EXHIBIT 10.8
MEDICAL SYSTEMS MANAGEMENT, INC.
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST
THIS AGREEMENT is made and entered into as of this 26th day of February,
2002, between MEDICAL SYSTEMS MANAGEMENT, INC. (hereafter referred to as the
"Sponsor") and HSBC BANK USA (hereafter referred to as the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor originally established an employee stock ownership
plan (hereafter called the Plan), effective January 1, 1995, that is designed to
invest primarily in employer securities as provided in Code Section 4975(e)(7)
in order to provide retirement and other incidental benefits to Employees who
are eligible to participate in the plan;
WHEREAS, the Sponsor believes that continued contributions to the Plan
will help to strengthen the bonds of loyalty and mutual understanding that have
existed between the Sponsor and its employees, thereby making possible the
continued growth of its business; and
WHEREAS, in accordance with the terms of the Plan, the Sponsor has the
ability at any time, and from time to time, to amend the Plan;
NOW, THEREFORE, effective January 1, 1997 (except for those sections of
the Plan that have a different effective date), the Sponsor hereby amends and
restates the Plan to comply with the requirements of the Employee Retirement
Income Security Act of 1974, and with the requirements of the Internal Revenue
Code of 1986, as amended by the Uruguay Round Agreements Act, the Small Business
Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the Uniformed
Services Employment and Reemployment Rights Act of 1994, the Internal Revenue
Service Restructuring and Reform Act of 1998, the Community Renewal Tax Relief
Act of 2000, and all applicable rulings and regulations issued thereunder, and
the Trustee accepts the Plan under the following terms and conditions:
ARTICLE 1
DEFINITIONS
1.1 ADMINISTRATOR: The term Administrator means the Sponsor unless another
Administrator is appointed by the Sponsor.
1.2 ADOPTING EMPLOYER: The term Adopting Employer means any entity which
adopts this Plan with the consent of the Sponsor. An Employee's transfer
to or from any Employer or Adopting Employer will not affect his or her
Participant's Account balance, total Years of Service (or Periods of
Service) and total Years of Service as a Participant (or Periods of
Service as a Participant). All Adopting Employers will be subject to the
following provisions:
(a) MULTIPLE EMPLOYER PLAN PROVISIONS UNDER CODE Section 413(c):
Notwithstanding any other provision in the Plan to the contrary,
unless the Plan is a collectively bargained plan described in
Regulation Section 1.413-1(a), the following provisions will apply
with respect to any Adopting Employer that is not an Affiliated
Employer of the Sponsor:
(1) INSTANCES OF SEPARATE EMPLOYER TESTING: Employees of any
such Adopting Employer will be treated separately for
purposes of testing under the provisions of Code Section
401(a)(4), Code Section 401(k), Code Section 401(m) and, if
the Sponsor and the Adopting Employer do not share
Employees, Code Section 416. Furthermore, the terms of Code
Section 410(b) will be applied separately on an
employer-by-employer basis by the Sponsor (and the Adopting
Employers which are part of the Affiliated Group which
includes the Sponsor) and each Adopting Employer that is
not an Affiliated Employer of the Sponsor, taking into
account the generally applicable rules described in Code
Section 401(a)(5), Section 414(b) and Section 414(c).
(2) INSTANCES OF SINGLE EMPLOYER TESTING: Employees of the
Adopting Employer will be treated as part of a single
employer plan for purposes of eligibility to participate
under Article 2 and under the provisions of Code Section
410(a). Furthermore, the terms of Code Section 411 relating
to Vesting will be applied as if all Employees of all such
Adopting Employers and the Sponsor were employed by a
single employer, except that the rules regarding Breaks in
Service will be applied under such regulations as may be
prescribed by the Secretary of Labor.
(3) COMMON TRUST: Contributions made by any such Adopting
Employer will be held in a common Trust Fund with
contributions made by the Sponsor, and all such
contributions will be available to pay the benefits of any
Participant who is an Employee of the Sponsor or any such
Adopting Employer.
(4) COMMON DISQUALIFICATION PROVISION: The failure of either
the Sponsor or any such Adopting Employer to satisfy the
qualification requirements
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under the.; provisions of Code Section 401(a), as modified
by Code Section 413(c), will result in the disqualification
of the Plan for all such Employers maintaining the Plan.
(b) TERMINATION OF ADOPTION: An Adopting Employer may terminate
participation in the Plan by delivering written notice to the
Sponsor, the Administrator and the Trustee; but in accordance with
Article 9, only the Sponsor can terminate the Plan. If a request
for and approval of a transfer of assets from this Plan to any
successor qualified retirement plan maintained by the Adopting
Employer or its successor is not made in accordance with Section
9.2, Participants who are no longer Employees because the Adopting
Employer terminates its Plan participation will only be entitled
to the commencement of their benefits (a) in the case of
Participants who are no longer Employees of an Adopting Employer
that is an Affiliated Employer of the Sponsor, in accordance with
Article 5 after their death, retirement, Disability or Termination
of Employment from the Adopting Employer or former Adopting
Employer, and (b) in the case of Participants who are no longer
Employees of an Adopting Employer that is not an Affiliated
Employer of the Sponsor, within a reasonable time thereafter as if
the Plan had been terminated under Section 9.2.
1.3 AFFILIATED EMPLOYER: The term Affiliated Employer means any of the
following of which the Employer is a part: (1) a controlled group of
corporations as defined in Code Section 414(b); (2) a trade or business
(whether or not incorporated) under common control under Code Section
414(c); (3) any organization (whether or not incorporated) which is a
member of an affiliated service group under Code Section 414(m); and (4)
any other entity required to be aggregated under Code Section 414(o).
1.4 AGE: The term Age means actual attained age.
1.5 ANNIVERSARY DATE: The term Anniversary Date means December 31st.
1.6 ANNUITY STARTING DATE: The term Annuity Starting Date means the first day
of the first period for which an amount is paid as an annuity, or, in the
case of a benefit not payable as an annuity, the first day all events
have occurred which entitle the Participant to such benefit. The first
day of the first period for which a benefit is to be received by reason
of Disability will be treated as the Annuity Starting Date only if such
benefit is not an auxiliary benefit.
1.7 BENEFICIARY: The term Beneficiary means the recipient designated by the
Participant to receive the Plan benefits payable upon the death of the
Participant, or the recipient designated by a Beneficiary to receive any
benefits which may be payable in the event of the Beneficiary's death
prior to receiving the entire death benefit to which the Beneficiary is
entitled. All such Beneficiary designations will be made in accordance
with the following provisions:
(a) BENEFICIARY DESIGNATIONS BY A PARTICIPANT: Subject to Section 5.8
regarding the rights of a Participant's Spouse, each Participant
may designate a Beneficiary
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on a form supplied by the Administrator, and may change or revoke
that designation by filing written notice with the Administrator.
If a Participant completes or has completed a Beneficiary
designation form in which the Participant designates his or her
Spouse as the Beneficiary, and the Participant and the
Participant's Spouse are legally divorced subsequent to the date
of such designation, then the designation of such Spouse as a
Beneficiary hereunder will be deemed null and void unless the
Participant, subsequent to the legal divorce, reaffirms the
designation by completing a new Beneficiary designation form. In
the absence of a written Beneficiary designation form, the
Participant will be deemed to have designated the following
Beneficiaries in the following order: (I) the Participant's
Spouse, if then living; (2) the Participant's issue, per stirpes;
and (3) the Participant's estate.
(b) BENEFICIARY DESIGNATIONS BY A BENEFICIARY: In the absence of a
Beneficiary designation or other directive from the deceased
Participant to the contrary, any Beneficiary may name his or her
own Beneficiary in accordance with Section 5.2(e) to receive any
benefits which may be payable in the event of the Beneficiary's
death prior to the receipt of all the Participant's death benefits
to which the Beneficiary was entitled.
(c) BENEFICIARIES CONSIDERED CONTINGENT UNTIL DEATH OF PARTICIPANT:
Notwithstanding any provision in this Section, any Beneficiary
named hereunder will be considered a contingent Beneficiary until
the death of the Participant (or Beneficiary, as the case may be),
and until such time will have no rights granted to Beneficiaries
under the Plan.
1.8 BREAK IN SERVICE: The term Break in Service means a Plan Year during
which an Employee does not complete more than 500 Hours of Service for
reasons other than an authorized leave of absence, which is any period in
which an Employee ceases active employment because of illness, military
service, or any other reason approved by the Employer. If a Plan Year is
less than 12 months, the 500 Hours of Service requirement will be
proportionately reduced.
1.9 CODE: The term Code means the Internal Revenue Code of 1986, as amended,
and the regulations and rulings promulgated thereunder by the Internal
Revenue Service.
1.10 CODE Section 3401 COMPENSATION: The term Code Section 3401 Compensation
means wages within the meaning of Code Section 3401 (a) that are actually
paid or made available in gross income for the purposes of income tax
withholding at the source but determined without regard to any rules
under that limit the remuneration included in wages based on the nature
or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2).
1.11 CODE Section 415 COMPENSATION: The term Code Section 415 Compensation
means Earned Income, wages, salaries, fees for professional services and
other amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered by an Employee in
the course of employment with the Employer maintaining
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the Plan, including, but not limited to, commissions paid to
salespersons, compensation for services' based on a percentage of
profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements, or other expense allowances under a
non-accountable plan as described in regulation Section 1.62-2(c). Code
Section 415 Compensation will be determined subject to the following
provisions:
(a) AMOUNTS EXCLUDED FROM CODE Section 415 COMPENSATION: Code Section
415 Compensation does not include (1) Employer contributions to a
plan of deferred compensation which are not includible in gross
income for the taxable year in which contributed, or Employer
contributions to a simplified employee pension plan to the extent
such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation; (2) amounts
realized from a non-qualified stock option, or when restricted
stock or property held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture; (3) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(4) other amounts which receive special tax benefits, or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described
in Code Section 403(b) (whether or not the amounts are excludible
from an Employee's gross income).
(b) TREATMENT OF ELECTIVE DEFERRALS AND CERTAIN OTHER AMOUNTS: For
Limitation Years beginning on or after January 1, 1998, Code
Section 415 Compensation will include any elective deferrals as
defined in Code Section 402(g)(3), and any amounts contributed or
deferred at the election of the Employee which were not includible
in gross income by reason of Code Section 125 or Section 457. Code
Section 415 Compensation will also include elective amounts that
are not includible in the gross income of the Employee by reason
of Code Section 132(f)(4) for Limitation Years beginning on or
after January 1, 2001 (or if elected by the Administrator on a
nondiscriminatory basis, any earlier Limitation Year beginning on
or after January l, 1998).
1.12 COMPANY STOCK: The term Company Stock means common stock issued by the
Employer which is voting common stock (or preferred stock convertible
into voting common stock) and which qualifies under Code Section 409(l)
as an Employer security.
1.13 COMPANY STOCK ACCOUNT: The term Company Stock Account means the account
to which is credited a Participant's share of Company Stock contributed
to or acquired by the Plan.
1.14 COMPENSATION: The term Compensation means wages within the meaning of
Code Section 3401 (a) and all other payments of compensation that are
actually paid or made available in gross income during the Plan Year to
an Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement (Form W-2) under Code Section 6041(d), Section
6051(a)(3) and Section 6052. Compensation must be determined without
regard to any rules under Code Section 3401 (a) that limit the
remuneration included in wages based on the nature or location of the
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employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2). Compensation will also
include amounts not currently includible in gross income by reason of
Code Section 125, Section 402(e)(3), Section 402(h), or Section 403(b).
However, Compensation used to determine Plan benefits will not include
Compensation in excess of $100,000. If a determination period is less
than 12 months, the $100,000 limitation will be multiplied by a fraction,
the numerator of which is the number of months in the determination
period, and the denominator of which is 12.
Effective January 1, 2001, Compensation paid or made available during a
Limitation Year shall include elective amounts that are not includable in
gross income of the employee by reason of Code Section 132(f)(4).
1.15 CURRENT OBLIGATIONS: The term Current Obligations means obligations of
the Trust Find arising from the extension of credit to the Trust Fund and
which are payable in cash within one year from the date an Employer
contribution is made to the Plan.
1.16 DISABILITY: The term Disability means a physical or mental condition
arising after an Employee has become a Participant which totally and
permanently prevents the Participant from performing his or her specified
duties for the Employer. The determination as to whether a Participant
has suffered a Disability will be made by a physician appointed by the
Administrator. If a difference of opinion arises between the Participant
and the Administrator as to whether the Participant has suffered a
Disability, it will be settled by a majority decision of three
physicians, one to be appointed by the Administrator, one to be appointed
by the Participant, and the third to be appointed by the two physicians
first appointed herein. However, notwithstanding the foregoing, the term
Disability will not include any disability arising from (1) chronic or
excessive use of intoxicants or other substances; (2) intentionally
self-inflicted injury or sickness; (3) an unlawful act or enterprise by
the Participant; or (4) military service where the Participant is
eligible to receive a government sponsored military disability pension.
1.17 EARLY RETIREMENT AGE: This Plan does not provide a Participant with
retirement benefits prior to the date the Participant reaches his or her
Normal Retirement Age.
1.18 ELIGIBLE PARTICIPANT: The term Eligible Participant means a Participant
eligible to receive an allocation of Employer contributions allocable for
a Plan Year. Any Participant who is an Employee on the last day of the
Plan Year will be an Eligible Participant if he or she also completes at
least 1,000 Hours of Service during the Plan Year. Any Participant who
terminates employment with the Employer before the last day of the Plan
Year will only be an Eligible Participant for that Plan Year in
accordance with the following provisions:
(a) RETIRING PARTICIPANTS: A Participant who terminates employment
before the last day of the Plan Year because of retirement after
Normal Retirement Age will be an Eligible Participant regardless
of the number of Hours of Service the Participant completes in
that Plan Year.
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(b) DECEASED PARTICIPANTS: A Participant who terminates employment
before the last day of the Plan Year because of death will be an
Eligible Participant regardless of the number of Hours of Service
the Participant completes in that Plan Year.
(c) DISABLED PARTICIPANTS: A Participant who terminates employment
before the last day of the Plan Year because of Disability will
not be an Eligible Participant for that Plan Year.
(d) TERMINATED PARTICIPANTS: A Participant who terminates before the
last day of the Plan Year for reasons other than retirement, death
or Disability will not be an Eligible Participant for that Plan
Year.
1.19 EMPLOYEE: The term Employee means (1) any person reported on the payroll
records of the Employer as an employee who is deemed by the Employer to
be a common law employee; (2) except for purposes of determining
eligibility to participate in this Plan, any person reported on the
payroll records of an Affiliated Employer of the Sponsor or an Adopting
Employer as an employee who is deemed by the Affiliated Employer to be a
common law employee, even if the Affiliated Employer is not an Adopting
Employer, (3) any Self-Employed Individual who derives Earned Income from
the Employer; (4) any Owner-Employee; and (5) any person who is
considered a Leased Employee but who (i) is not covered by a plan
described in Code Section 414(n)(5), or (ii) is covered by a plan
described in Code Section 414(n)(5) but Leased Employees constitute more
than 20% of the Employer's non-highly compensated workforce. The term
Employee will not include any individual who is not reported on the
payroll records of the Employer or an Affiliated Employer as a common law
employee. If such person is later determined by the Sponsor or by a court
or governmental agency to be an Employee or to have been an Employee, he
or she will only be eligible for Plan participation prospectively and may
participate in the Plan as of the next entry date in Section 2.2
following such determination and after the satisfaction of all other
eligibility requirements.
1.20 EMPLOYER: The term Employer means the Sponsor, any Adopting Employer, and
any direct predecessor business entity of the Sponsor or an Adopting
Employer which was or would have been considered an Affiliated Employer
of the Sponsor or an Adopting Employer. Where applicable, such as
determining Hours of Service and Years of Service, the term Employer or
Adopting Employer will also mean any business entity that was an Adopting
Employer. As to any Employee, the term Employer at the time of reference
means the employer of such Employee.
1.21 EXEMPT LOAN: The term Exempt Loan means a loan made to the Plan by a
disqualified person or that is guaranteed by a disqualified person and
which satisfies the requirements of income tax regulation Section
54.4975-7(b) and Department of Labor regulation Section 2550.408b-3.
1.22 FIDUCIARY: The term Fiduciary means any individual or entity which
exercises any discretionary authority or control over the management of
the Plan or over the disposition of the assets of the Plan; renders
investment advice for a fee or other compensation
7
(direct or indirect); has any discretionary authority or responsibility
over Plan administration; or acts to carry out a fiduciary
responsibility, when designated by a named Fiduciary pursuant to
authority granted by the Plan; subject, however, to any exception granted
directly or indirectly by the provisions of ERISA or any applicable
regulations. The Employer is the "named Fiduciary" for purposes of ERISA
Section 402(a)(2).
1.23 FISCAL YEAR: The term Fiscal Year means the Employer's accounting year
beginning January 1st and ending December 31st.
1.24 FORFEITURE: The term Forfeiture means the amount by which a Participant's
Account balance exceeds his or her Vested Interest upon the earlier to
occur of (1) the date the Participant receives a distribution of his or
her Vested Interest pursuant to Sections 5.4, 5.5, or 5.6; or (2) the
date the Participant incurs 5 consecutive Breaks in Service after
Termination of Employment. No Forfeitures will occur solely as a result
of the withdrawal of a Participant's own contributions to the Plan, or a
Participant's transfer to an Affiliated Employer or Adopting Employer.
All Forfeitures will be allocated to the Forfeiture Account pending
allocation pursuant to Section 3.5.
1.25 FORM W-2 COMPENSATION: The term Form W-2 Compensation means wages within
the meaning of Code Section 3401(a) and all other payments of
compensation actually paid or made available in gross income to an
Employee by the Employer in the course of the Employer's trade or
business for which the Employer is required to furnish the Employee a
Form W-2 under Code Section 6041(d), Section 6051(a)(3) and Section 6052.
Compensation must be determined without regard to any rules under Code
Section 3401(a) limiting remuneration included in wages based on the
nature or location of the employment or services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2).
1.26 HCE: The term HCE means a Highly Compensated Employee.
1.27 HIGHLY COMPENSATED EMPLOYEE: The term Highly Compensated Employee means,
for Plan Years beginning after December 31, 1996, any Employee who during
the Plan Year or during the look-back year was a 5% owner as defined in
Code Section 416(i)(1), or who for the look-back year had Code Section
415 Compensation in excess of $80,000 as adjusted in accordance with Code
Section 415(d) (except that the base year will be the calendar quarter
ending September 30, 1996). In determining who is a highly compensated
former Employee, the rules for determining which Employees are Highly
Compensated Employees for the Plan Year or look-back year for which the
determination is being made (in accordance with temporary regulation
Section 1.414(q)- IT, A-4 and Notice 97-45) will be applied. In
determining if an Employee is a Highly Compensated Employee for Plan
Years beginning in 1997, the amendments to Code Section 414(q) are deemed
to have been in effect for Plan Years beginning in 1996. If the Employer
maintains more than one qualified retirement plan, the terms of this
Section will be applied in a consistent manner in all such plans.
(a) DETERMINATION OF LOOK BACK YEAR: The look-back year will be the 12
month period immediately preceding the Plan Year for which the
determination is being made, except that in determining if an
Employee is a Highly Compensated
8
Employee based on his or her Code Section 415 Compensation, the
Administrator may elect for any Plan Year that the look-back year
will be the calendar year beginning with or within the look-back
year.
(b) TOP PAID GROUP ELECTION: In determining if an Employee is a Highly
Compensated Employee based on Code Section 415 Compensation, the
top paid group election set forth in Code Section 414(q)(3) is
being applied by the Plan.
1.28 HOUR OF SERVICE: The term Hour of Service means, and the number of an
Employee's Hour of Service will be determined in accordance with, the
following provisions:
(a) DETERMINATION OF HOURS: The term Hour of Service means (1) each
hour an Employee is paid, or entitled to payment, for the
performance of duties for the Employer or an Affiliated Employer,
which will be credited to the Employee for the computation period
in which the duties are performed; (2) each hour for which an
Employee is paid, or entitled to payment, by the Employer or an
Affiliated Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence, except that no more than 501 hours will
be credited under this clause (2) for any single continuous period
(whether or not such period occurs in a single computation
period); and (3) each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer or an Affiliated Employer, except that the same hours
will not be credited both under clause (1) or clause (2) and under
this clause (3), and these hours will be credited for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made. Hours of Service will be calculated
and credited pursuant to DOL regulation 2530.200b-2(b) and (c),
which are incorporated herein by reference.
(b) MATERNITY PATERNITY LEAVE: In determining if a Break in Service
for participation and vesting has occurred, an individual on
Maternity or Paternity Leave will receive credit for up to 501
hours which would otherwise have been credited but for such
absence, or in any case in which such hours cannot be determined,
8 hours per day of such absence. Hours credited for Maternity of
Paternity Leave will be credited in the computation period in
which the absence begins if the crediting is necessary to prevent
a Break in Service in that period, or in all other cases, in the
following computation period.
(c) USE OF EQUIVALENCIES: Notwithstanding paragraph (a), the
Administrator may elect for all Employees or for one or more
different classifications of Employees (provided such
classifications are reasonable and are consistently applied) to
apply one or more of the following equivalency methods in
determining the Hours of Service of an Employee paid on an hourly
or salaried basis. Under such equivalency methods, an Employee
will be credited with either (1) 190 Hours of
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Service for each month in which he or she is paid or entitled to
payment for at least one Hour of Service; or (2) 95 Hours of
Service for each semi-monthly period in which he or she is paid or
entitled to payment for at least one Hour of Service; or (3) 45
Hours of Service for each week in which he or she is paid or
entitled to payment for at least one Hour of Service; or (4) 10
Hours of Service for each day in which he or she is paid or
entitled to payment for at least one Hour of Service.
1.29 KEY EMPLOYEE: The term Key Employee means any Employee, Former Employee,
deceased Employee, or Beneficiary who at any time during the Plan Year
containing the Determination Date for the Plan Year in question or any of
the prior 4 Plan Years was one of the following:
(a) OFFICERS: An officer of the Employer whose Code Section 415
Compensation exceeds 50% of the amount in effect under Code
Section 415(b)(1)(A), except that no more than fifty Employees
(or, if lesser, the greater of three or 10% of the Employees) will
be treated as officers.
(b) OWNERS: An owner (or was considered an owner under Code Section
318) of one of the ten largest interests in the Employer whose
Code Section 415 Compensation exceeds 100% of the dollar
limitation in effect under Code Section 415(c)(1)(A), but if two
Employees own the same interest in the Employer, the Employee with
the greater annual Code Section 415 Compensation will be treated
as owning a larger interest; or a 5% owner of the Employer as
defined in Code Section 416(i)(l)(B)(i); or a 1% owner of the
Employer as defined in Code Section 416(i)(1)(B)(ii) whose annual
Code Section 415 Compensation is more than $150,000.
1.30 LEASED EMPLOYEE: The term Leased Employee means, for Plan Years beginning
on or after January 1, 1997, any person within the meaning of Code
Section 414(n)(2) and Section 414(o) who is not reported on the payroll
records of the Employer as a common law employee and who provides
services to the Employer if (a) the services are provided under an
agreement between the Employer and a leasing organization; (b) the person
has performed services for the Employer or for the Employer and related
persons as determined under Code Sections 414(n)(6) on a substantially
full time basis for a period of at least one year; and (c) the services
are performed under the primary direction and control of the Employer.
Contributions or benefits provided to a Leased Employee by the leasing
organization which are attributable to services performed for the
Employer will be treated as provided by the Employer. A Leased Employee
will not be considered an Employee of the recipient if such Employee is
covered by a money purchase plan providing (a) a non-integrated Employer
contribution rate of at least 10% of Code Section 415 Compensation, but
including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludible from the Employee's gross income
under a cafeteria plan covered by Code Section 125, a cash or deferred
plan under Code Section 401(k), a SEP under Code Section 408(k) or a
tax-deferred annuity under Code Section 403(b); (b) immediate
participation; and (c) full and immediate vesting. This exclusion is only
available if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
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1.31 LIMITATION YEAR: The term Limitation Year means the Plan Year.
1.32 MATERNITY OR PATERNITY LEAVE: The term Maternity or Paternity Leave means
that an Employee is absent from work because of the Employee's pregnancy;
the birth of the Employee's child; the placement of a child with the
Employee in connection with the adoption of such child by the Employee;
or the need to care for such child for a period beginning immediately
following the child's birth or placement as set forth above.
1.33 NHCE: The term NHCE means a Non-Highly Compensated Employee.
1.34 NON-HIGHLY COMPENSATED EMPLOYEE: The term Non-Highly Compensated Employee
means any Employee who is not a Highly Compensated Employee.
1.35 NON-KEY EMPLOYEE: The term Non-Key Employee means any Employee who is not
a Key Employee, including former Key Employees.
1.36 NORMAL RETIREMENT AGE: The term Normal Retirement Age means the date a
Participant reaches Age 65. There is no mandatory retirement age.
1.37 NORMAL RETIREMENT DATE: The term Normal Retirement Date means the same
date a Participant reaches Nor-mat Retirement Age.
1.38 OTHER INVESTMENTS ACCOUNT: The term Other Investments Account means the
account to which is credited a Participant's share of Plan assets other
than Company Stock, including Forfeitures which are not used to pay
administrative expenses or to reduce Employer contributions, earnings and
losses, and the proceeds of any Policies, if any, purchased on the
Participant's life under Section 7.13. Payments to purchase Company Stock
will be debited from this account.
1.39 PARTICIPANT: The term Participant means any Employee who has met the
eligibility and participation requirements of the Plan. However, an
individual who is no longer an Employee will not be deemed a Participant
if his or her entire Plan benefit (1) is fully guaranteed by an insurance
company and is legally enforceable at the sole choice of such individual
against such insurance company, provided that a contract, Policy, or
certificate describing the benefits to which such individual is entitled
under the Plan has been issued to such individual; or (2) is paid in a
lump sum distribution which represents such individual's entire interest
in the Plan; or (3) is paid in some other form of distribution and the
final payment thereunder has been made.
1.40 PARTICIPANT'S ACCOUNT: The term Participant's Account means the aggregate
balance in a Participant's Company Stock Account and Other Investments
Account.
1.41 PERMISSIVE AGGREGATION GROUP: The term Permissive Aggregation Group means
a Required Aggregation Group plus any Employer plan(s) which when
considered as a group with the Required Aggregation Group would continue
to satisfy Code Section 401(a)(4) and Section 410.
11
1.42 PLAN: The term Plan means this profit sharing plan and trust agreement,
which is named the Medical Systems Management, Inc. Employee Stock
Ownership Plan & Trust.
1.43 PLAN YEAR: The term Plan Year means the Plan's accounting year beginning
January 1st and ending December 31st.
1.44 POLICY: The term Policy means a life insurance policy or annuity contract
purchased pursuant to the provisions of Section 7.13 of the Plan.
1.45 QUALIFIED ELECTION PERIOD: The term Qualified Election Period means the
five Plan Year period beginning with the later of the Plan Year after the
Plan Year the Participant attains Age 55, or the Plan Year after the Plan
Year the Participant first becomes a Qualified Participant.
1.46 QUALIFIED PARTICIPANT: The term Qualified Participant means a Participant
who has attained Age 55 and who has completed at least 10 Years of Plan
Participation.
1.47 REQUIRED AGGREGATION GROUP: The term Required Aggregation Group means (1)
each qualified deferred compensation Plan of the Employer in which at
least one Key Employee participates or participated at any time during
the determination period (regardless of whether the plan has terminated);
and (2) any other qualified deferred compensation plan of the Employer
which enables a plan described in (I) to satisfy Code Section 401(a)(4)
or Section 410.
1.48 REQUIRED BEGINNING DATE: The term Required Beginning Date means, for a
Participant who is not a 5% owner, April 1st of the calendar year
following the later of the Calendar year in which he or she reaches Age
70-1/2 or the calendar year in which he or she actually retires; and for
a Participant who is a 5% owner, April In of the calendar year following
the calendar year in which he or she reaches Age 70-1/2.
(a) DEFINITION OF 5% OWNER: A Participant will be treated as a 5%
owner hereunder if such Participant is a 5% owner as defined in
Code Section 416 at any time during the Plan Year ending with or
within the calendar year in which such owner reaches Age 70-1/2.
Once distributions have begun to a 5% owner under this Section,
they must continue even if the Participant ceases to be a 5% owner
in a subsequent year.
(b) PRE-RETIREMENT AGE 70-1/2 DISTRIBUTIONS: The pre-retirement Age
70-1/2 distribution option is only eliminated with respect to
Employees who reach Age 70-1/2 in or after a calendar year that
begins after the later of December 31, 1998, or the adoption date
of this amended Plan. The pre-retirement Age 70-1/2 distribution
option is an optional form of benefit under which benefits payable
in a particular distribution form (including any modifications
elected after benefit commencement) commence at a time during the
period that begins on or after January 1 n of the calendar year in
which an Employee attains age 70-1/2 and ends April 1st of the
immediately following calendar year.
12
1.49 ROLLOVER ACCOUNT: The term Rollover Account means the account to which a
Participant's Rollover Contributions, if any, are allocated. A
Participant will at all times have a 100% Vested Interest in all amounts
credited to his or her Rollover Account.
1.50 ROLLOVER CONTRIBUTION: The term Rollover Contribution means an amount
transferred to this Plan (a) in a trustee to trustee transfer from
another qualified plan; (b) from another qualified plan as a distribution
eligible for tax free rollover treatment and which is transferred by the
Participant to this Plan within 60 days following his receipt thereof;
(c) from a conduit individual retirement account if the only assets
therein were previously distributed to the Participant by another
qualified plan as a distribution eligible for a tax free rollover within
60 days of receipt thereof and earnings on said assets; or (d) from a
conduit individual retirement account meeting the requirements of (a)
above and transferred to this Plan within 60 days of receipt thereof The
Plan will not accept a Rollover Contribution under clause (a) which is
subject at the time of transfer to the Qualified Joint and Survivor
Annuity requirements of Code Section 401(a)(11).
1.51 SHAREHOLDER-EMPLOYEE: The term Shareholder-Employee means, in the case of
an Employer or Affiliated Employer which is an electing small business
corporation, an individual who is an employee or officer of such electing
small business corporation and owns, or is considered as owning within
the meaning of Code Section 318(a)(1), on any day during the taxable year
of such corporation, more than 5% of the outstanding stock of the
corporation.
1.52 SPONSOR: The term Sponsor means Medical Systems Management, Inc. (and any
successor thereto that elects to assume sponsorship of this Plan).
1.53 SPOUSE: The term Spouse means the person to whom a Participant is legally
married.
1.54 TERMINATION OF EMPLOYMENT: The term Termination of Employment means that
a Participant has ceased to be an Employee for reasons other than
retirement, death, or Disability.
1.55 TERMINATED PARTICIPANT: The term Terminated Participant means a
Participant who has ceased to be an Employee for reasons other than
retirement, death or Disability.
1.56 TOP HEAVY: The term Top Heavy means for any Plan Year beginning after
December 31, 1983 (a) that the Top Heavy Ratio exceeds 60% and the Plan
is not part of a Required Aggregation Group or Permissive Aggregation
Group; or (b) that the Plan is a part of a Required Aggregation Group but
not a Permissive Aggregation Group and the Top Heavy Ratio for the group
exceeds 60%; or (c) that the Plan is a part of a Required Aggregation
Group and a Permissive Aggregation Group and the Top Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
1.57 TOP HEAVY MINIMUM ALLOCATION: The term Top Heavy Minimum Allocation means
an amount of Employer contributions and Forfeitures equal to 3% of an
Employee's Code Section 415 Compensation (or such higher or lesser
percentage as may otherwise be indicated in Section 3.6).
13
1.58 TOP HEAVY RATIO: In determining if this Plan is Top Heavy or Super Top
Heavy, the Top Heavy Ratio will be determined in accordance with the
following provisions:
(a) RULE 1: If the Employer maintains one or more defined contribution
plans (including SEPs) and has not maintained any defined benefit
plan which during the 5-year period ending on the Determination
Date had accrued benefits, the Top Heavy Ratio for this Plan alone
or for the Required or Permissive Aggregation Group is a fraction,
the numerator of which is the sum of the account balances of all
Key Employees as of the Determination Date (including any part of
any account balance distributed in the 5-year period ending on the
Determination Date), and the denominator of which is the sum of
the account balances (including any part of any account balance
distributed in the 5-year period ending on the Determination Date)
determined under Code Section 416 and the regulation thereunder.
Both the numerator and the denominator of the Top Heavy Ratio will
be increased to reflect any contribution not actually made as of
the Determination Date but which is required to be taken into
account under Code Section 416 and the regulations thereunder.
(b) RULE 2: If the Employer maintains one or more defined contribution
plans (including SEPs) and maintains or has maintained one or more
defined benefit plans which during the 5-year period ending on the
Determination Date has had any accrued benefits, the Top Heavy
Ratio for any Required or Permissive Aggregation Group is a
fraction, the numerator of which is the sum of account balances
under the aggregated defined contribution plans for all Key
Employees determined in accordance with paragraph (a) above, and
the present value of accrued benefits under the aggregated defined
benefit plans for all Key Employees as of the Determination Date,
and the denominator of which is the sum of the account balances
under the aggregated defined contribution plans for all
Participants, determined in accordance with paragraph (a), and the
present value of accrued benefits under the aggregated defined
benefit plans for all Participants as of the Determination Date,
all determined under Code Section 416 and the regulations
thereunder. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top Heavy Ratio are
increased for any distribution made in the 5-year period ending on
the Determination Date.
(c) RULE 3: For purposes of paragraphs (a) and (b) above, the value of
account balances and the present value of accrued benefits will be
determined as of the most recent Valuation Date that falls within
or ends with the 12-month period ending on the Determination Date,
except as provided in Code Section 416 and the regulations
thereunder for the first and second Plan Years of a defined
benefit plan. The account balances and accrued benefits will be
disregarded for a Participant (1) who is not a Key Employee but
who was a Key Employee in a prior year or (2) who has not been
credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the 5-year period ending
on the Determination Date. The calculation of the Top Heavy Ratio
and the extent to which distributions, rollovers, and transfers
are taken into account will be made in accordance with Code
Section 416 and the regulations thereunder. When
14
aggregating plans, the value of the account balances and accrued
benefits will be calculated with reference to the Determination
Date that falls within the same calendar year. The accrued benefit
of a Participant other than a Key Employee will be determined
under (1) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the
Employer, or (2) effective as of the first Plan Year beginning
after December 31, 1986, if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code Section 41l(b)(1)(C).
Deductible employee contributions will not be taken into account
in determining the Top Heavy Ratio.
(d) DEFINITION OF DETERMINATION DATE: In determining the Top Heavy
Ratio, the term Determination Date means the last day of the
preceding Plan Year except for the first Plan Year when the
Determination Date means the last day of such first Plan Year.
1.59 TRUSTEE: The term Trustee means the persons or entity named as trustee or
trustees in this Plan and any successor to such Trustee or Trustees.
1.60 TRUST FUND: The term Trust Fund or Trust means the assets of the Plan.
1.61 UNALLOCATED COMPANY STOCK ACCOUNT: The term Unallocated Company Stock
Account means an account containing Company Stock acquired with the
proceeds of an Exempt Loan and which has not been allocated to the
Participants' Company Stock Accounts. For each Plan Year during the
duration of an Exempt Loan, the number of shares of Company Stock
released from the Company Stock Account will equal the number of shares
held therein immediately before release for the current Plan Year
multiplied by a fraction, the numerator of which is the amount of
principal and interest paid for the Plan Year and the denominator of
which is the sum of the numerator plus the principal and interest to be
paid for all future Plan Years.
1.62 VALUATION DATE: Except as otherwise provided in paragraph (c) of the
definition of Top Heavy Ratio, the term Valuation Date means the date on
which the Trustee determines the value of the Trust Fund. The Trust Fund
must be valued at least annually as of the last day of the Plan Year, but
the Administrator can elect to have all or any portion of the assets of
the Trust Fund valued more frequently, including, but not limited to,
semi-annually, quarterly, monthly, or daily.
1.63 VESTED AGGREGATE ACCOUNT: The term Vested Aggregate Account means the
aggregate amount in a Participant's Account, Rollover Account, Voluntary
Employee Contribution Account, and any other accounts as the
Administrator may determine necessary from time to time, in which the
Participant has a Vested Interest.
1.64 VESTED, VESTED INTEREST AND VESTING: The term Vested, Vested Interest and
Vesting mean a Participant's nonforfeitable percentage in any account
maintained on his or her behalf under the terms of the Plan. A
Participant's Vested Interest in his or her Participant's Account will be
determined in accordance with Section 4.6 of the Plan.
15
1.65 YEAR OF SERVICE: The term Year of Service means a 12-consecutive month
computation period during which an Employee (or Participant) completes a
specified number of Hours of Service for either the Employer or an
Affiliated Employer (or any business entity which was an Adopting
Employer), determined in accordance with the following provisions:
(a) DEFINITION OF EMPLOYMENT COMMENCEMENT DATE: As used in this
Section, the term Employment Commencement Date means the first day
on which an Employee performs an Hour of Service for the Employer
or an Affiliated Employer; and the term Reemployment Commencement
Date means the first day following a Break in Service on which an
Employee performs an Hour of Service for the Employer or an
Affiliated Employer.
(b) YEAR OF SERVICE FOR ELIGIBILITY: In any Plan Year in which the
eligibility requirements as determined under Section 2.1 are based
on Years of Service, (1) a Year of Service is a 12-consecutive
month period during which an Employee is credited with at least
1,000 Hours of Service; and (2) an Employee's initial eligibility
computation period will begin on his or her Employment
Commencement Date. The second eligibility computation period will
begin on the first day of the Plan Year which begins prior to the
first anniversary of the Employee's Employment Commencement Date
regardless of whether the Employee is credited with at least 1,000
Hours of Service during the initial computation period. If the
Employee is credited with 1,000 Hours of Service in both the
initial eligibility computation period and in the second
eligibility computation period, the Employee will be credited with
two Years of Service for eligibility purposes. If a Plan Year is
less than 12 consecutive months and the Hours of Service
requirement set forth herein is greater than one, such requirement
will be proportionately reduced.
(c) YEAR OF SERVICE FOR VESTING: In any Plan Year in which a
Participant's Vested Interest as determined under Section 4.6 is
based on Years of Service, (1) a Year of Service is a
12-consecutive month period during which an Employee is credited
with at least at least 1,000 Hours of Service; and (2) the Vesting
computation period will be the Plan Year. If a Plan Year is less
than 12 consecutive months and the Hours of Service requirement
set forth herein is greater than one, such requirement will be
proportionately reduced.
(d) PRIOR SERVICE CREDIT: An Employee will not receive credit for
Years of Service with any other entity for any purpose under the
terms of this Plan except as otherwise set forth herein with
respect to an Affiliated Employer or an Adopting Employer.
(e) REEMPLOYMENT BEFORE A BREAK IN SERVICE: If an Employee terminates
employment but is re-employed by the Employer before incurring a
Break in Service, his or her Years of Service and his or her
employment will not be deemed to have been interrupted during such
Plan Year and, if he or she was a Participant in the Plan (or
otherwise satisfied the requirements for participation
16
specified in Section 2.1), he or she will remain (or become) a
Participant immediately upon his or her re-employment by the
Employer. If an Employee was not a Participant in the Plan but
otherwise satisfied the requirements for participation specified
in the Plan, lie or she will become a Participant on the later of
the date the Employee would have entered the Plan had he or she
not terminated employment with the Employer, or upon the
Employee's reemployment date.
(f) REEMPLOYMENT AFTER A BREAK IN SERVICE: If an Employee terminates
employment and is subsequently re-employed by the Employer or an
Affiliated Employer after incurring a Break in Service, Years of
Service that were completed prior to the Break in Service will be
counted retroactively only after such Employee has completed a
Year of Service from his or her Reemployment Commencement Date,
subject to the following:
(1) DETERMINATION OF PERIODS OF SERVICE FOR ELIGIBILITY: For
eligibility purposes if such Employee did not have a Vested
Interest in his or her Participant's Account before the
Break in Service and the number of the Employee's
consecutive Breaks in Service equals or exceeds the greater
of five or the aggregate number of Years of Service, Years
of Service that were completed prior to the Break in
Service will not be counted. The aggregate number of Years
of Service will not include any Years of Service previously
disregarded hereunder by reason of prior Breaks in Service.
If such former Employee's Years of Service are disregarded
under this paragraph, he or she will be treated as a new
Employee for eligibility purposes.
(2) DETERMINATION OF YEARS OF SERVICE FOR PURPOSES OTHER THAN
ELIGIBILITY: For all purposes other than eligibility, if
the Employee has incurred 5 consecutive Breaks in Service,
Years of Service completed prior to such 5 consecutive
Breaks in Service will not be counted if the Employee did
not have a Vested Interest in his or her Participant's
Account and the number of consecutive Breaks in Service
equals or exceeds the aggregate number of Years of Service
before such period.
(3) ENTRY OR REENTRY INTO THE PLAN: Regardless of whether or
not such Employee was a Plan Participant before incurring
the Break in Service, he or she will be eligible to enter
the Plan as a Participant upon satisfaction of the
eligibility requirements set forth in Article 2 as though
he or she was a new Employee upon the Employee's
Re-employment Commencement Date, or if earlier upon
satisfaction of the eligibility requirements set forth in
Article 2 and the completion of an additional Year of
Service after the Employee's Reemployment Commencement
Date, at which time the Employee's participation in the
Plan will be deemed to have been reinstated as of his or
her Re-employment Commencement Date (provided the Employee
is re-employed by the Employer).
17
(4) RE-ENTRY FOR PURPOSES OF MAKING DEFERRALS: Notwithstanding
subparagraph (3) to the contrary, such Employee, solely for
the purpose of making Elective Deferrals, will re-enter the
Plan immediately upon re-employment by the Employer.
(g) EMPLOYEES UNDER 2-YEAR FULL AND IMMEDIATE VESTING: If this Plan at
any time (1) provides in Section 2.1 that an Employee must
complete 2 Years of Service for eligibility purposes, and (2)
provides in Section 4.6 that an Employee will have a 100% Vested
Interest in his or her Participant's Account upon becoming a
Participant, then the Years of Service of an Employee who incurs a
Break in Service before satisfying such 2 Years of Service
eligibility requirement will not be counted for eligibility
purposes.
ARTICLE 2
PLAN PARTICIPATION
2.1 ELIGIBILITY REQUIREMENTS: Any Employee who is not in an ineligible class
of Employees will be eligible to become a Participant in the Plan in
accordance with the following provisions:
(a) AGE AND SERVICE REQUIREMENT: Anyone who is a Participant on
January 1, 1997 will continue to participate in the Plan. Any
other Employee who is not a member of an ineligible class of
Employees will be eligible to enter the Plan as a Participant when
he or she reaches Age 21 and completes 1 Year of Service.
(b) INELIGIBLE CLASSES OF EMPLOYEES: All Employees are eligible to
participate in the Plan except for the following ineligible
classes of Employees: (1) Leased Employees; (2) any person who is
a director of the Employer and is acting solely in that capacity.
(c) PARTICIPATION BY INELIGIBLE EMPLOYEES: If an Employee who is not a
member of the eligible class of Employees becomes a member of the
eligible class, such Employee will participate in the Plan
immediately if he or she has satisfied the minimum age and service
requirements and would have previously become a Participant had he
or she been a member of the eligible class. The participation of a
Participant who becomes a member of an ineligible class will be
suspended, and such Participant will be entitled to an allocation
of Employer contributions and Forfeitures for the Plan Year only
to the extent of Hours of Service completed while a member of an
eligible class of Employees. Upon returning to an eligible class
of Employees, a suspended Participant will immediately participate
again in the Plan. The Vested Interest of a Participant who ceases
to be a member of an eligible class will continue to increase in
accordance with Section 4.6.
(d) PARTICIPATION BY FORMER PARTICIPANTS: A Participant who terminates
employment with the Employer for any reason but is subsequently
reemployed as an Eligible Employee will again become a Participant
in the Plan as provided in the definition of Year of Service.
18
2.2 ENTRY DATE: An Employee will enter the Plan as a Participant retroactive
to January 1st of the Plan Year in which he or she satisfies the
eligibility requirements in Section 2.1.
2.3 WAIVER OF PARTICIPATION: An Employee who is otherwise eligible to
participate in the Plan may elect to waive such participation in
accordance with the following provisions:
(a) IRREVOCABLE ELECTION: An Eligible Employee may make a one-time
irrevocable election to waive participation in the Plan. However,
the Administrator may in its sole discretion elect not to make
this option available to one or more Eligible Employees if the
Eligible Employee is not an HCE and is not likely to become an HCE
and if the Administrator determines that such waiver may cause the
Plan for any Plan Year to fail to satisfy one of the tests set
forth in Code Section 410(b)(1)(A) or Code Section 410(b)(1)(B)
and (C). The Employee's election to waive participation in the
Plan must be in writing and must be delivered to the Administrator
on or before the date the Employee first becomes eligible to
participate in the Plan. Notwithstanding the foregoing however,
once an Employee has become a Participant in the Plan, no waiver
can be made, except as provided in paragraph (b).
(b) ELECTION TO WAIVE ALLOCATION: Notwithstanding paragraph (a) above,
and subject to the Top-Heavy Minimum Benefit requirements of
Section 3.6, a Participant may agree to forego an allocation of
Employer contributions to his or her Participant's Account for all
or any Plan Years if such Participant is an HCE for such Plan
Year.
(c) ADMINISTRATIVE REQUIREMENTS: The Employee's election to waive
participation or forego an allocation must be in writing and must
be delivered to the Administrator on or before the date the
Employee first becomes eligible to participate in the Plan in the
case of a waiver under paragraph (a), and before the Participant
is entitled to an allocation to his or her Participant's Account
in the case of foregoing such allocation under paragraph (b) for a
Plan Year. The Administrator will furnish any form required to
make an election under this Section, which may include the
requirement for consent by the Employee's Spouse.
2.4 REEMPLOYMENT: If an Employee terminates employment and is subsequently
re-employed by the Employer or an Affiliated Employer, such Employee's
Years of Service for purposes of eligibility (as well as the time such
Employee enters or re-enters the Plan as a Participant) will be
determined in accordance with the rules described in the definition of
Years of Service.
2.5 EXCLUSION OF ELIGIBLE EMPLOYEE: If, in any Plan Year, any Employee who
should be included as a Participant in the Plan is erroneously excluded,
and discovery of such omission is not made until after a contribution for
that Plan Year has been made, the Employer will make a subsequent
contribution to the Plan (if necessary after the
19
application of available forfeitures, if any), or may correct such
omission by any other method of correction specified in Revenue Procedure
2000-16 (or in any subsequent Revenue Procedure or guidance issued by the
Internal Revenue Service) so that the omitted Employee receives the same
amount which the Employee would have received had he or she not been
omitted from the Plan.
2.6 INCLUSION OF INELIGIBLE EMPLOYEE: If, in any Plan Year, any person who
should not have been included as a Participant in the Plan is erroneously
included, and discovery of that incorrect inclusion is not made until
after a contribution for the year has been made, and such ineligible
Employee has not received a distribution of the amount erroneously
allocated to him or her, the Employer will not be entitled to recover the
contribution made with respect to the ineligible person, but the amount
erroneously contributed will be applied as a forfeiture (except for
elective deferrals in the case of a Code Section 40l(k) plan which will
be distributed to the ineligible Employee) for the Plan Year in which the
error is discovered.
ARTICLE 3
CONTRIBUTIONS AND ALLOCATIONS
3.1 EMPLOYER CONTRIBUTIONS: Each Plan Year, the Employer will contribute to
the Plan such amount as it may in its sole discretion determine, subject
to the following provisions:
(a) AMOUNT OF CONTRIBUTION: For each Plan Year beginning before
January 1, 2000, the Employer will make a money purchase pension
plan contribution equal to 10% of each Eligible Participant's
Compensation. The Employer, in its sole discretion, will determine
the amount of the contribution to be made to the stock bonus plan
and will notify the Trustee in writing of the amount contributed.
The Employer's determination of the amount of its contribution
will be binding on the Trustee, the Administrator and all
Participants and may not be reviewed in any manner.
(b) CONTRIBUTION PERIOD: Each Plan Year, any contribution made under
the terms of the Plan may, at the election of the Administrator,
be contributed to the Plan (1) each payroll period; (2) each
month; (3) each Plan quarter, (4) on an annual basis; or (5) on
any other less than annual contribution period basis as determined
by the Employer, provided such contribution period does not
discriminate in favor of Highly Compensated Employees. The
Employer may elect a different contribution period for each type
of contribution.
(c) CONTRIBUTION FOR MISTAKENLY EXCLUDED EMPLOYEES: Notwithstanding
paragraphs (a) and (b), if an Employee should have been included
as a Participant but is mistakenly excluded for any reason, the
omission will be corrected as specified in Section 2.5.
(d) FORM OF PAYMENT: Employer contributions may be paid to the Plan in
cash, Company Stock, or any other property permitted under Code
Section 4975 that is
20
acceptable to the Trustee. However, to the extent the Plan has
Current Obligations, the Employer's contribution must will be paid
to the Plan in cash sufficient to satisfy the Plan's Current
Obligations.
(e) REFUND OF CONTRIBUTIONS: Contributions made to the Plan by the
Employer can only be returned to the Employer in accordance with
the following provisions:
(1) FAILURE TO INITIALLY QUALIFY: If the Plan fails to
initially satisfy the requirements of Code Section 401(a)
and the Employer declines to amend the Plan to satisfy such
requirements, contributions made prior to the date such
qualification is denied must be returned to the Employer
within 1 year of the date of such denial, but only if the
application for the qualification is made by the time
prescribed by law for filing the Employer's tax return for
the taxable year in which the Plan is adopted, or by such
later date as the Secretary of the Treasury may prescribe.
(2) CONTRIBUTIONS MADE UNDER A MISTAKE OF FACT: If a
contribution is attributable in whole or in part to a good
faith mistake of fact, including a good faith mistake in
determining the deductibility of the contribution under
Code Section 404, then an amount may be returned to the
Employer which is equal to the excess of the amount
contributed over the amount which would have been
contributed had the mistake not occurred. Earnings
attributable to any such excess contribution will not be
returned, but losses attributable to the excess
contribution will reduce the amount so returned. Such
amount will be returned within one year of the date the
contribution was made or the deduction disallowed, as the
case may be.
(3) NONDEDUCTIBLE CONTRIBUTIONS: Except to the extent an
Employer may intentionally make a nondeductible
contribution, for example in order to correct an
administrative error or restore a Forfeiture, any
contribution by the Employer is conditioned on its
deductibility and will otherwise be returned to the
Employer.
3.2 ALLOCATION OF EMPLOYER CONTRIBUTIONS: Subject to the Top Heavy allocation
requirements of Section 3.5 and the Code Section 415 limitations of
Article 6, Employer contributions will be allocated on the annual
Valuation Date to each Eligible Participant's Account as follows:
(a) ALLOCATION OF CONTRIBUTIONS: The Employers contribution to the
plan will be allocated on the annual Valuation Date to each
Eligible Participant's Account in the proportion that the
Allocation Points (as defined herein) of each such Participant for
the Plan Year bears to the aggregate Allocation Points of all such
Participants for such Plan Year.
For purposes of the Plan, a Participant shall be credited with one
(1) Allocation point for each One Thousand Dollars ($1,000) of
Compensation and ten (10)
21
Allocation Points for each Year of Vesting Service, up to a
maximum of (10) Years of Vesting Service.
(b) ALLOCATION OF COMPANY STOCK: Subject to the requirements of
Section 3.3, Company Stock contributed to or otherwise purchased
by the Plan will be allocated to each Eligible Participant's
Company Stock Account in the ratio that each Eligible
Participant's Compensation bears to the total Compensation of all
Eligible Participants. However, Company Stock acquired by the Plan
with the proceeds of an Exempt Loan shall only be allocated to
each Participant's Company Stock Account upon release from the
Unallocated Company Stock Suspense Account as provided in Section
3.3(c) below. Company Stock acquired with the proceeds of an
Exempt Loan shall be an asset of the Trust Fund and maintained in
the Unallocated Company Stock Suspense Account. Company Stock
which has been released from the Unallocated Company Stock Account
during the Plan Year will be allocated on the annual Valuation
Date to each Eligible Participant's Company Stock Account in the
same ratio as described above.
(c) ALLOCATION OF OTHER INVESTMENTS: Each Eligible Participant's share
of cash or property, other than Company Stock and any dividends
attributable thereto, will be allocated to the Participant's Other
Investments Account in the ratio that his or her Compensation
bears to the total Compensation of all Eligible Participants.
(d) ALLOCATION OF CASH DIVIDENDS: Any cash dividends received by the
Plan which are attributable to shares of Company Stock allocated
to a Participant's Company Stock Account and which are not
currently distributed in accordance with Section 5.14 will be
allocated to the Participant's Other Investments Account.
3.3 COMPANY STOCK ACCOUNT: Company Stock allocable under Section 3.2 to an
Eligible Participant's Company Stock Account, or Company Stock released
from the Unallocated Company Stock Account during the Plan Year, will be
allocated to an Eligible Participant's Company Stock Account on the
annual Valuation Date in accordance with the following provisions:
(a) COMPANY STOCK: Each Eligible Participant's Company Stock Account
will be credited with his or her allocable share of Company Stock
(including fractional shares) purchased and paid for by the Plan
or contributed in kind by the Employer. However, all Company Stock
acquired by the Plan with the proceeds of an Exempt Loan must be
added to and maintained in the Unallocated Company Stock Suspense
Account. Such Company Stock shall be released and withdrawn from
that account as if all Company Stock in that account were
encumbered. In the case of a Sponsor that is an electing small
business corporation, the Plan may not use any dividends on any
allocated shares of Company Stock to pay an Exempt Loan that was
used to purchase Company Stock. Cash dividends paid on Company
Stock in a Participant's Company Stock Account will, in the sole
discretion of the Administrator, either be credited to the
Participant's Account or will be used to repay an Exempt Loan.
However, (1) when cash dividends are
22
used to repay an Exempt Loan, Company Stock will be released from
the Unallocated Company Stock Suspense Account and will be
allocated to each Eligible Participant's Company Stock Account in
the ratio that each Eligible Participant's Compensation for the
Plan Year bears to the total Compensation of all Eligible
Participants for the Plan Year, and (2) Company Stock allocated to
a Participant's Company Stock Account will have a fair market
value not less than the amount of cash dividends which would have
been allocated to such Participant's Account for the Plan Year.
(b) UNALLOCATED COMPANY STOCK ACCOUNT: Any Company Stock which is
acquired with an Exempt Loan and is in the Unallocated Company
Stock Account will only be withdrawn and allocated to
Participants' Accounts in accordance with the following
provisions:
(1) METHOD OF WITHDRAWING COMPANY STOCK FROM THE ACCOUNT: For
each Plan Year during the duration of an Exempt Loan, the
number of shares of Company Stock released from the Company
Stock Account will equal the number of shares held therein
immediately before release for the current Plan Year
multiplied by a fraction, the numerator of which is the
amount of principal and interest paid for the Plan Year and
the denominator of which is the sum of the numerator plus
the principal and interest to be paid for all future Plan
Years.
(2) METHOD OF ALLOCATING WITHDRAWN COMPANY STOCK TO
PARTICIPANTS: As of each Anniversary Date, the Plan must
consistently allocate to each Participant's Account, in the
same manner as Employer contributions under Section 3.1 are
allocated, non-monetary units (shares and fractional shares
of Company Stock) representing each Participant's interest
in Company Stock withdrawn from the Unallocated Company
Stock Suspense Account. However, Company Stock released
from the Unallocated Company Stock Account with cash
dividends pursuant to paragraph (a) will be allocated to
each Eligible Participant's Company Stock Account in the
same proportion that each such Participant's number of
shares of Company Stock sharing in such cash dividends
bears to the total number of shares of all Eligible
Participants' Company Stock sharing in such cash dividends.
(3) ALLOCATION OF INCOME: Income earned on Company Stock in the
Unallocated Company Stock Account will be used, at the
discretion of the Administrator, to repay the Exempt Loan
used to purchase such Company Stock Company Stock released
from the Unallocated Company Stock Account with such
income, and any income which is not so used, will be
allocated on the annual Valuation Date in the same
proportion that each Eligible Participant's Compensation
for the Plan Year bears to the total Compensation of all
Eligible Participants for the Plan Year.
23
(c) CODE Section 1042 STOCK: Notwithstanding the foregoing to the
contrary, any portion of the Plan's assets which are attributable
to (or allocable in lieu of) Company Stock acquired by the Plan in
a sale to which Code Section 1042 or Section 2057 applies will be
allocated as follows:
(1) NO ALLOCATION PERMITTED TO CERTAIN PARTICIPANTS: No portion
of any such assets may be allocated directly or indirectly
under this Plan or any other qualified plan of the Employer
during the Non-Allocation Period for the benefit of any
taxpayer who makes an election under Code Section 1042(a)
with respect to Company Stock or any decedent if the
executor of the estate of such decedent makes a qualified
sale to which Code Section 2057 applies; for the benefit of
any individual who is related to the taxpayer or the
decedent within the meaning of Code Section 267(b); or for
the benefit of any other person who owns, after applying
Code Section 318(a), more than 25% of any class of
outstanding stock of the Employer or of any corporation
which is a member of the same controlled group of
corporations within the meaning of Code Section 409(l)(4)
as the Employer; or the total value of any class of
outstanding stock of the Employer. For purposes hereof,
Code Section 318(a) will be applied without regard to the
employee trust exception in Code Section 318(a)(2)(B)(i);
and a person will be treated as failing to meet the stock
ownership limitation set forth in herein if such person
fails such limitation at any time during the 1-year period
ending on the date of sale of qualified securities to the
Plan, or on the date as of which such qualified securities
are allocated to Participants in the Plan.
(2) EXCEPTION FOR CERTAIN LINEAL DESCENDANTS: The restrictions
set forth in subparagraph (1) will not apply to any
individual who is a lineal descendant of the taxpayer if
the aggregate amount allocated to the benefit of all lineal
descendants during the Non-Allocation Period does not
exceed more than 5% of the Company Stock (or amounts
allocated in lieu thereof) held by the Plan which are
attributable to a sale to the Plan by any person related to
such descendants within the meaning of Code Section
267(c)(4) in a transaction to which Code Section 1042
applied.
(3) DEFINITION OF NON-ALLOCATION PERIOD: For purposes of this
paragraph (c), the term Non-Allocation Period as used above
means the 10-year period beginning on the later of (1) the
date of the sale of the qualified securities, or (2) the
date of the Plan allocation attributable to the final
payment of acquisition indebtedness incurred in connection
with such sale.
3.4 ALLOCATION OF EARNINGS AND LOSSES: As of each Valuation Date, accounts
which have not been distributed since the prior Valuation Date will have
the net income of the Trust Fund earned since the prior Valuation Date
allocated in accordance with such rules and procedures as may be
established by the Administrator, and applied in a uniform and
nondiscriminatory manner; or accounts will be valued and adjusted as
hereinafter set forth in this Section.
24
(a) DEFINITION OF NET INCOME: For purposes of this Section, the term
"net income" means the net of any interest, dividends, unrealized
appreciation and depreciation (other than the unrealized
appreciation or depreciation of the Company Stock allocated to the
Participants' Company Stock Accounts), capital gains and losses,
and investment expenses of the Trust Fund as determined on each
Valuation Date. Net income does not include (1) the interest paid
under any installment contract for the purchase of Company Stock
by the Plan or the interest paid on any loan used by the Plan to
purchase Company Stock; or (2) income received by the Trust Fund
with respect to Company Stock acquired with an Exempt Loan to the
extent such income is used to repay the loan. All income received
by the Trust Fund from Company Stock acquired with the proceeds of
an Exempt Loan may, at the discretion of the Administrator, be
used to repay such loan.
(b) ALLOCATIONS TO NON-SEGREGATED ACCOUNTS: All accounts (other than
Company Stock Accounts) which have not been segregated from the
general Trust Fund for investment purposes will for investment
purposes have net income allocated thereto in the ratio that the
value of each non-segregated account as of the preceding Valuation
Date bears to the total value of all non-segregated accounts as of
the preceding Valuation Date. The Forfeiture Account will share in
the allocation made under this paragraph.
(c) ALLOCATIONS TO SEGREGATED ACCOUNTS: Accounts (other than Company
Stock Accounts) which have been segregated from the general Trust
Fund for investment, including any Directed Investment Accounts
that may be established in accordance with Section 7.15 and any
other accounts, including Directed Investment Accounts, which are
valued on a daily basis will only have the net income earned
thereon allocated thereto. Any Policy dividends or credits will be
allocated to the Participant's Account for whose benefit the
Policy is held.
3.5 ALLOCATION OF FORFEITURES: As of the annual Valuation Date, any portion
of the Forfeiture Account which has not been used to pay administrative
expenses of the Plan will be allocated to each Eligible Participant's
Account in proportion that the Allocation Points (as defined herein) of
each such Participant for the Plan Year bears to the aggregate Allocation
Points of all such Participants for such Plan Year.
For purposes of the Plan, a Participant shall be credited with one (1)
Allocation point for each One Thousand Dollars ($1,000) of Compensation
and ten (10) Allocation Points for each Year of Vesting Service, up to a
maximum of (10) Years of Vesting Service.
3.6 TOP HEAVY MINIMUM ALLOCATION: In any Top Heavy Plan Year in which a Key
Employee receives an allocation of Employer contributions (including
Elective Deferrals and/or Qualified Matching Contributions) or
Forfeitures, each Employee who is described in paragraph (a) below will
receive the Top Heavy benefit required under the provisions of Code
Section 416, such benefit to be determined in accordance with the
following provisions:
25
(a) PARTICIPANTS WHO MUST RECEIVE THE TOP HEAVY MINIMUM ALLOCATION:
For each Plan Year in which a Top Heavy contribution is required,
the Top Heavy Minimum Allocation (or such lesser amount as may be
permitted under paragraph (b) below) will be made for each
Participant who is a Non-Key Employee and is employed by an
Employer on the last day of the Plan Year and is in an eligible
class of Employees as described in Section 2.1, even if such
Participant (1) fails to complete any minimum Hours of Service or
Period of Service required to receive an allocation of Employer
contributions or Forfeitures for the Plan Year; (2) fails to make
elective contributions to the Plan in the case of a cash or
deferred arrangement; (3) receives Compensation that is less than
a stated amount; or (4) declines to make a mandatory Employee
contribution to the Plan.
(b) LESSER ALLOCATION ALLOWED: If the amount of Employer contributions
and Forfeitures allocated to the Participant's Account of each Key
Employee for the Plan Year is less than 3% of his or her
Compensation, and if this Plan is not required to be included in
an Aggregation Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or Section 410, then the
allocation made under this Section for each Participant who is
described in paragraph (a) above must be equal to the largest
percentage of Employer contributions and Forfeitures allocated to
the Participant's Account of a Key Employee for that Plan Year
(determined after taking into account elective contributions made
by a Key Employee to a cash or deferred arrangement maintained by
the Employer).
(c) PARTICIPATION IN MULTIPLE DEFINED CONTRIBUTION PLANS: If a
Participant described in paragraph (a) above participates in this
Plan and in one or more defined contribution plans that are
included with this Plan in a Required Aggregation Group, and if
the allocation of Employer contributions and Forfeitures in this
Plan or any other such defined contribution plan is insufficient
to satisfy the Top Heavy requirement with respect to such
Participant, such requirement will nevertheless be deemed to be
satisfied if the aggregate allocation of Employer contributions
and Forfeitures under this Plan and all other such plans on behalf
of the Participant is sufficient to satisfy the Top Heavy
requirement. If not, the Employer will make an additional
contribution to this Plan and/or to one or more such plans on
behalf of the Participant in order that the aggregate allocation
of Employer contributions and Forfeitures to this Plan and all
such plans satisfies the Top Heavy requirements.
ARTICLE 4
PLAN BENEFITS
4.1 BENEFIT UPON NORMAL OR EARLY RETIREMENT: Every Participant who has
reached Normal Retirement Age (or Early) Retirement Age) and who does not
remain employed by the Employer will be entitled upon termination of
employment to receive his or her Vested Aggregate Account balance
determined as of the most recent Valuation Date coinciding with or
immediately preceding the date of distribution. Distribution will made
under Section 5.1.
26
4.2 BENEFIT UPON LATE RETIREMENT: A Participant who reaches Normal (or Early)
Retirement Age and who remains employed by the Employer will continue to
participate in the Plan and will continue to receive allocations under
Article 3 until he or she terminates employment with the Employer, at
which time the Participant will be entitled to his or her Vested
Aggregate Account balance determined as of the most recent Valuation Date
coinciding with or immediately preceding the date of distribution.
Distribution will be made under Section 5.1.
4.3 BENEFIT UPON DEATH: Upon the death of a Participant prior to Termination
of Employment, or upon the death of a Terminated Participant prior to
distribution of his or her Vested Aggregate Account, his or her
Beneficiary will be entitled to the Participant's Vested Aggregate
Account balance determined as of the most recent Valuation Date
coinciding with or immediately preceding the date of distribution. If any
Beneficiary who is alive on the date of the Participant's death dies
before receiving the entire death benefit to which he or she is entitled,
the balance of the death benefit will be distributed to the Beneficiary's
beneficiary in accordance with Section 5.2. The Administrator's
determination that a Participant has died and that a particular person
has a right to receive a death benefit will be final. Distribution will
be made under Section 5.2.
4.4 BENEFIT UPON DISABILITY: If a Participant suffers a Disability prior to
Termination of Employment and terminates employment with the Employer as
a result of that Disability, or if a Terminated Participant suffers a
Disability prior to a distribution of his or her Vested Aggregate Account
balance, he or she will be entitled to his or her Vested Aggregate
Account balance determined as of the most recent Valuation Date
coinciding with or immediately preceding the date of distribution.
Distribution will be made under Section 5.3.
4.5 BENEFIT UPON TERMINATION: A Participant who incurs a Termination of
Employment will be entitled to his or her Vested Aggregate Account
determined as of the most recent Valuation Date coinciding with or
immediately preceding the date of distribution. A Terminated
Participant's Vested Aggregate Account will be distributed under Section
5.4 unless, prior to the time of distribution set forth therein, the
Participant (1) dies, in which case distribution will be made under 5.2;
or (2) suffers a Disability, in which case distribution will be made
under Section 5.3.
4.6 DETERMINATION OF VESTED INTEREST: A Participant's Vested Interest in his
or her Participant's Account will be determined in accordance with the
following provisions:
(a) 100% VESTING UPON RETIREMENT OR DEATH: A Participant will have a
100% Vested Interest in his Participant's Account upon reaching
Normal Retirement Age prior to Termination of Employment, or upon
death prior to that date.
(b) VESTING PRIOR TO RETIREMENT OR DEATH: Except as otherwise provided
in paragraph (a) above, a Participant's Vested Interest in his or
her Participant's Account at any given time, including Termination
of Employment prior to Normal Retirement Age or death, will be
determined in a non-Top Heavy Plan
27
Year by the vesting schedule which immediately follows this
paragraph based on the number of Years of Service the Participant
has completed on the date of determination. In determining a
Participant's Vested Interest hereunder, Years of Service during
any period for which the Employer did not maintain this Plan or a
predecessor plan will be disregarded.
YEARS OF SERVICE VESTED INTEREST
1 0%
2 0%
3 0%
4 0%
5 100%
(c) VESTING IN A TOP HEAVY PLAN YEAR: Notwithstanding the vesting
schedule in paragraph (b), the Vested Interest of a Participant's
Account in a Top Heavy Plan Year will be determined by the vesting
schedule which immediately follows this paragraph. If this Plan
ceases to be Top Heavy and the vesting schedule in paragraph (b)
becomes effective, a Participant's Vested Interest as determined
under the vesting schedule in this paragraph cannot be reduced.
Furthermore, any such reversion to the vesting schedule in
paragraph (b) will be considered an amendment to this Section and
will be treated in accordance with the provisions paragraph (d) of
this Section pertaining to such amendments.
YEARS OF SERVICE VESTED INTEREST
2 20%
3 40%
4 60%
5 80%
6 100%
(d) AMENDMENTS TO VESTING SCHEDULE: No amendment may directly or
indirectly reduce a Participant's Vested Interest in his or her
Participant's Account. If the Plan is amended in any way that
directly or indirectly affects the computation of a Participant's
Vested Interest in his or her Participant's Account or the Plan is
deemed amended by an automatic change to or from a Top Heavy
vesting schedule, the following provisions will apply:
(1) PARTICIPANT ELECTION: Any Participant with at least three
Years of Service may, by filing a written request with the
Administrator, elect to have the Vested Interest in his or
her Participant's Account computed by the vesting schedule
in effect prior to the amendment. A Participant who fails
to make an election will have his or her Vested Interest
computed under the new schedule. The period during in the
election may be made will begin on the date the amendment
is adopted or is deemed to be made and will end on the
latest of (1) 60 days after the amendment is adopted; (2)
60 days after the amendment becomes effective; or (3) 60
days after the
28
Participant is issued written notice of the amendment by
the Employer or Administrator.
(2) PRESERVATION OF VESTED INTEREST: Notwithstanding the
foregoing to the contrary, if the vesting schedule is
amended, then in the case of an Employee who is a
Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the Vested
Interest in his or her Participants Account determined as
of such date will not be less than his or her Vested
Interest computed under the Plan without regard to such
amendment.
ARTICLE 5
DISTRIBUTION OF BENEFITS
5.1 BENEFIT UPON RETIREMENT: Unless a cash-out occurs under Section 5.5, the
retirement benefit a Participant is entitled to receive under Section 4.1
or 4.2 will be distributed as follows:
(a) FORM OF DISTRIBUTION: A Participant's retirement benefit will be
distributed in monthly, quarterly, semi-annual or annual
installments over a period certain that does not extend beyond the
Participant's life, or beyond the lives of the Participant and a
designated Beneficiary (or beyond the life expectancy of the
Participant or the joint and last survivor expectancy of the
Participant and a designated Beneficiary). The Trustee may make
the installment payments by segregating and separately investing
the lump sum value of the Participant's retirement benefit and
paying the installments from the Plan, or by purchasing a
nontransferable annuity which provides for the installment
payments.
(b) SPECIAL RULE FOR COMPANY STOCK: Unless the Participant elects in
writing a longer distribution period under paragraph (a),
distribution of a Participant's Company Stock Account will be in
substantially equal monthly, quarterly, semiannual, or annual
installments over a period not longer than 5 years. If the
Participant's Company Stock Account balance exceeds $500,000, the
5 year period will be extended 1 additional year (but not more
than 5 additional years) for each $100,000 or fraction thereof by
which the Participant's Company Stock Account balance exceeds
$500,000. The dollar limits herein will be adjusted at the same
time and in the same manner as provided in Code Section 415(d).
(c) TIME OF DISTRIBUTION: Distribution under this Section will be made
within a reasonable time after the Participant's actual retirement
date, but distribution must begin no later than the Participant's
Required Beginning Date. Notwithstanding the foregoing,
distribution of a Participant's Company Stock Account will begin
no later than 1 year after the close of the Plan Year in which the
Participant actually retires unless the Participant otherwise
elects, except that Company Stock acquired with the proceeds of an
Exempt Loan will be excluded until the close of the Plan Year in
which such loan is repaid in full.
29
5.2 BENEFIT UPON DEATH: Unless a cash-out occurs under Section 5.5, a
deceased Participant's death benefit as determined under Section 4.3 xxxx
be distributed as follows:
(a) SURVIVING SPOUSE: Notwithstanding any other Beneficiary
designation made by a Participant, if a Participant is married on
the date of death, the surviving spouse will be entitled to
receive 100% of the deceased Participant's death benefit unless
the surviving spouse has waived that right under Section 5.8. The
benefit will be distributed in monthly, quarterly, semi-annual or
annual installments over a period certain that does not extend
beyond the life of the surviving spouse or beyond the life
expectancy of the surviving spouse. The Trustee may make the
installment payments by segregating and separately investing the
lump sum value of the benefit and paying the installments from the
Plan, or by purchasing a nontransferable annuity which provides
for the installments. The surviving spouse may (1) elect to have
any death benefit to which he or she is entitled distributed
within a reasonable time after the death of the Participant; or
(2) elect to defer distribution of the death benefit, but
distribution may not be deferred beyond December 31st of the
calendar year in which the deceased Participant would have
attained Age 70 1/2.
(b) DEATH OF SURVIVING SPOUSE BEFORE DISTRIBUTION BEGINS: If the
surviving spouse dies before distribution of the death benefit
begins, then distribution of the benefit will be made as if the
surviving spouse were the Participant. Distribution will be
considered as having commenced when the deceased Participant would
have reached Age 70 1/2 even if payments have been made to the
surviving spouse before that date.
(c) NON-SPOUSE BENEFICIARY: Any death benefit payable to a non-spouse
Beneficiary will be distributed in monthly, quarterly, semi-annual
or annual installments over a period certain that does not extend
beyond the life of the Beneficiary or beyond the life expectancy
of the Beneficiary. The Trustee may make the installment payments
by segregating and separately investing the lump sum value of the
death benefit and paying the installments from the Plan, or by
purchasing a nontransferable annuity which provides for
installments. Distribution will be made within a reasonable time
after the death of the Participant; but distribution must begin no
later than December 31st of the calendar year immediately
following the calendar year in which the Participant died.
(d) SPECIAL RULE FOR COMPANY STOCK: If a Beneficiary elects to receive
a lump sum payment, distribution of the Company Stock Account will
begin no later than 1 year after the close of the Plan Year in
which the Participant dies unless the Beneficiary otherwise
elects. If a Beneficiary elects installments, distribution of the
Company Stock Account will be in substantially equal monthly,
quarterly, semiannual, or annual installments over a period not
longer than 5 years unless the Beneficiary elects in writing a
longer distribution period. If the deceased Participant's Company
Stock Account balance exceeds $500,000, the 5 year period will be
extended 1 additional year (but not more than 5 additional years)
30
for each $100,000 or fraction thereof by which the Participant's
Company Stock balance exceeds $500,000. The dollar limits herein
will be adjusted at the same time and in the same manner as
provided in Code Section 415(d). Notwithstanding the foregoing,
Company Stock acquired with the proceeds of an Exempt Loan will be
excluded from distribution until the close of the Plan Year in
which such loan is repaid in full.
(e) PARTICIPANTS IN PAY STATUS: If a Participant who has started
receiving distribution of his or her retirement benefit dies
before the entire benefit has been distributed, the balance of the
benefit will be distributed to the Participant's Beneficiary at
least as rapidly as under the method of distribution being used on
the date of the Participant's death.
(f) PAYMENTS TO A BENEFICIARY OF A BENEFICIARY: In the absence of a
Beneficiary designation or other directive from the deceased
Participant to the contrary, any Beneficiary may name his or her
own Beneficiary to receive any benefits payable in the event of
the Beneficiary's death prior to receiving the entire death
benefit to which the Beneficiary is entitled. If a Beneficiary has
not named his or her own Beneficiary, the Beneficiary's estate
will be the Beneficiary. If any benefit is payable under this
paragraph to a Beneficiary of the deceased Participant's
Beneficiary or to the estate of the deceased Participant's
Beneficiary, or to any other Beneficiary or the estate thereof,
subject to the limitations regarding the latest dates for benefit
payment in paragraphs (a) and (c), the Administrator may (1)
continue to pay the remaining value of such benefits in the amount
and form already commenced, or pay such benefits in any other
manner permitted under the Plan for a Participant or Beneficiary,
and (2) if payments have not already commenced, pay such benefits
in any other manner permitted under the Plan. Distribution to the
Beneficiary of a Beneficiary must begin no later than the date
distribution would have been made to the Participant's
Beneficiary. The Administrator's determination under this
paragraph will be final and will be applied in a manner that does
not discriminate in favor of Highly Compensated Employees.
5.3 DISABILITY BENEFITS: Unless a cash-out occurs under Section 5.5, a
Participant's Disability benefit as determined under Section 4.4 will be
distributed as follows:
(a) FORM OF DISTRIBUTION: A Participant's Disability benefit will be
distributed in monthly, quarterly, semi-annual or annual
installments over a period certain that does not extend beyond the
Participant's life, or beyond the lives of the Participant and a
designated Beneficiary (or beyond the life expectancy of the
Participant or the joint and last survivor expectancy of the
Participant and a designated Beneficiary). The Trustee may make
the installment payments by segregating and separately investing
the lump sum value of the Participant's Disability benefit and
paying the installments from the Plan, or by purchasing a
nontransferable annuity which provides for the installment
payments.
31
(b) SPECIAL RULE FOR COMPANY STOCK: Unless the Participant elects in
writing a longer distribution period under paragraph (a),
distribution of a Participant's Company Stock Account will be in
substantially equal monthly, quarterly, semiannual, or annual
installments over a period not longer than 5 years. If the
Participant's Company Stock Account balance exceeds $500,000, the
5 year period will be extended 1 additional year (but not more
than 5 additional years) for each $100,000 or fraction thereof by
which the Participant's Company Stock Account balance exceeds
$500,000. The dollar limits herein will be adjusted at the same
time and in the same manner as provided in Code Section 415(d).
(c) TIME OF DISTRIBUTION: Distribution under this Section will be made
within a reasonable time after the date on which the Participant
who suffers the Disability actually retires, but distribution must
begin no later than the Participant's Required Beginning Date.
Notwithstanding the foregoing, distribution of a Participant's
Company Stock Account will begin no later than 1 year after the
close of the Plan Year in which the Participant who suffers a
Disability actually retires unless the Participant otherwise
elects, except that Company Stock acquired with the proceeds of an
Exempt Loan will be excluded until the close of the Plan Year in
which such loan is repaid in full.
5.4 BENEFIT UPON TERMINATION: Unless a cash-out occurs under Section 5.5 or a
prior distribution has been made under Section 5.2 or Section 53, the
benefit a Terminated Participant is entitled to receive under Section 4.5
will be distributed as follows:
(a) FORM OF DISTRIBUTION: A Terminated Participant's benefit will be
distributed in monthly, quarterly, semi-annual or annual
installments over a period certain that does not extend beyond
such Participant's life, or beyond the lives of the Participant
and a designated Beneficiary (or beyond the life expectancy of the
Participant or the joint and last survivor expectancy of the
Participant and a designated Beneficiary). The Trustee may make
the installment payments by segregating and separately investing
the lump sum value of a Terminated Participant's benefit and
paying the installments from the Plan, or by purchasing a
nontransferable annuity which provides for the installment
payments.
(b) SPECIAL RULE FOR COMPANY STOCK: Unless a Terminated Participant
elects in writing a longer distribution period under paragraph
(a), distribution of his or her Company Stock Account will be in
substantially equal monthly, quarterly, semiannual, or annual
installments over a period not longer than 5 years. If a
Terminated Participant's Company Stock Account exceeds $500,000,
the 5 year period will be extended t additional year (but not more
than 5 additional years) for each $100,000 or fraction thereof by
which the Participant's Company Stock Account balance exceeds
$500,000. The dollar limits herein will be adjusted at the same
time and in the same manner as provided in Code Section 415(d).
(c) TIME OF DISTRIBUTION: Distribution under this Section will be made
within a reasonable time after Termination of Employment occurs,
but must begin no later
32
than the Required Beginning Date. However, if a Terminated
Participant is not reemployed by the Employer at the end of the
5th Plan Year following the Plan Year of his or her Termination of
Employment, distribution of his or her Company Stock Account will
begin not later than 1 year after the close of the 5th Plan Year
following the Plan Year in which the Participant incurs such
Termination of Employment. However, if a Terminated Participant is
reemployed by the Employer as of the last DAY of the 5th Plan Year
following the Plan Year of such Termination of Employment,
distribution of his or her Company Stock Account will be postponed
until the Participant is otherwise entitled to a distribution
under the Plan. For purposes of this paragraph, Company Stock
acquired with the proceeds of an Exempt Loan will be excluded
until the close of the Plan Year in which such loan is repaid in
full.
5.5 CASH-OUT OF BENEFITS: The Administrator, without the consent of the
Participant, may distribute a Participant's Vested Aggregate Account in a
lump sum any time after a Participant terminates employment, subject to
the following provisions:
(a) GENERAL RULE: The Administrator can only make distribution under
this Section (1) with regard to distributions made for Plan Years
beginning prior to August 6, 1997 (or such later date as
determined by the Administrator), if the Participant's Vested
Aggregate Account on the date he or she terminates employment with
the Employer does not exceed, or at the time of any prior
distribution did not exceed, $3,500 (or such lesser amount as may
be designated by the Administrator); and (2) for Plan Years
beginning on or after August 6, 1997 (or such later date as
determined by the Administrator), if a Participant's Vested
Aggregate Account on the date he or she terminates employment with
the Employer does not exceed, or at the time of any prior
distribution did not exceed, $5,000 (or such lesser amount as may
be designated by the Administrator). Any such distribution will be
made as soon as administratively feasible after the date the
Participant terminates employment, and any portion of the
Participant's Account which is not Vested will be treated as a
Forfeiture.
(b) LATER DISTRIBUTION IF ACCOUNT FALLS TO $5,000: With regard to
distributions made for Plan Years beginning on or after October
17, 2000, if a Participant would have received a distribution
under paragraph (a) but for the fact that the Participant's Vested
Aggregate Account exceeded $5,000 (or such lesser amount as may be
designated by the Administrator) when the Participant terminated
employment, and if at a later time the Participant's Vested
Aggregate Account is reduced to an amount not greater than $5,000
(or such lesser amount as may be designated by the Administrator),
the Administrator may distribute such remaining amount in a lump
sum without the Participant's consent as soon as administratively
feasible after the date the Participant terminates employment, and
any portion of the Participant's Account which is not Vested will
be treated as a Forfeiture.
(c) DEEMED DISTRIBUTION: If a Participant's Vested Interest in his or
her Participant's Account is zero on the date the Participant
terminates employment,
33
the Participant will be deemed to have received a distribution of
such Vested Interest on the date of such termination.
5.6 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS: If a Participant's Vested
Aggregate Account exceeds the amount set forth in paragraph (a) of this
Section and is immediately distributable, such account can only be
distributed in accordance with the following provisions:
(a) GENERAL RULE: If a Participant's Vested Aggregate Account balance
exceeds $5,000, or if there are remaining payments to be made with
respect to a particular distribution option that previously
commenced, and such amount is immediately distributable, the
Participant must consent to any distribution of such amount. Any
portion of the Participant's Account which is not Vested will be
treated as a Forfeiture. If less than the entire Vested Aggregate
Account balance is distributed, the part of the non-Vested portion
that will be treated as a Forfeiture is the total non-Vested
portion multiplied by a fraction, the numerator of which is the
amount of the distribution attributable to Employer contributions
and the denominator of which is the total value of the Vested
Interest in the Participant's Account.
(b) TRANSITION RULE: Notwithstanding paragraph (a), with regard to
distributions made prior to October 17, 2000, if a Participant's
Vested Aggregate Account balance exceeded $3,500 (or exceeded
$3,500 at the time of any prior distribution) for Plan Years
beginning before August 6, 1997 (or such later date as determined
by the Administrator), or (2) exceeded $5,000 (or exceeded $5,000
at the time of any prior distribution) for Plan Years beginning
after August 5, 1997 (or such later date as determined by the
Administrator) and for a distribution made prior to October 17,
2000; or (3) either exceeded $5,000 or was a remaining payment
under a selected optional form of payment that exceeded $5,000 at
the time the selected payment began for Plan Years beginning after
August 5, 1997 (or such later date as determined by the
Administrator) and for a distribution made after October 16, 2000,
and if the account balance is immediately distributable, then the
Participant must consent to any distribution of such account
balance.
(c) DEFINITION OF IMMEDIATELY DISTRIBUTABLE: A Participant's benefit
is immediately distributable if any part of the benefit could be
distributed to the Participant (or the Participant's surviving
spouse) before the Participant reaches (or would have reached if
not deceased) the later of his or her Normal Retirement Age or Age
62.
(d) GENERAL CONSENT REQUIREMENT: The consent of the Participant to any
benefit that is immediately distributable must be obtained in
writing within the 90-day period ending on the Annuity Starting
Date. However, the Participant will not be required to consent to
a distribution that is required by Code Section 401(a)(9) or
Section 415.
34
(e) NOTIFICATION REQUIREMENTS: The Administrator must notify the
Participant of the right to defer any distribution until the
benefit is no longer immediately distributable. Notification will
include a general explanation of the material features and
relative values of the optional forms of benefit available under
the Plan in a manner that would satisfy the notice requirements of
Code Section 417(a)(3); and will be provided no less than 30 days
or more than 90 DAYS prior to the Annuity Starting Date.
(f) WAIVER OF 30-DAY REQUIREMENT: For Plan Years beginning on or after
January 1, 1997, distribution of the Participants benefit may
begin less than 30 days after the notice described in paragraph
(c) is given if (1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving notice to consider the decision of
whether or not to elect a distribution; (2) the Participant, after
receiving the notice, affirmatively elects a distribution (or a
particular distribution option).
(g) CONSENT NOT NEEDED ON PLAN TERMINATION: If upon Plan termination
neither the Employer nor an Affiliated Employer maintains another
defined contribution plan other than an employee stock ownership
plan (ESOP) as defined in Code Section 4975(e)(7), the
Participant's benefit will, without the Participant's consent, be
distributed to the Participant. If the Employer or an Affiliated
Employer maintains another defined contribution plan other than an
ESOP, the Participant's benefit will, without the Participant's
consent, be transferred to the other plan if the Participant does
not consent to an immediate distribution hereunder.
5.7 RESTORATION OF FORFEITED ACCOUNT BALANCE: If a Participant who does not
have a 100% Vested Interest in his or Participant's Account terminates
employment with the Employer and receives (or is deemed to have received)
a distribution of such Vested Interest from the Plan, and such
Participant is subsequently rehired by the Employer, his or her
Participant's Account upon such reemployment will be administered in
accordance with the following provisions:
(a) REEMPLOYMENT BEFORE FIVE CONSECUTIVE BREAKS IN SERVICE: If a
terminated Participant is reemployed by the Employer before
incurring five consecutive Breaks in Service, such Participant's
Account balance will be restored in accordance with the following:
(1) PARTIALLY VESTED PARTICIPANTS: If upon termination of
employment a Participant has a partially Vested
Participant's Account, upon reemployment by the Employer
prior to incurring five consecutive Breaks in Service, such
Participant's Account balance will be restored to the
amount on the date of distribution if the Participant
repays to the Plan the fill amount of the distribution
attributable to Employer contributions before the earlier
of five years after the first date on which the Participant
is subsequently re-employed by the Employer or the date on
which the Participant incurs five consecutive Breaks in
Service following the date of distribution.
35
(2) NON-VESTED PARTICIPANTS: If upon termination of employment
a Participant's Vested Interest in his or her Participant's
Account is zero and such Participant is deemed to have
received a distribution of such Vested Interest before the
date on which he or she incurs five consecutive Breaks in
Service, then upon reemployment prior to incurring five
consecutive Breaks in Service, such Participant's Account
balance which was attributable to Employer contributions
will be restored to the amount on the date of the deemed
distribution.
(3) SOURCE OF FUNDS: The Administrator, on a case by case
basis, may elect to restore a Participant's Account balance
under this Section by the use of Forfeitures, by the use of
earnings from non-segregated Trust Fund accounts, by the
use of Employer contributions, or by the use of any
combination thereof.
(b) REEMPLOYMENT AFTER FIVE CONSECUTIVE BREAKS IN SERVICE: If a
terminated Participant is reemployed by the Employer after
incurring five consecutive Breaks in Service, that portion, if
any, of his or her Participant's Account which is (or is deemed to
be) a Forfeiture will be permanently forfeited under the terms of
this Plan.
5.8 SPOUSAL CONSENT REQUIREMENTS: A surviving spouse's election not to
receive a death benefit under Section 5.2 will not be effective unless
(1) the election is in writing; (2) the election designates a specific
Beneficiary or form of benefit which may not be changed without spousal
consent (or the spouse's consent expressly permits designations by the
Participant without any requirement of further spousal consent); and (3)
the spouse's consent acknowledges the effect of the election and is
witnessed by the Administrator or a notary public.
5.9 APPLICATION OF CODE SECTION 401(a)(9): All distributions made under the
terms of the Plan will be determined and made in accordance with the
regulations issued under Code Section 401(a)(9), including the minimum
distribution incidental benefit requirement of regulation Section
1.401(a)(9)-2, and any provisions in this Plan which reflect Code Section
401(a)(9) will override any distribution options which are inconsistent
with such Code section and regulations. If Participant's Vested Aggregate
Account is paid in a form that is based on life expectancies through
other than the purchase of an immediate annuity, the joint life
expectancies of the Participant and his or her Spouse will be
recalculated annually unless the Participant elects the non-recalculation
method of determining life expectancy. In the case of any other
Beneficiary, life expectancy will be calculated when payment first
commences, and payments for any 12-consecutive month period will be based
on such life expectancy minus the number of whole years passed since
distribution commenced.
5.10 STATUTORY COMMENCEMENT OF BENEFITS: Unless the Participant otherwise
elects, distribution of a Participant's benefit must begin no later than
the 60th day after the latest of the close of the Plan Year in which the
Participant (1) reaches the earlier of Age 65 or Normal Retirement Age;
(2) reaches the 10th anniversary of the year
36
the Participant commenced Plan participation; or (3) terminates service
with the Employer. However, the failure of a Participant and the
Participant's spouse to consent to a distribution while a benefit is
immediately distributable within the meaning of Section 5.6 above will be
deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this Section. In addition, if this Plan provides
for early retirement, a Participant who satisfied the service requirement
for early retirement prior to Termination of Employment will be entitled
to receive his or her Vested Aggregate Account balance, if any, upon
satisfaction of the age requirement for early retirement.
5.11 DISTRIBUTION IN EVENT OF LEGAL INCAPACITY: If any person who is entitled
to receive a distribution of benefits (the "Payee") suffers from a
Disability or is under a legal incapacity, payments may be made in one or
more of the following ways as directed by the Administrator: (a) to the
Payee directly; (b) to the guardian or legal representative of the
Payee's person or estate; (c) to a relative of the Payee, to be expended
for the Payee's benefit; or (d) to the custodian of the Payee under any
Uniform Transfers to Minors Act or under any Uniform Gifts To Minors Act.
The Administrator's determination of the minority or incapacity of any
payee will be final.
5.12 MISSING PARTICIPANTS: Neither the Trustee nor the Administrator will be
required to search for or ascertain the whereabouts of any Participant or
Beneficiary. With respect to a Participant or Beneficiary who has not
claimed any benefit (the "missing payee") to which such missing payee is
entitled, and with respect to any Participant or Beneficiary who has not
satisfied the administrative requirements for benefit payment, the
following provisions will apply:
(a) ATTEMPT TO CONTACT AND FORFEITURE OF BENEFIT: The Administrator
will notify a missing payee that he or she is entitled to a
distribution under the Plan, by certified or registered mail
addressed to the missing payee's last known address. The
Administrator, in its sole discretion, may also utilize other
methods of locating a missing payee, including letter forwarding
programs offered by the Internal Revenue Service or the Social
Security Administration, or internet or other search services
offered by the Pension Benefit Guaranty Corporation (PBGC) if such
services are made available to defined contributions plans; or by
placing public notices in a local newspaper. If a missing payee
fails to make his or her whereabouts known in writing to the
Trustee or Administrator or otherwise fails to claim a benefit, or
the administrative requirements for benefit payment for any payee
are not satisfied, upon the earlier to occur of (1) the later of
the date the Plan is terminated or discontinued or six months from
the date the notice was mailed or (2) the date which is two years
from the date the notice was mailed, the Administrator may, but
will not be required to, treat the payee's benefit as a
forfeiture, subject to paragraphs (b) and (c).
(b) ALTERNATIVE METHODS TO FORFEITURE: In lieu of Forfeiture under
paragraph (a), the Administrator may elect one the following
alternatives described below:
(1) DIRECT ROLLOVER TO XXX: If a Participant's Vested Aggregate
Account balance (determined before taking into account his
or her Rollover
37
Account) on the date he or she terminated employment with
the Employer does not exceed $5,000 (or such lesser amount
as may be designated by the Administrator), the
Administrator may elect to make distribution under this
Section in the form of a direct rollover to an individual
retirement account (XXX) if it can be established by the
Administrator at a qualified financial institution. In
establishing any such XXX, the Administrator will select an
XXX trustee, custodian or issuer that is unrelated to the
Employer or Administrator and will make the initial
investment choices for the XXX. The default direct rollover
will occur not less than 30 days and not more than 90 days
after the Code Section 402(f) notice with the explanation
of the default direct rollover is provided to the
Participant or other payee.
(2) ESCHEAT TO THE STATE: The Administrator may elect to
escheat the payee's benefit to the state in which the
Sponsor's principal place of business is located.
(3) OTHER METHODS OF DISTRIBUTION: The Administrator may elect
to distribute a payee's benefit by any other method
approved by the United States Department of the Treasury
and/or by the United States Department of Labor.
(c) CONDITIONS FOR RESTORATION OF FORFEITED BENEFIT: If a payee whose
benefit has been forfeited under paragraph (a) is located, or if a
payee whose benefit has been forfeited under paragraph (a) for
failure to satisfy the administrative requirements for benefit
payment subsequently satisfies the administrative requirements for
benefit payment and claims the benefit, and if the Plan has not
terminated (or if the Plan has, all benefits have not yet been
paid), then the benefit will be restored. The Administrator, on a
case by case basis, may elect to restore the benefit by the use of
either earnings from non-segregated Trust Fund assets, or Employer
contributions, or any combination thereof. However, if such
missing payee has not been located by the time the Plan terminates
and all benefits have been distributed therefrom, the Forfeiture
of such unpaid benefit will be irrevocable.
5.13 DIRECT ROLLOVERS: A distributee may elect to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover, which is a
payment by the Plan to the eligible retirement plan specified by the
distributee.
(a) ELIGIBLE ROLLOVER DISTRIBUTION: n eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include any distribution that is one of a
series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution
to the extent such distribution is required under Code Section
401(a)(9); the portion of any distribution that is not includible
in gross income (determined without regard to the exclusion for
38
net unrealized appreciation with respect to employer securities);
and for Plan Years beginning on or after January 1, 2000, the
portion of any distribution which is attributable to a hardship
distribution described in Code Section 401(k)(2)(B)(i)(IV).
(b) ELIGIBLE RETIREMENT PLAN: An eligible retirement plan is an
individual retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) DEFINITION OF DISTRIBUTEE: For purposes of this Section, a
distributee includes an Employee or former Employee. In addition,
an Employee's or former Employee's Surviving Spouse and an
Employee's or former Employee's spouse or former Spouse who is the
alternate payee under a qualified domestic relations order as
defined in Code Section 414(p), are distributees with regard to
the interest of the Spouse or former Spouse.
5.14 FORM OF DISTRIBUTION: All distributions made under the other provisions
of this Article 5 will be in the form of cash or Company Stock, or both,
subject to the following provisions:
(a) PARTICIPANT MAY DEMAND COMPANY STOCK: Prior to making any
distribution from the Plan, the Administrator will advise a
Participant or Beneficiary in writing of his or her right to
demand that benefits be distributed solely in Company Stock. If
the Participant or Beneficiary fails to make such demand in
writing within 90 days after receipt of such written notice, the
Participant's Vested Aggregate Account will be distributed in the
form of Company Stock to the extent it is allocated to the
Participant's Company Stock Account, and the balance, if any, of
the Vested Aggregate Account will be distributed in cash.
(b) STOCK MUST BE DISTRIBUTED IN WHOLE SHARES: If a Participant or
Beneficiary demands that benefits be distributed solely in Company
Stock, distribution will be made entirely in whole shares of
Company Stock. Any balance in a Participant's Account not
attributable to Company Stock will be applied by the Trustee to
acquire for distribution the maximum number of whole shares of
Company Stock at the then fair market value. Any unexpended
balance in the Participant's Account will be distributed in cash.
If the Trustee is unable to purchase the Company Stock required
for the distribution, the Trustee will make distribution in cash
within one year after the date the distribution was to have been
made, except in the case of a retirement distribution which must
be made within 60 days after the close of the Plan Year in which
retirement occurs.
(c) RESTRICTIONS ON DISTRIBUTED STOCK: Except as provided herein,
distributed Company Stock may be restricted as to sale or transfer
by the by-laws or articles of incorporation of the Employer if the
restrictions are applicable to all Company
39
Stock of the same class. If a Participant is required to offer the
sale of his Company Stock to the Employer before offering it to a
third party, the Employer may not pay a price less than that
offered to the distributee by another potential buyer making a
bona fide offer, and the Trustee may not pay a price less than the
fair market value of the Company Stock.
(d) MULTIPLE CLASSES OF COMPANY STOCK ACQUIRED WITH EXEMPT LOAN: If
Company Stock which was acquired with an Exempt Loan and which is
available for distribution consists of more than one class of
stock, a Participant's or Beneficiary's distribution must receive
substantially the same proportion of each such class of such
stock.
5.15 CASH DIVIDENDS ON COMPANY STOCK: At the Administrator's discretion, cash
dividends received on Company Stock allocated to Participants' Company
Stock Accounts may be distributed currently (or within 90 days after the
end of the Plan Year in which such dividends are paid to the Plan) in
cash to such Participants on a nondiscriminatory basis.
5.16 RIGHT OF FIRST REFUSAL: If Company Stock which is not readily tradeable
on an established securities market is distributed to a Participant, then
except as otherwise provided in this Section, if any Participant,
Beneficiary, or any other person to whom shares of Company Stock are
distributed (all such persons hereafter called the Selling Participant)
at any time desires to sell some or all of such shares (such shares
hereafter called the Offered Shares) to a third party (such third party
hereafter called the Third Party), then the Selling Participant must give
written notice of such desire to the Employer and the Administrator,
subject to the following provisions:
(a) REQUIREMENTS OF WRITTEN NOTICE: The written notice required to be
given hereunder must contain the number of shares offered for
sale, the proposed terms of the sale, and the names and addresses
of both the Selling Participant and the Third Party.
(b) TRUST FUND AND EMPLOYER: Both the Plan and the Employer will have
the right of first refusal for a period of 14 days from the date
the Selling Participant gives written notice to the Employer and
Administrator (such 14 day period to run concurrently against the
Plan and the Employer) to acquire the Offered Shares. As between
the Plan and the Employer, the Plan will have priority to acquire
the shares pursuant to the right of first refusal. The selling
price and terms will be the same as offered by the Third Party.
(c) THIRD PARTIES: If the Plan and the Employer do not exercise their
respective rights of first refusal within the required 14 day
period provided above, the Selling Participant will have the
right, at any time following the expiration of such 14 day period,
to dispose of the Offered Shares to the Third Party, provided,
however, that no disposition will be made to the Third Party on
terms more favorable to the Third Party than those set forth in
the written notice delivered by the Selling Participant. If a
Third Party is offered terms more favorable than
40
those set forth in the written notice delivered to the Plan and
the Employer, then the Offered Shares xxxx again be subject to the
right of first refusal.
(d) TIME OF CLOSING: The closing pursuant to the exercise of the right
of first refusal will take place at such place as is agreed upon
between the Administrator and the Selling Participant, but not
later than 10 days after the Employer or the Plan has notified the
Selling Participant of the exercise of the right of first refusal.
At closing, the Selling Participant will deliver certificates
representing the Offered Shares duly endorsed in blank for
transfer, or with stock powers attached duly executed in blank
with all required transfer tax stamps attached or provided for,
and the Employer or the Trustee will deliver the purchase price,
or an appropriate portion thereof, to the Selling Participant.
(e) STOCK ACQUIRED WITH AN EXEMPT LOAN: Notwithstanding the foregoing,
Company Stock acquired with an Exempt Loan will be subject to a
right of first refusal only for so long as such stock is not
publicly traded on an established securities market. The selling
price and other terms under the right of first refusal must not be
less favorable to the setter than the greater of (1) the value of
the stock determined under regulation Section 54.4975-11(d)(5), or
(2) the purchase price and other terms offered by a buyer (other
than the Employer or the Plan) making a good faith offer to
purchase the stock. The right of first refusal must lapse no later
than 14 days after the Selling Participant gives written notice to
the Administrator and Employer that an offer from a Third Party
has been received for the Offered Shares. The right of first
refusal will comply with paragraphs (a) through (c) above, except
to the extent they conflict with this paragraph.
5.17 PUT OPTION: If Company Stock which is not readily tradeable on an
established securities market is distributed to a Participant, he will
have a right to require the Employer to repurchase such Company Stock
under a fair valuation formula, subject to the following provisions:
(a) STOCK ACQUIRED WITH AN EXEMPT LOAN: Company Stock acquired with an
Exempt Loan will be subject to a put option if (1) such stock is
not readily tradeable as set forth above, or (2) if such stock is
subject to a trading limitation when distributed. For purposes of
this Section, a trading limitation is a restriction under any
federal or state securities law, or an agreement, not prohibited
by this Section, which would make such stock not as freely
tradeable as stock not subject to such restriction.
(b) CONDITIONS OF EXERCISE: The put option may only be exercised BY a
Participant, by the Participant's donees, or by a person
(including an estate or its distributee) to whom the Company Stock
passes upon a Participant's death. The put option must permit a
Participant to put the Company Stock to the Employer. Under no
circumstances may the put option bind the Plan, but it must grant
the Plan an option to assume the rights and obligations of the
Employer at the time the put option is exercised. If it is known
at the time a loan is made that federal or state law will be
violated by the Employer's honoring such put option, the put
option
41
must permit the Company Stock to be put, in a manner consistent
with law, to a third party (for example, an affiliate of the
Employer or a shareholder other than the Plan) that has
substantial net worth at the time the Exempt Loan is made and
whose net worth is reasonably expected to remain substantial.
(c) DURATION OF PUT OPTION: The put option will begin as of the day
following the date the Company Stock is distributed, and end 60
days thereafter. If not exercised within such 60-day period, an
additional 60 day-period will begin on the first day after the new
determination of the value of the Company Stock by the Trustee in
the following Plan Year. With respect to Company Stock that is
publicly traded without restrictions when distributed but ceases,
after distribution, to be so traded within either of the 60-day
periods described herein, the Employer must notify each holder
thereof in writing on or before the 10th day after the date such
stock ceases to be so traded that for the remainder of the
applicable 60-day period such stock is subject to the put option.
The notice must inform distributees of the terms of the put option
that they are to hold, and such terms must satisfy the
requirements of this Section. The period during which a put option
is exercisable does not include any time when a distributee is
unable to exercise it because the party bound by the option is
prohibited from honoring it by federal or state law.
(d) MANNER OF EXERCISE: The put option will be exercised by the holder
notifying the Employer in writing that the put option is being
exercised. The notice will state the name and address of the
holder and the number of shares to be sold.
(e) PAYMENT TERMS: The price at which a put option must be exercised
is the value of the Company Stock determined under regulation
Section 54.4975-11(d)(5). The provisions for payment must be
reasonable. The deferral of payment is reasonable if adequate
security and a reasonable interest rate are provided for any
credit extended and if the cumulative payments at any time are not
less than the aggregate of reasonable periodic payments as of such
time. Periodic payments are reasonable if annual installments,
beginning 30 days after the date the put option is exercised, are
substantially equal. Generally, the payment period may not be more
than 5 years after the date the put option is exercised. However,
it may be extended to a date no later than the earlier of 10 years
from the date the put option is exercised or the date the proceeds
of the loan used by the Plan to acquire the Company Stock subject
to the put option are entirely repaid.
(f) PAYMENT RESTRICTIONS: Payment under a put option cannot be
restricted by the provisions of a loan or any other arrangement,
including the terms of the Employer's articles of incorporation or
bylaws, unless so required under applicable state law. An
arrangement involving the Plan that creates a put option cannot
provide for the issuance of put options other than provided for
under this Section. The Plan cannot otherwise obligate itself to
acquire Company Stock from a particular holder thereof at an
indefinite time determined upon the happening of an event such as
the death of the holder.
42
(g) PAYMENT REQUIREMENTS FOR TOTAL DISTRIBUTIONS: Notwithstanding the
foregoing, and with respect to Company Stock which is not readily
tradeable and which is acquired after December 31, 1986, if a
distribution of such stock constitutes a Total Distribution,
payment of the fair market value of a Participant's Company Stock
Account will be made in 5 substantially equal annual payments. The
first installment will be paid not later than 30 days after the
Participant exercises the put option. The Plan will pay a
reasonable rate of interest and provide adequate security on
amounts not paid after 30 days. For purposes of this Section, the
term Total Distribution means the distribution with one taxable
year to the recipient of the balance of his Company Stock Account.
(h) PAYMENT REQUIREMENTS FOR INSTALLMENT DISTRIBUTIONS:
Notwithstanding paragraph (g) above, if the distribution does not
constitute a Total Distribution, the Plan will pay the Participant
an amount equal to the fair market value of the Company Stock
repurchased no later than 30 days after the Participant exercises
the put option.
5.18 NON-TERMINABLE RIGHTS AND PROTECTIONS: Except as otherwise provided in
Section 5.16 and 5.17, no Company Stock acquired with an Exempt Loan may
be subject to a put, call, or other option, or buy-sell or similar
arrangement when held by and distributed from the Plan, whether or not
the Plan is then an Employee Stock Ownership Plan (ESOP). The rights and
protections granted in this Section and in Section 5.16 and 5.17 are
non-terminable and will continue to exist under the terms of the Plan as
long as any Company Stock acquired with an Exempt Loan is held by the
Plan or by any Participant or any other person for whose benefit such
protections and rights have been created, and neither the repayment of
such loan nor the failure of the Plan to be an ESOP, nor any amendment of
the Plan, will cause a termination of said protections and rights.
5.19 PRE-RETIREMENT DISTRIBUTIONS: Except as may otherwise be permitted under
Section 4.2, no distributions are permitted before a Participant
terminates employment with the Employer
5.20 FINANCIAL HARDSHIP DISTRIBUTIONS: Hardship distributions are not
permitted.
5.21 SPECIAL DISTRIBUTION RULE FOR S-CORPORATIONS: In the case of an Employer
that is an electing small business corporation, such Employer may elect
to distribute a Participant's benefit solely in the form of cash,
notwithstanding a Participant's right as otherwise set forth in this Plan
to receive a distribution in the form of Company Stock.
ARTICLE 6
CODE SECTION 415 LIMITATIONS
6.1 MAXIMUM ANNUAL ADDITION: The maximum Annual Addition (as defined in
paragraph (c) below) made to a Participant's various accounts maintained
under the Plan
43
for any Limitation Year beginning after December 31, 1986 will not exceed
the lesser of the Dollar Limitation set forth in Section 6.1(a) or the
Compensation Limitation set forth in Section 6.1(b), as follows:
(a) DOLLAR LIMITATION: For Limitation Years beginning after December
31, 1994, the Dollar Limitation is $30,000 as annually adjusted in
accordance with Code Section 415(d).
(b) COMPENSATION LIMITATION: The Compensation Limitation is an amount
equal to 25% of the Participants Code Section 415 Compensation for
the Limitation Year. However, this limitation will not apply to
any contribution made for medical benefits within the meaning of
Code Section 401(h) or Code Section 419A(f)(2) after separation
from service which is otherwise treated as an Annual Addition
under Code Section 415(l)(1) or Code Section 419A(d)(2).
(c) DETERMINATION OF EMPLOYER CONTRIBUTIONS: For purposes of
paragraphs (a) and (b), the amount of Employer contributions will
be determined based upon the lesser of (1) the fair market value
of the Company Stock allocated to the Participant's Account from
Employer contributions to the Plan (determined at the time of the
contribution by the most recent valuation) plus any contributions
which are not used to purchase Company Stock or pay on an Exempt
Loan; and (2) the amount of the Employer's cash contribution to
the Plan.
(d) ANNUAL ADDITIONS: The term Annual Additions means the sum of the
following amounts credited to a Participants Account for the
Limitation Year: (1) Employer contributions; (2) Employee
contributions; (3) Forfeitures; (4) amounts allocated, after March
31, 1984, to an individual medical account, as defined in Code
Section 415(1)(2), which is part of a pension or annuity plan
maintained by the Employer; and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits, allocated to the separate
account of a key employee, as defined in Code Section 419A(d)(3),
under a welfare fund, as defined in Code Section 419(e),
maintained by the Employer. Notwithstanding the foregoing, a
Participant's Annual Additions do not include his or her
rollovers, loan repayments, repayments of prior Plan distributions
or prior distributions of mandatory contributions, direct
transfers of contributions from another plan to this Plan,
deductible contributions to a simplified employee pension plan, or
voluntary deductible contributions.
(e) SPECIAL RULE FOR ESOPS: If no more than one-third of Employer
contributions for the Plan Year which are deductible under Code
Section 404(a)(9) are allocated to Highly Compensated Employees,
the limitations of this Section will not apply to Forfeitures of
Company Stock that was acquired with Exempt Loan or to Employer
contributions which are deductible under Code Section 404(a)(9)(B)
and are charged against a Participants Account.
44
6.2 ADJUSTMENTS TO MAXIMUM ANNUAL ADDITION: In applying the limitation on
Annual Additions set forth in Section 6.1, the following adjustments must
be made:
(a) SHORT LIMITATION YEAR: In a Limitation Year of less than 12
months, the Defined Contribution Dollar Limitation in Section 6.1
(a) will be adjusted by multiplying it by the ratio that the
number of months in the short Limitation Year bears to 12.
(b) MULTIPLE DEFINED CONTRIBUTION PLANS: If a Participant participates
in multiple defined contribution plans sponsored by the Employer
which have different Anniversary Dates, the maximum Annual
Addition in this Plan for the Limitation Year will be reduced by
the Annual Additions credited to the Participant in the other
defined contribution plans during the Limitation Year. If a
Participant participates in multiple defined contribution plans
sponsored by the Employer which have the same Anniversary Date,
then (1) if only one of the plans is subject to Code Section 412,
Annual Additions will first be credited to the Participant's
account in the plan subject to Code Section 412; and (2) if more
than one of the plans is subject to Code Section 412, the maximum
Annual Addition in this Plan for a given Limitation Year will be
equal to the product of the maximum Annual Addition for such
Limitation Year minus any other Annual Additions previously
credited to the Participant's account under clause (1) above,
multiplied by the ratio that the Annual Additions which would be
credited to a Participant's accounts hereunder without regard to
the limitations in Section 6.1 bears to the Annual Additions for
all plans described in this clause (2).
6.3 MULTIPLE PLANS AND MULTIPLE EMPLOYERS: All defined benefit plans (whether
terminated or not) of the Employer will be treated as one defined benefit
plan, and all defined contribution plans (whether terminated or not) of
the Employer will be treated as one defined contribution plan. In
addition, all Affiliated Employers will be considered a single employer.
6.4 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS: If for any Limitation Year the
Annual Additions allocated to a Participant's Account exceeds the maximum
amount permitted under Section 6.1 above because of an allocation of
Forfeitures, a reasonable error in estimating a Participant's
Compensation, a reasonable error in determining the amount of elective
contributions (within the meaning of Code Section 402(g)(3)), or because
of other limited facts and circumstances that the Commissioner finds
justify the availability of the rules set forth in this Section, then
such Participant's Account will be adjusted as follows in order to reduce
the excess Annual Additions:
(a) RETURN OF EMPLOYEE CONTRIBUTIONS: First, Voluntary Employee
Contributions, if any, and second, the amount of elective
deferrals and corresponding Employer matching contributions, if
any, to the extent that they would reduce the excess amount, will
be calculated. Such elective deferrals and Voluntary Employee
Contributions plus attributable earnings, will be returned to the
Participant. Any Employer matching contribution amount will be
applied as described in (b) or (c)
45
below, depending on whether the Participant is covered by the Plan
at the end of the Limitation Year.
(b) EXCESS USED TO REDUCE EMPLOYER CONTRIBUTIONS IF PARTICIPANT IS
STILL COVERED BY THE PLAN: If, after the application of paragraph
(a), an excess amount still exists and the Participant is covered
by the Plan at the end of the Limitation Year, the excess amount
in the Participant's Account plus applicable earnings thereon, if
any, will be used to reduce Employer contributions (including any
allocation of Forfeitures) for such Participant in the next
Limitation Year, and in each succeeding Limitation Year if
necessary.
(c) EXCESS USED TO REDUCE EMPLOYER CONTRIBUTIONS IF PARTICIPANT IS NOT
COVERED BY THE PLAN: If, after the application of paragraph (a),
an excess amount still exists and the Participant is not covered
by the Plan at the end of a Limitation Year, the excess amount,
plus applicable earnings thereon, if any, will be held unallocated
in a suspense account. The suspense account will be applied to
reduce future Employer contributions (including the allocation of
any Forfeitures) for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year if
necessary.
(d) SUSPENSE ACCOUNT: If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section, such
suspense account will not participate in the allocation of the
Trust's investment gains and losses. If a suspense account is in
existence at any time during a particular Limitation Year, all
amounts in the suspense account must be allocated and reallocated
to Participants' Accounts before any Employer Contributions or any
Employee contributions may be made to the Plan for that Limitation
Year. Excess amounts may not be distributed to Participants or
former Participants.
6.5 MULTIPLE PLAN REDUCTION: For Limitation Years beginning before January 1,
2000, if an Employee is, or has been, a Participant in one or more
Employer-sponsored defined benefit plans and in one or more
Employer-sponsored defined contribution plans, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for any
Limitation Year may not exceed 1.0, determined in accordance with the
following provisions:
(a) DEFINED BENEFIT FRACTION: The Defined Benefit Fraction is a
fraction which has as its numerator the Participant's Projected
Annual Benefits determined as of the close of the Limitation Year
and which has as its denominator the lesser of 125% of the dollar
limitation for the Limitation Year determined under Code Section
415(b) and (d), or 140% of the amount taken into account under
Code Section 415(b)(l)(B) for such Limitation Year.
Notwithstanding the foregoing, with respect to anyone who was a
Participant as of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May 6,
1986, the denominator of the defined benefit fraction will not be
less than 125% of the Current Accrued Benefit.
46
(b) DEFINITIONS: As used in paragraph (a) above, (1) the term
Projected Annual Benefits means the annual benefits payable to a
Participant under all defined benefit plans (whether terminated or
not) of the Employer as determined under income tax regulation
Section 1.415-7(b)(3); and (2) the term Current Accrued Benefit
means a Participant's accrued benefit under a defined benefit
plan, determined as if the Participant had separated from service
as of the close of the last Limitation Year beginning before
January 1, 1987, when expressed as an annual benefit within the
meaning of Code Section 415(b)(2). In determining a Participant's
Current Accrued Benefit, the Administrator will disregard any
changes in the terms and conditions of the Plan after May 5, 1986,
and any cost of living adjustment occurring after May 5, 1986. The
Current Accrued Benefit will only be used as set forth above if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all Limitation
Years beginning before January 1, 1987.
(c) DEFINED CONTRIBUTION FRACTION: The Defined Contribution Fraction
is a fraction the numerator of which is the sum of the Annual
Additions to the Participant's account under all the defined
contribution plans (whether terminated or not) maintained by the
Employer for the current Limitation Year and all prior Limitation
Years (including the Annual Additions attributable to the
Participant's non-deductible contributions to all Employer
maintained defined benefit plans, whether terminated or not, and
the Annual Additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical accounts,
as defined in Code Section 415(1)(2) maintained by the Employer),
and the denominator of which is the sum of the maximum aggregate
amounts for the current Limitation Year and all prior Limitation
Years the Employee was employed by the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum permissible aggregate amount in any
Limitation Year is the lesser of (1) 125% of the dollar limitation
in effect in Code Section 415(c)(1)(A) for such Limitation Year
determined without regard to Code Section 415(c)(6) and adjusted
per regulation Section 1.415-7(d)(1) and Notice 83-10, or (2) 35%
of the Participant's Code Section 415 Compensation.
(d) TRANSITION RULE: For defined contribution plans in effect on or
before July 1, 1982, the Administrator may elect for any
Limitation Year ending after December 31, 1982 that the
denominator will be the product of the denominator for the
Limitation Year ending in 1982 determined under the law in effect
for such Limitation Year, multiplied by the Transition Fraction,
which is a fraction which has as its numerator the lesser of
$51,875 or 1.4 multiplied by 25% of the Participant's Code Section
415 Compensation for the Plan Year ending in 1981, and which has
as its denominator the lesser of $41,500 or 25% of the
Participant's Code Section 415 Compensation for the Plan Year
ending in 1981. In any Top Heavy Limitation Year, $41,500 will be
substituted for $51,875 in determining the Transition Fraction
unless the Extra Minimum Allocation is being provided in Section
3.5. In a Super Top Heavy Limitation Year, $41,500 will always be
substituted for $51,875. A Super Top Heavy Limitation Year is any
Limitation Year in which the Top Heavy Ratio exceeds 90%.
47
(e) ADJUSTMENT OF FRACTION: If an Employee was a Participant as of the
end of the first day of the first Limitation Year beginning after
December 31, 1986 in one or more defined contribution plans
maintained by the Employer which were in existence on May 6, 1986,
the numerator of the defined contribution fraction will be
adjusted if the sum of such defined contribution fraction and the
defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of the excess of the sum of the defined benefit fraction
and the defined contribution fraction over 1.0 multiplied by the
denominator of the defined contribution fraction will be
permanently subtracted from the numerator of the defined
contribution fraction. The adjustment will be calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan made after May 5,
1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
(f) TOP HEAVY ADJUSTMENTS TO MULTIPLE PLAN FRACTION: In any Top Heavy
Limitation Year, 100% will be substituted for 125% in paragraphs
(a) and (c) unless an eligible Non-Key Employee (1) is being
provided a 7.5% allocation under Section 3.5(d); or (2) is being
provided a retirement benefit under a defined benefit plan equal
to 3% of average monthly Code Section 415 Compensation. However,
in any Super Top Heavy Limitation Year (which means the Top Heavy
Ratio exceeds 90% for that Limitation Year), 100% will be
substituted for 125% in any event. If the 100% limitation is
exceeded for any Participant in any Limitation Year, then (1) the
Participant's accrued benefit in the defined benefit plan will not
be increased; no (2) Annual Additions may be credited to the
Participant's accounts under this Plan; and (3) the Participant
may not make any contributions, whether voluntary or mandatory, to
this Plan or any other Employer-sponsored qualified plan.
ARTICLE 7
DUTIES OF THE TRUSTEE
7.1 APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION: This Plan will have one
or more individual Trustees, a corporate Trustee, or any combination
thereof, appointed as follows:
(a) APPOINTMENT OF TRUSTEE: Each Trustee will be appointed by the
Sponsor and will serve until its successor has been named or until
such Trustee's resignation, death, incapacity, or removal, in
which event the Employer will name a successor Trustee. The term
Trustee will include the original and any successor Trustees.
(b) RESIGNATION OF TRUSTEE: A Trustee may resign any time by giving 30
DAYS written notice in advance to the Sponsor, unless such notice
is waived by the Sponsor. The Sponsor may remove a Trustee any
time, with or without cause, by giving written notice of the
removal to the Trustee. Unless waived in writing by the Sponsor,
if any Trustee who is an Employee, a Self-Employed Individual or
48
an Owner-Employee resigns or terminates employment with, or
ownership of, the Sponsor or an Adopting Employer for any reason,
such termination will constitute an immediate resignation as a
Trustee of the Plan.
(c) SUCCESSOR TRUSTEE: Each successor Trustee will succeed to the
title to the Trust by filing a written acceptance of appointment
with the former Trustee and the Sponsor. The former Trustee, upon
receipt of such acceptance, will execute all documents and perform
all acts necessary to vest the Trust Fund's title of record in any
successor Trustee. No successor Trustee will be personally liable
for any act or failure to act of any predecessor Trustee.
(d) MERGER OF CORPORATE TRUSTEE: If any corporate Trustee, before or
after qualification, changes its name, consolidates or merges with
another corporation, or otherwise reorganizes, any resulting
corporation which succeeds to the fiduciary business of such
Trustee will become a Trustee hereunder in lieu of such corporate
Trustee.
7.2 INVESTMENT ALTERNATIVES OF THE TRUSTEE: The Trustees will implement an
investment program to invest primarily in Company Stock and to accomplish
the Employer's other investment objectives. In addition to powers given
by law, the Trustees may:
(a) PROPERTY: Invest the Trust Fund in any form of property, including
common and preferred stocks, exchange covered call options, bonds,
money market instruments, mutual funds, savings accounts,
certificates of deposit, Treasury bills, insurance policies and
contracts, or in any other property, real or personal, foreign or
domestic, having a ready market including securities issued by an
institutional Trustee and/or affiliate of the institutional
Trustee. The Trustee may invest on margin. An institutional
Trustee may invest in its own deposits if they bear a reasonable
interest rate. The Trustee may retain, manage, operate, repair,
improve and mortgage or lease for any period on such terms as it
deems proper any real estate or personal property held by the
Trustee, including the power to demolish any building or other
improvements in whole or part. The Trustee may erect buildings or
other improvements, make leases that extend beyond the term of
this Trust, and foreclose, extend, renew, assign, release or
partially release and discharge mortgages or other liens.
(b) POOLED FUNDS: The Trustee may transfer any assets of the Trust
Fund to a collective trust established to permit the pooling of
funds of separate pension and profit-sharing trusts provided the
Internal Revenue Service has ruled such collective trust to be
qualified under Code Section 401(a) and exempt under Code Section
501(a) (or the applicable corresponding provision of any other
Revenue Act) or to any other common, collective, or commingled
trust fund which has been or may hereafter be established and
maintained by the Trustee and/or affiliates of an institutional
Trustee. Such commingling of assets of the Fund with assets of
other qualified trusts is specifically authorized, and to the
extent of the investment of the Trust Fund in such a group or
collective trust, the terms of the instrument
49
establishing the group or collective trust will be a part hereof
as though set forth herein.
(c) EMPLOYER STOCK: The Trustee may invest the Trust Fund in the
common stock, debt obligations, or any other security issued by
the Employer or by an affiliate of the Employer within the
limitations provided under Section 406, Section 407, and Section
408 of ERISA provided that such investment does not constitute a
prohibited transaction under Code Section 4975. Any such
investment will only be made upon written direction of the
Employer who will be solely responsible for the propriety of such
investment.
(d) CASH RESERVES: The Trustee may retain in cash as much of the Trust
Fund as the Trustee may deem advisable to satisfy the liquidity
needs of the Plan and to deposit any cash held in the Trust Fund
in a bank account without liability for the highest rate of
interest available. If a bank is acting as Trustee, such Trustee
is specifically given authority to invest in deposits of such
Trustee. The Trustee may also hold cash uninvested at any time and
from time to time and in such amount or to such extent as the
Trustee deems prudent, and the Trustee will not be liable for any
losses which may be incurred as the result of the failure to
invest same, except to the extent provided herein or in ERISA.
(e) REORGANIZATIONS, RECAPITALIZATIONS, CONSOLIDATIONS, SALES AND
MERGERS: The Trustee may join in or oppose the reorganization,
recapitalization, consolidation, sale or merger of corporations or
properties, upon such terms as the Trustee deems wise.
(f) REGISTRATION OF SECURITIES: The Trustee may cause any securities
or other property to be registered in the Trustee's own name or in
the name of the Trustee's nominee or nominees, and may hold any
investments in bearer form, but the records of the Trustee will at
all times show all such investments as part of the Trust Fund.
(g) PROXIES: The Trustee may vote proxies and if appropriate pass them
on to any investment manager which may have directed the
investment in the equity giving rise to the proxy.
(h) OWNERSHIP RIGHTS: The Trustee may exercise all ownership rights
with respect to any assets held in the Trust Fund.
(i) OTHER INVESTMENTS: The Trustee may accept and retain for such time
as the Trustee deems, advisable any securities or other property
received or acquired as Trustee, whether or not such securities or
property would normally be purchased as investments hereunder.
(j) KEY MAN INSURANCE: The Trustee, with the consent of the
Administrator, may purchase insurance Policies on the life of any
Participant whose employment is deemed to be key to the Employer's
financial success. Such key man Policies will be deemed to be an
investment of the Trust Fund and will be payable to the
50
Trust Fund as the beneficiary thereof. The Trustee may exercise
any and all rights granted under such Policies. Neither the
Trustee, Employer, Administrator, nor any Fiduciary will be
responsible for the validity of any Policy or the failure of any
insurer to make payments thereunder, or for the action of any
person which delays payment or renders a Policy void in whole or
in part. No insurer which issues a Policy will be deemed a party
to this Plan for any purpose or to be responsible for its
validity; nor will it be required to look into the terms of the
Plan nor to question any action of the Trustee. The obligations of
the insurer will be determined solely by the Policy's terms and
any other written agreements between it and the Trustee. The
insurer will act only at the written direction of the Trustee, and
will be discharged from all liability with respect to any amount
paid to the Trustee. The insurer will not be obligated to see that
any money paid by it to the Trustee or any other person is
properly distributed or applied.
(k) LOANS TO THE TRUST: The Trustee may borrow or raise money for
purposes of the Plan in such amounts, and upon such terms and
conditions, as the Trustee deems advisable; and for any sum so
borrowed, the Trustee may issue a promissory note as Trustee, and
secure repayment of the loan by pledging all, or any part, of the
Trust Fund as collateral. No person lending money to the Trustee
will be bound to see to the application of the money lent or to
inquire into the validity or propriety of any borrowing.
(l) AGREEMENTS WITH BANKS: The Trustee may, upon such terms as the
Trustee deems necessary, enter into an agreement with a bank or
trust company providing for (a) the deposit of all or part of the
funds and property of the Trust with such bank or trust company,
(b) the appointment of such bank or trust company as the agent or
custodian of the Trustees for investment purposes, with such
discretion in investing and reinvesting the funds of the Trust as
the Trustees deem it necessary or desirable to delegate.
(m) LITIGATION: The Trustee may begin, maintain, or defend any
litigation necessary in connection with the administration of the
Plan, except that the Trustee will not be obliged or required to
do so unless indemnified to its satisfaction.
(n) CLAIMS, DEBTS OR DAMAGES: The Trustee may settle, compromise, or
submit to arbitration any claims, debts, or damages due or owing
to or from the Plan.
(o) MARGIN ACCOUNTS, OPTIONS AND COMMODITIES TRADING: The Trustee may
engage in the following activities: borrowing on margin, buying
options, writing covered options, options spread/straddles, and
future/commodities trading.
(p) MISCELLANEOUS: The Trustee may do all such acts and exercise all
such rights, although not specifically mentioned herein, as the
Trustee deems necessary to carry out the purposes of the Plan. The
Trustee will not be restricted to securities or other property of
the character expressly authorized by applicable law for trust
investments, subject to the requirement that the Trustee discharge
his duties with the care, skill, prudence, and diligence, under
the circumstances then prevailing,
51
that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of similar
character and with similar aims by diversifying the investments to
minimize the risks of large losses unless under the circumstances
it is clearly prudent not to do so.
7.3 VALUATION OF THE TRUST: On each Valuation Date, the Trustee will
determine the net worth of the Trust Fund. The fair market value of
securities that are listed on a registered stock exchange will be the
prices at which they were last traded on such exchange preceding the
close of business on the Valuation Date. If the securities were not
traded on the Valuation Date, or if the exchange on which they are traded
was not open for business on the Valuation Date, then the securities will
be valued at the prices at which they were last traded prior to the
Valuation Date. Any unlisted security will be valued at its bid price
next preceding the close of business on the Valuation Date, which bid
price will be obtained from a registered broker or an investment banker.
To determine the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may use any
reasonable method to determine the value of such assets, or may elect to
employ one or more appraisers for that purpose and rely on the values
established by such appraiser or appraisers.
7.4 COMPENSATION AND EXPENSES: The Trustee, either from the Trust Fund or
from the Employer, will be reimbursed for all of its expenses and will be
paid reasonable compensation as agreed upon from time to time with the
Employer, but no person who receives full-time pay from the Employer will
receive any fees for services to the Plan as Trustee or in any other
capacity. Expenses will be paid by each Adopting Employer in the ratio
that each Adopting Employer's Participants' Accounts bears to the total
of all the Participants' Accounts maintained by this Plan.
7.5 PAYMENTS FROM THE TRUST FUND: The Trustee will pay Plan benefits and
other payments as the Administrator directs, and except as provided by
ERISA, the Trustee will not be responsible for the propriety of such
payments. Any payment made to a Participant, or a Participant's legal
representative or Beneficiary in accordance with the terms of the Plan
will, to the extent of such payment, be in full satisfaction of all
claims arising against the Trust, the Trustee, the Employer, and the
Administrator. Any payment or distribution made from the Trust is
contingent on the recipient executing a receipt and release acceptable to
the Trustee, Administrator, or Employer.
7.6 PAYMENT OF TAXES: The Trustee will pay all taxes of the Trust Fund,
including property, income, transfer and other taxes which may be levied
or assessed upon or in respect of the Trust Fund or any money, property
or securities forming a part of the Trust Fund. The Trustee may withhold
from distributions to any payee such sum as the Trustee may reasonably
estimate as necessary to cover federal and state taxes for which the
Trustee may be liable, which are, or may be, assessed with regard to the
amount distributable to such payee. Prior to making any payment, the
Trustee may require such releases or other documents from any lawful
taxing authority and may require such indemnity from any payee or
distributee as the Trustee deems necessary.
52
7.7 ACCOUNTS, RECORDS AND REPORTS: The Trustee will keep accurate records
reflecting its administration of the Trust Fund and will make such
records available to the Employer for review and audit At the request of
the Employer, the Trustee will, within 90 days of such request, file with
the Employer an accounting of its administration of the Trust Fund during
such period or periods as the Employer determines. The Employer will
review the accounting and notify the Trustee within 90 days if the report
is disapproved, providing the Trustee with, a written description of the
items in question. The Trustees will have 60 days to provide the Employer
with a written explanation of the items in question. If the Employer
again disapproves of the report, the Trustee will file its accounting in
a court of competent jurisdiction for audit and adjudication.
7.8 EMPLOYMENT OF AGENTS AND COUNSEL: The Trustee may employ such agents,
counsel, consultants, or service companies as it deems necessary and may
pay their reasonable expenses and compensation. The Trustee will not be
liable for any action taken or omitted by the Trustee in good faith
pursuant to the advice of such agents and counsel. Any agent, counsel,
consultant, service company and/or its successors will exercise no
discretionary authority over investments or the disposition of Trust
assets, and their services and duties will be ministerial only and will
be to provide the Plan with those things required by law or by the terms
of the Plan without in any way exercising any fiduciary authority or
responsibility under the Plan. The duties of a third party administrator
will be to safe-keep the individual records for all Participants and to
prepare all required actuarial services and disclosure forms under the
supervision of the Administrator and any Fiduciaries of the Plan. It is
expressly stated that the third party administrator's services are only
ministerial in nature and that under no circumstances will such third
party administrator exercise any discretionary authority whatsoever over
Participants, investments, or benefits.
7.9 DIVISION OF DUTIES AND INDEMNIFICATION: The division of duties and the
indemnification of the Trustees of this Plan will be governed by the
following provisions:
(a) NO GUARANTEE AGAINST LOSS: The Trustees will have the authority
and discretion to manage and control the Fund to the extent
provided in this instrument, but do not guarantee the Fund in any
manner against investment loss or depreciation in asset value, or
guarantee the adequacy of the Fund to meet and discharge all or
any liabilities of the Plan. Furthermore, the Trustees will not be
liable for the making, retention or sale of any investment or
reinvestment made by it, as herein provided, or for any toss to or
diminution of the Fund, or for any other loss or damage which may
result from the discharge of its duties hereunder, except to the
extent it is judicially determined that the Trustees have failed
to exercise the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and like aims.
(b) REPRESENTATIONS OF THE EMPLOYER: The Employer warrants that all
directions issued to the Trustees by it or the Plan Administrator
will be in accordance with the terms of the Plan and not contrary
to the provisions of the Employee Retirement Income Security Act
of 1974 and the regulations issued thereunder.
53
(c) DIRECTIONS BY OTHERS: The Trustees will not be answerable for any
action taken pursuant to any direction, consent, certificate, or
other paper or document on the belief that the same is genuine and
signed by the proper person. All directions by the Employer, a
Participant or the Plan Administrator will be in writing. The Plan
Administrator will deliver to the Trustees certificates evidencing
the individual or individuals authorized to act as the
Administrator and will deliver to the Trustees specimens of their
signatures.
(d) DUTIES AND OBLIGATIONS LIMITED BY THE PLAN: The duties and
obligations of the Trustees will be limited to those expressly
imposed upon it by this Plan or subsequently agreed upon by the
parties. Responsibility for administrative duties required under
the Plan or applicable law not expressly imposed upon or agreed to
by the Trustees, will rest solely with the Employer and with the
Administrator.
(e) INDEMNIFICATION OF TRUSTEES: The Trustees will be indemnified and
saved harmless by the Employer against any and all liability to
which the Trustees may be subjected, including all expenses
reasonably incurred in its defense, for any action or failure to
act resulting from compliance with the Employer's instructions,
the Employer's employees or agents, the Administrator, or any
other Plan Fiduciary, and for any liability arising from the
actions or non-actions of any predecessor Trustees or Plan
Fiduciary.
(f) TRUSTEES NOT RESPONSIBLE FOR APPLICATION OF PAYMENTS: The Trustees
will not be responsible in any way for the application of any
payments it is directed to make or for the adequacy of the Fund to
meet and discharge any and all liabilities under the Plan.
(g) MULTIPLE TRUSTEES: If more than one Trustee is appointed, all acts
and/or transactions taken on behalf of the Trust can only be taken
with the consent of a majority of the Trustees unless the Trustees
have agreed by a majority of their number that a particular act
and/or transaction can be taken or approved by a single Trustee.
(h) LIMITATION OF LIABILITY: No Trustee will be liable for the act of
any other Trustee or Fiduciary unless the Trustee has knowledge of
such act.
(i) TRUSTEES AS PARTICIPANTS OR BENEFICIARIES: Trustees will not be
prevented from receiving any benefits to which they may be
entitled as Participants or Beneficiaries in the Plan, so long as
the benefits are computed and paid on a basis which is consistent
with the terms of the Plan as applied to all other Participants
and Beneficiaries.
(j) NO SELF-DEALING: The Trustees will not (1) deal with the assets of
the Trust Fund in their own interest or for their own account; (2)
in their individual or in any other capacity, act in any
transaction involving the Trust Fund on behalf of a party (or
represent a party) whose -interests are adverse to the interests
of the Plan, or its Participants or Beneficiaries; or (3) receive
any consideration for their own
54
personal accounts from any party dealing with the Plan in
connection with a transaction involving assets of the Trust Fund.
7.10 INVESTMENT MANAGER: The Trustee, if directed by the Sponsor, will appoint
an Investment Manager to manage and control the investment of all or any
portion of the Trust Fund. Each Investment Manager will be either (a) an
investment advisor registered under the Investment Advisors Act of 1940;
(b) a bank as defined in that Act; or (c) an insurance company qualified
to manage, acquire or dispose of any asset of the Trust under the laws of
more than one state. An Investment Manager must acknowledge in writing
that it is a Fiduciary. The Sponsor will enter into an agreement with an
Investment Manager specifying the duties and compensation of the
Investment Manager and further specifying any other terms and conditions
under which the Investment Manager will be retained. The Trustee will not
be liable for any act or omission of an Investment Manager, and will not
be liable for following the advice of an Investment Manager with respect
to any duties delegated by the Sponsor to the Investment Manager. The
Sponsor will determine the portion of the Trust Fund to be invested by an
Investment Manager and will establish investment objectives and
guidelines for the Investment Manager to follow.
7.11 ASSIGNMENT AND ALIENATION OF BENEFITS: Except as may otherwise be
permitted under Code Section 401(a)(13)(C) effective August 5, 1997, or
as otherwise be permitted under a Qualified Domestic Relations Order as
provided in Section 8.11 or as otherwise be permitted under Section ? if
Participant loans are permitted, no right or claim to, or interest in,
any part of the Trust Fund, or any payment therefrom, will be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation,
commutation, anticipation, garnishment, attachment, execution, or levy of
any kind, and the Trustees will not recognize any attempt to assign,
transfer, sell, mortgage, pledge, hypothecate, commute, or anticipate the
same, except to the extent required by law.
7.12 EXCLUSIVE BENEFIT RULE: All contributions made by an Employer (whether or
not the Employer is an Affiliated Employer with one or more other
Adopting Employers) to the Trust will be used for the exclusive benefit
of all Participants and their Beneficiaries and will not be used for nor
diverted to any other purpose except the payment of the costs of
maintaining the Plan.
7.13 PURCHASE OF INSURANCE: The purchase of insurance Policies on the life of
a Participant, other than key man insurance under Section 7.2(j), is not
currently permitted in this Plan.
7.14 LOANS TO PARTICIPANTS: Loans to Participants are not currently permitted
in this Plan.
7.15 DIRECTED INVESTMENT ACCOUNTS: Subject to any rules or procedures that may
be established by the Administrator under paragraph (f) below, the
Trustee may permit Participants to direct the investment of one or more
of their accounts, and subject to any such rules or procedures,
investment directives will be given in accordance with the following
provisions:
55
(a) ACCOUNTS WHICH CAN BE DIRECTED: The Administrator will designate
which accounts a Participant or other payee can direct, and
whether the Participant or other payee can direct all or only a
portion of each such account. Any such designation can be changed
by the Administrator from time to time by communicating new
procedures to the Participants.
(b) INVESTMENT FUNDS: Any amount a Participant or other payee directs
xxxx be put into a segregated investment selected by the
Participant or other payee; or among alternative investment funds
established as part of the overall Trust Fund. Such alternative
investment funds will be under the full control and management of
the Trustees. Alternatively, if investments outside the Trustee's
control are allowed, Participants and other payees may not direct
that investments be made in collectibles, other than U.S.
Government gold and silver coins. The Administrator or Trustee
will have the authority to refuse any investment directed by the
Participant or other payee if that investment would be
administratively burdensome, or if for any reason the
Administrator or Trustee believes such investment would or might
constitute a prohibited transaction as defined in ERISA Section
406 or Code Section 4975. In the event a Participant or other
payee fails to make a timely investment election, at the
Administrator's discretion either no election will be deemed to
have been made or the Participant or other payee will be
considered to have made an election to invest 100% of his or her
account in an investment option, the primary objective of which is
the preservation of principal, until such time as an investment
decision by the Participant or other payee becomes effective.
(c) INVESTMENT FORM: A Participant's investment direction will be made
in a form acceptable to, and in accordance with procedures
established by, the Administrator. Unless changed by procedures
established by the Plan Administrator and communicated to
Participants and other payees, (1) a Participant or other payee
may change his or her investment election by filing a new
investment designation form with the Administrator or the
Administrator's designee; (2) any such change will be effective no
later than the first day of the next investment election period;
and (3) investment election periods will be established at the
discretion of the Administrator but in any event will occur no
less frequently than once in every 12-month period or, at the
discretion of the Administrator and the Trustee, once in every
3-month or 6-month period or at such other more frequent time
which is uniformly available as determined and promulgated by the
Administrator and the Trustee.
(d) TRANSFERS BETWEEN FUNDS: Unless changed by procedures established
by the Plan Administrator and communicated to Participants and
other payees, if multiple investment fund options are made
available, a Participant or other payee may elect to transfer all
or part of his or her Account balance in one or more of the
investment funds from one investment fund to another investment
fund by filing an investment designation form with the
Administrator or with the Administrator's designee within a
reasonable administrative period prior to the next period for
which investment options may be elected to be transferred. The
56
funds will be transferred by the Trustee or the Administrator's
designee as soon as practicable prior to, or by the start of, the
new election period. If made available, telephone or other
electronic or computer transfers will be permitted under uniform
procedures approved adopted by the Administrator and agreed to by
the Trustee.
(e) ADMINISTRATOR RESPONSIBILITY: Either the Administrator or the
Administrator's designee will be responsible when transmitting
Employer and Employee contributions or other Trust Fund assets to
indicate the dollar amount which is to be credited to each
investment fund on behalf of each Participant or other payee.
(f) NO ADMINISTRATOR LIABILITY: Except as otherwise provided herein,
neither the Trustee, nor the Administrator, nor the Employer, nor
any Fiduciary of the Plan will be liable to the Participant or
other payee (or to his or her Beneficiaries) for any loss
resulting from action taken under this Section at the direction of
the Participant or other payee.
(g) CHARGES AND FEES: Any charge or fee which may be imposed by the
Trustee or by any broker, investment advisor, or otherwise,
including legal fees, incurred in connection with a Participant's
direction under this Section of any Plan account maintained on the
Participant's behalf may be charged to and paid from the assets of
such account.
(h) ESTABLISHMENT OF ADMINISTRATIVE PROCEDURES: All investment
designations made by Participants are to be made subject to and in
accordance with such rules or procedures as the Administrator may
adopt. At the discretion of the Administrator and the Trustee,
such rules or procedures will permit sufficient selection among
investment alternatives to satisfy the provisions of DOL
Regulations 2550.404(c)-1. Such rules or procedures, when properly
executed in a written document, will be deemed to be incorporated
in this Plan. The rules or procedures may be modified or amended
by the Administrator without the necessity of amending this
Section of the Plan, but any such modifications must be
communicated to Participants in the manner described in Section
8.9. Notwithstanding the foregoing, (1) a summary plan description
or summary of material modifications thereto in which the rules or
procedures regarding investment designations are described will be
considered a separate written document sufficient to satisfy the
requirements (including the execution requirement) of this
paragraph; and (2) any such rules or procedures established under
this paragraph must be applied in a uniform nondiscriminatory
manner.
7.16 VOTING COMPANY STOCK: The Trustee will vote all Company Stock held by it
at such time and in such manner as the Trustee, at the direction of the
Administrator, subject to the following:
(a) COMPANY STOCK PLEDGED AS SECURITY: If any agreement entered into
by the Trustee provides for voting of any Company Stock pledged as
security for any obligation of the Plan, such Company Stock will
be voted in accordance with such
57
agreement. If the Administrator fails or refuses to give the
Trustee timely instructions as to how to vote any Company Stock as
to which the Trustee otherwise has the right to vote, the Trustee
may not exercise its power to vote such Company Stock.
(b) REGISTRATION-TYPE STOCK: Notwithstanding paragraph (a), each
Participant may direct to Trustee as to the manner in which
Company Stock allocated to his Company Stock Account is to be
voted provided such Company Stock is a registration-type class of
security (as defined in section 12 of the Securities Exchange Act
of 1934).
(c) NON-REGISTRATION-TYPE STOCK: With respect to Company Stock which
is not a registration-type class of security, each Participant may
direct the Trustee as to the manner in which Company Stock which
is allocated to his Company Stock Account is to be voted on any
corporate matter which involves the voting of such stock with
respect to the approval or disapproval of any corporate merger or
consolidation, recapitalization, reclassification, liquidation,
dissolution, sale of substantially all assets of a trade or
business, or such similar transaction as may be prescribed in
Treasury regulations.
7.17 APPLICATION OF CASH: Employer contributions made to the Plan in cash and
other cash received by the Trustee will first be applied to pay Current
Obligations.
7.18 RESTRICTIONS ON COMPANY STOCK TRANSACTIONS: The Plan may not obligate
itself to acquire Company Stock from a particular holder thereof at an
indefinite time determined upon the happening of an event such as the
death of the holder. Furthermore, the Plan may not obligate itself to
acquire Company Stock under a put option binding upon the Plan. However,
the Plan may be given an option to assume, at the time a put option is
exercised, the rights and obligations of the Employer under a put option
binding upon the Employer. In addition, all purchases of Company Stock
will be made at a price which, in the judgment of the Administrator, does
not exceed the fair market value thereof. All sales of Company Stock will
be made at a price which, in the judgment of the Administrator, is not
less than the fair market value thereof.
7.19 EXEMPT LOANS: All loans to the Plan which are made or guaranteed by a
disqualified person must satisfy all requirements applicable to Exempt
Loans set forth in income tax regulation Section 54.4975-(b) and
Department of Labor regulation Section 2550.408b-3, and all provisions of
those regulations applicable to Company Stock purchased with the proceeds
of an Exempt Loan or which is used as collateral for an Exempt Loan must
be complied with. For purposes of this Section, a disqualified person is
any person who is a disqualified person or party in interest under ERISA.
A loan for purposes of this Section includes a direct loan of cash, a
purchase-money transaction, or an assumption of the obligation of the
Trust. A guarantee for purposes of this Section includes an unsecured
guarantee and the use of assets of a disqualified person as collateral
for a loan, even though the use of assets may not be a guarantee under
applicable state law.
58
7.20 DIVERSIFICATION RIGHTS OF QUALIFIED PARTICIPANTS: Notwithstanding
anything herein to the contrary, a Qualified Participant will be
permitted to direct the Trustee as to the investment of amounts credited
to his Company Stock Account, in accordance with the following
provisions:
(a) METHOD OF DIRECTING INVESTMENTS: The Participant's direction will
be provided to the Administrator in writing, and will be effective
no later than 180 days after the close of the Plan Year to which
the direction applies.
(b) LIMITATIONS: A Participant's rights under this Section will be
limited to 25% of the balance in his or her Company Stock Account
attributable to Company Stock acquired by the Plan after December
31, 1986, within 90 days after the last day of each Plan Year,
during the Participant's Qualified Election Period. Within 90 days
after the close of the last Plan Year in a Participant's Qualified
Election Period, a Qualified Participant may direct the Plan as to
the investment of 50% of the value of such Company Stock Account
balance.
(c) AMOUNT SUBJECT TO DIVERSIFICATION: The portion of a Participant's
Company Stock Account attributable to Company Stock acquired by
the Plan after December 31, 1986 will be determined by multiplying
the number of shares of such stock held in the Participant's
Account by a fraction, the numerator of which is the number of
such shares acquired after December 31, 1986 and allocated to
Participants' Company Stock Accounts (not to exceed the number of
shares held by the Plan on the date of distribution) and the
denominator of which is the total number of such shares of Company
Stock held by the Plan on the date the individual becomes a
Qualified Participant.
(d) EXCEPTION FOR SMALL ACCOUNTS: Notwithstanding paragraph (b), if
the fair market value of a Qualified Participant's Company Stock
Account is $500 or less on the Valuation Date immediately
preceding the first day the Qualified Election Period, then such
Company Stock Account will not be subject to the diversification
rights under paragraph (b). In determining if the fair market
value exceeds $500, Company Stock held in all employee stock
ownership plans and tax credit employee stock ownership plans
maintained by the Employer or any Affiliated Employer will be
considered as held by the Plan.
(e) INVESTMENT OPTIONS: Subject to a written policy adopted the
Administrator, the portion of a Qualified Participant's Company
Stock Account that is covered by the diversification election set
forth in this Section will either (1) be distributed to the
Qualified Participant within 90 days after the last day of the
period during which the election can be made, but any part of such
distribution consisting of Company Stock will be subject to the
put option requirements of the Plan, and the entire such
distribution, if it is in excess of $5,000, will be subject to the
consent requirements under Section 5.8; (2) be transferred no
later than 90 days after the last day of the period during which
the election can be made to another qualified defined contribution
plan of the Employer which accepts such transfers, provided that
such plan permits Employee-directed investments in at least three
distinct
59
investment options and does not invest in Company Stock to a
substantial degree; or (3) be invested, at the election of the
Qualified Participant, in one or more alternative investments,
provided that if the Administrator elects to offer this option as
part of the written policy adopted hereunder, the Plan must
provide at least three distinct investment options.
7.21 SUPERSEDING TRUST OR CUSTODIAL AGREEMENT: If any assets of the Plan are
invested in a separate trust or custodial account maintained by a
corporate Trustee or custodian, the provisions of such separate trust or
custodial agreement will supersede the provisions set forth in this
Article 7, except (where applicable) with respect to those provisions of
this Article that pertain to the purchase of insurance Policies and to
the making of loans to Participants. In the absence of a specific
provision in such separate trust or custodial agreement regarding the
valuation of securities held by the Trust Fund, Section 7.3 will apply.
Moreover, if such separate trust or custodial account should for any
reason fail, be found invalid or terminate prior to the termination of
this Plan and the distribution of all the assets hereof, this Article 7
will be deemed to have again become effective immediately prior to such
failure, invalidity or termination.
ARTICLE 8
DUTIES OF THE ADMINISTRATOR
8.1 APPOINTMENT, RESIGNATION, REMOVAL AND SUCCESSION: Each Administrator
appointed by the Sponsor will continue until his death, resignation, or
removal at any time, with or without cause, by the Sponsor, and any
Administrator may resign by giving 30 days written notice to the Sponsor.
If an Administrator dies, resigns, or is removed by the Sponsor, its
successor will be appointed as promptly as possible, and such appointment
will become effective upon its acceptance in writing by such successor.
Pending the appointment and acceptance of any successor Administrator,
any then acting or remaining Administrator will have full power to act.
8.2 GENERAL POWERS AND DUTIES: The powers and duties of the Administrator
will include (a) appointing the Plan's attorney, accountant, actuary, or
any other party needed to administer the Plan; (b) directing the Trustees
with respect to payments from the Trust Fund; (c) deciding if an
applicant is entitled to a benefit from the Plan, which will be paid only
if the Administrator in its sole discretion decides that the applicant is
entitled to it; (d) communicating with Employees regarding their
participation and benefits under the Plan, including the administration
of all claims procedures; (e) filing any returns and reports with the
Internal Revenue Service, Department of Labor, or any other governmental
agency; (f) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party under (a) above; (g)
establishing a funding policy and investment objectives consistent with
the purposes of the Plan and the Employee Retirement Income Security Act
of 1974; (h) construing and resolving any question of Plan
interpretation; and (i) making any findings of fact the Administrator
deems necessary to proper Plan administration.
8.3 APPOINTMENT OF ADMINISTRATIVE COMMITTEE: The Sponsor may appoint one or
more members to an Administrative/Advisory Committee (to be known as
60
the "Committee"), to which the Sponsor may delegate certain of its
responsibilities as Plan Administrator. Members of the Committee need not
be Participants or Beneficiaries, and officers and directors of the
Sponsor will not be precluded from serving as members. A member will
serve until his or her resignation, death, or disability, or until
removed by the Sponsor. In the event of any vacancy arising by reason of
the death, disability, removal, or resignation of a member of the
Committee, the Sponsor may, but is not required to, appoint a successor
to serve in his or her place. The Committee will select a chairman and a
secretary from among its members. Members of the Committee will serve in
such capacity without compensation. The Committee will act by majority
vote.
8.4 FINALITY OF ADMINISTRATIVE DECISIONS: The Administrator's interpretation
of Plan provisions, and any findings of fact, including eligibility to
participate and eligibility for benefits, are final and will not be
subject to "de novo" review unless shown to be arbitrary and capricious.
8.5 MULTIPLE ADMINISTRATORS: If there is more than one Administrator, the
Administrators may delegate specific responsibilities among themselves,
including the authority to execute documents unless the Sponsor revokes
such delegation. The Sponsor and Trustee will be notified in writing of
any such delegation of responsibilities, and the Trustee thereafter may
rely upon any documents executed by the appropriate Administrator.
8.6 COMPENSATION AND EXPENSES: The Administrator, the Committee and any party
appointed by the Administrator under Section 8.7 may receive such
compensation as agreed upon by the Sponsor, provided that any person who
already receives full-time PAY from the Employer may not receive any fees
for services to the Plan as Administrator or in any other capacity. The
Sponsor will pay all "settlor" expenses (as described in DOL Advisory
Opinion 2001-01-A) incurred by the Administrator, the Committee or any
party appointed under Section 8.7 in the performance of their duties. The
Sponsor may, but is not required to pay, all "non-settlor" expenses
incurred by the Administrator, the Committee, or any party appointed
under Section 8.7 in the performance of their duties. "Non-settlor"
expenses incurred by the Administrator, the Committee or any party
appointed under Section 8.7 that the Sponsor elects not to pay will be
reimbursed from Trust Fund assets. Any expenses paid from the Trust will
be charged to each Adopting Employer in the ratio that each Adopting
Employer's Participants' Accounts bears to the total of all the
Participants' Accounts maintained by this Plan, or in any other
reasonable method elected by the Administrator.
8.7 APPOINTMENT OF AGENTS AND COUNSEL: The Administrator (or Committee) may
appoint such actuaries, accountants, custodians, counsel, agents,
consultants, and other persons the Administrator (or Committee) deems
necessary to the administration and operation of the Plan. The actions of
any such third parties will be subject to the limitations described in
Section 7.8 of the Plan; and no such third parties will be given any
authority or discretion concerning the management and operation of the
Plan that would cause them to become Fiduciaries of the Plan.
61
8.8 CORRECTING ADMINISTRATIVE ERRORS: The Administrator may take such steps
as it considers necessary and appropriate in its discretion to remedy
administrative or operational errors. Such steps may include, but will
not be limited to the following: (a) taking any action required under the
employee plans compliance resolution system of the Internal Revenue
Service, any asset management or fiduciary conduct error correction
program available through the Internal Revenue Service, United States
Department of Labor or other governmental administrative agency; (b) a
reallocation of Plan assets; (c) adjustments in amounts of future
payments to Participants, Beneficiaries or Alternate Payees; and (d)
institution and prosecution of actions to recover benefit payments made
in error or on the basis of incorrect or incomplete information.
8.9 PROMULGATING NOTICES AND PROCEDURES: The Sponsor and Administrator are
given the power and responsibility to promulgate certain written notices,
policies and/or procedures under the terms of the Plan and disseminate
same to the Participants, and the Administrator may satisfy such
responsibility by the preparation of any such notice, policy and/or
procedure in a written form which can be published and communicated to a
Participant in one or more of the following ways: (a) by distribution in
hard copy; (b) through distribution of a summary plan description or
summary of material modifications thereto which sets forth the policy or
procedure with respect to a right, benefit or feature offered under the
Plan; (c) by e-mail, either to a Participant's personal e-mail address or
his or her Employer-maintained e-mail address; and (d) by publication on
a web-site accessible by the Participant, provided the Participant is
notified of said web-site publication. Any notice, policy and/or
procedure provided through an electronic medium will only be valid if the
electronic medium which is used is reasonably designed to provide the
notice, policy and/or procedure in a manner no less understandable to the
Participant than a written document, and under such medium, at the time
the notice, policy and/or procedure is provided, the Employee may request
and receive the notice, policy and/or procedure on a written paper
document at no charge.
8.10 CLAIMS PROCEDURES: The procedures set forth in this Section will be the
sole and exclusive remedy for an Employee, Participant or Beneficiary
("Claimant") to make a claim for benefits under the Plan. These
procedures will be administered and interpreted in a manner consistent
with the requirements of ERISA Section 503 and the regulations
thereunder. Any electronic notices provided by the Administrator will
comply with the standards imposed under regulations issued by the
Department of Labor. All claims determinations made by the Administrator
(and when applicable by the Committee if one has been appointed under
Section 8.3) and will be made in accordance with the provisions of this
Section and the Plan, and will be applied consistently to similarly
situated Claimants. For purposes of this Section 8.10, if a Committee has
not been appointed under Section 8.3, any reference to Committee will be
considered a reference to the Administrator.
(a) WRITTEN CLAIM: A Claimant, or the Claimant's duly authorized
representative, may file a claim for a benefit to which the
Claimant believes that he or she is entitled under the Plan. Any
such claim must be filed in writing with the Administrator.
62
(b) DENIAL OF CLAIM: The Administrator, in its sole and complete
discretion, will make all initial determinations as to the right
of any person to benefits. If the claim is denied in whole or in
part, the Administrator will send the Claimant a written or
electronic notice, informing the Claimant of the denial. The
notice must be written in a manner calculated to be understood by
the Claimant and must contain the following information: the
specific reason(s) for the denial; a specific reference to
pertinent Plan provisions on which the denial is based; if
additional material or information is necessary for the Claimant
to perfect the claim, a description of such material or
information and an explanation of why such material or information
is necessary; and an explanation of the Plan's claim review (i.e.,
appeal) procedures, the time limits applicable to such procedures,
and the Claimant's right to request arbitration if the claim
denial is upheld in whole or in part on appeal. Written or
electronic notice of the denial will be given within a reasonable
period of time (but no later than 90 days) from the date the
Administrator receives the claim, unless special circumstances
require an extension of time for processing the claim. In no event
may the extension exceed 90 days from the end of the initial
90-day period. If an extension is necessary, prior to the
expiration of the initial 90-day period, the Administrator will
send the Claimant a written notice, indicating the special
circumstances requiring an extension and the date by which the
Administrator expects to render a decision.
(c) REQUEST FOR APPEAL: If the Administrator denies a claim in whole
or in part, the Claimant may elect to appeal the denial. If the
Claimant does not appeal the denial pursuant to the procedures set
forth herein, the denial will be final, binding and unappealable.
A written request for appeal must be filed by the Claimant (or the
Claimant's duly authorized representative) with the Committee
within 60 days after the date on which the Claimant receives the
Administrator's notice of denial. If a request for appeal is
timely filed, the Claimant will be afforded a full and fair review
of the claim and the denial. As part of this review, the Claimant
may submit written comments, documents, records, and other
information relating to the claim, and the review will take into
account all such comments, documents, records, or other
information submitted by the Claimant, without regard to whether
such information was submitted or considered in the
Administrator's initial benefit determination. The Claimant also
may obtain, free of charge and upon request, records and other
information relevant to the claim, without regard to whether such
information was relied upon by the Administrator in making the
initial benefit determination.
(d) REVIEW OF APPEAL: The Committee will determine, in its sole and
complete discretion, whether to uphold all or a portion of the
initial claim denial. If, on appeal, the Committee determines that
all or a portion of the initial denial should be upheld, the
Committee will send the Claimant a written or electronic notice
informing the Claimant of its decision to uphold all or a portion
of the initial denial, written in a manner calculated to be
understood by the Claimant and containing the following
information: the specific reason(s) for the denial; a specific
reference to pertinent Plan provisions on which the denial is
based; a statement that the Claimant is entitled to receive, upon
request and free of charge,
63
reasonable access to and copies of all documents and other
information relevant to the claim; and an explanation of the
Claimant's right to request arbitration and the applicable time
limits for doing so. Written or electronic notice will be given
within a reasonable period of time (not later than 60 days) from
the date the Committee receives the request for appeal, unless
special circumstances require an extension of time for reviewing
the claim, but in no event may the extension exceed 60 days from
the end of the initial 60-day period. If an extension is
necessary, prior to the expiration of the initial 60-day period,
the Committee will send the Claimant a written notice, indicating
the special circumstances requiring an extension and the date by
which the Committee expects to render a decision.
(e) ALTERNATIVE TIME FOR AN APPEAL TO BE DECIDED: Notwithstanding
paragraph (d), if the Committee holds regularly scheduled meetings
on a quarterly or more frequent basis, the Committee may make its
determination of the claim on appeal at its next regularly
scheduled meeting if the Committee receives the written request
for appeal more than 30 days prior to its next regularly scheduled
meeting or at the regularly scheduled meeting immediately
following the next regularly scheduled meeting if the Committee
receives the written request for appeal within 30 days of the next
regularly scheduled meeting. If special circumstances require an
extension, the decision may be postponed to the third regularly
scheduled meeting following the Committee's receipt of the written
request for appeal if, prior to the expiration of the initial time
period for review, the Claimant is provided with written notice,
indicating the special circumstances requiring an extension and
the date by which the Committee expects to render a decision. If
the extension is required because the Claimant has not provided
information that is necessary to decide the claim, the Committee
may suspend the review period from the date on which notice of the
extension is sent to the Claimant until the date on which the
Claimant responds to the request for additional information.
(f) RIGHT OF ARBITRATION: If a Claimant wishes to contest a final
decision of the Committee, the Claimant may request arbitration.
If the Claimant does not request arbitration pursuant to the
procedures set forth herein, the decision of the Committee will be
final, binding and unappealable. A written request for arbitration
must be filed by the Claimant (or the Claimant's duly authorized
representative) with the Committee within 15 days after the date
on which the Claimant receives the written decision of the
Committee. If a request for arbitration is timely filed, the
Claimant and the Committee will each name an arbitrator within 20
days after the Committee receives the Claimant's written request
for arbitration. The two arbitrators will jointly name a third
arbitrator within 15 days after their appointment. If either party
fails to select an arbitrator within the 20 day period, or if the
two arbitrators fail to select a third arbitrator within 15 days
after their appointment, then the presiding judge of the county
court (or its equivalent) in the county in which the principal
office of the Sponsor is located will appoint such other
arbitrator or arbitrators. The arbitrators will render a decision
within 60 days after their appointment and will conduct all
proceedings pursuant to the laws of the state in which the
Sponsor's principal place of business is located and the then
current Rules of the American
64
Arbitration Association governing commercial transactions, to the
extent that such rules are not inconsistent with applicable state
law. The cost of the arbitration procedure will be borne by the
losing party or, if the decision is not clearly in favor of one
party or the other, in the manner determined by the arbitrators.
The arbitration proceeding provided for in this Section will be
the sole and exclusive remedy of a Claimant to contest decisions
of the Committee under this Plan, and the arbitrators' decision
will be final and unappealable.
8.11 QUALIFIED DOMESTIC RELATIONS ORDERS: A Qualified Domestic Relations
Order, or QDRO, is a signed domestic relations order issued by a State
Court which creates, recognizes or assigns to an alternate payee(s) the
right to receive all or part of a Participant's Plan benefit- An
alternate payee is a Spouse, former Spouse, child, or other dependent of
a Participant who is treated as a Beneficiary under the Plan as a result
of the QDRO. The Administrator may establish QDRO procedures, but in the
absence of such procedures, the Administrator will determine if a
domestic relations order is a Qualified Domestic Relations Order in
accordance with the following:
(a) ADMINISTRATOR'S DETERMINATION: Promptly upon receipt of a domestic
relations order, the Administrator will notify the Participant and
any alternate payee(s) named in the order of such receipt, and
will include a copy of this Section. Within a reasonable time
after receipt of the order, the Administrator will make a
determination as to whether or not the order is a Qualified
Domestic Relations Order as defined in Code Section 414(p) and
will promptly notify the Participant and any alternate payee(s) in
writing of the determination.
(b) SPECIFIC REQUIREMENTS OF QDRO: In order for a domestic relations
order to be a QDRO, it must specifically state all of the
following: (1) the name and last known mailing address (if any) of
the Participant and each alternate payee covered by the order, (2)
the dollar amount or percentage of the benefit to be paid to each
alternate payee, or the manner in which the amount or percentage
will be determined; (3) the number of payments or period for which
the order applies; and (4) the name of the plan to which the order
applies. The domestic relations order will not be deemed a QDRO if
it requires the Plan to provide any type or form of benefit, or
any option not already provided for in the Plan, or increased
benefits, or benefits in excess of the Participant's Vested
Interest, or payment of benefits to an alternate payee required to
be paid to another alternate payee under another QDRO.
(c) DISPUTED ORDERS: If there is a question as whether or not a
domestic relations order is a Qualified Domestic Relations Order,
there will be a delay in any payout to any payee including the
Participant, until the status is resolved. In such event, the
Administrator will segregate the amount that would have been
payable to the alternate payee(s) if the order had been deemed a
QDRO. If the order is not determined to be a QDRO, or the status
is not resolved (for example, it has been sent back to the Court
for clarification or modification) within 18 months beginning with
the date the first payment would have to be made under the order,
the Administrator will pay the segregated amounts plus interest to
the person(s)
65
who would have been entitled to the benefits had there been no
order. If a determination as to the Qualified status of the order
is made after the 18-month period, then the order will only be
applied on a prospective basis. If the order is determined to be a
QDRO, the Participant and alternate payee(s) will again be
notified promptly after such determination. Once an order is
deemed a QDRO, the Administrator will pay to the alternate
payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as
to the order's qualification.
(d) PAYMENT PRIOR TO TERMINATION OF EMPLOYMENT: A QDRO may provide for
the payment of benefits to an alternative payee prior to the time
a Participant has terminated employment. Further, such payment can
be made even if the affected Participant has not yet reached the
Earliest Retirement Age. For purposes of this paragraph, the term
Earliest Retirement Age means the earlier of (1) the date on which
the Participant is entitled to a distribution under this Plan, or
(2) the later of (i) the date the Participant attains age 50, or
(ii) the earliest date on which the Participant could receive
benefits under this Plan if the Participant terminated employment
with the Employer.
ARTICLE 9
AMENDMENT, TERMINATION AND MERGER
9.1 AMENDMENT: The Sponsor, or, if there is no Sponsor, the Trustee, will
have the right to amend the Plan at any time subject to the following
provisions:
(a) GENERAL REQUIREMENTS: Amendments must be in writing and cannot (1)
increase the responsibilities of the Trustee or Administrator
without written consent; (2) deprive any Participant or
Beneficiary of Plan benefits to which he or she is entitled; (3)
decrease the amount of any Participant's Account balance except as
permitted under Code Section 412(c)(8); (4) permit any part of the
Trust Fund to be used for or diverted to purposes other than the
exclusive benefit of the Participants or their Beneficiaries
except as required to pay taxes and administration expenses, or
cause or permit any portion of the Trust Fund to revert to or
become the property of the Employer; or (5) have the effect of
eliminating or restricting the ability of a Participant or other
payee to receive payment of his or her Account balance or benefit
entitlement under a particular optional form of benefit provided
under the Plan unless the provisions of subparagraphs (1) and (2)
below are satisfied:
(1) LUMP SUM REQUIREMENT: The amendment provides a lump sum
distribution form that is otherwise identical to the
optional form of benefit that is restricted or eliminated.
For this purpose, a lump sum distribution form is otherwise
identical only if it is identical in all respects to the
eliminated or restricted optional form of benefit (or would
be identical except that it provides greater rights to the
payee) except with respect to the timing of payments after
commencement.
66
(2) EFFECTIVE DATE: The amendment cannot apply to any
distribution with an Annuity Starting Date which is earlier
than the earlier of (A) the 90' day after a Participant has
been furnished with a summary plan description or other
summary that reflects the amendment and that satisfies the
ERISA requirements at 29 CFR 2520-104b-3 relating to a
summary of material modifications; or (B) the first day of
the second Plan Year following the Plan Year in which this
amended Plan is adopted.
(b) CERTAIN CORRECTIVE AMENDMENTS: For purposes of satisfying the
minimum coverage requirements of Code Section 410(b), the
nondiscriminatory amount requirement of regulation Section
1.401(a)(4)-1(b)(2), or the nondiscriminatory plan amendment
requirement of regulation Section 1.401(a)(4)-1(b)(4), a
corrective amendment may retroactively increase allocations for
Employees who benefited under the Plan during the Plan Year being
corrected, or may grant allocations to Employees who did not
benefit under the Plan during the Plan Year being corrected. In
addition, to satisfy the nondiscriminatory current availability
requirement of regulation Section 1.401(a)(4)4(b) for benefits,
rights or features, a corrective amendment may make a benefit,
right or feature available to Employees to whom it was previously
not available. A corrective amendment will not be taken into
account prior to the date of its adoption unless it satisfies the
applicable requirements of regulation Section
1.401(a)(4)-11(g)(3)(ii) through (vii), including the requirement
that, in order to be effective for the preceding Plan Year, such
amendment must be adopted by the 15th day of the 10th month after
the close of the preceding Plan Year.
9.2 TERMINATION OF PLAN BY SPONSOR: The Sponsor at any time can terminate the
Plan and Trust in whole or in part in accordance with the following
provisions:
(a) TERMINATION OF PLAN: The Sponsor can terminate the Plan and Trust
by filing written notice thereof with the Administrator and
Trustee and by completely discontinuing contributions to the Plan.
Upon any such termination, the Trustee will continue to administer
the Trust until distribution has been made to the Participants and
other payees, which distribution must occur as soon as
administratively feasible after the termination of the Plan, and
must be made in accordance with the provisions of Article 5 of the
Plan, including Section 5.6(g) where applicable. However, the
Administrator may elect not to distribute the Accounts of
Participants and other payees upon termination of the Plan but
instead to transfer the entire Trust Fund assets and liabilities
attributable to this terminated Plan to another qualified plan
maintained by the Employer or its successor.
(b) VESTING REQUIREMENT: Upon complete termination of the Plan, or
upon a complete discontinuance of contributions to the Plan, any
Participant who is affected by such termination all Participants
who have not incurred a Termination of Employment and all
Participants who have incurred a Termination of Employment but
have not incurred a five (5) year Break in Service will have a
100% Vested Interest in his or her unpaid Participant Account.
Upon partial
67
termination of the Plan only those Participants who have incurred
a Termination of Employment on account of the event which caused
the partial termination but have not incurred a five (5) year
Break in Service shall automatically have a 100% Vested Interest
in his or her unpaid Participant Account to the date of partial
termination.
(c) DISCONTINUANCE OF CONTRIBUTIONS ONLY: The Sponsor may elect at any
time to completely discontinue contributions to the Plan but
continue the Plan in operation in all other respects, in which
event the Trustee will continue to administer the Trust until
eventual full distribution of all benefits has been made to the
Participants and other payees in accordance with Article 5 after
their death, retirement, Disability or Termination of Employment.
Any such discontinuance of contributions without an additional
notice of termination from the Sponsor to the Administrator and
Trustee will not constitute a termination of the Plan.
9.3 TERMINATION OF PARTICIPATION BY ADOPTING EMPLOYER: Any Adopting Employer
may by written resolution terminate its participation in the Plan at any
time by notification to the Sponsor, the Administrator, and the Trustee.
Such Adopting Employer may thereupon request a transfer of Trust Fund
assets attributable to its Employees from this Plan to any successor
qualified retirement plan maintained by the Adopting Employer or its
successor. The Administrator may, however, refuse to make such transfer
if in its considered opinion such transfer would operate to the detriment
of any Participant, jeopardize the continued qualification of the Plan,
or if such transfer does not comply with any requirements of the Internal
Revenue Service. If no such transfer is made, the provisions in the
definition of Adopting Employer in Article I will apply with respect to
the payment of benefits for Employees of such Adopting Employer.
9.4 MERGER OR CONSOLIDATION: This Plan and Trust may not be merged or
consolidated with, nor may any of its assets or liabilities be
transferred to, any other plan, unless the benefits payable to each
Participant if the Plan was terminated immediately after such action
would be equal to or greater than the benefits to which such Participant
would have been entitled if this Plan had been terminated immediately
before such action.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 NO CONTRACT OF EMPLOYMENT: Except as otherwise provided by law, neither
the establishment of this Plan, any modification hereto, the creation of
any fund or account, nor the payment of any benefits, will be construed
as giving any Participant or other person any legal or equitable rights
against the Employer, any officer or Employee thereof, or the Trustee,
except as herein provided. Further, under no circumstances will the terms
of employment of any Participant be modified or otherwise affected by
this Plan.
10.2 TITLE TO ASSETS: No Participant or Beneficiary will have any right to, or
any interest in, any assets of the Trust upon separation from service
with the Employer,
68
Affiliated Employer, or Adopting Employer, except as otherwise provided
by the terms of the Plan.
10.3 QUALIFIED MILITARY SERVICE: Notwithstanding any provision of this Plan to
the contrary, effective January 1, 1995, contributions, benefits and
service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
10.4 FIDUCIARIES AND BONDING: The Fiduciaries of this Plan will have only
those duties which are specifically given to the Fiduciaries under the
terms of this Plan. In addition, every Fiduciary other than a bank, an
insurance company, or a Fiduciary of an Employer which has no common-law
employees, will be bonded in an amount not less than 10% of the amount of
funds under such Fiduciary's supervision, but such bond will not be less
than $1,000 or more than $500,000. The bond will provide protection to
the Plan against any loss for acts of fraud or dishonesty by a Fiduciary
acting alone or in concert with others. The cost of such bond will be an
expense of either the Employer or the Trust, at the election of the
Employer.
10.5 SEVERABILITY OF PROVISIONS: If any Plan provision is held invalid or
unenforceable, such invalidity or unenforceability will not affect any
other provision of this Plan, and this Plan will be construed and
enforced as if such provision had not been included.
10.6 GENDER AND NUMBER: Words used in the masculine gender will be construed
as though they were also used in the feminine or neuter gender where
applicable, and words used in the singular form will be construed as
though they were also used in the plural form where applicable.
10.7 HEADINGS AND SUBHEADINGS: Headings and subheadings are inserted for
convenience of reference. They constitute no part of this Plan and are
not to be considered in its construction.
10.8 LEGAL ACTION: In any claim, suit or proceeding concerning the Plan and/or
Trust which is brought against the Trustee or the Administrator, this
Plan and Trust will be construed and enforced according to the laws of
the state in which the Employer maintains its principal place of
business, to the extent that is not preempted by the provisions of ERISA.
Furthermore, unless otherwise prohibited by law, either the Employer or
the Trust, in the sole discretion of the Employer, will reimburse the
Trustee and/or the Administrator for all costs, attorneys fees and other
expenses associated with any such claim, suit or proceeding.
10.9 QUALIFIED PLAN STATUS: This Plan and the related Trust Agreement are
intended to be a qualified retirement plan under the provisions of Code
Section 401(a) and Section 501(a).
10.10 MAILING OF NOTICES TO ADMINISTRATOR, EMPLOYER OR TRUSTEE: Notices,
documents or forms required to be given to or filed with the
Administrator, the Employer or the Committee will be either hand
delivered or mailed by first class mail, postage prepaid, to the
Committee or the Employer, at the Employer's principal place of business.
Any notices, documents or forms required to be given to or filed with the
69
Trustee will be either be hand delivered or mailed by first class mail,
postage prepaid, to the Trustee at its principal place of business.
10.11 NO DUPLICATION OF BENEFITS: There will be no duplication of benefits
under the Plan because of employment by more than one participating
employer.
10.12 PARTICIPANT NOTICES AND WAIVERS OF NOTICES: Whenever written notice is
required to be given under the terms of this Plan, such notice will be
deemed to be given on the date that such written notice is either hand
delivered to the recipient or deposited at a United States Postal Service
Station, first class mail, postage paid. Notice may be waived by any
party otherwise entitled to receive written notice concerning any matter
under the terms of this Plan.
10.13 EVIDENCE FURNISHED CONCLUSIVE: Anyone required to give evidence under the
terms of the Plan may do so by certificate, affidavit, document or other
information which the person to act in reliance may consider pertinent,
reliable and genuine, and to have been signed, made or presented by the
proper party or parties. The Fiduciaries under the Plan will be fully
protected in acting and relying upon any evidence described under this
Section.
10.14 RELEASE OF CLAIMS: Any payment to any Participant or Beneficiary, his or
her legal representative, or to any guardian or committee appointed for
such Participant or Beneficiary, will, to the extent thereof, be in full
satisfaction of all claims hereunder against the Administrator and the
Trustee, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition
precedent to such payment, to execute a receipt and release thereof in
such form as determined by the Administrator or the Trustee.
10.15 MULTIPLE COPIES OF PLAN AND/OR TRUST: This Plan and the related Trust
Agreement may be executed in any number of counterparts, each of which
will be deemed an original, but all of which will constitute one and the
same Agreement or Trust Agreement, as the case may be, and will be
binding on the respective successors and assigns of the Employer and all
other parties.
10.16 LIMITATION OF LIABILITY AND INDEMNIFICATION: In addition to and in
furtherance of any other limitations provided in the Plan, and to the
extent permitted by applicable law, the Employer will indemnify and hold
harmless its board of directors (collectively and individually), if any,
the Administrative/Advisory Committee (collectively and individually), if
any, and its officers, Employees, and agents against and with respect to
any and all expenses, losses, liabilities, costs, and claims, including
legal fees to defend against such liabilities and claims, arising out of
their good-faith discharge of responsibilities under or incident to the
Plan, excepting only expenses and liabilities resulting from willful
misconduct. This indemnity will not preclude such further indemnities as
may be available under insurance purchased by the Employer or as may be
provided by the Employer under any by-law, agreement, vote of
shareholders or disinterested directors, or otherwise, as such
indemnities are permitted under state law. Payments with respect to any
indemnity and payment of expenses or fees under this
70
Section will be made only from assets of the Employer, and will not be
made directly or indirectly from assets of the Trust Fund.
IN WITNESS WHEREOF, this Plan and Trust have been executed by the
Employer and the Trustees as of the day, month and year set forth on page of
this Agreement.
MEDICAL SYSTEMS MANAGEMENT,
INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------
ATTEST:
By: /s/ Xxxx XxXxxxxx
-----------------------------------
TRUSTEE
HSBC BANK USA
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, Vice President
71
MEDICAL SYSTEMS MANAGEMENT, INC.
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST
AMENDMENT #1
The MEDICAL SYSTEMS MANAGEMENT, INC. EMPLOYEE STOCK OWNERSHIP PLAN &
TRUST is amended by deleting the first two lines of Section 7.16 in their
entirety and substituting the following therefor:
VOTING COMPANY STOCK: The Trustee shall vote all Company Stock held
by it in such manner as the Administrator may direct or, in the
absence of such direction, in such manner as the Trustee may determine
in its discretion. Notwithstanding the foregoing:
IN WITNESS WHEREOF, the Sponsor and Trustee have caused this amendment
to be executed by their officers this 11th day of December, 2003.
MEDICAL SYSTEMS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Title: CEO / Chairman / Sole Member
-----------------------------
GREATBANC TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Title: Senior Vice President
-----------------------------
MEDICAL SYSTEMS MANAGEMENT, INC.
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST
AMENDMENT #2
The MEDICAL SYSTEMS MANAGEMENT, INC. EMPLOYEE STOCK OWNERSHIP PLAN &
TRUST is hereby amended as follows, such changes to be effective immediately:
1. Subsection 5.14(a) is deleted in its entirety, and the
following is substituted therefor:
(a) COMPANY STOCK: A Participant's Vested Aggregate Account shall be
distributed in the form of Company Stock to the extent it is
allocated to a Participant's Company Stock Account, and the
balance, if any, of the Vested Aggregate Account will be
distributed in cash.
2. Subsections 5.14(b) and (d) are deleted in their entirety,
and Subsection 5.14(c) is redesignated as Subsection 5.14(b).
3. Section 5.15 is deleted in its entirety, and such Section is
reserved for future use.
4. Subsection 6.1(e) is deleted in its entirety.
5. Subsection 7.2(c) is deleted in its entirety, and the
following is substituted therefor:
(b) EMPLOYER STOCK: The Trustee may invest up to 100% of the Trust
Fund in the common stock, debt obligations, or any other security
issued by the Employer or by an affiliate of the Employer within
the limitations provided under Section406, Section407, and
Section408 of ERISA provided that such investment does not
constitute a prohibited transaction under Code Section4975. Any
such investment will only be made upon written direction of the
Employer who will be solely responsible for the propriety of such
investment.
6. Section 7.16 is deleted in its entirety, and the following is
substituted therefor:
VOTING COMPANY STOCK: The Trustee shall vote all Company Stock held
by it in such manner as the Administrator may direct or, in the
absence of such direction, in such manner as the Trustee may determine
in its discretion.
7. Section 7.19 is deleted in its entirety, and such Section is
reserved for future use.
8. Section 10.9 is deleted in its entirety, and the following is
substituted therefor:
QUALIFIED PLAN STATUS: This Plan and the related Trust Agreement are
intended to qualify as a profit sharing plan and trust under
provisions of Code Section401(a) and Section501(a). Previously the
Plan was an employee stock ownership plan under Code Section409 and
Section4975(e)(7), during which time it was intended to be invested
primarily in Company Stock.
IN WITNESS WHEREOF, the Sponsor has caused this amendment to be
executed by one of its officers this 29th day of June, 2004.
MEDICAL SYSTEMS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx, President
MEDICAL SYSTEMS MANAGEMENT, INC.
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST
AMENDMENT #3
The MEDICAL SYSTEMS MANAGEMENT, INC. EMPLOYEE STOCK OWNERSHIP PLAN &
TRUST is hereby amended as follows, such changes to be effective March 28,
2005:
1. Section 5.5 is amended by deleting the first sentence of such
Section and substituting the following therefor:
A Participant who terminates employment may elect to have the
Participant's Vested Aggregate Account distributed in a lump sum,
subject to the following provisions:
2. Section 5.5 is further amended by deleting paragraph (a) in
its entirety and substituting the following therefor:
(a) GENERAL RULE: The Administrator can only make distribution under
this Section if the Participant's Vested Aggregate Account does
not exceed $5,000. Any distribution will be made as soon as
administratively feasible after the date the Participant
terminates employment, and any portion of the Participant's
Account which is not Vested will be treated as a Forfeiture.
3. Section 5.5 is further amended by deleting paragraph (b) in
its entirety and reserving the same for further use.
4. Section 5.6 is amended by deleted the words "exceeds the
amount set forth in paragraph (a) of this Section and" from the first
sentence of such Section.
5. Section 5.6 is further amended by deleting the first sentence
in paragraph (a) and substituting the following therefor:
If a Participant's Vested Aggregate Account balance is immediately
distributable, the Participant must consent to any distribution of
such amount.
6. Section 5.6 is further amended by deleting paragraph (b) in
its entirety and reserving the same for further use.
IN WITNESS WHEREOF, the Sponsor has caused this amendment to be
executed by one of its officers this 28 day of March, 2005.
MEDICAL SYSTEMS MANAGEMENT, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx, President
MEDICAL SYSTEMS MANAGEMENT, INC.
EMPLOYEE STOCK OWNERSHIP PLAN & TRUST
AMENDMENT #4
The MEDICAL SYSTEMS MANAGEMENT, INC. EMPLOYEE STOCK OWNERSHIP PLAN &
TRUST is hereby amended as follows, such changes to be effective immediately.
1. Section 4.6 shall be amended by adding the following new subsection
(e) at the end thereof:
(e) FULL VESTING: Effective as of January 1, 2005, a Participant
will have a 100% Vested Interest in his Participant's Account.
IN WITNESS WHEREOF, the Sponsor has caused this amendment to be
executed by one of its officers this 16th day of October, 2006.
PICIS, INC.
By: /s/ R. Xxxxx Xxxxx
---------------------------
Name: R. Xxxxx Xxxxx
Title: Treasurer
