EXHIBIT 10.7
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended And Restated Effective January 1, 1997)
ARTICLE COMMENCING
NUMBER DESCRIPTION ON PAGE
- -----------------------------------------------------------------------------------------
1. NAME, EFFECTIVE DATE, PURPOSE, HISTORY AND CONSTRUCTION..................1-1
2. DEFINITIONS..............................................................2-1
3. ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION...................3-1
4. CONTRIBUTIONS............................................................4-1
5. ALLOCATIONS OF CONTRIBUTIONS.............................................5-1
6. VESTING OF ACCOUNTS......................................................6-1
7. ALLOCATION OF TRUST INCOME OR LOSS.......................................7-1
8. PARTICIPANTS' ACCOUNTS...................................................8-1
9. DISTRIBUTIONS AND WITHDRAWALS............................................9-1
10. SERVICE.................................................................10-1
11. FIDUCIARY RESPONSIBILITY................................................11-1
12. ADMINISTRATIVE COMMITTEE................................................12-1
13. INVESTMENTS AND LOANS...................................................13-1
14. TRUSTEE.................................................................14-1
15. AMENDMENT, TERMINATION AND MERGER.......................................15-1
16. ASSIGNMENTS.............................................................16-1
17. ADOPTION OF THE PLAN BY ASSOCIATED EMPLOYERS............................17-1
i
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended And Restated Effective January 1, 1997)
ARTICLE COMMENCING
NUMBER DESCRIPTION ON PAGE
- -----------------------------------------------------------------------------------------
1. NAME, EFFECTIVE DATE, PURPOSE, HISTORY AND CONSTRUCTION..................1-1
1.1 Plan Name.........................................................1
1.2 Effective Date....................................................1
1.3 Purpose and History...............................................1
1.4 Construction......................................................2
1.5 Employment Relationship Not Affected..............................3
1.6 Terminated Participants Not Affected..............................3
2. DEFINITIONS..............................................................2-1
3. ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION...................3-1
3.1 Definitions.......................................................1
3.2 Participation.....................................................1
3.3 Beneficiary Designation...........................................2
3.4 Change from Ineligible to Eligible Employee.......................2
3.5 Former Employee Rehired...........................................3
3.6 Committee Determines Eligibility..................................3
4. CONTRIBUTIONS............................................................4-1
4.1 Definitions.......................................................1
4.2 Member Employer Contributions.....................................3
4.3 Timing of, Limitations on and Return of Member
Employer Contributions.....................................4
4.4 Participants' Voluntary Contributions Not Permitted...............4
4.5 Salary Deferral Contributions.....................................5
4.6 Nondiscrimination Tests For Elective Deferrals....................5
4.7 Nondiscrimination Tests For Member Employer
Matching Contributions.....................................9
4.8 Adjustment to Corrective Payments................................12
4.9 Overriding Limitations...........................................12
4.10 Record Requirements..............................................13
4.11 Rollover Contributions and Direct Transfers......................13
4.12 Qualified Military Service Contributions.........................15
5. ALLOCATIONS OF CONTRIBUTIONS.............................................5-1
5.1 Definitions.......................................................1
5.2 Allocation Methods................................................1
ii
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended And Restated Effective January 1, 1997)
ARTICLE COMMENCING
NUMBER DESCRIPTION ON PAGE
- -----------------------------------------------------------------------------------------
5.3 Limitations on Annual Allocations.................................2
5.4 Restoration Procedures............................................3
5.5 Qualified Military Service Allocations............................4
6. VESTING OF ACCOUNTS......................................................6-1
6.1 Automatic Vesting.................................................1
6.2 No Divestment.....................................................1
6.3 Amendment to Vesting..............................................1
6.4 Lost Participants.................................................1
7. ALLOCATION OF TRUST INCOME OR LOSS.......................................7-1
7.1 Determination of Net Income.......................................1
7.2 Valuation.........................................................1
7.3 Valuation Dates...................................................1
7.4 Special Valuation Dates at Committee Discretion...................2
7.5 Accounts to be Valued.............................................2
8. PARTICIPANTS' ACCOUNTS...................................................8-1
8.1 Separate Accounts.................................................1
8.2 Statement of Accounts.............................................1
8.3 Valuation of Account When Payment Due.............................1
9. DISTRIBUTIONS AND WITHDRAWALS............................................9-1
9.1 General...........................................................1
9.2 Administrative Rules..............................................1
9.3 Timing of Distributions...........................................2
9.4 Treatment of Deferred Amounts.....................................4
9.5 Methods of Distribution...........................................4
9.6 Distribution in Periodic Payments.................................5
9.7 Distribution Upon Death of Participant............................6
9.8 Distributions to Minors or Legally Incompetents...................6
9.9 Tax Information To Be Provided....................................7
9.10 In Service Withdrawals............................................7
9.11 Limitations on Distributions Upon Plan Termination................9
9.12 Direct Rollovers.................................................10
10. SERVICE.................................................................10-1
10.1 Definitions.......................................................1
iii
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended And Restated Effective January 1, 1997)
ARTICLE COMMENCING
NUMBER DESCRIPTION ON PAGE
- -----------------------------------------------------------------------------------------
10.2 Crediting of Hours Subject to DOL Regulation......................2
10.3 Hours of Service Equivalency......................................3
10.4 Qualified Military Service Credited...............................3
11. FIDUCIARY RESPONSIBILITY................................................11-1
11.1 Named Fiduciaries.................................................1
11.2 Fiduciary Standards...............................................1
11.3 Fiduciaries Liable for Breach of Duty.............................1
11.4 Fiduciary May Employ Agents.......................................1
11.5 Authority Outlined................................................2
11.6 Fiduciaries Not to Engage in Prohibited Transactions..............3
11.7 Duties of Plan Administrator......................................3
12. ADMINISTRATIVE COMMITTEE................................................12-1
12.1 Appointment of Administrative Committee...........................1
12.2 Committee Operating Rules.........................................1
12.3 Committee Authority...............................................1
12.4 Committee to Establish Funding Policy.............................2
12.5 Committee May Retain Advisors.....................................2
12.6 Claims Procedure..................................................2
12.7 Committee Indemnification.........................................4
13. INVESTMENTS AND LOANS...................................................13-1
13.1 Investment Authority..............................................1
13.2 Use of Mutual or Commingled Funds Permitted.......................1
13.3 Trustee May Hold Necessary Cash...................................1
13.4 Trustee to Act Upon Committee Instruction.........................1
13.5 Appointment of Investment Manager.................................2
13.6 No Loans Permitted................................................2
13.7 Separate Investment Funds.........................................2
14. TRUSTEE.................................................................14-1
14.1 Trustee Governing Terms Effective January 1, 1998.................1
14.2 Trustee Duties....................................................1
14.3 Indicia of Ownership Must Be in United States.....................1
14.4 Permissible Trustee Action........................................1
14.5 Trustee's Fees For Services and Advisors Retained.................2
14.6 Quarterly Accounting and Asset Valuation..........................2
iv
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended And Restated Effective January 1, 1997)
ARTICLE COMMENCING
NUMBER DESCRIPTION ON PAGE
- -----------------------------------------------------------------------------------------
14.7 Trustee Removal or Resignation....................................3
14.8 Approval of Trustee Accounting....................................3
14.9 Trust Not Terminated Upon Trustee Removal or Resignation..........3
14.10 Trustee May Consult With Legal Counsel............................4
14.11 Trustee Not Required to Verify Identification or Addresses........4
14.12 Individual Trustee Rules..........................................4
14.13 Indemnification of Trustee and Insurance..........................5
14.14 Income Tax Withholding............................................5
15. AMENDMENT, TERMINATION AND MERGER.......................................15-1
15.1 Trust is Irrevocable..............................................1
15.2 Sponsoring Employer May Amend Plan and Trust Agreement............1
15.3 Sponsoring Employer May Terminate Plan/Member Employers May
Discontinue Matching and Profit Sharing Contributions......1
15.4 Timing of Plan Termination....................................... 2
15.5 Action Required Upon Plan Termination.............................2
15.6 Nonreversion of Assets............................................3
15.7 Merger or Consolidation Cannot Reduce Benefits....................3
16. ASSIGNMENTS.............................................................16-1
16.1 No Assignment.....................................................1
16.2 Qualified Domestic Relations Order Permitted......................1
16.3 Offset to Provide Certain Judgments and Settlements Permitted.....1
17. ADOPTION OF THE PLAN BY ASSOCIATED EMPLOYERS............................17-1
17.1 Purpose...........................................................1
17.2 Becoming a Member Employer........................................1
17.3 Participation as a Member Employer................................1
17.4 Termination of Participation in the Plan..........................3
17.5 Charges to Member Employers.......................................3
v
CLOVIS COMMUNITY BANK
SALARY DEFERRAL PLAN
(As Amended and Restated Effective January 1, 1997)
THIS PLAN AND TRUST AGREEMENT is made and entered into by and between
Clovis Community Bank (Sponsoring Employer) and Daniel N. Cunningham and Wanda
Lee Rogers (Trustees prior to January 1, 1998).
ARTICLE 1
NAME, EFFECTIVE DATE, PURPOSE, HISTORY AND CONSTRUCTION
1.1 PLAN NAME
(a) PLAN NAME
The Plan set forth in this Plan and Trust Agreement shall be
designated as the Clovis Community Bank Salary Deferral Plan.
1.2 EFFECTIVE DATE
The effective date of this amended and restated Plan and Trust
Agreement shall be January 1, 1997 except as specifically provided otherwise
elsewhere in this document.
1.3 PURPOSE AND HISTORY
(a) PURPOSE
The Plan and Trust are intended to qualify as a profit sharing
plan (with a 401(k) arrangement) under Code Sections 401(a) and 501(a) and are
created and maintained for the exclusive benefit of Eligible Employees of the
Employer and their Beneficiaries to enable them to share in Employer profits, to
provide Eligible Employees with a means to accumulate retirement savings, to
provide retirement funds, and to provide benefits in the event of the death or
disability of the Employee.
(b) HISTORY
The original Plan and Trust Agreement was first effective January
1, 1983, was subsequently amended several times, was restated effective January
1, 1989 and was designated as the Clovis Community Bank Salary Deferral Plan.
1-1
(c) PURPOSES OF RESTATEMENT
The principal purposes of this amendment and restatement are to
consolidate all amendments made to the Plan and Trust Agreement since the last
amendment and restatement, to customize the Plan language and to incorporate
required language as mandated by the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1997, the Uruguay Round Agreements Act (GATT) and
other recent laws and regulations.
Further, this amendment and restatement is made to facilitate
administration as the Plan has been amended by a change to the Plan eligibility
provisions and addition of a Member Employer matching contribution provision.
1.4 CONSTRUCTION
The following miscellaneous provisions shall apply in the
construction of this Plan and Trust Agreement:
(a) STATE JURISDICTION
All matters respecting the validity, effect, interpretation and
administration of this Plan and Trust Agreement shall be determined in
accordance with the laws of the State of California except where preempted by
ERISA or other federal statutes.
(b) GENDER
Wherever appropriate, words used in the singular may include the
plural or the plural may be read as the singular, the masculine may include the
feminine, and the neuter may include both the masculine and the feminine.
(c) APPLICATION OF ERISA AND CODE REFERENCES
All references to sections of ERISA or the Code, or any
regulations or rulings thereunder, shall be deemed to refer to such sections as
they may subsequently be modified, amended, replaced or amplified by any federal
statutes, regulations or rulings of similar application and import enacted by
the Government of the United States or any duly authorized agency of the United
States Government.
(d) ENFORCEABLE PROVISIONS REMAIN EFFECTIVE
If any provision of this Plan and Trust Agreement shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions of the Plan and Trust Agreement shall continue to be fully
effective.
(e) HEADINGS
Headings are inserted for reference only and constitute no part
of the construction of this Plan and Trust Agreement.
1-2
1.5 EMPLOYMENT RELATIONSHIP NOT AFFECTED
Nothing in the Plan or Trust Agreement shall be deemed a contract
between the Employer and any Employee, nor shall the rights or obligations of
the Employer or any Employee to continue or terminate employment at any time be
affected hereby.
1.6 TERMINATED PARTICIPANTS NOT AFFECTED
Notwithstanding anything to the contrary herein, the rights and
remedies, if any, of any person hereunder shall be determined as of the date his
participation ceased or the date he ceased to be an Eligible Employee, whichever
occurs first, and shall be based on the terms and conditions of the Plan and
Trust Agreement in effect on such date, without regard to any changes made by
articles which have specific effective dates subsequent to such date.
1-3
ARTICLE 2
DEFINITIONS
DEFINITIONS
Terms which are used only in a single article (beginning with Article 3)
are generally defined at the beginning of that article. Article 2.58 lists the
terms so defined. The following words and phrases are used throughout this Plan
and Trust Agreement and are defined below:
2.1 "ACCOUNT" means the aggregate of all records maintained by the
Committee for purposes of determining a Participant's or Beneficiary's interest
in the Trust Fund and shall include the Employer Account and Employee Account,
as adjusted by such other amounts properly credited or debited to such Account.
Each sub-account is defined alphabetically in Article 2.
2.2 "ADJUSTMENT FACTOR" means the cost of living factor prescribed by the
Secretary of the Treasury under Code Section 415(d), as applied to such items
and in such manner as the Secretary shall provide. For purposes of the OBRA `93
annual compensation limit under Code Section 401(a)(17), the Adjustment Factor
shall be applied as provided in Code Section 401(a)(17)(B).
2.3 "ALLOWABLE COMPENSATION" for purposes of determining the minimum
contributions for a Top-Heavy Plan, and for purposes of determining the
limitations on allocations pursuant to Article 5.3, means the total of all
wages, salaries, fees for professional services and other amounts paid by the
Employer during a Limitation Year to a Participant for services actually
rendered in the course of employment including (but not limited to) bonuses,
overtime, commissions and incentive compensation, but excluding amounts which
are contributed to a retirement plan, deferred compensation plan or other plan
and which are not included as taxable income for such year, or amounts which are
not deemed to be income for current services rendered such as amounts realized
from the sale, exercise or exchange of Employer stock or stock options.
Allowable Compensation shall not include amounts which a Participant elected to
have the Employer contribute on his behalf for the Fiscal Year as a salary
deferral contribution.
2-1
(a) Notwithstanding the preceding, for Fiscal Years beginning in 1998
and thereafter, Allowable Compensation shall include all amounts
(contributed by the Employer pursuant to a salary reduction agreement)
which are not includible in the Employee's gross income under Code Sections
125, 402(e)(3), 402(b) or 403(b).
(b) Notwithstanding the foregoing, amounts earned in the Limitation
Year but paid during the first few weeks of the next year because of the
timing of pay periods and pay days may be included on a uniform and
consistent basis in the Allowable Compensation of all similarly situated
Participants for the Limitation Year.
2.4 "ALTERNATE PAYEE" means any spouse, former spouse, child or other
dependent of a Participant recognized by a domestic relations order as having a
right to receive all, or a portion of, a Participant's benefits under the Plan.
2.5 "ASSOCIATED EMPLOYER" means any entity that the Sponsoring Employer has
designated as eligible to become a Member Employer under this Plan and Trust
Agreement (in accordance with Article 17).
2.6 "BENEFICIARY" means any person designated by a Participant to receive
benefits upon the death of such Participant, subject to the provisions of
Article 3.3.
2.7 "BREAK IN SERVICE" means for purposes of Article 3, an Eligibility
Computation Period, in which an Employee of the Employer is credited with 500 or
fewer Hours of Service.
2.8 "CODE" means the Internal Revenue Code of 1986, as amended (and
regulations issued thereunder).
2.9 "COMMITTEE" means the Administrative Committee designated under Article
12.
2.10 "DATE OF HIRE" means the date on which an Employee first performs an
Hour of Service for the Employer.
2.11 "DEFERRED RETIREMENT DATE" means the date of actual retirement from
the Employer by a Participant who remains in the employ of the Employer after
attaining his Normal Retirement Date.
2-2
2.12 "DETERMINATION DATE" means, with respect to any Fiscal Year, the last
day of the preceding Fiscal Year. If the Employer maintains two or more
qualified plans which have different fiscal years and which either must be
aggregated or which are allowed to be aggregated when determining top-heaviness
pursuant to this Plan and Trust Agreement, the Determination Date to be used for
this Plan for aggregation purposes shall be the Determination Date which falls
within the same calendar year as the determination dates for all such plans
which are required or permitted to be aggregated.
2.13 "DISABILITY" means the permanent incapacity of a Participant, by
reason of physical or mental illness, to perform his usual duties for the
Employer, resulting in termination of his service with the Employer. Disability
shall be determined by the Committee in a uniform and nondiscriminatory manner
after consideration of such evidence as it may require, which shall include a
report of such physician or physicians as it may designate.
2.14 "EFFECTIVE DATE" of this amended and restated Plan and Trust Agreement
shall mean January 1, 1997, except as specifically provided otherwise elsewhere
in this document.
2.15 "ELIGIBLE EMPLOYEE" has the meaning set forth in Article 3.1.
2.16 "ELIGIBLE PARTICIPANT" means:
(a) An Eligible Employee who completed at least 1,000 Hours of Service
in the Fiscal Year and who is an Eligible Employee and a Participant on the
last day of the Fiscal Year, or
(b) Effective May 1, 1999, a Participant who was an Eligible Employee
and who terminated employment during the Fiscal Year due to death or
Disability, or after having reached his Normal Retirement Date, or
(c) Eligible Employees who were Participants at any time during the
Fiscal Year but did not meet the requirements of (a) or (b) above but only
for purposes of Articles 4.1(a) and/or 4.1(b).
2.17 "EMPLOYEE" means any person in the Service of the Employer including
Leased Employees, officers and common-law Employees, but excluding directors who
are not in the
2-3
Employer's employ in any other capacity. Subcategories of "Employee" are defined
alphabetically in Article 2.
2.18 "EMPLOYEE ACCOUNT" means that portion of an Account attributable to a
Participant's Salary Deferral Account and Rollover Account.
2.19 "EMPLOYER" means with respect to a specific Member Employer, such
Member Employer and any other corporation, which is a member of a controlled
group of corporations (as defined in Code Section 414(b)) which includes such
Member Employer, any trade or business (whether or not incorporated) which is
under common control (as defined in Code Section 414(c)) with such Member
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 such
Member Employer, and any other entity required to be aggregated with such Member
Employer pursuant to regulations under Code Section 414(o).
2.20 "EMPLOYER ACCOUNT" means that portion of an Account attributable to
Employer contributions. A Participant's Employer Account shall include such
Participant's Matching Account, Non-Elective Account, and Profit Sharing
Account.
2.21 "ENTRY DATE" means January 1 and July 1.
2.22 "ERISA" means the Employee Retirement Income Security Act of 1974 (and
regulations issued thereunder).
2.23 "EXCESS COMPENSATION" means Plan Compensation in excess of the Social
Security Taxable Wage Base for the calendar year in which the Fiscal Year
begins.
2.24 "FISCAL YEAR" means the accounting year of the Plan and Trust, which
is the 12-consecutive month period ending December 31.
2.25 "GENERAL TRUST FUND" means that portion of the Trust Fund other than
property and income held as or for segregated Accounts or under separate
investment funds under the provisions of this Plan and Trust Agreement.
2-4
2.26 "HOUR OF SERVICE" has the meaning set forth in Article 10.1(b).
2.27 "INACTIVE PARTICIPANT" means a Participant who remains an Employee,
but who ceases to be an Eligible Employee because of a change in employment
status. Accounts of Inactive Participants shall share in allocations of
contributions to the extent provided in Article 5, and such Accounts shall
continue to be adjusted by other amounts properly credited or debited to such
Accounts pursuant to Article 7. Inactive Participants shall not be permitted to
have salary deferral contributions made on their behalf by a Member Employer.
2.28 "KEY EMPLOYEE" means, with respect to a Fiscal Year, any Employee or
former Employee (including any deceased Employee) who at any time during the
"testing period", consisting of the Fiscal Year containing the Determination
Date and the four preceding Fiscal Years is or was:
(a) OFFICER
An officer of the Member Employer, or an Employee with the
authority of an officer, with Testing Compensation of more than 50% of the
applicable dollar limit under Code Section 415(b)(1)(A) for the applicable
Fiscal Year. However, no more than 50 Employees (or if less, the greater of 3
Employees or l0% of the total number of Employees, including Leased Employees,
who performed services for the Employer at any time during the "testing period")
shall be treated as officers. In addition, such Employees who meet the
requirements of this paragraph and who had the largest annual Testing
Compensation from the Employer in any Fiscal Year during the "testing period"
shall first be counted as officers, without regard to whether they are Key
Employees for any other reason; or
(b) OWNER
(i) A 5% Owner; or
(ii) A 1% Owner with annual Testing Compensation from the
Employer for the applicable Fiscal Year of more than $150,000; or
(iii) A 1/2% Owner who
(1) Is one of the 10 Employees who have the largest
ownership interest in the Employer,
(2) Has annual Testing Compensation from the Employer which
is greater than the dollar limitation under Code Section 415(c)(1)(A) for the
applicable Fiscal Year, and
2-5
(3) Does not meet the criteria in (i) or (ii). For purposes
of this (iii), if two Employees have the same ownership interest in the Employer
during the "testing period", then the Employee with the greater annual Testing
Compensation from the Employer for the Fiscal Year during which the ownership
interest existed shall be considered to have a larger ownership interest in the
Employer.
(c) BENEFICIARY
A Beneficiary of a deceased Key Employee shall be considered
to be a Key Employee, and a Beneficiary of a deceased Non-Key Employee shall
be considered a Non-Key Employee. Notwithstanding the above, the Committee
shall be guided by the Code in determining Key Employees for any Fiscal Year
and shall maintain records adequate to determine Key Employees for any Fiscal
Year.
(d) AGGREGATION RULES
For purposes of this Article 2.28, the rules of sub-sections
(b), (c) and (m) of Code Section 414 shall not apply for purposes of
determining ownership, such that Owners shall be determined separately for
each Member Employer.
2.29 "LEASED EMPLOYEE" means any individual who would not otherwise be
considered an Employee but who has provided services to the Employer pursuant
to an agreement between the Employer and any other entity, and such services
are performed under the primary direction or control of the Employer and are
performed on a substantially full-time basis for a period of at least one
year. However, Leased Employees will not be considered Employees if they
constitute less than 20% of the Employer's Non-Highly Compensated Employees
as defined in Code Section 414(q) and if they are covered by a plan described
in Code Section 414(n)(5).
2.30 "MATCHING ACCOUNT" means that portion of an Account attributable to
Member Employer matching contributions.
2.31 "MEMBER EMPLOYER" means the Sponsoring Employer and any Associated
Employer that has adopted the Plan and Trust Agreement in accordance with the
terms and conditions set forth herein.
2.32 "NON-ELECTIVE ACCOUNT" means that portion of an Account
attributable to the Member Employer's nonelective contributions as provided
in Article 4.6(c).
2-6
2.33 "NON-KEY EMPLOYEE" means any Employee who is not a Key Employee,
including Employees who are former Key Employees.
2.34 "NORMAL RETIREMENT DATE" means the date of a Participant's 65th
birthday.
2.35 "OBRA `93" means the Omnibus Budget Reconciliation Act of 1993 (and
regulations issued thereunder).
2.36 "OWNER" means any person who owns (within the meaning of Code
Sections 318 and 416(i)(1)(B)), or has owned within the four Fiscal Years
prior to the Fiscal Year under consideration, a portion of the outstanding
stock or voting power of capital or profits interest in the Member Employer.
The ownership percentage of a "5%" Owner means greater than a 5% interest,
that of a "1%" Owner means greater than a 1% interest and that of a "1/2%"
Owner means greater than a 1/2% interest.
2.37 "PARTICIPANT" means any Employee or former Employee who has entered
the Plan in accordance with Article 3, and whose Account, if any, hereunder
has not subsequently been liquidated.
2.38 "PLAN" means the plan created by this Agreement.
2.39 "PLAN ADMINISTRATOR" means the Administrative Committee.
2.40 "PLAN COMPENSATION" for any Fiscal Year, for purposes of Articles
4.2(c), 5.2 and 4.5 means all amounts paid by the Member Employer to an
Eligible Employee while a Participant with respect to services rendered
during such Fiscal Year INCLUDING all amounts contributed by the Member
Employer pursuant to a salary reduction agreement which are not includible in
the Employee's gross income under Code Sections 125, 402(e)(3), 402(b) or
403(b). Notwithstanding the above, Plan Compensation shall not exceed the
OBRA `93 annual compensation limit of $150,000, multiplied by the Adjustment
Factor. For purposes of this section, "Plan Compensation" shall EXCLUDE
amounts contributed to a non-qualified deferred compensation plan or amounts
realized from the sale, exercise or exchange of Employer stock or stock
options, auto allowances and taxable fringe benefits.
2-7
2.41 "PROFIT SHARING ACCOUNT" means that portion of an Account resulting
from Member Employer profit sharing contributions.
2.42 "QUALIFIED DOMESTIC RELATIONS ORDER" ("QDRO") has the meaning set
forth in Code Section 414(p) (and regulations issued thereunder).
2.43 "REA" means the Retirement Equity Act of 1984 (and regulations
issued thereunder).
2.44 "ROLLOVER ACCOUNT" means that portion of an Account attributable to
a Participant's rollover contributions and to the direct transfer of benefits
to this Plan from another qualified plan on an Employee's behalf in
accordance with the provisions of Article 4.11.
2.45 "SALARY DEFERRAL ACCOUNT" means that portion of an Account
attributable to salary deferral contributions.
2.46 "SERVICE" has the meaning set forth in Article 10.
2.47 "SPONSORING EMPLOYER" means Clovis Community Bank and such of its
successors or assigns as may expressly adopt this Plan and Trust Agreement
and agree in writing to continue this Plan and Trust.
2.48 "SPOUSAL CONSENT" means the revocable written consent of the
Participant's spouse to an action taken by the Participant hereunder which
requires such consent under the terms of the Plan; provided that:
(i) Such consent shall acknowledge the Beneficiary designated
by the Participant and the effect of such consent;
(ii) Any change in the designated Beneficiary, other than to
make the spouse the Beneficiary of 100% of the Participant's vested Account,
shall require a new spousal consent;
(iii) Such consent shall be effective only with respect to
that spouse;
(iv) Such consent shall be witnessed by a Plan representative
or a notary public; and
2-8
(v) Such written consent shall not be required if it is
established to the satisfaction of a Plan representative that such consent
cannot be obtained because (1) there is no spouse, or (2) the spouse cannot
be located, or (3) such other circumstances exist as may be prescribed by
applicable regulations.
2.49 "TEFRA" means the Tax Equity and Fiscal Responsibility Act of 1982
(and regulations issued thereunder).
2.50 "TESTING COMPENSATION" for purposes of determining (1) whether an
Employee is a Key Employee, (2) whether an Employee is a Highly Compensated
Employee, and (3) each Participant's Contribution Percentage and Deferral
Percentage pursuant to Article 4.1(c) and Article 4.1(d), respectively, means
Allowable Compensation, except that:
(a) Amounts contributed by the Employer pursuant to a salary
reduction agreement which are not includible in the Employee's income under
Code Section 125, 402(e)(3), 402(h) or 403(b) shall be included.
(b) Amounts attributable to periods during which an individual was
not eligible to be a Participant shall be excluded for purposes of
determining his Contribution Percentage and Deferral Percentage under Article
4.1(c) and Article 4.1(d), respectively.
Testing Compensation shall not exceed the OBRA `93 limit of
$150,000, multiplied by the Adjustment Factor.
2.51 "TOP-HEAVY PLAN" means the Plan during each Fiscal Year in which
the aggregate value of the Accounts of Key Employees exceeds 60% of the
aggregate value of all Accounts under the Plan as of the Determination Date
for such Fiscal Year. For purposes of determining the value of Employees'
Accounts in the Plan, the following shall be excluded: (1) rollover
contributions from a non-related employer made after December 31, 1983; (2)
the Accounts of Participants who have not performed any services for the
Employer within the five-year period ending on the Determination Date; and
(3) the Account of any individual who was a Key Employee with respect to the
Plan for any prior Fiscal Year but is not a Key Employee with respect to the
Plan for the applicable Fiscal Year. For purposes of determining the
aggregate value of Accounts and/or accrued benefits under this section,
distributions made within a 5-year period ending on the Determination Date
shall be included to the extent required by applicable law and regulation.
2-9
(a) REQUIRED AGGREGATION TO DETERMINE TOP-HEAVINESS
If a Key Employee is a Participant in this Plan for any Fiscal
Year and the Employer maintains or has maintained any other plans (including
terminated plans) (1) in which a Key Employee is or was a participant within
the 5 year period ending on the Determination Date, or (2) which must be
combined with this Plan in order to meet the requirements of Code Sections
401(a)(4) or 410(b) for any Fiscal Year, then this Plan's top-heaviness shall
be determined for such Fiscal Year by aggregating the Accounts and/or present
value of accrued benefits of participants in this Plan and all other such
plans.
(b) PERMISSIVE AGGREGATION TO DETERMINE TOP-HEAVINESS
If the Employer maintains or has maintained any plans
(including terminated plans) other than one described in (a) above, the
Committee may aggregate the accounts and/or present value of accrued benefits
of participants in any such plan with those of this Plan to determine whether
this Plan is a Top-Heavy Plan for any Fiscal Year, provided that the
requirements of Code Sections 401(a)(4) and 410(b) would continue to be met
by treating this Plan, any plan that must be aggregated with the Plan under
(a) above and any other plan referred to in this sentence as one unit.
In determining top-heaviness and the aggregate value of Accounts
and/or accrued benefits under this section, the Committee shall be guided by
the provisions of the Code, including but not limited to Code Section
416(g)(3)(B) (and regulations issued thereunder).
2.52 "TRA `86" means the Tax Reform Act of 1986 (and regulations issued
thereunder).
2.53 "TRUST" means the legal entity created by this Trust Agreement as
part of the Plan.
2.54 "TRUST AGREEMENT" means this agreement prior to January 1, 1998,
and means the Trust Agreement for MasterPlan of Columbia Trust Company, an
Oregon banking corporation, on and after January 1, 1998.
2.55 "TRUST FUND" means all property and income held by the Trustee
under the Trust Agreement.
2-10
2.56 "TRUSTEE" means Daniel N. Cunningham and Wanda Lee Rogers prior to
January 1, 1998, and means Columbia Trust Company, an Oregon banking
corporation, on and after January 1, 1998 and any duly appointed successor.
2.57 "VALUATION DATE" means the last day of each calendar quarter as of
January 1, 1998 and such other date as may be designated as provided in
Article 7 for the revaluation of Participants' Accounts.
2.58 "LIST OF TERMS DEFINED ELSEWHERE:
ARTICLE
(a) "AFFILIATED EMPLOYER" 9.11
(b) "ANNUAL ADDITION" 5.1
(c) "AVERAGE CONTRIBUTION PERCENTAGE" 4.1
(d) "AVERAGE DEFERRAL PERCENTAGE" 4.1
(e) "CONTRIBUTION PERCENTAGE" 4.1
(f) "DEFERRAL PERCENTAGE" 4.1
(g) "ELIGIBILITY COMPUTATION PERIOD" 3.1
(h) "ELIGIBLE EMPLOYEE" 3.1
(i) "EXCESS CONTRIBUTIONS" 4.1
(j) "EXCESS DEFERRALS" 4.1
(k) "HIGHLY COMPENSATED EMPLOYEE" 4.1
(l) "LIMITATION ACCOUNT" 5.1
(m) "LIMITATION YEAR" 5.1
(n) "NON-HIGHLY COMPENSATED EMPLOYEE" 4.1
(o) "OAI RATE" 5.1
(p) "SUBSCRIPTION AGREEMENT" 17.2
(q) "TOP PAID GROUP" 4.1
(r) "YEAR OF ELIGIBILITY SERVICE" 3.1
2-11
ARTICLE 3
ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION
3.1 DEFINITIONS
(a) "ELIGIBLE EMPLOYEE" means any Employee of a Member Employer
(including any Leased Employee) who is regularly scheduled to work at least
1,000 Hours of Service in an Eligibility Computation Period, except that
"Eligible Employee" shall not include an Employee whose compensation and
conditions of employment are established by the terms of a collective
bargaining agreement to which the Member Employer is a party and which does
not specifically provide for coverage of such Employee under the Plan. In the
event an Employee who is not scheduled to work at least 1,000 Hours of
Service in an Eligibility Computation Period does in fact complete at least
1,000 Hours of Service in an Eligibility Computation Period, such Employee
will become eligible to participate and will enter the Plan on the next Entry
Date.
(b) "ELIGIBILITY COMPUTATION PERIOD" means the 12 consecutive
month period beginning with the Employee's Date of Hire and each anniversary
thereof.
(c) "YEAR OF ELIGIBILITY SERVICE" means an Eligibility Computation
Period in which an Employee is credited with 1,000 Hours of Service.
3.2 PARTICIPATION
(a) CONTINUING PLAN PARTICIPATION
Each individual who was an Eligible Employee and a Participant
in the Plan immediately preceding the Effective Date of this amendment and
restatement shall continue to be a Participant on such Effective Date.
(b) PLAN ENTRY
(i) PROFIT SHARING PORTION OF THE PLAN
Each Eligible Employee shall become a Participant in the
profit sharing portion of the Plan on the Entry Date coinciding with or next
following the last day of the Eligibility Computation Period in which he
completes two (2) Years of Eligibility Service.
(ii) MATCHING PORTION OF THE PLAN
Each Eligible Employee shall become a Participant in the
matching portion of the Plan on the Entry Date coinciding with or next
following the last day of the Eligibility Computation Period in which he
completes one (1) Year of Eligibility Service.
3-1
(iii) SALARY DEFERRAL PORTION OF THE PLAN
Each Eligible Employee shall become a Participant in the
salary deferral portion of the Plan on the Entry Date coinciding with or next
following his completion of 6 months of service.
(c) BREAK IN SERVICE FOR PARTICIPATION
If an Employee has a Break in Service before
satisfying the eligibility requirements of this Article 3.2, Service before
such Break in Service will not be taken into account, except as provided in
Article 3.5.
3.3 BENEFICIARY DESIGNATION
(a) DESIGNATION PROCEDURE
Each Eligible Employee, upon becoming a Participant, shall
designate a Beneficiary or Beneficiaries to receive benefits under the Plan
after his death. A Participant may change his Beneficiary designation at any
time. Each Beneficiary designation shall be in a form prescribed by the
Committee and will be effective only when filed with the Committee during the
Participant's lifetime. Each Beneficiary designation filed with the Committee
will cancel all previously filed Beneficiary designations.
(b) SPOUSAL CONSENT
In the event that a married Participant wishes to designate a
Beneficiary other than his spouse for any portion of his vested Account, such
designation shall include Spousal Consent.
(c) LACK OF DESIGNATION
In the absence of a valid designation by an unmarried
Participant or if no designated Beneficiary survives an unmarried
Participant, his interest shall be distributed to his estate. In the absence
of a valid designation by a married Participant or if no designated
Beneficiary survives a married Participant, his interest shall be distributed
to his surviving spouse, or if there is no surviving spouse, then to his
estate.
3.4 CHANGE FROM INELIGIBLE TO ELIGIBLE EMPLOYEE
An Employee who is excluded under Article 3.1 for any period shall
be eligible to participate on the first date he is no longer excluded,
provided that the requirements of Article 3.2 have been satisfied, but not
earlier than the Entry Date on which he would have entered the Plan had he
not been excluded under Article 3.1.
3-2
3.5 FORMER EMPLOYEE REHIRED
Notwithstanding the provisions of Article 3.2(c), a former Employee
who had completed the eligibility requirements of Article 3.2 with the
Employer for a portion of the Plan and who is reemployed by the Employer
shall become a Participant in that portion of the Plan as of the date of
reemployment as an Eligible Employee, but not earlier than the Entry Date on
which he would have entered that portion of the Plan had his employment not
terminated. The Employee's prior Service shall be credited. If a former
Employee terminated before completing the eligibility requirements of Article
3.2 with the Employer for any portion of the Plan and such individual is
rehired, he shall be treated as a new Employee.
3.6 COMMITTEE DETERMINES ELIGIBILITY
Compliance with the eligibility requirements shall be determined by
the Committee, which shall also inform each Employee of his becoming a
Participant. The Committee shall provide each Participant with a summary plan
description not later than 90 days following the date he enters the Plan or
within such other period as may be prescribed by applicable law or regulation.
3-3
ARTICLE 4
CONTRIBUTIONS
4.1 DEFINITIONS
(a) "AVERAGE CONTRIBUTION PERCENTAGE" ("ACP") means the average of
the Contribution Percentages of a group of Eligible Participants.
(b) "AVERAGE DEFERRAL PERCENTAGE" ("ADP") means the average of the
Deferral Percentages of a group of Eligible Participants.
(c) "CONTRIBUTION PERCENTAGE" means the ratio (expressed as a
percentage) of (i) the matching contributions allocated to a Participant's
Accounts for such Fiscal Year, to (ii) his Testing Compensation for such
Fiscal Year. The determination and treatment of the Contribution Percentage
of any Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury. The Contribution Percentage may be adjusted
as provided in Article 4.7.
(d) "DEFERRAL PERCENTAGE" means the ratio (expressed as a
percentage) of (i) the contributions made under the Plan to a Participant's
Salary Deferral and Non-Elective Accounts for such Fiscal Year, including
Excess Deferrals, to (ii) such Participant's Testing Compensation for such
Fiscal Year. The Deferral Percentage may be adjusted as provided in Article
4.6. The determination and treatment of the Deferral Percentage of any
Participant shall also satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(e) "EXCESS CONTRIBUTIONS" mean salary deferral contributions that
exceed those permitted by the non-discrimination tests in Article 4.6.
(f) "EXCESS DEFERRALS" mean salary deferral contributions for a
calendar year that exceed the dollar limit provided under Article 4.5(a). If
salary deferral contributions are made on behalf of a Participant under two
or more plans during a calendar year and the sum of these amounts exceed the
dollar limit in Article 4.5(a), then the Committee shall establish a claims
procedure so that the Participant can designate the amounts and the plans
from which such Excess Deferrals shall be returned. The Participant's claim
shall be in writing; shall be submitted to the Plan Administrator not later
than the following April 15th; shall specify the amount of the Participant's
Excess Deferrals for the preceding calendar year; and shall be accompanied by
the Participant's written statement that if such Excess Deferrals are not
distributed, the amounts deferred under this Plan and other plans or
arrangements described in Code Sections 401(k), 408(k), or 403(b), will
exceed the limit imposed on the Participant by Code Section 402(g) for the
year in which the deferral occurred.
4-1
(g) "HIGHLY COMPENSATED EMPLOYEE" ("HCE") for a Fiscal Year
includes:
(i) A 5% Owner in the current or the preceding Fiscal Year;
(ii) An Employee whose Testing Compensation exceeds $80,000
(multiplied by the Adjustment Factor) in the preceding Fiscal Year;
(A) If the Sponsoring Employer so elects, an Employee may
be an HCE under this subsection (ii) if his Testing Compensation exceeds the
dollar limit (stated above) in the preceding Fiscal Year and the Employee is
a member of the Top Paid Group in such preceding Fiscal Year. For Fiscal
Years beginning January 1, 1997, the Sponsoring Employer elects not to make
the Top Paid Group election. This election may be changed without prior
approval from the Internal Revenue Service by way of a Plan amendment
executed by the Sponsoring Employer.
(h) "TOP PAID GROUP" for a Fiscal Year is equal to 20% of the total
number of Employees of the Employer for the preceding Fiscal Year. In
determining the total number of Employees for such year, the following
Employees may be excluded:
(1) Those who have not completed six months of service at
the end of such year;
(2) Those who normally work less than 17 1/2 hours per
week;
(3) Those who normally work less than six months per
year;
(4) Those who have not reached their 21st birthday;
(5) Non-resident aliens; and
(6) Collectively bargained Employees, provided that this
exclusion may be used only if at least 90% of the Employees of the Employer
are covered by bona fide collective bargaining agreements.
The Top Paid Group will be determined by listing all of the
Employees of the Employer (including those excluded above) in descending
order by Testing Compensation and selecting the 20% of the total number of
Employees as determined above who are the highest paid. An Employee may be in
the Top Paid Group even though he falls in one of the groups which have been
excluded in determining the number of Employees. The resolution of any
ambiguity relating to the determination of HCE(s) shall be based on IRS
regulation 1.414(q).
(i) "NON-HIGHLY COMPENSATED EMPLOYEE" ("NON-HCE") means an
Employee who is not a Highly Compensated Employee.
4-2
4.2 MEMBER EMPLOYER CONTRIBUTIONS
(a) MEMBER EMPLOYER PROFIT SHARING CONTRIBUTIONS
As of the last day of each Fiscal Year, a Member Employer may
make a profit sharing contribution to the Trust in such amount as is
determined by such Member Employer. The profit sharing contribution shall be
reduced, if necessary, by any amounts in Limitation Accounts under Article 5
attributable to profit sharing contributions. These contributions will be
allocated to Participants' Profit Sharing Accounts as provided in Article 5.2.
(b) NON-ELECTIVE CONTRIBUTIONS
The Member Employer may make non-elective contributions in
accordance with Article 4.6(c), which shall be allocated to Participants'
Non-Elective Accounts.
(c) MEMBER EMPLOYER MATCHING CONTRIBUTIONS
As of the last day of each Fiscal Year, the Member Employer
may make a matching contribution to the Trust which, when combined with
amounts in Limitation Accounts under Article 5, shall be sufficient, in
total, to provide an allocation equal to a certain percentage or dollar
amount of the salary deferral contributions made for each Eligible
Participant which do not exceed to a certain percentage or dollar amount of
his Plan Compensation for the Fiscal Year. These contributions will be
allocated to Participants' Matching Accounts in accordance with this Article.
The amount of the matching contribution and the maximum matching percentage
or dollar amount shall be determined annually by each Member Employer and
announced before the beginning of the applicable Fiscal Year.
(d) RESTORATION CONTRIBUTIONS
The Member Employer shall make the contributions required to
restore the Accounts of Participants as described in Article 5.4 and Article
6.4. These contributions will be allocated in accordance with their purpose.
(e) TOP-HEAVY MINIMUM CONTRIBUTIONS
For any Fiscal Year during which the Plan is a Top-Heavy Plan,
the sum of the Member Employer's profit sharing and non-elective
contributions on behalf of each Participant who is a Non-Key Employee but is
employed by such Member Employer on the last day of the Fiscal Year shall not
be less than the lesser of:
(i) 3% of the Allowable Compensation paid or accrued to such
Employee during the Fiscal Year; or
(ii) The highest percentage of Allowable Compensation which is
allocated during the Fiscal Year on behalf of any Key Employee in the
aggregate:
4-3
(1) To his Employer Account under Article 5.2 of this Plan;
and
(2) To his Salary Deferral Account under this Plan; and
(3) From contributions by the Member Employer to his account
in any other defined contribution plan.
To the extent that these minimum allocations are not
provided by other provisions of this Plan, the Member Employer shall make a
minimum contribution in an amount which is determined to meet the
requirements of this Article 4.2(e), which shall be allocated to the Accounts
of Participants who are Non-Key Employees to carry out the purpose of this
article.
4.3 TIMING OF, LIMITATIONS ON AND RETURN OF MEMBER EMPLOYER CONTRIBUTIONS
(a) AMOUNT AND TIMING OF CONTRIBUTIONS
Member Employer contributions shall not exceed an amount which
is estimated to constitute the maximum allowable deduction under Code Section
404(a). Each Member Employer's contributions shall be paid to the Trustee on
or prior to the last day for filing that Member Employer's federal income tax
return for such year, including any extensions of time granted for such
filing. Contributions shall be made in cash, by check and/or by electronic
wire transfer.
(b) RETURN OF MEMBER EMPLOYER CONTRIBUTIONS
If an amount is contributed by the Member Employer due to a
mistake of fact, such Member Employer shall be entitled to recover such
amount within one year of the date such contribution is made. Unless
otherwise provided in a resolution of the Board of Directors of the Member
Employer, any amounts contributed by the Member Employer which are disallowed
as a deduction under Code Section 404 shall be returned to such Member
Employer within one year of the date such deduction is disallowed. Trust
income attributable to the amount to be recovered shall not be paid to the
Member Employer, but Trust loss attributable thereto shall reduce such amount.
4.4 PARTICIPANTS' VOLUNTARY CONTRIBUTIONS NOT PERMITTED
The Plan shall accept no voluntary contributions.
4-4
4.5 SALARY DEFERRAL CONTRIBUTIONS
(a) GENERAL RULES
Each Participant may elect in writing to have the Member
Employer make salary deferral contributions on his behalf in an amount from
1% to 10% of such Participant's Plan Compensation. Subject to the Committee's
approval, each Participant may elect to have the Member Employer make an
additional salary deferral contribution on his behalf during the Fiscal Year
in a discretionary amount specified each year. Notwithstanding the foregoing,
effective January 1, 1987, no more than $7,000, multiplied by the Adjustment
Factor, of salary deferral contributions may be made on behalf of any
Participant during any calendar year.
(b) ADMINISTRATIVE GUIDELINES
The Committee has the power to establish uniform and
nondiscriminatory rules and from time to time to modify or change such rules
governing the manner and method by which salary deferral contributions shall
be made, as well as the manner and method by which salary deferral
contributions may be changed or discontinued temporarily or permanently. All
salary deferral contributions shall be authorized by the Participant in
writing, made by payroll deduction, deducted from the Participant's Plan
Compensation without reduction for any taxes or withholding (except to the
extent required by law or the regulations) and paid over to the Trust by the
Member Employer within a reasonable period following the date of deduction,
but in no event later than 90 days after the 15th day of the month following
the date on which such salary would otherwise have been paid. Effective
February 1, 1997, the phrase "90 days after" shall be replaced with the
phrase "the 15th day of the month following" in the preceding sentence. All
salary deferral contributions shall be credited to such Participant's Salary
Deferral Account and shall be treated as Member Employer profit sharing
contributions for purposes of their deductibility and tax treatment under the
Code.
4.6 NONDISCRIMINATION TESTS FOR ELECTIVE DEFERRALS
(a) GENERAL RULE
The Deferral Percentages for any Fiscal Year shall satisfy the
table below:
4-5
IF ADP OF ELIGIBLE PARTICIPANTS THEN, ADP OF ELIGIBLE PARTICIPANTS
WHO ARE NON-HCE(S) IS: WHO ARE HCE(S) CANNOT EXCEED:
------------------------------------ --------------------------------------
(1) (2)
Less than 2% Two times column (1) ADP
2% but less than 8% Column (1) ADP plus 2%
8% or greater 1.25 times column (1) ADP
provided that:
(i) Amounts allocated to a Participant's Non-Elective Account
for a Fiscal Year may be included in computing his Deferral Percentage.
(ii) Amounts added to a Participant's Employer Matching
Account which meets the requirements of Code Section 401(k)(2)(B) and (C) may
be included in computing his Deferral Percentage.
(iii) The Deferral Percentage for any Employee who is a
Participant under two or more Code Section 401(k) arrangements of the
Employer shall be the sum of the Deferral Percentages for such Employee under
each of such arrangements.
(iv) In the event that one or more other plans are aggregated
with this Plan to satisfy Code Sections 401(a)(4) and 410(b), this Article
4.6(a) shall be applied by determining the Deferral Percentages of Eligible
Participants as if all such plans were a single plan. All such plans must
have the same plan year.
(b) ELECTION OF CURRENT YEAR TESTING OR PRIOR YEAR TESTING
Notwithstanding the foregoing, the Sponsoring Employer may
elect the "prior year testing method" by using the Non-Highly Compensated
Employees' Average Deferral Percentage for the preceding Fiscal Year in
determining the allowable Highly Compensated Employees' Average Deferral
Percentage for the current Fiscal Year. For Fiscal Years beginning January 1,
1997 and January 1, 1998, the Sponsoring Employer elects to use the current
year testing method. For Fiscal Years beginning January 1, 1999, the
Sponsoring Employer elects to use the prior year testing method. This
election may be changed without prior approval from the Internal Revenue
Service by way of a Plan amendment executed by the Sponsoring Employer. If
the current year testing method is made, the election cannot be revoked after
1999 unless it has been used for each of the five Fiscal Years preceding the
Fiscal Year of the revocation.
4-6
(c) CORRECTIVE ACTIONS
(i) the salary deferral contributions for any Fiscal Year
would otherwise cause the Plan to fail to meet the nondiscrimination tests of
this Article 4.6 then the Committee may, at its discretion within the period
permitted by applicable law or regulation, take one or more of the following
actions, but only as necessary:
(1) Reduce salary deferral contributions made on behalf
of Participants who are HCE(s) for the remainder of the Fiscal Year; or
(2) Return Excess Contributions to the affected
Participants in accordance with Article 4.6(e).
(ii) The Member Employer may make a non-elective contribution
for any Fiscal Year. Such contribution shall be allocated to the Non-Elective
Accounts of a group of Eligible Participants who are Non-HCE's and who are
selected on a basis that is not prohibited by law or by regulation. Each
Participant who is entitled to share in such contribution for a Fiscal Year
shall receive the same dollar allocation or receive an allocation in the same
ratio to such contribution as his Testing Compensation bears to the Testing
Compensation of all those eligible for such an allocation.
(d) DETERMINATION OF EXCESS CONTRIBUTIONS
(i) The maximum Deferral Percentage for a Participant who is
a HCE is calculated by reducing the Deferral Percentage of the HCE with the
highest Deferral Percentage to the extent required to (1) enable the Plan to
satisfy the non-discrimination test in Article 4.6(a), or (2) cause such
HCE's Deferral Percentage to equal the Deferral Percentage of the HCE with
the next highest Deferral Percentage. This process will be repeated as
necessary until the Plan satisfies the nondiscrimination test in Article
4.6(a).
(ii) The process for determining a HCE's Excess Contribution
requires that an "excess amount" first be calculated for each HCE, which is
equal to the difference between (1) the amount of contribution actually made
under the Plan to his Salary Deferral Account for the Fiscal Year, and (2)
the amount determined by multiplying the maximum Deferral Percentage
calculated in (i) by such HCE's Testing Compensation. The "excess amounts"
are then added together to arrive at an "aggregate excess amount." The
maximum salary deferral contribution for a HCE is then calculated by reducing
the salary deferral contribution of the HCE with the highest salary deferral
contribution (measured in actual dollars) to the extent required to (1)
reduce the "aggregate excess amount" to zero, or (2) cause such HCE's salary
deferral contribution to equal the salary deferral contribution of the HCE
with the
4-7
next highest salary deferral contribution (measured in actual dollars). This
process will be repeated as necessary until the "aggregate excess amount" is
eliminated entirely.
(iii) A HCE's Excess Contribution is equal to the difference
between (1) the amount of contribution actually made under the Plan to his
Salary Deferral Account for such Fiscal Year, and (2) the maximum salary
deferral contribution (measured in actual dollars) as determined in (ii)
above.
(e) CORRECTIVE PAYMENTS
(i) PAYMENT OF EXCESS DEFERRALS
Notwithstanding any other provision of the Plan, Excess
Deferrals plus any income or less any loss allocable thereto, as determined
under Article 4.8, may be paid to Participants who have such Excess Deferrals
for a calendar year no later than the following April l5th. If not paid by
such date, these amounts must remain in the Participant's Account until
otherwise withdrawable or payable under the terms of the Plan. Because of the
double income tax treatment that a Participant will encounter if these
amounts are not returned to him by the following April 15th, the Committee
shall make every effort to meet this deadline.
(ii) PAYMENT OF EXCESS CONTRIBUTIONS
Notwithstanding any other provision of the Plan, Excess
Contributions, plus any income or less any loss allocable thereto, as
determined in Article 4.8, shall be paid in accordance with the following
procedures:
(1) Excess Contributions for a Fiscal Year shall be paid
to Participants on whose behalf such Excess Contributions were made, no later
than the last day of the succeeding Fiscal Year.
(2) The Excess Contributions which would otherwise be
paid shall be reduced, in accordance with regulations, by any Excess
Deferrals paid to the Participant.
(3) Payments under this Article 4.6(e) shall be made from
the Participant's Salary Deferral Account.
(iii) SPOUSAL CONSENT NOT REQUIRED
Payment of Excess Deferrals and/or Excess
Contributions will not require the consent of the Participant or the
Participant's spouse and will not violate any outstanding Qualified Domestic
Relations Orders.
(iv) PAYMENTS NOT CONSIDERED WITHDRAWALS
Payment of Excess Deferrals and/or Excess Contributions
are not subject to the hardship withdrawal provisions of Article 9.10.
4-8
4.7 NONDISCRIMINATION TESTS FOR MEMBER EMPLOYER MATCHING CONTRIBUTIONS
(a) GENERAL RULE
Member Employer matching contributions for any Fiscal Year shall
satisfy the table below:
If ACP of Eligible Then, ACP of Eligible
Participants Who Are Participants Who Are HCE(s)
NON-HCE(s) is: Cannot Exceed:
-------------------- ---------------------------
(1) (2)
Less than 2% Two times column (1) ACP
2% but less than 8% Column (1) ACP plus 2%
8% or greater 1.25 times column (1) ACP
provided that:
(i) Any amounts allocated to a Participant's Non-Elective Account
for a Fiscal Year and not used to meet the tests in Article 4.6 may be included
in his Contribution Percentage.
(ii) Any matching contributions which have been used to meet the
tests in Article 4.6 must be subtracted from the matching contributions used to
determine a Participant's Contribution Percentage.
(iii) Amounts allocated to a Participant's Salary Deferral
Account for a Fiscal Year which are not needed to meet the tests in Article 4.6
may be included in a Participant's Contribution Percentage.
(iv) The Contribution Percentage for any Employee who is a
Participant under two or more Code Section 401(m) arrangements of the Employer
shall be the sum of the Contribution Percentages for such Employee under such
arrangements.
(v) In the event that one or more other plans are aggregated with
this Plan to satisfy the requirements of Code Sections 401(a)(4) and 410(b),
this Article 4.7 shall be applied by determining the Contribution Percentages of
Eligible Participants as if all such plans were a single plan. All such plans
must have the same plan year.
(b) ELECTION OF CURRENT YEAR TESTING OR PRIOR YEAR TESTING
Notwithstanding the foregoing, the Sponsoring Employer may elect
the "prior year testing method" by using the Non-Highly Compensated Employees'
Average Contribution Percentage for the preceding Fiscal Year in determining the
allowable Highly
4-9
Compensated Employees' Average Contribution Percentage for the current Fiscal
Year. For Fiscal Years beginning January 1, 1997 and January 1, 1998, the
Sponsoring Employer elects to use the current year testing method. For Fiscal
Years beginning January 1, 1999, the Sponsoring Employer elects to use the prior
year testing method. This election may be changed without prior approval from
the Internal Revenue Service by way of a Plan amendment executed by the
Sponsoring Employer. Once the current year testing method is made, the election
cannot be revoked after 1999 unless it has been used for each of the five Fiscal
Years preceding the Fiscal Year of the revocation.
(c) MULTIPLE USE OF ALTERNATIVE LIMITATION
If the provisions of Article 4.6 and Article 4.7 apply to one or
more HCE(s) and if both the ADP and the ACP of HCE(s) exceed the corresponding
ADP and ACP of Non-HCE(s) multiplied by 1.25, then an additional
non-discrimination test must be met, as follows:
(i) The sum of the ADP and ACP of Eligible Participants who are
HCE(s) shall not exceed the sum of A & B; where A = 1.25 times the greater of
the ADP or the ACP of Eligible Participants who are Non-HCE(s), and B = two
times the smaller of ADP or ACP of Eligible Participants who are Non-HCE(s).
(ii) The ACP(s) and ADP(s) used in this Article 4.7(c) shall be
determined after any corrective distributions have been made of Excess
Deferrals, Excess Contributions, and excess matching contributions.
(iii) Notwithstanding the provisions of (i) above, the words
"greater" and "smaller" in (i) above may be transposed.
(d) CORRECTIVE ACTIONS
(i) If the matching contributions for any Fiscal Year would
otherwise cause the Plan to fail to meet the nondiscrimination tests of this
Article 4.7, the Committee may at its discretion within the period permitted by
applicable law or regulation, take one or more of the following actions, but
only as necessary:
(1) Reduce the salary deferral contributions that would
otherwise be permitted for HCEs for the remainder of the Fiscal Year and the
matching contributions that would have been made based on such salary deferral
contributions.
(2) Pay any fully vested matching contributions to the
affected HCE(s), as provided in Article 4.7(f).
(ii) If salary deferral contributions for any year would
otherwise cause the Plan to fail to meet the multiple use of alternative
limitation provisions of (c) above,
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procedures similar to those detailed in Article 4.6(c), (d) and (e) shall be
used to bring the Plan into compliance with such provisions. Any salary deferral
contributions which must be returned to Participants pursuant to this Article
4.7(d) shall be considered Excess Contributions for purposes of this Plan.
(e) DETERMINATION OF THE AMOUNT OF EXCESS MATCHING CONTRIBUTIONS
(i) The maximum Contribution Percentage for a Participant who is
a HCE is calculated by reducing the Contribution Percentage of the HCE with the
highest Contribution Percentage to the extent required to (1) enable the Plan to
satisfy the non-discrimination tests in Article 4.7(a) and Article 4.7(c), or
(2) cause such HCE's Contribution Percentage to equal the Contribution
Percentage of the HCE with the next highest Contribution Percentage. This
process will be repeated, as necessary, until the Plan satisfies the
non-discrimination tests in Articles 4.7(a) and Article 4.7(c).
(ii) The process for determining a HCE's excess matching
contribution requires that an "excess matching amount" first be calculated for
each HCE, which is equal to the difference between (1) the amount of matching
contribution actually made to his Matching Account under the Plan for the Fiscal
Year, and (2) the amount determined by multiplying the maximum Contribution
Percentage calculated in (i) above by such HCE's Testing Compensation. The
"excess matching amounts" are then added together to arrive at an "aggregate
excess matching amount". The maximum matching contribution for a HCE is then
calculated by reducing the matching contributions of the HCE with the highest
matching contribution (measured in actual dollars) to the extent required to (1)
reduce the "aggregate excess matching amount" to zero, or (2) cause such HCE's
matching contributions to equal the matching contributions of the HCE with the
next highest matching contributions (measured in actual dollars). This process
will be repeated as necessary until the "aggregate excess matching amount" is
eliminated entirely.
(iii) A HCE's excess matching contribution is equal to the
difference between (1) the amount of matching contribution actually made to his
Matching Account under the Plan for such Fiscal Year and (2) the maximum
matching contribution (measured in actual dollars) as determined in (ii) above.
(f) CORRECTIVE PAYMENTS
Notwithstanding any other provisions of the Plan, excess matching
contributions, plus any income and less any loss allocable thereto, as
determined under Article 4.8, shall be paid or forfeited in a nondiscriminatory
manner and in accordance with the following procedures:
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(i) PAYMENT OF EXCESS MATCHING CONTRIBUTIONS
Excess matching contributions shall be paid, if appropriate,
to Participants for whom such contributions have been made during a Fiscal Year,
no later than the last day of the succeeding Fiscal Year.
(ii) SPOUSAL CONSENT NOT REQUIRED
Payment of excess matching contributions will not require
the consent of the Participant's spouse and will not violate outstanding
qualified domestic relations orders.
(iii) PAYMENTS NOT CONSIDERED WITHDRAWALS
Payment of excess matching contributions are not subject to
the hardship withdrawal provisions of Article 9.10.
4.8 ADJUSTMENT TO CORRECTIVE PAYMENTS
Excess Deferrals, Excess Contributions, and excess matching
contributions shall all be paid to the appropriate Participants, together with
an investment adjustment. Such adjustment shall be computed by the Committee
based on the procedures described in Article 7 to establish a proportionate
crediting of Trust income or loss between the excess amounts and the amounts
which are not to be returned for the Fiscal Year in which such excess occurred.
4.9 OVERRIDING LIMITATIONS
(a) CORRECTIVE ACTIONS
When salary deferral contributions made on behalf of Participants
who are HCE(s) are reduced for the remainder of a Fiscal Year, no matching
contributions shall be made with respect to the salary deferral contributions
not permitted because of such reduction.
(b) EXCESS DEFERRALS
When Excess Deferrals are paid to a Participant, any matching
contributions that are attributable to such Excess Deferrals shall be forfeited
and shall be used to reduce the Member Employer matching contribution for the
Fiscal Year.
(c) EXCESS CONTRIBUTIONS
When Excess Contributions are paid to a Participant, any matching
contributions that are attributable to such Excess Contributions shall be
forfeited and shall be used to reduce the Member Employer matching contribution
for the Fiscal Year.
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4.10 RECORD REQUIREMENTS
The Member Employer shall maintain such records as may be needed to
prove that for each Fiscal Year, the requirements of Article 4.6 and Article 4.7
are met.
4.11 ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS
(a) ROLLOVER CONTRIBUTIONS PERMITTED
The Committee may authorize the Trustee to accept a rollover
contribution from an Employee who is a Participant, in accordance with and
subject to the limitations of applicable sections of the Code.
(b) GENERAL RULES
A rollover contribution shall be made within 60 days of the
Participant's receipt of the distribution and shall be made only if the trust
from which such funds are distributed is a qualified trust under Code Section
501(a). A rollover contribution shall not include any amounts contributed by the
Employee, except to the extent permitted by the Code and applicable regulations.
An Employee may be required to furnish evidence satisfactory to the Committee
that the amount to be rolled over meets all of the foregoing requirements before
the Committee or Trust will accept any such rollover contribution. The Committee
shall not be required to authorize the Trustee to accept a rollover contribution
if acceptance of such contribution would jeopardize the tax-exempt status of the
Plan or Trust or create adverse tax consequences for a Member Employer.
(c) ROLLOVERS CREDITED TO ROLLOVER ACCOUNT
A rollover contribution may be made in cash and shall be credited
to such Rollover Account as of the date such contribution is received. The
Participant's Rollover Account shall be fully vested and shall share in Trust
gains or losses pursuant to Article 7.
(d) INVESTMENT OF ROLLOVER CONTRIBUTIONS
If a Participant makes a rollover contribution to the Trust in
cash, the Trustee shall invest the contributions as part of the Trust Fund
unless the Committee directs the Trustee to invest such contributions as
directed by the Participant pursuant to Article 13.7.
(e) DIRECT TRANSFER FROM ANOTHER QUALIFIED TRUST
The Committee may instruct the Trustee to accept on behalf of any
Participant, the direct transfer of amounts from any other trust qualified under
Code Section 501(a), which is part of any plan qualified under Code Section
401(a). After receipt, the Trustee shall treat such amounts as a rollover
contribution otherwise meeting the requirements of this Article 4.11.
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(i) DEFINITIONS
For purposes of this section, the term "qualified plan" shall
mean any tax-qualified plan under Code Section 401(a). For purposes of this
section, the term "direct transfer of amounts from any other trust qualified
under Code Section 501(a)" shall mean:
(1) Amounts transferred to this Plan directly from another plan
qualified under Code Section 401(a);
(2) Distributions from another qualified plan which are eligible
rollover distributions and which are transferred pursuant to a direct rollover;
(3) 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 1) were previously distributed to the Employee
by another qualified plan as a lump-sum distribution, 2) were eligible for
tax-free rollover to a qualified plan, and 3) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof and
other than earnings on said assets; and
(4) Amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause c) above, and transferred
by the Employee to this Plan within sixty (60) days of his receipt thereof from
such conduit individual retirement account.
(ii) CERTAIN TRANSFERS NOT PERMITTED
In no event may the Committee authorize a direct transfer from a)
a defined benefit pension plan, b) a defined contribution plan subject to the
minimum funding standards of Code Section 412, or c) any other defined
contribution plan to which the requirements of Code Section 401(a)(11)(A) apply
with respect to such Participant, unless such a direct transfer may be made
under applicable law and regulation without jeopardizing this Plan's tax-exempt
status under Code Section 401(a)(11)(B).
(iii) TRANSFERRED AMOUNTS TREATED AS SALARY DEFERRAL ACCOUNTS FOR
CERTAIN PLAN PURPOSES
Amounts treated as elective contributions (as defined under
Regulation Section 1.401(k)-1(g)(3)) which are transferred from another
qualified plan in a direct transfer shall be treated as amounts in the
Participant's Salary Deferral Account for purposes of Article 9.11.
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(f) WITHDRAWALS FROM ROLLOVER ACCOUNTS
Withdrawals from Rollover Accounts shall be permitted as provided
in Article 9.10.
(g) NON-QUALIFYING ROLLOVERS AND/OR NON-QUALIFYING DIRECT TRANSFERS
If it is later determined that a payment made pursuant to (a)
and/or (e) above did not, in fact, qualify as a rollover or direct transfer
under applicable Code sections and regulations or whose assets are later deemed
non-qualified or "tainted," then such balance credited to the Rollover Account
shall immediately be (i) segregated from all Plan assets, (ii) treated as a
non-qualified trust established by and for the benefit of the Participant, and
(iii) distributed to the Participant. A non-qualifying rollover or direct
rollover or direct transfer shall be deemed never to have been part of the
Trust.
4.12 QUALIFIED MILITARY SERVICE CONTRIBUTIONS
Notwithstanding any provisions of this Plan to the contrary, effective
as of December 12, 1994, contributions with respect to qualified military
service will be provided in accordance with Code Section 414(u), as added by the
Small Business Job Protection Act of 1996.
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ARTICLE 5
ALLOCATION OF CONTRIBUTIONS
5.1 DEFINITIONS
(a) "ANNUAL ADDITION" means the sum for the Limitation Year to which
the allocation pertains (whether or not allocated in such year) of all Employer
and Employee contributions allocated to the Participant's Account in this Plan
for such Limitation Year and any other similar contributions to any other
defined contribution plan maintained by the Employer, including Excess
Contributions, excess matching contributions (regardless of when corrected or
returned) and Excess Deferrals if not returned or otherwise corrected by the
April 15 following the calendar year in which made.
ANNUAL ADDITION also includes amounts allocated to a Participant's:
(i) Individual medical account (as defined in Code Section
415(1)) which is part of a defined benefit pension plan maintained by the
Employer, for purposes of the maximum dollar limit under Code Section
415(c)(1)(A) ; and
(ii) Separate account maintained for a Key Employee, to the
extent required by the Code, which is attributable to post-retirement medical or
life insurance benefits under a welfare benefit fund (as defined in Code Section
419A(d)) maintained by the Employer.
(b) "LIMITATION ACCOUNT" means an account expressly set up pursuant to
Article 5.3(b) and maintained to hold excess Annual Addition amounts contributed
in error.
(c) "LIMITATION YEAR" means the Fiscal Year.
(d) "OAI RATE" means the greater of 5.7% or the rate of tax for
Old-Age Insurance under Code Section 3111(a) in effect as of the beginning of
the Fiscal Year.
5.2 ALLOCATION METHODS
(a) SALARY DEFERRAL, NON-ELECTIVE, MATCHING, TOP-HEAVY MINIMUM AND
RESTORATION CONTRIBUTIONS
Salary deferral, non-elective, matching, top-heavy minimum and
restoration contributions are allocated as provided in Article 4.
(b) MEMBER EMPLOYER PROFIT SHARING ALLOCATION
(i) ALLOCATION METHOD
A Member Employer's profit sharing contributions and amounts
in Limitation Accounts attributable to Profit Sharing Accounts for any Fiscal
Year shall be allocated as of the last day of such Fiscal Year to the Profit
Sharing Accounts of all Eligible
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Participants of such Member Employer. A portion will be allocated in proportion
to the Plan Compensation of all Eligible Participants of such Member Employer,
and a portion will be allocated in proportion to the Excess Compensation of all
Eligible Participants of such Member Employer, as follows:
(1) First, the Plan Compensation of all Eligible
Participants of the Member Employer shall be added to the Excess Compensation of
all Eligible Participants of the Member Employer. The total amount to be
allocated shall be divided by such sum to determine the uniform percentage of
pay which may be allocated to the Accounts of all such Eligible Participants
based on their Plan Compensation and to the Accounts of such Eligible
Participants who have Excess Compensation based on their Excess Compensation.
(2) Second, there shall be added to the Account of each
Eligible Participant who has Excess Compensation an amount equal to such
Eligible Participant's Excess Compensation multiplied by the lesser of (A) the
percentage determined in (i) above or (B) the OAI rate.
(3) Third, the balance shall be allocated to the Accounts of
all Eligible Participants in the ratio that each such Eligible Participant's
Plan Compensation bears to the aggregate Plan Compensation of all Eligible
Participants.
(ii) LIMITATION IF EMPLOYER MAINTAINS MORE THAN ONE PLAN
Notwithstanding the foregoing, the provisions of this
Article 5.2(b) may not provide for permitted disparity if the Member Employer
maintains any other plan that provides for permitted disparity and benefits any
of the same Participants.
(iii) ALLOCATIONS TO EMPLOYEES OF MEMBER EMPLOYERS
Notwithstanding the above, the profit sharing contributions
and amounts in Limitation Accounts attributable to Profit Sharing Accounts for
the Fiscal Year of a Member Employer shall be allocated to the Accounts of
Eligible Participants who are Employees of such Member Employer.
(c) OVERRIDING TOP-HEAVY MINIMUM ALLOCATION
Notwithstanding the provisions of Article 5.2(b), for any Fiscal
Year during which the Plan is a Top-Heavy Plan the requirements of Article
4.2(e) shall be met.
5.3 LIMITATIONS ON ANNUAL ALLOCATIONS
(a) LIMITATION AMOUNT
Notwithstanding any other provision of this Plan to the contrary,
the Annual Addition to a Participant's Account for any Limitation Year shall not
exceed the lesser of
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25% of the Employee's Allowable Compensation or $30,000, or such other amount
for the Limitation Year as may be established by regulations under Code Section
415(d).
(b) TREATMENT OF EXCESS ANNUAL ADDITION MADE IN ERROR
In the event that (as a result of a reasonable error in
estimating a Participant's compensation, a reasonable error in determining the
amount of elective deferrals or other limited facts and circumstances which the
Internal Revenue Service finds to be applicable) an amount would otherwise be
allocated which would result in the Annual Addition limitation being exceeded
with respect to any Participant, the excess amount shall be eliminated:
(i) First, by returning to such Participant, to the extent
necessary his salary deferral contributions, if any. A return of salary deferral
contributions shall include investment gains attributable to such contributions
determined as provided in Article 4.8;
(ii) Second, by holding any excess profit sharing amounts in a
Limitation Account and if the limitation is still exceeded with respect to the
Participant, a separate Limitation Account shall be maintained with respect to
the matching portions of any remaining excess . Any amounts in the Limitation
Accounts shall be reallocated among the appropriate Accounts of Eligible
Participants of the Member Employer pursuant to Article 5.2 as of the last day
of each succeeding Fiscal Year until the excess is exhausted, provided that the
Annual Addition limitation with respect to any Participant may not be exceeded
in any Limitation Year. No allocation of contributions may be credited to the
Accounts of Eligible Participants in succeeding years until such excess has been
exhausted.
5.4 RESTORATION PROCEDURES
(a) COMPUTING AMOUNTS
In the event that a Participant's Account was improperly excluded
in any year from an allocation of Member Employer contributions pursuant to
Article 5.2, such Participant's Account shall be restored to its correct status
by the addition of amounts that are determined as follows:
(i) First, an amount will be computed on the same basis as Member
Employer contributions that were allocated to the Accounts of other Eligible
Participants of such Member Employer under Article 5.2 in each year for which
restoration is necessary, and
(ii) Second, Trust Fund income, gain or loss attributable to
amounts that should have been allocated under (i) above will be computed on the
same basis as Trust
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Fund income, gain or loss was allocated to other Participants' Accounts under
Article 7 in each year for which restoration is necessary.
(b) INCOME, GAIN OR LOSS
In the event that a Participant's Account was improperly excluded
in any year from an allocation of Trust Fund income, gain or loss pursuant to
Article 7, such Participant's Account shall be restored to its correct status by
the addition or subtraction of amounts that should have been allocated under
Article 7 in each year for which restoration is necessary.
(c) SOURCE OF AMOUNTS
The Member Employer shall contribute an amount which is necessary
to fully restore each improperly excluded Account. No Member Employer
contributions shall be allocated pursuant to Article 5.2 to the Account of any
Participant until each improperly excluded Account has been fully restored.
5.5 QUALIFIED MILITARY SERVICE ALLOCATIONS
Notwithstanding any provisions of this Plan to the contrary, effective
as of December 12, 1994, allocations of contributions with respect to qualified
military service will be provided in accordance with Code Section 414(u), as
added by the Small Business Job Protection Act of 1996.
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ARTICLE 6
VESTING OF ACCOUNTS
6.1 AUTOMATIC VESTING
The value of a Participant's Account shall be fully vested and
nonforfeitable at all times.
6.2 NO DIVESTMENT
Except as provided under Article 4.3(b) and Article 6.4, a
Participant's vested right shall not be subject to divestment for any reason.
6.3 AMENDMENT TO VESTING
Notwithstanding any other provisions of this Article 6, the vested
percentage of an individual who was a Participant immediately preceding the
effective date of any amendment to the Plan is determined by the provisions of
the Plan existing immediately prior to such amendment if such provisions provide
a greater vested percentage at any relevant time.
6.4 LOST PARTICIPANTS
(a) PARTICIPANT'S ACCOUNT
If all or a portion of a Participant's Account becomes payable
under Article 9 and the Committee, after a reasonable search, cannot locate the
Participant or his Beneficiary (if such Beneficiary is entitled to payment), the
vested Account shall:
(i) Be used to establish an Individual Retirement Account in the
Participant's name; or
(ii) Remain in the Plan for a sufficient period of time so that
the Administrative Committee can conduct a reasonable search for the Participant
(or Beneficiary if the Beneficiary is entitled to payment) using the methods
described in Article 6.4(b). If the Administrative Committee cannot locate the
Participant (or Beneficiary) and has received notice from one of the searching
organizations that the Participant or Beneficiary is unable to be located, the
Participant or Beneficiary shall be deemed to be "lost". The Committee shall
direct that the lost Participant's Account be forfeited and reallocated with the
profit sharing contribution in accordance with Article 5.2(b) as of the last day
of the Fiscal Year in which the Participant or Beneficiary is deemed to be
"lost".
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(b) SEARCH FOR PARTICIPANTS OR BENEFICIARIES
The Committee shall make a reasonable attempt to find such a
Participant or Beneficiary (if the Beneficiary is entitled to payment) by
sending a registered letter, return receipt requested, to the last known address
and by securing any assistance available from the Internal Revenue Service and
the Social Security Administration or a private search firm, if feasible.
(c) RESTORATION
If an Account is forfeited under this Article 6.4, and the
Participant or his Beneficiary subsequently presents a valid claim for benefits
to the Committee, the Committee shall cause the vested Account, equal to the
amount that was forfeited under this Article 6, to be restored in accordance
with the provisions of Article 5.4.
6-2
ARTICLE 7
ALLOCATION OF TRUST INCOME OR LOSS
7.1 DETERMINATION OF NET INCOME
As of each Valuation Date, the Committee shall determine the net
income or loss of the Trust Fund based on a statement from the Trustee of the
receipts and disbursements of the Trust Fund since the immediately preceding
Valuation Date and of the fair market value of the Trust Fund as of the
Valuation Date. If one or more separate investment funds have been established
as provided in Article 13, each investment fund shall be valued separately on
each Valuation Date and the net income or loss of each investment fund shall be
allocated to each Account invested in such investment fund.
7.2 VALUATION
As of each Valuation Date and prior to any allocation of contributions
to be made as of such Valuation Date, the net income or loss of the General
Trust Fund since the immediately preceding Valuation Date, including net
appreciation or depreciation and excluding any expenses paid by the Trust, shall
be allocated to each Account in the ratio that the value, as of the immediately
preceding Valuation Date, of each such Account invested in the General Trust
Fund bears to the value, as of the immediately preceding Valuation Date, of all
Accounts invested in the General Trust Fund. If one or more separate investment
funds have been established, the net income or loss of each fund shall be
allocated to each Account invested in such investment fund in proportion to the
value of each Account invested in such investment fund as of the immediately
preceding Valuation Date. The Committee shall adopt equitable procedures to
establish a proportionate crediting of Trust income or loss to those portions of
Participants' Accounts in the case of contributions, transfers, rollovers or
withdrawals that have occurred in the interim period since the immediately
preceding Valuation Date. Amounts held in Limitation Accounts established
pursuant to Article 5.3 shall not share in Trust Fund income or loss.
7.3 VALUATION DATES
As of January 1,1998, the General Trust Fund, any separate investment
funds and any segregated Accounts shall be valued as of the last day of each
calendar quarter and as of any other date the Committee directs the Trustee to
value the Trust Fund, the separate investment funds and any segregated Accounts,
as provided in Article 7.4. Notwithstanding the preceding
7-1
sentence, any Account or portion of an Account invested on a segregated basis or
in a separate investment fund may be valued as frequently as daily, provided
that the Committee has adopted equitable procedures for valuing such Accounts.
7.4 SPECIAL VALUATION DATES AT COMMITTEE DISCRETION
The Committee may direct the Trustee to determine the fair market
value of the Trust Fund and may make a determination of Trust income or loss as
of any date other than the last day of a Fiscal Year. If the allocation of such
Trust income or loss will produce a significant change in the value of
Participants' Accounts, and if such valuation shall affect a distribution, then
such date shall thereupon be deemed a Valuation Date, and Trust income or loss
shall be allocated to Participants' Accounts in accordance with the provisions
of Article 7.2.
7.5 ACCOUNTS TO BE VALUED
All sub-accounts of all Participants' Accounts shall be valued at each
Valuation Date.
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ARTICLE 8
PARTICIPANTS' ACCOUNTS
8.1 SEPARATE ACCOUNTS
The Committee shall open and maintain a separate Account for each
Participant. Each Participant's Account shall reflect the amounts allocated
thereto and distributed therefrom and such other information as affects the
value of such Account pursuant to this Plan and Trust Agreement. The Committee
may maintain records of Accounts to the nearest whole dollar.
8.2 STATEMENT OF ACCOUNTS
As soon as practical after each Valuation Date, the Committee shall
furnish to each Participant a statement of his Account, determined as of such
Valuation Date. Upon the discovery of any error or miscalculation in an Account,
the Committee shall correct it, to the extent correction is practically
feasible. Statements to Participants are for reporting purposes only, and no
allocation, valuation or statement shall vest any right or title in any part of
the Trust Fund, nor require any segregation of Trust assets, except as is
specifically provided in this Plan and Trust Agreement.
8.3 VALUATION OF ACCOUNT WHEN PAYMENT DUE
(a) ACCOUNTS WHICH ARE NOT SEGREGATED AND NOT VALUED DAILY
(i) When employment is terminating and payment is not deferred:
(1) The amount of the payment shall be based on the value of
the Participant's Account as of the Valuation Date immediately preceding his
distribution date plus any contributions subsequently credited to such Account
and less any distributions subsequently made from the Account.
(ii) When employment is not terminating or if payment has
previously been deferred, the amount of the payment shall be based on the value
of the Participant's Account as of the Valuation Date immediately preceding the
date of request for payment plus any contributions subsequently credited to such
Account and less any distributions subsequently made from the Account.
(iii) When employment has terminated and payment has been
deferred, the amount of the payment shall be based on the value of the
Participant's Account as of the Valuation Date immediately following the date of
request for payment.
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(b) SEGREGATED ACCOUNTS AND SEPARATE INVESTMENT FUND ACCOUNTS VALUED
DAILY
Payment to a Participant shall be based on the value of his
segregated Account at the date of distribution. The value of his segregated
Account shall be the current fair market value, including any income or loss, of
the property constituting such segregated Account. Any payment from a separate
investment fund shall be based on the value of the Participant's Account in such
separate investment fund at the date of distribution, if the separate investment
fund is valued on a daily basis.
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ARTICLE 9
DISTRIBUTIONS AND WITHDRAWALS
9.1 GENERAL
Benefits under the Plan shall be distributed solely from the Trust.
The Member Employers have no liability or responsibility for Plan benefits or
for the Trust. No distribution shall be made or commenced prior to the
Participant's termination of employment, except as required under Article
9.3(d), as permitted under Articles 16.2 and 16.3, and except for withdrawals in
accordance with Article 9.10. Distributions can also be made upon termination of
the Plan subject to the provisions of Article 9.11. All distributions from the
Plan will be made in accordance with Code Section 401(a)(9) and the regulations
thereunder including the transition rules in proposed regulation 1.401(a)(9)-1
and the incidental death benefit requirements of proposed regulation
1.401(a)(9)-2. The provisions of Code Section 401(a)(9) shall override any
distribution option under the Plan which might be inconsistent with such
provisions.
A distribution to a Participant shall be made solely from his Account.
When a distribution is to be made, his Account shall be valued in accordance
with Article 8.3. The amount to be paid to him shall be based on his vested
interest as determined in Article 6.
9.2 ADMINISTRATIVE RULES
(a) AUTHORITY
Distributions shall be made by the Trustee only in accordance
with the directions of the Committee. The Committee has the authority to direct
the distributions in accordance with the terms and conditions of the Plan and
Trust Agreement, but the Committee shall have no power of discretion or consent
with regard to a Participant's or Beneficiary's choice of the form or timing of
a distribution, except as specifically stated herein or to the extent that the
Committee is constrained by the options available under the Plan or by the
requirements of law or regulation.
(b) CLAIMS
A Participant, Beneficiary or Alternate Payee has the right to
file a claim for benefits as set forth in Article 12.
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9.3 TIMING OF DISTRIBUTIONS
(a) CASHOUT OF AMOUNTS OF $3,500 OR LESS ($5,000 BEGINNING ON OR
AFTER JANUARY 1, 1998)
If the Participant's vested Account does not exceed $3,500
($5,000 beginning on or after January 1, 1998), and at the time of any prior
distribution, if any, has not exceeded $3,500 ($5,000 beginning on or after
January 1, 1998), distribution shall be made in a lump sum as soon as
practicable after the amount can be determined in accordance with Article 8.3.
(b) AMOUNTS OVER $3,500 ($5,000 BEGINNING ON OR AFTER JANUARY 1,
1998)
If the Participant's vested Account does not meet the cashout
requirements of Article 9.3(a), the Participant may elect to:
(i) Commence distributions as soon as administratively feasible
after the amount can be determined, or
(ii) Defer receipt of payments in accordance with (d) below.
Unless otherwise elected by the Participant under (d) below,
the payment of benefits under the Plan to the Participant will begin not
later than the 60th day after the end of the Fiscal Year in which the latest
of the following occurs:
(1) The date on which the Participant attains the earlier of
Age 65 or his Normal Retirement Date,
(2) The date which is the 10th anniversary of his
commencement of participation in the Plan, or
(3) The date of termination of his Service with the
Employer; However, if the amount of the payment cannot be ascertained and/or the
Participant cannot be located by the date required above, payment shall be made
within 60 days after all of these facts are known.
Notwithstanding the foregoing, no payments may be made to a
Participant prior to his Normal Retirement Date or his 62nd birthday,
whichever is later, if his vested Account does not meet the cashout
requirements of Article 9.3(a) unless the written consent of the Participant
is obtained by the Committee within the 90-day period prior to commencement
of the distribution.
(c) INFORMATION AND RIGHTS
The following applies to the Participant's written consent:
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(i) 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 commencement of the distribution.
(ii) Notice of the rights specified herein shall be provided no
less than 30 days and no more than 90 days before the first day on which all
events have occurred which entitle the Participant to such distribution.
(iii) Written consent of the Participant to the distribution must
not be made before the Participant receives the notices and must not be made
more than 90 days before the first day on which all events have occurred which
entitle the Participant to such distribution.
(iv) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.
(v) If a distribution is one to which Code Sections 401(a)(11)
and 417 do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
(1) The Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The Participant, after receiving the notice,
affirmatively elects a distribution.
(d) DEFERRING DISTRIBUTIONS
A Participant who meets the requirements of Article 9.3(b) may
defer the commencement of a distribution by providing the Committee with a
written, signed notice specifying the date of the distribution and the
distribution method to be used, provided that:
(i) No distribution method chosen by the Participant shall
provide any payment in an amount less than that required under Article 9.6; and
(ii) Distributions shall commence no later than the April 1
following the last day of the calendar year in which a Participant attains age
70 1/2. Notwithstanding the preceding, a Participant (other than a 5% Owner) who
has attained age 70 1/2 and who is still employed by the Employer must postpone
the commencement of distributions until no later than the April 1 following the
last day of the calendar year in which he terminates from Service. However, to
the extent that the preceding would eliminate the ability of a Participant
(other than 5% Owner) to receive a distribution prior to his actual termination
from Service after age 70 1/2,
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the preceding sentence shall apply only to the benefits of Employees who attain
age 70 1/2 in calendar year 1998 or prior.
9.4 TREATMENT OF DEFERRED AMOUNTS
(a) IN CASH
Where the distribution of all or any portion of a Participant's
Account is to be deferred in the form of cash, the vested portion shall continue
to be held and invested as an unsegregated Account of the Trust or as an
investment Account in an investment fund pursuant to Article 13.7 subject to
revaluation as provided in Article 7. However, at the written request of a
Participant or his Beneficiary, such Account shall be transferred to a federally
insured savings account, to a certificate of deposit, to a money market
certificate or to another similar instrument which is acceptable to the
Committee and Trustee and which shall be part of this Trust and subject to all
the provisions hereof. Interest earned by any such federally insured savings
account, certificate of deposit, money market certificate or similar instrument
shall be credited to such Participant's Account.
(b) IN KIND
Where the distribution of all or any portion of a Participant's
Account is to be deferred in a form other than cash, the Committee shall direct
the Trustee to segregate the deferred portion as of the coincident or next
succeeding Valuation Date after revaluation as provided in Article 7. Such
property shall thereafter be held for distribution in the manner provided by
this Article 9. Such segregated Accounts shall continue as part of the Trust and
be subject to all the provisions hereof, and such Accounts shall share in the
allocation of Trust income or loss on a segregated basis as provided in
Article 7.
9.5 METHODS OF DISTRIBUTION
(a) METHODS
Distribution to any Participant who entered the Plan prior to
January 1, 1991 (or his Beneficiary, if entitled to payment) shall be made, in
whole or in part:
(i) In a lump sum, in cash, in kind, or in cash and kind provided
that in kind distributions shall not include life annuities;
(ii) In installments, payable at least annually, over a period of
years meeting the requirements of Article 9.6;
(iii) In the form of a nontransferable annuity contract providing
for a monthly guaranteed income for a period certain but not for the life of the
Participant;
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(iv) In any combination of the foregoing methods of distribution.
Distributions to any Participant who entered the Plan on or after January 1,
1991 (or his Beneficiary, if entitled to payment) shall be made only in the form
of a lump sum payment.
(b) PARTICIPANT CHOICE
The Participant may choose any of the methods described in (a);
provided that in the event that the Participant's vested Account meets the
cashout requirements of Article 9.3(a), payment will be made in a lump sum.
(c) EQUAL VALUE
All methods of distribution with respect to a Participant or
Beneficiary shall be of equal value as of the date payments are to commence.
(d) TIMING
If the amount of a distribution cannot be determined by the date
specified under Article 9.3, payment of benefits, retroactive to such date,
shall be made or shall begin no later than 60 days after the earliest date on
which the amount of the distribution can be determined.
(e) IN KIND DISTRIBUTIONS
In kind distributions shall be (i) made only in a form of
investment that was held on behalf of the Participant in a separate investment
fund pursuant to Article 13.7 immediately preceding the date of distribution,
(ii) limited to the amount of such investment so held, and (iii) based on the
fair market value of the distributable property, as determined by the Trustee at
the time of distribution.
9.6 DISTRIBUTION IN PERIODIC PAYMENTS
(a) MINIMUM DISTRIBUTIONS
If the distribution to a Participant includes periodic payments,
the amounts shall be calculated in accordance with the life expectancy of the
Participant or life expectancies of the Participant and his Beneficiary, except
as provided in (b) below. As provided in Article 9.1, the provisions of Code
Section 401(a)(9) shall govern the minimum amount of distributions payable. For
purposes of the computation of minimum distributions, the life expectancy of a
Participant and his spouse may be redetermined annually, to the extent permitted
by applicable law and regulation.
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(b) PRE-TEFRA DESIGNATION
The provisions of (a) above shall not apply in the case of a
Participant who has made a written designation, prior to January 1, 1984, to
receive distributions in periodic payments in a manner consistent with the
requirements of applicable law, regulations and guidelines as they existed prior
to the enactment of TEFRA.
9.7 DISTRIBUTION UPON DEATH OF PARTICIPANT
(a) DISTRIBUTION MADE TO PARTICIPANT'S BENEFICIARY
The vested portion of a Participant's Account which remains at
his death shall be distributed to the Participant's Beneficiary in accordance
with the provisions of this Article 9.7.
(b) GENERAL RULES
(i) If distribution to the Participant has commenced as periodic
payments and such Participant dies before receiving his entire vested interest,
then the remaining undistributed vested interest shall continue to be
distributed at least as rapidly as the schedule being used at the Participant's
date of death, and
(ii) If a Participant dies before distributions have commenced,
his vested Account shall be distributed within 5 years after the death of the
Participant. However, the prior sentence shall not apply with respect to such
portion of the Participant's vested Account as is payable to his designated
Beneficiary over a period not exceeding the life or life expectancy of such
Beneficiary beginning not later than 1 year after the Participant's death (or
such later date as prescribed by applicable regulation). In addition:
(1) If the Beneficiary is the deceased Participant's
surviving spouse, distributions may be deferred until the date on which the
Participant would have attained age 70 1/2, and
(2) If such surviving spouse dies before receiving any
distributions, the provisions of this Article 9.7 shall be applied as if such
spouse were the Participant.
(iii) Notwithstanding the foregoing, if a Participant dies before
distributions have commenced and the vested amount in his Account meets the
cashout requirements of Article 9.3(a), payment will be made in a lump sum to
his Beneficiary.
9.8 DISTRIBUTIONS TO MINORS OR LEGALLY INCOMPETENTS
In the case of any distribution to a minor or to a legally incompetent
person, the
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Committee may (1) direct the Trustee to make the distribution for his benefit
directly to his legal representative or legal guardian, or if none, to a
designated relative, to a responsible adult with whom the minor maintains his
residence, or to the custodian of such minor under the Uniform Gift to Minors
Act or Gift to Minors Act, if such is permitted by the laws of the state in
which the minor resides; or (2) instruct the Trustee to use the distribution
directly for his support, maintenance, or education. The Trustee shall not be
required to oversee the application, by any third party, of any distributions
made pursuant to this Article 9.8. Any such payment to the legal guardian or
legal representative, to a designated relative or to a custodian shall fully
discharge the Trustee, the Member Employers and the Plan from further liability
on account thereof. Distributions made under this Article 9.8 shall be in
accordance with the provisions of this Article 9.
9.9 TAX INFORMATION TO BE PROVIDED
The Committee shall provide to each Participant, Beneficiary or
Alternate Payee who receives an eligible rollover distribution (as defined in
Code Section 402(f)), at the time such distribution is made, a written
explanation of the (1) provisions under which the distribution will not be
subject to tax if timely transferred to an eligible retirement plan, and (2) if
applicable, provisions regarding the availability of capital gains and 10-year
averaging or 5-year averaging tax treatment of the distribution.
9.10 IN SERVICE WITHDRAWALS
(a) WITHDRAWALS PERMITTED FOR HARDSHIP
(i) GENERAL
At the request of a Participant, the Committee shall
authorize a withdrawal at any time from his Salary Deferral or Rollover Account,
provided that authorization for such withdrawal and the amount thereof shall be
given only on account of hardship incurred by the Participant which imposes
immediate and heavy financial needs which may not reasonably be met by the
Participant's other resources. Such withdrawal shall not exceed the amount
required to meet the immediate financial need created by the hardship including
any taxes or penalties created by such withdrawal. The amount which may be
withdrawn from such Participant's Salary Deferral Account shall not exceed the
lesser of:
(1) The value of his Salary Deferral Account; or
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(2) The value of his Salary Deferral Account as of December
31, 1988 plus the total of the salary deferral contributions made for the
Participant since December 31, 1988, less any amounts subsequently withdrawn.
(ii) IMMEDIATE AND HEAVY FINANCIAL NEED
A distribution shall be deemed to be due to an immediate and
heavy financial need if it is on account of:
(1) Medical expenses incurred or anticipated by the Employee
or his spouse or other dependent or the need of these persons to obtain medical
care;
(2) Costs directly related to the purchase (excluding
mortgage payments) of the Employee's principal residence;
(3) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Employee or his spouse or
dependents;
(4) The need to prevent the eviction from or the foreclosure
on the mortgage of the Employee's principal residence;
(5) Payment of funeral expenses of a family member of the
Participant; or
(6) Such other needs to be added by the Commissioner of
Internal Revenue.
(iii) DISTRIBUTION NECESSARY TO SATISFY FINANCIAL NEED
A distribution shall be treated as necessary to satisfy a
financial need if the Employee represents that the need cannot be relieved:
(1) Through reimbursement or compensation by insurance or
otherwise;
(2) By liquidation of the Employee's assets to the extent
that such liquidation would not cause an immediate and heavy financial need;
(3) By cessation of elective contributions under the Plan;
or
(4) By other distributions or loans from this Plan or any
other plan or by borrowing from commercial sources on reasonable terms unless
the effect of such loan would be to increase the amount of the need.
(b) WITHDRAWALS NOT PERMITTED FOR NON-HARDSHIP REASONS
No withdrawals from the Plan are permitted for reasons other
than hardship.
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(c) CONSENT REQUIRED
All withdrawals are subject to written Participant consent
to the extent required by applicable law and regulation.
(d) WITHDRAWAL CHARGED TO PARTICIPANT'S ACCOUNT
The Committee shall direct the Trustee to make a
distribution to a Participant of the amount which such Participant is eligible
to withdraw, and the amount of such withdrawal shall be charged by the Committee
against the Salary Deferral or Rollover Accounts of the Participant. Withdrawals
under this Article 9.10 will be charged against the Participant's Salary
Deferral or Rollover Account as of the specified date of withdrawal, but no
interest or other income credit shall accrue with respect to such amounts to be
withdrawn on account of any period elapsing between the withdrawal date and the
actual date of payment for Accounts which are not segregated or valued daily.
(e) COMMITTEE ESTABLISHES RULES
The Committee has the power to establish uniform and
nondiscriminatory rules and from time to time to modify or change such rules
governing the manner and method by which in service withdrawals may be made.
9.11 LIMITATIONS ON DISTRIBUTIONS UPON PLAN TERMINATION
Distributions of a Participant's Salary Deferral and Non-Elective
Accounts (and Rollover Account to the extent such Rollover Account is
attributable to a Participant's elective contributions, qualified nonelective
contributions or qualified matching contributions under Regulation Section
1.401(k)-1(g)) upon termination of the Plan shall not commence prior to the
Participant's termination of employment or his attainment of age 59 1/2 except
for hardship withdrawals in accordance with Article 9.10, unless payment is made
in a lump sum and (i) no successor defined contribution plan (as defined in IRS
regulations) is adopted; (ii) the only successor plan (as defined in IRS
regulations) is an ESOP as defined in Code Section 4975(e)(7); or (iii) the
distribution is:
(1) After the date of sale of all Member Employer assets
used in its trade or business to a non-Affiliated Employer by whom the
Participant is still employed;
(2) After the date of sale of an incorporated Affiliated
Employer's interest in a subsidiary by whom the Participant is employed; or
(3) Otherwise permitted by applicable law and regulations.
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For purposes of this Article 9.11, the term Affiliated Employer means
any employer that is part of a controlled group or an affiliated service
group (as defined in Code Sections 414(b), (c) or (m)) which includes the
Member Employer.
9.12 DIRECT ROLLOVERS
(a) IN GENERAL
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article 9, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
(b) DEFINITIONS PERTAINING TO DIRECT ROLLOVERS
(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee' s designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to Employer
securities).
(ii) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
annuity plan described in Section 403(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is the Alternate
Payee under a Qualified Domestic Relations Order are distributees with regard to
the interest of the spouse or former spouse.
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(iv) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by distributee.
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ARTICLE 10
SERVICE
10.1 DEFINITIONS
(a) "SERVICE" means an Employee's total period of
employment with the Employer, including service with a predecessor entity.
Throughout this Article 10, Employer shall include an Associated Employer and
any predecessor entity.
(b) "HOUR OF SERVICE" means:
(i) Each hour for which an Employee is paid,
or entitled to payment, for the performance of duties for the Employer.
(ii) Each hour for which an Employee is paid,
or entitled to payment, by the Employer on account of a period of time during
which no duties are performed regardless of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or leave of absence;
provided that no Hours of Service shall be credited to an Employee:
(1) For a period during which no
duties are performed if payment is made or due under a plan maintained solely
for purpose of complying with applicable workers compensation, unemployment
compensation, or disability insurance laws;
(2) On account of any payment made or
due an Employee solely as reimbursement for medical or medically related
expenses incurred by the Employee.
(iii) Each hour not otherwise credited under
the Plan for which back pay, irrespective of mitigation of damages, has
either been awarded or agreed to by the Employer. Such hours are to be
credited to the period or periods to which the award or agreement pertains.
If this provision results in an Employee becoming an Eligible Participant for
a Fiscal Year in which he was not otherwise an Eligible Participant under
Article 5, the Committee shall establish equitable procedures for determining
and allocating any resulting amounts to such Employee's Account.
(iv) Solely for purposes of determining
whether a Break in Service has occurred for purposes of Article 6, each hour
not otherwise credited under the Plan that would have been credited if the
Employee had not been absent:
(1) By reason of pregnancy or the
birth of a child of the Employee;
(2) By reason of the placement of a
child with the Employee in connection with his adoption of such child; or
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(3) For purposes of caring for any
such child for a period beginning immediately following such birth or
placement.
In any case in which the Employer is
unable to determine the number of hours which would otherwise normally have
been credited to such Employee (but for such absence), such individual shall
be credited with 8 Hours of Service for each day of such absence. The hours
described in this Article 10.l(b)(iv) shall be treated as Hours of Service
only in the Eligibility Computation Period in which the absence from work
begins if the Employee would thereby be prevented from incurring a Break in
Service in such Eligibility Computation Period or, in any other case, in the
next following Eligibility Computation Period.
(v) Each hour for any period during which an
Employee is not paid but is on an approved leave of absence, military duty or
is temporarily laid off, provided that the Employee:
(1) Returns to the employ of the
Employer immediately after the expiration of the leave or layoff, or in the
case of military duty, within 120 days or such longer period as may be
prescribed by applicable law, after first becoming eligible for military
discharge, and
(2) Remains in the employ of the
Employer for at least 30 days after such return, or
(3) Fails to return or remain
employed as provided above by reason of his death, Disability or Normal
Retirement.
Hours credited for such periods shall be
based on a 40-hour week or, if different, on the Employee's normally
scheduled hours per week. However, if the Employee fails to return to the
employ of the Employer or to remain in the employ of the Employer for at
least 30 days after his return for reasons other than his death, Disability
or Normal Retirement, then his original leave date shall be deemed to be his
termination date.
(vi) No more than 501 Hours of Service shall
be credited under Article 10.l(b), subsections (ii), (iii), (iv) or (v) to an
Employee on account of any single continuous period of time during which the
Employee performs no duties for the Employer.
10.2 CREDITING OF HOURS SUBJECT TO DOL REGULATION
The calculation of the number of Hours of Service to be
credited under Article 10.1(b), subsections (ii) and (iii) for periods during
which no duties are performed, and the crediting of such Hours of Service to
periods of time for purposes of computations under the Plan, shall be
determined by the Committee in accordance with the rules set forth in the
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Department of Labor Regulation Section 2530-200b-2, paragraphs (b) and (c),
which rules shall be consistently applied with respect to all employees
within the same job classifications.
10.3 HOURS OF SERVICE EQUIVALENCY
Hours of Service for Employees under Article 10.1(b),
subsections (i), (ii) and (iii) shall be determined by crediting each
Employee with 190 Hours of Service for each month in which the Employee would
have been credited with at least 1 Hour of Service under Article 10.l(b),
subsections (i), (ii) or (iii). However, for classes of Employees paid on an
hourly basis and for Employees for whom records of hours are maintained,
Hours of Service under Article 10.1(b), subsections (i), (ii) and (iii) shall
be determined on the basis of hours for which Plan Compensation is paid or
due.
10.4 QUALIFIED MILITARY SERVICE CREDITED
Notwithstanding any provisions of this Plan to the
contrary, effective as of December 12, 1994, Service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u), as added by the Small Business Job Protection Act of 1996.
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ARTICLE 11
FIDUCIARY RESPONSIBILITY
11.1 NAMED FIDUCIARIES
The authority to control and manage the operation and
administration of the Plan shall be allocated as provided in this Plan and
Trust Agreement between the Member Employers, the Committee and the Trustee,
all of whom are named fiduciaries under ERISA.
In addition, procedures for the appointment of another
fiduciary, an investment manager, are set forth in Article 13.5.
11.2 FIDUCIARY STANDARDS
Each fiduciary shall discharge its duties with respect to
the Plan solely in the interest of the Participants and Beneficiaries as
follows:
(1) For the exclusive purpose of providing benefits to
Participants and their Beneficiaries;
(2) With the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims;
(3) By diversifying the investments of the Trust Fund
so as to minimize the risk of large losses, unless under the circumstances it
is clearly prudent not to do so; and
(4) In accordance with this Plan and Trust Agreement.
11.3 FIDUCIARIES LIABLE FOR BREACH OF DUTY
A fiduciary shall be liable, as provided in ERISA, for any
breach of his fiduciary responsibilities. In addition, a fiduciary under this
Plan shall be liable for a breach of fiduciary responsibility of another
fiduciary under this Plan as provided under ERISA Section 405.
11.4 FIDUCIARY MAY EMPLOY AGENTS
Any person or group of persons may serve in more than one
fiduciary capacity with regard to the Plan. A fiduciary other than the
Trustee may, with the consent of the Sponsoring Employer, employ one or more
persons to render advice and assistance with regard to any function such
fiduciary has under the Plan. The expenses of such persons shall be paid by
the Trust if not paid by the Member Employers.
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11.5 AUTHORITY OUTLINED
(a) SPONSORING EMPLOYER AUTHORITY
The Sponsoring Employer has the authority to amend
and terminate the Plan with approval of its Board of Directors, to appoint
and remove members of the Committee and to appoint and remove a Trustee.
(b) COMMITTEE AUTHORITY
The Committee has the authority to:
(i) Allocate the Member Employers'
Contributions;
(ii) Establish rules pertaining to salary
deferral contributions and their suspension and withdrawals;
(iii) Determine the amount and allocation of
the Trust income or loss;
(iv) Direct the Trustee with respect to additional
valuations;
(v) Maintain separate Accounts for Participants;
(vi) Furnish, and correct errors in, statements of
Accounts;
(vii) Direct the Trustee with respect to the
method, timing and media of distributions pursuant to Article 9;
(viii) Direct the segregation of assets;
(ix) Direct distribution of the interests of
incompetent persons and minors;
(x) Construe the Plan and Trust Agreement and
determine questions thereunder;
(xi) Establish a funding policy;
(xii) Appoint and delegate duties to an investment
manager;
(xiii) Employ advisors and assistants; and
(xiv) Direct the Trustee with respect to its
duties and investments. The Committee is the Plan Administrator and has the
additional duties outlined in Article 11.7. Article 12 further describes the
authority and duties of the Committee.
(c) TRUSTEE AUTHORITY
The Trustee has the authority to establish the
fair market value of the Trust Fund, to value segregated Accounts and
Accounts held in separate investment funds, to employ advisors, agents and
counsel, to hold the Trust assets and to render accounts of its
administration of the Trust. Article 14 further describes the authority and
duties of the Trustee.
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11.6 FIDUCIARIES NOT TO ENGAGE IN PROHIBITED TRANSACTIONS
A fiduciary shall not cause the Plan to engage in a
transaction if he knows or should know that such transaction constitutes a
prohibited transaction under ERISA Section 406 or Code Section 4975, unless
such transaction is exempted under ERISA Section 408 or Code Section 4975.
11.7 DUTIES OF PLAN ADMINISTRATOR
The Committee is the Plan Administrator under ERISA and
shall have the duty and authority to comply with those reporting and
disclosure requirements of ERISA and the Code which are specifically required
of the Plan Administrator. The Plan Administrator is the agent for the
service of legal process. The Plan Administrator shall keep on file a copy of
this Plan and Trust Agreement, including any subsequent amendments, all
annual and interim reports of the Trustee and the latest annual report
required under Title I of ERISA for examination by Participants during
business hours. The Plan Administrator hereby specifically delegates to the
Trustee the responsibility for income tax withholding, and to withhold the
appropriate amount, if any, from any payment made from the Trust to a
Participant, Beneficiary or Alternate Payee under the provisions of
applicable law and regulation. The Plan Administrator shall furnish the
Trustee with all information necessary to such withholding function, as set
forth in regulations, or, if such information is not provided the Trustee,
the Plan Administrator shall assume all relevant liability.
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ARTICLE 12
ADMINISTRATIVE COMMITTEE
12.1 APPOINTMENT OF ADMINISTRATIVE COMMITTEE
The Sponsoring Employer shall appoint an Administrative
Committee to manage and administer this Plan in accordance with the
provisions hereof, each member to serve for such term as the Sponsoring
Employer may designate or until a successor member has been appointed or
until removed by the Sponsoring Employer. Vacancies due to resignation,
death, removal or other cause shall be filled by the Sponsoring Employer.
Members shall serve without compensation for Committee service. All
reasonable expenses of the Committee shall be paid by the Member Employers,
or if not paid by the Member Employers, the Committee may direct that such
expenses be paid from the Trust; provided that only reasonable administrative
expenses of the Committee may be paid from the Trust.
12.2 COMMITTEE OPERATING RULES
The Committee shall act by agreement of a majority of its
members, either by vote at a meeting or in writing without a meeting. By such
action, the Committee may authorize one or more members to execute documents
on its behalf and direct the Trustee in the performance of its duties
hereunder. The Trustee, upon written notification of such authorization,
shall accept and rely upon such documents until notified in writing that the
authorization has been revoked by the Committee. The Trustee shall not be
deemed to be on notice of any change in the membership of the Committee
unless notified in writing. A member of the Committee, who is also a
Participant hereunder, shall not vote or act upon any matter relating solely
to himself. In the event of a deadlock or other situation which prevents
agreement of a majority of the Committee members, the matter shall be decided
by the Sponsoring Employer.
12.3 COMMITTEE AUTHORITY
The Committee has full discretionary authority and duty to
administer and interpret the Plan and do all things necessary or convenient
to effect the intent and purpose of this Plan, whether or not such authority
and duties are specifically set forth herein. Not in limitation but in
amplification of the foregoing, the Committee shall have the discretionary
authority to determine eligibility for participation and benefits under the
Plan, to construe the Plan and Trust Agreement and to determine all questions
that shall arise hereunder, including,
12-1
particularly, directions to and questions submitted by the Trustee on all
matters necessary for it to discharge its power and duties properly. The
Committee may delegate its discretionary authority and such duties and
responsibilities as it deems appropriate to facilitate day-to-day
administration of the Plan. Decisions of the Committee made in good faith
upon any matters within the scope of its authority shall be final and binding
on the Employer, the Trustee, Participants, their Beneficiaries and all
others. The Committee shall at all times act in a uniform and
nondiscriminatory manner in making and carrying out its decisions and
directions, and may from time to time prescribe and modify uniform rules of
interpretation and administration. The Committee is the Plan Administrator
and has the duties outlined in Article 11.7.
12.4 COMMITTEE TO ESTABLISH FUNDING POLICY
The Committee shall establish a funding policy for the
Trust Fund bearing in mind both the short-run and long-run needs and goals of
the Plan. The Committee shall review such policy prior to the end of each
Fiscal Year for its appropriateness under the circumstances then prevailing.
The funding policy shall be communicated to the investment manager of the
Trust Fund, if one has been appointed, so that the investment policy of the
Trust Fund can be coordinated with Plan needs.
12.5 COMMITTEE MAY RETAIN ADVISORS
With the approval of the Sponsoring Employer, the Committee
may from time to time or on a continuing basis, retain such agents or
advisors including, specifically, attorneys, accountants, actuaries,
investment counsel, consultants and administrative assistants, as it
considers necessary to assist it in the proper performance of its duties. The
expenses of such agents or advisors shall be paid by the Member Employers,
or, if not paid by the Member Employers, the Committee may direct that such
expenses be paid from the Trust Fund; provided that only reasonable expenses
of administering the Trust may be paid from the Trust.
12.6 CLAIMS PROCEDURE
(a) CLAIM MUST BE SUBMITTED WITHIN 60 DAYS
The Committee shall determine Participants',
Alternate Payees' and Beneficiaries' rights to benefits under the Plan. In
the event of a dispute over benefits, a Participant, Beneficiary or Alternate
Payee may file a written claim for benefits with the Committee, provided that
such claim is filed within 60 days of the date the Participant, Beneficiary
or Alternate Payee receives notification of the Committee's determination.
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(b) REQUIREMENTS FOR NOTICE OF DENIAL
If a claim is wholly or partially denied, the
Committee shall provide the claimant with a notice of denial, written in a
manner calculated to be understood by the claimant, setting forth:
(i) The specific reason for such denial;
(ii) Specific references to the pertinent plan
provisions on which the denial is based;
(iii) A description of any additional material
or information necessary for the claimant to perfect the claim with an
explanation of why such material or information is necessary; and
(iv) Appropriate information as to the steps
to be taken if the claimant wishes to submit his or her claim for review.
The notice of denial shall be given within a
reasonable time period but no later than 90 days after the claim is filed,
unless special circumstances require an extension of time for processing the
claim. If such extension is required, written notice shall be furnished to
the claimant within 90 days of the date the claim was filed stating the
special circumstances requiring an extension of time and the date by which a
decision on the claim can be expected, which shall be no more than 180 days
from the date the claim was filed. If no notice of denial is provided as
herein described, the claimant may appeal the claim as though the claim had
been denied.
(c) CLAIMANT'S RIGHTS IF CLAIM DENIED
The claimant and/or his representative may appeal
the denied claim and may:
(i) Request a review upon written application to
the Committee;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing;
provided that such appeal is made within 60 days of the date the claimant
receives notification of the denied claim.
(d) TIME LIMIT ON REVIEW OF DENIED CLAIM
Upon receipt of a request for review, the
Committee shall provide written notification of its decision to the claimant
stating the specific reasons and referencing specific plan provisions on
which its decision is based, within a reasonable time period but not later
than 60 days after receiving the request, unless special circumstances
require an extension for processing the review. If such an extension is
required, the Committee shall notify the claimant
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of such special circumstances and of the date, no later than 120 days after
the original date the review was requested, on which the Committee will
notify the claimant of its decision.
(e) NO LEGAL RECOURSE UNTIL CLAIMS PROCEDURE EXHAUSTED
In the event of any dispute over benefits under
this Plan, all remedies available to the disputing individual under this
Article 12.6 must be exhausted before legal recourse of any type is sought.
12.7 COMMITTEE INDEMNIFICATION
To the fullest extent permitted by law, the Member
Employers agree to indemnify, to defend, and hold harmless the members of the
Committee, individually and collectively, against any liability whatsoever
for any (1) action taken or omitted by them in good faith in connection with
this Plan and Trust or their duties hereunder, and (2) expenses or losses for
which they may become liable as a result of any such actions or non-actions,
unless resultant from their own willful misconduct. The Member Employers may
purchase insurance for the Committee to cover any of their potential
liabilities with regard to the Plan and Trust.
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ARTICLE 13
INVESTMENTS AND LOANS
13.1 INVESTMENT AUTHORITY
The Committee is hereby granted full power and authority to
direct the Trustee to invest and reinvest the Trust Fund or any part thereof
in accordance with the standards set forth in Article 11. Without limiting
the generality of the foregoing, the Committee may direct the Trustee to
invest in bonds, notes, mortgages, commercial or federal paper, preferred
stock, common stock, or other securities, rights, obligations or property,
real or personal, including shares and certificates of participation issued
by investment companies or investment trusts, or shares or certificates of
participation in commingled funds established by the Trustee. The Committee
may direct the Trustee to acquire and hold common or preferred stock issued
by the Employer if such stock, at the time of acquisition by the Trustee,
constitutes no more than 100% of the fair market value of the Trust assets.
13.2 USE OF MUTUAL OR COMMINGLED FUNDS PERMITTED
The Committee may direct the Trustee to cause any part or
all of the assets of this Trust to be invested in mutual funds; or commingled
with the assets of similar Trusts qualified under Code Sections 401(a) and
501(a) by causing such assets to be invested as part of a common fund of the
Trustee or other fiduciary. To the extent that Trust assets are invested in
any collective investment fund established and maintained by the Trustee for
which the Trust is eligible, the declaration of trust establishing such funds
is hereby adopted. Any assets of the Trust that are invested in any such fund
will be held and administered by the Trustee under the terms of the fund's
governing instrument.
13.3 TRUSTEE MAY HOLD NECESSARY CASH
The Committee may authorize the Trustee to hold in a cash
or cash equivalent account such portion of the Trust Fund as may be deemed
necessary for the ordinary administration of the Trust and disbursement of
funds. Such funds may be deposited in any bank or savings and loan
institution subject to the rules and regulations governing such deposits.
13.4 TRUSTEE TO ACT UPON COMMITTEE INSTRUCTION
The Trustee shall make investments promptly upon receiving
instructions from the Committee, and shall retain such investments until
instructed differently by the Committee.
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The Trustee shall comply promptly with instructions from the Committee to
sell, convey, exchange, transfer, pledge, mortgage or otherwise dispose of or
encumber any real or personal property held by it. To the extent permitted by
law, the Trustee shall not be liable for the making of any investment at the
direction of the Committee, for the retention of any such investment in the
absence of directions from the Committee to dispose of it, or for the
disposal or encumbrance of any investment at the direction of the Committee.
13.5 APPOINTMENT OF INVESTMENT MANAGER
The power of the Committee to direct, control or manage the
investment of the Trust Fund may be delegated to an investment manager
appointed by the Committee. Such investment manager, if appointed, must
acknowledge in writing that he is a fiduciary with respect to the Trust Fund
and shall then have the power to manage, acquire, or dispose of any asset of
the Trust Fund. An investment manager must be (1) a registered investment
advisor under the Investment Advisors Act of 1940; (2) a bank, as defined in
that Act; or (3) an insurance company qualified to perform such services
under the laws of more than one state. If an investment manager has been
appointed, the Trustee shall neither be liable for acts or omissions of such
investment manager nor be under any obligation to invest or otherwise manage
any asset of the Trust Fund. The Committee shall not be liable for any act or
omission of the investment manager in carrying out such responsibility except
to the extent that the Committee violated Article 11.2 of this Plan and Trust
Agreement with respect to:
(1) Such designation,
(2) The establishment or implementation of the
procedures for the designation of an investment manager, or
(3) Continuing the designation, in which case the
Committee would be liable in accordance with Article 11.3.
13.6 NO LOANS PERMITTED
No loans to a Participant or Beneficiary from any portion
of the Participant's Account shall be permitted.
13.7 SEPARATE INVESTMENT FUNDS
(a) COMMITTEE MAY ESTABLISH SEPARATE FUNDS
The Committee may, in its sole discretion, direct
the Trustee to create one or more separate investment funds, having such
different specific investment objectives as the
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Committee shall from time to time determine provided that one fund shall be a
money market fund. The Committee may direct the Trustee to create an
investment fund which is made up of Employer stock, and if such an investment
fund is created, Participants shall be given the right to vote the shares of
such investment fund. The Committee shall develop policies, procedures and
guidelines as to how this investment fund shall be operated. The Committee
shall determine and may from time to time redetermine the number of
investment funds and the specific objectives of said funds and the
investments or kinds of investments which shall be authorized therefor.
(b) PARTICIPANT DIRECTION PERMITTED
Each Participant has the right to instruct the
Committee to direct the Trustee in writing or by electronic media in
accordance with currently acceptable regulations or guidance issued by the
U.S. Department of Labor and/or Internal Revenue Service to invest his Profit
Sharing, Salary Deferral, Matching, Non-Elective or Rollover Accounts in one
or more separate investment funds, provided, however, that such right to
direct investments among investment funds shall apply on a nondiscriminatory
basis to all Participants who meet the requirements established by the
Committee, and further provided that if any Participant fails to make a
direction pursuant to this Article 13 as to all or any part of such Account,
the undirected portion of a Participant's Account shall be invested in the
money market fund. Such directed investment Account shall be valued
separately by the Trustee under the provisions of Article 7.
(c) COMMITTEE TO ESTABLISH RULES
The Committee may at any time make such uniform
and nondiscriminatory rules as it determines necessary regarding the
administration of this directed investment option. The Committee shall
develop and maintain rules governing the rights of Participants to change
their investment directions and the frequency with which such changes can be
made.
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ARTICLE 14
TRUSTEE
14.1 TRUSTEE GOVERNING TERMS EFFECTIVE JANUARY 1, 1998
The provisions outlined in this Article 14 shall only be in
force through December 31, 1997, after which date the provisions of the Trust
Agreement for MasterPlan of Columbia Trust Company, an Oregon banking
corporation, attached hereto as Appendix A, shall prevail.
14.2 TRUSTEE DUTIES
The duties of the Trustee shall be confined to receiving
and paying funds of the Trust, safeguarding and valuing Trust assets,
investing and reinvesting the Trust Funds, as provided in Article 13, and
carrying out the directions of the Committee or of the investment manager if
one has been appointed pursuant to Article 13.5. The directions of the
Committee shall be in writing and bear the signature of one or more members
designated as its authorized signator or signators, as provided in Article
12.2. The directions of an investment manager shall be in writing or in such
other form as is acceptable to the Trustee. The Sponsoring Employer may,
however, authorize the Trustee to act with respect to any specific matter or
class of matters by delivering to the Trustee a certified copy of a
resolution authorizing the Trustee so to act. The signature of one Trustee
shall be binding upon all co-Trustees.
14.3 INDICIA OF OWNERSHIP MUST BE IN UNITED STATES
The Trustee shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the district courts of the
United States, except as authorized by regulations issued by the U.S.
Department of Labor.
14.4 PERMISSIBLE TRUSTEE ACTION
In the discharge of its duties, the Trustee has all the
powers, authority, rights and privileges of an absolute owner of the Trust
Fund and, not in limitation of but in amplification of the foregoing, may (i)
receive, hold, manage, invest and reinvest, sell, exchange, dispose of,
encumber, hypothecate, pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all property in the Trust Fund;
(ii) borrow money, participate in reorganizations, pay calls and assessments,
vote or execute proxies, exercise subscription or conversion privileges and
register in the name of a nominee any securities in the Trust Fund;
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(iii) renew, extend the due date, compromise, arbitrate, adjust, settle,
enforce or foreclose by judicial proceedings or otherwise or defend against
the same, any obligations or claims in favor of or against the Trust Fund;
(iv) exercise options, employ agents; and, (v) whether herein specifically
referred to or not, do all such acts, take all such actions and proceedings
and exercise all such rights and privileges as if the Trustee were the
absolute owner of any and all property in the Trust Fund. The Trustee has no
authority or duty to determine the amount of the Member Employer contribution
or to enforce the payment of any Member Employer contribution to it.
14.5 TRUSTEE'S FEES FOR SERVICES AND ADVISORS RETAINED
The Trustee's fees for its services as Trustee shall be an
amount mutually agreed upon by the Sponsoring Employer and the Trustee, and
such fees shall be paid by the Member Employers, with the exception that
individual Trustees shall serve without compensation for their service as
such. However, with the approval of the Sponsoring Employer, the Trustee may
from time to time or on a continuing basis, retain such agents or advisors,
including specifically accountants, attorneys, investment counsel and
administrators, as they consider necessary to assist them in the proper
performance of their duties. The expenses of such agents or advisors and all
other expenses of the Trustee shall be paid by the Member Employers. If such
expenses remain unpaid by the Member Employers for a period of 60 days after
an appropriate billing is mailed by the Trustee to the Member Employers, the
Trustee shall be entitled to charge such fees and expenses to the Trust Fund.
14.6 QUARTERLY ACCOUNTING AND ASSET VALUATION
Effective as of January 1, 1998, within 60 days or within a
reasonable period following the close of each calendar quarter, the Trustee
shall render to the Sponsoring Employer an accounting of its administration
of the Trust during the preceding valuation period. The Trustee shall also
report to the Committee regarding determinations of the value of the Trust
Fund, as provided in Article 7.1 and Article 7.2. Notwithstanding any other
provisions of this Agreement, if the Trustee finds that the Trust Fund
consists, in whole or in part, of property not traded freely on a recognized
market or that information necessary to ascertain the fair market value
thereof is not readily available to the Trustee, the Trustee shall request
the Committee to instruct the Trustee as to the fair market value of such
property for all purposes under the Plan and Trust Agreement. In such event,
the fair market value placed upon such property by the Committee in its
instructions to the Trustee shall be conclusive and binding. If the Committee
shall fail or refuse to instruct the Trustee as to the fair market value of
such property within a
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reasonable time after receipt of the Trustee's request so to do, the Trustee
shall take such action as is required to ascertain the fair market value of
such property including the retention of such counsel and independent
appraisers as it considers necessary; and in such event the fair market value
so determined shall be conclusive and binding.
14.7 TRUSTEE REMOVAL OR RESIGNATION
The Trustee may resign at any time upon 30 days written
notice to the Sponsoring Employer and the Committee or such shorter period as
may be agreeable to the Sponsoring Employer. Upon receipt of instructions or
directions from the Sponsoring Employer or the Committee with which the
Trustee is unable or unwilling to comply, the Trustee may resign upon written
notice to the Sponsoring Employer and the Committee, given within a
reasonable time under the circumstances then prevailing. After its
resignation, the Trustee shall have no liability to the Member Employers, the
Committee, or any person interested herein for failure to comply with any
instructions or directions. The Sponsoring Employer may remove the Trustee
without cause at any time upon 30 days written notice. In case of resignation
or removal of the Trustee, the Trustee shall have the right of a settlement
of its accounts, which may be made at the option of the Trustee, either by
judicial settlement in an action in a court of competent jurisdiction or by
agreement of settlement between the Trustee and the Sponsoring Employer. The
Trustee shall not be required to transfer assets of the Trust Fund to a
successor Trustee under Article 14.8 or otherwise until its accounts have
been settled.
14.8 APPROVAL OF TRUSTEE ACCOUNTING
The written approval of any Trustee accounting by the
Sponsoring Employer or Committee shall be final as to all matters and
transactions stated or shown therein and binding upon the Member Employers,
Committee, and all persons who then shall be or thereafter shall become
interested in this Trust. Failure of the Sponsoring Employer or Committee to
notify the Trustee of its disapproval of an accounting within 90 days after
it has been received shall be the equivalent of written approval.
14.9 TRUST NOT TERMINATED UPON TRUSTEE REMOVAL OR RESIGNATION
Resignation or removal of the Trustee shall not terminate
the Trust. If the Trustee has died, resigned or been removed, the Sponsoring
Employer shall appoint a successor Trustee. In the event of the death,
resignation or removal of a Trustee and the failure of the Sponsoring
Employer to appoint a successor within 30 days as herein provided, the
remaining Trustees may
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by unanimous vote either select a successor Trustee or choose to function
without filling such vacancy. Any such successor Trustee shall have all the
powers and duties herein conferred upon the former Trustee. The title to all
Trust property shall automatically vest in a successor Trustee without the
execution or filing of any instrument or the doing of any act, but the former
Trustee shall, nevertheless, execute all instruments and do all acts which
would otherwise be necessary to vest such title in any successor. The
appointment of a successor Trustee may be effected by amendment to this Trust
Agreement or by a resolution of the Board of Directors of the Sponsoring
Employer, with the agreement of the successor Trustee to act as such being
evidenced by its execution of such amendment or acceptance of such Board
resolution.
14.10 TRUSTEE MAY CONSULT WITH LEGAL COUNSEL
The Trustee may consult with legal counsel (who may or may not be counsel to
a Member Employer) concerning any question which may arise with reference to
its duties under this Plan and Trust Agreement.
14.11 TRUSTEE NOT REQUIRED TO VERIFY IDENTIFICATION OR ADDRESSES
The Trustee shall not be required to make any investigation
to determine the identity or mailing address of any person entitled to
benefits under this Plan and Trust Agreement and shall be entitled to
withhold making payments until the identity and mailing address of any person
entitled to benefits are certified by the Committee. In the event that any
dispute shall arise as to the identity or rights of persons entitled to
benefits hereunder, the Trustee may withhold payment of benefits until such
dispute has been determined by a court of competent jurisdiction or shall
have been settled by written stipulation of the parties concerned.
14.12 INDIVIDUAL TRUSTEE RULES
The action of individual Trustees shall be determined by
the vote or other affirmative expression of the majority thereof, and they
shall designate one of their members to keep a record of their decision on
matters to be determined hereunder and of all dates, documents and other
matters pertaining to their administration of this Trust. However, no Trustee
who is a Participant shall vote on any action relating specifically to
himself, and in the event the remaining Trustees by majority vote thereof are
unable to come to a determination of any such question, the matter shall be
decided by the Sponsoring Employer.
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14.13 INDEMNIFICATION OF TRUSTEE AND INSURANCE
To the fullest extent permitted by law, the Member
Employers agree to indemnify, to defend, and to hold harmless the Trustee ,
individually and collectively, against any liability whatsoever for any
action taken or omitted by such Trustee in good faith in connection with this
Plan and Trust or duties hereunder and for any expenses or losses for which
the Trustee may become liable as a result of any such actions or non-actions
unless resultant from willful misconduct. The Member Employers may purchase
insurance for the Trustees to cover any of their potential liabilities with
regard to the Plan and Trust.
14.14 INCOME TAX WITHHOLDING
In making payments from the Trust, the Trustee shall be
liable for withholding of federal income tax, and required state income tax,
and shall withhold the appropriate amount of tax, if any, as provided by
applicable law and regulation, from any payment made to a Participant,
Beneficiary or Alternate Payee, unless the Committee does not provide the
Trustee with the necessary information as set forth in regulations, in which
case the Committee shall assume all relevant liability.
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ARTICLE 15
AMENDMENT, TERMINATION AND MERGER
15.1 TRUST IS IRREVOCABLE
The Trust shall be irrevocable but shall be subject to
amendment and termination as provided in this Article 15.
15.2 SPONSORING EMPLOYER MAY AMEND PLAN AND TRUST AGREEMENT
The Sponsoring Employer reserves the right to amend this
Plan and Trust Agreement to any extent and in any manner that it may deem
advisable by action of its Board of Directors. The Member Employers, the
Trustee, all Participants, their Beneficiaries and all other persons having
any interest hereunder shall be bound by any such amendment; provided,
however, that no amendment shall:
(1) Cause or permit any part of the principal
or income of the Trust to revert to the Employer or any Associated Employer
or to be used for, or be diverted to, any purpose other than the exclusive
benefit of Participants or their Beneficiaries except as permitted by ERISA;
(2) Change the duties or liabilities of the
Trustee without its written assent to such amendment;
(3) Adversely affect the then accrued
benefits of any Participants; or
(4) Eliminate an optional form of
distribution for Account balances accrued before such amendment, except as
allowed under the Code. No optional form of distribution for Account balances
that are accrued before such amendment shall be eliminated if it existed as
of the later of the adoption date of such amendment or the amendment's
effective date.
15.3 SPONSORING EMPLOYER MAY TERMINATE PLAN/MEMBER EMPLOYERS MAY
DISCONTINUE MATCHING AND/OR PROFIT SHARING CONTRIBUTIONS
The Sponsoring Employer has established the Plan with the bona fide intention
and expectation that the Plan will continue indefinitely, and that it will be
able to make its matching and profit sharing contributions indefinitely, but
a Member Employer shall be under no obligation to continue its matching
and/or profit sharing contributions and the Sponsoring Employer shall be
under no obligation to maintain the Plan for any given length of time and
may, in its sole discretion, completely discontinue its matching and/or
profit sharing contributions or terminate
15-1
the profit sharing and/or salary deferral portions of the Plan at any time
without any liability whatsoever. In the event of the earlier of (1) the
termination of this Plan, or (2) the complete discontinuance of matching
and/or profit sharing contributions by a Member Employer hereunder, the full
value of the applicable Accounts of all Participants of the terminated
portion or portions of the Plan shall remain fully vested and nonforfeitable.
In the event of partial termination of the Plan, the full value of the
applicable Accounts of the Participants involved in the partial termination
shall remain fully vested and nonforfeitable.
15.4 TIMING OF PLAN TERMINATION
The Plan shall terminate:
(a) BY WRITTEN NOTICE
Upon the date specified in a written notice of
such termination, executed by the Sponsoring Employer and delivered to the
Trustee; or
(b) WHEN THE PURPOSE OF THE TRUST IS ACCOMPLISHED
Upon the earlier of (i) the complete
accomplishment of all purposes for which the Plan and Trust was created, or
(ii) the death of the last person entitled to receive any benefits hereunder
who is living at the date of execution of the Plan and Trust Agreement.
However, if, upon the death of such last survivor, the Trust may continue for
a longer period without violation of any law of the jurisdiction to which the
Trust is subject, the Trust shall continue until the complete accomplishment
of all the purposes for which the Plan and Trust are created, unless sooner
terminated under the other provisions hereof.
15.5 ACTION REQUIRED UPON PLAN TERMINATION
Upon the termination of this Plan and after payment of all
expenses of the Trust, including any compensation then due the Trustee and
agents of the Committee, the Trust assets and all Participants' Accounts
shall be revalued according to the procedures provided in Article 7.
Limitation Accounts held pursuant to Article 5 shall be allocated as of the
date the Plan is terminated in accordance with Article 4 and Article 5. The
Trustee shall hold and distribute such Accounts as directed by the Committee
in accordance with the provisions of Article 9. Upon such termination, if the
Sponsoring Employer has ceased to exist, all rights, powers, and duties to be
exercised or performed by the Sponsoring Employer shall thereafter be
exercised or performed by the Committee, including the filling of vacancies
on the Committee and the amending of the Plan and Trust documents. In the
event the Committee is unable to perform, all rights, powers and duties shall
be performed by the Trustee.
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15.6 NONREVERSION OF ASSETS
Except as provided in Article 4.3(b), in no event shall any
part of the principal or income of the Trust revert to the Employer or any
Associated Employer or be used for or diverted to any purpose other than the
exclusive benefit of Participants or their Beneficiaries.
15.7 MERGER OR CONSOLIDATION CANNOT REDUCE BENEFITS
In no event shall this Plan be merged or consolidated with
any other plan, nor shall there be any transfer of assets or liabilities from
this Plan to any other plan unless immediately after such merger,
consolidation or transfer, each Participant's benefits, if such other plan
were then to terminate, are at least equal to or greater than the benefits
which the Participant would have been entitled to had this Plan been
terminated immediately before such merger, consolidation or transfer.
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ARTICLE 16
ASSIGNMENTS
16.1 NO ASSIGNMENT
Except as provided below, the interest herein, whether
vested or not, of any Participant, former Participant or Beneficiary, shall
not be subject to alienation, assignment, pledging, encumbrance, attachment,
garnishment, execution, sequestration, or other legal or equitable process,
or transferability by operation of law in the event of bankruptcy, insolvency
or otherwise.
16.2 QUALIFIED DOMESTIC RELATIONS ORDER PERMITTED
The provisions of Article 16.1 above shall not prevent the
creation, assignment or recognition of any individual's right to a benefit
payable with respect to a Participant pursuant to a Qualified Domestic
Relations Order (QDRO). The Committee shall direct that payments under a QDRO
be made by the Trustee pursuant to the QDRO.
(a) NOT ALL DOMESTIC RELATIONS ORDERS QUALIFY AS QDROS
The Committee shall establish reasonable, timely
procedures to (1) determine whether a domestic relations order is a QDRO and
(2) notify affected parties as specified in Code Section 414(p)(6).
(b) PAYMENTS MAY OCCUR BEFORE TERMINATION OF SERVICE
The Plan may make benefit payments to an Alternate
Payee under a QDRO before the Participant's termination of Service, but any
such payment shall be made no earlier than the date specified in the QDRO, or
in accordance with Code Section 414(p)(3), (4), and (5).
(c) SEPARATE ACCOUNTING OF ALTERNATE PAYEE'S ACCOUNT
During any period in which the issue of whether a
domestic relations order is a QDRO is being determined by the Committee, a
court of law or otherwise, the Committee shall separately account for the
amounts (with investment income and loss) which are involved.
16.3 OFFSET TO PROVIDE CERTAIN JUDGMENTS AND SETTLEMENTS PERMITTED
Effective August 5, 1997, the provisions of Article 16.1
above shall not prevent an offset of a Participant's Account against an
amount that the Participant is ordered or required to pay to the Plan. Any
such offset shall be made only in accordance with Code Section 401(a)(13)(C),
and the provisions of Code Sections 401(a)(13)(C) and (D) are hereby
incorporated by reference.
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ARTICLE 17
ADOPTION OF THE PLAN BY ASSOCIATED EMPLOYERS
17.1 PURPOSE
The purpose of this Article 17 is to describe the terms and
conditions under which an Associated Employer may adopt and become a Member
Employer under this Plan for the benefit of its Eligible Employees.
17.2 BECOMING A MEMBER EMPLOYER
Any Associated Employer may, with the written consent of
the Sponsoring Employer, become a Member Employer under this Plan and Trust
Agreement by executing a Subscription Agreement under which it shall agree:
(a) To be bound by all the provisions of the Plan and
Trust Agreement in the manner set forth herein;
(b) To pay its share of the expenses of the Plan and
Trust as they may be determined from time to time in the manner specified in
this Article 17; and
(c) To provide the Sponsoring Employer, Committee and the
Trustee with full, complete and timely information on all matters necessary
to them in the operation of the Plan and Trust.
17.3 PARTICIPATION AS A MEMBER EMPLOYER
In the event of the adoption of this Plan and Trust
Agreement by an Associated Employer, the following shall apply with respect
to the participation of such Associated Employer as a Member Employer
hereunder:
(a) All the terms and conditions of the Plan and Trust as
set forth in the preceding Article 1 through Article 16 shall apply to the
participation of such Associated Employer and its Employees in the same
manner as set forth for the Sponsoring Employer and its Employees, except as
follows:
(i) The right to designate an Associated
Employer is specifically reserved to the Sponsoring Employer.
(ii) An Associated Employer which becomes a
Member Employer shall have the right to designate for purposes of Article 3
alternative requirements which shall be met by its Eligible Employees in
order to qualify as Participants. In the event that no such
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designation is made, the current requirements set forth in Article 3 shall
apply to Employees of such Member Employer.
(iii) The right to appoint the Committee is
specifically reserved to the Sponsoring Employer so long as the Sponsoring
Employer participates under the Plan; provided that a Member Employer may
appoint an advisory committee on any matters affecting such Member Employer
or its Employees who are Participants under the Plan. The Committee shall be
entitled to rely on any information furnished it by any such advisory
committee in the same manner as if furnished by the Member Employer
appointing such advisory committee, but in no event shall the existence of
any advisory committee modify or otherwise limit any of the powers or duties
of the Committee under the Plan.
(iv) The right to direct, appoint, remove,
approve the accounts of or otherwise deal with the Trustee is specifically
reserved to the Sponsoring Employer so long as the Sponsoring Employer
participates under the Plan.
(v) The right to amend the Plan and Trust
Agreement is specifically reserved to the Sponsoring Employer so long as the
Sponsoring Employer participates under the Plan, and any such amendment,
unless otherwise specified therein, shall be fully binding with respect to
the participation of any Member Employer, provided that this reservation
shall in no event be construed to prevent any Member Employer from
terminating at any time its participation as a Member Employer in this Plan
and Trust.
(b) In the operation of the Plan with respect to a Member
Employer, the term "effective date" shall mean the effective date set forth
in this Plan and Trust Agreement or such other date as specified in such
Member Employer's Subscription Agreement.
(c) The Committee shall at all times maintain separate
Accounts reflecting the participation of the Eligible Employees of the
Sponsoring Employer and any Member Employer, and in no event shall there be a
commingling of the Accounts of the Eligible Employees of any Member Employer
with those of the Sponsoring Employer; provided that this requirement shall
in no event be construed to be a limitation on the commingling of any
contributions or of the Trust Fund for investment purposes, nor shall it
require the Trustee to maintain separate accounts with respect to the Trust
Fund except as otherwise provided herein.
(d) Notwithstanding any other provisions of this Plan and
Trust Agreement to the contrary, it is specifically understood that the
participation of any Associated Employer hereunder, the obligation of such
Associated Employer to make contributions hereunder, and the vesting and
entitlements of any Participant based on such contributions are conditional
to the extent that if such Associated Employer receives an initial
notification from the United States
17-2
Treasury that its Subscription Agreement as part of this Plan, or the same as
it may have been amended, is not part of a qualified plan under Section 401
of the Code with respect to its participation, such Associated Employer shall
not be a Member Employer hereunder and the then value of any contributions
made by such Associated Employer or its Employees shall be returned from the
Trust Fund, and no Participant hereunder or his Beneficiary shall have any
vested interest in, or be entitled to, any benefit payments based on such
contributions. Further, it is understood and provided that upon receipt of an
initial notification from the United States Treasury Department that such
Subscription Agreement and this Plan and Trust Agreement, as they may have
been amended in order to receive such notification, are qualified and exempt
from taxation under the applicable sections of the Code, the participation of
such Associated Employer as a Member Employer and the vestings and
entitlement of all Participants employed by such Member Employer and their
Beneficiaries shall be retroactive to the date of their occurrence in
accordance with the other provisions of this Plan and Trust Agreement, and
this Article 17.3 shall be of no further force or effect with respect to such
Associated Employer and its Employees.
17.4 TERMINATION OF PARTICIPATION IN THE PLAN
Any Member Employer may at any time elect to terminate its
participation in this Plan and Trust, or, may elect at any time by
appropriate amendment or action affecting only its own status hereunder to
terminate its participation in this Plan and Trust and to continue the Plan
and the portion of the Trust as it pertains to itself and its Employees as an
entity separate and distinct from this Plan and Trust if otherwise permitted
by law. Termination of the participation of any Member Employer shall not
affect the participation of any other Member Employer nor shall it terminate
the Plan or Trust with respect to them and their Employees; provided that, if
the Sponsoring Employer shall terminate its participation, or disassociate
itself, then each remaining Member Employer shall make such arrangements and
take such action as may be necessary to assume the duties of the Sponsoring
Employer in providing for the operation and continued administration of the
Plan and Trust as the same pertains to the Member Employer.
17.5 CHARGES TO MEMBER EMPLOYERS
Each Member Employer shall be liable for and shall pay at
least annually to the Sponsoring Employer its fair share of the expenses of
operating the Plan and Trust, including its share of any Trustee's fees. The
amount of such charges to each Member Employer shall be determined by the
Committee in its sole discretion; provided that, except with respect to
charges
17-3
incurred solely on account of a Member Employer's segregated transaction, no
Member Employer shall be charged with a greater proportion of any expenses of
Plan operation than the ratio that the number of Participants who are or were
its Employees bears to the total of all Participants nor for a greater
proportion of any Trustee's fees than the ratio that the portion of the Trust
Fund pertaining to its participation bears to the total Trust Fund.
17-4
IN WITNESS WHEREOF, the Sponsoring Employer and the Trustee have caused this
Plan and Trust Agreement to be executed by their respective duly authorized
parties on this 1st day July, 1999.
CLOVIS COMMUNITY BANK
(Sponsoring Employer)
By /S/ DANIEL J. DOYLE
-------------------
Daniel J. Doyle,
President and Chief Executive Officer
DANIEL N. CUNNINGHAM
WANDA LEE ROGERS
(Trustees before January 1, 1998)
By /S/ DANIEL N. CUNNINGHAM
--------------------------------
Daniel N. Cunningham, Trustee
By /S/ WANDA LEE ROGERS
--------------------------------
Wanda Lee Rogers, Trustee