HYPRO CORPORATION 401(k) AND PROFIT SHARING PLAN
(Working Copy As Amended Through October 1, 1994)
HYPRO CORPORATION 401(k) AND PROFIT SHARING PLAN
TABLE OF CONTENTS
PAGE
ARTICLE I
GENERAL
Sec. 1.1 Name of Plan . . . . . . . . . . . . . . . . . . . . 1
Sec. 1.2 Purpose . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1.3 Effective Date . . . . . . . . . . . . . . . . . . . 1
Sec. 1.4 Company . . . . . . . . . . . . . . . . . . . . . . 1
Sec. 1.5 Construction and Applicable Law . . . . . . . . . . 1
Sec. 1.6 Benefits Determined Under Provisions in Effect at
Termination of Employment . . . . . . . . . . . . . 1
Sec. 1.7 Effective Date of Document . . . . . . . . . . . . . 1
Sec. 1.8 Merger of Plans . . . . . . . . . . . . . . . . . . 2
ARTICLE II
MISCELLANEOUS DEFINITIONS
Sec. 2.1 Account . . . . . . . . . . . . . . . . . . . . . . 3
Sec. 2.2 Active Participant . . . . . . . . . . . . . . . . . 3
Sec. 2.3 Affiliate . . . . . . . . . . . . . . . . . . . . . 3
Sec. 2.4 Beneficiary . . . . . . . . . . . . . . . . . . . . 3
Sec. 2.5 Board . . . . . . . . . . . . . . . . . . . . . . . 3
Sec. 2.6 Certified Earnings . . . . . . . . . . . . . . . . . 3
Sec. 2.7 Code . . . . . . . . . . . . . . . . . . . . . . . . 4
Sec. 2.8 Common Control . . . . . . . . . . . . . . . . . . . 4
Sec. 2.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . 4
Sec. 2.10 Family Member . . . . . . . . . . . . . . . . . . . 4
Sec. 2.11 Forfeitures . . . . . . . . . . . . . . . . . . . . 5
Sec. 2.12 Fund . . . . . . . . . . . . . . . . . . . . . . . . 5
Sec. 2.13 Funding Agency . . . . . . . . . . . . . . . . . . . 5
Sec. 2.14 Highly Compensated Employee . . . . . . . . . . . . 5
Sec. 2.15 Leased Employee . . . . . . . . . . . . . . . . . . 7
Sec. 2.16 Named Fiduciary . . . . . . . . . . . . . . . . . . 8
Sec. 2.17 Non-Highly Compensated Employee . . . . . . . . . . 8
Sec. 2.18 Normal Retirement Age . . . . . . . . . . . . . . . 8
Sec. 2.19 Participant . . . . . . . . . . . . . . . . . . . . 8
Sec. 2.20 Plan Year . . . . . . . . . . . . . . . . . . . . . 8
Sec. 2.21 Predecessor Employer . . . . . . . . . . . . . . . . 8
Sec. 2.22 Qualified Employee . . . . . . . . . . . . . . . . . 9
Sec. 2.23 Successor Employer . . . . . . . . . . . . . . . . . 9
Sec. 2.24 Top-Heavy Plan . . . . . . . . . . . . . . . . . . . 9
Sec. 2.25 Valuation Date . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
SERVICE PROVISIONS
Sec. 3.1 Employment Commencement Date . . . . . . . . . . . . 11
Sec. 3.2 Termination of Employment . . . . . . . . . . . . . 11
Sec. 3.3 Recognized Break in Service . . . . . . . . . . . . 11
Sec. 3.4 Elapsed Time . . . . . . . . . . . . . . . . . . . . 12
Sec. 3.5 Hours of Service . . . . . . . . . . . . . . . . . . 12
Sec. 3.6 Eligibility Computation Period . . . . . . . . . . . 14
Sec. 3.7 Year of Eligibility Service . . . . . . . . . . . . 15
Sec. 3.8 1-Year Break In Service . . . . . . . . . . . . . . 15
ARTICLE IV
PLAN PARTICIPATION
Sec. 4.1 Entry Date . . . . . . . . . . . . . . . . . . . . . 17
Sec. 4.2 Eligibility for Participation . . . . . . . . . . . 17
Sec. 4.3 Duration of Participation . . . . . . . . . . . . . 17
Sec. 4.4 No Guarantee of Employment . . . . . . . . . . . . . 17
ARTICLE V
CONTRIBUTIONS
Sec. 5.1 Salary Reduction Contributions . . . . . . . . . . . 18
Sec. 5.2 Profit Sharing Contributions . . . . . . . . . . . . 19
Sec. 5.3 Adjustment of Contributions Required by Code Section
401(k) . . . . . . . . . . . . . . . . . . . . . . . 21
Sec. 5.4 Distribution of Excess Deferrals . . . . . . . . . . 26
Sec. 5.5 Time of Contributions . . . . . . . . . . . . . . . 27
Sec. 5.6 Allocations . . . . . . . . . . . . . . . . . . . . 27
Sec. 5.7 Limitations on Contributions . . . . . . . . . . . . 28
ARTICLE VI
LIMITATION ON ALLOCATIONS
Sec. 6.1 Limitation on Allocations . . . . . . . . . . . . . 29
ARTICLE VII
INDIVIDUAL ACCOUNTS
Sec. 7.1 Accounts for Participants . . . . . . . . . . . . . 32
Sec. 7.2 Valuation Procedure . . . . . . . . . . . . . . . . 32
Sec. 7.3 Investment of Accounts . . . . . . . . . . . . . . . 33
Sec. 7.4 Participant Statements . . . . . . . . . . . . . . . 34
Sec. 7.5 Rollover Accounts . . . . . . . . . . . . . . . . . 35
Sec. 7.6 Transfers from Other Plans . . . . . . . . . . . . . 35
ARTICLE VIII
DESIGNATION OF BENEFICIARY
Sec. 8.1 Persons Eligible to Designate . . . . . . . . . . . 37
Sec. 8.2 Special Requirements for Married Participants . . . 37
Sec. 8.3 Form and Method of Designation . . . . . . . . . . . 37
Sec. 8.4 No Effective Designation . . . . . . . . . . . . . . 37
Sec. 8.5 Successor Beneficiary . . . . . . . . . . . . . . . 38
ARTICLE IX
BENEFIT REQUIREMENTS
Sec. 9.1 Benefit on Retirement or Disability . . . . . . . . 39
Sec. 9.2 Other Termination of Employment . . . . . . . . . . 39
Sec. 9.3 Death . . . . . . . . . . . . . . . . . . . . . . . 42
Sec. 9.4 Loans to Participants . . . . . . . . . . . . . . . 42
Sec. 9.5 No Withdrawals Prior to Termination of Employment . 45
ARTICLE X
DISTRIBUTION OF BENEFITS
Sec. 10.1 Time and Method of Payment . . . . . . . . . . . . . 47
Sec. 10.2 Distribution In Cash Only . . . . . . . . . . . . . 49
Sec. 10.3 Accounting Following Termination of Employment . . . 49
Sec. 10.4 Reemployment . . . . . . . . . . . . . . . . . . . . 50
Sec. 10.5 Source of Benefits . . . . . . . . . . . . . . . . . 50
Sec. 10.6 Incompetent Payee . . . . . . . . . . . . . . . . . 50
Sec. 10.7 Benefits May Not Be Assigned or Alienated . . . . . 50
Sec. 10.8 Payment of Taxes . . . . . . . . . . . . . . . . . . 50
Sec. 10.9 Conditions Precedent . . . . . . . . . . . . . . . . 50
Sec. 10.10 Company Directions to Funding Agency . . . . . . . . 51
Sec. 10.11 Effect on Unemployment Compensation . . . . . . . . 51
Sec. 10.12 Special Distribution Events . . . . . . . . . . . . 51
ARTICLE XI
FUND
Sec. 11.1 Composition . . . . . . . . . . . . . . . . . . . . 52
Sec. 11.2 Funding Agency . . . . . . . . . . . . . . . . . . . 52
Sec. 11.3 Compensation and Expenses of Funding Agency . . . . 52
Sec. 11.4 Funding Policy . . . . . . . . . . . . . . . . . . . 52
Sec. 11.5 Securities and Property of the Company . . . . . . . 52
Sec. 11.6 No Diversion . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XII
ADMINISTRATION OF PLAN
Sec. 12.1 Administration by Company . . . . . . . . . . . . . 55
Sec. 12.2 Certain Fiduciary Provisions . . . . . . . . . . . . 55
Sec. 12.3 Discrimination Prohibited . . . . . . . . . . . . . 56
Sec. 12.4 Evidence . . . . . . . . . . . . . . . . . . . . . . 56
Sec. 12.5 Correction of Errors . . . . . . . . . . . . . . . . 56
Sec. 12.6 Records . . . . . . . . . . . . . . . . . . . . . . 57
Sec. 12.7 General Fiduciary Standard . . . . . . . . . . . . . 57
Sec. 12.8 Prohibited Transactions . . . . . . . . . . . . . . 57
Sec. 12.9 Claims Procedure . . . . . . . . . . . . . . . . . . 57
Sec. 12.10 Bonding . . . . . . . . . . . . . . . . . . . . . . 57
Sec. 12.11 Waiver of Notice . . . . . . . . . . . . . . . . . . 57
Sec. 12.12 Agent For Legal Process . . . . . . . . . . . . . . 57
Sec. 12.13 Indemnification . . . . . . . . . . . . . . . . . . 57
ARTICLE XIII
AMENDMENT, TERMINATION, MERGER
Sec. 13.1 Amendment . . . . . . . . . . . . . . . . . . . . . 59
Sec. 13.2 Permanent Discontinuance of Contributions . . . . . 59
Sec. 13.3 Termination . . . . . . . . . . . . . . . . . . . . 59
Sec. 13.4 Partial Termination . . . . . . . . . . . . . . . . 60
Sec. 13.5 Merger, Consolidation, or Transfer of Plan Assets . 60
Sec. 13.6 Deferral of Distributions . . . . . . . . . . . . . 60
ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS
Sec. 14.1 Key Employee Defined . . . . . . . . . . . . . . . . 61
Sec. 14.2 Determination of Top-Heavy Status . . . . . . . . . 61
Sec. 14.3 Minimum Contribution Requirement . . . . . . . . . . 64
Sec. 14.4 Vesting Schedule . . . . . . . . . . . . . . . . . . 64
Sec. 14.5 Participation under Defined Benefit Plan and Defined
Contribution Plan . . . . . . . . . . . . . . . . . 65
Sec. 14.6 Definition of Employer . . . . . . . . . . . . . . . 65
Sec. 14.7 Exception For Collective Bargaining Unit . . . . . . 66
ARTICLE XV
MISCELLANEOUS PROVISIONS
Sec. 15.1 Insurance Company Not Responsible for Validity of
Plan . . . . . . . . . . . . . . . . . . . . . . . . 67
Sec. 15.2 Headings . . . . . . . . . . . . . . . . . . . . . . 67
Sec. 15.3 Capitalized Definitions . . . . . . . . . . . . . . 67
Sec. 15.4 Gender . . . . . . . . . . . . . . . . . . . . . . . 67
Sec. 15.5 Use of Compounds of Word "Here" . . . . . . . . . . 67
Sec. 15.6 Construed as a Whole . . . . . . . . . . . . . . . . 67
HYPRO CORPORATION 401(k) AND PROFIT SHARING PLAN
(Working Copy As Amended Through October 1, 1994)
ARTICLE I
GENERAL
Sec. 1.1 Name of Plan. The name of the discretionary
contribution profit sharing plan set forth herein is Hypro Corporation
401(k) and Profit Sharing Plan. It is sometimes herein referred to as the
"Plan".
Sec. 1.2 Purpose. The Plan has been established so that
eligible employees may have an additional source of retirement income.
Sec. 1.3 Effective Date. The "Effective Date" of the Plan,
the date as of which the Plan was established, is January 31, 1956.
Sec. 1.4 Company. The "Company" is Hypro Corporation, a
Delaware corporation, and any Successor Employer thereof.
Sec. 1.5 Construction and Applicable Law. The Plan is
intended to meet the requirements for qualification under section 401(a)
of the Code and the requirements applicable to qualified cash or deferred
arrangements under section 401(k) of the Code. The Plan is also intended
to be in full compliance with applicable requirements of ERISA. The Plan
shall be administered and construed consistent with said intent. It shall
also be construed and administered according to the laws of the State of
Minnesota to the extent that such laws are not preempted by the laws of
the United States of America. All controversies, disputes, and claims
arising hereunder shall be submitted to the United States District Court
for the District of Minnesota, except as otherwise provided in any trust
agreement entered into with a Funding Agency.
Sec. 1.6 Benefits Determined Under Provisions in Effect at
Termination of Employment. Except as may be specifically provided herein
to the contrary, benefits under the Plan attributable to service prior to
a Participant's Termination of Employment shall be determined and paid in
accordance with the provisions of the Plan as in effect as of the date the
Termination of Employment occurred unless he or she becomes an Active
Participant after that date and such active participation causes a
contrary result under the provisions hereof. However, the provisions of
this document shall apply to any such Participant to the extent necessary
to maintain the qualified status of the Plan under Code section 401(a) or
to comply with the requirements of ERISA.
Sec. 1.7 Effective Date of Document. Unless a different date
is specified for some purpose in this document, the provisions of this
Plan document are generally effective as of July 1, 1987. However, any
provision necessary to comply with a requirement of the Tax Reform Act of
1986, other federal legislation, or a Treasury regulation which
requirement has an effective date later than 1987 shall not be effective
until the date required by the applicable law or regulation unless a
different effective date is specifically stated in this document.
Sec. 1.8 Merger of Plans. Effective April 1, 1992, the Hypro
Corporation 401(k) Plan and the Hypro Corporation Sherwood Plant Profit
Sharing Plan (hereafter, the "Merged Plans") are merged into the Hypro
Corporation Profit Sharing Plan. The Hypro Corporation Profit Sharing
Plan is renamed the Hypro Corporation 401(k) and Profit Sharing Plan.
This document reflects such merger. Any provision of this document which
is required as an amendment of either of the Merged Plans effective as of
a date prior to April 1, 1992 in order for such Merged Plan to comply with
the requirements of the Tax Reform Act of 1986 or other federal
legislation or regulations shall apply to the Merged Plan as of the
applicable date.
ARTICLE II
MISCELLANEOUS DEFINITIONS
Sec. 2.1 Account. "Account" means a Participant's or
Beneficiary's interest in the Fund of any of the types described in Sec.
7.1.
Sec. 2.2 Active Participant. An employee is an "Active
Participant" only while he or she is both a Participant and a Qualified
Employee.
Sec. 2.3 Affiliate. "Affiliate" means any trade or business
entity under Common Control with the Company, or under Common Control with
a Predecessor Employer while it is such.
Sec. 2.4 Beneficiary. "Beneficiary" means the person or
persons designated as such pursuant to the provisions of Article VIII.
Sec. 2.5 Board. The "Board" is the board of directors of the
Company, and includes any executive committee thereof authorized to act
for said board of directors.
Sec. 2.6 Certified Earnings. "Certified Earnings" of a
Participant for a Plan Year means the amount determined by the Company to
be the total earnings paid to the Participant by the Company during such
Plan Year for service as a Qualified Employee, subject to the following:
(a) Discretionary bonuses, commissions, and gain sharing
payments shall not be included in Certified Earnings.
(b) Certified Earnings include Salary Reduction
Contributions to this Plan and any contributions made by salary
reduction to any other plan which meets the requirements of Code
sections 125, 401(k), or 402(h)(1)(B), whether or not such
contributions are actually excludable from the Participant's
gross income for federal income tax purposes. Certified
Earnings do not include Profit Sharing Contributions or Special
Profit Sharing Contributions to this Plan.
(c) Allowances or reimbursements for expenses, salary
continuation, severance pay, payments or contributions to or for
the benefit of the employee under any other deferred
compensation, pension, profit sharing, insurance, or other
employee benefit plan, stock options, stock appreciation rights
or cash payments in lieu thereof, merchandise or service
discounts, non-cash employee awards, benefits in the form of
property or the use of property, earnings payable in a form
other than cash, or other similar fringe benefits shall not be
included in computing Certified Earnings, except as provided in
subsection (b) or to the extent such amounts are required to be
included in determining the employee's regular rate of pay under
the Federal Fair Labor Standards Act for purposes of computing
overtime pay thereunder.
(d) Certified Earnings of a Participant for any Plan
Year shall not exceed $150,000, adjusted for each Plan Year to
take into account any cost of living increases provided for that
year in accordance with regulations prescribed by the Secretary
of the Treasury, subject to the provisions of Sec. 2.10(b) in
the case of certain Family Members. The dollar increase in
effect on January 1 of any calendar year shall apply to Plan
Years beginning in that calendar year. This subsection shall
also apply for any Plan Year commencing prior to 1989 for which
the Plan is a Top-Heavy Plan. If a Plan Year is shorter than 12
months, the limit under this subsection for that year shall be
multiplied by a fraction, the numerator of which is the number
of months in the short Plan Year and the denominator of which is
12.
(e) Notwithstanding the foregoing, the provisions of
this section (other than subsection (d)) shall apply only to
Plan Years commencing on or after October 1, 1991. For Plan
Years commencing prior to that date, Certified Earnings shall be
equal to "Certified Earnings" or "Compensation" as defined in
the predecessor document for this Plan or the applicable Merged
Plan, subject in all events to the limit in subsection (d) of
this document.
Sec. 2.7 Code. "Code" means the Internal Revenue Code of 1986
as from time to time amended.
Sec. 2.8 Common Control. A trade or business entity (whether
a corporation, partnership, sole proprietorship or otherwise) is under
"Common Control" with another trade or business entity (i) if both
entities are corporations which are members of a controlled group of
corporations as defined in Code section 414(b), or (ii) if both entities
are trades or businesses (whether or not incorporated) which are under
common control as defined in Code section 414(c), or (iii) if both
entities are members of an affiliated service group as defined in Code
section 414(m), or (iv) if both entities are required to be aggregated
pursuant to regulations under Code section 414(o). Service for all
entities under Common Control shall be treated as service for a single
employer to the extent required by the Code; provided, however, that an
individual shall not be a Qualified Employee by reason of this section.
In applying the first sentence of this section for purposes of Article VI,
the provisions of subsections (b) and (c) of section 414 of the Code are
deemed to be modified as provided in Code section 415(h).
Sec. 2.9 ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974 as from time to time amended.
Sec. 2.10 Family Member. "Family Member" means an individual
described in Code section 414(q)(6) with respect to a Highly Compensated
Employee who is a more than 5-percent owner or is among the 10 Highly
Compensated Employees paid the greatest compensation. Family Members
include the Highly Compensated Employee, his or her spouse and lineal
ascendants or descendants, and the spouses of such lineal ascendants or
descendants. Legal adoptions shall be taken into account and treated as
blood relations for purposes of determining lineal ascendants and
descendants.
(a) An individual who qualifies as a Family Member on
any day of a Plan Year will be treated as a Family Member for
the entire Plan Year.
(b) For purposes of applying the dollar limit on
Certified Earnings under Sec. 2.6(d), any Participant who is the
spouse of a Highly Compensated Employee who is a more than
5-percent owner or is among the 10 Highly Compensated Employees
paid the greatest compensation and any of the lineal descendants
of such a Highly Compensated Employee who have not attained age
19 before the end of the Plan Year shall not be treated as a
separate Participant, and any Certified Earnings of the Family
Member shall be treated as Certified Earnings of the Highly
Compensated Employee. If the dollar limit is exceeded as a
result of the preceding sentence, the limit shall be prorated
among the affected individuals in proportion to each such
individual's compensation determined prior to the application of
the preceding sentence (except for purposes of determining the
portion of compensation up to the integration level if the Plan
provides for permitted disparity). The dollar limit shall be
applied separately to any other Family Member.
Sec. 2.11 Forfeitures. "Forfeitures" means that part of the
Fund so recognized under Sec. 9.2(b)(2).
Sec. 2.12 Fund. "Fund" means the aggregate of assets described
in Sec. 11.1.
Sec. 2.13 Funding Agency. "Funding Agency" is a trustee or
trustees or an insurance company appointed and acting from time to time in
accordance with the provisions of Sec. 11.2 for the purpose of holding,
investing, and disbursing all or a part of the Fund.
Sec. 2.14 Highly Compensated Employee. "Highly Compensated
Employee" for any Plan Year means an individual described as such in Code
section 414(q).
(a) Unless otherwise provided in Code section 414(q),
each employee who meets one of the following requirements is a
"Highly Compensated Employee":
(1) The employee at any time during the current
or prior Plan Year was a more than 5-percent owner as
defined in Code section 414(q)(3).
(2) The employee received Compensation from the
employer in excess of $75,000 for the prior Plan Year.
(3) The employee both received Compensation
from the employer in excess of $50,000 for the prior
Plan Year and was in the top 20 percent of employees
of the employer who performed services for the
employer in such prior Plan Year, when ranked on the
basis of Compensation paid during the Plan Year. For
purposes of determining the top 20 percent of
employees under Code section 414(q)(8), any
non-resident aliens who receive no earned income from
the employer which constitutes income from sources
within the United States shall be disregarded.
(4) The employee was an officer of the employer
receiving Compensation in excess of $45,000 for the
prior Plan Year. However, no more than the lesser of
(i) 50 employees or (ii) the greater of 3 employees or
10 percent of all employees of the employer shall be
treated as officers for purposes of this paragraph.
If for any Plan Year no officer meets the requirements
of this paragraph (4), then the officer receiving the
greatest Compensation in the prior Plan Year shall be
treated as a Highly Compensated Employee.
(5) The employee would meet the requirements of
paragraph (2), (3), or (4) in the current Plan Year
(but not in the prior Plan Year) and is among the 100
employees paid the greatest Compensation by the
employer during the current Plan Year.
(6) The individual is a former employee who had
a separation year prior to the current Plan Year and
such individual performed services for the employer
and was a Highly Compensated Employee for either (i)
such separation year, or (ii) any Plan Year ending on
or after the individual's 55th birthday. A
"separation year" is the Plan Year in which the
individual separates from service with the employer.
With respect to an individual who separated from
service before January 1, 1987, the individual will be
included as a Highly Compensated Employee only if the
individual was a more than 5-percent owner or received
Compensation in excess of $50,000 during (i) the
employee's separation year (or the year preceding such
separation year), or (ii) any year ending on or after
such individual's 55th birthday (or the last year
ending before such individual's 55th birthday).
(7) Notwithstanding the foregoing, if the
Company maintained significant business activities and
employed employees in at least two significantly
separate geographic areas at all times during the Plan
Year and satisfied such other conditions as the
Secretary may prescribe, the Company may elect to
determine whether an employee is a Highly Compensated
Employee for that year by substituting "$50,000" for
"$75,000" in paragraph (2) and disregarding paragraph
(3).
(b) The dollar amounts specified in paragraphs (2), (3),
and (4) of subsection (a) shall be indexed for cost of living
increases for each calendar year after 1987 as provided in the
applicable Treasury regulations. If a Plan Year is shorter than
12 months, the dollar amounts under this subsection for that
year shall be multiplied by a fraction, the numerator of which
is the number of months in the short Plan Year and the
denominator of which is 12. For any Plan Year, the applicable
dollar amount shall be the dollar amount in effect for the
calendar year in which the Plan Year commences.
(c) For purposes of this section, "employer" includes
the Company and all Affiliates, and "employee" includes Leased
Employees.
(d) For purposes of this section, "Compensation" means
the amount defined as such under Sec. 6.1(f) plus the Salary
Reduction Contributions to this Plan and any elective salary
reduction contributions made by or on behalf of the employee to
any other plan maintained by the Company or an Affiliate which
are not includable in the gross income of the employee under
Code sections 125, 401(k), 402(h)(1)(B), or 403(b).
Sec. 2.15 Leased Employee. "Leased Employee" means any person
defined as such by Code section 414(n). In general, a Leased Employee is
any person who is not otherwise an employee of the Company or an Affiliate
(referred to collectively as the "recipient") and who pursuant to an
agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code section
414(n)(6)) on a substantially full-time basis for a period of at least one
year and such services are of a type historically performed by employees
in the business field of the recipient. For purposes of the requirements
listed in Code section 414(n)(3), any Leased Employee shall be treated as
an employee of the recipient, and contributions or benefits provided by
the leasing organization which are attributable to services performed for
the recipient shall be treated as provided by the recipient. However, if
Leased Employees constitute less than 20% of the Company's non-highly
compensated work force within the meaning of Code section
414(n)(5)(C)(ii), those Leased Employees covered by a plan described in
Code section 414(n)(5) shall be disregarded. Notwithstanding the
foregoing, no Leased Employee shall be a Qualified Employee or a
Participant in this Plan.
Sec. 2.16 Named Fiduciary. The Company is a "Named Fiduciary"
for purposes of ERISA with authority to control or manage the operation
and administration of the Plan, including control or management of the
assets of the Plan. Other persons are also Named Fiduciaries under ERISA
if so provided thereunder or if so identified by the Company, by action of
the Board. Such other person or persons shall have such authority to
control or manage the operation and administration of the Plan, including
control or management of the assets of the Plan, as may be provided by
ERISA or as may be allocated by the Company, by action of the Board.
Sec. 2.17 Non-Highly Compensated Employee. "Non-Highly
Compensated Employee" means an employee of the Company who is neither a
Highly Compensated Employee nor a Family Member.
Sec. 2.18 Normal Retirement Age. "Normal Retirement Age" is
age 65.
Sec. 2.19 Participant. A "Participant" is an individual
described as such in Article IV.
Sec. 2.20 Plan Year. Commencing October 1, 1989, a "Plan Year"
is the 12-consecutive-month period commencing on each October 1 and ending
on the following September 30. The period from July 1, 1989 to
September 30, 1989 was a short Plan Year. Prior to July 1, 1989, the Plan
Year of the Plan was the 12-consecutive-month period commencing on each
July 1. The Hypro Corporation 401(k) Plan shall have a short Plan Year
commencing on January 1, 1992, and ending on September 30, 1992, and,
thereafter, the Plan Year shall be the 12-consecutive-month period
commencing on each October 1 and ending on the following September 30.
Sec. 2.21 Predecessor Employer. Any corporation, partnership,
firm, or individual, a substantial part of the assets and employees of
which are acquired by a successor is a "Predecessor Employer" if named in
this section, subject to any conditions and limitations with respect
thereto imposed by this section; provided, however, that any such
corporation, partnership, firm, or individual may be named as a
Predecessor Employer only if all of its employees who at the time of the
acquisition become employees of the successor and Participants hereunder
are treated uniformly, the use of service with it does not produce
discrimination in favor of Highly Compensated Employees, and there is no
duplication of benefits for such service. To be considered a Predecessor
Employer, the acquisition of assets and employees of a corporation,
partnership, firm, or individual must be by the Company, by an Affiliate,
or by another Predecessor Employer. Each of the following is a
Predecessor Employer for the period prior to the date indicated and
subject to such other conditions and limitations, if any, specified with
respect thereto:
(a) Lear Siegler, Inc. for periods prior to March 24,
1987.
Any other employer shall be a Predecessor Employer if so required by
regulations prescribed by the Secretary of the Treasury.
Sec. 2.22 Qualified Employee. "Qualified Employee" means any
employee of the Company (other than an employee classified as a temporary
employee), subject to the following:
(a) A nonresident alien within the meaning of Code
section 7701(b)(1)(B) while not receiving earned income (within
the meaning of Code section 911(d)(2)) from the Company which
constitutes income from sources within the United States (within
the meaning of Code section 861(a)(3)) is not a Qualified
Employee.
(b) An employee is not a Qualified Employee unless his
or her services are performed within the continental United
States (including Alaska) or Hawaii, or the principal base of
operations to which the employee frequently returns is within
the continental United States (including Alaska) or Hawaii.
(c) Eligibility of employees in a collective bargaining
unit to participate in the Plan is subject to negotiations with
the representative of that unit. During any period that an
employee is covered by the provisions of a collective bargaining
agreement between the Company and such representative, the
employee shall not be considered a Qualified Employee for
purposes of this Plan unless such agreement expressly so
provides. For purposes of this section only, such an agreement
shall be deemed to continue after its formal expiration during
collective bargaining negotiations pending the execution of a
new agreement.
(d) An employee shall be deemed to be a Qualified
Employee during a period of absence from active service which
does not result from a Termination of Employment, provided he or
she is a Qualified Employee at the commencement of such period
of absence.
Sec. 2.23 Successor Employer. A "Successor Employer" is any
entity that succeeds to the business of the Company through merger,
consolidation, acquisition of all or substantially all of its assets, or
any other means and which elects before or within a reasonable time after
such succession, by appropriate action evidenced in writing, to continue
the Plan.
Sec. 2.24 Top-Heavy Plan. "Top-Heavy Plan" is defined in Sec.
14.2(a).
Sec. 2.25 Valuation Date. "Valuation Date" means the date on
which the Fund and Accounts are valued as provided in Article VII. Each
of the following is a Valuation Date:
(a) The last day of a Plan Year.
(b) Effective April 1, 1992, the last day of each
quarter of a Plan Year.
(c) Such other day, as designated by the Company in
written notice to the Funding Agency, as the Company may
consider necessary or advisable to provide for the orderly and
equitable administration of the Plan.
ARTICLE III
SERVICE PROVISIONS
Sec. 3.1 Employment Commencement Date. "Employment
Commencement Date" means the date on which an employee first performs an
Hour of Service for the Company, an Affiliate, or a Predecessor Employer.
For eligibility service purposes, the date on which an employee first
performs an Hour of Service after a 1-Year Break in Service is also an
"Employment Commencement Date".
Sec. 3.2 Termination of Employment. The "Termination of
Employment" of an employee for purposes of the Plan shall be deemed to
occur upon resignation, discharge, retirement, death, failure to return to
active work at the end of an authorized leave of absence or the authorized
extension or extensions thereof, failure to return to work when duly
called following a temporary layoff, or upon the happening of any other
event or circumstance which, under the policy of the Company, an
Affiliate, or a Predecessor Employer as in effect from time to time,
results in the termination of the employer-employee relationship;
provided, however, that a Termination of Employment shall not be deemed to
occur upon a transfer between any combination of the Company, Affiliates,
and Predecessor Employers. If the employer-employee relationship is
terminated because of the entry of an employee into the armed forces of
the United States and if the employee subsequently returns to employment
with the Company or an Affiliate under circumstances such that he or she
has reemployment rights under the provisions of any applicable federal
law, for all purposes of the Plan and only for such purposes the employee
shall be deemed to have been on authorized leave of absence during the
period of military service. Notwithstanding the foregoing, a Termination
of Employment shall be deemed not to have occurred for purposes of
entitling a Participant to distributions from his or her 401-K Account or
Special Profit Sharing Account if the Participant has not incurred a
"separation from service" or "disability" as defined in applicable
regulations, except as provided in Sec. 10.12.
Sec. 3.3 Recognized Break in Service. A "Recognized Break in
Service" is a period of at least 12 consecutive months duration which
begins on the day on which an individual's Termination of Employment
occurs. A Recognized Break in Service ends, if ever, on the day on which
the individual again performs an Hour of Service for the Company, an
Affiliate or a Predecessor Employer.
(a) If an individual is absent from work for maternity
or paternity reasons, and the absence began on or after the
first day of the first Plan Year commencing in 1985, the
12-month period beginning with the first day of such absence
shall not be included in a Recognized Break In Service.
(b) For purposes of subsection (a), an absence from work
for maternity or paternity reasons means an absence (i) by
reason of the pregnancy of the individual, (ii) by reason of the
birth of a child of the individual, (iii) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes
of caring for such child for a period beginning immediately
following such birth or placement.
Sec. 3.4 Elapsed Time. An individual's "Elapsed Time" is
equal to the aggregate time elapsed between his or her Employment
Commencement Date and his or her most recent Termination of Employment or
any other date as of which a determination of Elapsed Time is to be made,
expressed in years and days, reduced as follows:
(a) All Recognized Breaks in Service shall be
subtracted. Any periods that would have been included in a
Recognized Break In Service if Sec. 3.3(a) did not apply shall
also be subtracted.
(b) If a nonvested individual has had a Recognized Break
in Service equal to or longer than his or her Elapsed Time prior
to such break, all Elapsed Time prior to such Recognized Break
in Service shall be disregarded, subject to the following:
(1) Commencing on the first day of the first
Plan Year beginning in 1985, the preceding sentence
shall not apply unless the Participant incurs a
Recognized Break In Service of at least 60 months
duration; provided, however, that if as of the last
day of the previous Plan Year, any service prior to a
Recognized Break In Service would not have been
required to be taken into account, such service shall
not be required to be taken into account by reason of
this sentence.
(2) The individual's Elapsed Time prior to a
Recognized Break In Service shall not include any
Elapsed Time disregarded under this section because of
any previous Recognized Break In Service.
(3) For purposes of this subsection, a
"nonvested individual" is an individual who has no
vested right to an accrued benefit under the Plan
derived from employer contributions (including Salary
Reduction Contributions).
For purposes of converting days into years, 365 days constitute one year.
Sec. 3.5 Hours of Service. "Hours of Service" are determined
according to the following subsections with respect to each applicable
computation period. The Company may round up the number of Hours of
Service at the end of each computation period or more frequently as long
as a uniform practice is followed with respect to all employees determined
by the Company to be similarly situated for compensation, payroll, and
recordkeeping purposes.
(a) Hours of Service are computed only with respect to
service with the Company, Affiliates, and Predecessor Employers
and are aggregated for service with all such employers.
(b) For any portion of a computation period during which
a record of hours is maintained for an employee, Hours of
Service shall be credited as follows:
(1) Each hour for which the employee is paid,
or entitled to payment, for the performance of duties
for his or her employer during the applicable
computation period is an Hour of Service.
(2) Each hour for which the employee is paid,
or entitled to payment, by his or her employer on
account of a period of time during which no duties are
performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff,
jury duty, military duty, or leave of absence, is an
Hour of Service. No more than 501 Hours of Service
shall be credited under this paragraph for any single
continuous period (whether or not such period occurs
in a single computation period). Hours of Service
shall not be credited under this paragraph with
respect to payments under a plan maintained solely for
the purpose of complying with applicable workers'
compensation, unemployment compensation, or disability
insurance laws or with respect to a payment which
solely reimburses the individual for medical or
medically related expenses incurred by the employee.
(3) Each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed
to by the employer is an Hour of Service. Such Hours
of Service shall be credited to the computation period
or periods to which the award or agreement for back
pay pertains, rather than to the computation period in
which the award, agreement, or payment is made.
Crediting of Hours of Service for back pay awarded or
agreed to with respect to periods described in
paragraph (2) shall be subject to the limitations set
forth therein.
(4) Hours under this subsection shall be
calculated and credited pursuant to section
2530.200b-2 of the Department of Labor Regulations,
which are incorporated herein by this reference.
(5) The Company may use any records to
determine Hours of Service which it considers an
accurate reflection of the actual facts. However, for
purposes of determining Hours of Service completed
prior to the first day of the first Plan Year
beginning in 1976, the Company may use whatever
records may be reasonably accessible to it and may
make whatever calculations are necessary to determine
the approximate number of Hours of Service completed
during such prior period or periods; and if accessible
records are insufficient to make such approximation
for a particular employee or group of employees, the
Company may make a reasonable estimate of the Hours of
Service completed by such employee or employees during
the particular period.
(c) For any portion of a computation period during which
an employee is within a classification for which a record of
hours for the performance of duties is not maintained, the
employee shall be credited with 190 Hours of Service for each
month for which he or she would otherwise be credited with at
least one Hour of Service under subsection (b).
(d) Nothing in this section shall be construed as
denying an employee credit for an Hour of Service if credit is
required by any federal law other than ERISA. The nature and
extent of such credit shall be determined under such other law.
(e) In no event shall duplicate credit as an Hour of
Service be given for the same hour.
(f) This subsection shall apply to an individual who has
service as (i) either a common law employee or a Leased Employee
of (ii) either the Company or an Affiliate. For purposes of
determining Hours of Service, such an individual shall be
considered an employee of the Company or Affiliate during any
period he or she would have been a Leased Employee of the
Company or Affiliate but for the requirement that he or she must
have performed services for the Company or Affiliate on a
substantially full-time basis for a period of at least one year.
Sec. 3.6 Eligibility Computation Period. An employee's first
Eligibility Computation Period is the 12-consecutive-month period
beginning on his or her Employment Commencement Date. The second
Eligibility Computation Period is the Plan Year commencing in said
12-consecutive-month period. Each subsequent Plan Year prior to the end
of the Plan Year in which the employee has a 1-Year Break In Service is an
Eligibility Computation Period. If subsequent to a 1-Year Break In
Service the employee has another Employment Commencement Date, Eligibility
Computation Periods for the period beginning on such date shall be
computed as though such date were the employee's first Employment
Commencement Date.
Sec. 3.7 Year of Eligibility Service. Effective April 1,
1992, a "Year of Eligibility Service" is an Eligibility Computation Period
in which an employee has at least 1000 Hours of Service, subject to the
following:
(a) For purposes of determining Years of Eligibility
Service as of April 1, 1992, an employee shall receive credit
for the number of years of service equal to the number of whole
years of Elapsed Time credited to the employee as of April 1,
1992, and the employee shall receive credit, in the Eligibility
Computation Period which includes April 1, 1992, for the number
of Hours of Service determined by applying the rule set forth in
Sec. 3.5(c) to any fractional part of a year credited to the
employee under Sec. 3.4 as of April 1, 1992.
(b) If a nonvested employee has a 1-Year Break In
Service, Years of Eligibility Service prior to such break shall
not be recognized for purposes of the Plan if the number of the
employee's consecutive 1-Year Breaks In Service equals or
exceeds the aggregate number of Years of Eligibility Service
before the break, subject to the following:
(1) Commencing the first day of the first Plan
Year beginning in 1985, the preceding sentence shall
not apply unless the employee has a minimum of five
consecutive 1-Year Breaks In Service; provided,
however, that if as of the last day of the previous
Plan Year, any service prior to a 1-Year Break In
Service would not have been required to be taken into
account, such service shall not be required to be
taken into account by reason of this sentence.
(2) If any Years of Eligibility Service are not
required to be taken into account by reason of a
break-in-service period to which this subsection
applies, such Years of Eligibility Service shall not
be taken into account in applying this subsection to a
subsequent break-in-service period.
(3) For purposes of this subsection, a
"nonvested employee" is an individual who has no
vested right to an accrued benefit under the Plan
derived from employer contributions (including Salary
Reduction Contributions).
Sec. 3.8 1-Year Break In Service. "1-Year Break In Service"
means a Plan Year in which the employee has 500 or fewer Hours of Service.
The 1-Year Break In Service shall be recognized as such on the last day of
such Plan Year.
(a) Notwithstanding the provisions of Sec. 3.5, for
purposes of determining whether a 1-Year Break In Service has
occurred with respect to a Plan Year beginning after 1984, an
individual who is absent from work for maternity or paternity
reasons shall receive credit for the Hours of Service which
would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be
determined, 8 Hours of Service per day of such absence;
provided, however, that the total number of Hours of Service
recognized under this subsection shall not exceed 501 hours.
The Hours of Service credited under this subsection shall be
credited in the Plan Year in which the absence begins if the
crediting is necessary to prevent a 1-Year Break In Service in
that Plan Year or, in all other cases, in the following Plan
Year.
(b) For purposes of subsection (a), an absence from work
for maternity or paternity reasons means an absence that started
during a Plan Year beginning after 1984 (i) by reason of the
pregnancy of the individual, (ii) by reason of the birth of a
child of the individual, (iii) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (iv) for purposes of caring
for such child for a period beginning immediately following such
birth or placement.
(c) The short Plan Year from July 1, 1989 to
September 30, 1989 shall be disregarded for purposes of applying
this section.
ARTICLE IV
PLAN PARTICIPATION
Sec. 4.1 Entry Date. Effective April 1, 1992, "Entry Date"
means October 1 and April 1 of each Plan Year.
Sec. 4.2 Eligibility for Participation. Eligibility to
participate in the Plan shall be determined as follows:
(a) Each person who was a Participant in the Plan or a
Merged Plan on March 31, 1992 shall be a Participant on April 1,
1992. On and after April 1, 1992, an individual shall become a
Participant on the earliest Entry Date on which he or she is a
Qualified Employee.
(b) If a former Participant is reemployed as a Qualified
Employee, the individual will become a Participant again on the
date of rehire.
(c) If a former employee who was not previously a
Participant is reemployed as a Qualified Employee, and if the
employee is credited with at least one Year of Eligibility
Service during Eligibility Computation Periods ending prior to
the immediately preceding Entry Date, the employee will become a
Participant on the date of rehire.
(d) If an employee of the Company or an Affiliate who is
neither a Participant nor a Qualified Employee is transferred to
a position in which he or she is a Qualified Employee, and if
the employee is credited with at least one Year of Eligibility
Service during Eligibility Computation Periods ending prior to
the Entry Date preceding the transfer, the employee shall become
a Participant on the date of the transfer.
Sec. 4.3 Duration of Participation. A Participant shall
continue to be such until the later of:
(a) The Participant's Termination of Employment.
(b) The date all benefits, if any, to which the
Participant is entitled hereunder have been distributed from the
Fund.
Sec. 4.4 No Guarantee of Employment. Participation in the
Plan does not constitute a guarantee or contract of employment with the
Company. Such participation shall in no way interfere with any rights the
Company would have in the absence of such participation to determine the
duration of an employee's employment.
ARTICLE V
CONTRIBUTIONS
Sec. 5.1 Salary Reduction Contributions. Prior to April 1,
1992, Salary Reduction Contributions shall be made pursuant to the
provisions of the Hypro Corporation 401(k) Plan. On and after April 1,
1992, each Active Participant may elect to have the Company make Salary
Reduction Contributions on his or her behalf, subject to the following:
(a) The Participant may elect to have his or her current
earnings reduced by any whole percent the Participant may
designate, but not exceeding 15 percent of Certified Earnings.
This election may only be made pursuant to a written salary
reduction agreement. The agreement shall be in such form and
executed subject to such rules as the Company may prescribe.
Each election shall apply only to earnings which become payable
after the election is filed with the Company. Each election
shall continue in effect until a new election is filed pursuant
to this section.
(b) The Company will make a Salary Reduction
Contribution with respect to each Participant in its employ who
elects to have earnings for that period reduced pursuant to this
section. The amount of the contribution will be equal to the
amount by which the Participant's earnings were reduced.
(c) The salary reduction agreement may be effective as
of the date on which the employee becomes a Participant or the
first day of any subsequent calendar quarter; provided that the
employee has filed the agreement with the Company at least ten
days prior to the effective date. Notwithstanding the
foregoing, an employee who becomes a Participant pursuant to
Sec. 4.2(b), (c), or (d) may file a salary reduction agreement
with the Company during the ten-day period following the date he
or she becomes a Participant, which shall be effective as of the
first day of the pay period following the date the agreement is
filed.
(d) An Active Participant may amend his or her salary
reduction agreement to increase or decrease the contribution
rate effective as of the first day of any calendar quarter by
filing an approved amendment form with the Company at least ten
days prior to the effective date.
(e) An Active Participant may discontinue making Salary
Reduction Contributions at any time by filing a written election
with the Company. That election shall be effective as soon as
administratively feasible after it is filed with the Company.
The Participant may thereafter resume Salary Reduction
Contributions as of the first day of any calendar quarter by
filing a new salary reduction agreement at least ten days prior
to the effective date.
(f) All Salary Reduction Contributions by a Participant
shall cease when the Participant ceases to be a Qualified
Employee.
(g) Salary Reduction Contributions by a Participant for
any calendar year may not exceed $8,728, and shall cease at the
point that limit is reached during the year. The $8,728 limit
in the previous sentence shall be adjusted for any cost of
living increases provided for any calendar year after 1992 in
accordance with regulations issued by the Secretary of the
Treasury.
(h) Notwithstanding the foregoing provisions, if the
Participant has received a hardship distribution from any other
plan maintained by the Company or an Affiliate, no Salary
Reduction Contributions shall be made to this Plan on behalf of
such Participant for 12 months following the date on which the
hardship distribution was made. Furthermore, the limit under
subsection (g) for the calendar year following the year in which
the hardship withdrawal is made shall be reduced by the amount
of Salary Reduction Contributions (and any elective
contributions to any other plan maintained by the employer) for
the calendar year in which the hardship withdrawal was made.
(i) If a Participant's Salary Reduction Contributions
are suspended under subsection (h), the Participant may elect to
recommence Salary Reduction Contributions effective as of the
first day of the calendar quarter immediately following the end
of the 12-month suspension period by filing a new election form
with the Company at least ten days prior to the effective date.
Sec. 5.2 Profit Sharing Contributions. For each Plan Year the
Company shall determine whether it will make a Profit Sharing Contribution
to the Fund for such Plan Year and, if it is determined that a
contribution will be made, the amount of the contribution or the formula
by which the amount of the contribution will be calculated. The Company
will determine separate amounts or formulas each Plan Year for Profit
Sharing Contributions for that year for eligible Participants employed (i)
at the Sherwood Plant, and (ii) at all other facilities of the Company
(each of these two groups being referred to hereafter as a "location").
Profit Sharing Contributions shall be paid to the Funding Agency
designated by the Company.
(a) To be eligible to share in the Profit Sharing
Contributions and in any Forfeitures which are to be allocated
as Profit Sharing Contributions under this section for a Plan
Year for the Participant's location, a Participant must satisfy
all of the following requirements:
(1) The Participant must have been an Active
Participant at some time during the Plan Year.
(2) The Participant must be credited with at
least one Year of Eligibility Service during
Eligibility Computation Periods that ended prior to
April 1 of the Plan Year. An employee who does not
satisfy the requirements of this paragraph (2) for a
Plan Year shall not be a "Participant" for purposes of
this section for that year.
(3) The Participant must be employed by the
Company or an Affiliate on the last day of the Plan
Year.
(b) Profit Sharing Contributions and Forfeitures for a
Plan Year for each location shall be allocated in the proportion
that the Certified Earnings of each eligible Participant
employed at that location for the Plan Year bears to the
Certified Earnings of all eligible Participants employed at that
location for that year; provided, however, that contributions
and forfeitures under the Plan or a Merged Plan for Plan Years
ending prior to April 1, 1992 shall be allocated only among the
eligible Participants in the applicable plan, and forfeitures
for Plan Years ending prior to 1991 shall be allocated pursuant
to the applicable provisions of the Plan or Merged Plan in
effect prior to the adoption of this document. Effective
October 1, 1992, Forfeitures for a Plan Year for a particular
location shall be applied as a credit against the Company's
Profit Sharing Contributions for that Plan Year for that
location and shall be allocated as a part of the Profit Sharing
Contribution.
(1) If a Participant has transferred between
locations during the Plan Year, the Participant's
Certified Earnings while employed at each location
shall be used in determining the Participant's share
of the Profit Sharing Contribution for that location
for that year, and Certified Earnings while employed
at the other location shall be disregarded.
(2) Forfeitures for a particular location shall
be the amounts forfeited by those persons whose last
employment prior to the Forfeiture was at that
location.
(c) The Company may designate that part or all of the
Profit Sharing Contribution under this section for a Plan Year
shall be classified as a Special Profit Sharing Contribution
which shall be used to satisfy the requirements of Sec. 5.3(c)
for that Plan Year. The Company shall designate whether the
Special Profit Sharing Contribution will be allocated among all
those Participants who satisfy the requirements of subsection
(a), or only among the Non-Highly Compensated Employees who
satisfy those requirements. A Special Profit Sharing
Contribution shall be allocated in proportion to the Certified
Earnings of the eligible Participants. Notwithstanding any
provisions of the Plan to the contrary, any contributions that
are classified as Special Profit Sharing Contributions shall be
placed in a separate Account as provided in Sec. 7.1 and shall
be 100% vested and nonforfeitable when made.
Sec. 5.3 Adjustment of Contributions Required by Code Section
401(k). If necessary to satisfy the requirements of Code section 401(k),
Salary Reduction Contributions shall be adjusted in accordance with the
following:
(a) Each Plan Year, the "deferral percentage" will be
calculated for each Active Participant. Each Participant's
deferral percentage is calculated by dividing the amount
referred to in paragraph (1) by the amount referred to in
paragraph (2), subject to the family aggregation rules in
subsection (g):
(1) The total Salary Reduction Contributions
(including Excess Deferrals of Highly Compensated
Employees distributed under Sec. 5.4 but excluding
Excess Deferrals of Non-Highly Compensated Employees
that arise solely from contributions made under plans
of the Company or Affiliates), if any, allocated to
the Participant's Accounts with respect to the Plan
Year. The Company may also elect to include all or
part of the Special Profit Sharing Contributions to be
allocated to the Participant's Accounts with respect
to that Plan Year, provided that the provisions of
Treasury Regulation Section 1.401(k)-1(b) are
satisfied.
(2) The Participant's Compensation with respect
to the Plan Year. For purposes of this section, a
Participant's "Compensation" for the Plan Year means
compensation determined according to a definition
selected by the Company for that year which satisfies
the requirements of Code section 414(s). The same
definition of Compensation shall be used for all
Participants for a particular Plan Year, but different
definitions may be used for different Plan Years. In
all events, Compensation includes the Salary Reduction
Contributions to this Plan and any contributions made
pursuant to a salary reduction agreement by or on
behalf of the Participant to any other plan which
meets the requirements of Code sections 125, 401(k),
402(h)(1)(B), or 403(b). Compensation shall be
subject to the limit provided under Sec. 2.6(d).
(b) Each Plan Year, the average deferral percentage for
Active Participants who are Highly Compensated Employees and the
average deferral percentage for Active Participants who are
Non-Highly Compensated Employees will be calculated. In each
case, the average is the average of the percentages calculated
under subsection (a) for each of the employees in the particular
group. The deferral percentage for each Participant and the
average deferral percentage for a particular group of employees
shall be calculated to the nearest one-hundredth of one percent.
(c) If the requirements of either paragraph (1) or (2)
are satisfied, then no further action is needed under this
section:
(1) The average deferral percentage for
Participants who are Highly Compensated Employees is
not more than 1.25 times the average deferral
percentage for Participants who are Non-Highly
Compensated Employees.
(2) The excess of the average deferral
percentage for Participants who are Highly Compensated
Employees over the average deferral percentage for
Participants who are Non-Highly Compensated Employees
is not more than two percentage points, and the
average deferral percentage for such Highly
Compensated Employees is not more than 2 times the
average deferral percentage for such Non-Highly
Compensated Employees.
(d) If neither of the requirements of subsection (c) is
satisfied, then the Salary Reduction Contributions with respect
to Highly Compensated Employees shall be reduced, beginning with
the contributions representing the highest percent of
Compensation and taking into account the family aggregation
rules under subsection (g)(2), if applicable, to the extent
necessary to meet the requirements of subsection (c)(1) or
(c)(2), whichever is met first.
(e) At any time during the Plan Year, the Company may
make an estimate of the amount of Salary Reduction Contributions
by Highly Compensated Employees that will be permitted under
this section for the year and may reduce the percent specified
in Sec. 5.1(a) for such Participants to the extent the Company
determines in its sole discretion to be necessary to satisfy at
least one of the requirements in subsection (c).
(f) If Salary Reduction Contributions with respect to a
Highly Compensated Employee are reduced pursuant to subsection
(d), the Excess Salary Reduction Contributions shall be
distributed, subject to the following:
(1) For purposes of this subsection, "Excess
Salary Reduction Contributions" mean the amount by
which Salary Reduction Contributions for Highly
Compensated Employees have been reduced under
subsection (d).
(2) Excess Salary Reduction Contributions
(adjusted for income or losses allocable thereto as
specified in paragraph (3), if any) shall be
distributed to Participants on whose behalf such
excess contributions were made for the Plan Year no
later than the last day of the following Plan Year.
Furthermore, the Company shall attempt to distribute
such amount by the 15th day of the third month
following the Plan Year for which the excess
contributions were made to avoid the imposition on the
Company of an excise tax under Code section 4979.
(3) Income or losses allocable to Excess Salary
Reduction Contributions shall be determined using the
following method:
(A) Income or losses allocable to
Excess Salary Reduction
Contributions for the Plan Year
shall be determined by
multiplying the amount of income
or loss for the Plan Year which
is allocable to the
Participant's Salary Reduction
Contributions (and to other
amounts credited to the
Participant that the Company
elects to include under
subsection (a)(1)) by a
fraction. The numerator of the
fraction is the Participant's
Excess Salary Reduction
Contributions for the Plan Year.
The denominator of the fraction
is the total balance in the
Participant's Accounts
attributable to Salary Reduction
Contributions (and to other
amounts the Company has elected
to include under subsection
(a)(1)) on the first day of the
Plan Year and any other amounts
the Company has elected to
include under subsection (a)(1)
for the Plan Year.
(B) The income or losses allocable
to Excess Salary Reduction
Contributions for the gap period
in the Plan Year following the
Plan Year for which the excess
was contributed shall be equal
to 10% of the amount of income
determined above, multiplied by
the number of calendar months
that have elapsed in such
subsequent Plan Year prior to
the distribution. In
determining the number of
calendar months which have
elapsed, any distribution made
on or before the fifteenth day
of any month shall be treated as
having been made on the last day
of the preceding month, and any
distribution made after the
fifteenth day of any month shall
be treated as having been made
on the first day of the next
month.
(4) The amount of Excess Salary Reduction
Contributions and income or losses allocable thereto
which would otherwise be distributed pursuant to this
subsection shall be reduced, in accordance with
regulations, by the amount of Excess Deferrals and
income or losses allocable thereto previously
distributed to the Participant pursuant to Sec. 5.4
for the calendar year ending with or within the Plan
Year.
(g) If a Highly Compensated Employee is subject to the
family aggregation rules of Code section 414(q)(6) because such
individual is a more than 5-percent owner or is among the 10
highest paid Highly Compensated Employees, the following rules
shall apply:
(1) For purposes of determining the deferral
percentage of the Highly Compensated Employee and
Family Members under subsection (a), one combined
deferral percentage shall apply to the family group
(which is treated as one Highly Compensated Employee).
(A) The combined deferral percentage
shall be determined by combining
the contributions and
Compensation for all of the
eligible Family Members.
(B) All Family Members included in
the family group shall be
disregarded in determining the
average deferral percentage for
Participants who are Non-Highly
Compensated Employees. If an
employee is required to be
aggregated as a member of more
than one family group, all
eligible employees who are
members of those family groups
that include that employee shall
be treated as one family group
under this subsection (g).
(2) If subsection (d) requires the reduction of
contributions on behalf of a Highly Compensated
Employee who is subject to the family aggregation
rules set forth in paragraph (1) of this subsection,
the Excess Salary Reduction Contributions shall be
allocated among the Family Members in proportion to
the dollar amount of Salary Reduction Contributions
(and amounts treated as Salary Reduction Contributions
under subsection (a)(1) of this section) made by each
Family Member who was included in the combined
deferral percentage.
(h) The deferral percentage for any Participant who is a
Highly Compensated Employee for the Plan Year, and who is
eligible to participate in two or more plans with cash or
deferred arrangements described in Code section 401(k) to which
the Company or any Affiliate contributes, shall be determined as
if all employer contributions were made under a single
arrangement unless mandatorily disaggregated pursuant to
regulations under Code section 401(k). This subsection shall be
applied by treating all cash or deferred arrangements with Plan
Years ending within the same calendar year as a single
arrangement.
(i) If two or more plans which include cash or deferred
arrangements are considered as one plan for purposes of Code
section 401(a)(4) or Code section 410(b), the cash or deferred
arrangements shall be treated as one for the purposes of
applying the provisions of this section unless mandatorily
disaggregated pursuant to regulations under Code section 401(k).
(j) If the entire Account balance of a Highly
Compensated Employee has been distributed during the Plan Year
in which an excess arose, the distribution shall be deemed to
have been a corrective distribution of the excess and income
attributable thereto to the extent that a corrective
distribution would otherwise have been required under subsection
(f) of this section or Sec. 5.4.
(k) A corrective distribution of excess contributions
under subsection (f) of this section or Excess Deferrals under
Sec. 5.4 may be made without regard to any notice or Participant
or spousal consent required under Article VIII or X.
(l) In the event of a complete termination of the Plan
during the Plan Year in which an excess arose, any corrective
distribution under subsection (f) of this section shall be made
as soon as administratively feasible after the termination, but
in no event later than 12 months after the date of termination.
(m) For Plan Years beginning prior to 1992, the Plan may
be restructured into component plans pursuant to Treasury
Regulations Section 1.401(k)-1(h)(3)(iii) for purposes of
applying the requirements of this section. This subsection (m)
shall not apply to Plan Years beginning in 1992 or later.
(n) For purposes of applying this section, the Plan Year
ending September 30, 1992 shall be deemed to have begun on
January 1, 1992, and the limits of this section shall apply to
all Salary Reduction Contributions made under this Plan or the
Hypro Corporation 401(k) Plan during that period.
Sec. 5.4 Distribution of Excess Deferrals. Notwithstanding
any other provisions of the Plan, Excess Deferrals for a calendar year and
income or losses allocable thereto shall be distributed no later than the
following April 15 to Participants who claim such Excess Deferrals,
subject to the following:
(a) For purposes of this section, "Excess Deferrals"
means the amount of Salary Reduction Contributions for a
calendar year that the Participant claims pursuant to the
procedure set forth in subsection (b) because the total amount
deferred for the calendar year exceeds $8,475 for 1991 (indexed
for inflation for subsequent calendar years) or such other limit
imposed on the Participant for that year under Code section
402(g).
(b) The Participant's written claim, specifying the
amount of the Participant's Excess Deferral for any calendar
year, shall be submitted to the Company no later than the
March 1 following such calendar year. The claim shall include
the Participant's written statement that if such amounts are not
distributed, such Excess Deferrals, when added to amounts
deferred under other plans or arrangements described in Code
section 401(k), 403(b), or 408(k), exceed the limit imposed on
the Participant by Code section 402(g) for the year in which the
deferral occurred. A Participant shall be deemed to have
submitted such a claim to the extent the Participant has Excess
Deferrals for the calendar year taking into account only
contributions under this Plan and any other plan maintained by
the Company or an Affiliate.
(c) Excess Deferrals distributed to a Participant with
respect to a calendar year shall be adjusted to include income
or losses allocable thereto using the same method specified for
excess Salary Reduction Contributions under Sec. 5.3(f)(3).
(d) The amount of Excess Deferrals and income allocable
thereto which would otherwise be distributed pursuant to this
section shall be reduced, in accordance with applicable
regulations, by the amount of excess Salary Reduction
Contributions and income allocable thereto previously
distributed to the Participant pursuant to Sec. 5.3 for the Plan
Year beginning with or within such calendar year, and by the
amount of any deferrals properly distributed as excess annual
additions under Sec. 6.1.
Sec. 5.5 Time of Contributions. Salary Reduction
Contributions and Profit Sharing Contributions for a Plan Year shall be
paid to the Funding Agency no later than the time (including extensions
thereof) prescribed by law for filing the Company's federal income tax
return for the tax year in which the Plan Year ends. Salary Reduction
Contributions and any other contributions taken into account under Sec.
5.3(a)(1) shall be paid to the Funding Agency no later than 12 months
following the end of the Plan Year, if earlier. In addition, Salary
Reduction Contributions shall be paid to the Funding Agency by any earlier
date that may be specified in Treasury or Department of Labor regulations.
Sec. 5.6 Allocations. Contributions under Sections 5.1 and
5.2 shall be allocated to the Accounts of Participants as follows:
(a) Salary Reduction Contributions with respect to each
Participant electing deferrals pursuant to Sec. 5.1 for a Plan
Year shall be allocated to the 401-K Account of each such
Participant as of the last day of the Plan Year.
(b) Profit Sharing Contributions and Special Profit
Sharing Contributions for a Plan Year, and any Forfeitures added
to such Contributions, shall be allocated to the Profit Sharing
Account or Special Profit Sharing Account, as the case may be,
of each eligible Participant as of the last day of the Plan
Year.
(c) Allocations shall be reflected in Accounts as
provided in Article VII. However, the Funding Agency shall
treat contributions as though they had been allocated to the
Accounts as of the Valuation Date coinciding with or following
the date they were deposited with the Funding Agency for
purposes of allocating investment gains and losses pursuant to
Sec. 7.2 and Sec. 7.3.
(d) Salary Reduction Contributions for a Plan Year which
are deposited with the Funding Agency after the end of that Plan
Year but prior to the deadline specified in Sec. 5.5 shall also
be allocated to the appropriate 401-K Account as of the last day
of that Plan Year except to the extent the Company determines
that it is necessary to treat some or all of such contributions
as being contributions for the Plan Year in which they are
deposited with the Funding Agency in order to satisfy the
requirements of Sec. 5.3.
Sec. 5.7 Limitations on Contributions. In no event shall the
amount of the contributions under this Article for any Plan Year exceed
the lesser of:
(a) The maximum amount allowable as a deduction in
computing the Company's taxable income for that Plan Year for
federal income tax purposes.
(b) The aggregate amount of the contributions that may
be allocated to Accounts of Participants under the provisions of
Article VI.
ARTICLE VI
LIMITATION ON ALLOCATIONS
Sec. 6.1 Limitation on Allocations. Notwithstanding any
provisions of the Plan to the contrary, allocations to Participants under
the Plan shall not exceed the maximum amount permitted under Code section
415. For purposes of the preceding sentence, effective for 1992, the
following rules shall apply unless otherwise provided in Code section 415:
(a) The Annual Additions with respect to a Participant
for any Plan Year shall not exceed the lesser of:
(1) $30,000, or, if greater, 25% of the defined
benefit dollar limitation set forth in Code section
415(b)(1)(A) as in effect for the Plan Year.
(2) 25% of the Compensation of such Participant
for such Plan Year.
If a Plan Year is shorter than 12 months, the dollar limitations
under this subsection for that year shall be multiplied by a
fraction, the numerator of which is the number of months in the
short Plan Year and the denominator of which is 12.
(b) If a Participant is also a participant in one or
more other defined contribution plans maintained by the Company
or an Affiliate, and if the amount of employer contributions and
forfeitures otherwise allocated to the Participant for a Plan
Year must be reduced to comply with the limitations under Code
section 415, such allocations under this Plan and each of such
other plans shall be reduced pro rata in the sequence specified
in subsection (c), and pro rata within each category within that
sequence, to the extent necessary to comply with said
limitations, except that reductions to the extent necessary
shall be made in allocations under profit sharing plans and
stock bonus plans before any reductions are made under money
purchase plans.
(c) If for any Plan Year the limitation described in
subsection (a) would otherwise be exceeded by contributions to
this Plan with respect to any Participant (after application of
subsection (b)), the Participant's Annual Additions shall be
adjusted in the following sequence, but only to the extent
necessary to reduce Annual Additions to the level permitted in
subsection (a):
(1) The Participant's after-tax voluntary
employee contributions for the Plan Year, if any,
shall be refunded to the Participant during the Plan
Year or as soon as reasonably possible following the
end of the Plan Year.
(2) The Participant's Salary Reduction
Contributions for the Plan Year, if any, shall be
reduced, and that amount shall be refunded to the
Participant.
(3) If, after the adjustments in paragraphs (1)
and (2) there is an excess amount with respect to a
Participant for a Plan Year, such excess amount shall
be held unallocated in a suspense account. The
suspense account will be applied to reduce future
employer contributions for all Participants in the
current Plan Year, the next Plan Year, and in each
succeeding Plan Year, if necessary. The suspense
account will participate in the allocation of the
investment gains and losses of the Fund and the value
of such account will be considered in valuing other
Accounts under the Plan.
(4) Any amounts refunded under paragraphs (1)
or (2) shall be disregarded for purposes of applying
the limits under Sec. 5.3 and Sec. 5.4.
(d) If the Participant is also a participant in one or
more defined benefit plans maintained by the Company or an
Affiliate, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction, determined
according to Code section 415(e), for any Plan Year may not
exceed 1.0. If the sum of a Participant's defined benefit
fraction and defined contribution fraction would otherwise
exceed 1.0 for any Plan Year, the benefits provided under the
defined benefit plan or plans shall be reduced to the extent
necessary to reduce the sum of the fractions to 1.0. For
purposes of this subsection, Annual Additions for Plan Years
beginning before 1987 shall not be recomputed to treat all
employee contributions as Annual Additions, and the defined
contribution plan fraction shall be adjusted as provided in
Section 1106(i) of the Tax Reform Act of 1986.
(e) For purposes of this section, "Annual Additions"
means the sum of the following amounts allocated to a
Participant for a Plan Year under this Plan and all other
defined contribution plans maintained by the Company or an
Affiliate in which he or she participates:
(1) Employer contributions, including Salary
Reduction Contributions made under this Plan. Excess
Salary Reduction Contributions which are distributed
under the provisions of Article V are included in
Annual Additions, but Excess Deferrals which are
distributed under Sec. 5.4 are not included in Annual
Additions.
(2) Forfeitures, if any.
(3) Voluntary non-deductible contributions, if
any.
(4) Amounts attributable to medical benefits as
described in Code sections 415(1)(2) and 419A(d)(2).
An Annual Addition with respect to a Participant's Accounts
shall be deemed credited thereto with respect to a Plan Year if
it is allocated to the Participant's Accounts under the terms of
the Plan as of any date within such Plan Year.
(f) For purposes of this section, "Compensation" means
an employee's earned income, wages, salaries, fees for
professional services and other amounts received (without regard
to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Company and Affiliates to the extent that the amounts are
includable in gross income (including, but not limited to,
commissions, compensation for services on the basis of a
percentage of profits, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
nonaccountable plan described in Treasury Regulation Section
1.62-2(c)), subject to the following:
(1) Compensation excludes the Salary Reduction
Contributions to this Plan, any elective salary
reduction contributions to any other plan which are
not includable in the gross income of the employee
under Code sections 125, 401(k), 402(h)(1)(B) or
403(b), any other employer contributions to a plan of
deferred compensation which are not includible in the
employee's gross income for the taxable year in which
contributed, any distributions from a plan of deferred
compensation, and any other amounts which receive
special tax benefits. However, any amounts received
by an employee pursuant to an unfunded non-qualified
plan of deferred compensation may be considered as
Compensation in the year such amounts are includible
in the employee's gross income.
(2) Compensation excludes amounts realized from
the exercise of a non-qualified stock option, or when
restricted stock (or property) either becomes
transferable or is no longer subject to a substantial
risk of forfeiture.
ARTICLE VII
INDIVIDUAL ACCOUNTS
Sec. 7.1 Accounts for Participants. The following Accounts
may be established under the Plan for a Participant:
(a) A 401-K Account and a Profit Sharing Account shall
be established for each Participant who makes or receives
contributions allocable to such an Account, or who made or
received contributions allocated to that type of Account under a
Merged Plan.
(b) A Special Profit Sharing Account shall be
established for each Participant who receives a Special Profit
Sharing Contribution under Sec. 5.2(c).
(c) A Forfeiture Account shall be established for each
Participant whose Termination of Employment occurs under
circumstances such that at that time the Participant has not
become 100% vested in his or her Profit Sharing Account.
(d) A Rollover Account shall be established for each
Participant who makes a Rollover Contribution, as provided by
Sec. 7.5, or who made such a contribution under a Merged Plan.
More than one of any of the above types of Accounts may be established if
required by the Plan or if considered advisable by the Company in the
administration of the Plan. Except as expressly provided herein to the
contrary, the Fund shall be held and invested on a commingled basis,
Accounts shall be for bookkeeping purposes only, and the establishment of
Accounts shall not require any segregation of Fund assets.
Sec. 7.2 Valuation Procedure. As of each Valuation Date, the
value of each Account shall be adjusted to reflect the effect of
distributions, transfers, withdrawals, income, realized and unrealized
profit and losses, contributions, and all other transactions with respect
to the Fund since the next preceding Valuation Date, as follows:
(a) The value of each Account determined in accordance
with this section as of the preceding Valuation Date (and
adjusted as provided in subsection (c) below) shall be adjusted
to reflect any investment gains, losses or expenses credited to
or charged against the Account by the Funding Agency pursuant to
Sec. 7.3.
(b) There shall be added to the adjusted value of each
Account the amount of any contributions made pursuant to Article
V during the period subsequent to the preceding Valuation Date
and ending on the current Valuation Date.
(c) From the value of each Account determined as of the
next preceding Valuation Date, there shall be deducted the
amount of all distributions and withdrawals, if any, made from
the Account since the preceding Valuation Date.
If a Participant's Termination of Employment (or any other event) occurred
after the preceding Valuation Date and on or before the current Valuation
Date, and if the Participant was not 100% vested in his or her Profit
Sharing Account, the value of such Account as determined above shall be
adjusted by deducting the percentage of such Account not so vested and
crediting them to the Participant's Forfeiture Account.
Sec. 7.3 Investment of Accounts. Each Participant shall
direct the investment of his or her Accounts, subject to the following:
(a) The Company shall determine the class or classes of
investments which will be made available as investment options
under this Plan from time to time. The Company may in its sole
discretion add additional options or delete existing options at
any time.
(b) All investment directions shall be filed in writing
on a prescribed form with the Company, or with such agent or
agents as may be designated from time to time by the Company for
this purpose. Each investment direction shall remain in effect
until a new investment direction is filed by the Participant.
An initial investment direction shall be filed with the
Participant's first salary reduction agreement. Thereafter, a
Participant may change the investment of the existing Account
balances and future contributions by filing with the Company on
or before the last day of each quarter of a Plan Year.
Investment directions shall be implemented as soon as possible
after investment statements are issued for the prior quarter of
the Plan Year. All investment designations must be in whole
percentages for any investment option.
(c) All investment directions by a Participant shall be
complete as to the terms of the investment transaction. An
investment direction shall provide for both the investment of
existing Account balances and the investment of future
contributions on behalf of the Participant. No Funding Agency
shall have any obligation whatsoever to invest or manage any
assets held in a Participant's Accounts, its sole duty being to
follow within a reasonable period of time all proper directions
of the Participant which are made in accordance with the Plan
and which are not contrary to ERISA. If a Participant fails to
provide directions as to the investment of any cash held in his
or her Accounts, the Company may in its sole discretion
designate an investment vehicle to be used to hold such funds.
(d) All earnings and losses on the investments held for
each of the Participant's Accounts shall be credited directly to
such Account, and the Account shall be charged with all expenses
attributable to such investments. The Funding Agency may also
charge to each such Account such portion of the general expenses
of the Fund as the Funding Agency determines in its sole
discretion to be reasonable.
(e) Following the death of the Participant, each of his
or her Beneficiaries shall have the right to direct the
investment of the portion of the Participant's Accounts held on
behalf of the Beneficiary, subject to the same terms and
conditions as applied to the Participant prior to death.
(f) The Funding Agency shall at all times retain title
to all assets held for Accounts, and shall have the voting power
with respect to all stock or other securities held for Accounts.
(g) All investment directions shall be in accordance
with such rules and regulations as the Company or the Funding
Agency may establish from time to time for this purpose.
(h) Each Account shall be valued by the Funding Agency
at fair market value as of each Valuation Date and at such other
times as may be necessary for the proper administration of the
Plan. If fair market value of an asset is not available, it
shall be deemed to be fair value as determined in good faith by
the Company or other Named Fiduciary assigned such function, or
if such asset is held in trust and the trust agreement so
provides, as determined in good faith by the trustee. If any
portion of the fund is invested in a contract issued by an
insurance company, of a type sometimes referred to as a
"guaranteed income contract", under which the insurance company
pays a guaranteed minimum rate of interest for a stated period
of time, and if no event has occurred that will result in
repayment of principal at a discounted value, the fair market
value of the contract shall be deemed to be its book value.
Sec. 7.4 Participant Statements. Each Plan Year the Company
may cause each Participant to be provided with a statement of Account
balances as of the end of the immediately preceding Plan Year.
Sec. 7.5 Rollover Accounts. With the consent of the Company,
a Qualified Employee may transfer to the Fund an amount that constitutes a
Rollover Contribution. The Company shall grant such consent only if it is
certain that the amount to be transferred will constitute a proper
Rollover Contribution. Notwithstanding any provisions of the Plan to the
contrary, the following shall apply with respect to a Rollover
Contribution:
(a) A Rollover Account shall be established for each
employee who makes a Rollover Contribution. From the date the
assets of the Rollover Contribution are transferred to the Fund
through the first Valuation Date following such transfer, the
Rollover Account shall be valued at the fair market value of
said assets on the date of such transfer.
(b) A Rollover Account shall be treated in all respects
the same as a Profit Sharing Account except as provided in (a)
above, and any references in the Plan to a Profit Sharing
Account shall apply equally to a Rollover Account, except that
no employer or employee contributions or Forfeitures shall ever
be added to a Rollover Account, and in the event of the
employee's Termination of Employment entitling him or her to a
benefit under Sec. 9.2, the vested percentage in the Rollover
Account shall be 100%.
(c) The employee shall be treated the same as a
Participant hereunder from the time of the transfer, but shall
not actually be a Participant and shall not be eligible to
receive an allocation of employer contributions or Forfeitures
until he or she has satisfied the requirements of Article IV.
(d) For purposes of this section, "Rollover
Contribution" means a contribution of an amount which may be
rolled over to this Plan pursuant to Code section 402(a)(5),
403(a)(4), 408(d)(3), or any other provision of the Code which
may permit rollovers to this Plan from time to time.
Sec. 7.6 Transfers from Other Plans. At the request of a
Qualified Employee and with the consent of the Company, which shall be
granted in its sole discretion and only if it determines that the transfer
of funds is consistent with the provisions of the Code, the Plan may
accept a direct transfer from another plan of funds credited to the
employee under such other plan (provided such plan is a qualified plan
under Code section 401(a) to which the survivor annuity requirements of
Code section 401(a)(11)(A) do not apply). Such a transfer shall be
subject to the following:
(a) Any funds so received shall be credited to one or
more separate Accounts in the categories listed in Sec. 7.1
which are subject to the same requirements under the Code as
applied to the transferred funds while they were held in the
other plan. If no such Account exists under Sec. 7.1 to receive
any part of the transferred funds, such funds shall be placed in
a separate Rollover Account which shall thereafter be subject to
any requirements under the other plan which are required by the
Code to continue to apply to those funds after the transfer.
From the date of the transfer through the first Valuation Date
following such transfer, such Accounts shall be valued at the
fair market value of the transferred assets on the date of such
transfer.
(b) Each separate Account established as provided in (a)
shall be treated in all respects as the corresponding type of
Account under this Plan, except as provided in subsection (a)
and except that no employer or employee contributions or
Forfeitures shall ever be added to such a separate Account, and
in the event of the employee's Termination of Employment
entitling him or her to a benefit under Sec. 9.2, the vested
percentage in each such separate Account shall be not less than
the vested percentage in such funds prior to the transfer.
(c) The employee shall be treated the same as a
Participant from the time of the transfer, but shall not
actually be a Participant and shall not be eligible to share in
employer contributions or Forfeitures or to make contributions
until he or she has satisfied the requirements of Article IV.
ARTICLE VIII
DESIGNATION OF BENEFICIARY
Sec. 8.1 Persons Eligible to Designate. Any Participant may
designate a Beneficiary to receive any amount payable from the Fund as a
result of the Participant's death, provided that the Beneficiary survives
the Participant. The Beneficiary may be one or more persons, natural or
otherwise. By way of illustration, but not by way of limitation, the
Beneficiary may be an individual, trustee, executor, or administrator. A
Participant may also change or revoke a designation previously made,
without the consent of any Beneficiary named therein.
Sec. 8.2 Special Requirements for Married Participants.
Notwithstanding the provisions of Sec. 8.1, if a Participant is married at
the time of his or her death, the Beneficiary shall be the Participant's
spouse unless the spouse has consented in writing to the designation of a
different Beneficiary, the spouse's consent acknowledges the effect of
such designation, and the spouse's consent is witnessed by a
representative of the Plan or a notary public. Such consent shall be
deemed to have been obtained if it is established to the satisfaction of
the Company that such consent cannot be obtained because there is no
spouse, because the spouse cannot be located, or because of such other
circumstances as may be prescribed by federal regulations. Any consent by
a spouse shall be irrevocable. Any designation of a Beneficiary which has
received spousal consent may be changed (other than by being revoked)
without spousal consent only if the consent by the spouse expressly
permits subsequent designations by the Participant without any requirement
of further consent by the spouse. Any such consent shall be valid only
with respect to the spouse who signed the consent, or in the case of a
deemed consent, the designated spouse. The provisions of this section
shall apply only to Participants who have at least one Hour of Service on
or after August 23, 1984.
Sec. 8.3 Form and Method of Designation. Any designation or a
revocation of a prior designation of Beneficiary shall be in writing on a
form acceptable to the Company and shall be filed with the Company. The
Company and all other parties involved in making payment to a Beneficiary
may rely on the latest Beneficiary designation on file with the Company at
the time of payment or may make payment pursuant to Sec. 8.4 if an
effective designation is not on file, shall be fully protected in doing
so, and shall have no liability whatsoever to any person making claim for
such payment under a subsequently filed designation of Beneficiary or for
any other reason.
Sec. 8.4 No Effective Designation. If there is not on file
with the Company an effective designation of Beneficiary by a deceased
Participant, the Beneficiary shall be the person or persons surviving the
Participant in the first of the following classes in which there is a
survivor, share and share alike:
(a) The Participant's spouse.
(b) The Participant's children, except that if any of
the Participant's children predecease the Participant but leave
issue surviving the Participant, such issue shall take by right
of representation the share their parent would have taken if
living.
(c) The Participant's parents.
(d) The Participant's brothers and sisters.
(e) The Participant's estate.
Determination of the identity of the Beneficiary in each case shall be
made by the Company.
Sec. 8.5 Successor Beneficiary. If a Beneficiary who survives
the Participant subsequently dies before receiving all payments to which
the Beneficiary was entitled, the successor Beneficiary, determined in
accordance with the provisions of this section, shall be entitled to the
balance of any remaining payments due. A Beneficiary who is not the
surviving spouse of the Participant may not designate a successor
Beneficiary. A Beneficiary who is the surviving spouse may designate a
successor Beneficiary only if the Participant specifically authorized such
designations on the Participant's Beneficiary designation form. If a
Beneficiary is permitted to designate a successor Beneficiary, each such
designation shall be made according to the same rules (other than Sec.
8.2) applicable to designations by Participants. If a Beneficiary is not
permitted to designate a successor Beneficiary, or is permitted to do so
but fails to make such a designation, the balance of any payments
remaining due will be payable to a contingent Beneficiary if the
Participant's Beneficiary designation so specifies, and otherwise to the
personal representative (executor or administrator) of the deceased
Beneficiary.
ARTICLE IX
BENEFIT REQUIREMENTS
Sec. 9.1 Benefit on Retirement or Disability. If a
Participant's Termination of Employment occurs (for any reason other than
death) after either of the following events, the Participant shall be 100%
vested and shall be entitled to a benefit equal to the value of all of his
or her Accounts determined as of the Valuation Date coincident with or
next following the Termination of Employment:
(a) The Participant has reached age 65.
(b) The Participant's Termination of Employment has
occurred due to a bodily injury or disease which the Company
determines, based on competent medical evidence, makes the
Participant permanently disabled from performing the normal
duties of his or her position with the Company.
The benefit shall be paid at the times and in the manner determined under
Article X.
Sec. 9.2 Other Termination of Employment. If a Participant's
Termination of Employment occurs (for any reason other than death) under
circumstances such that the Participant is not entitled to a benefit under
Sec. 9.1, the Participant shall be entitled to a benefit equal to the
value of all of his or her Accounts other than the Profit Sharing Account
and also a benefit equal to the vested percentage of the value of the
Participant's Profit Sharing Account, determined as of the Valuation Date
coincident with or next following the Termination of Employment, subject,
however, to the following:
(a) If the Termination of Employment occurred on or
after July 1, 1989, the vested percentage shall depend upon the
number of the Participant's full years of Elapsed Time at the
time of the Termination of Employment, as follows:
Vesting Schedule
Full Years of Elapsed Vested Percentage
Time
Less than 1 0%
1 but less than 2 10%
2 but less than 3 20%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
Notwithstanding the foregoing, the vested percentage of an
individual who was a participant in the Hypro Corporation
Sherwood Plant Profit Sharing Plan and whose Termination of
Employment occurred prior to April 1, 1992 shall be determined
from the vesting schedule contracted in that Plan.
(b) The portion of the Profit Sharing Account that is
not vested shall be transferred to the Participant's Forfeiture
Account as of the Valuation Date coincident with or next
following his or her Termination of Employment, as provided in
Sec. 7.2. Commencing April 1, 1992, the disposition of said
Forfeiture Account shall be as provided below:
(1) If the Participant is subsequently
reemployed before the last day of the Plan Year in
which the Termination of Employment occurred, the
Forfeiture Account shall be reinstated as a separate
Profit Sharing Account, to which the Participant shall
be entitled in accordance with the provisions of this
Article IX upon a subsequent Termination of
Employment, subject to the provisions of paragraph
(4).
(2) If the Participant is not reemployed before
the last day of the Plan Year in which the Termination
of Employment occurred, the value of the Forfeiture
Account shall be recognized as Forfeitures as of the
last day of the Plan Year in which the earlier of the
following dates occurred:
(A) The date the Participant
incurred a Recognized Break In
Service of at least 60 months
duration.
(B) The date that the vested portion
of all of the Participant's
Accounts has been distributed to
the Participant. If a
Participant was 0% vested in a
particular Account, that Account
will be deemed for purposes of
this clause (ii) to have been
distributed when the
Participant's Termination of
Employment occurred.
The Participant shall lose all claim to the Forfeiture
Account when the Forfeiture occurs. The Forfeiture
Account shall be revalued on the Valuation Date
preceding the date on which the Forfeiture is
recognized and shall be allocated as provided in
Article V.
(3) If a former Participant whose Account was
forfeited under paragraph (2) is subsequently
reemployed and completes a year of Elapsed Time before
incurring a Recognized Break in Service of at least 60
months duration, a separate Profit Sharing Account
shall be reinstated for the Participant as of the
Valuation Date coincident with the last day of the
Plan Year in which such year of Elapsed Time is
completed. The Participant shall be entitled to such
Account in accordance with the provisions of this
Article IX upon any subsequent Termination of
Employment, subject to the provisions of paragraph
(4). The total value of such Account as of such
Valuation Date shall be equal to the value of the
Forfeiture Account as of the Valuation Date referred
to in paragraph (2). The reinstated Account shall be
funded as provided in paragraph (5).
(4) If a Participant referred to in paragraph
(1) or paragraph (3) is not 100% vested in the
reinstated Profit Sharing Account upon a subsequent
Termination of Employment, the benefit to which the
Participant is entitled therefrom shall be determined
as of the Valuation Date coincident with or next
following the subsequent Termination of Employment as
follows:
(A) To the value of such reinstated
Account determined as of such
Valuation Date there shall be
added the amount of the benefit
from the Account which the
Participant received as a result
of the prior Termination of
Employment.
(B) The applicable vested percentage
from the vesting schedule shall
be applied to such sum.
(C) From the result obtained in (B),
there shall be subtracted the
amount added to the value of the
reinstated Account under (A).
(5) The amount required to reinstate an Account
pursuant to paragraph (3) as of the last day of a Plan
Year shall be provided from the following sources in
the priority indicated:
(A) Amounts forfeited under this
subsection (b) for the Plan
Year.
(B) Employer contributions for the
Plan Year.
(C) Net income or gain of the Fund
not previously allocated to
other Accounts.
(6) This subsection (b) shall not apply to any
Forfeiture Account which became a Forfeiture pursuant
to the provisions of the Plan or a Merged Plan in
effect prior to the adoption of this version of this
subsection. Any such Forfeiture Account shall be
disposed of pursuant to such prior Plan provisions.
(c) If the Participant has had any Recognized Break In
Service prior to the first day of the first Plan Year beginning
in 1985, or a Recognized Break In Service of at least 60 months
duration ending on or after that date, for purposes of
determining the vested portion of the Participant's Accounts
attributable to employer contributions which accrued before such
break, Elapsed Time after the break in service shall not be
taken into account.
(d) The benefit under this section shall be paid at the
times and in the manner determined under Article X.
Sec. 9.3 Death. If a Participant's Termination of Employment
is the result of death, his or her Beneficiary shall be entitled to a
benefit equal to the value of all of the Participant's Accounts determined
as of the Valuation Date coincident with or next following the date of
death. Such benefit shall be paid at the times and in the manner
determined under Article X. If a Participant's death occurs after his or
her Termination of Employment, distribution of the balance of the
Participant's Accounts shall be made to the Beneficiary in accordance with
the provisions of Article X.
Sec. 9.4 Loans to Participants. The Company may authorize a
loan to an Active Participant who makes application therefor. Each such
loan shall be subject to the following provisions:
(a) The amount of any loan to a Participant, when added
to the balance of all other loans to the Participant under this
Plan and all related plans which are outstanding on the day on
which such loan is made, shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of
(i) the highest outstanding balance of loans to the
Participant from the Plan and all related plans during
the one-year period ending on the day before the date
the loan is made, over (ii) the outstanding balance of
loans to the Participant from the Plan and all related
plans on the date the loan is made; or
(2) 25% of the amount to which the Participant
would be entitled in the event his or her Termination
of Employment were to occur on the date the loan is
made.
For purposes of this section, a related plan is any "qualified
employer plan", as defined in Code section 72(p)(4), sponsored
by the Company or any related employer, determined according to
Code section 72(p)(2)(D).
(b) The minimum amount of any loan shall be $1,000.00.
(c) Each loan shall be evidenced by the Participant's
promissory note payable to the order of the Funding Agency.
Each loan shall be adequately secured as determined by the
Company. A loan shall be considered adequately secured whenever
the outstanding balance does not exceed the amount in which the
Participant would have a vested interest in the event of his or
her Termination of Employment.
(d) The Company shall determine the rate of interest to
be paid with respect to each loan, which shall be a reasonable
rate of interest within the meaning of Code section 4975. The
rate shall be based on the interest rates charged by persons in
the business of lending money in the region in which the Company
operates for loans which would be made under similar
circumstances.
(e) Each such loan shall provide for the payment of
accrued interest and for repayment of principal in substantially
equal installments not less frequently than monthly. There will
be no penalty for prepayments of any loan. While the
Participant is employed by the Company, all loans shall be
repaid through payroll deductions to the extent possible. The
Participant shall execute any documents required to authorize
such deductions.
(f) Each loan shall extend for a stated period
determined by agreement of the Participant and the Company, not
exceeding five years. The limitation in the preceding sentence
shall not apply to any loan designated by the Company as a home
loan. For purposes of this paragraph, a home loan is a loan
used to acquire any dwelling unit which within a reasonable time
is to be used as the principal residence of the Participant.
The duration of home loans shall be determined by the Company.
Notwithstanding the foregoing, all loans shall become due and
payable in full upon the Participant's Termination of
Employment.
(g) Failure to pay any installment of interest or
principal when due shall constitute a default with respect to
that payment. Upon any such default, the entire loan balance
may be declared to be in default to the extent permitted under
the Participant's note. Events of default shall also include
any other events identified as such in the Participant's note.
In the event of a default on a loan, foreclosure on the note and
application of the Participant's Accounts to satisfy the note
will not occur until the earliest date on which the Participant
or Beneficiary is eligible to receive payment of benefits under
the Plan. An individual who has defaulted on any loan may be
denied future loans.
(h) If a loan to a Participant is outstanding on the
date a distribution is to be made from the Fund with respect to
the portion of the Participant's Account or Accounts represented
by the loan, the balance of the loan, or a portion thereof equal
to the amount to be distributed, if less, shall on such date
become due and payable. The portion of the loan due and payable
shall be satisfied by offsetting such amount against the amount
to be distributed to the Participant. Alternatively, the
portion of the Participant's Account or Accounts equal to the
outstanding balance on the loan may be distributed in kind by
distribution of the Participant's note.
(i) If a loan to a Participant is outstanding at the
time of the Participant's death, and if the loan is not repaid
by the Participant's executor or administrator, the note shall
be distributed in kind to the Participant's Beneficiary.
(j) The Company shall administer the loan program under
this section and shall direct the Funding Agency with respect to
the making of loans to Participants, the collection thereof, and
all other matters pertaining thereto. The Funding Agency shall
follow such directions to the extent possible and shall not take
any independent action with respect to such loans. The Funding
Agency shall have no responsibility whatsoever with respect to
loans to Participants except to follow the directions of the
Company to the extent possible.
(k) In accordance with the foregoing standards and
requirements, loans shall be available to all Participants on a
reasonably equivalent basis.
(l) All loans shall be governed by such
non-discriminatory written rules as the Company may adopt, which
shall be deemed to be a part of this Plan. Applications for
loans shall be filed with the Company on such forms as the
Company may provide for this purpose.
(m) The Company shall cause to be furnished to any
Participant receiving a loan any information required to be
furnished pursuant to the Federal Truth In Lending Act, if
applicable, or pursuant to any other applicable law.
(n) The portion of a Participant's Account or Accounts
represented by the outstanding loan principal shall be
segregated for investment purposes. In lieu of sharing in
income or losses on investments of the Fund, the segregated
portion of the Participant's Accounts shall be credited with all
interest paid by the Participant on the loan. The Funding
Agency may charge to the Participant's Accounts any expenses
attributable to the loan and such portion of the general
expenses of the Fund as the Funding Agency determines in its
discretion to be reasonable. If a Participant's Termination of
Employment results in a transfer to a Forfeiture Account, no
portion of an Account attributable to an outstanding loan may be
transferred to the Forfeiture Account.
(o) The Participant shall provide directions as to the
investments held in his or her Accounts that are to be
liquidated to provide the Fund with cash equal to the loan
principal. Notwithstanding the foregoing, amounts shall be
taken from the Participant's 401-K Account only after the
maximum amount has been borrowed from the Participant's other
Accounts.
(p) Solely for purposes of this section, an Active
Participant includes any Participant who has ceased to be a
Qualified Employee (or any Beneficiary of a deceased
Participant), who is entitled to a benefit from the Plan, and
who is a "party in interest" as defined in section 3(14) of
ERISA.
(q) No loan shall be made to a Participant who is a
shareholder-employee (as defined in Code section 1379(d), as in
effect on the day before the enactment of the Subchapter S
Revision Act of 1982) unless a prohibited transaction exemption
for the loan has been obtained from the Department of Labor.
(r) This Sec. 9.4 applies only to loans made on or after
October 1, 1992. Loans made prior to that date shall be
governed by the Plan provisions and administrative rules in
existence at the time the loan was made, except to the extent
that an amendment made by this section is required to comply
with the Code or ERISA.
Sec. 9.5 No Withdrawals Prior to Termination of Employment.
Participants are not permitted to receive benefits from the Plan prior to
their Termination of Employment. No hardship distributions prior to
Termination of Employment may be made from a Participant's 401-K Account
(established under the Hypro Corporation 401(k) Plan) on or after April 1,
1992. No withdrawals prior to Termination of Employment in the event of
financial emergency pursuant to section 5.4 of the Plan as it existed
prior to the adoption of this document have been permitted on or after
July 1, 1989.
ARTICLE X
DISTRIBUTION OF BENEFITS
Sec. 10.1 Time and Method of Payment. The benefit to which a
Participant or Beneficiary may become entitled under Article IX shall be
distributed to that individual at such time as he or she elects, subject
to the following:
(a) The distribution may be made at any time after the
date as of which the Participant or Beneficiary becomes entitled
to a benefit payment. All distributions on or after July 1,
1989 shall be made by payment in a single sum.
(b) Unless the Participant elects otherwise,
distribution must be made no later than the 60th day after the
close of the Plan Year in which the Participant reaches Normal
Retirement Age or in which the Participant's Termination of
Employment occurs, whichever is later; provided, however, that
if the amount of the payment to be made cannot be determined by
the later of the aforesaid dates, a payment retroactive to such
date may be made no later than 60 days after the earliest date
on which the amount of such payment can be ascertained. For
purposes of this subsection, the failure of a Participant to
elect to receive a distribution shall be deemed to be an
election to defer distribution of the benefit.
(c) The distribution to a Participant must be made by
April 1 following the calendar year in which the Participant
attains age 70-1/2 unless the Participant's death occurs before
that date, subject to the following:
(1) If the Participant attained age 70-1/2 before
January 1, 1988 and is not a more than 5-percent
owner, the distribution is not required to be made
until April 1 following the calendar year in which the
Participant's Termination of Employment occurs, if
later.
(2) If the Participant attained age 70-1/2 during
1988 and is not a more than 5-percent owner, the
Participant's distribution is not required to occur
until April 1, 1990.
For purposes of this subsection, a "more than 5-percent owner"
is a person who was a more than 5-percent owner of the Company
(as defined in Code section 416) at any time during the Plan
Year ending with or within the calendar year in which he or she
attained age 66-1/2 or any subsequent Plan Year.
(d) If the Participant dies before receiving the
distribution and before the date that the distribution was
required to occur under subsection (c), the Participant's
Accounts shall be distributed to the Beneficiary not later than
December 31 of the year containing the fifth anniversary of the
Participant's death; provided, however, that if the designated
Beneficiary is the surviving spouse of the Participant, the
payment may be made any time on or before the later of (i)
December 31 of the year in which the Participant would have
reached age 70-1/2, or (ii) December 31 of the year following the
year in which the Participant's death occurred. If a surviving
spouse who is entitled to benefits under this subsection dies
before the distribution to the surviving spouse has been made,
this subsection (other than the special exception which applies
to a designated Beneficiary who is the surviving spouse of the
Participant) shall be applied as if the surviving spouse were
the Participant, with the date of death of the surviving spouse
being substituted for the date of death of the Participant.
(e) If more than one Beneficiary is entitled to benefits
following the Participant's death, the interest of each
Beneficiary shall be segregated into a separate Account for
purposes of applying this section.
(f) For purposes of this section, "designated
Beneficiary" means any individual who is a Beneficiary pursuant
to Article VIII.
(g) Notwithstanding the foregoing, distributions may be
made to any Participant or Beneficiary pursuant to any
designation made prior to January 1, 1984 which satisfied all
the requirements of Section 242(b)(2) of the Tax Equity and
Fiscal Responsibility Act of 1982, as in effect on January 1,
1984, and the regulations thereunder; provided, however, that
any designation of Beneficiary included as a part of such
designation must comply with the spousal consent requirements
under Sec. 8.2.
(h) Notwithstanding the foregoing, if the total vested
value of the Accounts of a Participant (or a Beneficiary
following the Participant's death) is $3,500 or less on the
Valuation Date coincident with or immediately following the date
the Participant's Termination of Employment or death occurs, a
single-sum distribution shall be made to the Participant (or
Beneficiary) as of the earliest date permitted by the Plan.
However, this subsection shall not apply to a Participant if the
total vested value of the Participant's Accounts exceeded $3,500
at the time any previous distribution was made to the
Participant.
(i) Notwithstanding any provision of the Plan to the
contrary, distributions under this section shall be made in
accordance with the requirements of Code section 401(a)(9),
including the incidental death benefit requirements of Code
section 401(a)(9)(G) and the regulations thereunder. No
distribution option otherwise permitted under this Plan will be
available to a Participant or Beneficiary if such distribution
option does not meet the requirements of Code section 401(a)(9),
including subparagraph (G) thereof.
(j) With respect to distributions made on or after
January 1, 1993, notwithstanding any provision of the Plan to
the contrary that would otherwise limit a distributee's
election, a distributee may elect, at the time and in the manner
prescribed by the Company, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. For
purposes of this subsection:
(1) An "eligible rollover distribution" is any
distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include any distribution to the
extent such distribution is required under Code section
401(a)(9), and the portion of any distribution that is not
includible in gross income.
(2) An "eligible retirement plan" is an
individual retirement account described in Code
section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust
described in Code section 401(a), that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(3) A "distributee" includes a Participant or
former Participant. In addition, the Participant's or
former Participant's surviving spouse and the
Participant's or former Participant's spouse or former
spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code section
414(p), are distributees with regard to the interest
of the spouse or former spouse.
(4) A "direct rollover" is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
Sec. 10.2 Distribution In Cash Only. Distributions will be
made in cash only, except as otherwise provided in Sec. 9.4.
Sec. 10.3 Accounting Following Termination of Employment. If
distribution of a benefit is deferred or delayed for any reason, the
undistributed Accounts shall continue to be revalued as of each Valuation
Date as provided in Article VII. Payments shall be made as of the
Validation Date following the date the Participant (or Beneficiary
following the Participant's death) files the request for payment with the
Company and shall occur within a reasonable time after the valuation has
been completed.
Sec. 10.4 Reemployment. Except where distributions are
required under Sec. 10.1, entitlement to a distribution from the Fund
shall cease upon reemployment of a Participant in a regular position by
the Company, and shall recommence in accordance with the provisions of
this Article upon the Participant's subsequent Termination of Employment.
Sec. 10.5 Source of Benefits. All benefits to which persons
become entitled hereunder shall be provided only out of the Fund and only
to the extent that the Fund is adequate therefor. No benefits are
provided under the Plan except those expressly described herein.
Sec. 10.6 Incompetent Payee. If in the opinion of the Company
a person entitled to payments hereunder is disabled from caring for his or
her affairs because of mental or physical condition, or age, payment due
such person may be made to such person's guardian, conservator, or other
legal personal representative upon furnishing the Company with evidence
satisfactory to the Company of such status. Prior to the furnishing of
such evidence, the Company may cause payments due the person under
disability to be made, for such person's use and benefit, to any person or
institution then in the opinion of the Company caring for or maintaining
the person under disability. The Company shall have no liability with
respect to payments so made. The Company shall have no duty to make
inquiry as to the competence of any person entitled to receive payments
hereunder.
Sec. 10.7 Benefits May Not Be Assigned or Alienated. Except as
otherwise expressly permitted by the Plan or required by law, the
interests of persons entitled to benefits under the Plan may not in any
manner whatsoever be assigned or alienated, whether voluntarily or
involuntarily, or directly or indirectly. However, the Plan shall comply
with the provisions of any court order which the Company determines is a
qualified domestic relations order as defined in Code section 414(p). Any
expenses relating to review or administration of a domestic relations
order may be charged against the Accounts of the Participant and/or the
alternate payee. Notwithstanding any provisions in the Plan to the
contrary, an individual who is entitled to payments from the Plan as an
"alternate payee" pursuant to a qualified domestic relations order may
receive a lump sum payment from the Plan as soon as administratively
feasible after the Valuation Date coincident with or next following the
date of the Company's determination that the order is a qualified domestic
relations order, unless the order specifically provides for payment to be
made at a later time.
Sec. 10.8 Payment of Taxes. The Funding Agency may pay any
estate, inheritance, income, or other tax, charge, or assessment
attributable to any benefit payable hereunder which in the Funding
Agency's opinion it shall be or may be required to pay out of such
benefit. The Funding Agency may require, before making any payment, such
release or other document from any taxing authority and such indemnity
from the intended payee as the Funding Agency shall deem necessary for its
protection.
Sec. 10.9 Conditions Precedent. No person shall be entitled to
a benefit hereunder until his or her right thereto has been finally
determined by the Company nor until the person has submitted to the
Company relevant data reasonably requested by the Company, including, but
not limited to, proof of birth or death.
Sec. 10.10 Company Directions to Funding Agency. The
Company shall issue such written directions to the Funding Agency as are
necessary to accomplish distributions to the Participants and
Beneficiaries in accordance with the provisions of the Plan.
Sec. 10.11 Effect on Unemployment Compensation. For
purposes of any unemployment compensation law, a distribution hereunder in
one sum to the extent attributable to employer contributions, shall be
considered to be a severance payment and shall be allocated over a period
of weeks equal to the one sum payment divided by the employee's regular
weekly pay while employed by the Company, which period shall commence
immediately following the employee's Termination of Employment.
Sec. 10.12 Special Distribution Events. Notwithstanding
anything herein to the contrary, if the agreement between the buyer and
the seller in one of the following types of transaction provides that
distributions are to be made to affected Participants, each such
Participant shall receive a distribution of his or her vested Account
balance as soon as administratively feasible after either of the following
events:
(a) The disposition by the Company to an unrelated
corporation of substantially all of the assets (within the
meaning of Code section 409(d)(2)) used in a trade or business
of the Company if the Company continues to maintain this Plan
after the disposition, but only with respect to employees who
continue employment with the corporation acquiring such assets.
(b) The disposition by the Company or by an Affiliate to
an unrelated entity of such corporation's interest in a
subsidiary (within the meaning of Code section 409(d)(3)) if
such corporation continues to maintain this Plan, but only with
respect to employees who continue employment with such
subsidiary.
All distributions under this section are subject to any applicable consent
requirements under Sec. 10.1. In addition, distributions under this
section must be made in a lump sum.
ARTICLE XI
FUND
Sec. 11.1 Composition. All sums of money and all securities
and other property received by the Funding Agency for purposes of the
Plan, together with all investments made therewith, the proceeds thereof,
and all earnings and accumulations thereon, and the part from time to time
remaining shall constitute the "Fund". The Company may cause the Fund to
be divided into any number of parts for investment purposes or any other
purposes necessary or advisable for the proper administration of the Plan.
Sec. 11.2 Funding Agency. The Fund may be held and invested as
one fund or may be divided into any number of parts for investment
purposes. Each part of the Fund, or the entire Fund if it is not divided
into parts for investment purposes, shall be held and invested by one or
more trustees or by an insurance company. The trustee or trustees or the
insurance company so acting with respect to any part of the Fund is
referred to herein as the Funding Agency with respect to such part of the
Fund. The selection and appointment of each Funding Agency shall be made
by the Company. The Company shall have the right at any time to remove a
Funding Agency and appoint a successor thereto, subject only to the terms
of any applicable trust agreement or group annuity contract. The Company
shall have the right to determine the form and substance of each trust
agreement and group annuity contract under which any part of the Fund is
held, subject only to the requirement that they are not inconsistent with
the provisions of the Plan. Any such trust agreement may contain
provisions pursuant to which the trustee will make investments on
direction of a third party.
Sec. 11.3 Compensation and Expenses of Funding Agency. The
Funding Agency shall be entitled to receive such reasonable compensation
for its services as may be agreed upon with the Company. The Funding
Agency shall also be entitled to reimbursement for all reasonable and
necessary costs, expenses, and disbursements incurred by it in the
performance of its services. Such compensation and reimbursements shall
be paid from the Fund if not paid directly by the Company.
Sec. 11.4 Funding Policy. The Company shall adopt a procedure,
and revise it from time to time as it shall consider advisable, for
establishing and carrying out a funding policy and method consistent with
the objectives of the Plan and the requirements of ERISA. It shall advise
each Funding Agency of the funding policy in effect from time to time.
Sec. 11.5 Securities and Property of the Company. An agreement
with a Funding Agency may provide that all or any part of the Fund may be
invested in qualifying employer securities or qualifying employer real
property, as those terms are used in ERISA; provided, however, that the
Company shall take any steps necessary to assure that investments in
securities of the Company or any trade or business entity directly or
indirectly controlling, controlled by, or under Common Control with the
Company do not exceed those that can be acquired by that part of the Fund
attributable to contributions by the Company (other than Salary Reduction
Contributions), as distinguished from that part of the Fund, if any,
attributable to contributions by Participants or Salary Reduction
Contributions, unless there has been compliance with any applicable
securities laws. If qualifying employer securities or qualifying employer
real property are purchased or sold as an investment of the Fund from or
to a disqualified person or party in interest, as those terms are used in
ERISA, and if there is no generally recognized market for such securities
or property, the purchase shall be for not more than fair market value and
the sale shall be for not less than fair market value, as determined in
good faith by the Company or other Named Fiduciary assigned such function,
or if such assets are held in trust and the trust agreement so provides,
as determined in good faith by the trustee.
Sec. 11.6 No Diversion. The Fund shall be for the exclusive
purpose of providing benefits to Participants under the Plan and their
beneficiaries and defraying reasonable expenses of administering the Plan.
Such expenses may include premiums for the bonding of Plan officials
required by ERISA. No part of the corpus or income of the Fund may be
used for, or diverted to, purposes other than for the exclusive benefit of
employees of the Company or their beneficiaries. Notwithstanding the
foregoing:
(a) If any contribution or portion thereof is made by
the Company by a mistake of fact, the Funding Agency shall, upon
written request of the Company, return such contribution or
portion thereof to the Company within one year after the payment
of the contribution to the Funding Agency; however, earnings
attributable to such contribution or portion thereof shall not
be returned to the Company but shall remain in the Fund, and the
amount returned to the Company shall be reduced by any losses
attributable to such contribution or portion thereof.
(b) Contributions by the Company are conditioned upon
initial qualification of the Plan or each Merged Plan under Code
section 401(a). If an adverse determination letter is received
from the Internal Revenue Service with respect to such initial
qualification, the Funding Agency shall, upon written request of
the Company, return the amount of such contribution to the
Company within one year after the date of denial of
qualification of the Plan. For this purpose, the amount to be
so returned shall be the contributions actually made, adjusted
for the investment experience of, and any expenses chargeable
against, the portion of the Fund attributable to the
contributions actually made.
(c) Contributions by the Company are conditioned upon
the deductibility of each contribution under Code section 404.
To the extent the deduction is disallowed, the Funding Agency
shall return such contribution to the Company within one year
after the disallowance of the deduction; however, earnings
attributable to such contribution (or disallowed portion
thereof) shall not be returned to the Company but shall remain
in the Fund, and the amount returned to the Company shall be
reduced by any losses attributable to such contribution (or
disallowed portion thereof).
In the case of any such return of contribution the Company shall cause
such adjustments to be made to the Accounts of Participants as it
considers fair and equitable under the circumstances resulting in the
return of such contribution.
ARTICLE XII
ADMINISTRATION OF PLAN
Sec. 12.1 Administration by Company. The Company is the
"administrator" of the Plan for purposes of ERISA. Except as expressly
otherwise provided herein, the Company shall control and manage the
operation and administration of the Plan and make all decisions and
determinations incident thereto. In carrying out its Plan
responsibilities, the Company shall have discretionary authority to
construe the terms of the Plan. Except in cases where the Plan expressly
provides to the contrary, action on behalf of the Company may be taken by
any of the following:
(a) The Board.
(b) The chief executive officer of the Company.
(c) Any person or persons, natural or otherwise, or
committee, to whom responsibilities for the operation and
administration of the Plan are allocated by the Company, by
resolution of the Board or by written instrument executed by the
chief executive officer of the Company and filed with its
permanent records, but action of such person or persons or
committee shall be within the scope of said allocation.
Sec. 12.2 Certain Fiduciary Provisions. For purposes of the
Plan:
(a) Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Plan.
(b) A Named Fiduciary, or a fiduciary designated by a
Named Fiduciary pursuant to the provisions of the Plan, may
employ one or more persons to render advice with regard to any
responsibility such fiduciary has under the Plan.
(c) To the extent permitted by any applicable trust
agreement or group annuity contract a Named Fiduciary with
respect to control or management of the assets of the Plan may
appoint an investment manager or managers, as defined in ERISA,
to manage (including the power to acquire and dispose of) any
assets of the Plan.
(d) At any time the Plan has more than one Named
Fiduciary, if pursuant to the Plan provisions fiduciary
responsibilities are not already allocated among such Named
Fiduciaries, the Company, by action of the Board or its chief
executive officer, may provide for such allocation; except that
such allocation shall not include any responsibility, if any, in
a trust agreement to manage or control the assets of the Plan
other than a power under the trust agreement to appoint an
investment manager as defined in ERISA.
(e) Unless expressly prohibited in the appointment of a
Named Fiduciary which is not the Company acting as provided in
Sec. 12.1, such Named Fiduciary by written instrument may
designate a person or persons other than such Named Fiduciary to
carry out any or all of the fiduciary responsibilities under the
Plan of such Named Fiduciary; except that such designation shall
not include any responsibility, if any, in a trust agreement to
manage or control the assets of the Plan other than a power
under the trust agreement to appoint an investment manager as
defined in ERISA.
(f) A person who is a fiduciary with respect to the
Plan, including a Named Fiduciary, shall be recognized and
treated as a fiduciary only with respect to the particular
fiduciary functions as to which such person has responsibility.
Each Named Fiduciary (other than the Company), each other fiduciary, each
person employed pursuant to (b) above, and each investment manager shall
be entitled to receive reasonable compensation for services rendered, or
for the reimbursement of expenses properly and actually incurred in the
performance of their duties with the Plan and to payment therefor from the
Fund if not paid directly by the Company. Notwithstanding the foregoing,
no person so serving who already receives full-time pay from any employer
or association of employers whose employees are Participants, or from an
employee organization whose members are Participants, shall receive
compensation from the Plan, except for reimbursement of expenses properly
and actually incurred.
Sec. 12.3 Discrimination Prohibited. No person or persons in
exercising discretion in the operation and administration of the Plan
shall discriminate in favor of Highly Compensated Employees.
Sec. 12.4 Evidence. Evidence required of anyone under this
Plan may be by certificate, affidavit, document, or other instrument which
the person acting in reliance thereon considers to be pertinent and
reliable and to be signed, made, or presented to the proper party.
Sec. 12.5 Correction of Errors. It is recognized that in the
operation and administration of the Plan certain mathematical and
accounting errors may be made or mistakes may arise by reason of factual
errors in information supplied to the Company or Funding Agency. The
Company shall have power to cause such equitable adjustments to be made to
correct for such errors as the Company in its discretion considers
appropriate. Such adjustments shall be final and binding on all persons.
Any return of a contribution due to a mistake in fact will be subject to
Sec. 11.6.
Sec. 12.6 Records. The Company, each fiduciary with respect to
the Plan, and each other person performing any functions in the operation
or administration of the Plan or the management or control of the assets
of the Plan shall keep such records as may be necessary or appropriate in
the discharge of their respective functions hereunder, including records
required by ERISA or any other applicable law. Records shall be retained
as long as necessary for the proper administration of the Plan and at
least for any period required by ERISA or other applicable law.
Sec. 12.7 General Fiduciary Standard. Each fiduciary shall
discharge its duties with respect to the Plan solely in the interests of
Participants and their beneficiaries and with the care, skill, prudence,
and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims.
Sec. 12.8 Prohibited Transactions. A fiduciary with respect to
the Plan shall not cause the Plan to engage in any prohibited transaction
within the meaning of ERISA.
Sec. 12.9 Claims Procedure. The Company shall establish a
claims procedure consistent with the requirements of ERISA. Such claims
procedure shall provide adequate notice in writing to any Participant or
beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the claimant and shall afford a reasonable
opportunity to a claimant whose claim for benefits has been denied for a
full and fair review by the appropriate Named Fiduciary of the decision
denying the claim.
Sec. 12.10 Bonding. Plan personnel shall be bonded to the
extent required by ERISA. Premiums for such bonding may, in the sole
discretion of the Company, be paid in whole or in part from the Fund.
Such premiums may also be paid in whole or in part by the Company. The
Company may provide by agreement with any person that the premium for
required bonding shall be paid by such person.
Sec. 12.11 Waiver of Notice. Any notice required hereunder
may be waived by the person entitled thereto.
Sec. 12.12 Agent For Legal Process. The Company shall be
the agent for service of legal process with respect to any matter
concerning the Plan, unless and until the Company designates some other
person as such agent.
Sec. 12.13 Indemnification. In addition to any other
applicable provisions for indemnification, the Company agrees to indemnify
and hold harmless, to the extent permitted by law, each director, officer,
and employee of the Company against any and all liabilities, losses,
costs, or expenses (including legal fees) of whatsoever kind and nature
which may be imposed on, incurred by, or asserted against such person at
any time by reason of such person's services as a fiduciary in connection
with the Plan, but only if such person did not act dishonestly, or in bad
faith, or in willful violation of the law or regulations under which such
liability, loss, cost, or expense arises.
ARTICLE XIII
AMENDMENT, TERMINATION, MERGER
Sec. 13.1 Amendment. Subject to the non-diversion provisions
of Sec. 11.6, the Company, by action of the Board, or by written action of
a person so authorized by resolution of the Board, may amend the Plan at
any time and from time to time. No action by a person other than the
Board shall be an amendment of the Plan unless it specifically references
the Plan and states that it alters the terms or conditions of the Plan.
No amendment of the Plan shall have the effect of changing the rights,
duties, and liabilities of any Funding Agency without its written consent.
Also, no amendment shall divest a Participant or Beneficiary of Accounts
accrued prior to the amendment or decrease a Participant's accrued benefit
except to the extent permitted by Code section 411(d)(6).
(a) Promptly upon adoption of any amendment to the Plan,
the Company will furnish a copy of the amendment, together with
a certificate evidencing its due adoption, to each Funding
Agency then acting.
(b) If an amendment to the Plan changes the vesting
schedule of the Plan, each Participant having not less than
three years of service by the end of the election period with
respect to such amendment shall be permitted within such
election period to elect to have his or her vested percentage
computed under the Plan without regard to such amendment. Each
election shall be made in writing by filing with the Company
within the election period a form available from the Company for
the purpose. The election period shall be a reasonable period
determined by the Company commencing not later than the date the
amendment is adopted and shall be in conformance with any
applicable regulation prescribed by the Secretary of Labor or
the Secretary of the Treasury. Notwithstanding the foregoing,
no election need be provided for any Participant whose vested
percentage under the Plan, as amended, cannot at any time be
less than the vested percentage determined without regard to
such amendment.
Sec. 13.2 Permanent Discontinuance of Contributions. The
Company, by action of the Board, may completely discontinue contributions
in support of the Plan. In such event, notwithstanding any provisions of
the Plan to the contrary, (i) no employee shall become a Participant after
such discontinuance, (ii) any then existing Forfeiture Account of a
Participant shall revert to its prior status as a Profit Sharing Account
and be nonforfeitable, and (iii) the Accounts of each Participant in the
employ of the Company at the time of such discontinuance shall be
nonforfeitable. Subject to the foregoing, all of the provisions of the
Plan shall continue in effect, and upon entitlement thereto distributions
shall be made in accordance with the provisions of Article X.
Sec. 13.3 Termination. The Company, by action of the Board,
may terminate the Plan. After such termination no employee shall become a
Participant, no further contributions shall be made, and any then existing
Forfeiture Account of a Participant shall revert to its prior status as a
Profit Sharing Account and be nonforfeitable. The Accounts of each
Participant in the employ of the Company at the time of such termination
shall be nonforfeitable, the Participant shall be entitled to a benefit
equal to the value of those Accounts determined as of the Valuation Date
coincident with or next following the termination of the Plan,
distributions shall be made to Participants and Beneficiaries promptly
after the termination of the Plan, but not before the earliest date
permitted under the Code and applicable regulations, and the Plan and any
related trust agreement or group annuity contract shall continue in force
for the purpose of making such distributions.
Sec. 13.4 Partial Termination. If there is a partial
termination of the Plan, either by operation of law, by amendment of the
Plan, or for any other reason, which partial termination shall be
confirmed by the Company, any then existing Forfeiture Account of a
Participant (who was in the classification of employees with respect to
which the partial termination occurs) shall revert to its prior status as
a Profit Sharing Account and be nonforfeitable, and the Accounts of each
Participant with respect to whom the partial termination applies shall be
nonforfeitable. Subject to the foregoing, all of the provisions of the
Plan shall continue in effect as to each such Participant, and upon
entitlement thereto distributions shall be made in accordance with the
provisions of Article X.
Sec. 13.5 Merger, Consolidation, or Transfer of Plan Assets.
In the case of any merger or consolidation of the Plan with any other
plan, or in the case of the transfer of assets or liabilities of the Plan
to any other plan, provision shall be made so that each Participant and
Beneficiary would (if such other plan then terminated) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to
or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had
then terminated). No such merger, consolidation, or transfer shall be
effected until such statements with respect thereto, if any, required by
ERISA to be filed in advance thereof have been filed.
Sec. 13.6 Deferral of Distributions. Notwithstanding any
provisions of the Plan to the contrary, in the case of a complete
discontinuance of contributions to the Plan or of a complete or partial
termination of the Plan, the Company or the Funding Agency may defer any
distribution of benefit payments to Participants and Beneficiaries with
respect to which such discontinuance or termination applies (except for
distributions which are required to be made under Sec. 10.1) until after
the following have occurred:
(a) Receipt of a final determination from the Treasury
Department or any court of competent jurisdiction regarding the
effect of such discontinuance or termination on the qualified
status of the Plan under Code section 401(a).
(b) Appropriate adjustment of Accounts to reflect taxes,
costs, and expenses, if any, incident to such discontinuance or
termination.
ARTICLE XIV
TOP-HEAVY PLAN PROVISIONS
Sec. 14.1 Key Employee Defined. "Key Employee" means any
employee or former employee of the employer who at any time during the
determination period was an officer of the employer or is deemed to have
had an ownership interest in the employer and who is within the definition
of key employee in Code section 416(i). "Non-Key Employee" means any
employee who is not a Key Employee.
Sec. 14.2 Determination of Top-Heavy Status. The top-heavy
status of the Plan shall be determined according to Code section 416 and
the regulations thereunder, using the following standards and definitions:
(a) The Plan is a Top-Heavy Plan for a Plan Year
commencing after 1983 if either of the following applies:
(1) If this Plan is not part of a required
aggregation group and the top-heavy ratio for this
Plan exceeds 60 percent.
(2) If this Plan is part of a required
aggregation group of plans and the top-heavy ratio for
the group of plans exceeds 60 percent.
Notwithstanding paragraphs (1) and (2) above, the Plan is not a
Top-Heavy Plan with respect to a Plan Year if it is part of a
permissive aggregation group of plans for which the top-heavy
ratio does not exceed 60 percent.
(b) The "top-heavy ratio" shall be determined as
follows:
(1) If the employer maintains one or more
defined contribution plans (including any simplified
employee pension plan) and has not maintained any
defined benefit plan which during the 5-year period
ending on the determination date has or has had
accrued benefits, the top-heavy ratio for this Plan or
for the required or permissive aggregation group (as
appropriate) is a fraction, the numerator of which is
the sum of the account balances of all Key Employees
under the Plan or plans as of the determination date
(including any part of any account balance distributed
in the five-year period ending on the determination
date), and the denominator of which is the sum of the
account balances (including any part of any account
balance distributed in the five-year period ending on
the determination date) of all employees under the
Plan or plans as of the determination date. Both the
numerator and denominator of the top-heavy ratio shall
be increased to reflect any contribution not actually
made as of the determination date but which is
required to be taken into account on that date under
Code section 416 and the regulations thereunder.
(2) If the employer maintains one or more
defined contribution plans (including any simplified
employee pension plan) and maintains or has maintained
one or more defined benefit plans which during the
5-year period ending on the determination date has or
has had any accrued benefits, the top-heavy ratio for
any required or permissive aggregation group (as
appropriate), is a fraction, the numerator of which is
the sum of the account balances of all Key Employees
under the aggregated defined contribution plan or
plans, determined according to paragraph (1) above,
and the present value of accrued benefits of all Key
Employees under the defined benefit plan or plans as
of the determination date, and the denominator of
which is the sum of such account balances of all
employees under the aggregated defined contribution
plan or plans and the present value of accrued
benefits of all employees under the defined benefit
plan or plans as of the determination date. The
account balances and accrued benefits in both the
numerator and denominator of the top-heavy ratio shall
be adjusted to reflect any distributions made in the
five-year period ending on the determination date and
any contributions due but unpaid as of the
determination date.
(3) For purposes of paragraphs (1) and (2), the
value of account balances and the present value of
accrued benefits will be determined as of the most
recent valuation date that falls within the 12-month
period ending on the determination date, except as
provided in Code section 416 and the regulations
thereunder for the first and second plan years of a
defined benefit plan. The account balances and
accrued benefits of an employee (i) who is not a Key
Employee but who was a Key Employee in a prior year,
or (ii) who has not been credited with at least one
hour of service with any employer maintaining the Plan
at any time during the 5-year period ending on the
determination date, will be disregarded. The
calculation of the top-heavy ratio and the extent to
which distributions, rollovers, and transfers are
taken into account will be made in accordance with
Code section 416 and the regulations thereunder. When
aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to
the determination dates that fall within the same
calendar year.
(c) "Required aggregation group" means (i) each
qualified plan of the employer in which at least one Key
Employee participates in the Plan Year containing the
determination date, or any of the four preceding Plan Years, and
(ii) any other qualified plan of the employer that enables a
plan described in (i) to meet the requirements of Code sections
401(a)(4) or 410.
(d) "Permissive aggregation group" means the required
aggregation group of plans plus any other plan or plans of the
employer which, when consolidated as a group with the required
aggregation group, would continue to satisfy the requirements of
Code sections 401(a)(4) and 410.
(e) "Determination date" means, for any Plan Year
subsequent to the first Plan Year, the last day of the preceding
Plan Year. For the first Plan Year of the Plan, the last day of
that year is the determination date.
(f) The "determination period" for a Plan Year is the
Plan Year in which the applicable determination date occurs and
the four preceding Plan Years.
(g) The "valuation date" is the last day of each Plan
Year and is the date as of which account balances or accrued
benefits are valued for purposes of calculating the top-heavy
ratio.
(h) For purposes of establishing the "present value" of
benefits under a defined benefit plan to compute the top-heavy
ratio, any benefit shall be discounted only for mortality and
interest based on the interest rate and mortality table
specified in the defined benefit plan for this purpose.
(i) If an individual has not performed services for the
employer at any time during the five-year period ending on the
determination date with respect to a Plan Year, any account
balance or accrued benefit for such individual shall not be
taken into account for such Plan Year. This subsection shall
apply only to Plan Years commencing after December 31, 1984.
(j) For purposes of determining if a defined benefit
plan included in a required aggregation group of which this Plan
is a part is a Top-Heavy Plan, the accrued benefit to any
employee (other than a Key Employee) shall be determined as
follows:
(1) Under the method which is used for accrual
purposes under all defined benefit plans maintained by
the employer.
(2) If there is no method described in
paragraph (1), as if such benefit accrued not more
rapidly than the lowest accrual rate permitted under
Code section 411(b)(1)(C).
Sec. 14.3 Minimum Contribution Requirement. For any Plan Year
with respect to which the Plan is a Top-Heavy Plan, the employer
contributions and Forfeitures allocated to each Active Participant who is
not a Key Employee and whose Termination of Employment has not occurred
prior to the end of such Plan Year shall not be less than the minimum
amount determined in accordance with the following:
(a) The minimum amount shall be the amount equal to that
percentage of the Participant's Compensation for the Plan Year
which is the smaller of:
(1) 3 percent.
(2) The percentage which is the largest
percentage of Compensation allocated to any Key
Employee from employer contributions and Forfeitures
for such Plan Year.
For purposes of this section, "Compensation" means the amounts
specified in Sec. 6.1(f), subject to the limitation in
Sec. 2.6(e).
(b) For purposes of this section, any employer
contribution attributable to a salary reduction or similar
arrangement shall be taken into account with respect to any Plan
Year commencing after 1984. For Plan Years commencing after
1988, any employer contribution attributable to a salary
reduction or similar arrangement (including Salary Reduction
Contributions under this Plan) may not be used to satisfy the
minimum amount of employer contributions which must be allocated
under subsection (a).
(c) This section shall not apply to any Participant who
is covered under any other plan of the employer under which the
minimum contribution or minimum benefit requirement applicable
to Top-Heavy Plans will be satisfied.
Sec. 14.4 Vesting Schedule. If the Plan is a Top-Heavy Plan, a
Participant's vested accrued benefit under the Plan derived from employer
contributions shall be the greater of the vested accrued benefit
attributable to such contributions determined under Sec. 9.2 or the vested
accrued benefit determined under the following subsections:
(a) Subject to the following subsections, the vested
percentage applied to the Participant's Accounts attributable to
employer contributions shall be determined from the following
table:
Full Years of Elapsed Vested Percentage
Time
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
(b) Years of Elapsed Time for purposes of this section
shall be as defined in Sec. 3.4.
(c) This section shall not apply to a Participant who
has no Hours of Service after the Plan becomes a Top-Heavy Plan.
(d) If the Plan ceases to be a Top-Heavy Plan and
continues to be a non-Top-Heavy Plan until the Participant's
Termination of Employment, the Participant's Accounts
attributable to employer contributions for purposes of this
section shall not include the portion of such Accounts
attributable to employer contributions for periods after such
cessation. However, for purposes of Sec. 13.1(b), the vesting
schedule of the Plan shall be deemed to have been amended
effective as of the first day of the Plan Year following the
last Plan Year for which the Plan was a Top-Heavy Plan.
Sec. 14.5 Participation under Defined Benefit Plan and Defined
Contribution Plan. If a Participant is also a participant in a defined
benefit plan maintained by the employer, with respect to any Plan Year for
which the Plan is a Top-Heavy Plan, Sec. 6.1(d) shall be applied:
(a) By substituting "1.0" for "1.25" in paragraphs
(2)(B) and (3)(B) of Code section 415(e).
(b) By substituting "$41,500" for "$51,875" in Code
section 415(e)(6)(B)(i).
The foregoing provisions of this section shall be suspended with respect
to any individual so long as there are no employer contributions,
forfeitures, or voluntary nondeductible contributions allocated to such
individual, and no defined benefit plan accruals for such individual,
either under this Plan or under any other plan that is in a required
aggregation group of plans, within the meaning of Code section
416(g)(2)(A)(i), that includes this Plan.
Sec. 14.6 Definition of Employer. For purposes of this Article
XIV, the term "employer" means the Company and any trade or business
entity under Common Control with the Company.
Sec. 14.7 Exception For Collective Bargaining Unit. Sections
14.3, and 14.4 shall not apply with respect to any employee included in a
unit of employees covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee
representatives and one or more employers if there is evidence that
retirement benefits were the subject of good faith bargaining between such
employee representative and such employer or employers.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Sec. 15.1 Insurance Company Not Responsible for Validity of
Plan. No insurance company that issues a contract under the Plan shall
have any responsibility for the validity of the Plan. An insurance
company to which an application may be submitted hereunder may accept such
application and shall have no duty to make any investigation or inquiry
regarding the authority of the applicant to make such application or any
amendment thereto or to inquire as to whether a person on whose life any
contract is to be issued is entitled to such contract under the Plan.
Sec. 15.2 Headings. Headings at the beginning of articles and
sections hereof are for convenience of reference, shall not be considered
a part of the text of the Plan, and shall not influence its construction.
Sec. 15.3 Capitalized Definitions. Capitalized terms used in
the Plan shall have their meaning as defined in the Plan unless the
context clearly indicates to the contrary.
Sec. 15.4 Gender. Any references to the masculine gender
include the feminine and vice versa.
Sec. 15.5 Use of Compounds of Word "Here". Use of the words
"hereof", "herein", "hereunder", or similar compounds of the word "here"
shall mean and refer to the entire Plan unless the context clearly
indicates to the contrary.
Sec. 15.6 Construed as a Whole. The provisions of the Plan
shall be construed as a whole in such manner as to carry out the
provisions thereof and shall not be construed separately without relation
to the context.