EXHIBIT (10)(iii)18
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
SAVINGS INCENTIVE PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER............................12
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY................................12
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR.................................12
2.4 RECORDS AND REPORTS....................................................14
2.5 APPOINTMENT OF ADVISERS................................................14
2.6 PAYMENT OF EXPENSES....................................................14
2.7 CLAIMS PROCEDURE.......................................................14
2.8 CLAIMS REVIEW PROCEDURE................................................15
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY..............................................15
3.2 EFFECTIVE DATE OF PARTICIPATION........................................15
3.3 DETERMINATION OF ELIGIBILITY...........................................16
3.4 TERMINATION OF ELIGIBILITY.............................................16
3.5 OMISSION OF ELIGIBLE EMPLOYEE..........................................16
3.6 INCLUSION OF INELIGIBLE EMPLOYEE.......................................16
3.7 ELECTION NOT TO PARTICIPATE............................................16
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION..........................17
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION................................17
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION...............................20
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS................................20
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS.......................................22
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.........................24
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS...................................26
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.....................28
4.9 MAXIMUM ANNUAL ADDITIONS...............................................29
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS..............................31
4.11 TRANSFERS FROM QUALIFIED PLANS.........................................32
4.12 VOLUNTARY CONTRIBUTIONS................................................34
4.13 DIRECTED INVESTMENT ACCOUNT............................................35
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND............................................36
5.2 METHOD OF VALUATION ...................................................37
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT..............................37
6.2 DETERMINATION OF BENEFITS UPON DEATH...................................37
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.......................38
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.............................38
6.5 DISTRIBUTION OF BENEFITS...............................................41
6.6 DISTRIBUTION OF BENEFITS UPON DEATH....................................43
6.7 TIME OF SEGREGATION OR DISTRIBUTION....................................44
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.....................................44
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN.........................44
6.10 PRE-RETIREMENT DISTRIBUTION............................................44
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP......................................45
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION........................46
6.13 DIRECT ROLLOVER........................................................46
6.14 ELIMINATION OF LOOKBACK RULE...........................................47
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT..............................................................48
7.2 TERMINATION............................................................48
7.3 MERGER OR CONSOLIDATION................................................49
7.4 LOANS TO PARTICIPANTS..................................................49
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS...................................................50
8.2 ALIENATION.............................................................51
8.3 CONSTRUCTION OF PLAN...................................................51
8.4 GENDER AND NUMBER......................................................51
8.5 LEGAL ACTION...........................................................52
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS.................................52
8.7 BONDING................................................................52
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.............................53
8.9 INSURER'S PROTECTIVE CLAUSE............................................53
8.10 RECEIPT AND RELEASE FOR PAYMENTS.......................................53
8.11 ACTION BY THE EMPLOYER.................................................53
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.....................53
8.13 HEADINGS...............................................................54
8.14 APPROVAL BY INTERNAL REVENUE SERVICE...................................54
8.15 UNIFORMITY.............................................................55
ARTICLE IX
PARTICIPATING EMPLOYERS
9.1 ADOPTION BY OTHER EMPLOYERS............................................55
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS................................55
9.3 DESIGNATION OF AGENT...................................................56
9.4 EMPLOYEE TRANSFERS.....................................................56
9.5 PARTICIPATING EMPLOYER CONTRIBUTION....................................56
9.6 AMENDMENT..............................................................56
9.7 DISCONTINUANCE OF PARTICIPATION........................................57
9.8 ADMINISTRATOR'S AUTHORITY..............................................57
9.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE......................57
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
SAVINGS INCENTIVE PLAN
THIS PLAN, hereby adopted this 1st day of October, 2001, by Central
Hudson Gas & Electric Corporation (herein referred to as the "Employer").
WITNESSETH:
WHEREAS, the Employer heretofore established a Profit Sharing
Plan effective Januay 1, 1984, (hereinafter called the "Effective Date") known
as Central Hudson Gas & Electric Corporation Savings Incentive Plan (herein
referred to as the "Plan") in recognition of the contribution made to its
successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective October 1, 2001, except as otherwise
provided, the Employer in accordance with the provisions of the Plan pertaining
to amendments thereof, hereby amends the Plan in its entirety and restates the
Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to administer
the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member
of a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Anniversary Date" means December 31.
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1.5 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.6 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.7 "Compensation" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code Section 3401(a)
(for the purposes of income tax withholding at the source) but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401 (a)(2)).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding overtime.
(b) excluding commissions.
(c) excluding bonuses.
(d) including amounts which are contributed by
the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 402(h)(1)(B),
403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Employee's effective date of
participation pursuant to Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such
amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17), except that the dollar increase in effect on January 1
of any calendar year shall be effective for the Plan Year beginning with or
within such calendar year. For any short Plan Year the Compensation limit shall
be an amount equal to the Compensation limit for the calendar year in which the
Plan Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
For purposes of this Section, if the Plan is a plan described
in Code
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Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.8 "Contract" or "Policy" means any life insurance policy,
retirement income or annuity policy or annuity contract (group or individual)
issued pursuant to the terms of the Plan.
1.9 "Deferred Compensation" with respect to any Participant means
the amount of the Participant's total Compensation which has been contributed to
the Plan in accordance with the Participant's deferral election pursuant to
Section 4.2 excluding any such amounts distributed as excess "annual additions"
pursuant to Section 4.10(a).
1.10 "Designated Investment Alternative" means a specific
investment identified by name by a Fiduciary as an available investment under
the Plan which may be acquired or disposed of by the Trustee pursuant to the
investment direction by a Participant.
1.11 "Directed Investment Option" means one or more of the
following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan
and the Participant Direction Procedures and acquired or
disposed of by the Trustee pursuant to the investment
direction of a Participant.
1.12 "Early Retirement Date" means the first day of the month
(prior to the Normal Retirement Date) coinciding with or following the date on
which a Participant or Former Participant attains age 55, and has completed at
least 10 Years of Service with the Employer (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still
employed at his Early Retirement Age.
A Former Participant who terminates employment after
satisfying the service requirement for Early Retirement and who thereafter
reaches the age requirement contained herein shall be entitled to receive his
benefits under this Plan.
1.13 "Elective Contribution" means the Employer contributions to
the Plan of Deferred Compensation excluding any such amounts distributed as
excess "annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.1(c) and Section
4.6(b) which is used to satisfy the "Actual Deferral Percentage" tests shall be
considered an Elective
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Contribution for purposes of the Plan. Any contributions deemed to be Elective
Contributions (whether or not used to satisfy the "Actual Deferral Percentage"
tests) shall be subject to the requirements of Sections 4.2(b) and 4.2(c) and
shall further be required to satisfy the nondiscrimination requirements of
Regulation 1.401(k)-1 (b)(5), the provisions of which are specifically
incorporated herein by reference.
1.14 "Eligible Employee" means any Employee.
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.15 "Employee" means any person who is employed by the Employer or
Affiliated Employer. Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and such Leased Employees
do not constitute more than 20% of the recipient's non- highly compensated work
force.
1.16 "Employer" means Central Hudson Gas & Electric Corporation and
any successor which shall maintain this Plan; and any predecessor which has
maintained this Plan. The Employer is a corporation, with principal offices in
the State of New York. In addition, where appropriate, the term Employer shall
include any Participating Employer (as defined in Section 9.1) which shall adopt
this Plan.
1.17 "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), voluntary Employee contributions
made pursuant to Section 4.12, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7(a).
1.18 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions used to satisfy the "Actual Deferral
Percentage" tests made on behalf of Highly Compensated Participants for the Plan
Year over the maximum amount of such contributions permitted under Section
4.5(a). Excess Contributions, including amounts recharacterized pursuant to
Section 4.6(a)(2), shall be treated as an "annual addition" pursuant to Section
4.9(b).
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1.19 "Excess Deferred Compensation" means, with respect to any
taxable year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 4.2(f) actually made on behalf of such Participant for such taxable
year, over the dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section 4.9(b) when contributed to the Plan
unless distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year. However, Excess
Deferred Compensation of Non-Highly Compensated Participants is not taken into
account for purposes of Section 4.5(a) to the extent such Excess Deferred
Compensation occurs pursuant to Section 4.2(d).
1.20 "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan,
including, but not limited to, the Trustee, the Employer and its representative
body, and the Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12
months commencing on January 1 of each year and ending the following December
31.
1.22 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.23 "415 Compensation" with respect to any Participant means such
Participant's wages for the Plan Year within the meaning of Code Section 3401(a)
(for the purposes of income tax withholding at the source) but determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the exception for agricultural labor in Code Section 3401 (a)(2)).
For Plan Years beginning after December 31, 1997, for purposes
of this Section, the determination of "415 Compensation" shall include any
elective deferral (as defined in Code Section 402(g)(3)), and any amount which
is contributed or deferred by the Employer at the election of the Participant
and which is not includible in the gross income of the Participant by reason of
Code Sections 125 or 457.
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
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1.24 "414(s) Compensation" with respect to any Participant means
such Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)
plus "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be
disregarded. Such amount shall be adjusted for increases in the cost of living
in accordance with Code Section 401 (a)(17), except that the dollar increase in
effect on January 1 of any calendar year shall be effective for the Plan Year
beginning with or within such calendar year. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation" limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by twelve
(12).
If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "414(s) Compensation" means compensation determined
pursuant to the Plan then in effect.
1.25 "Highly Compensated Employee" means, for Plan Years beginning
after December 31, 1996, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means an Employee who performed services
for the Employer during the "determination year" and is in one or more of the
following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" of the Employer. "Five percent owner" means any person
who owns (or is considered as owning within the meaning of
Code Section 318) more than five percent of the outstanding
stock of the Employer or stock possessing more than five
percent of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any
person who owns more than five percent of the capital or
profits interest in the
6
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(b) Employees who received "415 Compensation"
during the "look-back year" from the Employer in excess of
$80,000 and were in the Top Paid Group of Employees for the
Plan Year.
The "look-back year" shall be the calendar year ending with or
within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold amounts specified in (b), (c)
and (d) above shall be prorated based upon the number of months in the "lag
period."
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amount specified in (b) above shall be adjusted at such time
and in the same manner as under Code Section 415(d), except that the base period
shall be the calendar quarter ending September 30, 1996. In the case of such an
adjustment, the dollar limit which shall be applied is the limit for the
calendar year in which the "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911 (d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861 (a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.26 "Highly Compensated Former Employee" means a former Employee
who had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the foregoing, an
Employee who separated from service prior to 1987 will be treated as a Highly
Compensated Former Employee only if during the separation year (or year
7
preceding the separation year) or any year after the Employee attains age 55 (or
the last year ending before the Employee's 55th birthday), the Employee either
received "415 Compensation" in excess of $50,000 or was a "five percent owner."
For purposes of this Section, "determination year," "415 Compensation" and "five
percent owner" shall be determined in accordance with Section 1.25. Highly
Compensated Former Employees shall be treated as Highly Compensated Employees.
The method set forth in this Section for determining who is a "Highly
Compensated Former Employee" shall be applied on a uniform and consistent basis
for all purposes for which the Code Section 414(q) definition is applicable.
1.27 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.28 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding the above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for
8
the benefit of particular Employees or are on behalf of a group of Employees in
the aggregate.
For purposes of this Section, Hours of Service will be
credited for employment with other Affiliated Employers. The provisions of
Department of Labor regulations 2530.200b-2(b) and (c) are incorporated herein
by reference.
1.29 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.30 "Late Retirement Date" means the first day of the month
coinciding with or next following a Participant's actual Retirement Date after
having reached his Normal Retirement Date.
1.31 "Leased Employee" means any person (other than an Employee of
the recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money
purchase pension plan providing:
(1) a non-integrated employer contribution rate
of at least 10% of compensation, as defined in Code
Section 415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer
contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more
than 20% of the recipient's non-highly compensated work force.
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1.32 "Net Profit" means with respect to any Fiscal Year the
Employer's net income or profit for such Fiscal Year determined upon the basis
of the Employer's books of account in accordance with generally accepted
accounting principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan.
1.33 "Non-Elective Contribution" means the Employer contributions
to the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.34 "Non-Highly Compensated Participant" means any Participant who
is neither a Highly Compensated Employee nor a Family Member.
1.35 "Normal Retirement Age" means the Participant's 65th birthday.
A Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.36 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.37 "Participant" means any Eligible Employee who participates in
the Plan and has not for any reason become ineligible to participate further in
the Plan.
1.38 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.13 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.39 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Non-Elective
Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b), Employer discretionary
contributions made pursuant to Section 4.1(d) and any Employer Qualified Non-
Elective Contributions.
1.40 "Participant's Combined Account" means the total aggregate
amount of each Participant's Elective Account and Participant's Account.
1.41 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.42 "Participant's Elective Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest
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in the Plan and Trust resulting from the Employer Elective Contributions used to
satisfy the "Actual Deferral Percentage" tests. A separate accounting shall be
maintained with respect to that portion of the Participant's Elective Account
attributable to such Elective Contributions pursuant to Section 4.2 and any
Employer Qualified Non-Elective Contributions.
1.43 "Plan" means this instrument, including all amendments
thereto.
1.44 "Plan Year" means the Plan's accounting year of twelve (12)
months commencing on January 1 of each year and ending the following December
31.
1.45 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and Section
4.8(g). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.46 "Regulation" means the Income Tax Regulations as promulgated
by the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.47 "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.48 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early or Late
Retirement Date (see Section 6.1).
1.49 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.50 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked according
to the amount of "415 Compensation" (determined for this purpose in accordance
with Section 1.25) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911 (d)(2)) from the Employer
constituting United States source income within the meaning of Code Section 861
(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
11
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six
(6) months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.51 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders him incapable of continuing any gainful occupation and
which condition constitutes total disability under the federal Social Security
Acts.
1.52 "Trustee" means the person or entity named as trustee herein
or in any separate trust forming a part of this Plan, and any successors.
1.53 "Trust Fund" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.54 "USERRA" means the Uniformed Services Employment and
Reemployment Rights Act of 1994. Notwithstanding any provision of this Plan to
the contrary, effective December 12,1994, contributions, benefits and service
credit with respect to qualified military service will be provided in accordance
with Code Section 414(u).
1.55 "Valuation Date" means the Anniversary Date and such other
date or dates deemed necessary by the Administrator. The Valuation Date may
include any day during the Plan Year that the Trustee, any transfer agent
appointed by the Trustee or the Employer and any stock exchange used by such
agent are open for business.
12
1.56 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.57 "Voluntary Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to his
total interest in the Plan resulting from the Participant's nondeductible
voluntary contributions made pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a) shall remain subject to the limitations of Sections
4.2(b) and 4.2(c).
Therefore, a separate accounting shall be maintained with
respect to that portion of the Voluntary Contribution Account attributable to
voluntary Employee contributions made pursuant to Section 4.12.
1.58 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
The computation period shall be the Plan Year if not otherwise
set forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and
responsibilities otherwise provided for in this Plan, the
Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to ensure that the
Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may
appoint counsel, specialists, advisers, agents (including any
nonfiduciary agent) and other persons as the Employer deems
necessary or desirable in connection with the exercise of its
fiduciary duties under this Plan. The Employer may compensate
such agents or advisers from the assets of the Plan as
fiduciary expenses (but not including any business (settlor)
13
expenses of the Employer), to the extent not paid by the
Employer.
(b) The Employer shall establish a "funding
policy and method," i.e., it shall determine whether the Plan
has a short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy
and method" shall not, however, constitute a directive to the
Trustee as to investment of the Trust Funds. Such "funding
policy and method" shall be consistent with the objectives of
this Plan and with the requirements of Title I of the Act.
(c) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions of
this Plan or pursuant to procedures established hereunder.
This requirement may be satisfied by formal periodic review by
the Employer or by a qualified person specifically designated
by the Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may
appoint any person, including, but not limited to, the Employees of the
Employer, to perform the duties of the Administrator. Any person so appointed
shall signify his acceptance by filing written acceptance with the Employer.
Upon the resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry out
the purpose of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the
14
Act and all regulations issued pursuant thereto. The Administrator shall have
all powers necessary or appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee
with respect to the amount and the kind of benefits to which
any Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with
respect to all nondiscretionary or otherwise directed
disbursements from the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and
to make and publish such rules for regulation of the Plan as
are consistent with the terms hereof;
(f) to determine the size and type of any
Contract to be purchased from any insurer, and to designate
the insurer from which such Contract shall be purchased;
(g) to compute and certify to the Employer and
to the Trustee from time to time the sums of money necessary
or desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan
in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
(i) to prepare and implement a procedure to
notify Eligible Employees that they may elect to have a
portion of their Compensation deferred or paid to them in
cash;
(j) to act as the named Fiduciary responsible
for communications with Participants as needed to maintain
Plan compliance with ERISA Section 404(c), including but not
limited to the receipt and transmitting of Participant's
directions as to the investment of their account(s) under the
Plan and the formulation of policies, rules, and procedures
pursuant to which Participants may give investment
15
instructions with respect to the investment of their accounts;
(k) to assist any Participant regarding his
rights, benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other data that
may be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any Named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, agents (including nonfiduciary agents) appointed
for the purpose of assisting the Administrator or the Trustee in carrying out
the instructions of Participants as to the directed investment of their accounts
and other specialists and their agents, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed. In the
event the claim is denied, the reasons for the denial shall be specifically set
forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation
16
of the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to Section
2.7 shall be entitled to request the Administrator to give further consideration
to his claim by filing with the Administrator (on a form which may be obtained
from the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto upon 5 business days written notice to the Administrator) the
claimant or his representative shall have an opportunity to review all documents
in the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date of his employment with the Employer. However, any Employee
who was a Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the date on which he satisfies the eligibility requirements of Section 3.1.
17
In the event an Employee who is not a member of an eligible
class of Employees becomes a member of an eligible class, such Employee will
participate immediately if such Employee would have otherwise previously become
a Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a
classification of an Eligible Employee to an ineligible
Employee, such Former Participant shall continue to vest in
his interest in the Plan for each Year of Service completed
while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed
pursuant to the terms of the Plan. Additionally, his interest
in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is no longer a
member of an eligible class of Employees and becomes
ineligible to participate, such Employee will participate
immediately upon returning to an eligible class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has
been made, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be
18
distributed to the ineligible person) for the Plan Year in which the discovery
is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least thirty
(30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section 4.2(a),
which amount shall be deemed an Employer Elective
Contribution.
(b) On behalf of each Participant who is
eligible to share in matching contributions for the Plan Year,
a discretionary matching contribution equal to a uniform
percentage of each such Participant's Deferred Compensation,
the exact percentage, if any, to be determined each year by
the Employer, which amount, if any, shall be deemed an
Employer Non-Elective Contribution.
Except, however, in applying the matching
percentage specified above, only salary reductions up to 6% of
Compensation for Participants subject to a collective
bargaining agreement and 8% of Compensation for all other
Participants shall be considered.
(c) On behalf of each Non-Highly Compensated
Participant who is eligible to share in the Qualified
Non--Elective Contribution for the Plan Year, a discretionary
Qualified Non- Elective Contribution equal to a uniform
percentage of each eligible individual's Compensation, the
exact percentage, if any, to be determined each year by the
Employer. Any Employer Qualified Non-Elective Contribution
shall be deemed an Employer Elective Contribution.
(d) A discretionary amount out of its current or
accumulated Net Profits, which amount, if any, shall be deemed
an Employer Non-Elective Contribution.
(e) All contributions by the Employer shall be
made in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
19
(a) Each Participant may elect to defer from 1%
to 12% of his Compensation which would have been received in
the Plan Year, but for the deferral election. A deferral
election (or modification of an earlier election) may not be
made with respect to Compensation which is currently available
on or before the date the Participant executed such election.
For purposes of this Section, Compensation shall be determined
prior to any reductions made pursuant to Code Sections 125,
402(e)(3), 402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to
that Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) Notwithstanding anything in the Plan to the
contrary, amounts held in the Participant's Elective Account
may not be distributable (including any offset of loans)
earlier than:
(1) a Participant's separation from service,
Total and Permanent Disability, or death;
(2) Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as that term is
described in Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to
an entity that is not an Affiliated Employer of substantially all of
the assets (within the meaning of Code Section 409(d)(2)) used in a
trade or business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a Participant
who continues employment with the corporation acquiring such assets;
(5) the date of disposition by the Employer or
an Affiliated Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to an entity
which is not an Affiliated Employer but only with respect to a
Participant who continues employment with such subsidiary; or
20
(6) the proven financial hardship of a
Participant, subject to the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this
Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as
in effect at the beginning of such taxable year. If such
dollar limitation is exceeded, a Participant will be deemed to
have notified the Administrator of such excess amount which
shall be distributed in a manner consistent with Section
4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in
accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on
his behalf for a period of twelve (12) months following the
receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by
the Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation
under this Plan together with any elective deferrals (as
defined in Regulation 1.402(g)-1(b)) under another qualified
cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code
Section 408(k)), a salary reduction arrangement (within the
meaning of Code Section 3121 (a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust
described in Code Section 501 (c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted
annually in accordance with the method provided in Code
Section 415(d) pursuant to Regulations) for such Participant's
taxable year, the Participant may, not later than March 1
following the close of the Participant's taxable year, notify
the Administrator in writing of such excess and request that
his Deferred Compensation under this Plan be reduced by an
amount specified by the Participant. In such event, the
Administrator may direct the Trustee to distribute such excess
amount (and any Income allocable to such excess amount) to the
Participant not later than the first April 15th following the
close of the Participant's taxable year. Any distribution of
less than the entire amount of Excess Deferred Compensation
and Income shall be treated as a pro rata distribution of
Excess Deferred Compensation and
21
Income. The amount distributed shall not exceed the
Participant's Deferred Compensation under the Plan for the
taxable year (and any Income allocable to such excess amount).
Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as
Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f) shall be
made first from unmatched Deferred Compensation and, thereafter, from Deferred
Compensation which is matched. Matching contributions which relate to such
Deferred Compensation shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution and/or
recharacterization of Excess Contributions pursuant to Section
4.6(a) for the Plan Year beginning with or within the taxable
year of the Participant.
(h) At Normal Retirement Date, or such other
date when the Participant shall be entitled to receive
benefits, the fair market value of the Participant's Elective
Account shall be used to provide additional benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made
pursuant to this Section may be segregated into a separate
account for each Participant in a federally insured savings
account, certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall
implement the salary reduction elections provided for herein
in accordance with the following:
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its
contribution to the
22
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer federal income tax return for the Fiscal
Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer general
assets, but in any event within ninety (90) days from the date on which such
amounts would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor regulations 2510.3-102 are incorporated herein
by reference. Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan Year shall be paid to
the Plan no later than the twelve-month period immediately following the close
of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and
maintain an account in the name of each Participant to which
the Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) The Employer shall provide the Administrator
with all information required by the Administrator to make a
proper allocation of the Employer contributions for each Plan
Year. Within a reasonable period of time after the date of
receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(a), to each
Participant's Elective Account in an amount equal to
each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(b), to each Participant's Account in accordance
with Section 4.1(b).
Any Participant actively employed during the Plan Year shall be
eligible to share in the matching contribution for the Plan Year.
However, with respect to Plan Years beginning after December 31, 1989,
in lieu of the foregoing, only Participants who are actively employed
during the Plan Year shall be eligible to share in the matching
contributions for the year.
(3) With respect to the Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(c), to each Participant's
Elective Account when used to satisfy the "Actual Deferral Percentage"
tests or Participant's Account in accordance with Section 4.1(c).
23
Any Non-Highly Compensated Participant actively employed during the
Plan Year shall be eligible to share in the Qualified Non-Elective
Contribution for the Plan Year. However, with respect to Plan Years
beginning after December 31, 1989, in lieu of the foregoing, only Non-
Highly Compensated Participants who are actively employed during the
Plan Year shall be eligible to share in the Qualified Non-Elective
Contribution for the year.
(4) With respect to the Employer Non-Elective Contribution made
pursuant to Section 4.1(d), to each Participant's Account in the same
proportion that each such Participant's Compensation for the year bears
to the total Compensation of all Participants for such year.
Any Participant actively employed during the Plan Year shall be
eligible to share in the discretionary contribution for the year.
However, with respect to Plan Years beginning after December 31, 1989,
in lieu of the foregoing, only Participants who are actively employed
during the Plan Year shall be eligible to share in the discretionary
contribution for the year.
(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made available to
reinstate previously forfeited account balances of Former Participants, if any,
in accordance with Section 6.4(f)(2). The remaining Forfeitures, if any, shall
be in the following manner:
(1) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(d) shall be used to reduce
the Employer contribution for the Plan Year in which such Forfeitures
occur.
(d) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement (Early,
Normal or Late), Total and Permanent Disability or death shall share in the
allocation of contributions for that Plan Year.
Participants' transfers from other qualified
plans and voluntary contributions deposited in the general
Trust Fund shall share in any earnings and losses (net
appreciation or net depreciation) of the Trust Fund in the
same manner provided above. Each segregated account maintained
on behalf of a Participant shall be credited or charged with
its separate earnings and losses.
(e) Notwithstanding anything herein to the
contrary, Participants who terminated employment for any
reason during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(f) If a Former Participant is reemployed after
five (5) consecutive 1-Year Breaks in Service, then separate
accounts shall be
24
maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre- break service; and
(2) one account representing his status in the
Plan attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan
Year, the annual allocation derived from Employer Elective
Contributions to a Participant's Elective Account shall
satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the
Highly Compensated Participant group shall not be more than
the "Actual Deferral percentage" of the Non-Highly Compensated
Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral
Percentage" for the Highly Compensated Participant
group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not be
more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The
provisions of Code Section 401(k)(3) and Regulation
1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple
use of the alternative method described in (2) above
and in Code Section 401(m)(9)(A), any Highly
Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 and to make
Employee contributions or to receive matching
contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer
shall have a combination of his actual deferral ratio
and his actual contribution ratio reduced pursuant to
Section 4.6(a) and Regulation 1.401(m)-2, the
provisions of which are incorporated herein by
reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non- Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Elective Account
for such Plan Year, to such Participant's "414(s) Compensation" for such Plan
Year. The actual deferral
25
ratio for each Participant and the "Actual Deferral Percentage" for each group
shall be calculated to the nearest one-hundredth of one percent. Employer
Elective Contributions allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred Compensation to the extent
such excess amounts are made under this Plan or any other plan maintained by the
Employer.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall include
any Employee eligible to make a deferral election pursuant to Section 4.2,
whether or not such deferral election was made or suspended pursuant to Section
4.2.
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section 401(a)(4)
or 410(b) (other than Code Section 410 (b)(2)(A)(ii)), the cash or deferred
arrangements included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be considered as a
single arrangement for purposes of determining whether or not such arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a case, the cash or
deferred arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for purposes of
this Section and Code Sections 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be combined with this Plan
for purposes of determining whether the employee stock ownership plan or this
Plan satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) or 409 of the Employer or
an Affiliated Employer, all such cash or deferred arrangements shall be treated
as one cash or deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant. However, if
the cash or deferred arrangements have different plan years, this paragraph
shall be applied by treating all cash or deferred arrangements ending with or
within the same calendar year as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer
Elective Contributions made pursuant to Section 4.4 do not satisfy one of the
tests set forth in Section 4.5(a), the Administrator shall adjust Excess
Contributions pursuant to the
26
options set forth below:
(a) On or before the fifteenth day of the third
month following the end of each Plan Year, the Highly
Compensated Participant having the highest actual deferral
ratio shall have his portion of Excess Contributions
distributed to him and/or at his election recharacterized as a
voluntary Employee contribution pursuant to Section 4.12 until
one of the tests set forth in Section 4.5(a) is satisfied, or
until his actual deferral ratio equals the actual deferral
ratio of the Highly Compensated Participant having the second
highest actual deferral ratio. This process shall continue
until one of the tests set forth in Section 4.5(a) is
satisfied. For each Highly Compensated Participant, the amount
of Excess Contributions is equal to the Elective Contributions
used to satisfy the "Actual Deferral Percentage" tests on
behalf of such Highly Compensated Participant (determined
prior to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this
paragraph) by his "414(s) Compensation." However, in
determining the amount of Excess Contributions to be
distributed and/or recharacterized with respect to an affected
Highly Compensated Participant as determined herein, such
amount shall be reduced pursuant to Section 4.2(f) by any
Excess Deferred Compensation previously distributed to such
affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than
the close of the Plan Year following the
Plan Year to which they are allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer
as a distribution of Excess Contributions
(and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on which
the last of those Highly Compensated Participants with Excess
Contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
27
(ii) shall not exceed the amount of Deferred Compensation
on behalf of any Highly Compensated Participant for any Plan
Year;
(iii) shall be treated as voluntary Employee contributions
for purposes of Code Section 401 (a)(4) and Regulation
1.401(k)-1(b). Excess Contributions recharacterized as
voluntary Employee contributions shall continue to be
nonforfeitable and subject to the same distribution rules
provided for in Section 4.2(c);
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of
voluntary Employee contributions (determined prior to
application of Section 4.7(a)) that such Highly Compensated
Participant is permitted to make under the Plan in the absence
of recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution and/or recharacterization
of less than the entire amount of Excess
Contributions shall be treated as a pro rata
distribution and/or recharacterization of Excess
Contributions and Income.
(4) Matching contributions which relate to
Excess Contributions shall be forfeited unless the
related matching contribution is distributed as an
Excess Aggregate Contribution pursuant to Section
4.8.
(b) Within twelve (12) months after the end of
the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants electing salary reductions pursuant to Section
4.2 in an amount sufficient to satisfy one of the tests set
forth in Section 4.5(a). Such contribution shall be allocated
to the Participant's Elective Account of each Non-Highly
Compensated Participant electing salary reductions pursuant to
Section 4.2 in the same proportion that each such Non-Highly
Compensated Participant's Deferred Compensation for the year
bears to the total Deferred Compensation of all such
Non-Highly Compensated Participants.
(c) If during a Plan Year the projected
aggregate amount of Elective Contributions to be allocated to
all Highly Compensated Participants under this Plan would, by
virtue of the tests set forth in Section 4.5(a), cause the
Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided
in Section 4.6(a) each affected Highly Compensated
Participant's deferral
28
election made pursuant to Section 4.2 by an amount necessary
to satisfy one of the tests set forth in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the
Highly Compensated Participant group shall not exceed the
greater of:
(1) 125 percent of such percentage for the
Non-Highly Compensated Participant group; or
(2) the lesser of 200 percent of such percentage
for the Non-Highly Compensated Participant group, or
such percentage for the Non-Highly Compensated
Participant group plus 2 percentage points. However,
to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401
(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deterred arrangement
maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive
matching contributions under this Plan or under any
plan maintained by the Employer or an Affiliated
Employer shall have a combination of his actual
deferral ratio and his actual contribution ratio
reduced pursuant to Regulation 1.401 (m)-2 and
Section 4.8(a). The provisions of Code Section 401(m)
and Regulations 1.401(m)-1 (b) and 1.401 (m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section
4.8, "Actual Contribution Percentage" for a Plan Year means,
with respect to the Highly Compensated Participant group and
Non- Highly Compensated Participant group, the average of the
ratios (calculated separately for each Participant in each
group) of:
(1) the sum of Employer matching contributions
made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12 and Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) on behalf of each
such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for
such Plan Year.
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer
matching contributions contributed to the Plan prior to the
end of the succeeding Plan Year
29
shall be considered. In addition, the Administrator may elect
to take into account, with respect to Employees eligible to
have Employer matching contributions pursuant to Section
4.1(b) or voluntary Employee contributions pursuant to Section
4.12 allocated to their accounts, elective deferrals (as
defined in Regulation 1.402(g)-1(b)) and qualified
non-elective contributions (as defined in Code Section 401
(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching
contributions subject to Regulation 1.401(m)-1(b)(5) which is
incorporated herein by reference. However, the Plan Year must
be the same as the plan year of the plan to which the elective
deferrals and the qualified non- elective contributions are
made.
(d) For purposes of this Section and Code
Sections 401 (a)(4), 410(b) and 401(m), if two or more plans
of the Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401 (a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)),
such plans shall be treated as one plan. In addition, two or
more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as
a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401 (a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section
and Code Sections 401 (a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Plans may be aggregated
under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or 409 may
not be aggregated with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401 (a)(4), 410(b)
and 401(m).
(e) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7) or
409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans
have different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar
year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a
Highly Compensated Participant and Non-Highly Compensated
Participant shall
30
include any Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) or voluntary employee contributions (whether or not
voluntary employee contributions are made) allocated to his
account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution
Percentage" for the Highly Compensated Participant group
exceeds the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group pursuant to Section
4.7(a), the Administrator (on or before the fifteenth day of
the third month following the end of the Plan Year, but in no
event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his
Vested portion of Excess Aggregate Contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit
such non-Vested Excess Aggregate Contributions attributable to
Employer matching contributions (and Income allocable to such
forfeitures) until either one of the tests set forth in
Section 4.7(a) is satisfied, or until his actual contribution
ratio equals the actual contribution ratio of the Highly
Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of
the tests set forth in Section 4.7(a) is satisfied. The
distribution and/or forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Voluntary Employee contributions including
Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a)(2);
(2) Employer matching contributions.
(b) Any distribution and/or forfeiture of less
than the entire amount of Excess Aggregate Contributions (and
Income) shall be treated as a pro rata distribution and/or
forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions attributable
to amounts other than voluntary Employee contributions,
including forfeited matching contributions, shall be treated
as Employer contributions for purposes of Code Sections 404
and 415 even if distributed from the Plan.
31
Forfeited matching contributions that are
reallocated to Participants' Accounts for the Plan Year in
which the forfeiture occurs shall be treated as an "annual
addition" pursuant to Section 4.9(b) for the Participants to
whose Accounts they are reallocated and for the Participants
from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the
amount of Excess Aggregate Contributions is equal to the
Employer matching contributions made pursuant to Section
4.1(b), voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a)
and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c) on
behalf of the Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's
actual contribution ratio (determined after application of
this paragraph) by his "414(s) Compensation." The actual
contribution ratio must be rounded to the nearest
one-hundredth of one percent. In no case shall the amount of
Excess Aggregate Contribution with respect to any Highly
Compensated Participant exceed the amount of Employer matching
contributions made pursuant to Section 4.1(b), voluntary
Employee contributions made pursuant to Section 4.12, Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified
non-elective contributions or elective deferrals taken into
account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall be
made after first determining the Excess Contributions, if any,
to be treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified
cash or deferred arrangement (as defined in Code Section 401
(k)) maintained by the Employer that ends with or within the
Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section
4.6(a).
(f) If during a Plan Year the projected
aggregate amount of Employer matching contributions, voluntary
Employee contributions and Excess Contributions
recharacterized as voluntary Employee contributions to be
allocated to all Highly Compensated Participants under this
Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in
the order provided in Section 4.8(a) each affected Highly
Compensated Participant's projected share of such
contributions by an amount necessary to satisfy one of the
tests set forth in Section 4.7(a).
32
(g) Notwithstanding the above, within twelve
(12) months after the end of the Plan Year, the Employer may
make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's Account
of Non-Highly Compensated Participant in the same proportion
that each Non-Highly Compensated Participant's Compensation
for the Plan Year bears to the total Compensation of all
Non-Highly Compensated Participants for the Plan Year. A
separate accounting of any special Qualified Non-Elective
Contribution shall be maintained in the Participant's Account.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year."
For any short "limitation year," the dollar limitation in (1)
above shall be reduced by a fraction, the numerator of which
is the number of full months in the short "limitation year"
and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of
Code Section 415, "annual additions" means the sum credited
to a Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 41
9A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however,
the "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1).
(c) For purposes of applying the limitations of
Code Section 415, the transfer of funds from one qualified
plan to another is not an "annual addition." In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant
33
from the Plan; (3) repayments of distributions received by an
Employee pursuant to Code Section 411(a)(7)(B) (cash-outs);
(4) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code
Section 408(k)(6).
(d) For purposes of applying the limitations of
Code Section 415, the "limitation year" shall be the Plan
Year.
(e) For the purpose of this Section, all
qualified defined contribution plans (whether terminated or
not) ever maintained by the Employer shall be treated as one
defined contribution plan.
(f) For the purpose of this Section, if the
Employer is a member of a controlled group of corporations,
trades or businesses under common control (as defined by Code
Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)), is a member of an affiliated service
group (as defined by Code Section 414(m)), or is a member of a
group of entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of such
Employers shall be considered to be employed by a single
Employer.
(g) For the purpose of this Section, if this
Plan is a Code Section 413(c) plan, each Employer who
maintains this Plan will be considered to be a separate
Employer.
(h)(1) If a Participant participates in more than
one defined contribution plan maintained by the Employer which
have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a
defined contribution plan subject to Code Section 412
and a defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the
same Anniversary Date, "annual additions" will be
credited to the Participant's accounts under the
defined contribution plan subject to Code Section 412
prior to crediting "annual additions" to the
Participant's accounts under the defined contribution
plan not subject to Code Section 412.
(3) If a Participant participates in more than
one defined contribution plan not subject to Code
Section 412 maintained by the Employer which have the
same Anniversary Date, the maximum "annual additions"
under this Plan shall equal the
34
product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2)
above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be
credited to such Participant's accounts under this
Plan without regard to the limitations of Code
Section 415 and (ii) the denominator of which is such
"annual additions" for all plans described in this
subparagraph.
(i) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or
other facts and circumstances to which Regulation 1.4156(b)(6)
shall be applicable, the "annual additions" under this Plan
would cause the maximum "annual additions" to be exceeded for
any Participant, the Administrator shall
(1) distribute any elective deferrals (within
the meaning of Code Section 402(g)(3)) or return any Employee
contributions (whether voluntary or mandatory), and for the
distribution of gains attributable to those elective deferrals
and Employee contributions, to the extent that the
distribution or return would reduce the "excess amount" in the
Participant's accounts
(2) hold any "excess amount" remaining after the
return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the
"Section 415 suspense account" in the next "limitation year"
(and succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that
Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in
the next "limitation year" (and succeeding "limitation years"
if necessary) to all Participants in the Plan before any
Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation
year" (4) reduce Employer contributions to the Plan for such
"limitation year" by the amount of the "Section 415 suspense
account" allocated and reallocated during such "limitation
year."
35
(b) For purposes of this Article, "excess
amount" for any Participant for a "limitation year" shall mean
the excess, if any, of (1) the "annual additions" which would
be credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the
maximum "annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator,
amounts may be transferred from other qualified plans by
Eligible Employees, provided that the trust from which such
funds are transferred permits the transfer to be made and the
transfer will not jeopardize the tax exempt status of the Plan
or Trust or create adverse tax consequences for the Employer.
The amounts transferred shall be set up in a separate account
herein referred to as a "Participant's Rollover Account." Such
account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account
shall be held by the Trustee pursuant to the provisions of
this Plan and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations
(including Regulation 1.411 (d)-4), amounts attributable to
elective contributions (as defined in Regulation 1.401 (k)-1
(g)(3)), including amounts treated as elective contributions,
which are transferred from another qualified plan in a
plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)- 1(d).
(d) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute all or a
portion of the amount credited to the Participant's Rollover
Account. Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent
with and satisfies the provisions of Section 6.5, including,
but not limited to, all notice and consent requirements of
Code Section 411 (a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent
36
may be made.
(e) The Administrator may direct that employee
transfers made after a Valuation Date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under Code
Section 401(a). The term "amounts transferred from other
qualified plans" shall mean: (i) amounts transferred to this
Plan directly from another qualified plan; (ii) distributions
from another qualified plan which are eligible rollover
distributions and which are either transferred by the Employee
to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by
another qualified plan as a lump-sum distribution (B) were
eligible for tax-free rollover to a qualified plan and (C)
were deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting
the requirements of clause (iii) above, and transferred by the
Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which
this Section applies, the Administrator may require the
Employee to establish that the amounts to be transferred to
this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or
indirect transfers (as that term is defined and interpreted
under Code Section 401 (a)(11) and the Regulations thereunder)
from a defined benefit plan, money purchase plan (including a
target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of
payment to the Participant.
(i) Notwithstanding anything herein to the
contrary, a transfer directly to this Plan from another
qualified plan (or a transaction having
37
the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any
"Section 411 (d)(6) protected benefit" as described in Section
7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the
opportunity to increase their retirement income, each
Participant may, at the discretion of the Administrator, elect
to voluntarily contribute a portion of his compensation earned
while a Participant under this Plan. Such contributions shall
be paid to the Trustee within a reasonable period of time but
in no event later than ninety (90) days after the Employer
receives the contribution. The balance in each Participant's
Voluntary Contribution Account shall be fully Vested at all
times and shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his
voluntary contributions from his Voluntary Contribution
Account and the actual earnings thereon in a manner which is
consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent
requirements of Code Section 411 (a)(11) and the Regulations
thereunder. If the Administrator maintains sub- accounts with
respect to voluntary contributions (and earnings thereon)
which were made on or before a specified date, a Participant
shall be permitted to designate which sub-account shall be the
source for his withdrawal.
In the event such a withdrawal is made, or
in the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B)
from any other plan maintained by the Employer, then such
Participant shall be barred from making any voluntary
contributions to the Trust Fund for a period of twelve (12)
months after receipt of the withdrawal or distribution.
(c) At Normal Retirement Date, or such other
date when the Participant or his Beneficiary shall be entitled
to receive benefits, the fair market value of the Voluntary
Contribution Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
(d) The Administrator may direct that voluntary
contributions made after a Valuation Date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the
Administrator.
38
4.13 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure
established by the Administrator (the Participant Direction
Procedures) and applied in a uniform nondiscriminatory manner,
direct the Trustee to invest all of their accounts in specific
assets, specific funds or other investments permitted under
the Plan and the Participant Direction Procedures. That
portion of the interest of any Participant so directing will
thereupon be considered a Participant's Directed Account.
(b) As of each Valuation Date, all Participant
Directed Accounts shall be charged or credited with the net
earnings, gains, losses and expenses as well as any
appreciation or depreciation in the market value using
publicly listed fair market values when available or
appropriate.
(1) To the extent that the assets in a
Participant's Directed Account are accounted for as
pooled assets or investments, the allocation of
earnings, gains and losses of each Participant's
Directed Account shall be based upon the total amount
of funds so invested, in a manner proportionate to
the Participant's share of such pooled investment.
(2) To the extent that the assets in the
Participant's Directed Account are accounted for as
segregated assets, the allocation of earnings, gains
and losses from such assets shall be made on a
separate and distinct basis.
(c) The Participant Direction Procedures shall
provide an explanation of the circumstances under which
Participants and their Beneficiaries may give investment
instructions, including, but need not be limited to, the
following:
(1) the conveyance of instructions by the
Participants and their Beneficiaries to invest
Participant Directed Accounts in Directed
Investments;
(2) the name, address and phone number of the
Fiduciary (and, if applicable, the person or persons
designated by the Fiduciary to act on its behalf)
responsible for providing information to the
Participant or a Beneficiary upon request relating to
the investments in Directed Investments;
(3) applicable restrictions on transfers to and
from any Designated Investment Alternative;
39
(4) any restrictions on the exercise of voting,
tender and similar rights related to a Directed
Investment by the Participants or their
Beneficiaries;
(5) a description of any transaction fees and
expenses which affect the balances in Participant
Directed Accounts in connection with the purchase or
sale of Directed Investments; and
(6) general procedures for the dissemination of
investment and other information relating to the
Designated Investment Alternatives as deemed
necessary or appropriate, including but not limited
to a description of the following:
(i) the investment vehicles available
under the Plan, including specific
information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers;
and
(iii) a description of the additional
information which may be obtained upon
request from the Fiduciary designated to
provide such information.
(d) Any information regarding investments
available under the Plan, to the extent not required to be
described in the Participant Direction Procedures, may be
provided to the Participant in one or more written documents
which are separate from the Participant Direction Procedures
and are not thereby incorporated by reference into this Plan.
(e) The Administrator may, at its discretion,
include in or exclude by amendment or other action from the
Participant Direction Procedures such instructions, guidelines
or policies as it deems necessary or appropriate to ensure
proper administration of the Plan, and may interpret the same
accordingly.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Valuation Date, to determine the net worth of the assets comprising the Trust
Fund as it exists on the Valuation Date. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value as of the Valuation Date and shall
40
deduct all expenses for which the Trustee has not yet obtained reimbursement
from the Employer or the Trust Fund. The Trustee may update the value of any
shares held in the Participant Directed Account by reference to the number of
shares held by that Participant, priced at the market value as of the Valuation
Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the
Employer and retire for the purposes hereof on his Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
his employment with the Employer to a later date, in which event the
participation of such Participant in the Plan, including the right to receive
allocations pursuant to Section 4.4, shall continue until his Late Retirement
Date. Upon a Participant's termination of employment, or as soon thereafter as
is practicable, the Trustee shall distribute, at the election of the
Participant, all amounts credited to such Participant's Combined Account in
accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall
become fully Vested. The Administrator shall direct the
Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute the value of the deceased Participant's
accounts to the Participant's Beneficiary.
41
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the death benefit.
(d) The Administrator may require such proper
proof of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and
of the right of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant's spouse.
Except, however, the Participant may designate a Beneficiary
other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has
been abandoned (within the meaning of local law) and
the Participant has a court order to such effect (and
there is no "qualified domestic relations order" as
defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by
filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the right to
limit consent only to a specific Beneficiary and that the
spouse voluntarily elected to relinquish such right. In the
event no valid designation of Beneficiary exists at the time
of the Participant's death, the death benefit shall be payable
to his estate.
(f) Any consent by the Participant's spouse to
waive any
42
rights to the death benefit must be in writing, must
acknowledge the effect of such waiver, and be witnessed by a
Plan representative or a notary public. Further, the spouse's
consent must be irrevocable and must acknowledge the specific
nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the
Employer is terminated for any reason other than death, Total
and Permanent Disability or retirement, such Participant shall
be entitled to such benefits as are provided hereinafter
pursuant to this Section 6.4.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer
(upon the Participant's death, Total and Permanent Disability,
Early or Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee to
cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such
Terminated Participant. Any distribution under this paragraph
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit derived from Employer and Employee
contributions does not exceed $5,000 ($3,500 for Plan Years
beginning prior to August 6,1997), the Administrator shall
direct the Trustee to cause the entire Vested benefit to be
paid to such Participant in a single lump sum.
(b) A Participant shall become fully Vested in
his Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b) immediately upon
entry into the Plan.
(c) Notwithstanding the vesting schedule above,
the Vested percentage of a Participant's Account shall not be
less than the Vested percentage attained as of the later of
the effective date or adoption date
43
of this amendment and restatement.
(d) Notwithstanding the vesting schedule above,
upon the complete discontinuance of the Employer contributions
to the Plan or upon any full or partial termination of the
Plan, all amounts credited to the account of any affected
Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
(e) The computation of a Participant's
nonforfeitable percentage of his interest in the Plan shall
not be reduced as the result of any direct or indirect
amendment to this Plan. In the event that the Plan is amended
to change or modify any vesting schedule, a Participant with
at least three (3) Years of Service as of the expiration date
of the election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule.
The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after the
latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written
notice of the amendment from the Employer or
Administrator.
(f)(1) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account shall be reinstated
only if he repays the full amount distributed to him before the earlier
of five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive 1-Year Breaks in Service commencing
after the distribution. In the event the Former Participant does repay
the full amount distributed to him, the undistributed portion of the
Participant's Account must be restored in full, unadjusted by any gains
or losses occurring subsequent to the Valuation Date coinciding with or
preceding his termination. The source for such reinstatement shall
first be any Forfeitures occurring during the year. If such source is
insufficient, then the Employer shall contribute an amount which is
sufficient to restore any such forfeited Accounts provided, however,
that if a discretionary contribution is
44
made for such year pursuant to Section 4.1(d), such contribution shall
first be applied to restore any such Accounts and the remainder shall
be allocated in accordance with Section 4.4.
(3) If any Former Participant is reemployed after a 1-Year Break
in Service has occurred, of Service shall include of Service prior to
his 1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre- break and post-break service shall be used
for computing of Service for eligibility and for vesting
purposes only after he has been employed for one (1) of
Service following the date of his reemployment with the
Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits
otherwise allowable under (i) above if his consecutive 1-Year
Breaks in Service equal or exceed the greater of (A) five (5)
or (B) the aggregate number of his pre-break of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service,
a Former Participant's Vested Account balance attributable to
pre-break service shall not be increased as a result of
post-break service;
(iv) If a Former Participant is reemployed by the
Employer, he shall participate in the Plan immediately on his
date of reemployment;
(v) If a Former Participant (a 1-Year Break in Service
previously occurred, but employment had not terminated) is
credited with an Hour of Service after the first eligibility
computation period in which he incurs a 1-Year Break in
Service, he shall participate in the Plan immediately.
(g) In determining of Service for purposes of
vesting under the Plan, of Service prior to the Effective Date
of the Planshall be excluded.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of
the Participant, shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is
entitled under the Plan in one or more of the following
methods:
(1) One lump-sum payment in cash.
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such
45
installment payments, the Administrator may (A)
segregate the aggregate amount thereof in a separate,
federally insured savings account, certificate of
deposit in a bank or savings and loan association,
money market certificate or other liquid short-term
security or (B) purchase a nontransferable annuity
contract for a term certain (with no life
contingencies) providing for such payment. The period
over which such payment is to be made shall not
extend beyond the Participant's life expectancy (or
the life expectancy of the Participant and his
designated Beneficiary).
(b) Any distribution to a Participant who has a
benefit which exceeds $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997) shall require such Participant's
consent if such distribution commences prior to the later of
his Normal Retirement Age or age 62. However, if a Participant
has begun to receive distributions pursuant to an optional
form of benefit under which at least One scheduled periodic
distribution has not yet been made, and if the value of the
Participant's benefit, determined at the time of the first
distribution under that optional form of benefit, exceeded
$5,000 ($3,500 for Plan Years beginning prior to August
6,1997), then the value of the Participant's benefit is deemed
to continue to exceed such amount. With regard to this
required consent:
(1) The Participant must be informed of his
right to defer receipt of the distribution. If a
Participant fails to consent, it shall be deemed an
election to defer the commencement of payment of any
benefit. However, any election to defer the receipt
of benefits shall not apply with respect to
distributions which are required under Section
6.5(c).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the date the distribution
commences.
(3) Consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the date the distribution commences.
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the distribution.
Any such distribution may commence less than 30 days after the notice
required under Regulation 1.411(a)-11(c) is given, provided that:
46
(1) Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
(c) Notwithstanding any provision in the Plan to the contrary, for
Plan Years beginning after December 31, 1996, the distribution of a
Participant's benefits shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401 (a)(9) and the
Regulations thereunder (including Regulation 1.401 (a)(9)-2), the provisions of
which are incorporated herein by reference:
Alternatively, distributions to a Participant must begin no later than
the applicable April 1st as determined under the preceding paragraph
and must be made over a period certain measured by the life expectancy
of the Participant (or the life expectancies of the Participant and his
designated Beneficiary) in accordance with Regulations.
(1) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401 (a)(9)(G) and the Regulations
thereunder.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall be redetermined annually in
accordance with Regulations. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall comply with
all of the requirements of the Plan.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a)(1) The death benefit payable pursuant to
Section 6.2 shall be paid to the Participant's Beneficiary
within a reasonable time after the Participant's death by
either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's
death, by his Beneficiary) subject, however, to the rules
specified in Section 6.6(b):
(i) One lump-sum payment in cash.
(ii) Payment in monthly, quarterly,
semi-annual, or annual cash installments
over a period to be determined by the
Participant or his Beneficiary. After
periodic installments commence, the
Beneficiary shall have the right to direct
the
47
Trustee to reduce the period over which such
periodic installments shall be made, and the
Trustee shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable
pursuant to Section 6.2 is payable in installments,
then, upon the death of the Participant, the
Administrator may direct the Trustee to segregate the
death benefit into a separate account, and the
Trustee shall invest such segregated account
separately, and the funds accumulated in such account
shall be used for the payment of the installments.
(b) Notwithstanding any provision in the Plan to
the contrary, distributions upon the death of a Participant
shall be made in accordance with the following requirements
and shall otherwise comply with Code Section 401 (a)(9) and
the Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest
has begun and the Participant dies before his entire interest
has been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of
his date of death. If a Participant dies before he has begun
to receive any distributions of his interest under the Plan or
before distributions are deemed to have begun pursuant to
Regulations, then his death benefit shall be distributed to
his Beneficiaries by December 31st of the calendar year in
which the fifth anniversary of his date of death occurs.
However, the 5-year distribution requirement
of the preceding paragraph shall not apply to any portion of
the deceased Participant's interest which is payable to or for
the benefit of a designated Beneficiary. In such event, such
portion shall be distributed over a period not extending
beyond the life expectancy of such designated Beneficiary
provided such distribution begins not later than December 31st
of the calendar year immediately following the calendar year
in which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which
the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2.
If the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(c) For purposes of this Section, the life
expectancy of a Participant and a Participant's spouse shall
be redetermined annually in
48
accordance with Regulations. Life expectancy and joint and
last survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments the
distribution or series of payments may be made or begun as soon as is
practicable. However, unless a Former Participant elects in writing to defer the
receipt of benefits (such election may not result in a death benefit that is
more than incidental), the payment of benefits shall begin not later than the
60th day after the close of the Plan Year in which the latest of the following
events occurs: (a) the date on which the Participant attains the earlier of age
65 or the Normal Retirement Age specified herein; (b) the 10th anniversary of
the year in which the Participant commenced participation in the Plan; or (c)
the date the Participant terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored
unadjusted for earnings or losses.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of
59 1/2 years, the Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the Vested amount then
credited to the accounts maintained on behalf of the Participant. In the event
that the Administrator makes
49
such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411 (a)(11) and the Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted prior to the Participant
attaining age 59 1/2 except as otherwise permitted under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any Participant
in any one Plan Year up to the lesser of 100% of his Participant's
Elective Account valued as of the last Valuation Date or the amount
necessary to satisfy the immediate and heavy financial need of the
Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later,
the Valuation Date immediately preceding the date of distribution, and
the Participant's Elective Account shall be reduced accordingly.
Withdrawal under this Section is deemed to be on account of an
immediate and heavy financial need of the Participant if the withdrawal
is for:
(1) Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, his spouse, or
any of his dependents (as defined in Code Section 152) or
necessary for these persons to obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding mortgage
payments);
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition, related educational fees, and
room and board expenses for the next twelve (12) months of
post- secondary education for the Participant, his spouse,
children, or dependents; or
(5) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this
Section unless the Administrator determines, based upon all relevant
facts and circumstances that the amount to be distributed is not in
excess of the
50
amount required to relieve the financial need and that such need cannot
be satisfied from other resources reasonably available to the
Participant. For this purpose, the Participant's resources shall be
deemed to include those assets of his spouse and minor children that
are reasonably available to the Participant. The amount of the
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. A distribution may be
treated as necessary to satisfy a financial need if the Administrator
relies upon the Participant's representation that the need cannot be
relieved:
(1) Through reimbursement or compensation by insurance or
otherwise;
(2) By reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself
increase the amount of the need;
(3) By cessation of elective deferrals and voluntary
Employee contributions under the Plan; or
(4) By other distributions or loans from the Plan or any
other qualified retirement plan, or by borrowing from
commercial sources on reasonable commercial terms, to the
extent such amounts would not themselves increase the amount
of the need.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited, as of the date of distribution, to the Participant's Elective
Account as of the end of the last Plan Year ending before July 1, 1989,
plus the total Participant's Deferred Compensation after such date,
reduced by the amount of any previous distributions pursuant to this
Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411 (a)(11) and the
Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic
51
relations order," even if the affected Participant has not separated from
service and has not reached the "earliest retirement age" under the Plan. For
the purposes of this Section, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set forth under Code
Section 414(p).
6.13 DIRECT ROLLOVER
(a) 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 Administrator, to
have any portion of an eligible rollover distribution that is
equal to at least $500 paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(b) For purposes of this Section the following
definitions shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to
the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401 (a)(9); the portion
of any other distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities); any hardship
distribution described in Code Section 401
(k)(2)(B)(i)(IV); and any other distribution that is
reasonably expected to total less than $200 during a
year.
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a),
an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic
52
relations order, as defined in Code Section 414(p),
are distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the
distributee.
6.14 ELIMINATION OF LOOKBACK RULE
Notwithstanding anything in this Article to the contrary, the
"lookback rule" (the "lookback rule" provides that for purposes of determining
whether a distribution may be made without consent, if the value at the time of
a prior distribution exceeded the applicable dollar threshold (e.g., $5,000)
then the value at any subsequent time is deemed to exceed the threshold) will
not apply to any distributions made on or after October 17, 2000.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any
time to amend the Plan, subject to the limitations of this
Section. However, any amendment which affects the rights,
duties or responsibilities of the Trustee and Administrator,
other than an amendment to remove the Trustee or
Administrator, may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall
become effective as provided therein upon its execution. The
Trustee shall not be required to execute any such amendment
unless the Trust provisions contained herein are a part of the
Plan and the amendment affects the duties of the Trustee
hereunder.
(b) No amendment to the Plan shall be effective
if it authorizes or permits any part of the Trust Fund (other
than such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective to the
53
extent it eliminates or reduces any "Section 411 (d)(6)
protected benefit" or adds or modifies conditions relating to
"Section 411 (d)(6) protected benefits" the result of which is
a further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of
the later of the adoption date or effective date of the
amendment. "Section 411 (d)(6) protected benefits" are
benefits described in Code Section 411 (d)(6)(A), early
retirement benefits and retirement-type subsidies, and
optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any
time to terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or
through the purchase of irrevocable nontransferable deferred
commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in
the reduction of "Section 411 (d)(6) protected benefits" in
accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and trust only if the
benefits which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411 (d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's
discretion, make loans to Participants and Beneficiaries under
the following circumstances: (1) loans shall be made available
to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the
amount
54
made available to other Participants and Beneficiaries; (3)
loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when
added to the outstanding balance of all other loans made by
the Plan to the Participant) shall be limited to the lesser
of:
(1) $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans from the
Plan to the Participant during the one year period
ending on the day before the date on which such loan
is made, over the outstanding balance of loans from
the Plan to the Participant on the date on which such
loan was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant
under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be unreduced.
(c) Loans shall provide for level amortization
with payments to be made not less frequently than quarterly
over a period not to exceed five (5) years. However, loans
used to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is made)
as a principal residence of the Participant shall provide for
periodic repayment over a reasonable period of time that may
exceed five (5) years. For this purpose, a principal residence
has the same meaning as a principal residence under Code
Section 1034. Notwithstanding the foregoing, loans made prior
to January 1, 1987 which are used to acquire, construct,
reconstruct or substantially rehabilitate any dwelling unit
which, within a reasonable period of time is to be used
(determined at the time the loan is made) as a principal
residence of the Participant or a member of his family (within
the meaning of Code Section 267(c)(4)) may provide for
periodic repayment over a reasonable period of time that may
exceed five (5) years. Additionally, loans made prior to
January 1,1987, may provide for periodic payments which are
made less frequently than quarterly and which do not
necessarily result in level amortization. Loan repayments will
be suspended under this Plan as permitted under Code Section
414(u)(4).
55
(d) Any loans granted or renewed on or after the
last day of the first Plan Year beginning after December 31,
1988 shall be made pursuant to a Participant loan program.
Such loan program shall be established in writing and must
include, but need not be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan
program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and
amounts of loans offered;
(5) the procedure under the program for
determining a reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the
steps that will be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby
incorporated by reference and made a part of the Plan.
Furthermore, such Participant loan program may be modified or
amended in writing from time to time without the necessity of
amending this Section.
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
56
8.2 ALIENATION
(a) Subject to the exceptions provided below, no
benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of
any such person, nor shall it be subject to attachment or
legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as may
be required by law.
(b) This provision shall not apply to the extent
a Participant or Beneficiary is indebted to the Plan, as a
result of a loan from the Plan. At the time a distribution is
to be made to or for a Participant's or Beneficiary's benefit,
such proportion of the amount distributed as shall equal such
loan indebtedness shall be paid by the Trustee to the Trustee
or the Administrator, at the direction of the Administrator,
to apply against or discharge such loan indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must
be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or
Beneficiary does not agree that the loan indebtedness is a
valid claim against his Vested Participant's Combined Account,
he shall be entitled to a review of the validity of the claim
in accordance with procedures provided in Sections 2.7 and
2.8.
(c) This provision shall not apply to a
"qualified domestic relations order" defined in Code Section
414(p), and those other domestic relations orders permitted to
be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order,"
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
8.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of New York, other than its laws respecting choice of
law, to the extent not preempted by the Act.
57
8.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
8.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any trust fund
maintained pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Retired Participants,
or their Beneficiaries.
(b) In the event the Employer shall make an
excessive contribution under a mistake of fact pursuant to Act
Section 403(c)(2)(A), the Employer may demand repayment of
such excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions
may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
8.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their
58
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor
their successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
8.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal aspects
of this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
8.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
8.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
59
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator and (3) the Trustee. The named Fiduciaries shall have only
those specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan or as accepted by or assigned to them
pursuant to any procedure provided under the Plan, including but not limited to
any agreement allocating or delegating their responsibilities, the terms of
which are incorporated herein by reference. In general, unless otherwise
indicated herein or pursuant to such agreements, the Employer shall have the
duties specified in Article II hereof, as the same may be allocated or delegated
thereunder, including but not limited to the responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the responsibility for the administration of
the Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Administrator
shall act as the named Fiduciary responsible for communicating with the
Participant according to the Participant Direction Procedures. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
8.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
8.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the
contrary,
60
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to
the Employer within one year after such determination,
provided the application for the determination is made by the
time prescribed by law for filing the Employer's return for
the taxable year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the
contrary, except Sections 3.5 and 3.6, any contribution by the
Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the disallowance
of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
8.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE IX
PARTICIPATING EMPLOYERS
9.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any other corporation or entity, whether an
affiliate or subsidiary or not, may adopt this Plan and all of the provisions
hereof, and participate herein and be known as a Participating Employer, by a
properly executed document evidencing said intent and will of such Participating
Employer.
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required
to, commingle, hold and invest as one Trust Fund all
contributions made by Participating Employers, as well as all
increments thereof. However, the assets of the Plan shall, on
an ongoing basis, be available to pay
61
benefits to all Participants and Beneficiaries under the Plan
without regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to
an Employer participating in this Plan, whether he be an
Employee of the Employer or a Participating Employer, shall
not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as
well as his accumulated service time with the transfer or
predecessor, and his length of participation in the Plan,
shall continue to his credit.
(d) All rights and values forfeited by
termination of employment shall inure only to the benefit of
the Participants of the Employer or Participating Employer by
which the forfeiting Participant was employed, except if the
Forfeiture is for an Employee whose Employer is an Affiliated
Employer, then said Forfeiture shall inure to the benefit of
the Participants of those Employers who are Affiliated
Employers. Should an Employee of one ("First") Employer be
transferred to an associated ("Second") Employer which is an
Affiliated Employer, such transfer shall not cause his account
balance (generated while an Employee of "First" Employer) in
any manner, or by any amount to be forfeited. Such Employee's
Participant Combined Account balance for all purposes of the
Plan, including length of service, shall be considered as
though he had always been employed by the "Second" Employer
and as such had received contributions, forfeitures, earnings
or losses, and appreciation or depreciation in value of assets
totaling the amount so transferred.
(e) Any expenses of the Trust which are to be
paid by the Employer or borne by the Trust Fund shall be paid
by each Participating Employer in the same proportion that the
total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the
credit of all Participants.
9.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
9.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
62
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
9.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year
shall be allocated only among those Participants of the Employer or
Participating Employer making the contribution, except if the contribution is
made by an Affiliated Employer, in which event such contribution shall be
allocated among all Participants of all Participating Employers who are
Affiliated Employers in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Employer shall immediately notify the Trustee
thereof.
9.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the Trustee
where such consent is necessary in accordance with the terms of this Plan.
9.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. At the time of any such discontinuance
or revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that
no such transfer shall be made if the result is the elimination or reduction of
any "Section 411 (d)(6) protected benefits" in accordance with Section 7.1(c).
If no successor is designated, the Trustee shall retain such assets for the
Employees of said Participating Employer pursuant to the provisions of the
Trust. In no such event shall any part of the corpus or income of the Trust as
it relates to such Participating Employer be used for or diverted to purposes
other than for the exclusive benefit of the Employees of such Participating
Employer.
63
9.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
9.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part
from making a contribution to the Trust Fund which it would otherwise have made
under the Plan by reason of having no current or accumulated earnings or
profits, or because such earnings or profits are less than the contribution
which it would otherwise have made, then, pursuant to Code Section 404(a)(3)(B),
so much of the contribution which such Participating Employer was so prevented
from making may be made, for the benefit of the participating employees of such
Participating Employer, by the other Participating Employers who are members of
the same affiliated group within the meaning of Code Section 1504 to the extent
of their current or accumulated earnings or profits, except that such
contribution by each such other Participating Employer shall be limited to the
proportion of its total current and accumulated earnings or profits remaining
after adjustment for its contribution to the Plan made without regard to this
paragraph which the total prevented contribution bears to the total current and
accumulated earnings or profits of all the Participating Employers remaining
after adjustment for all contributions made to the Plan without regard to this
paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not reimburse the contributing
Participating Employers.
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IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered
in the presence of:
Central Hudson Gas & Electric
Corporation
By /s/ STEVEN V. LANT
--------------------------
EMPLOYER
/s/ THOMAS C. BROCKS
- -------------------------------
WITNESS AS TO EMPLOYER
ATTEST /s/ GLADYS L.COOPER
----------------------
Secretary
67