EXHIBIT 10.5
RETIREMENT PLAN AND TRUST FOR EMPLOYEES OF BANK OF MOUNTAIN VIEW
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER........................ 13
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY............................ 14
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR............................. 14
2.4 RECORDS AND REPORTS................................................ 15
2.5 APPOINTMENT OF ADVISERS............................................ 15
2.6 PAYMENT OF EXPENSES................................................ 16
2.7 CLAIMS PROCEDURE................................................... 16
2.8 CLAIMS REVIEW PROCEDURE............................................ 16
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY.......................................... 17
3.2 EFFECTIVE DATE OF PARTICIPATION.................................... 17
3.3 DETERMINATION OF ELIGIBILITY....................................... 17
3.4 TERMINATION OF ELIGIBILITY......................................... 17
3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE............................ 17
3.6 ELECTION NOT TO PARTICIPATE........................................ 18
ARTICLE IV
CONTRIBUTION AND VALUATION
4.1 PAYMENT OF CONTRIBUTIONS........................................... 18
4.2 ACTUARIAL METHODS.................................................. 18
4.3 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS.......... 18
4.4 QUALIFIED MILITARY SERVICE......................................... 20
ARTICLE V
BENEFITS
5.1 RETIREMENT BENEFITS................................................ 20
5.2 MINIMUM BENEFIT REQUIREMENT FOR TOP HEAVY PLAN..................... 22
5.3 PAYMENT OF RETIREMENT BENEFITS..................................... 24
5.4 DISABILITY RETIREMENT BENEFITS..................................... 24
5.5 DEATH BENEFITS..................................................... 24
5.6 TERMINATION OF EMPLOYMENT BEFORE RETIREMENT........................ 27
5.7 DISTRIBUTION OF BENEFITS........................................... 28
5.8 DISTRIBUTION OF BENEFITS UPON DEATH................................ 34
5.9 TIME OF SEGREGATION OR DISTRIBUTION................................ 37
5.10 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY.................. 37
5.11 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN..................... 38
5.12 EFFECT OF SOCIAL SECURITY ACT...................................... 38
5.13 LIMITATIONS ON DISTRIBUTIONS....................................... 38
5.14 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.................... 39
5.15 LIMITATION OF BENEFITS ON TERMINATION.............................. 39
ARTICLE VI
CODE SECTION 415 LIMITATIONS
6.1 ANNUAL BENEFIT..................................................... 40
6.2 MAXIMUM ANNUAL BENEFIT............................................. 41
6.3 ADJUSTMENTS TO ANNUAL BENEFIT AND LIMITATIONS...................... 42
6.4 ANNUAL BENEFIT NOT IN EXCESS OF $10,000............................ 43
6.5 PARTICIPATION OR SERVICE REDUCTIONS................................ 44
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.............................. 44
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE........................ 45
7.3 OTHER POWERS OF THE TRUSTEE........................................ 46
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................... 48
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES...................... 48
7.6 ANNUAL REPORT OF THE TRUSTEE....................................... 48
7.7 AUDIT.............................................................. 49
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE..................... 49
7.9 TRANSFER OF INTEREST............................................... 50
7.10 TRUSTEE INDEMNIFICATION............................................ 50
7.11 DIRECT ROLLOVER.................................................... 51
ARTICLE VIII
PLAN AMENDMENT
8.1 AMENDMENT.......................................................... 52
ARTICLE IX
PLAN TERMINATION
9.1 TERMINATION........................................................ 53
9.2 LIMITATION OF BENEFITS ON PLAN TERMINATION......................... 55
ARTICLE X
MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
10.1 REQUIREMENTS....................................................... 56
ARTICLE XI
TOP HEAVY
11.1 TOP HEAVY PLAN REQUIREMENTS........................................ 56
11.2 DETERMINATION OF TOP HEAVY STATUS.................................. 56
ARTICLE XII
MISCELLANEOUS
12.1 PARTICIPANT'S RIGHTS............................................... 59
12.2 ALIENATION......................................................... 60
12.3 CONSTRUCTION OF PLAN............................................... 61
12.4 GENDER AND NUMBER.................................................. 61
12.5 LEGAL ACTION....................................................... 61
12.6 PROHIBITION AGAINST DIVERSION OF FUNDS............................. 61
12.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE......................... 62
12.8 INSURER'S PROTECTIVE CLAUSE........................................ 62
12.9 RECEIPT AND RELEASE FOR PAYMENTS................................... 62
12.10 ACTION BY THE EMPLOYER............................................. 62
12.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................. 62
12.12 HEADINGS........................................................... 63
12.13 APPROVAL BY INTERNAL REVENUE SERVICE............................... 63
12.14 UNIFORMITY......................................................... 63
12.15 INTERPRETATION OF AGREEMENT........................................ 63
RETIREMENT PLAN AND TRUST FOR EMPLOYEES OF BANK OF MOUNTAIN VIEW
THIS AGREEMENT, hereby made and entered into this 1st day of
September, 2005, by and between Bank of Mountain View (herein referred to as the
"Employer") and FirsTrust Financial Services, Inc. (herein referred to as the
"Trustee").
WITNESSETH:
WHEREAS, the Employer heretofore established a Pension Plan and Trust
effective May 1, 1984, (hereinafter called the "Effective Date") known as
Retirement Plan and Trust for Employees of Bank of Mountain View (herein
referred to as the "Plan") in recognition of the contribution made to its
successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the provisions
of the Plan affecting the Trustee are amended; and
WHEREAS, as of September 30, 2005, all benefit accruals under the Plan
will be frozen (other than those required pursuant to Section 5.2); and
WHEREAS, as of September 30, 2005, any Eligible Employee who has not
become a Participant as of September 30, 2005 shall not enter and shall not
become a Participant in the Plan on or after September 30, 2005; and
WHEREAS, the Employer now desires to bring this frozen Plan into
compliance with the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986, as amended, and to maintain this frozen Plan and
Trust so that distribution of benefits may be made at such time and in such
manner as provided under the terms of the Plan;
NOW, THEREFORE, effective September 1, 2005, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Accrued Benefit" means the retirement benefit a Participant would
receive at Normal Retirement Date based on the retirement benefit formula set
forth in Section 5.1 of the Plan, multiplied by a fraction, not greater than one
(1), the numerator of which is the Participant's Period of Service and the
denominator of which is the aggregate Period of Service the Participant would
have accumulated if the Participant continued employment until Normal Retirement
Age.
When determining a Participant's Accrued Benefit, the retirement
benefit projected to be provided pursuant to the retirement benefit formula in
Section 5.1 is the monthly benefit to which the Participant would be entitled if
the Participant continued to earn until Normal Retirement Age the same rate of
Average Monthly Compensation upon which the Participant's retirement benefit
formula is based. This rate of Average Monthly Compensation is computed on the
basis of
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Average Monthly Compensation taken into account under the Plan (but not to
exceed the ten years of service immediately preceding the determination).
The Accrued Benefit of each Participant in the Fresh-Start Group,
shall be equal to the greater of (a) or (b):
(a) the Participant's Accrued Benefit determined with respect to
the Normal Retirement Benefit formula provided in Section 5.1 (a).
(b) the sum of (1) the Participant's Frozen Accrued Benefit, if
any, and (2) the Participant's Accrued Benefit determined with respect
to periods beginning after the Fresh-Start Date, except that the
number of Periods of Service taken into account for determining the
offset portion of the monthly retirement benefit pursuant to Section
5.1(a) shall be limited to thirty-five (35) minus the number of
Periods of Service completed by the Participant as of the Fresh-Start
Date.
Notwithstanding anything herein to the contrary, a Participant's
Accrued Benefit attributable to the retirement benefit formula at the close of
any Plan Year coinciding with or next following the Participant's attainment of
Normal Retirement Age shall be equal to the monthly retirement benefit formula
determined pursuant to Section 5.1(d) based upon service and Average Monthly
Compensation determined at the close of any such Plan Year.
Notwithstanding the above, a Participant's Accrued Benefit derived
from Employer contributions shall not be less than the minimum Accrued Benefit,
if any, provided pursuant to Section 5.2.
Furthermore, pursuant to the freezing of benefit accruals under the
Plan on September 30, 2005, no additional benefits shall accrue after such date
(other than those required pursuant to Section 5.2).
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.3 "Actuarial Equivalent" means, effective January 1, 1996, a form of
benefit differing in time, period, or manner of payment from a specific benefit
provided under the Plan but having the same value when computed using
Pre-Retirement Table: 1984 Unisex Pension Table; Post-Retirement Table: 1984
Unisex Pension Table and Pre-Retirement Interest: 6.02; Post- Retirement
Interest: 6.03.
Notwithstanding the foregoing, effective with the later of (1) the
adoption date of an amendment that changes the interest rate or the mortality
table assumptions, or (2) January 1, 1996, the mortality table and the interest
rate for the purposes of determining an Actuarial Equivalent amount (other than
nondecreasing life annuities payable for a period not less than the life of a
Participant or, in the case of a Pre-Retirement Survivor Annuity, the life of
the surviving spouse) shall be the "Applicable Mortality Table" and the
"Applicable Interest Rate" described below. However, if prior to such effective
date, the Plan used an interest rate other than the Pension Benefit Guaranty
Corporation interest rate (or an interest rate or rates based on the Pension
Benefit Guaranty Corporation interest rate) in determining the present value of
a Participant's Accrued Benefit, the mortality table and the interest rate for
the purposes of determining an Actuarial
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Equivalent amount (other than nondecreasing life annuities payable for a period
not less than the life of a Participant or, in the case of a Pre-Retirement
Survivor Annuity, the life of the surviving spouse) shall be the mortality table
and the interest rate specified above or the "Applicable Mortality Table" and
the "Applicable Interest Rate" described below, whichever produces the greater
benefit:
(a) The "Applicable Mortality Table" means the table prescribed
by the Secretary of the Treasury. Such table shall be based on the
prevailing commissioner's standard table (described in Code Section
807(d)(5)(A)) used to determine reserves for group annuity contracts
issued on the date as of which present value is being determined
(without regard to any other subparagraph of Code Section 807(d)(5)).
(b) The "Applicable Interest Rate" means the annual rate of
interest on 30-year Treasury securities determined as of the third
calendar month preceding the first day of the calendar month during
which the Annuity Starting Date occurs. However, except as provided in
Regulations, if a Plan amendment (including this amendment and
restatement) changes the time for determining the "Applicable Interest
Rate" (including an indirect change as a result of a change in the
Plan Year), any distribution for which the Annuity Starting Date
occurs in the one-year period commencing at the time the Plan
amendment is effective (if the amendment is effective on or after the
adoption date) must use the interest rate as provided under the terms
of the Plan after the effective date of the amendment, determined at
either the date for determining the interest rate before the amendment
or the date for determining the interest rate after the amendment,
whichever results in the larger distribution. If the Plan amendment is
adopted retroactively (that is, the amendment is effective prior to
the adoption date), the Plan must use the interest rate determination
date resulting in the larger distribution for the period beginning
with the effective date and ending one year after the adoption date.
Notwithstanding the above, if a benefit is distributed in a
form other than a nondecreasing annuity payable for a period not less
than the life of a Participant or, in the case of a Pre-Retirement
Survivor Annuity, the life of the surviving spouse, the interest rate
used in determining the Actuarial Equivalent of the portion of the
excess/offset portion of the monthly retirement benefit pursuant to
Section 5.1 (a) shall not be less than the lesser of 7.5% or the
"Applicable Interest Rate."
In the case of a distribution (other than nondecreasing life annuities
payable for a period not less than the life of a Participant or, in the case of
a Pre-Retirement Survivor Annuity, the life of the surviving spouse) that was
made in a Plan Year beginning after December 31, 1994, and before the later of
(1) the adoption date of an amendment that changes the interest rate or the
mortality table assumptions, or (2) January 1, 1996, the calculation shall be
made by using the interest rate determined under the regulations of the Pension
Benefit Guaranty Corporation for determining the present value of a lump sum
distribution on plan termination that were in effect on September 1, 1993, and
using the provisions of the Plan as in effect on the day before December 8,
1994; but only if such provisions of the Plan met the requirements of Code
Section 417(e)(3) and Regulation 1.417(e)-1(d) as in effect on the day before
December 8, 1994.
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In the event this Section is amended, the Actuarial Equivalent of a
Participant's Accrued Benefit on or after the date of change shall be determined
(unless otherwise permitted by law or Regulation) as the greater of (1) the
Actuarial Equivalent of the Accrued Benefit as of the date of change computed on
the old basis, or (2) the Actuarial Equivalent of the total Accrued Benefit
computed on the new basis.
1.4 "Administrator" means the Employer unless another person or entity has
been designated by the Employer pursuant to Section 2.2 to administer the Plan
on behalf of the Employer.
1.5 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.6 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, used to determine Top Heavy Plan status
under the provisions of a defined contribution plan included in any Aggregation
Group (as defined in Section 11.2).
1.7 "Anniversary Date" means December 31.
1.8 "Annuity Starting Date" means, with respect to any Participant, the
first day of the first period for which an amount is paid as an annuity, or, in
the case of a benefit not payable in the form of an annuity, the first day on
which all events have occurred which entitles the Participant to such benefit.
1.9 "Average Monthly Compensation" means the monthly Compensation of a
Participant averaged over the 3 consecutive Calendar Years, including periods
prior to the Effective Date of the Plan, which produce the highest monthly
average within the last ten (10) completed years of employment. If a Participant
has less than 3 consecutive Calendar Years of service from date of employment to
date of termination, the Participant's Average Monthly Compensation will be
based on the Participant's monthly Compensation during the Participant's months
of service from date of employment to date of termination. Compensation
subsequent to termination of participation pursuant to Section 3.4 shall not be
recognized.
1.10 "Beneficiary" means the person (or entity) designated as provided in
Section 5.5 to receive the benefits which are payable under the Plan upon or
after the death of a Participant.
1.11 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.12 "Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible
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in gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan as described in Regulation
1.62-2(c)) for a Calendar Year ending with or within the Plan Year.
Notwithstanding the foregoing, if compensation for any prior determination
period is taken into account in determining a Participant's benefits for the
current Plan Year, Compensation means compensation determined pursuant to the
terms of the Plan then in effect.
Compensation shall exclude (a)(l) contributions made by the Employer
to a plan of deferred compensation to the extent that the contributions are not
includible in the gross income of the Participant for the taxable year in which
contributed, (2) Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, (3) any
distributions from a plan of deferred compensation; (b) amounts realized from
the exercise of a non-qualified stock option, or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; (c) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (d) other amounts which receive special tax benefits, or contributions made
by the Employer (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code Section 403(b) (whether or
not the contributions are actually excludable from the gross income of the
Employee).
For purposes of this Section, the determination of Compensation shall
be made by:
(a) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125,
132(f)(4), 402(e)(3), 402(h)(l)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that are treated as
Employer contributions.
Compensation in excess of $150,000 (or such other amount provided in
the Code) shall be disregarded. Such amount shall be adjusted for increases in
the cost of living in accordance with Code Section 40l(a)(17)(B), except that
the dollar increase in effect on January 1 of any calendar year shall be
effective for the Calendar Years beginning with such calendar year. If
Compensation for any prior determination period is taken into account in
determining a Participant's benefits for the current Plan Year, the compensation
for such prior determination period is subject to the applicable annual
compensation limit in effect for that prior period. For this purpose, in
determining benefits in Plan Years beginning on or after January 1,1989, the
annual compensation limit in effect for determination periods beginning before
that date is $200,000 (or such other amount as adjusted for increases in the
cost of living in accordance with Code Section 415(d) for determination periods
beginning on or after January 1,1989 and in accordance with Code Section
40l(a)(17)(B) for determination periods beginning on or after January 1,1994).
For determination periods beginning prior to January 1,1989, the $200,000 limit
shall apply only to Top Heavy Plan Years and shall not be adjusted. For any
short Calendar Year the Compensation limit shall be an amount equal to the
Compensation limit for the calendar year in which the Calendar Year begins
multiplied by the ratio obtained by dividing the number of full months in the
short Calendar Year by twelve (12).
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For Plan Years beginning after December 31, 1996, for purposes of
determining Compensation, the family member aggregation rules of Code Section
401(a)(17) and Code Section 414(q)(6) (as in effect prior to the Small Business
Job Protection Act of 1996) are eliminated. In determining Average Monthly
Compensation, the elimination of the family member aggregation rules are treated
as having been in effect for earlier years.
1.13 "Contract" or "Policy" means any life insurance policy, retirement
income policy or annuity contract (group or individual) issued pursuant to the
terms of the Plan, in the event of any conflict between the terms of this Plan
and the terms of any contract purchased hereunder, the Plan provisions shall
control.
1.14 "Earliest Retirement Age" means the earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
1.15 "Early Retirement Date" means the first day of the month (prior to the
Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55, and has completed at least 15
whole year Periods of Service with the Employer (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still
employed at Early Retirement Age.
A Former Participant who separates from service after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive benefits under this
Plan.
1.16 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to participate
in this Plan unless such Affiliated Employers have specifically adopted this
Plan in writing.
Employees classified by the Employer as independent contractors who
are subsequently determined by the Internal Revenue Service to be Employees
shall not be Eligible Employees.
1.17 "Employee" means any person who is employed by the Employer or
Affiliated Employer, and excludes any person who is employed as an independent
contractor. Employee shall include Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and such Leased Employees do not
constitute more than 20% of the recipient's non-highly compensated work force.
1.18 "Employer" means Bank of Mountain View and any successor which shall
maintain this Plan; and any predecessor which has maintained this Plan. The
Employer is a corporation, with principal offices in the State of Arkansas.
1.19 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or
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has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan.
1.20 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1 of each year and ending the following December 31.
1.21 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.22 "415 Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan as described in Regulation
1.62-2(c)) for a Calendar Year ending with or within the Plan Year.
"415 Compensation" shall exclude (a)(1) contributions made by the
Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the gross income of the Employee).
For purposes of this Section, the determination of "415 Compensation"
shall include any elective deferral (as defined in Code Section 402(g)(3)), and
any amount which is contributed or deferred by the Employer at the election of
the Participant and which is not includible in the gross income of the
Participant by reason of Code Sections 125, 132(f)(4) or 457.
1.23 "Fresh-Start Date" generally means the last day of the Plan Year
preceding a Plan Year for which any amendment of the Plan that directly or
indirectly affects the amount of a Participant's benefit determined under the
current benefit formula (such as an amendment to the definition of Compensation
used in the current benefit formula or a change in the Normal Retirement Age of
the Plan) is made effective. If this Plan has had a fresh-start for all
Participants, and in a subsequent Plan Year is aggregated for purposes of Code
Section 40l(a)(4) with another plan that did not make the same fresh-start,
then this Plan will have a fresh-start on the last day of the Plan Year
preceding the Plan Year during which the plans are first aggregated.
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1.24 "Fresh-Start Group" means all Participants who have Accrued Benefits
as of the Fresh-Start Date and have at least one Hour of Service with the
Employer after that date.
1.25 "Frozen Accrued Benefit" means a Participant's Accrued Benefit under
the Plan determined as of the latest Fresh-Start Date as if the Participant
terminated employment with the Employer as of the latest Fresh-Start Date, or
the date the Participant actually terminated employment with the Employer, if
earlier, without regard to any amendment made to the Plan after that date other
than amendments recognized as effective as of or before the date under Code
Section 401(b) or Regulation 1.401(a)(4)-11(g). If the Participant has not had a
Fresh-Start Date, the Participant's Frozen Accrued Benefit will be zero.
If, as of the Participant's latest Fresh-Start date, the amount of a
Participant's Frozen Accrued Benefit was limited by the application of Code
Section 415, then the Participant's Frozen Accrued Benefit will be increased for
years after the latest Fresh-Start Date to the extent permitted under Code
Section 415(d)(l). In addition, the Frozen Accrued Benefit of a Participant
whose Frozen Accrued Benefit includes the top-heavy minimum benefits provided in
Section 5.2, will be increased to the extent necessary to comply with the
average compensation requirement of Code Section 416(c)(1)(D)(i).
If: (a) the Plan's normal form of benefit in effect on the
Participant's latest Fresh-Start Date is not the same as the normal form under
the Plan after such Fresh-Start Date and/or (b) the Normal Retirement Age for
any Participant on that date was greater than the Normal Retirement Age for that
Participant under the Plan after such Fresh-Start Date, the Frozen Accrued
Benefit will be expressed as an actuarially equivalent benefit in the normal
form under the Plan after the Participant's latest Fresh-Start Date, commencing
at the Participant's Normal Retirement Age under the Plan in effect after such
latest Fresh-Start Date.
1.26 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means any Employee
who:
(a) was a "five percent owner" as defined in Section 1.30(c) at
any time during the "determination year" or "look-back year"; or
(b) for the "look-back year" had "415 Compensation" from the
Employer in excess of $80,000. The $80,000 amount is adjusted at the
same time and in the same manner as under Code Section 415(d), except
that the base period is the calendar quarter ending September 30,
1996.
The "determination year" means the Plan Year for which testing is
being performed, and the "look-back year" means the immediately preceding twelve
(12) month period.
A highly compensated former Employee is based on the rules applicable
to determining Highly Compensated Employee status as in effect for the
"determination year," in accordance with Regulation 1.414(q)-1T, A-4 and IRS
Notice 97-45 (or any superseding guidance).
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code
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Section 91l(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are covered
by a plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of Leased Employees for
this purpose shall be applied on a uniform and consistent basis for all of the
Employer's retirement plans. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they performed
services during the "determination year."
1.27 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the component of the Plan being tested.
1.28 "Hour of Service" means each hour for which an Employee is paid or
entitled to payment for the performance of duties for the Employer.
1.29 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.30 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of the Employee's or former Employee's Beneficiaries) is considered a
Key Employee if the Employee, at any time during the Plan Year that contains the
"Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(l)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section 415(c)(l)(A) for the calendar year in
which such Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
9
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in
determining whether an individual has "415 Compensation" of more than
$150,000, "415 Compensation" from each employer required to be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(l)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.31 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached Normal Retirement Date.
1.32 "Leased Employee" means any person (other than an Employee of the
recipient Employer) who pursuant to an agreement between the recipient Employer
and any other person or entity ("leasing organization") has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one year, and such services are performed under primary
direction or control by the recipient Employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated as provided by
the recipient Employer. Furthermore, Compensation for a Leased Employee shall
only include Compensation from the leasing organization that is attributable to
services performed for the recipient Employer. A Leased Employee shall not be
considered an Employee of the recipient Employer:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a nonintegrated employer contribution rate of at least 10% of
compensation, as defined in Code Section 415(c)(3);
(2) immediate participation;
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient Employer's nonhighly compensated work force.
10
1.33 "Non-Highly Compensated Participant" means any Participant who is not
a Highly Compensated Employee.
1.34 "Non-Key Employee" means any Employee or former Employee (and such
Employee's or former Employee's Beneficiaries) who is not, and has never been a
Key Employee.
1.35 "Normal Retirement Age" means the Participant's 65 birthday. A
Participant shall become fully Vested in the Participant's Normal Retirement
Benefit upon attaining Normal Retirement Age.
1.36 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.37 "1-Year Break in Service" means a Period of Severance of at least 12
consecutive months.
1.38 "Participant" means any Eligible Employee who participates in the Plan
and has not for any reason become ineligible to participate further in the Plan.
1.39 "Participant's Transfer/Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to the total interest in the Plan resulting from amounts transferred to
this Plan from a direct plan-to-plan transfer and/or with respect to such
Participant's interest in the Plan resulting from amounts transferred from
another qualified plan or "conduit" Individual Retirement Account in accordance
with Section 4.3.
A separate accounting shall be maintained with respect to that portion
of the Participant's Transfer/Rollover Account attributable to transfers (within
the meaning of Code Section 414(1)) and "rollovers."
1.40 "Period of Service" means the aggregate of all periods commencing with
the Employee's first day of employment or reemployment with the Employer or
Affiliated Employer and ending on the date a 1-Year Break in Service begins. The
first day of employment or reemployment is the first day the Employee performs
an Hour of Service. An Employee will also receive credit for any Period of
Severance of less than twelve(12) consecutive months. Fractional periods of a
year will be expressed in terms of days.
1.41 "Period of Severance" means a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on the date the
Employee retires, quits or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first day of such absence shall not constitute a 1-Year
Break in Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the individual, (b) by reason of the birth of a child of the individual, (c)
by reason of the placement of a child with the individual in connection with the
adoption of
11
such child by such individual, or (d) for purposes of caring for such child for
a period beginning immediately following such birth or placement.
1.42 "Plan" means this instrument, including all amendments thereto.
1.43 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1 of each year and ending the following December 31.
1.44 "Pre-Retirement Survivor Annuity" means an immediate annuity for the
life of the surviving spouse of a Participant who dies prior to the
Participant's Annuity Starting Date, the payment under which must be equal to
the "minimum spouse's death benefit" provided in Section 5.5(g).
1.45 "Present Value of Accrued Benefit" means the Actuarial Equivalent
lump-sum amount of a Participant's Accrued Benefit at date of valuation.
Notwithstanding the foregoing, the Present Value of Accrued Benefit for the
determination of Top Heavy Plan status shall be made exclusively pursuant to the
provisions of Section 11.2.
1.46 "Primary Insurance Amount" means the old-age insurance benefit under
Section 202 of the Social Security Act payable to each Employee at a single age
that is not earlier than age 62 and not later than age 65. Primary Insurance
Amount must be determined under the Social Security Act as in effect at the time
the Employee's offset is determined. Thus, it is determined without assuming any
future increases in compensation, any future increases in the Taxable Wage Base,
any changes in the formulas used under the Social Security Act to determine
Primary Insurance Amount, or any future increases in the consumer price index.
However, it may be assumed that the Employee will continue to receive
compensation at the same rate as that received at the time the offset is being
determined, until reaching the single age described in the first sentence above.
Primary Insurance Amount must be determined in a consistent manner for all
Employees.
1.47 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as
amended from time to time.
1.48 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.49 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 5.1).
1.50 "Social Security Retirement Age" means the age used as the retirement
age under Section 216(1) of the Social Security Act, except that such section
shall be applied without regard to the age increase factor and as if the early
retirement age under Section 216(1)(2) of such Act were 62.
1.51 "Taxable Wage Base" means, with respect to any calendar year, the
contribution and benefit base in effect under Section 230 of the Social Security
Act at the beginning of the calendar year.
12
1.52 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.53 "Top Heavy Plan" means a plan described in Section 11.2(a).
1.54 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.55 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders such Participant incapable of continuing usual and customary employment
with the Employer. The disability of a Participant shall be determined by a
licensed physician chosen by the Administrator. The determination shall be
applied uniformly to all Participants.
1.56 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.57 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.58 "Vested" means the portion of a Participant's benefits under the Plan
that are nonforfeitable.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered
to appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit of
the Participants and their Beneficiaries in accordance with the terms
of the Plan, the Code, and the Act. The Employer may appoint counsel,
specialists, advisers, agents (including any nonfiduciary agent) and
other persons as the Employer deems necessary or desirable in
connection with the exercise of its fiduciary duties under this Plan.
The Employer may compensate such agents or advisers from the assets of
the Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by the
Employer.
(b) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however,
13
constitute a directive to the Trustee as to the investment of the
Trust Funds. Such "funding policy and method" shall be consistent with
the objectives of this Plan and with the requirements of Title I of
the Act.
(c) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint any
person, including, but not limited to, the Employees of the Employer, to perform
the duties of the Administrator. Any person so appointed shall signify
acceptance by filing written acceptance with the Employer. Upon the resignation
or removal of any individual performing the duties of the Administrator, the
Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and
all regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish the Administrator's duties under the
Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan as set forth under the terms of the Plan, including,
but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
discretionary or otherwise directed disbursements from the Trust;
14
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer and to designate the insurer from which
such Contract shall be purchased. All Policies shall be issued on a
uniform basis as of each Anniversary Date with respect to all
Participants under similar circumstances;
(g) to compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be
contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and implement a procedure for notifying
Participants and Beneficiaries of their rights to elect joint and
survivor annuities and Pre-Retirement Survivor Annuities as required
by the Act and regulations thereunder;
(j) to determine the validity of, and take appropriate action
with respect to, any qualified domestic relations order received by
it; and
(k) to assist any Participant regarding the Participant's rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries.
15
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, or any person or persons retained or
appointed by any named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, and other specialists and their agents, the costs of any
bonds required pursuant to Act Section 412, and other costs of administering the
Plan. Until paid, the expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within ninety (90) days after the application is filed, or such
period as is required by applicable law or Department of Labor regulation. In
the event the claim is denied, the reasons for the denial shall be specifically
set forth in the notice in language calculated to be understood by the claimant,
pertinent provisions of the Plan shall be cited, and, where appropriate, an
explanation as to how the claimant can perfect the claim will be provided. In
addition, the claimant shall be furnished with an explanation of the Plan's
claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
a claim by filing with the Administrator a written request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes the claim should be allowed, shall be filed with the Administrator no
later than sixty (60) days after receipt of the written notification provided
for in Section 2.7. The Administrator shall then conduct a hearing within the
next sixty (60) days, at which the claimant may be represented by an attorney or
any other representative of such claimant's choosing and expense and at which
the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of the claim. At the hearing (or prior thereto upon five
(5) business days written notice to the Administrator) the claimant or the
claimant's representative shall have an opportunity to review all documents in
the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within sixty (60) days of receipt of the appeal
(unless there has been an extension of sixty (60) days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the sixty (60) day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
16
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed a six (6) month Period of
Service and has attained age twenty and one-half shall be eligible to
participate hereunder as of the date such Employee has satisfied such
requirements. However, any Employee who was a Participant in the Plan prior to
the effective date of this amendment and restatement shall continue to
participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
first day of the Plan Year next following the date on which such Employee met
the eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred or, if later, the date that
the Employee would have otherwise entered the Plan had the Employee not
terminated employment).
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review pursuant to Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in the Plan for each Period of Service completed while a
noneligible Employee, until such time as the Former Participant's Accrued
Benefit shall be forfeited or distributed pursuant to the terms of the Plan.
3.5 REHIRED EMPLOYEES AND BREAKS IN SERVICE
(a) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is reemployed by the
Employer, the Former Participant shall become a Participant as of the
reemployment date.
(b) If any Participant becomes a Former Participant due to
severance of employment with the Employer and again becomes a
Participant, such renewed participation shall not result in
duplication of benefits. Accordingly, if such Participant has received
a distribution of a Vested Accrued Benefit under the Plan by reason of
prior participation (and such distribution has not been repaid to the
Plan with interest within a period of the earlier of five (5) years
after the first date on which the Participant is subsequently
reemployed by the Employer or the close of the first period of five
(5) consecutive 1-Year Breaks in Service commencing after the
distribution), the Participant's Accrued Benefit shall be reduced by
the
17
Actuarial Equivalent (at the date of distribution) of the Present
Value of the Accrued Benefit as of the date of distribution. Any
repayment by a Participant shall be equal to the total of:
(1) the amount of the distribution,
(2) interest on such distribution compounded annually at the rate
of five percent (5%) per annum from the date of distribution to
the date of repayment or to the last day of the first Plan Year
ending on or after December 31,1987, if earlier, and
(3) interest on the sum of (1) and (2) above compounded annually
at the rate of one-hundred-twenty percent (120%) of the federal
mid-term rate (as in effect under Code Section 1274 for the first
month of a Plan Year) from the beginning of the first Plan Year
beginning after December 31,1987 or the date of distribution,
whichever is later, to the date of repayment.
3.6 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be irrevocable and communicated to the Employer, in writing, within a reasonable
period of time before the beginning of the first Plan Year.
ARTICLE IV
CONTRIBUTION AND VALUATION
4.1 PAYMENT OF CONTRIBUTIONS
No contribution shall be required under the Plan from any Participant.
The Employer shall pay to the Trustee from time to time such amounts in cash as
the Administrator and Employer shall determine to be necessary to provide the
benefits under the Plan determined by the application of accepted actuarial
methods and assumptions. The method of funding shall be consistent with Plan
objectives.
4.2 ACTUARIAL METHODS
In establishing the liabilities under the Plan and contributions
thereto, the enrolled actuary will use such methods and assumptions as will
reasonably reflect the cost of the benefits. The Plan assets are to be valued on
the last day of the Plan Year (or on any other date determined by the
Administrator) using any reasonable method of valuation mat takes into account
fair market value pursuant to Regulations. There must be an actuarial valuation
of the Plan at least once every year.
4.3 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred (within the meaning of Code Section 414(1)) to this Plan
from other tax qualified plans under Code Section 401 (a) by Eligible
Employees, provided the trust from which such funds are transferred
permits the transfer to be made and the transfer
18
will not jeopardize the tax exempt status of the Plan or Trust or
create adverse tax consequences for the Employer. Prior to accepting
any transfers to which this Section applies, the Administrator may
require an opinion of counsel that the amounts to be transferred meet
the requirements of this Section. The amounts transferred shall be
considered an additional Accrued Benefit and set up in a separate
account herein referred to as a Participant's Transfer/Rollover
Account. Such account shall be fully Vested at all times and shall not
be subject to forfeiture for any reason.
Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-l(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer (other than a direct rollover) shall
be subject to the distribution limitations provided for in Regulation
1.401(k)-l(d).
(b) With the consent of the Administrator, the Plan may accept a
"rollover" by Eligible Employees, provided the "rollover" will not
jeopardize the tax exempt status of the Plan or create adverse tax
consequences for the Employer. Prior to accepting any "rollovers" to
which this Section applies, the Administrator may require the Employee
to establish (by providing opinion of counsel or otherwise) that the
amounts to be rolled over to this Plan meet the requirements of this
Section. The amounts rolled over shall be set up in a separate account
herein referred to as a "Participant's Transfer/Rollover Account."
Such account shall be fully Vested at all times and shall not be
subject to forfeiture for any reason.
For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a), or, any
other plans from which distributions are eligible to be rolled over
into this Plan pursuant to the Code. The term "rollover" means: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) distributions received by an Employee from other "qualified
plans" which are eligible for tax-free rollover to a "qualified plan"
and which are transferred by the Employee to this Plan within sixty
(60) days following receipt thereof; (iii) amounts transferred to this
Plan from a conduit individual retirement account provided that the
conduit individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by another
"qualified plan," (B) were eligible for tax-free rollover to a
"qualified plan" and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof; (iv)
amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of
receipt thereof from such conduit individual retirement account; and
(v) any other amounts which are eligible to be rolled over to this
Plan pursuant to the Code.
(c) Amounts in a Participant's Transfer/Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may
not be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraph (d) of this Section. The Trustee
shall have no duty or responsibility to
19
inquire as to the propriety of the amount, value or type of assets
transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to
be held by the Trustee under the terms of this Plan.
(d) At such date when the Participant or the Participant's
Beneficiary shall be entitled to receive benefits, the Participant's
Transfer/Rollover Account shall be used to provide additional benefits
to the Participant or the Participant's Beneficiary. Additionally, the
Administrator, at the election of the Participant, shall direct the
Trustee to distribute all or a portion of the amount credited to the
Participant's Transfer/Rollover Account (other than any direct or
indirect transfers as that term is defined and interpreted under Code
Section 401(a)(ll) and the Regulations thereunder) from a defined
benefit plan, money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan. Any distributions of amounts held
in a Participant's Transfer/Rollover Account shall be made in a manner
which is consistent with and satisfies the provisions of Section 5.7,
including, but not limited to, all notice and consent requirements of
Code Sections 417 and 41l(a)(l1) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
(e) The Administrator may direct that Employee transfers and
rollovers made after a Valuation Date be segregated into a separate
account for each Participant until such time as the allocations
pursuant to this Plan have been made, at which time they may remain
segregated or be invested as part of the general Trust Fund.
(f) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any "Section 41
l(d)(6) protected benefit" as described in Section 8.1.
4.4 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service will be provided in accordance with Code
Section 414(u).
ARTICLE V
BENEFITS
5.1 RETIREMENT BENEFITS
(a) The amount of monthly retirement benefit to be provided for
each Participant who retires on the Participant's Normal Retirement
Date shall be equal to the Participant's Accrued Benefit (herein
called the Participant's Normal Retirement Benefit). A Participant's
Accrued Benefit is based on the Participant's Frozen Accrued Benefit
and a retirement benefit formula equal to 70% of such Participant's
Average Monthly Compensation, offset by 50% of the Primary Insurance
Amount
20
the Participant is entitled to immediately subsequent to retirement,
computed to the nearest cent. For Participants who are projected to
have earned less than 15 Periods of Service as of the end of the Plan
Year in which they attain Normal Retirement Age, the percentage of
Average Monthly Compensation and the offset percentage shall be
reduced by one-fifteenth for each such Period of Service less than 15.
Notwithstanding the above, each Participant shall be
provided with a monthly retirement benefit of not less than the
following:
Date of Termination Minimum Monthly Retirement Benefit
- ------------------- ----------------------------------
1/1/89 to 12/31/93 $ 8.00 times Years of Service
On and after 1/1/94 $18.00 times Years of Service
The "Normal Retirement Benefit" of each Participant shall
not be less than the largest periodic benefit that would have been
payable to the Participant upon separation from service at or prior to
Normal Retirement Age under the Plan exclusive of social security
supplements, premiums on disability or term insurance, and the value
of disability benefits not in excess of the "Normal Retirement
Benefit." For purposes of comparing periodic benefits in the same
form, commencing prior to and at Normal Retirement Age, the greater
benefit is determined by converting the benefit payable prior to
Normal Retirement Age into the same form of annuity benefit payable at
Normal Retirement Age and comparing the amount of such annuity
payments, hi the case of a Top Heavy Plan, the "Normal Retirement
Benefit" shall not be smaller than the minimum benefit to which the
Employee is entitled under Section 5.2.
(b) A Participant may elect to retire on an Early Retirement
Date. In the event that a Participant makes such an election, such
Participant shall be entitled to receive an Early Retirement Benefit
equal to the Participant's Accrued Benefit payable at the
Participant's Normal Retirement Date. However, if a Participant so
elects, such Participant may receive payment of an Early Retirement
Benefit commencing on the first day of the month coinciding with or
next following the Participant's Early Retirement Date, which Early
Retirement Benefit shall equal the greater of (l) the Participant's
Accrued Benefit reduced by 1/15th for each of the first five (5) years
and l/30th for each of the next five (5) years and reduced actuarially
for each additional year thereafter that the first day of the month on
which the Participant's Early Retirement Benefit commences precedes
the Participant's Normal Retirement Date, or (2) the Actuarial
Equivalent of the Participant's Accrued Benefit if such benefit is
distributed in a form other than a nondecreasing life annuity payable
for a period not less than the life of such Participant.
(c) The Normal Retirement Benefit payable to a Participant
pursuant to this Section 5.1 shall be a monthly pension commencing on
the Participant's Retirement Date and continuing for life. If a
Retired Participant dies prior to the completion of 120 monthly
payments, such monthly payments shall be continued to the Retired
Participant's Beneficiary until the monthly payments made to the
Retired Participant and to the Beneficiary shall total 120. However,
the form of distribution of such benefit shall be determined pursuant
to the provisions of Section 5.7.
21
(d) At the request of a Participant, the Participant may be
continued in employment beyond Normal Retirement Date. In such event,
no retirement benefit will be paid to the Participant until the
Participant actually retires. At the close of each Plan Year prior to
the Participant's actual Retirement Date, a Participant shall be
entitled to a retirement benefit equal to the greater of (1) the
Actuarial Equivalent of the monthly retirement benefit such
Participant was entitled to at the close of the prior Plan Year, or
(2) the Participant's Accrued Benefit determined at the close of the
Plan Year. The monthly retirement benefit calculated pursuant to this
Section 5.1(d) shall be offset by the actuarial value (determined
pursuant to Section 1.3) of the total benefit distributions (pursuant
to Section 5.7(e)) made by the close of the Plan Year.
Except with respect to a "five (5) percent owner," a
Participant's Accrued Benefit is actuarially increased to take into
account the period after age 70 1/2 in which the Participant does not
receive any benefits under the Plan. The actuarial increase begins on
the April 1 following the calendar year in which the Participant
attains age 70 1/2 (January 1, 1997 in the case of a Participant who
attained age 70 1/2 prior to 1996), and ends on the date on which
benefits commence after retirement in an amount sufficient to satisfy
Code Section 401(a)(9).
The amount of actuarial increase payable as of the end of
the period for actuarial increases must be no less than the Actuarial
Equivalent of the Participant's retirement benefits that would have
been payable as of the date the actuarial increase must commence plus
the Actuarial Equivalent of additional benefits accrued after that
date, reduced by the Actuarial Equivalent of any distributions made
after that date. The actuarial increase is generally the same as, and
not in addition to, the actuarial increase required for that same
period under Code Section 411 to reflect the delay in payments after
normal retirement, except that the actuarial increase required under
Code Section 401 (a)(9)(C) must be provided even during the period
during which a Participant is in Act Section 203(a)(3)(B) service.
5.2 MINIMUM BENEFIT REQUIREMENT FOR TOP HEAVY PLAN
(a) The minimum Accrued Benefit derived from Employer
contributions to be provided under this Section for each Employee who
is a Participant during a Top Heavy Plan Year shall equal the product
of (1) one-twelfth (l/12th) of "415 Compensation" averaged over the
five (5) consecutive "limitation years" (or actual number of
"limitation years," if less) which produce the highest average, and
(2) the lesser of (i) two percent (2%) multiplied by Periods of
Service calculated from the Employee's date of participation and
ending on the date such Employee severs employment with the Employer,
or (ii) twenty percent (20%), expressed as a single life annuity.
(b) For purposes of providing the minimum benefit under Code
Section 416, an Employee who is not a Participant solely because (l)
such Employee's Compensation is below a stated amount or (2) such
Employee declined
22
to make mandatory contributions (if required) to the Plan will be
considered to be a Participant Furthermore, such minimum benefit shall
be provided regardless of whether such Employee is employed on a
specified date.
(c) For purposes of this Section, Periods of Service for any Plan
Year beginning before January 1, 1984, or for any Plan Year during
which the Plan was not a Top Heavy Plan shall be disregarded.
(d) For purposes of this Section, "415 Compensation" for any
"limitation year" ending in a Plan Year which began prior to January 1
,1984, subsequent to the last "limitation year" during which the Plan
is a Top Heavy Plan, or in which the Participant failed to complete a
Period of Service, shall be disregarded.
(e) For the purposes of this Section, "415 Compensation" in
excess of $150,000 (or such other amount provided in the Code) shall
be disregarded. Such amount shall be adjusted for increases in the
cost of living in accordance with Code Section 401(a)(17)(B), except
that the dollar increase in effect on January 1 of any calendar year
shall be effective for the Calendar Year beginning with such calendar
year. If "415 Compensation" for any prior determination period is
taken into account in determining a Participant's minimum benefit for
the current Plan Year, the "415 Compensation" for such determination
period is subject to the applicable annual "415 Compensation" limit in
effect for that prior period. For this purpose, in determining the
minimum benefit in Plan Years beginning on or after January 1, 1989,
the annual "415 Compensation" limit in effect for determination
periods beginning before that date is $200,000 (or such other amount
as adjusted for increases in the cost of living in accordance with
Code Section 415(d) for determination periods beginning on or after
January 1, 1989, and in accordance with Code Section 401(a)(17)(B) for
determination periods beginning on or after January 1, 1994). For
determination periods beginning prior to January 1, 1989, the $200,000
limit shall apply only for Top Heavy Plan Years and shall not be
adjusted. For any short Calendar Year the "415 Compensation" limit
shall be an amount equal to the "415 Compensation" limit for the
calendar year in which the Calendar Year begins multiplied by the
ratio obtained by dividing the number of full months in the short
Calendar Year by twelve (12).
(f) If Section 5.1(c) provides for the Normal Retirement Benefit
to be paid in a form other than a single life annuity, the Accrued
Benefit under this Section shall be the Actuarial Equivalent of the
minimum Accrued Benefit under (a) above pursuant to Section 1.3.
(g) If payment of the minimum Accrued Benefit commences at a date
other than Normal Retirement Date, the minimum Accrued Benefit shall
be the Actuarial Equivalent of the minimum Accrued Benefit commencing
at Normal Retirement Date pursuant to Section 1.3.
(h) If an Employee participates in this Plan and a defined
contribution plan included in a Required Aggregation Group which is
top heavy, the minimum benefits shall be provided under this Plan.
23
(i) To the extent required to be nonforfeitable under Section
5.6, the minimum Accrued Benefit under this Section may not be
forfeited under Code Section 411(a)(3)(B) or Code Section
411(a)(3)(D).
5.3 PAYMENT OF RETIREMENT BENEFITS
When a Participant retires, the Administrator shall immediately take
pursuant to the Plan all necessary steps and execute all required documents to
cause the payment of the Participant's Accrued Benefit pursuant to the Plan.
5.4 DISABILITY RETIREMENT BENEFITS
(a) If a Participant becomes Totally and Permanently Disabled
pursuant to Section 1.55 prior to retirement or separation from
service, and such condition continues for a period of six (6)
consecutive months and by reason thereof such Participant's status as
an Employee ceases, then said disabled Participant shall be entitled
to receive the Actuarial Equivalent of the Participant's Accrued
Benefit. In the event of a Participant's Total and Permanent
Disability, the Administrator shall direct the Trustee to commence
payment of the benefits payable hereunder pursuant to the provisions
of Sections 5.7 and 5.9 as though the Participant had retired.
(b) The benefit payable pursuant to (a) above shall be computed
as of the Anniversary Date subsequent to termination of employment.
(c) In the event of the Terminated Participant's Total and
Permanent Disability subsequent to termination of employment, the
Terminated Participant (or the Terminated Participant's Beneficiary)
shall receive the Actuarial Equivalent of such Terminated
Participant's Vested Accrued Benefit pursuant to the provisions of
Sections 5.7 and 5.9 as though the Terminated Participant had retired.
5.5 DEATH BENEFITS
(a) If a Participant dies prior to the Participant's Retirement
Date, his accrued benefit shall become 100% vested. Such Participant's
Beneficiary shall receive a monthly benefit provided by the greater
of:
(1) Present value of the Accrued Benefit; or
(2) 100 times such Participant's anticipated Normal Retirement
Benefit pursuant to Section 5.1 and assuming that the
Participant's compensation at the date of death continues on to
his Normal Retirement Date.
(b) Death benefits payable by reason of the death of a
Participant or a Retired Participant shall be paid to such
Participant's Beneficiary in accordance with the following provisions:
(1) Such death benefit shall not exceed 100 times the
Participant's anticipated monthly retirement benefit determined
as of the Participant's
24
Normal Retirement Date. Any amounts in excess shall inure to the
Trust Fund and be used to reduce the future contributions of the
Employer.
(2) Upon the death of a Participant subsequent to the
Participant's Retirement Date, but prior to the Annuity Starting
Date, the Participant's Beneficiary shall be entitled to a death
benefit in an amount equal to the Actuarial Equivalent of the
benefit the Participant would have received at the Participant's
Retirement Date.
(3) Upon the death of a Participant subsequent to the Annuity
Starting Date, the Participant's Beneficiary shall be entitled to
whatever death benefit may be available under the settlement
arrangements pursuant to which the Participant's benefit is made
payable.
(4) In the event of a Terminated Participant's death subsequent
to the Participant's termination of employment, the Participant's
Beneficiary shall receive the Present Value of such Participant's
Vested Accrued Benefit as of the Anniversary Date coinciding with
or next following the date of the Participant's death.
(c) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive the death benefit
payable as a result of the death of a Participant as the Administrator
may deem desirable. The Administrator's determination of death and the
right of any person to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in Section
5.8, the Beneficiary of that portion of the death benefit necessary to
fund the "minimum spouse's death benefit" shall be the Participant's
surviving spouse, who shall receive such benefit in the form of a
Pre-Retirement Survivor Annuity pursuant to Section 5.8. Except,
however, the Participant may designate a Beneficiary other than the
surviving spouse to receive the Actuarial Equivalent of the "minimum
spouse's death benefit" if:
(1) the Participant and the Participant's spouse have validly
waived the Pre-Retirement Survivor Annuity in the manner
prescribed in Section 5.8, and the spouse has waived the right to
be the Participant's Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no qualified domestic
relations order which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may at
any time revoke a
25
designation of a Beneficiary or change a Beneficiary by filing written
(or in such other form as permitted by the Internal Revenue Service)
notice of such revocation or change with the Administrator. However,
the Participant's spouse must again consent in writing (or in such
other form as permitted by the Internal Revenue Service) to any change
in Beneficiary of that portion of the death benefit that would
otherwise be paid as a Pre-Retirement Survivor Annuity unless the
original consent acknowledged that the spouse had the right to limit
consent only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. That portion of the death benefit
remaining after the "minimum spouse's death benefit" shall be paid to
the Participant's designated Beneficiary pursuant to Section 5.8. In
the event no valid designation of Beneficiary exists, or if the
Beneficiary is not alive, at the time of the Participant's death, the
death benefit shall be payable to the Participant's estate.
Additionally, if the Beneficiary does not predecease the Participant,
but dies prior to the distribution of the death benefit, the death
benefit will be paid to the Beneficiary's estate.
(e) The benefit payable under this Section shall be paid pursuant
to the provisions of Sections 5.8 and 5.9.
(f) In no event shall the death benefit payable to a surviving
spouse be less than the Actuarial Equivalent of the "minimum spouse's
death benefit."
(g) For the purposes of this Section, the "minimum spouse's death
benefit" means a death benefit for a Vested married Participant
payable in the form of a Pre-Retirement Survivor Annuity. Such annuity
payments shall be equal to the amount which would be payable as a
survivor annuity under the joint and survivor annuity provisions of
the Plan if:
(1) in the case of a Participant who dies after the Earliest
Retirement Age, such Participant had retired with an immediate
joint and survivor annuity on the day before the Participant's
date of death, or
(2) in the case of a Participant who dies on or before the
Earliest Retirement Age, such Participant had:
(i) separated from service on the earlier of the actual time
of separation or the date of death,
(ii) survived to the Earliest Retirement Age,
(iii) retired with an immediate joint and survivor annuity
at the Earliest Retirement Age based on the Participant's
Vested Accrued Benefit on date of death, and
(iv) died on the day after the day on which said Participant
would have attained the Earliest Retirement Age.
26
5.6 TERMINATION OF EMPLOYMENT BEFORE RETIREMENT
(a) Payment to a Former Participant of the Vested portion of such
Former Participant's Accrued Benefit, unless such Former Participant
otherwise elects, shall begin not later than the 60th day after the
close of the Plan Year in which the latest of the following events
occurs: (1) the date on which the Participant attains the earlier of
age 65 or the Normal Retirement Age specified herein; (2) the 10th
anniversary of the year in which the Participant commenced
participation in the Plan; or (3) the date the Participant terminates
service with the Employer.
However, the Administrator shall, at the election of the
Participant, direct earlier payment of the Vested portion of the
Participant's Accrued Benefit. Any distribution under this paragraph
shall be made in a manner which is consistent with and satisfies the
provisions of Section 5.7, including, but not limited to, notice and
consent requirements of Code Sections 417 and 41l(a)(l1) and the
Regulations thereunder.
However, the Administrator shall direct the earlier payment
of the entire Vested portion of the Present Value of Accrued Benefit,
but only if it does not exceed $5,000 ($3,500 for Plan Years beginning
prior to January 1, 1998, but for distributions after March 28,2005,
the $5000 amount shall be reduced to $1000).
That portion of a Terminated Participant's Accrued Benefit
that is forfeited shall be used only to reduce future costs of the
Plan at such time as it becomes a forfeiture.
(b) A Participant shall become fully Vested in the Participant's
Accrued Benefit immediately upon entry into the Plan.
(c) A Participant with at least three (3) whole year Periods of
Service as of the expiration date of the election period may elect to
have the nonforfeitable percentage computed under the Plan without
regard to such amendment and restatement. If a Participant fails to
make such election, then such Participant shall be subject to the new
vesting schedule. The Participant's election period shall commence on
the adoption date of the amendment and shall end sixty (60) days after
the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
27
Except, however, any Employee who was a Participant as of
the later of the effective date or adoption date of this amendment and
restatement and who completed three (3) whole year Periods of Service
shall be subject to the pre-amendment vesting schedule provided such
schedule is more liberal than the new vesting schedule.
Pre-Amendment Vesting Schedule
- -------------------------------
Periods of Service Percentage
- ------------------ ----------
1 0%
2 0%
3 0%
4 0%
5 100%
6 100%
7 100%
(d) The computation of a Participant's nonforfeitable percentage
of such Participant's interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. In the event
that the Plan is amended to change or modify any vesting schedule, or
if the Plan is amended in any way that directly or indirectly affects
the computation of the Participant's nonforfeitable percentage, or if
the Plan is deemed amended by an automatic change to a top heavy
vesting schedule, then each Participant with at least three (3) whole
year Periods of Service as of the expiration date of the election
period may elect to have such Participant's nonforfeitable percentage
computed under the Plan without regard to such amendment or change. If
a Participant fails to make such election, then such Participant shall
be subject to the new vesting schedule. The Participant's election
period shall commence on the adoption date of the amendment and shall
end sixty (60) days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
5.7 DISTRIBUTION OF BENEFITS
(a)(l) Unless otherwise elected as provided below, a Participant
who is married on the Annuity Starting Date and who does not die
before the Annuity Starting Date shall receive the value of all of
such Participant's benefits in the form of a joint and survivor
annuity. The joint and survivor annuity is an annuity that commences
immediately and shall be the Actuarial Equivalent of a single life
annuity. Such joint and survivor benefits following the Participant's
death shall continue to the spouse during the spouse's lifetime at a
rate equal to fifty percent (50%) of the rate at which such benefits
were payable to the Participant. This joint and fifty percent (50%)
survivor annuity shall be considered the designated qualified
28
joint and survivor annuity and automatic form of payment for the
purposes of this Plan. An unmarried Participant shall receive the
value of such Participant's benefit in the form of a life annuity.
Such unmarried Participant, however, may elect in writing to waive the
life annuity. The election must comply with the provisions of this
Section as if it were an election to waive the joint and survivor
annuity by a married Participant, but without the spousal consent
requirement. The joint and survivor annuity and the life annuity form
of distribution shall be the Actuarial Equivalent of the benefits due
the Participant.
(2) Any election to waive the joint and survivor annuity must be
made by the Participant in writing (or in such other form as
permitted by the Internal Revenue Service) during the election
period and be consented to in writing (or in such other form as
permitted by the Internal Revenue Service) by the Participant's
spouse. If the spouse is legally incompetent to give consent, the
spouse's legal guardian, even if such guardian is the
Participant, may give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be changed
without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's
consent shall be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan representative or a
notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no spouse,
the spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant
and consented to by such Participant's spouse may be revoked by
the Participant in writing (or in such other form as permitted by
the Internal Revenue Service) without the consent of the spouse
at any time during the election period. A revocation of a prior
election shall cause the Participant's benefits to be distributed
as a joint and survivor annuity. The number of revocations shall
not be limited. Any new election must comply with the
requirements of this paragraph. A former spouse's waiver shall
not be binding on a new spouse.
(3) The election period to waive the joint and survivor annuity
shall be the ninety (90) day period ending on the Annuity
Starting Date.
(4) For purposes of this Section, spouse or surviving spouse
means the spouse or surviving spouse of the Participant, provided
that a former spouse will be treated as the spouse or surviving
spouse and a current spouse will not be treated as the spouse or
surviving spouse to the extent provided under a qualified
domestic relations order as described in Code Section 414(p).
(5) With regard to the election, the Administrator shall provide
to the Participant no less than thirty (30) days and no more than
ninety (90) days before the Annuity Starting Date a written (or
in such other form as permitted by the Internal Revenue Service)
explanation of:
(i) the terms and conditions of the joint and survivor
annuity,
29
(ii) the Participant's right to make, and the effect of, an
election to waive the joint and survivor annuity,
(iii) the right of the Participant's spouse to consent to
any election to waive the joint and survivor annuity, and
(iv) the right of the Participant to revoke such election,
and the effect of such revocation.
(6) Notwithstanding the above, if the Participant elects (with
spousal consent, if applicable) to waive the requirement that the
explanation be provided at least thirty (30) days before the
Annuity Starting Date, the election period shall be extended to
the thirtieth (30th) day after the date on which such explanation
is provided to the Participant, unless the thirty (30) day period
is waived pursuant to the following provisions.
Any distribution provided for in this Section 5.7 may
commence less than thirty (30) days after the notice required by
Code Section 417(a)(3) is given provided the following
requirements are satisfied:
(i) the Administrator clearly informs the Participant that
the Participant has a right to a period of thirty (30) days
after receiving the notice to consider whether to waive the
joint and survivor annuity and to elect (with spousal
consent) to a form of distribution other than a joint and
survivor annuity;
(ii) the Participant is permitted to revoke an affirmative
distribution election at least until the Annuity Starting
Date, or, if later, at any time prior to the expiration of
the seven (7) day period that begins the day after the
explanation of the joint and survivor annuity is provided to
the Participant;
(iii) the Annuity Starting Date is after the date that the
explanation of the joint and survivor annuity is provided to
the Participant. However, the Annuity Starting Date may be
before the date that any affirmative distribution election
is made by the Participant and before the date that the
distribution is permitted to commence under (iv) below; and
(iv) distribution in accordance with the affirmative
election does not commence before the expiration of the
seven (7) day period that begins the day after the
explanation of the joint and survivor annuity is provided to
the Participant.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive benefits in the form of a joint
and survivor annuity, or if such Participant is not married, in the
form of a life annuity, the
30
Administrator, pursuant to the election of the Participant, shall
direct the Trustee to distribute to a Participant or such
Participant's Beneficiary an amount which is the Actuarial Equivalent
of the monthly retirement benefit provided in Section 5.1(c) in one or
more of the following methods:
(1) One lump-sum payment in cash.
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. The period over which
such payment is to be made shall not extend beyond the
Participant's life expectancy (or the life expectancy of the
Participant and the Participant's designated Beneficiary).
(3) Monthly pension payable over the life of the Participant.
(4) Reduced monthly pension payable over the life of the
Participant, with the provision that, if a Retired Participant
dies prior to the completion of 120 monthly payments, such
monthly payments shall be continued to the Retired Participant's
designated Beneficiary until the monthly payments made to the
Retired Participant and to the Beneficiary shall total 120.
(5) Reduced monthly pension payable over the life of the
Participant and the life of the Participant's designated
Beneficiary (50% joint and survivor annuity).
However, any such annuity may not be in any form that will
provide for payments over a period extending beyond either the
life of the Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy of
the Participant (or the life expectancy of the Participant and
the Participant's designated Beneficiary).
(c) The present value of a Participant's joint and survivor
annuity derived from Employer and Employee contributions may not be
paid without the Participant's and the Participant's spouse's written
(or in such form as permitted by the Internal Revenue Service) consent
if the value exceeds $5,000 ($3,500 for Plan Years beginning prior to
January 1, 1998, but for distributions after March 28, 2005, the $5000
amount shall be reduced to $1000) and the benefit is "immediately
distributable." However, spousal consent is not required if the
distribution will be made in the form of a joint and survivor annuity
and the benefit is "immediately distributable." A benefit is
"immediately distributable" if any part of the benefit could be
distributed to the Participant (or surviving spouse) before the
Participant attains (or would have attained if not deceased) the later
of the Participant's Normal Retirement Age or age 62. Any consent
required by this Section 5.7(c) must be obtained not more than ninety
(90) days before commencement of the distribution and shall be made in
a manner consistent with Section 5.7(a)(2).
If the value of the Participant's benefit derived from
Employer and Employee contributions does not exceed $5,000 ($3,500 for
Plan Years beginning prior to January 1, 1998, but for distributions
after March 28, 2005, the $5000
31
amount shall be reduced to $1000), then the Administrator shall direct
the Trustee to immediately distribute such benefit in a lump sum
without the Participant's and the Participant's spouse's written
consent. No distribution may be made under the preceding sentence
after the Annuity Starting Date unless the Participant and the
Participant's spouse consent in writing (or in such form as permitted
by the Internal Revenue Service) to such distribution.
(d) The following rules will apply to the consent requirements
set forth in subsection (c):
(1) No consent shall be valid unless the Participant has received
a general description of the material features and an explanation
of the relative values of the optional forms of benefit available
under the Plan that would satisfy the notice requirements of Code
Section 417.
(2) The Participant must be informed of the right to defer
receipt of the distribution. If a Participant fails to consent,
it shall be deemed an election to defer the commencement of
payment of any benefit. However, any election to defer the
receipt of benefits shall not apply with respect to distributions
which are required under Section 5.7(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than thirty (30) days and no more than ninety
(90) days before the Annuity Starting Date.
Notwithstanding the above, the Annuity Starting Date may be a
date prior to the date the explanation is provided to the
Participant if the distribution does not commence until at least
thirty (30) days after such explanation is provided, subject to
the waiver of the thirty (30) day period as provided for in
Section 5.7(a)(6).
(4) Written (or such other form as permitted by the Internal
Revenue Service) consent of the Participant to the distribution
must not be made before the Participant receives the notice and
must not be made more than ninety (90) days before the Annuity
Starting Date.
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to
the distribution.
Any such distribution may commence less than thirty (30)
days, subject to Section 5.7(a)(5), after the notice required under
Regulation 1.411(a)-ll(c) is given, provided that: (l) the
Administrator clearly informs the Participant that the Participant has
a right to a period of at least thirty (30) days after receiving the
notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option),
and (2) the Participant, after receiving the notice, affirmatively
elects a distribution.
(e) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits, whether under the Plan
or through the
32
purchase of an annuity contract, shall be made in accordance with the
following requirements and shall otherwise comply with Code Section 40
l(a)(9) and the Regulations thereunder (including Regulation 1.401
(a)(9)-2), the provisions of which are incorporated herein by
reference:
(1) A Participant's benefits shall be distributed or must begin
to be distributed not later than April 1st of the calendar year
following the later of (i) the calendar year in which the
Participant attains age 70 1/2 or (ii) the calendar year in which
the Participant retires, provided, however, that this clause (ii)
shall not apply in the case of a Participant who is a "five (5)
percent owner" at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70 1/2.
Such distributions shall be equal to or greater than any required
distribution.
Alternatively, distributions to a Participant must begin no later
than the applicable April 1st as determined under the preceding
paragraph and must be made over the life of the Participant (or
the lives of the Participant and the Participant's designated
Beneficiary) or the life expectancy of the Participant (or the
life expectancies of the Participant and the Participant's
designated Beneficiary) in accordance with Regulations.
(2) Distributions to a Participant and the Participant's
Beneficiaries shall only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Regulations thereunder.
With respect to distributions under the Plan made for
calendar years beginning on or after January 1, 2002, the Plan will
apply the minimum distribution requirements of Code Section 40 l(a)(9)
in accordance with the Regulations under Code Section 401(a)(9) that
were proposed on January 17, 2001, notwithstanding any provision of
the Plan to the contrary. This amendment shall continue in effect
until the end of the last calendar year beginning before the effective
date of final Regulations under Code Section 401(a)(9) or such other
date specified in guidance published by the Internal Revenue Service.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations.
The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of the Plan.
33
5.8 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the Annuity Starting Date and who has a
surviving spouse shall have that portion of the death benefit
necessary to fund the "minimum spouse's death benefit" paid to the
surviving spouse in the form of a Pre-Retirement Survivor Annuity. The
Participant's spouse may direct that payment of the Pre-Retirement
Survivor Annuity commence within a reasonable period after the
Participant's death (but not later than the month in which the
Participant would have attained the Earliest Retirement Age under the
Plan if the Participant dies on or before the Earliest Retirement
Age). If the spouse does not so direct, payment of such benefit will
commence at the time the Participant would have attained the later of
Normal Retirement Age or age 62. However, the spouse may elect a later
commencement date, subject to the rules specified in Section 5.8(g).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant in
writing (or in such other form as permitted by the Internal Revenue
Service) during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section
5.7(a)(2). Further, the spouse's consent must acknowledge the specific
nonspouse Beneficiary. Notwithstanding the foregoing, the nonspouse
Beneficiary need not be acknowledged, provided the consent of the
spouse acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elects
to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age thirty-five (35) and end on the date of the
Participant's death. An earlier waiver (with spousal consent) may be
made provided a written (or in such other form as permitted by the
Internal Revenue Service) explanation of the Pre-Retirement Survivor
Annuity is given to the Participant and such waiver becomes invalid at
the beginning of the Plan Year in which the Participant turns age
thirty-five (35). In the event a Vested Participant separates from
service prior to the beginning of the election period, the election
period shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to such
Participant (and consistent with Regulations), a written (or in such
other form as permitted by the Internal Revenue Service) explanation
of the Pre-Retirement Survivor Annuity containing comparable
information to that required pursuant to Section 5.7(a)(5). For the
purposes of this paragraph, the term "applicable period" means, with
respect to a Participant, whichever of the following periods ends
last:
(1) The period beginning with the first day of the Plan Year in
which the Participant attains age thirty-two (32) and ending with
the close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35);
(2) A reasonable period after the individual becomes a
Participant;
34
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the case
of a Participant who separates before attaining age thirty-five
(35). For this purpose, the Administrator must provide the
explanation beginning one (1) year before the separation from
service and ending one (1) year after such separation. If such a
Participant thereafter returns to employment with the Employer,
the applicable period for such Participant shall be redetermined.
For purposes of applying this Section 5.8(d), a reasonable
period ending after the enumerated events described in paragraphs (2),
(3) and (4) is the end of the two (2) year period beginning one (1)
year prior to the date (he applicable event occurs, and ending one (1)
year after that date.
(e) If the present value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed
$5,000 ($3,500 for Plan Years beginning prior to January 1, 1998, but
for distributions after March 28, 2005, the $5000 amount shall be
reduced to $1000), then the Administrator shall direct the immediate
distribution of the present value of the Pre-Retirement Survivor
Annuity to the Participant's spouse. No distribution may be made under
the preceding sentence after the Annuity Starting Date unless the
spouse consents in writing (or in such other form as permitted by the
Internal Revenue Service) to such distribution. If the value exceeds
$5,000 ($3,500 for Plan Years beginning prior to January 1, 1998, but
for distributions after March 28, 2005, the $5000 amount shall be
reduced to $1000), then an immediate distribution of the entire amount
of the Pre-Retirement Survivor Annuity may be made to the surviving
spouse, provided such surviving spouse consents in writing (or in such
other form as permitted by the Internal Revenue Service) to such
distribution. Any consent required under this paragraph must be
obtained not more than ninety (90) days before commencement of the
distribution and shall be made in a manner consistent with Section
5.7(a)(2).
The present value in this regard shall be determined as
provided in Section 1.45. Notwithstanding the foregoing, the present
value of the Pre-Retirement Survivor Annuity shall be determined as
provided in Section 1.45.
(f)(l) To the extent the death benefit is not paid in the form of
a Pre-Retirement Survivor Annuity, it shall be paid to the
Participant's Beneficiary in one of the following methods, as elected
by the Participant (or if no election has been made prior to the
Participant's death, by the Participant's Beneficiary):
(i) One lump-sum payment in cash.
35
(ii) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the
Participant or the Participant's Beneficiary. After periodic
installments commence, the Beneficiary shall have the right
to direct the Trustee to reduce the period over which such
periodic installments shall be made, and the Trustee shall
adjust the cash amount of such periodic installments
accordingly.
(iii) Monthly pension payable over the life of the
Participant's Beneficiary.
(iv) Reduced monthly pension payable over the life of the
Participant's designated Beneficiary, with the provision
that, if the Participant's designated Beneficiary dies prior
to the completion of 120 monthly payments, such monthly
payments shall be continued to the Participant's beneficiary
until the monthly payments made to the Participant's
designated Beneficiary and the Participant's beneficiary
shall total 120.
(2) In the event the death benefit payable pursuant to Section
5.5 is payable in installments, then, upon the death of the
Participant, the Administrator may direct the Trustee to
segregate the death benefit into a separate account, and the
Trustee shall invest such segregated account separately, and the
funds accumulated in such account shall be used for the payment
of the installments.
(3) Notwithstanding the above, if the death benefit payable
pursuant to Section 5.5 is payable in an annuity, payments shall
be subject to the rules specified in Section 5.8(g).
If death benefits in excess of the Pre-Retirement Survivor
Annuity are to be paid to the surviving spouse, such benefits may be
paid pursuant to (1) and (2) above, or used to purchase an annuity so
as to increase the payments made pursuant to the Pre-Retirement
Survivor Annuity.
(g) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder. If it is
determined, pursuant to Regulations, that the distribution of a
Participant's interest has begun and the Participant dies before the
entire interest has been distributed, the remaining portion of such
interest shall be distributed at least as rapidly as under the method
of distribution selected pursuant to Section 5.7 as of the date of
death. If a Participant dies before receiving any distributions of the
interest in the Plan or before distributions are deemed to have begun
pursuant to Regulations, then the death benefit shall be distributed
to the Participant's Beneficiaries by December 31st of the calendar
year in which the fifth anniversary of the Participant's date of death
occurs.
36
However, in the event that the Participant's spouse
(determined as of the date of the Participant's death) is the
designated Beneficiary, then in lieu of the preceding rules,
distributions must be made over the life of the spouse (or over a
period not extending beyond the life expectancy of the spouse) and
must commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year in which
the Participant would have attained age 70 1/2. If the surviving
spouse dies before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the spouse
was the Participant.
(h) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a
life annuity) may, at the election of the Participant or the
Participant's spouse, be redetermined in accordance with Regulations.
The election, once made, shall be irrevocable. If no election is made
by the time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(i) For purposes of this Section, any amount paid to a child of
the Participant will be treated as if it had been paid to the
surviving spouse if the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
5.9 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 5.7 and 5.8, whenever the Trustee is to
make a distribution or to commence a series of payments the distribution or
series of payments may be made or begun on such date or as soon thereafter as is
practicable. However, unless a Former Participant elects in writing to defer the
receipt of benefits (such election may not result in a death benefit that is
more than incidental), the payment of benefits shall begin not later than the
sixtieth (60th) day after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant attains the
earlier of age 65 or the Normal Retirement Age specified herein; (b) the tenth
(10th) anniversary of the year in which the Participant commenced participation
in the Plan; or (c) the date the Participant terminates service with the
Employer.
Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution that is
"immediately distributable" (within the meaning of Section 5.7), shall be deemed
to be an election to defer commencement of payment of any benefit sufficient to
satisfy this Section.
5.10 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or incompetent
Beneficiary, then the Administrator may direct that such distribution be paid to
the legal guardian, or if none in the case of a minor Beneficiary, to a parent
of such Beneficiary or a responsible adult with whom the Beneficiary maintains
residence, or to the custodian for such Beneficiary under the Uniform Gift to
Minors Act or Gift to Minors Act, if such is permitted by the laws of the state
in which said
37
Beneficiary resides. Such a payment to the legal guardian, custodian or parent
of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan
from further liability on account thereof.
5.11 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to
a Participant or Beneficiary hereunder shall, at the later of the Participant's
attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of
the inability of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further diligent effort,
to ascertain the whereabouts of such Participant or Beneficiary, the amount so
distributable shall be forfeited and shall be used to reduce the cost of the
Plan. Notwithstanding the foregoing, if the value of a Participant's Vested
benefit derived from Employer and Employee contributions does not exceed $5,000
($3,500 for Plan Years beginning prior to January 1, 1998, but for distributions
after March 28, 2005, the $5000 amount shall be reduced to $1000), then the
amount distributable may, in the sole discretion of the Administrator, either be
treated as a forfeiture, or be paid directly to an individual retirement account
described in Code Section 408(a) or an individual retirement annuity described
in Code Section 408(b) at the time it is determined that the whereabouts of the
Participant or the Participant's Beneficiary cannot be ascertained. In the event
a Participant or Beneficiary is located subsequent to the benefit being
forfeited, such benefit shall be restored unadjusted for earnings or losses.
However, regardless of the preceding, a benefit which is lost by reason of
escheat under applicable state law is not treated as a forfeiture for purposes
of this Section nor as an impermissable forfeiture under the Code.
5.12 EFFECT OF SOCIAL SECURITY ACT
Benefits being paid to a Participant or Beneficiary under the terms of
the Plan may not be decreased by reason of any post-separation Social Security
benefit increases or by the increase of the Social Security wage base under
Title II of the Social Security Act. Benefits to which a Former Participant has
a Vested interest may not be decreased by reason of an increase in a benefit
level or wage base under Title II of the Social Security Act.
5.13 LIMITATIONS ON DISTRIBUTIONS
In the event a Participant receives a distribution of the Vested
Accrued Benefit prior to Normal Retirement Age (determined without regard to any
years of participation), the excess/offset percentage, whichever is applicable
in Section 5.1 (a), shall be limited to .75/26.25%, whichever is applicable,
reduced l/15th for each of the first five (5) years and l/30th for each of the
next five (5) years and reduced actuarially for each additional year thereafter
that the date on which the benefit commences precedes the Participant's Social
Security Retirement Age. With respect to benefits commencing prior to the
Participant attaining age 55, the .75/26.25% shall be further reduced (on a
monthly basis to reflect the month in which benefits commence) to a percentage
that is the Actuarial Equivalent of the .75/26.25% (as reduced in accordance
with the preceding sentence) applicable to a benefit commencing in the month in
which the Participant attains age 55. For purposes of this paragraph, a benefit
commences on the first day of the period for which the benefit is paid.
Notwithstanding the above, if such benefit is distributed in a form other than a
nondecreasing life annuity payable for a period not less than the life of such
Participant and the
38
Actuarial Equivalent of the Vested Accrued Benefit of such Participant
attributable to .75/26.25% is greater than the benefit calculated above, such
amount shall be the benefit limitation.
5.14 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the Earliest
Retirement Age. For the purposes of this Section, "alternate payee" and
"qualified domestic relations order" shall have the meaning set forth under Code
Section 4l4(p).
5.15 LIMITATION OF BENEFITS ON TERMINATION
(a) Benefits distributed to any of the twenty-five (25) Highly
Compensated Participants with the greatest compensation in the current
or prior year are restricted such that the monthly payments are no
greater than an amount equal to the monthly payment that would be made
on behalf of such individual under a straight life annuity that is the
Actuarial Equivalent of the sum of the individual's Accrued Benefit,
the individual's other benefits under the Plan (other than a social
security supplement within the meaning of Regulation
1.411(a)-7(c)(4)(ii)), and the amount the individual is entitled to
receive under a social security supplement. However, the limitation of
this Section 5.15 shall not apply if:
(1) after payment of the benefit to an individual described
above, the value of Plan assets equals or exceeds one-hundred-ten
percent (110%) of the value of current liabilities, as defined in
Code Section 412(1)(7);
(2) the value of the benefits for an individual described above
is less than 1 percent of the value of current liabilities before
distribution; or
(3) the value of the benefits payable under the Plan to an
individual described above does not exceed $5,000 ($3,500 for
Plan Years beginning prior to January 1, 1998, but for
distributions after March 28, 2005, the $5000 amount shall be
reduced to $1000).
(b) For purposes of this Section, benefit includes any periodic
income, any withdrawal values payable to a living Participant, and any
death benefits not provided for by insurance on the individual's life.
39
(c) An individual's otherwise restricted benefit may be
distributed in full to the affected individual if, prior to receipt of
the restricted amount, the individual enters into a written agreement
with the Administrator to secure repayment to the Plan of the
restricted amount. The restricted amount is the excess of the amounts
distributed to the individual (accumulated with reasonable interest)
over the amounts that could have been distributed to the individual
under the straight life annuity described above (accumulated with
reasonable interest). The individual may secure repayment of the
restricted amount upon distribution by:
(1) entering into an agreement for promptly depositing in escrow
with an acceptable depositary, property having a fair market
value equal to at least one-hundred-twenty-five percent (125%) of
the restricted amount;
(2) providing a bank letter of credit in an amount equal to at
least one-hundred percent (100%) of the restricted amount; or
(3) posting a bond equal to at least one-hundred percent (100%)
of the restricted amount. The bond must be furnished by an
insurance company, bonding company or other surety for federal
bonds.
(d) The escrow arrangement may permit an individual to withdraw
from escrow amounts in excess of one-hundred-twenty-five percent
(125%) of the restricted amount. If the market value of the property
in an escrow account falls below one-hundred-ten percent (110%) of the
remaining restricted amount, the individual must deposit additional
property to bring the value of the property held by the depositary up
to one-hundred-twenty-five percent (125%) of the restricted amount.
The escrow arrangement may provide that the individual has the right
to receive any income from the property placed in escrow, subject to
the individual's obligation to deposit additional property, as set
forth in the preceding sentence.
(e) A surety or bank may release any liability on a bond or
letter of credit in excess of one-hundred percent (100%) of the
restricted amount.
(f) If the Administrator certifies to the depositary, surety or
bank that the individual (or the individual's estate) is no longer
obligated to repay any restricted amount, a depositary may deliver to
the individual any property held under an escrow arrangement, and a
surety or bank may release any liability on an individual's bond or
letter of credit.
ARTICLE VI
CODE SECTION 415 LIMITATIONS
6.1 ANNUAL BENEFIT
For purposes of this Article, "annual benefit" means the benefit
payable annually under the terms of the Plan (exclusive of any benefit not
required to be considered for purposes of applying the limitations of Code
Section 415 to the Plan) payable in the form of a straight life annuity with no
ancillary benefits. If the benefit under the Plan is payable in any other form,
the
40
"annual benefit" shall be adjusted to the equivalent of a straight life annuity
pursuant to Section 6.3(c).
6.2 MAXIMUM ANNUAL BENEFIT
(a) Notwithstanding the foregoing and subject to the exceptions
below, the maximum "annual benefit" payable to a Participant under
this Plan in any "limitation year" shall equal the lesser of: (1)
$90,000 payable as a straight life annuity, or (2) one hundred percent
(100%) of the Participant's "415 Compensation" averaged over the three
consecutive "limitation years" (or actual number of "limitation years"
for Employees who have been employed for less than three consecutive
"limitation years") during which the Employee had the greatest
aggregate "415 Compensation" from the Employer.
(b) For purposes of applying the limitations of Code Section 415,
the "limitation year" shall be the Calendar Year. All qualified plans
maintained by the Employer must use the same "limitation year." If the
"limitation year" is amended to a different twelve (12) consecutive
month period, the new "limitation year" must begin on a date within
the "limitation year" in which the amendment is made.
(c) Notwithstanding anything in this Article to the contrary, if
the Plan was in existence on May 6, 1986, and had complied at all
times with the requirements of Code Section 415, the maximum "annual
benefit" for any individual who is a Participant as of the first day
of the "limitation year" beginning after December 31, 1986, shall not
be less than the "current accrued benefit." "Current accrued benefit"
shall mean a Participant's Accrued Benefit under the Plan, determined
as if the Participant had separated from service as of the close of
the last "limitation year" beginning before January 1, 1987, when
expressed as an annual benefit within the meaning of Code Section
415(b)(2). In determining the amount of a Participant's "current
accrued benefit," the following shall be disregarded: (1) any change
in the terms and conditions of the Plan after May 5, 1986; and (2) any
cost of living adjustment occurring after May 5, 1986.
(d) The dollar limitation under Code Section 415(b)(l)(A) stated
in paragraph (a)(l) above shall be adjusted annually as provided in
Code Section 415(d) pursuant to the Regulations. The adjusted
limitation is effective as of January 1st of each calendar year and is
applicable to "limitation years" ending with or within that calendar
year.
(e) The limitation stated in paragraph (a)(2) above for
Participants who have separated from service with a non-forfeitable
right to an Accrued Benefit shall be automatically adjusted by
multiplying such limitation by the cost-of-living adjustment factor
prescribed by the Secretary of the Treasury under Code Section 415(d)
in such manner as the Secretary shall prescribe. The adjusted
limitation shall apply to "limitation years" ending with or within the
calendar year of the date of the adjustment.
41
(f) For the purpose of this Article, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
If a Participant is, or has ever been, a participant in more
than one defined benefit plan maintained by the Employer, the sum of
the Participant's "annual benefits" from all such plans may not exceed
the maximum "annual benefit" of this Section 6.2. Where the
Participant's Employer-provided benefits under all defined benefit
plans ever maintained by the Employer (determined as of the same age)
would exceed the maximum "annual benefit" applicable at that age, the
Employer will reduce the rate of accrual in this Plan to the extent
necessary so that the total "annual benefit" payable at any time under
such plans will not exceed the maximum "annual benefit."
(g) For the purpose of this Article, if the Employer is a member
of a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)) or is a member of
an affiliated service group (as defined by Code Section 414(m)), all
Employees of such Employers shall be considered to be employed by a
single Employer.
(h) If this is a plan described in Code Section 413(c) (other
than a plan described in Code Section 413(f)), then all of the
benefits or contributions attributable to a Participant from all of
the Employers maintaining this Plan shall be taken into account in
applying the limits of this Article with respect to such Participant.
Furthermore, in applying the limitations of this Article with respect
to such a Participant, the total "415 Compensation" received by the
Participant from all of the Employers maintaining the Plan shall be
taken into account.
(i) Notwithstanding anything contained in this Article to the
contrary, the limitations, adjustments and other requirements
prescribed in this Article shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder.
6.3 ADJUSTMENTS TO ANNUAL BENEFIT AND LIMITATIONS
(a) If the "annual benefit" begins before the Participant's
Social Security Retirement Age, but on or after age 62, the $90,000
limitation shall be reduced by: (1) in the case of a Participant whose
Social Security Retirement Age is 65, 5/9 of 1% for each month by
which benefits commence before the month in which the Participant
attains age 65, or (2) in the case of a Participant whose Social
Security Retirement Age is greater than 65, 5/9 of 1% for each of the
first 36 months and 5/12 of 1% for each additional month (up to 24) by
which benefits commence before the month in which the Participant
attains Social Security Retirement Age. If the "annual benefit" begins
before age 62, the $90,000 limitation shall be the actuarial
equivalent of the Participant's limitation for
42
benefits commencing at age 62, reduced for each month by which
benefits commence before the month in which the Participant attains
age 62.
In order to determine actuarial equivalence for this
purpose, the lesser of the equivalent amount computed using the Plan
interest rate and Plan mortality table (or other tabular factor) and
the amount computed using five percent (5%) interest and the
"Applicable Mortality Table" shall be used. The mortality decrement
shall be ignored to the extent that a forfeiture does not occur at
death.
(b) If the "annual benefit" begins after the Participant's Social
Security Retirement Age the $90,000 limitation shall be increased so
that it is the actuarial equivalent of the $90,000 limitation at the
Participant's Social Security Retirement Age. In order to determine
actuarial equivalence for this purpose, the lesser of the equivalent
amount computed using the Plan interest rate and Plan mortality table
(or other tabular factor) used for actuarial equivalence for late
retirement benefits under the Plan and the equivalent annual amount
computed using five percent (5%) and the "Applicable Mortality Table"
shall be used. The mortality decrement shall be ignored to the extent
that a forfeiture does not occur at death.
(c) For purposes of adjusting the "annual benefit" to a straight
life annuity, the equivalent "annual benefit" shall be the greater of
the equivalent "annual benefit" computed using the Plan interest rate
and Plan mortality table (or other tabular factor) and the equivalent
"annual benefit" computed using five percent (5%) interest rate
assumption and the "Applicable Mortality Table." If the "annual
benefit" is paid in a form other than a nondecreasing life annuity
payable for a period not less than the life of a Participant or, in
the case of a Pre-Retirement Survivor Annuity, the life of the
surviving spouse, the "Applicable Interest Rate" shall be substituted
for five percent (5%) in the preceding sentence.
(d) For purposes of Sections 6.1, 6.3(a) and 6.3(b), no
adjustments under Code Section 415(d) shall be taken into account
before the "limitation year" for which such adjustment first takes
effect.
(e) For purposes of Section 6.1, no actuarial adjustment to the
benefit is required for (1) the value of a qualified joint and
survivor annuity, (2) benefits that are not directly related to
retirement benefits (such as a qualified disability benefit,
pre-retirement death benefits, and post-retirement medical benefits),
and (3) the value of post-retirement cost-of-living increases made in
accordance with Code Section 415(d) and Regulation 1.415-3(c)(2)(iii).
The "annual benefit" does not include any benefits attributable to
Employee contributions or rollover contributions, or the assets
transferred from a qualified plan that was not maintained by the
Employer.
6.4 ANNUAL BENEFIT NOT IN EXCESS OF $10,000
This Plan may pay an "annual benefit" to any Participant in excess of
the Participant's maximum "annual benefit" if the "annual benefit" derived from
Employer
43
contributions under this Plan and all other defined benefit plans maintained by
the Employer does not in the aggregate exceed $10,000 for the "limitation year"
or for any prior "limitation year" and the Employer has not at any time
maintained a defined contribution plan, a welfare benefit fund under which
amounts attributable to post-retirement medical benefits are allocated to
separate accounts of key employees (as defined in Code Section 419(A)(d)(3)), or
an individual medical account in which the Participant participated. For
purposes of this paragraph, if this Plan provides for voluntary or mandatory
Employee contributions, such contributions will not be considered a separate
defined contribution plan maintained by the Employer.
6.5 PARTICIPATION OR SERVICE REDUCTIONS
If a Participant has less than ten (10) years of participation in the
Plan at the time the Participant begins to receive benefits under the Plan, the
limitations in Sections 6.2(a)(l) and 6.3 shall be reduced by multiplying such
limitations by a fraction (a) the numerator of which is the number of years of
participation (or part thereof) in the Plan and (b) the denominator of which is
ten (10), provided, however, that said fraction shall in no event be less than
1/1Oth. The limitations of Sections 6.2(a)(2) and 6.4 shall be reduced in the
same manner except the preceding sentence shall be applied with respect to years
of service with the Employer rather than years of participation in the Plan.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method" determined by
the Employer, to invest, manage, and control the Plan assets
subject, however, to the direction of the Employer or an
Investment Manager if the Trustee should appoint such manager as
to all or a portion of the assets of the Plan;
(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the
event of their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and furnish
to the Employer and/or Administrator for each Plan Year a written
annual report pursuant to Section 7.6.
(b) In the event that the Trustee shall be directed by the
Employer, or an Investment Manager with respect to the investment of
any or all Plan assets, the Trustee shall have no liability with
respect to the investment of such assets, but shall be responsible
only to execute such investment instructions as so directed.
(1) The Trustee shall be entitled to rely fully on the written
(or other form acceptable to the Administrator and the Trustee,
including, but not
44
limited to, voice recorded) instructions of the Employer, or any
Fiduciary or nonfiduciary agent of the Employer, in the discharge
of such duties, and shall not be liable for any loss or other
liability, resulting from such direction (or lack of direction)
of the investment of any part of the Plan assets.
(2) The Trustee may delegate the duty of executing such
instructions to any nonfiduciary agent, which may be an affiliate
of the Trustee or any Plan representative.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to
sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not
limited to, stocks, common or preferred, open-end or closed-end mutual
funds, bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all times in
making investments of the Trust Fund consider, among other factors,
the short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments, the
Trustee shall not be restricted to securities or other property of the
character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times the
Plan may qualify as a qualified Pension Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to
the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a
custodial, clerical and record-keeping nature.
(c) The Trustee may transfer to a common, collective, pooled
trust fund or money market fund maintained by any corporate Trustee or
affiliate thereof hereunder, all or such part of the Trust Fund as the
Trustee may deem advisable, and such part or all of the Trust Fund so
transferred shall be subject to all the terms and provisions of the
common, collective, pooled trust fund or money market fund which
contemplate the commingling for investment purposes of such trust
assets with trust assets of other trusts. The Trustee may transfer any
part of the Trust Fund intended for temporary investment of cash
balances to a money market fund maintained by FirsTrust Financial
Services, Inc. or its affiliates. The Trustee may withdraw from such
common, collective, pooled trust fund or money market fund all or such
part of the Trust Fund as the Trustee may deem advisable.
45
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power
of substitution; to exercise any conversion privileges, subscription
rights or other options, and to make any payments incidental thereto;
to oppose, or to consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities, or other
property. However, the Trustee shall not vote proxies relating to
securities for which it has not been assigned full investment
management responsibilities. In those cases where another party has
such investment authority or discretion, the Trustee will deliver all
proxies to said party who will then have full responsibility for
voting those proxies;
(d) To cause any securities or other property to be registered in
the Trustee's own name, in the name of one or more of the Trustee's
nominees, in a clearing corporation, in a depository, or in book entry
form or in bearer form, but the books and records of the Trustee shall
at all times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
46
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as
Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or
defend suits or legal or administrative proceedings, and to represent
the Plan in all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or
may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of
the Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity or other Contracts as
and when entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest or in cash or cash
balances without liability for interest thereon, including the
specific authority to invest in any type of deposit of the Trustee (or
of a financial institution related to a Trustee);
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under
the Investment Company Act of 1940, including any money market fund
advised by or offered through FirsTrust Financial Services, Inc.;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange regardless of whether such options are covered;
(p) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations
including the specific authority to make deposit into any savings
accounts or certificates of deposit of the Trustee (or a financial
institution related to the Trustee);
47
(q) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle
such assets and make joint or common investments and carry joint
accounts on behalf of this Plan and Trust and such other trust or
trusts, allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(r) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan.
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in
the Trustee's fee schedule (if the Trustee has such a schedule) or as agreed
upon in writing by the Employer and the Trustee. However, an individual serving
as Trustee who already receives full-time pay from the Employer shall not
receive compensation from the Plan. In addition, the Trustee shall be reimbursed
for any reasonable expenses, including reasonable counsel fees incurred by it as
Trustee. Such compensation and expenses shall be paid from the Trust Fund unless
paid or advanced by the Employer. All taxes of any kind whatsoever that may be
levied or assessed under existing or future laws upon, or in respect of, the
Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.6 ANNUAL REPORT OF THE TRUSTEE
(a) Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan
Year, the Trustee, or its agent, shall furnish to the Employer and
Administrator a written statement of account with respect to the Plan
Year for which such contribution was made setting forth:
(1) the net income, or loss, of the Trust Fund;
(2) the gains, or losses, realized by the Trust Fund upon sales
or other disposition of the assets;
(3) the increase, or decrease, in the value of the Trust Fund;
(4) all payments and distributions made from the Trust Fund; and
(5) such further information as the Trustee and/or Administrator
deems appropriate.
48
(b) The Employer, promptly upon its receipt of each such
statement of account, shall acknowledge receipt thereof in writing and
advise the Trustee and/or Administrator of its approval or disapproval
thereof. Failure by the Employer to disapprove any such statement of
account within thirty (30) days after its receipt thereof shall be
deemed an approval thereof. The approval by the Employer of any
statement of account shall be binding on the Employer and the Trustee
as to all matters contained in the statement to the same extent as if
the account of the Trustee had been settled by judgment or decree in
an action for a judicial settlement of its account in a court of
competent jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were parties.
However, nothing contained in this Section shall deprive the Trustee
of its right to have its accounts judicially settled if the Trustee so
desires.
7.7 AUDIT
(a) If an audit of the Plan's records shall be required by the
Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and
records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan
Year, furnish to the Administrator and the Trustee a report of the
audit setting forth the accountant's opinion as to whether any
statements, schedules or lists that are required by Act Section 103 or
the Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and
may, at the election of the Employer, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated, supervised, and
subject to periodic examination by a state or federal agency, then it
shall transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one hundred
twenty (120) days after the end of the Plan Year or such other date as
may be prescribed under regulations of the Secretary of Labor.
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) Unless otherwise agreed to by both the Trustee and the
Employer, a Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of resignation.
(b) Unless otherwise agreed to by both the Trustee and the
Employer, the Employer may remove a Trustee at any time by delivering
to the Trustee, at
49
least thirty (30) days before its effective date, a written notice of
such Trustee's removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the powers and responsibilities of the predecessor as if such
successor had been originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or Trustees shall have
full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to
the death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the powers and responsibilities of the predecessor as if such
successor had been originally named as Trustee herein immediately upon
the death, resignation, incapacity, or removal of the predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, the
Trustee shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year
during which the individual or entity served as Trustee. This
statement shall be either (i) included as part of the annual statement
of account for the Plan Year required under Section 7.6 or (ii) set
forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the
annual statement of account for the Plan Year. The procedures set
forth in Section 7.6 for the approval by the Employer of annual
statements of account shall apply to any special statement of account
rendered hereunder and approval by the Employer of any such special
statement in the manner provided in Section 7.6 shall have the same
effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty
or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by
Section 7.6 and this subparagraph.
7.9 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of a Participant to another trust forming part of a pension,
profit sharing or stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the requirements of Code
Section 401(a), provided that the trust to which such transfers are made permits
the transfer to be made.
7.10 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and hold harmless the Trustee against
any and all claims, losses, damages, expenses and liabilities the Trustee may
incur in the exercise and
50
performance of the Trustee's power and duties hereunder, unless the same are
determined to be due to gross negligence or willful misconduct.
7.11 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a "distributee's" election under this
Section, a "distributee" may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an "eligible
rollover distribution" that is equal to at least $500 paid directly to
an "eligible retirement plan" specified by the "distributee" in a
"direct rollover."
(b) For purposes of this Section the following definitions shall
apply:
(1) An "eligible rollover distribution" is any distribution of
all or any portion of the balance to the credit of the
"distributee," except that an "eligible rollover distribution"
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
"distributee" or the joint lives (or joint life expectancies) of
the "distributee" and the "distributee's" designated beneficiary,
or for a specified period of ten years or more; any distribution
to the extent such distribution is required under Code Section
40l(a)(9); the portion of any other distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities); any hardship distribution described in Code
Section 401(k)(2)(B)(i)(IV); and any other distribution that is
reasonably expected to total less than $200 during a year.
(2) An "eligible retirement plan" is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), or a qualified trust
described in Code Section 401 (a), that accepts the
"distributee's" "eligible rollover distribution." However, in the
case of an "eligible rollover distribution" to the surviving
spouse, an "eligible retirement plan" is an individual retirement
account or individual retirement annuity.
(3) A "distributee" includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are "distributees" with
regard to the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the "eligible
retirement plan" specified by the "distributee."
51
ARTICLE VIII
PLAN AMENDMENT
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee or Administrator may only be made with the Trustee's or
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the Accrued Benefit of any Participant (except to the
extent permitted under Code Section 412(c)(8)); or causes or permits
any portion of the Trust Fund to revert to or become property of the
Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the extent
it eliminates or reduces any "Section 411(d)(6) protected benefit" or
adds or modifies conditions relating to "Section 411(d)(6) protected
benefits" which results in a further restriction on such benefit
unless such "Section 411(d)(6) protected benefits" are preserved with
respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A), early
retirement benefits and retirement-type subsidies, and optional forms
of benefit.
(d) If this Plan is amended and an effect of such amendment is to
increase current liability (as defined in Code Section 401(a)(29)(E))
under the Plan for a Plan Year, and the funded current liability
percentage of the Plan for the Plan Year in which the amendment takes
effect is less than sixty percent (60%), including the amount of the
unfunded current liability under the Plan attributable to the
amendment, the amendment shall not take effect until the Employer (or
any member of a controlled group which includes the Employer) provides
security to the Plan. The form and amount of such security shall
satisfy the requirements of Code Section 401(a)(29)(B) and (C). Such
security may be released provided the requirements of Code Section
401(a)(29)(D) are satisfied.
52
ARTICLE IX
PLAN TERMINATION
9.1 TERMINATION
(a) The Employer shall have the right to terminate the Plan by
delivering to the Trustee and Administrator written notice of such
termination. However, any termination (other than a partial
termination or an involuntary termination pursuant to Act Section
4042) must satisfy the requirements and follow the procedures outlined
herein and in Act Section 4041 for a Standard Termination or a
Distress Termination. Upon any termination (full or partial), all
amounts shall be allocated in accordance with the provisions hereof
and the Accrued Benefit, to the extent funded as of such date, of each
affected Participant shall become fully Vested and shall not
thereafter be subject to forfeiture. However, Participants who were
not fully Vested at the time they received a complete distribution of
their Vested benefits prior to the date of termination, shall not
become entitled to any additional Vested benefits on account of Plan
termination. The preceding sentence does not apply to Participants
affected by a partial termination by operation of law.
(b) Standard Termination Procedure --
(1) The Administrator shall first notify all "affected parties"
(as defined in Act Section 400l(a)(21)) of the Employer's
intention to terminate the Plan and the proposed date of
termination. Such termination notice must be provided at least
sixty(60) days prior to the proposed termination date. However,
in the case of a standard termination, it shall not be necessary
to provide such notice to the Pension Benefit Guaranty
Corporation (PBGC). As soon as practicable after the termination
notice is given, the Administrator shall provide a follow-up
notice to the PBGC setting forth the following:
(i) a certification of an enrolled actuary of the projected
amount of the assets of the Plan as of the proposed date of
final distribution of assets, the actuarial present value of
the "benefit liabilities" (as defined in Act Section
4001(a)(16)) under the Plan as of the proposed termination
date, and confirmation that the Plan is projected to be
sufficient for such "benefit liabilities" as of the proposed
date of final distribution;
(ii) a certification by the Administrator that the
information provided to the PBGC and upon which the enrolled
actuary based the certification is accurate and complete;
and
(iii) such other information as the PBGC may prescribe by
regulation.
53
The certification of the enrolled actuary and of the
Administrator shall not be applicable in the case of a plan
funded exclusively by individual insurance contracts.
(2) No later than the date on which the follow-up notice is sent
to the PBGC, the Administrator shall provide all Participants and
Beneficiaries under the Plan with an explanatory statement
specifying each such person's "benefit liabilities," the benefit
form on the basis of which such amount is determined, and any
additional information used in determining "benefit liabilities"
that may be required pursuant to regulations promulgated by the
PBGC.
(3) A standard termination may only take place if at the time the
final distribution of assets occurs, the Plan is sufficient to
meet all "benefit liabilities" determined as of the termination
date.
(c) Distress Termination Procedure --
(1) The Administrator shall first notify all "affected parties"
of the Employer's intention to terminate the Plan and the
proposed date of termination. Such termination notice must be
provided at least sixty(60) days prior to the proposed
termination date. As soon as practicable after the termination
notice is given, the Administrator shall also provide a follow-up
notice to the PBGC setting forth the following:
(i) a certification of an enrolled actuary of the amount, as
of the proposed termination date, of the current value of
the assets of the Plan, the actuarial present value (as of
such date) of the "benefit liabilities" under the Plan,
whether the Plan is sufficient for "benefit liabilities" as
of such date, the actuarial present value (as of such date)
of benefits under the Plan guaranteed under Act Section
4022, and whether the Plan is sufficient for guaranteed
benefits as of such date;
(ii) in any case in which the Plan is not sufficient for
"benefit liabilities" as of such date, the name and address
of each Participant and Beneficiary under the Plan as of
such date;
(iii) a certification by the Administrator that the
information provided to the PBGC and upon which the enrolled
actuary based the certification is accurate and complete;
and
(iv) such other information as the PBGC may prescribe by
regulation.
The certification of the enrolled actuary and of the
Administrator shall not be applicable in the case of a plan
funded exclusively by individual insurance contracts.
54
(2) A distress termination may only take place if:
(i) the Employer demonstrates to the PBGC that such
termination is necessary to enable the Employer to pay its
debts while staying in business, or to avoid unreasonably
burdensome pension costs caused by a decline in the
Employer's work force;
(ii) the Employer is the subject of a petition seeking
liquidation in a bankruptcy or insolvency proceeding which
has not been dismissed as of the proposed termination date;
or
(iii) the Employer is the subject of a petition seeking
reorganization in a bankruptcy or insolvency proceeding
which has not been dismissed as of the proposed termination
date, and the bankruptcy court (or such other appropriate
court) approves the termination and determines that the
Employer will be unable to continue in business outside a
Chapter 11 reorganization process and that such termination
is necessary to enable the Employer to pay its debts
pursuant to a plan of reorganization.
(d) Priority and Payment of Benefits: In the case of a distress
termination, upon approval by the PBGC that the Plan is sufficient for
"benefit liabilities" or for "guaranteed benefits," or in the case of
a standard termination, a letter of non-compliance has not been issued
within the sixty (60) day period (as extended) following the receipt
by the PBGC of the follow-up notice, the Administrator shall allocate
the assets of the Plan among Participants and Beneficiaries pursuant
to Act Section 4044(a). As soon as practicable thereafter, the assets
of the Trust shall be distributed to the Participants and
Beneficiaries, in cash or through the purchase of irrevocable
commitments from an insurer, in a manner consistent with Section 5.7.
However, if all liabilities with respect to Participants and
Beneficiaries under the Plan have been satisfied and there remains a
balance in the Trust due to erroneous actuarial computation, such
balance, if any, shall be returned to the Employer. In the case of a
distress termination in which the PBGC is unable to determine that the
Plan is sufficient for guaranteed benefits, the assets of the Plan
shall only be distributed in accordance with proceedings instituted by
the PBGC.
(e) The termination of the Plan shall comply with such other
requirements and rules as may be promulgated by the PBGC under
authority of Title IV of the Act, including any rules relating to time
periods or deadlines for providing notice or for making a necessary
filing.
9.2 LIMITATION OF BENEFITS ON PLAN TERMINATION
In the event of Plan termination, the benefit of any Highly
Compensated Participant or any highly compensated former employee shall be
limited to a benefit that is nondiscriminatory under Code Section 401(a)(4).
55
ARTICLE X
MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
10.1 REQUIREMENTS
Before this Plan can be merged or consolidated with any other
qualified plan or its assets or liabilities transferred to any other qualified
plan, the Administrator must secure (and file with the Secretary of Treasury at
least thirty (30) days beforehand) a certification from a government-enrolled
actuary that the benefits which would be received by a Participant of this Plan,
in the event of a termination of the Plan immediately after such transfer,
merger or consolidation, are at least equal to the benefits the Participant
would have received if the Plan had terminated immediately before the transfer,
merger or consolidation, and such transfer, merger or consolidation does not
otherwise result in the elimination or reduction of any "Section 411(d)(6)
protected benefits" as described in Section 8.1.
ARTICLE XI
TOP HEAVY
11.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 5.6 of the Plan
and the special minimum benefit requirements of Code Section 416(c) pursuant to
Section 5.2 of the Plan.
11.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued Benefits
and the Aggregate Accounts of all Key and Non-Key Employees under this
Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group). In
addition, if a Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time during the
five year period ending on the Determination Date, any accrued benefit
for such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a Top
Heavy Plan.
(b) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date shall be determined under applicable provisions
of the defined contribution plan used in determining Top Heavy Plan
status.
56
(c) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a
Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and
each other plan of the Employer which enables any plan in which a
Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the Required
Aggregation Group will be considered a Top Heavy Plan if the
Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of Code Sections
401(a)(4) and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is a Top Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group
is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in
order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years
ending on the Determination Date.
(d) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
(e) Present Value of Accrued Benefit: In the case of a defined
benefit plan, a Participant's Present Value of Accrued Benefit shall
be determined:
(1) in the case of a Participant other than a Key Employee, using
the single accrual method used for all plans of the Employer and
Affiliated Employers, or if no such single method exists, using a
method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code Section
411(b)(l)(C).
57
(2) as of the most recent "actuarial valuation date," which is
the most recent valuation date within a twelve (12) month period
ending on the Determination Date.
(3) for the first Plan Year, as if (a) the Participant terminated
service as of the Determination Date; or (b) the Participant
terminated service as of the actuarial valuation date, but taking
into account the estimated Accrued Benefits as of the
Determination Date.
(4) for the second Plan Year, the Accrued Benefit taken into
account for a current Participant must not be less than the
Accrued Benefit taken into account for the first Plan Year unless
the difference is attributable to using an estimate of the
Accrued Benefit as of the Determination Date for the first Plan
Year and using the actual Accrued Benefit for the second Plan
Year.
(5) for any other Plan Year, as if the Participant terminated
service as of the actuarial valuation date.
(6) the actuarial valuation date must be the same date used for
computing the defined benefit plan minimum funding costs,
regardless of whether a valuation is performed that Plan Year.
(7) by not taking into account proportional subsidies.
(8) by taking into account nonproportional subsidies.
(f) The calculation of a Participant's Present Value of Accrued
Benefit as of a Determination Date shall be the sum of:
(1) the Present Value of Accrued Benefit using the actuarial
assumptions of Section 1.3, which assumptions shall be identical
for all defined benefit plans being tested for Top Heavy Plan
status.
(2) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
valuation date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already
included in the Participant's Present Value of Accrued Benefit as
of the valuation date. Notwithstanding anything herein to the
contrary, all distributions, including distributions under a
terminated plan which if it had not been terminated would have
been required to be included in an Aggregation Group, will be
counted. Further, benefits paid on account of death, to the
extent such benefits do not exceed the Present Value of Accrued
Benefits existing immediately prior to death, shall be treated as
distributions for the purposes of this paragraph.
58
(3) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible Qualified
Voluntary Employee Contributions shall not be considered to be a
part of the Participant's Present Value of Accrued Benefit.
(4) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made
from a plan maintained by one employer to a plan maintained by
another employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such rollovers
or plan-to-plan transfers as a distribution for the purposes of
this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers accepted after December 31,1983, as
part of the Participant's Present Value of Accrued Benefit.
(5) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan transfers, it shall
consider such rollovers or plan-to-plan transfers as part of the
Participant's Present Value of Accrued Benefit, irrespective of
the date on which such rollovers or plan-to-plan transfers are
accepted.
(6) for the purposes of determining whether two employers are to
be treated as the same employer in (4) and (5) above, all
employers aggregated under Code Section 414(b), (c), (m) or (o)
are treated as the same employer.
(g) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for
all Participants.
ARTICLE XII
MISCELLANEOUS
12.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or
59
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge shall have upon the Employee
as a Participant of this Plan.
12.2 ALIENATION
(a) Subject to the exceptions provided below, and as otherwise
permitted by the Code and the Act, no benefit which shall be payable
out of the Trust Fund to any person (including a Participant or the
Participant's Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
(b) Subsection (a) shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order," a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
(c) Subsection (a) shall not apply to an offset to a
Participant's accrued benefit against an amount that the Participant
is ordered or required to pay the Plan with respect to a judgment,
order, or decree issued, or a settlement entered into, on or after
August 5, 1997, in accordance with Code Sections 401(a)(13)(C) and
(D). In a case in which the survivor annuity requirements of Code
Section 401(a)(11) apply with respect to distributions from the Plan
to the Participant, if the Participant has a spouse at the time at
which the offset is to be made:
(1) either such spouse has consented in writing to such offset
and such consent is witnessed by a notary public or
representative of the Plan (or it is established to the
satisfaction of a Plan representative that such consent may not
be obtained by reason of circumstances described in Code Section
417(a)(2)(B)), or an election to waive the right of the spouse to
either a qualified joint and survivor annuity or a qualified
pre-retirement survivor annuity is in effect in accordance with
the requirements of Code Section 417(a),
(2) such spouse is ordered or required in such judgment, order,
decree or settlement to pay an amount to the Plan in connection
with a violation of fiduciary duties, or
60
(3) in such judgment, order, decree or settlement, such spouse
retains the right to receive the survivor annuity under a
qualified joint and survivor annuity provided pursuant to Code
Section 401(a)(ll)(A)(i) and under a qualified pre-retirement
survivor annuity provided pursuant to Code Section
401(a)(ll)(A)(ii).
12.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Code, the Act and the laws of the State of Arkansas, other than its laws
respecting choice of law, to the extent not pre-empted by the Act.
12.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
12.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
12.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted
by law, it shall be impossible by operation of the Plan or of the
Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by
any other means, for any part of the corpus or income of any Trust
Fund maintained pursuant to the Plan or any funds contributed thereto
to be used for, or diverted to, purposes other than the exclusive
benefit of Participants, Former Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
61
12.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors, shall
not be responsible for the validity of any Contract issued hereunder or for the
failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
12.8 INSURER'S PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the Employer and
the insurer, an insurer which issues any Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
12.9 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participant's legal
representative, Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of the Plan, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Trustee and the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
12.10 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
12.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan,
including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference. In
general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the sole responsibility for the
administration of the Plan, including, but not limited to, the items specified
at Article II of the Plan, as the same may be allocated or delegated thereunder.
The Trustee shall have the sole responsibility of management of the assets held
under the Trust, except to the extent directed pursuant to Article II or with
respect to those assets, the management of which has been assigned
62
to an Investment Manager, who shall be solely responsible for the management of
the assets assigned to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan as specified or allocated herein. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity.
12.12 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
12.13 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant to an
application for qualification filed by or on behalf of the Plan by the time
prescribed by law for filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date that the Secretary of the Treasury may
prescribe, the Commissioner of Internal Revenue Service or the Commissioner's
delegate should determine that the Plan does not initially qualify as a
tax-exempt plan under Code Sections 401 and 501, and such determination is not
contested, or if contested, is finally upheld, then if the Plan is a new plan,
it shall be void ab initio and all amounts contributed to the Plan by the
Employer, less expenses paid, shall be returned within one (1) year and the Plan
shall terminate, and the Trustee shall be discharged from all further
obligations. If the disqualification relates to an amended plan, then the Plan
shall operate as if it had not been amended.
12.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
12.15 INTERPRETATION OF AGREEMENT
(a) The Employer established this Plan effective May 1, 1984. The
Employer froze the benefits under the Plan as of September 30, 2005,
and directed that the Trust created by this Agreement be continued and
that distribution of benefits to Participants be made at such time and
in such manner as though the Plan had not frozen benefit accruals.
(b) The Plan is being amended and restated as of September 1,
2005 in order to maintain its qualified status under the Code and the
Act.
63
(c) All provisions of the Plan shall be construed and interpreted
in a manner consistent with the freezing of benefit accruals under the
Plan as of September 30,2005.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
BANK OF MOUNTAIN VIEW
By /s/ Illegible
-------------------------------------
Authorized Officer
FIRSTRUST FINANCIAL SERVICES, INC.
By /s/ Illegible
-------------------------------------
Authorized Officer
64
SUNGARD VOLUME SUBMITTER MODIFICATIONS
RETIREMENT PLAN AND TRUST FOR EMPLOYEES OF BANK OF MOUNTAIN VIEW
001
The enclosed Plan is being submitted for expedited review as a Volume Submitter
Plan.
Certain modifications from the approved specimen plan have been made to this
Plan. In accordance with Rev. Proc. 2005-6 submission requirements, the
location, nature and effect of these changes are listed below.
To facilitate your review of these changes, we have extracted from the Plan
document the entire paragraph in which a change occurred. We have indicated the
page number or the Section of the Plan document where the modified paragraph
appears. The effect the change has on the Plan is listed below the paragraph.
THE CHANGED PARAGRAPH IS IN SECTION: 5.6(c)
1 0%
2 0%
3 0%
4 0%
5 100%
6 100%
7 100%
[pre-amendment vesting schedule]
SUNGARD VOLUME SUBMITTER MODIFICATIONS
RETIREMENT PLAN AND TRUST FOR EMPLOYEES OF BANK OF MOUNTAIN VIEW
001
The enclosed Plan is being submitted for expedited review as a Volume Submitter
Plan.
No modifications from the approved specimen plan have been made to this Plan.