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EXHIBIT 10.9
ALLIED EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER ........... 14
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY ............... 15
2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.......... 16
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR ................ 16
2.5 RECORDS AND REPORTS ................................... 17
2.6 APPOINTMENT OF ADVISERS ............................... 17
2.7 PAYMENT OF EXPENSES ................................... 18
2.8 CLAIMS PROCEDURE ...................................... 18
2.9 CLAIMS REVIEW PROCEDURE ............................... 18
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY ............................. 19
3.2 EFFECTIVE DATE OF PARTICIPATION ....................... 19
3.3 DETERMINATION OF ELIGIBILITY .......................... 19
3.4 TERMINATION OF ELIGIBILITY ............................ 19
3.5 OMISSION OF ELIGIBLE EMPLOYEE ......................... 20
3.6 INCLUSION OF INELIGIBLE EMPLOYEE ...................... 20
3.7 ELECTION NOT TO PARTICIPATE ........................... 20
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ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION.......... 20
4.2 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION .............. 21
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS .............................................. 21
4.4 MAXIMUM ANNUAL ADDITIONS .............................. 25
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS ............. 28
4.6 TRANSFERS FROM QUALIFIED PLANS ........................ 29
4.7 DIRECTED INVESTMENT ACCOUNT ........................... 31
4.8 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS ............ 32
ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY ..................................... 33
5.2 APPLICATION OF CASH ................................... 33
5.3 TRANSACTIONS INVOLVING COMPANY STOCK .................. 34
5.4 LOANS TO THE TRUST .................................... 35
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND ........................... 36
6.2 METHOD OF VALUATION ................................... 36
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT ............. 37
7.2 DETERMINATION OF BENEFITS UPON DEATH .................. 37
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7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY .. 39
7.4 DETERMINATION OF BENEFITS UPON TERMINATION ..... .. 39
7.5 DISTRIBUTION OF BENEFITS .......................... 43
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED .............. 47
7.7 DISTRIBUTION FOR MINOR BENEFICIARY ................ 48
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN .... 48
7.9 RIGHT OF FIRST REFUSALS ........................... 48
7.10 STOCK CERTIFICATE LEGEND .......................... 50
7.11 PUT OPTION ........................................ 50
7.12 NONTERMINABLE PROTECTIONS AND RIGHTS .............. 52
7.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION .. 53
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE ............. 53
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE ....... 54
8.3 OTHER POWERS OF THE TRUSTEE ....................... 55
8.4 LOANS TO PARTICIPANTS ............................. 58
8.5 VOTING COMPANY STOCK .............................. 60
8.6 DUTIES OF THE TRUSTEE REGARDING PAYMENTS .......... 60
8.7 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES ..... 61
8.8 ANNUAL REPORT OF THE TRUSTEE ...................... 62
8.9 AUDIT ............................................. 62
8.10 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE .... 63
8.11 TRANSFER OF INTEREST .............................. 64
8.12 DIRECT ROLLOVER ................................... 64
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ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT ........................................... 65
9.2 TERMINATION ......................................... 66
9.3 MERGER OR CONSOLIDATION ............................. 67
ARTICLE X
TOP HEAVY
10.1 TOP HEAVY PLAN REQUIREMENTS ......................... 67
10.2 DETERMINATION OF TOP HEAVY STATUS ................... 67
ARTICLE XI
MISCELLANEOUS
11.1 PARTICIPANT'S RIGHTS ................................ 71
11.2 ALIENATION .......................................... 71
11.3 CONSTRUCTION OF PLAN ................................ 72
11.4 GENDER AND NUMBER ................................... 72
11.5 LEGAL ACTION ........................................ 72
11.6 PROHIBITION AGAINST DIVERSION OF FUNDS .............. 73
11.7 BONDING ............................................. 73
11.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE .......... 73
11.9 INSURER'S PROTECTIVE CLAUSE ......................... 74
11.10 RECEIPT AND RELEASE FOR PAYMENTS .................... 74
11.11 ACTION BY THE EMPLOYER .............................. 74
11.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY ...................................... 74
11.13 HEADINGS ............................................ 75
11.14 APPROVAL BY INTERNAL REVENUE SERVICE ................ 75
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11.15 UNIFORMITY .......................................... 76
11.16 WAIVER OF FUNDING ................................... 76
11.17 SECURITIES AND EXCHANGE COMMISSION APPROVAL ......... 77
ARTICLE XII
PARTICIPATING EMPLOYERS
12.1 ADOPTION BY OTHER EMPLOYERS ......................... 77
12.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS ............. 77
12.3 DESIGNATION OF AGENT ................................ 78
12.4 EMPLOYEE TRANSFERS .................................. 78
12.5 PARTICIPATING EMPLOYER CONTRIBUTION ................. 79
12.6 AMENDMENT ........................................... 79
12.7 DISCONTINUANCE OF PARTICIPATION ..................... 79
12.8 ADMINISTRATOR'S AUTHORITY ........................... 80
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ALLIED EMPLOYEE STOCK OWNERSHIP
PLAN AND TRUST AGREEMENT
THIS AGREEMENT, hereby made and entered into this 31 day of
December, 1997, by and between Allied Capital Corporation (herein referred to as
the "Employer") and Xxxxxxx X. Xxxxxx and G. Xxxxxx Xxxxxxxx III (herein
referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established an Employee Stock
Ownership Plan and Trust effective January 1, 1990 (hereinafter called the
"Effective Date"), known as Allied Employee Stock Ownership Plan and Trust
Agreement (herein referred to as the "Plan") in recognition of the contribution
made to its successful operation by its employees and for the exclusive benefit
of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the provisions
of the Plan affecting the Trustee are amended; and
WHEREAS, contributions to the Plan will be made by the Employer and
such contributions made to the trust will be invested primarily in the capital
stock of the Employer;
NOW, THEREFORE, effective January 1, 1998, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to administer
the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of
a controlled group of corporations (as defined in Code Section 414 (b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414 (c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414 (m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
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1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 10.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the restrictions of
Sections 7.2 and 7.5.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Company Stock" means common stock issued by the Employer (or by a
corporation which is a member of the controlled group of corporations of which
the Employer is a member) which is readily tradeable on an established
securities market. If there is no common stock which meets the foregoing
requirement, the term "Company Stock" means common stock issued by the Employer
(or by a corporation which is a member of the same controlled group) having a
combination of voting power and dividend rights equal to or in excess of: (A)
that class of common stock of the Employer (or of any other such corporation)
having the greatest voting power, and (B) that class of common stock of the
Employer (or of any other such corporation) having the greatest dividend rights.
Noncallable preferred stock shall be deemed to be "Company Stock" if such stock
is convertible at any time into stock which constitutes "Company Stock"
hereunder and if such conversion is at a conversion price which (as of the date
of the acquisition by the Trust) is reasonable. For purposes of the preceding
sentence, pursuant to Regulations, preferred stock shall be treated as
noncallable if after the call there will be a reasonable opportunity for a
conversion which meets the requirements of the preceding sentence.
1.9 "Company Stock Account" means the account of a Participant which is
credited with the shares of Company Stock purchased and paid for by the Trust
Fund or contributed to the Trust Fund.
A separate accounting shall be maintained with respect to that portion
of the Company Stock Account attributable to the Money Purchase Pension Plan
and the Stock Bonus Plan.
1.10 "Compensation" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code Section 3401(a)
(for the purposes of income tax withholding at the source) but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401(a)(2)).
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For purposes of this Section, the determination of Compensation shall be
made by:
(a) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in
the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in
Code Section 414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation, Compensation shall be
recognized for the entire Plan Year.
Compensation in excess of $150,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment and restatement,
the definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of this amendment and
restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.11 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.12 "Current Obligations" means Trust obligations arising from extension of
credit to the Trust and payable in cash within (1) year from the date an
Employer contribution is due.
1.13 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.14 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to participate
in this Plan unless such Affiliated Employers have specifically adopted this
Plan in writing.
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1.15 "Employee" means any person who is employed by the Employer or
Affiliated Employer. Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and such Leased
Employees do not constitute more than 20% of the recipient's non-highly
compensated work force.
1.16 "Employer" means Allied Capital Corporation and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation with principal offices in the District of
Columbia. In addition, where appropriate, the term Employer shall include any
Participating Employer (as defined in Section 12.1) which shall adopt this Plan.
1.17 "ESOP" means an employee stock ownership plan that meets the
requirements of Code Section 4975 (e)(7) and Regulation 54.4975-11.
1.18 "Exempt Loan" means a loan made to the Plan by a disqualified person or
a loan to the Plan which is guaranteed by a disqualified person and which
satisfies the requirements of Section 2550.408b-3 of the Department of Labor
Regulations, Section 54.4975-7(b) of the Treasury Regulations and Section 5.4
hereof.
1.19 "Family Member" means, with respect to an affected Participant, such
Participant's spouse and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.22 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
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(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to Section 7.4(f)(2). In addition, the term Forfeiture shall also
include amounts deemed to be Forfeitures pursuant to any other provision of this
Plan.
1.23 "Former Participant" means a person who has been a Participant, but who
has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code Section
3401(a) (for the purposes of income tax withholding at the source) but
determined without regard to any rules that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in Code Section
3401(a)(2)).
For Plan Years beginning after December 31, 1997, for purposes of this
Section, the determination of "415 Compensation" shall be made by including
amounts which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the Participant
under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and
Employee contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
If, in connection with the adoption of this amendment and restatement,
the definition of "415 Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "415 Compensation" means compensation determined pursuant to the
Plan then in effect.
1.25 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section
1.30(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $80,000 and were in the
Top Paid Group of Employees during the "look-back year."
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The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
Notwithstanding the above, for the first Plan Year beginning after
December 31, 1996, the "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period").
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally,
the dollar threshold amount specified in (b) above shall be adjusted at such
time and in the same manner as under Code Section 415(d), except that the base
period shall be the calendar quarter ending September 30, 1996. In the case of
such an adjustment, the dollar limit which shall be applied is the limit for the
calendar year in which the "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are
not covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.26 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner." For purposes
of
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this Section, "determination year," "415 Compensation" and "five percent owner"
shall be determined in accordance with Section 1.25. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees. The method set forth
in this Section for determining who is a "Highly Compensated Former Employee"
shall be applied on a uniform and consistent basis for all purposes for which
the Code Section 414(q) definition is applicable.
1.27 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.28 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation
of damages (these hours will be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather than the
computation period in which the award, agreement or payment is made). The same
Hours of Service shall not be credited both under (1) or (2), as the case may
be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
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For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.29 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.30 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect under
Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in which
such Plan Year ends and owning (or considered as owning within the
meaning of Code Section 318) both more than one-half percent interest
and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning
of Code Section 318) more than five percent (5%) of the outstanding
stock of the Employer or stock possessing more than five percent (5%) of
the total combined voting power of all stock of the Employer or, in the
case of an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than one percent (1%) of the
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outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000,
"415 Compensation" from each employer required to be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(e)(3), 402(h)(1)
(B), 403(b) or 457(b), and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
1.31 "Late Retirement Date" means the first day of the month coinciding with
or next following a Participant's actual Retirement Date after having reached
his Normal Retirement Date.
1.32 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or
for the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one
year, and such services are performed under primary direction or control by
the recipient. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient employer shall be treated as provided by the recipient employer. A
Leased Employee shall not be considered an Employee of the recipient:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least 10% of
compensation, as defined in Code Section 415(c)(3), but including
amounts which are contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B), 403
(b) or 457(b), and Employee contributions described in Code Section 414
(h)(2) that are treated as Employer contributions.
(2) immediate participation; and
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(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.33 "Money Purchase Pension Plan" means the portion of the Plan that is
designed to qualify as such pursuant to Code Section 401(a).
1.34 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.35 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.36 "Normal Retirement Age" means the Participant's 60th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.37 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.38 "1-Year Break in Service" means the applicable computation period during
which an Employee has not completed more than 500 Hours of Service with the
Employer. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
Years of Service and 1-Year Breaks in Service shall be measured on the same
computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service
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per day. The total Hours of Service required to be credited for a "maternity or
paternity leave of absence" shall not exceed 501.
1.39 "Other Investments Account" means the account of a Participant which is
credited with his share of the net gain (or loss) of the Plan, Forfeitures and
Employer contributions in other than Company Stock and which is debited with
payments made to pay for Company Stock.
A separate accounting shall be maintained with respect to that portion
of the Other Investments Account attributable to the Money Purchase Pension Plan
and the Stock Bonus Plan.
1.40 "Participant" means any Eligible Employee who participates in the Plan
and has not for any reason become ineligible to participate further in the Plan.
1.41 "Participant's Account" means the account established and maintained by
the Administrator for each Participant with respect to his total interest in the
Plan and Trust resulting from the Employer contributions.
1.42 "Plan" means this instrument, including all amendments thereto.
1.43 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.44 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting from the
Participant's tax deductible qualified voluntary employee contributions made
pursuant to Section 4.8.
1.45 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.46 "Retired Participant" means a person who has been a Participant, but who
has become entitled to retirement benefits under the Plan.
1.47 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 7.1).
1.48 "Stock Bonus Plan" means the portion of the Plan that is designed to
qualify as such pursuant to Code Section 401(a).
1.49 "Super Top Heavy Plan" means a plan described in Section 10.2(b).
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1.50 "Terminated Participant" means a person who has been a Participant, but
whose employment has been terminated other than by death, Total and Permanent
Disability or retirement.
1.51 "Top Heavy Plan" means a plan described in Section 10.2(a).
1.52 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.53 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.25) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. Employees who are non-resident aliens and who
received no earned income (within the meaning of Code Section 911(d)(2)) from
the Employer constituting United States source income within the meaning of Code
Section 861(a)(3) shall not be treated as Employees. Additionally, for the
purpose of determining the number of active Employees in any year, the following
additional Employees shall also be excluded; however, such Employees shall still
be considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
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1.54 "Total and Permanent Disability" means a physical or mental condition of
a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.55 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.56 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.57 "Unallocated Company Stock Suspense Account" means an account containing
Company Stock acquired with the proceeds of an Exempt Loan and which has not
been released from such account and allocated to the Participants' Company Stock
Accounts.
1.58 "USERRA" means the Uniformed Services Employment and Reemployment Rights
Act of 1994. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Code Section 414(u).
1.59 "Valuation Date" means June 30th and December 31st and such other date
or dates deemed necessary by the Administrator. The Valuation Date may include
any day during the Plan Year that the Trustee, any transfer agent appointed by
the Trustee or the Employer and any stock exchange used by such agent are open
for business.
1.60 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.61 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least
1000 Hours of Service.
An Eligible Employee shall be treated as meeting the one (1) Year of Service
requirement of Section 3.1 as of the end of the first Plan Year in which the
Eligible Employee first performs an Hour of Service if the Eligible Employee has
completed at least 1,000 Hours of Service in such first Plan Year.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee
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who is credited with the required Hours of Service in both the initial
computation period (or the computation period beginning after a 1-Year Break in
Service) and the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service, shall be credited with two (2)
Years of Service for purposes of eligibility to participate.
For vesting purposes, the computation periods shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set forth
herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with Allied Capital Corporation, Allied Capital Lending
Corporation, including: Allied Capital Corporation II, Allied Capital Advisors,
Inc., or Allied Capital Commercial Corporation shall be recognized.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit
of the Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may appoint
counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or
desirable in connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or advisers
from the assets of the Plan as fiduciary expenses (but not including
any business (settlor) expenses of the Employer), to the extent not
paid by the Employer.
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(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee with respect to any
or all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the
investment.
(c) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to investment of
the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
(e) The Employer will furnish Plan Fiduciaries and Participants
with notices and information statements when voting rights must be
exercised pursuant to Section 8.5.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint any
person, including, but not limited to, the Employees of the Employer, to perform
the duties of the Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. Upon the resignation
or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
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2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify the
responsibilities of each Administrator. The Trustee thereafter shall accept
and rely upon any documents executed by the appropriate Administrator until
such time as the Employer or the Administrators file with the Trustee a
written revocation of such designation.
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the
power and discretion to construe the terms of the Plan and to determine all
questions arising in connection with the administration, interpretation, and
application of the Plan. Any such determination by the Administrator shall be
conclusive and binding upon all persons. The Administrator may establish
procedures, correct any defect, supply any information, or reconcile any
inconsistency in such manner and to such extent as shall be deemed necessary
or advisable to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be done in
a nondiscriminatory manner based upon uniform principles consistently applied
and shall be consistent with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Code Section 401 (a), and shall
comply with the terms of the Act and all regulations issued pursuant thereto.
The Administrator shall have all powers necessary or appropriate to accomplish
his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements from the
Trust;
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(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are consistent
with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable
to be contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order that
the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
(i) to establish and communicate to Participants a procedure
for allowing each Participant to direct the Trustee as to the
distribution of his Company Stock Account pursuant to Section 4.7;
(j) to establish and communicate to Participants a
procedure and method to insure that each Participant will vote
Company Stock allocated to such Participant's Company Stock Account
pursuant to Section 8.5;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.5 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other data that
may be necessary for proper administration of the Plan and shall be
responsible for supplying all information and reports to the Internal Revenue
Service, Department of Labor, Participants, Beneficiaries and others as
required by law.
2.6 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee
deems necessary or desirable in connection with the administration of this
Plan, including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with
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maintaining Plan records and the providing of investment information to the
Plan's investment fiduciaries.
2.7 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any Named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, and other specialists and their agents, and
other costs of administering the Plan. Until paid, the expenses shall
constitute a liability of the Trust Fund.
2.8 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In
the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim
will be provided. In addition, the claimant shall be furnished with an
explanation of the Plan's claims review procedure.
2.9 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section
2.8 shall be entitled to request the Administrator to give further
consideration to his claim by filing with the Administrator (on a form which
may be obtained from the Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.8. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written
notice to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator
which are pertinent to the claim at issue and its disallowance. Either the
claimant or the Administrator may cause a court reporter to attend the hearing
and record the proceedings. In such event, a complete written transcript of
the proceedings shall be furnished to both parties by the court reporter. The
full expense of any such court reporter and
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such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall
be made by the Administrator within 60 days of receipt of the appeal (unless
there has been an extension of 60 days due to special circumstances, provided
the delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and
has attained age 21 shall be eligible to participate hereunder as of the date
he has satisfied such requirements. However, any Employee who was a
Participant in the Plan prior to the effective date of this amendment and
restatement shall continue to participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
first day of the Plan Year in which such Employee met the eligibility
requirements of Section 3.1.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all
persons, as long as the same is made pursuant to the Plan and the Act. Such
determination shall be subject to review per Section 2.9.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible Employee,
such Former Participant shall continue to vest in his interest in
the Plan for each Year of Service completed while a noneligible
Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in
the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate
but has not incurred a 1-Year
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Break in Service, such Employee will participate immediately upon
returning to an eligible class of Employees. If such Participant
incurs a 1-Year Break in Service, eligibility will be determined
under the break in service rules of the Plan.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution with respect to the
omitted Employee in the amount which the said Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a
Forfeiture for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate
must be communicated to the Employer, in writing, at least thirty (30) days
before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
(a) For each Plan Year, the Employer shall contribute to
the Stock Bonus Plan such amount as shall be determined by the
Employer.
(b) The Employer shall make contributions to the Money
Purchase Pension Plan over such period of years as the Employer
may determine on the following basis. On behalf of each
Participant eligible to share in allocations, for each year of his
participation in this Plan, the Employer shall contribute 5% of
his annual Compensation.
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Only Participants who have completed a Year of Service
during the Plan Year shall be eligible to share in the Employer
contribution to the Money Purchase Pension Plan for the year.
(c) The Employer contribution shall not be limited to
years in which the Employer has current or accumulated net
profit. Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top
heavy minimum contribution. All contributions by the Employer
shall be made in cash or in such property as is acceptable to the
Trustee.
(d) Should the Employer, for any reason, fail to make a
contribution to the Money Purchase Pension Plan as provided for
herein, then such deficiency shall be made up in subsequent years
pursuant to Section 11.16.
4.2 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
Employer contributions will be paid in cash, Company Stock or
other property as the Employer may from time to time determine. Company Stock
and other property will be valued at their then fair market value. The
Employer shall pay to the Trustee its contribution to the Plan for each Plan
Year within the time prescribed by law, including extensions of time, for the
filing of the Employer federal income tax return for the Fiscal Year.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date all amounts allocated to
each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer Stock Bonus Plan contributions for each
Plan Year. Within a reasonable period of time after the date of
receipt by the Administrator of such information, the
Administrator shall allocate such contribution to each
Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
Only Participants who have completed a Year of Service
during the Plan Year shall be eligible to share in the
discretionary contribution for the year.
(c) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer Money Purchase
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Pension Plan contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall
allocate such contribution to each eligible Participant's Account
in accordance with Section 4.1.
(d) The Company Stock Account of each Participant shall be
credited as of each Anniversary Date with Forfeitures of Company
Stock and his allocable share of Company Stock (including
fractional shares) purchased and paid for by the Plan or
contributed in kind by the Employer. Stock dividends on Company
Stock held in his Company Stock Account shall be credited to his
Company Stock Account when paid. Cash dividends on Company Stock
held in his Company Stock Account shall, in the sole discretion of
the Administrator, either be credited to his Other Investments
Account when paid or be used to repay an Exempt Loan; provided,
however, that when cash dividends are used to repay an Exempt
Loan, Company Stock shall be released from the Unallocated Company
Stock Suspense Account and allocated to the Participant's Company
Stock Account pursuant to Section 4.3(g) and, provided further,
that Company Stock allocated to the Participant's Company Stock
Account shall have a fair market value not less than the amount of
cash dividends which would have been allocated to such
Participant's Other Investments Account for the year.
Company Stock acquired by the Plan with the proceeds
of an Exempt Loan shall only be allocated to each Participant's
Company Stock Account upon release from the Unallocated Company
Stock Suspense Account as provided in Section 4.3(g) herein.
Company Stock acquired with the proceeds of an Exempt Loan shall
be an asset of the Trust Fund and maintained in the Unallocated
Company Stock Suspense Account.
(e) As of each Valuation Date, before the current
valuation period allocation of Employer contributions and
Forfeitures, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the same
proportion that each Participant's and Former Participant's
nonsegregated accounts (other than each Participant's Company
Stock Account) bear to the total of all Participants' and Former
Participants' nonsegregated accounts (other than Participants'
Company Stock Accounts) as of such date.
Earnings or losses do not include the interest paid
under any installment contract for the purchase of Company Stock
by the Trust Fund or on any loan used by the Trust Fund to
purchase Company Stock, nor does it include income received by the
Trust Fund with respect to Company Stock acquired with the
proceeds of an Exempt
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Loan; all income received by the Trust Fund from Company Stock
acquired with the proceeds of an Exempt Loan may, at the
discretion of the Administrator, be used to repay such loan.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings
and losses (net appreciation or net depreciation) of the Trust Fund
in the same manner provided above. Each segregated account
maintained on behalf of a Participant shall be credited or charged
with its separate earnings and losses.
(f) Participants' accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited with any
dividends received on insurance contracts.
(g) All Company Stock acquired by the Plan with the
proceeds of an Exempt Loan must be added to and maintained in the
Unallocated Company Stock Suspense Account. Such Company Stock
shall be released and withdrawn from that account as if all
Company Stock in that account were encumbered. For each Plan Year
during the duration of the loan, the number of shares of Company
Stock released shall equal the number of encumbered shares held
immediately before release for the current Plan Year multiplied by
a fraction, the numerator of which is the amount of principal and
interest paid for the Plan Year and the denominator of which is
the sum of the numerator plus the principal and interest to be
paid for all future Plan Years. As of each Anniversary Date, the
Plan must consistently allocate to each Participant's Account, in
the same manner as Employer discretionary contributions pursuant
to Section 4.1(a) are allocated, non-monetary units (shares and
fractional shares of Company Stock) representing each
Participant's interest in Company Stock withdrawn from the
Unallocated Company Stock Suspense Account. However, Company
Stock released from the Unallocated Company Stock Suspense Account
with cash dividends pursuant to Section 4.3(d) shall be allocated
to each Participant's Company Stock Account in the same proportion
that each such Participant's number of shares of Company Stock
sharing in such cash dividends bears to the total number of shares
of all Participants' Company Stock sharing in such cash
dividends. Income earned with respect to Company Stock in the
Unallocated Company Stock Suspense Account shall be used, at the
discretion of the Administrator, to repay the Exempt Loan used to
purchase such Company Stock. Company Stock released from the
Unallocated Company Stock Suspense Account with such income, and
any income which is not so used, shall be allocated as of each
Anniversary Date in the same proportion that each Participant's
and Former
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Participant's nonsegregated accounts after the allocation of any
earnings or losses pursuant to Section 4.3(e) bear to the total
of all Participants' and Former Participants' nonsegregated
accounts after the allocation of any earnings or losses pursuant
to Section 4.3(e).
(h) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate previously forfeited account balances of
Former Participants, if any, in accordance with Section 7.4(f)(2).
The remaining Forfeitures, if any, shall be added to any Employer
discretionary contribution made pursuant to Section 4.1(a) and for
the Plan Year in which such Forfeitures occur allocated among the
Participants' Accounts in the same manner as any Employer
discretionary contribution for the current year.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.4) to any Participant's Account to exceed the
amount allowable by the Code, the excess shall be reallocated in
accordance with Section 4.5.
(i) For any Top Heavy Plan Year, Non-Key Employees not
otherwise eligible to share in the allocation of contributions and
Forfeitures as provided above, shall receive the minimum
allocation provided for in Section 4.3(k) if eligible pursuant to
the provisions of Section 4.3(m).
(j) Notwithstanding the foregoing, Participants who are
not actively employed on the last day of the Plan Year due to
Retirement (Normal or Late), Total and Permanent Disability or
death shall share in the allocation of contributions and
Forfeitures for that Plan Year.
(k) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the
sum of the Employer contributions and Forfeitures allocated to the
Participant's Account of each Non-Key Employee shall be equal to
at least three percent (3%) of such Non-Key Employee's 415
Compensation" (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution
plan included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer contributions and
Forfeitures allocated to the Participant's Account of each Key
Employee for such Top Heavy Plan Year is less than three percent
(3%) of each Key Employee's "415 Compensation" and (2) this Plan
is not required to be included in an Aggregation Group to
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enable a defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, the sum of the Employer contributions
and Forfeitures allocated to the Participant's Account of each
Non-Key Employee shall be equal to the largest percentage
allocated to the Participant's Account of any Key Employee.
(1) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Account of
any Key Employee shall be equal to the ratio of the sum of the
Employer contributions and Forfeitures allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(m) For any Top Heavy Plan Year, the minimum allocations
set forth above shall be allocated to the Participant's Account of
all Non-Key Employees who are Participants and who are employed by
the Employer on the last day of the Plan Year, including Non-Key
Employees who have (1) failed to complete a Year of Service; and
(2) declined to make mandatory contributions (if required) to the
Plan.
(n) For the purposes of this Section, "415 Compensation"
shall be limited to $150,000. Such amount shall be adjusted for
increases in the cost of living in accordance with Code Section
401(a)(17), except that the dollar increase in effect on January
1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any short Plan
Year the 415 Compensation" limit shall be an amount equal to the
"415 Compensation" limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).
(o) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall
be maintained as follows:
(1) one account for nonforfeitable benefits attributable
to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.4 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d) pursuant to
the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for
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such "limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1) Employer
contributions, (2) Employee contributions, (3) forfeitures, (4)
amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2) which is part of a
pension or annuity plan maintained by the Employer and (5) amounts
derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however, the
"415 Compensation" percentage limitation referred to in paragraph
(a)(2) above shall not apply to: (1) any contribution for medical
benefits (within the meaning of Code Section 419A(f)(2)) after
separation from service which is otherwise treated as an "annual
addition," or (2) any amount otherwise treated as an "annual
addition" under Code Section-415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the following are not "annual additions": (1) the
transfer of funds from one qualified plan to another and (2)
provided no more than one-third of the Employer contributions for
the year are allocated to Highly Compensated Participants,
Forfeitures of Company Stock purchased with the proceeds of an
Exempt Loan and Employer contributions applied to the payment of
interest on an Exempt Loan. In addition, the following are not
Employee contributions for the purposes of Section 4.4(b)(2):
(1) rollover contributions (as defined in Code Sections 402(a)
(5), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments
of loans made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code Section 411
(a)(7)(B) (cash-outs); (4) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section
408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
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(e) For the purpose of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained by
the Employer shall be treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or businesses
under common control (as defined by Code Section 1563(a) or Code
Section 414(b) and (c) as modified by Code Section 415(h)), is a
member of an affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all
Employees of such Employers shall be considered to be employed by
a single Employer.
(g) For the purpose of this Section, if this Plan is a
Code Section 413(c) plan, each Employer who maintains this Plan
will be considered to be a separate Employer.
(h)(1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which have
different Anniversary Dates, the maximum "annual additions" under
this Plan shall equal the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited to such Participant's accounts during the "limitation
year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412
maintained by the Employer which have the same Anniversary
Date, "annual additions" will be credited to the
Participant's accounts under the defined contribution plan
subject to Code Section 412 prior to crediting "annual
additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412
maintained by the Employer which have the same Anniversary
Date, the maximum "annual additions" under this Stock Bonus
Plan shall equal the product of (A) the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited under subparagraphs
(1) or (2) above, multiplied by (B) a fraction
(i) the numerator of which is the "annual
additions" which would be credited to such Participant's
accounts under this Stock Bonus Plan
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without regard to the limitations of Code Section 415 and
(ii) the denominator of which is such "annual additions"
for all plans described in this subparagraph.
(i) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made
with respect to any Participant under the limits of Section 4.4 or
other facts and circumstances to which Regulation 1. 415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would
cause the maximum "annual additions" to be exceeded for any
Participant, the Administrator shall (1) distribute any elective
deferrals (within the meaning of Code Section 402(g)(3)) or return
any Employee contributions (whether voluntary or mandatory),
and for the distribution of gains attributable to those elective
deferrals and Employee contributions, to the extent that the
distribution or return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining
after the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) allocate and
reallocate the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary)
to all Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are made to
the Plan for such "limitation year" (4) reduce Employer
contributions to the Plan for such "limitation year" by the amount
of the "Section 415 suspense account" allocated and reallocated
during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any,
of (1) the "annual additions" which would be credited to his
account under the terms of the Plan without regard to the
limitations of Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section 4.4.
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(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all Participants in the Plan during the
"limitation year." The "Section 415 suspense account" shall not
share in any earnings or losses of the Trust Fund.
(d) The Plan may not distribute or return "excess amounts,"
other than elective deferrals (within the meaning of Code
Section 402(g)(3)) or Employee contributions (whether voluntary or
mandatory) and gains attributable to such elective deferrals and
Employee contributions, to Participants or Former Participants.
4.6 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, provided
that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred shall be
set up in a separate account herein referred to as a "Participant's
Rollover Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or
in part, except as provided in paragraphs (c) and (d) of this
Section.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), amounts attributable to elective
contributions (as defined in Regulation 1.401(k)-1(g)(3)),
including amounts treated as elective contributions, which are
transferred from another qualified plan in a plan-to-plan transfer
shall be subject to the distribution limitations provided for in
Regulation 1.401(k)-l(d).
(d) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute all or a portion of the
amount credited to the Participant's Rollover Account. Any
distributions of amounts held in a Participant's Rollover Account
shall be made in a manner which is consistent with and satisfies
the provisions of Section 7.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in
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determining whether an involuntary cash-out of benefits without
Participant consent may be made.
(e) The Administrator may direct that employee transfers
made after a valuation date be segregated into a separate account
for each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan association,
money market certificate, or other short term debt security
acceptable to the Trustee until such time as the allocations
pursuant to this Plan have been made, at which time they may
remain segregated or be invested as part of the general Trust
Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "amounts transferred from other qualified plans"
shall mean: (i) amounts transferred to this Plan directly from
another qualified plan; (ii) distributions from another qualified
plan which are eligible rollover distributions and which are
either transferred by the Employee to this Plan within sixty (60)
days following his receipt thereof or are transferred pursuant to
a direct rollover; (iii) amounts transferred to this Plan from a
conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible for
tax-free rollover to a qualified plan and (C) were deposited in
such conduit individual retirement account within sixty (60) days
of receipt thereof and other than earnings on said assets; and
(iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above,
and transferred by the Employee to this Plan within sixty (60)
days of his receipt thereof from such conduit individual
retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish
that the amounts to be transferred to this Plan meet the
requirements of this Section and may also require the Employee to
provide an opinion of counsel satisfactory to the Employer that
the amounts to be transferred meet the requirements of this
Section.
(h) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a
defined benefit plan, money purchase plan (including a target
benefit plan), stock bonus or profit sharing plan which would
otherwise
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have provided for a life annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of
any "Section 411(d)(6) protected benefit" as described in Section
9.1.
4.7 DIRECTED INVESTMENT ACCOUNT
(a) Each "Qualified Participant" may elect within ninety
(90) days after the close of each Plan Year during the "Qualified
Election Period" to direct the Trustee in writing as to the
distribution in cash and/or Company Stock of 25 percent of the
total number of shares of Company Stock acquired by or contributed
to the Plan that have ever been allocated to such "Qualified
Participant's" Company Stock Account (reduced by the number of
shares of Company Stock previously distributed in cash and/or
Company Stock pursuant to a prior election). In the case of the
election year in which the Participant can make his last election,
the preceding sentence shall be applied by substituting "50
percent" for "25 percent." If the "Qualified Participant" elects to
direct the Trustee as to the distribution of his Company Stock
Account, such direction shall be effective no later than 180 days
after the close of the Plan Year to which such direction applies.
Any such distribution of Company Stock shall be subject to Section
7.11.
Notwithstanding the above, if the fair market value
(determined pursuant to Section 6.1 at the Plan Valuation Date
immediately preceding the first day on which a "Qualified
Participant" is eligible to make an election) of Company Stock
acquired by or contributed to the Plan and allocated to a
"Qualified Participant's" Company Stock Account is $500 or less,
then such Company Stock shall not be subject to this paragraph.
For purposes of determining whether the fair market value exceeds
$500, Company Stock held in accounts of all employee stock
ownership plans (as defined in Code Section 4975(e)(7)) and tax
credit employee stock ownership plans (as defined in Code Section
409(a)) maintained by the Employer or any Affiliated Employer shall
be considered as held by the Plan.
(b) For the purposes of this Section the following
definitions shall apply:
(1) "Qualified Participant" means any Participant or
Former Participant who has completed ten (10)
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Years of Service as a Participant and has attained age 55.
(2) "Qualified Election Period" means the six (6) Plan
Year period beginning with the later of (i) the first Plan
Year in which the Participant first became a "Qualified
Participant," or (ii) the first Plan Year beginning after
December 31, 1986.
4.8 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) Any voluntary employee contribution made in cash after
December 31, 1981 attributable to taxable years ending before
January 1, 1987, shall be treated as a "Qualified Voluntary
Employee Contribution" within the meaning of Code Section 219(e)(2)
as it existed prior to the enactment of the Tax Reform Act of
1986, and held in a separate Qualified Voluntary Employee
Contribution Account.
(b) The balance in each Participant's Qualified Voluntary
Employee Contribution Account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(c) A Participant may, upon written request delivered to
the Administrator, make withdrawals from his Qualified Voluntary
Employee Contribution Account. Any distribution shall be made in
a manner which is consistent with and satisfies the provisions of
Section 7.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Qualified Voluntary
Employee Contribution Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
(e) Unless the Administrator directs Qualified Voluntary
Employee Contributions made pursuant to this Section be segregated
into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate or other
short term debt security acceptable to the Trustee, they shall be
invested as part of the general Trust Fund and share in earnings
and losses.
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ARTICLE V
FUNDING AND INVESTMENT POLICY
5.1 INVESTMENT POLICY
(a) The Plan is designed to invest primarily in Company
Stock.
(b) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds under
the Plan in other property described in the Trust or in life
insurance policies to the extent permitted by subparagraph (c)
below, or the Trustee may hold such funds in cash or cash
equivalents.
(c) With due regard to subparagraph (a) above, the
Administrator may also direct the Trustee to invest funds under
the Plan in insurance policies on the life of any "keyman"
Employee. The proceeds of a "keyman" insurance policy may not be
used for the repayment of any indebtedness owed by the Plan which
is secured by Company Stock. In the event any "keyman" insurance
is purchased by the Trustee, the premiums paid thereon during any
Plan Year, net of any policy dividends and increases in cash
surrender values, shall be treated as the cost of Plan investment
and any death benefit or cash surrender value received shall be
treated as proceeds from an investment of the Plan.
(d) The Plan may not obligate itself to acquire Company
Stock from a particular holder thereof at an indefinite time
determined upon the happening of an event such as the death of the
holder.
(e) The Plan may not obligate itself to acquire Company
Stock under a put option binding upon the Plan. However, at the
time a put option is exercised, the Plan may be given an option to
assume the rights and obligations of the Employer under a put
option binding upon the Employer.
(f) All purchases of Company Stock shall be made at a
price which, in the judgment of the Administrator, does not exceed
the fair market value thereof. All sales of Company Stock shall
be made at a price which, in the judgment of the Administrator, is
not less than the fair market value thereof. The valuation rules
set forth in Article VI shall be applicable.
5.2 APPLICATION OF CASH
Employer contributions in cash and other cash received by the
Trust Fund shall first be applied to pay any Current obligations of the Trust
Fund.
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5.3 TRANSACTIONS INVOLVING COMPANY STOCK
(a) No portion of the Trust Fund attributable to (or
allocable in lieu of) Company Stock acquired by the Plan in a sale
to which Code Section 1042 applies may accrue or be allocated
directly or indirectly under any plan maintained by the Employer
meeting the requirements of Code Section 401(a):
(1) during the "Nonallocation Period," for the benefit of
(i) any taxpayer who makes an election under Code
Section 1042 (a) with respect to Company Stock,
(ii) any individual who is related to the
taxpayer (within the meaning of Code Section 267(b)),
or
(2) for the benefit of any other person who owns (after
application of Code Section 318(a) applied without regard to
the employee trust exception in Code Section 318(a)(2)(B)
(i)) more than 25 percent of
(i) any class of outstanding stock of the Employer
or Affiliated Employer which issued such Company
Stock, or
(ii) the total value of any class of outstanding
stock of the Employer or Affiliated Employer.
(b) Except, however, subparagraph (a)(1)(ii) above shall
not apply to lineal descendants of the taxpayer, provided that the
aggregate amount allocated to the benefit of all such lineal
descendants during the "Nonallocation Period" does not exceed more
than five (5) percent of the Company Stock (or amounts allocated
in lieu thereof) held by the Plan which are attributable to a sale
to the Plan by any person related to such descendants (within the
meaning of Code Section 267(c)(4)) in a transaction to which Code
Section 1042 is applied.
(c) A person shall be treated as failing to meet the stock
ownership limitation under paragraph (a)(2) above if such person
fails such limitation:
(1) at any time during the one (1) year period ending on
the date of sale of Company Stock to the Plan, or
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(2) on the date as of which Company Stock is allocated to
Participants in the Plan.
(d) For purposes of this Section, "Nonallocation Period"
means the period beginning on the date of the sale of the Company
Stock and ending on the later of:
(1) the date which is ten (10) years after the date
of sale, or
(2) the date of the Plan allocation attributable to the
final payment of the Exempt Loan incurred in connection with
such sale.
5.4 LOANS TO THE TRUST
(a) The Plan may borrow money for any lawful purpose,
provided the proceeds of an Exempt Loan are used within a reasonable
time after receipt only for any or all of the following purposes:
(1) To acquire Company Stock.
(2) To repay such loan.
(3) To repay a prior Exempt Loan.
(b) All loans to the Trust which are made or guaranteed by
a disqualified person must satisfy all requirements applicable to
Exempt Loans including but not limited to the following:
(1) The loan must be at a reasonable rate of interest;
(2) Any collateral pledged to the creditor by the Plan shall
consist only of the Company Stock purchased with the borrowed
funds;
(3) Under the terms of the loan, any pledge of Company
Stock shall provide for the release of shares so pledged on a
pro-rata basis pursuant to Section 4.3(g);
(4) Under the terms of the loan, the creditor shall have no
recourse against the Plan except with respect to such
collateral, earnings attributable to such collateral, Employer
contributions (other than contributions of Company Stock) that
are made to meet Current Obligations and earnings attributable
to such contributions;
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(5) The loan must be for a specific term and may not be
payable at the demand of any person, except in the case of
default;
(6) In the event of default upon an Exempt Loan, the value
of the Trust Fund transferred in satisfaction of the Exempt
Loan shall not exceed the amount of default. If the lender
is a disqualified person, an Exempt Loan shall provide for a
transfer of Trust Funds upon default only upon and to the
extent of the failure of the Plan to meet the payment
schedule of the Exempt Loan;
(7) Exempt Loan payments during a Plan Year must not
exceed an amount equal to: (A) the sum, over all Plan Years,
of all contributions and cash dividends paid by the Employer
to the Plan with respect to such Exempt Loan and earnings on
such Employer contributions and cash dividends, less (B) the
sum of the Exempt Loan payments in all preceding Plan
Years. A separate accounting shall be maintained for such
Employer contributions, cash dividends and earnings until
the Exempt Loan is repaid.
(c) For purposes of this Section, the term "disqualified
person" means a person who is a Fiduciary, a person providing
services to the Plan, an Employer any of whose Employees are
covered by the Plan, an employee organization any of whose members
are covered by the Plan, an owner, direct or indirect, of 50% or
more of the total combined voting power of all classes of voting
stock or of the total value of all classes of the stock, or an
officer, director, 10% or more shareholder, or a highly compensated
Employee.
ARTICLE VI
VALUATIONS
6.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust Fund as it
exists on the Valuation Date. In determining such net worth, the Trustee
shall value the assets comprising the Trust Fund at their fair market value as
of the Valuation Date and shall deduct all expenses for which the Trustee has
not yet obtained reimbursement from the Employer or the Trust Fund.
6.2 METHOD OF VALUATION
Valuations must be made in good faith and based on all relevant
factors for determining the fair market value of securities. In the case of a
transaction between a Plan and a
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disqualified person, value must be determined as of the date of the
transaction. For all other Plan purposes, value must be determined as of the
most recent Valuation Date under the Plan. An independent appraisal will not
in itself be a good faith determination of value in the case of a transaction
between the Plan and a disqualified person. However, in other cases, a
determination of fair market value based on at least an annual appraisal
independently arrived at by a person who customarily makes such appraisals and
who is independent of any party to the transaction will be deemed to be a good
faith determination of value. Company Stock not readily tradeable on an
established securities market shall be valued by an independent appraiser
meeting requirements similar to the requirements of the Regulations prescribed
under Code Section 170(a)(1).
ARTICLE VII
DETERMINATION AND DISTRIBUTION OF BENEFITS
7.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer
to a later date, in which event the participation of such Participant in the
Plan, including the right to receive allocations pursuant to Section 4.3,
shall continue until his Late Retirement Date. Upon a Participant's
Retirement Date or attainment of his Normal Retirement Date without
termination of employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall, at the election of the Participant, distribute
all amounts credited to such Participant's Account in accordance with Sections
7.5 and 7.6.
7.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited
to such Participant's Account shall become fully Vested. If
elected, distribution of the Participant's Account shall commence
not later than one (1) year after the close of the Plan Year in
which such Participant's death occurs. The Administrator shall
direct the Trustee, in accordance with the provisions of Sections
7.5 and 7.6, to distribute the value of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 7.5 and 7.6, to distribute any remaining
Vested amounts credited to the accounts of a deceased Former
Participant to such Former Participant's Beneficiary.
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(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be taken
into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the value
of the account of a deceased Participant or Former Participant as the
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may at
any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent only
to a specific Beneficiary and that the spouse voluntarily elected to
relinquish such right. In the event no valid designation of Beneficiary
exists at the time of the Participant's death, the death benefit shall
be payable to his estate.
(f) Any consent by the Participant's spouse to waive any rights
to the death benefit must be in writing, must acknowledge the effect of
such waiver, and be witnessed by a Plan representative or a notary
public. Further, the spouse's consent must be irrevocable and must
acknowledge the specific nonspouse Beneficiary.
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7.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all
amounts credited to such Participant's Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 7.5 and 7.6, shall distribute to
such Participant all amounts credited to such Participant's Account as though
he had retired. If such Participant elects, distribution shall commence not
later than one (1) year after the close of the Plan Year in which Total and
Permanent Disability occurs.
7.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability or retirement, such Participant shall be entitled to
such benefits as are provided hereinafter pursuant to this Section
7.4.
If a portion of a Participant's Account is forfeited,
Company Stock allocated to the Participant's Company Stock Account
must be forfeited only after the Participant's Other Investments
Account has been depleted. If interest in more than one class of
Company Stock has been allocated to a Participant's Account, the
Participant must be treated as forfeiting the same proportion of
each such class.
In the event that the amount of the Vested portion of
the Terminated Participant's Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so
directed by the Administrator and agreed to by the Terminated
Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on his life in such form or
with such endorsements so that the settlement options and forms of
payment are consistent with the provisions of Section 7.5. In the
event that the Terminated Participant's Vested portion does not at
least equal the fair market value of the Contracts, if any, the
Terminated Participant may pay over to the Trustee the sum needed
to make the distribution equal to the value of the Contracts being
assigned or transferred, or the Trustee, pursuant to the
Participant's election, may borrow the cash value of the Contracts
from the insurer so that the value of the Contracts is equal to the
Vested portion of the Terminated Participant's Account and then
assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated
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Participant remained in the employ of the Employer (upon the Participant's
death, Total and Permanent Disability or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct the Trustee to
cause the entire Vested portion of the Terminated Participant's Account to be
payable to such Terminated Participant as soon as practicable but in no event
later than in the case of a Participant, Former Participant, or Beneficiary
(as the case may be) who requests a distribution in accordance with this
Article on or after January 1 but before June 30 of a Plan Year, 180 days
after such June 30 provided that the Participant or Former Participant has not
completed 1,000 or more Hours of Service during the Plan Year in which the
request is made; or in the case of any other Participant, Former Participant,
or Beneficiary (as the case may be) who requests a distribution in accordance
with this Article, 180 days after the close of the Plan Year in which the
request is made. Any distribution under this paragraph shall be made in a
manner which is consistent with and satisfies the provisions of Sections 7.5
and 7.6, including, but not limited to, all notice and consent requirements of
Code Section 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's Vested benefit derived
from Employer and Employee contributions (including accumulated Qualified
Voluntary Employee Contributions) does not exceed $3,500 ($5,000 for Plan
Years beginning after August 5, 1997) and has never exceeded $3,500 or
$5,000, whichever is applicable, at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire Vested benefit to
be paid to such Participant in a single lump sum.
For purposes of this Section 7.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall be
deemed to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account for any
Participant who terminated employment prior to January 1, 1995 shall be a
percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of Service
according to the following schedule:
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Vesting Schedule
Years of Service Percentage
Less than 2 0 %
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
Effective January 1, 1995, a Participant shall become fully vested
in his Participant's Account upon completion of two (2) Years of Service.
(c) Notwithstanding the vesting schedule above, the Vested percentage
of a Participant's Account shall not be less than the Vested percentage
attained as of the later of the effective date or adoption date of this
amendment and restatement.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any full or
partial termination of the Plan, all amounts credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
(e) The computation of a Participant's nonforfeitable percentage of
his interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Plan. For this purpose, the Plan shall be treated
as having been amended if the Plan provides for an automatic change in vesting
due to a change in top heavy status. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period may elect to
have his nonforfeitable percentage computed under the Plan without regard to
such amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the amendment and shall
end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the amendment
from the Employer or Administrator.
(f)(1) If any Former Participant shall be reemployed by Employer
before a 1-Year Break in
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Service occurs, he shall continue to participate in the Plan in the same
manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received, or was deemed to have received, a
distribution of his entire Vested interest prior to his reemployment,
his forfeited account shall be reinstated only if he repays the full
amount distributed to him before the earlier of five (5) years after
the first date on which the Participant is subsequently reemployed by
the Employer or the close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the distribution, or in the
event of a deemed distribution, upon the reemployment of such Former
Participant. In the event the Former Participant does repay the full
amount distributed to him, or in the event of a deemed distribution,
the undistributed portion of the Participant's Account must be restored
in full, unadjusted by any gains or losses occurring subsequent to the
Valuation Date coinciding with or preceding his termination. The
source for such reinstatement shall first be any Forfeitures occurring
during the year. If such source is insufficient, then the Employer
shall contribute an amount which is sufficient to restore any such
forfeited Accounts provided, however, that if a discretionary
contribution is made for such year, such contribution shall first be
applied to restore any such Accounts and the remainder shall be
allocated in accordance with Section 4.3.
(3) If any Former Participant is reemployed after a 1-Year Break in
Service has occurred, Years of Service shall include Years of Service
prior to his 1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in Service, his
pre-break and post-break service shall be used for computing
Years of Service for eligibility and for vesting purposes only
after he has been employed for one (1) Year of Service following
the date of his reemployment with the Employer;
(ii) Any Former Participant who under the Plan does not have a
nonforfeitable right to any interest in the Plan resulting from
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Employer contributions shall lose credits otherwise
allowable under (i) above if his consecutive 1-Year
Breaks in Service equal or exceed the greater of (A)
five (5) or (B) the aggregate number of his pre-break
Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance
attributable to pre-break service shall not be
increased as a result of post-break service;
(iv) If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service
disregarded pursuant to (ii) above completes a Year of
Service for eligibility purposes following his
reemployment with the Employer, he shall participate in
the Plan retroactively from his date of reemployment;
(v) If a Former Participant who has not had his
Years of Service before a 1-Year Break in Service
disregarded pursuant to (ii) above completes a Year of
Service (a 1-Year Break in Service previously occurred,
but employment had not terminated), he shall
participate in the Plan retroactively from the first
day on which he is credited with an Hour of Service
after the first eligibility computation period in which
he incurs a 1-Year Break in Service.
(g) In determining Years of Service for purposes of
vesting under the Plan, Years of Service prior to the vesting
computation period in which an Employee attained his eighteenth
birthday shall be excluded.
7.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant (or if no election has been made prior to the
Participant's death, by his Beneficiary), shall direct the Trustee
to distribute to a Participant or his Beneficiary any amount to
which he is entitled under the Plan in one lump-sum payment.
(b) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded, $3,500 ($5, 000 for Plan
Years beginning after August 5, 1997) at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior
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to the later of his Normal Retirement Age or age 62. With regard to this
required consent:
(1) The Participant must be informed of his right to defer receipt of
the distribution. If a Participant fails to consent, it shall be
deemed an election to defer the distribution of any benefit. However,
any election to defer the receipt of benefits shall not apply with
respect to distributions which are required under Section 7.5(e).
(2) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the date
the distribution commences.
(3) Written consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not be made
more than 90 days before the date the distribution commences.
(4) No consent shall be valid if a significant detriment is imposed
under the Plan on any Participant who does not consent to the
distribution.
Any such distribution may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given, provided that: (1) the
Administrator clearly informs the Participant that the Participant has a right
to a period of at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.
(c) Notwithstanding anything herein to the contrary, the
Administrator, in his sole discretion, may direct that cash dividends on
shares of Company Stock allocable to Participants' or Former Participants'
Company Stock Accounts be distributed to such Participants or Former
Participants within 90 days after the close of the Plan Year in which the
dividends are paid.
(d) Any part of a Participant's benefit which is retained in the Plan
after the Anniversary Date on which his participation ends will continue to be
treated as a Company Stock Account or as an Other Investments Account (subject
to Section 7.4(a)) as provided in Article IV.
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However, neither account will be credited with any further Employer
contributions or Forfeitures.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits shall be made in accordance with the
following requirements and shall otherwise comply with Code Section 401(a)(9)
and the Regulations thereunder (including Regulation 1.401(a)(9)-2), the
provisions of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must begin to be
distributed to him not later than April 1st of the calendar year
following the later of (i) the calendar year in which the Participant
attains age 70 1/2 or (ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall not apply in
the case of a Participant who is a "five (5) percent owner" at any time
during the five (5) Plan Year period ending in the calendar year in
which he attains age 70 1/2 or, in the case of a Participant who
becomes a "five (5) percent owner" during any subsequent Plan Year,
clause (ii) shall no longer apply and the required beginning date shall
be the April 1st of the calendar year following the calendar year in
which such subsequent Plan Year ends. Such distributions shall be
equal to or greater than any required distribution.
(2) Distributions to a Participant and his Beneficiaries shall only be
made in accordance with the incidental death benefit requirements of
Code Section 401(a)(9)(G) and the Regulations thereunder.
(f) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance
with the following requirements and shall otherwise comply with Code Section
401 (a) (9) and the Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest has begun and
the Participant dies before his entire interest has been distributed to him,
the remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected pursuant to Section 7.5
as of his date of death. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations, then his
death benefit shall be distributed to his Beneficiaries
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by December 31st of the calendar year in which the fifth anniversary of his
date of death occurs.
However, in the event that the Participant's spouse (determined as
of the date of the Participant's death) is his Beneficiary, then in lieu of
the preceding rules, distributions must be made over a period not extending
beyond the life expectancy of the spouse and must commence on or before the
later of: (1) December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st of the
calendar year in which the Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse begin, then the
5-year distribution requirement of this Section shall apply as if the spouse
was the Participant.
(g) For purposes of this Section, the life expectancy of a Participant
and a Participant's spouse may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations. The
election, once made, shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the Participant and
the Participant's spouse shall not be subject to recalculation.
Life expectancy and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation 1.72-9.
(h) Except as limited by Sections 7.5 and 7.6, whenever the Trustee is
to make a distribution, the distribution may be made as soon as is
practicable. However, unless a Former Participant elects in writing to defer
the receipt of benefits (such election may not result in a death benefit that
is more than incidental), the payment of benefits shall occur not later than
the 60th day after the close of the Plan Year in which the latest of the
following events occurs:
(1) the date on which the Participant attains the earlier of age 65 or
the Normal Retirement Age specified herein;
(2) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(3) the date the Participant terminates his service with the Employer.
(i) If a distribution is made at a time when a Participant is not
fully Vested in his Participant's Account and the Participant may increase the
Vested percentage in such account:
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(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion
of the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance
at the relevant time, D is the amount of distribution, and R
is the ratio of the account balance at the relevant time to
the account balance after distribution.
7.6 HOW PLAN BENEFIT WILL BE DISTRIBUTED
(a) Distribution of a Participant's Is benefit may be made
in cash or Company Stock or both, provided, however, that if a
Participant or Beneficiary so demands, such benefit shall be
distributed only in the form of Company Stock. Prior to making a
distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to demand
that benefits be distributed solely in Company Stock.
(b) If a Participant or Beneficiary demands that benefits
be distributed solely in Company Stock, distribution of a
Participant's benefit will be made entirely in whole shares or
other units of Company Stock. Any balance in a Participant's
other Investments Account will be applied to acquire for
distribution the maximum number of whole shares or other units of
Company Stock at the then fair market value. Any fractional unit
value unexpended will be distributed in cash. If Company Stock is
not available for purchase by the Trustee, then the Trustee shall
hold such balance until Company Stock is acquired and then make
such distribution, subject to Sections 7.5(h) and 7.5(e).
(c) The Trustee will make distribution from the
Trust only on instructions from the Administrator.
(d) Notwithstanding anything contained herein to
the contrary, if the Employer charter or by-laws restrict
ownership of substantially all shares of Company Stock to
Employees and the Trust Fund, as described in Code Section
409(h)(2), the Administrator shall distribute a Participant's
Account entirely in cash without granting the Participant the
right to demand distribution in shares of Company Stock.
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(e) Except as otherwise provided herein, Company Stock
distributed by the Trustee may be restricted as to sale or transfer
by the by-laws or articles of incorporation of the Employer,
provided restrictions are applicable to all Company Stock of the
same class. If a Participant is required to offer the sale of his
Company Stock to the Employer before offering to sell his Company
Stock to a third party, in no event may the Employer pay a price
less than that offered to the distributee by another potential
buyer making a bona fide offer and in no event shall the Trustee
pay a price less than the fair market value of the Company Stock.
(f) If Company Stock acquired with the proceeds of an
Exempt Loan (described in Section 5.4 hereof) is available for
distribution and consists of more than one class, a Participant or
his Beneficiary must receive substantially the same proportion of
each such class.
7.7 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom
the Beneficiary maintains his residence, or to the custodian for such
Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if
such is permitted by the laws of the state in which said Beneficiary resides.
Such a payment to the legal guardian, custodian or parent of a minor
Beneficiary shall fully discharge the Trustee, Employer, and Plan from further
liability on account thereof.
7.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such
Participant or his Beneficiary, the amount so distributable shall be treated
as a Forfeiture pursuant to the Plan. In the event a Participant or
Beneficiary is located subsequent to his benefit being reallocated, such
benefit shall be restored unadjusted for earnings or losses.
7.9 RIGHT OF FIRST REFUSALS
(a) If any Participant, his Beneficiary or any other
person to whom shares of Company Stock are distributed from the
Plan (the "Selling Participant") shall, at any time, desire to
sell some or all of such shares (the "Offered Shares") to a third
party (the
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"Third Party"), the Selling Participant shall give written notice of such
desire to the Employer and the Administrator, which notice shall contain the
number of shares offered for sale, the proposed terms of the sale and the
names and addresses of both the Selling Participant and Third Party. Both
the Trust Fund and the Employer shall each have the right of first refusal
for a period of fourteen (14) days from the date the Selling Participant
gives such written notice to the Employer and the Administrator (such
fourteen (14) day period to run concurrently against the Trust Fund and the
Employer) to acquire the offered Shares. As between the Trust Fund and the
Employer, the Trust Fund shall have priority to acquire the shares pursuant
to the right of first refusal. The selling price and terms shall be the same
as offered by the Third Party.
(b) If the Trust Fund and the Employer do not exercise their right of
first refusal within the required fourteen (14) day period provided above,
the Selling Participant shall have the right, at any time following the
expiration of such fourteen (14) day period, to dispose of the Offered Shares
to the Third Party; provided, however, that (i) no disposition shall be made
to the Third Party on terms more favorable to the Third Party than those set
forth in the written notice delivered by the Selling Participant above, and
(ii) if such disposition shall not be made to a third party on the terms
offered to the Employer and the Trust Fund, the offered Shares shall again be
subject to the right of first refusal set forth above.
(c) The closing pursuant to the exercise of the right of first refusal
under Section 7.9(a) above shall take place at such place agreed upon between
the Administrator and the Selling Participant, but not later than ten (10)
days after the Employer or the Trust Fund shall have notified the Selling
Participant of the exercise of the right of first refusal. At such closing,
the Selling Participant shall deliver certificates representing the Offered
Shares duly endorsed in blank for transfer, or with stock powers attached
duly executed in blank with all required transfer tax stamps attached or
provided for, and the Employer or the Trust Fund shall deliver the purchase
price, or an appropriate portion thereof, to the Selling Participant.
(d) Except as provided in this paragraph (d), no Company Stock
acquired with the proceeds of an Exempt Loan complying with the requirements
of Section 5.4 hereof shall be subject to a right of first refusal. Company
Stock acquired with the proceeds of an Exempt Loan, which is distributed to a
Participant or Beneficiary, shall be subject to the right of first
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refusal provided for in paragraph (a) of this Section only so long
as the Company Stock is not publicly traded. The term "publicly
traded" refers to a securities exchange registered under Section 6
of the Securities Exchange Act of 1934 (15 U.S.C. 78f) or that is
quoted on a system sponsored by a national securities association
registered under Section 15A(b) of the Securities Exchange Act (15
U.S.C. 780). In addition, in the case of Company Stock which was
acquired with the proceeds of a loan described in Section 5.4, the
selling price and other terms under the right must not be less
favorable to the seller than the greater of the value of the
security determined under Section 6.2, or the purchase price and
other terms offered by a buyer (other than the Employer or the
Trust Fund), making a good faith offer to purchase the security.
The right of first refusal must lapse no later than fourteen (14)
days after the security holder gives notice to the holder of the
right that an offer by a third party to purchase the security has
been made. The right of first refusal shall comply with the
provisions of paragraphs (a), (b) and (c) of this Section, except
to the extent those provisions may conflict with the provisions of
this paragraph.
7.10 STOCK CERTIFICATE LEGEND
Certificates for shares distributed pursuant to the Plan shall
contain the following legend:
"The shares represented by this certificate are transferable only
upon compliance with the terms of ALLIED EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST AGREEMENT effective as of January 1, 1998, which grants to Allied
Capital Corporation a right of first refusal, a copy of said Plan being on
file in the office of the Company."
7.11 PUT OPTION
(a) If Company Stock which was not acquired with the
proceeds of an Exempt Loan is distributed to a Participant and
such Company Stock is not readily tradeable on an established
securities market, a Participant has a right to require the
Employer to repurchase the Company Stock distributed to such
Participant under a fair valuation formula. Such Stock shall be
subject to the provisions of Section 7.11(c).
(b) Company Stock which is acquired with the proceeds of
an Exempt Loan and which is not publicly traded when distributed,
or if it is subject to a trading limitation when distributed, must
be subject to a put option. For purposes of this paragraph, a
"trading limitation" on a Company Stock is a restriction under any
Federal or State securities law or any regulation
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thereunder, or an agreement (not prohibited by Section 7.12) affecting the
Company Stock which would make the Company Stock not as freely tradeable as
stock not subject to such restriction.
(c) The put option must be exercisable only by a Participant, by the
Participant's donees, or by a person (including an estate or its distributee)
to whom the Company Stock passes by reason of a Participant's death. (Under
this paragraph Participant or Former Participant means a Participant or
Former Participant and the beneficiaries of the Participant or Former
Participant under the Plan.) The put option must permit a Participant to put
the Company Stock to the Employer. Under no circumstances may the put option
bind the Plan. However, it shall grant the Plan an option to assume the
rights and obligations of the Employer at the time that the put option is
exercised. If it is known at the time a loan is made that Federal or State
law will be violated by the Employer honoring such put option, the put option
must permit the Company Stock to be put, in a manner consistent with such
law, to a third party (e.g., an affiliate of the Employer or a shareholder
other than the Plan) that has substantial net worth at the time the loan is
made and whose net worth is reasonably expected to remain substantial.
The put option shall commence as of the day following the date
the Company Stock is distributed to the Former Participant and end 60 days
thereafter and if not exercised within such 60-day period, an additional
60-day option shall commence on the first day of the fifth month of the Plan
Year next following the date the stock was distributed to the Former
Participant (or such other 60-day period as provided in Regulations).
However, in the case of Company Stock that is publicly traded without
restrictions when distributed but ceases to be so traded within either of the
60-day periods described herein after distribution, the Employer must notify
each holder of such Company Stock in writing on or before the tenth day after
the date the Company Stock ceases to be so traded that for the remainder of
the applicable 60-day period the Company Stock is subject to the put option.
The number of days between the tenth day and the date on which notice is
actually given, if later than the tenth day, must be added to the duration of
the put option. The notice must inform distributees of the term of the put
options that they are to hold. The terms must satisfy the requirements of
this paragraph.
The put option is exercised by the holder notifying the Employer
in writing that the put option is being exercised; the notice shall state the
name and address of the holder and the number of shares to be
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sold. The period during which a put option is exercisable does not
include any time when a distributee is unable to exercise it
because the party bound by the put option is prohibited from
honoring it by applicable Federal or State law. The price at which
a put option must be exercisable is the value of the Company Stock
determined in accordance with Section 6.2. Payment under the put
option involving a "Total Distribution" shall be paid in
substantially equal monthly, quarterly, semiannual or annual
installments over a period certain beginning not later than thirty
(30) days after the exercise of the put option and not extending
beyond (5) years. The deferral of payment is reasonable if
adequate security and a reasonable interest rate on the unpaid
amounts are provided. The amount to be paid under the put option
involving installment distributions must be paid not later than
thirty (30) days after the exercise of the put option. Payment
under a put option must not be restricted by the provisions of a
loan or any other arrangement, including the terms of the Employer
articles of incorporation, unless so required by applicable state
law.
For purposes of this Section, "Total Distribution"
means a distribution to a Participant or his Beneficiary within
one taxable year of the entire Vested Participant's Account.
(d) An arrangement involving the Plan that creates a put
option must not provide for the issuance of put options other than
as provided under this Section. The Plan (and the Trust Fund) must
not otherwise obligate itself to acquire Company Stock from a
particular holder thereof at an indefinite time determined upon the
happening of an event such as the death of the holder.
7.12 NONTERMINABLE PROTECTIONS AND RIGHTS
No Company Stock, except as provided in Section 7.10 and Section
7.11(b), acquired with the proceeds of a loan described in Section 5.4 hereof
may be subject to a put, call, or other option, or buy-sell or similar
arrangement when held by and when distributed from the Trust Fund, whether or
not the Plan is then an ESOP. The protections and rights granted in this
Section are nonterminable, and such protections and rights shall continue to
exist under the terms of this Plan so long as any Company Stock acquired with
the proceeds of a loan described in Section 5.4 hereof is held by the Trust
Fund or by any Participant or other person for whose benefit such protections
and rights have been created, and neither the repayment of such loan nor the
failure of the Plan to be an ESOP, nor an amendment of the Plan shall cause a
termination of said protections and rights.
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7.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VIII
TRUSTEE
8.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories
of responsibilities:
(1) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and
control the Plan assets subject, however, to the
direction of the Employer or an Investment Manager
appointed by the Employer or any agent of the
Employer;
(2) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to
Participants, or, in the event of their death, to
their Beneficiaries; and
(3) To maintain records of receipts and
disbursements and furnish to the Employer and/or
Administrator for each Plan Year a written annual
report per Section 8.8.
(b) In the event that the Trustee shall be directed
by the Employer, or an Investment Manager or other agent
appointed by the Employer with respect to the investment of
any or all Plan assets, the Trustee shall have no liability
with respect to the investment of such assets, but shall be
responsible only to execute such investment instructions as so
directed.
(1) The Trustee shall be entitled to rely fully on
the written instructions of the Employer, or any
Fiduciary or nonfiduciary agent of the Employer, in
the discharge of such duties, and shall not be liable
for any loss or other liability, resulting from such
direction (or lack
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of direction) of the investment of any part of the
Plan assets.
(2) The Trustee may delegate the duty to execute
such instructions to any nonfiduciary agent, which may
be an affiliate of the Trustee or any Plan
representative.
(c) If there shall be more than one Trustee, they
shall act by a majority of their number, but may authorize one
or more of them to sign papers on their behalf.
8.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust
Fund to keep the Trust Fund invested without distinction
between principal and income and in such securities or
property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks,
common or preferred, bonds and other evidences of indebtedness
or ownership, and real estate or any interest therein. The
Trustee shall at all times in making investments of the Trust
Fund consider, among other factors, the short and long-term
financial needs of the Plan on the basis of information
furnished by the Employer. In making such investments, the
Trustee shall not be restricted to securities or other
property of the character expressly authorized by the
applicable law for trust investments; however, the Trustee
shall give due regard to any limitations imposed by the Code
or the Act so that at all times the Plan may qualify as an
Employee Stock Ownership Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
(c) In the event the Trustee invests any part of the
Trust Fund, pursuant to the directions of the Administrator,
in any shares of stock issued by the Employer, and the
Administrator thereafter directs the Trustee to dispose of
such investment, or any part thereof, under circumstances
which, in the opinion of counsel for the Trustee, require
registration of the securities under the Securities Act of
1933 and/or qualification of the securities under the Blue Sky
laws of any state or states, then the Employer at its own
expense, will take or cause to be taken any and all such
action as may be necessary or appropriate to effect such
registration and/or qualification.
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(d) The Trustee, at the direction of the
Administrator, shall ratably apply for, own, and pay premiums
on Contracts on the lives of the Participants. If a life
insurance policy is to be purchased for a Participant, the
aggregate premium for ordinary life insurance for each
Participant must be less than 50% of the aggregate of the
contributions and Forfeitures to the credit of the Participant
at any particular time. If term insurance is purchased with
such contributions, the aggregate premium must be less than
25% of the aggregate contributions and Forfeitures allocated
to a Participant's Account. If both term insurance and
ordinary life insurance are purchased with such contributions,
the amount expended for term insurance plus one-half of the
premium for ordinary life insurance may not in the aggregate
exceed 25% of the aggregate contributions and Forfeitures
allocated to a Participant's Account. The Trustee must convert
the entire value of the life insurance contracts at or before
retirement into cash or provide for a periodic income so that
no portion of such value may be used to continue life
insurance protection beyond retirement, or distribute the
Contracts to the Participant. In the event of any conflict
between the terms of this Plan and the terms of any insurance
Contract purchased hereunder, the Plan provisions shall
control. Notwithstanding anything hereinabove to the contrary,
amounts credited to a Participant's Qualified Voluntary
Employee Contribution Account shall not be applied to the
purchase of life insurance contracts.
8.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of the
Plan, shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same. In conjunction with the
purchase of securities, margin accounts may be opened and
maintained;
(b) To sell, exchange, convey, transfer, grant
options to purchase, or otherwise dispose of any securities or
other property held by the Trustee, by private contract or at
public auction. No person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers
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of attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate
securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with
respect to stocks, bonds, securities, or other property.
However, the Trustee shall not vote proxies relating to
securities for which it has not been assigned full investment
management responsibilities. In those cases where another
party has such investment authority or discretion, the Trustee
will deliver all proxies to said party who will then have full
responsibility for voting those proxies;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one or
more of the Trustee's nominees, and to hold any investments in
bearer form, but the books and records of the Trustee shall at
all times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the
Plan in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and for any sum so borrowed,
to issue a promissory note as Trustee, and to secure the
repayment thereof by pledging all, or any part, of the Trust
Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any
borrowing;
(f) To keep such portion of the Trust Fund in cash
or cash balances as the Trustee may, from time to time, deem
to be in the best interests of the Plan, without liability for
interest thereon;
(g) To accept and retain for such time as the
Trustee may deem advisable any securities or other property
received or acquired as Trustee hereunder, whether or not such
securities or other property would normally be purchased as
investments hereunder;
(h) To make, execute, acknowledge, and deliver any
and all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or
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administrative proceedings, and to represent the Plan in all
suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent or
counsel may or may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or
other Contracts as and when entitled to do so under the
provisions thereof;
(l) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in the
Trustee's bank;
(m) To invest in Treasury Bills and other forms of
United States government obligations;
(n) To invest in shares of investment companies
registered under the Investment Company Act of 1940;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations;
(p) To vote Company Stock as provided in Section
8.5;
(q) To consent to or otherwise participate in
reorganizations, recapitalizations, consolidations, mergers
and similar transactions with respect to Company Stock or any
other securities and to pay any assessments or charges in
connection therewith;
(r) To deposit such Company Stock (but only if such
deposit does not violate the provisions of Section 8.5 hereof)
or other securities in any voting trust, or with any
protective or like committee, or with a trustee or with
depositories designated thereby;
(s) To sell or exercise any options, subscription
rights and conversion privileges and to make any payments
incidental thereto;
(t) To exercise any of the powers of an owner, with
respect to such Company Stock and other securities
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or other property comprising the Trust Fund. The
Administrator, with the Trustee's approval, may authorize the
Trustee to act on any administrative matter or class of
matters with respect to which direction or instruction to the
Trustee by the Administrator is called for hereunder without
specific direction or other instruction from the
Administrator;
(u) To sell, purchase and acquire put or call
options if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by a
member firm of the New York Stock Exchange;
(v) To do all such acts and exercise all such
rights and privileges, although not specifically mentioned
herein, as the Trustee may deem necessary to carry out the
purposes of the Plan.
8.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion,
make loans to Participants and Beneficiaries under the
following circumstances: (1) loans shall be made available to
all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (3)
loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) No Participant loan shall take into account the
present value of such Participant's Qualified Voluntary
Employee Contribution Account.
(c) Loans made pursuant to this Section (when added
to the outstanding balance of all other loans made by the Plan
to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan
to the Participant during the one year period
ending on the day before the date on which such
loan is made, over the outstanding balance of loans
from the Plan to the Participant on the date on
which such loan was made, or
(2) the greater of (A) one-half (1/2) of the
present value of the non-forfeitable accrued
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benefit of the Participant under the Plan, or (B)
$10,000.
For purposes of this limit, all plans of the
Employer shall be considered one plan.
(d) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a
period not to exceed five (5) years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as a
principal residence of the Participant shall provide for
periodic repayment over a reasonable period of time that may
exceed five (5) years. For this purpose, a principal residence
has the same meaning as a principal residence under Code
Section 1034. Loan repayments will be suspended under this
Plan as permitted under Code Section 414(u)(4).
(e) Any loans granted or renewed shall be made
pursuant to a Participant loan program. Such loan program
shall be established in writing and must include, but need not
be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining
a reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps
that will be taken to preserve Plan assets.
Such Participant loan program shall be contained
in a separate written document which, when properly executed,
is hereby incorporated by reference and made a part of the
Plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the
necessity of amending this Section.
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8.5 VOTING COMPANY STOCK
The Trustee shall vote all Company Stock held by it as part of
the Plan assets. Provided, however, that if any agreement entered into by the
Trust provides for voting of any shares of Company Stock pledged as security for
any obligation of the Plan, then such shares of Company Stock shall be voted in
accordance with such agreement. If the Trustee does not timely receive voting
directions from a Participant or Beneficiary with respect to any Company Stock
allocated to that Participant's or Beneficiary's Company Stock Account,
the Trustee shall vote such Company Stock.
Notwithstanding the foregoing, if the Employer has a
registration-type class of securities or, with respect to Company Stock acquired
by, or transferred to, the Plan in connection with a securities acquisition loan
(as defined in Code Section 133(b)) after July 10, 1989, each Participant or
Beneficiary shall be entitled to direct the Trustee as to the manner in which
the Company Stock which is entitled to vote and which is allocated to the
Company Stock Account of such Participant or Beneficiary is to be voted. If the
Employer does not have a registration-type class of securities, with respect to
Company Stock other than Company Stock acquired by, or transferred to, the Plan
in connection with a securities acquisition loan (as defined in Code Section
133(b)) after July 10, 1989, each Participant or Beneficiary in the Plan shall
be entitled to direct the Trustee as to the manner in which voting rights on
shares of Company Stock which are allocated to the Company Stock Account of such
Participant or Beneficiary are to be exercised with respect to any corporate
matter which involves the voting of such shares with respect to the approval or
disapproval of any corporate merger or consolidation, recapitalization,
reclassification, liquidation, dissolution, sale of substantially all assets of
a trade or business, or such similar transaction as prescribed in Regulations.
For purposes of this Section the term "registration-type class of securities"
means: (A) a class of securities required to be registered under Section 12 of
the Securities Exchange Act of 1934; and (B) a class of securities which would
be required to be so registered except for the exemption from registration
provided in subsection (g) (2) (H) of such Section 12.
If the Employer does not have a registration-type class of
securities and the by-laws of the Employer require the Plan to vote an issue in
a manner that reflects a one-man, one-vote philosophy, each Participant or
Beneficiary shall be entitled to cast one vote on an issue and the Trustee shall
vote the shares held by the Plan in proportion to the results of the votes cast
on the issue by the Participants and Beneficiaries.
8.6 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
(a) The Trustee shall make distributions from the
Trust Fund at such times and in such numbers of shares or
other units of Company Stock and amounts of cash to or
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for the benefit of the person entitled thereto under the Plan
as the Administrator directs in writing. Any undistributed
part of a Participant's interest in his accounts shall be
retained in the Trust Fund until the Administrator directs its
distribution. Where distribution is directed in Company Stock,
the Trustee shall cause an appropriate certificate to be
issued to the person entitled thereto and mailed to the
address furnished it by the Administrator. Any portion of a
Participant's Account to be distributed in cash shall be paid
by the Trustee mailing its check to the same person at the
same address. If a dispute arises as to who is entitled to or
should receive any benefit or payment, the Trustee may
withhold or cause to be withheld such payment until the
dispute has been resolved.
(b) As directed by the Administrator, the Trustee
shall make payments out of the Trust Fund. Such directions or
instructions need not specify the purpose of the payments so
directed and the Trustee shall not be responsible in any way
respecting the purpose or propriety of such payments except as
mandated by the Act.
(c) In the event that any distribution or payment
directed by the Administrator shall be mailed by the Trustee
to the person specified in such direction at the latest
address of such person filed with the Administrator, and shall
be returned to the Trustee because such person cannot be
located at such address, the Trustee shall promptly notify the
Administrator of such return. Upon the expiration of sixty
(60) days after such notification, such direction shall become
void and unless and until a further direction by the
Administrator is received by the Trustee with respect to such
distribution or payment, the Trustee shall thereafter continue
to administer the Trust as if such direction had not been made
by the Administrator. The Trustee shall not be obligated to
search for or ascertain the whereabouts of any such person.
8.7 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon in writing by the Employer and the
Trustee. An individual serving as Trustee who already receives full-time pay
from the Employer shall not receive compensation from the Plan. In addition, the
Trustee shall be reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and expenses shall be
paid from the Trust Fund unless paid or advanced by the Employer. All taxes of
any kind and all kinds whatsoever that may be levied or assessed under existing
or future laws upon, or in respect of, the Trust Fund or the income thereof,
shall be paid from the Trust Fund.
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8.8 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan Year, the
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust
Fund upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the
Trust Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon
its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof.
Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof
shall be deemed an approval thereof. The approval by the
Employer of any statement of account shall be binding as to
all matters embraced therein as between the Employer and the
Trustee to the same extent as if the account of the Trustee
had been settled by judgment or decree in an action for a
judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were
parties; provided, however, that nothing herein contained
shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
8.9 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent qualified
public accountant for that purpose. Such accountant shall,
after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within
a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit
setting forth his opinion as to whether any statements,
schedules or lists that are required by Act Section 103 or the
Secretary of
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Labor to be filed with the Plan's annual report, are presented
fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting
fees shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to
enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to periodic
examination by a state or federal agency, it shall transmit
and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or
by such other date as may be prescribed under regulations of
the Secretary of Labor.
8.10 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering
to the Employer, at least thirty (30) days before its
effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by mailing
by registered or certified mail, addressed to such Trustee at
his last known address, at least thirty (30) days before its
effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such appointment
in writing and delivering same to the Employer, shall, without
further act, become vested with all the estate, rights,
powers, discretions, and duties of his predecessor with like
respect as if he were originally named as a Trustee herein.
Until such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of
the Plan.
(d) The Employer may designate one or more
successors prior to the death, resignation, incapacity, or
removal of a Trustee. In the event a successor is so
designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all
the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally
named as Trustee herein immediately upon the death,
resignation, incapacity, or removal of his predecessor.
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(e) Whenever any Trustee hereunder ceases to serve
as such, he shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of
the Plan Year during which he served as Trustee. This
statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under Section
8.8 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer no
later than the due date of the annual statement of account for
the Plan Year. The procedures set forth in Section 8.8 for the
approval by the Employer of annual statements of account shall
apply to any special statement of account rendered hereunder
and approval by the Employer of any such special statement in
the manner provided in Section 8.8 shall have the same effect
upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have
any duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all
statements of account required by Section 8.8 and this
subparagraph.
8.11 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
8.12 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's
election under this Section, a distributee may elect, at the
time and in the manner prescribed by the Administrator, to
have any portion of an eligible rollover distribution that is
equal to at least $500 paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(b) For purposes of this Section the following
definitions shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include:
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or
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life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee
and the distributee's designated beneficiary, or for
a specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); the portion of
any other distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities); and any other
distribution that is reasonably expected to total
less than $200 during a year.
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a),
an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are
distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the
distributee.
ARTICLE IX
AMENDMENT, TERMINATION AND MERGERS
9.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend the Plan, subject to the limitations of this Section.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator, other than
an amendment to remove the Trustee or Administrator, may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as provided
therein upon its execution. The Trustee shall not be required
to
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execute any such amendment unless the Trust provisions
contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if
it authorizes or permits any part of the Trust Fund (other
than such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective to the extent it eliminates or reduces any
"Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits"
the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6)
protected benefits" are benefits described in Code Section
411(d)(6)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit.
In addition, no such amendment shall have the
effect of terminating the protections and rights set forth in
Section 7.12, unless such termination shall then be permitted
under the applicable provisions of the Code and Regulations;
such a termination is currently expressly prohibited by
Regulation 54.4975-11(a)(3)(ii).
9.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Accounts shall become 100% Vested as
provided in Section 7.4 and shall not thereafter be subject to
forfeiture, and all unallocated amounts shall be allocated to
the accounts of all Participants in accordance with the
provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Sections 7.5 and 7.6.
Except as permitted by Regulations, the
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termination of the Plan shall not result in the reduction of
"Section 411(d)(6) protected benefits" in accordance with
Section 9.1(c).
9.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to any other plan and trust only if
the benefits which would be received by a Participant of this Plan, in the event
of a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 9.1(c).
ARTICLE X
TOP HEAVY
10.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 7.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.3 of the Plan.
10.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of
the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds sixty percent (60%)
of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and
all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key Employee for any
prior Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan is
a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on the
Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the
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purposes of determining whether this Plan is a Top Heavy or
Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for
any Plan Year in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2) the
sum of the Aggregate Accounts of Key Employees under this Plan
and all plans of an Aggregation Group, exceeds ninety percent
(90%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Account balance as of the
most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
(2) an adjustment for any contributions due as of
the Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
Valuation Date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the
four (4) preceding Plan Years. However, in the case of
distributions made after the Valuation Date and prior
to the Determination Date, such distributions are
not included as distributions for top heavy purposes
to the extent that such distributions are already
included in the Participant's Aggregate Account
balance as of the Valuation Date. Notwithstanding
anything herein to the contrary, all distributions,
including distributions under a terminated plan
which if it had not been terminated would have been
required to be included in an Aggregation Group, will
be counted. Further, distributions from the Plan
(including the cash value of life insurance policies)
of a Participant's account balance because of death
shall be treated as a distribution for the purposes of
this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax
deductible qualified voluntary employee
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contributions shall not be considered to be a part of
the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated
by the Employee and made from a plan maintained by
one employer to a plan maintained by another
employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such
rollovers or plan-to-plan transfers as a distribution
for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by
the Employee or made to a plan maintained by the same
employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective
of the date on which such rollover or plan-to-plan
transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a participant
in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other
plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements
of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy
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Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in
the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was maintained
within the last five (5) years ending on the
Determination Date.
(e) "Determination Date means (a) the last day of
the preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of
a defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee, shall be as
determined using the single accrual method used for all plans
of the Employer and Affiliated Employers, or if no such single
method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination
of the Present Value of Accrued Benefit shall be determined as
of the most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined
benefit plan.
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(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under
all defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
ARTICLE XI
MISCELLANEOUS
11.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
11.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as may
be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a
result of a loan from the Plan. At the time a distribution is
to be made to or for a Participant's or Beneficiary's benefit,
such proportion of the amount distributed as shall equal such
loan indebtedness shall be paid by the Trustee to the Trustee
or the Administrator, at the direction of the Administrator,
to
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apply against or discharge such loan indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must
be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his
Participant's Account. If the Participant or Beneficiary does
not agree that the loan indebtedness is a valid claim against
his Vested Participant's Account, he shall be entitled to a
review of the validity of the claim in accordance with
procedures provided in Sections 2.8 and 2.9.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p),
and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order,"
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
11.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according
to the Act and the laws of the District of Columbia, other than its laws
respecting choice of law, to the extent not preempted by the Act.
11.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
11.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
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11.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant to Act
Section 403(c)(2)(A), the Employer may demand repayment of
such excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions
may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
11.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
11.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
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11.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
11.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
11.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
11.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan or as accepted by or assigned to them
pursuant to any procedure provided under the Plan, including but not limited to
any agreement allocating or delegating their responsibilities, the terms of
which are incorporated herein by reference. In general, unless otherwise
indicated herein or pursuant to such agreements, the Employer shall have the
duties specified in Article II hereof, as the same may be allocated or delegated
thereunder, including but not limited to the responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified at Article II of the
Plan, as the same may be allocated or delegated thereunder. The Trustee
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shall have the responsibility of management and control of the assets held under
the Trust, except to the extent directed pursuant to Article II or with respect
to those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
11.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
11.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the
contrary, contributions to this Plan are conditioned upon the
initial qualification of the Plan under Code Section 401. If
the Plan receives an adverse determination with respect to its
initial qualification, then the Plan may return such
contributions to the Employer within one year after such
determination, provided the application for the determination
is made by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan was
adopted, or such later date as the Secretary of the Treasury
may prescribe.
(b) Notwithstanding any provisions to the contrary,
except Sections 3.5, 3.6, and 4.1(c), any contribution by the
Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the disallowance
of the deduction, demand repayment of such disallowed
contribution and the Trustee
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shall return such contribution within one (1) year following
the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, but
any losses attributable thereto must reduce the amount so
returned.
11.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
11.16 WAIVER OF FUNDING
(a) In the event that the minimum funding
requirement for a particular Plan Year has been waived in
whole or in part, then, an Adjusted Account Balance shall be
established for each Participant which shall reflect the
Account balance the Participant would have had, had the waived
amount been contributed. The Adjusted Account Balance shall
remain in effect until such time as the value of the
Participant's Account equals the value of the Participant's
Adjusted Account Balance:
(1) The excess of the value of each Participant's
Adjusted Account Balance over the value of the
Participant's Account balance will be credited with
earnings equal to 150 percent of the Federal mid-term
rate (as in effect under Code Section 1274 for the
first month of such Plan Year).
(2) The waiver payment to be made by the Employer in
the year after the waiver is granted shall at least
equal the amount necessary to amortize over 5 years,
at the appropriate interest rate, the excess of the
sum of the Adjusted Account Balances over the total
value of the Trust Fund attributable to Employer
contributions. In the next year, the excess for such
subsequent year, if any, is amortized over 4 years.
In each succeeding year the amortization period is
reduced by one year. The Employer may, however, make
such larger payments at any time as the Employer
shall deem appropriate.
(3) An unallocated Waiver Suspense Account shall be
created, to which shall be made all payments designed
to reduce the waived deficiency. If at the time of a
distribution, the nonforfeitable portion of a
Participant's Adjusted Account Balance exceeds that
Participant's actual Account balance, that
Participant will receive the larger
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amount to the extent that there are then funds in the
unallocated Waiver Suspense Account to cover the
excess. If at any time, a Participant may not be able
to receive a total distribution of the entire
nonforfeitable portion of his Adjusted Account
Balance, such Participant would receive subsequent
distributions derived from future waiver payments.
(b) When the total value of the Trust Fund equals
the sum of the Adjusted Account Balances, the Waiver Suspense
Account shall be allocated to the affected Participants so
that each Participant's actual Account balance equals that
Participant's Adjusted Account Balance.
11.17 SECURITIES AND EXCHANGE COMMISSION APPROVAL
The Employer may request an interpretative letter from the
Securities and Exchange Commission stating that the transfers of Company Stock
contemplated hereunder do not involve transactions requiring a registration of
such Company Stock under the Securities Act of 1933. In the event that a
favorable interpretative letter is not obtained, the Employer reserves the right
to amend the Plan and Trust retroactively to their Effective Dates in order to
obtain a favorable interpretative letter or to terminate the Plan.
ARTICLE XII
PARTICIPATING EMPLOYERS
12.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any other corporation or entity, whether an
affiliate or subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating
Employer.
12.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions
made by Participating Employers, as well as all increments
thereof. However, the assets of the Plan shall, on an ongoing
basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or
Participating Employer who contributed such assets.
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(c) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an Employee
of the Employer or a Participating Employer, shall not affect
such Participant's rights under the Plan, and all amounts
credited to such Participant's Account as well as his
accumulated service time with the transferor or predecessor,
and his length of participation in the Plan, shall continue to
his credit.
(d) All rights and values forfeited by termination
of employment shall inure only to the benefit of the
Participants of the Employer or Participating Employer by
which the forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is an Affiliated
Employer, then said Forfeiture shall be allocated to the
Participants employed by the Employer or Participating
Employers who are Affiliated Employers. Should an Employee of
one ("First") Employer be transferred to an associated
("Second") Employer which is an Affiliated Employer, such
transfer shall not cause his account balance (generated while
an Employee of "First" Employer) in any manner, or by any
amount to be forfeited. Such Employee's Participant Account
balance for all purposes of the Plan, including length of
service, shall be considered as though he had always been
employed by the "Second" Employer and as such had received
contributions, forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling the
amount so transferred.
(e) Any expenses of the Trust which are to be paid
by the Employer or borne by the Trust Fund shall be paid by
each Participating Employer in the same proportion that the
total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the
credit of all Participants.
12.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
12.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect
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a termination of employment hereunder, and the Participating Employer to which
the Employee is transferred shall thereupon become obligated hereunder with
respect to such Employee in the same manner as was the Participating Employer
from whom the Employee was transferred.
12.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year
shall be allocated only among those Participants of the Employer or
Participating Employer making the contribution, except if the contribution is
made by an Affiliated Employer, in which event such contribution shall be
allocated among all Participants of all Participating Employers who are
Affiliated Employers in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Employer shall immediately notify the Trustee
thereof.
12.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the Trustee
where such consent is necessary in accordance with the terms of this Plan.
12.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 9.1(c). If
no successor is designated, the Trustee shall retain such assets for the
Employees of said Participating Employer pursuant to the provisions of Article
VII hereof. In no such event shall any part of the corpus or income of the Trust
as it relates to such Participating Employer be used for or diverted to purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
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12.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered
in the presence of:
Allied Capital Corporation
/s/ XXXXXX BENZ XXXXXXX By /s/ XXXX XXXXXXX
--------------------------------- ---------------------------------
EMPLOYER
/s/ XXXXXXX X. XXXXXXX
---------------------------------
WITNESSES AS TO EMPLOYER
ATTEST /s/ XXXXXXXX X. XXXXXXX
-----------------------------
/s/ XXXXXX BENZ XXXXXXX /s/ XXXXXXX X. XXXXXX (SEAL)
--------------------------------- -----------------------------
TRUSTEE
/s/ XXXXXXX X. XXXXXXX
---------------------------------
WITNESSES AS TO TRUSTEE
/s/ XXXXXX XXX XXXXXXX /s/ G. XXXXXX XXXXXXXX III (SEAL)
--------------------------------- -----------------------------
TRUSTEE
/s/ XXXXXXX X. XXXXXXX
---------------------------------
WITNESSES AS TO TRUSTEE
81
