EXHIBIT 10.4
C&D TECHNOLOGIES SAVINGS PLAN
(October 1, 1997 Restatement)
Fidelity Management Trust Company, its affiliates and employees may not provide
you with legal or tax advice in connection with the execution of this document.
It should be reviewed by your attorney and/or accountant prior to execution.
CORPORATEplan for RETIREMENT
VOLUME SUBMITTER
PLAN DOCUMENT SYSTEMS
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 - Plan Definitions
1.2 - Interpretation
ARTICLE II
SERVICE
2.1 - Definitions
2.2 - Crediting of Hours of Service
2.3 - Crediting of Continuous Service
2.4 - Eligibility Service
2.5 - Vesting Service
2.6 - Crediting of Service on Transfer or Amendment
ARTICLE III
ELIGIBILITY
3.1 - Eligibility
3.2 - Transfers of Employment
3.3 - Reemployment
3.4 - Notification Concerning New Eligible Employees
3.5 - Effect and Duration
ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 - Tax-deferred Contributions
4.2 - Amount of Tax-Deferred Contributions
4.3 - Changes in Reduction Authorization
4.4 - Suspension of Tax-Deferred Contributions
4.5 - Resumption of Tax-Deferred Contributions
4.6 - Delivery of Tax-Deferred Contributions
4.7 - Vesting of Tax-Deferred Contributions
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 - After-Tax Contributions
5.2 - Amount of After-Tax Contributions by Payroll Withholding
5.3 - Changes in Payroll Withholding Authorization
5.4 - Suspension of After-Tax Contributions by Payroll Withholding
5.5 - Resumption of After-Tax Contributions by Payroll Withholding
5.6 - Rollover Contributions
5.7 - Delivery of After-Tax Contributions
5.8 - Vesting of After-Tax Contributions and Rollover Contributions
(i)
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 - Contribution Period
6.2 - Profit-Sharing Contributions
6.3 - Allocation of Profit-Sharing Contributions
6.4 - Qualified Nonelective Contributions
6.5 - Allocation of Qualified Nonelective Contributions
6.6 - Matching Contributions
6.7 - Allocation of Matching Contributions
6.8 - Verification of Amount of Employer Contributions by the Sponsor
6.9 - Payment of Employer Contributions
6.10 - Eligibility to Participate in Allocation
6.11 - Vesting of Employer Contributions
6.12 - Election of Former Vesting Schedule
6.13 - Forfeitures to Reduce Employer Contributions
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 - Definitions
7.2 - Code Section 402(g) Limit
7.3 - Distribution of Excess Deferrals
7.4 - Limitation on Tax-Deferred Contributions of Highly
Compensated Employees
7.5 - Distribution of Excess Tax-deferred Contributions
7.6 - Limitation on Matching Contributions and After-Tax
Contributions of Highly Compensated Employees
7.7 - Forfeiture or Distribution of Excess Contributions
7.8 - Multiple Use Limitation
7.9 - Determination of Income or Loss
7.10 - Code Section 415 Limitations on Crediting of Contributions
and Forfeitures
7.11 - Coverage Under Other Qualified Defined Contribution Plan
7.10 - Coverage Under Qualified Defined Benefit Plan
7.11 - Scope of Limitations
ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 - General Fund
8.2 - Investment Funds
8.3 - Loan Investment Fund
8.4 - Income On Trust
8.5 - Separate Accounts
8.6 - Sub-accounts
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 - No Life Insurance Contracts
(ii)
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 - Future Contribution Investment Elections
10.2 - Deposit of Contributions
10.3 - Election to Transfer Between Funds
ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 - Crediting Separate Accounts
11.2 - Valuing Separate Accounts
11.3 - Plan Valuation Procedures
11.4 - Finality of Determinations
11.5 - Notification
ARTICLE XII
LOANS
12.1 - Application for Loan
12.2 - Reduction of Account Upon Distribution
12.3 - Requirements to Prevent a Taxable Distribution
12.4 - Administration of Loan Investment Fund
12.5 - Default
12.6 - Special Rules Applicable to Loans
12.7 - Loans Granted Prior to Amendment
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 - Withdrawals of After-Tax Contributions
13.2 - Withdrawals of Rollover Contributions
13.3 - Withdrawals of Employer Contributions
13.4 - Withdrawals of Tax-Deferred Contributions
13.5 - Limitations on Withdrawals Other Than Hardship Withdrawals
13.6 - Conditions and Limitations on Hardship Withdrawals
13.7 - Order of Withdrawal From a Participant's Sub-Accounts
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 - Termination of Employment and Settlement Date
14.2 - Separate Accounting for Non-Vested Amounts
14.3 - Disposition of Non-Vested Amounts
14.4 - Recrediting of Forfeited Amounts
ARTICLE XV
DISTRIBUTIONS
15.1 - Distributions to Participants
15.2 - Distributions to Beneficiaries
15.3 - Cash Outs and Participant Consent
15.4 - Required Commencement of Distribution
15.5 - Reemployment of a Participant
(iii)
15.6 - Restrictions on Alienation
15.7 - Facility of Payment
15.8 - Inability to Locate Payee
15.9 - Distribution Pursuant to Qualified Domestic Relations Orders
ARTICLE XVI
FORM OF PAYMENT
16.1 - Definitions
16.2 - Normal Form of Payment
16.3 - Optional Forms of Payment
16.4 - Change of Option Election
16.5 - Form of Annuity Requirements
16.6 - Qualified Preretirement Survivor Annuity Requirements
16.7 - Direct Rollover
16.8 - Notice Regarding Forms of Payment
16.9 - Reemployment
ARTICLE XVII
BENEFICIARIES
17.1 - Designation of Beneficiary
17.2 - Spousal Consent Requirements
ARTICLE XVIII
ADMINISTRATION
18.1 - Authority of the Sponsor
18.2 - Action of the Sponsor
18.3 - Claims Review Procedure
18.4 - Qualified Domestic Relations Orders
18.5 - Indemnification
18.6 - Actions Binding
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 - Amendment
19.2 - Limitation on Amendment
19.3 - Termination
19.4 - Reorganization
19.5 - Withdrawal of An Employer
ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 - Adoption by Related Companies
20.2 - Effective Plan Provisions
ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 - No Commitment as to Employment
21.2 - Benefits
(iv)
21.3 - No Guarantees
21.4 - Expenses
21.5 - Precedent
21.6 - Duty to Furnish Information
21.7 - Withholding
21.8 - Merger, Consolidation, or Transfer of Plan Assets
21.9 - Back Pay Awards
21.10- Condition on Employer Contributions
21.11- Return of Contributions to an Employer
21.12- Validity of Plan
21.13- Trust Agreement
21.14- Parties Bound
21.15- Application of Certain Plan Provisions
21.16- Leased Employees
21.17- Transferred Funds
ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 - Definitions
22.2 - Applicability
22.3 - Minimum Employer Contribution
22.4 - Adjustments to Section 415 Limitations
22.5 - Accelerated Vesting
ARTICLE XXIII
EFFECTIVE DATE
23.1 - Effective Date of Amendment and Restatement
(v)
PREAMBLE
The C&D Technologies Savings Plan, originally effective as of February 1, 1986,
is hereby amended and restated in its entirety. The Plan, as amended and
restated hereby, is intended to qualify as a profit-sharing plan under Section
401(a) of the Code, and includes a cash or deferred arrangement that is intended
to qualify under Section 401(k) of the Code. The Plan is maintained for the
exclusive benefit of eligible employees and their beneficiaries.
Notwithstanding any other provision of the Plan to the contrary, a Participant's
vested interest in his Separate Account under the Plan on and after the
effective date of this amendment and restatement shall be not less than his
vested interest in his account on the day immediately preceding the effective
date. In addition, notwithstanding any other provision of the Plan to the
contrary, the forms of payment and other Plan provisions that were available
under the Plan immediately prior to the later of the effective date of this
amendment and restatement or the date this amendment and restatement is adopted
and that may not be eliminated under Section 411(d)(6) of the Code shall
continue to be available to Participants who had an account under the Plan on
the day immediately preceding the later of the effective date or the date this
amendment and restatement is adopted.
The Plan is intended to constitute an "individual account plan" eligible,
effective as of October 1, 1997, to hold "qualifying employer securities",
within the meaning of ERISA.
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ARTICLE I
DEFINITIONS
1.1 - PLAN DEFINITIONS
As used herein, the following words and phrases have the meanings hereinafter
set forth, unless a different meaning is plainly required by the context:
The "ADMINISTRATOR" means the Sponsor unless the Sponsor designates another
person or persons to act as such.
An "AFTER-TAX CONTRIBUTION" means any after-tax employee contribution made by a
Participant as may be permitted under Article V.
The "BENEFICIARY" of a Participant means the person or persons entitled under
the provisions of the Plan to receive distribution hereunder in the event the
Participant dies before receiving distribution of his entire interest under the
Plan.
The "CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a section of the Code includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
"COMPANY STOCK" means common stock of C&D Technologies, Inc., $.01 par value.
"COMPANY STOCK FUND" means the C&D Technologies, Inc. Stock Fund, a fund
invested in Company Stock pursuant to the Plan.
The "COMPENSATION" of a Participant for any period means the wages as defined in
Section 3401(a) of the Code, determined without regard to any rules that limit
compensation included in wages based on the nature or location of the employment
or services performed, and all other payments made to him for such period for
services as an Employee for which his Employer is required to furnish the
Participant a written statement under Sections 6041(d), 6051(a)(3), and 6052 of
the Code, and excluding reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, and welfare benefits, but
determined prior to any exclusions for amounts deferred under Section 125,
402(e)(3), 402(h)(1)(B), 403(b), or 457(b) of the Code or for certain
contributions described in Section 414(h)(2) of the Code that are picked up by
the employing unit and treated as employer contributions.
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Notwithstanding the foregoing, Compensation shall not include the value of any
qualified or non-qualified stock option granted to the Participant by his
Employer to the extent such value is includible in the Participant's taxable
income.
In no event, however, shall the Compensation of a Participant taken into account
under the Plan for any Plan Year exceed (1) $200,000 for Plan Years beginning
prior to January 1, 1994, or (2) $150,000 for Plan Years beginning on or after
January 1, 1994 (subject to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code; provided, however, that the dollar
increase in effect on January 1 of any calendar year, if any, is effective for
Plan Years beginning in such calendar year). If the Compensation of a
Participant is determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation described above shall
be adjusted with respect to that Participant by multiplying the annual
compensation limitation in effect for the Plan Year by a fraction the numerator
of which is the number of full months in the period and the denominator of which
is 12; provided, however, that no proration is required for a Participant who is
covered under the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12 months. In
determining the Compensation, for purposes of applying the annual compensation
limitation described above, of a Participant who is a five percent owner or
among the ten Highly Compensated Employees receiving the greatest Compensation
for the Plan Year, the Compensation of the Participant's spouse and of his
lineal descendants who have not attained age 19 as of the close of the Plan Year
shall be included as Compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the preceding
sentence the annual compensation limitation would be exceeded, the limitation
shall be prorated among the affected family members in proportion to each
member's Compensation as determined prior to application of the family
aggregation rules.
A "CONTRIBUTION PERIOD" means the period specified in Article VI for which
Employer Contributions shall be made.
An "ELIGIBLE EMPLOYEE" means any Employee who has met the eligibility
requirements of Article III to have Tax-Deferred Contributions made to the Plan
on his behalf.
The "ELIGIBILITY SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his eligibility to participate in the Plan as may be required under Article III
or Article VI.
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An "EMPLOYEE" means any employee of an Employer who is employed on a salaried
basis other than a leased employee or an employee who is covered by a collective
bargaining agreement to the extent that benefits were the subject of good faith
bargaining unless the collective bargaining agreement provides otherwise.
An "EMPLOYER" means the Sponsor and any entity which has adopted the Plan as may
be provided under Article XX.
An "EMPLOYER CONTRIBUTION" means the amount, if any, that an Employer
contributes to the Plan as may be provided under Article VI or Article XXII.
An "ENROLLMENT DATE" means the first day of each calendar month of the Plan
Year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Reference to a section of ERISA includes such section and any
comparable section or sections of any future legislation that amends,
supplements, or supersedes such section.
"FAIR MARKET VALUE" means, with respect to a specified date, the closing price
of a share of Company Stock as reported for the preceding trading day on the
principal national securities exchange in the United States on which it is then
traded, or, if Company Stock is not traded on any national securities exchange,
as quoted on an automated quotation system sponsored by the National Association
of Securities Dealers, or if the sales of the Company Stock shall not have been
reported on such date, on the first day prior thereto on which the Company Stock
was reported or quoted. With respect to investments other than investments in
Company Stock, Fair Market Value shall be determined by the entity maintaining
the applicable Investment Fund, in accordance with generally accepted valuation
methods and practices.
The "GENERAL FUND" means a Trust Fund maintained by the Trustee as required to
hold and administer any assets of the Trust that are not allocated among any
separate Investment Funds as may be provided in the Plan or the Trust Agreement.
No General Fund shall be maintained if all assets of the Trust are allocated
among separate Investment Funds.
A "HIGHLY COMPENSATED EMPLOYEE" means an Employee or former Employee who is a
highly compensated active employee or highly compensated former employee as
defined hereunder.
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A "highly compensated active employee" includes any Employee who performs
services for an Employer during the determination year and who (i) was a five
percent owner at any time during the determination year or the look back year,
(ii) received compensation from an Employer during the look back year in excess
of $75,000 (subject to adjustment annually at the same time and in the same
manner as under Section 415(d) of the Code), (iii) was in the top paid group of
employees for the look back year and received compensation from an Employer
during the look back year in excess of $50,000 (subject to adjustment annually
at the same time and in the same manner as under Section 415(d) of the Code),
(iv) was an officer of an Employer during the look back year and received
compensation during that year in excess of 50 percent of the dollar limitation
in effect for that year under Section 415(b)(1)(A) of the Code or, if no officer
received compensation in excess of that amount for the look back year or the
determination year, received the greatest compensation for the look back year of
any officer, or (v) was one of the 100 employees paid the greatest compensation
by an Employer for the determination year and would be described in (ii), (iii),
or (iv) above if the term "determination year" were substituted for "look back
year".
A "highly compensated former employee" includes any Employee who separated from
service from an Employer and all Related Companies (or is deemed to have
separated from service from an Employer and all Related Companies) prior to the
determination year, performed no services for an Employer during the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the date the
Employee attains age 55.
The determination of who is a Highly Compensated Employee hereunder, including
determinations as to the number and identity of employees in the top paid group,
the 100 employees receiving the greatest compensation from an Employer, the
number of employees treated as officers, and the compensation considered, shall
be made in accordance with the provisions of Section 414(q) of the Code and
regulations issued thereunder. For purposes of this definition, the following
terms have the following meanings:
(a) The "determination year" means the Plan Year or, if the
Administrator makes the election provided in paragraph (b)
below, the period of time, if any, which extends beyond
the look back year and ends on the last day of the Plan
Year for which testing is being performed (the "lag
period"). If the lag period is less than 12 months long,
the dollar amounts specified in (ii), (iii), and (iv)
above shall be prorated based upon the number of months in
the lag period.
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(b) The "look back year" means the 12-month period immediately
preceding the determination year; provided, however, that the
Administrator may elect instead to treat the calendar year ending
with or within the determination year as the "look back year".
An "HOUR OF SERVICE" with respect to a person means each hour, if any, that may
be credited to him in accordance with the provisions of Article II.
An "INVESTMENT FUND" means any separate investment Trust Fund maintained by the
Trustee as may be provided in the Plan or the Trust Agreement or any separate
investment fund maintained by the Trustee, to the extent that there are
Participant Sub-Accounts under such funds, to which assets of the Trust may be
allocated and separately invested.
A "MATCHING CONTRIBUTION" means any Employer Contribution made to the Plan on
account of a Participant's Tax-Deferred Contributions as provided in Article VI.
The "NORMAL RETIREMENT DATE" of an employee means the date he attains age 65.
A "PARTICIPANT" means any person who has a Separate Account in the Trust.
The "PLAN" means C&D Technologies Savings Plan, as from time to time in effect.
A "PLAN YEAR" means the 12-consecutive-month period ending on December 31.
A "PROFIT-SHARING CONTRIBUTION" means any Employer Contribution made to the Plan
as provided in Article VI, other than Matching Contributions and Qualified
Nonelective Contributions.
A "QUALIFIED NONELECTIVE CONTRIBUTION" means any Employer Contribution made to
the Plan as provided in Article VI that may be taken into account to satisfy the
limitations on contributions by Highly Compensated Employees under Article VII.
A "RELATED COMPANY" means any corporation or business, other than an Employer,
which would be aggregated with an Employer for a relevant purpose under Section
414 of the Code.
A "ROLLOVER CONTRIBUTION" means any rollover contribution to the Plan made by a
Participant as may be permitted under Article V.
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A "SEPARATE ACCOUNT" means the account maintained by the Trustee in the name of
a Participant that reflects his interest in the Trust and any Sub-Accounts
maintained thereunder, as provided in Article VIII.
The "SETTLEMENT DATE" of a Participant means the date on which a Participant's
interest under the Plan becomes distributable in accordance with Article XV.
The "SPONSOR" means C&D Technologies, Inc., and any successor thereto.
A "SUB-ACCOUNT" means any of the individual sub-accounts of a Participant's
Separate Account that is maintained as provided in Article VIII.
A "TAX-DEFERRED CONTRIBUTION" means the amount contributed to the Plan on a
Participant's behalf by his Employer in accordance with his reduction
authorization executed pursuant to Article IV.
The "TRUST" means the trust maintained by the Trustee under the Trust Agreement.
The "TRUST AGREEMENT" means the agreement entered into between the Sponsor and
the Trustee relating to the holding, investment, and reinvestment of the assets
of the Plan, together with all amendments thereto.
The "TRUSTEE" means the trustee or any successor trustee which at the time shall
be designated, qualified, and acting under the Trust Agreement. The Sponsor may
designate a person or persons other than the Trustee to perform any
responsibility of the Trustee under the Plan, other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA, and the Trustee shall
not be liable for the performance of such person in carrying out such
responsibility except as otherwise provided by ERISA. The term Trustee shall
include any delegate of the Trustee as may be provided in the Trust Agreement.
A "TRUST FUND" means any fund maintained under the Trust by the Trustee.
A "VALUATION DATE" means the date or dates designated by the Sponsor and
communicated in writing to the Trustee for the purpose of valuing the General
Fund and each Investment Fund and adjusting Separate Accounts and Sub-Accounts
hereunder, which dates need not be uniform with respect to the General Fund,
each Investment Fund, Separate Account, or Sub-Account; provided, however, that
the General Fund and each Investment Fund shall be
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valued and each Separate Account and Sub-Account shall be adjusted no less often
than once annually.
The "VESTING SERVICE" of an employee means the period or periods of service
credited to him under the provisions of Article II for purposes of determining
his vested interest in his Employer Contributions Sub-Account, if Employer
Contributions are provided for under either Article VI or Article XXII.
1.2 - INTERPRETATION
Where required by the context, the noun, verb, adjective, and adverb forms of
each defined term shall include any of its other forms. Wherever used herein,
the masculine pronoun shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
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ARTICLE II
SERVICE
2.1 - DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "continuous service" of an employee means the service
credited to him in accordance with the provisions of Section 2.3
of the Plan.
(b) The "employment commencement date" of an employee means the date
he first completes an Hour of Service.
(c) A "maternity/paternity absence" means a person's absence from
employment with an Employer or a Related Company because of the
person's pregnancy, the birth of the person's child, the
placement of a child with the person in connection with the
person's adoption of the child, or the caring for the person's
child immediately following the child's birth or adoption. A
person's absence from employment will not be considered a
maternity/paternity absence unless the person furnishes the
Administrator such timely information as may reasonably be
required to establish that the absence was for one of the
purposes enumerated in this paragraph and to establish the number
of days of absence attributable to such purpose.
(d) The "reemployment commencement date" of an employee means the
first date following a severance date on which he again completes
an Hour of Service.
(e) The "severance date" of an employee means the earlier of (i) the
date on which he retires, dies, or his employment with an
Employer and all Related Companies is otherwise terminated, or
(ii) the first anniversary of the first date of a period during
which he is absent from work with an Employer and all Related
Companies for any other reason; provided, however, that if he
terminates employment with or is absent from work with an
Employer and all Related Companies on account of service with the
armed forces of the United States, he shall not incur a severance
date if he is eligible for reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994
and he returns to work with an Employer or a Related Company
within the period during which he retains such reemployment
rights.
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2.2 - CREDITING OF HOURS OF SERVICE
A person shall be credited with an Hour of Service for each hour for which he is
paid, or entitled to payment, for the performance of duties for an Employer or
any Related Company.
2.3 - CREDITING OF CONTINUOUS SERVICE
A person shall be credited with continuous service for the aggregate of the
periods of time between his employment commencement date or any reemployment
commencement date and the severance date that next follows such employment
commencement date or reemployment commencement date; provided, however, that an
employee who has a reemployment commencement date within the
12-consecutive-month period following the earlier of the first date of his
absence or his severance date shall be credited with continuous service for the
period between such severance date and reemployment commencement date.
2.4 - ELIGIBILITY SERVICE
An employee shall be credited with Eligibility Service equal to his continuous
service.
2.5 - VESTING SERVICE
Years of Vesting Service shall be determined in accordance with the following
provisions:
(a) An employee shall be credited with years of Vesting Service equal
to his period of continuous service.
(b) Notwithstanding the provisions of paragraph (a), continuous
service completed by an employee prior to a severance date shall
not be included in determining the employee's years of Vesting
Service unless the employee had a nonforfeitable right to any
portion of his Separate Account, excluding that portion of his
Separate Account that is attributable to After-Tax or Rollover
Contributions, as of the severance date, or the period of time
between the severance date and his reemployment commencement date
is less than the greater of five years or his period of
continuous service determined as of the severance date; and
provided, however, that solely for purposes of applying this
paragraph, if a person is on a maternity/paternity absence beyond
the first anniversary of the first day of such absence, his
severance date shall be the second anniversary of the first day
of such maternity/paternity absence.
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2.6 - CREDITING OF SERVICE ON TRANSFER OR AMENDMENT
Notwithstanding any other provision of the Plan to the contrary, if an Employee
is transferred from employment covered under a qualified plan maintained by an
Employer or a Related Company for which service is credited based on Hours of
Service and computation periods in accordance with Department of Labor
Regulations ss2530.200 through 2530.203 to employment covered under the Plan
or, prior to amendment, the Plan provided for crediting of service on the basis
of Hours of Service and computation periods, an affected Employee shall be
credited with Eligibility Service and Vesting Service hereunder equal to:
(a) the Employee's years of service credited to him under the Hours
of Service method before the computation period in which the
transfer or the effective date of the amendment occurs, plus
(b) the greater of (i) the period of service that would be credited
to the Employee under the elapsed time method provided hereunder
for his employment during the entire computation period in which
the transfer or the effective date of the amendment occurs or
(ii) the service taken into account under the Hours of Service
method for such computation period as of the transfer date or the
effective date of the amendment, plus
(c) the service credited to such Employee under the elapsed time
method provided hereunder for the period of time beginning on the
day after the last day of the computation period in which the
transfer or the effective date of the amendment occurs.
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ARTICLE III
ELIGIBILITY
3.1 - ELIGIBILITY
Each Employee who was an Eligible Employee immediately prior to the effective
date of this amendment and restatement shall continue to be an Eligible
Employee. Each other Employee shall become an Eligible Employee for purposes of
electing to make Tax-Deferred Contributions under the Plan as of the Enrollment
Date next following his date of hire. Each other Employee shall become an
Eligible Employee for purposes of the Profit-Sharing Contribution and Matching
Contribution portions of the Plan as of the Enrollment Date coinciding with or
next following the date he completes one year of Eligibility Service.
3.2 - TRANSFERS OF EMPLOYMENT
If a person is transferred directly from employment with an Employer or with a
Related Company in a capacity other than as an Employee to employment as an
Employee, he shall become an Eligible Employee as of the date he is so
transferred if prior to an Enrollment Date preceding such transfer date he has
met the eligibility requirements of Section 3.1. Otherwise, the eligibility of a
person who is so transferred shall be determined in accordance with Section 3.1.
3.3 - REEMPLOYMENT
If a person who terminated employment with an Employer and all Related Companies
is reemployed as an Employee and if he had been an Eligible Employee prior to
his termination of employment, he shall again become an Eligible Employee on the
date he is reemployed. Otherwise, the eligibility of a person who terminated
employment with an Employer and all Related Companies and who is reemployed by
an Employer or a Related Company shall be determined in accordance with Section
3.1 or 3.2.
3.4 - NOTIFICATION CONCERNING NEW ELIGIBLE EMPLOYEES
Each Employer shall notify the Administrator as soon as practicable of Employees
becoming Eligible Employees as of any date.
3.5 - EFFECT AND DURATION
Upon becoming an Eligible Employee, an Employee shall be bound by all the terms
and conditions of the Plan and the Trust Agreement.
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A person shall continue as an Eligible Employee only so long as he continues in
employment as an Employee.
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ARTICLE IV
TAX-DEFERRED CONTRIBUTIONS
4.1 - TAX-DEFERRED CONTRIBUTIONS
Effective as of the date he becomes an Eligible Employee, or any subsequent
Enrollment Date, each Eligible Employee may elect in writing in accordance with
rules prescribed by the Administrator to have Tax-Deferred Contributions made to
the Plan on his behalf by his Employer as hereinafter provided. An Eligible
Employee's written election shall include his authorization for his Employer to
reduce his Compensation and to make Tax-Deferred Contributions on his behalf and
his election as to the investment of his contributions in accordance with
Article X. Tax-Deferred Contributions on behalf of an Eligible Employee shall
commence with the first payment of Compensation made on or after the date on
which his election is effective.
4.2 - AMOUNT OF TAX-DEFERRED CONTRIBUTIONS
The amount of Tax-Deferred Contributions to be made to the Plan on behalf of an
Eligible Employee by his Employer shall be an integral percentage of his
Compensation of not less than 1 percent nor more than 15 percent, subject to the
overall limitation described in Section 7.10. In the event an Eligible Employee
elects to have his Employer make Tax-Deferred Contributions on his behalf, his
Compensation shall be reduced for each payroll period by the percentage he
elects to have contributed on his behalf to the Plan in accordance with the
terms of his currently effective reduction authorization.
4.3 - CHANGES IN REDUCTION AUTHORIZATION
An Eligible Employee may change the percentage of his future Compensation that
his Employer contributes on his behalf as Tax-Deferred Contributions at such
time or times during the Plan Year as the Administrator may prescribe by filing
an amended reduction authorization with his Employer such number of days prior
to the date such change is to become effective as the Administrator shall
prescribe. An Eligible Employee who changes his reduction authorization shall be
limited to selecting a percentage of his Compensation that is otherwise
permitted hereunder. Tax-Deferred Contributions shall be made on behalf of such
Eligible Employee by his Employer pursuant to his amended reduction
authorization filed in accordance with this Section commencing with Compensation
paid to the Eligible Employee on or after the date such filing is effective,
until otherwise altered or terminated in accordance with the Plan.
14
4.4 - SUSPENSION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee on whose behalf Tax-Deferred Contributions are being made
may have such contributions suspended at any time by giving such number of days
advance written notice to his Employer as the Administrator shall prescribe. Any
such voluntary suspension shall take effect commencing with Compensation paid to
such Eligible Employee on or after the expiration of the required notice period
and shall remain in effect until Tax-Deferred Contributions are resumed as
hereinafter set forth.
4.5 - RESUMPTION OF TAX-DEFERRED CONTRIBUTIONS
An Eligible Employee who has voluntarily suspended his Tax-Deferred
Contributions may have such contributions resumed at such time or times during
the Plan Year as the Administrator may prescribe, by filing a new reduction
authorization with his Employer such number of days prior to the date as of
which such contributions are to be resumed as the Administrator shall prescribe.
4.6 - DELIVERY OF TAX-DEFERRED CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets, each Employer shall cause to
be delivered to the Trustee in cash all Tax-Deferred Contributions attributable
to such amounts.
4.7 - VESTING OF TAX-DEFERRED CONTRIBUTIONS
A Participant's vested interest in his Tax-Deferred Contributions Sub-Account
shall be at all times 100 percent.
15
ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS
5.1 - AFTER-TAX CONTRIBUTIONS
An Eligible Employee may elect in writing in accordance with rules prescribed by
the Administrator to make After-Tax Contributions to the Plan. After-Tax
Contributions may be made either by payroll withholding and/or by delivery of a
cash amount to an Eligible Employee's Employer, as determined by the
Administrator. If the Eligible Employee does not already have an investment
election on file with the Administrator, his election to make After-Tax
Contributions to the Plan shall include his election as to the investment of his
contributions in accordance with Article X. An Eligible Employee's election to
make After-Tax Contributions by payroll withholding may be made effective as of
any Enrollment Date occurring on or after the date on which he becomes an
Eligible Employee. After-Tax Contributions by payroll withholding shall commence
with the first payment of Compensation made on or after the Enrollment Date on
which the Eligible Employee's election is effective.
5.2 - AMOUNT OF AFTER-TAX CONTRIBUTIONS BY PAYROLL WITHHOLDING
The amount of After-Tax Contributions made by an Eligible Employee by payroll
withholding shall be an integral percentage of his Compensation of not less than
1 percent nor more than 10 percent, subject to the overall limitation described
in Section 7.10.
5.3 - CHANGES IN PAYROLL WITHHOLDING AUTHORIZATION
An Eligible Employee may change the percentage of his future Compensation that
he contributes to the Plan as After-Tax Contributions by payroll withholding at
such time or times during the Plan Year as the Administrator may prescribe by
filing an amended payroll withholding authorization with his Employer such
number of days prior to the date such change is to become effective as the
Administrator shall prescribe. An Eligible Employee who changes his payroll
withholding authorization shall be limited to selecting a percentage of his
Compensation that is otherwise permitted under Section 5.2. After-Tax
Contributions shall be made pursuant to an Eligible Employee's amended payroll
withholding authorization filed in accordance with this Section commencing with
Compensation paid to the Eligible Employee on or after the date such filing is
effective, until otherwise altered or terminated in accordance with the Plan.
16
5.4 - SUSPENSION OF AFTER-TAX CONTRIBUTIONS BY PAYROLL
WITHHOLDING
An Eligible Employee who is making After-Tax Contributions by payroll
withholding may have such contributions suspended at any time by giving such
number of days advance written notice to his Employer as the Administrator shall
prescribe. Any such voluntary suspension shall take effect commencing with
Compensation paid to such Eligible Employee on or after the expiration of the
required notice period and shall remain in effect until After-Tax Contributions
are resumed as hereinafter set forth.
5.5 - RESUMPTION OF AFTER-TAX CONTRIBUTIONS BY PAYROLL
WITHHOLDING
An Eligible Employee who has voluntarily suspended his After-Tax Contributions
made by payroll withholding in accordance with Section 5.4 may have such
contributions resumed at such time or times during the Plan Year as the
Administrator may prescribe by filing a new payroll withholding authorization
with his Employer such number of days prior to the date as of which such
contributions are to be resumed as the Administrator shall prescribe.
5.6 - ROLLOVER CONTRIBUTIONS
An Employee who was a participant in a plan qualified under Section 401 or 403
of the Code and who is entitled to a cash distribution from such plan that he
elects (i) to roll over directly to a qualified retirement plan, (ii) to roll
over to a qualified retirement plan within 60 days of receipt of such
distribution or (iii) to roll over into a conduit IRA from which he receives a
later cash distribution, may elect to make a Rollover Contribution to the Plan
if he is entitled under Section 402(c), Section 403(a)(4), or Section
408(d)(3)(A) of the Code to roll over such distribution to another qualified
retirement plan. The Administrator may require an Employee to provide it with
such information as it deems necessary or desirable to show that he is entitled
to roll over such distribution to another qualified retirement plan. An Employee
shall make a Rollover Contribution to the Plan by delivering, or causing to be
delivered, to the Trustee the cash that constitutes the Rollover Contribution
amount within 60 days of receipt of the distribution from the plan or from the
conduit IRA in the manner prescribed by the Administrator. If the Employee does
not already have an investment election on file with the Administrator, the
Employee shall also deliver to the Administrator his election as to the
investment of his contributions in accordance with Article X.
17
5.7 - DELIVERY OF AFTER-TAX CONTRIBUTIONS
As soon after the date an amount would otherwise be paid to an Employee as it
can reasonably be separated from Employer assets or as soon as reasonably
practicable after an amount has been delivered to an Employer by an Employee,
the Employer shall cause to be delivered to the Trustee in cash the After-Tax
Contributions attributable to such amount.
5.8 - VESTING OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS
A Participant's vested interest in his After-Tax Contributions Sub-Account and
his Rollover Contributions Sub-Account shall be at all times 100 percent.
18
ARTICLE VI
EMPLOYER CONTRIBUTIONS
6.1 - CONTRIBUTION PERIOD
The Contribution Period for Employer Contributions under the Plan shall be each
Plan Year.
6.2 - PROFIT-SHARING CONTRIBUTIONS
Each Employer may, in its discretion, make a Profit-Sharing Contribution to the
Plan for the Contribution Period in an amount determined by the Sponsor.
6.3 - ALLOCATION OF PROFIT-SHARING CONTRIBUTIONS
Any Profit-Sharing Contribution made for a Contribution Period shall be
allocated among the Employees who are eligible to participate in the allocation
of Profit-Sharing Contributions for the Contribution Period, as determined under
this Article. The allocable share of each such Employee shall be in the ratio
which his Compensation from the Employers for the Contribution Period bears to
the aggregate of such Compensation for all such Employees. Notwithstanding any
other provision of the Plan to the contrary, Compensation with respect to any
period ending prior to the date on which an Employee first became eligible to
participate in the allocation of Profit-Sharing Contributions shall be
disregarded in determining the amount of the Employee's allocable share.
6.4 - QUALIFIED NONELECTIVE CONTRIBUTIONS
Each Employer may, in its discretion, make a Qualified Nonelective Contribution
to the Plan for the Contribution Period in an amount determined by the Sponsor.
6.5 - ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS
Any Qualified Nonelective Contribution made by an Employer for the Contribution
Period shall be allocated among its Employees during the Contribution Period who
are eligible to participate in the allocation of Qualified Nonelective
Contributions for the Contribution Period, as determined under this Article,
other than any such Employee who is a Highly Compensated Employee. The allocable
share of each such Employee shall be either (i) in the ratio which his
Compensation from the Employer for the Contribution Period bears to the
aggregate of such Compensation for all such Employees or (ii) a flat dollar
amount, as determined by the Sponsor for the Contribution Period.
19
Notwithstanding any other provision of the Plan to the contrary, Compensation
with respect to any period ending prior to the date on which an Employee first
became eligible to participate in the allocation of Qualified Nonelective
Contributions shall be disregarded in determining the amount of the Employee's
allocable share.
6.6 - MATCHING CONTRIBUTIONS
Each Employer may make a Matching Contribution to the Plan for each Contribution
Period in an amount equal to the percentage, determined by the Sponsor, in its
discretion, for the Contribution Period, of the Tax-Deferred Contributions for
the Contribution Period made on behalf of its Employees during the Contribution
Period who are eligible to participate in the allocation of Matching
Contributions for the Contribution Period as determined under this Article.
6.7 - ALLOCATION OF MATCHING CONTRIBUTIONS
Any Matching Contribution made by an Employer for the Contribution Period shall
be allocated among its Employees during the Contribution Period who are eligible
to participate in the allocation of Matching Contributions for the Contribution
Period, as determined under this Article. The allocable share of each such
Employee shall be an amount equal to the percentage determined by the Sponsor of
the Tax-Deferred Contributions made on his behalf for the Contribution Period.
6.8 - VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE
SPONSOR
The Sponsor shall verify the amount of Employer Contributions to be made by each
Employer in accordance with the provisions of the Plan. Notwithstanding any
other provision of the Plan to the contrary, the Sponsor shall determine the
portion of the Employer Contribution to be made by each Employer with respect to
an Employee who transfers from employment with one Employer as an Employee to
employment with another Employer as an Employee.
6.9 - PAYMENT OF EMPLOYER CONTRIBUTIONS
Employer Contributions made for a Contribution Period shall be paid in cash or
in qualifying employer securities, as defined in Section 407(d)(5) of ERISA, to
the Trustee within the period of time required under the Code in order for the
contribution to be deductible by the Employer in determining its Federal income
taxes for the Plan Year.
20
6.10 - ELIGIBILITY TO PARTICIPATE IN ALLOCATION
Each Employee shall be eligible to participate in the allocation of Employer
Contributions beginning on the date he becomes, or again becomes, an Eligible
Employee in accordance with the provisions of Article III. Notwithstanding any
other provision of the Plan to the contrary, no person shall be eligible to
participate in the allocation of Profit-Sharing Contributions for a Contribution
Period unless (i) he is employed by an Employer or a Related Company on the last
day of the Contribution Period and (ii) he has completed at least 1,000 Hours of
Service during the Plan Year; provided, however, that if the Plan would not
otherwise meet the minimum coverage requirements of Section 410(b) of the Code
in any Plan Year, the group of Employees eligible to participate in the
allocation of Profit-Sharing Contributions shall be expanded to include the
minimum number of Employees who would be eligible to participate except for
their failure to complete the required number of Hours of Service during the
Plan Year that is necessary to meet the minimum coverage requirements. The
Employees who become eligible to participate under the provisions of the
immediately preceding clause shall be those Employees who have completed the
greatest number of Hours of Service during the Plan Year. If the Plan still
would not meet the minimum coverage requirements of Section 410(b) of the Code,
the group of Employees shall be expanded further to include the minimum number
of Employees who are not employed by an Employer or a Related Company on the
last day of the Contribution Period that is necessary to meet the minimum
coverage requirements. The Employees who become eligible to participate under
the provisions of the immediately preceding sentence shall be those Employees
who have completed the greatest number of Hours of Service during the
Contribution Period.
6.11 - VESTING OF EMPLOYER CONTRIBUTIONS
A Participant's vested interest in his Qualified Nonelective Contributions
Sub-Account shall be at all times 100 percent. A Participant's vested interest
in his Profit-Sharing and Matching Contributions Sub-Accounts shall be
determined in accordance with the following schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
21
Notwithstanding the foregoing, if a Participant is employed by an Employer or a
Related Company on his Normal Retirement Date, the date he becomes physically or
mentally disabled such that he can no longer continue in the service of his
Employer and is eligible to receive a disability benefit under the terms of the
Social Security Act, the date his employment terminates due to a reduction in
workforce as determined by the Employer, or the date he dies, his vested
interest in his Profit-Sharing and Matching Contributions Sub-Accounts shall be
100 percent.
6.12 - ELECTION OF FORMER VESTING SCHEDULE
If the Sponsor adopts an amendment to the Plan that directly or indirectly
affects the computation of a Participant's vested interest in his Employer
Contributions Sub-Account, any Participant with three or more years of Vesting
Service shall have a right to have his vested interest in his Employer
Contributions Sub-Account continue to be determined under the vesting provisions
in effect prior to the amendment rather than under the new vesting provisions,
unless the vested interest of the Participant in his Employer Contributions
Sub-Account under the Plan as amended is not at any time less than such vested
interest determined without regard to the amendment. A Participant shall
exercise his right under this Section by giving written notice of his exercise
thereof to the Administrator within 60 days after the latest of (i) the date he
receives notice of the amendment from the Administrator, (ii) the effective date
of the amendment, or (iii) the date the amendment is adopted. Notwithstanding
the foregoing, a Participant's vested interest in his Employer Contributions
Sub-Account on the effective date of such an amendment shall not be less than
his vested interest in his Employer Contributions Sub-Account immediately prior
to the effective date of the amendment.
6.13 - FORFEITURES TO REDUCE EMPLOYER CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, the amount of
the Employer Contribution required under this Article for a Plan Year shall be
reduced by the amount of any forfeitures occurring during the Plan Year that are
not used to pay Plan expenses.
22
ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS
7.1 - DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) The "actual deferral percentage" with respect to an Eligible
Employee for a particular Plan Year means the ratio of the
Tax-Deferred Contributions made on his behalf for the Plan Year
to his test compensation for the Plan Year, except that, to the
extent permitted by regulations issued under Section 401(k) of
the Code, the Sponsor may elect to take into account in computing
the numerator of each Eligible Employee's actual deferral
percentage the qualified nonelective contributions made to the
Plan on his behalf for the Plan Year; provided, however, that
contributions made on a Participant's behalf for a Plan Year
shall be included in determining his actual deferral percentage
for such Plan Year only if the contributions are made to the Plan
prior to the end of the 12-month period immediately following the
Plan Year to which the contributions relate. The determination
and treatment of the actual deferral percentage amounts for any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(b) The "aggregate limit" means the sum of (i) 125 percent of the
greater of the average contribution percentage for eligible
participants other than Highly Compensated Employees or the
average actual deferral percentage for Eligible Employees other
than Highly Compensated Employees and (ii) the lesser of 200
percent or two plus the lesser of such average contribution
percentage or average actual deferral percentage, or, if it would
result in a larger aggregate limit, the sum of (iii) 125 percent
of the lesser of the average contribution percentage for eligible
participants other than Highly Compensated Employees or the
average actual deferral percentage for Eligible Employees other
than Highly Compensated Employees and (iv) the lesser of 200
percent or two plus the greater of such average contribution
percentage or average actual deferral percentage.
(c) The "annual addition" with respect to a Participant for a
limitation year means the sum of the Tax-Deferred Contributions,
Employer Contributions, and After-Tax Contributions allocated to
his Separate Account for the
23
limitation year (including any excess contributions that are
distributed pursuant to this Article), the employer
contributions, employee contributions, and forfeitures allocated
to his accounts for the limitation year under any other qualified
defined contribution plan (whether or not terminated) maintained
by an Employer or a Related Company concurrently with the Plan,
and amounts described in Sections 415(l)(2) and 419A(d)(2) of the
Code allocated to his account for the limitation year; provided,
however, that the annual addition for limitation years beginning
prior to January 1, 1987 shall not be recalculated to treat all
After-Tax Contributions and employee contributions as annual
additions.
(d) The "Code Section 402(g) limit" means the dollar limit imposed by
Section 402(g)(1) of the Code or established by the Secretary of
the Treasury pursuant to Section 402(g)(5) of the Code in effect
on January 1 of the calendar year in which an Eligible Employee's
taxable year begins.
(e) The "contribution percentage" with respect to an eligible
participant for a particular Plan Year means the ratio of the sum
of the matching contributions made to the Plan on his behalf and
the After-Tax Contributions made by him for the Plan Year to his
test compensation for such Plan Year, except that, to the extent
permitted by regulations issued under Section 401(m) of the Code,
the Sponsor may elect to take into account in computing the
numerator of each eligible participant's contribution percentage
the Tax-Deferred Contributions and/or qualified nonelective
contributions made to the Plan on his behalf for the Plan Year;
provided, however, that any Tax-Deferred Contributions and/or
qualified nonelective contributions that were taken into account
in computing the numerator of an eligible participant's actual
deferral percentage may not be taken into account in computing
the numerator of his contribution percentage; and provided,
further, that contributions made by or on a Participant's behalf
for a Plan Year shall be included in determining his contribution
percentage for such Plan Year only if the contributions are made
to the Plan prior to the end of the 12-month period immediately
following the Plan Year to which the contributions relate. The
determination and treatment of the contribution percentage
amounts for any Participant shall satisfy such other requirements
as may be prescribed by the Secretary of the Treasury.
(f) An "elective contribution" means any employer contribution made
to a plan maintained by an Employer or any Related
24
Company on behalf of a Participant in lieu of cash compensation
pursuant to his written election to defer under any qualified
CODA as described in Section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in
Section 402(h)(1)(B) of the Code, any eligible deferred
compensation plan under Section 457 of the Code, or any plan as
described in Section 501(c)(18) of the Code, and any contribution
made on behalf of the Participant by an Employer or a Related
Company for the purchase of an annuity contract under Section
403(b) of the Code pursuant to a salary reduction agreement.
(g) An "eligible participant" means any Employee who is eligible to
make After-Tax Contributions or to have Tax-Deferred
Contributions made on his behalf (if Tax-Deferred Contributions
are taken into account in computing contribution percentages) or
to participate in the allocation of matching contributions.
(h) An "excess deferral" with respect to a Participant means that
portion of a Participant's Tax-Deferred Contributions that when
added to amounts deferred under other plans or arrangements
described in Sections 401(k), 408(k), or 403(b) of the Code,
would exceed the Code Section 402(g) limit and is includable in
the Participant's gross income under Section 402(g) of the Code.
(i) A "family member" of an Employee means the Employee's spouse, his
lineal ascendants, his lineal descendants, and the spouses of
such lineal ascendants and descendants.
(j) A "limitation year" means the calendar year.
(k) A "matching contribution" means any employer contribution
allocated to an Eligible Employee's account under the Plan or any
other plan of an Employer or a Related Company solely on account
of elective contributions made on his behalf or employee
contributions made by him.
(l) A "qualified nonelective contribution" means any employer
contribution made on behalf of a Participant that the Participant
could not elect instead to receive in cash, that is a qualified
nonelective contribution as defined in Section 401(k) and Section
401(m) of the Code and regulations issued thereunder, is
nonforfeitable when made, and is distributable only as permitted
in regulations issued under Section 401(k) of the Code.
25
(m) The "test compensation" of an Eligible Employee for a Plan Year
means compensation as defined in Section 414(s) of the Code and
regulations issued thereunder, limited, however, to (1) $200,000
for Plan Years beginning prior to January 1, 1994, or (2)
$150,000 for Plan Years beginning on or after January 1, 1994
(subject to adjustment annually as provided in Section
401(a)(17)(B) and Section 415(d) of the Code; provided, however,
that the dollar increase in effect on January 1 of any calendar
year, if any, is effective for Plan Years beginning in such
calendar year). If the test compensation of a Participant is
determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation
described above shall be adjusted with respect to that
Participant by multiplying the annual compensation limitation in
effect for the Plan Year by a fraction the numerator of which is
the number of full months in the period and the denominator of
which is 12; provided, however, that no proration is required for
a Participant who is covered under the Plan for less than one
full Plan Year if the formula for allocations is based on
Compensation for a period of at least 12 months. In determining
the test compensation, for purposes of applying the annual
compensation limitation described above, of a Participant who is
a five percent owner or among the ten Highly Compensated
Employees receiving the greatest test compensation for the
limitation year, the test compensation of the Participant's
spouse and of his lineal descendants who have not attained age 19
as of the close of the limitation year shall be included as test
compensation of the Participant for the limitation year. If as a
result of applying the family aggregation rule described in the
preceding sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the affected
family members in proportion to each member's test compensation
as determined prior to application of the family aggregation
rules.
7.2 - CODE SECTION 402(G) LIMIT
In no event shall the amount of the Tax-Deferred Contributions made on behalf of
an Eligible Employee for his taxable year, when aggregated with any elective
contributions made on behalf of the Eligible Employee under any other plan of an
Employer or a Related Company for his taxable year, exceed the Code Section
402(g) limit. In the event that the Administrator determines that the reduction
percentage elected by an Eligible Employee will result in his exceeding the Code
Section 402(g) limit, the Administrator may adjust the reduction authorization
26
of such Eligible Employee by reducing the percentage of his Tax-Deferred
Contributions to such smaller percentage that will result in the Code Section
402(g) limit not being exceeded. If the Administrator determines that the
Tax-Deferred Contributions made on behalf of an Eligible Employee would exceed
the Code Section 402(g) limit for his taxable year, the Tax-Deferred
Contributions for such Participant shall be automatically suspended for the
remainder, if any, of such taxable year.
If an Employer notifies the Administrator that the Code Section 402(g) limit has
nevertheless been exceeded by an Eligible Employee for his taxable year, the
Tax-Deferred Contributions that, when aggregated with elective contributions
made on behalf of the Eligible Employee under any other plan of an Employer or a
Related Company, would exceed the Code Section 402(g) limit, plus any income and
minus any losses attributable thereto, shall be distributed to the Eligible
Employee no later than the April 15 immediately following such taxable year. Any
Tax-Deferred Contributions that are distributed to an Eligible Employee in
accordance with this Section shall NOT be taken into account in computing the
Eligible Employee's actual deferral percentage for the Plan Year in which the
Tax-Deferred Contributions were made, unless the Eligible Employee is a Highly
Compensated Employee. If an amount of Tax-Deferred Contributions is distributed
to a Participant in accordance with this Section, matching contributions that
are attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be treated as a forfeiture under
the Plan in accordance with the provisions of Article XIV as of the last day of
the month in which the distribution of Tax-Deferred Contributions pursuant to
this Section occurs.
7.3 - DISTRIBUTION OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan to the contrary, if a
Participant notifies the Administrator in writing no later than the March 1
following the close of the Participant's taxable year that excess deferrals have
been made on his behalf under the Plan for such taxable year, the excess
deferrals, plus any income and minus any losses attributable thereto, shall be
distributed to the Participant no later than the April 15 immediately following
such taxable year. Any Tax-Deferred Contributions that are distributed to a
Participant in accordance with this Section shall nevertheless be taken into
account in computing the Participant's actual deferral percentage for the Plan
Year in which the Tax-Deferred Contributions were made. If an amount of
Tax-Deferred Contributions is distributed to a Participant in accordance with
this Section, matching contributions that are
27
attributable solely to the distributed Tax-Deferred Contributions, plus any
income and minus any losses attributable thereto, shall be forfeited by the
Participant. Any such forfeited amounts shall be treated as a forfeiture under
the Plan in accordance with the provisions of Article XIV as of the last day of
the month in which the distribution of Tax-Deferred Contributions pursuant to
this Section occurs.
7.4 - LIMITATION ON TAX-DEFERRED CONTRIBUTIONS OF HIGHLY
COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the
Tax-Deferred Contributions made with respect to a Plan Year on behalf of
Eligible Employees who are Highly Compensated Employees may not result in an
average actual deferral percentage for such Eligible Employees that exceeds the
greater of:
(a) a percentage that is equal to 125 percent of the average actual
deferral percentage for all other Eligible Employees; or
(b) a percentage that is not more than 200 percent of the average actual
deferral percentage for all other Eligible Employees and that is not
more than two percentage points higher than the average actual
deferral percentage for all other Eligible Employees.
In order to assure that the limitation contained herein is not exceeded with
respect to a Plan Year, the Administrator is authorized to suspend completely
further Tax-Deferred Contributions on behalf of Highly Compensated Employees for
any remaining portion of a Plan Year or to adjust the projected actual deferral
percentages of Highly Compensated Employees by reducing their percentage
elections with respect to Tax-Deferred Contributions for any remaining portion
of a Plan Year to such smaller percentages that will result in the limitation
set forth above not being exceeded. In the event of any such suspension or
reduction, Highly Compensated Employees affected thereby shall be notified of
the reduction or suspension as soon as possible and shall be given an
opportunity to make a new Tax-Deferred Contribution election to be effective the
first day of the next following Plan Year. In the absence of such an election,
the election in effect immediately prior to the suspension or adjustment
described above shall be reinstated as of the first day of the next following
Plan Year.
For purposes of applying the limitation contained in this Section, the
Tax-Deferred Contributions, qualified nonelective contributions (to the extent
that such qualified nonelective contributions are taken into account in
computing actual deferral
28
percentages), and test compensation of any Eligible Employee who is a family
member of another Eligible Employee who is a five percent owner or among the ten
Highly Compensated Employees receiving the greatest test compensation for the
Plan Year shall be aggregated with the Tax-Deferred Contributions, qualified
nonelective contributions, and test compensation of such other Eligible
Employee, and such family member shall not be considered an Eligible Employee
for purposes of determining the average actual deferral percentage for all other
Eligible Employees.
In determining the actual deferral percentage for any Eligible Employee who is a
Highly Compensated Employee for the Plan Year, elective contributions and
qualified nonelective contributions (to the extent that qualified nonelective
contributions are taken into account in computing actual deferral percentages)
made to his accounts under any other plan of an Employer or a Related Company
shall be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the
Plan Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(k) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, then actual deferral percentages under the Plan shall be calculated
as if the Plan and such one or more other plans were a single plan. For Plan
Years beginning after December 31, 1991, plans may be aggregated to satisfy
Section 401(k) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the qualified nonelective contributions taken into account in
computing actual deferral percentages for any Plan Year.
7.5 - DISTRIBUTION OF EXCESS TAX-DEFERRED CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.4 is exceeded in any Plan Year, the
Tax-Deferred Contributions made with respect to a Highly Compensated Employee
that exceed the maximum amount permitted to be contributed to the Plan on his
behalf under Section 7.4, plus any income and minus any losses
29
attributable thereto, shall be distributed to the Highly Compensated Employee
prior to the end of the next succeeding Plan Year. If excess amounts are
attributable to Participants aggregated under the family aggregation rules
described in Section 7.4, the excess shall be allocated among family members in
proportion to the Tax-Deferred Contributions made with respect to each family
member. If such excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year for which the excess occurred, an excise tax may be
imposed under Section 4979 of the Code on the Employer maintaining the Plan with
respect to such amounts.
The maximum amount permitted to be contributed to the Plan on a Highly
Compensated Employee's behalf under Section 7.4 shall be determined by reducing
Tax-Deferred Contributions made on behalf of Highly Compensated Employees in
order of their actual deferral percentages beginning with the highest of such
percentages. The determination of the amount of excess Tax-Deferred
Contributions shall be made after application of Section 7.3, if applicable.
If an amount of Tax-Deferred Contributions is distributed to a Participant in
accordance with this Section, matching contributions that are attributable
solely to the distributed Tax-Deferred Contributions, plus any income and minus
any losses attributable thereto, shall be forfeited by the Participant. Any such
forfeited amounts shall be treated as a forfeiture under the Plan in accordance
with the provisions of Article XIV as of the last day of the month in which the
distribution of Tax-Deferred Contributions pursuant to this Section occurs.
7.6 - LIMITATION ON MATCHING CONTRIBUTIONS AND AFTER-TAX
CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES
Notwithstanding any other provision of the Plan to the contrary, the matching
contributions and After-Tax Contributions made with respect to a Plan Year by or
on behalf of eligible participants who are Highly Compensated Employees may not
result in an average contribution percentage for such eligible participants that
exceeds the greater of:
(a) a percentage that is equal to 125 percent of the average contribution
percentage for all other eligible participants; or
(b) a percentage that is not more than 200 percent of the average
contribution percentage for all other eligible participants and that
is not more than two percentage points higher than the average
contribution percentage for all other eligible participants.
30
For purposes of applying the limitation contained in this Section, the matching
contributions, After-Tax Contributions, qualified nonelective contributions and
Tax-Deferred Contributions (to the extent that such qualified nonelective
contributions and Tax-Deferred Contributions are taken into account in computing
contribution percentages), and test compensation of any eligible participant who
is a family member of another eligible participant who is a five percent owner
or among the ten Highly Compensated Employees receiving the greatest test
compensation for the Plan Year shall be aggregated with the matching
contributions, After-Tax Contributions, qualified nonelective contributions,
Tax-Deferred Contributions, and test compensation of such other eligible
participant, and such family member shall not be considered an eligible
participant for purposes of determining the average contribution percentage for
all other eligible participants.
In determining the contribution percentage for any eligible participant who is a
Highly Compensated Employee for the Plan Year, matching contributions, employee
contributions, qualified nonelective contributions, and elective contributions
(to the extent that qualified nonelective contributions and elective
contributions are taken into account in computing contribution percentages) made
to his accounts under any other plan of an Employer or a Related Company shall
be treated as if all such contributions were made to the Plan; provided,
however, that if such a plan has a plan year different from the Plan Year, any
such contributions made to the Highly Compensated Employee's accounts under the
plan for the plan year ending with or within the same calendar year as the Plan
Year shall be treated as if such contributions were made to the Plan.
Notwithstanding the foregoing, such contributions shall not be treated as if
they were made to the Plan if regulations issued under Section 401(m) of the
Code do not permit such plan to be aggregated with the Plan.
If one or more plans of an Employer or a Related Company are aggregated with the
Plan for purposes of satisfying the requirements of Section 401(a)(4) or 410(b)
of the Code, the contribution percentages under the Plan shall be calculated as
if the Plan and such one or more other plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated to satisfy Section
401(m) of the Code only if they have the same plan year.
The Administrator shall maintain records sufficient to show that the limitation
contained in this Section was not exceeded with respect to any Plan Year and the
amount of the elective contributions and qualified nonelective contributions
taken into account in computing contribution percentages for any Plan Year.
31
7.7 - FORFEITURE OR DISTRIBUTION OF EXCESS CONTRIBUTIONS
Notwithstanding any other provision of the Plan to the contrary, in the event
that the limitation contained in Section 7.6 is exceeded in any Plan Year, the
matching contributions and After-Tax Contributions made by or on behalf of a
Highly Compensated Employee that exceed the maximum amount permitted to be
contributed to the Plan by or on behalf of such Highly Compensated Employee
under Section 7.6, plus any income and minus any losses attributable thereto,
shall be forfeited, to the extent forfeitable, or distributed to the Participant
prior to the end of the next succeeding Plan Year as hereinafter provided. If
excess amounts are attributable to Participants aggregated under the family
aggregation rules described in Section 7.5, the excess shall be allocated among
family members in proportion to the matching contributions and After-Tax
Contributions and qualified nonelective contributions (to the extent that
qualified nonelective contributions are taken into account in computing
contribution percentages) made with respect to each family member. If such
excess amounts are distributed more than 2 1/2 months after the last day of the
Plan Year for which the excess occurred, an excise tax may be imposed under
Section 4979 of the Code on the Employer maintaining the Plan with respect to
such amounts.
The maximum amount permitted to be contributed to the Plan by or on behalf of a
Highly Compensated Employee under Section 7.6 shall be determined by reducing
matching contributions and After-Tax Contributions made by or on behalf of
Highly Compensated Employees in order of their contribution percentages
beginning with the highest of such percentages. The distribution or forfeiture
requirement of this Section shall be satisfied by reducing contributions made by
or on behalf of the Highly Compensated Employee to the extent necessary in the
following order:
After-Tax Contributions made by the Highly Compensated Employee, if
any, shall be distributed.
Matching contributions attributable to Tax-Deferred Contributions
shall be distributed or forfeited, as appropriate.
Any amounts forfeited with respect to a Participant pursuant to this Section
shall be treated as a forfeiture under the Plan in accordance with the
provisions of Article XIV as of the last day of the month in which the
distribution of contributions pursuant to this Section occurs. The amount of
excess After-Tax Contributions of a Participant shall in all cases be
32
distributable; the excess matching contributions shall be distributable to the
extent the Participant has a vested interest in his Employer Contributions
Sub-Account that is attributable to matching contributions. The determination of
the amount of excess matching contributions and After-Tax Contributions shall be
made after application of Section 7.3, if applicable, and after application of
Section 7.5, if applicable.
7.8 - MULTIPLE USE LIMITATION
Notwithstanding any other provision of the Plan to the contrary, the following
multiple use limitation as required under Section 401(m) of the Code shall
apply: the sum of the average actual deferral percentage for Eligible Employees
who are Highly Compensated Employees and the average contribution percentage for
eligible participants who are Highly Compensated Employees may not exceed the
aggregate limit. In the event that, after satisfaction of Section 7.5 and
Section 7.7, it is determined that contributions under the Plan fail to satisfy
the multiple use limitation contained herein, the multiple use limitation shall
be satisfied by further reducing the actual deferral percentages of Eligible
Employees who are Highly Compensated Employees (beginning with the highest such
percentage) to the extent necessary to eliminate the excess, with such further
reductions to be treated as excess Tax-Deferred Contributions and disposed of as
provided in Section 7.5, or in an alternative manner, consistently applied, that
may be permitted by regulations issued under Section 401(m) of the Code.
7.9 - DETERMINATION OF INCOME OR LOSS
The income or loss attributable to excess contributions that are distributed
pursuant to this Article shall be determined for the preceding Plan Year under
the method otherwise used for allocating income or loss to Participant's
Separate Accounts.
7.10 - CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS
AND FORFEITURES
Notwithstanding any other provision of the Plan to the contrary, the annual
addition with respect to a Participant for a limitation year shall in no event
exceed the lesser of (i) $30,000 (adjusted as provided in Section 415(d) of the
Code, with the first adjustment being made for limitation years beginning on or
after January 1, 1996) or (ii) 25 percent of the Participant's compensation, as
defined in Section 415(c)(3) of the Code and regulations issued thereunder, for
the limitation year. If the annual addition to the Separate Account of a
Participant in any limitation year would otherwise exceed the amount that may be
applied for his benefit under the limitation
33
contained in this Section, the limitation shall be satisfied by reducing
contributions made by or on behalf of the Participant to the extent necessary in
the following order:
After-Tax Contributions made by the Participant for the limitation
year, if any, shall be reduced.
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have not been matched, if any, shall be
reduced.
Tax-Deferred Contributions made on the Participant's behalf for the
limitation year that have been matched and the matching
contributions attributable thereto, if any, shall be reduced pro
rata.
Employer Contributions (other than matching contributions and
qualified nonelective contributions) otherwise allocable to the
Participant's Separate Account for the limitation year shall be
reduced.
Qualified nonelective contributions made on the Participant's
behalf for the limitation year shall be reduced.
The amount of any reduction of Tax-Deferred Contributions or After-Tax
Contributions (plus any income attributable thereto) shall be returned to the
Participant. The amount of any reduction of Employer Contributions shall be
deemed a forfeiture for the limitation year. Amounts deemed to be forfeitures
under this Section shall be held unallocated in a suspense account established
for the limitation year and shall be applied against the Employer's contribution
obligation for the next following limitation year (and succeeding limitation
years, as necessary). If a suspense account is in existence at any time during a
limitation year, all amounts in the suspense account must be allocated to
Participants' Separate Accounts (subject to the limitations contained herein)
before any further Tax-Deferred Contributions, Employer Contributions, or
After-Tax Contributions may be made to the Plan by or on behalf of Participants.
No suspense account established hereunder shall share in any increase or
decrease in the net worth of the Trust. For purposes of this Article, excesses
shall result only from the allocation of forfeitures, a reasonable error in
estimating a Participant's annual compensation (as defined in Section 415(c)(3)
of the Code and regulations issued thereunder), a reasonable error in
determining the amount of Tax-Deferred Contributions that may be made with
respect to any Participant under the limits of Section 415 of the Code, or other
limited facts and circumstances that justify the availability of the provisions
set forth above.
34
7.11 - COVERAGE UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN
If a Participant is covered by any other qualified defined contribution plan
(whether or not terminated) maintained by an Employer or a Related Company
concurrently with the Plan, and if the annual addition for the limitation year
would otherwise exceed the amount that may be applied for the Participant's
benefit under the limitation contained in Section 7.10, such excess shall be
reduced first by returning the employee contributions made by the Participant
for the limitation year under all of the defined contribution plans other than
the Plan and the income attributable thereto to the extent necessary. If the
limitation contained in Section 7.10 is still not satisfied after returning all
of the employee contributions made by the Participant under all such other
plans, the excess shall be reduced by returning the elective contributions made
on the Participant's behalf for the limitation year under all such other plans
and the income attributable thereto to the extent necessary on a pro rata basis
among all of such plans. If the limitation contained in Section 7.10 is still
not satisfied after returning all of the elective contributions made on the
Participant's behalf under all such other plans, the procedure set forth in
Section 7.10 shall be invoked to eliminate any such excess. If the limitation
contained in Section 7.10 is still not satisfied after invocation of the
procedure set forth in Section 7.10, the portion of the employer contributions
and of forfeitures for the limitation year under all such other plans that has
been allocated to the Participant thereunder, but which exceeds the limitation
set forth in Section 7.10, shall be deemed a forfeiture for the limitation year
and shall be disposed of as provided in such other plans; provided, however,
that if the Participant is covered by a money purchase pension plan, the
forfeiture shall be effected first under any other defined contribution plan
that is not a money purchase pension plan and, if the limitation is still not
satisfied, then under such money purchase pension plan.
7.12 - COVERAGE UNDER QUALIFIED DEFINED BENEFIT PLAN
If a Participant in the Plan is also covered by a qualified defined benefit plan
(whether or not terminated) maintained by an Employer or a Related Company, in
no event shall the sum of the defined benefit plan fraction (as defined in
Section 415(e)(2) of the Code) and the defined contribution plan fraction (as
defined in Section 415(e)(3) of the Code) exceed 1.0 in any limitation year. If,
before October 3, 1973, the Participant was an active participant in a qualified
defined benefit plan maintained by an Employer or a Related Company and
otherwise satisfies the requirements of Section 2004(d)(2) of ERISA, then for
purposes of
35
applying this Section, the defined benefit plan fraction shall not exceed 1.0.
If the Plan satisfied the applicable requirements of Section 415 of the Code as
in effect for all limitation years beginning before January 1, 1987, an amount
shall be subtracted from the numerator of the defined contribution plan fraction
(not exceeding such numerator) as prescribed by the Secretary of the Treasury so
that the sum of the defined benefit plan fraction and the defined contribution
plan fraction computed under Section 415(e)(1) of the Code, as revised by the
Tax Reform Act of 1986, does not exceed 1.0 for such limitation year. In the
event the special limitation contained in this Section is exceeded, the benefits
otherwise payable to the Participant under any such qualified defined benefit
plan shall be reduced to the extent necessary to meet such limitation.
7.13 - SCOPE OF LIMITATIONS
The limitations contained in Sections 7.10, 7.11, and 7.12 shall be applicable
only with respect to benefits provided pursuant to defined contribution plans
and defined benefit plans described in Section 415(k) of the Code.
36
ARTICLE VIII
TRUST FUNDS AND SEPARATE ACCOUNTS
8.1 - GENERAL FUND
The Trustee shall maintain a General Fund as required to hold and administer any
assets of the Trust that are not allocated among the Investment Funds as
provided in the Plan or the Trust Agreement. The General Fund shall be held and
administered as a separate common trust fund. The interest of each Participant
or Beneficiary under the Plan in the General Fund shall be an undivided
interest. The General Fund may be invested in whole or in part in equity
securities issued by an Employer or a Related Company that are publicly traded
and are "qualifying employer securities" as defined in Section 407(d)(5) of
ERISA.
8.2 - INVESTMENT FUNDS
The Sponsor shall determine the number and type of Investment Funds and select
the investments for such Investment Funds. The number of Investment Funds and
the investments for such Investment Funds may be changed by the Sponsor from
time to time. The Sponsor shall communicate the same and any changes therein in
writing to the Administrator and the Trustee. Each Investment Fund shall be held
and administered as a separate common trust fund. The interest of each
Participant or Beneficiary under the Plan in any Investment Fund shall be an
undivided interest.
The Sponsor may determine to offer one or more Investment Funds that are
invested in whole or in part in equity securities issued by an Employer or a
Related Company that are publicly traded and are "qualifying employer
securities" as defined in Section 407(d)(5) of ERISA.
8.3 - LOAN INVESTMENT FUND
If a loan from the Plan to a Participant is approved in accordance with the
provisions of Article XII, the Sponsor shall direct the establishment and
maintenance of a loan Investment Fund in the Participant's name. The assets of
the loan Investment Fund shall be held as a separate trust fund. A Participant's
loan Investment Fund shall be invested in the note reflecting the loan that is
executed by the Participant in accordance with the provisions of Article XII.
Notwithstanding any other provision of the Plan to the contrary, income received
with respect to a Participant's loan Investment Fund shall be allocated and the
loan Investment Fund shall be administered as provided in Article XII.
37
8.4 - INCOME ON TRUST
Any dividends, interest, distributions, or other income received by the Trustee
with respect to any Trust Fund maintained hereunder shall be allocated by the
Trustee to the Trust Fund for which the income was received.
8.5 - SEPARATE ACCOUNTS
As of the first date a contribution is made by or on behalf of an Employee,
there shall be established a Separate Account in his name reflecting his
interest in the Trust. Each Separate Account shall be maintained and
administered for each Participant and Beneficiary in accordance with the
provisions of the Plan. The balance of each Separate Account shall be the
balance of the account after all credits and charges thereto, for and as of such
date, have been made as provided herein.
8.6 - SUB-ACCOUNTS
A Participant's Separate Account shall be divided into individual Sub-Accounts
reflecting the portion of the Participant's Separate Account that is derived
from Tax-Deferred Contributions, After- Tax Contributions, Rollover
Contributions, or Employer Contributions. Each Sub-Account shall reflect
separately contributions allocated to each Trust Fund maintained hereunder and
the earnings and losses attributable thereto. The Employer Contributions
Sub-Account shall reflect separately that portion of such Sub-Account that is
derived from Employer Contributions that may be taken into account to satisfy
the limitations on contributions for Highly Compensated Employees contained in
Article VII. Such other Sub-Accounts may be established as are necessary or
appropriate to reflect a Participant's interest in the Trust.
38
ARTICLE IX
LIFE INSURANCE CONTRACTS
9.1 - NO LIFE INSURANCE CONTRACTS
There shall be no life insurance contracts purchased under the Plan.
39
ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS
10.1 - FUTURE CONTRIBUTION INVESTMENT ELECTIONS
Each Eligible Employee shall make an investment election in the manner and form
prescribed by the Administrator directing the manner in which his Tax-Deferred
Contributions, After-Tax Contributions, Rollover Contributions, and Employer
Contributions shall be invested. An Eligible Employee's investment election
shall specify the percentage, in the percentage increments prescribed by the
Administrator, of such contributions that shall be allocated to one or more of
the Investment Funds with the sum of such percentages equaling 100 percent. The
investment election by a Participant shall remain in effect until his entire
interest under the Plan is distributed or forfeited in accordance with the
provisions of the Plan or until he files a change of investment election with
the Administrator, in such form as the Administrator shall prescribe. A
Participant's change of investment election may be made effective as of the date
or dates prescribed by the Administrator.
10.2 - DEPOSIT OF CONTRIBUTIONS
All Tax-Deferred Contributions, After-Tax Contributions, Rollover Contributions,
and Employer Contributions shall be deposited in the Trust and allocated among
the Investment Funds in accordance with the Participant's currently effective
investment election; provided, however, that any contributions made to the Plan
in qualifying employer securities shall be allocated to the Employer securities
Investment Fund established by the Sponsor, pending directions to the
Administrator regarding their future investment. If no investment election is on
file with the Administrator at the time contributions are to be deposited to a
Participant's Separate Account, the Participant shall be notified and an
investment election form shall be provided to him. Until such Participant shall
make an effective election under this Section, his contributions shall be
allocated among the Investment Funds as directed by the Administrator.
10.3 - ELECTION TO TRANSFER BETWEEN FUNDS
A Participant may elect to transfer investments from any Investment Fund to any
other Investment Fund. The Participant's transfer election shall specify either
(i) a percentage, in the percentage increments prescribed by the Administrator,
of the amount eligible for transfer, which percentage may not exceed 100
percent, or (ii) a dollar amount that is to be transferred. Subject to any
restrictions pertaining to a particular Investment
40
Fund, a Participant's transfer election may be made effective as of the date or
dates prescribed by the Administrator.
41
ARTICLE XI
CREDITING AND VALUING SEPARATE ACCOUNTS
11.1 - CREDITING SEPARATE ACCOUNTS
All contributions made under the provisions of the Plan shall be credited to
Separate Accounts in the Trust Funds by the Trustee, in accordance with
procedures established in writing by the Administrator, either when received or
on the succeeding Valuation Date after valuation of the Trust Fund has been
completed for such Valuation Date as provided in Section 11.2, as shall be
determined by the Administrator.
11.2 - VALUING SEPARATE ACCOUNTS
Separate Accounts in the Trust Funds shall be valued by the Trustee on the
Valuation Date, in accordance with procedures established in writing by the
Administrator, either in the manner adopted by the Trustee and approved by the
Administrator or in the manner set forth in Section 11.3 as Plan valuation
procedures, as determined by the Administrator.
11.3 - PLAN VALUATION PROCEDURES
With respect to the Trust Funds, the Administrator may determine that the
following valuation procedures shall be applied. As of each Valuation Date
hereunder, the portion of any Separate Accounts in a Trust Fund shall be
adjusted to reflect any increase or decrease in the value of the Trust Fund for
the period of time occurring since the immediately preceding Valuation Date for
the Trust Fund (the "valuation period") in the following manner:
(a) First, the value of the Trust Fund shall be determined by valuing
all of the assets of the Trust Fund at Fair Market Value.
(b) Next, the net increase or decrease in the value of the Trust Fund
attributable to net income and all profits and losses, realized
and unrealized, during the valuation period shall be determined
on the basis of the valuation under paragraph (a) taking into
account appropriate adjustments for contributions, loan payments,
and transfers to and distributions, withdrawals, loans, and
transfers from such Trust Fund during the valuation period.
(c) Finally, the net increase or decrease in the value of the Trust
Fund shall be allocated among Separate Accounts in
42
the Trust Fund in the ratio of the balance of the portion of such
Separate Account in the Trust Fund as of the preceding Valuation
Date less any distributions, withdrawals, loans, and transfers
from such Separate Account balance in the Trust Fund since the
Valuation Date to the aggregate balances of the portions of all
Separate Accounts in the Trust Fund similarly adjusted, and each
Separate Account in the Trust Fund shall be credited or charged
with the amount of its allocated share. Notwithstanding the
foregoing, the Administrator may adopt such accounting procedures
as it considers appropriate and equitable to establish a
proportionate crediting of net increase or decrease in the value
of the Trust Fund for contributions, loan payments, and transfers
to and distributions, withdrawals, loans, and transfers from such
Trust Fund made by or on behalf of a Participant during the
valuation period.
11.4 - FINALITY OF DETERMINATIONS
The Trustee shall have exclusive responsibility for determining the balance of
each Separate Account maintained hereunder. The Trustee's determinations thereof
shall be conclusive upon all interested parties.
11.5 - NOTIFICATION
Within a reasonable period of time after the end of each Plan Year, the
Administrator shall notify each Participant and Beneficiary of the balances of
his Separate Account and Sub-Accounts as of a Valuation Date during the Plan
Year.
43
ARTICLE XII
LOANS
12.1 - APPLICATION FOR LOAN
A Participant who is a party in interest, other than a shareholder employee, as
defined in Section 408(d)(3) of ERISA, may make written application to the
Administrator for a loan from his Separate Account.
As collateral for any loan granted hereunder, the Participant shall grant to the
Plan a security interest in his vested interest under the Plan equal to the
amount of the loan; provided, however, that in no event may the security
interest exceed 50 percent of the Participant's vested interest under the Plan
determined as of the date as of which the loan is originated in accordance with
Plan provisions. In the case of a Participant who is an active employee, the
Participant also shall enter into an agreement to repay the loan by payroll
withholding. No loan in excess of 50 percent of the Participant's vested
interest under the Plan shall be made from the Plan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the amount
made available to other employees.
A loan shall not be granted unless the Participant consents in writing to the
charging of his Separate Account for unpaid principal and interest amounts in
the event the loan is declared to be in default. If a Participant's Separate
Account is subject to the qualified joint and survivor annuity provisions under
Article XVI, the Participant's spouse must consent in writing to any loan
hereunder. Any spousal consent given pursuant to this Section must acknowledge
the effect of the loan and must be witnessed by a Plan representative or a
notary public. Such spousal consent shall be binding with respect to the
consenting spouse and any subsequent spouse with respect to the loan. A new
spousal consent shall be required if the Participant's Separate Account is used
for security in any renegotiation, extension, renewal, or other revision of the
loan.
12.2 - REDUCTION OF ACCOUNT UPON DISTRIBUTION
Notwithstanding any other provision of the Plan, the amount of a Participant's
Separate Account that is distributable to the Participant or his Beneficiary
under Article XIII or XV shall be reduced by the portion of his vested interest
that is held by the Plan as security for any loan outstanding to the
Participant, provided that in the event of a distribution under Article XV the
reduction is used to repay the loan. If distribution is made because of the
Participant's death prior to the commencement of
44
distribution of his Separate Account and less than 100 percent of the
Participant's vested interest in his Separate Account (determined without regard
to the preceding sentence) is payable to his surviving spouse, then the balance
of the Participant's vested interest in his Separate Account shall be adjusted
by reducing the vested account balance by the amount of the security used to
repay the loan, as provided in the preceding sentence, prior to determining the
amount of the benefit payable to the surviving spouse.
12.3 - REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, the following
terms and conditions shall apply to any loan made to a Participant under this
Article:
(a) The interest rate on any loan to a Participant shall be a
reasonable interest rate commensurate with current interest rates
charged for loans made under similar circumstances by persons in
the business of lending money.
(b) The amount of any loan to a Participant (when added to the
outstanding balance of all other loans to the Participant from the
Plan or any other plan maintained by an Employer or a Related
Company) shall not exceed the lesser of:
(i) $50,000, reduced by the excess, if any, of the highest
outstanding balance of any other loan to the
Participant from the Plan or any other plan maintained
by an Employer or a Related Company during the
preceding 12-month period over the outstanding balance
of such loans on the date a loan is made hereunder; or
(ii) 50 percent of the vested portions of the Participant's
Separate Account and his vested interest under all
other plans maintained by an Employer or a Related
Company.
(c) The term of any loan to a Participant shall be no greater than five
years, except in the case of a loan used to acquire any dwelling
unit which within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal residence
of the Participant.
(d) Except as otherwise permitted under Treasury regulations,
substantially level amortization shall be required over the term of
the loan with payments made not less frequently than quarterly.
45
12.4 - ADMINISTRATION OF LOAN INVESTMENT FUND
Upon approval of a loan to a Participant, the Administrator shall direct the
Trustee to transfer an amount equal to the loan amount from the Investment Funds
in which it is invested, as directed by the Administrator, to the loan
Investment Fund established in the Participant's name. Any loan approved by the
Administrator shall be made to the Participant out of the Participant's loan
Investment Fund. All principal and interest paid by the Participant on a loan
made under this Article shall be deposited to his Separate Account and shall be
allocated upon receipt among the Investment Funds in accordance with the
Participant's currently effective investment election. The balance of the
Participant's loan Investment Fund shall be decreased by the amount of principal
payments and the loan Investment Fund shall be terminated when the loan has been
repaid in full.
12.5 - DEFAULT
If a Participant fails to make or cause to be made, any payment required under
the terms of the loan within 90 days following the date on which such payment
shall become due or there is an outstanding principal balance existing on a loan
after the last scheduled repayment date, the Administrator shall direct the
Trustee to declare the loan to be in default, and the entire unpaid balance of
such loan, together with accrued interest, shall be immediately due and payable.
In any such event, if such balance and interest thereon is not then paid, the
Trustee shall charge the Separate Account of the borrower with the amount of
such balance and interest as of the earliest date a distribution may be made
from the Plan to the borrower without adversely affecting the tax qualification
of the Plan or of the cash or deferred arrangement.
12.6 - SPECIAL RULES APPLICABLE TO LOANS
Any loan made hereunder shall be subject to the following rules:
(a) Loans limited to Eligible Employees: No loans shall be made to an
Employee who makes a Rollover Contribution in accordance with
Article V, but who is not an Eligible Employee as provided in
Article III.
(b) Minimum Loan Amount: A Participant may not request a loan for less
than $1,000.
(c) Maximum Number of Outstanding Loans: A Participant with an
outstanding loan may not apply for another loan until the existing
loan is paid in full and may not refinance an existing loan or
attain a second loan for the purpose of
46
paying off the existing loan. A Participant may not apply for more
than one loan during the Plan Year. The provisions of this
paragraph shall not apply to any loans made prior to the effective
date of this amendment and restatement; provided, however, that a
Participant may not apply for a new loan hereunder until all
outstanding loans made to the Participant prior to the effective
date of this amendment and restatement have been paid in full.
(d) Maximum Period for Real Estate Loans: The term of any loan to a
Participant that is used to acquire any dwelling unit which within
a reasonable period of time is to be used (determined at the time
the loan is made) as a principal residence of the Participant shall
be no greater than ten years.
(e) Pre-Payment Without Penalty: A Participant may pre-pay the balance
of any loan hereunder prior to the date it is due without penalty.
(f) Effect of Termination of Employment: Upon a Participant's
termination of employment, the balance of any outstanding loan
hereunder shall immediately become due and owing.
12.7 - LOANS GRANTED PRIOR TO AMENDMENT
Notwithstanding any other provision of this Article to the contrary, any loan
made under the provisions of the Plan as in effect prior to this amendment and
restatement shall remain outstanding until repaid in accordance with its terms
or the otherwise applicable Plan provisions.
47
ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED
13.1 - WITHDRAWALS OF AFTER-TAX CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company may elect in
writing, subject to the limitations and conditions prescribed in this Article,
to make a cash withdrawal or a withdrawal in the form of a qualified joint and
survivor annuity as provided in Article XVI from his After-Tax Contributions
Sub-Account.
13.2 - WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company may elect in
writing, subject to the limitations and conditions prescribed in this Article,
to make a cash withdrawal or a withdrawal in the form of a qualified joint and
survivor annuity as provided in Article XVI from his Rollover Contributions
Sub-Account.
13.3 - WITHDRAWALS OF EMPLOYER CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and has
attained age 59 1/2, been a Participant under the Plan for 5 or more years, or
is determined by the Administrator to have incurred a hardship as defined in
this Article may elect in writing, subject to the limitations and conditions
prescribed in this Article to make a cash withdrawal or a withdrawal in the form
of a qualified joint and survivor annuity as provided in Article XVI from his
vested interest in his Employer Contributions Sub-Account. Notwithstanding the
foregoing, in no event may a Participant withdraw that portion of his Employer
Contributions Sub-Account that is attributable to Employer Contributions that
may be taken into account to satisfy the limitations on contributions for Highly
Compensated Employees contained in Article VII prior to the Participant's
attainment of age 59 1/2, unless the distribution is made because of a hardship.
The maximum amount that a Participant may withdraw pursuant to this Section
shall be an amount ("X") determined by the following formula:
X = P(AB + D) - D
For purposes of the formula:
P = The Participant's vested interest in his Employer
Contributions Sub-Account on the date distribution is to be
made; provided, however, that if the
48
distribution is to be made prior to the Participant's
attainment of age 59 1/2, his vested interest shall be
determined without regard to his vested interest in that
portion of his Employer Contributions Sub-Account that is
attributable to Employer Contributions that may be taken
into account to satisfy the limitations on contributions for
Highly Compensated Employees contained in Article VII.
AB = The balance of the Participant's Employer Contributions
Sub-Account as of the Valuation Date immediately preceding
the date distribution is to be made; provided, however, that
if the distribution is to be made prior to the Participant's
attainment of age 59 1/2, such balance shall exclude that
portion of his Employer Contributions Sub-Account that is
attributable to Employer Contributions that may be taken
into account to satisfy the limitations on contributions for
Highly Compensated Employees contained in Article VII.
D = The amount of all prior withdrawals from the Participant's
Employer Contributions Sub-Account made pursuant to this
Section.
Notwithstanding any other provision of the Plan to the contrary, the maximum
amount that a Participant may withdraw pursuant to this Section because of a
hardship is 100 percent of his vested interest in the balance of his Employer
Contributions Sub-Account, exclusive of Employer Contributions that may be taken
into account to satisfy the limitations on contributions for Highly Compensated
Employees contained in Article VII, and any earnings thereon, that are credited
to such account as of a date that is after December 31, 1988.
13.4 - WITHDRAWALS OF TAX-DEFERRED CONTRIBUTIONS
A Participant who is employed by an Employer or a Related Company and who has
attained age 59 1/2 or is determined by the Administrator to have incurred a
hardship as defined in this Article may elect in writing, subject to the
limitations and conditions prescribed in this Article, to make a cash withdrawal
or a withdrawal in the form of a qualified joint and survivor annuity as
provided in Article XVI from his Tax-Deferred Contributions Sub-Account. The
maximum amount that a Participant may withdraw pursuant to this Section because
of a hardship is the balance of his Tax-Deferred Contributions Sub-Account,
49
exclusive of any earnings credited to such Sub-Account as of a date that is
after December 31, 1988.
13.5 - LIMITATIONS ON WITHDRAWALS OTHER THAN HARDSHIP WITHDRAWALS
Withdrawals made pursuant to this Article, other than hardship withdrawals,
shall be subject to the following conditions and limitations:
A Participant must file a written withdrawal application with the
Administrator such number of days prior to the date as of which it
is to be effective as the Administrator shall prescribe.
Withdrawals may be made effective as soon as reasonably practicable
following the Administrator's receipt of the Participant's
directions.
A Participant who makes a withdrawal from his After-Tax
Contributions Sub-Account prior to attaining age 59 1/2 may not
make a further withdrawal of After-Tax Contributions under this
Article during the remainder of the Plan Year in which the
withdrawal is effective.
A Participant who makes a withdrawal from his Rollover
Contributions Sub-Account prior to attaining age 59 1/2 may not
make a further withdrawal of Rollover Contributions under this
Article during the remainder of the Plan Year in which the
withdrawal is effective.
If a Participant's Separate Account is subject to the qualified joint and
survivor annuity provisions under Article XVI, the Participant's spouse must
consent in writing to any withdrawal hereunder.
13.6 - CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS
A Participant must file a written application for a hardship withdrawal with the
Administrator such number of days prior to the date as of which it is to be
effective as the Administrator may prescribe. Hardship withdrawals may be made
effective as soon as reasonably practicable following the Administrator's
receipt of the Participant's directions. If a Participant's Separate Account is
subject to the qualified joint and survivor annuity provisions under Article
XVI, the Participant's spouse must consent to any withdrawal hereunder. The
Administrator shall grant a hardship withdrawal only if it determines that the
withdrawal is necessary to meet an immediate and heavy financial need of the
Participant. An immediate and heavy financial need of the Participant means a
financial need on account of:
50
(a) expenses previously incurred by or necessary to obtain for the
Participant, the Participant's spouse, or any dependent of the
Participant (as defined in Section 152 of the Code) medical care
described in Section 213(d) of the Code;
(b) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Participant;
(c) payment of tuition, related educational fees, and room and board
expenses for the next 12 months of post-secondary education for the
Participant, the Participant's spouse, or any dependent of the
Participant; or
(d) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the
Participant's principal residence.
A withdrawal shall be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant only if all of the following requirements are
satisfied:
The withdrawal is not in excess of the amount of the immediate and
heavy financial need of the Participant.
The Participant has obtained all distributions, other than hardship
distributions, and all non-taxable loans currently available under
all plans maintained by an Employer or any Related Company.
The Participant's Tax-Deferred Contributions and After-Tax
Contributions and the Participant's elective tax-deferred
contributions and employee after-tax contributions under all other
tax-qualified plans maintained by an Employer or any Related
Company shall be suspended for at least twelve months after his
receipt of the withdrawal.
The Participant shall not make Tax-Deferred Contributions or
elective tax-deferred contributions under any other tax-qualified
plan maintained by an Employer or any Related Company for the
Participant's taxable year immediately following the taxable year
of the withdrawal in excess of the applicable limit under Section
402(g) of the Code for such next taxable year less the amount of
the Participant's Tax-Deferred Contributions and elective
tax-deferred contributions under any other plan maintained by an
Employer or any Related Company for the taxable year of the
withdrawal.
51
The minimum hardship withdrawal that a Participant may make is $1,000. The
amount of a hardship withdrawal may include any amounts necessary to pay any
Federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution. A Participant shall not fail to be treated as an
Eligible Employee for purposes of applying the limitations contained in Article
VII of the Plan merely because his Tax-Deferred Contributions are suspended in
accordance with this Section.
13.7 - ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS
Distribution of a withdrawal amount shall be made from a Participant's
Sub-Accounts, to the extent necessary, in the order prescribed by the
Administrator, which order shall be uniform with respect to all Participants and
non-discriminatory. If the Sub-Account from which a Participant is receiving a
withdrawal is invested in more than one Investment Fund, the withdrawal shall be
charged against the Investment Funds as directed by the Administrator.
52
ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
14.1 - TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE
A Participant's Settlement Date shall occur on the date he terminates employment
with an Employer and all Related Companies because of death, disability,
retirement, or other termination of employment. Written notice of a
Participant's Settlement Date shall be given by the Administrator to the
Trustee.
14.2 - SEPARATE ACCOUNTING FOR NON-VESTED AMOUNTS
If as of a Participant's Settlement Date the Participant's vested interest in
his Employer Contributions Sub-Account is less than 100 percent, that portion of
his Employer Contributions Sub-Account that is not vested shall be accounted for
separately from the vested portion and shall be disposed of as provided in the
following Section. If prior to his Settlement Date such a Participant made a
withdrawal in accordance with the provisions of Article XIII, the vested portion
of his Employer Contributions Sub-Account shall be equal to the maximum
withdrawable amount as determined under Article XIII, without regard to any
exclusion for amounts attributable to Employer Contributions that may be taken
into account to satisfy the limitations on contributions for Highly Compensated
Employees contained in Article VII.
14.3 - DISPOSITION OF NON-VESTED AMOUNTS
That portion of a Participant's Employer Contributions Sub-Account that is not
vested upon the occurrence of his Settlement Date shall be disposed of as
follows:
(a) If the Participant has no vested interest in his Separate Account upon
the occurrence of his Settlement Date or his vested interest in his
Separate Account as of the date of distribution does not exceed $3,500
resulting in the Participant's receipt of a single sum payment of such
vested interest, the non-vested balance remaining in the Participant's
Employer Contributions Sub-Account will be forfeited and his Separate
Account closed as of (i) the Participant's Settlement Date, if the
Participant has no vested interest in his Separate Account, or (ii)
the date the single sum payment occurs.
(b) If the Participant's vested interest in his Separate Account exceeds
$3,500 and the Participant is eligible for and consents in writing to
a single sum payment of his vested interest in his Separate Account,
the non-vested
53
balance remaining in the Participant's Employer Contributions
Sub-Account will be forfeited and his Separate Account closed as of
the date the single sum payment occurs, provided that such
distribution occurs prior to the end of the second Plan Year beginning
on or after the Participant's Settlement Date.
(c) If neither paragraph (a) nor paragraph (b) is applicable, the
non-vested portion of the Participant's Employer Contributions
Sub-Account will continue to be held in such Sub-Account and will not
be forfeited until the end of the five-year period beginning on his
Settlement Date.
Whenever the non-vested portion of a Participant's Employer Contributions
Sub-Account is forfeited under the provisions of the Plan with respect to a Plan
Year, the amount of such forfeiture, as of the last day of the Plan Year, shall
be applied first against Plan expenses for the Plan Year and then against the
Employer Contribution obligations for the Plan Year of the Employer for which
the Participant last performed services as an Employee. Notwithstanding the
foregoing, however, should the amount of all such forfeitures for any Plan Year
with respect to any Employer exceed the amount of such Employer's Employer
Contribution obligation for the Plan Year, the excess amount of such forfeitures
shall be held unallocated in a suspense account established with respect to the
Employer and shall for all Plan purposes be applied against the Employer's
Employer Contribution obligations for the following Plan Year.
14.4 - RECREDITING OF FORFEITED AMOUNTS
A former Participant who forfeited the non-vested portion of his Employer
Contributions Sub-Account in accordance with the provisions of this Article and
who is reemployed by an Employer or a Related Company shall have such forfeited
amounts recredited to a new Separate Account in his name, without adjustment for
interim gains or losses experienced by the Trust, if:
(a) he returns to employment with an Employer or a Related Company before
the end of the five-year period beginning on the later of his
Settlement Date or the date he received distribution of his vested
interest in his Separate Account;
(b) he resumes employment covered under the Plan before the end of the
five-year period beginning on the date he is reemployed; and
(c) if he received distribution of his vested interest in his Separate
Account, he repays to the Plan the full amount of
54
such distribution before the end of the five-year period beginning on
the date he is reemployed.
Funds needed in any Plan Year to recredit the Separate Account of a Participant
with the amounts of prior forfeitures in accordance with the preceding sentence
shall come first from forfeitures that arise during such Plan Year, and then
from Trust income earned in such Plan Year, with each Trust Fund being charged
with the amount of such income proportionately, unless his Employer chooses to
make an additional Employer Contribution, and shall finally be provided by his
Employer by way of a separate Employer Contribution.
55
ARTICLE XV
DISTRIBUTIONS
15.1 - DISTRIBUTIONS TO PARTICIPANTS
A Participant whose Settlement Date occurs shall receive distribution of his
vested interest in his Separate Account in the form provided under Article XVI
beginning as soon as reasonably practicable following his Settlement Date or the
date his application for distribution is filed with the Administrator, if later.
In addition, a Participant who continues in employment with an Employer or a
Related Company after his Normal Retirement Date may elect to receive
distribution of all or any portion of his Separate Account in the form provided
under Article XVI at any time following his Normal Retirement Date.
15.2 - DISTRIBUTIONS TO BENEFICIARIES
If a Participant dies prior to the date distribution of his vested interest in
his Separate Account begins under this Article, his Beneficiary shall receive
distribution of the Participant's vested interest in his Separate Account in the
form provided under Article XVI beginning as soon as reasonably practicable
following the date the Beneficiary's application for distribution is filed with
the Administrator. Unless distribution is to be made over the life or over a
period certain not greater than the life expectancy of the Beneficiary,
distribution of the Participant's entire vested interest shall be made to the
Beneficiary no later than the end of the fifth calendar year beginning after the
Participant's death. If distribution is to be made over the life or over a
period certain no greater than the life expectancy of the Beneficiary,
distribution shall commence no later than:
(a) If the Beneficiary is not the Participant's spouse, the end of the
first calendar year beginning after the Participant's death; or
(b) If the Beneficiary is the Participant's spouse, the later of (i) the
end of the first calendar year beginning after the Participant's death
or (ii) the end of the calendar year in which the Participant would
have attained age 70 1/2.
If distribution is to be made to a Participant's spouse, it shall be made
available within a reasonable period of time after the Participant's death that
is no less favorable than the period of time applicable to other distributions.
If a Participant dies after the date distribution of his vested interest in his
56
Separate Account begins under this Article, but before his entire vested
interest in his Separate Account is distributed, his Beneficiary shall receive
distribution of the remainder of the Participant's vested interest in his
Separate Account beginning as soon as reasonably practicable following the
Participant's date of death in a form that provides for distribution at least as
rapidly as under the form in which the Participant was receiving distribution.
15.3 - CASH OUTS AND PARTICIPANT CONSENT
Notwithstanding any other provision of the Plan to the contrary, if a
Participant's vested interest in his Separate Account does not exceed $3,500,
distribution of such vested interest shall be made to the Participant in a
single sum payment as soon as reasonably practicable following his Settlement
Date. If a Participant's vested interest in his Separate Account is $0, he shall
be deemed to have received distribution of such vested interest as of his
Settlement Date. If a Participant's vested interest in his Separate Account
exceeds $3,500, distribution shall not commence to such Participant prior to his
Normal Retirement Date without the Participant's written consent and the written
consent of his spouse if the Participant's Separate Account is subject to the
qualified joint and survivor annuity provisions under Article XVI and payment is
not made through the purchase of a qualified joint and survivor annuity. If at
the time of a distribution or deemed distribution to a Participant from his
Separate Account, the Participant's vested interest in his Separate Account
exceeded $3,500, then for purposes of this Section, the Participant's vested
interest in his Separate Account on any subsequent date shall be deemed to
exceed $3,500.
15.4 - REQUIRED COMMENCEMENT OF DISTRIBUTION
Notwithstanding any other provision of the Plan to the contrary, distribution of
a Participant's vested interest in his Separate Account shall commence to the
Participant no later than the earlier of:
(a) 60 days after the close of the Plan Year in which (i) the
Participant's Normal Retirement Date occurs, (ii) the 10th
anniversary of the year in which he commenced participation in the
Plan occurs, or (iii) his Settlement Date occurs, whichever is
latest; or
(b) the April 1 following the close of the calendar year in which he
attains age 70 1/2, whether or not his Settlement Date has
occurred, except that if a Participant attained age 70 1/2 prior to
January 1, 1988, and was not a five-percent owner (as defined in
Section 416 of the Code)
57
at any time during the five-Plan-Year period ending within the
calendar year in which he attained age 70 1/2, distribution of such
Participant's vested interest in his Separate Account shall
commence no later than the April 1 following the close of the
calendar year in which he attains age 70 1/2 or retires, whichever
is later.
Distributions required to commence under this Section shall be made in the form
provided under Article XVI and in accordance with Section 401(a)(9) of the Code
and regulations issued thereunder, including the minimum distribution incidental
benefit requirements.
15.5 - REEMPLOYMENT OF A PARTICIPANT
If a Participant whose Settlement Date has occurred is reemployed by an Employer
or a Related Company, he shall lose his right to any distribution or further
distributions from the Trust arising from his prior Settlement Date and his
interest in the Trust shall thereafter be treated in the same manner as that of
any other Participant whose Settlement Date has not occurred.
15.6 - RESTRICTIONS ON ALIENATION
Except as provided in Section 401(a)(13) of the Code relating to qualified
domestic relations orders and Section 1.401(a)-13(b)(2) of Treasury regulations
relating to Federal tax levies and judgments, no benefit under the Plan at any
time shall be subject in any manner to anticipation, alienation, assignment
(either at law or in equity), encumbrance, garnishment, levy, execution, or
other legal or equitable process; and no person shall have power
in any manner to anticipate, transfer, assign (either at law or in equity),
alienate or subject to attachment, garnishment, levy, execution, or other legal
or equitable process, or in any way encumber his benefits under the Plan, or any
part thereof, and any attempt to do so shall be void.
15.7 - FACILITY OF PAYMENT
If the Administrator finds that any individual to whom an amount is payable
hereunder is incapable of attending to his financial affairs because of any
mental or physical condition, including the infirmities of advanced age, such
amount (unless prior claim therefor shall have been made by a duly qualified
guardian or other legal representative) may, in the discretion of the
Administrator, be paid to another person for the use or benefit of the
individual found incapable of attending to his financial affairs or in
satisfaction of legal obligations incurred by or on behalf of such individual.
The Trustee shall make such payment only upon receipt of written instructions to
such effect from the
58
Administrator. Any such payment shall be charged to the Separate Account from
which any such payment would otherwise have been paid to the individual found
incapable of attending to his financial affairs and shall be a complete
discharge of any liability therefor under the Plan.
15.8 - INABILITY TO LOCATE PAYEE
If any benefit becomes payable to any person, or to the executor or
administrator of any deceased person, and if that person or his executor or
administrator does not present himself to the Administrator within a reasonable
period after the Administrator mails written notice of his eligibility to
receive a distribution hereunder to his last known address and makes such other
diligent effort to locate the person as the Administrator determines, that
benefit will be forfeited. However, if the payee later files a claim for that
benefit, the benefit will be restored.
15.9 - DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS
ORDERS
Notwithstanding any other provision of the Plan to the contrary, if a qualified
domestic relations order so provides, distribution may be made to an alternate
payee pursuant to a qualified domestic relations order, as defined in Section
414(p) of the Code, regardless of whether the Participant's Settlement Date has
occurred or whether the Participant is otherwise entitled to receive a
distribution under the Plan.
59
ARTICLE XVI
FORM OF PAYMENT
16.1 - DEFINITIONS
For purposes of this Article, the following terms have the following meanings:
(a) A Participant's "annuity starting date" means the first day of the
first period for which an amount is paid as an annuity or any other
form.
(b) The "automatic annuity form" means the form of annuity that will be
purchased on behalf of a Participant who has elected the optional
annuity form of payment unless the Participant elects another form of
annuity.
(c) A "qualified election" means an election that is made during the
qualified election period. A qualified election of a form of payment
other than a qualified joint and survivor annuity or designating a
Beneficiary other than the Participant's spouse to receive amounts
otherwise payable as a qualified preretirement survivor annuity must
include the written consent of the Participant's spouse, if any. A
Participant's spouse will be deemed to have given written consent to
the Participant's election if the Participant establishes to the
satisfaction of a Plan representative that spousal consent cannot be
obtained because the spouse cannot be located or because of other
circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. The spouse's written consent must
acknowledge the effect of the Participant's election and must be
witnessed by a Plan representative or a notary public. In addition,
the spouse's written consent must either (i) specify the form of
payment selected instead of a joint and survivor annuity, if
applicable, and that such form may not be changed (except to a
qualified joint and survivor annuity) without written spousal consent
and specify any non-spouse Beneficiary designated by the Participant,
if applicable, and that such Beneficiary may not be changed without
written spousal consent or (ii) acknowledge that the spouse has the
right to limit consent as provided in clause (i), but permit the
Participant to change the form of payment selected or the designated
Beneficiary without the spouse's further consent. Any written consent
given or deemed to have been given by a Participant's spouse hereunder
shall be irrevocable and shall be effective only
60
with respect to such spouse and not with respect to any subsequent
spouse.
(d) The "qualified election period" with respect to the automatic annuity
form means the 90 day period ending on a Participant's annuity
starting date. The "qualified election period" with respect to a
qualified preretirement survivor annuity means the period beginning on
the later of (i) the date he elects an annuity form of payment or (ii)
the first day of the Plan Year in which the Participant attains age 35
or, if he terminates employment prior to such date, the day he
terminates employment with his Employer and all Related Companies. A
Participant whose employment has not terminated may make a qualified
election designating a Beneficiary other than his spouse prior to the
Plan Year in which he attains age 35; provided, however, that such
election shall cease to be effective as of the first day of the Plan
Year in which the Participant attains age 35.
(e) A "qualified joint and survivor annuity" means an immediate annuity
payable at earliest retirement age under the Plan, as defined in
regulations issued under Section 401(a)(11) of the Code, for the life
of a Participant with a survivor annuity payable for the life of the
Participant's spouse that is equal to at least 50 percent of the
amount of the annuity payable during the joint lives of the
Participant and his spouse, provided that the survivor annuity shall
not be payable to a Participant's spouse if such spouse is not the
same spouse to whom the Participant was married on his annuity
starting date.
(f) A "qualified preretirement survivor annuity" means an annuity
payable to the surviving spouse of a Participant in accordance with
the provisions of Section 16.6.
(g) A "single life annuity" means an annuity payable for the life of the
Participant.
16.2 - NORMAL FORM OF PAYMENT
Except as otherwise provided in Section 16.6, unless a Participant, or his
Beneficiary, if the Participant has died, elects one of the optional forms of
payment, distribution shall be made to the Participant, or his Beneficiary, as
the case may be, in a single sum payment. Distribution of the Fair Market Value
of the Participant's Separate Account shall be made in cash or in kind, as
elected by the Participant, except that distribution shall not be made in
Employer stock.
61
16.3 - OPTIONAL FORMS OF PAYMENT
A Participant, or his Beneficiary, as the case may be, may elect to receive
distribution in one of the following optional forms of payment:
(a) Installment Payments - Distribution shall be made in a series of
installments over a period not exceeding the life expectancy of the
Participant, or the Participant's Beneficiary, if the Participant has
died, or a period not exceeding the joint life and last survivor
expectancy of the Participant and his Beneficiary. Each installment
shall be equal in amount except as necessary to adjust for any changes
in the value of the Participant's Separate Account. The determination
of life expectancies shall be made on the basis of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Treasury
regulations and shall be calculated either once at the time
installment payments begin or annually for the Participant and/or his
Beneficiary, if his Beneficiary is his spouse, as determined by the
Participant at the time installment payments begin. Distribution of
the Fair Market Value of the Participant's Separate Account shall be
made in cash or in kind, as elected by the Participant, except that
distribution shall not be made in Employer stock.
(b) Annuity Contract - Distribution shall be made through the purchase of
an annuity of the type described in Section 16.5. The terms of any
annuity contract purchased hereunder and distributed to a Participant
or his Beneficiary shall comply with the requirements of the Plan.
16.4 - CHANGE OF OPTION ELECTION
Subject to the provisions of Section 16.5, a Participant or Beneficiary who has
elected an optional form of payment may revoke or change his election at any
time prior to his annuity starting date by filing with the Administrator a
written election in the form prescribed by the Administrator.
16.5 - FORM OF ANNUITY REQUIREMENTS
If a Participant elects to receive distribution through the purchase of an
annuity contract, distribution shall be made to such Participant through the
purchase of an annuity contract that provides for payment in one of the
following automatic annuity forms:
62
(a) The automatic annuity form for a Participant who is married on his
annuity starting date is the 50 percent qualified joint and
survivor annuity.
(b) The automatic annuity form for a Participant who is not married on
his annuity starting date is the single life annuity.
A Participant who has elected the optional annuity form of payment can revoke or
change his election only pursuant to a qualified election.
16.6 - QUALIFIED PRERETIREMENT SURVIVOR ANNUITY REQUIREMENTS
If a married Participant elects to receive distribution through the purchase of
an annuity contract and dies before his annuity starting date, his spouse shall
receive distribution of the value of the Participant's vested interest in his
Separate Account through the purchase of an annuity contract that provides for
payment over the life of the Participant's spouse. A Participant's spouse may
elect to receive distribution under any one of the other forms of payment
available under this Article instead of in the qualified preretirement survivor
annuity form. If a married Participant's Beneficiary designation on file with
the Administrator pursuant to Article XVII designates a non-spouse Beneficiary,
the designation shall become inoperative upon the Participant's election to
receive distribution through the purchase of an annuity contract, unless the
Participant files a new designation of Beneficiary form with the Administrator.
A Participant can only designate a non-spouse Beneficiary to receive
distribution of that portion of his Separate Account otherwise payable as a
qualified preretirement survivor annuity pursuant to a qualified election.
16.7 - DIRECT ROLLOVER
Notwithstanding any other provision of the Plan to the contrary, in lieu of
receiving distribution in the form of payment provided under this Article, a
"qualified distributee" may elect in writing, in accordance with rules
prescribed by the Administrator, to have any portion or all of a distribution
made on or after January 1, 1993, that is an "eligible rollover distribution"
paid directly by the Plan to the "eligible retirement plan" designated by the
"qualified distributee"; provided, however, that this provision shall not apply
if the total distribution is less than $200 and that a "qualified distributee"
may not elect this provision with respect to a portion of a distribution that is
less than $500. Any such payment by the Plan to another "eligible retirement
plan" shall
63
be a direct rollover and shall be made only after all applicable consent
requirements are satisfied. For purposes of this Section, the following terms
have the following meanings:
(a) An "eligible retirement plan" means 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 rollovers;
provided, however, that, in the case of a direct rollover by a
surviving spouse, an eligible retirement plan does not include a
qualified trust described in Section 401(a) of the Code.
(b) An "eligible rollover distribution" means any distribution of all or
any portion of the balance of a Participant's Separate Account;
provided, however, that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially
equal periodic payments made not less frequently than annually for the
life or life expectancy of the qualified distributee or the joint
lives or joint life expectancies of the qualified distributee and the
qualified distributee'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 consists of the Participant's
After-Tax Contributions.
(c) A "qualified distributee" means a Participant, his surviving spouse,
or his spouse or former spouse who is an alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of
the Code.
16.8 - NOTICE REGARDING FORMS OF PAYMENT
Within the 60 day period ending 30 days before a Participant's annuity starting
date, the Administrator shall provide him with a written explanation of his
right to defer distribution until his Normal Retirement Date, or such later date
as may be provided in the Plan, his right to make a direct rollover, and the
forms of payment available under the Plan, including a written explanation of
(i) the terms and conditions of the automatic annuity form applicable if the
Participant elects to receive distribution through the purchase of an annuity
contract, (ii) the Participant's right to choose a form of payment other than
the automatic annuity form or to revoke such choice, and (iii) the rights of the
Participant's spouse. Notwithstanding the foregoing, distribution of the
Participant's Separate Account may
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commence less than 30 days after such notice is provided to the Participant if
(i) the Administrator clearly informs the Participant of his right to consider
his election of whether or not to make a direct rollover or to receive a
distribution prior to his Normal Retirement Date and his election of a form of
payment for a period of at least 30 days following his receipt of the notice,
(ii) the Participant, after receiving the notice, affirmatively elects an early
distribution with his spouse's written consent, if necessary, (iii) the
Participant's annuity starting date is a date after the date the notice is
provided to him, (iv) the Participant may revoke his election at any time prior
to the later of his annuity starting date or the expiration of the seven-day
period beginning the day after the date the notice is provided to him, and (v)
distribution does not commence to the Participant before such revocation period
ends.
In addition, in the event a Participant elects to receive distribution through
the purchase of an annuity contract, the Administrator shall provide such a
Participant with a written explanation of (i) the terms and conditions of the
qualified preretirement survivor annuity, (ii) the Participant's right to
designate a non-spouse Beneficiary to receive distribution of that portion of
his Separate Account otherwise payable as a qualified preretirement survivor
annuity or to revoke such designation, and (iii) the rights of the Participant's
spouse. The Administrator shall provide such explanation within one of the
following periods, whichever ends last:
(a) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending on the last day of the
Plan Year preceding the Plan Year in which the Participant attains
age 35;
(b) the period beginning 12 calendar months before the date an
individual becomes a Participant and ending 12 calendar months
after such date; or
(c) the period beginning 12 calendar months before the date the
Participant elects to receive distribution through the purchase of
an annuity contract and ending 12 calendar months after such date;
provided, however, that in the case of a Participant who separates from service
prior to attaining age 35, the explanation shall be provided to such Participant
within the period beginning 12 calendar months before the Participant's
separation from service and ending 12 calendar months after his separation from
service.
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16.9 - REEMPLOYMENT
If a Participant is reemployed by an Employer or a Related Company prior to
receiving distribution of the entire balance of his vested interest in his
Separate Account, his prior election of a form of payment hereunder shall become
ineffective. Notwithstanding the foregoing, if a Participant had elected to
receive distribution through the purchase of an annuity contract, the
requirements of Sections 16.5 and 16.6 of the Plan shall continue in effect with
respect to his entire Separate Account.
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ARTICLE XVII
BENEFICIARIES
17.1 - DESIGNATION OF BENEFICIARY
A married Participant's Beneficiary shall be his spouse, unless the Participant
designates a person or persons other than his spouse as Beneficiary with his
spouse's written consent. A Participant may designate a Beneficiary on the form
prescribed by the Administrator. If no Beneficiary has been designated pursuant
to the provisions of this Section, or if no Beneficiary survives the Participant
and he has no surviving spouse, then the Beneficiary under the Plan shall be the
Participant's estate. If a Beneficiary dies after becoming entitled to receive a
distribution under the Plan but before distribution is made to him in full, and
if no other Beneficiary has been designated to receive the balance of the
distribution in that event, the estate of the deceased Beneficiary shall be the
Beneficiary as to the balance of the distribution. A Participant's designation
of a Beneficiary shall be subject to the qualified preretirement survivor
annuity provisions of Article XVI.
17.2 - SPOUSAL CONSENT REQUIREMENTS
Any written spousal consent given pursuant to this Article must acknowledge the
effect of the action taken and must be witnessed by a Plan representative or a
notary public. In addition, the spouse's written consent must either (i) specify
any non-spouse Beneficiary designated by the Participant and that such
Beneficiary may not be changed without written spousal consent or (ii)
acknowledge that the spouse has the right to limit consent to a specific
Beneficiary, but permit the Participant to change the designated Beneficiary
without the spouse's further consent. A Participant's spouse will be deemed to
have given written consent to the Participant's designation of Beneficiary if
the Participant establishes to the satisfaction of a Plan representative that
such consent cannot be obtained because the spouse cannot be located or because
of other circumstances set forth in Section 401(a)(11) of the Code and
regulations issued thereunder. Any written consent given or deemed to have been
given by a Participant's spouse hereunder shall be valid only with respect to
the spouse who signs the consent.
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ARTICLE XVIII
ADMINISTRATION
18.1 - AUTHORITY OF THE SPONSOR
The Sponsor, which shall be the administrator for purposes of ERISA and the plan
administrator for purposes of the Code, shall be responsible for the
administration of the Plan and, in addition to the powers and authorities
expressly conferred upon it in the Plan, shall have all such powers and
authorities as may be necessary to carry out the provisions of the Plan,
including the power and authority to interpret and construe the provisions of
the Plan, to make benefit determinations, and to resolve any disputes which
arise under the Plan. The Sponsor may employ such attorneys, agents, and
accountants as it may deem necessary or advisable to assist in carrying out its
duties hereunder. The Sponsor shall be a "named fiduciary" as that term is
defined in Section 402(a)(2) of ERISA. The Sponsor may:
(a) allocate any of the powers, authority, or responsibilities for the
operation and administration of the Plan (other than trustee
responsibilities as defined in Section 405(c)(3) of ERISA) among
named fiduciaries; and
(b) designate a person or persons other than a named fiduciary to carry
out any of such powers, authority, or responsibilities;
except that no allocation by the Sponsor of, or designation by the Sponsor with
respect to, any of such powers, authority, or responsibilities to another named
fiduciary or a person other than a named fiduciary shall become effective unless
such allocation or designation shall first be accepted by such named fiduciary
or other person in a writing signed by it and delivered to the Sponsor.
18.2 - ACTION OF THE SPONSOR
Any act authorized, permitted, or required to be taken under the Plan by the
Sponsor and which has not been delegated in accordance with Section 18.1, may be
taken by a majority of the members of the board of directors of the Sponsor,
either by vote at a meeting, or in writing without a meeting, or by the employee
or employees of the Sponsor designated by the board of directors to carry out
such acts on behalf of the Sponsor. All notices, advice, directions,
certifications, approvals, and instructions required or authorized to be given
by the Sponsor as under the Plan shall be in writing and signed by either (i) a
majority of the members of the board of directors of the Sponsor or by such
68
member or members as may be designated by an instrument in writing, signed by
all the members thereof, as having authority to execute such documents on its
behalf, or (ii) the employee or employees authorized to act for the Sponsor in
accordance with the provisions of this Section.
18.3 - CLAIMS REVIEW PROCEDURE
Whenever a claim for benefits under the Plan filed by any person (herein
referred to as the "Claimant") is denied, whether in whole or in part, the
Sponsor shall transmit a written notice of such decision to the Claimant within
90 days of the date the claim was filed or, if special circumstances require an
extension, within 180 days of such date, which notice shall be written in a
manner calculated to be understood by the Claimant and shall contain a statement
of (i) the specific reasons for the denial of the claim, (ii) specific reference
to pertinent Plan provisions on which the denial is based, and (iii) a
description of any additional material or information necessary for the Claimant
to perfect the claim and an explanation of why such information is necessary.
The notice shall also include a statement advising the Claimant that, within 60
days of the date on which he receives such notice, he may obtain review of such
decision in accordance with the procedures hereinafter set forth. Within such
60-day period, the Claimant or his authorized representative may request that
the claim denial be reviewed by filing with the Sponsor a written request
therefor, which request shall contain the following information:
(a) the date on which the Claimant's request was filed with the
Sponsor; provided, however, that the date on which the Claimant's
request for review was in fact filed with the Sponsor shall control
in the event that the date of the actual filing is later than the
date stated by the Claimant pursuant to this paragraph;
(b) the specific portions of the denial of his claim which the Claimant
requests the Sponsor to review;
(c) a statement by the Claimant setting forth the basis upon which he
believes the Sponsor should reverse the previous denial of his
claim for benefits and accept his claim as made; and
(d) any written material (offered as exhibits) which the Claimant
desires the Sponsor to examine in its consideration of his position
as stated pursuant to paragraph (c) of this Section.
69
Within 60 days of the date determined pursuant to paragraph (a) of this Section
or, if special circumstances require an extension, within 120 days of such date,
the Sponsor shall conduct a full and fair review of the decision denying the
Claimant's claim for benefits and shall render its written decision on review to
the Claimant. The Sponsor's decision on review shall be written in a manner
calculated to be understood by the Claimant and shall specify the reasons and
Plan provisions upon which the Sponsor's decision was based.
18.4 - QUALIFIED DOMESTIC RELATIONS ORDERS
The Sponsor shall establish reasonable procedures to determine the status of
domestic relations orders and to administer distributions under domestic
relations orders which are deemed to be qualified orders. Such procedures shall
be in writing and shall comply with the provisions of Section 414(p) of the Code
and regulations issued thereunder.
18.5 - INDEMNIFICATION
In addition to whatever rights of indemnification the members of the board of
directors of the Sponsor or any employee or employees of the Sponsor to whom any
power, authority, or responsibility is delegated pursuant to Section 18.2, may
be entitled under the articles of incorporation or regulations of the Sponsor,
under any provision of law, or under any other agreement, the Sponsor shall
satisfy any liability actually and reasonably incurred by any such person or
persons, including expenses, attorneys' fees, judgments, fines, and amounts paid
in settlement (other than amounts paid in settlement not approved by the
Sponsor), in connection with any threatened, pending or completed action, suit,
or proceeding which is related to the exercising or failure to exercise by such
person or persons of any of the powers, authority, responsibilities, or
discretion as provided under the Plan, or reasonably believed by such person or
persons to be provided hereunder, and any action taken by such person or persons
in connection therewith, unless the same is judicially determined to be the
result of such person or persons' gross negligence or willful misconduct.
18.6 - ACTIONS BINDING
Subject to the provisions of Section 18.3, any action taken by the Sponsor which
is authorized, permitted, or required under the Plan shall be final and binding
upon the Employers, the Trustee, all persons who have or who claim an interest
under the Plan, and all third parties dealing with the Employers or the Trustee.
70
ARTICLE XIX
AMENDMENT AND TERMINATION
19.1 - AMENDMENT
Subject to the provisions of Section 19.2, the Sponsor may at any time and from
time to time, by action of its board of directors, or such officers of the
Sponsor as are authorized by its board of directors, amend the Plan, either
prospectively or retroactively. Any such amendment shall be by written
instrument executed by the Sponsor.
19.2 - LIMITATION ON AMENDMENT
The Sponsor shall make no amendment to the Plan which shall decrease the accrued
benefit of any Participant or Beneficiary, except that nothing contained herein
shall restrict the right to amend the provisions of the Plan relating to the
administration of the Plan and Trust. Moreover, no such amendment shall be made
hereunder which shall permit any part of the Trust to revert to an Employer or
any Related Company or be used or be diverted to purposes other than the
exclusive benefit of Participants and Beneficiaries.
19.3 - TERMINATION
The Sponsor reserves the right, by action of its board of directors, to
terminate the Plan as to all Employers at any time (the effective date of such
termination being hereinafter referred to as the "termination date"). Upon any
such termination of the Plan, the following actions shall be taken for the
benefit of Participants and Beneficiaries:
(a) As of the termination date, each Investment Fund shall be valued and
all Separate Accounts and Sub-Accounts shall be adjusted in the manner
provided in Article XI, with any unallocated contributions or
forfeitures being allocated as of the termination date in the manner
otherwise provided in the Plan. The termination date shall become a
Valuation Date for purposes of Article XI. In determining the net
worth of the Trust, there shall be included as a liability such
amounts as shall be necessary to pay all expenses in connection with
the termination of the Trust and the liquidation and distribution of
the property of the Trust, as well as other expenses, whether or not
accrued, and shall include as an asset all accrued income.
(b) All Separate Accounts shall then be disposed of to or for the benefit
of each Participant or Beneficiary in
71
accordance with the provisions of Article XV as if the termination
date were his Settlement Date; provided, however, that notwithstanding
the provisions of Article XV, if the Plan does not offer an annuity
option and if neither his Employer nor a Related Company establishes
or maintains another defined contribution plan (other than an employee
stock ownership plan as defined in Section 4975(e)(7) of the Code),
the Participant's written consent to the commencement of distribution
shall not be required regardless of the value of the vested portions
of his Separate Account.
(c) Notwithstanding the provisions of paragraph (b) of this Section, no
distribution shall be made to a Participant of any portion of the
balance of his Tax-Deferred Contributions Sub-Account prior to his
separation from service (other than a distribution made in accordance
with Article XIII or required in accordance with Section 401(a)(9) of
the Code) unless (i) neither his Employer nor a Related Company
establishes or maintains another defined contribution plan (other than
an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code, a tax credit employee stock ownership plan as defined in
Section 409 of the Code, or a simplified employee pension as defined
in Section 408(k) of the Code) either at the time the Plan is
terminated or at any time during the period ending 12 months after
distribution of all assets from the Plan; provided, however, that this
provision shall not apply if fewer than two percent of the Eligible
Employees under the Plan were eligible to participate at any time in
such other defined contribution plan during the 24-month period
beginning 12 months before the Plan termination, and (ii) the
distribution the Participant receives is a "lump sum distribution" as
defined in Section 402(e)(4) of the Code, without regard to clauses
(i), (ii), (iii), and (iv) of sub-paragraph (A), sub-paragraph (B), or
sub-paragraph (H) thereof.
Notwithstanding anything to the contrary contained in the Plan, upon any such
Plan termination, the vested interest of each Participant and Beneficiary in his
Employer Contributions Sub-Account shall be 100 percent; and, if there is a
partial termination of the Plan, the vested interest of each Participant and
Beneficiary who is affected by the partial termination in his Employer
Contributions Sub-Account shall be 100 percent. For purposes of the preceding
sentence only, the Plan shall be deemed to terminate automatically if there
shall be a complete discontinuance of contributions hereunder by all Employers.
72
19.4 - REORGANIZATION
The merger, consolidation, or liquidation of any Employer with or into any other
Employer or a Related Company shall not constitute a termination of the Plan as
to such Employer. If an Employer disposes of substantially all of the assets
used by the Employer in a trade or business or disposes of a subsidiary and in
connection therewith one or more Participants terminates employment but
continues in employment with the purchaser of the assets or with such
subsidiary, no distribution from the Plan shall be made to any such Participant
prior to his separation from service (other than a distribution made in
accordance with Article XIII or required in accordance with Section 401(a)(9) of
the Code), except that a distribution shall be permitted to be made in such a
case, subject to the Participant's consent (to the extent required by law), if
(i) the distribution would constitute a "lump sum distribution" as defined in
section 402(e)(4) of the Code, without regard to clauses (i), (ii), (iii), or
(iv) of sub-paragraph (A), sub-paragraph (B), or sub-paragraph (H) thereof, (ii)
the Employer continues to maintain the Plan after the disposition, (iii) the
purchaser does not maintain the Plan after the disposition, and (iv) the
distribution is made by the end of the second calendar year after the calendar
year in which the disposition occurred.
19.5 - WITHDRAWAL OF AN EMPLOYER
An Employer other than the Sponsor may withdraw from the Plan at any time upon
notice in writing to the Administrator (the effective date of such withdrawal
being hereinafter referred to as the "withdrawal date"), and shall thereupon
cease to be an Employer for all purposes of the Plan. An Employer shall be
deemed automatically to withdraw from the Plan in the event of its complete
discontinuance of contributions, or, subject to Section 19.4 and unless the
Sponsor otherwise directs, it ceases to be a Related Company of the Sponsor or
any other Employer. Upon the withdrawal of an Employer, the withdrawing Employer
shall determine whether a partial termination has occurred with respect to its
Employees. In the event that the withdrawing Employer determines a partial
termination has occurred, the action specified in Section 19.3 shall be taken as
of the withdrawal date, as on a termination of the Plan, but with respect only
to Participants who are employed solely by the withdrawing Employer, and who,
upon such withdrawal, are neither transferred to nor continued in employment
with any other Employer or a Related Company. The interest of any Participant
employed by the withdrawing Employer who is transferred to or continues in
employment with any other Employer or a Related Company, and the interest of any
Participant employed solely by an Employer or a Related Company other than the
withdrawing
73
Employer, shall remain unaffected by such withdrawal; no adjustment to his
Separate Accounts shall be made by reason of the withdrawal; and he shall
continue as a Participant hereunder subject to the remaining provisions of the
Plan.
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ARTICLE XX
ADOPTION BY OTHER ENTITIES
20.1 - ADOPTION BY RELATED COMPANIES
A Related Company that is not an Employer may, with the consent of the Sponsor,
adopt the Plan and become an Employer hereunder by causing an appropriate
written instrument evidencing such adoption to be executed in accordance with
the requirements of its organizational authority. Any such instrument shall
specify the effective date of the adoption.
20.2 - EFFECTIVE PLAN PROVISIONS
An Employer who adopts the Plan shall be bound by the provisions of the Plan in
effect at the time of the adoption and as subsequently in effect because of any
amendment to the Plan.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.1 - NO COMMITMENT AS TO EMPLOYMENT
Nothing contained herein shall be construed as a commitment or agreement upon
the part of any person to continue his employment with an Employer or Related
Company, or as a commitment on the part of any Employer or Related Company to
continue the employment, compensation, or benefits of any person for any period.
21.2 - BENEFITS
Nothing in the Plan nor the Trust Agreement shall be construed to confer any
right or claim upon any person, firm, or corporation other than the Employers,
the Trustee, Participants, and Beneficiaries.
21.3 - NO GUARANTEES
The Employers, the Administrator, and the Trustee do not guarantee the Trust
from loss or depreciation, nor do they guarantee the payment of any amount which
may become due to any person hereunder.
21.4 - EXPENSES
The expenses of administration of the Plan, including the expenses of the
Administrator and fees of the Trustee, shall be paid from the Trust as a general
charge thereon, unless the Sponsor elects to make payment. Notwithstanding the
foregoing, the Sponsor may direct that administrative expenses that are
allocable to the Separate Account of a specific Participant shall be paid from
that Separate Account and the costs incident to the management of the assets of
an Investment Fund or to the purchase or sale of securities held in an
Investment Fund shall be paid by the Trustee from such Investment Fund.
21.5 - PRECEDENT
Except as otherwise specifically provided, no action taken in accordance with
the Plan shall be construed or relied upon as a precedent for similar action
under similar circumstances.
21.6 - DUTY TO FURNISH INFORMATION
The Employers, the Administrator, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements,
76
or other information that the other reasonably deems necessary to perform its
duties hereunder or otherwise imposed by law.
21.7 - WITHHOLDING
The Trustee shall withhold any tax which by any present or future law is
required to be withheld, and which the Administrator notifies the Trustee in
writing is to be so withheld, from any payment to any Participant or Beneficiary
hereunder.
21.8 - MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS
The Plan shall not be merged or consolidated with any other plan, nor shall any
of its assets or liabilities be transferred to another plan, unless, immediately
after such merger, consolidation, or transfer of assets or liabilities, each
Participant in the Plan would receive a benefit under the Plan which is at least
equal to the benefit he would have received immediately prior to such merger,
consolidation, or transfer of assets or liabilities (assuming in each instance
that the Plan had then terminated).
21.9 - BACK PAY AWARDS
The provisions of this Section shall apply only to an Employee or former
Employee who becomes entitled to back pay by an award or agreement of an
Employer without regard to mitigation of damages. If a person to whom this
Section applies was or would have become an Eligible Employee after such back
pay award or agreement has been effected, and if any such person who had not
previously elected to make Tax-Deferred Contributions pursuant to Section 4.1
shall within 30 days of the date he receives notice of the provisions of this
Section make an election to make Tax-Deferred Contributions in accordance with
such Section 4.1 (retroactive to any Enrollment Date as of which he was or has
become eligible to do so), then such Participant may elect that any Tax-Deferred
Contributions not previously made on his behalf but which, after application of
the foregoing provisions of this Section, would have been made under the
provisions of Article IV and any After-Tax Contributions which he had not
previously made but which, after application of the foregoing provisions of this
Section, he would have made under the provisions of Article V, shall be made out
of the proceeds of such back pay award or agreement. In addition, if any such
Employee or former Employee would have been eligible to participate in the
allocation of Employer Contributions under the provisions of Article VI for any
prior Plan Year after such back pay award or agreement has been effected, his
Employer shall make an Employer Contribution equal to the amount of the Employer
Contribution which would have been allocated to such Participant under the
provisions of Article VI
77
as in effect during each such Plan Year. The amounts of such additional
contributions shall be credited to the Separate Account of such Participant. Any
additional contributions made by such Participant and by an Employer pursuant to
this Section shall be made in accordance with, and subject to the limitations of
the applicable provisions of Articles IV, V, VI, and VII.
21.10 - CONDITION ON EMPLOYER CONTRIBUTIONS
Notwithstanding anything to the contrary contained in the Plan or the Trust
Agreement, any contribution of an Employer hereunder is conditioned upon the
continued qualification of the Plan under Section 401(a) of the Code, the exempt
status of the Trust under Section 501(a) of the Code, and the deductibility of
the contribution under Section 404 of the Code. Except as otherwise provided in
this Section and Section 21.11, however, in no event shall any portion of the
property of the Trust ever revert to or otherwise inure to the benefit of an
Employer or any Related Company.
21.11 - RETURN OF CONTRIBUTIONS TO AN EMPLOYER
Notwithstanding any other provision of the Plan or the Trust Agreement to the
contrary, in the event any contribution of an Employer made hereunder:
(a) is made under a mistake of fact, or
(b) is disallowed as a deduction under Section 404 of the Code,
such contribution may be returned to the Employer within one year after the
payment of the contribution or the disallowance of the deduction to the extent
disallowed, whichever is applicable. In the event the Plan does not initially
qualify under Section 401(a) of the Code, any contribution of an Employer made
hereunder may be returned to the Employer within one year of the date of denial
of the initial qualification of the Plan, but only if an application for
determination was made within the period of time prescribed under Section
403(c)(2)(B) of ERISA.
21.12 - VALIDITY OF PLAN
The validity of the Plan shall be determined and the Plan shall be construed and
interpreted in accordance with the laws of the State or Commonwealth in which
the Sponsor has its principal place of business, except as preempted by
applicable Federal law. The invalidity or illegality of any provision of the
Plan shall not affect the legality or validity of any other part thereof.
78
21.13 - TRUST AGREEMENT
The Trust Agreement and the Trust maintained thereunder shall be deemed to be a
part of the Plan as if fully set forth herein and the provisions of the Trust
Agreement are hereby incorporated by reference into the Plan.
21.14 - PARTIES BOUND
The Plan shall be binding upon the Employers, all Participants and Beneficiaries
hereunder, and, as the case may be, the heirs, executors, administrators,
successors, and assigns of each of them.
21.15 - APPLICATION OF CERTAIN PLAN PROVISIONS
A Participant's Beneficiary, if the Participant has died, or alternate payee
under a qualified domestic relations order shall be treated as a Participant for
purposes of directing investments as provided in Article X. For purposes of the
general administrative provisions and limitations of the Plan, a Participant's
Beneficiary or alternate payee under a qualified domestic relations order shall
be treated as any other person entitled to receive benefits under the Plan. Upon
any termination of the Plan, any such Beneficiary or alternate payee under a
qualified domestic relations order who has an interest under the Plan at the
time of such termination, which does not cease by reason thereof, shall be
deemed to be a Participant for all purposes of the Plan.
21.16 - LEASED EMPLOYEES
Any leased employee, other than an excludable leased employee, shall be treated
as an employee of the Employer for which he performs services for all purposes
of the Plan with respect to the provisions of Sections 401(a)(3), (4), (7), and
(16), and 408(k), 410, 411, 415, and 416 of the Code; provided, however, that no
leased employee shall accrue a benefit hereunder based on service as a leased
employee except as otherwise specifically provided in the Plan. A "leased
employee" means any person who performs services for an Employer or a Related
Company (the "recipient") (other than an employee of the recipient) pursuant to
an agreement between the recipient and any other person (the "leasing
organization") on a substantially full-time basis for a period of at least one
year, provided that such services are of a type historically performed, in the
business field of the recipient, by employees. An "excludable leased employee"
means any leased employee of the recipient who is covered by a money purchase
pension plan maintained by the leasing organization which provides for (i) a
nonintegrated employer contribution on
79
behalf of each participant in the plan equal to at least ten percent of
compensation, (ii) full and immediate vesting, and (iii) immediate participation
by employees of the leasing organization (other than employees who perform
substantially all of their services for the leasing organization or whose
compensation from the leasing organization in each plan year during the
four-year period ending with the plan year is less than $1,000); provided,
however, that leased employees do not constitute more than 20 percent of the
recipient's nonhighly compensated work force. For purposes of this Section,
contributions or benefits provided to a leased employee by the leasing
organization that are attributable to services performed for the recipient shall
be treated as provided by the recipient.
21.17 - TRANSFERRED FUNDS
If funds from another qualified plan are transferred or merged into the Plan,
such funds shall be held and administered in accordance with any restrictions
applicable to them under such other plan to the extent required by law and shall
be accounted for separately to the extent necessary to accomplish the foregoing.
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ARTICLE XXII
TOP-HEAVY PROVISIONS
22.1 - DEFINITIONS
For purposes of this Article, the following terms shall have the following
meanings:
(a) The "compensation" of an employee means compensation as defined in
Section 415 of the Code and regulations issued thereunder. In no
event, however, shall the compensation of a Participant taken into
account under the Plan for any Plan Year exceed (1) $200,000 for Plan
Years beginning prior to January 1, 1994, or (2) $150,000 for Plan
Years beginning on or after January 1, 1994 (subject to adjustment
annually as provided in Section 401(a)(17)(B) and Section 415(d) of
the Code; provided, however, that the dollar increase in effect on
January 1 of any calendar year, if any, is effective for Plan Years
beginning in such calendar year). If the compensation of a Participant
is determined over a period of time that contains fewer than 12
calendar months, then the annual compensation limitation described
above shall be adjusted with respect to that Participant by
multiplying the annual compensation limitation in effect for the Plan
Year by a fraction the numerator of which is the number of full months
in the period and the denominator of which is 12; provided, however,
that no proration is required for a Participant who is covered under
the Plan for less than one full Plan Year if the formula for
allocations is based on Compensation for a period of at least 12
months. In determining the compensation, for purposes of applying the
annual compensation limitation described above, of a Participant who
is a five-percent owner or one of the ten Highly Compensated Employees
receiving the greatest compensation for the Plan Year, the
compensation of the Participant's spouse and of his lineal descendants
who have not attained age 19 as of the close of the Plan Year shall be
included as compensation of the Participant for the Plan Year. If as a
result of applying the family aggregation rule described in the
preceding sentence the annual compensation limitation would be
exceeded, the limitation shall be prorated among the affected family
members in proportion to each member's compensation as determined
prior to application of the family aggregation rules.
(b) The "determination date" with respect to any Plan Year means the last
day of the preceding Plan Year, except that
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the determination date with respect to the first Plan Year of the
Plan, shall mean the last day of such Plan Year.
(c) A "key employee" means any Employee or former Employee who is a key
employee pursuant to the provisions of Section 416(i)(1) of the Code
and any Beneficiary of such Employee or former Employee.
(d) A "non-key employee" means any Employee who is not a key employee.
(e) A "permissive aggregation group" means those plans included in each
Employer's required aggregation group together with any other plan or
plans of the Employer, so long as the entire group of plans would
continue to meet the requirements of Sections 401(a)(4) and 410 of the
Code.
(f) A "required aggregation group" means the group of tax-qualified plans
maintained by an Employer or a Related Company consisting of each plan
in which a key employee participates and each other plan that enables
a plan in which a key employee participates to meet the requirements
of Section 401(a)(4) or Section 410 of the Code, including any plan
that terminated within the five-year period ending on the relevant
determination date.
(g) A "super top-heavy group" with respect to a particular Plan Year means
a required or permissive aggregation group that, as of the
determination date, would qualify as a top-heavy group under the
definition in paragraph (i) of this Section with "90 percent"
substituted for "60 percent" each place where "60 percent" appears in
the definition.
(h) A "super top-heavy plan" with respect to a particular Plan Year means
a plan that, as of the determination date, would qualify as a
top-heavy plan under the definition in paragraph (j) of this Section
with "90 percent" substituted for "60 percent" each place where "60
percent" appears in the definition. A plan is also a "super top-heavy
plan" if it is part of a super top-heavy group.
(i) A "top-heavy group" with respect to a particular Plan Year means a
required or permissive aggregation group if the sum, as of the
determination date, of the present value of the cumulative accrued
benefits for key employees under all defined benefit plans included in
such group and the aggregate of the account balances of key employees
under all defined contribution plans included in such group
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exceeds 60 percent of a similar sum determined for all employees
covered by the plans included in such group.
(j) A "top-heavy plan" with respect to a particular Plan Year means
(i), in the case of a defined contribution plan (including any
simplified employee pension plan), a plan for which, as of the
determination date, the aggregate of the accounts (within the meaning
of Section 416(g) of the Code and the regulations and rulings
thereunder) of key employees exceeds 60 percent of the aggregate of
the accounts of all participants under the plan, with the accounts
valued as of the relevant valuation date and increased for any
distribution of an account balance made in the five-year period ending
on the determination date, (ii), in the case of a defined benefit
plan, a plan for which, as of the determination date, the present
value of the cumulative accrued benefits payable under the plan
(within the meaning of Section 416(g) of the Code and the regulations
and rulings thereunder) to key employees exceeds 60 percent of the
present value of the cumulative accrued benefits under the plan for
all employees, with the present value of accrued benefits to be
determined under the accrual method uniformly used under all plans
maintained by an Employer or, if no such method exists, under the
slowest accrual method permitted under the fractional accrual rate of
Section 411(b)(1)(C) of the Code and including the present value of
any part of any accrued benefits distributed in the five-year period
ending on the determination date, and (iii) any plan (including any
simplified employee pension plan) included in a required aggregation
group that is a top-heavy group. For purposes of this paragraph, the
accounts and accrued benefits of any employee who has not performed
services for an Employer or a Related Company during the five-year
period ending on the determination date shall be disregarded. For
purposes of this paragraph, the present value of cumulative accrued
benefits under a defined benefit plan for purposes of top-heavy
determinations shall be calculated using the actuarial assumptions
otherwise employed under such plan, except that the same actuarial
assumptions shall be used for all plans within a required or
permissive aggregation group. A Participant's interest in the Plan
attributable to any Rollover Contributions, except Rollover
Contributions made from a plan maintained by an Employer or a Related
Company, shall not be considered in determining whether the Plan is
top-heavy. Notwithstanding the foregoing, if a plan is included in a
required or permissive aggregation group that is not a top-heavy
group, such plan shall not be a top-heavy plan.
83
(k) The "valuation date" with respect to any determination date means the
most recent Valuation Date occurring within the 12-month period ending
on the determination date.
22.2 - APPLICABILITY
Notwithstanding any other provision of the Plan to the contrary, the provisions
of this Article shall be applicable during any Plan Year in which the Plan is
determined to be a top-heavy plan as hereinafter defined. If the Plan is
determined to be a top-heavy plan and upon a subsequent determination date is
determined no longer to be a top-heavy plan, the vesting provisions of Article
VI shall again become applicable as of such subsequent determination date;
provided, however, that if the prior vesting provisions do again become
applicable, any Employee with three or more years of Vesting Service may elect
in accordance with the provisions of Article VI, to continue to have his vested
interest in his Employer Contributions Sub-Account determined in accordance with
the vesting schedule specified in Section 22.5.
22.3 - MINIMUM EMPLOYER CONTRIBUTION
If the Plan is determined to be a top-heavy plan, the Employer Contributions
allocated to the Separate Account of each non-key employee who is an Eligible
Employee and who is employed by an Employer or a Related Company on the last day
of such top-heavy Plan Year shall be no less than the lesser of (i) three
percent of his compensation or (ii) the largest percentage of compensation that
is allocated as an Employer Contribution and/or Tax-Deferred Contribution for
such Plan Year to the Separate Account of any key employee; except that, in the
event the Plan is part of a required aggregation group, and the Plan enables a
defined benefit plan included in such group to meet the requirements of Section
401(a)(4) or 410 of the Code, the minimum allocation of Employer Contributions
to each such non-key employee shall be three percent of the compensation of such
non-key employee. Any minimum allocation to a non-key employee required by this
Section shall be made without regard to any social security contribution made on
behalf of the non-key employee, his number of hours of service, his level of
compensation, or whether he declined to make elective or mandatory
contributions. Notwithstanding the minimum top-heavy allocation requirements of
this Section, if the Plan is a top-heavy plan, each non-key employee who is an
Eligible Employee and who is employed by an Employer or a Related Company on the
last day of a top-heavy Plan Year and who is also covered under a top-heavy
defined benefit plan maintained by an Employer or a Related Company will receive
the top-heavy benefits provided under the defined benefit plan in lieu of the
minimum top-heavy
84
allocation under the Plan offset by the benefits provided under the Plan.
22.4 - ADJUSTMENTS TO SECTION 415 LIMITATIONS
If the Plan is determined to be a top-heavy plan and an Employer maintains a
defined benefit plan covering some or all of the Employees that are covered by
the Plan, the defined benefit plan fraction and the defined contribution plan
fraction, described in Article VII, shall be determined as provided in Section
415 of the Code by substituting "1.0" for "1.25" each place where "1.25"
appears, except that such substitutions shall not be applied to the Plan if (i)
the Plan is not a super top-heavy plan, (ii) the Employer Contribution for such
top-heavy Plan Year for each non-key employee who is to receive a minimum
top-heavy benefit hereunder is not less than four percent of such non-key
employee's compensation, and (iii) the minimum annual retirement benefit accrued
by a non-key employee who participates under one or more defined benefit plans
of an Employer or a Related Company for such top-heavy Plan Year is not less
than the lesser of three percent times years of service with an Employer or a
Related Company or thirty percent.
22.5 - ACCELERATED VESTING
If the Plan is determined to be a top-heavy plan, a Participant's vested
interest in his Employer Contributions Sub-Account shall be determined no less
rapidly than in accordance with the following vesting schedule:
YEARS OF VESTING SERVICE VESTED INTEREST
less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
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ARTICLE XXIII
EFFECTIVE DATE
23.1 - EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT
This amendment and restatement is effective as of October 1, 1997.
* * *
EXECUTED AT BLUE BELL, PA, this 30TH day of DECEMBER, 1997.
C&D TECHNOLOGIES, INC.
By: /s/ Stephen E. Markert, Jr.
Title: VP-CFO
87