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EXHIBIT 4.1
PROFIT SHARING PLAN
OF
COMSHARE, INCORPORATED
Amended and Restated
Effective October 1, 1995
Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243
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TABLE OF CONTENTS
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ARTICLE 1 - PREAMBLES
Section 1.01 Establishment of Plan..................... 1
Section 1.02 Amendment and Restatement of Plan......... 1
Section 1.03 Effective Date............................ 1
Section 1.04 Applicable Law............................ 1
Section 1.05 Defined Terms............................. 1
Section 1.06 Adoption of Plan by Related Entities...... 1
ARTICLE 2 - ELIGIBILITY AND PARTICIPATION
Section 2.01 Eligibility............................... 2
Section 2.02 Participation............................. 2
Section 2.03 Effect of Temporary Separations from
Employment on Eligibility.............. 3
ARTICLE 3 - CONTRIBUTIONS AND ALLOCATIONS
Section 3.01 Sources of Contributions and
Allocation to Accounts................. 4
Section 3.02 Employer Discretionary Contribution....... 5
Section 3.03 Employer Matching Contribution............ 7
Section 3.04 Employer Fixed Contribution............... 10
Section 3.05 Before-Tax Employee Contributions......... 10
Section 3.06 After-Tax Employee Contributions.......... 13
Section 3.07 Rollover Contributions and Direct Transfers 14
Section 3.08 Limitations on Annual Allocations
to Accounts............................ 15
ARTICLE 4 - INVESTMENT AND VALUATION OF ACCOUNTS
Section 4.01 Investment Elections...................... 17
Section 4.02 Valuations................................ 19
Section 4.03 Statements of Value of Participants'
Accounts............................... 20
ARTICLE 5 - NONFORFEITABLE RIGHTS TO BENEFITS
Section 5.01 Normal Retirement......................... 20
Section 5.02 Attainment of Age 59-1/2.................. 20
Section 5.03 Delayed Retirement........................ 20
Section 5.04 Disability Retirement..................... 21
Section 5.05 Death..................................... 21
Section 5.06 Termination of Employment prior to Death
or Eligibility for Any Retirement...... 22
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ARTICLE 6 - DISTRIBUTION OF BENEFITS
Section 6.01 Date Distribution is to Commence
or be Made............................. 23
Section 6.02 Distribution Options...................... 23
Section 6.03 Direct Rollovers after 1992............... 31
Section 6.04 Fixed Credit Accounts..................... 32
Section 6.05 Beneficiary Designations.................. 32
ARTICLE 7 - SPECIAL PROVISIONS
Section 7.01 Withdrawals for Hardship.................. 33
Section 7.02 Loans to Participants..................... 35
Section 7.03 Top-Heavy Plan Rules...................... 38
Section 7.04 Break in Service Rules.................... 44
Section 7.05 Leased Employees.......................... 47
Section 7.06 Provisions Relating to Plan Investments in
Company Stock.......................... 49
Section 7.07 Diversification of Investments............ 51
ARTICLE 8 - PROFIT SHARING FUND
Section 8.01 Establishment and Maintenance of Fund..... 52
Section 8.02 Benefits under the Plan Limited to
the Assets of the Fund................. 53
Section 8.03 The Trustee............................... 53
Section 8.04 Appointment of Investment Manager
and Custodian.......................... 53
ARTICLE 9 - PROVISIONS RELATING TO ADMINISTRATION AND
FIDUCIARIES
Section 9.01 Plan Administration....................... 55
Section 9.02 Claims Procedure.......................... 56
Section 9.03 Special Ruling............................ 57
Section 9.04 Specific Allocation of Fiduciary
Responsibilities among Named
Fiduciaries............................ 57
Section 9.05 Authorization for Further Allocation
Fiduciary Duties....................... 58
Section 9.06 Employment of Advisers.................... 58
Section 9.07 Delegation to Officers or Employees....... 58
Section 9.08 Indemnification........................... 58
Section 9.09 Fiduciary Liability Insurance............. 59
Section 9.10 Bonding................................... 59
(ii)
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ARTICLE 10 - AMENDMENT, TERMINATION AND MERGER
Section 10.01 Amendment of the Plan..................... 59
Section 10.02 Termination of the Plan................... 60
Section 10.03 Merger of Consolidation of Plans.......... 61
Section 10.04 Notice.................................... 62
ARTICLE 11 - MISCELLANEOUS PROVISIONS
Section 11.01 Approval of Commissioner of Internal
Revenue and Secretary of Department
of Labor............................... 62
Section 11.02 Payments for the Benefits of Payee........ 63
Section 11.03 Non-Alienation of Benefits................ 63
Section 11.04 Employer's Rights......................... 64
Section 11.05 Litigation................................ 64
Section 11.06 Addresses and Mailing of Notices and
Checks................................. 64
Section 11.07 Written Explanation....................... 65
Section 11.08 Notice of Service and Age................. 65
Section 11.09 Action by Employer........................ 65
Section 11.10 Construction.............................. 66
ARTICLE 12 - DEFINITIONS
Section 12.01 Account................................... 66
Section 12.02 Beneficiary............................... 66
Section 12.03 Break in Service.......................... 66
Section 12.04 Code...................................... 67
Section 12.05 Compensation.............................. 67
Section 12.06 Compensation Points....................... 68
Section 12.07 Custodian................................. 68
Section 12.08 Effective Date............................ 68
Section 12.09 Employee.................................. 68
Section 12.10 Employer or Company....................... 69
Section 12.11 ERISA..................................... 69
Section 12.12 5-Percent Owner........................... 69
Section 12.13 Family Member............................. 69
Section 12.14 Fixed Credit Account...................... 69
Section 12.15 Fund...................................... 69
Section 12.16 Highly Compensated Employee............... 69
Section 12.17 Hour of Service........................... 71
Section 12.18 Investment Manager........................ 72
Section 12.19 Named Fiduciary........................... 72
Section 12.20 Non-Highly Compensated Employee........... 72
Section 12.21 Normal Retirement Age..................... 72
Section 12.22 Participant............................... 72
Section 12.23 Plan...................................... 73
Section 12.24 Plan Administrator........................ 73
Section 12.25 Plan Year................................. 73
Section 12.26 Related Entity............................ 73
(iii)
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Section 12.27 Trustee................................... 73
Section 12.28 Valuation Date or Accounting Date......... 73
Section 12.29 Year of Service........................... 73
(iv)
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ARTICLE 1
PREAMBLES
SECTION 1.01 ESTABLISHMENT OF PLAN. Effective July 1, 1974,
Comshare, Incorporated ("Company") established a profit sharing plan covering
eligible employees of the Company. Effective June 28, 1985, the Company
established an employee stock ownership plan for eligible employees of the
Company. From time to time the Company has amended both plans as so
established. Effective as of October 1, 1995, the employee stock ownership
plan shall be merged into the profit sharing plan.
SECTION 1.02 AMENDMENT AND RESTATEMENT OF PLAN. The Company
desires to amend and restate the plan to effectuate the merger of the Company's
employee stock ownership plan into the profit sharing plan. This document sets
forth the merged, amended and restated plan and is known as the Profit Sharing
Plan of Comshare, Incorporated ("Plan").
SECTION 1.03 EFFECTIVE DATE. The Plan is generally effective
October 1, 1995.
SECTION 1.04 APPLICABLE LAW. The Plan is intended to permit
tax-deferred voluntary savings by eligible Employees pursuant to Section 401(k)
of the Internal Revenue Code of 1986, as amended ("Code"). The plan also is
intended to constitute a stock bonus plan that qualifies as an employee stock
ownership plan under Section 407(d)(6) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and Section 4975(e)(7) of the Code.
Where not governed by these laws, by regulations promulgated under them, or by
other federal laws, the Plan shall be administered and construed in accordance
with Michigan law.
SECTION 1.05 DEFINED TERMS. Throughout the Plan, various terms
are used repeatedly, which terms have very specific and definite meanings when
capitalized in the text. For convenience, such terms are collected and defined
in Article 12. Wherever such capitalized terms appear in the Plan, they shall
have the meanings specified in that article.
SECTION 1.06 ADOPTION OF PLAN BY RELATED ENTITIES. Any parent,
direct or indirect subsidiary, brother-sister corporation, or division of the
Company (all being Related Entities within the meaning of Section 12.26), with
the approval of the Company's Board of Directors, and by resolution of such
Related Entity's Board of Directors or partners (or other authority in the case
of an unincorporated division), may adopt the Plan and the trust created under
the Plan. In such
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case, the Related Entity shall be deemed an "Employer" hereunder as of the
effective date specified in its resolution. Any special terms applicable to
the Related Entity shall be set forth in an appendix to the Plan.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
SECTION 2.01 ELIGIBILITY. In order to be eligible to participate
in the Plan, an individual must:
(a) be an Employee of the Employer, and
(b) for purposes of Employer discretionary, matching and fixed
contributions under Sections 3.02, 3.03 and 3.04 have completed
one Year of Service.
SECTION 2.02 PARTICIPATION.
(a) Meaning of Participation. Participation entitles an individual to
receive a summary plan description that describes the terms of the Plan in
simple language, and to obtain various other reporting and disclosure documents
concerning the Plan. A Participant also shall have maintained on the books and
records of the Plan's Fund an Account in his name to which allocations may be
made in accordance with Article 4. However, mere participation in the Plan
does not entitle a Participant to an ultimate benefit from the Plan; a
Participant shall receive a benefit only if (i) allocations are made to his
Account over his period of participation, and (ii) the Participant has a
nonforfeitable right to all or a portion of his Account.
(b) Commencement of Participation.
(1) An individual who as of the day prior to the Effective Date
was participating in the Plan or the Employee Stock Ownership Plan of the
Company as then in effect shall participate in this Plan as merged, amended and
restated.
(2) An individual who as of the Effective Date was not
participating in the Plan as then in effect, but who as of such date had
satisfied the eligibility requirements for Employer discretionary, matching and
fixed contributions under Section 2.01, shall commence participation in the
Plan for purposes of Sections 3.02, 3.03 and 3.04 on the Effective Date.
(3) Any other individual shall commence participation in the
Plan for purposes of Section 3.05 as of
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the first day of the Plan Year quarter coincident with or next following the
date on which he first satisfies the eligibility requirements of Section 2.01.
(c) Termination of Participation. Participation in the Plan shall
terminate for a Participant as of (i) the date he receives from the Plan a lump
sum distribution, or the date he receives the last of a series of
distributions, of cash or other property, representing the entire
nonforfeitable balance of his Account, or (ii) in the case of a Participant
having no nonforfeitable right to his Account, as of the last day of the Plan
Year in which he first incurs five (5) consecutive one-year Breaks in Service.
(d) Resumption of Participation. An individual whose participation
has terminated pursuant to paragraph (c) above shall resume participation only
in accordance with the Break in Service rules in Section 2.03 of this Article
2.
(e) Waiver of Participation. An individual, once having become
eligible for participation in the Plan, shall not have the right to waive such
participation unless the Employer allows waivers of participation and accepts
the individual's waiver.
SECTION 2.03 EFFECT OF TEMPORARY SEPARATIONS FROM EMPLOYMENT ON
ELIGIBILITY.
(a) An Employee who separates from employment with the Employer, but
who is reemployed before he incurs a Break in Service, shall not have his
eligibility for continued participation in the Plan affected, or if he has met
the eligibility requirements of Section 2.01 as of his date of separation, the
determination of when he has met such requirements shall not be affected.
(b) The eligibility of an Employee who separates from employment with
the Employer and who incurs a Break in Service shall be affected as follows:
(1) An Employee who had not met the eligibility requirements of
Section 2.01 as of his date of separation, or an Employee who had met the
eligibility requirement of Section 2.01 as of his date of separation but who
had no nonforfeitable right to his Account as of such date, and whose number of
consecutive one-year Breaks in Service equals or exceeds the greater of (i)
five (5) consecutive one-year Breaks in Service, or (ii) his aggregate number
of Years of Service before such Breaks in Service, shall be considered a new
Employee on his employment recommencement date and shall commence participation
in accordance with the provisions of Section 2.01 and 2.02 without regard to
his prior service with the Employer.
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(2) An Employee (i) who had met the eligibility requirements of
Section 2.01 as of his date of separation and who had no nonforfeitable right
to his Account as of such date but whose number of consecutive one-year Breaks
in Service is less than the greater of (aa) five (5) one-year Breaks in
Service, or (bb) his aggregate number of Years of Service before such Breaks in
Service, or an Employee (ii) who has separated from employment with the
Employer and was a Participant as of his date of separation and had any
nonforfeitable right to his Account at the time of his separation, shall be
eligible for participation and shall become a Participant immediately upon his
employment recommencement without requalification under Section 2.01.
ARTICLE 3
CONTRIBUTIONS AND ALLOCATIONS
SECTION 3.01 SOURCES OF CONTRIBUTIONS AND ALLOCATION TO ACCOUNTS.
(a) Sources and Forms of Contributions. It is contemplated that both
the Employer and Employees shall make contributions to the Plan, as provided in
Sections 3.02 through 3.07 of this Article 3. Employee contributions may be
made on a before-tax basis, or as tax-free rollovers. Employer contributions
may be made on a discretionary, fixed and matching basis for all Participants.
(b) Allocation of Contributions and Individual Accounts.
Contributions made by the Employer and Employees shall be allocated to
individual Accounts maintained on the books and records of the Fund for each
Participant. Credits to Accounts shall be made in accordance with the
allocation process described in Article 3 for contributions. Credits and
charges shall be made for the allocation of Fund earnings, gains, losses, and
expenses as described in Article 4; and charges shall be made for distributions
made pursuant to Article 6. The maintenance of individual Accounts is only for
accounting purposes; except as provided otherwise in the Plan or as determined
by the Trustee in accordance with the written powers granted to the Trustee, a
segregation of the assets of the Fund to each Account shall not be required.
The fact that individual Accounts are maintained shall not be construed to mean
that any Participant or Beneficiary has title to any specific assets of the
Fund. Each Account may be further divided into separate sub-accounts, as
defined in Article 12 and as more particularly described in this Article 3, to
receive and hold contributions having a particular characterization.
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(c) Use of Suspense Account. To the extent the Plan has leveraged the
purchase of Company Stock in an exempt loan, as defined in Treasury Regulation
Section 54.4975.7(b)(1)(iii), all such shares shall be held in a special
suspense account pending their release and allocation to the Accounts of
Participants. Repayment of such exempt loan shall be made from the Employer's
Discretionary Contribution made pursuant to the provisions of Section 3.02 and
shall first be applied to accrued interest payable with respect to such
transaction and thereafter to a reduction of the principal amount of such
indebtedness. The number of shares of Company Stock to be released from the
suspense account for each Plan Year for the duration of the loan shall be, as
determined by the Employer, either (i) the number of shares held immediately
prior to the release for the then current Plan Year multiplied by a fraction,
the numerator of which is the amount of principal and interest paid for the
year and the denominator of which is the sum of principal and interest paid for
the current Plan Year and that amount to be paid for all future years, or (ii)
the formula set forth in (i) above only taking into account principal payments
and complying with the special requirements of Treasury Regulation Section
54.4975-7(b)(8)(ii).
SECTION 3.02 EMPLOYER DISCRETIONARY CONTRIBUTION.
(a) Amount. The amount of the Employer Discretionary Contribution to
the Plan, if any, for each Plan Year, shall be determined by an annual
resolution of the Employer's Board of Directors. If no such resolution is
adopted by the Board of Directors on behalf of a Plan Year, the discretionary
contribution shall be deemed to be zero for the Plan Year.
(b) Payment. The Employer's Discretionary Contribution may be made in
cash or Company Stock. Cash contributions may be applied to reduce any
indebtedness incurred by the Plan in acquiring Company Stock. When so applied,
Company Stock shall be released from the special suspense account as provided
in Section 3.01(c) and allocated to Participant Accounts pursuant to the
provisions of subsection (d), below.
(c) Deductible Limitation. In no event shall the Employer deduct, for
federal income tax purposes, a contribution to the Plan in excess of the amount
deductible for the Employer's fiscal year with respect to which the
contribution is made, as determined under Code Section 404, even though the
actual contribution may exceed such amount.
(d) Allocation of Employer Discretionary Contributions. Subject to
Section 3.08, any contributions of the Employer made for the Plan Year under
this Section 3.02 shall be allocated as of the last day of the Plan Year to and
among the Accounts of those Participants who have been credited with
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1,000 or more Hours of Service in the Plan Year and, effective for Plan Years
commencing on or after July 1, 1994, also are employed on the last day of the
Plan Year. Provided, however, in the Plan Year in which a Participant retires
(at or after age 65 or on account of total and permanent disability) or dies,
the requirements for employment on the last day of the Plan Year and 1,000
Hours of Service during the Plan Year shall be suspended and the Participant
(or deceased Participant) shall be eligible to share in any allocation of the
Employer Discretionary Contribution for such Plan Year. The Employer
Discretionary Contribution on behalf of any Plan Year shall be allocated to the
Account of each eligible Participant in the ratio of that Participant's
Compensation Points for the Plan Year to the total Compensation Points of all
Participants eligible to share in this allocation for the Plan Year.
(e) Nonforfeitability. The balance of a Participant's
Account attributable to Employer Discretionary Contributions shall become 100%
vested and nonforfeitable pursuant to the provisions of Section 5.06 (subject,
however, to investment gains and losses).
(f) Irrevocability. In no event shall any contribution by
the Employer to the Fund, or income therefrom, revert to the Employer, except
to the extent as provided in paragraph (g). All amounts paid by the Employer
to the Fund shall be used and applied for the exclusive benefit of Participants
and their Beneficiaries; provided, that for this purpose, payment of expenses
by the Fund shall be considered paid for such exclusive benefit.
(g) Recovery of Contribution. Notwithstanding any
provision of the Plan to the contrary, a contribution made to the Plan by the
Employer under this Article 3 may be returned to the Employer if: (i) such
contribution is made by the Employer by mistake of fact, provided that the
contribution is returned to the Employer within one year after payment of the
contribution; (ii) subsequent to the Effective Date the Commissioner of
Internal Revenue or his representative issues a determination letter stating
that the Plan does not initially qualify under Section 401(a) of the Code,
provided that all contributions with respect to which the letter relates are
returned to the Employer within one year after the date of denial of initial
qualification for the Plan; (iii) a deduction claimed by the Employer on its
federal income tax return under Section 404 of the Code for a Plan contribution
is subsequently denied, in whole or in part, provided that the contribution or
portion thereof for which the deduction is denied is returned to the Employer
within one year after the disallowance of the deductions; or (iv) the Plan is
terminated and there is a balance in a special suspense account created under
Section 3.08, in which case such balance, which may include forfeitures, may be
returned to the Employer.
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SECTION 3.03 EMPLOYER MATCHING CONTRIBUTION.
(a) Amount. The amount of the Employer Matching Contribution,
determined on the basis of each calendar month in the Plan Year, shall be equal
to one-half (1/2) of an eligible Participant's Before-Tax Employee
Contributions which are not in excess of 6% of Compensation. The maximum
Employer Matching Contribution for any Participant shall be equal to one-half
(1/2) of the Participant's Before-Tax Employee Contributions to all Code Section
401(k) arrangements maintained by the Employer which are not in excess of 6% of
Compensation. In the event that a Participant makes Before-Tax Contributions
to another plan, such contributions as a percentage of Compensation shall
reduce the 6% limitation of this Plan.
(b) Payment. The Employer Matching Contribution, as determined under
paragraph (a), shall generally be paid to the Fund monthly in cash or Company
Stock, but in no event shall payment be made later than the due dates
(including extensions) for the Employer's federal income tax return for the
taxable year for the Employer corresponding to the Plan Year to which the
matching contribution relates.
(c) (1) Limitation. The Employer Matching Contribution shall be
subject to the overall limit and provisions set forth in Section 3.02(c).
(2) Average Actual Contribution Percentage Test. Each Plan
Year, the Employer shall compute the average actual contribution percentage for
all Highly Compensated Employees eligible for allocations under this Section
3.03 (the "high-paid percentage") and the average actual contribution
percentage of all Non-Highly Compensated Employees (the "lower-paid
percentage"). The actual contribution percentage shall be computed for each
eligible Employee by dividing the amount of Employer Matching Contributions
made on behalf of the Employee for such Plan Year by the Participant's
Compensation for the Plan Year. The average actual contribution percentage for
each group of Employees shall be determined by the average of the actual
contribution percentages of the eligible Employees in each group. Such
percentages shall be rounded to two decimal places.
If the separate percentages of these two groups fail to satisfy one of
the tests set forth below, the Employer shall distribute to the Employee, not
later than 2 and 1/2 months following the close of the Plan Year to which such
excess contribution relates, the excess amount including attributable earnings.
Reduction of contributions to comply with the requirements of this Section
shall be made only with respect to Highly Compensated Employees. The
reductions shall be made so that the Employer Matching Contributions allocable
to those
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Highly Compensated Employees with the largest amount of Employer Matching
Contributions (when expressed as a percentage of compensation) shall be reduced
first.
For purposes of this subsection, the applicable tests shall be as follows:
(A) The high-paid percentage is not more than 1.25 times the
lower-paid percentage; or
(B) The high-paid percentage is not more than 2.00 times the
lower-paid percentage and the difference between the two percentages is
not more than two percentage points.
The actual contribution percentage of an Employee who participates in two or
more plans described in Section 401(a) of the Code maintained by the Employer
shall be the sum of the actual contribution percentages for such Employee under
each such arrangement.
For the purpose of determining the actual contribution percentage of a
Participant who is a 5-Percent Owner or one of the ten most highly-paid Highly
Compensated Employees, the Employer Matching Contributions under Section 3.03
and compensation of Family Members shall be aggregated to the extent and in the
manner provided in Treasury Regulations. Family Members shall not be
considered in determining the actual contribution percentage for Non-Highly
Compensated Employees.
At the Employer's election, the Before-Tax Employee Contributions made
pursuant to Section 3.05 and Employer Fixed Contributions made pursuant to
Section 3.04 may be taken into account in computing actual contribution
percentages in the manner provided by Treasury regulations.
(3) Multiple Use Test. Effective with respect to Plan Years
specified in Treasury Regulations, if the high-paid average actual contribution
percentage computed above exceeds 125% of the lower-paid average actual
contribution percentage and if the high-paid average actual deferral percentage
computed under Section 3.05(c) also exceeds 125% of the lower-paid average
actual deferral percentage (but in each case, the percentages otherwise satisfy
the test set forth in Section 3.05(c)), then such contributions and deferrals
shall remain in the Plan only if the aggregate limit of the multiple use test
set forth in Proposed Treasury Regulation Section 1.401(m)-2(b) is met. If
such aggregate limit is exceeded, then the Employer Matching Contributions, or
the Before-Tax Employee Contributions made by or on behalf of Highly
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Compensated Employees, shall be reduced pro-rata as the Plan Administrator
deems necessary in the same manner as set forth in Section 3.05, until such
aggregate limit is not exceeded.
(d) Nonforfeitability.
(1) The nonforfeitability of the Employer Matching Contribution
for any Plan Year shall be determined based on whether the Participant's
Targeted Compensation equals or exceeds the Social Security taxable wage base
in effect at the beginning of such Plan Year, or at the beginning of the
calendar quarter in which a new Participant becomes eligible to participate.
(2) A Participant with Targeted Compensation less than the
Social Security taxable wage base in effect at the beginning of the Plan Year
shall have a 100% vested nonforfeitable interest (subject, however, to
investment gains and losses) in the portion of his Account which is
attributable to Employer Matching Contributions at all times.
(3) If the Participant's Targeted Compensation equals or exceeds
the Social Security taxable wage base in effect at the beginning of the Plan
Year, or the calendar quarter in which a new Participant becomes eligible to
participate, the Participant shall acquire a vested nonforfeitable interest in
the portion of his Account which is attributable to Employer Matching
Contributions in accordance with Section 5.06 (subject, however, to investment
gains and losses).
For this purpose, "Targeted Compensation" means the Participant's regular
salary or wages, plus targeted incentives, including bonuses and commissions
determined by the Employer.
Notwithstanding the preceding paragraphs, the portion of a
Participant's Account which is attributable to Employer Matching Contributions
made for Plan Years beginning before July 1, 1988 shall be 100% vested at all
times (subject, however, to investment gains and losses).
(e) Recovery of Contribution. The Employer Matching Contribution
shall be subject to the same provisions set forth in Section 3.02(f) and (g).
(f) Allocation. Subject to Section 3.08, the Employer Matching
Contribution shall be allocated not later than as of the last day of the Plan
Year to and among the Accounts of those eligible Participants (as defined in
subsection (a)) who have made Before-Tax Employee Contributions
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in proportion to the qualifying Before-Tax Employee Contributions (as set forth
in subsection (a)) of each such Participant.
SECTION 3.04 EMPLOYER FIXED CONTRIBUTION.
(a) Amount. The amount of the Employer Fixed Contribution for each
Plan Year shall be equal to two percent (2%) of Participant Compensation
Points.
(b) Deductible Limitation. The Employer Fixed Contribution shall be
subject to the overall limit and provisions set forth in Section 3.02(c).
(c) Recovery of Contribution. The Employer Fixed Contribution shall
be subject to the same provisions set forth in Section 3.02(f) and (g).
(d) Allocation of Employer Fixed Contribution. Subject to Section
3.08, the Employer Fixed Contribution shall be allocated as of the last day of
the Plan Year to the Account of each eligible Participant in the ratio of that
Participant's Compensation Points for the Plan Year to the total Compensation
Points of all Participants eligible to share in this allocation for the Plan
Year. A Participant shall only be eligible to receive an allocation under this
Section if credited with 1,000 or more Hours of Service in the Plan Year and,
effective for Plan Years commencing on or after July 1, 1994, is employed on
the last day of the Plan Year.
(e) Nonforfeitability. The balance of a Participant's Account
attributable to Employer Fixed Contributions shall be 100% vested and
nonforfeitable at all times (subject, however, to investment gains and losses).
SECTION 3.05 BEFORE-TAX EMPLOYEE CONTRIBUTIONS.
(a) Amount. A Participant may direct the Employer to make cash
contributions to the Participant's Account (which contributions are not
includable in the Participant's gross income for federal income tax purposes
and which may or may not be includable for state income tax purposes) in any
whole percentage, with the minimum such contribution equal to not less than 1%
of Compensation. The amount of such elective deferrals to the Plan for any
calendar year shall not exceed $7,000 multiplied by any cost of living
adjustment factor prescribed by the Secretary of Treasury under Section 415(d)
of the Code for years beginning after December 31, 1986. The amount of such
Before-Tax Employee Contributions, when combined with the Before-Tax Employee
Contributions of other Participants and the Employer's Contributions under
Section 3.02, 3.03 and 3.04 shall not exceed the deduction limitations
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of Code Section 404, and shall not exceed the individual limitation on annual
additions as set forth in Section 3.08 of this Plan. Employer Contributions
and Before-Tax Employee Contribution allocable to the Employee under other Code
Section 401(a) defined contribution plans maintained by the Employer shall also
be taken into effect for purposes of these limitations. Contributions under
this Section shall be made by the Participant's filing of a written election
with the Employer, on a form prescribed by the Employer, specifying the
percentage of his compensation to be contributed by the Employer on the
Participant's behalf. A Participant's election shall remain in effect until
revoked or changed by the Participant. A Participant may increase or decrease
the amount of deferral at any time by filing a new written election with the
Employer; such new election shall become effective as soon as administratively
practicable after the Employer's receipt of a completed election form. A
Participant may revoke his or her election at any time; and such election shall
become effective as of the following pay period. In the event a Participant
makes an elective deferral in an amount exceeding the above limitation, such
excess amount and the income allocable thereto, shall be distributed no later
than the April 15th following the calendar year to which such excess deferral
relates. Each Participant shall be permitted to instruct the Plan
Administrator in writing no later than the March 1 following the close of the
calendar year to which the excess deferral relates specifying the Participant's
excess deferral amount attributable to the Plan for the preceding calendar
year.
(b) Payment. Before-Tax Employee Contributions directed by
Participants under this Section shall be made during the Plan Year by payroll
deductions, salary reductions or such other procedures established by the
Employer and generally shall be transferred to the Fund on a monthly basis.
(c) (1) Limitation. Each Plan Year, the Employer shall compute the
Actual Deferral Percentage ("ADP"), as defined below, for all Highly
Compensated Employees eligible for allocations under this Section 3.05 (the
"high-paid percentage") and the ADP of all Non-Highly Compensated Employees
(the "lower-paid percentage").
Subject to the family aggregation rules below, the ADP shall be computed
for each eligible Participant as set forth in Code Section 401(k)(3) and
applicable Treasury regulations by dividing the Participant's compensation for
the Plan Year into the total amount of his Before-Tax Contributions made under
this Section during the Plan Year, including any Excess Deferrals but excluding
Before-Tax Contributions that are taken into account under the ACP test set
forth in Section 3.03(c) (provided that this ADP test is satisfied both with
and without exclusion of these Before-Tax Contributions). A portion or all
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of the Employer Matching and Fixed Contributions allocated to each
Participant's Account for the Plan Year may also be used in the ADP calculation
hereunder to the extent they are not used under the ACP test under Section
3.03(c). For purposes of this Section 3.05(c), the term "compensation" means
compensation for service performed for the Employer which is currently
includible in the Participant's gross income as provided in Code Section
414(s).
If the separate percentages for these two groups fail to satisfy one of
the tests set forth below, the Employer shall return to the Employees such
excess contributions and attributable earnings not later than 2 and 1/2 months
following the close of the Plan Year to which such excess amounts relate.
Attributable earnings for purposes of this Section 3.05(c) are portions of
income allocated to the Participant's Account for the Plan Year, computed based
upon the ratio of such excess contributions to the total Account balances.
Excess contributions shall be treated as the first contributions made during
the Plan Year. Reduction of contributions to comply with the tests set forth
below shall be made only with respect to Highly Compensated Employees.
Reductions shall also be made in such a manner that the Before-Tax Employee
Contributions of those Highly Compensated Employees with the largest Before-Tax
Employee Contributions (when expressed as a percentage of compensation) shall
be reduced first.
For purposes of this subsection, the applicable tests shall be as follows:
(A) The high-paid percentage is not more than 1.25 times
the lower-paid percentage; or
(B) The high-paid percentage is not more than 2.00 times
the lower-paid percentage, and the difference between the two percentages
does not exceed two percentage points.
Pursuant to Code Section 401(k)(3)(A), the deferral percentage of an Employee
who participates in two or more cash or deferred arrangements maintained by the
Employer shall be the sum of the deferral percentages for such Employee under
each such arrangement.
For the purpose of determining the actual deferral percentage of an
Employee who is a 5-Percent Owner or one of the ten most highly-paid Highly
Compensated Employees, the Before-Tax Employee Contributions of family members
(as such term is defined in Section 414(q)(6)(B) of the Code) shall be
aggregated to the extent and in the manner provided in Treasury
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Regulations. Family members shall not be considered in determining the actual
deferral percentages for Non-Highly Compensated Employees.
(2) Limits on Individual Before-Tax Employee Contributions. On
or before March 1st of each year, each Participant shall notify the Plan
Administrator in writing of any Before-Tax Employee Contributions made under
this Plan (and under any other plans in which he participates) in excess of
$7,000 (as adjusted annually in accordance with the procedures of Code Section
415(d)) during the Participant's taxable year ending before such date and shall
specify the amount to be refunded to him. The amount in excess of the
foregoing limit shall be included in the Participant's gross income and shall
be refunded to the Participant by the Trustee, along with any income of the
Fund allocable to such amount, not later than April 15th immediately following
the March 1st notice deadline. The allocable income which is refunded to the
Participant shall be treated as earned and received in the taxable year in
which the excess contribution was made. Any excess Before-Tax Employee
Contribution made by a Highly Compensated Employee, even though refunded under
this paragraph (4), shall be included in the average ADP tests of paragraph (1)
of this Section 3.05(c).
(d) Reversion. Before-Tax Employee Contributions shall be
irrevocable, subject to paragraph (c), above and the exceptions provided in
Sections 3.02(f) and (g), except that any such contributions, other than those
made by mistake of fact in excess of the amount of a Participant's election for
such contributions, which are returned to the Employer, and any earnings
thereon, shall be distributed in cash to the Participant on whose behalf the
contributions were made.
(e) Allocation. Subject to Section 3.08, the Trustees shall allocate
a contribution made pursuant to this Section to the Participant's Account as of
the accounting date immediately following the date the contribution was made.
(f) Nonforfeitability. The balance of a Participant's Account
attributable to Before-Tax Employee Contributions shall be 100% vested and
nonforfeitable at all times (subject, however, to investment gains and losses)
and shall be payable under the Plan in accordance with the applicable
provisions of the Plan in the same manner as amounts derived from Employer
Contributions.
SECTION 3.06 AFTER-TAX EMPLOYEE CONTRIBUTIONS.
(a) No New Contributions. No new After-Tax Employee Contributions
shall be accepted under the Plan after December 31, 1986.
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(b) Withdrawals. A Participant may, upon 90 days advance written
notice to the Plan Administrator, withdraw After-Tax Employee Contributions
made under the Plan (or Company Stock purchased with After-Tax Employee
Contributions under the former Employee Stock Ownership Plan of the Company),
or the lesser of the dollar amount of his aggregate After-Tax Employee
Contributions, plus earnings thereon, if any, or the current value attributable
to such contributions. The current value of a Participant's Account
attributable to his After-Tax Employee Contributions may be determined at any
time by the separate accounting balance of his Employee Contribution Account,
or if separate accounting is not maintained, may be determined by multiplying
his total Account balance by a fraction (1) the numerator of which is the total
amount of the Participant's After-Tax Employee Contributions made under this
Section less withdrawals, and (2) the denominator of which is the total amount
described in (1) above plus the total contributions made under the Plan by the
Employer on behalf of the Participant less withdrawals, plus any rollover
contributions. Any earnings and gains on After-Tax Contributions shall be
distributed in accordance with the provisions of Article 6.
(c) Nonforfeitability. The balance of a Participant's Account
attributable to After-Tax Employee Contributions shall be 100% vested and
nonforfeitable at all times (subject, however, to investment gains and losses)
and shall be payable under the Plan in accordance with the applicable
provisions of the Plan in the same manner as amounts derived from Employer
Contributions, except to the extent the Participant has exercised the
withdrawal privilege under paragraph (b) of this Section.
SECTION 3.07 ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS.
(a) Eligibility. An Employee may pay to the Fund, or arrange for the
direct transfer to the Fund from another qualified retirement plan, provided
that in each case the Plan Administrator agrees, a contribution of an amount
that qualifies for rollover treatment under Code Section 402(c) or
408(d)(3)(A)(ii).
(b) Payment. An Employee's rollover contribution to the Plan, other
than a direct transfer, must be made to the Fund not later than the 60th day
after the day on which he or she received the distribution being rolled over.
(c) Limitation. An Employee may not roll over to the Plan: (1) a
contribution which exceeds in value the amount received (or the proceeds of the
sale of property received) in
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a distribution described in paragraph (a); (2) any amounts representing
non-deductible employee contributions made under any other plan and in which
the Employee has other than a zero income tax basis; (3) any amount
representing a lifetime annuity payment or a periodic distribution over a
period of ten years or more as described in Code Section 402(c)(4)(A); or (4)
any amount that is a required distribution under Code Section 401(a)(9).
(d) Reversion. Rollover contributions may in no event revert to the
Employer.
(e) Allocation. The Trustee shall allocate a contribution made
pursuant to this section to a Rollover Contribution Account as of the
Accounting Date immediately following the date the contribution was made.
Prior to such Accounting Date, or if the Employee has not yet become a
Participant under the Plan, any such contribution shall be allocated by the
Trustee to a temporary account, and as of the next Accounting Date, or if
later, as soon as the Employee does become a Participant, any such amount in
this temporary account shall become a regular Rollover Contribution Account
which shall be part of the Participant's Account.
(f) Vesting. A Participant's Rollover Contribution Account shall be
100% nonforfeitable at all times (subject, however, to investment gains and
losses and allocable expenses).
(g) Investment. Rollover contributions made by an Employee and
allocated to a Rollover Contribution Account shall be invested pursuant to the
Employee's investment direction permitted under Section 4.01.
SECTION 3.08 LIMITATIONS ON ANNUAL ALLOCATIONS TO ACCOUNTS.
(a) Single Plan Limitation. Notwithstanding any provision of the Plan
to the contrary, the total additions made to the Account of any Participant in
any limitation year shall not exceed the lesser of:
(1) the defined contribution dollar limitation,
or
(2) 25% of the Participant's compensation for such limitation
year,
except that such defined contribution dollar limitation shall be adjusted
automatically, without the necessity of a specific Plan amendment whenever the
Secretary of the Treasury increases
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this dollar limitation to reflect cost of living adjustments in accordance with
Code Section 415(d) and the regulations thereunder.
For purposes of this Section, the following terms have the meanings
indicated:
(1) The term "total additions" means with respect to each limitation year,
the sum of
(a) Employer Contributions,
(b) Employee Contributions, and
(c) forfeitures
allocated to the Participant's Account.
(2) The term "defined contribution dollar limitation" shall mean
$30,000 or, if greater, 1/4 of the defined benefit dollar limitation set forth
in Code Section 415(b)(1)(A) as in effect for the limitation year.
(3) The term "limitation year" means the Plan Year.
(4) The term "compensation" means, with respect to each
limitation year, the wages, salaries, fees for professional services, other
amounts received for personal services rendered in the course of employment
with the Employer and other taxable, compensatory benefits received from the
Employer, and excluding Before-Tax Employee Contributions.
(b) Multiple Plans. In the event that the Employer maintains one or
more other defined contribution plans, as defined by Section 3(34) of ERISA, in
addition to this Plan, or one or more defined benefit plans, as defined by
Section 3(35) of ERISA, and any such plan covers one or more Participants in
this Plan, then the limitations of paragraph (a) above shall be applied by
treating all defined contribution plans, including this Plan, as a single
defined contribution plan, and together the plans (whether defined contribution
or defined benefit) shall not exceed the limitations set forth in Code Section
415(e).
(c) Remedying Excess Total Additions. If for any limitation year, as
a result of the allocation of forfeitures or a reasonable error in estimating a
Participant's Compensation, or on account of other limited facts and
circumstances that the Commissioner of Internal Revenue finds to justify the
availability of the rules set forth in this paragraph (c), the total additions
to a Participant's Account
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exceed the applicable limitations as set forth under the foregoing paragraphs
of this Section, then, except as provided in (4) below, the excess shall be
allocated and reallocated to other eligible Participants as an additional
Employer contribution for the limitation year. If the total excess additions
cannot be allocated during the year in accordance with the foregoing procedure
without exceeding the applicable limitations of this Section for one or more
Participants, any remaining amount shall be held unallocated in a special
suspense account to be allocated to eligible Participants in the succeeding
limitation year or years; provided, however, that:
(1) no Employer Contributions shall be made in such succeeding
limitation year or years until such special suspense account is exhausted by
allocations and reallocations;
(2) effective March 31, 1992, the special suspense account shall
share in investment gains and losses; and
(3) the amounts in the suspense account shall be allocated as
soon as possible without violating the limitations of this Section;
(4) if it is necessary to adjust the amount of Before-Tax
Employee Contributions to stay within the limitations of this Section, the
necessary amount shall be added to a suspense account earmarked for the
Participant and allocated to the Participant's Account in the immediately
succeeding limitation year before any other additions thereto.
(d) Notice to Participants. The Employer shall advise affected
Participants of any adjustments to their Accounts required by the limitations
under this Section.
(e) Additional Adjustments. The Employer shall have the right to make
any other adjustments to the Account of any Participant, or to the total
additions to any such Account, which may be required in order to prevent
disqualification of the Plan or any other plan maintained by the Employer under
Code Section 415.
ARTICLE 4
INVESTMENT AND VALUATION OF ACCOUNTS
SECTION 4.01 INVESTMENT ELECTIONS.
(a) Election Authority. Subject to the overall investment authority
of the Trustee as set forth in Article 8,
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Employer and Employee Contributions allocable to a Participant's Account shall
be subject to the investment elections provided in subsection (b), as modified
by subsection (c) of this Section 4.01.
(b) Investment Options. A Participant who is in active employment of
the Employer, or who ceases to be so employed but whose Account is not
immediately distributed, may invest all or part of his Account in Company
Stock, a money market fund or in any one or more of such pooled investment fund
or funds as are made available from time to time by the Trustee at the
direction of the Company. The Company may from time to time change the
available investment funds. In such event, the Company shall give reasonable
notification to Participants of such change. In the absence of an election by
the Participant, the Account shall be invested in the money market fund.
Except as otherwise provided by law, the Trustee shall have no fiduciary
responsibility with respect to the selection of such pooled investment funds
nor in connection with the investment choices made by Participants or dictated
by the Plan. The Trustee's only responsibility shall be with respect to the
individual investments of any pooled investment funds that are offered and
operated by the Trustee and made available for Participant investment under the
Plan, and which are not controlled by an investment manager pursuant to Section
8.04.
(c) Investment Limitations. Participants shall be permitted to direct
the investment of their Account balance until distribution of the entire
nonforfeitable Account balance. Participant-directed investments shall be made
in increments of 10% of the Participant's Account. In the absence of
investment direction, a Participant's Account shall be invested in the money
market fund. The Employer may impose any restrictions as to availability,
transfers in and out and other operating conditions required by a particular
investment fund or in order to accommodate changes in the investment funds
offered under the Plan.
(d) Method of Election. Each Participant shall indicate his election
for investment of his Account by following the procedures established by the
Trustee or the Company.
(e) Frequency of Election. With respect to an existing Account
balance, a Participant may modify an existing election at any time (but not
more often than once a day) by following the procedures established by the
Trustee. With respect to future contributions, a Participant may modify his
investment election at any time (but not more often than once a day) by
following the procedures established by the Trustee. In the absence of a new
election, future contributions shall be
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invested in the same proportion as specified in the Participant's most recent
election. The Trustee shall transfer amounts from one fund to another fund as
may be necessary to appropriately reflect the aggregate transfer transactions,
and the Trustee shall cause the necessary entries to be made in the
Participant's Accounts in the funds and reconcile offsetting transfer
elections.
(f) ERISA Section 404(c) Compliance. The Plan and its operation are
intended to comply with the provisions of ERISA Section 404(c) and the
regulations thereunder applicable to participant directed investments. The
Company may appoint one or more fiduciaries to assist in compliance with these
provisions, which fiduciary or fiduciaries shall generate and disseminate to
Participants the information required by the regulations. Except as provided
by ERISA Section 404(c) and the regulations thereunder, the Trustee shall have
no fiduciary responsibility with respect to the selection of the Plan's
investment funds, and neither the Company, the Trustee, nor any other fiduciary
with respect to the Plan shall have any liability in connection with any losses
that are the direct and necessary result of the investment choices made by
Participants. The Trustee's only responsibility shall be with respect to the
individual investments of any investment funds that are offered and operated by
the Trustee and made available for Participant investments under the Plan, and
which are not controlled by an independent investment manager. The only
responsibility of the Company shall be to review periodically, in its capacity
as Plan Administrator, the performance of the investment funds made available
under the Plan and to change the available funds offered when appropriate.
SECTION 4.02 VALUATIONS.
(a) Frequency of Valuations. The Employer shall direct the Trustee to
value the Fund at least quarterly on regular accounting dates specified by the
Employer.
(b) Valuation at Fair Market Value. All assets shall be valued by the
Trustee on the basis of fair market value, with such determination made on the
basis of rules established by the Employer.
(c) Adjustment for Earnings, Gains and Losses. Each Participant's
Account shall be adjusted as of each Accounting Date for earnings, gains and
losses on the investments of that Account. Such adjustment shall be determined
by an allocation of aggregate net earnings, gains, losses, and expenses of the
respective funds based upon the relationship that the amount of the
Participant's Account invested in the respective fund bears to the total fund
balance.
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(d) Allocation of Employer and Employee Contributions. After the
valuation and adjustment procedures of paragraphs (b) and (c) of this Section,
Employer and Employee Contributions made since the last accounting date shall
be allocated to the respective Accounts of Participants in accordance with the
procedures specified in Article 3.
SECTION 4.03 STATEMENTS OF VALUE OF PARTICIPANTS' ACCOUNTS. The
Employer shall, not less frequently than quarterly, deliver to each Participant
a statement setting forth the value of the Participant's Account, including a
breakdown of the various sub-accounts.
ARTICLE 5
NONFORFEITABLE RIGHTS TO BENEFITS
SECTION 5.01 NORMAL RETIREMENT. A Participant who attains Normal
Retirement Age may retire as of the first day of the month coincident with or
following his attainment of such age, which day shall be called the
Participant's Normal Retirement Date. A Participant who attains Normal
Retirement Age shall have a nonforfeitable right to his entire Account balance
and shall be entitled to distribution of such balance at the time and in the
manner provided by Article 6.
SECTION 5.02 ATTAINMENT OF AGE 59-1/2. A Participant who has
attained age 59-1/2 may, upon written application to and approval by the
Employer, receive a distribution of all of his nonforfeitable Account balance
even though there has been no termination of employment. Any such application
shall indicate the requested date and form of distribution and shall be
processed in a manner consistent with the provisions of Article 6. Only one
such distribution shall be permitted under this Section after the Participant's
attainment of age 59-1/2.
SECTION 5.03 DELAYED RETIREMENT. A Participant who continues to
be actively employed by the Employer after his Normal Retirement Age shall,
subject to Section 2.02 (c), continue to be a Participant in the Plan as long
as he remains so employed by the Employer. Such a Participant may retire as of
the first day of any month after his Normal Retirement Age, which day shall be
called his Delayed Retirement Date. Such a Participant shall have a
nonforfeitable right to his entire Account balance at all times after his
Normal Retirement Age and shall be entitled to distribution of such balance at
the time and in the manner specified pursuant to Article 6.
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SECTION 5.04 DISABILITY RETIREMENT.
(a) A Participant who is determined by the Employer to be under a
total and permanent disability shall be considered to have taken a disability
retirement as of the first day of the month following the month in which the
Employer determines that the total and permanent disability began. Such date
shall be called the Participant's Disability Retirement Date. For purposes of
this Section, a Participant shall be deemed by the Employer to be under a total
and permanent disability when on the basis of proof satisfactory to the
Employer, the Employer finds that the Participant is prevented from engaging in
any occupation or employment for wage or profit (for which he is suited by
education, training or experience) as a result of bodily injury or disease,
either occupational or nonoccupational in origin, except such employment as is
found by the Employer to be for the purposes of rehabilitation, that such
disability has been continuous for at least 90 days, and that such disability
will be permanent and continuous during the remainder of the Participant's
life.
(b) A Participant shall not be deemed to be under a total and
permanent disability if, on the basis of proof satisfactory to the Employer,
the Employer finds that the Participant's incapacity consists of chronic
alcoholism or addiction to narcotics, or that such incapacity was contracted,
suffered or incurred while he was engaged in a felonious enterprise or resulted
therefrom or resulted from an intentionally self-inflicted injury, or resulted
from service in the armed services of the United States or another country for
which a service connected government disability pension is payable. The
Employer may require the Participant to submit to medical examinations for the
purpose of verifying his total and permanent disability. A Participant who
takes a disability retirement as provided in this Section shall have a
nonforfeitable right to his entire Account balance and shall be entitled to
distribution of such balance at the time and in the manner provided by Article
6. In the event the Employer determines at any time that a person receiving a
benefit under this Section is no longer under a total and permanent disability,
the benefit under this Section, if being paid in installments, shall cease, and
such person's benefit shall be redetermined in accordance with the other
applicable Sections of the Plan, taking into account the amount of benefits
already received by such person under this Section. Provided, however, that if
the Participant subsequently is absent from work for a period of one month
because of the same disability, distributions from the Participant's Account
may resume subject to the foregoing provisions of this Section.
SECTION 5.05 DEATH. In the event of a Participant's death prior
to his separation from employment with the Employer, the entire balance of such
Participant's Account
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shall become nonforfeitable and payable to the Participant's Beneficiary as
designated under the Plan. Distribution of such balance shall be made at the
time and in the manner provided by Article 6.
SECTION 5.06 TERMINATION OF EMPLOYMENT PRIOR TO DEATH OR
ELIGIBILITY FOR ANY RETIREMENT.
(a) A Participant who terminates employment with the Employer and who
does not have a nonforfeitable right to his entire Account balance at the date
of his termination under any previous Section of this Article 5, shall be
entitled to a distribution from the Plan equal to the sum of (1) the nonfor-
feitable portion of the Participant's Employer Contribution Account balance
attributable to Employer Discretionary Contributions, and Employer Matching
Contributions which were not nonforfeitable at the time made pursuant to the
provisions of Section 3.03(d), determined by multiplying the Account balance
attributable to such amounts by the Participant's nonforfeitable percentage as
determined under paragraph (b) of this Section, (2) the balance of his Rollover
Contribution Account, if any, (3) the balance of his Before-Tax and After-Tax
Employee Contribution Accounts, if any, (4) the balance of his Employer
Contribution Account that is attributable to Employer Fixed Contributions and
Employer Matching Contributions which were nonforfeitable at the time made
pursuant to the provisions of Section 3.03(d), and (5) the nonforfeitable
portion of the Participant's Employee Stock Ownership Account. Such a
Participant shall be entitled to distribution at the time and in the manner
provided by Article 6.
(b) The nonforfeitable percentage referred to in paragraph (a) shall
be determined according to the vesting schedule in (1) below for any
Participant who is credited with at least one Hour of Service on or after July
1, 1989 and under the vesting schedule in (2) for any Participant who is not
credited with any Hours of Service after June 30, 1989.
Nonforfeitable
(1) Years of Service Percentage
---------------- --------------
Less than 1 0%
1 10%
2 20%
3 30%
4 40%
5 60%
6 80%
7 or more 100%
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Nonforfeitable
(2) Years of Service Percentage
---------------- --------------
Less than 1 0%
1 10%
2 20%
3 30%
4 40%
5 50%
6 60%
7 70%
8 80%
9 90%
10 or more 100%
(c) For purposes of this Section, the term "Years of
Service" shall have the meaning specified in Article 7. Provided, that, only
"Years of Service" beginning on and after July 1, 1974 shall be given effect.
(d) Forfeitures arising as a result of the application of
subparagraph (b) of this Section shall, after the Participant has incurred a
Break in Service, be treated and allocated as an Employer contribution under
Section 3.02(d). However, in addition to the 1,000 Hours of Service
requirements therein set forth, a Participant shall only be entitled to an
allocation of such forfeitures if he is also employed on the last day of such
Plan Year. Additionally, for all contribution and forfeiture purposes under
the Plan, a Participant who has terminated employment, but has been awarded
severance pay, shall be deemed to meet the last day employment rule if the
service credited pursuant to Section 12.17(d) would cause such requirement to
be satisfied.
ARTICLE 6
DISTRIBUTION OF BENEFITS
SECTION 6.01 DATE DISTRIBUTION IS TO COMMENCE OR BE MADE.
Distribution of benefits from an Account which has become a Fixed Credit
Account under Section 6.04 shall commence or be made to the Participant (or to
his Beneficiary) as of the date elected, or deemed elected, as the case may be,
under Section 6.02.
SECTION 6.02 DISTRIBUTION OPTIONS.
(a) Notice of Distribution Options. Each Participant (or in the case
of death of a Participant, each Beneficiary) entitled to receive benefits from
a Fixed Credit Account shall
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be notified in writing by the Plan Administrator of the distribution options
available to such Participant (or Beneficiary) under the Plan. Such
notification shall be made at such time as is required by regulations under
ERISA, or in the absence of regulations, at such time as the Plan Administrator
deems practical under the circumstances. The Plan Administrator shall provide
with such notification a form or forms on which the Participant (or
Beneficiary) may apply for benefits and elect a distribution option.
(b) Election. Subject to the restrictions in paragraphs (e), (f) and
(g) below, and the approval of the Plan Administrator, each Participant shall
be entitled to elect, by a written election on a form prescribed by and filed
with the Plan Administrator prior to the commencement of benefits, the
distribution option by which the nonforfeitable benefits of his Fixed Credit
Account shall be distributed and the date on which payments under the
distribution option should commence or be made. Furthermore, in the case of
death of a Participant, and subject to the restrictions in paragraphs (e), (f)
and (g) below, the Participant's Beneficiary as designated under the Plan shall
be entitled to indicate, in a written notice on a form prescribed by and filed
with the Plan Administrator, a preference as to the form and date of
distribution of the deceased Participant's Fixed Credit Account. The Plan
Administrator, upon receipt of forms filed with it pursuant to this Section,
shall promptly direct the Trustee as to the time and manner of distribution.
Distribution of a Participant's benefit may be made in cash or Company Stock or
both, provided, however, that if a Participant or Beneficiary so demands, such
benefit shall be distributed only in the form of Company Stock. Prior to
making a distribution of benefits, the Administrator shall advise the
Participant or his Beneficiary, in writing, of the right to demand that
benefits be distributed solely in Company Stock. If a Participant or
Beneficiary demands that benefits be distributed solely in Company Stock,
distribution of a Participant's benefit will be made entirely in whole shares
or other units of Company Stock. Any balance in a Participant's other
investments Accounts will be applied to acquire for distribution the maximum
number of whole shares or other units of Company Stock at the then fair market
value. Any fractional unit value unexpended will be distributed in cash. If
Company Stock is not available for purchase by the Trustee, then the Trustee
shall hold such balance until Company Stock is acquired and then make such
distribution.
(c) Options. The following shall be the available distribution options:
(1) A single lump sum distribution; or
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(2) Periodic payments for a specified number of years not in
excess of 10, in which event the unpaid balance at the end of each Plan Year
shall be credited or charged, as the case may be, with any earnings and gains
or losses experienced on such unpaid balance. The amount of such distributions
shall be determined by multiplying the balance in the Fixed Credit Account by a
fraction wherein the numerator shall be one and the denominator shall be the
number of years remaining in the payout period selected. In the event of the
Participant's (or Beneficiary's) death prior to exhaustion of the Fixed Credit
Account, any unpaid balance shall be paid to the Participant's Beneficiary (or
next designated Beneficiary in the case of the death of the prior Beneficiary),
in a single lump sum payment or in periodic installments over the remainder of
the 10 year term, as the Beneficiary may elect in accordance with the foregoing
provisions of this Article.
(e) Distribution of Company Stock Account Balance. The following rules
shall apply with respect to the distribution of shares of Company Stock
acquired with the proceeds of an exempt loan:
(1) If the distribution is due to the Participant's retirement or
death, and unless the Participant elects otherwise, distribution must be made
within one year after the Plan Year in which occurs the Participant's
retirement or death;
(2) If the distribution is for any reason other than the
Participant's retirement or death, distribution must be made, unless the
Participant elects otherwise, within one year after the fifth Plan Year
following the Plan Year in which occurred the Participant's termination of
employment (except that this clause shall not apply if the Participant is
reemployed by the Employer before distribution is required hereunder); and
(3) If the Participant's Account consists of Company Stock
acquired with the proceeds of an exempt loan, distribution of such Company
Stock may be postponed until such exempt loan has been fully repaid.
(4) If a distribution is one to which Code Sections 401(a)(11)
and 417 do not apply, such distribution may commence less than 30 days after
the notice required under Treasury Regulations 1.401(a)-11(c) is given,
provided that;
(A) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect
a distribution (and, if applicable, a particular distribution option),
and
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(B) the Participant, after receiving the notice,
affirmatively elects a distribution.
(5) All distributions shall be made in a single lump sum payment
of the amount distributable.
(6) All distributions shall be made in whole shares of Company
Stock (provided, that the distribution of an interest in a fractional share
shall be made in cash). However, a Participant may elect to have his or her
vested Account balance distributed in cash.
(7) Except as provided in paragraph (g), no Company Stock
acquired with the proceeds of an exempt loan may be subject to a put, call, or
other option, or buy-sell or similar arrangement when held by and when
distributed from the Fund, whether or not the Plan is then an ESOP. The
protections and rights granted in this Section are nonterminable, and such
protections and rights shall continue to exist under the terms of this Plan so
long as any Company Stock acquired with the proceeds of an exempt loan is held
by the Fund or by any Participant or other person for whose benefit such
protections and rights have been created, and neither the repayment of such
loan nor the failure of the Plan to be an ESOP, nor an amendment of the Plan
shall cause a termination of said protections and rights.
(f) Restrictions. Subject to any designation made on or before
December 31, 1983 pursuant to Section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act of 1982, and for Plan years beginning after December 31,
1984, distributions under this Article 6 shall be subject to the following
restrictions where applicable.
(1) No Participant (or Beneficiary) may elect a distribution date
which is earlier than 30 days following the date on which the Participant's
Account becomes a Fixed Credit Account pursuant to Section 6.04;
(2) Unless the Employer agrees to shorter periods, no
distribution shall commence or be made prior to the expiration of 60 days
following the date the Participant's Account becomes a Fixed Credit Account, or
prior to 30 days following the date the Participant's (or Beneficiary's)
election form is received by the Employer, or prior to 10 days following the
Trustee's receipt of the Employer's direction as to time and manner of
distribution, whichever is latest notwithstanding the foregoing, if a
distribution is one to which Code Sections 401(a)(11) and 417 do not apply,
such distribution may commence less than 30 days after the notice required
under Treasury Regulations 1.401(a)-11(c)(1) is given, provided that;
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(A) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect
a distribution (and, if applicable, a particular distribution option),
and
(B) the Participant, after receiving the notice,
affirmatively elects a distribution.
(3) Notwithstanding any other provision of the Plan to the
contrary, unless a Participant elects otherwise in writing, in no event shall
distribution of a Participant's Fixed Credit Account commence or be made later
than the sixtieth day after the close of the Plan Year in which occurs the
latest of the following events: (a) the date on which the Participant attains
age 65, (b) the date which is the tenth anniversary of the date the Participant
commenced participation in the Plan, (c) the date the Participant terminates
employment with the Employer, or (d) the date specified by the Participant in a
written election;
(4) Any distribution made to a Participant (excluding
distributions to an alternate payee pursuant to a qualified domestic relations
order as defined in ERISA Section 206(d)(3)(B), or hardship distributions which
do not exceed that amount qualified as eligible medical expenses under Code
Section 213) prior to his attainment of age 59-1/2, for any reason other than
distributions made after the Employee's death, distributions made on account of
disability as defined in Code Section 72(m)(7), certain distributions of excess
matching contributions and excess deferrals of Before-Tax Employee
Contributions, or distributions in the form of a series of substantially equal
periodic payments for the life of the Employee, shall be subject to a 10%
penalty tax as provided in Code Section 72(t). Distributions which are
rolled-over to an IRA or which constitute a return of After-Tax Employee
Contributions made prior to January 1, 1987 shall not be subject to this
penalty tax; notwithstanding the foregoing, to the extent that a distribution
is attributable to assets that have been invested, at all times, in Employer
securities that satisfied the diversification rules of Section 7.07 for the
five Plan Year period immediately preceding the Plan Year in which the
distribution occurs, the 10% penalty tax described in this paragraph shall not
apply. This exception to the 10% penalty tax on early distributions shall only
apply to amounts distributed before January 1, 1990.
(5) Each Participant's Account balance must be distributed to him
in full no later than the April 1st following the calendar year in which he
attains age 70-1/2 ("Required Distribution Date"), except that the Required
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Distribution Date of any Participant (other than a 5-Percent Owner described in
the next sentence) who attained age 70-1/2 prior to January 1, 1988 shall be
the April 1st following the calendar year in which he retires; any Participant
who at any time during or after the Plan Year in which he attains age 66-1/2 is
or becomes a 5-Percent Owner shall have, as his Required Distribution Date, the
April 1st following the calendar year in which he attains age 70-1/2.
Distributions shall be made in accordance with regulations prescribed by the
Secretary of the Treasury over a period not exceeding the life of the
Participant or over the lives of the Participant and his Beneficiary (or over a
period not exceeding the life expectancy of the Participant or the life
expectancy of the Participant and Beneficiary). If the Participant dies after
distributions have begun but before his entire nonforfeitable Account balance
has been distributed, the remaining amount shall be distributed to the
Participant's Beneficiary at least as rapidly as under the method of
distribution in effect on the date of the Participant's death. A Beneficiary
receiving payments under this paragraph may request that payments be
accelerated.
(6) If a Participant dies before distribution of his
nonforfeitable Account balance has commenced, or if the Participant's surviving
spouse dies before distribution of the nonforfeitable Account balance has
commenced to such surviving spouse, then the entire nonforfeitable Account
balance must be distributed to the Participant's Beneficiary within five years
of the Participant's death (or the death of his surviving spouse). Provided,
full distribution need not be made within five years with respect to any
portion of the deceased Participant's Account which is payable to a Beneficiary
of the Participant and which will be distributed over the lifetime of the
Beneficiary, over a period not exceeding the Beneficiary's life expectancy (in
accordance with regulations prescribed by the Secretary of the Treasury),
provided that distributions to the Beneficiary begin within one year of the
Participant's date of death (or such later date as the Secretary of the
Treasury may prescribe by regulations). Where the Beneficiary is the
Participant's surviving spouse, the required starting date for the distribution
shall not be earlier than the date the Participant would have attained age
70-1/2; and further, where the Beneficiary is the Participant's surviving
spouse, the foregoing rules of this paragraph (viii) shall be applied as if the
spouse were the Participant in the event that the spouse dies before
distributions actually begin.
(7) In no event shall any distribution from a Participant's
Account, other than a withdrawal of After-Tax Employee Contributions under
Section 3.06 or a hardship distribution under Section 7.01, be made earlier
than: (A) the Participant's retirement, death, disability, separation from
service, or attainment of age 59-1/2; (B) the termination of
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the Plan pursuant to Section 10.02 without establishment of a successor plan;
(C) the date of sale by the Employer of substantially all of its assets to a
corporation in whose employment the Participant continues; or (D) the date of
sale by the Employer of a subsidiary in whose employment the Participant
continues.
(8) In no event shall any provision of this Article 6 be
construed so as to allow any Participant to create a death benefit which is
more than incidental within the meaning of Treasury Regulation subsection
1.401(a)-14(b)(3).
(g) Put Option.
(1) If Company Stock is distributed to a Participant and such
Company Stock is not readily tradeable on an established securities market, the
Participant has a right to require the Company to repurchase the Company Stock
distributed to such Participant under a fair valuation formula. For purposes
of this Section, the term "established securities market" means a securities
exchange registered under Section 6 of the Securities Exchange Act of 1934 (15
U.S.C. 78f) or that is quoted on a system sponsored by a national securities
association registered under Section 15A(b) of the Securities Stock Exchange
Act (15 U.S.C. 780). Such Stock shall be subject to the provisions of
paragraph (c) of this Section.
(2) Similarly, Company Stock which is publicly traded and subject
to a trading limitation must be subject to a put option. For purposes of this
paragraph, a "trading limitation" on Company Stock is a restriction under any
Federal or State securities law or any regulation thereunder, or a permissible
agreement affecting the Company Stock which would make the Company Stock not as
freely tradeable as stock not subject to such restriction.
(3) The put option must be exercisable only by the Participant,
by the Participant's beneficiary, or by a person (including an estate or its
distributee) to whom the Company Stock passes by reason of the Participant's
death. (Under this paragraph "Participant" means a Participant and the
beneficiaries of the Participant under the Plan.) The put option must permit a
Participant to put the Company Stock to the Company. Under no circumstances
may the put option bind the Plan. However, it shall grant the Plan an option
to assume the rights and obligations of the Company at the time that the put
option is exercised.
(4) The put option shall commence as of the day following the
date the Company Stock is distributed to the former Participant and end 60 days
thereafter and if not
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exercised within such 60-day period, an additional 60-day option shall commence
on the first day of the fifth month of the Plan Year next following the date
the stock was distributed to the former Participant (or such other 60-day
period as provided in regulations promulgated by the Secretary of the
Treasury). However, in the case of Company Stock that is publicly traded
without restrictions when distributed but ceases to be so traded within either
of the 60-day periods described herein after distribution, the Employer must
notify each holder of such Company Stock in writing on or before the tenth day
after the date the Company Stock ceases to be so traded that for the remainder
of applicable 60-day period the Company Stock is subject to the put option.
The number of days between the tenth day and the date on which notice is
actually given, if later than the tenth day, must be added to the duration of
the put option. The notice must inform distributees of the term of the put
options that they are to hold. The terms must satisfy the requirements of this
paragraph.
(5) The put option is exercised by the holder notifying the
Company in writing that the put option is being exercised; the notice shall
state the name and address of the holder and the number of shares to be sold.
The period during which a put option is exercisable does not include any time
when a distributee is unable to exercise it because the party bound by the put
option is prohibited from honoring it by applicable Federal or State law. Upon
exercise of a put option the Company, in its sole and absolute discretion,
shall determine whether payment shall be in a lump-sum or in periodic
installment payments. Adequate security and a reasonable interest rate must be
provided for any credit extended and the payment terms for the put option must
be reasonable in other respects. Periodic payments are reasonable if annual
installments, beginning within 30 days after the date the put option is
exercised, are substantially equal. Generally, the payment period may not end
more than 5 years after the date the put option is exercised. However, by
agreement of the parties, it may be extended to a date no later than the
earlier of 10 years from the date the put option is exercised or the date the
proceeds of the loan used by the Plan to acquire the Company Stock subject to
such put option are entirely repaid. Payment under a put option must not be
restricted by the provisions of a loan or any other arrangement, including the
terms of the Company's articles of incorporation, unless so required by
applicable state law.
(5) An arrangement involving the Plan that creates a put option
must not provide for the issuance of put options other than as provided under
this Section. The Plan (and the Trust Fund) must not otherwise obligate itself
to
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acquire Company Stock from a particular holder thereof at an indefinite time
determined upon the happening of an event such as the death of the holder.
SECTION 6.03 DIRECT ROLLOVERS AFTER 1992.
(a) Application. This section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that otherwise would limit a distributee's election under the Plan, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a
direct rollover.
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse
and the employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
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(4) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
SECTION 6.04 FIXED CREDIT ACCOUNTS. Following the date of a
Participant's retirement, death, or other termination of employment, the Plan
Administrator shall direct a valuation of the Fund. The valuation of the
Participant's Account shall be made as of the next Valuation Date following the
date on which the Participant retires, dies, or otherwise terminates
employment. Following the valuation, the amount of the Participant's Account
shall become a Fixed Credit Account. Thereafter, the Participant's (and any
Beneficiary's) interest under the Plan shall be solely in such Fixed Credit
Account which shall be maintained by the Trustee until the nonforfeitable
portion of the Account balance is completely distributed to the Participant (or
to his Beneficiary). Where the Fixed Credit Account is established due to the
Employee's termination of employment, the forfeitable portion of such Fixed
Credit Account, if any, shall be forfeited as provided in Section 7.04(b), and
shall then be allocated to other eligible Participants as provided in Section
5.06(d). Distribution of the nonforfeitable portion of such Participant's
Account may at the Participant's election, be made in a lump sum within a
reasonable period of time. The nonforfeitable portion of the Participant's
Account may be distributed even though such Participant has not as yet incurred
a one-year Break in Service. Thereafter, the Employee's nonforfeitable portion
of his Account balance shall not be less than "X" determined by the following
formula:
X = P (AB+D) - D where
AB = the Account balance at the relevant time,
P = the Employee's nonforfeitable percentage at the relevant time
D = the amount of the distribution, and the Relevant Time is the time at
which the Participant's nonforfeitable percentage in his Account cannot
increase.
SECTION 6.05 BENEFICIARY DESIGNATIONS. Every Participant shall have
the right to designate a Beneficiary or Beneficiaries to receive any of the
nonforfeitable balance of his segregated Account, or the portion thereof
remaining at the time of his death. Such designation, which shall be made on a
form prescribed by, provided by, and filed with the Plan Administrator, shall
specify the share to be received by each Beneficiary. Such designation of a
Beneficiary or Beneficiaries may be changed from time to time by the
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Participant by filing a new designation with the Plan Administrator. Upon
receipt of any designation or change in designation, the Plan Administrator
shall forthwith take such action as may be required to effectuate such
designation or change in designation. If any Participant shall fail to
designate a Beneficiary, or fail to designate how any remaining balance is to
be paid in the event of the death of the designated Beneficiary or
Beneficiaries, the Plan Administrator shall be empowered to designate a
Beneficiary or Beneficiaries on his behalf, but only among the spouse,
children, trust, or estate of the Participant. Where the Participant is
married and has designated a Beneficiary other than his spouse, the designation
form must be signed by the Participant's spouse, indicating consent to the
designation and acknowledgement of its effect, and the spouse's signature must
be witnessed by an unrelated representative of the Plan or a Notary Public.
Although such witnessed or notarized signature may thereafter be relied upon
conclusively by the Plan Administrator, the Plan Administrator is empowered to
file an appropriate action in a court of competent jurisdiction to resolve any
questions as to the rightful Beneficiary of a Plan distribution.
ARTICLE 7
SPECIAL PROVISIONS
SECTION 7.01 WITHDRAWALS FOR HARDSHIP.
(a) Withdrawal Procedure. A Participant may apply for a withdrawal
distribution because of a hardship (as defined in paragraphs (b) and (c) below)
from the Participant's Before-Tax Contribution Account by filing a written
application with the Employer at least 30 days prior to the requested date of
distribution. The amount of a hardship distribution shall be limited to the
least of (1) the amount which the Employer determines is required to meet the
financial need caused by the hardship, (2) 100 percent of the Participant's
Before-Tax Employee Contribution Account balance as valued on the next
Accounting Date, or (3) the cumulative total of the Participant's Before-Tax
Employee Contributions to the Plan. The Employer is authorized to limit the
amount of a withdrawal until the valuation process is completed.
(b) Circumstances of Hardship. A hardship shall be considered to exist
if the hardship is on account of an immediate and heavy financial need of the
Participant. A hardship is considered to be "on account of an immediate and
heavy financial need of the Participant" if the hardship is attributable to:
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39
(1) Medical expenses described in Code Section 213(d) incurred by
the Participant, his spouse or his dependents (as defined in Code Section 152);
(2) Costs directly related to the purchase (excluding mortgage
payments) of the Participant's principal residence;
(3) Payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, his spouse, children
or his dependents (as defined in Code Section 152); or
(4) Payments necessary to prevent the eviction of the Participant
from his principal residence or the foreclosure on the mortgage of that
residence; or
(5) Such other conditions that the Plan Administrator finds
justify an immediate and heavy financial need under rules published from time
to time by the Internal Revenue Service.
(c) Determination of Financial Need. A hardship shall be considered to
exist only if the hardship distribution is necessary to satisfy an immediate
and heavy financial need of the Participant. A hardship distribution is
considered to be "necessary to satisfy an immediate and heavy financial need of
the Participant" if all of the following requirements are satisfied:
(1) The distribution is not in excess of the amount which the
Employer determines is required to meet the immediate financial need caused by
the hardship;
(2) The Participant already has applied for and received all
distributions and all nontaxable loans currently available under this Plan and
all other plans maintained by the Employer. For these purposes, a Participant
is not required to have applied for and received any other currently available
hardship distribution from any other plan maintained by the Employer;
(3) In the Plan Year in which a Participant receives a hardship
distribution, his Before-Tax Employee Contributions under Section 3.05 shall be
suspended automatically for a period of at least 12 months following the date
of distribution, after which they will resume in the next calendar quarter at
the rate elected by the Participant.
(4) In the Plan Year immediately following the Plan Year in which
a Participant receives a hardship distribution, his Before-Tax Employee
Contributions under
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Section 3.05 shall be limited to the maximum amount determined under Section
3.05(a) for such Plan Year reduced by the Participant's Before-Tax Employee
Contributions under Section 3.05 for the Plan Year in which the Participant
received the hardship distribution.
(d) Determination of Hardship. A Participant's request for a hardship
distribution shall be accompanied or supplemented by such written evidence as
the Employer may reasonably request. The Employer, in its discretion, may
grant a request for a hardship distribution and may direct the Trustee to
permit such Participant to make a withdrawal if, in its discretion, the
Employer finds, based on all relevant facts and circumstances, that a condition
of hardship as defined in paragraphs (b) and (c) above exists. In making its
determination, the Employer shall adopt and follow uniform and
nondiscriminatory rules and its decisions shall be final and binding. In each
case, the Employer may rely on reasonable written representations of the
Participant and shall not be required to make an independent investigation of
the facts and circumstances.
(e) Liquidation of Investment Funds. A Participant's hardship
distribution shall be distributed from each of the investment funds in which he
participates on a pro-rata basis.
(f) Costs. Any distribution pursuant to this Section shall be subject
to all costs of liquidating the Participant's Account, including but not
limited to early withdrawal penalties, brokerage fees, market value
adjustments, and similar changes.
SECTION 7.02 LOANS TO PARTICIPANTS.
(a) General Rules. In addition to the powers granted under Article 9,
the Employer shall have the power to establish a Participant loan program and
to direct the Trustee to make loans to Participants from the nonforfeitable
portion of their non-Employee Stock Ownership Accounts. Subject to the special
rules provided in paragraph (d) below, the general rules in the following
paragraphs apply to Participant loans. Any application by a Participant to
borrow money from his Account shall be made by written request to the Employer,
on a form prescribed and provided by the Employer. Each approved loan shall be
subject to a loan origination fee and an annual maintenance fee, established by
and payable to the Trustee. If, after appropriate investigation, the Employer
approves a loan application, the Employer shall direct the Trustee to withdraw
from the Participant's Account and disburse to the Participant by check the
amount requested and approved, but only upon the following terms and
conditions:
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(1) the loan shall be evidenced by a promissory note which shall
be in a form prescribed by the Employer;
(2) the loan shall be for a principal amount which, when added to
the outstanding balance of any other loan or loans of the Participant from the
Plan and from any other tax-qualified retirement plan of the Employer
(including plans of other employers required to be aggregated with this Plan
pursuant to Code Section 414(b), (c), or (m)) does not exceed the lesser of:
(A) $50,000, reduced by the excess (if any) of the highest
outstanding balance of the Participant's Plan loans during the one-year
period ending on the day before the date on which the loan is to be made,
over the outstanding balance of Plan loans on the date on which such loan
is to be made, or
(B) 50% of the vested Account balance of the Participant;
provided, however, that loans granted prior to October 18, 1989 may not
exceed the limitations in effect prior to October 18, 1989;
(3) the loan shall bear a reasonable rate of interest, comparable
to that being charged by local financial institutions on loans of a similar
character;
(4) the loan shall be for a prescribed term of no longer than
five years, unless the loan is for the purchase of the Participant's principal
residence;
(5) the loan shall provide for specific terms of repayment, in
substantially equal installments of principal and interest, made at least
quarterly, which terms the Employer shall implement by appropriate withholding
from the Participant's regular salary or wages;
(6) the loan shall be secured, notwithstanding any other
provision of the Plan to the contrary, by a pledge of not more than 50% of the
Participant's nonforfeitable Account balance as of the date of the loan, or if
the Employer otherwise determines it to be appropriate, shall be secured by
other collateral comparable to that customarily required by local financial
institutions and by an irrevocable wage assignment if permitted by local law;
and
(7) the loan shall be subject to the availability of cash in the
Fund for making loans.
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(b) Treatment of Repayments. Nothing herein shall prevent a
Participant from prepaying an outstanding loan. For purposes of the allocation
of earnings, gains and losses of the Fund and the determination of the balance
of a Participant's Account on any Accounting Date under Article 4, a loan under
this Section shall be treated as a nontaxable withdrawal from the Participant's
Account, on the date the loan proceeds are disbursed, to the extent of the
principal amount borrowed, and each payment on the loan shall be treated as a
contribution to the Account, on the date received, to the extent such payment
constitutes repaid principal. Interest paid by a Participant on any loan shall
be credited directly to the Account of that Participant and shall not be
considered part of the earnings of the Fund for purposes of computing earnings
allocable among Participants' Accounts.
(c) Default. The Employer may direct the Trustee to take any action
which may be necessary or appropriate to permit the Employer to enforce
collection of an unpaid loan. A loan shall be deemed to be in default upon the
Participant's failure to timely make any scheduled repayment of principal or
interest and expiration of reasonable grace period that may be permitted by the
Employer and allowed by law. The Trustee, at the direction of the Employer,
shall report the amount of any defaulted loan as a taxable distribution to the
Participant at the time and to the extent required by law. Upon the occurrence
of any event permitting a distribution from the Plan, any balance of the loan
which still remains unpaid (including any unpaid interest due) shall be
recharacterized as a distribution, deducted from the Participant's Account
balance and reported by the Trustee as taxable income to the Participant, if
not previously reported as a taxable distribution pursuant to the preceding
sentence, at the time and to the extent required by law.
(d) Special Rules. In addition to the terms and conditions provided in
the preceding paragraphs of this Section, loans to Participants shall be
subject to the following terms and conditions:
(1) All loans under the Plan shall be made strictly in accordance
with the provisions of this Section, with the specific Participant loan
provisions described in Section 2550.408b-1(d) of the Department of Labor Rules
and Regulations for Fiduciary Responsibility, and with any additional rules
which may be adopted by the Employer;
(2) Loans shall be available to all Participants on a reasonably
equitable basis in a uniform and nondiscriminatory manner, although the
Employer may make distinctions on the basis of credit-worthiness of the
Participant, the liquidity of the Participant's Account and of
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the Fund at the time of receipt of the Participant's loan application, and such
other factors as the Plan Administrator deems relevant in protecting the
interests of all Participants in the Fund;
(3) The minimum loan shall be $1,000;
(4) The loan proceeds need not be disbursed to the Participant by
the Employer prior to the expiration of 30 days from the date of receipt by the
Employer of the Participant's loan application;
(5) The loan shall be subject to the ability of the Trustee to
liquidate prior investments directed by the Participant for his Account, and
all costs of liquidating the Account to cash for purposes of making the loan;
(6) No more than one loan may be outstanding to any one
Participant at any time, and no more than one loan may be taken within any Plan
Year quarter; and
(7) With respect to any loan disbursed after March 31, 1992, the
funds to be disbursed to the Participant shall be disbursed pro rata from the
investment funds in which the Participant's Account is invested at the time
that the loan is made. Any portion of a loan that is distributed from a
guaranteed interest contract fund shall be withdrawn on a pro rata basis from
the guaranteed interest contracts in which the Participant's Account is
invested. The source of funds for loans disbursed prior to April 1, 1992 shall
be governed by the terms of the Plan in effect on the date that the loan is
disbursed.
SECTION 7.03 TOP-HEAVY PLAN RULES.
(a) General Rule. If, for any Plan Year, the Plan is a top-heavy plan
as determined under paragraph (b), then the requirements in paragraph (c) shall
apply to the extent indicated by that paragraph. For purposes of this section,
the term "Employer" shall include any member of a group of employers
constituting (1) a controlled group of corporations (within the meaning of Code
Section 414(b) as modified by Code Section 415(h)), (2) trades or businesses,
whether or not incorporated, under common control (within the meaning of Code
Section 414(c) as modified by Code Section 415(h)), or (3) an affiliated
service group (as defined in Code Section 414(m)).
(b) Top-Heavy Test. The Plan's status as a top-heavy plan for any Plan
Year shall be determined in accordance with the following five step procedure:
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(1) Required Plan Aggregation. First, there shall be aggregated
with this Plan (A) each plan of the Employer in which a key employee is a
participant and (B) each other plan of the Employer which enables a plan
described in (A) to meet the requirements of Code Section 401(a)(4) or Code
Section 410, and (C) each plan described in (A) or (B) which was terminated
during the five consecutive Plan Year period ending with the determination
date.
(2) Key Employee Sum. Second, there shall be computed, as of the
determination date, the sum of the account balances of all key employees under
all defined contribution plans, including this Plan, required to be aggregated
under (1). For purposes of this computation, account balance means the account
balance as of the most recent valuation date occurring within a 12-month period
ending on the determination date, plus an adjustment for contributions due as
of the determination date. In the case of a profit sharing plan or other plan
not subject to the minimum funding requirements of Code Section 412, the
adjustment is the amount of any contributions actually made after the valuation
date but on or before the determination date, except that in the first plan
year, the adjustment shall include any contributions made after the
determination date that are allocated as of a date within the first plan year.
In the case of a money purchase pension plan or other plan subject to the
minimum funding requirements of Code Section 412, the adjustment is the amount
of any contributions that would be allocated as of a date not later than the
determination date, even though such amount is not yet required to be
contributed, plus the amount of any contribution actually made (or due to be
made) after the valuation date but before the expiration of the extended
payment period under Code Section 412(c)(10). Finally, for purposes of this
computation:
(A) there shall be included in the sum any distributions
(other than rollover amounts or plan-to-plan transfers not initiated by
the employee or made to another plan maintained by the Employer) made to
an employee from this Plan, from another plan required to be aggregated
under (1), or from a terminated plan which, if it had not been
terminated, would have been required to be aggregated under (1), within
the five year period ending on the determination date;
(B) there shall be excluded from the sum any rollover
contribution and any plan-to-plan transfer initiated by the employee and
accepted after December 31, 1983 by this Plan, or by any other plan
required to be aggregated under (1), from a plan other than one
maintained by the Employer;
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(C) there shall be excluded from the sum the account
balance of any employee who formerly was a key employee but who is not a
key employee for the year ending on the determination date; and
(D) there shall be excluded from the sum the account
balance of any individual who has not performed service for the Employer
at any time during the five year period ending on the determination date.
(3) All Employee Sum. Third, under the same procedures as set
forth in (2) above, including the special rules in (A), (B), (C), and (D),
there shall be computed the sum of account balances and present values of
accrued benefits for all employees.
(4) Top-Heavy Test Fraction. Fourth, the sum computed in (2)
shall be divided by the sum computed in (3), and if the resulting fraction is
0.60 or less, neither the Plan nor any plan required to be aggregated under (1)
is a top-heavy plan for the Plan Year. If the fraction is greater than 0.60,
both the Plan and any plan required to be aggregated under (1) are top-heavy
plans for the Plan Year, unless after the permissive plan aggregation described
in (5) below, the recomputed fraction is 0.60 or less.
(5) Permissive Plan Aggregation. At the election of the Plan
Administrator, plans of the Employer, other than those required to be
aggregated under (1), but which provide contributions or benefits comparable to
this Plan, may be aggregated with this Plan and the plans required to be
aggregated under (1), provided that such aggregated group would meet the
requirements of Code Sections 401(a)(4) and 410. Steps (2) through (4) above
may then be repeated, based on this permissively aggregated group, and if the
top-heavy test fraction computed in step (4) is 0.60 or less for this group,
then neither the Plan nor any plan required to be aggregated under (1) is a
top-heavy plan for the Plan Year; however, if the top-heavy test fraction
computed in step (4) is still greater than 0.60, both the Plan and any plan
required to be aggregated under (1) will be top-heavy plans for the Plan Year,
but no plan which is permissively aggregated under this step (5) will be deemed
top-heavy for such reason.
(c) Superseding Rules. For each Plan Year that the Plan is a top-heavy
plan, the requirements in (1) below shall supersede any other provisions of the
Plan which otherwise would apply for that Plan Year. For any Plan Year that
the Plan is a top-heavy plan, the vesting schedule in (2) below shall supersede
the Plan's regular vesting schedule, but only to the extent it provides a
greater vested percentage for any level of Years of Service than the Plan's
regular vesting
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schedule, and only with respect to employees who have at least one Hour of
Service after the Plan becomes top-heavy; if and when the Plan ceases to be a
top-heavy plan, the Plan's regular vesting schedule shall again apply (without
regard to the schedule in (3) below) as of the first day of the Plan Year after
the last Plan Year for which the Plan is a top-heavy plan, but subject to all
Plan rules that apply in the case of amendments to the vesting schedule.
(1) Minimum Contributions or Benefits for Non-Key Employees.
Employer contributions and forfeitures for the Plan Year beginning after
December 31, 1983 allocated on behalf of each non-key employee Participant (A)
who has not separated from employment with the Employer at the end of the Plan
Year, and (B) who is eligible for an allocation of Employer contributions under
the Plan (without regard to any requirements for a minimum number of Hours of
Service during the Plan Year, mandatory or voluntary contributions, or
compensation for the Plan Year in excess of a stated amount), shall be equal to
at least (i) multiplied by (ii), where --
(A) is equal to 3 percent, or if less, the maximum
percentage of Employer contributions and forfeitures (as a percentage of
compensation not in excess of $200,000, as adjusted from time to time in
accordance with Section 401(a)(17) of the Code) allocated on behalf of
any key employee Participant for the Plan Year, and
(B) is equal to the non-key employee Participant's
compensation for the Plan Year.
For purposes of this rule, Employer contributions and forfeitures allocated
under any other defined contribution plan of the Employer, in which any key
employee participates or which enables another defined contribution plan to
meet the requirements of Code Section 401(a)(4) or Code Section 410, shall be
considered contributions and forfeitures allocated under this Plan. For
purposes of computing the product in the foregoing sentence, compensation in
years before January 1, 1984 and in years after the close of the last Plan Year
in which the Plan is top-heavy shall be disregarded, and similarly, years of
service shall exclude years of service when the Plan was not top-heavy (for any
Plan Year ending during such year of service) and years of service completed in
a Plan Year beginning before January 1, 1984.
(2) Accelerated Vesting. A Participant's vested percentage of
any Employer Contribution Account that is subject to a vesting schedule shall
be determined in accordance with the following vesting schedule:
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Years of Service Vested Percentage
---------------- -----------------
less than 2 years 0%
at least 2 years but less than 3 years 20%
at least 3 years but less than 4 years 40%
at least 4 years but less than 5 years 60%
at least 5 years but less than 6 years 80%
6 or more years 100%
(d) Special Definitions. For purposes of this section, the following
terms shall have the meanings indicated:
(1) "compensation" means compensation as defined in Article 3 for
purposes of the limitations on annual additions under Code Section 415.
(2) "determination date" means, with respect to any Plan Year,
the last day of the preceding Plan Year, except that in the case of the first
Plan Year, the determination date shall be the last day of that Plan Year.
Where one or more plans are required or permitted to be aggregated with this
Plan, and where all plan years do not coincide, the key employee and all
employee sums in paragraph (b) above each shall be determined separately for
each plan on the respective determination dates, and the results shall then be
combined for the determination dates falling within the same calendar year.
(3) "employee" means (A) a common-law employee or partner of the
Employer who is or once was a Participant, or would have been a Participant but
for his failure to complete some minimum number of hours of service in any Plan
Year, if required, (after meeting the Plan's initial eligibility requirements),
to make mandatory employee contributions, if required, or to receive
compensation in excess of a stated amount, and (B) any Beneficiary.
(4) "key employee" means each employee or former employee (or
Beneficiary of either) who, at any time during the Plan Year containing the
determination date or during any of the four preceding Plan Years, --
(A) is an officer of the Employer and who has annual
compensation in the Plan Year, greater than 50 percent of the applicable
dollar limitation of Code Section 415(b)(1)(A) in effect for the Plan
Year;
(B) is one of the ten employees owning the largest
interests in the Employer and who has compensation from the Employer
greater than the applicable dollar limitation of Code Section
415(c)(1)(A) in effect for the calendar year in which the determination
date falls;
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(C) is a 5-Percent Owner of the Employer; or
(D) is a 1-Percent Owner of the Employer who has annual
compensation from the Employer of more than $150,000.
For purposes of (A), no more than 50 employees, or if less, the greater of 3
employees or 10 percent of all employees, shall be treated as officers. For
purposes of (B), (C), and (D), the constructive ownership rules of Code Section
318 shall apply with the modification that 5 percent shall be substituted for
50 percent in Section 318(a)(2). Also, for purposes of (B), if two employees
have the same interest in the Employer, the employee having the greater annual
compensation from the Employer shall be treated as having a larger interest;
following application of this rule, an employee shall be considered a key
employee, even if he is not among the first ten largest owners, if his
ownership interest in the Employer is not less than at least one of the top ten
owners and provided he has the requisite level of compensation described in
(B). Finally, for purposes of (C) and (D), each employer that otherwise would
be aggregated under this section's definition of "Employer" shall be treated as
a separate employer to determine ownership percentages.
(5) "valuation date" means the last day of the plan year in the
case of any defined contribution plan, including this Plan, and the date used
for computing plan costs for minimum funding in the case of any defined benefit
plan.
(e) Adjustment to Dollar Amount. The $200,000 limit on compensation in
paragraph (c)(2) above shall be adjusted automatically, without the need of
specific plan amendment, in accordance with Section 401(a)(17) of the Code.
(f) Anti-Cutback Rule. Notwithstanding the foregoing rules of this
section, in no event shall any changes in the Plan's benefit structure,
including its vesting provisions, that result from a change in the Plan's
top-heavy status, cause the Account balance of any Participant to be reduced in
violation of Code Section 411. In addition, in the case of any changes in the
vesting provisions of the Plan, each Participant (1) who has completed at least
three Years of Service and (2) whose nonforfeitable rights are adversely
affected by the change, may elect, during the election period, to have his
nonforfeitable rights determined without regard to such change. The election
period shall begin on the date the change is adopted or becomes effective,
whichever is earlier, and end on the latest of (A) the date which is sixty days
after the day the change is adopted, (B) the date which is sixty days after
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the day the change becomes effective, or (C) the date which is sixty days after
the day the Participant is issued written notice of the change.
SECTION 7.04 BREAK IN SERVICE RULES.
(a) Years of Service. The Plan rights of an Employee who incurs a
Break in Service (whether or not due to an actual separation from employment
with the Employer) shall be affected as follows:
(1) As long as an individual remains an Employee of the Employer,
and has not separated from employment, he will not lose credit for any Years of
Service.
(2) An Employee who separates from employment with the Employer,
and who incurs a Break in Service, shall lose credit for any Years of Service
earned prior to the Break in Service on the last day of the first Plan Year in
which he incurs a Break in Service or on the date he separates from employment
with the Employer, if later.
(3) Section 7.04(a)(2) notwithstanding, in the case of any
individual who had a nonforfeitable right to all or a portion of his Account
under Article 5 prior to his Break in Service, and who returns to employment
with the Employer, all Years of Service earned prior to the Break in Service
shall be restored to the credit of the individual as of the first date he again
is credited with an Hour of Service for the Employer after the Break in
Service.
(4) Section 7.04(a)(3) notwithstanding, in the case of an
individual who had no nonforfeitable right to his Account under Article 5 prior
to his Break in Service, and who returns to employment with the Employer, all
Years of Service earned prior to the Break in Service shall be restored to the
credit of the individual as of the first date he again is credited with an Hour
of Service with the Employer after the Break in Service, but only if --
(A) he is credited with 1,000 or more Hours of Service by
the one year anniversary of the date he is first credited with an Hour of
Service after the Break in Service, or he is credited with 1,000 or more
Hours of Service within any Plan Year thereafter beginning with the Plan
Year that includes such one year anniversary; and
(B) the number of one year Breaks in Service is less than
the greater of (AA) five (5) one-year Breaks in Service, or (BB) his
aggregate
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number of Years of Service earned by the individual prior to the Break in
Service (not taking into account any Years of Service disregarded under a
previous application of this rule).
Provided, however, upon completion of the 1,000 Hours of Service requirement in
(aa), the individual also shall receive credit for any Year of Service earned
during the period in which he is satisfied such requirement. If the
individual's number of consecutive one year Breaks in Service equals or exceeds
the greater of (AA) five (5) one-year Breaks in Service, or (BB) his aggregate
number of Years of Service before the Break in Service, then credit for any
Years of Service earned prior to the Break in Service shall not be restored.
(b) Forfeitures. The forfeitable portion of a retired, disabled,
deceased, or terminated Participant's Account, if any, shall be forfeited and
returned to the Fund (for allocation to the eligible Participants as provided
in Article 6) in accordance with the rules of this paragraph.
(1) Effective July 1, 1991, if the nonforfeitable balance of the
Participant's Account is paid in a single lump sum and (i) does not exceed
$3,500 or (ii) does exceed $3,500 and the Participant consents to such lump
sum, and payment is made no later than the close of the Plan Year following the
Plan Year in which participation in the Plan terminates, the forfeiture shall
occur on the last day of the Plan Year in which the lump sum distribution is
made.
(2) Effective July 1, 1991, if the nonforfeitable balance of the
Participant's Account exceeds $3,500, and if the Participant refuses to consent
to a single lump sum payment of this amount prior to his attainment of Normal
Retirement Age, the forfeiture shall occur as of the last day of the Plan Year
in which the Participant incurs his fifth consecutive one-year Break in
Service.
(3) Effective July 1, 1991, if the nonforfeitable balance of the
Participant's Account is paid in installments, the Plan Administrator shall
forfeit the Participant's forfeitable balance on the last day of the Plan Year
in which the first installment is paid, unless such amount was previously
forfeited pursuant to Section 7.04(b)(2), above. Provided, however, that if
the Participant is reemployed prior to his fifth consecutive one-year Break in
Service and repayment is made pursuant to (c) below, the total forfeited amount
shall be restored.
Any amount previously forfeited from a Participant's Account, pursuant to (1)
or (3) above, shall be restored in full to that
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Participant's Account as of the last day of the first Plan Year (after the
Participant's Break in Service or other separation from employment) in which he
is credited with a Year of Service. Provided, that no forfeiture shall be
restored to the account of a Participant who has incurred five or more
consecutive one-year Breaks in Service or who fails to make repayment of his
prior distribution pursuant to the rules below. Any amount so restored shall
be derived first from forfeitures for that year, and then from Employer
contributions for the year or succeeding years, is necessary.
(c) Repayments. A Participant who has received a distribution of less
than the full balance of his Account at his separation from employment, and who
returns to employment covered by the Plan prior to incurring five (5)
consecutive one-year Breaks in Service, may elect to repay to the Fund the full
amount distributed, provided that such repayment is made prior to the last day
of the Plan Year in which he incurs the fifth consecutive one-year Break in
Service after resuming employment. Any amount so repaid shall be aggregated in
the Participant's Account with any forfeiture restored pursuant to paragraph
(b) above.
(d) Nonforfeitable Percentage. Except in the case of a Participant (1)
whose nonforfeitable percentage was 100% pursuant to Article 5, (2) who had no
prior Account balance, or (3) who had a prior Account Balance that was
disbursed and who now is not entitled to make a repayment or to have a previous
forfeiture restored, there shall be created, for each Participant who incurs a
Break in Service or who receives a distribution (regardless of a Break in
Service), two sub-accounts within his Account. These sub-accounts shall
separate any additions to the Account made after the Break in Service (or after
the distribution) from the previous balance. The Participant's nonforfeitable
percentage shall be determined separately for these sub-accounts, in accordance
with the following rules:
(1) Years of Service earned by the Participant subsequent to any
Breaks in Service of less than five (5) consecutive years shall be credited for
purposes of determining the nonforfeitable percentage of the Participant's
pre-Break sub-account;
(2) Years of Service earned by the Participant subsequent to any
five (5) consecutive one-year Breaks in Service shall be disregarded for
purposes of determining the nonforfeitable percentage of the Participant's
pre-Break sub-account;
(3) Years of Service earned by the Participant subsequent to the
Break in Service, plus any Years of Service
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earned prior to the Break in Service which are retained pursuant to (1) above,
shall be used for purposes of determining the nonforfeitable percentage of the
Participant's post-Break sub-account;
(4) Until a Participant entitled to make a repayment pursuant to
paragraph (c) above makes the full repayment, or in any case for a Participant
who fails or is ineligible to make a repayment, the Participant's
nonforfeitable interest in his pre-Break sub-account (or initial sub-account,
where there has been a distribution but no Break in Service) shall be equal to
an amount, V, determined by the formula:
V = P[AB + D] - D, where:
P is the Participant's nonforfeitable percentage as otherwise
determined under the Plan at the relevant time,
AB is the Participant's pre-Break (or initial) sub-account
balance at the relevant time,
D is the amount of the distribution which was made to the
Participant, and
the relevant time is the time at which the Participant's
nonforfeitable percentage in his Account cannot increase.
SECTION 7.05 LEASED EMPLOYEES.
(a) General Rule. Any leased employee of the Employer shall be
excluded from participation in the Plan but nonetheless shall be counted as an
Employee of the Employer for certain Plan purposes as provided in Code Section
414(n). However, except as provided in paragraph (c) below, if by reason of
counting such leased individual as an employee for certain purposes as required
by the preceding sentence (and after taking into account contributions and
benefits provided by the leasing organization as described in this paragraph),
the Plan fails to meet the requirements of Code Sections 401(a) or 410(b), the
leased individual will be eligible to participate in the Plan as if he or she
were a common-law Employee. Years of Service for such person shall be
calculated in accordance with the rules set forth in Code Section 414 and
regulations issued thereunder. In all events, contributions to or benefits
provided by any tax-qualified plan maintained by the leasing organization which
are attributable to services performed for the Employer shall be treated as
provided by the Employer.
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(b) Definitions. For purposes of this section, the term "leased
employee" means any person (other than an Employee of the Employer) who,
pursuant to an agreement between the Employer and any other person ("leasing
organization"), has performed services for the Employer (or for the Employer
and related persons determined in accordance with Code Section 414(n)(6)(A)) on
a substantially full time basis for a period of at least one year and such
services are of a type historically performed by employees in the business
field of the Employer.
(c) Excluded Employees. Except as provided in regulations prescribed
by the Secretary of Treasury, the Plan participation requirement of paragraph
(a) of this Section shall not apply to any leased employee if: (1) such
employee is covered by a pension plan which is maintained by the leasing
organization and meets the requirements of paragraph (d) of this Section, and
(2) all such leased employees constitute 20 percent or less of the Employer's
non-highly compensated work force. For purposes of this section, the term
"non-highly compensated work force" means the aggregate number of individuals
who are: (i) other than highly compensated employees of the Employer
determined in accordance with Code Section 414(q), and (ii) either (A)
employees of the Employer (without regard to paragraph (a) of this section) and
have performed services for the Employer (or for the Employer and related
persons determined in accordance with Code Section 414(n)(6)(A)) on a
substantially full time basis for a period of at least one year, or (B) leased
employees of the Employer.
(d) Plan Requirements. A pension plan shall meet the requirements of
this paragraph if it is a money purchase pension plan providing: (1) a
nonintegrated employer contribution rate of at least 10 percent of
compensation, (2) full and immediate vesting, and (3) immediate participation
for each employee of the leasing organization (other than employees who perform
substantially all of their services for the leasing organization and
individuals whose compensation from the leasing organization during the plan
year and the three immediately preceding plan years is less than $1,000.) For
purposes of this section, the term "compensation" means the total compensation
of the leased employee from the leasing organization for the entire year, as
described in Code Section 415(d)(3) and the regulations thereunder, except that
such term shall include (i) amounts excluded from gross income under Code
Section 402(a)(8) or 402(h)(l)(B), (ii) amounts which could have been received
in cash but for an election under a Code Section 125 cafeteria plan, and (iii)
amounts contributed to a Code Section 403(b) annuity contract pursuant to a
salary reduction agreement within the meaning of Code Section 3121(a)(5)(D).
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(e) Recordkeeping Relief. Notwithstanding any other provision of the
Plan, if the Employer (1) does not maintain any top-heavy plans within the
meaning of Code Section 416(g) and (2) uses the services of leased employees
only for an insignificant percentage of its total workload, then the Employer
shall be exempt from the employee leasing recordkeeping requirements in
accordance with regulations prescribed by the Secretary of Treasury.
(f) Multiple Employers. In the event that the Employer is a member of
a group of employers constituting (1) a controlled group of corporations
(within the meaning of Code Section 414(b)), (2) trades or businesses, whether
or not incorporated, under common control (within the meaning of Code Section
414(c)), (3) an affiliated service group (as defined in Code Section 414(m)),
or any other group of entities required to be aggregated as prescribed by
regulations under Code Section 414(o), then the foregoing rules of this section
shall be applied by treating all leased employees of such other employers as
leased employees of the Employer.
SECTION 7.06 PROVISIONS RELATING TO PLAN INVESTMENTS IN COMPANY
STOCK.
(a) Authorization to Invest. The Trustee may invest 100% of the Fund
in Company Stock, provided that such stock constitutes "qualifying employer
securities" as defined in Code Section 4975(e)(8).
(b) Securities Transactions. The Trustee may acquire or sell Company
Stock in the open market or in any private transaction. If the Company Stock
is acquired from, or sold to, a party-in-interest as defined in ERISA section
3(14), no commission may be paid.
(c) Rights, Warrants, or Options. Stock rights (including warrants and
options but not voting rights) issued with respect to Company Stock shall be
exercised by the Trustee on behalf of Participants to the extent that cash is
available. Rights which cannot be exercised because of the lack of cash shall
be sold and the proceeds shall be invested in Company Stock.
(d) Reinvestment of Dividends. Cash dividends paid on Company Stock
shall be allocated to Participants' Accounts as of the record date for the
dividend and shall be reinvested by the Trustee in share of Company Stock for
the Participants' Accounts.
(e) Voting and Other Rights. Each Participant shall have the right
with respect to full and fractional shares of Company Stock allocated to the
Participant's Account to direct
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the Trustee how to vote such shares with respect to any matter put to a
shareholder vote and the manner in which to respond to any tender offer or
exchange offer with respect to such shares. The Trustee shall thereafter vote,
tender or exchange all such shares in the manner directed by the Participants.
Such vote, tender offer or exchange offer response shall be arranged by written
ballot, proxy, or open meeting according to such rules and guidelines as the
Plan Administrator shall establish.
Shares of the Company stock held by the Fund but as yet unallocated and
allocated shares as to which the Trustee does not receive timely or proper
direction from Participants shall be voted, tendered or exchanged by the
Trustee in the same proportion as the Trustee was directed with respect to
those allocated shares of Company Stock for which the Trustee received proper
direction.
(f) Exempt Loan. The Trustee shall have the power to borrow money from
or guaranteed by a "party-in-interest" as defined in Section 3(14) of ERISA or
a "disqualified person" as defined in Section 4975(e) of the Code ("Loan" or
"Exempt Loan") on the following terms and conditions:
(1) The proceeds of the Loan will be used within a reasonable
time after receipt (i) to acquire Company Stock, or (ii) to repay a prior Loan
hereunder.
(2) No security shall be provided for the Loan other than the
Company Stock acquired with the proceeds of the Loan or the proceeds of a prior
Loan hereunder repaid with the proceeds of the present Loan. No person
entitled to payment under the Exempt Loan shall have any right to assets of the
Plan other than (i) the collateral for the Loan, (ii) contributions made to the
Plan to meet Employer obligations under the Loan, and (iii) earnings on such
collateral or contributions.
(3) The payments required to be made to repay the Loan in any
Plan Year shall not exceed the sum of the contributions and earnings received
during or prior to the Plan Year, less payments made in prior Plan Years. Such
contributions and earnings must be accounted for separately on the Plan's book
until the Loan is repaid.
(4) In the event of default, the value of Plan assets transferred
in satisfaction of the Loan shall not exceed the amount of the default, and if
the lender is a party-in-interest or disqualified person such transfer shall be
only to the extent of the failure of the Fund to meet scheduled payments.
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(5) The interest rate of such Loan shall be reasonable, taking
into account all relevant circumstances.
(6) The Employer agrees to contribute for any Plan Year, in
addition to any contributions required under Article 3, an amount sufficient to
satisfy the Fund's obligations under the terms of the Loan.
(7) Such Loan shall be for the primary benefit of Participants
and their beneficiaries, and the terms of the Loan shall be at least as
favorable to the Fund as the terms of a comparable loan at arm's length between
independent parties and shall not be such that assets of the Fund might be
drained off.
(8) The Loan may not contain any provision allowing the
party-in-interest or disqualified persons to demand full payment of the Loan at
any time prior to the end of the term on the Loan.
SECTION 7.07 DIVERSIFICATION OF INVESTMENTS.
(a) Election by Qualified Participant. Each Participant who has
attained age 55 and completed at least 10 years of participation in the Plan
shall be permitted to direct the Plan Administrator as to the investment of 25%
of the value of the Participant's Account attributable to Company Stock
acquired by the Plan (or the Company's Employee Stock Ownership Plan) after
December 31, 1986. This diversification election shall continue for five Plan
Years beginning with the Plan Year after the Plan Year in which the Participant
first attains age 55 after completion of 10 years of participation in the Plan.
A Participant's election shall be in writing and shall be made within 90 days
after the last day of each Plan Year during the Participant's qualified
election period and shall be effective no later than 180 days after the close
of the Plan Year to which the direction applies. Within 90 days after the
close of the last Plan Year in the Participant's qualified election period, a
qualified Participant shall be permitted to direct the investment of an amount
not to exceed 50% of the value of such Account balance.
(b) Investment Options. At the election of the qualified Participant,
the Plan shall distribute that portion of the Participant's Account subject to
the election within 90 days after the last day of the period during which the
election can be made. In lieu of receiving a distribution, the qualified
Participant may direct the Plan to transfer that portion of the Participant's
Account subject to the election to another tax qualified plan maintained by the
Employer which accepts such transfers and permits Participants to direct
investments within at least three investment options (exclusive of any
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Company Stock options). Any such plan-to-plan transfer shall be made no later
than 90 days after the last day of the period during which the Participant's
election can be made.
(c) Amounts Subject to Diversification Requirements. The portion of a
Participant's Account attributable to Company Stock acquired by the Plan (or
the Company's Employee Stock Ownership Plan) after December 31, 1986, shall be
determined by multiplying the number of shares of Company Stock held in the
Account by a fraction, the numerator of which is the number of shares acquired
by the Plan (or the Company's Employee Stock Ownership Plan) after December 31,
1986, and allocated to the Participant's Account (but not to exceed the number
of shares held by the Plan on the date that the individual became qualified to
make such diversification election) and the denominator of which is the total
number of shares held by the Plan at the date the individual became qualified
to make this diversification election.
ARTICLE VIII
PROFIT SHARING FUND
SECTION 8.01 ESTABLISHMENT AND MAINTENANCE OF FUND.
(a) The Employer shall establish a profit sharing/employee stock
ownership fund by a trust agreement with a Trustee to carry out the purposes of
the Plan. The Employer shall select such Trustee, who may be one or more
individuals or a corporate trustee or both, and may change such selection from
time to time in accordance with Section 8.03; provided, however, that any
corporate trustee which is designated must be qualified under the laws of the
United States or one of the states to operate as a trustee. The Employer may
modify any such trust agreement from time to time to accomplish the purposes of
the Plan.
(b) All contributions by the Employer, and any contributions by
Employees, shall be paid to the Trustee of the Fund. The Fund shall be
invested in such investments as are permissible for trustees under ERISA. The
Trustee shall maintain such cash balance as it considers necessary to meet
current and potential demands on the Fund. At the request of the Employer, the
Trustee shall prepare and submit to the Employer, an accounting of the Fund as
of any date specified by the Employer, but the Trustee shall not be required to
render more than four such accountings during any Plan Year. In any event, the
Trustee shall prepare and render to the Employer an accounting of the Fund as
of the last day of each Plan Year. The Trustee shall not be required to render
accounts to
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individual Participants but only to the Employer, which may submit reports of
the Fund to the Participants from time to time.
(c) Purchase of Company Stock. All purchases of Company Stock shall be
at a price which does not exceed the fair market value of such stock. Any
purchase of stock from a party in interest must also comply with Section
7.06(b). Company Stock may be purchased for cash or on a installment basis.
(d) Investment Policy. The Plan is designed to invest primarily in
Company Stock. However, the Administrator may also direct the Trustee to
invest funds under the Plan in other property described in the Trust. The Plan
may not obligate itself to acquire Company Stock from a particular holder
thereof at an indefinite time determined upon the happening of an event such as
the death of the holder. The Plan may not obligate itself to acquire Company
Stock under a put option binding upon the Plan. However, at the time a put
option is exercised, the Plan may be given an option to assume the rights and
obligations of the Employer under a put option binding upon the Employer.
SECTION 8.02 BENEFITS UNDER THE PLAN LIMITED TO THE ASSETS OF THE
FUND. Except as required under applicable federal law, the benefits of the
plan shall be only such as can be provided by the assets of the Fund, and there
shall be no liability or obligation on the part of the Employer to make any
contributions or payments to establish or maintain the Plan, whether in the
event of termination of the Plan or otherwise. No liability for the payment of
benefits under the Plan shall be imposed on the Employer or on the officers,
directors, or stockholders of the Employer.
SECTION 8.03 THE TRUSTEE. The Trustee shall receive the
contributions to the Fund and shall hold, manage, invest, reinvest, and
distribute the same plus any earnings thereon, pursuant to the provisions of
the Plan. The Trustee also shall determine all questions relating to
accounting and to the financial position of the Fund and the shares and
interests of the Participants in accordance with information supplied by the
Employer, and, in general, shall discharge all the duties and functions imposed
by the terms of the Plan either expressly or by implication.
SECTION 8.04 APPOINTMENT OF INVESTMENT MANAGER AND CUSTODIAN. The
Employer may appoint one or more Investment Managers meeting the definition of
"investment manager" under Section 3(38) of ERISA. Furthermore, the Employer
may appoint one or more Custodians to hold any part or all of the Fund. Any
appointment of an Investment Manager or a Custodian shall
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be made only upon proper authorization of the Employer's board of directors and
evidenced by a written designation signed by one or more duly authorized
officers of the Employer.
An Investment Manager appointed pursuant to this Section may direct the
Trustee to invest all or such portion of the Fund placed in the discretion of
the Investment Manager in securities or other properties as are selected by the
Investment Manager, and may direct the Trustee to sell any securities or other
property of the Fund placed in its discretion. Where assets of the Fund are
being held by a Custodian appointed pursuant to this Section, the Investment
Manager's direction shall be made to such Custodian and copied to the Trustee.
The Trustee or Custodian, as the case may be, shall act on all such
recommendations of the Investment Manager, and the Trustee and Custodian shall
have no fiduciary liability for acting in accordance with such recommendations
or for the retention of any securities or properties so purchased. The Trustee
and Custodian will be protected in relying upon any telegram or letter
purporting to have been sent by the Investment Manager which the Trustee or
Custodian believes in good faith to be genuine. In directing investments, the
Investment Manager shall diversify the investments so as to minimize the risk
of large losses, unless under the circumstances and in the opinion of the
Investment Manager, it is clearly prudent not to do so.
Contributions to and disbursements from the Fund may be made to the
Trustee or directly to and from any Custodian appointed pursuant to this
Section, as determined by the Employer.
Notwithstanding any other provision of the Plan and Trust, the Trustee
shall be fully protected in relying upon the certification of the Employer with
respect to the appointment of such Investment Manager and it shall not be the
responsibility of the Trustee to determine or review investment instructions
given by such Investment Manager. Similarly, any Custodian appointed pursuant
to this Section shall assume no liability for acting in accordance with the
directions of the Investment Manager. Each Investment Manager shall be a named
fiduciary under the Plan and Trust and shall acknowledge its action as a
fiduciary under the Plan and Trust in a writing delivered to the Trustee and to
the Employer.
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ARTICLE 9
PROVISIONS RELATING TO ADMINISTRATION
AND FIDUCIARIES
SECTION 9.01 PLAN ADMINISTRATION. The Employer shall be the Plan
Administrator for the purpose of complying with the reporting and disclosure
requirements of ERISA as well as other actions and duties specified by ERISA
for the Plan Administrator, and otherwise shall administer the Plan in
accordance with its terms. The Plan Administrator shall have such powers and
duties as may be necessary to discharge its functions under the Plan,
including, but not limited to the following:
(a) [Construction] exclusive authority to construe and interpret the
Plan, decide all questions of eligibility and determine the amount, manner and
time of payment of any benefits under the Plan;
(b) [Forms] to require Participants (i) to complete and file with it
such forms as the Plan Administrator finds necessary for the administration of
the Plan and (ii) to furnish all pertinent information requested by the Plan
Administrator, and to rely upon all such forms and information furnished,
including each Participant's mailing address;
(c) [Procedures] to prescribe procedures to be followed by
Participants or Beneficiaries filing applications for benefits;
(d) [Rules] to promulgate uniform rules and regulations whenever in the
opinion of the Plan Administrator such rules and regulations are required by
the terms of the Plan or would facilitate the effective operation of the Plan;
(e) [Information] to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information explaining the Plan,
and to receive from Participants such information as shall be necessary for the
proper administration of the Plan;
(f) [Annual Reports] to prepare and furnish to Participants such annual
reports with respect to the administration of the Plan as are required by ERISA
or as are reasonable and appropriate; and
(g) [Records Review] to receive and review the periodic valuation of
the Plan, and to receive, review and keep
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on file (as it deems convenient and proper) reports of benefit payments by the
Trustee and reports of disbursements for expenses.
SECTION 9.02 CLAIMS PROCEDURE. The Plan Administrator shall make
all determinations as to the right of any person to receive a distribution.
Any denial by the Plan Administrator of a claim for a distribution under the
Plan by an Employee, Participant, Beneficiary or other person (collectively
referred to as "claimant") shall be stated in writing by the Plan Administrator
and delivered or mailed to the claimant within 90 days after receipt of the
claim, unless special circumstances require an extension of time for processing
the claim. If such an extension of time is required, written notice of the
extension shall be furnished to the claimant prior to the termination of the
initial 90-day period. In no event shall such extension exceed a period of 90
days from the end of the initial period. Any notice of denial shall set forth
the specific reasons for the denial, specific reference to pertinent provisions
of the Plan upon which the denial is based, a description of any additional
material or information necessary for the claimant to perfect his claim with an
explanation of why such material or information is necessary, and an
explanation of claim review procedures under the Plan written to the best of
the Plan Administrator's ability in a manner that may be understood without
legal or actuarial counsel. A claimant whose claim for benefits has been
wholly or partially denied by the Plan Administrator may request, within 90
days following the date of such denial, in a writing addressed to the Plan
Administrator, a review of such denial. The claimant shall be entitled to
submit such issues or comments, in writing or otherwise, as he shall consider
relevant to a determination of his claim, and may include such issues or
comments, in writing or otherwise, as he shall consider relevant to a
determination of his claim, and may include a request for a hearing in person
before the Plan Administrator. Prior to submitting his request, the claimant
shall be entitled to review such documents as the Plan Administrator shall
agree are pertinent to his claim. The claimant may, at all stages of review,
be represented by counsel, legal or otherwise, of his choice, provided that the
fees and expenses of such counsel shall be borne by the claimant. All requests
for review shall be promptly resolved. The Plan Administrator's decision with
respect to any such review shall be set forth in writing and shall be mailed to
the claimant not later than 60 days following receipt by the Plan Administrator
of the claimant's request unless special circumstances, such as the need to
hold a hearing, require an extension of time for processing, in which case the
Plan Administrator's decision shall be so mailed not later than 120 days after
receipt of such request.
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SECTION 9.03 SPECIAL RULING. In order to resolve problems
concerning the Plan and to apply the Plan in unusual factual circumstances, the
Plan Administrator may make special rulings. Such special rulings shall be in
writing on a form to be developed by the Plan Administrator. In making its
rulings, the Plan Administrator may consult with legal, accounting, actuarial,
investment, and other counsel or advisers. Once made, special rulings shall be
applied uniformly, except that the Plan Administrator shall not be bound by
such rulings in future cases unless the factual situation of a particular case
is identical to that involved in the special ruling. Special rulings shall be
made in accordance with all applicable law and in accordance with the Plan. It
is not intended that the special ruling procedure will be a frequently used
device, but that it should be followed only in extraordinary situations. The
Plan Administrator at all times shall have the final decision as to whether
resort shall be made to this special ruling feature.
SECTION 9.04 SPECIFIC ALLOCATION OF FIDUCIARY RESPONSIBILITIES
BETWEEN NAMED FIDUCIARIES. The Employer and the Trustee shall be the "Named
Fiduciaries" of the Plan, within the meaning of that term as described in
ERISA, and shall have only those duties, responsibilities, and obligations
(referred to collectively as "fiduciary duties") as specifically are given them
under the Plan or as otherwise are imposed by applicable law. The fiduciary
duties given by the Plan are as follows:
(a) Except as otherwise specifically provided herein, the Employer
shall have the sole responsibility for making contributions to the Fund and for
fulfilling its functions as Plan Administrator. The Employer shall have the
sole authority to appoint and remove the Trustee and to amend or terminate, in
whole or in part, the Plan. The Employer shall not be responsible for the
management, investment, or safe-keeping of the assets of the Fund. The
Employer periodically shall review the performance of the Trustee. In this
regard, the Employer is authorized to request such written reports from the
Trustee as it deems necessary. The Employer as Plan Administrator also shall
have the sole responsibility for the administration of the Plan as described
throughout the Plan.
(b) Except as otherwise specifically provided herein and in Article 8
in the case of the appointment of an Investment Manager and Custodian, the
Trustee shall have the sole responsibility for the management, investment, and
safe-keeping of the assets of the Fund held by the Trustee under the Plan and
for the distribution of Participants' benefits in accordance with written
instructions from the Plan Administrator. In addition, the Trustee shall
provide to the
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Employer such information as the Employer may deem necessary or desirable to
permit the timely filing of all reports required by ERISA.
SECTION 9.05 AUTHORIZATION FOR FURTHER ALLOCATION OF FIDUCIARY
DUTIES. The Named Fiduciaries may, upon written agreement between them,
allocate their fiduciary duties under the Plan between themselves in a manner
different from that stated above; provided, however, that except as otherwise
specifically provided in the Plan, the Trustee at all times shall be solely
responsible for the management, investment, and safe-keeping of the assets of
the Fund. The Named Fiduciaries each warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction,
information, or action. Furthermore, each of them may rely upon any such
direction, information or action of the other as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information, or action. It is intended under the Plan that the
Named Fiduciaries each shall be responsible for the proper exercise of its own
powers, duties, responsibilities, and obligations under the Plan and shall not
be responsible for any act or failure to act of the other, and neither of them
guarantees the Fund assets in any manner against investment loss or
depreciation of asset value.
SECTION 9.06 EMPLOYMENT OF ADVISERS. The Named Fiduciaries shall
have the authority to employ such legal, accounting, actuarial, and financial
counsel and advisers, as they shall deem necessary in connection with the
performance of their duties under the Plan, and to act in accordance with the
advice of such counsel and advisers. Except as otherwise provided in the Plan,
the fees and expenses of such counsel and advisers shall be borne by the Fund
unless otherwise directed by the Employer.
SECTION 9.07 DELEGATION TO OFFICERS OR EMPLOYEES. The Employer
shall have the power to delegate its fiduciary duties under the Plan to
officers or employees of the Employer and to other persons, all of whom, if
employees of the Employer, shall serve without compensation. In no event,
however, shall the Trustee be permitted to delegate any of its fiduciary duties
under the Plan.
SECTION 9.08 INDEMNIFICATION. Effective March 31, 1992, the
Employer may, to the extent not inconsistent with or in violation of its bylaws
and the laws of its state of incorporation, indemnify and hold harmless such
persons as may be deemed "fiduciaries" (as that term is defined in ERISA or
otherwise) with respect to the Plan from any and all claims, loss, damages,
expenses (including reasonable counsel fees
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approved by the Employer), and liability (including any reasonable amounts paid
in settlement with the Employer's approval) arising out of any act or omission
of such fiduciaries incurred in the capacity of "fiduciary" of the Plan as that
term is defined in ERISA or otherwise.
SECTION 9.09 FIDUCIARY LIABILITY INSURANCE. Effective March 31,
1992, the Employer may purchase such policy or policies of fiduciary liability
insurance as it shall deem necessary or appropriate to protect any person
acting as a "fiduciary" of the Plan, as that term is defined in ERISA or
otherwise, from any liability which may be incurred as a result of the
performance of fiduciary duties with respect to the Plan, other than liability
arising out of the knowing or willful misconduct of such fiduciary.
SECTION 9.10 BONDING. The Employer shall purchase such surety bonds
covering fiduciaries and others as may be required pursuant to Section 412 of
ERISA.
ARTICLE 10
AMENDMENT, TERMINATION AND MERGER
SECTION 10.01 AMENDMENT OF THE PLAN.
(a) Employer's Right to Amend. The Board of Directors reserves the
right to make any amendment or amendments to the Plan, with or without
retroactive effect, which, except as provided in Sections 3.02(f) and (g), do
not cause any part of the Fund to be used for, or diverted to, any purpose
other than the exclusive benefit of Participants and their Beneficiaries, and
which do not operate to deprive any Participant or Beneficiary of any vested
rights hereunder. Provided, however, that the Employer may make any amendment
it determines necessary or desirable, with or without retroactive effect, to
comply with ERISA or the Code, or regulations issued thereunder. Amendment of
the Plan shall be made by resolution of the Employer's board of directors, or
by any person or persons authorized by resolution of said board to make
amendments as authorized.
(b) Operation of Amendments. Except as may be specifically provided
otherwise in the Plan, or in any amendment thereto, each and every amendment to
the Plan shall operate prospectively only from the effective date of the
amendment, and the rights and obligations of an Employee, Participant, or
Beneficiary of a Participant, who retires, dies, or otherwise terminates
employment with the Employer prior to the effective date of any amendment shall
be
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determined without regard to such amendment, on the basis of the Plan terms in
effect on the date of retirement, death, or other termination of employment.
(c) Amendment to Vesting Provisions. In the case of any amendment to
the provisions of the Plan relating to nonforfeitable rights based on Years of
Service, each Participant (i) who has completed at least three Years of Service
and (ii) whose nonforfeitable rights are adversely affected by the amendment,
may elect, during the election period, to have his nonforfeitable rights
determined without regard to such amendment. The election period must begin no
later than the date the amendment is adopted and end no later than the latest
of (1) the date which is 60 days after the day the amendment is adopted, (2)
the date which is 60 days after the day the amendment becomes effective, or (3)
the date which is 60 days after the day the Participant is issued written
notice of the amendment.
SECTION 10.02 TERMINATION OF THE PLAN.
(a) Termination. Although it is intended that this Plan shall be
permanent, the Employer reserves and shall have the right at any time to
discontinue its contributions hereunder and to terminate or partially terminate
the Plan hereby created, by delivering to the Trustee written notice of such
discontinuance or termination, but only upon the condition that action is
taken, under the terms hereof, or otherwise, as shall render it impossible,
except as provided in Sections 3.02(f) and (g), for any part of the fund to be
used for, or diverted to purposes other than for the exclusive benefit of
Participants and their Beneficiaries. If the Plan is terminated, or if there
is a complete discontinuance of contributions for any reason, the Employer may,
in its sole discretion, continue the Fund for the exclusive benefit of
Participants and their Beneficiaries or distribute the assets remaining in the
Fund to Participants and their Beneficiaries. In the event of the dissolution,
merger, consolidation or reorganization of the Employer, the Plan shall
terminate and the Fund shall be liquidated unless the Plan is continued by a
successor to the Employer in accordance with Section 10.03(b).
(b) Termination and Transfer to New Plan. If the Employer notifies the
Trustee in writing (i) that it has established another plan providing
comparable benefits to this Plan, (ii) that such other Plan is qualified under
Code Section 401(a), and (iii) that the Employer intends to discontinue
contributions under this Plan due to the liabilities created under the new
plan, then, upon further written direction from the Employer, the Trustee shall
cause the Fund to be
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transferred to such newly created plan. Thereafter this Plan shall cease to
have any effect and the rights of all parties shall be determined under the new
plan.
(c) Rights upon Termination. If the Employer should terminate or
partially terminate the Plan, or if the Employer should completely discontinue
contributions to the Fund, or the Employer should liquidate and dissolve, or if
a receiver of the Employer is appointed, or if the Employer should terminate
the Fund, or if the Plan should be wholly or partially terminated for any other
reason, the Accounts of all Participants as then appearing upon the records of
the Trustee (other than Accounts of former Employees who have terminated
employment and who have incurred a Break in Service), or in the case of partial
termination the Accounts of affected Participants, shall become fully vested,
the amounts carried in said Accounts shall be revalued and adjusted as
hereinbefore provided, and said Accounts (after payment of expenses properly
chargeable to the Fund and allocated among the Accounts) shall be distributed
to affected Participants and Beneficiaries or held in a wasting trust for
distribution in due course as otherwise provided by the Plan.
(d) Manner of Distribution. To the extent that no discrimination in
value results, any distribution after termination of the Plan may be made, in
whole or in part, in cash, in securities or other assets in kind; or in
nontransferable annuity contracts, as the Employer in its discretion may
determine. All non-cash distributions shall be valued at fair market value at
the date of distribution. The Trustee shall not effect such distribution until
written evidence of approval of the Commissioner of Internal Revenue or his
delegate of such termination and distribution shall have been submitted to the
Trustee.
SECTION 10.03 MERGER OR CONSOLIDATION OF PLANS.
(a) Predecessor Employer. Employment with a predecessor employer
acquired by the Employer shall be considered service with the Employer under
this Plan to the extent required by the Code and ERISA.
(b) Successor Employer. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be made by which
the Plan will be continued by the successor, and in that event, such successor
shall be substituted for the Employer under the Plan. The substitution of the
successor shall constitute an assumption of Plan liabilities by the successor
and the successor shall have all of the powers, duties and responsibilities of
the Employer under the Plan.
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(c) Merger or Consolidation. In the event of any merger or
consolidation of the Plan with, or transfer in whole or in part of the assets
and liabilities of the Plan to, another plan of deferred compensation
maintained or to be established for the benefit of all or some of the
Participants of this Plan, the assets of the Plan applicable to such
Participants shall be transferred to the other plan only if:
(1) Each Participant would (if either this Plan or the other plan
then terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation or transfer
(if this Plan had been terminated);
(2) Resolutions of the board of directors of the Employer under
this Plan, and of any new or successor employer of the affected Participants,
shall authorize such transfer of assets; and, in the case of the new or
successor employer of the affected Participants, its resolutions shall include
an assumption of liabilities with respect to such Participants' inclusion in
the new employer's plan; and
(3) Such other plan is qualified under Code Sections 401(a) and
501(a).
SECTION 10.04 NOTICE. Affected Participants shall be given notice of
any amendments to, and termination or merger of, the Plan in accordance with
ERISA.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.01 APPROVAL OF COMMISSIONER OF INTERNAL REVENUE AND
SECRETARY OF DEPARTMENT OF LABOR. The Plan and any amendments thereto are
contingent upon and subject to obtaining and retaining such approval of the
Commissioner of Internal Revenue and of the Secretary of the Department of
Labor as the Employer may find necessary to establish the deductibility for
federal income tax purposes of contributions made by the Employer under the
Plan, and qualification of the Fund for tax exemption under the provisions of
Chapter 1 or other applicable provisions of the Code, and the qualification of
the Plan under ERISA. Any modification or amendment of the Plan or of the
trust may be made retroactively by the Employer, if necessary, to qualify or
maintain the Plan as a plan meeting the
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requirements of ERISA of the Code, and of regulations issued thereunder, or of
any other applicable provisions of federal law.
SECTION 11.02 PAYMENTS FOR THE BENEFIT OF PAYEE. In the event that
the Employer shall find that any person to whom a benefit is payable under the
terms of the Plan is unable to care for his affairs because of illness or
accident, is otherwise mentally or physically incompetent, or is unable to give
a valid receipt, the Employer may cause the payments becoming due to such
person to be paid to another individual for such person's benefit, without
responsibility of the part of the Employer to follow the application of such
payment. Any such payment shall be a payment for the account of such person
and shall operate as a complete discharge of the Employer from all liability
therefor under the Plan.
SECTION 11.03 NON-ALIENATION OF BENEFITS.
(a) The provisions of this paragraph (a) shall apply to the extent
permitted by law. No right or benefit provided for in the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge the same shall be void. No such
right or benefit shall be in any manner liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person entitled to such
right or benefit. No such right or benefit shall be subject to garnishment,
attachment, execution or levy of any kind. The foregoing restrictions shall
not apply to any qualified domestic relations order, as defined in ERISA
Section 206(d)(3)(B), or to enforcement of federal tax levies as provided in
Treasury Regulation Section 1.401(a)-13(b)(2).
(b) Notwithstanding the provisions of paragraph (a), however, the
Employer may provide for the deduction from the monthly benefit payable to any
retired Participant who elects to continue under any group hospitalization or
group medical/surgical insurance available to retired Participants, an amount
equal to the contribution rate from time to time established for such insurance
as certified by the Employer. The Employer shall provide for the payment of
such amount either to the organization providing such insurance or the
Employer, as agent, for transmittal to such organization. The amount deducted
to pay for such insurance shall not exceed 10% of the retired Participant's
benefit expressed on a monthly basis for life. A Participant's elections to
continue insurance coverage and to have payment made from his benefit shall at
all times be revocable.
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SECTION 11.04 EMPLOYER'S RIGHTS. While the Employer believes in the
benefits, policies and procedures described in the Plan, the language used in
the Plan is not intended to create, nor is it to be construed to constitute, a
contract of employment between the Employer and any of its Employees. The
Employer retains all of its rights to discipline or discharge Employees or to
exercise its rights as to incidents and tenure of employment. Employees retain
the right to terminate their employment at any time, for any reason or for no
reason, with or without notice, and the Employer retains a similar right.
SECTION 11.05 LITIGATION. In order to protect the Fund against
depletion as a result of litigation, in the event that any Participant,
Employee, Beneficiary, or spouse shall bring a legal or equitable action
against the Plan or against any fiduciary of the Plan, the result of which
shall be adverse to such Participant, Employee, Beneficiary, or spouse, or in
the event that the Plan or any fiduciary of the Plan shall find it necessary to
bring any legal of equitable action against any Participant, Employee,
Beneficiary, or spouse, or any other person claiming an interest by or through
such person, the cost to the Plan or to a fiduciary of the Plan of bringing or
defending such suit, as the case may be, shall be charged, unless the Employer
determines that such course would be inequitable under all the circumstances,
to such extent as is possible, directly to the Account of such Participant,
Employee, Beneficiary, or spouse, if any, and only the excess, if any, of such
costs over and above the amount of such Account shall be included in the
expenses of the Fund.
SECTION 11.06 ADDRESSES AND MAILING OF NOTICES AND CHECKS. Each
recipient of benefits from the Plan shall be responsible for furnishing the
Employer with his address. Any notices required or permitted to be given
hereunder shall be deemed given if directed to such address and mailed by
regular United States mail. If any check mailed by regular United States mail
to such address is returned, mailing of checks will be suspended until a
correct address is furnished by the intended recipient. In the event that all
or any portion of the nonforfeitable benefit payable to a Participant or
Beneficiary remains unpaid at the expiration of three years after such benefit
first became payable, solely by reason of the inability of the Plan
Administrator (after sending a registered letter, return receipt requested, to
the last known address, and after further diligent effort) to determine the
address of such Participant or Beneficiary, the remaining Account balance shall
be forfeited and allocated to the Accounts of eligible Participants in
accordance with the provisions of Article 3. In the event that a Participant
or Beneficiary is located subsequent to his Account balance being forfeited in
accordance with the foregoing sentence, the amount forfeited shall be restored
at the end of the Plan Year in
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which the Participant or Beneficiary is located. Funds for making the restoral
shall be obtained from the following sources in the order indicated: first,
from any forfeitures that occur during the Plan Year in which the Participant
is located, second, from the Employer contribution to the Fund for such Plan
Year and finally, from any earnings of the Fund which occur in such Plan Year.
Distribution of a benefit will commence to the reallocated Participant or
Beneficiary at the time and in the manner specified pursuant to Article 6, but
in no event earlier than 60 days after the end of the Plan Year in which the
Participant or Beneficiary is relocated, unless the Plan Administrator waives
such latter restriction.
SECTION 11.07 WRITTEN EXPLANATION. The Employer shall supply a
written explanation, in the form of a summary plan description as contemplated
by ERISA, to each Participant, and to each Beneficiary receiving benefits under
the Plan, in order to set forth in simple language the terms and conditions of
the Plan and amendments thereto. Provided, however, that such explanation
shall not create rights for any Participant, Employee, Beneficiary, or spouse,
that are not contemplated by the Plan, and in the event of any conflict of
interpretation between such explanation and the Plan, the terms of the Plan
shall always control.
SECTION 11.08 NOTICE OF SERVICE AND AGE. Each Participant may be
informed by the Employer in writing of his age and service as of the Effective
Date, based on the Employer's records of employment, and thereafter from time
to time as the Employer may deem necessary. Such age and service credits shall
be considered correct and final and no contrary claims concerning them may be
raised unless the Participant files objection with the Employer in writing
within 30 days following receipt of such notice by the Participant. In the
case of a dispute over the Participant's correct age, the Employer may require
the Participant to furnish a birth certificate issued by the proper public
authority or some other documented evidence of his age, satisfactory, in its
discretion, to the Employer.
SECTION 11.09 ACTION BY EMPLOYER. Unless otherwise provided herein,
whenever the Employer under the terms of the Plan is permitted or required to
do or perform any act, such act shall be done by the authority of the
Employer's board of directors and evidenced by proper resolution in consent
form or duly certified by the secretary of the Employer, or by such officer of
the Employer who may, by proper resolution, be duly authorized by the board of
directors.
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SECTION 11.10 CONSTRUCTION.
(a) Wherever any words are used herein in the masculine gender, they
shall be construed as though they also were used in the feminine gender in all
cases where they would so apply, and wherever any words are used herein in the
singular form, they shall be construed as through they also were used in the
plural form in all cases where they would so apply.
(b) Headings of Sections and paragraphs of this instrument are inserted
for convenience of reference. They constitute no part of the Plan and are not
to be considered in the construction hereof.
(c) If any provisions of the Plan shall be for any reason invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect.
ARTICLE 12
DEFINITIONS
SECTION 12.01 "ACCOUNT" means the interest of a Participant in the
Fund as determined as of the end of each Plan Year and as reflected in the
records maintained for the Fund. Where appropriate, a Participant's Account
may be divided into separate sub-accounts, including an Employer Contribution
Account, a Rollover Contribution Account, and Employee Before-Tax and After-Tax
Contribution Accounts and an Employee Stock Ownership Account, which may be
mere bookkeeping entries or individually or collectively segregated funds, as
determined by the Trustee in accordance with the Trustee's powers.
SECTION 12.02 "BENEFICIARY" means the beneficiary or beneficiaries of
the Participant as designated pursuant to the provisions in Article 6.
SECTION 12.03 "BREAK IN SERVICE" means a Plan Year (or such other
twelve month period as is used under the Plan to measure an individual's Years
of Service) in which any Employee fails to complete more than 500 Hours of
Service. Notwithstanding the first sentence of this definition, a Break in
Service shall not be deemed to exist if the Employee's failure to complete more
than 500 Hours of Service in the relevant twelve month period is due solely to
an authorized leave of absence and the Employee returns to the employment of
the Employer on or before the expiration of such authorized leave of absence.
An authorized leave of absence means any
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absence granted on prior approval of the Employer on the basis of the
Employer's employment policies, which policies shall be applied uniformly to
all Employees. A Break in Service shall not be deemed to occur as the result
of an individual's absence from work for maternity or paternity reasons. Such
an individual shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which the actual Hours of Service cannot be determined, eight (8) Hours
of Service shall be credited for each day of such absence. However, in no
event shall an Employee receive credit for Hours of Service under this
provision in excess of 501 Hours of Service. An absence from work for
maternity or paternity reasons means an absence (i) by reason of pregnancy of
the individual, (ii) by reason of a birth of a child of the individual, (iii)
by reason of the placement of a child with the individual in connection with
the adoption of such child by such individual, or (iv) for purposes of caring
for such child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this provision shall be
credited in the computation period in which the absence begins if necessary to
prevent a Break in Service for that period, or in all other cases, in the
following computation period.
SECTION 12.04 "CODE" means the Internal Revenue Code of 1986, as
amended.
SECTION 12.05 "COMPENSATION" for any Plan Year means a Participant's
regular salary or wages paid within such Plan Year, including overtime,
bonuses, commissions, and severance pay awards, but excluding noncompetition
payments, special bonuses designated by the board of directors for Highly
Compensated Employees and the contribution made on behalf of the Participant
under this Plan or any other fringe benefit program of the Employer and also
excluding any remuneration paid in securities of the Employer. Regular salary
or wages shall be determined before any salary reduction for Comshare's
Flexible Benefit Plan.
Effective for Plan Years commencing July 1, 1989, for all Plan purposes,
an Employee's annual compensation in excess of $200,000, as adjusted from time
to time for cost of living changes under Code Section 401(a)(17), shall not be
taken into account. In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the Plan to the contrary,
for Plan Years beginning on or after July 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA '93
annual compensation limit. The OBRA '93 annual compensation limit is $150,000,
as adjusted by the Commissioner for increases in the cost of living in
accordance of Internal Revenue with Code Section 401(a)(17)(B). The
cost-of-living adjustment in effect
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for a calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after July 1, 1994, any reference in this
Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA '93
annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into account
in determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after July 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
SECTION 12.06 "COMPENSATION POINTS" for any Plan Year means the
number of points of a Participant for purposes of the allocation of Employer
contributions and forfeitures under Article 3, with one point being granted for
each one dollar of Compensation for the Plan Year of such Participant, but with
one point subtracted for each one dollar of such Compensation that was paid at
a time during the Plan Year when the individual was not a Participant in the
Plan. No Compensation Points shall be granted for Compensation in excess of
the Code Section 401(a)(17) limits.
SECTION 12.07 "CUSTODIAN" means any custodian or custodians appointed
pursuant to Article 8 to hold all or any part of the assets of the Fund.
SECTION 12.08 "EFFECTIVE DATE" means October 1, 1995 with respect to
this amended and restated Plan; the original effective date of the Plan is July
1, 1974.
SECTION 12.09 "EMPLOYEE" means any common-law employee of the
Employer excluding any peak-time employees (as determined by Company practice
and policy); provided, however, that a Participant whose employment status is
reclassified to peak-time may continue to participate in the Plan to the extent
that such individual's participation is not terminated under the Break in
Service rules of Article 7. When required by the Code, "Employee" also shall
mean a common-law employee of any other employer required to be aggregated with
the Employer under Code Sections 414(b), (c), (m) or (o) and any leased
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employee deemed to be an employee of the Employer (or of another employer that
is aggregated with the Employer pursuant to the previous provision) as provided
in Code Sections 414(n) or (o).
SECTION 12.10 "EMPLOYER" or "COMPANY" means Comshare, Incorporated
and all members of the same controlled group of trades or businesses, as
defined in Code Section 414(c), which are accepted for participation in the
Plan by Comshare, Incorporated.
SECTION 12.11 "ERISA" means the Employee Retirement Income Security
Act of 1974.
SECTION 12.12 "5-PERCENT OWNER" means any person who owns (or who is
considered as owning within the meaning of Code Section 318) more than 5
percent of the outstanding stock of the Employer or stock possessing more than
5 percent of the total combined voting power of all stock of the Employer.
SECTION 12.13 "FAMILY MEMBER" means, with respect to any Employee,
such Employee's spouse and lineal ascendants or descendants, and the spouses of
such lineal ascendants and descendants, in accordance with Section 414(q)(6)(B)
of the Code.
SECTION 12.14 "FIXED CREDIT ACCOUNT" means a Participant's Account
which has been valued following his retirement, death, or other termination of
employment, and which is maintained in the Fund, pursuant to the rules in
Article 6.
SECTION 12.15 "FUND" means the profit sharing fund established
pursuant to Article 8 and maintained pursuant to the Plan and any trust
instrument(s) or insurance contract(s) executed in connection therewith.
SECTION 12.16 "HIGHLY COMPENSATED EMPLOYEE" means, with respect to
any Plan Year, each Employee who, during the preceding Plan Year (or calendar
year, if the Employer so chooses as permitted under applicable Treasury
regulations):
(a) was at any time a 5-Percent Owner,
(b) received annual compensation from the Employer in excess of $75,000
(as adjusted by the Secretary of the Treasury),
(c) received annual compensation from the Employer in excess of $50,000
(as adjusted by the Secretary of the Treasury) and was among the highest paid
20% of all Employees for such year,
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(d) was at any time an officer of the Employer and received annual
compensation in excess of 50% of the applicable dollar limitation of Code
Section 415(b)(1)(A) in effect for such year, and each Employee who, during
such Plan Year (or calendar year, if the Employer so chooses as permitted under
applicable Treasury regulations) was at any time a 5-Percent Owner, or met the
requirements of (b), (c) or (d) and was one of the 100 highest paid Employees
during such year. Provided, however, that the following special rules also
shall apply for purposes of the foregoing determination of Highly Compensated
Employee:
(1) Under (d) above, no more than 50 Employees (or if less, the
greater of 3 Employees or 10 percent of the Employees) shall be treated as
officers;
(2) If, for any year, no officer has compensation in excess of
the amount described in (d) above, then in any event the highest paid officer
of the Employer for the year shall be treated as being described in (d);
(3) To determine the highest paid 20% of all Employees under (c)
above and to determine the group of Employees to be considered under (1) above,
the following Employees shall be ignored:
(A) Employees who have not completed 6 months of service;
(B) Employees who normally work less than 17.5 hours per
week;
(C) Employees who normally work during not more than 6
months within any year; and
(D) Employees who have not attained age 21.
The term "Highly Compensated Employee" also shall include a former Employee who
separated from service prior to the Plan Year of determination and who was an
active Highly Compensated Employee (as previously defined) for either (A) the
Plan Year of the Employee's separation or (B) any Plan Year ending on or after
the Employee's 55th birthday. Provided, however, that any Employee who
separated from service prior to January 1, 1987 will be included as a Highly
Compensated Employee only if he was a 5-Percent Owner or received Compensation
in excess of $50,000 during either the Plan Year of his separation (or the
previous year) or any Plan Year ending on or after his 55th birthday (or the
last year ending before his 55th birthday).
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SECTION 12.17 "HOUR OF SERVICE" means:
(a) each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer during the applicable period;
(b) each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed due to vacation, holiday, illness, incapacity, layoff, jury duty, or
leave of absence; and
(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer.
(d) each hour for which a former employee is paid, or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed due to the termination of employment and the award of severance
pay. The "severance pay service" hereby given effect shall include the maximum
period of service for which such salary continuation payments could have
continued, disregarding the premature termination of severance benefits due to
new employment, unless the former employee has by written request to the Plan
Administrator elected an earlier date (but in such case a date subsequent to
the last allocation date for which the Employee received any Compensation,
whether wages, salary continuation, severance pay or vacation pay) as of which
the crediting of Hours of Service will cease.
Notwithstanding the foregoing, an Employee's "Hours of Service" shall not
include:
(e) hours in excess of 501 Hours of Service under (b) above, or under
(c) above with respect to periods described in (b) above, on account of any
single continuous period during which the Employee performs no duties for the
Employer, whether or not such period occurs in a single Plan Year or other
computation period used under the Plan;
(f) hours for which the Employee is directly or indirectly paid, or
entitled to payment, on account of a period during which no duties are
performed if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable workers compensation, or unemployment
compensation or disability insurance laws;
(g) hours for a period during which payments are made to the Employee
solely to reimburse the Employee for medical and medically related expenses
incurred by the Employee; and
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(h) hours credited under (c) above if such hours are also credited to
the Employee under either (a) or (b) above.
Any questions concerning the determination or crediting of Hours of Service
under the above definition shall be resolved in accordance with Sections
2530.200b-2(b) and (c) of the Department of Labor Rules and Regulations for
Minimum Standards, which are incorporated herein by reference. Hours of
Service shall be determined from records of the Employer for hours worked and
for hours for which payment is made or due.
In lieu of the foregoing, and subject to (1) and (2) below, the Employer
may, in its discretion, determine Hours of Service for some or all purposes
under the Plan, or for some or all Employees, by crediting to an Employee 45
Hours of Service for each week for which the Employee would be credited with at
least one Hour of Service under the regular definition for Hour of Service in
the first paragraph of this definition.
(1) Provided, however, that use of the equivalency above shall be
subject to the special rules of Sections 2530.200b-3(e)(4) and (6) of the
Department of Labor Rules and Regulations for Minimum Standards in the case of
any payments to an Employee not made on the basis of units of time, and in the
case of periods of time which extend into two computation periods under the
Plan, respectively.
(2) Provided further, that Hours of Service shall not be
determined under the above equivalency if such determination would result in
discrimination prohibited under Code Section 401(a)(4).
SECTION 12.18 "INVESTMENT MANAGER" means any investment manager or
investment managers appointed pursuant to Article 8 to direct the Trustee (or
Custodian) as to the investment of all or a portion of the Fund.
SECTION 12.19 "NAMED FIDUCIARY" means a fiduciary with respect to the
Plan who is named in the Plan, or who, pursuant to the procedures of the Plan,
is identified as a fiduciary by the Employer.
SECTION 12.20 "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean an
Employee of the Employer who is neither a Highly Compensated Employee nor a
Family Member.
SECTION 12.21 "NORMAL RETIREMENT AGE" means the later of age 65 or
the fifth anniversary of an Employee's commencement of participation in the
Plan.
SECTION 12.22 "PARTICIPANT" means an Employee who has met the
eligibility requirements specified in Article 2, who
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has commenced participation in the Plan in accordance with that Article, and
whose participation has not terminated under the Break in Service rules of
Article 7.
SECTION 12.23 "PLAN" means the Profit Sharing Plan of Comshare,
Incorporated as described herein.
SECTION 12.24 "PLAN ADMINISTRATOR" means the person(s) or
organization(s) specifically designated by Article 9 as the administrator of
the Plan.
SECTION 12.25 "PLAN YEAR" means the 12-month period commencing on
July 1st and ending on the following June 30th.
SECTION 12.26 "RELATED ENTITY" or "RELATED ENTITIES" means the
Employer and all corporations, partnerships, or sole proprietorships that
become affiliated with or under common ownership or control with the Employer
within the meaning of Code Sections 414(b), (c) or (m).
SECTION 12.27 "TRUSTEE" means the person(s) or organization(s) acting
as trustee under the Plan and of the Fund in accordance with any trust
instrument(s) executed in connection therewith.
SECTION 12.28 "VALUATION DATE" or "ACCOUNTING DATE" means the last
day of each calendar quarter and such other dates upon which the Trustee
performs a valuation of the Fund (or any portion thereof).
SECTION 12.29 "YEAR OF SERVICE", subject to the provisions below, and
to the Break in Service rules in Article 7, means each Plan Year in which an
individual is credited with 1,000 or more Hours of Service with the Employer.
Provided, however, solely for purposes of determining an individual's
eligibility to participate in the Plan under Article 2 and his continued
participation under the Break in Service rules of Article 7, an individual also
shall be deemed to have completed one Year of Service on the one year
anniversary date of the day on which he first performed an Hour of Service with
the Employer if, and only if, he has been credited with 1,000 or more Hours of
Service with the Employer during such one year period.
Provided further, however, that an individual's Years of Service also
shall include Plan Years, measured on a 1,000 Hours of Service per Plan Year
basis, during which such individual:
(a) was employed by the Employer in a category of employees excluded
from the Plan;
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(b) was employed by an employer which is a member of a controlled group
or corporation [as defined in Code Section 1563(a) without regard to
Subsections (a)(4) and (e)(3)(C)] including the Employer, by an employer which
is a trade or business under common control [as defined in Code Section 414(b)
or (c)] with the Employer, or by an employer which is an affiliated service
group [as defined in Code Section 414(m)(2)] including the Employer;
(c) was employed by a predecessor employer of the Employer, the plan of
which predecessor is the Plan maintained by the Employer; and
(d) was employed by a predecessor employer of the Employer, even though
the Plan is not the plan maintained by the predecessor employer, but only if
service with such predecessor employer is required to be included in the
individual's Years of Service by regulations under Code Section 414(a)(2).
Notwithstanding the foregoing rules, in no event shall an individual be
credited with more than one Year of Service in any Plan Year or in any other
twelve month computation period.
Any person formerly employed by Orion Microsystems, Inc. who became an
Employee on January 24, 1990 shall receive Years of Service credit from his
most recent date of hire by Orion Microsystems, Inc. The Years of Service
credit granted pursuant to this paragraph shall be used only to determine the
Employee's eligibility to participate under Section 2.01 and shall not be used
to determine the Employee's vested interest under Section 5.06. The number of
Years of Service credited to a former employee of Orion Microsystems, Inc.
pursuant to this paragraph shall be determined under the service credit rules
of this Section 12.29.
Any person formerly employed by 54 North Limited, Inc. who became an
Employee on July 18, 1990 shall receive Years of Service credit from his most
recent date of hire by 54 North Limited, Inc. The Years of Service credit
granted pursuant to this paragraph shall be used only to determine the
Employee's eligibility to participate under Section 2.01 and shall not be used
to determine the Employee's vested interest under Section 5.06. The number of
Years of Service credited to a former employee of 54 North Limited, Inc.
pursuant to this paragraph shall be determined under the service credit rules
of this Section 12.29.
Any person formerly employed by Execucom Systems, Incorporated who became
an Employee on April 1, 1991 shall receive Years of Service credit from his
most recent date of hire by Execucom Systems, Incorporated. The Years of
Service
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credit granted pursuant to this paragraph shall be used to determine the
Employee's eligibility to participate under Section 2.01 and the Employee's
vested interest under Section 5.06. The number of Years of Service credited to
a former employee of Execucom Systems, Incorporated pursuant to this paragraph
shall be determined under the service credit rules of this Section 12.29.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of
October 1, 1995.
COMSHARE, INCORPORATED
ATTEST:
_______________________________ By: /s/ Kathryn a. Jehle
----------------------------
_______________________________ Kathryn A. Jehle
Senior Vice President and
Chief Financial Officer
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