act or omission of such
investment manager unless such fiduciary participates
knowingly in, or knowingly undertakes to conceal, such act or
omission which such fiduciary knows to be a breach of the
fiduciary responsibility of the investment manager with
respect to the plan. Further, no plan fiduciary other than an
investment manager shall be under any obligation to invest or
otherwise manage the assets of the plan that are subject to
the management of the investment manager and, to the maximum
extent permitted by ERISA, the plan fiduciaries other than the
investment manager shall have no liability or responsibility
for acts or failures to act as directed by the investment
manager, or, subject to paragraph (c), failing to act in the
absence of any such direction.
18.1.3. Notwithstanding any other provision of Section 18, the
following provisions shall apply:
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(a) Subject to the requirements of Section 23, each
participant in the plan may direct the Trustee by acting
through the Committee with respect to the investment or
reinvestment of all or any portion of the amount allocated to
his benefit under the plan; and
(b) Subject to the provisions of Section 8.1 and
paragraph (a) immediately preceding, the Committee may direct
the Trustee with respect to the investment or reinvestment of
assets of the trust, including contributions not yet invested,
in one or more common trust funds described in Section
18.1.1(q).
18.1.4. Notwithstanding any other provisions of Section 18, in
no event shall the Trustee exercise any powers under the plan in a
manner that will constitute a prohibited transaction as defined in
Section 4975 of the Code and in Section 406 of ERISA.
18.1.5. The Trustee shall be fully protected in acting upon
any instrument, certificate, letter or other documents which the
Trustee believes to be genuine. No person dealing with the Trustee
shall be required to inquire into the decisions or authorities of the
Trustee or to see to the application by the Trustee of any properties
involved in any transaction; provided, that this provision shall not
relieve any plan fiduciary dealing with the Trustee from fulfilling his
fiduciary duty. For the purposes of this plan, the "fiduciary duty" of
the plan fiduciaries (including the Trustee) shall include the duties
specified in Sections 8.1 and 9, the obligation not to enter into
prohibited transactions as described in Section 18.1.4, and all other
duties imposed on the respective plan fiduciaries under ERISA.
18.1.6. In the management of the trust fund, the Trustee may
employ agents and delegate to them such ministerial and limited
discretionary duties as the Trustee shall see fit, and the Trustee
shall not be responsible for any loss occasioned by any such agent
unless the Trustee shall commit a breach of its fiduciary duty (as
defined in Section 18.1.5) in the designation of such agent, in
establishing or implementing a procedure for making such designation,
or in continuing such designation in effect. The Trustee may consult
with counsel of its own selection, who may also be of counsel to the
Sponsor. The
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reasonable compensation or fees charged by all such persons for their
services shall be deemed to be expenses of administration of the trust.
18.1.7. All real and personal property taxes, income taxes and
other taxes of any and all kinds whatsoever upon or in respect of the
trust hereby created or any money, income or property forming a part
thereof, and all expenses actually and properly incurred in the
administration of the trust, shall be paid by the Trustee out of
principal or income of the trust, as the Trustee shall determine;
provided, that the Employer may, in the discretion of the Board, pay
any of the expenses incurred in the administration of the trust. The
payment out of the trust of any taxes and expenses authorized in this
Section 18.1.7, and the payment of all other costs, expenses or
compensation authorized by this plan to be paid out of the trust, shall
be deemed to be for the exclusive benefit of the participants under the
plan.
18.2. Accountings: The Trustee shall keep accurate and
detailed accounts of all investments, receipts, disbursements and other
transactions and proceedings of the trust and all such accounts and other
records relating thereto shall be open to inspection and audit at all reasonable
times by any person designated by the Board or the Committee. Within 120 days
after the end of each plan year, and at such other times as the Board may
reasonably require, the Trustee shall prepare and deliver to the Committee a
statement of its accounts and proceedings for such plan year. Each such
statement shall be certified as accurate by the Trustee and, with respect to the
plan year in question, shall contain the following:
(a) A statement of assets and liabilities aggregated by
categories and valued at fair market value as of the close of the plan
year in question.
(b) A statement setting forth changes in the net assets
available for plan benefits, including a statement of receipts and
disbursements during the plan year, aggregated by general source and
application.
(c) A statement setting forth all assets held for investment
purposes aggregated and identified by issuer, borrower, lessor or
similar party to the transaction, maturity date, rate of interest,
collateral, par or maturity value, cost and current fair market value.
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(d) A statement setting forth all loans or fixed income
obligations which were in default as of the close of the plan year or
were classified during the plan year as uncollectible, and such
detailed information with respect thereto as is required by ERISA to be
included in the annual report to be filed with the Internal Revenue
Service.
(e) A statement setting forth all leases which were in default
as of the close of the plan year or were classified during the plan
year as uncollectible, and such detailed information with respect
thereto as is required by ERISA to be included in the annual report to
be filed with the Internal Revenue Service.
(f) If some or all of the assets of the trust are held in a
guaranteed investment contract issued by a legal reserve life insurance
company, such information as is required by the plan administrator to
comply with the requirement to file an annual report with the Internal
Revenue Service.
(g) A statement setting forth each reportable transaction (as
defined in ERISA), including such detailed information with respect
thereto as is required by ERISA to be included in the annual report to
be filed with the Internal Revenue Service.
(h) If some or all of the assets of the trust are held in a
common or collective trust maintained by the Trustee, the most recent
annual statement of assets and liabilities of said common or collective
trust.
(i) Such other information as may reasonably be required by
the plan administrator to comply with the requirements to file an
annual report with the Internal Revenue Service.
18.3. Compensation of Trustee: As compensation for its
services hereunder, the Trustee shall be entitled to retain or receive out of
the trust fund (subject to the provisions of Section 18.1.6) compensation in
accordance with its usual schedule of fees in effect at the time of performance
of such services, but not in excess of reasonable compensation for such
services.
18.4. Responsibilities and scope of duties of Trustee: The
Trustee hereby agrees to hold in trust and administer the fund hereunder,
subject to all of the terms and conditions
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of the plan, and to render an annual accounting as provided in Section 18.2. The
Trustee shall act in accordance with written instructions or directions of the
Committee made in conformity with ERISA and the terms of the plan, and signed by
an authorized representative of the Committee. In carrying out such instructions
or directions, the Trustee shall not be obligated to inquire into the purpose or
purposes for such instructions or directions or whether such instructions or
directions are consistent with the plan or are otherwise proper.
18.5. Failure to direct Trustee: If at any time the Employer
or the Committee shall be incapable for any reason of giving instructions,
directions or authorizations to the Trustee as herein provided, the Trustee may
act without such instructions, directions or authorizations as it, in its
discretion, shall deem appropriate or advisable under the circumstances for
carrying out the provisions of the plan.
Section 19. Qualification of Plan:
---------- ---------------------
19.1. If the plan is not a standardized form plan, the
Employer shall promptly submit the plan (including the Adoption Agreement and
all necessary supporting documents), and all amendments permitted under Section
8.1.2 which are made by the Employer to the plan, to the Internal Revenue
Service with a request for a determination letter that the plan as applied to
the Employer meets the qualification requirements of Section 401(a) of the Code
and that the trust constituting a part of the plan is exempt under Section
501(a) of the Code.
19.2. Should the Internal Revenue Service determine pursuant
to such initial submission that the plan as applied to the Employer does not so
qualify, the following procedures shall be followed:
19.2.1. Notwithstanding any other provisions of the plan, the
plan as applied to the Employer shall be deemed cancelled, the Employer
shall not be a party to the plan, and no employee of the Employer or
person claiming under any such employee shall have any right or claim
to any asset or benefit of the trust fund, except as provided in
Section 19.2.3.
19.2.2. The Trustee shall liquidate the trust of the Employer
and, after paying or making provision for the compensation of the
Trustee and any expenses of admini-
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stration or liquidation of the trust, shall pay the balance of the
proceeds of such liquidation to the Employer.
19.2.3. The Employer shall refund to each employee the amount
of any contribution made by him (or, if less, the amount of such
contribution then in his account).
19.3. The Employer shall promptly advise the Trustee should it
be notified by the Internal Revenue Service that the plan as applied to the
Employer is no longer qualified as specified in Section 19.1. If the plan as
applied to the Employer is disqualified, such plan will no longer participate in
this master plan and will be considered an individually designed plan. In all
such cases all sums then held in the trust for the account of the Employer shall
be segregated or otherwise disposed of for the exclusive benefit of the
employees of the Employer within 30 days after final determination of
disqualification.
Section 20. Purchase of Insurance Policies:
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Notwithstanding any other provisions of the plan, if permitted
by the Adoption Agreement, each participant, acting through the Committee, may
direct the Trustee to invest a portion of his Employer contribution account, and
all or a portion of his employee contribution account or mandatory contribution
account (the "participant's contribution accounts"), if any, in one or more life
insurance policies (including ordinary or individual term life insurance
policies, or any combination thereof) issued on the life of the participant by a
legal reserve life insurance company, subject to the following provisions:
20.1. Premiums paid on each such policy shall be paid from the
trust and charged first against the participant's Employer contribution account,
subject to the limitations of Section 20.2. Any premiums not so charged to his
Employer contribution account shall be charged in the following order to his
mandatory contribution account or employee contribution account, if any. The
dividends and any other policy credits shall be used to reduce the annual
premiums on such policy.
20.2. The aggregate of the premiums paid on all ordinary life
insurance policies at any time charged to the participant's Employer
contribution account shall be less than 50% of the aggregate of the Employer
contributions allocated to such account; the aggregate of the premiums paid on
all indi-
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vidual term life insurance policies (including universal life insurance) at any
time charged to the participant's employer contribution account shall be less
than 25% of the aggregate of the Employer contributions allocated to such
account; and the sum of the amount charged to the participant's Employer
contribution account for payment of the premiums with respect to individual term
life insurance policies and one-half of the premiums with respect to ordinary
life insurance policies shall not exceed 25% of the aggregate of the Employer
contributions allocated to such account. No part of the participant's deductible
contribution account shall be used to purchase life insurance. For purposes of
this Section 20, "ordinary life insurance policies" are policies with both
nondecreasing death benefits and nonincreasing premiums.
20.3. The Trustee shall apply for and will be the owner of any
insurance contract purchased under the plan. Such insurance contract must
provide that proceeds shall be payable to the Trustee, however, the Trustee
shall be required to pay over all such proceeds to the participant's designated
beneficiary in accordance with the provisions of Section 4.6 of the plan. A
participant's spouse shall be the designated beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Section 4.7.3(d). Under no circumstances shall the trust retain any part of the
proceeds. In the event there shall be a conflict between the terms of any policy
and the terms of the plan, the terms of the plan shall control.
20.4. Subject to the requirements of Section 4.7, as of the
adjustment date as of which distribution to a participant shall commence as
provided in Section 4, the Trustee, as directed by the Committee, shall either
convert any ordinary life insurance policy into cash or distribute such policy
to the participant. If such policy is converted into cash, such cash shall be
credited to his Employer contribution account, or participant's contribution
accounts, in the same proportion as aggregate premium payments were charged to
each respective account, and paid or applied in accordance with the provisions
of the plan applicable to the payment of benefits. The issue date of each such
policy shall be an adjustment date.
20.5. Notwithstanding any other provision of the plan, the
insured participant shall have a fully vested interest in each such policy. If
the participant shall die at a time when one or more policies with respect to
him are held by the trust, the proceeds of each such policy shall be added to
any other amounts payable with respect to him under the plan,
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and such sum (subject to adjustment under Section 6) shall constitute part of
his accrued benefit.
20.6. If for any reason a premium on a policy cannot be paid,
the Trustee, as directed by the Committee in a nondiscriminatory manner, shall:
(i) convert the policy into a paid up policy; (ii) surrender the policy; (iii)
sell the policy to the participant for its then net cash surrender value; or
(iv) borrow against the loan value of the policy the amount necessary to pay the
premium due, which loan plus interest shall be a charge against the loan value
(or death proceeds) of such policy. If an insured participant shall elect not to
continue in force a policy issued with respect to his life, the Trustee, as
directed by the Committee, shall either surrender the policy or sell the policy
to the participant for its then net cash surrender value. A paid up policy shall
be held in the trust for future distribution to the insured participant or his
beneficiary in accordance with the applicable provisions of the plan. The
proceeds of any policy which is surrendered or sold to the participant shall be
credited to the participant's account. Any policy loan may be repaid or may be
continued by the Trustee, as directed by the Committee in a nondiscriminatory
manner, subject to the provisions of Section 20.2.
20.7. In lieu of acquiring a new policy with respect to a
participant, the Trustee may purchase from such participant any life insurance
policy then outstanding on his life; provided, such purchase shall satisfy the
fiduciary standards described in Section 8.1 and the consideration paid for such
purchase shall not exceed the lesser of (i) the cash surrender value of such
policy or (h) the then accrued benefit of such participant. In no event shall
the Trustee assume any loan, mortgage or similar lien to which such policy shall
be subject.
20.8. To the extent not inconsistent with the foregoing
provisions of this Section 20, the Committee may direct the Trustee with respect
to any other matters involving any such policy under the plan.
Section 21. Special Top-Heavy Provisions:
---------- ----------------------------
The following special provisions shall apply and supersede any
conflicting provisions in the plan or Adoption Agreement with respect to any
plan year beginning after December 31, 1983 in which the plan is determined to
be top-heavy:
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21.1. Definitions: 'Me following definitions shall apply for
purposes of this Section 21:
21.1.1. "Determination date" shall mean for any plan year
subsequent to the first plan year, the last day of the preceding plan
year. For the first plan year of the plan, the last day of that year
shall be the determination date.
21.1.2. "Key employee" shall mean any employee or former
employee (and the beneficiaries of such employee) who at any time
during the determination period was an officer of the Employer if such
individual's annual compensation exceeds 150% of the dollar limitation
under Section 415(b)(1)(A) of the Code, an owner (or considered an
owner under Section 318 of the Code) of one of the 10 largest interests
in the Employer if such individual's compensation exceeds 100% of the
dollar limitation under Section 415(c)(1)(A) of the Code, a 5 % owner
of the Employer, or a 1% owner of the Employer who has an annual
compensation of more than $150,000. Annual compensation means
compensation as defined in Section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under
Sections 125, 402(a)(8), 402(h) or 403(b) of the Code. The
determination period is the plan year containing the determination date
and the preceding 4 plan years. The determination of who is a key
employee will be made in accordance with Section 416(i)(1) of the Code
and the regulations thereunder.
21.1.3. "Permissive aggregation group" shall mean the required
aggregation group of plans plus any other plan or plans of the Employer
which, when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Sections 401(a)(4) and
410 of the Code.
21.1.4. "Present value" shall mean the present value
determined by reference to the interest and mortality rates specified
in Adoption Agreement.
21.1.5. "Required aggregation group" shall mean (a) each
qualified plan of the Employer in which at least one key employee
participates or participated at any time during the determination
period (regardless of whether the plan has terminated), and (b) any
other qualified plan of
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the Employer which enables a plan described in (a) to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
21.1.6. "Top-heavy plan" shall mean, for any plan year
beginning after December 31, 1983, this plan if any of the following
conditions exists:
(a) The top-heavy ratio for this plan exceeds 60% and
this plan is not part of any required aggregation group or
permissive aggregation group of plans.
(b) This plan is a part of a required aggregation
group of plans but not part of a permissive aggregation group
and the top-heavy ratio for the group of plans exceeds 60%.
(c) This plan is a part of a required aggregation
group and part of a permissive aggregation group of plans and
the top-heavy ratio for the permissive aggregation group
exceeds 60%.
21.1.7. "Top-heavy ratio" shall mean the following:
(a) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) 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 for this plan alone or for the required or
permissive aggregation group as appropriate is a fraction, the
numerator of which is the sum of the accrued benefits of all
key employees as of the determination date(s) [including any
part of any accrued benefit distributed in the 5 year period
ending on the determination date(s)], and the denominator of
which is the sum of all accrued benefits [including any part
of any accrued benefit distributed in the 5 year period ending
on the determination date(s)], both computed in accordance
with Section 416 of the Code and the regulations thereunder.
Both the numerator and denominator of the top-heavy ratio are
increased to reflect any contribution not actually made as of
the determination date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
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(b) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plan) and the Employer maintains or has maintained one or more
defined benefit plans which during the 5 year period ending on
the determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of accrued benefits under the aggregated defined
contribution plan or plans for all key employees, determined
in accordance with paragraph (a) above, and the present value
of accrued benefits under the aggregated deferred benefit plan
or plans for all key employees as of the determination
date(s), and the denominator of which is the sum of the
accrued benefits under the aggregated defined contribution
plan or plans for all participants, determined in accordance
with paragraph (a) above, and the present value of accrued
benefits under the defined benefit plan or plans for all
participants as of the determination date(s), all determined
in accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefits under a defined benefit plan
in both the numerator and denominator of the top-heavy ratio
are increased for any distribution of an accrued benefit made
in the 5-year period ending on the determination date.
(c) For purposes of paragraphs (a) and (b) above, the
value of account balances and the present value of accrued
benefits will be determined as of the most recent valuation
date that falls within or ends with the 12 month period ending
on the determination date, except as provided in Section 416
of the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account
balances and accrued benefits of a participant (1) who is not
a key employee but who was a key employee in a prior year, or
(2) who has not been credited with at least one hour of
service with any employer maintaining the plan 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 will be made in accordance with Section
416 of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for
purposes of com-
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puting the top-heavy ratio. When aggregating plans, the value
of account balances and accrued benefits will be calculated
with reference to the determination dates that fall within the
same calendar year. The accrued benefit of a participant other
than a key employee shall be determined under (a) the method,
if any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the Employer, or (b) if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Section 411(b)(1)(C) of the Code.
21.1.8. "Valuation date" shall mean the adjustment date
defined in Section 1.3.
21.2. Top-heavy requirements: Notwithstanding any other
provisions of the plan, the plan must satisfy the following requirements for any
plan year in which the plan is a top-heavy plan:
21.2.1. Minimum allocation requirements: Except as otherwise
provided in (a) and (b) below, the Employer contributions and
forfeitures allocated on behalf of any participant who is not a key
employee shall not be less than the lesser of 3% of such participant's
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 and forfeitures (as a
percentage of the first $200,000 of the key employee's compensation)
allocated on behalf of any key employee for that year. The minimum
allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other plan provisions, the participant would not otherwise be entitled
to receive an allocation, or would have received a lesser allocation
for the year, because of (i) the participant's failure to complete
1,000 hours of service (or any equivalent provided in the plan), (ii)
the participant's failure to make mandatory employee contributions to
the plan, or (iii) compensation less than a stated amount. For purposes
of computing the minimum allocation, compensation shall mean
compensation as defined in Section 1.10 of the plan. The provisions of
this Section 21.2.1 shall not apply: (a) to any participant who was not
employed by the Employer on the last day of the plan year, or (b) to
any participant to the extent the participant is covered under any
other plan or plans of
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the Employer and the Employer has provided in Section 21.2.1 of the
Adoption Agreement that the minimum allocation or benefit requirement
applicable to top-heavy plans will be met in the other plan or plans.
The minimum allocation required (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. Notwithstanding
the foregoing, if this plan and any other defined contribution plan of
the Employer are paired plans, the Employer shall provide a minimum
allocation under one such plan equal to 3% of compensation for each
non-key employee who is entitled to a minimum allocation under each of
the paired plans.
21.2.2. Minimum vesting requirements: For any plan year in
which this plan is top-heavy, one of the minimum vesting schedules as
elected by the Employer in the Adoption Agreement shall automatically
apply to the plan. The minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code except those
attributable to employee contributions, including benefits accrued
before the effective date of Section 416 and benefits accrued before
the plan became top-heavy. Further, no reduction in vested benefits may
occur in the event the plan's status as top-heavy changes for any plan
year. However, this Section 21.2.2 does not apply to the accrued
benefits of any employee who does not have an hour of service after the
plan has initially become top-heavy and such employee's accrued benefit
attributable to Employer contributions and forfeitures will be
determined without regard to this section.
Section 22. Limitations on Allocations:
---------- --------------------------
Limitations on allocations: In administering the plan, the
following special provisions shall apply:
22.1. The following provisions shall apply if the participant
does not participate in, and has never participated in, another qualified plan,
welfare benefit fund defined in Section 419(e) of the Code, or an individual
medical account defined in Section 415(l)(2) of the Code, maintained by the
Employer, which provides an annual addition defined in Section 22.5.1:
22.1.1. The amount of annual additions which may be credited
to the participant's account for any limitation
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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 shall be reduced so that the annual additions
for the limitation year will equal the maximum permissible amount.
22.1.2. Prior to determining the participant's actual
compensation for the limitation year, the Employer may determine the
maximum permissible amount for a participant on the basis of a
reasonable estimation of the participant's compensation for the
limitation year, uniformly determined for all participants similarly
situated.
22.1.3. As soon as administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year shall be determined on the basis of the participant's actual
compensation for the limitation year.
22.1.4. If pursuant to Section 22.1.3 or as a result of an
allocation of forfeitures there is an excess amount, the excess will be
disposed of as provided in the Adoption Agreement.
22.2. The following provisions shall apply if, in addition to
this plan, the participant is covered under another qualified master or
prototype defined contribution plan, a welfare benefit fund defined in Section
419(e) of the Code, or an individual medical account defined in Section
415(l)(2) of the Code, maintained by the Employer, which provides an annual
addition as defined in Section 22.5.1 during any limitation year:
22.2.1. The annual additions which may be credited to a
participant's account under this plan for any such limitation year
shall not exceed the maximum permissible amount reduced by the annual
additions credited to a participant's account under the other plans and
welfare benefit funds for the same limitation year. If the annual
additions with respect to the participant under other defined
contribution plans and welfare benefit funds 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
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the limitation year to exceed this limitation, the amount contributed
or allocated shall 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 defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than the maximum
permissible amount, no amount shall be contributed or allocated to the
participant's account under this plan for the limitation year.
22.2.2. Prior to determining the participant's actual
compensation for the limitation year, the Employer may determine the
maximum permissible amount for a participant in the manner described in
Section 22.1.2.
22.2.3. As soon as administratively feasible after the end of
the limitation year, the maximum permissible amount for the limitation
year shall be determined on the basis of the participant's actual
compensation for the limitation year.
22.2.4. If, pursuant to Section 22.2.3 or as a result of the
allocation of forfeitures, a participant's annual additions under this
plan and such other plans would result in an excess amount for a
limitation year, the excess amount shall be deemed to consist of the
annual additions last allocated, except that annual additions
attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual
allocation date.
22.2.5. If an excess amount was allocated to a participant on
an adjustment date of this plan which coincides with an adjustment date
of another plan, the excess amount attributed to this plan will be the
product of (A) multiplied by (B), where (A) is the total excess amount
allocated as of such date, and (B) is the ratio of (i) the annual
additions allocated to the participant for the limitation year as of
such date under this plan to (ii) the total annual additions allocated
to the participant for the limitation year as of such date under this
and all other qualified master or prototype defined contribution plans.
22.2.6. Any excess amount attributed to this plan will be
disposed in the manner described in Section 22.1.4.
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22.3. If the participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a master or
prototype plan, annual additions which may be credited to the participant's
account under this plan for any limitation year shall be limited in accordance
with Sections 22.2.1 through 22.2.6 as though the other plan were a master or
prototype plan unless the Employer provides other limitations in Section 22 of
the Adoption Agreement.
22.4. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any participant in this plan, the sum of
the participant's defined benefit plan fraction and defined contribution plan
fraction shall not exceed 1.0 in any limitation year. The annual additions which
may be credited to the participant's account under this plan for any limitation
year shall be limited in accordance with Section 22 of the Adoption Agreement.
22.5. Definitions: For purposes of this Section 22, the
following definitions shall apply:
22.5.1. "Annual additions" shall mean the sum of the following
amounts credited to a participant's account for the limitation year:
(a) Employer contributions;
(b) forfeitures; and
(c) nondeductible employee contributions.
For this purpose, any excess amount applied under Sections 22.1.4 or
22.2.6 in the limitation year to reduce Employer contributions will be
considered annual additions for such limitation year. Amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Section 415(l)(1) of the Code, which is part of a pension or
annuity benefit plan maintained by the Employer, shall be 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, as defined in Section 419(e) of the Code, maintained by the
Employer, are treated as annual additions to a defined contribution
plan.
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22.5.2. "Compensation" shall mean a participant's earned
income, wages, salaries, and fees for professional services and other
amounts received for personal services actually rendered in the course
of employment with the Employer maintaining the plan (including, but
not limited to, commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the following:
(a) Employer contributions to a plan of deferred
compensation which are not includible in the employee's gross
income for the taxable year in which contributed, Employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the employee, or
any distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or
property) held by the employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(d) Other amounts which receive special tax benefits,
contributions made by the Employer (whether or not under a
salary reduction agreement) toward the purchase of an annuity
described in Section 403(b) of the Code (whether or not the
amounts are actually excludable from the gross income of the
employee).
For purposes of applying the limitations of this Section 22,
compensation for a limitation year is the compensation actually paid or
includible in gross income during such year. Notwithstanding the
preceding sentence, compensation for a participant in a defined
contribution plan who is permanently and totally disabled (as defined
in Section 22(e)(3) of the Code) is the compensation such participant
would have received for the limitation year if the participant had been
paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the
disabled participant may be taken into account only if the participant
is not a highly compensated employee (as defined in Section
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414(q) of the Code) and contributions made on behalf of such
participant are nonforfeitable when made.
22.5.3. "Defined benefit fraction" shall mean a fraction, the
numerator of which is the sum of the participant's projected annual
benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of which is
the lesser of 125% of the dollar limitation determined for the
limitation year under Sections 415(b) and (d) of the Code or 140% of
the highest average compensation, including any adjustments under
Section 415(b) of the Code. Notwithstanding the above, if the
participant was a participant as of the first day of the first
limitation year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction shall not be
less than 125% of the sum of the annual benefits under such plans which
the participant had accrued as of the close of the last limitation year
beginning before January 1, 1987, disregarding any changes in the terms
and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415 of the Code for all
limitation years beginning before January 1, 1987.
22.5.4. "Defined contribution dollar limitation" shall mean
$30,000 or, if greater, 25 % of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for the
limitation year.
22.5.5. "Defined contribution fraction" shall mean a fraction,
the numerator of which is the sum of the annual additions to the
participant's account under all the defined contribution plans (whether
or not terminated) maintained by the Employer for the current and all
prior limitation years (including the annual additions attributable to
the participant's nondeductible employee contributions to all defined
benefit plans, whether or not terminated, maintained by the Employer,
and the annual additions attributable to all welfare benefit funds
defined in Section 419(e) of the Code, and individual medical accounts
defined in Section 415(l)(2) of the Code, maintained by the Employer),
and the denominator of which is the sum of the maximum aggregate
amounts for the current and all prior limitation years of service with
the Employer (regardless of whether a defined contribution plan was
maintained by
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the Employer). The maximum aggregate amount in any limitation year is
the lesser of 125% of the dollar limitation in effect under Section
415(c)(1)(A) of the Code or 35% of the participant's compensation for
such year. If the employee was a participant as of the end of the first
day of the first limitation year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of this fraction 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 (A) multiplied by
(B), where (A) is the excess of the sum of the fractions over 1.0, and
(B) is the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is calculated using
the fractions as they would be computed as of the end of the last
limitation year beginning before January 1, 1987, and disregarding any
changes in the terms and conditions of the plan made after May 5, 1986,
but using the 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.
22.5.6. "Employer" shall mean (for purposes of this Section
22) the Employer that adopts this plan, and all affiliated employers.
22.5.7. "Excess amount" shall mean the excess of the
participant's annual additions for the limitation year over the maximum
permissible amount.
22.5.8. "Highest average compensation" shall mean the average
compensation for the 3 consecutive years of service with the Employer
that produces the highest average. A year of service with the Employer
is the 12 consecutive month period defined in Section 1.37.
22.5.9. "Limitation year" shall mean a calendar year or the 12
consecutive month period elected by the Employer in the Adoption
Agreement. All qualified plans maintained by 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.
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22.5.10. "Master or prototype plan" shall mean a plan which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
22.5.11. "Maximum permissible amount" shall mean the maximum
annual addition that may be contributed or allocated to a participant's
account under the plan for any limitation year, which shall not exceed
the lesser of (a) the defined contribution dollar limitation, or (b)
25% of the participant's compensation for the limitation year. The
compensation limitation referred to in clause (b) of the preceding
sentence shall not apply to any contribution for medical benefits
(within the meaning of Sections 401(h) or 419A(f)(2) of the Code) which
is otherwise treated as an annual addition under Section 415(l)(1) or
419A(d)(2) of the Code. 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 shall not
exceed the defined contribution dollar limitation multiplied by the
following fraction:
Number of months
in the short limitation year
----------------------------
12
22.5.12. "Projected annual benefit" shall mean the annual
retirement benefit (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) to which the
participant would be entitled under the terms of the plan assuming:
(a) the participant will continue employment
until normal retirement age under the plan (or current age,
if later), and
(b) the participant's compensation for the current
limitation year and all other relevant factors used to
determine benefits under the plan will remain constant for all
future limitation years.
Section 23. Participant Directing Investment:
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Notwithstanding any other provisions of the plan, to the
extent permitted by the Adoption Agreement, each partici-
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pant having an amount to his credit under the plan may, acting through the
Committee, direct the Trustee as to the investment or reinvestment of his
account subject to the following provisions:
23.1. If elected by the Employer in the Adoption Agreement and
subject to the provisions of Section 23.1.7, the following provisions shall
apply:
23.1.1. As provided in this Section 23. 1, a participant shall
be entitled to direct the Trustee as to the investment and reinvestment
of the amount credited to his account among the separate funds within
the Diversified Funds [subject to the limitations in Section
18.1.1(q)], the Self-Employed Funds [subject to the limitations in
Section 18.1.1(r)], or any Investment Fund [subject to the limitations
in Section 18.1.1(s)]. Each such fund of the Diversified Funds,
Self-Employed Funds or Investment Fund shall be referred to herein as a
"Directed Investment Fund."
23.1.2. With respect to each participant so directing the
Trustee, the Committee shall keep with respect to the amount to his
credit in each Directed Investment Fund accounts subsidiary to each of
his separate accounts described in Section 1.1. Each of such subsidiary
accounts shall be referred to as a "fund account."
23.1.3. Except as otherwise specifically provided herein, each
fund account shall be adjusted as of each adjustment date in the manner
provided in the applicable provisions of Section 6, as if it were the
entire account of the participant to which it is subsidiary, with
respect to distributions and forfeitures allocated to it and with
respect to its share of the net income or net loss of the Directed
Investment Fund of which it is a part. Distributions from the accounts
of the participant, any forfeitures allocated thereto, and any amounts
forfeited by such participant under Section 5.3 due to a termination of
service, shall be allocated by the Trustee among the appropriate fund
accounts in the same manner as any Employer contribution would be
allocable among such fund accounts.
23.1.4. By written notice to the Committee on a form approved
by the Trustee at least 15 days prior to any adjustment date, a
participant shall be entitled to designate one or more of the Directed
Investment Funds with respect to which there shall be credited to his
appropriate
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fund account all or a specified percentage of any contribution
allocable to him as of such adjustment date; provided that such
specified percentage shall be a whole number percent from 1-100%. Such
designation shall remain in effect for each succeeding adjustment date
unless the participant shall file a timely application providing for a
different designation with respect to any such succeeding adjustment
date. If for any reason a participant shall not have made an effective
designation with respect to the entire contribution allocable to him as
of any adjustment date, such contribution for which no designation was
made shall be invested by the Trustee subject to the direction of the
Committee.
23.1.5. By written notice to the Committee on a form approved
by the Trustee at least 15 days prior to any adjustment date, a
participant shall be entitled to direct that all or specified
percentage (which shall be a whole number percent from 1-100%) of the
amount credited to any of his accounts or fund accounts be transferred
to any other appropriate fund account as of such adjustment date.
23.1.6. The Committee shall notify the Trustee of all
directions made in accordance with Section 23.1.4 and 23.1.5 as soon as
practicable following their receipt.
23.1.7. The Trustee shall have and may exercise all powers
necessary or advisable in order to implement the provisions of this
Section 23. 1. To the extent approved by the Trustee, the Committee may
promulgate rules or bylaws supplementing and implementing the
provisions of this Section 23.1. If it is not practicable for the
Trustee to effect the transfer of funds on any date provided in this
Section 23.1, the Trustee shall effect such transfer on the first
practicable date thereafter.
23.2. If elected by the Employer (which is not an
unincorporated employer) in the Adoption Agreement and subject to the provisions
of Section 23.2.10, the following provisions shall apply:
23.2.1. As provided in this Section 23.2, a participant who is
fully vested in his accrued benefit shall be entitled to direct the
Trustee as to the investment and reinvestment of his account to the
extent not so directed under Section 23.1.
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23.2.2. Each participant desiring to direct the investment of
his account must file written notice of his election with the Committee
on a form approved by the Trustee at least 15 days prior to the
adjustment date with respect to which such election is to be effective.
The Committee shall provide the Trustee with a copy of the election
form as soon as practicable following its receipt. On or after the date
such election becomes effective, the participant shall direct the
Trustee in writing as to how his account shall be invested from time to
time. Except as otherwise provided pursuant to this Section 23, an
election by a participant shall remain in effect until revoked. To
revoke an election, a participant must file written notice of such
revocation with the Committee on a form approved by the Trustee on or
before the adjustment date as of which such revocation is to be
effective. The Committee shall provide the Trustee with a copy of the
revocation as soon as practicable following its receipt.
Notwithstanding the foregoing, the election of a participant to direct
the investment of his account shall become ineffective as of the
adjustment date as of which payment of his vested accrued benefit shall
commence.
23.2.3. The account of a participant shall be invested and
reinvested by the Trustee as specified by the participant in his
written direction to the Trustee. Such direction shall be made in the
manner specified by the Trustee. The investment categories shall be
limited to those specified in Section 23.2.4, provided that the Trustee
shall not invest any portion of a directed investment account in
collectibles (as defined in Section 408(m) of the Code). The Trustee
shall comply with the participant's direction as soon as practicable.
The direction of the participant shall remain in effect until new
direction is received by the Trustee. If the participant shall direct
the Trustee to purchase or sell common or preferred stocks or options
to buy or sell such stocks, he may specify the brokerage firm from
which or to which such stock or options shall be purchased or sold. If
the participant fails to direct (or improperly directs) the Trustee as
to the investment and reinvestment of any portion of his account, such
portion shall be invested by the Trustee in interest-bearing
obligations with maturities of 90 days or less (hereinafter "money
market investments"), or in a common fund comprised substantially of
money market investments, which common fund may be a separate fund
within the Diversified Funds [subject to the limitations in Section
18.1.1(q)] or the Self-Employed Funds [subject to the
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limitations in Section 18.1.1(r)]. Direction by a participant to the
Trustee shall be deemed ineffective and need not be followed by the
Trustee if such direction is, in the judgment of the Trustee,
incomplete, unclear or clearly contrary to the provisions of the plan.
The participant shall be notified by the Trustee as soon as practicable
that his direction is ineffective, and the account of the participant
shall continue to be invested by the Trustee in accordance with any
prior effective direction. If there is no prior effective direction,
such account shall be invested by the Trustee in money market
investments until such time as the Trustee receives an effective
direction from such participant.
23.2.4. A participant may direct the Trustee to invest and
reinvest his account in (i) common or preferred stocks or options to
buy and sell such stocks, (H) bonds, notes or other securities
(including commercial paper or other long-term obligations), (iii)
mutual funds, (iv) guaranteed investment contracts issued by a legal
reserve life insurance company, (v) cash equivalent deposits or
accounts (including such deposits or accounts issued by the Trustee),
or any combination of (i) through (v).
23.2.5. The Committee shall cause the Trustee to segregate the
account of the participant from the general assets of the trust as of
the adjustment date with respect to which the election of the
participant becomes effective. Such segregated account shall be subject
to adjustment as of each adjustment date in the manner specified in the
applicable provisions of Section 6 as if it composed the entire trust
fund.
23.2.6. Except as provided in Section 23.2.7, upon the death
of the participant his beneficiary shall be entitled to direct the
Trustee in the manner specified in Section 23.2.3 as to the investment
and reinvestment of the segregated account of the participant until the
adjustment date as of which payment of account shall commence under
Section 4.6.2. In default of such direction, or in the event there are
multiple beneficiaries who cannot agree as to such direction, the
segregated accounts of the participant shall continue to be invested by
the Trustee in accordance with the most recent effective direction of
the participant. Amounts in the participant's segregated account shall
be distributed in the manner provided in Section 4.6, except that the
participant (or beneficiary, if applicable) shall be entitled to direct
the Trus-
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tee to distribute such amounts in cash or in kind, or partly in cash
and partly in kind. In default of such direction, or in the event there
are multiple beneficiaries who cannot agree as to such direction, the
participant's segregated account shall be distributed in cash or in
kind, or partly in cash and partly in kind, as directed by the
Committee.
23.2.7. Notwithstanding the provisions of Section 23.6, in the
event the requirements of Section 4.7 shall apply and the participant
shall not make a qualified election as defined in Section 4.7.3(d), the
election of a participant under this Section 23 shall be ineffective as
of the adjustment date coincident with or next following his retirement
or death. As soon as practicable following such adjustment date, the
Trustee shall convert the assets in which the account of the
participant are then invested to cash (except for any assets then
consisting of money market investments) and such cash shall be invested
in money market investments, except that the Trustee shall set aside a
sufficient amount of cash to pay or make provision for payment of
retirement benefits or expenses attributable to the account of such
directing participants.
23.2.8. The exercise of investment direction by a participant
shall not cause such participant to be a fiduciary solely by reason of
such exercise. Neither the Trustee nor any other fiduciary with respect
to the plan shall be liable for any loss or expense which arises from a
participant directing the investment of his account or by reason of an
ineffective direction or failure of the participant to make such
direction. Neither the Committee, the Trustee nor any other fiduciary
with respect to the plan shall have any duty to inquire into the
investment decisions made by a participant (or beneficiary, if
applicable).
23.2.9. To the extent practicable and reasonable, the fees of
the Trustee and expenses of the trust fund, including by way of
illustration and not limitation, brokerage fees, incurred as a result
of investment direction by the participant shall be charged against the
accounts of the participants in accordance with their proportionate
shares of such fees and expenses, unless paid by the Employer on a
nondiscriminatory basis.
23.2.10. The Trustee shall have and may exercise all powers
necessary or advisable in order to implement the
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provisions of this Section 23.2. To the extent approved by the Trustee,
the Committee may promulgate rules or bylaws supplementing and
implementing the provisions of this Section 23.2. If it is not
practicable for the Trustee to effect the transfer of funds on any date
provided in this Section 23.2, the Trustee shall effect such transfer
on the first practicable date thereafter.
Section 24. Miscellaneous Provisions:
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24.1. Notices: Each participant who is not in service and each
beneficiary shall be responsible for furnishing the plan administrator with his
current address for the mailing of notices, reports, and benefit payments. Any
notice required or permitted to be given to such participant or beneficiary
shall be deemed given if directed to such address and mailed by regular United
States mail, first class, postage prepaid. If any check mailed to such address
is returned as undeliverable to the addressee, mailing of checks will be
suspended until the participant or beneficiary furnishes the proper address.
This provision shall not be construed as requiring the mailing of any notice or
notification otherwise permitted to be given by posting or by other publication.
24.2. Lost distributees: A benefit shall be deemed forfeited
if the plan administrator is unable after a reasonable period of time, as
determined by the Committee, to locate the participant or beneficiary to whom
payment is due; provided, however, that such benefit shall be restored from
current forfeitures if a valid claim is later made by or on behalf of the
participant or beneficiary for the forfeited benefit.
24.3. Reliance on data: The Employer, Trustee, and plan
administrator shall have the right to rely on any data provided by the
participant or any beneficiary, including representations as to age, health, and
marital status. Such representations shall be binding upon any party seeking to
claim a benefit through a participant, and the Employer, Trustee, and plan
administrator shall have no obligation to inquire into the accuracy of any
representation made at any time by a participant or beneficiary.
24.4. Bonding: Each fiduciary shall be bonded for each plan
year to the extent required by ERISA. The bond shall provide protection to the
plan against any loss by reason of acts of fraud or dishonesty by the fiduciary
alone or in connivance with others. The cost of the bond shall be an expense
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of the trust and shall be paid from the trust fund unless the Board shall elect
for such cost to be paid by the Employer.
24.5. Receipt and release for payments: Any payment made from
the plan to or with respect to any participant or beneficiary, or pursuant to a
disclaimer by a beneficiary, shall, to the extent thereof, be in full
satisfaction of all claims hereunder against the plan, the Employer and all
fiduciaries with respect to the plan. The recipient of any payment from the plan
may be required by the Committee, as a condition precedent to such payment, to
execute a receipt and release with respect thereto in such form as shall be
acceptable to the Committee.
24.6. Headings: The headings and subheadings of the plan have
been inserted for convenience of reference and are to be ignored in any
construction of the provisions hereof.
24.7. Continuation of employment: The establishment of the
plan shall not be construed as conferring any legal or other rights upon any
employee or any persons for continuation of employment, nor shall it interfere
with the right of the Employer to discharge any employee or to deal with him
without regard to the effect thereof under the plan.
24.8. Construction: The provisions of the plan shall be
construed and enforced according to the laws of the State of Georgia, except to
the extent such laws shall be superseded by the provisions of ERISA.
