AMENDED AND RESTATED
DEFINED BENEFIT PENSION PLAN AND TRUST BY AND BETWEEN:
PENNSYLVANIA SAVINGS BANK
AND
XXXXXXX X. XXXX, TRUSTEE
AND
XXXXXXX DI SANDRO, TRUSTEE
INDEX
ARTICLE ONE
Purpose, Creation and Name ................................. I-1
ARTICLE TWO
Definitions of Terms ....................................... II-1
ARTICLE THREE
Eligibility ................................................ III-1
ARTICLE FOUR
Retirement Benefits ........................................ IV-1
ARTICLE FIVE
Contributions .............................................. V-1
ARTICLE SIX
Insurance Benefits and Charge of Benefits .................. VI-1
ARTICLE SEVEN
Commencement of Retirement Benefits ........................ VII-1
ARTICLE EIGHT
Disability Benefits ........................................ VIII-1
ARTICLE NINE
Death Benefits ............................................. IX-1
ARTICLE TEN
Nonforfeitable Benefits .................................... X-1
ARTICLE ELEVEN
Payment of Benefits ........................................ XI-1
ARTICLE TWELVE
Right to Alter, Amend or Terminate Trust ................... XII-1
ARTICLE THIRTEEN
Loans ...................................................... XIII-1
ARTICLE FOURTEEN
Trustee .................................................... XIV-1
ARTICLE FIFTEEN
Insurer .................................................. XV-1
ARTICLE SIXTEEN
Spendthrift Clause ....................................... XVI-1
ARTICLE SEVENTEEN
No Reversion to Company .................................. XVII-1
ARTICLE EIGHTEEN
Direct Transfer and Rollovers ............................ XVIII-1
ARTICLE NINETEEN
Determination of Top-Heavy Status ........................ XIX-1
ARTICLE TWENTY
Miscellaneous Provisions .................................. XX-1
ARTICLE ONE
PURPOSE, CREATION AND NAME
1.1 WHEREAS, the Employer heretofore established a Defined Benefit Pension
Plan and Trust effective May 7, 1963, (hereinafter called the "Original
Effective Date") known as the Pennsylvania Savings Association Pension Plan and
Trust and which plan shall hereinafter be known as Pennsylvania Savings Bank
Pension Plan and Trust (herein referred to as the "Plan") in recognition of the
contribution made to its successful operation by its employees and for the
exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan and Trust, the Employer has the
ability to amend the Plan and Trust;
NOW, THEREFORE, effective January 1, 1990 except as otherwise provided, the
Employer and the Trustee in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amend the Plan and Trust in its
entirety and restate the Plan and Trust;
The provisions of this Plan shall apply only to an Employee who terminates
employment on or after the effective date of this amendment and restatement. The
rights and benefits, if any, of a former employee shall be determined in
accordance with the prior provisions of the Plan in effect on the date his
employment terminated;
1.2 THIS AGREEMENT, hereby made and entered into this 15th day of November,
1990, 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.
Accrued Benefit: An amount, determined as of any specified date on or
before a Participant's Normal Retirement Age (the "calculation date"),
which is equal to the greater of the following amounts (converted to an
Actuarially Equivalent basis):
(1) His annual normal retirement benefit as computed in Paragraph 4.1,
calculated on the assumption that he continued to earn annually, until
Normal Retirement Age, Compensation at the rate of his Average Annual
Compensation on the calculation date, multiplied by a fraction, the
numerator of which is the number of Years of Participation
accumulated to such date, and the denominator of which is the total
number of Years of Participation, commencing with initial employment
and terminating with the Normal Retirement Age, but not including in
the numerator any Break in Service years, or any Participation Years
in which the Participants has less than 1,000 hours of service, except
that the denominator shall also contain years from any point of
reference to the Normal Retirement Age as if 1,000 hours had been
credited in any accrual computation period following or including such
point of reference; or
(2) The sum of (i) and (ii) below:
(i) The Cash Value of any Contract held by the Trustee on the life of
the Participant in accordance with Article Six herein.
(ii) An amount from the Fund Account equal to that which would have
been in the Fund Account for such Participant (the accrued
liability for such Participant) based on the following
assumptions:
(A) Level annual deposits (determined on the basis of the
actuarial assumption
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used in the definition of Actuarial Equivalence, and taking
into account the Cash Value at Normal Retirement Age of each
Contract described in (i) above, if any) made to the Fund
Account on the last day of each Plan Year from the date of
commencement of Participation to date, also including
changes in such deposits because of changes in compensation
as consistently used for valuation purposes, and because of
changes in maximum projected accrued benefits under
Paragraph 2.1(a)(1) resulting from a failure to attain 1,000
hours of service in any Participation Year.
(B) The continuation and accumulation of such level deposits to
Normal Retirement Age which (together with the Cash Value
described in (i) above, if any) would be sufficient to
provide the Participant's Normal Retirement Benefit.
(3) For any Top-Heavy Plan Year in which an eligible Participant in this
Plan, who is a Non-Key Employee, does not receive a minimum allocation
of Company contributions and forfeitures at least equal to five (5)
percent of compensation in a defined contribution plan of the Company
in which he is a Participant, his minimum accrued benefit at any point
in time shall be equal to two (2) percent of the average of his 5
highest consecutive years of compensation (excluding compensation
after the last Top-Heavy Plan Year) times his Years of Service for
benefit accrual beginning on or after January 1, 1984, and during
which the Plan was Top-Heavy, and during which he did not receive the
minimum allocation to a defined contribution plan described above, up
to a maximum of twenty (20) percent (less two (2) percent for each
Top-Heavy Plan Year during the first 10 such years during which he
received the minimum allocation to a defined contribution plan
described above). Compensation for purposes of these minimum
allocations or benefits shall be compensation as defined in Article
Four with respect to computing limits on maximum contributions or
benefits.
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Actuarial Equivalence: Equality in value as determined by the
Plan Administrator on the basis of the following actuarial
assumptions:
(1) Pre-Retirement:
(a) Interest: 6.0 percent per annum
(b) Mortality: None
(c) Turnover: None
(d) Salary Increase: None
(e) Expense Loading: None
(2) Post-Retirement: Determined in accordance with 1971 Group Annuity
Mortality Tables at 6.0 percent (3 year marital setback)
The Actuarial Equivalent of the Accrued Benefit of any Participant on
or after the later of the effective or adoption date of any change in
these assumptions shall be the greater of:
(1) the Actuarial Equivalent of the Accrued Benefit as of the date of
change, computed on the basis of the assumptions in effect prior
to the date of change; or
(2) the Actuarial Equivalent of the total Accrued Benefit, computed
on the basis of the change in effect after the assumptions.
Such assumptions shall serve to determine annuity benefits under
the Plan, except that the Trustee is authorized to purchase
annuity contracts from Insurer to pay benefits, if payments have
not commenced to Plan Participants, provided such Contracts
provide benefits no less than what would be provided on an
actuarially equivalent basis, and that the purchase price for
such Contracts is equal to the amount payable as a lump sum
distribution on an actuarially equivalent basis.
(c) 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 (ad
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
II-3
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.
(d) Age: A person's age at his last birthday.
(e) Agreement: This instrument with all amendments and supplements
thereto.
(f) Annual Addition: Means the amount allocated to a Participant's account
during the Limitation year that constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(1) (1) and 419(A) (d) (2) of
the Code.
(g) Average Annual Compensation: The total Compensation received by the
Employee from the Company during the period he was in active
Participation in the Plan and during his most highly paid five (5)
consecutive Years of Participation divided by five (5).
For purposes of benefit accrual, all compensation credited to an
Employee during a Participation Year in which he was an active
Participant shall be counted, even if his actual commencement of
Participation is later than the first day of the Participation Year.
Average Annual Compensation shall not include any compensation
credited to an Employee following his Normal Retirement Date or during
the Plan Year in which he terminates service.
(h) Beneficiary: The person or persons to whom the share of a deceased
Participant's benefit 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) Benefit Formula: 1.7 Percent of Average Annual Compensation times
Years of Service not to exceed 30 years, plus .75 Percent of monthly
compensation in excess of the 1989 Covered Compensation Table I, times
Years of Service not to exceed 30.
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(j) 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. For purposes
of benefit accrual, any Year of Participation in which an Employee has
no more than 500 hours of service.
(k) Cash Value: A Cash Value of a Contract.
(1) Code: the Internal Revenue Code of 1986 and amendments thereto.
(m) Company: Pennsylvania Savings Bank
(n) Compensation: Compensation actually paid to or for the benefit of an
Employee during the Plan Year, inclusive of overtime pay, commissions,
but excluding 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, 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 descendants who have not attained age nineteen
(19) before the close of the year.
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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.
(o) 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.
(p) Current Accrued Benefit: a Participant's accrued benefit under the
plan, determined as if the Participant had separated from service as
of the close of the last Limitation Year beginning before August 28,
1987, when expressed as an annual benefit within the meaning of
Section 415(b) (2) of the Code. In determining the amount of a
Participant's Current Accrued Benefit, the following shall be
disregarded:
(q) Defined Benefit Dollar Limitation: the limitation set forth in Section
415(b) (1) of the Code.
(r) Defined Contribution Dollar Limitation: $30,000 or, if greater,
one-fourth of the Defined Benefit Dollar Limitation in effect for the
Limitation Year.
(s) Defined Benefit Plan Fraction: A fraction the numerator of which is
the projected annual benefit of the Participant under all qualified
defined benefit plans of Company (determined as of the close of the
Limitation Year), and the denominator of which is the greater of the
product of 1.25 multiplied by the protected current accrued benefit or
the lesser of:
(1) the product of 1.25 multiplied by the dollar limitation in effect
for defined benefit plans under Internal Revenue Code Section
415(b) (1) (A) for such limitation year, or
(2) the product of 1.4 multiplied by the amount which may be taken
into account under Internal Revenue Code Section 415(b) (1) (B)
with respect
II-6
to such Participant under the Plan for such limitation year.
For purposes of applying the limitations of Codes Section 415, the
"projected annual benefit" for any participant is the benefit, payable
annually, under the terms of the Plan determined pursuant to
Regulations 1.415-7(b) (3).
For purposes of applying the limitations of Code Section 415,
"protected current accrued benefit" for any Participant in a defined
benefit plan in existence on July 1, 1982, shall be the accrued
benefit, payable annually, provided for under question T-3 of the
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 an accrual of benefits does not have either an allocation
of Company contributions or forfeitures to a defined contribution plan
of at least 7.5 percent of Compensation for such year, or an accrued
benefit in a defined benefit plan in which he participates of not less
than the 3% minimum benefit as provided in Internal Revenue 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.
(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.
II-7
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
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.
(u) 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.
(v) Early Retirement Date: Attainment of age 55 with five Years of
Service.
(w) Effective Date of this Plan: First day of the Plan Year beginning
January 1, 1990.
(x) Eligibility Computation Period: The consecutive 12 month period
beginning on the date on which the Employee commenced employment, and
successive consecutive 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.
(y) Employee: employees of the Employer and shall include leased employees
within the meaning of Section 414 (n) (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 Code, the term
"Employee" shall not include those leased employees covered by a plan
described in Section 414(n)(5) of the Code
II-8
unless otherwise provided by the terms of the plan other than this
amendment.
(z) 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.
(aa) 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).
(bb) Section 414(q) (6) (B) of the Code(u) Fund Account: The amount of
assets which, together with any Cash Values of any Contracts on the
Participant's life, shall be sufficient to provide a fully funded
Accrued Benefit, as defined in 2.1(a) (i) above, at the Normal
Retirement Date.
(cc) 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
II-9
414(b), (c), (m) and (o) shall be treated as separate employers.
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.
(dd) 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
2.1 (hh). Highly Compensated Former Employees shall be treated as
Highly Compensated Employees.
(ee) Highly Compensated Participant: Any Highly Compensated Employee who is
eligible to participate in the Plan.
II-10
(ff) Insurance Purchase Direction: The Company hereby directs Trustee to
purchase insurance as follows, pursuant to Paragraph 6.4: No insurance
shall be purchased.
(gg) Insurer: Any legal reserve life insurance company.
(hh) Key-Employee: Any Employee or former Employee (and his Beneficiary)
who, at any time during the Plan Year or any of the preceding four
Plan Years, is:
(a) An Officer. An Officer is an officer in fact and who earns for the
Compensation period in excess of one and one-half (1-1/2) times or
150% of the Code Section 415 dollar limit for defined contribution
plans. 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
If no one in the Company has Compensation in excess of 1-1/2 times or
150% of the defined contribution dollar limit, then the one officer
with the highest Compensation is considered a Key Employee.
(b) A Shareholder. A Shareholder is any Employee who:
(i) owns more than 5% interest in any entity comprising the
Employer or,
(ii) is one of 10 Employees who own more than 1/2% interest in
any entity comprising the Employer and who also own the largest
interests in these entities and who have Compensation for the
Compensation period in excess of the Code Section 415 dollar
limit for defined contribution plans. This category shall include
no more than ten (10) Employees. If two Employees own equal
interests in the Employer, then the Employee who earns more
Compensation than the other will be considered as owning the
greater interest. This determination is made based on ownership
during the Plan Year including the Determination Date and the
preceding 4 Plan years, in accordance with Regulations
promulgated under Code Section 416.
II-11
(iii) owns 1% or more interest in the Employer and earns
Compensation from the Employer in excess of $150,000 during the
Compensation period.
(c) A Beneficiary of a Key Employee is a Key Employee.
The determination of who is a Key Employee will be made in accordance
with Code Section 416(i) (1) and the Regulations thereunder. Ownership
shall be determined under the attribution rules prescribed in Code
Section 318. Non-Key Employees are Employees who are not Key
Employees. Compensation means compensation as defined in Code Section
415(c) (3), but including amounts contributed by the Company pursuant
to a salary reduction agreement which are excludable from the
Employee's gross income under Code Section 125, 402(a) (8), 402(h) or
403(b).
(ii) Leased Employee: Any person who is not an employee of the Company and
who has, for a period of 1 or more years, and on a substantially
full-time basis, provided services to the Company of a type
historically performed by Employees of the Company, which services are
or have been provided pursuant to an agreement between the Company and
a leasing organization. For any Plan Year, any Leased Employee shall
be treated as an Employee of the Company for purposes of the
participation standards of Article 3, the benefit standards of Article
4, the contribution standards of Article 5 and the vesting standards
of Article 10 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.
II-12
(jj) Length of Service Required:
(1) On the Effective Date of this Plan: 1 Year
(2) After the Effective Date of this Plan: 1 Year
(kk) 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 (including any fractional parts of a month) in
the limitation period, and the denominator of which is 12.
(11) 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.
(mm) Maximum Participation Age Required: None
(nn) Minimum Participation Age Required:
(1) On the Effective Date of the Plan: 21
(2) After the Effective Date of the Plan: 21
(oo) Named Fiduciary: President of the Company, except that if the Company
is an unincorporated business, the proprietor of the Company, if a
sole-
II-13
proprietorship, or the partner designated in the summary plan
description for the Plan for purposes of service of legal process.
(pp) Non-Highly Compensated Employee: shall mean an Employee of the
Employer who is neither a Highly Compensated Employee nor a Family
Member.
(qq) Non-Key Employee: Any Employee who is not a Key-Employee.
(rr) Normal Form of Retirement Benefit: Qualified Joint and Survivor
Annuity
(ss) Normal Retirement Age: The earlier of
(1) the Participant's 65th birthday or the date 5 years following a
Participant's commencement of participation in the Plan,
whichever is later; or
(2) the Normal Retirement Date.
(tt) Normal Retirement Date: The first day of the month coincident with or
following the Participant's 65th birthday.
(uu) Participant: shall mean any Employee of the Employer who has met the
eligibility and participation requirements of the plan.
(vv) Participation Date: The first day of the first Plan Year after an
Employee completes his applicable Minimum Participation Age and Length
of Service Requirements.
(ww) Plan Administrator: Company
(xx) Plan Year: Any period of one year ending December 31st. There will be
a short plan year October 1, 1989 through December 31, 1989.
Thereafter, the Plan Year shall be the one year period commencing
January 1st. and ending December 31st.
(yy) Safe Harbor Plan: A money purchase pension plan with a nonintegrated
employer contribution rate of at least 7 1/2 percent of Compensation
and providing for immediate participation and full and immediate
vesting.
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(zz) Service for Predecessor Employer: In any case in which the Company
maintains a plan of a predecessor employer, service for such
predecessor shall be treated as service for the Company, and in any
case in which the 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 the Company.
(A) Shareholder-Employee: If the Company is an S Corporation, an Employee
of the Company who either individually or together with his spouse,
children, grandchildren and parents, owns more than 5% of the
Company's outstanding stock on any day during the Plan Year.
(B) Social Security Retirement Age: the age used as the retirement age for
the participant under Section 216(1) of the Social Security Act,
except that such section shall be applied without regard to the age
increase factor, and as if the early retirement age under Section
216(1) (2) of such Act were 62.
(C) S Corporation: An electing small business corporation, within the
meaning of Internal Revenue Code Section 1362(a).
(D) 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 Participants, under this
Plan and any plan of an Aggregation Group, measured as of the
Determination Date.
Maximum Taxable Wage Earnings which may be considered wages for such year under
Code Section 3121(a)(1).
(F) 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
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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).
(G) Top-Heavy Plan Year: A particular Plan Year commencing after December
31, 1983, in which the Plan is a Top-Heavy Plan.
(H) 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;
(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
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(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.
(I) Trust Situs: State of Pennsylvania
(J) Trustee: The Trustee or Trustees named above and any successor Trustee
or Trustees.
(K) 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.
(L) Year of Participation: The consecutive 12 month period beginning on
the first day of the Plan Year, but including only those Plan Years
beginning with the Plan Year within which the Employee commenced
Participation. A Year of Participation shall be the accrual
computation period. If the accrual computation period is or has been
changed, by reason of a change in the Plan Year or otherwise, an
Employee will be credited with 1,000 hours of service for purposes of
benefit accrual in the Year of Participation after the last day of the
last consecutive 12 month accrual computation period before the
change, if any, and before the first day of the first accrual
computation period after the
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change, if the actual number of hours of service credited to the
Employee in that Year of Participation is equal to or greater than the
product of 1,000 multiplied by a fraction, the numerator of which is
the number of months in that Year of Participation, and the
denominator of which is 12.
(H) Year of Service: For purposes of vesting, any Vesting Computation
Period in which an Employee has not less than 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 to receive credit for such fractional year for
purposes of eligibility. For purposes of benefit accrual, any accrual
computation period in which an Employee has not less than 1,000 hours
of service.
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ARTICLE THREE
ELIGIBILITY
3.1 All Employees in the employ of the Company on the Effective Date of
this Plan shall participate as of the Effective Date of this Plan, provided that
on such date they have met the Minimum Participation Age and Length of Service
requirements applicable to such Employees, and provided further, that on the
date on which they commenced employment with the Company, they had not attained
the Maximum Participation Age.
In the event that any Employee in the employ of the Company on the Effective
Date of this Plan does not meet the applicable minimum Age and Service
requirements on the Effective Date of this Plan, and is not excluded by any
Maximum Participation Age requirement, such Employee shall commence
participation on his applicable Participation Date.
For purposes of Maximum Participation Age requirements, in the determination of
the date an employee begins employment, any such time which is included in a
period of service which may be disregarded under the Break in Service rules
contained in Paragraph 3.7 shall not be taken into account.
3.2 All Employees whose employment commences after the Effective Date of
this Plan shall commence Participation on their applicable Participation Date,
provided, that on the date on which they commenced employment with the Company,
they had not attained the Maximum Participation Age.
For purposes of the Maximum Participation Age requirements, in the determination
of the date an Employee begins employment, any such time which is included in a
period of service which may be disregarded under the Break in Service rules
contained in Paragraph 3.7 shall not be taken into account.
3.3 Notwithstanding any service requirement of less than one year which may
be contained herein, no Employee who is credited with 1,000 or more hours of
service in an Eligibility Computation Period shall not 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 Benefit accrual, according to the
following:
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(a) An hour of service is each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for the 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 the 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:
(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, 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 the Company regardless of whether such payment is
made by or due from the Company directly, or indirectly through, among
others, a trust fund, or insurer, to which the 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 the Company.
The same hours of service shall not be credited both under
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subparagraph (a) or subparagraph (b), as the case may be, and under
this subparagraph. Crediting of hours of service 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.
(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;
(ii) The birth of a child of the individual;
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(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 required to be taken into account
under this Paragraph by
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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 10 shall apply.
For purposes of benefit accrual, the provisions of Article 11 shall apply.
Notwithstanding any provision of the Plan to the contrary, in the case of an
Employee who sustains a Break in Service under a Plan that includes a Length of
Service requirement in excess of one year, provided such Employee has not
satisfied such Length of Service requirement prior to incurring a Break in
Service, service before such Break in Service shall not be taken into account
for purposes of eligibility.
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 other provisions of the Plan, for purposes of
determining the number or identity of Highly Compensated Employees or for
purposes of the pension requirements of Section 414(n) (3) of the Code, the
employees of the Employer shall include individuals defined as Employees in
Section 2.1(y) of the plan.
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3.10 Participation and Accrual. A leased employee within the meaning of
Section 414(n) (2) of the Code shall become a Participant in, and accrue
benefits under, the plan based on service as a leased employee only as provided
in provisions of the plan other than this Section 3.
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ARTICLE FOUR
RETIREMENT BENEFITS
4.1 The Normal Retirement Benefit contemplated for every participant,
commencing on his Normal Retirement Date, shall be a pension for life, payable
monthly, in the Normal From of Retirement Benefit, and in an amount determined
by the Benefit Formula specified in Article 2.
4.2 The following limitations on retirement benefits shall apply:
(a) Basic Limitation: Regardless of any other provision of this Plan, no
annual benefit payable to a Participant hereunder, and under any other
qualified defined benefit 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 Sections 414(b), (c) or (m) or which the Company
is also a member), shall exceed the Maximum Permissible Amount, namely
the lesser of:
(i) $90,000; or
(ii) 100 percent of the Participant's annual compensation for the most
highly paid 5 consecutive Limitation Years during which he was an
Employee, divided by 5.
For purposes of applying these limitations, "Compensation" shall mean
the Participant's "wages, salaries, fees for professional services and
other amounts received for personal service actually rendered in the
course of employment with the Company, and such other amounts as are
specified by Treasury Department Regulation Section 1.415-2(d)(1).
Compensation shall exclude all items specified in Treasury Department
Regulation Section 1.415-2(d) (2), including contributions to a plan
of deferred compensation, amounts realized from qualified or
nonqualified stock options, and other amounts which receive special
Federal Income Tax benefit (such as contributions to 403(b) annuity
contracts or premiums qualifying for exclusion from income under
Section 79 of the Code)." 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
IV-1
determined without regard to any exclusion under Internal Revenue Code
Section 911) from the Company."
If the retirement income benefit under the Plan begins before age 62,
the determination as to whether the dollar limitation has been
satisfied shall be made by adjusting such dollar limitation to the
actuarial equivalent of a $90,000 annual benefit beginning at age 62,
but not below $75,000, if the benefit begins at or after age 55; or if
the benefit begins before age 55, the amount which is the actuarial
equivalent of the $75,000 limitation for age 55. If the retirement
income benefit under the Plan begins after age 65, the determination
as to whether the dollar limitation has been satisfied shall be made
by adjusting such dollar limitation to the actuarial equivalent of a
$90,000 annual benefit beginning at age 65.
For purposes of making any adjustments in Maximum Permissible Benefit
required by this paragraph 4.2, the interest rate to be used shall be
as specified in the definition of Actuarial Equivalence contained
herein, but no less than 5 percent when the Plan benefit is paid in a
form other than a single life annuity, or if the benefit commences
prior to age 62; but no more than 5 percent if the benefit commences
after age 65.
The dollar limitation mentioned in this Subparagraph shall be adjusted
so as to be equal to the maximum dollar limitation for defined benefit
plans prescribed by the Secretary of the Treasury or his delegate. No
such adjustment shall be taken into account before the year for which
such adjustment first takes effect. However, no such adjustment shall
affect the benefit payable to any terminated or retired vested
Participant, except to the extent required to permit payment of an
actuarially equivalent benefit, for a retirement benefit commencing
after Normal Retirement Date. The computation of such adjustment shall
be as follows in the case of a separated Participant:
The accrued benefit payable in the Normal Form of Retirement
Benefit shall be multiplied by a fraction, the numerator of which
is the dollar limitation in the Limitation Year of computation,
and the denominator of which is the dollar limitation in effect
in the Limitation Year in which the Participant
IV-2
separated from service. The result of this multiplication is the
applicable limitation, notwithstanding the 100% of computation
limit referred to above.
(b) Exemption to Basic Limitation: Notwithstanding the limitation se forth
in Subparagraph (a) above, the benefits payable with respect to a
Participant under any defined benefit plan shall be deemed not to
exceed the limitation of Subparagraph (a) if:
(1) the annual benefit payable with respect to such Participant under
such Plan and under all other defined benefit plans subject to
Subparagraph (a) above does not exceed $10,000 for the Limitation
Year, or any prior Limitation Year, and
(2) the Company has not at any time maintained a defined contribution
plan in which the Participant participated.
(c) Secondary Limitation: The limitations in both Subparagraph (a) and (b)
shall be reduced, in the case of any Employee who has less than 10
years of Service with the Company for purposes of eligibility at the
time of commencement of receipt of benefits, by multiplying the
limitations by a fraction, the numerator of which is the number of
Years (or completed months thereof) of Service with the Company, and
the denominator of which is 10. A month of service is any month in
which the Employee is credited with 83 or more hours of service.
(d) "Annual Benefit" Defined: For purposes of Subparagraph (a) above,
"annual benefit" means the benefit payable tin the form of a straight
life annuity with no ancillary benefits, or a qualified joint and
survivor annuity, if specified as the Normal Form of Retirement
Benefit. Benefits not directly related to retirement, as well as
benefits attributable to employee contributions or rollover
contributions, shall not be taken into account. If a qualified joint
and survivor annuity is the Normal Form of Retirement Benefit,
optional modes of settlement under the Plan cannot result in payments
exceeding the basic limitation of Subparagraph 4.2 computed on the
basis of a straight life annuity.
(e) Actuarial Adjustment for Alternative Forms of Benefits:
Notwithstanding any other provision of
IV-3
this Plan, if the Annual Benefit is payable under the plan to a
participant in the form other than a straight life annuity, or a
qualified joint and survivor annuity, the Maximum Permissible Amount
shall be adjusted to the equivalent of a straight life annuity
beginning at the same age. The interest rate assumption used for
determining the actuarial equivalence of such other forms of benefits
will be the greater of the rate specified in the definition of
Actuarial Equivalence contained herein, or 5 percent.
(f) 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 the Company (or by any other entity which is a member of a
controlled group of entities, as defined in Internal Revenue Code
Section 414(b), (c) and (in), of which the Company is a member), the
sum of the Defined Benefit Fraction and the Defined Contribution
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 any defined contribution plan of the Company,
first to any profit sharing plan of the Company, and next to any money
purchase pension plan of the Company.
Such reduction shall be effected by reducing the sum of the current
Limitation Year Annual Additions to the Participant's account, so that
the defined contribution fraction does not exceed 1.0 minus the
defined benefit fraction at the end of the Limitation Year.
Provided further, that if this reduction is insufficient to reduce the
overall limit to 1.0, then the defined benefit fraction shall be
reduced to the extent necessary to bring about compliance.
(g) Restrictions on benefits for highly-paid Employees within 10 years of
Plan commencement: The following limitation shall apply to those
Employees who are among the 25 Employees most highly paid at the time
of the Plan's adoption (including Employees not participating on such
date), and whose accrued Normal Retirement Benefit exceeds $1,500
(herein referred to as the "top 25"):
(1) If, within 10 years after the date of the Plan's adoption, the
Plan is terminated, no
IV-4
benefit shall be paid to such Employee out of Company
contributions (or funds attributable thereto) in excess of such
benefits which can be provided by the greater of (A) or (B)
below:
(A) $20,000, or if greater, an amount computed as follows: 20
percent of the average of the annual compensation of the
Employee during the 5 Limitation Years preceding the date
this restriction is applied (excluding annual compensation
in excess of $50,000), multiplied by the number of years
between the date of adoption of the Plan; and the earliest
to occur of:
(i) the date of termination of the Plan;
(ii) the date the benefit of the Employee described in (g)
above becomes payable.
For purposes of determining the contributions which may be used
for the benefit of an Employee when (ii) of this Subparagraph
applies, the number of years taken into account shall be
recomputed for each year from the date of application to the date
payment is actually made.
(B) If this Plan is covered by the Pension Benefit Guaranty
Corporation ("PBGC") with respect to a substantial owner, as
defined in Section 4022(b) (5) of ERISA, a dollar amount
which equals the present value of the benefit guaranteed for
such Participant under Section 4022 of ERISA, or if the Plan
is not terminated, the present value of the benefit that
would be guaranteed if the Plan terminated on the date the
benefit commences, determined in accordance with PBGC
regulations; and with respect to all other Participants, a
dollar amount which equals the present value of the maximum
dollar benefit described in Section 4022(b) (3) (B) of ERISA
(determined on the date the Plan terminates or on the date
benefits commence, whichever is earlier, and determined in
accordance with PBGC regulations) without regard to any
other limitation in Section 4022 of ERISA.
IV-5
(2) The above limitation shall also apply, during the first 10 years
after the adoption of the Plan, to any former Employee who has
retired or otherwise terminated his service with the Company, as
well as to any Employee still employed by the Company, even if no
longer an active Participant in the Plan, as long as such
Employee was a member of the top 25.
However, notwithstanding anything to the contrary contained
herein, the restrictions on benefits for the top 25 shall not
apply to limit the amount of current retirement or disability
income benefit payments made pursuant to Paragraphs 7.1 and 8.1;
provided that at the time of each payment the Plan is in full
effect.
(3) If the Plan is amended to increase benefits substantially, these
limitations will apply in the case of an increase, as follows: in
lieu of the dollar limitation provided above, the limit shall be
the greatest of the following 4 amounts:
(i) Company contributions (for funds attributable thereto) which
would have been applied to provide the benefit for the
Employee if the previous plan had been continued without
change;
(ii) $20,000;
(iii) The sum of: (1) Company contributions (or funds
attributable thereto) which would have been applied to
provide benefits for the Employee under the previous plan if
it had been terminated the day before the effective date of
the change; and (2) an amount computed by multiplying the
number of years after that date by 20 percent of the average
of the annual compensation of the Employee during the 5
Limitation Years preceding the date this restriction is
applied (excluding compensation in excess of $50,000);
(iv) If this Plan is covered by the Pension Benefit Guaranty
Corporation ("PBGC") with respect to a substantial owner, as
defined
IV-6
in Section 4022(b) (5) of ERISA, a dollar amount which
equals the present value of the benefit guaranteed for such
Participant under Section 4022 of ERISA, or if the Plan is
not terminated, the present value of the benefit that would
be guaranteed if the Plan terminated on the date the benefit
commences, determined in accordance with PBGC regulations;
and with respect to all other Participants, a dollar amount
which equals the present value of the maximum dollar benefit
described in Section 4022(b) (3) (B) of ERISA (determined on
the date the Plan terminates or on the date benefits
commence, whichever is earlier, and determined in accordance
with PBGC regulations), without regard to any other
limitation in Section 4022 of ERISA.
(4) The term "benefit" includes: any amounts payable to a Participant
because of termination of employment, any periodic retirement or
disability payments, and any separately determined and allocable
cost of a death benefit payable after retirement. The term
"benefit" does not include the cost of any death benefit with
respect to an Employee before retirement, nor the amount of any
death benefit actually payable after the death of the Employee,
whether such death occurs before or after retirement.
(5) If the periods measured to apply these limitations include
partial years as well as full years, any partial year shall be
dropped from the computation.
(6) Any Company contributions that, in the event of early
termination, cannot be used for the benefit of the top 25 under
the above limitation, shall be equitably apportioned among the
remaining Participants; provided, that if all liabilities to
other Employees arising out of termination of the Plan have first
been satisfied, excess reserves arising from the above
limitations on benefits for the top 25 may be used in a
nondiscriminatory manner to benefit the restricted Employees.
IV-7
This Subparagraph (g) and the following Subparagraph (h) are included
in this Plan under the requirements of Treasury Regulation Section
1.401-4(c), and this limitation shall become ineffective at such time
that a Regulation Section, or any substitute thereof, is no longer
effective or applicable.
(h) Special Arrangement for Payments to Highly-Paid Employees in Certain
Cases: In the event that the benefits of any of the top 25 become
payable within the first 10 years of the Plan's starting date, the
payment in one lump sum of the entire amount to which the retired,
terminated, or disabled Participant is entitled, while the Plan is in
full effect, shall not be restricted, provided the following
conditions are met.
The Participant must enter into a written agreement with the Trustee,
binding on the Participant's estate, in which the Participant agrees
to repay to the Trust a sum equal to the Actuarial Equivalent of the
amounts by which the Participant's monthly retirement benefits herein
would have been decreased during the Participant's then remaining
lifetime pursuant to the provisions of this immediately preceding
Subparagraph, in the event the Plan is terminated within the first 10
years after establishment. The Participant must also guarantee payment
of any amount required to be repaid by the agreement, by depositing
with a depositary acceptable to the Trustee, simultaneously with the
aforementioned lump sum payment, property having a fair market value
equal to 125 percent of the amount repayable if the Plan had been
terminated on the date of payment of said entire amount in one lump
sum. Said property is to be held by the depositary until receipt of a
certification by the Trustee that the Participant (or his estate) is
no longer obligated to repay any amount under the agreement. The
Participant must further agree that if the market value of the
property held by the depositary falls below 110 percent of the amount
which would then be repayable if the Plan were then to be terminated,
he will deposit additional property necessary to bring the value of
the property held by the depositary up to the 125 percent of such
amount.
IV-8
ARTICLE FIVE
CONTRIBUTIONS
5.1 The Company shall pay over to the Trustee, no later than such time as
may be prescribed by Federal Law, the funds required to pay the initial and
renewal premiums on the Contracts issued under this Plan, and to provide the
amounts required under Paragraph 4.1, based on the actuarial method used by the
enrolled actuary of the Plan, and subject to the minimum funding requirements
prescribed by law. These payments shall be irrevocable contributions to the
Trust, except as provided under Article 17.
5.2 The Company shall pay all the costs of this Plan.
5.3 Any amounts released by the forfeiture by any Participant of all or
part of his Accrued Benefit may not be used to increase the benefits which other
Participants would otherwise receive under the Plan. They shall be used only to
reduce the Company's contributions in the current or succeeding years.
5.4 The Fund Account shall be valued at least annually.
5.5 Participants are not permitted to make any voluntary contributions
under this Plan.
5.6 The fact that a benefit shall accrue to the Participant shall not vest
in the Participant 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.
V-1
ARTICLE SIX
INSURANCE BENEFITS AND CHANGE OF BENEFITS
6.1 The Trustee, if directed by the Company to purchase insurance pursuant
to this Paragraph 6.1, shall within 60 days apply to the Insurer for, and
purchase on the life of each participant:
(a) If insurable at standard rates or substandard rates, an ordinary life
or term insurance contract in an amount specified by the Company, not
to exceed 100 times the projected monthly normal retirement benefit.
(b) If not insurable at standard or substandard rates, an annual premium
deferred annuity contract, in an amount that the Company shall in its
sole discretion decide, and so direct the Trustee to purchase, but in
no case less than the amount which can be purchased by the minimum
premium required by the Insurer selected by the Company.
Each Contract purchased under Paragraph 6.1 or 6.2 shall provide that the
dividend plan shall be premium reduction. Any dividend payable upon maturity of
the policy or annuity shall be payable in cash to the Trustee.
6.2 As of the first day of the current Plan Year, the Company shall
determine whether the Contract on the life of each Participant provides the
amount of insurance or annuity indicated pursuant to Subparagraph 6.1(a) or (b),
in an evaluation to determine whether the insurance can be incrementally
increased or decreased as follows. If the Contract on the life of each
Participant does not provide the amount of insurance or annuity indicated
pursuant to Subparagraph 6.1(a) or (b), the Trustee, when so directed by the
Company, shall take such action as set forth below.
(a) The Trustee, when so directed by the Company, pursuant to Subparagraph
2.1(v) above shall apply for an additional Contract on the life of
such Participant, in an amount indicated in Subparagraph 6.1(a) or
(b), in accordance with his current Compensation, but subject to any
minimum face amount requirements of the Insurer selected by the
Company.
(b) If the normal retirement benefit projected for a Participant is less
by $20.00 or more per month than
VI-1
that which was computed for the previous Plan Year on the basis of the
then existing Compensation, the Trustee, when so directed by the
Company, shall have the then existing Contracts reduced to an amount
equal to the requirements of Subparagraph 6.1(a) or (b), but no
annuity contract shall be reduced unless necessary to prevent
over-funding the Plan.
(c) If it becomes necessary to reduce or surrender an existing Contract,
the Trustee may either surrender the excess insurance coverage or
retain it as a general investment of the Fund Account. If any portion
of the value of the policies or annuities issued on the life of the
Participant shall be released, such portion shall be deposited into
the Fund Account. In addition, no Contracts shall be purchased within
five years of Normal Retirement Date, unless otherwise directed by the
Company. Provided, however, that the Participant may continue (limited
to the extent of voluntary contributions) the entire premium costs of
continuing the amount of the Contract to be reduced or surrendered, in
which case the Contract or Contracts will not be reduced or
surrendered.
(d) Participants who commence or recommence participation in the Plan on
any day other than the first day of the Plan Year will not have
insurance purchased on their behalf until after the first day of the
first Plan Year subsequent to such date of entry.
6.3 In lieu of the purchase of insurance provided for in Paragraph 6.1,
Trustee shall purchase, if directed by the Company to purchase insurance
pursuant to this Paragraph 6.3, by uniform procedure applicable to all
Participants, within 60 days of being so directed, paid-up or annual premium
life insurance, endowment, retirement income or annuity contracts for the
benefit of each Participant. The aggregate amount of the premiums paid on all
ordinary life insurance contracts purchased for the benefit of any particular
Participant shall, at all times, be less than 50 percent of the total Company
contributions for the benefit of said Participant. The aggregate amount of the
premiums paid on all term life insurance contracts purchased for the benefit of
any particular Participant shall, at all times, be less than 25 percent of the
total Company contributions for the benefit of said Participant.
If any Company contributions for the benefit of the Participant are applied to
pay premiums on both ordinary life insurance and term life insurance policies,
the total of the term life
VI-2
insurance premiums and one-half of the ordinary life insurance premiums shall
be less than 25 percent of aggregate contributions. The percentage of such
Company contributions to be used to purchase insurance shall be specified by the
Company to the Trustee, and shall be non-discriminatory with regard to each
Participant, measured for all Participants either as a percentage of
contributions or as a ratio of life insurance benefits to the projected monthly
retirement benefits, subject to the limitations listed in this Paragraph.
6.4 The Company reserves the right to change its directions to Trustee
pursuant to the provisions of this Article, provided that such changes do not
result in discrimination in favor of officers, shareholders, or highly-
compensated Employees.
6.5 Each application shall designate, and each policy shall provide, that
the Trustee remain the owner of the Contract during the lifetime of the
Participant. All rights, benefits, and privileges under such Contract shall be
vested in the Trustee.
To the extent practical, and in the best interests of the Plan and its
Participants, the Trustee shall arrange that all Contracts purchased under this
Plan shall bear the same premium due date.
6.6 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 9.6 below. 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.
6.7 Each Contract may be subject to the terms of an Annuity Purchase Rider,
applied for by the Trustee and issued as part of the Contract, which provides
for the purchase of additional monthly retirement benefit at the participant's
retirement.
6.8 Trustee shall convert the entire value of the 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
VI-3
the date any benefits would, if forfeitable, be forfeited pursuant to Paragraph
10.1, but if a distribution is so made to such participant prior to that time,
the Trustee shall, if directed by the Plan Administrator, distribute the
contract to the participant.
in the event that the Participant is less than 100% vested in his Accrued
Benefit at the time of distribution, the Trustee may 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 values of his vested
interest in excess of the Cash Value of the Contract to be allocated to the
remaining portion of his Accrued Benefit.
6.9 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.
6.10 If an eligible Employee or Participant dies after a contribution has
been made in his behalf for a life insurance or annuity Contract, but before the
Contract is in effect, the death benefit from such Contract in such a case shall
be limited to the premiums so contributed. Neither the Plan, the Trustee, nor
any other party shall be liable to pay any additional death benefit resulting
from the failure to apply for Contracts as directed by the Company.
611 Trustee's Payments: From the funds available to them, the Trustee shall
pay to the Insurer the initial premiums in advance and renewal premiums as they
fall due. If such funds are insufficient to pay the premiums as they fall due,
the Trustee shall notify the Company of this fact within 15 days prior to the
expiration of the grace period allowed in the Contracts.
In such eventuality, the Company shall either provide the necessary funds, or
shall instruct the Trustee to:
(a) Pay an installment of the premium due, if permitted by the Insurer; or
(b) Borrow proportionately against the loan value of the Contracts to
provide the deficient funds (repayment to be made in a like
proportionate manner); or
(c) Permit the Contracts to lapse for non-payment, in which case, unless
instructed to the contrary by the Company, the Trustee shall elect the
reduced paid-up insurance nonforfeiture option in the Contracts.
VI-4
ARTICLE SEVEN
COMMENCEMENT OF RETIREMENT BENEFITS
7.1 A Participant may elect to retire on his Normal Retirement Date,
whereupon his eligibility for additional benefit accruals shall cease. If a
Participant remains in the employ of the Company subsequent to his Normal
Retirement Date, he shall receive a retirement benefit commencing at his actual
retirement, in an amount that is no less than the amount he would have received
if he had retired at his Normal Retirement Date, but which shall be, if greater,
the actuarial equivalent of the Participant's share of Plan assets, determined
by segregating on the books and records of the Trust the amount required, on an
actuarially equivalent basis, to purchase his Normal Retirement Benefit, and by
investing said amount and adjusting said segregated amount for investment gains
and losses, no less frequently than on each Plan Anniversary. If the Company
consents, a participant may retire on his Early Retirement Date, whereupon his
eligibility for additional benefit accruals shall cease.
If a Participant has separated from service with a vested benefit before the
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.
7.2 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. The Trustee shall distribute to a retired
Participant the value of his vested amount in accordance with the provisions of
Article 11.
7.3 In the case of Early Retirement, the benefit shall commence on the
Early Retirement Date or Normal Retirement Date, or on any intervening date, and
the amount of such Early Retirement Benefit shall be determined as follows:
(a) If the payment of benefits commences at Normal Retirement Date, the
amount of the benefit shall be the Participant's vested Accrued
Benefit, as accrued at his Early Retirement Date.
VII-1
(b) If the payment of benefits commences prior to Normal Retirement Date,
the amount of the benefit shall be the actuarial equivalent of the
Participant's vested Accrued Benefit payable at Normal Retirement
Date, as accrued at his Early Retirement Date. The actuarial
equivalent shall be determined as the benefit which can be provided,
at the Participant's attained age on the date benefits commence, by
the present value at such date of the amount necessary to provide the
Participant his Vested Accrued Benefit at Normal Retirement Date.
7.4 Payments by Trustee to any Participant of such Participant's interest
hereunder shall begin on the first day of the month following the latest to
occur of
(a) Normal Retirement Age;
(b) The Plan Anniversary Date coinciding with or following termination of
service with the Company. However, in no event shall such payments
commence after April 1st of the calendar year following the calendar
year in which he attains age 70 1/2 or, in the case of a Participant
who is not a 5% owner (as defined in Subparagraph 2.1(x)), in which he
retires, whichever is the later. Distributions to 5% owners of Company
must begin no later than the April 1st of the calendar year following
the calendar year in which they attain age 70 1/2.
Trustee may make payments at an earlier date than herein above set forth, as
directed by the Plan Administrator, 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 Plan Administrator as to the
form in which the benefit shall be payable shall be required as provided in
Subparagraph 11.2(d). In no event may an election be made which would violate
the restrictions contained in Subparagraph 11.2(d), or which would defer
commencement of benefits beyond the calendar year following the calendar year in
which he attains age 70 1/2.
VII-2
ARTICLE EIGHT
DISABILITY BENEFITS
8.1 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. Total disability shall mean disability of either a physical or
mental nature, so as to prevent the Participant from performing the duties of
his employment with the Company. Permanent Disability shall mean disability of
either a physical or mental nature, which is expected to last for a period of 6
months or longer, and which results in a termination of the Participant's
employment with the Company. All Participants shall be treated alike under
similar circumstances.
8.2 A Participant retiring because of such disability shall be entitle to
commence receiving benefits on the Disability Retirement Date or Normal
Retirement Date, or on any intervening date, and the amount of such disability
retirement benefit shall be determined as follows:
(a) If the payment of benefits commences at Normal Retirement Date, the
amount of the benefit shall be the Participant's Accrued Benefit, as
accrued at his Disability Retirement Date.
(b) If the payment of benefits commences prior to Normal Retirement Date,
the amount of the benefit shall be the actuarial equivalent of the
Participant's Accrued Benefit payable at Normal Retirement Date, as
accrued at his Disability Retirement Date.
8.3 In lieu of a determination of disability pursuant to Paragraph 8.1
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.
VIII-1
I
ARTICLE NINE
DEATH BENEFITS
9.1 If insurance is purchased in accordance with paragraph 6.1, the death
benefit, if the Participant dies prior to commencement of payment of his
retirement benefits, shall be the greater of:
(a) the sum of:
(1) the proceeds of the Contracts, and
(2) the Participant's actuarially determined share of the Fund
Account as of the next valuation date; or
(b) the sum of:
(1) the Cash Value of the Contracts, and
(2) the Participant's actuarially determined share of the Fund
Account as of the next valuation date.
Notwithstanding the above, in no event may the death benefit under Subparagraph
(a) above exceed 100 times the Participant's projected monthly Normal Retirement
Benefit.
9.2 If insurance is purchased in accordance with Paragraph 6.3, or if
purchased in accordance with Paragraph 6.1 nonetheless the conditions contained
in Paragraph 6.3 with respect to limitations on the purchase of insurance are
met with respect to a Participant, in the event of the death of such
Participant, prior to commencement of payment of retirement benefits, his death
benefits shall be the actuarially determined share of the Fund Account as of the
next valuation date, and the proceeds of any Contracts.
9.3 If no insurance is purchased or in force, in the event of the death of
a Participant prior to retirement, his death benefits shall be the actuarially
determined share of the Fund Account as of the next valuation date.
9.4 The actuarially determined share of the Fund Account shall be equal to
the present value of the Accrued Benefit under the Plan, less any Cash Surrender
Value attributable to policies on the Participant's life for which he has the
right to designate a beneficiary.
IX-l
9.5 The above described death benefit shall be paid to the Participant's
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
enumerated in Paragraph 11.2 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 enumerated in Paragraph 11.2, 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 11.2.
(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
enumerated in Paragraph 11.2 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
Beneficiary, shall direct the Trustee to designate a settlement
option as permitted in Paragraph 11.2 within 60 days after the
day on which a lump sum in full discharge of the death benefit
obligation first becomes payable.
9.6 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
IX-2
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:
(1) his widow or her widower, as the case may be;
(2) his issue, per stirpes;
(3) his parents;
(4) his brothers and sisters, per stirpes; and
(5) 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 the Participant's spouse consents in writing to such designation
or change, and the spouse's consent acknowledges the effect of such election,
and is witnessed by the Plan Administrator or a notary public, unless it is
established to the satisfaction of the Plan Administrator that such consent may
not be obtained because there is no spouse, because the spouse cannot be
located, or because of such other circumstance as may be prescribed by
regulations to be issued by the Secretary of the Treasury. Any such consent by a
spouse shall be effective only with respect to such spouse.
9.7 In the event a vested Participant separates from service with the
Company and subsequently dies before commencement of payment of benefits, the
amount of death benefits shall be determined under the provisions and
limitations of this Article and Article Eleven, but limited to his vested
Accrued Benefit, as determined on the day before his death, and the proceeds of
any Contracts (reduced by their Cash Value).
IX-3
ARTICLE TEN
NONFORFEITABLE BENEFITS
10.1 A Participant shall have a nonforfeitable right, prior to death, total
and permanent disability, or Normal Retirement Date, in 100% percent of his
Accrued Benefit derived from Company Contributions.
10.2 For purposes of determining Years of Service under Paragraph 10.1
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.
10.3 The vested portion of any Participant's Accrued Benefits shall be a
percentage of each Participant's Accrued Benefit on the basis of the
Participant's number of Years of Service according to the following schedule:
Years of Service Percentage
---------------- ----------
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
X-1
10.4 The nonforfeitable account of a Participant shall be the product of
his vested percentage times his Accrued Benefit. If the vesting schedule of the
Plan is or has been amended (including any change resulting from the operation
of Paragraph 19.4), for all Plan Years beginning with the Plan Year in which the
amended vesting schedule is effective, the vested percentage of a Participant's
Accrued Benefit shall be computed in accordance with the amended schedule.
However, at no time after the date of adoption of an amended vesting schedule
(or the effective date, if later) shall a participant's nonforfeitable Accrued
Benefit be less than an amount ("V") determined by the formula: V = A x C(1) + B
x (C(2) C(1)). For purposes of applying the formula: A is the vested percentage
at the date of adoption of an amended vesting schedule (or its effective date,
if later); B is the vested percentage at any time after the amendment computed
in accordance with the amended vesting schedule; C(1) is the Accrued Benefit at
the date of adoption of the amended vesting schedule (or is effective date, if
later), and C2 is the Accrued Benefit at any time subsequent to the date or
adoption (or its effective date, if later).
10.5 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 19.4. Such an election shall be irrevocable, and
must be filed with the Plan Administrator no later than 60 days after the day
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
X-2
time than such percentage determined without regard to such amendment.
10.6 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:
(a) the amount of his vested benefit;
(b) the amount of his pre-retirement death benefit;
(c) the Normal Retirement Date of the Plan;
(d) any benefits which are forfeitable if the Participant dies before a
certain date; and
(e) such other information as may be prescribed by regulations issued by
the Secretary of the Treasury or his delegate.
X-3
ARTICLE ELEVEN
PAYMENT OF BENEFITS
11.1 When a Participant's employment is terminated, the Plan Administrator
shall determine his vested interest.
(a) Distribution. If, upon termination of a Participant's employment for
any reason other than retirement, death or total and permanent
disability, the present value of the Participant's vested Accrued
Benefit shall not exceed $3,500 (or such lesser amount as may be
prescribed by the regulations of the Secretary of the Treasury
governing such payments), the Plan Administrator may direct the
Trustee to distribute the present value of the vested Accrued Benefit
to the Participant. If the present value of the Participant's vested
Accrued Benefit exceeds the amount specified in the preceding
sentence, the Participant and his spouse, if any, may file with the
Plan Administrator a written request for the payment of the entire
amount of the present value of his vested Accrued Benefit, and the
Plan Administrator may thereupon direct the Trustee to pay out this
amount. The present value shall be determined on the basis of the
definition of Actuarial Equivalence contained in Subparagraph 2.1(b),
but the interest rate shall not be 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. In no event may
the amount payable prior to Normal Retirement Date exceed the amount
payable as an Early Retirement Benefit.
If an Employee, upon termination for any reason other than retirement,
death or total and permanent disability, does not consent to the
payment of all of his vested Accrued Benefit, and if the then value of
such Accrued Benefit exceeds $3,500 (or such lesser amount as may be
prescribed by the regulations of the Secretary of the Treasury
governing such payments), the Employee's vested Accrued Benefit shall
be payable at Normal Retirement Date, or an actuarial equivalent
thereof, if benefit payments are to be received under the Early
Retirement provisions of the Plan.
XI-l
(b) Return to Service After Termination of Employment. If an individual
who has received a distribution of his vested benefit above,
representing less than 100 percent of the present value of his Accrued
Benefit, is rehired, and such distribution was made not later than the
second Plan Year following the Plan Year in which termination of
employment occurred, that rehired individual may repay the amount of
the distribution to the trustee together with interest. Such repayment
may be made not later than the later of:
(1) the end of the 5-year period beginning with the date of
distribution; or
(2) the end of the vesting computation period within which the
Participant has the 5th of 5 consecutive 1 year Breaks in
Service.
Interest shall be computed on the amount of the distribution, from the
date of such distribution to the date of repayment, compounded
annually from the date of the distribution, at the rate of 5%, or such
other rate as is determined under Internal Revenue Code Section 411(c)
(2) (C) in effect on the date of repayment. Upon such repayment, the
rehired individual shall, for purposes of benefit accrual, as defined
in Subparagraph 2.1(a), have his Years of Participation computed
without regard to any Break in Service years, but giving credit to the
pre-break years for benefit accrual. The rehired Employee who has
received such a repayable distribution of his vested benefit, and does
not repay such amount, shall not be credited with Years of
Participation prior to the separation from service for purposes of the
numerator in the benefit accrual fraction, as defined in Subparagraph
2.1(a), although such Years of Participation shall be included in the
denominator. Service disregarded under this Paragraph shall not be
disregarded for purposes of determining an Employee's eligibility to
participate, or his position on the Plan's vesting schedule.
It shall be the duty of the Company to give timely notification to any
rehired Employee, if such Employee is eligible to make a repayment, of
his right to make such repayment, and of the consequences of not
making such repayment.
If any Participant returns to service after terminating employment or
incurring a Break in
XI-2
Service, and he has not received a distribution from the Plan, the
Participant's pre-break Accrued Benefit will be aggregated with any
post-break Accrued t, following the definition of "Accrued Benefit" in
Subparagraph 2.1(a), to determine his total Accrued Benefit, so that
no duplication of benefits will result.
If any Participant returns to service after terminating employment or
incurring a Break in Service, and has received a distribution not
subject to the repayment provision described above, the Participant's
pre-break Accrued Benefit, following the definition of "Accrued
Benefit" in Subparagraph 2.1(a), will be taken into account to
determine his total Accrued Benefit, but the actuarial value at Normal
Retirement Date of any distribution made to the Participant shall be
an offset to any total Accrued Benefit subsequently payable under the
Plan to the Participant or his Beneficiary.
For purposes of vesting, an Employee who terminates his employment,
but returns to employment without a 1 year Break in Service, continues
to vest, starting at the point in the vesting schedule where he left
employment, in both his pre-separation and post-separation benefit
accruals. For an Employee who terminates his employment and returns to
employment after a Break in Service of 1 year or more, if such
Employee terminated employment with a non-forfeitable interest, upon
reemployment his pre-break Years of Service will be considered for
purposes of determining his vested interest in all subsequent benefit
accruals deriving from Company Contributions, after he has completed a
Year of Service. However, even if such Employee has no vested interest
when he terminates his employment, but he is reemployed before the
number of consecutive 1 year Breaks in Service equals or exceeds the
greater of 5 or the aggregate number of Years of Service, whether or
not consecutive, before such period, upon reemployment his pre-break
Years of Service will be considered for purposes of determining his
vested interest in all benefit accruals deriving from Company
Contributions, after he has completed a Year of Service.
11.2 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 7, 8
and 9 as
XI-3
provided herein. Payments made under Article 11.1 shall be in the form of
complete lump sum payments only.
(a) The basic mode of settlement for a Participant married on the date
benefits commence shall be a qualified joint and survivor annuity
contract, providing for non-increasing payments of an actuarially
equivalent value of the Participant's vested Accrued Benefit. 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 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
not to receive benefits in that form.
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 than one half of, nor greater than, the amount of
the annuity payable during the joint lives of the Participant and his
spouse, and which is the actuarial equivalent of a single annuity for
the life of the Participant.
The specific ratio of the survivor annuity to the joint life annuity
shall be 100%, unless the Participant requests otherwise, in which
case the ratio shall be determined by the Plan Administrator, subject
to the requirement that it be qualified.
Participants with respect to which benefits shall be paid, absent a
contrary election, in the form of a qualified joint and survivor
annuity, or a life annuity, are those who begin to receive payments on
or after the earliest date for which payments could be received in the
form of an annuity, whether by reason of Normal Retirement, Early
Retirement, Late Retirement or Disability Retirement, (the Annuity
Starting Date).
(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 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 9, and any
XI-4
retirement benefits shall be paid as provided under Subparagraph
11.2(d) below.
The Plan Administrator shall furnish to each Participant or surviving
spouse, in writing, 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 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
commencement of benefits.
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
XI-5
election has been revoked, another election may be made during the
applicable election period.
A Participant's benefits shall be distributed to him no later than
April 1st of the calendar year following the later of (i) the calendar
year in which the Participant attains age 70 1/2 or (ii) the calendar
year in which the Participant retires provided, however, that this
clause (ii) shall not apply in the case of a Participant who is a
"five" (5) percent owner" at any time during the five (5) Plan Year
period ending in the calendar year in which he attains age 70 1/2 or,
in the case of a Participant who becomes a "five" (5) percent owner"
during any subsequent Plan Year, clause (ii) shall no longer apply and
the required beginning date shall be the April 1st of the calendar
year following the calendar year in which such subsequent Plan Year
ends. Alternatively, distributions to a Participant must begin no
later than the applicable April 1st as determined under the preceding
sentence and must be made over the life of the Participant (or the
lives of the Participant and the Participant's designated Beneficiary)
or the life expectancy of the Participant (or the life expectancies of
the Participant and his designated Beneficiary) in accordance with
Regulations. Notwithstanding the foregoing, clause (ii) above shall
not apply to any Participant unless the Participant had attained age
70 1/2 before January 1, 1988 and was not a "five (5) percent owner"
at any time during the Plan Year ending with or within the calendar
year in which the Participant attained age 66 1/2 or any subsequent
Plan Year.
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.
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.
XI-6
(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 pre-retirement 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.
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 9.2(c) of this Article, the Plan Administrator
shall provide each Participant within the applicable period for such
Participant, a written explanation of the qualified
XI-7
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 9.2(b) applicable to a qualified joint and
survivor annuity.
The applicable period for a Participant is whichever of the following
periods ends last; (i) the period beginning with the first day of the
plan year in which the Participant attains age 32 and ending with the
close of the plan year preceding the plan year in which the
Participant attains age 35; (ii) a reasonable period ending after the
individual becomes a Participant; (iii) a reasonable period ending
after the respective notice of benefits prescribed in this Article
ceases to apply to the Participant; (iv) a reasonable period ending
after this Article first applies to the Participant. Notwithstanding
the foregoing, notice must be provide within a reasonable period
ending after the separation of service in case of a Participant who
separates from service before attaining age 35.
For purposes of the preceding paragraph, a reasonable period ending
after the enumerated events described in (ii), (iii) and (iv) is the
end of the two year period beginning one year prior to the date the
applicable event occurs and ending one year after that date. In the
case of a Participant who separates from service before the plan year
in which age 35 is attained, notice shall be provided within the two
year period beginning one year prior to separation and ending one year
after separation. If such a Participant thereafter returns to
employment with the employer, the applicable period for such
Participant shall be redetermined.
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).
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
XI-8
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.
XI-9
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:
All modes of settlement, both basic and optional, shall have an equal
present actuarial value at the time of commencement of payment.
No optional settlement shall be allowed for payments due under Article
7 and 8, 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
XI-10
present value of the total payments to be made to the Participant and
his Beneficiaries. No insurance contract distributed as provided below
may permit the time, amount or duration of payment to be not in
conformity with the above restriction.
At any time after payments commence, but before 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) Single life annuity for the life of the Participant.
(2) Payment of all or (in the case of (5) below) part of the
Participant's vested accrued benefit in a lump sum.
(e) The timing and amount of any payment to be made (limited to the unpaid
portion of a Participant's Accrued Benefit) under an optional mode of
settlement shall be determined by the Participant, or by the Insurer
whose payments are made under a Contract (subject to such rights as
the Contract reserves to the Participant), subject to the following
minimum distribution requirement: beginning in the later of the
calendar year following the calendar year in which the Participant
attains age 70 1/2, or in the case of a Participant who is not a 5%
owner (as defined in Subparagraph 2.1(x)), the calendar year following
the calendar year in which he retires, the amount to be distributed
each year shall be no less than the lesser of the unpaid portion of
the Participant's Account Balance or an amount equal to the quotient
obtained by dividing the entire unpaid portion of the Participant's
Account Balance at the beginning of such year by the life expectancy
of the Participant (or the joint life and last survivor expectancy of
the Participant and spouse (whichever is applicable)), determined in
either case initially as of the Measurement Date,--that is, the
January 1st coinciding with or following the date the Participant
attains age 70 1/2, or in the case of a Participant who is not a 5%
owner (as defined in Subparagraph 2.1(x)) as of the age (counted in
whole years) at the January 1st coinciding with or following the date
the Participant retires, by use of
XI-11
expected return multiples in Treasury Regulations Section 1.72-9, or
in case of payments by Insurer for the period computed by use of the
mortality tables utilized under the Contract, redetermined annually
for each calendar year commencing after the Measurement Date. In the
event the Participant's Beneficiary is not his spouse, and payments
are being made (other than by a life annuity) over a period of time
which requires for its justification taking into account the joint and
last survivor life expectancy of the Participant and his Beneficiary,
or the life expectancy of the Beneficiary, the life expectancy of the
Beneficiary shall not be redetermined annually, but rather shall be
reduced by one for each calendar year commencing after the Measurement
Date.
Any amount paid to a child shall be treated as if it had been paid to
a surviving spouse, if such amount will become payable to the
surviving spouse upon such child reaching maturity.
However, no distribution need be made in any year, or a lesser amount
may be distributed, if beginning with the year the minimum
distribution requirement first applies, the aggregate amounts
distributed by the end of any taxable year are at least equal to the
aggregate of the minimum amounts required to have been distributed by
the end of such year.
(f) Any sums remaining payable under an optional mode of settlement at the
death of a Participant, either before or after commencement of
distributions to him, shall be paid to his Beneficiary as follows:
If the beneficiary is the surviving spouse and distribution had not
previously commenced, the date on which distributions are required to
begin shall be the later of one year after the date of death of the
participant, or the date on which the Participant would have attained
age 70 1/2 (and if the surviving spouse dies before distributions to
such spouse begin, the rules contained in this subparagraph shall be
applied as if the surviving spouse were the Participant); provided,
that her entire interest is distributed over her lifetime, or over a
period not extending beyond her life expectancy.
If the beneficiary is other than a surviving spouse, and distribution
had not previously commenced, distributions must begin no later than
one year after the date of the Participant's death (or such later
XI-12
date as the Secretary of the Treasury may prescribe by regulations),
provided that the entire interest is distributed over the
Beneficiary's lifetime, or over a period not extending beyond the
Beneficiary's life expectancy.
Notwithstanding the foregoing, if the conditions stated above either
for commencement or method of distribution, as applicable to spousal
or nonspousal beneficiaries, as the case may be, are not met, and
distributions had not commenced prior to the death of the Participant,
then the entire interest of the Participant must be paid within five
years of the date of his death. However, if distribution had commenced
to the Participant under a method of distribution which takes into
account the life or life expectancy of the Participant, or the
Participant and his Beneficiary, the remaining portion of such
interest must be distributed at least as rapidly as under the method
of distribution in effect as of the date of the Participant's death.
(g) "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."
(h) 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.
Present value shall be determined on the basis of the definition of
Actuarial Equivalence contained in Subparagraph 2.1(b), but the
interest rate shall not be 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.
XI-13
11.3 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.
11.4 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 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.
XI-14
(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.
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.
11.5 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 Paragraph 5.3. If a claim is made subsequently by such
Participant or Beneficiary for the forfeited benefit, such benefit shall be
restored in full.
11.6 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
XI-15
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.
XI-16
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 the company shall be legally dissolved, or declared
bankrupt, shall wake a general assignment for the benefit of creditors, or merge
into or with another company which shall not assume the obligations of this
Plan, 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 the
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 the 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
XII-1
such Participant would have been entitled to receive immediately 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 the 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 life insurance 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.
(a) 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 his benefit accrued to such date, to the
extent funded, shall be fully vested, except as provided in Article
17. An event which is considered a termination for purposes of Title
IV of the Employee Retirement Income Security Act of 1974, but which
is not a termination for purposes of the Internal Revenue Code of
1986, as amended, shall not result in full vesting for Plan
Participants.
XII-2
(b) In the event a distribution of assets is directed by the Company,
assets shall be allocated as follows to affected Participants:
(1) First, to the Participant's account for voluntary contributions;
(2) Second, to that portion of each Participant's Accrued Benefit
which is derived from the Participant's mandatory contributions,
if any;
(3) Third, in the case of a benefit payable to any annuity -
(i) in the case of the benefit of a Participant or a Beneficiary
which was in pay status as of the beginning of the 3 year
period ending on the termination date of the Plan, to each
such benefit, based on the provisions of the Plan (as in
effect during the 5 year period ending on such date) under
which such benefit would be the least; and
(ii) in the case of a Participant's or Beneficiary's benefit
(other than a benefit described in (i) above) which would
have been in pay status as of the beginning of such 3 year
period if the Participant had retired prior to the beginning
of the 3 year period and if his benefits had commenced (in
the Normal Form of Retirement Benefit under this Plan) as of
the beginning of such period, to each such benefit based on
the provisions in the Plan (as in effect during the 5 year
period ending on such date) under which such benefit would
be the least;
(4) Fourth -
(i) to all other benefits (if any) of individuals under the Plan
guaranteed by the Pension Benefit Guaranty Corporation; and
(ii) to the additional benefit (if any) which would be determined
under (i) above, if Section 4022(b) (5) of the Employee
Retirement Income Security Act of 1974
XII-3
(relating to substantial owners) did not apply;
(5) Fifth, to all other benefits under the Plan which are
nonforfeitable, except those benefits which become nonforfeitable
solely on account of Plan termination;
(6) Sixth, to all other benefits accrued under the Plan.
(c) In the event the value of Plan assets at termination is less than the
present value of all Accrued Benefits, the provisions of Subparagraph
12.4(b) shall apply in regard to the allocations provided for in
Subparagraphs 12.4(b)(l), (2), (3) and (4)(i) above (subject to the
limitations provided by Subparagraph 4.2(f)); but assets not so
allocated, including assets restricted from distribution by
Subparagraph 4.2(f), shall be allocated, to the extent possible, with
regard to the allocations otherwise provided for in Subparagraphs
12.4(b)(4)(ii), (5) and (6) so that, to the extent possible, rank and
file Participants receive at least the same proportion of the present
value of their Accrued Benefits as Participants who are officers,
shareholders or highly compensated (equalizing allocation), provided
that to the extent such equalizing allocation permits, assets
otherwise restricted by Subparagraph 4.2(f) may nonetheless be
allocated according to Subparagraph 12.4(b) above, and provided
further that nothing in this Subparagraph shall permit allocating any
lesser amount of assets to a rank and file Participant than would
occur if this Subparagraph and Subparagraph 4.2(f) did not exist.
XII-4
ARTICLE THIRTEEN
LOANS
13.1 Loans to Participants shall not be permitted under the Plan.
XIII-1
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 1 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 the Company nor any other person shall be entitled to any
further accounting by Trustee, except as provided by law. The 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
XIV-1
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 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 the 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 the 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 the 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 the 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
XIV-2
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 this Plan, the Trustee with respect to the Plan shall be liable for breach of
fiduciary duty of another Trustee;
(a) 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;
(b) 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
(c) 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
XIV-3
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 investments, and to make all necessary payment
therefore.
(e) To join in, consent to, dissent from, or oppose, or to deposit
securities in a voting trust, in connection with the reorganization,
consolidation, recapitalization, merger, or readjustment of the
finances of any 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.
XIV-4
(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 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 probata 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
XIV-5
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 rehypothecate 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 (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
XIV-6
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 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.
Notwithstanding the above, if any expenses of administering the Plan and trust
are not paid by the 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 the 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 the 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
XIV-7
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.
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.
XIV-8
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-9
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
SPENDTHRIFT CLAUSE
16.1 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.
16.2 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.
16.3 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).
16.4 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 6 benefits to be
paid by the plan to each such
XVI-1
Alternate Payee, or the manner in which such amount or percentage
is to be determined;
(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 16.5
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.
16.5 A Qualified Domestic Relations Order may require that payments or
benefits be made to an Alternate Payee on or after the earliest date on which,
under the Plan, the Participant could elect to receive retirement benefits, 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.
16.6 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.
16.7 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
XVI-2
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 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 11.4 herein pertaining to appeals of claim
determinations.
16.8 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.
XVI-3
ARTICLE SEVENTEEN
NO REVERSION TO COMPANY
17.1 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.
17.2 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 the Company within 1 year after the date
of denial of initial qualification of the Plan.
17.3 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 the Company
within 1 year after the date of disallowance of the deduction.
17.4 In the case of a Company contribution made by reason of a mistake of
fact, such contribution shall be returned to the 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.
17.5 The Company reserves the right to recover at the termination of this
Agreement and Trust any balance remaining in the Trust by reason of erroneous
actuarial computations, after the satisfaction of all liabilities with respect
to the Participants and their Beneficiaries under this Plan and Trust. A balance
by reason of erroneous actuarial computations is the surplus arising because
actual liabilities differ from expected liabilities. In the event assets of the
Plan at the termination of the Plan exceed the liabilities of the Plan, the
Company reserves the right, in lieu of recovering any surplus assets, to amend
the Plan Benefit Formula so as to increase benefits under the Plan in a
non-discriminatory manner, thereby eliminating said surplus.
17.6 The amount which shall be returned to the Company as provided in
Paragraphs 17.3 and 17.4 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
XVII-1
mistake in determining the amount of the deduction. Earnings attributable to the
excess contribution shall not be returned to the Company, but losses
attributable thereto shall reduce the amount to be so returned. Furthermore, no
excess contribution shall be returned to the 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.
XVII-2
ARTICLE EIGHTEEN
DIRECT TRANSFERS AND ROLLOVERS
18.1 If a Participant shall be entitled to receive benefits under this Plan
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 1954
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.
18.2 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 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:
XVIII-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 the 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.
XVIII-2
18.3 No assets transferred to this Plan in accordance with the provisions
of this Article shall be considered Employee contributions for purposes of
Subparagraph 5.5.
18.4 Distribution of said assets shall follow the general provisions of the
Plan for distribution of the Participant's Accrued Benefit.
18.5 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).
18.6 For purposes of valuing gains and losses in the account(s) maintained
for transferred assets, the provisions of Paragraph 5.5(c) shall apply.
XVIII-3
ARTICLE NINETEEN
DETERMINATION OF TOP-HEAVY STATUS
19.1 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 shall be determined as of the most recent valuation
date used for computing plan costs which is within a 12 month period
ending on the Determination Date, as if the individual terminated
service as of such valuation date. In the first year of a Plan,
however, the accrued benefit shall be determined as if the individual
terminated service as of the Determination Date. The assumptions used
for the calculation shall be the interest and post-retirement
mortality assumptions used in determining Actuarial Equivalence. The
benefit valued is that payable at Normal Retirement Date (or attained
age, if later). Employee contribution accounts shall be included in
determining the value of benefits.
(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
XIX-1
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);
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
XIX-2
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.
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.
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
XIX-3
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;
(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) or (in) 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.
XIX-4
(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.
19.2 If the Company maintains more than one plan, the plans shall
constitute an Aggregation Group, provided the following conditions are
satisfied:
(a) Each plan of the Company in which a Key-Employee is a Participant, and
each other plan of the 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) The 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.
XIX-5
(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.
19.3 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) or (m)
and (o) 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 Employees of all
organizations aggregated under Internal Revenue Code Sections 414(b),
(c) or (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.
XIX-6
19.4 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 20%
3 years 40%
4 years 60%
5 years 80%
6 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.
19.5 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.
19.6 In any Top-Heavy Plan Year, an eligible Participant who is a Non-Key
Employee shall receive no less than either a minimum contribution to a defined
contribution plan equal to the lesser of 3% of compensation or the largest
percentage of compensation provided on behalf of any Key-Employee, or a minimum
accrual in a defined benefit plan equal in value to an accrued benefit at any
point in time of 2% of his Average Annual Compensation for the five consecutive
years in which his compensation was highest, times his Years of Service for
benefit accrual beginning on or after January 1, 1984 and during which the Plan
was Top-Heavy, up to a maximum of 20%, payable at Normal Retirement Date in the
form of a straight life annuity. If a Non-Key Employee is a Participant in both
a defined benefit plan and a defined contribution plan which are Top-Heavy, the
Participant shall receive no less than either a defined contribution minimum
equal to 5% of compensation or the defined benefit minimum accrual described
above (but reducing the 20% maximum by 2% for each Top-Heavy Plan Year during
the first 10 Top-Heavy Plan Years in which the minimum 5% contribution is made
on his behalf to a defined contribution plan). Compensation for purposes of the
defined benefit minimum benefit shall not include compensation after the last
Plan Year in which the Plan is Top-Heavy and shall be compensation as defined in
Article 4 for purposes of computing limits on maximum contributions or benefits.
For Plan Years
XIX-7
beginning prior to January 1, 1985, any Company contribution attributable to a
salary reduction or similar arrangement shall not be taken into account for
purposes of determining whether the minimum contribution to a defined
contribution plan required above has been made, or is in fact required to be
made, except that account balances derived from such contributions shall be
taken into account in determining whether or not the Plan is Top-Heavy.
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.
19.7 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.
XIX-8
ARTICLE TWENTY
MISCELLANEOUS PROVISIONS
20.1 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.
20.2 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.
20.3 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.
20.4 Situs: The terms of this Trust shall be construed in accordance with
the laws of the Trust Situs as set forth in Subparagraph 2.1(t), except to the
extent preempted by federal law.
20.5 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.
20.6 Construction: Whenever used in this Agreement and Trust unless the
context indicates otherwise, singular shall
XX-1
include plural and the plural shall include singular; and the male gender shall
include the female gender.
20.7 Termination: Upon the return of all contributions to the Company as
provided in Paragraph 17.2 hereof, the Trust shall terminate, and the Trustee
shall be discharged from all obligations under the Trust.
20.8 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.
20.9 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.
20.10 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.
20.11 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.
20.12 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),
shall be treated as if employed by a single employer.
XX-2
For purposes of determining years of Service for eligibility and vesting
purposes for any Employee or former Employee of the company, service with any
entity which is a member of a Controlled Group or an Affiliated Service Group in
which the Company is included shall be considered service with the Company. In
determining service for purposes of benefit accrual for any Employee or former
Employee of the 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 the Company is included shall be taken into
account.
20.13 Successor Company: Any successor organization of the Company may
adopt this Plan and Trust, with the written consent of the Company, if then in
existence. Such successor shall thereby succeed to all the rights, powers, and
duties of the Company hereunder.
XX-3
IN WITNESS WHEREOF, the Company and Trustee have caused this Agreement to
be executed the day and date previously written.
ATTEST: PENNSYLVANIA SAVINGS BANK
_______________________ By:______________________
Xxxxxxxx Xxxxxxxxx, Xxxxxxx X. Xxxx,
Secretary President
_______________________ _______________________
Xxxx Xxxxxxxx, Xxxxxxx X. Xxxx,
Treasurer President
_______________________
Xxxxxxx Di Xxxxxx,
Trustee
XX-4
The undersigned, President of the above named corporation, does hereby
certify that the foregoing are true and correct copies of the Defined Benefit
Pension Plan and Trust instruments, adopted by said Corporation and approved by
Unanimous Consent of its Board of Directors.
He further certifies that the Defined Benefit Pension Plan and Trust
instruments were duly executed by the Corporation and the Trustees named in said
instruments.
_________________________(SEAL)
Xxxxxxx X. Xxxx,
President
XX-5
