EXHIBIT 4.12
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN AND TRUST
Amended and Restated effective January 1, 1997
REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN AND TRUST
Amended and Restated effective January 1, 1997
Table of Contents
PART ONE
Article I. Definitions And Interpretation.....................................1
(A) Definitions..........................................................1
(B) Governing Law and Rules of Construction..............................9
(C) Power to Interpret...................................................9
(D) Adoption of Plan by Related Companies...............................10
Article II. Participation......................................................1
(A) Eligibility..........................................................1
(B) Breaks in Service....................................................1
(C) Reemployment.........................................................1
(D) Inactive Participants................................................2
Article III. Contributions.....................................................1
(A) Discretionary Company Contributions..................................1
(B) Elective Contributions; Adjusted $7,000 Limitation;
Corrective Distributions.............................................1
(C) Matching Company Contributions.......................................2
(D) [Reserved]...........................................................3
(E) Limitations on Company Contributions.................................3
(F) Two or More Plans....................................................3
(G) Deductibility........................................................3
(H) Contributions by Mistake.............................................4
(I) Limitation on Repayments.............................................4
(J) No After-Tax Employee Contributions..................................4
(K) Corrective Contributions.............................................5
Article IV. Allocation And Accounts............................................1
(A) Discretionary Company Contributions Accounts.........................1
(B) Elective Contributions Accounts......................................1
(C) Matching Company Contributions Accounts..............................1
(D) [Reserved]...........................................................1
(E) Limitations on Annual Additions to Accounts..........................1
(F) Special Limitations on Allocations of Elective Contributions.........2
(G) Special Limitations on Allocations of Matching Company Contributions.3
(H) [Reserved]...........................................................4
(I) Adjustments to Prevent Excess Allocations of Elective Contributions..4
(J) Adjustments to Prevent Excess Allocations of Matching Company
Contributions........................................................7
(K) [Reserved]...........................................................9
(L) Adjustments to Prevent Multiple Use of Alternative Limitation........9
(M) Establishment and Objectives of Investment Funds.....................9
(N) Investment of Company Contributions.................................10
(O) Participant's Rights to Periodic Reallocation of Accounts...........10
(P) Participants' Credit Accounts.......................................10
(Q) Periodic Revaluation of Investment Funds............................11
(R) Periodic Adjustments to Accounts....................................11
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(S) Fixed Accounts......................................................12
(T) Forfeitures.........................................................13
(U) Additional Participant Allocations..................................14
Article V. Retirement Benefits and Vesting....................................1
(A) Normal Retirement....................................................1
(B) Late Retirement......................................................1
(C) Early Retirement; Vesting Schedule for Discretionary Company
Contributions and Matching Company Contributions; Full Vesting of
Elective Contributions and Matching Company Contributions............1
(D) Deadline for Payment of Benefits; Required Beginning Date............3
(E) Cash-Outs............................................................4
(F) Limitations on Payment of Benefits Derived from Elective
Contributions and Matching Company Contributions..................5
(G) Termination of Employment by Reason of Dissolution...................5
(H) Termination of Employment in Other Circumstances.....................5
(I) Temporary Absences...................................................5
(J) Qualified Military Service...........................................6
Article VI. Other Benefits.....................................................1
(A) Death of Participant.................................................1
(B) Designation of Beneficiary and Method of Distribution................2
(C) Required Distributions...............................................3
(D) Disability...........................................................4
(E) Hardship Distributions; Distributions After Age 59-1/2...............4
(F) Loans................................................................7
Article VIIA. Annuity Provisions..............................................1
(A) Qualified Joint and Survivor Annuity Form of Benefits................1
(B) Qualified Preretirement Survivor Annuity Form of Benefits - Married
Participants.........................................................1
(C) Election to Waive Qualified Joint and Survivor Annuity Form of
Benefits and/or Qualified Preretirement Survivor Annuity Form of
Benefits; Election Period; Information to Participants...............2
(D) Purchase of Annuity Contracts........................................4
(E) Former Spouse Treated as Surviving Spouse............................4
(F) Limited Application of Annuity Provisions............................4
Article VIII. Committee.......................................................1
(A) Composition of Committee.............................................1
(B) Removal and Resignation..............................................1
(C) Quorum...............................................................1
(D) Officers.............................................................1
(E) Records and Reports..................................................1
(F) Powers and Duties....................................................1
(G) Rules and Regulations................................................3
(H) Claims Procedure.....................................................3
(I) No Separate Committee................................................4
Article IX. Trustee and Other Fiduciaries......................................1
(A) Bonding..............................................................1
(B) Protective Provisions for Fiduciaries................................1
(C) Management and Control of Assets; Consultants and Investment
Managers.............................................................1
(D) Participant-Directed Investments.....................................3
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(E) Prohibited Transactions, Etc.........................................3
(F) General Duties of Trustee............................................3
(G) General Powers of Trustee............................................4
(H) Appraisal............................................................5
(I) Periodic Accounting..................................................6
(J) Protective Provisions for Trustee....................................7
(K) Provisions Pertaining to Co-Trustees.................................7
(L) Removal and Resignation of Trustee...................................8
(M) Successor Trustees...................................................8
(N) Settlement of Accounts upon Resignation or Removal of Trustee........8
(O) Segregated Accounts..................................................8
(P) Investments in Common Trust Funds....................................9
(Q) Commingling of Trust Funds of Company and Related Companies..........9
Article X. Termination, Amendment and Suspension..............................1
(A) Termination, Etc.; Assumption of Plan................................1
(B) Liquidation, or Temporary Continuation, of Trust.....................1
(C) Termination of Trust.................................................2
(D) Amendment............................................................2
Article XI. Miscellaneous......................................................1
(A) Persons Prohibited from Serving as Fiduciaries, Etc..................1
(B) Information Required by ERISA........................................1
(C) Retention of Records for Six Years...................................1
(D) No Reversion.........................................................1
(E) Nonforfeitability, Etc...............................................1
(F) Rollovers; Direct Transfers; Certain Transfers Prohibited............2
(G) Spendthrift Provision................................................4
(H) Exceptions to Spendthrift Provision..................................4
(I) Execution of Instruments.............................................5
(J) Successors, Etc......................................................6
(K) Payment in Kind......................................................6
(L) Miscellaneous Protective Provisions..................................6
(M) No Duress or Retaliation Against Participants, Etc...................6
(N) Record Keeping, Investigations, Etc..................................7
(O) Distributions to Minors and Incompetent or Missing Individuals.......7
(P) Expenses and Compensation............................................7
Article XII. Insurance Provisions..............................................1
(A) No Life Insurance....................................................1
Article XIII. Top-Heavy Rules.................................................2
(A) Application; Top-Heavy Status........................................2
(B) Effect of Top-Heavy Status...........................................4
(C) Definitions..........................................................5
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REPUBLIC BANCORP INC.
TAX DEFERRED SAVINGS PLAN AND TRUST
Amended and Restated effective January 1, 1997
THIS AGREEMENT, made this 4th day of February, 2002, by and between
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Republic Bancorp Inc., a Michigan corporation (herein called the "Company"), and
U.S. Bancorp Institutional Trust and Custody, f/k/a Firstar Bank, N.A. (herein,
with its predecessors and successors, called the "Trustee"),
WITNESSETH THAT WHEREAS --
(A) By an agreement between the Company and the Trustee the Company
established a profit-sharing plan and trust named the "Republic Bancorp Inc. Tax
Deferred Savings Plan" (herein as amended called the "Plan") and the " Republic
Bancorp Inc. Tax Deferred Savings Trust" (herein as amended called the "Trust"),
which the Company now desires to amend, and the Trustee is willing to join in
such amendment;
(B) It is the principal purpose of the Plan, as hereby amended, to
recognize the contribution made toward the successful operation of the Company
by its various employees and to reward and stimulate such contribution by
continuing a profit-sharing and 401(k) plan affording deferred compensation for
those employees who hereafter qualify as Participants and death benefits for
their designated Beneficiaries; and
(C) The parties intend that the amended Plan and Trust shall continuously
qualify under those provisions of the federal income tax laws relating to
qualified profit-sharing retirement plans containing cash or deferred
arrangements of the kind described in Section 401(k) of the Code and that
contributions to the Trust by the Company shall be deductible for federal income
tax purposes;
NOW, THEREFORE, in consideration of the premises and of the provisions
hereinafter set forth, it is agreed as follows:
1. The aforesaid agreement is hereby amended and restated in its entirety
to read as set forth in Parts One and Two hereof.
2. No benefit provided under the Plan protected by Section 411(d)(6) of the
Code and Regulations thereunder shall be eliminated by the adoption of this
agreement, and this agreement shall be construed and administered so as to
comply with such Code Section and Regulations.
3. This agreement shall be effective for Plan Years beginning after
December 31, 1996, except as herein otherwise expressly provided.
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IN WITNESS WHEREOF, the Company has duly executed this Agreement on the 4th
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day of February, 2002.
Signed and delivered in the REPUBLIC BANCORP INC.
presence of:
By
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Its
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The Trustee acknowledges receipt of an executed copy of this Agreement,
assents to the provisions of this Agreement which relate to the rights, duties
and obligations of the Trustee, and agrees to serve as trustee under this
Agreement subject to its terms.
Signed and delivered in the U.S. BANCORP INSTITUTIONAL TRUST AND CUSTODY
presence of: f/k/a FIRSTAR BANK, N.A.
By
-----------------------------------------
Its
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2
PART ONE
Article I. Definitions And Interpretation
(A) Definitions.
The following words and phrases, wherever capitalized, shall have the
following meanings respectively, unless the context otherwise requires:
(1)"Account" or "account" means and includes a Participant's Discretionary
Company Contributions Account, Elective Contributions Account, Matching Company
Contributions Account and any additional accounts established for the
Participant under this Agreement.
(2) "Accrued Benefit" means the balance in a Participant's account
separately maintained under Article IV hereof.
(3) "Adjusted Equivalent", wherever applied to a dollar amount, means said
amount adjusted for increases in the cost of living in accordance with
applicable Treasury Regulations.
(4) "Administrative Parties" means and includes the Company, the Trustee,
the Committee and any Insurer.
(5) "Agreement" means this Agreement, as from time to time amended or
supplemented.
(6) "Anniversary Date" means the last day of the Plan Year.
(7) "Annual Addition" means the amounts allocated to a Participant's
account for any Limitation Year which constitute -
(a) Company contributions to the Trust (including Elective
Contributions and Matching Company Contributions) in respect of
such Limitation Year;
(b) Forfeitures credited to the Participant's account in respect of
such Limitation Year;
(c) Contributions allocated to an individual medical account
described in Section 415(l)(2) of the Code which is part of a
pension or annuity plan maintained by the Company and amounts
described in Section 419A(d)(2) of the Code dealing with separate
accounts for key employees, as defined in Section 419(A)(d)(3) of
the Code established for post-retirement medical benefits under a
welfare benefit fund maintained by the Company; and
(d) Employee after-tax contributions.
Company Contributions initially allocated to a Participant's Elective
Contributions Account or Matching Company Contributions Account and later
determined to be an Excess Elective Deferral, Excess Contribution or Excess
Matching Contribution do not cease to be Annual Additions even if corrected
through distribution or other means.
(8) "Attained Age" of any individual means his chronological age, not the
age he was, or will be, on his nearest birthday.
(9) "Beneficiary" means the person so designated by a Participant pursuant
to this Agreement, or the person otherwise named as the Participant's
beneficiary under (A) or (B) of Article VI.
(10) "Code" means the Internal Revenue Code of 1986, as from time to time
amended.
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(11) "Committee" means the administrative committee appointed under Article
VIII, which shall be the plan administrator as defined in Section 414(g) of the
Code, except as otherwise provided in Article VIII(I).
(12) "Company Contributions" means and includes Discretionary Company
Contributions, Elective Contributions, Matching Company Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions.
(13) "Compensation" means all compensation as that term is defined in
Section 415(c)(3) of the Code. More particularly, Compensation for Plan Years
beginning after December 31, 1997 means and includes (i) any elective deferral
(as defined in Code Section 402(g)(3)) and any amount which is contributed or
deferred by the Company at the election of a Participant or Employee and which
is not included in the gross income of the Participant or Employee by reason of
Code Section 125 or 457 or, for Plan Years beginning on or after January 1,
2001, by reason of Code Section 132(f)(4), and (ii) wages, salaries, and 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 to the extent that the amounts are
includable in gross income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Regulation ss. 1.62-2(c)), but excluding the following:
(a) Company contributions to a plan of deferred compensation which
are not includible in the employee's gross income for the taxable
year in which contributed, or Company contributions under a
simplified employee pension plan, or any distributions from a tax
qualified plan of deferred compensation,
(b) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Participant or Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture,
(c) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option, and
(d) Other amounts which receive special tax benefits, such as
premiums for group term life insurance (but only to the extent
that the premiums are not includible in the gross income of the
Participant or Employee) or contributions made by the Company
(whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Section 403(b) of
the Internal Revenue Code (whether or not the contributions are
actually excludable from the gross income of the Participant or
Employee).
The compensation referred to in clause (ii) of the preceding sentence is
sometimes referred to as "415 safe harbor compensation."
"Creditable Compensation," where used with reference to any Participant or
Employee, means for Plan Years beginning after December 31, 1997 the total
Compensation (as above defined) paid to him by the Company, including any
elective deferral (as defined in Code Section 402(g)(3)) and any amount which is
contributed or deferred by the Company at the election of the Participant and
which is not included in the gross income of the Participant or Employee by
reason of Code Section 125 or 457 or, for Plan Years beginning on or after
January 1, 2001, by reason of Code Section 132(f)(4), but excluding -
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(e) Reimbursements and other expense allowances,
(f) Fringe benefits,
(g) Moving expenses,
(h) Deferred compensation, and
(i) Welfare benefits.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, the
Compensation and Creditable Compensation of each Employee taken into account
under the Plan for any Plan Year shall not exceed $150,000, as adjusted by the
Commissioner for increases in the cost-of-living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation and Creditable Compensation are determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than 12 months, the $150,000 (adjusted) annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
Any reference in this Plan to the limitation under Section 401(a)(17) of
the Code shall mean the $150,000 (adjusted) annual compensation limit set forth
in this provision.
If Compensation or Creditable Compensation for any prior determination
period is taken into account in determining an Employee's benefits accruing in
the current Plan Year, the Compensation or Creditable Compensation for that
prior determination period is subject to the $150,000 (adjusted) annual
compensation limit in effect for that prior determination period.
(14) "Computation Period" means a Plan Year except that, for purposes of
determining eligibility to become a Participant, the initial Computation Period
("Year One") of an individual shall be the period of twelve consecutive months
beginning on the date when he first completes an Hour of Service as an employee
of the Company; the Plan Year which includes the first anniversary of said date
shall be the next Computation Period ("Year Two") without regard to whether said
individual completed one thousand Hours of Service during Year One; and each
Plan Year thereafter shall be another Computation Period; provided that an
employee who is credited with one thousand Hours of Service in both Year One and
Year Two shall be credited with two Years of Service for purposes of
eligibility.
(15) "Defined Contribution Plan" means a plan described in Section 415(k)
of the Code which provides for an individual account for each participant and
for benefits based solely on the amount contributed to the participant's
account, and any income, expenses, gains and losses, and any forfeitures of
accounts of other participants which may be allocated to such participant's
account, except as otherwise provided by Section 414(k) of the Code for hybrid
plans.
(16) "Employee" means an individual who renders services to the Company as
a common law employee or officer, i.e., a person whose compensation from the
Company is subject to federal income tax withholding, who is not laid off
without pay or on unpaid leave of absence.
An individual rendering services to the Company purportedly as an
independent contractor shall not be treated as an Employee before the Company
has acknowledged that it must withhold federal income tax from the individual's
compensation.
For purposes of the pension requirements of Section 414(n)(3) of the Code
(but not for purposes of eligibility to participate in the Plan) the term
Employee shall include leased
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employees as defined in Section 414(n)(2) of the Code. Under this section of the
Code the term leased employee means any individual who is not an employee of the
Company or a Related Company (in this paragraph any of such Companies being
referred to as the "recipient") and who provides services to the recipient if
(i) such services are provided pursuant to an agreement between the recipient
and any other Person (in this paragraph called the "leasing organization"), (ii)
such individual has performed such services for the recipient (or for the
recipient and related persons) on a substantially full-time basis for a period
of at least one year, and (iii) such services are performed under primary
direction or control by the recipient. 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, a leased
employee shall not be considered an Employee if (i) such employee is covered by
a money purchase pension plan providing (aa) a nonintegrated employer
contribution rate of at least 10% of compensation, as defined in Section
415(c)(3) of the Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's gross income under
Section 125, Section 402(e)(3), Section 402(h) or Section 403(b) of the Code or,
for Plan Years beginning on or after January 1, 2001, by reason of Code Section
132(f)(4), (bb) immediate participation, and (cc) full and immediate vesting,
and (ii) leased employees do not constitute more than 20% of the recipient's
nonhighly compensated work force.
(For purposes of meeting the minimum coverage requirements of Section
410(b) of the Code, employee shall mean any employee of the Company or any other
employer required to be aggregated with the Company under Sections 414(b), (c),
(m), or (o) of the Code.)
(17) "Entry Date" means the first day of each calendar quarter.
(18) "ERISA" means the Employee Retirement Income Security Act of 974
(Public Law 93-406), as from time to time amended.
(19) "Excess Contribution" means Excess Contribution as defined in Article
IV(G)(2)(c).
(20) "Fiduciary" means and includes the Trustee, Committee members, and any
other Person who -
(a) Exercises any discretionary authority or discretionary control
respecting management of the Plan or exercises any authority or
control respecting management or disposition of its assets;
(b) Renders investment advice for a fee or other compensation, direct
or indirect, with respect to any moneys or other property of the
Plan, or has any authority or responsibility to do so;
(c) Has any discretionary authority or discretionary responsibility
in the administration of the Plan; or
(d) Is described as a "fiduciary" in Section 3 of ERISA or is
designated to carry out fiduciary responsibilities (other than
trustee responsibilities) pursuant to this Agreement.
Notwithstanding the foregoing provisions of this definition, the word
"Fiduciary" shall in any particular context not include any Person or category
of Persons to the extent excluded by any applicable Regulation. The Committee
shall be the "Named Fiduciary" with respect to control and management of the
operation and administration of the Plan. The Trustee shall be the "Named
Fiduciary" for custody of Plan assets, the investment of said assets (except
where an Investment Manager has been appointed to manage investments), and the
disbursement of benefits as instructed by the Committee.
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(21) "Fixed Account" means an account which has become fixed, Vested, set
apart and segregated pursuant to Article IV(P), regardless of whether or not the
assets thereof shall be commingled with any other such account or accounts.
(22) "Highly Compensated Employee" means any Employee of the Company or a
Related Company who -
(a) Was a 5-percent owner as defined in Code Section
416(i)(1)(A)(iii) at any time during the Plan Year (the
"Determination Year") or preceding twelve month period (the
"Look-Back Year"), or
(b) For the Look-Back Year -
(i) received compensation from the Company or any Related
Company in excess of the Adjusted Equivalent of $80,000, and
(ii) was in the top-paid group of employees for the Look-Back
Year, provided that the "top-paid group election" made by
the inclusion of this paragraph (b)(ii) in the Plan must
apply consistently to the same Plan Years of all plans of
the Company and any Related Company (other than
multiemployer plans) that begin with or within the same
calendar year. "Top paid group" means the group consisting
of the top 20 percent of employees when ranked on the basis
of Plan Year compensation. For purposes of determining the
number of employees in the top-paid group, those employees
described in Code Section 414(q)(5) shall be excluded.
As used above in this definition of Highly Compensated Employee, "compensation",
means Compensation (as defined in Article I(A)(13)) except that for any Plan
Year beginning after December 31, 1996 and before January 1, 1998 such
compensation shall mean compensation as defined in Code Section 415(c)(3) as
then in effect but determined without regard to Code Sections 125, 402(e)(3),
402(h)(1)(B) and in the case of employer contributions made pursuant to a salary
reduction agreement, without regard to Code Section 403(b).
In determining whether an Employee is a 5-percent owner as defined in Code
Section 416(i)(l)(A)(iii), certain family members are considered under Code
Sections 416(i)(1)(B) and 318 to own the outstanding stock of the Company owned
directly or indirectly by other family members. As a result, Employees who do
not directly own 5 percent of the outstanding stock of the Company may be
treated as 5-percent owners and hence as Highly Compensated Employees.
A former Employee who Separated from Service with the Company or a Related
Company prior to the Plan Year for which the determination of Highly Compensated
Employees is being made shall be treated as a Highly Compensated Employee if
such Employee was a Highly Compensated Employee in the Plan Year of separation
or in any Plan Year ending on or after the Employee's 55th birthday, in
accordance with the rules applicable to determining Highly Compensated Employee
status in effect for such Plan Year.
Notwithstanding the foregoing provisions of this definition of Highly
Compensated Employee, any transition relief granted by the Internal Revenue
Service or applicable law in connection with the changes in this definition
which are effective for Plan Years beginning after December 31, 1996 shall be
available to the Plan.
(23) "Hour of Service" means with respect to an employee of the Company:
(a) Each hour for which an employee is paid, or entitled to payment,
for the performance of duties for the Company during the
applicable Computation
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Period, with such hours being credited to the employee for the
Computation Period in which such duties were performed;
(b) Each hour for which an employee is paid, or entitled to payment,
by the Company 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; provided, however that no more than 501
hours of service are required to be credited under this item (b)
to an employee on account of any single continuous period during
which the employee performs no duties (whether or not such period
occurs in a single Computation Period);
(c) Each Hour of Service for which he receives credit pursuant to
Article V(I), provided that the counting of such hours shall not
cause an individual who does not meet the requirements of Article
I(A)(16)(a) to become a Participant while temporarily absent for
a reason described in Article V(I); and
(d) Each hour for which back pay irrespective of mitigation of
damages, has been either awarded or agreed to by the Company.
These hours shall be credited to the employee for the Computation
Period or periods to which the award or agreement pertains rather
than the Computation Period in which the award, agreement or
payment is made.
(e) Hours shall not be credited under (a), (b) and/or (c) if such
hours are credited under (d) of this subparagraph (23).
Also, solely for purposes of determining whether a One-Year Break in
Service for eligibility and Vesting purposes has occurred, but not for purposes
of determining the number of Years of Service of an Employee or Participant for
eligibility or Vesting purposes, nor for any other purpose under the Plan, an
Employee or Participant who is absent from work by reason of maternity or
paternity shall be deemed to have completed Hours of Service during such absence
subject to the following terms and conditions:
(f) Absence from work by reason of maternity or paternity means and
includes any 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 of 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,
(g) The number of Hours of Service deemed to have been completed
during any such absence (not to exceed 501) shall be the number
of Hours of Service which otherwise normally would have been
credited to such Employee or Participant but for such absence, or
in any case when the Committee is unable to determine such number
of hours, eight Hours of Service per day of such absence,
(h) Hours of Service shall be deemed to have been completed during an
absence under this paragraph only in the Computation Period in
which the absence begins if an Employee or Participant would be
prevented from incurring a One-Year Break in Service in such
Computation Period solely because Hours of Service are deemed to
have been completed during such absence, or in any other case in
the immediately following Computation Period,
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(i) No Hour of Service shall be deemed to have been completed during
an absence under this paragraph unless the Employee or
Participant furnishes to the Committee such timely information as
the Committee may reasonably require to establish that the
absence is for a reason described in (f) above and the number of
days of such absence, and
(j) Nothing in this paragraph shall be deemed to prevent the
crediting of Hours of Service for any purpose under the Plan
under Article II(D), even though such hours are not required to
be credited under (f) through (i) above.
The word Company as used in this paragraph shall be deemed to include any
Related Company, and also shall be deemed to include service with the following
predecessor employers:
Republic Bank, service after August 1, 1984
Republic Bank Central, service after December 26, 1986
Republic Bank North, service after December 1, 1986
Republic Bank Ann Arbor, service after June 1, 1987
Mayflower Mortgage Corp., service after November 24, 1987
Republic Bank S.E.
Premier Bank
Market Street Mortgage Company, service after December 31, 1992
Horizon Savings Bank
CUB Funding Corp., service after November 10, 1993
Home Funding, Inc., service after October 31, 1994
provided that the crediting of such Hours of Service must be in accordance with
Regulation ss. 1.401(a)(4)-(5)(a)(3). The foregoing definition shall be
interpreted in accordance with the rules set forth in Department of Labor
Regulations Sections 2530.200b-2(b) and 2530.200b-2(c), the contents of which
are hereby incorporated herein by reference.
(24) "Investment Manager" means a Fiduciary which has fully complied with
the provisions of Section 3(38) of ERISA and has provided the Committee and the
Trustee with written acknowledgement that he has done so and is a Fiduciary with
respect to the Plan.
(25) "Limitation Year" shall mean the Plan Year unless the Company has
designated a different 12 consecutive month period pursuant to a written
resolution of its Board of Directors.
(26) "Lump Sum" means one or more payments all made within a single taxable
year of the recipient.
(27) "Normal Retirement Age," in respect of any Participant, means his 62nd
birthday.
(28) "Normal Retirement Benefit" means the benefit payable under Article
V(A).
(29) "Normal Retirement Date," in respect of any Participant, means the
Anniversary Date coinciding with or next following his Normal Retirement Age.
(30) "One-Year Break in Service" means a Computation Period during which
the employee in question has not completed more than 500 Hours of Service.
(31) "Participant" means a person who at the time in question is
participating in the Plan pursuant to Article II.
(32) "Person" means any individual, corporation or other entity mentioned
in Section 3(9) of ERISA.
(33) "Plan Year" means the fiscal year on which the records of the Plan are
kept, which shall be the twelve consecutive month period ending on December 31.
I-7
(34) "Regulation" shall be construed as a reference to a regulation,
ruling, or other interpretation, validly promulgated by the Department of
Treasury or Department of Labor, as the case may be, and in effect at the time
in question.
(35) "Related Company" means and includes (i) each organization, whether or
not incorporated, which is a service organization and is a member of an
affiliated service group (within the meaning of Section 414(m) of the Code) of
which the Company is a member, (ii) all corporations which are members of a
controlled group of corporations (within the meaning of Section 414(b) of the
Code) of which the Company is a member, (iii) each trade or business, whether or
not incorporated, which is under common control (within the meaning of Section
414(c) of the Code) with the Company and (iv) any other entity required to be
aggregated with the Company pursuant to Regulations under Section 414(o) of the
Code; provided that no such corporation, organization, trade or business shall
be considered to be a Related Company at any time prior or subsequent to the
period of time during which it meets the foregoing definition; provided further
that the status of being employed by a Related Company shall only pertain to an
individual during the period of time when his employer is a Related Company, and
not to any period of time prior or subsequent to its Related Company status.
(36) "Separation (or Separated) from Service" means separation (or
separated) from the service of the Company within the meaning of Section
410(a)(4) of the Code.
(37) "Trust Fund" means and includes any and all property which shall
comprise the corpus of the Trust at the inception thereof, together with any
contributions thereto and such other property as shall from time to time become
subject to the Trust, and any and all property acquired by the Trustee in
substitution for any such contributions or other property, and any and all
accumulations thereon, increments thereof, and accretions thereto, less amounts
paid out or sustained as distributions, expenses, losses or otherwise.
(38) "Vested" when used with respect to a benefit, right or account
hereunder, means a claim obtained by a Participant or his Beneficiary to that
part of an immediate or deferred benefit under the Plan (arising from the
Participant's service) which is unconditional and legally enforceable against
the Trust; but a right to an Accrued Benefit derived from Company contributions
shall not fail to meet this definition solely (i) because it is not payable if
the Participant dies, or (ii) because the payment of benefits is suspended
during the period that the Participant is employed by the Company.
(39) "Year of Service" means a Computation Period during which the
Participant or employee in question has completed not less than 1,000 Hours of
Service.
(40) Definitions of the following words and phrases are contained in the
following provisions, respectively:
- -----------------------------------------------------------------
Actual Contribution Percentage Article IV(F)
- -----------------------------------------------------------------
Actual Deferral Percentage Article IV(E)
- -----------------------------------------------------------------
Company Opening Paragraph
- -----------------------------------------------------------------
Contribution Percentage Article IV(F)
- -----------------------------------------------------------------
Deferral Percentage Article IV(E)
- -----------------------------------------------------------------
Discretionary Company Contributions Account Article IV(A)
- -----------------------------------------------------------------
Discretionary Company Contribution Article III(A)
- -----------------------------------------------------------------
Elective Contribution Article III(B)
- -----------------------------------------------------------------
I-8
Elective Contributions Account Article IV(B)
- -----------------------------------------------------------------
Excess Contribution Article IV(G)(2)(c)
- -----------------------------------------------------------------
Excess Elective Deferrals Article III(B)
- -----------------------------------------------------------------
Excess Matching Contributions Article IV(H)(3)
- -----------------------------------------------------------------
Investment Fund Article IV(J)
- -----------------------------------------------------------------
Matching Company Contribution Article III(C)
- -----------------------------------------------------------------
Matching Company Contributions Account Article IV(C)
- -----------------------------------------------------------------
Plan Opening Paragraph
- -----------------------------------------------------------------
Qualified Joint and Survivor Annuity Article VIIA(A)(4)
- -----------------------------------------------------------------
Qualified Matching Contributions Article IV(G)(2)(b)
- -----------------------------------------------------------------
Qualified Nonelective Contributions Article IV(G)(2)(a)
- -----------------------------------------------------------------
Re-employment Commencement Date Article V(C)(2)(a)
- -----------------------------------------------------------------
Required Beginning Date Article V(D)(2)
- -----------------------------------------------------------------
Rollover Contribution Article XI(F)
- -----------------------------------------------------------------
Top Heavy Plan and Related Definitions Article XIII
- -----------------------------------------------------------------
Trust Opening Paragraph
- -----------------------------------------------------------------
Trustee Opening Paragraph
- -----------------------------------------------------------------
Valuation Date Article IV(S)(1)
- -----------------------------------------------------------------
(B) Governing Law and Rules of Construction.
This Agreement shall be governed in all respects, whether as to
construction, capacity, validity, performance or otherwise, by applicable
Federal law and, to the extent that Federal law is inapplicable, by the laws of
the State of Michigan. Wherever reasonably necessary, pronouns of any gender
shall be deemed synonymous, as shall singular and plural pronouns. The index to
this Agreement and the headings to the Articles and paragraphs of this Agreement
are included solely for convenience and shall in no event affect, or be used in
connection with, the interpretation of this Agreement. Each provision of this
Agreement shall be treated as a severable, to the end that, if any one or more
provisions shall be adjudged or declared illegal, invalid or unenforceable, this
Agreement shall be interpreted, and shall remain in full force and effect, as
though such provision or provisions had never been contained in this Agreement.
(C) Power to Interpret.
This Agreement shall be interpreted and effectuated to comply with the
applicable requirements of ERISA and the Code; and all such applicable
requirements are hereby incorporated herein by reference. Any reference in this
Agreement to the requirements of ERISA or any section or title thereof shall be
construed with due regard to Sections 108, 109 and 110 of ERISA. Subject to the
above, the Committee shall have power to construe and interpret this Agreement
and to make determinations of fact under this Agreement, including but not
limited to the power to construe and interpret all provisions of this Agreement
and to make factual determinations relating to eligibility for benefits and the
amount, manner, and time of payment of benefits, any such construction and
interpretation or factual determination by the Committee and
I-9
any action taken thereon in good faith by any Administrative Party to be final
and conclusive upon any affected party. The Committee shall also have power to
correct any defect, supply any omission, or reconcile any inconsistency in such
manner and to such extent as the Committee shall deem proper to carry out and
put into effect this Agreement; and any construction, interpretation or factual
determination made or other action taken by the Committee pursuant to this
Paragraph (C), if and when communicated in writing to any other Administrative
Party or affected party, shall be binding upon such other party and may be
relied upon by such other party.
(D) Adoption of Plan by Related Companies.
Any Related Company may adopt this Agreement and the Plan and Trust for the
benefit of its eligible employees by action of its Board of Directors but only
with the consent of the Company evidenced by a resolution of its Board of
Directors or the written consent of its President. Unless the context otherwise
requires, at any time while a Related Company has adopted this Agreement (i) the
term Company as used herein with respect to any Employee or Participant shall be
construed to mean the adopting corporation or other entity by which such
Employee or Participant is employed, and (ii) whenever the term Company is used
in connection with action to be taken in connection with the Plan, or its
administration, e.g., in Article X relating to the termination or amendment of
the Plan or in Article VIII(A) relating to the appointment of the Committee, the
term Company shall mean Company as defined in the opening paragraph of this
Agreement. A transfer of employment by a Participant between Related Companies
shall not be considered a termination of employment requiring or permitting a
distribution from the Trust.
I-10
Article II. Participation
(A) Eligibility.
For purposes of determining eligibility to participate --
(1) As to Elective Contributions, effective January 1, 2001, any Employee
who has (i) attained the age of twenty-one (21) years of age or more and (ii)
completed one month of continuous employment (or one Year of Service, if less)
shall become a Participant automatically on the Entry Date coinciding with or
next succeeding the first date when said conditions are fulfilled. Prior to
January 1, 2001, any Employee who had (i) attained the age of twenty-one (21)
years of age or more and (ii) completed 1,000 hours of service (or one Year of
Service, if less) became a participant automatically on the Entry Date
coinciding with or next succeeding the first date when said conditions were
fulfilled. As a consequence of becoming a Participant the Employee shall be
eligible to elect as of the Entry Date on which he becomes a Participant, or as
of any later Entry Date on which he is a Participant, to reduce his Creditable
Compensation and to have the Company make Elective Contributions on his behalf
to the Trust in the amount of such reductions in accordance with Article III(B).
(2) As to Discretionary Company Contributions and Matching Company
Contributions, any Employee who has (i) attained the age of twenty-one (21)
years or more and (ii) completed at least one Year of Service shall become a
Participant automatically on the Entry Date coinciding with or next succeeding
the first date when said conditions are fulfilled. As a consequence of becoming
a Participant the Employee shall become entitled to allocations of any
Discretionary Company Contributions and/or Matching Company Contributions in
accordance with Articles III and IV.
(B) Breaks in Service.
For purposes of determining eligibility to participate all Years of Service
with the Company shall be counted, except that -
(1) In the case of a Participant or other Employee who does not have a
Vested right to an Accrued Benefit derived from Company contributions, i.e., who
is not Vested in any part of an account balance under the Plan derived from
Company contributions, Years of Service prior to a period of five consecutive
One-Year Breaks in Service shall not be counted (excluding from the number of
Years of Service before such period any Years of Service not required to be
counted hereunder by reason of any prior break in service).
(2) Notwithstanding paragraph (1) above, if as of the day before the first
day of the Plan Year beginning in 1985 any Years of Service prior to such date
were not required to be counted for purposes of determining eligibility under
the Plan as then in effect, such Years of Service shall not be counted
hereunder.
(3) No individual shall be eligible to become a Participant as of any Entry
Date when he is not an Employee.
(C) Reemployment.
A former Participant or Employee shall be subject to the following rules
with respect to participation in the Plan upon reemployment:
(1) A former Participant or other former Employee who (i) did not have a
Vested right to an Accrued Benefit derived from Company contributions on the
date his employment with the Company or a Related Company terminated, (ii)
incurred a period of consecutive One-Year
II-1
Breaks in Service which equaled or exceeded five, and (iii) subsequently is
reemployed by the Company or a Related Company, shall become eligible, or again
become eligible, to participate in the Plan upon meeting anew the eligibility
requirements of Article II(A) above.
(2) A former Participant (i) who did not have a Vested right to an Accrued
Benefit derived from Company Contributions on the date his employment with the
Company or a Related Company terminated, (ii) whose Years of Service prior to
the termination of his employment may not be disregarded under Article II(B)(1)
above, and (iii) who is reemployed by the Company or a Related Company shall
become, or again become, a Participant immediately upon again becoming an
Employee. As soon as practicable after again becoming a Participant, and as of
any subsequent Entry Date, such Employee may elect to have the Company make
Elective Contributions on his behalf to the Trust in accordance with Article
III(B).
(3) A former Participant who (i) had a Vested right to an Accrued Benefit
derived from Company contributions on the date his employment with the Company
or a Related Company terminated and (ii) subsequently is reemployed by the
Company or a Related Company again shall become a Participant immediately upon
again becoming an Employee. As soon as practicable after again becoming a
Participant, and as of any subsequent Entry Date, such Employee may elect to
have the Company make Elective Contributions on his behalf to the Trust in
accordance with Article III(B).
(D) Inactive Participants.
Subject to Article IV(P)(1) and (R) with respect to certain Participants,
it is agreed as follows:
(1) During any Plan Year in which a Participant does not have at least one
Hour of Service but remains employed by the Company throughout such Plan Year,
he shall be deemed an inactive Participant in the portion of the Plan relating
to Discretionary Company Contributions and as such he shall not share in the
allocation of any such contributions or forfeitures of the same, if any, for
such Plan Year under Article IV(A). However, he shall continue to be treated as
a Participant in such portion of the Plan for other Plan purposes including the
periodic adjustments to accounts of Participants described in Article IV(O)(1),
(2), (4) and (5) and his eligibility to make Elective Contributions to the Trust
under Article II(A). If in any subsequent Plan Year such an inactive Participant
in the Discretionary Company Contributions portion of the Plan completes at
least one Hour of Service, he again shall become an active Participant and shall
be treated as such for all Plan purposes.
(2) For any Plan Year in which an Employee again becomes a Participant
following a One-Year Break in Service (or longer break) resulting from the
termination of his employment, and is not employed by the Company from the first
day of such Plan Year through the date he becomes a Participant, the foregoing
Hour of Service requirement (for continued active participation in the
Discretionary Company Contributions portion of the Plan) shall also pertain.
(3) During any period when a Participant fails to conform to the definition
of an Employee because he is covered by a collective bargaining agreement within
the meaning of Article I(A)(16)(b) but is still employed by the Company or
because he is transferred to employment with a Related Company which has not
adopted the Plan for its eligible employees, he shall be deemed an inactive
Participant and during such period no Compensation paid to him by the Company
shall be taken into account for the purpose of allocating Discretionary Company
Contributions or forfeitures of the same under Article IV or otherwise under the
Plan. However, he shall continue to be treated as a Participant for other Plan
purposes including the periodic adjustments to accounts of Participants
described in Article IV(O)(1), (2), (4) and (5). If such an inactive Participant
again conforms to the definition of an Employee he subsequently shall be
II-2
treated as an active Participant for all Plan purposes and Compensation paid to
him thereafter by the Company shall be taken into account for the foregoing
purposes.
(4) During any period (i) when an election under Article III(B) to reduce
the Creditable Compensation which a Participant otherwise would be entitled to
receive and to have the Company make Elective Contributions to the Trust on his
behalf is not in effect, (ii) when a Participant fails to meet the definition of
an Employee because he is covered by a collective bargaining agreement within
the meaning of Article I(A)(16)(b), or (iii) when because of a transfer of
employment he is employed by a Related Company which has not adopted the Plan,
he shall be considered an inactive Participant in the Elective Contributions
portion of the Plan and no Elective Contributions will be allocated to his
Elective Account for such period. However, during such period the Participant
shall continue to be treated as a Participant in the Elective Contributions
portion of the Plan for other Plan purposes including the periodic adjustments
to accounts of Participants described in Article IV(O)(1), (2), (4) and (5).
II-3
Article III. Contributions
(A) Discretionary Company Contributions.
Subject to the limitations of Article III(D) and (E), the Company shall in
respect of each taxable year, within the time prescribed by law for filing its
federal income tax return for such taxable year (including extensions thereof),
contribute to the Trust in furtherance of the Plan, in cash or investments
authorized under Article IX(G)(General Powers of Trustee), such amount, if any,
as may be determined in the discretion of the Company by or in accordance with a
resolution of its Board of Directors adopted within the time prescribed by law
for filing its federal income tax return for such taxable year, including
extensions thereof, any such amounts being herein called "Discretionary Company
Contributions".
(B) Elective Contributions; Adjusted $7,000 Limitation; Corrective
Distributions.
Subject to the limitations of Article III(D) and (E) and Article IV(E),
each Participant may elect within a reasonable time (to be specified by the
Committee) before any Entry Date, and before any additional regular periodic
dates which the Committee may designate and communicate to Participants, on a
form to be furnished to him by the Committee to reduce the Creditable
Compensation which otherwise would be paid to him after such Entry Date (or
other designated date) and to have the Company make contributions (herein called
"Elective Contributions") to the Trust in the amounts of such reductions on his
behalf, provided, however, that no Participant may elect to have Elective
Contributions (i) made to the Trust on his behalf of less than 1% or more than
15% of such Creditable Compensation or (ii) made to the Trust and/or to any
other tax qualified plan of the Company on his behalf of more than the Adjusted
Equivalent of $7,000 in any taxable year of the Participant. Such an election,
and any election to change the same made pursuant to this Agreement, may be made
only with respect to Creditable Compensation which is not currently available to
the electing Participant on the Entry Date (or other designated date) as of
which the election is made.
Elective Contributions obtained by the Company by means of payroll
reductions shall be paid by the Company to the Trustee at the earliest date on
which they can reasonably be segregated from the Company's general assets and in
no event later than the 15th business day of the month following the month in
which such amounts otherwise would have been paid to the Participant as
Creditable Compensation. Subject to the foregoing, Elective Contributions for a
Plan Year shall be made during the Plan Year or within the time prescribed in
(A) above for making Discretionary Company Contributions for the Plan Year,
except that any additional Company Contributions made under Article IV(G)(2) and
treated as Elective Contributions for the Plan Year may be made within 12 months
following the close of the Plan Year.
A Participant who has elected to have the Company make Elective
Contributions to the Trust on his behalf may, as of any Entry Date and as of any
additional regular periodic dates as the Committee may determine and communicate
to Participants, change the annual dollar amount of such Elective Contributions
or the percentage of Creditable Compensation used to determine the amount of
such Elective Contributions. Also, at any time, a Participant may elect to
terminate his Elective Contributions for the period subsequent to the effective
date of the election by giving notice to the Committee at least ten days prior
to the effective date of such termination. All such elections may be made and
become effective only in accordance with such reasonable rules as may be
established by the Committee. In the event of the termination of Elective
Contributions on behalf of a Participant under this paragraph, the Participant
shall not be entitled, until a subsequent Entry Date, to again elect that
Elective Contributions be made on his behalf.
III-1
If the Elective Contributions made to the Trust on behalf of a Participant
under the Plan together with any elective deferrals (as defined in Section
402(g)(3) of the Code) under another qualified cash or deferred arrangement as
defined in Section 401(k) of the Code, a simplified employee pension as defined
in Section 408(k) of the Code, a salary reduction arrangement under Section
403(b) of the Code, a deferred compensation plan under Section 457 of the Code,
or a trust described in Section 501(c)(18) of the Code, cumulatively exceed the
limitation imposed by Section 402(g) of the Code for the Participant's taxable
year, the Participant may, not later than March 1 following the close of such
taxable year, notify the Committee in writing of the excess Elective
Contributions made to the Trust (in this Agreement called "Excess Elective
Deferrals") and request that such Excess Elective Deferrals be paid to the
Participant.
In such event the Committee may direct the Trustee to pay such Excess
Elective Deferrals plus any income, or less any loss, allocable to the same to
the Participant not later than the first April 15 following the close of such
taxable year. At the request of the Participant Excess Elective Deferrals for a
taxable year of the Participant may be paid to the Participant from the Trust
during the taxable year for which they were made if the Committee so directs the
Trustee, provided that in such event (i) the Participant designates the payment
as an Excess Elective Deferral, (ii) the payment is made after the date on which
the Trustee received the Excess Elective Deferral, and (iii) the Committee
designates the payment as a distribution of Excess Elective Deferrals.
Notwithstanding the foregoing, a Participant's Excess Elective Deferrals
for the taxable year of the Participant shall be reduced, but not below zero, by
any distribution of Excess Contributions made to the Participant pursuant to
Article IV(G) for the Plan Year beginning with or within the taxable year of the
Participant.
The income or loss allocable to an Excess Elective Deferral paid to a
Participant by the Trustee shall be an amount equal to the income or loss of the
Participant's Elective Contributions Account for the taxable year of the
Participant for which the Excess Elective Deferral was made multiplied by a
fraction the numerator of which is the Excess Elective Deferral made on behalf
of the Participant for such taxable year and the denominator of which is the
Participant's Elective Contributions Account balance as of the beginning of such
taxable year plus the Participant's Elective Contributions for such taxable
year.
If Elective Contributions for any Plan Year exceed the percentage
limitation imposed on the same by the first paragraph of this Article III(B) the
excess shall be refunded to the Participant in the same manner as Excess
Elective Deferrals.
(C) Matching Company Contributions.
Subject to the limitations of Article III(D) and (E) and Article IV(F) and
the rights and obligations of the Committee under Article IV(G) and (H) to
monitor and make adjustments in certain contributions, the Company shall
contribute to the Trust for each Plan Year on behalf of each Participant for
whom it makes Elective Contributions for such Plan Year matching contributions
(herein called "Matching Company Contributions") in an amount equal to 50% of
that portion of his Elective Contributions which does not exceed 7% of the
Participant's Creditable Compensation for the portion of the Plan Year in which
he was a Participant and made Elective Contributions. For purposes of this
Paragraph (C), a Participant's Elective Contributions means his Elective
Contributions for the Plan Year remaining after distribution to him of any
excess Elective Contributions under Article III(B), IV(D), IV(G)(2)(c) or IV(I)
for such Plan Year. A Participant's Elective Contribution for the Plan Year for
purposes of this Paragraph (C) means his Elective Contribution remaining after
distribution to him of any Excess Elective Deferrals under Article III(B) and
any Excess Contributions under Article IV(G)(2)(c) for such
III-2
Plan Year. The Company shall contribute all such Matching Company Contributions
to the Trust for each Plan Year in cash from time to time during such Plan Year,
or after the end of such Plan Year but not later than the time prescribed by law
for filing its federal income tax return for its taxable year with respect to
which the Matching Company Contribution is made, including extensions thereof.
Pursuant to Article IV(Q)(4), Matching Company Contributions required to be made
to the Trust under this Article III(C) shall be reduced by any forfeitures of
Matching Company Contributions for the Plan Year in which the forfeitures occur.
(D) [Reserved]
(E) Limitations on Company Contributions.
The Company Contributions to the Trust for any taxable year of the Company
shall not exceed the least of:
(1) The aggregate Company Contributions permitted by Article IV(D)
(specifying maximum Annual Additions) as applied to all Participants;
(2) An amount equal to 15% of the aggregate Compensation paid during such
taxable year to Employees who are Participants as of the Anniversary Date
falling within such taxable year, plus the amount of any unused pre-87
limitation carry forwards available under Section 404(a)(3)(A)(v) of the Code in
respect of such taxable year; or
(3) The Company contributions permitted by Article III(E) (pertaining to
two or more plans).
(F) Two or More Plans.
If the Company makes contributions for the taxable year in question, in
connection with one or more additional tax qualified plans (including at least
one defined benefit plan) whose participants include one or more Participants in
this Plan, the total amount so contributed by the Company for said taxable year,
including its contribution for said taxable year under Paragraphs A, B and C of
this Article III, shall not exceed the greater of (i) 25% of the Compensation
otherwise paid during said taxable year to the participants in said additional
plans and the Participants in this Plan or (ii) the amount of Company
contributions necessary to satisfy the minimum funding standard provided by
Section 412 of the Code for the Plan Year which ends with or within said taxable
year (or for any prior Plan Year), all within the meaning of Section 404(a)(7)
of the Code; provided that:
(1) If any carry-over deduction is available to the Company for said
taxable year from one or more prior taxable years under Section 404(a)(7)(B),
the amount thereof shall reduce the limitation set forth in the foregoing
portion of this Paragraph (E).
(2) If said limitation (reduced, if appropriate, under (1) above) would
otherwise be exceeded, the Company's contribution under this Plan for said
taxable year shall be reduced by an amount equal to the excess.
(G) Deductibility.
All Company Contributions to the Trust are conditioned upon the Plan and
Trust being initially tax qualified and upon deductibility under Section 404 of
the Code, unless otherwise expressly stated by the Company. Accordingly (unless
so stated), if the Plan and Trust are submitted to the Internal Revenue Service
for a determination letter within the time provided by law for filing the
Company's federal income tax return for the fiscal year of the Company in
III-3
which the Plan and Trust were adopted or by such later date as the Secretary of
the Treasury may prescribe, and are determined to be not initially tax
qualified, or if and to the extent that such a deduction is disallowed within
the meaning of Section 403(c)(2) of ERISA, the contribution in question shall be
repaid to the Company upon demand (but subject to Paragraph (H) below and, if by
reason of disallowance, only to the extent disallowed) within one year after
such disallowance or denial of initial qualification. Any Elective Contributions
so returned to the Company shall be paid by the Company to the Employees on
whose behalf they were made. If any Company contribution for any taxable year
shall exceed the amount deductible for said taxable year under the Code, but
shall not be repaid pursuant to the foregoing sentence, the portion not so
deductible shall in like amount reduce the contribution required in respect of
the subsequent taxable year during which the disallowance or other determination
of nondeductibility is made and (to the extent not thereby consumed) any
subsequent taxable year or years.
(H) Contributions by Mistake.
If and to the extent that a Company contribution to the Trust is made as a
result of facts and circumstances constituting a good faith mistake of fact, the
same shall be repaid to the Company upon demand (but subject to Paragraph (H)
below and only to the extent of such mistake) within one year after the payment
of the contribution. Any Elective Contributions so returned to the Company shall
be paid by the Company to the Employees on whose behalf they were made.
(I) Limitation on Repayments.
All repayments of Company Contributions under Paragraphs (F) and (G) above
shall be subject to the conditions that:
(1) Such repayment shall not include any earnings attributable to that
portion of the Company contribution which qualifies for repayment under
Paragraphs (F) and (G) above.
(2) There shall be deducted from the amount of such repayment any losses
attributable to that portion of the Company Contribution which qualifies for
repayment under Paragraphs (F) and (G) above.
(3) If in any event such repayment would result in any Participant's
account being reduced to a balance which is less than the balance which would
have been in his account had the amount contributed by mistake of fact or in
excess of the deductible amount not been contributed, then the amount to be
repaid shall be reduced until no Participant's account shall be so reduced by
reason of such repayment.
(J) No After-Tax Employee Contributions.
No Employee shall make any nondeductible (after-tax) employee contributions
to the Trust for any Plan Year beginning after 1986. This prohibition shall not
prevent rollovers or transfers to the Trust permitted under Article XI(F). If
this Agreement permitted nondeductible employee contributions prior to the Plan
Year beginning after 1986 and any Participant made such contributions, such
contributions and earnings thereon shall be fully vested and shall continue to
be maintained in a separate account by the Trustee for each such Participant.
Also, the provisions of this Agreement relating to nondeductible employee
contributions in effect for Plan Years prior to the Plan Year beginning after
1986 shall continue to apply to such separate accounts.
III-4
(K) Corrective Contributions.
If it becomes necessary to correct a mistake made in amounts distributed
from or credited to any Account or to restore the portion of an Account which
was forfeited pursuant to any provision of the Plan, correction or restoration
shall first be made out of Discretionary Company Contributions and forfeitures,
if any, and then out of Trust Fund earnings for the Plan Year in question, but
only to the extent that such amounts have not already been allocated under the
provisions of the Plan. Any additional amounts needed for such correction or
restoration may be provided by a special contribution to the Plan which the
Company in its sole discretion (but subject to the applicable limitations on
deductible contributions and maximum annual additions) may elect to make. Any
such amounts shall be allocated as may be required to correct such mistake or to
make such restoration.
III-5
Article IV. Allocation And Accounts
(A) Discretionary Company Contributions Accounts.
The Trustee shall establish an account (herein called a "Discretionary
Company Contributions Account") for each Participant and shall thereafter
maintain a record thereof. Discretionary Company Contributions under Article
III(A) for any taxable year shall, subject to the limitations of Article IV(D)
and to Article II(D) regarding inactive Participants, promptly upon receipt be
allocated among the various Participants' Discretionary Company Contributions
Accounts, as of the Anniversary Date falling within such taxable year, as
follows:
(1) The amount allocated to each Participant's Discretionary Company
Contributions Account (including the Discretionary Company Contributions Account
of any individual who first became a Participant as of either Entry Date falling
within such taxable year) shall be that portion of the Company's Discretionary
Company Contributions which the Creditable Compensation paid to such Participant
in the taxable year bears to the total Creditable Compensation paid to all the
Participants in the taxable year.
(2) If a Participant's employment terminates for any reason during the
taxable year an amount shall be allocated to his Discretionary Company
Contribution Account only if, and to the extent, required by Article IV(P)(1)
(relating to Fixed Accounts).
(B) Elective Contributions Accounts.
The Trustee shall establish an account (herein called an "Elective
Contributions Account") for each Participant and shall thereafter maintain a
record thereof. Elective Contributions under Article III(B) for any Plan Year
shall, subject to the limitations of Paragraphs (D) and (E) of this Article IV,
be credited to the Participant's Elective Contributions Account upon receipt by
the Trustee not less frequently than monthly and in no event later than as of
the Anniversary Date falling within such Plan Year.
(C) Matching Company Contributions Accounts.
The Trustee shall establish an account (herein called a "Matching Company
Contributions Account") for each Participant in respect of whom the Company
makes a Matching Company Contribution to the Trust and shall thereafter maintain
a record thereof. Matching Company Contributions under Article III (C) for any
Plan Year in respect of each Participant shall be credited to the Participant's
Matching Company Contributions Account upon receipt by the Trustee and in no
event later than as of the Anniversary Date falling within such Plan Year.
(D) [Reserved]
(E) Limitations on Annual Additions to Accounts.
Notwithstanding the foregoing provisions of Paragraphs (A), (B) and (C) of
this Article IV or of Article III, the contributions and other additions with
respect to any one Participant for any Limitation Year under all Defined
Contribution Plans of the Company, expressed as an Annual Addition to such
Participant's Accounts under this Plan and as annual additions (defined
similarly to Article I(A)(7)) allocated to such Participant's accounts under all
other Defined Contribution Plans of the Company, shall not exceed the lesser of:
(1) For Limitations Years beginning after 1994, the Adjusted Equivalent of
$30,000.00, or
IV-1
(2) 25% of the Compensation paid to such Participant by the Company in said
Limitation Year;
provided that if said limitation would otherwise be exceeded, the amount
allocated to said Participant's Accounts shall be reduced by an amount equal to
the excess, and Company Contributions for said Limitation Year shall be reduced
to the extent necessary to avoid such excess; provided, however, that if such
reduction is not possible or practical in the circumstances because the Company
Contributions for such Limitation Year have been made at the time it is
discovered that said limitation would otherwise be exceeded and the Committee
determines that the excess part of such contribution cannot be returned to the
Company without adversely affecting the tax qualified status of the Plan either
as a contribution made as a result of a mistake of fact or by reason of its
nondeductibility, then if such excess was created as the result of the
allocation of forfeitures, a reasonable error in estimating a Participant's
Compensation or Creditable Compensation, a reasonable error in determining the
amount of Elective Contributions that may be made with respect to any individual
under the limits of Section 415 of the Code, or under other limited facts and
circumstances which the Commissioner of Internal Revenue finds justify the
availability of the rules set forth in the remainder of this Paragraph (D), the
portion of such excess, if any, attributable to excess Elective Deferrals may be
distributed to the Participant to the extent such distribution reduces the
excess, and any remaining excess shall be held in a suspense account, provided
(i) no further Company contributions will be made to the Trust on behalf of the
Participants for which such excess exists until they can be allocated to the
Accounts of such Participants without violating the aforesaid limitation, (ii)
investment gains and/or losses and other Trust income are not allocated to such
suspense account and (iii) the amounts in such suspense account are allocated to
the Accounts of Participants for which such excess exists, or if no such excess
exists for any Participant, to the Accounts of the remaining Participants, as of
each subsequent date on which contributions are normally allocated until such
suspense account is exhausted. In the event the Plan and Trust are terminated
any amount in such suspense account at the time of termination shall be
allocated to the accounts of the Participants in the Plan Year in which the Plan
is terminated in the same proportions as a Company contribution for such Plan
Year would be allocated, but only to the extent permitted by the aforesaid
limitations on Annual Additions. If after such allocation any amount remains in
such suspense account, it shall be paid to the Company and to the extent any
such amount consists of Elective Contributions the Company shall pay the same to
the appropriate Participants. The word Company as used in this Article IV(D)
shall be deemed to include any Related Company unless the context otherwise
requires so that for purposes of Section 415 of the Code all employees of the
Company and any Related Company shall be treated as employed by a single
employer.
(F) Special Limitations on Allocations of Elective Contributions.
For each Plan Year allocations of Elective Contributions to the
Participants' Elective Contribution Accounts shall be limited so that the Actual
Deferral Percentage for the group of Participants who are Highly Compensated
Employees for the Plan Year shall bear a relationship to the Actual Deferral
Percentage for the group of all other Participants for the preceding Plan Year
which meets either of the following tests:
(1) The Actual Deferral Percentage for the group of Participants who are
Highly Compensated Employees for the Plan Year is not more than the Actual
Deferral Percentage for the group of Participants for the preceding Plan Year
who are not Highly Compensated Employees for such preceding Plan Year using the
definition of Highly Compensated Employee in effect for such preceding Plan Year
multiplied by 1.25, or
(2) The excess of the Actual Deferral Percentage for the group of
Participants who are Highly Compensated Employees for the Plan Year over the
Actual Deferral Percentage for the
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group of Participants for the preceding Plan Year who are not Highly Compensated
Employees for such preceding Plan Year using the definition of Highly
Compensated Employee in effect for such preceding Plan Year is not more than 2
percentage points, and the Actual Deferral Percentage for the group of
Participants who are Highly Compensated Employees for the Plan Year is not more
than the Actual Deferral Percentage for the group of Participants for the
preceding Plan Year who are not Highly Compensated Employees for such preceding
Plan Year using the definition of Highly Compensated Employee in effect for such
preceding Plan Year multiplied by 2.
For purposes of this Paragraph (E), "Actual Deferral Percentage" for each
group of Participants referred to above for a Plan Year means the average of the
ratios, calculated separately for each Participant in the group, of the amount
of Elective Contributions paid to the Trust on behalf of the Participant for the
Plan Year, to the Participant's Creditable Compensation paid in that portion of
the Plan Year during which he was a Participant. As separately calculated for
each Participant, such ratio is referred to as his "Deferral Percentage."
The Deferral Percentage of a Participant for whom no Elective Contribution
is made for the Plan Year is zero. The Deferral Percentages of Participants and
the Actual Deferral Percentage of each group of Participants shall be calculated
to the nearest one hundredth of one percent. For purposes of the tests described
in (1) and (2) above Elective Contributions shall include any amounts treated as
Elective Contributions under Article IV(G).
For purposes of this Paragraph (E), the following special rules shall
apply:
(3) The Deferral Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Contributions
allocated to his accounts under this Plan and under one or more other plans or
arrangements described in Section 401(k) of the Code that are maintained by the
Company or a Related Company shall be determined as if all such Elective
Contributions were made under a single plan or arrangement.
(4) The determination and treatment of the Elective Contributions and
Deferral Percentage of any Participant shall satisfy such other requirements as
may be prescribed by Regulation. The Company shall maintain for a reasonable
time records sufficient to demonstrate compliance with the Regulations relating
to the Actual Deferral Percentage test(s) described above and/or applicable
prior to January 1, 1997.
(G) Special Limitations on Allocations of Matching Company Contributions.
For each Plan Year, allocations of Matching Company Contributions to
Participants' Matching Company Contributions Accounts shall be limited so that
the Actual Contribution Percentage for the group of Participants who are Highly
Compensated Employees for the Plan Year shall bear a relationship to the Actual
Contribution Percentage for the group of all other Participants for the
preceding Plan Year which meets either of the following tests:
(1) The Actual Contribution Percentage for the group of Participants who
are Highly Compensated Employees for the Plan Year is not more than the Actual
Contribution Percentage for the group of Participants for the preceding Plan
Year who are not Highly Compensated Employees for such preceding Plan Year using
the definition of Highly Compensated Employee in effect for such preceding Plan
Year multiplied by 1.25, or
(2) The excess of the Actual Contribution Percentage for the group of
Participants who are Highly Compensated Employees for the Plan Year over the
Actual Contribution Percentage for the group of Participants for the preceding
Plan Year who are not Highly Compensated Employees for such preceding Plan Year
using the definition of Highly Compensated Employee in effect for such preceding
Plan Year is not more than 2 percentage points, and the Actual
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Contribution Percentage for the group of Participants who are Highly Compensated
Employees for the Plan Year is not more than the Actual Contribution Percentage
for the group of Participants for the preceding Plan Year who are not Highly
Compensated Employees for such preceding Plan Year using the definition of
Highly Compensated Employee in effect for such preceding Plan Year multiplied by
2.
For purposes of this Paragraph (G), "Actual Contribution Percentage" for
each group of Participants for a Plan Year means the average of the ratios,
calculated separately for each Participant in the group, of the amount of
Matching Company Contributions paid to the Trust on behalf of each Participant
for the Plan Year, to the Participant's Creditable Compensation paid in that
portion of the Plan Year during which he was a Participant. As separately
calculated for each Participant, such ratio is referred to as his "Contribution
Percentage."
The Contribution Percentage of a Participant for whom no Matching Company
Contribution is made for the Plan Year is zero. The Contribution Percentages of
Participants and the Actual Contribution Percentage of each group of
Participants shall be calculated to the nearest one hundredth of one percent.
For purposes of the tests described in (1) and (2) above Matching Company
Contributions shall include any amounts treated as Matching Company
Contributions under Article IV(H).
For purposes of this Paragraph (G), the following special rules shall
apply:
(3) The Contribution Percentage for any Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have Matching
Company Contributions allocated to his accounts under this Plan and under one or
more other plans or arrangements described in Section 401(k) of the Code that
are maintained by the Company or a Related Company shall be determined as if all
such Matching Company Contributions were made under a single plan or
arrangement.
The determination and treatment of the Matching Company Contributions and
Contribution Percentage of any Participant shall satisfy such other requirements
as may be prescribed by Regulation. The Company shall maintain for a reasonable
time records sufficient to demonstrate compliance with the Regulations relating
to the Actual Contribution Percentage test described above and/or applicable
prior to January 1, 1997.
(H) [Reserved]
(I) Adjustments to Prevent Excess Allocations of Elective Contributions.
In order to assure that no amounts in excess of the limitations imposed by
Paragraph (E) of this Article IV are allocated to the Elective Contributions
Account of any Participant who is a Highly Compensated Employee, and in the case
of (1) below also to assure that no amounts in excess of the limitations imposed
by Article III(D) and (E) and Article IV(D) are exceeded, the following steps
shall be taken:
(1) The Committee shall monitor elections made by Participants under
Article III(B) and Elective Contributions being made periodically to the Trust
pursuant to such elections and may require changes in the elections of
Participants, prior to or during any Plan Year, which would reduce the Elective
Contributions being made to the Trust on behalf of such Participants and the
Matching Company Contributions being made to the Trust on account of such
Elective Contributions and/or may reduce or terminate such Elective
Contributions and the Matching Company Contributions being made to the Trust on
account of such Elective Contributions at any time, in order to assure
compliance with any of the limitations referred to above.
IV-4
(2) If notwithstanding the Committee's efforts to monitor allocations to
the Accounts of Participants as required by subparagraph (1) above, the
Committee determines after the end of a Plan Year that the allocations of
Elective Contributions to the Elective Contribution Accounts of Highly
Compensated Employees for such Plan Year exceed the special limitations
described in Paragraph (E) above:
(a) The Company may make additional discretionary contributions to
the Trust for such Plan Year (or prior Plan Year if the prior
year testing method is used) for allocation to separate accounts
of Participants who are not Highly Compensated Employees, or to
accounts of all Participants, in amounts which in combination
with Elective Contributions (and any Qualified Matching
Contributions under (b) below) for such Plan Year (or prior Plan
Year) are sufficient to cause such special limitations not to be
exceeded. Any such contributions (i) shall be allocated to
separate accounts of such Participants in proportion to the
Creditable Compensation of each paid in that portion of the
applicable Plan Year during which he was a Participant, or if for
Plan Years beginning after 1989 Regulations so require, at any
time in such Plan Year, (ii) shall meet the requirements of
Regulation 1.401(k)-1(b)(5), and (iii) shall be made no later
than the end of the 12-month period following the end of the Plan
Year to which the contribution relates. Such special accounts
shall be fully Vested at all times, shall be subject to the same
limitations on distributions which are applicable to Elective
Contributions described in Article V(F) and shall be treated as
Elective Contributions for purposes of Article IV(E). Also, the
Company may transfer to separate accounts of the kind described
above any Discretionary Company Contributions made to the Trust
for such Plan Year in which event they shall be treated in the
same manner and be subject to the same conditions as additional
discretionary contributions to the Trust under this subparagraph
(a). Contributions made or transferred to separate accounts
pursuant to this subparagraph (a) are referred to in this
Agreement as "Qualified Nonelective Contributions".
(b) The Company may treat all or part of the Matching Company
Contributions to the Trust for such taxable year, all of which
are fully Vested and subject to the limitations of Article V(F),
as Elective Contributions. The Company may make additional
matching contributions to the Trust for such Plan Year for
allocation to separate accounts of Participants for whom Elective
Contributions were made to the Trust for such Plan Year and who
are not Highly Compensated Employees in amounts which in
combination with the Elective Contributions, the Matching Company
Contributions treated as Elective Contributions (and any
Qualified Nonelective Contributions under (a) above) for such
Plan Year are sufficient to cause such special limitations not to
be exceeded. Any such additional matching contributions (i) shall
be allocated to separate accounts of such Participants in
proportion to the Elective Contributions made on behalf of each
for the Plan Year, (ii) shall meet the requirements of Regulation
1.401(k)-1(b)(5), and (iii) shall normally be made within the
time prescribed by law for filing the Company's federal income
tax return for its taxable year with respect to which the
matching contribution is made, including extensions thereof. Such
special accounts shall be fully Vested at all times and shall be
subject to the same limitations on distributions which are
applicable to Elective Contributions described in Article V(F)
and shall be treated as Elective Contributions for
IV-5
purposes of Article IV(E). Also, the Company may transfer to
separate accounts of the kind described above any Discretionary
Company Contributions and Matching Company Contributions, which
are not fully Vested and subject to the limitations of Article
V(F), made to the Trust for such Plan Year in which event they
shall be treated in the same manner and be subject to the same
conditions as additional matching contributions to the Trust
under this subparagraph (b). Matching Company Contributions which
are fully Vested and subject to the limitations of Article V(F),
and contributions made or transferred to separate accounts
pursuant to this subparagraph (b) are referred to in this
Agreement as "Qualified Matching Contributions".
(c) The Committee may direct the Trustee to distribute to
Participants who are Highly Compensated Employees that portion of
the Elective Contributions made to the Trust on their behalf for
such Plan Year which exceeds the special limitations of Article
IV(E) (in this Agreement called "Excess Contributions") adjusted
for earnings or losses. Any Excess Contributions, as so adjusted,
to be distributed to Participants shall be designated as Excess
Contributions by the Company and be distributed after the close
of the Plan Year for which they were made normally within 2-1/2
months after the end of such Plan Year, and in any event not
later than 12 months after the end of such Plan Year. (If such
Excess Contributions are distributed after 2-1/2 months after the
end of such Plan Year an excise tax is imposed on the Company
with respect to the same.)
(d) The total Excess Contributions, if any, for the Plan Year for
Participants who are Highly Compensated Employees shall be
determined and (if the Committee directs the Trustee as permitted
by (c) above) shall be distributed in accordance with the
following procedure:
(i) First, determine the dollar amount of Excess Contributions
for each Highly Compensated Employee for whom an Excess
Contribution is made for the Plan Year in the manner
described in Code Section 401(k)(8)(B) and Regulation ss.
1.401(k)-1(f)(2).
(ii) Second, determine the total amount of the Excess
Contributions described in (i) above (the "Total Excess
Contributions").
(iii) Third, reduce the Elective Contribution of the Highly
Compensated Employee with the highest dollar amount of
Elective Contribution for the Plan Year to the extent
required to either (A) reduce the Total Excess
Contributions to zero or (B) cause the Highly Compensated
Employee's Elective Contribution to equal the dollar amount
of the Elective Contribution of the Highly Compensated
Employee with the next highest dollar amount of Elective
Contributions, whichever is less. Repeat this process until
the Total Excess Contributions are reduced to zero. When
and if the Elective Contributions of two or more Highly
Compensated Employees to be reduced are the same, such
Elective Contributions shall be reduced equally and
simultaneously. The amount of any and all such reductions
for each Highly Compensated Employee for whom a reduction
is made (the "Excess Elective Contribution"), adjusted for
earnings or losses,
IV-6
shall be distributed to each such Highly Compensated
Employee in accordance with (c) above.
(iv) If the distributions referred to in (iii) above are made,
the requirements of Article IV(E) shall be treated as being
met, regardless of whether the Actual Deferral Percentage
for the group of Participants who are Highly Compensated
Employees, if recalculated after such distributions are
made, would satisfy such requirements.
(e) The income or loss allocable to an Excess Elective Contribution
distributed to a Highly Compensated Employee under (c) and (d)
above by the Trustee shall be an amount equal to the income or
loss of the Participant's Elective Contributions Account for the
Plan Year for which the Excess Elective Contribution was made
multiplied by a fraction the numerator of which is the Excess
Elective Contribution made on behalf of the Participant for such
Plan Year and the denominator of which is the Participant's
Elective Contributions Account balance as of the beginning of
such Plan Year plus the Participant's Elective Contributions for
such Plan Year.
(J) Adjustments to Prevent Excess Allocations of Matching Company Contributions.
If notwithstanding the Committee's efforts to monitor allocations to the
Accounts of Participants as required by Article IV(G)(1), the Committee
determines after the end of a Plan Year that the allocations of Matching Company
Contributions to the Matching Company Contribution Accounts of Highly
Compensated Employees for such Plan Year exceed the special limitations
described in Paragraph (F) above:
(1) The Company may make Qualified Nonelective Contributions to the Trust
for such Plan Year for allocation to separate accounts of Participants and/or
transfer Discretionary Company Contributions for such Plan Year to such separate
accounts, in the same manner and subject to the same conditions set forth in
Article IV(G)(2)(a), which in combination with the Matching Company
Contributions (and any additional matching contributions under (2) below) for
such Plan Year are sufficient to cause such special limitations not to be
exceeded. Also, to cause such special limitations not to be exceeded the Company
may transfer to separate accounts of the kind described above any Elective
Contributions made to the Trust for such Plan Year provided that Elective
Contributions for such Plan Year meet the requirements of Reg. 1.401(m)-1(b)(5).
(2) The Company may make additional matching contributions to the Trust for
such Plan Year (or prior Plan Year if the prior year testing method is used) for
allocation to the Matching Company Contributions Accounts of Participants for
whom Elective Contributions were made to the Trust for such Plan Year (or prior
Plan Year) and who are not Highly Compensated Employees in amounts which in
combination with the Matching Company Contributions (and any Qualified
Nonelective Contributions under (1) above) for such Plan Year are sufficient to
cause such special limitations not to be exceeded. Any such contributions shall
be allocated to the Matching Company Contributions Accounts of such Participants
in proportion to the Matching Company Contributions theretofore made on behalf
of each for the applicable Plan Year, and shall normally be made no later than
the end of the 12-month period following the end of the Plan Year to which the
contribution relates. Such additional matching contributions shall be subject to
the same plan rules applicable to Matching Company Contributions and shall be
treated as Matching Company Contributions for purposes of Article IV(F).
(3) The Committee may direct the Trustee to distribute to Participants who
are Highly Compensated Employees that portion of the Matching Company
Contributions made to the Trust
IV-7
on their behalf for such Plan Year which exceeds the special limitations of
Paragraph (F) of this Article IV (in this Agreement called "Excess Matching
Contributions") adjusted for earnings or losses. Any Excess Matching
Contributions, as so adjusted, to be distributed to Participants shall be
designated as Excess Matching Contributions by the Company and be distributed
after the close of the Plan Year for which they were made normally within 2 1/2
months after the end of such Plan Year, and in any event not later than 12
months after the end of such Plan Year. (If such Excess Matching Company
Contributions are distributed after 2 1/2 months after the end of such Plan Year
an excise tax is imposed on the Company with respect to the same.)
(4) The total Excess Matching Company Contributions for the Plan Year, if
any, for Participants who are Highly Compensated Employees shall be determined
and (if the Committee directs the Trustee as permitted by (3) above) shall be
distributed in accordance with the following procedure:
(i) First, determine the dollar amount of Excess Matching
Company Contributions for each Highly Compensated Employee
for whom an Excess Matching Company Contribution is made
for the Plan Year in the manner described in Code Section
401(m)(6)(C) and Regulation ss. 1.401(m)-1(e)(2).
(ii) (ii) Second, determine the total amount of the Excess
Matching Company Contributions described in (i) above (the
"Total Excess Matching Company Contributions").
(iii) Third, reduce the Matching Company Contribution of the
Highly Compensated Employee with the highest dollar amount
of Matching Company Contribution for the Plan Year to the
extent required to either (A) reduce the Total Excess
Matching Company Contributions to zero or (B) cause the
Highly Compensated Employee's Matching Company Contribution
to equal the dollar amount of the Matching Company
Contribution of the Highly Compensated Employee with the
next highest dollar amount of Matching Company
Contributions, whichever is less. Repeat this process until
the Total Excess Matching Company Contributions are reduced
to zero. When and if the Matching Company Contributions of
two or more Highly Compensated Employees to be reduced are
the same, such Matching Company Contributions shall be
reduced equally and simultaneously. The amount of any and
all such reductions for each Highly Compensated Employee
for whom a reduction is made (the "Excess Matching
Contribution"), adjusted for earnings or losses, shall be
distributed to each such Highly Compensated Employee in
accordance with (3) above.
(iv) If the distributions referred to in (iii) above are made,
the requirements of Article IV(F) shall be treated as being
met, regardless of whether the Actual Deferral Percentage
for the group of Participants who are Highly Compensated
Employees if recalculated after such distributions are
made, would satisfy such requirements.
(5) The income or loss allocable to an Excess Matching Contribution
distributed to a Highly Compensated Employee under (3) and (4) above by the
Trustee shall be an amount equal to the income or loss of the Participant's
Matching Company Contributions Account for the Plan Year for which the Excess
Matching Contribution was made multiplied by a fraction the numerator of which
is the Excess Matching Contribution made on behalf of the Participant for
IV-8
such Plan Year and the denominator of which is the Participant's Matching
Company Contributions Account balance as of the beginning of such Plan Year plus
the Matching Company Contributions made on behalf of the Participant for the
Plan Year.
Instead of directing the Trustee to distribute any Excess Matching Company
Contributions for the Plan Year to Participants who are Highly Compensated
Employees, the Committee may direct the Trustee to allocate such Excess Matching
Company Contributions, adjusted for income or loss and determined and allocated
as provided in (3) through (5) above, to the Matching Company Contribution
Accounts of Participants who are not Highly Compensated Employees and for whom
Elective Contributions were made to the Trust for the Plan Year. Such Excess
Matching Company Contributions as so adjusted shall be allocated among such
accounts in the ratio which each such Participant's Creditable Compensation for
the Plan Year bears to the Creditable Compensation of all such Participants for
the Plan Year. Any Matching Company Contribution for the Plan Year made to the
Trust on account of an Elective Contribution which is determined to be an Excess
Elective Deferral under Article III(B) or an Excess Contribution under Article
IV(E) and (G) or (I) shall, after adjustment for income or loss, be allocated
among the Matching Company Contribution Accounts of such participants in the
same manner.
(K) [Reserved]
(L) Adjustments to Prevent Multiple Use of Alternative Limitation.
If multiple use of the alternative limitations described in Articles
IV(E)(2) and IV(F)(2), as defined by Regulation 1.401(m)-2, shall occur, such
multiple use shall be corrected by reducing the Actual Deferral Percentage of
the group of Highly Compensated Employees in the manner described in Article
IV(G)(2)(d) and (e). In determining whether multiple use of such alternative
limitations has occurred the applicable Actual Deferral Percentages and Actual
Contribution Percentages shall be determined after all adjustments made under
Article IV(G) and (H). The required reduction shall be treated as an Excess
Contribution and shall be allocated and distributed in the same manner described
in Article IV(G)(2)(c), (d) and (e).
If Excess Elective Contributions and Excess Matching Contributions, if any,
have been distributed to one or more Highly Compensated Employees under Article
IV(G)(2)(c) and (d) and Article IV(H)(3) and (4), the Actual Deferral
Percentages and Actual Contribution Percentages referred to in the preceding
paragraph shall be deemed to be the highest percentages permitted under Code
Sections 401(k)(3) and 401(m)(2), respectively.
(M) Establishment and Objectives of Investment Funds.
The Company Contributions allocated for each Plan Year to Accounts of
Participants for such Plan Year as provided in Paragraphs (A), (B) and (C) of
this Article IV, shall be received by the Trustee to be held and administered by
it in accordance with the terms of this Agreement. Within the context of the
Trust Fund, the Trustee at the direction of the Committee shall establish one or
more Investment Funds having such investment objectives as may be ascribed to
each such fund by the Committee. Such Investment Funds may consist of the
Trust's investment in (i) one or more pooled funds established by the Trustee,
if it is a bank or trust company, for the investment of the assets of tax
qualified pension and/or profit-sharing plans, (ii) one or more mutual funds,
(iii) one or more contracts issued by an insurance company, and/or in (iv) any
other investment vehicle suitable for the investment of assets of the Trust Fund
and designated by the Committee.
The Committee shall provide information to Participants regarding the
Investment Funds available under the Plan, including a description of the
investment objectives and types of investments of each such Investment Fund. If
a prospectus is required to be issued with respect to
IV-9
any such Investment Fund, the Committee will inform Participants of the
availability of such prospectus or, if required by law, arrange to furnish a
copy of the prospectus to each Participant.
(N) Investment of Company Contributions.
As of each day of the Plan Year for which the Trustee receives financial
markets pricing data, each Participant shall have the right to designate on an
investment election form furnished by the Committee in accordance with
procedures established by the Committee how Company Contributions thereafter
made to the Trust on his behalf are to be allocated among the Investment Funds.
The Committee shall either furnish such investment election forms to the Trustee
or shall compile the results of such elections and direct the Trustee how such
contributions for each Participant are to be allocated among such Investment
Funds. The Trustee shall as soon as reasonably possible after receipt of each
Company Contribution made by the Company to the Trust, and not less frequently
than monthly, allocate such contribution among the Investment Funds in
accordance with such investment elections or instructions. Until a new
investment election or instruction for any Participant is received by the
Trustee, the Trustee shall continue to invest Company Contributions made for
such Participant in the manner designated on the most recently received
investment election or instruction relating to such Participant. If the Trustee
shall receive a Company Contribution for a Participant for whom it has not
received any investment election or instruction, the Trustee shall invest such
contribution in the Investment Fund which most nearly fits the description of a
short-term fixed income fund.
(O) Participant's Rights to Periodic Reallocation of Accounts.
As of each day of the Plan Year for which the Trustee receives financial
markets pricing data, each Participant shall be entitled to direct the Trustee
in accordance with procedures established by the Committee to reallocate all or
a portion of his Accounts so that, as of the date of such reallocation,
specified percentages (in multiples to be designated by the Committee) of his
Accounts shall be invested in one or more of the Investment Funds. Upon receipt
of timely instructions from the Committee (which shall be consistent with the
directions of Participants desiring allocation or reallocation) the Trustee
shall, not later than the month end following receipt of such instructions,
invest or reinvest such portions of the Accounts of Participants thus directing
allocation or reallocation as will (immediately following such investment or
reinvestment) result in the Accounts of each such Participant being invested in
the Investment Funds substantially in accordance with the directions of each
such Participant. However, no transfers between Investment Funds shall be
permitted if prohibited by the rules applicable to the particular Investment
Fund from or to which a transfer is to be made or by rules adopted by the
Committee and communicated to the Participants.
(P) Participants' Credit Accounts.
The Trustee shall establish and maintain one or more Credit Accounts for
each Participant, showing the balance of each of his Accounts in each of the
Investment Funds, and for such other purposes as may be useful in the
administration of the Trust under this Agreement, and shall cause to be
furnished to each Participant at least annually a statement of the Credit
Accounts. The fact that Credit Accounts are established and maintained shall not
be construed to mean under any circumstances or event that any Participant has
title to any specific asset held in trust hereunder.
IV-10
(Q) Periodic Revaluation of Investment Funds.
As of each Valuation Date the Trustee shall determine as provided in
Article IX(H) (Appraisal), or shall cause the organization(s) holding the assets
of a particular Investment Fund, such as an insurance company or mutual fund, to
determine the net earnings or the net loss of each Investment Fund including net
capital gains or losses, if any, for the period ending on such date or since the
previous Valuation Date, and shall revalue, or cause to be revalued, each
Investment Fund so as to reflect the increase or decrease in the value of the
investments of each Investment Fund as compared to the value of such investments
as of the previous Valuation Date. To the extent an Investment Fund is invested
in shares or units of participation in a mutual fund or pooled fund maintained
by the Trustee, such shares or units of participation shall be valued in the
manner they are normally valued by the mutual fund or pooled fund. To the extent
an Investment Fund is invested in an annuity or deposit administration contract,
including a guaranteed income contract or similar contract issued by an
insurance company, it shall be valued in the manner such contract is normally
valued by the insurance company.
(R) Periodic Adjustments to Accounts.
Adjustments shall from time to time be made to each Participant's Accounts
as follows:
(1) The Trustee shall debit such Accounts currently in respect of any
distributions of benefits therefrom.
(2) Promptly following each revaluation of an Investment Fund pursuant to
Paragraph (N) above, the Trustee shall allocate, or shall cause to be allocated,
to each such Account invested in such Investment Fund a portion of the net
earnings or net loss of such Investment Fund, including appreciation or
depreciation in the value of the assets of such fund, such portion being
determined by applying to such net earnings or loss the ratio which the balance
of each Account in such fund on the immediately preceding Valuation Date bears
to the total of the balances of all Accounts in such fund on such Valuation
Date, but taking into account in a manner determined to be equitable by the
Trustee (with the consent of the Committee) any Company Contributions to, or
distributions from, such Accounts since the immediately preceding Valuation
Date. Notwithstanding the foregoing, the Trustee may allocate, or cause to be
allocated, to each such Account invested in such Investment Fund a portion of
the net earnings or net loss of such Investment Fund, periodically and not less
frequently than quarterly, on any other basis which in the Trustee's judgment is
fair and equitable to Participants and which is based in substance on the sizes
of the Accounts invested in such Investment Fund over the period during which
such net earnings or net loss in value occurs; provided the Committee consents
to such other basis of allocation.
(3) As of each Anniversary Date, the Trustee shall credit each
Discretionary Company Contributions Account in the same proportion as
Discretionary Company Contributions are to be credited under Paragraph (A)
above, with respect to any forfeitures occurring or becoming final, as the case
may be, since the previous Anniversary Date, as provided in Paragraph (Q) below
(Forfeitures).
(4) Notwithstanding (2) above, any portion of a Participant's Discretionary
Company Contributions Account which is "segregated" pursuant to Article IX(O)
shall be excluded from the calculation described in (2) above but shall
nevertheless remain as part of such Participant's Discretionary Company
Contributions Account.
(5) Expenses and compensation of the Trustee and Committee may be charged
to the Accounts of Participants as provided in Article XI(P).
IV-11
(S) Fixed Accounts.
Upon the termination of a Participant's employment with the Company,
whether due to his retirement, death, disability or other cause whatsoever, he
shall cease to be a Participant for purposes of Article III and, except for
benefits payable or distributable under this Agreement, shall cease to have any
further right, title or interest in the Plan and Trust; provided, further, that
- -
(1) Such Participant's Accounts, except to the extent his Discretionary
Company Contributions Account and/or his Matching Company Contributions Account
may be forfeited, shall become fixed and Vested at their balances as of the
close of the Valuation Date coinciding with or next following the date of such
termination. "Valuation Date" with respect to a Participant's most recent day
prior to a distribution for which the Trustee has received financial markets
pricing data. Otherwise, subject to Article IV(R), if such termination shall be
by reason of his death, disability, attainment of Normal Retirement Age or shall
occur subsequent to his completion of at least one Hour of Service in the Plan
Year of termination, his Discretionary Company Contributions Account shall
participate in the allocation of Company contributions and forfeitures under
Paragraphs (A) and (R)(3) above as of the Anniversary Date coinciding with or
next following his termination to the same extent as if he were still a
Participant. At the election of the Participant, payment, or the start of
payments, of the Participant's entire Vested Account under Article V may be
deferred until after any Discretionary Company Contribution allocable to his
Discretionary Company Contributions Account for the Plan Year of termination is
made, or the portion of such Vested Accounts not including such Discretionary
Company Contribution may be paid or may start as soon as administratively
feasible after the applicable Valuation Date, and such Discretionary Company
Contribution may be paid, or payments of the same may start, as soon as
administratively feasible after it is made to the Trust. Notwithstanding the
foregoing, if the Valuation Date described above is subsequent to the
Participant's Required Beginning Date then such Valuation Date shall be the
Valuation Date immediately preceding the Participant's Required Beginning Date.
(2) In determining the balance of any Account under (1) above, there shall
be included any Company Contributions and other items which have been or should
be credited or debited to such Account as of the Valuation Date or prior
thereto. Thereafter, no further credits or debits shall be made to said Account,
except as provided in (1) above and except for:
(a) Distributions therefrom,
(b) Special expenses chargeable thereto under Article XI(P)(2)(b),
(c) Matters mentioned in Subparagraphs (3) and (4) below, and
(d) Any Elective Contributions and Matching Company Contributions
made to the Trust with respect to the Participant after the
Valuation Date.
(3) If prior to the termination of the Participant's employment the Trustee
was investing any of his Accounts in accordance with the Participant's
instructions, the Trustee shall continue to invest such Accounts in accordance
with such instructions for as long as administratively feasible prior to the
time such Accounts are paid to the Participant. Any vested Account not being
invested in accordance with the Participant's instructions and not required to
be paid to the Participant as soon as administratively feasible after its amount
is determined, e.g., if payment of such Vested Account is deferred until the
Participant's Normal Retirement Date, shall continue to be credited or debited
with is allocable share of the profits or losses of the Trust Fund, or of the
separate Investment Funds in which it is invested, (after subtracting any
Trustee fees and expenses of the Trustee and Committee chargeable to such Fund)
according to such reasonable and uniform practice as the Trustee shall adopt or
the Committee shall direct.
IV-12
(T) Forfeitures.
With respect to all or part of a Participant's Discretionary Company
Contributions Account and Matching Company Contributions Account which are
subject to forfeiture under Article V(C) below (Early Retirement; Vesting
Schedule) -
(1) If the Participant elects under Article V(A)(1) and (C) to receive the
Vested part of his Discretionary Company Contribution Account, if any, in a Lump
Sum as promptly as possible after the termination of his employment and such
forfeiture is not contested, on the last day of the Plan Year in which the
Participant's employment terminates the forfeited part of his Discretionary
Company Contributions Account shall become final and be credited to other
Discretionary Company Contributions Accounts, as provided by Article IV(O)(3)
above (Periodic Adjustments to Accounts). If the Participant is not Vested in
any part of his Discretionary Company Contributions Account, he shall be deemed
to have elected to receive the Vested part of such Account, namely zero, in the
manner provided above.
(2) If the Participant elects under Article V(A)(2) and (C) to receive the
Vested part of his Accounts, if any, in any form permitted by the Plan other
than a Lump Sum, on the last day of the Plan Year in which the Participant
receives the payment of a portion of the Vested part of his Discretionary
Company Contributions Account, part of the nonvested portion of such account
shall be treated as forfeited and shall be credited to other Discretionary
Company Contributions Accounts as provided in (1) above. Such part shall be the
total nonvested portion of the Participant's Discretionary Company Contributions
Account multiplied by a fraction, the numerator of which is the amount received
by the Participant from his Discretionary Company Contributions Account in the
Plan Year and the denominator of which is the Participant's Vested Discretionary
Company Contributions Account balance as of the last day of the previous Plan
Year; provided, however, that if the Participant incurs five consecutive
One-Year Breaks in Service the remaining nonvested portion of the Participant's
Discretionary Company Contributions Account shall be forfeited and allocated to
other Discretionary Company Contributions Accounts as of the last day of the
Plan Year in which the fifth consecutive One-Year Break in Service occurs.
(3) In the event (2) above applies, or if such forfeiture is contested, it
shall be held in suspense and, while so held, shall be subject to debits and
credits under Paragraph (G) above in the same manner as an active Participant's
Discretionary Company Contributions Account, except that Discretionary Company
Contributions and other forfeitures shall not be credited thereto. Later, when
its status is finalized, it shall (adjusted by debits and credits as aforesaid)
either be paid to the terminated Participant to the extent successfully
contested by him or credited to other Discretionary Company Contributions
Accounts as provided by (1) and(2) above.
(4) Matching Company Contributions forfeited under Article V(C) shall be
treated in the same manner as forfeited Discretionary Company Contributions
under (1) through (3) above as if the terms Matching Company Contributions and
Matching Company Contributions Accounts were substituted for the terms
Discretionary Company Contributions and Discretionary Company Contributions
Accounts, except that instead of allocating such forfeited Matching Company
Contributions to the Matching Company Contribution Accounts of other
Participants such forfeited amounts shall be applied to reduce Matching Company
Contributions otherwise required to be made to the Trust for the Plan Year in
which the forfeiture occurred or for the next following Plan Year or Plan Years
and pending such application shall be held in a suspense account in the Trust.
IV-13
(U) Additional Participant Allocations.
If for any Plan Year the Plan would otherwise fail to meet the requirements
of Code Section 410(b)(1)(B) and the Regulations thereunder because the
Company's Discretionary Company Contribution has not been allocated to a
sufficient percentage of Employees who are not Highly Compensated Employees for
the Plan Year, then the following rules shall apply:
(1) Subject to (3), (4) and (5) below, the group of Participants eligible
to share in the Company's Discretionary Company Contribution and forfeitures, if
any, for the Plan Year shall be expanded to include the minimum number of
additional non-Highly Compensated Employees who would not otherwise be eligible
as are necessary to satisfy the test specified above. The specific additional
non-Highly Compensated Employees who shall become eligible to share under this
subparagraph shall be those who are actively employed on the last day of the
Plan Year and, when compared to similarly situated non-Highly Compensated
Employees, have completed the greatest number of Hours of Service in the Plan
Year.
(2) Subject to (3), (4) and (5) below, if after application of subparagraph
(1) above, the applicable test is still not satisfied, then the group of
Participants eligible to share in the Company's Discretionary Company
Contribution and forfeitures, if any, for the Plan Year shall be further
expanded to include the minimum number of additional non-Highly Compensated
Employees who are not actively employed on the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific additional non-Highly
Compensated Employees who shall become eligible to share under this subparagraph
shall be those non-Highly Compensated Employees, when compared to similarly
situated non-Highly Compensated Employees, who have completed the greatest
number of Hours of Service in excess of 500 in the Plan Year before terminating
employment.
(3) The only Employees eligible to share in the Company's Discretionary
Company Contribution and forfeitures, if any, for the Plan Year under this
Paragraph (R) shall be non-Highly Compensated Employees who were Participants as
of either Entry Date falling within the Plan Year but who either failed to
complete the number of Hours of Service required under Article IV(P)(1) to share
in the Company's Discretionary Company Contribution and any forfeitures for the
Plan Year or failed to be actively employed by the Company on the last day of
the Plan Year.
(4) Nothing in this Paragraph (R) shall permit the reduction of a
Participant's Accrued Benefit. Therefore any amounts that have previously been
allocated to Participants may not be reallocated to satisfy these requirements.
In such event, the Company shall make an additional Discretionary Company
Contribution equal to the allocations such additional non-Highly Compensated
Employees would have received had they initially been eligible for allocations,
even if such contribution exceeds the amount which would be deductible under
Code Section 404. Any adjustment to the allocations pursuant to this Paragraph
(R) shall be considered a retroactive amendment effective in the Plan Year and
adopted within the time permitted by Code Section 401(b).
(5) Any corrective action for a Plan Year required to be taken by (1), (2),
(3) and/or (4) above must be taken on or before the 15th day of the 10th month
after the close of such Plan Year.
IV-14
Article V. Retirement Benefits and Vesting
(A) Normal Retirement.
(1) A Participant may retire from the employment of the Company at his
Normal Retirement Date, whereupon the Trustee, subject to Article VIIA(A)
(providing that benefits payable to a Participant who elects under (3) below to
receive his benefits under the Plan in the form of a life annuity shall be paid
in the Qualified Joint and Survivor Annuity form unless the Participant elects,
with the consent of his spouse if he is married, to waive such form of payment
in the manner and subject to the conditions imposed by Article VIIA(C)), shall
as promptly as possible arrange to make benefits available to the Participant in
a Lump Sum. Subject to (2) below, the payment of such Lump Sum shall be made not
less than 30 days and not more than 90 days after receipt by the Participant of
such written notice from the Committee.
(2) If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may be made, or may commence, less than 30
days after the notice required under Section 1.411(a)-11(c) of the Regulations
is given, provided that:
(a) the Committee clearly informs the Participant that the
Participant has a right for a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option), and
(b) the Participant, after receiving the notice, affirmatively elects
a distribution.
(3) If the Participant shall so specify in a written election delivered to
the Committee not later than 30 days after the later of (i) his retirement or
(ii) the Valuation Date as if which his account balance is to be determined
under Article IV(C)(1), his Vested account balance shall be applied to purchase
an annuity from an Insurer providing such Participant with an annuity for the
Participant's life.
(4) The Participant's Fixed Account payable under (1), (2) or (3) above
shall be fully Vested and nonforfeitable.
Notwithstanding the foregoing, a Participant's Normal Retirement Date under
the Plan shall not be construed as a mandatory retirement date.
(B) Late Retirement.
If a Participant shall continue in the Company's employ beyond his Normal
Retirement Date (in which event he shall remain a Participant in the Plan for
all purposes), no retirement benefits shall be payable to him under this
Agreement until his actual retirement, at which time the same steps shall be
taken as in the case of normal retirement, provided that in no event shall such
benefits be paid or commence to be paid later than the Required Beginning Date
or other deadline specified in Article V(D).
(C) Early Retirement; Vesting Schedule for Discretionary Company Contributions
and Matching Company Contributions; Full Vesting of Elective Contributions and
Matching Company Contributions.
Upon retirement of a Participant prior to his Normal Retirement Date, the
Trustee shall as promptly as possible (but subject to Article V(E)) arrange to
make benefits available to the Participant (except as otherwise provided in
Article X(A) and in Article XII) in the same manner and form as at normal
retirement; provided, however, that -
V-1
(1) Such Participant shall be entitled only to a percentage of the balance
in his Discretionary Company Contributions Account and the balance in his
Matching Company Contributions Account based upon the number of his Years of
Service, as follows:
Years of Service Percentage Vesting
less than 2 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
(2) In computing a Participant's period of service for purposes of (1)
above, he shall be credited with one Year of Service for each Plan Year, i.e.,
the vesting Computation Period, during which he has completed at least 1,000
Hours of Service with the Company (regardless of whether or not he was a
Participant at such time) except that the following shall not be counted:
(a) For purposes of determining his Vested percentage in such account
following a break in service, Years of Service during vesting
Computation Periods prior to a One-Year Break in Service shall
not be counted unless and until the Employee completes 1,000
Hours of Service during the 12 consecutive month period beginning
on the date he first completes one Hour of Service (his
"Re-employment Commencement Date") or during any subsequent 12
consecutive month period beginning on an anniversary of his
Re-employment Commencement Date;
(b) In the case of a Participant or other Employee who does not have
a Vested right to an Accrued Benefit derived from Discretionary
Company Contributions and Matching Company Contributions, i.e.,
who is not Vested in any part of his account balance under the
Plan derived from Discretionary Company Contributions and
Matching Company Contributions, Years of Service prior to a
period of consecutive One-Year Breaks in Service shall not be
counted if the number of consecutive One-Year Breaks in Service
in such period equals or exceeds five (excluding from the number
of Years of Service before such period any Years of Service not
required to be counted hereunder by reason of any prior break in
service);
(c) Years of Service during any period for which the Company did not
maintain the Plan or a predecessor plan (within the meaning of
Section 411(a)(4)(C) of the Code);
(d) Years of Service before age 18 if permitted by Section
411(a)(4)(A) of the Code, but not the Year of Service during
which age 18 was attained;
provided, further, that Years of Service after five or more consecutive One-Year
Breaks in Service shall not be counted for purposes of determining the Vested
percentage under (1) above of the Participant's Accrued Benefit derived from
Discretionary Company Contributions and Matching Company Contributions which
accrued before such five or more consecutive One-Year Breaks in Service.
(3) If a Participant's eligibility Computation Period overlaps two vesting
Computation Periods and he completed 1,000 Hours of Service during such
eligibility Computation Period but failed to complete 1,000 Hours of Service in
either of the overlapped vesting Computation Periods, then the Year of Service
completed for eligibility to participate shall be deemed a Year
V-2
of Service for the vesting Computation Period during which such eligibility
Computation Period ended.
(4) The portion of such Participant's Discretionary Company Contributions
Account to which he is not entitled under (1) above, if any, shall be forfeited
and allocated among the other Participants' Discretionary Company Contributions
Accounts pursuant to Article IV(Q) (Forfeitures). The portion of such
Participant's Matching Company Contribution Account to which he is not entitled
under (1) above, if any, shall be forfeited and applied to reduce Matching
Company Contributions pursuant to Article IV(Q)(4). If, following a distribution
of the Vested portion of a partially Vested Participant's Account, he is
reemployed by the Company in circumstances where he has not sustained five
consecutive One-Year Breaks in Service, then, following such re-employment, the
portion of the Participant's Account which was forfeited will be restored to its
amount on the date of distribution if the Participant repays to the Trust the
full amount of the distribution attributable to Discretionary Company
Contributions and Matching Company Contributions before the earlier of 5 years
after the first date on which the Participant is re-employed by the Company, or
the date the Participant incurs 5 consecutive One-Year Breaks in Service
following the date of the distribution. If a Participant who was not Vested in
any part of his Discretionary Company Contributions Account or Matching Company
Contributions Account was deemed to have received a distribution pursuant to
Article IV(Q)(1) or Article IV(Q)(4), and the Participant is re-employed by the
Company in circumstances where he has not sustained five consecutive One-Year
Breaks in Service, upon the reemployment of such Participant, the forfeited
Account balances of the Participant will be restored to their amounts on the
date of such deemed distribution. The funds to be used to restore such accounts
shall first be obtained out of forfeitures, if any, and next out of Company
contributions to the Trust, for such Plan Year or succeeding Plan Years.
(5) Notwithstanding the foregoing provisions, a Participant's Discretionary
Company Contributions Account and his Matching Company Contributions Account
shall be fully Vested at his Normal Retirement Age.
(6) A Participant's Elective Contributions Account shall at all times be
fully and immediately Vested.
(D) Deadline for Payment of Benefits; Required Beginning Date.
The following deadlines shall apply to the payment, or commencement of
payment, of any benefits under the Plan:
(1) Unless the Participant shall otherwise elect, the payment of benefits
under the Plan to the Participant shall begin not later than the 60th day after
the close of the Plan Year in which occurs the latest of the following:
(a) The date on which he attains the earlier of age 65 or Normal
Retirement Age;
(b) The tenth anniversary of the year in which he commenced
participation in the Plan; or
(c) The termination of his service with the Company.
If the Participant under another provision of this Agreement may elect to defer
the payment, or commencement of payment, of benefits under the Plan beyond the
latest of the foregoing dates, such election shall be subject to (2) below and
to the distribution rules of Article V(A), must be submitted to the Committee in
writing, signed by the Participant, and must describe the benefit and the date
on which payment of such benefit shall be made or shall commence.
V-3
(2) Any benefits payable under the Plan to a Participant shall be paid, or
shall begin to be paid, not later than April 1 of the calendar year following
the calendar year in which (i) the Participant attains age 70-1/2 or (ii) the
Participant's employment terminates, whichever is later, except in the case of a
Participant who is a 5-percent owner (as defined in Code Section 416), clause
(ii) above shall not apply. A Participant who attained age 70-1/2 in 1996 and
who did not retire from employment with the Company by the end of 1996 may elect
by December 31, 1997 to defer payment or the commencement of payments of the
benefits required under the terms of the Plan in existence in 1996 to be paid,
or to commence, between August 20, 1996 and December 31, 1997 until no later
than April 1 following the calendar year in which the Participant retires from
employment with the Company. In the Plan the date by which any such benefits
must be paid, or begin to be paid, as specified above in this paragraph, is
called the "Required Beginning Date". A Participant who is not a 5-percent owner
and who attains age 70-1/2 in or after the calendar year 1997 shall not be
entitled to receive, or commence to receive, benefits under Article V(B) of the
Plan prior to retirement. Such a Participant who retires after the calendar year
in which he attains age 70-1/2 shall be entitled to receive his benefits under
the Plan in any of the same optional forms (except for the difference in the
timing of the payment or commencement of payments of his benefits) that would
have been available had the Participant retired in the calendar year in which he
attained age 70-1/2.
(E) Cash-Outs.
Notwithstanding anything in any other section of this Article V, Article VI
or Article VIIA to the contrary, if at the time of a Participant's death or
other termination of employment occurring in any Plan Year beginning after
August 5, 1997, the present value of any Accrued Benefit payable to or with
respect to him under the Plan, i.e., the Vested portion of his Fixed Account
derived from Company contributions plus his account, if any, derived from
nondeductible employee contributions made by him to the Trust, does not exceed
$5,000 (or if such Accrued Benefit is paid before March 22, 1999 it does not
exceed, or at the time of any prior distribution did not exceed, $5,000) such
benefit shall be paid to his Beneficiary or to him in a Lump Sum. If a
Participant's employment terminates in any Plan Year beginning after August 5,
1997, before his Normal Retirement Date for any reason other than his death and
such Accrued Benefit exceeds $5,000 (or if such Accrued Benefit is paid before
March 22, 1999 it exceeds, or at the time of any prior distribution exceeded,
$5,000) the Participant shall have the right to elect in writing delivered to
the Committee to defer payment of such Accrued Benefit (subject to adjustment
for profits or losses and fees and expenses as provided in Article IV(C)(3) and
(5)) to the Participant's Normal Retirement Date. Notice of the Participant's
right to so defer payment of his Accrued Benefit shall be given to the
Participant at the same time and in the same manner as the explanation of the
Qualified Joint and Survivor Annuity form of benefits required to be given to
the Participant under Articles V(C) and VII(C)(2). The failure of such a
Participant to elect (with the consent of his spouse if he is married) either a
Lump Sum or installments as permitted by Article V(C) and Article V(A)(1) and
(2), or to consent to an immediate Qualified Joint and Survivor Annuity, shall
be deemed an election by the Participant to defer payment of any such Accrued
Benefit to his Normal Retirement Date as provided above. If payment of the
Participant's Accrued Benefit is so deferred, such Accrued Benefit shall be paid
to the Participant as soon as administratively feasible in the Qualified Joint
and Survivor Annuity form or in a Lump Sum if elected by the Participant (with
the consent of his spouse if he is married), after the Valuation Date coinciding
with or next following the earlier of (i) the Participant's Normal Retirement
Date or (ii) receipt by the Committee of the Participant's written election to
receive a distribution from the Plan prior to his Normal Retirement Date.
Terminations of employment occurring in any Plan Year beginning prior to the
date specified above in this paragraph shall be governed by the provisions of
this paragraph then in effect.
V-4
Notwithstanding the foregoing provisions of this section, if an annuity is
payable with respect to a Participant under Article VIIA, after the annuity
starting date (as defined in Article VIIA(A)(1)) the consent of the Participant,
and the Participant's spouse if the Participant is married, shall be required
for the immediate distribution of the present value of the Participant's Accrued
Benefit being distributed in any form, including a qualified joint and survivor
annuity or qualified preretirement survivor annuity, regardless of the amount of
such present value.
(F) Limitations on Payment of Benefits Derived from Elective Contributions and
Matching Company Contributions.
In no event shall any distribution from a Participant's account which is
attributable to Elective Contributions or Matching Company Contributions (other
than a hardship distribution under Article VI(E)) be made earlier than: (1) the
Participant's retirement, death, disability, separation from service, or
attainment of age 59-1/2; (2) the termination of the Plan and Trust pursuant to
Article X without establishment of a successor plan; (3) the date of sale by the
Company of substantially all of its assets to a corporation in whose employment
the Participant continues; or (4) the date of sale by the Company of a
subsidiary in whose employment the Participant continues.
(G) Termination of Employment by Reason of Dissolution.
Subject to Paragraph (F) above, if a Participant's employment shall
terminate by reason of complete or partial liquidation or dissolution of the
Company, then such Participant shall be deemed to have retired under Article
V(A), (B) or (C), as the case may be, except that, for purposes of said
Paragraph (C) (Early Retirement; etc.), his percentage Vesting in his
Discretionary Company Contributions Account and his Matching Company
Contributions Account shall be 100%.
(H) Termination of Employment in Other Circumstances.
Subject to Paragraph (F) above, if a Participant's employment shall
terminate for any reason not covered by Article V(G) (Dissolution) or Article
VI(A) (Death, etc.) or (D) (Disability), he shall be deemed to have retired and
shall be entitled to only such benefits as are provided by Article V(A), (B) or
(C), as the case may be.
(I) Temporary Absences.
With regard to temporary absences, it is agreed as follows:
(1) If the Participant or other Employee shall be absent from active
employment with the Company without pay for a period not exceeding one year on
account of (i) illness, (ii) mental or physical disability, (iii) leave of
absence granted by the Company in accordance with uniform and nondiscriminatory
rules so that all employees in similar circumstances are treated alike, or (iv)
temporary layoff (an "Unpaid Absence"), his employment with the Company or
participation in the Plan, as the case may be, shall not be deemed to have
terminated solely on account of such Unpaid Absence and during such Unpaid
Absence he shall be provisionally credited with Hours of Service at the same
weekly rate (not exceeding 40 hours per week) he was being credited with Hours
of Service at the time such Unpaid Absence commenced; provided, however, that
the maximum number of Hours of Service required to be credited under this
paragraph (1) on account of any single continuous period of Unpaid Absence is
501 less the number of Hours of Service, if any, required to be credited under
Article I(A)(23)(b) on account of a single continuous period of paid illness,
incapacity (including disability), leave of absence or layoff, which immediately
precedes the Unpaid Absence, provided, further, that if he does not resume
active employment
V-5
within thirty (30) days from the expiration of such illness, disability, or
leave of absence, or if he fails promptly to report for work upon being recalled
from such layoff, his employment or participation, as the case may be, shall be
deemed to have terminated on the date when such Unpaid Absence commenced, and he
shall not be credited with any Hours of Service on account of such Unpaid
Absence, provided, further, that his Valuation Date shall be the Valuation Date
coinciding with or preceding the expiration of such thirty (30) day period.
(2) If the Participant or other Employee shall leave the active employment
of the Company for the purpose of becoming (and thereupon becomes) a member of
the Armed Forces of the United States, his employment with the Company or
participation in the Plan, as the case may be, shall not be deemed to have
terminated solely on account of such absence and during such absence he shall be
credited with Hours of Service at the same weekly rate (not exceeding 40 hours
per week) he was being credited with Hours of Service at the time such absence
commenced; provided, however, that if he does not resume active employment
within ninety (90) days after his first eligibility for release or discharge
from said Armed Forces, his employment or participation, as the case may be,
shall be deemed to have terminated on the date when such absence commenced,
provided, further that his Valuation Date shall be the Valuation Date coinciding
with or preceding the expiration of such ninety (90) day period.
(3) During any period when a Participant or other Employee is not in fact
actively employed by the Company, he shall not be regarded as receiving any
Compensation except such as the Company may actually pay to him during such
period.
(4) If contributions or other credit or debit items shall be allocated to a
Participant's account due to the provisions of Subparagraph (l) above and it
shall later be determined that such Participant's employment should be deemed to
have theretofore terminated, then the Trustee upon notification thereof shall
treat such allocations as erroneous and shall reasonably endeavor to undo the
effects thereof.
(5) If the Participant timely resumes active employment (or reports for
work) as contemplated by (1) or (2) above but his resumed employment is
terminated (other than by death, permanent and total disability, normal or late
retirement, or complete or partial dissolution or liquidation of the Company)
prior to his having been in the Company's continuous employ for a period at
least equal to the lesser of (a) six (6) months or (b) the period from the
commencement of the absence in question to the resumption of his active
employment, then his employment or participation, as the case may be, shall be
deemed to have terminated on the date when such absence commenced.
(6) The foregoing provisions of this Paragraph (I) shall not prevent the
Company and the Participant or other employee in question from mutually
determining in writing that his status as an employee or Participant, as the
case may be, shall terminate (or have terminated) at any designated time, either
with or without cause.
(7) The foregoing provisions of this Paragraph (I) are subject to any
contrary requirements, more favorable to the Participant or other employee in
question, contained in Article II(B), Article II(C) or Article V(C).
(J) Qualified Military Service.
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Internal Revenue Code. This
provision is effective as of December 12, 1994.
V-6
Article VI. Other Benefits
(A) Death of Participant.
It is hereby agreed as follows:
(1) Subject to paragraph (3) below, if a Participant shall die after having
commenced to receive benefits in the Qualified Joint and Survivor form, no
benefits shall be payable under the Plan on account of his death other than the
annuity payments continued to the Participant's surviving spouse under the
Qualified Joint and Survivor Annuity form of benefits. If a fully or partially
Vested Participant shall die before benefits have commenced to be paid to him
under the Plan and the Participant shall not have elected (with the consent of
his spouse if he is married) to waive the Qualified Preretirement Survivor
Annuity form of benefits in accordance with Article VIIA(C), no benefits shall
be payable under the Plan on account of the Participant's death other than the
annuity payments payable to the Participant's surviving spouse under the
Qualified Preretirement Survivor Annuity and under a designation of Beneficiary
form effectively filed by the Participant with the Committee covering any
portion of the Participant's Fixed Account not used to purchase the Qualified
Preretirement Survivor Annuity. If a Participant shall have elected (with the
consent of his spouse if he is married) to waive the Qualified Joint and
Survivor Annuity form of benefits and shall die after having commenced to
receive benefits in installments as permitted by the Plan, any remaining
benefits payable on account of the Participant's death shall be payable as
specified by the Participant (subject to Section C(1) of this Article VI) in the
form filed by him with the Committee electing the installment method of payment.
(2) Subject to paragraph (3) below, if a Participant shall die before
benefits have commenced to be paid to him under the Plan and the Participant
shall have elected (with the consent of his spouse if he is married) to waive
the Qualified Preretirement Survivor Annuity form of benefits, or less than all
of the Participant's Fixed Account is to be used to purchase such an annuity,
the Participant's account shall be fully Vested and the Trustee shall pay the
Participant's entire Fixed Account, (reduced by any portion of the Participant's
account applied pursuant to Article VI(F)(4) to pay the balance of any loan from
the Trust to the Participant outstanding at the time of the Participant's death)
or the portion thereof which is not to be used to purchase such an annuity, to
the Participant' Beneficiary in a Lump Sum or as effectively designated in a
written Designation of Beneficiary and Method of Distribution in accordance with
Section (B) below.
(3) Notwithstanding paragraphs (1) and (2) above, upon the death of a
Participant to whom Sections (A) through (E) of Article VIIA do not apply by
reason of Article VIIA(H) (Limited Application of Annuity Provisions),
irrespective of whether his employment has theretofore terminated, the
Participant's account shall be fully Vested and the Trustee shall arrange as
promptly as possible to pay, or commence to pay, the entire balance of such
Participant's Fixed Account (reduced by any portion of the Participant's account
applied pursuant to Article VI(F)(4) to pay the balance of any loan from the
Trust to the Participant outstanding at the time of the Participant's death) to
his surviving spouse (who, subject to the following provisions of this sentence,
shall be deemed the Participant's designated Beneficiary), or if there is no
surviving spouse, or the surviving spouse has consented in writing to the
designation of another specific Beneficiary by the Participant, to the
Participant's designated Beneficiary, subject, however, to Article VI (B) and
(C) below. Any such written consent by the Participant's spouse shall
acknowledge the effect of the consent and be witnessed by a representative of
the Plan or a notary public. A representative of the Plan shall include any
member of the Committee or any other person designated by the Committee for this
purpose. No designation by a married Participant of a Beneficiary other than the
Participant's spouse or method of payment shall be
VI-1
changed without the written consent of the spouse unless the written consent of
the spouse to the first designation expressly permits further designations by
the Participant without any requirement of further consent by the spouse. No
such written consent of the spouse of a Participant need be obtained if it is
established to the satisfaction of the Committee that such spouse cannot be
located or that such other circumstances as may be described in Treasury
Regulations promulgated under Section 417(a)(2)(B) of the Code exist.
(B) Designation of Beneficiary and Method of Distribution.
Subject to Article VIIA(C) (dealing with the right to elect to waive the
Qualified Preretirement Survivor Annuity form of benefits), Article VIIA(H)
(dealing with the limited application of the annuity provisions of this
Agreement), and paragraph (C) of this Article VI (imposing certain restrictions
on distributions from the Plan on account of the death of a Participant), a
Participant shall have the right from time to time to file with the Committee a
written designation of Beneficiary and method of distribution of death benefits
(other than any benefits payable in the Qualified Preretirement Survivor Annuity
form) under the Plan, on account of the death of the Participant before he has
commenced to receive benefits payable under the Plan, which designation may from
time to time be amended or revoked. As part of such written designation the
Participant may specify that his designated Beneficiary may, after the
Participant's death, elect the method of distribution of such death benefits. In
the absence of an effective designation of method of distribution of death
benefits by the Participant at the time of his death his designated Beneficiary
shall have the right after the Participant's death to elect such method of
distribution. Any election of the method of distribution of death benefits by
the Participant's designated Beneficiary shall be made in accordance with rules
established by the Committee, shall be made not later than 60 days before the
latest date permitted for the payment, or commencement of payment, of the
Participant's interest in the Plan to the Beneficiary under Paragraph (C) of
this Article VI, and shall be subject to all of the applicable requirements of
Paragraphs (A) and (C) of this Article VI. In the event there is more than one
Beneficiary no such election shall be valid unless consented to by all
Beneficiaries. If the Beneficiary (i) is the surviving spouse of the
Participant, (ii) has the right to elect the method of distribution of death
benefits, and (iii) desires to defer payment, or commencement of payment, of
such death benefits under Paragraph (C)(2)(b) of this Article VI, such
Beneficiary must so notify the Committee within 300 days of the Participant's
death. Upon receipt of any such designation or notice, the Committee shall
inform the Trustee, who shall (subject to Paragraphs (A) and (C) of this Article
VI) in turn take any and all steps reasonably necessary to make the same
effective; provided, however, -
(1) No designation of Beneficiary, and no amendment or revocation thereof,
shall become effective if filed after such Participant's death, unless the
Committee and Trustee shall determine such designation, amendment or revocation
to be valid.
(2) Any designation by a Participant of the individual who is the
Participant's spouse at the time of the designation as the Participant's
Beneficiary automatically shall terminate and be of no effect upon the divorce
of the Participant and such individual.
(3) In the absence of an effective designation of Beneficiary, or if the
Beneficiary designated shall not survive the Participant, then said death
benefits shall be paid to the individual in (or paid in equal shares, per
stirpes and not per capita, to the individuals in) the first of the following
classes of successive preference Beneficiaries (deemed to have been designated
as such by the Participant) in which there shall be an individual surviving such
Participant:
(a) His spouse,
(b) His issue,
VI-2
(c) His parents, or
(d) His brothers and sisters and issue thereof.
(4) In determining who are "issue" for purposes of (3) above, adopted
individuals shall be treated as if they are the natural offspring of their
adoptive parents, rather than their natural parents.
(5) If any individual who would be entitled to receive death benefits
(either under (3) above or because designated by the Participant as a
Beneficiary) shall be a minor or adjudged mentally incompetent, the Committee
may in its discretion direct the Trustee to pay all or part of the death
benefits otherwise distributable in accordance with Article XI(O). If and to the
extent that there shall be no surviving Beneficiary under (3) above, or
effectively designated by the Participant, the Participant's estate shall be
deemed to be the Beneficiary.
(6) In the absence of an effective, timely designation of method of
distribution by the Participant or Beneficiary, or in the absence of an
effective, timely notice of the Beneficiary's desire to defer the payment or
commencement of payment of the Participant's Fixed Account under Paragraph
(C)(2)(b) of this Article VI, the balance of such deceased Participant's Fixed
Account (other than the portion thereof, if any, used to purchase a Qualified
Preretirement Survivor Annuity) shall be paid in a Lump Sum.
(C) Required Distributions.
Upon the death of a Participant the following restrictions shall apply to
the distribution of that portion of his account which is not used to purchase a
Qualified Joint and Survivor Annuity or Preretirement Survivor Annuity, such
portion being in this Paragraph (C) called the Participant's "interest" or
"entire interest":
(1) If the Participant dies after starting to receive benefits but before
his entire interest under the Plan has been distributed to him, the remaining
portion of such interest must be distributed at least as rapidly as under the
method of distribution selected by the Participant in effect at the date of his
death.
(2) If the Participant dies before receiving any of his interest under the
Plan, his entire interest shall be distributed to his Beneficiary by December 31
of the calendar year in which the fifth anniversary of the Participant's death
falls, with the following exceptions:
(a) If any portion of such interest is payable to or for the benefit
of a designated Beneficiary, such portion shall be distributed in
accordance with applicable Treasury Regulations over a period not
extending beyond the life expectancy of such Beneficiary. The
payments to such Beneficiary shall begin not later than December
31 of the calendar year after the calendar year of such
Participant's death.
(b) If the Participant's surviving spouse is the designated or deemed
Beneficiary then payments to such spouse shall begin not later
than December 31 of the calendar year in which the Participant
would have attained age 70-1/2 or by the date specified in (a)
above, whichever is later. If such surviving spouse dies before
payments have begun to be made to such spouse, then payments to
the Person or Persons entitled to the same shall be subject to
the distribution restrictions under this subparagraph (2) which
would have applied had the spouse been an unmarried Participant.
(c) The amount required to be distributed under (a) and (b) above for
each calendar year, beginning with the distribution for the first
calendar year for
VI-3
which a minimum distribution is required must be at least equal
to the quotient obtained by dividing the Participant's interest
in the Plan by the life expectancy of the Beneficiary. The
Participant's interest in the Plan for purposes of this
subparagraph (c) shall be the Participant's account balance as of
the last Valuation Date in the calendar year immediately
preceding the first calendar year for which the distribution is
required, adjusted as provided in Treasury Regulations for
allocations of contributions, forfeitures and distributions, if
any, after such Valuation Date.
(d) For purposes of subparagraphs (a) and (c) above, life expectancy
shall be computed by use of the return multiples included in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations.
For purposes of subparagraphs (a) and (c) above, the life
expectancy of the Participant's spouse may be recalculated
annually, but the life expectancy of a Beneficiary other than the
Participant's spouse may not be recalculated.
(3) Subject to applicable Regulations, for purposes of (1) and (2) above
any amount paid to a child of the Participant shall be treated as if it had been
paid to the surviving spouse of the Participant if such amount will become
payable to the surviving spouse upon such child reaching the age of majority (or
other designated event permitted under applicable Regulations).
(4) If, prior to January 1, 1984, such Participant had made a valid,
unrevoked, written designation pursuant to Section 242(b) of the Tax Equity and
Fiscal Responsibility Act of 1982 as in effect prior to amendments made by the
Tax Reform Act of 1984, then distributions to such Participant and his
Beneficiary shall be made according to such designation which shall be binding
on the Committee, notwithstanding any other provision of this Agreement.
(5) Subject to Article VI(C)(4) above, but not withstanding any other
provision of this Agreement to the contrary, all distributions under the Plan
shall be made in accordance with Section 401(a)(9) of the Code and the
Regulations thereunder, including but not limited to Regulation Section
1.401(a)(9)-2.
(D) Disability.
If, notwithstanding Article V(H) (Temporary Absences), a Participant's
employment shall terminate on account of his disability, mental or physical,
evidenced by the certificate of a physician satisfactory to the Committee, the
Participant's Fixed Account shall be fully Vested and the entire balance of such
Fixed Account shall, subject to Article VIIA(A) (providing that benefits payable
to a Participant shall be paid in the Qualified Joint and Survivor Annuity form
unless the Participant elects to waive such form of payment in the manner and
subject to the conditions imposed by Article VIIA(C)), be paid in a Lump Sum or
in regular, annual or more frequent installments (subject to the same
restrictions set forth in Paragraphs (2), (3) and (4) of Article V(A)),
whichever the Participant shall elect in writing delivered to the Committee. For
purposes of this Paragraph (D) a Participant shall be considered disabled if by
reason of his mental or physical condition he is unable to perform the normal
duties of his employment with the Company and such condition is expected to be
of permanent duration.
(E) Hardship Distributions; Distributions After Age 59-1/2.
Subject to the application of uniform rules consistently applied, the
Committee may upon the written request of a Participant direct the Trustee to
distribute funds to such Participant from his Elective Contributions Account
(but not amounts treated as Elective Contributions or income allocable thereto),
and from his entire account if he has attained age 59-1/2, in a Lump Sum, as
follows:
VI-4
(1) Any such distribution from the Participant's Discretionary Company
Contributions Account and from his Matching Company Contributions Account shall
be subject to the following requirements:
(a) Such distributions to any one Participant shall in the aggregate
not exceed 80% of the amount which would (except for any
distribution made under this Paragraph (E) or loan made under
Paragraph (F)) be the balance of his Discretionary Company
Contributions Account if he were to retire at the time of the
distribution in question.
(b) No amount shall be distributed under this Paragraph (E) sooner
than two years after the date as of which it was credited to the
account of the Participant in question except upon the prior
occurrence of some event such as illness, disability, retirement,
layoff, death or severance of employment.
(c) No distribution shall be made under this Paragraph (E) unless the
Participant meets the standards established by the Committee to
determine that there exists a situation of financial hardship,
emergency or necessity (whether or not due to an event described
in (b) above) which justifies the making of such distribution.
(d) No such distribution shall be made in any case where benefits are
currently payable to or in respect of such Participant under
Article V or under the foregoing provisions of this Article VI.
(e) The Committee shall determine the amount of any such
distribution.
(2) Any such distribution from the Participant's Elective Contributions
Account made after March 31, 1989 shall be subject to the following
requirements:
(a) No such distribution shall be made unless the Committee
determines that the distribution will be made on account of an
immediate and heavy financial need of the Participant and is
necessary to satisfy such financial need.
(b) A distribution will be deemed to be made on account of an
immediate and heavy financial need only if the distribution is on
account of:
(i) Medical expenses described in Code Section 213(d) incurred
by the Participant, the Participant's spouse, or any
dependents of the Participant (as defined in Code Section
152) or necessary for these individuals to obtain medical
care described in Code Section 213(d);
(ii) Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(iii) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, his or her spouse, children or dependents;
(iv) The need to prevent the eviction of the Participant from
his principal residence or foreclosure on the mortgage of
the Participant's principal residence;
Any other immediate and heavy financial need of the Participant
designated as such for purposes of Section 401(k) of the Code in
a revenue ruling, notice, or other document of general
applicability published by the U.S. Treasury Department
VI-5
(c) A distribution will be deemed necessary to satisfy an immediate
and heavy financial need of the Participant if all of the
following requirements are satisfied:
(i) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant. The
amount of an immediate and heavy financial need may include
amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to result
from the distribution.
(ii) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available under this Plan and all other plans maintained by
the Company,
(iii) All other plans maintained by the Company which cover the
Participant provide that the Participant's elective
contributions and employee contributions, if any, will be
suspended for at least 12 months after receipt of the
hardship distribution under the Plan, and
(iv) All other plans maintained by the Company which cover the
Participant provide that the Participant may not make
elective contributions for the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the
amount of the Participant's elective contributions (to this
Plan and such other plans) for the taxable year of the
hardship distribution.
If a Participant receives a hardship distribution under this Plan
the Participant's Elective Contributions to this Plan will be
suspended for 12 months after receipt of the distribution and he
may not make Elective Contributions to this Plan (and to any
other plan of the Company) for his taxable year immediately
following the taxable year of the distribution in excess of the
applicable limit under Section 402(g) of the Code for such
taxable year less the amount of his Elective Contributions to
this Plan (and his elective contributions to any other plan of
the Company) for the taxable year of the hardship distribution. A
Participant will not fail to be treated as an eligible employee
for purposes of the coverage and discrimination requirements of
Regulation Section 1.401(k)-1(b) merely because he is suspended
from making elective contributions or employee contributions
under the above requirements.
(3) Notwithstanding the foregoing provisions of this Paragraph (E), the
Trustee may distribute up to 100% of the funds from the Participant's Vested
account under the Plan to such Participant in a Lump Sum while the Participant
is still employed by the Company, provided the Participant has attained age
59-1/2 and requests such distribution in writing.
(4) No such distribution shall be made to a Participant after the
Participant elects a life annuity under Article V(A)(3) unless the Participant's
spouse, if any, consents in writing to the distribution during the 90-day period
ending on the date of the distribution. Such consent must be in writing, must
acknowledge the effect of the distribution, and must be witnessed by a Plan
representative or notary public.
VI-6
(F) Loans.
Subject to the application of uniform rules consistently applied, the
Committee may upon the written request of a Participant, which shall be treated
as an election by the Participant to segregate and separately direct the
investment of a portion of his account under Article IX(O), direct the Trustee
to make a loan or loans to such Participant from his account as follows:
(1) The aggregate amount of such loan or loans to a Participant shall not
exceed the lesser of -
(a) $50,000 reduced by the excess, if any, of (i) the highest
outstanding balance of loans from the Trust during the one-year
period ending on the day before the date on which the loan is
made, over (ii) the outstanding balance of loans from the Trust
on the date on which the loan is made; or
(b) 50% of the amount which would be the Vested balance of his Fixed
Account if he were to retire or otherwise terminate his
employment with the Company at the time of the loan.
(2) No such loan shall be made unless the Committee shall determine that
there is a reasonable expectation of its repayment as and when due, otherwise
than under (4) below.
(3) The Committee shall determine the amount, terms and conditions of any
such loan; provided that each such loan must by its terms be repayable in
substantially equal payments of principal and interest not less frequently than
quarterly within five years from the date of the loan, bear interest at a
reasonable rate, be adequately secured, and, if made to a so-called
"disqualified person", meet the other requirements of Section 4975(d)(1) of the
Code. Notwithstanding the limitation on the term of a loan set forth in this
subparagraph, the Committee may agree to a loan term in excess of five years
provided that the loan is used to acquire a dwelling unit which within a
reasonable time is to be used (determined at the time the loan is made) as the
principal residence of the Participant.
(4) No payment out of the Trust shall be made to or in respect of such
Participant or his Beneficiary (except under Paragraph (E) or this Paragraph
(F)) unless and until all unpaid loans to such Participant have been satisfied
in full, and if any loan to a Participant has not been satisfied in full at the
time such Participant or the Participant's Beneficiary is to receive a payment
out of the Trust, or in the event of a default under the note evidencing a loan
to a Participant, the Trustee may apply a sufficient part of the Participant's
account in satisfaction of any unpaid part of such loan.
(5) The aggregate of all loans to a Participant under this Plan and under
all other tax qualified Plans of the Company or any Related Company shall not
exceed the amount stated in (1)(a) above.
(6) No such loan shall be made to a Participant after the Participant
elects a life annuity under Article V(A)(6) unless the Participant's spouse, if
any, consents in writing to the use of the Participant's account as security for
the loan during the 90-day period ending on the date on which the loan is to be
so secured. Such consent must be in writing, must acknowledge the effect of the
loan and must be witnessed by a Plan representative or notary public. If such
spousal consent is obtained, or is not required because the Participant is not
married at the time the loan is secured by the Participant's account, no consent
of a different or subsequent spouse shall be required in order to apply the
Trust's security interest in the account to pay the balance of the loan pursuant
to (4) above. However, any renegotiation, extension, renewal, or other revision
of a loan shall be treated as a new loan for purposes of this Paragraph 6. If a
valid spousal consent to the use of a Participant's account as security for a
loan to the Participant has been obtained, for purposes of determining the
amount of the Participant's Vested account used to purchase a
VI-7
Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor
Annuity, the Participant's account shall be reduced by the amount of the
Participant's account applied to pay the balance of the loan to the Participant
from the Trust outstanding at the time of the Participant's death, termination
of employment, or other event triggering a distribution of the Participant's
account under the Plan.
(7) If the Company is or should become an electing small business (S)
corporation, no such loan shall be made to any shareholder-employee of the
Company in any taxable year of the Company in which it is an S corporation. For
purposes of this paragraph a shareholder-employee means an employee or officer
of the Company who owns, or is considered as owning within the meaning of
Section 318(a)(1) of the Code, on any day during the taxable year of the
Company, more than 5% of its outstanding capital stock.
(8) The Committee shall, before directing the Trustee to make any loan
under this Paragraph (F), adopt rules relating to loans consistent with this
Paragraph (F) and in compliance with the applicable provisions of the Code and
ERISA.
VI-8
Article VIIA. Annuity Provisions
(A) Qualified Joint and Survivor Annuity Form of Benefits.
Notwithstanding any provision of Article V(A-C) (dealing with normal, late
and early retirement) to the contrary, but subject to the provisions of Article
V(D) and (E) (dealing with the timing of benefit payments under the Plan and the
"cash out" of benefit payments not exceeding $5,000) for Participants whose
termination of employment occurs in any Plan Year beginning after August 5,
1997, a fully or partially Vested Participant who becomes eligible to receive
benefits under the Plan shall receive such benefits in the form of a Qualified
Joint and Survivor Annuity purchased from an Insurer with the entire Vested
portion of the Participant's Fixed Account, unless such Participant shall have
elected, with the consent of his spouse if he is married, pursuant to Article
VIIA(C) to waive the Qualified Joint and Survivor Annuity form of benefits;
provided, however, that:
(1) For purposes of this Section (A) and Sections (B) and (C) of this
Article VIIA the term "annuity starting date" means the first day of the first
period for which an amount is payable as an annuity under the Plan, or in the
case of a benefit not payable in the form of an annuity, the first day on which
all events have occurred which entitle the Participant to such benefit.
(2) No benefits under the Plan payable to or in respect of a Participant
shall be paid in the Qualified Joint and Survivor Annuity form described in
(4)(i) below unless the Participant is alive and married on the annuity starting
date.
(3) Annuity payments under the Qualified Joint and Survivor Annuity form
shall commence as soon as administratively feasible after the Participant
becomes entitled to receive, or to commence to receive, his Fixed Account or the
Vested portion of such Fixed Account, under Articles V(A-E) and IV(C), provided
that in no event shall such annuity payments commence later than the Required
Beginning Date or other earlier deadline for the payment of benefits specified
in Article V(D), nor earlier than the date to which payment of the Participant's
benefits under the Plan is deferred under the provisions of Article V(E) or any
other provision of Article V.
(4) "Qualified Joint and Survivor Annuity" for purposes of the Plan means
an annuity (purchased with the entire Vested portion of the Participant's Fixed
Account) (i) in the case of a married Participant, for the life of the
Participant with the provision that if the Participant's spouse survives the
Participant, annuity payments in the amount of 50% of the amount being paid to
the Participant will be continued for the life of the spouse, and (ii) in the
case of an unmarried Participant, for the life of the Participant.
(B) Qualified Preretirement Survivor Annuity Form of Benefits - Married
Participants.
Notwithstanding any provision of Sections (A) or (B) of Article VI to the
contrary but subject to the provisions of Article VIIA(C), if a fully or
partially Vested married Participant dies before benefits have commenced to be
paid to him under the Plan, at least 50% of his entire Fixed Account shall be
used to purchase an annuity for the life of the Participant's surviving spouse
(the "Qualified Preretirement Survivor Annuity" form of benefits), provided that
if such Participant has not effectively designated a Beneficiary or
Beneficiaries other than his spouse to receive any portion of his Fixed Account
on his death before benefits have commenced to be paid to him, then 100% of the
Participant's Fixed Account shall be used to purchase such an annuity for the
Participant's surviving spouse, provided, further, that no such annuity shall be
paid to the Participant's surviving spouse if such Participant shall have
elected pursuant to Section (C)(4) of
VIIA-1
this Article VIIA to waive the Qualified Preretirement Survivor Annuity form of
benefits, subject, however, to the following conditions:
(1) No benefits under the Plan in respect of a Participant shall be paid in
the Qualified Preretirement Survivor Annuity form unless the Participant is
married on the date of his death.
(2) Annuity payments under the Qualified Preretirement Survivor Annuity
shall commence on a date to be selected by the Participant's surviving spouse
after the Participant's death but in no event shall such payments commence later
than December 31 of the year such Participant would have attained age 70-1/2 or
December 31 of the year after the year of death of the Participant, if later.
(3) If the Plan provides, or has provided, for nondeductible voluntary
employee contributions and the Participant has a voluntary employee
contributions account in the Plan at the time of his death, then the amount used
to purchase the Qualified Preretirement Survivor Annuity shall come
proportionately from the Participant's account derived from Company
contributions and his voluntary employee contributions account.
(4) Notwithstanding the foregoing, the Participant's surviving spouse may
elect after the Participant's death and before the commencement of annuity
payments under the Qualified Preretirement Survivor Annuity, in writing received
by the Committee, to receive instead of such annuity a Lump Sum payment equal to
the present value of such annuity, i.e., the Participant's account balance (or
portion thereof) which otherwise would have been used to purchase such annuity.
(C) Election to Waive Qualified Joint and Survivor Annuity Form of Benefits
and/or Qualified Preretirement Survivor Annuity Form of Benefits; Election
Period; Information to Participants.
A Participant to whom Section (A) (dealing with the Qualified Joint and
Survivor Annuity form of Benefits) or Section (B) (dealing with the Qualified
Preretirement Survivor Annuity form of Benefits) of this Article VIIA applies
shall have the right to elect in writing during an Applicable Election Period
(as defined in paragraph (1) below) to waive his benefits in the Qualified Joint
and Survivor Annuity form and/or in the Qualified Preretirement Survivor Annuity
form in accordance with the following terms and conditions:
(1) "Applicable Election Period" (i) subject to (2) below means with
respect to an election to waive the Qualified Joint and Survivor Annuity form of
benefits the 90 day period ending on the annuity starting date and (ii) means
with respect to an election to waive the Qualified Preretirement Survivor
Annuity form of benefits, the period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death, except in the case of a Participant who is Separated from
Service such election period with respect to benefits accrued before the date of
such Separation from Service shall not begin later than such date.
(2) With respect to the Qualified Joint and Survivor Annuity form of
benefits, the Committee shall provide to each Participant within no less than 30
or more than 90 days before the annuity starting date, a written explanation of
(i) the terms and conditions of the Qualified Joint and Survivor Annuity, (ii)
the Participant's right to make, and the effect of, an election to waive the
Qualified Joint and Survivor Annuity form of benefit, (iii) the rights of the
Participant's spouse, if any, under paragraph (4) below, and (iv) the right to
make, and the effect of, a revocation of an election to waive the Qualified
Joint and Survivor Annuity, provided, however, that the Committee may provide
such written explanation to a Participant after the annuity starting date in
which event the Applicable Election Period shall not end before the 30th day
after the date on which such written explanation is provided to the Participant.
However, if the
VIIA-2
Participant, after having received the foregoing written explanation elects to
waive the Qualified Joint and Survivor Annuity and affirmatively elects another
form of distribution and the spouse consents to such waiver and other form of
distribution (if necessary), the date the distribution is made or commences may
be less than 30 days after the written explanation was provided to the
Participant, provided that the following requirements are met:
(a) The Committee provides information to the Participant clearly
indicating that (in accordance with the first sentence of this
paragraph (2)), the Participant has a right to at least 30 days
to consider whether to waive the Qualified Joint and Survivor
Annuity and consent to a form of distribution other than a
Qualified Joint and Survivor Annuity.
(b) The Participant is permitted to revoke an affirmative
distribution election at least until the annuity starting date
or, if later, at any time prior to the expiration of the 7-day
period that begins the day after the explanation of the Qualified
Joint and Survivor Annuity is provided to the Participant.
(c) Distribution in accordance with the affirmative election does not
commence before the expiration of the 7-day period that begins
the day after the explanation of the Qualified Joint and Survivor
annuity is provided to the Participant.
(3) With respect to the Qualified Preretirement Survivor Annuity form of
benefits, the Committee shall provide to each Participant within the applicable
period (and consistent with Regulations) a written explanation with respect to
the Qualified Preretirement Survivor Annuity comparable to that required under
(2) above applicable to the Qualified Joint and Survivor Annuity. The applicable
period for purposes of this paragraph (3) means, with respect to a Participant,
whichever of the following periods ends last: (i) the period beginning with the
first day of the Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the Participant
attains age 35; (ii) a reasonable period after the individual becomes a
Participant; (iii) a reasonable period after Separation from Service in case of
a Participant who Separates from Service before age 35; or (iv) a reasonable
period after an unmarried Participant becomes married.
(4) A participant may elect at any time during the Applicable Election
Period to waive the Qualified Joint and Survivor Annuity form of benefits or the
Qualified Preretirement Survivor Annuity form of benefits, or both, and as part
of such election to designate a beneficiary to receive any benefits payable
under the Plan on account of his death, as provided in Article VI, and/or a
method of payment of any benefits payable under the Plan on account of his
retirement or other termination of employment as provided in Article V(A)(1) or
V(A)(2), and may revoke any such election at any time during the applicable
election period, provided, however that no such election shall take effect
unless (i) the Participant's spouse, if any, consents in writing to such
election (including consent to any designation of a specific beneficiary and/or
method of payment included as part of such election), the spouse's consent
acknowledges the effect of such election and is witnessed by a member of the
Committee or other authorized representative of the Plan or a notary public, or
(ii) it is established to the satisfaction of the Committee that such written
consent cannot be obtained because there is no spouse, because the spouse cannot
be located, or because of such other circumstances prescribed in Regulations.
Any such written consent by a spouse (or establishment that the consent of a
spouse cannot be obtained) shall be effective only with respect to that
particular spouse.
(5) If a Participant effectively elects under this Section (C) to waive the
Qualified Joint and Survivor Annuity form of benefits, the benefits payable to
him upon retirement or other termination of employment shall be payable in the
form specified in Article V(A)(1) or V(A)(2),
VIIA-3
as the Participant may elect with the consent of his spouse under the applicable
provisions of Article V. If a Participant effectively elects under this Section
(C) to waive the Qualified Preretirement Survivor Annuity form of benefits, the
benefits payable on account of his death before benefits have commenced to be
paid to him shall be paid as specified by the Participant with the consent of
his spouse in a written Designation of Beneficiary form filed with the Committee
in accordance with Article VI(B).
(D) Purchase of Annuity Contracts.
The Committee shall direct the Trustee to purchase an annuity contract or
contracts from such legal reserve life insurance company, with assets of at
least two hundred fifty million dollars ($250,000,000), as the Committee shall
select for the purpose of providing any annuity benefits payable under the Plan.
Any such annuity contract may be owned and held by the Trustee or may be
delivered and assigned to the person entitled to benefits thereunder with such
restrictions, consistent with the applicable provisions of the Code and
Regulations, as the Committee (or the insurer selected by the Committee) may
impose.
(E) Former Spouse Treated as Surviving Spouse.
To the extent provided in any qualified domestic relations order (as
defined in Section 414(p) of the Code) the former spouse of a Participant shall
be treated as a surviving spouse of the Participant for purposes of the
provisions of this Article VIIA.
(F) Limited Application of Annuity Provisions.
The provisions of Sections (A) through (E) of this Article VIIA shall apply
only to a Participant who elects under Article V(A)(3) to receive his benefits
under the Plan in the form of a life annuity and to a Participant who transfers
to the Plan assets described in the last paragraph of Article XI(F).
VIIA-4
PART TWO
Article VIII. Committee
(A) Composition of Committee.
Subject to Article IX, the Plan may, but need not, be administered by a
Committee of one or more employees (or other individuals familiar with the
affairs and personnel of the Company), who shall be appointed by, and hold
office at the pleasure of, the Board of Directors of the Company. Vacancies in
the Committee resulting from death, resignation, removal or otherwise shall be
promptly filled by the Board, but the Committee may exercise its powers and
authority notwithstanding the existence of vacancies.
(B) Removal and Resignation.
A member of the Committee may resign at any time upon not less than ten
days' written notice to the Board, specifying the effective date of resignation.
A member may be removed or appointed by the Board for any reason or for no
reason and at any meeting of the Board, whether or not called for that purpose.
(C) Quorum.
The Committee shall act by a majority of its members at the time in office,
and such action may be taken either by vote at a meeting or in writing without a
meeting. A member of the Committee shall not vote or act on any matter relating
solely to himself.
(D) Officers.
The Committee may by such majority action appoint from among its number a
Chairman to preside at its meetings and a Secretary, who need not be a member,
to keep records of its meetings and activities and to perform such other duties
and functions as the Committee may prescribe. It may in like manner designate
any one or more of its members or its Secretary to execute any instrument or
document upon its behalf, and the action of such person shall have the same
force and effect as if taken by the entire Committee. In the event of such
authorization, the Committee shall in writing notify the other Administrative
Parties thereof, and such parties shall be entitled to rely upon such
notification until the Committee shall give written notification to the
contrary.
(E) Records and Reports.
The Committee shall exercise such authority and responsibility as it deems
appropriate in order to comply with ERISA, the Code, and governmental
regulations issued thereunder relating to reporting and disclosure, including
the furnishing of information to Participants and Beneficiaries and the filing
of information and reports with the Internal Revenue Service and the Department
of Labor.
(F) Powers and Duties.
The Committee shall have any and all powers, authority and duties which
shall be necessary and proper to enable it to carry out its obligations under
this Agreement, including by way of illustration and not limitation, the power
and duty:
VIII-1
(1) To construe and interpret the Plan as provided in Article I(C), decide
all questions of eligibility, determine the amount, manner and time of payment
of any benefits hereunder, and direct the Trustee with respect to the amount,
manner and time of payment of such benefits;
(2) To prescribe procedures to be followed by Participants or Beneficiaries
filing applications to participate, elections, designation of beneficiary forms,
applications for benefits, if any, and any other forms required or desirable
under the Plan;
(3) To prepare and distribute, in such manner as the Committee determines
to be appropriate, information explaining the Plan;
(4) To receive from the Company, the Trustee and Participants such
information as shall be necessary or desirable for the proper administration of
the Plan;
(5) To furnish the Company, upon request, such annual reports with respect
to the administration of the Plan as are reasonable and appropriate;
(6) To receive and review the periodic valuation of accounts made by the
Trustee;
(7) To receive, review and keep on file (as it deems convenient and proper)
reports of account allocations and benefit payments by the Trustee and reports
of disbursements for expenses directed by the Committee;
(8) To appoint or employ individuals to assist in the administration of the
Plan and any other agents it deems advisable, including legal, accounting, and
benefit consultant counsel.
(9) Unless a notice, form or other document is required to be written on
paper, it shall be valid if given or made via electronic media as provided in
this paragraph. If determined by the Committee, Participant enrollments,
contribution elections, investment elections, beneficiary designations (except
spousal consent waivers), direct rollover elections, and responses to requests
for general plan information may be made electronically, and other transactions
or communications may also be made electronically if the Committee reasonably
determines that electronic methods will meet the requirements of applicable laws
and regulations and will not cause the Plan to fail to satisfy the requirements
of Code Section 401(a) or the requirements of a cash or deferred arrangement
under Section401(k). Any and all such electronic transactions or communications
shall be accomplished through a medium reasonably accessible to the Participant,
Beneficiary or other recipient. A notice or summary provided through an
electronic medium must be provided under a system that satisfies the following
requirements:
(a) The system must be reasonably designed to provide the notice or
summary in a manner no less understandable to the recipient than
a written paper document.
(b) At the time the notice or summary is provided, the recipient must
be advised that the recipient may request and receive the notice
on a written paper document at no charge, and, upon request, that
document must be provided to the recipient at no charge.
Any Participant consent to a distribution or other Plan matter, if given through
an electronic medium must be given under a system that satisfies the following
requirements:
(c) The system must be reasonably designed to preclude any individual
other than the Participant from giving the consent.
(d) The system must provide the Participant with a reasonable
opportunity to review and to confirm, modify, or rescind the
terms of any distribution before the consent to such distribution
becomes effective.
VIII-2
(e) The system must provide the Participant, within a reasonable time
after the consent is given, a confirmation of the terms
(including the form) of any distribution either on a written
paper document or through an electronic medium under a system
that satisfies the requirements of this paragraph (9).
(G) Rules and Regulations.
The Committee may adopt such rules and regulations as it deems necessary,
desirable or appropriate in connection with the administration of the Plan
including, but not limited to, rules and regulations relating to loans and
hardship distributions. All rules and regulations of the Committee shall be
uniformly and consistently applied to all Participants in similar circumstances.
When making a determination or calculation, the Committee shall be entitled to
rely upon information furnished by a Participant or Beneficiary, the Company,
any Related Company, legal counsel for the Company, or the Trustee.
(H) Claims Procedure.
If any Participant or Beneficiary shall claim benefits for which the
Committee has determined he is ineligible, or shall dispute the amount or timing
of benefits determined by the Committee to be payable hereunder, he shall be
entitled to make a claim for benefits pursuant to this Paragraph (H). All claims
for benefits under this Agreement, whether made by a Participant or Beneficiary,
shall be in writing addressed and delivered to the Committee, or any member
thereof, at the Company's main office, shall contain the claimant's name,
mailing address, and telephone number, if any, and shall identify the claim in a
manner reasonably calculated to make the claim understandable to the Committee.
If the claim is defective in any foregoing respect, the Committee may at any
time within ten days after said delivery give the claimant not less than ten
days' written notice specifying the defect or defects and the deadline for
correction. A claim shall be deemed to be effectively made when and if it is
timely corrected in writing (addressed and delivered as aforesaid), or when it
is timely and correctly prepared and delivered in the first place, or when it
(or a revision thereof) is timely delivered as aforesaid if the Committee does
not give written notice of any defect therein within ten days after said
delivery. It is further agreed:
(1) If a claim is (or is deemed to be) effectively made, the Committee,
shall within 60 days thereafter notify the claimant in writing whether the claim
has been granted or has been denied in whole or in part. Such notice shall be
written in a manner calculated to be understood by the claimant, shall make
specific reference to the Plan, and, if adverse in whole or in part, shall set
forth:
(a) The specific reason or reasons for the denial;
(b) A description of any additional material or information necessary
for the claimant to perfect the claim, together with an
explanation of why such material or information is necessary; and
(c) An explanation of the claim review procedure set forth in (3) and
(4) below.
(2) If within said 60 days the claim has not been granted, it shall be
deemed to have been denied for purposes of the claim review procedure set forth
in (3) below, even if notice of denial has not been given under (1) above.
(3) Upon denial of a claim in whole or in part, the claimant or his duly
authorized representative shall have 60 days within which to file with the
Committee or any member thereof a written request for a review of such denial,
whereupon -
VIII-3
(a) The Committee shall as promptly as is practicable, but not later
than 60 days after receipt of such request, schedule a hearing to
review said claim.
(b) The claimant or his duly authorized representative shall, pending
and/or at said hearing, be permitted at all reasonable hours to
review the pertinent documents and also be entitled to submit
issues and comments in writing.
(4) The hearing mentioned in (3) above shall be held at the Company's main
office during normal business hours, unless a different time and/or place are
mutually agreed upon. It shall be attended by at least a majority of the
Committee. A decision on the claim shall be rendered thereat or as soon as
possible thereafter, but in no event later than 120 days after the Committee's
receipt of the written request for review; shall be in writing and include
specific reasons; shall be written in a manner calculated to be understood by
the claimant; and shall contain specific reference to the pertinent Plan
provisions on which the decision is based.
(I) No Separate Committee.
Notwithstanding the foregoing provisions of this Article VIII -
(1) If and while the one or more Persons comprising the Committee and
Trustee are identical, the separation in this Agreement of the responsibilities,
rights, powers, authority, and functions of the Committee and Trustee
respectively shall be disregarded; said Persons shall act and serve in both said
capacities combined; and they need not furnish information, directions,
instructions or notices, or make reports or demands, by themselves in one such
capacity to themselves in the other such capacity.
(2) If and while there is no Committee, either because none is designated
or no one or more Persons are at the time in question actively serving as
members thereof, the responsibilities, rights, powers, authority, and functions
of the Committee shall be vested in the Company; and the Company and Committee
need not furnish information, directions, instructions or notices, or make
reports or demands, one to the other.
(3) Whoever performs the functions of the Committee shall be the Plan
Administrator as defined in ERISA.
VIII-4
Article IX. Trustee and Other Fiduciaries
(A) Bonding.
Every Fiduciary shall be bonded to the extent (1) required by Section 412
of ERISA or applicable Labor Regulations or (2) directed by the Company.
(B) Protective Provisions for Fiduciaries.
To the extent permitted by ERISA, it is agreed:
(1) No Fiduciary shall be liable with respect to a breach of fiduciary duty
if such breach was committed before he became a Fiduciary or after he ceased to
be a Fiduciary.
(2) Notwithstanding any other provisions of this Agreement -
(a) Any Fiduciary may, but need not, purchase insurance from and for
his own account to cover liability arising under or with respect
to the Plan.
(b) The Company may, but need not, purchase insurance to cover
potential liability of one or more Persons who serve in a
fiduciary capacity with respect to the Plan.
(c) Upon first obtaining the written consent of the Company, any
Trustee may use assets of the Trust to purchase insurance for
itself and/or one or more other Fiduciaries and/or the Trust to
cover liability or losses occurring by reason of the act or
omission of itself and/or one or more other Fiduciaries, if such
insurance permits recourse by the insurer against such Trustee
and/or one or more other Fiduciaries in question in the case of
its or their breach of a fiduciary obligation.
(3) Any Fiduciary may, by written instrument, allocate and delegate to
others any of such Fiduciary's powers, duties or responsibilities, terminable
upon such notice as such Fiduciary deems prudent. Any person or entity may serve
in more than one fiduciary capacity with respect to the Plan. A Fiduciary's
responsibility shall be limited to performance of those duties conferred upon
such Fiduciary by or pursuant to the Plan, and, subject to Section 405 and 410
of ERISA, no Fiduciary shall be responsible for the acts or omissions of any
other Fiduciaries.
(C) Management and Control of Assets; Consultants and Investment Managers.
To the extent permitted by Section 402(c) of ERISA:
(1) Any Fiduciary may employ one or more Persons to render advice with
regard to any responsibility which such Fiduciary has under this Agreement.
(2) Except as hereinafter provided, the Trustee shall be the Fiduciary with
respect to the investment, management and control of the Trust Fund, with full
discretion in the exercise of such investment, management and control.
(3) The Company may, by resolution of its Board of Directors, assume from
the Trustee and transfer to the Committee or an Investment Manager the authority
and duty to direct the investment and management of all or a portion of the
Trust Fund; and, if such authority and duty have been transferred to the
Committee, the Committee, by appropriate action, may appoint an Investment
Manager to direct the investment and management of all or a portion of the Trust
Fund, provided that:
IX-1
(a) A copy of any such Board resolution or Committee action shall be
delivered to the Trustee whereupon the Committee or the
Investment Manager, as the case may be, shall be the Fiduciary
with respect to the investment and management of the Trust Fund
(or designated portion thereof) and the Trustee shall have no
responsibility therefor.
(b) Any transfer of investment and management to the Committee or to
an Investment Manager may be revoked upon receipt by the Trustee
of a written notice to that effect by the Company through its
Board of Directors or the Committee, as the case may be.
(c) The appointment, selection and retention of a qualified
Investment Manager shall be solely the responsibility of the
Company or the Committee, as the case may be.
(4) During such period or periods of time, if any, as the Committee or any
Investment Manager is authorized to direct the investment and management of all
or a part of the Trust Fund:
(a) The Trustee is authorized and entitled to rely upon the fact that
said Investment Manager is at all times a qualified Investment
Manager, as defined in Section 3(38) of ERISA, until such time as
the Trustee has received a written notice from the Company or
Committee to the contrary, as well as to rely upon the fact that
said Investment Manager is authorized to direct the investment
and management of the Trust Fund until such time as the Company
or Committee, as the case may be, shall notify the Trustee in
writing that another Investment Manager has been appointed in the
place and stead of the Investment Manager named or, in the
alternative, that the Investment Manager named has been removed
and the responsibility for the investment and management of the
Trust Fund has been assumed by the Committee or has been
transferred back to the Trustee, as the case may be.
(b) The Trustee shall not be liable or responsible for losses or
unfavorable results arising from the Trustee's compliance with
proper directions of the Committee which are made in accordance
with this Agreement and which are not contrary to the provisions
of any applicable Federal or State statute regulating such
investment and management of the assets of an employee benefit
trust.
(c) The Trustee shall not be liable or responsible in any way for any
losses or other unfavorable results arising from the Trustee's
compliance with investment or management directions received by
the Trustee from the Investment Manager.
(d) All directions concerning investments made by the Committee or
the Investment Manager shall be signed by such person or persons,
acting on behalf of the Committee or the Investment Manager, as
the case may be, as may be duly authorized in writing; provided,
however, that the transmission to the Trustee of such directions
by photostatic teletransmission with duplicate or facsimile
signature or signatures shall be considered a delivery in writing
of the aforesaid directions until the Trustee is notified in
writing by the Committee that the use of such devices with
duplicate or facsimile signatures is no longer authorized.
(e) The Trustee shall, as promptly as possible, comply with any
written directions given by the Committee or an Investment
Manager hereunder and,
IX-2
where such directions are given by photostatic teletransmission
with facsimile signature or signatures, the Trustee shall be
entitled to presume that any directions so given are fully
authorized.
(f) The Trustee shall not be liable for its failure to invest any or
all of the Trust Fund in the absence of such written directions.
(g) The Trustee shall have no obligation to determine the existence
of any conversion, redemption, exchange, subscription or other
right relating to any of said securities purchased, of which
notice was given prior to the purchase of such securities, and
shall have no obligation to exercise any such right unless the
Trustee is informed of the existence of the right and is
instructed to exercise such right, in writing, by the Committee
or the Investment Manager, as the case may be, within a
reasonable time prior to the expiration of such right.
(h) Neither the Committee nor any Investment Manager referred to
above shall direct the purchase, sale or retention of any assets
of the Trust Fund if such directions are not in compliance with
the applicable provisions of ERISA and any Regulations issued
thereunder.
(D) Participant-Directed Investments.
If, while, and to the extent that a Participant exercises control over the
assets in his account by an election under Paragraph (O) below, such Participant
shall not be deemed to be a Fiduciary by reason of such exercise; and no Person
who is otherwise a Fiduciary shall be liable under Title I, Subtitle B, Part 4,
of ERISA (or comparable provisions of this Agreement) for any loss, or by reason
of any breach, which results from such Participant's exercise of control.
(E) Prohibited Transactions, Etc.
Notwithstanding any other provision of this Agreement -
(1) Except as authorized by applicable Regulations, no Fiduciary may
maintain the indicia of ownership of any assets of the Trust outside the
jurisdiction of the district courts of the United States.
(2) A Fiduciary shall not knowingly and willfully cause the Trust to engage
in a transaction which violates Section 406 or 407 of ERISA or which is taxable
under Section 4975 of the Code.
(F) General Duties of Trustee.
In addition to all its other duties and responsibilities under this Article
IX and other provisions of this Agreement, the Trustee shall -
(1) Receive, collect, hold, safeguard, administer and retain, temporarily
or permanently, the cash and other property originally or at any time comprising
all or part of the Trust Fund, together with such income, rents, issues and
profits as shall from time to time be produced thereby or arise therefrom.
(2) Make such payments and distributions, and take such further action, as
shall be proper to effectuate benefits under the Plan and to carry out this
Agreement.
IX-3
(3) Maintain complete records and accounts of the Trust, including those
which the Company or Committee may direct, and the Company or Committee may
examine the same at all reasonable times during business hours.
(4) Render such periodic accountings and reports, including but not limited
to those hereafter described in this Article IX, as the Company or Committee may
reasonably require.
(5) Carry out the proper directions and instructions of the Committee and,
insofar as may be proper under this Agreement, make determinations, participate
in consultations and conferences, and give or withhold approvals and consents.
(G) General Powers of Trustee.
Except as otherwise expressly provided in this Agreement or required by
law, the Trustee is authorized and empowered -
(1) To sell, exchange, transfer, assign, lease, pledge, mortgage or
otherwise encumber or dispose of, publicly or privately, any real or personal
property at any time included in the Trust Fund as and when, for such (if any)
price and consideration, on credit or otherwise, with or without security, and
upon such other terms and conditions as the Trustee shall deem proper.
(2) To invest and reinvest all or part of the Trust Fund, in such amounts,
proportions and investments, including but not limited to bonds, notes,
debentures, mortgages, equipment trust certificates, investment trust
certificates, preferred or common stocks (including qualifying employer
securities as defined in Code Section 4975(e)(8) - which may comprise up to 100%
of the Trust Fund), mutual funds or other property, real or personal, either
within or without the State of Michigan, as the Trustee may deem proper or the
Committee shall direct.
(3) To hold cash uninvested, or on deposit with any bank, savings and loan
association or trust company, in such amount as the Trustee shall deem proper,
for the purpose of defraying anticipated expenses of (and benefits out of) the
Trust. At any time the Trustee is a bank or trust company the authority herein
conferred shall extend to deposits with the Trustee.
(4) To pay, perform, defend, collect, maintain, sue on, modify, settle,
compromise, release, abandon or otherwise adjust or dispose of any claims or
demands in favor of or against the Trust Fund or any Participant's account.
(5) To vote or not vote any stock or securities in person, through
designees or by proxy.
(6) To hold or register any stock, securities or other property in the name
of any Trustee or nominee or unregistered or in such form that title shall pass
by delivery, provided that the records of the Trustee shall always indicate the
fiduciary nature of such ownership.
(7) To exercise, not exercise, sell or otherwise dispose of any conversion
or subscription right, or other right or option, and to make any payments
incidental thereto.
(8) To oppose, consent to or participate in any voting trust, pooling
agreement, foreclosure, reorganization, consolidation, merger, liquidation,
refinancing, or sale of assets, of or with respect to any corporation or other
organization, and in connection therewith to deposit stock, securities or other
property with, and transfer title to, any protective committee or other Person
whatsoever.
(9) To pay calls, assessments and other charges which the Trustee shall
deem proper.
(10) To borrow and lend money in such circumstances and upon such terms and
conditions, with or without security, as the Trustee shall deem proper.
IX-4
(11) To make or not make any provision for amortization or a sinking fund
with respect to any security which is received at a value or purchased at a
price in excess of par or of the amount payable on its call, redemption,
maturity or liquidation.
(12) Subject to Article IX(E)(1), to keep all or part of the Trust Fund at
any place or places, and to hold and administer the Trust Fund in one or more
common trust funds or other consolidated funds, in which the various accounts
may have undivided interests, and without distinction between income and corpus.
(13) To retain as an investment any stock, securities or other property received
through the exercise of any foregoing powers and authority.
(14) To make, execute and deliver any and all agreements, instruments and
documents whatsoever, including but not limited to those incidental to the
foregoing powers and authority, and to make the same binding and enforceable
beyond the duration of the Trust.
(15) To buy, sell and trade in option contracts and 'short' sales for cash,
and for such purpose the Trustee may maintain and operate cash accounts with
brokers, and may deliver and pledge any securities held or purchased by the
Trustee with such brokers both as security for loans and advances made to the
Trustee and to ensure the Trustee's ability to deliver stock against short
options provided that all such purchases, sales and trades shall be made on one
or more designated national securities exchanges whose plans regulating such
transactions have been declared effective pursuant to the Securities Exchange
Act of 1934, such as the Chicago Board Options Exchange, Incorporated.
(16) To do any and all additional acts and things which the Trustee shall
be authorized to do under the laws of the State of Michigan or of any other
jurisdiction in which it may act or which the Trustee in its discretion shall
deem proper to carry out this Agreement, to the end that the Trustee shall have
and may exercise all the powers and authority of an absolute owner, except as
the Committee shall otherwise direct; and no Person dealing with the Trustee
shall be bound to see to the application of any money or other property paid,
delivered or transferred to the Trustee or to inquire into the validity or
propriety of any transaction whatsoever.
(H) Appraisal.
As of each Anniversary Date and Valuation Date, and as of such other dates
as the Company or Committee may reasonably direct, the Trustee shall determine
the fair market value of the assets comprising the Trust Fund, including the
assets of each Investment Fund established within the context of the Trust Fund,
by appraising such assets as follows, except as otherwise required by ERISA:
(1) Stocks and securities which are listed or reported on any national
exchange (including qualifying employer securities) shall be valued on the basis
of their closing prices on such exchange on the appraisal date or, if there were
no reported sales on such exchange on the appraisal date, then at their bid
prices at the close of market.
(2) Stocks and securities not susceptible of valuation under (l), but which
are traded over-the-counter, shall be valued on the basis of their closing
prices on the market on the appraisal date or, if there were no reported sales
over-the-counter on the appraisal date, then at their bid prices at the close of
market.
(3) Stocks and securities not susceptible of valuation under (1) or (2),
but which would be susceptible of valuation as of a date not more than seven (7)
days prior to the appraisal date, shall be valued as of such prior date as near
as possible to the appraisal date.
IX-5
(4) For purposes of (1), (2) and (3) above, information contained in any
newspaper of general circulation or any standard financial periodical, or
furnished by any national securities exchange or by any broker who is a member
of any national securities exchange, as the case may be, may be fully relied
upon by the Trustee in the absence of actual knowledge or advice to the
contrary.
(5) Property not subject to valuation by the foregoing methods shall be
valued at its fair market value in accordance with written directions given to
the Trustee by the Committee (except as otherwise provided in Article XII).
(6) There shall be excluded from the assets valued under this Paragraph
(H), if appraisal is being made as of an Anniversary Date, the amount of the
Company's contribution which is allocable to the Participants' accounts as of
said date.
(7) Valuations determined by appraisal under this Paragraph (H) shall be
binding and conclusive upon each and every Person beneficially interested in the
Trust, but shall not be binding upon the Company or Committee unless
incorporated in an accounting under Paragraph (I) below.
(8) Upon completion of an appraisal, the Trustee shall file copies thereof
with the Committee and the Company.
(9) Notwithstanding the foregoing, any assets of the Trust Fund or any
Investment Fund within the context of the Trust Fund consisting of units of
participation in any pooled fund established and maintained by the Trustee under
any trust instrument establishing a pooled fund or funds for the investment of
the assets of pension and profit-sharing plans of various employers for which
the Trustee acts as trustee shall be valued in accordance with the terms of such
trust instrument.
(I) Periodic Accounting.
Within 60 days after such Anniversary Date, and at such other times as the
Company or Committee may reasonably direct or as ERISA may require, the Trustee
shall prepare and deliver to the Company and Committee an accounting of the
administration of the Trust, which accounting shall include a description of all
assets then comprising the Trust Fund and shall be in such further detail as the
Company or Committee may reasonably request. Within 90 days after receiving such
accounting, the Company and Committee, respectively, shall notify the Trustee in
writing whether or not such accounting is approved; and unless so disapproved,
it shall be deemed to be approved. It is in addition agreed:
(1) Either the Company or the Committee or both may require the Trustee to
furnish such other or additional information with respect to the administration
of the Trust as may be reasonably necessary or desirable prior to determining
upon the approval thereof; and in such event the aforesaid 90-day period shall
be tolled until such information is received by the party requesting it.
(2) If the Company or Committee shall notify the Trustee that the aforesaid
accounting is not approved, an audit or opinion shall thereupon be made by an
independent public accountant or accountants chosen by the Company or Committee,
as the case may be. Upon completion of such audit or opinion, any errors in the
accounting shall be corrected, and the corrected accounting shall be deemed to
be approved by the Company and Committee.
(3) The approval by the Company and Committee of the accounting or
corrected accounting shall constitute an account stated between the Company,
Committee, Trustee, all Participants, all Beneficiaries, and any other Persons
having any interest in the Trust or Plan.
IX-6
(4) Nothing in this Paragraph (I) shall prevent the Trustee from having an
accounting settled and allowed by, or being required by the Company or Committee
to account in, a court of competent jurisdiction.
(5) The foregoing provisions of this Paragraph (I) are subject to the
provisions of ERISA.
(J) Protective Provisions for Trustee.
The Trustee accepts the Trust solely upon the terms and conditions of this
Agreement, and no duties or responsibilities not expressly set forth herein or
in ERISA shall be implied or imposed. It is further agreed:
(1) The Trustee shall have no duty to ascertain whether any directions or
instructions of the Company or Committee are in accordance with this Agreement,
nor to see to the application of any payment made pursuant to such directions or
instructions.
(2) Any benefit or other payment under the Plan shall be made only if and
when the Trustee has sufficient assets of the Trust Fund available for the
purpose intended.
(3) In the event of any dispute as to the Persons to whom payment of any
money or delivery of any other property shall be made by the Trustee, the
Trustee may withhold such payment or delivery in whole or part until such
dispute shall be settled to the satisfaction of the Trustee or determined by a
court of competent jurisdiction.
(4) The Trustee may withhold all or such part of any distribution as the
Trustee in its discretion may deem proper to protect the Trustee and the Trust
Fund against any liability or claim or account of any estate, inheritance,
income or other tax whatsoever, and with all or any part of any such
distribution so withheld may discharge any such liability. Any part of any such
distribution so withheld by the Trustee that may be determined by the Trustee to
be in excess of any such liability shall upon such determination by the Trustee
be distributed forthwith to the Person from whom it was withheld.
(5) The Trustee shall not be obligated to institute any action or
proceedings for the collection of money or other property due the Trust, or in
defense of any claim against the Trust or any portion of the Trust Fund, unless
the Trustee shall first have been indemnified to its satisfaction for all costs,
expenses, attorney fees and liabilities to which the Trustee might become
subject.
(K) Provisions Pertaining to Co-Trustees.
During any period of time when the Trustee shall consist of two or more
Persons (whether individuals, corporations or otherwise), the following
provisions shall apply:
(1) Except as otherwise provided in the foregoing provisions of this
Article IX -
(a) Each such Person shall use reasonable care to prevent a
co-Trustee from committing a breach; and
(b) Such Persons shall jointly manage and control the Trust assets,
except that this item (b) shall not preclude any agreement, and
the co-Trustees are hereby authorized to agree (in a written
document executed by all co-Trustees) to allocate specific
responsibilities, obligations or duties among themselves, in
which event a co-Trustee to whom certain responsibilities,
obligations or duties have not been allocated shall not be liable
by reason of this item (b), either individually or as a Trustee,
for any loss resulting to the
IX-7
Trust arising from acts or omissions on the part of another
co-Trustee to whom such responsibilities, obligations or duties
have been allocated.
(2) Nothing in (1) above shall limit any liability that a Fiduciary may
have under Part 4 of Title I of ERISA.
(3) The Trustee shall act by a majority of such Persons at the time in
office, and such action may be taken either by vote at a meeting or in writing
without a meeting.
(4) Said Persons serving as co-Trustees may unanimously designate any one
or more co-Trustees to execute any instrument or document on behalf of all, and
the action of such designated co-Trustee shall have the same force and effect as
if taken by all the co-Trustees. In the event of such authorization, all the
co-Trustees shall in writing notify the other Administrative Parties thereof,
and such parties shall be entitled to rely upon such notifications until one or
more co-Trustees shall give written notification to the contrary.
(L) Removal and Resignation of Trustee.
Any sole or co-Trustee may resign at any time upon not less than 30 days
written notice to the Board of Directors of the Company specifying the effective
date of resignation. Any sole or co-Trustee may be removed by the Board with or
without cause, but only upon not less than 30 days' written notice to such sole
or co-Trustee specifying the effective date of removal and enclosing a copy of
the resolution of the Board. No such removal shall become effective until all
sums due to such sole or co-Trustee under this Agreement have been paid. The
Trustee and the Company may waive any of the provisions of this Paragraph by
mutual agreement in writing.
(M) Successor Trustees.
The lack of a Trustee due to resignation, removal or otherwise shall not
terminate the Trust. The Company shall promptly appoint one or more successor
Trustees. In the absence of any other Trustee, the Committee shall act and serve
as an interim Trustee. Each and every estate, title, right, power, authority,
discretion, duty and obligation conferred upon the Trustee by this Agreement
shall devolve upon, and be exercised and performed by, such successor Trustees,
including the Committee or any remaining Trustee.
(N) Settlement of Accounts upon Resignation or Removal of Trustee.
In the event of the resignation or removal of a sole or co-Trustee, such
sole or co-Trustee shall have the right to a settlement of its accounts at the
expense of the Trust, which accounting shall be made as provided in Paragraph
(I) above. Upon completion of such accounting and payment to the outgoing sole
or co-Trustee of its compensation and expenses, including court costs and legal
fees, such sole or co-Trustee or its legal representative shall promptly assign,
transfer and deliver unto the remaining or successor Trustee (or in the absence
thereof, to the Committee) the Trust Fund and all records and data (or copies
thereof) pertaining to the Plan and Trust.
(O) Segregated Accounts.
Notwithstanding Paragraph (G) above or any other provisions of this
Agreement, any Participant may at any time while employed by the Company direct
the Trustee, on such form and in such manner as the Committee may prescribe,
that he elects to have his account separately held, administered and invested in
such manner, at such time and upon such terms as he may designate, in mutual
funds or other investments (including Company Stock) prescribed by the
Committee. Assets acquired pursuant to such election shall be held by the
Trustee for the benefit
IX-8
of the Participant in question; all income, gains and the like received or
earned thereon shall be credited to such Participant's account; and all
expenses, losses and the like shall be charged to his account as contemplated by
Articles IV(B) and XI(P). Such assets shall be held by the Trustee until
distributed in accordance with this Agreement
(P) Investments in Common Trust Funds.
Notwithstanding any other provisions of this Agreement, all or any part of
the assets of the Trust may be invested in any collective investment trust;
provided that such collective investment trust is exempted under the Code or
regulations or rulings issued by the Internal Revenue Service and is then
maintained by the Trustee. The provisions of the document governing any such
collective investment trust, as amended from time to time, shall govern any
investment therein and are hereby made a part of this Agreement.
(Q) Commingling of Trust Funds of Company and Related Companies.
The Trustee may, upon written instructions of the Committee, commingle the
assets of the Trust Fund for investment purposes only with the assets of any
other tax qualified plan(s) sponsored by the Company or any Related Company,
provided (i) such commingling shall be permitted only so long as such other tax
qualified plan(s) and related trust(s) and this trust continue to meet the
requirements of Sections 401(a) and 501(a) of the Code, (ii) such commingling is
permitted under the terms of such other tax qualified plan(s) and related
trust(s), (iii) each such trust shall be deemed to have a proportionate
undivided interest in such commingled trust the dollar amount of which shall be
identifiable at all times by the Trustee, except that any assets identified by
the Committee as allocable to each such trust and income, appreciation or
depreciation and expenses attributable to each of such trusts shall be allocated
or charged to that trust, (iv) the individual account records (if any) of
participants in each such trust shall continue to be kept separately for each
trust, and (v) except as provided herein each such trust shall continue to be
treated as a separate trust for all purposes including reporting to the Internal
Revenue Service and disclosure to participants.
IX-9
Article X. Termination, Amendment and Suspension
(A) Termination, Etc.; Assumption of Plan.
It is the present intention of the Company permanently to maintain the Plan
and continue to make contributions under Article III(A); provided, however, that
subject to Article XI(E) -
(1) The Company reserves the right at any time to revoke this Agreement,
terminate the Plan, or terminate or suspend its liability to make further
contributions to the Trust, but no such action shall become effective until the
Company shall notify the Committee and Trustee.
(2) The Plan shall automatically terminate, and likewise the Company's
liability to make contributions to the Trust, upon the Company's legal
dissolution, or upon its adjudication as bankrupt or insolvent, or upon its
making a general assignment for the benefit of creditors, or upon a receiver
being appointed for its assets, or upon its merger or consolidation with or into
any other corporation or corporations, or upon a complete discontinuance of
contributions under the Plan within the meaning of Section 411(d)(3) of the
Code.
(3) Termination of the Plan may be forestalled if and to the extent that
any successor corporation, or any corporation or business entity employing a
majority of the then Participants, shall expressly assume the Plan and the
Company's liability to make contributions. Such assumption shall be expressed in
a written agreement between the Company and such corporation or business entity,
pursuant to proper resolution of the latter's Board of Directors or other
governing body, but shall not be effective unless copies of such agreement and
resolution shall be filed with the Trustee prior to termination. Such agreement
shall provide for assumption of the Plan and the liability to make
contributions, with respect to all Participants employed by such corporation or
business entity, and such corporation or business entity shall thereupon be
substituted pro tanto in the place and stead of the Company. With respect to any
then Participants who are not taken over as employees of such corporation or
business entity, the Plan shall be deemed to terminate, and Paragraph (B) below
shall be invoked.
(4) In the event of any termination or suspension under (1) or (2) above,
if and to the extent required by applicable law, the Company and the Trustee
shall give prompt notice thereof to the Internal Revenue Service; and, subject
to Paragraph (B) below, each Participant's account shall be Vested to the extent
required by Article XI(E)(2).
(B) Liquidation, or Temporary Continuation, of Trust.
In the event of termination of the Plan, the Trustee shall proceed as
promptly as possible, subject to any directions from the Committee, to liquidate
all investments and shall thereupon determine the value of each Participant's
account under Article IV(P) as of the date of termination. After each such
account has been appropriately adjusted to cover any expenses of distribution
and final liquidation costs, but subject nevertheless to Sections 403(d)(1) and
4044 of ERISA and applicable Labor Regulations, the Trustee shall pay the
balance of such account to the Participant (or, if deceased, his Beneficiary) in
an immediate Lump Sum or by means of the purchase and delivery of a Contract
providing one of the payment options permitted by the Plan (if such a Contract
can be purchased from an Insurer), whichever the Participant (or, if deceased,
his Beneficiary) shall elect in writing delivered to the Committee. Any Contract
issued in respect of any Participant shall be assigned to him or, if deceased,
his Beneficiary at as early a date as is possible after termination.
Notwithstanding Article V(E) (Cash-Outs) or any other provision of the Plan
to the contrary, if at the time the Trust is terminated the Company does not
maintain any other defined
X-1
contribution plan (other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code), the Trustee shall pay the balance of each
Participant's account (adjusted as provided above) to the Participant (or, if
deceased, his Beneficiary) in a Lump Sum as soon as administratively possible
after such termination and the consent of the Participant or his Beneficiary to
such distribution shall not be required.
Alternatively, if so directed by the Committee, the Trustee shall continue
the Plan and Trust in existence as a "frozen" Plan and Trust (without receiving
any additional Company contributions and without admitting any additional
Participants) and shall pay the balances of the accounts of Participants to them
at such times as they are entitled to receive the same under this Agreement,
i.e., at retirement, death, other termination of employment, or by reason of
hardship or the attainment of age 59-1/2. In such event the frozen Plan and
Trust shall be operated and maintained so that they continue to meet the
qualification requirements of Section 401(a) of the Code, including the minimum
coverage requirements of Section 410(b) of the Code.
Whether benefits under the Plan are paid at the time the Plan is terminated
or the Trustee continues the Trust, the payment of benefits shall continue to be
subject to the applicable qualified joint and survivor annuity and qualified
preretirement survivor annuity provisions of the Plan and the Code relating to
both married and unmarried Participants.
(C) Termination of Trust.
Notwithstanding termination of the Plan, the Trust shall terminate when and
if, but not until, the Trust Fund shall be entirely paid out and distributed in
accordance with this Agreement.
(D) Amendment.
Subject to Article XI(E) (Nonforfeitability, etc.) the Company reserves the
right at any time and from time to time to amend this Agreement, without the
consent of any Participant or Beneficiary, in any manner which the Company deems
to be proper, whether or not (1) for reasons of business necessity or (2) for
the purpose of causing the Plan and Trust to be tax qualified or to continue to
be tax qualified. No such amendment, except upon written consent, shall increase
the duties or liabilities of the Trustee or Committee, or diminish their
compensation, or deprive any Participant or Beneficiary of any then Vested
equitable interest in the Trust; provided, however, that such amendment may be
retroactive to the extent necessary to take full advantage of Section 401(b) of
the Code if such amendment is adopted for the purpose of causing the Plan and
Trust to be tax qualified or to continue to be tax qualified with respect to any
taxable year of the Company and is adopted and effective within the time limit
specified in Article III(A) with respect to making contributions for such
taxable year or within such longer period permitted under applicable
Regulations.
X-2
Article XI. Miscellaneous
(A) Persons Prohibited from Serving as Fiduciaries, Etc.
No person shall serve as a Committee member, Fiduciary, officer, Trustee,
custodian, counsel, agent or employee of the Trust, or as a consultant to the
Trust or in any other capacity, if prohibited so to do by Section 411 of ERISA.
(B) Information Required by ERISA.
If some or all of the information necessary to enable the Committee to
comply with the requirements of Title I of ERISA is maintained by -
(1) An insurance carrier or other organization (normally the Insurer) which
provides some or all of the benefits under the Plan, or holds assets of the Plan
in a separate account,
(2) A bank or similar institution (normally a corporate Trustee) which
holds some or all of the assets of the Plan in a common or collective trust or a
separate trust or custodial account, or
(3) A Plan sponsor (normally the Company) as defined in Section 3(16)(B) of
ERISA,
such carrier, organization, bank, institution or sponsor shall transmit and
certify the accuracy of such information to the Committee within 120 days after
the end of the Plan Year (or such other date as may be prescribed by applicable
Labor Regulations).
(C) Retention of Records for Six Years.
Every Person (such as the Trustee, Committee, Insurer, Company or an
accountant) who is subject to a requirement to file any description or report or
to certify any information therefor under Title I of ERISA (whether or not
expressly required to do so by this Agreement), or who would be subject to such
a requirement but for an exemption or simplified reporting requirement under
Section 104(a)(2) or (3) of ERISA, shall maintain records on matters of which
disclosure is required which will provide in sufficient detail the necessary
basic information and data from which the documents thus required may be
verified, explained or clarified, and checked for accuracy and completeness, and
shall include vouchers, worksheets, receipts, and applicable resolutions, and
shall keep such records available for examination for a period of not less than
six (6) years after the filing date of the documents based on the information
which they contain, or six (6) years after the date on which such documents
would have been filed but for the aforesaid exemption or simplified reporting
requirement.
(D) No Reversion.
The assets of the Trust shall never inure to the benefit of the Company and
shall be held for the exclusive purposes of providing benefits to Participants
and their Beneficiaries and defraying reasonable expenses of administering the
Plan; and except as otherwise provided in Article III(F) and (G), the Company
shall not be entitled to receive or recover any part of its contributions to the
Trust or the earnings thereof.
(E) Nonforfeitability, Etc.
In compliance with ERISA and the Code, it is agreed:
(1) A Participant's right to his normal retirement benefits under Article
V(A) shall be Vested upon his attaining his Normal Retirement Age.
XI-1
(2) Upon termination or partial termination of the Plan, or the complete
discontinuance of contributions by the Company under the Plan, the rights of all
affected Participants to Accrued Benefits as of such time (i.e., those accrued
to the date of such event), to the extent then funded or credited, shall be
Vested, except as otherwise required or permitted by applicable Regulations
(e.g., Regulation Section 1.411(d)-2(a)) mentioned in Section 411(d)(3) of the
Code. In addition the Committee in its sole discretion may fully vest the
Matching Company Contributions Accounts and Discretionary Company Contributions
Accounts of a group of Participants because they are affected by a business
divestiture, layoff or other similar transaction, in which case the rules
relating to a partial termination described or referred to above shall apply
(even when a true "partial termination" under Code Section 411(d)(3) has not
occurred).
(3) The Accrued Benefit of a Participant shall never be decreased by an
amendment of the Plan, except an amendment described in Section 412(c)(8) of the
Code and Section 302(c)(8) of ERISA. An amendment which has the effect of
eliminating an optional form of benefit with respect to benefits attributable to
service before the amendment shall be treated as decreasing the Accrued Benefit
of a Participant except as otherwise provided by Treasury Regulations.
(4) The vesting schedule in Article V(C) and any other vesting provision of
this Agreement based thereon shall not be amended unless -
(a) The Vested percentage of the Accrued Benefit derived from the
Discretionary Company Contributions and Matching Company
Contributions (determined as of the later of the date such
amendment is adopted, or the date such amendment becomes
effective) of any Participant is at least equal to such Vested
percentage computed without regard to such amendment; and
(b) Each Participant with at least three Years of Service is
permitted within a period beginning no later than the date such
amendment is adopted, an election complying with the requirements
of Regulation Section 1.411(a)-8T(b) to have his aforesaid Vested
percentage computed without regard to such amendment.
(5) In the case of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan, within the meaning of Section 401(a)(12) of
the Code, each Participant shall (if the Plan then terminates) receive a benefit
immediately after the merger, consolidation, or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation, or transfer (if the Plan had then terminated).
(F) Rollovers; Direct Transfers; Certain Transfers Prohibited.
Subject to Subparagraphs (3) and (4) of this Paragraph (F), but
notwithstanding any contrary provisions of this Agreement, including but not
limited to Articles V, VI and X, but only as and to the extent contemplated by
Sections 402(a)(5), (6) or (7), 403(a)(4), 408(d)(3) or 409(b)(3) of the Code, a
Participant, and in the case of (1) below an Employee who is expected to become
a Participant but has not yet met the eligibility requirements of Article II(A),
shall be entitled -
(1) Subject to the last paragraph of Subparagraph (2) below (prohibiting
certain transfers to this Plan), to transfer (or cause to be transferred) to the
Trust to be held as part of his account (i) the redemption proceeds of a
retirement bond and/or (ii) all or part of the cash and other property or the
proceeds of the same received by him in one or more distributions together
constituting a Lump Sum distribution from or under another tax qualified trust
or tax qualified plan or an employee annuity or custodial account and/or (iii)
an amount paid or distributed out of an individual retirement account or
individual retirement annuity or retirement bond consisting of
XI-2
a prior rollover contribution from a tax qualified trust or annuity plan;
provided, however, that no such transfer will be permitted unless the Committee
determines that such transfer will meet the applicable requirements of the Plan
and will not adversely affect the tax qualified status of the Plan; and/or
(2) Upon at least 60 days' written notice to the Committee, to cause his
entire account to the extent that it has Vested to be transferred in whole or in
part on his behalf (or to him for retransfer), in the form of cash or other
property or the proceeds of the same (in one or more distributions which,
together with any distributions retained by him, constitute a Lump Sum
distribution), to an individual retirement account, an individual retirement
annuity (other than an endowment contract), a tax qualified trust, or an annuity
plan.
The amount so transferred to or from the Trust is herein called a "Rollover
Contribution." Any Rollover Contribution to the Trust, together with the
earnings thereon, shall be fully Vested but need not be segregated from the
remainder of the Participant's account unless the Trustee otherwise elects or
the Participant or Committee otherwise directs. In the case of a transfer
described in (2) above, made to the Participant for retransfer, he shall not
retransfer the portion described in Section 402(e)(4)(D)(i) of the Code
(constituting in effect his own nondeductible employee contributions).
A Participant also shall be entitled to directly transfer to the Trust any
amount described in Subparagraph (1)(ii) above, provided the tax qualified plan
referred to in said Subparagraph (1)(ii) permits such transfer, and to directly
transfer to another tax qualified plan which provides for the acceptance of
direct transfers any amount described in Subparagraph (2) above; provided,
however, that no such direct transfer to or from this Plan will be permitted
unless the Committee makes the same determination with respect to such transfer
as it must make under Subparagraph (1) above with respect to a Rollover
Contribution.
Notwithstanding the foregoing provisions of this Paragraph (F), there shall
not be transferred to this Plan, nor shall this Plan accept, a transfer of
assets from (i) a tax qualified defined benefit plan, (ii) a tax qualified
Defined Contribution Plan which is subject to the funding standards of Section
412 of the Code, including a target benefit plan, or (iii) any other plan to
which clause (iii) of Section 401(a)(11)(B) of the Code applies with respect to
a Participant, which transfer would cause this Plan to be a "direct or indirect
transferee" of such a plan with respect to a Participant within the meaning of
such term as defined in Section 401(a)(11)(B)(iii) of the Code, unless the
Committee directs the Trustee to accept such a transfer of assets in which event
such assets shall be held in a separate fully Vested account for the Participant
which shall be subject to Article VIIA of this Agreement (embodying requirements
relating to the Qualified Joint and Survivor Annuity and Qualified Preretirement
Survivor Annuity forms of payment of benefits.
(3) This Subparagraph (3) and Subparagraph (4) below apply to distributions
made on or after January 1, 1993. Notwithstanding any provision of this
Agreement to the contrary that would otherwise limit a distributee's election
under this Subparagraph (3), a distributee may elect, at the time and in the
manner prescribed by the Committee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
(4) Definitions.
(a) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less
XI-3
frequently than annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; any hardship distribution
described in Code Section 401(k)(2)(B)(i)(IV) and Article
VI(E)(2) of this Agreement made after December 31, 1999 or such
earlier date in 1999 on which the Plan first operates in
accordance with Code Section 402(c)(4) as amended by the
Restructuring and Reform Act of 1998; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the
Code, an individual retirement annuity described in Section
408(b) of the Code, an annuity plan described in Section 403(a)
of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement
annuity.
(c) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan to
the eligible retirement plan specified by the distributee.
(G) Spendthrift Provision.
It is the intention and purpose of the parties to this Agreement to place
the absolute title to the Trust Fund in the Trustee alone, with power and
authority to pay out the same only as provided in this Agreement. Accordingly,
the benefits provided by this Agreement may not be assigned or alienated, within
the meaning of Section 206(d)(1) of ERISA and Section 401(a)(13) of the Code,
except as provided in Paragraph (H) below.
(H) Exceptions to Spendthrift Provision.
It is agreed that:
(1) Paragraph (G) above shall not apply to a loan made under Article VI(F)
to a Participant or Beneficiary if such loan is secured by the Participant's
Accrued Vested Benefit (within the meaning of Section 401(a)(13) of the Code)
and by reason of Section 4975(d) of the Code is exempt from the tax on
prohibited transactions imposed by Section 4975 of the Code.
(2) Paragraph (G) above shall apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, except that effective January 1, 1985
said Paragraph (G) shall not apply if the order is determined by the Committee
to be a qualified domestic relations order (as defined in Section 414(p) of the
Code), and shall not apply to any domestic relations order entered before
January 1, 1985 if the Trust
XI-4
commenced to pay benefits pursuant to such order on or prior to such date, or if
the Trust had not then commenced to pay any such benefits the Committee
determines that such order is valid and compliance with same will not violate
any provision of the Code or adversely affect the tax qualified status of the
Plan. Notwithstanding any restrictions in this Agreement regarding the payment
of benefits prior to the date on which a Participant terminates employment with
the Company, a qualified domestic relations order may provide for payment of
benefits to any "alternate payee" (as defined in Section 414(p)(8) of the Code)
on any date subsequent to the entry of such order and subsequent to a
determination by the Committee that such order is a "qualified domestic
relations order" pursuant to Section 414(p) of the Code, whether or not such
payment would be made prior to the Participant's "earliest retirement age" (as
defined in Section 414(p)(4)(B) of the Code). If a qualified domestic relations
order so provides, the Trustee shall pay benefits to the alternate payee from
the vested portion of a Participant's Account as required by the qualified
domestic relations order.
(3) If a Participant shall so direct the Committee or Trustee in writing,
amounts may be withheld out of his benefits under the Plan (not in excess of 10%
of any benefit payment) to pay for his chargeable portion of group medical,
hospital, accident or life insurance premiums and other group programs, not
necessarily related to insurance, maintained by the Company for the convenience
or welfare of all or part of its active or retired Employees.
(4) Paragraph (G) above shall not apply to any offset of a Participant's
benefits provided under the Plan against an amount that the Participant is
ordered or required to pay to the Plan if -
(a) the order or requirement to pay arises -
(i) under a judgment or conviction for a crime involving the
Plan.
(ii) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in
connection with a violation (or alleged violation of part 4
of subtitle B of title I of ERISA (dealing with fiduciary
responsibility), or
(iii) pursuant to a settlement agreement between the Secretary of
Labor and the Participant, or a settlement agreement
between the Pension Benefit Guaranty Corporation and the
Participant, in connection with a violation (or alleged
violation) of part 4 of such subtitle by a fiduciary or any
other person.
(b) the judgment, order, decree, or settlement agreement expressly
provides for the offset of all or part of the amount ordered or
required to be paid to the Plan against the Participant's
benefits provided under the Plan, and
(c) the judgment, order or decree is issued or entered, and the
settlement agreement was entered into, on or after August 5,
1997.
(I) Execution of Instruments.
Except as in this Agreement otherwise expressly provided, any instrument or
document to be delivered or furnished by the Company shall be sufficiently
executed if executed in the name of the Company by any officer or officers
thereof; or, where furnished or delivered by the Committee, if executed in the
name of the Committee by any member thereof; or where furnished or delivered by
the Trustee, if executed as follows:
(1) If the Trustee consists of two or more Persons, if executed in the
Trustee's name by any such Person, and
XI-5
(2) In the case of any corporate Trustee (whether or not the sole Trustee),
if executed as Trustee in the name of such corporation by any officer or
officers thereof;
provided, further, that any Administrative Party shall be fully protected in
relying upon any instrument or document so executed; and execution as aforesaid
shall create a strong presumption that any signature so affixed is duly
authorized and that any information contained in such instrument or document is
true and correct.
(J) Successors, Etc.
This Agreement shall be binding upon, and inure to the benefit of, the
Company and (subject to Article X(A)) its successors, the Trustee and its
successors, the Committee as from time to time constituted, and the Participants
and Beneficiaries, their heirs, personal representatives, successors, and
assigns, all in accordance with and subject to the terms of this Agreement.
(K) Payment in Kind.
Benefits payable pursuant to the Plan, whether under Article V or VI may be
paid in cash or in kind, except as in this Agreement otherwise expressly
provided. If paid in kind, the assets distributed shall be valued in the manner
described in Article IX(H).
(L) Miscellaneous Protective Provisions.
It is further agreed, that, except as otherwise provided in this Agreement
or ERISA -
(1) Any Administrative Party may request and rely upon an opinion of
counsel, who may or may not be counsel for the Company, and shall be fully
protected for any action taken, suffered or omitted in good faith reliance upon
such opinion.
(2) No recourse under this Agreement, or for any action or nonaction
hereunder, or for any loss or diminution of the Trust Fund, or for any payment
or nonpayment of benefits, or for any other reason whatsoever relating to the
Plan, shall be had by any Person whomsoever against any individual in his
capacity as stockholder, officer, director or employee of the Company, past,
present or future.
(3) Where the establishment of any fact is in question, any Administrative
Party may in its discretion accept as evidence thereof any properly executed
instrument or document furnished by any other Administrative Party or such other
evidence as may seem reasonable in the circumstances.
(4) Nothing contained in this Agreement shall be deemed, construed or
interpreted as conferring upon, or giving or granting to, any Employee any legal
or other rights of any conceivable kind or character whatsoever to be retained
in the employ of the Company or shall affect or impair the right of the Company
to control Employees or to discipline or discharge Employees at any time.
(M) No Duress or Retaliation Against Participants, Etc.
No Participant or Beneficiary shall be discharged, fined, suspended,
expelled, disciplined, or discriminated against for exercising any right to
which he is entitled under this Agreement, ERISA, or the federal Welfare and
Pension Plan Disclosure Act, or for the purpose of interfering with the
attainment of any right to which such Participant may become entitled
thereunder; nor shall any Participant or Beneficiary (through the use of fraud,
force, violence, or threat of such use) be restrained, coerced, or intimidated
(nor shall there be any attempt so to do) for the
XI-6
purpose of interfering with or preventing the exercise of any right to which he
is or may become entitled under this Agreement, ERISA, or said Disclosure Act;
nor shall any Person be discharged, fined, suspended, expelled, or discriminated
against because he has given information or has testified or is about to testify
in any inquiry or proceeding relating to ERISA or said Disclosure Act.
(N) Record Keeping, Investigations, Etc.
The Company and each Fiduciary, Committee member, and other appropriate
Person shall maintain such books and records pertaining to the Plan and Trust,
make them available for inspection, file such information, and submit to such
investigations as are properly required by the Secretary of Labor or his
delegate pursuant to Section 504 or Section 505 of ERISA.
(O) Distributions to Minors and Incompetent or Missing Individuals.
If any individual to whom benefits shall be distributable under the Plan
shall be a minor, adjudged mentally incompetent or cannot reasonably be located,
the Committee may direct the Trustee to distribute such benefits by one or more
of the following methods, to be determined by the Committee: (1) directly to
such minor or incompetent individual; (2) to the guardian of such individual;
(3) to another Person for the use or benefit of such individual; (4) by the
Trustee or Committee, or their agents, expending, or arranging for the
expenditure of, such benefits for the education, health or maintenance of such
individual; or (5) to a bank account established on behalf of such individual.
Except as to (4) above, neither the Committee nor Trustee shall be required to
see to the application of any such distributions. Distributions made pursuant to
this Paragraph (O) shall operate as a complete discharge of the Trustee, the
Committee and the Trust Fund. Also, if the Committee determines after reasonable
efforts to locate an individual who is entitled to a distribution of all or part
of an account balance under the Plan that such individual cannot be located, the
amount payable to such individual may, if the Committee so determines, be
forfeited as of the Anniversary Date falling within the Plan Year of such
determination and be allocated among the accounts of the Participants in the
same manner as a forfeiture under Article IV(Q)(1). However, in such event if
the individual entitled to a distribution of the forfeited amount subsequently
makes a claim for the same, it shall be reinstated out of forfeitures, if any,
for the Plan Year in which the claim is made and/or an additional contribution
to the Trust by the Company for such Plan Year and shall be paid to such
individual in accordance with the Plan.
(P) Expenses and Compensation.
Subject to Article IX -
(1) Members of the Committee shall serve without compensation, but the
Trustee shall be paid compensation in such amount and manner as may from time to
time be mutually agreed between the Trustee and the Company.
(2) The expenses of the Trustee and Committee, including but not limited to
legal fees and the Trustee's compensation, shall be paid by the Company:
(a) Although it is intended that expenses shall be paid by the
Company, the Trust Fund guarantees that they shall in all events
be paid in full when due, and a lien for such payment is hereby
impressed upon the Trust Fund; provided that no individual
Trustee who already receives full-time pay from the Company shall
receive from the Trust Fund any compensation for his services as
Trustee, excepting reimbursement of expenses properly and
actually incurred.
XI-7
(b) Notwithstanding any provision to the contrary, any expenses which
the Trustee or Committee may incur with special reference to any
Participant or his account (including any Fixed Account) shall
first be charged against such account to the extent that the same
is sufficient for such purpose. Any balance of said special
expenses shall then be charged to the Company or the Trust Fund
pursuant to (a) above but shall if possible be later reimbursed
to the Company or the Trust Fund out of future credits to such
Participant's account.
XI-8
Article XII. Insurance Provisions
(A) No Life Insurance.
No portion of the Trust Fund shall be invested in life insurance policies,
and any reference to life insurance policies or contracts elsewhere in this
Agreement shall be disregarded.
XII-1
Article XIII. Top-Heavy Rules
(A) Application; Top-Heavy Status.
Notwithstanding any other provision of the Plan to the contrary, the
provisions of Article XIII(B) shall apply for any Plan Year beginning after
December 31, 1983 in which the Plan is determined to be Top-Heavy as of the
Determination Date, in accordance with the following:
(1) Required Aggregation of Plans. If the Company and any Related Companies
maintain one or more tax qualified plans in addition to this Plan, then there
shall be aggregated for purposes of this Article XIII(A) those of such plans -
(a) in which a Key Employee is a participant, and
(b) which enable any plan in which a Key Employee is a participant to
meet the nondiscrimination requirements of Section 401(a)(4) of
the Code or the minimum participation standards of Section 410 of
the Code.
All such plans shall be referred to in this Article XIII as the "Required
Aggregation Group". There also must be aggregated with the aforesaid plans and
considered as included in the Required Aggregation Group any other tax qualified
plan which was maintained by the Company or a Related Company within the five
Plan Years ending on the Determination Date and would be part of the Required
Aggregation Group for the Plan Year but for the fact that such plan terminated
before the Determination Date.
(2) Permissive Aggregation of Plans. If the Company and any one or more
Related Companies maintain one or more tax qualified plans in addition to this
Plan and any other plan or plans in the Required Aggregation Group then there
may be aggregated with this Plan, or with the plans in the Required Aggregation
Group, any of such additional plans which, when so aggregated, continue to meet
the requirements of Sections 401(a)(4) and 410 of the Code (the "Permissive
Aggregation Group"). There also may be aggregated with the aforesaid plans and
considered as included in the Permissive Aggregation Group any other tax
qualified plan which was maintained by the Company or a Related Company within
the five Plan Years ending on the Determination Date and could be part of the
Permissive Aggregation Group for the Plan Year but for the fact that such plan
terminated before the Determination Date.
(3) Key Employees. Key Employees shall mean and include all employees and
former employees (and the beneficiaries of all employees and former employees)
who are or were one or more of the following during the five Plan Years ending
on the Determination Date:
(a) officers of the Company or any Related Company having annual
compensation greater than 50 percent of the Adjusted Equivalent
of the amount in effect under Section 415(b)(1)(A) of the Code
for such Plan Year, provided that no more than 50 employees (or
if lesser, the greater of (i) three or (ii) 10% of the employees)
shall be treated as officers, and provided that employees
described in Section 414(q)(8) of the Code shall be excluded;
(b) one of the ten employees owning (or considered as owning within
the meaning of Section 318 of the Code) both more than a one-half
percent interest and the largest interests in the Company and any
Related Company, as further defined in Section 416(i)(1)(A)(ii)
of the Code and the Treasury Regulations thereunder, having
annual compensation greater than the Adjusted Equivalent of
$30,000, provided that if two or more employees own the same
interest, the employee having greater annual compensation shall
be treated as owning the greater interest;
XIII-1
(c) five percent owners of the Company; or
(d) one percent owners of the Company having annual compensation from
the Company and any Related Company of more than $150,000 per
year.
For purposes of (a), (b) and (d) above, "compensation" means Creditable
Compensation as that term is defined in Article I(A)(13). For purposes of (c)
and (d) above, "owner" shall have the same meaning as in Section 416(i)(1)(B) of
the Code. Also, for purposes of determining ownership in the Company under (b),
(c) and (d) above, the aggregation rules of subsections (b), (c) and (m) of
Section 414 of the Code shall not apply.
An employee who is identified as a Key Employee under more than one
category shall nevertheless be counted as one Key Employee. A Non-Key Employee
who is also the beneficiary of a Key Employee shall be counted as a Key
Employee, but only the Accrued Benefit attributable to the Key Employee shall be
counted in determining Top-Heavy status.
(4) Accrued Benefits. For purposes of this Article XIII(A), Accrued
Benefits for all defined benefit plans required or permitted to be aggregated
under (1) and (2) above shall mean the Actuarial Equivalent (which shall be the
same for all plans being aggregated) of the Accrued Benefit determined as of the
actuarial valuation date preceding or coinciding with the Determination Date. If
there is no method of computing Accrued Benefits that uniformly applies for all
such plans, then solely for the purposes of this Article XIII(A), the Accrued
Benefit of an employee other than a Key Employee shall be determined as if his
benefits accrued not more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Section 411(b)(1)(C) of the Code.
For all defined contribution plans required or permitted to be so
aggregated, Accrued Benefits shall mean the balance in the employer and employee
contribution accounts (excluding amounts attributable to deductible employee
contributions) as of the Determination Date, and shall for all plans include:
(a) distributions to any employee during the five Plan Years ending
on the Determination Date;
(b) rollovers during the five Plan Years ending on the Determination
Date which were initiated by the employee and transferred to a
tax qualified plan maintained by an employer other than the
Company or a Related Company made from this Plan and rollovers
which were initiated by the employee and transferred to this Plan
prior to January 1, 1984 but not such rollovers which were
accepted by this Plan after December 31, 1983; and
(c) rollovers to this Plan which were either not initiated by the
employee or were made from another tax qualified plan maintained
by the Company or any Related Company, but not rollovers made
from this Plan to another tax qualified plan maintained by the
Company or a Related Company or from this Plan to another tax
qualified plan and not initiated by the employee.
(5) Top-Heavy Determination. There shall be computed, as of the
Determination Date, the sum of all Accrued Benefits for all Key Employees and
the sum of all Accrued Benefits of all employees. Such computation shall be made
separately for each plan required or permitted to be aggregated with this Plan,
as of the determination date (as defined in each such plan) which falls within
the calendar year in which the Determination Date falls. If the following ratio-
the sum of all Accrued Benefits for all Key Employees
-----------------------------------------------------
the sum of all Accrued Benefits for all Employees
XIII-2
for this Plan if it is the only tax qualified plan maintained by the Company and
any Related Company, or for all plans in any Required Aggregation Group, is
greater than sixty percent (60%), then this Plan and all plans in any Required
Aggregation Group is (are) Top-Heavy, effective on the first day of the Plan
Year. If such ratio for all tax qualified plans in any Permissive Aggregation
Group is 60% or less, then neither this Plan (nor any other plan in such
Permissive Aggregation Group) is (are) Top-Heavy for the Plan Year. For purposes
of the foregoing computation, there shall be excluded the Accrued Benefits of:
(a) former Key Employees, i.e., persons who were Key Employees but
who have not fulfilled the definition of Key Employee at any time
during the five Plan Years ending on the Determination Date), and
(b) former employees who have not performed any service for the
Company or a Related Company during the five Plan Years ending on
the Determination Date.
(B) Effect of Top-Heavy Status.
(1) Minimum Contribution. For any Plan Year in which the Plan is Top-Heavy
the following shall apply:
(a) The amount of Company Contributions and forfeitures allocated
pursuant to Article IV to the account of each Participant who is
a Non-Key Employee and is not a participant in a Defined Benefit
Plan of the Company shall not, when expressed as a percentage of
such Participant's Compensation for such Plan Year, be less than
the lesser of:
(i) three percent (3%), or
(ii) the percentage for the Key Employee for whom such percentage
is the highest
minus the amount of Company (or Related Company) contributions
plus forfeitures allocated to such Participant's account(s) under
any other Qualified Defined Contribution Plan(s) maintained by
the Company or by a Related Company, if any; provided, however,
that subparagraph (ii) above shall not apply in any Plan Year in
which this Plan is required to be aggregated with a Qualified
Defined Benefit Plan in order to enable such plan to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
(b) For purposes of this paragraph (1) --
(i) The appropriate minimum allocations under this paragraph
shall be made to the account of each active and inactive
Participant who is a Non-Key Employee, has not Separated
from Service as of the Anniversary Date falling within such
Plan Year and is not a participant in a Defined Benefit Plan
of the Company; and
(ii) This and any other Qualified Defined Contribution Plan(s)
maintained by the Company or by a Related Company shall be
treated as a single plan.
(c) Notwithstanding the foregoing, any elective contributions made on
behalf of Non-Key Employees under a cash or deferred arrangement
maintained by the Company, including this Plan, if applicable,
shall not be treated as Company Contributions for purposes of
meeting the minimum contribution requirement. However, any
elective contributions made on behalf of Key Employees under this
Plan shall be treated as Company Contributions for purposes of
meeting the minimum contribution requirement.
XIII-3
(d) For any Plan Year in which the Plan is Top-Heavy the Defined
Benefit Plan of the Company shall provide the minimum benefit
described in Section 416(h)(A)(ii)(I) of the Code and the
Treasury Regulations issued thereunder for each Participant in
such an arrangement who is Non-Key Employee and who also
participates in such Defined Benefit Plan.
(2) Vesting. Commencing with the first day of the first Plan Year in which
the Plan is Top-Heavy, Article V(C)(1) shall be amended to read as follows:
"(1) Such Participant shall be entitled only to a percentage of the
balance in his account based upon the number of his full Years of Service, as
follows:
Years of Service Percentage Vesting
less than 2 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 or more 100%
The foregoing Vesting schedule shall apply to all Plan Years after the Plan
first becomes Top-Heavy, whether or not the Plan is Top-Heavy for that Plan
Year. Such Vesting schedule shall not apply to any Participant who fails to
perform an Hour of Service for the Company on or after the day the Plan first
becomes Top-Heavy.
(3) Section 415 Fractions; Reductions To 1.0 if Plan Becomes Super
Top-Heavy. For any Plan Year in which the Plan is Top-Heavy, the figure 1.0
shall replace the figure 1.25 in the definitions of Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction in Article IV (and in Sections
415(e)(2)(B) and 415(e)(3)(B) of the Code), except for Plan Years as to which
the Plan is not Super Top-Heavy. For purposes of this subparagraph (b), a plan
is "Super Top-Heavy" if (and only if) it fails the ninety percent test mentioned
in Section 416(h)(2)(B) of the Code, i.e., if (and only if) it would meet the
"Top-Heavy" definition in Article XIII(A)(5) above if the phrase "sixty percent"
therein were replaced by "ninety percent" wherever it appears.
(C) Definitions.
For purposes of this Article XIII, the following definitions apply:
(1) "Determination Date" means the last day of the preceding Plan Year or,
for the first Plan Year, the last day of such Plan Year.
(2) "Non-Key Employee" means any employee who is not a Key Employee and the
beneficiary of any Non-Key Employee.
XIII-4