EXHIBIT 10.1
BIOMED REALTY
401(K) RETIREMENT SAVINGS PLAN
BIOMED REALTY, L.P. (the "Employer") has adopted this Profit Sharing and
Retirement Savings Plan to allow its Employees who are eligible to participate
in the Plan to share in the growth of the Employer in accordance with the terms
and conditions set forth below, in order to (i) promote in the Employees an
interest in the successful operation of the Employer's business and in the
increased efficiency of their work; (ii) provide the participating Employees
with benefits upon their retirement; and (iii) provide their Beneficiaries with
death benefits.
This Plan and Trust are intended to meet the requirements of Section
404(c) of ERISA and its regulations.
PLAN SPECIFICATIONS
A. Name.
This Profit Sharing and Retirement Savings Plan shall be known as
the "BIOMED REALTY 401(K) RETIREMENT SAVINGS PLAN."
B. Exclusive Benefit.
This Plan shall be maintained for the exclusive benefit of the
Participants and their Beneficiaries and is intended to qualify as a defined
contribution plan under the appropriate provisions of ERISA and the Code.
C. Effective Date.
"Effective Date" means January 1, 2005. For purposes of Safe Harbor
Matching Contributions, the Effective Date means January 1, 2006.
D. Plan Year.
"Plan Year" means each 12 consecutive month period ending on
December 31.
E. Limitation Year.
"Limitation Year" means each 12 consecutive month period ending on
the last day of the Plan Year.
ARTICLE I
ELIGIBILITY AND PARTICIPATION
F. Eligible Employee.
"Eligible Employee" means, with respect to any Plan Year, every
Employee of the Employer who meets the following requirements:
1. Minimum Age:
He or she has attained age 21.
2. Service:
He or she has completed three (3) consecutive months of
service.
Provided, however, that if an Employee is employed on the
Effective Date, he or she shall become an Eligible Employee regardless of the
Minimum Age requirement and Service requirement stated above.
3. Years of Service - Break-in-Service.
The Hour of Service requirement of Paragraphs A.8 and A.95 of
Article II shall not be modified.
This Plan shall not use the elapsed time method for crediting
Years of Service for eligibility purposes.
4. Service with the Predecessor Employer or Predecessor Plan.
Service with a Predecessor Employer is not applicable.
5. Subsequent Eligibility Computation Period.
"Subsequent Eligibility Computation Period" means the Plan
Year including the first anniversary of the Employee's Employment Commencement
Date and any subsequent Plan Year.
ARTICLE I 2
6. Class Exclusions.
Notwithstanding the above, any Employee who is a member of any
of the following class(es) is specifically excluded from participation under the
Plan:
His or her compensation and conditions of employment are
established by the terms of a collective bargaining agreement where retirement
benefits are bargained for in good faith between the Employer and such
Employee's lawful representative or bargaining agent; provided, however, that
any otherwise Eligible Employee whose compensation and conditions of employment
are established by the terms of a collective bargaining agreement shall be an
Eligible Employee if his or her coverage under this Plan is specifically
provided for under such collective bargaining agreement.
He or she is a non-resident alien who receives no earned
income from the Employer which constitutes income from sources within the United
States.
An individual shall be excluded from participation if he or
she is not reported on the payroll records of the Employer as a common law
employee even if a court or administrative agency subsequently determines that
such individuals are common law employees and not independent contractors.
G. Entry Date.
"Entry Date" means the first day of each Month coincident with
or next following the date he or she becomes an Eligible Employee.
CONTRIBUTIONS
H. Type of Employer Contributions.
1. Nonelective Employer Contributions.For each Plan Year, the
Employer may make contributions to the Trust in one (1) or more installments
without regard to its Net Profits for such year in such amounts as the Board may
determine in its sole discretion.
2. Elective Contributions With Safe Harbor Provisions. The safe
harbor provisions of this Plan shall apply. Each Participant may elect, by
completing the appropriate forms acceptable to the Committee, to reduce and
defer the receipt of up to twenty-five percent (25%) of his or her Compensation.
In no event shall any Participant be permitted to make Elective Contributions in
excess of the limitation on Elective Deferrals described in Paragraph H of
Article IV. The Employer shall contribute the amount so deferred subject to the
limitations described in Articles IV and V, to the Plan.
ARTICLE I 3
3. Qualified Nonelective Employer Contributions. The Employer may
make Qualified Nonelective Employer Contributions. The Employer shall contribute
on behalf of all eligible Non-Highly Compensated Participants eligible for an
allocation, a contribution equal to the amount, if any, as necessary to satisfy
the Actual Deferral Percentage limitation and/or Contribution Percentage
limitation. Such contribution shall be allocated first to the lowest paid
Non-Highly Compensated Participant up to 25% of Section 415 Compensation, then
to the next lowest paid Non-Highly Compensated Participant until the Actual
Deferral Percentage limitation and/or Contribution Percentage limitation is
satisfied.
4. Matching Contributions. The Employer may make Matching
Contributions. The Employer may designate, by resolution of its Board, that
portion of its contributions made to the Trust for such Plan Year as a
contribution to match each Participant's Elective Contribution.
5. Qualified Matching Contributions. The Employer may make
Qualified Matching Contributions. The Employer shall designate by resolution of
its Board, that portion of its contributions made to the Trust for such Plan
Year as a Qualified Matching Contribution.
6. Safe Harbor Matching Contributions.
Safe Harbor Basic Matching Formula
(a) Subject to the notice requirements of Section
401(K)(12)(D) of the Code, the Employer shall contribute a Safe Harbor Matching
Contribution equal to one dollar ($1.00) for each dollar that each Participant
has elected to defer up to three percent (3%) of Compensation. The Employer
shall contribute an additional fifty cents ($.50) for each dollar that each
Participant has elected to defer in excess of three percent (3%) of Compensation
not to exceed five percent (5%) of Compensation. Safe Harbor Matching
Contributions shall be made separately for each payroll period.
(b) Safe Harbor Matching Contributions under the above Basic
Formula shall be used to satisfy both the Actual Deferral Percentage limitation
and the Contribution Percentage limitation.
7. Safe Harbor Nonelective Employer Contributions. The Employer
shall not make Safe Harbor Nonelective Employer Contributions.
8. Simple 401(K) Contributions. The Employer shall not make
Simple 401(K) Contributions.
I. Reserved.
ARTICLE I 4
J. Required Minimum Benefits.
1. The top-heavy minimum benefit shall be the lesser of three
percent (3%) or the highest percentage allocated to any Key Employee of Section
415 Compensation.
If a Non-Key Employee participates in this Plan and another plan of
the Employer included in a Top-heavy Group, this Plan shall provide the
top-heavy minimum benefits.
2. Key Employees shall be entitled to top-heavy minimum benefits
under this Plan.
K. Compensation.
"Compensation" means Section 415 Compensation, not to exceed the
Compensation Limitation, paid by the Employer to an Employee during a Plan Year,
excluding all Employee expenses, reimbursements and other fringe benefit
allowances paid during the Plan Year which are subject to withholding of income
tax under Section 3401(a) of the Code, and further modified by the following:
Modifications of Compensation
Excluding Compensation paid prior to a Participant's Entry Date.
Including wages which are not currently includable in the
Participant's gross income by reason of the application of Sections 125,
402(e)(3), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i) and 457 of the Code.
If the Plan fails the Actual Deferral Percentage limitation or the
Contribution Percentage limitation by reason of including or excluding deferrals
in the definition of Compensation, the Actual Deferral Percentage limitation or
Contribution Percentage limitation shall again be tested after excluding such
deferrals. If the Plan still fails the Actual Deferral Percentage limitation or
the Contribution Percentage limitation, the correction procedures pursuant to
the Plan shall be utilized based on the method that least fails the Actual
Deferral Percentage limitation or Contribution Percentage limitation.
ARTICLE I 5
L. Highly Compensated Employees and Current or Prior Testing Methods.
For purposes of identifying Highly Compensated Employees, the
Employer has elected the following:
1. For Plan Years beginning after December 31, 1996, a Highly
Compensated Employee shall be determined based upon the Look-Back Year.
2. For Plan Years beginning after December 31, 1996, a Highly
Compensated Employee need not be a member of the Top-Paid Group.
3. For Plan Years beginning after December 31, 1996, the
determination of the Actual Deferral Percentage and the Average Contribution
Percentage, if applicable, for the group of Eligible Participants who are
Non-Highly Compensated Employees shall be based upon the current Plan Year data.
ALLOCATIONS TO CONTRIBUTION ACCOUNTS
M. Allocation of Employer Contributions. Subject to the provisions of
Article IV, V and X:
1. Qualified Nonelective Employer Contributions.
Each Eligible Participant shall receive an allocation of
Qualified Nonelective Employer Contributions as provided in Paragraph H of this
Article I.
2. Matching Contributions.
Matching Contributions for each Plan Year shall be allocated
to the Matching Contribution Accounts in the proportion that each Participant's
Elective Contributions made during the Plan Year bears to all Participants'
Elective Contributions made during the Plan Year.
3. Qualified Matching Contributions.
Qualified Matching Contributions shall be allocated to all
Non-Highly Compensated Employees who have elected to defer, a contribution equal
to the amount, if any, needed to satisfy the Actual Deferral Percentage
limitation.
4. Nonelective Employer Contributions.
Nonelective Employer Contributions for each Plan Year shall be
allocated to the Nonelective Employer Contribution Accounts of each Participant
eligible for an allocation in the proportion that each such Participant's
Compensation bears to the Compensation of all such Participants for the Plan
Year.
ARTICLE I 6
5. Safe Harbor Matching Contributions.
Safe Harbor Matching Contributions shall be made and allocated
in accordance with Paragraph H of this Article I.
6. Safe Harbor Nonelective Employer Contributions.
Not Applicable.
7. Simple 401(K) Contributions.
Not Applicable.
N. Excess Compensation.
Not Applicable.
O. Participant Forfeitures.
Not Applicable.
P. Allocation Requirements - Last Day Employment and Service
Requirements.
1. Last Day Employment and Hours of Service Required. Allocations
of Nonelective Employer Contributions and Matching Contributions and unallocated
forfeitures, if applicable, shall be made only to the appropriate Accounts of
those persons who are Participants, who have completed 1000 Hours of Service
during the Plan Year, and who are in the employ of the Employer on the last day
of the Plan Year.
If a Plan Year is less than 12 months, the required number of hours
shall be redetermined by multiplying 1000 Hours of Service by the product of
one-twelfth (1/12) and the number of months in such Short Plan Year.
If the allocation requirements of this paragraph result in an
allocation that does not satisfy the coverage requirements of Section
410(b)(1)(B) of the Code in any Plan Year then additional Nonelective Employer
Contributions shall be made no later than the due date of the Employer's tax
return and shall be allocated retroactive to the last day of that Plan Year to
otherwise eligible Participants to the extent necessary to satisfy coverage
requirements of Section 410(b)(1)(B) of the Code. In determining the extent to
which such allocations to such Participants are necessary, allocations shall
first be made to the Participants who have less than 1,000 Hours of Service
beginning with the Participant with the smallest Compensation and allocations
shall continue to be made to such Participants with increasing Compensation
until the coverage requirements of the ratio percentage test of Section
410(b)(1)(B) of the Code are satisfied. If, after such allocation, the coverage
requirements of the Code are still not
ARTICLE I 7
satisfied, then Participants who have terminated service with more than 500
Hours of Service during the Plan Year shall also be included in the allocation
pursuant to this provision to the extent necessary to satisfy the coverage
requirements of the Code. In determining the extent to which such allocations to
terminated Participants are necessary, allocations shall first be made to the
terminated Participant with the smallest Compensation and allocations shall
continue to be made to terminated Participants with increasing Compensation
until the coverage requirements of the Code are satisfied. Terminated
Participants must have been credited with more than 500 Hours of Service prior
to termination to be eligible for an allocation pursuant to this provision.
2. Retirement, Death, and Disability. The last day of employment
and minimum Hours of Service requirements of this Paragraph P shall not apply to
a Participant who terminates employment during the Plan Year by reason of
retirement at or after Normal Retirement Age or death or Total Disability.
3. Last Day Employment and Service - Not Required. Allocations of
Elective Contributions, Qualified Matching Contributions and Qualified
Nonelective Employer Contributions shall be made to the appropriate Accounts of
Eligible Participants during the Plan Year.
Q. Allocation of Excess Annual Additions.
If an allocation to a Participant would result in an excess Annual
Addition, such excess Annual Addition shall be held in a suspense account and
applied to reduce Employer contributions for the next succeeding Limitation
Year.
R. Adjustment to the Rule of 1.0.
If an adjustment under Section 415(e) of the Code is necessary to
prevent the sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction from exceeding 1.0 for a Limitation Year, the Annual
Additions in the defined contribution plan shall be reduced first. If the
Employer maintains more than one (1) defined benefit pension plan or defined
contribution plan, this Plan shall be reduced first.
For Limitation Years beginning after December 31, 1999, the
preceding paragraph shall no longer apply.
S. Employee After-Tax Contributions.
Employee After-Tax Contributions are not allowed.
T. Rollover Contributions and Transferred Benefits.
Rollover Contributions are allowed.
Transferred Benefits are allowed.
ARTICLE I 8
U. Normal Retirement Age.
"Normal Retirement Age" means the Participants 65th birthday. A
Participant who continues in the employ of the Employer after he or she attains
Normal Retirement Age shall remain a Participant while so employed, and be
entitled to all Plan benefits to the extent he or she would be entitled thereto
if he or she had not yet attained Normal Retirement Age, including allocation of
any type of Employer contribution and forfeiture, if any.
VESTING
V. Vesting.
A Participant shall be fully vested in his or her Elective
Contribution, Qualified Matching Contribution, Nonelective Employer
Contribution, Matching Contribution, Qualified Nonelective Employer Contribution
and Transferred Benefits Accounts at all times.
W. Required Top-Heavy Minimum Vesting.
If the Plan is a Top-heavy Plan, the 6-year graded vesting schedule
set forth in Paragraph D.2 of Article VIII shall replace the vesting schedule
adopted in this Article I, unless the vesting schedule set forth in Paragraph V
of this Article I provides for a faster rate of vesting during any relevant
year.
X. Years of Vesting Service.
"Years of Vesting Service" means all of an Employee's Year of
Service subject to the provisions of Article VI.
Y. Years of Service -- Break-in-Service.
The Hour of Service requirement of Paragraph A.8 and Paragraph A.95
of Article II shall not be modified.
This Plan shall not use the elapsed time method for crediting Years
of Service for vesting purposes.
Z. Vesting at Death or Total Disability.
A Participant shall become fully vested at death. A Participant
shall become fully vested at Total Disability.
ARTICLE I 9
DISTRIBUTION OF BENEFITS
AA. Participant Loans.
Loans to Participants are available. The $50,000 limit and 50% limit
under Paragraph H of Article VII shall apply.
BB. Hardship Withdrawals.
Hardship withdrawals of Elective Contributions shall be allowed. For
these purposes, an "event of hardship" means:
Payment of medical expenses described in Section 213(d) of the Code
which are incurred by the Employee, the Employee's Spouse, or any dependents of
the Employee as defined in Section 152(d) of the Code or necessary for these
persons to obtain medical care as described in Section 213(d) of the Code.
Purchase of a principal residence, but not including mortgage
payments, by the Employee.
Payment of tuition, room and board, and related educational fees for
the next 12 months of post-secondary education for the Employee, the Employee's
Spouse, children or dependents.
The need to prevent eviction of the Employee from his or her
principal residence or foreclosure on the mortgage of the Employee's principal
residence.
Funeral expenses for the death of a Family Member of the Employee.
CC. In-Service Distributions Other Than Hardship.
In-service distributions of a Participant's Nonelective Employer
Contribution Account and Matching Contribution Account shall be allowed, after
two (2) years of Participation, at age 59 1/2, or later.
In-service distributions of a Participant's Elective Contribution
Account, Qualified Matching Contribution Account and Qualified Nonelective
Employer Contribution Account shall be allowed at age 59 1/2 or later.
In-service distributions of a Participant's Rollover Contribution
Account shall be allowed at any time.
ARTICLE I 10
DD. Cash-Out Options.
1. Effective For Plan Years beginning after August 5, 1997, the
$3,500 involuntary cash-out distribution limit shall be increased to $5,000.
2. An immediate forfeiture of a partial cash-out as provided in
Paragraph B.4 of Article VI shall apply.
3. If a Participant is rehired prior to five (5) consecutive
one-year Breaks-in-Service, he or she shall be required to repay the Plan the
amounts previously distributed to the Participant for the Participant's
non-vested Accrued Benefits to be restored.
4. The alternative separate account formula X=P(AB + (R+D)) -
(RxD) as stated in Paragraph C of Article VI shall apply.
EE. Time of Distribution Upon Employment Termination.
Distributions of vested Accounts to Participants upon employment
termination prior to Normal Retirement Age shall be made as soon as
administratively feasible after employment termination date.
FF. Right to Defer Receipt of Benefits After Normal Retirement Age and
Age 70 1/2.
1. Upon separation from service, a Participant shall have the
right to defer receipt of benefits after Normal Retirement Age or age 62, if
later.
2. The required beginning date for minimum required distributions
for a non-5%-Owner is the April 1 of the calendar year following the later of
the calendar year in which such Participant attains age 70 1/2 or the calendar
year in which such Participant retires.
(a) Effective January 1, 2005, any Participant other than a
5%-Owner, who has attained age 70 1/2 and is currently receiving minimum
required distributions, and who is still employed by the Employer, may elect to
stop receiving minimum required distributions until April 1 of the calendar year
following retirement. A new Annuity Starting Date shall occur upon
recommencement of distribution.
(b) Effective January 1, 2005, any non-5%-Owner who attains
age 70 1/2, is not currently required to receive minimum required distributions,
and who is still employed by the Employer may elect to defer receiving minimum
required distributions until the calendar year following retirement. Such
election must be made by the April 1 of the calendar year following the calendar
year in which the Participant attained age 70 1/2.
ARTICLE I 11
GG. Accrued Benefits Not Subject to REACT Annuity Requirements.
Participants' Accrued Benefits other than Transferred Benefits shall
not be subject to the Qualified Joint and Survivor Annuity and Qualified
Preretirement Survivor Annuity requirements of REACT as provided in Paragraphs
A, B and C of Article VII. The survivor portion of the Qualified Joint and
Survivor Annuity in regard to the Participant's Transferred Benefits shall equal
50%. The Qualified Preretirement Survivor Annuity in regard to the Participant's
Transferred Benefits shall equal 50% of the actuarial equivalent of the sum of
the Participant's Transferred Benefits and any other death benefits attributable
to such Transferred Benefits. The one-year marriage requirement shall apply to a
surviving spouse in regard to the preretirement death benefit or the Qualified
Preretirement Survivor Annuity, if applicable.
HH. Alternate Forms of Benefits Payments.
The following alternate forms of benefit payment are available:
Single Sum. The payment of all or a portion of the
Participant's vested Accrued Benefit in a single sum in cash or in kind.
II. Reserved.
JJ. Total Disability.
"Total Disability" shall have the same meaning as defined in
Article II.
MISCELLANEOUS
KK. Participant Directed Accounts.
Each Participant shall be entitled to direct the investment of his
or her Accrued Benefits in accordance with Article XII.
LL. Valuation Date.
"Valuation Date" means the Anniversary Date and any other date that
the Committee designates.
MM. Look-Back Year.
"Look-Back Year" means, for Plan Years beginning after December 31,
1996, the 12-month period immediately preceding any relevant Plan Year.
ARTICLE I 12
NN. Co-Trustees.
If there is more than one (1) Trustee, any one of such Trustees
shall have the right to make any decision, undertake any action or execute any
documents affecting this Trust without the approval of the remaining Trustees.
Any directions to any person or organization shall be executed by any one of the
co-Trustees. For purposes of this Plan and Trust, "directions" shall mean any
certification, notice, authorization, application or instruction of the Trustee.
OO. Correction of Multiple Use.
If a multiple use of the alternative limitations occurs with respect
to this Plan or with respect to this Plan and one or more other plans or
arrangements maintained by the Employer:
1. Reduction shall be made to all Highly Compensated Employees in
order to prevent such multiple use.
2. The Actual Deferral Percentage shall be reduced.
PP. Model Amendments.
1. Paragraph K of Article I is modified to add the following:
For Plan Years beginning on and after January 1, 2001,
Compensation shall include elective amounts that are not includible in the gross
income of the Employee under Section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b)
of the Code.
2. Paragraph A.53 of Article II is modified to add the following:
For Plan Years beginning on and after January 1, 2001, the
definition of Section 415 Compensation for purposes of this Plan shall also
include elective amounts that are not includible in the gross income of the
Employee by reason of Section 132(f)(4) of the Code. This modification shall
also apply to the definition of compensation for purposes of Paragraphs A.23 and
A.30 of Article II and Paragraphs A.2 and E of Article VIII.
3. Paragraph E.1 of Article V is modified to add the following
subparagraph (c):
(c) For Limitation Years beginning on and after January 1,
2001, for purposes of applying the limitations described in this Paragraph E,
Section 415 Compensation paid or made available during such Limitation Years
shall include elective amounts that are not includible in the gross income of
the Employee by reason of Section 132(f)(4) of the Code.
ARTICLE I 13
4. Paragraph B.9 of Article VII is modified to add the following
paragraph:
With respect to distributions under the Plan made for calendar
years beginning on and after January 1,
2002, the Plan will apply the minimum distribution requirements of Section
401(a)(9) of the Code in accordance with the regulations under Section 401(a)(9)
of the Code that were proposed on January 17, 2001, notwithstanding any
provision of the Plan to the contrary. This paragraph shall continue in effect
until the end of the last calendar year beginning before the effective date of
final regulations under Section 401(a)(9) of the Code or such other date as may
be specified in guidance published by the Internal Revenue Service.
CONTINUED ON NEXT PAGE
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ARTICLE I 14
II. DEFINITIONS
A. Terms Defined In This Article II. As used in this Plan, the
following terms have the following meanings.
1. "Account(s)" means, where applicable, a Participant's
Nonelective Employer Contribution Account, Elective Contribution Account,
Employee After-Tax Contribution Account, Qualified Nonelective Employer
Contribution Account, Matching Contribution Account, Qualified Matching
Contribution Account, Rollover Contribution Account, Safe Harbor Matching
Contribution Account, Safe Harbor Nonelective Employer Contribution Account,
Simple 401(k) Account and/or Transferred Benefits Account.
2. "Accrued Benefit" means, where applicable at any date, the
value of a Participant's Accounts.
3. "Actual Deferral Percentage" means with respect to (i) the
group of Highly Compensated Employees who are Eligible Participants; and (ii)
the group of all other Eligible Participants, the average of the actual deferral
ratios of each group, calculated separately for each Eligible Participant in
each group, of the amount of the Qualifying Section 401(k) Contributions made on
behalf of each Eligible Participant for the Plan Year divided by the Eligible
Participant's Compensation for the Plan Year. The actual deferral ratio of an
Eligible Participant who did not make or receive any Qualifying Section 401(k)
Contribution is zero (0).
For Plan Years beginning after December 31, 1988, the actual
deferral ratio for each Eligible Participant shall be calculated to the nearest
one-hundredth (.01) of one percent (1%). Unless otherwise elected in Paragraph K
of Article I, Compensation includes Compensation received for the entire Plan
Year regardless of whether the Eligible Participant was a Participant for the
entire Plan Year.
A Highly Compensated Employee who is either a 5%-Owner or one
(1) of the 10 most Highly Compensated Employees shall have his or her actual
deferral ratio aggregated with other eligible Family Members to form one (1)
actual deferral ratio as if there was one (1) Highly Compensated Employee. The
combined actual deferral ratio shall be determined by combining the Qualifying
Section 401(k) Contributions and Compensation of all eligible Family Members.
Except as provided in the preceding sentence, Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as separate Employees in
determining the Actual Deferral Percentage for Participants who are Non-Highly
Compensated Employees and for Participants who are Highly Compensated Employees.
ARTICLE II 17
If an Employee is required to be aggregated as a member of
more than one (1) family group in a plan, all Eligible Participants who are
members of the family groups that include such Employee are aggregated as one
(1) family group in accordance with the preceding paragraph.
For Plan Years beginning after December 31, 1996, the
preceding two (2) paragraphs shall no longer apply.
4. "Anniversary Date" means the last day of the Plan Year.
5. "Annual Addition" means the amounts allocated to a
Participant's Accounts during any relevant Limitation Year that constitute:
(a) Employer contributions;
(b) Employee contributions;
(c) Forfeitures;
(d) Excess Contributions and Excess Aggregate Contributions
are Annual Additions whether or not corrected by distribution or
recharacterization. Furthermore, Excess Deferrals are Annual Additions;
provided, however, that Excess Deferrals which are distributed in accordance
with Section 1.402(1)-1(e)(2) or (3) of the Treasury Regulations are not Annual
Additions. Additionally, Elective Deferrals which are returned pursuant to
Section 415 of the Code are not Annual Additions and are disregarded for
purposes of Sections 401(k), 401(m)(2) and 402(g) of the Code;
(e) Amounts allocated after March 31, 1984, to an individual
medical account, as described in Section 415(l)(2) of the Code, which is part of
a pension or annuity plan maintained by the Employer;
(f) 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 separate accounts
of a Key Employee, as defined in Section 419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e) of the Code, maintained by the
Employer; and
(g) Amounts allocated under a simplified employee pension
plan pursuant to Section 408(k) of the Code.
Notwithstanding the above, Employee After-Tax Contributions
not in excess of the greater of (i) six percent (6%) of Section 415 Compensation
or (ii) one-half (1/2) of the Employee After-Tax Contributions shall not be
considered as
ARTICLE II 18
Annual Additions for any Limitation Year beginning before January 1, 1987.
Furthermore, Employer contributions or prior forfeited amounts which are used to
restore the non-vested portion of a Participant's Accrued Benefit that was
previously cashed-out and forfeited shall not be considered an Annual Addition.
6. "Average Contribution Percentage" means with respect to (i)
the group of Highly Compensated Employees who are Eligible Participants; and
(ii) the group of all other Eligible Participants, the average of the
contribution ratios of each group, calculated separately for each Eligible
Participant in each group, of the amount of Qualifying Section 401(m)
Contributions made on behalf of each Eligible Participant for the Plan Year
divided by the Eligible Participant's Compensation. For Plan Years beginning
after December 31, 1988, the Average Contribution Percentage shall be calculated
to the nearest one-hundredth (.01) of one percent (1%). The determination of
Compensation for an Eligible Participant during the Plan Year shall be made in
the same manner as for the Actual Deferral Percentage limitation.
A Highly Compensated Employee who is either a 5%-Owner or one
(1) of the 10 most Highly Compensated Employees shall have his or her
Contribution Percentage aggregated with other eligible Family Members to form
one (1) Contribution Percentage as if there was one (1) Highly Compensated
Employee. The combined Contribution Percentage shall be determined by combining
the Qualifying Section 401(m) Contribution and Compensation of all eligible
Family Members. Except as provided in the preceding sentence, Family Members,
with respect to such Highly Compensated Employees, shall be disregarded as
separate Employees in determining the Average Contribution Percentage for
Participants who are Non-Highly Compensated Employees and for Participants who
are Highly Compensated Employees.
If an Employee is required to be aggregated as a member of
more than one (1) family group in a plan, all Eligible Participants who are
members of the family groups that include such Employee are aggregated as one
(1) family group in accordance with the preceding paragraph.
For Plan Years beginning after December 31, 1996, the
preceding two (2) paragraphs shall no longer apply.
7. "Board" means the Board of Directors of the Employer, if a
corporation. If such corporation is later dissolved, Board continues to mean
such Board of Directors of the Employer if empowered to continue to act as a
board in settling the affairs of the dissolved corporation under local law. If
no such power exists, then in the case of a corporation that is dissolved, Board
means the Trustee of the Trust, until such time as a new employer adopts and
sponsors the Plan or until all assets are distributed. If the Employer is not a
corporation, Board means the managing partner(s) of a partnership, the manager
of a limited liability company, the trustee(s) of a trust, the sole
ARTICLE II 19
proprietor of an unincorporated business or the elected or designated
representative(s) of an unincorporated association.
8. "Break-in-Service" means that an Employee did not complete
more than 500 Hours of Service, or such lesser amount if elected in Article I,
in the applicable Computation Period. For purposes of determining whether a
Break-in-Service has occurred in a Computation Period, an Employee who is
granted a Maternity or Paternity Leave of Absence shall receive credit for eight
(8) Hours of Service per day of such absence. To the extent provided in
Paragraph A.46 of this Article II and Paragraph B of Article III, Leaves of
Absence shall not cause a Break-in-Service. Unless otherwise elected in Article
I, if the Plan Year is less than 12 months, no Break-in-Service shall occur in
such Plan Year. For purposes of the elapsed time method, Break-in-Service means
a "One-Year Period of Severance."
9. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
10. "Committee" means the administrative committee appointed by
the Sponsoring Employer's Board.
11. "Compensation Limitation" means the limitation imposed by
Section 401(a)(17) of the Code, as described below.
(a) For Plan Years beginning after December 31, 1988 and
before January 1, 1994, Compensation shall not exceed $200,000 as adjusted after
1989 by the Secretary of the Treasury at the same time and in the same manner as
adjusted under Section 415(d) of the Code, except that such adjustment for a
calendar year shall take effect on the first day of the Plan Year beginning in
such calendar year.
(b) For Plan Years beginning on and after January 1, 1994,
the annual Compensation of each Employee taken into account under the Plan shall
not exceed $150,000. The $150,000 Compensation Limitation shall be adjusted by
the Secretary annually at the same time and in the same manner as adjusted under
Section 415(d) of the Code; except that the base period shall be the calendar
quarter beginning October 1, 1993, and any increase which is not a multiple of
$10,000 shall be rounded to the next lowest multiple of $10,000. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which Compensation is determined (determination
period) beginning in such calendar year.
If a determination period is less than 12 months, the
Compensation Limitation described in the preceding subparagraphs (a) and (b)
above will by multiplied
ARTICLE II 20
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
12. "Contribution Percentage" means the ratio (expressed as a
percentage) of the Qualifying Section 401(m) contributions under the Plan on
behalf of the Eligible Participant for the Plan Year to the Eligible
Participant's Compensation for the Plan Year.
13. "Controlled Group" means the Employer and all members of its
controlled or affiliated group of trades or businesses whether or not
incorporated (including an affiliated service group) as defined in Section
414(b), (c), (m) or (o) of the Code. For Plan Years beginning before January 1,
1997, if the Employer is an Unincorporated Entity, then Controlled Group shall
be as defined in Section 401(d)(1) of the Code; provided, however, that any
member of a Controlled Group shall be disregarded for all purposes under the
Plan for any period when such member was not a member of the Controlled Group
unless expressly provided to the contrary herein.
14. "Defined Benefit Dollar Limitation" means $90,000, as adjusted
each January 1 by Section 415(d) of the Code for years beginning after December
31, 1987.
15. "Defined Benefit Plan Fraction" means a fraction, the
numerator of which is the projected annual benefit of a Participant under the
Plan and any other defined benefit plan maintained by the Employer or its
Controlled Group, whether or not terminated, and the denominator of which is the
lesser of:
(a) 1.25 multiplied by the Defined Benefit Dollar Limitation
in effect for such Limitation Year; or
(b) 1.4 multiplied by the Participant's average Section 415
Compensation for his or her highest three (3) consecutive years including such
Limitation Year, determined under Section 415(b)(1)(B) of the Code.
Notwithstanding the above, if an Employee was a Participant as
of the first day of the first Limitation Year beginning after December 31, 1986,
in one (1) or more defined benefit plans maintained by the Employer which were
in existence on May 6, 1986, the denominator of the Defined Benefit Plan
Fraction will not be less than 125% of the sum of the annual benefits of such
Plans which the Participant had accrued as of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfy the
requirements of Section 415 of the Code for all Limitation Years beginning
before January 1, 1987.
ARTICLE II 21
16. "Defined Contribution Dollar Limitation" means $30,000 or, if
greater, one-fourth (1/4) of the Defined Benefit Dollar Limitation in effect on
the last day of the Limitation Year. If a Limitation Year is less than 12
months, the Defined Contribution Dollar Limitation for that year shall be
multiplied by one-twelfth (1/12) of the number of months in such year. Effective
for Limitation Years beginning after December 31, 1994, Defined Contribution
Dollar Limitation means $30,000 as adjusted by Section 415(d) of the Code.
17. "Defined Contribution Plan Fraction" means a fraction, the
numerator of which is the sum of the Annual Additions to a Participant's
Accounts under all defined contribution plans maintained by the Employer or its
Controlled Group, whether or not terminated, including Employee After-Tax
Contributions to any defined benefit plan maintained by the Employer and Annual
Additions attributed to all welfare plans, simplified employee pension plans,
and individual medical accounts maintained by the Employer as of the end of the
Limitation Year, and the denominator of which is the sum of the lesser of the
following amounts determined for such Limitation Year and for all prior
Limitation Years with the Employer:
(a) 1.25 multiplied by the Defined Contribution Dollar
Limitation in effect for such Limitation Year, but without regard to Section
415(c)(6) of the Code; or
(b) 1.4 multiplied by 25% of the Participant's Section 415
Compensation for such Limitation Year determined under Section 415(c)(1)(B) or
Section 415(c)(7) of the Code, if applicable.
Notwithstanding the above, if an Employee was a Participant as
of the first day of the first Limitation Year beginning after December 31, 1986,
in one (1) or more defined contribution plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of the Defined Contribution Plan
Fraction will be adjusted if the sum of this fraction and the Defined Benefit
Plan Fraction would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment, an amount equal to the product of (i) the excess of the sum of the
fractions over 1.0, times (ii) the denominator of the Defined Contribution Plan
Fraction, will be permanently subtracted from the numerator of this fraction.
The adjustment is calculated using fractions as they would be computed as of the
end of the last Limitation Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the Plan made after May 5, 1986, but
using the Section 415 limitation applicable to the first Limitation Year
beginning on or after January 1, 1987.
18. "DEFRA" means the Deficit Reduction Act of 1984, as amended
from time to time.
ARTICLE II 22
19. "Designated Beneficiary" or "Beneficiary" means the person(s)
or entity(ies) designated by the Participant or, in the absence thereof, the
person(s) or entity(ies) entitled under the provisions of this Plan to receive
benefits as a result of the death of the Participant.
20. "Direct Rollover" means a payment by the Plan to an Eligible
Retirement Plan specified by a Distributee.
21. "Distributee" means an Employee, former Employee, an
Employee's or former Employee's Surviving Spouse or an Employee's or former
Employee's Spouse or former Spouse who is an Alternate Payee under a Qualified
Domestic Relations Order.
22. "Earned Income" means the net earnings of a Self-Employed
Individual from self-employment (as defined in Section 1402(a) of the Code),
determined after taking into account (i) deductible contributions to the Plan
and any other qualified plans maintained by the Employer; and (ii) all other
adjustments required by Section 401(c)(2) of the Code; but (iii) only if the
services of the Self-Employed Individual to the Employer's business are a
material income-producing factor as determined in accordance with Section
1.401-10(c) of the Treasury Regulations. For taxable years beginning after 1989,
net earnings shall be further reduced by the deductions allowed to the taxpayer
by Section 164(f) of the Code.
23. "Elective Contributions" means in any Plan Year the amount of
a Participant's Compensation elected by him or her to be reduced and deferred
pursuant to Article I. Any amount that the Employee could not have elected to
receive in cash or any amount that has become currently available to a
Participant or that is designated or treated at the time of the deferral or
contribution as an Employee After-Tax Contribution shall not be treated as an
Elective Contribution. For Plan Years beginning after August 8, 1988, Matching
Contributions made on behalf of a partner or Self-Employed Individual under a
partnership or Individual plan shall be treated as Elective Contributions. For
Plan Years beginning after December 31, 1997, Matching Contributions made on
behalf of a partner or Self-Employed Individual shall not be treated as Elective
Contributions.
24. "Elective Contribution Account" means the account maintained
to record the Participant's Elective Contributions and any other adjustments as
required under Article IV, V or X of the Plan.
25. "Elective Deferrals" means the sum of an individual's election
to defer income for a taxable year pursuant to the following:
ARTICLE II 23
(a) Elective Contributions under any qualified cash or
deferred arrangements as defined in Section 401(k) of the Code which are not
includable in the individual's gross income for the taxable year on account of
Section 402(e)(3) of the Code.
(b) Any Employer contribution to a simplified employee
pension plan as defined in Section 408(k) of the Code and which is not
includable in the individual's income for the taxable year on account of Section
402(h)(1)(B) of the Code.
(c) Any Employer contribution to an annuity contract under
Section 403(b) of the Code under a salary reduction agreement within the meaning
of Section 312(a)(5)(D) of the Code which is not includable in the individual's
gross income for the taxable year on account of Section 403(b) of the Code. For
purposes of the preceding sentence, a contribution to a Section 403(b) annuity
made pursuant to a one-time irrevocable election to contribute at time of
eligibility to participate shall not be included.
(d) Any Employee contribution designated as deductible in a
trust described in Section 501(c)(18) of the Code which is deducted from such
individual's income for the taxable year on account of Section 501(c)(18) of the
Code.
(e) Any elective Employer contribution made under Section
408(p)(2)(A)(i) of the Code.
26. "Eligibility Computation Period" means the initial 12
consecutive month period commencing on an Employee's Employment Commencement
Date and the Subsequent Eligibility Computation Period as elected in Article I.
27. "Eligible Participant" means any Employee who is directly or
indirectly eligible to make an election to reduce and defer his or her
Compensation under the Plan during all or a portion of a Plan Year, including
(i) any Employee who would be a Participant but for the failure to make any
Elective Contributions or other required contributions; (ii) any Employee whose
eligibility to make Elective Contributions has been suspended due to a hardship
distribution, other distribution, a loan, or an election not to participate,
other than a one-time election not to be eligible to make a cash or deferred
election or to have contributions equal to a specified amount or percentage of
Compensation (including no amount of Compensation) made by the Employer to this
Plan and any other plan maintained by the Employer (including plans not yet
established) for the duration of the Employee's employment; (iii) any Employee
who is unable to receive an additional Annual Addition on account of Sections
415(c)(1) and 415(e) of the Code; and (iv) any Employee who is unable to make an
Elective Contribution because his or her Compensation is less than a stated
dollar amount, shall
ARTICLE II 24
be considered as an Employee for purposes of computing the Actual Deferral
Percentage.
For purposes of computing the Average Contribution Percentage,
Eligible Participant means any Employee who is directly or indirectly eligible
to make an Employee After-Tax Contribution or to receive an allocation of
Matching Contributions, including Matching Contributions derived from
forfeitures under the Plan during all or a portion of a Plan Year including any
Employee who is unable to make an Employee After-Tax Contribution or receive an
allocation of Matching Contributions merely because his Compensation is less
than a stated amount; any Employee who would be eligible to make Employee
After-Tax Contributions or receive Matching Contributions except for a
suspension due to a hardship distribution or other distribution, loan or
election not to participate in the Plan, other than a one-time election not to
be eligible to make a cash or deferred election or to have contributions equal
to a specified amount or percentage of Compensation (including no amount of
Compensation) made by the Employer to this Plan and any other plan maintained by
the Employer (including plans not yet established) for the duration of the
Employee's employment; and any Employee who is unable to receive additional
Annual Additions because of Sections 415(c)(1) and 415(e) of the Code shall be
considered as an Employee for purposes of computing the Contribution Percentage
limitation.
28. "Eligible Retirement Plan" means an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover Distribution.
However, in case of an Eligible Rollover Distribution to a Surviving Spouse, an
Eligible Retirement Plan is an individual retirement account or individual
retirement annuity.
29. "Eligible Rollover Distribution" means any distribution of
$200 or more of the Distributee's vested Accrued Benefit except that an Eligible
Rollover Distribution does not include (i) any distribution that is one of a
series of substantially equal periodic payments (made not less frequently than
annually) 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 10 years or more; (ii) any
distribution to the extent such distribution is required under Section 401(a)(9)
of the Code; (iii) the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); and (iv) hardship
distributions of salary deferrals within the meaning of Section
401(k)(2)(B)(i)(IV) of the Code made after December 31, 1998 or such later date
as administered by the Committee but no later than December 31, 1999.
ARTICLE II 25
If a Participant would have been entitled to receive his or
her Elective Contributions regardless of hardship (i.e., age 59 1/2), then such
deferral shall qualify as an Eligible Rollover Distribution.
If a portion of a distribution that includes a hardship
distribution is not includible in gross income, the portion of the distribution
that is not includible in gross income is first allocated to the hardship
distribution and then any remaining portion not includible in gross income is
allocated to the portion of the distribution that is not a hardship
distribution.
30. "Employee" means every person employed by the Employer whose
income is subject to withholding of income tax or for whom Social Security
contributions are made by the Employer. Unless the Plan is amended to provide
otherwise, the transitional rule of Section 410(b)(6)(C) of the Code shall
apply. If the Employer is an Unincorporated Entity, Employee also means a
Self-Employed Individual.
Employee shall include Leased Employees; provided, however,
that a Leased Employee shall not be considered an Employee if:
(a) The Leased Employee is covered by a money purchase
pension plan providing (i) a nonintegrated employer contribution rate of at
least 10% of compensation, as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the employer pursuant to a salary reduction
agreement which are excludable from the Leased Employee's gross income under
Section 125, 402(e)(3), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457 of the
Code; (ii) immediate participation; and (iii) full and immediate vesting; and
(b) Leased Employees do not constitute more than 20% of the
Employer's non-highly compensated workforce.
Employees who are Leased Employees shall be Eligible Employees
unless excluded in Article I.
31. "Employee After-Tax Contribution" means any contributions made
to a plan that are designated or treated at the time of deferral or
contributions as employee after-tax contributions and are allocated to a
separate account to which the attributed earnings and losses are allocated. Such
term includes (i) Employee contributions to a defined contribution plan
described in Section 414(k) of the Code; (ii) Employee contributions made to a
defined benefit plan which provides for a cost of living arrangement as
described in Section 415(k)(2)(B) of the Code; (iii) Employee contributions
applied to the purchase of whole life insurance protection, or survivor benefits
protection under a defined contribution plan; (iv) amounts attributed to Excess
Contributions within the meaning of Section 401(k)(8)(B) of the Code which are
ARTICLE II 26
recharacterized as Employee contributions; and (v) and Employee contributions to
a contract described in Section 403(b) of the Code. Employee After-Tax
Contributions do not include repayment of loans, buy-backs of benefits
previously forfeited, or Employee After-Tax Contributions which were transferred
to this Plan and are held pursuant to Article XVI.
32. "Employee After-Tax Contribution Account" means the Account
maintained to record a Participant's allocation of Employee Contributions and
other adjustments as required under Article IV, V or X of the Plan.
33. "Employer" means the entity or entities adopting the Plan, and
any other members of the Controlled Group which have adopted the Plan in
accordance with the provisions of Paragraph D of Article XIV, and any successor
thereto. Employer also means any other entities that have adopted this Plan that
are not members of a Controlled Group, and any successor thereto. The
"Sponsoring Employer" shall be the Employer who is responsible for the
administration of the Plan. Each other entity which adopts this Plan as provided
herein shall be a "Participating Employer"; provided, however, that only members
of a Controlled Group may be Participating Employers unless the preamble of
Article I designates a non-Controlled Group as a Participating Employer.
34. "Employment Commencement Date" means the date upon which an
Employee first completes one (1) Hour of Service.
35. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
36. "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of Qualifying Section 401(m)
Contributions actually made on behalf of Highly Compensated Employees for such
Plan Year over the maximum amount of such contributions permitted under the
Contribution Percentage limitation.
37. "Excess Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of Qualifying Section 401(k) Contributions
actually made on behalf of Highly Compensated Employees for the Plan Year over
the maximum amount of such contributions permitted under the Actual Deferral
Percentage limitation.
38. "Excess Deferrals" means those Elective Deferrals made by an
individual during his or her taxable year which exceed $7,000 ($6,000 if a
Simple 401(k) Plan) or such other amount that is adjusted under Section 415(d)
of the Code. The
ARTICLE II 27
special adjustments for Section 403(b) Annuity Contracts and other rules
concerning Section 402(g) of the Code are incorporated herein by reference.
39. "Family Member" means an Employee or former Employee's Spouse
and lineal ascendants or descendants and the spouses of such lineal ascendants
or descendants.
40. "5%-Owner" means any person who owns directly or indirectly as
defined in Section 416(i)(1)(B) of the Code (i) more than five percent (5%) of
the outstanding stock of the Employer; or (ii) stock possessing more than five
percent (5%) of the total combined voting power of all stock of the Employer. If
the Employer is not a corporation, 5%-Owner means any person who owns more than
five percent (5%) of the capital or profits interests in the Employer.
For purposes of Section 401(a)(9) of the Code, a Participant
shall be considered a 5%-Owner if such Participant is a 5%-Owner at any time
during the Plan Year ending with or within the calendar year in which such
5%-Owner attains age 70 1/2.
41. "Highly Compensated Employee" means:
(a) For Plan Years beginning prior to January 1, 1997:
(i) Any Employee who performs services during the Plan
Year; and
(A) Was a 5%-Owner during the Plan Year or
Look-Back Year; or
(B) Received Section 415 Compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section 415(d) of the
Code in effect as of the first day of any relevant Plan Year) during the
Look-Back Year; or
(C) Received Section 415 Compensation from the
Employer in excess of $50,000 (as adjusted pursuant to Section 415(d) of the
Code in effect as of the first day of any relevant Plan Year) during the
Look-back Year and was in the top 20% of Employees ranked on the basis of
Section 415 Compensation during the Look-Back Year. Employees described in
Section 414(q)(8) of the Code and Q&A 9(b) of Section 1.414(q)-1T of the
Regulations are excluded to the extent provided in Article I; or
(D) Was an officer of the Employer, as defined
in Section 416(i) of the Code and received Section 415 Compensation during the
ARTICLE II 28
Look-Back Year that is greater than 50% of the Defined Benefit Dollar Limitation
for the calendar year in which the Look-Back Year began. If no officer has
received Section 415 Compensation in excess of 50% of the Defined Benefit Dollar
Limitation during the Plan Year or the Look-Back Year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee. The number of
officers is limited to 50 or if less, the greater of three (3) Employees or 10%
of all Employees. Employees described in Section 414(q)(8) of the Code and Q&A
9(b) of Section 1.414(q)-1T of the Regulations are excluded to the extent
provided in Article I; or
(E) Any Employee who is both (i) described in
(B) or (D) above, when such paragraphs are modified to substitute the Plan Year
for the Look-Back Year; and (ii) one (1) of the 100 Employees who received the
greatest Section 415 Compensation from the Employer during the Plan Year.
(ii) Any former Employee who separated from service
prior to the Plan Year, who performs no services for the Employer during the
Plan Year and was a Highly Compensated Employee who performed services for the
Employer during either the year the Employee separated from service or any Plan
Year on or after the Employee's 55th birthday.
For Plan Years beginning before January 1, 1997, if an
Employee is, during a Plan Year or Look-Back Year, a Family Member of either a
5%-Owner who is an Employee or former Employee or a Highly Compensated Employee
who is one (1) of the 10 most Highly Compensated Employees ranked on the basis
of Section 415 Compensation paid by the Employer during such year, then the
Family Member and the 5%-Owner or the top 10 Highly Compensated Employee shall
be treated as a single Employee receiving Compensation and plan contributions or
benefits equal to the sum of such Compensation and contributions or benefits of
the Family Member and 5%-Owner or top 10 Highly Compensated Employee. For
purposes of Section 401(l) of the Code, the required aggregation of Family
Members shall not apply in determining the amount of Compensation of a
Participant which is below the Plan's integration level but will apply for
purposes of the Compensation Limitation. The apportionment of Compensation
earned by Family Members who are required to be aggregated, and the resulting
benefits and/or contributions, shall be determined by Article I.
For purposes of identifying a Highly Compensated
Employee, Section 415 Compensation shall also include elective or salary
reduction contributions to a cafeteria plan, cash or deferred arrangement or tax
sheltered annuity.
For purposes of identifying a Highly Compensated
Employee, the determinations of (i) the number and identity of Employees in the
top 20% or highest paid group; (ii) the top 100 Employees; (iii) the number of
Employees
ARTICLE II 29
treated as officers; and (iv) the Compensation that is to be considered, will be
made according to Section 414(q) of the Code and the regulations thereunder.
(b) For Plan Years beginning after December 31, 1996:
(i) Any Employee who performs services during the Plan
Year; and
(A) Was a 5%-Owner during the Plan Year or
Look-Back Year; or
(B) Received Section 415 Compensation from the
Employer in excess of $80,000 (as adjusted pursuant to Section 415(d) of the
Code, except that the base period shall be the calendar quarter ending September
30, 1996, in effect on the first day of any relevant Plan Year) during the
Look-Back Year or if elected in Article I, the calendar year beginning with or
within the Look-Back Year and, if elected in Article I, was also in the Top Paid
Group.
(ii) Any former Employee who separated from service
prior to the Plan Year, who performs no services for the Employer during the
Plan Year and was a Highly Compensated Employee who performed services for the
Employer during either the year the Employee separated from service or any Plan
Year on or after the Employee's 55th birthday.
For purposes of determining if an Employee is a Highly
Compensated Employee in 1997, subparagraphs (b)(i) and (b)(ii) of this Paragraph
A.41 shall be treated as having been in effect in 1996.
For purposes of identifying a Highly Compensated
Employee, Section 415 Compensation shall also include elective or salary
reduction contributions to a cafeteria plan, cash or deferred arrangement or tax
sheltered annuity.
For purposes of this Paragraph A.41, all entities which are
members of a Controlled Group with the Employer shall be treated as a single
Employer.
42. "Hour of Service" means:
(a) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment. These hours shall be credited to the
Employee for the computation period(s) in which the services are performed and
not when paid, if different; and
ARTICLE II 30
(b) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by the Employer for a period of time
during which no services are performed (without regard to whether the employment
relationship between the Employee and the Employer has terminated) due to
vacation, holiday, illness, incapacity, disability, layoff, jury duty, military
duty, or Leave of Absence with pay. The hours shall be credited to the Employee
in the computation period to which non-performance of duties relates and not in
which paid, if different; and
(c) Each hour for which an Employee has been awarded or for
which the Employer has agreed to pay, directly or indirectly, back pay (without
regard to damages). These hours shall be credited to the Employee in the
computation period to which the award or agreement pertains, not the period in
which paid, if different.
Notwithstanding the foregoing, (i) no more than 501 Hours of
Service shall be credited to an Employee under subparagraph (b) or (c) of this
Paragraph A.42 for any single continuous period of time during which no services
are performed; (ii) an hour for which an Employee is directly or indirectly paid
for a period during which no services are performed shall not constitute an Hour
of Service, if such payment is paid or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, unemployment
compensation, or disability insurance laws; (iii) Hours of Service shall not be
credited for payments which solely reimburse an Employee for medical or
medically related expenses; (iv) the same Hours of Service shall not be credited
to an Employee both under subparagraph (a) or (b) and subparagraph (c); and (v)
Hours of Service to be credited under subparagraph (b) above shall be determined
based upon the number of regularly scheduled working hours included in the units
of time on the basis of which payment is calculated.
The Committee may determine Hours of Service based upon days
of employment in a computation period by crediting an Employee with 10 Hours of
Service for each day for which the Employee would be required to be credited
with at least one (1) Hour of Service under subparagraphs (a), (b) and (c) of
this Paragraph A.42. Alternatively, the Committee may adopt such other
equivalency rule as permitted under Section 2530.200b-3 of the Department of
Labor Regulations (as amended from time to time), which are incorporated herein
by this reference.
The Committee shall determine Hours of Service to be credited
to an Employee under the foregoing rules in a uniform and non-discriminatory
manner and in accordance with Section 2530.200b-2 of the Department of Labor
Regulations (as amended from time to time), which are incorporated herein by
this reference.
43. "Inactive Participant" means a Participant whose participation
in the Plan is suspended because of a change of employment status, including (i)
terminating employment; (ii) incurring a Break-in-Service; or (iii) becoming a
member of a class of
ARTICLE II 31
Employees which has been excluded from participation, but whose total benefits
have not been distributed.
44. "Investment Manager" means a fiduciary designated by the
Employer or the Committee, to whom has been delegated the responsibility and
authority to manage, acquire or dispose of the Trust assets, and (i) who is (A)
registered as an investment advisor under the Investment Advisors Act of 1940;
(B) a bank, as defined in that Act; or (C) an insurance company qualified to
perform investment advisory services under the laws of more than one (1) state;
and (ii) who has acknowledged in writing that he or she is a fiduciary with
respect to the management, acquisition and control of the Trust assets.
45. "Leased Employee" means any person (other than an Employee of
the Employer) who, pursuant to an agreement between the Employer and any other
person ("leasing organization"), has performed services for the Employer (or for
related persons determined in accordance with Section 414(n)(6) of the Code) on
a substantially full-time basis for a period of at least one (1) year, and such
services are of a type historically performed by employees in the business field
of the Employer. For Plan Years beginning on and after January 1, 1997, a person
will be a Leased Employee only if the services he or she performs are under the
primary direction or control of the Employer. Contributions or benefits provided
to a Leased Employee by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided by the
Employer.
46. "Leave of Absence" means a leave granted by the Employer, in
its sole discretion, in accordance with rules uniformly applied to all
Employees, for reasons of health or public service or for reasons determined by
the Employer to be in its best interests.
Effective December 12, 1994, contribution, benefit and service
credit with respect to qualified military service will be provided in accordance
with Section 414(u) of the Code. If elected in Article I, the Committee shall
suspend loan repayments during any Participant's periods of qualified military
service.
47. "Look-Back Year" means the 12-month period immediately
preceding any relevant Plan Year or the calendar year ending with or within the
Plan Year, as elected in Article I.
For Plan Years beginning on and after January 1, 1997,
Look-Back Year means the 12-month period immediately preceding any relevant Plan
Year. However, if elected in Article I, for the Plan Year beginning in 1997, the
Look-Back Year may be the calendar year ending with or within the Plan Year.
ARTICLE II 32
48. "Matching Contribution" means an Employer contribution made to
the Plan or a defined contribution plan maintained by the Employer on account of
an Employee After-Tax Contribution or an Elective Contribution, and any
reallocated forfeiture allocated on the basis of an Employee After-Tax
Contribution, Matching Contribution or Elective Contribution. For Plan Years
beginning after December 31, 1988, any contributions used to satisfy Top-Heavy
minimum benefits shall not be treated as Matching Contributions.
49. "Matching Contribution Account" means the account maintained
separately to record each Participant's Matching Contributions and other
adjustments as required under Article V or X of the Plan.
50. "Maternity or Paternity Leave of Absence" means an absence (i)
because of the Employee's pregnancy; (ii) because of the birth of a child of the
Employee; (iii) because of the adoption of a child by, and placement of the
child with, the Employee; or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement. The Hours of
Service credited under this Paragraph A.50 shall be credited (i) in the
Eligibility Computation Period and/or Vesting Computation Period in which the
absence begins if the crediting is necessary to prevent a Break-in-Service in
that computation period; or (ii) in all other cases, in the following
Eligibility Computation Period and/or Vesting Computation Period. No Hours of
Service for Maternity or Paternity Leave of Absence shall be credited to a
Participant unless he or she timely furnishes to the Committee such information
as the Committee may request to establish that the absence is for a Maternity or
Paternity Leave of Absence and the number of days of such absence. The total
Hours of Service to be credited for Maternity or Paternity Leave of Absence
shall not exceed 501 in any computation period.
51. "Net Profits" means the net income of the Employer as
determined for federal income tax purposes without any deduction for taxes based
upon income or for contributions made by the Employer under this Plan or any
other qualified plan maintained by the Employer. For a Self-Employed Individual,
Net Profits mean Earned Income, as determined under Section 404(a)(8) of the
Code.
52. "Nonelective Employer Contributions" means Employer
contributions other than Matching Contributions with respect to which the
Employee may not elect to have the contributions paid to the Employee in cash or
other benefits.
53. "Nonelective Employer Contribution Account" means the Account
maintained to record a Participant's allocations of Nonelective Employer
Contributions, forfeitures, if any, and other adjustments as required under
Article V of the Plan.
ARTICLE II 33
54. "Non-Highly Compensated Employee" means an Employee of the
Employer who is neither a Highly Compensated Employee nor a Family Member of a
Highly Compensated Employee.
For Plan Years beginning after December 31, 1996, Non-Highly
Compensated Employee means an Employee who is not a Highly Compensated Employee.
55. "One-Year Period of Severance" means each 12 consecutive month
Period of Severance, beginning on the Severance from Service Date.
56. "One-Year Period of Service" means each 12 month Period of
Service beginning on the Employee's Employment Commencement Date.
57. "Owner-Employee" means a Self-Employed Individual who owns the
entire interest of an Unincorporated Entity, or a partner who owns more than a
10% capital or profits interest in a partnership.
If this Plan provides contributions or benefits for one (1) or
more Owner-Employees who control both the business for which this Plan is
established and one (1) or more other trades or businesses, this Plan and any
plans established for such other trades or businesses must, when looked at as a
single plan, satisfy Sections 401(a) and 401(d) of the Code for the employees of
this and all other such trades or businesses.
If the Plan provides contributions or benefits for one (1) or
more Owner-Employees who control one (1) or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies Sections 401(a) and 401(d) of the Code and which provides
contributions and benefits not less favorable than provided for Owner-Employees
under this Plan.
If an individual is covered as an Owner-Employee under the
plans of two (2) or more trades or businesses which are not controlled and the
individual controls a trade or business, then the contributions or benefits of
the employees under the plan of the trade or business which are controlled must
be as favorable as those provided for him or her under the most favorable plan
of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an Owner-Employee,
or two (2) or more Owner-Employees, will be considered to control a trade or
business if the Owner-Employee, or two (2) or more Owner-Employees together:
ARTICLE II 34
(a) Own the entire interest in an unincorporated trade or
business; or
(b) In the case of a partnership, own more than 50% of
either the capital interest or the profits interest in the partnership.
For purposes subparagraph (b) of this Paragraph A.57, an
Owner-Employee or two (2) or more Owner-Employees shall be treated as owning any
interest in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two (2) or more Owner-Employees,
are considered to control within the meaning of such subparagraph (b).
For Plan Years beginning on or after January 1, 1997, the
preceding controlled group provisions relating to Section 401(d) of the Code
shall no longer apply.
58. "Participant" means any Eligible Employee who enters the Plan
and who has not received payment of his or her total vested Accrued Benefit.
59. "Period of Service" means a period beginning on the Employment
Commencement Date or, for a former Employee, the date on which he or she first
performs an Hour of Service after re-hire and ending with the Severance from
Service Date.
60. "Period of Severance" means a period during which an Employee
does not perform an Hour of Service, beginning on the Severance from Service
Date and ending when an Employee again performs an Hour of Service.
61. "Plan" means this 401(k) Plan as identified in Article I.
62. "Qualified Domestic Relations Order" means a judgment, decree
or order (including approval of a property settlement agreement) that (i)
relates to the provision of child support, alimony payments or marital property
rights to an alternate payee; (ii) is made pursuant to a state domestic
relations law (including community property law); (iii) creates or recognizes
the existence of an alternate payee's right, or assigns to an alternate payee
the right, to receive all or a portion of the benefits payable to the
Participant under the Plan; (iv) specifies the information required by Section
414(p) of the Code; (v) does not alter the amount or form of Plan benefits; and
(vi) complies with all other relevant provisions of Section 414(p) of the Code.
For such purposes, an "Alternate Payee" is a Spouse, former Spouse, child or
other dependent of a Participant who is recognized by a domestic relations order
as having a right to receive all or a portion of the benefits payable with
respect to a Participant under the Plan.
ARTICLE II 35
63. "Qualified Matching Contributions" means Matching
Contributions, other than Safe Harbor Matching Contributions or Simple 401(k)
Contributions, that satisfy the vesting and distribution requirements of
Elective Contributions.
64. "Qualified Matching Contribution Account" means the account
maintained to record separately a Participant's allocation of a Qualified
Matching Contribution, and other adjustments as required under Article IV, V or
X of the Plan.
65. "Qualified Nonelective Employer Contributions" means Employer
contributions, other than Elective Contributions, Matching Contributions, Safe
Harbor Nonelective Employer Contributions, Safe Harbor Matching Contributions or
Simple 401(k) Contributions, that satisfy the vesting and distribution
requirements of Elective Contributions.
66. "Qualified Nonelective Employer Contribution Account" means
the account maintained to record a Participant's allocation of Qualified
Nonelective Employer Contributions, and other adjustments as required under
Article IV, V or X of the Plan.
67. "Qualifying Section 401(k) Contributions" means Elective
Contributions in combination with Qualified Nonelective Employer Contributions
and Qualified Matching Contributions that are treated as Elective Contributions
to satisfy the Actual Deferral Percentage limitation.
68. "Qualifying Section 401(m) Contributions" means Employee
After-Tax Contributions and Employer Matching Contributions in combination with
Qualified Nonelective Employer Contributions and Elective Contributions that are
treated as Employee After-Tax Contributions to satisfy the Contribution
Percentage limitation.
69. "REACT" means the Retirement Equity Act of 1984, as amended
from time to time.
70. "Rollover Contributions" means contributions within the
meaning of Section 402(c), 403(a)(4) or 408(d)(3) of the Code.
71. "Rollover Contribution Account" means the account maintained
to record a Participant's Rollover Contribution and other adjustments as
required in Article X of the Plan.
72. "Safe Harbor Matching Contributions" means Matching
Contributions made to this Plan, or to another defined contribution plan
maintained by
ARTICLE II 36
the Employer, to satisfy the Average Deferred Percentage limitation or Average
Contribution limitation that are (i) fully vested; (ii) subject to the
withdrawal restrictions of Elective Contributions but not available to hardship
withdrawals; and (iii) used to satisfy the allocation requirements of Section
401(k)(12)(B) of the Code and the notice requirements of Section 401(k)(12)(D)
of the Code without regard to Section 401(l) of the Code. For Plan Years
beginning after December 31, 1999, if Safe Harbor Matching Contributions are
made to another defined contribution plan maintained by the Employer, such plan
must have the same Plan Year as this Plan.
The rate of Safe Harbor Matching Contributions allocated to
Participants can not increase as a Participant's rate of Elective Contributions
increase. The rate of Safe Harbor Matching Contributions allocation to
Non-Highly Compensated Participants must at all times be equal to the rate of
Matching Contributions, including Safe Harbor Matching Contributions, allocated
to Highly Compensated Participants.
73. "Safe Harbor Matching Contribution Account" means the account
maintained to record the Participant's Safe Harbor Matching Contributions and
any other adjustments as required under Article IV, V or X of the Plan.
74. "Safe Harbor Nonelective Employer Contributions" means
Nonelective Employer Contributions made to this Plan, or to another defined
contribution plan maintained by the Employer, to satisfy the Actual Deferred
Percentage limitation, that are (i) fully vested; (ii) subject to the withdrawal
restrictions of Elective Contributions but not available for hardship
withdrawals; and (iii) used to satisfy the allocation requirements of Section
401(k)(12)(C) of the Code and the notice requirements of Section 401(k)(12)(D)
of the Code without regard to Section 401(l) of the Code. For Plan Years
beginning after December 31, 1999, if Safe Harbor Nonelective Employer
Contributions are made to another defined contribution plan maintained by the
Employer, such plan must have the same Plan Year as this Plan.
75. "Safe Harbor Nonelective Employer Contribution Account" means
the account maintained to record the Participant's Safe Harbor Nonelective
Employer Contributions and any other adjustments as required under Article IV, V
or X of the Plan.
76. "Section 415 Compensation" means, with respect to any
Participant, the greatest of (a), (b) or (c) below:
(a) Wages as defined in Section 3121(a) of the Code, for the
purpose of calculating social security taxes but determined without regard to
(i) the wage base limitation in Section 3121(a)(1) of the Code; (ii) the
limitations on the exclusions from wages in Section 3121(a)(5)(C) and (D) of the
Code for elective contributions and salary reduction agreements; (iii) the
special rules in Section 3121(v)
ARTICLE II 37
of the Code; (iv) any rules that limit covered employment based on the type or
location of an employee's employer; and (v) any rules that limit the
remuneration included in wages based on familial relationship or based on the
nature or location of the employment or the services performed (such as the
exceptions to the definition of employment in Sections 3121(b)(1) through (20)
of the Code).
(b) Wages as defined in Section 3401(a) of the Code for the
purpose of income tax withholding 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 Section 3401(a)(2) of the Code).
(c) A Participant's wages, salaries, and fees for
professional services, and other amounts received for personal services actually
rendered in the course of employment with the Employer maintaining the Plan
(including, but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses and compensation recognized as a result of a Section
83(b) election). The following items are excluded from Section 415 Compensation
under this subparagraph (c):
(i) Employer contributions to a plan of deferred
compensation which are not included in the Employee's gross income for the
taxable year in which contributed or Employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(ii) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax benefits,
or contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Section 403(b) of the
Code (whether or not the amounts are actually excludable from the gross income
of the Employee).
If the Employee is a Self-Employed Individual, his or her
Section 415 Compensation includes his or her Earned Income derived from the
trade or business for which the Plan is established.
ARTICLE II 38
Effective for years beginning after December 31, 1997, Section
415 Compensation shall include any Elective Deferrals and any amount deferred by
an Employee which is not includable in gross income by reasons of Section 125 or
457 of the Code.
77. "Self-Employed Individual" means a person who has Earned
Income for the taxable year from the trade or business for which the Plan is
established and includes an individual who would have had Earned Income but for
the fact that the trade or business had no Net Profits for the taxable year.
78. "Severance from Service Date" means the date which is the
earlier of the date on which an Employee voluntarily leaves (quits) employment,
retires, is discharged or dies, or the first anniversary of the first date the
Employee is absent for any other reason. However, for purposes of Maternity or
Paternity Leave of Absence, Severance from Service Date of an Employee who is
absent beyond the first anniversary of such absence means the second anniversary
of the first date of such absence. The period between the first and second
anniversary of a Maternity or Paternity Leave of Absence is neither a Period of
Service or a Period of Severance.
79. "Shareholder-Employee" means an employee of a subchapter S
corporation (Section 1361, et seq., of the Code) who owns more than five percent
(5%) of the outstanding stock of such corporation.
80. "Simple 401(k) Contributions" means Matching Contributions
that satisfy the allocation requirements of Section 401(k)(11)(B)(i)(II) of the
Code or Nonelective Employer Contributions that satisfy the allocation
requirements of Section 401(k)(11)(B)(ii) of the Code. Simple 401(k)
Contributions must satisfy the administrative and notice requirements of Section
401(k)(11)(B)(iii) of the Code and the fully vested requirements of Section
408(p)(3) of the Code.
81. "Simple 401(k) Contribution Account" means the account
maintained to record the Participant's Simple 401(k) Contributions and any other
adjustments as required under Article IV, V or X of the Plan.
82. "Simple 401(k) Plan" means a plan intended to satisfy the
requirements of Section 401(k)(11) of the Code. If the Employer elects in
Article I that this Plan is intended to satisfy the requirements of a Simple
401(k) Plan, Employees covered under this Plan shall not be eligible to
participate under any other plan maintained by the Employer. Except as stated
below, if an Employer employs more than 100 Employees who earn at least $5,000
of Section 415 Compensation during the prior year, such Employer shall not be
eligible to maintain a Simple 401(k) Plan. A Simple 401(k) Plan must have a
calendar year as its Plan Year.
ARTICLE II 39
An eligible Employer that maintains a Simple 401(k) Plan and
later fails to be an eligible Employer for any subsequent year, shall be treated
as an eligible Employer for the two (2) years following the last year the
Employer was an eligible Employer. If the failure is due to any acquisition,
disposition, or similar transaction involving an eligible Employer, the
preceding sentence applies only if the provisions of Section 410(b)(6)(C)(i) of
the Code are satisfied.
If this Plan is a Simple 401(k) Plan as elected in Article I,
the Employer shall be required to make Simple 401(k) Contributions as described
in Article I. No other contributions may be made to the Plan other than Elective
Contributions and Simple 401(k) Contributions and to the extent that any other
provision of the Plan is inconsistent with the provision of a Simple 401(k)
Plan, the provisions of the Simple 401(k) Plan shall apply.
83. "Single Employer Plan" means a plan maintained by one (1)
Employer, or a plan maintained by more than one (1) Employer, all of which are
members of a Controlled Group, and which is designed to comply with the
provisions of Sections 413(c), 414(b), 414(c) and 414(m) of the Code and the
Treasury Regulations promulgated thereunder.
84. "Social Security Retirement Age" means age 65 for a
Participant born before January 1, 1938; age 66 for a Participant born after
December 31, 1937 and before January 1, 1955; and age 67 for a Participant born
after December 31, 1954.
85. "Social Security Wage Base" means, with respect to any Plan
Year, the maximum amount of earnings which may be considered wages under Section
3121(a) of the Code for the calendar year in which falls the beginning of such
Plan Year as in effect on the first day of such Plan Year.
86. "TEFRA" means the Tax Equity and Fiscal Responsibility Act of
1982, as amended from time to time.
87. "Top Paid Group" means the group consisting of the top 20% of
the Employees when ranked on the basis of Section 415 Compensation during either
the Look-Back Year or the calendar year beginning with or within the Look-Back
Year as selected in Article I.
Employees described in Section 414(q)(5) of the Code and Q&A
9(b) of Section 1.414(q)-1T of the Regulations are included or excluded to the
extent provided in Article I.
88. "TRA `86" means the Tax Reform Act of 1986, as amended from
time to time.
ARTICLE II 40
89. "Total Disability" means the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months,
as determined by a licensed physician selected or approved by the Committee, or
such other definition as elected in Article I.
90. "Transferred Benefits Account" means the Account maintained to
record a Participant's Transferred Benefit, forfeitures, if any, and other
adjustments required under Article IV, V or X of the Plan.
91. "Trust" means the Trust Agreement entered into between the
Employer and the Trustee. A Trust may include a custodial agreement or insurance
contract, if applicable.
92. "Trustee" means the trustee(s) named under the Trust or any
successor Trustee named in a written instrument of the Board.
93. "Unincorporated Entity" means a sole proprietorship or a
partnership.
94. "Vesting Computation Period" means the 12 consecutive month
period ending on the last day of the Plan Year that includes an Employee's
Employment Commencement Date and the last day of each subsequent Plan Year.
If elected in Article I or if the elapsed time method is
selected in Article I, Vesting Computation Period means each 12 consecutive
month period beginning on the Employee's Employment Commencement Date and any
subsequent 12 consecutive month period commencing on any anniversary date of the
Employee's Employment Commencement Date.
95. "Year of Service" means an Eligibility Computation Period or
Vesting Computation Period during which an Employee completes 1,000 or more
Hours of Service or such lesser amount, if elected in Article I, with the
Employer. With respect to any Eligibility Computation Period and any Vesting
Computation Period, Hours of Service with any member of a Controlled Group shall
be credited to the relevant Computation Period. Unless elected otherwise in
Article I, for purposes of eligibility and vesting, if a Plan Year is less than
12 months and an Employee has less than 1,000 Hours of Service during such short
Plan Year but has completed 1,000 Hours of Service or such lesser amount, if
elected in Article I, during the 12 consecutive month period ending on the last
day of such short Plan Year, the Employee will be credited with one (1) Year of
Service for the Plan Year. If such Plan Year is not an Eligibility
ARTICLE II 41
Computation Period for an Employee, the preceding sentence shall not apply for
eligibility purposes.
For purposes of the elapsed time method, a "Year of Service"
means a One-Year Period of Service with the Employer. An Employee will receive
credit for the aggregate of all time period(s) commencing with the Employee's
Employment Commencement Date or the date such Employee is credited with an Hour
of Service upon re-employment and ending on the date a One-Year Period of
Severance begins. An Employee will also receive credit for any Period of
Severance of less than 12 consecutive months. Fractional portions of a year will
be expressed in terms of days.
B. Terms Not Defined in Article I and II of this Plan. The following
terms are defined in the Paragraphs and Articles specified below.
1. Annuity Starting Date - See Paragraph A.1 of Article VII.
2. Determination Date - See Paragraph A.1 of Article VIII.
3. Election Period - See Paragraph A.2 of Article VII.
4. Key Employee - See Paragraph A.2 of Article VIII.
5. Non-Key Employee - See Paragraph A.3 of Article VIII.
6. Qualified Joint and Survivor Annuity - See Paragraph A.3 of
Article VII.
7. Qualified Preretirement Survivor Annuity - See Paragraph A.4
of Article VII.
8. Required and Permissive Aggregation Groups - See Paragraphs
A.6 and B of Article VIII.
9. Spouse or Surviving Spouse - See Paragraph A.5 of Article VII.
10. Top-heavy Group - See Paragraph A.5 of Article VIII.
11. Top-heavy Plan - See Paragraph A.4 of Article VIII.
12. Transferred Benefits - See Paragraph A.6 of Article VII.
13. Waiver Election - See Paragraph A.7 of Article VII.
ARTICLE II 42
III. PARTICIPATION AND MEMBERSHIP
A. Participation Date. Each Eligible Employee shall become a
Participant on the Entry Date specified in Article I if he or she is employed on
such Entry Date.
1. Vested Participants. Any vested Participant who terminates
employment and who is subsequently re-employed, shall be readmitted as a
Participant as of the first day or his or her re-employment.
2. Non-Vested Participants. Any non-vested Participant who
terminates employment and who is subsequently re-employed shall be considered a
new Employee, and must again satisfy the requirements to become an Eligible
Employee if his or her period of consecutive one-year Breaks-in-Service equals
or exceeds the greater of (i) five (5); or (ii) the aggregate number of Years of
Service completed before such termination of employment. If such former
Participant is not considered a new Employee pursuant to this Paragraph A.2,
such former Participant shall participate in the Plan immediately upon his or
her re-employment.
3. Employee Not a Participant. Any Employee who terminates
employment prior to his or her Entry Date, but after satisfying the eligibility
requirements of Article I, and who is re-hired prior to incurring five (5)
consecutive Breaks-in-Service shall become a Participant on the later of (i) his
or her date of re-employment; or (ii) the first Entry Date following the date he
or she becomes an Eligible Employee. If this Plan provides for immediate full
vesting of all Accounts, then an Employee who did not satisfy the Plan's service
requirement and has incurred a one-year Break-in-Service shall have his or her
prior service disregarded. Any Employee who terminates employment prior to his
or her Entry Date and who is re-hired after incurring five (5) consecutive
Breaks-in-Service shall be considered a new Employee.
4. Change in Employment Status. Any Employee who is not a member
of an eligible class of employees and becomes a member of an eligible class will
participate immediately if such Employee would have otherwise previously become
a Participant.
If a Participant becomes an Inactive Participant and has not
incurred a one-year Break-in-Service, such Employee will participate immediately
upon returning to an eligible class of employees. If such Participant incurs a
one-year Break-in-Service, eligibility will be determined under the
Break-in-Service rules of this Article III.
B. Leave of Absence. For purposes of eligibility, no Employee shall be
deemed to have suffered a Break-in-Service if his or her employment is
interrupted because such Employee has been on a Leave of Absence. For purposes
of eligibility, a
ARTICLE III 43
Break-in-Service shall not be deemed to have occurred while an Employee is a
member of the armed forces of the United States, provided that he or she returns
to the service of the Employer within 90 days (or such longer period as may be
prescribed by law) from the date he or she first became entitled to his or her
discharge.
C. Enrollment. The Employer shall, from time to time as requested by
the Committee, provide a list of all of its Employees, their names and ages, the
number of Hours of Service completed by each during the current Plan Year or
other applicable Computation Period, their dates of hire, and any additional
information the Committee may require. The Committee shall determine from such
lists which Employees are Eligible Employees and their Entry Dates for
participation under the Plan.
D. Omission of Eligible Employee. If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted or an
error caused a Participant to be credited with less than his or her full
allocation, the Committee shall determine the amounts (or additional amounts)
which should have been credited to such Participant's Account. To correct any
such error or omission, the correct amount may be deducted from forfeitures
and/or earnings prior to allocating such amounts to other Participants in lieu
of adjusting Accounts of other Participants. In addition to (or instead of) the
preceding adjustment, the Employer may make a special contribution including
earnings to correct any such error or omission.
E. 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 an
Employer contribution for the relevant Plan Year(s) has been made, the amount
contributed, as adjusted with earnings or losses if necessary, with respect to
the ineligible person shall constitute a forfeiture for the Plan Year in which
the discovery is made. Any Employee After-Tax Contributions or Elective
Contributions made by an ineligible Employee adjusted with earnings or losses,
if necessary, shall be returned to the Employee.
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NEXT PAGE IS 45
ARTICLE III 44
IV. EMPLOYER CONTRIBUTIONS
A. In General. For each Plan Year in which this Plan is in effect, the
Employer shall make contributions to the Trust in one (1) or more installments
in such amounts, if any, as provided in Article I; provided that (i) the Plan
Year for which each contribution is made shall be designated at the time of the
contribution or upon the income tax return of the Employer for any relevant Plan
Year; (ii) no contribution to this Plan for any Plan Year shall exceed an amount
which the Employer estimates will be deductible under Sections 404(a) and 404(j)
of the Code; (iii) no contribution for any Plan Year shall cause the limitations
on the Annual Addition of any Participant to be exceeded for such Plan Year; and
(iv) no contribution shall be made for any Participant who did not complete a
Year of Service during the relevant Plan Year unless Article I provides
otherwise.
For Plan Years beginning after December 31, 1996, contributions made
to an Owner-Employee may be made only from such Owner-Employee's Earned Income
derived from the trade or business for which the Plan is established.
B. Special Make-up Contribution. A previously forfeited Account Balance
shall be restored in accordance with Article I.
C. Corrective Contributions. Subject to all applicable limitations of
the Code, the Employer may make additional contributions to the Plan as needed
to correct any errors in administration which may occur from time to time. Such
corrective contributions shall be limited to the extent necessary (including
earnings as applicable) to place affected Participants in the position they
would have been in but for such error or errors, and shall be allocated to the
account or accounts from which the error was made, subject to all rules and
procedures otherwise applicable to such Accounts.
D. Profit Sharing and Retirement Savings (401(k)) Contributions. The
provisions of this Paragraph D shall apply to contributions made pursuant to the
cash or deferred feature of the Plan.
1. Qualifying Section 401(k) Contributions. The Employer intends
that all Qualifying Employer Contributions shall satisfy all of the requirements
of Section 401(k) of the Code and the Treasury Regulations promulgated
thereunder as constituting a qualified cash or deferred arrangement. Each
Participant shall be fully vested in his or her Qualifying Section 401(k)
Contributions at all times.
2. Participant Elective Contributions. As permitted in Paragraph
H.2 of Article I, a Participant may elect to reduce and defer the receipt of his
or her Compensation, the Employer shall reduce such Participant's Compensation
in the elected amount through payroll withholding and contribute to the Plan on
behalf of each
ARTICLE IV 45
such electing Participant an amount equal to the Compensation to be reduced and
deferred. A Participant's Elective Contributions shall be credited to his or her
Elective Contribution Account, and generally will be paid by the Employer to the
Plan no later than the 15th business day following the month in which the amount
was withheld from the Participant's payroll.
3. Changes in Elective Contributions. A Participant may suspend
his or her Elective Contributions at any time. The rules and procedures for
allowing Participants to defer and reduce their Compensation under Paragraph H.2
of Article I and this Paragraph D.3 and to decrease (or increase) such
reductions and deferrals shall be established by the Committee, in its sole
discretion; provided, however, that the Committee shall exercise its discretion
in a uniform and nondiscriminatory manner. If this Plan provides for Safe Harbor
Matching Contributions, a Participant shall have a reasonable opportunity and a
reasonable period of time to increase, decrease, or resume his or her Elective
Contributions. A 30 day period shall be deemed a reasonable period of time.
4. Simple 401(k) Plans. If this is a Simple 401(k) Plan, in
addition to any other election periods, each Employee may make or modify his or
her salary reduction election during the 60-day period immediately preceding
each January 1. If the Employee elects to suspend his or her Elective
Contributions during the Plan Year, the Committee may require the Employee to
wait until the beginning of the next Plan Year before he or she may resume his
or her Elective Contributions. The Employer shall notify each Eligible Employee
of his or her election rights prior to the 60-day election period and shall
indicate the type and amount of the Simple 401(k) Contribution to be made.
E. Actual Deferral Percentage Limitation. For Plan Years beginning
prior to January 1, 1997, the amount of Qualifying Section 401(k) Contributions
made on behalf of the group consisting of Highly Compensated Employees shall not
result in an Actual Deferral Percentage that exceeds the greater of:
1. The Actual Deferral Percentage limitation for the group of
Eligible Participants who are Highly Compensated Employees for the Plan Year
shall not exceed the Actual Deferral Percentage for the group of Eligible
Participants who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
2. The Actual Deferral Percentage for the group of Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Actual Deferral Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year multiplied by two (2), and
provided that the Actual Deferral Percentage for the group of Eligible
Participants who are Highly Compensated Employees does not exceed the Actual
Deferral Percentage for the group
ARTICLE IV 46
of Eligible Participants who are Non-Highly Compensated Employees by more than
two (2) percentage points or such lesser amounts as prescribed to prevent the
multiple use of this alternative limitation with respect to any Highly
Compensated Employee.
For Plan Years, beginning after December 31, 1996, the amount
of Qualifying Section 401(k) Contributions made on behalf of the group
consisting of Highly Compensated Employees shall not result in an Actual
Deferral Percentage that exceeds the greater of the following:
(a) The Actual Deferral Percentage limitation for the group
of Eligible Participants who are Highly Compensated Employees for the current
Plan Year shall not exceed the Actual Deferral Percentage for the group of
Eligible Participants who are Non-Highly Compensated Employees for the current
or preceding Plan Year as elected in Article I multiplied by 1.25; or
(b) The Actual Deferral Percentage for the group of Eligible
Participants who are Highly Compensated Employees for the current Plan Year
shall not exceed the Average Deferral Percentage for Eligible Participants who
are Non-Highly Compensated Employees for the current or preceding Plan Year as
elected in Article I, multiplied by two (2), and provided that the Actual
Deferral Percentage for the group of Eligible Participants who are Highly
Compensated Employees does not exceed the Actual Deferral Percentage for the
group of Eligible Participants who are Non-Highly Compensated Employees for the
current or preceding Plan Year, as elected in Article I, by more than two (2)
percentage points or such lesser amount as prescribed to prevent the multiple
use of this alternative limitation with respect to any Highly Compensated
Employee.
For the first Plan Year in which the Plan (other than a
successor plan) provides for a cash or deferred arrangement, the Actual Deferral
Percentage of eligible Non-Highly Compensated Employees under the prior year
testing method shall be the greater of three percent (3%) or the Actual Deferral
Percentage of the Non-Highly Compensated Employees for the first Plan Year.
If the Plan provides for the prior year testing method, the
Actual Deferral Percentage shall be determined without regard to changes in the
group of Non-Highly Compensated Employees who are Eligible Participants during
the testing year.
An Elective Contribution, Safe Harbor Nonelective Employer
Contribution or Safe Harbor Matching Contribution will be taken into account
under the Actual Deferral Percentage limitation for the Plan Year only if it is
allocated to the Employee as of any date within the Plan Year. An Elective
Contribution, Safe Harbor Nonelective Contribution and Safe Harbor Matching
Contribution is considered allocated as of any date within a Plan Year if the
allocation is not contingent on participation or
ARTICLE IV 47
performance of services after such date and the Elective Contribution is
actually paid to the Trust no later than 12 months after the close of the Plan
Year to which such contributions relate. Additionally, an Elective Contribution
must relate to Compensation that either would have been received by the Employee
during the Plan Year, except for the Employee election to defer, or is
attributable to the performance of services during the Plan Year that would have
become payable within 2 1/2 months after the close of the Plan Year, except for
the Employee election to defer.
F. Safe Harbor Contributions. For Plan Years beginning after December
31, 1998, if the Employer provides for Safe Harbor Matching Contributions or
Safe Harbor Nonelective Employer Contributions during a Plan Year that satisfy
the requirements of Section 401(k)(12) of the Code, the Actual Deferral
Percentage limitation shall be deemed satisfied for such Plan Year provided
that:
1. If Safe Harbor Nonelective Employer Contributions or Safe
Harbor Matching Contributions are made to the Plan to satisfy the Actual
Deferral Percentage limitation or the Average Contribution Percentage for a Plan
Year, such Plan shall be required to use the current year testing method for
Non-Highly Compensated Participants in any Plan Year in which Safe Harbor
Nonelective Employer Contributions or Safe Harbor Matching Contributions are
made. Such contributions, like Elective Contributions and Matching
Contributions, shall be subject to rules relating to changes from current year
testing to prior year testing, and the anti-abuse provisions of Section VIII of
IRS Notice 98-1.
2. Any Compensation definition elected in Article I must state a
uniform definition of Compensation and comply with Section 414(s) of the Code
and Section 1.414(s)-1 of the Treasury Regulations; provided, however, the last
sentence of Section 1.414(s)-1(d)(2)(iii) of the Treasury Regulations pertaining
to compensation above a specified dollar amount shall not apply to a Non-Highly
Compensated Employee.
3. A plan year must be a 12 consecutive month period or if the
Plan is a newly established plan (other than a successor plan within the meaning
of IRS Notice 98-1), a period of at least three (3) consecutive months (or, a
shorter period if the Employer is a newly established Employer and this Plan is
established as soon as administratively feasible after the establishment of the
Employer). Notwithstanding the preceding sentence, in the case of a cash or
deferred arrangement that is added to an existing profit-sharing, stock bonus,
or pre-ERISA money purchase pension plan for the first time during a plan year,
the requirements of Section V of Notice 98-52 will be treated as being satisfied
for the entire plan year and the cash or deferred arrangement will not be
treated as failing to satisfy the requirements of Section X of Notice 98-52,
provided (i) the plan is not a successor plan (within the meaning of IRS Notice
98-1), (ii) the cash or deferred arrangement is made effective no later than
three (3) months prior
ARTICLE IV 48
to the end of the plan year, and (iii) the requirements of Safe Harbor
Nonelective Contributions or Safe Harbor Matching Contributions are satisfied
for the period from the effective date of the cash or deferred arrangement to
the end of the plan year.
4. To satisfy the notice requirements in regard to Safe Harbor
Matching Contributions or Safe Harbor Nonelective Employer Contributions, the
notice given by the Committee to Employees must be sufficiently accurate and
comprehensive to inform the Employee of his or her rights and obligations under
the Plan and must be written in a manner that can be understood by the average
Employee eligible to participate in the Plan.
The notice must accurately describe (i) the Safe Harbor
Matching Contribution formula or Safe Harbor Nonelective Employer Contribution
formula used under the Plan (including a description of the level of Matching
Contributions, if any, available under the Plan); (ii) any other contributions
under the Plan (including Nonelective Employer Contributions and discretionary
Matching Contributions), the condition and allocation requirements to receive
such contributions; (iii) the Plan to which safe harbor contributions will be
made if other than this Plan; (iv) the type and amount of Compensation that may
be deferred under the Plan; (v) how to make a cash deferred election, including
any administrative requirements that apply to Elective Contributions; (vi) the
periods available under the Plan for making cash or deferred elections; and
(vii) withdrawal and vesting provisions pertaining to each contribution made
under the Plan.
A plan will not fail to satisfy the content requirement of
(ii), (iii), (iv) and (vii) of the preceding paragraph if the notice instead
cross-references the relevant portions of an up-to-date summary plan description
that has been provided (or concurrently is provided) to the Employee. However,
the notice must still accurately describe (i) the Safe Harbor Matching
Contribution or Safe Harbor Nonelective Contribution formula used under the Plan
(including a description of the levels of Matching Contributions, if any,
available under the Plan) and state that these contributions (as well as
Elective Contributions) are fully vested when made and (ii) how to make Elective
Contributions (including any administrative requirements that apply to such
elections) and the periods available under the Plan for making such elections.
In addition, the notice must also provide information that makes it easy for
Eligible Employees to obtain additional information about the Plan (including an
additional copy of the summary plan description) such as telephone numbers,
addresses and, if applicable, electronic addresses, of the individuals or
offices from whom Employees can obtain such plan information.
Such notice may be given through an electronic medium if
reasonably accessible to the Employee, provided that (i) the system under which
the electronic notice is provided is reasonably designed to provide the notice
in a manner
ARTICLE IV 49
no less understandable to the Employee than a written paper document, and (ii)
at the time the electronic notice is given, the Employee is advised that he or
she may request and obtain a written paper document at no charge.
For Plan Years beginning prior to January 1, 2000, a Plan
shall not fail the notice requirements because all items listed above are not
included, provided that such notice satisfies a good faith interpretation of the
requirements of Sections 401(k)(12) and 401(m)(11) of the Code.
The notice requirements must be given within a reasonable time
before the beginning of each Plan Year (or, if an Employee becomes eligible
after the preceding notice has been given, within a reasonable period before the
Employee is eligible). If the notice is given at least 30 days and no more than
90 days before the beginning of each Plan Year, the notice requirements shall be
deemed timely. If an Employee became eligible to participate after the 90th day
before the beginning of the Plan Year, notice shall be deemed timely if given to
such Employee no more than 90 days before he or she becomes eligible to
participate and no later than the Employee's Entry Date. The preceding sentence
shall also apply for a new established 401(k) Plan.
If the Plan provides safe harbor contributions for the first
time for the Plan Year beginning after December 31, 1999 but before June 2,
2000, the notice shall be deemed timely if given by May 1, 2000. For the Plan
Year beginning on or before April 1, 1999, the notice shall be deemed timely if
given on or before March 1, 1999, provided that all other safe harbor provisions
are complied with for the entire Plan Year.
5. Any Safe Harbor Matching Contribution formula elected in
Article I must, at any rate of Elective Contributions, provide an aggregate
amount of Safe Harbor Matching Contributions to Non-Highly Compensated
Participants at least equal to the aggregate amount of Safe Harbor Matching
Contributions that would have been provided under Section 401(k)(12)(B)(i) of
the Code.
6. For Plan Years beginning after December 31, 2001, safe harbor
provisions under Section 401(k)(12) of the Code must be adopted prior to the
first day of the Plan Year in which such provisions became effective. For the
Plan Year beginning in the year 2000, such safe harbor provisions must be
adopted on or before the last day of such Plan Year.
Notwithstanding the preceding paragraph, if the Plan provides
for the current year testing method for the Actual Deferral Percentage and the
Average Contribution Percentage, if applicable, the Plan may be amended to
provide Safe Harbor Nonelective Employer Contributions as late as 30 days prior
to the last day of the Plan Year if Eligible Employees receive notice prior to
the beginning of such Plan
ARTICLE IV 50
Year that the Employer may provide Safe Harbor Nonelective Employer
Contributions of at least three percent (3%) of Compensation. If the Employer
does provide for Safe Harbor Nonelective Employer Contributions, the notice
requirements of subparagraph F.4 above shall apply and Eligible Employees must
be given a supplemental notice at least 30 days before the end of the Plan Year
that Safe Harbor Nonelective Employer Contributions of at least three percent
(3%) of Compensation will be made.
7. Safe Harbor Matching Contributions and Safe Harbor Nonelective
Employer Contributions shall not be used as Qualified Nonelective Employer
Contributions or Qualified Matching Contributions.
8. If Safe Harbor Matching Contributions or Safe Harbor
Nonelective Employer Contributions are provided in another defined contribution
plan maintained by the Employer, any Eligible Employee under the plan that
provides for a cash or deferred arrangement must be an Eligible Employee under
the plan that provides for Safe Harbor Matching Contributions or Safe Harbor
Nonelective Employer Contributions. Safe Harbor Matching Contributions and Safe
Harbor Nonelective Employer Contributions cannot be used to satisfy the safe
harbor requirements of Notice 98-52 Section V.B with respect to more than one
plan.
G. Simple 401(k) Plans. If this Plan is a Simple 401(k) Plan, the
Actual Deferral Percentage limitation shall be deemed satisfied provided that
the following additional notice requirements are satisfied:
1. Each Participant may elect, during the 60 day period
immediately preceding each January 1st (and 60 days before the first day an
Employee is first eligible to participate), to increase, decrease, or resume his
or her Elective Contributions.
2. The Committee shall notify each Participant within a
reasonable period of time prior to the 60-day election period that an Employee
can modify his or her election to defer and the Employee's rights to participate
under the Plan. If an Employee becomes eligible after the 60-day election
period, the 60-day election period shall be deemed satisfied if the Employee may
make or modify a salary reduction election during a 60-day period that includes
either the date the Employee becomes eligible to participate or the day before
the Employee's Entry Date.
3. If the Employer maintained this Plan during 1997, prior to
adopting Simple 401(k) Plan provisions, then contributions made prior to the
adoption of Simple 401(k) Plan provisions shall be treated as Simple 401(k)
Contributions only if (i) the Employer adopts the Simple 401(k) Plan provisions
by July 1, 1997, effective as of January 1, 1997; (ii) the salary reduction
contributions for the year made prior to adoption of the amendment do not total
more than $6,000 for any Employee; (iii) the
ARTICLE IV 51
other contributions set forth in Article I are of inherently equal or greater
value than the contributions required under the Plan prior to the amendment; and
(iv) for 1997, the 60-day election period requirement described above is deemed
satisfied if the Employee may make or modify a salary reduction election during
a 60-day election period that begins no later than 30 days after the adoption of
Simple 401(k) Plan provisions but in no event later than July 1, 1997.
4. If this Plan is a newly established 401(k) plan containing
Simple 401(k) Plan provisions as elected in Article I, the Employer may make it
effective as of any date during the Plan Year, but in no event later than
October 1st of the year in which adopted. Except as described in Paragraph G.3
above, an Employer amending an existing 401(k) plan to provide for Simple 401(k)
Plan provisions must make such provisions effective as of the following January
1st.
H. Limitation on Elective Deferrals. The Trust shall not receive any
Elective Deferrals made by an Employee to this Plan and all other plans,
contracts or arrangements of the Employer in any calendar year which exceed
$7,000 ($10,000 for 1999) for the Employee's taxable year beginning in such
calendar year. If this is a Simple 401(k) Plan the limitation is $6,000
(including 1999) and the amount of Elective Contributions must be expressed as a
percentage of Compensation. If Elective Deferrals in excess of the permitted
amounts are mistakenly deposited into the Trust, the correction procedures of
Paragraph M of this Article IV shall apply.
The above dollar limitations shall be adjusted at the same time and
in the same manner as Section 415(d) of the Code, except the base period is the
calendar quarter ending September 30, 1996, and any increase under this
Paragraph H which is not a multiple of $500 shall be rounded to the next lowest
multiple of $500.
I. Reserved.
J. Correction of Excess Contributions.
1. Return of Excess Contributions. If the Committee determines
that for any Plan Year the maximum aggregate Actual Deferral Percentage of
Qualifying Section 401(k) Contributions made by or on behalf of the group
consisting of Highly Compensated Employees has been exceeded, the Committee may
reduce by corrective distribution to the extent necessary the amount of Excess
Contributions made to the group consisting of Highly Compensated Employees to
satisfy the Actual Deferral Percentage limitation. The Committee shall designate
such distributions to Highly Compensated Employees as Excess Contributions and
allowable income thereof which shall be distributed to the appropriate Highly
Compensated Employees after the close of the Plan Year but not later than 12
months after the close of the Plan Year.
ARTICLE IV 52
For Plan Years beginning prior to January 1, 1997, the
determination of corrective distributions shall be made in accordance with this
paragraph. The Committee shall reduce to the extent necessary the amount of the
Excess Contributions for each member of the Highly Compensated Group by reducing
the actual deferral ratios of the Highly Compensated Employees who have the
highest actual deferral ratios to the maximum acceptable level. This is
accomplished by the following reduction. First, the actual deferral ratio of the
Highly Compensated Employee with the highest actual deferral ratio is reduced to
the extent necessary to satisfy the Actual Deferral Percentage limitation or
cause such ratio to equal the actual deferral ratio of the Highly Compensated
Employee with the next highest ratio. Second, this process is repeated until the
Actual Deferral Percentage limitation is satisfied. The amount of Excess
Contributions for each Highly Compensated Employee is equal to the total of
Elective Contributions and other contributions taken into account for the Actual
Deferral Percentage limitation prior to reduction minus the product of the
Employee's actual deferral ratio, after reduction as determined above,
multiplied by his or her Compensation.
2. Application of Family Aggregation Rules. If a Highly
Compensated Employee's actual deferral ratio is determined under the family
aggregation rules, then the reduction of the amount of his or her Excess
Contributions shall be made in accordance with this paragraph. The actual
deferral ratio shall be reduced in accordance with the same leveling method
described in Paragraph J.1 of this Article IV. The resulting Excess
Contributions for the family group shall be allocated among the Family Members
in proportion to the Elective Contributions of each Family Member that are
combined to determine the actual deferral ratio.
For Plan Years beginning after December 31, 1996, the
determination of corrective distributions shall be made as follows:
Step 1. The Committee shall calculate the dollar amount
of Excess Contributions for each affected Highly Compensated Employee in the
same manner as the ratio leveling method described in the second paragraph of
Paragraph J.1 of this Article IV.
Step 2. The Committee shall determine the total of the
dollar amounts calculated in step 1 ("total Excess Contributions").
Step 3. The Elective Contributions of the Highly
Compensated Employee with the highest dollar amount of Elective Contributions
are reduced by the amount required to cause such Highly Compensated Employee's
Elective Contributions to equal the dollar amount of the Elective Contributions
of the Highly Compensated Employee with the next highest dollar amount of
Elective Contributions. This amount is then distributed to the Highly
Compensated Employee
ARTICLE IV 53
with the highest dollar amount of Excess Contributions. However, if a lesser
reduction, when added to the total dollar amount already described under this
step, would equal the total Excess Contributions, the lesser reduction amount is
distributed.
Step 4. If the total amount distributed is less than the
total Excess Contributions, step 3 is repeated.
If the above distributions are made, the cash or deferred
arrangement is treated as meeting the non-discrimination test of Section
401(k)(3) of the Code regardless of whether the Actual Deferral Percentage, if
recalculated after such distributions, would satisfy Section 401(k)(3) of the
Code.
3. Corrections by Additional Contributions. The Employer may in
its sole discretion and subject to the limitation contained in Article V of the
Plan, make additional Qualified Nonelective Employer Contributions or Qualified
Matching Contributions that are treated as Elective Contributions and which in
combination with the Elective Contributions, satisfy the Actual Deferral
Percentage limitation. Such Nonelective Employer Contributions and Qualified
Matching Contributions must be nonforfeitable as of the date made and subject to
the same distribution restrictions that apply to Elective Contributions.
Qualified Nonelective Employer Contributions and Qualified Matching
Contributions which are treated as Elective Contributions must satisfy these
requirements without regard to whether they are actually taken into account as
Elective Contributions. A Qualified Matching Contribution is not treated as
forfeited merely because the contribution to which it relates is an Excess
Deferral, or Excess Contribution thereby causing forfeiture of such Qualified
Matching Contribution.
4. Additional Requirements. Qualified Nonelective Employer
Contributions and Qualified Matching Contributions which are treated as Elective
Contributions must satisfy the following additional requirements:
(a) The Nonelective Employer Contributions, including
Qualified Nonelective Employer Contributions, must satisfy the requirements of
Section 401(a)(4) of the Code and, for Plan Years beginning after December 31,
1993, must satisfy Section 1.401(a)(4)-1(b)(2) of the Treasury Regulations.
(b) The Nonelective Employer Contributions, excluding
Qualified Nonelective Employer Contributions treated as Elective Contributions
for purposes of the Actual Deferral Percentage limitation and Qualified
Nonelective Employer Contributions treated as Matching Contributions for
purposes of the Contribution Percentage limitation, must satisfy the
requirements of Section 401(a)(4) of the Code and, for Plan Years beginning
after December 31, 1993, must satisfy Section 1.401(a)(4)-1(b)(2) of the
Treasury Regulations.
ARTICLE IV 54
(c) Qualified Nonelective Employer Contributions and
Qualified Matching Contributions made for the Plan Year must satisfy the
allocation requirements of Elective Contributions.
(d) For Plan Years beginning after December 31, 1988, the
plan that takes Qualified Nonelective Employer Contributions and Qualified
Matching Contributions into account in determining whether Elective
Contributions satisfy the Actual Deferral Percentage limitation must have the
same Plan Year as the plan or plans to which the Qualified Matching
Contributions and Qualified Nonelective Employer Contributions were made. If the
Plan Year is changed to satisfy this requirement, such contributions may be
taken into account during the short Plan Year if they satisfy the allocation
requirements of Elective Contributions.
(e) If the Employer has elected to apply the prior year
testing method to calculate the Actual Deferral Percentage limitation, Qualified
Matching Contributions or Qualified Nonelective Employer Contributions must be
made no later than twelve (12) months following the last day of the Plan Year
preceding the current Plan Year to satisfy the Actual Deferral Percentage
limitation. If the Employer has elected to apply the current year testing method
to calculate the Actual Deferral Percentage limitation, Qualified Matching
Contributions or Qualified Nonelective Employer Contributions must be made no
later than twelve (12) months following the close of the current Plan Year to
satisfy the Actual Deferral limitation.
5. Recharacterization of Excess Contributions. If Article I
allows for Employee After-Tax Contributions, the Committee may recharacterize
Excess Contributions as Employee After-Tax Contributions. Such recharacterized
contributions shall remain subject to the nonforfeitable requirements and
distribution limitations that apply to Elective Contributions. The Committee
cannot recharacterize any Excess Contributions after 2 1/2 months after the
close of the Plan Year. Further Excess Contributions will not be recharacterized
with respect to a Highly Compensated Employee to the extent that the
recharacterized amounts, in combination with Employee After-Tax Contributions
actually made by the Employee, exceeds a maximum amount of Employee After-Tax
Contributions that the Employee is permitted to make under the Plan in the
absence of Recharacterization determined prior to the application of the
Contribution Percentage limitation. Such recharacterized amounts will be
considered as Annual Additions under the limitations imposed by Section 415 of
the Code and shall be subject to Section 401(m) of the Code. The same leveling
method and family aggregation rules as described with respect to the return of
Excess Contributions to Highly Compensated Employees shall apply to this
corrective procedure.
The amount of Excess Contributions to be recharacterized for a
Plan Year shall not exceed the amount of Elective Contributions made on behalf
of such Highly Compensated Employee.
ARTICLE IV 55
6. Correction of Excess Contributions by Reduction Prior to the
End of the Plan Year. If the Committee determines that the Actual Deferral
Percentage limitation is being exceeded during a Plan Year, the Committee may
suspend the group of Highly Compensated Employees' future Elective Deferrals of
Qualifying 401(k) Contributions for such Plan Year to enable the Plan to satisfy
the Actual Deferral Percentage limitation. The Committee shall give notice to
such Employees of the amount to be suspended.
For Plan Years beginning after December 31, 1996, the
determination of the reduction shall be made either in accordance with the
dollar leveling method used for reduction of Excess Contributions or on a pro
rata basis if elected in Article I.
For Plan Years beginning prior to January 1, 1997, the
determination of the reduction shall be made either in accordance with the same
leveling method and family aggregation rules used for the reduction of Excess
Contributions or on a pro rata basis as elected in Article I.
K. Coordination of Excess Contributions with Excess Deferrals. The
amount of Excess Contributions to be distributed or recharacterized with respect
to Highly Compensated Employees shall be reduced by any Excess Deferrals
previously distributed to such Employee for the Employee's taxable year ending
in such Plan Year.
L. Income Allowable to Excess Contribution. The distribution of Excess
Contributions shall include the income allocated thereto. The income allocable
to Excess Contributions is determined by applying the same method as used for
the correction of Excess Aggregate Contributions described in Paragraph J of
Article X.
M. Correction of Excess Deferrals. Not later than the first April 15th
after the close of the Employee's taxable year, the Employee must notify the
Committee of each Plan under which deferrals were made, how much Excess
Deferrals were received by such plan and each plan may distribute to the
Employee the amount of Excess Deferrals plus any earnings thereof. An Employee
may receive a corrective distribution of Excess Deferrals during the same
taxable year. A corrective distribution may be made only if all of the following
conditions are satisfied:
1. The Employee designates the distribution as an Excess
Deferral. An Employee is deemed to have designated the distribution as an Excess
Deferral to the extent the Employee has Excess Deferrals for the taxable year,
taking into account only Elective Deferrals under this Plan and any other plan
maintained by the Employer.
ARTICLE IV 56
2. The corrective distribution is made after the date in which
the plan received the Excess Deferral.
3. The plan designates the distribution as a distribution of
Excess Deferrals.
N. Income Allowable to Excess Deferrals. The distribution of Excess
Deferrals shall include the income allocated thereto. The income allocable to
Excess Deferrals for the taxable year is determined by applying the same method
as used for correction of Excess Aggregate Contributions described in Paragraph
J of Article X.
O. Coordination of Excess Deferrals with Distribution or
Recharacterization of Excess Contributions. The amount of Excess Deferrals that
may be distributable with respect to an Employee for a taxable year shall be
reduced by any Excess Contributions previously distributed or recharacterized
with respect to such Employee for the Plan Year beginning with or within such
taxable year. In the event of reduction under this Paragraph O, the amount of
Excess Contributions included in the gross income of the Employee and reported
by the Employer as a distribution of Excess Contributions shall be reduced by
the amount of the reduction under this paragraph. The amount of the reduction
under this Paragraph O shall be reported as a distribution of Excess Deferrals.
In no case may an Employee receive from the Plan as a corrective distribution
for a taxable year an Excess Deferral which exceeds the Employee's total
Elective Deferrals under the Plan for the Employee's taxable year.
P. Distribution of Amounts Attributed to Elective Contributions. Except
for the correction of Excess Contributions, Excess Aggregate Contributions and
Excess Deferrals, Elective Contributions, Qualified Nonelective Employer
Contributions, and Qualified Matching Contributions and earnings resulting from
these contributions may not be distributed earlier than upon one (1) of the
following events:
1. The Employee's retirement, death, disability or separation
from service;
2. The termination of the Plan without establishment or
maintenance of another defined contribution plan (other than an employer stock
ownership plan, a simple IRA plan or a simple employer plan);
3. The Employee's attainment of age 59 1/2;
4. Distributions on account of hardship. For Plan Years after
December 31, 1988 only amounts deferred by the Employee as Elective
Contributions, disregarding any gains or losses, may be distributed; provided,
however, that in no event shall the amount of such hardship distribution result
in a value less than zero (0)
ARTICLE IV 57
in a Participant's Elective Contribution Account determined as of the
immediately preceding Valuation Date;
5. The sale or disposition by a corporation to an unrelated
corporation, which does not maintain the Plan, of substantially all of the
assets used in a trade or business but only with respect to Employees who
continue employment with the acquiring corporation; and
6. The sale or other dispositions by a corporation of its
interest in a subsidiary to an unrelated corporate entity which does not
maintain the Plan, but only with respect to Employees who continue employment
with a subsidiary.
For purposes of (5) and (6) above, distributions may also be made on
account of certain dispositions of assets or subsidiaries other than sales.
These distributions on account of dispositions or sales may be made only if the
transferor corporation continues to maintain the Plan after disposition. The
distribution must be a lump-sum distribution in order for the exceptions for
disposition of assets or subsidiaries or for termination of the Plan to apply.
Lump-sum, for these purposes, is a lump-sum under Section 402(d)(4) of the Code
but without regard to (i) the attainment of age 59 1/2; (ii) the election
requirement; or (iii) the minimum period of a plan participation requirement.
These lump-sum rules apply to distributions occurring after March
31, 1988.
Q. Hardship Withdrawals. If allowed under Article I of this Plan, the
Participant may apply for a hardship withdrawal of his or her Elective
Contributions or Nonelective Employer Contributions, if applicable, by filing a
written application with the Committee. In granting a hardship withdrawal, the
Committee shall follow nondiscriminatory and objective standards in determining
whether a Participant is entitled to a hardship withdrawal.
1. General Rule. Any hardship withdrawal may only be made if it
is necessary to satisfy an immediate and heavy financial need of the
Participant. A hardship withdrawal shall not exceed the amount necessary to
relieve the need nor shall such hardship withdrawal be made to the extent the
need may be satisfied from other financial resources reasonably available to the
Employee.
2. Determination of Financial Need. A withdrawal on account of
hardship may be treated as necessary to satisfy a financial need if the
Committee reasonably relies upon the Employee's representation that the need
cannot be relieved by:
ARTICLE IV 58
(a) Reimbursement or compensation by insurance or otherwise;
(b) Reasonable liquidation of the Employee's assets to the
extent such liquidation would not itself cause any immediate and heavy financial
need;
(c) Cessation of Elective Contributions or Employee
Contributions under the Plans of the Employer; or
(d) Other distributions or nontaxable loans from plans
maintained by the Employer, or by any other Employer, or by borrowing from
commercial sources on reasonable commercial terms. An Employee's resources shall
be deemed to include those assets of his or her Spouse and minor children that
are reasonably available to the Employee.
3. Determination of Necessity for Hardship Withdrawal. A hardship
withdrawal will be deemed necessary to satisfy the financial need if it meets
the following conditions:
(a) The hardship withdrawal is not in excess of the amount
of the immediate and heavy financial need of the Employee. The amount of an
immediate and heavy financial need may include amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from such hardship withdrawal.
(b) The Employee has obtained all distributions, other than
hardship withdrawals of Elective Contributions, and all nontaxable loans
currently available under all plans maintained by the Employer.
(c) The Employee's Elective Contributions and Employee
After-Tax Contributions, other than mandatory Employee contributions made to a
defined benefit plan, will be suspended for at least 12 months after receipt of
the hardship withdrawal under this Plan and all other qualified and
non-qualified plans of deferred compensation, including the cash and deferred
arrangement that is part of a cafeteria plan and excluding any health or welfare
plans, including one that is part of a cafeteria plan, maintained by the
Employer.
(d) The Employee may not make Elective Contributions and
Employee After-Tax Contributions, other than mandatory Employee contributions
made to a defined benefit plan, to this Plan and all other qualified and
non-qualified plans of deferred compensation, including the cash and deferred
arrangement that is part of a cafeteria plan and excluding any health or welfare
plans, including one that is part of a cafeteria plan, maintained by the
Employer for the Employee's taxable year immediately following the taxable year
of the hardship withdrawal in excess of the applicable limit
ARTICLE IV 59
under Section 402(g) of the Code for such next taxable year less the amount of
such Elective Contributions for the taxable year of the hardship withdrawal.
With respect to hardship withdrawals made on or before March 31, 1989, operation
in accordance with the IRS Regulations proposed on November 10, 1981 is a
reasonable interpretation of Section 401(k) of the Code.
R. Aggregation of Employer's Plans. Elective Contributions that are
made under two (2) or more plans of the Employer that are aggregated for
purposes of Section 401(a)(4) or Section 410(b) of the Code, other than Section
410(b)(2)(A)(ii) of the Code, are to be treated as made under a single plan and
if two (2) or more plans are permissibly aggregated for purposes of Section
401(k) of the Code, the aggregated plans must satisfy Sections 401(a)(4), 401(k)
and 410(b) of the Code as though such aggregated plans were a single plan.
Whenever a Highly Compensated Employee is eligible under two (2) or more plans
of the Employer which are subject to Section 401(k) of the Code, in calculating
the Actual Deferral Percentage limitation, the actual deferral ratio of such
Highly Compensated Employee will be determined by treating all such plans in
which such Highly Compensated Employee is an Eligible Participant as a single
plan.
Except for certain plans in existence on November 1, 1977, for Plan
Years beginning after December 31, 1988, contributions allocated under a plan
described in Section 4975(e)(7) of the Code cannot be combined with
contributions or allocations under any plan not described in Section 4975(e)(7)
of the Code including required aggregation of a Highly Compensated Employee.
However, a plan described in Section 4975(e)(7) of the Code may provide for
contributions as described in Section 401(k)(12) of the Code. Mandatory
disaggregation shall also apply to plans described under Sections
1.401(k)-1(b)(3)(ii)(B) and 1.401(k)-1(g)(11)(iii) of the Treasury Regulations.
However, for Plan Years beginning after December 31, 1990, for purposes of the
average benefit percentage test under Section 410(b)(2)(A)(ii) of the Code, a
plan described in Section 4975(e)(7) of the Code shall be aggregated. For Plan
Years beginning before January 1, 1991, the Employer shall have the option to
aggregate such plans for purposes of the average benefit percentage test. Plans
that are to be aggregated may only be aggregated if they have the same plan
year.
The rules regarding aggregation and disaggregation of cash or
deferred arrangements and plans shall also apply for purposes of Sections
401(k)(12) and 401(m)(11) of the Code.
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ARTICLE IV 60
V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
A. Maintenance of Accounts. The Committee shall, where applicable,
establish and maintain a Nonelective Employer Contribution Account, Elective
Contribution Account, Employee After-Tax Contribution Account, Qualified
Nonelective Employer Contribution Account, Matching Contribution Account,
Qualified Matching Contribution Account, Rollover Contribution Account, Safe
Harbor Matching Contribution Account, Safe Harbor Nonelective Employer
Contribution Account, Simple 401(k) Account and/or Transferred Benefits Account
in the name of each Participant.
B. Valuation of Trust.
1. Date for Valuation. As soon as administratively feasible after
any Valuation Date, the Trustee shall value the Trust assets and liabilities on
the basis of fair market values as of such Valuation Date.
2. Instructions for Valuation. If the Trustee, in making such
valuations, shall determine that the Trust consists, in whole or in part, of
property not traded freely on a recognized market, or that information necessary
to ascertain the fair market value of any Trust assets or liabilities is not
readily available to the Trustee, the Trustee may request the Committee to
instruct the Trustee as to such fair market value for all purposes under the
Plan; and in such event the fair market value determined by the Committee shall
be binding and conclusive. If the Committee fails or refuses to instruct the
Trustee as to such fair market value within a reasonable time after receipt of
the Trustee's request, the Trustee shall take such action as it deems necessary
or advisable to ascertain such fair market value, including the retention of
such counsel and independent appraisers as it considers necessary; and in such
event the fair market value determined by the Trustee shall be binding and
conclusive. The expenses incurred in retaining such counsel and/or independent
appraisers shall be paid by the Trust.
C. Allocation of Trust Earnings.
1. General. As of each Valuation Date and prior to the allocation
of Employer contributions, Employee After-Tax Contributions and, if applicable,
forfeitures for the Plan Year, the Committee shall allocate the increment of
Trust net income to or charge Trust net losses against, as the case may be, the
respective Accounts of the Participants in proportion to the balances (minus any
distributions made to the Participant and any forfeitures declared in such
Account after the immediately preceding Valuation Date) of such Accounts as of
the immediately preceding Valuation Date.
2. Segregated and Directed Accounts. Notwithstanding the
foregoing, segregated Accounts of a Participant held in accordance with the
provisions of
ARTICLE V 61
Paragraph B.4(a) of Article VII and Paragraph B of Article XII, if provided for
in Article I, shall be valued separately on each Valuation Date, and the
increment of Trust net income shall be allocated to or Trust net loss shall be
charged against, as the case may be, such Accounts on a segregated basis.
3. Elective Contribution Accounts. Unless otherwise elected in
Paragraph OO, Elective Contributions made by a Participant and deposited
periodically throughout a Plan Year to his or her Elective Contribution Account
shall have allocated to them a proportionate share of Trust net income or net
losses attributable to all such Elective Contribution Accounts on the basis of
one-half (1/2) of the total amount of periodic payment Elective Contributions
made by all Participants and deposited during the Plan Year determined as if
such Elective Contributions were deposited on the first day of the Plan Year.
For purposes of this Paragraph C.3, periodic payments shall mean substantially
equal payments made throughout the Plan Year not less frequently than quarterly.
A single-sum deposit made by a Participant as an Elective Contribution to his or
her Elective Contribution Account during the first quarter of the Plan Year will
receive an allocation of Trust net income and net losses for the entire Plan
Year as if such deposit were made on the first day of the Plan Year. Lump-sum
deposits made in the second, third or fourth quarter of a Plan Year shall not be
entitled to receive an allocation of Trust net income or net losses. The
frequency or method with which Trust net income and net losses are allocated to
the Elective Contribution Accounts may be changed in the discretion of the
Committee, but only in a uniform and nondiscriminatory manner.
D. Allocation to Contribution Accounts.
1. General. Amounts contributed by the Employer for any Plan Year
(and, if applicable, any previously unallocated forfeitures) shall be allocated
to the appropriate Accounts in accordance with the manner provided in Article I
as of each Anniversary Date.
If this Plan provides for permitted disparity, then for Plan
Years beginning on or after January 1, 1995, the number of years credited to the
Participant for allocation or accrual purposes under this Plan, any other
qualified plan or simplified employee pension plan (whether or not terminated)
ever maintained by the Employer shall be limited to a total cumulation of
permitted disparity of 35 years. For purposes of determining the participant's
cumulative permitted disparity limit, all years ending in the same calendar year
are treated as the same year. If the Participant has not benefited under a
defined benefit or target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no cumulative disparity limit.
2. Allocations on Retirement, Total Disability or Death. An
individual whose participation ceased during the year because of termination of
employment on or
ARTICLE V 62
after Normal Retirement Age, death or Total Disability may be entitled to an
allocation of Employer contributions without regard to service or employment
date requirements as provided in Article I.
3. Allocation of Elective, Employee After-Tax, Safe Harbor
Matching, Safe Harbor Nonelective Employer, and Simple 401(k) Contributions.
Allocation of Elective Contributions, Employee After-Tax Contributions, Safe
Harbor Matching Contributions, Safe Harbor Nonelective Employer Contributions
and/or Simple 401(k) Contributions shall be allocated to those Eligible
Participants described in Article I of the Plan without regard to service or
employment date requirements provided in Article I in regard to the allocation
requirements of other Employer contributions.
4. Suspension of Benefits if Participant Changes Employee Status.
If a Participant continues in the employ of the Employer, but changes his or her
employment status to a class of employees that is ineligible for participation,
such termination of participation shall not constitute a termination of
employment for purposes of this Plan. An otherwise eligible Participant shall
accrue benefits in the Plan for the Plan Year in which he or she changes his or
her employment status based on his or her Compensation received before the
change in status. However, such Inactive Participant shall not accrue further
benefits under the Plan until the date he or she again becomes a Participant;
provided, however, that Compensation received prior to his or her again becoming
a Participant shall be disregarded.
5. Amendments to The Plan - Preservation of Accrued Benefit.
Notwithstanding anything to the contrary contained in this Plan, no amendment to
the Plan shall be effective to the extent that it has the effect of (i)
decreasing a Participant's Accrued Benefit derived from Employer contributions;
or (ii) except as provided by Treasury Regulations, eliminating an optional form
of benefit, with respect to benefits attributable to Years of Service before the
amendment; provided, however, that a Participant's Accrued Benefit may be
reduced to the extent required as a condition of meeting the standards for
qualification of the Plan. Furthermore, no amendment to the Plan shall have the
effect of decreasing a Participant's vested interest in his or her Accrued
Benefit determined without regard to such amendment as of the later of the date
such amendment was adopted, or becomes effective.
E. Limitation on Allocation of Employer Contributions and Forfeitures.
1. Dollar Amount and Percentage Limitations. The Annual Addition
to a Participant's Employer Contribution Account and Employee After-Tax
Contribution Account shall not exceed the lesser of:
(a) The Defined Contribution Dollar Limitation; or
ARTICLE V 63
(b) 25% of the Participant's Section 415 Compensation for
the Limitation Year; provided, however, that this compensation limitation shall
not apply to:
(i) Any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after separation from service which
is otherwise treated as an Annual Addition; or
(ii) Any amount otherwise treated as an Annual Addition
under Section 415(l)(1) of the Code.
2. Multiple Defined Contribution Plans and Welfare Benefit Fund
Limitation. If, in a Plan Year, a Participant also participates in a defined
contribution plan or a welfare benefit fund maintained by the Employer or by
another member of the Controlled Group, the limitations set forth in this
Article V with respect to such Participant shall apply as if the Annual
Additions accrued to such Participant under all defined contribution plans and
welfare benefit funds in which the Participant has participated were derived
from one Plan.
3. Rule of 1.0. Notwithstanding anything to the contrary
contained in this Plan, the following additional limitations shall apply to any
Participant who is or was covered by a defined benefit pension plan, whether or
not terminated, maintained by the Employer (or a member of a Controlled Group):
(i) the amount of the Annual Addition to such Participant's Employer
Contribution Account shall be reduced by the Committee to the extent necessary
to prevent the sum of the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction for such Plan Year from exceeding 1.0 (profit sharing
plans shall be reduced first, then other defined contribution plans and,
finally, defined benefit pension plan(s) unless Article I designates the defined
benefit pension plan(s) to be reduced first); and (ii) for the purpose of
applying the limitation of this Rule of 1.0, the Defined Benefit Plan Fraction
and the Defined Contribution Plan Fraction shall be applied in a manner
consistent with the provisions of Section 415 of the Code and the Treasury
Regulations promulgated thereunder; provided, however, that for any Plan Year
ending after December 31, 1982, the Employer may elect to have the transitional
rule of Section 415(e)(6) of the Code applied in computing the Defined
Contribution Plan Fraction; provided, further, however, that if the Plan
satisfied the requirements of Section 415 of the Code for the last Plan Year
beginning before January 1,1983, the Plan shall satisfy this Paragraph E.3 to
the extent necessary by complying with Treasury Regulations promulgated under
Section 235(g)(3) of TEFRA.
If the Plan satisfied the applicable requirements of Section
415 of the Code as in effect for all Limitation Years beginning before January
1, 1987, an amount shall be subtracted from the numerator of the Defined
Contribution Plan Fraction (not exceeding such numerator) as prescribed by the
Secretary of the Treasury so that the sum of the Defined Benefit Plan Fraction
and Defined Contribution Plan
ARTICLE V 64
Fraction computed under Section 415(e)(1) of the Code does not exceed 1.0 for
such Limitation Year.
For Limitation Years beginning after December 31, 1999, the
Rule of 1.0 described above shall no longer apply.
F. Allocation Priorities if Limitations Exceeded. If the Annual
Addition for a Participant is exceeded due to the allocation of forfeitures, a
reasonable error in estimating a Participant's Compensation, or a reasonable
error in determining the amount of Elective Deferrals with respect to any Plan
Year, then compliance with such limitation shall be accomplished as follows.
First, the amount of the Participant's Employee After-Tax Contributions for that
Plan Year which were included in the Annual Addition shall be refunded to him or
her; second, any Elective Deferrals shall be refunded to the Participant to the
extent the distribution would reduce the excess amount in the Participant's
Account; third, the excess of Employer contributions which cannot be allocated
to any Participant for such Plan Year shall either be (i) allocated to the
remaining Participants' Accounts with any remaining unallocable Annual Additions
held in a suspense account to reduce Employer Contributions for the subsequent
Limitation Year; or (ii) held in suspense accounts and applied to reduce future
Employer contributions during the next Limitation Year, as elected in Article I.
G. Key Man Insurance Proceeds. Any proceeds of key man insurance
received by the Trust during any Plan Year shall be allocated to the Employer
Contribution Accounts of the Participants who are otherwise eligible to receive
an allocation of Employer contributions on the Anniversary Date of the Plan Year
in which the insured died. Such proceeds shall be allocated to each Participant
in the ratio that each Participant's Employer Contribution Account as of the
first day of the Plan Year in which the proceeds are received bears to the value
of all such Participants' Employer Contribution Accounts. The allocation of such
amounts shall be treated as an investment gain of the Trust.
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ARTICLE V 65
VI. VESTING AND BENEFIT ENTITLEMENT
A. Vesting. The Accrued Benefit credited to any Participant shall vest
in him or her as follows:
1. Full Vesting. A Participant's Accrued Benefit shall be fully
vested at his or her Normal Retirement Age. A Participant will become fully
vested no later than the later of the Participant's 65th birthday or the fifth
anniversary commencing the participation under the Plan. Such Accrued Benefit
shall also be fully vested upon a complete discontinuance of Employer
Contributions or complete or partial termination of the Plan to the extent
provided in Paragraph B of Article XIV.
2. Qualifying Section 401(k) Contributions. A Participant shall
be fully vested in his or her Elective Contribution, Qualifying Matching
Contribution and Qualifying Nonelective Contribution Accounts at all times.
3. Safe Harbor Contributions. A Participant shall be fully vested
in his or her Safe Harbor Matching Contribution and Safe Harbor Nonelection
Employer Contribution Accounts at all times.
4. Simple 401(k) Contributions. A Participant shall be fully
vested in his or her Simple 401(k) Account at all times.
5. Partial Vesting. The Nonelective Employer Contributions and
Matching Contributions of a Participant whose employment terminates, or who
suffers a Break-in-Service prior to his or her Normal Retirement Age for reasons
other than death or Total Disability, shall vest in him or her in accordance
with the vesting provisions contained in Article I.
6. Vesting with the Controlled Group. If the Employer is a member
of a Controlled Group, then Vesting credit shall be granted to an Employee for
each Year of Service completed with the Employer and each other member of the
Controlled Group.
B. Forfeitures. Non-vested Accrued Benefits shall be forfeited in
accordance with the following provisions:
1. Cash-Out of $5,000 or Less. Subject to Paragraph B.3 of this
Article VI, effective for Plan Years beginning after August 5, 1997, a
Participant who terminates employment with the Employer in any Plan Year with a
vested Accrued Benefit equal to or less than $5,000, will be paid a distribution
of the value of his or her entire vested Accrued Benefit as soon as
administratively feasible after the event elected in Article I and the
non-vested Accrued Benefit will be immediately forfeited
ARTICLE VI 66
unless a later date for the forfeiture of non-vested Accrued Benefits is elected
in Article I. For purposes of this Paragraph B.1, if the value of a
Participant's vested Accrued Benefit is zero (0), the Participant shall be
deemed to have received a distribution of such zero (0) vested Accrued Benefit
immediately upon employment termination or, if later, at the time the forfeiture
occurs as elected in Article I.
2. Cash-Out of More Than $5,000. Subject to Paragraph B.3 of this
Article VI, effective for Plan Years beginning after August 5, 1997, a
Participant who terminates employment with the Employer with a vested Accrued
Benefit greater than $5,000, may elect to receive the entire value of his or her
vested Accrued Benefit as soon as administratively feasible after the event
elected in Article I, and the non-vested Accrued Benefit will be immediately
forfeited unless a later date for the forfeiture of non-vested Accrued Benefits
is elected in Article I.
3. $3,500 Cash-Out. If and to the extent elected in Article I,
the involuntary cash-out limit of $5,000 described above shall be $3,500.
4. Partial Cash-Outs of Vested Benefits. If the Participant
receives a distribution of less than his or her entire vested Accrued Benefit
during a Plan Year, the portion of the non-vested Accrued Benefit that will be
immediately forfeited (unless Article I does not provide for a forfeiture of a
partial cash-out distribution or a later date for the forfeiture of non-vested
Accrued Benefits is elected in Article I) is the total non-vested Accrued
Benefit multiplied by a fraction, the numerator of which is the amount of the
vested Accrued Benefit that was distributed and the denominator of which is the
total vested Accrued Benefit.
5. Rehire After Cash-Out. If a Participant receives a
distribution pursuant to Paragraphs B.1, B.2, or B.3 of this Article VI, resumes
employment covered under this Plan and, if required by Article I, repays to the
Plan the full amount distributed to the Participant before the earlier of five
(5) years after the first date on which the Participant is subsequently
re-employed by the Employer, or the date on which the Participant incurs five
(5) consecutive one-year Breaks-in-Service following the date of the previous
distribution, then the amount that was forfeited shall be restored. If a
terminated Participant who had no vested Accrued Benefit and was deemed to have
received a distribution later resumes covered employment before the date the
Participant incurs five (5) consecutive one-year Breaks-in-Service, the amount
that was previously forfeited by such Participant will be restored to his or her
account.
6. Delayed Forfeiture. If the Employer elects in Article I to
delay forfeiture of non-vested Accrued Benefits until after the Plan Year of
distribution, the separate account rule in Paragraph C of this Article VI shall
apply until the forfeiture actually occurs. If the forfeiture occurs prior to
five (5) consecutive one-year Breaks-in-
ARTICLE VI 67
Service, then the above rules of this Paragraph B will apply after Paragraph C
of this Article VI no longer applies.
7. Separate Account on In-Service Distribution. If this Plan
allows for a distribution on account of hardship or other in-service
distributions at any time when a Participant has a non-forfeitable right to less
than 100% of the Accrued Benefit, and the Participant may increase the
non-forfeitable percentage in his or her Account, a separate account as provided
in Paragraph C of this Article VI will be established for the non-vested portion
of the Accrued Benefit of the Participant who receives an in-service
distribution.
8. Accumulated Deductible Contributions. For Plan Years beginning
after December 31, 1988, a Participant's vested Accrued Benefit shall include
accumulated deductible employee contributions within the meaning of Section
72(o)(5)(B) of the Code for purposes of the cash-out provisions of this Article
VI.
C. Re-Vesting in Forfeitures Upon Re-Employment. If a Participant
receives a distribution of his or her vested Accrued Benefit at a time when such
Participant's vested interest is less than 100% and if, at the time of payment
to the Participant, the Participant's non-vested benefit has not been forfeited,
a separate account shall be established for the non-vested portion of the
Participant's interest in the Plan as of the time of the distribution, and if he
or she returns to the employ of the Employer prior to the time he or she suffers
five (5) consecutive one-year Breaks-in-Service or an earlier forfeitable event
as elected in Article I, then at any "Relevant Time" the Participant's vested
portion of the separate account shall be an amount ("X") determined by the
formula X = P(AB + D) - D or if elected in Article I determined by the formula
X=P(AB+(RxD))-(RxD). For purposes of applying either formula, P is the vested
percentage at the Relevant Time; AB is the account balance at the Relevant Time;
D is the amount of the distribution; and R is the ratio of the account balance
at the Relevant Time to the account balance after distribution. If a Participant
returns to the employ of the Employer prior to incurring five (5) consecutive
one-year Breaks-in-Service, or an earlier forfeitable event, he or she shall
continue on the vesting schedule set forth in Paragraph A.5 of this Article VI
as if he or she had not left, and he or she shall be a Participant as of his or
her date of rehire.
D. Limitation on Vesting Upon Re-Employment. If a terminated
Participant is re-employed by the Employer, then, except as provided for in this
Article VI, all of the Participant's Years of Service before his or her
re-employment shall be considered as Years of Service after his or her
re-employment for the purpose of determining the Participant's Accrued Benefit
under the Plan derived from Employer contributions allocated to the Participant
subsequent to his or her date of re-employment.
ARTICLE VI 68
E. Vesting Upon Change of Employment Status. If a Participant becomes
an Inactive Participant, his or her Accrued Benefit shall continue to vest as
long as he or she is an Employee of the Employer or its Controlled Group and has
not incurred a Break-in-Service.
F. Vested Interest Not Distributed. If a terminated Participant has not
received a distribution or a deemed distribution of his or her vested Accrued
Benefit, then his or her Accrued Benefit shall be credited with its share of
Trust net earnings, gains, or losses and changes in the fair market value of the
Trust assets through the Valuation Date next preceding actual distribution and
forfeitures, if any.
G. Break-in-Service While Still Employed. If a Participant incurs a
Break-in-Service but does not terminate employment with the Employer, his or her
Accrued Benefit shall remain in the Trust and shall be credited with its share
of Trust net earnings, gains, or losses and changes in the fair market value
through the Valuation Date next preceding distribution and forfeitures, if any.
H. Effect of Break-in-Service - Vested Participant. If a Participant
has five (5) consecutive one-year Breaks-in-Service, he or she shall not have
credited to him or her Years of Service accrued subsequent to such
Break-in-Service for purposes of determining his or her vested interest in his
or her Accrued Benefit derived from Employer contributions credited prior to
such Break-in-Service.
I. Reserved.
J. Effect of Break-in-Service - Non-Vested Participant. If a
Participant does not have a vested interest in any portion of his or her Accrued
Benefit at the time a Break-in-Service occurs, Years of Service prior to the
Break-in-Service shall not be taken into account in determining the
Participant's vested interest in his or her Accrued Benefit if the number of
consecutive one-year Breaks-in-Service equals or exceeds the greater of five (5)
or the aggregate number of Years of Service prior to the Break-in-Service.
If a former Participant has five (5) or more consecutive one-year
Breaks-in-Service, his or her Years of Service prior to such Breaks-in-Service
shall be taken into account in determining the former Participant's vested
interest in his or her Accrued benefit only if either:
1. Such former Participant had a vested interest in his or her
Accrued Benefit at the time of his or her termination of employment; or
ARTICLE VI 69
2. Upon his or her re-employment, the number of consecutive
one-year Breaks-in-Service is less than the number of Years of Service completed
prior to the Break-in-Service.
Separate Accounts shall be maintained for the Participant's
pre-Break and post-Break Accrued Benefit and both Accounts shall share in the
allocation of Trust earnings and losses as provided in Article V of the Plan.
With respect to any former Participant whose prior service is
not disregarded under the break-in-service rules in effect prior to the first
Plan Year beginning after December 31, 1984, whether the Plan may subsequently
disregard the years of service is governed by the provisions of this Paragraph
J.
K. Limitation on Right to Amend Vesting Schedule. Any amendment
changing the vesting schedule shall:
1. Not cause any Participant's vested interest in such
Participant's Accrued Benefit to be less than such Participant's vested interest
on the day before such amendment becomes effective; and
2. Permit any Participant having at least three (3) Years of
Service the option to elect, irrevocably, within a reasonable period after the
adoption of such amendment, to have such Participant's vested interest
determined without regard to said amendment (that is, in accordance with the
vesting schedule in effect prior to such amendment). The election period shall
begin on the date the amendment is adopted and end not earlier than 60 days
after the latest of (i) the adoption date; (ii) the effective date; or (iii) the
date written notice of the right of election is given to the Participant.
3. If a Participant does not elect a vesting schedule, then he or
she will vest in accordance with the most favorable vesting schedule.
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ARTICLE VI 70
VII. DISTRIBUTION OF BENEFITS
A. Definitions.
1. "Annuity Starting Date" means the first day of the first
period for which an amount is payable as an annuity to a Participant, or in the
case of a benefit not payable in the form of an annuity, the first day on which
all events have occurred which entitle the Participant to a benefit. For
purposes of the preceding sentence, the first day of the first period for which
a benefit is to be received on account of separation from service by reason of
disability shall be treated as the Annuity Starting Date only if such disability
benefit is not an auxiliary benefit.
2. "Election Period" means, with respect to a Qualified Joint and
Survivor Annuity, the 90-day period ending on the Annuity Starting Date. With
respect to a Qualified Preretirement Survivor Annuity, Election Period means the
period beginning on the first day of the Plan Year in which Participant attains
age 35 and ending on the date of the Participant's death. If a Participant
separates from service prior to age 35, the Election Period shall begin on the
date of separation from service with respect to benefits accrued as of that
date.
A Participant who has not attained age 35 as of the end of any
Plan Year may make a special Waiver Election to waive the Qualified
Preretirement Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which the Participant
will attain age 35. Such election will not be valid unless the Participant
receives a written explanation of the Qualified Preretirement Survivor Annuity.
The Qualified Preretirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the Participant attains
age 35. Any new Waiver Election on or after such date shall be subject to the
full requirements of this Article VII.
3. "Qualified Joint and Survivor Annuity" means, with respect to
a married Participant, an immediate annuity for the life of the Participant with
a survivor annuity for the life of his or her Spouse which is 50%, or a greater
percentage as elected in Article I, of the amount of the annuity paid for the
joint lives of the Participant and his or her Spouse and which is the actuarial
equivalent of a single annuity for the life of the Participant.
With respect to an unmarried Participant, a Qualified Joint
and Survivor Annuity means an annuity for the life of the Participant.
4. "Qualified Preretirement Survivor Annuity" means an immediate
annuity for the life of the Participant's Spouse, the payment under which is
equal to 50%, or a greater percentage as elected in Article I, of the sum of the
Participant's
ARTICLE VII 71
Accrued Benefit and any insurance proceeds payable upon death of the
Participant; any security interest held by the Plan by reason of an outstanding
loan to the Participant shall be taken into account in determining the amount of
the Qualified Preretirement Survivor Annuity.
5. "Spouse" or "Surviving Spouse" means a person who has been
married to the Participant throughout the one-year period (unless otherwise
elected in Article I) ending on the earlier of the date of the Participant's
death or such Participant's Annuity Starting Date; provided, however, that a
former Spouse shall be treated as the Spouse or Surviving Spouse to the extent
required under a Qualified Domestic Relations Order. The one-year marriage
requirement does not apply to the payment of a Qualified Joint and Survivor
Annuity.
6. "Transferred Benefits" mean the benefits of a Participant
derived from another qualified plan that are involuntarily transferred to this
Plan subject to the requirements of Section 414(l) of the Code and, where
applicable, the annuity and survivor annuity requirements of Sections 401(a)(11)
and 417 of the Code. A Participant shall vest in his or her Transferred Benefits
Account in accordance with Article I, but subject to the vesting requirements of
Section 411(a)(10) of the Code. A rollover and voluntary transfer described in
Q&A 3 of Section 1.411(d)-4 of the Treasury Regulations will not be deemed a
transfer of benefits.
7. "Waiver Election" means a written election by a Participant
during the Election Period to receive the payment of the Participant's vested
Accrued Benefit in a manner other than a Qualified Joint and Survivor Annuity or
a Qualified Preretirement Survivor Annuity. A Waiver Election must be consented
to by the Participant's Spouse. The Spouse's consent must acknowledge the effect
of the waiver and must be witnessed by either the Plan representative or a
notary public as required at the sole discretion of the Committee. The Spouse's
consent will be deemed made if the Participant establishes to the satisfaction
of the Committee that (i) there is no Spouse; or (ii) the Spouse cannot be
located. If the Spouse is legally incompetent to give consent, the Spouse's
legal guardian, even if the guardian is the Participant, may give consent. Also,
if the Participant is legally separated or the Participant has been abandoned
(within the meaning of local law) and the Participant has a court order to such
effect, spousal consent is not required unless a Qualified Domestic Relations
Order provides otherwise. Similar rules apply to a plan subject to the
requirements of Section 401(a)(11)(B)(iii)(l) of the Code. Any consent made or
deemed made hereunder shall be valid only with respect to the Spouse who signs,
or is deemed to have signed, the consent. The Waiver Election of a Qualified
Preretirement Survivor Annuity shall identify the Beneficiary or class of
Beneficiaries or any contingent Beneficiaries. The Waiver Election of a
Qualified Joint and Survivor Annuity shall identify the Beneficiary or class of
Beneficiaries or contingent Beneficiary, if applicable, and the method of
payment. Any change in the Waiver Election shall require a new
ARTICLE VII 72
spousal consent, unless the original consent of the Spouse expressly permits
designations by the Participant without any requirement of further consent by
the Spouse and acknowledges that the more restrictive consent could have been
given. A revocation of a prior waiver may be made by a Participant without the
consent of the Spouse at any time before the Annuity Starting Date. The
Participant may revoke a Waiver Election at any time, but any new Waiver
Election must comply with the requirements of this Paragraph A.7. A former
Spouse's consent to a Waiver Election shall not be binding on a new Spouse.
B. Distribution With Annuity Option - Other Than Death. If this Plan
provides for an annuity option as selected in Article I, the Committee shall
direct the Trustee to distribute to a Participant the amount of his or her
vested Accrued Benefit as a result of the Participant's termination of
employment, including (i) termination of employment for any reason other than
death; (ii) Total Disability before Normal Retirement Age; or (iii) retirement
on or after Normal Retirement Age in accordance with this Paragraph B. Such
Accrued Benefit shall be determined as of the Valuation Date preceding the date
of the Participant's distribution.
1. Payment of Qualified Joint and Survivor Annuity. A Participant
shall automatically receive his or her vested Accrued Benefit in the form of a
Qualified Joint and Survivor Annuity unless the Participant makes a Waiver
Election during the applicable Election Period.
2. Notice Requirements. The Committee shall provide to each
Participant within a period of time of no less than 30 days and no more than 90
days prior to the Annuity Starting Date, a written explanation of (i) the terms
and conditions of a Qualified Joint and Survivor Annuity; (ii) the Participant's
right to make, and the effect of, a Waiver Election waiving the Qualified Joint
and Survivor form of benefit; (iii) the rights of a Spouse to consent to any
Waiver Election which waives his or her rights to such form of Annuity; and (iv)
the right to make, and the effect of, a revocation of a previously made Waiver
Election.
The Participant shall be furnished with a general description
of all the eligibility conditions and other material features of the optional
forms of benefits and information explaining the relative values of the various
optional forms of benefits that are available under the terms of the Plan in a
like manner and within the time period as stated in the preceding paragraph. The
requirement to provide relative values of the optional forms of benefits shall
only apply to plans that offer a life annuity form of payment. Written consent
of the Participant to a distribution must be made after the Participant receives
such notice and must not be made more than 90 days before the Annuity Starting
Date.
ARTICLE VII 73
(a) If a distribution is one to which Sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(i) The Committee 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
(ii) The Participant, after receiving the notice,
affirmatively elects a distribution.
(b) If a distribution is one to which Sections 401(a)(11)
and 417 of the Code apply, such distribution may commence less than 30 days
after the notice is given provided that:
(i) The Committee provides information to the
Participant clearly indicating that the Participant has a right to at least 30
days to consider whether to waive the Qualified Joint and Survivor Annuity and
consent to a form of distribution other than a Qualified Joint and Survivor
Annuity;
(ii) The Participant is permitted to revoke an
affirmative distribution election at least until the Annuity Starting Date, or
if later, at any time prior to the expiration of the seven (7) day period that
begins the day after the explanation of the Qualified Joint and Survivor Annuity
is provided to the Participant;
(iii) The Annuity Starting Date is after the date that
the explanation of the Qualified Joint and Survivor Annuity is provided to the
Participant. However, for distributions made after December 31, 1996, the
Annuity Starting Date may be before the date that the written explanation is
given to the Participant, provided that the distribution does not commence until
at least 30 days after such written explanation is provided to such Participant;
and
(iv) Distribution in accordance with the affirmative
election does not commence before the expiration of the seven (7) day period
that begins the day after the explanation of the Qualified Joint and Survivor
Annuity is provided to the Participant.
3. Alternate Forms of Benefit Payments. During any time that a
Waiver Election is in effect, the Participant shall elect to have his or her
Accrued Benefit distributable in one (1) of the alternate forms of payment
described in subparagraphs (a) through (e) of this Paragraph B.3 as permitted in
Article I. The Committee shall instruct
ARTICLE VII 74
the Trustee to distribute the benefits in such form. If a Waiver Election is in
effect when benefits are distributed, but no method of distribution is otherwise
selected by the Participant, then the Committee shall make reasonable efforts to
obtain an election of a method of distribution from such Participant. If the
Committee is unable to obtain an election for a method of distribution from such
Participant, then the benefits shall be deferred until the later of Normal
Retirement Age or age 62, at which time the benefits shall be paid in the form
of a Qualified Joint and Survivor Annuity if required, or in the form of a cash
lump sum in all other cases.
(a) The payment of the Participant's vested Accrued Benefit
in a single sum in cash or in kind.
(b) Except as provided in subparagraph 4(a) of this
Paragraph B, the payment of the Participant's vested Accrued Benefit as an
annuity, in a series of monthly payments, variable or fixed, with or without a
period certain for his or her life or for the joint lives of the Participant and
his or her spouse or Designated Beneficiary.
(c) The payment of the Participant's vested Accrued Benefit
in a series of installments.
(d) Any combination of the methods described above.
(e) Effective January 1, 1993, if the distribution
constitutes an Eligible Rollover Distribution, the payment of the Participant's
vested Accrued Benefit in a total or partial direct transfer to an Eligible
Retirement Plan; provided that a partial direct transfer shall be equal to at
least $500.
4. Restriction on Alternate Form of Benefits.
(a) If this Plan does not provided for a Qualified Joint and
Survivor Annuity, no distributions shall be made in the form of a life annuity.
In-kind distributions requested by a Participant, if permitted under Article I,
shall be made available in a non-discriminatory manner under Section 401(a)(4)
of the Code and if permitted by the issuer of the particular asset. If a
Participant elects installments, his or her installment payments shall be
payable not less frequently than annually over a period not to exceed any one
(1) of the following permissible periods:
(i) A period certain not extending beyond the life
expectancy of the Participant; or
(ii) A period certain not extending beyond the joint
and last survivor expectancy of the Participant and a Designated Beneficiary.
ARTICLE VII 75
The Trustee may segregate the unpaid balance of the
Participant's vested Accrued Benefit in one (1) or more banks, trust companies,
savings and loan associations or similar institutions, including the Trust or
any of its affiliates, if applicable, for investment in savings accounts,
certificates of deposit, government bonds, bankers' acceptances or similar
securities. Unless violative of Section 401(a)(9) of the Code, net earnings on
the unpaid vested Accrued Benefit shall be distributed with the last payment.
(b) Any deferred distribution from an annuity contract in a
form other than a Qualified Joint and Survivor Annuity shall require a Waiver
Election. The annuity contract shall provide for the notice provisions of REACT
and shall comply with the requirements of this Plan, including the Participant's
rights to optional forms of benefits and the distribution requirement of Section
401(a)(9) of the Code and the proposed regulations thereunder. Any annuity
contract distributed hereunder must be non-transferable.
5. Distribution Consent Requirements. Subject to the last
paragraph of this Paragraph B.5, for distributions made prior to March 22, 1999,
if the Participant's vested Accrued Benefit ever exceeded $5,000 ($3,500 for
Plan Years beginning before August 6, 1997) at the time a Participant could have
received a distribution from the Plan or any subsequent time, the Participant
and the Participant's Spouse or the survivor of the two must consent to any
distribution of such vested Accrued Benefit if the form of benefit is payable in
other than a Qualified Joint and Survivor Annuity. No consent is required before
the Annuity Starting Date if the vested Accrued Benefit is not more than $5,000.
If this Plan is not subject to Section 401(a)(11) and 417 of the Code only the
Participant's consent is required. If this Plan is subject to Sections
401(a)(11) and 417 of the Code, a distribution may not be made after the Annuity
Starting Date unless the Participant and the Spouse of the Participant or the
Surviving Spouse consent in writing to such distribution even if the vested
Accrued Benefit is less than or equal to $5,000.
Subject to the last paragraph of this Paragraph B.5, for
distribution made on or after March 22, 1999, written consent of the Participant
is not required if the vested Accrued Benefit does not exceed $5,000 at the date
of distribution. However, if a Participant has begun to receive distributions
pursuant to an optional form of benefit that provides for a schedule of periodic
distribution, consent will be required even if the Participant's vested Accrued
Benefit is less than $5,000. If this Plan is subject to Sections 401(a)(11) and
417 of the Code, a distribution may not be made after the Annuity Starting Date
unless the Participant and the Spouse of the Participant or the Surviving Spouse
consent in writing to such distribution even if the vested Accrued Benefit is
less than or equal to $5,000.
ARTICLE VII 76
Effective January 1, 1993, if the Participant separates from
service with a vested Accrued Benefit of at least $200 but not more than $5,000,
such Participant shall be entitled to elect a direct transfer or partial direct
transfer of his or her Accrued Benefit as described in Paragraph B.3 of this
Article VII. If the Participant fails to make such election, his or her vested
Accrued Benefit shall be paid to him or her in a single sum payment subject to
mandatory federal income tax withholding. Such payment shall occur 30 days after
the receipt of the notice described in Paragraph B.2 of this Article VII but
before the 90 day period described in such Paragraph B.2 has expired.
If the Participant's vested Accrued Benefit is less than $200,
it shall be paid to him or her in a single sum payment as soon as
administratively feasible after the date elected in Article I.
If and to the extent elected in Article I, the involuntary
cash-out limit of $5,000 described above shall be $3,500.
6. Special Rules. The Committee shall notify the Participant and
the Participant's Spouse of the right to defer benefits to the later of age 62
or the Normal Retirement Age under the Plan and the right to optional forms of
benefit as described in Paragraph B.3 of this Article VII. The notice to defer
benefits and the explanation of the optional forms of benefits shall comply with
Paragraph B.2 of this Article VII. If the benefit is payable commencing before
the later of age 62 or the Normal Retirement Age, in a Qualified Joint and
Survivor Annuity, or if this Plan does not provide for the survivor annuity
requirements of REACT, only the Participant's consent is required. If this Plan
is terminated and an annuity that may be purchased from a commercial provider is
not offered as an optional form of distribution, the Participant's Accrued
Benefit payable upon termination may be distributed to the Participant without
his or her consent. The preceding sentence shall not apply if the Employer
maintains another defined contribution plan within the Controlled Group other
than an employee stock ownership plan as defined in Section 4975(e)(7) of the
Code to which benefits are transferred from the terminated Plan. However, the
transfer need not require Participant consent. All transfers shall comply with
the rules of Section 411(d)(6) of the Code. The consent requirements of this
Paragraph B.6 do not apply to the extent that a distribution is required to
satisfy the requirements of Sections 401(a)(9) and 415 of the Code.
7. Accumulated Deductible Employee Contributions. Before the
first day of the first Plan Year beginning after December 31, 1989, the
Participant's vested Accrued Benefit shall not include accumulated deductible
employee contributions within the meaning of Section 72(o)(5)(B) of the Code.
These employee contributions, if any, shall be maintained in a separate account.
ARTICLE VII 77
8. Incidental Benefit Rule. The Committee shall ensure that all
distributions required under this Article VII shall be made and determined in
accordance with Section 401(a)(9) of the Code and the proposed regulations
issued thereunder, including the minimum distribution and incidental benefit
requirements of Section 401(a)(9)(G) of the Code and Section 1.401(a)(9)-2 of
the Proposed Treasury Regulations which are incorporated herein by this
reference.
9. Commencement of Benefits. Distribution to any Participant of
his or her vested Accrued Benefit shall commence not later than the April 1 of
the calendar year following the calendar year in which he or she attains age 70
1/2. However, with respect to a non-5%-Owner who attained age 70 1/2 prior to
January 1, 1988, his or her commencement date shall be the later of the April 1
of the calendar year following the calendar year in which he or she attains age
70 1/2 or the calendar year in which he or she retires. The term "5%-Owner"
shall be further modified by Q&A B-2 of Section 1.401(a)(9)-1 of the Proposed
Treasury Regulations.
Notwithstanding the preceding paragraph, if elected in Article
I, the required beginning date for minimum required distributions for any
Participant (other than a 5%-Owner) is the April 1 of the calendar year
following the later of the calendar year in which such Participant attains age
70 1/2 or the calendar year in which such Participant retires.
If elected in Article I, the required beginning date for
minimum required distributions is the April 1 of the calendar year following the
calendar year in which the Participant attains age 70 1/2, except that benefit
distributions to a Participant (other than a 5%-Owner) with respect to benefits
accrued after the later of the adoption or effective date of an amendment to the
Plan must commence by the later of the April 1 of the calendar year following
the calendar year in which the Participant attains age 70 1/2 or retires.
If elected in Article I, any Participant (other than a
5%-Owner) who attained age 70 1/2 prior to January 1, 1997 and who is still
employed by the Employer, may elect, in accordance with the administrative
procedures established by the Committee, to stop receiving minimum required
distributions until April 1 of the calendar year following retirement. If
provided in Article I, there shall be a new Annuity Starting Date upon
recommencement. Any such election shall not affect a new Participant's right to
elect an in-service distribution pursuant to Article I of the Plan. The election
to stop receiving minimum required distributions shall also apply to any
Participant who is currently receiving minimum required distributions and has
not been given the right to elect to stop such distributions.
If provided in Article I, any Participant (other than a
5%-Owner) who attains age 70 1/2 after 1995 and is still employed by the
Employer may elect, in
ARTICLE VII 78
accordance with the administrative procedures established by the Committee, to
defer receiving minimum required distributions until the calendar year following
retirement. Such election must be made by the April 1 of the calendar year
following the calendar year in which the Participant attained age 70 1/2 (i.e.,
by December 31, 1997 if the Participant attained age 70 1/2 in 1996) unless such
Participant has not been given the right to elect to defer such distributions.
If a Participant fails to make such election, such Participant will begin
receiving a minimum required distribution by the April 1 of the calendar year
following the calendar year in which the Participant attains age 70 1/2 (i.e.,
by December 31, 1997 if the Participant attained age 70 1/2 in 1996).
If elected in Article I, the preretirement age 70 1/2
distribution option is only eliminated with respect to Participants who attain
age 70 1/2 in or after a calendar year that begins after the later of December
31, 1998, or the adoption date of this amendment. This provision shall not
affect the Participant's right to receive an in-service distribution pursuant to
Article I of the Plan.
Any amendment made to an existing plan to eliminate
distributions after age 70 1/2 shall not apply if the amendment is not adopted
by the last day of the remedial amendment period that applies to such plan due
to changes made by the Small Business Job Protection Act of 1996.
If this document establishes a new plan and if elected in
Article I, any Participant (other than a 5%-Owner) who is still employed by the
Employer and who has attained age 70 1/2 will not be entitled to receive
distributions until the April 1 of the calendar year following retirement. This
provision shall not affect the Participant's right to elect an in-service
distribution pursuant to Article I of the Plan.
Notwithstanding the above, once minimum required distributions
have commenced to a 5%-Owner under this Paragraph B.9, such distributions shall
continue.
The minimum amount to be distributed with respect to the
calendar year in which such Participant attains age 70 1/2 and the amount
distributed by December 31 of each calendar year thereafter must be at least an
amount equal to the quotient obtained by dividing the Participant's Accrued
Benefit determined as of the Valuation Date immediately preceding the
distribution calendar year by his or her life expectancy or the joint and last
survivor expectancy of the Participant and his or her Designated Beneficiary
determined for the distribution calendar year. The life expectancy and the joint
and last survivor expectancy of the Participant and his or her Designated
Beneficiary shall be computed by reference to the expected return multiple
Tables V and VI contained in Section 1.72-9 of the Income Tax Regulations.
ARTICLE VII 79
For purposes of this computation, a Participant's life
expectancy and that of his or her Spouse shall be recalculated no more
frequently than annually unless the Participant or the Surviving Spouse elects
not to recalculate. Such election shall be irrevocable as to the Participant or
Surviving Spouse for subsequent years. The life expectancy of a non-spouse
Designated Beneficiary may not be recalculated.
10. Distribution on Total Disability. Notwithstanding any delay in
the timing of distributions pursuant to Article I, if a Participant terminates
employment as a result of Total Disability, he or she shall be eligible for the
immediate commencement of his or her vested Accrued Benefit as soon as
administratively feasible after such termination; provided that the Participant
shall make a written application for and submit to the Committee sufficient
evidence to establish his or her Total Disability. The Committee, in its sole
discretion, may demand further examination by an independent physician
acceptable to it to determine the Participant's Total Disability before
approving or denying any such claim. If permitted in Article I, a Participant
may receive an in-service distribution of his or her vested Accrued Benefit on
account of Total Disability.
C. Distribution at Death. If this Plan provides for an annuity option
as selected in Article I, and if a Participant ceases participation under the
Plan by reason of his or her death prior to the Annuity Starting Date, unless
there has been a valid Waiver Election during the applicable Election Period, a
Qualified Preretirement Survivor Annuity shall be paid to the Surviving Spouse
commencing on the later of the Normal Retirement Age or on the date that a
Participant would have attained age 62 unless an alternate form of benefit is
selected. The Surviving Spouse may elect to have such annuity distributed within
a reasonable time after the Participant's death, subject to an adjustment on
account of an earlier distribution, if any.
1. Notice Requirements and Alternate Forms of Death Benefits.
(a) The Committee shall provide each Participant a written
explanation of the Qualified Preretirement Survivor Annuity in such terms and in
such manner as would be comparable to the explanations provided for meeting the
notice requirements of Paragraph B.2 of this Article VII applicable to a
Qualified Joint and Survivor Annuity. Except for separation from service prior
to age 35, the applicable period for a written explanation to a Participant is
whichever of the following periods ends last: (i) the period beginning with the
first day of the Plan Year in which the Participant attained age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the Participant
attained age 35; (ii) a reasonable period ending after an Employee becomes a
Participant; (iii) a reasonable period ending after the Plan no longer fully
subsidizes the benefit; or (iv) a reasonable period ending after Section
401(a)(11) of the Code first applies to the Participant.
ARTICLE VII 80
For purposes of applying clauses (ii), (iii) and (iv) of
the preceding paragraph, a reasonable period ending after the last of these
events have occurred means the end of the two-year period beginning one (1) year
prior to the date the applicable event occurs, and ending one (1) year after
that date.
If a Participant separates from service before the Plan
Year in which the Participant attains age 35, notice shall be provided within
the two-year period beginning one (1) year prior to separation and ending one
(1) year after separation. If the Participant thereafter returns to employment
with the Employer, the applicable period for such Participant shall be
redetermined as described in clauses (i), (ii), (iii) and (iv) of this Paragraph
C.1(a).
(b) During any time that a Waiver Election is in force, the
Participant may elect to have his or her death benefit distributed in any one of
the ways permitted by Paragraph B.3 of this Article VII.
If, at the death of a Participant, his or her death
benefit is payable in the form of a Qualified Preretirement Survivor Annuity,
the Participant's Surviving Spouse shall be entitled to select by written
election an alternate form of benefit payment in any of the ways permitted by
such Paragraph B.3.
2. Timing of Distributions. Upon the death of a Participant, the
following distribution provisions shall apply:
(a) If the Participant dies after distribution of his or her
vested Accrued Benefit has commenced, the remaining portion of such Accrued
Benefit shall continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
(b) If the Participant dies before distribution of his or
her vested Accrued Benefit has commenced, the Participant's entire death benefit
shall be distributed no later than December 31 of the calendar year containing
the fifth anniversary of his or her death, unless the Participant's Designated
Beneficiary receives distributions in accordance with the following
subparagraphs (i) or (ii):
(i) If the Participant's Accrued Benefit is payable to
a Designated Beneficiary, distributions may be made in substantially equal
installments, if installments are a permitted optional form of benefit as
selected in Article I, over the life or life expectancy of the Designated
Beneficiary (or over a period not extending beyond the life expectancy of such
Designated Beneficiary) commencing no later than December 31 of the calendar
year immediately following the calendar year of the Participant's death.
ARTICLE VII 81
(ii) If the Designated Beneficiary is the Participant's
Surviving Spouse, at the Spouse's election, the date distributions are required
to commence need not be earlier than December 31 of the calendar year in which
the Participant would have attained age 70 1/2 had he or she lived. If the
Surviving Spouse dies before payments to him or her commence, the Spouse shall
be deemed to be, and shall be treated as, the Participant.
(iii) Minimum payments made to a Surviving Spouse shall
be calculated by reference to the expected return multiple Table V contained in
Section 1.72-9 of the Treasury Regulations. The life expectancy of the Surviving
Spouse shall be recalculated annually unless otherwise elected by the Surviving
Spouse prior to the first distribution date.
(iv) For purposes of subparagraphs (i), (ii) and (iii)
of this Paragraph C.2(b), any amount paid to a child of the Participant shall be
treated as if it had been paid to the Surviving Spouse if the amount becomes
payable to the Surviving Spouse when the child attains the age of majority under
applicable state law.
3. REACT Death Benefit. If the Plan is subject to REACT Surviving
Spouse protection, the amount of death benefits to be paid to the Participant's
Surviving Spouse shall be a Qualified Preretirement Survivor Annuity determined
in accordance with Article I and this Article VII. Any remaining Accrued Benefit
shall be paid in accordance with the Participant's Beneficiary designation. If
this Plan does not provide for an annuity option, the special rule as provided
in Paragraph E of this Article VII shall apply.
4. Death Benefits. The death benefit payable under this Plan
shall be equal to the face amount of any life insurance policies, if any
(excluding key man insurance) on such Participant's life in effect on his or her
date of death, plus such Participant's Accrued Benefit.
5. Lack of Designation. If such deceased Participant had filed
with the Committee a document naming a Designated Beneficiary, but failed to
designate the form in which benefit payments are to be made, then the Committee
shall direct the Trustee to distribute to such Designated Beneficiary the unpaid
amount of the Participant's Accrued Benefit as determined above, in such one (1)
or more ways as permissible under Paragraph B.3 of this Article VII. If such
deceased Participant failed to name a Designated Beneficiary, or if no
Designated Beneficiary survives him or her, then the unpaid amount of the
Participant's Accrued Benefit shall be paid to the Designated Beneficiary
pursuant to the priorities set forth in Article IX of the Plan.
6. Proof of Death. Upon the death of a Participant, the Committee
may, but need not, require the personal representative of the Participant's
estate and/or
ARTICLE VII 82
the Designated Beneficiary to furnish proof of death and such tax release forms
and any other forms, papers or documents as are deemed appropriate by the
Committee prior to making any payment of death benefits.
7. Proof of Surviving Spouse. The Committee shall withhold and
shall not authorize the distribution of death benefits until such time as the
Committee can determine the existence and/or identity of a Surviving Spouse or
any other non-spouse Beneficiary. If the Committee cannot determine to its
reasonable satisfaction the identity of the person or persons to whom such death
benefits should be distributed within a reasonable time after the date of death
of the Participant, then the Committee shall not authorize the distribution of
such death benefits but shall hold such death benefits in trust until the
identity of such Surviving Spouse or other Beneficiary is finally determined. If
necessary, the Committee shall file a complaint for interpleader and declaratory
relief requesting that the court determine the identity of any persons who are
entitled to payment of such benefits.
D. Transitional Rules. The Qualified Joint and Survivor Annuity and
Qualified Preretirement Survivor Annuity provisions of this Article VII, to the
extent that they are applicable under this Plan, shall apply only to
Participants who complete an Hour of Service on or after August 23, 1984.
1. Service On or After January 1, 1976. Any Inactive Participant
not receiving benefits on August 23, 1984, shall be given the opportunity to
make a Waiver Election for a Qualified Preretirement Survivor Annuity if such
Inactive Participant (i) completed at least one (1) Hour of Service with the
Employer under this Plan (or a Predecessor Plan) in a Plan Year beginning on or
after January 1, 1976; and (ii) had completed at least 10 Years of Vested
Service when he or she terminated employment.
2. Service On or After September 2, 1974 and Before January 1,
1976. Any Inactive Participant not receiving benefits on August 23, 1984, who
completed at least one (1) Hour of Service with the Employer under this Plan (or
a Predecessor Plan) on or after September 2, 1974, but who did not complete an
Hour of Service in a Plan Year beginning on or after January 1, 1976, shall be
given the opportunity to have his or her benefits paid in accordance with the
distributive provisions and the Qualified Joint and Survivor Annuity provisions
of this Plan in effect before August 23, 1984, as required by Section 303(e) of
REACT.
Any election available to an Inactive Participant under this
Paragraph D.2 may be made during the period commencing on August 23, 1984, and
ending on such former Participant's Annuity Starting Date.
ARTICLE VII 83
E. Non-Annuity Rules.
1. No Annuities. If this Plan does not provide for an annuity
option as selected in Article I, then the Participant shall not be entitled to
the payment of his or her vested Accrued Benefit in the form of annuity.
Furthermore, the Qualified Joint and Survivor Annuity and Qualified
Preretirement Survivor Annuity provisions of Paragraphs B and C of this Article
VII shall not be applicable to this Plan, but all of the remaining provisions of
such Paragraphs B and C relating to distribution forms and time of commencement
of distributions shall be applicable to the Participant and his or her Surviving
Spouse and/or Designated Beneficiary. On the death of the Participant, all of
his or her death benefit shall be paid to his or her Surviving Spouse within a
reasonable time. The Surviving Spouse may elect to receive the deceased
Participant's benefits under the Plan within 90 days after the date of death. If
there is no Surviving Spouse or if the Surviving Spouse consents in writing in a
manner prescribed under Paragraph A.7 of this Article VII, then the
Participant's death benefit shall be paid to the Designated Beneficiary.
2. Transferred Benefits. Irrespective of any lack of selection of
the annuity option in Article I, the Qualified Joint and Survivor Annuity and
Qualified Preretirement Survivor Annuity provisions of Paragraphs B and C of
this Article VII shall apply to Transferred Benefits which are neither rollover
benefits nor voluntary transfers under Q&A 3 of Section 1.411(d)-4 of the
Treasury Regulations.
F. Time of Distribution. Unless Article I allows Participants to defer
commencement of benefits, distribution to a Participant shall occur no later
than 60 days after the close of the Plan Year in which the Participant reaches
Normal Retirement Age or terminates employment, whichever is later. However, the
failure of a Participant and his or her Spouse, where applicable, to consent to
a distribution, shall be deemed to be an election to defer the commencement of a
payment of any benefits to the later of age 62 or the Normal Retirement Age.
Notwithstanding anything herein to the contrary, any deferral of benefit shall
not violate Sections 401(a)(9) and 415 of the Code including the failure to
consent to a distribution by the Participant and the Spouse where applicable.
G. Pre-TEFRA Designations. Notwithstanding Paragraphs B and C of this
Article VII, each Participant or his or her Designated Beneficiary who made a
timely designation pursuant to Section 242(b)(2) of TEFRA shall have had the
right and power to elect by written designation delivered to the Committee, the
time for commencement of and the form of distribution of his or her Accrued
Benefits; provided, however, that any such designation must have been consistent
with the provisions of ERISA, the Code and Notice 83-23 in effect at the time
the designation was made and shall comply with the spousal consent requirements
of REACT; provided, further, however, that such Participant or his or her
Designated Beneficiary may have selected any form of
ARTICLE VII 84
distribution available under the terms of the Plan as in effect at the time of
execution of such designation and the form selected by each Participant is
hereby incorporated by reference. The following form of distribution is also
available pursuant to such designation, in addition to those forms of
distribution set forth above by reference and elsewhere in the Plan:
Payment in a series of cash installments, not less frequently than
annually, over a period of time equal to twice the future life expectancy of the
Participant determined as of the date payments of benefits commence, or if the
Participant is married at such date, over the greater of twice the life
expectancy of the Participant or his or her Spouse. Expected return multiple
Tables V and VI of Section 1.72-9 of the Treasury Regulations shall determine
the number of years of future life expectancy.
If a designation is revoked subsequent to the date distributions are
required to commence, the Trust must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been distributed to
satisfy Section 401(a)(9) of the Code and the proposed regulations thereunder,
but for the Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum distribution
incidental benefit requirements in Section 1.401(a)(9)-2 of the Proposed
Regulations. Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (such as altering the
relevant measuring life). If an amount is transferred or rolled over from one
plan to another, the rules in Q&A J-2 and Q&A J-3 of Section 1.401(a)(9)-1 of
the Proposed Regulations shall apply.
H. Loans to Participants. If allowed under Article I, the Committee
may, in its sole discretion and upon written application of a Participant or his
or her Beneficiaries on a form provided by the Committee, direct the Trustee to
make a loan or loans to such Participant in a total amount not to exceed the
lesser of (i) $50,000 reduced by any excess of the highest outstanding balance
of loans made to the Participant from the Plan during the one (1) year period
ending on the day before the date the most recent loan is given, over the
outstanding balance of any loan from the Plan made to the Participant on the
date which the loan was made; or (ii) 50% of the single sum of the vested
Accrued Benefit of such Participant; provided that the policy with respect to
making any such loan or loans shall be uniformly and non-discriminatorily
applied and shall not be made available to Highly Compensated Employees,
officers or shareholders in an amount greater than the amount made available to
other Employees. For purposes of the preceding sentence, loans shall be
aggregated pursuant to Section 414(b), (c), (m) or (o) of the Code. In no event
shall the Committee be required
ARTICLE VII 85
to make any such loans. In determining such limitation, the Committee shall take
into account the balance of such loan or loans and the balance of all
outstanding loans to the Participant under this Plan or any other qualified plan
of the Employer. The Committee shall give due consideration to the type of
security given for the loan and the creditworthiness of the Participant/borrower
in determining whether to approve or disapprove a loan. Unless loans are
designated as a directed investment of the Participant's Account pursuant to
Article I, any loan or loans made to a Participant shall be treated as an
investment of the Trust. Any loans shall be (i) for a specific term, which shall
not exceed five (5) years unless the Participant certifies in writing to the
Committee that the proceeds of the loan will be applied to acquire the
Participant's principal residence; (ii) adequately secured in the event of a
default by the Participant's vested Accrued Benefit and other collateral if the
Committee reasonably determines that additional collateral is necessary; and
(iii) evidenced by the Participant's promissory note bearing interest at the
rate equal to the prevailing interest rate charged by persons in the business of
lending money for loans made under similar circumstances.
For Participant loans granted or renewed on or after the last day of
the first Plan Year beginning on or after January 1, 1989, the Committee shall
establish a written program which contains the following requirements:
1. The identity of the person(s) authorized to administer the
loan program.
2. A procedure for applying for a loan.
3. The basis on which loans will be approved or denied.
4. Limitations, if any, on the types and amount of the loan
offered.
5. The procedures for determining a reasonable rate of interest.
6. The type of collateral which may secure a Participant's loan.
7. The events constituting default and causing acceleration and
the steps that will be taken to preserve plan assets in the event of any such
events.
In addition to any acceleration provisions contained in the
promissory note, a Participant's loan shall immediately become due and payable
if such Participant is entitled to and elects to receive a distribution from the
Plan. In this case, the Employer shall immediately request payment of the
outstanding principal balance and accrued but unpaid interest on the loan. If
the Participant does not repay such amount within a reasonable time after such
request, the Employer shall have the right to offset and reduce the
Participant's vested Account balance which was used for security for
ARTICLE VII 86
such loan by such amount. If the Participant's vested Account balance is less
than the amount due, the Employer shall take appropriate steps to collect the
balance due directly from the Participant.
Upon default of a loan, the Participant's Accrued Benefit shall be
reduced by the outstanding principal balance of the loan plus accrued but unpaid
interest. However, if the Participant's Account is subject to the withdrawal
restrictions of Section 401(k) of the Code or if this Plan is subject to Section
417 of the Code, the Participant's Account balance shall not be reduced until a
distributable event occurs under the terms of the Plan. During any time that a
loan is in default under the terms of the promissory note and the borrowing
Participant's vested Accrued Benefit is not distributable, such loan shall be
treated as a directed investment of such Participant's Account, regardless of
whether directed investments are permitted in Article I.
Notwithstanding the foregoing, loans to an Owner-Employee (or a
Shareholder-Employee as defined in former Section 1379(d) of the Code) shall not
be permitted under the Plan without an exemption from the prohibited transaction
requirements of the Code.
If a Participant making a loan pursuant to this Paragraph H is
married, the Committee shall require that such Participant obtain his or her
Spouse's consent to the making of the loan and the possible reduction in such
Participant's Accrued Benefit. Such consent shall be obtained within the 90-day
period prior to the making of the loan and shall be in writing and shall
acknowledge the effect of the loan and shall be witnessed by a Plan
representative or notary public. However, if this Plan does not provide for
annuities, spousal consent shall not be required.
I. Reserved.
J. Distributions to Incompetent Persons. The Committee may direct the
Trustee to distribute the benefits of any Participant pursuant to the
instructions of any person named by such Participant in a durable power of
attorney which, on its face, appears to be valid and enforceable, or the legal
guardian or conservator of such Participant, or the custodian of such
Participant's assets under the Uniform Gifts to Minors Act (or the comparable
law of any state in which such Participant resides).
K. Nonliability. Any payment to a Participant or Designated
Beneficiary, or to the legal representative of a Participant or Designated
Beneficiary, in accordance with the provisions of this Plan, shall to the extent
thereof be in full satisfaction of all claims under this Plan against the
Trustee, the Committee and the Employer, any of whom may require such
Participant, legal representative or Designated Beneficiary, as a condition
precedent to such payment, to execute a receipt and release therefor in such
form as shall be determined by the Trustee, the Committee, or the Employer, as
the
ARTICLE VII 87
case may be. The Employer does not guarantee the Trust, the Participants, former
Participants or their Designated Beneficiaries against loss of or depreciation
in value of any right or benefit that any of them may acquire under the terms of
this Plan. All of the benefits payable under this Plan shall be paid or provided
solely from the Trust, and the Employer does not assume any liability or
responsibility for payment of such benefits.
L. Benefit Claims Procedure.
1. Applications. All applications for benefits under the Plan
shall be submitted to the Committee at the Employer's principal place of
business. Applications for benefits must be in writing on forms acceptable by
the Committee and must be signed by the Participant and his or her Spouse, or in
the case of a death benefit, by the Designated Beneficiary or legal
representative of the deceased Participant. The Committee reserves the right to
require the Participant to furnish proof of his or her marital status, age, and
the age of his or her Spouse, if any, prior to processing any application. Each
application shall be acted upon and approved or disapproved by the Committee
within 60 days following its receipt by the responsible officer of the Employer.
If any application for benefits is denied, in whole or in part, the Committee
shall notify the applicant in writing of such denial and of his or her right to
a review by the Committee and shall set forth, in a manner calculated to be
understood by the applicant, the specific reasons for such denial, the specific
references to pertinent Plan provisions on which the denial is based, a
description of any additional material or information necessary for the
applicant to perfect his or her application, an explanation of why such material
or information is necessary, and an explanation of the Plan's review procedure.
2. Review of Denials. Any person whose application for benefits
is denied in whole or in part may appeal to the Committee for a review of the
decision by submitting a written statement to the Committee within 90 days after
receiving written notice from the Committee of the denial of his or her claim
(i) requesting a review by the Committee of his or her application for benefits;
(ii) setting forth all of the grounds upon which his or her request for review
is based and any facts in support of such request; and (iii) setting forth any
issues or comments which the applicant deems pertinent to his or her
application. The Committee shall meet as required to review appeals of denials
of applications for benefits submitted to it. The Committee shall act upon each
appeal within 60 days after receipt of the applicant's request for review by the
Committee. The Committee shall make a full and fair review of each such
application and any written material submitted by the applicant or the Employer
in connection with such review and may require the Employer or the applicant to
submit such additional facts, documents, or other evidence as the Committee, in
its sole discretion, deems necessary or advisable in making such a review. On
the basis of its review, the Committee shall make an independent determination
of the applicant's eligibility for benefits under the
ARTICLE VII 88
Plan. The decision of the Committee on any application for benefits shall be
final and conclusive upon all persons if supported by substantial evidence in
the records.
M. Income Tax Withholding. Distributions made under the Plan to any
Participant or his or her Designated Beneficiary shall be subject to the income
tax withholding rules set forth in Section 3405 of the Code and the Treasury
Regulations promulgated thereunder.
N. Qualified Domestic Relations Orders. Notwithstanding anything to the
contrary contained herein, the Committee shall direct the Trustee to make
distribution to an alternate payee in accordance with a Qualified Domestic
Relations Order, and such distribution may be made, notwithstanding the age or
continued employment of the Participant who is a party to such Order, at any
time as specified in the Order, provided the Order is filed with the court,
served on the Plan, approved by the Committee and the alternate payee executes
release forms, withholding forms and any other documents, forms or papers that
the Committee deems necessary and desirable.
O. Overpayment of Vested Interest. If a Participant or Beneficiary is
erroneously paid benefits greater than the Participant's vested Accrued Benefit,
the Committee may, in its sole discretion exercised in the best interests of
Participants and Beneficiaries, demand from the Participant or Beneficiary
repayment of such overpayment. If the Participant or Beneficiary refuses to make
repayment, the Committee may take legal action to recover the amount of the
overpayment, plus interest, and costs of collection including reasonable
attorneys' fees. If the Participant returns to employment and the overpayment
has not been repaid to the Plan, the Committee may offset the overpayment
against future Plan benefits.
CONTINUED ON NEXT PAGE
NEXT PAGE IS 90
ARTICLE VII 89
VIII. TOP-HEAVY LIMITATIONS
If in any Plan Year the Plan is a Top-heavy Plan as defined in Paragraph A
below, the limitations and requirements set forth in this Article VIII shall
apply to the Plan, unless this is a Simple 401(k) Plan within the meaning of
Section 401(k)(11) of the Code.
A. Definitions.
1. "Determination Date" means with respect to any Plan Year the
last day of the preceding Plan Year or, in the case of the first Plan Year, the
last day of such Plan Year, provided that the Employer did not previously
establish another qualified plan that is part of a Required Aggregation Group.
2. "Key Employee" means any Participant who at any time during
the Plan Year or any of the four (4) preceding Plan Years is:
(a) An officer of the Employer having Section 415
Compensation greater than 50% of the Defined Benefit Dollar Limitation;
provided, however, that no more than 50 Employees or, if lesser, the greater of
three (3) or 10% of the Employees shall be treated as officers; provided further
that if the total number of officers exceeds this limitation, only the highest
compensated officers shall be included;
(b) One (1) of the 10 Employees having Section 415
Compensation from the Employer of more than the Defined Contribution Dollar
Limitation and owning (or considered as owning within the meaning of Section 318
of the Code) the largest interests in the Employer. For such purposes, if two
(2) Employees have the same interest in the Employer, the Employee having the
greater Section 415 Compensation from the Employer shall be treated as having a
larger interest;
(c) A 5%-Owner of the Employer;
(d) A 1%-Owner of the Employer whose Section 415
Compensation exceeds $150,000; or
(e) A Beneficiary of a Key Employee or a former Key
Employee.
For purposes of this Paragraph A.2, Section 415 Compensation
shall include amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under Section
125, 402(e)(3), 402(h), 403(b), 408(p)(2)(A)(i) or 457 of the Code.
ARTICLE VIII 90
An Employee shall be deemed a "1%-Owner" if he or she (i) owns
more than one percent (1%) of the outstanding stock or owns stock possessing
more than one percent (1%) of the total combined voting power of all classes of
stock, if the Employer is a corporation; or (ii) owns more than one percent (1%)
of the capital or profit interests in the Employer if the Employer is not a
corporation. In making the determination of a 1%-Owner or a 5%-Owner, Section
416(i)(1)(B)(iii) of the Code modifies Section 318(a)(2) of the Code, the
corporate attribution rule. The business aggregation rules of Section 414 of the
Code shall not be applied to determine ownership in the Employer.
3. "Non-Key Employee" means any Employee who is not a Key
Employee.
4. "Top-heavy Plan" means, with respect to any Plan Year, (i) any
defined benefit pension plan maintained by the Employer if, as of the
Determination Date, the present value of cumulative Accrued Benefits under the
plan for Key Employees exceeds 60% of the present value of cumulative Accrued
Benefits under the Plan for all Employees; and (ii) any defined contribution
plan, other than a Simple 401(k) Plan, maintained by the Employer if, as of the
Determination Date, the aggregate of the Accounts of Key Employees under the
Plan exceeds 60% of the aggregate of the Accounts of all Employees under the
Plan. This rule is referred to herein as the "60% Test."
5. "Top-heavy Group" means any Aggregation Group if the sum of
the present value of cumulative accrued benefits for Key Employees under all
defined benefit pension plans included in the Aggregation Group, and the sum of
the accounts of Key Employees under all defined contribution plans included in
the Aggregation Group, exceed 60% of a similar sum determined for all Employees.
An "Aggregation Group" means either a Required Aggregation Group or a Permissive
Aggregation Group.
6. "Required Aggregation Group" means each qualified plan of the
Employer in which a Key Employee is a participant, and each other qualified plan
of the Employer which enables the qualified plan or plans containing a Key
Employee to meet the anti-discrimination requirements of Section 401(a)(4) or
410 of the Code. A Required Aggregation Group includes any qualified plan of the
Employer that has terminated within the last (5) years ending on the
Determination Date.
B. Aggregation Groups.
1. Required Aggregation Group. Each qualified plan of the
Employer required to be included in a Required Aggregation Group shall be
treated as a Top-heavy Plan if the Required Aggregation Group is a Top-heavy
Group.
ARTICLE VIII 91
2. Permissive Aggregation Group. For purposes of determining the
existence of a Top-heavy Group, the Employer may elect to include in the
Required Aggregation Group any other qualified plan of the Employer not
otherwise required to be included, if such Group after the election would
continue to meet the anti-discrimination requirements of Sections 401(a)(4) and
410 of the Code; provided, however, that any such qualified plan will not be
otherwise deemed a Top-heavy Plan by reason of such election.
If the Permissive Aggregation Group is a Top-heavy Group, each
qualified plan of the Employer that is a part of a Required Aggregation Group
will be considered a Top-heavy Plan. If the Permissive Aggregation Group is not
a Top-heavy Group, no qualified plan in the Permissive Aggregation Group will be
considered a Top-heavy Plan.
3. Plans Aggregated. Only those qualified plans of the Employer
in which the Determination Dates fall within the calendar year shall be
aggregated to determine whether the qualified plans (or the Aggregation Group)
are Top-heavy Plans (or a Top-heavy Group).
C. 60% Test - Special Rules. For purposes of the 60% Test, the
following special rules of this Paragraph C shall apply.
1. Participant Contributions. Benefits derived from both
Participant contributions (whether voluntary or mandatory, but not deductible
contributions) and Employer contributions shall be taken into account for the
60% Test.
2. Distributions. In determining the present value of cumulative
Accrued Benefits of any Participant or the Account of any Participant under the
Plan (or plans which form the Aggregation Group), such present value or Account
shall be increased by the aggregate of distributions made to such Participant
from the Plan (or plans forming the Aggregation Group) during the five (5) year
period ending on the Determination Date. For this purpose, the term
"Participant" shall include an Employee who is no longer employed by the
Employer. The foregoing shall also apply to distributions under a terminated
qualified plan of the Employer which, if it had not been terminated, would have
been required to be included in an Aggregation Group.
3. Rollover Contributions. Except as otherwise provided in the
Treasury Regulations, any rollover contribution or similar transfer made by an
Employee to the Plan after December 31, 1983 shall not be taken into account;
provided, however, that this transfer rule shall not apply to mergers or
consolidations of several plans, the division of one (1) plan, or rollovers
between plans of the Employer or related employers.
ARTICLE VIII 92
4. Change of Status. The cumulative Accrued Benefit or Account of
a Participant who was formerly a Key Employee, but who ceases to be a Key
Employee for a Plan Year, shall not be taken into account for purposes of the
60% Test for the Plan Year in which he or she is not a Key Employee.
5. Non-Performance of Service. The Accounts and Accrued Benefits
of a Participant who has not performed services for the Employer maintaining the
Plan during the five (5) year period ending on the Determination Date shall be
disregarded.
6. Determination of Present Value. The present value of
cumulative accrued benefits under any aggregated defined benefit pension plan
maintained by the Employer shall be determined by applying the actuarial
equivalents set forth in such defined benefit pension plan.
7. Determination of Accrued Benefit. Solely for the purpose of
determining if the Plan, or any other plan included in a Required Aggregation
Group of which this Plan is a part, is top-heavy (within the meaning of Section
416(g) of the Code) the accrued benefit of an Employee other than a Key Employee
(within the meaning of Section 416(i)(1) of the Code) shall be determined under
(i) the method, if any, that uniformly applies for accrual purposes under all
plans maintained by the Controlled Group; or (ii) if there is no such method, as
if such benefit accrued not more rapidly than the slowest accrual rate permitted
under the fractional accrual rate of Section 411(b)(1)(C) of the Code.
D. Minimum Vesting Requirements. If the Plan is a Top-heavy Plan, then
the partial vesting provisions of Paragraph A.5 of Article VI are modified to
the extent necessary to provide for vesting at a faster rate during the relevant
Plan Year under either of the following vesting schedules, as elected in
Paragraph V of Article I:
1. 3-Year Cliff Vesting. Each Employee who has completed three
(3) Years of Vested Service with the Employer shall be 100% vested in his or her
Accrued Benefit.
2. 6-Year Graded Vesting. Each Employee shall have a
non-forfeitable vested interest in his or her Accrued Benefit determined under
the following schedule:
ARTICLE VIII 93
Vested Percentage
Years of of the Participant's
Vesting Service Accrued Benefit
- --------------- --------------------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
3. Limitations on Right to Amend Vesting Schedule. The
limitations of Paragraph K of Article VI regarding the right to amend the
vesting schedule shall apply to any change in the vesting schedule caused by the
Plan becoming a Top-heavy Plan, or ceasing to be a Top-heavy Plan.
E. Minimum Benefit Requirement. If the Plan is a Top-heavy Plan, then
to the extent that the Plan benefits do not meet the minimum benefit
requirements set forth below, each Participant who is not a Key Employee shall
be provided with such minimum benefits. Key Employees shall share in the
allocation of Top-heavy minimum benefits, if any, as described in this Paragraph
E, if elected in Article I. Such minimum benefits shall be determined without
taking into account Employer contributions to or a Participant's benefits under
the Social Security Act. To the extent that the minimum benefit of any
Participant is vested in accordance with Paragraph D of this Article VIII, such
minimum Accrued Benefit may not be forfeited or suspended under Section
411(a)(3)(B) or 411(a)(3)(D) of the Code.
1. 3% Benefit. Each Participant who is not a Key Employee shall
receive an allocation of Employer contributions (and forfeitures, if applicable)
of not less than three percent (3%) or such higher percentage of such
Participant's Section 415 Compensation as elected in Article I; provided,
however, that if there is an allocation of Employer contributions (and
forfeitures, if applicable) of less than three percent (3%) of Section 415
Compensation in any Plan Year for all Employees, the allocation of such
contributions (and forfeitures, if applicable) need not exceed the highest
percentage of Section 415 Compensation at which such contributions (and
forfeitures, if applicable) are allocated or required to be allocated under the
Plan for any Key Employee. If elected in Article I, Compensation prior to a
Participant's Entry Date shall be excluded. If the Top-heavy contribution is
less than three percent (3%), then Elective Contributions made by Key Employees
shall be included in determining the Key Employee percentage of contribution. If
a Key Employee participates in a defined benefit plan which is included with
this Plan in a Top-heavy Group, a three percent (3%) minimum benefit will be
provided to each Non-Key Employee who only participates in this Plan.
All defined contribution plans required to be
included in an Aggregation Group shall be treated as one (1) plan; provided,
however, that any defined contribution plan required to be included in an
Aggregation Group where such plan enables a defined benefit pension plan to meet
the anti-discrimination requirements of Sections 401(a)(4) and 410 of the Code
shall not be taken into account.
ARTICLE VIII 94
2. Persons Covered. Notwithstanding anything to the contrary
contained in this Plan, each person who is a Participant (other than an Inactive
Participant) on the last day of the Plan Year shall have allocated to his or her
Employer Contribution Account the minimum benefits provided under this Paragraph
E even if such Participant (i) fails to complete 1,000 Hours of Service during
the Plan Year; (ii) refuses to make mandatory contributions to the Plan, if
applicable; or (iii) is excluded from participation under the Plan because his
or her Section 415 Compensation is less than a stated amount.
3. Profit Sharing and Retirement Savings Plans. Participant
Elective Contributions made pursuant to Paragraph H.2 of Article I shall be
taken into account in determining the minimum benefit requirements of Paragraphs
E and G of this Article VIII.
For Plan Years beginning after December 31, 1988, Elective
Contributions and Qualified Matching Contributions shall be treated as
contributions for purposes of determining the minimum contribution or benefits
allocated to Key Employees under Section 416 of the Code but will not be treated
as satisfying the minimum contribution or benefit requirements of Section 416 of
the Code for Non-Key Employees. However, Qualified Nonelective Employer
Contributions described in Section 401(m)(4)(C) of the Code and Matching
Contributions not used to satisfy the 401(k) and 401(m) discrimination tests may
be used to satisfy minimum contribution requirements for Non-Key Employees.
For Plan Years beginning after December 31, 1998, Safe Harbor
Matching Contributions may not be used to satisfy the top-heavy minimum
contribution or benefit requirement of Section 416 of the Code. However, Safe
Harbor Nonelective Employer Contributions may be used to satisfy such top-heavy
minimum requirements.
F. Annual Section 415 Compensation. For Plan Years beginning after
December 31, 1988, Section 415 Compensation shall be limited to the Compensation
Limitation. For Plan Years beginning after December 31, 1983 and before January
1, 1989, for purposes of determining the retirement benefits under a Top-heavy
defined benefit pension plan and the allocations of contributions (and
forfeitures, if applicable) under a Top-heavy defined contribution plan, the
maximum amount of Section 415 Compensation of any Participant shall not exceed
$200,000.00, as such amount may be annually adjusted for cost of living
increases in Plan Years at the same time and in the same manner allowed by the
Secretary of the Treasury pursuant to Regulations to be issued under Section
415(d) of the Code.
G. Multiple Plans. If this Plan is the only qualified plan of the
Employer in which a Participant who is a Non-Key Employee participates, the
minimum benefits
ARTICLE VIII 95
required by Paragraph E.1 of this Article VIII shall be provided under this
Plan. If such Participant participates in this Plan and a defined benefit plan
included in a Top-heavy Group or in another defined contribution plan of the
Employer included in a Top-heavy Group, the minimum benefits described by such
Paragraph E.1 shall be provided under the Plan designated in Article I.
1. Special Section 416 Rules. If such multiple plans, including
this Plan, consist of a defined benefit pension plan and a defined contribution
plan, the Rule of 1.0 as set forth in Article V of the Plan (as it may be
modified by the Top-heavy Plan transitional rule under Section 416(h)(3) of the
Code) shall be in effect only if the following two (2) requirements are
satisfied:
(a) The Employer shall designate in Article I whether this
Plan or another plan provides for the additional top-heavy minimum benefits for
purposes of Section 416(h) of the Code. If the Employer elects in Article I to
provide the additional top-heavy minimum benefits, and the conditions of
subparagraph (b) of this Paragraph G apply, Non-Key Employees covered only by
the Employer's defined contribution plan will receive a four percent (4%)
top-heavy minimum benefit.
(b) The sum of the cumulative Accrued Benefits and the
aggregate of accounts held for Key Employees under the plans cannot exceed 90%
of a similar sum for all Employees.
If either of the requirements of subparagraphs (a) and (b) of
this Paragraph G.1 is not met, then for purposes of the Rule of 1.0 as set forth
in Article V of the Plan, the number "1.25" as applied to the Defined
Contribution Plan Fraction and to the Defined Benefit Plan Fraction shall be
replaced by the number "1.0."
2. Repeal of the Rule of 1.0. For Limitation Years beginning
after December 31, 1999, Paragraph G.1 of this Article VIII shall no longer
apply unless otherwise elected in Article I.
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ARTICLE VIII 96
IX. DESIGNATED BENEFICIARIES
Each Participant and Inactive Participant may name a Designated
Beneficiary to receive his or her death benefits by completing a form acceptable
to the Committee. Participants shall have the right at any time to revoke such
designation or to substitute another Designated Beneficiary. If at the death of
a Participant or a Designated Beneficiary, the name of a Designated Beneficiary
or contingent Designated Beneficiary is not on file with the Committee, the
Participant shall be deemed to have named the following Designated Beneficiary,
in order of priority:
(i) The Surviving Spouse (as defined in Paragraph A.5 of Article
VII, without regard to the one-year marriage requirement);
(ii) If the Participant is not survived by a Surviving Spouse, the
trustees of the revocable living trust established by the Participant during his
or her lifetime;
(iii) The Participant's children, per stirpes;
(iv) The Participant's estate.
The Committee's determination as to which persons, if any, qualify
within the aforementioned categories shall be final and conclusive upon all
persons.
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NEXT PAGE IS 98
ARTICLE IX 97
X. CONTRIBUTIONS BY PARTICIPANTS
A. Employee After-Tax Contributions.
1. Eligibility. If allowed under Article I, all Participants are
eligible to make Employee After-Tax Contributions to the Plan by submitting an
application on forms acceptable to the Committee. All such applications shall
include the Participant's acceptance of the relevant terms and conditions of
this Plan. If such contributions are to be made by payroll deduction, such
application shall state the Participant's designation of the proportion of his
or her Section 415 Compensation which he or she shall contribute, and his or her
consent to the withholding of such contributions by the Employer. Contributions
may also be made by the Participant in a single-sum form by direct contribution.
A Participant may continue to make Employee After-Tax Contributions throughout
the period he or she is a Participant; provided, however, that a Participant
shall have the absolute right to discontinue payroll deduction Employee
After-Tax Contributions as of the end of any month following the month in which
he or she gives written notice thereof to the Employer.
2. Amount of Contributions. A Participant may contribute to the
Trust such amounts as he or she shall determine as set forth in his or her
written election; provided, however, that such amounts shall not exceed the
limitations of Paragraph E of Article V. A Participant may change the amount of
his or her Employee After-Tax Contributions withheld by payroll deduction once
during each Plan Year, and any other time permitted by the Committee, with
respect to future contributions by filing a written election with the Committee.
3. Collection of Contributions. All contributions received by the
Employer, whether by withholding or by direct payment from the Participant,
shall be paid over by the Employer to the Trustee.
B. Rollover Contributions. If allowed under Article I, any Employee who
is a Participant during any Plan Year, or any Employee who the Committee
reasonably anticipates will become a Participant, may make qualified Rollover
Contributions to the Plan. If the Committee shall determine, subsequent to any
such contribution, that such contribution did not in fact constitute a qualified
Rollover Contribution, the amount of such contribution shall be returned to the
Employee as soon thereafter as reasonably practicable. Any such qualified
Rollover Contributions shall be allocated and held on behalf of the Participant
in a Rollover Contribution Account. Said Account shall be deemed a part of the
Participant's Accrued Benefit and shall be subject to the distribution
provisions of Article VII of the Plan.
C. Separate Administration and Accounts for Participant Contributions.
The Employee After-Tax Contributions and the Rollover Contributions of a
Participant shall
ARTICLE X 98
be accounted for separately. The Committee shall establish an Employee After-Tax
Contribution Account for each Participant's Employee After-Tax Contributions and
a Rollover Contribution Account for his or her Rollover Contributions. Unless
Participant Directed Accounts are allowed under Article I, a Participant's
Employee After-Tax Contribution Account and Rollover Contribution Account shall
be invested in the general Trust Fund. On each Valuation Date, the Committee
shall determine the fair market value of such Accounts and (subject to the
following sentence) shall allocate income or losses to the respective Accounts
in proportion to the amounts therein as of the Valuation Date. Unless otherwise
provided in Article I, for the purpose of allocating income and losses, the
Accounts to which Participants' contributions are allocated shall be valued by
including only a portion of current year contributions and taking into account
Participant withdrawals, which portion shall be determined on a weighted basis
by considering the length of time (in complete months) since the making of the
contribution (or withdrawal) in relation to the number of complete months
elapsed since the last Valuation Date.
D. Vesting. A Participant's Employee After-Tax Contribution Account and
Rollover Contribution Account shall at all times be fully vested.
E. Withdrawal of Contributions. The balance of the Employee After-Tax
Contribution Account as of any Anniversary Date may be withdrawn upon 90 days
written notice to the Committee, severance of employment being automatically
deemed such notice; provided, however, that such 90 day period may be extended
by the Committee to satisfy liquidity needs of the Trust. Any Participant who
withdraws 90% of his or her Employee After-Tax Contribution Account within one
(1) Plan Year must withdraw his or her entire Employee After-Tax Contribution
Account and shall be ineligible to make Employee After-Tax Contributions for the
period ending on the Anniversary Date following one (1) year from the date of
the last such withdrawal. If this Plan is subject to Section 417 of the Code,
the withdrawal of all or any portion of a Participant's Employee After-Tax
Contributions shall be subject to the annuity provisions of Article VII of the
Plan.
F. Distribution of Rollover Contribution Accounts. When a Participant
terminates employment for any reason, his or her Rollover Contribution Accounts
shall be distributed to him or her (or in the case of death, to his or her
Designated Beneficiary) in the form designated by the Participant as required
pursuant to the provisions of Article VII of the Plan. If elected in Article I,
a Participant may receive his or her Rollover Contribution Account prior to
termination of employment.
ARTICLE X 99
G. Limitations on Section 401(m) Contributions.
1. Contribution Percentage Limitation.
(a) For Plan Years beginning prior to January 1, 1997, the
amount of Qualifying Section 401(m) Contributions made on behalf of the group of
Highly Compensated Employees shall not result in an Average Contribution
Percentage that exceeds the greater of the following:
(i) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year multiplied by 1.25; or
(ii) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year multiplied by two (2);
provided that the Average Contribution Percentage for Eligible Participants who
are Highly Compensated Employees does not exceed the Average Contribution
Percentage for Eligible Participants who are Non-Highly Compensated Employees by
more than two (2) percentage points or such lesser amount as the Secretary of
the Treasury shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Highly Compensated Employee.
(b) For Plan Years beginning after December 31, 1996, the
amount of Qualifying Section 401(m) Contributions made on behalf of the group
consisting of Highly Compensated Employees shall not result in an Actual
Deferral Percentage that exceeds the greater of the following:
(i) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the current Plan Year
shall not exceed the Average Contribution Percentage for Eligible Participants
who are Non-Highly Compensated Employees for the current or the preceding Plan
Year, as elected in Article I, multiplied by 1.25; or
(ii) The Average Contribution Percentage for Eligible
Participants who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the current or the preceding Plan Year, as
elected in Article I, multiplied by two (2); provided that the Average
Contribution Percentage for Eligible Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage for Eligible
Participants who are
ARTICLE X 100
Non-Highly Compensated Employees for the current or preceding Plan Year, as
elected in Article I, by more than two (2) percentage points or such lesser
amount as the Secretary of the Treasury shall prescribe to prevent the multiple
use of this alternative limitation with respect to any Highly Compensated
Employee.
For the first Plan Year in which the Plan (other than a
successor plan) provides for a Matching Contribution or After-Tax Employer
Contribution, the Average Contribution Percentage of Non-Highly Compensated
Employees under the prior year testing method shall be the greater of three
percent (3%) or the Average Contribution Percentage of the Non-Highly
Compensated Employees for the first Plan Year.
If the Plan provides for the prior year testing method, the
Average Contribution Percentage shall be determined without regard to changes in
the group of Non-Highly Compensated Employees who are Eligible Participants
during the testing year.
2. Matching Contributions. If elected in Article I, Matching
Contributions may be made to the Plan. Such Matching Contributions shall be
allocated in accordance with Article I.
3. Safe Harbor Matching Contributions. If Safe Harbor Matching
Contributions are made to this Plan, the Average Contribution Percentage shall
be deemed satisfied but only with respect to Matching Contributions provided
that the following requirements are met:
(a) Each Non-Highly Compensated Employee who is eligible to
receive an allocation of Safe Harbor Matching Contributions under the Plan must
be an Eligible Participant under the Plan's cash or deferred arrangement;
(b) The Plan provides for a Safe Harbor Matching
Contribution formula as described in either Section 401(k)(12)(B)(i) of the Code
(the "Basic Matching Formula") and no other required Matching Contributions are
provided under the Plan or Section 401(m)(11)(B)(ii) of the Code (the "Enhanced
Matching Formula") and with respect to the Enhanced Matching Formula, the Safe
Harbor Matching Contributions are only made with respect to Elective
Contributions or Employee After-Tax Contributions that do not exceed six percent
(6%) of the Employee's Compensation and no other required Matching Contributions
are provided under this Plan;
(c) For Plan Years beginning after December 31, 1999,
Matching Contributions made at the Employer's discretion on behalf of any
Participant may not exceed a dollar amount greater than four percent (4%) of
such Participant's
ARTICLE X 101
Compensation and are only made with respect to Elective Contributions or
Employee's After-Tax Contributions that do not exceed six percent (6%) of the
Participant's Compensation; and
(d) Effective for the Plan quarter beginning after May 1,
2000, if Safe Harbor Matching Contributions are made on a payroll period method
rather than on an annual method, then such Safe Harbor Matching Contributions
must be contributed to the Plan by the last day of the following Plan Year
quarter;
(e) Safe Harbor Matching Contributions must also satisfy the
requirements of Paragraph F of Article IV.
4. Simple 401(k) Plan. A Simple 401(k) Plan shall not be subject
to the Contribution Percentage limitation.
5. Special Rules.
(a) For purposes of determining the Contribution Percentage
limitation, Employee After-Tax Contributions are taken into account for a Plan
Year in which such amounts were contributed to the trust or paid to an agent of
the Plan and transmitted to the trust within a reasonable time after the payment
to the agent. Excess Contributions that are recharacterized are taken into
account as Employee After-Tax Contributions for the Plan Year that includes the
period for which such Excess Contributions are includable in the gross income of
the Employee.
(b) A Matching Contribution or Safe Harbor Matching
Contribution will be taken into account under the Contribution Percentage
limitation for the Plan Year only if such contribution is (i) allocated to the
Employee Account under the terms of the Plan as of any date within the Plan
Year; (ii) actually paid to the trust no later than the end of the 12-month
period beginning on the date after the close of the Plan Year; and (iii) made on
behalf of the Employee on account of such Employee's Elective Contributions or
Employee After-Tax Contributions for the Plan Year. Safe Harbor Matching
Contributions may be allocated only to Non-Highly Compensated Participants.
Matching Contributions and Safe Harbor Matching Contributions that do not
satisfy all of the preceding requirements of this subparagraph (b) may not be
taken in account for purposes of the Average Contribution Percentage limitation.
Instead, the contribution must satisfy Section 401(a)(4) of the Code without
regard to the special non-discrimination rule in this paragraph for the Plan
Year in which allocated as if they were the only Employer allocation for that
Plan Year.
H. Correction of Excess Aggregate Contributions. If the Committee
recharacterizes Excess Contributions as described in Paragraph J.5 of Article
IV, the recharacterized amount shall be subject to the Contribution Percentage
limitation of
ARTICLE X 102
Section 401(m) of the Code. Excess Contributions recharacterized as Employee
After-Tax Contributions shall be included in determining the amount of Excess
Aggregate Contributions for the Plan Year that ends with or within the Plan Year
for which the Contribution Percentage limitation is applied.
The Committee may correct Excess Aggregate Contributions by
distributing the Excess Aggregate Contributions and income allocated thereto to
the appropriate Highly Compensated Employee after the close of the Plan Year but
not more than 12 months after the close of the Plan Year. The return of Excess
Aggregate Contributions to the Highly Compensated Employee shall be determined
using the same method applied to the return of Excess Contributions.
The Committee may correct Excess Aggregate Contributions by the
forfeiture of nonvested Matching Contributions (and income allocable thereto).
Such forfeitures shall be made only to the extent necessary to avoid failure of
the Contribution Percentage limitation. The forfeiture of Excess Aggregate
Contributions to the Highly Compensated Employee shall be determined using the
same method applied to the return of Excess Contributions.
I. Reserved.
J. Distribution of Income. Any distribution or forfeiture of Excess
Aggregate Contributions must include the income or loss allocated to such
contributions. Allocable income or loss includes income or loss both from the
Plan Year in which the Contribution Percentage limitation was exceeded and for
the gap period between the end of the Plan Year and the date of distribution.
Allocable income or loss for the Plan Year is determined by multiplying the
income or loss for the Plan Year allocable to Qualifying Section 401(m)
Contributions by a fraction, the numerator of which is the Excess Aggregate
Contributions made on behalf of an Employee for the Plan Year and the
denominator of which is the total Account balance attributed to Qualifying
Section 401(m) Contributions as of the end of the Plan Year minus the income or
plus the loss allocable to such account balance for the Plan Year. The Committee
may determine the allocable income or loss for the gap period by using the
fractional method, as prescribed in the preceding sentence, for the period
between the end of the Plan Year and the last day of the month preceding the
distribution date that is allocable to Qualifying 401(m) Contributions.
Alternatively the Committee may determine income or loss for the gap period
under a safe-harbor method, under which income on Excess Aggregate Contributions
for the gap period is equal to 10% of the income or loss allocable to Excess
Aggregate Contributions calculated under the fractional method as described
above in this paragraph for the Plan Year, times the number of calendar months
between the end of the Plan Year and the date of distribution counting whole
months only and treating distributions made on or before the 15th day of the
month as made on the last day of the preceding month and distributions made
after the first 15
ARTICLE X 103
days of the month as occurring on the first day of the next month.
Notwithstanding the preceding, the Committee may exclude gap period income so
long as such exclusion is applied consistently to all Participants and
corrective distributions for the Plan Year. The income allowable to Excess
Aggregate Contributions resulting from the recharacterization of Elective
Contributions shall be determined and distributed as if such recharacterized
Elective Contributions had been distributed as Excess Contributions.
Notwithstanding the preceding paragraph, the Committee may use any
reasonable method for computing income allocable to Excess Aggregate
Contributions provided the method is non-discriminatory and is applied
consistently to all Participants and corrective distributions for the Plan Year.
Such reasonable method may include or exclude gap period income.
K. Coordination with Section 401(a)(4) of the Code. Matching
Contributions attributable to Employee After-Tax Contributions or Elective
Contributions which are returned to the Highly Compensated Employee shall not
remain allocated to the Highly Compensated Employee. The distribution of a
matched Employee After-Tax Contribution or Elective Contribution to a Highly
Compensated Employee must include the corresponding Matching Contribution.
Unmatched Employee After-Tax Contributions shall be distributed first. To the
extent necessary, matched Employee After-Tax Contributions shall be distributed,
in which case the distribution must be made proportionately from the matched and
Matching Contributions. A Matching Contribution that is forfeited to cover an
Excess Aggregate Contribution is not taken into account under the Contribution
Percentage limitation.
If an Elective Contribution is returned to a Highly Compensated
Employee and a corresponding Matching Contribution relates to such Elective
Contribution, the Committee may forfeit such Matching Contribution regardless of
vesting in order to satisfy Section 401(a)(4) of the Code.
L. Additional Qualified Nonelective Employer Contributions. Rather than
returning Excess Aggregate Contributions, the Committee, in its sole discretion,
may make additional Qualified Nonelective Employer Contributions or may apply
Elective Contributions to satisfy the Contribution Percentage limitation
provided that the Qualified Nonelective Employer Contributions and Elective
Contributions that will be treated as Matching Contributions are made with
respect to Employees who are Eligible Participants under the Plan. Furthermore,
such contributions will be treated as Matching Contributions only if the
additional requirements described below are satisfied:
1. The Nonelective Employer Contributions including Qualified
Nonelective Employer Contributions treated as Matching Contributions shall
satisfy Section 401(a)(4) of the Code and, for Plan Years beginning after
December 31, 1993
ARTICLE X 104
or such later effective date as determined by the Commissioner of Internal
Revenue, Section 1.401(a)(4)-1(b)(2) of the Treasury Regulations.
2. The Nonelective Employer Contributions excluding Qualified
Nonelective Employer Contributions treated as Matching Contributions for the
Contribution Percentage limitation and Qualified Nonelective Employer
Contributions treated as Elective Contributions for the Actual Deferral
Percentage limitation shall satisfy Section 401(a)(4) of the Code and for Plan
Years beginning after December 31, 1993, or such later effective date as
determined by the Commissioner of Internal Revenue, Section 1.401(a)(4)-1(b)(2)
of the Treasury Regulations.
3. The Elective Contributions including those treated as Matching
Contributions for purposes of the Contribution Percentage limitation shall
satisfy Section 401(k)(3) of the Code.
4. Qualified Nonelective Employer Contributions shall be
allocated to the Employee within the Plan Year, and the Elective Contributions
shall relate to Compensation for the Plan Year or Compensation that would have
been received within 2 1/2 months after the Plan Year and are allocated within
the Plan Year.
5. For Plan Years beginning after December 31, 1988, the plan
which treats Qualified Nonelective Employer Contributions and Elective
Contributions as Matching Contributions and the plan to which the Qualified
Nonelective Employer Contributions and Elective Contributions are made must have
the same Plan Year. If the Plan Year is changed to satisfy this requirement,
such contributions may be taken into account during the short Plan Year if they
satisfy the allocation requirements for Elective Contributions.
6. If the Employer has elected to apply the prior year testing
method to calculate the Percentage Contribution limitation, Qualified
Nonelective Employer Contributions must be made no later than twelve (12) months
following the last day of the Plan Year preceding the current Plan Year to
satisfy the Percentage Contribution limitation. If the Employer has elected to
apply the current year testing method to calculate the Percentage Contribution
limitation, Qualified Nonelective Employer Contributions must be made no later
than twelve (12) months following the close of the current Plan Year to satisfy
the Percentage Contribution limitation.
M. Correction of Excess Aggregate Contribution Prior to the Plan Year.
If the Committee determines that the Contribution Percentage is being exceeded
during the Plan Year, the Committee may suspend the group of Highly Compensated
Employees by suspending Matching Contributions or Employee After-Tax
Contributions or any other contributions which result in additional
contributions under Section 401(m) of the Code to satisfy the Contribution
Percentage limitation. The Committee shall give notice
ARTICLE X 105
to such Employees of the amounts to be reduced. The determination of the
reduction shall be made in accordance with the same method used for the return
of Excess Aggregate Contributions or pro rata as elected in Article I.
N. Coordination with Correction of Excess Contributions and Excess
Deferrals. The determination of the amount of Excess Aggregate Contributions
with respect to a Plan Year shall be made after determining the Excess
Contribution, if any, to be treated as an Employee After-Tax Contribution due to
recharacterization under Section 401(k) of the Code for the Plan Year subject to
Section 401(k) of the Code ending with the Plan Year being tested under Section
401(m) of the Code. Excess Aggregate Contributions attributed to amounts other
than Employee After-Tax Contributions, including forfeited Matching
Contributions, shall be treated as Employer Contributions for purposes of
Sections 404 and 415 of the Code even if distributed from the Plan.
O. Prevention of Multiple Use.
1. Multiple Use Condition. Multiple use of the alternative
limitation occurs if all of the following conditions of this Paragraph O are
satisfied:
(a) One (1) or more Highly Compensated Employees of the
Employer or a Controlled Group are eligible both in a cash or deferred
arrangement subject to Section 401(k) of the Code and in any plan maintained by
such Employer subject to Section 401(m) of the Code.
(b) The sum of the Actual Deferral Percentage of the entire
group of eligible Highly Compensated Employees under the arrangement subject to
Section 401(k) of the Code and the Average Contribution Percentage of the entire
group of eligible Highly Compensated Employees under the Plan subject to Section
401(m) of the Code exceeds the aggregate limit of Paragraph O.2 of this Article
X.
(c) The Actual Deferral Percentage of the entire group of
eligible Highly Compensated Employees under the arrangement subject to Section
401(k) of the Code exceeds the 1.25 test as described in Section
401(k)(3)(A)(ii)(l) of the Code.
(d) The Average Contribution Percentage of the entire group
of eligible Highly Compensated Employees under the arrangement subject to
Section 401(m) of the Code exceeds the 1.25 test as described in Section
401(m)(2)(A)(i) of the Code.
2. Aggregate Limit. For purposes of this Paragraph O, the
aggregate limit is the greater of:
ARTICLE X 106
(a) The sum of:
(i) 125% of the greater of (A) the Actual Deferral
Percentage of the group of Non-Highly Compensated Employees eligible under the
arrangement subject to Section 401(k) of the Code for the Plan Year; or (B) the
Average Contribution Percentage of the group of Non-Highly Compensated Employees
eligible under the Plan Year subject to Section 401(m) of the Code for the Plan
Year beginning with or within the Plan Year of the arrangement subject to
Section 401(k) of the Code; and
(ii) Two (2) plus the lesser of clauses (A) or (B) of
Paragraph O.2(a)(i) above. In no event, however, shall this amount exceed 200%
of the lesser of such clauses (A) or (B); or
(b) The sum of:
(i) 125% of the lesser of (A) the Actual Deferral
Percentage of the group of eligible Non-Highly Compensated Employees under the
arrangement subject to Section 401(k) of the Code for the Plan Year; or (B) the
Average Contribution Percentage of the group of eligible Non-Highly Compensated
Employees under the Plan subject to Section 401(m) of the Code for the Plan Year
beginning with or within the Plan Year of the arrangement subject to Section
401(k) of the Code; and
(ii) Two (2) plus the greater of clauses (A) or (B) of
Paragraph O.2(b)(i) above. In no event, however, should this amount exceed 200%
of the greater of such clauses (A) or (B).
The Actual Deferral Percentage and the Average Contribution
Percentage of the group of eligible Highly Compensated Employees shall be
determined after the use of Qualified Nonelective Employer Contributions and
Qualified Matching Contributions to meet the requirements of Section
401(k)(3)(A)(ii) of the Code and after using Qualified Nonelective Employer
Contributions and Elective Contributions to meet the requirements of Section
401(m)(2)(A) of the Code. The Actual Deferral Percentage and the Average
Contribution Percentage of the group of eligible Highly Compensated Employees
shall be determined after any corrective distribution of Excess Deferrals,
Excess Contributions or Excess Aggregate Contributions and after any
recharacterization of Excess Contributions required without regard to this
paragraph. If the Employer maintains two (2) or more plans subject to Section
401(k) or 401(m) of the Code, then multiple use shall be tested separately with
respect to each Section 401(k) arrangement and each plan or aggregate group of
plans if the Section 401(k) arrangement and each plan subject to Section 401(m)
of the Code are not aggregated.
ARTICLE X 107
If a multiple use of the alternative limitation occurs with
respect to this Plan or with respect to two (2) or more plans or arrangements
maintained by the Employer, such multiple use shall be corrected by reducing the
Actual Deferral Percentage or the Average Contribution Percentage of Highly
Compensated Employees. The amount of the reduction to the Actual Deferral
Percentage or the Average Contribution Percentage of the entire group of Highly
Compensated Employees shall be calculated in a manner consistent with the method
as stated in this Plan. The Employer may elect to reduce the actual deferred
ratios or the Contribution Percentage ratios, as designated in Article I, either
for all Highly Compensated Employees under the Plan and/or arrangements subject
to the reduction or for only those Highly Compensated Employees who are eligible
in both the arrangements subject to Section 401(k) of the Code and the Plan
subject to Section 401(m) of the Code.
Notwithstanding the preceding paragraph, the Employer may make
Qualified Nonelective Employer Contributions to correct the multiple
limitations.
The restrictions of multiple use do not apply if Safe Harbor
Nonelective Employer Contributions are provided to satisfy the Actual Deferral
Percentage limitation or Safe Harbor Matching Contributions are either provided
to satisfy the Actual Deferral Percentage limitation or the Contribution
Percentage limitation, provided that the Plan does not provide for Employee
After-Tax Contributions.
P. Aggregation Rules for Section 401(m) Contributions. If the Employer
maintains two (2) or more plans to which Employee After-Tax Contributions or
Matching Contributions are made, then the plans may be considered as a single
plan for purposes of determining whether or not such plans satisfy Sections
401(a)(4), 401(m) or 410(b) of the Code, other than Section 410(b)(2)(A) of the
Code. In such case, the aggregated plans must satisfy the Contribution
Percentage limitation with respect to the amount of the Employee After-Tax
Contributions and Matching Contributions and additionally must satisfy Sections
401(a)(4) and 410(b) of the Code as though such aggregated plans were a single
plan. Whenever a Highly Compensated Employee is eligible under two (2) or more
plans of the Employer which are subject to Section 401(m) of the Code, in
calculating the Contribution Percentage limitation, the actual contribution
ratio of such Highly Compensated Employee will be determined by treating all
such plans in which such Highly Compensated Employee is an Eligible Participant
as a single plan.
Except for certain plans in existence on November 1, 1977, for
Plan Years beginning after December 31, 1988, contributions allocated under a
plan described in Section 4975(e)(7) of the Code cannot be combined with
contributions or allocations under any plan not described in Section 4975(e)(7)
of the Code including required aggregation of a Highly Compensated Employee.
However, a plan described in
ARTICLE X 108
Section 4975(e)(7) of the Code may provide for contributions as described in
Section 401(k)(12) of the Code. Mandatory disaggregation shall also apply to
plans described under Sections 1.401(m)-1(b)(3)(ii) and 1.401(k)-1(g)(11)(iii)
of the Treasury Regulations. However, for Plan Years beginning after December
31, 1990, for purposes of the average benefit percentage test under Section
410(b)(2)(A)(ii) of the Code, a plan described in Section 4975(e)(7) of the Code
shall be aggregated. For Plan Years beginning before January 1, 1991, the
Employer shall have the option to aggregate such plans for purposes of the
average benefit percentage test. Plans that are to be aggregated may only be
aggregated if they have the same Plan Year.
The rules regarding the aggregation and disaggregation of cash
or deferred arrangements and plans shall also apply for purposes of Sections
401(k)(12) and 401(m)(11) of the Code.
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ARTICLE X 109
XI. LIFE INSURANCE POLICIES
A. Investment and Ownership of Life Insurance Policies. The Committee
may direct the Trustee to purchase life insurance policies on the life of an
individual Participant. The Trustee shall be the applicant for any policies
purchased, and each Participant for whom such policy is purchased shall direct
in writing that the Trustee shall be recognized by the insurer as the owner of
the policy having the power to exercise all rights, privileges, options,
elections and other incidents of ownership granted by or permitted under the
policy. The Trustee shall also be named as the Beneficiary in the application
for such policy; provided, however, that the Participant shall have the right to
nominate the Designated Beneficiary pursuant to Article IX of the Plan.
B. Payment of Premiums. Upon receipt of notice of the premiums due the
insurer for the initial premium on policies purchased pursuant to this Article
XI and upon direction of the Committee, the Trustee shall pay such premiums to
said insurer. The policies shall be delivered to the Trustee, and any notices of
premiums falling due under such policies thereafter shall be addressed to and
such premiums shall be paid by the Trustee.
C. Accounting for Policies. The value of any policies purchased by the
Trustee pursuant to this Article XI shall be included in the annual valuations
of the Plan.
D. Discrimination. To the extent that policies are purchased, there
shall be no discrimination between Participants as to the form, optional methods
of settlement, or other provisions of said policies. However, any Participant
may refuse any offer to purchase contracts for his or her benefit. Such refusal
must be in writing and, when tendered, shall satisfy the anti-discrimination
intent of the first sentence of this Paragraph D.
E. Disposition Upon Retirement or Total Disability. If any Participant
with respect to whom a policy is held by the Trustee ceases to be a Participant
as a result of termination of employment (other than by death) on or after
Normal Retirement Age or Total Disability, the Trustee pursuant to the direction
and discretion of the Committee shall either (i) dispose of, or convert, such
policy or policies to the extent necessary or desirable in order that the
proceeds of such disposition or conversion may be used to provide retirement or
disability benefits to the Participant in accordance with the provisions of this
Plan; or (ii) distribute such policy or policies to the Participant, provided
such policy complies with Paragraph B.4(b) of Article VII.
F. Disposition Upon Other Separation From Service. Death benefits
payable from policies on the life of a Participant shall cease as of the date of
the Participant's separation from service for any reason other than death, Total
Disability or termination
ARTICLE XI 110
of employment on or after Normal Retirement Age. In such event, the Trustee,
subject to the direction and discretion of the Committee, shall make one (1) of
the following dispositions of such policy or polices:
1. Surrender each such policy to cash or designate itself as
Beneficiary of each such policy.
2. Offer to such Participant all such policies at a price
(hereafter referred to as the "purchase price") equal to the cash value if the
policy is whole life or accumulation value if the policy is interest sensitive
or universal life. If the Participant accepts such offer, the purchase price
shall be charged against his or her vested interest in that portion of the value
of his or her Accrued Benefit not represented by such policies, and any excess
of such purchase price over such vested interest shall be paid by the
Participant to the Trustee in cash within 10 days after accepting such offer. If
the offer is so accepted and any required payment made, the Trustee shall
transfer ownership of such policies to such Participant. If such Participant
does not accept such offer within 30 days after written notice from the
Committee, the Trustee shall take such action as the Committee may direct to
liquidate such policies in order to distribute to such Participant the amount to
which he or she is entitled pursuant to this Plan.
3. Effect a policy loan upon all such policies from the insurer
on the sole security of the policies in an amount determined by applying to the
then cash value of each such policy a percentage equal to the excess of 100%
over the percent vested in such Participant in accordance with the schedule of
vesting set forth in this Plan. The loan proceeds shall go to and become the
property of the Trust, and the Trustee shall, after effecting such loan, deliver
such policy to the Participant subject to such loan.
G. Policy Loans. Except as provided in Paragraph F.3 of this Article
XI, policy loans under the loan provisions, if any, may be made by the Trustee
proportionately against all contracts held by the Trust and solely for the
purpose of paying premiums under such contracts. No loan shall be made on any
policy on the life of any Participant to pay premiums on the life of any other
Participant.
H. Insurer Not a Party. The insurer shall not be deemed a party to this
Plan, and its obligation shall be measured and determined solely by the terms of
its policies. The insurer shall deal with the Trustee as the sole and absolute
owner of the policies, and the insurer shall be under no obligation of inquiring
or determining whether any action or failure to act on the part of the Trustee
is in accordance with or authorized by the terms of this Plan. The insurer shall
be fully discharged from any and all liability for any action taken or any
amount paid in accordance with the direction of the Trustee, and the insurer
shall not be obligated to see to the distribution or application of any money so
paid. The insurer shall be fully discharged of all liability in dealing with the
ARTICLE XI 111
Trustee, as indicated on its records, until such time as it shall receive
satisfactory evidence of the appointment and acceptance of a successor Trustee.
I. Reserved.
J. Insurance Limitations. If the Committee directs the Trustee to
purchase life insurance, the following limitations shall apply:
1. The cumulative premium for ordinary life insurance contracts
shall be less than 50% of the aggregate Employer contributions allocated to any
Participant;
2. The cumulative premium for term and universal life insurance
shall be less than 25% of the aggregate Employer contributions allocated to any
Participant;
3. The cumulative premium for a combination of ordinary life
insurance and term and universal life insurance contracts shall be less than 25%
of the aggregate Employer contributions allocated to any Participant. However,
for purposes of this Paragraph J.3, 50% of the premium paid for the ordinary
life insurance policies shall be excluded from the calculations.
4. If the level annual premiums (with respect to a Participant)
required to be paid on account of life insurance policies exceed the limitations
described in this Paragraph J, then at the election of the Committee:
(a) Employee contributions of the Participant, if available,
shall be used to sustain the level of such premiums, and if not available, the
insurer shall adjust the face amount of the policies to a basis consistent with
the reduced contributions applicable to payment of premiums and shall credit
resulting excess cash values to succeeding premiums due under the policies; or
(b) The Committee may direct the Trustee to request the
insurer to convert the existing insurance policies to paid-up policies other
than term insurance and issue new policies for the lower premiums at the
attained age of the Participant; or to pay over the entire cash values to the
Trustee upon surrender of the policies.
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ARTICLE XI 112
XII. TRUST
A. Payment of Contributions. All contributions under this Plan shall be
paid to the Trustee to be held in trust under a Trust Agreement executed by the
Employer and the Trustee, which Trust Agreement shall be incorporated herein by
this reference.
B. Participant Directed Accounts. If allowed under Article I, each
Participant shall have the right and power to direct the investment of all
assets of the designated Accounts which have been allocated to and set aside in
his or her name. Such power to direct investments shall be made in accordance
with the provisions of the Trust Agreement and shall not include the power to
invest in "collectibles" as defined in Section 408(m) of the Code and may be
limited as described in the following paragraph.
The Committee may establish nondiscriminatory rules and procedures
relating to Participants directing investments, Participants selecting brokers,
Participants appointing investment managers and Plan fiduciaries meeting their
duties under ERISA Section 404(c) and its regulations.
The Committee shall have the sole discretion to modify and replace
any and all of these rules and procedures without further amendment to the Plan
or Trust. The Committee shall notify the Trustee and Participants within a
reasonable time after the adoption of any change to these rules and procedures.
Inactive Participants are solely responsible for informing the Committee of
current addresses where changes in these rules and procedures may be sent.
The Participant's right to direct the investment of their Accounts
may be limited by the Committee's selection of investment options. The Committee
shall have the sole discretion to delete or substitute investment options
without further amendment to the Plan or Trust. Notice shall be given to
Participants within a reasonable time after the adoption by the Committee of any
changes in investment options. Inactive Participants shall have the sole
responsibility for keeping the Committee informed of their current addresses for
the Committee's use in informing such Inactive Participants of any changes in
investment options.
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ARTICLE XII 113
XIII. THE ADMINISTRATIVE COMMITTEE
A. Committee Membership. The Sponsoring Employer shall appoint an
administrative Committee of one (1) or more persons, some or all of whom may be
officers or involved in management of the Employer; provided, however, that the
Committee may be comprised of members of the Board, and the Employer may
designate its Board to serve as the Committee as the same may be constituted
from time to time. The Employer shall certify to the Trustee the names and
specimen signatures of the members of the Committee. The Committee shall serve
at the pleasure of the Employer and any members of the Committee may resign by
written instrument addressed to the Employer and may be removed by the Employer
with or without cause. While a vacancy exists, the remaining member(s) of the
Committee may perform any act which the Committee is authorized to perform.
B. Named Fiduciary and Plan Administration. The Sponsoring Employer is
the named fiduciary, administrator of the Plan, and agent to receive service of
legal process and, except as otherwise provided for herein, shall have the
authority to control and manage the operation and administration of the Plan.
The Committee, as agent for the administrator and subject to the administrator's
approval, shall make such rules, regulations, interpretations and computations
and shall take such other action to administer the Plan as the Committee may
deem appropriate in its sole discretion. The Committee shall administer the Plan
in a non-discriminatory manner consistent with the requirements of Section
401(a) of the Code. The Committee shall resolve by majority vote all questions
involving the interpretation, application and administration of the Plan. The
Committee's resolution of such questions shall be final and binding upon the
Participants, their Beneficiaries, and the successors, assigns, heirs and
personal representatives of any of them. Subject to the provisions of Paragraph
B of Article XII and the Committee's right to delegate responsibility as set
forth in the Trust, the Committee shall direct the investment of the assets of
the Trust by written direction to the Trustee.
C. Compensation. The members of the Committee shall receive no
compensation for acting as such, but the Employer shall reimburse the Committee
for all necessary and proper expenses incurred in administering this Plan.
D. Delegation of Duties. The Committee may, from time to time, allocate
to one (1) or more of its members and may delegate to any other persons or
organizations any of its rights, powers, duties and responsibilities with
respect to the operation and administration of the Plan. Any such allocation and
delegation of responsibilities shall be reviewed at least annually by the
Committee and shall be revocable upon such notice as the Committee, in its sole
discretion, deems reasonable and prudent under the circumstances. The Committee,
on its own behalf or on behalf of the Trustee, may employ such persons or
organizations to render advice or perform services with respect
ARTICLE XIII 114
to responsibilities of the Committee under the Plan as the Committee, in its
sole discretion, determines to be necessary and appropriate; provided, however,
that the Committee must employ an enrolled actuary to perform the actuarial
functions required by ERISA. Such persons or organizations may include, without
limitation, attorneys, accountants and financial and administrative consultants.
All or any portion of the expenses incurred for such services or
advice shall be borne by the Employer, if it so elects, and if the Employer does
not so elect, such expenses shall be borne by the Trust. Expenses incurred for
the administration of the Plan shall be deemed a liability of the Plan until
such time as the expenses are paid by the Plan either as direct payments to the
service providers or as reimbursements to the Employer in cases where the
Employer has directly paid the service providers; provided, however, that
reimbursements paid to the Employer must occur by the last day of the Plan Year
following the later of the Plan Year during which such services were performed
or the Plan Year during which the Employer paid such expenses.
E. Bonding of Fiduciaries. The Committee shall be responsible for
seeing that every fiduciary of the Plan and Trust and every person who handles
Trust assets shall be bonded to the extent required by the provisions of Section
412 of ERISA. The cost of such bond shall be paid by the Trustee out of Trust
assets, upon direction of the Committee, if the cost thereof shall not be timely
paid by the Employer.
F. Action By Committee Members. If the Committee is comprised of more
than one (1) member, any one (1) member may execute any form, document or other
paper on behalf of the Committee and thereby bind the Committee, if the Board or
the other Committee members unanimously delegate such authority in writing.
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ARTICLE XIII 115
XIV. AMENDMENT AND TERMINATION; RETURN OF EMPLOYER
CONTRIBUTIONS; PARTICIPATING EMPLOYERS
A. Amendment. The Sponsoring Employer reserves the right to amend this
Plan by written instrument, at any time and from time to time, in whole or in
part, including without limitation, retroactive amendments necessary or
advisable to qualify this Plan and the Trust under the provisions of Section
401(a) of the Code. However, no such amendment shall (i) reduce the Accrued
Benefit of any Participant to the date the amendment is adopted, except to the
extent that a reduction may be permitted or required by ERISA and the Code; or
(ii) divert any part of the Trust assets to purposes other than for the
exclusive benefit of the Participants, retired Participants or their joint
annuitants or Beneficiaries who have an interest in the Plan or for the purpose
of defraying reasonable expenses of administering the Plan. Further, no
amendment of the Plan shall alter, change or modify the duties, powers or
liabilities of the Trustee without its consent, or permit any part of the Trust
to be used to pay premiums or contributions of the Employer under any other plan
maintained by the Employer for the benefit of its Employees.
If this Plan is an amendment and restatement of a prior Plan that
provided for an optional form of benefit after July 30, 1994 that is not
provided herein, and such form of benefit cannot be eliminated under Section
411(d)(6) of the Code and Treasury Regulations issued pursuant thereto, then
such optional form of benefit shall continue to be available under this Plan to
the extent necessary to satisfy Section 411(d)(6) of the Code.
B. Termination or Partial Termination or Complete Discontinuance of
Contributions. The Employer has established the Plan with a bona fide intention
and expectation that it will be able to make contributions indefinitely.
Nevertheless, the Employer is not and shall not be under any obligation or
liability whatsoever to continue making contributions or to maintain the Plan
for any given length of time. The Employer may in its sole and exclusive
discretion discontinue such contributions, or terminate or partially terminate
the Plan in accordance with its provisions, the Code and ERISA, if applicable,
at any time without any liability whatsoever for any such discontinuance,
termination or partial termination. If the Plan shall be terminated, partially
terminated or the contributions of the Employer shall be completely
discontinued, the rights of all affected Participants in their Accrued Benefits
shall thereupon become fully vested and nonforfeitable notwithstanding any other
provisions of this Plan. However, the Trust shall continue until all
Participants' Accounts have been completely distributed to or for the benefit of
the Participants or their Designated Beneficiaries in accordance with this Plan,
unless the Board specifies that distributions shall occur as a result of such
Plan termination.
ARTICLE XIV 116
Notwithstanding the foregoing, in the event the Plan is terminated,
the administrative Committee shall remain in existence and all of the provisions
of the Plan which in the opinion of said Committee are necessary to effectuate
the termination of the Plan and the administration and distribution of Plan
benefits shall remain in force. In addition, the Board of Directors and the
Committee reserve the right to further amend or modify the Plan, including the
adoption of any retroactive amendments or modifications, to the extent necessary
or desirable to effectuate the termination of the Plan or if necessary or
appropriate to qualify or maintain the Plan and the Trust Fund as a plan and
trust meeting the requirements of Sections 401(a) and 501(a) of the Code or any
other applicable law (including ERISA) and the Regulations issued thereunder,
and any amendment necessary or advisable to conform the Plan to prior
administrative practice shall be retroactive.
C. Return of Employer Contributions. Except as set forth in Paragraphs
C.1, 2, 3 and 4 of this Article XIV, the assets of the Plan and Trust shall
never inure to the benefit of the Employer and the same shall be held for the
exclusive purpose of providing benefits to Participants and their Designated
Beneficiaries and defraying reasonable expenses of administering the Plan and
Trust.
1. Mistake of Fact. If a contribution is made by the Employer by
a mistake of fact, the Trustee shall, on written direction of the Committee,
return such contribution to the Employer, provided such return of contribution
is made within one (1) year after the payment of such contribution.
2. Initial Qualification. Employer contributions shall be
conditioned on the initial qualification of the Plan under Section 401 of the
Code. If it is finally determined that the Plan is not initially qualified by
the Commissioner of Internal Revenue, then such contributions shall be returned
to the Employer no later than one (1) year after such final determination but
only if the application for determination was filed by the time prescribed by
law for filing the Employer's return for the taxable year in which the Plan is
adopted or such later date as the Secretary of the Treasury may prescribe.
3. Deductibility. Employer contributions shall be conditioned
upon the deductibility of such contributions under Section 404 of the Code. If
such deductions are disallowed, then such contributions (to the extent
disallowed) shall be returned to the Employer no later than one (1) year after
the final disallowance of the deductions.
4. Suspense Accounts. If, upon termination of the Plan, there
remain Trust assets held in suspense accounts because of the application of
Section 415 of the Code, the Trustee shall return such assets to the Employer.
ARTICLE XIV 117
D. Procedure for Adoption and Withdrawal by Participating Employers.
1. Adoption of the Plan. Any member or future member of the
Controlled Group, which is not already a Participating Employer under this Plan
may, with the consent and approval of the Sponsoring Employer, adopt this Plan
as a Participating Employer for all or any classification of persons in its
employ. The adoption of this Plan by a Participating Employer shall be effected
by resolution of its board of directors or other written instrument if the
Participating Employer is an Unincorporated Entity. It shall not be necessary
for any adopting Participating Employer to formally execute the Plan or Trust as
then in effect. As to the Participating Employer, the Effective Date of the Plan
shall be stated in its resolutions, and it shall assume all the rights,
obligations and liabilities of a Participating Employer under the Plan and
Trust.
2. Withdrawal from the Plan. At any time, a Participating
Employer, by resolution of its board of directors and notice to the Sponsoring
Employer and Trustee, may withdraw from participation under the Plan. A
withdrawing Participating Employer may arrange for the continuation of this Plan
and Trust in a separate form for its own employees. The withdrawing
Participating Employer may arrange for continuation of the Plan and Trust by
merger with an existing plan and trust and may request, subject to the
Sponsoring Employer's consent, the transfer to such plan and trust of all Trust
assets representing the benefits of its employees.
3. Continued Qualification of the Plan. The Sponsoring Employer
may request a determination from the appropriate District Director of the
Internal Revenue Service to the effect that the Plan and Trust as adopted (and
amended, as the case may be) by the Participating Employer continues to meet the
requirements of tax-qualified status. If such determination is denied, the
adoption by the Participating Employer shall become void and inoperative and any
contributions made by or for the Participating Employer shall be promptly
refunded by the Trustee. Furthermore, if the Plan or the Trust in its operation
becomes disqualified under the Code for any reason because of the Plan's
adoption by any Participating Employer, the portion of the Trust allocable to
Participants employed by such Participating Employer shall be segregated as soon
as is administratively feasible, pending the:
(a) Correction of the conditions which caused the Plan's
disqualification to the satisfaction of the Internal Revenue Service; or
(b) Re-qualification of the Plan; or
(c) Withdrawal of such Participating Employer from the Plan
and a continuation by itself or its successor of a separate qualified plan, or
by merger with another existing qualified plan; or
ARTICLE XIV 118
(d) Termination of the Plan and Trust as to such
Participating Employer and its Employees.
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ARTICLE XIV 119
XV. STANDARD OF CONDUCT OF FIDUCIARIES
A. Fiduciaries. Each member of the Board and of the Committee and any
other person to whom any fiduciary responsibility with respect to the Plan or
Trust is allocated or delegated shall discharge his or her duties and
responsibilities with respect to the Plan or Trust in accordance with the
standards set forth in Section 401(a)(1) of ERISA and Paragraph B of this
Article XV.
B. Fiduciary Duties. Subject to Sections 403(c) and (d), 4042, and 4044
of ERISA, a fiduciary shall discharge his or her duties with respect to the Plan
solely in the interest of the Participants and Beneficiaries and:
1. For the exclusive purpose of:
(a) Providing benefits to Participants and their
Beneficiaries; and
(b) Defraying reasonable expenses of administering the Plan;
2. With the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims;
3. By diversifying the investments of the Plan so as to minimize
the risk of large losses, unless under the circumstances it is clearly prudent
not to do so; and
4. In accordance with the documents and instruments governing the
Plan insofar as such documents and instruments are consistent with the
provisions of this title.
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ARTICLE XV 120
XVI. MERGERS, CONSOLIDATIONS AND TRANSFERS OF ASSETS
A. Merger or Consolidation of the Plan. If this Plan and its Trust
merge or consolidate with, or transfer assets or liabilities to, any other
qualified plan of deferred compensation, no Participant shall, solely on account
of such merger, consolidation or transfer, be entitled to a benefit on the date
following such event which is less than the benefit to which he or she was
entitled on the date preceding such event, such benefits to be determined as if
the Plan had terminated on the date preceding such event (except that there
shall be no grant of full vesting).
B. Transfers From Other Qualified Plans - Rollovers. There may be
transferred to the Trustee, subject to the approval of the Employer, all or any
of the assets held (whether by a trustee, custodian or otherwise) on behalf of
any other plan which satisfies the applicable requirements of Section 401(a) of
the Code, or any qualified Rollover Contributions which are maintained for the
benefit of any persons who are or are about to become Participants. The Employer
may require proof that a prior determination was made by the Internal Revenue
Service that such transfer will not affect the qualified status of the Plan and
Trust. Any such transfer of assets or Rollovers shall be held and administered
in accordance with Article X of the Plan.
C. Transfer To Eligible Retirement Plans. Upon direction of the
Participant delivered to the Committee, the Trustee is hereby authorized to
transfer the assets representing the Vested Accrued Benefit of any Participant
under this Plan to the Trustee of an Eligible Retirement Plan.
D. Transfer or Merger of Money Purchase Pension Plan to this Plan.
Notwithstanding any provision of this Plan to the contrary, to the extent that
any optional form of benefit under this Plan permits a distribution prior to
Normal Retirement Age, death, disability, severance from employment or Plan
termination, such optional form of benefit shall not be available with respect
to benefits attributable to assets (including the earnings thereon) and
liabilities that are transferred, within the meaning of Section 414(l) of the
Code, to this Plan from a money purchase pension plan qualified under Section
401(a) of the Code (other than any portion of those assets and liabilities
attributable to voluntary employee contributions).
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ARTICLE XVI 121
XVII. MISCELLANEOUS
A. Limitation of Rights and Employment Relationship. Neither the
establishment of the Plan and Trust nor any modification thereof, nor the
creating of any fund or account, nor the payment of any benefits shall be
construed as giving to any Participant or other person any legal or equitable
right against the Employer or the Trustee except as provided in the Plan and
Trust Agreement; and in no event shall the terms of employment of any Employee
or Participant be modified or in any way be affected by the provisions of the
Plan or Trust Agreement.
B. Payments to Missing Persons. If the Trustee is unable to effect
deliver of any distribution to the person entitled to receive it or, upon such
person's death, to such person's Designated Beneficiary, it shall so advise the
Committee and the Committee shall give written notice to such person at his or
her last known address as shown in the Employer's records. If such person shall
not have presented himself or herself to the Employer after one (1) year from
the date of mailing such notice, then such distribution shall be forfeited and
applied to reduce current and future Employer contributions or allocated if
Article I so provides. Alternatively, the Trustee shall have the discretion to
use other means to protect the Participant's or Beneficiary's vested Accrued
Benefit. A missing Participant's vested Accrued Benefit shall be reinstated if a
claim is later made by the Participant or Beneficiary of the Participant for the
forfeited benefit and such claim is approved by the Committee.
C. Spendthrift Provisions. Except with respect to a Participant loan,
neither the Employer nor the Trustee shall recognize any transfer, mortgage,
pledge, hypothecation, order or assignment by any Participant or Beneficiary of
all or any part of his or her interest under the Plan and Trust. Any attempt by
a Participant or Beneficiary to assign, alienate, sell, transfer, pledge or
encumber his or her benefits shall be void. A Participant's or Beneficiary's
interest shall not be subject in any manner to transfer by operation of law, and
shall be exempt from the claims of creditors or other claimants (including but
not limited to, debts, contracts, liabilities or torts) from all orders,
decrees, levies, garnishments and/or executions and other legal or equitable
process or proceedings against such Participant or Beneficiary to the full
extent which may be permitted by law.
Notwithstanding the foregoing, this Paragraph C shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a Qualified Domestic Relations Order. The Committee
shall determine whether any domestic relations order submitted with respect to a
Participant's benefits is a Qualified Domestic Relations Order and shall
establish procedures for making such determination and notifying interested
parties of its ruling. A domestic relations order entered into before January 1,
1985 (i) shall be treated as a Qualified Domestic Relations Order if
ARTICLE XVII 122
the payment of benefits pursuant to the order has commenced as of such date; or
(ii) at the Committee's discretion, may be treated as a Qualified Domestic
Relations Order if the payment of benefits has not commenced as of January 1,
1985, even though the order does not satisfy the requirements of Section 414(p)
of the Code.
D. Indemnification. The Employer shall indemnify and hold harmless the
members of the Board of Directors and the Committee to whom any fiduciary
responsibility with respect to the Plan is allocated or delegated, from and
against any and all liabilities, costs and expenses incurred by such persons as
a result of any act, or omission to act, in connection with the performance of
their duties, responsibilities and obligations under the Plan and under ERISA,
other than such liabilities, costs and expenses as may result from the willful
misconduct or criminal acts of such persons.
E. Applicable Laws; Severability. The provisions of the Plan shall be
construed and enforced according to ERISA and the Code and, to the extent
applicable, according to the laws of the state in which the Sponsoring Employer
maintains its principal place of business; provided, further, that if any
provision is susceptible to more than one (1) interpretation, such
interpretation shall be given thereto as is consistent with the Plan being a
qualified employees' profit sharing or pension plan within the meaning of the
Code. If any provision of this instrument shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions shall
continue to be fully effective.
The Employer has executed this Plan on the 10th day of January, 2005.
BIOMED REALTY, L.P.:
By: /s/ John Wilson
_______________________________________
ARTICLE XVII 123