Exhibit 10.8
MID AMERICA FEDERAL SAVINGS BANK
EMPLOYEES' PROFIT SHARING PLAN
(Adopted effective July 1, 1983, and conformed to amendments made
effective July 1, 1987, July 1, 1989, January 28, 1992, July 1,
1992, January 1, 1993, July 1, 1994, and July 1, 1995.)
TABLE OF CONTENTS
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PAGE NO.
Section 1. Plan Identity 1
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1.1 Name 1
1.2 Purpose 1
1.3 Effective Date 1
1.4 Fiscal Period 1
1.5 Single Plan for All Employers 1
1.6 Interpretation of Provisions 1
Section 2. Definitions 1
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Section 3. Eligibility for Participation 11
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3.1 Eligibility to Receive Employer Matching and
Employer Discretionary Contributions 11
3.1(a) Initial Eligibility 11
3.1(b) Eligibility Year 12
3.1(c) Recognized Absence 12
3.1(d) Maternity or Paternity Leave 12
3.1(e) Certain Employees Ineligible 12
3.1(f) Enrollment 13
3.1(g) Waiver of Participation 13
3.1(h) Participation and Reparticipation 13
3.2 Eligibility to Make Elective Deferral
Contributions 13
3.2(a) Initial Eligibility 13
3.2(b) Enrollment 13
Section 4. Contributions 14
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4.1 Contributions by Employer 14
4.1(a) Elective Deferral Contributions 14
4.1(b) Matching Contributions 14
4.1(c) Discretionary Contributions 15
4.1(d) Qualified Matching Contributions 15
4.1(e) Qualified Non-elective Contributions 15
4.2 Contributions by Participants 15
4.2(a) Nondeductible Voluntary Contributions 15
4.2(b) Rollover Contributions 15
4.3 Excess Elective Deferral Contributions 16
4.4 Actual Deferral Percentage Test 16
4.5 Excess Contributions 17
4.6 Recharacterization 18
4.7 Actual Contribution Percentage Test 19
4.8 Excess Aggregate Contributions 20
4.9 Conditions as to Contributions 21
4. Contributions Not Forfeitable 21
Section 5. Allocations 21
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5.1 Contributions 21
5.1(a) Employer Contribution Account 22
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5.1(b) Voluntary Contribution Account 23
5.1(c) Rollover Contribution Account 23
5.1(d) Elective Deferral Account 23
5.2 Forfeitures 23
5.3 Income on Investments 23
5.3(a) Employer Contribution, Voluntary Contribution,
and Rollover Contribution Accounts 23
5.3(b) Elective Deferral Accounts 24
Section 6. Limitations on Contributions and Allocations 24
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6.1 Limitation on Annual Additions 24
6.2 Coordinated Limitation with Other Plans 25
6.3 Effect of Limitations 25
Section 7. Investments 26
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7.1 General Fund 26
7.2 Participation Direction of Assets from
General Fund to Employer Stock 26
7.3 Elective Deferral Accounts 26
7.4 Voting of Employer Stock 27
7.5 Restrictions on Insider Trading 27
Section 8. Vesting 28
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8.1 Vesting Schedule 28
8.2 Computation of Vesting Years 28
8.3 Full Vesting upon Certain Events 29
8.4 Full Vesting upon Plan Termination 29
8.5 Forfeiture, Repayment, and Restoral 29
8.6 Accounting for Forfeitures 29
8.7 Vesting and Nonforfeitability 29
Section 9. Payment of Benefits 30
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9.1 Upon Termination of Employment 30
9.2 Upon Death of Participant 30
9.2(a) Distribution Options if Distribution to
Participant Have Not Begun 31
9.2(b) Distribution Options if Distribution to
Participant Have Begun 31
9.3 Upon Attainment of Age 70 1/2 31
9.4 In-Service Distributions 31
9.4(a) Non-deductible Voluntary Contribution 31
9.4(b) Hardship Distribution 32
9.5 Type of Payment 33
9.5(a) Direct Rollover 33
9.5(b) Payment To Participant or Beneficiary 33
9.6 Form of Payment 33
9.6(a) Cash or "In Kind" 33
9.6(b) Employer Stock 33
9.6(c) Annuity 34
9.7 Timing of Distribution 34
9.8 Deemed Distribution 34
9.9 Qualified Domestic Relations Order 35
9.10 Beneficiary Designation 35
9.11 Marital Status of Participant 36
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Section 10. Rules Governing Benefit Claims and Review
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of Appeals 36
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10.1 Claim for Benefits 36
10.2 Notification by Committee 36
10.3 Claims Review Procedure 37
Section 11. Administration of Plan 37
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11.1 Authority of Committee 37
11.2 Identity of Committee 37
11.3 Duties of Committee 38
11.4 Valuation of Employer Stock 38
11.5 Compliance with ERISA 38
11.6 Action by Committee 38
11.7 Execution of Documents 38
11.8 Adoption of Rules 38
11.9 Responsibilities to Participants 38
11.10 Alternate Payees in Event of Incapacity 39
11.11 Idemnification by Employers 39
11.12 Nonparticipation by Interested Member 39
Section 12. Powers and Duties of Plan Trustee 39
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12.1 Appointment of Trustees 39
12.2 Basic Responsibilities of Trustees 40
12.3 Investment Powers and Duties 40
12.4 Duties Regarding Payment of Benefits 42
12.5 Execution of Contracts and Payment of Benefits 42
12.6 Trustee Expenses 42
12.7 Trust Fund Annual Report 42
12.8 Audit 43
12.9 Idemnification by Employers 43
12.10 Nonparticipation by Interested Member 43
Section 13. Amendment and Termination of Plan 44
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13.1 Adoption of Plan by Other Employers 44
13.2 Adoption of Plan by Successor 44
13.3 Right to Amend or Terminate Plan 44
Section 14. Miscellaneous Provisions 45
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14.1 Plan Creates No Employment Rights 45
14.2 Nonassignability of Benefits 45
14.3 Limit of Employer Liability 45
14.4 Treatment of Expenses 45
14.5 Number and Gender 45
14.6 Nondiversion of Assets 45
14.7 Separability of Provisions 46
14.8 Service of Process 46
14.9 Governing State Law 46
Section 15. Top-Heavy Provisions 46
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15.1 Determination of Top-Heavy Status 46
15.2 Minimum Contributions 48
15.3 Top-Heavy Vesting Schedule 48
15.4 Maximum Compensation 48
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SECTION 1 - PLAN IDENTITY
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1.1 Name. The name of this Plan is "MidAmerica Federal Savings Bank Employees'
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Profit Sharing Plan".
1.2 Purpose. The purpose of this Plan Document is to describe the terms and
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conditions under which contributions made pursuant to the Plan will
becredited and paid to the Participants and their Beneficiaries.
1.3 Effective Date. The Effective Date of this Plan is July 1, 1983.
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1.4 Fiscal Period. This Plan shall be operated on the basis of a July 1 - June
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30 fiscal year for the purpose of keeping the Plan's books and records, and
distributing or filing any reports or returns required by law.
1.5 Single Plan for All Employers. This Plan shall be treated as a single plan
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with respect to all participating Employers for the purpose of crediting
contributions and forfeitures, distributing benefits, determining whether
there has been any termination of Service, and applying the limitations set
forth in Section 6.
1.6 Interpretation of Provisions. The Employers intend this Plan and Trust to
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be a qualified profit-sharing plan under Section 401(a) of the Code. The
Plan and Trust shall be interpreted and applied in a manner consistent with
this intent and shall be administered at all times and in all respects in a
nondiscriminatory manner.
SECTION 2 - DEFINITIONS
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The following words and phrases, for which the first letter is capitalized,
shall have the meaning specified when used in this Plan, unless the context
clearly indicates otherwise:
"Account" means a Participant's interest in the assets accumulated under
this Plan as expressed in terms of a separate account balance which is
periodically adjusted to reflect contributions, the Plan's investment
experience, distributions, and forfeitures.
"Active Participant" means any Employee who has satisfied the eligibility
requirements of Section 3.1 and who qualifies as an Active Participant for
a particular Plan Year under Section 4.1.
"Actual Contribution Percentage" means, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (i) Employer Matching
Contributions and Employee Voluntary Contributions actually paid to the
Trust on behalf of such Participant for the Plan Year to (ii) the
Participant's Total Compensation for such Plan Year, as set forth in
Section 4.7.
"Actual Deferral Percentage" means, for a specified group of Participants
for a Plan Year, the average of the ratios (calculated separately for each
Participant in such group) of (i) the amount of Employer contributions
actually paid to the Trust on behalf of such Participant for the Plan Year
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to (ii) the Participant's Total Compensation for such Plan Year, as set
forth in Section 4.4. Employer contributions on behalf of any Participant
shall include(i) any Elective Deferrals made pursuant to the Participant's
deferral election (including Excess Elective Deferrals of Highly
Compensated Employees), but excluding (a) Excess Elective Deferrals of Non-
highly Compensated Employees that arise solely from Elective Deferrals made
under the Plan or plans of this Employer and (b) Elective Deferrals that
are taken into account in the Contribution Percentage test(provided the ADP
test is satisfied both with and without exclusion of these Elective
Deferrals); and (ii) at the election of the Employer, Qualified Non-
elective Contributions and Qualified Matching Contributions. For purposes
of computing the Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Elective Deferrals shall be treated
as a Participant on whose behalf no Elective Deferrals are made.
"Aggregate Limit" means the sum of (i) 125 percent of the greater of the
ADP of the Non-highly Compensated Employees for the Plan Year or the ACP of
Non-highly Compensated Employees under the Plan subject to Section 401(m)
of the Code for the Plan Year beginning with or within the Plan Year of the
CODA and (ii) the lesser of 200% or two plus the lesser of such ADP or ACP.
"Lesser" is substituted for "greater" in (i) above, and "greater" is
substituted for "lesser" after "two plus the" in (ii) if it would result in
a larger Aggregate Limit.
"Anniversary Date" means the last day of each Plan Year.
"Beneficiary" means the person, persons, or entity designated by a
Participant to receive benefits payable under the Plan on the Participant's
death. In the absence of any designation, or if all the designated
Beneficiaries shall die before the Participant dies or shall die before all
benefits have been paid, the Participant's Beneficiary shall be his
surviving Spouse, if any, or his estate if he is not survived by a spouse.
The Committee may rely upon the advice of the Participant's executor or
administrator as to the identity of the Participant's Spouse.
"Break in Service" means any five or more consecutive 12-month periods
beginning July 1 in which an Employee has 500 or fewer Hours of Service per
period. Solely for this purpose, an Employee shall be considered employed
for his normal hours of paid employment during a Recognized Absence, unless
he does not resume his Service at the end of the Recognized Absence.
Further, if an Employee is absent for any period beginning on or after
January 1, 1985, (i) by reason of the Employee's pregnancy; (ii) by reason
of the birth of the Employee's child; (iii) by reason of the placement of
a child with the Employee in connection with the Employee's adoption of the
child; or (iv) for purposes of caring for such child for a period beginning
immediately after such birth or placement, the Employee shall be credited
with the Hours of Service which would normally have been credited but for
such absence, up to a maximum of 501 Hours of Service, in the first 12-
month period which would otherwise be counted toward a Break in Service.
"Cash Compensation" means a Participant's compensation from his Employer
with respect to that portion of a Plan Year in which he is an Active
Participant. A Participant's Cash Compensation shall be based upon the
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cash method of accounting; overtime pay, bonuses, stock bonuses,
commissions, taxable sick pay, severance pay, any compensation deferred
under a qualified cash or deferred arrangement, and similar items shall be
included, but any compensation income realized under a stock option,
amounts paid by or received from an Employer to cover travel,
entertainment, moving, or similar expenses, and the value of any fringe
benefits not received in cash shall be excluded.
Notwithstanding anything herein to the contrary, if the Cash Compensation
of any Participant consists of or includes commissions, then the
Participant's Cash Compensation eligible for the allocation of
contributions and forfeitures shall exclude any Cash Compensation in any
Plan Year in excess of $75,000, effective with the Plan Year beginning July
1, 1992, with adjustment for cost of living increases identical to the cost
of living increases announced by the Internal Revenue Service for
retirement plan limitations.
A Participant's Cash Compensation shall exclude any compensation in any
Plan Year beginning after 1988 in excess of $200,000 (or the limit
currently in effect under Section 401(a)(17) of the Code).
For any Plan Year beginning after 1993, a Participant's Cash Compensation
shall exclude any compensation in excess of the 1993 Omnibus Budget
Reconciliation Act (OBRA "93) annual compensation limit of $150,000, as
adjusted for increases in cost of living in accordance with Section 401(a)
(17)(B) of the Code.
In any Plan Year beginning after 1994, a Participant's Cash Compensation
shall exclude any compensation paid to a Participant which results from the
sale of any vacation benefits.
"Code" means the Internal Revenue Code of 1986, as amended or replaced from
time to time.
"Committee" means the Committee responsible for the administration of this
Plan in accordance with Section 11.
"Company" means MidAmerica Federal Savings Bank, and any entity which
succeeds to the business of MidAmerica Federal Savings Bank and adopts this
Plan as its own pursuant to Section 13.2.
"Contract" means a life insurance policy or annuity contract.
"Contribution Percentage" means the ratio (expressed as a percentage) of
the Participant's Contribution Percentage Amounts to the Participant's
Total Compensation for the Plan Year (whether or not the Employee was a
Participant for the entire Plan Year).
"Contribution Percentage Amounts" means the sum of the Employee Voluntary
Contributions, Matching Contributions, Qualified Matching Contributions (to
the extent not taken into account for purposes of the ADP test), and
Qualified Non-elective Contributions (to the extent not take into account
for purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the contributions to
which they
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relate are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions. Elective Deferrals (to the extent not taken into account for
purposes of the ADP test) may be included in the Contribution Percentage
Amounts.
"Direct Rollover" means a payment by the Plan to the Eligible Retirement
Plan specified by the Distributee.
"Disability" means only a disability which renders the Participant unable,
as a result of bodily or mental disease or injury, to perform the duties
for an Employer for which he was responsible prior to the occurrence of
such bodily or mental disease or injury, which disability is expected to be
permanent or of long and indefinite duration. However, this term shallnot
include any disability directly or indirectly resulting from or related to
habitual drunkenness or addiction to narcotics, a criminal act occurring
while compensation to the Participant is suspended, or any injury which is
intentionally self-inflicted. Further, this term shall apply only if (i)
the Participant is sufficiently disabled to qualify for the payment of
disability benefits under the federal Social Security Act or Veterans
Disability Act; or (ii) the Participant's disability is certified by a
physician selected by the Committee.
Unless the Participant is sufficiently disabled to qualify for disability
benefits under the federal Social Security Act or Veterans Disability Act,
the Committee may require the Participant to be appropriately examined from
time to time by one or more physicians chosen by the Committee, and no
Participant who refuses to be examined shall be treated as having a
disability. In any event, the Committee's good faith decision as to
whether a Participant's Service has been terminated by disability shall be
final and conclusive.
"Discretionary Contribution" means an optional Employer Contribution made
to the Plan, with the amount of the contribution, if any, determined by the
Employer each Plan Year.
"Distributee" means 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.
"Early Retirement" means retirement on or after a Participant's attainment
of age 55.
"Elective Deferral Contribution" means any Employer contribution to the
Plan that is made pursuant to a Participant's Elective Deferral, in lieu of
cash compensation. With respect to any taxable year, an Elective Deferral
Contribution is the sum of all Employer Contributions made on behalf of
such Participant pursuant to Section 4.1(a). The Elective Deferral
Contribution shall not include any deferrals properly distributed as excess
annual additions.
"Elective Deferral Account" means an account established and maintained for
a Participant with respect to his Elective Deferral Contribution made
pursuant to Section 4.1(a).
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"Eligible Retirement Plan" means 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 an
individual retirement annuity.
"Eligible Rollover Distribution" means any distribution of all or any
portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution may not include:
(a) 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 and the Distributee's
designated Beneficiary; or
(b) any distribution for a specified period of ten years or more; or
(c) any distribution to the extent such distribution is required under
section 401(a)(9) of the Code; or
(d) the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer Stock).
"Employee" means any individual who is or has been employed or self-
employed by the Company. "Employee" shall also mean any Employee of the
Company maintaining the Plan or of any other Company required to be
aggregated with such Company under Sections 414(b), (c), (m), or (o) of the
Code. "Employee" also means an individual employed by a leasing
organization who, pursuant to an agreement between the Company and the
leasing organization, has performed services for the Company and any
related persons (within the meaning of Section 414(n) or (o) of the Code)
on a substantially full-time basis for more than one year, if such services
are of a type historically performed by employees in the Company's business
field. However, such a "leased employee" shall not be considered an
Employee if (i) he participates in a money purchase pension plan sponsored
by the leasing organization which provides for immediate participation,
immediate full vesting, and an annual contribution of at least 10 percent
of the Employee's Cash Compensation; and (ii) leased employees do not
constitute more than 20% of the Employer's total work force (including
leased employees, but excluding Highly Paid Employees and any other
employees who have not performed services for the Employer on a
substantially full-time basis for at least one year).
"Employer" means the Company or any affiliate within the purview of Section
414(b), (c), or (m), and 415(h) of the Code, any other corporation,
partnership, or proprietorship which adopts this Plan with the Company's
consent pursuant to Section 13.1, and any entity which succeeds to the
business of any Employer and adopts the Plan pursuant to Section 13.2.
"Employer Contribution Account" means an account established and maintained
for a Participant with respect to Employer Matching Contributions, Employer
Discretionary Contributions, Qualified Employer Matching Contributions, and
Qualified Employer Non-elective Contributions.
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"Employer Stock" means shares of the Company's voting common stock or
preferred stock meeting the requirements of Section 409(e)(3) of the Code
issued by an Employer or an affiliated corporation. Such term shall
specifically include the voting common or preferred stock of MAF Bancorp,
Inc., the Company's holding company.
"Entry Date" means January 1 and July 1 of each Plan Year. "ERISA" means
the Employee Retirement Income Security Act of 1974(P.L. 93-406, as
amended).
"ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
93-406, as amended).
"Excess Aggregate Contributions" means, with respect to any Plan Year, the
excess of the aggregate amount of the Employer Matching Contributions made
pursuant to Section 4.1(b) and (d), and any Qualified Non-elective
Contributions or Elective Deferral Contributions taken into account
pursuant to Section 4.8 on behalf of Highly Compensated Participants for
such Plan Year, over the maximum amount of such contributions permitted
under the limitations as set forth in Section 6.
"Excess Contributions" means, with respect to any Plan Year, the excess of
Elective Deferral Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such
contributions permitted as set forth in Section 4.5. Excess Contributions
shall be treated as an "annual addition" pursuant to Section 6.1.
"Excess Elective Deferrals" means those Elective Deferral Contributions
that are includible in a Participant's gross income under Section 402(g) of
the Code to the extent such Participant's Elective Deferral Contributions
for a taxable year exceed the dollar limitation under such Code section.
Excess Elective Deferral Contributions shall be treated as annual additions
under the Plan, unless such amounts are distributed no later than the first
April 15 following the close of the Participant's taxable year.
"Family Member" means, with respect to an affected Participant, such
Participant's Spouse, such Participant's lineal descendants and ascendants,
and their spouses, as described in Section 414(q)(6)(B) of the Code.
"Fiscal Year" means the Employer's accounting year of 12 months beginning
on July 1 and ending on June 30 of the following year.
"Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs after a 1-Year Break in Service.
"General Fund" means all the investments in the Trust, as set forth in
Section 7.1, which have been made with Matching Contributions,
Discretionary Contributions, Qualified Matching Contributions, Qualified
Non-elective Contributions, Employee Voluntary Contributions, and Employee
Rollover Contributions, plus the income (or loss) from these investments,
shall be treated as from a single fund, with the following exception.
Vested assets which have been directed by Plan Participants to be invested
in Employer Stock, as set forth in Section 7.2, shall be segregated and
held in the Employer Stock Fund.
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"Highly Compensated Employee" for any Plan Year means an Employee who,
during either of that or the immediately preceding Plan Year (i) owned
more than five percent of the outstanding equity interest or the
outstanding voting interest in any Employer; (ii) had Total Compensation
exceeding $75,000 (as adjusted pursuant to Section 415(d) of the Code);
(iii) had Total Compensation exceeding $50,000 (as adjusted pursuant to
Section 415(d) of the Code) and was among the most highly compensated one-
fifth of all Employees; or (iv) was at any time an officer of an Employer
and had Total Compensation exceeding $45,000 (or 50% of the currently
applicable dollar limit under Section 415(b)(1)(A) of the Code).
For this purpose:
(a) "Total Compensation" shall include any amount which is excludable
from the Employee's gross income for tax purposes pursuant to
Sections 125, 402(a)(8), 401(h)(1)(B), or 403(b) of the Code.
(b) The number of Employees in "the most highly compensated one-fifth
of all Employees" shall be determined by taking into account all
individuals working for all related Employer entities described in
the definition of "Service", but excluding any individual who has
not completed six months of Service, who normally works fewer than
17 1/2 hours per week or in fewer than six months per year, who has
not reached age 21, whose employment is covered by a collective
bargaining agreement, or who is a nonresident alien who receives no
earned income from United States sources.
(c) The number of individuals counted as "officers" shall not be more
than the lesser of (i) 50 individuals; or (ii) the greater of 3
individuals or 10 percent of the total number of Employees. If no
officer earns more than $45,000 (or the adjusted limit), then the
highest paid officer shall be a Highly Compensated Employee.
(d) A former Employee shall be treated as a Highly Compensated Employee
if such Employee was a Highly Compensated Employee when such
Employee separated from service, or if such Employee was a Highly
Compensated Employee at any time after attaining age 55.
If an Employee is, during a determination year or look-back year, a Family
Member of either a 5 percent owner who is an active or former Employee or
Highly Compensated Employee who is one of the 10 most Highly Compensated
Employees ranked on the basis of Total Compensation paid by the Employer
during such year, then the Family Member and the 5 percent owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the Family
Member and 5 percent owner or top-ten Highly Compensated Employee shall be
treated as a single Employee receiving compensation and plan contributions
or benefits equal to the sum of such compensation and contributions or
benefits of the Family Member and 5 percent owner or top-ten Highly
Compensated Employee. For purposes of this section, Family Member includes
the Spouse, lineal ascendants and descendants of the Employee or former
Employee, and the spouses of such lineal ascendants and descendants.
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The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers,
and the compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
"Hours of Service" means hours to be credited to an Employee under the
following rules:
(a) Each hour for which an Employee is paid or is entitled to be paid
for services to an Employer is an Hour of Service.
(b) Each hour for which an Employee is directly or indirectly paid or
is entitled to be paid for a period of vacation, holidays, illness,
disability, layoff, jury duty, temporary military duty, or leave of
absence is an Hour of Service. However, except as otherwise
specifically provided, no more than 501 Hours of Service shall be
credited for any single continuous period which an Employee
performs no duties. Further, no Hours of Service shall be credited
on account of payments made solely under a plan maintained to
comply with worker's compensation, unemployment compensation, or
disability insurance laws, or to reimburse an Employee for medical
expenses.
(c) Each hour for which back pay (ignoring any mitigation of damages)
is either awarded or agreed to by the Employer is an Hour of
Service. However, no more than 501 Hours of Service shall be
credited for any single continuous period during which an Employee
would not have performed any duties.
(d) Hours of Service shall be credited in any one period only under one
of the foregoing paragraphs (a), (b), and (c); an Employee may not
get double credit for the same period.
(e) If an Employer finds it impractical to count the actual Hours of
Service for any class or group of non-hourly Employees, each
Employee in that class or group shall be credited with 45 Hours of
Service for each weekly pay period in which he has at least one
Hour of Service. However, an Employee shall be credited only for
his normal working hours during a paid absence.
(f) Hours of Service to be credited on account of a payment to an
Employee (including back pay) shall be recorded in the period of
Service for which the payment was made. If the period overlaps two
or more Plan Years, the Hours of Service credit shall be allocated
in proportion to the respective portions of the period included in
the several Plan Years. However, in the case of periods of 31 days
or less, the Committee may apply a uniform policy of crediting the
Hours of Service to either the first Plan Year or the second.
(g) In all respects an Employee's Hours of Service shall be counted as
required by Section 2530.200b-2(b) and (c) of the Department of
Labor's regulations under Title I of ERISA.
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"Investment Manager" means an entity that (i) has the power to manage,
acquire, or dispose of Plan assets, and (ii) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm,
or corporation registered as an investment adviser under the Investment
Advisors Act of 1940 and the Investment Advisor Regulatory Enhancement and
Disclosure Act of 1993.
"Matching Contribution" means an Employer Contribution made to this Plan
for a Participant based on such Participant's Elective Deferral.
"Normal Retirement Date" means a Participant's 65th birthday.
"1-Year Break in Service" means a Plan Year during which an Employee has
not completed more than 500 Hours of Service and is not employed on the
last day of the Plan Year.
"Participant" means any Employee who is participating in the Plan, or who
has previously participated in the Plan and still has a balance credited to
his Account.
"Plan" means this document for the MidAmerica Federal Savings Bank
Employees' Profit Sharing Plan, including all amendments thereto.
"Plan Year" means each period of 12 consecutive months beginning on July 1
of 1983 and each succeeding year.
"Qualified Domestic Relations Order" (QDRO) means a domestic relations
order which relates to an alternate payee's right to receive all or a
portion of the benefits payable to a Participant under this Plan, with the
provision of child support, alimony payments, or marital property rights to
a Spouse, former spouse, child, or other dependent of a Participant, that
the Committee has determined meets the requirements of Section 414(p) of
the Code.
"Qualified Matching Contributions" means the Employer Contributions to the
Plan that are made pursuant to Section 4.1(d), which are subject to the
distribution and nonforfeitability requirements of Section 401(k) of the
Code.
"Qualified Non-elective Contributions" means the Employer contributions to
the Plan that are made pursuant to Section 4.1(e), which are subject to the
distribution and nonforfeitability requirements of Section 401(k) of the
Code.
"Recognized Absence" means a period for which
(a) an Employer grants an Employee a leave of absence for a limited
period, but only if an Employer grants such leaves on a
nondiscriminatory basis; or
(b) an Employee is temporarily laid off by an Employer because of a
change in business conditions; or
(c) an Employee is on active military duty, but only to the extent that
his employment rights are protected by the Military Selective
Service Act of 1967 (38 U.S.C. Section 2021).
9
"Rollover Contribution Account" means an account established and maintained
for a Participant with respect to his Direct Rollover or Rollover
Contributions made pursuant to Sections 4.2(b) and 5.1(c).
"Service" means an Employee's period(s) of employment or self-employment
with an Employer, excluding for initial eligibility purposes any period in
which the individual was a nonresident alien and did not receive from an
Employer any earned income which constituted income from sources within the
United States. An Employee's Service shall include any service which
constitutes service with a predecessor employer within the meaning of
Section 414(a) of the Code. An Employee's Service shall also include any
service with an entity which is not an Employer, but only either (i) for a
period after 1975 in which the other entity is a member of a controlled
group of corporations or is under common control with other trades and
businesses within the meaning of Section 414(b) or 414(c) of the Code, and
a member of the controlled group or one of the trades and businesses is an
Employer; or (ii) for a period after 1979 in which the other entity is a
member of an affiliated service group within the meaning of Section 414(m)
of the Code, and a member of the affiliated service group is an Employer.
"Spouse" means the individual, if any, to whom a Participant is lawfully
married on the date benefit payments to the Participant are to begin, or on
the date of the Participant's death, if earlier.
"Suspense Account" means the total forfeitable portion of all former
Participants' Accounts which have not yet become a Forfeiture during any
Plan Year.
"Total Compensation" means a Participant's wages, salary, overtime,
bonuses, commissions, and any other amounts received for personal services
rendered while in Service from any Employer or an Affiliate (within the
purview of Section 414(b), (c), and (m) of the Code, plus his earned income
from any such entity as defined in Section 401(c)(2) of the Code if he is
self-employed. Total Compensation shall include (i) severance payments and
amounts paid as a result of termination, (ii) amounts excludable from
gross income under Section 911 or deductible under Section 913 of the Code,
(iii) amounts described in Sections 104(a)(3), 105(a), and 105(h) of the
Code to the extent includable in gross income, (iv) amounts described in
Section 105(d) of the Code, (v) amounts received from an Employer for
moving expenses which are not deductible under Section 217 of the Code,
(vi) amounts includable in gross income in the year of, and on account of,
the grant of a nonqualified stock option, (vii) amounts includable in
gross income pursuant to Section 83(b) of the Code, (viii) amounts
includable in gross income under an unfunded nonqualified plan of deferred
compensation; but shall exclude (ix) Employer contributions to or amounts
received from a funded or qualified plan of deferred compensation, (x)
Employer contributions to a simplified employee pension account to the
extent deductible under Section 219 of the Code, (xi) Employer
contributions to a Section 403(b) annuity contract, (xii) amounts
includable in gross income pursuant to Section 83(a) of the Code, (xiii)
amounts includable in gross income upon the exercise of nonqualified stock
option or upon the disposition of stock acquired under any stock option,
and (xiv) any other amounts expended by the Employer on the Participant's
behalf which are excludable from his income or which receive special tax
benefits.
10
A Participant's Total Compensation shall exclude any compensation in any
limitation year beginning after 1988 in excess of $200,000 (or the limit
currently in effect under Section 401(a)(17) of the Code).
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual compensation of
each Employee taken into account under the Plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17) of the Internal Revenue Code.
The cost-of-living adjustment in effect for a calendar year applies to any
period, not exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the denominator of which
is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the first day
of the first Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
"Trust" or "Trust Fund" means the trust fund created under this Plan.
"Trustee" means the individuals selected from time to time by the Company
to serve as co-trustees of the Trust Fund.
"Valuation Date" means the last day of the Plan Year (June 30), the last
day of each quarter during the Plan Year (September 30, December 31, March
31, and June 30), and any other dates selected by the Committee, on which
the income (or losses) for the Trust Fund shall be allocated.
"Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
"Vesting Year" means a period of Service credited to a Participant pursuant
to Section 8.2 for purposes of determining his Vested interest.
"Voluntary Contribution Account" means an account established and
maintained for a Participant with respect to his nondeductible Voluntary
Contributions made pursuant to Section 4.2(a) and 5.1(b).
"Year of Service" means the computation period of 12 consecutive months
during which an Employee has at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an
Hour of Service. The participation computation period beginning after a
11
1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation
period shall shift to the Plan Year which includes the anniversary of the
date on which the Participant first performed an Hour of Service.
A Year of Service for vesting purposes will begin, for the first 12-month
period, with the date on which the Employee first performs an Hour of
Service. In the subsequent 12-month periods, it will begin on the first
day of the Plan Year containing the first anniversary of the Employee and
will end on the last day of that Plan Year, and each Plan Year thereafter.
SECTION 3 - ELIGIBILITY FOR PARTICIPATION
-----------------------------------------
3.1 Eligibility to Receive Employer Matching Contributions and Employer
-------------------------------------------------------------------
Discretionary Contributions.
---------------------------
(a) Initial Eligibility.
An Employee of the Company who
(i) has completed one Year of Service, and
(ii) has attained the age of 21,
shall be eligible to participate in the Plan as of the Entry Date
coinciding with or next following the later of the following dates:
(i) the last date of the Employee's first Eligibility Year, or
(ii) the Employee's 21st birthday.
However, if an Employee is not in active Service with an Employer on
the date he would otherwise first be eligible to participate in the
Plan, his eligibility to participate in the Plan shall be deferred
until the next day he is in Service.
(b) Eligibility Year.
An "Eligibility Year" means an applicable eligibility period (as
defined below) in which the Employee has at least 1,000 Hours of
Service. For this purpose:
(i) an Employee's first "eligibility period" is the 12-consecutive
month period beginning on the first day on which he performs an
Hour of Service, and
(ii) his succeeding 12-consecutive month periods commence with the
first Plan Year which commences prior to the first anniversary of
the Employee's employment commencement date, regardless of
whether the Employee is entitled to be credited with 1,000 Hours
of Service during the initial eligibility computation period.
12
(c) Recognized Absence.
An Employee shall be considered employed for his normal hours of paid
employment during a Recognized Absence, unless he does not resume his
Service at the end of the Recognized Absence.
(d) Maternity or Paternity Leave.
Beginning on or after January 1, 1985, if any Employee is absent for
any period
(i) by reason of the Employee's pregnancy,
(ii) by reason of the birth of the Employee's child,
(iii) by reason of the placement of a child with the Employee in
connection with the Employee's adoption of the child, or
(iv) for purposes of caring for such child for a period beginning
immediately after such birth or placement,
the Employee shall be credited with the Hours of Service which would
normally have been credited but for such absence, up to a maximum of
501 Hours of Service, in the first 12-month period which would
otherwise be counted toward a Break in Service.
(e) Certain Employees Ineligible.
No Employee shall be eligible to participate while his Service is
covered by a collective bargaining agreement between an Employer and
the Employee's collective bargaining agreement if
(i) retirement benefits have been the subject of good faith
bargaining between the Employer and the representative, and
(ii) the collective bargaining agreement does not provide for the
Employee's participation.
(f) Enrollment.
The Employer shall notify all Employees when they become eligible to
participate in the Plan and shall instruct them that they may elect
not to participate. Upon request, the Committee shall provide eligible
Employees with an Agreement of Non-Participation.
(g) Waiver of Participation.
An eligible Employee may elect not to become a Participant in the Plan
by signing and delivering to the Committee the Agreement of Non-
Participation within ninety (90) days after receiving it.
Any Employee who elects not to become a Participant as of the first
Entry Date on which he was eligible may become a Participant as of any
succeeding Entry Date if he is still eligible by executing a
revocation of this Agreement of Non-Participation and delivering the
same to the Committee within ninety (90) days of any succeeding Entry
Date.
13
(h) Participation and Reparticipation.
Subject to the satisfaction of the foregoing requirements, an Employee
shall participate in the Plan during each period of his Service from
the date on which he first becomes eligible until his termination. For
this purpose, an Employee returning within five years of his
termination who previously satisfied the initial eligibility
requirements for Employer Matching, Employer Discretionary, Qualified
Matching, and Qualified Non-elective Contributions shall re-enter the
Plan as of the date of his return to Service with an Employer.
3.2 Eligibility to Make Elective Deferral Contributions.
---------------------------------------------------
(a) Initial Eligibility.
(i) Employees hired or rehired beginning with July 1, 1994.
Effective with the Plan Year beginning on July 1, 1994, an
Employee of the Company who has completed one Year of Service
shall be eligible to elect to defer a portion of his Cash
Compensation as of theEntry Date coinciding with or next following
the completion of one Year of Service. A Year of Service is a
period of 12 consecutive months during which an Employee has at
least 1000 Hours of Service.
However, if an Employee is not in active Service with an Employer
on the date he would otherwise first be eligible to participate in
the Plan, his eligibility to participate in the Plan shall be
deferred until the next day he is in Service.
There is no minimum age requirement for a Participant to be
eligible to defer a portion of his Cash Compensation.
(ii) Employees hired or regired prior to July 1, 1994.
An Employee hired or regired prior to July 1, 1994 is eligible to
elect to defer a portion of his Cash Compensation, with no Year of
Service requirement and no minimum age requirement.
(b) Enrollment.
An Employee shall elect to become a Participant by signing and
delivering to the Committee an Agreement of Participation.
14
SECTION 4 - CONTRIBUTIONS
-------------------------
4.1 Contributions by Employer.
-------------------------
All Employees shall be eligible to defer a portion of their Cash
Compensation as Elective Deferrals.
An Employee shall be eligible to receive an Employer Matching, Employer
Discretionary, Qualified Matching, and Qualified Non-elective Contributions
if he is an Active Participant.
Active Participant means a Participant who has satisfied the eligibility
requirements for these contributions, as set forth in Section 3.1, and who
has at least 1,000 Hours of Service during the current Plan Year. However,
a Participant shall not qualify as an Active Participant unless (i) he is
in active Service with an Employer on the last day of the Plan Year, or
(ii) his Service terminated during the Plan Year by reason of death.
For each Plan Year, the Employer shall contribute to the Plan:
(a) Elective Deferral Contributions.
Effective with the Plan Year beginning on July 1, 1987, an amount equal
to the total Elective Deferrals of all Participants during the Plan
Year.
The balance in each Participant's Elective Deferral Account shall be
100% vested and not subject to Forfeiture for any reason.
(i) Each Employee may elect to defer an amount not to exceed the
lesser of 15% of his Cash Compensation or the dollar limitation
contained in Section 402(g) of the Code in effect at the
beginning of such taxable year.
(ii) A Participant may elect to change the amount of his Elective
Deferral, cancel his Elective Deferral, or resume his Elective
Deferral once each quarter, or more frequently at the discretion
of the Committee.
(iii) The termination of a Participant's Service with an Employer shall
be deemed to revoke any Elective Deferral agreement then in
effect, effective immediately following the close of the pay
period within which such termination occurs.
(iv) A Participant may elect to change his Elective Deferral
investment selections once each quarter, or more frequently at
the discretion of the Committee.
(b) Matching Contributions.
Effective with the Plan Year beginning on July 1, 1987, pursuant to
Section 3.1, a Matching Contribution shall be made to Elective
Deferrals made by Active Participants after their Entry Date into the
Plan as follows:
(i) A Matching Contribution of 35% shall be made to Elective
Deferrals which do not exceed 4% of a Participant's Cash
Compensation which is not in excess of $30,000.
(ii) A Matching Contribution of 25% shall be made to Elective
Deferrals which do not exceed 2% of a Participant's Cash
Compensation which is in excess of $30,000.
For any Plan Year beginning prior to July 1, 1994 and effective with
the Plan Year beginning on July 1, 1987, a Matching Contribution of 25%
was made to Elective Deferrals made after the Entry Date of an Active
Participant which did not exceed 2% of the Participant's Cash
Compensation.
15
The balance in a Participant's Employer Contribution Account based on
Matching Contributions shall be subject to the vesting schedule set
forth in Section 8.1.
(c) Discretionary Contributions.
An additional discretionary amount may be contributed from current or
accumulated net earnings by the Employer.
The balance in a Participant's Employer Contribution Account based on
Discretionary Contributions shall be subject to the vesting schedule
set forth in Section 8.1.
(d) Qualified Matching Contributions.
Qualified Matching Contributions may be made to Non-highly Compensated
Active Participants in order to satisfy the ADP and/or the ACP tests.
The Committee shall determine the amount to be allocated in order to
satisfy the ADP and/or the ACP tests.
Qualified Matching Contributions shall be 100% vested and not subject
to Forfeiture for any reason.
(e) Qualified Non-elective Contributions.
Qualified Non-elective Contributions may be made to Non-highly
Compensated Active Participants in order to satisfy the ADP and/or the
ACP tests. The Committee shall determine the amount to be allocated in
order to satisfy the ADP and/or ACP tests. Qualified Non-elective
Contributions shall be 100% vested and not subject to Forfeiture for
any reason.
4.2 Contributions by Participants
-----------------------------
(a) Nondeductible Voluntary Contributions.
A Participant may elect to contribute an amount not to exceed 10% of
his Cash Compensation as a nondeductible Voluntary Contribution.
The balance in a Participant's Voluntary Contribution Account shall be
100% vested and not subject to Forfeiture for any reason.
16
(b) Rollover Contributions.
If a Participant in this Plan receives a distribution from another
qualified retirement plan in which he was a participant, or if a
Participant in this Plan receives a distribution from his Conduit IRA,
other than a required minimum distribution, then a Rollover
Contribution to this Plan may be made on or before the 60th day after
the distribution was received by the Participant.
Effective January 1, 1993, a Participant who is eligible to receive an
Eligible Rollover Distribution from an employee's trust (as described
in Section 401(a) of the Code and tax exempt under Section 501(a) of
the Code); or an annuity plan (as described in Section 403(a) of the
Code); or an individual retirement account (as described in Section
408(a) of the Code); or an individual retirement annuity (as described
in Section 408(b) of the Code) may, pursuant to Section 401(a)(31) of
the Code and with the consent of the Trustee, have such distribution
processed as a Direct Rollover to this Plan.
The balance in a Participant's Rollover Contribution Account shall be
100% vested and not subject to Forfeiture for any reason.
4.3 Excess Elective Deferral Contributions.
--------------------------------------
If a Participant's Elective Deferral Contributions under this Plan,
together with any elective deferrals (as defined in Regulation 1.402(g)-
1(b)) made in another qualified cash or deferred arrangement (under Section
401(k) of the Code), a simplified employee pension plan (under Section
408(k) of the Code), a salary reduction arrangement (under Section
3121(a)(5)(D) of the Code), a deferred compensation plan under Section 457
of the Code), or a trust described in Section 501(c)(18) of the Code,
exceed the limitation of Section 402(g) of the Code for such Participant's
taxable year, the Participant may, not later than March 1 following the
close of his taxable year, notify the Committee in writing of such excess,
and request the withdrawal of his Excess Elective Deferrals from this Plan.
Upon proper notification by the Participant, the Committee may direct the
Trustee to distribute the excess amount (including any income attributable
to such excess amount) to the Participant not later than April 15 following
the close of the Participant's taxable year.
4.4 Actual Deferral Percentage Test.
-------------------------------
The Actual Deferral Percentage (hereinafter referred to as "ADP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ADP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
The average of the ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the average of the ADP for
Participants who are Non-highly Compensated Employees for the same Plan
Year multiplied by 1.25; or
The average of the ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the average of the ADP for
Participants who are Non-highly Compensated Employees for the
17
same Plan Year multiplied by 2.0, provided that the average of the ADP
for Participants who are Highly Compensated Employees does not exceed
the average of the ADP for Participants who are Non-highly Compensated
Employees by more than two percentage points.
The ADP for any participant who is a Highly Compensated Employee for
thePlan Year and who is eligible to have Elective Deferrals (and Qualified
Non-elective Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test) allocated to
his account under two or more arrangements described in Section 401(k) of
the code, that are maintained by the Employer, shall be determined as if
such Elective Deferrals (and, if applicable, such Qualified Non-elective
Contributions or Qualified Matching Contributions, or both) were made under
a single arrangement. If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if mandatorily disaggregated
under regulations under Section 401(k) of the Code.
In the event that this Plan satisfies the requirements of Sections 401(k),
401(a)(4), or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this section
shall be applied by determining the ADP of employees as if all such plans
were a single plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(k) of the Code only if
they have the same Plan Year.
For purposes of determining the ADP of a Participant who is a 5% owner or
one of the ten most highly-paid Highly Compensated Employees, the Elective
Deferral Contributions (and Qualified Non-elective Contributions or
Qualified Matching Contributions, or both, if treated as Elective Deferral
Contributions for purposes of the ADP test) and Total Compensation of such
Participant shall include the Elective Deferral Contributions (and, if
applicable, Qualified Non-elective Contributions and Qualified Matching
Contributions, or both) and Total Compensation for the Plan Year of Family
Members (as defined in Section 414(q)(6) of the Code). Family Members, with
respect to such Highly Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both for Participants who are
Non-highly Compensated Employees and for Participants who are Highly
Compensated Employees.
For purposes of determining the ADP test, Elective Deferrals, Qualified
Non-elective Contributions, and Qualified Matching Contributions must be
made before the last day of the 12-month period immediately following the
Plan Year to which such contributions relate.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the ADP test and the amount of Qualified Non-elective Contributions or
Qualified Matching Contributions, or both, used in such test.
The determination and treatment of ADP amounts of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary of
the Treasury.
18
4.5 Excess Contributions.
--------------------
Notwithstanding any other provision of this Plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed
no later than the last day of each Plan Year to Participants to whose
accounts such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2 1/2 months after
the last day of the Plan Year in which such excess amounts arose, a 10%
excise tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions of the Excess
Contributions attributable to each such Employee. Excess Contributions of
Participants who are subject to Family Member aggregation rules shall be
allocated among the Family Members in proportion to the Elective Deferrals
(and amounts treated as Elective Deferrals) of each Family Member that are
combined to determine the combined ADP.
Excess Contributions (including the amounts recharacterized) shall be
treated as annual additions under the Plan.
Excess Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Contributions
is the sum of (i) the income or loss allocable to the Participant's
Elective Deferral Account (and, if applicable, the Qualified Non-elective
Contribution account or the Qualified Matching Contribution account, or
both) for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the Plan Year and the
denominator is the Participant's account balance attributable to Elective
Deferrals (and Qualified Non-elective Contributions or Qualified Matching
Contributions, or both, if any such contributions are included in the ADP
test) without regard to any income or loss occurring during such Plan Year;
and (ii) 10% of the amount determined under (i) multiplied by the number of
whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if the distribution occurs
after the 15th of such month.
Excess Contributions shall be distributed from the Participant's Elective
Deferral Account and Qualified Matching Contribution Account (if
applicable) in proportion to the Participant's Elective Deferrals and
Qualified Matching Contributions (to the extend used in the ADP test) for
the Plan Year. Excess Contributions shall be distributed from the
Participant's Qualified Non-elective Contribution Account only to the
extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral Account and Qualified Matching Contribution
Account.
4.6 Recharacterization.
------------------
A Participant may treat his Excess Contributions as an amount distributed
to the Participant and then contributed by the Participant to the Plan as a
Voluntary Contribution. Recharacterized amounts will remain nonforfeitable
and subject to the same distribution requirements as Elective Deferrals.
Amounts may not be recharacterized by a Highly Compensated Employee to the
extent that such amount in combination with other Voluntary Contributions
made by that Employee would exceed 10% of his Cash Compensation, as set for
in Sections 4.2(a) and 5.1(b).
19
Recharacterization must occur no later than 2 1/2 months after the last day
of the Plan Year in which such Excess Contributions arose, and is deemed to
occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have received them in
cash.
Recharacterized amounts will be treated as Employer Contributions for
purposes of Sections 404, 409, 411, 412, 415, 416, and 417 of the Code.
4.7 Actual Contribution Percentage Test.
-----------------------------------
The Actual Contribution Percentage (hereinafter referred to as "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
The average of the ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the average of the ACP for
Participants who are Non-highly Compensated Employees for the same Plan
Year multiplied by 1.25; or
The average of the ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the average of the ACP for
Participants who are Non-highly Compensated Employees for the same Plan
Year multiplied by 2.0, provided that the average of the ACP for
Participants who are Highly Compensated Employees does not exceed the
average of the ACP for Participants who are Non-highly Compensated
Employees by more than two percentage points.
Multiple use: If one or more Highly Compensated Employees participate in
both a CODA and a plan subject to the ACP test maintained by the Employer,
and the sum of the ADP and ACP of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit, then the ACP
of those Highly Compensated Employees who also participate in a CODA will
be reduced (beginning with such Highly Compensated Employee whose ACP is
the highest) so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage Amount is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not occur if
either the ADP or ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Non-highly Compensated Employees.
For purposes of this section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his account under two or
more plans described in Section 401(a) of the Code, or arrangements
described in Section 401(k) of the Code that are maintained by the
Employer, shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more cash or deferred arrangements that
have different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate
20
plans if mandatorily disaggregated under regulations under Section 401(m)
of the Code.
In the event that this Plan satisfies the requirements of Sections 401(m),
401(a)(4), or 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this section
shall be applied by determining the Contribution Percentage of Employees as
if all such plans were a single plan. For plan years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same Plan Year.
For purposes of determining the Contribution Percentage of a Participant
who is a 5% owner or one of the ten most highly-paid Highly Compensated
Employees, the Contribution Percentage Amount and Total Compensation of
such Participant shall include the Contribution Percentage Amount and Total
Compensation for the Plan Year of Family Members (as defined in Section
414(q)(6) of the Code). Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining the
Contribution Percentage both for Participants who are Non-highly
Compensated and for Participants who are Highly Compensated Employees.
For purposes of the ACP test, Employee Voluntary Contributions are
considered to have been made in the Plan Year in which contributed to the
Trust. Matching Contributions and Qualified Non-elective Contributions will
be considered made for a Plan Year if made no later than the end of the 12-
month period beginning on the day after the close of the Plan Year.
The Employer shall maintain records sufficient to demonstrate satisfaction
of the ACP test, and the amount of Qualified Non-elective or Qualified
Marching Contributions, or both, used in such test.
The determination and treatment of the Contribution Percentage of any
Participant shall satisfy other requirements as may be prescribed by the
Secretary of the Treasury.
4.8 Excess Aggregate Contributions.
------------------------------
Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall
be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the
Family Member aggregation rules shall be allocated among the Family Members
in proportion to the Employee Voluntary and Matching Contributions (or
amounts treated as Matching Contributions) of each Family Member that are
combined to determine the combined ACP. If such Excess Aggregate
Contributions are distributed more the 2 1/2 months after the last day of
the Plan Year in which such excess amounts arose, a 10% excise tax will be
imposed on the Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual additions under
the Plan.
Excess Aggregate Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
21
Aggregate Contributions is the sum of (i) the income or loss allocable to
the Participant's Voluntary Contribution Account, Matching Contribution
Account, Qualified Matching Contribution Account (if any, and if all
amounts therein are not used in the ADP test) and, if applicable, Qualified
Non-elective Contribution Account and Elective Deferral Account for the
Plan Year multiplied by a fraction, the numerator of which is
suchParticipant's Excess Aggregate Contributions for the Plan Year and the
denominator is the Participant's account balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during such Plan Year; and (ii) 10% of the amount determined
under (i) multiplied by the number of whole calendar months between the end
of the Plan Year and the date of distribution, counting the month of
distribution if distribution occurs after the 15th of such month.
Forfeitures of Excess Aggregate Contributions shall be reallocated to the
accounts of Non-highly Compensated Employees.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a pro-rata basis from the Participant's Voluntary
Contribution Account, Matching Contribution Account, and Qualified Matching
Contribution Account (and, if applicable, the Participant's Qualified Non-
elective Contribution Account or Elective Deferral Account, or both).
4.9 Conditions as to Contributions.
------------------------------
Employers' contributions shall in all events be subject to the limitation
set forth in Section 6. Any amount contributed by an Employer due to a good
faith but erroneous determination of its deductibility under Section 404 of
the Code shall be returned to the Employer within one year after the date
on which the contribution was originally made, or within one year after its
nondeductibility has been finally determined. However, the amount to be
returned shall be reduced to take into account any adverse investment
experience within the Trust Fund in order that the balance credited to each
Participant's Account is not less than it would have been if the
contribution had never been made.
4.10 Contributions Not Forfeitable.
-----------------------------
The Participant's accrued benefit derived from Elective Deferrals,
Qualified Non-elective Contributions, Qualified Matching Contributions,
Voluntary Contributions, and Rollover Contributions is nonforfeitable.
SECTION 5 - ALLOCATIONS
-----------------------
5.1 Contributions
-------------
The Employer shall provide the Committee all information necessary to make
the allocation of Contributions and Forfeitures for each Plan Year. The
Employer shall pay the Employer Contributions to the Trustee for investment
in the Trust Fund for each Plan Year within the time prescribed by law for
the filing of the Employer's federal income tax return, including
extensions, for the Fiscal Year.
22
Elective Deferral Contributions accumulated through payroll deductions
shall be paid to the Trustee at the earliest date in which such
contributions can reasonably be segregated from the Employer's general
assets, but in any event within 90 days from the date on which such amounts
would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor Regulations 2510.3-102 are incorporated
herein by reference. Furthermore, any additional Employer Contributions
which are allocable to the Participant's Elective Deferral Account for a
Plan Year shall be paid to the Plan no later than the 12-month period
immediately following the close of such Plan Year.
(a) Employer Contribution Account.
Matching Contributions and Discretionary Contributions shall be
maintained for each Participant in the Employer Contribution Account,
subject to the vesting schedule in Section 8.1.
In addition, Qualified Matching and Qualified Non-elective
Contributions, if any, shall be maintained for each Participant in the
Employer Contribution Account, which shall be nonforfeitable.
If a Participant has satisfied the eligibility requirements for
Matching Contributions, Discretionary Contributions, Qualified Matching
Contributions, and Qualified Non-elective Contributions, is employed by
an Employer on the Anniversary Date, and has at least 1,000 Hours of
Service during the Plan Year, his share of these Contributions shall be
determined as follows:
(i) Employer Matching Contributions:
An Active Participant shall receive a Matching Contribution of 25%
of Elective Deferrals made after the Participant's Entry Date,
which do not exceed 2% of the Participant's Cash Compensation,
pursuant to Section 4.1(b).
(ii) Employer Discretionary Contributions:
A Discretionary Contribution shall be allocated to the account of
each Active Participant in proportion to the ratio which his Cash
Compensation for the Plan Year bears to the Cash Compensation of
all Active Participants for such Plan Year, pursuant to Section
4.1(c).
(iii)Qualified Matching Contributions:
An optional Qualified Matching Contribution shall be allocated to
the account of each Non-highly Compensated Employee who is an
Active Participant with Elective Deferrals made after the
Participant's Entry Date in such Plan Year, pursuant to Section
4.1(d). The percent of the Qualified Matching Contribution shall
be discretionary.
23
(iv) Qualified Non-elective Contributions:
An optional Qualified Non-elective contributions shall be
allocated to the account of each Non-highly Compensated Employee
who is an Active Participant in proportion to the ratio which his
Cash Compensation for the Plan Year bears to the Cash Compensation
of all Non-highly Compensated Employees who are Active
Participants for such Plan Year, pursuant to Section 4.1(e).
Employer Contribution Account assets shall be invested by the Plan
Trustee in the Plan's General Fund, together with the Voluntary
Contribution Account assets and the Rollover Contribution Account cash
assets.
(b) Voluntary Contribution Account.
A Participant may elect to contribute a maximum of 10% of his Cash
Compensation each Plan Year as nondeductible Voluntary Contributions.
Voluntary Contributions shall be maintained for each Participant in the
Voluntary Contribution Account.
Voluntary Contribution Account assets shall be invested by the Plan
Trustee in the Plan's General Fund, together with the Employer
Contribution Account assets and the Rollover Contribution Account cash
assets.
(c) Rollover Contribution Account.
Rollover Contributions shall be maintained for each Participant in the
Rollover Contribution Account.
Rollover Contribution Account cash assets shall be invested by the Plan
Trustee in the Plan's General Fund, together with the Employer
Contribution Account assets and the Voluntary Contribution Account
assets.
If a Rollover Contribution consists of property other than cash, such
property shall be considered an earmarked investment for such
Participant.
(d) Elective Deferral Account.
Elective Deferral Contributions shall be maintained for each
Participant in an Elective Deferral Account.
5.2 Forfeitures.
-----------
If a Participant has satisfied the eligibility requirements for Employer
Matching and Employer Discretionary Contributions, is employed by the
Company on an Anniversary Date, and has at least 1,000 Hours of Service
during the Plan Year, his share of Forfeitures shall be determined in the
following manner.
Any assets which have become Forfeitures since the last Anniversary Date
shall first be used to reinstate any previously forfeited account balances
of former Participants, if any, pursuant to Section 8.5. The remaining
24
Forfeitures, if any, shall be allocated to each Active Participant in
proportion to the ratio which his Cash Compensation for the Plan Year bears
to the Cash Compensation of all Active Participants for such Plan Year.
5.3 Income on Investments.
---------------------
(a) Employer Contribution, Voluntary Contribution, and Rollover
Contribution Accounts.
(i) General Fund. On each Anniversary Date, the income (or loss) for
the Employer Contribution Account, Voluntary Contribution Account,
and Rollover Contribution Account shall be allocated based on the
beginning balance on the first day of the Plan Year for each
Active Participant and former Participant with Vested assets
remaining in the Plan on the Anniversary Date, less an adjustment
for distributions, withdrawals, or forfeitures during the Plan
Year on a time-weighted basis.
(ii) Earmarked Investment. Any income, expense, gain, or loss earned or
incurred with respect to such investment shall be credited solely
to the earmarked investment.
(b) Elective Deferral Accounts.
(i) Pooled Investment. On September 30, December 31, March 31, and
June 30 of each Plan Year, the income (or loss) for each pooled
Elective Deferral Account shall be allocated based on the
beginning balance on the first day of every calendar quarter for
each Participant with assets remaining in the Plan on the
Valuation Date for such quarter, less an adjustment for
distributions and withdrawals during the quarter on a time-
weighted basis, plus an adjustment for transfers from other
investments on a time-weighted basis, plus one-half of Elective
Deferral Contributions made during the quarter.
(ii) Earmarked Investment. Any income, expense, gain, or loss earned or
incurred with respect to such investment shall be credited solely
to the earmarked investment.
SECTION 6 - LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS
--------------------------------------------------------
6.1 Limitation on Annual Additions.
------------------------------
Notwithstanding the provisions of Section 5, the annual addition to a
Participant's accounts under this and any other defined contribution plans
maintained by the Employers or an affiliate (within the purview of Section
414(b), (c), and (m) and Section 415(h) of the Code, which affiliate shall
be deemed an Employer for this purpose) shall not exceed for any limitation
year an amount equal to the lesser of (i) $30,000 or if greater, one-fourth
of the defined benefit dollar limitation set forth in Section 415(b)(1) of
the Code as in effect for the limitation year, or (ii) 25% of the
Participant's Total Compensation for such limitation year.
25
For purposes of this Section 6.1 and the following Section 6.2, the "annual
addition" to a Participant's accounts means the sum of (i) the Employer
Contributions and Forfeitures credited to a Participant's Account with
respect to a limitation year, plus (ii) the Participant's total
nondeductible Voluntary Contributions for that year. The $30,000 and
$90,000 limitations referred to shall, for each limitation year ending
after 1988, be automatically adjusted to the new dollar limitations
determined by the Commissioner of Internal Revenue for the calendar year
beginning in that limitation year. Notwithstanding the foregoing, if the
special limitations on annual additions described in Section 415(c)(6) of
the Code applies, the limitations described in this section shall be
adjusted accordingly. A "limitation year" means each 12 consecutive month
period beginning July 1.
6.2 Coordinated Limitation with Other Plans.
---------------------------------------
Aside from the limitation prescribed by Section 6.1 with respect to the
annual addition to a Participant's accounts for any single limitation year,
if a Participant has ever participated in one or more defined benefit plans
maintained by an Employer or an affiliate, then the annual additions to his
accounts shall be limited on a cumulative basis so that the sum of his
defined contribution plan fraction and his defined benefit plan fraction
does not exceed one. For this purpose:
(a) A Participant's defined contribution plan fraction with respect to a
Plan Year shall be a fraction, (i) the numerator of which is the sum of
the annual additions to his accounts through the current year Plan
Year, and (ii) the denominator of which is the sum of the lesser of the
following amounts -A- and -B- determined for the current limitation
year and each prior limitation year of Service with an Employer: -A- is
1.25 times $30,000, or 1.0 times such dollar limitation if the Plan is
top-heavy; and-B- is 35% of the Participant's Total Compensation for
such year. Further, if the Participant participated in any related
defined contribution plan in any years beginning before 1976, any
excess of the sum of the actual annual additions to the Participant's
accounts for those years over the maximum annual additions which could
have been made in accordance with Section 6.1 shall be ignored, and
Voluntary Contributions by the Participant during those years shall be
taken into account as to each such year only to the extent that his
average annual Voluntary Contribution in those years exceeded 10% of
his average annual Total Compensation in those years.
(b) A Participant's defined benefit plan fraction with respect to a
limitation year shall be a fraction (i) the numerator of which is his
projected annual benefit payable at normal retirement under the
Employers' defined benefit plans, and (ii) the denominator of which is
the lesser of the following amounts -A- and -B- with an Employer: -A-
is 1.25 times $90,000, or 1.0 times such dollar limitation if the Plan
is top-heavy, and -B- 1.4 times the Participant's average Total
Compensation during his highest-paid three consecutive limitation
years.
6.3 Effect of Limitations.
---------------------
The Committee shall take whatever action may be necessary from time to time
to assure compliance with the limitations set forth in Section 6.1
26
and 6.2. Specifically, the Committee shall see that each Employer restrict
its contributions for any Plan Year to an amount which, taking into account
the amount of available Forfeitures, may be completely allocated to the
Participants consistent with those limitations. Where the limitations would
otherwise be exceeded by any Participant, further allocations to the
Participant shall be curtailed to the extent necessary to satisfy the
limitations. Where an excessive amount is contributed on account of a
mistake as to one or more Participants' compensation, or there is an amount
of Forfeitures which may not be credited in the Plan Year in which it
becomes available, the amount shall be held in a Suspense Account to be
allocated in lieu of any Employer Contributions in future years until it is
eliminated, and to be returned to the Employer if it cannot be credited
consistent with these limitations before the termination of the Plan.
SECTION 7 - INVESTMENTS
-----------------------
7.1 General Fund.
------------
Matching Contributions, Discretionary Contributions, Qualified Matching
Contributions, Qualified Non-elective Contributions, Employee Voluntary
Contributions, and Employee Rollover Contributions shall be held in a
"General Fund".
The Trustees shall have full power and authority to receive, collect,
receipt for, hold, manage, and care for all amounts paid and contributed to
the General Fund, and the proceeds thereof, and the income and profits
therefrom, as a single fund, and to invest and reinvest the same, pursuant
to the provisions of Section 12.3. The Trustees may invest in "qualifying
employer real property" and qualifying employer securities" as defined in
Section 407(d)(4) and (5) of ERISA, including Employer Stock.
7.2 Participant Direction of Assets from General Fund to Employer Stock.
-------------------------------------------------------------------
Effective on July 1, 1989, the Trustees were expressly authorized to
receive from each Participant on an annual basis an irrevocable election
directing the Trustees to have all or a part of the Vested portion of each
such Participant's assets in the General Fund to be invested in Employer
Stock. A Participant's initial election required a minimum investment of
$250.
Effective with the Plan Year beginning on July 1, 1992, this annual
election was rescinded. However, any investments in Employer Stock and any
directions for investment made prior to the Plan Year beginning on July 1,
1992 shall continue to be valid and shall not be affected.
The net income from Employer Stock investments in the Employer Contribution
Account shall be invested primarily in Employer Stock and such cash or
short term investments as the Trustees shall deem necessary to meet any
contingencies.
7.3 Elective Deferral Accounts.
--------------------------
The Trustees shall have full power and authority to receive, collect,
receipt for, hold, manage, and care for all amounts held, paid, and
27
contributed through Elective Deferrals.
Each Participant shall choose the investments for his Elective Deferrals
from those selected by the Trustees for this purpose. These investments
shall be chosen within the guidelines of ERISA. The investment selections
shall include, but not be limited to, the following:
(a) At least three diversified investments with different goals and
different risk factors.
(b) One or more investments with no market risk, which are fully insured
against loss by the United States or an agency of the United States.
(c) Employer Stock.
7.4 Voting of Employer Stock.
------------------------
The Participants shall have full voting rights with respect to Employer
Stock purchased with Participant direction. All shares of Employer Stock
purchased through Participant direction shall be voted by the Trustees as
directed by the Participants. The Trustees shall vote shares of Employer
Stock in the General Fund in proportion to the manner in which the shares
of Employer Stock purchased with Participant direction are voted by the
Participants. The Trustees shall adopt such rules and procedures as they
deem necessary to carry out the intent of this provision.
7.5 Restrictions on Insider Transactions.
------------------------------------
On January 28, 1992, the following "Restrictions on Insider Transactions"
became effective.
Notwithstanding any other provisions in the Plan to the contrary,
transactions by Participants who are deemed to be insiders within the
meaning of Section 16 of the Securities Exchange Act of 1934 shall also be
restricted by the following provisions:
(a) For initial or periodic transactions resulting from an election to
participate or change levels of participation with respect to
securities of the issuer:
(i) Officer or director Participants making withdrawals must cease
further purchases in the Plan for six months, or the securities so
distributed must be held by the Participant six months prior to
disposition; provided, however, that extraordinary distributions
of all of the issuer's securities held by the Plan and
distributions in connection with death, retirement, disability,
termination of employment, or a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, are not subject to
this requirement.
(ii) Officer or director Participants who cease participation in the
Plan may not participate again for at least six months.
(b) For intra-plan transfers between an equity securities of the issuer
fund and another fund, the transaction is pursuant to an election made
on a quarterly date at least six months after the date of the
28
previous intra-plan transfer election relating to an equity securities
of the issuer fund. The quarterly date referred to in the previous
sentence shall begin on the third business day following the public
release of quarterly and annual summary statements of earnings of the
Company and ending on the twelfth business day following such date.
SECTION 8 - VESTING
-------------------
8.1 Vesting Schedule
----------------
(a) Employer Contribution Account for Employer Matching Contributions and
Employer Discretionary Contributions.
Upon termination of employment for any reason other than death, total
or permanent disability, or attainment of the Plan's Early Retirement
age, a Participant's Vested (nonforfeitable) portion of his assets in
the Employer Contribution Account maintained for Employer Matching and
Employer Discretionary Contributions shall be a percentage based on his
Years of Service as determined by the following schedule, and subject
to the provisions in the balance of this Section 8:
Vesting Schedule
----------------
Years of Service Percent Vested Interest
----------------- ------------------------
Less than 3 years 0%
3 20%
4 40%
5 60%
6 80%
7 or more years 100%
(b) Accounts for Qualified Matching Contributions, Qualified Non-elective
Contributions, Elective Deferral Contributions, Employee Voluntary
Contributions and Employee Rollover Contributions.
These Accounts are not subject to the Vesting Schedule in Section
8.1(a), and shall be 100% vested and not forfeitable for any reason.
8.2 Computation of Vesting Years.
----------------------------
For purposes of this Plan, a "Vesting Year" means each 12-month period
beginning July 1, in which an Employee has at least 1,000 Hours of Service,
beginning with his initial Service with any Employer and including certain
Service with other employers as provided in the definition of "Service".
However, a Participant's Vesting Years shall be computed subject to the
following conditions and qualifications:
(a) A Participant's Vested interest in his Account accumulated before a
Break in Service shall be determined without regard to any Service
after the Break. Further, if a Participant has a Break in Service
before his interest in his Account has become Vested to some extent, he
shall lose credit for any Vesting Year before the Break.
29
(b) Unless otherwise specifically excluded, a Participant's Vesting Years
shall include any period of active military duty to the extent required
by the Military Selective Service Act of 1967 (38 U.S.C. Section 2021).
8.3 Full Vesting upon Certain Events.
--------------------------------
Notwithstanding Section 8.1(a), a Participant's interest in his Account
shall fully vested on the Participant's Normal Retirement Date, provided
the Participant is in Service on or after that date. The Participant's
interest shall also fully vest in the event that his Service is terminated
by Early Retirement, Disability, or death.
8.4 Full Vesting upon Plan Termination.
----------------------------------
Notwithstanding Section 8.1(a), a Participant's interest in his Account
shall fully vest if he is in active Service upon termination of this Plan
or upon the permanent and complete discontinuance of contributions by his
Employer. In the event of a partial termination, the interest of each
Participant who is in Service shall fully vest with respect to that part of
the Plan which is terminated.
8.5 Forfeiture, Repayment, and Restoral.
-----------------------------------
If a Participant's Service terminates before his interest in his Account is
fully Vested, that portion which has not Vested shall be forfeited when he
has a 1-Year Break in Service. In the case of a terminated Participant who
does not receive a distribution of his entire Vested interest and whose
Service resumes before a Break in Service occurs, any undistributed Vested
balance from his prior participation shall be maintained as a fully Vested
sub-account with his Account.
If any former Participant shall be reemployed by an Employer before five
consecutive 1-Year Breaks in Service have occurred, and such former
Participant has received a distribution of all his Vested assets in the
Plan, the unvested portion of his assets shall be reinstated to his Account
if he repays the full amount distributed to him within the earlier of five
years after the first date on which he is reemployed by an Employer or the
close of the first period of five consecutive 1-Year Breaks in Service
commencing after the distribution. Upon repayment of the entire
distribution within the required time period, the forfeited unvested assets
shall be restored in full.
8.6 Accounting for Forfeitures.
--------------------------
A Forfeiture shall be charged to the Participant's Account as of the first
Plan Year in which there is a 1-Year Break in Service. Except as otherwise
provided in Section 8.5, a Forfeiture shall be first used to reinstate any
previously forfeited account balances of former Participants, if any, with
the remaining Forfeitures, if any, allocated to the Active Participants,
pursuant to Section 5.2.
8.7 Vesting and Nonforfeitability.
-----------------------------
A Participant's interest in his Account which has become Vested shall be
nonforfeitable for any reason.
30
SECTION 9 - PAYMENT OF BENEFITS
-------------------------------
9.1 Upon Termination of Employment
------------------------------
A Participant whose Service ends for any reason shall receive the Vested
portion of his Account in either: (i) a single payment; or (ii) over a
period not to exceed ten years.
Pursuant to Section 401(a)(31) of the Code, effective January 1, 1993, if a
Participant elects to receive the distribution in a single payment, payment
may be made either to the Participant or to an Eligible Retirement Plan as
a Direct Rollover.
A terminated Participant shall receive information from the Committee
pertaining to his distribution options and the tax consequences of the
distribution. Pursuant of Section 401(a)(31) of the Code and the
regulations thereunder, unless the Participant waives the 30-day waiting
period and elects to make or not to make a Direct Rollover, the
distribution shall not be made until at least 30 days have elapsed after
the Participant has been advised of his distribution options. If the
Participant has not attained the Plan's Normal Retirement age, the
Participant may elect to wait to receive his benefits until he becomes age
65.
A Participant may modify his distribution election at any time, provided
any new benefit payment date is at least 30 days after a modified election
is delivered to the Committee.
A Participant's benefits shall be calculated based on the most recent
Valuation Date before the date of payment.
9.2 Upon Death of Participant.
-------------------------
The Beneficiary of a Participant shall receive information from the
Committee pertaining to his distribution options and the tax consequences
of the distribution.
Pursuant to Section 401(a)(31) of the Code, effective January 1, 1993, if
the Beneficiary is a surviving Spouse, the distribution is an Eligible
Rollover Distribution, and payment may be made either to the Spouse, or to
the surviving Spouse's IRA as a Direct Rollover. If the Beneficiary is an
alternate payee spouse or former spouse, the distribution is an Eligible
Rollover Distribution, and payment may be made either to the alternate
payee spouse or former spouse, or to an Eligible Retirement Plan of the
alternate payee spouse or former spouse as a Direct Rollover.
If the distribution is an Eligible Rollover Distribution, pursuant to
Section 401(a)(31) of the Code and the regulations thereunder, unless the
Beneficiary waives the 30-day waiting period and elects to make or not to
make a Direct Rollover, the distribution shall not be made until at least
30 days have elapsed after the Beneficiary has been advised of his
distribution options.
A Beneficiary's benefits shall be calculated based on the most recent
Valuation Date before the date of payment.
31
(a) Distribution options if distribution to Participant have not begun.
If a Participant dies before distribution has begun, his entire Account
shall be distributed to his Beneficiary no later than the earlier of
the Participant's required minimum distribution beginning date or five
years after death, unless one of the following is applicable:
(i) The Beneficiary elects and begins to receive payment over his life
expectancy by December 31 of the year following the year of the
death of the Participant.
(ii) The Beneficiary is the surviving Spouse. In this circumstance, the
distribution beginning date shall be the Participant's required
minimum distribution beginning date.
(iii)The Beneficiary is a child, and upon the attainment of the child's
majority (or other circumstance permitted in the Code and the
regulations thereunder) the surviving Spouse will becomethe
recipient of the payment of benefits, then the distribution
beginning date shall be the Participant's required minimum
distribution beginning date.
(b) Distribution options if distribution to Participant has begun.
If a Participant dies after his distribution has begun but before his
entire Account has been paid to him, then the balance of his Account
shall be distributed to his Beneficiary at least as rapidly as under
the distribution schedule elected by the Participant.
9.3 Upon Attainment of Age 70 1/2
-----------------------------
Distributions must commence to a terminated Participant no later than the
April 1 following the calendar year in which the Participant attained age
70 1/2.
Effective January 1, 1989, if a Participant is in Service upon the
attainment of age 70 1/2, minimum distribution payments shall commence by
April 1 of the calendar year following the calendar year in which the
Participant attained age 70 1/2. However, any Participant who was in
Service and became age 70 1/2 prior to January 1, 1989, except for a
Participant who was a 5% owner, shall not be subject to minimum
distribution payments until termination from Service with an Employer.
The distribution shall be made based on one of the following
irrevocableelections: (i) over the life of the Participant, or over the
joint lives of the Participant and his designated Beneficiary; or (ii) over
a period certain not to exceed the life expectancy of the Participant, or
the life expectancy of the Participant and his designated Beneficiary.
9.4 In-Service Distributions.
------------------------
(a) Non-deductible Voluntary Contribution Distribution.
A distribution from a Non-deductible Voluntary Contribution Account may
be made at any time.
32
(b) Hardship Distribution.
A hardship distribution may be made from the Account of a Participant
subject to the following limitations:
(i) A hardship distribution shall be limited to the amount which is
necessary to satisfy an immediate and heavy financial need of the
Participant. The amount of an immediate and heavy financial need
may include any amounts necessary to pay any federal, state, or
local income taxes or penalties reasonably anticipated to result
from the distribution.
(ii) A distribution may be made to satisfy the financial need if the
Participant's need:
(I) Cannot be met through reimbursement or compensation by
insurance or otherwise; or
(II) Cannot be met by liquidation of the Participant's assets; or
(III)Cannot be met by cessation of Elective Deferral Contributions
under the Plan; or
(IV) Cannot be met by other distributions or nontaxable (at the
time of the loan) loans from plans maintained by an Employer
or any other employer; or
(V) Cannot be met by borrowing from commercial sources on
reasonable commercial terms, in an amount sufficient to
satisfy the need.
(iii)A hardship distribution may be made for one of the following
purposes:
(I) to pay medical expenses incurred by the Participant, the
Participant's Spouse, or any dependents of the Participant;
(II) costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(III)payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, the
Participant's Spouse, children, or dependents;
(IV) payments necessary to prevent eviction of the Participant from
the Participant's principal residence or foreclosure on the
mortgage of that residence; or
(V) because of other events approved by the Secretary of the
Treasury or his delegate.
(iv) A hardship distribution may not be in excess of the amount needed
to satisfy the immediate and heavy financial need.
33
(v) For plan years beginning after December 31, 1988, any hardship
distribution from the Participant's Elective Deferral Account must
be limited to the distributable amount. The distributable amount
is equal to the Participant's total Elective Deferral
Contributions as of the date of distribution, reduced by the
amount of previous hardship distributions, plus income earned on
Elective Deferrals which were credited to the Participant's
Elective Deferral Account as of June 30, 1989.
Upon the receipt of a hardship distribution, a Participant is prohibited
from making Elective Deferrals and Voluntary Contributions to this Plan and
all other plans maintained by the Employer for at least 12 months. However,
this prohibition to making contributions to other plans does not include a
health or welfare benefit plan, including one which is part of a cafeteria
plan, pursuant to Section 125 of the Code.
9.5 Type of Payment.
---------------
This Section 9.5 applies to distributions made on or after January 1, 1993,
pursuant to Section 401(a)(31) of the Code and the regulations thereunder.
(a) Direct Rollover.
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
Committee, to have any portion of an Eligible Rollover Distribution
processed as a Direct Rollover and paid directly to an Eligible
Retirement Plan selected by the Distributee.
(b) Payment to Participant or Beneficiary.
If a distribution is an Eligible Rollover Distribution, and the
Participant or Beneficiary elects to have payment made to himself, then
the distribution will be subject to mandatory 20% federal income tax
withholding, unless the distribution is less than $200 or consists
solely of Employer Stock and $200 or less in cash.
9.6 Form of Payment.
---------------
(a) Cash or "In Kind".
Distributions shall be made in cash or, if there are investments in
non-cash accounts, distributions may be made, at the election of the
Distributee, in cash and/or in kind.
(b) Employer Stock.
Notwithstanding the foregoing in Section 9.6(a), any earmarked
investments in Employer Stock shall be distributed, to the greatest
extent possible, in the form of whole shares of Employer stock,
provided that Employer Stock is readily tradeable on an established
securities market at the time of distribution.
34
(c) Annuity.
In lieu of making payments directly from a terminated or deceased
Participant's Account, the Trustees may, in their sole discretion,
invest all or a portion of a Participant's Account in one or more
annuity Contracts and assign such Contract or Contracts to such
Participant or his Beneficiary in such manner as the Trustees deem
advisable. Before assigning any Contract to a terminated Participant or
a Beneficiary of a deceased Participant, the Trustees shall cause such
Contract to be made non-assignable by the assignee. Any Contract
obtained after July 31, 1983 shall be issued on a unisex basis and all
the terms and conditions under any such Contracts, including benefits,
premiums, options, loan values, and cash surrender values, shall be the
same for both male and female.
If any Contract on the life of a terminated or deceased Participant is
purchased, such Contract shall be endorsed to provide for payments
thereunder in accordance with the preceding provisions of this
section.
9.7 Timing of Distribution.
----------------------
Pursuant to Section 401(a)(31) of the Code and the regulations thereunder,
effective January 1, 1993, a Participant or Beneficiary shall be notified
of all distribution options at least thirty days prior to making a
distribution election. However, a Participant shall be permitted to waive
the 30-day period requirement which is given a Distributee to review all
distribution options, and may elect to make or not to make a Direct
Rollover to an Eligible Retirement Plan sooner.
If the value of a Participant's Vested assets exceeds (or at the time of
any prior distribution exceeded) $3,500, the Participant must consent to
the distribution in writing. However, the consent of the Participant shall
not be required to satisfy the commencement of minimum required
distributions, pursuant to Section 401(a)(9) of the Code.
Unless the Participant elects otherwise, distribution of benefits shall
begin no later than the 90th day after the close of the Plan Year in which
the Participant attains age 65.
A Participant's Vested assets are immediately distributable, subject to the
requirements of Section 401(a)(31) of the Code, if they do not exceed
$3,500. Payment will be made to the Participant or Beneficiary if a
distribution election has not been received within 90 days after
notification of all distribution options.
9.8 Deemed Distribution.
-------------------
For purposes of this section, if a Participant terminates service and the
value of the Participant's vested account balance is zero, the Participant
shall be deemed to have received a distribution of such vested account
balance.
9.9 Qualified Domestic Relations Order.
----------------------------------
Under a Qualified Domestic Relations Order (QDRO), the following shall be
applicable:
35
(a) The alternate payee may receive a payment of benefits under this Plan
in accordance with the distribution options described in Section 9.
(b) The alternate payee may receive a payment of benefits under this Plan
prior to the Normal Retirement age if the QDRO specifically provides
for such earlier payment. If the present value of the payment exceeds
$3,500, the alternate payee must consent in writing to such
distribution.
(c) Upon receipt of an order which appears to be a domestic relations
order, the Committee will promptly notify the Participant and each
alternate payee of the receipt of the order, and provide them with a
copy of the procedures established by the Plan for determining whether
the order is a QDRO. While the determination is being made, a separate
accounting will be made with respect to any amounts which would be
payable under the order.
If the Committee or a court determines that the order is a QDRO, within
18 months after receipt, the Committee will begin making payments,
including the separately accounted for amounts, pursuant to the order
when required or as soon as administratively practical.
If the Committee or court determines that the order is not a QDRO, or
if no determination is made within 18 months after receipt, then the
separately accounted for amounts will be either restored to the
Participant's account or distributed to the Participant, as if the
order did not exist. If the order is subsequently determined to be a
QDRO, such determination shall be applied prospectively to payments
made after the determination.
9.10 Beneficiary Designation.
-----------------------
Each Participant shall designate the person, persons, or entity to receive
benefits payable under the Plan upon the death of the Participant.
No election by a married Participant of a primary Beneficiary who is not
the Participant's Spouse shall be valid unless the election is accompanied
by the Spouse's written consent, which
(a) must acknowledge the effect of the election,
(b) must explicitly provide either that the designated Beneficiary may not
subsequently be changed by the Participant without the Spouse's further
consent, or that it may be changed without such consent, and
(c) must be witnessed by the Committee, its representative, or a notary
public. (This requirement shall not apply if the Participant
establishes to the Committee's satisfaction that the Spouse may not be
located.)
9.11 Marital Status of Participant.
-----------------------------
The Committee shall from time to time take whatever steps it deems
appropriate to keep informed of each Participant's marital status. Each
Employer shall provide the Committee with the most reliable information in
36
the Employer's possession regarding its Participants' marital status, and
the Committee may, in its discretion, require a notarized affidavit from
any Participant as to his marital status.
The Committee, the Plan, the Trustee, and the Employers shall be fully
protected and discharged from any liability to the extent of any benefit
payments made as a result of the Committee's good faith and reasonable
reliance upon information obtained from a Participant and his Employer as
to his marital status.
SECTION 10 - RULES GOVERNING BENEFIT CLAIMS AND REVIEW OF APPEALS
-----------------------------------------------------------------
10.1 Claim for Benefits.
------------------
Any Participant or Beneficiary who qualifies for payment of benefits shall
file a claim for his benefits with the Committee on a form provided by the
Committee. The claim, including any election of an alternative benefit
form, shall be filed at least 30 days before the date on which the benefits
are to be begin. If a Participant or Beneficiary fails to file a claim by
the 30th day before the date on which benefits become payable, he shall be
presumed to have filed a claim for payment for the Participant's benefits
in the standard form prescribed in Section 9.
10.2 Notification by Committee.
-------------------------
Within 90 days after receiving a claim for benefits (or within 180 days, if
special circumstances require an extension of time, and written noticeof
the extension is given to the Participant or Beneficiary within 90 days
after receiving the claim for benefits), the Committee shall notify the
Participant or Beneficiary whether the claim has been approved or denied.
If the Committee denies a claim in any respect, the Committee shall set
forth in a written notice to the Participant or Beneficiary:
(a) Each specific reason for the denial;
(b) Specific references to the pertinent Plan provisions on which the
denial is based;
(c) A description of any additional material or information which could be
submitted by the Participant or Beneficiary to support his claim, with
an explanation of the relevance of such information; and
(d) An explanation of the claims review procedures set forth in Section
10.3.
10.3 Claims Review Procedure.
-----------------------
Within 60 days after a Participant or Beneficiary receives notice from the
Committee that his claim for benefits has been denied in any respect, he
may file with the Committee a written notice of appeal setting forth his
reasons for disputing the Committee's determination. In connection with his
appeal, the Participant or Beneficiary or his representative may inspect or
purchase copies of pertinent documents and records to the extent not
inconsistent with other Participants' and Beneficiaries' rights
37
of privacy.
Within 60 days after receiving a notice of appeal from a prior
determination (or within 120 days, if special circumstances require an
extension of time, and written notice of the extension is given to the
Participant or Beneficiary and his representative within 60 days after
receiving the notice of appeal), the Committee shall furnish to the
Participant or Beneficiary and his representative, if any, a written
statement of the Committee's final decision with respect to his claim,
including the reasons for such decision and the particular Plan provisions
upon which it is based.
SECTION 11 - ADMINISTRATION OF PLAN
-----------------------------------
11.1 Authority of Committee.
----------------------
The Committee shall be the "plan administrator" within the meaning of ERISA
and shall have exclusive responsibility and authority to control and manage
the operation and administration of the Plan, including the interpretation
and application of its provisions, except to the extent such responsibility
and authority are otherwise specifically
(a) allocated to the Company, the Employers, or the Trustees under the
Plan,
(b) delegated in writing to other persons by the Company, the Employers,
the Committee, or the Trustees, or
(c) allocated to other parties by operation of law.
The Committee shall have no investment responsibility with respect to the
Trust Fund. In the discharge of its duties, the Committee may employ
accountants, actuaries, legal counsel, and other agents (who also may be
employed by an Employer or the Trustees in the same or some other capacity)
and may pay their reasonable expenses and compensation.
11.2 Identity of Committee.
---------------------
The Committee shall consist of three or more individuals selected by the
Company. Any individual, including a director, trustee, shareholder,
officer, or employee of an Employer, shall be eligible to serve as a member
of the Committee. The Company shall have the power to remove any individual
serving on the Committee at any time without cause upon 10 days written
notice, and any individual may resign from the Committee at any time upon
10 days written notice to the Company. The Company shall notify the Trustee
of any change in membership of the Committee.
11.3 Duties of Committee.
-------------------
The Committee shall keep whatever records may be necessary to implement the
Plan and shall furnish whatever reports may be required from time to time
by the Company. The Committee shall furnish to the Trustees whatever
information may be necessary to properly administer the Trust. The
Committee shall see to the filing with the appropriate government agencies
all reports and returns required of the Plan Committee under ERISA and
38
other laws.
11.4 Valuation of Employer Stock.
---------------------------
If the valuation of any Employer Stock is not established by reported
trading on a generally recognized public market, the Committee shall have
the exclusive authority and responsibility to determine its value for all
purposes under the Plan. Such value shall be determined as of each
Valuation Date, and on any other date the Plan purchases or sells such
Employer Stock. The Committee shall use generally accepted methods of
valuing stock of similar corporations for purposes of arm's length business
and investment transactions, and in this connection, the Committee shall
obtain, and shall be protected in relying upon, the valuation of such
Employer Stock as determined by an independent appraiser experienced in
preparing valuations of similar businesses.
11.5 Compliance with ERISA.
---------------------
The Committee shall perform all acts necessary to comply with ERISA. Each
individual member or employee of the Committee shall discharge his duties
in good faith and in accordance with the applicable requirements of ERISA.
11.6 Action by Committee.
-------------------
All actions of the Committee shall be governed by the affirmative vote of a
number of members which is a majority of the total number of members
currently appointed, including vacancies. The members of the Committee may
meet informally and may take any action without meeting as a group.
11.7 Execution of Documents.
----------------------
Any instrument executed by the Committee shall be signed by any member or
employee of the Committee.
11.8 Adoption of Rules.
-----------------
The Committee shall adopt such rules and regulations of uniform
applicability as it deems necessary or appropriate for the proper
administration and interpretation of the Plan.
11.9 Responsibilities to Participants.
--------------------------------
The Committee shall determine which Employees qualify to enter the Plan.
The Committee shall furnish to each eligible Employee whatever summary plan
descriptions, summary annual reports, and other notices and information may
be required by ERISA. The Committee also shall determine when a Participant
or his Beneficiary qualifies for the payment of benefits under the Plan.
The Committee shall furnish to each such Participant or Beneficiary
whatever information is required under ERISA (or is otherwise appropriate)
to enable the Participant or Beneficiary to make whatever elections may be
available pursuant to Section 9, and the Committee shall provide for the
payment of benefits in the proper form and amount from the assets of the
Trust Fund. The Committee may decide in its sole discretion to permit
modifications of elections and to defer or accelerate benefits to the
extent consistent with applicable law and the best interests of the
individuals concerned.
39
11.10 Alternative Payees in Event of Incapacity.
-----------------------------------------
If the Committee finds at any time that an individual qualifying for
benefits under this Plan is a minor or is incompetent, the Committee may
direct the benefits to be paid, in the case of a minor, to his parents, his
legal guardian, a custodian for him under the Uniform Gifts to Minors Act,
or the person having actual custody of him, or, in the case of an
incompetent, to his spouse, his legal guardian, or the person having actual
custody of him, the payments to be used for the individual's benefit. The
Committee and the Trustee shall not be obligated to inquire as to the
actual use of the funds by the person receiving them under this Section
11.10, and any such payment shall completely discharge the obligations of
the Plan, the Trustee, the Committee, and the Employers to the extent of
the payment.
11.11 Indemnification by Employers.
----------------------------
Except as separately agreed in writing, the Committee, and any member or
employee of the Committee, shall be indemnified and held harmless by the
Employers, jointly and severally, to the fullest extent permitted by law
against any and all costs, damages, expenses, and liabilities reasonably
incurred by or imposed upon it or him in connection with any claim made
against it or him or in which it or him may be involved by reason of its or
his being, or having been, the Committee, or a member or employee of the
Committee, to the extent such amounts are not paid by insurance.
11.12 Nonparticipation by Interested Member.
-------------------------------------
Any member of the Committee who also is a Participant in the Plan shall
take no part in any determination specifically relating to his own
participation or benefits, unless his abstention would leave the Committee
incapable of acting on the matter.
SECTION 12 - POWERS AND DUTIES OF PLAN TRUSTEES
-----------------------------------------------
12.1 Appointment of Trustees.
-----------------------
The Board of Directors of the Company shall appoint a minimum of three
individuals to serve as Trustees of the Plan. The Board of Directors of the
Company shall have the right at any time, and from time to time, to remove
any Trustee without cause. An individual may resign as a Trustee at any
time upon 10 days written notice to the Company.
12.2 Basic Responsibilities of the Trustees
--------------------------------------
The Trustees shall have the following primary responsibilities:
(a) To invest, manage, and control the Plan assets in a manner consistent
with Section 7.
At the discretion of the Trustees, one or more Investment Managers may
be appointed to direct the investment of all or any portion of the
Trust Fund. An Investment Manager shall accept the appointment in
writing, acknowledging that he is a fiduciary pursuant to Section 401
of ERISA, and certifying his registration under the Investment Advisors
Act of 1940 and the Investment Advisor Regulatory
40
Enhancement and Disclosure Act of 1993. The Investment Manager, as a
Plan fiduciary, is subject to the fidelity bond requirement of Section
412 of ERISA, and shall furnish evidence that this requirement has been
satisfied each Plan Year. The Trustees shall be under no obligation to
review or question any investment decision made by the Investment
Manager, and shall have no liability for losses sustained with respect
to any investments made or retained by the Investment Manager, or for
any acts or omissions of the Investment Manager.
(b) At the direction of the Committee, to pay benefits to Participants in
the Plan and, in the event of their death, to their Beneficiaries.
(c) To maintain records of all receipts and disbursements, and to furnish
to the Employer a written annual report.
12.3 Investment Powers and Duties
----------------------------
The Trustees shall carry out their duties with skill and prudence, giving
due regard to any limitations imposed by the Code or ERISA. The Trustees,
in addition to all power and authority granted to it under common law,
statutory authority, and other provisions of the Plan, shall be empowered:
(a) To purchase, or subscribe for, any securities or other property and to
retain the same. In conjunction with the purchase of securities, margin
accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase, or
otherwise dispose of any securities or other property held by the
Trustees, by private contract or at public auction. No person dealing
with the Trustees shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or propriety
of any such sale or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give general or
special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription
rights, or other options, and to make any payments incidental thereto;
to oppose, or to consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate securities, and to
delegate discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other property.
(d) To cause any securities or other property to be registered in the
Trustees' own name, and to hold any investments in bearer form, but the
books and records of the Trustees shall at all times show that all such
investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such amount,
and upon such terms and conditions, as the Trustees shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustees, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the
41
Trustees shall be bound to see the application of the money lent or to
inquire into the validity, expediency, or propriety of any borrowing;
(f) To keep such a portion of the Trust Fund in cash or cash balances as
the Trustees may, from time to time, deem to be in the best interests
of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustees may deem advisable
any securities or other property received or acquired as Trustee
hereunder, whether or not such securities or other property would
normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
purchased as investments hereunder;
(i) To settle, compromise, or submit to arbitration any claims, debts, or
damages due or owing to or from the Plan, to commence or defend suits
of legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance companies, to be
selected by the Committee, as an investment of the Trust Fund such
annuity, or other Contracts (on the life of any Participant) as the
Committee shall deem proper; to exercise, at any time or from time to
time, whatever rights and privileges may be granted under such annuity
or other Contracts; to collect, receive, and settle for the proceeds of
all such annuity or other Contracts as and when entitled to do so under
the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustees' bank;
(m) To invest in Treasury Bills and other forms of United States government
obligations;
(n) To sell, purchase, and acquire put or call options if the options are
traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or,
if the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or certificates
of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with assets
belonging to any other qualified employee pension benefit trust created
by the Employer or an affiliated company of the Employer, and to
commingle such assets and make joint or common investments and carry
joint accounts on behalf of this Plan and such other trust or trusts,
allocating undivided shares or interests in such investments
42
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(q) To establish and maintain investments as directed by the Participants
for their Elective Deferral Contributions.
(r) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
12.4 Duties Regarding Payment of Benefits.
------------------------------------
At the direction of the Committee, the Trustee shall, in accordance with
the terms of the Plan, make payment of benefits and expenses from the Trust
Fund.
12.5 Execution of Contracts and Payment of Benefits
----------------------------------------------
Execution or endorsement of any contract or check shall require the written
approval of any two Trustees acting together.
12.6 Trustee Expenses.
----------------
The Trustees shall be reimbursed for any necessary expenses, including
reasonable fees for legal counsel. Such expenses shall be paid from the
Trust Fund, unless the Company elects to pay all or any portion of such
expenses. All extraordinary expenses and liabilities, such as the cost of
litigation or the payment of adverse claims shall be paid from the Trust
Fund. All taxes of any kind that may be levied or assessed under existing
or future laws upon, or in respect of, the Trust Fund or the income
thereof, shall be paid from the Trust Fund.
12.7 Trust Fund Annual Report.
------------------------
The Trustees shall maintain detailed and accurate records and accounts of
all transactions, which shall be available for inspection and audit by any
person or persons designated by the Committee. At the direction of the
Committee, the Trustees shall submit any valuations, reports, or other
information that may be required to the auditors.
Within a reasonable time following the later of the last day of the Plan
Year or receipt by the Trustees of the final Employer Contribution to the
Plan, the Trustees shall furnish to the Company and the Committee a written
account which shall contain: (i) the net income, or loss, of the Trust
Fund; (ii) the gains, or losses, realized by the Trust Fund from the sale
or other disposition of assets; (iii) the increase, or decrease, in the
value of the Trust Fund; (iv) all payments and distributions made from the
Trust Fund; and (v) any additional information that the Company or
Committee deems appropriate.
Upon receipt of the Trust Fund accounting, the Company shall advise the
Trustees of its approval or disapproval within thirty days. If no objection
has been filed by the Company, or if the account has been adjusted pursuant
to agreement between the Company and the Trustees, it shall be deemed to be
approved by the Company except as to matters, if any, covered by written
objections from the Company. The approval by the Company of any statement
of account shall be binding as to all matters
43
embraced therein to the same extent as if the account of the Trustees had
been settled by judgment or decree in an action for a judicial settlement
of its account in a court of competent jurisdiction in which the Trustees,
the Company, and all persons having or claiming an interest in the Plan
were parties; provided, however, that nothing herein contained shall
deprive the Trustees of having its accounts judicially settled if the
Trustees so desires.
12.8 Audit.
-----
If an audit of the Plan's records shall be required by ERISA and the
regulations thereunder for any Plan Year, the Committee shall direct the
Trustees to engage on behalf of all Participants an independent qualified
public accountant for that purpose. Such accountant shall, after an audit
of the books and records of the Plan in accordance with generally accepted
auditing standards, within a reasonable period after the close of the Plan
Year, furnish to the Committee and the Trustees a report of his audit,
setting forth his opinion as to whether any statements or schedules which
are required to be filed by Section 103 of ERISA or by the Secretary of
Labor with the Plan's annual report, are presently fairly in conformity
with generally accepted accounting principles applied consistently.
All auditing and accounting fees shall be an expense of and, at the
election of the Company, paid from the Trust Fund.
12.9 Idemnification by Employers.
---------------------------
Except as separately agreed in writing, the Trustees shall be idemnified
and held harmless by the Employers, jointly and severally, to the fullest
extent permitted by law against any and all costs, damages, expenses, and
liabilities reasonably incurred by or imposed upon them in connection with
any claim made against them or in which they may be involved as Trustees,
to the extent such amounts are not paid by insurance.
12.10 Nonparticipation by Interest Member.
-----------------------------------
Any Trustee who also is a Participant in the Plan shall take no part in any
determination specifically relating to his own participation or benefits,
unless his abstention would leave the other Trustees incapable of acting on
the matter.
SECTION 13 - AMENDMENT AND TERMINATION OF PLAN
----------------------------------------------
13.1 Adoption of Plan by Other Employers.
-----------------------------------
With the consent of the Company, any entity may become a participating
Employer under the Plan by (i) taking such action as shall be necessary to
adopt the Plan, and (ii) executing and delivering such instruments and
taking such other action as may be necessary or desirable to put the Plan
into effect with respect to the entity's Employees.
13.2 Adoption of Plan by Successor.
-----------------------------
In the event that any Employer shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that an entity other
44
than an Employer shall succeed to all or substantially all of the
Employer's business, the successor entity may be substituted for the
Employer under the Plan by adopting the Plan. Contributions by the Employer
shall be automatically suspended from the effective date of any such
reorganization until the date upon which the substitution of the successor
entity for the Employer under the Plan becomes effective. If, within 90
days following the effective date of any such reorganization, the successor
entity shall not have elected to become a part to the Plan, or if the
Employer shall adopt a plan of complete liquidation other than in
connection with a reorganization, the Plan shall be automatically
terminated with respect to Employees of the Employer as of the close of
business on the 90th day following the effective date of the
reorganization, or as of the close of business on the date of adoption of a
plan of complete liquidation, as the case may be.
13.3 Right to Amend or Terminate.
---------------------------
The Company intends to continue this Plan as a permanent program. However,
each participating Employer separately reserves the right to suspend,
supersede, or terminate the Plan at any time and for any reason, as it
applies to that Employer's Employees, and the Company reserves the right to
amend, suspend, supersede, merge, consolidate, or terminate the Plan at any
time and for any reason, as it applies to the Employees of all Employers.
No amendment, suspension, supersession, merger, consolidation, or
termination of the Plan shall reduce any Participant's or Beneficiary's
proportionate interest in the Trust Fund, or shall divert any portion of
the Trust Fund to purposes other than the exclusive benefit of the
Participants and their Beneficiaries prior to the satisfaction of all
liabilities under the Plan. Moreover, there shall not be any transfer of
assets to a successor plan or merger or consolidation with another plan
unless, in the event of the termination of the successor plan or the
surviving plan immediately following such transfer, merger, or
consolidation, each participant or beneficiary would be entitled to a
benefit equal to or greater than the benefit he would have been entitled to
if the plan in which he was previously a participant or beneficiary had
terminated immediately prior to such transfer, merger, or consolidation.
Following a termination of this Plan by the Company, the Trustee shall
continue to administer the Trust and pay benefits in accordance with the
Plan as amended from time to time and the Committee's instructions.
SECTION 14 - MISCELLANEOUS PROVISIONS
-------------------------------------
14.1 Plan Creates No Employment Rights.
---------------------------------
Nothing in this Plan shall be interpreted as giving any Employee the right
to be retained as an Employee by an Employer, or as limiting or affecting
the rights of an Employer to control its Employees or to terminate the
Service of any Employee at any time and for any reason, subject to any
applicable employment or collective bargaining agreements.
14.2 Nonassignability of Benefits.
----------------------------
No assignment, pledge, or other anticipation of benefits from the Plan will
be permitted or recognized by the Employers, the Committee, or the Trustee.
Moreover, benefits from the Plan shall not be subject to
45
attachment, garnishment, or other legal process for debts or liabilities of
any Participant or Beneficiary, to the extent permitted by law. This
prohibition on assignment or alienation shall apply to any judgment,
decree, or order (including approval of a property settlement agreement)
which relates to the provision of child support, alimony, or property
rights to a present or former spouse, child, or other dependent of a
Participant pursuant to a State domestic relations or community property
law, unless the judgment, decree, or order is determined by the Committee
to be a Qualified Domestic Relations Order within the meaning of Section
414(p) of the Code.
14.3 Limit of Employer Liability.
---------------------------
The liability of the Employers with respect to Participants under this Plan
shall be limited to making contributions to the Trust from time to time, in
accordance with Section 4.
14.4 Treatment of Expenses.
---------------------
All expenses incurred by the Committee and the Trustee in connection with
administering this Plan and Trust Fund shall be paid by the Trustee from
the Trust Fund to the extent the expenses have not been paid or assumed by
the Employer.
14.5 Number and Gender.
-----------------
Any use of the singular shall be interpreted to include the plural, and the
plural the singular. Any use of the masculine, feminine, or neuter shall be
interpreted to include the masculine, feminine, or neuter, as the context
shall require.
14.6 Nondiversion of Assets.
----------------------
Except as provided in Section 6.3, under no circumstances shall any portion
of the Trust Fund be diverted to or used for any purpose other than the
exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan.
14.7 Separability of Provisions.
--------------------------
If any provision of this Plan is held to be invalid or unenforcable, the
other provisions of the Plan shall not be affected but shall be applied as
if the invalid or unenforcable provision had not been included in the Plan.
14.8 Service of Process.
------------------
The agent for the service of process upon the Plan shall be the president
of the Company, or such other person as may be designated from time to time
by the Company.
14.9 Governing State Law.
-------------------
This Plan shall be interpreted in according with the laws of the State of
Illinois to the extent those laws are applicable under the provisions of
ERISA.
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SECTION 15 - TOP-HEAVY PROVISIONS
---------------------------------
15.1 Determination of Top-Heavy Status.
---------------------------------
The Committee shall determine on a regular basis whether each Plan Year is
or is not a "Top-Heavy Year" for purposes of implementing the provisions of
Sections 15.2, 15.3, and 15.4, which shall apply only to the extent the
Plan is top-heavy or super top-heavy within the meaning of Section 416 of
the Code and the Treasury Regulations promulgated thereunder. In making
this determination, the Committee shall use the following definitions and
principles:
(a) The "Employer" includes all business entities which are considered
commonly controlled or affiliated within the meaning of Sections
414(b), 414(c), and 414(m) of the Code.
(b) The "plan aggregation group" includes each qualified retirement plan
maintained by the Employer (i) in which a Key Employee is a Participant
during the Plan Year, or (ii) which enables any plan described in
clause (i) to satisfy the requirements of Section 401(a)(4) or 410 of
the Code, or (iii) which provides contributions or benefits comparable
to those of the plans described in clauses (i) and (ii) and which is
designated by the Committee as part of the plan aggregation group.
(c) The "determination date", with respect to the first Plan Year of any
plan, means the last day of that Plan Year, and with respect to each
subsequent Plan Year, means the last day of the preceding Plan Year. If
any other plan has a determination date which differs from this Plan's
determination date, the top-heaviness of this Plan shall be determined
on the basis of the other plan's determination date falling within the
same calendar year as this Plan's determination date.
(d) A "Key Employee", with respect to a Plan Year, means an Employee who at
any time during the five years ending on the top-heavy determination
date of the Plan Year has received compensation from an Employer and
has been (i) an officer of the Employer having Total Compensation
greater than 150 percent of the limit then in effect under Section
415(c)(1)(A) of the Code, (ii) one of the 10 Employees owning the
largest interests in the Employer having Total Compensation greater
than the limit then in effect under Section 415(c)(1)(A), (iii) an
owner of more than five percent of the outstanding equity interest or
outstanding voting interest in any Employer, or (iv) an owner of more
than one percent of the outstanding equity interest or the outstanding
voting interest in an Employer whose Total Compensation exceeds
$150,000. In determining which individuals are Key Employees, the rules
of Section 415(i) of the Code and Treasury Regulations promulgated
thereunder shall apply. The Beneficiary of a Key Employee shall also be
considered a Key Employee.
(e) A Non-key Employee means an Employee who at any time during the five
years ending on the top-heavy determination date for the Plan Year has
received compensation from an Employer and who has never been a Key
Employee, and the Beneficiary of any such Employee.
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(f) The "aggregated benefits" for any Plan Year means (i) the adjusted
account balances in defined contribution plans on the determination
date, plus (ii) the adjusted value of accrued benefits in defined
benefit plans, calculated as to the annual valuation date coinciding
with or next preceding the determination date, with respect to Key
Employees and Non-key Employees under all plans with the plan
aggregation group which includes this Plan. For this purpose, the
"adjusted account balance" and the "adjusted value of accrued benefit"
for any Employee shall be increased by all plan distributions made with
respect to the Employee during the five years ending on the
determination date. Further, the adjusted account balance under a plan
shall not include any amount attributable to a Rollover Contribution or
similar transfer to the Plan initiated by an Employee and made after
1983, unless both plans involved are maintained by the Employer, in
which event the transferred amount shall be counted in the transferee
plan and ignored for all purposes in the transferor plan. Finally, the
adjusted value of accrued benefits under any defined benefit plan shall
be determined by assuming whichever actuarial assumptions were applied
by the Pension Benefit Guaranty Corporation to determine the
sufficiency of plan assets for plans terminating on the valuation date.
(g) This Plan shall be "top-heavy" for any Plan Year in which the
aggregated benefits of the Key Employees exceed 60 percent of the total
aggregated benefits for both Key Employees and Non-key Employees.
(h) This Plan shall be "super top-heavy" for any Plan Year in which the
aggregated benefits of the Key Employees exceed 90 percent of the total
aggregated benefits for both Key Employees and Non-key Employees.
(i) A "Top-Heavy Year" means a Plan Year in which the Plan is top-heavy.
15.2 Minimum Contributions.
---------------------
For any Top-Heavy Year, a special contribution shall be made on behalf of
each Participant so that each Non-key Employee's allocation of Employer
Contributions and Forfeitures shall be equal to the lesser of (i) 3% of
such Non-key Employee's Total Compensation, or (ii) the highest ratio of
such allocation of Employer Contributions and Forfeitures received by any
Key Employee for that Plan Year. For purposes of the special contribution
of this Section 15.2, a Key Employee's Total Compensation shall include
amounts the Key Employee elected to defer under a qualified 401(k)
arrangement. Such a special contribution shall be made on behalf of each
Participant who is employed by the Employer on the last day of the Plan
Year, regardless of his Hours of Service.
Neither Elective Deferrals nor Matching Contributions may be taken into
account for the purpose of satisfying the minimum top-heavy contribution
requirement.
For any Plan Year when (i) the Plan is top-heavy and (ii) a Non-key
Employee is a Participant in both this Plan and a defined benefit plan
included in the plan aggregation group which is top heavy, the sum of the
Employer Contributions and Forfeitures allocated to the Account of each
such Non-key Employee shall be equal to at least 5% of such Non-key
48
Employee's Total Compensation for that Plan Year.
If the Employer has more than one plan, the required minimum Top-Heavy Year
contribution shall be met in this Plan.
15.3 Top-Heavy Vesting Schedule.
--------------------------
In a Top-Heavy Plan Year, a Participant's Vested interest in that portion
of his Employer Contribution Account maintained for Employer Matching and
Employer Discretionary Contributions shall be based on the following top-
heavy vesting schedule:
Vesting Schedule
----------------
Years of Service Percent Vested Interest
----------------- ------------------------
Less than 2 years 0%
2 20%
3 40%
4 60%
5 80%
6 or more years 100%
15.4 Maximum Compensation.
--------------------
For any Top-Heavy Year, a Participant's "Cash Compensation" as defined in
Section 2, and his "Total Compensation" for purposes of Section 15.2, shall
not exceed $200,000 (or the limit currently in effect under Section 415(d)
of the Code).
For any Plan Year beginning after 1993, a Participant's "Cash Compensation"
and his "Total Compensation" shall exclude any compensation in excess of
the OBRA '93 annual compensation limit of $150,000, as adjusted for
increases in cost of living in accordance with Section 401(a)(17)(B)
of the Code.
49