JETBLUE AIRWAYS RETIREMENT PLAN
2005 Amended and Restated
Plan and Trust
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER 14
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY 15
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR 15
2.4 RECORDS AND REPORTS 17
2.5 APPOINTMENT OF ADVISERS 17
2.6 PAYMENT OF EXPENSES 17
2.7 CLAIMS PROCEDURE 17
2.8 CLAIMS REVIEW PROCEDURE 18
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY 18
3.2 EFFECTIVE DATE OF PARTICIPATION 18
3.3 DETERMINATION OF ELIGIBILITY 19
3.4 TERMINATION OF ELIGIBILITY 19
3.5 OMISSION OF ELIGIBLE EMPLOYEE 19
3.6 INCLUSION OF INELIGIBLE EMPLOYEE 19
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE 20
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION 21
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION 22
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION 26
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4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS 26
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS 31
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS 34
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS 37
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS 40
4.9 MAXIMUM ANNUAL ADDITIONS 43
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS 45
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS 47
4.12 DIRECTED INVESTMENT ACCOUNT 49
4.13 QUALIFIED MILITARY SERVICE 52
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND 52
5.2 METHOD OF VALUATION 52
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT 53
6.2 DETERMINATION OF BENEFITS UPON DEATH 53
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY 54
6.4 DETERMINATION OF BENEFITS UPON TERMINATION 55
6.5 DISTRIBUTION OF BENEFITS 56
6.6 DISTRIBUTION OF BENEFITS UPON DEATH 59
6.7 TIME OF SEGREGATION OR DISTRIBUTION 59
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY 60
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN 60
6.10 PRE-RETIREMENT DISTRIBUTION 60
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP 61
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6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION 62
6.13 LATEST TIME FOR MAKING DISTRIBUTION TO A TERMINATED PARTICIPANT 63
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE 63
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE 64
7.3 OTHER POWERS OF THE TRUSTEE 65
7.4 LOANS TO PARTICIPANTS 67
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS 69
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES 69
7.7 ANNUAL REPORT OF THE TRUSTEE 69
7.8 AUDIT 70
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE 71
7.10 TRANSFER OF INTEREST 72
7.11 TRUSTEE INDEMNIFICATION 72
7.12 DIRECT ROLLOVER; MANDATORY DISTRIBUTIONS 72
7.13 EMPLOYER SECURITIES AND REAL PROPERTY 74
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT 74
8.2 TERMINATION 75
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS 76
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS 76
9.2 DETERMINATION OF TOP HEAVY STATUS 76
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ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS 79
10.2 ALIENATION 80
10.3 CONSTRUCTION OF PLAN 81
10.4 GENDER AND NUMBER 81
10.5 LEGAL ACTION 81
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS 81
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE 82
10.8 INSURER'S PROTECTIVE CLAUSE 82
10.9 RECEIPT AND RELEASE FOR PAYMENTS 82
10.10 ACTION BY THE EMPLOYER 83
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY 83
10.12 HEADINGS 83
10.13 APPROVAL BY INTERNAL REVENUE SERVICE 84
10.14 UNIFORMITY 84
ARTICLE XI
MINIMUM DISTRIBUTION REQUIREMENTS
11.1 GENERAL RULES 84
11.2 TIME AND MANNER OF DISTRIBUTION 84
11.3 REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME 86
11.4 REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH 86
11.5 DEFINITIONS 88
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JETBLUE AIRWAYS RETIREMENT PLAN
THIS AGREEMENT hereby adopted this 31st day of March, 2005, by JetBlue
Airways Corporation (herein referred to as the "Employer") and by John D. Owen,
Thomas E. Kelly and Vincent Stabile (herein collectively referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan and
Trust effective October 1, 1999 (hereinafter called the "Effective Date"),
formerly known as JetBlue Airways Corporation 401(k) Retirement Plan and
currently known as JetBlue Airways Retirement Plan (herein referred to as the
"Plan"), in recognition of the contribution made to its successful operation by
its employees and for the exclusive benefit of its eligible employees and their
beneficiaries; and
WHEREAS, the Plan was most recently amended and restated in its
entirety by an instrument adopted on December 31, 2001, and was subsequently
amended by five additional amendments; and
WHEREAS, under the terms of the Plan, the Employer has reserved the
right to amend the Plan; and
WHEREAS, the Employer desires to amend and restate the Plan in its
entirety.
NOW, THEREFORE, effective January 1, 2005, except as otherwise
provided herein, the Employer and the Trustee, in accordance with the provisions
of the Plan pertaining to amendments thereof, hereby amend the Plan in its
entirety and restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity has
been designated by the Employer pursuant to Section 2.2 to administer the Plan
on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
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1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 9.2.
1.5 "Anniversary Date" means the last day of the Plan Year.
1.6 "Beneficiary" means the person (or entity) to whom the share of a
deceased Participant's total account is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such Participant's
wages as defined in Code Section 3401(a) and all other payments of compensation
by the Employer (in the course of the Employer's trade or business) for the
taxable year of the Participant ending with or within the Plan Year for which
the Employer is required to furnish annually to the Participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 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 employment
or the services performed (such as the exception for agricultural labor in Code
Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation shall
be made by:
(a) excluding, for purposes of the Employer's discretionary
profit sharing contributions pursuant to Section 4.1(c), the following
items: per diem allowances and other similar types of expense
reimbursements; the value of company-paid group term life insurance;
the value of other non-cash fringe benefits, such as incentive passes
and "positive space" travel benefits; moving allowances, relocation
adjustments and other similar payments and allowances; automobile
expense allowances and reimbursements; annual bonuses to officers and
directors, but not excluding cash incentive awards and other types of
cash bonuses to Employees other than officers and directors; signing
bonuses and other similar payments received in connection with
becoming employed; "in lieu of" payments made to Highly Compensated
Employees affected by the provisions of Section 4.10(a)(1); PTO
payouts; any taxable compensation that may result from the grant or
exercise of stock-based compensation; any other type of deferred
compensation; severance pay and payments in the nature of severance
benefits; non-taxable sick pay, workers compensation payments and
payments under short-term and long-term disability plans; and payments
under a pilots' loss of license income replacement plan.
(b) excluding, for purposes of salary reduction
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elections pursuant to Section 4.2 and Employer matching contributions
pursuant to Section 4.1(b), the following items: per diem allowances
and other similar types of expense reimbursements; the value of
company-paid group term life insurance; the value of other non-cash
fringe benefits, such as incentive passes and "positive space" travel
benefits; moving allowances, relocation adjustments and other similar
payments and allowances; automobile expense allowances and
reimbursements; signing bonuses and other similar payments received in
connection with becoming employed; "in lieu of" payments made to
Highly Compensated Employees affected by the provisions of Section
4.10(a)(1); any taxable compensation that may result from the grant or
exercise of stock-based compensation; any other type of deferred
compensation; severance pay and payments in the nature of severance
benefits; non-taxable sick pay; workers compensation payments and
payments under any long- term disability plan; and payments under a
pilots' loss of license income replacement plan.
(c) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
For a Participant's initial year of participation, Compensation shall
be recognized as of such Employee's effective date of participation in the
component of the Plan for which Compensation is being used pursuant to Section
3.2.
Compensation in excess of $200,000 (or such other amount provided in
the Code) shall be disregarded for all purposes other than for purposes of
salary deferral elections pursuant to Section 4.2. Such amount shall be adjusted
for increases in the cost of living in accordance with Code Section
401(a)(17)(B), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within such
calendar year. For any short Plan Year the Compensation limit shall be an amount
equal to the Compensation limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12).
If any class of Employees is excluded from the Plan, then Compensation
for any Employee who becomes eligible or ceases to be eligible to participate
during a Plan Year shall include only the portion of his Compensation earned
while the Employee is an Eligible Employee.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income policy or annuity contract (group or individual) issued pursuant to the
terms of the Plan. In the event of any conflict
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between the terms of this Plan and the terms of any contract purchased
hereunder, the Plan provisions shall control.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Designated Investment Alternative" means a specific investment
identified by name by the Employer (or such other Fiduciary who has been given
the authority to select investment options) as an available investment under the
Plan to which Plan assets may be invested by the Trustee pursuant to the
investment direction of a Participant.
1.12 "Directed Investment Option" means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the
Participant Direction Procedures to which Plan assets may be invested
by the Trustee pursuant to the investment direction of a Participant.
1.13 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.14 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6(b) which is
used to satisfy the "Actual Deferral Percentage" tests shall be considered an
Elective Contribution for purposes of the Plan. Any contributions deemed to be
Elective Contributions (whether or not used to satisfy the "Actual Deferral
Percentage" tests or the "Actual Contribution Percentage" tests) shall be
subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be
required to satisfy the nondiscrimination requirements of Regulation
1.401(k)-1(b)(5) and Regulation 1.401(m)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee except as specified below.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties will not be eligible to
participate in this Plan unless such agreement expressly provides for coverage
in this Plan.
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Employees of Affiliated Employers shall not be eligible to participate
in this Plan unless such Affiliated Employers have specifically adopted this
Plan in writing.
Employees classified by the Employer as independent contractors who
are subsequently determined by the Internal Revenue Service to be Employees
shall not be Eligible Employees.
Employees who are nonresident aliens and who receive no earned income
(within the meaning of Code Section 911(d)(2)) from the Employer which
constitutes income from sources within the United States (within the meaning of
Code Section 861(a)(3).
Employees who are Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall not be eligible to participate in this Plan.
Employees in the following additional classifications: (a) interns,
including student interns; (b) residents of Puerto Rico; (c) customer service
representatives employed on a short-term, seasonal basis (e.g., during holiday
periods).
1.16 "Employee" means any person who is employed by the Employer.
1.17 "Employer" means JetBlue Airways Corporation and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of New York.
1.18 "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of the Employer matching contributions made
pursuant to Section 4.1(b) and any qualified nonelective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a) (determined
by hypothetically reducing contributions made on behalf of Highly Compensated
Participants in order of the actual contribution ratios beginning with the
highest of such ratios). Such determination shall be made after first taking
into account corrections of any Excess Deferred Compensation pursuant to Section
4.2 and taking into account any adjustments of any Excess Contributions pursuant
to Section 4.6.
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests
made on behalf of Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a) (determined
by hypothetically reducing contributions made on behalf of Highly Compensated
Participants in order of the actual deferral ratios beginning with the highest
of such ratios). Excess Contributions shall be treated as an "annual addition"
pursuant to Section 4.9(b).
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1.20 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.21 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
1.22 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.23 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of the
Participant's Account of a Former Participant who has severed
employment with the Employer, or
(b) the last day of the Plan Year in which a Former Participant
who has severed employment with the Employer incurs five (5)
consecutive 1-Year Breaks in Service.
Regardless of the preceding provisions, if a Former Participant is
eligible to share in the allocation of Employer contributions or Forfeitures in
the year in which the Forfeiture would otherwise occur, then the Forfeiture will
not occur until the end of the first Plan Year for which the Former Participant
is not eligible to share in the allocation of Employer contributions or
Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.24 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means
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such Participant's wages as defined in Code Section 3401(a) and all other
payments of compensation by the Employer (in the course of the Employer's trade
or business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 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 employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of "415 Compensation"
shall include any elective deferral (as defined in Code Section 402(g)(3)), and
any amount which is contributed or deferred by the Employer at the election of
the Participant and which is not includible in the gross income of the
Participant by reason of Code Sections 125, 132(f)(4) or 457.
1.26 "414(s) Compensation" means any definition of compensation that
satisfies the nondiscrimination requirements of Code Section 414(s) and the
Regulations thereunder. The period for determining 414(s) Compensation must be
either the Plan Year or the calendar year ending with or within the Plan Year.
An Employer may further limit the period taken into account to that part of the
Plan Year or calendar year in which an Employee was a Participant in the
component of the Plan being tested. The period used to determine 414(s)
Compensation must be applied uniformly to all Participants for the Plan Year.
1.27 "Highly Compensated Employee" means, for Plan Years beginning after
December 31, 1996, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a "five percent owner" as defined in Section 1.32(c) at
any time during the "determination year" or the "lookback year"; or
(b) for the "lookback year" had "415 Compensation" from the
Employer in excess of $80,000 and was in the Top-Paid Group for the
"lookback year". The $80,000 amount is adjusted at the same time and
in the same manner as under Code Section 415(d), except that the base
period is the calendar quarter ending September 30, 1996.
The "determination year" means the Plan Year for which testing is
being performed, and the "lookback year" means the immediately preceding twelve
(12) month period.
A highly compensated former Employee is based on the rules applicable
to determining Highly Compensated Employee status as in effect for the
"determination year," in accordance with Regulation 1.414(q)-1T, A4 and IRS
Notice 9745 (or any superseding guidance).
In determining whether an Employee is a Highly Compensated Employee
for a Plan Year beginning in 1997, the amendments to Code
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Section 414(q) stated above are treated as having been in effect for years
beginning in 1996.
In determining who is a Highly Compensated Employee, Employees who are
nonresident aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are covered
by a plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of Leased Employees for
this purpose shall be applied on a uniform and consistent basis for all of the
Employer's retirement plans. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they performed
services during the "determination year."
1.28 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the component of the Plan being tested.
1.29 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, layoff, military duty or
leave of absence) during the applicable computation period (these hours will be
calculated and credited pursuant to Department of Labor regulation 2530.200b-2
which is incorporated herein by reference); (3) each hour for which back pay is
awarded or agreed to by the Employer without regard to mitigation of damages
(these hours will be credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses
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an Employee for medical or medically related expenses incurred by the Employee.
For purposes of (2) above, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
Notwithstanding the foregoing, for purposes of vesting hereunder, a
Participant shall be credited with Hours of Service on the basis of his payroll
period in accordance with the equivalencies set forth in Department of Labor
regulation 2530.200b-3(e)(1), which is incorporated herein by reference.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.30 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.31 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.32 "Key Employee" means an Employee or former Employee (including any
deceased Employee) who at any time during the Plan Year that includes the
Determination Date was an officer of the Employer having annual 415 Compensation
greater than $130,000 (as adjusted under Code Section 416(i)(1)), a 5-percent
owner of the Employer, or a 1-percent owner of the Employer having annual
compensation of more than $150,000. For this purpose, annual compensation means
compensation within the meaning of Code Section 415(c)(3). The determination of
who is a Key Employee will be made in accordance with Code Section 416(i)(1) and
the applicable Regulations and other guidance of general applicability issued
thereunder.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached Normal Retirement Date.
1.34 "Leased Employee" means any person (other than an Employee of the
recipient Employer) who, pursuant to an agreement between the recipient Employer
and any other person or entity ("leasing organization"), has performed services
for the recipient (or for the
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recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient Employer.
1.35 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.36 "Non-Highly Compensated Participant" means, for Plan Years beginning
after December 31, 1996, any Participant who is not a Highly Compensated
Employee. However, for purposes of Section 4.5(a) and Section 4.6, if the prior
year testing method is used, a Non-Highly Compensated Participant shall be
determined using the definition of Highly Compensated Employee in effect for the
preceding Plan Year.
1.37 "Non-Key Employee" means any Employee or former Employee (and such
Employee's or former Employee's Beneficiaries) who is not, and has never been a
Key Employee.
1.38 "Normal Retirement Age" means the Participant's 60th birthday. A
Participant shall become fully Vested in the Participant's Account upon
attaining Normal Retirement Age.
1.39 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means an absence from work
for any period by reason of the Employee's pregnancy, birth of the Employee's
child, placement of a child with the Employee in connection with the adoption of
such child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefore is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in
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any other case, in the immediately following computation period. The Hours of
Service credited for a "maternity or paternity leave of absence" shall be those
which would normally have been credited but for such absence, or, in any case in
which the Administrator is unable to determine such hours normally credited,
eight (8) Hours of Service per day. The total Hours of Service required to be
credited for a "maternity or paternity leave of absence" shall not exceed the
number of Hours of Service needed to prevent the Employee from incurring a
1-Year Break in Service.
1.41 "Participant" means any Eligible Employee who participates in the Plan
and has not for any reason become ineligible to participate further in the Plan.
1.42 "Participant Direction Procedures" means such instructions, guidelines
or policies, the terms of which are incorporated herein, as shall be established
pursuant to Section 4.12 and observed by the Administrator and applied and
provided to Participants who have Participant Directed Accounts.
1.43 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to such Participant's
total interest in the Plan and Trust resulting from the Employer Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that portion
of the Participant's Account attributable to Employer matching contributions
made pursuant to Section 4.1(b), Employer discretionary contributions made
pursuant to Section 4.1(c) and any Employer Qualified Non-Elective
Contributions.
1.44 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.45 "Participant's Directed Account" means that portion of a Participant's
interest in the Plan with respect to which the Participant has directed the
investment in accordance with the Participant Direction Procedure.
1.46 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to the
Participant's total interest in the Plan and Trust resulting from the Employer
Elective Contributions used to satisfy the "Actual Deferral Percentage" tests. A
separate accounting shall be maintained with respect to that portion of the
Participant's Elective Account attributable to such Elective Contributions
pursuant to Section 4.2 and any Employer Qualified Non-Elective Contributions.
1.47 "Participant's Transfer/Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to the Participant's total interest in the Plan resulting from amounts
transferred to this Plan from a direct plan-to-plan transfer and/or with respect
to such Participant's interest in the Plan resulting from amounts transferred
from another qualified plan or
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"conduit" Individual Retirement Account in accordance with Section 4.11.
A separate accounting shall be maintained with respect to that portion
of the Participant's Transfer/Rollover Account attributable to transfers (within
the meaning of Code Section 414(l)) and "rollovers."
1.48 "Plan" means this instrument, including all amendments thereto.
1.49 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st,
except for the first Plan Year which commenced October 1st.
1.50 "Qualified Non-Elective Contribution" means any Employer contributions
made pursuant to Section 4.6(b) and Section 4.8(f). Such contributions shall be
considered an Elective Contribution for the purposes of the Plan and used to
satisfy the "Actual Deferral Percentage" tests or the "Actual Contribution
Percentage" tests.
1.51 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as
amended from time to time.
1.52 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.54 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.55 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.56 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.57 "Top-Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" received from the Employer during such year. All
Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. Employees who are nonresident aliens who received no
earned income (within the meaning of Code
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Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Furthermore, for the purpose of determining the number of active Employees in
any year, the following additional Employees shall also be excluded, however,
such Employees shall still be considered for the purpose of identifying the
particular Employees in the Top-Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age twenty-one (21).
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top-Paid Group.
The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.58 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders such Participant incapable of continuing usual and customary employment
with the Employer. The disability of a Participant shall be determined by a
licensed physician chosen by the Administrator. The determination shall be
applied uniformly to all Participants.
1.59 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.60 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.61 "Valuation Date" means the Anniversary Date and may include any other
date or dates deemed necessary or appropriate by the Administrator for the
valuation of the Participants' accounts during the Plan Year, which may include
any day that the Trustee, any transfer agent appointed by the Trustee or the
Employer or any stock exchange used by such agent, are open for business.
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1.62 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.63 "Year of Service" means the 12-month computation period set forth
below during which an Employee is credited with at least 1,000 Hours of Service.
For vesting purposes, the computation period is the fiscal period
based upon which a Participant's Compensation for the Plan Year is determined
for purposes of Section 1.8.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be recognized.
Years of Service with LiveTV, LLC and its predecessors shall be
recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit of
the Participants and their Beneficiaries in accordance with the terms
of the Plan, the Code, and the Act. The Employer may appoint counsel,
specialists, advisers, agents (including any nonfiduciary agent) and
other persons as the Employer deems necessary or desirable in
connection with the exercise of its fiduciary duties under this Plan.
The Employer may compensate such agents or advisers from the assets of
the Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by the
Employer.
(b) The Employer may, by written agreement or designation,
appoint at its option an Investment Manager (qualified under the
Investment Company Act of 1940 as amended), investment adviser, or
other agent to provide direction to the Trustee with respect to any or
all of the Plan assets. Such appointment shall be given by the
Employer in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which the
Investment Manager or other agent shall have authority to direct the
investment.
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(c) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to the investment of
the Trust Funds. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements of Title I
of the Act.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint any
person, including, but not limited to, the Employees of the Employer, to perform
the duties of the Administrator. Any person so appointed shall signify
acceptance by filing written acceptance with the Employer. Upon the resignation
or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan
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under the terms of Code Section 401(a), and shall comply with the terms of the
Act and all regulations issued pursuant thereto. The Administrator shall have
all powers necessary or appropriate to accomplish the Administrator's duties
under the Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan as set forth under the terms of the Plan, including,
but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
discretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be
contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation
deferred or paid to them in cash;
(j) to act as the named Fiduciary responsible for communications
with Participants as needed to maintain Plan compliance with Act
Section 404(c), including, but not limited to, the receipt and
transmitting of Participant's directions as to the investment of their
account(s) under the Plan and the formulation of policies, rules, and
procedures pursuant to which Participants may give
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investment instructions with respect to the investment of their
accounts;
(k) to determine the validity of, and take appropriate action
with respect to, any qualified domestic relations order received by
it; and
(l) to assist any Participant regarding the Participant's rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, or any person or persons retained or
appointed by any Named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts and
other specialists and their agents, the costs of any bonds required pursuant to
Act Section 412, and other costs of administering the Plan. Until paid, the
expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within ninety (90) days after the
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application is filed, or such period as is required by applicable law or
Department of Labor regulation. In the event the claim is denied, the reasons
for the denial shall be specifically set forth in the notice in language
calculated to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be afforded a reasonable opportunity for a full and fair review of such
decision under a claims review procedure established by the Administrator. Such
claims review procedure shall comply with the requirements of Department of
Labor regulation 2560.503-1, as amended from time to time.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
An Eligible Employee shall be eligible to participate hereunder on the
date of such Employee's employment with the Employer.
3.2 EFFECTIVE DATE OF PARTICIPATION
With respect to salary reduction elections pursuant to Section 4.2 and
Employer matching contributions pursuant to Section 4.1(b), an Eligible Employee
shall become a Participant in the Plan effective as of the later of (a) his date
of employment with the Employer and (b) the first day of the payroll period in
which his deferral election becomes effective in accordance with the rules
established pursuant to Section 4.2(j).
With respect to Employer discretionary contributions pursuant to
Section 4.1(c), an Eligible Employee shall become a Participant effective as of
the date on which such Employee satisfies the eligibility requirements of
Section 3.1.
If, prior to the effective date of participation, an Employee who has
satisfied the eligibility conditions set forth in Section 3.1 above and would
otherwise have become a Participant, shall go from an ineligible classification
of Employee to that of an Eligible Employee, such Employee shall enter into
participation on the date such Employee becomes an Eligible Employee or, if
later, the date the Employee would otherwise have entered the Plan had the
Employee always been an Eligible Employee.
If, prior to the effective date of participation, an Employee who has
satisfied the eligibility conditions set forth in
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Section 3.1 and would otherwise become a Participant, shall go from the
classification of an Eligible Employee to an ineligible classification of
Employees, such Employee shall enter into participation on the date such
Employee again becomes an Eligible Employee, or, if later, the date the Employee
would otherwise have entered into participation had the Employee always been an
Eligible Employee. However, if such Employee incurs a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules set forth in
Section 3.7.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review pursuant to Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in the Plan for each Year of Service completed while a
non-eligible Employee, until such time as the Participant's Account is forfeited
or distributed pursuant to the terms of the Plan. Additionally, the Former
Participant's interest in the Plan shall continue to share in the earnings of
the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been made
and allocated, then the Employer shall make a subsequent contribution, if
necessary after the application of Section 4.4(c), so that the omitted Employee
receives a total amount which the Employee would have received (including both
Employer contributions and earnings thereon) had the Employee not been omitted.
Such contribution shall be made regardless of whether it is deductible in whole
or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as
a Participant in the Plan is erroneously included and discovery of such
inclusion is not made until after a contribution for the year has been made and
allocated, the Employer shall be entitled to recover the contribution made with
respect to the ineligible person provided the error is discovered within twelve
(12) months of the date on which it was made. Otherwise, the amount contributed
with respect to the ineligible person shall constitute a Forfeiture for the Plan
Year in which the discovery is made. Notwithstanding the foregoing,
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any Deferred Compensation made by an ineligible person shall be distributed to
the person (along with any earnings attributable to such Deferred Compensation).
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE
(a) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is re-employed by the
Employer before a 1-Year Break in Service occurs, the Former
Participant shall become a Participant as of the re-employment date.
(b) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is re-employed after a
1-Year Break in Service has occurred, Years of Service shall include
Years of Service prior to the 1-Year Break in Service subject to the
following rules:
(1) In the case of a Former Participant who under the Plan does
not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions, Years of Service before a
period of 1-Year Break in Service will not be taken into account
if the number of consecutive 1-Year Breaks in Service equal or
exceed the greater of (A) five (5) or (B) the aggregate number of
pre-break Years of Service. Such aggregate number of Years of
Service will not include any Years of Service disregarded under
the preceding sentence by reason of prior 1-Year Breaks in
Service.
(2) A Former Participant shall participate in the Plan as of the
date of re-employment.
(c) After a Former Participant who has severed employment with
the Employer incurs five (5) consecutive 1-Year Breaks in Service, the
Vested portion of said Former Participant's Account attributable to
pre-break service shall not be increased as a result of post-break
service. In such case, separate accounts will be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing the Participant's Employer derived
account balance in the Plan attributable to post-break service.
(d) If any Participant becomes a Former Participant due to
severance of employment with the Employer and is re-employed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and
such Former Participant had received a distribution of the entire
Vested interest prior to re-employment, then the forfeited account
shall be reinstated only if the Former Participant repays the full
amount which
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had been distributed. Such repayment must be made before the earlier
of five (5) years after the first date on which the Participant is
subsequently re-employed by the Employer or the close of the first
period of five (5) consecutive 1-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a severance of employment, the time for repayment may not end
earlier than five (5) years after the date of distribution. In the
event the Former Participant does repay the full amount distributed,
the undistributed forfeited portion of the Participant's Account must
be restored in full, unadjusted by any gains or losses occurring
subsequent to the Valuation Date preceding the distribution. The
source for such reinstatement may be Forfeitures occurring during the
Plan Year. If such source is insufficient, then the Employer will
contribute an amount which is sufficient to restore any such forfeited
Accounts provided, however, that if a discretionary contribution is
made for such year pursuant to Section 4.1(c), such contribution will
first be applied to restore any such Accounts and the remainder shall
be allocated in accordance with Section 4.4.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer Elective Contribution.
(b) On behalf of a Participant who elects to defer Compensation
in accordance with Section 4.2(a) hereof, a matching contribution
equal to 100% of such Participant's Deferred Compensation not in
excess of 3% of his Compensation for the Plan Year, which amount shall
be deemed an Employer Non-Elective Contribution. For purposes of the
foregoing, the Employer shall accrue an incremental portion of the
matching contribution separately each pay period during the Year, and
shall contribute with respect to each pay period only the amount not
in excess of 3% of the Participant's Compensation for the period.
After the end of the Plan Year, the Employer shall make a "true-up"
contribution on behalf of each Participant, equal to the excess of the
matching contribution payable for the entire Plan Year, as determined
under the first sentence hereof, over the aggregate amount of the
periodic contributions previously made for the Year.
(c) A discretionary amount, which amount, if any,
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shall be deemed an Employer Non-Elective Contribution.
(d) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution.
All contributions by the Employer shall be made in cash or in such property as
is acceptable to the Trustee.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer, from the Compensation
otherwise payable to him during the Plan Year but for such election,
an amount not exceeding the limits otherwise set forth in this Plan. A
deferral election (or modification of an earlier election) may not be
made with respect to Compensation that is currently available on or
before the date the Participant executes such election. For purposes
of this Section, Compensation shall be determined prior to any
reductions made pursuant to Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described
in Code Section 414(h)(2) that are treated as Employer contributions.
The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective
Account.
All employees who are eligible to make elective deferrals
under this Plan and who have or will have attained age 50 before the
close of the Plan Year shall be eligible to make catch-up
contributions in accordance with and subject to the limitations of
Code Section 414(v). Such catch-up contributions shall not be taken
into account for purposes of the provisions of this Plan implementing
the required limitations of Code Sections 402(g) and 415. The Plan
shall not be treated as failing to satisfy its provisions implementing
the requirements of Code Sections 401(k)(3), 401(k)(11), 401(k)(12),
410(b) or 416, as applicable, by reason of the making of such catch-up
contributions.
(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and, except as otherwise provided herein,
shall not be subject to Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the contrary, amounts
held in the Participant's Elective Account may not be distributable
(including any offset of loans) earlier than:
(1) a Participant's severance from employment, Total
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and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the existence at the time
of Plan termination of another defined contribution plan or the
establishment of a successor defined contribution plan by the
Employer or an Affiliated Employer within the period ending
twelve months after distribution of all assets from the Plan
maintained by the Employer. For this purpose, a defined
contribution plan does not include an employee stock ownership
plan (as defined in Code Section 4975(e)(7) or 409), a simplified
employee pension plan (as defined in Code Section 408(k)), or a
simple individual retirement account plan (as defined in Code
Section 408(p));
(4) the date of disposition by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a
Participant who continues employment with the corporation
acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) to an entity which
is not an Affiliated Employer but only with respect to a
Participant who continues employment with such subsidiary; or
(6) the proven financial hardship of a Participant, subject to
the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements of
the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g), as in effect at the beginning of such taxable year,
except to the extent permitted under Section 4.2(a) and Code Section
414(v). If such dollar limitation is exceeded, a Participant will be
deemed to have notified the Administrator of such excess amount, which
shall be distributed in a manner consistent with Section 4.2(f). The
foregoing dollar limitations shall be adjusted annually pursuant to
the method provided in the Code and Regulations.
(e) In the event a Participant has received a hardship
distribution from the Participant's Elective
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Account pursuant to Section 6.11(b) or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to elect to
have Deferred Compensation contributed to the Plan for a period of
twelve (12) months following the receipt of the distribution.
Furthermore, the dollar limitation under Code Section 402(g) shall be
reduced, with respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by the
amount of such Participant's Deferred Compensation, if any, pursuant
to this Plan (and any other plan maintained by the Employer) for the
taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as described in Code Section 401(k)), a simplified employee pension
(as described in Code Section 408(k)(6)), a simple individual
retirement account plan (as described in Code Section 408(p)), a
salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section
457(b), or a trust described in Code Section 501(c)(18) cumulatively
exceed the limitation imposed by Code Section 402(g) (as adjusted
annually in accordance with the method provided in Code Section 415(d)
pursuant to Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of the
Participant's taxable year, notify the Administrator in writing of
such excess and request that the Participant's Deferred Compensation
under this Plan be reduced by an amount specified by the Participant.
In such event, the Administrator may direct the Trustee to distribute
such excess amount (and any Income allocable to such excess amount) to
the Participant not later than the first April 15th following the
close of the Participant's taxable year. Any distribution of less than
the entire amount of Excess Deferred Compensation and Income shall be
treated as a pro rata distribution of Excess Deferred Compensation and
Income. The amount distributed shall not exceed the Participant's
Deferred Compensation under the Plan for the taxable year (and any
Income allocable to such excess amount). Any distribution on or before
the last day of the Participant's taxable year must satisfy each of
the following conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
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(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall
be made first from unmatched Deferred Compensation and, thereafter,
from Deferred Compensation which is matched. Matching contributions
which relate to such Deferred Compensation shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any
distribution of Excess Contributions pursuant to Section 4.6(a) for
the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or the Participant's
Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section
may be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate, or other
short-term debt security acceptable to the Trustee until such time as
the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the salary
reduction elections provided for herein in accordance with the
following:
(1) An Eligible Employee may make an initial salary deferral
election within a reasonable time, not to exceed thirty (30)
days, after first becoming eligible to participate in the Plan
pursuant to Section 3.2. If the Eligible Employee fails to make
an initial salary deferral election within such time, then such
Eligible Employee may thereafter make an election in accordance
with the rules governing modifications. Such election shall
constitute a binding salary reduction agreement between such
Employee and the Employer and shall be filed with the
Administrator. Such election shall initially be effective
beginning with the pay period during which or next following the
acceptance of the salary reduction agreement by the
Administrator, or as otherwise specified in rules established by
the Administrator hereunder. The election shall not have
retroactive effect, and shall remain in force until modified or
revoked.
-25-
(2) A Participant may modify a prior election at any time during
the Plan Year and concurrently make a new election by filing such
new election with the Administrator. A modification shall not
have retroactive effect, and shall remain in force until further
modified or revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan
Year by providing the Administrator with such advance notice as
may be acceptable to the Administrator. Such revocation shall
become effective in accordance with the rules established by the
Administrator hereunder. Furthermore, the termination of the
Participant's employment or the cessation of his participation
for any other reason shall be deemed to revoke any salary
reduction agreement then in effect, effective immediately
following the close of the pay period within which such
termination or cessation occurs.
(4) The Administrator shall have authority to establish
reasonable procedures governing the making of elections
hereunder. These procedures shall determine the payroll period
with respect to which elections shall become effective, with the
aim of giving effect to elections promptly and without undue
delay after being made and accepted, while at the same time
taking into account the reasonable requirements of the Employer's
payroll, plan recordkeeping and other information systems.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall make all contribution to the Plan within the
applicable time limits prescribed by law. Subject to the preceding requirement
and any other provision set forth in this Plan, the Employer may make its
contributions to the Plan for a particular Plan Year at such time or times as
the Employer, in its sole discretion, may determine.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit
as of each Anniversary Date, or other Valuation Date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information,
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the Administrator shall allocate such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution
("matching contribution") made pursuant to Section 4.1(b), to
each Participant's Account in accordance with Section 4.1(b).
Any Participant actively employed at any time during the Plan
Year shall be eligible to share in the matching contribution for
the Plan Year.
(3) With respect to the Employer Non-Elective Contribution
("discretionary contribution") made pursuant to Section 4.1(c),
to each Participant's Account in the same proportion that each
such Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
Only Participants who are actively employed on the last day of
the Plan Year shall be eligible to share in the discretionary
contribution for the year. An Employee who is on an approved
leave of absence as of the last day of the Plan Year, including
an unpaid leave of absence, shall be deemed to be "actively
employed" for purposes of the foregoing requirement unless the
Employer has determined that such Employee is not reasonably
expected to return to employment at the expiration of such leave.
(c) On or before each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date may be made available to
reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 3.7(d), be used to
satisfy any contribution that may be required pursuant to Sections 3.5
and 6.9, or be used to pay any administrative expenses of the Plan.
The remaining Forfeitures, if any, shall be used to reduce the
Employer's contributions hereunder for the Plan Year in which such
Forfeitures occur.
(d) For any Top Heavy Plan Year, Employees not otherwise eligible
to share in the allocation of contributions as provided above, shall
receive the minimum allocation provided for in Section 4.4(g) if
eligible pursuant to the provisions of Section 4.4(i).
(e) Notwithstanding the final sentence of Section 4.4(b)(3)
above, however, (1) a Participant who is no
-27-
longer actively employed on the last day of the Plan Year on account
of death or Total and Permanent Disability during the Year shall be
entitled to share in the discretionary contribution for the Year and
(2) a Participant who is no longer actively employed on the last day
of the Plan Year on account of his retirement during the Year at or
after Normal Retirement Age shall be entitled to share in the
discretionary contribution provided that a period of at least 12
consecutive months shall have elapsed between his initial date of hire
and his retirement date.
(f) As of each Valuation Date, before the current valuation
period allocation of Employer contributions, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of
such date. Earnings or losses with respect to a Participant's Directed
Account shall be allocated in accordance with Section 4.12.
Participants' transfers from other qualified plans deposited
in the general Trust Fund shall share in any earnings and losses (net
appreciation or depreciation) of the Trust Fund in the same manner
provided above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate earnings
and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the Employer contributions allocated to the Participant's Combined
Account of each Employee shall be equal to at least three percent (3%)
of such Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Employee in any defined
contribution plan included with this Plan in a Required Aggregation
Group). However, if (1) the sum of the Employer contributions
allocated to the Participant's Combined Account of each Key Employee
for such Top Heavy Plan Year is less than three percent (3%) of each
Key Employee's "415 Compensation" and (2) this Plan is not required to
be included in an Aggregation Group to enable a defined benefit plan
to meet the requirements of Code Section 401(a)(4) or 410, the sum of
the Employer contributions allocated to the Participant's Combined
Account of each Employee shall be equal to the largest percentage
allocated to the Participant's Combined Account of any Key Employee.
Employer matching contributions shall be taken into account for
purposes of satisfying the minimum contribution
-28-
requirements of Code Section 416(c)(2) and of this Section 4.4(g). The
preceding sentence shall apply with respect to matching contributions
under the Plan or, if the Plan provides that the minimum contribution
requirement shall be met in another plan, such other plan. Employer
matching contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching contributions
for purposes of the actual contribution percentage test and other
requirements of Code Section 401(m). However, in determining whether a
Non-Key Employee has received the required minimum allocation, such
Non-Key Employee's Deferred Compensation needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a), if any,
shall not be taken into account.
No such minimum allocation shall be required in this Plan
for any Employee who participates in another defined contribution plan
subject to Code Section 412 included with this Plan in a Required
Aggregation Group.
(h) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer
contributions allocated on behalf of such Key Employee divided by the
"415 Compensation" for such Key Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(j) For the purposes of this Section, "415 Compensation" in
excess of $200,000 (or such other amount provided in the Code) shall
be disregarded. Such amount shall be adjusted for increases in the
cost of living in accordance with Code Section 401(a)(17)(B), except
that the dollar increase in effect on January 1 of any calendar year
shall be effective for the Plan Year beginning with or within such
calendar year. If "415 Compensation" for any prior determination
period is taken into account in determining a Participant's minimum
benefit for the current Plan Year, the "415 Compensation" for such
determination period is subject to the applicable annual "415
Compensation" limit in effect for that prior period. For any short
Plan Year the "415 Compensation" limit shall be an amount equal to the
"415 Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
(k) Notwithstanding anything herein to the contrary,
-29-
Participants who terminated employment for any reason during the Plan
Year shall share in the salary reduction contributions made by the
Employer for the year of termination without regard to the Hours of
Service credited.
(l) Notwithstanding anything in this Section to the contrary, all
information necessary to properly reflect a given transaction may not
be available until after the date specified herein for processing such
transaction, in which case the transaction will be reflected when such
information is received and processed. Subject to express limits that
may be imposed under the Code, the processing of any contribution,
distribution or other transaction may be delayed for any legitimate
business reason (including, but not limited to, failure of systems or
computer programs, failure of the means of the transmission of data,
force majeure, the failure of a service provider to timely receive
values or prices, and the correction for errors or omissions or the
errors or omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan.
(m) Notwithstanding anything to the contrary, if this is a Plan
that would otherwise fail to meet the requirements of Code Section
410(b)(1) and the Regulations thereunder because Employer
contributions would not be allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules
shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be
eligible as are necessary to satisfy the applicable test
specified above. The specific Participants who shall become
eligible under the terms of this paragraph shall be those who
have not separated from service prior to the last day of the Plan
Year and have completed the greatest number of Hours of Service
in the Plan Year.
(2) If after application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution for the Plan
Year shall be further expanded to include the minimum number of
Participants who have separated from service prior to the last
day of the Plan Year as are necessary to satisfy the applicable
test. The specific Participants who shall become eligible to
share shall be those Participants who have completed the greatest
number of Hours of Service in the Plan Year before terminating
employment.
(3) Nothing in this Section shall permit the
-30-
reduction of a Participant's accrued benefit. Therefore any
amounts that have previously been allocated to Participants may
not be reallocated to satisfy these requirements. In such event,
the Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they
been included in the allocations, even if it exceeds the amount
which would be deductible under Code Section 404. Any adjustment
to the allocations pursuant to this paragraph shall be considered
a retroactive amendment adopted by the last day of the Plan Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1996, the annual allocation derived from Employer
Elective Contributions to a Highly Compensated Participant's Elective
Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group (for
the preceding Plan Year if the prior year testing method is used
to calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group) multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group (for
the preceding Plan Year if the prior year testing method is used
to calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group) shall not be more than two
percentage points. Additionally, the "Actual Deferral Percentage"
for the Highly Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior year
testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group)
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 and to make Employee
-31-
contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have a combination of such
Participant's Elective Contributions and Employer matching
contributions reduced pursuant to Section 4.6(a) and Regulation
1.401(m)-2, the provisions of which are incorporated herein by
reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan Year, the average
of the ratios, calculated separately for each Participant in such
group, of the amount of Employer Elective Contributions allocated to
each Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The actual
deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent. Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's Elective
Account shall be reduced by Excess Deferred Compensation to the extent
such excess amounts are made under this Plan or any other plan
maintained by the Employer.
Notwithstanding the above, if the prior year test method is
used to calculate the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group for the first Plan Year of this
amendment and restatement, the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the preceding Plan Year
shall be calculated pursuant to the provisions of the Plan then in
effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made or
suspended pursuant to Section 4.2.
Notwithstanding the above, if the prior year testing method
is used to calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, for purposes of Section 4.5(a) and
4.6, a Non-Highly Compensated Participant shall include any such
Employee eligible to make a deferral election, whether or not such
deferral election was made or suspended, pursuant to the provisions of
the Plan in effect for the preceding Plan Year.
(d) For the purposes of this Section and Code
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Sections 401(a)(4), 410(b) and 401(k), if two or more plans which
include cash or deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)), the cash or deferred arrangements included in such
plans shall be treated as one arrangement. In addition, two or more
cash or deferred arrangements may be considered as a single
arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In
such a case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as one
arrangement and as one plan for purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k). Any adjustment to the
Non-Highly Compensated Participant actual deferral ratio for the prior
year shall be made in accordance with Internal Revenue Service Notice
98-1 and any superseding guidance. Plans may be aggregated under this
paragraph (d) only if they have the same plan year. Notwithstanding
the above, for Plan Years beginning after December 31, 1996, if two or
more plans which include cash or deferred arrangements are
permissively aggregated under Regulation 1.410(b)-7(d), all plans
permissively aggregated must use either the current year testing
method or the prior year testing method for the testing year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be combined with
this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part
of an employee stock ownership plan as defined in Code Section
4975(e)(7) or 409) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral ratio
with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different plan years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a single
arrangement.
(f) For the purpose of this Section, for Plan Years beginning
after December 31, 1996, when calculating the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group, the
current year testing method shall be used. Any change from the current
year testing method to the prior year testing method shall be made
pursuant to
-33-
Internal Revenue Service Notice 98-1, Section VII (or superseding
guidance), the provisions of which are incorporated herein by
reference.
(g) Notwithstanding anything in this Section to the contrary, the
provisions of this Section and Section 4.6 may be applied separately
(or will be applied separately to the extent required by Regulations)
to each plan within the meaning of Regulation 1.401(k)-1(g)(11).
Furthermore, for Plan Years beginning after December 31, 1998, the
provisions of Code Section 401(k)(3)(F) may be used to exclude from
consideration all Non-Highly Compensated Employees who have not
satisfied the minimum age and service requirements of Code Section
410(a)(1)(A).
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial allocations of
the Employer Elective Contributions made pursuant to Section 4.4 do (or might)
not satisfy one of the tests set forth in Section 4.5(a) for Plan Years
beginning after December 31, 1996, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following
the end of each Plan Year, but in no event later than the close of the
following Plan Year, the Highly Compensated Participant having the
largest dollar amount of Elective Contributions shall have a portion
of such Participant's Elective Contributions distributed until the
total amount of Excess Contributions has been distributed, or until
the amount of such Participant's Elective Contributions equals the
Elective Contributions of the Highly Compensated Participant having
the second largest dollar amount of Elective Contributions. This
process shall continue until the total amount of Excess Contributions
has been distributed. In determining the amount of Excess
Contributions to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount shall be
reduced pursuant to Section 4.2(f) by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated Participant
for such Participant's taxable year ending with or within such Plan
Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall be adjusted for Income; and
-34-
(iii) shall be designated by the Employer as a distribution
of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of
Excess Contributions and Income.
(3) Matching contributions which relate to Excess Contributions
shall be forfeited unless the related matching contribution is
distributed as an Excess Aggregate Contribution pursuant to
Section 4.8.
(b) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution in accordance with one of the following
provisions which contribution shall be allocated to the Participant's
Elective Account of each Non-Highly Compensated Participant eligible
to share in the allocation in accordance with such provision. The
Employer shall provide the Administrator with written notification of
the amount of the contribution being made and for which provision it
is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.5(a). Such contribution
shall be allocated in the same proportion that each Non-Highly
Compensated Participant's 414(s) Compensated for the year (or
prior year if the prior year testing method is being used) bears
to the total 414(s) Compensation of all Non-Highly Compensated
Participants for such year.
(2) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.5(a). Such contribution
shall be allocated in the same proportion that each Non-Highly
Compensated Participant electing salary reductions pursuant to
Section 4.2 in the same proportion that each such Non-Highly
Compensated Participant's Deferred Compensation for the year (or
at the end of the prior Plan Year if the prior year testing
method is being used) bears to the total Deferred Compensation of
all such Non-Highly Compensated Participants for such year.
(3) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated
-35-
Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section
4.5(a). Such contribution shall be allocated in equal amounts
(per capita).
(4) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants electing salary
reductions pursuant to Section 4.2 in an amount sufficient to
satisfy (or to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution shall be
allocated for the year (or at the end of the prior Plan Year if
the prior year testing method is used) to each Non-Highly
Compensated Participant electing salary reductions pursuant to
Section 4.2 in equal amounts (per capita).
(5) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.5(a). Such contribution
shall be allocated to the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests set
forth in Section 4.5(a) is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has
received the maximum "annual addition" pursuant to Section 4.9.
This process shall continue until one of the tests set forth in
Section 4.5(a) is satisfied (or is anticipated to be satisfied).
Notwithstanding the above, at the Employer's discretion,
Non-Highly Compensated Participants who are not employed at the end of
the Plan Year (or at the end of the prior Plan Year if the prior year
testing method is being used) shall not be eligible to receive a
special Qualified Non-Elective Contribution and shall be disregarded.
Notwithstanding the above, if the testing method changes
from the current year testing method to the prior year testing method,
then for purposes of preventing the double counting of Qualified
Non-Elective Contributions for the first testing year for which the
change is effective, any special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants used to satisfy the
"Actual Deferral Percentage" or "Actual Contribution Percentage" test
under the current year testing method for the prior year testing year
shall be disregarded.
(c) If during a Plan Year, it is projected that the aggregate
amount of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would cause the Plan to fail
the tests set forth in
-36-
Section 4.5(a), then the Administrator may automatically reduce the
deferral amount of affected Highly Compensated Participants, beginning
with the Highly Compensated Participant who has the highest deferral
ratio until it is anticipated the Plan will pass the tests or until
the actual deferral ratio equals the actual deferral ratio of the
Highly Compensated Participant having the next highest actual deferral
ratio. This process may continue until it is anticipated that the Plan
will satisfy one of the tests set forth in Section 4.5(a).
Alternatively, the Employer may specify a maximum percentage of
Compensation that may be deferred.
(d) Any Excess Contributions (and Income) which are distributed
on or after 2 1/2 months after the end of the Plan Year shall be
subject to the ten percent (10%) Employer excise tax imposed by Code
Section 4979.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan Years beginning
after December 31, 1996 for the Highly Compensated Participant group
shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group); or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to calculate the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group), or such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group) plus 2 percentage points. However, to prevent
the multiple use of the alternative method described in this
paragraph and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement maintained
by the Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this
Plan or under any plan maintained by the Employer or an
Affiliated Employer shall have a combination of Elective
Contributions and Employer matching contributions reduced
pursuant to Regulation 1.401(m)-2 and Section 4.8(a). The
provisions of Code
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Section 401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group), the
average of the ratios (calculated separately for each Participant in
each group and rounded to the nearest one-hundredth of one percent)
of:
(1) the sum of Employer matching contributions made pursuant to
Section 4.1(b) on behalf of each such Participant for such Plan
Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
Notwithstanding the above, if the prior year testing method
is used to calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, for purposes of Section 4.7(a), the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participant group for the preceding Plan Year shall be determined
pursuant to the provisions of the Plan then in effect.
(c) For purposes of determining the "Actual Contribution
Percentage," only Employer matching contributions contributed to the
Plan prior to the end of the succeeding Plan Year shall be considered.
In addition, the Administrator may elect to take into account, with
respect to Employees eligible to have Employer matching contributions
pursuant to Section 4.1(b) allocated to their accounts, elective
deferrals (as defined in Regulation 1.402(g)-1(b)) and qualified
nonelective contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such elective
deferrals and qualified nonelective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(5)
which is incorporated herein by reference. However, the Plan Year must
be the same as the plan year of the plan to which the elective
deferrals and the qualified nonelective contributions are made.
(d) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made are
treated as one plan for purposes of Code Sections 401(a)(4) or 410(b)
(other than the average benefits test under Code Section
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410(b)(2)(A)(ii)), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such
a case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as though such aggregated plans
were a single plan. Any adjustment to the Non-Highly Compensated
Participant actual contribution ratio for the prior year shall be made
in accordance with Internal Revenue Service Notice 981 and any
superseding guidance. Plans may be aggregated under this paragraph (d)
only if they have the same plan year. Notwithstanding the above, for
Plan Years beginning after December 31, 1996, if two or more plans
which include cash or deferred arrangements are permissively
aggregated under Regulation 1.410(b)-7(d), all plans permissively
aggregated must use either the current year testing method or the
prior year testing method for the testing year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be aggregated with
this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) which are maintained by the
Employer or an Affiliated Employer to which matching contributions,
Employee contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's actual
contribution ratio. However, if the plans have different plan years,
this paragraph shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions (whether or
not a deferral election was made or suspended) allocated to the
Participant's account for the Plan Year.
Notwithstanding the above, if the prior year testing method
is used to calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group for the first Plan Year of
this amendment and restatement, for the purposes of Section 4.7(a), a
Non-Highly Compensated Participant shall include any such
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Employee eligible to have Employer matching contributions (whether or
not a deferral election was made or suspended) allocated to the
Participant's account for the preceding Plan Year pursuant to the
provisions of the Plan then in effect.
(g) For the purpose of this Section, for Plan Years beginning
after December 31, 1996, when calculating the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group, the
current year testing method shall be used. Any change from the current
year testing method to the prior year testing method shall be made
pursuant to Internal Revenue Service Notice 98-1, Section VII (or
superseding guidance), the provisions of which are incorporated herein
by reference.
(h) Notwithstanding anything in this Section to the contrary, the
provisions of this Section and Section 4.8 may be applied separately
(or will be applied separately to the extent required by Regulations)
to each plan within the meaning of Regulation 1.401(k)-1(g)(11).
Furthermore, for Plan Years beginning after December 31, 1998, the
provisions of Code Section 401(k)(3)(F) may be used to exclude from
consideration all Non-Highly Compensated Employees who have not
satisfied the minimum age and service requirements of Code Section
410(a)(1)(A).
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that, for Plan Years
beginning after December 31, 1996, the "Actual Contribution
Percentage" for the Highly Compensated Participant group exceeds (or
might exceed) the "Actual Contribution Percentage" for the Non-Highly
Compensated Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third month
following the end of the Plan Year, but in no event later than the
close of the following Plan Year) shall direct the Trustee to
distribute to the Highly Compensated Participant having the largest
dollar amount of contributions determined pursuant to Section
4.7(b)(1), the Vested portion of such contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit such
non-Vested contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) until the
total amount of Excess Aggregate Contributions has been distributed,
or until the Participant's remaining amount equals the amount of
contributions determined pursuant to Section 4.7(b)(1) of the Highly
Compensated Participant having the second largest dollar amount of
contributions. This process shall continue until the total amount of
Excess Aggregate Contributions has been distributed.
If the correction of Excess Aggregate
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Contributions attributable to Employer matching contributions is not
in proportion to the Vested and non-Vested portion of such
contributions, then the Vested portion of the Participant's Account
attributable to Employer matching contributions after the correction
shall be subject to Section 6.5(g).
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be treated
as a pro rata distribution and/or forfeiture of Excess Aggregate
Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution of
Excess Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with Section
4.4.
(c) Excess Aggregate Contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes
of Code Sections 404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are forfeited.
(d) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
after-tax voluntary Employee contributions due to recharacterization
for the plan year of any other qualified cash or deferred arrangement
(as defined in Code Section 401(k)) maintained by the Employer that
ends with or within the Plan Year or which are treated as after-tax
voluntary Employee contributions due to recharacterization pursuant to
Section 4.6(a).
(e) If during a Plan Year the projected aggregate amount of
Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the tests
set forth in Section 4.7(a), cause the Plan to fail such tests, then
the Administrator may automatically reduce proportionately or in the
order provided in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.7(a).
(f) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution in
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accordance with one of the following provisions which contribution
shall be allocated to the Participant's Account of each Non-Highly
Compensated eligible to share in the allocation in accordance with
such provision. The Employer shall provide the Administrator with
written notification of the amount of the contribution being made and
for which provision it is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.7. Such contribution
shall be allocated in the same proportion that each Non-Highly
Compensated Participant's 414(s) Compensation for the year (or
prior year if the prior year testing method is being used) bears
to the total 414(s) Compensation of all Non-Highly Compensated
Participants for such year.
(2) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.7. Such contribution
shall be allocated in the same proportion that each Non-Highly
Compensated Participant electing salary reductions pursuant to
Section 4.2 in the same proportion that each such Non-Highly
Compensated Participant's Deferred Compensation for the year (or
at the end of the prior Plan Year if the prior year testing
method is being used) bears to the total Deferred Compensation of
all such Non-Highly Compensated Participants for such year.
(3) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.7. Such contribution
shall be allocated in equal amounts (per capita).
(4) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants electing salary
reductions pursuant to Section 4.2 in an amount sufficient to
satisfy (or to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution shall be
allocated for the year (or at the end of the prior Plan Year if
the prior year testing method is used) to each Non-Highly
Compensated Participant electing salary reductions pursuant to
Section 4.2 in equal amounts (per capita).
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(5) A special Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of)
one of the tests set forth in Section 4.7. Such contribution
shall be allocated to the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests set
forth in Section 4.7 is satisfied (or is anticipated to be
satisfied), or until such Non-Highly Compensated Participant has
received the maximum "annual addition" pursuant to Section 4.9.
This process shall continue until one of the tests set forth in
Section 4.7 is satisfied (or is anticipated to be satisfied).
Notwithstanding the above, at the Employer's discretion,
Non-Highly Compensated Participants who are not employed at the end of
the Plan Year (or at the end of the prior Plan Year if the prior year
testing method is being used) shall not be eligible to receive a
special Qualified Non-Elective Contribution and shall be disregarded.
Notwithstanding the above, if the testing method changes
from the current year testing method to the prior year testing method,
then for purposes of preventing the double counting of Qualified
Non-Elective Contributions for the first testing year for which the
change is effective, any special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants used to satisfy the
"Actual Deferral Percentage" or "Actual Contribution Percentage" test
under the current year testing method for the prior year testing year
shall be disregarded.
(g) Any Excess Aggregate Contributions (and Income) which are
distributed on or after 2 1/2 months after the end of the Plan Year
shall be subject to the ten percent (10%) Employer excise tax imposed
by Code Section 4979.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
that may be contributed or allocated to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $40,000, adjusted
for increases in the cost of living as provided in Code Section 415(d)
and pursuant to the Regulations, and (2) one hundred percent (100%) of
the Participant's "415 Compensation" for such "limitation year." If
the Employer contribution that would otherwise be contributed or
allocated to the Participant's accounts would cause the "annual
additions" for the "limitation year" to exceed the maximum "annual
additions," the amount contributed or allocated will be reduced so
that the "annual additions" for the "limitation year" will equal the
maximum "annual additions," and any
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amount in excess of the maximum "annual additions," which would have
been allocated to such Participant may be allocated to other
Participants. For any short "limitation year," the dollar limitation
in (1) above shall be reduced by a fraction, the numerator of which is
the number of full months in the short "limitation year" and the
denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts
for any "limitation year" of (1) Employer contributions, (2) Employee
contributions, (3) forfeitures, (4) amounts allocated to an individual
medical account, as defined in Code Section 415(l)(2), that is part of
a pension or annuity plan maintained by the Employer, and (5) amounts
derived from contributions attributable to post-retirement medical
benefits allocated to the separate account of a key employee (as
defined in Code Section 419A(d)(3)) under a welfare benefit plan (as
defined in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to any contribution for medical
benefits (within the meaning of Code Section 401(h) or 419A(f)(2))
after separation from service which is otherwise treated as an "annual
addition."
(c) For purposes of applying the limitations of Code Section 415,
the transfer of funds from one qualified plan to another is not an
"annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(e)(6), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cashouts); (4)
repayments of distributions received by an Employee pursuant to Code
Section 411(a)(3)(D) (mandatory contributions); and (5) Employee
contributions to a simplified employee pension excludable from gross
income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415,
the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer is a member
of a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as
-44-
modified by Code Section 415(h)), is a member of an affiliated service
group (as defined by Code Section 414(m)), or is a member of a group
of entities required to be aggregated pursuant to Regulations under
Code Section 414(o), all Employees of such Employers shall be
considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
(h)(1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such Participant's
accounts during the "limitation year."
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan
not subject to Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions" will be
credited to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the
defined contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, the maximum
"annual additions" under this Plan shall equal the product of (A)
the maximum "annual additions" for the "limitation year" minus
any "annual additions" previously credited under subparagraphs
(1) or (2) above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be credited to
such Participant's accounts under this Plan without regard to the
limitations of Code Section 415 and (ii) the denominator of which
is such "annual additions" for all plans described in this
subparagraph.
(i) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
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estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the meaning of
Code Section 402(g)(3)) that may be made with respect to any
Participant under the limits of Section 4.9 or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would cause the maximum "annual
additions" to be exceeded for any Participant, the "excess amount"
will be disposed of in the following manner:
(1) The Participant's share of the Employer's discretionary
contributions pursuant to Section 4.1(c) will be reduced to the
extent necessary to reduce the "excess amount." The amount so
reduced shall be held unallocated in a "Section 415 suspense
account" and will thereafter be applied to reduce future Employer
contributions in the succeeding "limitation years" as provided in
Regulation 1.415-6(b)(6)(i).
(2) If, after the application of subparagraph (1) above, an
"excess amount" still exists, any unmatched Deferred Compensation
of the Participant will be reduced to the extent necessary to
reduce the "excess amount." The Deferred Compensation so reduced
(and any gains attributable to such Deferred Compensation) will
be distributed to the Participant.
(3) If, after the application of subparagraph (2) above, an
"excess amount" still exists, any Deferred Compensation which is
matched and the matching contributions which relate to such
Deferred Compensation will be reduced proportionately to the
extent necessary to reduce the "excess amount." The Deferred
Compensation so reduced (and any gains attributable to such
Deferred Compensation) will be distributed to the Participant,
and the Employer matching contributions so reduced (and any gains
attributable to such matching contributions) will be used to
reduce the Employer contribution in the next "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, of
(1) the "annual additions" which would be credited to the
Participant's account under the terms of the Plan without regard to
the limitations of Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts"
for all Participants in the
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Plan during the "limitation year."
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred (within the meaning of Code Section 414(l)) to this Plan
from other tax qualified plans under Code Section 401(a) by
Participants, provided the trust from which such funds are transferred
permits the transfer to be made and the transfer will not jeopardize
the tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. Prior to accepting any transfers to
which this Section applies, the Administrator may require written
assurances that the amounts to be transferred meet the requirements of
this Section. The amounts transferred shall be set up in a separate
account herein referred to as a "Participant's Transfer/Rollover
Account." The portion of the Participant's Transfer/Rollover Account
attributable to any transfer shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason, except as otherwise
provided in the conditions governing such transfer or in an amendment
to the Plan relating thereto.
Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer (other than a direct rollover) shall
be subject to the distribution limitations provided for in Regulation
1.401(k)-1(d).
(b) With the consent of the Administrator, the Plan may accept a
"rollover" by Participants, as specified below, provided the rollover
will not jeopardize the tax exempt status of the Plan or create
adverse tax consequences for the Employer. Prior to accepting any
rollover to which this Section applies, the Administrator may require
the Employee to furnish written assurances that the amounts to be
rolled over to this Plan meet the requirements of this Section. The
amounts rolled over shall be set up in a the Participant's
Transfer/Rollover Account and shall be fully Vested at all times and
not subject to Forfeiture for any reason.
(1) Direct Rollovers. The Plan will accept a direct rollover of
an eligible rollover distribution from: (a) a qualified plan
described in Code Section 401(a) or 403(a), excluding after-tax
employee contributions; (b) an annuity contract described in Code
Section 403(b), excluding after-tax employee contributions; and
(c) an eligible plan under Code Section 457(b) which is
maintained by a state, political subdivision of a state, or any
agency or instrumentality of a
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state or political subdivision of a state, except to the extent
that such distribution consists of amounts attributable to
after-tax employee contributions.
(2) Participant Rollover Contributions from Other Plans. The Plan
will accept a participant contribution of an eligible rollover
distribution from: (a) a qualified plan described in Code Section
401(a) or 403(a), excluding after-tax employee contributions; (b)
an annuity contract described in Code Section 403(b), excluding
after-tax employee contributions; (c) an eligible plan under Code
Section 457(b), which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state, except to the extent
that such distribution consists of amounts attributable to
after-tax employee contributions.
(3) Participant Rollover Contributions from IRAs. The Plan will
accept a participant rollover contribution of the portion of a
distribution from an individual retirement account or annuity
described in Code Section 408(a) or 408(b) that is eligible to be
rolled over and would otherwise be includible in gross income of
the distributee.
(4) Rollover Contributions of After-Tax Employee Contributions
Not Accepted. Notwithstanding anything to the contrary herein,
the Plan will not accept a rollover contribution or any portion
of a rollover contribution that consists of amounts attributable
to after-tax employee contributions that would otherwise (but for
the making of such rollover contribution) be excludible from the
gross income of the distributee.
(c) Amounts in a Participant's Transfer/Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraph (d) of this Section. The Trustee
shall have no duty or responsibility to inquire as to the propriety of
the amount, value or type of assets transferred, nor to conduct any
due diligence with respect to such assets; provided, however, that
such assets are otherwise eligible to be held by the Trustee under the
terms of this Plan.
(d) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount
credited to the Participant's Transfer/Rollover Account. Any
distributions of amounts held in a Participant's Transfer/Rollover
Account shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not limited
to,
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all notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Such amounts (including the earnings thereon)
shall be disregarded in determining whether an involuntary cashout of
benefits may be made without Participant consent.
(e) The Administrator may direct that Employee transfers and
rollovers made after a Valuation Date be segregated into a separate
account for each Participant until such time as the allocations
pursuant to this Plan have been made, at which time they may remain
segregated or be invested as part of the general Trust Fund or be
directed by the Participant pursuant to Section 4.12.
(f) This Plan shall not accept any direct or indirect transfers
(as that term is defined and interpreted under Code Section 401(a)(11)
and the Regulations thereunder) from a defined benefit plan, money
purchase plan (including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life annuity
form of payment to the Participant.
(g) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall be permitted only if it
will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in a
uniform nondiscriminatory manner, direct the Trustee, in writing (or
in such other form which is acceptable to the Trustee), to invest all
of their accounts in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction
Procedures. That portion of the interest of any Participant so
directing will thereupon be considered a Participant's Directed
Account.
(b) As of each Valuation Date, all Participant Directed Accounts
shall be charged or credited with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in the market
value using publicly listed fair market values when available or
appropriate as follows:
(1) to the extent that the assets in a Participant's Directed
Account are accounted for as pooled assets or investments, the
allocation of earnings, gains and losses of each Participant's
Directed Account shall be based upon the total amount of funds so
invested in a
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manner proportionate to the Participant's share of such pooled
investment; and
(2) to the extent that the assets in the Participant's Directed
Account are accounted for as segregated assets, the allocation of
earnings, gains and losses from such assets shall be made on a
separate and distinct basis.
(c) Investment directions will be processed as soon as
administratively practicable after proper investment directions are
received from the Participant. No guarantee is made by the Plan,
Employer, Administrator or Trustee that investment directions will be
processed on a daily basis, and no guarantee is made in any respect
regarding the processing time of an investment direction.
Notwithstanding any other provision of the Plan, the Employer,
Administrator or Trustee reserves the right to not value an investment
option on any given Valuation Date for any reason deemed appropriate
by the Employer, Administrator or Trustee. Furthermore, the processing
of any investment transaction may be delayed for any legitimate
business reason (including, but not limited to, failure of systems or
computer programs, failure of the means of the transmission of data,
force majeure, the failure of a service provider to timely receive
values or prices, and correction for errors or omissions or the errors
or omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan and
considered the applicable Valuation Date for an investment
transaction.
(d) The Participant Direction Procedures shall provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including, but need
not be limited to, the following:
(1) the conveyance of instructions by the Participants and their
Beneficiaries to invest Participant Directed Accounts in Directed
Investment Options;
(2) the name, address and phone number of the Fiduciary (and, if
applicable, the person or persons designated by the Fiduciary to
act on its behalf) responsible for providing information to the
Participant or a Beneficiary upon request relating to the
Directed Investment Options;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed
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Investment Option by the Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses which
affect the balances in Participant Directed Accounts in
connection with the purchase or sale of Directed Investment
Options; and
(6) general procedures for the dissemination of investment and
other information relating to the Designated Investment
Alternatives as deemed necessary or appropriate, including but
not limited to a description of the following:
(i) the investment vehicles available under the Plan,
including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information which may
be obtained upon request from the Fiduciary designated to
provide such information.
(e) With respect to any Employer stock which is allocated to a
Participant's Directed Investment Account, the Participant or
Beneficiary shall direct the Trustee with regard to any voting, tender
and similar rights associated with the ownership of Employer stock,
(hereinafter referred to as the "Stock Rights") as follows:
(1) each Participant or Beneficiary shall direct the Trustee to
vote or otherwise exercise such Stock Rights in accordance with
the provisions, conditions and terms of any such Stock Rights;
(2) such directions shall be provided to the Trustee by the
Participant or Beneficiary in accordance with the procedure as
established by the Administrator and the Trustee shall vote or
otherwise exercise such Stock Rights with respect to which it has
received directions to do so under this Section; and
(3) to the extent to which a Participant or Beneficiary does not
instruct the Trustee to vote or otherwise exercise such Stock
Rights, such Participants or Beneficiaries shall be deemed to
have directed the Trustee that such Stock Rights remain nonvoted
and unexercised.
(f) Any information regarding investments available under the
Plan, to the extent not required to be described in the Participant
Direction Procedures, may be provided to the Participant in one or
more written documents (or in any
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other form including, but not limited to, electronic media) which are
separate from the Participant Direction Procedures and are not thereby
incorporated by reference into this Plan.
(g) The Administrator may, in its discretion, include in or
exclude by amendment or other action from the Participant Direction
Procedures such instructions, guidelines or policies as it deems
necessary or appropriate to ensure proper administration of the Plan,
and may interpret the same accordingly.
4.13 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary, effective
December 12, 1994, contributions, benefits and service will be provided in
accordance with Code Section 414(u).
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation Date,
to determine the net worth of the assets comprising the Trust Fund as it exists
on the Valuation Date. In determining such net worth, the Trustee shall value
the assets comprising the Trust Fund at their fair market value (or their
contractual value in the case of a Contract or Policy) as of the Valuation Date
and shall deduct all expenses for which the Trustee has not yet obtained
reimbursement from the Employer or the Trust Fund. The Trustee may update the
value of any shares held in the Participant Directed Account by reference to the
number of shares held by that Participant, priced at the market value as of the
Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
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 shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate employment with the Employer and
retire for the purposes hereof on the Participant's Normal Retirement Date.
However, a Participant may postpone the termination of employment with the
Employer to a later date, in which event the participation of such Participant
in the Plan, including the right to receive allocations pursuant to Section 4.4,
shall continue until such Participant's Late Retirement Date. Upon a
Participant's Retirement Date or attainment of Normal Retirement Date without
termination of employment with the Employer, or as soon thereafter as is
practicable, the Trustee shall distribute, at the election of the Participant,
all amounts credited to such Participant's Combined Account in accordance with
Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the Participant's
Retirement Date or other termination of employment, all amounts
credited to such Participant's Combined Account shall become fully
Vested. The Administrator shall direct the Trustee, in accordance with
the provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 6.6 and 6.7, to distribute any remaining Vested amounts
credited to the accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant
as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive
payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than the spouse if:
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(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may at
any time change or revoke a designation of a Beneficiary by filing
written notice of such change or revocation with the Administrator.
However, the Participant's spouse must again consent in writing (or in
such other form as permitted by the Internal Revenue Service) to any
change in Beneficiary unless the original consent acknowledged that
the spouse had the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elected to relinquish such
right.
(f) In the event no valid designation of Beneficiary exists, or
if the Beneficiary is not alive at the time of the Participant's
death, the death benefit will be paid to the Participant's estate. If
the Beneficiary does not predecease the Participant, but dies prior to
distribution of the death benefit, the death benefit will be paid to
the Beneficiary's estate.
(g) Notwithstanding anything in this Section to the contrary, if
a Participant has designated the spouse as a Beneficiary, then a
divorce decree or a legal separation that relates to such spouse shall
revoke the Participant's designation of the spouse as a Beneficiary
unless the decree or a qualified domestic relations order (within the
meaning of Code Section 414(p)) provides otherwise.
(h) Any consent by the Participant's spouse to waive any rights
to the death benefit must be in writing (or in such other form as
permitted by the Internal Revenue Service), must acknowledge the
effect of such waiver, and be witnessed by a Plan representative or a
notary public. Further, the spouse's consent must be irrevocable and
must acknowledge the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
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Disability prior to the Participant's Retirement Date or other termination of
employment, all amounts credited to such Participant's Combined Account shall
become fully Vested. In the event of a Participant's Total and Permanent
Disability, the Administrator, in accordance with the provisions of Sections 6.5
and 6.7, shall direct the distribution to such Participant of all Vested amounts
credited to such Participant's Combined Account.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is terminated
for any reason other than death, Total and Permanent Disability or
retirement, then such Participant shall be entitled to such benefits
as are provided hereinafter pursuant to this Section 6.4.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee that the
entire Vested portion of the Terminated Participant's Combined Account
be payable to such Terminated Participant. Any distribution under this
paragraph shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not limited
to, all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder.
If the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions does not exceed
$5,000, the Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid immediately to such Participant in a single
lump sum. For purposes of this provision and the provisions of Section
6.5(b), the value of a Participant's Vested benefit shall be
determined without regard to that portion of his Account that is
attributable to rollover contributions (and earnings allocable
thereto) as defined in Code Section 411(a)(11(D).
(b) A Participant shall become fully Vested in the Participant's
Account attributable to Employer discretionary contributions made
pursuant to Section 4.1(c) immediately upon entry into the Plan.
(c) The Vested portion of any Participant's Account attributable
to Employer matching contributions made pursuant to Section 4.1(b)
shall be a percentage of the total of such amount credited to the
Participant's Account determined on the basis of the Participant's
number of Years of Service according to the following schedule:
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Vesting Schedule
Years of Service Percentage
1 20%
2 40%
3 60%
4 80%
5 100%
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any
full or partial termination of the Plan, all amounts then credited to
the account of any affected Participant shall become 100% Vested and
shall not thereafter be subject to Forfeiture.
(f) The computation of a Participant's nonforfeitable percentage
of such Participant's interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. In the event
that the Plan is amended to change or modify any vesting schedule, or
if the Plan is amended in any way that directly or indirectly affects
the computation of the Participant's nonforfeitable percentage, or if
the Plan is deemed amended by an automatic change to a top heavy
vesting schedule, then each Participant with at least three (3) Years
of Service as of the expiration date of the election period may elect
to have such Participant's nonforfeitable percentage computed under
the Plan without regard to such amendment or change. If a Participant
fails to make such election, then such Participant shall be subject to
the new vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end sixty
(60) days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or such Participant's Beneficiary any amount to which the Participant
is entitled under the Plan in one
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lump-sum payment in cash.
(b) Any distribution to a Participant who has a Vested benefit
that exceeds $5,000 shall require such Participant's written (or in
such other form as permitted by the Internal Revenue Service) consent
if such distribution occurs prior to the time the benefit is
"immediately distributable." A benefit is "immediately distributable"
if any part of the benefit could be distributed to the Participant (or
surviving spouse) before the Participant attains (or would have
attained if not deceased) the later of the Participant's Normal
Retirement Age or age 62.
(c) The following rules will apply to the consent requirements
set forth in subsection (b):
(1) The Participant must be informed of the right to defer
receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the distribution of any
benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required
under Section 6.5(d).
(2) Notice of the rights specified under this paragraph shall be
provided no less than thirty (30) days and no more than ninety
(90) days before the date the distribution commences.
(3) Written (or such other form as permitted by the Internal
Revenue Service) consent of the Participant to the distribution
must not be made before the Participant receives the notice and
must not be made more than ninety (90) days before the date the
distribution commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to
the distribution.
Any such distribution may commence less than thirty (30)
days after the notice required under Regulation 1.411(a)-11(c) is
given, provided that: (1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at least
thirty (30) days after receiving the notice to consider the decision
of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
(d) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits made on or after January
1, 1997, shall be made in accordance
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with the following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Regulations thereunder (including Regulation
1.401(a)(9)-2), the provisions of which are incorporated herein by
reference:
(1) A Participant's benefits shall be distributed or must begin
to be distributed not later than April 1st of the calendar year
following the later of (i) the calendar year in which the
Participant attains age 70 1/2 or (ii) the calendar year in which
the Participant retires, provided, however, that this clause (ii)
shall not apply in the case of a Participant who is a "five (5)
percent owner" at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70 1/2.
Such distributions shall be equal to or greater than any required
distribution.
(2) Distributions to a Participant and the Participant's
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
(e) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in accordance
with Regulations. The election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the
life expec- tancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and joint and
last survivor expectancy shall be computed using the return multiples
in Tables V and VI of Regulation 1.72-9.
(f) All annuity Contracts under this Plan shall be
nontransferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of the Plan.
(g) If a distribution is made to a Participant who has not
severed employment and who is not fully Vested in the Participant's
Account and the Participant may increase the Vested percentage in such
account, then, at any relevant time the Participant's Vested portion
of the account will be equal to an amount ("X") determined by the
formula:
X equals P (AB plus D) - D
where "P" is the Vested percentage at the relevant time, "AB" is the
account balance at the relevant time, and "D" is the amount of the
distribution.
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6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in cash
subject to the rules of Section 6.6(b).
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder. If it is
determined, pursuant to Regulations, that the distribution of a
Participant's interest has begun and the Participant dies before the
entire interest has been distributed, the remaining portion of such
interest shall be distributed at least as rapidly as under the method
of distribution selected pursuant to Section 6.5 as of the date of
death. If a Participant dies before receiving any distributions of the
interest in the Plan or before distributions are deemed to have begun
pursuant to Regulations, then the death benefit shall be distributed
to the Participant's Beneficiaries by December 31st of the calendar
year in which the fifth anniversary of the Participant's date of death
occurs.
However, in the event that the Participant's spouse
(determined as of the date of the Participant's death) is the
designated Beneficiary, then in lieu of the preceding rules,
distributions must be made over a period not extending beyond the life
expectancy of the spouse and must commence on or before the later of:
(1) December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st of
the calendar year in which the Participant would have attained age 70
1/2. If the surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this Section shall
apply as if the spouse was the Participant.
(c) For purposes of this Section, any amount paid to a child of
the Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to
make a distribution the distribution may be made on such date or as soon
thereafter as is practicable. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall occur
not later than the sixtieth (60th) day after the close of the Plan Year in which
the
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latest of the following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age specified herein; (b)
the tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates service
with the Employer.
Notwithstanding the foregoing, the failure of a Participant to consent
to a distribution that is "immediately distributable" (within the meaning of
Section 6.5), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or incompetent
Beneficiary, then the Administrator may direct that such distribution be paid to
the legal guardian, or if none in the case of a minor Beneficiary, to a parent
of such Beneficiary or a responsible adult with whom the Beneficiary maintains
residence, or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the state
in which said Beneficiary resides. Such a payment to the legal guardian,
custodian or parent of a minor Beneficiary shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to
a Participant or Beneficiary hereunder shall, at the later of the Participant's
attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of
the inability of the Administrator, after sending a certified letter, return
receipt requested, to the last known address of such person, to ascertain the
whereabouts of such Participant or Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. Notwithstanding the
foregoing, effective January 1, 2001, if the value of a Participant's Vested
benefit derived from Employer and Employee contributions does not exceed $5,000,
then the amount distributable may, in the sole discretion of the Administrator,
either be treated as a Forfeiture, or be paid directly to an individual
retirement account described in Code Section 408(a) or an individual retirement
annuity described in Code Section 408(b) at the time it is determined that the
whereabouts of the Participant or the Participant's Beneficiary cannot be
ascertained. In the event a Participant or Beneficiary is located subsequent to
the Forfeiture, such benefit shall be restored, first from Forfeitures, if any,
and then from an additional Employer contribution if necessary. However,
regardless of the preceding, a benefit which is lost by reason of escheat under
applicable state law is not treated as a Forfeiture for purposes of this Section
nor as an impermissible forfeiture under the Code.
6.10 PRE-RETIREMENT DISTRIBUTION
Unless otherwise provided, at such time as a Participant
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shall have attained the age of 59 1/2 years, the Administrator, at the election
of the Participant who has not severed employment with the Employer, shall
direct the Trustee to distribute all or a portion of the Vested amount then
credited to the accounts maintained on behalf of the Participant, excluding that
portion of his Participant's Account attributable to Employer discretionary
contributions made pursuant to Section 4.1(c). In the event that the
Administrator makes such a distribution, the Participant shall continue to be
eligible to participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan
Year up to the lesser of 100% of the Participant's Elective Account
valued as of the last Valuation Date or the amount necessary to
satisfy the immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to be made
as of the first day of the Plan Year or, if later, the Valuation Date
immediately preceding the date of distribution, and the Participant's
Elective Account shall be reduced accordingly. Withdrawal under this
Section is deemed to be on account of an immediate and heavy financial
need of the Participant only if the withdrawal is for:
(1) Medical expenses described in Code Section 213(d) incurred by
the Participant, the Participant's spouse, or any of the
Participant's dependents (as defined in Code Section 152) or
necessary for these persons to obtain medical care as described
in Code Section 213(d);
(2) The costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Participant;
(3) Payment of tuition, related educational fees, and room and
board expenses for the next twelve (12) months of post-secondary
education for the Participant and the Participant's spouse,
children, or dependents; or
(4) Payments necessary to prevent the eviction of the Participant
from the Participant's principal residence or foreclosure on the
mortgage on that residence.
(b) No distribution shall be made pursuant to this Section unless
the Administrator, based upon the Participant's representation and
such other facts as are
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known to the Administrator, determines that all of the following
conditions are satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The amount
of the immediate and heavy financial need may include any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all plans maintained by the
Employer; and
(3) The Plan, and all other plans maintained by the Employer,
provide that the Participant's elective deferrals and after-tax
voluntary Employee contributions will be suspended for at least
six (6) months after receipt of the hardship distribution or, the
Participant, pursuant to a legally enforceable agreement, will
suspend elective deferrals and after-tax voluntary Employee
contributions to the Plan and all other plans maintained by the
Employer for at least six (6) months after receipt of the
hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited solely to the Participant's total Deferred Compensation as of
the date of distribution, reduced by the amount of any previous
distributions pursuant to this Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
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6.13 LATEST TIME FOR MAKING DISTRIBUTION TO A TERMINATED PARTICIPANT
Notwithstanding anything to the contrary in Sections 6.5, 6.6 and 6.7,
in the event that a terminated Participant's account remains undistributed to
him or his Beneficiary, in whole or in part, when the Participant attains (or
would have attained, if still living) age 65, the Administrator shall
immediately distribute such Participant's entire nonforfeitable account balance.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method" determined by
the Employer, to invest, manage, and control the Plan assets
subject, however, to the direction of a Participant with respect
to Participant Directed Accounts, the Employer or an Investment
Manager appointed by the Employer or any agent of the Employer;
(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the
event of their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and furnish
to the Employer and/or Administrator for each Plan Year a written
annual report pursuant to Section 7.7.
(b) In the event that the Trustee shall be directed by a
Participant (pursuant to the Participant Direction Procedures), or the
Employer, or an Investment Manager or other agent appointed by the
Employer with respect to the investment of any or all Plan assets, the
Trustee shall have no liability with respect to the investment of such
assets, but shall be responsible only to execute such investment
instructions as so directed.
(1) The Trustee shall be entitled to rely fully on the written
(or other form acceptable to the Administrator and the Trustee,
including, but not limited to, voice recorded) instructions of a
Participant (pursuant to the Participant Direction Procedures),
or the Employer, or any Fiduciary or nonfiduciary agent of the
Employer, in the discharge of such duties, and shall not be
liable for any loss or other liability, resulting from such
direction (or lack of direction) of the investment of any part of
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the Plan assets.
(2) The Trustee may delegate the duty of executing such
instructions to any nonfiduciary agent, which may be an affiliate
of the Trustee or any Plan representative.
(3) The Trustee may refuse to comply with any direction from the
Participant in the event the Trustee, in its sole and absolute
discretion, deems such directions improper by virtue of
applicable law. The Trustee shall not be responsible or liable
for any loss or expense which may result from the Trustee's
refusal or failure to comply with any directions from the
Participant.
(4) Any costs and expenses related to compliance with the
Participant's directions shall be borne by the Participant's
Directed Account, unless paid by the Employer.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to
sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not
limited to, stocks, common or preferred, open-end or closed-end mutual
funds, bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other factors,
the short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments, the
Trustee shall not be restricted to securities or other property of the
character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times the
Plan may qualify as a qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to
the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a
custodial, clerical and recordkeeping nature.
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7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power
of substitution; to exercise any conversion privileges, subscription
rights or other options, and to make any payments incidental thereto;
to oppose, or to consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities, or other
property. However, the Trustee shall not vote proxies relating to
securities for which it has not been assigned full investment
management responsibilities. In those cases where another party has
such investment authority or discretion, the Trustee will deliver all
proxies to said party who will then have full responsibility for
voting those proxies;
(d) To cause any securities or other property to be registered in
the Trustee's own name, in the name of one or more of the Trustee's
nominees, in a clearing corporation, in a depository, or in book entry
form or in bearer form, but the books and records of the Trustee shall
at all times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the
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money lent or to inquire into the validity, expediency, or propriety
of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as
Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or
defend suits or legal or administrative proceedings, and to represent
the Plan in all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or
may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of
the Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity or other Contracts as
and when entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest or in cash or cash
balances without liability for interest thereon;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under
the Investment Company Act of 1940;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a
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national securities exchange registered under the Securities Exchange
Act of 1934, as amended, or, if the options are not traded on a
national securities exchange, are guaranteed by a member firm of the
New York Stock Exchange regardless of whether such options are
covered;
(p) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(q) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle
such assets and make joint or common investments and carry joint
accounts on behalf of this Plan and Trust and such other trust or
trusts, allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(r) To appoint a nonfiduciary agent or agents to assist the
Trustee in carrying out any investment instructions of Participants
and of any Investment Manager or Fiduciary, and to compensate such
agent(s) from the assets of the Plan, to the extent not paid by the
Employer;
(s) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances: (1)
loans shall be made available to all Participants and Beneficiaries on
a reasonably equivalent basis; (2) loans shall not be made available
to Highly Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (3) loans
shall bear a reasonable rate of interest; (4) loans shall be
adequately secured; and (5) loans shall provide for periodic repayment
over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) may, in accordance with a uniform and nondiscriminatory
policy established by the Administrator, be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on
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the day before the date on which such loan is made, over the
outstanding balance of loans from the Plan to the Participant on
the date on which such loan was made, or
(2) one-half (1/2) of the present value of the nonforfeitable
accrued benefit of the Participant under the Plan, excluding that
portion of his Participant's Account attributable to Employer
discretionary contributions made pursuant to Section 4.1(c).
For purposes of this limit, all plans of the Employer shall
be considered one plan.
(c) Loans shall provide for level amortization with payments to
be made not less frequently than quarterly over a period not to exceed
five (5) years. However, loans used to acquire any dwelling unit
which, within a reasonable time, is to be used (determined at the time
the loan is made) as a "principal residence" of the Participant shall
provide for periodic repayment over a reasonable period of time that
may exceed five (5) years. For this purpose, a "principal residence"
has the same meaning as a "principal residence" under Code Section
1034. Loan repayments may be suspended under this Plan as permitted
under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a reasonable
rate of interest;
(6) the types of collateral which may secure a Participant loan;
and
(7) the events constituting default and the steps that will be
taken to preserve Plan assets.
Such Participant loan program shall be contained
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in a separate written document which, when properly executed, is
hereby incorporated by reference and made a part of the Plan.
Furthermore, such Participant loan program may be modified or amended
in writing from time to time without the necessity of amending this
Section.
(e) Notwithstanding anything in this Plan to the contrary, if a
Participant or Beneficiary defaults on a loan made pursuant to this
Section, then the loan default will be a distributable event to the
extent permitted by the Code and Regulations.
(f) Notwithstanding anything in this Section to the contrary, any
loans made prior to the date this amendment and restatement is adopted
shall be subject to the terms of the plan in effect at the time such
loan was made.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in
the Trustee's fee schedule (if the Trustee has such a schedule) or as agreed
upon in writing by the Employer and the Trustee. However, an individual serving
as Trustee who already receives full-time pay from the Employer shall not
receive compensation from the Plan. In addition, the Trustee shall be reimbursed
for any reasonable expenses, including reasonable counsel fees incurred by it as
Trustee. Such compensation and expenses shall be paid from the Trust Fund unless
paid or advanced by the Employer. All taxes of any kind whatsoever that may be
levied or assessed under existing or future laws upon, or in respect of, the
Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
(a) Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan
Year, the Trustee, or its agent, shall furnish to the Employer and
Administrator a written statement of account with respect to the Plan
Year for which such contribution was made setting forth:
(1) the net income, or loss, of the Trust Fund;
(2) the gains, or losses, realized by the Trust Fund upon sales
or other disposition of the assets;
(3) the increase, or decrease, in the value of the
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Trust Fund;
(4) all payments and distributions made from the Trust Fund; and
(5) such further information as the Trustee and/or Administrator
deems appropriate.
(b) The Employer, promptly upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be
deemed an approval thereof. The approval by the Employer of any
statement of account shall be binding on the Employer and the Trustee
as to all matters contained in the statement to the same extent as if
the account of the Trustee had been settled by judgment or decree in
an action for a judicial settlement of its account in a court of
competent jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were parties.
However, nothing contained in this Section shall deprive the Trustee
of its right to have its accounts judicially settled if the Trustee so
desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the
Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and
records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan
Year, furnish to the Administrator and the Trustee a report of the
audit setting forth the accountant's opinion as to whether any
statements, schedules or lists that are required by Act Section 103 or
the Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and
may, at the election of the Employer, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated, supervised, and
subject to periodic examination by a state or federal agency, then it
shall
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transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one hundred
twenty (120) days after the end of the Plan Year or such other date as
may be prescribed under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) Unless otherwise agreed to by both the Trustee and the
Employer, a Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of resignation.
(b) Unless otherwise agreed to by both the Trustee and the
Employer, the Employer may remove a Trustee at any time by delivering
to the Trustee, at least thirty (30) days before its effective date, a
written notice of such Trustee's removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the powers and responsibilities of the predecessor as if such
successor had been originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or Trustees shall have
full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to
the death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the powers and responsibilities of the predecessor as if such
successor had been originally named as Trustee herein immediately upon
the death, resignation, incapacity, or removal of the predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, the
Trustee shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year
during which the individual or entity served as Trustee. This
statement shall be either (i) included as part of the annual statement
of account for the Plan Year required under Section 7.7 or (ii) set
forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the
annual statement of account for the Plan Year. The procedures set
forth in Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special statement of account
rendered hereunder and approval by the Employer of any such special
statement in the manner provided in Section 7.7 shall have
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the same effect upon the statement as the Employer's approval of an
annual statement of account. No successor to the Trustee shall have
any duty or responsibility to investigate the acts or transactions of
any predecessor who has rendered all statements of account required by
Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of a Participant to another trust forming part of a pension,
profit sharing or stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the requirements of Code
Section 401(a), provided that the trust to which such transfers are made permits
the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and hold harmless the Trustee against
any and all claims, losses, damages, expenses and liabilities the Trustee may
incur in the exercise and performance of the Trustee's power and duties
hereunder, unless the same are determined to be due to gross negligence or
willful misconduct.
7.12 DIRECT ROLLOVER; MANDATORY DISTRIBUTIONS
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution that is equal to at least $500 paid directly to
an eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section the following definitions shall
apply:
(1) An "eligible rollover distribution" is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an "eligible rollover distribution" does
not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distribute and the distributee's designated beneficiary, or
for a specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section
401(a)(9); the portion of any other distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized
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appreciation with respect to employer securities); any amount
that is distributed on account of hardship after December 31,
2001; and any other distribution that is reasonably expected to
total less than $200 during a year. A portion of a distribution
shall not fail to be an eligible rollover distribution merely
because the portion consists of after-tax employee contributions
which are not includible in gross income. However, such portion
may be transferred only to an individual retirement account or
annuity described in Code Section 408(a) or (b), or to a
qualified defined contribution plan described in Code Section
401(a) or 403(a) that agrees to separately account for amounts so
transferred, including separately accounting for the portion of
such distribution which is includible in gross income and the
portion of such distribution which is not so includible.
(2) An "eligible retirement plan" is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), an annuity contract
described in Code Section 403(b, an eligible plan under Code
Section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan, or a qualified trust described in Code Section 401(a)
that accepts the distributee's eligible rollover distribution.
The foregoing definition of an "eligible retirement plan" shall
also apply in the case of a distribution to a surviving spouse,
or to a spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Code Section
414(p).
(3) A "distributee" includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are distributees with
regard to the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
(5) A "mandatory distribution" is a distribution described in
Code Section 401(a)(31)(B)(i).
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(c) Effective for distributions occurring on or after March 28,
2005, in the event of a mandatory distribution greater than
$1,000 in accordance with Section 6.4(a), if the Participant does
not elect to have such distribution paid directly to an eligible
retirement plan specified by the Participant in a direct rollover
or to receive the distribution directly in accordance with
Section 6.4(a), then the Administrator shall pay the distribution
in a direct rollover to an individual retirement plan designated
by the Administrator.
7.13 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" and "qualifying Employer real property," as those terms are
defined in the Act, provided, however, that the Trustee shall not be permitted
to acquire any "qualifying Employer securities" or "qualifying Employer real
property" if, immediately after the acquisition of such securities or property,
the fair market value of all "qualifying Employer securities" and "qualifying
Employer real property" held by the Trustee hereunder should amount to more than
100% of the fair market value of all the assets in the Trust Fund.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee or Administrator may only be made with the Trustee's or
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any portion of the Trust Fund to revert to or become
property of the Employer.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4) or other IRS guidance, no Plan amendment or transaction
having the effect of a Plan amendment (such as a merger, plan transfer
or similar transaction) shall be effective if it eliminates or reduces
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any "Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits" which
results in a further restriction on such benefits unless such "Section
411(d)(6) protected benefits" are preserved with respect to benefits
accrued as of the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit. A Plan
amendment that eliminates or restricts the ability of a Participant to
receive payment of the Participant's interest in the Plan under a
particular optional form of benefit will be permissible if the
amendment satisfies the conditions in (1) and (2) below:
(1) The amendment provides a single-sum distribution form that is
otherwise identical to the optional form of benefit eliminated or
restricted. For purposes of this condition (1), a single-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 Participant) except with respect to the timing of
payments after commencement.
(2) The amendment is not effective unless the amendment provides
that the amendment shall not apply to any distribution with an
annuity starting date earlier than the earlier of: (i) the
ninetieth (90th) day after the date the Participant receiving the
distribution has been furnished a summary that reflects the
amendment and that satisfies the Act requirements at 29 CFR
2520.104b-3 (relating to a summary of material modifications) or
(ii) the first day of the second Plan Year following the Plan
Year in which the amendment is adopted.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written notice
of such termination. Upon any full or partial termination, all amounts
credited to the affected Participants' Combined Accounts shall become
100% Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts, including
Forfeitures, shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5.
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Distributions to a Participant shall be made in cash or through the
purchase of irrevocable nontransferable deferred commitments from an
insurer. Except as permitted by Regulations, the termination of the
Plan shall not result in the reduction of "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
This Plan and Trust may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.4(d) of the Plan. The Top Heavy requirements of Code Section 416
and of this Section 9.1 shall not apply in any year beginning after December 31,
2001, in which the Plan consists solely of a cash or deferred arrangement which
meets the requirements of Code Section 401(k)(12) and matching contributions
with respect to which the requirements of Code section 401(m)(11) are met.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued Benefits
and the Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy Plan (or whether any
Aggregation
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Group which includes this Plan is a Top Heavy Group). In addition, if
a Participant or Former Participant has not performed any services for
any Employer maintaining the Plan at any time during the one-year
period ending on the Determination Date, any accrued benefit or
account for such Participant or Former Participant shall not be taken
into account for the purposes of determining whether this Plan is a
Top Heavy Plan.
(b) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) the Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date.
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due on
or before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year.
(3) the present values of accrued benefits and the amounts of
account balances of an Employee as of the Determination Date
shall be increased by the distributions made with respect to the
Employee under the Plan and any plan aggregated with the Plan
under Code Section 416(g)(2) during the 1-year period ending on
the Determination Date. The preceding sentence shall also apply
to distributions under a terminated plan which, had it not been
terminated, would have been aggregated with the Plan under Code
Section 416(g)(2)(A)(i). In the case of a distribution made for a
reason other than separation from service, death, or disability,
this provision shall be applied by substituting "5-year period"
for "1-year period."
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a
part of the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by
another employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as distributions for the
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purposes of this Section. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are to
be treated as the same employer in (5) and (6) above, all
employers aggregated under Code Sections 414(b), (c), (m) and (o)
are treated as the same employer.
(c) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a
Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which a
Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
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In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is a Top Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years
ending on the Determination Date.
(d) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(e) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee, shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of
the Present Value of Accrued Benefit shall be determined as of the
most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in Code
Section 416 and the Regulations thereunder for the first and second
plan years of a defined benefit plan.
(f) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of: (1) the Present Value of Accrued
Benefits of Key Employees under all defined benefit plans included in
the group, and (2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group, exceeds sixty
percent (60%) of a similar sum determined for all Participants.
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant
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or Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge any Participant or
Employee at any time regardless of the effect which such discharge shall have
upon the Employee as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, and as otherwise
permitted by the Code and the Act, no benefit which shall be payable
out of the Trust Fund to any person (including a Participant or the
Participant's Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
(b) Subsection (a) shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, by reason of a loan made pursuant
to Section 7.4. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the amount
to be distributed as shall equal such indebtedness shall be paid to
the Plan, to apply against or discharge such indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be
given written notice by the Administrator that such indebtedness is to
be so paid in whole or part from the Participant's Combined Account.
If the Participant or Beneficiary does not agree that the indebtedness
is a valid claim against the Vested Participant's Combined Account,
the Participant or Beneficiary shall be entitled to a review of the
validity of the claim in accordance with procedures provided in
Sections 2.7 and 2.8.
(c) Subsection (a) shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order," a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
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(d) Subsection (a) shall not apply to an offset to a
Participant's accrued benefit against an amount that the Participant
is ordered or required to pay the Plan with respect to a judgment,
order, or decree issued, or a settlement entered into in accordance
with Code Sections 401(a)(13)(C) and (D).
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Code, the Act and the laws of the State of New York, other than its laws
respecting choice of law, to the extent not preempted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted
by law, it shall be impossible by operation of the Plan or of the
Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by
any other means, for any part of the corpus or income of any Trust
Fund maintained pursuant to the Plan or any funds contributed thereto
to be used for, or diverted to, purposes other than the exclusive
benefit of Participants, Former Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the contributions may
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not be returned to the Employer but any losses attributable thereto
must reduce the amount so returned.
(c) Except for Sections 3.5, 3.6, and 4.1(d), any contribution by
the Employer to the Trust Fund is conditioned upon the deductibility
of the contribution by the Employer under the Code and, to the extent
any such deduction is disallowed, the Employer may, within one (1)
year following the final determination of the disallowance, whether by
agreement with the Internal Revenue Service or by final decision of a
competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one
(1) year following the disallowance. Earnings of the Plan attributable
to the contribution may not be returned to the Employer, but any
losses attributable thereto must reduce the amount so returned.
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors, shall
not be responsible for the validity of any Contract issued hereunder or for the
failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.8 INSURER'S PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the Employer and
the insurer, an insurer which issues any Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.9 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participant's legal
representative, Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of the Plan, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Trustee and the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
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10.10 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan
including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference. In
general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the sole responsibility for the
administration of the Plan, including, but not limited to, the items specified
in Article II of the Plan, as the same may be allocated or delegated thereunder.
The Administrator shall act as the named Fiduciary responsible for communicating
with the Participant according to the Participant Direction Procedures. The
Trustee shall have the sole responsibility of management of the assets held
under the Trust, except to the extent directed pursuant to Article II or with
respect to those assets, the management of which has been assigned to an
Investment Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan as specified or allocated herein. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity.
10.12 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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10.13 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant to an
application for qualification filed by or on behalf of the Plan by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date that the Secretary of the Treasury may
prescribe, the Commissioner of Internal Revenue Service or the Commissioner's
delegate should determine that the Plan does not initially qualify as a
tax-exempt plan under Code Sections 401 and 501, and such determination is not
contested, or if contested, is finally upheld, then if the Plan is a new plan,
it shall be void ab initio and all amounts contributed to the Plan by the
Employer, less expenses paid, shall be returned within one (1) year and the Plan
shall terminate, and the Trustee shall be discharged from all further
obligations. If the disqualification relates to an amended plan, then the Plan
shall operate as if it had not been amended.
10.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE XI
MINIMUM DISTRIBUTION REQUIREMENTS
11.1 GENERAL RULES
11.1.1. Effective Date. The provisions of this Article will apply for
purposes of determining required minimum distributions for calendar years
beginning with the 2003 calendar year.
11.1.2. Coordination with Minimum Distribution Requirements Previously in
Effect. Required minimum distributions for 2002 will be determined under the
provisions of the Plan in effect prior to the effective date of this Article.
11.1.3. Precedence. The requirements of this Article will take precedence
over any inconsistent provisions of the Plan.
11.1.4. Requirements of Treasury Regulations Incorporated. All
distributions required under this Article will be determined and made in
accordance with the Treasury regulations under Code ss. 401(a)(9).
11.2 TIME AND MANNER OF DISTRIBUTION
11.2.1. Required Beginning Date. The Participant's entire interest will be
distributed, or begin to be distributed, to the Participant no later than the
Participant's required beginning date.
11.2.2. Death of Participant Before Distributions Begin. If the Participant
dies before distributions begin, the Participant's entire
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interest will be distributed, or begin to be distributed, no later than as
follows:
(a) If the Participant's surviving spouse is the Participant's
sole designated Beneficiary, distributions to the surviving spouse
will begin by December 31 of the calendar year immediately following
the calendar year in which the Participant died, or by December 31 of
the calendar year in which the Participant would have attained age 70
1/2, if later.
(b) If the Participant's surviving spouse is not the
Participant's sole designated Beneficiary, distributions to the
designated Beneficiary will begin by December 31 of the calendar year
immediately following the calendar year in which the Participant died.
(c) If there is no designated Beneficiary as of September 30 of
the year following the year of the Participant's death, the
Participant's entire interest will be distributed by December 31 of
the calendar year containing the fifth anniversary of the
Participant's death.
(d) If the Participant's surviving spouse is the Participant's
sole designated Beneficiary and the surviving spouse dies after the
Participant but before distributions to the surviving spouse begin,
this Section 11.2.2, other than Section 11.2.2(a), will apply as if
the surviving spouse were the Participant.
For purposes of this Section 11.2.2 and Section 11.4, unless section
11.2.2(d) applies, distributions are considered to begin on the Participant's
required beginning date. If section 11.2.2(d) applies, distributions are
considered to begin on the date distributions are required to begin to the
surviving spouse under section 11.2.2(a). If distributions under an annuity
purchased from an insurance company irrevocably commence to the Participant
before the Participant's required beginning date (or to the Participant's
surviving spouse before the date distributions are required to begin to the
surviving spouse under section 11.2.2(a)), the date distributions are considered
to begin is the date distributions actually commence.
11.2.3. Forms of Distribution. Unless the Participant's interest is
distributed in the form of an annuity purchased from an insurance company or in
a single sum on or before the required beginning date, as of the first
distribution calendar year distributions will be made in accordance with
Sections 11.3 and 11.4 of this Article. If the Participant's interest is
distributed in the form of an annuity purchased from an insurance company,
distributions thereunder will be made in accordance with the requirements of
Code ss. 401(a)(9) and the Treasury regulations.
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11.3 REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME
11.3.1. Amount of Required Minimum Distribution For Each Distribution
Calendar Year. During the Participant's lifetime, the minimum amount that will
be distributed for each distribution calendar year is the lesser of:
(a) the quotient obtained by dividing the Participant's account
balance by the distribution period in the Uniform Lifetime Table set
forth in section 1.401(a)(9)-9 of the Treasury regulations, using the
Participant's age as of the Participant's birthday in the distribution
calendar year; or
(b) if the Participant's sole designated Beneficiary for the
distribution calendar year is the Participant's spouse, the quotient
obtained by dividing the Participant's account balance by the number
in the Joint and Last Survivor Table set forth in section
1.401(a)(9)-9 of the Treasury regulations, using the Participant's and
spouse's attained ages as of the Participant's and spouse's birthdays
in the distribution calendar year.
11.3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined under
this Section 11.3 beginning with the first distribution calendar year and up to
and including the distribution calendar year that includes the Participant's
date of death.
11.4 REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH
11.4.1. Death On or After Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. If the
Participant dies on or after the date distributions begin and there is
a designated Beneficiary, the minimum amount that will be distributed
for each distribution calendar year after the year of the
Participant's death is the quotient obtained by dividing the
Participant's account balance by the longer of the remaining life
expectancy of the Participant or the remaining life expectancy of the
Participant's designated Beneficiary, determined as follows:
(1) The Participant's remaining life expectancy is calculated
using the age of the Participant in the year of death, reduced by
one for each subsequent year.
(2) If the Participant's surviving spouse is the Participant's
sole designated Beneficiary, the remaining life expectancy of the
surviving spouse is calculated for each distribution calendar
year after the year of the Participant's death using the
surviving spouse's age as of the spouse's birthday in
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that year. For distribution calendar years after the year of the
surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving
spouse as of the spouse's birthday in the calendar year of the
spouse's death, reduced by one for each subsequent calendar year.
(3) If the Participant's surviving spouse is not the
Participant's sole designated Beneficiary, the designated
Beneficiary's remaining life expectancy is calculated using the
age of the Beneficiary in the year following the year of the
Participant's death, reduced by one for each subsequent year.
(b) No Designated Beneficiary. If the Participant dies on or
after the date distributions begin and there is no designated
Beneficiary as of September 30 of the year after the year of the
Participant's death, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant's
death is the quotient obtained by dividing the Participant's account
balance by the Participant's remaining life expectancy calculated
using the age of the Participant in the year of death, reduced by one
for each subsequent year.
11.4.2. Death Before Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. Except as
provided in the adoption agreement, if the Participant dies before the
date distributions begin and there is a designated Beneficiary, the
minimum amount that will be distributed for each distribution calendar
year after the year of the Participant's death is the quotient
obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated Beneficiary,
determined as provided in Section 11.4.1.
(b) No Designated Beneficiary. If the Participant dies before the
date distributions begin and there is no designated Beneficiary as of
September 30 of the year following the year of the Participant's
death, distribution of the Participant's entire interest will be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(c) Death of Surviving Spouse Before Distributions to Surviving
Spouse Are Required to Begin. If the Participant dies before the date
distributions begin, the Participant's surviving spouse is the
Participant's sole designated Beneficiary, and the surviving spouse
dies before distributions are required to begin to the surviving
spouse under Section 11.2.2(a), this Section 11.4.2 will apply as
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if the surviving spouse were the Participant.
11.5 DEFINITIONS
11.5.1. Designated Beneficiary. The individual who is designated as the
Beneficiary under Section 6.2 of the Plan and is the designated Beneficiary
under Code ss. 401(a)(9) and section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.
11.5.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Participant's required beginning
date. For distributions beginning after the Participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin under Section 11.2.2. The required minimum distribution for
the Participant's first distribution calendar year will be made on or before the
Participant's required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the Participant's required beginning
date occurs, will be made on or before December 31 of that distribution calendar
year.
11.5.3. Life expectancy. Life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury regulations.
11.5.4. Participant's account balance. The account balance as of the last
valuation date in the calendar year immediately preceding the distribution
calendar year (valuation calendar year) increased by the amount of any
contributions made and allocated or forfeitures allocated to the account balance
as of dates in the valuation calendar year after the valuation date and
decreased by distributions made in the valuation calendar year after the
valuation date. The account balance for the valuation calendar year includes any
amounts rolled over or transferred to the Plan either in the valuation calendar
year or in the distribution calendar year if distributed or transferred in the
valuation calendar year.
11.5.5. Required beginning date. The date specified in Section 6.5(d)(1) of
the Plan.
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IN WITNESS WHEREOF, this Plan has been executed as of the day and year
first above written, to become effective January 1, 2005, except as otherwise
specifically provided herein.
JetBlue airways corporation
By: /s/ Vincent Stabile
-----------------------
Name: Vincent Stabile
Title: V P People
/s/ John D. Owen
---------------------------
John D. Owen, Trustee
/s/ Thomas E. Kelly
---------------------------
Thomas E. Kelly, Trustee
/s/ Vincent Stabile
---------------------------
Vincent Stabile, Trustee
