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EXHIBIT 10.13
HOLLYWOOD THEATERS, INC,
401(k) SAVINGS PLAN
as amended and restated
effective July 10, 1995
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PREAMBLE
The purpose of this Plan and Trust is to provide, in accordance with its
provisions, a defined contribution plan providing retirement and other related
benefits for those Employees of the Employer who are eligible to participate
hereunder. This document is a complete amendment and restatement of the Trans
Texas Amusements, Inc. Retirement Savings Plan, which was originally effective
as of January 1, 1993.
It is intended that the Plan qualify for approval under Sections 401 and 410
through 417 of the Internal Revenue Code. It is intended that the Trust
qualify for approval under Section 501 of the Code. It is further intended
that the Plan comply with the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). In case of any ambiguity in the Plan's language,
it will be interpreted to accomplish the Plan's intent of qualifying under the
Code and complying with ERISA.
This Plan and Trust is exclusively for the benefit of the eligible Employees
and their Beneficiaries. Neither the Employer, the Plan Administrator nor the
Trustee will apply or interpret the terms of the Plan in any manner that
permits discrimination in favor of Highly Compensated Employees. All Employees
under similar circumstances will be treated alike.
The undersigned Employer and Trustee hereby adopt this restatement of the
Hollywood Theaters, Inc. 401(K) Savings Plan to be effective as of July 10,
1995.
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ARTICLE 1
DEFINITIONS
As used in this document, unless otherwise defined or required by the context,
the following terms have the meanings set forth in this Article 1. Some of the
terms used in this document are not defined in Article 1, but for convenience
are defined as they are introduced in the text.
1.01 Account
Account means a separate account maintained for each Participant
reflecting applicable contributions, applicable forfeitures, investment
income (loss) allocated to the account and distributions.
1.02 Accounting Date, Valuation Date
The term Accounting Date means the last day of each Accounting Period
and any other days within the Accounting Period upon which, consistent
with established methods and guidelines, the Plan Administrator applies
the accounting procedures specified in Section 4.02. The term Valuation
Date, unless otherwise specified, means any business day on which the
New York Stock Exchange is open.
1.03 Accounting Period
Accounting Period means each of the 3-month periods which end on March
31st, June 30th, September 30th and December 31st.
1.04 Accrued Benefit
A Participant's Accrued Benefit means the total value, as of a given
date, of his Accounts determined as of the Valuation Date immediately
preceding the date of determination. A Participant's Accrued Benefit
will not be reduced solely on account of any increase in the
Participant's age or service or on account of an amendment to the Plan.
A Participant's Vested Accrued Benefit is equal to his Vested Percentage
of that portion of his Accrued Benefit which is subject to the Vesting
Schedule plus 100% of the remaining portion of his Accrued Benefit.
1.05 Beneficiary
Beneficiary means the person, persons, trust or other entity who is
designated to receive any amount payable upon the death of a
Participant.
1.06 Cash-Out Distribution
Cash-Out Distribution means, as described in Article 5, a distribution
to a Participant upon termination of employment of his Vested Accrued
Benefit.
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1.07 Code and ERISA
Code means the Internal Revenue Code of 1986, as it may be amended from
time to time, and all regulations issued thereunder. Reference to a
section of the Code includes that section and any comparable section or
sections of any future legislation that amends, supplements or
supersedes such section and any regulations issued thereunder.
ERISA means Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as it may be amended from time to time, and all
regulations issued thereunder. Reference to a section of ERISA includes
that section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section and any
regulations issued thereunder.
1.08 Compensation
Except where otherwise specifically provided in this Plan, Compensation
means Aggregate Compensation as defined in Section 7.03(a).
Compensation also includes any amounts contributed by the Employer or
any Related Employer on behalf of any Employee pursuant to a salary
reduction agreement which are not includable in the gross income of the
Employee due to Code Section 125, 401(k), 402(h) or 403(b).
Notwithstanding the foregoing, for all purposes under this Plan,
Compensation in excess of the Statutory Compensation Limit will be
disregarded. For purposes of applying this compensation limit, a Family
Member of a Highly Compensated Employee is subject to the single
aggregate compensation limit imposed on the Highly Compensated Employee
if the Family Member is either the Employee's spouse or is a lineal
descendant who has not attained the age of 19 by the end of the Plan
year.
Statutory Compensation Limit means $150,000 ($200,000 for Plan Years
beginning before 1994), as adjusted in accordance with Code Section
401(a)(17)(B).
With respect to a given period, a Participant's Excess Compensation is
that portion, if any, of his Compensation which is in excess of his
Integration Level.
For any given Plan Year, a Participant's annual Integration level is
equal to 100% of the Taxable Wage Base for the calendar year in which
the Plan Year begins.
Taxable Wage Base means the Social Security taxable wage base under Code
Section 3121(a)(1) which is in effect at the beginning of the Plan Year.
1.09 Effective Date
The Effective Date of the Plan is January 1, 1993.
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Except as specified elsewhere in this document, the effective date of
this restatement of the Plan is August 1, 1995.
Section 4.05 is effective January 1, 1993.
1.10 Eligible Employee Classification
An Eligible Employee Classification is a classification of Employees,
the members of which are eligible to participate in the Plan. The Plan
covers all employee classifications except Leased Employees.
1.11 Eligible Participant
An Eligible Participant is a Participant who is eligible to share in the
allocation of a given Employer contribution; Eligible Participant means
any Participant who:
o is actively employed on the last day of the Plan Year; or
o retires, dies or becomes disabled juring the Plan Year.
1.12 Employee
(a) In General
An Employee is any person who is employed by the Employer or a
Participating Employer.
(b) Leased Employee
A Leased Employee means any person who, pursuant to an agreement
between the Employer or any Related Employer ("Recipient
Employer") and any other person ("leasing organization"), has
performed services for the Recipient Employer on a substantially
full-time basis for a period of at least one year and such
services are of a type historically performed by employees in the
business field of the Recipient Employer.
Any Leased Employee will be treated as an Employee of the
Recipient Employer; however, contributions or benefits provided
by the leasing organization which are attributable to the
services performed for the Recipient Employer will be treated as
provided by the Recipient Employer. If all Leased Employees
constitute less than 20% of the Employer's non-highly-compensated
work force within the meaning of Code Section 414(n)(1)(C)(ii),
then the preceding sentence will not apply to any Leased Employee
if such Employee is covered by a money purchase pension plan
("Safe Harbor Plan") which provides: (1) a nonintegrated employer
contribution rate of at least 10% of compensation, (2) immediate
participation, and (3) full and immediate vesting.
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Years of Eligibility Service for purposes of eligibility to
participate in the Plan and Years of Vesting Service for purposes
of determining a Participant's Vested Percentage include service
by an Employee as a Leased Employee.
1.13 Employer
The Employer and Plan Sponsor is Hollywood Theaters, Inc. A
Participating Employer is any organization which has adopted this Plan
and Trust in accordance with Section 8.07.
Predecessor Employer means Trans Texas Amusements, Inc. Service with a
Predecessor Employer will be included as Service with the Employer for
all purposes under this Plan.
1.14 Employment Commencement Date
The date an Employee first performs an Hour of Service for the Employer
is his Employment Commencement Date.
1.15 Entry Date
Effective January 1, 1996, Entry Date means the January 1st, April 1st,
July 1st or October 1st which coincides with or next follows the date
upon which the eligibility requirements are met.
Prior to January 1, 1996, Entry Date means the January 1st or July 1st
which coincides with or next follows the date upon which the eligibility
requirements are met.
1.16 Fiscal Year
Fiscal Year means the taxable year of the Plan Sponsor. The Fiscal Year
of the Plan Sponsor is the 12 month period beginning January 1 and
ending December 31.
1.17 Forfeiture
The term Forfeiture refers to that portion, if any, of a Participant's
Accrued Benefit which is in excess of his Vested Accrued Benefit
following the termination of the Participant's employment.
A Forfeiture is considered to occur as of the earlier of (a) the date of
the occurrence of the fifth of 5 consecutive One Year Breaks-in-Service
or (b) the date a Cash-Out Distribution occurs in accordance with the
Provisions of Article 5.
1.18 Highly Compensated Definitions
(a) Compensation
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the gross income of the
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Employee under Code Section 125, 401(k), 402(h) or 403(b).
Compensation in excess of the Statutory Compensation Limit will
be disregarded.
(b) Determination Year
Determination Year means the Plan Year for which the
determination of who is Highly Compensated is being made.
(c) Family Member
Family Member means an Employee who is the spouse, a lineal
ascendant or descendant, or the spouse of a lineal ascendant or
descendant of:
o a 5-percent owner (within the meaning of Code Section
416(i)) of the Employer or any Related Employer who is an
active or former Employee; or
o a Highly Compensated Employee who is one of the 10 most
highly compensated employees ranked on the basis of
Compensation paid by the Employer during the Determination
Year or the Lookback Year.
For purposes of this Section, the Family Member and the Highly
Compensated Employee will be considered one Employee. A Family
Member's Compensation and benefits will be aggregated with those
of the Highly Compensated Employee irrespective of whether the
Family Member would otherwise be treated as a Highly-Compensated
Employee or is in a category of Employees which may be excluded
in determining the number of Employees in the Top-Paid Group.
If an Employee is required to be aggregated as a member of more
than one family group, all eligible employees who are members of
those family groups which include that employee will be
aggregated as one family group.
For purposes of applying the compensation limit under Code
Section 401(a)(17), a Family Member is subject to the single
aggregate compensation limit imposed on the Highly Compensated
Employee if the Family Member is either the Employee's spouse or
is a lineal descendant who has not attained the age of 19 by the
end of the Plan Year.
(d) Highly Compensated Employee
Highly Compensated Employee means any individual who is a Highly
Compensated Active Employee or a Highly Compensated Former
Employee within the meaning of Code Section 414(q) and the
regulations thereunder.
(e) Highly Compensated Active Employee
Highly Compensated Active Employee means any individual who
during the Determination Year or the Lookback Year:
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(1) Was at any time a 5-percent Owner (within the meaning of
Code Section 416(i)) of the Employer or any Related
Employer;
(2) Received Compensation from the Employer and all Related
Employers in excess of $75,000 (or any greater amount
determined by regulations issued by the Secretary of the
Treasury under Code Section 415(d));
(3) Received Compensation from the Employer and all Related
Employers in excess of $50,000 (or any greater amount
determined by regulations issued by the Secretary of the
Treasury under Code Section 415(d) and was in the Top-Paid
Group of Employees; or
(4) Was an Officer of the Employer or any Related Employer (as
that term is defined in the regulations under Code Section
416(i)) and received Compensation greater than 50% of the
Defined Benefit Dollar Limit described in Section 7.03(f)
for the applicable year. For this purpose, if no Officer
received enough Compensation to be a Highly Compensated
Employee under the preceding sentence, the highest-paid
Officer will be treated as Highly Compensated Employee.
The maximum number of Officers who will be treated as
Highly Compensated Active Employees under this paragraph
is equal to 10% of all Employees determined without regard
to statutory or other exclusions, subject to a minimum of
3 Employees and a maximum of 50 Employees.
No individual described in subparagraphs (2), (3) or (4) above
will be treated as a Highly Compensated Active Employee for the
Determination Year unless he (i) was a Highly Compensated Active
Employee for the Lookback Year (or would have been except that he
was not among the 100 most highly compensated Employees of the
Employer and all Related Employers for the Lookback Year) or (ii)
was among the 100 most highly compensated Employees of the
Employer and all Related Employers for the Determination Year.
(f) Highly Compensated Former Employee
Highly Compensated Former Employee means any Former Employee who
had a Separation Year (within the meaning of Treasury Regulation
Section 1.414(q)-1T Q&A-5) and was a Highly Compensated Active
Employee for either the Separation Year or any Determination Year
ending on or after the Employee's 55th birthday.
(g) Highly Compensated Group
Highly Compensated Group means all Highly Compensated Employees.
(h) Lookback Year
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Lookback Year means the 12-month period immediately preceding the
Determination Year.
(i) Non-Highly Compensated Employee
Non-Highly Compensated Employee means an Employee who is neither
a Highly Compensated Employee nor a Family Member.
(j) Non-Highly Compensated Group
Top-Highly Compensated Group means all Non-Highly Compensated
Employees.
(k) Top-Paid Group
Top-Paid Group means those individuals who are among the top 20
percent of Employees of the Employer and all Related Employers
when ranked on the basis of Compensation received during the
year. In determining the number of individuals in the Top-Paid
Group (but not the identity of those individuals). The following
individuals may be excluded:
(1) Employees who have not completed 6 months of Service by
the end of the year. For this purpose, an Employee who
has completed One Hour of Service in any calendar month
will be credited with one month of Service;
(2) Employees who normally work fewer than 17 1/2 hours per
week;
(3) Employees who normally work fewer than 6 months during any
year. For this purpose, an Employee who has worked on one
day of a month is treated as having worked for the whole
month;
(4) Employees who have not reached age 21 by the end of the
year;
(5) Nonresident aliens who received no earned income (which
constitutes income from sources within the United States)
within the year from the Employer or any Related
Employers; and
(6) Employees covered by a collective bargaining agreement
negotiated in good faith between the employee
representatives and the Employer or a group of employers
of which the Employer is a member if (i) 90% or more of
all employees of the Employer and all Related Employers
are covered by collective bargaining agreements, and (ii)
this Plan covers only Employees who are not covered under
a collective bargaining agreement.
1.19 Hour of Service
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(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours will
be credited to the Employee for the computation period in which
the duties are performed;
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday. illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for any 12-month period. Hours
under this paragraph will be calculated and credited pursuant to
Section 2530.200b-2 of the Department of Labor Regulations which
are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under paragraphs
(a) or (b), as the case may be, and under this paragraph (c).
These hours will be credited to the Employee for the computation
period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or
payment is made.
Hours of Service for all Employees will be determined on the basis of
actual hours for which an Employee is paid or is entitled to payment.
Hours of Service will be credited for employment with any Related
Employer or any Predecessor Employer. Hours of Service will be credited
for any individual considered an employee under Code Section 414(n) or
414(o) and the regulations thereunder.
Solely for purposes of determining whether a One Year Break-in-Service
has occurred, a Participant who is absent from work on an authorized
Leave of Absence or by reason of the pregnancy, birth of the
Participant's child, placement of a child with the Participant in
connection with the adoption of such child, or for the purpose of caring
for such child for a period immediately following such birth or
placement, will receive credit for One Hours of Service which otherwise
would nave been credited to the Participant but for such absence. The
Hours of Service credited under this paragraph will be credited in the
Plan Year in which the absence begins if such crediting is necessary to
prevent a One Year Break-In Service in such Plan Year; otherwise, such
Hours of Service will be credited in the following Plan Year. The Hours
of Service credited under this paragraph are those which would normally
have been credited but for such absence; in any case in which the Plan
Administrator is unable to determine such hours normally credited, Hours
of Service per day will be credited. No more than 501 Hours of Service
will be credited under this paragraph for any 12-month period. The Date
of Severance is the is the second anniversary of the date on which the
absence begins. The period between the initial date of absence and the
first anniversary of the initial date of absence is deemed to be a
period of Service. The period between the first and second
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anniversaries of the initial date of absence is neither a period of
service nor a period of severance.
1.20 Reserved
1.21 Leave of Absence
An authorized Leave of Absence means a period of time of one year or
less granted to an Employee by the Employer due to illness, injury,
temporary reduction in work force, or other appropriate cause or due to
military service during which the Employee's reemployment rights are
protected by law, provided the Employee returns to the service of the
Employer on or before the expiration of such leave, or in the case of
military service, within the time his reemployment rights are so
protected or within 60 days of his discharge from military service if no
federal law is applicable. All authorized Leaves of Absence are granted
or denied by the Employer in a uniform and nondiscriminatory manner,
treating Employees in similar circumstances in a like manner.
If the Participant does not return to active service with the Employer
on or prior to the expiration of his authorized Leave of Absence he will
be considered to have had a Date of Severance as of the earlier of the
date on which his authorized Leave of Absence expired. the first
anniversary of the last date he worked at least one hour as an Active
Participant, or the date on which he resigned or was discharged.
1.22 Reserved
1.23 Normal Retirement Age
A Participant's Normal Retirement Age is his attained age on the date
which he satisfies the following requirements:
(a) Attainment of age 65, and
(b) Attainment of the fifth anniversary of the time the Participant
commenced participation in the Plan.
1.24 Normal Retirement Date
A Participant's Normal Retirement Date is the date on which the
Participant attains Normal Retirement Age.
1.25 One Year Break-in-Service
One Year Break-in-Service is defined in Section 1.42(a).
1.26 Participant
The Term Participant means an Employee or former Employee who is
eligible to participate in this Plan and who is or who may become
eligible to receive a benefit of any type from this Plan or whose
Beneficiary may be eligible to receive any such benefit.
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(a) Active Participant means a Participant who is currently an
Employee in an Eligible Employee Classification.
(b) Disabled Participant means a Participant who has terminated his
employment with the Employer due to his Disability and who is
receiving or is entitled to receive benefits from the Plan.
(c) Retired Participant means a participant who has terminated his
employment with the Employer after meeting the requirements for
his Normal Retirement Date and who is receiving or is entitled to
receive benefits from the Plan.
(d) Vested Terminated Participant means a Participant who has
terminated his employment with the Employer and who has a
nonforfeitable right to all or a portion of his or her Accrued
Benefit and who has not received a distribution of the value of
his or her Vested Accrued Benefit.
(e) Inactive Participant means a Participant who has (i) interrupted
his status as an Active Participant without becoming a Disabled,
Retired or Vested Terminated Participant and (ii) has a
non-forfeitable right to all or a portion of his Accrued Benefit
and has not received a complete distribution of his benefit.
(f) Former Participant means a Participant who has terminated his
employment with the Employer and who currently has no
nonforfeitable right to any portion of his or her Accrued
Benefit.
1.27 Payroll Withholding Agreement
If a written Payroll Withholding Agreement is required pursuant to the
provisions of Article 3, then each Participant who elects to participate
in the Plan will file such agreement on or before the first day of the
payroll period for which the agreement is applicable (or at some other
time as specified by the Plan Administrator). Such agreement will be
effective for each payroll period thereafter until modified or amended.
The terms of such agreement will provide that the Participant agrees to
have the Employer withhold, each payroll period, any whole percentage of
his Compensation (or such other amount as allowed by the Plan
Administrator under rules applied on a uniform and nondiscriminatory
basis), not to exceed the limitations of Article 7, In consideration of
such agreement, the Employer periodically will make a contribution to
the Participant's proper Account(s) in an amount equal to the total
amount by which the Participant's Compensation from the Employer was
reduced during applicable payroll periods pursuant to the Payroll
Withholding Agreement.
Notwithstanding the above, Payroll Withholding Agreements will be
governed by the following general guidelines:
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(a) A Payroll Withholding Agreement will apply to each payroll period
during which an effective agreement is on file with the Employer.
Upon termination of employment, such agreement will become void.
(b) The Plan Administrator will establish and apply guidelines
concerning the frequency and timing of amendments or changes to
Payroll Withholding Agreements. Notwithstanding the foregoing, a
Participant may revoke his Payroll Withholding Agreement at any
time and discontinue all future withholding.
(c) The Plan Administrator may amend or revoke its Payroll
Withholding Agreement with any Participant at any time, if the
Employer determines that such revocation or amendment is
necessary to insure that a Participant's Annual Additions for any
Plan Year will not exceed the limitations of Article 7 or to
insure that the requirements of Sections 401(k) and 401(m) of the
Code have been satisfied with respect to the amount which may be
withheld and contributed on behalf of the Highly Compensated
Group.
(d) Except as provided above, a Payroll Withholding Agreement may not
be revoked or amended by the Participant or the Employer.
1.28 Plan, Plan and Trust, Trust
The terms Plan, Plan and Trust and Trust mean Hollywood Theaters, Inc.
401(k) Savings Plan The Plan Identification Number is 001. The Plan is
a profit sharing plan.
The term Predecessor Plan means any qualified plan previously
established and maintained by the Employer and to which this Plan is the
successor.
1.29 Plan Administrator
The Plan Administrator is Hollywood Theaters, Inc.
1.30 Plan Year
The Plan Year is the 12 month period beginning January 1 and ending
December 31. The Limitation Year coincides with the Plan Year.
1.31 Reserved
1.32 Qualified Election
Qualified Election means the designation of a specific Beneficiary other
than the Participant's Surviving Spouse. Such Qualified Election must
be in writing and must be consented to by the Participant's spouse. The
spouse's written consent to a Qualified Election must be witnessed by a
representative of the Plan Administrator or a notary public. Such
consent will
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not be required if the Participant establishes to the satisfaction of
the Plan Administrator that such written consent may not be obtained
because there is no spouse, the spouse cannot be located or other
circumstances that may be prescribed by Treasury Regulations. Any
consent necessary under this provision will be valid only with respect
to the spouse who signs the consent (or in the event of a deemed
Qualified Election, the designated spouse). Additionally, a revocation
of a prior Qualified Election may be made by a Participant without the
consent of the spouse at any time before the commencement of benefits;
however, any Qualified Election which follows such revocation must be in
writing and must be consented to by the Participant's spouse. The
number of Qualified Elections or revocations of such Qualified Elections
will not be limited.
1.33 Related Employer
The terms Related Employer and Affiliated Employer are used
interchangeably and mean any other corporation, association, company or
entity on or after the Effective Date which is, along with the Employer,
a member of a controlled group of corporations (as defined in Code
Section 414(b)), a group of trades or businesses which are under common
control (as defined in Code Section 414(c)), an affiliated service group
(as defined in Code Section 414(m)), or any organization or arrangement
required to be aggregated with the Employer by Treasury Regulations
issued under Code Section 414(o).
1.34 Required Beginning Date
A Participant's Required Beginning Date for the commencement of benefit
payments from the Plan is the April 1 immediately following the calendar
year in which he attains age 70-1/2.
1.35 Surviving Spouse
Surviving Spouse means a deceased Participant's spouse who was married
to the Participant on the Participant's date of death. The Plan
Administrator and the Trustee may rely conclusively on a Participant's
written statement of his marital status. Neither the Plan Administrator
nor the Trustee is required at any time to inquire into the validity of
any marriage, the effectiveness of a common-law relationship or the
claim of any alleged spouse which is inconsistent with the Participant's
report of his marital status and the identity of his spouse.
1.36 Top-Heavy Definitions
(a) Aggregate Account
Aggregate Account means, with respect to each Participant, the
value of all accounts maintained on behalf of the Participant,
whether attributable to Employer or Employee contributions, used
to determine Top-Heavy Plan status under the provisions of a
defined contribution plan. A Participant's Aggregate Account as
of the Determination Date will be the sum of:
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o the balance of his Account(s) as of the most recent
valuation date occurring within a 12-month period ending
on the Determination Date (excluding any amounts
attributable to deductible voluntary employee
contributions); plus
o contributions that would be allocated as of a date not
later than the Determination Date, even though those
amounts are not yet made or required to be made; plus
o any Plan Distributions made within the Plan Year that
includes the Determination Date or within the four
preceding Plan Years.
(b) Aggregation Group
Aggregation Group means either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group
Each plan of the Employer in which a Key Employee is a
Participant, and each other plan of the Employer which
enables any plan in which a Key Employee participates to
meet the requirements of Code Section 401(a)(4) or 410,
will be aggregated and the resulting group will be known
as a Required Aggregation Group.
Each plan in the Required Aggregation 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 (to be known as a Permissive
Aggregation Group), taken as a whole, could continue to
satisfy the provisions of Code Sections 401(a)(4) and 410.
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.
Only those plans of the Employer in which the
Determination Dates fall within the same calendar year
will be aggregated in order to determine whether the plans
are Top-Heavy plans.
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(c) Determination Date
Determination Date means the last day of the preceding Plan Year,
or, in the case of the first Plan Year, the last day of the first
Plan Year.
(d) Key Employee
Key Employee means any Employee or Former Employee (and his
Beneficiary) who, at any time during the Plan Year or any of the
preceding four Plan Years, was:
(1) 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
5% of the value of the outstanding stock of the Employer
or stock possessing more than 5% of the total combined
voting power of all stock of the Employer. If the
Employer is not a corporation, Five Percent Owner means
any person who owns more than 5% of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, Related Employers will be treated as
separate Employers; or
(2) A "One Percent Owner" of the Employer having 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
1% of the value of the outstanding stock of the Employer
or stock possessing more than 1% of the total combined
voting power of all stock of the Employer. If the
Employer is not a corporation, One Percent Owner means any
person who owns more than 1% of the capital or profits
interest in the Employer. In determining percentage
ownership hereunder, Related Employers will be treated as
separate Employers. However, in determining whether an
individual has Compensation of more than $150,000,
Compensation from each Related Employer will be taken into
account.
(3) One of the 10 Employees having Compensation not less than
the Defined Contribution Dollar Limit (as defined in
Section 7.03(j) for the Plan Year) who owns (or is
considered as owning within the meaning of Code Section
318) both greater than 1/2% interest and the largest
interests in all Employers required to be aggregated under
Code Sections 414(b), (c), (m) and (o);
(4) An officer (within the meaning of the regulations under
Code Section 416) of the Employer having Compensation
greater than 50% of the Defined Benefit Dollar Limit as
defined in Section 7.03(f) for the Plan Year;
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus any amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the gross income of the
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Employee under Code Section 125, 401(k), 402(h) or 403(b).
Compensation in excess of the Statutory Compensation Limit is
disregarded.
(e) Non-Key Employee
Non-Key Employee means any Employee (and his Beneficiaries) who
is not a Key Employee.
(f) Plan Distributions
Plan distributions include distributions made before January 1,
1984, and distributions under a terminated plan which, if it had
not been terminated, would have been required to be included in
an aggregation group. However, distributions made after the
valuation date and before the Determination Date are not included
to the extent that they are already included in the Participant's
Single Sum Benefit as of the valuation date.
With respect to "unrelated" rollovers and plan-to-plan transfers
(those which are both initiated by an employee and made from a
plan maintained by one employer to a plan maintained by another
employer), if such a rollover or plan-to-plan transfer is made
from this Plan, it will be considered as a distribution for
purposes of this Section. If such a rollover or plan-to-plan
transfer is made to this Plan, it will not be considered as part
of the Participant's Single Sum Benefit. However, an unrelated
rollover or plan-to-plan transfer accepted before January 1,
1984, will be considered as part of the Participant's Single Sum
Benefit.
With respect to "related" rollovers and plan-to-plan transfers
(those which are either not initiated by an employee or are made
from one plan to another plan maintained by the same employer),
if such a rollover or plan-to-plan transfer is made from this
Plan, it will not be considered as a distribution for purposes of
this Section. If such a rollover or plan-to-plan transfer is
made to this Plan, it will be considered as part of the
Participant's Single Sum Benefit.
(g) Present Value of Accrued Benefit
In the case of the defined benefit plan, a Participant's Present
Value of Accrued Benefit, for Top-Heavy determination purposes,
will be determined using the following rules:
(1) The Present Value of Accrued Benefit will be determined as
of the most recent valuation date within a 12-month period
ending on the Determination Date.
(2) For the first Plan Year, the Present Value of Accrued
Benefit will be determined as if (A) the Participant
terminated service as of the Determination Date; or (B)
the Participant terminated service as of the
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valuation date, but taking into account the estimated
Present Value of Accrued Benefits as of the Determination
Date.
(3) For any other Plan Year, the Present Value of Accrued
Benefit will be determined as if the Participant
terminated service as of the valuation date.
(4) The valuation date must be the same date used for
computing the defined benefit plan minimum funding costs,
regardless of whether a calculation is performed that plan
year.
(5) A Participant's Present Value of Accrued Benefit as of a
Determination Date will be the sum of:
o the present value of his Accrued Benefit determined
using the actuarial assumptions which are specified
below; plus
o any Plan Distributions made within the Plan Year
that includes the Determination Date or within the
four preceding Plan Years; plus
o any employee contributions, whether voluntary or
mandatory. However, amounts attributable to
qualified voluntary employee contributions, as
defined in Code Section 219(e)(2) will not be
considered to be a part of the Participant's
Present Value of Accrued Benefit.
For purposes of this Section, the present value of a
Participant's Accrued Benefit will be equal to the greater of the
present value determined using the actuarial assumptions which
are specified for Actuarial Equivalent purposes or the present
value determined using the "Applicable Interest Rate." The
Applicable Interest Rate is the rate or rates that would be used
by the Pension Benefit Guaranty Corporation for a trusteed
single-employer plan to value a Participant's or Beneficiary's
benefit on the date of distribution (the "PBGC Rate"). If the
present value using the PBGC Rate exceeds $25,000, the Applicable
Interest Rate is 120% of the PBGC Rate. However, the use of 120%
of the PBGC Rate will never result in a present value less than
$25,000.
(6) Solely for the purpose of determining this Plan (or any other
plan included in a Required Aggregation Group of which this Plan
is a part) is Top-Heavy, the Accrued Benefit of any Employee
other than a Key Employee will be determined under
(A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Employer or any
Related Employer, or
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(B) if there is no such method, as if the benefit accrued no
more rapidly than the slowest accrual rate permitted under
the fractional accrual rate of Code Section 411(b)(1)(C).
(h) Single Sum Benefit
The Single Sum Benefit for any Participant in a defined benefit
pension plan will be equal to his Present Value of Accrued
Benefit. The Single Sum Benefit for any Participant in a defined
contribution plan will be equal to his Aggregate Account.
(i) Top-Heavy Group
Top-Heavy Group means an Aggregation Group in which, as of the
Determination Date, the Single Sum Benefits of all Key Employees
under all plans included in the group exceeds 60% of a similar
sum determined for all Participants.
Super Top-Heavy Group means an Aggregation Group in which, as of
the Determination Date, the sum of (1) the Single Sum Benefits of
all Key Employees under all defined benefit plans included in the
group, plus (2) the Single Sum Benefit of all Key Employees under
all defined contribution plans included in the group exceeds 90%
of a similar sum determined for all Participants.
(j) Top-Heavy Plan
This Plan will be a Top-Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date,
the Single Sum Benefits of all Key Employees exceed 60% of the
Single Sum Benefits of all Participants under this Plan.
This Plan will be a Super Top-Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the
Determination Date, the Single Sum Benefits of all Key Employees
exceed 90% of the Single Sum Benefits of all Participants under
this Plan.
If any Participant is a Non-Key Employee for a given Plan Year,
but was a Key Employee for any prior Plan Year, the Participant's
Single Sum Benefit will not be taken into account for purposes of
determining whether this Plan is a Top-Heavy or Super Top-Heavy
Plan (or whether any Aggregation Group which includes this Plan
is a Top-Heavy or Super Top-Heavy Group).
If an individual has performed no services for the Employer at
any time during the 5-year period ending an the Determination
Date, any Single Sum Benefit of such individual will not be taken
into account for purposes of determining whether this Plan is a
Top-Heavy or Super Top-Heavy Plan (or whether any Aggregation
Group which includes this Plan is a Top-Heavy Group or Super
Top-Heavy Group).
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1.37 Trust Fund, Trust
These terms mean the total cash, securities, real property, insurance
contracts and any other property held by the Trustee.
1.38 Trustee
The Trustee is Texas Commerce Bank, NA. Effective January 1, 1996, the
Trustee is Charles Schwab Trust Company or any successor Trustee.
1.39 Vested Percentage
A Participant's Vested Percentage as of a given date will be that
percentage determined in accordance with the Vesting Schedule.
Notwithstanding the preceding, a Participant will be 100% vested upon
reaching the earlier of (a) his normal Retirement Age or (b) the later
of the date upon which the Participant attains age 65 or reaches the 5th
anniversary of the date he commenced participation in the Plan.
1.40 Vesting Schedule
A Participant's Vested Percentage will be determined in accordance with
the following table:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 3 Years 0%
3 Years 20%
4 Years 40%
5 Years 60%
6 Years 80%
7 Years or more 100%
Notwithstanding the foregoing, in any Plan Year in which the Plan is
determined to be a Top-Heavy Plan, the following Vesting Schedule will
apply in lieu of the Vesting Schedule provided for above:
Years of Vesting Service Vested Percentage
------------------------ -----------------
Less than 2 Years 0%
2 Years 20%
3 Years 40%
4 Years 60%
5 Years 80%
6 Years or more 100%
If in any subsequent Plan Year the Plan ceases to be a Top-Heavy Plan,
the above Vesting Schedule will continue to apply unless the Employer
elects, by Written Resolution, to resume
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the Vesting Schedule specified at the beginning of this Section. Any
such resolution will be treated as a Plan Amendment and be subject to
the restrictions contained in Section 10.06.
1.41 Written Resolution
The terms Written Resolution and Written Consent are used
interchangeably and reflect decisions, authorizations, etc. by the
Employer. A Written Resolution will be evidenced by a resolution of the
Board of Directors of the Employer.
1.42 Year of Service
(a) Crediting Years of Service
______________Years of Service are determined using the Elapsed Time Method
and/or the Hours of Service Method as specified in this Section.
(1) Elapsed Time Method
Under the Elapsed Time Method, Years of Service are based
upon an Employee's Elapsed Time of employment irrespective
of the number of hours actually worked during such period;
a Year of Service (including a fraction thereof) will be
credited for each completed 365 days of Elapsed Time which
need not be consecutive. The following terms are used in
determining Years of Service under the Elapsed Time
Method:
(A) Date of Severance (Termination) - means the
earlier of (i) the actual date an Employee resigns,
is discharged, dies or retires, or (ii) the first
anniversary of the date an Employee is absent from
work (with or without pay) for any other reason,
e.g., disability, vacation, leave of absence,
layoff, etc.
(B) Elapsed Time - means the total period of service
which has elapsed between a Participant's
Employment Commencement Date and Date of
Termination including Periods of Severance where a
One Year Break-in-Service does not occur.
(C) Employment Commencement Date - means the date an
Employee first performs one Hour of Service for the
Employer.
(D) One Year Break-in-Service - means any 365-day
period following an Employee's Date of Termination
as defined above in which the Employee does not
complete at least one Hour of Service.
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(E) Period of Severance - is the time between the
actual Date of Severance as defined above and the
subsequent date, if any, on which the Employee
performs an Hour of Service.
All periods of employment will be aggregated including
Periods of Severance unless there is a One Year
Break-in-Service.
(2) Hours of Service Method
Under the Hours of Service Method, a Year of Service is
credited for each 12 consecutive month Computation Period
during which an Employee is credited with a specified
number of Hours of Service.
Under the Hours of Service Method, a One Year
Break-in-Service means any Computation Period during which
an Employee completes 500 or fewer Hours of Service.
Years of Eligibility Service for purposes of determining
eligibility to participate in the Plan and Years of Vesting
Service for purposes, of determining a Participant's Vested
Percentage include service with any organization which is a
Related Employer with respect to the Employer.
(b) For Eligibility Purposes
Years of Service for purposes of eligibility to participate in
the Plan are referred to as Years of Eligibility Service and are
determined using the Hours of Service Method.
A Year of Eligibility Service is credited for each Computation
Period during which an Employee is credited with at least 1,000
Hours of Service. The initial Computation Period is the 12
consecutive month period beginning with the Employee's Employment
Commencement Date. Thereafter, the Computation Period is the
Plan Year beginning with the Plan Year in which the initial
Computation Period ends.
All of in Employee's years of Eligibility Service are taken into
account in determining his eligibility to participate.
(c) For Vesting Purposes
Years of Service for purposes of computing a Participant's Vested
Percentage are referred to as Years of Vesting Service and are
determined using the Elapsed Time Method.
All of a Participant's Years of Vesting Service are taken into
account in determining his Vested Percentage.
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ARTICLE 2
PARTICIPATION
2.01 Participation
An Employee will become eligible to participate in the Plan on the Entry
Date which coincides with or next follows the attainment of age 21 and
the completion of one Year of Eligibility Service.
An Employee who is eligible to participate as of the Effective Date or
as of a given Entry Date will automatically become a Participant as of
such date. An Employee who is otherwise eligible to participate may
irrevocably elect not to participate in the Plan. Any election under
this paragraph must be in writing and according to guidelines
established by the Plan Administrator.
2.02 Participation After Reemployment
An Employee who has satisfied all of the eligibility requirements but
terminates employment prior to his Entry Date will Participate in the
Plan immediately upon returning to the employ of the Employer.
A Participant or Former Participant who has terminated employment will
participate as an Active Participant in the Plan immediately upon
returning to the employ of the Employer.
2.03 Change in Employment Classification
In the event a Participant becomes ineligible to participate because he
is no longer a member of an Eligible Employee Classification, the
Participant will participate immediately upon his return to an Eligible
Employee Classification.
In the event an Employee who is not a member of an Eligible Employee
Classification becomes a member of such a classification, such Employee
will begin to participate immediately if he has satisfied the
eligibility requirements which are specified in Section 2.01.
ARTICLE 3
PARTICIPANT ACCOUNTS
3.01 Salary Deferral Account
Salary Deferral Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto
and distributions. A Participant's Salary Deferral Account is 100%
vested at all times.
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(a) Salary Deferral Contributions
(1) Amount of Contribution
Each Participant may elect to make a Salary Deferral
Contribution each Contribution Period not to exceed 15% of
the Participant's Compensation. Such contribution will be
designated as a percentage of Compensation and will be
equal to an even multiple of 1% or such other amount as
allowed by the Plan Administrator.
(2) Payroll Withholding
All Salary Deferral Contributions will be made pursuant to
a Payroll Withholding Agreement in accordance with Section
11.27.
(3) Nondiscrimination Requirements
All Salary Deferral Contributions are Elective
Contributions within the meaning of Section 4.05(a) and
must satisfy the Nondiscrimination Requirements of Section
4.05.
(4) Excess Deferrals
The maximum amount of Salary Deferral Contribution which
can be made under the Plan on behalf of any Participant
during any calendar year will be limited to that amount
which would not constitute an Excess Deferral as defined
in Section 4.05. The Plan Administrator will distribute
any Excess Deferral, together with the income allocable to
it, to the Participant no later than April 15 of the
calendar year immediately following the year of the Excess
Deferral. If a Participant notifies the Plan
Administrator before March 1 of any calendar year that
Excess Deferrals have been made on his account for the
previous calendar year by reason of participation in a
Cash or Deferred Arrangement maintained by another
employer or employers, and if the Participant requests
that the Plan Administrator distribute a specific amount
to him on account of Excess Deferrals and certifies that
the requested amount is an Excess Deferral, the Plan
Administrator will designate the amount requested together
with the income allocable to it as a distribution of
Excess deferrals and distribute such amount no later than
April 15 of that calendar year. The amount of Excess
Deferrals to be distributed will be reduced by any Excess
Contributions previously distributed or recharacterized
with respect to the Plan Year Beginning with or within the
calendar year. The amount of income allocable to the
Excess Deferrals will be determined as described in
Section 4.05.
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(5) Timing of Deposits
The Employer will deposit all Salary Deferral
Contributions no later than 90 days after the date on
which the amounts withheld would otherwise have been paid
to the Participant in cash.
The Contribution Period for Salary Deferral Contributions
is each month.
(b) Financial Hardship Withdrawals
A Participant may file with the Plan Administrator a written
request to withdraw, in order to avoid or alleviate a Financial
Hardship, any amount not to exceed that portion of his Salary
Deferral Account which represents his total Salary Deferral
Contributions.
The Plan Administrator will allow Financial Hardship withdrawals
only if they are necessary to satisfy a Participant's immediate
and heavy financial need.
(1) Immediate and Heavy Financial Need
A withdrawal will be deemed to be made due to an immediate
and heavy financial need of the Participant if it is made
because of:
o Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, his
spouse or any of his dependents (as defined in Code
Section 152) or necessary for those persons to
obtain medical care described in Code Section
213(d);
o Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
o Payment of tuition or educational fees for the next
12 months of post-secondary education for the
Participant, his spouse, children or dependents (as
Defined in Code Section 152);
o Prevention of the eviction of the Participant from
his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(2) Necessary To Satisfy Financial Need
No withdrawal may exceed the amount necessary to satisfy
the Participant's immediate and heavy financial need.
However, the amount of an immediate and heavy financial
need may include any amounts necessary to pay any federal,
state or local income taxes or penalties reasonably
anticipated to result from the distribution. The Plan
Administrator will allow the withdrawal if it determines,
after a full review of the Participant's written
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request and evidence presented by the Participant showing
immediate and heavy financial need as well as the
Participant's lack of other reasonably available
resources, that the withdrawal is necessary to satisfy the
need. No withdrawal will be treated as necessary to the
extent it can be satisfied from other resources which are
reasonably available to the Participant, including those
of the Participant's spouse and minor children. A
withdrawal will be treated as necessary to the extent the
Participant demonstrates to the satisfaction of the Plan
Administrator that the need cannot be relieved by any of
the following:
o Reimbursement or compensation by insurance or
otherwise;
o Reasonable liquidation of assets to the extent the
liquidation would not itself cause an immediate and
heavy financial need;
o Cessation of Salary Deferral Contributions or
Employee Contributions (as defined in Section
4.05(a)) or both under any plan maintained by any
employer;
o Other distributions or nontaxable (at the time of
the loan) loans from plans maintained by any
employer;
o Borrowing from commercial sources on reasonable
commercial terms.
Unless the Plan administrator has evidence to the
contrary, it may rely upon the Participant's written
representation that the need cannot be relieved by any of
the foregoing.
(3) Safe Harbor
The Plan Administrator will not allow any withdrawal until
the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available to the Participant under all plans maintained by
the Employer. Upon the withdrawal of any portion of a
Participant's Salary Deferral Account, the Participant
will become ineligible for any Elective Contribution to
this Plan or any other plan maintained by the Employer, or
to make any contribution to this Plan or any other plan
maintained by the Employer until the first day of the
first payroll period which begins not less than 12 months
following the date of withdrawal. For this purpose the
phrase "any other Plan maintained by the Employer" means
all qualified and nonqualified Plans of deferred
compensation maintained by the Employer. The phrase
includes stock option, stock purchase, or similar plans,
or a cash or deferred arrangement that is part of a
cafeteria plan within
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the meaning of Code Section 125. It does not include the
mandatory employee contribution portion of a defined
benefit plan, nor does it include a health or welfare
benefit plan (including one that is part of a cafeteria
plan within the meaning of Code Section 125).
Furthermore, the maximum amount of salary Deferral
Contributions which can be made under the Plan on behalf
of any Participant during the calendar year which follows
the calendar year in which the withdrawal was made will be
limited to the amount which would not be treated as an
Excess Deferral for that year reduced by the amount of
Salary Deferral Contributions made on behalf of the
Participant in the calendar year of withdrawal.
(c) Distributions
No distribution may be made from the Participant's Salary
Deferral Account or any account comprised of Matching
Contributions or Nonelective Contributions which are treated as
Elective Contributions in accordance with the provisions of
Section 4.05(h) except under one of the following circumstances:
o the Participant's retirement, death, disability or
termination of employment;
o the Participant's attaining of age 59 1/2;
o the avoidance or alleviation of a Financial Hardship;
o the termination of this Plan without the establishment of
a successor plan within the meaning of Treasury Regulation
Section 1.401(k)-l(d)(3);
o the sale or other disposition by the Employer of at least
85 percent of the assets used by the Employer in a trade
or business to an unrelated corporation which does not
maintain the plan, but only if the Participant continues
employment with the corporation acquiring the assets and
only if the Employer continues to maintain this Plan; or
o the sale or other Disposition by the Employer of its
interest in a subsidiary to an unrelated entity which does
not maintain the plan, but only if the Participant
continues employment with the subsidiary and only if the
Employer continues to maintain this Plan.
This paragraph does not apply to distributions of Excess
Deferrals, Excess Contributions, or excess Annual Additions.
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3.02 Employer Matching Account
Employer Matching Account means the Account of a Participant reflecting
applicable contributions, forfeitures, investment income or loss
allocated thereto and distributions. A Participant's Employer Matching
Account is subject to the Vesting Schedule.
(a) Employer Matching Contributions
Each Plan Year, the Employer may, within the time prescribed by
law for making a deductible contribution, make an Employer
Matching Contribution to the Trust.
For a given Plan Year, the total Employer Matching Contribution,
if any, made by the Employer to Eligible Participants will be an
amount determined and authorized by the Employer for such Plan
Year; however, the Employer will not authorize Employer Matching
Contributions at such times or in such amounts that the Plan, in
operation, discriminates in favor of Highly Compensated
Employees.
The target Employer Matching Contribution to be made to an
Eligible Participant's Employer Matching Account is equal to 50%
of that portion of the Participant's Salary Deferral Contribution
which is not in excess of 4% of the Participant's Compensation.
If the sum of the target Employer Matching Contributions to be
made for all Participants is less than or greater than the total
Employer Matching Contribution made by the Employer in accordance
with the provisions of this Section, then the actual Employer
Matching Contribution allocated to each Eligible Participant's
Employer Matching Account will be adjusted proratably so that the
sum of the actual Employer Matching Contributions made for all
Participants is equal to the total Employer Matching Contribution
made by the Employer.
All Employer Matching Contributions are Matching Contributions
within the meaning of Section 4.05(a) and must satisfy the
Nondiscrimination Requirements of Section 4.05.
(b) Contribution Period
The Contribution Period for Employer Matching Contributions is
each calendar year.
(c) Application of Forfeitures
Forfeitures from a Participant's Employer Matching Account will
be used to reduce Employer Matching Contributions in the Plan
Year in which the Forfeitures are determined to occur.
(d) Withdrawals
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A Participant may not withdraw any portion of his Employer
Matching Account prior to the time when benefits otherwise become
payable in accordance with the provisions of Article 5.
3.03 Profit Sharing Account
Profit Sharing Account means the Account of a Participant reflecting
applicable contributions, forfeitures, investment income or loss
allocated thereto and distributions. A Participant's Profit Sharing
Account is subject to the Vesting Schedule.
(a) Each Plan Year, the Employer may, within the time prescribed by
law for making a deductible contribution, make a Profit Sharing
Contribution to the Trust.
For a given Plan Year, the total Profit Sharing Contribution, if
any, made by the Employer will be an amount determined and
authorized by the Employer for such Plan Year; however, the
Employer will not authorize Profit Sharing Contributions at such
times or in Such amounts that the Plan, in operation,
discriminates in favor of Highly Compensated Employees.
The total Profit Sharing Contribution made by the Employer to
Eligible Participants will first be allocated by the ratio which
each Eligible Participant's Compensation plus Excess Compensation
bears to the total Compensation plus Excess Compensation of all
Eligible Participants. The allocation for each Participant will
not exceed the product of (i) the Participant's Compensation plus
Excess Compensation multiplied by (ii) the rate of tax applicable
under Code Section 3111(a) attributable to old-age insurance as
in effect on the first day of the Plan Year (but not less than
5.7%).
Any remaining Profit Sharing Contributions will be allocated by
the ratio which each Eligible Participant's Compensation bears to
the total Compensation of all Eligible Participants.
With respect to Profit Sharing Contributions, if an Employee
enters the Plan on an Entry Date other than the first day of a
Plan Year, the Employee's Compensation which would otherwise be
considered will be limited to the Compensation actually paid to
the Employee while he is a Participant in the Plan and his
Integration Level will be equal to the annual Integration Level
multiplied by a fraction which is equal to the portion of the
Accounting Period during which the Employee was a participant in
the Plan.
(b) Contribution Period
The Contribution Period for Profit Sharing Contributions is each
calendar year.
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(c) Application of Forfeitures
Forfeitures from a Participant's Profit Sharing Account will be
added to and allocated along with Profit Sharing Contributions in
the Plan Year in which the Forfeitures are determined to occur.
(d) Minimum Allocation for Top-Heavy Plan
Notwithstanding anything contained herein to the contrary, for
any Plan Year in which this Plan is determined to be Top-Heavy, a
Participant (including any Employee who is excluded from the Plan
because his Compensation is less than a stated amount) will be
entitled to a minimum allocation of Profit Sharing Contributions
equal to 3% of the Participant's Aggregate Compensation received
during the Plan Year. This minimum allocation will be provided
to each Participant who is employed by the Employer on the last
day of the Plan Year whether or not he or she is an otherwise
Eligible Participant or fails to make any mandatory Employee
contribution to the Plan.
The percentage referred to in the preceding paragraph will not
exceed the percentage of Aggregate Compensation at which Profit
Sharing Contributions are made or allocated to the Key Employee
for whom such percentage is the largest; provided, however, this
sentence will not apply if the Plan is required to be included in
an Aggregation Group to meet the requirements of Code Sections
401(a)(4) or 410.
(e) Withdrawals
A Participant may not withdraw any portion of his Profit Sharing
Account prior to the time when benefits otherwise become payable
in accordance with the provisions of Article 5.
3.04 Rollover Account
Rollover Account means the Account of a Participant reflecting
applicable contributions, investment income or loss allocated thereto
and distributions. A Participant's Rollover Account is 100% vested at
all times.
(a) Rollover Contributions
Rollover Contribution means a contribution to the Plan by a
Participant where such contribution is the result of a prior
distribution from an Individual Retirement Account, an Individual
Retirement Annuity or another qualified plan. Such prior
contribution must be a rollover amount described in Section
402(c)(4) of the Code or a Contribution described in Section
408(d)(3) of the Code.
Each Employee who is a member of an Eligible Employee
Classification, regardless of whether he is a Participant in the
Plan, will have the right to make a Rollover Contribution of Cash
(or other property of a form acceptable to the Plan
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Administrator and the Trustee) into the Plan from another
qualified plan. If the Employee is not a Participant hereunder,
his Rollover Account will constitute his entire interest in the
Plan, in no event will the existence of a Rollover Account
entitle the Employee to participate in any other benefit provided
by the Plan.
If specifically provided for in a Written Resolution, Rollover
Contribution will also mean the amount of assets transferred,
pursuant to Section 10.05, to this Plan from another plan which
is qualified under Code Sections 401(a) and 501(a).
(b) Withdrawals
A Participant may withdraw all or any portion of his Rollover
Account at any time. However, if a Participant makes such a
withdrawal, he may not make another withdrawal from his Rollover
Account until three months have elapsed.
ARTICLE 4
ACCOUNTING AND VALUATION
4.01 General Powers of the Plan Administrator
The Plan Administrator will have the power to establish rules and
guidelines, which will be applied on a uniform and non-discriminatory
basis, as it deems necessary, desirable or appropriate with regard to
accounting procedures and to the timing and method of contributions to
and/or withdrawals from the Plan.
4.02 Valuation Procedure
As of each Valuation Date, the Plan Administrator will determine from
the Trustee the fair market value of Trust assets and will, subject to
the provisions of this Article, determine the allocation of such value
among the Accounts of the Participants; in doing so, the Plan
Administrator will in the following order:
(a) Credit or charge, as appropriate, to the proper Accounts all
contributions, payments, transfers, forfeitures, withdrawals or
other distributions made to or from such Accounts since the last
preceding Valuation Date and that have not been previously
credited or charged.
(b) Credit or charge, as applicable, each Account with its pro rata
portion of the appreciation or depreciation in the fair market
value of the Trust Fund since the prior Valuation Date. Such
appreciation or depreciation will reflect investment income,
realized and unrealized gains and losses, other investment
transactions and expenses paid from the Trust Fund.
4.03 Reserved
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4.04 Participant Direction of Investment
(a) Application of this Section
Subject to the provisions of this Section, each Participant will
have the right to direct the investment of all of his Accounts
among the Specific Investment Funds which are made available by
the Plan Administrator.
(b) General Powers of the Trustee
The Trustee will have the power to establish rules and guidelines
as it deems necessary, desirable or appropriate with regard to
the directed investment of contributions in accordance with this
Section. Such rules and guidelines are intended to comply with
Section 404(c) of ERISA and the regulations thereunder. Included
in such powers, but not by way of limitation, are the following
powers and rights.
(1) To temporarily invest those contributions which are
pending directed investment in a Specific Investment Fund,
in the General Investment Fund or in some other manner as
determined by the Trustee.
(2) To establish rules with regard to the transfer of all or
any part of the balance of an Account or Accounts of a
given Participant from one Investment Fund to another.
(3) To maintain any part of the assets of any Investment Fund
in cash, or in demand or short-term time deposits bearing
a reasonable rate of interest, or in a short-term
investment fund that provides for the collective
investment of cash balances or in other cash equivalents
having ready marketability, including, but not limited to,
U.S. Treasury Bills, commercial paper, certificates of
deposit, and similar types of short-term securities, as
may be deemed necessary by the Trustee in its sole
discretion.
The Trustee will not be liable for any loss that results from a
Participant's exercise of control over the investment of the
Participant's Accounts. If the Participant fails to provide
adequate directions, the Plan Administrator will direct the
investment of the Participant's Account. The Trustee will have
no duty to review or make recommendations regarding a
Participant's Investment directions.
(c) Accounting
The Plan Administrator will maintain a set of accounts for each
Investment Fund. The accounts of the Plan Administrator for each
Investment Fund will indicate separately the dollar amounts of
all contributions made to such Investment Fund by or on behalf of
each Participant from time to time. The Plan Administrator will
compute the net income from investments; net profits or losses
arising from the sale, exchange, redemption or other disposition
of assets, and the prorata share attributable
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to each Investment Fund of the expenses of the administration of
the Plan and Trust and will debit or credit, as the case may be,
such income profits or losses, and expenses to the unsegregated
balance in each Investment Fund from time to time. To the extent
that the expenses of the administration of the Plan and Trust are
not directly attributable to a given Investment Fund, such
expenses, as of a given Valuation Date, will be prorated among
each Investment Fund; such allocation of expenses will, in
general, be performed in accordance with the guidelines which are
specified in this Article.
(d) Future Contributions
Each Participant who chooses to participate in the Plan will
elect the percentage of those contributions which are subject to
Participant direction of investment which is to be deposited to
each available Investment Fund. Such election will be in effect
until modified. If any Participant fails to make an election by
the appropriate date, he will be deemed to have elected an
Investment Fund(s) as determined by the Plan Administrator.
Elections will be limited to multiples of one percent (or such
other reasonable increments as determined by the Plan
Administrator).
(e) Change in Investment of Past Contributions
A Participant may file an election with the Plan Administrator to
shift the aggregate amount or reasonable increments (as
determined by the Plan Administrator) of the balance of his
existing Account or Accounts which are subject to Participant
direction of investment among the various Investment Funds as of
the first day of each Accounting Period (or such other time or
times as determined by the Plan Administrator). Elections will
be limited to multiples of one percent (or such other reasonable
increments as Determined by the Plan Administrator).
(f) Changes in Investment Elections
Elections with respect to future Contributions and/or with
respect to changes in the investment of past contributions will
be in writing on a form provided by the Plan Administrator,
except that each Participant may authorize the Plan Administrator
in writing on an authorization form provided by the Plan
Administrator to accept such Directions as may be made by the
Participant by use of a telephone voice response system
maintained for such purpose.
The Plan Administrator may establish additional rates and
procedures with respect to investment election changes including,
for example, the number of allowed changes per specified period,
the amount of reasonable fee, if any, which will be charged to
the Participant for making a Change, specified dates or cutoff
dates for taking a change, etc.
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(g) Addition and Deletion of Specific Investment Funds
Specific Investment Funds may be made available from time to time
by the Trustee. Specific Investment Funds, as are from time to
time made available the Trustee, may be deleted or added from
time to time by the Plan Administrator. The Plan Administrator
will establish guidelines for the proper administration of
affected Accounts when a Specific Investment Fund is added or
deleted.
4.05 Nondiscrimination Requirements
(a) Definitions Applicable to the Nondiscrimination Requirements
The following definitions apply to this Section:
(1) Aggregate Limit
With respect to a given Plan Year, Aggregate Limit means
the greater of the sum of [(A) + (B)] or the sum of [(C) +
(D)] where:
(A) is equal to 125% of the greater of DP or CP;
(B) is equal to 2 percentage points plus the lesser of
DP or CP, not to exceed 2 times the lesser of DP or
CP;
(C) is equal to 125% of the lesser of DP or CP;
(D) is equal to 2 percentage points plus the greater of
DP or CP, not to exceed 2 times the greater of DP
or CP;
DP represents the Deferral Percentage for the
Non-highly Compensated Group eligible under the
Cash or Deferred Arrangement for the Plan Year; and
CP represents the Contribution Percentage for the
Non-highly Compensated Group eligible under the
plan providing for the Employee Contributions or
Employer Matching Contributions for the Plan Year
beginning with or within the Plan Year of the Cash
or Deferred Arrangement.
(2) Cash or Deferred Arrangement (CODA)
A Cash or Deferred Election is any election (or
modification of an earlier election) by in Employee to
have the Employer either:
o provide an amount to the Employee in the form of
cash or some other taxable benefit that is not
currently available, or
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o contribute an amount to the Plan (or provide an
accrual or other benefit) thereby deferring receipt
of Compensation.
A Cash or Deferred Election will only be made with respect
to an amount that is not currently available to the
Employee on the date of election. Further, a Cash or
Deferred Election will only be made with respect to
amounts that would have (but for the Cash or Deferred
Election) become currently available after the later of
the date on which the Employer adopts the Cash or Deferred
Arrangement or the date on which the arrangement first
becomes effective.
A Cash or Deferred Election does not include a one-time
irrevocable election upon the Employee's commencement of
employment or first becoming an Eligible Employee.
(3) Compensation
For purposes of this Section, Compensation means Aggregate
Compensation as defined in Section 7.03(a) plus amounts
contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the gross
income of the Employee under Code Section 125, 401(k),
402(h) or 403(b). Compensation in excess of the Statutory
Compensation Limit is disregarded.
The period used to determine an Employee's Compensation
for a Plan Year may be limited to that portion of the Plan
Year in which the Employee was an Eligible Employee,
provided that this method is applied uniformly to all
Eligible employees under the Plan for the Plan Year.
(4) Contribution Percentage
Contribution Percentage means, for any specified group,
the average of the ratios calculated (to the nearest
one-hundredth of one percent) separately for each
Participant in the group, of the amount of Employee
Contributions and Matching Contributions which are made by
or on behalf of each Participant for a Plan Year to each
Participant's Compensation for the Plan Year.
For purposes of determining the Contribution Percentage,
each Employee who is eligible under the terms of the Plan
to make or to have contributions made on his behalf is
treated as a Participant. The Contribution Percentage of
an eligible Employee who makes no Employee Contribution
and receives no Matching Contribution is zero.
For purposes of determining the Contribution Percentage of
a Participant who is a Highly Compensated Employee, the
Compensation of and all Employee Contributions and
Matching Contributions for the Participant include, in
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accordance with the provisions of Section 4.05(d), the
Compensation of and all Employee Contributions and
Matching Contributions for any Family Member of the
Participant.
The Contribution Percentage of a Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to make Employee Contributions or receive an
allocation of Matching Contributions (including Elective
Contributions and Nonelective Contributions which are
treated as Employee or Matching Contributions for purposes
of the Contribution Percentage Test) allocated to his
accounts under two or more plans which are sponsored by
the Employer will be determined as if the Employee and
Matching Contributions were made under a single plan. For
purposes of this paragraph, if a Highly Compensated
Employee participates in two or more such plans which have
different Plan Years, all plans ending with or within the
same calendar year will be treated as a single plan.
(5) Contribution Percentage Test
The Contribution Percentage Test is a test applied on a
Plan Year basis to determine whether a plan meets the
requirements of Code Section 401(m). The Contribution
Percentage Test may be met by either satisfying the
General Contribution Percentage Test or the Alternative
Contribution Percentage Test.
The General Contribution Percentage Test is satisfied if
the Contribution Percentage for the Highly Compensated
Group does not exceed 125% of the Contribution Percentage
for the Non-highly Compensated Group.
The Alternative Contribution Percentage Test is satisfied
if the Contribution Percentage for the Highly Compensated
Group does not exceed the lesser of:
o The Contribution Percentage for the Non-highly
Compensated Group plus 2 percentage points, or
o the Contribution Percentage for the Non-highly
Compensated Group multiplied by 2.0.
If (i) one or more Highly Compensated Employees of the
Employer or any Related Employer are eligible to
participate in both a Cash or Deferred Arrangement and a
plan which provides for Employee Contributions or Matching
Contributions, (ii) the Deferral Percentage for the Highly
Compensated Group does not satisfy the General Deferral
Percentage Test, and (iii) the Contribution Percentage for
the Highly Compensated Group does not satisfy the General
Contribution Percentage Test, then the Contribution
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Percentage Test will be deemed to be satisfied only if the
sum of the Deferral Percentage and the Contribution
Percentage for the Highly Compensated Group does not
exceed the Aggregate Limit.
The Plan will not fail to satisfy the Contribution
Percentage test merely because all of the Eligible
Employees under the Plan for a Plan Year are Highly
Compensated Employees.
(6) Deferral Percentage
Deferral Percentage means, for any specified group, the
average of the ratios calculated (to the nearest
one-hundredth of one percent) separately for each
Participant in the group, of the amount of Elective
Contributions which are made on behalf of each Participant
for a Plan Year to each Participant's Compensation for the
Plan Year.
For purposes of determining the Deferral Percentage, each
Employee who is eligible under the terms of the Plan to
have contributions made on his behalf is treated as a
Participant. The Deferral Percentage of an eligible
Employee who makes no Elective Contribution is zero.
For purposes of determining the Deferral Percentage of a
Participant who is a Highly Compensated Employee, the
Compensation of and Elective Contributions for the
Participant include, in accordance with the provisions of
Section 4.05(d), the Compensation and all Elective
Contributions for any Family Member of the Participant.
The Deferral Percentage of a Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible
to have Elective Contributions (including Nonelective
Contributions or Matching Contributions which are treated
as Elective Contributions for purposes of the Deferral
Percentage Test) allocated to his accounts under two or
more Cash or Deferred Arrangements which are maintained by
the Employer will be determined as if the Elective
Contributions were made under a single Arrangement. For
purposes of this paragraph, if a Highly Compensated
Employee participates in two or more Cash or Deferred
Arrangements which have different Plan Years, all Cash or
Deferred Arrangements ending with or within the same
calendar year will be treated as a single Arrangement.
(7) Deferral Percentage Test
The Deferral Percentage Test is a test applied on a Plan
Year basis to determine whether a plan meets the
requirements of Code Section 401(k). The Deferral
Percentage Test may be met by either satisfying the
General Deferral Percentage Test or the Alternative
Deferral Percentage Test.
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The General Deferral Percentage Test is satisfied if the
Deferral Percentage for the Highly Compensated Group does
not exceed 125% of the Deferral Percentage for the
Non-highly Compensated Group.
The Alternative Deferral Percentage Test is satisfied if
the Deferral Percentage for the Highly Compensated Group
does not exceed the lesser of:
o the Deferral Percentage for the Non-highly
Compensated Group plus 2 percentage points, or
o the Deferral Percentage for the Non-highly
Compensated Group multiplied by 2.0.
If (i) one or more Highly Compensated Employees of the
Employer or any Related Employer are eligible to
participate in both a Cash or Deferred Arrangement and a
plan which provides for Employee Contributions or Matching
Contributions, (ii) the Deferral Percentage for the Highly
Compensated Group does not satisfy the General Deferral
Percentage Test, and (iii) the Contribution Percentage for
the Highly Compensated Group does not satisfy the General
Contribution Percentage Test, then the Deferral Percentage
Test will be deemed to be satisfied only if the sum of the
Deferral Percentage and the Contribution Percentage for
the Highly Compensated Group does not exceed the Aggregate
Limit.
The Plan will not fail to satisfy the Deferral Percentage
test merely because all of the Eligible Employees under
the Plan for a Plan Year are Highly Compensated Employees.
(8) Elective Contribution
Elective Contribution means any contribution made by the
Employer to a Cash or Deferred Arrangement on behalf of
and at the election of an Employee. An Elective
Contribution will be taken into account for a given Plan
Year only if:
o The Elective Contribution is allocated to the
Participant's Account as of a date within the Plan
Year to which it relates;
o The allocation is not contingent upon the
Employee's participation in the Plan or performance
of services on any date after the allocation date;
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o The Elective Contribution is actually paid to the
trust no later than 12 months after the end of the
Plan Year to which the Elective Contribution
relates; and
o The Elective Contribution relates to Compensation
which either (i) but for the Participant's election
to defer, would have been received by the
Participant in the Plan Year or (ii) is
attributable to services Performed by the
Participant in the Plan Year and, but for the
Participant's election to defer, would have been
received by the Participant within two and one-half
months after the close of the Plan Year.
Elective Contributions will be treated as Employer
Contributions for purposes of Code Sections 401(a),
401(k), 404, 409, 411, 412, 415, 416, and 417.
(9) Elective Deferral
Elective Deferral means the sum of the following:
o Any Elective Contribution to any Cash or Deferred
Arrangement to the extent it is not includable in
the Participant's gross income for the taxable year
of contribution;
o Any employer contribution to a simplified employee
pension as defined in Code Section 408(k) to the
extent not includable in the Participant's gross
income for the taxable year of contribution;
o Any employer contribution to an annuity contract
under Code Section 403(b) under a salary reduction
agreement to the extent not includable in the
Participant's gross income for the taxable year of
contribution; plus
o Any employee contribution designated as deductible
under a trust described in Code Section 501(c)(18)
for the taxable year of contribution.
(10) Eligible Employee
Eligible Employee means an Employee who is directly or
indirectly eligible to make a Cash or Deferred Election
under the Plan for all or a portion of the Plan Year. An
Employee who is unable to make a Cash or Deferred Election
because the Employee has not contributed to another plan
is also an Eligible Employee. An Employee who would be
eligible to make Elective Contributions but for a
suspension due to a distribution, a loan, or an election
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not to participate in the Plan, is treated as an Eligible
Employee for purposes of Code Section 401(k)(3) and 401(m)
for a Plan Year even though the Employee may not make a
Cash or Deferred Election due to the suspension. Also, an
Employee will not fail to be treated as an Eligible
Employee merely because the employee may receive no
additional Annual Additions because of Code Section
415(c)(1) or 415(e).
(11) Employee Contribution
Employee Contribution means any contribution made by an
Employee to any plan maintained by the Employer or any
Related Employer which is other than an Elective
Contribution and which is designated or treated at the
time of contribution as an after-tax contribution.
Employee Contributions include amounts attributable to
Excess Contributions which are recharacterized as Employee
Contributions.
(12) Excess Contribution
Excess Contribution means, for each member of the Highly
Compensated Group, the amount of Elective Contribution
(including any Qualified Nonelective Contributions and
Qualified Matching Contributions which are treated as
Elective Contributions) which exceeds the maximum
contribution which could be made if the Deferral
Percentage Test were to be satisfied.
(13) Excess Aggregate Contribution
Excess Aggregate Contribution means, for each member of
the Highly Compensated Group, the amount of Employee and
matching Contributions (including any Qualified
Nonelective Contributions and Elective Contributions which
are treated as Matching Contributions) which exceeds the
maximum contribution which could be made if the
Contribution Percentage Test were to be satisfied.
(14) Excess referral
Excess Referral means, for a given calendar year, that
amount by which each Participant's total Elective
Deferrals under all plans of all employers exceed the
dollar limit in effect under Code Section 402(g) for the
calendar year.
(15) Matching Contribution
Matching Contribution means any contribution made by the
Employer to any plan maintained by the Employer or any
Related Employer which is based on an Elective
Contribution or an Employee Contribution together with any
forfeiture allocated to the Participant's Account on the
basis of Elective Contributions, Employee Contributions or
Matching Contributions. A Matching Contribution will be
taken into account for a given Plan Year only if:
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o The Matching Contribution is allocated to a
Participant's Account as of a date within the Plan
Year to which it relates;
o The allocation is not contingent upon the
Employee's participation in the Plan or performance
of services on any date after the allocation date;
o The Matching Contribution is actually paid to the
Trust no later than 12 months after the end of the
Plan Year to which the Matching Contribution
relates; and
o The Matching Contribution is based on an Elective
or Employee Contribution for the Plan Year.
Any contribution or allocation, other than a Qualified
Nonelective Contribution, which is used to meet the
minimum contribution or benefit requirement of Code
Section 416 is not treated as being based on Elective
Contributions or Employee Contributions and therefore is
not treated as a Matching Contribution.
Qualified Matching Contribution means a Matching
Contribution which is 100% vested and may be withdrawn or
distributed only under the conditions described in
Treasury Regulation 1.401(k)-1(d).
(16) Nonelective Contribution
Nonelective Contribution means any Employer Contribution,
other than a Matching Contribution, which meets all of the
following requirements:
o The Nonelective Contribution is allocated to a
Participant's Account as of a date within the Plan
Year to which it relates;
o The allocation is not contingent upon the
Employee's participation in the Plan or performance
of services on any date after the allocation date;
o The Nonelective Contribution is actually paid to
the Trust no later than 12 months after the end of
the Plan Year to which the Nonelective Contribution
relates; and
o The Employee may not elect to have the Nonelective
Contribution paid in cash in lieu of being
contributed to the Plan.
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Qualified Nonelective Contribution means a
Nonelective Contribution which is 100% tested and
may be withdrawn or distributed only under the
conditions described in Treasury Regulation
1.401(k)-1(d).
(b) Application of Deferral Percentage Test
All Elective Contributions, including any Elective Contributions
which are treated as Employee or Matching Contributions with
respect to the Contribution Percentage Test, must satisfy the
Deferral Percentage Test. Furthermore, any Elective
Contributions which are not treated as Employee or Matching
Contributions with respect to the Contribution Percentage Test
must satisfy the Deferral Percentage Test. The Plan
Administrator will determine as soon as administratively feasible
after the end of the Plan Year whether the Deferral Percentage
Test has been satisfied. If the Deferral Percentage Test is not
satisfied, the Employer may elect to make an additional
contribution to the Plan on account of the Non-highly Compensated
Group. The additional contribution will be treated as a
Nonelective Contribution.
If the Deferral Percentage Test is not satisfied after any
Nonelective Contributions, the Plan Administrator may, in its
sole discretion, recharacterize all or any portion of the Excess
Contribution of each Highly Compensated Employee as an Employee
Contribution if Employee Contributions are otherwise allowed by
the Plan. If so, the Plan Administrator will notify all affected
Participants and the Internal Revenue Service of the amount
recharacterized no later than the 15th day of the third month
following the end of the Plan Year in which the Excess
Contribution was made. Excess Contributions will be includable
in the Participant's gross income on the earliest date any
Elective Contribution made on behalf of the Participant during
the Plan Year would have been received by the Participant had the
Participant elected to receive the amount in cash.
Recharacterized Excess Contributions will continue to be treated
as Employer Contributions that are Elective Contributions for all
other purposes under the Code, including Code Sections 401(a)
(other than 401(a)(4) and 401(m)), 404, 409, 411, 412, 415, 416,
417 and 401(k)(2). With respect to the Plan Year for which the
Excess Contribution was made, the Plan Administrator will treat
the recharacterized amount as an Employee Contribution for
purposes of the Deferral Percentage Test and the Contribution
Percentage Test and for purposes of determining whether the Plan
meets the requirements of Code Section 401(a)(4), but not for any
other purposes under this Plan. Therefore, recharacterized
amounts will remain subject to the nonforfeiture requirements and
distribution limitations which apply to Elective Contributions.
If the Deferral Percentage Test is still not satisfied, then
after the close of the Plan Year in which the Excess Contribution
arose but within 12 months after the close of that Plan Year, the
Plan Administrator will distribute the Excess Contributions,
together with allocable income, to the affected Participants of
the Highly Compensated Group to the extent necessary to satisfy
the Deferral Percentage Test.
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Failure to do so will cause the Plan to not satisfy the
requirements of Code Section 401(a)(4) for the Plan Year for
which the Excess Contribution was made and for all subsequent
Plan Years for which the Excess Contribution remains uncorrected.
The amount of Excess Contribution to be distributed to a Highly
Compensated Employee for a Plan Year will be reduced by any
Excess Deferrals previously distributed to the Participant for
the calendar year ending with or within the Plan Year in
accordance with Code Section 402(g)(2).
Excess Contributions will be treated as Employer Contributions
for purposes of Code Sections 404 and 415 even if distributed
from the Plan.
(c) Application of Contribution Percentage Test
Employee Contributions and Matching Contributions, disregarding
any Matching Contributions which are treated as Elective
Contributions with respect to the Deferral Percentage Test, must
satisfy the Contribution Percentage Test. The Plan Administrator
will determine as soon as administratively feasible after the end
of the Plan Year whether the Contribution Test has been
satisfied. If the Contribution Percentage Test is not satisfied,
the Employer may elect to make an additional contribution to the
Plan for the benefit of the Non-Highly Compensated Group. The
additional contribution will be treated as a Nonelective
Contribution.
If the Contribution Percentage Test is still not satisfied, then
after the close of the Plan Year in which the Excess Aggregate
Contribution arose but within 12 months after the close of that
Plan Year, the Plan Administrator will distribute (or forfeit, to
the extent not vested) the Excess Aggregate Contributions,
together with allocable income, to the affected Participants of
the Highly Compensated Group to the extent necessary to satisfy
the Contribution Percentage Test. Failure to do so will cause
the Plan to not satisfy the requirements of Code Section
401(a)(4) for the Plan Year for which the Excess Aggregate
Contribution was made and for all subsequent Plan Years for which
the Excess Aggregate Contribution remains uncorrected.
The determination of any Excess Aggregate Contributions will be
made after the recharacterization of any Excess Contributions as
Employee Contributions.
Excess Aggregate Contributions, including forfeited Matching
Contributions, will be treated as Employer Contributions for
purposes of Code Sections 404 and 415 even if they are
distributed from the Plan.
Forfeited Matching Contributions that are reallocated to the
Accounts of other Participants are treated as Annual Additions
under Code Section 415 for the Participant whose Accounts they
are reallocated to and for the Participants from whose Accounts
they are forfeited.
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(d) Family Aggregation
The Deferral Percentage or the Contribution Percentage (the
"Relevant Percentage") for any Highly Compensated Employee who is
subject to the family aggregation rules of Section 1.18(c) will
be determined by combining the Elective Contributions, Employee
Contributions, Matching Contribution, amounts treated as Elective
or Matching Contributions and Compensation of all the eligible
Family Members.
The determination and correction of Excess Contributions and
Excess Aggregate Contributions of a Highly Compensated Employee
whose Relevant Percentage is determined under the family
aggregation rules is accomplished by reducing the Relevant
Percentage as provided for in Sections 4.05(b) and 4.05(c) and
Excess Contributions or Excess Aggregate Contributions for the
Family group are allocated among the Family Members whose
contributions were combined to determine the Relevant Percentage
in proportion to the Elective Contributions or Nonelective and
Matching Contributions of each Family Member.
For all purposes under this Section, the contributions and
compensation of eligible Family Members who are not Highly
Compensated Employees without regard to family aggregation are
disregarded when determining the Relevant Percentage for the
Non-highly Compensated Group.
(e) Reduction of Excess Amounts
The total Excess Contribution or total Excess Aggregate
Contribution will be reduced in a manner so that the Deferral
Percentage or the Contribution Percentage (Relevant Percentage)
of the affected Participant(s) with the highest Relevant
Percentage will first be lowered to a point not less than the
level of the affected Participant(s) with the next highest
Relevant Percentage. If further overall reductions are required
to satisfy the relevant test, each of the above Participants' (or
groups of Participants') Relevant Percentage will be lowered to a
point not less than the level of the affected Participant(s) with
the next highest Relevant Percentage, and so on continuing until
sufficient total reductions have occurred to achieve satisfaction
of the relevant test.
(f) Priority of Reductions
The Plan Administrator will determine the method and order of
correcting Excess Contributions and Excess Aggregate
Contributions. The method of correcting Excess Contributions and
Excess Aggregate Contributions must meet the requirements of Code
Section 401(a)(4). The determination of whether a rate of
Matching Contribution discriminates under Code Section 401(a)(4)
will be made after making any corrective distributions of Excess
Deferrals, Excess Contributions and Excess Aggregate
Contributions.
Excess Aggregate Contributions (and any attributable income) will
be corrected first, by distributing any excess Employee
Contributions (and any attributable income);
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then by distributing vested excess Matching Contributions (and
any attributable income); and finally, by forfeiting or
distributing non-vested Matching Contributions (and any
attributable income). The Plan will not distribute Employee
Contributions while the Matching Contributions based upon those
Employee Contributions remain allocated.
(g) Income
The income allocable to any Excess Contribution made to a given
Account for a given Plan Year will be equal to the total income
allocated to the Account for the Plan Year, multiplied by a
fraction, the numerator of which is the amount of the Excess
Contribution and the denominator of which is equal to the sum of
the balance of the Account at the beginning of the Plan Year plus
the Participant's Elective Contributions and amounts treated as
Elective Contributions for the Plan Year.
The income allocable to any Excess Aggregate Contribution made to
a given Account for a given Plan Year will be equal to the total
income allocated to the Account for the Plan Year, multiplied by
a fraction, the numerator of which is the amount of the Excess
Aggregate Contribution and the denominator of which is equal to
the sum of the balance of the Account at the beginning of the
Plan Year plus the Participant's Employee and Matching
Contributions and amounts treated as Employee and Matching
Contributions for the Plan Year.
Notwithstanding the foregoing, the Plan may use any reasonable
method for computing the income allocable to any Excess
Contribution or Excess Aggregate Contribution provided the method
does not violate Code Section 401(a)(4), is used consistently for
all corrective distributions under the Plan for the Plan Year,
and is used by the Plan for allocating income to the
Participants' Accounts.
Income includes all earnings and appreciation, including
interest, dividends, rents, royalties, gains from the sale of
property, and appreciation in the value of stocks, bonds, annuity
and life insurance contracts and other property, regardless of
whether the appreciation has been realized.
(h) Treatment as Elective Contributions
The Plan Administrator may, in its discretion, treat all or any
portion of Qualified Nonelective Contributions or Qualified
Matching Contributions or both, whether to this Plan or to any
other qualified plan which has the same Plan Year and is
maintained by the Employer or a Related Employer, as Elective
Contributions for purposes of satisfying the Deferral Percentage
Test if they meet all of the following requirements:
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o All Nonelective Contributions, including the Qualified
Nonelective Contributions treated as Elective
Contributions for purposes of the Deferral Percentage
Test, satisfy the requirements of Code Section 401(a)(4);
o Any Nonelective Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test or as Matching Contributions for purposes
of the Contribution Percentage Test satisfy the
requirements of Code Section 401(a)(4);
o The Qualified Matching Contributions which are treated as
Elective Contributions for purposes of the Deferral
Percentage Test are not taken into account in determining
whether any Employee Contributions or other Matching
Contributions satisfy the Contribution Percentage Test;
o Any Matching Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test satisfy the requirements of Code Section
401(m); and
o The plan which includes the Cash or Deferred Arrangement
and the plan or plans to which the Qualified Nonelective
Contributions and Qualified Matching Contributions are
made could be aggregated for purposes of Code Section
410(b).
(i) Treatment as Matching Contributions
The Plan Administrator may, in its discretion, treat all or any
portion of Qualified Nonelective Contributions or
Elective Contributions or both, whether to this Plan or to any
other qualified plan which has the same Plan Year and is
maintained by the Employer or a Related Employer, as Matching
Contributions for purposes of satisfying the Contribution
Percentage Test if they meet all of the following requirements:
o All Nonelective Contributions, including the Qualified
Nonelective Contributions treated as Matching
Contributions for purposes of the Contribution Percentage
Test, satisfy the requirements of Code Section 401(a)(4);
o Any Nonelective Contributions which are not treated as
Elective Contributions for purposes of the Deferral
Percentage Test or as Matching Contributions for purposes
of the Contribution Percentage Test satisfy the
requirements of Code Section 401(a)(4);
o The Elective Contributions which are treated as Matching
Contributions for purposes of the Contribution Percentage
Test are not taken into account in
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determining whether any other Elective Contributions
satisfy the Deferral Percentage Test;
o The Qualified Nonelective Contributions and Elective
Contributions which are treated as Matching Contributions
for purposes of the Contribution Percentage Test are not
taken into account in determining whether any other
contributions or benefits satisfy Code Section 401(a); and
o All Elective Contributions, including those treated as
Matching Contributions for purposes of the Contribution
Percentage Test, satisfy the requirements of Code Section
401(k)(3); and
o The plan that takes Qualified Nonelective Contributions
and Elective Contributions into account in determining
whether Employee and Matching Contributions satisfy the
requirements of Code Section 401(m)(2)(A) and the plan or
plans to which the Qualified Nonelective Contributions and
Elective Contributions are made could be aggregated for
purposes of Code Section 410(b).
(j) Aggregation of Plans
If the Employer or a Related Employer sponsors one or more other
plans which include a Cash or Deferred Arrangement, the Employer
may elect to treat any two or more of such plans as an aggregated
single plan for purposes of satisfying Code Sections 401(a)(4),
401(k) and 410(b). The Cash of Deferred Arrangements included in
such aggregated plans will be treated as a single Arrangement for
purposes of this Section. However, only those plans that have
the same plan year may be so aggregated.
If the Employer or a Related Employer sponsors one or more other
plans to which Employee Contributions or Matching Contributions
are made, the Employer may elect to treat any two or more of such
plans as an aggregated single plan for purposes of satisfying
Code Sections 401(a)(4), 401(m) and 410(b). However, only those
plans that have the same plan year may be so aggregated.
Any such aggregation must be made in accordance with Treasury
Regulation 1.401(k)-1(b)(3). For example, contributions and
allocations under the portion of a plan described in Code Section
4975(e)(7) (an ESOP) may not be aggregated with the portion of a
plan not described in Code Section 4975(e)(7) (a non-ESOP) for
purposes of determining whether the ESOP or non-ESOP satisfies
the requirements of Code Sections 401(a)(4), 401(k), 401(m) and
410(b).
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Plans that could be aggregated under Code Section 410(b) but that
are not actually aggregated for a Plan Year for purposes of Code
Section 410(b) may not be aggregated for purposes of Code
Sections 401(k) and 401(m).
ARTICLE 5
RETIREMENT BENEFITS
5.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accrued
Benefit will be determined as of the Valuation Date immediately
preceding the date that benefits are to be distributed.
5.02 Normal Retirement
After an Active Participant reaches his Normal Retirement Date, he may
elect to retire. Upon such retirement he will become a Retired
Participant and his Accrued Benefit will become distributable to him. A
Participant's Accrued Benefit will become nonforfeitable no later than
the date upon which he attains his Normal Retirement Age. The form and
timing of benefit payment will be governed by the provisions of Section
5.05.
5.03 Disability Retirement
In the event of a Participant's termination due to Disability, he will
be entitled to begin to receive a distribution of his Accrued Benefit
which will become nonforfeitable as of his date of termination. The
form and timing of benefit payment will be governed by the provisions of
Section 5.05.
Disability means the determination by the Plan Administrator that a
Participant is unable by reason of any medically determinable physical
or mental impairment to perform the usual duties of his employment or of
any other employment for which he is reasonably qualified based upon his
education, training and experience.
5.04 Termination of Employment
(a) In General
If a Participant's employment terminates for any reason other
than retirement, death, or disability, his Accrued Benefit will
become distributable to him as of the last day of the month which
coincides with or next follows the last date upon which any
contributions on the Participant's behalf are made to the Trust
following the Participant's date of termination of employment (or
as of such earlier date as determined by the Plan Administrator
in a uniform and nondiscriminatory manner). The form and timing
of benefit payment will be governed by the provisions of Section
5.05.
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(b) Cash-Out Distribution
If a Participant terminates employment and receives a
distribution equal to the Vested Percentage of his Accounts which
are subject to the Vesting Schedule (such Accounts are
hereinafter referred to as Employer Contribution Accounts), a
Cash-Out Distribution will be deemed to have occurred if the
following conditions are met:
(1) The Participant was less than 100% vested in his Employer
Contribution Accounts; and
(2) The entire distribution is made before the last day of the
second Plan Year following the Plan Year in which the
Participant terminated employment.
(c) Restoration of Employer Contribution Accounts
If, following the date of a Cash-Out Distribution, a Participant
returns to an Eligible Employee Classification prior to incurring
5 consecutive One Year Breaks-in-Service, then the Participant
will have the right to repay to the Trustee, within 5 years after
his return date, the portion of the Cash-Out Distribution which
was attributable to his Employer Contribution Accounts which were
less than 100% vested in order to restore such Accounts to their
value as of the date of the Cash-Out Distribution.
The Plan Administrator will restore an eligible Participant's
Employer Contribution Accounts as of the Accounting Date
coincident with or immediately following the complete repayment
of the Cash-Out Distribution. To restore the Participant's
Employer Contribution Accounts, the Plan Administrator, to the
extent necessary, will, under rules and guidelines applied in a
uniform and nondiscriminatory manner, first allocate to the
Participant's Employer Contribution Accounts the amount, if any,
of Forfeitures which would otherwise be allocated under Article
3. To the extent such Forfeitures for a particular Accounting
Period are insufficient to enable the Plan Administrator to make
the required restoration, the Employer will contribute such
additional amount as is necessary to enable the Plan
Administrator to make the required restoration. The Plan
Administrator will not take into account the allocation under
this Section in applying the limitation on allocations under
Article 7.
(d) Non-Vested Participant
If a Participant who is zero percent vested in his Employer
Contribution Accounts terminates employment, a Cash-Out
Distribution will be deemed to have occurred as of the
Participant's date of termination of employment.
If the Participant subsequently returns to an Eligible Employee
Classification prior to incurring five consecutive One Year
Breaks-in-Service, then the Participant will immediately become
entitled to a complete restoration of his Employer Contribution
Accounts as of the Accounting Date coincident with or next
following his date of
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re-employment. Such restoration will be made in accordance with
the provisions of Section 5.04(c).
5.05 Form of Benefit Payment
Subject to the provisions of Section 5.06, the Plan Administrator will
direct the Trustee to make the payment of any benefit provided under
this Plan upon the event giving rise to such benefit within 60 days
following the receipt of a Participant's written request for the payment
of benefits on a form provided by the Plan Administrator. The Plan
Administrator may temporarily suspend such processing in the event of
unusual or extraordinary circumstances such as the conversion of Plan
records from one recordkeeper to another.
The form of benefit will be a lump sum payment, unless the Participant
elects a direct transfer pursuant to Section 5.07.
If a Participant's Vested Accrued Benefit is in excess of $3,500, any
payment of benefits prior to the Participant's Normal Retirement Date
will be subject to the Participant's written consent. If the value of
his Vested Accrued Benefit at the time of any distribution exceeds
$3,500, the value of his Vested Accrued Benefit at any later time will
be deemed to also exceed $3,500.
5.06 Commencement of Benefit
Subject to the provisions of this Article, commencement of a benefit
will, unless the Participant elects otherwise in writing, begin not
later than the 60th day after the later of the close of the Plan Year in
which the Participant attains Normal Retirement Age or the close of the
Plan Year which contains the date the Participant terminates his service
with the Employer.
Payment of a Participant's benefits must begin no later than his
Required Beginning Date.
All distributions required under this Section will be determined and
made in accordance with the regulations issued under Code Section
401(a)(9), including those dealing with minimum Distribution
requirements. Notwithstanding the provisions of Section 5.05. An
Active Participant who has reached his Required Beginning Date will
receive an annual distribution of his Accrued Benefit equal to the
minimum required distribution determined under Code Section 401(a)(9).
For purposes of this Section, life expectancy and joint and last
survivor expectancy are to be computed by the use of the return
multiples contained in Section 1.72-9 of the Income Tax Regulations.
If the Participant dies after distribution of his interest has begun,
the remaining portion of the interest will continue to be distributed at
least as rapidly as under the method of distribution being used before
the Participant's death.
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5.07 Directed Transfer of Eligible Rollover Distributions
(a) General
This Section applies to distributions made on or after January 1,
1993. 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 Plan Administrator, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct
Rollover.
(b) Eligible Rollover Distribution
An Eligible Rollover Distribution is any distribution of all or
any portion of the balance to the credit of the Distributee,
except that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified period
of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) Eligible Retirement Plan
An Eligible Retirement Plan is an individual retirement account
described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, or a qualified
trust described in section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
(d) Distributee
A Distributee includes an Employee or Former Employee. In
addition, the Employee's or Former Employee's surviving spouse
and the Employee's or Former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations
order, as defined in section 414(p) of the Code, are Distributees
with regard to the interest of the spouse or former spouse.
(e) Direct Rollover
A Direct Rollover is a payment by the Plan to t he Eligible
Retirement Plan specified by the Distributee.
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(f) Waiver of 30-Day Notice
If a distribution is one to which Code Sections 401(a)(11), and
417 do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-1l(c) of
the Income Tax Regulations is given, provided that:
o the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least
30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option); and
o the Participant, after receiving the notice, affirmatively
elects to receive a distribution.
ARTICLE 6
DEATH BENEFIT
6.01 Valuation of Accounts
For purposes of this Article, the value of a Participant's Accrued
Benefit will be determined as of the Valuation Date immediately
preceding the date that benefits are to be distributed.
6.02 Death Benefit
In the event of the death of a Participant prior to the date on which he
receives a complete distribution of his benefit under the Plan, the
Participant's Beneficiary will be entitled to receive the value of the
Participant's Accrued Benefit.
6.03 Designation of Beneficiary
Each Participant will be given the opportunity to designate a
Beneficiary or Beneficiaries, and from time to time the Participant may
file with the Plan Administrator a new or revised designation on the
form provided by the Plan Administrator. If a Participant is married,
any designation of a Beneficiary other than the Participant's spouse
must be consented to by the Participant's spouse pursuant to a Qualified
Election.
If a Participant dies without designating a Beneficiary, or if the
Participant is predeceased by all designated Beneficiaries and
contingent Beneficiaries, the Plan Administrator will distribute all
benefits which are payable in the event of the Participant's death in
the following manner and to the first of the following (who are listed
in order of priority) who survive the Participant by at least 30 days:
o All to the Participant's Surviving Spouse;
o Equally among the then living children of the Participant (by
birth or adoption);
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o Among the Participant's then living lineal descendants, by right
of representation; or
o The Participant's estate.
ARTICLE 7
LIMITATIONS ON BENEFITS
7.01 Limitation on Annual Additions
The amount of the Annual Addition which may be allocated under this Plan
to any Participant's Account as of any Allocation Date will not exceed
the Defined Contribution Limit (based upon his Aggregate Compensation up
to such Valuation Date) reduced by the sum of any allocations of annual
additions made to Participant's Accounts under this Plan as of any
preceding Allocation Date within the Limitation Year.
If the Annual Addition under this Plan on behalf of a Participant is to
be reduced as of any Allocation Date as a result of the next preceding
paragraph, the reduction will be, to the extent required, effected by
first reducing Participant contributions (which increase the annual
addition), then Forfeitures (if any), and then Employer contributions to
be allocated under this Plan on behalf of the Participant as of the
Allocation Date.
Any necessary reduction will be made as follows:
(a) The amount of the reduction consisting of nondeductible
Participant contributions will be paid to the Participant as soon
as administratively feasible.
(b) The amount of the reduction consisting of any other Participant
contributions will be paid to the Participant as soon as
administratively feasible.
(c) The amount of the reduction consisting of Forfeitures will be
allocated and reallocated to other Accounts in accordance with
the Plan formula for allocating Forfeitures to the extent that
such allocations do not cause the additions to any other
Participant's Accounts to exceed the lesser of the Defined
Contribution Limit or any other limitation provided in the Plan.
(d) The amount of the reduction consisting of Employer contributions
will be allocated and reallocated to other Accounts in accordance
with the Plan formula for Employer Contributions to the extent
that such allocations do not cause the additions to any other
Participant's Accounts to exceed the lesser of the Defined
Contribution Limit or any other limitation provided in the Plan.
(e) To the extent that the reductions described in paragraph (d)
cannot be allocated to other Participant's Accounts, the
reductions will be allocated to a suspense account
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as Forfeitures and held therein until the next succeeding
Allocation Date on which Forfeitures could be applied under the
provisions of the Plan. All amounts held in a suspense account
must be applied as Forfeitures before any additional
contributions, which would constitute annual additions, may be
made to the Plan. If the Plan terminates, the suspense account
will revert to the Employer to the extent it may not be allocated
to any Participant's Accounts.
(f) If a suspense account is in existence at any time during a
Limitation Year pursuant to this Section, it will not participate
in the allocation of the Trust Fund's investment gains and
losses.
7.02 Where Employer Maintains Another Qualified Plan
(a) Where Employer Maintains Another Qualified Defined Contribution
Plan
If the Employer maintains this Plan and one or more other
qualified defined contribution plans, one or more welfare benefit
funds (as defined in Code Section 419(e)), or one or more
individual medical accounts (as defined in Code Section
415(l)(2)), all of which are referred to in this Article 7 as
"qualified defined contribution plans", the annual additions
allocated under this Plan to any Participant's Accounts will be
limited in accordance with the allocation provisions of this
Section 7.02(a).
The amount of the Annual Additions which may be allocated under
this Plan to any Participant's Accounts as of any Allocation Date
will not exceed the Defined Contribution Limit (based upon
Aggregate Compensation up to the allocation date) reduced by the
sum of any allocations of Annual Additions made to the
Participant's Accounts under this Plan and any other qualified
defined contribution plans maintained by the Employer as of any
earlier Allocation Date within the Limitation Year.
If a Allocation Date of this Plan coincides with a Allocation
Date of any other plan described in the above paragraph, the
amount of Annual Additions to be allocated on behalf of a
Participant under this Plan as of such date will be an amount
equal to the product of the amount described in the next
preceding paragraph multiplied by a fraction (not to exceed 1.0),
the numerator of which is the amount to be allocated under this
Plan without regard to this Article during the Limitation Year
and the denominator of which is the amount that would otherwise
be allocated on this Allocation Date under all plans without
regard to this Article 7.
If the Annual Addition under this Plan on behalf of a Participant
is to be reduced as of any Allocation Date as a result of the
next preceding two paragraphs, the reduction will be, to the
extent required, effected by first reducing Participant
contributions (which increase the annual addition), then
Forfeitures (if any), and then any Employer
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contributions, to be allocated under this Plan on behalf of the
Participant as of the Allocation Date.
If as a result of the first four paragraphs of this Section 7.02
the allocation of additions is reduced, the reduction will be
treated in the manner described in the third paragraph of Section
7.01.
(b) Where Employer Maintains a Qualified Defined Benefit Plan
(1) In General
If the Employer maintains (or has ever maintained), in
addition to this Plan, one or more qualified defined
benefit plans, then for any Limitation Year, the sum of
the Defined Benefit Plan Fraction and the Defined
Contribution Plan Fraction will not exceed 1.0. If, in any
Limitation Year, the sum of the Defined Benefit Plan
Fraction and the Defined Contribution Plan Fraction for a
Participant would exceed 1.0) without adjustment to the
amount of the annual benefit that can be paid to the
Participant under the defined benefit plan, then the
amount of annual benefit that would otherwise be paid to
the Participant under the defined benefit plan will be
reduced to the extent necessary to reduce the sum of the
Defined Benefit Plan Fraction and the Defined Contribution
Plan Fraction for the Participant to 1.0.
(2) Transition Rule under TRA Rule '86
If a plan was in existence on May 6, 1986, the numerator
of the Defined Contribution Plan Fraction will be reduced
(to not less than zero) as prescribed by the Secretary of
the Treasury by subtracting the amount required to
decrease the sum of the Defined Contribution Plan Fraction
plus the Defined Benefit Plan Fraction to 1.0. Such
amount is determined (as of the first day of the first
Limitation Year beginning on or after January 1, 1987) as
the product of:
(A) The amount by which, without this adjustment, the
sum of the Defined Contribution Plan Fraction plus
the Defined Benefit Plan Fraction exceeds 1.0.
multiplied by
(B) The denominator of the Defined Contribution Plan
Fraction, as computed through the last Limitation
Year beginning before January 1, 1987, disregarding
any changes in the terms and conditions of the plan
after May 5, 1986.
This subparagraph applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of
Code Section 415 for all Limitation Years beginning before
January 1, 1987.
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(3) Transition Rule under TEFRA
In the case of a plan which met the limitation of Section 415 of
the Code for the last Limitation Year beginning before January 1,
1983, the numerator of the Defined Contribution Plan Fraction
will be reduced (to not less than zero) as prescribed by the
Secretary of the Treasury by subtracting the amount required to
decrease the sum of the Defined Contribution Plan Fraction plus
the Defined Benefit Plan Fraction to 1.0. Such amount is
determined (as of the first day of the first Limitation Year
beginning on or after January 1, 1983) as the product of:
(A) The amount by which, without this adjustment, the sum of
the Defined Contribution Plan Fraction plus the Defined
Benefit Plan Fraction exceeds 1.0, multiplied by
(B) The denominator of the Defined Contribution Plan Fraction,
as computed through the last Limitation Year beginning
before January 1, 1983.
7.03 Definitions Applicable to Article 7
(a) Aggregate Compensation
Aggregate Compensation means a Participant's earned income,
wages, salaries, and fees for professional services, and other
amounts received for personal services actually rendered in the
course of employment with the employer maintaining the plan
(including, but not limited to, commissions paid to salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips and bonuses),
and excluding the following:
o Employer contributions to a plan of deferred compensation which
are not included in the employee's gross income for the taxable
year in which contributed or employer contributions under a
simplified employee pension plan to the extent the contributions
are deductible by the employee, or any distributions from a plan
of deferred compensation;
o Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
o Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
o Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) toward the purchase of an annuity described
in Code Section 403(b) (whether or not the amounts are actually
excludable from the gross income of the employee).
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Aggregate Compensation excludes any amounts contributed by the Employer
or any Related Employer on behalf of any Employee pursuant to a salary
reduction agreement which are not includable in the gross income of the
Employee due to Code Section 125, 401(k), 402(h) or 403(b).
Aggregate Compensation in excess of the Statutory Compensation Limit is
disregarded.
Aggregate Compensation for any Limitation Year is the Aggregate
Compensation actually paid or includable in gross income in such year.
(b) Allocation Date
Allocation Date means the date with respect to which all or a
portion of employer contributions, employee contributions or
forfeitures or both are allocated to participant accounts under a
defined contribution plan.
(c) Annual Additions
For Plan Years beginning after December 31, 1986, Annual
Additions are the sum of the following amounts allocated to any
defined contribution plan maintained by the Employer (including
voluntary contributions to any defined benefit plan maintained by
the Employer) on behalf of a Participant for a Limitation Year:
o All Employee and Employer contributions;
o All reallocated forfeitures;
o Amounts allocated after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2) which is part of a
pension or annuity plan maintained by the Employer, and amounts
derived from contributions paid or accrued after December 31,
1985, in taxable years ending after that date, which are
attributable to post-retirement medical benefits required by Code
Section 401(h)(6) to be allocated to the separate account of a
Key Employee under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer.
Contributions or forfeitures will be treated as Annual Additions
regardless of whether they constitute Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions within the meaning of
the regulations under Code Section 401(k) or 401(m) and regardless of
whether they are corrected through distribution or recharacterization.
Excess deferrals distributed in accordance with Treasury Regulation
1.402(g)-1(e)(2) or (3) are not Annual Additions. The Annual Addition
for any Limitation Year beginning before January 1, 1987, will not be
recomputed to treat all Employee contributions as Annual Additions.
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(d) Annual Benefit
Annual Benefit means a benefit payable annually in the form of a
straight life annuity (with no ancillary benefits) under a plan
to which employees do not contribute and under which no rollover
contributions are made.
(e) Defined Benefit Compensation Limit
The Defined Benefit Compensation Limit is equal to 100% of the
Participant's average Aggregate Compensation for the three
consecutive calendar years (or other twelve consecutive month
periods adopted by the Employer pursuant to a Written Resolution
and applied on a uniform and consistent basis) of service during
which the Participant had the greatest Aggregate Compensation.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Compensation Limit will be
the Actuarial Equivalent of a straight life annuity beginning at
the same age. No adjustment is required for the following:
pre-retirement disability benefits, pre-retirement death benefits
and post-retirement medical benefits. For purposes of this
paragraph, the interest rate used in adjusting the Defined
Benefit Compensation Limit will be the greater of (1) 5%, or (2)
the post-retirement interest rate specified in the plan for
Actuarial Equivalent purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of service with the Employer or any Related
or Predecessor Employer, the Defined Benefit Compensation Limit
will be multiplied by a fraction, the numerator of which is the
Participant's number of years of service with the Employer or
Related or Predecessor Employer, and the denominator of which is
10.
With regard to a Participant who has separated from service with
a nonforfeitable right to an Accrued Benefit, the Defined Benefit
Compensation Limit will be adjusted effective January 1 of each
Calendar year. For any Limitation Year beginning after the
separation occurs, the Defined Benefit Compensation Limit will be
equal to the Defined Benefit Compensation Limit which was
applicable to the Participant in the Limitation Year in which he
separated from service multiplied by a fraction, the numerator of
which is the Defined Benefit Dollar Limit for the Limitation Year
in which the Defined Benefit Compensation Limit is being adjusted
and the denominator of which is the Defined Benefit Dollar Limit
for the Limitation Year in which the Participant separated from
service.
(f) Defined Benefit Dollar Limit
The Defined Benefit Dollar Limit is equal to $90,000 for calendar
years 1984 through 1987. As of January 1, 1988 and as of January
1 of each subsequent calendar year, the dollar limitation
(described in Code Section 415(b)(1)(A)) as determined by the
Secretary of the Treasury for that calendar year will become
effective as the Defined
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Benefit Dollar Limit for the calendar year. For calendar years
between 1976 and 1983, the Defined Benefit Dollar Limit is
$75,000 as adjusted by the Secretary of the Treasury under Code
Section 415(d) for that calendar year. The Defined Benefit Dollar
Limit for a calendar year applies to Limitation Years ending with
or within that calendar year.
Where the annual benefit is payable to a Participant in a form
other than a straight life annuity or a Qualified Joint and
Survivor Annuity, the Defined Benefit Dollar Limit will be the
Actuarial Equivalent of a straight life annuity beginning at the
same age. No adjustment is required for the following:
pre-retirement disability benefits, pre-retirement death
benefits, and post-retirement medical benefits. For purposes of
this paragraph, the interest rate used for adjusting the Defined
Benefit Dollar Limit will be the greater of (1) 5%, or (2) the
post-retirement interest rate specified for Actuarial Equivalent
purposes.
Where the annual benefit is payable to a Participant who has
fewer than 10 years of participation in the Plan, the Defined
Benefit Dollar Limit will be multiplied by a fraction, the
numerator of which is the Participant's number of years (or part
thereof) of participation in the Plan, and the denominator of
which is 10. To the extent provided by the Secretary of the
Treasury, this paragraph will be applied to each change in the
benefit structure of the Plan.
For a benefit commencing before a Participant's Social Security
Retirement Age but at or after age 62, the Defined Benefit Dollar
Limit will be adjusted in a manner which is consistent with the
reduction for old-age insurance benefits commencing before Social
Security Retirement Age under the Social Security Act. The
reduction will be 5/9 of 1% for each of the first 36 months and
5/12 of 1% for each additional month (up to 24 months) by which
benefits commence before the month of the Participant's Social
Security Retirement Age. The Defined Benefit Dollar Limit for a
benefit commencing before age 62 will be adjusted to the
Actuarial Equivalent of the Defined Benefit Dollar Limit for a
benefit commencing at age 62 based on an interest rate equal to
the greater of (1) 5%, or (2) the interest rate specified in the
plan for determining actuarial equivalence for early retirement.
For a benefit commencing after a Participant's Social Security
Retirement Age, the Defined Benefit Dollar Limit will be adjusted
to the actuarial equivalent of the Defined Benefit Dollar Limit
for a benefit commencing at the Participant's Social Security
Retirement Age. For purposes of this paragraph, the interest
rate used for adjusting the Defined Benefit Dollar Limit will be
the lesser of (1) 5%, or (2) the interest rate specified in the
plan for determining actuarial equivalence for early retirement.
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(g) Defined Benefit Limit
The Defined Benefit Limit is the lesser of the Defined Benefit
Dollar Limit or the Defined Benefit Compensation Limit.
(h) Defined Benefit Plan Fraction Denominator
The Defined Benefit Plan Fraction Denominator with respect to any
Participant is the lesser of (1) the product of the Defined
Benefit Dollar Limit multiplied by 1.25, or (2) the product of
the Defined Benefit Compensation Limit multiplied by 1.4.
However, for purposes of determining the Defined Benefit Plan
Fraction Denominator, "years of service with the Employer or any
Related or Predecessor Employer will be substituted for years of
participation in the Plan" wherever it appears in Section
7.03(f).
(i) Defined Benefit Plan Fraction
The Defined Benefit Plan Fraction is a fraction determined as of
the close of a Limitation Year, the numerator of which is the
Projected Annual Benefit payable to a Participant under this Plan
and the denominator of which is the Defined Benefit Fraction
Denominator. If a Participant has participated in more than one
defined benefit plan maintained by the Employer, the numerator of
the Defined Benefit Plan Fraction is the sum of the projected
annual benefits payable to the Participant under all of the
defined benefit plans, whether or not terminated.
(j) Defined Contribution Limit
The Defined Contribution Limit for a given Limitation Year is
equal to the lesser of (1) the Defined Contribution Compensation
Limit, which is 25% of Aggregate Compensation applicable to the
Limitation Year, or (2) the Defined Contribution Dollar Limit,
which, for calendar years after 1983 is the greater of $30,000 or
one-fourth of the Defined Benefit Dollar Limit for the Limitation
Year, and for calendar years between 1976 and 1983 is one-third
of the Defined Benefit Dollar Limit. If a short Limitation Year
is created because of an amendment changing the Limitation Year
to a different 12 consecutive month period, the Defined
Contribution Dollar Limit is Multiplied by a fraction, the
numerator of which is equal to the number of months in the Short
Limitation Year and the denominator of which is 12.
(k) Defined Contribution Plan Fraction
The Defined Contribution Plan Fraction is a fraction determined
as of the close of a Limitation Year, the numerator of which is
the sum of the Annual Additions to the Participant's Accounts
under all defined contribution plans of the Employer for the
current and all prior Limitation Years and the denominator of
which is the sum of the Annual Additions which would have been
made for the Participant for the current and all prior Limitation
Years (for all prior years of service with the Employer or any
predecessor Employer) if in each Limitation year the Annual
Additions equaled the lesser of (1) the product of the Defined
Contribution Compensation Limit for the
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Limitation Year multiplied by 1.4, or (2) the product of the
Defined Contribution Dollar Limit for the Limitation Year
multiplied by 1.25. The aggregate amount in the numerator of this
fraction due to years beginning before January 1, 1976 may not
exceed the aggregate amount in the denominator of this fraction
for all such years.
For purposes of this Section 7.03(k), the Annual Addition for any
Limitation Year beginning before January 1, 1987 will not be
recomputed to treat all Employee contributions as Annual
Additions.
(l) Employer
The Employer is the Employer that adopts this Plan together with
all Related Employers. For this purpose, the definition of
Related Employer in Section 1.33 of this Plan is modified by Code
Section 415(h).
(m) Limitation Year
The Limitation Year will be the 12 consecutive month period which
is specified in Article 1 of this Plan and which is adopted for
all qualified plans maintained by the Employer pursuant to a
Written Resolution adopted by the Employer. In the event of a
change in the Limitation Year, the additional limitations of
Treasury Regulation Section 1.415-2(b)(4)(iii) will also apply.
(n) Projected Annual Benefit
For purposes of this Section, a Participant's Projected Annual
Benefit is equal to the annual benefit to which a Participant in
a defined benefit Plan would be entitled under the terms of the
plan based on the following assumptions:
o The Participant will continue employment until reaching normal
retirement age as determined under the terms of the plan (or
current age, if that is later);
o The Participant's compensation for the Limitation Year under
consideration will remain the same for all future years;
o All other relevant factors used to determine benefits under the
plan for the Limitation Year under consideration will remain
constant for all future Limitation Years; and
o The benefits resulting from any Participant Contributions or
Rollover Contributions are disregarded.
(o) Social Security Retirement Age
Social Security Retirement Age means age 65 for a Participant
born before January 1, 1938; age 66 for a Participant born after
December 31, 1937. but before January 1, 1955; and age 67 for a
Participant born after December 31, 1954.
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7.04 Effect of Top-Heavy Status
(a) General
Notwithstanding the provisions of Section 7.03, "1.0" will be
substituted for "1.25" wherever it appears in Sections 7.03(h)
and 7.03(k) for any Limitation Year in which the Plan is found to
be Top-Heavy for the Plan Year which coincides with or ends
within such Limitation Year.
(b) Non-application
Section 7.04(a) will not apply for any Limitation Year in which,
for the Plan Year which coincides with or ends within such
Limitation Year, (1) the Plan is not determined to be Super
Top-Heavy and (2) for any Non-Key Employee who is a Participant
in both this Plan and a defined benefit plan maintained by the
Employer or a Related Employer, the annual allocation of Employer
contributions plus Forfeitures under this Plan is not less than
7.5% of the Non-Key Employee's Aggregate Compensation.
ARTICLE 8
MISCELLANEOUS
8.01 Employment Rights of Parties Not Restricted
The adoption and maintenance of this Plan will not be deemed a contract
between the Employer and any Employee. Nothing in this Plan will give
any Employee or Participant the right to be retained in the employ of
the Employer or to interfere with the right of the Employer to discharge
any Employee or Participant at any time, nor will it give the Employer
the right to require any Employee or Participant to remain in its
employ, or to interfere with any Employee's or Participant's right to
terminate his employment at any time.
8.02 Alienation
(a) General
No person entitled to any benefit under this Plan will have any
right to sell, assign, transfer, hypothecate, encumber, commute,
pledge, anticipate or otherwise dispose of his interest in the
benefit, and any attempt to do so will be void. No benefit under
this Plan will be subject to any legal process, levy, execution,
attachment or garnishment for the payment of any claim against
such person.
(b) Exceptions
Section 8.02(a) will not apply to the extent a Participant or
Beneficiary is indebted to the Plan under the provisions of the
Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, the portion of the amount
distributed which equals the indebtedness will be withheld by the
Trustee to apply against or
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discharge the indebtedness. Before making a payment, however,
the Participant or Beneficiary must be given written notice by
the Plan Administrator that the indebtedness is to be so paid in
whole or part from his Participant's Accrued Benefit. If the
Participant or Beneficiary does not agree that the indebtedness
is a valid claim against his Vested Accrued Benefit, he will be
entitled to a review of the validity of the claim in accordance
with procedures established by the Plan Administrator.
Section 8.02(a) will not apply to a qualified domestic relations
order (QDRO) as defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the Plan
Administrator under the provisions of the Retirement Equity Act
of 1984. The Plan Administrator will 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 QDRO, a former
spouse of a Participant will be treated as the spouse or
Surviving Spouse for all purposes under the Plan. Where,
however, because of a QDRO, more than one individual is to be
treated as a Surviving Spouse, the total amount to be paid in the
form of a Qualified Survivor Annuity or the survivor portion of a
Qualified Joint and Survivor Annuity may not exceed the amount
that would be paid if there were only one Surviving Spouse. All
rights and benefits, including elections, provided to a
Participant under this Plan will be subject to the rights
afforded to any alternate payee as such term is defined in Code
Section 414(p).
This Plan specifically permits distribution to an alternate payee
under a QDRO (without regard to whether the Participant has
attained his or her earliest retirement age as that term is
defined under Code Section 414(p)) in the same manner that is
provided for a Vested Terminated Participant.
8.03 Qualification of Plan
The Employer will have the sole responsibility for obtaining and
retaining qualification of the Plan under the Code with respect to the
Employer's individual circumstances.
8.04 Construction
To the extent not preempted by ERISA, this Plan will be construed
according to the laws of the state in which the Employer's principal
place of business is located. Words used in the singular will include
the plural, the masculine gender will include the feminine, and vice
versa, whenever appropriate.
8.05 Named Fiduciaries
(a) Allocation of Functions
The authority to control and manage the operation and
administration of the Plan and Trust created by this instrument
will be allocated between the Plan Sponsor, the Trustee, and the
Plan Administrator, all of whom are designated as Named
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Fiduciaries with respect to the Plan and Trust as provided for by
Section 402(a)(2) of ERISA. The Plan Sponsor reserves the right
to allocate the various responsibilities for the present
execution of the functions of the Plan, other than the Trustees'
responsibilities, among its Named Fiduciaries. Any person or
group of persons may serve in more than one fiduciary capacity
with regard to the Plan.
(b) Responsibilities of the Plan Sponsor
The Plan Sponsor, in its capacity as a Named Fiduciary, will have
only the following authority and responsibility:
o To appoint or remove the Plan Administrator and furnish the
Trustee with certified copies of any resolutions of the Plan
Sponsor with regard thereto;
o To appoint and remove the Trustee;
o To appoint a successor Trustee or additional Trustees;
o To communicate information to the Plan Administrator and the
Trustee as needed for the proper performance of the duties of
each;
o To appoint an investment manager (or to refrain from such
appointment), to monitor the performance of the investment
manager so appointed, and to terminate such appointment (more
than one investment manger may be appointed and in office at any
time); and
o To establish and communicate to the Trustee a funding policy for
the Plan.
(c) Limitation on Obligations of Named Fiduciaries
No Named Fiduciary will have authority or responsibility to deal
with matters other than as delegated to it under this Plan or by
operation of law. A Named Fiduciary will not in any event be
liable for breach of fiduciary responsibility or obligation by
another fiduciary (including Named Fiduciaries) if the
responsibility or authority of the act or omission deemed to be a
breach was not within the scope of the Named Fiduciary's
authority or delegated responsibility.
(d) Standard of Care and Skill
The duties of each fiduciary will be performed with the care,
skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of like character and with like objectives.
8.06 Status of Insurer
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The term Insurer refers to any legal reserve life insurance company
licensed to do business in the state within which the Employer maintains
its principal office. The Insurer will file such returns, keep such
records, make such reports and supply such information as required by
applicable law or regulation.
8.07 Adoption and Withdrawal by Other Organizations
(a) Procedure for Adoption
Subject to the provisions of this Section 8.07, any organization
now in existence or hereafter formed or acquired, which is not
already a Participating Employer under this Plan and which is
otherwise legally eligible may, in the future, with the consent
and approval of the Plan Sponsor, by formal Written Resolution
(referred to in this Section as an Adoption Resolution), adopt
the Plan and Trust hereby created for all or any classification
of persons in its employment and thereby, from and after the
specified effective date, become a Participating Employer under
this Plan. Such consent will be effected by and evidenced by a
formal Written Resolution of the Plan Sponsor. The Adoption
Resolution may contain such specific changes and variations in
Plan terms and provisions applicable to the adopting
Participating Employer and its Employees as may be acceptable to
the Plan Sponsor and the Trustee. However, the sole, exclusive
right of any other amendment of whatever kind or extent to the
Plan is reserved to the Plan Sponsor. The Adoption Resolution
will become, as to the adopting organization and its Employees, a
part of this Plan as then amended or thereafter amended. It will
not be necessary for the adopting organization to sign or execute
the original or then amended Plan and Trust Agreement or any
future amendment to the Plan and Trust Agreement. The effective
date of the Plan for the adopting organization will be that
stated in the Adoption Resolution and from and after such
effective date the adopting organization will assume all the
rights, obligations and liabilities as a Participating Employer
under this Plan. The administrative powers of and control
by the Plan Sponsor as provided in the Plan, including the
sole right of amendment or termination of the Plan, of
appointment and removal of the Plan Administrator and the
Trustee, and of appointment and removal of an investment manager
will not be diminished by reason of the participation of the
adopting organization in the Plan.
(b) Withdrawal
Any Participating Employer may withdraw from the Plan at any
time, without affecting the Plan Sponsor or other Participating
Employers not withdrawing, by complying with the provisions of
the Plan. A withdrawing Participating Employer may arrange for
the continuation by itself or its successor of this Plan in
separate forms for its own employees, with such amendments, if
any, as it may deem proper, and may arrange for continuation of
the Plan by merger with an existing plan and transfer of plan
assets. The Plan Sponsor may, it its absolute discretion,
terminate a Participating Employer's participation at any time
when in its judgment the Participating Employer fails or refuses
to discharge its obligations under the Plan.
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(c) Adoption Contingent Upon Initial and Continued Qualifications
The adoption of this Plan by an organization as provided is
hereby made contingent and subject to the condition precedent
that said adopting organization meets all the statutory
requirements for qualified plans, including, but not limited to,
Sections 401(a) and 501(a) of the Internal Revenue Code for its
Employees. If the Plan or the-Trust, in its operation, becomes
disqualified, for any reason, as to the adopting organization and
its Employees, the portion of the Plan assets allocable to them
will be segregated as soon as is administratively feasible,
pending either the prompt (1) requalification of the Plan as to
the organization and its employees to the satisfaction of the
Internal Revenue Service so as not to affect the continued
qualified status thereof as to other Employers, (2) withdrawal of
the organization from this Plan and a continuation by itself or
its successor of its plan separately from this Plan, or by merger
with another existing plan, with a transfer of its said
segregated portion of Plan assets, or (3) termination of the Plan
as to itself and its Employees.
8.08 Employer Contributions
Employer contributions made to the Plan and Trust are made and will be
held for the sole purpose of providing benefits to Participants and
their Beneficiaries.
In no event will any contribution made by the Employer to the Plan and
Trust or income therefrom revert to the Employer except as provided in
Section 7.01(e) or as provided below.
(a) Any contribution made to the Plan and Trust by the Employer
because of a mistake of fact may be returned to the Employer
within one year of such contribution.
(b) Notwithstanding any other provision of the Plan and Trust, if the
Internal Revenue Service determines initially that the Plan, as
adopted by the Employer, does not qualify under applicable
sections of the Code and applicable Treasury Department
Regulations, and the Employer does not wish to amend this Plan
and Trust so that it does qualify, the value of all assets will
be distributed by the Trustee to the Employer within one year
after the date such initial qualification is denied. Thereafter,
the Employer's participation in this Plan and Trust will be
considered rescinded and of no force or effect.
(c) Any contribution made by the Employer will be conditioned on the
deductibility of such contribution and may be refunded to the
Employer, to the extent the contribution is determined not to be
deductible, within one year after such determination is made.
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ARTICLE 9
ADMINISTRATION
9.01 Plan Administrator
The Plan Administrator will have the responsibility for the general
supervision and administration of the Plan and will be a fiduciary
of the Plan. The Employer may, by Written Resolution, appoint one or
more individuals to serve as Plan Administrator. If the Employer does
not appoint an individual or individuals as Plan Administrator, the
Employer will function as Plan Administrator. The Employer may at any
time, with or without cause, remove an individual as Plan Administrator
or substitute another individual therefor.
9.02 Powers and Duties of the Plan Administrator
The Plan Administrator will be charged with and will have delegated to
it the power, duty, authority and discretion to interpret and construe
the provisions of this Plan, to determine its meaning and intent and to
make application thereof to the facts of any individual case; to
determine in its discretion the rights and benefits of Participants or
the eligibility of Employees; to give necessary instructions and
directions to the Trustee and the Insurer as herein provided or as may
be requested by the Trustee and the Insurer from time to time; to
resolve all questions of fact relating to any of the foregoing; and to
generally direct the administration of the Plan according to its terms.
All decisions of the Plan Administrator in matters properly coming
before it according to the terms of this Plan, and all actions taken by
the Plan Administrator in the proper exercise of its administrative
powers, duties and responsibilities, will be final and binding upon all
Employees, Participants and Beneficiaries and upon any person having or
claiming any rights or interest in this Plan. The Employer and the Plan
Administrator will make and receive any reports and information, and
retain any records necessary or appropriate to the administration of
this Plan or to the performance of duties hereunder or to satisfy any
requirements imposed by law. In the performance of its duties, the Plan
Administrator will be entitled to rely on information duly furnished by
any Employee, Participant or Beneficiary or by the Employer or Trustee.
9.03 Actions of the Plan Administrator
The Plan Administrator may adopt such rules as it deems necessary,
desirable or appropriate with respect to the conduct of its affairs and
the administration of the Plan. Whenever any action to be taken in
accordance with the terms of the Plan requires the consent or approval
of the Plan Administrator, or whenever an interpretation is to be made
of the terms of the Plan, the Plan Administrator will act in a uniform
and non-discriminatory manner, treating all Employees and Participants
in similar circumstances in a like manner. If the Plan Administrator is
a group of individuals, all of its decisions will be made by a majority
vote. The Plan Administrator will have the authority to employ one or
more persons to render advice or services with regard to the
responsibilities of the Plan Administrator, including but not limited to
attorneys, actuaries, and accountants. Any persons employed to render
advice
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or services will have no fiduciary responsibility for any ministerial
functions performed with respect to this Plan.
9.04 Reliance on Plan Administrator and Employer
Until the Employer gives notice to the contrary, the Trustee and any
persons employed to render advice or services will be entitled to rely
on the designation of Plan Administrator that has been furnished to
them. In addition, the Trustee and any persons employed to render
advice or services will be fully protected in acting upon the written
directions and instructions of the Plan Administrator made in accordance
with the terms of this Plan. If the Plan Administrator is a group of
individuals, unless otherwise specified, any one of such individuals
will be authorized to sign documents on behalf of the Plan Administrator
and such authorized signatures will be recognized by all person dealing
with the Plan Administrator.
The Trustee and any persons employed to render advice or services may
take cognizance of any rules established by the Plan Administrator and
rely upon them until notified to the contrary. The Trustee and any
persons employed to render advice or services will be fully protected in
taking any action upon any paper or document believed to be genuine and
to have been properly signed and presented by the Plan Administrator,
Employer or any agent of the Plan Administrator acting on behalf of the
Plan Administrator.
9.05 Reports to Participants
The Plan Administrator will report in writing to a Participant his
Accrued Benefit under the Plan and the Vested Percentage of such benefit
when the Participant terminates his employment or requests such a report
in writing from the Plan Administrator. To the extent required by law
or regulation, the Plan Administrator will annually furnish to each
Participant, and to each Beneficiary receiving benefits, a report which
fairly summarizes the Plan's most recent report.
9.06 Bond
The Plan Administrator and other fiduciaries of the Plan will be bonded
to the extent required by ERISA or other applicable law. No additional
bond or other security for the faithful performance of any duties under
this Plan will be required.
9.07 Compensation of Plan Administrator
The Compensation of the Plan Administrator will be left to the
discretion of the Plan Sponsor; no person who is receiving full pay from
the Employer will receive compensation for services as Plan
Administrator. All reasonable and necessary expenses incurred by the
Plan Administrator in supervising and administering the Plan will be
paid from the Plan assets by the Trustee at the direction of the Plan
Administrator to the extent not paid by the Plan Sponsor.
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9.08 Claims Procedure
The Plan Administrator will make all determinations as to the rights of
any Employee, Participant, Beneficiary or other person under the terms
of this Plan. Any Employee, Participant or Beneficiary, or person
claiming under them, may make claim for benefit under this Plan by
filing written notice with the Plan Administrator setting forth the
substance of the claim. If a claim is wholly or partially denied, the
claimant will have the opportunity to appeal the denial upon filing
with the Plan Administrator a written request for review within 60 days
after receipt of notice of denial. In making an appeal the claimant may
examine pertinent Plan documents and may submit issues and comments in
writing. Denial of a claim or a decision on review will be made in
writing by the Plan Administrator delivered to the claimant within 60
days after receipt of the claim or request for review, unless special
circumstances require an extension of time for processing the claim or
review, in which event the Plan Administrator's decision must be made as
soon as possible thereafter but not beyond an additional 60 days. If no
action on an initial claim is taken within 120 days, the claims will be
deemed denied for purposes of permitting the claimant to proceed to the
review stage. The denial of a claim or the decision on review will
specify the reasons for the denial or decision and will make reference
to the pertinent Plan provisions upon which the denial or decision is
based. The denial of a claim will also include a description of any
additional material or information necessary for the claimant to perfect
the claim and an explanation of the claim review procedure herein
described. The Plan Administrator will serve as an agent for service of
legal process with respect to the Plan unless the Employer, through
written resolution, appoints another agent.
If a Participant or Beneficiary is entitled to a distribution from the
Plan, the Participant or Beneficiary will be responsible for
providing the Plan Administrator with his current address. If the Plan
Administrator notifies the Participant or Beneficiary by registered mail
(return receipt requested) at his last known address that he is entitled
to a distribution and also notifies him of the provisions of this
paragraph, and the Participant or Beneficiary fails to claim his
benefits under the Plan or provide his current address to the Plan
Administrator within one year after such notification, the distributable
amount will be forfeited and used to reduce the cost of the Plan. If
the Participant or Beneficiary is subsequently located, such benefit
will be restored.
9.09 Liability of Fiduciaries
Except for a breach of fiduciary responsibility due to gross negligence
or willful misconduct, the Plan Administrator will not incur any
individual liability for any decision, act, or failure to act hereunder.
The Plan Administrator may engage agents to assist it and may engage
legal counsel who may be counsel for the Employer. The Plan
Administrator will not be responsible for any action taken or omitted to
be taken on the advice of counsel.
If there is more than one person serving as a fiduciary in any capacity
(for example, co-Trustees), each will use reasonable care to prevent the
other or others from committing a breach of this Plan. Nothing
contained in this Section will preclude any agreement
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allocating specific responsibilities or obligations among the
co-fiduciaries provided that the agreement does not violate any of the
terms and provisions of this Plan. In those instances where any duties
have been allocated between co-fiduciaries, a fiduciary will not be
liable for any loss resulting to the Plan arising from any act or
omission on the part of another co-fiduciary to whom responsibilities or
obligations have been allocated except under the following
circumstances:
o If he participates knowingly in, or knowingly undertakes to
conceal, an act or omission of a co-fiduciary knowing the act or
omission is a breach; or
o If by his failure to comply with his specific responsibilities
which give rise to his status as a fiduciary, he has enabled the
other fiduciary to commit a breach; or
o If he has knowledge of a breach by a co-fiduciary, unless he
makes reasonable efforts under the circumstances to remedy the
breach.
9.10 Expenses of Administration
The Employer does not and will not guarantee the Plan assets against
loss. The Employer may in its sole discretion, but will not be
obligated to, pay the ordinary expenses of establishing the Plan,
including the fees of consultants, accountants and attorneys in
connection therewith. The Employer may, in its sole discretion (but
will not be obligated to), pay other costs and expenses of administering
the Plan, the taxes imposed upon the Plan, if any, and the fees, charges
or commissions with respect to the purchase and sale of Plan assets.
Unless paid by the Employer, such costs and expenses, taxes (if any),
and fees, charges and commissions will be a charge upon Plan assets and
deducted by the Trustee.
9.11 Distribution Authority
If any person entitled to receive payment under this Plan is a minor,
declared incompetent or is under other legal disability, the Plan
Administrator may, in its sole discretion, direct the Trustee to:
o Distribute directly to the person entitled to the payment;
o Distribute to the legal guardian or, if none, to a parent of the
person entitled to payment or to a responsible adult with whom
the person entitled to payment maintains his residence;
o Distribute to a custodian for the person entitled to payment
under the Uniform Gifts to Minors Act if permitted by the laws of
the state in which the person entitled to payment resides; or
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o Withhold distribution of the amount payable until a court of
competent jurisdiction determines the rights of the parties
thereto or appoints a guardian of the estate of the person
entitled to payment.
If there is any dispute, controversy or disagreement between any
Beneficiary or person and any other person as to who is entitled to
receive the benefits payable under this Plan, or if the Plan
Administrator is uncertain as to who is entitled to receive benefits, or
if the Plan Administrator is unable to locate the person who is entitled
to benefits, the Plan Administrator may with acquittance interplead the
funds into a court of competent jurisdiction in the judicial district in
which the Employer maintains its principal place of business and, upon
depositing the funds with the clerk of the court, be released from any
further responsibility for the payment of the benefits. If it is
necessary for the Plan Administrator to retain legal counsel or incur
any expense in determining who is entitled to receive the benefits,
whether or not it is necessary to institute court action, the Plan
Administrator will be entitled to reimbursement from the benefits for
the amount of its reasonable costs, expenses and attorneys' fees
incurred.
ARTICLE 10
AMENDMENT OR TERMINATION OF PLAN
10.01 Right of Plan Sponsor to Amend or Terminate
The Plan Sponsor reserves the right to alter, amend, revoke or terminate
this Plan. No amendment will deprive any Participant or Beneficiary of
any vested right nor will it reduce the present value (determined upon
an actuarial equivalent basis) of any Accrued Benefit to which he is
then entitled with respect to Employer contributions previously made,
except as may be required to maintain the Plan as a qualified plan under
the Code. No amendment will change the duties or responsibilities of
the Trustee without its express written consent thereto.
A plan amendment which has the effect of (a) eliminating or reducing an
early retirement benefit or a retirement-type subsidy, or (b)
eliminating an optional benefit form, will, with respect to benefits
attributable to service before the amendment be treated as reducing
Accrued Benefits. In the case of a retirement-type subsidy, the
preceding sentence will apply only with respect to a Participant who
satisfies (either before or after the amendment) the pre-amendment
conditions for the subsidy. In general, a retirement-type subsidy is a
subsidy that continues after retirement but does not include a
disability retirement benefit, a medical benefit, a social security
supplement, a pre-retirement death benefit, or a plant shutdown benefit
(that does not continue after retirement).
A minimum Accrued Benefit value will apply if this Plan is or becomes a
successor to a profit sharing plan, a defined contribution pension plan,
a target benefit plan, or a defined benefit pension plan which was fully
insured, or any plan under which the accrued benefit
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of a Participant was determined as a lump sum or account balance. The
actuarial equivalent value of a Participant's Accrued Benefit will not
be less than the actuarial equivalent value of his Accrued Benefit on
the Effective Date of the Plan.
10.02 Allocation of Assets Upon Termination of Plan
If this Plan is revoked or terminated (in whole or in part) or if
contributions are completely discontinued the Accounts of all affected
Participants will become non-forfeitable. The Employer will then
arrange for allocation of all assets among Participants so affected by
the total or partial termination in accordance with the requirements of
all applicable law and the regulations and requirements of the Internal
Revenue Service. All allocated amounts will be retained in the Plan to
the credit of the individual Participants until distribution as directed
by the Employer. Distribution to Participants may be in the form of
cash or other Plan assets or partly in each.
10.03 Exclusive Benefit
At no time will any part of the principal or income of the Plan assets
be used or diverted for purposes other than the exclusive benefit of
Participants in the Plan and their Beneficiaries, nor may any portion of
the Plan assets revert to the Employer except as provided in Sections
7.01(e) and 8.08.
10.04 Failure to Qualify
Notwithstanding any of the foregoing provisions, if this Plan, upon
adoption by the Employer, is submitted to the Internal Revenue Service
which then determines that the Plan as initially adopted by the Employer
is not a qualified plan under the Code, the Employer may elect to
terminate this Plan by giving written notice thereof. Such termination
will have the same effect as if the Plan were never adopted, all
policies and contracts will be cancelled, and all contributions, to the
extent recoverable from the Trustee, will be returned to their source,
if any amendment to this Plan is submitted to the Internal Revenue
Service within the period allowed under Code Section 401(b) which then
determines that the Plan as amended is not a qualified plan under the
Code, the Employer may cancel or modify any or all provisions of the
amendment retroactive to the effective date of the amendment in order to
maintain the qualified status of the Plan, whereupon written notice
thereof will be furnished to all affected Employees, Participants and
Beneficiaries.
10.05 Mergers, Consolidations or Transfers of Plan Assets
In the event this Plan is merged or consolidated with another plan which
is qualified under Code Sections 401(a) (and 501(a) if applicable), or
in the event of a transfer of the assets or liabilities of this Plan to
another plan which is qualified under Code Sections 401(a) (and 501(a)
if applicable), the benefit which each Participant would be entitled to
receive under the successor plan or other plan if it were terminated
immediately after the merger, consolidation or transfer will be equal to
or greater than the benefit which the Participant would have received
immediately before the merger, consolidation or transfer if this Plan
had then terminated.
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Any transfer of assets and/or liabilities to (or from) this Plan from
(or to) another plan qualified under Code Sections 401(a) (and 501(a) if
applicable) will be evidenced by a Written Resolution by the Plan
Sponsor of each affected plan which specifically authorizes such
transfer of assets and/or liabilities.
Any transfer of assets to this Plan will be allowed under the provisions
of this Section if such transferred assets are not required to be paid
in the form of a qualified joint & survivor annuity or a qualified
survivor annuity in accordance with Code Section 401(a)(11).
10.06 Effect of Plan Amendment on Vesting Schedule
No amendment to the Vesting Schedule will deprive a Participant of his
nonforfeitable right to his Vested Accrued Benefit as of the date of the
amendment. Further, if the Vesting Schedule of the Plan is amended, or
if the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's non-forfeitable percentage, each
Participant with at least 3 Years of Vesting Service as of the last day
of the election period described below may elect, within a reasonable
period after the adoption of the amendment, to have his Vested
Percentage computed under the Plan without regard to such amendment.
The period during which such election may be made will commence with the
date the amendment is adopted and will end 60 days after the latest of:
(a) the date the amendment is adopted;
(b) the date the amendment becomes effective; or
(c) the date the Participant is issued written notice of the
amendment by the Employer.
ARTICLE 11
TRUSTEE AND TRUST FUND
11.01 Acceptance of Trust
The Trustee, by signing this Agreement, accepts this Trust and agrees to
perform the duties of the Trustee in accordance with the terms and
conditions set forth herein.
11.02 Trust Fund
(a) Purpose and Nature
The Trustee will establish and maintain a Trust Fund for purposes
of providing a means of accumulating the assets necessary to
provide the benefits which become payable under the Plan. The
Trustee will receive, hold and invest all contributions made by
the Employer, any Participating Employers, and the Participants,
including the investment earnings thereon. The Trust Fund
arising from such contributions and
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earnings will consist of all assets held by the Trustee under the
Plan and Trust. All benefits payable under the Plan will be
paid by the Trustee from the Trust Fund.
Any person having any claim under the Plan will look solely to
the assets of the Trust Fund for satisfaction. In no event will
the Plan Administrator, the Employer, any Employees, any officer
of the Employer or any agents of the Employer or the Plan
Administrator be liable in their individual capacities to any
person whomsoever, under the provisions of this Plan and Trust,
except as provided by law.
The Trust Fund will be used and applied only in accordance with
the provisions of the Plan and Trust, to provide the benefits
thereof, and no part of the corpus or income of the Trust Fund
will be used for, or diverted to, purposes other than for the
exclusive benefit of the Participants or their Beneficiaries
entitled to benefits under the Plan, except to the extent
specifically provided elsewhere herein.
(b) Investments
The Trustee will invest the Trust Fund in accordance with the
investment policy for the Trust Fund considering the fiduciary
requirements of law, the objectives of the Plan, and the
liquidity needs of the Plan.
(c) Investment Policy
The Plan Sponsor (or the Plan Administrator or an Investment
Committee appointed by the Plan Sponsor) will have the right to
periodically provide the Trustee with a written investment policy
which, in consideration of the needs of the Plan, sets forth the
investment objectives, policies, and guidelines which the Plan
Sponsor judges to be appropriate and prudent.
If a written investment policy is not so provided, then the
Trustee will set forth the investment policy for the Plan. In
doing so, the Trustee may consult with the Plan Sponsor (or the
Plan Administrator or an Investment Committee appointed by the
Plan Sponsor) to secure information with regard to Plan Sponsor
investment objectives and general investment policy.
(d) Operation of Trust Fund
The Trust Fund will be maintained in accordance with the
accounting requirements of the Plan. No Participant will have
any right to any specific asset or any specific portion of the
Trust Fund prior to distribution of benefits. Withdrawals from
the Trust Fund will be made to provide benefits to Participants
and Beneficiaries in the amounts specified by the Plan, and to
pay expenses authorized by the Plan Administrator.
(e) Plan Sponsor Direction of Investment
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The Plan Sponsor will have the right to direct the Trustee with
respect to the investment and reinvestment of assets comprising
the Trust Fund. The Trustee and the Plan Sponsor (or the Plan
Administrator or an Investment Committee appointed by the Plan
Sponsor) will execute a letter of agreement as a part of this
Plan containing such conditions, limitations and other provisions
they deem appropriate before the Trustee will follow any Plan
Sponsor direction with respect to the investment or reinvestment
of any part of the Trust Fund.
11.03 Receipt of Contributions
The Trustee will be accountable to the Employer for the funds
contributed to it, but will have no duty to see that the contributions
received comply with the provisions of the Plan. The Trustee will not
be obligated to collect any contributions from the Employer or the
Participants.
11.04 Powers of the Trustee
Subject to the provisions and limitations contained elsewhere in this
Plan, the Trustee will have full discretion and authority with regard to
the investment of the Trust Fund. The Trustee is authorized and
empowered, but not by way of limitation, with the following powers,
rights and duties:
(a) To invest any part or all of the Trust Fund in any common or
preferred stocks, open-end or closed-end mutual funds, United
States retirement plan bonds, corporate bonds, debentures,
convertible debentures, commercial paper, U.S. Treasury bills,
book entry deposits with the United States Federal Reserve Bank
or System, Master Notes or similar arrangements sponsored by the
Trustee or any other financial institution as permitted by law,
improved or unimproved real estate situated in the United States,
mortgages, notes or other property of any kind, real or personal,
as a prudent man would so invest under like circumstances with
due regard for the purposes of this Plan;
(b) To maintain any part of the assets of the Trust Fund in cash, or
in demand or short-term time deposits bearing a reasonable rate
of interest (including demand or short-term time deposits of or
with the Trustee), or in a short-term investment fund or in other
cash equivalents having ready marketability, including, but not
limited to, U.S. Treasury Bills, commercial paper, certificates
of deposit (including such certificates of deposit of or with the
Trustee), and similar types of short-term securities, as may be
deemed necessary by the Trustee in its sole discretion;
(c) To manage, sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair, insure,
lease for any term even though commencing in the future or
extending beyond the term of the Trust, and otherwise deal with
all property, real or personal, in such manner, for such
considerations and on such terms and conditions as the Trustee
will decide;
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(d) To credit and distribute the Trust as directed by the Plan
Administrator or any agent of the Plan Administrator. The
Trustee will not be obliged to inquire as to whether any payee or
distributee is entitled to any payment or whether the
distribution is proper or within the terms of the Plan, or as to
the manner of making any payment or distribution. The Trustee
will be accountable only to the Plan Administrator for any
payment or distribution made by it in good faith on the order or
direction of the Plan Administrator or any agent of the Plan
Administrator;
(e) To borrow money, assume indebtedness, extend mortgages and
encumber by mortgage or pledge;
(f) To compromise, contest, arbitrate, or abandon claims and demands,
in its discretion;
(g) To have with respect to the Trust all of the rights of an
individual owner, including the power to give proxies, to
participate in any voting trusts, mergers, consolidations or
liquidations, and to exercise or sell stock subscriptions or
conversion rights;
(h) To hold any securities or other property in the name of the
Trustee or its nominee, or in another form as it may deem best,
with or without disclosing the trust relationship;
(i) To perform any and all other acts in its judgment necessary or
appropriate for the proper and advantageous management,
investment and distribution of the Trust;
(j) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery of the funds or property until final
adjudication is made by a court of competent jurisdiction;
(k) To file all tax forms or returns required of the Trustee;
(l) To begin, maintain or defend any litigation necessary in
connection with the administration of the Plan, except that the
Trustee will not be obligated to or required to do so unless
indemnified to its satisfaction; and
(m) To keep any or all of the Trust property at any place or places
within the United States or abroad, or with a depository or
custodian at such place or places; provided, however, that the
Trustee may not maintain the indicia of ownership of outside the
jurisdiction of the District Courts of the United expressly
authorized in U.S. Treasury or U.S. Department of Labor
regulations.
11.05 Investment in Common or Collective Trust Funds
Notwithstanding the provisions of Section 11.04, the Plan Sponsor
specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any common or collective trust fund
which at the time of the investment provides for the pooling
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of the assets of plans qualified under Code Section 401(a). The
authorization applies only if such common or collective trust fund: (a)
is exempt from taxation under Code Section 584 or 501(a); (b) if exempt
under Code Section 501(a), expressly limits participation to pension and
profit sharing trusts which are exempt under Code Section 501(a) by
reason of qualifying under Code Section 401(a); (c) prohibits that part
of its corpus or income which equitably belongs to any participating
trust from being used for or diverted to any purposes other than for the
exclusive benefit of the Employees or their Beneficiaries who are
entitled to benefits under such participating trust; (d) prohibits
assignment by participating trust of any part of its equity or interest
in the group trust; and (e) the sponsor of the group trust created or
organized the group trust in the United States and maintains the group
trust at all times as a domestic trust in the United States. The
provisions of the common or collective trust fund agreement, as amended
by the Trustee from time to time, are by this reference incorporated
within this Plan and Trust. The provisions of the common or collective
trust fund will govern any investment of Plan assets in that fund. This
provision constitutes the express permission required by Section
408(b)(8) of ERISA.
11.06 Investment in Insurance Company Contracts
The Trustee may invest any portion of the Trust Fund in a deposit
administration, guaranteed investment or similar type of investment
contract (hereinafter referred to as Contract); provided, however, that
no such Contract may provide for an optional form of benefit which would
not be provided for under the provisions hereof. The Trustee will be
the complete and absolute owner of Contracts held in the Trust Fund.
The Trustee may convert from one form to another any Contract held in
the Trust Fund; designate any mode of settlement; sell or assign any
Contract held in the Trust Fund; surrender for cash any Contract held in
the Trust Fund; agree with the insurance company issuing any Contract to
any release, reduction, modification or amendment thereof; and, without
limitation of any of the foregoing, exercise any and all of the rights,
options and privileges that belong to the absolute owner of any Contract
held in the Trust Fund that are granted by the terms of any such
Contract or by the terms of this Agreement.
The Trustee will hold in the Trust Fund the proceeds of any sale,
assignment or surrender of any Contract held in the Trust Fund and any
and all dividends and other payments of any kind received in respect to
any Contract held in the Trust Fund.
No insurance company which may issue any Contract based upon the
application of the Trustee will be responsible for the validity of this
Plan, be required to look into the terms of this Plan, be required to
question any act of the Plan Administrator or the Trustee hereunder or
be required to verify that any action of the Trustee is authorized by
this Plan. If a conflict should arise between the terms of the Plan and
any such Contract, the terms of the Plan will govern.
11.07 Fees and Expenses from Fund
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The Trustee will be entitled to receive reasonable annual compensation
as may be mutually agreed upon from time to time between the Plan
Sponsor and the Trustee. The Trustee will pay all expenses reasonably
incurred by it in its administration and investment of the Trust Fund
from the Trust Fund unless the Plan Sponsor pays the expenses. No
person who is receiving full pay from the Plan Sponsor will receive
compensation for services as Trustee.
11.08 Records and Accounting
The Trustee will keep full and complete records of the administration of
the Trust Fund which the Employer and the Plan Administrator may examine
at any reasonable time. As soon as practical after the end of each Plan
Year and at such other reasonable times as the Employer may direct, the
Trustee will prepare and deliver to the Employer and the Plan
Administrator an accounting of the administration of the Trust,
including a report on the fair market value of all assets of the Trust
Fund.
11.09 Distribution Directions
If no one claims a payment or distribution made from the Trust, the
Trustee will notify the Plan Administrator and will dispose of the
payment in accordance with the subsequent direction of the Plan
Administrator.
11.10 Third Party
No person dealing with the Trustee will be obliged to see to the proper
application of any money paid or property delivered to the Trustee, or
to inquire whether the Trustee has acted pursuant to any of the terms of
the Plan. Each person dealing with the Trustee may act upon any notice,
request or representation in writing by the Trustee, or by the Trustee's
duly authorized agent, and will not be liable to any person whomsoever
in so doing. The certification of the Trustee that it is acting in
accordance with the Plan will be conclusive in favor of any person
relying on the certification.
11.11 Professional Agents, Affiliates and Arbitration
(a) Professional Agents
The Trustee may employ and pay from the Trust Fund reasonable
compensation to agents, attorneys, accountants and other persons
to advise the Trustee as in its opinion may be necessary. The
Trustee may delegate to any agent, attorney, accountant or other
person selected by it any non-Trustee power or duty vested in it
by the Plan; the Trustee may act or refrain from acting on the
advice or opinion of any agent, attorney, accountant or other
person so selected.
(b) Use of Affiliates
(1) Charles Schwab Trust Company (CSTC) is authorized to
contract or make other arrangements with The Charles
Schwab Corporation, Charles Schwab & Co., Inc., their
affiliates and subsidiaries, successors and assigns
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(collectively referred to as Schwab), and any other
organizations affiliated with or subsidiaries of CSTC or
related entities, for the provision of services to the
Trust Fund or Plan, except where such arrangements are
prohibited by law or regulation.
(2) CSTC is authorized to place securities orders, settle
securities trades, hold securities in custody and other
related activities on behalf of the Trust Fund through or
by Schwab whenever possible unless the Authorized Person
specifically instructs the use of another Broker. Trades
and related activities conducted through the Broker will
be subject to fees and commissions established by the
Broker, which may be paid from the Trust Fund or netted
form the proceeds of trades.
(3) Trades will not be executed through Schwab unless the Plan
Administrator and the Authorized Person have received
disclosure concerning the relationship of Schwab to CSTC,
and the fees and commissions which may be paid to Schwab,
CSTC and any affiliate or subsidiary of any of them as a
result of using Schwab to execute trades or for other
services.
(4) CSTC is authorized to disclose such information as is
necessary to the operation and administration of the Trust
Fund to Schwab and to such other persons or organizations
that CSTC determines have a legitimate business purpose
for obtaining such information.
(5) At the direction of the Authorized Person, CSTC may
purchase shares of regulated investment companies (or
other investment vehicles) advised by Schwab or CSTC
("Schwab Funds"), except to the extent that such
investment is prohibited by law or regulation. Schwab
Fund shares may not be purchased for or held by the Trust
Fund unless the Plan Administrator has received disclosure
concerning the relationship of Schwab or CSTC to the
Schwab Funds, and any fees which may be paid to such
entities.
(6) To the extent permitted under applicable laws, CSTC may
invest in deposits, long and short term debt instruments,
stocks and other securities, including those of CSTC or
Schwab.
(7) CSTC and Schwab are authorized to tape record
conversations between CSTC or Schwab and persons acting on
behalf of the Plan or a Participant in order to verify
data on transactions.
(c) Arbitration
Any dispute under this agreement will be resolved by submission
of the issue to a member of the American Arbitration Association
who is chosen by the Employer and
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the Trustee. If the Employer and the Trustee cannot agree on
such a choice, each will nominate a member of the American
Arbitration Association, and the two nominees will then select an
arbitrator. Expenses of the arbitration will be paid as decided
by the arbitrator.
11.12 Valuation of Trust
The Trustee will value the Trust Fund as of the last day of each Plan
Year to determine the fair market value of the Trust, and the Trustee
will value the Trust Fund on such other date(s) as may be necessary to
carry out the provisions of the Plan.
11.13 Liability of Trustee
The Trustee will be liable only for the safeguarding and administration
of the assets of this Trust Fund in accordance with the provisions
hereof and any amendments hereto and no other duties or responsibilities
will be implied. The Trustee will not be required to pay any interest
on funds paid to or deposited with it or to its credit under the
provisions of this Trust, unless pursuant to a written agreement between
the Employer and the Trustee. The Trustee will not be responsible for
the adequacy of the Trust Fund to meet and discharge any liabilities
under the Plan and will not be required to make any payment of any
nature except from funds actually received as Trustee. The Trustee may
consult with legal counsel (who may be legal counsel for the Employer)
selected by the Trustee and will be fully protected for any action
taken, suffered or omitted in good faith in accordance with the opinion
of said legal counsel. It will not be the duty of the Trustee to
determine the identity or mailing address of any Participant or any
other person entitled to benefits hereunder, such identity and mailing
addresses to be furnished by the Employer, the Plan Administrator or an
agent of the Plan Administrator. The Trustee will be under no liability
in making payments in accordance with the terms of this Plan and the
certification of the Plan Administrator or an agent of the Plan
Administrator who has been granted such powers by the Plan
Administrator.
Except to the extent required by any applicable law, no bond or other
security for the faithful performance of duty hereunder will be required
of the Trustee.
11.14 Removal or Resignation and Successor Trustee
A Trustee may resign at any time upon giving 30 days prior written
notice to the Plan Sponsor or, with the consent of the Plan Sponsor, a
Trustee may resign with less than 30 days prior written notice.
The Plan Sponsor may remove a Trustee by giving at least 30 days prior
written notice to the Trustee.
Upon the removal or resignation of a Trustee, the Plan Sponsor will
appoint and designate a successor Trustee which will be one or more
individual successor Trustees or a corporate Trustee organized under the
laws of the United States or of any state thereof with authority
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to accept and execute trusts. Any successor Trustee must accept and
acknowledge in writing its appointment as a successor Trustee before it
can act in such capacity.
Title to all property and records or true copies of such records
necessary to the current operation of the Trust Fund held by the Trustee
hereunder will vest in any successor Trustee acting pursuant to the
provisions hereof, without the execution or filing of any further
instrument. Any resigning or removed Trustee will execute all
instruments and do all acts necessary to vest such title in any
successor Trustee of record. Each successor Trustee will have,
exercise and enjoy all the powers, both discretionary and ministerial,
herein conferred upon his predecessor. No successor Trustee will be
obligated to examine the accounts, records and acts of any previous
Trustee or Trustees, and each successor Trustee in no way or manner will
be responsible for any action or omission to act on the part of any
previous Trustee.
Any corporation which results from any merger, consolidation or purchase
to which the Trustee may be a party, or which succeeds to the trust
business of the Trustee, or to which substantially all the trust assets
of the Trustee may be transferred, will be the successor to the Trustee
hereunder without any further act or formality with like effect as if
the successor Trustee had originally been named Trustee herein; and in
any such event it will not be necessary for the Trustee or any successor
Trustee to give notice thereof to any person, and any requirement,
statutory or otherwise, that notice will be given is hereby waived.
11.15 Appointment of Investment Manager
One or more Investment Managers may be appointed by the Plan Sponsor (or
the Plan Administrator) to exercise full investment management authority
with respect to all or a portion of the Trust assets. Authorized
payment of the fees and expenses of the Investment Manager(s) may be
made from the Trust assets. For purposes of this agreement, any
Investment Manager so appointed will, during the period of his
appointment, possess fully and absolutely those powers, rights and
duties of the Trustee (to the extent delegated by the Plan Sponsor or
the Plan Administrator) with respect to the investment or reinvestment
of that portion of the Trust assets over which the Investment Manager
has investment management authority. The Investment Manager must be one
of the following:
(a) Registered as an investment advisor under the Investment Advisors
Act of 1940;
(b) A bank, as defined in the Investment Advisors Act of 1940; or
(b) An insurance company qualified to manage, acquire, or dispose of
such Plan assets under the laws of more than one state. Any
Investment Manager will acknowledge in writing to the Plan
Sponsor or the Plan Administrator and to the Trustee that he or
it is a fiduciary with respect to the Plan. During any period of
time when the Investment Manager is so appointed and serving, and
with
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respect to those assets in the Plan over which the Investment
Manager exercises investment management authority, the Trustee's
responsibility will be limited to holding such assets as a
custodian, providing accounting services, disbursing benefits as
authorized, and executing such investment instructions only as
directed by the Investment Manager. The Trustee will not be
responsible for any acts or omissions of the Investment Manager.
Any certificates or other instruments duly signed by the
Investment Manager (or the authorized representative of the
Investment Manager), purporting to evidence any instruction,
direction or order of the Investment Manager with respect to the
investment of those assets of the Plan over which the Investment
Manager has investment management authority, will be accepted by
the Trustee as conclusive proof thereof. The Trustee will also
be fully protected in acting in good faith upon any notice,
instruction, direction, order, certificate, opinion, letter,
telegram or other document believed by the Trustee to be genuine
and from the Investment Manager (or the authorized representative
of the Investment Manager). The Trustee will not be liable for
any action taken or omitted by the Investment Manager or for any
mistakes of judgment or other action made, taken or omitted by
the Trustee in good faith upon direction of the Investment
Manager.
11.16 Loans to Participants
The Plan Administrator may authorize the Trustee to lend on a
nondiscriminatory basis to a Participant an amount from the Plan as
specified herein; provided, a reasonable rate of interest will be
charged on the loan, the loan will be secured by 50% of the
Participant's Vested Accrued Benefit in the Plan, and Provision for
repayment will be made. All loans will be subject to the approval of
the Plan Administrator which will investigate each application for a
loan. The Plan Administrator will prescribe such rules as may be
necessary to provide guidelines as to under which circumstances and for
what purpose loans will be permitted.
The Plan Administrator will prescribe guidelines as to which Account or
Accounts loans may be made from. Each loan made to a Participant will
be made from the Participant's allowable Account or Accounts. All
interest and principal repayments will be credited to the Participant's
Account from which the loan was made.
In addition to any additional rules and regulations as the Plan
Administrator may adopt all loans will comply with the following terms
and conditions:
(a) Only Active and Inactive Participants will be eligible to apply
for a loan. Each application for a loan will be made in writing
to the Plan Administrator, whose action thereon will be final.
(b) Each loan will be made against collateral being the
assignment of 50% of the borrower's entire right, title and
interest in and to the Trust Fund, supported by the borrower's
promissory note for the amount of the loan, including interest
payable to the order to the Trustee, and any additional security
deemed necessary to adequately
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secure the Loan. If a person fails to make a required payment
within 90 days of the due date set forth in the loan agreement,
the loan will be in default. There will be no foreclosure
against a Participant's Accrued Benefit prior to his becoming
entitled to a distribution of benefits in accordance with the
terms of this Plan. All loans will become due and payable in
full upon the termination of a Participant's employment. If a
Participant with an outstanding loan terminates employment and
becomes entitled to a distribution of benefits from the Plan,
then the outstanding balance of the unpaid loan plus any accrued
interest thereon will be deducted from the amount of otherwise
distributable benefits and the Participant's promissory note will
be distributed to the Participant.
(c) The principal repayment will be amortized over the fixed life of
a loan with installments of principal and interest to be paid not
less often than quarterly. The period of repayment for each loan
will be arrived at by mutual agreement between the Plan
Administrator and the borrower, but in no event will such period
exceed a reasonable period of time. The period of repayment will
in no event exceed 5 years unless the loan is to be used to
acquire, construct, reconstruct or substantially rehabilitate any
dwelling unit which, within a reasonable period of time, is to be
used as a principal residence of the Participant or a member of
the family (spouse, brother, sister, ancestor, or lineal
descendants) of the Participant.
(d) The minimum amount of any loan is equal to $1,000.
(e) The maximum amount of any loan is such that when the amount of
the loan is added to the outstanding balance of all other loans
made to the Participant from the Plan (and any other plans
maintained by the Employer or any Related Employer) the total
does not exceed the lesser of:
(1) 50% of the Participant's Vested Accrued Benefit; or
(2) $50,000, reduced by the amount, if any, of the highest
balance of all outstanding loans to the Participant during
the one-year period ending on the day prior to the day on
which the loan in question is made.
(f) Each loan will bear interest at a rate equal to the prime rate
which is published in the Wall Street Journal as being
representative of the base rate on corporate loans at large U.S.
money center commercial banks on the last day of the month prior
to the date on which the loan is made, plus 1 percentage point.
(g) A Participant may have no more than two loans outstanding at any
time.
(h) Each loan will require the Participant (and, if the Participant
is married, the Participant's spouse) to consent to the loan and
the possible reduction in the
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Participant's Accrued Benefit. Such consent must be made in
writing within the 90-day period before the making of the loan.
(i) No loan will be permitted to a Participant in a year in which he
is either an Owner-Employee or Shareholder-Employee as defined in
Code Section 4975(d).
IN WITNESS WHEREOF this instrument has been executed by the duly authorized
and empowered officers of the Employer, this 28th day of December, 1995.
HOLLYWOOD THEATERS, INC.
By: /s/ Jeffrey L. Lightfoot
-----------------------------------
Jeffrey L. Lightfoot
Chief Financial Officer
The Trustee agrees to continue to serve as Trustee under the terms of this
instrument.
Charles Schwab Trust Company
By: /s/ Charles Schwab Trust Company
-------------------------------------
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RESOLUTION AUTHORIZING RESTATEMENT OF THE
HOLLYWOOD THEATERS, INC.
401(k) SAVINGS PLAN
RESOLVED, that the Trans Texas Amusements, Inc. Retirement Savings Plan and
Trust (the "Plan") be restated effective July 10, 1995 by Hollywood Theaters,
Inc., to continue to provide benefits for its permanent employees to the extent
and in the manner set out in the Plan, as restated; and
RESOLVED FURTHER, that the Plan be renamed to be the Hollywood Theaters, Inc.
401(k) Savings Plan; and
RESOLVED FURTHER, that pursuant to the terms of the Hollywood Theaters, Inc.
401(k) Savings Plan, Hollywood Theaters, Inc. is hereby appointed to direct the
administration of the Plan according to its terms; and
RESOLVED FURTHER, that the officers of Hollywood Theaters, Inc. be authorized
on its behalf to execute said amendment, together with any and all other
instruments of any kind or character required and to take such further action
as may be necessary to maintain said Plan.
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I, Jeffrey L. Lightfoot, Secretary of Hollywood Theaters, Inc., do hereby
certify that the above and foregoing is a true and correct copy of an original
resolution unanimously adopted by the Directors of Hollywood Theaters, Inc. at
their meeting held on the 24th day of January, 1996.
/s/ Jeffrey L. Lightfoot
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Secretary
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FIRST AMENDMENT TO THE
HOLLYWOOD THEATERS, INC. 401(k) SAVINGS PLAN
This Amendment, effective October 31, 1996, is made by Hollywood Theaters,
Inc., (hereinafter referred to as the "Employer").
WHEREAS, the Employer has previously established the Hollywood Theaters, Inc.
401(k) Savings Plan for the benefit of eligible employees and their
beneficiaries; and
WHEREAS, the Employer desires to enhance the benefits of the Plan provided to
employees who are part of a business acquired by the Employer, and to provide
for earlier participation in the Plan on the part of salaried employees;
NOW, THEREFORE, pursuant to Plan Section 10.01, the following amendment is
hereby made and shall be effective October 31, 1996:
The second paragraph of Section 1.13 is amended to read:
Effective October 31, 1996, Predecessor Employer means any business
entity, the stock, assets or business of which is acquired by the
Employer, whether by merger, consolidation, purchase of assets or
otherwise. Up to one Year of Service with a Predecessor Employer will
be included as a Year of Eligibility Service with the Employer.
Notwithstanding the foregoing, all Service with Trans Texas Amusements,
Inc. will be included as Service with the Employer for all purposes
under this Plan.
The last paragraph of Section 1.42(b) is amended to read as follows:
All of an Employee's Years of Eligibility Service are taken into account
in determining his eligibility to participate, including any Years of
Eligibility Service taken into account pursuant to Section 1.13.
The first paragraph of Section 2.01 is replaces with the following:
An Employee who is classified by the Employer as a "Salaried" Employee
(i.e., an Employee who is compensated by his Employer in fixed amounts
at regular intervals without regard to the number of hours worked or
other than on an hourly-rated basis) will become eligible to participate
in the Plan on the Entry Date which coincides with or next follows the
attainment of age 21 and the completion of 90 days of employment.
Notwithstanding the foregoing, a Salaried Employee who has completed 90
days of employment with a Predecessor Employer will become eligible to
participate in the Plan immediately upon his commencement of employment
with the Employer.
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An Employee who is classified by the Employer as an "Hourly" Employee
(i.e., all Employees other than those classified as Salaried Employees)
will become eligible to participate in the Plan on the Entry Date which
coincides with or next follows the attainment of age 21 and the
completion of one Year of Eligibility Service. Notwithstanding the
foregoing, an Hourly Employee who has completed one Year of Eligibility
Service with a Predecessor Employer will become eligible to participate
in the Plan immediately upon his commencement of employment with the
Employer.
IN WITNESS WHEREOF, the Employer, Hollywood Theaters, Inc., has caused this
instrument to be executed as of the date specified below.
Employer:
Hollywood Theaters, Inc.
Dated: October 31, 1996 By: /s/ James R. Featherstone
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SECOND AMENDMENT TO THE
HOLLYWOOD THEATERS, INC. 401(k) SAVINGS PLAN
This Amendment, effective, is made by Hollywood Theaters, Inc., (hereinafter
referred to as the "Employer").
WHEREAS, the Employer has previously established the Hollywood Theaters, Inc.
401(k) Savings Plan for the benefit of eligible employees and their
beneficiaries; and
WHEREAS, the Employer wishes to enhance the benefit provided by the Plan to
long term Employees who have attained age 59 1/2;
NOW, THEREFORE, pursuant to Plan Section 10.01, the following amendment is
hereby made and shall be effective January 1, 1997:
Plan Section 3.02(d), pertaining to the Employer Matching Account, is amended
in its entirety to read:
Withdrawals
A Participant who is 100% vested in his Employer Matching Account and
has attained age 59 1/2 may withdraw all or any portion of his Employer
Matching Account subject to the limitations of this Section. A
Participant who is less than 100% vested in his Employer Matching
Account or has not attained age 59 1/2 may not withdraw any portion of
his Employer Matching Account prior to the time when benefits otherwise
become payable in accordance with the provisions of Article 5.
Plan Section 3.03(e), pertaining to the Profit Sharing Account is amended in
its entirety to read:
Withdrawals
A Participant who is 100% vested in his Profit Sharing Account and has
attained age 59 1/2 may withdraw all or any portion of his Profit
Sharing Account subject to the limitations of this Section. A
Participant who is less than 100% vested in his Profit Sharing Account
or has not attained age 59 1/2 may not withdraw any portion of his
Profit Sharing Account prior to the time when benefits otherwise become
payable in accordance with the provisions of Article 5.
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IN WITNESS WHEREOF, the Employer, Hollywood Theaters, Inc., has caused
this instrument to be executed as of the date specified below.
EMPLOYER:
Hollywood Theaters, Inc.
Dated: January 1, 1997 By: /s/ James R. Featherstone
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