L.B. Foster Company
RETIREMENT SAVINGS PLAN
for
Non-Union Hourly Employees
Effective January 1, 1994
ESTABLISHMENT AND PURPOSE
WHEREAS, as of December 1, 1986, the L. B. Foster Company (the "Employer")
established the Retirement Savings Plan for Hourly Employees of Niles, Ohio.
WHEREAS, the Plan was amended effective April 1, 1990 to cover non-union
hourly employees at other locations and to change its name to that of the "L.B.
Foster Company Retirement Savings Plan for Non-Union Hourly Employees" (the
"Plan").
WHEREAS, the purpose of the Plan is to encourage savings by employees and
to provide them with security for retirement;
Now, therefore, the Employer hereby adopts this amended and restated Plan
effective January 1, 1994 as set forth herein. However, it is the intent of the
Employer that any provisions of the Plan pertaining to TRA 86 apply to this Plan
as in effect from January 1, 1989 to December 31, 1993.
The Plan, as amended herein, shall become effective January 1, 1994. The rights
to benefits of any employee whose employment terminated prior to January 1, 1994
shall be determined solely by the provisions of the employee benefit plan in
which he was covered, if any, as in effect at the time of such termination of
employment, unless specifically otherwise provided herein.
ARTICLE I
DEFINITIONS
1.1 Accrued Benefit means, with respect to any Participant at any time,
the then vested amount of his Participant Account.
1.2 Accumulated Profits means net income or profits of the Company for
prior years as determined in the same manner as Current Profits.
1.3 Actual Contribution Percentage means, for any Participant or group of
Participants, the average of the ratios (calculated separately for
each Participant in the group) of (a) Voluntary Employee Contributions
made to a Participant Account for the Plan Year, to (b) the
Participant's compensation for the Plan Year. For purposes of
determining the Actual Contribution Percentage, "compensation" means
the Participant's earnings as reported on Form W-2 plus any amounts
deferred under a plan qualifying under Code Section 125 or 401(k),
minus any amounts paid as severance payments, or amounts earned prior
to the participant becoming an Eligible Employee.
1.4 Actual Deferral Percentage means, for any Participant or group of
Participants, the average of the ratios (calculated separately for
each Participant in the group) of (a) Salary Deferral Contributions
made on behalf of the Participant for the Plan Year, to (b) the
Participant's compensation for the Plan Year. For purposes of
determining the Actual Deferral Percentage, "compensation" means the
Participant's earnings as reported on Form W-2 plus any amounts
deferred under a plan qualifying under Code Section 125 or 401(k),
minus any amounts paid as severance payments, or amounts earned prior
to the participant becoming an Eligible Employee.
1.5 Administrative Committee or Committee means the L. B. Foster Company
Employee Benefit Policy and Review Committee appointed by the Board of
Directors for the purposes of administering this Plan in accordance
with the provisions of Section 10.2 of Article X.
1.6 Affiliated Company means any subsidiary or affiliate of the Company,
whether or not such entities have adopted the Plan, and any other
entity which is a member of a Controlled Group.
1.7 Board of Directors means the Board of Directors of the L. B. Foster
Company.
1.8 Break in Service means any 12-consecutive-month period during which an
Employee completes fewer than 500 Hours of Service. The relevant
periods for eligibility and vesting purposes shall be determined in
the same manner as is used for determining Years of Service.
Solely for purpose of determining whether a Break in Service has occurred,
a Participant who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such Participant
but for such absence, or in any case in which such Hours cannot be
determined, eight Hours of Service per day of such absence. For
purposes of this Paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of
the Participant, (2) by reason of a birth of a child of the
Participant, (3) by reason of the placement of a child with the
Participant in connection with the adoption of such child by such
Participant, or (4) for purposes of caring for such child for a period
beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the Plan
Year in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases,
in the following Plan Year.
1.9 Code means the Internal Revenue Code of 1986 as amended from time to
time.
1.10 Company means the L. B. Foster Company, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania, as well
as any Affiliated Company which the Board of Directors has designated
as eligible to adopt the Plan, which has adopted this Plan and which
has agreed to be bound by the terms of the Plan and Trust Agreement;
provided, however, that an Affiliated Company shall become a Company
for purposes of the Plan upon, but not before, the date that such
Affiliated Company agrees to be bound by the terms of the Plan and
Trust, and employees of such Affiliated Company shall become Employees
for all purposes under the Plan upon, but not before, the date of such
agreement.
1.11 Company Contribution means the contribution the Company shall make to
Participant Accounts as provided in accordance with Section 4.1.
1.12 Company Contribution Portion means, as of any Valuation Date, the then
amount of the Company Contributions allocated to a Participant Account,
adjusted to reflect all credits and debits attributable to such
contributions which are made to such Participant pursuant to Section
5.3.
1.13 Compensation means the earnings paid by the Company to the Employee
during the Plan Year in the form of base salary, overtime payments,
vacation pay, bonuses or cash incentive pay, commissions, and any
elective deferrals under Section 125 or 401(k) of the Code, but
excluding all other payments.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for
plan years beginning on or after January 1, 1994, the annual
compensation of each employee taken into account under the plan shall
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, (indexed to $160,000 in 1997) as
adjusted by the Commissioner for increases in the cost of living in
accordance with section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period)
beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under section 401(a)(17) of the Code shall
mean OBRA '93 annual compensation limit set forth in this provision. If
compensation for any prior determination period is taken into account
in determining an employee's benefits accruing in the current plan
year, the compensation for that prior determination period is subject
to the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000 (indexed to $160,000 in 1997).
However, an Employee's compensation during a period of service in the
Uniformed Services shall be computed at the rate of the employee's
base monthly salary at the time the employee ceased active employment.
1.14 Controlled Group means the group of companies who, along with the
Company, is a member of a controlled group of corporations within the
meaning of Section 1563(a) of the Code, determined without regard to
Sections 1563(a)(4) and (e)(3)(C) of the Code, or a member with the
Company of a group of trades or businesses (whether or not
incorporated) under common control as determined by regulations issued
by the Secretary of the Treasury under Section 414(c) of the Code.
1.15 Current Profits means the amount of net income or profits of a Company
for the current Plan Year as determined by the Company either on an
estimated or final basis in accordance with sound accounting practices,
without deduction for taxes based upon income, or for contributions
made by the Company under this Plan. Such determination and Company
Contribution shall not be open to question by any Participant, either
before or after the Company Contribution has been made.
1.16 Disability means a Participant's incapacity to perform the duties of
his occupation or employment because of a medically determinable
physical or mental impairment which can be expected to be total and
permanent. Such determination of Disability shall be made by the
Administrative Committee with the advice of competent medical
authority.
1.17 Early Retirement Date means at the election of the Participant, the
first day of the month coincident with or following the Participant's
termination of employment with the Company, provided that the
Participant had attained age 55 and completed five Years of Service
prior to termination.
1.18 Effective Date means January 1, 1994.
1.19 Eligible Employee means a non-union hourly employee of the Company
employed at a location identified in Exhibit A, attached hereto, who is
not a leased employee within the meaning of Section 414(n)(2) and who
has completed one Year of Service and has attained his 21st birthday.
1.20 Employee means any individual in the employment of the Company or an
Affiliated Company which is part of the Controlled Group including
both leased employees within the meaning of Section 414(n)(2) of the
Code and any Employee who is also an officer or director of the
Company; provided, however, that it shall not include any person where
employment is governed by the terms of a collective bargaining
agreement under which retirement benefits were the subject of good
faith bargaining between the Company and Employee representatives,
unless such agreement expressly provides for the coverage of such
person in this Plan. Notwithstanding the foregoing, if leased
employees constitute less than 20% of the Company's non-highly
compensated work force within the meaning of Section 414(n)(5)(C)(ii)
of the Code, the term "Employee" shall not include those leased
employees covered by a plan described in Section 414(n)(5) of the Code
unless otherwise provided for by the terms of the Plan.
1.21 Fund or Investment Fund means the trust fund held by the Trustee in
accordance with the Trust Agreement.
1.22 Highly Compensated Employee means an individual who performs service
during the determination year and is described in one or more of the
following groups:
(a) An employee who is a 5% owner, as defined in section 416 (i) (1)
(A) (iii), at any time during the
determination year or the look-back year.
(b) An employee who receives compensation in excess of $80,000
(indexed in accordance with section 415 (d) during the
look-back year.)
For purposes of determining Highly Compensated Employees, the following
applies:
(a) The determination year is the plan year for which the
determination of who is highly compensated is being made.
(b) The look-back year is the 12-month period immediately preceding the
determination year.
(c) Compensation is compensation within the meaning of Code Section
415 (c) (3) including elective or salary reduction contributions
to a cafeteria plan, cash or deferred arrangement or tax-sheltered
annuity.
(d) Employers aggregated under Section 414 (b), (c), (a) or (o) of the
Code are treated as a single employer.
1.23 Hour of Service means:
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Company or any Affiliated
Company which is part of the Controlled Group during the
applicable computation period.
(b) Each hour for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Company or any Affiliated
Company which is part of the Controlled Group; provided, however,
that the same hours shall not be credited more than once, and such
hours shall be credited to the Employee for the computation period
to which the award or agreement relates rather than the period in
which it is awarded, agreed upon or paid.
(c) Each hour for which an Employee is paid, or entitled to payment,
by the Company or an Affiliated Company which is part of the
Controlled Group on account of a period of time during which no
duties are performed due to vacation, holiday, illness, incapacity
(including Disability, other than permanent Disability), layoff,
jury duty, military duty or leave of absence. In applying the
preceding sentence:
(1) No more than 501 Hours of Service are required to be
credited to an Employee on account of a single continuous
period during which the Employee performs no duties
(whether or not such period occurs within a single
computation period);
(2) An Hour of Service need not be credited if payment is
made or due under a plan maintained solely for the
purpose of complying with applicable worker's
compensation, unemployment compensation or disability
insurance laws; and
(3) Hours of Service are not required to be credited for a
payment which solely reimburses an Employee for medical
or medically related expenses incurred by an Employee.
(d) Each hour for periods of employment with any predecessor if the
Company maintains a plan of such a predecessor or, if such a plan
is not maintained, to the extent required under regulations under
Section 414(a)(2) of the Code. Notwithstanding the above, the
Board of Directors may amend the Plan to grant additional credit
for periods of employment with a predecessor employer or a
corporation, substantially all of the assets of which have been
acquired by the Company, provided that in amending the Plan to
grant such credit, the Board of Directors acts in a uniform and
nondiscriminatory manner with respect to all Employees similarly
situated.
(e) In addition to the Hours of Service credited above, an Employee
shall be credited with Hours of Service for any noncompensated
absence which is authorized by a Company or any Affiliated
Company which is part of the Controlled Group, in accordance with
its uniform leave policy, provided the Employee returns to active
employment following the termination of the period of authorized
absence. For this purpose, periods of absence to enter active
service with the Armed Forces of the United States shall be
counted in computing Hours of Service, if the Employee returns to
work for the Company or an Affiliated Company within the period
following his discharge or release to inactive duty from such
service during which his reemployment rights are guaranteed by
law.
(f) An Employee shall be credited with 45 Hours of Service for each
week during which he is entitled to credit for at least one Hour
of Service; provided, however, that if the Employee demonstrates
to the satisfaction of the Committee that his actual number of
Hours of Service in any week is greater than 45, he shall be
credited with such actual number of Hours of Service.
(g) For purposes of eligibility to participate in the Plan (Section
1.19) and vesting (Sections 7.2 and 12.6), hours meeting the
requirements of this Section but for the fact that the individual
was not an Employee during the period to which the hours would
have been credited (by reason of serving in a collective
bargaining unit) shall nevertheless be taken into account.
Furthermore, the basis upon which Hours of Service shall be
calculated and credited to computation period shall be determined
pursuant to Section 2530.200b-2(b) of the Department of Labor
Regulations.
1.24 Investment Manager means the person or entity appointed by the
Committee to invest assets in the Participant Accounts upon the
direction of the Participants.
1.25 Non-Highly Compensated Employee means an Employee of the Company who
has completed one Year of Service, has attained his 21st birthday and
who is not a Highly Compensated Employee.
1.26 Normal Retirement Age means age 65.
1.27 Normal Retirement Date means the first day of the month coinciding with
or next following the date on which a Participant attains his 65th
birthday.
1.28 Participant means an Eligible Employee who enters the plan in
accordance with Article II. Any such Eligible Employee shall remain a
Participant until all benefits due him have been distributed.
1.29 Participant Account or Account means, as of any Valuation Date, the sum
of the Salary Deferral Contribution Portion, the Voluntary Employee
Contribution Portion, any rollovers and the Company Contribution
Portion.
1.30 Plan means the L. B. Foster Company Retirement Savings Plan for
Non-Union Hourly Employees as herein set forth and as amended from time
to time.
1.31 Plan Year means the 12-consecutive-month period beginning with January
1 and ending with December 31.
1.32 Retirement means termination of employment with a pension (whether
immediate or deferred) under the provisions of a retirement plan of the
Company or an Affiliated Company, or election of an Early Retirement
Date or termination of employment upon or after attaining Normal
Retirement Age.
1.33 Salary Deferral Contribution means the amount that a Participant
designates as Salary Deferral Contributions in accordance with Section
3.1(a) of Article III.
1.34 Salary Deferral Contribution Portion means, as of any Valuation Date,
the then amounts of the Participant's total Salary Deferral
Contributions, adjusted to reflect all debits and credits attributable
to such contributions which are made to such Participant Account
pursuant to Section 5.3.
1.35 Spouse means the lawful Spouse of the Participant at the earlier of the
Participant's date of death or the date benefits commence to the
Participant under the Plan.
1.36 Trust Agreement means any agreement entered into between the Company
and any Trustee to carry out the purpose of the Plan.
1.37 Trustee means any corporation, individual or group of individuals
appointed by the Board of Directors to act as Trustee under a Trust
Agreement.
1.38 Trust Fund means the fund established pursuant to the Trust Agreement
to hold and invest assets accumulated under the Plan.
1.39 Valuation Date means a day no less frequent than once in each calendar
quarter and any other date as designated by the Administrative
Committee.
1.40 Voluntary Employee Contributions means the after-tax contributions made
by a Participant in accordance with the provisions of Section 3.1(b).
1.41 Voluntary Employee Contribution Portion means, as of any Valuation
Date, the then amounts of the Participant's Voluntary Employee
Contributions, adjusted to reflect all debits and credits attributable
to such contributions which are made to such Participant Account
pursuant to Section 5.3.
- -2731.42 Year of Service means each 12-consecutive-month period during which an
Employee completes at least 1,000 Hours of Service. For purposes of
eligibility to participate in the Plan, the relevant
12-consecutive-month period shall begin on an Employee's first day of
employment, or re-employment following a Break in Service, and each
anniversary thereof.
For purposes of determining an Employee's vested percentage, the
relevant 12-consecutive month period is the Plan Year. An Employee
shall not be entitled to any credit for partial Years of Service.
A Participant who incurs a Break in Service of five years or longer and
is re-employed shall have his Years of Service prior to re-employment
disregarded if:
(a) He did not have a vested interest in his Company Contribution as of
the day his Break in Service began; and
(b) The length of his Break in Service equals or exceeds his Years of
Service prior to the Break in Service.
An Employee who has had prior Years of Service disregarded will be
treated as a new Employee for all purposes of the Plan. In all other
cases, if a former Employee is re-employed by the Company, his prior
Years of Service will be aggregated with his Years of Service after the
Break in Service.
1.43 Uniformed Services means the Armed Forces, the Army National Guard and
the Air National Guard when engaged in active duty for training,
inactive duty training, or full-time National Guard duty, the
commissioned corps of the Public Health Service, and any other category
of persons designated by the President in time of war or emergency.
"Service in the uniformed services" means the
performance of duty on a voluntary or involuntary basis in a uniformed
service under competent authority and includes active duty, active duty
for training, initial active duty for training, inactive duty training,
full-time National Guard duty, and a period for which a person is
absent from a position of employment for the purpose of an examination
to determine the fitness of the person to perform any such duty. In no
event shall the total length of service credited for service in the
uniformed services exceed five (5) years.
ARTICLE II
PARTICIPATION
2.1 Participation.
(a) Initial Participation. An Eligible Employee automatically becomes
a Participant in the Plan on the first day of the month following
the month in which an Employee first becomes an Eligible Employee.
An Eligible Employee may elect to make Salary Deferral
Contributions and Voluntary Employee Contributions as of the first
day of the month following the first day on which such Employee
becomes an Eligible Employee, provided that the Employee
authorizes the change in a manner approved by the Administrative
Committee.
(b) Following a Break in Service. A Participant who incurs a Break in
Service shall become an Eligible Employee on the first day of the
month coincident with or next following his completion of one Hour
of Service subsequent to such Break in Service.
2.2 Participant Contributions. A Participant may elect to make Salary
Deferral Contributions and Voluntary Employee Contributions to
the Plan. Such Participant's Salary Deferral Contributions and
Voluntary Employee Contributions shall begin on the first day of
the month, provided that the Employee authorizes the change in a
manner approved by the Administrative Committee.
2.3 Provisions Relating to Leased Employees.
(a) Safe-Harbor. Notwithstanding any other provisions of the Plan, for
purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements
of Section 414(n)(3) of the Code, the Eligible Employees of the
Company shall include individuals defined as Employees in Section
1.20.
(b) Participation and Accrual. A leased employee within the meaning of
Section 414(n)(2) of the Code shall not become a Participant in,
and shall not accrue benefits under, the Plan based on service as
a leased employee.
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.1 Contributions.
(a) Salary Deferral Contributions. Each Participant may elect to
designate as his Salary Deferral Contribution each payroll period,
a rate of not less than 2% nor more than 10% of his Compensation,
in multiples of 1% for such payroll period. Salary Deferral
Contributions for any calendar year are limited to the amount
specified under Code Section 402(g)(5).
(b) Voluntary Employee Contributions. A Participant who is making a
minimum of 5% Salary Deferral Contributions may elect to
contribute Voluntary Employee Contributions, provided that the sum
of the Participant's Salary Deferral Contributions and Voluntary
Employee Contributions in any Plan Year shall not exceed 15% of
his Compensation. Voluntary Employee Contributions are made on an
after-tax basis.
3.2 Payroll Deductions. Participant contributions shall be made through
reductions in the amount otherwise payable in cash to the Participant
as authorized by the Participant.
3.3 Designation of the Amount of Contributions.
(a) Initiation of Contributions. An Eligible Employee may initiate
contributions to the Plan by following the procedures approved by
the Administrative Committee. The designated rate of contribution
shall be effective on the first day of the month following the
date the Employee authorizes the contributions in a manner
approved by the Administrative Committee.
(b) Change in Contributions. A Participant may change his rate of
contributions. Any changes in the rate of contributions shall
become effective on the first day of the month following the date
the Employee authorizes the change in a manner approved by the
Administrative Committee.
3.4 Suspension of Participant Contributions. A Participant may elect
to suspend his contributions. Such voluntary suspension shall
become effective on the first day of the month following the date
the Employee authorizes the suspension in a manner approved by
the Administrative Committee. If a Participant elects to suspend
his contributions in accordance with the provisions of this
Section 3.4, he shall not be eligible to resume his contributions
until the first day of the fourth month following the month in
which his suspension became effective. When the Participant
elects to resume his contributions, he shall do so in a manner
approved by the Administrative Committee. A Participant shall not
be permitted to make up suspended contributions. Participant
contributions shall be suspended automatically for any payroll
period in which the Participant is not in receipt of Compensation
and his contributions shall not resume until the first day of the
month following the month in which he receives Compensation.
However, in the case of a temporary layoff, contributions shall
resume immediately upon return to active employment.
A Participant who is absent from employment on account of an authorized
unpaid leave of absence or a military leave shall automatically have
Participant contributions suspended during such leave. Such suspension
shall become effective on the date such authorized leave begins and
shall remain effective for the entire period of such leave. Such a
Participant shall be eligible to resume contributions immediately upon
return to active employment. Upon reemployment, a Participant serving
in the Uniformed Services shall be permitted to make up contributions
for the period served based on their election in effect immediately
before the leave. The period of repayment is subject to good faith
negotiations between the Company and the Employee.
3.5 Reduction in Salary Deferral Contribution. For any Plan Year, the
Actual Deferral Percentage for Highly Compensated Employees may not exceed the
greater of Test I or Test II below:
Test I: 125% of the Actual Deferral Percentage for Non-Highly
Compensated Employees;
Test II: The lesser of (a) 200% of the Actual Deferral Percentage for
Non-Highly Compensated Employees; or (b) such Actual Deferral
Percentage for Non-Highly Compensated Employees plus two
percentage points.
The plan will take into account the actual deferral ratios of all
eligible employees for purposes of the actual deferral percentage (ADP)
test in Section 401(k). For this purpose, an eligible employee is any
employee who is directly or indirectly eligible to make a cash or
deferred election under the plan for all or a portion of a plan year
and includes: an employee who would be a plan participant but for the
failure to make required contributions; an employee whose eligibility
to make elective contributions has been suspended because of an
election (other than certain one-time elections) not to participate, a
distribution, or a loan; and, an employee who cannot defer because of
the Section 415 limits on annual additions. In the case of an eligible
employee who makes no elective contributions the deferral ratio that is
to be included in determining the ADP is zero.
An elective contribution will be taken into account under the actual
deferral percentage test of Section 401(k)(3)(A) of the Code for a plan
year only if it is allocated to the employee as of a date within that
plan year. For this purpose, an elective contribution is considered
allocated as of a date within a plan year if the allocation is not
contingent on participation or performance of services after such date
and the elective contribution is actually paid to the trust no later
than 12 months after the plan year to which the contribution relates.
For purposes of determining whether a plan satisfies the actual
deferral percentage test of Section 401(k), all elective contributions
that are made under two or more plans that are aggregated for purposes
of Section 401(a)(4) or 410(b) (other than Section 410(b)(2)(A)(ii))
are to be treated as made under a single plan and if two or more plans
are permissively aggregated for purposes of Section 401(k), the
aggregated plans must satisfy Sections 401(a)(4) and 410(b) as though
they were a single plan. In calculating the actual deferral percentage
for purposes of Section 401(k), the actual deferral ratio of a highly
compensated employee will be determined by treating all cash or
deferred arrangements under which the highly compensated employee is
eligible (other than those that may not be permissively aggregated) as
a single arrangement.
3.6 Prospective Reduction of Salary Deferral Contributions. The
Committee shall determine periodically whether the amount of
Salary Deferral Contributions elected by the Highly Compensated
Employees would exceed the permissible Actual Deferral Percentage
(taking into account Salary Deferral Contributions elected for
the month in question continues in effect for the remainder of
the Plan Year). If so, the amount of Salary Deferral
Contributions allowed to be made on behalf of Highly Compensated
Employees with respect to the remainder of the Plan Year shall be
reduced. The Highly Compensated Employees with respect to whom
such reduction shall be made and the amount of such reduction
shall be determined by reducing the maximum allowable Salary
Deferral Contribution under Section 3.1 from 10% of Compensation
to such percentage which will, when applied to all Highly
Compensated Employees who authorized such Salary Deferral
Contributions, result in the Actual Deferral Percentage set forth
in Section 3.5 not being exceeded. Once a reduction has been made
hereunder, it shall remain in effect for the duration of the Plan
Year unless the Committee determines that it is no longer
necessary in order for the Actual Deferral Percentage limitation
to be met.
3.7 Retrospective Reduction of Salary Deferral Contributions. In the
event that, notwithstanding Section 3.6 hereof, it is determined
by the Committee during any Plan Year or prior to the due date,
including extensions, for filing the Company's federal income tax
return for such Plan Year, that the limitations contained in
Section 3.5 have been exceeded for that Plan Year then the Salary
Deferral Contributions that have been made on behalf of the
Highly Compensated Employees shall be reduced in the manner
prescribed in Section 3.6 above and recharacterized as Voluntary
Employee Contributions. Any earnings accrued on the amount by
which a Participant's Salary Deferral Contributions are reduced
shall be treated as earnings attributable to the Participant's
Voluntary Employee contributions. Recharacterized excess
contributions will remain subject to the nonforfeitability
requirements and distribution limitations that apply to elective
contributions.
Failure to correct excess contributions by the close of the Plan Year
following the Plan Year for which they were made will cause the cash or
deferred arrangement to fail to satisfy the requirements of Section 401
(k) (3) for the Plan Year for which the excess contributions were made
and for all subsequent years they remain in the trust. The Employer
will be liable for a 10% excise tax on the amount of excess
contributions unless they are corrected within 2-1/2 months after the
close of the Plan Year for which they were made.
Recharacterized excess contributions will remain subject to the
nonforfeitability requirements and distribution limitations that apply
to elective contributions.
3.8 Remittance of Participant Contributions. Amounts deducted as
Participant contributions shall be remitted to the Trustee as soon as
practicable after the end of each month.
3.9 Rollover Contributions. A Participant may transfer to the Plan a
qualified total distribution, as defined in Section 402(a)(5)(E)(i) I
or II of the Code, provided that such distribution is from a plan which
meets the requirements of Section 401(a) of the Code ("Other Plan") and
that the following conditions are satisfied:
(a) The amount of the rollover must be in the form of cash or cash
equivalent;
(b) The rollover occurs on or before the 60th day following the
Employee's receipt of the distribution from the Other Plan; and
(c) The amount of the rollover does not exceed the maximum rollover
amount permitted under the provisions of Section 402(a)(5)(B) of
the Code, which limit shall amount to the fair market value of all
property received in such distribution reduced by Employee
contributions, as defined in Section 402(a)(5)(E)(ii) of the Code.
A Participant, who has previously transferred a distribution from
another plan into an individual retirement account ("IRA"), may roll
over the amount of such distribution, plus earnings thereon, from the
IRA to the Plan; provided that such distribution is transferred to the
Plan as a Rollover Contribution on or before the 60th day following
receipt thereof from the IRA, and such Rollover Contribution complies
with Section 408(d)(3) of the Code.
The Administrative Committee shall develop such procedures and may
require such information from a Participant desiring to make a Rollover
Contribution as it deems necessary or desirable to determine that the
proposed Rollover Contribution will meet the requirements of this
Section 3.9. Upon approval by the Administrative Committee, the amount
of the Rollover Contribution shall be deposited in the Plan and shall
be credited to the Participant's rollover account. The amount of the
Rollover Contribution credited to such Account shall be 100% vested in
the Participant and shall share in the appropriate investment earnings.
ARTICLE IV
COMPANY CONTRIBUTIONS
4.1 Company Contribution. The Company shall contribute to each
Participant's Account an amount equal to $.12 for each hour worked for
each Eligible Employee (excluding employees of Georgetown,
Massachusetts). Such Contribution shall continue for as long as the
Eligible Employee is receiving Compensation from the Company.
Eligible Employees of Georgetown, Massachusetts, shall have a company
matching contribution of $.50 for every $1.00 contributed by the
Eligible Employee, up to the first 5% of the Compensation of the
Eligible Employee. This matching contribution will only be made if the
Eligible Employee contributes to the Plan.
Upon reemployment of an Employee serving in the Uniformed Services, the
Employer will make the Company Contribution to the Plan on behalf of
the Employee, as if the Employee had continued active employment and
worked 40 hours per week.
4.2 Remittance and Investment of Company Contributions. The Company
Contribution as described under Section 4.1 shall be transmitted to the
Trustee as soon as practicable after the end of each calendar month.
4.3 Forfeitures of Company Contributions. Amounts forfeited by Participants
in accordance with Section 7.2 shall be applied to reduce future
Company Contributions under the Plan.
4.4 Limitations on Contributions. Contributions made by the Company on
behalf of any Participant shall be limited to the maximum amounts
permitted under the Code as follows:
(a) The annual addition to any Participant's Account, when added
to similar additions under other defined contribution plans
maintained by the Company and Affiliated Companies, shall not
exceed the lesser of $30,000 (or such other amount as
determined by the Secretary of the Treasury) or 25% of such
Participant's annual limitation compensation.
.
(b) Section 415(e) of the Code prescribes aggregate limitations
for those Employees who participate in both the Plan and a
defined benefit plan. If, for any Plan Year, the limitations
prescribed in Section 415(e) of the Code are exceeded, the
benefit payable under the pension plan shall be reduced to
meet the limitations.
(c) In the event that it is determined that the contributions made
on behalf of any Participant for any Plan Year are in excess
of the limitations set forth in this Section 4.4, such
contributions shall be reduced in the following order:
(1) Voluntary Employee Contributions;
(2) Salary Deferral Contributions;
to the extent necessary to bring such contributions within the
limitation set forth herein.
(d) Definitions. For purposes of this Section 4.4, the following
definitions shall apply:
(1) Annual additions shall mean the sum of Company
contributions, Salary Deferral Contributions and
Voluntary Employee Contributions.
(2) Compensation means the amount as determined under
Regulation Section 1.415-2. No more than $160,000 (as
of 1/1/97, indexed annually) of such Compensation
shall be taken into account for any Plan Year
hereunder, provided that such amount shall be
adjusted annually for increases in the cost of living
in accordance with Section 415(d) of the Code.
4.5 Company Contribution Limitation. For any Plan Year, the Actual
Contribution Percentage for the Highly Compensated Employees may not
exceed the greater of Test I or Test II below:
Test I: 125% of the Actual Contribution Percentage for all eligible
Non-Highly Compensated Employees;
Test II: The lesser of (a) 200% of the Actual Contribution
Percentage for all eligible Non-Highly Compensated
Employees; or (b) the Actual Contribution Percentage for
all eligible Non-Highly Compensated Employees plus two
percentage points.
For purposes of calculating the Actual Contribution Percentage the Plan
will take into account that actual contribution ratios of all eligible
employees .
For purposes of determining whether a plan satisfies the actual
contribution percentage test of Section 401(m), all employee and
matching contributions that are made under two or more plans that are
aggregated for purposes of Section 401(1)(4) and 410(b) (other than
Section 410(b)(2)(A)(ii) are treated as made under a single plan. If
two or more plans are permissively aggregated for purposes of Section
401(m), the aggregated plans must also satisfy Section 401(a)(4) and
410(b) as though they were a single plan.
The actual contribution ratio of a Highly Compensated employee will be
determined by treating all plans subject to Section 401(m) under which
the Highly Compensated employee is eligible (other than those that may
not be permissively aggregated) as a single plan.
4.6 Prospective Reduction of Contributions. In the event that it is
determined that the amount of Voluntary Employee Contributions made to
the Participant Accounts of the Highly Compensated Employees would
cause the Actual Contribution Percentage described in Section 4.5 to be
exceeded (taking into account the
contributions made during the prior months of the Plan Year and
assuming that the rate of contributions continues in effect for the
remainder of the Plan Year), then the amount of Voluntary Employee
Contributions allowed to be made by and on behalf of Highly Compensated
Employees with respect to such month shall be reduced. The Highly
Compensated Employees with respect to whom such reduction shall be made
and the amount of such reduction shall be determined by reducing the
maximum allowable Voluntary Employee Contributions to the extent that
the Actual Contribution Percentage set forth in Section 4.5 is not
being exceeded.
4.7 Retrospective Reductions of Contributions. In the event that,
notwith- standing Section 4.6 hereof, it is determined by the
Committee during any Plan Year or prior to the due date,
including extensions, for filing the Company's federal income tax
return for such Plan Year, that the Actual Contribution
Percentage, as initially determined, has been exceeded, then the
Voluntary Employee Contributions that have been made by and on
behalf of the Highly Compensated Employees shall be returned to
the Participant, along with the earnings associated with such
contributions. The amount to be returned shall be determined by
first reducing the Participant(s) in the group of Highly
Compensated Employees with the highest individual Actual
Contribution Percentage(s) to the next lower one percent, and
then repeating such reduction with respect to such Participant(s)
to the extent necessary to assure that the limitation will be
satisfied for the Plan Year.
The amount of excess aggregate contributions for a plan year shall be
determined only after first determining the excess contributions that
are treated as employee contributions due to recharacterization.
The distribution of excess aggregate contributions will include the
income allocable thereto. The income allocable to the excess aggregate
contributions includes income for the plan year for which the excess
aggregate contributions were made and income for the period between the
end of the plan year and the date of distribution. Failure to correct
excess aggregate contributions by the close of the plan year following
the plan year for which they were made will cause the plan to fail to
satisfy the requirements of Section 401(a)(4) for the plan year for
which the excess aggregate contributions were made and for all
subsequent years they remain uncorrected. Also, the employer will be
liable for a 10% excise tax on the amount of excess aggregate
contributions unless they are corrected within 2-1/2 months after the
close of the plan year for which they were made.
The distribution of excess aggregate contributions shall be made on the
basis of the respective portions of such amounts attributable to each
highly compensated employee.
4.8 Aggregate Limit on Actual Deferral Percentages. In the event that Test
II is used under both Sections 3.5 and 4.5, the aggregate limit may not
exceed the greater of (a) or (b):
(a) The sum of (1) and (2) as follows:
(1) 125% of the greater of (A) the Actual Deferral Percentage
in Section 3.5 of the group of Non-Highly Compensated
Employees eligible to make Salary Deferral Contributions
for the Plan Year, or (B) the Actual Contribution
Percentage of the group of Non-Highly Compensated
Employees eligible to receive Company Contributions in
the Plan Year; plus
(2) Two plus the lesser of (a)(1)(A) or (a)(1)(B) above. In
no event, however, shall this amount exceed 200% of the
lesser of (a)(1)(A) or (a)(2)(B).
(b) The sum of (1) and (2) below:
(1) 125% of the lesser of (A) the Actual Deferral Percentage
in Section 3.5 of the group of Non-Highly Compensated
Employees eligible to make Salary Deferral Contributions
for the Plan Year, or (B) the Actual Contribution
Percentage of the group of Non-Highly Compensated
Employees eligible to receive Company Contributions in
the Plan Year; plus
(2) Two plus the greater of (b)(1)(A) or (b)(1)(B) above. In no event,
however, shall this amount exceed 200% of the greater of (b)(1)(A) or
(b)(1)(B).
In the event that the aggregate limit described in this Section 4.8 is
exceeded at the end of the Plan Year, certain Participants in the group
of Highly Compensated Employees may have certain of their contributions
returned, along with the earnings associated with such contributions,
in accordance with the provisions of Section 4.7.
The distribution of such excess contributions, along with the earnings
associated with such contributions, will be made by the March 15
following the calendar year in which the excess contributions were
made.
4.9 Return of Contributions. In the event that a contribution is made to the
Plan:
(a) Under a mistake of fact; or
(b) Conditioned upon deduction of the contribution under Code Section
404 and such deduction is disallowed, the contribution shall be
returned to the Company within one year after the payment of the
contribution or the disallowance of the deduction (to the extent
disallowed), whichever is applicable, in such form as may be
prescribed by regulations issued by the Secretary of the Treasury.
19
Amendment #3 dated 1/1/97 replaces all prior
In the event that, notwithstanding Section 4.8 hereof, it is
determined by the Committee during any Plan Year or prior to the
due date, including extensions, for filing the Company's federal
income tax return for such Plan Year, that the Actual Contribution
Percentage, as initially determined, has been exceeded, then the
matching contributions and Voluntary Employee contributions that
have been made by and on behalf of the Highly Compensated
Employees shall be returned to the Participant, along with the
earnings associated with such contributions. The amount to be
returned shall be determined by first reducing the Participant(s)
in the group of Highly Compensated Employees with the highest
individual Actual Contribution Percentage(s) to the next lower one
percent, and then repeating such reduction with respect to such
Participant(s) to the extent necessary to assure that the
limitation will be satisfied for the Plan Year. Notwithstanding
anything in the above to the contrary, a Highly Compensated
Employee who is not yet vested in accordance with Section 7.1
shall forfeit the amount of matching contributions instead of
having such contributions paid to him.
4.10 Contributions Limited to Amount Deductible. Company Contributions,
including Salary Deferral Contributions shall not be made to the Plan
to the extent they would exceed the maximum amount deductible by the
Company under Code Section 404.
In the event that it is determined that the deductible limits would be
exceeded, contributions shall be reduced in such manner as the Company
shall prescribe.
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Participant Accounts. Each Participant Account shall separately account
for the value of:
(a) Salary Deferral Contributions;
(b) Voluntary Employee Contributions;
(c) Company Contributions; and
(d) Any rollover deposits.
Each such account shall reflect the income, losses, appreciation and
depreciation attributable to such items as are allocated to such
account. Separate investments are not required to be maintained for any
Participant Account.
5.2 Valuation of Assets. At each Valuation Date in which the Plan is in
operation, the Trustee and/or the Investment Company shall determine
the total fair market value of all assets then held in the Fund.
5.3 Investment of Contributions. Each Participant shall direct that
his Participant Account be invested in one or more of the
Investment funds held by the Trustee. The Employer may enter into
a written agreement with one or more Investment Manager(s),
pursuant to which such Investment Manager(s) may permit the
Participants to direct the investment of the Participants'
Accounts held in the Trust in one or more group or common trust
funds managed by the Investment Manager(s). Such funds may
include, but shall not be limited to (a) Growth and Income Fund,
(b) Pure Growth Fund (c) Equity Fund, (d) GIC Fund, (e) Bond
Fund, and (f) Money Market Fund.
The Employer may, from time to time, make available additional or
alternative investment funds, or replace or suspend any one of the
above funds.
In the absence of a designation by the Participant, contributions shall
be invested in the Money Market Fund.
The Investment Manager(s), at the Participant's request and within one
month after an Employee becomes a Participant, shall provide each
Participant with a complete description of the Funds.
No less frequently than once each calendar quarter, the investment
returns attributable to each investment fund are allocated to each
Account within the investment fund in the same proportion that such
Account balance for such month bears to the total Account balances for
such month. The Account balance shall be determined by debiting the
prior quarter's Account balance for any withdrawals, transfers out of
such Account and loans made from the Account
and crediting the prior quarter's Account balance with transfers to the
Account and loans repaid to the Account.
5.4 Change in Future Investment Elections. Any investment election given by
a Participant for investment of the contributions will continue in
effect until changed by the Participant. A Participant shall notify the
Administrative Committee or its designee of the change as prescribed by
the Committee.
5.5 Conversion of Past Investment Elections. A Participant may elect to
transfer all or a portion of the value of his Account invested in a
fund in accordance with uniform and nondiscriminatory rules prescribed
by the Committee or its designee effective as of the date the Trustee
makes such transfer.
5.6 Effect of Re-employment. Subject to the provisions of Article X, if a
Participant terminates his employment and begins to receive a
distribution under this Plan and, prior to the time his Participant
Account shall have been fully distributed to him, he is re-employed by
the Company, then, in such event, his right to further payments from
his Participant Account shall cease and such undistributed amount shall
be retained for his benefit until he thereafter terminates his
employment with the Company.
5.7 Statements of Participant Accounts. Not less frequently than once in
each Plan Year, each Participant shall receive a statement of his
account balance and his nonforfeitable right, if any, to his account
balance.
ARTICLE VI
WITHDRAWALS AND LOANS
6.1 Election and Form of Withdrawal. A Participant may apply for a hardship
withdrawal from his Account by authorizing the withdrawal in a manner
approved by the Administrative Committee. Such an election shall take
effect on the first day of a month following completion of required
procedures. The amount withdrawn shall be paid to the Participant in
the form of a single cash payment, and no amount withdrawn may be
repaid to the Plan. No more than one withdrawal may be made in any
12-month period and no withdrawal shall be less than $1,000.
6.2 Requirements for Hardship Withdrawal. The withdrawal must be for
an immediate and heavy financial need of the Participant for
which funds are not reasonably available from other resources of
the Participant. If approved by the Plan Administrator, such
withdrawal shall be equal to the lesser of (i) the amount
required to be distributed to meet the need created by the
hardship, or (ii) the Participant's Salary Deferral Contribution
Portion. The determination of the existence of financial hardship
and the amount required to be distributed to meet the need
created by the hardship must be made in a uniform and
nondiscriminatory manner. The circumstances which may warrant
approval of a Participant's application for a hardship withdrawal
are:
a) Medical expenses (to the extent not otherwise reimbursed under any
other medial care programs)
incurred by the Participant or his dependents;
(b) Purchase of a principal residence for the Employee;
(c) Tuition for post-secondary education, but only for the next quarter
or semester; and
(d) Prevention of eviction or mortgage foreclosure.
The conditions under which a Participant may be deemed to lack other
resources are as follows:
(a) The hardship withdrawal cannot exceed the amount needed;
-273
(b) The Participant must have obtained all distributions (except
hardship withdrawal) and all nontaxable loans available from all
of the Employer's plans;
(c) The Participant's contributions under all plans must be suspended
for twelve months after the hardship withdrawal; and
(d) The dollar limit on pre-tax contributions for the year after the
hardship withdrawal must be reduced by the amount of pre-tax
contributions made during the year in which the hardship occurred.
23
Amendment #5 dated 1/1/99 replaces all prior
0 If the Participant is married, spousal consent is required.
6.3 Source of Withdrawal Proceeds. The Fund from which a withdrawal is
made shall be determined by the Committee after consultation with the
Participant.
6.4 Restriction on Amount of Withdrawal if a Loan is Outstanding. In no
event will a withdrawal from the Plan be permitted in an amount
greater than the value of the Participant's vested interest,
determined as of the Valuation Date immediately preceding withdrawal,
less 200% of the then outstanding loan balance (including principal
and interest) of any loan granted to the Participant.
6.5 Amount of Loan. A Participant (including those on leave of absence,
long-term disability, or who are
currently employees on a salaried basis but who, prior to becoming
salaried employees, were Participants in the Plan) may obtain a loan
from his Account, excluding the portion of his Account attributable to
Company Contributions, in which he is not vested. The minimum amount
of any loan shall equal $1,000. The maximum amount of any loan, when
added to the outstanding principal balance of any other loan, shall in
no event exceed 50% of a Participant's vested Account balance up to a
maximum of $50,000 (reduced by the excess, if any, of the highest out-
standing loan balance during the preceding 12-month
period over the outstanding balance of loans from the Plan on the date
the loan was made).
6.6 Application for a Loan. A Participant may apply for a loan by
completing the procedures approved by the Administrative
Committee. Unless an exception to the normal processing is
requested by the Participant and is approved by the Committee,
loans are approved as of the first day of any calendar quarter
following procedures as approved by the Administrative Committee.
The amount borrowed by the Participant shall be paid to him as
soon as administratively possible after the first day of the
calendar quarter. The Spouse of a married Participant must
consent to the loan and to the possible reduction of benefits
pursuant to Section 6.9.
6.7 Promissory Note. As evidence of a loan, a Participant shall provide a
promissory note to the Trustee in a form prescribed by the Committee.
The rate of interest shall be the sum of the prime rate at a bank
specified by the Committee plus one-half percent. Such interest rate
shall remain fixed for the full term of the loan. Payments due under
the note shall be level amortization payments, payable no less
frequently than quarterly.
6.8 Source of Loan Proceeds. A loan to a Participant shall be made from the
Participant's Account, and such Account shall be reduced by the amount
of any unpaid loan. In the event that a Participant's Account is
invested in more than one investment fund, the investment fund(s) from
which the loan shall be made shall be determined by the Participant.
6.9 Security. As security for a loan, a Participant's promissory note shall
be secured by his Account in the Plan. A married Participant must
provide the Committee with the written consent of his Spouse in order
to secure the loan with his Account. If, before a loan is repaid, the
Participant's employment is terminated and he or his beneficiary
becomes entitled to a distribution from the Plan, the unpaid principal
balance of the loan shall be offset from the distribution otherwise
payable.
6.10 Administrative Charge. An administrative charge shall be deducted from
the Participant's Account for the initial processing of the loan and
also with respect to each Plan Year in which he has a loan balance
outstanding.
6.11 Repayment. A Participant's note ordinarily shall be repaid by
payroll deduction in such amounts as are determined by the
Committee. Each payment shall be credited to the Participant's
Account and shall be invested in accordance with the
Participant's investment designation in effect under Section 5.3
at the time the payment is so credited. A loan shall be required
to be repaid within 60 months from the date on which the loan
originally is made; provided, however, that the repayment period
for a loan that is used to acquire a dwelling unit which is to be
used as a principal residence of the Participant may be as long
as 360 months from the date on which the loan is originally made.
Loans may be repaid without penalty at any time. In addition to
regularly scheduled payments, partial payments made to reduce the
outstanding loan balance may be made once each calendar year.
6.12 Default. If a Participant shall fail to make any installment
payment or the annual administrative charge on a loan within 30
days after the due date of such payment, then the Committee will
accelerate repayment of the loan and demand immediate repayment
of the principal and interest due. If the Participant fails to
comply within 30 days, the Committee shall reduce the
Participant's vested Account balance, as permitted by law, in
order to recover the outstanding loan balance plus interest due.
At the time of disbursement of benefits, the balance, including
interest, will be deducted from the disbursement.
6.13 Loan Administration. The loan provisions under this Article VI
shall be administered by the Committee.
ARTICLE VII
VESTING AND TERMINATION OF EMPLOYMENT
7.1 Salary Deferral Contributions and Rollover Deposits. A
Participant will at all times be 100% vested in his Participant
Account attributable to Salary Deferral Contributions, Voluntary
Employee Contributions and rollover deposits.
7.2 Company Contributions. A Participant shall vest in his account
balance attributable to Company Contributions in accordance with
the following schedule:
Years of Service Vesting Percentage
-------------------- ------------------
fewer than 5 years 0%
5 years or more 100%
Any amounts not vested upon termination will be forfeited at the end of
the Plan Year following such Participant's termination unless the
Participant returns to employment prior to incurring a five-year long
Break in Service, in which case forfeited amounts shall be restored.
Notwithstanding the above paragraph, if a Participant terminates his
employment by reason of Retirement, Disability or death, the
Participant's entire Participant Account shall be nonforfeitable. A
Participant's entire Participant Account shall also become
nonforfeitable upon his attainment of Normal Retirement Age.
7.3 Distributions. Upon a Participant's termination for any reason other
than Retirement, Disability or
death, he may elect to receive a distribution of the portion of his
vested Account balance. If the Participant's Accrued Benefit is $3,500
($5,000 on or after 1/1/98) or less, the distribution shall be made
within a reasonable period after the Participant's termination of
employment but in no event later than April 1 of the calendar year
following the end of the Plan Year in which his Break in Service
occurs. The Participant shall have the sole right to elect the form of
distribution subject to the terms and conditions of Article IX.
Upon the occurrence of a Break in Service following a Participant's
termination of employment for any reason other than Retirement,
Disability or death, a Participant whose Account balance is $3,500
($5,000 on or after 1/1/98) or less shall receive a total distribution
of the balance of his vested Account balance as of the date valued by
the Trustee following the date of the Break in Service. The
distribution shall be subject to the terms and conditions of Article
IX. Payments to the Participant shall commence not later than the
Valuation Date next following the Participant's 65th birthday and any
Participant who has completed at least five Years of Service may elect
to begin payments on or after the Valuation Date next following his
55th birthday.
7.4 Distributions Prior to a Break in Service. A Participant whose
employment is terminated prior to his Retirement and who is
entitled to a cash lump sum distribution may elect to receive the
entire vested Account balance as of the date valued by the
Trustee following his termination of employment without regard to
whether he has incurred a Break in Service. In such event, that
portion of his Account which is not vested as of the date of
distribution shall be forfeited; provided, however, that if the
Participant resumes employment covered under the Plan, the
portion of his Account which was attributable to Company
Contributions as of the date of distribution, unadjusted for any
subsequent gains or losses, shall be restored.
ARTICLE VIII
TRANSFER
If a Participant shall cease to be an Eligible Employee of the Company, but
shall continue to be employed by the Company or any other corporation which is a
member of a controlled group of corporations (determined in accordance with
Section 414(b) of the Code), his contributions shall cease, the Company
Contributions made on his behalf shall cease, and such Participant shall have
the right to make withdrawals as provided in Article VI and distributions as
provided in Article IX. When such Participant subsequently ceases to be an
Employee, the extent to which he shall be entitled to his Participant Account
shall be determined in accordance with the provisions of Article VII.
ARTICLE IX
DISTRIBUTION OF BENEFITS
9.1 Retirement or Disability. The amount of a Participant's Account shall
be determined as of the valuation date next preceding actual
distribution. Payment of benefits shall be made in accordance with the
provisions of this Article.
9.2 Death. If a Participant dies while in the employment of the Company,
the amount of his Participant Account shall be nonforfeitable. Payment
of benefits shall be made to the Participant's Spouse in accordance
with the provisions of Section 9.4, Section 9.6 and Section 9.7, unless
a beneficiary has been elected in accordance with the provisions of
Section 9.8.
9.3 Form of Distribution. Any distribution of any portion of a Participant
Account made coincident with or following a Participant's death,
Disability, Retirement or termination of employment shall be
distributed in one of the following methods subject to Section 9.8, as
selected by the Participant or beneficiary by filing the appropriate
form with the Trustees:
(a) A single lump sum in cash.
(b) Direct rollover to an eligible retirement plan.
A direct rollover is a payment by the plan to an eligible retirement
plan specified by the Participant. For purposes of making a
distribution Participant includes an employee or former employee or the
employee's or former employee's surviving spouse or designated
beneficiary or the employee's or former employee's former spouse who is
an alternate payee under a qualified domestic relations order as
defined in section 414(p) of the Code.
An eligible retirement plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the Participant's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
An eligible rollover distribution is any distribution of all or any
portion of the Participant's account balance, 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
Participant or the joint lives (or joint life expectancies) of the
Participant's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(c) The Trustees, upon agreement with the Participant and subject to
the provisions of Section 9.8, shall apply the Participant Account
to the purchase of an annuity contract
29
Amendment #4 dated 1/1/98 replaces all prior
issued by an insurance company. In this event, the payment will be
made in one or more of the following ways: over the life of the
participant; over the life of the participant and a designated
beneficiary; over a period certain not extending beyond the life
expectancy of the participant; or over a period certain not
extending beyond the joint life and last survivor expectancy of
the participant and a designated beneficiary.
If a Participant fails to elect a form of distribution, the
distribution shall be payable in a 50% joint and survivor annuity if
the Participant is married or a straight life annuity if the
Participant is single.
The Trustees shall distribute a notice describing the forms of
distribution available under the Plan at least 90 days before a
Participant's payments are scheduled to commence. The Participant shall
inform the Trustees of his preferred distribution form.
If a Participant's account balance is greater than $3,500 ($5,000 on or
after 1/1/98) an immediate distribution will not be made without the
consent of the Participant and where applicable, the Participant's
spouse. An immediate distribution means the distribution of any part of
the benefit prior to the later of age 62 or normal retirement age.
Distributions from the Plan will be made in accordance with the
requirements of the regulations under Section 401(a)(9), including the
minimum distribution incidental benefit requirements.
If a Participant dies before the time when distribution is considered
to have commenced (a) any remaining portion of the Participant's
interest that is not payable to a beneficiary designated by the
participant will be distributed within five years after the
Participant's death; and (b) any portion of the participant's interest
that is payable to a beneficiary will be distributed either (i) within
five years after the Participant's death , or (ii) over the life of the
beneficiary over a period certain not extending beyond the life
expectancy of the beneficiary, commencing not later than the end of the
calendar year following the calendar year in which the participant dies
(or if the designated beneficiary is the Participant's spouse,
commencing not later than the end of the calendar year following the
calendar year in which the Participant would have attained age 70 1/2).
9.4 Payment of Benefits to a Beneficiary. Unless an annuity has already
been purchased (in which case the form of payment will be in accordance
with the annuity contract), payment of benefits under Section 9.2
to a beneficiary shall be made in the form of payment elected by the
beneficiary in accordance with
Section 9.3 subject to the limitations set forth in Section 9.8.
Payment may be deferred until the date that the Participant would have
attained age 70-1/2, provided that the beneficiary is the Participant's
Spouse.
9.5 Small Payments. If the value of the Participant Account is less than
$3,500 ($5,000 on or after 1/1/98),
the Trustee shall direct that such lump value be paid in full discharge
of all liability under the Plan.
9.6 Commencement of Benefit Payments. Unless the Participant otherwise
elects, the payment of benefits shall
commence no later than 60 days after the close of the Plan Year in
which occurs the later of the Participant's Normal Retirement Date or
his termination of employment. In no event shall distribution commence
later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2; provided, however, that in
the case of a participant who has attained age 70-1/2 before January 1,
1988, and is not a five percent owner (within the meaning of Code
Section 416) at any time during the Plan Year ending with or within the
calendar year in which he attains age 66-1/2 and in any subsequent Plan
Year, distribution shall commence no later than April 1 of the calendar
year following the later of the calendar year in which the Participant
attains age 70-1/2 or terminates his employment with the Company.
9.7 (a) Distributions to Married Participants. In the event that a
Participant is married on the date his distribution payments are to
begin, he shall receive his benefits in the form of a 50% joint and
survivor annuity unless he completes the election described below
within 90 days of the date his benefit payments are to begin. If he
does so elect, he may request his benefits to be paid out in one of the
payment forms described in Section 9.3.
Payments under a qualified joint and survivor annuity will commence
immediately. An election to waive a joint and survivor annuity shall be
effective only if made in accordance with Section 9.8.
At least 120 days prior to the date his benefit payments are to
commence, the Trustees shall inform the
Participant of (1) the terms and conditions of the joint and survivor
annuity form and the alternative payment forms, (2) the ability to
waive the joint and survivor annuity form (and the procedure to do so),
and (3) the ability to revoke such a waiver.
(b) Death Benefits: Married Participants.
(1) Pre-retirement Spousal Death Benefit. In the event that a married
Participant dies before he has begun to receive his benefit
payments and he has not made an election pursuant to subsection
(2) below, his surviving Spouse shall receive a death benefit
equal to 100% of the balance of his Participant Account payable
in a single life annuity or in a single lump sum in cash. The
surviving spouse may direct the commencement of payments under
the qualified pre-retirement survivor annuity within a reasonable
time after the participant's death.
(2) Election to Waive the Pre-retirement Spousal Death Benefit. A
Participant may elect to waive the benefit described in (1) above
if, at some point after he has either attained age 35 or
terminated employment, whichever comes first, he makes an
election to waive the benefit. Such waiver shall be effective
only if made in accordance with Section 9.8.
(3) Information to Participants. The Committee shall inform each
Participant of (A) the terms and conditions of the pre-retirement
spousal death benefit and the distribution alternatives, (B) the
ability to waive such benefit (and the Procedure to do so), and
(C) the ability to revoke such waiver. Such must be between the
Plan Years in which he attains age 32 and age 35, (B) a reasonable
period after the individual becomes a Participant, (C) a
reasonable period after the individual is married, (D) a
reasonable period after separation from service in the case of a
Participant who separates before attaining age 35, or (E) a
reasonable period after the individual elects distribution in the
form of a life annuity.
(c) Death Benefits: Married Participants Making an Election Described
in (b)(2) and Unmarried Participants. The account balance of either a
Participant who is not married on the date of his death or of a
Participant who has waived the benefit described in (b)(1) by making
the election described in (b)(2) and whose payment has not commenced
shall be paid upon his death to his beneficiary. Such payment shall be
made as soon as practicable after the Participant's death.
9.8 Selection of Beneficiary. Each Participant, by signing a form
approved by the Committee, may designate any person or persons
(who may be designated concurrently, contingently or
successively) to whom his benefits under the Plan are to be paid
if he dies before he receives all of such benefits. The
beneficiary of a married Participant must be such Participant's
Spouse unless the Spouse consents to the election. Spousal
consent shall be effective only if (a) it is in writing ,(b) it
designates a beneficiary or a form of benefits which may not be
changed without spousal consent, (c) it is accompanied by the
written, signed consent of the Participant's Spouse, (d) the
Spouse's signature is witnessed by a Plan representative or a
notary public, and (e) the consent comports with all other
requirements of applicable law. Notwithstanding anything herein
to the contrary, no consent shall be required if the Committee is
satisfied that the Participant's Spouse cannot be located. An
election made pursuant to this subsection may be revoked at any
time prior to the date of distribution. The consent of the spouse
shall be effective only as to the Spouse who signs the consent.
In the event that a Participant changes an election which
contains spousal consent, the spousal consent shall be
ineffective unless a new consent is executed; the spousal consent
is otherwise irrevocable.
A beneficiary designation form will be effective only when the executed
form is filed with the Committee while the Participant is alive and
will cancel all beneficiary designation forms previously filed by the
Participant.
Payment of the death benefit shall be in any method or methods
discussed in Section 9.3 as shall be chosen by the beneficiary,
provided, however, that if the Participant dies after distribution of
his interest has commenced, the remaining portion of such interest will
continue to be distributed in accordance with the option elected under
Section 9.3. If a Participant fails to designate a beneficiary before
his death as provided herein, or if the beneficiary designated by a
deceased Participant dies before him or before complete distribution of
his benefits, the Committee shall authorize distribution of the
Participant's benefits to the legal representative of the estate of the
last to die of the Participant or his beneficiary, as appropriate.
9.9 Minimum Distribution Amount. Notwithstanding any provision of this
Plan, the amount to be distributed each year, beginning with the year
which is required in accordance with Section 9.6, must not be less than
the lesser of the remaining balance in the Participant
32
Account or the amount equal to the quotient obtained by dividing the
balance in the Participant Account at the beginning of every such year
by the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and the beneficiary, if
applicable. However, no distribution need be made in any year, or a
lesser amount may be distributed if, beginning with the year that
distributions began, the aggregate amounts distributed by the end of
such year are at least equal to the aggregate of the minimum amounts
required to have been distributed by the end of such year in accordance
with the preceding sentence.
9.10 Transfers to Other Qualified Plans and IRAs. Upon retirement or
termination of employment, a Participant may elect that all or a
portion of an eligible rollover distribution be paid in a direct
rollover to another qualified plan meeting the requirements of
Section 401(a) of the Code and which makes provisions for
receiving such transferred assets or to an individual retirement
account (including, for this purpose, an individual retirement
annuity) established for the benefit of the Participant and
meeting the requirements of Section 408 of the Code. Upon receipt
of written instructions from the Committee containing the
information necessary to effect such transfer, the Trustee and
any applicable insurance company shall, for the benefit of the
Participant, and subject to the terms and conditions of any
applicable annuity contract, so transfer such assets.
9.11 Payment of Benefits to an Alternate Payee. A qualified domestic
relations order, as defined in Section 414(p) of the Code, which
creates or recognizes the existence of an alternative payee's
right to, or assigns to an alternate payee, the right to receive
all or a portion of a Participant's benefit under the Plan, shall
not alter the amount or form of benefits payable under the Plan.
A qualified domestic relations order shall not be related as
failing to meet this paragraph if payments to such alternate
payee are made before the Participant has separated from service,
but after the date on which the Participant would have been
eligible for a benefit upon termination or retirement.
ARTICLE X
ADMINISTRATION
10.1 Allocation of Responsibility for Plan Administration. The
Administrative Committee shall have only those specific powers,
duties, responsibilities and obligations as are specifically
given under this Plan. In general, the Company shall have the
sole responsibility for making the contributions provided for
under Section 4.1, and the Company shall have the sole authority
to enter into a contract with any Investment Company and to
remove such Investment Company. The Administrative Committee
shall have the sole responsibility for the administration of this
Plan. The Trustee shall have the responsibility for the
administration of the Plan assets. The Administrative Committee
and Trustee may rely upon the direction, information or actions
of each other as being proper under this Plan, and are not
required under this Plan to inquire into the propriety of any
such direction, information or action. It is intended under this
Plan that the Administrative Committee and Trustee shall be
responsible for the proper exercise of their own powers, duties,
responsibilities and obligations under this Plan and shall not be
responsible for any act or failure to act of each other, except
to the extent required by law.
10.2 Appointment of Committee. The Administrative Committee shall consist of
not less than one nor more than seven members who shall be appointed
by, and serve at the pleasure of, the Board of Directors. The number of
members on the Administrative Committee may be increased from time to
time, and new members may be appointed by the Board of Directors. Any
member of the Administrative Committee may resign at any time, and the
Board of Directors may remove any member of the Administrative
Committee at any time.
10.3 Committee Procedures. The Administrative Committee may select a
chair and may select a secretary to keep its records or to assist
it with any other duties to be performed by the Administrative
Committee. A majority of the Administrative Committee in office
may do any act which the Plan authorizes or requires the
Administrative Committee to do, and the action of such majority
expressed from time to time by a vote at a meeting, or in writing
without a meeting, shall constitute the action of the
Administrative Committee and shall have the same effect for all
purposes as if assented to by all members of the Administrative
Committee at the time in office. The members of the
Administrative Committee may, by a writing signed by a majority
of them, delegate to any one of them the authority to give
certified notice in writing of any action taken by the
Administrative Committee.
10.4 Duties of the Committee. The Administrative Committee shall administer
the Plan and shall have the power and duty to take all action and to
make all decisions necessary or proper to carry out the Plan. Without
limiting the generality of the foregoing, the Administrative Committee
shall have the following powers and duties:
(a) To require any person to furnish such information as it may
request for the purpose of the proper administration of the Plan
as a condition to receiving any benefit under the Plan;
(b) To make and enforce such rules and regulations and prescribe the
use of such forms as it shall deem necessary for the efficient
administration of the Plan;
(c) To interpret the Plan, and to resolve ambiguities, inconsistencies
and omissions, its interpretation and resolution to be finally
conclusive and binding on all parties affected thereby; and
(d) To decide on questions concerning the Plan and the eligibility of
any Employee to participate in the Plan, in accordance with the
provisions of the Plan.
10.5 Expenses. All expenses incurred prior to termination of the Plan that
shall arise in connection with the administration of the Plan,
including but not limited to the compensation of any accountant,
counsel, specialist or other person who shall be employed by the
Administrative Committee in connection with the administration thereof,
all be paid by the Company.
10.6 Committee Member Compensation. Unless otherwise agreed to by the
Company, the members of the Administrative Committee shall serve
without compensation for services as such, but all reasonable expenses
shall be paid by the Company. The Company may only agree to compensate
members of the Administrative Committee for services as such who are
not receiving full-time pay from the Company.
10.7 Indemnification. Except to the extent insured, the Company shall
indemnify and save harmless any employee of the Company against any
cost or expense (including attorney's fees) or liability (including any
sum paid in settlement of a claim with the approval of the Company)
incurred by reason of the Employee's service as a fiduciary with
respect to the Plan, except in the case of willful misconduct.
10.8 Committee Records. The Committee may designate one of its members
to transmit all decisions of the Committee and to sign all
necessary notices and other reports or documents on behalf of the
Committee. All reports, notices or other documents bearing the
signature of the member so designated shall be deemed to bear the
signatures of all the members, and all parties dealing with the
Committee are entitled to rely on any such reports, notices or
other documents as authentic and representing the action of the
Committee. The Committee shall maintain such books of accounts,
records and other data as may be necessary or advisable in its
judgment for the purpose of the proper administration of the
Plan.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Exclusive Benefit. Plan assets shall be held for the exclusive purpose
of paying benefits to Participants and beneficiaries and defraying
reasonable expenses of administering the Plan; provided that, if any
contribution is made by the Company by mistake of fact, nothing in the
foregoing shall prohibit the return of such contribution within one
year of the payment of such contribution.
11.2 Plan Amendment or Termination. The Company reserves the right to
amend, modify, suspend or terminate the Plan at any time,
provided that no amendment shall have the effect of diverting any
portion of the Plan's assets to any purpose other than for the
exclusive benefit of the Participants and beneficiaries. In the
event of the termination or partial termination of the Plan or
the complete discontinuance of contributions to the Plan, the
interest of Participants affected by the termination and their
beneficiaries under the Plan shall be nonforfeitable. No
amendment to the Plan shall decrease a Participant's Accrued
Benefit or eliminate an optional form of distribution with
respect to his Accrued Benefit as of the effective date of the
amendment. Upon the termination of the Plan, any forfeiture
remaining (after deducting any administrative expenses including
trustee, recordkeeping, auditors, consultants and counsel in the
event the Employer elects not to pay these expenses) which has
not been reallocated as of such termination shall be allocated to
each Participant, in a nondiscriminatory manner selected by the
Administrator, who is in the employment of the Company as of the
date of termination. Amendments made by the Company shall be made
by resolution of the Board of Directors of the Company adopted in
accordance with the by-laws of the Company and applicable
corporation law. Alternatively, amendments may be adopted by any
one or more officers of the Company if authority to amend the
Plan has been delegated to them by the Board of Directors in
accordance with the by-laws of the Company and applicable
corporation law. A delegation may be general (by way of
describing the general duties and responsibilities of the
officers) or specific with regard to employee benefit plans such
as this and is not invalid merely because it was made before this
Plan was established. An officer exercising delegated authority
to amend the Plan shall memorialize that exercise in writing
signed by the officer.
11.3 Merger, Consolidation or Transfer. This Plan shall not be merged or
consolidated with any other plan, nor shall its assets or liabilities
be transferred to any other plan, unless immediately after such merger,
consolidation or transfer of assets, each Participant in the Plan
would, if the Plan were then to terminate, receive a benefit not less
than the benefit which he would have been entitled to receive
immediately before such merger, consolidation or transfer had the Plan
then terminated.
11.4 No Guarantee of Employment. Nothing in this Plan shall be construed to
give any Employee a legal right to be retained in the employ of the
Company.
11.5 No Alienation of Benefits. It is a condition of the Plan, and all
rights of each Participant shall be subject thereto, that no
right or interest of any Participant in the Plan or in his
Account shall be assignable, alienable, transferable or subject
to any lien in whole or in part, either directly or by operation
of law or otherwise, including, but not by way of limitation,
execution, levy, garnishment, attachment, pledge, bankruptcy or
in any other manner, except a transfer as a result of death or
mental incompetency, and no right or interest of any Participant
in the Plan or in his Account shall be liable for, or subject to,
any obligation or liability of such Participant.
Notwithstanding the preceding paragraph, the Plan shall honor orders that are
determined by the Committee to constitute qualified domestic relations
orders within the meaning of Section 414(p) of the Code. In order to be
a qualified domestic relations order, the Committee must determine
that:
(a) it is a judgment, decree or order of a court (including approval
of a property settlement)
(b) it is made pursuant to state domestic relations law (including
community property law)
(c) it provides child support, alimony payments, or marital property
rights to your spouse, former spouse, child or other dependent.
The Plan shall not honor a domestic relations order unless it
specifies:
(a) that it applies to the Plan,
(b) the name and last known mailing address of the affected
Participant, as well as the name and last known mailing address of
all alternative payees,
(c) the amount or percentage of the Participant's benefits that are
required to be paid to each alternate payee, or the manner in
which the amount or percentage is to be determined, and
(d) the number of payments or the period to which the order applies.
The Plan shall not honor a domestic relations order if it purports to
require the Plan to:
(a) provide increased benefits,
(b) provide any type or form of benefit, or any option, that is not
already provided for in the Plan, or
c) pay to anyone any benefits that are already required to be paid to
someone else under a previous domestic relations order.
When a domestic relations order comes to the Committee, the Committee
shall notify the affected Participant and the alternate payees that the
order has been received and describe the following procedure for
deciding whether to honor the order. Next, the Committee shall
separately account for the benefits that, under the order, would be
paid to someone other than the Participant and withhold distribution
while deciding whether to honor the order.
Next, the Committee shall decide whether the order constitutes a
qualified domestic relations order. When the decision is made, the
Committee shall notify the affected Participant and the alternate
payees. Such notification shall be considered a decision on a claim,
subject to the administrative appeal procedures of Section 11.7.
If the Committee determines that the Plan will honor the order (or the
ultimate result of an appeal is that the Plan must honor the order),
the Committee shall proceed to make the payments required by the order
(or schedule them for future payment, if they are not due yet). If the
Committee decides that the Plan shall not honor the order (or the
ultimate result of an appeal is that the Plan must not honor the
order), the Committee will make payments as if there had been no order.
In the unlikely event that the Committee cannot decide whether the Plan
should honor the order within 18 months after the first payment should
have been made under the order, the Committee shall make payments as if
there had been no order until the decision is made, and then make
future payments (but no past payments) in accordance with the decision.
11.6 Gender and Number. Wherever used in this Plan, the masculine shall be
deemed to include the feminine and the singular shall be deemed to
include the plural, unless the context clearly indicates otherwise.
11.7 Administrative Committee. The Administrative Committee will operate and
administer the Plan, will determine all questions arising under or in
connection therewith, and may from time to time prescribe and amend
regulations for such administration.
The Committee shall have and shall exercise complete discretionary
authority to construe, interpret and apply all of the terms of the
Plan, including all matters relating to eligibility for benefits,
amount, time or form of benefits, and any disputed or allegedly
doubtful terms. In exercising such discretion, the Committee shall give
controlling weight to the intent of the sponsor of the Plan. All
decisions of the Committee in the exercise of its authority under the
Plan shall be final and binding of the Plan, the Plan Sponsor and all
participants and beneficiaries.
The Committee will cause the records of the Plan to be kept on a basis
that accounts separately for Participant Salary Deferral Contributions
and Company Contributions. Whenever directions, designations,
applications, requests, or other notices are to be given by a
Participant under the Plan, they shall be on forms prescribed by the
Committee and shall be filed in such manner as shall be specified by
the Committee on such forms. The Committee shall make all
determinations as to the right of any person to a benefit. If any claim
for benefits is wholly or partially denied by the Committee, written
notification shall be sent to the claimant no later than 90 days,
excluding extensions for special circumstances, after the initial claim
was filed. If such an extension is required, the claimant shall be sent
written notice of the extension prior to the termination of the initial
90-day period. In no case shall such an extension exceed a period of
180 days after the initial claim was filed. The notification of denial
shall provide the following information to the claimant:
(a) The specific reason or reasons for the denial, with specific
references to the pertinent Plan provisions on which the denial is
based;
(b) A request for any additional material or information necessary for
the claimant to correct the claim and an explanation of why such
material or information is needed;
(c) Appropriate information regarding the procedure to be followed if
the claimant wishes to appeal his claim denial. Such information
should include, but is not limited to:
(i) A statement informing the claimant that a failure to
perfect his claim within 60 days after he receives
notification of denial shall make the Committee's denial
decision conclusive.
(ii) A statement informing the claimant that he or his
personal representative may, upon written request,
require the Committee to furnish all pertinent Plan
information to the claimant.
If such appeal request is filed on a timely basis, the Committee shall
review it no later than 60 days after receipt unless special
circumstances require an extension of time for processing. If such an
extension is required, the claimant shall be sent written notice of the
extension prior to the termination of the 60-day period. In no case,
however, shall the Committee's decision on such appeal request be
delivered later than 120 days following receipt of the appeal request.
The Committee's decision shall be delivered in writing and shall
include the specific reasons for the decision and specific references
to the Plan provisions which are applicable. The determination of the
Committee to any disputed question shall be conclusive as to all
persons affected thereby.
11.8 Plan Construction. This Plan shall be construed, whenever possible, to
be in conformity with the requirements of the Code and the Employee
Retirement Income Security Act of 1974 as amended. To the extent not in
conflict with the preceding sentence, the construction and
administration of the Plan shall be governed by, and its validity
determined under, the laws of the Commonwealth of Pennsylvania.
ARTICLE XII
PROVISIONS RELATING TO TOP-HEAVY PLANS
12.1 Definitions. With respect to any Plan Year in which this Plan is a
Top-Heavy Plan (as hereinafter defined), the following additional
definitions shall apply:
a) "Affiliated Company" means any entity which with the Company forms
(1) a controlled group of corporations within the meaning of
Section 414(b) of the Code, (2) a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Code, or (3) an affiliated service group within the meaning of
Section 414(m) of the Code.
(b) "Aggregation Group" means the Permissive Aggregation Group if
there is one in existence, and shall otherwise mean the Mandatory
Aggregation Group, each as hereinafter defined.
(c) "Determination Date" means, as to any Plan Year, the last day of
the preceding Plan Year.
(d) "Key Employee" means a person employed by the Company or any
Affiliated Company who, during the Plan Year or during any of the
preceding four Plan Years, was any of the following:
(1) An officer of the Company or an Affiliated Company having
an annual compensation in excess of 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code. An
individual shall be considered an officer only if he (A)
is in the regular and continuous employ of the Company or
an Affiliated Company, (B) has been designated as an
officer pursuant to election or appointment by the Board
or other person or governing body having authority to
elect or appoint officers of the Company or an Affiliated
Company, and (C) is an administrative executive. The
number of persons to be considered officers in any Plan
Year and the identity of the persons to be so considered
shall be determined pursuant to the provisions of Section
416(i) of the Code and the regulations published
thereunder.
(2) One of the ten employees of the Company and the
Affiliated Companies owning (or considered as owning
under the attribution rules set forth at Section 318 of
the Code and the regulations thereunder) the largest
interest in the Company and all Affiliated Companies
(aggregated) and having an annual compensation in excess
of the dollar limitation under Section 415(c)(1)(A) of
the Code.
(3) A person who is both an employee and the owner of a
greater than 5% capital or profits interest in the
Company or in any Affiliated Company, and any person who
owns (or who, under Section 318 of the Code, is
considered as owning) more than 5% of the outstanding
stock of any entity constituting the Company or of an
Affiliated Company, or of stock possessing more than 5%
of the total combined voting power of all stock of such
entity or Affiliated Company.
40
(4) A person who is both an employee whose annual
compensation (as determined by applying the definition of
compensation set forth in Section 415(c)(3) of the Code)
from the Company and all Affiliated Companies exceeds
$150,000 and who is a greater than 1% owner of the
Company, with ownership determined pursuant to paragraph
(3) of this Section 12.1(d) by substituting "1%" for "5%"
at each place where "5%" is set forth therein.
The beneficiary of any deceased Participant who was a Key
Employee shall be considered a Key Employee for the same
period as the deceased Participant would have been so
considered.
(e) "Key Employee Ratio" means the ratio for any Plan Year, calculated
as of the Determination Date with respect to such Plan Year,
determined by dividing the amount described in paragraph (1) of
this Section 12.1(e) by the amount described in paragraph (2) of
this Section 12.1(e), after deducting from both such amounts the
amount described in paragraph (3) of this Section 12.1(e).
(1) The amount described in this paragraph (1) is the sum of
(A) the aggregate of the present value of all accrued
benefits of Key Employees under all qualified defined
benefit plans included in the Aggregation Group, (B) the
aggregate of the balances in all of the accounts standing
to the credit of Key Employees under all qualified
defined contribution plans included in the Aggregation
Group, and (C) the aggregate amount distributed from all
plans in such Aggregation Group to or on behalf of any
Key Employee during the period of five Plan Years ending
on the Determination Date.
(2) The amount described in this paragraph (2) is the sum of
(A) the aggregate of the present value of all accrued
benefits of all participants under all qualified defined
benefit plans included in the Aggregation Group, (B) the
aggregate of the balances in all of the accounts standing
to the credit of all participants under all qualified
defined contribution plans included in the Aggregation
Group, and (C) the aggregate amount distributed from all
plans in such Aggregation Group to or on behalf of any
participant during the period of five Plan Years ending
on the Determination Date.
(3) The amount described in this paragraph (3) is the sum of
(A) all rollover deposits (or similar transfers) to the
Plan initiated by an Employee and made after December 31,
1983, and (B) any amount that is included in subparagraph
(2) hereof for, on behalf of, or on account of, a person
who is a Non-Key Employee as to the Plan Year of
reference but who was a Key Employee as to any earlier
Plan Year. For purposes of this section, the accrued
benefit of any employee who has not worked as hour of
service during the preceding five plan years shall be
excluded.
(f) "Mandatory Aggregation Group" means the group of qualified plans
(including any terminated plans) sponsored by the Company or by an
affiliated Company formed by including in such group (1) all such
plans in which a Key Employee is a
participant, and (2) all such plans which enable any plan
described in clause (1) to meet the requirements of either Section
401(a)(4) of the Code or Section 410 of the Code.
(g) "Non-Key Employee" shall mean any person who is employed by the
Company or an Affiliated Company, but who is not a Key Employee as
to that Plan Year.
(h) "Permissive Aggregation Group" means the group of qualified plans
(including any terminated plans) sponsored by the Company or by an
Affiliated Company formed by including in such group (1) all plans
in the Mandatory Aggregation Group, and (2) such other qualified
plans sponsored by the Company or an Affiliated Company as the
Company elects to include in such group, as long as the group,
including those plans electively included, continues to meet the
requirements of Sections 401(a)(4) and 410 of the Code.
(i) "Super Top-Heavy Plans" means this Plan for any Plan Year in which
this Plan would be deemed to be a "Top-Heavy Plan" pursuant to
Section 12.2 of this Article XII if "90%" were substituted for
"60%" at each place where "60%" appears therein.
(j) "Top-Heavy Plan" means this Plan for any Plan Year in which this
Plan is determined to be a "Top-Heavy Plan" pursuant to the
provisions of Section 12.2 of this Article XII.
(k) "Valuation date" means the annual date on which plan assets must
be valued for the purpose of determining the value of account
balances or the date on which liabilities and assets of a defined
benefit plan are valued. For the purpose of the top-heavy test,
the valuation date for a defined benefit plan is the first day of
the Plan Year. The valuation date for a defined contribution plan
is the last day of the preceding Plan Year. The accrued benefits
and account balances used to determine the top-heavy status relate
to the this valuation date.
12.2 Determination of Top-Heavy Status. This Plan shall be deemed to be
"top-heavy" as to any Plan Year if, as of the Determination Date with
respect to such Plan Year, any of the following conditions are met:
(a) The Plan is not part of an Aggregation Group, and the Key Employee
Ratio under the Plan exceeds 60%;
(b) The Plan is part of an Aggregation Group, there being no
Permissive Aggregation Group of which the Plan is a part, and the
Key Employee Ratio of the Mandatory Aggregation Group of which the
Plan is a part exceeds 60%; or
(c) The Plan is part of an Aggregation Group, there is a Permissive
Aggregation Group of which the Plan is a part, and the Key
Employee Ratio of the Permissive Aggregation Group of which the
Plan is a part exceeds 60%.
12.3 Right to Participate in Allocation of Company's Contributions.
(a) General Rule. Notwithstanding any provision of this Plan to the
contrary, any person who was eligible to be a Participant at any
time during a Plan Year in which this Plan was a Top-Heavy Plan
shall share in the allocation provided for in Section 4.1 of
Article IV of this Plan for such Plan Year if he or she remained
in the employ of the Company or an Affiliated Company through the
end of the Plan Year with respect to which such allocation
applies.
(b) Exceptions to the General Rule. The provisions of Section 12.3(a)
of this Article XII shall not apply to any Participant for a Plan
Year if, with respect to that Plan Year:
(1) Such Participant was an active participant in a qualified
defined benefit pension plan sponsored by the Company or
by an Affiliated Company under which plan the
Participant's accrued benefit is not less than the
minimum accrued pension benefit that would be required
under Section 416(c)(1) of the Code, treating such
defined benefit pension plan as a Top-Heavy Plan and
treating all such defined benefit pension plans as
constitute an Aggregation Group as a single plan; or
(2) Such Participant was an active participant in a qualified defined
contribution plan sponsored by the Company or an Affiliated
Company under which plan the amount of the employer contribution
allocable to the account of the Participant for the accrual
computation period of such plan ending with or within the Plan
Year, exclusive of amounts by which the Participant's
compensation was reduced pursuant to a salary reduction agreement
or similar arrangement, is not less than the contribution
allocation that would be required under Section 416(c)(2) of the
Code under this Plan.
12.4 Minimum Company Contribution Allocation. The allocation made under
Section 4.1 of Article IV of this Plan to the Participant Account of
each Participant who is a Non-Key Employee for any Plan Year, including
a Plan Year in which this Plan is a Top-Heavy Plan or a Super Top Heavy
Plan, shall be not less than the lesser of:
(a) 3% of the "compensation" (as defined in Section 415 of the Code)
of each such Participant for such Plan Year; or
(b) The percentage of Compensation so allocated under Section 4.1 of
Article IV to the account of the Key Employee for whom such
percentage is the highest for such Plan Year.
If any person who is a Participant in the Plan is a participant under
any top-heavy defined benefit pension plan qualified under Section
401(a) of the Code sponsored by the Company or by an Affiliated
Company, the minimum benefit shall be provided under the defined
benefit plan. For the purposes of determining whether or not the
provisions of this Section 12.4 have been satisfied (1) contributions
or benefits under Chapter 2 of the Code (relating to tax on
self-employment income), Chapter 21 of the Code (relating to Federal
Insurance Contributions Act), Title II of the Social Security Act, or
any other federal or state law are disregarded, and (2) all defined
contribution plans in the Aggregation Group shall be treated
as a single plan. For the purposes of determining whether or not the
requirements of this Section 12.4 have been satisfied, contributions
allowable to the account of the Participant under any other qualified
defined contribution plan that is part of the Aggregation Group shall
be deemed to be contributions made under this Plan, and, to the extent
thereof, no duplication of such contributions shall be required
hereunder solely by reason of this Section 12.4. This Section 12.4
shall not apply in any Plan Year in which the Plan is part of an
Aggregation Group containing a defined benefit pension plan (or a
combination of such defined benefit pension plans) if the Plan enables
a defined benefit pension plan required to be included in such
Aggregation Group to satisfy the requirements of either Section
401(a)(4) or Section 410 of the Code.
The Employer must make any additional contribution required by this
Section from net profits.
12.5 Adjustments to Annual Additions and Combined Plans Limitations. In the
case of a top-heavy plan that does not meet the requirements of Code
Section 416 (h) (2), the denominators of the defined benefit and
defined contribution plan fractions (as described in Section 415 (e) of
the code) are computed by substituting a factor of 1.0 for 1.25.
12.6 Adjustments to Vesting Schedule. If this Plan is a Top-Heavy Plan
with respect to any Plan Year, the schedule set forth in this
Section 12.6 shall be substituted for the applicable schedule in
Section 7.2, effective as of the first day of the first Plan Year
in which this Plan is a Top-Heavy Plan; provided, however, that
the vesting interest of each person who was a Participant as of
the effective date of such substitution shall in no event be
lower at any time than his or her vested interest would have been
at such time if such vested interest were determined pursuant to
the vesting schedule as the same existed immediately prior to
such substitution.
The substitute vesting schedule referred to in this Section 12.6 is as
follows:
Period of Service Percentage of Vesting
less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 years but less than 5 years 60%
5 years or more 100%
APPENDIX A
Groups of Employees Eligible for Participation
Location Date Participation
Commences
Birmingham, Alabama November 4, 1991
Doraville, Georgia April 1, 1990
Cheswick, Pennsylvania May 7, 1997
Ephrata, Pennsylvania May 17, 1995
Georgetown, Massachusetts November 12, 1997
Houston, Texas (with the exception of April 1, 1990
of Rail Take-Up employees)
of Rail Take-Up employees
Navasota, Texas April 1, 1990
Niles, Ohio December 1, 1986
Parkersburg, West Virginia April 1, 1990
Phoenix, Arizona April 1, 1990
Portland, Oregon April 1, 1990
Pueblo, Colorado April 1, 1990
Savannah, Georgia April 1, 1990
St. Mary's, West Virginia November 26, 1997
Stockton, California September 1, 1993
Tampa, Florida April 1, 1990