UNITED STATIONERS
401(K) SAVINGS PLAN
RESTATED AS OF
MARCH 1, 1996
TABLE OF CONTENTS
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ARTICLE I
Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
Definitions and Construction . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Principal Entities. . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Determination of Benefits . . . . . . . . . . . . . . . . . . . 3
2.4 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Construction. . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
Participation and Service. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Participation and Service Upon Reemployment . . . . . . . . . . 8
3.4 Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Controlled Groups . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Affiliated Service Groups . . . . . . . . . . . . . . . . . . . 10
3.7 Leased Employees. . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
Contributions and Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Employer Contributions. . . . . . . . . . . . . . . . . . . . . 10
4.2 Contributions by Participants . . . . . . . . . . . . . . . . . 11
4.3 Disposition of Forfeitures. . . . . . . . . . . . . . . . . . . 12
4.4 Participant Salary Deferral . . . . . . . . . . . . . . . . . . 13
4.5 Special Rules for Owner-Employees . . . . . . . . . . . . . . . 16
ARTICLE V
Allocations to Participants' Accounts. . . . . . . . . . . . . . . . . . . . 16
5.1 Individual Accounts . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Account Adjustments . . . . . . . . . . . . . . . . . . . . . . 17
5.3 Maximum Additions . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Nondiscrimination Requirements. . . . . . . . . . . . . . . . . 20
5.5 Rollover Contributions. . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.1 Retirement or Disability. . . . . . . . . . . . . . . . . . . . 31
6.2 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.3 Termination for Other Reasons . . . . . . . . . . . . . . . . . 31
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6.4 Payment of Benefits . . . . . . . . . . . . . . . . . . . . . . 32
6.5 Distribution of Unallocated Employee Contributions and Salary
Deferral Contributions. . . . . . . . . . . . . . . . . . . . . 39
6.6 Designation of Beneficiary. . . . . . . . . . . . . . . . . . . 39
6.7 Optional Direct Transfer of Eligible Rollover Distributions . . 41
6.8 Loans to Participants . . . . . . . . . . . . . . . . . . . . . 42
6.9 Cash-Out Procedure. . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE VII
Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.1 Appointment of Trustee. . . . . . . . . . . . . . . . . . . . . 44
7.2 Assets of the Trust . . . . . . . . . . . . . . . . . . . . . . 44
7.3 Earmarked Investments . . . . . . . . . . . . . . . . . . . . . 44
7.4 Reversion of Employer Contributions . . . . . . . . . . . . . . 45
ARTICLE VIII
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.1 Allocation of Responsibility Among
Fiduciaries for Plan and Trust Administration . . . . . . . . . 45
8.2 Appointment of Committee. . . . . . . . . . . . . . . . . . . . 46
8.3 Claims Procedure. . . . . . . . . . . . . . . . . . . . . . . . 46
8.4 Records and Reports . . . . . . . . . . . . . . . . . . . . . . 46
8.5 Other Committee Powers and Duties . . . . . . . . . . . . . . . 46
8.6 Rules and Decisions . . . . . . . . . . . . . . . . . . . . . . 47
8.7 Committee Procedures. . . . . . . . . . . . . . . . . . . . . . 47
8.8 Authorization of Benefit Payments . . . . . . . . . . . . . . . 47
8.9 Application and Forms for Benefits. . . . . . . . . . . . . . . 47
8.10 Facility of Payment . . . . . . . . . . . . . . . . . . . . . . 47
8.11 Indemnification of the Committee. . . . . . . . . . . . . . . . 48
ARTICLE IX
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.1 Nonguarantee of Employment. . . . . . . . . . . . . . . . . . . 48
9.2 Rights to Trust Assets. . . . . . . . . . . . . . . . . . . . . 48
9.3 Nonalienation of Benefits . . . . . . . . . . . . . . . . . . . 48
9.4 Nonforfeitability of Benefits . . . . . . . . . . . . . . . . . 48
9.5 Discontinuance of Employer Contributions. . . . . . . . . . . . 48
ARTICLE X
Amendments and Action by Employers . . . . . . . . . . . . . . . . . . . . . 49
10.1 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.2 Action by Employers . . . . . . . . . . . . . . . . . . . . . . 49
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ARTICLE XI
Successor Employer and Merger or Consolidation of Plans. . . . . . . . . . . 49
11.1 Successor Employer. . . . . . . . . . . . . . . . . . . . . . . 49
11.2 Conditions Applicable to Mergers or Consolidations of Plans . . 49
ARTICLE XII
Plan Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.1 Right to Terminate. . . . . . . . . . . . . . . . . . . . . . . 50
12.2 Partial Termination . . . . . . . . . . . . . . . . . . . . . . 50
12.3 Liquidation of the Trust Fund . . . . . . . . . . . . . . . . . 50
12.4 Manner of Distribution. . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XIII
Plan Adoption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
13.1 Adoption Procedure. . . . . . . . . . . . . . . . . . . . . . . 51
13.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.3 Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.4 Transferred Assets. . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XIV
Top-Heavy Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 51
14.3 Minimum Allocation Requirements . . . . . . . . . . . . . . . . 54
14.4 Special 415 Limitations . . . . . . . . . . . . . . . . . . . . 55
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PURPOSE
In order to provide retirement benefits for eligible employees, United
Stationers Supply Co. and Utility Stationery Stores, Inc. created the United
Stationers Supply Co. Profit Sharing Plan and Trust, which was embodied in a
trust agreement executed on January 2, 1939, and amended from time to time
thereafter and subsequently renamed as the United Stationers Inc. Profit
Sharing PluSavings Plan ("USI Plan").
Effective June 24, 1992, Stationers Distributing Company, Incorporated was
merged into United Stationers Supply Co. Stationers Distributing Company,
Incorporated maintained the Stationers Distributing Company, Incorporated Profit
Sharing Retirement and Tax Sheltered Savings Plan ("Distributing Plan"). After
the merger of Stationers Distributing Company, Incorporated into United
Stationers Supply Co., United Stationers Supply Co. deemed it desirable to merge
the Distributing Plan into the USI Plan. The USI Plan and the Distributing Plan
were merged effective December 31, 1992. The USI Plan was amended and restated
effective January 1, 1993, to continue the retirement programs previously
maintained by the respective USI Plan and the Distributing Plan prior to their
merger.
Effective March 30, 1995, Associated Stationers, Inc. was merged into
United Stationers Inc. ("Company"), the parent corporation of United Stationers
Supply Co. Associated Stationers, Inc. previously maintained the Associated
Stationers, Inc. Profit Sharing and Savings Plan ("Plan"). The Plan was
originally established effective April 1, 1992 by Associated Stationers, Inc.
for the benefit of its eligible employees and has been amended from time to time
thereafter. After the merger of Associated Stationers, Inc. into United
Stationers, Inc. ("Company"), the Company deemed it desirable to merge the USI
Plan into this Plan effective March 1, 1996. This Plan is herein amended and
restated effective March 1, 1996 ("Effective Date"), and renamed as the United
Stationers 401(K) Savings Plan. The Plan, as restated, represents a
continuation of the retirement programs previously maintained by the USI Plan
and the Plan prior to their merger.
It is intended that on or about March 1, 1996, the assets of the USI Plan
and this Plan will be combined to form the assets of this Plan following the
merger. The sum of the participant account balances in the USI Plan and this
Plan shall equal the fair market value (determined as of the date of the merger)
of the entire plan assets. Immediately after the merger, each participant in
this Plan shall have an account balance equal to the account balance the
participant had in this Plan or the USI Plan immediately prior to the merger.
The Plan and the trust established pursuant to the Plan are intended to
meet the requirements of sections 401(a) and 501(a) of the Internal Revenue Code
of 1986, as amended (the "Code") and the Employee Retirement Income Security Act
of 1974, as amended.
The provisions of this Plan shall apply only to a participant who
terminates employment on or after the Effective Date. The provisions of this
Plan as herein amended and restated shall not be construed to alter in any way
the rights of any former participant (or any former participant's beneficiaries)
who has retired or died, or who has terminated employment before the Effective
Date. A former participant's eligibility for benefits, and the amount of
benefits, if any, payable to or on behalf of a former participant shall be
determined in accordance with the provisions of the respective plan in effect on
the date the participant's employment terminated.
DEFINITIONS AND CONSTRUCTION
DEFINITIONS: Where the following words and phrases appear in this Plan, they
shall have the respective meanings set forth in this Article, unless the
context clearly indicates to the contrary.
PRINCIPAL ENTITIES:
(a) BENEFICIARY: A person or persons designated by a Participant in
accordance with the provisions of Section 6.6 DESIGNATION OF
BENEFICIARY to receive any death benefit which shall be payable under
the Plan.
(b) COMMITTEE: The persons appointed pursuant to Article VIII
ADMINISTRATION to administer the Plan in accordance with said Article.
(c) COMPANY: United Stationers Inc., a Delaware corporation, with its
principal place of business in Des Plaines, Illinois, or its successor
or successors.
(d) DISTRIBUTING PLAN: The Stationers Distributing, Incorporated Profit
Sharing Retirement and Tax Sheltered Savings Plan prior to its merger
into the USI Plan on June 24, 1992.
(e) EMPLOYEE: Any person who is receiving remuneration on a salary or
commission basis for personal services rendered to the Employers (or
who would be receiving such remuneration except for an Authorized
Leave of Absence). Notwithstanding anything herein to the contrary,
no leased employee within the meaning of section 414(n) of the Code
with respect to any Employer shall be considered an Employee.
(f) EMPLOYERS: The Company and such subsidiary or affiliated corporations
of the Company, including, without limitation, United Stationers
Supply Co., which adopt the Plan with the Company's consent.
(g) FIDUCIARIES: The Employers, the Committee and the Trustee but only
with respect to the specific responsibilities of each for Plan and
Trust administration, all as described in Section 8.1 ALLOCATION OF
RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST ADMINISTRATION.
(h) FORMER PARTICIPANT: A Participant whose employment with the Employers
has terminated but who has a vested Account balance under the Plan
which has not been paid in full, and therefore, is continuing to
participate in the allocation of Trust Fund Income.
(i) PARTICIPANT: An Employee participating in the Plan in accordance with
the provisions of Section 3.1 PARTICIPATION.
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(j) PLAN: UNITED STATIONERS INC. 401(K) SAVINGS PLAN, the Plan set forth
herein, as amended from time to time, formerly known as the Associated
Stationers, Inc. Profit Sharing and Savings Plan, prior to this
amendment and restatement of the Plan.
(k) TRUST (OR TRUST FUND): The fund, maintained in accordance with the
terms of the trust agreement entered into between the Company and the
Trustee, as from time to time amended, which constitutes a part of
this Plan.
TRUSTEE: The corporation or individuals appointed by the Board of
Directors to administer the Trust.
(m) USI PLAN: The United Stationers Inc. Profit Sharing Plus Savings Plan
prior to its merger into this Plan on the Effective Date.
DETERMINATION OF BENEFITS:
(a) ACCOUNT(S): The separate account or accounts which are maintained for
each Participant.
(b) ADDITIONS: With respect to each Limitation Year, defined at Section
5.3 MAXIMUM ADDITIONS, the total of the Employer Contributions and
forfeitures allocated to a Participant's Employer Contribution
Account, Basic Employer Contribution Account and Matching Employer
Contribution Account determined without regard to rollover
contributions and direct transfer contributions, if any, the Employee
Contributions which are allocated to the Participant's Employee
Contribution Account, and the Salary Deferral Contributions which are
allocated to the Participant's Salary Deferral Contribution Account,
but excluding Salary Deferral Contributions attributable to Excess
Deferrals, as defined in Section 5.4(a)(v), which are distributed no
later than the first April 15 following the close of the Participant's
taxable year, and including amounts allocated to an individual medical
account, as defined in section 415(l)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer, and amounts
derived from contributions which are attributable to post-retirement
medical benefits, allocated to the separate account of a key employee,
as defined in section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in section 419(e) of the Code, maintained by the
Employer.
(c) AUTHORIZED LEAVE OF ABSENCE: Any absence authorized in writing by an
Employer under the Employer's standard personnel practices provided
that all persons under similar circumstances must be treated alike in
the granting of such Authorized Leaves of Absence and provided further
that the Employee returns or retires within the period of authorized
absence. An absence due to service in the Armed Forces of the United
States shall be considered an Authorized Leave of Absence provided
that the absence is caused
3
by war or other emergency, or provided that the Employee is
required to serve under the laws of conscription in time of
peace, and further provided that the Employee returns to
employment with the Employers within the period provided by law.
(d) BASE CONTRIBUTION RATE: The rate at which Basic Contributions and
Additional Pro-rata Contributions are allocated to Participant
Accounts for the Year with respect to Compensation at or below the
Integration Level.
(e) BASIC EMPLOYER CONTRIBUTIONS: Contributions of the Employers as
described in Section 5.2(b)(i).
(f) BASIC EMPLOYER CONTRIBUTION ACCOUNT: The separate account which shall
be maintained by the Committee for each Participant to reflect the
aggregate of all Basic Employer Contributions made on behalf of such
Participant under this Plan on or after the Effective Date and the
Participants' Qualified Nonelective Contribution Account and Qualified
Matching Contribution Account balances under this Plan or the
Participant's Post-1986 Basic Employer Contribution Account balance
under the USI Plan immediately prior to the Effective Date, together
with any earnings and losses thereon.
(g) COMPENSATION: Total gross pay less compensation attributable to the
following items: relocation allowances, imputed life insurance,
awards and prizes, non-qualified stock options, referral awards, other
pay classified under special pay number 21 as of the date hereof, car
loans, officer perks, disability non-taxable (year end), severance
pay, car allowances, and relocation-interest and taxes gross-up.
The annual Compensation of each Participant taken into account under
the Plan for any Plan Year shall not exceed $150,000, as adjusted for
changes in the cost of living as provided in section 401(a)(17) of the
Code. In determining the Compensation of a Participant for purposes
of this limitation, the rules of section 414(q)(6) of the Code shall
apply, except that in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants
of the Participant who have not attained age nineteen (19) before the
close of the year. If, as a result of the application of such rules
the adjusted annual Compensation Limit as defined in section
401(a)(17) of the Code is exceeded, the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined prior to the application of this
limitation.
(h) DISABILITY: A physical or mental condition which, in the judgment of
the Committee, based upon medical reports and other evidence
satisfactory to the Committee, presumably permanently prevents an
Employee from satisfactorily performing the Employee's usual duties
for the Employers or the duties of such other position or job which
the Employers make available to the Employee and for which such
Employee is
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qualified by reason of training, education or experience.
(i) DISTRIBUTING PLAN ACCOUNT: The separate account which shall be
maintained by the Committee for a Participant to reflect the monetary
value of the Participant's individual interest in the Trust
attributable to Elective Deferrals, Matching Company Contributions and
Optional Company Contributions made to the Distributing Plan on the
Participant's behalf, and any earnings or losses thereon.
(j) DISTRIBUTING SALARY DEFERRAL CONTRIBUTION SUBACCOUNT: The separate
subaccount which shall be maintained by the Committee for a
Participant to reflect the monetary value of the Participant's
individual interest in the Trust attributable to Elective Deferrals
made to the Distributing Plan on the Participant's behalf, and any
earnings or losses thereon.
(k) EMPLOYEE CONTRIBUTIONS: Contributions by the Participant as described
in Section 4.2 CONTRIBUTIONS BY PARTICIPANTS.
(l) EMPLOYEE CONTRIBUTION ACCOUNT: The separate account which shall be
maintained by the Committee for each Participant who elects to make
Employee Contributions pursuant to Section 4.2 CONTRIBUTIONS BY
PARTICIPANTS or Rollover Contributions pursuant to Section 5.5
ROLLOVER CONTRIBUTIONS or who had an Employee Contribution Account
Balance under the USI Plan or an After-Tax Deposit Account or a
Rollover Deposit Account balance under this Plan immediately prior to
the Effective Date, to reflect the aggregate of such Participant's
Employee Contributions under this Plan on or after the Effective Date
and the Participant's After-Tax Deposit Account and Rollover Deposit
Account Balance under this Plan or the Participant's Employee
Contribution Account balance under the USI Plan immediately prior to
the Effective Date, together with any earnings and losses thereon. A
separate account may be maintained for Employee Contributions made
under the USI Plan on or before January 1, 1987.
(m) EMPLOYER CONTRIBUTIONS: Contributions of the Employer as described in
Section 4.1 EMPLOYEE CONTRIBUTIONS.
(n) EMPLOYER CONTRIBUTION ACCOUNT: The separate account which shall be
maintained by the Committee for each Participant to reflect the
aggregate of all Employer Contributions other than Basic Employer
Contributions and Matching Employer Contributions made on behalf of
such Participant on or after the Effective Date and the Participant's
Company Basic Deposit Account balance under this Plan or Employer
Contribution Account balance under the USI Plan immediately prior to
the Effective Date, together with any earnings and losses thereon.
(o) EXCESS COMPENSATION: The portion, if any, of a Participant's
Compensation that exceeds eighty-five percent (85%) of the Taxable
Wage Base (sometimes referred to herein as
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the "Integration Level").
(p) FORFEITURE: The portion of a Participant's Employer Contribution
Account and Matching Employer Contribution Account which is forfeited
because of termination of employment before full vesting.
(q) INCOME: The net gain or loss of the Trust Fund from investments, as
reflected by interest payments, dividends, realized and unrealized
gains and losses on securities, other investment transactions and
expenses paid from the Trust Fund. In determining the Income of the
Trust Fund as of any date, assets shall be valued on the basis of
their then fair market value.
(r) INTEGRATION RATE: The greater of 5.4% or the percentage equal to the
portion of the rate of tax under section 3111(a) of the Code
attributable to old age insurance applicable as of the first day of
the Year multiplied by the fraction 5.4/5.7.
(s) MATCHING EMPLOYER CONTRIBUTIONS: Employer Contributions which match
(at percentages to be determined by the Employers) all or a portion of
the Salary Deferral Contributions made.
(t) MATCHING EMPLOYER CONTRIBUTION ACCOUNT: The separate account which
shall be maintained by the Committee for each Participant to reflect
the aggregate of all Matching Employer Contributions made on behalf of
such Participant under this Plan on or after the Effective Date and
the Participant's Company Matching Employer Contribution Account
balance under the USI Plan or Company Matching Deposit Account balance
under this Plan immediately prior to the Effective Date together with
any earnings and losses thereon.
(u) NORMAL RETIREMENT AGE: Age sixty-five (65).
PARTICIPATION: The period commencing as of the date the Employee became a
Participant and ending on the date employment with the Employers
terminated, except that, with respect to a Former Participant, limited
Participation in the Trust Fund Income continues until the Former
Participant's vested Account balance is distributed.
(w) PRE-1987 EMPLOYEE CONTRIBUTION ACCOUNT: The separate account
maintained to reflect Employee Contributions made under the USI Plan
prior to January 1, 1987.
(x) SALARY DEFERRAL CONTRIBUTIONS: Contributions described in Section 4.4
PARTICIPANT SALARY DEFERRAL.
(y) SALARY DEFERRAL CONTRIBUTION ACCOUNT: The separate account which
shall be maintained
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by the Committee for each Participant to reflect all Salary
Deferral Contributions made on behalf of such Participant
under this Plan on or after the Effective Date and the Participant's
Before-Tax Deposit Account balance under this Plan or the
Participant's Salary Deferral Contribution Account balance under the
USI Plan immediately prior to the Effective Date, together with any
earnings and losses thereon.
(z) SERVICE: A Participant's period of employment with the Employers
determined in accordance with Section 3.2 SERVICE.
(aa) TAXABLE WAGE BASE: The maximum amount of earnings for a Participant
which may as of the first day of the Year be considered wages for any
Year under section 3121(a)(1) of the Code.
OTHER DEFINITIONS:
(a) ALLOCATION DATE: December 31 of each year and such other dates as may
be established by the Company.
(b) CONTRIBUTION DATE: Such dates as selected by the Company for the
making of contributions accrued under the Plan which are within a
reasonable time following the fifteenth (15th) and last day of each
month of the Year and any such other date or dates as shall be
determined by the Board of Directors of the Company.
EFFECTIVE DATE: The merger of the Plan with the USI Plan and the provisions of
this amended and restated Plan are effective on March 1, 1996.
(d) ERISA: The Employee Retirement Income Security Act of 1974, as
amended from time to time.
(e) VALUATION DATE: Each day of the Year or such other date or dates
as may be established by the Company to assure proper
administration of the Plan. In no event shall there be less than
one (1) Valuation Date within any twelve (12) consecutive month
period. The Company may direct a special Valuation Date in order
to avoid prejudice either to continuing Participants or to
terminating Participants. Such special Valuation Date shall be
deemed equivalent to a regular Valuation Date. Adjustments
hereunder shall apply uniformly to all accounts hereunder.
YEAR: The twelve (12) month period commencing on January 1 and ending on
December 31.
II.5 CONSTRUCTION: The singular, where appearing in the Plan, may include the
plural, and the masculine gender shall be deemed to include the feminine
gender, unless the context clearly indicates to the contrary. Any headings
used herein are included for ease of reference only, and
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are not to be construed so as to alter any term of the Plan.
PARTICIPATION AND SERVICE
PARTICIPATION: Each Employee who was a Participant in the Plan or the USI Plan
on February 29, 1996, shall continue to participate in the Plan on March 1,
1996. Each other Employee shall become a Participant on the first day of
the month after the Employee has completed a consecutive six (6) month
period of employment with the Employers. Notwithstanding the foregoing
provisions of this Section, any Employee who is a member of a unit of
Employees which is covered by a collective bargaining agreement to which an
Employer is a party, shall not be a Participant unless such bargaining
agreement provides for such unit's participation; and any otherwise
eligible Employee or participant in a unit of Employees which is not
covered by a collective bargaining agreement to which an Employer is a
party, but which subsequently becomes so covered, shall continue to be
eligible to participate hereunder until and unless such unit is excluded
from Participation pursuant to collective bargaining. If a Participant
ceases to be eligible to participate in the Plan for any reason the
Participant shall not be eligible to share in any Employer Contributions
made as of any date after the Participant's eligibility ceases, but for all
other purposes the Participant's Accounts shall be held, administered and
distributed as provided in the Plan. After a termination of employment, a
rehired Employee's subsequent Participation in the Plan shall be subject to
the provisions of Section 3.3 PARTICIPATION AND SERVICE UPON REEMPLOYMENT.
SERVICE: A Participant's eligibility for benefits under the Plan shall be
determined by the Participant's period of Service. Subject to the
reemployment provisions of Section 3.3 PARTICIPATION AND SERVICE UPON
REEMPLOYMENT, a Participant's last period of continuous employment with the
Employers shall be recognized as Service hereunder. Service shall be
deemed to include years and fractional years of employment. Periods of
temporary illness or disability and Authorized Leaves of Absence shall not
be deemed as breaking continuity of employment and shall be counted as
periods of Service. Notwithstanding the foregoing, in the case of an
Employee who is absent from employment for maternity or paternity reasons,
an absence during the twelve (12) month consecutive period beginning on the
first anniversary of the first date of such absence shall not constitute a
break in employment for purposes of determining the Employee's Service.
For this purpose, an absence from employment for maternity or paternity
reasons, means an absence (a) by reason of the pregnancy of the Employee,
(b) by reason of the birth of a child of the Employee, (c) by reason of the
placement of a child with the Employee in connection with the adoption of
such child by the Employee, or (d) for purposes of caring for such child
for a period beginning immediately following such birth or placement.
Anything herein to the contrary notwithstanding, during the continuance of
any Authorized Leaves of Absence or periods of temporary illness or
disability the Employee's interest in the Trust shall nevertheless be held
for the Employee's benefit and the Employee shall continue as a Participant
in the Plan as if the Employee were in the active employment of the
Employer and Employer Contributions shall be allocated to the Accounts of
such Participant.
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III.2
PARTICIPATION AND SERVICE UPON REEMPLOYMENT: Except for the continuing
participation in Trust Fund Income of a Former Participant, Participation
in the Plan shall cease upon termination of employment with the Employers.
Termination of employment may have resulted from retirement, death,
voluntary or involuntary termination of employment, unauthorized absence,
or by failure to return to active employment with the Employers or to
retire by the date on which an Authorized Leave of Absence expired.
Upon reemployment of any person who had previously been employed by the
Employers the following rules shall apply in determining Participation in
the Plan and Service under Section 3.2 SERVICE:
(a) REEMPLOYMENT WITHIN ONE (1) YEAR: If an Employee is rehired within
the one (1) year period following the date of the Employee's
termination of employment, the Employee shall participate in the Plan
as of the first day of the month following the date of reemployment
or, if later, the date the Employee would have initially participated
in the Plan under the provisions of Section 3.1 PARTICIPATION had the
Employee not terminated employment. Reemployment within such one (1)
year period shall result in no break in employment and the period
after the Employee's termination of employment shall be counted as a
period of Service. In addition, if such Employee was a Participant
during the Employee's prior period of employment, the Employee may
also be entitled to a beginning Employer Contribution Account as
provided in Section 4.3 DISPOSITION OF FORFEITURES.
(b) REEMPLOYMENT AFTER ONE (1) YEAR: If an Employee is rehired more than
one (1) year after the Employee's termination of employment, the
Employee shall participate in the Plan as of the date the Employee
meets the eligibility requirements for Participation under the
provisions of Section 3.1 PARTICIPATION.
If the reemployed Employee was a Participant in the Plan when the
Employee's prior period of employment terminated, any Service attributable
to the Employee's prior period of employment shall be reinstated as of the
date of the Employee's reparticipation. If the reemployed Employee was not
a Participant in the Plan during the Employee's prior period of employment,
any Service attributable to the Employee's prior period of employment shall
be cancelled and the Employee shall receive no Service credit for the
period of termination of employment as of the date that the length of the
Employee's period of employment equalled the greater of five (5)
consecutive years of breaks in employment or the length of the Employee's
prior period of employment.
TRANSFERS:
(a) A Participant shall receive Service for employment by an Employer,
whether or not such employment provided eligibility for inclusion in
the Plan, or by any corporation which is
9
a member of the controlled group of corporations of which the Employer
is a part or by any trades or businesses (whether or not incorporated)
which are under common control (as provided in sections 414(b), (c) or
(o) of the Code) or constitute an affiliated service group (as defined
in Section 414(m) of the Code). Notwithstanding the previous
sentence, all such employment shall be determined in accordance with
the reemployment provisions of Section 3.3 PARTICIPATION AND SERVICE
UPON REEMPLOYMENT.
(a)
(b) If a Participant is transferred to employment with a member of the
controlled group of which the Employer is a part to a position which
is not eligible for participation in the Plan, the Participant's
Participation under the Plan shall be suspended, provided, however,
that during the period of employment in such ineligible position: (i)
subject to the reemployment provisions of Section 3.3 PARTICIPATION
AND SERVICE UPON REEMPLOYMENT, Service for vesting purposes shall
continue to accrue, (ii) the Participant's Employer Contribution
Account, Basic Employer Contribution Account and Matching Employer
Contribution Account shall receive no Employer Contributions under
Sections 5.2(b), (iii) the Participant shall continue to participate
in Income allocations pursuant to Section 5.2(a) and (iv) the
provisions of Article VI BENEFITS shall continue to apply.
(c) In the event of transfer as described in the foregoing subparagraph
(b) to eligible employment by an Employer without a break in
employment, the prior period of employment shall be recognized in
determining eligibility to participate in the Plan in accordance with
Section 3.1 PARTICIPATION.
(d) Transfer between Employers shall not interrupt Service under the Plan.
CONTROLLED GROUPS: For the purposes of determining Service for eligibility,
vesting and compliance with certain top-heavy rules, all employees of all
corporations which are members of a controlled group of corporations (as
defined in section 414(b) of the Code) and all employees of all trades or
businesses (whether or not incorporated) which are under common control (as
defined in section 414(c) of the Code) and all employees of any other
entity required to be aggregated pursuant to regulations under section
414(o) of the Code will be treated as employed by a single employer.
AFFILIATED SERVICE GROUPS: For the purpose of determining Service for
eligibility, vesting and compliance with certain top-heavy rules, all
employees of all members of an affiliated service group (as defined in
section 414(m) of the Code) will be treated as employed by a single
employer.
LEASED EMPLOYEES: For the purpose of determining Service for eligibility,
vesting, and compliance with certain top-heavy rules, all leased employees
(as defined in section 414(n) of the Code) providing services to the
Employers will be treated as employed by the Employers. A leased
10
employee will not be treated as employed by the Employers under this
Section if leased employees constitute less than twenty percent (20%) of
the Employers' non-highly compensated work force within the meaning of
section 414(n)(5)(C)(ii) of the Code, and the leased employee is covered
by a plan described in section 414(n)(5) of the Code.
CONTRIBUTIONS AND FORFEITURES
EMPLOYER CONTRIBUTIONS: The Employers may make a contribution to the Plan for
each contribution period in an amount equal to the sum of the "Basic
Contribution", "Excess Contribution", "Additional Pro-rata Contribution",
and "Matching Employer Contribution" as herein defined. For each
contribution period the Board of Directors of the Company may determine an
amount that may be contributed to the Plan to be allocated to the Accounts
of Participants on the basis of total Compensation for the contribution
period and pursuant to subsection 5.2(b)(i) (the "Basic Contribution") and
pursuant to subsection 5.2(b)(iii) (the "Additional Pro-rata Contribution")
and an amount that may be contributed to the Plan to be allocated to the
Accounts of Participants on the basis of Excess Compensation for the
contribution period pursuant to subsection 5.2(b)(ii) (the "Excess
Contribution"); provided, however, that the Employers' Excess Contributions
for a Year shall not exceed the lesser of the Integration Rate or Base
Contribution Rate times all eligible Participants' Excess Compensation
during the Year. In addition, for each contribution period the Board of
Directors of the Company may determine an amount that may be contributed to
the Plan as Matching Employer Contributions. The amount, if any,
contributed as Matching Employer Contributions shall equal a percentage,
determined by the Board of Directors of the Company, of all or a portion,
determined by the Board of Directors of the Company, of Salary Deferral
Contributions made during the contribution period. All Salary Deferral
Contributions for a Year shall be paid to the Trustee in no event later
than the earlier of (a) ninety (90) days following the date of the salary
deferral with respect to which the Salary Deferral Contribution is made or
(b) not later than the time prescribed by law for the filing of a Federal
income tax return, including any extensions which have been granted for
such filing. All other contributions of the Employers for a Year shall be
paid to the Trustee, and payment shall be made not later than the time
prescribed by law for the filing of a Federal income tax return, including
any extensions which have been granted for such filing.
CONTRIBUTIONS BY PARTICIPANTS:
(a) Each Participant may elect to contribute to the Trust Fund in each
Year while a Participant an amount equal to between one percent (1%)
and ten percent (10%) of the Participant's Compensation. A
Participant may commence or resume making Employee Contributions by
filing a written notice with the Committee at least thirty (30) days
prior to the date such Employee Contributions are to commence or
resume. In addition, a Participant may contribute in any Year an
amount which, together with all other Employee Contributions made by
that Participant in prior Years, will cause the
11
Participant's total Employee Contributions not to exceed ten percent
(10%) of the Compensation received by the Participant for all Years
that the Participant has been a Participant in the Plan. All Employee
Contributions are subject to the continuing approval of the Committee
and may be revoked or suspended at any time if the Company determines
that such revocation or suspension is necessary to ensure that (a) a
Participant's Annual Additions for any Year will not exceed the
limitations of Section 5.3 MAXIMUM ADDITIONS or (b) violate the
nondiscrimination tests of Section 401(m) of the Code. Any revocation
or suspension of Employee Contributions made by an Employer pursuant
to this subsection in order to ensure compliance with the
nondiscrimination tests of Section 401(m) of the Code shall be made
pursuant to the provisions of Section 5.4 NONDISCRIMINATION
REQUIREMENTS.
(a)
(b) A Participant who elects to contribute may make voluntary Employee
Contributions:
(i) by payroll deductions. The Employer shall deduct each
Participant's Employee Contribution, in integral
percentages, from the Participant's Compensation for each
pay period as authorized by the Participant in writing on a
form approved by the Employer; or
(ii) by a series of quarterly cash payments as specified by the
Participant in writing on a form approved by the Employer;
or
(iii) by an annual lump-sum contribution in each Year while a
Participant. A lump-sum contribution shall be made in cash
as specified by the Participant in writing on a form
approved by the Employer.
As soon as practicable, the Employer shall pay the amounts received to the
Trustee to be held and administered in trust pursuant to the Trust.
(c) The Employer shall direct the Committee to establish and maintain an
Employee Contribution Account in the name of each Participant who
elects to make Employee Contributions.
(d) A Participant may change the amount or percentage of the Participant's
Employee Contributions with respect to any future Employee
Contributions by filing another authorization form with the Committee
to be effective on the first day of any subsequent month.
(e) A Participant may elect to discontinue Employee Contributions as of
any pay period during the Year. Such notification must be submitted
to the Committee, in a form approved by the Employer, prior to the
date upon which the payroll preparation commences for the pay period.
In the event of such a discontinuance, a Participant may
12
resume making Employee Contributions as of the first day of any
subsequent month by filing written notice with the Committee.
(f) A Participant may elect in writing to withdraw the entire value of the
Participant's Employee Contribution Account, or any portion of the
Participant's Employee Contribution Account but not less than five
hundred dollars ($500). Such request must be submitted at least
ninety (90) days prior to the Valuation Date immediately preceding the
withdrawal and must be in a form approved by the Employer. In the
event of such withdrawal, the Participant shall not be allowed to make
any Employee Contributions until the first day of any subsequent month
after the Participant has filed a written notice with the Committee
and at least thirty (30) days has elapsed since the date of
withdrawal. The value of the Employee Contribution Account for
purposes of this subsection (f), shall be determined as of the
Valuation Date immediately preceding the date of the withdrawal.
DISPOSITION OF FORFEITURES: Upon termination of employment, a Participant's
Forfeiture, if any, shall be utilized as provided in Section 5.2(c) as of
the Contribution Date following the date of the Participant's termination
of employment. If the Participant returns to the employ of an Employer
before five (5) consecutive one (1) year periods of absence, the
Participant shall have the right to repay the entire amount distributed to
the Participant upon the Participant's return to the employ of an Employer,
provided such repayment is prior to the earlier of the Participant's
incurring five (5) consecutive one (1) year periods of absence or five (5)
years after the date of such Participant's reemployment.
Upon such repayment, the amount of the Forfeiture shall be reinstated in
full, unadjusted by any gains or losses, in the Participant's new Employer
Contribution Account. Such restoration shall be made out of the current
year's Forfeitures and, if they are insufficient, out of the Employer
Contributions and, if they are insufficient, out of the current Year's
earnings.
PARTICIPANT SALARY DEFERRAL:
(a) A Participant may, pursuant to a uniform and nondiscriminatory
procedure established by the Committee, elect to enter into a written
salary deferral agreement with the Employer. The terms of any such
salary deferral agreement shall provide that the Participant agrees to
accept a deferral in salary from the Employer equal to a stated
percentage or amount of the Participant's Compensation not to exceed
sixteen percent (16%) of such Compensation. In consideration of such
agreement, the Employer will make a Salary Deferral Contribution to
the Participant's Salary Deferral Contribution Account on behalf of
the Participant for such Year in an amount equal to the total amount
by which the Participant's salary from the Employer was deferred
during the Year pursuant to the salary deferral agreement.
13
(b) Amounts credited to a Participant's Salary Deferral Contribution
Account shall be one hundred percent (100%) vested and nonforfeitable
at all times.
(c) Further, salary deferral agreements shall be governed by the following
provisions:
(i) An Employer may amend or revoke its salary deferral
agreement with any Participant at any time, if the Company
determines that such revocation or amendment is necessary to
ensure that (A) a Participant's Annual Additions for any
Year will not exceed the limitations of Section 5.3 MAXIMUM
ADDITIONS, (B) the nondiscrimination tests of section 401(k)
of the Code are met for such Year, or (C) no more than seven
thousand dollars ($7,000), as adjusted by the Secretary of
Treasury, is deferred by any individual for the individual's
taxable year. Any amendment or revocation of salary
deferral agreements made by the Employers pursuant to this
subsection in order to ensure compliance with the
nondiscrimination tests of section 401(k) of the Code shall
be made pursuant to the provisions of Section 5.4
NONDISCRIMINATION REQUIREMENTS.
(ii) Except as provided in the salary deferral agreement itself,
a salary deferral agreement applicable to any given Year,
once made, may be revoked or amended prospectively by the
Participant in accordance with uniform and nondiscriminatory
procedures established by the Committee.
Withdrawals from the Participant's Salary Deferral Contribution Account or
Distributing Salary Deferral Contribution Subaccount shall be governed
by the following rules:
(i) No amounts may be withdrawn by a Participant from the
Participant's Salary Deferral Contribution Account or
Distributing Salary Deferral Contribution Subaccount prior
to termination of employment with the Employers, unless the
Participant has either attained age fifty-nine and one-half
(59-1/2) or is able to demonstrate financial hardship.
Pursuant to uniform and nondiscriminatory procedures
established by the Committee, a Participant who has either
attained age fifty-nine and one-half (59-1/2) or is able to
demonstrate financial hardship may elect to withdraw up to
an amount not less than five hundred ($500.00) and not more
than the aggregate of the Salary Deferral Contributions
under this Plan, the Elective Deferral under the
Distributing Plan and the Before-Tax Deposits under the Plan
prior to June 24, 1992 and the Salary Deferral Contributions
under the USI Plan prior to the Effective Date made by the
Participant, less the aggregate of such amounts previously
14
withdrawn by the Participant. A Participant's withdrawal
request will require the consent of the Committee.
Committee consent for withdrawal because of financial
hardship shall be given only if, under uniform and
nondiscriminatory procedures, the Committee determines that
the requirements of subparagraph (ii) are met. In
determining whether the requirements of subparagraph (ii)
are met, the Committee may rely upon the Participant's
written representations if such reliance is reasonable. Any
request for withdrawal pursuant to this subparagraph (i)
shall be made to the Committee in writing. Any Participant
who makes or has made withdrawals from the Participant's
Salary Deferral Contribution Account or Distributing Salary
Deferral Contribution Subaccount shall continue as a
Participant in the Plan but will not be allowed to have
Salary Deferral Contributions made on the Participant's
behalf for twelve (12) months from the date of withdrawal.
(ii) For the purposes of subparagraph (i) of this subsection (d),
a withdrawal is on account of financial hardship if the
withdrawal is made on account of an immediate and heavy
financial need of the Participant and is necessary to
satisfy the immediate and heavy financial need.
(A) A withdrawal is deemed made on account of an immediate
and heavy financial need of the Participant if the
withdrawal is on account of:
(1) Medical expenses described in section 213(d) of
the Code incurred by or necessary for the
Participant, the Participant's spouse, or any
dependents of the Participant;
Purchase (excluding mortgage payments) of a principal
residence for the Participant;
(3) Payment of tuition and related educational fees
for the next twelve (12) months of post-secondary
education for the Participant or the Participant's
spouse, children, or dependents; or
(4) Payments to prevent the eviction of the
Participant from the Participant's principal
residence or the foreclosure on the mortgage of
the Participant's principal residence.
(B) A withdrawal is deemed necessary to satisfy an
immediate and
15
heavy financial need if all of the following
requirements are met:
(1) The withdrawal is not in excess of the amount of
the immediate and heavy financial need of the
Participant (including amounts necessary to pay
any federal, state or local income taxes or
penalties reasonably anticipated to result from
the distribution);
(2) The Participant has obtained all distributions,
other than hardship withdrawals, and all
nontaxable loans currently available under all
plans maintained by the Employers;
(3) The Plan and all other plans of the Employers will
not permit any Salary Deferral Contributions or
Employee Contributions on behalf of the
Participant for twelve (12) months after receipt
of the withdrawal by the Participant; and
(4) The Plan and all other plans of the Employers will
not permit any Salary Deferral Contributions for
the Participant's taxable year immediately
following the taxable year of the withdrawal in
excess of the applicable limit under section
402(g) for such next taxable year less the amount
of such Participant's Salary Deferral
Contributions for the taxable year of the
withdrawal.
SPECIAL RULES FOR OWNER-EMPLOYEES:
(a) Where the Plan provides contributions for one or more Owner-Employees
who control both the business for which this Plan is established and
one or more other trades or businesses, this Plan and the plan or
plans established for the other trades or businesses must satisfy
sections 401(a) and 401(d) of the Code for employees of this and all
other controlled trades or businesses.
(b) Where the Plan provides contributions for one or more Owner-Employees
who control one or more other trades or businesses, the employees of
the other trades or businesses must be included in a plan which
satisfies sections 401(a) and 401(d) of the Code, and which provides
contributions or benefits not less favorable than those provided to
Owner-Employees under this Plan.
16
(c) For purposes of this Section 4.5, one or more Owner-Employees will be
considered to control a trade or business if one or more Owner-
Employees (i) own the entire interest in an unincorporated trade or
business, or (ii) own more than fifty percent (50%) of either the
capital interest or the profits interest in a partnership. For
purposes of the preceding sentence, one or more Owner-Employees shall
be treated as owning an interest in a partnership which is owned,
directly or indirectly, by a partnership which one or more such Owner-
Employees are considered to control for purposes of this subsection
(c).
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
INDIVIDUAL ACCOUNTS: The Committee shall create and maintain adequate records
to disclose the interest in the Trust of each Participant, Former
Participant, and Beneficiary. Such records shall be in the form of
individual Accounts, and credits and charges shall be made to such Accounts
in the manner herein described. A Participant shall have as many as seven
(7) separate Accounts, an Employer Contribution Account, a Basic Employer
Contribution Account, an Employee Contribution Account, an Employee
Contribution Account for Pre-1987 Employee Contributions, a Salary Deferral
Contribution Account, a Matching Employer Contribution Account and a
Distributing Plan Account. The amount, if any, in a Participant's Employee
Contribution Account, Basic Employer Contribution Account, Salary Deferral
Contribution Account and Distributing Plan Account shall be one hundred
percent (100%) vested and nonforfeitable at all times. The maintenance of
individual Accounts is only for accounting purposes, and a segregation of
the assets of the Trust Fund to each Account shall not be required.
Distributions made from an Account shall be charged to the Account as of
the date paid.
ACCOUNT ADJUSTMENTS: The Accounts of Participants, Former Participants and
Beneficiaries shall be adjusted in accordance with the following:
(a) INCOME: As of each Valuation Date, the Income of the Trust Fund since
the last Valuation Date shall be allocated among the Accounts of
Participants, Former Participants and Beneficiaries by adjusting the
stated value of each Account to reflect its actual value as of the
current Valuation Date. The Company shall establish a reasonable
accounting method which shall carry out the intent of the preceding
sentence.
As of each Valuation Date, the Trustee shall value the Trust Fund
excluding earmarked investments. The Trustee shall determine the fair
market value of assets of the Trust in compliance with this Section
and the principles of Section 3(26) of ERISA and regulations issued
pursuant thereto. Earmarked investments shall be valued separately,
at the same time and by the same method as hereinabove provided. All
gains and losses on investments earmarked to a Participant's Account
shall be credited to that Account.
The value of an Account for all purposes of the Plan shall be its
value as last determined under this Section on or before the date in
question, increased by contributions thereafter
17
credited to the Account and decreased by amounts thereafter
withdrawn or distributed from the Account.
(b) EMPLOYER CONTRIBUTIONS: As of each Allocation Date, the Employer
Contributions for the contribution period shall be allocated among
those Participants who were in the employ of an Employer on the
Allocation Date (or if necessary for the Plan to meet the requirements
of Section 410(b) of the Code, such Participants with the highest
number of Hours of Service with the number of Participants as required
to meet the requirements of Section 410(b) of the Code, whether or not
such Participants are employed as of the Allocation Date) (hereinafter
referred to as "eligible Participant"). Such allocation shall be made
in accordance with the following:
(i) BASIC ALLOCATION: First, each Employer's Basic Contribution
for the contribution period, if any, shall be allocated to
the Basic Employer Contribution Accounts of all eligible
Participants who were employed by such Employer according to
the ratio that each eligible Participant's Compensation for
the contribution period bears to the total Compensation of
all eligible Participants during the contribution period.
(ii) EXCESS ALLOCATION: Second, each Employer's Excess
Contribution for the contribution period, if any, shall be
allocated to the Employer Contribution Accounts of all
eligible Participants who were employed by such Employer and
who earned Excess Compensation. Such allocation shall be
made on a pro-rata basis according to the ratio that each
eligible Participant's Excess Compensation bears to the
total Excess Compensation for the contribution period of all
eligible Participants during the contribution period.
However, the portion of the Employer Contributions to be
allocated pursuant to the subparagraph shall not exceed the
Integration Rate times all eligible Participants' Excess
Compensation during the Year. If, after the above
allocations are made, the rate at which such allocation of
Employer Contributions is made with respect to each
Participant's Excess Compensation exceeds the Base
Contribution Rate, Employer Contributions to be allocated
pursuant to this subparagraph shall be reduced (and, at the
Employers' election, the Base Contribution under
subparagraph (i) above or the Additional Pro-rata
Contribution under subparagraph (iii) below shall be
increased) until the rate of allocation under this
subparagraph equals the Base Contribution Rate.
(ii) V(x) ADDITIONAL PRO-RATA ALLOCATION: Third, each Employer's
Additional Pro-rata Contribution for the contribution
period, if any, shall be allocated to the Employer
Contribution Accounts of all eligible
18
Participants who were employed by such Employer according
to the ratio that each eligible Participant's
Compensation for the contribution period bears to the
total Compensation of all eligible Participants during
the contribution period.
(ii) V(xi) MATCHING EMPLOYER ALLOCATION: Fourth, each
Employer's Matching Employer Contribution for the
contribution period, if any, shall be allocated to the
Matching Employer Contribution Accounts of all eligible
Participants who made Salary Deferral Contributions for the
contribution period and were employed by such Employer in
accordance with uniform and nondiscriminatory procedures
established by the Committee and in a manner proportionate
to all or a portion of the Salary Deferral Contributions
made for such contribution period as determined by the Board
of Directors of the Company.
(c) FORFEITURES: As of the end of each Year, Forfeitures which have
become available for distribution under Section 4.3 DISPOSITION OF
FORFEITURES during such Year shall first be utilized to restore any
Forfeitures required to be reinstated pursuant to Section 4.3 and any
remaining Forfeitures will be used to reduce the Employer
Contributions to the Plan.
(d) ALLOCATION OF EMPLOYEE CONTRIBUTIONS: As of each Contribution Date,
after the allocation of Income, Employee Contributions made to the
Plan by each Participant shall be credited to the Participant's
Employee Contribution Account.
(e) ALLOCATION OF SALARY DEFERRAL CONTRIBUTIONS: As of each Contribution
Date, after the allocation of Income, Salary Deferral Contributions
made to the Plan on behalf of each Participant shall be credited to
the Participant's Salary Deferral Contribution Account.
MAXIMUM ADDITIONS: The "Limitation Year" referred to in this Section 5.3 shall
be the twelve (12) month period beginning on January 1 and ending on
December 31.
(a) The sum of the Additions to a Participant's Accounts in any Year shall
not exceed the lesser of (A) thirty thousand dollars ($30,000), or
such other amount as may be established by the Secretary of the
Treasury pursuant to section 415 of the Code, or (B) twenty-five
percent (25%) of the Participant's compensation as defined under
section 415 of the Code during the Year. The compensation limitation
referred to in (B) shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or section 419A(f)(2)
of the Code) which is otherwise treated as an Addition under section
415(l)(1) or section 419A(d)(2) of the Code.
(b) In the event that such Additions to a Participant's Accounts in any
Year are in excess of the maximum limits, and if sufficient correction
has not been made under any other plan
19
in which the Participant participates, then to the extent necessary
to bring the Additions within the required limits, first, the
Participant's own Employee Contributions will be returned to the
Participant and, second, the Salary Deferral Contributions will be
returned to the Participant. If the Additions to such
Participant's Accounts shall continue in excess of the maximum
limits, the Employer Contribution otherwise allocable to the
Participant shall be allocated to a suspense account which shall
not share in the allocation of Income under Section 5.2(a). Amounts
in such a suspense account will be used to reduce the next Employer
Contribution as provided by Internal Revenue Service Regulation
1.415-6(b)(6).
(c) For purposes of this Section, all defined benefit plans maintained by
the Employers, whether or not terminated, shall be considered as one
defined benefit plan and all defined contribution plans maintained by
the Employers, whether or not terminated, shall be considered as one
defined contribution plan if a Participant is a participant in both
plans.
(d) In the event that any Participant under this Plan is also a
participant in any defined benefit plan maintained by the Employers,
then for any year, the sum of the "Defined Benefit Plan Fraction" for
such year and the "Defined Contribution Plan Fraction" for such year
shall not exceed 1.0. The "Defined Benefit Plan Fraction" for any
year is a fraction, the numerator of which is the projected annual
benefit of the Participant under all defined benefit plans under which
the Participant has or may have a right to receive benefits
(determined as of the close of the Limitation Year) and the
denominator of which is the lesser of the maximum dollar limit
allowable for such Limitation Year times 1.25, or the percentage of
compensation limit (one hundred percent (100%) of the average
compensation paid during the Employee's highest three consecutive
years of Participation) times 1.4. Notwithstanding the foregoing, if
the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or more
defined benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under such
plans which the participant had accrued as of the close of the last
Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
section 415 of the Code for all Limitation Years before January 1,
1987. The "Defined Contribution Plan Fraction" for any year is a
fraction, the numerator of which is the sum of the Annual Additions to
the Participant's Account as of the close of that Limitation Year and
the denominator of which is the lesser of the sum of the maximum
dollar amount of Annual Additions to such Account which could have
been made under section 415(c) of the Code for such year, and for each
prior Limitation Year of service with the Employer, times 1.25, or the
percentage of compensation limit for such year times 1.4. If it is
determined that, as a result of this
20
limitation, there must be a reduction in the Participant's combined
benefits, then the Employer shall make any necessary reduction
under the defined benefit plan.
(e) Notwithstanding anything herein to the contrary, no allocation shall
be made to any Participant's Account for any Limitation Year in excess
of the limitations of section 415 of the Code, which limitations, as
amended from time-to-time, are incorporate herein by reference.
NONDISCRIMINATION REQUIREMENTS:
(a) For purposes of this Section, the terms listed below shall have the
meanings indicated:
(i) ADP: A fraction, the numerator of which is the amount of
the Salary Deferral Contributions actually paid on behalf of
that Participant to the Participant's Salary Deferral
Contribution Account (including Excess Deferrals of Highly
Compensated Employees, but excluding (A) Excess Deferrals of
nonhighly compensated employees that arise solely from
Elective Deferrals made under the Plan or other plans of the
Employer and (B) Elective Deferrals that are taken into
account in the Contribution Percentage provided the ADP
Requirement is satisfied both with and without exclusion of
such Elective Deferrals) for the Year and, to that extent so
elected by the Employer, the Basic Employer Contribution
made to the Participant's Basic Employer Contribution
Account for the Year and the denominator of which is the
Participant's Compensation for the Year. The ADP for any
group of Participants is equivalent to the average of the
ADPs of all Participants in that group.
If two or more plans which include cash or deferred
arrangements are considered one plan for purposes of the
nondiscrimination requirements of section 401(a)(4) of the
Code or the eligibility requirements of section 410(b) of
the Code, the cash or deferred arrangements included in such
plans shall be treated as one plan for purposes of
determining the ADP. In the event any Highly Compensated
Employee participates under two or more cash or deferred
arrangements of the Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred
arrangement for purposes of determining the ADP with respect
to such Employee. Notwithstanding the foregoing, certain
plans shall be treated as separate if mandatorily
disaggregated under regulations under section 401(k) of the
Code.
(ii) COMPENSATION: Any definition of compensation as determined
under section 414(s) of the Code selected by the Employer
and consistently
21
taken into account with respect to all Employees to
determine compliance with the requirements of this
Section for the applicable determination period.
(iii) ELECTIVE DEFERRAL: With respect to a Participant, the
sum of (A) any employer contribution under a qualified cash
or deferred arrangement (as defined in section 401(k) of the
Code) to the extent not includable in gross income for the
taxable year under section 402(e)(3) of the Code (determined
without regard to section 402(g) of the Code); (B) any
employer contribution to the extent not includable in gross
income for the taxable year under section 402(h)(1)(B) of
the Code (determined without regard to section 402(g) of the
Code); and (C) any employer contribution to purchase an
annuity contract under section 403(b) of the Code under a
salary reduction agreement (within the meaning of section
3121(a)(5)(D) of the Code). Elective Deferrals shall not
include any deferrals properly distributed as excess annual
additions.
(iv) EXCESS CONTRIBUTIONS: With respect to any Year, the excess
of: (A) the aggregate amount of Salary Deferral
Contributions and, to the extent elected by the Employer,
Basic Employer Contributions actually paid over to the Trust
on behalf of Highly Compensated Employees who are
Participants for such Year, over (B) the maximum amount of
such contributions permitted as determined under subsection
(b) of this Section (determined by reducing Salary Deferral
Contributions made on behalf of Highly Compensated Employees
who are Participants in the order of ADP beginning with the
highest ADP).
(v) EXCESS DEFERRAL: The amount of a Participant's Elective
Deferrals in excess of seven thousand dollars ($7,000), as
adjusted by the Secretary of the Treasury, for a calendar
year. Excess Deferrals, together with any income allocable
to such deferrals, may be distributed from the Plan pursuant
to a uniform and nondiscriminatory procedure established by
the Employer. A Participant may assign to the Plan any
Excess Deferrals made during the taxable year of the
Participant by notifying the Plan Administrator on or before
March 1 following the close of the year in which the Excess
Deferrals were made of the amount of Excess Deferrals to be
assigned to the Plan. A Participant is deemed to notify the
Plan Administrator of any Excess Deferrals that arise by
taking into account only those Excess Deferrals made to the
Plan and any other plans of the Employer.
(vi) FAMILY: With respect to any Employee, such Employee's
spouse and
22
lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants. A Family member who is
excluded for purposes of determining the number of
Employees in the Top-Paid Group shall, however, be
aggregated with a Highly Compensated Employee who is
either a five percent (5%) owner or who is in the group
consisting of the ten (10) Highly Compensated Employees
paid the greatest Compensation during the Year as
described herein in the definition of Highly Compensated
Employee.
(vii) HIGHLY COMPENSATED EMPLOYEE: Any Employee who:
(A) During the Year or the preceding Year was at any time
an owner (or one considered to own within the meaning
of section 318 of the Code) of more than a five percent
(5%) interest in the Employer;
(B) During the preceding Year (1) received Compensation
from the Employer in excess of seventy-five thousand
dollars ($75,000) (as adjusted from time to time); (2)
was at any time an Officer, as hereinafter defined; or
(3) received Compensation from the Employer in excess
of fifty thousand dollars ($50,000) (as adjusted from
time to time) and was among the Top-Paid Group of
Employees for such Year; or
(C) During the Year was among the one hundred (100) most
highly compensated Employees and (1) received
Compensation from the Employer in excess of seventy-
five thousand dollars ($75,000) (as adjusted from time
to time); (2) was an Officer, as hereinafter defined;
or (3) received Compensation from the Employer in
excess of fifty thousand dollars ($50,000) (as adjusted
from time to time) and was among the Top-Paid Group of
employees during such year.
(D) If the Employer elects, "Highly Compensated Employee"
may be defined as any Employee who during the Year or
the preceding Year (1) was at any time an owner (or one
considered to own within the meaning of section 318 of
the Code) of more than a five percent (5%) interest in
the Employer; (2) was at any time an Officer as
hereinafter defined; or (3) received Compensation from
the Employer in excess of fifty thousand dollars
($50,000) (as adjusted from time to time).
23
In the determination of a Highly Compensated Employee, the
following rules shall apply:
(A) An Employee who is a member of the Family of either a
five percent (5%) owner, as described above, or of a
Highly Compensated Employee in the group consisting of
the ten (10) Highly Compensated Employees paid the
greatest Compensation during the Year and such Highly
Compensated Employee who is either a five percent (5%)
owner or who is in the group consisting of the ten (10)
Highly Compensated Employees paid the greatest
Compensation during the Year shall be considered as a
single Highly Compensated Employee hereunder.
(B) A former Employee shall be treated as a Highly
Compensated Employee if such former Employee was Highly
Compensated when (A) such Employee separated from
service, or (B) at any time after the Employee attained
age fifty-five (55).
(viii) LOWER PAID EMPLOYEES: Employees who are eligible to
participate in the Plan who are not Highly Compensated
Employees.
(ix) OFFICER: An individual who at any time during the Year, or
during the preceding Year, was at any time an individual
having the authority of an officer of the Employer and
received Compensation for the Year greater than fifty
percent (50%) of the dollar limit under section 415(b)(1)(A)
of the Code for the calendar year in which such Year ends
(however, no more than the fifty (50) Employees (or, if
lesser, the greater of three (3) Employees or ten percent
(10%) of all Employees)) who earned the highest annual
Compensation during the Year, or the preceding Year, shall
be treated as Officers; provided that the highest paid
officer of the Company for any such Year shall be treated as
described in this subparagraph if for any Year no officer of
the Employer otherwise meets the requirements of an Officer
described herein.
TOP-PAID GROUP: For any Year an Employee is in the Top-Paid Group
if such Employee is in the group consisting of the top
twenty percent (20%) of the Employees when determined on the
basis of Compensation paid for such Year. For purposes of
determining the number of Employees in the Top-Paid Group,
the following Employees shall be excluded:
(A) Employees who have not completed six (6) months of
service;
24
(B) Employees who normally work less than seventeen and
one-half (17-1/2) hours per week;
(C) Employees who normally work during not more than six
(6) months during any Year;
(D) Except to the extent provided in regulations, Employees
who are included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a
collective bargaining agreement between Employee
representatives and the Employer; and
(E) Employees who are nonresident aliens and who receive no
earned income (within the meaning of section 911(d)(2)
of the Code) from the Employer which constitutes income
from sources within the United States (within the
meaning of section 861(a)(3) of the Code).
(b) NONDISCRIMINATION TEST FOR SALARY DEFERRAL CONTRIBUTIONS: In no event
may the ADP of the Highly Compensated Employees who are eligible to
participate in the Plan exceed in any Year (i) 2 times the ADP of the
Lower Paid Employees who are Participants if the Lower Paid Employees'
ADP is less than or equal to two percent (2%); (ii) the ADP of the
Lower Paid Employees plus two percent (2%) (or such lesser amount as
the Secretary of the Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any Highly
Compensation Employee) if the Lower Paid Employees' ADP is greater
than two percent (2%) but less than eight percent (8%); or (iii) 1.25
times the ADP of the Lower Paid Employees if the Lower Paid Employees'
ADP is eight percent (8%) or more ("ADP Requirement").
In the event Excess Contributions exist after the determination of the
ADP Requirement, the amount, if any, of such Excess Contributions for
such Year shall generally be distributed together with any income
allocable to such contributions within two and one-half (2-1/2) months
after the end of the Year, to Participants on whose behalf such Excess
Contributions were made for such Year, but in no event shall such
Excess Contributions and income be distributed later than the end of
the Year following the Year in which such Excess Contributions were
made. Excess Contributions of Participants who are members of a
Family and are treated as a single Highly Compensated Employee shall
be allocated among such Participants in the same proportion as the
portion of the numerator of the ADP attributable to each Family member
bears to the entire numerator of the ADP determined by treating such
Family members as a single Highly Compensated Employee.
25
Distribution of Excess Contributions, if any, for any Year shall be
made to Highly Compensated Employees who are Participants by leveling
the highest ADP in accordance with Treas. Reg. Section 1.401(k)-
l(f)(2) and subsection (c) until the nondiscrimination test set forth
in the first sentence of this subsection is met. Notwithstanding the
foregoing, the Employer may amend or revoke its salary deferral
agreements with Highly Compensated Employees who are Participants
pursuant to Section 4.4 PARTICIPANT SALARY DEFERRAL to the extent
necessary to ensure compliance with the ADP Requirement including, but
not by way of limitation, to recharacterize as Employee Contributions
to be added to the Employee Contribution Account of any such
Participant, the amount of any Excess Contributions necessary to
ensure such compliance.
(c) LEVELING METHOD. The amount of Excess Contributions or Excess
Aggregate Contributions for a Highly Compensated Employee for a Year
is to be determined by the following leveling method, under which the
ADP or Contribution Percentage, respectively, of the Highly
Compensated Employee with the highest ADP or Contribution Percentage,
respectively, is reduced to the extent required to:
(i) Enable the arrangement to satisfy the ADP test or
Contribution Percentage test, respectively, or
(ii) Cause such Highly Compensated Employee's ADP or Contribution
Percentage, respectively, to equal the ratio of the Highly
Compensated Employee with the next highest ADP or
Contribution Percentage, respectively.
This process must be repeated until the Plan satisfies the ADP and
Contribution Percentage tests. For each Highly Compensated Employee,
the amount of Excess Contributions is equal to the total Salary
Deferral Contributions and, to the extent elected by the Employer, the
Basic Employer Contributions made on behalf of the Highly Compensated
Employee (determined prior to the application of this subsection (c))
minus the amount determined by multiplying the Highly Compensated
Employee's ADP (determined after application of this subparagraph) by
the Participant's Compensation used in determining such ratio. For
each Highly Compensated Employee, the amount of Excess Aggregate
Contributions is equal to the total Employee Contributions, Matching
Employer Contributions and, to the extent not treated by the Employer
as included in the ADP, Basic Employer Contributions on behalf of the
Highly Compensated Employee (determined prior to the application of
this subsection) minus the amount determined by multiplying the Highly
Compensated Employee's Contribution Percentage (determined after
application of this subparagraph) by the Participant's Compensation
used in determining such ratio.
26
(d) INCOME ALLOCABLE TO EXCESS DEFERRALS, EXCESS CONTRIBUTIONS AND EXCESS
AGGREGATE CONTRIBUTIONS.
(i) INCOME ALLOCABLE TO EXCESS DEFERRALS. The income allocable
to Excess Deferrals is equal to the allocable gain or loss
for the taxable year of the respective Participant. Income
allocable to Excess Deferrals shall be computed by either
(i)
(A) using a reasonable method which does not discriminate
in favor of Highly Compensated Employees, is used
consistently for all Participants and for all
corrective distributions under the Plan for the taxable
year, and is used by the Plan for allocating income
among the accounts of Participants; or
(B) multiplying the income for the taxable year which is
allocable either to Salary Deferral Contributions or
Basic Employer Contributions elected by the Employer to
be included in the numerator of the ADP, by a
fraction -
(1) the numerator of which is the Excess Deferrals by
the Participant for the taxable year, and
(2) the denominator of which is equal to the sum of
(I) as of the beginning of the taxable year,
the Participant's Salary Deferral
Contribution Account, plus
(II) for the taxable year, the Participant's
Salary Deferral Contributions.
(ii) INCOME ALLOCABLE TO EXCESS CONTRIBUTIONS. The income
allocable to Excess Contributions is equal to the allocable
gain or loss for the Year. Income allocable to Excess
Contributions shall be computed by either
(A) using a reasonable method which does not discriminate
in favor of Highly Compensated Employees, is used
consistently for all Participants and for all
corrective distributions under the Plan for the Year,
and is used by the Plan for allocating income among the
accounts of Participants; or
(B) multiplying the income for the Year which is allocable
to Salary
27
Deferral Contributions and Basic Employer
Contributions to the extent elected by the Employer to
be included in the numerator of the ADP, by a
fraction -
(1) the numerator of which is the Excess Contributions
for the Participant for the Year, and
(2) the denominator of which is equal to the sum of
(I) as of the beginning of the Year, the
Participant's Salary Deferral
Contribution Account and that portion of
the Participant's Basic Employer
Contribution Account attributable to
Basic Employer Contributions elected by
the Employer to be included in the
numerator of the ADP, plus
(II) for the Year, the Participant's Salary
Deferral Contributions, and Basic
Employer Contributions elected by the
Employer to be included in the numerator
of the ADP.
(iii) INCOME ALLOCABLE TO EXCESS AGGREGATE CONTRIBUTIONS.
The income allocable to Excess Aggregate Contributions is
equal to the allocable gain or loss for the Year. Income
allocable to Excess Aggregate Contributions shall be
computed by either
(A) using a reasonable method which does not discriminate
in favor of Highly Compensated Employees, is used
consistently for all Participants and for all
corrective distributions under the Plan for the Year,
and is used by the Plan for allocating income among the
accounts of Participants; or
(B) multiplying the income for the Year which is allocable
to Employee Contributions, Matching Employer
Contributions and Basic Employer Contributions to the
extent not elected by the Employer to be included in
the numerator of the ADP, by a fraction -
(1) the numerator of which is the Excess Aggregate
28
Contributions for the Participant for the Year,
and
(2) the denominator of which is equal to the sum of
(I) as of the beginning of the Year, the
Employee Contribution Account, Matching
Employer Contribution Account and that
portion of the Participant's Basic
Employer Contribution Account
attributable to Basic Employer
Contributions not elected by the
Employer to be included in the numerator
of the ADP, plus
(II) for the Year, the Participant's Employee
Contributions, Matching Employer
Contributions and Basic Employer
Contributions to the extent not elected
by the Employer to be included in the
numerator of the ADP.
(e) NONDISCRIMINATION TEST FOR EMPLOYEE CONTRIBUTIONS AND MATCHING
EMPLOYER CONTRIBUTIONS: In no event may the Contribution Percentage
of the Highly Compensated Employees who are eligible to participate in
the Plan exceed (i) 2 times the Contribution Percentage of the Lower
Paid Employees if the Lower Paid Employees' Contribution Percentage is
less than or equal to two percent (2%); (ii) the Contribution
Percentage of the Lower Paid Employees plus two percent (2%) (or such
lesser amount as the Secretary of the Treasury shall prescribe to
prevent the multiple use of this alternative limitation with respect
to any Highly Compensation Employee) if the Lower Paid Employees'
Contribution Percentage is greater than two percent (2%) but less than
eight percent (8%); or (iii) 1.25 times the Contribution Percentage of
the Lower Paid Employees if the Lower Paid Employees' Contribution
Percentage is eight percent (8%) or more.
The determination of the amount of Excess Aggregate Contributions with
respect to the Plan shall be made after (i) first determining the
Excess Deferrals and (ii) then determining the Excess Contributions.
The amount, if any, of such Excess Aggregate Contributions for such
Year shall generally be distributed or if forfeitable, forfeited
together with any income allocable to such contributions within two
and one-half (2-1/2) months after the end of the Year to Participants
on whose behalf Excess Aggregate Contributions were allocated for such
Year, but in no event shall such Excess Aggregate Contributions and
income be distributed or if forfeitable, forfeited later than the end
of
29
the Year following the Year in which such Excess Aggregate
Contributions were made. Excess Aggregate Contributions of
Participants who are members of a Family and are treated as a single
Highly Compensated Employee shall be allocated among such Participants
in the same proportion as the portion of the numerator of the
Contribution Percentage attributable to each Family member bears to
the entire numerator of the Contribution Percentage determined by
treating such Family members as a single Highly Compensated Employee.
Distribution of Excess Aggregate Contributions, if any, for any Year
shall be made to Highly Compensated Employees who are Participants by
leveling the highest Contribution Percentage in accordance with Treas.
Reg. Section 1.401(m)-l(e)(2) until the nondiscrimination test set
forth in the first sentence of this subsection (e) is met; provided,
however, that forfeitures of Excess Aggregate Contributions, if any,
shall not be allocated to Participants whose contributions are reduced
under this Section.
To the extent required by law, if the sum of the ADP and the
Contribution Percentage for Highly Compensated Employees exceeds the
Aggregate Limit, then the Contribution Percentage of Highly
Compensated Employees will be reduced in the manner described in
subsection (c) so that the Aggregate Limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution
Percentage is reduced shall be treated as an Excess Aggregate
Contribution. This paragraph does not apply if the sum of the ADP and
the Contribution Percentage of the Highly Compensated Employee does
not exceed 1.25 times the ADP and the Contribution Percentage of the
Lower Paid Employees. For purposes of this paragraph, "Aggregate
Limit" shall mean the greater of (i) the sum of (A) 125% of the
greater of the ADP or the Contribution Percentage of the Lower Paid
Employees and (B) two (2) percentage points plus the lesser of the ADP
or the Contribution Percentage of the Lower Paid Employees, but in no
event greater than twice the lesser of the ADP or the Contribution
Percentage of the Lower Paid Employees; or (ii) the sum of (A) 125% of
the lesser of the ADP or the Contribution Percentage of the Lower Paid
Employees and (B) two (2) percentage points plus the greater of the
ADP or the Contribution Percentage of the Lower Paid Employees, but in
no event greater than twice the greater of the ADP or the Contribution
Percentage of the Lower Paid Employees.
For purposes of this Section 5.4(e), the terms listed below shall have
the meanings indicated:
(i) CONTRIBUTION PERCENTAGE: A fraction, the numerator of which
is the amount of the contributions actually paid on behalf
of that Participant, in the aggregate, to the Participant's
Matching Employer Contribution Account (excluding
contributions paid to the Participant's Matching Employer
Contribution Account that are forfeited either to correct
30
Excess Aggregate Contributions or because the contributions
to which they relate are Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions), Employee
Contribution Account, and, to the extent not treated by the
Employer as included in the ADP, Basic Employer Contribution
Account and the denominator of which is the Participant's
Compensation for the Year. The Contribution Percentage for
any group of Participants is equivalent to the average of
the Contribution Percentages of all Participants in that
group.
If two or more plans of the Employer to which matching
contributions or employee voluntary contributions are made
are treated as one plan for purposes of the eligibility
requirements of section 410(b) of the Code, such plans shall
be treated as one plan for purposes of determining the
Contribution Percentage. In the event a Highly Compensated
Employee participates in two or more plans of the Employer
to which such contributions are made, all such contributions
shall be aggregated for purposes of determining the
Contribution Percentage. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily
disaggregated under regulations under section 401(m) of the
Code.
(ii) EXCESS AGGREGATE CONTRIBUTIONS: With respect to any Year,
the excess of (A) the aggregate amount of Matching Employer
Contributions, Employee Contributions and Basic Employer
Contributions not treated by the Employer as included in the
ADP actually made on behalf of Highly Compensated Employees
who are Participants for such Year, over (B) the maximum
amount of such contributions permitted as determined under
subsection (e) of this Section (determined by reducing
Excess Aggregate Contributions made on behalf of Highly
Compensated Employees who are Participants in order of
Contribution Percentage, beginning with the highest
Contribution Percentage, as set forth in subsection (c)).
ROLLOVER CONTRIBUTIONS.
(a) Anything herein contained to the contrary notwithstanding, the
Committee may authorize an Employee to transfer to the Trust, to be
held as part of the Employee's Employee Contribution Account, cash
received by the Employee in one or more distributions together
constituting, under the Code, a lump sum distribution from or under
another qualified trust, qualified plan, an employee annuity or
custodian account, or an amount paid or distributed out of an
individual retirement account, individual retirement annuity or
retirement bond consisting of a prior rollover contribution from a
qualified trust or annuity plan. The amount so transferred to this
Trust is a "Rollover
31
Contribution." The Trustee may also authorize the acceptance of a
direct payment on behalf of an Employee from a plan or trust for which
the Internal Revenue Service has issued a favorable determination
letter. The amount so transferred by a direct payment from the plan
or trust to this Trust is a "Direct Transfer Contribution." The
interest of a Participant with respect to a Rollover Contribution and
a Direct Transfer Contribution to the Trust, together with the
earnings thereon, shall be fully vested, and assets attributable
thereto shall be held, invested, and distributed pursuant to the terms
of the Plan governing the Participant's Employee Contribution Account;
provided, however, that the interest of a Participant with respect to
Rollover Contributions and Direct Transfer Contributions shall be
segregated for accounting and reporting purposes. An Employee making
a Rollover Contribution or on whose behalf a Direct Transfer
Contribution is made, if otherwise not eligible to become a
Participant, shall be deemed a Participant to the extent of the
Employee's Rollover Contribution and Direct Transfer Contribution only
and not for any other purpose until the Employee otherwise is eligible
to be and becomes a Participant for all purposes hereunder.
(b) A Participant may, pursuant to a uniform and nondiscriminatory
procedure established by the Committee, withdraw any part of such
Participant's Employee Contribution Account attributable to Rollover
Contributions or Direct Transfer Contributions, as adjusted by any
investment gains or losses, but not including any amounts directly
transferred to the Plan from the Distributing Plan pursuant to
subsection (b) of this Section.
BENEFITS
RETIREMENT OR DISABILITY: If a Participant's employment with the Employers is
terminated at or after the date upon which the Participant attains Normal
Retirement Age, or if the Participant's employment is terminated at an
earlier age because of Disability, the Participant shall be vested in,
and entitled to receive, the entire amount in each of the Participant's
Accounts in accordance with Section 6.4 PAYMENT OF BENEFITS.
DEATH: In the event that the termination of employment of a Participant is
caused by the Participant's death, the Participant's Beneficiary shall be
vested in and paid the entire amount in each of the Participant's
Accounts in accordance with Section 6.4 PAYMENT OF BENEFITS.
TERMINATION FOR OTHER REASONS: If a Participant's employment with the Employers
is terminated before Normal Retirement Age for any reason other than
Disability or death, the Participant shall be entitled to:
(a) The entire amount, if any, credited to the Participant's Employee
Contribution Account, Salary Deferral Contribution Account, Basic
Employer Contribution Account and Distributing Plan Account; plus
32
The Participant shall be vested in, and entitled to receive, an amount
equal to a percentage of the balance of the Participant's Employer
Contribution Account, if any, and Matching Employer Contribution
Account, if any. Such percentage shall be determined in accordance
with the following schedule:
VESTED FORFEITED
YEARS OF SERVICE PERCENTAGE PERCENTAGE
---------------- ---------- ----------
less than 1 0 100
1 but less than 2 20 80
2 but less than 3 40 60
3 but less than 4 60 40
4 but less than 5 80 20
5 or more 100 0
; provided that a Participant who was a Participant in the Plan prior to
March 1, 1996 shall be vested in and entitled to receive, the amount
credited to the Participant's Employer Contribution Account, attributable
to the Participant's Company Basic Deposit Account as of February 28, 1996,
if any, and Company Matching Deposit Account, if any, after having made
Salary Deferral Contributions (referred to as Before-Tax Deposits prior to
March 1, 1996) and/or Employee Contributions (referred to as After-Tax
Deposits prior to March 1, 1996) under this Plan for an aggregate period of
thirty-six (36) consecutive months.
Payment of benefits due under this Section shall be made in accordance with
Section 6.4 PAYMENT OF BENEFITS.
(c) Notwithstanding anything herein to the contrary, if the Plan's vesting
schedule is amended, or if the Plan is amended in any way that
directly or indirectly affects the computation of the participant's
nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each
Participant with at least three (3) Years of Service with the Employer
may elect, within a reasonable period after the adoption of the
amendment or change, to have such Participant's vested interest in
such Participant's Employer Contribution Account and
Matching Employer Contribution Account computed under the Plan without
regard to such amendment or change.
The period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end
on the latest of:
33
(i) Sixty (60) days after the amendment is adopted;
(ii) Sixty (60) days after the amendment becomes effective; or
(iii) Sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Plan
Administrator.
PAYMENT OF BENEFITS:
ACCOUNTS OTHER THAN DISTRIBUTING PLAN ACCOUNTS: The Committee shall direct
the Trustee to distribute the amounts due from the Accounts other than
the Distributing Plan Account of a Participant, if so directed by the
Participant, as soon as practicable after the Participant's
termination of employment, as of the Valuation Date coincident with or
next following the Participant,s termination of employment in any one
of the following methods selected by the Participant:
(i) One (1) single lump sum;
(ii) Periodic payments of substantially equal amounts for the
lesser of a specified number of years not in excess of ten
(10) or, over a period not exceeding such Participant's
normal life expectancy or the joint normal life expectancy
of the Participant and the Participant's Beneficiary, and
such payments shall be made not less frequently than
annually, in which event the unpaid balance at the end of
each Year shall receive an Income allocation.
(b) DISTRIBUTING PLAN ACCOUNTS: The Committee shall direct the Trustee to
distribute the amounts due from the Participant's Distributing Plan
Account, if so directed by the Participant, as soon as practicable
after the Participant's termination of employment, as of the Valuation
Date coincident with or next following the Participant's termination
of employment as follows:
(i) (A) The amount to which a Participant is entitled
after such Participant's termination of employment
shall be payable by the Trustee in the form of a
Qualified Joint and Survivor Annuity for the benefit of
the Participant and the Participant's Qualified Spouse.
If a Participant has no Qualified Spouse, the amount to
which such Participant is entitled after the
Participant's termination of employment shall be
payable by the Trustee in the form of a Life Annuity
for the benefit of the Participant.
(A) The amount to which a surviving Qualified Spouse is
entitled, if
34
the Participant had a vested Account balance at the
Participant's death and had not yet commenced receiving
benefits under the Plan, shall be payable by the
Trustee in the form of a Qualified Preretirement
Survivor Annuity for the benefit of the Qualified
Spouse.
(B) Notwithstanding anything herein to the contrary,
however, if a Participant has made an election pursuant
to subparagraphs (iii) or (iv) of this subsection (b),
whichever is applicable, and the election made by the
Participant is still in effect, the Participant's
nonforfeitable Account balance may be distributed by
the Trustee pursuant to subparagraph (ix) of this
subsection (b) or subsections (d) or (f) of this
Section.
For purposes of this subsection (b) and subsection (b) of
Section 6.6 DESIGNATION OF BENEFICIARY the following terms
shall have the meanings indicated:
(A) "Qualified Spouse":
(1) For purposes of the Qualified Joint and Survivor
Annuity and the Life Annuity, a Participant's
legal spouse as of the Participant's Annuity
Starting Date.
(2) For purposes of the Qualified Preretirement
Survivor Annuity, a Participant's legal spouse
throughout the one (1) year period ending at the
Participant's death.
(B) "Qualified Joint and Survivor Annuity":
An immediate annuity for the life of the Participant
with a survivor annuity for the life of the
Participant's Qualified Spouse which is fifty percent
(50%) of the amount of the annuity which is payable
during the joint lives of the Participant and the
Participant's Qualified Spouse and which is the
actuarial equivalent of the Participant's Account
balance.
(C) "Qualified Preretirement Survivor Annuity":
An annuity for the life of the surviving Qualified
Spouse of a Participant who dies prior to the
Participant's Annuity Starting Date, the actuarial
equivalent of which is fifty percent (50%) of the
Participant's Account balance as of the date of the
35
Participant's death.
(D) "Annuity Starting Date":
The first day of the first period for which an amount
is paid as an annuity or in any other form.
(E) "Applicable Election Period":
(1) with respect to a Qualified Preretirement Survivor
Annuity, the period which begins on the earlier
of:
(A) the first day of the Plan Year in which the
Participant attains age thirty-five (35); or
(B) the date the Participant terminates
employment;
and ends on the date of the Participant's death; and
with respect to a Qualified Joint and Survivor Annuity
or a Life Annuity, the ninety (90) day period
ending on the Annuity Starting Date.
(F) "Life Annuity":
An annuity for the life of the Participant which is the
actuarial equivalent of the Participant's Account
balance.
(G) "Joint and Survivor Annuity":
An annuity for the life of the Participant with a
survivor annuity for the life of the Participant's
Qualified Spouse or alternate beneficiary which is
either fifty percent (50%), sixty-six and two-thirds
percent (66-2/3%), or one hundred percent (100%) of the
amount of the annuity which is payable during the joint
lives of the Participant and the Participant,s
Qualified Spouse or alternate beneficiary and which is
the actuarial equivalent of the Participant's Account
balance. The actual percentage of the survivor benefit
will be elected by the Participant.
(iii) A Participant who has a Qualified Spouse may elect in
writing to waive the Qualified Joint and Survivor Annuity or
Qualified Preretirement
36
Survivor Annuity at any time during the Applicable Election
Period (provided, however, that a Participant may elect in
writing to waive the Qualified Preretirement Survivor
Annuity at any time prior to the Applicable Election Period,
if such election becomes invalid on the first day of the
Year in which the Participant attains age thirty-five (35)).
Such election must be consented to by the Participant's
Qualified Spouse. The election and the Qualified Spouse's
consent thereto must designate specific Beneficiary(ies)
including any class of Beneficiaries or any contingent
Beneficiaries, and, with respect to a Qualified Joint and
Survivor Annuity, the form of benefits that the designated
Beneficiary(ies) shall receive, which designations may
not be changed without spousal consent unless the
Qualified Spouse expressly permits designations by the
Participant without any further spousal consent. Such
Qualified Spouse's consent must acknowledge the effect of
such election and be witnessed by a Plan representative
or a notary public. Such consent shall not be required
if it is established to the satisfaction of the Plan
Administrator that the required consent cannot be
obtained because there is no Qualified Spouse, the
Qualified Spouse cannot be located, or other
circumstances that may be prescribed by Treasury
regulations. The election made by the Participant and
consented to by the Participant's Qualified Spouse may be
revoked by the Participant in writing without the consent
of the Qualified Spouse at any time during the Applicable
Election Period. Any new election must comply with the
requirements of this subparagraph (iii). A former
Qualified Spouse's waiver shall not be binding on the
Qualified Spouse.
A Participant without a Qualified Spouse may elect to waive the
Life Annuity at any time during the Applicable Election
Period. The election made by the Participant may be revoked
by the Participant in writing at any time during the
Applicable Election Period. Any new election must comply
with the requirements of this Section 6.4(b).
(v) With regard to the election to waive a Qualified Joint and
Survivor Annuity, the Plan Administrator shall no less than
thirty (30) days and no more than ninety (90) days prior to
the Annuity Starting Date provide the Participant a written
explanation of:
(A) The terms and conditions of the Qualified Joint and
Survivor Annuity;
(B) The Participant's right to make, and the effect of, an
election to waive the Qualified Joint and Survivor
Annuity;
37
(C) The right of the Participant's Qualified Spouse to
consent to any election to waive the Qualified Joint
and Survivor Annuity, and
(D) The right of the Participant to revoke such election,
and the effect of such revocation.
(vi) With regard to the election to waive a Qualified
Preretirement Survivor Annuity, the Plan Administrator shall
supply comparable notice and information to that described
in subparagraph (v) of this subsection (b) within the period
beginning on the first day of the Year in which the
Participant attains age thirty-two (32) and ending with the
close of the Year preceding the Year in which the
Participant attains age thirty-five (35). If the
Participant enters the Plan after the first day of the Year
in which the Participant attained age thirty-two (32), the
Plan Administrator shall provide notice no later than the
end of the one (1) year period after the entry of the
Participant into the Plan. In the case of a Participant's
termination of employment before the Participant attains age
thirty-two (32), the Plan Administrator shall provide notice
at the time of the Participant's termination of employment
or within one (1) year prior to or after the Participant's
termination of employment.
(vii) With regard to the election to waive a Life Annuity,
the Plan Administrator shall no less than thirty (30) days
and no more than ninety (90) days prior to the Annuity
Starting Date provide the Participant a written explanation
of:
(A) The terms and conditions of the Life Annuity;
(B) The Participant's right to make, and the effect of, an
election to waive the Life Annuity; and
The right of the Participant to revoke such election and the
effect of such revocation.
(viii) The annuities provided under this subsection (b) shall
commence within a reasonable time after the Participant's
retirement or after attainment of (A) age fifty-five (55)
and five (5) Years of Service or (B) Normal Retirement Age,
as elected by the Participant, or within a reasonable period
of time after the Participant's death if so directed by the
Participant's surviving Qualified Spouse. In no event shall
an Annuity Starting Date be later than sixty (60) days after
the close of the Year
38
during which the later of the Normal Retirement Age of
the Participant or the date of the Participant's
termination of employment occurs, unless specifically
authorized by the Participant.
(ix) (A) For a Participant who makes a qualified election
pursuant to subparagraphs (iii) or (iv) of this
subsection (b), whichever is applicable, which
qualified election is still in effect, the amount of
the Participant's Trust Account balance to which the
Participant is entitled after termination of employment
shall be paid by the Trustee to such Participant in one
of the following optional methods of payment, in the
actuarial equivalent of the Participant's Trust Account
balance attributable to the Participant's Distributing
Plan Account:
(1) One (1) single lump sum payable after termination
of employment for reasons other than death,
Disability or retirement; or
(2) Installments commencing after termination of
employment for reasons other than death,
Disability or retirement, over a period not to
exceed the Participant's life expectancy or the
combined life expectancy of the Participant and
such Participant's designated Beneficiary, or a
period certain and continuous not to exceed the
Participant's life expectancy or the combined life
expectancy of the Participant and such
Participant's designated Beneficiary; or
(3) An annuity for the Participant's life commencing
on the Annuity Starting Date and payable until the
Participant's death; or
(4) An annuity for the Participant's life with one
hundred twenty (120) monthly payments guaranteed;
or
(5) A Joint and Survivor Annuity for the life of the
Participant and the Participant's Qualified Spouse
or alternate beneficiary; or
A full cash refund annuity for the Participant's life.
(c) Unless a Participant elects otherwise in writing, payment of benefits
under this Plan shall
39
be made or commence within sixty (60) days after the latest to occur
of (i) the end of the Year of the Participant's sixty-fifth (65th)
birthday, or (i) the end of the Year in which the Participant's
employment terminates.
(d) Distributions to a Participant must commence no later than the first
day of April following the calendar year in which such Participant
attains age 70-1/2. The distributions required herein may be made
over the life of the Participant (or lives of the Participant and the
Participant's beneficiary) or over a period not exceeding the life
expectancy of the Participant (or the life expectancies of the
Participant and the Participant's beneficiary) and shall be determined
and made in accordance with section 401(a)(9) of the Code, including
for lifetime distributions the minimum distribution incidental benefit
requirement of section 1.401(a)(9)-2 of the regulations. Life
expectancies will not be recalculated unless the Participant elects
otherwise.
(e) If a Participant has, prior to January 1, 1984, made a designation and
election under either the Distributing Plan or the USI Plan to have
the Participant's nonforfeitable Account balances paid in an
alternative method acceptable under section 401(a) of the Code as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982, by an instrument in writing executed by
such Participant and filed with the Trustee, the provisions of
subsection (d) shall not apply. Any such written designation and
election shall be binding upon the Trustee and the Employer, to the
extent permitted by law.
(f) Subject to the Qualified Preretirement Survivor Annuity requirements
with respect to Distributing Plan Accounts set forth above, upon the
death of the Participant, the following distribution provisions will
become effective:
(i) If the Participant dies after distribution of the
Participant's interest has commenced, the remaining portion
of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Participant's death without regard to any
acceleration of distributions because of the minimum
distribution incidental benefit requirement of
section 1.4(a)(9)-2 of the regulations.
(ii) If the Participant dies before distribution of the
Participant's interest commences, the Participant's entire
interest will be distributed no later than five (5) years
after the Participant's death except to the extent that:
(A) If any portion of the Participant's interest is payable
to a designated Beneficiary, distributions may be made
in substantially equal installments over the life
expectancy of the designated Beneficiary, commencing no
later than one (1) year
40
after the Participant's death.
(B) If the designated Beneficiary is the surviving spouse
of the Participant, distributions shall not be required
to commence earlier than the later of December 31 of
the calendar year immediately following the calendar
year of the Participant's death or December 31 of the
calendar year in which the Participant would have
attained age 70-1/2. If the spouse dies before
payments begin, subsequent distributions shall be made
as if the spouse had been the Participant.
(g) The amount to which a designated Beneficiary is entitled pursuant to
Section 6.6 DESIGNATION OF BENEFICIARY after a Participant's death
shall be paid by the Trustee at the direction of the Committee in the
manner selected by the Participant or the Participant's
Beneficiary(ies), as applicable, with payments to commence (if
elected) within a reasonable time after the Participant's death.
DISTRIBUTION OF UNALLOCATED EMPLOYEE CONTRIBUTIONS AND SALARY DEFERRAL
CONTRIBUTIONS: If on the date of termination of a Participant's
employment, the Employer shall be holding contributions made or designated
by the Participant but not yet allocated to the Participant's Employee
Contribution Account or Salary Deferral Contribution Account, the Employer
shall pay such amounts either directly to the Participant (or the
Participant's Beneficiary, as the case may be) or to the Trustee, to be
distributed by the Trustee in accordance with the method of distribution
determined under Section 6.4 PAYMENT OF BENEFITS.
41
DESIGNATION OF BENEFICIARY:
(a) ACCOUNTS OTHER THAN DISTRIBUTING PLAN ACCOUNTS:
(i) If a Participant is married on the date of the Participant's
death, the Beneficiary of such Participant shall be the
Participant's Eligible Spouse, as herein defined, unless the
Participant's Eligible Spouse consents in writing not to be
said Beneficiary and such written consent acknowledges the
effect of the consent and is witnessed by either a
representative of the Plan or a notary public. The
provisions of the preceding sentence shall not apply if it
is established to the satisfaction of the Plan Administrator
either that the Eligible Spouse cannot be located or that
other circumstances set forth in Income Tax Regulations
which preclude the necessity of the Eligible Spouse's
consent are present with respect to the Participant. Such
consent shall be valid only with respect to the Eligible
Spouse who signs the consent. Any spousal consent necessary
under this provision shall not be effective unless the
Participant's Beneficiary designation designates a specific
Beneficiary(ies) or any contingent Beneficiary(ies), which
designations may not be changed without spousal consent
unless the spouse expressly permits designations by the
Participant without any further spousal consent. The
"Eligible Spouse" of a Participant covered by this paragraph
is the husband or wife to whom the Participant had been
married for at least one (1) year as of the date of the
Participant's death.
(b) DISTRIBUTING PLAN ACCOUNTS:
(i) An amount equal to fifty percent (50%) of the nonforfeitable
balance of the Distributing Plan Account of such Participant
shall be payable on the death of such Participant to such
Participant's surviving Qualified Spouse pursuant to Section
6.4(b)(i) or, if there is no surviving Qualified Spouse, or
if an election has been made pursuant to Section 6.4(b)(iii)
and if a Beneficiary designation pursuant to subparagraph
(ii) below is made, to the Participant's designated
Beneficiary. The remaining fifty percent (50%) of the
Participant's nonforfeitable Account balance shall be
payable on the death of the Participant to the Participant's
designated Beneficiary.
(ii) Subject to the provisions of Section 6.4(b)(i) regarding
automatic annuities for Qualified Spouses, each Participant
shall, and from time to time, have the right to name and to
change the beneficiary or beneficiaries to whom payment of
the sum owing in the event of such
42
Participant's death shall be made. However, a
Participant's Distributing Plan Account balance shall be
paid to the Beneficiary the Participant has designated only
if the Participant's Qualified Spouse waives pursuant to
Section 6.4(b)(iii), any right to a benefit from the Plan,
except as provided in any Beneficiary designation executed
by the Participant.
(c) GENERAL RULES REGARDING BENEFICIARY DESIGNATIONS. If a Participant
shall fail to designate a Beneficiary, if such designation shall for
any reason be illegal or ineffective, or if no surviving Qualified
Spouse, Eligible Spouse or Beneficiary shall survive the Participant,
the Participant's death benefits shall be paid:
(i) to the Participant's surviving spouse; or
(ii) if there is no surviving spouse, to the estate of the
Participant.
Except as otherwise provided above in this Section, each Participant
shall have the right to designate, by giving a written designation to
the Plan Administrator, a person or persons or entity to receive any
death benefit which may become payable upon the death of such
Participant. A Participant may, with consent of the Participant's
Qualified Spouse or Eligible Spouse, change such Beneficiary
designation from time to time upon written notice to the Committee,
and the last designation received by the Committee prior to the death
of the Participant shall be effective and shall revoke all prior
designations.
The Plan Administrator may determine the identity of the distributees
and in so doing may act and rely upon any information it may deem
reliable upon reasonable inquiry, and upon any affidavit, certificate,
or other paper believed by it to be genuine, and upon any evidence
believed by it sufficient.
OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS: Notwithstanding
any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Section, 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. For
purposes of this Section, the following definitions shall apply:
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: (i) 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
43
designated beneficiary, or for a specified period of ten (10)
years or more; (ii) any distribution to the extent such
distribution is required under section 401(a)(9) of the Code;
and (iii) the portion of any distribution that is not includable
in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(b) ELIGIBLE RETIREMENT PLAN: An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code or a qualified trust described in section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan
is an individual retirement account or individual retirement
annuity.
(c) DISTRIBUTEE: A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the
Code, are Distributees with regard to the interest of the spouse
or former spouse.
(d) DIRECT ROLLOVER: A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
LOANS TO PARTICIPANTS: The Trustee may, at the Committee's direction,
administer a Participant loan program, whereby upon the application of any
Participant who is an active employee or a party-in-interest as defined in
ERISA Section 3(14) who is not an Owner-Employee, a family member of an
Owner-Employee, or a Shareholder-Employee of the Employer or a family
member of a Shareholder-Employee (an "Eligible Individual"), the Trustee,
in accordance with a uniform, nondiscriminatory policy, may make a loan or
loans to such Eligible Individual. The total amount of a loan to any
Eligible Individual shall not exceed the lesser of (i) fifty thousand
dollars ($50,000), or (ii) one-half (1/2) of the nonforfeitable value of
the Participant's Accounts excluding the Participant's Distributing Plan
Account under the Plan as of the date on which the loan is approved. The
Committee may not grant a loan in an amount in excess of fifty thousand
dollars ($50,000), reduced by the excess, if any, of (i) the highest
outstanding balance of loans from the Plan during the one (1) year period
ending on the day before the date on which such loan is made over (ii) the
outstanding balance of loans from the Plan on the date on which such loan
is made. All loans shall be subject to the approval of the Committee which
shall follow a uniform, nondiscriminatory policy.
In addition to such rules and regulations as the Committee may adopt, all
loans shall comply
44
with the following terms and conditions:
An application for a loan by an Eligible Individual shall be made in
writing to the Committee whose action thereon shall be final. The
Committee shall specify the form of the application and any supporting
data required.
(b) The period of repayment for any loan shall be five (5) years from the
date the loan is made. Any loan used to acquire a dwelling unit which
within a reasonable time will be used as the principal residence of
the Participant does not have to be repaid within five (5) years, but
shall be paid in a time agreed by the Committee and the Eligible
Individual. Loans shall be repayable in substantially equal
installments. In no event shall the substantially equal installments
be made less frequently than quarterly. To the extent permitted by
law, repayment shall be through payroll deductions for all periods
while the Eligible Individual is on an Employer's payroll.
(c) Each loan shall bear interest at a rate which is reasonable within the
meaning of section 4975(d)(1) of the Code, provided that such rate
does not violate any applicable usury laws.
(d) Each loan shall be supported by collateral which is the Eligible
Individual's entire interest in the Trust or if so determined by the
Committee, the Eligible Individual's interest in the Eligible
Individual's Employer Contribution Account, Matching Employer
Contribution Account and Employee Contribution Account. A loan shall
also be supported by the Eligible Individual's promissory note for the
amount of the loan, including interest, payable to the order of the
Trustee. The promissory note shall require that the unpaid principal
and interest will (at the Committee's option) become due and payable
if a loan payment is not made within thirty (30) days after the due
date of any installment.
(e) At the time the balance of an Eligible Individual's Accounts is in
excess of $3,500 and is used as security for a loan, if the
requirements of section 401(a)(11) of the Code apply to any part of
such balance which is loaned to the Eligible Individual, the Eligible
Individual's spouse must consent in writing to the loan and the
possible reduction in the Accounts of the Participant to satisfy the
loan. Such consent must be made within the ninety (90) day period
which ends on the date on which the loan is to be so secured. The
spouse's written consent must be witnessed by a representative of the
Plan or a notary public. The provisions of the preceding sentences
shall not apply if it is established to the satisfaction of the
Committee either that the spouse cannot be located or that other
circumstances set forth in regulations issued by the Secretary of the
Treasury which preclude the necessity of the spouse's consent are
present with respect to the Eligible Individual. Further spousal
consent is not required regardless of whether the Eligible Individual
subsequently has a change in spouse or change in marital status. Any
45
renegotiation, extension, renewal, or other revision of a loan shall
be treated as a new loan requiring the obtaining of a new consent of
the spouse in accordance with this subsection (e).
CASH-OUT PROCEDURE. If at the time of a Participant's termination of employment
the Participant's nonforfeitable Account balance shall be in an amount not
in excess of $3,500.00 or such other amount to be prescribed in regulations
by the Secretary of the Treasury or the Secretary's delegate, the Trustee
shall pay such amount to the Participant as soon as practicable after the
Participant's termination of employment, as of the Valuation Date
coincident with or next following the Participant's termination of
employment. For purposes of this Section, if the value of the
Participant's nonforfeitable Account balance is zero, the Participant shall
be deemed to have received a distribution of such nonforfeitable Account
balance. If such amount is in excess of $3,500.00 and the Account balance
is immediately distributable, the Participant, and the Participant's
Qualified Spouse if the Participant is entitled to a distribution from a
Distributing Plan Account and payment is to be made in a form other than a
Qualified Joint and Survivor Annuity, must consent to any distribution of
such Account balance. The consent of the Participant, and the
Participant's Qualified Spouse if the Participant is entitled to a
distribution from a Distributing Plan Account and payment is to be made in
a form other than a Qualified Joint and Survivor Annuity, shall be obtained
in writing within the ninety (90) day period ending on the annuity starting
date. The annuity starting date is the first day of the first period for
which an amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant, and the Participant's Qualified
Spouse if the Participant is entitled to a distribution from a Distributing
Plan Account and payment is to be made in a form other than a Qualified
Joint and Survivor Annuity, of the right to defer any distribution until
the Participant's Account balance is no longer immediately distributable.
Such notification shall include a general description of the material
features and an explanation of the relative values of the optional forms of
benefit available under the Plan in a manner that would satisfy the notice
requirements of section 417(a)(3) of the Code, and shall be provided no
less than thirty (30) days and no more than ninety (90) days prior to the
annuity starting date. The consent of the Participant, and the
Participant's Qualified Spouse if the Participant is entitled to a
distribution from a Distributing Plan Account and payment is to be made in
a form other than a Qualified Joint and Survivor Annuity, shall not be
required to the extent that a distribution is required to satisfy section
401(a)(9) or section 415 of the Code. In addition, upon termination of the
Plan the Participant's Account balance may be distributed to the
Participant, provided the Employer does not maintain or establish a
successor plan (as defined under regulations under section 401(k) of the
Code), or transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in section 4975(e)(7) of the Code)
within the same controlled group if the Participant does not consent to an
immediate distribution. An Account balance is immediately distributable to
the Participant before the Participant attains (or would have attained if
not deceased) the later of Normal Retirement Age or age sixty-two (62) (or
any such other times as may be prescribed by law or by regulations
promulgated by the Secretary of the Treasury). Such payment shall satisfy
all obligations of the Trust to such Participant.
46
Upon a distribution or deemed distribution made to a Participant pursuant
to this Section, the nonvested portion of such Participant's Employer
Contribution Account, if any, and Matching Employer Contribution Account,
if any, will be forfeited and shall be allocated along with Forfeitures at
the time and in the manner specified in Section 4.3 DISPOSITION OF
FORFEITURES.
TRUST FUND
APPOINTMENT OF TRUSTEE: A trustee shall be appointed by the Company to
administer the Trust Fund. The Trustee shall serve at the pleasure of the
Company, and shall have the rights, powers and duties set forth in the
Trust Agreement. All assets of the Trust Fund shall be held, invested and
reinvested by the Trustee.
ASSETS OF THE TRUST: All contributions under this Plan shall be paid to the
Trustee and, except as provided in Section 7.4 REVERSION OF EMPLOYER
CONTRIBUTIONS, all assets of the Trust Fund, including income from
investments and from all other sources, shall be retained for the exclusive
benefit of Participants, Former Participants, and Beneficiaries, and shall
be used to pay benefits to such persons, or to pay expenses of
administration of the Plan and trust to the extent not paid by the Company.
All contributions made by an Employer are expressly conditioned upon the
continued qualification of the Plan under section 401 of the Code, and upon
the deductibility of the contributions under section 404 of the Code.
EARMARKED INVESTMENTS: At such times as the Employer shall designate, and if so
permitted by the Employer, in the Employer's sole discretion exercised in a
uniform, nondiscriminatory manner, every Participant under the Plan may
request, in writing and on the form provided by the Employer that the total
amount standing to the Participant's credit in the Participant's Account or
any uniform lesser amount as determined by the Employer, be invested in any
form of investment permitted by the Employer and selected by the
Participant; provided, however, that if any Participant is permitted to
earmark such Participant's Account or any portion thereof in any particular
form or type of investment, all Participants shall have the same right of
direction.
REVERSION OF EMPLOYER CONTRIBUTIONS: At no time shall any part of the corpus or
income of the Trust Fund be used for or diverted to purposes other than for
the exclusive benefit of Participants and their Beneficiaries.
Notwithstanding the above, in the case of a contribution which is made by
the Employer by a mistake of fact, such contribution may be returned to the
Employer within one (1) year after the payment of the contribution to the
Trust Fund. If a contribution is conditioned on initial qualification of
the Plan under section 501 of the Code, and if the Plan does not qualify,
then such contribution may be returned to the Employer within one (1) year
after the date of denial of initial qualification of the Plan (provided the
application for qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which the Plan is
adopted or such later date as the Secretary of the Treasury may prescribe).
If a contribution is conditioned upon the deductibility of the contribution
under section 404 of the
47
Code, then, to the extent the deduction is disallowed, such a contribution
may be returned to the Employer within one (1) year after the disallowance
of the deduction.
ADMINISTRATION
ALLOCATION OF RESPONSIBILITY AMONG FIDUCIARIES FOR PLAN AND TRUST
ADMINISTRATION: The Fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given them
under this Plan or the Trust. The Employers shall have the sole
responsibility for making the contributions provided for under Section 4.1
EMPLOYER CONTRIBUTIONS. The Company shall have the sole authority to
appoint and remove the Trustee, members of the Committee and any investment
manager which may be provided for under the Trust, and to amend or
terminate, in whole or in part, this Plan or the Trust. The Committee
shall have sole responsibility for the administration of this Plan, which
responsibility is specifically described in this Plan and the Trust. The
Trustee shall have such responsibility for the administration of the Trust
as specifically provided in the Trust. Each Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan or the Trust, as the case may
be, authorizing or providing for such direction, information or action.
Furthermore, each Fiduciary may rely upon any such direction, information
or action of another Fiduciary as being proper under this Plan or the
Trust, and is not required under this Plan or the Trust to inquire into the
propriety of any such direction, information or action. It is intended
under this Plan and the Trust that each Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and
obligations under this Plan and the Trust and shall not be responsible for
any act or failure to act of another Fiduciary. No Fiduciary guarantees
the Trust Fund in any manner against investment loss or depreciation in
asset value.
APPOINTMENT OF COMMITTEE: The Plan shall be administered by a Profit Sharing
Committee consisting of at least three (3) persons who shall be appointed
by and serve at the pleasure of the Board of Directors of the Company. All
usual and reasonable expenses of the Committee may be paid in whole or in
part by the Employers, and any expenses not paid by the Employers shall be
paid by the Trustee out of the principal or income of the Trust Fund. Any
members of the Committee who are Employees shall not receive compensation
with respect to their services for the Committee.
CLAIMS PROCEDURE: The Committee shall make all determinations as to the right
of any person to a benefit. Any denial by the Committee of the claim for
benefits under the Plan by a Participant or Beneficiary shall be stated in
writing by the Committee and delivered or mailed to the Participant or
Beneficiary; and such notice shall set forth the specific reasons for the
denial, written to the best of the Committee's ability in a manner that may
be understood without legal counsel. In addition, the Committee shall
afford a reasonable opportunity to any Participant or Beneficiary whose
claim for benefits has been denied for a review of the decision denying the
claim.
48
RECORDS AND REPORTS: The Committee shall exercise such authority and
responsibility as it deems appropriate in order to comply with ERISA and
governmental regulations issued thereunder relating to records of
Participants' Service, Account balances and the percentage of such Account
balances which are nonforfeitable under the Plan; notifications to
Participants; annual registration with the Internal Revenue Service; and
annual reports to the Department of Labor.
OTHER COMMITTEE POWERS AND DUTIES: The Committee shall have such duties and
powers as may be necessary to discharge its duties hereunder, including,
but not by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of
any benefits hereunder;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;
(c) to prepare and distribute, in such manner as the Committee determines
to be appropriate, information explaining the Plan;
(d) to receive from the Employers and from Participants such information
as shall be necessary for the proper administration of the Plan;
(e) to furnish the Employers, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(f) to receive, review and keep on file (as it deems convenient or proper)
reports of benefit payments by the Trustee and reports of
disbursements for expenses directed by the Committee;
(g) to appoint, or employ individuals to assist in the administration of
the Plan and any other agents it deems advisable, including legal
counsel.
The Committee shall have no power to add to, subtract from or modify any of
the terms of the Plan, or to change or add to any benefits provided by the
Plan, or to waive or fail to apply any requirements of eligibility for a
benefit under the Plan.
RULES AND DECISIONS: The Committee may adopt such rules as it deems necessary,
desirable or appropriate. All rules and decisions of the Committee shall
be uniformly and consistently applied to all Participants in similar
circumstances. When making a determination or calculation, the Committee
shall be entitled to rely upon information furnished by a Participant or
Beneficiary, the Employers, the legal counsel of the Company or the
Trustee.
49
COMMITTEE PROCEDURES: The Committee may act at a meeting or in writing without
a meeting. The Committee shall elect one of its members as chairman,
appoint a secretary, who may or may not be a Committee member, and advise
the Trustee of such actions in writing. The secretary shall keep a record
of all meetings and forward all necessary communications to the Employers
or the Trustee. The Committee may adopt such bylaws and regulations as it
deems desirable for the conduct of its affairs. All decisions of the
Committee shall be made by the vote of the majority including actions in
writing taken without a meeting. A dissenting Committee member who, within
a reasonable time after such Committee member has knowledge of any action
or failure to act by the majority, registers a dissent in writing delivered
to the other Committee members, the Company and the Trustee shall not be
responsible for any such action or failure to act.
AUTHORIZATION OF BENEFIT PAYMENTS: The Committee shall issue directions to the
Trustee concerning all benefits which are to be paid from the Trust Fund
pursuant to the provisions of this Plan, and warrants that all such
directions are in accordance with this Plan.
APPLICATION AND FORMS FOR BENEFITS: The Committee may require a Participant to
complete and file with the Committee an application for a benefit and all
other forms approved by the Committee, and to furnish all pertinent
information requested by the Committee. The Committee may rely upon all
such information so furnished it, including the Participant's current
mailing address.
FACILITY OF PAYMENT: Whenever, in the Committee's opinion, a person is entitled
to receive any payment of a benefit or installment thereof, hereunder is
under a legal disability or is incapacitated in any way so as to be unable
to manage the person's financial affairs, the Committee may direct the
Trustee to make payments to such person or to the person's legal
representative or to a relative or friend of such person for the person's
benefit, or the Committee may direct the Trustee to apply the payment for
the benefit of such person in such a manner as the Committee considers
advisable. Any payment of a benefit or installment thereof in accordance
with the provisions of this Section shall be a complete discharge of any
liability for the making of such payment under the provisions of the Plan.
INDEMNIFICATION OF THE COMMITTEE: The Committee and the individual members
thereof shall be indemnified by the Employers and not from the Trust Fund
against any and all liabilities arising by reason of any act or failure to
act made in good faith pursuant to the provisions of the Plan, including
expenses reasonably incurred in the defense of any claim relating thereto.
MISCELLANEOUS
NONGUARANTEE OF EMPLOYMENT: Nothing contained in this Plan shall be construed
as a contract of employment between an Employer and any Employee, or as a
right of any Employee to be continued in the employment of an Employer, or
as a limitation of the right of an Employer to discharge any of its
Employees, with or without cause.
50
RIGHTS TO TRUST ASSETS: No Employee or Beneficiary shall have any right to, or
interest in, any assets of the Trust Fund upon termination of employment or
otherwise, except as provided from time to time under this Plan, and then
only to the extent of the benefits payable under the Plan to such Employee
or Beneficiary out of the assets of the Trust Fund. All payments of
benefits as provided for in this Plan shall be made solely out of the
assets of the Trust Fund and none of the Fiduciaries shall be liable
therefor in any manner.
NONALIENATION OF BENEFITS: Except to the extent provided in Section 6.6,
benefits payable under this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary, including any such liability which is for alimony or other
payments for the support of a spouse or former spouse, or for any relative
of the Employee, prior to actually being received by the person entitled to
the benefit under the terms of the Plan; and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise
dispose of any right to benefits payable hereunder shall be void. The
Trust Fund shall not in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder. The preceding sentence shall not apply with respect to
the creation, assignment or recognition of a right to any benefit payable
with respect to a Participant pursuant to a qualified domestic relations
order as defined in section 414(p) of the Code.
NONFORFEITABILITY OF BENEFITS: Subject only to the specific provisions of this
Plan, nothing shall be deemed to divest a Participant of the right to the
nonforfeitable benefit to which the Participant becomes entitled in
accordance with the provisions of this Plan.
DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS: In the event of a permanent
discontinuance of contributions to the Plan by an Employer, the Accounts of all
Participants employed by such Employer shall, as of the date of such
discontinuance, become one hundred percent (100%) vested and nonforfeitable.
AMENDMENTS AND ACTION BY EMPLOYERS
AMENDMENTS: The Company reserves the right to make from time to time any
amendment or amendments to this Plan.
Notwithstanding anything herein to the contrary, the Plan may not be
amended to the extent the amendment will have the effect of decreasing the
accrued benefit of a Participant in violation of section 411(d)(6) of the
Code.
ACTION BY EMPLOYERS: Any action by an Employer under this Plan may be by
resolution of its Board of Directors, or by any person or persons duly
authorized by resolution of said Board to take such action.
51
SUCCESSOR EMPLOYER AND MERGER OR CONSOLIDATION OF PLANS
SUCCESSOR EMPLOYER: In the event of the dissolution, merger, consolidation or
reorganization of any Employer, provision may be made by which the Plan
as applied to such Employer will be continued by the successor; and, in
that event, the successor shall be substituted for such Employer under
the Plan. The substitution of the successor for such Employer shall
constitute an assumption of the Employer's Plan liabilities by the
successor and, if such Employer is the Company, the successor shall have
all of the powers, duties and responsibilities of the Company under the
Plan.
CONDITIONS APPLICABLE TO MERGERS OR CONSOLIDATIONS OF PLANS: In the event of
any merger or consolidation of the Plan as applied to any Employer or to
all Employers with, or transfer in whole or in part of the assets and
liabilities of the Trust Fund to another trust fund held under any other
plan of deferred compensation maintained or to be established for the
benefit of all or some of the Participants of this Plan, the assets of the
Trust Fund applicable to such Participants shall be merged or consolidated
with or transferred to the other trust fund only if:
(a) each Participant would (if either this Plan or the other plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan
had then terminated);
(b) resolutions of the Boards of Directors of the Employers under this
Plan, and of any new or successor Employer of the affected
Participants, shall authorize such transfer of assets; and, in the
case of the new or successor Employer of the affected Participants,
its resolutions shall include an assumption of liabilities with
respect to such Participants' inclusion in the new employer's plan,
and
(c) such other plan and trust are qualified under sections 401(a) and
501(a) of the Code.
PLAN TERMINATION
RIGHT TO TERMINATE: An Employer may at any time terminate the Plan with respect
to the Employees employed by said Employer. If the Plan is terminated by
fewer than all Employers, the Plan shall continue in effect for Employees
of the remaining Employers. In the event of the dissolution, merger,
consolidation or reorganization of an Employer, the Plan shall be
terminated with respect to the Employees of such Employer, unless the Plan
is continued by a successor to such Employer in accordance with Section
11.1 SUCCESSOR EMPLOYER.
52
PARTIAL TERMINATION: Upon termination of the Plan with respect to one or more
but not all of the Employers, or upon termination of the Plan by an
Employer with respect to a group of Participants, the Trustee shall
allocate and segregate for the benefit of such group of Participants, or of
the Employees then or theretofore employed by the Employer with respect to
which the Plan is being terminated, the proportionate interest of such
Participants in the Trust Fund. The funds so allocated and segregated
shall be used by the Trustee to pay benefits to or on behalf of
Participants in accordance with Section 12.3 LIQUIDATION OF THE TRUST FUND.
LIQUIDATION OF THE TRUST FUND: Upon termination of the Plan, the Accounts of
all Participants affected thereby shall become fully vested, and the
Committee shall direct the Trustee: (a) to continue to administer the
Trust Fund and pay Account balances in accordance with Section 6.4 PAYMENT
OF BENEFITS, to Participants affected by the termination upon their
termination of employment or to their Beneficiaries upon such a
Participant's death, until the Trust Fund has been liquidated, or (b) to
distribute the assets remaining in the Trust Fund, after payment of any
expenses properly chargeable thereto, to Participants, Former Participants
and Beneficiaries in proportion to their respective Account balances.
In case the Committee directs liquidation of the Trust Fund pursuant to (a)
above, the expenses of administering the Plan and Trust, if not paid by the
Employer, shall be paid from the Trust Fund.
MANNER OF DISTRIBUTION: To the extent that no discrimination in value results,
any distribution after termination of the Plan may be made, in whole or in
part, in cash, in securities or other assets in kind as the Committee (in
its discretion) may determine. All noncash distributions shall be valued
at fair market value at the date of distribution.
PLAN ADOPTION
ADOPTION PROCEDURE: With the written consent of the Company, any company which
is a subsidiary or affiliate of an Employer may adopt the Plan for its
eligible Employees by appropriate resolution, which shall specify the
effective date of such adoption and which may contain such changes and
variations in Plan terms as the Company approves.
Each subsidiary or affiliated company upon becoming an Employer shall
appoint and designate one of its officers, by resolution of its Board of
Directors, to take such action and to furnish and supply to the Committee
and the Trustee such data and information as may be necessary or required
to administer the Plan; and the Committee and the Trustee shall be entitled
to accept and rely upon all matters and facts furnished them, or either of
them, by such officer and to act thereon without incurring any liability
for so doing.
53
EXPENSES: Each participating Employer shall pay such proportionate part of the
expenses incurred in the administration of the Plan as hereinabove provided
in Section 8.2 APPOINTMENT OF COMMITTEE as the Company shall determine.
WITHDRAWAL: A participating Employer may withdraw from the Plan by giving sixty
(60) days' written notice of its intention to the Company, unless a shorter
notice shall be agreed to by the Company; provided, however, that such
withdrawal shall be subject to the provisions of Article XII PLAN
TERMINATION.
TRANSFERRED ASSETS: If an Employer adopting the Plan already maintains a thrift
or profit sharing plan covering employees who will be covered by this Plan,
it may, with the consent of the Company, provide in its resolution adopting
this Plan for the merger, restatement and continuation, without
discontinuance or termination, of its plan by this Plan. In such case, the
account balances of employees in such previous plan shall be valued as of
the date the Employer adopts this Plan and such account balances shall be
transferred to the Trust Fund and shall constitute initial Account balances
under this Plan for the Participants to whom they pertain.
TOP-HEAVY PROVISIONS
GENERAL: Notwithstanding anything herein to the contrary, the following
provisions shall apply with respect to any Year in which the Plan is deemed
to be Top Heavy.
DEFINITIONS:
(a) KEY EMPLOYEE: Any Employee or former Employee (and the Beneficiaries
of such Employee) who at any time during the determination period was:
(i) an officer of the Employer if such individual's annual
Compensation exceeds fifty percent (50%) of the dollar
limitation under section 415(b) of the Code for the
calendar year in which any such Year ends,
(ii) an owner (or considered an owner under section 318 of the
Code) of one of the ten (10) largest interests in the
Employer if such individual's Compensation exceeds one
hundred percent (100%) of such dollar limitation under
section 415(c)(1)(A) of the Code,
(iii) an owner of more than a five percent (5%) interest in
the Employer, or
(iv) an owner of more than a one percent (1%) interest in the
Employer who has annual Compensation of more than one
hundred fifty thousand dollars ($150,000).
54
An officer is defined as an actual officer of the Employer, provided that
not more than the greater of three (3) Employees or ten percent (10%) of
the Employees (but in no event more than fifty (50) Employees) shall be
considered as officers in determining whether a plan is Top Heavy.
The determination period is the Year containing the Determination Date and
the four (4) preceding Years. The determination of who is a Key Employee
will be made in accordance with section 416(i)(1) of the Code, and the
regulations thereunder.
(b) NON-KEY EMPLOYEE: Any Employee who is not included in the definition
of Key Employee.
(c) TOP-HEAVY PLAN: This Plan is Top Heavy if any of the following
conditions exists:
(i) If the Top-Heavy Ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group of plans.
(ii) If this Plan is a part of a Required Aggregation Group of
plans but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the group of plans exceeds sixty percent
(60%).
If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio of the Permissive Aggregation Group exceeds sixty
(60%).
(d) TOP-HEAVY RATIO:
(i) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and
the Employer has not maintained any defined benefit plan
which during the five (5) year period ending on the
Determination Date(s) has or has had accrued benefits, the
Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of the Account balances of
all Key Employees as of the Determination Date(s) (including
any part of any Account balance distributed in the five (5)
year period ending on the Determination Date(s)), and the
denominator of which is the sum of all Account balances
(including any part of any Account balance distributed in
the five (5) year period ending on the Determination
Date(s)), of all Participants as of the Determination
Date(s), both computed in
55
accordance with section 416 of the Code, and the
regulations thereunder. Both the numerator and
denominator of the Top-Heavy Ratio are adjusted to
reflect any contribution not actually made as of the
Determination Date, but which is required to be taken
into account on that date under section 416 of the Code,
and the regulations thereunder.
(ii) If the Employer maintains one or more defined contribution
plans (including any Simplified Employee Pension Plan) and
the Employer maintains or has maintained one or more defined
benefit plans which during the five (5) year period ending
on the Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or Permissive
Aggregation Group as appropriate is a fraction, the
numerator of which is the sum of the Account balances under
the aggregated defined contribution plan or plans for all
Key Employees, determined in accordance with subparagraph
(i) above, and the present value of accrued benefits under
the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s)), and the
denominator of which is the sum of the Account balances
under the aggregated defined contribution plan or plans for
all Participants, determined in accordance with subparagraph
(i) above, and the present value of accrued benefits under
the defined benefit plan or plans for all Participants as of
the Determination Date(s), all determined in accordance with
section 416 of the Code, and the regulations thereunder.
The accrued benefits under a defined benefit plan in both
the numerator and denominator of the Top-Heavy Ratio are
adjusted for any distribution of an accrued benefit made in
the five (5) year period ending on the Determination Date.
(iii) For purposes of subparagraphs (i) and (ii) above, the
value of Account balances and the present value of accrued
benefits will be determined as of the most recent
Determination Date, except as provided in section 416 of the
Code, and the regulations thereunder for the first and
second Years of a defined benefit plan. The Account
balances and accrued benefits of a Participant (1) who is
not a Key Employee but who was a Key Employee in a prior
year, or (2) who has not been employed (as defined by
section 416(g) of the Code) by the Company maintaining the
Plan at any time during the five (5) year period ending on
the Determination Date will be disregarded. The calculation
of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into
account will be made in accordance with section 416 of the
Code, and the regulations thereunder. When aggregating
plans, the value of Account balances and accrued benefits
will be
56
calculated with reference to the Determination Date
that falls within the same calendar year.
(e) PERMISSIVE AGGREGATION GROUP: The required aggregation group of plans
plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy
the requirements of section 401(a)(4) and 410 of the Code.
(f) REQUIRED AGGREGATION GROUP: (i) Each qualified plan of the Employer
in which at least one Key Employee participates, and (ii) any other
qualified plan of the Employer which enables a plan described in (i)
to meet the requirements of sections 401(a)(4) and 410 of the Code.
(g) DETERMINATION DATE: For any Year subsequent to the first Year, the
last day of the preceding Year.
MINIMUM ALLOCATION REQUIREMENTS:
(a) Except as otherwise provided in subsections (c) and (d) below, the
Employer Contributions (excluding Salary Deferral Contributions and
Matching Employer Contributions) and forfeitures for the Year
allocated on behalf of any Participant who is not a Key Employee shall
not be less than the lesser of three percent (3%) of such
Participant's Compensation or, in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy section 401
of the Code, the largest percentage of Employer Contributions
(including Salary Deferral Contributions and Matching Employer
Contributions) and forfeitures, as a percentage of the first two
hundred thousand dollars ($200,000) of the Key Employee's
Compensation, allocated on behalf of any Key Employee for that year.
The minimum allocation is determined without regard to any Social
Security contribution.
This minimum allocation shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive
an allocation, or would have received a lesser allocation for the Year
because of (i) the Participant's failure to complete 1,000 hours of
service (or any equivalent provided in the Plan), (ii) the
Participant's failure to make mandatory contributions to the Plan, or
(iii) Compensation less than a stated amount.
For purposes of computing the minimum allocation, Compensation means the
amount reported on the Participant's Internal Revenue Service
Form W-2, Wage and Tax Statement (or in the event such reporting form
is at some future time change modified or amended, such successor
corresponding form) for the Year. Notwithstanding the foregoing, for
Years beginning after December 31, 1988, in determining if an
individual is a Key Employee,
57
Compensation shall include amounts which are contributed by the
Employer pursuant to a salary reduction agreement or salary deferral
agreement which are not included in the gross income of the
Participant under sections 125, 402(a)(8), 402(h) or 403(b) of the
Code.
(c) The provision of subsection (a) above shall not apply to any
Participant who was not employed by the Employer on the last day of
the Year.
(d) The provision in (a) above shall not apply to any Participant to the
extent the Participant is covered under any other plan or plans of the
Company and the Company has provided that the minimum allocation or
benefit requirement applicable to Top-Heavy plans will be met in the
other plan or plans.
(e) The minimum allocation required (to the extent required to be
nonforfeitable under section 416(b) of the Code) may not be forfeited
under section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
SPECIAL 415 LIMITATIONS: In any Year in which the Plan is deemed to be a Top-
Heavy Plan, the number 1.25 shall be replaced by the number 1.0 to the
extent required under section 416(h) of the Code and regulations issued
thereunder; provided, however, that such adjustment will not occur where
benefits for Key Employees do not exceed ninety percent (90%) of total
benefits and additional benefits are provided for Non-Key Employees in
accordance with the provisions of section 416(h)(2)(A) and (B) of the Code.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of
this __ day of _________, 1996.
ATTEST: UNITED STATIONERS INC.
By:
Its:
58