WESTERN REGION 401K PLAN
THREE RIVERS BANK AND TRUST COMPANY
401(K) PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS. . . . . . . . . . . . . 14
2.2 DETERMINATION OF TOP HEAVY STATUS. . . . . . . . . . 15
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER. . . . . 18
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY. . . . . . . 19
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES. . . . 19
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . 19
2.7 RECORDS AND REPORTS. . . . . . . . . . . . . . . . . 21
2.8 APPOINTMENT OF ADVISERS. . . . . . . . . . . . . . . 21
2.9 INFORMATION FROM EMPLOYER. . . . . . . . . . . . . . 21
2.10 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . 21
2.11 MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . 21
2.12 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . 22
2.13 CLAIMS REVIEW PROCEDURE. . . . . . . . . . . . . . . 22
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY. . . . . . . . . . . . . . 23
3.2 APPLICATION FOR PARTICIPATION. . . . . . . . . . . . 23
3.3 EFFECTIVE DATE OF PARTICIPATION. . . . . . . . . . . 23
3.4 DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . 23
3.5 TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . 24
3.6 OMISSION OF ELIGIBLE EMPLOYEE. . . . . . . . . . . . 24
3.7 INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . 24
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION. . . 24
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION. . . . . . . 25
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . 28
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS . . . . . . . . . . . . . . . . . . . . . . 29
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . 32
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . 35
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . 36
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE
TESTS. . . . . . . . . . . . . . . . . . . . . . . . 39
4.9 MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . 42
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS . . . . . 47
4.11 TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . 48
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND. . . . . . . . . . . . . 50
5.2 METHOD OF VALUATION. . . . . . . . . . . . . . . . . 50
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT. . . . . . 50
6.2 DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . 51
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY . . 52
6.4 DETERMINATION OF BENEFITS UPON TERMINATION . . . . . 52
6.5 DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . 57
6.6 DISTRIBUTION OF BENEFITS UPON DEATH. . . . . . . . . 60
6.7 TIME OF SEGREGATION OR DISTRIBUTION. . . . . . . . . 63
6.8 DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . 63
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . 63
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP. . . . . . . . . . 64
6.11 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS. . . . . . 65
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE. . . . . . . . 66
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE. . . . . 66
7.3 OTHER POWERS OF THE TRUSTEE. . . . . . . . . . . . . 67
7.4 LOANS TO PARTICIPANTS. . . . . . . . . . . . . . . . 69
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS . . . . . . 70
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES. . . . 71
7.7 ANNUAL REPORT OF THE TRUSTEE . . . . . . . . . . . . 71
7.8 AUDIT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE . . . 73
7.10 TRANSFER OF INTEREST . . . . . . . . . . . . . . . . 74
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . 74
8.2 TERMINATION. . . . . . . . . . . . . . . . . . . . . 75
8.3 MERGER OR CONSOLIDATION. . . . . . . . . . . . . . . 75
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . 75
9.2 ALIENATION . . . . . . . . . . . . . . . . . . . . . 76
9.3 CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . 77
9.4 GENDER AND NUMBER. . . . . . . . . . . . . . . . . . 77
9.5 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . 77
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . 77
9.7 BONDING. . . . . . . . . . . . . . . . . . . . . . . 78
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . 78
9.9 INSURER'S PROTECTIVE CLAUSE. . . . . . . . . . . . . 78
9.10 RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . 78
9.11 ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . 79
9.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY . . . . . . . . . . . . . . . . . . . 79
9.13 HEADINGS . . . . . . . . . . . . . . . . . . . . . . 79
9.14 APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . 80
9.15 UNIFORMITY . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS. . . . . . . . . . . . . 80
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS. . . . . . . 80
10.3 DESIGNATION OF AGENT . . . . . . . . . . . . . . . . 81
10.4 EMPLOYEE TRANSFERS . . . . . . . . . . . . . . . . . 81
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION. . . . . . . . 81
10.6 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . 82
10.7 DISCONTINUANCE OF PARTICIPATION. . . . . . . . . . . 82
10.8 ADMINISTRATOR'S AUTHORITY. . . . . . . . . . . . . . 82
THREE RIVERS BANK AND TRUST COMPANY
401(K) PLAN
THIS AGREEMENT, hereby made and entered into this 12th
day of September, 1989, by and between Three Rivers Bank and
Trust Company (herein referred to as the "Employer") and Three
Rivers Bank and Trust Company (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit
Sharing Plan and Trust effective March 1, 1988, (hereinafter
called the "Effective Date") known as Three Rivers Bank and Trust
Company Savings/Investment Plan and which plan shall hereinafter
be known as Three Rivers Bank and Trust Company 401(k) Plan
(herein referred to as the "Plan") in recognition of the
contribution made to its successful operation by its employees
and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has
the ability to amend the Plan, provided the Trustee joins in such
amendment if the provisions of the Plan affecting the Trustee are
amended;
NOW, THEREFORE, effective January 1, 1989, except as
otherwise provided, the Employer and the Trustee in accordance
with the provisions of the Plan pertaining to amendments thereof,
hereby amend the Plan in its entirety and restate the Plan to
provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act
of 1974, as it may be amended from time to time.
1.2 "Administrator" means the person designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf
of the Employer.
1.3 "Affiliated Employer" means the Employer and any
corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes
the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in
Code Section 414(m)) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each
Participant, the value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee
contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a
deceased Participant's total account is payable, subject to the
restrictions of Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as
amended or replaced from time to time.
1.8 "Compensation" with respect to any Participant means
total compensation paid by the Employer for a Plan Year.
However, prior to July 1, 1989, Compensation means base
compensation. Amounts contributed by the Employer under the
within Plan, except for an Employee's Compensation that is
deferred pursuant to Section 4.2, and any non-taxable fringe
benefits provided by the Employer shall not be considered as
Compensation.
For purposes of this Section, the determination of
Compensation shall be made without regard to salary reduction
contributions made on behalf of an Employee to a plan maintained
under Code Section 125.
For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.
Compensation in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and
in such manner as permitted under Code Section 415(d). In
applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as
a single Participant, except that for this purpose Family Members
shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before
the close of the year.
For Plan Years beginning prior to January 1, 1989, the
$200,000 limit (without regard to Family Member aggregation)
shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.9 "Contract" or "Policy" means a life insurance policy or
annuity contract (group or individual) issued by the insurer as
elected.
1.10 "Deferred Compensation" with respect to any Participant
means that portion of the Participant's total Compensation which
has been contributed to the Plan in accordance with the
Participant's deferral election pursuant to Section 4.2.
1.11 "Early Retirement Date" means the first day of the
month (prior to the Normal Retirement Date) coinciding with or
following the date on which a Participant or Former Participant
attains his 55 birthday. A Participant shall become fully Vested
upon satisfying this requirement.
1.12 "Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to the
Participant's deferral election provided in Section 4.2. In
addition, any Employer Qualified Non-Elective Contribution
pursuant to Section 4.6 shall be considered an Elective
Contribution for purposes of the Plan. Elective Contributions
shall be subject to the requirements of Sections 4.2(b) and
4.2(c) and shall further be required to satisfy the
discrimination requirements of Regulation 1.401(k)-l(b)(3), the
provisions of which are specifically incorporated herein by
reference.
1.13 "Eligible Employee" means any Employee who has
satisfied the provisions of Section 3.1.
1.14 "Employee" means any person who is employed by the
Employer, but excludes any person who is employed as an
independent contractor. Employee shall include leased employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2)
unless such leased employees are covered by a plan described in
Code Section 414(n)(5) and such leased employees do not
constitute more than 20% of the recipient's non-highly
compensated work force.
1.15 "Employer" means Three Rivers Bank and Trust Company
and any Participating Employer (as defined in section 10.1) which
shall adopt this Plan; any successor which shall maintain this
Plan; and any predecessor which has maintained this Plan. The
Employer is a corporation, with principal offices in the
Commonwealth of Pennsylvania.
1.16 "Excess Aggregate Contributions" means, with respect to
any Plan Year, the excess of the aggregate amount of the Employer
matching contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7(c) on behalf of Highly
Compensated Participants for such Plan Year, over the maximum
amount of such contributions permitted under the limitations of
Section 4.7(a).
1.17 "Excess Contributions" means, with respect to a Plan
Year, the excess of Elective Contributions made on behalf of
Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section
4.5(a). Excess Contributions shall be treated as an "annual
addition" pursuant to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to
any taxable year of a Participant, the excess of the aggregate
amount of such Participant's Deferred Compensation and the
elective deferrals pursuant to Section 4.2(f) actually made on
behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation
shall be treated as an "annual addition" pursuant to Section
4.9(b).
1.19 "Family Member" means, with respect to an affected
Participant, such Participant's spouse, such Participant's lineal
descendants and descendants and their spouses, all as described
in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control
respecting management or disposition of its assets, (b) renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the
Plan or has any authority or responsibility to do so, or (c) has
any discretionary authority or discretionary responsibility in
the administration of the Plan, including, but not limited to,
the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of
12 months commencing on January 1st of each year and ending the
following December 31st.
1.22 "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of
a Participant's Account, or
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in
Service.
1.23 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any
reason.
1.24 "415 Compensation" means compensation as defined in
Section 4.9(d).
1.25 "414(s) Compensation" with respect to any Employee
means his Deferred Compensation plus "415 Compensation" paid
during a Plan Year. The amount of "414(s) Compensation" with
respect to any Employee shall include "414(s) Compensation"
during the entire twelve (12) month period ending on the last day
of such Plan Year.
For purposes of this Section, the determination of
"414(s) Compensation" shall be made without regard to salary
reduction contributions made on behalf of an Employee to a plan
maintained under Code Section 125.
"414(s) Compensation" in excess of $200,000 shall be
disregarded. Such amount shall be adjusted at the same time and
in such manner as permitted under Code Section 415(d). However,
for Plan Years beginning prior to January 1, 1989, the $200,000
limit shall apply only for Top Heavy Plan Years and shall not be
adjusted.
1.26 "Highly Compensated Employee" means an Employee who
performed services for the Employer during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" as defined in Section 1.32(c).
(b) Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during
the "look-back year" from the Employer in excess of $50,000
and were in the Top Paid Group of Employees for the Plan
Year.
(d) Employees who during the "look-back year" were
officers of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year" from
the Employer greater than 50 percent of the limit in effect
under Code Section 415(b)(1)(A) for any such Plan Year. The
number of officers shall be limited to the lesser of (i) 50
employees; or (ii) the greater of 3 employees or 10 percent
of all employees. If the Employer does not have at least
one officer whose annual "415 Compensation" is in excess of
50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of the
100 Employees paid the greatest "415 Compensation" during
the "determination year" and are also described in (b), (c)
or (d) above when these paragraphs are modified to
substitute "determination year" for "look-back year".
The "look-back year" shall be the calendar year ending
with or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable) shall be
the period of time, if any, which extends beyond the "look-back
year" and ends on the last day of the Plan Year for which testing
is being performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold amounts
specified in (b), (c) and (d) above shall be prorated based upon
the number of months in the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made without regard to Code Sections 125,
402(a)(8), 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). Additionally, the dollar
threshold amounts specified in (b) and (c) above shall be
adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar
limits which shall be applied are those for the calendar year in
which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee,
all Affiliated Employers shall be taken into account as a single
employer and leased employees within the meaning of Code Sections
414(n) (2) and 414(o) (2) shall be considered Employees unless
such leased employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. In addition, Highly Compensated
Former Employees shall be treated as Highly Compensated Employees
without regard to whether they performed services during the
"determination year".
1.27 "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination
year" and was a Highly Compensated Employee in the year of
separation from service or in any "determination year" after
attaining age 55. Notwithstanding the foregoing, an Employee who
separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year
(or year preceding the separation year) or any year after the
Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner".
For purposes of this Section, "determination year", "415
Compensation" and "five percent owner" shall be determined in
accordance with Section 1.26. Highly Compensated Former Employees
shall be treated as Highly Compensated Employees.
1.28 "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer for the performance of duties during
the applicable computation period; (2) each hour for which an
Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the
employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury
duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period; (3) each hour for which
back pay is awarded or agreed to by the Employer without regard
to mitigation of damages. The same Hours of Service shall not be
credited both under (1) or (2), as the case may be, and under
(3).
Notwithstanding the above, (i) no more than 501 Hours
of Service are required to be credited to an Employee on account
of any single continuous period during which the Employee
performs no duties (whether or not such period occurs in a single
computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is not required
to be credited to the Employee if such payment is made or due
under a plan maintained solely for the purpose of complying with
applicable worker's compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by
the Employee.
For purposes of this Section, a payment shall be deemed
to be made by or due from the Employer regardless of whether such
payment is made by or due from the Employer directly, or
indirectly through, among others, a trust fund, or insurer, to
which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are
on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for
purposes of accrued benefits, a 1-Year Break in Service, and
employment commencement date (or reemployment commencement date).
The provisions of Department of Labor regulations 2530.200b-2(b)
and (c) are incorporated herein by reference.
1.30 "Income" means the income allocable to "excess amounts"
which shall equal the sum of the allocable gain or loss for the
"applicable computation period" and the allocable gain or loss
for the period between the end of the "applicable computation
period" and the date of distribution ("gap period"). The income
allocable to "excess amounts" for the "applicable computation
period" and the "gap period" is calculated separately and is
determined by multiplying the income for the "applicable
computation period" or the "gap period" by a fraction. The
numerator of the fraction is the "excess amount" for the
"applicable computation period". The denominator of the fraction
is the total "account balance" attributable to "Employer
contributions" as of the end of the "applicable computation
period"-or the "gap period", reduced by the gain allocable to
such total amount for the "applicable computation period" or the
"gap period" and increased by the loss allocable to such total
amount for the "applicable computation period" or the "gap
period". The provisions of this Section shall be applied:
(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess
amounts";
(2) "taxable year of the Participant" for
"applicable computation period";
(3) "Deferred Compensation" for "Employer
contributions"; and
(4) "Participant's Elective Account" for "account
balance".
(b) For purposes of Section 4.6(a), by substituting:
(1) "Excess Contributions" for "excess amount";
(2) "Plan Year" for "applicable computation
period";
(3) "Elective Contributions" for "Employer
contributions"; and
(4) "Participant's Elective Account" for "account
balance".
(c) For purposes of Section 4.8(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess
amounts";
(2) "Plan Year" for "applicable computation
period";
(3) "Employer matching contributions made
pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into
account pursuant to Section 4.7(c)" for "Employer
contributions"; and
(4) "Participant's Account" for "account
balance".
In lieu of the "fractional method" described above, a
"safe harbor method" may be used to calculate the allocable
Income for the "gap period". Under such "safe harbor method",
allocable Income for the "gap period" shall be deemed to equal
ten percent (10%) of the Income allocable to "excess amounts" for
the "applicable computation period" multiplied by the number of
calendar months in the "gap period". For purposes of determining
the number of calendar months in the "gap period", a distribution
occurring on or before the fifteenth day of the month shall be
treated as having been made on the last day of the preceding
month and a distribution occurring after such fifteenth day shall
be treated as having been made on the first day of the next
subsequent month.
Income allocable to any distribution of Excess Deferred
Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of the taxable
year of the Participant to the date on which the distribution is
made pursuant to either the "fractional method" or the "safe
harbor method".
Notwithstanding the above, for "applicable computation
periods" which began in 1987, Income during the "gap period"
shall not be taken into account.
1.31 "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b)
acknowledges fiduciary responsibility to the Plan in writing.
Such entity must be a person, firm, or corporation registered as
an investment adviser under the Investment Advisers Act of 1940,
a bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder. Generally, any
Employee or former Employee (as well as each of his
Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or
any of the preceding four (4) Plan Years, has been included in
one of the following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than
50 percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning
of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered
as owning within the meaning of Code Section 318) more than
five percent (5%) of the outstanding stock of the Employer
or stock possessing more than five percent (5%) of the total
combined voting power of all stock of the Employer or, in
the case of an unincorporated business, any person who owns
more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or
is considered as owning within the meaning of Code Section
318) more than one percent (I%) of the outstanding stock of
the Employer or stock possessing more than one percent (1%)
of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o)
shall be treated as separate employers. However, in
determining whether an individual has "415 Compensation" of
more than $150,000, "415 Compensation" from each employer
required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made without regard to Code Sections 125,
402(a)(8), 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).
1.33 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual
Retirement Date after having reached his Normal Retirement Date.
1.34 "Non-Elective Contribution" means the Employer's
contributions to the Plan excluding, however, contributions made
pursuant to the Participant's deferral election provided for in
Section 4.2 and any Qualified Non-Elective Contribution.
1.35 "Non-Highly Compensated Participant" means any
Participant who is neither a Highly Compensated Employee nor a
Family Member.
1.36 "Non-Key Employee" means any Employee or former
Employee (and his Beneficiaries) who is not a Key Employee.
1.37 "Normal Retirement Date" means the first day of the
month coinciding with or next following the Participant's Normal
Retirement Age (65th birthday). A Participant shall become fully
Vested in his Account upon attaining his Normal Retirement Age.
1.38 "1-Year Break in Service" means the applicable
computation period during which an Employee has not completed
more than 500 Hours of Service with the Employer. Further,
solely for the purpose of determining whether a Participant has
incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and
paternity leaves of absence."
"Authorized leave of absence" means an unpaid,
temporary cessation from active employment with the Employer
pursuant to an established nondiscriminatory policy, whether
occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for
Plan Years beginning after December 31, 1984, an absence from
work for any period by reason of the Employee's pregnancy, birth
of the Employee's child, placement of a child with the Employee
in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately
following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary
to prevent the Employee from incurring a 1-Year Break in Service,
or, in any other case, in the immediately following computation
period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which
the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity
leave of absence" shall not exceed 501.
1.39 "Participant" means any Eligible Employee who
participates in the Plan as provided in Sections 3.2 and 3.3, and
has not for any reason become ineligible to participate further
in the Plan.
1.40 "Participant's Account" means the account established
and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting
from the Employer's Non-Elective Contributions.
A separate accounting shall be maintained with respect
to that portion of the Participant's Account attributable to
Employer matching contributions made pursuant to Section 4.1(b)
and Employer discretionary contributions made pursuant to Section
4.1(c).
1.41 "Participant's Combined Account" means the total
aggregate amount of each Participant's Elective Account and
Participant's Account.
1.42 "Participant's Elective Account" means the account
established and maintained by the Administrator for each
Participant with respect to his total interest in the Plan and
Trust resulting from the Employer's Elective Contributions. A
separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to
Elective Contributions pursuant to Section 4.2 and any Employer
Qualified Non-Elective Contributions.
1.43 "Plan" means this instrument, including all amendments
thereto.
1.44 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January 1st of each year and ending the
following December 31st.
1.45 "Pre-Retirement Survivor Annuity" is an immediate
annuity for the life of the Participant's spouse the payments
under which must be equal to the amount of benefit which can be
purchased with the accounts of a Participant used to provide the
death benefit under the Plan.
1.46 "Qualified Non-Elective Contribution" means the
Employer's contributions to the Plan that are made pursuant to
Section 4.6. Such contributions shall be considered an Elective
Contribution for the purposes of the Plan and used to satisfy the
"Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan
that are made pursuant to Section 4.8(g) which are used to
satisfy the "Actual Contribution Percentage" tests shall be
considered Qualified Non-Elective Contributions and be subject to
the provisions of Sections 4.2(b) and 4.2(c).
1.47 "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and
as amended from time to time.
1.48 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits
under the Plan.
1.49 "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on a Participant's
Normal Retirement Date, Early or Late Retirement Date (see
Section 6.1).
1.50 "Super Top Heavy Plan" means a plan described in
Section 2.2(b).
1.51 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than
by death, Total and Permanent Disability or retirement.
1.52 "Top Heavy Plan" means a plan described in Section
2.2(a).
1.53 "Top Heavy Plan Year" means a Plan Year commencing
after December 31, 1983 during which the Plan is a Top Heavy
Plan.
1.54 "Top Paid Group" means the top 20 percent of Employees
who performed services for the Employer during the applicable
year, ranked according to the amount of "415 Compensation"
received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and
leased employees within the meaning of Code Sections 414(n)(2)
and 414(o)(2) shall be considered Employees unless such leased
employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by
the Employer. For the purpose of determining the number of
active Employees in any year, the following Employees shall be
excluded. However, such Employees shall still be considered for
the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2 hours
per week;
(c) Employees who normally work less than six (6)
months during a year;
(d) Employees who have not yet attained age 21; and
(e) Employees who are non-resident aliens and who
received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United
States source income within the meaning of Code Section
861(a)(3).
In addition, if 90 percent or more of the Employees of
the Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both
the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
1.55 "Total and Permanent Disability" means a physical or
mental condition of a Participant resulting from bodily injury,
disease, or mental disorder which renders him incapable of
continuing his usual and customary employment with the Employer.
The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall
be applied uniformly to all Participants.
1.56 "Trustee" means the person or entity named as trustee
herein or in any separate trust forming a part of this Plan, and
any successors.
1.57 "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.58 "Vested" means the nonforfeitable portion of any
account maintained on behalf of a Participant.
1.59 "Year of Service" means the computation period of
twelve (12) consecutive months, herein set forth, during which an
Employee has at least 1000 Hours of Service.
For purposes of eligibility for participation, the
initial computation period shall begin with the date on which the
Employee first performs an Hour of Service. The participation
computation period beginning after a 1-Year Break in Service
shall be measured from the date on which an Employee again
performs an Hour of Service. The participation computation
period shall shift to the Plan Year which includes the
anniversary of the date on which the Employee first performed an
Hour of Service.
For vesting purposes, a Year of Service shall be a
computation period in which an Employee completes 1000 Hours of
Service. For this purpose, the computation period shall be the
Plan Year, including periods prior to the Effective Date of the
Plan.
For all other purposes, the computation period shall be
the Plan Year.
Years of Service with any Affiliated Employer shall be
recognized.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to
Section 6.4 of the Plan and the special minimum allocation
requirements of Code Section 416(c) pursuant to Section 4.4 of
the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan
Year commencing after December 31, 1983 in which, as of the
Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee for any prior
Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan
is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, for Plan Years beginning after
December 31, 1984, if a Participant or Former Participant
has not performed any services for any Employer maintaining
the Plan at any time during the five year period ending on
the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is
a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any
Plan Year commencing after December 31, 1983 in which, as of
the Determination Date, (1) the Present value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the
Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as
of the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
(2) an adjustment for any contributions due as of
the Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
valuation date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year;
(3) any Plan distributions made within the Plan
Year that includes the Determination Date or within the
four (4) preceding Plan Years. However, in the case of
distributions made after the valuation date and prior
to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the
extent that such distributions are already included in
the Participant's Aggregate Account balance as of the
valuation date. Notwithstanding anything herein to the
contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under
a terminated plan which if it had not been terminated
would have been required to be included in an
Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value
of life insurance policies) of a Participant's account
balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary
or mandatory. However, amounts attributable to tax
deductible qualified deductible employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-
to-plan transfers (ones which are both initiated by the
Employee and made from a plan maintained by one
employer to a plan maintained by another employer), if
this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or
plan-to-plan transfers as a distribution for the
purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers, it
shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of
the Participant's Aggregate Account balance. However,
rollovers or plan-to-plan transfers accepted prior to
January 1, 1984 shall be considered as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-
to-plan transfers (ones either not initiated by the
Employee or made to a plan maintained by the same
employer), if this Plan provides the rollover or plan-
to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or plan-to-
plan transfer, it shall consider such rollover or plan-
to-plan transfer as part of the Participant's Aggregate
Account balance, irrespective of the date on which such
rollover or plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in (5)
and (6) above, all employers aggregated under Code
Section 414(b), (c), (m) and (o) are treated as the
same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of the
Employer in which a Key Employee is a participant in
the Plan Year containing the Determination Date or any
of the four preceding Plan Years, and each other plan
of the Employer which enables any plan in which a Key
Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan
if the Required Aggregation Group is a Top Heavy Group.
No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation
Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer
may also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group,
only a plan that is part of the Required Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No
plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year
shall be aggregated in order to determine whether such
plans are Top Heavy Plans.
(4) An Aggregation Group shall include any
terminated plan of the Employer if it was maintained
within the last five (5) years ending on the
Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee, shall be as
determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no
such single method exists, using a method which results in
benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C).
(g) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under
all defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and
remove the Trustee and the Administrator from time to time
as it deems necessary for the proper administration of the
Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the
Code, and the Act.
(b) The Employer shall establish a "funding policy
and method", i.e., it shall determine whether the Plan has a
short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding
policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust
Funds. Such "funding policy and method" shall be consistent
with the objectives of this Plan and with the requirements
of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions
of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators.
Any person, including, but not limited to, the Employees of the
Employer, shall be eligible to serve as an Administrator. Any
person so appointed shall signify his acceptance by filing
written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or
be removed by the Employer by delivery of written notice of
removal, to take effect at a date specified therein, or upon
delivery to the Administrator if no date is specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to
this position. If the Employer does not appoint an
Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator,
the responsibilities of each Administrator may be specified by
the Employer and accepted in writing by each Administrator. In
the event that no such delegation is made by the Employer, the
Administrators may allocate the responsibilities among
themselves, in which event the Administrators shall notify the
Employer and the Trustee in writing of such action and specify
the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by
the appropriate Administrator until such time as the Employer or
the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants
and their Beneficiaries, subject to the specific terms of the
Plan. The Administrator shall administer the Plan in accordance
with its terms and shall have the power to determine all
questions arising in connection with the administration,
interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish
procedures, correct any defect, supply any information, or
reconcile any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles
consistently applied and shall be consistent with the intent that
the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of
the Act and all regulations issued pursuant thereto. The
Administrator shall have all powers necessary or appropriate to
accomplish his duties under this Plan.
The Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to, the following:
(a) to determine all questions relating to the
eligibility of Employees to participate or remain a
Participant hereunder;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect
to all nondiscretionary or otherwise directed disbursements
from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to
make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the
Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and distribute to Employees a procedure
for notifying Participants and Beneficiaries of their rights
to elect joint and survivor annuities and Pre-Retirement
Survivor Annuities as required by the Act and Regulations
thereunder;
(j) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(k) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions
taken and shall keep all other books of account, records, and
other data that may be necessary for proper administration of the
Plan and shall be responsible for supplying all information and
reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of
the Administrator, may appoint counsel, specialists, advisers,
and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of
this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions,
the Employer shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all
Participants, their Hours of Service, their Years of Service,
their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator
may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's
duties under the Plan. The Administrator may rely upon such
information as is supplied by the Employer and shall have no duty
or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the
Trust Fund unless paid by the Employer. Such expenses shall
include any expenses incident to the functioning of the
Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and
other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Trust Fund. However, the
Employer may reimburse the Trust Fund for any administration
expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer
contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and
delegation of administrative authority pursuant to Section 2.5,
if there shall be more than one Administrator, they shall act by
a majority of their number, but may authorize one or more of them
to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with
the Administrator on forms supplied by the Employer. Written
notice of the disposition of a claim shall be furnished to the
claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be
understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how
the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of
either, who has been denied a benefit by a decision of the
Administrator pursuant to Section 2.12 shall be entitled to
request the Administrator to give further consideration to his
claim by filing with the Administrator (on a form which may be
obtained from the Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the
claimant believes his claim should be allowed, shall be filed
with the Administrator no later than 60 days after receipt of the
written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or
any other representative of his choosing and at which the
claimant shall have an opportunity to submit written and oral
evidence and arguments in support of his claim. At the hearing
(or prior thereto upon 5 business days written notice to the
Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its
disallowance. Either the claimant or the Administrator may cause
a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court
reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within
60 days of receipt of the appeal (unless there has been an
extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are
communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for
the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed six (6) Months
of Service and has reached his twentieth and one-half birthday
shall be eligible to participate hereunder as of the date he has
satisfied such requirements. However, any Employee who was a
Participant in the Plan prior to the effective date of this
amendment and restatement shall continue to participate in the
Plan. The Employer shall give each prospective Eligible Employee
written notice of his eligibility to participate in the Plan
prior to the close of the Plan Year in which he first becomes an
Eligible Employee.
For purposes of this Section, an Eligible Employee will
be deemed to have completed six (6) months of Service if he is in
the employ of the Employer at any time six (6) months after his
employment commencement date. Employment commencement date shall
be the first day that he is entitled to be credited with an Hour
of Service for the performance of duty.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each
Eligible Employee shall make application to the Employer for
participation in the Plan and agree to the terms hereof. Upon
the acceptance of any benefits under this Plan, such Employee
shall automatically be deemed to have made application and shall
be bound by the terms and conditions of the Plan and all
amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant
effective as of the first day of the Plan Year next following
the, date on which such Employee met the eligibility requirements
of Section 3.1, provided said Employee was still employed as of
such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred).
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of
each Employee for participation in the Plan based upon
information furnished by the Employer. Such determination shall
be conclusive and binding upon all persons, as long as the same
is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee,
such Former Participant shall continue to vest in his interest in
the Plan for each Year of Service completed while a noneligible
Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan.
Additionally, his interest in the Plan shall continue to share in
the earnings of the Trust Fund.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be
included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution
by his Employer for the year has been made, the Employer shall
make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have
contributed with respect to him had he not been omitted. Such
contribution shall be made regardless of whether or not it is
deductible in whole or in part in any taxable year under
applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have
been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made
until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or
not a deduction is allowable with respect to such contribution.
In such event, the amount contributed with respect to the
ineligible person shall constitute a Forfeiture for the Plan Year
in which the discovery is made.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to
the Plan:
(a) The amount of the total salary reduction elections
of all Participants made pursuant to Section 4.2(a), which
amount shall be deemed an Employer's Elective Contribution.
(b) On behalf of each Participant who has been
credited with a Year of Service during the Plan Year a
matching contribution equal to 25% of each Participant's
Deferred Compensation, which amount shall be deemed an
Employer's Non-Elective Contribution.
Except, however, in applying the matching percentage
specified above, only salary reductions up to 4% of
Compensation shall be considered.
(c) A discretionary amount, which amount shall be
deemed an Employer's Non-Elective Contribution.
Participants who perform less than a Year of Service during
the Plan Year or are not employed on the last day of the
Plan Year shall not share in this Employer discretionary
contribution.
(d) Notwithstanding the foregoing, however, the
Employer's contributions for any Plan Year shall not exceed
the maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404. All contributions
by the Employer shall be made in cash or in such property as
is acceptable to the Trustee.
(e) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer
shall make a contribution even if it exceeds the amount
which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to 20%
of his Compensation which would have been received in the
Plan Year, but for the deferral election. A deferral
election (or modification of an earlier election) may not be
made with respect to Compensation which is currently
available on or before the date the Participant executed
such election.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as
an Employer Elective Contribution and allocated to that
Participant's Elective Account.
(b) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject
to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective
Account may not be distributable earlier than:
(1) a Participant's termination of employment,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
existence at the time of Plan termination of another
defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7))
or the establishment of a successor defined
contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7))
by the Employer or an Affiliated Employer within the
period ending twelve months after distribution of all
assets from the Plan maintained by the Employer;
(4) the date of the sale by the Employer to an
entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning of
Code Section 409(d)(2)) with respect to a Participant
who continues employment with the corporation acquiring
such assets;
(5) the date of the sale by the Employer or an
Affiliated Employer of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) to an
entity which is not an Affiliated Employer with respect
to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a
Participant, subject to the limitations of Section
6.10.
(d) In any Plan Year beginning after December 31,
1987, a Participant's Deferred Compensation made under this
Plan and all other plans, contracts or arrangements of the
Employer maintaining this Plan shall not exceed, during any
taxable year, the limitation imposed by Code Section 402(g),
as in effect at the beginning of such taxable year. This
dollar limitation shall be adjusted annually pursuant to the
method provided in Code Section 415(d) in accordance with
Regulations.
(e) In the event a Participant has received a hardship
distribution from his Participant's Elective Account
pursuant to Section 6.10 or pursuant to Regulation 1.401(k)-
l(d)(2)(iii)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan
on his behalf for a period of twelve (12) months following
the receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation under
this Plan together with any elective deferrals (as defined
in Regulation 1.402(g)-l(b)) under another qualified cash or
deferred arrangement (as defined in Code Section 401(k)), a
simplified employee pension (as defined in Code Section
408(k)), a salary reduction arrangement (within the meaning
of Code Section 3121(a)(5)(D)), a deferred compensation plan
under Code Section 457, or a trust described in Code Section
501(c)(18) cumulatively exceed the limitation imposed by
Code Section 402(g) (as adjusted annually in accordance with
the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close
of his taxable year, notify the Administrator in writing of
such excess and request that his Deferred Compensation under
this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator may direct
the Trustee to distribute such excess amount (and any Income
allocable to such "excess amount) to the Participant not
later than the first April 15th following the close of the
Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the
Participant which begins after December 31, 1986. Any
distribution of less than the entire amount of Excess
Deferred Compensation and Income shall be treated as a pro
rata distribution of Excess Deferred Compensation and
Income. The amount distributed shall not exceed the
Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of
the Participant's taxable year must satisfy each of the
following conditions:
(1) the Participant shall designate the
distribution as Excess Deferred Compensation;
(2) the distribution must be made after the date
on which the Plan received the Excess Deferred
Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when
the Participant shall be entitled to receive benefits, the
fair market value of the Participant's Elective Account
shall be used to provide additional benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to
this Section may be segregated into a separate account for
each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as
the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement
the salary reduction elections provided for herein in
accordance with the following:
(1) A Participant may commence making elective
deferrals to the Plan at any time following the
satisfaction of the eligibility and participation
requirements specified in Article III. The Participant
shall make such an election by entering into a written
salary reduction agreement with the Employer and filing
such agreement with the Administrator. Such election
shall initially be effective beginning with the pay
period following the acceptance of the salary reduction
agreement by the Administrator, shall not have
retroactive effect and shall remain in force until
revoked; provided, however, the termination of the
Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke
any salary reduction agreement then in effect,
effective immediately following the close of the pay
period within which such termination or cessation
occurs.
(2) A Participant may modify a prior election at
any time during the Plan Year and concurrently make a
new election by filing a written notice with the
Administrator at least thirty (30) days (or upon such
shorter notice period as may be acceptable to the
Administrator) prior to the pay period for which such
modification is to be effective.
(3) A Participant may elect to prospectively
revoke his salary reduction agreement in its entirety
at any time during the Plan Year by providing the
Administrator with thirty (30) days written notice of
such revocation (or upon such shorter notice period as
may be acceptable to the Administrator). Such
revocation shall become effective as of the beginning
of the first pay period coincident with or next
following the expiration of the notice period.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time
prescribed by law, including extensions of time, for the filing
of the Employer's federal income tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated
through payroll deductions shall be paid to the Trustee as of the
earliest date on which such contributions can reasonably be
segregated from the Employer's general assets, but in any event
within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional
Employer contributions which are allocable to the Participant's
Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the
close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator with
all information required by the Administrator to make a
proper allocation of the Employer's contributions for each
Plan Year. Within a reasonable period of time after the
date of receipt by the Administrator of such information,
the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 4.1(a), to each
Participant's Elective Account in an amount equal to
each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(b), to each
Participant's Account in accordance with Section
4.1(b).
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.1(c), to each
Participant's Account in the same proportion that each
such Participant's Compensation for the year bears to
the total Compensation of all Participants for such
year.
(c) As of each Anniversary Date or other valuation
date, before allocation of Employer contributions, any
earnings or losses (net appreciation or net depreciation) of
the Trust Fund shall be allocated in the same proportion
that each Participant's and Former Participant's
nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated
accounts as of such date.
Participants' transfers from other qualified plans
deposited in the general Trust Fund after a valuation date
shall not share in any earnings and losses (net appreciation
or net depreciation) of the Trust Fund for such period.
Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate
earnings and losses.
(d) As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall
first be made available to reinstate previously forfeited
account balances of Former Participants, if any, in
accordance with Section 6.4(h). The remaining Forfeitures,
if any, shall be used to reduce the contribution of the
Employer hereunder for the Plan Year in which such
Forfeitures occur in the following manner:
(1) Forfeitures attributable to Employer matching
contributions pursuant to Section 4.1(b) shall be used
to reduce the Employer's matching contribution for the
Plan Year in which such Forfeitures occur.
(2) Forfeitures attributable to Employer
discretionary contributions pursuant to Section 4.1(c)
shall be used to reduce the Employer's discretionary
contribution for the Plan Year in which such
Forfeitures occur.
(e) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer's contributions allocated to
the Participant's Combined Account of each Non-Key Employee
shall be equal to at least three percent (3%) of such Non-
Key Employee's "415 Compensation" (reduced by contributions
and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in
a Required Aggregation Group). However, if (i) the sum of
the Employer's contributions allocated to the Participant's
Combined Account of each Key Employee for such Top Heavy
Plan Year is less than three percent (3%) of each Key
Employee's "415 Compensation" and (ii) this Plan is not
required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, the sum of the Employer's
contributions allocated to the Participant's Combined
Account of each Non-Key Employee shall be equal to the
largest percentage allocated to the Participant's Combined
Account of any Key Employee. However, in determining
whether a Non-Key Employee has received the required minimum
allocation, such Non-Key Employee's Deferred Compensation
and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a)
shall not be taken into account.
However, no such minimum allocation shall be required
in this Plan for any Non-Key Employee who participates in
another defined contribution plan subject to Code Section
412 providing such benefits included with this Plan in a
Required Aggregation Group.
(f) Notwithstanding Section 4.1, for purposes of the
minimum allocations set forth above, the percentage
allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the
Employer's contributions allocated on behalf of such Key
Employee divided by the "415 Compensation" for such Key
Employee.
(g) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Non-Key Employees who
are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; (2) declined
to make mandatory contributions (if required) or salary
reduction contributions to the Plan; and (3) been excluded
from participation because of their level of Compensation.
(h) In lieu of the above, in any Plan Year in which a
Non-Key Employee is a Participant in both this Plan and a
defined benefit pension plan included in a Required
Aggregation Group which is top heavy, the Employer shall not
be required to provide such Non-Key Employee with both the
full separate defined benefit plan minimum benefit and the
full separate defined contribution plan minimum allocation.
Therefore, for any Plan Year when the Plan is a Top
Heavy Plan, a Non-Key Employee who is participating in this
Plan and a defined benefit plan maintained by the Employer
shall receive a minimum monthly accrued benefit in the
defined benefit plan equal to the product of (1) one-twelfth
(1/12th) of "415 Compensation" averaged over the five (5)
consecutive "limitation years " (or actual "limitation
years", if less) which produce the highest average and (2)
the lesser of (i) two percent (2%) multiplied by Years of
Service when the plan is top heavy or (ii) twenty percent
(20%). Further, the extra minimum allocation (required by
Sections 4.9(m)(5) and 4.9(n) to provide higher limitations)
shall not be provided.
(i) For the purposes of this Section, "415
Compensation" shall be limited to $200,000 (unless adjusted
in such manner as permitted under Code Section 415(d)).
However, for Plan Years beginning prior to January 1, 1989,
the $200,000 limit shall apply only for Top Heavy Plan Years
and shall not be adjusted.
(j) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the salary reduction
contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(k) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death shall share in
the allocations of contributions provided for in this
Section regardless of whether they completed a Year of
Service during the Plan Year.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of Total and Permanent
Disability shall share in the allocations of contributions
provided for in this Section regardless of whether they
completed a Year of Service during the Plan Year.
(m) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of retirement shall
share in the allocations of contributions provided for in
this Section regardless of whether they completed a Year of
Service during the Plan Year.
(n) If a Former Participant is reemployed after five
(5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1986, the annual allocation
derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the
following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Participant group shall not be more
than the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Participant
group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not be
more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant
group multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-l(b) are incorporated
herein by reference.
However, for Plan Years beginning after December
31, 1988, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have his
actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant
group for a Plan Year, the average of the ratios, calculated
separately for each Participant in such group, of the amount
of Employer Elective Contributions allocated to each
Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to
the nearest one-hundredth of one percent for Plan Years
beginning after December 31, 1988. Employer Elective
Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess
Deferred Compensation to the extent such excess amounts are
made under this Plan or any other plan maintained by the
Employer.
(c) For the purpose of determining the actual deferral
ratio of a Highly Compensated Employee who is subject to the
Family Member aggregation rules of Code Section 414(q) (6)
because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the
year, the following shall apply:
(1) The combined actual deferral ratio for the
family group (which shall be treated as one Highly
Compensated Participant) shall be the greater of: (i)
the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible
Family Members who are Highly Compensated Participants
without regard to family aggregation; and (ii) the
ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit
to "414(s) Compensation", for Plan Years beginning
after December 31, 1988, Family Members shall include
only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer Elective Contributions and
"414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into
account in paragraph (1) above.
(3) if a Participant is required to be aggregated
as a member of more than one family group in a plan,
all Participants who are members of those family groups
that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2)
above.
(d) For the purposes of Sections 4.5(a) and 4.6, a
Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to make a
deferral election pursuant to Section 4.2, whether or not
such deferral election was made or suspended pursuant to
Section 4.2.
(e) For the purposes of this Section, if two or more
plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) for Plan Years beginning
after December 31, 1988) which include cash or deferred
arrangements are considered one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii) as in effect for Plan Years beginning after
December 31, 1988), the cash or deferred arrangements
included in such plans shall be treated as one arrangement.
(f) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two (2) or
more cash or deferred arrangements (other than a cash or
deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the
Employer or an Affiliated Employer, all such cash or
deferred arrangements shall be treated as one (1) cash or
deferred arrangement for the purpose of determining the
deferral percentage with respect to such Highly Compensated
Participant. However, for Plan Years beginning after
December 31, 1988, if the cash or deferred arrangements have
different Plan Years, this paragraph shall be applied by
treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the
Employer's Elective Contributions made pursuant to Section 4.4 do
not satisfy one of the tests set forth in Section 4.5(a) for Plan
Years beginning after December 31, 1986, the Administrator shall
adjust Excess Contributions pursuant to the options set forth
below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall
have his portion of Excess Contributions distributed to him
until one of the tests set forth in Section 4.5(a) is
satisfied, or until his actual deferral ratio equals the
actual deferral ratio of the Highly Compensated Participant
having the second highest actual deferral ratio. This
process shall continue until one of the tests set forth in
Section 4.5(a) is satisfied. For each Highly Compensated
Participant, the amount of Excess Contributions is equal to
the Elective Contributions on behalf of such Highly
Compensated Participant (determined prior to the application
of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this
paragraph) by his "414(s) Compensation". However, in
determining the amount of Excess Contributions to be
distributed with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be
reduced by any Excess Deferred Compensation previously
distributed to such affected Highly Compensated Participant
for his taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such distribution:
(i) may be postponed but not later than the
close of the succeeding Plan Year;
(ii) shall be made first from unmatched
Deferred Compensation and, thereafter,
simultaneously from Deferred Compensation which is
matched and matching contributions which relate to
such Deferred Compensation. However, any such
matching contributions which are not Vested shall
be forfeited in lieu of being distributed;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire
amount of Excess Contributions shall be treated as a
pro rata distribution of Excess Contributions and
Income.
(b) The determination and correction of Excess
Contributions of a Highly Compensated Participant whose
actual deferral ratio is determined under the family
aggregation rules shall be accomplished as follows:
(1) If the actual deferral ratio for the Highly
Compensated Participant is determined in accordance
with Section 4.5(c)(1)(ii), then the actual deferral
ratio shall be reduced as required herein and the
Excess Contributions for the family unit shall be
allocated among the Family Members in proportion to the
Elective Contributions of each Family Member that were
combined to determine the group actual deferral ratio.
(2) If the actual deferral ratio for the Highly
Compensated Participant is determined under Section
4.5(c)(1)(i), then the actual deferral ratio shall
first be reduced as required herein, but not below the
actual deferral ratio of the group of Family Members
who are not Highly Compensated Participants without
regard to family aggregation. The Excess Contributions
resulting from this initial reduction shall be
allocated (in proportion to Elective Contributions)
among the Highly Compensated Participants whose
Elective Contributions were combined to determine the
actual deferral ratio. If further reduction is still
required, then Excess Contributions resulting from this
further reduction shall be determined by taking into
account the contributions of all Family Members and
shall be allocated among them in proportion to their
respective Elective Contributions.
(c) within twelve (12) months after the end of the
Plan Year, the Employer shall make a special Qualified Non-
Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the
tests set forth in Section 4.5(a). Such contribution shall
be allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion
that each Non-Highly Compensated Participant's Compensation
for the year bears to the total Compensation of all Non-
Highly Compensated Participants.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan
Years beginning after December 31, 1986 for the Highly
Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-
Highly Compensated Participant group; or
(2) the lesser of 200 percent of such percentage
for the Non-Highly Compensated Participant group, or
such percentage for the Non-Highly Compensated
Participant group plus 2 percentage points. However,
for Plan Years beginning after December 31, 1988, to
prevent the multiple use of the alternative method
described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section
4.2 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive
matching contributions under this Plan or under any
other plan maintained by the Employer or an Affiliated
Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2. The
provisions of Code Section 401(m) and Regulations
1.401(m)-l(b) and 1.401(m)-2 are incorporated herein by
reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group, the average of the
ratios (calculated separately for each Participant in each
group) of:
(1) the sum of Employer matching contributions
made pursuant to Section 4.1(b) on behalf of each such
Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for
such Plan Year.
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer
matching contributions contributed to the Plan prior to the
end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account,
with respect to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to their
accounts, elective deferrals (as defined in Regulation
1.402(g)-l(b)) and qualified non-elective contributions (as
defined in Code Section 401(m)(4)(C)) contributed to any
plan maintained by the Employer. Such elective deferrals
and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation
1.401(m)-l(b)(2) which is incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988,
the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-
elective contributions are made.
(d) For the purpose of determining the actual
contribution ratio of a Highly Compensated Employee who is
subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for
the family group (which shall be treated as one Highly
Compensated Participant) shall be the greater of: (i)
the ratio determined by aggregating Employer matching
contributions made pursuant to Section 4.1(b) and
"414(s) Compensation" of all eligible Family Members
who are Highly Compensated Participants without regard
to family aggregation; and (ii) the ratio determined by
aggregating Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation" of
all eligible Family Members (including Highly
Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation" for Plan Years
beginning after December 31, 1988, Family Members shall
include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before
the close of the Plan Year.
(2) The Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation" of
all Family Members shall be disregarded for purposes of
determining the "Actual Contribution Percentage" of the
Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated
as a member of more than one family group in a plan,
all Participants who are members of those family groups
that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2)
above.
(e) For purposes of this Section, if two or more plans
of the Employer (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7) for Plan Years
beginning after December 31, 1988) to which matching
contributions, Employee contributions, or both, are made are
treated as one plan for purposes of Code Sections 401(a)(4)
or 410(b) (other than the average benefits test under Code
Section 410(b)(2)(A)(ii)), such plans shall be treated as
one plan for purposes of this Section 4.7. In addition, two
or more plans of the Employer to which matching
contributions, Employee contributions or elective deferrals
are made may be considered as a single plan for purposes of
this Section. In such a case, the aggregated plans must
satisfy Code Sections 401(a)(4) and 410(b) as though such
aggregated plans were a single plan. Notwithstanding the
above, for Plan Years beginning after December 31, 1988,
contributions to an employee stock ownership plan as defined
in Code Section 4975(e)(7) shall not be aggregated with this
Plan.
(f) If a Highly Compensated Participant participates
in two or more plans (other than an employee stock ownership
plan as defined in Code Section 4975(e)(7) for Plan Years
beginning after December 31, 1988) which are maintained by
the Employer or an Affiliated Employer to which matching
contributions, Employee contributions or elective deferrals
are made, all such contributions on behalf of such Highly
Compensated Participant shall be aggregated for purposes of
this Section 4.7.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated
Participant shall include any Employee eligible to have
Employer matching contributions pursuant to Section 4.1(b)
(whether or not a deferral election was made or suspended
pursuant to Section 4.2(e)) allocated to his account for the
Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning after
December 31, 1986, the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio,
his Vested portion of Excess Aggregate Contributions (and
Income allocable to such contributions) or, if forfeitable,
forfeit such non-Vested Excess Aggregate Contributions (and
Income allocable to such Forfeitures) until either one of
the tests set forth in Section 4.7(a) is satisfied, or until
his actual contribution ratio equals the actual contribution
ratio of the Highly Compensated Participant having the
second highest actual contribution ratio. This process
shall continue until one of the tests set forth in Section
4.7(a) is satisfied. The distribution and/or Forfeiture of
Excess Aggregate Contributions shall be made in the
following order:
(1) Employer matching contributions distributed
and/or forfeited pursuant to Section 4.6(a)(1);
(2) Remaining Employer matching contributions.
(b) Any distribution and/or Forfeiture of less than
the entire amount of Excess Aggregate Contributions (and
Income) shall be treated as a pro rata distribution and/or
Forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions, including
forfeited matching contributions, shall be treated as
Employer contributions for purposes of Code Sections 404 and
415 even if distributed from the Plan.
(d) For each Highly Compensated Participant, the
amount of Excess Aggregate Contributions is equal to
the total Employer matching contributions made pursuant
to Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of the Highly
Compensated Participant (determined prior to the
application of this paragraph) minus the amount
determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined
after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be
rounded to the nearest one-hundredth of one percent for
Plan Years beginning after December 31, 1988. In no
case shall the amount of Excess Aggregate Contribution
with respect to any Highly Compensated Participant
exceed the amount of Employer matching contributions
made pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into
account pursuant to Section 4.7(c) on behalf of such
Highly Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall
be made after first determining the Excess Contributions, if
any, to be treated as voluntary Employee contributions due
to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code
Section 401(k)) maintained by the Employer that ends with or
within the Plan Year.
(f) The determination and correction of Excess
Aggregate Contributions of a Highly Compensated Participant
whose actual contribution ratio is determined under the
family aggregation rules shall be accomplished as follows:
(1) If the actual contribution ratio for the
Highly Compensated Participant is determined in
accordance with Section 4.7(d)(1)(ii), then the actual
contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the
sum of Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c) of each Family Member that
were combined to determine the group actual
contribution ratio.
(2) If the actual contribution ratio for the
Highly Compensated Participant is determined under
Section 4.7(d)(1)(i), then the actual contribution
ratio shall first be reduced, as required herein, but
not below the actual contribution ratio of the group of
Family Members who are not Highly Compensated
Participants without regard to family aggregation. The
Excess Aggregate Contributions resulting from this
initial reduction shall be allocated among the Highly
Compensated Participants whose Employer matching
contributions made pursuant to Section 4.1(b) and any
qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c)
were combined to determine the actual contribution
ratio. If further reduction is still required, then
Excess Aggregate Contributions resulting from this
further reduction shall be determined by taking into
account the contributions of all Family Members and
shall be allocated among them in proportion to their
respective Employer matching contributions made
pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into
account pursuant to. Section 4.7(c).
(g) Notwithstanding the above, within twelve (12)
months after the end of the Plan Year, the Employer may make
a special Qualified Non-Elective Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section 4.7(a).
Such contribution shall be allocated to the Participant's
Elective Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A
separate accounting shall be maintained for the purpose of
excluding such contributions from the "Actual Deferral
Percentage" tests pursuant to Section 4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000
(or, if greater, one-fourth of the dollar limitation in
effect under Code Section 415(b)(1)(A)) or (2) twenty-five
percent (25%) of the Participant's "415 Compensation" for
such "limitation year".
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions for
"limitation years' beginning after December 31, 1986, (3)
Forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit plan (as defined
in Code Section 419(e)) maintained by the Employer. Except,
however, the "415 Compensation" percentage limitation
referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition",
or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan
to another is not an "annual addition". In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(a)(5), 403(a)(4), 403(b)(8) and
408(d)(3)); (2) repayments of loans made to a Participant
from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-
outs); (4) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income
under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, "415 Compensation" shall include the
Participant's wages, salaries, fees for professional service
and other amounts for personal services actually rendered in
the course of employment with an Employer maintaining the
Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips and bonuses and in the case of a Participant who is an
Employee within the meaning of Code Section 401(c)(1) and
the regulations thereunder, the Participant's earned income
(as described in Code Section 401(c)(2) and the regulations
thereunder)) paid during the "limitation year".
"415 Compensation" shall exclude (1)(A) contributions
made by the Employer to a plan of deferred compensation to
the extent that, before the application of the Code Section
415 limitations to the Plan, the contributions are not
includable in the gross income of the Employee for the
taxable year in which contributed, (B) contributions made by
the Employer to a plan of deferred compensation to the
extent that all or a portion of such contributions are
recharacterized as a voluntary Employee contribution, (C)
Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from
the Employee's gross income, (D) any distributions from a
plan of deferred compensation regardless of whether such
amounts are includable in the gross income of the Employee
when distributed except any amounts received by an Employee
pursuant to an unfunded non-qualified plan to the extent
such amounts are includable in the gross income of the
Employee; (2) amounts realized from the exercise of a non-
qualified stock option or when restricted stock (or
property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk
of forfeiture; (3) amounts realized from the sale, exchange
or other disposition of stock acquired under a qualified
stock option; and (4) 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 includable
in the gross income of the Employee), or contributions made
by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract
described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the
Employee). "415 Compensation" shall be limited to $200,000
(unless adjusted in the same manner as permitted under Code
Section 415(d)).
(e) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
(f) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d)
pursuant to the Regulations. The adjusted limitation is
effective as of January lst of each calendar year and is
applicable to "limitation years" ending with or within that
calendar year.
(g) For the purpose of this Section, all qualified
defined benefit plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
benefit plan, and all qualified defined contribution plans
(whether terminated or not) ever maintained by the Employer
shall be treated as one defined contribution plan.
(h) For the purpose of this Section, if the Employer
is a member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group
(as defined by Code Section 414(m)), or is a member of a
group of entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of such
Employers shall be considered to be employed by a single
Employer.
(i) For the purpose of this Section, if this Plan is a
Code Section 413(c) plan, all Employers of a Participant who
maintain this Plan will be considered to be a single
Employer.
(j) (1) If a Participant participates in more than
one defined contribution plan maintained by the
Employer which have different Anniversary Dates, the
maximum "annual additions" under this Plan shall equal
the maximum "annual additions" for the "limitation
year" minus any "annual additions" previously credited
to such Participant's accounts during the "limitation
year".
(2) If a Participant participates in both a
defined contribution plan subject to Code Section 412
and a defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the
same Anniversary Date, "annual additions" will be
credited to the Participant's accounts under the
defined contribution plan subject to Code Section 412
prior to crediting "annual additions" to the
Participant's accounts under the defined contribution
plan not subject to Code Section 412.
(3) If a Participant participates in more than
one defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the
same Anniversary Date, the maximum "annual additions"
under this Plan shall equal the product of (A) the
maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited under
subparagraphs (1) or (2) above, multiplied by (B) a
fraction (i) the numerator of which is the "annual
additions" which would be credited to such
Participant's accounts under this Plan without regard
to the limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for all
plans described in this subparagraph.
(k) Subject to the exception in Section 4.9(p) below,
if an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution
plans maintained by the Employer, the sum of the defined
benefit plan fraction and the defined contribution plan
fraction for any "limitation year" may not exceed 1.0.
(l) (1) The defined benefit plan fraction for any
"limitation year" is a fraction (A) the numerator of
which is the "projected annual benefit" of the
Participant under the Plan (determined as of the close
of the "limitation year"), and (B) the denominator of
which is the greater of the product of 1.25 multiplied
by the "protected current accrued benefit" or the
lesser of: (i) the product of 1.25 multiplied by the
maximum dollar limitation provided under Code Section
415(b)(1)(A) for such "limitation year", or (ii) the
product of 1.4 multiplied by the amount which may be
taken into account under Code Section 415(b)(1)(B) for
such "limitation year".
(2) For purposes of applying the limitations of
Code Section 415, the "projected annual benefit" for
any Participant is the benefit, payable annually, under
the terms of the Plan determined pursuant to Regulation
1.415-7(b)(3).
(3) For purposes of applying the limitations of
Code Section 415, "protected current accrued benefit"
for any Participant in a defined benefit plan in
existence on July 1, 1982, shall be the accrued
benefit, payable annually, provided for under question
T-3 of Internal Revenue Service Notice 83-10.
(m) (1) The defined contribution plan fraction for
any "limitation year" is a fraction (A) the numerator
of which is the sum of the "annual additions" to the
Participant's accounts as of the close of the
"limitation year" and (B) the denominator of which is
the sum of the lesser of the following amounts
determined for such year and each prior year of service
with the Employer: (i) the product of 1.25 multiplied
by the dollar limitation in effect under Code Section
415(c)(1)(A) for such "limitation year" (determined
without regard to Code Section 415(c)(6)), or (ii) the
product of 1.4 multiplied by the amount which may be
taken into account under Code Section 415(c)(1)(B) for
such "limitation year". For "limitation years"
beginning prior to January 1, 1987, the "annual
addition" shall not be recomputed to treat all Employee
contributions as an "annual addition".
(2) Notwithstanding the foregoing, the numerator
of the defined contribution plan fraction shall be
adjusted pursuant to Regulation 1.415-7(d)(1) and
questions T-6 and T-7 of Internal Revenue Service
Notice 83-10.
(3) For defined contribution plans in effect on
or before July 1, 1982, the Administrator may elect,
for any "limitation year" ending after December 31,
1982, that the amount taken into account in the
denominator for every Participant for all "limitation
years" ending before January 1, 1983 shall be an amount
equal to the product of (A) the denominator for the
"limitation year" ending in 1982 determined under the
law in effect for the "limitation year" ending in 1982
multiplied by (B) the "transition fraction".
(4) For purposes of the preceding paragraph, the
term "transition fraction" shall mean a fraction (A)
the numerator of which is the lesser of (i) $51,875 or
(ii) 1.4 multiplied by twenty-five percent (25%) of the
Participant's "415 Compensation" for the "limitation
year" ending in 1981, and (B) the denominator of which
is the lesser of (i) $41,500 or (ii) twenty-five
percent (25%) of the Participant's "415 Compensation"
for the "limitation year" ending in 1981.
(5) Notwithstanding the foregoing, for any
"limitation year" in which the Plan is a Top Heavy
Plan, $41,500 shall be substituted for $51,875 in
determining the "transition fraction" unless the extra
minimum allocation is being provided pursuant to
Section 4.4. However, for any "limitation year" in
which this Plan is a Super Top Heavy Plan, $41,500
shall be substituted for $51,875 in any event.
(n) Notwithstanding the foregoing, for any "limitation
year" in which the Plan is a Top Heavy Plan, 1.0 shall be
substituted for 1.25 in paragraph l(l) and m(l) unless the
extra minimum allocation is being provided pursuant to
Section 4.4. However, for any "limitation year" in which the
Plan is a Super Top Heavy Plan, 1.0 shall be substituted for
1.25 in any event.
(o) If the sum of the defined benefit plan fraction
and the defined contribution plan fraction shall exceed 1.0
in any "limitation year" for any Participant in this Plan
for reasons other than described in Section 4.9(p), the
Administrator shall adjust the numerator of the defined
benefit plan fraction so that the sum of both fractions
shall not exceed 1.0 in any "limitation year" for such
Participant.
(p) If (1) the substitution of 1.00 for 1.25 and
$41,500 for $51,875 above or (2) the excess benefit accruals
or "annual additions" provided for in Internal Revenue
Service Notice 82-19 cause the 1.0 limitation to be exceeded
for any Participant in any "limitation year", such
Participant shall be subject to the following restrictions
for each future "limitation year" until the 1.0 limitation
is satisfied: (A) the Participant's accrued benefit under
the defined benefit plan shall not increase (B) no "annual
additions" may be credited to a Participant's accounts and
(C) no Employee contributions (voluntary or mandatory) shall
be made under any defined benefit plan or any defined
contribution plan of the Employer.
(q) Notwithstanding anything contained in this Section
to the contrary, the limitations, adjustments and other
requirements prescribed in this Section shall at all times
comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would
cause the maximum "annual additions" to be exceeded for any
Participant, the Administrator shall
(1) return any voluntary Employee contributions
credited for the "limitation year" to the extent that
the return would reduce the "excess amount" in the
Participant's accounts
(2) hold any "excess amount" remaining after the
return of any voluntary Employee contributions in a
"Section 415 suspense account"
(3) use the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation
years" if necessary) to reduce Employer contributions
for that Participant if that Participant is covered by
the Plan as of the end of the "limitation year", or if
the Participant is not so covered, allocate and
reallocate the "Section 415 suspense account" in the
next "limitation year" (and succeeding "limitation
years" if necessary) to all Participants in the Plan
before any Employer or Employee contributions which
would constitute "annual additions" are made to the
Plan for such "limitation year" (4) reduce Employer
contributions to the Plan for such "limitation year" by
the amount of the "Section 415 suspense account"
allocated and reallocated during such "limitation
year".
(b) For purposes of this Article, "excess amount" for
any Participant for a "limitation year" shall mean the
excess, if any, of (1) the "annual additions" which would be
credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section
4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year". The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
(d) The Plan may not distribute "excess amounts",
other than voluntary Employee contributions, to Participants
or Former Participants.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) with the consent of the Administrator, amounts may
be transferred from other qualified plans, provided that the
trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the
tax exempt status of the Plan or Trust or create adverse tax
consequences for the Employer. The amounts transferred
shall be set up in a separate account herein referred to as
a "Participant's Rollover Account". Such account shall be
fully vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall
be held by the Trustee pursuant to the provisions of this
Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-l(g)(4)), including amounts
treated as elective contributions, which are transferred
from another qualified plan in a plan-to-plan transfer shall
be subject to the distribution limitations provided for in
Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when
IL-.he Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's
Rollover Account shall be used to provide additional
benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover
Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but
not limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be
made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other
short term debt security acceptable to the Trustee until
such time as the allocations pursuant to this Plan have been
made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined
by the Administrator.
(f) For purposes of this Section, the term qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "amounts transferred from other qualified
plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) lump-sum
distributions received by an Employee from another qualified
plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan
within sixty (60) days following his receipt thereof; (iii)
amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual
retirement account has no assets other than assets which (A)
were previously distributed to the Employee by another
qualified plan as a lump-sum distribution (B) were eligible
for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account
meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60)
days of his receipt thereof from such conduit individual
retirement account.
(g) Prior to accepting any transfers to which this
Section applies, the Administrator may require the Employee
to establish that the amounts to be transferred to this Plan
meet the requirements of this Section and may also require
the Employee to provide an opinion of counsel satisfactory
to the Employer that the amounts to be transferred meet the
requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan
(or a transaction having the effect of such a transfer)
shall only be permitted if it will not result in the
elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 8.1.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed
necessary by the Administrator, herein called "valuation date",
to determine the net worth of the assets comprising the Trust
Fund as it exists on the "valuation date" prior to taking into
consideration any contribution to be allocated for that Plan
Year. In determining such net worth, the Trustee shall value the
assets comprising the Trust Fund at their fair market value as of
the "valuation date" and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or
the Trust Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held
in the Trust Fund which are listed on a registered stock
exchange, the Administrator shall direct the Trustee to value the
same at the prices they were last traded on such exchange
preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the
exchange on which they are traded was not open for business on
the "valuation date", then the securities shall be valued at the
prices at which they were last traded prior to the "valuation
date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on
the "valuation date", which bid price shall be obtained from a
registered broker or an investment banker. In determining the
fair market value of assets other than securities for which
trading or bid prices can be obtained, the Trustee may appraise
such assets itself, or in its discretion, employ one or more
appraisers for that purpose and rely on the values established by
such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal
Retirement Date or Early Retirement Date. Upon such Normal
Retirement Date or Early Retirement Date, all amounts credited to
such Participant's Combined Account shall become distributable.
However, a Participant may postpone the termination of his
employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the
right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's
Retirement Date, or as soon thereafter as is practicable, the
Trustee shall distribute all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account
shall become fully Vested. The Administrator shall direct
the Trustee, in accordance with the provisions of Sections
6.6 and 6.7, to distribute the value of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with
the provisions of Sections 6.6 and 6.7, to distribute any
remaining amounts credited to the accounts of a deceased
Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of
death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death
and of the right of any person to receive payment shall be
conclusive.
(d) unless otherwise elected in the manner prescribed
in Section 6.6, the Beneficiary of the death benefit shall
be the Participant's spouse, who shall receive such benefit
in the form of a Pre-Retirement Survivor Annuity pursuant to
Section 6.6. Except, however, the Participant may designate
a Beneficiary other than his spouse if:
(1) the Participant and his spouse have validly
waived the Pre-Retirement Survivor Annuity in the
manner prescribed in Section 6.6, and the spouse has
waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law) and
the Participant has a court order to such effect (and
there is no "qualified domestic relations order" as
defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary
shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke
his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation
or change with the Administrator. However, the
Participant's spouse must again consent in writing to
any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit
consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right.
In the event no valid designation of Beneficiary exists
at the time of the Participant's death, the death
benefit shall be payable to his estate.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent
Disability prior to his Retirement Date or other termination of
his employment, all amounts credited to such Participant's
Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall
distribute to such Participant all amounts credited to such
Participant's Combined Account as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with
or subsequent to the termination of a Participant's
employment for any reason other than death, Total and
Permanent Disability or retirement, the Administrator may
direct the Trustee to segregate, the amount of the Vested
portion of such Terminated Participant's Combined Account
and invest the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit,
common or collective trust fund of a bank or a deferred
annuity. In the event the Vested portion of a Participant's
Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and
share in allocations pursuant to Section 4.4 until such time
as a distribution is made to the Terminated Participant.
The amount of the Terminated Participant's Combined Account
which is not Vested may be credited to a separate account
(which will always share in gains and losses of the Trust)
and at such time as the amount becomes a Forfeiture shall be
applied pursuant to Section 4.4.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event
which would result in the distribution had the Terminated
Participant remained in the employ of the Employer (upon the
Participant's death, Total and Permanent Disability, Early
or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee to
cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such
Terminated Participant after a 1-Year Break in Service. Any
distribution under this paragraph shall be made in a manner
which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and
consent requirements of Code Sections 417 and 411(a)(11) and
the Regulations thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions has
never exceeded $3,500, the Administrator shall direct the
Trustee to cause the entire Vested benefit to be paid to
such Participant in a single lump sum.
For purposes of this Section 6.4, if the value of a
Terminated Participant's Vested benefit is zero, the
Terminated Participant shall be deemed to have received a
distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account
shall be a percentage of the total amount credited to his
Participant's Account determined on the basis of the
Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
0 - 4 0%
5 100%
(c) Notwithstanding the vesting provided for in
paragraph (b) above, for any Top Heavy Plan Year, the Vested
portion of the Participant's Account of any Participant who
has an Hour of Service after the Plan becomes top heavy
shall be a percentage of the total amount credited to his
Participant's Account determined on the basis of the
Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
2 20 %
3 40 %
4 60 %
5 80 %
6 100 %
If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall revert to the
vesting schedule in effect before this Plan became a Top
Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the
Vested percentage of a Participant's Account shall not be
less than the Vested percentage attained as of the later of
the effective date or adoption date of this amendment and
restatement.
(e) Notwithstanding the vesting schedule above, upon
the complete discontinuance of the Employer's contributions
to the Plan or upon any full or partial termination of the
Plan, all amounts credited to any account maintained shall
become 100% Vested and shall not thereafter be subject to
Forfeiture.
(f) A Participant with at least three (3) Years of
Service as of the expiration date of the election period may
elect to have his nonforfeitable percentage computed under
the Plan without regard to such amendment and restatement.
If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule.
The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after
the latest of
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
Except, however, any Employee who was a
Participant as of the later of the effective date or
adoption date of this amendment and restatement and who
completed three (3) Years of Service shall be subject
to the pre-amendment vesting schedule provided such
schedule is more liberal than the new vesting schedule.
Pre-Amendment Vesting Schedule
Years of Service Percentage
0 0 %
1 0 %
2 0 %
3 60 %
4 80 %
5 100 %
(g) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced
as the result of any direct or indirect amendment to this
Article. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least
three (3) Years of Service as of the expiration date of the
election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election,
then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence
on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(h) (1) if any Former Participant shall be reemployed
by the Employer before a 1-Year Break in Service
occurs, he shall continue to participate in the Plan in
the same manner as if such termination had not
occurred.
(2) If any Former Participant shall be reemployed
by the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former Participant had
received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall
be reinstated only if he repays the full amount
distributed to him before the earlier of five (5) years
after the first date on which the Participant is
subsequently reemployed by the Employer or the close of
the first period of 5 consecutive 1-Year Break in
Service commencing after the distribution. If a
distribution occurs for any reason other than a
separation from service, the time for repayment may not
end earlier than five (5) years after the date of
separation. In the event the Former Participant does
repay the full amount distributed to him, the
undistributed portion of the Participant's Account must
be restored in full, unadjusted by any gains or losses
occurring subsequent to the Anniversary Date or other
valuation date preceding his termination.
(3) If any Former Participant is reemployed after
a 1-Year Break in Service has occurred, Years of
Service shall include Years of Service prior to his 1-
Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and post-break
service shall be used for computing Years of
Service for eligibility and for vesting purposes
only after he has been employed for one (1) Year
of Service following the date of his reemployment
with the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right to any
interest in the Plan resulting from Employer
contributions shall lose credits otherwise
allowable under (i) above if his consecutive 1-
Year Breaks in Service equal or exceed the greater
of (A) five (5) or (B) the aggregate number of his
pre-break Years of Service;
(iii) After five (5) consecutive 1-Year
Breaks in Service, a Former Participant's Vested
Account balance attributable to pre-break service
shall not be increased as a result of post-break
service;
(iv) If a Former Participant who has not had
his Years of Service before a 1-Year Break in
Service disregarded pursuant to (ii) above
completes one (1) Year of Service for eligibility
purposes following his reemployment with the
Employer, he shall participate in the Plan
retroactively from his date of reemployment;
(v) If a Former Participant who has not had
his Years of Service before a 1-Year Break in
Service disregarded pursuant to (ii) above
completes a Year of Service (a 1-Year Break in
Service previously occurred, but employment had
not terminated), he shall participate in the Plan
retroactively from the first day of the Plan Year
during which he completes one (1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the 'annuity starting date"
and who does not die before the "annuity starting date"
shall receive the value of all of his benefits in the form
of a joint and survivor annuity. The joint and survivor
annuity is an annuity that commences immediately and shall
be equal in value to a single life annuity. Such joint and
survivor benefits following the Participant's death shall
continue to the spouse during the spouse's lifetime at a
rate equal to 50% of the rate at which such benefits were
payable to the Participant. This joint and 50% survivor
annuity shall be considered the designated qualified joint
and survivor annuity and automatic form of payment for the
purposes of this Plan. However, the Participant may elect
to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent
(75%) or one hundred percent (100%) of the rate payable to a
Participant during his lifetime, which alternative joint and
survivor annuity shall be equal in value to the automatic
joint and 50% survivor annuity. An unmarried Participant
shall receive the value of his benefit in the form of a life
annuity. Such unmarried Participant, however, may elect in
writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an
election to waive the joint and survivor annuity by a
married Participant, but without the spousal consent
requirement.
(2) Any election to waive the joint and survivor
annuity must be made by the Participant in writing
during the election period and be consented to by the
Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant, may
give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent of
the spouse expressly permits designations by the
Participant without the requirement of further consent
by the spouse). Such spouse's consent shall be
irrevocable and must acknowledge the effect of such
election and be witnessed by a Plan representative or a
notary public. Such consent shall not be required if
it is established to the satisfaction of the
Administrator that the required consent cannot be
obtained because there is no spouse, the spouse cannot
be located, or other circumstances that may be
prescribed by Regulations. The election made by the
Participant and consented to by his spouse may be
revoked by the Participant in writing without the
consent of the spouse at any time during the election
period. The number of revocations shall not be
limited. Any new election must comply with the
requirements of this paragraph. A former spouse's
waiver shall not be binding on a new spouse.
(3) The election period to waive the joint and
survivor annuity shall be the 90 day period ending on
the "annuity starting date."
(4) For purposes of this Section, the "annuity
starting date" means the first day of the first period
for which an amount is paid as an annuity, 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.
(5) With regard to the election, the
Administrator shall provide to the Participant no less
than 30 days and no more than 90 days before the
"annuity starting date" a written explanation of
(i) the terms and conditions of the joint
and survivor annuity, and
(ii) the Participant's right to make an
election to waive the joint and survivor annuity,
and
(iii) the right of the Participant's spouse
to consent to any election to waive the joint and
survivor annuity, and
(iv) the right of the Participant to revoke
such election, and the effect of such revocation.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive his
benefit in the form of a joint and survivor annuity, or if
such Participant is not married, in the form of a life
annuity, the Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is
entitled under the Plan in one lump-sum payment in cash or
in property.
(c) The present value of a Participant's joint and
survivor annuity derived from Employer and Employee
contributions may not be paid without his written consent if
the value exceeds, or has ever exceeded, $3,500. Further,
the spouse of a Participant must consent in writing to any
immediate distribution. If the value of the Participant's
benefit derived from Employer and Employee contributions has
never exceeded $3,500, the Administrator may immediately
distribute such benefit without such Participant's consent.
No distribution may be made under the preceding sentence
after the "annuity starting date" unless the Participant and
his spouse consent in writing to such distribution. Any
written consent required under this paragraph must be
obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with
Section 6.5(a)2.
(d) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $3,500 shall
require such Participant's consent if such distribution
commences prior to the later of his Normal Retirement Age or
age 62. With regard to this required consent:
(1) No consent shall be valid unless the
Participant has received a general description of the
material features and an explanation of the relative
values of the optional forms of benefit available under
the Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right
to defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are
required under Section 6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no
more than 90 days before the 'annuity starting date".
(4) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the "annuity starting date".
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant
who does not consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits made
on or after January 1, 1985, whether under the Plan or
through the purchase of an annuity contract, shall be made
in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation 1.401(a)(9)-2),
the provisions of which are incorporated herein by
reference:
(1) A Participant's benefits shall be distributed
to him not later than April lst of the calendar year
following the later of (i) the calendar year in which
the Participant attains age 70 1/2 or (ii) the calendar
year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner"
at any time during the five (5) Plan Year period ending
in the calendar year in which he attains age 70 1/2 or,
in the case of a Participant who becomes a "five (5)
percent owner" during any subsequent Plan Year, clause
(ii) shall no longer apply and the required beginning
date shall be the April lst of the calendar year
following the calendar year in which such subsequent
Plan Year ends. Alternatively, if the distribution is
to be in the form of a joint and survivor annuity or
single life annuity as provided in paragraph (a)(1)
above, then distributions must begin no later than the
applicable April lst as determined under the preceding
sentence and must be made over the life of the
Participant (or the lives of the Participant and the
Participant's designated Beneficiary) in accordance
with Regulations. Notwithstanding the foregoing,
clause (ii) above shall not apply to any Participant
unless the Participant had attained age 70 1/2 before
January 1, 1988 and was not a "five (5) percent owner"
at any time during the Plan Year ending with or within
the calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
(f) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section
shall not apply if a Participant has, prior to January 1,
1984, made a written designation to have his retirement
benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the
Tax Equity and Fiscal Responsibility Act of 1982.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) unless otherwise elected as provided below, a
Vested Participant who dies before the annuity starting date
and who has a surviving spouse shall have his death benefit
paid to his surviving spouse in the form of a Pre-Retirement
Survivor Annuity. The Participant's spouse may direct that
payment of the Pre-Retirement Survivor Annuity commence
within a reasonable period after the Participant's death.
If the spouse does not so direct, payment of such benefit
will commence at the time the Participant would have
attained the later of his Normal Retirement Age or age 62.
However, the spouse may elect a later commencement date.
Any distribution to the Participant's spouse shall be
subject to the rules specified in Section 6.6(g).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the
Participant in writing during the election period and shall
require the spouse's irrevocable consent in the same manner
provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary
or the alternative form of death benefit to be paid in lieu
of the Pre-Retirement Survivor Annuity. Notwithstanding the
foregoing, the nonspouse Beneficiary or the alternative form
of death benefit need not be acknowledged, provided the
consent of the spouse acknowledges that the spouse has the
right to limit consent only to a specific Beneficiary or a
specific form of benefit and that the spouse voluntarily
elects to relinquish one or both of such rights.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan
Year in which the Participant attains age 35 and end on the
date of the Participant's death. An earlier waiver (with
spousal consent) may be made provided a written explanation
of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning
of the Plan Year in which the Participant turns age 35. In
the event a Vested Participant separates from service prior
to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator
shall provide each Participant within the applicable period,
with respect to such Participant (and consistent with
Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of
this paragraph, the term "applicable period" means, with
respect to a Participant, whichever of the following periods
ends last:
(1) 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;
(2) A reasonable period after the individual
becomes a Participant. For this purpose, in the case
of an individual who becomes a Participant after age
32, the explanation must be provided by the end of the
three-year period beginning with the first day of the
first Plan Year for which the individual is a
Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the Pre-Retirement
Survivor Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from
service in the case of a Participant who separates
before attaining age 35. For this purpose, the
Administrator must provide the explanation beginning
one year before the separation from service and ending
one year after such separation.
(e) If the value of the Pre-Retirement Survivor
Annuity derived from Employer and Employee contributions has
never exceeded $3,500, the Administrator shall direct the
immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding
sentence after the annuity starting date unless the spouse
consents in writing. If the value exceeds, or has ever
exceeded, $3,500, an immediate distribution of the entire
amount may be made to the surviving spouse, provided such
surviving spouse consents in writing to such distribution.
Any written consent required under this paragraph must be
obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with
Section 6.5(a)(2).
(f) In the event the death benefit is not paid in the
form of a Pre-Retirement Survivor Annuity, it shall be paid
to the Participant's Beneficiary in one lump sum in cash or
in property.
(g) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant made
on or after January 1, 1985 shall be made in accordance with
the following requirements and shall otherwise comply with
Code Section 401(a)(9) and the Regulations thereunder. If
the death benefit is paid in the form of a Pre-Retirement
Survivor Annuity, then distributions to the Participant's
surviving spouse must commence on or before the later of:
(1) December 31st of the calendar year immediately following
the calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the Participant
would have attained age 70 1/2. If it is determined
pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies
before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution
selected pursuant to Section 6.5 as of his date of death.
If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to
Regulations (and distributions are not to be made in the
form of a Pre-Retirement Survivor Annuity), then his death
benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
(h) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section
shall not apply if a Participant has, prior to January 1,
1984, made a written designation to have his death benefits
paid in an alternative method acceptable under Code Section
401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of
payments on or as of an Anniversary Date, the distribution may be
made or begun on such date or as soon thereafter as is
practicable, but in no event later than 180 days after the
Anniversary Date. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not
result in a death benefit that is more than incidental), the
payment of benefits shall begin not later than the 60th day after
the close of the Plan Year in which the latest of the following
events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein;
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the
Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor,
then the Administrator may direct that such distribution be paid
to the legal guardian, or if none, to a parent of such
Beneficiary or a responsible adult with whom the Beneficiary
maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if
such is permitted by the laws of the state in which said
Beneficiary resides. Such a payment to the legal guardian,
custodian or parent of a minor Beneficiary shall fully discharge
the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the
distribution payable to a Participant or his Beneficiary
hereunder shall, at the expiration of five (5) years after it
shall become payable, remain unpaid solely by reason of the
inability of the Administrator, after sending a registered
letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of
such Participant or his Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. In the
event a Participant or Beneficiary is located subsequent to his
benefit being reallocated, such benefit shall be restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 100% of
his Participant's Elective Account and his Participant's
Account valued as of the last Anniversary Date or other
valuation date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed
to be made as of the first day of the Plan Year or, if
later, the valuation date immediately preceding the date of
distribution, and the Participant's Elective Account and his
Participant's Account shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if
the distribution is on account of:
(1) Medical expenses described in Code Section
213(d) incurred by the Participant, his spouse, or any
of his dependents (as defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of
a principal residence for the Participant;
(3) Payment of tuition for the next semester or
quarter of post-secondary education for the
Participant, his spouse, children, or dependents; or
(4) The need to prevent the eviction of the
Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal
residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully
vested.
(c) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the
Participant's representation and such other facts as are
known to the Administrator, determines that all of the
following conditions are satisfied:
(1) The distribution is not in excess of the
amount of the immediate and heavy financial need of the
Participant;
(2) The Participant has obtained all
distributions, other than hardship distributions, and
all nontaxable loans currently available under all
plans maintained by the Employer;
(3) The Plan, and all other plans maintained by
the Employer, provide that the Participant's elective
deferrals and voluntary Employee contributions will be
suspended for at least twelve (12) months after receipt
of the hardship distribution; and
(4) The Plan, and all other plans maintained by
the Employer, provide that the Participant may not make
elective deferrals for the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under
Code Section 402(g) for such next taxable year less the
amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
(d) Notwithstanding the above, for Plan Years
beginning after December 31, 1988, distributions from the
Participant's Elective Account pursuant to this Section
shall be limited solely to the Participant's Deferred
Compensation and any income allocable thereto credited to
the Participant's Elective Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Sections 417 and 411(a)(11) and the Regulations thereunder.
6.11 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided
to a Participant in this Plan shall be subject to the rights
afforded to any "alternate payee" under a "qualified domestic
relations order." Furthermore, a distribution to an "alternate
payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected
Participant has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee,
"qualified domestic relations order" and "earliest retirement
age" shall have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and control
the Plan assets subject, however, to the direction of an
investment Manager if the Trustee should appoint such
manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to Participants,
or, in the event of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements
and furnish to the Employer and/or Administrator for each
Plan Year a written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they
shall act by a majority of their number, but may authorize
one or more of them to sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust
Fund to keep the Trust Fund invested without distinction
between principal and income and in such securities or
property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to,
stocks, common or preferred, bonds and other evidences of
indebtedness or ownership, and real estate or any interest
therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors,
the short and long-term financial needs of the Plan on the
basis of information furnished by the Employer. In making
such investments, the Trustee shall not be restricted to
securities or other property of the character expressly
authorized by the applicable law for trust investments;
however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all
times the Plan may qualify as a qualified Profit Sharing
Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
(c) The Trustee may from time to time with the consent
of the Employer transfer to a common, collective, or pooled
trust fund maintained by any corporate Trustee hereunder,
all or such part of the Trust Fund as the Trustee may deem
advisable, and such part or all of the Trust Fund so
transferred shall be subject to all the terms and provisions
of the common, collective, or pooled trust fund which
contemplate the commingling for investment purposes of such
trust assets with trust assets of other trusts. The Trustee
may, from time to time with the consent of the Employer,
withdraw from such common, collective, or pooled trust fund
all or such part of the Trust Fund as the Trustee may deem
advisable.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities
under common law, statutory authority, including the Act, and
other provisions of the Plan, shall have the following powers and
authorities, to be exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same. In conjunction with
the purchase of securities, margin accounts may be opened
and maintained;
(b) To sell, exchange, convey, transfer, grant options
to purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at
public auction. No person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without
advertisement;
(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
"Options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one
or more of the Trustee's nominees, and to hold any
investments in bearer form, but the books and records of the
Trustee shall at all times show that all such investments
are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the
Plan in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and for any sum so
borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the
Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to
be in the best interests of the Plan, without liability for
interest thereon;
(g) To accept and retain for such time as the Trustee
may deem advisable any securities or other property received
or acquired as Trustee hereunder, whether or not such
securities or other property would normally be purchased as
investments hereunder;
(h) To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and
legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent
or counsel may or may not be agent or counsel for the
Employer;
(k) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or
other Contracts as and when entitled to do so under the
provisions thereof;
(l) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in
the Trustee's bank;
(m) To invest in Treasury Bills and other forms of
United States government obligations;
(n) To sell, purchase and acquire put or call options
if the options are traded on and purchased through a
national securities exchange registered under the Securities
Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by
a member firm of the New York Stock Exchange.
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations;
(p) To pool all or any of the Trust Fund, from time to
time, with assets belonging to any other qualified employee
pension benefit trust created by the Employer or an
affiliated company of the Employer, and to commingle such
assets and make joint or common investments and carry joint
accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such
investments or accounts or any pooled assets of the two or
more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights
and privileges, although not specifically mentioned herein,
as the Trustee may deem necessary to carry out the purposes
of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's sole discretion,
make loans to Participants and Beneficiaries under the
following circumstances: (1) loans shall be made available
to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the
amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5)
shall provide for repayment over a reasonable period of
time.
(b) Loans shall not be granted to any Participant or
his Beneficiary that provide for a repayment period
extending beyond such Participant's Normal Retirement Date.
(c) Loans made pursuant to this Section (when added to
the outstanding balance of all other loans made by the Plan
to the Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to
the Participant during the one year period ending on
the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan to
the Participant on the date on which such loan was
made, or
(2) the greater of (A) one-half (1/2) of the
present value of the non-forfeitable accrued benefit of
the Employee under the Plan, or (B) $10,000.
For purposes of this limit, all plans of the
Employer shall be considered one plan. Additionally,
with respect to any loan made prior to January 1, 1987,
the $50,000 limit specified in (1) above shall be
unreduced.
(d) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over
a period not to exceed five (5) years. However, loans used
to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is
made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of
time that may exceed five (5) years. Notwithstanding the
foregoing, loans made prior to January 1, 1987 which are
used to acquire, construct, reconstruct or substantially
rehabilitate any dwelling unit which, within a reasonable
period of time is to be used (determined at the time the
loan is made) as a principal residence of the Participant or
a member of his family (within the meaning of Code Section
267(c)(4)) may provide for periodic repayment over a
reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may
provide for periodic payments which are made less frequently
than quarterly and which do not necessarily result in level
amortization.
(e) Any loan made pursuant to this Section after
August 18, 1985 where the Vested interest of the Participant
is used to secure such loan shall require the written
consent of the Participant's spouse in a manner consistent
with Section 6.5(a). Such written consent must be obtained
within the 90-day period prior to the date the loan is made.
Any security interest held by the Plan by reason of an
outstanding loan to the Participant shall be taken into
account in determining the amount of the death benefit or
Pre-Retirement Survivor Annuity. However, no spousal
consent shall be required under this paragraph if the total
accrued benefit subject to the security is not in excess of
$3,500.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee
shall, from time to time, in accordance with the terms of the
Plan, make payments out of the Trust Fund. The Trustee shall not
be responsible in any way for the application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation
as shall from time to time be agreed upon in writing by the
Employer and the Trustee. An individual serving as Trustee who
already receives full-time pay from the Employer shall not
receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including
reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund
unless paid or advanced by the Employer. All taxes of any kind
and all kinds whatsoever that may be levied or assessed under
existing or future laws upon, or in respect of, the Trust Fund or
the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within sixty (60) days after the later of the
Anniversary Date or receipt of the Employer's contribution for
each Plan Year, the Trustee shall furnish to the Employer and
Administrator a written statement of account with respect to the
Plan Year for which such contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the
Trust Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith
upon its receipt of each such statement of account, shall
acknowledge receipt thereof in writing and advise the
Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such
statement of account within thirty (30) days after its
receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall
be binding as to all matters embraced therein as between the
Employer and the Trustee to the same extent as if the
account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so
desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent
qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of his audit setting forth his opinion as to whether
each of the following statements, schedules or lists, or any
others that are required by Section 103 of the Act or the
Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally
accepted accounting principles applied consistently:
(1) statement of the assets and liabilities of
the Plan;
(2) statement of changes in net assets available
to the Plan;
(3) statement of receipts and disbursements, a
schedule of all assets held for investment purposes, a
schedule of all loans or fixed income obligations in
default at the close of the Plan Year;
(4) a list of all leases in default or
uncollectible during the Plan Year;
(5) the most recent annual statement of assets
and liabilities of any bank common or collective trust
fund in which Plan assets are invested or such
information regarding separate accounts or trusts with
a bank or insurance company as the Trustee and
Administrator deem necessary; and
(6) a schedule of each transaction or series of
transactions involving an amount in excess of three
percent (3%) of Plan assets.
All auditing and accounting fees shall be an
expense of and may, at the election of the
Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to
enable the Administrator to comply with Section 103 of the
Act is maintained by a bank, insurance company, or similar
institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Section 103(b) of the Act
within one hundred twenty (120) days after the end of the
Plan Year or by such other date as may be prescribed under
regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering
to the Employer, at least thirty (30) days before its
effective date, a written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at
his last known address, at least thirty (30) days before its
effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such
appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named
as a Trustee herein. Until such a successor is appointed,
the remaining Trustee or Trustees shall have full authority
to act under the terms of the Plan.
(d) The Employer may designate one-or more successors
prior to the death, resignation, incapacity, or removal of a
Trustee. In the event a successor is so designated by the
Employer and accepts such designation, the successor shall,
without further act, become vested with all the estate,
rights, powers, discretions, and duties of his predecessor
with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation,
incapacity, or removal of-his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, he shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of
the Plan Year during which he served as Trustee. This
statement shall be either (i) included as part of the annual
statement of account for the Plan Year required under
Section 7.7 or (ii) set forth in a special statement. Any
such special statement of account should be rendered to the
Employer no later than the due date of the annual statement
of account for the Plan Year. The procedures set forth in
Section 7.7 for the approval by the Employer of annual
statements of account shall apply to any special statement
of account rendered hereunder and approval by the Employer
of any such special statement in the manner provided in
Section 7.7 shall have the same effect upon the statement as
the Employer's approval of an annual statement of account.
No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of
any predecessor who has rendered all statements of account
required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
The Trustee, on behalf of any Participant, may accept
funds transferred from another trust forming part of a pension,
profit sharing, or stock bonus plan meeting the requirements of
Code Section 401(a) or a "conduit" Individual Retirement Account
for the account of a Participant under this Plan, provided the
conditions precedent to such transfer set forth in Section 4.11
are satisfied. In the event of such a transfer under this Plan,
t he Trustee shall maintain a separate, nonforfeitable
"Participant's Rollover Account" for the amount transferred. In
addition, any such transfer may only be made if it does not
result in the elimination of any "Section 411(d)(6) protected
benefits" as described in Section 8.1. The Trustee may act upon
the direction of the Administrator without determining the facts
concerning a transfer.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend the Plan, subject to the limitations of this Section.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written
consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the
amendment affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other
than for the exclusive benefit of the Participants or their
Beneficiaries or estates; or cause any reduction in the
amount credited to the account of any Participant; or cause
or permit any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4), no Plan amendment or transaction
having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective if
it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section
411(d)(6) protected benefits" the result of which is a
further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as
of the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are
benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and
optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full termination, all amounts credited to the affected
Participants' Combined Accounts shall become 100% Vested as
provided in Section 6.4 and shall not thereafter be subject
to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or in
property or through the purchase of irrevocable
nontransferable deferred commitments from an insurer.
Except as permitted by Regulations, the termination of the
Plan shall not result in the reduction of "Section 411(d)(6)
protected benefits" in accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with,
or its assets and/or liabilities may be transferred to any other
plan and trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the
plan immediately after such transfer, merger or consolidation,
are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the
transfer, merger or consolidation, and such transfer, merger or
consolidation does not otherwise result in the elimination or
reduction of any "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration
or an inducement for the employment of any Participant or
Employee. Nothing contained in this Plan shall be deemed to give
any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time
regardless of the effect which such discharge shall have upon him
as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and
any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject
to, the debts, contracts, liabilities, engagements, or torts
of any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as
may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, for any
reason, under any provision of the Plan. At the time a
distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount
distributed as shall equal such indebtedness shall be paid
by the Trustee to the Trustee or the Administrator, at the
direction of the Administrator, to apply against or
discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given
written notice by the Administrator that such indebtedness
is to be so paid in whole or part from his Participant's
Combined Account. If the Participant or Beneficiary does
not agree that the indebtedness is a valid claim against his
vested Participant's Combined Account, he shall be entitled
to a review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p),
and those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations
order", a former spouse of a Participant shall be treated as
the spouse or surviving spouse for all purposes under the
Plan.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced
according to the Act and the laws of the Commonwealth of
Pennsylvania, other than its laws respecting choice of law, to
the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so
apply, and whenever any words are used herein in the singular or
plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which
the Trustee or the Administrator may be a party, and such claim,
suit, or proceeding is resolved in favor of the Trustee or
Administrator, they shall be entitled to be reimbursed from the
Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall
have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or
by any other means, for any part of the corpus or income of
any trust fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to
Section 403(c)(2)(A) of the Act, the Employer may
demand repayment of such excessive contribution at any
time within one (1) year following the time of payment
and the Trustees shall return such amount to the
Employer within the one (1) year period. Earnings of
the Plan attributable to the excess contributions may
not be returned to the Employer but any losses
attributable thereto must reduce the amount so
returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company,
unless exempted by the Act and regulations thereunder, shall be
bonded in an amount not less than 10% of the amount of the funds
such Fiduciary handles; provided, however, that the minimum bond
shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or
class to be covered and their predecessors, if any, during the
preceding Plan Year, or if there is no preceding Plan Year, then
by the amount of the funds to be handled during the then current
year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary
alone or in connivance with others. The surety shall be a
corporate surety company (as such term is used in Section
412(a)(2) of the Act), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan
to the contrary, the cost of such bonds shall be an expense of
and may, at the election of the Administrator, be paid from the
Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their
successors, shall be responsible for the validity of any Contract
issued hereunder or for the failure on the part of the insurer to
make payments provided by any such Contract, or for the action of
any person which may delay payment or render a Contract null and
void or unenforceable in whole or in part.
9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall
not have any responsibility for the validity of this Plan or for
the tax or legal aspects of this Plan. The insurer shall be
protected and held harmless in acting in accordance with any
written direction of the Trustee, and shall have no duty to see
to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee.
Regardless of any provision of this Plan, the insurer shall not
be required to take or permit any action or allow any benefit or
privilege contrary to the terms of any Contract which it issues
hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal
representative, Beneficiary, or to any guardian or committee
appointed for such Participant or Beneficiary in accordance with
the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a
condition precedent to such payment, to" execute a receipt and
release thereof in such form as shall be determined by the
Trustee or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or
thing, it shall be done and performed by a person duly authorized
by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the
Employer, (2) the Administrator and (3) the Trustee. The named
Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them
under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under
Section 4.1; and shall have the sole authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole
or in part, the Plan. The Administrator shall have the sole
responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The
Trustee shall have the sole responsibility of management of the
assets held under the Trust, except those assets, the management
of which has been assigned to an Investment Manager, who shall be
solely responsible for the management of the assets assigned to
it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action
of another named Fiduciary as being proper under the Plan, and is
not required under the Plan to inquire into the propriety of any
such direction, information or action. It is intended under the
Plan that each named Fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and
obligations under the Plan. No named Fiduciary shall guarantee
the Trust Fund in any manner against investment loss or
depreciation in asset value. Any person or group may serve in
more than one Fiduciary capacity.
9.13 HEADINGS
The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in
any construction of the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the
Plan receives an adverse determination with respect to its
initial qualification, then the Plan may return such
contributions to the Employer within one year after such
determination, provided the application for the
determination is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of
the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary,
except Sections 3.6, 3.7, and 4.1(e), any contribution by
the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed,
the Employer may, within one (1) year following the
disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution
may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with
the consent of the Employer and Trustee, any other corporation or
entity, whether an affiliate or subsidiary or not, may adopt this
Plan and all of the provisions hereof, and participate herein and
be known as a Participating Employer, by a properly executed
document evidencing said intent and will of such Participating
Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required
to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as well as
all increments thereof.
(c) The transfer of any Participant from or to an
Employer participating in this Plan, whether he be an
Employee of the Employer or a Participating Employer, shall
not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as
well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan,
shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure, in accordance with Section 4.4(d),
only to the benefit of the Participants of the Employer or
Participating Employer by which the forfeiting Participant
was employed.
(e) Any expenses of the Trust which are to be paid by
the Employer or borne by the Trust Fund shall be paid by
each Participating Employer in the same proportion that the
total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the
credit of all Participants.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a
part of this Plan; provided, however, that with respect to all of
its relations with the Trustee and Administrator for the purpose
of this Plan, each Participating Employer shall be deemed to have
designated irrevocably the Employer as its agent. Unless the
context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer
as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such
transfer, the Employee involved shall carry with him his
accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall
thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer
from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
All contributions made by a Participating Employer, as
provided for in this Plan, shall be determined separately by each
Participating Employer, and shall be paid to and held by the
Trustee for the exclusive benefit of the Employees of such
Participating Employer and the Beneficiaries of such Employees,
subject to all the terms and conditions of this Plan. On the
basis of the information furnished by the Administrator, the
Trustee shall keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the
accounts and credits of the Employees of each Participating
Employer. The Trustee may, but need not, register Contracts so
as to evidence that a particular Participating Employer is the
interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the
employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be
by the written action of each and every Participating Employer
and with the consent of the Trustee where such consent is
necessary in accordance with the terms of this Plan.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to
discontinue or revoke its participation in the Plan. At the time
of any such discontinuance or revocation, satisfactory evidence
thereof and of any applicable conditions imposed shall be
delivered to the Trustee. The Trustee shall thereafter transfer,
deliver and assign Contracts and other Trust Fund assets
allocable to the Participants of such Participating Employer to
such new Trustee as shall have been designated by such
Participating Employer, in the event that it has established a
separate pension plan for its Employees provided, however, that
no such transfer shall be made if the result is the elimination
or reduction of any "Section 411(d)(6) protected benefits' in
accordance with Section 8.1(c). If no successor is designated,
the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of Article VII
hereof. In no such event shall any part of the corpus or income
of the Trust as it relates to such Participating Employer be used
for or diverted for purposes other than for the exclusive benefit
of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and
all necessary rules or regulations, binding upon all
Participating Employers and all Participants, to effectuate the
purpose of this Article.
IN WITNESS WHEREOF, this Plan has been executed the day
and year first above written.
Signed, sealed, and delivered
in the presence of:
THREE RIVERS BANK AND TRUST COMPANY
_____________________________ By ______________________________
Employer
_____________________________
Witnesses as to Employer
Attest ___________________________
THREE RIVERS BANK AND TRUST COMPANY
_____________________________ By ______________________________
Trustee
_____________________________
Witnesses as to Trustee
Attest ___________________________