PROFIT SHARING PLAN AND TRUST
BY AND BETWEEN:
PENNSYLVANIA SAVINGS BANK
AND
XXXXXXX X. XXXX, TRUSTEE
AND
XXXXXXX DI SANDRO, TRUSTEE
INDEX
Page
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ARTICLE ONE
Purpose, Creation and Name ................................... I-1
ARTICLE TWO
Definitions of Terms ......................................... II-1
ARTICLE THREE
Eligibility .................................................. III-1
ARTICLE FOUR
Contributions and Management of Funds ........................ IV-1
ARTICLE FIVE
Retirement Benefits .......................................... V-1
ARTICLE SIX
Disability Benefits .......................................... VI-1
ARTICLE SEVEN
Death Benefits ............................................... VII-1
ARTICLE EIGHT
Separation Benefits .......................................... VIII-1
ARTICLE NINE
Payment of Benefits .......................................... IX-1
ARTICLE TEN
Spendthrift Clause ........................................... X-1
ARTICLE ELEVEN
Insurance Contracts .......................................... XI-1
ARTICLE TWELVE
Right to Alter, Amend or Terminate Trust ..................... XII-1
ARTICLE THIRTEEN
Loans ........................................................ XIII-1
Page
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ARTICLE FOURTEEN
Trustee ...................................................... XIV-1
ARTICLE FIFTEEN
Insurer ...................................................... XV-1
ARTICLE SIXTEEN
No Reversion to Company ...................................... XVI-1
ARTICLE SEVENTEEN
Direct Transfers and Rollovers ............................... XVII-1
ARTICLE EIGHTEEN
Determination of Top-Heavy Status ............................ XVIII-1
ARTICLE NINETEEN
Miscellaneous Provisions ..................................... XIX-1
ARTICLE ONE
PURPOSE, CREATION AND NAME
1.1 WHEREAS, the Employer established a Profit Sharing Plan and Trust
effective January 1, 1992 (hereinafter called the "Original Effective Date")
known as the Pennsylvania Savings Bank Profit Sharing Plan (herein referred to
as the "Plan") in recognition of the contribution made to its successful
operation by its employees and for the exclusive benefit of its eligible
employees; and
NOW, THEREFORE, effective December 30, 1992, the Employer and the Trustee,
hereby adopt the Plan and Trust:
1.2 THIS AGREEMENT, hereby made and entered into this _____ day of
______________ 19____, by and between PENNSYLVANIA SAVINGS BANK (herein referred
to as the "Employer") and XXXXXXX X. XXXX and XXXXXXX DI XXXXXX (herein referred
to as the "Trustees").
I-1
ARTICLE TWO
DEFINITION OF TERMS
2.1 The following words and terms as used in this Plan and Trust shall have
the meaning set forth below, unless a different meaning is clearly required by
the context.
(a) Adjustment Factor: The cost of living adjustment factor prescribed by
the Secretary of the Treasury under Section 415(d) of the Code for
years beginning after December 31, 1987, as applied to such items and
in such manner as the Secretary shall provide.
(b) Affiliated Employer: The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as
defined in Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m) of the Code)
which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to regulations under Section
414(o) of the Code.
(c) Age: A person's age at his last birthday.
(d) Aggregate Account: With respect to each Participant, the value of all
accounts maintained on behalf of a Participant, whether attributable
to Employer or Employee contributions, subject to the provisions of
Article XVIII.
(e) Agreement: This instrument with all amendments and supplements
thereto.
(f) Anniversary Date: First day of Plan Year.
(g) Annual Addition: The amount allocated to a Participant's account
during the Limitation year that constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
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(iv) Amounts described in Sections 415(1)(1) and 419(A)(d)(2) of the
Code.
(h) Beneficiary: The person or persons to whom the share of a deceased
Participant's total account is payable, as provided in the Plan. For
purposes of determining whether the Plan is a Top-Heavy Plan, a
Beneficiary of a deceased Participant shall be considered a Key
Employee or a Non-Key Employee, as the case may be.
(i) Break in Service: For the purposes of eligibility, any Eligibility
Computation Period in which an Employee has no more than 500 Hours of
Service. For purposes of vesting, any Vesting Computation Period in
which an Employee has no more than 500 Hours of Service.
(j) Cash Value: A Cash Value of Contract providing specific allocations of
amounts to individual participants.
(k) Code: The Internal Revenue Code of 1986 and amendments thereto.
(1) Company: PENNSYLVANIA SAVINGS BANK
(m) Compensation: Compensation actually paid to or for the benefit of an
Employee during the Plan Year, inclusive of overtime pay, commissions,
and bonuses, except that in the event Company is an accrual basis
taxpayer, Company may by written resolution elect to use accrued
compensation in lieu of paid compensation. Compensation shall be such
remuneration that is subject to tax under Section 3101(a) of the
Internal Revenue Code, without the dollar limitation of Section
3121(a). However, Compensation for any Self-Employed Individual shall
be equal to his earned income; that is, the net earnings from
self-employment as defined in Code Section 401(c)(2), (reduced by
Company's deductible contribution made on behalf of such individual
for such year). Effective for Plan Years beginning after 12/31/88 this
Plan shall not take into consideration a Participant's Compensation to
the extent it exceeds $200,000.00, as indexed under Code Section
415(d).
In applying this limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of
Code Section 414(q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the
year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's
spouse and any lineal
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descendants who have not attained age nineteen (19) before the close
of the year.
Notwithstanding the above, for any Top-Heavy Plan Year, Compensation
in excess of $200,000 (or such other amount as the Secretary of the
Treasury may designate) shall be disregarded, except for purposes of
determining maximum permissible voluntary contributions and the Annual
Additions resulting therefrom, and for purposes of satisfying the
minimum contribution or benefit provisions regarding Top-Heavy Plans,
compensation is determined in accordance with the definition of
Compensation contained in Article IV with respect to limits on maximum
contributions or benefits.
(n) Contract: Any individual or group annuity policy or life insurance
policy for and/or on any Plan Participant, or any unallocated
investment contract issued by an insurer.
(o) Contribution: Integrated:
Base Percent: 5.7%
Integration Percent: 5.7 % of the Participant's Excess Compensation.
Integration Level: Social Security Wage Base
The Integration Level shall be equal to the taxable wage base or such
lesser amount elected by the Employer. The taxable wage base is the
contribution and benefit base in effect under section 230 of the
Social Security Act at the beginning of the Plan Year.
Maximum Contribution: In any Top-Heavy Plan Year, a Participant
otherwise eligible to share in Contributions or Forfeitures, but who
is paid for fewer than 1,000 Hours of Service, shall be limited to a
maximum allocation of Contributions and Forfeitures of 3% Percent of
Compensation.
If a Participant also participates in another defined contribution
plan maintained by Company, then the Maximum Contribution referred to
above shall be reduced by any allocation made on his behalf to said
other defined contribution plan.
(p) Defined benefit fraction: A fraction, the numerator of which is the
sum of the Participant's projected annual benefit under all the
defined benefit plans (whether or not terminated) maintained by the
Employer, and the
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denominator of which is the lesser of 125 percent of the dollar
limitation determined for the limitation year under sections 415(b)
and (d) of the Code or 140 percent of the highest average
compensation, including any adjustments under section 415(b) of the
Code.
Notwithstanding the above, if the Participant was a Participant as of
the first day of the first limitation year beginning after December
31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of
this fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had accrued as
of the close of the last limitation year beginning before January 1,
1987, disregarding any changes in the terms and conditions of the Plan
after May 5, 1986. The preceding sentence applies only if the defined
benefit plans individually and in aggregate satisfied the requirement
s of section 415 for all limitation years beginning before January 1,
1987.
(q) Defined Contribution Plan Fraction: A fraction the numerator of which
is the sum of the Annual Additions to the Participant's account(s)
under all qualified defined contribution plans of Company, including
voluntary contribution accounts, as of the close of the Limitation
Year, and the denominator of which is the sum of the lesser of the
following amounts determined for such year and for each prior Year of
Service with the Company:
(1) Such amount as is determined by multiplying 1.25 by the dollar
limitation in effect for the defined contribution plans under
Internal Revenue Code Subsection 415(c)(1)(A) for such year
(determined without regard to Section 415(c)(6) of the Code), or
(2) The product of 1.4 multiplied by the amount which may be taken
into account under Code Section 415(c)(1)(B) for such Limitation
Year.
Notwithstanding the foregoing, the numerator of the defined
contribution plan fraction shall be adjusted pursuant to Regulation
1.415-7(d)(1) and question T-6 and T-7 of Internal Revenue Service
Notice 83-10.
Notwithstanding the foregoing, for any Top-Heavy Plan Year, 1.0 shall
be substituted for 1.25 above, if any Non-Key Employee Participant
eligible for any accrual of benefits does not have either an
allocation of Company contributions and forfeitures of at least 7.5
percent of Compensation for such year, or an accrued benefit in a
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defined benefit plan in which he participates of not less than the 3%
minimum benefit as provided in Code Section 416(h)(2)(A)(ii)(I) (but
not both). However, for any Plan Year in which this Plan is a Super
Top-Heavy Plan, 1.0 shall be substituted for 1.25 in any event.
(r) Determination Date: For purposes of determining if the Plan is
Top-Heavy, the last day of the preceding Plan Year, or in the case of
the first Plan Year, the last day of such Plan Year.
(s) Early Retirement Date: This Plan does not provide for a retirement
date prior to Normal Retirement Date.
(t) Earned Income: With respect to a Self-Employed Individual, the net
earnings from self-employment in the trade or business with respect to
which the Plan is established, for which the personal services of the
individual are a material income-producing factor. Net earnings will
be determined without regard to items not included in gross income and
the deductions allocable to such income items. Net earnings are
reduced by contributions by the Employer to a qualified Plan to the
extent deductible under Code Section 404. Additionally, for taxable
years beginning after December 31, 1989, net earnings shall be
determined with regard to the deduction allowed to the Employer by
Code Section 164(f).
(u) Effective Date of this Plan: First day of Plan Year beginning January
1, 1992.
(v) Eligible Employee: Any Employee who has satisfied the provisions of
Section 3.1
(w) Eligibility Computation Period: The consecutive 12-month period
beginning on the date on which the Employee first performed an hour of
service and successive 12-month periods thereafter. If an Employee
incurs a Break in Service and subsequently is credited with additional
hours of service, his Eligibility Computation Period shall be the
consecutive 12 month period beginning with the date on which he is
first credited with an hour of service after the Break in Service, and
successive consecutive 12 month periods thereafter.
(x) Employee: Employees of the Employer and shall include leased employees
within the meaning of Section 414(n)(2) and 414(o)(2) of the Code.
Notwithstanding the foregoing, if such leased employees constitute
less than twenty percent of the Employer's nonhighly compensated work
force within the meaning of Section 414(n)(1)(C)(ii) of the
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Code, the term "Employee" shall not include those leased employees
covered by a plan described in Section 414(n)(5) of the Code unless
otherwise provided by the terms of the Plan other than this amendment
and restatement.
(y) Employer: The Company and any corporation which is a member of a
controlled group of corporations (as defined in Section 414(b) of the
Code) which includes the Company; any trade or business (whether or
not incorporated) which is under common control (as defined in Section
414(c) of the Code) with the Company; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Section 414(m) of the Code) which includes the Company; and
any other entity required to be aggregated with the Company pursuant
to regulations under Section 414(o) of the Code.
(z) Employer Contribution Account: The account maintained for a
Participant to record his share of the contributions of the Employer
and adjustments relating thereto.
(aa) ERISA: Public Law No. 93-406, the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(bb) Excess Compensation: With respect to any Participant, the
Participant's Compensation which is in excess of the Integration Level
elected by the Employer in the Plan.
(cc) Family Member: With respect to an affected Participant, such
Participant's spouse, such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section 414(q)
(6)(B).
(dd) Fiduciary: Any person who (a) exercises any discretionary authority or
discretionary control respecting management of the Plan or exercises
any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of
the Plan or has any authority or responsibility to do so, or (c) has
any discretionary authority or discretionary responsibility in the
administration of the Plan, including, but not limited to the Trustee,
the Employer and its representative body, and the Administrator.
(ee) Forfeiture: The portion of a Participant's Employer Contribution
Account that is not vested, and occurs on the earlier of:
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(a) the distribution of the entire vested portion of a participant's
Employer Contribution Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
terminated Participant whose vested benefit is zero, such terminated
Participant shall be deemed to have received a distribution of his
vested benefit upon his termination of employment. In addition, the
term Forfeiture shall also include amounts deemed to be Forfeitures
pursuant to any other provision of this Plan.
(ff) Highly Compensated Employee: An Employee who performed services for
the Employer during the "determination year" and is one or more of the
following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" of the Employer.
"Five percent owner" means any person who owns (or is considered
as owning within the meaning of Code Section 318) more than five
percent of the outstanding stock of the Employer or stock
possessing more than five percent of the total combined voting
power of all stock of the Employer or, in the case of an
unincorporated business, any person who owns more than five
percent of the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m)
and (o) shall be treated as separate employers.
(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $50,000 and were in the Top
Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415
Compensation" during the "look-back year" from the Employer
greater than 50 percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of
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officers shall be limited to the lesser of (i) 50 Employees; or
(ii) the greater of 3 Employees or 10 percent of all Employees.
If the Employer does not have at least one officer whose annual
"415 Compensation" is in excess of 50 percent of the Code Section
415(b)(1) (A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination
year" and are also described in (b), (c) or (d) above when these
paragraphs are modified to substitute "determination year" for
"look-back year".
In determining who is a Highly Compensated Employee, all
Affiliated Employers shall be taken into account as a single
employer and leased employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such
leased employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by
the Employer. In addition, Highly Compensated Former Employees
shall be treated as Highly Compensated Employees without regard
to whether they performed services during the "determination
year".
(f) If an employee is, during a determination year or look-back year,
a family member of either a 5 percent owner who is an active or
former employee or a highly compensated employee who is one of
the 10 most highly compensated employees ranked on the basis of
compensation paid by the employer during such year, then the
family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the
family member and 5 percent owner or top-ten highly compensated
employee shall be treated as a single employee receiving
compensation and plan contributions or benefits equal to the sum
of such compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated
employee. For purposes of this section, family member includes
the spouse, lineal ascendants and descendants of the employee or
former employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a highly compensated employee,
including the determinations of the number
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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.
(Look-back year election) The "look-back year" shall be the calendar
year ending with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be the
period of time, if any, which extends beyond the "look-back year" and
ends on the last day of the Plan Year for which testing is being
performed (the "lag period"). If the "lag period" is less than twelve
months long, the dollar threshold amounts specified in (b), (c) and
(d) above shall be prorated based upon the number of months in the
"lag period".
For purposes of this Section, the determination of "415 Compensation"
shall be made without regard to Code Sections 125, 402(a)(8), 402(h)
(1)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, without regard to Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b) and (c)
above shall be adjusted at such time and in such manner as is provided
in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
(gg) Highly Compensated Former Employee: A former Employee who had a
separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the
foregoing, any Employee who separated from service prior to 1987 will
be treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year
after the Employee attains 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For
purposes of this Section, "determination year", "415 Compensation" and
"five percent owner" shall be determined in accordance with Section
2.l(hh). Highly Compensated Former Employees shall be treated as
Highly Compensated Employees.
(hh) Highly Compensated Participant: Any Highly Compensated Employee who is
eligible to participate in the Plan.
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(ii) Inactive Participant: Any Employee or former Employee who has ceased
to be a Participant and on whose behalf an account is maintained under
the Plan.
(jj) Insurer: Any legal reserve life insurance company.
(kk) Key-Employee: Any Employee or former Employee (and the beneficiaries
of such Employee) who at any time during the Plan Year (ending on the
Determination Date) or on the preceding four (4) Plan Years was:
(a) An officer of the Employer whose annual Compensation exceeds 50%
of the dollar limitation under section 415(b)(1)(A) of the Code.
The number of Officers is limited to a maximum of the lesser of:
(i) 50 Employees or,
(ii) the greater of 3 Employees or 10% of all Employees
(iii) If no one in the Company has Compensation in excess of 50%
of the defined contribution dollar limit, then the one
officer with the highest Compensation is considered a Key
Employee.
(b) An Owner (or considered an owner under section 318 of the code)
who:
(i) owns one of the ten largest interests in the Employer, if
such individual's Compensation exceeds 100 percent of the
dollar limitation under section 415(c)(1)(A) of the Code.
(ii) owns 5 percent of the Employer and has an annual
Compensation in excess of $150,000, or
(iii) owns 1 percent of the Employer and has annual Compensation
in excess of $150,000.
Annual Compensation means Compensation as defined in section 415(c)(3)
of the Code, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under section 125, section 402(a)(8), section
402(h) or section 403(b) of the Code.
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(11) Leased Employee: Any person who is not an Employee of Company and who
has, for a period of 1 or more years, and on a substantially full-time
basis, provided services to Company of a type historically performed
by Employees of the Company, which services are or have been provided
pursuant to an agreement between Company and a leasing organization.
For any Plan Year, any Leased Employee shall be treated as an Employee
of Company for purposes of the participation standards of Article III,
the contribution standards of Article IV and the vesting standards of
Article VIII, unless such Leased Employee is, for such Plan Year or
any portion thereof during which such Leased Employee provides
services for the Company, a participant in a Safe Harbor Plan provided
for such Leased Employee by the leasing organization leasing the
services of such Leased Employee to the Company. For purposes of the
foregoing sentence, a Leased Employee shall not be treated as an
Employee of the Company until after the close of the aforementioned
1-year period during which such individual has provided substantially
full-time services to the Company, except that Years of Service for
the Company shall be determined by taking into account the entire
period for which the individual performed services for the Company.
(mm) Length of Service Required:
(1) On the effective Date of this Plan: Two years
(2) After the Effective Date of this Plan: Two years
(nn) Limitation Year: Any period of one year ending on the last day of the
Plan Year. If the Plan Year is changed, the limitation year shall
correspond to the new Plan Year, beginning with the first full twelve
month Plan Year subsequent to the commencement of change in Plan Year.
In the event the Limitation Year is or has been changed, by reason of
change in the Plan Year or otherwise, the limitations of Paragraph 4.3
shall be applicable in the normal manner, as if no change had occurred
with respect to the new Limitation Year, but with respect to the
Limitation Year within which the change is made (the former Limitation
Year), the following rule shall apply: the dollar limit for Annual
Additions shall be prorated for allocations made from the first day of
the former Limitation Year through the day before the first day of the
new Limitation Year (the limitation period), by multiplying (1) the
applicable dollar limitation for the calendar year in which the
limitation period ends by (2) a fraction, the numerator of which is
the number of months
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(including any fractional parts of a month) in the limitation period,
and the denominator of which is 12.
(oo) Maternity or Paternity Leave of Absence: For Plan Years beginning
after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement
of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a
period immediately following such birth or placement.
(pp) Minimum Participation Age Required:
(1) On the Effective Date of the Plan: 21
(2) After the Effective Date of the Plan: 21
(qq) Named Fiduciary: President of Company, except that if Company is an
unincorporated business, the proprietor of Company if a
sole-proprietorship, or the partner designated in the summary plan
description for the Plan for purposes of service of legal process.
(rr) Non-Highly Compensated Participant: shall mean any Participant who is
neither a Highly Compensated Employee nor a Family Member.
(ss) Non-Key Employee: Any Employee who is not a Key-Employee.
(tt) Normal Retirement Age: The earlier of (1) the Participant's 65th
Birthday; or (2) the Normal Retirement Date.
(uu) Normal Retirement Date: The Anniversary Date coinciding with or next
following a Participant's 65th Birthday or other Anniversary Date
following a Participant's commencement of participation in the Plan,
whichever shall last occur.
(vv) Original Effective Date of this Plan: First day of Plan Year beginning
January 1, 1992.
(ww) Participant: Any Employee of the Employer who has met the eligibility
and participation requirements of the Plan.
(xx) Participation Date: The first day of the Plan Year or the first day of
the seventh month of the Plan Year, whichever is earlier, coinciding
with or next following the date on which an Employee completes his
applicable Minimum Participation Age and Length of Service
Requirements.
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(yy) Plan Administrator: Company
(zz) Plan Year: Any period of one year ending December 31. The first Plan
Year shall be the period January 1, 1992, through December 31, 1992.
(aaa) Safe Harbor Plan: A money purchase pension plan with a nonintegrated
employer contribution rate of at least 10 percent of compensation as
described in section 415(c)(3) of the Code, but including salary
deferred contributions, and providing for immediate participation and
full and immediate vesting.
(bbb) Self-Employed Individual: Any individual who has earned income for
the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income
but for the fact that the trade or business had no net profits for the
taxable year. A Self-Employed Individual shall be treated as an
Employee.
(ccc) Service for Predecessor Employer: In any case in which Company
maintains a plan of a predecessor employer, service for such
predecessor shall be treated as service for Company, and in any case
in which Company maintains a plan which is not the plan maintained by
a predecessor employer, service for such predecessor shall (as
provided in Internal Revenue Code Section 414(a)(2)), to the extent
required in regulations prescribed by the Secretary of the Treasury or
his delegate, be treated as service for Company.
(ddd) Shareholder-Employee: If Company is an S Corporation, an Employee of
Company who either individually or together with his spouse, children,
grandchildren and parents, owns more than 5% of Company's outstanding
stock on any day during the Plan Year.
(eee) S Corporation: An electing small business corporation, within the
meaning of Internal Revenue Code Section 1362(a).
(ggg) Super Top-Heavy Plan: A Top-Heavy Plan under which the present value
of accrued benefits or the sum of account balances (including accounts
for Employee contributions) of Key-Employees, under this Plan and any
plan of an Aggregation Group, exceeds 90 percent of the present value
of accrued benefits or the sum of the account balances (including
accounts for Employee contributions) of all
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Participants, under this Plan and any plan of an Aggregation Group,
measured as of the Determination Date.
(hhh) Taxable Wage Base: With respect to any year, the maximum amount of
earnings which may be considered wages for such year under Code
Section 3121(a)(1).
(iii) Top-Heavy Plan: For Plan Years commencing after December 31, 1983, a
Plan under which the present value of accrued benefits of
Key-Employees, or the sum of the account balances (including accounts
for Employee contributions) of Key-Employees under this Plan and any
plan of an Aggregation Group, exceeds 60 percent of the present value
of accrued benefits or the sum of the account balances (including
accounts for Employee contributions) of all Participants, under this
Plan and any plan of an Aggregate Group, measured as of the
Determination Date.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such
Participant's present value of accrued benefit and/or account balances
shall not be taken into account for purposes of determining whether
this Plan is a Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top-Heavy Group).
(jjj) Top-Heavy Plan Year: A particular Plan Year commencing after December
31, 1983, in which the Plan is a Top-Heavy Plan.
(kkk) Trust Situs: COMMONWEALTH OF PENNSYLVANIA
(111) Top Paid Group: "Top Paid Group" means the top 20 percent of
Employees who performed services for the Employer during the
applicable year, ranked according to the amount of "415 Compensation"
received from the Employer during such year. All Affiliated Employers
shall be taken into account as a single employer, and leased employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such leased employees are covered by a
plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. For the purpose of
determining the number of active Employees in any year, the following
Employees shall be excluded. However, such Employees shall still be
considered for the purpose of identifying the particular Employees in
the Top Paid Group:
(a) Employees with less than six (6) months of service;
II-14
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year;
(d) Employees who have not yet attained age 21; and
(e) Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer constituting United States source income within the
meaning of Code Section 861(a)(3).
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and
the Employer, and the Plan covers only Employees who are not covered
under such agreements, then Employees covered by such agreements shall
be excluded from both the total number of active Employees as well as
from the identification of particular Employees in the Top Paid Group.
(111) Trustee: The Trustee or Trustees named above and any successor
Trustee or Trustees.
(mmm) Trust Fund: The assets of the Plan and Trust as the same shall exist
from time to time.
(nnn) Vested: The nonforfeitable portion of any account maintained on
behalf of a Participant.
(ooo) Vesting Computation Period: The consecutive 12 month period beginning
on the first day of the Plan Year. If the Vesting Computation Period
is or has been changed, by reason of a change in the Plan Year or
otherwise, the first Vesting Computation Period, after such change
shall begin before the last day of the preceding Vesting Computation
Period and an Employee who is credited with a Year of Service in both
the last Vesting Computation Period before the change and the first
Vesting Computation Period after the change shall be credited with 2
Years of Service for purposes of vesting.
(ppp) Year of Service:
(a) For purposes of eligibility: any Eligibility Computation Period
in which the Employee has at least
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1,000 Hours of Service. If the Length of Service required under
the Plan is or includes a fractional year, an Employee shall not
be required to have any minimum number of Hours of Service to
receive credit for such fractional year for eligibility.
(b) For purposes of vesting: any Vesting Computation Period in which
the Employee has at least 1,000 Hours of Service.
(c) For purposes of benefit accrual: any Plan Year in which the
Participant has at least 1,000 Hours of Service.
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ARTICLE THREE
ELIGIBILITY
3.1 All Eligible Employees in the employ of Company on the Effective Date
shall participate as of the Effective Date, provided that on such date they have
met the Minimum Participation Age and Length of Service requirements applicable
to such Employees.
In the event that any Eligible Employee in the employ of Company on the
Effective Date does not meet the applicable Minimum Age and Service requirements
on the Effective Date, such Eligible Employee shall commence participation on
the applicable Participation Date.
Any Eligible Employee who was a Participant in the Plan prior to the
effective date of this amendment and restatement shall continue to participate
in accordance with the provisions of this amended and restated plan.
3.2 All Eligible Employees whose employment commences after the Effective
Date shall commence Participation on the applicable Participation Date.
3.3 Notwithstanding any service requirements of less than one year which
may be contained herein, an Employee who is credited with 1,000 or more hours of
service in an Eligibility computation period, shall be considered to have met,
at the expiration of said eligibility computation period, such required length
of service requirement.
3.4 An Employee shall be credited with an Hour of Service for purposes of
eligibility, vesting and eligibility for Company contributions according to the
following:
(a) An hour of service is each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for Company
during the applicable computation period.
(b) An hour of service is each hour for which an Employee is paid, or
entitled to payment, by Company on account of a period of time
during which no duties are performed (irrespective of whether the
employment relationship has terminated), because of vacation,
holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. Notwithstanding the
preceding sentence:
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(1) No more than 501 hours of service are required to be
credited under this subparagraph (b) to an Employee on
account of any single continuous period during which the
Employee performs no duties (whether or not such period
occurs in a single computation period);
(2) An hour for which an Employee is directly or indirectly paid
or entitled to payment, on account of a period during which
no duties are performed, is not required to be credited to
the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workmen's compensation, or unemployment
compensation or disability insurance laws; and
(3) Hours of service are not required to be credited for a
payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
For purposes of this subparagraph (b), a payment shall be deemed to be made by
or due from Company regardless of whether such payment is made by or due from
Company directly, or indirectly through, among others, a trust fund, or insurer,
to which Company contributes or pays premiums, and regardless of whether
contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of Employees in
the aggregate.
(c) An hour of service is each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
Company. The same hours of service shall not be credited both
under subparagraph (a) or subparagraph (b), as the case may be,
and under this subparagraph. Crediting of hours of service for
back pay awarded or agreed to with respect to periods described
in subparagraph (b) shall be subject to the requirements set
forth in that subparagraph.
Also included is the special rule for determining hours of
service for reasons other than the performance of duties, as well
as the rule for crediting of hours of service to computation
periods, as set forth in Labor Department Regulations, Sections
2530.200b-2(b) and (c), respectively. Hours of service will be
credited for employment with other members of an affiliated
service group (under Section 414(m)), a controlled group of
corporations (under Section 414(b), or a group of trades or
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businesses under common control (under Section 414(c)) of which
the adopting Employer is a member, and any other entity required
to be aggregated with the employer pursuant to Section 414(o) and
the regulations thereunder.
If the Employer maintains the plan of a predecessor employer,
service with such employer will be treated as service for the
Employer.
Hours of service will also be credited for any individual
considered an employee for purposes of this Plan under Section
414(n) or Section 414(o) and the regulations thereunder.
(d) Additional hours of service in the minimum amount necessary to
prevent a break in service shall be credited to employees for the
following absences:
(1) Authorized leave of absence, provided the Employee returns
to active employment on or before the end of such leave of
absence. Authorized leave of absence shall include illness
and reserve duty in the Armed Forces of the United States.
(2) Absence of an Employee, subsequent to the effective date,
who enters the Armed Forces of the United States, and has
reemployment rights under law, provided he complies with the
requirements of the law as to employment and reemployment.
(e) Additional Hours of Service, but not in excess of 501, based on
the number of Hours of Service which otherwise would normally
have been credited to individuals but for such absence as is
described below, (or if such number cannot be determined, 8 Hours
of Service per day of such absence), shall be credited to
individuals for purposes of eligibility and vesting, but not for
purposes of benefit accrual, (notwithstanding 3.4 above), in the
Eligibility and Vesting Computation Periods in which such absence
begins, if necessary to prevent a 1 year Break in Service in such
Computation Period, but if not so necessary, in the immediately
following Eligibility and Vesting Computation Periods, provided
that the absence is on account of one or more of the following:
(i) The pregnancy of the individual;
III-3
(ii) The birth of a child of the individual;
(iii) The placement of a child with the individual in connection
with the adoption of such child by such individual;
(iv) Care of such child for a period beginning immediately after
his birth or placement.
However, no Hours of Service will be credited under this
subparagraph unless the individual furnishes to the Plan
Administrator such timely information as the Plan Administrator
may reasonably require to establish the number of days of absence
and the reason or reasons therefore.
3.5 Hours of service shall be counted for purposes of eligibility, vesting
and benefit accrual on the basis of actual hours for which an Employee is paid
or entitled to payment, as determined in accordance with Paragraph 3.4.
3.6 Within 90 days of the Participation Date on which an Employee shall
become eligible to participate, the Plan Administrator shall notify each such
Employee of his eligibility to participate, by providing such Employee with a
summary plan description.
3.7 In the case of an Employee who is vested in benefits deriving from
Company Contributions, and who sustains a Break in Service, such Employee shall
recommence active participation on the first day of his first Eligibility
Computation Period after the break, during which he has completed 1,000 hours of
service or more. In the case of an Employee with no such vested benefit who
sustains a Break in Service, where the number of consecutive years in which he
incurred a Break in Service is less than the greater of 5 or the aggregate
number of Years of Service, whether or not consecutive, that he completed before
such break, such Employee shall recommence active participation on the first day
of his first Eligibility Computation Period after the break, during which he has
completed 1,000 hours of service or more. In the case of an Employee with no
such vested benefit who sustains a Break in Service, where the number of
consecutive years in which he incurred a Break in Service is equal to or exceeds
the greater of 5 or the aggregate number of his Years of Service, whether or not
consecutive, that he completed before such break, such Employee shall be treated
as if he were a new Employee for purposes of eligibility to participate.
The aggregate number of Years of Service before a period of Breaks in Service
shall not include any Years of Service not
III-4
required to be taken into account under this Paragraph by reason of any prior
Break in Service. For purposes of vesting for an Employee who has sustained a
Break in Service, the provisions of Article 8 shall apply. For purposes of
benefit accrual, the provisions of Article IV shall apply.
3.8 Notwithstanding any provision of this Plan to the contrary, this Plan
shall not provide contributions or benefits for an Owner-Employee who controls,
or a group of Owner-Employees who together control an unincorporated trade or
business with respect to which the Plan is established, and such Owner-
Employee, or group of Owner-Employees also control one or more unincorporated
trades or businesses, unless this Plan and the plans established with respect to
such other trades or businesses, when coalesced, constitute a single plan which
satisfies the requirements of Section 401(a) and (d) of the Internal Revenue
Code with respect to the employees of all such unincorporated trades or
businesses. Furthermore, the Plan shall not provide contributions or benefits
for one or more Owner-Employees who control one or more unincorporated trades or
businesses, unless the employees of each such unincorporated trade or business
which such Owner-Employees control are included under a plan which satisfies the
requirements of Section 401(a) and (d) of the Internal Revenue Code, and which
provides contributions or benefits for employees not less favorable than those
provided for such Owner-Employees under this Plan. For purposes of this
Paragraph 3.8, an Owner-Employee, or a group of Owner-Employees, shall be
considered to control a trade or business if such Owner-Employee, or such group
of Owner-Employees together own the entire interest in an unincorporated trade
or business, or in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in such partnerships. An Owner-Employee
shall mean a sole proprietor, or, in the case of a partnership, any person who
owns more than 10% of the capital or profits interest.
3.9 Notwithstanding any provision of this Plan to the contrary, in the
event Participant is no longer a member of an eligible class of employees and
becomes ineligible to participate but has not incurred a break in service, such
Employee will participate immediately upon returning to an eligible class of
employees. If such Participant incurs a break in service, eligibility will be
determined under the break in service rules of the Plan.
In the event an Employee who is not a member of an eligible class of
employees becomes a member of an eligible class, such employee will participate
immediately if such employee has satisfied the minimum age and service
requirements and would otherwise previously become a Participant.
III-5
ARTICLE FOUR
CONTRIBUTIONS AND MANAGEMENT OF FUNDS
4.1 For each Plan Year, Company shall contribute to the Trust, no later than
such time as may be prescribed by the Internal Revenue Code, such portion, if
any, of its income as is determined by the Board of Directors, in a written
resolution, prior to the end of the Plan Year. In determining any such
contribution, Company may rely upon an estimate of its net income, the estimate
to be made by the Company's principal accounting officer, or by an independent
public accountant appointed by the Company. Net income shall mean current and
accumulated earnings and profits of the Company, as determined pursuant to the
Internal Revenue Code, before any deductions for taxes based upon income, and
before any contributions to any qualified retirement plan. In no event, however,
shall the contribution for any Plan Year exceed the amount deductible for such
Plan Year for income tax purposes as a contribution to the Trust under
applicable provisions of the Internal Revenue Code.
Allocation: Integrated: Company contributions, if any, together with forfeitures
pursuant to Paragraph 8.1, and subject to the limitations described in Paragraph
4.3, shall be allocated among the Participants, as follows:
STEP ONE: Contributions and forfeitures will be allocated to each
participant's account in the ratio that each Participant's total
Compensation bears to all Participants' total compensation, but not in
excess of 3% of each Participant's Compensation.
STEP TWO: Any contributions and forfeitures remaining after the allocation
in STEP ONE will be allocated to each Participant's account in the ratio
that each Participant's Compensation for the Plan Year in excess of the
Integration Level bears to the Excess Compensation of all Participants, but
not in excess of 3%.
Notwithstanding anything in the Plan to the contrary, STEP ONE and STEP TWO
above will apply only in years in which the Plan is top heavy.
STEP THREE: Any contributions and forfeitures remaining after the
allocation in STEP TWO will be allocated to each Participant's account in
the ratio that the sum of each Participant's total Compensation and
Compensation in excess of the Integration Level bears to the sum of all
Participants' total Compensation and Compensation in excess of the
IV-1
Integration Level but not in excess of the profit-sharing maximum disparity
rate.
The maximum profit-sharing disparity rate is equal to the lesser of:
(a) 2.7% or
(b) the applicable percentage determined in accordance with the table
below:
----------
If the Integration Level
is more than but not more than the % is
------------ ----------------- --------
the greater of $10,000
$0.00 or 20% of taxable wage base 2.7%
(TWB)
the greater of $10,000
or 20% of TWB 80% TWB 1.3%
80% TWB any amount greater than
80% of taxable wage base,
but less than 100% TWB 2.4%
If the Integration Level is equal to the taxable wage base, the applicable
percentage is 2.7%
----------
STEP FOUR: Any remaining Company contributions or forfeitures will be
allocated to each Participant's account in the ratio each Participant's
total Compensation for the Plan Year bears to all Participants' total
Compensation for that year.
The Integration Level shall be equal to the taxable wage base or such lower
amount elected by Employer. The taxable wage base is the contribution and
benefit base in effect under section 230 of the Social Security Act at the
beginning of the Plan year.
All contributions made by the Company shall be delivered to the Trustee.
The Trustee shall be accountable for all Company contributions received by it,
but shall have no duty to require any contributions to be delivered to it or
determine if contributions received comply with the Plan.
IV-2
The Trustee will maintain a separate account for each Employee to which
will be credited the Company contribution and earnings thereon.
Only Compensation paid or accrued during a Plan Year on and after the date
an Employee commenced participation shall be taken into account for purposes of
allocating contributions and forfeitures.
4.2 The Plan shall accept no Employee Contributions designated by the
Participant as deductible employee contributions (within the meaning of Section
72(0) (5) (A) of the Code) for a taxable year of the Participant beginning after
December 31, 1986.
4.3 The following limits apply to allocations of Annual Additions:
(a) Notwithstanding any provision to the contrary contained herein,
no allocation of an Annual Addition shall be made to a
Participant's account(s) to the extent that such allocation shall
cause the Annual Addition to this Plan, and to any other
qualified defined contribution plan of the Company (or of any
other entity which is a member of a controlled group of entities,
as defined in Internal Revenue Code Section 414(b), (c), (m) and
(o) of which Company is also a member), to exceed the lesser of
the Defined Contribution Dollar Limitation or 25% of the
Participant's "415 Compensation" within the meaning of Section
415(c)(3) of the Code in any given limitation year. For purposes
of applying these limitations, "415 Compensation" shall mean the
Participant's wages, salaries, fees for professional services and
other amounts received for personal services actually rendered in
the course of employment with Company and such other amounts as
are specified by Treasury Department Regulation Section
1.415-2(d)(1).
"415 safe-harbor compensation" shall mean wages, salaries, and
fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment
with the employer maintaining the plan to the extent that the
amount are includible in gross income (including, but not limited
to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, reimbursements, and
expense allowances), and excluding the following:
(a) Employer contributions to a plan of deferred compensation
which are not includible in the
IV-3
employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are
deductible by the employee, or any distributions from a plan
of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(d) other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a
salary reduction agreement) towards the purchase of an
annuity described in section 403(b) of the Internal Revenue
Code (whether or not the amounts are actually excludible
from the gross income of the employee).
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 includible in
gross income during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant
in a defined contribution plan who is permanently and totally disabled
(as defined in section 22(e)(3) of the Internal Revenue Code) is the
compensation such participant would have received for the limitation
year if the participant had been paid at the rate of compensation paid
immediately before becoming permanently and totally disabled; such
imputed compensation for the disabled participant may be taken into
account only if the participant is not a highly compensated employee
(as defined in section 414(g) of the Code) and contributions made on
behalf of such participant are nonforfeitable when made.
The Compensation limitation shall also not apply to any contributions
for medical benefits (within the meaning of
IV-4
Section 419(A)(f)(2) of the Code) after separation from service which
is otherwise treated as an Annual Addition, or any amount otherwise
treated as an Annual Addition under Section 415(1) (1) of the Code.
The above mentioned dollar limitation shall be adjusted so as to be
equal to the maximum dollar limitation for defined contribution plans
prescribed by the Secretary of the Treasury or his delegate In the
case of a Self-Employed Individual, "Compensation" shall mean the
Participant's "Earned Income (within the meaning of Internal Revenue
Code Section 401(c)(2), but determined without regard to any exclusion
under Internal Revenue Code Section 911) from Company."
Definitions. For purposes of Section 4.3(a), "Defined Contribution
Dollar Limitation" shall mean $30,000 or, if greater, one-fourth of
the defined benefit dollar limitation set forth in Section 415(b)(1)
of the Code as in effect for the Limitation Year.
(b) If the Annual Addition under this Plan to a Participant's account is
to be reduced as a result of the above limitation, such reduction
shall be effected by:
(i) first, returning any employee contributions made during the Plan
Year which are Annual Additions, (and any earnings attributable
thereto),
(ii) next, allocating a Participant's proportionate share of
forfeitures (if any), but not to exceed the limitation on Annual
Additions; and
(iii) finally, allocating Company contributions otherwise allocable to
a Participant's account, up to the limitation on Annual Additions
provided above, reduced by any forfeitures allocated under (ii)
above.
(c) Company shall endeavor to avoid making contributions which would, if
allocated according to the terms of the Plan, result in Annual
Additions in excess of the limits described in this paragraph, (an
excess amount), but if as a result of the amount of forfeitures to be
allocated, or errors in estimating Compensation, or under such other
facts and circumstances as the Commissioner of Internal Revenue
permits, there is an excess amount, such amount shall be held
unallocated in a suspense account and allocated in the next Limitation
Year (and succeeding Limitation Years if necessary) to all
Participants for whom allocations of contributions or forfeitures
would normally be made, and in the manner and up to the limits
prescribed by this Article, and shall reduce any Company
IV-5
contribution which would otherwise be made to the Plan. Investment
gains and losses shall not be allocated to the suspense account. If it
is discovered that an excess amount has been improperly allocated,
such amount shall be subtracted immediately from the affected
Participant's account (including the earnings allocated as a result of
such improper allocation), and held in suspense as described above.
In the event of termination of the Plan, the suspense account shall
revert to the Company pursuant to Paragraph 16.5.
(d) If in any Limitation Year Company maintains any other qualified
defined contribution plan(s), Annual Additions shall be deemed
allocated first to any money purchase pension plan and next to any
profit sharing plan.
(e) In any case in which an individual is or has been a Participant in
both a defined benefit plan and a defined contribution plan maintained
by Company (or by any other entity which is a member of a controlled
group of entities, as defined in Code Section 414(b), (c), (m), and
(o) of which Company Plan is a member), the sum of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction for any
Limitation Year may not exceed 1.0. If any reductions are required in
order not to exceed this fraction, they shall be made to the defined
contribution plans of Company, first to any profit sharing plan of
Company and next to any money purchase pension plan of Company. Such
reduction shall be effected by reducing the sum of the current
Limitation Year Annual Additions in accordance with the procedure of
Subparagraph 4.3(b), so that the Defined Contribution Plan Fraction
does not exceed 1.0 minus the defined benefit fraction at the end of
the Limitations Year. Any amount received by this reduction shall be
held in suspense in accordance with Subparagraph 4.3(c). Provided
further, that if this reduction is insufficient to reduce the overall
limit to 1.0, then the Defined Benefit Plan Fraction shall be reduced
to the extent necessary to bring about compliance.
(f) The above limitations are intended to comply with the provisions of
Section 415 of the Internal Revenue Code as amended so that the
maximum benefits provided by plans of the Employer shall be exactly
equal to the maximum amounts allowed under Section 415 of the Internal
Revenue Code and regulations thereunder. If there is any discrepancy
between the provisions of the Section 4.3 and the provisions of
Section 415 of the Internal Revenue Code and regulations thereunder,
such discrepancy shall be resolved
IV-6
in such a way as to give full effect to the provisions of Section 415
of the Code.
4.4 If a benefit is forfeited because the Participant or beneficiary cannot
be found, such benefit will be reinstated if a claim is made by the Participant
or beneficiary.
4.5 As of the last day of the Plan Year, the fund shall be valued at fair
market value, and there shall be added to each Participant's account derived
from Company contributions:
(a) That proportion of the Company's contribution and forfeitures for
the year ended for the particular Participant in accordance with
Paragraph 4.1; and
(b) That portion of the net accretions and diminution to the fund by
way of income and loss and realized and unrealized gains and
losses, which bears the same ratio to the total of such net
accretions and diminutions as his account (exclusive of Cash
Value) at the preceding Anniversary Date (reduced by any
distributions during the Plan Year) bore to the total account of
all Participants (exclusive of Cash Value and reduced by any
distributions or forfeitures during the Plan Year), plus any
increases in Cash Value and less the cost of insurance Contracts
allocated to the Participant's account. (During the first Plan
Year, such proportion shall be based on the Participant's share
of the Company's contribution.)
4.6 The fact that an allocation shall be made and credited to the account
of the Participant, whether by mistake or otherwise, shall not vest in the
Participant any right, title or interest in and to any assets, except at the
time or times and upon the terms and conditions expressly set forth in the Plan.
4.7 All allocations shall be made on the basis of the nearest whole dollar
and accounting shall be done on the cash basis, modified to take into account
accrued contribution receivables. If payment is to be made to a terminated
vested participant pursuant to Articles V, VI, VII or VIII on a date subsequent
to the relevant valuation date, and insurance premium payments have been made on
behalf of said Participant subsequent to said date, the amount payable shall be
reduced by that amount of said premium payment, to the extent non-refundable by
the Insurer, and increased by the amount of increase in Cash Value, if any,
occurring consequent upon said premium payment.
IV-7
ARTICLE FIVE
RETIREMENT BENEFITS
5.1 A Participant may elect to retire on his Normal Retirement Date,
whereupon his eligibility for Company contributions hereunder shall cease. If a
Participant remains in the employ of Company subsequent to Normal Retirement
Date, contributions shall be made for such Participant. If Company consents, a
participant may retire on his Early Retirement Date, whereunder his eligibility
for Company contributions hereunder shall cease.
If a Participant separates from service before satisfying the age requirement,
but has satisfied the service requirement, the Participant will be entitled to
elect an early retirement benefit upon satisfaction of such age requirement.
In the case of Early Retirement, the vesting schedule shall apply. In the case
of Normal Retirement, the total amount credited to an employed Participant's
account shall become 100 percent vested at the Participant's Normal Retirement
Age. If the Company makes a contribution for a Participant subsequent to such
date, such Participant shall be 100 percent vested in that contribution and any
earnings thereon.
5.2 The Trustee shall distribute to a retired Participant the value of his
vested amount in accordance with the provisions of Article IX.
V-1
ARTICLE SIX
DISABILITY BENEFITS
6.1 Any Participant who has become totally and permanently disabled shall
be entitled to retire, effective the first day of the next Plan Year subsequent
to the date disability commenced, but payment shall be made only after the Plan
Administrator receives written notice of a determination of such disability by a
medical certificate issued by a doctor selected or approved by the Plan
Administrator. Disability means inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The permanence and degree of such
impairment shall be supported by medical evidence.
If elected by the Employer in the Plan, nonforfeitable contributions will be
made to the Plan on behalf of each disabled Participant who is not a highly
compensated employee (within the meaning of Section 414(q) of the Code.
6.2 A Participant retiring because of such disability shall receive his
total account calculated as of the most recent valuation date. Payment shall be
made after the Participant is entitled to retire, and within 6 months of the
date on which the Plan Administrator receives notice in accordance with the
preceding paragraph, unless the Participant elects to defer commencement of
payment, pursuant to Paragraph 9.2, but in no circumstances shall payment be
made later than the period prescribed in Paragraph 9.2.
6.3 In lieu of a determination of disability pursuant to Paragraph 6.1
above, a determination of entitlement for disability benefits under Social
Security shall be conclusive evidence of total and permanent disability, but a
failure to attain such determination shall not be determinative of any rights to
receive disability benefits under this Plan. Recovery from total and/or
permanent disability subsequent to entitlement for receipt of benefits under
this Article shall not prejudice any right to receive or to continue to receive
such benefits.
VI-l
ARTICLE SEVEN
DEATH BENEFITS
7.1 In the event of the death of a Participant prior to the commencement of
payment of his retirement benefits, his death benefit shall be the entire amount
in his account (exclusive of Cash Value), as of the most recent valuation date,
and the proceeds of any Contract allocated to his account, provided that the
death benefit of a Participant who has terminated service with Company shall be
equal to his vested interest as computed under Article VIII or Article VI, as
the case may be, (exclusive of Cash Value) and the proceeds of any Contracts
allocated to his account. Such death benefits shall be paid to his designated
Beneficiary as soon as is convenient, but not later than 60 days after the next
valuation date.
(a) If insurance exists as a Trust asset, the following shall apply to the
insurance proceeds.
(1) The Plan Administrator, at the direction of the Participant,
shall direct the Trustee to designate a settlement option as
permitted in Paragraph 9.3 for the insurance.
(2) If no mode of settlement has been selected in accordance with (a)
(1) above, the Plan Administrator, at the direction of the
Beneficiary, shall direct the Trustee to designate a settlement
option as permitted in Paragraph 9.3, within 60 days after the
day on which a lump sum in full discharge of the death benefit
obligation under any insurance Contracts first becomes payable.
Under no circumstances may the mode of settlement from the
insurance proceeds be other than one permitted by Paragraph 9.3.
(b) In regard to non-insurance Trust assets, the following shall apply:
(1) The Plan Administrator, at the direction of the Participant,
shall direct the Trustee to designate a settlement option as
permitted in Paragraph 9.3 for the Trust assets.
(2) If no mode of settlement has been selected in accordance with (b)
(1) above, the Plan Administrator, after consultation with the
VII-1
Beneficiary, shall direct the Trustee to designate a settlement option
as permitted in Paragraph 9.3 within 60 days after the day on which a
lump sum in full discharge of the death benefit obligation first
becomes payable.
7.2 The Beneficiary or successor Beneficiary of any death benefit shall be
in accordance with the designation made by the Participant. The Participant
shall have the right to designate the Beneficiary or successor Beneficiary by
filing a designation of Beneficiary form with the Plan Administrator. At any
time, and from time to time, each Participant shall have the unrestricted right
to change the designation of the Beneficiary to receive any death benefits
hereunder. All designations shall be made in writing on the form required by the
Plan Administrator, and shall be filed with the Plan Administrator. If no
designation has been made, if the designated Beneficiary has predeceased the
Participant, or if the designation of beneficiary is inoperative for any reason
as to any part of any death benefit hereunder, then the Participant shall be
deemed to have designated the following as his Beneficiary, with priority in the
order named:
(a) first, to his widow or her widower, as the case may be;
(b) second, to his issue, per stirpes;
(c) third, to his parents;
(d) fourth, to his brothers and sisters, per stirpes; and
(e) fifth, to his estate.
Notwithstanding anything to the contrary contained herein, if a Participant is
married, no designation of a beneficiary other than the Participant's spouse, or
change of designation from a Participant's spouse to someone else shall be
valid, unless:
(a) the Participant's spouse consents in writing to the designation of a
specific beneficiary
(i) Such specific beneficiary will include any class of beneficiaries
or any contingent beneficiaries which may not be changed without
spousal consent,
(ii) the spouse may expressly permit designation by the Participant
without any further spousal consent
(b) Spouses consent acknowledges the effect of such election and is
witnessed by the Plan Administrator or a notary public.
VII-2
(c) Spousal consent shall be effective only with respect to such spouse
(i) If it is established to the satisfaction of the Plan
Administrator that there is no spouse or the spouse cannot be
located, a waiver will be deemed a qualified election.
(ii) A revocation of a prior waiver may be made by the Participant
without consent of spouse at any time prior to the commencement
of benefits. Furthermore the number of revocations shall not be
limited.
7.3 The Trustee shall be designated to receive the proceeds of any Contract
which becomes payable upon the death of the Participant. The Trustee may,
however, request Insurer to make any beneficiary designation as may be made by
the Participant under Paragraph 7.2 above. In such event, the Beneficiary so
designated may be revoked only upon the completion of the requirements
established by the Insurer, and under the terms of any contracts and rules of
the Insurer.
7.4 Upon the death of a Participant, the Trustee shall take all necessary
steps and shall execute all required documents to permit the Beneficiary to
collect the death benefits provided, pursuant to the specified method of
payment.
VII-3
ARTICLE EIGHT
SEPARATION BENEFITS
8.1 (a) Vesting. A Participant shall have a non-forfeitable right prior to
death, total and permanent disability, or Normal Retirement Age in that
percentage of his account derived from Company Contributions, including
forfeitures, as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 years or more 100%
Notwithstanding the vesting schedule above, the Vested Percentage of a
Participant's Account shall not be less than the Vested Percentage attained
as of the later of the Effective Date or adoption date of this amendment
and restatement. No Participant shall forfeit any part of his account until
the earlier of (a) five (5) consecutive one-year Breaks in Service or (b) a
cash-out distribution of the entire vested portion of his account balance
derived from Company Contributions, following the Participant's termination
of employment. As of the last day of the Plan Year with or within which
such Breaks in Service or cash-out distribution has occurred, the nonvested
portion of such Participant's account, if any, shall be forfeited and
administered as provided in Article IV.
(b) Distribution: If an employee terminates service, and the value of the
employee's vested account balance derived from employer and employee
contributions is not greater than $3,500, the employee will receive a
distribution of the value of the entire vested portion of such account
balance and the nonvested portion will be treated as a forfeiture. For
purposes of this section, if the value of an employee's vested account
balance is zero, the employee shall be deemed to have received a
distribution of such vested account balance. A participant's vested
account balance shall not include accumulated deductible employee
contributions within the meaning of section 72(o)(5)(B) of the Code
for plan years beginning prior to January 1, 1989.
If an employee terminates services, and elects, in accordance with the
requirements of Article Nine, to receive the value of the employee's
vested account balance, the nonvested portion will be treated as a
forfeiture. If the employee elects to have distributed less than the
entire vested portion of the account balance
VIII-1
derived from employer contributions, the part of the nonvested portion
that will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to employer contributions and the
denominator of which is the total value of the vested employer derived
account balance.
If an employee receives a distribution pursuant to this section and
the employee resumes employment covered under this plan, the
employee's employer-derived account balance will be restored to the
amount on the date of distribution if the employee repays to the plan
the full amount of the distribution attributable to employer
contributions before the earlier of 5 years after the first date on
which the participant is subsequently re-employed by the employer, or
the date the participant incurs 5 consecutive 1-year breaks in service
following the date of the distribution. If an employee is deemed to
receive a distribution pursuant to this section, and the employee
resumes employment covered under this plan before the date the
participant incurs 5 consecutive 1-year breaks in service, upon the
reemployment of such employee, the employer-derived account balance of
the employee will be restored to the amount on the date of such deemed
distribution.
(c) Administration of Participants' Accounts. No share of gains or losses
shall be credited to the forfeitable portion of a Participant's
account, if any, after the last valuation date prior to the date the
forfeiture occurs, until the next valuation date following the date,
if any, as of which the Participant's account is restored.
Following completion of distributions, a Participant's account derived
from Company contributions shall be cancelled, as of the date the
non-vested portion of his account, if any, would be forfeited.
If the Participant is not vested in any portion of his account, upon
forfeiture the account shall be cancelled.
If the Participant is vested in all or a portion of his account, and
no distribution is made following termination of employment or the
occurrence of a 1 year Break in Service, a 100% vested account shall
be maintained for his vested interest in the Plan, as of the date the
nonvested portion of his account, if any, would be forfeited. If this
account is subsequently distributed, upon completion of payment the
account shall be cancelled.
VIII-2
Subject to Subparagraph 8.1(d) below, if the Participant, subsequent
to cancellation of his account, becomes eligible at a later date to
share in Company Contributions (including forfeitures) and earnings
thereon, they shall be allocated to a newly established regular
account.
(d) Restoration of a Participant's Accounts Following Forfeiture. The
concept "Restoration of a Participant's Account" does not apply in the
case of a Participant who was already 100% vested in his account prior
to the occurrence of an event (distribution or incurrence of a 1 year
Break in Service) which would otherwise cause a forfeiture.
Only the amount in an account which has been forfeited is subject
potentially to restoration. Such an amount shall be equal to the
amount forfeited to the Trust, unadjusted for gains or losses, and
shall be termed the "Restoration Amount."
If a Year of Service is credited to a Participant following an event
causing forfeiture, restoration of the amount forfeited is possible,
provided that said Year of Service is not preceded by the incurrence
of a period of 5 or more consecutive 1 year Breaks in Service.
A possible restoration automatically will become an actual
restoration, if no distribution has occurred with respect to the
vested portion of the affected Participant's account deriving from
Company Contributions.
If distribution of all of a Participant's vested account deriving from
Company Contributions has occurred, in order for a possible
restoration to become an actual restoration, the Participant must
repay the full amount of the distribution. Such repayment may be made
no later than the later of: the end of the 5 year period following
distribution, or the end of the Vesting Computation Period within
which the Participant has the 5th of 5 consecutive 1 year Breaks in
Service. In the event the Participant repays the distribution within
the time allowed, Company shall add the amount of repayment to the
amount in the Participant' s account.
An actual restoration shall occur on the date as of which Company
Contributions, if any, would be allocated, coincident with or next
following the fulfillment of all conditions required for restoration,
and such date shall be termed the "Restoration Date". The Restoration
Amount shall be derived from Company contributions, which shall accrue
as of the Restoration Date. Said Company
VIII-3
Contributions shall be paid no later than the Plan Year following the
end of the Plan Year in which the contribution is accrued,
notwithstanding any absence of profits of Company.
No repayment by any Participant and no Restoration Amount shall
constitute Annual Additions under the Plan.
It shall be the duty of the Plan Administrator to give timely
notification to any rehired Employee, if such Employee is eligible to
make repayment, of his right to make repayment.
In the event a restoration of a Participant's account following
forfeiture occurs, service performed both prior to and subsequent to
the forfeiture shall be credited, to determine his vested interest in
his entire account derived from Company contributions.
If an Employee has the right to repay a distribution, service
performed prior to forfeiture may not be disregarded, whether or not
repayment is made, for purposes of determining the Participant's
vested interest in account allocations made subsequent to the date of
forfeiture.
If an Employee is rehired prior to a 1 year Break in Service, and if
no distribution has been made to such Employee in accordance with
Subparagraph 8.1(b), for purposes of determining the Employee's vested
interest in both his pre-termination and post-termination account
allocations under the Plan, service performed prior to termination
shall be taken into account.
If an Employee completes a Year of Service after a Break in Service
consisting of 5 or more consecutive 1 year Breaks in Service, whether
or not a distribution has been made to such Employee, for purposes of
determining the Employee's vested percentage in his account allocated
to him before such break, post-break Years of Service shall not be
credited, but pre-break Years of Service shall be credited to
determine the Employee's vested percentage in post-break account
allocations, unless the rule of parity provided in Subparagraph 8.2
(a) applies.
Separate accounts will be maintained for the Participant's pre-break
and post- break Employer derived account balance. Both accounts will
share in the earnings and losses of the fund.
VIII-4
8.2 For purposes of determining Years of Service under Paragraph 8.1 above,
all Years of Service with the Company are to be credited for purposes of
vesting, except:
(a) Years of Service prior to any period of consecutive 1 year Breaks in
Service, if the Employee was not vested in benefits deriving from
Company Contributions at the time he incurs a period of consecutive 1
year Breaks in Service, and his number of consecutive 1 year Breaks in
Service equals or exceeds the greater of 5 or the aggregate number of
his Years of Service, whether or not consecutive, completed before
such period of consecutive 1 year Breaks in Service.
(b) Years of Service prior to any period of consecutive 1 year Breaks in
Service, until the Participant has completed 1 Year of Service after
such period.
(c) Years of Service during any period for which the Company did not
maintain this Plan or a predecessor plan.
(d) Years of Service completed by an Employee before he attains age 18.
8.3 The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period may elect to
have his nonforfeitable percentage computed under the Plan without regard to
such election. Then such Participant shall not be subject to the new vesting
schedule. The Participant's election period shall commence on the adoption date
of the amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendments,
(2) the effective date of the amendment, or;
(3) the date the Participant receives written notice of the amendment from
the Employer or Administrator.
8.4 A Participant having at least 5 Years of Service with the Company,
prior to the expiration of the election period described below, may elect to
have his vested portion computed under the Plan, without regard to any
subsequent amendment to the vesting schedule. An amendment to the vesting
schedule includes any amendment which directly or indirectly affects the
computation of the vested percentage of an Employee's account balance, and
includes any change resulting from the operation of Paragraph 18.4. Such an
election shall be irrevocable, and must be filed with the Plan Administrator no
later than 60 days after the day
VIII - 5
the Plan amendment is adopted, or becomes effective, or the Participant is
issued written notice of the amended vesting schedule by the Plan Administrator
(whichever last occurs). In the event that a Participant makes the election as
hereinabove provided, the vesting schedule in effect prior to the amendment of
the vesting schedule shall apply to determine the vested percentage of such
participant's account.
Notwithstanding the above, no election shall be permitted if the vesting
schedule in effect prior to the amendment did not satisfy the requirements of
Internal Revenue Code Section 411(a)(2), unless under such schedule all
Participants are at least 50 percent vested after 10 Years of Service and 100
percent vested after 15 Years of Service. Furthermore, no election shall be
allowed to any Participant whose vested percentage under the Plan, as amended,
cannot be less at any time than such percentage determined without regard to
such amendment.
If the Plan is or becomes top-heavy in any Plan Year beginning after December
31, 1983, the provisions of Article Eighteen will supercede any conflicting
provisions in the Plan.
8.5 Any Participant who has terminated employment or who is no longer a
member of an eligible class of Employees, and who is entitled to a deferred
vested benefit under the Plan, and who has not received a distribution of such
benefit by the end of the Plan Year following the Plan Year in which such
termination of employment or eligibility occurred, shall be given notification
of the following by the Plan Administrator: the amount of his vested benefit,
the amount of his pre-retirement death benefit, the Normal Retirement Date of
the Plan, any benefits which are forfeitable if the Participant dies before a
certain date, and such other information as may be prescribed by regulations
issued by the Secretary of the Treasury or his delegate.
VIII - 6
ARTICLE NINE
PAYMENT OF BENEFITS
9.1 When a Participant's employment is terminated, the Plan Administrator
shall determine his vested accrued benefit. The provisions of this Article shall
apply to a Participant who is vested in amounts attributable to employer
contributions, employee contributions (or both) at the time of death or
distribution. For purposes of this Article, Vested Accrued Benefit shall mean
the value of the Participant's vested accrued benefit derived from employer and
employee contributions (including rollovers). If the full amount of his vested
interest is not to be distributed immediately to the Participant, the Plan
Administrator shall cause such Participant's interest to continue to be
separately accounted for on the books and records of the Plan. Until the full
amount of his vested interest shall have been distributed to the Participant in
accordance with the terms hereof, there shall be added to the balance of such
Participant's account the income earned by his account. The Plan Administrator
may direct the trustee to place the value of such account in one or more
federally insured bank or savings and loan accounts (including certificate of
deposit accounts), in the name of the Trustee, in trust for said Participant, in
which case the interest shall be credited to his account at such times as are
provided by the account but at least annually. In the absence of such direction,
Trustee, in its discretion, shall invest the account proportionately as Trustee
determines, and income and loss shall be allocated as provided in Subparagraph
4.5(b). The Trustee may charge against such account a prorata portion of the
fees and expenses incurred in the administration of the Plan.
9.2 Unless the Participant elects otherwise, distribution of benefits will
begin no later than the 60th day after the latest of the close of the Plan year
in which:
(a) the Participant attains age 65 (or Normal Retirement Age, if earlier),
(b) occurs the 10th anniversary of the year in which the Participant
commenced participation if the Plan, or
(c) the Participant terminates service with the Employer
All distributions must commence by the required beginning date.
(1) General rule. The required beginning date of a Participant is the
first day of April of the calendar
IX-1
year following the calendar year in which the Participant attains
age 70 1/2.
(2) Transitional rules. The required beginning date of a Participant
who attains age 70 1/2 before January 1, 1988, shall be
determined in accordance with (a) or (b) below:
(a) Non-5-percent owners. 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.
(b) 5-percent owners. 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.
The required beginning date of a participant who is not a 5-percent owner
who attains age 70 1/2 during 1988 and who has not retired as of January 1,
1989, is April 1, 1990.
(a) 5-percent owner. A participant is treated as a 5-percent owner
for purposes of this section 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.
(b) Once distributions have been to a 5-percent owner under this
section, they must continue to be distributed, even if the
participant ceases to be a 5-percent owner in a subsequent year.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable
within the meaning of Article Nine of
IX-2
this Plan, shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this section.
Trustee may make payments at an earlier date than herein above set forth,
for reasons of death, disability, early retirement or termination of
service; provided, however, that all Participants shall be treated alike
under like circumstances.
A Participant may make an election to defer commencement of payment of
benefits beyond the latest of the dates given above, provided that the
election is made in writing, signed by the Participant, and submitted to
the Plan Administrator prior to the close of the Plan Year following which
payment of benefits would otherwise commence. If payment is to be other
than in the form of a qualified joint and survivor annuity, the decision of
the Participant as to the form in which the benefit shall be payable shall
be required as provided in Subparagraph 9.3(d). In no event may an election
be made which would violate the restrictions contained in Subparagraph
9.3(d) or which would defer commencement of benefits beyond April 1st of
the calendar year following the calendar year in which he attains age 70
1/2.
If a Participant has separated from service with a vested benefit before
the first day of the next Plan Year after attaining his Early Retirement
Date, he is entitled at that date to receive a benefit equal to the benefit
to which he would be entitled at the Early Retirement Date.
9.3 The Plan Administrator shall take action as may be necessary to provide
a settlement of Participant's account. All modes of settlement, basic and
optional, are available to Participants or Beneficiaries under Articles V, VI
and VII as provided herein. Payments made under Article VIII shall be in the
form of complete lump sum payments only.
(a) The basic mode of settlement for a Participant married on the "annuity
starting date" and who does not die before the "annuity starting date"
shall be a qualified joint and survivor annuity contract, providing
for non-increasing payments of an actuarially equivalent value of the
Participant's vested Account Balance. Benefits will be distributed in
the form of a qualified joint and survivor annuity to a married
Participant, unless both the Participant and his spouse elect in
writing not to have his benefits paid in that form. If the Participant
is unmarried, benefits will be provided in the form of an annuity for
the life of the Participant, unless the Participant elects in writing
not to receive benefits in that form. The election must comply with
the provisions of
IX-3
this Section as if it were an election to waive the qualified joint
and survivor annuity by a married Participant, but without the spousal
consent requirement.
A qualified joint and survivor annuity is an annuity for the life of
the Participant, with a survivor annuity for the life of his spouse,
which is not less that 50 percent and not greater than the 100 percent
of the annuity payable during the joint lives of the Participant and
spouse, and which is the amount of benefit which can be purchased with
the Participant's vested account balance. The percentage of the
survivor annuity under the Plan shall be 50 percent (unless a
different percentage is elected by the Employer in the Plan).
Any election to waive the joint and survivor annuity must be made by
the Participant in writing during the election period and be consented
to by the Participant's spouse. If the spouse is legally incompetent
to give consent, the spouse's legal guardian, even if such guardian is
the Participant, may give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be changed without
spousal consent (unless the consent of the spouse expressly permits
designations by the Participant without the requirement of further
consent by the spouse). Such spouse's consent shall be irrevocable and
must acknowledge the effect of such election and be witnessed by a
Plan representative or a notary public. Such consent shall not be
required if it is established to the satisfaction of the Administrator
that the required consent cannot be obtained because there is no
spouse, the spouse cannot be located, or other circumstances that may
be prescribed by Regulations. The election made by the Participant in
writing without the consent of the spouse may be revoked by the
Participant in writing without the consent of the spouse at any time
during the election period. The number of revocations shall not be
limited. Any new election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be binding on a new
spouse.
For purposes of this Section, the "annuity starting date" means the
first day of the first period for which an amount is paid as an
annuity, or, in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which entitle
the Participant to such benefit.
(b) During the election period described below, both the Participant and
his spouse, if any, acting jointly, or his surviving spouse if the
Participant is deceased, may elect
IX-4
in writing not to receive benefits under the Plan in the basic mode of
settlement. In the event that both the Participant and his spouse, if
any, or the surviving spouse, make the above election, any death
benefits under the Plan shall be paid as provided in Article VII, and
any retirement benefits shall be paid as provided under Subparagraph
9.3(d) below.
The Plan Administrator shall furnish to each Participant or surviving
spouse, in writing, no less that 30 days and no more than 90 days
before the "annuity starting date", the following basic information:
A general description of the terms and conditions of the
qualified joint and survivor annuity, or a single life annuity,
if applicable; the circumstances in which it will be provided
unless the Participant and his spouse, if any, or the surviving
spouse, elect in writing not to have benefits provided in that
form; the rights of the Participant's spouse with respect to such
an election; the availability of such election (and the right to
revoke such an election); a general explanation of the relative
financial effect on a Participant's or surviving spouse's benefit
of such an election (or its revocation); and the availability of
additional information, to be furnished within 30 days from the
date of the participant's or surviving spouse's written request,
on the specific terms and conditions of the qualified joint and
survivor annuity, or the single life annuity, if applicable, and
the specific financial effect on the particular participant or
surviving spouse of making the above election (or revoking it).
The Participant or surviving spouse must make such written
request for additional information so that it be received by the
Plan Administrator no later than 90 days prior to the annuity
starting date.
Such basic information may be furnished to a participant or surviving
spouse at any time, but even if the information has been previously
provided, it must be furnished by mailing or personal delivery so as
to be received on or about the 180th day before the Participant or
surviving spouse reaches the Annuity Starting Date.
The election period shall be the 90 day period ending on the Annuity
Starting Date.
Any election made by the participant or his surviving spouse, as the
case may be, may be revoked in writing during the applicable election
period, and after such
IX-5
election has been revoked, another election may be made during the
applicable election period.
All distributions required under this Article shall be determined and
made in accordance with the Income Tax 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 Income Tax
Regulations. Code Section 401(a)(9) will override any inconsistent
distribution option contained in the Plan.
Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
(c) Unless both a married Participant and his spouse, or a surviving
spouse, if the Participant is deceased, elect in writing during the
period described below not to have survivor benefits provided in this
form, a qualified preretirement survivor annuity will be payable to
the Participant's spouse for life, upon the death of the Participant,
in the event that he is vested and dies before the Annuity Starting
Date. In the event that both the Participant and his spouse acting
jointly, or the surviving spouse, make the above election, any death
benefits under the Plan shall be paid as provided in Article VII, and
any retirement benefit shall be paid as provided in Subparagraph
9.3(d) below. The Participant's spouse may direct that payment of the
pre-retirement survivor annuity commence within a reasonable period
after the Participant's death. If the spouse does not so direct,
payment of such benefit will commence at the time the Participant
would have attained the later of his Normal Retirement Age or age 62.
However, the spouse may elect a later commencement date. Any
distribution to the Participant's spouse shall be subject to the rules
specified in Section 9.3. The qualified pre-retirement survivor
annuity shall be an annuity for the life of the surviving spouse of
the Participant, in an amount which can be provided by the
Participant's death benefit, but not less in present value than the
amount the spouse would have received, had the Participant retired on
the day before his death, and had commenced receiving benefits under a
qualified joint and survivor annuity, which provided a survivor
annuity in an amount equal to the amount of the annuity payable during
the joint lives of the Participant and his spouse.
IX-6
In no event, however, shall the early survivor annuity be in an amount
greater than that which can be purchased by the present value of the
Participant's Account Balance, at the time for commencement of payment
of such survivor benefit, less the Cash Value at such time of any
contract payable to a named person (other than the Trustee) who is not
the spouse of the Participant, provided that the spouse has consented
to such designation.
In the case of a qualified pre-retirement survivor annuity as
described in Section 9.3(c) of this Article, the Plan Administrator
shall provide each Participant within the applicable period for such
Participant, a written explanation of the qualified pre-retirement
survivor annuity in such terms and in such a manner as would be
comparable to the explanation provided for meeting the requirements of
Section 9.3(b) applicable to a qualified joint and survivor annuity.
Election period shall mean the period which begins on the first day of
the plan year in which the participant attains age 35 and ends on the
date of the participant's death. If a participant separates from
service prior to the first day of the plan year in which age 35 is
attained, with respect to the account balance as of the date of
separation, the election period shall begin on the date of separation.
Pre-age 35 waiver: A participant who will not yet attain age 35 as of
the end of any current plan year may make a special qualified election
to waive the qualified preretirement survivor annuity for the period
beginning on the date of such election and ending on the first day of
the plan year in which the participant will attain age 35. Such
election shall not be valid unless the participant receives a written
explanation of the qualified preretirement survivor annuity in such
terms as are comparable to the explanation required under section 5.1.
Qualified preretirement survivor annuity coverage will be
automatically reinstated as of the first day of the plan year in which
the participant attains age 35. Any new waiver on or after such date
shall be subject to the full requirements of this article.
In the event the death benefit is not paid in the form of a
pre-retirement survivor annuity, it shall be paid to the Participant's
Beneficiary by one of the optional methods, as elected by the
Participant (or if no election has been made prior to the
Participant's death by his Beneficiary), subject to the rules
specified in Section 9.3(d).
IX-7
Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder. If the
death benefit is paid in the form of a pre-retirement survivor
annuity, then distributions to the Participant's surviving spouse must
commence on or before the later of: (1) December 31st of the calendar
year immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If it is determined
pursuant to Regulations that the distribution of a Participant's
interest has begun and the Participant dies before his entire interest
has been distributed to him, the remaining portion of such interest
shall be distributed at least as rapidly as under the method of
distribution selected pursuant to Section 9.3 as of his date of death.
If a Participant dies before he has begun to receive any distributions
of his interest under the Plan or before distributions are deemed to
have begun pursuant to Regulations then his death benefit shall be
distributed to his Beneficiaries by December 31st of the calendar year
in which the fifth anniversary of his date of death occurs.
However, the 5-year distribution requirement of the preceding
paragraph shall not apply to any portion of the deceased Participant's
interest which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion may, at the election of the
Participant (or the Participant's designated Beneficiary), be
distributed over a period not extending beyond the life of such
designated Beneficiary: the life of such designated Beneficiary (or
over a period not extending beyond the life expectancy of such
designated Beneficiary) provided such distribution begins not later
than December 31st of the calendar year immediately following the
calendar year in which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the Participant's
death) is his Beneficiary, the requirement that distributions commence
within one year of a Participant's death shall not apply. In lieu
thereof, distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the calendar
year in which the Participant died; or (2) December 31st of the
calendar year in which the Participant would have attained age 70 1/2.
If the surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this Section shall
apply as if the spouse was the Participant.
IX-8
For purposes of Section 9.3(c), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement
must be made no later than December 31st of the calendar year
following the calendar year of the Participant's death. Except,
however, with respect to a designated Beneficiary who is the
Participant's surviving spouse, the election must be made by the
earlier of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died or, if
later, the calendar year in which the Participant would have attained
age 70 1/2; or (2) December 31st of the calendar year which contains
the fifth anniversary of the date of the Participant's death. An
election by a designated Beneficiary must be in writing and shall be
irrevocable as of the last day of the election period stated herein.
In the absence of an election by the Participant or a designated
Beneficiary, the 5-year distribution requirement shall apply.
Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
death benefits paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
(d) If the married Participant and his spouse elect not to receive payment
in the form of a qualified joint and survivor annuity, or if the
Participant is not married at the time benefits commence, and has
elected not to receive benefits in the form of a life annuity, the
Plan Administrator, upon consultation with the Participant, shall
provide a settlement from among the optional modes of settlement
provided below, and in conformity with the following requirements:
(1) All modes of settlement, both basic and optional, shall have an
equal present actuarial value at the time of commencement of
payment.
(2) No optional settlement shall be allowed for payments due under
Article V and VI, under which the actuarial present value of the
payments to be made to the Participant and his Beneficiary,
except in the case of a distribution over the joint life and last
survivor expectancy of the Participant and his spouse, is not
more than 50 percent of the actuarial present value of the total
payments to be made to the Participant and his Beneficiaries. No
insurance
IX-9
contract distributed as provided below may permit the time,
amount or duration of payment to be not in conformity with the
above restriction.
(3) At any time after payments commence, but before the April 1st of
the calendar year following the calendar year in which he attains
age 70 1/2, a Participant may request, and the Plan Administrator
may permit, a change in the optional mode of settlement.
The following optional modes of settlement are provided:
(1) Payment of all or (in the case of (5) below) part of the
Participant's vested accrued benefit in a lump sum.
(2) Payments over the lifetime of the Participant or the life of the
Participant and his Beneficiary.
(3) Payments in annual, semi-annual, quarterly or monthly
installments over a period certain not extending beyond the life
expectancy of the Participant, or beyond the joint life and last
survivor expectancy of the Participant and his Beneficiary, with
such expectancy being computed by use of the expected return
multiples contained in Treasury Regulation Section 1.72-9, or, in
the case of payments by Insurer, the period computed by use of
the mortality tables utilized under the contract. For purposes of
this subsection (3) and subsection (4) below, the life expectancy
of the Participant and his Beneficiary (if the Beneficiary is the
spouse of the Participant) may be redetermined annually.
(4) In the form of a non-transferable annuity Contract providing
payments over a period described in (2) or (3) above, in either
non-increasing payments, or at a rate which satisfies the
requirements contained in subparagraph (e) below.
(5) Any combination of the above.
(e) In the event a distribution is to be made to a minor, then the Plan
Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible
adult with whom the Beneficiary maintains his residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or
Gift to Minors Act, if such is permitted by the laws of the state in
which said Beneficiary resides. Such a payment to the legal guardian,
custodian or parent of a
IX-10
minor Beneficiary shall fully discharge the Trustee, Employer, and
Plan from further liability on account thereof.
(f) "Spouse", for purposes of any spouse survivor benefits payable, under
any joint and survivor annuity mode of settlement available under this
Plan, shall mean "the Spouse of the Participant on the date payment of
benefits commences."
(g) Notwithstanding anything to the contrary contained herein, no
qualified joint and survivor annuity, and no qualified pre-retirement
survivor annuity will be paid, and no optional mode of settlement will
be available if the present value of such benefit does not exceed
$3,500 prior to the Annuity Starting Date. Such value will be
distributed in a lump sum immediately upon determination of the amount
due on account of retirement (including disability retirement) or
death. If the present value of such benefit exceeds $3,500, the
written consent of the Participant and his spouse, if any, is required
before the commencement of distribution of such benefits.
Actuarial equivalence shall be determined by the Plan Administrator on
the basis of consistently applied reasonable actuarial factors. Such
factors shall be the same for all Participants retiring during the
same Plan Year, but they may be adjusted from year to year in order to
remain reasonable. But in no event will a rate of interest be used
greater than the interest rate which would be used (as of the date of
distribution) by the Pension Benefit Guaranty Corporation for purposes
of determining the present value of a lump sum distribution on plan
termination.
Notwithstanding the foregoing, only the participant need consent to
the commencement of a distribution in the form of a qualified joint
and survivor annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a qualified
joint and survivor annuity is not required with respect to the
participant pursuant to section IX of the plan, only the participant
need consent to the distribution of an account balance that is
immediately distributable.) 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 this plan if the plan
does not offer an annuity option (purchasing from a commercial
provider) and if the employer or any entity within the same controlled
group as the employer does not
IX-11
maintain another defined contribution plan (other than an employee
stock ownership plan as defined in section 4975(e)(7) of the Code),
the participant's account balance may, without the participant's
consent, be distributed to the participant. However, if any entity
within the same controlled group as the 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 balance will be transferred, without the participant's
consent, to the other plan if the participant does not consent to an
immediate distribution.
An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains or would have attained if not
deceased) the later of Normal Retirement Age or age 62.
For purposes of determining the applicability of foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of Section
72(o)(5)B) of the Code.
9.4 All payments hereunder shall be made in cash, securities or such other
property as the Plan Administrator may determine in its sole and absolute
discretion.
9.5 A claim for benefits must be filed before payment of retirement,
disability, or death benefits will commence. A claim shall be deemed filed when
a Participant, or Beneficiary, in the case of death benefits, or their
authorized representative, requests, orally or in writing, payment of benefits
due under the Plan. The claim may be filed with the Plan Administrator or any
officer of the Company; or if the Company has an organizational unit which
customarily handles Employee benefit matters, with any person employed in such
unit. In the event that a claim for benefits is filed, the Plan Administrator,
within 90 days after the claim is filed, shall give notice of the decision on
the claim; and if notice on the denial of a claim is not furnished, and the
claim has not been granted within the 90 day claims proceeding period, the claim
shall be deemed denied for the purpose of processing to the review stage as
hereinafter described.
(a) The 90 day time period mentioned above may be extended by the Plan
Administrator for an additional 90 days, if
IX-12
special circumstances require an extension of time for processing the
claim. If an extension is required, the Plan Administrator shall
furnish written notice of the 90 day extension to the claimant prior
to the termination of the initial 90 day period. The extension notice
shall indicate the special circumstances requiring an extension of
time and the date by which the Plan Administrator expects to render
the final decision.
(b) The Plan Administrator shall provide to every claimant who is denied a
claim for benefits written notice setting forth:
(1) The specific reason or reasons for the denial,
(2) The specific reference to the pertinent Plan provisions on which
the denial is based,
(3) A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why
such material or information is necessary, and
(4) An explanation of the Plan's claim review procedure.
(c) In the event that the claim of the Participant or Beneficiary is
denied, the claimant or his duly authorized representative may request
a review of the denied claim by means of a written application for
review delivered to the Plan Administrator. Pursuant to this right to
review, the claimant or his duly authorized representative may review
pertinent documents and submit issues and comments in writing.
(d) Any request for review of a denied claim must be filed no later than
60 days after the earlier of receipt by the claimant of written
notification of denial of a claim, or the expiration of the 90 day
claims processing period, including any extension thereof.
(e) In the event a request for review has been made as herein above
provided, the Plan Administrator shall make a decision on the request
for review within 60 days after the receipt by the Plan Administrator
of the request for the review, unless special circumstances require an
extension of time for processing the review, in which case the Plan
Administrator shall render a decision as soon as possible, but in no
event later than 120 days after the Plan Administrator has received
the request for review.
IX-13
If an extension is required, the Plan Administrator shall furnish
written notice of the extension to the claimant prior to the
commencement of the extension. The decision on review shall be
furnished to the claimant in writing within the time for review and
shall include specific reasons for the decision, as well as specific
references to the pertinent Plan provisions on which the decision is
based.
9.6 If the Plan Administrator is unable after diligent search to locate a
Participant or Beneficiary to whom a benefit is due under the provisions of this
Plan, such benefit shall be forfeited on the last day of the Plan Year in which
such search is concluded, and such forfeiture shall be administered in
accordance with Article IV. If a claim is made subsequently by such Participant
or Beneficiary for the forfeited benefit, such benefit shall be restored in
full.
9.7 The Plan Administrator shall, when making a distribution qualifying for
rollover to an eligible retirement plan, provide to the recipient a written
explanation of the provisions under which such distribution will not be subject
to tax, if transferred within 60 days after the date of distribution, and, if
applicable, the provisions relating to 10 year averaging and capital gains
treatment of lump sum distributions.
IX-14
ARTICLE TEN
SPENDTHRIFT CLAUSE
10.1 The provisions of this Plan are intended as personal protection for
the Participant. A Participant shall not have any right to assign, anticipate or
hypothecate any assets held for his benefit, including amounts credited to his
account, except as security for a loan from the Plan to the Participant. The
benefits under this Plan shall not be subject to seizure, legal process or be in
any way subject to the claim of the Participant's creditors, including, without
limitation, any liability for contracts, debts, torts, alimony or support of any
relatives, except that the Plan has the right to recover overpayments of
benefits previously made to a Participant. None of the Plan's benefits or the
Trust's assets shall be considered an asset of the Participant in the event of
insolvency or bankruptcy. However, the proscription above does not apply to
Qualified Domestic Relations Orders as defined in Code Section 414(p).
10.2 Notwithstanding the provisions of this Article, the Plan Administrator
and/or Trustee is hereby authorized to comply without objection to any Qualified
Domestic Relations Order.
10.3 A Domestic Relations Order is defined as any judgment, decree or order
(including approval of a property settlement agreement) which relates to the
provision of child support, alimony payments, or marital property rights to a
spouse, former spouse, child or other dependent of a Participant (an Alternate
Payee), and is made pursuant to a State Domestic Relations Law (including a
Community Property Law).
10.4 A Qualified Domestic Relations Order is a Domestic Relations Order
which establishes or assigns to an Alternate Payee the right to receive all or a
portion of the benefits payable to a Participant under the Plan, and which meets
the following conditions:
(a) The Order clearly specifies:
(i) The name and last known mailing address (if any) of the
Participant and the name and mailing address of each Alternate
Payee covered by the order;
(ii) The amount or percentage of the Participant's benefits to be paid
by the Plan to each such Alternate Payee, or the manner in which
such amount or percentage is to be determined;
X-1
(iii) The number of payments or period to which such order applies;
and
(iv) Each plan to which such order applies.
(b) The Order does not require the Plan to provide:
(i) Any type or form of benefit, or any option, not otherwise
provided under the Plan, except as provided in Paragraph 10.5
below;
(ii) Increased benefits (determined on the basis of actuarial value);
or
(iii) Payment of benefits to an Alternate Payee which are required to
be paid to another Alternate Payee under another order previously
determined to be a Qualified Domestic Relations Order.
10.5 A Qualified Domestic Relations Order may require that payments or
benefits be made to an Alternate Payee on or after the date the Participant
attains (or would have attained) the date which is 10 years before Normal
Retirement Age, even if still employed, as if the Participant had retired on the
date on which such payment is to begin under such order (but taking into account
only the present value of benefits earned to such date, and not taking into
account the present value of any employer subsidy for early retirement), and in
any form in which such benefits may be paid under the plan to the Participant
(other than in the form of a joint and survivor annuity with respect to the
Alternate Payee and her subsequent spouse). In determining present value, the
interest assumption used shall be as specified in any definition of actuarial
equivalence or, if none, 5 percent.
10.6 A Qualified Domestic Relations order may provide that (a) a
Participant's former spouse shall be treated as a surviving spouse of such
Participant for purposes of the qualified joint and survivor and qualified
pre-retirement survivor provisions of the Plan, and (b) such surviving spouse
shall be treated as meeting any minimum marriage requirements for such benefits,
if married for at least 1 year.
10.7 The Plan Administrator shall, within 30 days, notify the Participant
and any other Alternate Payee of the receipt of a Domestic Relations Order, and
the Plan's procedures for determining whether such order is a Qualified Domestic
Relations Order. Said procedure shall consist of requesting within 30 days of
receipt of such order, and obtaining within 30 days therefrom, an opinion from
counsel on such matter. Within 90 days of
X-2
receipt of the order, unless the Plan Administrator requests a second opinion,
in which case the period of notification shall be extended for an additional 90
days, the Plan Administrator shall either adopt an opinion of counsel as his
own, or reject it in his sole discretion, and notify the Participant and each
alternate payee of his determination. Any party affected by this determination
may appeal the Plan Administrator's determination, and such appeal shall be
subject to the provisions contained in Paragraph 9.5 herein pertaining to
appeals of claim determinations.
10.8 During any period in which it is being determined whether or not a
Domestic Relations Order is a Qualified Domestic Relations Order, the Plan
Administrator shall segregate in a separate account the amounts which would have
been payable to the Alternate Payee during such period if the order had been
determined to be a Qualified Domestic Relations Order. If within 18 months the
order (or modification thereof) is determined to be a Qualified Domestic
Relations Order, the Plan Administrator shall pay the segregated amounts (plus
any interest thereon) to the person or persons entitled thereto, but if within
said period the issue is not resolved, or if it is determined that the order is
not a Qualified Domestic Relations Order, the Plan Administrator shall pay or
credit the segregated amounts (plus any interest thereon) to the person or
persons who would have been paid or credited if there had been no Order. Any
determination made after the 18 month period that an order is a Qualified
Domestic Relations Order shall be applied prospectively only.
X-3
ARTICLE ELEVEN
INSURANCE CONTRACTS
11.1 Trustee shall, within 60 days after being directed by the Plan
Administrator, by uniform procedures applicable to all Participants, and with
due regard to the preference of each Participant, purchase paid-up or annual
premium life insurance, endowment, retirement income or annuity Contracts for
the benefit of each Participant. The terms of any annuity Contract purchased and
distributed by the Plan to a Participant or spouse shall comply with the
requirements of the Plan. Each Participant has the right to direct the Plan
Administrator to have the Trustee purchase Contract(s) on his life, to specify
the amount of premium on such Contract and type of Contract (subject to the
limitations of this Article and the underwriting limitations of the Insurer
selected by Trustee), or to waive any such purchase contemplated by the Plan
Administrator.
The Trustee shall apply for and will be the owner of any insurance contract
purchased under the terms of this plan. 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 Nine, Joint and Survivor Annuity Requirements, if applicable. 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.
(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 purchased, 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.
XI-1
(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.
If any Company contributions to any Participant's account are applied to pay
premiums on both ordinary life insurance and term life insurance policies, the
total of the term life insurance premiums and one-half of the ordinary life
insurance premiums shall be less than 25 percent of the total Company
contributions and forfeitures allocated to such Participant's account. Solely
for purposes of computing the limitations contained in this paragraph,
contributions made by Company prior to the end of the Plan Year shall be deemed
allocated to specific Participant accounts. [Notwithstanding anything
hereinabove to the contrary, amounts credited to a Participant's Qualified
Voluntary Employee Contribution Account shall not be applied to the purchase of
life insurance contracts.]
The limits contained in this Paragraph on the aggregate amount of the premiums
paid on all ordinary and term life insurance shall apply only to the use of
trust funds accumulated for 2 years or less after their allocation to a
participant's account. No limits apply to trust funds accumulated more than 2
years.
11.2 If at any time the Trustee shall be unable to pay all or any portion
of the premiums for any reason, the Trustee shall be empowered in his sole and
absolute discretion to borrow prorata all or any portion of the required payment
from the Insurer on the security of the Contract, or to convert the Contract
into a paid-up policy, or to cash in the Contract.
11.3 Trustee shall convert the entire value of any life insurance Contract
at or before retirement into cash or an annuity to provide periodic income, so
that no portion of such value may be used to continue lifetime insurance
protection beyond retirement, or Trustee may distribute the Contract to the
Participant. If a Participant terminates employment prior to retirement, such
conversion shall take place no later than one year after the date any benefits
would, if forfeitable, be forfeited pursuant to Paragraph 8.1, but if a
distribution is made to such Participant prior to that time, the Trustee shall,
if directed by the Plan Administrator, distribute the Contract to the
Participant. However, any annuity Contract distributed here from must be
nontransferable. In the event that the Participant is less than 100% vested in
his account balance at the time of distribution, the Trustee shall, if so
directed by the Plan Administrator, allocate the Participant's vested interest
first to the cash value of the Contract, after determining the total dollar
value of his vested interest, with any value of his vested interest in excess of
the cash value of
XI-2
the Contract to be allocated to the remaining portion of his account. If after
making the above allocation, the Participant's vested interest in the contract
is less than the total cash value, the Trustee shall, as directed by the Plan
Administrator, either take a loan against the Contract for the amount of the
non-vested cash value and then distribute the Contract, or sell the Contract to
the Participant for an amount equal to the difference between the total cash
value and the participant's vested interest therein.
In the event the Contract has no cash value, the Trustee shall, when
directed by the Plan Administrator, distribute the Contract to the terminated
Participant if he so requests, whether or not such Participant is vested in all
or any portion of his account.
XI-3
ARTICLE TWELVE
RIGHT TO ALTER, AMEND OR TERMINATE TRUST
12.1 The Company shall have the right at any time to discontinue its
contributions hereunder, and to terminate or partially terminate this Plan and
Trust. In the event that Company shall be legally dissolved, or declared
bankrupt, shall make a general assignment for the benefit of creditors, or merge
into or with another company which shall not assume the obligations of this
Agreement, this Plan shall automatically terminate.
In the event the Plan and Trust is automatically terminated as provided
above, or in the event that subsequent to the voluntary termination of the plan
by Company, any of the events causing automatic termination occur prior to the
final and complete distribution of assets from the Trust, Trustee shall
automatically be vested with all rights, powers and duties otherwise reserved in
this Agreement and Trust to Company, Plan Administrator and Named Fiduciary,
including but not limited to the right to amend this Agreement and Trust, to
liquidate the Trust, and to continue the Plan and Trust in force.
12.2 The Company reserves the right to amend this Plan and Trust in writing
at any time without the consent of any Participant or Beneficiary; provided,
however, that no amendment to this Plan or Trust shall deprive any Participant
or Beneficiary (including any Participant or Beneficiary who is already
receiving benefits) of any vested interest herein, except as may be allowed by
Federal Law, nor shall such amendment increase the duties or obligations of the
Trustee herein except with his consent. Further provided, that to the extent
required by Federal Law, subject to regulations issued by the Secretary of the
Treasury, no amendment to this Plan and Trust shall be permitted which has the
effect of: (a) eliminating or reducing an early retirement benefit or a
retirement-type subsidy for a Participant who satisfied (either before or after
the amendment) the pre-amendment conditions for the benefit or subsidy, or (b)
eliminating an optional form of benefit, in both cases with respect to benefits
attributable to service before such amendment.
12.3 This Plan may not merge or consolidate with, or transfer assets or
liabilities to, any other plan unless each Participant in the Plan 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 that
such Participant would have been entitled to receive immediately
XII-1
before the merger, consolidation or transfer if the Plan had then terminated.
12.4 In the event of partial or complete termination of this Plan and
Trust, or upon the complete discontinuance of Company contributions under the
Plan, the Trustee shall, when so directed by the Plan Administrator, distribute
the assets of the fund to the Participants affected or their Beneficiaries. The
Plan Administrator may but is not required to grant each Participant the right
to elect in an irrevocable election to receive a complete distribution from his
account. Failure to elect such a distribution shall constitute an irrevocable
election to defer distribution until the times specified with regard to death,
disability and retirement payments as provided in this Plan or in any successor
Plan, and Trustee is hereby precluded from making distributions at any earlier
time to any Participant who fails to elect complete distribution and whose
employment with Company has not terminated. Said election shall take place
during a period of time, not exceeding 60 days, prescribed by the Plan
Administrator and communicated to Plan Participants. Alternatively, the Plan
Administrator may direct that complete distributions be made to all participants
affected or their Beneficiaries, or that all distributions be made as set forth
in the other provisions of the Plan and Trust. Distributions shall be made in
cash, unless the Plan Administrator directs the Trustee to make distributions in
securities or other property (including Contracts on the lives of Participants).
In the absence of any direction to make distribution to all Participants and/or
Beneficiaries, the Plan and Trust will continue in force, and distributions will
be made in the same manner and under the same conditions as set forth in the
Plan and Trust, and the Plan and Trust will not terminate until all the assets
of the Trust have been distributed. It is the intent of the parties that the
exempt status of the Trust under Section 501 of the Internal Revenue Code of
1986, as amended, will continue.
12.5 Upon the date of termination of the Plan, partial termination of the
Plan, or complete discontinuance of contributions, the rights of each affected
Participant to the amount credited to his account at such time shall be fully
vested, except as provided in Article XVI. If any funds (other than Company
contributions or forfeitures not required to be allocated to meet the
liabilities of this Plan) have not been allocated prior to date of termination,
partial termination, or complete discontinuance of contributions, such funds
shall be allocated on the earlier of the date of liquidation of the Trust, or
the next regular allocation date pursuant to Paragraph 4.5, and subject to the
limitations provided in Paragraph 4.3. Any investment earnings and realized or
unrealized gains and losses subsequent to such allocation date shall likewise be
allocated
XII-2
pursuant to Paragraphs 4.5 and 4.3, at least annually and, in any event, as of
the date of final and complete distribution.
XII-3
ARTICLE THIRTEEN
LOANS
13.1 Trustee, upon application from any Participant or Beneficiary, in
accordance with a uniform nondiscriminatory policy, may make a loan or loans to
such Participant or Beneficiary.
13.2 Loans will be limited to the lesser of:
(i) 1/2 of the present value of the Participant's nonforfeitable
account balance (except that loans of up to $10,000 may be made
to participants if these loans are adequately secured and are not
in excess of the present value of the Participant's total accrued
benefit);
(ii) $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 all
loans from the Plan on the date the loan is made.
13.3 Loans must be made available to all Participants and Beneficiaries on
a reasonably equitable basis and the availability shall be communicated to all
Participants. Loans shall not be made available to Highly Compensated Employees
in an amount greater than that made available to other Employees.
13.4 A reasonable rate of interest shall be charged on each loan. What is
reasonable depends on factors such as the amount of loan, adequacy of security,
duration of loan, repayment schedule, current market conditions, variable or
fixed rate of interest, what is customary in similar arm's length transactions
in the community; ie, average rate charged by area commercial banks for the same
type of consumer loan, and other economic and time factors.
13.5 All loan agreements shall provide for repayment within five (5) years
from the date of the loan, unless the loan is used to acquire the Participant's
primary residence.
13.6 All plans of any affiliated employers and related businesses are to be
combined for the purpose of maximum limits on loans.
13.7 All loans must be evidenced by a written loan agreement signed by all
relevant parties to the loan and evidenced by a promissory note of the borrower
where the borrower personally
XIII-1
guarantees the repayment of the loan and secures the loan on the Participant's
account balance.
13.8 An assignment or pledge of any portion of the Participant's interest
in the Plan and a loan, pledge or assignment with respect to any insurance
contract purchased under the Plan will be treated as a loan.
13.9 A Participant's spouse must consent in writing for a Participant to
use any part of his account balance as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the 90 day period ending on
the date the loan is made. The consent must acknowledge the effect of the loan
and must be witnessed by a plan representative or notary public. The consent is
binding with respect to the loan for which it is given, on any subsequent
spouse. A new consent shall be required if the loan is revised, renegotiated,
renewed or extended.
13.10 Loans may not be made to Owner-Employees or Shareholder-Employees as
defined in Code Section 1379.
13.11 The loan document must provide for payments to be made at least
quarterly in a level amount, which will fully amortize the loan over its
duration.
13.12 The Plan Administrator may provide for loans to be considered an
asset of the Trust Fund or as an investment of the borrower's account. The Plan
Administrator shall act consistently in making this determination.
13.13 A loan will not be foreclosed and security attached before a
distributable event occurs under the Plan. Any loan outstanding at the time a
Participant receives a distribution, shall be repaid by offsetting the balance
due (plus accrued interest and any costs) against the amount to be distributed.
13.14 If a valid spousal consent has been obtained in accordance with
Section 13.8, and the Participant's spouse does not receive the Participant's
entire vested benefits, then the vested benefits shall be reduced by the balance
due before determining the benefit payable to the Participant's surviving
spouse.
XIII-2
ARTICLE FOURTEEN
TRUSTEE
14.1 The duties and responsibilities of the Trustee are limited to those
set forth in this Plan and Trust, and it shall be liable only for the
safeguarding and administration of the Trust principal in accordance with the
provisions of this Plan and Trust, except as otherwise provided by state or
federal law. If at any time there is more than one Trustee, all of them will
jointly manage and control the fund, unless the responsibilities, obligations
and duties specified in this Plan are allocated among them in accordance with
the procedure set forth below. The Trustee shall discharge its duties with
respect to the Plan solely in the interest of the Participants and the
Beneficiaries, and for the exclusive purpose of providing benefits to the
Participants and their Beneficiaries and defraying reasonable expenses of the
Plan by administering the Plan with the care, skill, prudence and diligence,
under the circumstances then prevailing, that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
14.2 The Trustee shall maintain full and complete records of the
administration of the Trust, and shall be responsible for the management of the
Trust operation and its administration.
The Company and Plan Administrator may examine such records from time to
time during business hours. A Participant may also examine such records, as they
relate to his interest in the Trust principal, at such time deemed reasonable by
the Trustee.
14.3 Within a reasonable time after each Plan Year, and within 90 days
after its removal or resignation, Trustee shall file with the Company and shall
certify the accuracy of an account of its administration of the Trust during
such year, or from the end of the preceding Plan Year to the date of removal or
resignation. Neither Company nor any other person shall be entitled to any
further accounting by Trustee, except as provided by law. Company may, in its
discretion, waive all or any part of such accounting.
14.4 To the extent permitted by the Employee Retirement Income Security Act
of 1974, Trustee shall be released from all liability to anyone as to any
transaction shown in a statement of account pursuant to Section 14.3, except
those as to which the Company shall, within 90 days after the Trustee's filing
of the account, file with Trustee a written statement setting forth in detail
the items in or with respect to such account to which
XIV-1
exception is taken. If such a statement is filed, Trustee shall, unless the
matter be compromised with the Company, file its account in any court of
competent jurisdiction for audit and adjudication.
14.5 Upon separate agreement between Trustee and Company, the fund may be
valued more frequently than annually, for purposes of determining benefits or
costs under the Plan. If such agreement is made, the provisions of Section 14.4
shall also apply with respect to each such valuation.
14.6 The Trustee shall act at the direction of the Company and the Plan
Administrator, and Company agrees to indemnify Trustee against any liability
imposed as a result of a claim asserted by any person or persons, with respect
to which Trustee acted in good faith at direction of Company or the Plan
Administrator. The Trustee is authorized on behalf of the Trust to execute the
applications and any other documents required by an Insurer issuing Contracts on
the lives of the Participants, and to exercise all of the rights, privileges and
powers under such Contracts. Written notification to an Insurer setting forth
the name of the Trustee hereunder shall be conclusive evidence for all purposes
that the party so named is Trustee hereunder at the date of such notification.
The signature of the Trustee shall be conclusive proof to the Insurer that the
application is being made for the proper Contract and is in accordance with the
terms of this Plan and Trust.
14.7 The Trustee may consult with any legal counsel even through counsel
for Company, with respect to the construction of the Plan and Trust, either as
to its duties thereunder or with respect to any legal proceedings or questions
of law, and will be fully protected with respect to any action taken or omitted
by it in good faith pursuant to the advice of such counsel. In addition, the
Company, at the request of or with the concurrence of the Trustee, may employ
such actuaries, accountants, specialists and other persons as the Company or
Trustee deems necessary or desirable in connection with the administration of
the Plan.
14.8 A Trustee shall not be liable, either individually or as Trustee, for
any losses resulting to the Plan arising from the acts or omissions on the part
of a Co-Trustee or Investment Manager to whom responsibilities, obligations and
duties have been allocated as to certain assets of the Fund. Any such allocation
of responsibilities among Trustees and/or the appointment of an Investment
Manager shall be made by the Named Fiduciary, and evidenced by a written
agreement executed by all of the Trustees, the Named Fiduciary and the
Investment Manager, if any. Except as stated in the foregoing, in addition to
any liability which the Trustee may have under any other section of
XIV-2
this Plan, the Trustee with respect to the Plan shall be liable for breach of
fiduciary duty of another Trustee; (1) if such Trustee participates knowingly
in, or knowingly undertakes to conceal, an act or omission of such other
Trustee, including knowing such act or omission is a breach; (2) if, by such
Trustee's failure to comply with the standards in performing its duties as set
forth in Paragraph 14.1 hereof, in the administration of such Trustee's specific
responsibilities which give rise to its status as a Trustee, it has enabled such
other Trustee to commit a breach; or (3) if such Trustee has knowledge of a
breach by such other Trustee, unless such Trustee makes reasonable efforts under
the circumstances to remedy the breach.
14.9 Trustee shall invest and reinvest the principal and income of the
trust and keep the same invested without distinction between the principal and
income.
14.10 Trustee shall have the following powers, in addition to the powers
customarily vested in the Trustee by law, and in no way in derogation thereof:
(a) With any cash at any time held by it, to purchase or subscribe
for any authorized investment, and to retain such authorized
investment in trust.
(b) To sell for cash or on credit, convert, redeem or exchange for
another authorized investment, or otherwise dispose of, any
authorized investment at any time held by it.
(c) To maintain a cash reserve in such a manner as the Trustee shall
deem advisable from time to time. Such cash reserve may consist
of uninvested contributions or of the proceeds of the sale of the
investments of the Trust, as the Trustee in its sole discretion
may determine. Such cash reserve may be in a deposit account or
invested in the savings department, if any, of the Trustee, or as
Trustee may direct, in a bank, savings and loan association,
building and loan association, or savings bank, including time
deposits or certificates of deposit with maturities of less than
or more than one year.
(d) To exercise any options appurtenant to any authorized investment
in which the fund is invested, for conversion thereof into
another authorized investment, or to exercise any rights to
subscribe for additional authorized investment, and to make all
necessary payment therefore.
(e) To join in, consent to, dissent from, or oppose, to deposit
securities in a voting trust, in connection with the
reorganization, consolidation, recapitalization, merger, or
readjustment of the finances of any
XIV-3
corporation, company, or association in which the fund may be
invested; or in connection with the sale, mortgage, pledge, or
lease of any property of same, on any terms and conditions as it
may deem wise; to do any act which may be deemed necessary or
advisable in connection therewith, including the exercise of
options, making agreements or subscriptions, and payment of
expenses, assessments or subscriptions; and to accept any
authorized investment which may be issued in or as a result of
any proceeding, and thereafter to hold the same.
(f) To vote, in person or by general or limited proxy, at any
election of any corporation in which the fund is invested, and
similarly to exercise personally or by a general or limited power
of attorney, any right appurtenant to any authorized investment
held in the fund.
(g) To sell, option to sell, mortgage, lease for a term of years less
than or continuing beyond the possible date of the termination of
the trust created hereunder, partition or exchange any real
property which may from time to time or at any time constitute a
portion of the fund, either at public or private sale, for such
prices and upon such terms as it may deem best and to make,
execute and deliver to the purchasers thereof good and sufficient
deeds of conveyance thereof and all assignments, transfers and
other legal instruments, either necessary or convenient for
passing the title and ownership thereof to the purchaser, free
and discharge of all trusts, and without liability on the part of
such purchasers to see to the proper application of the purchase
price.
(h) To repair, alter, or improve any buildings which may be on real
estate forming part of the fund, or to erect entirely new
structures thereon.
(i) To renew or extend or participate in the renewal or extension of
any mortgage, upon such terms as may be deemed advisable, and to
agree to a reduction in the rate of interest on any mortgage or
to any other modification or change in the terms of any mortgage
or of any guarantee pertaining thereto, in any manner and to any
extent that may be deemed advisable for the protection of the
fund or the preservation of the value of the investment; to waive
any default, whether in the performance of any covenant or
condition of any mortgage or in the performance of any guarantee,
or to enforce any such default in such manner and to such extent
as may be deemed advisable; to exercise and enforce any and all
rights or foreclosure, to bid on property in foreclosure, to take
a deed in lieu of foreclosure with or without paying a
consideration
XIV-4
therefore, and in connection therewith to release the obligation
on the bond secured by such mortgage; and to exercise and enforce
in any action, suit or proceeding at law or in equity any right
or remedies in respect to any mortgage or guarantee.
(j) To purchase authorized investments at a premium or discount.
(k) To employ suitable agents and counsel with respect to investment
transactions, and to pay their reasonable expenses and
compensation.
(1) To borrow or raise monies for the purpose of the Trust, in such
amounts and upon such terms and conditions as Trustee in its
absolute discretion may deem advisable, and for any sum so
borrowed to issue its promissory note as Trustee, and to secure
the repayments thereof by pledging or mortgaging all or any part
of the fund, provided that loans and repayments shall be made
prorata on all property and the Contracts of the same class or
type. No person lending money to Trustee shall be bound to see to
the application of the money lent or to inquire into the
validity, expediency or propriety of such borrowing.
(m) To cause any investment in the fund to be registered in, or
transferred into, its name as Trustee or the name of its nominee
or nominees or to retain them unregistered or in form permitting
transfer by delivery, if authorized by the Company, but the books
and records of Trustee shall at all times show that all such
investments are part of the fund, and Trustee shall be fully
responsible for any misappropriation or defalcation in respect to
any investment held by its nominee or held in unregistered form.
(n) To do all acts which it may deem necessary or proper, and to
exercise any and all powers appurtenant to Trustee under this
Plan and Trust, upon terms and conditions as to it may seem best
for the best interest of the fund, except as otherwise provided
by state or federal law.
(o) To purchase securities on margins and to re-hypothecate same.
(p) To purchase life insurance on the lives of the directors,
principal officers, or other key personnel of the Company, made
payable to the Trust for the benefit of the fund.
14.11 "Authorized investment" as used herein shall include stock (whether
preferred or common), bank common trust funds
XIV-5
(including those of the Trustee, if any), bonds, debentures, notes or other
evidences of indebtedness or ownership (secured by mortgages including second
mortgages or otherwise), put or call options to buy or sell securities (whether
listed or unlisted on any exchange and whether covered or uncovered), any life
insurance, retirement income, endowment or annuity contract in a legal reserve
life insurance company authorized to do business in the state of domicile of the
Trustee; and real and personal property of all kinds, including leaseholds on
improved and unimproved real estate. Authorized investments shall not be limited
to that class of investments which is specifically authorized as a legal
investment for trust funds under the law of the state of domicile of the
Trustee, but no investment shall constitute an Authorized investment if such
investment is prohibited by governing local or federal law.
14.12 The Trustee shall not cause the Plan to engage in any transaction if
it knows that such transaction constitutes directly or indirectly a prohibited
transaction, as described in Sections 406 and 407 of the Employee Retirement
Income Security Act of 1974 and Section 4975 of the Internal Revenue Code, or
any amendments thereto, unless such transaction is excluded or exempted from the
provisions of Sections 406 and 407 or Code Section 4975, by Sections 407 and
408, or Code Section 4975, any exemption issued thereunder, or any amendments
thereto.
14.13 The initial Trustee heretofore designated in this Agreement and Trust
shall serve until his respective resignation, death, incapacity or removal.
Whenever a vacancy shall exist among the Trustees, the Company shall, if no
Trustee remains, or may, if at least 1 Trustee remains, name a successor Trustee
who may be an officer or director of the Company or who may be an Employee, or
who may be a person not employed by the Company. Whenever a successor Trustee
shall be appointed, he shall immediately and automatically succeed to and become
vested with the title to any trust assets theretofore vested in the Trustee that
such successor Trustee is replacing, and the title of such former Trustee shall
automatically and immediately be extinguished. A successor Trustee shall
likewise serve until his resignation, death, incapacity or removal. The Company
shall always have the right to remove a Trustee for cause or without cause at
any time. Any Trustee may resign at any time by giving the Company 10 days
written notice in advance of such resignation.
14.14 The Company or Plan shall pay all expenses of administering the Plan
and Trust, which expenses shall include, but not be limited to, expenses
incident to the functioning of those to whom the Company has delegated certain
duties, such as the payment of professional fees and consultants fees, and the
costs of administering the Plan.
XIV-6
Notwithstanding the above, if any expenses of administering the Plan and
trust are not paid by Company, they may be paid from the Trust, at the direction
of the Company.
14.15 The Trustee may be paid such reasonable compensation as shall from
time to time be agreed upon by the Company and the Trustee, except that no
Trustee who is a full-time paid Employee of Company may be compensated for his
services as Trustee. In addition, the Trustee shall be reimbursed for any
reasonable direct expenses, including reasonable counsel fees (if specifically
authorized in advance in writing by Company), properly and actually incurred by
it in the administration of the Trust and not otherwise reimbursed. All taxes of
any and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust or the income thereof shall be
paid from the Trust.
14.16 The Company shall establish an investment policy to provide for the
benefits provided under this Plan. In accordance with the foregoing, the Company
shall determine whether the Plan has a short term need for liquidity, or whether
liquidity is a long term goal, or whatever other investment policy should be
followed, and communicate this to the Trustees or investment manager(s), so that
the investment policy can be appropriately coordinated with Plan needs.
14.17 The Named Fiduciary shall be responsible for and have the authority
to control and manage the operation and administration of this Plan and Trust,
although fiduciary and other responsibilities may be allocated to other parties
by the Named Fiduciary by written notification to such parties of their
responsibilities, and written acceptance by such parties of such
responsibilities. Trustee responsibilities may be allocated only among Trustees
or to an investment manager. An investment manager is any fiduciary, other than
the Trustee or Named Fiduciary, who: (a) has the power to manage, acquire or
dispose of any portion of the Fund; (b) is registered as an investment adviser
under the Investment Advisers Act of 1940, or is a bank as defined in that Act
or an insurance company qualified to perform the services described in
subsection (a) hereof; and (c) has acknowledged in writing that he is a
fiduciary with respect to the Plan.
14.18 Whenever the Trust has an investment in a common trust fund available
only to Trusts qualified under Section 401(a) of the Internal Revenue Code of
1986 as amended, or the corresponding provisions of subsequent law of similar
purpose, all of the provisions of the particular common trust fund declarations
of trust, as amended from time to time, shall be deemed to be incorporated
herein and be a part hereof.
XIV-7
14.19 If at any time there is more than 1 Trustee hereunder, The Trustees
need not call or hold meetings to make any decision or to take any action, but
any decision may be made and any action may be taken by written documents signed
by the Trustees then acting, or, if there are more than 2 Trustees, then by a
majority of the Trustees then acting. However, any one Trustee, acting alone,
will have the authority to sign checks, drafts, notes, insurance applications or
any other documents on behalf of the Trustees and to perform purely ministerial
acts. If at any time there is more than 1 Trustee hereunder, and if any
difference of opinion at any time exists between or among the Trustees in
respect of doing or omitting to do any act in the execution of the Trust, the
opinion of the majority of the Trustees will prevail.
14.20 A Trustee may be a Participant, but if any matter pertaining to his
own particular Participation comes up for the action of the Trustee, such person
will be disqualified to act upon the particular matter (unless he is the sole
Trustee), and such matter will be resolved by the other Trustee(s).
XIV-8
ARTICLE FIFTEEN
INSURER
15.1 No Insurer issuing any Contract hereunder shall be deemed a party to
this Plan and Trust or to be responsible for its validity. The obligations and
responsibilities of an Insurer shall be measured and determined solely by the
terms of its Contract, and it shall not be required to do any act not provided
for, or contrary to the provisions of its Contract.
15.2 An Insurer shall not be required to look into the terms of the Plan
and Trust or question any action of the Trustee, nor shall it be responsible to
see that any action of the Trustee is authorized.
15.3 An Insurer may conclusively assume that the Trustee has full
authority, and is acting within that authority, in any transaction concerning
the Contracts, and shall be fully discharged from any and all liabilities for
any action taken in accordance with the direction of the Trustee. In accepting
application for Contracts, an Insurer has no responsibility for determining
whether the Employee is eligible, or whether the proper Contract is being
applied for. In all transactions with the Trustee, an Insurer shall deal with it
as though it were the sole and absolute owner of the Contracts. One Trustee's
signature is sufficient in all matters regarding insurance transactions.
15.4 An Insurer shall be fully protected from any liability for any action
taken prior to receiving notice of any amendment or termination of this
Agreement and Trust, or for dealing with any prior Trustee prior to receiving
notice of appointment of a successor Trustee.
XV-1
ARTICLE SIXTEEN
NO REVERSION TO COMPANY
16.1 No part of the principal or income or other assets of the Trust shall
be used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries, and the Company shall not be entitled to
receive back any part of its contribution to the Trust, except as provided in
the remaining Paragraphs of this Article.
16.2 Company contributions are conditioned on initial qualification of the
Plan under Internal Revenue Code Section 401 and if the Plan does not qualify,
such contribution shall be returned to Company within one year after the date of
denial of initial qualification of the Plan.
16.3 Company contributions are conditioned on the deductibility of the
contribution under Internal Revenue Code Section 404, and to the extent any
deduction is disallowed, such contribution shall be returned to Company within 1
year after the date of disallowance of the deduction.
16.4 In the case of a Company contribution made by reason of a mistake of
fact, such contribution shall be returned to Company within 1 year after the
payment of the contribution. Mistakes of fact shall include but not be limited
to arithmetical errors in calculating the amounts to be contributed to the Plan
under the contribution and allocation sections of the Plan.
16.5 Any contribution made by the employer because of a mistake of fact
must be returned to the employer within one year of the contribution.
In the event the deduction of the 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.
In the event that the Commissioner of Internal Revenue determines that the plan
is not initially qualified under the Internal Revenue Code, any contribution
made incident to that initial qualification is denied, but only if the
application for the qualification is made by the time prescribed by law for
filing the employer's return for the taxable year in which the plan is adopted,
or such later date as the Secretary of the Treasury may prescribe.
XVI-1
16.6 The amount which shall be returned to Company as provided in
Paragraphs 16.3 and 16.4 is the excess of (1) the amount contributed over (2)
the amount that would have been contributed had there not occurred a mistake of
fact or a mistake in determining the amount of the deduction. Earnings
attributable to the excess contribution shall not be returned to Company, but
losses attributable thereto shall reduce the amount to be so returned.
Furthermore, no excess contribution shall be returned to Company to the extent
that such reversion would cause the balance of the account, derived from Company
contributions, of any Participant to be reduced to less than the balance which
would have been in the account had the mistaken amount not been contributed.
XVI-2
ARTICLE SEVENTEEN
DIRECT TRANSFERS AND ROLLOVERS
17.1 If a Participant shall be entitled to receive benefits under this Plan
pursuant to Articles V, VI or VIII above, the Trustee, at the direction of the
Plan Administrator, may transfer the Participant's vested benefits under this
Plan directly to the Trustee of a Plan and Trust qualified pursuant to Section
401 of the Internal Revenue Code of 1986 or any successor provisions thereof, of
the Participant's current or new employer, if the following conditions are
satisfied:
(a) the Trustee of the other plan shall be authorized to accept the
benefits under this Plan; and
(b) the value of the Participant's transferred assets shall be
separately accounted for in the other Trust; and
(c) the Participant's transferred assets shall not be forfeitable or
reduce in any way the obligation of the employer receiving
benefits from this Plan.
The Trustee of this Plan is authorized to accept, at the direction of the Plan
Administrator, assets for the benefit of an Employee, upon the conditions as set
forth above, from a trustee of another plan and trust maintained by either a
corporate or non-corporate Plan sponsor, qualified pursuant to Section 401 of
the Internal Revenue Code of 1986, or any successor provisions thereof.
17.2 With the permission of the Plan Administrator, any Employee who is a
member of a class of Employees eligible to participate may make a Rollover
Contribution to the Trustee at any time. The Trustee shall credit the fair
market value of any Rollover Contribution to the account of the contributing
Employee as of the date of the Rollover Contribution is made. For purposes of
the Plan's vesting provisions, a Rollover Contribution shall be considered to be
an Employee Contribution and shall be 100% vested on the date of contribution.
The term "Rollover Contribution" is defined as the contribution of a Qualifying
Rollover Distribution on or before the 60th day immediately following the day
the contributing Employee receives the Qualifying Rollover Distribution.
The term "Qualifying Rollover Distribution" is defined as:
XVII-1
(a) Any portion of the property received from a qualified plan and trust,
provided that the balance to the credit of an Employee, reduced by any
Employee contributions, has been paid to him in one or more
distributions
(1) within one taxable year of the Employee on account of the
termination of a qualified plan or, in the case of a
profit-sharing or stock bonus plan, a complete discontinuance of
contributions under such plan; or
(2) which constitute a lump sum distribution within the meaning of
Section 402(e)(4)(A) (determined without reference to Section
402(e)(4)(B) and (H)) of the Internal Revenue Code of 1986.
In the case of a distribution of property other than money from a
qualified plan and trust, except for the proceeds from the sale of
such property (including appreciation from date of distribution),
other property (including money) may not be substituted in making a
Rollover Contribution; or
(b) The entire amount (including money and any other property) in an
Individual Retirement Account, Individual Retirement Annuity, or
Individual Retirement Bond (as defined in Sections 408 and 409 of the
Internal Revenue Code of 1986) maintained for the benefit of the
Employee making the Rollover Contribution, which amount has been
distributed from such Individual Retirement Account, Individual
Retirement Annuity or Individual Retirement Bond. Such amount will
constitute a Qualifying Rollover Distribution only if the amount in
such Individual Retirement Account, Individual Retirement Annuity, or
Individual Retirement Bond is solely attributable to a Rollover
Contribution made by the Employee from his interest as a Participant
in a trust described in Section 401(a) of the Internal Revenue Code of
1986, or an annuity plan described in Section 403(a) of the Internal
Revenue Code of 1986, plus the earnings thereon; but
(c) In no case does a Qualifying Rollover Distribution include any amount
which is attributable to a distribution if any part of the
distribution is attributable to contributions made on behalf of an
Employee while he was a Key-Employee in a Top-Heavy plan.
17.3 No assets transferred to this Plan in accordance with the provisions
of this Article shall be considered Employee contributions for purposes of
Subparagraph 2.1(d) and Paragraph 4.2.
XVII-2
17.4 Distribution of said assets shall follow the general provisions of the
Plan for distribution of the Participant's account derived from employer
contributions. Effective January 1, 1989, for existing plans and August, 1, 1986
for new plans, as described under Regulation 1.411(d) of Code Section 411(d),
for that portion of benefits representing benefits transferred to the Plan, the
forms of benefit available under the previous plan shall also be available to
the "transferred" portion of the benefits.
17.5 The specific assets transferred to the Plan shall be general assets of
the trust, subject to the general investment powers of the Trustees (or the
Participants, if such powers have been granted them).
17.6 For purposes of valuing gains and losses in the account(s) maintained
for transferred assets, the provisions of Paragraph 4.5 shall apply. Premiums on
any insurance policies transferred to the Plan may be paid from the account
established for employer contributions, subject to the limits of Paragraph 11.1.
In the event of said premium payments, an equitable share of increases in Cash
Value from the date of transfer shall be allocated to the account established
for employer contributions. Said equitable share shall be equal to the
difference between the actual Cash Value of the policy and the Cash Value the
policy would have had if it been placed in reduced paid-up status.
XVII-3
ARTICLE EIGHTEEN
DETERMINATION OF TOP-HEAVY STATUS
18.1 In determining whether or not this Plan is Top-Heavy or Super
Top-Heavy for any Plan Year, the following calculations shall be made:
(a) In the case of a defined benefit plan, a Participant's present value
of accrued benefit other than a Key Employee, shall be as determined
using the single accrual method used for all defined benefit plans of
the Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not more
rapidly than the slowest accrual rate permitted under section
411(b)(1)(c) of the Code.
(b) In the case of a defined contribution plan, a Participant's account
balance (including accounts for Employee contributions) as of the
Determination Date is the sum of:
(1) his account balance as of the most recent valuation occurring
within a 12 month period ending on the Determination Date;
(2) an adjustment for any contributions due as of the Determination
Date.
In the case of a plan not subject to the minimum funding requirements
of Internal Revenue Code Section 412, such adjustment shall be the
amount of any contributions actually made after the valuation date but
before the Determination Date, except for the first Plan Year, when
such adjustment shall also reflect the amount of any contributions
made after the Determination Date that are allocated as of a date in
that first Plan Year. In the case of a plan that is subject to the
minimum funding requirements, the account balance shall also be
adjusted to include contributions allocated as of a date not later
than the Determination Date, even though those amounts are not yet
required to be contributed.
Also, the adjustment shall reflect the amount of any contribution
actually made (or due to be made) after the valuation date but before
the expiration of the extended payment period in Internal Revenue Code
Section 412(c)(10);
XVIII-1
(3) any Plan distributions made within the Plan Year that includes the
Determination Date or within the 4 preceding Plan Years. However, in
the case of distributions made after the valuation date and prior to
the Determination Date, such distributions are not included as
distributions for Top-Heavy purposes to the extent that such
distributions are already included in the Participant's present value
of accrued benefit or account balance as of the valuation date.
Notwithstanding anything herein to the contrary, all distributions,
including distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation
Group, will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purposes of this paragraph;
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified deductible
employee contributions shall not be considered to be a part of the
Participant's account balance;
(5) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if this Plan provides for rollovers or plan-to-plan transfers, it
shall always consider such rollover or plan-to-plan transfer made to
another plan as a distribution for the purposes of this Section. If
this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of the
Participant's account balance. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984 shall be considered as
part of the Participant's account balance; with respect to related
rollovers and plan-to-plan transfers (ones either not initiated by the
Employee or made to a plan maintained by the same employer), if this
Plan provides the rollover or plan-to-plan transfer, it shall not be
counted as a distribution for purposes of this Section. If this Plan
is the plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits or account balance,
irrespective of the date on which such rollover or plan-to-plan
transfer is accepted.
XVIII-2
In determining whether or not rollovers or plan-to-plan transfers are made to
the same or another Employer, all Employers aggregated under Internal Revenue
Code Sections 414 (b), (c), (in) and (o) are treated as the same Employer.
In calculating the accrued benefits or account balances of Participants there
shall not be considered any benefit or account balances of any Participant who
is not a Key-Employee but who in any prior year was a Key-Employee.
(c) In the case of both a defined benefit plan and a defined contribution
plan, a Participant's accrued benefit or account balance shall be
increased by:
(1) any plan distributions made within the Plan Year that includes
the Determination Date, or within the four preceding Plan Years.
The preceding sentence shall also apply to distributions under a
terminated plan which, if it had not been terminated, would have
been required to be included in an aggregation group. However, in
the case of distributions made after the valuation date and prior
to the Determination Date, such distributions are not included as
distributions for Top-Heavy purposes, to the extent that such
distributions are already included in the Participant's present
value of accrued benefit or account balance as of the valuation
date;
(2) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered to be a
part of the Participant's account balance;
(3) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by another
employer), if this Plan provides for rollovers or plan-to-plan
transfers, it shall always consider such rollover or plan-to-plan
transfer made to another plan as a distribution for the purposes
of this Section. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such
rollover or plan-to-plan transfer accepted after December 31,
1983 as part of the Participant's account balance. However, any
rollover or plan-to-plan transfer accepted prior to January 1,
1984 shall be considered as part of the Participant's account
balance;
XVIII-3
(4) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits or account
balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
In determining whether or not rollovers or plan-to-plan transfers
are made to the same or another Employer, all Employers
aggregated under Internal Revenue Code Sections 414(b), (c), (m)
and (o) are treated as the same Employer.
(d) In calculating the accrued benefits or account balances of
Participants, there shall not be considered any benefit or account
balances of any Participant who is not a Key-Employee but who in any
prior year was a Key-Employee.
(e) In calculating the accrued benefits or account balances of
Participants, the accrued benefit of any individual who has not
performed services for the Employer at any time during the 5 year
period ending on the determination date (and the account of such
individual) shall not be taken into account even though such Employee
may have received payments from the Employer after separation from
service.
(f) Solely for the purpose of determining if the plan, or any other plan
included in a required aggregation group of which this plan is a part,
is top-heavy (within the meaning of Section 416(g) of the Code) the
accrued benefit of an Employee other than a key employee (within the
meaning of Section 416(i)(1) of the Code) shall be determined under
(a) the method, if any, that uniformly applies for accrual purposes
under all plans maintained by the Affiliated Employers, 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.
18.2 If Company maintains more than one plan, the plans shall constitute an
Aggregation Group, provided the following conditions are satisfied:
(a) Each plan of Company in which a Key Employee is a Participant,
including any terminated plan and each other
XVIII-4
plan of Company which enables any plan in which a Key-Employee
participates to meet the requirements of Internal Revenue Code
Sections 401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top-Heavy Plan if the Required Aggregation Group
is a Top-Heavy Group. No plan in the Required Aggregation Group will
be considered a Top-Heavy Plan if the Aggregation Group is not a
Top-Heavy Group.
(b) Company may by execution of a written resolution provide for the
creation of a Permissive Aggregation Group, to consist of the Required
Aggregation Group and any other plan not required to be included in
the Required Aggregation Group, provided the resulting group, taken as
a whole, would continue to satisfy the provisions of Internal Revenue
Code Sections 401(a) (4) or 410. If the Permissive Aggregation Group
is not Top-Heavy, no plan in the Group will be considered Top-Heavy.
In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top-Heavy
Plan if the Permissive Aggregation Group is a Top-Heavy Group.
(c) Only those plans of the Employer in which the Determination Dates fall
within the same calendar year shall be aggregated in order to
determine whether such plans are Top-Heavy Plans.
(d) A Top-Heavy Group is an Aggregation Group in which, as of the
Determination Date, the sum of the present value of accrued benefits
of Key Employees under all defined benefit plans included in the
group, and the account balances of Key-Employees under all defined
contribution plans included in the group, exceeds 60 percent of a
similar sum determined for all Participants.
18.3 In determining whether or not an Employee is a Key-Employee, the
following shall apply:
(a) An officer shall be an administrative executive in regular and
continued service. If the number of Employees of all the employers
aggregated under Internal Revenue Code Sections 414(b), (c), (in) and
(0) is less than 30 employees for a particular year, no more than 3
individuals shall be treated as Key-Employees for that year by reason
of being officers. If the number of
XVIII-5
Employees of all organizations aggregated under Internal Revenue Code
Sections 414(b), (c), (m) and (o) is greater than 30 but less than
500 for a particular year, no more than 10 percent of the number of
Employees will be treated as Key-Employees for that year by reason of
being officers. If the number of Employees of employers aggregated
under Internal Revenue Code Sections 414(b), (c), (m) and (o) exceeds
500 for a particular year, no more than 50 Employees are considered as
Key Employees for that year by reason of being officers. This limited
number of officers is comprised of the individual officers, selected
from the group of all individuals who were officers in the current
Plan Year or any one of the four preceding Plan Years, who had the
largest annual compensation in that five-year period.
(b) An individual who is a "one percent owner" shall be considered as
having compensation of more than $150,000 based on the definition of
compensation contained in Article 4 herein used for purposes of
computing limits on maximum contributions or benefits, but
contributions on behalf of a Self Employed Individual shall be
excluded from the definition of compensation.
(c) Top-heavy ratio:
(1) If the employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the employer has
not maintained any defined benefit plan which during the five-year
period ending on the determination date(s) has or has had accrued
benefits, the top-heavy ratio for this plan alone or for the required
or permissive aggregation group as appropriate is a fraction, the
numerator of which is the sum of the account balances of all key
employees as of the determination date(s) (including any part of any
account balance distributed in the five-year period ending on the
determination date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance
distributed in the five-year period ending on the determination
date(s)), both computed in accordance with section 416 of the Code and
the regulations thereunder. Both the numerator and denominator of the
top-heavy ratio are increased to reflect any contribution not actually
made as of the determination date, but which is required to taken into
account on that date under section 416 of the Code and the regulations
thereunder.
(2) If the employer maintains one or more defined contribution plans
(including any Simplified Employee Pension Plan) and the employer
maintains or has maintained
XVIII-6
one or more defined benefit plans which during the five-year period
ending on the determination date(s) has or has had any accrued
benefits, the top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the numerator of which
is the sum of account balances under the aggregated defined
contribution plan or plans for all key employees, determined in
accordance with (a) above, and the present value of accrued benefits
under the aggregated defined benefit plan or plans for all key
employees as of the determination date(s), and the denominator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans for all participants, determined in
accordance with (a) above, and the present value of accrued benefits
under the defined benefit plan or plans for all participants as of the
determination date(s), all determined in accordance with section 416
of the Code and the regulations thereunder. The accrued benefits under
a defined benefit plan in both the numerator and denominator of the
top- heavy ratio are increased for any distribution of an accrued
benefit made in the five-year period ending on the determination date.
(3) For purposes of (1) and (2) above the value of account balances
and the present value of accrued benefits will be determined as of the
most recent valuation date that falls within or ends with the 12-month
period ending on the determination date, except as provided in section
416 of the Code and the regulations thereunder for the first and
second plan years of a defined benefit plan. The account balances and
accrued benefits of a participant (a) who is not a key employee but
who was a key employee in a prior year, or (b) who has not been
credited with at least one hour of service with any employer
maintaining the plan at any time during the five-year period ending on
the determination date will be disregarded. The calculation of the
top-heavy ratio, and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance with
section 416 of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for purposes of
computing the top-heavy ratio. When aggregating plans the value of
account balances and accrued benefits will be calculated with
reference to the determination dates that fall within the same
calendar year.
The accrued benefit of a participant other than a key employee shall
be determined under (a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
employer, or
XVIII-7
(b) if there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the fractional
rule of section 411(b)(1)(C) of the Code.
(d) Permissive aggregation group: The required aggregation group of plans
plus any other plan or plans of the Employer which, when considered as a
group with the required aggregation group, would continue to satisfy the
requirements of sections 401(a)(4) and 410 of the Code.
(e) Required aggregation group: (1) Each qualified plan of the employer in
which at least one key employee participates or participated at any time
during the determination period (regardless of whether the plan has
terminated), and (2) any other qualified plan of the employer which enables
a plan described in (1) to meet the requirements of sections 401(a)(4) or
410 of the Code.
18.4 In any Top-Heavy Plan Year, a Participant shall have a non-forfeitable
right to a percentage of his accrued benefit derived from Company contributions
determined as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 years or more 100%
Notwithstanding the above, the vesting schedule contained in this Paragraph
shall not apply in any Top-Heavy Plan Year if the vesting schedule contained
elsewhere herein provides for equal or more rapid vesting at every year shown on
the schedule, nor shall it apply if the Plan otherwise provides for 100 percent
vesting after 3 or fewer Years of Service.
18.5 The vesting schedule applicable to any Top-Heavy Plan Year shall not
apply to any Employee who does not have an hour of service after the Plan
becomes Top-Heavy. His vested interest shall be determined under the vesting
provision of the Plan as in effect on the date of his last hour of service.
18.6 Except as otherwise provided in (3) and (4) below, the employer
contributions and forfeitures allocated on behalf of any participant who is not
a key employee shall not be less than the lesser of three percent of such
participant's compensation or in the case where the employer has no defined
benefit plan which designates this plan to satisfy section 401 of the Code, the
largest percentage of employer contributions and forfeitures, as a percentage of
the first $200,000 of the key employee's compensation, allocated on behalf of
any key employee for that year. The minimum allocation is determined without
regard to any
XVIII-8
Social Security contribution. This minimum allocation shall be made even though,
under other plan provisions, the participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because of (i) the participant's failure to complete 1,000 hours of service (or
any equivalent provided in the plan), or (ii) the participant's failure to make
mandatory employee contributions to the plan, or (iii) compensation less than a
stated amount.
Eligible Participants are those non-key employee Participants in defined
contribution plans who have not separated from service at the end of the Plan
Year, or who have become Participants in the Plan but who subsequently fail to
complete 1,000 hours of service for an accrual computation period. Eligible
Participants in defined benefit plans are those Participants who are credited
with at least 1,000 hours of service in an Accrual Computation Period. The
minimum allocation required, to the extent required to be nonforfeitable under
Code Section 416(b), may not be forfeited under Code Sections 411(a)(3)(B) or
411(a)(3)(D).
18.7 In the case of a Participant in a defined benefit plan, in no case
will the operation of the Top-Heavy rules, including rules applicable to Super
Top-Heavy Plans, pertaining for example and not by way of limitation to the
definitions of the Defined Benefit Plan Fraction or Defined Contribution Plan
Fraction, effect a reduction in the Participant's accrued benefit. However, the
mere application of the rules for establishing which Plan is primary in assuring
compliance with Section 415 of the Code in the case of a Participant in both a
defined benefit plan and a defined contribution plan shall not be considered as
effecting a reduction in an accrued benefit.
XVIII-9
ARTICLE NINETEEN
MISCELLANEOUS PROVISIONS
19.1 Purpose: This Agreement and Trust which is created is purely voluntary
on the part of the Company, and the Company may change or discontinue payments
hereunder at any time or from time to time as the Company may decide; provided,
however, that such discontinuance of payment or termination is approved as
required by federal law. Except as otherwise provided by federal law, neither
the establishment of the Agreement and Trust nor any modification hereof, nor
the creation of any fund or account, nor the payment of any benefit, shall be
construed as giving any person whomsoever any legal or equitable right against
the Company or the Trustee, but any and all claims or rights arising under this
Agreement and Trust shall be expressly limited in enforcement to the assets of
the Trust fund, and in those instances where a Contract has been issued, the
right to such benefits shall also be limited by the terms and conditions of the
Contract. Nothing contained in this Agreement and Trust shall be construed or
interpreted as giving any Employee the right to be retained in the service of
the Company or shall affect or impair the right of the Company to control its
Employees and to terminate the service of any Employee at any time.
19.2 Headings: Headings or titles of Articles are for general information
only and this Agreement and Trust shall not be construed by reference to such
titles.
19.3 Severability: If any provision of this Agreement and Trust is held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision, and this Agreement and Trust shall be construed and
enforced as if such provision had not been included.
19.4 The terms of this Trust shall be construed in accordance with the laws
of the Trust Situs, except to the extent preempted by federal law.
19.5 Binding Effect: This Agreement and Trust shall be binding upon and
inure to the benefit of the Company and the Trustee, their successors and the
Participants and their Beneficiaries in accordance with the terms of this
Agreement and Trust.
19.6 Construction: Whenever used in this Agreement and Trust unless the
context indicates otherwise, singular shall include plural and the plural shall
include singular; and the male gender shall include the female gender.
XIX-1
19.7 Termination: Upon the return of all contributions to the Company as
provided in Paragraph 16.2 hereof, the Trust shall terminate, and the Trustee
shall be discharged from all obligations under the Trust.
19.8 Indemnification: The Company shall indemnify those to whom the Company
has delegated fiduciary responsibilities against any and all claims, losses,
damages, expenses and liabilities arising from their responsibilities in
connection with the Plan, unless the same is determined to be due to gross
negligence or willful misconduct.
19.9 Interpretation: Except as otherwise provided by federal law, in all
matters concerning the interpretation of this Agreement and Trust and the
operation of the Plan and Trust, the decisions made by the Plan Administrator
shall be final and conclusive upon all the parties. All such decisions shall
apply uniformly to all Participants in like situations.
19.10 Rules: The Plan Administrator may from time to time formulate and
issue such rules and regulations, not inconsistent with the declared purposes
and provisions of the Plan, as the Plan Administrator may deem necessary to
administer and carry out the Plan and Trust. No such rule or regulation will be
ineffective by reason of the fact that such rule or regulation may amend the
purely administrative provisions of the Plan or conform to any change in the
Plan as may be made by amendment.
19.11 Conformity with federal Law: This Agreement and Trust shall at all
times be construed and administered so as to conform to the requirements for
qualification under the Internal Revenue Code of 1986, as amended, as well as to
conform to the requirements of all governing federal law, and the Agreement and
Trust shall be deemed amended automatically to conform to such legal
requirements, to the extent necessary.
19.12 Controlled Group: For purposes of interpreting and administering Plan
provisions required for tax qualification under Internal Revenue Code Section
401, including Plan provisions relating to participation, vesting, benefit
accrual, and limitations on benefits and contributions, all employees of all
entities which are members of a Controlled Group of entities, as defined in
Internal Revenue Code Section 414(b) and (c), and/or which are members of an
Affiliated Service Group as defined in Internal Revenue Code Section 414(m) and
(o), shall be treated as if employed by a single employer.
For purposes of determining years of Service for eligibility and vesting
purposes for any Employee or former Employee of Company, service with any entity
which is a member of a Controlled Group
XIX-2
or an Affiliated Service Group in which Company is included shall be considered
service with Company. In determining service for purposes of benefit accrual for
any Employee or former Employee of Company, service during any Plan Year in
which an Employee was a Participant in a Plan maintained by a member of a
Controlled Group or an Affiliated Service Group in which Company is included
shall be taken into account.
19.13 Successor Company: Any successor organization of Company may adopt
this Plan and Trust, with the written consent of Company, if then in existence.
Such successor shall thereby succeed to all the rights, powers, and duties of
Company hereunder.
XIX-3
The undersigned, president of the above named Corporation, does hereby
certify that the foregoing are true and correct copies of the Profit Sharing
Plan and Trust instruments, adopted by said Corporation and approved by its
Board of Directors at a special meeting of the Directors.
He further certifies that the Profit Sharing Plan and Trust instruments
were duly executed by the Corporation and the Trustees named in said
instruments.
(SEAL)
------------------------------
Xxxxxxx X. Xxxx,
President
XIX-5
AMENDMENT
TO
PENNSYLVANIA SAVINGS BANK
PROFIT SHARING PLAN AND TRUST AGREEMENT
WHEREAS, Article 12 permits the Employer to amend the Plan,
WHEREAS, the Employer has determined that it is advisable to amend the Plan
to permit directed investment accounts,
NOW, THEREFORE, the Plan is amended by the addition of the following which
shall be known as Article 20.
ARTICLE 20
DIRECTED INVESTMENT ACCOUNT
(a) The Administrator shall determine that all Participants be permitted to
direct a Trustee as to the investment of all or a portion of the vested interest
in any one or more of their individual account balances. If such authorization
is given, Participants may, subject to a procedure established by the
Administrator and applied in a uniform, non-discriminatory manner, direct the
Trustee in writing to invest the vested portion of their account in specific
assets, specific funds or other investments permitted under the Plan and the
directed investment procedure. That portion of the vested account of any
Participant so directing will thereupon be considered a directed investment
account, which shall not share the trust fund earnings.
(b) A separate directed investment account shall be established for each
Participant who has directed an investment. Transfers between the Participant's
regular account and his directed investment account shall be charged and
credited as the case may be to each account. The directed investment account
shall not share in trust fund earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and expenses as well as any
appreciation or depreciation in market value during each Plan Year attributable
to such account.
(c) The Trustee shall not be responsible for, nor liable for, any loss or
expense which may arise from or result from compliance with any directions from
the Participant. The Trustee shall not be responsible for, nor liable for, any
loss or expense which may result from the Trustee's refusal or failure to comply
with any directions from the Participant. The Trustee may refuse to comply with
any direction from the Participant in the event the Trustee, in its sole and
absolute discretion, deems such direction improper by
2
virtue of applicable law. Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's account.
IN WITNESS WHEREOF, the Employer has executed this Amendment on the date
indicated below.
PENNSYLVANIA SAVINGS BANK
BY: [ILLEGIBLE]
--------------------------------
President
ATTEST: [ILLEGIBLE]
-----------------------------
Secretary
DATED:
-------------------------
3
