EXHIBIT 10.11
MILLERS AMERICAN GROUP, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
Millers American Group, Inc., a Texas corporation, makes this Agreement
with Emjay Corporation, as Trustee.
WITNESSETH:
Millers American Group, Inc. is adopting this Plan for the administration
and distribution of contributions made by the Employer for the purpose of
providing retirement benefits for eligible Employees.
Now, therefore, in consideration of their mutual covenants, the Employer
and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Plan" means the retirement plan established and continued by the
Employer in the form of this Agreement, designated as Millers American Group,
Inc. Employee Stock Ownership Plan. The Employer has designed this Plan to
invest primarily in Employer Securities.
1.02 "Employer" means Millers American Group, Inc., a Texas
corporation.
1.03 "Trustee" means the undersigned trustee, or any successor in office
who in writing accepts the position of Trustee.
1.04 "Plan Administrator" is the Employer unless the Employer designates
another person to hold the position of Plan Administrator. In addition to his
other duties, the Plan Administrator has full responsibility for compliance with
the reporting and disclosure rules under ERISA as respects this Agreement.
1.05 "Advisory Committee" means the Employer's Advisory Committee as from
time to time constituted.
1.06 "Employee" means any employee of the Employer and of those affiliates
of the Employer who adopt this Plan with the permission of the Employer.
1.07 "Highly Compensated Employee" means an Employee who:
(a) is a more than 5% owner of the Employer (applying the constructive
ownership rules of Code Section 318, and applying the principles of Code
Section 318, for an unincorporated entity) during the Plan Year or the
preceding Plan Year; or
(b) for the preceding Plan Year had Compensation in excess of $80,000 (as
adjusted by the Commissioner of Internal Revenue for the relevant year)
and, if the Employer so elects, pursuant to Code Section 414(q)(1)(B), was
in the top-paid 20% group of employees for such year (based on Compensation
for the relevant year).
For purposes of this Section 1.07, "Compensation" means Compensation as
defined in Section 1.10, except no exclusions from Compensation apply other than
the exclusions described in paragraphs (a), (b), (c) and (d) of Section 1.10.
The Advisory Committee must make the determination of who is a Highly
Compensated Employee, including the determinations of the number and identity of
the top paid 20% group and the relevant Compensation, consistent with Code
Section 414(q) and regulations issued under that Code section. The Employer may
make a calendar year election to determine the Highly Compensated Employees for
the Plan Year, as prescribed by Treasury Regulations.
The term "Highly Compensated Employee" also includes any former Employee
who separated from Service (or has a deemed Separation from Service, as
determined under Treasury Regulations) prior to the Plan Year, performs no
Service for the Employer during the Plan Year, and was a Highly Compensated
Employee either for the separation year or for any Plan Year ending on or after
his 55th birthday.
1.08 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.
1.09 "Beneficiary" is a person designated by a Participant who is or may
become entitled to a benefit under the Plan. A Beneficiary who becomes entitled
to a benefit under the Plan remains a Beneficiary under the Plan until the
Trustee has fully distributed his benefit to him. A Beneficiary's right to (and
the Plan Administrator's, the Advisory Committee's or a Trustee's duty to
provide to the Beneficiary) information or data concerning the Plan does not
arise until he first becomes entitled to receive a benefit under the Plan.
1.10 "Compensation" means total cash remuneration paid for personal
services as reported on the Employee's federal income tax withholding statement
or statements (Form W-2 on its subsequent equivalent), except Compensation does
not include bonuses, reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation, and welfare
benefits. Compensation includes elective contributions made by the Employer on
the Employee's behalf. "Elective contributions" are amounts excludible from the
Employee's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b),
and contributed by the Employer, at the Employee's election, to a Code Section
401(k) arrangement, a Simplified Employee Pension, cafeteria plan or
tax-sheltered annuity. A Compensation payment includes Compensation paid by the
Employer to an Employee through another person under the common paymaster
provisions of Code Sections 3121(s) and 3306(p). The term "Compensation" does
not include:
(a) Employer contributions (other than "elective contributions") to a plan
of deferred compensation to the extent the contributions are not included
in the gross income of the Employee for the taxable year in which
contributed, on behalf of an Employee to a Simplified Employee Pension Plan
to the extent such contributions are excludible from the Employee's gross
income, and any distributions from a plan of deferred compensation,
regardless of whether such amounts are includible in the gross income of
the Employee when distributed.
(b) Amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by an Employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture.
(c) Amounts realized from the sale, exchange or other disposition of stock
acquired under a stock option described in Part II, Subchapter D, Chapter 1
of the Code.
(d) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includible in the gross income of the Employee), or contributions made by
an Employer (whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code Section 403(b) (whether
or not the contributions are excludible from the gross income of the
Employee), other than "elective contributions."
Any reference in this Plan to Compensation is a reference to the definition
in this Section 1.10, unless the Plan reference specifies a modification to this
definition. The Advisory Committee will take into account only Compensation
actually paid for the relevant period.
(A) Limitations on Compensation. Compensation dollar limitation. For any Plan
Year beginning after December 31, 1988, the Advisory Committee must take into
account only the first $200,000 (or such larger or smaller amount as the
Commissioner of Internal Revenue may prescribe) for a particular year of any
Participant's Compensation.
(B) Nondiscrimination. For purposes of determining whether the Plan
discriminates in favor of Highly Compensated Employees, Compensation means
Compensation as defined in this Section 1.10 except any exclusions from
Compensation, other than the exclusions described in paragraphs (a), (b), (c)
and (d), do not apply. The Employer also may elect to use an alternate
nondiscriminatory definition, in accordance with the requirements of Code
Section 414(s) and the regulations issued under that Code section. In
determining Compensation under this Section 1.10(B), the Employer may elect to
include all elective contributions made by the Employer on behalf of the
Employees. The Employer's election to include elective contributions must be
consistent and uniform with respect to Employees. The Employer may make this
election to include elective contributions for nondiscrimination testing
purposes, irrespective of whether this Section 1.10 includes elective
contributions in the general Compensation definition applicable to the Plan.
1.11 "Account" means the separate account(s) or sub-accounts which the
Advisory Committee or the Trustee maintains for a Participant under the Plan.
1.12 "Accrued Benefit" means the amount standing in a Participant's
Account(s) as of any date derived from Employer contributions.
1.13 "Nonforfeitable" means a Participant's or Beneficiary's unconditional
claim, legally enforceable against the Plan, to the Participant's Accrued
Benefit.
1.14 "Plan Year" means the fiscal year of the Plan, a 12 consecutive month
period ending every December 31.
1.15 "Effective Date" of this Plan is January 1, 1999, except as otherwise
stated in this Agreement.
1.16 "Plan Entry Date" means the dates prescribed by Section 2.01.
1.17 "Accounting Date" is the last day of the Plan Year. Unless otherwise
specified in the Plan, the Advisory Committee will make all Plan allocations for
a particular Plan Year as of the Accounting Date of that Plan Year.
1.18 "Trust" means the separate Trust created under the Plan.
1.19 "Trust Fund" means all property of every kind held or acquired by the
Trustee under the Plan.
1.20 "Nontransferable Annuity" means an annuity which by its terms provides
that it may not be sold, assigned, discounted, pledged as collateral for a loan
or security for the performance of an obligation or for any purpose to any
person other than the insurance company. If the Plan distributes an annuity
contract, the contract must be a Nontransferable Annuity.
1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.22 "Code" means the Internal Revenue Code of 1986, as amended.
1.23 "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of absence
authorized by the Employer under a uniform, nondiscriminatory policy applicable
to all Employees. "Separation from Service" means the Employee no longer has an
employment relationship with the Employer maintaining this Plan.
1.24 "Hour of Service" means:
(a) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment, for the performance of duties. The Advisory Committee credits
Hours of Service under this paragraph (a) to the Employee for the
computation period in which the Employee performs the duties, irrespective
of when paid;
(b) Each Hour of Service for back pay, irrespective of mitigation of
damages, to which the Employer has agreed or for which the Employee has
received an award. The Advisory Committee credits Hours of Service under
this paragraph (b) to the Employee for the computation period(s) to which
the award or the agreement pertains rather than for the computation period
in which the award, agreement or payment is made; and
(c) Each Hour of Service for which the Employer, either directly or
indirectly, pays an Employee, or for which the Employee is entitled to
payment (irrespective of whether the employment relationship is
terminated), for reasons other than for the performance of duties during a
computation period, such as leave of absence, vacation, holiday, sick
leave, illness, incapacity (including disability), layoff, jury duty or
military duty. The Advisory Committee will credit no more than 501 Hours of
Service under this paragraph (c) to an Employee on account of any single
continuous period during which the Employee does not perform any duties
(whether or not such period occurs during a single computation period). The
Advisory Committee credits Hours of Service under this paragraph (c) in
accordance with the rules of paragraphs (b) and (c) of Labor Reg. Section
2530.200b-2, which the Plan, by this reference, specifically incorporates
in full within this paragraph (c).
The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.24 is the Plan Year, Year of Service period, Break in Service period or other
period, as determined under the Plan provision for which the Advisory Committee
is measuring an Employee's Hours of Service. The Advisory Committee will resolve
any ambiguity with respect to the crediting of an Hour of Service in favor of
the Employee.
(A) Method of crediting Hours of Service. The Employer will credit every
Employee with Hours of Service on the basis of the "actual" method. For purposes
of the Plan, "actual" method means the determination of Hours of Service from
records of hours worked and hours for which the Employer makes payment or for
which payment is due from the Employer.
(B) Maternity/paternity leave. Solely for purposes of determining whether the
Employee incurs a Break in Service under any provision of this Plan, the
Advisory Committee must credit Hours of Service during an Employee's unpaid
absence period due to maternity or paternity leave. The Advisory Committee
considers an Employee on maternity or paternity leave if the Employee's absence
is due to the Employee's pregnancy, the birth of the Employee's child, the
placement with the Employee of an adopted child, or the care of the Employee's
child immediately following the child's birth or placement. The Advisory
Committee credits Hours of Service under this paragraph on the basis of the
number of Hours of Service the Employee would receive if he were paid during the
absence period or, if the Advisory Committee cannot determine the number of
Hours of Service the Employee would receive, on the basis of eight hours per day
during the absence period. The Advisory Committee will credit only the number
(not exceeding 501) of Hours of Service necessary to prevent an Employee's Break
in Service. The Advisory Committee credits all Hours of Service described in
this paragraph to the computation period in which the absence period begins or,
if the Employee does not need these Hours of Service to prevent a Break in
Service in the computation period in which his absence period begins, the
Advisory Committee credits these Hours of Service to the immediately following
computation period.
1.25 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.25 in a nondiscriminatory, consistent and uniform manner.
1.26 SERVICE FOR PREDECESSOR EMPLOYER. If this Plan constitutes the plan of
a predecessor employer, the Plan treats service of an Employee with the
predecessor employer as service with the Employer.
1.27 RELATED EMPLOYERS. A related group is a controlled group of
corporations (as defined in Code Section 414(b)), trades or businesses (whether
or not incorporated) which are under common control (as defined in Code Section
414(c)) or an affiliated service group (as defined in Code Section 414(m) or in
Code Section 414(o)). If the Employer is a member of a related group, the term
"Employer" includes the related group members for purposes of crediting Hours of
Service, determining Years of Service and Breaks in Service under Articles II
and V, applying the limitations on allocations in Part 2 of Article III,
applying the top heavy rules and the minimum allocation requirements of Article
III, the definitions of Employee, Highly Compensated Employee, Compensation and
Leased Employee, and for any other purpose required by the applicable Code
section or by a Plan provision. However, only an Employer described in Section
1.02 may contribute to the Plan and only an Employee employed by an Employer
described in Section 1.02 is eligible to participate in this Plan. For Plan
allocation purposes, "Compensation" does not include Compensation received from
a related employer not participating in this Plan.
1.28 LEASED EMPLOYEES. The Plan treats a Leased Employee as an Employee of
the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
Section 144(a)(3)) on a substantially full time basis for at least one year and
who performs such services under the primary direction or control of the
Employer. If a Leased Employee is treated as an Employee by reason of this
Section 1.28, "Compensation" includes Compensation from the leasing organization
which is attributable to services performed for the Employer.
(A) Safe harbor plan exception. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code Section 415(c)(3) plus elective contributions
(as defined in Section 1.10).
(B) Other requirements. The Advisory Committee must apply this Section 1.28 in a
manner consistent with Code Sections 414(n) and 414(o) and the regulations
issued under those Code sections. The Advisory Committee will reduce a Leased
Employee's allocation of Employer contributions under this Plan by the Leased
Employee's allocation under the leasing organization's plan, but only to the
extent that allocation is attributable to the Leased Employee's service provided
to the Employer.
1.29 DETERMINATION OF TOP HEAVY STATUS. If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio is
a fraction, the numerator of which is the sum of the present value of Accrued
Benefits of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees. The Advisory Committee
must include in the top heavy ratio, as part of the present value of Accrued
Benefits, any contribution not made as of the Determination Date but includible
under Code Section 416 and the applicable Treasury Regulations, and
distributions made within the Determination Period. The Advisory Committee must
calculate the top heavy ratio by disregarding the Accrued Benefit (and
distributions, if any, of the Accrued Benefit) of any Non-Key Employee who was
formerly a Key Employee, and by disregarding the Accrued Benefit (including
distributions, if any, of the Accrued Benefit) of an individual who has not
received credit for at least one Hour of Service with the Employer during the
Determination Period. The Advisory Committee must calculate the top heavy ratio,
including the extent to which it must take into account distributions, rollovers
and transfers, in accordance with Code Section 416 and the regulations under
that Code section.
If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee must include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee will calculate the present value of Accrued Benefits under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Code Section 416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory Committee will determine his Accrued Benefit
under the accrual method, if any, which is applicable uniformly to all defined
benefit plans maintained by the Employer or, if there is no uniform method, in
accordance with the slowest accrual rate permitted under the fractional rule
accrual method described in Code Section 411(b)(1)(C). To calculate the present
value of benefits from a defined benefit plan, the Advisory Committee will use
the actuarial assumptions (interest and mortality only) prescribed by the
defined benefit plan(s) to value benefits for top heavy purposes. If an
aggregated plan does not have a valuation date coinciding with the Determination
Date, the Advisory Committee must value the Accrued Benefits in the aggregated
plan as of the most recent valuation date falling within the twelve-month period
ending on the Determination Date, except as Code Section 416 and applicable
Treasury Regulations require for the first and second plan year of a defined
benefit plan. The Advisory Committee will calculate the top heavy ratio with
reference to the Determination Dates that fall within the same calendar year.
Definitions. For purposes of applying the provisions of this
Section 1.29:
(a) "Key Employee" means, as of any Determination Date, any Employee or
former Employee (or Beneficiary of such Employee) who, for any Plan Year in
the Determination Period: (i) has Compensation in excess of 50% of the
dollar amount prescribed in Code Section 415(b)(1)(A) (relating to defined
benefit plans) and is an officer of the Employer; (ii) has Compensation in
excess of the dollar amount prescribed in Code Section 415(c)(1)(A)
(relating to defined contribution plans) and is one of the Employees owning
the ten largest interests in the Employer; (iii) is a more than 5% owner of
the Employer; or (iv) is a more than 1% owner of the Employer and has
Compensation of more than $150,000. The constructive ownership rules of
Code Section 318 (or the principles of that section, in the case of an
unincorporated Employer,) will apply to determine ownership in the
Employer. The number of officers taken into account under clause (i) will
not exceed the greater of three or 10% of the total number (after
application of the Code Section 414(q) exclusions) of Employees, but no
more than 50 officers. The Advisory Committee will make the determination
of who is a Key Employee in accordance with Code Section 416(i)(1) and the
regulations under that Code section.
(b) "Non-Key Employee" is an employee who does not meet the definition of
Key Employee.
(c) "Compensation" means Compensation as determined under Section 1.07 for
purposes of identifying Highly Compensated Employees.
(d) "Required Aggregation Group" means: (1) each qualified plan of the
Employer in which at least one Key Employee participates at any time during
the Determination Period; and (2) any other qualified plan of the Employer
which enables a plan described in clause (1) to meet the requirements of
Code Section 401(a)(4) or of Code Section 410.
(e) "Permissive Aggregation Group" is the Required Aggregation Group plus
any other qualified plans maintained by the Employer, but only if such
group would satisfy in the aggregate the requirements of Code Section
401(a)(4) and of Code Section 410. The Advisory Committee will determine
the Permissive Aggregation Group.
(f) "Employer" means the Employer that adopts this Plan and any related
employers described in Section 1.27.
(g) "Determination Date" for any Plan Year is the Accounting Date of the
preceding Plan Year or, in the case of the first Plan Year of the Plan, the
Accounting Date of that Plan Year. The "Determination Period" is the five
year period ending on the Determination Date.
1.30 "Disqualified Person" shall have the meaning ascribed to that term
under Code Section 4975(e)(2).
1.31 "Employer Securities" means common stock issued by the Employer (or by
a corporation which is a member of a controlled group of corporations (a
"Controlled Group Member")) which is readily tradable on an established
securities market. If there is no common stock which is readily tradable on an
established securities market, the term "Employer Securities" means common stock
issued by the Employer (or by a Controlled Group Member) having a combination of
voting power and dividend rights equal to or in excess of -
(A) that class of common stock of the Employer (or of any Controlled Group
Member) having the greatest voting power, and
(B) that class of common stock of the Employer (or of any Controlled Group
Member) having the greatest dividend rights.
Noncallable preferred stock shall also be treated as Employer Securities if
such stock is convertible at any time into stock which meets the above
requirements and if such conversion is at a conversion price which (as of the
date of the acquisition by the Plan) is reasonable. For purposes of the
preceding sentence, preferred stock shall be treated as noncallable if after the
call there will be a reasonable opportunity for a conversion which meets the
requirements of the preceding sentence.
1.32 "Exempt Loan" means a loan made to this Plan by a Disqualified Person,
or a loan to this Plan which a Disqualified Person guarantees, provided the loan
satisfies the requirements of Treas. Reg. Section 54.4975-7(b).
1.33 "Leveraged Employer Securities" mean Employer Securities acquired by
the Trust with the proceeds of an Exempt Loan and which satisfy the definition
of "qualifying employer securities" under Code Section 4975(e)(8).
1.34 "Normal Retirement Distribution Date" means the 60th day after the
latest of the close of the Plan Year in which:
(A) occurs the date on which the Participant attains the Normal Retirement Age
(as defined in Section 5.01of the Plan);
(B) occurs the tenth anniversary of the year in which the Participant commenced
participation in the Plan; or
(C) the Participant terminates service with the Employer.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee) becomes a
Participant in the Plan on the Plan Entry Date (if employed on that date)
immediately following the later of the date on which he completes one Year of
Service and attains age 21. "Plan Entry Date" means the Effective Date and
January 1 and July 1.
An Employee is an Excluded Employee if he is a Leased Employee.
If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Advisory Committee will limit that Participant's sharing in the
allocation of Employer contributions and Participant forfeitures, if any, under
the Plan by disregarding his Compensation paid by the Employer for services
rendered in his capacity as an Excluded Employee. However, during such period of
exclusion, the Participant, without regarding to employment classification,
continues to receive credit for vesting under Article V for each included Year
of Service and the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan takes into account all of
his Years of Service with the Employer. "Year of Service" means an eligibility
computation period during which the Employee completes not less than 1,000 Hours
of Service. The initial eligibility computation period is the first 12
consecutive month period measured from the Employment Commencement Date. The
Plan measures subsequent periods by reference to the Plan Year, beginning with
the Plan Year which includes the first anniversary of the Employee's Employment
Commencement Date. "Employment Commencement Date" means the date on which the
Employee first performs an Hour of Service for the Employer.
2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in the
Plan, the Plan does not apply any Break in Service rule.
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment with
the Employer terminates will re-enter the Plan as a Participant on the date of
his reemployment. An Employee who satisfies the Plan's eligibility conditions
but who terminates employment with the Employer prior to becoming a Participant
will become a Participant on the later of the Plan Entry Date on which he would
have entered the Plan had he not terminated employment or the date of his
reemployment. Any Employee who terminates employment prior to satisfying the
Plan's eligibility conditions becomes a Participant in accordance with the
provisions of Section 2.01.
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT. For each Plan Year, the Employer will contribute to the Trust
the amount which the Employer may from time to time deem advisable. The Employer
may contribute to this Plan irrespective of whether it has net profits. The
Employer intends the Plan to be an employee stock ownership plan for all
purposes of the Code. The Employer may not make a contribution to the Trust for
any Plan Year to the extent the contribution would exceed the Participants'
Maximum Permissible Amounts. See Part 2 of this Article III.
The Employer contributes to this Plan on the condition its contribution is
not due to a mistake of fact and the Revenue Service will not disallow the
deduction for its contribution. The Trustee, upon written request from the
Employer, must return to the Employer the amount of the Employer's contribution
made by the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code Section 404. The Trustee will
not return any portion of the Employer's contribution under the provisions of
this paragraph more than one year after:
(a) The Employer made the contribution by mistake of fact; or
(b) The disallowance of the contribution as a deduction, and then, only to
the extent of the disallowance.
The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution
for each Plan Year in one or more installments without interest. The Employer
must make its contribution to the Plan within the time prescribed by the Code or
applicable Treasury Regulations. Subject to the consent of the Trustee, the
Employer may make its contribution in property (including Employer Securities)
rather than cash, provided the contribution of property is not a prohibited
transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) Method of Allocation. The Advisory Committee will allocate and credit each
annual Employer contribution (and Participant forfeitures, if any) to the
Account of each Participant who satisfies the conditions of Section 3.06. The
Advisory Committee will allocate the annual Employer contributions (and
Participant forfeitures) in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants for the
Plan Year.
(B) Top Heavy Minimum Allocation.
(1) Minimum Allocation. If the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and employed by the Employer
on the last day of the Plan Year will receive a top heavy minimum
allocation for that Plan Year, irrespective of whether he satisfies the
Hours of Service condition under Section 3.06; and
(b) The top heavy minimum allocation is the lesser of 3% of the Non-Key
Employee's Compensation for the Plan Year or the highest contribution rate
for the Plan Year made on behalf of any Key Employee. However, if a defined
benefit plan maintained by the Employer which benefits a Key Employee
depends on this Plan to satisfy the antidiscrimination rules of Code
Section 401(a)(4) or the coverage rules of Code Section 410 (or another
plan benefiting the Key Employee so depends on such defined benefit plan),
the top heavy minimum allocation is 3% of the Non-Key Employee's
Compensation regardless of the contribution rate for the Key Employees.
(2) Special Definitions. For purposes of clause (1)(b),
"Compensation" means Compensation as defined in Section 1.10,
except: (i) Compensation does not include elective contributions;
(ii) any exclusions from Compensation (other than the exclusion
of elective contributions and the exclusions described in
paragraphs (a), (b), (c) and (d) of Section 1.10) do not apply;
and (iii) the Advisory Committee must take into account
Compensation for the entire Plan Year.
(3) Determining Contribution Rates. For purposes of this Section
3.04(B), a Participant's contribution rate is the sum of Employer
contributions (not including Employer contributions to Social
Security) and forfeitures allocated to the Participant's Account
for the Plan Year divided by his Compensation for the entire Plan
Year. However, for purposes of satisfying a Participant's top
heavy minimum allocation in Plan Years beginning after December
31, 1988, a Participant's contribution rate does not include any
elective contributions under a Code Section 401(k) arrangement
nor any Employer matching contributions necessary to satisfy the
nondiscrimination requirements of Code Section 401(k) or of Code
Section 401(m). To determine a Participant's contribution rate,
the Advisory Committee must treat all qualified top heavy defined
contribution plans maintained by the Employer (or by any related
Employers described in Section 1.27) as a single plan.
(4) No Allocations. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Key Employee, the
Plan does not require any top heavy minimum allocation for the
Plan Year, unless a top heavy minimum allocation applies because
of the maintenance by the Employer of more than one plan.
(5) Method of Compliance. The Plan will satisfy the top heavy minimum
allocation in accordance with this Section 3.04(B)(5). The
Advisory Committee first will allocate the Employer contributions
(and Participant forfeitures, if any) for the Plan Year in
accordance with the allocation formula under Section 3.04(A). The
Employer then will contribute an additional amount for the
Account of any Participant entitled under this Section 3.04(B) to
a top heavy minimum allocation and whose contribution rate for
the Plan Year, under this Plan and any other plan aggregated
under paragraph (3), is less than the top heavy minimum
allocation. The additional amount is the amount necessary to
increase the Participant's contribution rate to the top heavy
minimum allocation. The Advisory Committee will allocate the
additional contribution to the Account of the Participant on
whose behalf the Employer makes the contribution.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's Accrued Benefit
forfeited under the Plan is a Participant forfeiture. Subject to any restoration
allocation required under Section 9.14, the Advisory Committee will allocate a
Participant forfeiture in accordance with Section 3.04, as an Employer
contribution for the Plan Year in which the forfeiture occurs, as if the
Participant forfeiture were an additional Employer contribution for that Plan
Year. The Advisory Committee will continue to hold the undistributed, non-vested
portion of a terminated Participant's Accrued Benefit in his Account solely for
his benefit until a forfeiture occurs at the time specified in Section 5.09, or,
if applicable, until the time specified in Section 9.14. Except as provided
under Section 5.04, a Participant will not share in the allocation of a
forfeiture of any portion of his Accrued Benefit. In making a forfeiture
allocation under this Section 3.05, the Advisory Committee, must base
forfeitures of Employer Securities upon the fair market value of the Employer
Securities as of the Accounting Date of the forfeitures.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the accrual
of benefit (Employer contributions and Participant forfeitures) on the basis of
the Plan Year.
(A) Compensation Taken Into Account. In allocating an Employer contribution to a
Participant's Account, the Advisory Committee, except for purposes of
determining the top heavy minimum contribution under Section 3.04(B), will take
into account only the Compensation determined for the portion of the Plan Year
in which the Employee actually is a Participant.
(B) Hours of Service Requirement. Subject to the top heavy minimum allocation
requirement of Section 3.04(B), the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's Account
if the Participant does not complete a minimum of 1,000 Hours of Service during
the Plan Year, unless the Participant terminates employment during the Plan Year
because of death or disability or because of the attainment of Normal Retirement
Age in the current Plan Year or in a prior Plan Year.
(C) Employment Requirement. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under Section 3.06(B) will not share
in the allocation of Employer contributions and Participant forfeitures, if any,
for that Plan Year unless employed by the Employer on the Accounting Date of
that Plan Year. This employment requirement does not apply if the Participant
terminates employment during the Plan Year because of death or disability or
because of the attainment of Normal Retirement Age in the current Plan Year or
in a prior Plan Year.
(D) Suspension of Accrual Requirements. The Plan suspends the accrual
requirements under Sections 3.06(B) and (C) if, for any Plan Year beginning
after December 31, 1989, the Plan fails to satisfy the Coverage Test. A Plan
satisfies the Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit under the Plan
is at least equal to 70% of the total number of Includible Nonhighly Compensated
Employees as of such day. "Includible" Employees are all Employees other than:
(1) those Employees excluded from participating in the Plan for the entire Plan
Year by reason of the collective bargaining unit exclusion or the nonresident
alien exclusion described in the Code or by reason of the age and service
requirements of Article II; and (2) any Employee who incurs a Separation from
Service during the Plan Year and fails to complete at least 501 Hours of Service
for the Plan Year. A "Nonhighly Compensated Employee" is an Employee who is not
a Highly Compensated Employee. For purposes of the Coverage Test, an Employee is
benefiting under the Plan on a particular date if, under Section 3.04, he is
entitled to an Employer contribution allocation for the Plan Year.
If this Section 3.06(D) applies for a Plan Year, the Advisory Committee
will suspend the accrual requirements for the Includible Employees who are
Participants, beginning first with the Includible Employee(s) employed with the
Employer on the last day of the Plan Year, then the Includible Employee(s) who
have the latest Separation from Service during the Plan Year, and continuing to
suspend in descending order the accrual requirements for each Includible
Employee who incurred an earlier Separation from Service, from the latest to the
earliest Separation from Service date, until the Plan satisfies the Coverage
Test for the Plan Year. If two or more Includible Employees have a Separation
from Service on the same day, the Advisory Committee will suspend the accrual
requirements for all such Includible Employees, irrespective of whether the Plan
can satisfy the Coverage Test by accruing benefits for fewer than all such
Includible Employees. If the Plan suspends the accrual requirements for an
Includible Employee, that Employee will share in the allocation of Employer
contributions and Participant forfeitures, if any, without regard to the number
of Hours of Service he has earned for the Plan Year and without regard to
whether he is employed by the Employer on the last day of the Plan Year.
3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount of
Annual Additions which the Advisory Committee may allocate under this Plan on a
Participant's behalf for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce the amount of
its contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer contributions, pursuant
to Section 3.04, would result in an Excess Amount (other than an Excess Amount
resulting from the circumstances described in Section 3.07(B)) to the
Participant's Account, the Advisory Committee will reallocate the Excess Amount
to the remaining Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year ends. The Advisory
Committee will make this reallocation on the basis of the allocation method
under the Plan as if the Participant whose Account otherwise would receive the
Excess Amount is not eligible for an allocation of Employer contributions.
(A) Estimation of Compensation. Prior to the determination of the Participant's
actual Compensation for a Limitation Year, the Advisory Committee may determine
the Maximum Permissible Amount on the basis of the Participant's estimated
annual Compensation for such Limitation Year. The Advisory Committee must make
this determination on a reasonable and uniform basis for all Participants
similarly situated. The Advisory Committee must reduce any Employer
contributions (including any allocation of forfeitures) based on estimated
annual Compensation by any Excess Amount carried over from prior years. As soon
as is administratively feasible after the end of the Limitation Year, the
Advisory Committee will determine the Maximum Permissible Amount for such
Limitation Year on the basis of the Participant's actual Compensation for such
Limitation Year.
(B) More Than One Plan. If the Advisory Committee allocated an Excess Amount to
a Participant's Account on an allocation date of this Plan which coincides with
an allocation date of another defined contribution plan maintained by the
Employer, the Excess Amount attributed to this Plan will be the product of:
(a) The total Excess Amount allocated as of such date (including any amount
which the Advisory Committee would have allocated but for the limitations
of Code Section 415); times
(b) The ratio of (i) the amount allocated to the Participant as of such
date under this Plan divided by (ii) the total amount allocated as of such
date under all qualified defined contribution plans (determined without
regard to the limitations of Code Section 415).
(C) Disposition of Excess Amount. If, pursuant to Section 3.07(A), or because of
the allocation of forfeitures, there is an Excess Amount with respect to a
Participant for a Limitation Year, the Advisory Committee will dispose of such
Excess Amount as follows:
(a) The Advisory Committee will return any nondeductible voluntary Employee
contributions to the Participant to the extent the return would reduce the
Excess Amount.
(b) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan covers the Participant at the end of the Limitation
Year, then the Advisory Committee will use the Excess Amount(s) to reduce
future Employer contributions (including any allocation of forfeitures)
under the Plan for the next Limitation Year and for each succeeding
Limitation Year, as is necessary, for the Participant. The Participant may
elect to limit his Compensation for allocation purposes to the extent
necessary to reduce his allocation for the Limitation Year to the Maximum
Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess Amount still
exists, and the Plan does not cover the Participant at the end of the
Limitation Year, then the Advisory Committee will hold the Excess Amount
unallocated in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including allocation of
forfeitures) for all remaining Participants in the next Limitation Year,
and in each succeeding Limitation Year if necessary. Neither the Employer
nor any Employee may contribute to the Plan for any Limitation Year in
which the Plan is unable to allocate fully a suspense account maintained
pursuant to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess Amount(s) to
Participants or to former Participants.
3.08 DEFINITIONS - ARTICLE III. For purposes of Article III,
the following terms mean:
(a) "Annual Addition" - The sum of the following amounts allocated on
behalf of a Participant for a Limitation Year: (i) all Employer
contributions; (ii) all forfeitures; and (iii) all Employee contributions.
Except to the extent provided in Treasury Regulations, Annual Additions
include excess contributions described in Code Section 401(k), excess
aggregate contributions described in Code Section 401(m) and excess
deferrals described in Code Section 402(g), irrespective of whether the
plan distributes or forfeits such excess amounts. Annual Additions also
include Excess Amounts reapplied to reduce Employer contributions under
Section 3.07. Amounts allocated after March 31, 1984, to an individual
medical account (as defined in Code Section 415(l)(2)) included as part of
a defined benefit plan maintained by the Employer are Annual Additions.
Furthermore, Annual Additions include contributions paid or accrued after
December 31, 1985, for taxable years ending after December 31, 1985,
attributable to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, but only for purposes of the dollar limitation applicable to the
Maximum Permissible Amount.
"Annual Additions" do not include any Employer contributions applied by the
Advisory Committee (not later than the due date, including extensions, for
filing the Employer's Federal income tax return for the Plan Year) to pay
interest (charged to a Participant's Account) on an Exempt Loan, and any
Leveraged Employer Securities the Advisory Committee allocates as
forfeitures; provided however, the provisions of this sentence do not apply
in a Limitation Year for which the Advisory Committee allocates more than
one-third of the Employer contributions applied to pay principal and
interest on an Exempt Loan to Highly Compensated Employee- Participants.
The Advisory Committee may reallocate the Employer contributions in
accordance with Section 3.04 to the Accounts of non-Highly Compensated
Employee-Participants to the extent necessary in order to satisfy this
special limitation.
(b) "Compensation" - For purposes of applying the limitations of Section
3.07, "Compensation" means Compensation as defined in Section 1.10, except
any exclusion from Compensation (other than the exclusions described in
paragraphs (a), (b), (c) and (d) of Section 1.10) does not apply.
(c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
greater, one-fourth of the defined benefit dollar limitation under Code
Section 415(b)(1)(A)), or (ii) 25% of the Participant's Compensation for
the Limitation Year. [The dollar amount of clause (i) will increase by the
lesser of (1) 100% of the dollar amount in effect for the Limitation Year;
or (2) the amount of the Employer Securities allocated to the Participant's
Employer Securities Account as an Employer contribution for the Limitation
Year. The immediately preceding sentence does not apply for any Limitation
Year for which the Advisory Committee allocates more than one-third of the
Employer contribution to Highly Compensated Employee-Participants, nor to
any Limitation Year commencing after July 12, 1989.] If there is a short
Limitation Year because of a change in Limitation Year, the Advisory
Committee will multiply the $30,000 limitation (or larger limitation) by
the following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(d) "Employer" - The Employer that adopts this Plan and any related
employers described in Section 1.27. Solely for purposes of applying the
limitations of Part 2 of this Article III, the Advisory Committee will
determine related employers described in Section 1.27 by modifying Code
Sections 414(b) and (c) in accordance with Code Section 415(h).
(e) "Excess Amount" - The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
(f) "Limitation Year" - The Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year for which
the Employer makes the amendment, creating a short Limitation Year.
(g) "Defined contribution plan" - A retirement plan which provides for an
individual account for each participant and for benefits based solely on
the amount contributed to the participant's account, and any income,
expenses, gains and losses, and any forfeitures of accounts of other
participants which the plan may allocate to such participant's account. The
Advisory Committee must treat all defined contribution plans (whether or
not terminated) maintained by the Employer as a single plan. Solely for
purposes of the limitations of Part 2 of this Article III, the Advisory
Committee will treat employee contributions made to a defined benefit plan
maintained by the Employer as a separate defined contribution plan. The
Advisory Committee also will treat as a defined contribution plan an
individual medical account (as defined in Code Section 415(l)(2)) included
as part of a defined benefit plan maintained by the Employer and, for
taxable years ending after December 31, 1985, a welfare benefit fund under
Code Section 419(e) maintained by the Employer to the extent there are
post-retirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)).
(h) "Defined benefit plan" - A retirement plan which does not provide for
individual accounts for Employer contributions. The Advisory Committee must
treat all defined benefit plans (whether or not terminated) maintained by
the Employer as a single plan.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit nor
require Participant voluntary contributions.
4.02 PARTICIPANT ROLLOVER CONTRIBUTIONS. The Plan does not permit
Participant rollover contributions.
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 65
years of age. A Participant's Accrued Benefit derived from Employer
contributions is 100% Nonforfeitable upon and after his attaining Normal
Retirement Age (if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment with
the Employer terminates as a result of death or disability, the Participant's
Accrued Benefit derived from Employer contributions will be 100% Nonforfeitable.
5.03 VESTING SCHEDULE.
(A) Vesting Schedule. Except as provided in Sections 5.01 and 5.02, for each
Year of Service, a Participant's Nonforfeitable percentage of his Accrued
Benefit derived from Employer contributions equals the percentage in the
following vesting schedule:
Percent of
Years of Service Nonforfeitable
With the Employer Accrued Benefit
----------------- ---------------
Less than 2 None
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(B) Special Vesting Schedule. If the Trustee makes a distribution (other than a
cash-out distribution described in Section 5.04) to a partially-vested
Participant, and the Participant has not incurred a Forfeiture Break in Service
at the relevant time, the Advisory Committee may, but need not, establish a
separate Account for the Participant's Accrued Benefit. At any relevant time
following the distribution, the Advisory Committee will determine the
Participant's Nonforfeitable Accrued Benefit derived from Employer contributions
in accordance with the following formula: P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current vesting percentage
at the relevant time, "AB" is the Participant's Employer-derived Accrued Benefit
at the relevant time, "R" is the ratio of "AB" to the Participant's Employer-
derived Accrued Benefit immediately following the earlier distribution and "D"
is the amount of the earlier distribution. If, under a restated Plan, the Plan
has made distribution to a partially-vested Participant prior to its restated
Effective Date and is unable to apply the cash-out provisions of Section 5.04 to
that prior distribution, this special vesting formula also applies to that
Participant's remaining Account.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/ RESTORATION
OF FORFEITED ACCRUED BENEFIT. If, pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture Break
in Service (as defined in Section 5.08), the cash-out distribution will result
in an immediate forfeiture of the nonvested portion of the Participant's Accrued
Benefit derived from Employer contributions. See Section 5.09. A
partially-vested Participant is a Participant whose Nonforfeitable Percentage
determined under Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's Nonforfeitable
Accrued Benefit.
(A) Restoration and Conditions upon Restoration. A partially- vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Nonforfeitable percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer contributions,
unless the Participant no longer has a right to restoration by reason of the
conditions of this Section 5.04(A). If a partially-vested Participant makes the
cash-out distribution repayment, the Advisory Committee, subject to the
conditions of this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount as the dollar
amount of his Accrued Benefit on the Accounting Date, or other valuation date,
immediately preceding the date of the cash-out distribution, unadjusted for any
gains or losses occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes restoration of
all Code Section 411(d)(6) protected benefits with respect to that restored
Accrued Benefit, in accordance with applicable Treasury Regulations. The
Advisory Committee will not restore a re-employed Participant's Accrued Benefit
under this paragraph if:
(1) 5 years have elapsed since the Participant's first
re-employment date with the Employer following the
cash-out distribution; or
(2) The Participant incurred a Forfeiture Break in Service (as
defined in Section 5.08). This condition also applies if the
Participant makes repayment within the Plan Year in which he
incurs the Forfeiture Break in Service and that Forfeiture Break
in Service would result in a complete forfeiture of the amount
the Advisory Committee otherwise would restore.
(B) Time and Method of Restoration. If neither of the two conditions preventing
restoration of the Participant's Accrued Benefit applies, the Advisory Committee
will restore the Participant's Accrued Benefit as of the Plan Year Accounting
Date coincident with or immediately following the repayment. To restore the
Participant's Accrued Benefit, the Advisory Committee, to the extent necessary,
will allocate to the Participant's Account:
(1) First, the amount, if any, of Participant forfeitures the
Advisory Committee would otherwise allocate under Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net
income or gain for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required restoration,
the Employer must contribute, without regard to any requirement or condition of
Section 3.01, the additional amount necessary to enable the Advisory Committee
to make the required restoration. If, for a particular Plan Year, the Advisory
Committee must restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will make the restoration allocation(s)
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan Year
of all re-employed Participants. The Advisory Committee will not take into
account the allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.
(C) 0% Vested Participant. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Accrued Benefit
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. If the Participant's Account is not entitled to an
allocation of Employer contributions or Participant forfeitures for the Plan
Year in which he has a Separation from Service, the Advisory Committee will
apply the deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the date of the Participant's Separation from Service.
If the Participant's Account is entitled to an allocation of Employer
contributions or Participant forfeitures for the Plan Year in which he has a
Separation from Service, the Advisory Committee will apply the deemed cash-out
rule as if the 0% vested Participant received a cash-out distribution on the
first day of the first Plan Year beginning after his Separation from Service.
For purposes of applying the restoration provisions of this Section 5.04, the
Advisory Committee will treat the 0% vested Participant as repaying his cash-out
"distribution" on the first date of his re- employment with the Employer.
5.05 SUB-ACCOUNT FOR REPAID AMOUNT. The Trustee may, but need not, invest
the cash-out amount the Participant has repaid in a sub-account maintained
solely for that Participant. The Trustee must invest the amount in the
Participant's sub-account in Federally insured interest bearing savings
account(s) or time deposit(s) (or a combination of both), or in other fixed
income investments. Until commingled with the balance of the Trust Fund on the
date the Advisory Committee directs, the Participant's sub- account remains a
part of the Trust, but it alone shares in any income it earns and it alone bears
any expense or loss it incurs. The Advisory Committee will direct the Trustee to
repay to the Participant as soon as is administratively practicable the full
amount of the Participant's sub-account if the Advisory Committee determines
either of the conditions of Section 5.04(A) prevents restoration as of the
applicable Accounting Date, notwithstanding the Participant's repayment. The
Advisory Committee shall direct the Trustee to commingle the Participant's
sub-account with the balance of the Trust Fund as of the second Accounting Date
immediately following the date of the Participant's repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section 5.03,
Year of Service means any Plan Year during which an Employee completes not less
than 1,000 Hours of Service with the Employer.
5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant incurs a "Break in Service" if during any Plan Year he does not
complete more than 500 Hours of Service with the Employer.
5.08 INCLUDED YEARS OF SERVICE - VESTING.
(A) Included Years of Service. For purposes of determining "Years of Service"
under Section 5.06, the Plan takes into account all Years of Service an Employee
completes with the Employer.
(B) Forfeiture Break in Service. For the sole purpose of determining a
Participant's Nonforfeitable percentage of his Accrued Benefit derived from
Employer contributions which accrued for his benefit prior to a Forfeiture Break
in Service, the Plan disregards any Year of Service after the Participant first
incurs a Forfeiture Break in Service. The Participant incurs a Forfeiture Break
in Service when he incurs five consecutive Breaks in Service.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any,
of his Accrued Benefit derived from Employer contributions occurs
under the Plan on the earlier of:
(a) The last day of the Plan Year in which the Participant first incurs a
Forfeiture Break in Service; or
(b) The date the Participant receives a cash-out distribution.
The Advisory Committee determines the percentage of a Participant's Accrued
Benefit forfeiture, if any, under this Section 5.09 solely by reference to the
vesting schedule of Section 5.03. A Participant will not forfeit any portion of
his Accrued Benefit for any other reason or cause except as expressly provided
by this Section 5.09 or as provided under Section 9.14.
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Except as otherwise provided in
Section 6.05 and unless, pursuant to Section 6.03, the Participant or the
Beneficiary elects in writing to a different time or method of payment, the
Advisory Committee will direct the Trustee to commence distribution of a
Participant's Nonforfeitable Accrued Benefit in accordance with this Section
6.01. A Participant must consent, in writing, to any distribution required under
this Section 6.01 if the present value of the Participant's Nonforfeitable
Accrued Benefit, at the time of the distribution to the Participant, exceeds
$5,000 and the Participant has not attained Normal Retirement Age. A
distribution date under this Article VI, unless otherwise specified within the
Plan, is the first day of every calendar month or as soon as administratively
practicable following such a distribution date.
(A) Separation from Service for Reason Other Than Death.
(1) Participant's Nonforfeitable Accrued Benefit Not Exceeding
$5,000. If the Participant's Separation from Service is for any
reason (including disability) other than death, the Advisory
Committee will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in a lump sum, as soon as
administratively practicable following the latest of (i) the Plan
Year of Participant's Separation from Service, (ii) the Plan Year
in which Participant attains Normal Retirement Age, or (iii) the
Plan Year in which the tenth anniversary of the Participant's
commencement of participation in the Plan occurs; provided,
however, that in no event shall such distribution occur later
than the Normal Retirement Distribution Date.
(2) Participant's Nonforfeitable Accrued Benefit Exceeds $5,000.
Unless the Participant elects a later distribution date, if the
Participant's Separation from Service is for any reason
(including disability) other than death, the Advisory Committee
will direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit as soon as administratively
practicably following the latest of (i) the Plan Year of
Participant's Separation from Service, (ii) the Plan Year in
which Participant attains Normal Retirement Age, or (iii) the
Plan Year in which the tenth anniversary of which the
Participant's commencement of participation in the Plan occurs.
However, in the absence of an election by the Participant, the
Participant's Nonforfeitable Accrued Benefit will be distributed
no later than the Normal Retirement Distribution Date.
(B) Required Beginning Date. If any distribution commencement date described
under Paragraph (A) of this Section 6.01, either by Plan provision or by
Participant election (or nonelection), is later than the Participant's Required
Beginning Date, the Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date. A Participant's
Required Beginning Date is the April 1 following the close of the calendar year
in which the Participant attains age 70<<. However, if the Participant, prior to
incurring a Separation from Service, attained age 70<< by January 1, 1988, and,
for the five Plan Year period ending in the calendar year in which he attained
age 70<< and for all subsequent years, the Participant was not a more than 5%
owner, the Required Beginning Date is the April 1 following the close of the
calendar year in which the Participant separates from Service or, if earlier,
the April 1 following the close of the calendar year in which the Participant
becomes a more than 5% owner. A mandatory distribution at the Participant's
Required Beginning Date will be in lump sum unless the Participant, pursuant to
the provisions of this Article VI, makes a valid election to receive an
alternative form of payment.
(C) Death of the Participant. The Advisory Committee will direct the Trustee, in
accordance with this Section 6.01(C), to distribute to the Participant's
Beneficiary the Participant's Nonforfeitable Accrued Benefit remaining in the
Trust at the time of the Participant's death.
(1) Deceased Participant's Nonforfeitable Accrued Benefit Does Not
Exceed $5,000. The Advisory Committee must direct the Trustee to
distribute the deceased Participant's Nonforfeitable Accrued
Benefit in lump sum, as soon as administratively practicable
following the Participant's death or, if later, the date on which
the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
(2) Deceased Participant's Nonforfeitable Accrued Benefit Exceeds
$5,000. The Advisory Committee will direct the Trustee to
distribute the deceased Participant's Nonforfeitable Accrued
Benefit at the time and in the method elected by the Participant
or, if applicable by the Beneficiary, as permitted under this
Article VI. In the absence of an election the Advisory Committee
will direct the Trustee to distribute the Participant's
undistributed Nonforfeitable Accrued Benefit in lump sum on the
first distribution date following the close of the Plan Year in
which the Participant's death occurs or, if later, the first
distribution date following the date the Advisory Committee
receives notification of or otherwise confirms the Participant's
death.
If the death benefit is payable in full to the Participant's surviving
spouse, the surviving spouse, in addition to the distribution options provided
in this Section 6.01(C), may elect distribution at any time or in any form this
Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to any restrictions
prescribed by Section 6.03, a Participant or Beneficiary may elect distribution
under one, or any combination, of the following methods: (a) by payment in lump
sum; or (b) by payment in annual installments over a fixed reasonable period of
time, not exceeding the life expectancy of the Participant, or the joint life
and last survivor expectancy of the Participant and his Beneficiary.
The distribution options permitted under this Section 6.02 are available
only if the present value of the Participant Nonforfeitable Accrued Benefit, at
the time of the distribution to the Participant, exceeds $5,000. To facilitate
installment payments under this Article VI, the Advisory Committee may direct
the Trustee to segregate all or any part of the Participant's Accrued Benefit in
a separate Account. The Trustee will invest the Participant's segregated Account
in Federally insured interest bearing savings account(s) or time deposit(s) (or
a combination of both), or in other fixed income investments. A segregated
Account remains a part of the Trust, but it alone shares in any income it earns,
and it alone bears any expense or loss it incurs. Subject to Section 10.08, a
Participant or Beneficiary may elect to receive an installment distribution in
the form of a Nontransferable Annuity Contract. Under an installment
distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit.
(A) Minimum Distribution Requirements for Participants. The Advisory Committee
may not direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit, nor may the Participant elect to have the Trustee distribute
his Nonforfeitable Accrued Benefit, under a method of payment which, as of the
Required Beginning Date, does not satisfy the minimum distribution requirements
under Code Section 401(a)(9) and the applicable Treasury Regulations. The
minimum distribution for a calendar year equals the Participant's Nonforfeitable
Accrued Benefit as of the latest valuation date preceding the beginning of the
calendar year divided by the Participant's life expectancy or, if applicable,
the joint and last survivor expectancy of the Participant and his designated
Beneficiary (as determined under Article VIII, subject to the requirements of
the Code Section 401(a)(9) regulations). The Advisory Committee will increase
the Participant's Nonforfeitable Accrued Benefit, as determined on the relevant
valuation date, for contributions or forfeitures allocated after the valuation
date and by December 31 of the valuation calendar year, and will decrease the
valuation by distributions made after the valuation date and by December 31 of
the valuation calendar year. For purposes of this valuation, the Advisory
Committee will treat any portion of the minimum distribution for the first
distribution calendar year made after the close of that year as a distribution
occurring in that first distribution calendar year. In computing a minimum
distribution, the Advisory Committee must use the unisex life expectancy
multiples under Treas. Reg. Section 1.72-9. The Advisory Committee, only upon
the Participant's written request, will compute the minimum distribution for a
calendar year subsequent to the first calendar year for which the Plan requires
a minimum distribution by redetermining the applicable life expectancy. However,
the Advisory Committee may not redetermine the joint life and last survivor
expectancy of the Participant and a nonspouse designated Beneficiary in a manner
which takes into account any adjustment to a life expectancy other than the
Participant's life expectancy.
If the Participant's spouse is not his designated Beneficiary, a method of
payment to the Participant (whether by Participant election or by Advisory
Committee direction) may not provide more than incidental benefits to the
Beneficiary. For Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB") requirement in the
Treasury Regulations issued under Code Section 401(a)(9) for distributions made
on or after the Participant's Required Beginning Date and before the
Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life expectancy
factor, if the MDIB divisor is a lesser number. Following the Participant's
death, the Advisory Committee will compute the minimum distribution required by
this Section 6.02(A) solely on the basis of the applicable life expectancy
factor and will disregard the MDIB factor. [For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits requirement if the
distributions to the Participant satisfied the MDIB requirement or if the
present value of the retirement benefits payable solely to the Participant is
greater than 50% of the present value of the total benefits payable to the
Participant and his Beneficiaries.] The Advisory Committee must determine
whether benefits to the Beneficiary are incidental as of the date the Trustee is
to commence payment of the retirement benefits to the Participant, or as of any
date the Trustee redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar year is due by
the Participant's Required Beginning Date. The minimum distribution for each
subsequent distribution calendar year, including the calendar year in which the
Participant's Required Beginning Date falls, is due by December 31 of that
calendar year. If the Participant receives distribution in the form of a
Nontransferable Annuity Contract, the distribution satisfies this Section
6.02(A) if the contract complies with the requirements of Code Section 401(a)(9)
and the applicable Treasury Regulations.
(B) Minimum Distribution Requirements for Beneficiaries. The method of
distribution to the Participant's Beneficiary must satisfy Code Section
401(a)(9) and the applicable Treasury Regulations. If the Participant's death
occurs after his Required Beginning Date, the method of payment to the
Beneficiary must provide for completion of payment over a period which does not
exceed the payment period which had commenced for the Participant. If the
Participant's death occurs prior to his Required Beginning Date, the method of
payment to the Beneficiary must provide for completion of payment to the
Beneficiary over a period not exceeding: (i) five years after the date of the
Participant's death; or (ii) if the Beneficiary is a designated Beneficiary, the
designated Beneficiary's life expectancy. The Advisory Committee may not direct
payment of the Participant's Nonforfeitable Accrued Benefit over a period
described in clause (ii) unless the Trustee will commence payment to the
designated Beneficiary no later than the December 31 following the close of the
calendar year in which the Participant's death occurred or, if later, and the
designated Beneficiary is the Participant's surviving spouse, December 31 of the
calendar year in which the Participant would have attained age 70<<. If the
Trustee will make distribution in accordance with clause (ii), the minimum
distribution for a calendar year equals the Participant's Nonforfeitable Accrued
Benefit as of the latest valuation date preceding the beginning of the calendar
year divided by the designated Beneficiary's life expectancy. The Advisory
Committee must use the unisex life expectancy multiples under Treas. Reg.
Section 1.72-9 for purposes of applying this paragraph. The Advisory Committee
will not recalculate the life expectancy of any Beneficiary, including the
Participant's surviving spouse. The Advisory Committee will apply this paragraph
by treating any amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the age of
majority, as paid to the Participant's surviving spouse. Upon the Beneficiary's
written request, the Advisory Committee must direct the Trustee to accelerate
payment of all, or any portion, of the Participant's unpaid Accrued Benefit, as
soon as administratively practicable following the effective date of that
request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days, but not later
than 30 days, before the Participant's distribution date, the Advisory Committee
must provide a benefit notice to a Participant who is eligible to make an
election under this Section 6.03. The benefit notice must explain the optional
forms of benefit in the Plan, including the material features and relative
values of those options.
If a Participant or Beneficiary makes an election prescribed by this
Section 6.03, the Advisory Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit in accordance with that election.
Any election under this Section 6.03 is subject to the requirements of Section
6.02. The Participant or Beneficiary must make an election under this Section
6.03 by filing his election form with the Advisory Committee at any time before
the Trustee otherwise would commence to pay a Participant's Accrued Benefit in
accordance with the requirements of Article VI.
(A) Participant Elections After Separation from Service. If the present value of
a Participant's Nonforfeitable Accrued Benefit exceeds $5,000, he may elect to
have the Trustee commence distribution as of any distribution date, but not
earlier than the earliest permissible distribution date permitted under Section
6.01 or 6.05, as applicable. The Participant may reconsider an election at any
time prior to the stated distribution date and elect to commence distribution as
of any other permissible distribution date. A Participant may not receive a
distribution if, prior to the time the Trustee actually makes the distribution,
the Participant returns to employment with the Employer.
(B) Death Benefit Elections. If the present value of the deceased Participant's
Nonforfeitable Accrued Benefit exceeds $5,000, the Participant's Beneficiary may
elect to have the Trustee distribute the Participant's Nonforfeitable Accrued
Benefit in a method and within a period otherwise permitted under this Article.
The Beneficiary's election is subject to any restrictions designated in writing
by the Participant and not revoked as of his date of death.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The joint
and survivor annuity requirements of the Code do not apply to this Plan. The
Plan does not provide any life annuity distributions to Participants. A transfer
agreement described in Section 13.05 may not permit a plan which is subject to
the provisions of Code Section 417 to transfer assets to this Plan.
6.05 SPECIAL DISTRIBUTION AND PAYMENT REQUIREMENTS. Unless the Participant
elects in writing to have the Trustee apply any other distribution provisions of
the Plan that may exist from time to time, or unless other distribution
provisions of the Plan require earlier distribution of the Participant's Accrued
Benefit, the Trustee must distribute the Participant's Accrued Benefit reduced
by Leveraged Employer Securities as described below in this Section (the
"Eligible Portion") no later than the time prescribed by this Section 6.05,
irrespective of any other provision of the Plan. The distribution provisions of
this Section 6.05 are subject to the consent and form of distribution
requirements of Articles V and VI of the Plan.
(a) If the Participant separates from Service by reason of the attainment
of Normal Retirement Age, death, or disability, the Advisory Committee will
direct the Trustee to commence distribution of the Eligible Portion not
later than one year after the close of the Plan Year in which the
applicable event occurs.
(b) If the Participant separates from Service for any reason other than by
reason of the attainment of Normal Retirement Age, death or disability, the
Advisory Committee will direct the Trustee to commence distribution of the
Eligible Portion not later than one year after the close of the fifth Plan
Year following the Plan Year in which the Participant separated from
Service. If the Participant resumes employment with the Employer on or
before the last day of the fifth Plan Year following the Plan Year of his
separation from Service, the mandatory distribution provisions of this
paragraph (b) do not apply.
For purposes of this Section 6.05, the Eligible Portion does not include
any Leveraged Employer Securities until the close of the Plan Year in which the
borrower repays the Exempt Loan in full.
Period of Payment. The Advisory Committee will direct the Trustee to make
distributions required under this Section 6.05 over a period not exceeding five
years unless the Participant otherwise elects under the other distributions
provisions of the Plan. If a Participant's Eligible Portion exceeds $500,000,
the maximum payment period, subject to a contrary election by the Participant,
is five years plus one additional year (but no more than five additional years)
for each $100,00 (or fraction of $100,000) by which the Eligible Portion exceeds
$500,000. The Advisory Committee will apply this Section 6.05 by adjusting the
$500,000 and $100,000 limitations by the adjustment factor prescribed by the
Secretary of the Treasury under Code Section 415(d). In no event will the
distribution period exceed the period permitted under Section 6.02 of the Plan.
6.06 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS. For distributions
made after December 31, 1992, a Participant may elect, at the time and in the
manner prescribed by the Committee, to have any portion of his eligible rollover
distribution paid directly to an eligible retirement plan specified by the
Participant in a direct rollover designation. For purposes of this Section 6.06,
a Participant includes a Participant's surviving spouse and the Participant's
spouse or former spouse who is an alternate payee under a qualified domestic
relations order.
The following definitions apply to this Section 6.06:
(a) Eligible rollover distribution. An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
Participant, except an eligible rollover distribution does not include: any
distribution which is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent required under Code Section 401(a)(9); and the
portion of any distribution which is not includible in gross income
(determined without regard to the exclusion of net unrealized appreciation
with respect to employer securities).
(b) Eligible retirement plan. An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), which accepts the Participant's eligible rollover
distribution. However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) Direct rollover. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing contained in
this Plan prevents the Trustee, in accordance with the direction of the Advisory
Committee, from complying with the provisions of a qualified domestic relations
order (as defined in Code Section 414(p)). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained his earliest
retirement age (as defined under Code Section 414(p)) under the Plan. A
distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if: (1) the order specifies
distribution at that time or permits an agreement between the Plan and the
alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $5,000, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.07 gives a Participant a right to receive distribution at a time
otherwise not permitted under the Plan nor does it permit the alternate payee to
receive a form of payment not otherwise permitted under the Plan.
The Advisory Committee must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Advisory Committee promptly will notify the Participant and
any alternate payee named in the order, in writing, of the receipt of the order
and the Plan's procedures for determining the qualified status of the order.
Within a reasonable period of time after receiving the domestic relations order,
the Advisory Committee must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Advisory Committee must provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued Benefit is
payable during the period the Advisory Committee is making its determination of
the qualified status of the domestic relations order, the Advisory Committee
must make a separate accounting of the amounts payable. If the Advisory
Committee determines the order is a qualified domestic relations order within 18
months of the date amounts first are payable following receipt of the order, the
Advisory Committee will direct the Trustee to distribute the payable amounts in
accordance with the order. If the Advisory Committee does not make its
determination of the qualified status of the order within the 18 month
determination period, the Advisory Committee will direct the Trustee to
distribute the payable amounts in the manner the Plan would distribute if the
order did not exist and will apply the order prospectively if the Advisory
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the qualified
domestic relations order, the Advisory Committee may direct the Trustee to
invest any partitioned amount in a segregated subaccount or separate account and
to invest the account in Federally insured, interest-bearing savings account(s)
or time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated subaccount remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or loss it incurs.
The Trustee will make any payments or distributions required under this Section
6.07 by separate benefit checks or other separate distribution to the alternate
payee(s).
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply current information
to the Advisory Committee as to the name, date of birth, date of employment,
annual compensation, leaves of absence, Years of Service and date of termination
of employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Advisory Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Advisory Committee are conclusive as
to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to
any of its Employees, Participants or Beneficiaries for any act of, or failure
to act on the part of, its Advisory Committee (unless the Employer is the
Advisory Committee), the Trustee or the Plan Administrator (unless the Employer
is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer indemnifies and saves
harmless the Plan Administrator and the members of the Advisory Committee, and
each of them, from and against any and all loss resulting from liability to
which the Plan Administrator and the Advisory Committee, or the members of the
Advisory Committee, may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in the
administration of this Trust or Plan or both, including all expenses reasonably
incurred in their defense, in case the Employer fails to provide such defense.
The indemnification provisions of this Section 7.03 do not relieve the Plan
Administrator or any Advisory Committee member from any liability he may have
under ERISA for breach of a fiduciary duty. Furthermore, the Plan Administrator
and the Advisory Committee members and the Employer may execute a letter
agreement further delineating the indemnification agreement of this Section
7.03, provided the letter agreement must be consistent with and must not violate
ERISA. The indemnification provisions of this Section 7.03 extend to the Trustee
solely to the extent provided by a letter agreement executed by the Trustee and
the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the right to direct
the Trustee with respect to the investment and re- investment of assets
comprising the Trust Fund only if the Trustee consents in writing to permit such
direction.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right
to amend the vesting schedule at any time, the Advisory Committee will not apply
the amended vesting schedule to reduce the Nonforfeitable percentage of any
Participant's Accrued Benefit derived from Employer contributions (determined as
of the later of the date the Employer adopts the amendment, or the date the
amendment becomes effective) to a percentage less than the Nonforfeitable
percentage computed under the Plan without regard to the amendment. An amended
vesting schedule will apply to a Participant only if the Participant receives
credit for at least one Hour of Service after the new schedule becomes
effective.
If the Employer makes a permissible amendment to the vesting schedule, each
Participant having at least three Years of Service with the Employer may elect
to have the percentage of his Nonforfeitable Accrued Benefit computed under the
Plan without regard to the amendment. For Plan Years beginning prior to January
1, 1989, the election described in the preceding sentence applies only to
Participants having at least five Years of Service with the Employer. The
Participant must file his election with the Advisory Committee within 60 days of
the latest of (a) the Employer's adoption of the amendment; (b) the effective
date of the amendment; or (c) his receipt of a copy of the amendment. The
Advisory Committee, as soon as practicable, must forward a true copy of any
amendment to the vesting schedule to each affected Participant, together with an
explanation of the effect of the amendment, the appropriate form upon which the
Participant may make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time within which the
Participant must make an election to remain under the prior vesting schedule.
The election described in this Section 7.05 does not apply to a Participant if
the amended vesting schedule provides for vesting at least as rapid at all times
as the vesting schedule in effect prior to the amendment. For purposes of this
Section 7.05, an amendment to the vesting schedule includes any Plan amendment
which directly or indirectly affects the computation of the Nonforfeitable
percentage of an Employee's rights to his Employer derived Accrued Benefit.
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee will pay his Nonforfeitable Accrued Benefit in the event of his
death and the Participant may designate the form and method of payment. The
Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.
A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent. The spousal
consent requirements of this paragraph do not apply if: (1) the Participant and
his spouse are not married throughout the one year period ending on the date of
the Participant's death; (2) the Participant's spouse is the Participant's sole
primary beneficiary; (3) the Plan Administrator is not able to locate the
Participant's spouse; (4) the Participant is legally separated or has been
abandoned (within the meaning of State law) and the Participant has a court
order to that effect; or (5) other circumstances exist under which the Secretary
of the Treasury will excuse the consent requirement. If the Participant's spouse
is legally incompetent to give consent, the spouse's legal guardian (even if the
guardian is the Participant) may give consent.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a Participant
fails to name a Beneficiary in accordance with Section 8.01, or if the
Beneficiary named by a Participant predeceases him, then the Trustee will pay
the Participant's Nonforfeitable Accrued Benefit in accordance with Section 6.02
in the following order of priority to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted
children, in equal shares;
(c) The Participant's surviving parents, in equal shares; or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the Participant's entire Nonforfeitable Accrued Benefit, the
Trustee will pay the remaining Nonforfeitable Accrued Benefit to the
Beneficiary's estate unless the Participant's Beneficiary designation provides
otherwise. The Advisory Committee will direct the Trustee as to the method and
to whom the Trustee will make payment under this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Advisory Committee such evidence, data
or information as the Advisory Committee considers necessary or desirable for
the purpose of administering the Plan. The provisions of this Plan are effective
for the benefit of each Participant upon the condition precedent that each
Participant will furnish promptly full, true and complete evidence, data and
information when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to comply with
its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Advisory Committee from time to time, in
writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or as shown
on the records of the Employer, binds the Participant, or Beneficiary, for all
purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p) relating to
qualified domestic relations orders, neither a Participant nor a Beneficiary may
anticipate, assign or alienate (either at law or in equity) any benefit provided
under the Plan, and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan is not subject
to attachment, garnishment, levy, execution or other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary
may examine copies of the Plan description, latest annual report, any bargaining
agreement, this Plan and Trust, contract or any other instrument under which the
Plan was established or is operated. The Plan Administrator will maintain all of
the items listed in this Section 8.08 in his office, or in such other place or
places as he may designate from time to time in order to comply with the
regulations issued under ERISA, for examination during reasonable business
hours. Upon the written request of a Participant or Beneficiary the Plan
Administrator will furnish him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the requesting
person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary ("Claimant") may file with the Advisory Committee a written claim
for benefits, if the Participant or Beneficiary determines the distribution
procedures of the Plan have not provided him his proper Nonforfeitable Accrued
Benefit. The Advisory Committee must render a decision on the claim within 60
days of the Claimant's written claim for benefits. The Plan Administrator must
provide adequate notice in writing to the Claimant whose claim for benefits
under the Plan the Advisory Committee has denied. The Plan Administrator's
notice to the Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on which the Advisory
Committee based its denial;
(c) A description of any additional material and information needed for the
Claimant to perfect his claim and an explanation of why the material or
information is needed; and
(d) Any appeal the Claimant wishes to make of the adverse determination
must be in writing to the Advisory Committee within 75 days after receipt
of the Plan Administrator's notice of denial of benefits. The Plan
Administrator's notice must further advise the Claimant that his failure to
appeal the action to the Advisory Committee in writing within the 75 day
period will render the Advisory Committee's determination final, binding
and conclusive.
If the Claimant should appeal to the Advisory Committee, he, or his duly
authorized representative, may submit, in writing, whatever issues and comments
he, or his duly authorized representative, feels are pertinent. The Claimant, or
his duly authorized representative, may review pertinent Plan documents. The
Advisory Committee will re-examine all facts related to the appeal and make a
final determination as to whether the denial of benefits is justified under the
circumstances. The Advisory Committee must advise the Claimant of its decision
within 60 days of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a decision within
the 60-day limit unfeasible, but in no event may the Advisory Committee render a
decision respecting a denial for a claim for benefits later than 120 days after
its receipt of a request for review.
The Plan Administrator's notice of denial of benefits must identify the
name of each member of the Advisory Committee and the name and address of the
Advisory Committee member to whom the Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. Except as provided in this
Section 8.10, a Participant does not have the right to direct the Trustee with
respect to the investment or re- investment of the assets comprising the
Participant's individual Account. Each Qualified Participant may direct the
Trustee as to the investment of 25% of the value of the Participant's Accrued
Benefit attributable to Employer Securities (the "Eligible Accrued Benefit")
within 90 days after the Accounting Date of each Plan Year (to the extent a
direction amount exceeds the amount to which a prior direction under this
Section 8.10 applies) during the Participant's Qualified Election Period. For
the last Plan Year in the Participant's Qualified Election Period, the Trustee
will substitute "50%" for "25%" in the immediately preceding sentence. The
Qualified Participant must make his direction to the Trustee in writing, the
direction may be effective no later than 180 days after the close of the Plan
Year to which the direction applies, and the direction must specify which, if
any, of the investment options the Participant selects.
A Qualified Participant may choose one of the following investment options:
(a) The distribution of the portion of his Eligible Accrued Benefit covered
by the election. The Trustee will make the distribution within 90 days
after the last day of the period during which the Qualified Participant may
make the election. The provisions of this Plan applicable to a distribution
of Employer Securities, including the put option requirements of Article
XI, apply to this investment option.
(b) The direct transfer of the portion of his Eligible Accrued Benefit
covered by the election to another qualified plan of the Employer which
accepts such transfers, but only if the transferee plan permits
employee-directed investment and does not invest in Employer Securities to
a substantial degree. The Trustee will make the direct transfer no later
than 90 days after the last day of the period during which the Qualified
Participant may make the election.
For purposes of this Section 8.10, the following definitions apply:
(i) "Qualified Participant" means a Participant who has attained age
55 and who has completed at least 10 years of participation in the
Plan. A "year of participation" means a Plan Year in which the
Participant was eligible for an allocation of Employer contributions,
irrespective of whether the Employer actually contributed to the Plan
for that Plan Year.
(ii) "Qualified Election Period" means the six-Plan- Year period
beginning with the Plan Year in which the Participant first becomes a
Qualified Participant.
A Participant's right under this Section 8.10 to direct the investment of
his Account applies to all Employer Securities acquired by the Plan after
December 31, 1986.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT
TO PARTICIPANTS' ACCOUNTS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an Advisory
Committee to administer the Plan, the members of which may or may not be
Participants in the Plan, or which may be the Plan Administrator acting alone.
In the absence of an Advisory Committee appointment, the Plan Administrator
assumes the powers, duties and responsibilities of the Advisory Committee. The
members of the Advisory Committee will serve without compensation for services
as such, but the Employer will pay all expenses of the Advisory Committee,
except to the extent the Trust properly pays for such expenses, pursuant to
Article X.
9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following powers and duties:
(a) To select a Secretary, who need not be a member of the Advisory
Committee;
(b) To determine the rights of eligibility of an Employee to participate in
the Plan, the value of a Participant's Accrued Benefit and the
Nonforfeitable percentage of each Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary for the proper
and efficient administration of the Plan, provided the rules are not
inconsistent with the terms of this Agreement;
(d) To construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and
documents related to the Plan's operation;
(e) To direct the Trustee as respects the crediting and distribution of the
Trust;
(f) To review and render decisions respecting a claim for (or denial of a
claim for) a benefit under the Plan;
(g) To furnish the Employer with information the Employer may require for
tax or other purposes;
(h) To engage the service of agents whom it may deem advisable to assist it
with the performance of its duties; and
(i) To engage the services of an Investment Manager or Managers (as defined
in ERISA Section 3(38)), each of whom will have full power and authority to
manage, acquire or dispose (or direct the Trustee with respect to
acquisition or disposition) of any Plan asset under its control.
The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.
9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the members appointed
and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize any
one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters or
other documents. The Advisory Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide or
determine any matter concerning the distribution, nature or method of settlement
of his own benefits under the Plan, except in exercising an election available
to that member in his capacity as a Participant, unless the Plan Administrator
is acting alone in the capacity of the Advisory Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain, or direct
the Trustee to maintain, a separate Account, or multiple separate Accounts, in
the name of each Participant to reflect the Participant's Accrued Benefit under
the Plan. The Advisory Committee must maintain one Account designated as the
Employer Securities Account to reflect a Participant's interest in Employer
Securities held by the Trust and another Account designated as the General
Investments Account to reflect the Participant's interest in the Trust Fund
attributable to assets other than Employer Securities. If a Participant
re-enters the Plan subsequent to his having a Forfeiture Break in Service (as
defined in Section 5.08(B)), the Advisory Committee, or the Trustee, must
maintain a separate Account for the Participant's pre-Forfeiture Break in
Service Accrued Benefit and a separate Account for his post-Forfeiture Break in
Service Accrued Benefit unless the Participant's entire Accrued Benefit under
the Plan is 100% Nonforfeitable.
The Advisory Committee will make its allocations, or request the Trustee to
make its allocations, to the Accounts of the Participants in accordance with the
provisions of Section 9.11. The Advisory Committee may direct the Trustee to
maintain a temporary segregated investment Account in the name of a Participant
to prevent a distortion of income, gain or loss allocations under Section 9.11.
The Advisory Committee shall maintain records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Accrued Benefit consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account bears to the total net credit balance in the Accounts of all
Participants. For purposes of a distribution under the Plan, the value of a
Participant's Accrued Benefit attributable to his General Investments Account is
its value as of the valuation date immediately preceding the date of the
distribution.
9.11 ALLOCATION TO PARTICIPANT'S ACCRUED BENEFIT. A "valuation date" under
this Plan is each Accounting Date and each interim valuation date determined
under Section 10.14. As of each valuation date, the Advisory Committee must
adjust General Investments Accounts to reflect net income, gain or loss since
the last valuation date. The valuation period is the period beginning the day
after the last valuation date and ending on the current valuation date.
[A] Employer Securities Account. As of the Accounting Date of each Plan Year,
the Advisory Committee first will reduce Employer Securities Accounts for any
forfeitures arising under Section 5.09 and then will credit the Employer
Securities Account maintained for each Participant with the Participant's
allocable share of Employer Securities (including fractional shares) purchased
and paid for by the Trust or contributed in kind to the Trust, with any
forfeitures of Employer Securities and with any stock dividends on Employer
Securities allocated to his Employer Securities Account. The Advisory Committee
will allocate Employer Securities acquired with an Exempt Loan under Section
10.03[B] in accordance with that Section, subject however, to the provisions of
paragraph [C] of this Section 9.11. Except as otherwise specifically provided in
Section 10.03[B], the Advisory Committee will base allocations to the
Participants' Accounts on dollar values expressed as shares of Employer
Securities or on the basis of actual shares where there is a single class of
Employer Securities. In making a forfeiture reduction under this Section 9.11,
the Advisory Committee, to the extent possible, first must forfeit from a
Participant's General Investments Account before making a forfeiture from his
Employer Securities Account.
[B] General Investments Account. The allocation provisions of this paragraph
apply to all Participant General Investments Accounts other than segregated
investment Accounts. The Advisory Committee first will adjust the Participant
General Investments Accounts, as those Accounts stood at the beginning of the
current valuation period, by reducing the Accounts for any forfeitures arising
under Section 5.09 or under Section 9.14, for amounts charged during the
valuation period to the Accounts in accordance with Section 9.13 (relating to
distributions) and for the amount of any General Investments Account which the
Trustee has fully distributed since the immediately preceding valuation date.
The Advisory Committee then, subject to the restoration allocation requirements
of Section 9.14, will allocate the net income, gain or loss pro rata to the
adjusted Participant General Investments Accounts. The allocable net income,
gain or loss is the net income (or net loss), including the increase or decrease
in the fair market value of assets, since the last valuation date. In making its
allocations under this Section 9.11[B], the Advisory Committee will exclude
Employer Securities and interest paid by the Trust on an Exempt Loan.
[C] Dividends on Employer Securities. The Advisory Committee will allocate any
cash dividends the Employer pays with respect to Employer Securities to the
General Investments Accounts of participants in the same ratio, determined on
the dividend declaration date, that Employer Securities allocated to a
Participant's Employer Securities Account bear to the Employer Securities
allocated to all Employer Securities Accounts. The Advisory Committee will not
allocate to the General Investments Accounts any cash dividends the Employer
directs the Trustee to apply to the payment of an Exempt Loan nor any cash
dividends the Advisory Committee directs the Trustee to distribute in accordance
with Section 10.08. If the Employer directs the Trustee to apply cash dividends
on Employer Securities to the payment of an Exempt Loan, the Advisory Committee
first will allocate the released Employer Securities to the Participants'
Employer Securities Accounts in the same ratio, determined on the dividend
declaration date, that Employer Securities allocated to a Participant's Employer
Securities Account bear to the Employer Securities allocated to all Employer
Securities Accounts. This first allocation of released Employer Securities must
equal the greater of: (1) the shares of released Employer Securities equal to
the fair market value of the cash dividends attributable to the allocated
Employer Securities; or (2) the number of shares of all released Employer
Securities attributable to the cash dividends on allocated Employer Securities.
If any released Employer Securities remain unallocated after the first
allocation, the Advisory Committee will allocate these remaining released
Employer Securities under Section 3.04(A) as if the Employer has made an
Employer contribution equal to the amount of the cash dividend attributable to
the unallocated Employer Securities.
[D] Segregated Investment Accounts. A segregated investment Account receives all
income it earns and bears all expense or loss it incurs. As of the valuation
date, the Advisory Committee must reduce a segregated Account for any forfeiture
arising under Section 5.09 after the Advisory Committee has made all other
allocations, changes or adjustments to the Account for the Plan Year.
[E] Additional rules. An excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. This Section 9.11 applies solely to the
allocation of net income, gain or loss of the Trust. The Advisory Committee will
allocate the Employer contributions and Participant forfeitures, if any, in
accordance with Article III.
[F] Allocation Restriction. To the extent a shareholder sells Employer
Securities to the Trust and elects (with the consent of the Employer)
nonrecognition of gain under Code Section 1042, the Committee will not, directly
or indirectly, allocate under the Plan, at any time, any portion of the
purchased Employer Securities to:
(a) the selling shareholder,
(b) the selling shareholder's spouse, brothers or sisters (whether by the
whole or half blood), ancestors or lineal descendants; or
(c) any shareholder owning (as determined under Code Section 318(a)) more
than 25% in value of any class of Employer Securities.
For purposes of this Section 9.11[F], the term "shareholder" includes the
shareholder's executor and the term "purchased Employer Securities" includes any
dividends or other income attributable to the purchased Employer Securities.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date
of each Plan Year, but within the time prescribed by ERISA and the regulations
under ERISA, the Plan Administrator will deliver to each Participant (and to
each Beneficiary) a statement reflecting the condition of his Accrued Benefit in
the Trust as of that date and such other information ERISA requires be furnished
the Participant or Beneficiary. No Participant, except a member of the Advisory
Committee, has the right to inspect the records reflecting the Account of any
other Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a Participant's
Account for all distributions made from that Account to the Participant, to his
Beneficiary or to an alternate payee. The Advisory Committee also will charge a
Participant's Account for any administrative expenses incurred by the Plan
directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require either the
Trustee or the Advisory Committee to search for, or to ascertain the whereabouts
of, any Participant or Beneficiary. At the time the Participant's or
Beneficiary's benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last known address
of record with the Advisory Committee or the Employer, must notify any
Participant, or Beneficiary, that he is entitled to a distribution under this
Plan. The notice must quote the provisions of this Section 9.14 and otherwise
must comply with the notice requirements of Article VI. If the Participant, or
Beneficiary, fails to claim his distributive share or make his whereabouts known
in writing to the Advisory Committee within six months from the date of mailing
of the notice, the Advisory Committee will treat the Participant's or
Beneficiary's unclaimed payable Accrued Benefit as forfeited and will reallocate
the unclaimed payable Accrued Benefit in accordance with Section 3.05. A
forfeiture under this paragraph will occur at the end of the notice period or,
if later, the earliest date applicable Treasury Regulations would permit the
forfeiture. Pending forfeiture, the Advisory Committee, following the expiration
of the notice period, may direct the Trustee to segregate the Nonforfeitable
Accrued Benefit in a segregated Account and to invest that segregated Account in
Federally insured interest bearing savings accounts or time deposits (or in a
combination of both), or in other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his
Accrued Benefit under the provisions of the first paragraph of this Section 9.14
makes a claim, at any time, for his forfeited Accrued Benefit, the Advisory
Committee must restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the Accrued Benefit
forfeited, unadjusted for any gains or losses occurring subsequent to the date
of the forfeiture. The Advisory Committee will make the restoration during the
Plan Year in which the Participant or Beneficiary makes the claim, first from
the amount, if any, of Participant forfeitures the Advisory Committee otherwise
would allocate for the Plan Year, then from the amount, if any, of the Trust
Fund net income or gain for the Plan Year and then from the amount, or
additional amount, the Employer contributes to enable the Advisory Committee to
make the required restoration. The Advisory Committee must direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued Benefit to him
not later than 60 days after the close of the Plan Year in which the Advisory
Committee restores the forfeited Accrued Benefit. The forfeiture provisions of
this Section 9.14 apply solely to the Participant's or to the Beneficiary's
Accrued Benefit derived from Employer contributions.
ARTICLE X
TRUSTEE, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan and
agrees to perform the obligations imposed. The Trustee must provide bond for the
faithful performance of its duties under the Trust to the extent required by
ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer
for the funds contributed to it by the Employer, but does not have any duty to
see that the contributions received comply with the provisions of the Plan. The
Trustee is not obliged to collect any contributions from the Employer, nor is
obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.
10.03 TRUSTEE POWERS.
[A] Trustee Powers. The Trustee is authorized and empowered, but not by way of
limitation, with the following powers, rights and duties:
(a) To invest the Trust Fund primarily in Employer Securities ("primarily"
meaning the authority to hold and to acquire not more than 100% of the
Trust Fund in Employer Securities) and to invest any part or all of the
Trust Fund in any common or preferred stocks, open-end or closed-end mutual
funds, put and call options traded on a national exchange, United States
retirement plan bonds, corporate bonds, debentures, convertible debentures,
commercial paper, U.S. Treasury bills, U.S. Treasury notes and other direct
or indirect obligations of the United States Government or its agencies,
improved or unimproved real estate situated in the United States, limited
partnerships, insurance contracts of any type, mortgages, notes or other
property of any kind, real or personal, and to buy or sell options on
common stock on a nationally recognized exchange with or without holding
the underlying common stock, and to make any other investments the Trustee
deems appropriate, as a prudent man would do under like circumstances with
due regard for the purposes of this Plan. Any investment made or retained
by the Trustee in good faith is proper but must be of a kind (with the
exception of Employer Securities) constituting a diversification considered
by law suitable for trust investments.
(b) To retain in cash so much of the Trust Fund as it may deem advisable to
satisfy liquidity needs of the Plan and to deposit any cash held in the
Trust Fund in a bank account at reasonable interest.
(c) To invest, if the Trustee is a bank or similar financial institution
supervised by the United States or by a State, in any type of deposit of
the Trustee (or of a bank related to the Trustee within the meaning of Code
Section 414(b)) at a reasonable rate of interest or in a common trust fund
(the provisions of which govern the investment of such assets and which the
Plan incorporates by this reference) as described in Code Section 584 which
the Trustee (or its affiliate, as defined in Code Section 1504) maintains
exclusively for the collective investment of money contributed by the bank
(or the affiliate) in its capacity as trustee and which conforms to the
rules of the Comptroller of the Currency. The Trustee shall have full power
and authority to invest money or assets of the Trust Fund in any collective
investment fund of a bank or trust company consisting of assets of employee
benefit trusts and qualifying as a group trust under Section 401 of the
Internal Revenue Code of 1986, as amended. Assets of this trust invested in
any such fund shall be held and administered by the trustee of the fund in
accordance with the terms and under the powers granted in said governing
document of any such fund.
(d) To manage, sell, contract to sell, grant options to purchase, convey,
exchange, transfer, abandon, improve, repair, insure, lease for any term
even though commencing in the future or extending beyond the term of the
Trust, and otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and conditions as the
Trustee decides.
(e) To credit and distribute the Trust as directed by the Advisory
Committee. The Trustee is not obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the distribution is
proper or within the terms of the Plan, or as to the manner of making any
payment or distribution. The Trustee is accountable only to the Advisory
Committee for any payment or distribution made by it in good faith on the
order or direction of the Advisory Committee.
(f) To borrow money, to assume indebtedness, extend mortgages and encumber
by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and demands, in its
discretion.
(h) To vote and tender, subject to Section 10.17, all voting or other stock
held by the Trust Fund;
(i) To lease for oil, gas and other mineral purposes and to create mineral
severances by grant or reservation; to pool or unitize interests in oil,
gas and other minerals; and to enter into operating agreements and to
execute division and transfer orders.
(j) To hold any securities or other property in the name of the Trustee or
its nominee, with depositories or agent depositories or in another form as
it may deem best, with or without disclosing the trust relationship.
(k) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management, investment and
distribution of the Trust.
(l) To retain any funds or property subject to any dispute without
liability for the payment of interest to the extent permissible under
ERISA, and to decline to make payment or delivery of the funds or property
until final adjudication is made by a court of competent jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and the Advisory
Committee an annual statement of account showing the condition of the Trust
Fund and all investments, receipts, disbursements and other transactions
effected by the Trustee during the Plan Year covered by the statement and
also stating the assets of the Trust held at the end of the Plan Year,
which accounts are conclusive on all persons, including the Employer, the
Plan Administrator and the Advisory Committee, except as to any act or
transaction concerning which the Employer, the Plan Administrator or the
Advisory Committee files with the Trustee written exceptions or objections
within 90 days after the receipt of the accounts or for which ERISA
authorizes a longer period within which to object.
(o) To begin, maintain or defend any litigation necessary in connection
with the administration of the Plan, except that the Trustee is not obliged
or required to do so unless indemnified to its satisfaction.
The powers, rights and duties set forth in paragraphs (a), (b), (c), (d),
(e), (f), (h), (i) and (l) shall only be exercisable at the direction of
Advisory Committee. The Trustee will allocate any insurance proceeds received
from the purchase of insurance contracts under paragraph (a) to Participants'
Accounts in the same manner as the allocation under Section 3.04(A) of the
Employer contribution for the Plan Year in which the death of the insured
Participant occurs.
[B] Exempt Loan. This Section 10.03[B] specifically authorizes the Trustee, at
the direction of the Advisory Committee, to enter into an Exempt Loan
transaction. The following terms and conditions will apply to any Exempt Loan:
(1) The Trustee will use the proceeds of the loan, within a
reasonable time after receipt, only for any or all of the
following purposes: (i) to acquire Employer Securities, (ii) to
repay such loan, or (iii) to repay a prior Exempt Loan. Except as
provided under Article XI, no Employer Securities acquired with
the proceeds of an Exempt Loan may be subject to a put, call or
other option, or buy-sell or similar arrangement while held by
and when distributed from this Plan, whether or not this Plan is
then an employee stock ownership plan.
(2) The interest rate of the Exempt Loan may not be more than a
reasonable rate of interest.
(3) Any collateral the Trustee pledges to the creditor must consist
only of the assets purchased by the borrowed funds and those
assets the Trust used as collateral on the prior Exempt Loan
repaid with the proceeds of the current Exempt Loan.
(4) The creditor may have no recourse against the Trust under the
Exempt Loan except with respect to such collateral given for the
Exempt Loan, contributions (other than contributions of Employer
Securities) that the Employer makes to the Trust to meet its
obligations under the Exempt Loan, and earnings attributable to
such collateral and the investment of such contributions. The
payment made with respect to an Exempt Loan by the Plan during a
Plan Year must not exceed an amount equal to the sum of such
contributions and earnings received during or prior to the year
less such payments in prior years. The Advisory Committee and the
Trustee must account separately for such contributions and
earnings in the books of account of the Plan until the Trust
repays the Exempt Loan.
(5) In the event of default upon the loan, the value of Plan assets
transferred in satisfaction of the Exempt Loan must not exceed
the amount of the default, and if the lender is a Disqualified
Person, the Exempt Loan must provide for transfer of Plan assets
upon default only upon and to the extent of the failure of the
Plan to meet the payment schedule of the Exempt Loan.
(6) The Trustee must add and maintain all assets acquired with the
proceeds of an Exempt Loan in a suspense account. In withdrawing
assets from the suspense account, the Trustee will apply the
provisions of Treas. Reg. Sections 54.4975-7(b)(8) and (15) as if
all securities in the suspense account were encumbered. Upon the
payment of any portion of the loan, the Trustee will effect the
release of assets in the suspense account from encumbrances. For
each Plan Year during the duration of the Exempt Loan, the number
of Employer Securities released must equal the number of
encumbered Employer Securities held immediately before release
for the current Plan Year multiplied by a fraction. The numerator
of the fraction is the amount of principal and interest paid for
the Plan Year. The denominator of the fraction is the sum of the
numerator plus the principal and interest to be paid for all
future Plan Years. The number of future Plan Years under the loan
must be definitely ascertainable and must be determined without
taking into account any possible extension or renewal periods. If
the interest rate under the Exempt Loan is variable, the interest
to be paid in future Plan Years must be computed by using the
interest rate applicable as of the end of the Plan Year. If
collateral includes more than one class of Employer Securities,
the number of Employer Securities of each class to be released
for a Plan Year must be determined by applying the same fraction
to each such class. The Advisory Committee will allocate assets
withdrawn from the suspense account to the Accounts of
Participants who otherwise share in the allocation of the
Employer's contribution for the Plan Year for which the Trustee
has paid the portion of the Exempt Loan resulting in the release
of the assets. The Advisory Committee consistently will make this
allocation as of each Accounting Date on the basis of
non-monetary units, taking into account the relative Compensation
of all such Participants for such Plan Year.
(7) The loan must be for a specific term and may not be payable at
the demand of any person except in the case of default.
(8) Notwithstanding the fact this Plan ceases to be an employee stock
ownership plan, Employer Securities acquired with the proceeds of
an Exempt Loan will continue after the Trustee repays the loan to
be subject to the provisions of Treas. Reg. Sections
54.4975-7(b)(4), (10), (11) and (12) relating to put, call or
other options and to buy-sell or similar arrangements, except to
the extent these regulations are inconsistent with Code Section
409(h).
10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the
Plan must be open to the inspection of the Plan Administrator, Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or Advisory
Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. The Trustee will pay all fees and expenses reasonably incurred
by it in its administration of the Plan from the Trust Fund, unless the Employer
pays the fees and expenses. The Advisory Committee will not treat any fee or
expense paid, directly or indirectly, by the Employer as an Employer
contribution, provided the fee or expense relates to the ordinary and necessary
administration of the Fund. No person who is receiving full pay from the
Employer may receive compensation for services as Trustee.
10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, only
the Employer, the Plan Administrator, the Advisory Committee, and the Trustee
are necessary parties to any court proceeding involving the Trustee or the Trust
Fund. No Participant, or Beneficiary, is entitled to any notice of process
unless required by ERISA. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Participants and Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other persons
to advise the Trustee as in its opinion may be necessary. The Trustee may
delegate to any agent, attorney, accountant or other person selected by it any
non- Trustee power or duty vested in it by the Plan, and the Trustee may act or
refrain from acting on the advice or opinion of any agent, attorney, accountant
or other person so selected.
10.08 DISTRIBUTION OF TRUST FUND. Subject to Section 13.06, the Trustee
will make all distributions of benefits under the Plan in Employer Securities
valued at fair market value at the time of distribution. The Trustee will pay in
cash any fractional security share to which a Participant or his Beneficiary is
entitled. In the event the Trustee is to make a distribution in shares of
Employer Securities, the Trustee may apply any balance in a Participant's
General Investments Account to provide whole shares of Employer Securities for
distribution at the then fair market value.
If the Employer's charter or bylaws restrict ownership of substantially all
shares of Employer Securities to Employees, or to the Trust, as described in
Code Section 409(h)(2), the Trustee will make the distribution of a
Participant's Accrued Benefit entirely in cash.
Notwithstanding the preceding provisions of this Section 10.08, the
Trustee, if directed in writing by the Advisory Committee, will pay, in cash,
any cash dividends on Employer Securities allocated, or allocable to
Participants' Employer Securities Accounts, irrespective of whether a
Participant is fully vested in his Employer Securities Account. The Advisory
Committee's direction must state whether the Trustee is to pay the cash dividend
distributions currently, or within the 90 day period following the close of the
Plan Year in which the Employer pays the dividends to the Trust. The Advisory
Committee may request the Employer to pay dividends on Employer Securities
directly to Participants.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
made from the Trust, the Trustee promptly must notify the Advisory Committee and
then dispose of the payment in accordance with the subsequent direction of the
Advisory Committee, provided such direction is consistent with ERISA.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing with the Trustee is
obligated to see to the proper application of any money paid or property
delivered to the Trustee, or to inquire whether the Trustee has acted pursuant
to any of the terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the Trustee, or by the
Trustee's duly authorized agent, and is not liable to any person in so acting.
The certification of the Trustee that it is acting in accordance with the Plan
will be conclusive in favor of any person relying on the certification. If more
than two persons act as Trustee, a decision of the majority of such persons
controls with respect to any decision regarding the administration or investment
of the Trust Fund or any portion of the Trust Fund with respect to which such
persons act as Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee may resign at any time as Trustee of the
Plan by giving 30 days' written notice in advance to the Employer and to the
Advisory Committee. If the Employer fails to appoint a successor Trustee within
60 days of its receipt of the Trustee's written notice of resignation, the
Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee.
10.12 REMOVAL. The Employer, by giving 30 days' written notice in advance
to the Trustee, may remove any Trustee. In the event of the resignation or
removal of a Trustee, the Employer must appoint a successor Trustee if it
intends to continue the Plan. If two or more persons hold the position of
Trustee, in the event of the removal of one such person, during any period the
selection of a replacement is pending, or during any period such person is
unable to serve for any reason, the remaining person or persons will act as the
Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee succeeds
to the title to the Trust vested in his predecessor by accepting in writing his
appointment as successor Trustee and filing the acceptance with the former
Trustee and the Advisory Committee without the signing or filing of any further
statement. The resigning or removed Trustee, upon receipt of acceptance in
writing of the Trust by the successor Trustee, must execute all documents and do
all acts necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Agreement upon his predecessor. A successor
Trustee is not personally liable for any act or failure to act of any
predecessor Trustee, except as required under ERISA. With the approval of the
Employer and the Advisory Committee, a successor Trustee, with respect to the
Plan, may accept the account rendered and the property delivered to it by a
predecessor Trustee without incurring any liability or responsibility for so
doing.
10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each
Accounting Date to determine the fair market value of each Participant's Accrued
Benefit in the Trust, and the Trustee also must value the Trust Fund on such
other dates, as directed by the Advisory Committee. With respect to activities
carried on by the Plan, an independent appraiser meeting requirements similar to
those prescribed by Treasury Regulations under Code Section 170(a)(1) must
perform all valuations of Employer Securities which are not readily tradable on
an established securities market. The valuation requirement of the immediately
preceding sentence applies to all Employer Securities acquired by the Plan.
10.15 LIMITATION ON LIABILITY. The Trustee is not liable for the acts or
omissions of any Investment Manager or Managers the Advisory Committee may
appoint, nor is the Trustee under any obligation to invest or otherwise manage
any asset of the Plan which is subject to the management of a properly appointed
Investment Manager. The Advisory Committee, the Trustee and any properly
appointed Investment Manager may execute a letter agreement as a part of this
Plan delineating the duties, responsibilities and liabilities of the Investment
Manager with respect to any part of the Trust Fund under the control of the
Investment Manager. The Trustee shall be responsible only for assets and sums
actually received by it as Trustee (including stock certificates received)
hereunder and shall be under no obligation or duty, and shall have no right, to
compute any amount to be paid by it to the Plan or to collect any sums from the
Company or other participating employer. The Trustee shall not be liable for any
action it takes or refrains from taking in accordance with directions of the
Advisory Committee, the Employer, its authorized designee, any appointed
investment manager or any Participant where the Participant has a right to
instruct the Trustee pursuant to the Plan terms. The Trustee shall not be
required to verify the accuracy or validity of such directions.
10.16 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, the Trustee must maintain separate records of
account for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a Participant.
10.17 VOTING AND TENDERING OF EMPLOYER SECURITIES. Notwithstanding any
other provision of this Plan and in conjunction with the applicable provisions
of the Plan, the provisions of this Section 10.17 shall govern the Trustee's
duties with regard to the voting and tendering of Employer Securities held in
the Trust.
(a) Voting.
(1) At any time that the Employer Securities are not readily tradable
on an established securities market, the Trustee shall vote all
shares of Employer Securities held in Trust in the manner
directed by the Advisory Committee, except and unless the issue
presented to the holders of Employer Securities, as determined by
the Advisory Committee, requires that the Plan pass through to
each Participant the right to vote the shares allocated to his
Account. In the latter case, and at any time that the Employer
Securities are readily tradable on an established securities
market, each Participant shall direct the Trustee as to the
manner in which to vote the shares allocated to that
Participant's Account and the Trustee shall vote all shares held
in a suspense account under the Plan in the manner directed by
the Advisory Committee.
(2) Voting instructions from a Participant to the Trustee concerning
an issue required to be passed through to each Participant or at
any time that Employer Securities are readily tradable on an
established securities market, shall be communicated in writing.
In such required voting pass-through situations, the Trustee
shall vote each share of Employer Securities allocated to a
Participant's Account as instructed by the Participant; provided,
however, in the event that the Trustee does not receive voting
instructions from a Participant on how to vote the shares
allocated to such Participant's Account, the Trustee shall vote
or refrain from voting all non- voted allocated Employer
Securities in accordance with directions to be given by the
Advisory Committee.
(3) The Advisory Committee shall notify each Participant with shares
allocated to his or her Account of the pass-through voting rights
and issues to be decided by a vote of the holders of Employer
Securities, and utilize its best efforts to distribute or cause
to be distributed to such Participants such information as is
distributed to holders of Employer Securities in connection with
such voting issues, and shall provide each Participant with
information regarding the Plan requirements with respect to the
voting of Employer Securities allocated to Accounts of
Participants for whom it does not receive voting instructions.
(b) Tender or Exchange Offers. The Trustee shall tender or exchange all
shares of Employer Securities held in the Trust Fund in the manner directed
by the Advisory Committee, and the Trustee shall likewise tender or
exchange all shares held in a suspense account under the Plan in the manner
directed by the Committee.
(c) Non-disclosure of Instructions. Any instruction or other communication
by a Participant to the Trustee concerning any vote or tender or exchange
offer with respect to Employer Securities shall be held in confidence by
the Trustee and, except as required by law, shall not be divulged to the
Company or to any officer or employee thereof or to any other person.
(d) Named Fiduciary Status. Solely to the extent necessary to implement the
provisions of this Section 10.17(b)(3), each Participant shall be treated
as though a "named fiduciary" of the Plan with respect to the voting of,
and any decision to tender or exchange, Employer Securities allocated to
such participant's Account.
ARTICLE XI
REPURCHASE OF EMPLOYER SECURITIES
11.01 PUT OPTION. In the event Employer Securities distributed to a
Participant from the Trust are not readily tradable on an established market,
the Employer will issue a "put option" to each Participant receiving a
distribution of such Employer Securities. The put option will permit the
Participant to sell the Employer Securities to the Employer, at any time during
two option periods, at the current fair market value. The first put option
period runs for a period of at least 60 days commencing on the date of
distribution of Employer Securities to the Participant. The second put option
period runs for a period of at least 60 days commencing after the new
determination of the fair market value of Employer Securities by the Advisory
Committee and notice to the Participant of the new fair market value. If a
Participant (Beneficiary) exercises his put option, the Employer must purchase
the Employer Securities at fair market value upon the terms provided under
Section 11.04. The Employer may grant the Trust an option to assume the
Employer's rights and obligations at the time a Participant exercises an option
under this Section 11.01.
11.02 RESTRICTION ON EMPLOYER SECURITIES. Except upon the prior written
consent of the Employer, no Participant (or Beneficiary) may sell, assign, give,
pledge, encumber, transfer or otherwise dispose of any Employer Securities now
owned or subsequently acquired by him without complying with the terms of this
Article XI. If a Participant (or Beneficiary) pledges or encumbers any Employer
Securities without the required prior written consent, any security holder's
rights with respect to such Employer Securities are subordinate and subject to
the rights of the Employer.
11.03 LIFETIME TRANSFER/RIGHT OF FIRST REFUSAL. If any Participant (or
Beneficiary) who receives Employer Securities under this Plan desires to dispose
of any of his Employer Securities for any reason during his lifetime (whether by
sale, assignment, gift or any other method of transfer), he first must offer the
Employer Securities for sale to the Employer. The Advisory Committee may require
a Participant (or Beneficiary) entitled to a distribution of Employer Securities
to execute an appropriate stock transfer agreement (evidencing the right of
first refusal) prior to receiving a certificate for Employer Securities.
In the case of an offer by a third party, the offer to the Employer is
subject to all the terms and conditions set forth in Section 11.04, based on the
price equal to the fair market value per share and payable in accordance with
the terms of Section 11.04, unless the selling price and terms offered to the
Participant by the third party are more favorable to the Participant than the
selling price and terms of Section 11.04, in which event, the selling price and
terms of the offer of the third party apply. The Employer must give written
notice to the offering Participant of its acceptance of the Participant's offer
within 14 days after the Participant has given written notice to the Employer or
the Employer's rights under this Section 11.03 will lapse. The Employer may
grant the Trust the option to assume the Employer's rights and obligations with
respect to all or any part of the Employer Securities offered to the Employer
under this Section 11.03. The Trust is not under any obligation to purchase at
any time Employer Securities from any holder of Employer Securities upon the
happening of any event.
11.04 PAYMENT OF PURCHASE PRICE. If the Employer (or the Trustee, at the
direction of the Advisory Committee) exercises an option to purchase a
Participant's Employer Securities pursuant to an offer given under Section
11.03, the purchaser(s) must make payment in lump sum or, if the distribution to
the Participant (or to his Beneficiary) constitutes a Total Distribution, in
substantially equal installments over a period not exceeding five years, subject
to the Participant's election for a longer payment period than five years. A
"Total Distribution" to a Participant (or to a Beneficiary) is the distribution,
within one taxable year of the recipient, of the entire balance to the
Participant's credit under the Plan. In the case of a distribution which is not
a Total Distribution or which is a Total Distribution with respect to which the
purchaser(s) will make payment in lump sum, the purchaser(s) must pay the
Participant (or Beneficiary) the fair market value of the Employer Securities
repurchased no later than 30 days after the date the Participant (or
Beneficiary) exercises the put option. In the case of a Total Distribution with
respect to which the purchaser(s) will make installment payments, the
purchaser(s) must make the first installment payment no later than 30 days after
the Participant (or Beneficiary) exercises the put option. For installment
amounts not paid within 30 days of the exercise of the put option, the
purchaser(s) must evidence the balance of the purchase price by executing a
promissory note, delivered to the selling Participant at the Closing. The note
delivered at Closing must bear a reasonable rate of interest, determined as of
the Closing Date, and the purchaser(s) must provide adequate security. The note
must provide for equal annual installments with interest payable with each
installment, the first installment being due and payable one year after the
Closing Date. The note further must provide for acceleration in the event of 30
days' default of the payment on interest or principal and must grant to the
maker of the note the right to prepay the note in whole or in part at any time
or times without penalty; provided however, the purchaser(s) may not have the
right to make any prepayment during the calendar year or fiscal year of the
Participant (Beneficiary) in which the Closing Date occurs.
11.05 NOTICE. A person has given Notice permitted or required under this
Article XI when the person deposits the Notice in the United States mail, first
class, postage prepaid, addressed to the person entitled to the Notice at the
address currently listed for him in the records of the Advisory Committee. Any
person affected by this Article XI has the obligation of notifying the Advisory
Committee of any change of address.
11.06 TERMS AND DEFINITIONS. For purposes of this Article XI:
(a) "Fair market value" means the value of the Employer Securities (i)
determined as of the date of the exercise of an option if the exercise is
by a Disqualified Person, or (ii) in all other cases, determined as of the
most recent Accounting Date. The Advisory Committee must determine fair
market value of Employer Securities for all purposes of the Plan by
engaging the services of an independent appraiser. See Section 10.14.
(b) "Notice" means any offer, acceptance of an offer, payment or any other
communication.
(c) "Beneficiary" includes the legal representative of a deceased
Participant.
(d) "Closing" means the place, date and time ("Closing Date") to which the
selling Participant (or his Beneficiary) and purchaser may agree for
purposes of a sale and purchase under this Article XI, provided Closing
must take place not later than 30 days after the exercise of an offer under
Section 11.01.
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Advisory Committee has any obligation or responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contribution, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or to
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be responsible for
any action or failure to act on the part of the others, or on the part of any
other person who has any responsibility regarding the management, administration
or operation of the Plan, whether by the express terms of the Plan or by a
separate agreement authorized by the Plan or by the applicable provisions of
ERISA. Any action required of a corporate Employer must be by its Board of
Directors or its designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the
Plan Administrator and the Employer in no way guarantee the Trust Fund from loss
or depreciation. The Employer does not guarantee the payment of any money which
may be or becomes due to any person from the Trust Fund. The liability of the
Advisory Committee and the Trustee to make any payment from the Trust Fund at
any time and all times is limited to the then available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice under the Plan may
waive the notice, unless the Code or Treasury Regulations prescribe the notice
or ERISA specifically or impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons entitled to benefits
under the Plan, their respective heirs and legal representatives, upon the
Employer, its successors and assigns, and upon the Trustee, the Advisory
Committee, the Plan Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
includes the singular and the singular includes the plural.
12.07 STATE LAW. [Colorado] law will determine all questions
arising with respect to the provisions of this Agreement except
to the extent superseded by Federal law.
12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer
has no beneficial interest in any asset of the Trust and no part of any asset in
the Trust ever may revert to or be repaid to an Employer, either directly or
indirectly; nor, prior to the satisfaction of all liabilities with respect to
the Participants and their Beneficiaries under the Plan, may any part of the
corpus or income of the Trust Fund, or any asset of the Trust, be (at any time)
used for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries.
[Notwithstanding the first paragraph of this Section 13.01, if the
Commissioner of Internal Revenue, upon the Employer's request for initial
approval of this Plan, determines that the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only then) the
Trustee, upon written notice from the Employer, will return the Employer's
contributions (and increment attributable to the contributions) to the Employer.
The Trustee must make the return of the Employer contribution under this Section
13.01 within one year of a final disposition of the Employer's request for
initial approval of the Plan. The Employer's Plan and Trust will terminate upon
the Trustee's return of the Employer's contributions.]
13.02 AMENDMENT BY EMPLOYER. The Employer has the right at
any time and from time to time:
(a) To amend this Agreement in any manner it deems necessary or advisable
in order to qualify (or maintain qualification of) this Plan and the Trust
created under it under the appropriate provisions of Code Section 401(a);
and
(b) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and administration expenses) to be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates. No amendment may cause or permit any portion
of the Trust Fund to revert to or become a property of the Employer. The
Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the Advisory
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Advisory Committee. The Employer
must make all amendments in writing. Each amendment must state the date to which
it is either retroactively or prospectively effective.
(A) Code Section 411(d)(6) protected benefits. An amendment (including the
adoption of this Plan as a restatement of an existing plan) may not decrease a
Participant's Accrued Benefit, except to the extent permitted under Code Section
412(c)(8), and may not reduce or eliminate Code Section 411(d)(6) protected
benefits determined immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or eliminates Code
Section 411(d)(6) protected benefits if the amendment has the effect of either
(1) eliminating or reducing an early retirement benefit or a retirement-type
subsidy (as defined in Treasury Regulations), or (2) except as provided by
Treasury Regulations, eliminating an optional form of benefit. The Advisory
Committee must disregard an amendment to the extent application of the amendment
would fail to satisfy this paragraph. If the Advisory Committee must disregard
an amendment because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early retirement option or
other optional forms of benefit the Plan must continue for the affected
Participants.
13.03 DISCONTINUANCE. The Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan, and to terminate, at any time,
this Plan and the Trust created under this Agreement. The Plan will terminate
upon the first to occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the successor makes
provision to continue the Plan, in which event the successor must
substitute itself as the Employer under this Plan. Any termination of the
Plan resulting from this paragraph (b) is not effective until compliance
with any applicable notice requirements under ERISA.
13.04 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the Plan, an affected Participant's right to his Accrued
Benefit is 100% Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
13.05 MERGER/DIRECT TRANSFER. The Trustee may not consent to, or be a party
to, any merger or consolidation with another plan, or to a transfer of assets or
liabilities to another plan, unless immediately after the merger, consolidation
or transfer, the surviving Plan provides each Participant a benefit equal to or
greater than the benefit each Participant would have received had the Plan
terminated immediately before the merger or consolidation or transfer. The
Trustee possesses the specific authority to enter into merger agreements or
direct transfer of assets agreements with the trustees of other retirement plans
described in Code Section 401(a), including an elective transfer, and to accept
the direct transfer of plan assets, or to transfer plan assets, as a party to
any such agreement.
The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions. If the Trustee accepts a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a Participant for all
purposes of the Plan except the Employee is not a Participant for purposes of
sharing in Employer contributions or Participant forfeitures under the Plan
until he actually becomes a Participant in the Plan.
(A) Elective transfers. The Trustee may not consent to, or be a party to a
merger, consolidation or transfer of assets with a defined benefit plan, except
with respect to an elective transfer, or unless the transferred benefits are in
the form of paid-up individual annuity contracts guaranteeing the payment of the
transferred benefits in accordance with the terms of the transferor plan and in
a manner consistent with the Code and with ERISA. The Trustee will hold,
administer and distribute the transferred assets as a part of the Trust Fund and
the Trustee must maintain a separate Employer contribution Account for the
benefit of the Employee on whose behalf the Trustee accepted the transfer in
order to reflect the value of the transferred assets. Unless a transfer of
assets to this Plan is an elective transfer, the Plan will preserve all Code
Section 411(d)(6) protected benefits with respect to those transferred assets,
in the manner described in Section 13.02. A transfer is an elective transfer if:
(1) the transfer satisfies the first paragraph of this Section 13.05; (2) the
transfer is voluntary, under a fully informed election by the Participant; (3)
the Participant has an alternative that retains his Code Section 411(d)(6)
protected benefits (including an option to leave his benefit in the transferor
plan, if that plan is not terminating); (4) the transfer satisfies the
applicable spousal consent requirements of the Code; (5) the transferor plan
satisfies the joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those requirements; (6) the
Participant has a right to immediate distribution from the transferor plan, in
lieu of the elective transfer; (7) the transferred benefit is at least the
greater of the single sum distribution provided by the transferor plan for which
the Participant is eligible or the present value of the Participant's accrued
benefit under the transferor plan payable at that plan's normal retirement age;
(8) the Participant has a 100% Nonforfeitable interest in the transferred
benefit; and (9) the transfer otherwise satisfies applicable Treasury
Regulations. An elective transfer may occur between qualified plans of any type.
(B) Distribution restrictions under Code Section 401(k). If the Plan receives a
direct transfer (by merger or otherwise) of elective contributions (or amounts
treated as elective contributions) under a Plan with a Code Section 401(k)
arrangement, the distribution restrictions of Code Sections 401(k)(2) and (10)
continue to apply to those transferred elective contributions.
13.06 TERMINATION. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following exceptions:
(1) if the present value of the Participant's Nonforfeitable Accrued
Benefit does not exceed $5,000, the Advisory Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit to him in lump sum as soon as administratively
practicable after the Plan terminates; and
(2) if the present value of the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000, the Participant or the Beneficiary, in
addition to the distribution events permitted under Article VI,
may elect to have the Trustee commence distribution of his
Nonforfeitable Accrued Benefit as soon as administratively
practicable after the Plan terminates.
To liquidate the Trust, the Advisory Committee will purchase a deferred
annuity contract for each Participant which protects the Participant's
distribution rights under the Plan, if the Participant's Nonforfeitable Accrued
Benefit exceeds $5,000 and the Participant does not elect an immediate
distribution pursuant to paragraph (2).
If this paragraph applies, in lieu of the preceding provisions of this
Section 13.06 and the distribution provisions of Article VI, the Advisory
Committee will direct the Trustee to distribute each Participant's
Nonforfeitable Accrued Benefit, in lump sum, as soon as administratively
practicable after the termination of the Plan, irrespective of the present value
of the Participant's Nonforfeitable Accrued Benefit and whether the Participant
consents to that distribution. This paragraph applies only if: (1) the Plan does
not provide an annuity option; (2) the Plan is a defined contribution plan at
the time of its termination date; and (3) as of the period between the Plan
termination date and the final distribution of assets, the Employer does not
maintain any other defined contribution plan (other than an ESOP).
The Trust will continue until the Trustee, in accordance with the direction
of the Advisory Committee, has distributed all of the benefits under the Plan.
On each valuation date, the Advisory Committee will credit any part of a
Participant's Accrued Benefit retained in the Trust with its proportionate share
of the Trust's income, expenses, gains and losses, both realized and unrealized.
Upon termination of the Plan, the amount, if any, in a suspense account under
Article III will revert to the Employer, subject to the conditions of the
Treasury Regulations permitting such a reversion. A resolution or amendment to
freeze all future benefit accrual but otherwise to continue maintenance of this
Plan, is not a termination for purposes of this Section 13.06.
IN WITNESS WHEREOF, the Employer and Trustee have executed this Plan and
Trust as of the 21st day of April, 1999.
MILLERS AMERICAN GROUP, INC.
By: /S/ DAVID N. THOMPSON
-----------------------------------------
Title: President and Chief Executive Officer
TRUSTEE
EMJAY CORPORATION
By: /S/ JEFFREY GANNEN
-----------------------------------------
Title: Vice President