Exhibit 10.56
The CORPORATE plan for Retirement
THE PROFIT SHARING/401 (K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 07
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THE CORPORATE PLAN FOR RETIREMENT
PROFIT SHARING/401(K) PLAN
ARTICLE 1
ADOPTION AGREEMENT
ARTICLE 2
DEFINITIONS
2.01 - Definitions
ARTICLE 3
PARTICIPATION
3.01 - Date of Participation
3.02 - Resumption of Participation Following Reemployment
3.03 - Cessation or Resumption of Participation Following a Change in Status
3.04 - Participation by Owner-Employee; Controlled Businesses
3.05 - Omission of Eligible Employee
ARTICLE 4
CONTRIBUTIONS
4.01 - Deferral Contributions
4.02 - Additional Limit on Deferral Contributions
4.03 - Matching Contributions
4.04 - Limit on Matching Contributions and Employee Contributions
4.05 - Special Rules
4.06 - Fixed/Discretionary Employer Contributions
4.07 - Time of Making Employer Contributions
4.06 - Return of Employer Contributions
4.09 - Employee Contributions
4.10 - Rollover Contributions
4.11 - Deductible Voluntary Employee Contributions
4.12 - Additional Rules for Paired Plans
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.01 - Individual Accounts
5.02 - Valuation of Accounts
5.03 - Code Section 415 Limitations
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.01 - Manner of Investment
6.02 - Investment Decisions
6.03 - Participant Directions to Trustee
ARTICLE 7
RIGHT TO BENEFITS
7.01 - Normal or Early Retirement
7.02 - Late Retirement
7.03 - Disability Retirement
7.04 - Death
7.05 - Other Termination of Employment
7.06 - Separate Account
7.07 - Forfeitures
7.08 - Adjustment for Investment Experience
7.09 - Participant Loans
7.10 - In-Service Withdrawals
7.11 - Prior Plan In-Service Distribution Rules
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ARTICLE 8
DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE
8.01 - Distribution of Benefits to Participants and Beneficiaries
8.02 - Annuity Distributions
8.03 - Joint and Survivor Annuities/Preretirement Survivor Annuities
8.04 - Installment Distributions
8.05 - Immediate Distributions
8.06 - Determination of Method of Distribution
8.07 - Notice to Trustee
8.08 - Time of Distribution
8.09 - Whereabouts of Participants and Beneficiaries
ARTICLE 9
TOP-HEAVY PROVISIONS
9.01 - Application
9.02 - Definitions
9.03 - Minimum Contribution
9.04 - Adjustment to the Limitation on Contributions and Benefits
9.05 - Minimum Vesting
ARTICLE 10
AMENDMENT AND TERMINATION
10.01 - Amendment by Employer
10.02 - Amendment by Prototype Sponsor
10.03 - Amendments Affecting Vested and/or Accrued Benefits
10.04 - Retroactive Amendments
10.05 - Termination
10.06 - Distribution Upon Termination of the Plan
10.07 - Merger or Consolidation of Plan; Transfer of Plan Assets
ARTICLE 11
AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS TO OR FROM
OTHER QUALIFIED PLANS
11.01 - Amendment and Continuation of Predecessor Plan
11.02 - Transfer of Funds from an Existing Plan
11.03 - Acceptance of Assets by Trustee
11.04 - Transfer of Assets from Trust
ARTICLE 12
MISCELLANEOUS
12.01 - Communication to Participants
12.02 - Limitation of Rights
12.03 - Nonalienability of Benefits and Qualified Domestic Relations Orders
12.04 - Facility of Payment
12.05 - Information Between Employer and Trustee
12.06 - Effect of Failure to Qualify Under Code
12.07 - Notices
12.06 - Governing Law
ARTICLE 13
PLAN ADMINISTRATION
13.01 - Powers and Responsibilities of the Administrator
13.02 - Nondiscriminatory Exercise of Authority
13.03 - Claims and Review Procedures
13.04 - Named Fiduciary
13.05 - Costs of Administration
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ARTICLE 14
TRUST AGREEMENT
14.01 - Acceptance of Trust Responsibilities
14.02 - Establishment of Trust Fund
14.03 - Exclusive Benefit
14.04 - Powers of Trustee
14.05 - Accounts
14.06 - Approving of Accounts
14.07 - Distribution from Trust Fund
14.06 - Transfer of Amounts from Qualified Plan
14.09 - Transfer of Assets from Trust
14.10 - Separate Trust or Fund for Existing Plan Assets
14.11 - Voting; Delivery of Information
14.12 - Compensation and Expenses of Trustee
14.13 - Reliance by Trustee on other Persons
14.14 - Indemnification by Employer
14.15 - Consultation by Trustee with Counsel
14.16 - Persons Dealing with the Trustee
14.17 - Resignation or Removal of Trustee
14.18 - Fiscal Year of the Trust
14.19 - Discharge of Duties by Fiduciaries
14.20 - Amendment
14.21 - Plan Termination
14.22 - Permitted Reversion of Funds to Employer
14.23 - Governing Law
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Article 1. Adoption Agreement.
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Article 2. Definitions.
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2.01. Definitions.
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(a) Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
(1) "Account" means an account established on the books of the Trust for
the purpose of recording contributions made on behalf of a Participant
and any income, expenses, gains or losses incurred thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article 1 under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates the
optional provisions selected by the Employer, and the Trustee accepts its
responsibilities under Article 14. The provisions of the Adoption
Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period for
which an amount is payable as an annuity or in any other form.
(5) "Beneficiary" means the person or persons entitled under Section 7.04
to receive benefits under the Plan upon the death of a Participant,
provided that for purposes of Section 7.04 such term shall be applied in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(7) "Compensation" shall mean:
(A) for purposes of Article 4 (Contributions), compensation as
defined in Section 5.03(e)(2) excluding any items elected by the
Employer in Section 1.04(a), reimbursements or other expense
allowances, fringe benefits (cash and non-cash), moving expenses,
deferred compensation and welfare benefits, but including amounts that
are not includable in the gross income of the Participant under a
salary reduction agreement by reason of the application of Sections
125, 402(a)(8), 402(h), or 403(b) of the Code; and
(B) for purposes of Section 2.01(a)(16) (Highly Compensated
Employees), Section 5.03 (Code Section 415 Limitations), and Section
9.03 (Top Heavy Plan Minimum Contributions), compensation as defined in
Section 5.03(e)(2).
Compensation shall generally be based on the amount actually paid to
the Participant during the Plan Year or, for purposes of Article 4 if so
elected by the Employer in Section 1.04(b), during that portion of the
Plan Year during which the Employee is eligible to participate.
Notwithstanding the preceding sentence, compensation for purposes of
Section 5.03 (Code Section 415 Limitations) shall be based on the amount
actually paid or made available to the Participant during the Limitation
Year. Compensation for the initial Plan Year for a new plan
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shall be based upon eligible Participant Compensation, subject to Section 1.04
(b), from the Effective Date listed in Section 1.01(g)(1) through the end of
the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall mean the
Individual's Earned Income.
For years beginning after December 31, 1968, the annual Compensation of each
Participant taken into account for determining all benefits provided under the
plan for any determination period shall not exceed $200,000. This limitation
shall be adjusted by the Secretary at the same time and in the same manner as
under Section 415(d) of the Code, except that the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in such calendar
year and the first adjustment to the $200,000 limitation is effected on January
1, 1990. If a plan determines Compensation on a period of time that contains
fewer than 12 calendar months, then annual Compensation limit is amount equal to
the annual Compensation limit for the calendar year in which the Compensation
period begins multiplied by the ratio obtained by dividing the number of full
months in the period by 12.
If Compensation for any prior determination period is taken into account in
determining an Employee's allocations or benefits for the current determination
period, the Compensation for such prior year is subject to the applicable annual
compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual compensation limit is
$200,000.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except that
in applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If the $200,000 limitation is exceeded as
a result of the application of these rules, then the limitation shall be
prorated among the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application of this
limitation.
(8) "Earned Income" means the net earnings of a Self-Employed Individual
derived from the trade or business with respect to which the Plan is established
and for which the personal services of such individual are a material income-
providing factor, excluding any items not included in gross income and the
deductions allocated to such items, except that for taxable years beginning
after December 31, 1989 net earnings shall be determined with regard to the
deduction allowed under Section 164(f) of the Code, to the extent applicable to
the Employer. Net earnings shall be reduced by contributions of the Employer to
any qualified plan, to the extent a deduction is allowed to the Employer for
such contributions under Section 404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month period
beginning with the Employment Commencement Date and each anniversary thereof or,
in the case of an Employee who before completing the eligibility requirements
set forth in Section 1.03 (a)(1) incurs a break in service for participation
purposes and thereafter returns to the employ of the Employer or
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Related Employer, each 12-consecutive month period beginning with the first day
of reemployment and each anniversary thereof.
A "break in service for participation purposes" shall mean an Eligibility
Computation Period during which the participant does not complete more than 500
Hours of Service with the Employer.
(10) "Employee" means any employee of the Employer, any Self-Employed
Individual or Owner-Employee. The Employer must specify in Section 1.03 (a)(3)
any Employee, or class of Employees, not eligible to participate in the Plan.
If the Employer elects to exclude collective bargaining employees, the exclusion
applies to any employee of the Employer included in a unit of employees covered
by an agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers unless the
collective bargaining agreement requires the employee to be included within the
Plan. The term "employee representatives" does not include any organization
more than half the members of which are owners, officers, or executives of the
Employer.
For purposes of the Plan, an individual shall be considered to become an
Employee on the date on which he first completes an Hour of Service and he shall
be considered to have ceased to be an Employee on the date on which he last
completes an Hour of Service. The term also includes a Leased Employee, such
that contributions or benefits provided by the leasing organization which are
attributable to services performed for the Employer shall be treated as provided
by the Employer. Notwithstanding the above, a Leased Employee shall not be
considered an Employee if Leased Employees do not constitute more than 20
percent of the Employer's non-highly compensated work force (taking into account
all Related Employers) and the Leased Employee is covered by a money purchase
pension plan maintained by the leasing organization which plan provides (i) a
nonintegrated employer contribution rate of at least 10 percent of compensation,
as defined for purposes of Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
gross income under Section 125, Section 402(a)(8), Section 402(h) or Section
403(b) of the Code, (ii) full and immediate vesting, and (iii) immediate
participation by each employee of the leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any Related
Employers required by this Section 2.01(a)(11). If Article 1 of the Employer's
Plan is the Standardized Adoption Agreement, the term "Employer" includes all
Related Employers. If Article 1 of the Employer's Plan is the Non-standardized
Adoption Agreement, the term "Employer" includes those Related Employers
designated in Section 1.02(b).
(12) "Employment Commencement Date" means the date on which the Employee first
performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or Managed Income
Portfolio of the Fidelity Group Trust for Employee Benefit Plans which is made
available to plans utilizing the CORPORATE plan for Retirement.
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(15) "Fund Share" means the share, unit, or other evidence of ownership in a
Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated active
Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the look-
back year: (i) received compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (ii) received compensation
from the Employer in excess of $50,000 (as adjusted pursuant to Section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect under Section 415(b)
(1)(A) of the Code. The term highly compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most compensation from the
Employer during the determination year; and (ii) Employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated Employee.
For this purpose, the determination year shall be the Plan Year. The look-
back year shall be the twelve-month period immediately preceding the
determination year. The Employer may elect to make the look-back year
calculation for a determination on the basis of the calendar year ending with or
within the applicable determination year, as prescribed by Section 414(q) of the
Code and the regulations issued thereunder.
A highly compensated former Employee includes any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5 percent owner who is an active or former Employee or a
highly compensated Employee who is one of the 10 most highly compensated
Employees ranked on the basis of compensation paid by the Employer during such
year, then the family member and the 5 percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated Employee shall be treated as a
single Employee receiving compensation and plan contributions or benefits equal
to the sum of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated Employee. For purposes
of this Section, family member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and the spouses of such lineal
ascendants and descendants.
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The determination of who is a highly compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Employer or a
Related Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period in which the duties were performed;
(B) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, by the Employer or Related Employer (including payments
made or due from a trust fund or insurer to which the Employer contributes or
pays premiums) on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity, disability,
layoff, jury duty, military duty, or leave of absence, each such hour to be
credited to the Employee for the Eligibility Computation Period in which such
period of time occurs, subject to the following rules:
(i) No more than 501 Hours of Service shall be credited under this
paragraph (B) on account of any single continuous period during which
the Employee performs no duties;
(ii) Hours of Service shall not be credited under this paragraph (B) for
a payment which solely reimburses the Employee for medically-related
expenses, or which is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no duties falls
within two or more Eligibility Computation Periods and if the payment
made on account of such period is not calculated on the basis of units
of time, the Hours of Service credited with respect to such period shall
be allocated between not more than the first two such Eligibility
Computation Periods on any reasonable basis consistently applied with
respect to similarly situated Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to
be paid by the Employer or a Related Employer, each such hour to be credited
to the Employee for the Eligibility Computation Period to which the award or
agreement pertains rather than the Eligibility Computation Period in which
the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of the Employer
and of all Related Employers will be treated as employed by a single
employer. For purposes of paragraphs (B) and (C) above, Hours of Service
will be calculated in accordance with the provisions of Section 2530.200b-
2(b) of the Department of Labor regulations which are incorporated herein by
reference.
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Solely for purposes of determining whether a break in service for
participation purposes has occurred in a computation period, an individual
who is absent from work for maternity or paternity reasons shall receive
credit for the hours of service which would otherwise been credited to
such individual but for such absence, or in any case in which such hours
cannot be determined, 8 hours of service per day of such absence. For
purposes of this paragraph, an absence from work for maternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2) by
reason of a birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption
of such child by such individual, or (4) for purposes of caring for such
child for a period beginning immediately following such birth or
placement. The hours of service credited under this paragraph shall be
credited (1) in the computation period in which the absence begins if the
crediting is necessary to prevent a break in service in that period, or
(2) in all other cases, in the following computation period.
(18) "Leased Employee" means any individual who provides services to the
Employer or a Related Employer (the "recipient") but is not otherwise an
employee of the recipient if (i) such services are provided pursuant to an
agreement between the recipient and any other person (the "leasing
organization"), (ii) such individual has performed services for the recipient
(or for the recipient and any related persons within the meaning of Section
414(n)(6) of the Code) on a substantially, full-time basis for at least one
year, and (iii) such services are of a type historically performed by employees
in the business field of the recipient.
(19) "Normal Retirement Age" means the normal retirement age specified in
Section 1.06(a) of the Adoption Agreement. If the Employer enforces a mandatory
retirement age, the Normal Retirement Age is the lesser of that mandatory age or
the age specified in Section 1.06 (a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship, the
individual who is the sole proprietor, or if the Employer is a partnership, a
partner who owns more than 10 percent of either the capital interest or the
profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the plan established by the Employer in the form of the
prototype plan as set forth herein as a new plan or as an amendment to an
existing plan, by executing the Adoption Agreement, together with any and all
amendments hereto.
(23) "Plan Year" means the 12-consecutive month period designated by the
Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research Company, or its
successor.
(25) "Registered Investment Company" means any one or more corporations,
partnerships or trusts registered under the Investment Company Act of 1940 for
which Fidelity Management and Research Company serves as investment advisor.
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(26) "Related Employer" means any employer other than the Employer named in
Section 1.02 (a), if the Employer and such other employer are members of a
controlled group of corporations (as defined in Section 414(b) of the Code) or
an affiliated service group (as defined in Section 414 (m)), or are trades or
businesses (whether or not incorporated) which are under common control (as
defined in Section 414(c)), or such other employer is required to be aggregated
with the Employer pursuant to regulations issued under Section 414(o).
(27) "Self-Employed Individual" means an individual who has Earned Income for
the taxable year from the Employer or who would have had Earned Income but for
the fact that the trade or business had no net profits for the taxable year.
(28) "Trust" means the trust created by the Employer in accordance with the
provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and the
Trustee, as set forth in Article 14, under which the assets of the Plan are
held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for the
Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its successor.
(32) "Year of Service for Participation" means, with respect to any Employee,
an Eligibility Computation Period during which the Employee has been credited
with at least 1,000 Hours of Service. If the Plan maintained by the Employer is
the plan of a predecessor employer, an Employee's Years of Service for
Participation shall include years of service with such predecessor employer. In
any case in which the Plan maintained by the Employer is not the plan maintained
by a predecessor employer, service for such predecessor shall be treated as
service for the Employer, to the extent provided in Section 1.06.
(33) "Years of Service for Vesting" means, with respect to any Employee, the
number of whole years of his periods of service with the Employer or a Related
Employer (the elapsed time method to compute vesting service), subject to any
exclusions elected by the Employer in Section 1.07(b). An Employee will receive
credit for the aggregate of all time period(s) commencing with the Employee's
Employment Commencement Date and ending on the date a break in service begins,
unless any such years are excluded by Section 1.07(b). An Employee will also
receive credit for any period of severance of less than 12 consecutive months.
Fractional periods of a year will be expressed in terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks in
service, all years of service after such breaks in service will be disregarded
for the purpose of vesting the Employer-derived account balance that accrued
before such breaks, but both pre-break and post-break service will count for the
purposes of vesting the Employer-derived account balance that accrues after such
breaks. Both accounts will share in the earnings and losses of the fund.
In the case of a Participant who does not have 5 consecutive 1-year breaks
in service, both the pre-break and post-break service will count in vesting both
the pre-break and post-break employer-derived account balance.
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A break in service is a period of severance of at least 12 consecutive
months. Period of severance is a continuous period of time during which the
Employee is not employed by the Employer. Such period begins on the date the
Employee retires, quits or is discharged, or if earlier, the 12 month
anniversary of the date on which the Employee was otherwise first absent
from service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break
in service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning immediately
following such birth or placement.
If the Plan maintained by the Employer is the plan of a predecessor
employer, an Employee's Years of Service for Vesting shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for the
Employer to the extent provided in Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include the
feminine gender unless the context clearly indicates otherwise.
Article 3. Participation.
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3.01. Date of Participation. All Employees in the eligible class (as defined
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in Section 1.03 (a)(3)) who are in the service of the Employer on the
Effective Date will become Participants on the date elected by the Employer in
Section 1.03(c). Any other Employee will become a Participant in the Plan as of
the first Entry Date on which he first satisfies the eligibility requirements
set forth in Section 1.03(a). In the event that an Employee who is not a member
of an eligible class (as defined in Section 1.03 (a)(3)) becomes a member of an
eligible class, the individual shall participate immediately if such individual
had already satisfied the eligibility requirements and would have otherwise
previously become a Participant.
If an eligibility requirement other than one Year of Service is elected in 1.03
(a)(1), an Employee may not be required to complete a minimum number of Hours
of Service before becoming a Participant. An otherwise eligible Employee
subject to a minimum months of service requirement shall become a Participant on
the first Entry Date following his completion of the required number of
consecutive months of employment measured from his Employment Commencement Date
to the coinciding date in the applicable following month. For purposes of
determining consecutive months of service, the Related Employer and predecessor
employer rules contained in Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
3.02. Resumption of Participation following Reemployment. If a Participant
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ceases to be an Employee and thereafter returns to the employ of the Employer he
will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his reemployment and
is in the eligible class of Employees as defined in Section 1.03(a)(3), and
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(b) any distribution which he is receiving under the Plan will cease
except as otherwise required under Section 8.08.
3.03. Cessation or Resumption of Participation Following a Change in Status.
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If any Participant continues in the employ of the Employer or Related Employer
but ceases to be a member of an eligible class as defined in Section 1.03(a)(3),
the individual shall continue to be a Participant for most purposes until the
entire amount of his benefit is distributed; however, the individual shall not
be entitled to receive an allocation of contributions or forfeitures during the
period that he is not a member of the eligible class. Such Participant shall
continue to receive credit for service completed during the period for purposes
of determining his vested interest in his Accounts. In the event that the
individual subsequently again becomes a member of an eligible class of
Employees, the individual shall resume full participation immediately upon the
date of such change in status.
3.04. Participation by Owner-Employee; Controlled Businesses. If the
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Plan provides contributions or benefits for one or more Owner-Employees who
control both the trade or business with respect to which the Plan is established
and one or more other trades or businesses, the Plan and any plan established
with respect to such other trades or businesses must, when looked at as a single
plan, satisfy Sections 401(a) and 401(d) of the Code with respect to the
employees of this and all such other trades or businesses. If the Plan provides
contributions or benefits for one or more Owner-Employees who control one or
more other trades or businesses, the Employees of each such other trade or
business must be included in a plan which satisfies Sections 401(a) and 401(d)
of the Code and which provides contributions and benefits not less favorable
than provided for Owner-Employees under the Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more Owner-
Employees, shall be considered to control a trade or business if such Owner-
Employee, or such Owner-Employees together, (i) own the entire interest in an
unincorporated trade or business, or (ii) in the case of a partnership, own more
than 50 percent of either the capital interest or the profits interest in such
partnership. For this purpose, an Owner-Employee, or two or more Owner-
Employees, shall be treated as owning any interest in a partnership which is
owned, directly or indirectly, by a partnership controlled by such Owner-
Employee or such Owner-Employees.
3.05. Omission of Eligible Employee. If any Employee who should be included as
-----------------------------
a Participant in the Plan is erroneously omitted and discovery of such omission
is not made until after a contribution by his Employer for the year has been
made, the Employer shall make a subsequent contribution, if necessary, so that
the omitted Employee receives the total amount which the said Employee would
have received had he not been omitted. For purposes of this Section 3.05, the
term "contribution" shall not include Deferral Contributions and Matching
Contributions made pursuant to Sections 4.01 and 4.03, respectively.
9
Article 4. Contributions.
-------------
4.01. Deferral Contributions.
----------------------
(a) 4.01. Deferral Contributions. If so provided by the Employer in
----------------------
Section 1.05(b), each Participant may elect to execute a salary reduction
agreement with the Employer to reduce his Compensation by a specified
percentage not exceeding 15% per payroll period, subject to any exceptions
elected by the Employer in Section 1.05(b)(2) and 1.05(b)(3) and equal to a
whole number multiple of one (1) percent. Such agreement shall become
effective on the first day of the first payroll period for which the
Employer can reasonably process the request. The Employer shall make a
Deferral Contribution on behalf of the Participant corresponding to the
amount of said reduction, subject to the restrictions set forth below.
Under no circumstances may a salary reduction agreement be adopted
retroactively.
(b) A Participant may elect to change or discontinue the percentage by
which his Compensation is reduced by notice to the Employer as provided in
Section 1.05(b)(1).
(c) No Participant shall be permitted to have Deferral Contributions made
under the Plan, or any other qualified plan maintained by the Employer,
during the taxable year, in excess of the dollar limitation contained in
Section 402(g) of the Code in effect at the beginning of such taxable year.
A Participant may assign to the Plan any Excess Deferrals made during the
taxable year of the Participant by notifying the Plan Administrator on or
before March 15 following the taxable year of the amount of the Excess
Deferrals to be assigned to the Plan. A Participant is deemed to notify the
Administrator of any Excess Deferrals that arise by taking into account only
those Deferral Contributions made to the Plan and any other plan of the
Employer. Notwithstanding any other provision of the Plan, Excess Deferrals,
plus any income and minus any loss allocable thereto, shall be distributed
no later than April 15 to any Participant to whose account Excess Deferrals
were so assigned for the preceding year and who claims Excess Deferrals for
such taxable year.
"Excess Deferrals" shall mean those Deferral Contributions that are
includable in a participant's gross income under Section 402(g) of the Code
to the extent such Participant's Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section. For purposes of
determining Excess Deferrals, the term "Deferral Contributions" shall
include the sum of all Employer Contributions made on behalf of such
Participant pursuant to an election to defer under any qualified CODA as
described in Section 401(k) of the Code, any simplified employee pension
cash or deferred arrangement as described in Section 402(h)(1)(B) of the
Code, any eligible deferred compensation plan under Section 457, any plan as
described under Section 501(c)(18) of the Code, and any Employer
Contributions made on the behalf of a Participant for the purchase of an
annuity contract under Section 403(b) of the Code pursuant to a salary
reduction agreement. Deferral Contributions shall not include any deferrals
properly distributed as excess annual additions. Excess Deferrals shall be
treated as annual additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the
Participant's taxable year.
Excess Deferrals shall be adjusted for any income or loss up to the date
of distribution. The income or loss allocable to Excess
10
Deferrals is (1) income or loss allocable to the Participant's Deferral
Contributions account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Deferrals for the year and
the denominator is the Participant's account balance attributable to
Deferral Contributions without regard to any income or loss occurring
during such taxable year, or (2) such other amount determined under any
reasonable method, provided that such method is used consistently for all
Participants in calculating the distributions required under this Section
4.01(c) and Sections 4.02(d) and 4.04(d) for the Plan Year, and is used by
the Plan in allocating income or loss to Participants' accounts. Income or
loss allocable to the period between the end of the Plan Year and the date
of distribution shall be disregarded in determining income or loss.
(d) In order for the Plan to comply with the requirements of Sections
401(k), 402(g) and 415 of the Code and the regulations promulgated
thereunder, at any time in a Plan Year the Administrator may reduce the
rate of Deferral Contributions to be made on behalf of any Participant, or
class of Participants, for the remainder of that Plan Year, or the
Administrator may require that all Deferral Contributions to be made on
behalf of a Participant be discontinued for the remainder of that Plan
Year. Upon the close of the Plan Year or such earlier date as the
Administrator may determine, any reduction or discontinuance in Deferral
Contributions shall automatically cease until the Administrator again
determines that such a reduction or discontinuance of Deferral
Contributions is required.
4.02. Additional Limit on Deferral Contributions.
------------------------------------------
(a) The Actual Deferral Percentage (hereinafter "ADP") for Participants
who are Highly Compensated Employees for each Plan Year and the ADP for
participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(1) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by 1.25;
or
(2) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by 2.0,
provided that the ADP for participants who are Highly Compensated
Employees does not exceed the ADP for Participants who are Non-highly
Compensated Employees by more than two (2) percentage points.
(b) The following special rules apply for the purposes of this Section:
(1) The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Deferral Contributions
(and Qualified Discretionary Contributions if treated as Deferral
Contributions for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Section 401(k) of
the Code, that are maintained by the Employer, shall be determined as if
such Deferral Contributions (and, if applicable, such Qualified
Discretionary Contributions) were made under a single arrangement. If a
Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash
11
or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated
under regulations under Section 401(k) of the Code.
(2) In the event that this Plan satisfies the requirements of Sections
401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements
of such Sections of the Code only if aggregated with this plan, then
this Section shall be applied by determining the ADP of Employees as if
all such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy section
401(k) of the Code only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the Deferral Contributions (and Qualified Discretionary
Contributions if treated as Deferral Contributions for purposes of the
ADP test) and Compensation of such Participant shall include the
Deferral Contributions (and, if applicable, Qualified Discretionary
Contributions) and Compensation for the Plan Year of Family Members (as
defined in Section 414(q) (6) of the Code). Family Members, with respect
to such Highly Compensated Employees, shall be disregarded as separate
employees in determining the ADP both for Participants who are Non-
highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(4) For purposes of determining the ADP test, Deferral Contributions
and Qualified Discretionary Contributions must be made before the last
day of the twelve-month period immediately following the Plan Year to
which contributions relate.
(5) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Discretionary
Contributions used in such test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the trust on behalf of such
Participant for the Plan Year to (2) the Participant's Compensation for
such Plan Year. Employer contributions on behalf of any Participant
shall include: (1) any Deferral Contributions made pursuant to the
Participant's deferral election, including Excess Deferrals of Highly
Compensated Employees, but excluding (a) Excess Deferrals of Non-Highly
Compensated Employees that arise solely from Deferral Contributions made
under the Plan or plans of the Employer and (b) Deferral Contributions
that are taken into account in the Contribution Percentage test
(provided the ADP test is satisfied both with and without exclusion of
these Deferral Contributions); and (2) at the election of the Employer,
Qualified Discretionary Contributions. Matching Contributions, whether
or not non-forfeitable when made, shall not be
12
considered as Employer Contributions for purposes of this paragraph. For
purposes of computing Actual Deferral Percentages, an Employee who would
be a Participant but for the failure to make Deferral Contributions
shall be treated as a Participant on whose behalf no Deferral
Contributions are made.
(2) "Excess Contributions" shall mean, with respect to any Plan Year,
the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated Employees for
such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of the ADPs, beginning with the
highest of such percentages).
(3) "Qualified Discretionary Contributions" shall mean contributions
made by the Employer as elected in Section 1.05(g) and allocated to
Participant accounts of Non-highly Compensated Employees that such
Participants may not elect to receive in cash until distributed from the
plan; that are nonforfeitable when made; and that are distributable only
in accordance with the distribution provisions that are applicable to
Deferral Contributions. Participants shall not be required to satisfy
any hours of service or employment requirement in order to receive an
allocation of such contributions.
(d) Notwithstanding any other provision of this plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall
be distributed no later than the last day of each Plan Year to participants
to whose accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than 2-1/2
months after the last day of the Plan Year in which such excess amounts
arose, a ten (10) percent excise tax will be imposed on the employer
maintaining the plan with respect to such amounts. Such distributions shall
be made to Highly Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of such
employees. Excess Contributions of Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the Deferral
Contributions (and amounts treated as Deferral Contributions) of each
family member that is combined to determine the combined ADP.
Excess Contributions shall be treated as annual additions under the
plan.
Excess Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Contributions
is (1) income or loss allocable to the Participant's Deferral Contribution
account (and if applicable, the Qualified Discretionary Contribution
account) for the Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Contributions for the year and the denominator
is the Participant's account balance attributable to Deferral Contributions
without regard to any income or loss occurring during such Plan Year, or
(2) an amount determined under any reasonable method, provided that such
method is used consistently for all Participants in calculating any
distributions required under Section 4.02(d) and Sections 4.01(c) and
4.04(d) for the Plan Year, and is used by the Plan in allocating income or
loss to the
13
8/1/93
Participants' accounts. Income or loss allocable to the period between the
end of the Plan Year and the date of distribution shall be disregarded in
determining income or loss.
Excess Contributions shall be distributed from the Participant's
Qualified Discretionary Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's Deferral
Contributions account.
4.03. Matching Contributions. If so provided by the Employer in Section
----------------------
1.05(c), the Employer shall make a Matching Contribution on behalf of each
Participant who had Deferral Contributions made on his behalf during the year
and who meets the requirement, if any, of Section l.05(c)(4). The amount of the
Matching Contribution shall be determined in accordance with Section 1.05(c),
subject to the limitations set forth in Section 4.04 and Section 404 of the
Code. Matching Contributions will not be allowed to be made by the Employer on
any voluntary nondeductible Employee Contributions.
4.04. Limit on Matching Contributions and Employee Contributions.
----------------------------------------------------------
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by 1.25;
or
(2) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are Non-
highly Compensated Employees for the same Plan Year multiplied by two
(2), provided that the ACP for Participants who are Highly Compensated
Employees does not exceed the ACP for Participants who are Non-highly
Compensated Employees by more than two (2) percentage points.
(b) The following special rules apply for purposes of this section:
(1) If one or more Highly Compensated Employees participate in both a
qualified cash or deferred arrangement described in Section 401(k) of
the Code (hereafter "CODA") and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ACP of those Highly Compensated Employees who
also participate in a CODA will be reduced (beginning with such Highly
Compensated Employee whose ACP is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet the ADP
and ACP tests. Multiple use does not occur if either the ADP or ACP of
the Highly Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the Non-highly Compensated Employees.
(2) For purposes of this section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to
14
his or her account under two or more plans described in section 401(a) of
the Code, or arrangements described in section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under regulations under
Section 401(m) of the Code.
(3) In the event that this plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this plan, then this
section shall be applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan. For plan years beginning
after December 31, 1989, plans may be aggregated in order to satisfy
Section 401(m) of the Code only if they have the same Plan Year.
(4) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most highly-paid
Highly Compensated Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of Family Members (as defined in
Section 414(q)(6) of the Code). Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who are Non-
highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(5) For purposes of determining the Contribution Percentage test, Employee
Contributions made pursuant to Section 1.05(d)(1) are considered to have
been made in the Plan Year in which contributed to the Trust. Matching
Contributions and Qualified Discretionary Contributions will be considered
made for a Plan Year if made no later than the end of the twelve-month
period beginning on the day after the close of the Plan Year.
(6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Discretionary
Contributions used in such test.
(7) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Aggregate Limit" shall mean the greater of (A) or (B) where (A) is
the sum of (i) 125 percent of the greater of the ADP of the Non-highly
Compensated Employees for the Plan Year or the ACP of Non-highly
Compensated Employees under the plan subject to Section 401(m) of the Code
for the Plan Year beginning with or within the Plan Year of the CODA and
(ii) the lesser of 200% or two plus the lesser of such ADP or ACP and where
(B) is the sum of (i) 125 percent of the lesser of the ADP of the Non-
highly Compensated Employees for the Plan Year or the
15
ACP of Non-highly Compensated Employees under the Plan subject to
Section 401(m) of the Code for the Plan Year beginning with or within
the Plan Year of the CODA and (ii) the lesser of 200% or two plus the
greater of such ADP or ACP.
(2) "Average Contribution Percentage" or "ACP" shall mean the average
of the Contribution Percentages of the Eligible Participants in a group.
(3) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year.
(4) "Contribution Percentage Amounts" shall mean the sum of the
Employee Contributions and Matching Contributions made under the plan on
behalf of the Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions. If so elected by the
Employer in Section l.05(b)(4), the Employer may include Qualified
Discretionary Contributions in the Contribution Percentage Amounts. The
Employer also may elect to use Deferral Contributions in the
Contribution Percentage Amounts so long as the ADP test is met before
the Deferral Contributions are used in the ACP test and continues to be
met following the exclusion of those Deferral Contributions that are
used to meet the ACP test.
(5) "Deferral Contribution" shall mean any contribution made at the
election of the Participant pursuant to a salary reduction agreement in
accordance with Section 4.01(a).
(6) "Eligible Participant" shall mean any Employee who is eligible to
make an Employee Contribution, or a Deferral Contribution (if the
employer takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution.
(7) "Employee Contribution" shall mean any voluntary non-deductible
contribution made to the plan by or on behalf of a Participant that is
included in the Participant's gross income in the year in which made and
that is maintained in a separate account to which earnings and losses
are allocated.
(8) "Matching Contribution" shall mean an Employer Contribution made to
this or any other defined contribution plan on behalf of a Participant
on account of a Participant's Deferral Contribution.
(9) "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of:
(A) The aggregate Contribution Percentage Amounts taken into account
in computing the numerator of the Contribution Percentage actually
made on behalf of Highly Compensated Employees for such Plan Year,
over
(B) The maximum Contribution Percentage Amounts permitted by the ACP
test (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
16
Such determination shall be made after first determining Excess
Deferrals pursuant to Section 4.C1 and then determining Excess
Contributions pursuant to Section 4.02.
(d) Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall
be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the Employee and
Matching Contributions of each family member that is combined to determine
the combined ACP. If such Excess Aggregate Contributions are distributed
more than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on the
employer maintaining the plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as annual additions under the
Plan.
Excess Aggregate Contributions shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to Excess
Aggregate Contributions is (1) income or loss allocable to the
Participant's Employee Contribution account, Matching Contribution account
(if any, and if all amounts therein are not used in the ADP test) and if
applicable, Qualified Non-elective Contribution account for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's account balance(s) attributable to Contribution Percentage
Amounts without regard to income or loss occurring during such Plan Year,
or (2) such other amount determined under any reasonable method, provided
that such method is used consistently for all Participants in calculating
any distributions required under Section 4.04(d) and Sections 4.01(c) and
4.02(d) for the Plan Year, and is used by the Plan in allocating income or
loss to the Participants' accounts. Income or loss allocable to the period
between the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions; the forfeitures shall be held in the money
market fund, if any, listed in Section 1.14(b) pending such application.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a prorata basis from the Participant's Employee Contribution
Account, Matching Contribution Account and if applicable, the Participant's
Deferral Contributions Account or Qualified Discretionary Contribution
Account or both.
4.05. Special Rules. Deferral Contributions and Qualified Discretionary
-------------
Contributions and income allocable to each are not distributable to a
Participant or his or her beneficiary or beneficiaries, in accordance with such
Participant's or beneficiary or beneficiaries election, earlier than upon
separation from service, death, or disability, except as otherwise provided in
Section 7.10, 7.11 or 10.06. Such amounts may also be distributed, but after
March 31, 1988 in the form of a lump sum only, upon:
(a) Termination of the Plan without establishment of another defined
contribution plan, other than an employee stock
17
ownership plan (as defined in Section 4975(e) or Section 409 of the Code)
or a simplified employee pension plan as defined in Section 408(k) of the
Code.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2)
of the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but only
with respect to employees who continue employment with the corporation
acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(2) of the Code) if such corporation continues to maintain this Plan,
but only with respect to employees who continue employment with such
subsidiary.
The Participant's accrued benefit derived from Deferral Contributions,
Qualified Discretionary Contributions and Employee Contributions (as defined in
Section 4.09) is nonforfeitable. Separate accounts for Deferral Contributions,
Qualified Discretionary Contributions, Employee Contributions and Matching
Contributions will be maintained for each Participant. Each account will be
credited with the applicable contributions and earnings thereon.
4.06. Fixed/Discretionary Employer Contributions. If so provided by the
------------------------------------------
Employer in Sections 1.05(a)(1) or 1.05(a)(2), for the Plan Year in which the
Plan is adopted and for each Plan Year thereafter, the Employer will make Fixed
or Discretionary Employer Contributions to the Trust in accordance with Section
1.05 to be allocated as follows:
(a) Fixed Employer Contributions shall be allocated among eligible
Participants (as determined in accordance with Section 1.05(a)(3)) in the
manner specified in Section 1.05(a).
(b) Discretionary Employer Contributions shall be allocated among
eligible Participants, as determined in accordance with Section 1.05(a)(3),
as follows:
(1) If the Non-Integrated Formula is elected in Section
1.05(a)(2)(A), such contributions shall be allocated to eligible
Participants in the ratio that each Participant's Compensation
bears to the total Compensation paid to all eligible Participants
for the Plan Year; and
(2) If the Integrated Formula is elected in Section
1.05(a)(2)(B), such contributions shall be allocated in the
following steps:
(A) First, to each eligible Participant in the same ratio
that the sum of the Participant's Compensation plus Excess
Compensation for the plan Year bears to the sum of the
Compensation plus Excess Compensation of all Participants
for the Plan Year. This allocation as a percentage of the
sum of each Participant's Compensation plus Excess
Compensation shall not exceed 5.7%.
(B) Any remaining Discretionary Employer Contribution shall
be allocated to each eligible Participant in the same ratio
that each Participant's Compensation for the Plan Year bears
18
to the total Compensation of all Participants for the Plan
Year.
For purposes of this Section, "Excess Compensation" means
Compensation in excess of the taxable wage base, as determined
under Section 230 of the Social Security Act, in effect on the
first day of the Plan Year. Further, this Section 4.06(b)(2)
shall be modified as provided in Section 9.03 for years in which
the Plan is top heavy under Article 9.
4.07. Time of Making Employer Contributions. The Employer will pay its
-------------------------------------
contribution for each Plan Year not later than the time prescribed by law for
filing the Employer's Federal income tax return for the fiscal (or taxable) year
with or within which such Plan Year ends (including extensions thereof). The
Trustee will have no authority to inquire into the correctness of the amounts
contributed and paid over to the Trustee, to determine whether any contribution
is payable under this Article 4, or to enforce, by suit or otherwise, the
Employer's obligation, if any, to make a contribution to the Trustee.
4.08. Return of Employer Contributions. The Trustee shall, upon request by the
--------------------------------
Employer, return to the Employer the amount (if any) determined under Section
14.22. Such amount shall be reduced by amounts attributable thereto which have
been credited to the Accounts of Participants who have since received
distributions from the Trust, except to the extent such amounts continue to be
credited to such Participants' Accounts at the time the amount is returned to
the Employer. Such amount shall also be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the gains and
income attributable thereto, but will not be increased by the gains and income
of the Trust attributable thereto, if and to the extent such gains and income
exceed the losses attributable thereto. In no event will the return of a
contribution hereunder cause the balance of the individual Account of any
Participant to be reduced to less than the balance which would have been
credited to the Account had the mistaken amount not been contributed.
4.09. Employee Contributions. If the Employer elected to permit Deferral
----------------------
Contributions in Section 1.05(b) and if so provided by the Employer in Section
1.05(d), each Participant may elect to make Employee Contributions to the Plan
in accordance with the rules and procedures established by the Employer and in
an amount not less than one percent (1%) and not greater than ten percent (10%)
of such Participant's Compensation for the Plan Year. Such contributions and all
Employee Contributions for Plan Years beginning after December 31, 1986 shall be
subject to the nondiscrimination requirements of Section 401(m) of the Code as
set forth in Section 4.04.
For purposes of this Plan, "Employee Contributions" shall mean any
voluntary non-deductible contribution made to a plan by or on behalf of a
Participant that is or was included in the Participant's gross income in the
year in which made and that is maintained under a separate account to which
applicable earnings and losses are allocated. Excess Contributions may not be
recharacterized as Employee Contributions.
Employee Contributions shall be paid over to the Trustee not later than
thirty (30) days following the end of the month in which the Participant makes
the contribution. A Participant shall have a fully vested 100% nonforfeitable
right to his Employee Contributions and the earnings or losses allocated
thereon. Distributions of Employee Contributions shall be made in accordance
with Section 7.10.
19
4.10. Rollover Contributions.
----------------------
(a) Rollover of Eligible Rollover Distributions
-------------------------------------------
(1) An Employee who is or was a distributee of an "eligible rollover
distribution" (as defined in Section 402(c)(4) of the Code and the
regulations issued thereunder) from a qualified plan or Section 403(b)
annuity may directly transfer all or any portion of such distribution to
the Trust or transfer all or any portion of such distribution to the
Trust within sixty (60) days of payment. The transfer shall be made in
the form of cash or allowable Fund Shares only.
(2) The Employer may refuse to accept rollover contributions or instruct
the Trustee not to accept rollover contributions under the Plan.
(b) Treatment of Rollover Amount.
----------------------------
(1) An account will be established for the transferring Employee under
Article 5, the rollover amount will be credited to the account and such
amount will be subject to the terms of the Plan, including Section 8.01,
except as otherwise provided in this Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) Entry into Plan by Transferring Employee. Although an amount may be
----------------------------------------
transferred to the Trust Fund under this Section 4.10 by an Employee who
has not yet become a Participant in accordance with Article 4, and such
amount is subject to the terms of the Plan as described in paragraph (b)
above, the Employee will not become a Participant entitled to share in
Employer contribution until he has satisfied such requirements.
(d) Monitoring of Rollovers.
-----------------------
(1) The Administrator shall develop such procedures and require such
information from transferring Employees as it deems necessary to insure
that amounts transferred under this Section 4.10 meet the requirements
for tax-free rollovers established by such Section and by Section 402(c)
of the Code. No such amount may be transferred until approved by the
Administrator.
(2) If a transfer made under this Section 4.10 is later determined by
the Administrator not to have met the requirements of this Section or of
the Code or Treasury regulations, the Trustee shall, within a reasonable
time after such determination is made, and on instructions from the
Administrator, distribute to the Employee the amounts then held in the
Trust attributable to the transferred amount.
4.11. Deductible Voluntary Employee Contributions. The Administrator will not
-------------------------------------------
accept deductible employee contributions which are made for a taxable year
beginning after December 31, 1986. Contributions made prior to that date will
be maintained in a separate account which will be nonforfeitable at all times
and which will share in the gains and losses of the trust in the same manner as
described in Section 5.02. No part of the deductible voluntary contribution
account will be used to purchase life insurance. Subject to Article VIII, the
Participant may
20
withdraw any part of the deductible voluntary contribution account upon request.
4.12. Additional Rules for Paired Plans. If the Employer has adopted a
---------------------------------
qualified plan under Fidelity Basic Plan Document No. 09 which is to be
considered as a paired plan with this Plan, the elections in Section 1.03 must
be identical to the Employer's corresponding elections for the other plan. When
the paired plans are top-heavy or are deemed to be top-heavy as provided in
Section 9.01, the Plan paired with this Plan will provide a minimum contribution
to each non-key Employee which is equal to 3 percent (or such other percent
elected by the Employer in Section 1.12(c)) of such Employee's Compensation.
Notwithstanding the preceding sentence, the minimum contribution shall be
provided by this Plan if contributions under the other Plan paired with this
Plan are frozen.
Article 5. Participants' Accounts.
----------------------
5.01. Individual Accounts. The Administrator will establish and maintain an
-------------------
Account for each Participant which will reflect Employer and Employee
Contributions made on behalf of the Participant and earnings, expenses, gains
and losses attributable thereto, and investments made with amounts in the
Participant's Account. The Administrator will establish and maintain such other
accounts and records as it decides in its discretion to be reasonably required
or appropriate in order to discharge its duties under the Plan.
5.02. Valuation of Accounts. Participant Accounts will be valued at their fair
---------------------
market value at least annually as of a date specified by the Administrator in
accordance with a method consistently followed and uniformly applied, and on
such date earnings, expenses, gains and losses on investments made with amounts
in each Participant's Account will be allocated to such Account. Participants
will be furnished statements of their Account values at least once each Plan
Year.
5.03. Code Section 415 Limitations. Notwithstanding any other provisions of the
----------------------------
Plan:
Subsections (a)(1) through (a)(4) -- (These subsections apply to Employers
------------------------------------
who do not maintain any qualified plan including a Welfare Benefit Fund, an
---------------------------------------------------------------------------
Individual Medical Account, or a simplified employee pension in addition to this
--------------------------------------------------------------------------------
Plan.)
-----
(a)(1) If the Participant does not participate in, and has never
participated in any other qualified plan, Welfare Benefit Fund, Individual
Medical Account, or a simplified employee pension, as defined in section
408(k) of the Code, maintained by the Employer, which provides an annual
addition as defined in Section 5.03(e)(1), the amount of Annual Additions
to a Participant's Account for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's account would cause the
annual additions for the limitation year to exceed the maximum permissible
amount, the amount contributed or allocated will be reduced so that the
annual additions for the limitation year will equal the maximum permissible
amount.
(a)(2) Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on
the basis of a reasonable estimation of the
21
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Participant's compensation for such Limitation Year, uniformly determined
for all Participants similarly situated. Any Employer contributions based
on estimated annual compensation shall be reduced by any Excess Amounts
carried over from prior years.
(a)(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year
shall be determined on the basis of the Participant's actual Compensation
for such Limitation Year.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the
allocation of forfeitures, or a reasonable error in determining the total
Elective Deferrals there is an Excess Amount with respect to a Participant
for a Limitation Year, such Excess Amount shall be disposed of as follows:
(A) Any nondeductible voluntary employee contributions ("employee
contributions") or Elective Deferrals, to the extent they would reduce the
Excess Amount, will be returned to the Participant. Any gains attributable
to returned employee contributions will also be returned or will be treated
as additional employee contributions for the Limitation Year in which the
employee contributions were made.
(B) If after the application of paragraph (A) an Excess amount
still exists and the Participant is in the service of the Employer which is
covered by the Plan at the end of the Limitation Year, then such Excess
Amount shall be reapplied to reduce future Employer contributions under
this Plan for the next Limitation Year (and for each succeeding year, as
necessary) for such Participant, so that in each such Year the sum of
actual Employer contributions plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to such
Participant's Account.
(C) If after the application of paragraph (A) an Excess Amount
still exists and the Participant is not in the service of the Employer
which is covered by the Plan at the end of a Limitation Year, then such
Excess Amount will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer contributions for all
remaining Participants in the next Limitation Year and each succeeding
Limitation Year if necessary.
(D) If a suspense account is in existence at any time during the
Limitation Year pursuant to this subsection, it will not participate in the
allocation of the Trust Fund's investment gains and losses. All amounts in
the suspense account must be allocated to the Accounts of Participants
before any Employer contribution may be made for the Limitation Year.
Except as provided in paragraph (A), Excess Amounts may not be distributed
to Participants or former Participants.
Subsections (b)(1) through (b)(6) - - (These subsections apply to
--------------------------
Employers who, in addition to this Plan, maintain one or more plans, all of
---------------------------------------------------------------------------
which are qualified Master or Prototype defined contribution Plans, any Welfare
-------------------------------------------------------------------------------
Benefit Fund, any Individual Medical Account, or any simplified employee
------------------------------------------------------------------------
pension.)
--------
(b)(1) If, in addition to this Plan, the Participant is covered under
any other qualified defined contribution plans (all of which are qualified
Master or Prototype Plans), Welfare Benefit Funds, Individual Medical
Accounts, or simplified employee pension Plans, maintained by the
Employer, that provide an annual addition as
22
defined in Section 5.03(e)(1), the amount of Annual Additions to a
Participant's Account for a Limitation Year, shall not exceed the lesser of:
(A) the Maximum Permissible Amount, reduced by the sum of any
Annual Additions to the Participant's accounts for the same
Limitation Year under such other qualified Master or Prototype
defined contribution plans, and Welfare Benefit Funds, Individual
Medical Accounts, and simplified employee pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other qualified
Master or Prototype defined contribution plans Welfare Benefit Funds, Individual
Medical Accounts and simplified employee pensions maintained by the Employer are
less than the maximum permissible amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's Account under
this plan would cause the annual additions for the limitation year to exceed
this limitation, the amount contributed or allocated will be reduced so that the
annual additions under all such plans and funds for the limitation year will
equal the maximum permissible amount. If the annual additions with respect to
the Participant under such other qualified Master or Prototype defined
contribution plans, Welfare Benefit Funds, Individual Medical Accounts and
simplified employee pensions in the aggregate are equal to or greater than the
maximum permissible amount, no amount will be contributed or allocated to the
Participant's Account under this plan for the limitation year.
(b)(2) Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the amounts referred to in (b)(1)(A) above may be
determined on the basis of a reasonable estimation of the Participant's
Compensation for such Limitation Year, uniformly determined for all Participants
similarly situated. Any Employer contribution based on estimated annual
Compensation shall be reduced by any Excess Amounts carried over from prior
years .
(b)(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be determined on
the basis of the Participant's actual Compensation for such Limitation Year.
(b)(4) If a Participant's Annual Additions under this Plan and all such other
plans result in an Excess Amount, such Excess Amount shall be deemed to consist
of the Annual Additions last allocated, except that Annual Additions
attributable to a simplified employee pension will be deemed to have been
allocated first, followed by Annual Additions to a Welfare Benefit Fund or
Individual Medical Account regardless of the actual allocation date.
(b)(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan, the
Excess Amount attributed to this Plan will be the product of:
(A) the total Excess Amount allocated as of such date (including any amount
which would have been allocated but for the limitations of Section 415 of the
Code), times
(B) the ratio of (i) the Annual Additions allocated to the Participant as of
such date under this Plan, divided by (ii) the Annual Additions allocated as
of such date under all
23
qualified defined contribution plans (determined without regard to the
limitations of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as
provided in subsection (a)(4).
Subsection (c)-- (This subsection applies only to Employers who, in addition
----------------------------------------------------------
to this Plan, maintain one or more qualified plans which are qualified defined
------- ----------------------------------------------------------------------
contribution plans other than Master or Prototype Plans.)
------------------ -------------------------------------
(c) If the Employer also maintains another plan which is a qualified defined
contribution plan other than a Master or Prototype Plan, Annual Additions
allocated under this Plan on behalf of any Participant shall be limited in
accordance with the provisions of (b)(1) through (b)(6), as though the
other plan were a Master or Prototype Plan, unless the Employer provides
other limitations in the Adoption Agreement.
Subsection (d)-- (This subsection applies only to Employers who, in addition
----------------------------------------------------------
to this Plan, maintain or at any time maintained a qualified defined benefit
------- --------------------------------------------------------------------
plan.)
-----
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan, the sum of any Participant's Defined Benefit Fraction
and Defined Contribution Fraction shall not exceed the combined plan
limitation of 1.0 in any Limitation Year. The combined plan limitation will
be met as provided by the Employer in the Adoption Agreement.
Subsections (e)(1) through (e)(9) -- (Definitions.)
---------------------------------------------------
(e)(1) "Annual Additions" means the sum of the following amounts credited
to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee contributions,
(C) all forfeitures,
(D) Xxxxxxx allocated, after March 31, 1964, to an Individual Medical
Account which is part of a pension or annuity plan maintained by the
Employer are treated as Annual Additions to a defined contribution
plan. Also, amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee, as defined in Section 419A(d)(3)
of the Code, under a Welfare Benefit Fund maintained by the Employer
are treated as Annual Additions to a defined contribution plan, and
(E) Allocations under a simplified employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce Employer
contributions under subsection (a)(4) shall also be included as Annual
Additions.
(e)(2) "Compensation" means wages as defined in Section 3401 (a) of the
Code and all other payments of compensation to an employee by the employer
(in the course of the employer's trade or business) for which the employer
is required to furnish the employee a written statement under Sections
6041(d) and 6051(a)(3) of the
24
8/1/93
Code. Compensation must be determined without regard to any rules under Section
3401(a) of the Code that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Section 3401(a)(2) of the Code.)
For any Self-Employed Individual compensation will mean Earned Income.
For limitation years beginning after December 31, 1991, for purposes of applying
the limitations of this article, compensation for a limitation year is the
compensation actually paid or made available during such limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of which is
the sum of the Participant's annual benefits (adjusted to an actuarially
equivalent straight life annuity if such benefit is expressed in a form other
than a straight life annuity or qualified joint and survivor annuity) under all
the defined benefit plans (whether or not terminated) maintained by the
Employer, each such annual benefit computed on the assumptions that the
Participant will remain in employment until the normal retirement age under each
such plan (or the Participant's current age, if later) and that all other
factors used to determine benefits under such plan will remain constant for all
future Limitation Years, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation Year under
Sections 415(b)(1)(A) and 415(d) of the Code or 140 percent of the
Participant's average Compensation for the 3 highest consecutive calendar years
of service during which the Participant was active in each such plan, including
any adjustments under Section 415(b) of the Code. However, if the Participant
was a participant as of the first day of the first Limitation Year beginning
after December 31, 1966 in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986 then the denominator of the
Defined Benefit Fraction shall not be less than 125 percent of the Participant's
total accrued benefit as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986, under all such defined benefit plans as met,
individually and in the aggregate, the requirements of Section 415 of the Code
for all Limitation Years beginning before January 1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator of which
is the sum for the current and all prior Limitation Years of (A) all Annual
Additions (if any) to the Participant's accounts under each defined contribution
plan (whether or not terminated) maintained by the Employer, and (B) all Annual
Additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans (whether or not terminated) maintained by the
Employer, and the Participant's Annual Additions attributable to all Welfare
Benefit Funds, Individual Medical Accounts, and simplified employee pensions,
maintained by the Employer, and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years during
which the Participant was an Employee (regardless of whether the Employer
maintained a defined contribution plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser of 125
percent of the dollar limitation in effect under
25
8/1/93
Section 415(c)(1)(A) of the Code for each such year or 35 percent of the
Participant's Compensation for each such year.
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986 then the numerator of the Defined Contribution Fraction shall be adjusted
if the sum of this fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment an amount equal
to the product of (i) the excess of the sum of the fractions over 1.0 times (ii)
the denominator of this fraction will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the fractions as
they would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and conditions
of the plan made after May 6, 1986, but using the Section 415 limitation
applicable to the first Limitation Year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January 1, 1987
shall not be recomputed to treat all employee contributions as annual additions.
(e)(5) "Employer" means the Employer and any Related Employer that adopts this
Plan. In the case of a group of employers which constitutes a controlled group
of corporations (as defined in Section 414(b) of the Code as modified by Section
415(h)) or which constitutes trades or businesses (whether or not incorporated)
which are under common control (as defined in Section 414(c) of the Code as
modified by Section 415(h) of the Code) or which constitutes an affiliated
service group (as defined in Section 414(m) of the Code) and any other entity
required to be aggregated with the Employer pursuant to regulations issued under
Section 414(o) of the Code, all such employers shall be considered a single
employer for purposes of applying the limitations of this Section 5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical account as
defined in Section 415(1)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified plans of the
Employer must use the same Limitation Year. If the Limitation Year is amended to
a different 12-consecutive month period, the new Limitation Year must begin on a
date within the Limitation Year in which the amendment is made.
(e)(9) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with respect
to any Participant the lesser of (i) $30,000 or, if greater, 25 percent of the
dollar limitation set forth in Section 415(b)(1) of the Code, as in effect for
the Limitation Year, or (ii) 25 percent of the Participant's Compensation for
the Limitation Year. If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12-consecutive month
period, the Maximum Permissible Amount will not exceed the limitation in
(e)(10)(i) multiplied by a fraction whose
26
8/1/93
numerator is the number of months in the short Limitation Year and whose
denominator is 12.
The compensation limitation referred to in subsection (e)(10)(ii)
shall not apply to any contribution for medical benefits within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code after separation from
service which is otherwise treated as an Annual Addition under Section
419A(d)(2) or Section 415(1)(1) of the Code.
(e) (11) "Welfare Benefit Fund" means a welfare benefit fund as defined in
Section 419(e) of the Code.
Article 6. Investment of Contributions.
---------------------------
6.01. Manner of Investment. All contributions made to the Accounts of
--------------------
Participants shall be held for investment by the Trustee. The Accounts of
Participants shall be invested and reinvested only in eligible investments
selected by the Employer in Section 1.14(b), subject to Section 14.10.
6.02. Investment Decisions. Investments shall be directed by the
--------------------
Employer or by each Participant or both, in accordance with the
Employer's election in Section 1.14(a). Pursuant to Section 14.04, the
Trustee shall have no discretion or authority with respect to the
investment of the Trust Fund.
(a) With respect to those Participant Accounts for which Employer investment
direction is elected, the Employer has the right to direct the Trustee in
writing with respect to the investment and reinvestment of assets comprising
the Trust Fund in the Fidelity Fund(s) designated in Section 1.14(b) and as
allowed by the Trustee.
(b) If Participant investment direction is elected, each Participant shall
direct the investment of his Account among the Fidelity Funds listed in
Section 1.14(b). The Participant shall file initial investment instructions
with the Administrator, on such form as the Administrator may provide,
selecting the Funds in which amounts credited to his Account will be
invested.
(1) Except as provided in this Section 6.02, only authorized Plan contacts
and the Participant shall have access to a Participant's account. While
any balance remains in the Account of a Participant after his death, the
Beneficiary of the Participant shall make decisions as to the investment
of the Account as though the Beneficiary were the Participant. To the
extent required by a qualified domestic relations order as defined in
Section 414(p) of the Code, an alternate payee shall make investment
decisions with respect to a Participant's Account as though such alternate
payee were the Participant.
(2) If the Trustee receives any contribution under the Plan as to which
investment instructions have not been provided, the Trustee shall promptly
notify the Administrator and the Administrator shall take steps to elicit
instructions from the Participant. The Trustee shall credit any such
contribution to the Participant's Account and such amount shall be
invested in the Fidelity Fund selected by the Employer for such purposes
or, absent Employer selection, in the most conservative Fidelity Fund
listed in Section 1.14(b), until investment instructions have been
received by the Trustee.
27
8/1/93
(c) All dividends, interest, gains and distributions of any nature
received in respect of Fund Shares shall be reinvested in additional shares
or that Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is made.
6.03. Participant Directions to Trustee. All Participant initial investment
---------------------------------
instructions filed with the Administrator pursuant to the provisions of Section
6.02 shall be promptly transmitted by the Administrator to the Trustee. A
Participant shall transmit subsequent investment instructions directly to the
Trustee by means of the telephone exchange system maintained by the Trustee for
such purposes. The method and frequency for change of investments will be
determined under the (1) rules applicable to the investments selected by the
Employer in Section 1.14(b) and (2) the additional rules of the Employer, if
any, limiting the frequency of investment changes, which are included in a
separate written administrative procedure adopted by the Employer and accepted
by the Trustee. The Trustee shall have no duty to inquire into the investment
decisions of a Participant or to advise him regarding the purchase, retention or
sale of assets credited to his Account.
Article 7. Right to Benefits.
-----------------
7.01. Normal or Early Retirement. Each Participant who attains his Normal
--------------------------
Retirement Age or, if so provided by the Employer in Section 1.06(b). Early
Retirement Age will have a 100 percent nonforfeitable interest in his Account
regardless of any vesting schedule elected in Section 1.07. If a Participant
retires upon the attainment of Normal or Early Retirement Age, such retirement
is referred to as a normal retirement. Upon his normal retirement the balance
of the Participant's Account, plus any amounts thereafter credited to his
Account, subject to the provisions of Section 7.08, will be distributed to him
in accordance with Article 8.
If a Participant separates from service before satisfying the age
requirements for early retirement, but has satisfied the service requirement,
the Participant will be entitled to elect an early retirement distribution upon
satisfaction of such age requirement.
7.02. Late Retirement. If a Participant continues in the service of the
---------------
Employer after attainment of Normal Retirement Age, he will continue to have a
100 percent nonforfeitable interest in his Account and will continue to
participate in the Plan until the date he establishes with the Employer for his
late retirement. Until he retires, he has a continuing election to receive all
or any portion of his Account. Upon the earlier of his late retirement or the
distribution date required under Section 8.08, the balance of his Account, plus
any amounts thereafter credited to his Account, subject to the provisions of
Section 7.08, will be distributed to him in accordance with Article 8 below.
7.03. Disability Retirement. If so provided by the Employer in Section
---------------------
1.06(c), a Participant who becomes disabled will have a 100 percent
nonforfeitable interest in his Account, the balance of which Account, plus any
amounts thereafter credited to his Account, subject to the provisions of Section
7.08, will be distributed to him in accordance with Article 8 below. A
Participant is considered disabled if he cannot
28
8/1/93
engage in any substantial, gainful activity because of a medically determinable
physical or mental impairment likely to result in death or to be of a continuous
period of not less than 12 months, and terminates his employment with the
employer. Such termination of employment is referred to as a disability
retirement. Determinations with respect to disability shall be made by the
Administrator who may rely on the criteria set forth in Section 1.06(c) as
evidence that the Participant is disabled.
7.04. Death. Subject, if applicable, to Section 8.04, if a Participant dies
-----
before the distribution of his Account has commenced, or before such
distribution has been completed, his Account shall become 100 percent vested and
his designated Beneficiary or Beneficiaries will be entitled to receive the
balance or remaining balance of his Account, plus any amounts thereafter
credited to his Account, subject to the provisions of Section 7.08.
Distribution to the Beneficiary or Beneficiaries will be made in accordance with
Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change any
prior designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one person
is designated as the Beneficiary, their respective interests shall be as
indicated on the designation form. In the case of a married Participant the
Participant's spouse shall be deemed to be the designated Beneficiary unless the
Participant's spouse has consented to another designation in the manner
described in Section 8.03 (d).
A copy of the death notice or other sufficient documentation must be filed
with and approved by the Administrator. If upon the death of the Participant
there is, in the opinion of the Administrator, no designated Beneficiary for
part or all of the Participant's Account, such amount will be paid to his
surviving spouse or, if none, to his estate (such spouse or estate shall be
deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies
after benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the Administrator, no person has been
designated to receive such remaining benefits, then such benefits shall be paid
in a lump sum to the deceased Beneficiary's estate.
7.05. Other Termination of Employment. If a Participant terminates his
-------------------------------
employment for any reason other than death or normal, late, or disability
retirement, he will be entitled to a termination benefit equal to (i) the vested
percentage(s) of the value of the Matching and/or Fixed/Discretionary
Contributions to his Account, as adjusted for income, expense, gain, or loss,
such percentage(s) determined in accordance with the vesting schedule(s)
selected by the Employer in Section 1.07, and (ii) the value of the Deferral,
Employee, Qualified Discretionary and Rollover Contributions to his Account as
adjusted for income, expense, gain or loss. The amount payable under this
Section 7.05 will be subject to the provisions of Section 7.08 and will be
distributed in accordance with Article 8 below.
7.06. Separate Account. If a distribution from a Participant's Account has
----------------
been made to him at a time when he has a nonforfeitable right to less than 100
percent of his Account, the vesting schedule in Section 1.07 will thereafter
apply only to amounts in his Account attributable to Employer Contributions
allocated after such distribution. The balance of his Account immediately after
such distribution will be transferred to a separate account which will be
maintained for the purpose of determining his interest therein according to the
following provisions.
29
8/1/93
At any relevant time prior to a forfeiture of any portion thereof under
Section 7.07 a Participant's nonforfeitable interest in his Account held in a
separate account described in the preceding paragraph will be equal to P(AB +
(RxD)) - (RxD), where P is the nonforfeitable percentage at the relevant time
determined under Section 7.05; AB is the account balance of the separate account
at the relevant time; D is the amount of the distribution; and R is the ratio of
the account balance at the relevant time to the account balance after
distribution. Following a forfeiture of any portion of such separate account
under Section 7.07 below, any balance in the Participant's separate account will
remain fully vested and nonforfeitable.
7.07. Forfeitures. If a Participant terminates his employment, any portion
-----------
of his Account (including any amounts credited after his termination of
employment) not payable to him under Section 7.05 will be forfeited by him upon
the complete distribution to him of the vested portion of his Account, if any,
subject to the possibility of reinstatement as described in the following
paragraph. For purposes of this paragraph, if the value of an Employee's vested
account balance is zero, the Employee shall be deemed to have received a
distribution of his vested interest immediately following termination of
employment. Such forfeitures will be applied to reduce the contributions of the
Employer next payable under the Plan (or administrative expenses of the Plan);
the forfeitures shall be held in a money market fund pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but does again become an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or gains
of the assets credited to his Account since the date forfeited, will be
recredited to his Account (or to a separate account as described in Section
7.06, if applicable) but only if he repays to the Plan before the earlier of
five years after the date of his reemployment or the date he incurs 5
consecutive 1-year breaks in service following the date of the distribution the
amount previously distributed to him, without interest, under Section 7.05. If
an Employee is deemed to receive a distribution pursuant to this Section 7.07,
and the Employee resumes employment before 5 consecutive 1-year breaks in
service, the Employee shall be deemed to have repaid such distribution on the
date of his reemployment. Upon such an actual or deemed repayment, the
provisions of the Plan (including Section 7.06) will thereafter apply as if no
forfeiture had occurred. The amount to be recredited pursuant to this paragraph
will be derived first from the forfeitures, if any, which as of the date of
recrediting have yet to be applied as provided in the preceding paragraph and,
to the extent such forfeitures are insufficient, from a special Employer
contribution to be made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his
Account following his termination of employment, the non-vested portion of his
Account shall be forfeited after the Participant has incurred five consecutive
1-year breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's withdrawal
of Employee contributions.
7.08. Adjustment for Investment Experience. If any distribution under this
------------------------------------
Article 7 is not made in a single payment, the amount retained by the Trustee
after the distribution will be subject to adjustment until distributed to
reflect the income and gain or loss on the investments in which such amount is
invested and any expenses properly charged under the Plan and Trust to such
amounts.
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7.09. Participant Loans. If permitted under Section 1.09, the Administrator
-----------------
shall allow Participants to apply for a loan from the Plan, subject to the
following:
(a) Loan Application. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the Administrator on
forms available from the Administrator. Loans shall be made available to all
Participants on a reasonably equivalent basis. For this purpose, the term
"Participant" means any Participant or Beneficiary, including an alternate
payee under a qualified domestic relations order, as defined in Section 414
(p) of the Code, who is a party-in-interest (as determined under ERISA
Section 3(14)) with respect to the Plan except no loans will be made to: (i)
an Employee who makes a rollover contribution in accordance with Section 4.10
who has not satisfied the requirements of Section 3.01, or (ii) a
shareholder-employee or Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an electing small
business (Subchapter S) corporation who owns (or is considered as owning
within the meaning of Section 318(a)(1) of the Code), on any day during the
taxable year of such corporation, more than 5% of the outstanding stock of
the corporation.
A Participant with an existing loan may not apply for another loan
until the existing loan is paid in full and may not refinance an existing
loan or attain a second loan for the purpose of paying off the existing
loan. A Participant may not apply for more than one loan during each Plan
Year.
(b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other Employees. No loan to any Participant or
Beneficiary can be made to the extent that such loan when added to the
outstanding balance of all other loans to the Participant or Beneficiary
would exceed the lesser of (a) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans during the one year period ending on
the day before the loan is made over the outstanding balance of loans from
the plan on the date the loan is made, or (b) one-half the present value of
the nonforfeitable Account of the Participant. For the purpose of the above
limitation, all loans from all plans of the Employer and Related Employers
are aggregated. A Participant may not request a loan for less than $1,000.
The Employer may provide that loans only be made from certain contribution
sources within Participant Account(s) by notifying the Trustee in writing of
the restricted source.
Loans may be made for any purpose or if elected by the Employer in
Section 1.09(a), on account of hardship only. A loan will be considered to
be made on account of hardship only if made on account of an immediate and
heavy financial need described in Section 7.10(b)(1).
(c) Terms of Loan. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates
charged by persons in the business of lending money for loans which would be
made under similar circumstances. The determination of a reasonable rate of
interest must be based on appropriate regional factors unless the Plan is
administered on a national basis in which case the Administrator may
establish a uniform reasonable rate of interest applicable to all regions.
All loans shall by their terms require that repayment (principal and
interest) be amortized in level payments, not less
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than quarterly, over a period not extending beyond five years from the date
of the loan unless such loan is for the purchase of a Participant's primary
residence, in which case the repayment period may not extend beyond ten
years from the date of the loan. A Participant may prepay the outstanding
loan balance prior to maturity without penalty.
(d) Security. Loans must be secured by the Participant's Accounts not to
exceed 50 percent of the Participant's vested Account. A Participant must
obtain the consent of his or her spouse, if any, to use a Participant
Account as security for the loan, if the provisions of Section 8.03 apply to
the Participant. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is to
be so secured. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a Plan representative or notary
public. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan.
(e) Default. The Administrator shall treat a loan in default if:
(1) any scheduled repayment remains unpaid more than 90 days;
(2) there is an outstanding principal balance existing on a loan after
the last scheduled repayment date.
Upon default or termination of employment, the entire outstanding
principal and accrued interest shall be immediately due and payable. If a
distributable event (as defined by the Code) has occurred, the Administrator
shall direct the Trustee to foreclose on the promissory note and offset the
Participant's vested Account by the outstanding balance of the loan. If a
distributable event has not occurred, the Administrator shall direct the
Trustee to foreclose on the promissory note and offset the Participant's
vested Account as soon as a distributable event occurs.
(f) Pre-existing loans. The provision in paragraph (a) of this Section 7.09
limiting a Participant to one outstanding loan shall not apply to loans made
before the Employer adopted this prototype plan document. A Participant may
not apply for a new loan until all outstanding loans made before the
Employer adopted this prototype plan have been paid in full. The Trustee may
accept any loan made before the Employer adopted this prototype plan
document except such loans which require the Trustee to hold as security for
the loan property other than the Participant's vested Account.
As of the effective date of amendment of this Plan in Section 1.01(g)(2),
the Trustee shall have the right to reamortize the outstanding principal
balance of any Participant loan that is delinquent. Such reamortization
shall be based upon the remaining life of the loan and the original maturity
date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account used as a security interest held by the plan by
reason of a loan outstanding to the Participant shall be taken into account
for purposes of determining the amount of the Account payable at the time of
death or distribution, but only if the reduction is used as repayment of the
loan. If less than 100% of the Participant's vested Account (determined
without regard to the preceding sentence) is payable to the surviving
spouse, then the Account shall be adjusted by first reducing the vested
Account by the amount of the security used as repayment of
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the loan, and then determining the benefit payable to the surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent that
such loan when added to the outstanding balance of all other loans to the
Participant or Beneficiary would exceed the lesser of (a) $50,000 reduced by
the excess (if any) of the highest outstanding balance of loans during the
one year period ending on the day before the loan is made over the
outstanding balance of loans from the plan on the date the loan is made, or
(b) one-half the present value of the nonforfeitable Account of the
Participant. For the purpose of the above limitation, all loans from all
plans of the Employer and Related Employers are aggregated.
7.10. In-Service/Hardship Withdrawals. Subject to the provisions of Article 8,
-------------------------------
a Participant shall not be permitted to withdraw any Employer or Employee
Contributions (and earnings thereon) prior to retirement or termination of
employment, except as follows:
(a) Age 59 1/2. If permitted under Section 1.11(b), a Participant who has
attained the age of 59 1/2 is permitted to withdraw upon request all or any
portion the Accounts specified by the Employer in 1.11(b).
(b) Hardship. If permitted under Section 1.10, a Participant may apply
to the Administrator to withdraw some or all of his Deferral Contributions (and
earnings thereon accrued as of December 31, 1988) and, if applicable, Rollover
Contributions and such other amounts allowed by a predecessor plan, if such
withdrawal is made on account of a hardship. For purposes of this Section, a
distribution is made on account of hardship if made on account of an immediate
and heavy financial need of the Employee where such Employee lacks other
available resources. Determinations with respect to hardship shall be made by
the Administrator and shall be conclusive for purposes of the Plan, and shall be
based on the following special rules:
(1) The following are the only financial needs considered immediate and
heavy: expenses incurred or necessary for medical care (within the meaning
of Section 213(d) of the Code) of the Employee, the Employee's spouse,
children, or dependents; the purchase (excluding mortgage payments) of a
principal residence for the Employee; payment of tuition and related
educational fees for the next twelve (12) months of post-secondary
education for the Employee, the Employee's spouse, children or dependents;
or the need to prevent the eviction of the Employee from, or a foreclosure
on the mortgage of, the Employee's principal residence.
(2) A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other than the
hardship distributions, and all nontaxable (at the time of the loan)
loans currently available under all plans maintained by the Employer;
(ii) The Employee suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the date of
his hardship distribution. The suspension must also apply to all
elective contributions and employee contributions to all other
qualified plans and non-qualified plans maintained by the Employer,
other than any mandatory employer contribution portion of a defined
benefit plan, including stock option, stock purchase and other
33
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similar plans, but not including health and welfare benefit plans
(other than the cash or deferred arrangement portion of a cafeteria
plan);
(iii) The distribution is not in excess of the amount of an immediate
and heavy financial need (including amounts necessary to pay any Federal,
state or local income taxes or penalties reasonably anticipated to result
from the distribution); and
(iv) The Employee agrees to limit Deferral Contributions (elective
contributions) to the Plan and any other qualified plan maintained by the
Employer for the Employee's taxable year immediately following the
taxable year of the hardship distribution to the applicable limit under
Section 402(g) of the Code for such taxable year less the amount of such
Employee's Deferral Contributions for the taxable year of the hardship
distribution.
(3) A Participant must obtain the consent of his or her spouse, if any, to
obtain a hardship withdrawal, if the provisions of Section 8.03 apply to
the Participant.
(c) Employee Contributions. A Participant may elect to withdraw, in cash, up
to one hundred percent of the amount then credited to his Employee
Contribution Account. Such withdrawals shall be limited to one (1) per Plan
Year unless this prototype plan document is an amendment of a prior plan
document, in which case the rules and restrictions governing employee
contribution withdrawals, if any, are incorporated herein by reference.
7.11. Prior Plan In-Service Distribution Rules. If designated by the Employer in
----------------------------------------
Section 1.11(b), a Participant shall be entitled to withdraw at anytime prior to
his termination of employment, subject to the provisions of Article 8 and the
prior plan, any vested Employer Contributions maintained in a Participant's
Account for the specified period of time.
Article 8. Distribution of Benefits Payable after Termination of Service.
-------------------------------------------------------------
8.01. Distribution of Benefits to Participants and Beneficiaries.
----------------------------------------------------------
(a) Distributions from the Trust to a Participant or to the Beneficiary of
the Participant shall be made in a lump sum in cash or, if elected by the
Employer in Section 1.11, under a systematic withdrawal plan (installment(s))
upon retirement, death, disability, or other termination of employment,
unless another form of distribution is required or permitted in accordance
with paragraph (d) of this Section 8.01 or Sections 1.11(c), 8.02, 8.03, 8.04
or 11.02. A distribution may be made in Fund Shares, at the election of the
Participant, pursuant to the qualifying rollover of such distribution to a
Fidelity Investments individual retirement account.
(b) Distributions under a systematic withdrawal plan must be made in
substantially equal annual, or more frequent, installments, in cash, over a
period certain which does not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary, or, if the Participant dies prior
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to the commencement of his benefits the life expectancy of the Participant's
Beneficiary, as further described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s) was,
$3,500 or less, the balance of such Account shall be distributed in a lump
sum as soon as practicable following retirement, disability, death or other
termination of employment.
(d) This paragraph (d) applies to distributions made on or after January 1,
l993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 8, a distributee
may elect, at the time and in the manner prescribed by the Administrator, to
have any portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct rollover.
The following definitions shall apply for purposes of this paragraph (d):
(1) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of
the distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible
rollover distribution to a surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
8.02. Annuity Distributions. If so provided in Section 1.11(C), a Participant
---------------------
may elect distributions made in whole or in part in the form of an annuity
contract subject to the provisions of Section 8.03.
(a) An annuity contract distributed under the Plan must be purchased from an
insurance company and must be nontransferable. The terms of an annuity
contract shall comply with the requirements
35
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of the Plan and distributions under such contract shall be made in accordance
with Section 401 (a) (9) of the Code and the regulations thereunder.
(b) The payment period of an annuity contract distributed to the Participant
pursuant to this Section may be as long as the Participant lives. If the
annuity is payable to the Participant and his spouse or designated
Beneficiary, the payment period of an annuity contract may be for as long as
either the Participant or his spouse or designated Beneficiary lives. Such an
annuity may provide for an annuity certain feature for a period not exceeding
the life expectancy of the Participant. If the annuity is payable to the
Participant and his spouse such period may not exceed the joint life and last
survivor expectancy of the Participant and his spouse, or, if the annuity is
payable to the Participant and a designated Beneficiary, the joint life and
last survivor expectancy of the Participant and such Beneficiary. If the
Participant dies prior to the commencement of his benefits, the payment period
of an annuity contract distributed to the Beneficiary of the Participant may
be as long as the Participant's Beneficiary lives, and may provide for an
annuity certain feature for a period not exceeding the life expectancy of
the Beneficiary. Any annuity contract distributed under the Plan must provide
for nonincreasing payments.
8.03. Joint and Survivor Annuities/Preretirement Survivor Annuities.
-------------------------------------------------------------
(a) Application. The provisions of this Section supersede any conflicting
-----------
provisions of the Plan; provided, however, that paragraph (b) of this Section
shall not apply if the Participant's Account does not exceed or at the time of
any prior distribution did not exceed $3,500. A Participant is described in
this Section only if (i) the Participant has elected distribution of his
Account in the form of an Annuity Contract in accordance with Section 8.02,
or (ii) the Trustee has directly or indirectly received a transfer of assets
from another plan (including a predecessor plan) to which Section 401 (a) (11)
of the Code applies with respect to such Participant .
(b) Retirement Annuity. Unless the Participant elects to waive the
------------------
application of this subsection in a manner satisfying the requirements of
subsection (d) below, to the extent applicable to the Participant, within the
90-day period preceding his Annuity Starting Date (which election may be
revoked, and if revoked, remade, at any time in such period), the vested
Account due any Participant to whom this subsection (b) applies will be paid
to him by the purchase and delivery to him of an annuity contract described
in Section 8.02 providing a life annuity only form of benefit or, if the
Participant is married as of his Annuity Starting Date, providing an immediate
annuity for the life of the Participant with a survivor annuity for the life
of the Participant's spouse (determined as of the date of distribution of the
contract) which is 50 percent of the amount of the annuity which is payable
during the joint lives of the Participant and such spouse. The Participant may
elect to receive distribution of his benefits in the form of such annuity as
of the earliest date on which he could elect to receive retirement benefits
under the Plan. Within the period beginning 90 days prior to the Participant's
Annuity Starting Date and ending 30 days prior to such Date, the Administrator
will provide such Participant with a written explanation of (i) the terms and
conditions of the annuity contract described herein, (ii) the Participant's
right to make and the effect of an election to waive application of this
subsection, (iii) the rights of the Participant's spouse under subsection (d),
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and (iv) the right to revoke and the period of time effect of a revocation of
the election to waive application of this subsection.
(c) Annuity Death Benefit. Unless the Participant elects to waive the
---------------------
application of this subsection in a manner satisfying the requirements of
subsection (d) below at any time within the applicable election period (which
election may be revoked, and if revoked, remade, at any time in such period),
if a married Participant to whom this Section applies dies before his Annuity
Starting Date, then notwithstanding any designation of a Beneficiary to the
contrary, 50 percent of his vested Account will be applied to purchase an
annuity contract described in Section 8.02 providing an annuity for the life
of the Participant's surviving spouse, which contract will then be promptly
distributed to such spouse. In lieu of the purchase of such an annuity
contract, the spouse may elect in writing to receive distributions under the
Plan as if he or she had been designated by the Participant as his Beneficiary
with respect to 50 percent of his Account. For purposes of this subsection,
the applicable election period will commence on the first day of the Plan Year
in which the Participant attains age 35 and will end on the date of the
Participant's death, provided that in the case of a Participant who
terminates his employment the applicable election period with respect to
benefits accrued prior to the date of such termination will in no event
commence later than the date of his termination of employment. A Participant
may elect to waive the application of this subsection prior to the Plan Year
in which he attains age 35, provided that any such waiver will cease to be
effective as of the first day of the Plan Year in which the Participant
attains age 35.
The Administrator will provide a Participant to whom this subsection applies
with a written explanation with respect to the annuity death benefit described
in this subsection (c) comparable to that required under subsection (b) above.
Such explanation shall be furnished within whichever of the following periods
ends last: (i) the period beginning with the first day of the Plan Year in
which the Participant reaches age 32 and ending with the end of the Plan Year
preceding the Plan Year in which he reaches age 35, (ii) a reasonable period
ending after the Employee becomes a Participant, (iii) a reasonable period
ending after this Section 8.04 first becomes applicable to the Participant in
accordance with Section 8.04(a), (iv) in the case of a Participant who
separates from service before age 35, a reasonable period of time ending after
separation from service. For purposes of the preceding sentence, the two-year
period beginning one year prior to the date of the event described in clause
(ii), (iii) or (iv), whichever is applicable, and ending one year after such
date shall be considered reasonable, provided, that in the case of a
Participant who separates from service under (iv) above and subsequently
recommences employment with the Employer, the applicable period for such
Participant shall be predetermined in accordance with this subsection.
(d) Requirements of Elections. This subsection will be satisfied with
-------------------------
respect to a waiver or designation which is required to satisfy this
subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing, which consent
must acknowledge the effect of such waiver or designation and be witnessed by
a notary public or Plan representative, or
37
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(2) the Participant establishes to the satisfaction of the Administrator
that the consent of the Participant's spouse cannot be obtained because
there is no spouse, because the spouse cannot be located or because of
such other circumstances as the Secretary of Treasury may prescribe.
Any consent by a spouse, or establishment that the consent of a spouse
may not be obtained, will be effective only with respect to a specific
Beneficiary (including any class of beneficiaries or any contingent
beneficiaries) or form of benefits identified in the Participant's
waiver or designation, unless the consent of the spouse expressly
permits designations by the Participant without any requirement of
further consent by the spouse. A consent which permits such
designations by the Participant shall acknowledge that the spouse has
the right to limit consent to a specific Beneficiary and form of
benefits and that the spouse voluntarily elects to relinquish both such
rights. A consent by a spouse shall be irrevocable once made. Any such
consent, or establishment that such consent may not be obtained, will
be effective only with respect to such spouse. For purposes of
subsections (b) and (c) above, no consent of a spouse shall be valid
unless the notice required by such subsection, whichever is applicable,
has been provided to the Participant.
(e) Former Spouse. For purposes of this Section 8.03, a former spouse
-------------
of a Participant will be treated as the spouse or surviving spouse of the
Participant, and a current spouse will not be so treated, to the extent
required under a qualified domestic relations order, as defined in Section
414 (p) of the Code.
(f) Vested Account Balance. For purposes of this Section, vested
----------------------
Account shall the aggregate value of the Participant's vested Account
derived from Employer and Employee contributions (including rollovers),
whether vested before or upon death. The provisions of this Section shall
apply to a Participant who is vested in amounts attributable to Employer
contributions, Employee contributions, or both, upon death or at the time
of distribution.
8.04 Installment Distributions. This Section shall be interpreted and applied
-------------------------
in accordance with the regulations under Section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(a) In General. If a Participant's benefit may be distributed in
----------
accordance with Section 8.01(b), the amount to be distributed for each
calendar year for which a minimum distribution is required shall be at
least an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the life expectancy of the
Participant or Beneficiary or the joint life and last survivor expectancy
of the Participant and his Beneficiary, whichever is applicable. For
calendar years beginning before January 1, 1989, if a Participant's
Beneficiary is not his spouse, the method of distribution selected must
insure that at least 50 percent of the present value of the amount
available for distribution is paid within the life expectancy of the
Participant. For calendar years beginning after December 31, 1988 the
amount to be distributed for each calendar year shall not be less than an
amount equal to the quotient obtained by dividing the Participant's
interest in his Account by the lesser of (i) the applicable life
expectancy under Section 8.01(b), or (ii) if a Participant's Beneficiary
is not his spouse, the applicable divisor determined under Section
1.401(a)(9)-2, Q&A 4 of the Proposed Treasury Regulations, or any
successor regulations of similar import.
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Distributions after the death of the Participant shall be made using the
applicable life expectancy under (i) above, without regard to Section
1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section
8.08(b), occurs shall be made on or before the Participant's required
beginning date, as so determined. Minimum distributions for other calendar
years shall be made on or before the close of such calendar year.
(b) Additional Requirements for Distributions After Death of Participant.
--------------------------------------------------------------------
(1) Distribution beginning before Death. If the Participant dies before
-----------------------------------
distribution of his benefits has begun, distributions shall be made in
accordance with the provisions of this paragraph. Distributions under
Section 8.01(a) shall be completed by the close of the calendar year in
which the fifth anniversary of the death of the Participant occurs.
Distributions under Section 8.01(b) shall commence, if the Beneficiary
is not the Participant's spouse, not later than the close of the
calendar year immediately following the calendar year in which the death
of the Participant occurs. Distributions under Section 6.01(b) to a
Beneficiary who is the Participant's surviving spouse shall commence not
later than the close of the calendar year in which the Participant would
have attained age 70 1/2 or, if later, the close of the calendar year
immediately following the calendar year in which the death of the
Participant occurs. In the event such spouse dies prior to the date
distribution to him or her commences, he or she will be treated for
purposes of this subsection (other than the preceding sentence) as if he
or she were the Participant. If the Participant has not designated a
Beneficiary, or the Participant or Beneficiary has not effectively
selected a method of distribution, distribution of the Participant's
benefit shall be completed by the close of the calendar year in which
the fifth anniversary of the death of the Participant occurs.
Any amount paid to a child of the Participant will be treated as if it
had been paid to the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of majority.
For purposes of this subsection (b)(1), the life expectancy of a
Beneficiary who is the Participant's surviving spouse shall be
recalculated annually unless the Participant's spouse irrevocably elects
otherwise prior to the time distributions are required to begin. Life
expectancy shall be computed in accordance with the provisions of
subsection (a) above.
(2) Distribution beginning after Death. If the Participant dies after
----------------------------------
distribution of his benefits has begun, distributions to the
Participant's Beneficiary will be made at least as rapidly as under the
method of distribution being used as of the date of the Participant's
death.
For purposes of this Section 8.04(b), distribution of a Participant's
interest in his Account will be considered to begin as of the
Participant's required beginning date, as determined under Section
8.08(b). If distribution in the form of an annuity irrevocably commences
prior to such date, distribution will be considered to begin as of the
actual date distribution commences.
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(c) Life Expectancy. For purposes of this Section, life expectancy
---------------
shall be recalculated annually in the case of the Participant or a
Beneficiary who is the Participant's spouse unless the Participant or
Beneficiary irrevocably elects otherwise prior to the time distributions
are required to begin. If not recalculated in accordance with the
foregoing, life expectancy shall be calculated using the attained age of
the Participant or Beneficiary, whichever is applicable, as of such
individual's birth date in the first year for which a minimum distribution
is required reduced by one for each elapsed calendar year since the date
life expectancy was first calculated. For purposes of this Section, life
expectancy and joint life and last survivor expectancy shall be computed
by use of the expected return multiples in Table V and VI of section 1.72-
9 of the income tax Regulations.
A Participant's interest in his Account for purposes of this
Section 8.04 shall be determined as of the last valuation date in the
calendar year immediately preceding the calendar year for which a minimum
distribution is required, increased by the amount of any contributions
allocated to, and decreased by any distributions from, such Account after
the valuation date. Any distribution for the first year for which a
minimum distribution is required made after the close of such year shall
be treated as if made prior to the close of such year.
8.05. Immediate Distributions. If the Account distributable to a Participant
-----------------------
exceeds, or at the time of any prior distribution exceeded, $3,500, no
distribution will be made to the Participant before he reaches his Normal
Retirement Age (or age 62, if later), unless the written consent of the
Participant has been obtained. Such consent shall be made in writing within the
90-day period ending on the Participant's Annuity Starting Date. Within the
period beginning 90 days before the Participant's Annuity Starting Date and
ending 30 days before such Date, the Administrator will provide such Participant
with written notice comparable to the notice described in Section 8.03(b)
containing a general description of the material features and an explanation of
the relative values of the optional forms of benefit available under the Plan
and informing the Participant of his right to defer receipt of the distribution
until his Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the
Participant is subject to the provisions of Section 8.03(a), unless the
distribution will be made in the form of the applicable retirement annuity
contract described in Section 8.03(b). A spouse's consent to early
distribution, if required, must satisfy the requirements of Section 8.03(d).
Neither the consent of the Participant nor the Participant's spouse shall be
required to the extent that a distribution is required to satisfy Section 401
(a)(9) or Section 415 of the Code. In addition, upon termination of the Plan if
it does not offer an annuity option (purchased from a commercial provider) and
if the Employer or any Related Employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)) the Participant's Account will, without the
Participant's consent, be distributed to the Participant. However, if any
Related Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7) of the Code)
then the Participant's Account will be transferred, without the Participant's
consent, to the other plan if the Participant does not consent to an immediate
distribution.
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8.06. Determination of Method of Distribution. The Participant will
---------------------------------------
determine the method of distribution of benefits to himself and may determine
the method of distribution to his Beneficiary. Such determination will be made
prior to the time benefits become payable under the Plan. If the Participant
does not determine the method of distribution to his Beneficiary or if the
Participant permits his Beneficiary to override his determination, the
Beneficiary, in the event of the Participant's death, will determine the method
of distribution of benefits to himself as if he were the Participant. A
determination by the Beneficiary must be made no later than the close of the
calendar year in which distribution would be required to begin under Section
8.04(b) or, if earlier, the close of the calendar year in which the fifth
anniversary of the death of the Participant occurs.
8.07. Notice to Trustee. The Administrator will notify the Trustee in writing
-----------------
whenever any Participant or Beneficiary is entitled to receive benefits under
the Plan. The Administrator's notice shall indicate the form of benefits that
such Participant or Beneficiary shall receive and (in the case of distributions
to a Participant) the name of any designated Beneficiary or Beneficiaries.
8.08. Time of Distribution. In no event will distribution to a Participant
--------------------
be made later than the earlier of the dates described in (a) and (b) below:
(a) Absent the consent of the Participant (and his spouse, if appropriate),
the 60th day after the close of the Plan Year in which occurs the later of
the date on which the Participant attains age 65, the date on which the
Participant ceases to be employed by the Employer; or the 10th anniversary
of the year in which the Participant commenced participation in the Plan;
and
(b) April 1 of the calendar year first following the calendar year in which
the Participant attains age 70 1/2 or, in the case of a Participant who had
attained age 70 1/2 before January 1, 1988, the required beginning date
determined in accordance with (1) or (2) below:
(1) The required beginning date of a Participant who is not a 5-percent
owner is the first day of April of the calendar year following the
calendar year in which the later of retirement or attainment of age 70-
1/2 occurs.
(2) The required beginning date of a Participant who is a 5-percent
owner during any year beginning after December 31, 1979, is the first
day of April following the later of:
(i) the calendar year in which the participant attains age
70-1/2, or
(ii) the earlier of the calendar year with or within which ends the
plan year in which the participant becomes a 5-percent owner, or the
calendar year in which the participant retires.
Notwithstanding the foregoing, in the case of a Participant who attained age
70 1/2 during 1988 and who had not retired prior to January 1, 1989, the
required beginning date described in this paragraph shall be April 1, 1990.
Notwithstanding (a) above, the failure of a Participant (and spouse) to
consent to a distribution while a benefit is immediately distributable, within
the meaning of Section 8.05, shall be deemed to be
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an election to defer commencement of payment of any benefit sufficient to
satisfy (a) above.
Once distributions have begun to a 5-percent owner under (b) above, they
must continue to be distributed, even if the Participant ceases to be a 5-
percent owner in a subsequent year.
For purposes of (b) above, a Participant is treated as a 5-percent owner
if such participant is a 5-percent owner as defined in Section 416(i) of the
Code (determined in accordance with Section 416 but without regard to whether
the plan is top-heavy) at any time during the plan year ending with or within
the calendar year in which such owner attains age 66-1/2 or any subsequent plan
year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution rules
set forth in this Section.
8.09. Whereabouts of Participants and Beneficiaries. The Administrator
---------------------------------------------
will at all times be responsible for determining the whereabouts of each
Participant or Beneficiary who may be entitled to benefits under the Plan and
will at all times be responsible for instructing the Trustee in writing as to
the current address of each such Participant or Beneficiary. The Trustee will be
entitled to rely on the latest written statement received from the Administrator
as to such addresses. The Trustee will be under no duty to make any
distributions under the Plan unless and until it has received written
instructions from the Administrator satisfactory to the Trustee containing the
name and address of the distributee, the time when the distribution is to occur,
and the form which the distribution will take. Notwithstanding the foregoing, if
the Trustee attempts to make a distribution in accordance with the
Administrator's instructions but is unable to make such distribution because the
whereabouts of the distributee is unknown, the Trustee will notify the
Administrator of such situation and thereafter the Trustee will be under no duty
to make any further distributions to such distributee until it receives further
written instructions from the Administrator. If a benefit is forfeited because
the Administrator determines that the Participant or beneficiary cannot be
found, such benefit will be reinstated by the Sponsor if a claim is filed by the
Participant or Beneficiary with the Administrator and the Administrator confirms
the claim to the Sponsor.
Article 9. Top-Heavy Provisions.
--------------------
9.01 Application. If the Plan is or becomes a Top-Heavy Plan in any Plan Year
-----------
or is automatically deemed to be Top-Heavy in accordance with the Employer's
election in Section 1.12(a)(1) of the Adoption Agreement, the provisions of
this Article 9 shall supersede any conflicting provision in the Plan.
9.02 Definitions. For purposes of this Article 9, the following terms have
-----------
the meanings set forth below:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary of
------------
any such Employee) who at any time during the determination period was (i)
an officer of the Employer whose annual compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code, (ii) an
owner (or considered an owner under Section 318 of the Code) of one of the
ten largest interests in the Employer if such individual's annual
compensation exceeds the dollar limitation under Section 415(c)(1)(A) of
the Code, (iii) a 5-percent owner of the Employer, or (iv) a 1-percent
owner of the Employer who has annual compensation of more than $150,000.
For purposes of this
42
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paragraph, the determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The determination of
who is a Key Employee shall be made in accordance with Section 416(i)(1)
of the Code and the regulations thereunder. Annual compensation means
compensation as defined in Section 5.03(e)(2), but including amounts
contributed by the Employer pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Section 125, Section
402(a)(8), and Section 403(b) of the Code.
(b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following
--------------
conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan
is not part of any Required Aggregation Group or Permissive
Aggregation Group;
(2) the Plan is a part of a Required Aggregation Group but not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Required Aggregation Group exceeds 60 percent; or
(3) the Plan is a part of a Required Aggregation Group and a
Permissive Aggregation Group and the Top-Heavy Ratio for both Groups
exceeds 60 percent.
(c) Top-Heavy Ratio.
---------------
(1) With respect to this Plan, or with respect to any Required
Aggregation Group or Permissive Aggregation Group that consists solely
of defined contribution plans (including any simplified employee
pension plans) and the Employer has not maintained any defined benefit
plan which during the 5-year period ending on the determination date(s)
has or has had accrued benefits; the Top-Heavy Ratio is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees under the plans as of the Determination Date (including any
part of any account balance distributed in the 5-year period ending on
the Determination Date), and the denominator of which is the sum of
all account balances (including any part of any account balance
distributed in the 5-year period ending on the Determination Date) of
all participants under the plans as of the Determination Date. Both the
numerator and denominator of the Top-Heavy Ratio shall be increased, to
the extent required by Section 416 of the Code, to reflect any
contribution which is due but unpaid as of the Determination Date.
(2) With respect to any Required Aggregation Group or Permissive
Aggregation Group that includes one or more defined benefit plans
which, during the 5-year period ending on the Determination Date, has
covered or could cover a Participant in this Plan, the Top-Heavy Ratio
is a fraction, the numerator of which is the sum of the account
balances under the defined contribution plans for all Key Employees and
the present value of accrued benefits under the defined benefit plans
for all Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution plans for all
participants and the present value of accrued benefits under the
defined benefit plans for all participants. Both the numerator and
denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the 5-
year period ending on the Determination Date and any contribution due
but unpaid as of the Determination Date.
43
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(3) For purposes of (1) and (2) above, the value of Accounts and the
present value of accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Section
416 of the Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The Account and accrued benefits
of a Participant (i) who is not a Key Employee but who was a Key
Employee in a prior year, or (ii) who has not been credited with at
least one Hour of Service with the Employer at any time during the 5-
year period ending on the Determination Date, will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account, shall
be made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of Accounts and accrued benefits shall be calculated
with reference to the Determination Dates that fall within the same
calendar year.
For purposes of determining if the Plan, or any other plan included
in a Required Aggregation Group of which this Plan is a part, is a Top-
Heavy Plan, the accrued benefit in a defined benefit plan of an
Employee other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all
plans maintained by the Employer, or (b) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section 411(b)(1)(C)
of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group plus any
----------------------------
other qualified plans of the Employer or a Related Employer which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group.
--------------------------
(1) Each qualified plan of the Employer or Related Employer in which at
least one Key Employee participates, or has participated at any time
during the determination period (regardless of whether the plan has
terminated), and
(2) any other qualified plan of the Employer or Related Employer which
enables a plan described in (1) above to meet the requirements of Sections
401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent to the
------------------
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date.
--------------
(h) Present Value. Present value shall be based only on the interest
-------------
rate and mortality table specified in the Adoption Agreement.
9.03. Minimum Contribution.
--------------------
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(a) Except as otherwise provided in (b) and (c) below, the
Fixed/Discretionary Contributions made on behalf of any Participant who is
not a Key Employee shall not be less than the lesser of 3 percent (or such
other percent elected by the Employer in Section 1.12(c)) of such
Participant's Compensation or, in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy Section 401 of the Code,
the largest percentage of Employer contributions, as a percentage of the
first $200,000 of the Key Employee's Compensation, made on behalf of any Key
Employee for that year. If the Employer selected the Integrated Formula in
Section 1.05(a) (2), the minimum contribution shall be determined under
paragraph (e) of this Section 9.03. Further, the minimum contribution under
this Section 9.03 shall be made even though, under other Plan provisions, the
Participant would not otherwise be entitled to receive a contribution, or
would have received a lesser contribution for the year, because (i) the
Participant failed to complete 1,000 Hours of Service or any equivalent
service requirement provided in the Adoption Agreement; or (ii) the
Participant's Compensation was less than a stated amount.
(b) The provisions of (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a defined
benefit plan maintained by the Employer shall not be less than 5 percent of
such Participant's Compensation, unless the Employer has provided in Section
1.12(c) that the minimum contribution requirement will be met in the other
plan or plans of the Employer.
(d) The minimum contribution required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a) (3) (B) or 411(a) (3) (D) of the Code.
(e) If the Employer elected an Integrated Formula in Section 1.05(a) (2),
the allocation steps in Section 4.06(b) (2) shall be preceded by the
following steps:
(1) The Discretionary Employer Contributions will be allocated to each
eligible Participant (as determined under this Section 9.03) in the ratio
that the Participant's Compensation bears to all Participants'
Compensation, but not in excess of 3% (or such other percent elected by
the Employer in Section 1.12(c).
(2) Any Discretionary Employer Contributions remaining after (e) (1)
above will be allocated to each eligible Participant in the ratio that the
Participant's Excess Compensation for the Plan Year bears to the Excess
Compensation of all eligible Participants, but not in excess of 3% (or
such other percent elected by the Employer in Section 1.12(c)).
9.04. Adjustment to the Limitation on Contributions and Benefits. If this Plan
----------------------------------------------------------
is in Top-Heavy status, the number 100 shall be substituted for the number 125
in subsections (e) (3) and (e) (4) of Section 5.03. However, this substitution
shall not take effect with respect to this Plan in any Plan Year in which the
following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf of each
Participant who is not a Key Employee and who is a
45
8/1/93
participant in a defined benefit plan maintained by the Employer is not
less than 7 1/2 percent of such Participant's Compensation.
(b) The sum of the present value as of the Determination Date of (i) the
aggregate accounts of all Key Employees under all defined contribution plans
of the Employer and (ii) the cumulative accrued benefits of all Key Employees
under all defined benefit plans of the Employer does not exceed 90 percent of
the same amounts determined for all Participants under all plans of the
Employer that are Top-Heavy Plans, excluding Accounts and accrued benefits
for Employees who formerly were but are no longer Key Employees.
The substitutions of the number 100 for 125 shall not take effect in any
limitation Year with respect to any Participant for whom no benefits are
accrued or contributions made for such Year.
9.05. Minimum Vesting. For any Plan Year in which the Plan is a Top-Heavy
---------------
Plan and all Plan Years thereafter, the Top-Heavy vesting schedule elected in
Section 1.12(d) will automatically apply to the Plan. The Top-Heavy vesting
schedule applies to all benefits within the meaning of Section 411 (a) (7) of
the Code except those attributable to Employee Contributions or those already
subject to a vesting schedule which vests at least as rapidly in all cases as
the schedule elected in Section 1.12(d), including benefits accrued before the
Plan becomes a Top-Heavy Plan. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as a Top-
Heavy Plan changes for any Plan Year. However, this Section 9.05 does not apply
to the Account of any Employee who does not have an Hour of Service after the
Plan has initially become a Top-Heavy Plan and such Employee's Account
attributable to Employer Contributions will be determined without regard to this
Section 9.05.
Article 10. Amendment and Termination.
-------------------------
10.01 Amendment by Employer. The Employer reserves the authority, subject to
---------------------
the provisions of Article 1 and Section 10.03, to amend the Plan:
(a) Changing Elections Contained in the Adoption Agreement. By filing with
------------------------------------------------------
the Trustee an amended Adoption Agreement, executed by the Employer only, on
which said Employer has indicated a change or changes in provisions
previously elected by it. Such changes are to be effective on the effective
date of such amended Adoption Agreement except that retroactive changes to a
previous election or elections pursuant to the regulations issued under
Section 401 (a) (4) of the Code shall be permitted. Any such change
notwithstanding, no Participant's Account shall be reduced by such change
below the amount to which the Participant would have been entitled if he had
voluntarily left the employ of the Employer immediately prior to the date of
the change. The Employer may from time to time make any amendment to the Plan
that may be necessary to satisfy Sections 415 or 416 of the Code because of
the required aggregation of multiple plans by completing overriding Plan
language in the Adoption Agreement. The Employer may also add certain model
amendments published by the Internal Revenue Service which specifically
provide that their adoption will not cause the Plan to be treated as an
individually designed plan; or
(b) Other Changes. By amending any provision of the Plan for any reason other
-------------
than those specified in (a) above. However, upon making such amendment,
including a waiver of the minimum funding requirement under Section 412(d)
of the Code, the Employer may no longer participate in this prototype plan
arrangement and will be
46
8/1/93
deemed to have an individually designed plan. Following such amendment, the
Trustee may transfer the assets of the Trust to the trust forming part of
such newly adopted plan upon receipt of sufficient evidence (such as a
determination letter or opinion letter from the Internal Revenue Service or
an opinion of counsel satisfactory to the Trustee) that such trust will be a
qualified trust under the Code.
10.02. Amendment by Prototype Sponsor. The Prototype Sponsor may in its
------------------------------
discretion amend the Plan or the Adoption Agreement at any time, subject to the
provisions of Article 1 and Section 10.03, and provided that the Prototype
Sponsor mails a copy of such amendment to the Employer at its last known address
as shown on the books of the Prototype Sponsor.
10.03. Amendments Affecting Vested and/or Accrued Benefits.
---------------------------------------------------
(a) Except as permitted by Section 10.04, no amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a Participant's
Account or eliminating an optional form of benefit with respect to benefits
attributable to service before the amendment. Furthermore, if the vesting
schedule of the Plan is amended, the nonforfeitable interest of a Participant
in his Account, determined as of the later of the date the amendment is
adopted or the date it becomes effective, will not be less than the
Participant's nonforfeitable interest in his Account determined without
regard to such amendment.
(b) If the Plan's vesting schedule is amended, including any amendment
resulting from a change to or from Top-Heavy Plan status, or the Plan is
amended in any way that directly or indirectly affects the computation of a
Participant's nonforfeitable interest in his Account, each Participant with
at least three (3) Years of Service for Vesting with the Employer may elect,
within a reasonable period after the adoption of the amendment, to have the
nonforfeitable percentage of his Account computed under the Plan without
regard to such amendment. The Participant's election may be made within 60
days from the latest of (i) the date the amendment is adopted; (ii) the date
the amendment becomes effective; or (iii) the date the Participant is issued
written notice of the amendment by the Employer or the Administrator.
10.04. Retroactive Amendments. An amendment made by the sponsor in
----------------------
accordance with Section 10.02 may be made effective on a date prior to the first
day of the Plan Year in which it is adopted if such amendment is necessary or
appropriate to enable the Plan and Trust to satisfy the applicable requirements
of the Code or to conform the Plan to any change in federal law, or to any
regulations or ruling thereunder. Any retroactive amendment by the Employer
shall be subject to the provisions of Section 10.01.
10.05. Termination. The Employer has adopted the Plan with the intention and
-----------
expectation that contributions will be continued indefinitely. However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate the
Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.
10.06. Distribution upon Termination of the Plan. Upon termination or partial
-----------------------------------------
termination of the Plan or complete discontinuance of contributions thereunder,
each Participant (including a terminated Participant with respect to amounts not
previously forfeited by him) who is affected by such termination or partial
termination or discontinuance
47
8/1/93
will have a fully vested interest in his Account, and, subject to Section 4.05
and Article 8, the Trustee will distribute to each Participant or other person
entitled to distribution the balance of the Participant's Account in a single
lump sum payment. In the absence of such instructions, the Trustee will notify
the Administrator of such situation and the Trustee will be under no duty to
make any distributions under the Plan until it receives written instructions
from the Administrator. Upon the completion of such distributions, the Trust
will terminate, the Trustee will be relieved from all liability under the Trust,
and no Participant or other person will have any claims thereunder, except as
required by applicable law.
10.07. Merger or Consolidation of Plan; Transfer of Plan Assets. In case of
--------------------------------------------------------
any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that each
Participant would, if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
Article 11. Amendment and Continuation of Predecessor Plan; Transfer of Funds
-----------------------------------------------------------------
to or from Other Qualified Plans.
---------- ---------------------
11.01. Amendment and Continuation of Predecessor Plan. In the event
----------------------------------------------
the Employer has previously established a plan (the "predecessor plan") which is
a defined contribution plan under the Code and which on the date of adoption of
the Plan meets the applicable requirements of section 401(a) of the Code, the
Employer may, in accordance with the provisions of the predecessor plan, amend
and continue the predecessor plan in the form of the Plan and become the
Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor plan immediately prior
to the effective date of such amendment and continuation will become a
Participant or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the Adoption
Agreement if such election would reduce the benefits of a Participant under
the Plan to less than the benefits to which he would have been entitled if
he voluntarily separated from the service of the Employer immediately prior
to such amendment and continuation;
(c) No amendment to the Plan shall decrease a Participant's accrued benefit
or eliminate an optional form of benefit and if the amendment of the
predecessor plan in the form of the Plan results in a change in the method
of crediting service for vesting purposes between the general method set
forth in Section 2530.200b-2 of the Department of Labor Regulations and the
elapsed time method in Section 2.01(a)(33) of the Plan, each Participant
with respect to whom the method of crediting vesting service is changed
shall be treated in the manner set forth by the provisions of Section
1.410(a)-7(f)(1) of the Treasury Regulations which are incorporated herein
by reference.
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent the
amounts properly attributable to (i) contributions by the Participant and
(ii) contributions by the Employer and
48
8/1/93
forfeitures will constitute the opening balance of his Account or Accounts
under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor plan will continue to be
paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement annuity in
effect after August 23, 1984, under the predecessor plan immediately before
such amendment and continuation will be deemed a valid election and waiver
of Beneficiary under Section 8.04 if such designation satisfies the
requirements of Section 8.04(d), unless and until the Participant revokes
such election and waiver under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of the
predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the
Trustee as soon as reasonably practicable pursuant to Article 6. The
Employer agrees to assist the Trustee in any way requested by the Trustee in
order to facilitate the transfer of assets from the predecessor trust to the
Trust Fund.
11.02. Transfer of Funds from an Existing Plan. The Employer may from time to
---------------------------------------
time direct the Trustee, in accordance with such rules as the Trustee may
establish, to accept cash, allowable Fund Shares or participant loan promissory
notes transferred for the benefit of Participants from a trust forming part of
another qualified plan under the Code, provided such plan is a defined
contribution plan. Such transferred assets will become assets of the Trust as
of the date they are received by the Trustee. Such transferred assets will be
credited to Participants' Account in accordance with their respective interests
immediately upon receipt by the Trustee. A Participant's interest under the
Plan in transferred assets which were fully vested and nonforfeitable under the
transferring plan will be fully vested and nonforfeitable at all times. Such
transferred assets will be invested by the Trustee in accordance with the
provisions of paragraph (g) of Section 11.01 as if such assets were transferred
from a predecessor plan. No transfer of assets in accordance with this Section
may cause a loss of an accrued or optional form of benefit protected by Section
411(d)(6) of the Code.
11.03. Acceptance of Assets by Trustee. The Trustee will not accept assets
-------------------------------
which are not either in a medium proper for investment under the Plan, as set
forth in Section 1.14(b), or in cash. Such assets shall be accompanied by
written instructions showing separately the respective contributions by the
prior employer and by the Employee, and identifying the assets attributable to
such contributions. The Trustee shall establish such accounts as may be
necessary or appropriate to reflect such contributions under the Plan. The
Trustee shall hold such assets for investment in accordance with the provisions
of Article 6, and shall in accordance with the written instructions of the
Employer make appropriate credits to the Accounts of the Participants for whose
benefit assets have been transferred.
11.04. Transfer of Assets from Trust. The Employer may direct the
-----------------------------
Trustee to transfer all or a specified portion of the Trust assets to any other
plan or plans maintained by the Employer or the employer or employers of a
former Participant or Participants, provided that the Trustee has received
evidence satisfactory to it that such other plan meets all applicable
requirements of the Code. The assets so transferred shall be accompanied by
written instructions from the Employer naming the persons for whose benefit such
assets have been
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transferred, showing separately the respective contributions by the Employer and
by each Participant, if any, and identifying the assets attributable to the
various contributions. The Trustee shall have no further liabilities with
respect to assets so transferred.
Article 12. Miscellaneous.
-------------
12.01. Communication to Participants. The Plan will be communicated to all
-----------------------------
Participants by the Employer promptly after the Plan is adopted.
12.02. Limitation of Rights. Neither the establishment of the Plan and the
--------------------
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against the Employer, Administrator or
Trustee, except as provided herein; and in no event will the terms of employment
or service of any Participant be modified or in any way affected hereby. It is a
condition of the Plan, and each Participant expressly agrees by his
participation herein, that each Participant will look solely to the assets held
in the Trust for the payment of any benefit to which he is entitled under the
Plan.
12.03. Nonalienability of Benefits and Qualified Domestic Relations Orders.
-------------------------------------------------------------------
The benefits provided hereunder will not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind, either voluntarily or
involuntarily, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law. The
preceding sentence shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined by the Plan
Administrator to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985. The Administrator must establish reasonable procedures to determine the
qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Administrator will promptly notify the Participant and any
alternate payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the order. Within
a reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must notify
the Participant and each alternate payee, in writing, of its determination. The
Administrator must provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period the
Administrator is making its determination of the qualified status of the
domestic relations order, the Administrator must make a separate accounting of
the amounts payable. If the Administrator determines the order is a qualified
domestic relations order within 18 months of the date amounts first are payable
following receipt of the order, the Administrator will direct the Trustee to
distribute the payable amounts in accordance with the order. If the
Administrator does not make his determination of the qualified status of the
order within the 18 month determination period, the Administrator will direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and will apply the order prospectively if
the Administrator later determines the order is a qualified domestic relations
order.
A domestic relations order will not fail to be deemed a qualified domestic
relations order merely because it requires the distribution or segregation of
all or part of a Participant's Account with respect to an
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alternate payee prior to the Participant's earliest retirement age (as defined
in Section 414(p) of the Code) under the Plan. A distribution to an alternate
payee prior to the Participant's attainment of the earliest retirement age is
available only if: (1) the other specifies distribution at that time; and (2)
if the present value of the alternate payee's benefits under the Plan exceeds
$3,500, and the order requires, the alternate payee consents to any
distribution occurring prior to the Participant's attainment of earliest
retirement age.
12.04. Facility of Payment. In the event the Administrator determines, on the
-------------------
basis of medical reports or other evidence satisfactory to the Administrator,
that the recipient of any benefit payments under the Plan is incapable of
handling his affairs by reason of minority, illness, infirmity or other
incapacity, the Administrator may direct the Trustee to disburse such payments
to a person or institution designated by a court which has jurisdiction over
such recipient or a person or institution otherwise having the legal authority
under State law for the care and control of such recipient. The receipt by such
person or institution of any such payments shall be complete acquittance
therefore, and any such payment to the extent thereof, shall discharge the
liability of the Trust for the payment of benefits hereunder to such recipient.
12.05. Information between Employer and Trustee. The Employer agrees
----------------------------------------
to furnish the Trustee , and the Trustee agrees to furnish the Employer with
such information relating to the Plan and Trust as may be required by the other
in order to carry out their respective duties hereunder, including without
limitation information required under the Code and any regulations issued or
forms adopted by the Treasury Department thereunder or under the provisions of
ERISA and any regulations issued or forms adopted by the Labor Department
thereunder.
12.06. Effect of Failure to Qualify under Code. Notwithstanding any other
---------------------------------------
provision contained herein, if the Employer fails to obtain or retain approval
of the Plan by the Internal Revenue Service as a qualified Plan under the Code,
the Employer may no longer participate in this prototype Plan arrangement and
will be deemed to have an individually designed plan.
12.07. Notices. Any notice or other communication in connection with this Plan
-------
shall be deemed delivered in writing if addressed as provided below and if
either actually delivered at said address or, in the case of a letter, three
business days shall have elapsed after the same shall have been deposited in the
United States mails, first-class postage prepaid and registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth in the
Adoption Agreement, to the attention of the person specified to receive notice
in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the Adoption
Agreement;
or, in each case at such other address as the addressee shall have specified by
written notice delivered in accordance with the foregoing to the addressor's
then effective notice address.
12.08. Governing Law. The Plan and the accompanying Adoption Agreement
-------------
will be construed, administered and enforced according to ERISA, and to the
extent not preempted thereby, the laws of the Commonwealth of Massachusetts.
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Article 13. Plan Administration.
-------------------
13.01. Powers and responsibilities of the Administrator. The Administrator has
------------------------------------------------
the full power and the full responsibility to administer the Plan in all of its
details, subject, however, to the requirements of ERISA. The Administrator's
powers and responsibilities include, but are not limited to, the following:
(a) To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to be
final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will be
paid;
(g) To authorize the payment of benefits and provide for the distribution
of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as
may be required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of ERISA.
13.02. Nondiscriminatory Exercise of Authority. Whenever, in the
---------------------------------------
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.
13.03. Claims and Review Procedures.
----------------------------
(a) Claims Procedure. If any person believes he is being denied any
----------------
rights or benefits under the Plan, such person may file a claim in writing
with the Administrator. If any such claim is wholly or partially denied,
the Administrator will notify such person of its decision in writing. Such
notification will contain (i) specific reasons for the denial, (ii)
specific reference to pertinent Plan provisions, (iii) a description of any
additional material or information necessary for such person to perfect
such claim and an explanation of why such material or information is
necessary, and (iv) information as to the steps to be taken if the person
wishes to submit a request for review. Such notification will be given
52
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within 90 days after the claim is received by the Administrator (or within
180 days, if special circumstances require an extension of time for
processing the claim, and if written notice of such extension and
circumstances is given to such person within the initial 90-day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and such person may
request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a person
----------------
receives a written notice of a denied claim (or, if applicable, within 60
days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (i) file a written
request with the Administrator for a review of his denied claim and of
pertinent documents and (ii) submit written issues and comments to the
Administrator. The Administrator will notify such person of its decision in
writing. Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the
decision as well as specific references to pertinent Plan provisions. The
decision on review will be made within 60 days after the request for review
is received by the Administrator (or within 120 days, if special
circumstances require an extension of time for processing the request, such
as an election by the Administrator to hold a hearing, and if written
notice of such extension and circumstances is given to such person within
the initial 60-day period). If the decision on review is not made within
such period, the claim will be considered denied.
13.04. Named Fiduciary. The Administrator is a "named fiduciary" for purposes
---------------
of Section 402(a)(1) of ERISA and has the powers and responsibilities with
respect to the management and operation of the Plan described herein.
13.05. Costs of Administration. Unless some or all are paid by the Employer,
-----------------------
all reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in
administering the Plan and Trust will be paid first from the forfeitures (if
any) resulting under Section 7.07, then from the remaining Trust Fund. All such
costs and expenses paid from the Trust Fund will, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all
Participants on a prorata basis or in such other reasonable manner as may be
directed by the Employer.
ARTICLE 14. Trust Agreement.
---------------
14.01. Acceptance of Trust Responsibilities. By executing the Adoption
------------------------------------
Agreement, the Employer establishes a trust to hold the assets of the plan. By
executing the Adoption Agreement, the Trustee agrees to accept the rights,
duties and responsibilities set forth in this Article 14.
14.02. Establishment of Trust Fund. A trust is hereby established under the
---------------------------
Plan and the Trustee will open and maintain a Trust account for the Plan and, as
part thereof, Participants' Accounts for such individuals as the Employer shall
from time to time give written notice to the Trustee are Participants in the
Plan. The Trustee will accept and hold in the Trust Fund such contributions on
behalf of Participants as it may receive from time to time from the Employer.
The Trust Fund shall be fully invested and reinvested in accordance with the
applicable provisions of the Plan in Fund Shares or as otherwise provided in
Section 14.10.
14.03. Exclusive Benefit. The Trustee shall hold the assets of the Trust Fund
-----------------
for the exclusive purpose of providing benefits to
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Participants and Beneficiaries and defraying the reasonable expenses of
administering the Plan. No assets of the Plan shall revert to the Employer
except as specifically permitted by the terms of the Plan.
14.04. Powers of Trustee. The Trustee shall have no discretion or authority
-----------------
with respect to the investment of the Trust Fund but shall act solely as a
directed trustee of the funds contributed to it. In addition to and not in
limitation of such powers as the Trustee has by law or under any other
provisions of the Plan, the Trustee will have the following powers, each of
which the Trustee exercises solely as directed Trustee in accordance with the
written direction of the Employer except to the extent a Plan asset is subject
to Participant direction of investment and provided that no such power shall be
exercised in any manner inconsistent with the provisions of ERISA:
(a) to deal with all or any part of the Trust Fund and to invest all or a
part of the Trust Fund in investments available under the Plan, without regard
to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or advisable,
without liability for interest thereon, for the administration of the Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or
any part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights on behalf of
the Trust, and to defend claims asserted against it or the Trust, provided that
the Trustee is indemnified to its satisfaction against liability and expenses;
(e) to employ such agents and counsel as may be reasonably necessary in
collecting managing, administering, investing, distributing and protecting the
Trust Fund or the assets thereof and to pay them reasonable compensation;
(f) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with Section
8.02;
(i) to hold securities unregistered, or to register them in its own name
or in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with stock
clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments
that it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect to
all or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates of
the Trustee may act as its agent in the performance of
54
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ministerial, nonfiduciary duties under the Trust. The expenses and compensation
of such agent shall be paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any
claim filed against the Plan or Trust or with regard to any related matter, or
of any claim filed by the Trustee on behalf of the Plan or Trust or with regard
to any related matter.
14.05. Accounts. The Trustee will keep full accounts of all receipts and
--------
disbursements and other transactions hereunder. Within 60 days after the close
of each Plan Year, within 60 days after termination of the Trust, and at such
other times as may be appropriate, the Trustee will determine the then net fair
market value of the Trust Fund as of the close of the Plan Year, as of the
termination of the Trust, or as of such other time, whichever is applicable, and
will render to the Employer and Administrator an account of its administration
of the Trust during the period since the last such accounting, including all
allocations made by it during such period.
14.06. Approving of Accounts. To the extent permitted by law, the written
---------------------
approval of any account by the Employer or Administrator will be final and
binding, as to all matters and transactions stated or shown therein, upon the
Employer, Administrator, Participants and all persons who then are or thereafter
become interested in the Trust. The failure of the Employer or Administrator to
notify the Trustee within six (6) months after the receipt of any account of its
objection to the account will, to the extent permitted by law, be the
equivalent of written approval. If the Employer or Administrator files any
objections within such six (6) month period with respect to any matters or
transactions stated or shown in the account, and the Employer or Administrator
and the Trustee cannot amicably settle the question raised by such objections,
the Trustee will have the right to have such questions settled by judicial
proceedings. Nothing herein contained will be construed so as to deprive the
Trustee of the right to have judicial settlement of its accounts. In any
proceeding for a judicial settlement of any account or for instructions, the
only necessary parties will be the Trustee, the Employer and the Administrator.
14.07. Distribution from Trust Fund. The Trustee shall make such distribution
----------------------------
from the Trust Fund as the Employer or Administrator may in writing direct, as
provided by the terms of the Plan, upon certification by the Employer or
Administrator that the same is for the exclusive benefit of Participants or
their Beneficiaries, or for the payment of expenses of administering the Plan.
14.08. Transfer of Amounts from Qualified Plan. If the Plan provides that
---------------------------------------
amounts may be transferred to the Plan from another qualified plan, or trust
under Section 401(a) of the Code, such transfer shall be made in accordance with
the provisions of the Plan and with such rules as may be established by the
Trustee. The Trustee will only accept assets which are in a medium proper for
investment under this Agreement or in cash. Such amounts shall be accompanied by
written instructions showing separately the respective contributions by the
prior employer and the transferring Employee, and identifying the assets
attributable to such contributions. The Trustee shall hold such assets for
investment in accordance with the provisions of this Agreement.
14.09. Transfer of Assets from Trust. Subject to the provisions of the Plan,
-----------------------------
the Employer may direct the Trustee to transfer all or a specified portion of
the Trust assets to any other plan or plans maintained by the Employer or the
employer or employers of a former Participant or Participants, provided that the
Trustee has received evidence satisfactory to it that such other plan meets all
applicable requirements of the Code. The assets so transferred shall be
55
8/1/93
accompanied by written instructions from the Employer naming the persons for
whose benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any, and
identifying the assets attributable to the various contributions. The Trustee
shall have no further liabilities with respect to assets so transferred.
14.10. Separate Trust or Fund for Existing Plan Assets. With the consent of
-----------------------------------------------
the Trustee, the Employer may maintain a trust or fund (including a group
annuity contract) under this prototype plan document separate from the Trust
Fund for Plan assets purchased prior to the adoption of this prototype plan
document which are not Fidelity Funds listed in Section 1.14(b). The Trustee
shall have no authority and no responsibility for the Plan assets held in such
separate trust or fund. The duties and responsibilities of the trustee of a
separate trust shall be provided by a separate trust agreement, between the
Employer and the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate of the
Trustee may agree in writing to provide ministerial recordkeeping services for
guaranteed investment contracts held in the separate trust or fund. The
guaranteed investment contract(s) shall be valued as directed by the Employer or
the Trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee") will
be the owner of any insurance contract purchased prior to the adoption of this
prototype plan document. The insurance contract(s) must provide that proceeds
will be payable to the trustee, however the trustee shall be required to pay
over all proceeds of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this plan. A
Participant's spouse will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Article 8. Under no circumstances shall the trust retain any part of the
proceeds. In the event of any conflict between the terms of this plan and the
terms of any insurance contract purchased hereunder, the plan provisions shall
control.
Any life insurance contracts held in the Trust Fund or in the separate trust
are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance provisions,
ordinary life insurance contracts are contracts with both nondecreasing
death benefits and nonincreasing premiums. If such contracts are held, less
than 1/2 of the aggregate employer contributions allocated to any
Participant will be used to pay the premiums attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate employer
contributions allocated to any participant will be used to pay the premiums
on term life insurance contracts, universal life insurance contracts, and
all other life insurance contracts which are not ordinary life.
(c) Combination The sum of 1/2 of the ordinary life insurance premiums and
all other life insurance premiums will not exceed 1/4 of the aggregate
employer contributions allocated to any Participant.
14.11. Voting; Delivery of Information. The Trustee shall deliver, or cause to
-------------------------------
be executed and delivered, to the Employer or Plan Administrator all notices,
prospectuses, financial statements, proxies and proxy soliciting materials
received by the Trustee relating to securities held by the Trust or, if
applicable, deliver these materials
56
8/1/93
to the appropriate Participant or the Beneficiary of a deceased Participant. The
Trustee shall not vote any securities held by the Trust except in accordance
with the written instructions of the Employer, Participant or the Beneficiary of
the Participant, if the Participant is deceased; provided, however, that the
Trustee may, in the absence of instructions, vote "present" for the sole purpose
of allowing such shares to be counted for establishment of a quorum at a
shareholders' meeting. The Trustee shall have no duty to solicit instructions
from Participants, the Beneficiary or the Employer.
14.12. Compensation and Expenses of Trustee. The Trustee's fee for performing
------------------------------------
its duties hereunder will be such reasonable amounts as the Trustee may from
time to time specify by written agreement with the Employer. Such fee, any
taxes of any kind which may be levied or assessed upon or in respect of the
Trust Fund and any and all expenses, including without limitation legal fees and
expenses of administrative and judicial proceedings, reasonably incurred by the
Trustee in connection with its duties and responsibilities hereunder will,
unless some or all have been paid by said Employer, be paid first from
forfeitures resulting under Section 7.07, then from the remaining Trust Fund and
will, unless allocable to the Accounts of particular Participants, be charged
against the respective Accounts of all Participants, in such reasonable manner
as the Trustee may determine.
14.13. Reliance by Trustee on Other Persons. The Trustee may rely upon and act
------------------------------------
upon any writing from any person authorized by the Employer or Administrator to
give instructions concerning the Plan and may conclusively rely upon and be
protected in acting upon any written order from the Employer or Administrator or
upon any other notice, request, consent, certificate, or other instructions or
paper reasonably believed by it to have been executed by a duly authorized
person, so long as it acts in good faith in taking or omitting to take any such
action. The Trustee need not inquire as to the basis in fact of any statement
in writing received from the Employer or Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Administrator as to any person or persons
authorized to act for the Employer or Administrator hereunder and to sign on
behalf of the Employer or Administrator any directions or instructions, until it
receives from the Employer or Administrator written notice that such authority
has been revoked.
Notwithstanding any provision contained herein, the Trustee will be under
no duty to take any action with respect to any Participant's Account (other than
as specified herein) unless and until the Employer or Administrator furnishes
the Trustee with written instructions on a form acceptable to the Trustee, and
the Trustee agrees thereto in writing. The Trustee will not be liable for any
action taken pursuant to the Employer's or Administrator's written instructions
(nor for the collection of contributions under the Plan, nor the purpose or
propriety of any distribution made thereunder).
14.14. Indemnification by Employer. The Employer shall indemnify and save
---------------------------
harmless the Trustee from and against any and all liability to which the Trustee
may be subjected by reason of any act or conduct (except willful misconduct or
negligence) in its capacity as Trustee, including all expenses reasonably
incurred in its defense.
14.15. Consultation by Trustee with Counsel. The Trustee may consult with
------------------------------------
legal counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
will, to the extent permitted by law, be full and complete protection in respect
of any action taken or omitted by the
57
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Trustee hereunder in good faith and in accordance with the opinion of such
counsel.
14.16. Persons Dealing with the Trustee. No person dealing with the Trustee
--------------------------------
will be bound to see to the application of any money or property paid or
delivered to the Trustee or to inquire into the validity or propriety of any
transactions.
14.17. Resignation or Removal of Trustee. The Trustee may resign at any time
---------------------------------
by written notice to the Employer, which resignation shall be effective 60 days
after delivery to the Employer. The Trustee may be removed by the Employer by
written notice to the Trustee, which removal shall be effective 60 days after
delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a
successor trustee. Any such successor trustee will, upon written acceptance of
his appointment, become vested with the estate, rights, powers, discretion,
duties and obligations of the Trustee hereunder as if he had been originally
named as Trustee in this Agreement.
Upon resignation or removal of the Trustee, the Employer will no longer
participate in this prototype plan and will be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer the
assets of the Trust to the successor trustee upon receipt of sufficient evidence
(such as a determination letter or opinion letter from the Internal Revenue
Service or an opinion of counsel satisfactory to the Trustee) that such trust
will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery to
the Trustee of written notice that the Employer has appointed such successor
trustee, and written acceptance of such appointment by the successor trustee.
The Trustee may, upon transfer and delivery of the Trust Fund to a successor
trustee, reserve such reasonable amount as it shall deem necessary to provide
for its fees, compensation, costs and expenses, or for the payment of any other
liabilities chargeable against the Trust Fund for which it may be liable. The
Trustee shall not be liable for the acts or omissions of any successor trustee.
14.18. Fiscal Year of the Trust. The fiscal year of the Trust will coincide
------------------------
with the Plan Year.
14.19. Discharge of Duties by Fiduciaries. The Trustee and the Employer and
----------------------------------
any other fiduciary shall discharge their duties under the Plan and this Trust
Agreement solely in the interests of Participants and their Beneficiaries in
accordance with the requirements of ERISA.
14.20. Amendment. In accordance with provisions of the Plan, and subject to
---------
the limitations set forth therein, this Trust Agreement may be amended by an
instrument in writing signed by the Employer and the Trustee. No amendment to
this Trust Agreement shall divert any part of the Trust Fund to any purpose
other than as provided in Section 2 hereof.
14.21. Plan Termination. Upon termination or partial termination of the Plan
----------------
or complete discontinuance of contributions thereunder, the Trustee will make
distributions to the Participants or other persons entitled to distributions as
the Employer or Administrator directs in accordance with the provisions of the
Plan. In the absence of such instructions and unless the Plan otherwise
provides, the Trustee will notify the Employer or Administrator of such
situation and the Trustee
58
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will be under no duty to make any distributions under the Plan until it receives
written instructions from the Employer or Administrator. Upon the completion
of such distributions, the Trust will terminate, the Trustee will be relieved
from all liability under the Trust, and no Participant or other person will have
any claims thereunder, except as required by applicable law.
14.22. Permitted Reversion of Funds to Employer. If it is determined by the
----------------------------------------
Internal Revenue Service that the Plan does not initially qualify under Section
401 of the Code, all assets then held under the Plan will be returned by the
Trustee, as directed by the Administrator, to the Employer, but only if the
application for determination is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan was adopted or such
later date as may be prescribed by regulations. Such distribution will be made
within one year after the date the initial qualification is denied. Upon such
distribution the Plan will be considered to be rescinded and to be of no force
or effect.
Contributions under Plan are conditioned upon their deductibility under
Section 404 of the Code. In the event the deduction of a contribution made by
the Employer is disallowed under Section 404 of the Code, such contribution (to
the extent disallowed) must be returned to the Employer within one year of the
disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact must be
returned to the Employer within one year of the contribution.
14.23. Governing Law. This Trust Agreement will be construed, administered and
-------------
enforced according to ERISA and, to the extent not preempted thereby, the laws
of the Commonwealth of Massachusetts.
59
