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EXHIBIT 10.3
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
TARGET BENEFIT RETIREMENT PLAN
THIS INDENTURE made on the 29th day of December, 1994, by FIRST BANKING
COMPANY OF SOUTHEAST GEORGIA, a corporation duly organized and existing under
the laws of the State of Georgia (hereinafter called the "Primary Sponsor");
W I T N E S S E T H:
WHEREAS, the Primary Sponsor established the First Banking Company of
Southeast Georgia Uniform Target Benefit Retirement Plan under an indenture
dated July 14, 1986 (the "Old Plan"); and
WHEREAS, First Xxxxxxx Bank & Trust Company ("First Xxxxxxx") adopted the
Old Plan by execution of an Adoption Agreement dated July 14, 1986 (the "First
Xxxxxxx Plan"); and
WHEREAS, Metter Banking Company ("Metter") established the Metter Banking
Company Retirement Plan and Trust under an amended and restated indenture
effective January 1, 1984 (the "Metter Plan"); and
WHEREAS, the Primary Sponsor and First Xxxxxxx amended and restated the Old
Plan and the First Xxxxxxx Plan into the First Banking Company of Southeast
Georgia Target Benefit Retirement Plan (the "Plan") by indenture dated December
30, 1988; and
WHEREAS, First Xxxxxxx and Metter have adopted the Plan and are Plan
Sponsors; and
WHEREAS, the Plan was amended and restated by indenture dated December 28,
1989, and was further amended by indenture dated December 30, 1991; and
WHEREAS, the Plan is intended to be a target benefit pension plan which is
a form of money purchase pension plan as described in Revenue Ruling 76-464; and
WHEREAS, the Primary Sponsor now desires to amend and restate the Plan
primarily to comply with the provisions of the Tax Reform Act of 1986,
subsequent legislation, and various regulations and rulings issued by government
agencies since the Plan was last amended; and
WHEREAS, the provisions of the Plan, as amended and restated herein, shall
apply only to Plan years beginning after December 31, 1988, and only with
respect to Members who perform an Hour of Service after Plan years beginning
after December 31, 1988, except to the extent the provisions are required to
apply at an earlier or later date or to any other Members to comply with
applicable law;
NOW, THEREFORE, the Primary Sponsor does hereby amend and restate the Plan
in its entirety, effective January 1, 1989, to read as follows:
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FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
TARGET BENEFIT RETIREMENT PLAN
TABLE OF CONTENTS
SECTION 1 DEFINITIONS...................................................................................1
SECTION 2 ELIGIBILITY..................................................................................11
SECTION 3 CONTRIBUTIONS................................................................................11
SECTION 4 ALLOCATIONS..................................................................................12
SECTION 5 DEATH BENEFITS...............................................................................13
SECTION 6 PAYMENT OF BENEFITS ON RETIREMENT OR DEATH...................................................13
SECTION 7 PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT.............................................18
SECTION 8 ADMINISTRATION OF THE PLAN...................................................................20
SECTION 9 CLAIM REVIEW PROCEDURE.......................................................................22
SECTION 10 LIMITATION OF ASSIGNMENT, PAYMENTS TO
LEGALLY INCOMPETENT DISTRIBUTEES AND
UNCLAIMED PAYMENTS...........................................................................23
SECTION 11 PROHIBITION AGAINST DIVERSION................................................................24
SECTION 12 LIMITATION OF RIGHTS.........................................................................24
SECTION 13 AMENDMENT TO OR TERMINATION OF THE PLAN
AND THE TRUST................................................................................24
SECTION 14 ADOPTION OF PLAN BY AFFILIATES...............................................................26
SECTION 15 QUALIFICATION AND RETURN OF CONTRIBUTIONS....................................................26
SECTION 16 INCORPORATION OF SPECIAL LIMITATIONS.........................................................27
APPENDIX A LIMITATION ON ALLOCATIONS...................................................................A-1
APPENDIX B TOP-HEAVY PROVISIONS........................................................................B-1
APPENDIX C PRIOR TARGET BENEFIT FORMULAS...............................................................C-1
APPENDIX D ACTUARIAL TABLES............................................................................D-1
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SECTION 1
DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following words and phrases shall, when used
herein, have the meanings set forth below:
1.1 "Account" means the accounts as may be established and
maintained by the Plan Administrator to reflect the interest of a Member in the
Fund. In addition to any other Accounts as the Plan Administrator may establish
and maintain, the Plan Administrator shall establish and maintain separate
accounts each of which shall be adjusted pursuant to the Plan to reflect income,
gains, losses and other credits or charges attributable thereto for each Member
to be designated as follows:
(a) "Target Account" which shall reflect a Member's
interest in contributions made by a Plan Sponsor under Plan Section
3.1.
(b) "Metter Account" which shall reflect a Member's
interest in his accrued benefit transferred to the Plan from the Metter
Plan in a trust-to-trust transfer.
1.2 "Accrued Benefit" means the balance of a Member's Account.
1.3 "Actuarial Assumptions" shall be calculated using the 1983
Group Annuity Mortality Tables (1983 GAM) (Unisex based on a 50% male/50% female
mix) as set forth in Appendix D, and using a standard interest rate equal to (a)
6.0% for Plan Years beginning before January 1, 1991, and (b) 7.5% for Plan
Years beginning on and after January 1, 1991.
1.4 "Affiliate" means (a) any corporation which is a member of the
same controlled group of corporations (within the meaning of Code Section
414(b)) as is a Plan Sponsor, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c))
with a Plan Sponsor, (c) any other corporation, partnership or other
organization which is a member of an affiliated service group (within the
meaning of Code Section 414(m)) with a Plan Sponsor, and (d) any other entity
required to be aggregated with a Plan Sponsor pursuant to regulations under Code
Section 414(o).
1.5 "Annual Compensation" means
(a) for Plan Years beginning before January 1, 1991, the
amount paid to an Employee by a Plan Sponsor and Affiliates during a
Plan Year as wages, salaries for professional services, and other
amounts received for personal services actually rendered (including,
but not limited to, commissions paid salesman, compensation for
services on the basis of percentage of profits, commissions on
insurance premiums, tips and bonuses), to the extent not in excess of
the Annual Compensation Limit. For purposes of the preceding sentence,
income from sources without the United States otherwise excluded from
gross income under Code Section 911 shall be included in Annual
Compensation. Annual Compensation does not
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include deferred compensation, stock options, and other amounts which
receive special tax benefits. Notwithstanding the above, Annual
Compensation shall be determined as follows:
(1) in determining with respect to each Plan
Sponsor the amount of contributions made by or on behalf of an
Employee under Plan Section 3 and allocations under Plan
Section 4, Annual Compensation shall only include amounts
received from that Plan Sponsor for the portion of the Plan
Year during which the Employee was a Member;
(2) for purposes of applying the Annual
Compensation Limit, with respect to Plan Sections 3 and 4, the
rules of Code Section 414(a)(6) shall apply, except that in
applying such rules, the term "family" shall include only the
spouse of the Member and any lineal descendents of the Member
who have not attained age 19 before the close of the Plan
Year;
(3) for all purposes under the Plan except
Appendices A and B hereto, Annual Compensation shall include
any amount contributed by a Plan Sponsor on behalf of an
Employee pursuant to a salary reduction agreement which is not
includable in the gross income of the Employee under Code
Section 125, 402(a)(8), or 402(h); and
(4) for purposes of applying the annual addition
limits set forth in Appendix A, the term Plan Sponsor as used
in Plan Section 1.5 shall mean Plan Sponsor as that term is
defined in Section 4 of Appendix.
(b) for Plan Years beginning on and after January 1,
1991, the amount paid to an Employee by a Plan Sponsor and Affiliates
during a Plan Year as wages, salaries, fees for professional services,
and other amounts received for personal services actually rendered
(including, but not limited to, commissions paid salesmen, compensation
for services on the basis of percentage of profits, commissions on
insurance premiums, tips, bonuses, fringe benefits and reimbursements
or other expense allowances under a nonaccountable plan), to the extent
not in excess of the Annual Compensation Limit. Annual Compensation
does not include compensation deferred under an unfunded, nonqualified
plan, amounts realized from the exercise or sale of stock options or
other amounts described by Treas. Reg. Section 1.415-2(d)(3).
Notwithstanding the above, Annual Compensation shall be determined as
follows:
(1) in determining with respect to each Plan
Sponsor the amount of contributions made by or on behalf of an
Employee under Plan Section 3 and allocations under Plan
Section 4 --
(A) for Plan Years through the Plan Year ending December
31, 1993, Annual Compensation shall be measured on the basis of the
twelve-consecutive-month period ending January 31 within the Plan Year;
(B) for Plan Years beginning on and after January 1,
1994, Annual Compensation shall be measured on the basis of a
twelve-consecutive-month period ending January 1 within the Plan Year;
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(2) for purposes of applying the Annual
Compensation Limit, with respect to Plan Sections 3 and 4, the
rules of Code Section 414(a)(6) shall apply, except that in
applying such rules, the term "family" shall include only the
spouse of the Member and any lineal descendants of the Member
who have not attained age 19 before the close of the Plan
Year;
(3) for all purposes under the Plan except
Appendices A and B hereto, Annual Compensation shall include
any amount which would have been paid during a Plan Year, but
was contributed by a Plan Sponsor on behalf of an Employee
pursuant to a salary reduction agreement which is not
includable in the gross income of the Employee under Code
Section 125, 402(e)(3), or 402(h); and
(4) for purposes of applying the annual addition
limits set forth in Appendix A, the term Plan Sponsor as used
in Plan Section 1.5 shall mean Plan Sponsor as that term is
defined in Section 4 of Appendix.
1.6 "Annual Compensation Limit" means (1) $200,000 for the Plan
Year beginning in 1989, which amount may be adjusted in subsequent Plan Years
through the Plan Year beginning in 1993, based on changes in the cost of living
as announced by the Secretary of the Treasury, and (2) $150,000 for the Plan
Year beginning in 1994, which amount may be adjusted in subsequent Plan Years
based on changes in the cost of living as announced by the Secretary of the
Treasury.
1.7 "Average Annual Compensation" means (a) for purposes of a
Member who terminates employment before January 1, 1996, the average of a
Member's Annual Compensation over the nine-consecutive twelve-month periods
ending as of the January 1 which falls within the Plan Year in which the Member
terminates employment, and (b) for purposes of a Member who terminates
employment on or after January 1, 1996, the average of a Member's Annual
Compensation over the ten-consecutive twelve-month periods ending as of the
January 1 which falls within the current Plan Year. Notwithstanding the
preceding, if a Member's entire compensation history with the Plan Sponsor is
less than the period indicated in Clause (a) or (b) herein, as applicable, the
Member's Annual Compensation shall be averaged over the fewer number of
consecutive twelve-month periods ending January 1, and if that Member's entire
compensation history is less than the twelve-consecutive month period ending as
of the January 1 which falls within the current Plan Year, then the Member's
compensation history shall be annualized.
1.8 "Beneficiary" means the person or trust that a Member
designated most recently in writing to the Plan Administrator; provided,
however, that if the Member has failed to make a designation, no person
designated is alive, no trust has been established, or no successor Beneficiary
has been designated who is alive, the term "Beneficiary" means (a) the Member's
spouse or (b) if no spouse is alive, the Member's surviving children, or (c) if
no children are alive, the Member's parent or parents, or (d) if no parent is
alive, the legal representative of the deceased Member's estate. Notwithstanding
the preceding sentence, the spouse of a married Member shall be his Beneficiary
unless that spouse has consented in writing to the designation by the Member of
some other person or trust and the spouse's consent acknowledges the effect of
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the designation and is witnessed by a notary public. A Member may change his
designation at any time. However, a Member may not change his designation
without further consent of his spouse under the terms of the preceding sentence
unless the spouse's consent permits designation of another person or trust
without further spousal consent and acknowledges that the spouse has the right
to limit consent to a specific beneficiary and that the spouse voluntarily
relinquishes this right. Notwithstanding the above, the spouse's consent shall
not be required if the Member establishes to the satisfaction of the Plan
Administrator that the spouse cannot be located, if the Member has a court order
indicating that he is legally separated or has been abandoned (within the
meaning of local law) unless a "qualified domestic relations order" (as defined
in Code Section 414(p)) provides otherwise, or if there are other circumstances
as the Secretary of the Treasury prescribes. If the spouse is legally
incompetent to give consent, consent by the spouse's legal guardian shall be
deemed to be consent by the spouse.
1.9 "Board of Directors" means the Board of Directors of the
Primary Sponsor.
1.10 "Break in Service" means the failure of an Employee, in
connection with a termination of employment other than by reason of death,
Disability or retirement, to complete more than 500 Hours of Service in any Plan
Year.
1.11 "Code" means the Internal Revenue Code of 1986, as amended.
1.12 "Credited Service" means each Plan Year during which an
Employee has completed no less than 1,000 Hours of Service as a Member in the
Plan or the Old Plan.
1.13 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
1.14 "Disability" means a disability of a Member within the meaning
of Code Section 72(m)(7), to the extent that the Member is, or would be,
entitled to disability retirement benefits under the federal Social Security Act
or to the extent that the Member is entitled to recover benefits under any long
term disability plan or policy maintained by the Plan Sponsor. The determination
of whether a Disability exists shall be made by the Plan Administrator and shall
be substantiated by competent medical advice.
1.15 "Distributee" means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code Section
414(p), are Distributees with regard to the interest of the spouse or former
spouse.
1.16 "Eligible Retirement Plan" means an individual retirement
account described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code Section
403(a) or a qualified trust described in Code Section 401(a) that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
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1.17 "Eligible Rollover Distribution" means any distribution of all
or any portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code Section
401(a)(9); and the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
1.18 "Eligibility Service" means a twelve-consecutive-month period
during which the Employee completes no less than 1,000 Hours of Service,
beginning on the date on which the Employee first performs an Hour of Service
upon his employment or reemployment with a Plan Sponsor, or, in the event the
Employee fails to complete 1,000 Hours of Service in that
twelve-consecutive-month period, any Plan Year thereafter during which the
Employee completes no less than 1,000 Hours of Service, including the Plan Year
which includes the first anniversary of the date the Employee first performed an
Hour of Service upon his employment or reemployment.
1.19 "Eligible Employee" means any Employee of a Plan Sponsor other
than an Employee who is (a) covered by a collective bargaining agreement between
a union and a Plan Sponsor, provided that retirement benefits were the subject
of good faith bargaining (unless such agreement provides for participation by
Employees covered thereby under the Plan), (b) a leased employee within the
meaning of Code Section 414(n)(2), or (c) any other individual deemed to be an
Employee of a Plan Sponsor pursuant to regulations under Code Section 414(o).
1.20 "Employee" means any person who is employed by a Plan Sponsor
or Affiliate for purposes of the Federal Insurance Contributions Act, who is a
leased employee within the meaning of Code Section 414(n)(2) with respect to a
Plan Sponsor, or who is deemed to be an employee of a Plan Sponsor pursuant to
regulations under Code Section 414(o).
1.21 "Entry Date" means January 1 and July 1.
1.22 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
1.23 "Fiduciary" means each Named Fiduciary and any other person
who exercises or has any discretionary authority or control regarding management
or administration of the Plan, any other person who renders investment advice
for a fee or has any authority or responsibility to do so with respect to any
Plan assets, or any other person who exercises or has any authority or control
respecting management or disposition of Plan assets.
1.24 "Fund" means the total amount at any given time of the cash
and other property held by the Trustee pursuant to the Plan.
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1.25 "Hour of Service" means:
(a) Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for a Plan Sponsor or any
Affiliate during the applicable computation period, and such hours
shall be credited to the computation period in which the duties are
performed;
(b) Each hour for which an Employee is paid, or entitled
to payment, by a Plan Sponsor or any Affiliate on account of a period
of time during which no duties are performed (irrespective of whether
the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty, military
duty or leave of absence;
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by a Plan Sponsor
or any Affiliate, and such hours shall be credited to the computation
period or periods to which the award or agreement for back pay pertains
rather than to the computation period in which the award, agreement or
payment is made; provided, that the crediting of Hours of Service for
back pay awarded or agreed to with respect to periods described in
Subsection (b) of this Section shall be subject to the limitations set
forth in that Subsection (f);
(d) Solely for purposes of determining whether a Break in
Service has occurred, each hour during any period that the Employee is
absent from work (1) by reason of the pregnancy of the Employee, (2) by
reason of the 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 the child by the Employee, or (4) for purposes of caring for a child
for a period immediately following its birth or placement. The hours
described in this Subsection (d) shall be credited (A) only in the
computation period in which the absence from work begins, if the
Employee would be prevented from incurring a Break in Service in a year
solely because of the credit, or (B) in any other case, in the next
following computation period;
(e) Without duplication of the Hours of Service counted
pursuant to Subsection (d) hereof and solely for such purposes as
required pursuant to the Family and Medical Leave Act of 1993 and the
regulations thereunder (the "Act"), each hour (as determined pursuant
to the Act) for which an Employee is granted leave under the Act (1)
for the birth of a child, (2) for placement with the Employee of a
child for adoption or xxxxxx case, (3) to care for the Employee's
spouse, child or parent with a serious health condition, or (4) for a
serious health condition that makes the Employee unable to perform the
functions of the Employee's job;
(f) The Plan Administrator shall credit Hours of Service
in accordance with the provisions of Section 2530.200b-2(b) and (c) of
the U.S. Department of Labor Regulations or such other federal
regulations as may from time to time be applicable and determine Hours
of Service from the employment records of a Plan Sponsor or in any
other manner consistent with regulations promulgated by the Secretary
of Labor, and shall construe any ambiguities in favor of crediting
Employees with Hours of Service. Notwithstanding any other provision of
this Section, in no event shall an Employee be credited with more than
501 Hours of
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Service during any single continuous period during which he performs no
duties for the Plan Sponsor or Affiliate; and
(g) In the event that a Plan Sponsor or an Affiliate
acquires substantially all of the assets of another corporation or
entity or a controlling interest of the stock of another corporation or
merges with another corporation or entity and is the surviving entity,
then service of an Employee who was employed by the prior corporation
or entity and who is employed by the Plan Sponsor or an Affiliate at
the time of the acquisition or merger shall be counted in the manner
provided, with the consent of the Primary Sponsor, in resolutions
adopted by the Plan Sponsor authorizing the counting of such service.
1.26 "Investment Committee" means a committee which may be
established to direct the Trustee with respect to investments of the Fund.
1.27 "Investment Manager" means a Fiduciary, other than the
Trustee, the Plan Administrator, or a Plan Sponsor, who may be appointed by the
Primary Sponsor:
(a) who has the power to manage, acquire, or dispose of
any assets of the Fund or a portion thereof; and
(b) who (1) is registered as an investment adviser under
the Investment Advisers Act of 1940, (2) is a bank as defined in that
Act, or (3) is an insurance company qualified to perform services
described in Subsection (a) above under the laws of more than one
state; and
(c) who has acknowledged in writing that he is a
Fiduciary with respect to the Plan.
1.28 "Member" means any Employee who has become a participant in
the Plan for so long as his Accrued Benefit has not been fully distributed
pursuant to the Plan.
1.29 "Named Fiduciary" means only the following persons:
(a) the Plan Administrator;
(b) the Trustee;
(c) the Investment Committee; and
(d) the Investment Manager.
1.30 "Normal Fund Payment" means:
(a) In the case of a Member who is not married on the
date payments to the Member are to commence under the terms of the
Plan, a single life annuity, payable in monthly installments for the
life of the Member, which is the actuarial equivalent of an immediate
lump sum payment of the Member's vested Accrued Benefit;
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(b) In the case of a Member who is married on the date
payments are to commence under the terms of the Plan, a joint and
survivor annuity, payable in monthly installments, which is an
immediate annuity for the life of the Member with a survivor annuity
for the life of his spouse which is fifty percent (50%) of the amount
of the annuity payable during the joint lives of the Member and his
spouse and which is the actuarial equivalent of an immediate lump sum
payment of the Member's vested Accrued Benefit;
(c) In the case of a Member who is married and who dies
before payments are to commence under the terms of the Plan, an
immediate single life annuity, payable in monthly installments for the
life of his spouse, which is the actuarial equivalent of an immediate
lump sum payment of the Member's vested Accrued Benefit;
(d) In the case of a Member who dies while not married
before payments are to commence, a single lump sum payment in cash; and
(e) Notwithstanding anything contained in this Section,
if the Member's vested Accrued Benefit as of the date payments are to
commence is $3,500 or less, a lump sum payment in cash.
Any annuity may be purchased from an insurance company designated by the
Plan Administrator in writing to the Trustee, and may be distributed to the
Member, his spouse, or his Beneficiary as the case may be. The distribution, if
any, shall be in full satisfaction of the benefits to which the Member, his
spouse, or his Beneficiary is entitled under the Plan. For purposes of this
Section, actuarial equivalence shall be determined based on factors employed by
the insurance company from which the annuity is purchased and any commissions or
other costs associated with the purchase.
1.31 "Normal Retirement Age" means the later of (a) age 65 and (b)
the fifth anniversary of the date a Member commenced participation in the Plan.
For purposes of determining the fifth anniversary of a Member's commencement of
participation, service under any pension or profit sharing plan of a Plan
Sponsor shall be counted; however, the same service shall not be counted twice.
1.32 "Plan Administrator" means the organization or person
appointed to administer the Plan.
1.33 "Plan Sponsor" means individually the Primary Sponsor, First
Xxxxxxx, Metter and each Affiliate or other entity which has adopted the Plan
and Trust.
1.34 "Plan Year" means the calendar year.
1.35 "Prior Plan" means the Old Plan, the First Xxxxxxx Plan, the
Metter Plan, or any other plan previously adopted by a Plan Sponsor which has
been approved by the Internal Revenue Service under Code Sections 401(a) and
501(a) and which the Plan Sponsor has amended and restated into the Plan.
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1.36 "Retirement Date" means the date on which the Member retires
on or after (a) attaining Normal Retirement Age, or (b) becoming subject to a
Disability.
1.37 "Target Benefit" means
(a) with respect to Members who terminate employment in
Plan Years beginning before January 1, 1994, a hypothetical amount
determined in accordance with the applicable formula set forth in
Appendix C; and
(b) with respect to Members who terminate employment in
Plan Years beginning on and after January 1, 1994, a hypothetical
amount equal to forty-five percent (45%) of the Member's Average Annual
Compensation (reduced pro rata for each Year of Projected Participation
less than twenty-five (25)), payable as a straight life annuity
beginning at Normal Retirement Age.
1.38 "Termination Completion Date" means the last day of the fifth
consecutive Break in Service computation period, determined under Plan Section
1.10, in which a Member completes a Break in Service.
1.39 "Theoretical Reserve" means an amount determined, as of the
last day of each Plan Year, in accordance with (a) and (b) below:
(a) Initial Theoretical Reserve means and shall be
determined as follows:.
(1) with respect to a Member who first performs
an Hour of Service on or after January 1, 1994, zero;
(2) with respect to a Member who first performs
an Hour of Service prior to January 1, 1994, the amount which
is the excess of (A) over (B) (but not below zero), where:
(A) is the present value of the
Member's Target Benefit, calculated as of December
31, 1993, using the Actuarial Assumptions, the
provisions of the Plan and the Member's Average
Annual Compensation as of such date. For a Member who
attains Normal Retirement Age on or before December
31, 1994, the Target Benefit will be determined using
the Actuarial Assumptions, the provisions of the Plan
and the Member's Average Annual Compensation as of
such date, except that the straight life annuity
factor used in that determination will be the factor
applicable for the Member's Normal Retirement Age;
and
(B) is the present value of future Plan
Sponsor contributions, calculated as of December 31,
1993, using the Actuarial Assumptions, the provisions
of the Plan (disregarding limitations contained in
Appendices A and B), and the Member's Average Annual
Compensation as of such date, beginning with the Plan
Year commencing January 1, 1994 and continuing
through the end of the Plan Year in
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which the Member attains Normal Retirement Age.
(b) Accumulate a Member's Initial Theoretical Reserve and
the Plan Sponsor contribution made on behalf of such Member (calculated
in accordance with Plan Section 3.1, as limited by Appendix A, but
without regard to any minimum contribution required by Appendix B) for
each Plan Year beginning with the Plan Year commencing January 1, 1994
up through the last day of the current Plan Year (excluding Plan
Sponsor contributions for the current Plan Year) using the interest
rate assumption set forth in Plan Section 1.2. Notwithstanding the
preceding, in any Plan Year following the Plan Year in which the Member
attains Normal Retirement Age, the accumulation is calculated assuming
an interest rate of 0%.
1.40 "Trust" means the trust established under an agreement between
the Primary Sponsor and the Trustee to hold the Fund.
1.41 "Trustee" means the trustee under the Trust.
1.42 "Valuation Date" means the last day of each Plan Year, or any
other day which the Plan Administrator may, in the interest of preserving the
interests of Members and Beneficiaries in the Fund from time to time declare to
be a Valuation Date.
1.43 "Vesting Service" means each calendar year during which an
Employee has completed no less than 1,000 Hours of Service. Notwithstanding
anything contained herein to the contrary, Vesting Service shall not include:
(a) In the case of a Member who for each of five
consecutive Plan Years completes a Break in Service and who is not
reemployed by a Plan Sponsor or an Affiliate on or prior to his
Termination Completion Date, for purposes of determining the vested
portion of his Accrued Benefit derived from Plan Sponsor contributions
which accrued before his Termination Completion Date, all service in
Plan Years after his Termination Completion Date; and
(b) In the case of an Employee who, at the time of his
Termination Completion Date following termination of employment (other
than by reason of attainment of a Retirement Date or death) does not
have any vested right in Plan Sponsor contributions, all service in
Plan Years before the Plan Year in which the first of the five
consecutive Breaks in Service commenced, if the number of consecutive
Plan Years in which the Employee incurred a Break in Service equals or
exceeds five.
1.44 "Years of Projected Participation" means the sum of (a) and
(b), where
(a) equals the number of years of Credited Service earned
by a Member beginning with the latest of (1) the first Plan Year for
which the Member earned a year of Credited Service, or (2) the first
Plan Year beginning on January 1, 1994, and ending with the last day of
the current Plan Year; and
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(b) equals the number of years, if any, subsequent to the
current Plan Year through the end of the Plan Year in which the Member
will attain Normal Retirement Age.
SECTION 2
ELIGIBILITY
2.1 Each individual who was a participant in a Prior Plan on the
day immediately preceding January 1, 1989 shall be a Member as of January 1,
1989.
2.2 Each individual who was an Eligible Employee on July 1, 1988
and who was still an Eligible Employee on January 1, 1989 shall become a Member
as of January 1, 1989.
2.3 Each former Member who is reemployed by a Plan Sponsor shall
become a Member as of the date of his reemployment as an Eligible Employee.
2.4 Each former Employee who completed his Eligibility Service but
terminated employment with a Plan Sponsor before becoming a Member shall become
a Member as of the latest of the date he (a) is reemployed, (b) would have
become a Member if he had not terminated employment, or (c) becomes an Eligible
Employee.
2.5 Each other Eligible Employee shall become a Member as of the
Entry Date coinciding with or next following the later of the date he (a)
completes his Eligibility Service or (b) attains age 21.
SECTION 3
CONTRIBUTIONS
3.1 Each Plan Sponsor, subject to its right to terminate its
participation in the Plan, shall make contributions to the Fund with respect to
each Plan Year on behalf each Member who is an Eligible Employee an amount
necessary to fund the Member's Target Benefit. For Plan Years commencing on and
after January 1, 1994, a Plan Sponsor's contribution on behalf of each such
Member shall be determined as follows:
(a) Calculate the present value of the Member's Target
Benefit as follows:
(1) if the Member has not attained his Normal
Retirement Age, multiply the Member's Target Benefit by the
factor which is the product of the applicable discount factor
in Table 1 (set forth in Appendix D) multiplied by the
applicable life annuity factor in Table 2 (set forth in
Appendix D);
(2) if the Member has attained his Normal
Retirement Age, multiply the Target Benefit by the applicable
life annuity factor in Table 2 (set forth in Appendix D)
corresponding to the Member's Normal Retirement Age.
(b) Determine the excess, if any, of the amount
determined in Subsection (a), over the Theoretical Reserve.
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(c) Amortize the result in Subsection (b) by multiplying
it by the applicable amortization factor in Table 3 (set forth in
Appendix D). Notwithstanding anything to the contrary, the applicable
amortization factor for the Plan Year in which the Member attains
Normal Retirement Age and for any subsequent Plan Year shall be 1.0.
3.2 Forfeitures shall be used to reduce Plan Sponsor contributions
and not to increase benefits.
3.3 Notwithstanding any other provision of the Plan, contributions
may be made only in cash or other property as is acceptable to the Trustee.
SECTION 4
ALLOCATIONS
4.1 As of the last date of each Plan Year, Plan Sponsor
contributions determined under Plan Section 3.1 shall be allocated to the
Account of each Member who is employed by a Plan Sponsor on the last day of the
Plan Year, or whose death or Retirement Date occurred during the Plan Year and
who individually or through his Beneficiary did not elect to have payments
commence immediately thereafter.
4.2 As of the last day of each Plan Year, if, and to the extent,
necessary to satisfy with respect to the Plan Year, the minimum coverage
requirements prescribed in Code Section 410(b) or the minimum participation
requirements under Code Section 401(a)(26) and regulations issued thereunder,
Members who are not Highly Compensated Employees who completed more than 500
Hours of Service during the Plan Year, but who terminated employment before the
last day of the Plan Year, shall be entitled to an allocation under Plan Section
4.1, beginning with the individual receiving the least Annual Compensation for
the Plan Year.
4.3 Except as otherwise provided in the Plan and the Trust, as of
each Valuation Date, the Trustee shall allocate to each Account its share of the
net income or net loss of the Fund as follows:
(a) To the cash income, if any, since the last Valuation
Date, there shall be added or subtracted, as the case may be, any net
increase or decrease, since the last Valuation Date, in the fair market
value of the assets of the Fund, any gain or loss on the sale or
exchange of assets of the Fund since the last Valuation Date, accrued
interest since the last Valuation Date with respect to any
interest-bearing security, the amount of any dividend which shall have
been declared since the last Valuation Date but not paid on shares of
stock attributable to the Fund if the market quotation used in
determining the value of such shares is ex-dividend, and the amount of
any other assets of Fund determined by the Trustee to be income since
the last Valuation Date.
(b) From the sum thereof there shall be deducted all
charges, expenses, and liabilities accrued since the last Valuation
Date which are proper under the provisions of the Plan and Trust and
which in the discretion of the Trustee are properly chargeable against
income for the period.
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The net income or net loss so determined shall be allocated as of the Valuation
Date to the Account of each Member in the proportion that the value of the
Account of each Member as of the preceding Valuation Date bears to the total
value of the Accounts of all Members as of the preceding Valuation Date.
SECTION 5
DEATH BENEFITS
5.1 Upon the death of a Member while an Employee, his Beneficiary
shall be entitled to the full value of his Accrued Benefit.
5.2 Upon the death of a Member who is no longer an Employee, prior
to the distribution of his vested Accrued Benefit, his Beneficiary shall be
entitled to the Member's Accrued Benefit.
5.3 If subsequent to the death of a Member, the Member's
Beneficiary dies while entitled to receive benefits under the Plan, the
successor Beneficiary, if any, or the Beneficiary listed under Subsection (a),
(b) or (c) of Plan Section 1.8 shall generally be entitled to receive benefits
under the Plan. However, if the deceased Beneficiary was the Member's spouse at
the time of the Member's spouse at the time of the Member's death, or if no
successor Beneficiary shall have been designated by the Member and be alive and
no Beneficiary listed under Subsection (a), (b) and (c) of Plan Section 1.8
shall be alive, the Member's unpaid vested Accrued Benefit shall be paid to the
personal representative of the deceased Beneficiary's estate.
5.4 Any benefit payable under this Plan Section shall be paid in
accordance with and subject to the provisions of Plan Section 6 or 7, whichever
is applicable, after receipt by the Trustee from the Plan Administrator of due
notice of the death of the Member.
SECTION 6
PAYMENT OF BENEFITS ON RETIREMENT OR DEATH
6.1 The Accrued Benefit of a Member who has attained his
Retirement Date or has attained Normal Retirement Age or died while an Employee
shall be fully vested and nonforfeitable. As of a Member's Retirement Date or
death while an Employee, he or his Beneficiary shall be entitled to his Accrued
Benefit to be paid in accordance with this Plan Section 6.
6.2 The Accrued Benefit of the Member which is to be paid pursuant
to this Plan Section 6 shall be determined as of the Valuation Date coinciding
with or next following the Member's Retirement Date or date of death, adjusted
for a pro rata share of any income, gains, and losses attributable thereto
through the Valuation Date coinciding with or immediately preceding the date the
Accrued Benefit is paid. Payments to a Member, or to the Beneficiary of a
deceased Member shall commence within 60 days after the end of the Plan Year in
which the Retirement Date or the date of death of the Member occurs. A Member or
the Beneficiary of a deceased Member may alternatively elect by a written notice
to the Plan Administrator to have payments commence immediately after the
Retirement Date or death of a Member, in which event, the
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Accrued Benefit of the Member shall be determined as of the Valuation Date next
preceding the Member's Retirement Date or death and shall be equal to his
Account determined as of that Valuation Date.
6.3 (a) The payment of a Member's Accrued Benefit shall be in the
form of a Normal Fund Payment, except that a Member whose Accrued
Benefit exceeds $3,500 as of the date payments are to commence may
elect during the applicable election period not to receive the Normal
Fund Payment by execution and delivery to the Plan Administrator of a
written instrument provided by the Plan Administrator in which the
Member identifies the particular alternate form of payment desired and,
if applicable, the specific nonspouse Beneficiary. For purposes of this
Section 6.3, the term "applicable election period" shall mean, with
respect to a Normal Fund Payment described in Subsection (a) or (b) of
Plan Section 1.30, the 90 day period ending on the first date on which
the Member is entitled to payment from the Fund, and with respect to a
Normal Fund Payment described in Subsection (c) of Plan Section 1.30,
the period which begins on the first day of the Plan Year in which an
Eligible Employee becomes a Member and which ends on the date of his
death. In the case of a married Member, no election shall be effective
unless spousal consent is obtained in accordance with the provisions of
Plan Section 1.8.
If an election is made, the Member's vested Accrued Benefit
shall be paid in the form set forth in Subsection (b) or (c) of this
Section chosen by the Member by written instrument delivered to the
Plan Administrator prior to the date payments are otherwise to
commence. Any waiver of a Normal Fund Payment under Plan Section 1.8,
made prior to the first day of the Plan Year in which the Member
attains age 35 shall become invalid as of the first day of the Plan
Year in which the Member attains age 35 (unless the Member has earlier
separated from service) and the provisions of Plan Section 1.8 shall
apply unless a new waiver is obtained.
(b) A Member may select one of the following alternate
forms of payment to be paid upon the attainment of the Member's
Retirement Date:
(1) One lump sum payment in cash; or
(2) Cash payments, in annual or more frequent
installments over a period certain of five, 10, 15, 20, or 25
years; provided, however, this alternate form of payment shall
only be available to a Member upon his Retirement Date. The
initial value of the obligation for the installment payments
shall be the amount of the Member's vested Accrued Benefit on
the date on which he is entitled to commencement of payments
from the Fund which amount, or the balance thereof after
payment of any installments, shall be credited with its pro
rata share of the net income, gain, or loss of the Fund during
the period over which installments are paid.
(c) A Member may select a lump sum payment in cash as an
alternate form of payment to be paid to his Beneficiary upon his death.
(d) The Plan Administrator shall furnish to the Member a
written explanation of:
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(1) the terms and conditions of the Normal Fund
Payment including a general description of the eligible
conditions and other material features of the alternate forms
of payment under the Plan,
(2) the Member's right to make, and the effect
of, an election not to receive the Normal Fund Payment,
including a general description of the conditions and other
material features of the alternate forms of payment under the
Plan,
(3) the rights of the Member's spouse as
described in Subsection (a) of this Section of the Plan, and
(4) the right to make, and the effect of, a
revocation of an election pursuant to this Section.
In the case of a Normal Fund Payment described under
Subsection (a) or (b) of Plan Section 1.30, the written explanation
shall be provided to the Member within 90 days prior to the first date
on which he is entitled to payment from the Fund. In the case of a
Normal Fund Payment described under Subsection (c) of Plan Section
1.30, the written explanation shall be provided to the Member in
whichever of the following periods ends last:
(A) the period beginning with the first day of
the Plan Year in which the Member attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in
which the Member attains age 35;
(B) the period beginning one year before and
ending one year after the Employee first becomes a Member;
(C) the period beginning one year before and
ending one year after the provisions of this Subsection (c)
apply to the Member; or
(D) the period beginning one year before and
ending one year after separation from service in the case of a
Member who separates from service before attaining age 35.
(e) A Member may revoke any election not to receive payment in the
form of a Normal Fund Payment at any time prior to commencement of payments from
the Fund, and may make a new election at any time prior to the commencement of
payments from the Fund.
6.4 In the event that the Member elects an alternate form of
payment described in Plan Section 6.3 and the joint survivor dies after the
election but before benefit payments have actually commenced to the Member, the
election will be null and void and the Member shall be deemed to have made no
election pursuant to the Plan Section containing the definition of the term
"Beneficiary" until and unless a subsequent election is made by the Member.
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6.5 Payments under the Normal Fund Payment shall be determined
according to the amount of the Accrued Benefit of the Member on the date on
which the Member is entitled to commencement of payments from the Fund.
6.6 Notwithstanding anything to the contrary contained in the
Plan, if a Member's vested Accrued Benefit exceeds $3,500, it shall not be
distributed before the Member's Normal Retirement Age or death without the
consent of the Member and, if the Member is married and elects a form of payment
other than a Normal Fund Payment, his spouse.
6.7 Notwithstanding any other provisions of this Plan,
(a) Prior to the death of a Member, all retirement
payments hereunder shall --
(1) be distributed to the Member not later than
the required beginning date (as defined below) or,
(2) be distributed, commencing not later than
the required beginning date (as defined below) --
(A) in accordance with regulations
prescribed by the Secretary of the Treasury, over the
life of the Member or over the lives of the Member
and his designated individual Beneficiary, if any, or
(B) in accordance with regulations
prescribed by the Secretary of the Treasury, over a
period not extending beyond the life expectancy of
the Member or the joint life and last survivor
expectancy of the Member and his designated
individual Beneficiary, if any.
(b) (1) If --
(A) the distribution of a Member's
retirement payments has begun in accordance with
Subsection (a)(2) of this Section, and
(B) the Member dies before his entire
vested Accrued Benefit has been distributed to him,
then the remaining portion of his vested Accrued Benefit shall
be distributed at least as rapidly as under the method of
distribution being used under Subsection (a)(2) of this
Section as of the date of his death.
(2) If a Member dies before the commencement of
retirement payments hereunder, the entire interest of the
Member shall be distributed within five (5) years after his
death.
(3) If --
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(A) any portion of a Member's vested Accrued
Benefit is payable to or for the benefit of the Member's
designated individual Beneficiary, if any,
(B) that portion is to be distributed, in
accordance with regulations prescribed by the Secretary of the
Treasury, over the life of the designated individual
Beneficiary or over a period not extending beyond the life
expectancy of the designated individual Beneficiary, and
(C) the distributions begin not later than one
year after the date of the Member's death or such later date
as the Secretary of the Treasury may by regulations prescribe,
then, for purposes of Paragraph (2) of this Subsection (b), the portion
referred to in Subparagraph (A) of this Paragraph (3) shall be treated
as distributed on the date on which the distributions to the designated
individual Beneficiary begin.
(4) If the designated individual Beneficiary referred to
in Paragraph (3)(A) of this Subsection (b) is the surviving spouse of
the Member, then --
(A) the date on which the distributions are
required to begin under Paragraph (3)(C) of this Subsection
(b) shall not be earlier than the date on which the Member
would have attained Age 70-1/2, and
(B) if the surviving spouse dies before the
distributions to such spouse begin, this Subsection (b) shall
be applied as if the surviving spouse were the Member.
(c) For purposes of this Section, the term "required
beginning date" means April 1 of the calendar year following the
calendar year in which the Member attains Age 70-1/2. Notwithstanding
the foregoing, in the case of a Member who has attained age 70-1/2
before January 1, 1988, other than a Member who is described in Section
1(b)(3) of Appendix B, the term "required beginning date" means April 1
of the calendar year following the calendar year in which the Member
retires or otherwise terminates employment.
(d) Distributions will be made in accordance with the
regulations under Code Section 401(a)(9), including the minimum
distribution incidental death benefit requirement of Treas. Reg.
Section 1.401(a)(9)-2.
6.8 Notwithstanding any provisions of the Plan to the contrary
that would otherwise limit a Distributee's election under this Section 6, a
Distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a direct
rollover so long as all Eligible Rollover Distributions to a Distributee for a
calendar year total or are expected to total at least $200 and, in the case of a
Distributee who elects to directly receive a portion of an Eligible Rollover
Distribution and directly roll the balance over to an Eligible Retirement Plan,
the portion that is to be directly rolled over totals at least $500. If the
Eligible
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Rollover Distribution is one to which Code Sections 401(a)(11) and 417 do not
apply, such Eligible Rollover Distribution may commence less than 30 days after
the notice required under Treasury Regulations Section 1.411(a)-11(c) is given,
provided that:
(a) the Plan Administrator clearly informs the
Distributee that the Distributee has a right to a period of at least 30
days after receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and
(b) the Distributee, after receiving the notice,
affirmatively elects a distribution.
SECTION 7
PAYMENT OF BENEFITS ON TERMINATION OF EMPLOYMENT
7.1 Transfer of a Member from one Plan Sponsor to another Plan
Sponsor or to an Affiliate shall not be deemed for any purpose under the Plan to
be a termination of employment of the Member.
7.2 In the event of the termination of employment of a Member for
reasons other than death or attainment of a Retirement Date, the Member's
Accrued Benefit shall be determined as of the Valuation Date coinciding with or
immediately preceding the Member's termination of employment. No further Plan
Sponsor contributions or forfeitures shall be allocated to the Member's Account
after that Valuation Date, but until the Valuation Date immediately preceding
the date it is paid, his Account shall be credited with its pro rata share of
any income, gains and losses attributable thereto.
7.3 That portion of a Member's Accrued Benefit in which he is
vested shall be:
(a) his Metter Account, which shall be fully vested and
nonforfeitable at all times; and
(b) that portion of the value of his Target Account
computed according to the following vesting schedules taking into
account any Vesting Service subsequent to the Valuation Date until the
date of his termination of employment:
Full Years of Percentage
Vesting Service Vested
--------------- ------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
7.4 The Member's Accrued Benefit shall be payable in the form of a
Normal Fund Payment, unless he elects otherwise under Plan Section 6. Payment
shall be made as soon as administratively feasible after the Member completes
his first Break in Service; provided, however, effective for terminations of
employment occurring on and after January 1, 1994,
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payment shall be made as soon as administratively feasible after the Valuation
Date coinciding with or next following such Member's termination of employment.
Notwithstanding the preceding, if the Member's vested Account exceeds $3,500,
payment of such benefit will not be distributed without the Member's consent
before Normal Retirement Age or death (and if the Member is married and elects a
form of payment other than a Normal Fund Payment, without the spouse's consent).
If a Member who has a termination of employment has not previously received a
distribution of his Account under Plan Section 7.4(b), payment of his vested
Account shall be made on or before 60 days following the end of the Plan Year in
which the Member attains Normal Retirement Age or dies, whichever is the first
to occur. Payment shall be subject to the minimum distribution and Eligible
Rollover Distribution requirements set forth in Plan Section 6.
7.5 (a) If any portion of a Member's vested Account derived from
Plan Sponsor contributions is paid prior to his Termination Completion
Date, a portion of his Account equal to his total non-vested Account
derived from Plan Sponsor contributions multiplied by a fraction, the
numerator of which is the amount of the distribution attributable to
Plan Sponsor contributions and the denominator of which is the total
vested Account attributable to Plan Sponsor contributions, shall be
immediately forfeited. The amount forfeited shall not exceed the
Member's nonvested Account. Upon the Termination of Employment of a
Member who is not vested in any part of his Account, the Member shall
be deemed to have received a distribution and his Account shall be
immediately forfeited.
(b) If the Member is reemployed by a Plan Sponsor or an
Affiliate prior to his Termination Completion Date and (1) if the
Member's Account was partially vested and the Member repays to the Fund
no later than the fifth anniversary of the Member's reemployment by the
Plan Sponsor or an Affiliate all of that portion of his vested Account
which was paid to him or (2) if the Member's Account was not vested
upon his termination of employment, then any portion of his Account
which was not forfeited shall be restored effective on the Valuation
Date coinciding with or next following the repayment or the Member's
reemployment, respectively. The restoration on any Valuation Date of
the forfeited portion of the Account of a Member pursuant to the
preceding sentence shall be made first from forfeitures available, and
secondly from net income calculated as of that Valuation Date, to the
extent available, and secondly from net income calculated as of that
Valuation Date, if any. Only after restorations have been made shall
the remaining net income be available for allocation under Plan Section
4.
(c) If a Member who is partially vested in his Account
does not receive, prior to his Termination Completion Date, a
distribution of any portion of his vested Account, then no forfeiture
of that Member's nonvested portion of his Account shall occur until the
Member's Termination Completion Date.
7.6 In the event that an amendment to the Plan directly or
indirectly changes the vesting schedule, the vesting percentage for each Member
in his Accrued Benefit accumulated to the date when the amendment is adopted
shall not be reduced as a result of the amendment. In addition, any Member with
at least three years of Vesting Service may irrevocably elect to remain under
the pre-amendment vesting schedule with respect to all of his benefits accrued
both before and after the amendment.
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7.7 If a Member has a termination of employment and is
subsequently reemployed by a Plan Sponsor or an Affiliate prior to receiving a
distribution of his Account under the Plan, such Member shall not be entitled to
a distribution under this Section while he is an Employee.
SECTION 8
ADMINISTRATION OF THE PLAN
8.1 Trust Agreement. Each Plan Sponsor shall enter into a Trust
with the Trustee designated by the Board of Directors for the management of the
Fund, which Trust shall form a part of the Plan and is incorporated herein by
reference.
8.2 Operation of the Plan Administrator. The Primary Sponsor shall
appoint a Plan Administrator. If an organization is appointed to serve as the
Plan Administrator, then the Plan Administrator may designate in writing a
person who may act on behalf of the Plan Administrator. The Primary Sponsor
shall have the right to remove the Plan Administrator at any time by notice in
writing. The Plan Administrator may resign at any time by written notice of
resignation to the Trustee and the Primary Sponsor. Upon removal or resignation,
or in the event of the dissolution of the Plan Administrator, the Primary
Sponsor shall appoint a successor.
8.3 Fiduciary Responsibility.
(a) The Plan Administrator, as a Named Fiduciary, may
allocate its fiduciary responsibilities among Fiduciaries other than
the Trustee, designated in writing by the Plan Administrator and may
designate in writing other persons (other than the Trustee) to carry
out its fiduciary responsibilities under the Plan. The Plan
Administrator may at any time and from time to time remove any such
person designated to carry out its fiduciary responsibilities under the
Plan by notice in writing to such person.
(b) The Plan Administrator and each other Fiduciary may
employ persons to perform services and to render advice with regard to
any of the Fiduciary's responsibilities under the Plan.
(c) Each Plan Sponsor shall indemnify and hold harmless
each person constituting the Plan Administrator from and against any
and all claims, losses, costs, expenses (including, without limitation,
attorney's fees and court costs), damages, actions or causes of action
arising from, on account of or in connection with the performance by
such person of his duties in such capacity, other than such of the
foregoing arising from, on account of or in connection with the willful
neglect or willful misconduct of such person so acting.
8.4 Duties of the Plan Administrator.
(a) The Plan Administrator shall advise the Trustee with
respect to all payments under the terms of the Plan and shall direct
the Trustee in writing to make such payments from the Fund; provided,
however, in no event shall the Trustee be required to make such
payments if
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the Trustee has actual knowledge that such payments are contrary to the
terms of the Plan and the Trust.
(b) The Plan Administrator shall from time to time
establish rules, not contrary to the provisions of the Plan and the
Trust, for the administration of the Plan and the transaction of its
business. All elections and designations under the Plan by a
Participant or Beneficiary shall be made on forms prescribed by the
Plan Administrator. The Plan Administrator shall have discretionary
authority to construe the terms of the Plan and shall determine all
questions arising in the administration, interpretation and application
of the Plan, including, but not limited to, those concerning
eligibility for benefits, and it shall not act so as to discriminate in
favor of any person. All determinations of the Plan Administrator shall
be conclusive and binding on all Employees, Members, Beneficiaries and
Fiduciaries, subject to the provisions of the Plan and the Trust and
subject to applicable law.
(c) The Plan Administrator shall furnish Members and
Beneficiaries with all disclosures now or hereafter required by ERISA
or the Code. The Plan Administrator shall file, as required, the
various reports and disclosures concerning the Plan and its operations
as required by ERISA and by the Code, and shall be solely responsible
for establishing and maintaining all records of the Plan and the Trust.
(d) The statement of specific duties for a Plan
Administrator in this Section is not in derogation of any other duties
which a Plan Administrator has under the provisions of the Plan or the
Trust or under applicable law.
8.5 Investment Manager. The Primary Sponsor may, by action in
writing certified by notice to the Trustee, appoint an Investment Manager. Any
Investment Manager may be removed in the same manner in which appointed, and in
the event of any removal, the Investment Manager shall, as soon as possible, but
in no event more than 30 days after notice of removal, turn over all assets
managed by it to the Trustee or to any successor Investment Manager appointed,
and shall make a full accounting to the Primary Sponsor with respect to all
assets managed by it since its appointment as an Investment Manager.
8.6 Investment Committee. The Primary Sponsor may, by action in
writing certified by notice to the Trustee, appoint an Investment Committee. The
Primary Sponsor shall have the right to remove any person on the Investment
Committee at any time by notice in writing to such person. A person on the
Investment Committee may resign at any time by written notice of resignation to
the Primary Sponsor. Upon such removal or resignation, or in the event of the
death of a person on the Investment Committee, the Primary Sponsor may appoint a
successor. Until a successor has been appointed, the remaining persons on the
Investment Committee may continue to act as the Investment Committee.
8.7 Action by the Primary Sponsor or a Plan Sponsor. Any action to
be taken by the Primary Sponsor or a Plan Sponsor shall be taken by resolution
or written direction duly adopted by its board of directors or appropriate
governing body, as the case may be; provided, however, that by such resolution
or written direction, the board of directors or appropriate governing body, as
the case may be, may delegate to any officer or other appropriate person of a
Plan Sponsor the
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authority to take any such actions as may be specified in such resolution or
written direction, other than the power to amend, modify or terminate the Plan
or the Trust or to determine the basis of any Plan Sponsor contributions.
SECTION 9
CLAIM REVIEW PROCEDURE
9.1 If a Member or Beneficiary is denied a claim for benefits
under a Plan, the Plan Administrator shall provide to the claimant written
notice of the denial within 90 days after the Plan Administrator receives the
claim, unless special circumstances require an extension of time for processing
the claim. If such an extension of time for processing is required, written
notice of the extension shall be furnished to the claimant prior to the
termination of the initial 90-day period. In no event shall the extension exceed
a period of 90 days from the end of such initial period. The extension notice
shall indicate the special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render the final decision.
9.2 In the event that a Member or Beneficiary is denied a claim
for benefits under a Plan, the Plan Administrator shall provide to such claimant
written notice of the denial which shall set forth:
(a) the specific reasons for the denial;
(b) specific references to the pertinent provisions of
the Plan on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and
(d) an explanation of the Plan's claim review procedure.
9.3 After receiving written notice of the denial of a claim, a
claimant or his representative may:
(a) request a full and fair review of such denial by
written application to the Plan Administrator;
(b) review pertinent documents; and
(c) submit issues and comments in writing to the Plan
Administrator.
9.4 If the claimant wishes such a review of the decision denying
his claim to benefits under the Plan, he must submit such written application to
the Plan Administrator within 60 days after receiving written notice of the
denial.
9.5 Upon receiving such written application for review, the Plan
Administrator may schedule a hearing for purposes of reviewing the claimant's
claim, which hearing shall take place not
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more than 30 days from the date on which the Plan Administrator received such
written application for review.
9.6 At least 10 days prior to the scheduled hearing, the claimant
and his representative designated in writing by him, if any, shall receive
written notice of the date, time, and place of such scheduled hearing. The
claimant or his representative, if any, may request that the hearing be
rescheduled, for his convenience, on another reasonable date or at another
reasonable time or place.
9.7 All claimants requesting a review of the decision denying
their claim for benefits may employ counsel for purposes of the hearing.
9.8 No later than 60 days following the receipt of the written
application for review, the Plan Administrator shall submit its decision on the
review in writing to the claimant involved and to his representative, if any;
provided, however, a decision on the written application for review may be
extended, in the event special circumstances such as the need to hold a hearing
require an extension of time, to a day no later than 120 days after the date of
receipt of the written application for review. The decision shall include
specific reasons for the decision and specific references to the pertinent
provisions of the Plan on which the decision is based.
SECTION 10
LIMITATION OF ASSIGNMENT, PAYMENTS TO LEGALLY INCOMPETENT
DISTRIBUTEES AND UNCLAIMED PAYMENTS
10.1 No benefit which shall be payable under the Plan to any person
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge the same shall be
void; and no such benefit shall in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person, nor shall it
be subject to attachment or legal process for, or against, such person, and the
same shall not be recognized under the Plan, except to such extent as may be
required by law. Notwithstanding the above, this Section shall not apply to a
"qualified domestic relations order" (as defined in Code Section 414(p)), and
benefits may be paid pursuant to the provisions of such an order. The Plan
Administrator shall develop procedures (in accordance with applicable federal
regulations) to determine whether a domestic relations order is qualified, and,
if so, the method and the procedures for complying therewith.
10.2 If any person who shall be entitled to any benefit under the
Plan shall become bankrupt or shall attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge such benefit under the Plan, then
the payment of any such benefit in the event a Member or Beneficiary is entitled
to payment shall, in the discretion of the Plan Administrator, cease and
terminate and in that event the Trustee shall hold or apply the same for the
benefit of such person, his spouse, children, other dependents or any of them in
such manner and in such proportion as the Plan Administrator shall determine.
10.3 Whenever any benefit which shall be payable under the Plan is
to be paid to or for
23
26
the benefit of any person who is then a minor or determined to be incompetent by
qualified medical advice, the Plan Administrator need not require the
appointment of a guardian or custodian, but shall be authorized to cause the
same to be paid over to the person having custody of such minor or incompetent,
or to cause the same to be paid to such minor or incompetent without the
intervention of a guardian or custodian, or to cause the same to be paid to a
legal guardian or custodian of such minor or incompetent if one has been
appointed or to cause the same to be used for the benefit of such minor or
incompetent.
10.4 If the Plan Administrator cannot ascertain the whereabouts of
any person to whom a payment is due under the Plan, the Plan Administrator may
direct that the payment and all remaining payments otherwise due to the person
be cancelled on the records of the Plan and the amount thereof applied as a
forfeiture in accordance with Plan Section 3.2, except that, in the event the
person later notifies the Plan Administrator of his whereabouts and requests the
payments due to him under the Plan, the Plan Sponsor shall contribute to the
Plan an amount equal to be paid to him as soon as administratively feasible.
SECTION 11
PROHIBITION AGAINST DIVERSION
At no time shall any part of the Fund be used for or diverted to
purposes other than the exclusive benefit of the Members or their Beneficiaries,
subject, however, to the payment of all taxes and administrative expenses and
subject to the provisions of the Plan with respect to returns of contributions.
SECTION 12
LIMITATION OF RIGHTS
Membership in the Plan shall not give any Employee any right or claim
except to the extent that such right is specifically fixed under the terms of
the Plan. The adoption of the Plan and the Trust by any Plan Sponsor shall not
be construed to give any Employee a right to be continued in the employ of a
Plan Sponsor or as interfering with the right of a Plan Sponsor to terminate the
employment of any Employee at any time.
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27
SECTION 13
AMENDMENT TO OR TERMINATION OF THE PLAN AND THE TRUST
13.1 The Primary Sponsor reserves the right at any time to modify
or amend or terminate the Plan or the Trust in whole or in part by notice
thereof in writing delivered to the Trustee; provided, however, that the Primary
Sponsor shall have no power to modify or amend the Plan in such manner as would
cause or permit any portion of the funds held under a Plan to be used for, or
diverted to, purposes other than for the exclusive benefit of Members or their
Beneficiaries, or as would cause or permit any portion of a fund held under the
Plan to become the property of a Plan Sponsor; and provided further, that the
duties or liabilities of the Trustee shall not be increased without its written
consent. No such modifications or amendments shall have the effect of
retroactively changing or depriving Members or Beneficiaries of rights already
accrued under the Plan. No Plan Sponsor other than the Primary Sponsor shall
have the right to so modify, amend or terminate the Plan or the Trust.
Notwithstanding the foregoing, each Plan Sponsor may terminate its own
participation in the Plan and Trust pursuant to the Plan.
13.2 Each Plan Sponsor other than the Primary Sponsor shall have
the right to terminate its participation in the Plan and Trust by resolution of
its board of directors or other appropriate governing body and notice in writing
to the Primary Sponsor and the Trustee unless such termination would result in
the disqualification of the Plan or the Trust or would adversely affect the
exempt status of the Plan or the Trust as to any other Plan Sponsor. If
contributions by or on behalf of a Plan Sponsor are completely terminated, the
Plan and Trust shall be deemed terminated as to such Plan Sponsor. Any
termination by a Plan Sponsor shall not be a termination as to any other Plan
Sponsor.
(a) If the Plan is terminated by the Primary Sponsor or
if contributions to the Trust should be permanently discontinued, it
shall terminate as to all Plan Sponsors and the Fund shall be used,
subject to the payment of expenses and taxes, for the benefit of
Members and Beneficiaries, and for no other purposes, and the Account
of each affected Member shall be fully vested and nonforfeitable,
notwithstanding the provisions of the Section of the Plan which sets
forth the vesting schedule.
(b) In the event of the partial termination of the Plan,
each affected Member's Account shall be fully vested and
nonforfeitable, notwithstanding the provisions of the Section of the
Plan which sets forth the vesting schedule.
13.3 In the event of the termination of the Plan or the Trust with
respect to a Plan Sponsor, the Accounts of the Members with respect to the Plan
as adopted by such Plan Sponsor shall be held subject to the instructions of the
Plan Administrator; provided that the Trustee shall not be required to make any
distribution until it receives a copy of an Internal Revenue Service
determination letter to the effect that the termination does not affect the
qualified status of the Plan or the exempt status of the Trust or, in the event
that such letter is applied for and is not issued, until the Trustee is
reasonably satisfied that adequate provision has been made for the payment of
all taxes which may be due and owing by the Trust.
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28
13.4 In the case of any merger or consolidation of the Plan with,
or any transfer of the assets or liabilities of the Plan to any other plan
qualified under Code Section 401, the terms of such merger, consolidation or
transfer shall be such that each Member in the Plan would receive (in the event
of termination of the Plan or its successor immediately thereafter) a benefit
which is no less than the benefit which such Member would have received in the
event of termination of the Plan immediately before the merger, consolidation or
transfer.
13.5 Notwithstanding any other provision of the Plan, an amendment
to the Plan --
(a) which eliminates or reduces an early retirement
benefit, if any, or which eliminates or reduces a retirement-type
subsidy (as defined in regulations issued by the Department of the
Treasury), if any, or
(b) which eliminates an optional form of benefit
shall not be effective with respect to benefits attributable to service
before the amendment is adopted. In the case of a retirement-type
subsidy described in Subsection (a) above, this Section shall be
applicable only to a Member who satisfies, either before or after the
amendment, the preamendment conditions for the subsidy.
SECTION 14
ADOPTION OF PLAN BY AFFILIATES
Any corporation or other business entity related to the Primary Sponsor
by function or operation and any Affiliate, if the corporation, business entity
or Affiliate is authorized to do so by written direction adopted by the Board of
Directors, may adopt the Plan and the related Trust by action of the board of
directors or other appropriate governing body of such corporation, business
entity or Affiliate. Any adoption shall be evidenced by certified copies of the
resolutions of the foregoing board of directors or governing body indicating the
adoption and by the execution of the Trust by the adopting corporation, or
business entity or affiliate. The resolution shall state and define the
effective Date of the adoption of the Plan by the Plan Sponsor and, for the
purpose of Code Section 415, the "limitation year" as to such Plan Sponsor.
Notwithstanding the foregoing, however, if the Plan and Trust as adopted by an
Affiliate or other corporation or business entity under the foregoing provisions
shall fail to receive the initial approval of the Internal Revenue Service as a
qualified Plan and Trust under Code Sections 401(a) and 501(a), any
contributions by the Affiliate or other corporation or business entity after
payment of all expenses will be returned to such Plan Sponsor free of any trust,
and the Plan and Trust shall terminate, as to the adopting Affiliate or other
corporation or business entity.
26
29
SECTION 15
QUALIFICATION AND RETURN OF CONTRIBUTIONS
15.1 If the Plan and the related Trust fail to receive the initial
approval of the Internal Revenue Service as a qualified plan and trust within
one year after the date of denial of qualification (a) the contribution of a
Plan Sponsor after payment of all expenses will be returned to a Plan Sponsor
free of the Plan and Trust, (b) contributions made by a Member shall be returned
to the Member who made the contributions, and (c) the Plan and Trust shall
thereupon terminate.
15.2 If and to the extent permitted by the Code and other
applicable laws and regulations thereunder, upon a Plan Sponsor's request, a
contribution which was made by reason of a mistake of fact or upon the
deductibility of the contribution under Code Section 404, shall be returned to a
Plan Sponsor within one year after the payment of the contribution, or the
disallowance of the deduction (to the extent disallowed), whichever is
applicable.
In the event of a contribution which was made by reason of a mistake of
fact or which was conditioned upon the deductibility of the contribution, the
amount to be returned to the Plan Sponsor shall be the excess of the
contribution above the amount that would have been contributed had the mistake
of fact or the mistake in determining the deduction not occurred, less any net
loss attributable to the excess. Any net income attributable to the excess shall
not be returned to the Plan Sponsor. No return of any portion of the excess
shall be made to the Plan Sponsor if the return would cause the balance in a
Member's Account to be less than the balance would have been had the mistaken
contribution not been made.
SECTION 16
INCORPORATION OF SPECIAL LIMITATIONS
Appendices A, B and C to the Plan, attached hereto, are incorporated by
reference and the provisions of the same shall apply notwithstanding anything to
the contrary contained herein.
IN WITNESS WHEREOF, the Primary Sponsor has caused this indenture to be
executed as of the day and year first above written.
FIRST BANKING COMPANY OF SOUTHEAST
GEORGIA
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Title: /s/ President
-------------------------------------
ATTEST:
/s/
-----------------------------
Title: Secretary
-----------------------
[CORPORATE SEAL](C)
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APPENDIX A
LIMITATION ON ALLOCATIONS
SECTION 1
The "annual addition" for any Member for any one limitation year may not
exceed the lesser of:
(a) $30,000 (or, if greater, one-quarter of the dollar limitation in
effect under Code Section 415(b)(1)(A), as adjusted for changes in the cost
of living as provided in regulations issued by the Secretary of the
Treasury); or
(b) 25% of the Member's Annual Compensation.
SECTION 2
For the purposes of this Appendix A, the term "annual addition" for any
Member means for any limitation year, the sum of certain Plan Sponsor and Member
contributions, forfeitures, and other amounts as determined in Code Section
415(c)(2) in effect for that limitation year.
SECTION 3
In the event that a Plan Sponsor maintains a defined benefit plan under
which a Member also participates, the sum of the defined benefit plan fraction
and the defined contribution plan fraction for any limitation year for any
Member may not exceed 1.0.
(a) The defined benefit plan fraction for any limitation year is a
fraction:
(1) the numerator of which is the projected annual benefit of the
Member under the defined benefit plan (determined as of the close of
such year); and
(2) the denominator of which is the lesser of
(A) the product of 1.25, multiplied by the maximum annual
benefit allowable under Code Section 415(b)(1)(A), or
(B) the product of
(i) 1.4, multiplied by
(ii) the maximum amount which may be taken into
account under Code Section 415(b)(1)(B) with respect to the
Member under the defined benefit plan for the limitation
year (determined as of the close of the limitation year).
(b) The defined contribution plan fraction for any limitation year is
a fraction:
31
(1) the numerator of which is the sum of a Member's annual
additions as of the close of the year; and
(2) the denominator of which is the sum of the lesser of the
following amounts determined for the year and for all prior limitation
years during which the Member was employed by a Plan Sponsor:
(A) the product of 1.25, multiplied by the dollar limitation
in effect under Section 415(c)(1)(A) of the Code for the
limitation year (determined without regard to Code Section
415(c)(6)); or
(B) the product of
(i) 1.4, multiplied by
(ii) the amount which may be taken into account under
Code Section 415(c)(1)(B) (or Code Section 415(c)(7), if
applicable) with respect to the Member for the limitation
year.
SECTION 4
For purposes of this Appendix A, the term "limitation year" shall mean a
Plan Year unless a Plan Sponsor elects, by adoption of a written resolution, to
use any other twelve-month period adopted in accordance with regulations issued
by the Secretary of the Treasury. For purposes of applying the limitations set
forth in this Appendix A, the term "Plan Sponsor" shall mean a Plan Sponsor and
any other corporations which are members of the same controlled group of
corporations (as described in Code Section 414(b), as modified by Code Section
415(h)) as is a Plan Sponsor, any other trades or businesses (whether or not
incorporated) under common control (as described in Code Section 414(c), as
modified by Code Section 415(h)) with a Plan Sponsor, any other corporations,
partnerships, or other organizations which are members of an affiliated service
group (as described in Code Section 414(m)) with a Plan Sponsor, and any other
entity required to be aggregated with a Plan Sponsor pursuant to regulations
under Code Section 414(o).
SECTION 5
For purposes of applying the limitations of this Appendix A, all defined
contribution plans maintained or deemed to be maintained by a Plan Sponsor shall
be treated as one defined contribution plan, and all defined benefit plans now
or previously maintained or deemed to be maintained by a Plan Sponsor shall be
treated as one defined benefit plan.
A-2
32
SECTION 6
In the event that as a result of either the allocation of forfeitures to
the Account of a Member or a reasonable error in estimating the Member's Annual
Compensation, the annual addition allocated to the Account of a Member exceeds
the limitations set forth in Section 1 of this Appendix A or in the event that
the aggregate contributions made on behalf of a Member under both a defined
benefit plan and a defined contribution plan, subject to the reduction of
allocations in other defined contribution plans required by Section 5 of this
Appendix A, cause the aggregate limitation fraction set forth in Section 3 of
this Appendix A to be exceeded, the Plan Administrator shall, in writing, direct
the Trustee to take such of the following actions as the Plan Administrator
shall deem appropriate, specifying in each case the amount or amounts of
contributions involved:
(a) If reduction is necessary, contributions made by the Plan Sponsor
on behalf of the Member pursuant to Plan Section 3.1 shall be reduced in
the amount of the excess. The amount of the reduction of contributions
shall be reallocated to the Accounts of Members who are not affected by the
limitations in the same manner as the contribution of the Plan Sponsor for
the year is allocated under Plan Section 3.1 to the Accounts of the
Members; and
(b) If the contribution of the Plan Sponsor would cause the annual
addition to exceed the limitations set forth herein with respect to all
Members under the Plan, the portion of the contribution in excess of the
limitations shall be segregated in a suspense account. While the suspense
account is maintained, (1) no Plan Sponsor contributions under the Plan
shall be made which would be precluded by this Appendix A, (2) income,
gains and losses of the Fund shall not be allocated to such suspense
account and (3) amounts in the suspense account shall be allocated in the
same manner as Plan Sponsor contributions under the Plan as of each
Valuation Date on which Plan Sponsor contributions may be allocated until
the suspense account is exhausted. In the event of the termination of the
Plan, the amounts in the suspense account shall be returned to the Plan
Sponsor to the extent that such amounts may not then be allocated to the
Members' Accounts.(C)
X-0
00
XXXXXXXX X
TOP-HEAVY PROVISIONS
SECTION 1
As used in this Appendix B, the following words shall have the following
meanings:
(a) "Determination Date" means, with respect to any Plan Year, the
last day of the preceding Plan Year, or, in the case of the first Plan
Year, means the last day of the first Plan Year.
(b) "Key Employee" means an Employee or former Employee (including a
Beneficiary of a Key Employee or former Key Employee) who at any time
during the Plan Year containing the Determination Date or any of the four
(4) preceding Plan Years is:
(1) An officer described in Code Section 414(q)(1)(D);
(2) One of the ten (10) Employees owning both (A) more than
one-half percent (1/2%) of the outstanding stock of the Plan Sponsor,
more than one-half percent (1/2%) of the total combined voting power
of all stock of the Plan Sponsor, or more than one-half percent (1/2%)
of the capital or profits interest in the Plan Sponsor, and (B) the
largest percentage ownership interests in the Plan Sponsor or any of
its Affiliates, and whose Annual Compensation is equal to or greater
than the amount in effect under Section 1(a) of Appendix A to the Plan
for the calendar year in which the Determination Date falls; or
(3) An owner of more than five (5%) percent of the outstanding
stock of the Plan Sponsor or more than five (5%) percent of the total
combined voting power of all stock of such Plan Sponsor; or
(4) An owner of more than one (1%) percent of the outstanding
stock of the Plan Sponsor or more than one (1%) percent of the total
combined voting power of all stock of such Plan Sponsor, and who in
such Plan Year had Annual Compensation from such Plan Sponsor and all
of its Affiliates of more than $150,000.
Employees other than Key Employees are sometimes referred to in this
Appendix as "non-key employees."
(c) "Required Aggregation Group" means:
(1) each plan of the Plan Sponsor and its Affiliates which
qualifies under Code Section 40l(a) in which a Key Employee is a
participant, and
(2) each other plan of the Plan Sponsor and its Affiliates which
qualifies under Code Section 401 (a) and which enables any plan
described in Subsection (a) of this Section to meet the requirements
of Section 401(a)(4) or 410 of the Code.
B-1
34
(d) (1) "Top-Heavy" means:
(A) if the Plan is not included in a Required Aggregation
Group, the Plan's condition in a Plan Year for which, as of the
Determination Date:
(i) the present value of the cumulative Accrued Benefits
under the Plan for all Key Employees exceeds 60 percent of the
present value of the cumulative Accrued Benefits under the Plan
for all Members; and
(ii) the Plan, when included in every potential
combination, if any, with any or all of:
(I) any Required Aggregation Group, and
(II) any plan of the Plan Sponsor which is not
part of any Required Aggregation Group and which
qualifies under Code Section 401 (a)
is part of a Top-Heavy Group (as defined in Paragraph (2) of
this Subsection); and
(B) if the Plan is included in a Required Aggregation Group,
the Plan's condition in a Plan Year for which, as of the
Determination Date:
(i) the Required Aggregation Group is a Top-Heavy Group
(as defined in Paragraph (2) of this Subsection); and
(ii) the Required Aggregation Group, when included in
every potential combination, if any, with any or all of the
plans of the Plan Sponsor and its Affiliates which are not
part of the Required Aggregation Group and which qualify
under Code Section 401(a), is part of a Top-Heavy Group (as
defined in Paragraph (2) of this Subsection).
(C) For purposes of Subparagraphs (A)(i) and (B)(ii) of this
Paragraph (1), any combination of plans must satisfy the
requirements of Code Sections 401(a)(4) and 410.
(2) A group shall be deemed to be a Top-Heavy Group if:
(A) the sum, as of the Determination Date, of the present
value of the cumulative accrued benefits for all Key Employees
under all plans included in such group exceeds
(B) 60 percent of a similar sum determined for all
participants in such plans.
(3) (A) For purposes of this Section, the present value of the
accrued benefit for
B-2
35
any participant in a defined contribution plan as of any
Determination Date or last day of a plan year shall be the sum of:
(i) as to any defined contribution plan other than a
simplified employee pension, the account balance as of the
most recent valuation date occurring within the plan year
ending on the Determination Date or last day of a plan year,
and
(ii) as to any simplified employee pension, the
aggregate employer contributions, and
(iii) an adjustment for contributions due as of the
Determination Date or last day of a plan year.
In the case of a plan that is not subject to the minimum funding
requirements of Code Section 412, the adjustment in Clause (iii)
of this Subparagraph (A) shall be the amount of any contributions
actually made after the valuation date but on or before the
Determination Date or last day of the plan year to the extent not
included under Clause (i) or (ii) of this Subparagraph (A);
provided, however, that in the first plan year of the plan, the
adjustment in Clause (iii) of this Subparagraph (A) shall also
reflect the amount of any contributions made thereafter that are
allocated as of a date in such first plan year. In the case of a
plan that is subject to the minimum funding requirements, the
account balance in Clause (i) and the aggregate contributions in
Clause (ii) of this Subparagraph (A) shall include contributions
that would be allocated as of a date not later than the
Determination Date or last day of a plan year, even though those
amounts are not yet required to be contributed, and the
adjustment in Clause (iii) of this Subparagraph (A) shall be the
amount of any contribution actually made (or due to be made)
after the valuation date but before the expiration of the
extended payment period in Code Section 4l2(c)(10) to the extent
not included under Clause (i) or (ii) of this Subparagraph (A).
(B) For purposes of this Subsection, the present value of
the accrued benefit for any participant in a defined benefit plan
as of any Determination Date or last day of a plan year must be
determined as of the most recent valuation date which is within a
12-month period ending on the Determination Date or last day of a
plan year as if such participant terminated as of such valuation
date; provided, however, that in the first plan year of a plan,
the present value of the accrued benefit for a current
participant must be determined either (i) as if the participant
terminated service as of the Determination Date or last day of a
plan year or (ii) as if the participant terminated service as of
such valuation date, but taking into account the estimated
accrued benefit as of the Determination Date or last day of a
plan year. For purposes of this Subparagraph (B), the valuation
date must be the same valuation date used for computing plan
costs for minimum funding, regardless of whether a valuation is
performed that year. The actuarial assumptions utilized in
calculating the present value of the accrued benefit for any
participant in a defined benefit plan for purposes of this
Subparagraph (B) shall be established by the Plan Administrator
after
B-3
36
consultation with the actuary for the plan, and shall be
reasonable in the aggregate and shall comport with the
requirements set forth by the Internal Revenue Service in Q&A T-26
and T-27 of Regulation Section 1.416-1.
(C) For purposes of determining the present value of the
cumulative accrued benefit under a plan for any participant in
accordance with this Subsection, the present value shall be
increased by the aggregate distributions made with respect to the
participant (including distributions paid on account of death to
the extent they do not exceed the present value of the cumulative
accrued benefit existing immediately prior to death) under each
plan being considered, and under any terminated plan which if it
had not been terminated would have been in a Required Aggregation
Group with the Plan, during the 5-year period ending on the
Determination Date or last day of the plan year that falls within
the calendar year in which the Determination Date falls.
(D) For purposes of this Paragraph (3), participant
contributions which are deductible as "qualified retirement
contributions" within the meaning of Code Section 219 or any
successor, as adjusted to reflect income, gains, losses, and
other credits or charges attributable thereto, shall not be
considered to be part of the accrued benefits under any plan.
(E) For purposes of this Paragraph (3), if any employee is
not a Key Employee with respect to any plan for any plan year,
but such employee was a Key Employee with respect to such plan
for any prior plan year, any accrued benefit for such employee
shall not be taken into account.
(F) For purposes of this Paragraph (3), if any employee has
not performed any service for any Plan Sponsor or Affiliate
maintaining the plan during the five-year period ending on the
Determination Date, any accrued benefit for that employee shall
not be taken into account.
(G) (i) In the case of an "unrelated rollover" (as
defined below) between plans which qualify under Code
Section 401(a), (a) the plan providing the distribution
shall count the distribution as a distribution under
Subparagraph (C) of this Paragraph (3), and (b) the plan
accepting the distribution shall not consider the
distribution part of the accrued benefit under this Section;
and
(ii) in the case of a "related rollover" (as defined
below) between plans which qualify under Code Section
401(a), (a) the plan providing the distribution shall not
count the distribution as a distribution under Subparagraph
(C) of this Paragraph (3), and (b) the plan accepting the
distribution shall consider the distribution part of the
accrued benefit under this Section.
For purposes of this Subparagraph (G), an "unrelated
rollover" is a rollover as defined in Code Section 402(a)(5) or
408(d)(3) or a plan-to-plan transfer which is both initiated by
the participant and made from a plan maintained by one employer
B-4
37
to a plan maintained by another employer where the employers are
not Affiliates. For purposes of this Subparagraph (G), a "related
rollover" is a rollover as defined in Code Section 402(a)(5) or
408(d)(3) or a plan-to-plan transfer which is either not
initiated by the participant or made to a plan maintained by the
employer or an Affiliate.
SECTION 2
(a) Notwithstanding anything contained in the Plan to the contrary,
except as otherwise provided in Subsection (b) of this Section, in any Plan
Year during which the Plan is Top-Heavy, allocations of Plan Sponsor
contributions for the Plan Year for the Account of each Member who is not a
Key Employee and who has not separated from service with the Plan Sponsor
prior to the end of the Plan Year shall not be less than 3 percent of the
Member's Annual Compensation.
(b) (1) The percentage referred to in Subsection (a) of this Section
for any Plan Year shall not exceed the percentage at which allocations
are made or required to be made under the Plan for the Plan Year for
the Key Employee for whom the percentage is highest for the Plan Year.
(2) For purposes of this Subsection (b), all defined contribution
plans which are members of a Required Aggregation Group shall be
treated as part of the Plan.
(3) This Subsection (b) shall not apply to any plan which is a
member of a Required Aggregation Group if the plan enables a defined
benefit plan which is a member of the Required Aggregation Group to
meet the requirements of Code Section 401(a)(4) or 410.
SECTION 3
In any limitation year (as defined in Section 4 of Appendix A to the Plan)
which contains any portion of a Plan Year in which the Plan is Top-Heavy, the
number "1.0" shall be substituted for the number "1.25" in Section 3 of Appendix
A to the Plan.(C)
B-5
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APPENDIX C
PRIOR TARGET BENEFIT FORMULAS
SECTION 1
With respect to Members who terminated employment in Plan Years beginning
before January 1, 1991, a hypothetical amount providing a past service benefit
for Credited Service performed on and after January 1, 1986 and prior to January
1, 1989, and a future service benefit for Credited Service performed on and
after January 1, 1989. This amount shall be determined according to the
following formulas:
(a) The past service benefit shall equal the sum of:
(1) 0.95% of that portion of a Member's Annual Compensation for
the preceding Plan Year which is not in excess of 50% of the Maximum
Taxable Wage Base (as defined in the Prior Plan) for the preceding
Plan Year, and
(2) 1.90% of that portion, if any, of the Member's Annual
Compensation for the preceding Plan Year which is in excess of 50% of
the Maximum Taxable Wage Base for the preceding Plan Year,
for each year of Credited Service prior to January 1, 1989.
(b) The future service benefit shall equal the sum of:
(1) 1.17% of that portion of the Member's Annual Compensation for
the preceding Plan Year which is not in excess of the Integration
Level for the preceding Plan Year, plus
(2) 1.65% of that portion, if any, of the Member's Annual
Compensation for the preceding Plan Year which is in excess of
the Integration Level for the preceding Plan Year,
for each year of Credited Service performed on and after January 1, 1989;
provided, however, that in the case of an Employee whose Social Security
Normal Retirement Age is 66, the 1.17% base percent in (b)(1) increases to
1.202% and for an Employee whose Social Security Normal Retirement Age is
67, it increases to 1.234%.
If a Member's Years of Credited Service exceed 20, then years of Credited
Service shall be reduced to 20 by eliminating, in order, the earliest of such
years; and provided further that, if a Member's years of Credited Service are
less than 20, then an additional future service benefit for the Member shall be
determined by adding to the future service benefit provided above an additional
future service benefit equal to the product of (x) multiplied by (y), where
(x) is the benefit calculated above for the most recent year of
Credited Service, and
C-1
39
(y) is the lesser of
(i) the number of years by which the Member's years of Credited
Service are less than 20, and
(ii) the Member's projected remaining years of Credited Service
until the Plan Year in which the Member's Normal Retirement Age will
occur, or the current Plan Year if later.
In the case of an Employee who becomes a Member on a date other than the first
day of the Plan Year in which he becomes a Member, his benefit shall be 50% of
the sum set forth above.
SECTION 2
With respect to Members who terminated employment in Plan Years beginning
on and after January 1, 1991, but before January 1, 1994, a hypothetical amount
providing an annuity in the form of a single life annuity payable at Normal
Retirement Age or, if the Member does not retire upon attaining Normal
Retirement Age, at the Member's subsequent Retirement Date, in an amount equal
to the sum of (a), (b), (c) and (d) below:
(a) For each year of Credited Service earned prior to January 1, 1989
but on or after January 1, 1986, the sum of (1) .95% of that portion of a
Member's Annual Compensation (as determined under the Old Plan) which is
not in excess of fifty percent (50%) of the maximum Social Security taxable
wage base for the preceding Plan Year and (2) 1.90% of that portion, if
any, of the Member's Annual Compensation (as determined under the Old Plan)
which is in excess of fifty percent (50%) of the maximum Social Security
taxable wage base for the preceding Plan Year;
(b) For each year of Credited Service earned prior to January 1, 1991
but on and after January 1, 1989, the sum of (1) 1.17% of the Member's
Annual Compensation (as determined under the Old Plan) which is not in
excess of the Integration Level (as defined under the Old Plan) and (2)
1.65% of that portion, if any, of the Member's Annual Compensation (as
determined under the Old Plan) which is in excess of the Integration Level
(as defined under the Old Plan); provided, however, that in the case of an
Employee whose Social Security Normal Retirement Age is 66, the 1.17% base
percent shall be increased to 1.202% and in the case of an Employee whose
Social Security Normal Retirement Age is 67, the 1.17% base percent shall
be increased to 1.234%;
(c) For each year of Credited Service earned on and after January 1,
1991, the sum of (1) 1.65% of that portion of the Member's Annual
Compensation which is not in excess of the Integration Level and (2) 2.13%
of that portion, if any, of the Member's Annual Compensation which is in
excess of the Integration Level; provided, however, that in the case of an
Employee whose Social Security Normal Retirement Age is 66, the 1.65% base
percent shall be increased to 1.682% and in the case of an Employee whose
Social Security Normal Retirement Age is 67, the 1.65% base percent shall
be increased to 1.714%; and
C-2
40
(d) If a Member's years of Credited Service are less than twenty
(20), an additional amount equal to the product of (1) multiplied by (2)
below:
(1) the benefit calculated in (b) or (c) above, as applicable,
for the most recent year of Credited Service;
(2) the lesser of (A) the number of years by which the Member's
years of Credited Service are less than twenty (20) or (B) the lesser
of (i) the Member's projected remaining years of Credited Service
until the Plan Year in which the Member's Normal Retirement Age will
occur or, if later, (ii) one (1).
If a Member's years of Credited Service exceed twenty (20), then years of
Credited Service shall be reduced to twenty (20) by eliminating, in order, the
earliest of such years. In the case of an Employee who becomes a Member on a
date other than the first day of the Plan Year in which the Employee becomes a
Member, that person's benefit shall be fifty percent (50%) of the sum determined
above.
SECTION 3
For purposes of this Appendix C, the following terms shall have the
meanings set forth below:
"Integration Level" shall mean one hundred percent 100% of the Covered
Compensation for a Member reaching Social Security Normal Retirement Age during
the Plan Year.
"Covered Compensation" shall mean the average (without indexing) of the
taxable wage bases (under Section 230 of the Social Security Act) for the
thirty-five (35) calendar years ending with the year in which the Member attains
Social Security Normal Retirement Age. The Plan Administrator may rely upon
Table II of Attachment I of IRS Notice 89-70 and subsequent IRS publications in
determining Covered Compensation for a Member.
"Social Security Normal Retirement Age" means age 65 for Members born
before 1938, age 66 for Members born after 1937 and prior to 1955, and age 67
for Members born after 1954.(C)
X-0
00
XXXXXXXX X
ACTUARIAL TABLES
TABLE 1 TABLE 2 TABLE 3
------- ------- -------
Years From
Amortization Discount Normal Life Annuity Years From
Attained Age Factor at Retirement Factor at Attained Age Factor at
to NRA 7.5% Age 7.5% to NRA 7.5%
------------ --------- ---------- --------- ------------ ---------
0 1.000000 65 9.577341 0 1.000000
1 0.930233 66 9.363485 1 0.518072
2 0.865333 67 9.143797 2 0.357709
3 0.804961 68 8.918756 3 0.277737
4 0.748801 69 8.688831 4 0.229921
5 0.696559 70 8.454411 5 0.198181
6 0.647962 71 8.215848 6 0.175628
7 0.602755 72 7.973463 7 0.158816
8 0.560702 73 7.727789 8 0.145830
9 0.521583 74 7.479591 9 0.135522
10 0.485194 75 7.229849 10 0.127160
11 0.451343 76 6.979736 11 0.120258
12 0.419854 77 6.730541 12 0.114478
13 0.390562 78 6.483404 13 0.109579
14 0.363313 79 6.239227 14 0.105383
15 0.337966 80 5.998722 15 0.101759
16 0.314387 81 5.762373 16 0.098605
17 0.292453 17 0.095841
18 0.272049 18 0.093405
19 0.253069 19 0.091249
20 0.235413 20 0.089330
21 0.218989 21 0.087616
22 0.203711 22 0.086079
23 0.189498 23 0.084698
24 O.176277 24 0.083452
25 0.163979 25 0.082325
26 0.152539 26 0.081304
27 0.141896 27 0.080377
28 0.131997 28 0.079533
29 0.122788 29 0.078764
30 0.114221 30 0.078062
31 0.106252 31 0.077420
32 0.098839 32 0.076832
33 0.091943 33 0.076293
34 0.085529 34 0.075798
35 0.079562 35 0.075344
36 0.074011 36 0.074926
37 0.068847 37 0.074541
38 0.064044 38 0.074187
39 0.059576 39 0.073861
40 0.055419 40 0.073560
41 0.051553 41 0.073282
42 0.047956 42 0.073025
43 0.044610 43 0.072788
44 0.041498 44 0.072569
45 0.038603 45 0.072366
42
APPENDIX D
ACTUARIAL TABLES
TABLE 1 TABLE 2 TABLE 3 TABLE 4
------- ------- ------- -------
Years From Years From Years From Normal
Attained Age Attained Age Age 65 Retirement
to NRA 7.5% To Age 65 7.5% to NRA 7.5% Age 7.5%
------------ ---- ------------- ---- ----------- --- ---------- --------
46 0.072179
D-2
