EXHIBIT 10.13
AGREE REALTY CORPORATION PROFIT-SHARING PLAN
Effective April 22, 1994
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS
1.1 Account.............................................. I-1
1.2 Administrator........................................ I-1
1.3 Affiliate............................................ I-1
1.4 Appropriate Form..................................... I-2
1.5 Beneficiary.......................................... I-2
1.6 Board of Directors................................... I-2
1.7 Break in Service..................................... I-2
1.8 Company.............................................. I-3
1.9 Compensation......................................... I-3
1.10 Date of Hire......................................... I-4
1.11 Disability........................................... I-4
1.12 Eligible Employee.................................... I-4
1.13 Employee............................................. I-4
1.14 Employer............................................. I-4
1.15 Entry Date........................................... I-5
1.16 Fund................................................. I-5
1.17 Hour of Service...................................... I-5
1.18 Investment Adjustments............................... I-5
1.19 Investment Fund...................................... I-5
1.20 Member............................................... I-5
1.21 Normal Retirement Date............................... I-5
1.22 Plan................................................. I-5
1.23 Plan Year............................................ I-6
1.24 Reemployment Date.................................... I-6
1.25 Service.............................................. I-6
1.26 Severance Date....................................... I-6
1.27 Severance Period..................................... I-7
1.28 Spouse............................................... I-7
1.29 Spousal Consent...................................... I-7
1.30 Termination of Employment............................ I-8
1.31 Trust Agreement...................................... I-8
1.32 Trustee.............................................. I-8
1.33 Valuation Date....................................... I-8
1.34 Vested Percentage.................................... I-9
1.35 Year of Service...................................... I-9
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ARTICLE II MEMBERSHIP
2.1 In General........................................... II-1
2.2 Transfers............................................ II-2
2.3 Reemployment......................................... II-3
ARTICLE III CONTRIBUTIONS
3.1 Source of Contributions.............................. III-1
3.2 Amount of Contributions.............................. III-1
3.3 Contributions Conditional............................ III-1
3.4 Maximum Limitation................................... III-1
3.5 Application.......................................... III-3
3.6 Limitation Year...................................... III-5
ARTICLE IV ACCOUNTS
4.1 Account.............................................. IV-1
4.2 Eligibility to Share in
Contributions and Forfeitures...................... IV-1
4.3 Allocation of Contributions and
Forfeitures........................................ IV-1
4.4 Investment of Account Balances....................... IV-1
4.5 Designation of Investment Funds
for Future Contributions........................... IV-2
4.6 Designation of Investment Funds
for Existing Account Balances...................... IV-2
4.7 Valuation of Investment Funds........................ IV-3
4.8 Correction of Error.................................. IV-3
4.9 Allocation Shall Not Vest Title...................... IV-4
4.10 Statement of Accounts................................ IV-4
ARTICLE V VESTING AND DISTRIBUTION OF BENEFITS
5.1 Vesting.............................................. V-1
5.2 Distribution on Termination of
Employment......................................... V-2
5.3 Payment of Benefits in General....................... V-2
5.4 Forfeitures.......................................... V-3
5.5 Payment of Death Benefits............................ V-4
5.6 Distribution at Age 70-1/2........................... V-7
5.7 Delay of Payment..................................... V-7
5.8 Qualified Domestic Relations Orders.................. V-8
5.9 Direct Rollover of Eligible
Rollover Distributions............................. V-10
ARTICLE VI ADMINISTRATION OF THE PLAN
6.1 Fiduciary............................................ VI-1
6.2 The Administrator.................................... VI-1
6.3 Advisers............................................. VI-3
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6.4 Service in Multiple Capacities....................... VI-3
6.5 Limitation of Liability; Indemnity................... VI-3
6.6 Reliance on Information.............................. VI-4
6.7 Funding Policy....................................... VI-5
6.8 Proper Proof......................................... VI-5
6.9 Genuineness of Documents............................. VI-5
ARTICLE VII THE TRUST AGREEMENT
7.1 The Trust Agreement.................................. VII-1
7.2 Rights of the Company................................ VII-1
7.3 Duties and Responsibilities of
the Trustee........................................ VII-2
7.4 Company as Agent..................................... VII-2
ARTICLE VIII AMENDMENT
8.1 Right of the Company to Amend
the Plan........................................... VIII-1
8.2 Plan Merger.......................................... VIII-1
8.3 Amendments Required by Law........................... VIII-1
ARTICLE IX DISCONTINUANCE OF CONTRIBUTIONS
AND TERMINATION OF THE PLAN
9.1 Right to Terminate the Plan or
Discontinue Contributions.......................... IX-1
9.2 Manner of Termination................................ IX-1
9.3 Effect of Termination................................ IX-1
9.4 Distribution of the Fund............................. IX-2
9.5 Expenses of Termination.............................. IX-2
ARTICLE X MISCELLANEOUS PROVISIONS
10.1 Plan Not a Contract of
Employment......................................... X-1
10.2 Source of Benefits................................... X-1
10.3 Spendthrift Clause................................... X-1
10.4 Merger............................................... X-2
10.5 Claims Procedure..................................... X-2
10.6 Inability to Locate Distributee...................... X-2
10.7 Payment to a Minor or
Incompetent........................................ X-3
10.8 Doubt as to Right to Payment......................... X-4
10.9 Estoppel of Members and
Beneficiaries...................................... X-4
10.10 Separability......................................... X-5
10.11 Captions............................................. X-5
10.12 Usage................................................ X-6
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ARTICLE XI LEASED EMPLOYEES
11.1 Definitions.......................................... XI-1
11.2 Treatment of Leased Employees........................ XI-1
11.3 Exception for Employees Covered
by Plans of Leasing Organization................... XI-2
11.4 Construction......................................... XI-2
ARTICLE XII "TOP-HEAVY" PROVISIONS
12.1 Determination of "Top-Heavy"
Status............................................. XII-1
12.2 Provisions Applicable in
"Top-Heavy" Years.................................. XII-5
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AGREE REALTY CORPORATION PROFIT-SHARING PLAN
ARTICLE I
Definitions
1.1 Account. An Account maintained for a Member pursuant
to Section 4.1.
1.2 Administrator. The Administrator appointed by the
Board of Directors to administer the Plan pursuant to Article VIII.
1.3 Affiliate.
1.3.1 Controlled Group Affiliate. Any corporation or
other trade or business (other than an Employer) which, at the time
of reference, controls, is controlled by or under common control with
an Employer within the meaning of section 414(b) or 414(c) of the
Code, including any division of an Employer not participating in the
Plan; provided, however, that for purposes of Sections 3.4 and 3.5,
the provisions of section 415(h) of the Code shall also apply.
1.3.2 Affiliated Service Groups, etc. Any (a) member
of an affiliated service group, within the meaning of section 414(m)
of the Code, that includes an Employer, or (b) organization
aggregated with an Employer pursuant to section 414(o) of the Code,
to the extent and for the purposes required by such sections and the
regulations thereunder (e.g., for purposes of Articles XI and XII).
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1.4 Appropriate Form. The form or other means of
communication prescribed by the Administrator for a particular purpose
specified in the Plan.
1.5 Beneficiary. A person or persons entitled pursuant
to the Plan to receive any benefits payable upon or after the death of a
Member.
1.6 Board of Directors. The Board of Directors of the
Company.
1.7 Break in Service. A Severance Period of not less than
twelve (12) consecutive months. The first 12-consec-utive-month period after
a Severance Date in the case of an absence from work for maternity or
paternity reasons shall not be included in a Break in Service. For purposes
of this Section 1.8, an absence from work for maternity or paternity reasons
means an absence (a) by reason of the pregnancy of the individual, (b) by
reason of the birth of a child of the individual, (c) by reason of the
placement of a child with the individual in connection with the adoption of
such child by such individual, or (d) for purposes of caring for such child
for a period beginning immediately following such birth or placement.
1.8 Company. Agree Realty Corporation, a Maryland
corporation.
1.9 Compensation. Gross annual cash compensation paid by
an Employer in any Year to an Eligible Employee while he is a Member of the
Plan. Compensation shall be determined before giving effect to any salary
reduction agreement pursuant to any cash or deferred arrangement described in
section 401(k) of the Code or any cafeteria
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plan within the meaning of section 125 of the Code. Compensation shall not
include any expense reimbursements or allowances. Compensation taken into
account under the Plan for any Plan Year shall not exceed $150,000 as
adjusted from time to time in accordance with section 401(a)(17) of the Code.
In determining the Compensation of a Member for purposes of this limitation,
the family aggregation rules of section 414(q)(6) of the Code shall apply,
except that in applying such rules, the term "family" shall include only the
spouse of the Member and any lineal descendants of the Member who have not
attained age 19 before the close of the year. If, as a result of the
application of such rules, the limitation is exceeded, then (except as may be
otherwise required under applicable regulations), the limitation shall be
prorated among the affected individuals on the basis of each such
individual's Compensation determined under this Section 1.9 prior to the
application of the limitation.
1.10 Date of Hire. The date on which an Employee first
completes an Hour of Service.
1.11 Disability. A physical or mental condition which
would, upon proper application, entitle the Member to disability benefits
under the Social Security Act.
1.12 Eligible Employee. Any person employed by the Company
or by any other Employer, subject to such terms and conditions as may apply
to such other Employer pursuant to Section 1.12; but excluding in each case
any employee who is employed primarily to render services within the
jurisdiction of a union and whose compensation, hours of work, or
conditions of employment are determined by collective bargaining with such
union, unless the applicable collective bargaining agreement expressly
provides that
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such employee shall be eligible to participate in this Plan, in which event,
however, he shall be entitled to participate in this Plan only to the extent
and on the terms and conditions specified in such collective bargaining
agreement.
1.13 Employee. An individual who is an employee of an
Employer or Affiliate.
1.14 Employer. The Company and any subsidiary or affiliate
of the Company which has adopted the Plan with the approval of the Company,
subject to such terms and conditions as may be imposed by the Company upon
the participation in the Plan of such adopting Employer.
1.15 Entry Date. April 22, 1994 and each subsequent
January 1 and July 1.
1.16 Fund. The Fund created by the Trust Agreement
pursuant to Section 9.1.
1.17 Hour of Service. An hour for which an Employee is
paid or entitled to payment for the performance of services for an Employer or
Affiliate.
1.18 Investment Adjustments. The net realized and
unrealized gains, losses, income and expenses attributable to a Member's
Account as a result of its investment in one or more Investment Funds.
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1.19 Investment Fund. A portion of the Fund which is
separately invested as provided in Section 4.4.
1.20 Member. Every individual who shall have become a
Member pursuant to Article II hereof and who has an Account under the Plan
holding an undistributed balance.
1.21 Normal Retirement Date. The 65th anniversary of a
Member's date of birth.
1.22 Plan. The Agree Realty Corporation Profit-Sharing
Plan, as from time to time in effect.
1.23 Plan Year. The 12-month period beginning each
January 1.
1.24 Reemployment Date. The date on which an Employee
first completes an Hour of Service after a Severance Date.
1.25 Service. The aggregate of the following:
1.25.1 Each period from an Employee's Date of Hire
(or Reemployment Date) to the Employee's next Severance Date; and
1.25.2 If an Employee has a Reemployment Date within
twelve (12) months of a Severance Date, the period from such Severance Date
to such Reemployment Date; and
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1.25.3 In the case of an Employee who leaves
employment to enter service with the armed forces of the United States, the
period of such military service, provided that the Employee resumes
employment with the Employer or Affiliate within the period during which
reemployment rights are protected by applicable law.
1.26 Severance Date. The earliest of:
1.26.1 The date on which an Employee quits, retires,
is discharged or dies;
1.26.2 The first anniversary of the first date of a
period in which an Employee remains absent from service with an Employer or
Affiliate (with or without pay) for any reason (such as vacation, holiday,
sickness, disability or layoff) other than resignation, retirement,
discharge, death or approved leave of absence; or
1.26.3 The date on which an approved leave of
absence without pay began if the Employee fails to return to active
employment upon the expiration of such leave.
1.27 Severance Period. Each period from a Severance Date
to the next Reemployment Date.
1.28 Spouse. The individual to whom a Member is legally
married.
1.29 Spousal Consent. Written consent by a Member's Spouse
to an election, beneficiary designation or similar action by the Member. A
Spousal Consent shall be ineffective unless it acknowledges the effect of
such election, beneficiary designation or
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action and is witnessed by a notary public and, with respect to Spousal
Consent pertaining to a beneficiary designation, unless such designation
specifically identifies the Member's beneficiaries (and alternate
beneficiaries, if any) by name or class. If the Administrator is satisfied
that such Spousal Consent cannot be obtained because there is no Spouse,
because the Spouse cannot be located, because the Member can show by court
order that the Spouse has abandoned the Member, or because of other
circumstances which may be permitted under applicable law, Spousal Consent
shall be deemed to have been given. Any consent or deemed consent with
respect to a Spouse which satisfies the foregoing requirements shall be
effective only with respect to the Spouse by whom given (or deemed to be
given), and may not be revoked by such Spouse with respect to the election,
beneficiary designation or other action to which such consent pertains.
1.30 Termination of Employment. A Member's employment
shall be treated as terminated when he incurs a Severance Date.
1.31 Trust Agreement. The agreement by and between the
Company and the Trustee under which this Plan is funded, as from time to time
amended.
1.32 Trustee. The trustee or trustees from time to time
designated under the Trust Agreement.
1.33 Valuation Date. The last day of each calendar
quarter, and any other date as of which the Administrator determines in his
sole discretion that a valuation and adjustment of Accounts is necessary or
desirable; provided, that if any portion of an Account is invested in shares
of a mutual fund for which the mutual fund sponsor determines a daily
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value, the Valuation Date for such portion in the event of a distribution
shall be the date as of which the mutual fund sponsor values the shares to be
surrendered in respect of such distribution, the Valuation Date in the event
of a forfeiture shall be the date as of which the forfeiture occurs, and the
Valuation Date for purposes of allocating the Investment Adjustment pursuant
to Section 4.7 shall be each day for which the mutual fund sponsor determines
a value for such shares.
1.34 Vested Percentage. The percentage of a Member's
Account which is nonforfeitable.
1.35 Year of Service. Three hundred sixty-five (365) days
of Service.
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ARTICLE II
Membership
2.1 In General. An Eligible Employee who has not
previously become a Member shall become a Member on the first Entry Date
coincident with or next following the later of his reaching age 21 or his
completing one Year of Service, provided he is then an Eligible Employee.
2.2 Transfers.
2.2.1 Transfer to Eligible Employment. An Employee
who transfers to employment as an Eligible Employee from employment
as other than an Eligible Employee shall become a Member on the later
of the date of such transfer or the first Entry Date on which he
satisfies the requirements of Section 2.1.
2.2.2 Transfer to Affiliate or Ineligible
Employment. If a Member transfers to employment as other than an
Eligible Employee with an Affiliate or Employer, he shall not be
deemed to have thereby terminated employment. Subject to Section 4.2,
such a Member shall be eligible to share in the contribution and
forfeitures under the Plan for the Plan Year of such transfer, but he
shall not be eligible to share in contributions or forfeitures for
subsequent Plan Years unless and until he returns to employment as an
Eligible Employee.
2.2.3 Eligibility to Share in Contributions and
Forfeitures. Notwithstanding any other provision of this Plan, a
Member shall be eligible to share in contributions and forfeitures
under the Plan only with respect to Compensation paid
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by an Employer for service as an Eligible Employee (as distinguished
from service for any Affiliate or for an Employer in a position other
than as an Eligible Employee).
2.3 Reemployment. If a Member whose Vested Percentage is
zero terminates employment and is subsequently rehired as an Eligible
Employee after a Break in Service of five or more years, he shall upon rehire
be treated as a new Employee for all purposes of this Plan. In all other
cases, a Member who terminates employment and is subsequently rehired as an
Eligible Employee shall resume membership in this Plan immediately upon
rehire.
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ARTICLE III
Contributions
3.1 Source of Contributions. All contributions to the
Fund shall be made by the Employers. There shall be no contributions by
Members. The Company may, in its discretion, make the contribution to the
Fund required of any other Employer hereunder, as agent for such Employer.
3.2 Amount of Contributions. For each Plan Year that the
Plan is in effect, each Employer shall contribute to the Fund such amount (if
any) as the board of directors of such Employer shall determine in its sole
discretion, subject to the limitations set forth in sections 404 and 415 of
the Code. Such amounts shall be transferred by each Employer to the Trustee
in cash no later than the due date (including extensions) for filing the
Employer's federal income tax return for such Year.
3.3 Contributions Conditional. Notwithstanding any other
provisions of the Plan or the Trust Agreement, all contributions under the
Plan are conditioned on the deductibility of such contributions under section
404(a) of the Code for the taxable year for which contributed, and on initial
qualification of the Plan under section 401(a) of the Code.
3.4 Maximum Limitation.
3.4.1 Annual Addition. For purposes of this
Section 3.4, "Annual Addition" means the sum for any Plan Year of (a)
employer contributions and forfeitures allocable to a Member under
all plans (or portions thereof) subject to
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section 415(c) of the Code maintained by an Employer or an Affiliate,
(b) the Member's employee contributions under all such plans (or
portions thereof), and (c) amounts described in section 419A(d)(2) of
the Code (relating to post-retirement medical benefits of key
employees) or allocated to a pension plan individual medical account
described in section 415(1) of the Code to the extent includible for
purposes of section 415(c)(2) of the Code. The employee contributions
described in clause (b) shall be determined without regard to (i) any
rollover contributions, (ii) any repayments of loans, or (iii) any
prior distributions repaid upon the exercise of buyback rights.
Employer and employee contributions taken into account as Annual
Additions shall include "excess contributions" as defined in section
401(k)(8)(B) of the Code, "excess aggregate contributions" as defined
in section 401(m)(6)(B) of the Code, and "excess deferrals" as
described in section 402(g) of the Code (to the extent such "excess
deferrals" are not distributed to the Member before the end of his
taxable year in which they were made), regardless of whether such
amounts are distributed or forfeited.
3.4.2 Earnings. "Earnings" for any Plan Year means
compensation (as defined in Section 415(c)(3) of the Code) actually
paid or made available by all Employers and Affiliates, but
determined after giving effect to any salary reduction agreement
under any cash or deferred arrangement within the meaning of section
401(k) of the Code or to any similar reduction agreement pursuant to
any cafeteria plan within the meaning of section 125 of the Code.
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3.4.3 Limitation on Annual Additions. The aggregate
Annual Addition in respect of any Member, to this Plan and all other
defined contribution plans maintained by all Employers and Affiliates
for any Plan Year, shall not exceed the lesser of (a) $30,000 (or, if
greater, 25 percent of the amount in effect under section
415(b)(1)(A) of the Code pursuant to applicable regulations), or (b)
25 percent of the Member's Earnings for such Year.
3.4.4 Coverage by Defined Benefit Plan. If a Member
has at any time been covered by a defined benefit plan maintained by
an Employer or an Affiliate, the limitations set forth in this
Section 3.4 shall be further reduced if and to the extent necessary
to comply with section 415(e) of the Code.
3.5 Application. If the allocations to a Member's Account
otherwise required under this Plan for any Plan Year would cause the
limitations set forth in Section 3.4 to be exceeded for that Plan Year,
contributions otherwise required with respect to such Member under this
Article III shall be reduced to the extent necessary to comply with those
limitations. If such reduction is not effected in time to prevent such
allocations for any Limitation Year (as defined in Section 3.6) from
exceeding such limitations, such excess shall be used to reduce contributions
for such Member in the next Limitation Year and each succeeding Limitation
Year if necessary; provided, that if the Member is not covered by the Plan at
the end of the current Limitation Year, the portion exceeding the limitations
set forth in Section 3.4 shall be held unallocated in a suspense account for
such Limitation Year and shall be allocated and reallocated to the Accounts
of all Members in the next Limitation Year before any other Annual Additions
are allocated to the Accounts of such Members. The
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suspense account will reduce future contributions for all remaining Members
in the next Limitation Year, and each succeeding Limitation Year if
necessary. If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section 3.5, it will participate in the
allocation of the Fund's investment gains and losses. In the event of a
termination of the Plan, unallocated amounts held in such suspense account
shall be allocated to the extent possible under this Article III for the
Limitation Year of termination. Any amount remaining in such suspense account
upon termination of the Plan shall then be returned to the Employer,
notwithstanding any other provision of the Plan or Trust Agreement.
Reductions in benefits under this Article III arising by reason of a Member's
participation in multiple plans shall be effected as follows: (a) benefits
and Annual Additions under continuing plans shall be reduced before benefits
under any terminated plan, and (b) benefits and Annual Additions under
continuing plans shall be reduced in the reverse order in which benefits or
Annual Additions would otherwise accrue, except as any such plan may
otherwise expressly provide.
3.6 Limitation Year. All determinations under Sections
3.4 and 3.5 shall be made by reference to the Plan Year.
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ARTICLE IV
Accounts
4.1 Account. The Administrator shall maintain an Account
for each Member, to which shall be credited contributions and forfeitures
allocated to the Member pursuant to Section 4.3.
4.2 Eligibility to Share in Contributions and
Forfeitures. Notwithstanding any other provision of this Plan, a Member shall
be eligible to share in contributions or forfeitures for a Plan Year (a
"Participating Member") only if he is an employee of an Employer or a
Controlled Group Affiliate as of the last day of such Year, or ceased to be
so employed during such Plan Year by reason of death or Disability or on or
after attainment of his Normal Retirement Date.
4.3 Allocation of Contributions and Forfeitures. As of
the last day of each Plan Year, the contribution and forfeitures for that
Plan Year shall be allocated to the Accounts of Participating Members. Such
contribution and forfeitures shall be allocated to the Account of each
Participating Member in the same ratio that the Compensation of the
Participating Member bears to the total Compensation of all Participating
Members for such Plan Year.
4.4 Investment of Account Balances. The Fund shall be
divided into such three or more Investment Funds as the Trustee may from time
to time establish, in which each Member's Account shall be invested according
to such Member's instructions
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pursuant to Sections 4.5 through 4.7. Notwithstanding its stated primary
investment objectives, any Investment Fund may make or retain investments of
such nature, or such cash balances, as may be necessary or appropriate in
order to effect distributions or to meet other administrative requirements of
the Plan.
4.5 Designation of Investment Funds for Future
Contributions. Each Member may, by giving notice to the Administrator on the
Appropriate Form, designate the proportion of his share of the Employer
contribution and forfeitures for each Plan Year that is to be allocated to
each Investment Fund. Such designation shall be made at such time as the
Administrator shall prescribe, and shall be effective on the first day for
which it can be given effect under the Administrator's procedures. If a
Member fails to make such a designation, all contributions and forfeitures
allocated to such Member's Account shall be invested in the Investment Fund
expected to have the least volatility of principal value. Any designation
under this Section 4.5 shall continue in effect until changed by the filing
of a new designation under this Section 4.5.
4.6 Designation of Investment Funds for Existing Account
Balances. A Member may designate the proportion of the then existing balance
of his Account to be invested in each Investment Fund by giving notice to the
Administrator on the Appropriate Form at such time as the Administrator shall
prescribe. Following a Member's death and pending distribution of his
Account, his Beneficiary may exercise the rights provided under this Section
4.6 with respect to the portion of the Account from which such Beneficiary
will
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receive a distribution. Such designation shall be effective on the first day
for which it can be given effect under the Administrator's procedures.
4.7 Valuation of Investment Funds. As of each Valuation
Date, the Administrator shall determine the net fair market value of the
assets of each Investment Fund, and shall allocate the Investment Adjustment
among the Members' Accounts in proportion to the value of their Accounts as
of the preceding Valuation Date; provided, however, that no Account shall
share in such allocation after the Valuation Date established for
distribution thereof. A Member's interest in each Investment Fund shall be
reduced by the amount of distributions or withdrawals therefrom (including
transfers to any other Investment Fund) and shall be increased by the amount
of any transfers thereto from any other Investment Fund, in such manner as
the Administrator may deem appropriate.
4.8 Correction of Error. The Administrator may adjust
any or all Accounts in order to correct errors or rectify omissions, in such
manner as he believes will best result in the equitable and nondiscriminatory
administration of the Plan.
4.9 Allocation Shall Not Vest Title. The fact that
allocation is made and amounts credited to a Member's Account shall not vest
in such Member any right, title or interest in and to any assets except at
the time or times and upon the terms and conditions expressly set forth in
this Plan, nor shall the Trustee be required to segregate physically the
assets of the Fund by reason thereof.
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4.10 Statement of Accounts. The Administrator shall
distribute to each Member a statement showing his interest in the Fund at
least annually.
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ARTICLE V
Vesting and Distribution of Benefits
5.1 Vesting.
5.1.1 Full Vesting. Upon a Member's Termination of
Employment on account of death or Disability, or upon his attainment
of his Normal Retirement Date (or any higher age) while employed by
an Employer or an Affiliate, his Account shall have a Vested
Percentage of 100%.
5.1.2 Vesting Schedule. Upon a Member's Termination
of Employment for a reason other than death, Disability or retirement
on or after his Normal Retirement Date, he shall be entitled to
receive the Vested Percentage of the balance in his Account,
determined on the basis of the Member's Years of Service, as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
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5.2 Distribution on Termination of Employment.
5.2.1 When a Member's employment terminates for any
reason, the Vested Percentage of the balance of his Account
shall be distributed to him or, if distribution is being made
by reason of death (or after his death following Termination
of Employment), to his Beneficiary. Such distribution shall be
made in accordance with the further provisions of this Article
V.
5.2.2 The amount to be distributed pursuant to this
Section 5.2 shall be determined by a valuation of the Member's
Account on the Valuation Date coinciding with or immediately
preceding the date of distribution.
5.3 Payment of Benefits in General. Any amount
distributable with respect to a Member whose employment terminates for any
reason other than death shall be paid in cash in a single sum as soon as
administratively practicable following Termination of Employment. Any amount
allocated as of the last day of a Plan Year to the Account of a Member who
terminated employment during such Year on account of death or Disability or
on or after attainment of his Normal Retirement Date shall be paid to the
Member or his Beneficiary as soon as administratively practicable after such
allocation. Notwithstanding the foregoing, if the nonforfeitable balance of
the Member's Account on the Valuation Date referred to in Section 5.2.2
exceeds $3,500 (or if it exceeded $3,500 at the time of any prior
distribution), (a) such Member's benefit shall not be so distributed prior to
his Normal
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Retirement Date without the Member's written consent, and (b) if such consent
is not given within such time as the Administrator shall prescribe, such
benefit shall instead be distributed after the Member's Normal Retirement
Date, as if he had terminated employment on that date. Distribution shall in
all events commence no later than 60 days after the close of the Plan Year in
which occurs the later of the Member's Normal Retirement Date or most recent
Termination of Employment. If distribution is deferred until the Member's
Normal Retirement Date, he shall have the right to give investment directions
pursuant to Section 4.6 and his Account shall be credited or charged with
applicable Investment Adjustments through the Valuation Date preceding or
coinciding with his Normal Retirement Date. For purposes of the Plan, if the
nonforfeitable balance of a Member's Account is zero, the Member shall be
deemed to have received a single-sum distribution of such nonforfeitable
balance upon his Termination of Employment. The nonvested portion of the
Account of a Member who is deemed to have received a single-sum distribution
of his nonforfeitable balance under this Section 5.4 shall be forfeited
pursuant to Section 5.4.
5.4 Forfeitures.
5.4.1 Forfeitures. The nonvested portion of a
terminated Member's Account shall be valued and forfeited as of the
Valuation Date coincident with or next following his Termination of
Employment. All amounts forfeited pursuant to this Section 5.4 shall
be reallocated to the Accounts of Participating Members as of the
last day of each Plan Year as provided in Section 4.3; provided, that
if a Member is reemployed by the Company or an Affiliate prior to the
last day of the
V-3
Plan Year in which he incurs a Termination of Employment, no portion
of his Account shall be forfeited or reallocated.
5.4.2 Reemployment. The forfeited portion of a
Member's Account shall be restored if he is reemployed by the
Company, another Employer or an Affiliate before he incurs a Break in
Service of five years or more.
5.5 Payment of Death Benefits.
5.5.1 In General. In the event of the death of a
Member prior to his Termination of Employment, the balance in his
Account shall be distributed to his Beneficiary in a single payment
as soon as administratively practicable after the date of death. If
the Beneficiary is the Member's Spouse, such distribution shall be
made or begin as soon as practicable and, if the Member had attained
Normal Retirement Age prior to death, not later than 60 days
following the close of the Plan Year in which death occurs. Any
amounts allocated to the deceased Member's Account as of the last day
of the Plan Year in which he dies shall be distributed to his
Beneficiary as soon as administratively practicable thereafter.
5.5.2 Designation of a Beneficiary. A Member's
sole Beneficiary shall be his Spouse (if the Member has a surviving
Spouse) unless the Member has designated another Beneficiary with
Spousal Consent. A Beneficiary designation shall be effective when
duly executed and delivered to the Administrator. It may be revoked
by filing with the Administrator a subsequent designation or a
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written instrument of revocation in the form prescribed by him, but
any such designation or revocation which has the effect of naming a
person other than the Member's Spouse as sole Beneficiary is subject
to the Spousal Consent requirement.
5.5.3 Distribution to Minor or Incompetent. Any
death benefit distributable to a minor or incompetent shall be
distributed pursuant to Section 10.7.
5.5.4 Absence of a Beneficiary. If a Member has
failed effectively to designate a Beneficiary, or a Beneficiary
previously designated has predeceased the Member and no alternative
designation has become effective, benefits payable on the Member's
death shall be distributed to his surviving Spouse, if any, or if no
Spouse survives, to the Member's estate.
5.5.5 Proof of Death. The Administrator may
require such proof of death and such evidence of the right of any
person to receive all or part of the death benefit of a deceased
Member as the Administrator may deem desirable. The Administrator's
determination of the fact of death of a Member and of the right of
any person to receive a distribution as a result thereof shall be
conclusive upon such Member and all persons having or claiming any
right in the Fund on account of such Member.
5.5.6 Undistributed Balance of Terminated Member.
In the event that a Member shall terminate employment with a vested
balance in his Account and shall die prior to the complete
distribution of such vested balance, the undistribut-
V-5
ed portion of such vested balance shall be distributed to his
Beneficiary in the manner provided for in this Section 5.5.
Notwithstanding the foregoing, the Administrator and Trustee shall be
fully protected in making distribution in the name of any such Member
prior to the Trustee's receiving actual notice of the death of such
Member, and no Beneficiary of a deceased Member shall have any
interest in such Member's vested Account balance to the extent that
any such distribution shall have been made.
5.5.7 Discharge of Liability. If distribution in
respect of a Member's Account is made to a person reasonably believed
by the Administrator (taking into account any document purporting to
be a valid Spousal Consent or any representation by the Member that
he is not married) to properly qualify as the Member's Beneficiary
under the provisions of this Section 5.5, the Plan shall have no
further liability with respect to such Account (or the portion
thereof so distributed).
5.6 Distribution at Age 70-1/2. The Account balance of a
Member who attains age 70-1/2 shall be distributed to him in a single sum no
later than the first day of April following the calendar year in which such
Member attains age 70-1/2, even if he is still employed. Any amount
subsequently allocated to the Member's Account under the Plan shall be
distributed to the Member as soon as practicable following the date of such
allocation (or, in the event the Member is still employed, as soon as
practicable after the end of the Plan Year in respect of which the allocation
is made).
5.7 Delay of Payment. Notwithstanding any provisions to
the contrary contained in this Plan, in the event that the amount of a payment
required to commence on
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the date otherwise determined under this Plan cannot be ascertained by such
date, or if it is not possible to make such payment on such date because the
Administrator has been unable to locate the Member (or, in the case of a
deceased Member, his Beneficiary) after making reasonable efforts to do so, a
payment retroactive to such date may be made no later than 60 days after the
earliest date on which the amount of such payment can be ascertained under
this Plan or the date on which the Member (or Beneficiary) is located,
whichever is applicable.
5.8 Qualified Domestic Relations Orders.
5.8.1 Definition. For purposes of this Section
5.8.1, "Qualified Domestic Relations Order" means any judgment,
decree or order (including approval of a property settlement) made
pursuant to a state domestic relations law (including a community
property law) which relates to the provision of child support,
alimony payments or marital property rights to a Spouse, former
Spouse, child or other dependent of a Member and which creates or
recognizes the existence of a right of (or assigns a right to) such
Spouse, former Spouse, child or other dependent (the "Alternate
Payee") to receive all or a portion of the benefits payable with
respect to a Member under the Plan. A Qualified Domestic Relations
Order must clearly specify the amount or percentage of the Member's
benefits to be paid to such Alternate Payee by the Plan (or the
manner in which such amount or percentage is to be determined) and
the number of payments or period to which such order applies. A
Qualified Domestic Relations Order may not require the Plan (a) to
provide any form or type of
V-7
benefits or any option not otherwise provided under the Plan, (b) to
pay benefits to an Alternate Payee under such order which are
required to be paid to another Alternate Payee under another such
order previously filed with the Plan, or (c) to provide increased
benefits (determined on the basis of actuarial equivalents);
provided, however, that if the Participant has reached age 50, or the
Alternate Payee and the Administrator have entered into an agreement
providing for distribution, payment of benefits to the Alternate
Payee under the order may be made (x) at any time after the date of
the order, (y) as if the Member had retired on the date on which such
payment is to begin under such order (taking into account only the
benefits in which the Participant is then vested) and (z) in any form
in which such benefits may be paid to the Member.
5.8.2 Distributions. The Administrator shall
recognize and honor any judgment, decree or order entered on or after
January 1, 1985 under a state domestic relations law which the
Administrator determines to be a Qualified Domestic Relations Order
in accordance with such reasonable procedures to determine such
status as the Administrator shall establish. Without limitation of
the foregoing, the Administrator shall notify a Member and the person
entitled to benefits under a judgment, decree or order which purports
to be a Qualified Domestic Relations Order of (a) the receipt
thereof, (b) the Plan's procedures for determining whether such
judgment, decree or order is a Qualified Domestic Relations Order and
(c) any determination made with respect to such status. During any
period during which the Administrator is determining whether any
judgment, decree or order is a Qualified
V-8
Domestic Relations Order, any amount which would have been payable to
any person pursuant to such order shall be separately accounted for
(and adjusted to reflect its appropriate share of the Investment
Adjustments as of each Valuation Date pursuant to Article IV) pending
payment to the proper recipient thereof. Any such amount, as so
adjusted, shall be paid to the person entitled to such payment under
any such judgment, decree or order if the Administrator determines
such judgment, decree or order to be a Qualified Domestic Relations
Order within 18 full calendar months commencing with the date on
which the first payment would be required to be made under such
judgment, decree or order. If the Administrator is unable to make
such a determination within such time period, payment under the Plan
shall be as if such judgment, decree or order did not exist and any
such determination made after such time period shall be applied
prospectively only.
5.9 Direct Rollover of Eligible Rollover Distributions.
Notwithstanding any provisions of this Plan that would otherwise limit a
Distributee's election under this Section 5.9, a Distributee may elect, at
the time and in the manner prescribed by the Administrator, to have any
portion of an Eligible Rollover Distribution paid in a Direct Rollover
directly to an Eligible Retirement Plan specified by the Distributee.
5.9.1 Definitions. For purposes of this
Section 5.9, the following terms shall have the meanings specified
below.
5.9.1.1 Eligible Rollover Distribution.
Any distribution of all or any portion of the balance to the credit
of a Distributee under the Plan,
V-9
except that an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal periodic
payments (not less frequent than annual) made for the life (or life
expectancy) of the Distributee or the joint lives (or life
expectancies) of the Distributee and the Distributee's Beneficiary,
or for a specified period of ten years or more; any distribution to
the extent such distribution is required under section 401(a)(9) of
the Code; and the portion of any distribution that is not includible
in gross income.
5.9.1.2 Eligible Retirement Plan.
An individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or
another employer's qualified trust described in section 401(a) of the
Code, that accepts a Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving Spouse, an Eligible Retirement Plan is only an individual
retirement account or individual retirement annuity.
5.9.1.3 Distributee. A Member, a
Member's surviving Spouse or a Member's Spouse or former Spouse who
is the Alternate Payee under a Qualified Domestic Relations Order (as
defined in section 414(p) of the Code).
5.9.1.4 Direct Rollover. A payment by
the Plan to an Eligible Retirement Plan specified by a Distributee,
in the manner prescribed by the Administrator.
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5.9.2 Limitation. No more than one Direct
Rollover may be elected by a Distributee for each Eligible Rollover
Distribution.
5.9.3 Default Procedure. If, upon Termination of
Employment, the value of a Members Account does not exceed $3,500
(and did not exceed $3,500 at the time of any prior distribution
under the Plan), and such Member does not make a timely election
under this Section 5.9 to make a Direct Rollover, the Member's
Accounts shall be distributed to the Member in accordance with
Section 5.3.
V-11
ARTICLE VI
Administration of the Plan
6.1 Fiduciary. The named fiduciary under the Plan shall
be the Administrator, who shall have authority to control and manage the
operation and administration of the Plan, except that he shall have no
authority or responsibility with respect to those matters which under any
applicable trust agreement, insurance policy or similar contract are the
responsibility, or subject to the authority, of the Trustee, any insurance
company or similar organization. The named fiduciary under the Plan shall
have the right, by written instrument executed by him, to designate persons
other than the named fiduciary to carry out fiduciary responsibilities under
the Plan.
6.2 The Administrator.
6.2.1 Appointment of Administrator. The Board of
Directors shall appoint an Administrator to administer the Plan,
without regard to whether or not he is an officer or employee of an
Employer or a Member of the Plan, or whether or not he is serving as
a Trustee of the Plan, and he shall serve at the pleasure of the
Board of Directors. The Administrator may resign by delivering his
written resignation to the Board of Directors. Any vacancy in the
position of Administrator, arising for any reason whatsoever, shall
be filled by the Board of Directors. If the Administrator is also a
Member of this Plan, he shall not exercise discretion in any matter
relating solely to himself. In the event no Administrator is then
serving, or if the Administrator is incapable of taking action with
respect to any matter (because the
VI-1
matter relates solely to himself, or for any other reason), the Board
of Directors shall administer the Plan as if it were the
Administrator.
6.2.2 Duties. The Administrator shall administer
the Plan and may make such rules as he may deem necessary in order to
effectuate its provisions, and with the approval of the Board of
Directors may employ such persons as he shall deem necessary or
desirable to assist in the administration of the Plan. The
Administrator shall have the power and discretion to determine any
question arising in the administration, interpretation, and
application of the Plan, and shall have the power to correct defects,
supply omissions and reconcile inconsistencies to the extent
necessary to effectuate the Plan. The determination of the
Administrator shall be conclusive and binding on all persons. All
distributions of the assets of the Fund shall be made by the Trustee
at the written direction of the Administrator. All expenses of the
Administrator shall be paid by the Company, and such expenses shall
include any expenses authorized by the Board of Directors as
necessary or desirable in the administration of the Plan.
6.3 Advisers. Any named fiduciary under the Plan, and
any fiduciary designated by a named fiduciary to whom such power is granted
by a named fiduciary under the Plan, may employ one or more persons to render
advice with regard to any responsibility such fiduciary has under the Plan.
VI-2
6.4 Service in Multiple Capacities. Any person or group
of persons may serve in more than one fiduciary capacity with respect to the
Plan.
6.5 Limitation of Liability; Indemnity.
6.5.1 Delegation of Duty. Except as otherwise
provided by law, if any duty or responsibility of a named fiduciary
has been allocated or delegated to any other person in accordance
with any provision of this Plan, then such named fiduciary shall not
be liable for any act or omission of such person in carrying out such
duty or responsibility.
6.5.2 Limitation of Liability. Except as
otherwise provided by law, no person who is a named fiduciary, or any
employee, director or officer of any Employer or Affiliate, shall
incur any liability whatsoever on account of any matter connected
with or related to the Plan or the administration of the Plan, unless
such person shall have acted in bad faith or been guilty of willful
misconduct or gross negligence in respect of his duties, actions or
omissions in respect of the Plan. The allocation of a Member's (or
Beneficiary's) Account, and contributions allocable thereto, among
Investment Funds shall be the responsibility of the Member or
Beneficiary in accordance with Article IV and the Administrator shall
not be deemed a fiduciary with respect to such allocation.
6.5.3 Indemnity. The Company shall indemnify and
save harmless each employee, director or officer of any Employer or
Affiliate who serves
VI-3
in a fiduciary or any other capacity under or with respect to the
Plan, from and against any and all loss, liability, claim, damage,
cost and expense which may arise by reason of, or be based upon, any
matter connected with or related to the Plan or the administration of
the Plan (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or in
settlement of any such claim whatsoever) to the fullest extent
permitted under the Company's Certificate of Incorporation and
By-Laws, unless such person shall have acted in bad faith or been
guilty of willful misconduct or gross negligence in respect of his
duties, actions or omissions in respect of the Plan.
6.6 Reliance on Information. The Administrator and any
Employer and its officers, directors and employees shall be entitled to rely
upon all tables, valuations, certificates, opinions and reports furnished by
any accountant, trustee, insurance company, counsel or other expert who shall
be engaged by an Employer or the Administrator, and the Administrator and any
Employer and its officers, directors and employees shall be fully protected
in respect of any action taken or suffered by them in good faith in reliance
thereon, and all action so taken or suffered shall be conclusive upon all
persons affected thereby.
6.7 Funding Policy. The funding policy and method of the
Plan shall consist of the receipt of contributions and the investment thereof
pursuant to the provisions of the Plan.
VI-4
6.8 Proper Proof. In any case in which an Employer or the
Administrator shall be required under the Plan to take action upon the
occurrence of any event, they shall be under no obligation to take such
action unless and until proper and satisfactory evidence of such occurrence
shall have been received by them.
6.9 Genuineness of Documents. The Administrator, and any
Employer and its respective officers, directors and employees, shall be
entitled to rely upon any notice, request, consent, letter, telegram or other
paper or document believed by them or any of them to be genuine, and to have
been signed or sent by the proper person, and shall be fully protected in
respect of any action taken or suffered by them in good faith in reliance
thereon.
VI-5
ARTICLE VII
The Trust Agreement
7.1 The Trust Agreement. The Company, on behalf of itself
and each other Employer, shall enter into a Trust Agreement with the Trustee
providing for the establishment of a Fund hereunder consisting of all
contributions to the Plan and earnings and profits thereon. The Trust
Agreement shall be deemed to form a part of this Plan, and any and all rights
which may accrue to any person under this Plan shall be subject to all the
terms and provisions of such Trust Agreement. Copies of the Trust Agreement
shall be filed with the Administrator and, upon reasonable application and
notice, shall be made available for inspection by any Member.
7.2 Rights of the Company. Except as otherwise expressly
provided in the Trust Agreement, upon the transfer by an Employer of any
money or assets to the Fund, all interest of the Employer therein shall cease
and terminate, legal title to such Fund shall be vested absolutely in the
Trustee and no part of the Fund or income therefrom shall be used for or
diverted to purposes other than the exclusive benefit of the Members and
their Beneficiaries as provided herein; provided, however, that:
(a) A contribution that is made by an Employer by a
mistake of fact may be returned to the Employer upon its request
within one year after the payment of the contribution;
VII-1
(b) A contribution that is conditioned upon its
deductibility under section 404(a) of the Code may be returned to the
Employer upon its request, to the extent that the contribution is
disallowed as a deduction, within one year after such disallowance;
and
(c) A contribution that is conditioned on initial
qualification of the Plan under section 401(a) of the Code may, if
the Plan does not so qualify, be returned (together with any earnings
thereon) to the contributing Employer within one year after the date
of denial of qualification of the Plan.
7.3 Duties and Responsibilities of the Trustee. The
Trustee will hold and invest all funds as provided herein and in the Trust
Agreement. The Trustee will make, at the written direction of the
Administrator, all payments to Members and their Beneficiaries.
7.4 Company as Agent. The Company is authorized to act
as agent for all other Employers in dealings with the Trustee under the Plan.
VII-2
ARTICLE VIII
Amendment
8.1 Right of the Company to Amend the Plan. The Company
shall have the right at any time and from time to time to amend any or all of
the provisions of this Plan, by resolution of the Board of Directors. Except
as provided in Section 8.3, no such amendment shall authorize or permit any
part of the Fund to be used for or diverted to purposes other than the
exclusive benefit of the Members and their Beneficiaries, nor shall any
amendment reduce any amount then credited to the Account of any Member,
reduce any Member's vested interest in his Account, or affect the rights,
duties and responsibilities of the Trustee without the Trustee's written
consent.
8.2 Plan Merger. In the case of any merger or
consolidation with, or transfer of assets or liabilities to, any other plan,
each Member shall be entitled to a benefit immediately after the merger,
consolidation, or transfer (if such other plan then terminated) which is
equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had
then been terminated).
8.3 Amendments Required by Law. All provisions of this
Plan, and all benefits and rights granted hereunder, are subject to any
amendments, modifications or alterations which are necessary from time to
time, (a) to qualify the Plan under section 40l(a) of the Code and the
regulations and rulings thereunder, (b) to continue the Plan as so qualified,
or (c) to comply with any other provision of law. Accordingly,
notwithstanding any other provision of this Plan, the Company may, by
resolution of the Board of Directors,
VIII-1
amend, modify or alter the Plan, with or without retroactive effect, in any
respect or manner necessary to qualify the Plan under section 40l(a) of the
Code, to continue the Plan as so qualified, to meet the aforementioned
statutory requirements or to comply with any other provision of applicable
law.
VIII-2
ARTICLE IX
Discontinuance of Contributions
and Termination of the Plan
9.1 Right to Terminate the Plan or Discontinue Con-
tributions. The Employers have established the Plan with the bona fide
intention and expectation that from year to year they will be able to and
will deem it advisable to make contributions as herein provided. However, the
board of directors of an Employer may determine that circumstances make it
impossible or inadvisable for such Employer to make a contribution in respect
of a given Plan Year. The failure of such board of directors to authorize a
contribution in respect of a Plan Year shall not constitute a termination of
the Plan. However, the Company reserves the right in its discretion to
terminate the Plan or completely discontinue contributions thereto at any
time, with respect to any or all Employers.
9.2 Manner of Termination. The Board of Directors shall
have the power in its discretion to terminate the Plan by appropriate
resolution. A certified copy of such resolution or resolutions shall be
delivered to the Administrator, and as soon as possible thereafter the
Administrator shall deliver to the Trustee a copy of the resolution or
resolutions and shall give appropriate notice to the Members.
9.3 Effect of Termination. In the event of the complete
or partial termination (within the meaning of section 4ll(d)(3) of the Code)
of the Plan or a complete discontinuance of contributions by the Employers,
the rights of all affected Members to their Accounts as of the date of such
termination or such complete discontinuance of contributions
IX-1
shall be fully vested and nonforfeitable (within the meaning of section 4ll
of the Code and regulations thereunder). After the date of a complete
termination specified in the resolution or resolutions adopted by the Board
of Directors, the Employers shall make no further contributions under the
Plan. In the event of a complete discontinuance of contributions without a
termination of the Plan, all provisions of the Plan and of the Trust
Agreement shall remain in force which are necessary in the opinion of the
Administrator, other than the provisions for contributions.
9.4 Distribution of the Fund. In the event of a
termination of the Plan, the Trustee shall apply each Member's Account to the
benefit of such Member (or his Beneficiary) in accordance with the
instructions of the Administrator.
9.5 Expenses of Termination. In the event of the complete
or partial termination of the Plan, the expenses incident thereto shall be a
prior claim and lien upon the assets of the Trust Fund, and shall be paid or
provided for prior to the distribution of any benefits pursuant to such
termination.
IX-2
ARTICLE X
Miscellaneous Provisions
10.1 Plan Not a Contract of Employment. Neither the
establishment of the Plan, nor any amendment thereof, nor the creation of the
Fund or any Account, nor the payment of any benefits thereunder, shall be
construed as giving to any Member or other person any legal or equitable
right against any Employer, any officer or employee thereof, the Board of
Directors or any member thereof, the Administrator, or any Trustee, except as
provided herein, and under no circumstances shall the terms of employment of
any Member be in any way affected hereby.
10.2 Source of Benefits. All benefits payable under the
Plan shall be paid or provided for solely from the Fund and the Employers
assume no liability or responsibility therefor. The Employers are under no
legal obligation to make any contributions to the Fund. No action or suit
shall be brought by any Member or Beneficiary, or by any Trustee, against any
Employer for any such contribution.
10.3 Spendthrift Clause. Except as may be otherwise
required by a Qualified Domestic Relations Order (as defined in section
5.8.1) or other applicable law, no benefit or payment under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, whether voluntary or involuntary,
and no attempt so to anticipate, alienate, sell, transfer, assign, pledge,
encumber or charge the same shall be valid, nor shall any such benefit or
payment be in any way liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person entitled to such
X-1
benefit or payment, or subject to attachment, garnishment, levy, execution or
other legal or equitable process.
10.4 Merger. The merger or consolidation of the Company
with any other company or the transfer of the assets of the Company to any
other company by sale, exchange, liquidation or otherwise or the merger of
this Plan with any other retirement plan shall not in and of itself result in
the termination of the Plan or be deemed a Termination of Employment of any
Employee.
10.5 Claims Procedure. The Administrator shall establish a
claims procedure in accordance with applicable law, under which any Member or
Beneficiary whose claim for benefits has been denied shall have a reasonable
opportunity for a full and fair review of the decision denying such claim.
10.6 Inability to Locate Distributee. Notwithstanding any
other provision of the Plan, in the event that the Administrator cannot
locate any person to whom a payment or distribution is due under the Plan,
and no other payee has become entitled thereto pursuant to any provision of
the Plan, the Account in respect of which such payment or distribution is to
be made shall be forfeited at the close of the third Plan Year following the
Plan Year in which such payment or distribution first became due (but in all
events prior to the time such Account would otherwise escheat under any
applicable state law); provided, that any Account so forfeited shall be
reinstated if such person subsequently makes a valid claim for such benefit.
X-2
10.7 Payment to a Minor or Incompetent. If any amount is
payable to a minor or other legally incompetent person, such amount may be
paid in any of the following ways, as the Administrator in his sole
discretion shall determine:
(a) To the legal representatives of such minor or
other incompetent person;
(b) Directly to such minor or other incompetent
person;
(c) To a parent or guardian of such minor, or to a
custodian for such minor under the Uniform Gifts to Minors Act (or
similar statute) of any jurisdiction or to the person with whom such
minor shall reside.
Payment to such minor or incompetent person, or to such other person as may
be determined by the Administrator, as above provided, shall discharge all
Employers, the Administrator, the Trustees and any insurance company or other
person or corporation making such payment pursuant to the direction of the
Administrator, and none of the foregoing shall be required to see to the
proper application of any such payment to such person pursuant to the
provisions of this Section 10.7.
10.8 Doubt as to Right to Payment. If at any time any
doubt exists as to the right of any person to any payment hereunder or as to
the amount or time of such payment (including, without limitation, any doubt
as to identity, or any case in which any notice has been received from any
other person claiming any interest in amounts payable hereunder, or any case
in which a claim from other persons may exist by reason of commu-
X-3
nity property or similar laws) the Administrator shall be entitled, in its
discretion, to direct the Trustee (or any insurance company) to hold such sum
as a segregated amount in trust until such right or amount or time is
determined or until order of a court of competent jurisdiction, or to pay
such sum into court in accordance with appropriate rules of law in such case
then provided, or to make payment only upon receipt of a bond or similar
indemnification (in such amount and in such form as is satisfactory to the
Administrator).
10.9 Estoppel of Members and Beneficiaries. The Employers,
Administrator and Trustee may rely upon any certificate, statement or other
representation made to them by any Employee, Member or Beneficiary with
respect to age, length of service, leave of absence, date of cessation of
employment or other fact required to be determined under any of the
provisions of the Plan, and shall not be liable on account of the payment of
any benefits or the doing of any act in reliance upon any such certificate,
statement or other representation. Any such certificate, statement or other
representation made by an Employee or Member shall be conclusively binding
upon such Employee or Member and his Beneficiary and estate, and such
Employee, Member, Beneficiary and estate shall thereafter and forever be
estopped from disputing the truth and correctness of such certificate,
statement or other representation. Any such certificate, statement or other
representation made by a Beneficiary shall be conclusively binding upon such
Beneficiary, and such Beneficiary shall thereafter and forever be estopped
from disputing the truth and correctness of such certificate, statement or
other representation.
X-4
10.10 Separability. If any provision of the Plan or the
Trust Agreement is held invalid or unenforceable, its invalidity or
unenforceability shall not affect any other provisions of the Plan and/or the
Trust Agreement, and the Plan and Trust Agreement shall be construed and
enforced as if such provision had not been included therein.
10.11 Captions. The captions contained herein are inserted
only as a matter of convenience and for reference and in no way define,
limit, enlarge or describe the scope or intent of the Plan nor in any way
shall affect the Plan or the construction of any provision thereof.
10.12 Usage. Whenever applicable, the masculine gender,
when used in the Plan, shall include the feminine or neuter gender, and the
singular shall include the plural.
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ARTICLE XI
Leased Employees
11.1 Definitions. For purposes of this Article XI, the
term "Leased Employee" means any person (a) who performs or performed
services for an Employer or Affiliate (hereinafter referred to as the
"Recipient") pursuant to an agreement between the Recipient and any other
person (hereinafter referred to as the "Leasing Organization"), (b) who has
performed such services for the Recipient or for the Recipient and related
persons (within the meaning of section 144(a)(3) of the Code) on a
substantially full-time basis for a period of at least one year, and (c)
whose services are of a type historically performed by employees in the
business field of the Recipient.
11.2 Treatment of Leased Employees. For purposes of this
Plan, a Leased Employee shall be treated as an employee of an Affiliate whose
service for the Recipient (including service during the one-year period
referred to in Section 11.1) is to be taken into account in determining
compliance with the service requirements of the Plan relating to
participation. However, the Leased Employee shall not be entitled to share in
contributions or forfeitures under the Plan with respect to any service or
compensation attributable to the period during which he is a Leased Employee,
and shall not be eligible to become a Member eligible to accrue benefits
under the Plan unless and except to the extent that he shall at some time,
either before or after his service as a Leased Employee, qualify as an
Eligible Employee without regard to the provisions of this Article XI (in
which event, status as a Leased Employee shall be determined without regard
to clause (b) of Section 11.1, to the extent required by applicable law).
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11.3 Exception for Employees Covered by Plans of Leasing
Organization. Section 11.2 shall not apply to any Leased Employee if such
employee is covered by a money purchase pension plan of the Leasing
Organization meeting the requirements of section 414(n)(5)(B) of the Code and
Leased Employees do not constitute more than 20% of the aggregate "nonhighly
compensated work force" (as defined in Section 414(n)(5)(C)(ii) of the Code)
of all Employers and Affiliates.
11.4 Construction. The purpose of this Article XVI is to
comply with the provisions of section 4l4(n) of the Code. All provisions of
this Article shall be construed consistently therewith, and, without limiting
the generality of the foregoing, no individual shall be treated as a Leased
Employee except as required under such section.
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ARTICLE XII
"Top-Heavy" Provisions
12.1 Determination of "Top-Heavy" Status.
12.1.1 Applicable Plans. For purposes of this
Article XII, "Applicable Plans" shall include (a) each plan of an
Employer or Affiliate in which a Key Employee (as defined in Section
12.1.2 for this Plan, and as defined in section 416(i) of the Code
for each other Applicable Plan) participates during the five-year
period ending on such plan's "determination date" (as described in
Section 12.1.4) and (b) each other plan of an Employer or Affiliate
which, during such period, enables any plan in clause (a) of this
sentence to meet the requirements of sections 401(a)(4) and 410 of
the Code. Any plan not required to be included under the preceding
sentence may also be included, at the option of the Company, provided
that the requirements of sections 401(a)(4) and 410 of the Code
continue to be satisfied for the group of Applicable Plans after such
inclusion. Applicable Plans shall include terminated plans, frozen
plans, and to the extent that benefits are provided with respect to
service with an Employer or an Affiliate, multiemployer plans
(described in section 414(f) of the Code) and multiple employer plans
(described in section 413(c) of the Code) to which an Employer or an
Affiliate makes contributions.
12.1.2 Key Employee. For purposes of this
Article XII, "Key Employee" shall mean an employee (including a
former employee, whether or not
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deceased) of an Employer or Affiliate who, at any time during a given
Year or any of the four preceding Plan Years, is one or more of the
following:
(a) An officer of an Employer or Affiliate
having compensation within the meaning of section 414(q)(7) of
the Code ("Top-Heavy Earnings") of more than 50% of the dollar
amount in effect under section 415(b)(1)(A) of the Code for
any such Plan Year; provided, that the number of employees
treated as officers shall be no more than 50 or, if fewer, the
greater of three employees or 10% of the employees (including
Leased Employees as described in Section 11.1 and excluding
employees described in section 414(q)(8) of the Code).
(b) One of the 10 employees (i) having
Top-Heavy Earnings from the Employer or Affiliate of more than
the dollar amount described in Section 3.4 and (ii) owning (or
considered as owning, within the meaning of section 416(i) of
the Code), the largest percentage interests in value of an
Employer or Affiliate, provided that such percentage interest
exceeds 0.5% in value. If two employees have the same interest
in the Employer or Affiliate, the employee having greater
Top-Heavy Earnings shall be treated as having a larger
interest.
(c) A person owning (or considered as
owning, within the meaning of section 416(i) of the Code),
more than 5% of the outstanding stock of an Employer or
Affiliate, or stock possessing more than 5% of the
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total combined voting power of all stock of the Employer or
Affiliate (or having more than 5% of the capital or profits
interest in any Employer or Affiliate that is not a
corporation, determined under similar principles).
(d) A 1% owner of an Employer or Affiliate
having Top-Heavy Earnings of more than $150,000. A "1% owner"
means any person who would be described in Section 12.1.2(c)
if "1%" were substituted for "5%" in each place where it
appears in Section 12.1.2(c).
12.1.3 "Top-Heavy" Condition. In any Year during
which the sum, for all Key Employees (as defined in Section 12.1.2
for this Plan and in section 416(i) of the Code for each other
Applicable Plan), of the present value of the cumulative accrued
benefits under all Applicable Plans which are defined benefit plans
(determined based on the actuarial assumptions set forth in the
"top-heavy" provisions of such plans) and the aggregate of their
accounts under all Applicable Plans which are defined contribution
plans, exceeds 60% of a similar sum determined for all members in
such plans (but excluding members who are former Key Employees), the
Plan shall be deemed "Top-Heavy."
12.1.4 Determination Date. The determination as
to whether this Plan is "Top-Heavy" for a given Plan Year shall be
made on the last day of the preceding Plan Year (the "Determination
Date"); and other plans shall be included in determining whether this
Plan is "Top-Heavy" based on the determination date as
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defined in Code section 416(g)(4)(c) for each such plan which occurs
in the same calendar year as such Determination Date for this Plan.
12.1.5 Valuation. The value of account balances
and the present value of accrued benefits for each Applicable Plan
will be determined, subject to Code section 416 and the regulations
thereunder, as of the most recent Valuation Date occurring within the
12-month period ending on the applicable determination date for such
plan.
12.1.6 Distributions within Five Years. Subject to
Section 12.1.7, distributions from the Plan or any other Applicable
Plan during the five-year period ending on the applicable
Determination Date shall be taken into account in determining whether
the Plan is "Top-Heavy."
12.1.7 No Services within Five Years. Benefits and
distributions shall not be taken into account with respect to any
individual who has not rendered any services to any Employer or
Affiliate at any time during the five-year period ending on the
applicable determination date.
12.1.8 Compliance with Code Section 416. The
calculation of the "Top-Heavy" ratio, and the extent to which
distributions, rollovers and transfers from this Plan or any other
Applicable Plan are taken into account, shall be made in accordance
with Code section 416 and applicable regulations thereunder.
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12.1.9 Beneficiaries. The terms "Key Employee,"
"Member" and member include their beneficiaries.
12.1.10 Accrued Benefit Under Defined Benefit
Plans. Solely for purposes of determining whether this Plan or any
other Applicable Plan is "Top-Heavy" for a given Plan Year, the
accrued benefit under any defined benefit plan of a Member other than
a Key Employee shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined benefit
plans maintained by the Employer or an Affiliate, or (b) if there is
no such method, as if such benefit accrued not more rapidly than at
the slowest accrual rate permitted under the fractional accrual rule
of section 411(b)(1)(C) of the Code.
12.2 Provisions Applicable in "Top-Heavy" Years. For any
Plan Year in which the Plan is deemed to be "Top-Heavy," the following
provisions shall apply to any Member who has not terminated employment before
such Plan Year.
12.2.1 Required Allocation. The amount of Employer
contributions and forfeitures which shall be allocated to the account
of any Member who (a) is employed by an Employer or Affiliate on the
last day of the Year and (b) is not a Key Employee shall be (i) at
least 3% of such Member's "total compensation" (as that term is
defined in section 415(c)(3) of the Code) for such Year, or, (ii) if
less, an amount equal to such total compensation multiplied by the
highest allocation rate for any Key Employee. For purposes of the
preceding sentence, the allocation rate for each individual Key
Employee shall be determined by dividing the Employer
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contributions and forfeitures allocated to such Key Employee's
account under all Applicable Plans considered together, by his total
compensation; provided, however, that clause (ii) does not apply if
this Plan enables a defined benefit plan required to be aggregated
with this Plan under Section 12.1.1 to meet the requirements of
section 401(a)(4) or 410 of the Code. The minimum-allocation
provisions of this Section 12.2.1 shall, to the extent necessary, be
satisfied by special Employer contributions made by the Employer for
that purpose. Notwithstanding the foregoing, the minimum allocations
otherwise required by this Section 12.2.1 shall not be required to be
made for any Member if such Member is covered under a defined benefit
plan maintained by an Employer or an Affiliate which provides the
minimum benefit required under section 416(c)(1) of the Code, and/or
to the extent that the minimum allocation otherwise required by this
Section 12.2.1 is made under another defined contribution plan
maintained by an Employer or an Affiliate. In addition, any minimum
allocation required to be made for a Member who is not a Key Employee
shall be deemed satisfied to the extent of the benefits provided by
any other qualified plan maintained by an Employer or an Affiliate.
12.2.2 Multiplier. Except as otherwise provided by
law, "1.00" shall be substituted for the multiplier "1.25" required
by section 415(e)(2)(B)(i) and (3)(B)(i) of the Code, unless the
following conditions are met:
(a) the percentage described in Section
12.1.3 does not exceed 90%; and
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(b) "4%" is substituted for "3%" in Section
12.2.1.
Notwithstanding any other provision of this Plan, if the sum
of the combined limitation fractions described in section 415(e)(2)
and (3) of the Code as applied to this Plan, calculated by
substituting "1.00" for "1.25" in applying section 415(e)(2)(B)(i)
and (3)(B)(i) of the Code, for any Member exceeds 100% for the last
Plan Year before the Plan becomes "Top-Heavy," such fractions shall
be adjusted, in accordance with applicable regulations, so that their
sum does not exceed 100% for such Year.
12.2.3 Vesting. Any Member shall be vested in his
account on a basis at least as favorable as is provided under the
following schedule:
Years of Service Vested Percentage
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Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
In any Plan Year in which the Plan is not deemed to be
"Top-Heavy," the minimum Vested Percentage of any Account shall be no
less than that which was determined as of the last day of the last
Plan Year in which the Plan was deemed to be "Top-Heavy." The minimum
vesting schedule set out above shall apply to all benefits
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within the meaning of Code section 411(a)(7) except those
attributable to employee contributions, including benefits accrued
before the effective date of this Article XII and benefits accrued
before the Plan became "Top-Heavy." Any vesting schedule change
caused by alterations in the Plan's "Top-Heavy" status shall be
deemed to result from a Plan amendment giving rise to the right of
election required by Code section 411(a)(10)(B).
12.2.4 Bargaining Unit Employees. The provisions
of Sections 12.2.1 and 12.2.3 shall not apply to any employee
included in a unit of employees covered by a collective bargaining
agreement if, within the meaning of section 416(i)(4) of the Code,
retirement benefits were the subject of good faith bargaining.
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IN WITNESS WHEREOF, AGREE REALTY CORPORATION has caused
this instrument to be executed by its duly authorized officer, and its
corporate seal to be hereunto affixed, this 22nd day of April, 1994.
AGREE REALTY CORPORATION
By /s/ Richard Agree
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Title: President
ATTEST:
/s/ Kenneth Howe
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Secretary
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