1
Exhibit 10.15
BOSTON SCIENTIFIC CORPORATION
401(k) SAVINGS PLAN
(Amended and Restated, Effective January 1, 1996)
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TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION 5
1.1. Qualification and Purpose. 5
1.2. Merger of Plans 5
1.3. Defined Terms. 5
ARTICLE 2. PARTICIPATION. 6
2.1. Date of Participation. 6
2.2. Duration of Participation 7
ARTICLE 3. CONTRIBUTIONS. 8
3.1. Elective Contributions 8
3.2. Form and Manner of Elections 8
3.3. Matching Contributions 8
3.4. Discretionary Contributions 9
3.5. Qualified Nonelective Contributions 9
3.6. Rollover Contributions. 9
3.7. Employee Contributions 9
3.8. Crediting of Contributions 10
3.9. Time for Making Contributions. 10
3.10. Certain Limits Apply 10
3.11. Return of Contributions 10
3.12. Establishment of Trust. 10
ARTICLE 4. PARTICIPANT ACCOUNTS. 11
4.1. Accounts 11
4.2. Adjustment of Accounts 11
4.3. Investment of Accounts. 11
4.4. Appointment of Investment Manager or Named Fiduciary. 12
4.5. Section 404(c) Compliance 12
4.6. Transfers From Other Plans 12
ARTICLE 5. VESTING OF ACCOUNTS. 14
5.1. Immediate Vesting of Certain Accounts 14
5.2. Deferred Vesting of Discretionary Contribution Accounts. 14
5.3. Special Vesting Rules 14
5.4. Changes in Vesting Schedule 15
5.5. Forfeitures 15
5.6. Vesting of Accounts Transferred From Other Plans 16
ARTICLE 6. WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE. 17
6.1. Hardship Withdrawals 17
6.2. Withdrawals After Age 59-1/2 18
6.3. Restrictions on Certain Distributions 18
6.4. Limitation of Withdrawable Amount. 19
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6.5. Required Distributions After Age 70-1/2 19
6.6. Distributions Required by a Qualified Domestic Relations Order 20
6.7. Certain Dispositions. 20
6.8. Spousal Consent to Withdrawals by Certain Former Participants in Other Plans 20
ARTICLE 7. LOANS TO PARTICIPANTS. 21
7.1. In General 21
7.2. Rules and Procedures 21
7.3. Maximum Amount of Loan 21
7.4. Minimum Amount of Loans; Limit on Number of Loans. 22
7.5. Note; Security; Interest 22
7.6. Repayment 22
7.7. Repayment Upon Distribution 22
7.8. Default 22
7.9. Note as Trust Asset 23
7.10. Nondiscrimination 23
7.11. Designation of Accounts 23
7.12. Spousal Consent to Loans to Certain Former Participants in Other Plans 23
ARTICLE 8. BENEFITS UPON DEATH OR SEPARATION FROM SERVICE 24
8.1. Separation from Service for Reasons Other Than Death 24
8.2. Time of Distributions. 24
8.3. Amount of Distribution. 25
8.4. Distributions After a Participant's Death. 25
8.5. Designation of Beneficiary 26
8.6. Direct Rollovers of Eligible Distributions 27
8.7. Special Rules for Former Participants in Merged Plans 28
ARTICLE 9. ADMINISTRATION. 30
9.1. Committee 30
9.2. Powers of Committee 30
9.3. Effect of Interpretation or Determination. 30
9.4. Reliance on Tables, etc 31
9.5. Claims and Review Procedures 31
9.6. Indemnification of Committee and Assistants 31
9.7. Annual Report. 31
ARTICLE 10. AMENDMENT AND TERMINATION. 32
10.1. Amendment 32
10.2. Termination 32
10.3. Distributions upon Termination of the Plan 32
10.4. Merger or Consolidation of Plan; Transfer of Plan Assets 33
ARTICLE 11. LIMITS ON CONTRIBUTIONS 34
11.1. Code Section 404 Limits. 34
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11.2. Code Section 415 Limits 34
11.3. Code Section 402(g) Limits. 36
11.4. Code Section 401(k)(3) Limits. 37
11.5. Code Section 401(m) Limits 42
11.6. Section 401(a)(26)/410(b) Limits. 46
ARTICLE 12. SPECIAL TOP-HEAVY PROVISIONS. 48
12.1. Provisions to apply. 48
12.2. Minimum Contribution 48
12.3. Adjustment to Limitation on Benefits. 49
12.4. Definitions. 49
ARTICLE 13. MISCELLANEOUS. 52
13.1. Exclusive Benefit Rule. 52
13.2. Limitation of Rights 52
13.3. Nonalienability of Benefits 52
13.4. Adequacy of Delivery 52
13.5. Governing law 52
ARTICLE 14. DEFINITIONS. 53
14.1. "Accounts" 53
14.2. "Affiliated Employer" 53
14.3. "Beneficiary" 53
14.4. "Board of Directors" 53
14.5. "Code" 53
14.6. "Committee" 53
14.7. "Company Stock" 53
14.8. "Compensation" 54
14.9. "Disability" 54
14.10. "Discretionary Contribution" 55
14.11. "Discretionary Contribution Account" 55
14.12. "Elective Contribution" 55
14.13. "Elective Contribution Account" 55
14.14. "Eligible Employee" 55
14.15. "Employee" 55
14.16. "Entry Date" 55
14.17. "ERISA" 55
14.18. "Highly Compensated Employee" 56
14.19. "Hour of Service" 57
14.20. "Matching Contribution Account" 59
14.21. "Normal Retirement Age" 59
14.22. "Participant" 59
14.23. "Participating Employer" 59
14.24. "Plan" 59
14.25. "Plan Sponsor" 59
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14.26. "Plan Year" 59
14.27. "Predecessor Employer" 59
14.28. "Qualified Domestic Relations Order" 59
14.29. "Qualified Nonelective Contribution" 60
14.30. "QNEC Account" 60
14.31. "Regulation" 60
14.32. "Required Beginning Date" 60
14.33. "Rollover Contribution" 61
14.34. "Section" 61
14.35. "Trust" 61
14.36. "Trustee" 61
14.37. "Valuation Date" 61
14.38. "Year of Service for Vesting" 61
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I. ARTICLE INTRODUCTION.
A. QUALIFICATION AND PURPOSE. This document amends and restates the provisions
of the Boston Scientific Corporation Long-Term Savings and Security Plan,
effective as of January 1, 1996 unless otherwise stated herein and renames it
the Boston Scientific Corporation 401(k) Savings Plan. The original effective
date of the Plan was January 1, 1987. The Plan and its related Trust are
intended to qualify as a profit-sharing plan and trust under Code sections
401(a) and section 501(a), the cash or deferred arrangement forming part of the
Plan is intended to qualify under Code section 401(k). The Plan is intended to
constitute a plan described in section 404(c) of ERISA. The provisions of the
Plan and Trust shall be construed and applied accordingly. The purpose of the
Plan is to provide benefits to Participants in a manner consistent and in
compliance with such Code sections and Title I of ERISA.
A. MERGER OF PLANS. The rights of Participants in this Plan or any other plan
which has been merged into this Plan, who ceased to be employed by the
applicable employer prior to January 1, 1996 and have not thereafter been
reemployed by the Employer and the rights of their beneficiaries, shall be
determined in accordance with the terms of the applicable plan at the time they
ceased to be employed.
A. DEFINED TERMS. All capitalized terms used in the following provisions of the
Plan have the meanings given them under Article 14.
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I. ARTICLE PARTICIPATION.
A. DATE OF PARTICIPATION.
(a) Any individual who was a Participant on December 31, 1995
and is an Eligible Employee on January 1, 1996 will, subject to Section
2.2, continue to be a Participant.
(b) Any other individual will become a Participant on the
Entry Date coinciding with or next following the latest of
(1) January 1, 1996;
(2) the date on which he or she becomes an Eligible
Employee;
(3) the date on which he or she attains age 21; and
(4) the 30th day after the date he or she completes
an Hour of Service;
provided that (i) he or she is an Eligible Employee on such Entry Date
and (ii) he or she has in effect on such Entry Date a compensation
reduction authorization described in Section 3.2 which was submitted in
the manner prescribed by the Committee. Unless otherwise provided by
the Committee, an Employee who has satisfied the requirements of (1),
(2), (3) and (4) above, but who has failed to satisfy the requirements
of (i) or (ii) above, will become a Participant on the first Entry Date
coinciding with or next following the January 1, April 1, July 1 or
October 1 on which the requirements of both (i) and (ii) are satisfied.
(c) Unless otherwise provided in Schedule B, in the event the
Employer acquires a business of another employer, through an
acquisition of either assets or stock, an Employee who was employed by
such other employer immediately prior to such acquisition shall have
his or her prior service with such other employer taken into account,
as if it were service with the Employer, for purposes of (b)(4) above.
(d) An Employee who, immediately before becoming an Eligible
Employee, has a contribution agreement in effect with another
Affiliated Employer under a separate plan described in section 401(k)
of the Code shall become a Participant on the payroll date coinciding
with or next following the date he or she becomes an Eligible Employee,
provided that he or she has a compensation reduction authorization in
effect on such payroll date.
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A. DURATION OF PARTICIPATION. An individual who has become a Participant under
the Plan will remain a Participant for as long as an Account is maintained under
the Plan for his or her benefit, or until his or her death, if earlier.
Notwithstanding the preceding sentence and unless otherwise expressly provided
for under the Plan, no contributions shall be made with respect to a Participant
who is not an Eligible Employee. In the event a Participant remains an Employee
but ceases to be an Eligible Employee and becomes ineligible for contributions,
such Employee will again become eligible for contributions immediately upon
returning to the class of Eligible Employees. In the event an Employee who is
not an Eligible Employee becomes an Eligible Employee, such Employee will become
a Participant on the first Entry Date on or after becoming an Eligible Employee,
if he or she has satisfied the requirements of Section 2.1. A Participant or
former Participant who is reemployed as an Eligible Employee shall again become
eligible for contributions on the first Entry Date on or after reemployment.
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I. ARTICLE CONTRIBUTIONS.
A. ELECTIVE CONTRIBUTIONS. On behalf of each Participant for whom there is in
effect, for any pay period, a compensation reduction authorization described in
Section 3.2 and who is receiving Compensation from a Participating Employer
during such pay period, such Participating Employer will contribute to the
Trust, as an Elective Contribution, an amount equal to the amount by which such
Compensation was reduced pursuant to the compensation reduction authorization.
Elective Contributions for any pay period in a Plan Year may not be less than 1
percent nor exceed 15 percent of the Participant's Compensation for such pay
period.
A. FORM AND MANNER OF ELECTIONS. A "compensation reduction authorization" is an
authorization from an Eligible Employee to a Participating Employer which
satisfies the requirements of this Section 3.2. Each compensation reduction
authorization shall be in a form prescribed or approved by the Committee, and
may be entered into as of the Entry Date, described in Section 2.1(b) or the
first Entry Date coinciding with or next following the first day of any
subsequent calendar year quarter, upon such prior notice as the Committee may
prescribe. A compensation reduction authorization may be changed by the
Participant, with such prior notice as the Committee may prescribe, as of the
first Entry Date coinciding with or next following the first day of a calendar
quarter. A compensation reduction authorization shall be effective with respect
to Compensation payable on and after the applicable Entry Date. A compensation
reduction authorization may be revoked by the Participant at any time, upon such
prior notice as the Committee may prescribe. A Participant who revokes a
compensation reduction authorization may not enter into a new authorization
until the Entry Date coinciding with or next following the first day of any
subsequent calendar year quarter following the revocation.
A. MATCHING CONTRIBUTIONS.
(a) For each month in a Plan Year, each Participating Employer
will make a Matching Contribution to the Trust for the benefit of each
Participant on whose behalf it made Elective Contributions for the
period. The amount of Matching Contributions made by a Participating
Employer for the month shall be equal to 50% of the Elective
Contributions made on behalf of the Participant for the month which do
not exceed 4% of the Participant's Compensation for such month.
(b) If (i) a Participant is an Eligible Employee on the last
day of the Plan Year, and (ii) the aggregate Matching Contributions
made by his or her Participating Employer under paragraph (a) above to
the Trust for the benefit of such Participant with respect to such Plan
Year are less than the lesser of (1) 50% of the Participant's Elective
Contributions for such Plan Year or (2) 2% of such Participant's
Compensation in such Plan Year, then the Participating Employer
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shall make a further contribution to the Trust, for the benefit of such
Participant, to be credited to his or her Matching Contribution
Account, such that the aggregate Matching Contributions made by the
Participating Employer for the benefit of such Participant for the Plan
Year under this Section shall equal the lesser of the amounts set forth
in clauses (1) and (2) above.
A. DISCRETIONARY CONTRIBUTIONS. For each Plan Year, the Participating Employers
shall contribute to the Plan such other amounts, if any, as the Board of
Directors, in its sole discretion, may determine. Any such Discretionary
Contribution for a Plan Year shall be made in cash or, if the Board of Directors
so directs, in Company Stock, and shall be allocated among and credited to the
Accounts of each Participant who:
(a) is an Eligible Employee on the last day of the Plan Year;
or
(b) has ceased to be an Eligible Employee during the Plan Year
by reason of death or separation from service after attaining age 65 or
on account of Disability,
in proportion to their relative amounts of Compensation for such Plan Year.
A. QUALIFIED NONELECTIVE CONTRIBUTIONS. To the extent necessary to satisfy the
Code Section 401(k)(3) limits with respect to Elective Contributions or the Code
Section 401(m) limits with respect to Matching Contributions, the Plan Sponsor,
in its discretion, may determine whether a Qualified Nonelective Contribution
shall be made to the Trust for a Plan Year and , if so, the amount to be
contributed by such Participating Employer. If the Plan Sponsor determines that
a Qualified Nonelective Contribution shall be made, each Participating Employer
shall contribute its designated portion. A Qualified Nonelective Contribution
for a Plan Year shall be allocated among and credited to the QNEC Accounts of
all Participants who are eligible to receive Elective Contributions for the Plan
Year, in proportion to their relative amounts of Compensation for the Plan Year.
Qualified Nonelective Contributions shall be fully vested and subject to the
same distribution rules as Elective Contributions as of the time such Qualified
Nonelective Contributions are made to the Plan.
A. ROLLOVER CONTRIBUTIONS. An Eligible Employee (whether or not a Participant)
may make a Rollover Contribution to the Plan upon demonstration to the Committee
that the contribution is eligible for transfer to the Plan pursuant to the
rollover provisions of the Code.
A. EMPLOYEE CONTRIBUTIONS. Employee after-tax contributions are neither required
nor permitted under the Plan.
B. CREDITING OF CONTRIBUTIONS. Each type of contribution for a Plan Year shall
be allocated among and credited to the respective Accounts of Participants
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eligible to share in the contributions as of the Valuation Date next following
the date the contributions are received by the Trustee.
A. TIME FOR MAKING CONTRIBUTIONS. Elective Contributions will be paid in cash to
the Trust as soon as such contributions can reasonably be segregated from the
general assets of the Participating Employer, but in any event no later than the
time set forth in Department of Labor Regulations section 25103-102.
A. CERTAIN LIMITS APPLY. All contributions to the Plan are subject to the
applicable limits set forth under Code sections 401(k), 402(g), 401(m), 404, and
415, as further described elsewhere in the Plan. In addition, certain minimum
allocations may be required under Code sections 401(a)(26), 410(b), and 416, as
also further described elsewhere in the Plan.
A. RETURN OF CONTRIBUTIONS. If any contribution by a Participating Employer to
the Trust is (a) made by reason of a mistake of fact, or (b) believed by the
Participating Employer in good faith to be deductible under Code section 404,
but the deduction is disallowed, the Trustee shall, upon request by the
Participating Employer, return to the Participating Employer the excess of the
amount contributed over the amount, if any, that would have been contributed had
there not occurred a mistake of fact or a mistake in determining the deduction.
Such excess shall be reduced by the losses of the Trust attributable thereto, if
and to the extent such losses exceed the gains and income attributable thereto.
In no event shall the return of a contribution hereunder cause any Participant's
Accounts to be reduced to less than they would have been had the mistaken or
nondeductible amount not been contributed. No return of a contribution hereunder
shall be made more than one year after the mistaken payment of the contribution,
or disallowance of the deduction, as the case may be.
A. ESTABLISHMENT OF TRUST. The Plan Sponsor will establish a Trust to accept and
hold contributions made under the Plan. The Trust shall be governed by an
agreement between the Plan Sponsor and the Trustee the terms of which shall be
consistent with the Plan provisions and intended qualification under Code
sections 401(a) and 501(a).
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II. ARTICLE PARTICIPANT ACCOUNTS.
A. ACCOUNTS. The Committee will establish and maintain (or cause the Trustee to
establish and maintain) for each Participant, such Accounts as are necessary to
carry out the purposes of this Plan.
A. ADJUSTMENT OF ACCOUNTS. As of each Valuation Date, each Account will be
adjusted to reflect the fair market value of the assets allocated to the
Account. In so doing,
(a) each Account balance will be increased by the amount of
contributions, income and gain allocable to such Account since the
prior Valuation Date; and
(b) each Account balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable to the
Account since the prior Valuation Date.
Income, expense, gain or loss which is generated by a particular investment
within the Trust shall be allocated among the Accounts invested in that
investment in proportion to the balances of such Accounts as of the immediately
preceding Valuation Date. Any expenses relating to a specific Account or
Accounts, including without limitation commissions or sales charges with respect
to an investment in which the Account participates, may be charged solely to the
particular Account or Accounts.
A. INVESTMENT OF ACCOUNTS.
(a) A Participant's Accounts shall be invested by the Trustee
as the Participant directs from among such investment options as the
Plan Sponsor may make available from time to time. The Committee shall
prescribe the manner in which such directions may be made or changed,
the dates as of which they shall be effective, and the allocation of
Accounts with respect to which no directions are submitted. Any other
assets of the Trust not specified above in this Section shall be
invested by the Trustee in the sole discretion of the Trustee and in
accordance with its fiduciary duties under ERISA; provided, that if an
investment manager or other named fiduciary has been appointed with
respect to all or a portion of such assets, the Trustee shall invest
such portion as the investment manager or other named fiduciary
directs.
(b) The Committee is specifically authorized to establish a
Company Stock investment option. To the extent such Company Stock has
voting rights, or in the event of any tender or exchange offer by any
person for such Company Stock, Participants invested in such Company
Stock fund may direct the Trustee as to the voting and tender of such
Company Stock in accordance with procedures
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established by the Committee. The Committee may also provide for the
temporary suspension of the right of Participants subject to Section 16
of the Securities Exchange Act of 1934 to invest further amounts in the
Company Stock fund following any withdrawal from the portion of such
Participants' Accounts theretofore invested in such Company Stock fund.
The Committee may also establish from time to time a maximum percentage
of any Participant's Accounts which may be invested in the Company
Stock fund.
A. APPOINTMENT OF INVESTMENT MANAGER OR NAMED FIDUCIARY. The Plan Sponsor may
appoint in writing one or more investment managers or other "named fiduciaries"
(within the meaning of ERISA section 402(a)(2)) to manage the investment of all
or designated portions of the assets held in the Trust. The appointment shall be
effective upon acknowledgment in writing by the investment manager or other
named fiduciary that it is a fiduciary with respect to the Plan. An investment
manager must be (a) registered as an investment adviser under the Investment
Advisers Act of 1940, (b) a bank as defined in that Act, or (c) an insurance
company qualified under the laws of more than one state to manage, acquire or
dispose of any assets of the Plan.
A. SECTION 404(C) COMPLIANCE. The Plan is intended to be an "ERISA section
404(c) plan" as described in section 404(c) of ERISA and title 29 of the Code of
Federal Regulations section 2550.404c-1, and shall be administered and
interpreted in a manner consistent with that intent. The investment direction
requirements of Department of Labor regulation section
2550.404c-1(b)(2)(i)(B)(1)(iv) and (b)(2)(i)(A) and the requirements relating to
the investment alternatives under the Plan are intended to be satisfied by
Section 4.3 above, in each case taking into account related communications to
Participants and beneficiaries under the summary plan description for the Plan
and other communications. For purposes of ERISA section 404(c), the "identified
plan fiduciary" obligated to comply with Participant and Beneficiary investment
instructions (except as provided in such section and regulations thereunder),
the identified plan fiduciary obligated to provide Participants and
Beneficiaries with the materials set forth in Department of Labor regulations
section 2550.404c-1(b)(2)(i)(B) and the identified plan fiduciary obligated to
comply with the confidentiality requirements and procedures under Department of
Labor regulations section 2550.404c-1(d)(2)(ii)(E)(4)(viii) relating to employer
securities shall be the Committee. The Committee may decline to implement
Participant and Beneficiary investment instructions which would result in a
prohibited transaction described in ERISA section 406 or section 4975 of the
Code or which would generate income that would be taxable to the Plan.
A. TRANSFERS FROM OTHER PLANS.
(a) Unless otherwise provided herein, in the event that
another plan is merged into the Plan, or accounts are otherwise
transferred to the Plan from another plan, the assets transferred to
the Plan shall be allocated as follows:
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(1) Assets attributable to an individual's elective
contributions and qualified nonelective contributions (if any) shall be
allocated to an Elective Contribution Account for his or her benefit
under the Plan;
(2) Assets attributable to matching employer contributions (if
any), shall be allocated to a Matching Contribution Account for his or
her benefit under the Plan;
(3) Assets attributable to other employer contributions (if
any), shall be allocated to a Discretionary Contribution Account for
his or her benefit under the Plan; and
(4) Assets attributable to an individual's after-tax
contributions (if any) shall be allocated to an After-Tax Contribution
Account for his or her benefit under the Plan.
The assets transferred may be separately accounted for in sub-accounts
under the Plan as determined to be necessary by the Committee in order to
administer the provisions of Articles 5, 6, 7 and 8. Unless otherwise provided
in Schedule B or in an acquisition agreement between a Participating Employer
and the employer maintaining such transferor plan, all assets transferred under
this Section 4.6 shall be invested in accordance with investment directions by
the Participant under Section 4.3 above or, absent such directions, in a fund
designated by the Committee.
(b) Any individual for whom accounts have been transferred
under this Section 4.6 and who has not become a Participant under
Section 2.1 shall be treated as a Participant for purposes of Articles
4, 5, 8, 9, 10 and 13 and, so long as he or she is an Employee,
Articles 6 and 7.
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I. ARTICLE VESTING OF ACCOUNTS.
A. IMMEDIATE VESTING OF CERTAIN ACCOUNTS. A Participant shall at all times have
a vested interest in 100% of his or her Elective Contribution Account, QNEC
Account, Matching Contribution Account, and his or her Rollover Account, if any.
A. DEFERRED VESTING OF DISCRETIONARY CONTRIBUTION ACCOUNTS.
(a) A Participant who on December 31, 1992 had at least three
Years of Service for purposes of calculating vesting, shall have a
vested interest in 100% of his or her Discretionary Contribution
Account, if any.
(b) Effective January 1, 1996, a Participant not described in
(a) above, shall have a vested interest in a percentage of his or her
Discretionary Contribution Account, if any, determined in accordance
with the following schedule and based on his or her Years of Service
for Vesting:
Years of Service Applicable
for Vesting Nonforfeitable Percentage
----------- -------------------------
less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
A. SPECIAL VESTING RULES. Notwithstanding any provision of the Plan to the
contrary, a Participant will have a vested interest in 100% of the Accounts
maintained for his or her benefit upon the happening of any one of the following
events:
(a) the Participant's attainment of age 65 while an Employee;
(b) the Participant's separation from service on account of
Disability;
(c) the Participant's death while an Employee;
(d) the termination of the Plan or the complete discontinuance
of Contributions under the Plan; or
(e) the partial termination of the Plan with respect to the
Participant.
A. CHANGES IN VESTING SCHEDULE. A Plan amendment which changes a vesting
schedule under the Plan shall apply with respect to any Participant who has
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completed three Years of Service prior to the expiration of the period described
below only to the extent that the Participant's vested percentage in his or her
Accounts determined under the amendment is greater than the nonforfeitable
percentage of his or her Accounts determined without regard to the amendment.
The period referred to in the preceding sentence will begin on the date the
amendment of the vesting schedule is adopted and will end 60 days after the
latest of the following dates:
(a) the date on which such amendment is adopted;
(b) the date on which such amendment becomes effective; and
(c) the date on which the Participant is issued written notice
of such amendment by the Committee.
A. FORFEITURES.
(a) In general. Any portion of a Participant's Account in
which he or she is not vested upon separation from service for any
reason shall be forfeited as of the earlier of:
(i) the expiration of 5 consecutive Plan Years during
each of which the Participant does not complete 501 Hours of
Service, or
(ii) the end of the calendar month in which the
Participant separates from the service of the Affiliated
Employers.
Any Participant who separates from the service of the Affiliated Employers prior
to earning a vested interest in any of his or her Accounts shall be deemed to
have received a complete distribution of his or her vested interest on the day
he or she separates from service. If the Participant elects to have distributed
less than the entire vested portion of an Account derived from Participating
Employer Contributions in which he or she is less than fully vested, the part of
the nonvested portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is the amount
of the distribution and the denominator of which is the total vested value of
the Account.
(b) Certain Restorations. Notwithstanding the preceding
paragraph, if a Participant forfeits any portion of an Account as a
result of the complete distribution of the vested portion of the
Account but thereafter returns to the employ of an Affiliated Employer,
the amount forfeited will be recredited to the Participant's Account if
he or she repays to the Plan the entire amount previously distributed,
without interest, prior to the earlier of (i) the close of the fifth
consecutive Plan Year in each of which the Participant does not
complete at least 501 Hours of Service or (ii) the fifth anniversary of
the date on which the
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Participant is reemployed. In the case of a Participant who had earlier
separated from service prior to earning a vested interest in any of his
or her Accounts and was deemed to have received a distribution of such
vested interest, the amount forfeited will be restored upon the
Participant's reemployment prior to the close of the fifth consecutive
Plan Year in each of which the Participant does not complete at least
501 Hours of Service. A Participant's vested percentage in the amount
recredited under this paragraph will thereafter be determined under the
terms of the Plan as if no forfeiture had occurred. The money required
to effect the restoration of a Participant's Account shall come from
other Accounts forfeited during the Plan Year of restoration, and to
the extent such funds are inadequate, from a special contribution by
the Participant's Participating Employer.
(c) Application of forfeitures. Any forfeitures occurring in a
Plan Year
(i) first will be applied to the restoration of any
Accounts as required for such Year; and
(ii) to the extent amounts remain after the
application of (i) above, will be allocated among and credited
to the Discretionary Contribution Accounts of the remaining
Participants in proportion to their relative amounts of
Compensation for the Plan Year.
A. VESTING OF ACCOUNTS TRANSFERRED FROM OTHER PLANS. In the event that another
plan is merged into the Plan, or accounts are otherwise transferred to the Plan
from another plan, the portion of each Account under this Plan that is
attributable to a vested and nonforfeitable account, or portion of an account,
under the transferor plan shall remain vested and nonforfeitable under this
Plan. The remaining portion of each Account under this Plan that is attributable
to a transferor plan account shall vest in accordance with Section 5.2, unless
otherwise provided in Schedule B.
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II. ARTICLE WITHDRAWALS PRIOR TO SEPARATION FROM SERVICE.
A. HARDSHIP WITHDRAWALS.
(a) Immediate and heavy financial need. A Participant may make
a withdrawal from his or her Elective Contribution Account in the event
of an immediate and heavy financial need arising from
(i) expenses for medical care described in Code
section 213(d) previously incurred by the Participant, his or
her spouse or any of his or her dependents (as defined in Code
section 152) or amounts necessary for these persons to obtain
such medical care;
(ii) costs directly related to the purchase of a
principal residence of the Participant (excluding mortgage
payments);
(iii) the payment of tuition and related educational
fees for the next 12 months of post-secondary education for
the Participant, his or her spouse, children or dependents (as
defined in Code section 152);
(iv) payments necessary to prevent the eviction of
the Participant from his or her principal residence or
foreclosure on the mortgage on that principal residence; or
(v) any other need identified by the Commissioner of
Revenue as a "financial hardship" for purposes of section
401(k) plans through the publication of revenue rulings,
notices and other documents of general applicability.
The Committee's determination of whether there is an immediate and heavy
financial need as defined above shall be made solely on the basis of written
evidence furnished by the Participant. Such evidence must also indicate the
amount of such need.
(b) Distribution of amount necessary to meet need. As soon as
practicable after the Committee's determination that an immediate and
heavy financial need exists with respect to the Participant and that
the Participant has obtained all other distributions (other than
hardship distributions) and all nontaxable loans currently available
under the Plan and all other plans maintained by the Affiliated
Employers, the Committee will direct the Trustee to pay to the
Participant the amount necessary to meet the need created by the
hardship (but not in excess of the value of the Participant's Elective
Contribution Account, determined as of the Valuation Date next
following the Committee's
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determination). The amount necessary to meet the need may include any
amounts necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution.
Distribution will be made from the Participant's Elective Contribution
Account (provided that no portion of an Elective Contribution Account
attributable to income earned after December 31, 1988 may be
distributed due to a financial hardship).
(c) Effect of hardship distribution. If a Participant
receives a hardship distribution, then any Elective Contribution
election or any other cash-or-deferred or employee contribution
election in effect with respect to the Participant under the Plan or
any other qualified plan maintained by an Affiliated Employer) shall be
suspended for the 12-month period beginning with the date the
Participant receives the distribution, and the amount of Elective
Contributions made for the benefit of the Participant, together with
any elective deferrals made on behalf of the Participant under any
other plan maintained by the Affiliated Employers for the calendar year
immediately following the calendar year of the hardship distribution,
must not exceed the applicable limit under Code section 402(g) for such
next calendar year, less the amount of such contributions made on
behalf of the Participant for the calendar year of the hardship
distribution.
A. WITHDRAWALS AFTER AGE 59-1/2. A Participant who is an Employee and has
attained age 59-1/2 may make a withdrawal from any one or more of his or her
Accounts for any reason, upon such prior notice as the Committee may prescribe.
Any such withdrawal shall be in the amount specified by the Participant, up to
the vested value of the particular Account determined as of the Valuation Date
next following the Committee's receipt of notice of the withdrawal. Payment to
the Participant shall be made as soon as practicable after such Valuation Date.
A. RESTRICTIONS ON CERTAIN DISTRIBUTIONS. In the case of a Participant whose
Accounts are valued in excess of $3,500 and who has not yet attained the Normal
Retirement Age, no distribution may be made to the Participant under this
Article unless
(a) between the 30th and 90th day prior to the date
distribution is to be made, the Committee notifies the Participant in
writing that he or she may defer distribution until the Normal
Retirement Age and provides the Participant with a written description
of the material features and (if applicable) the relative values of the
forms of distribution available under the Plan; and
(b) the Participant consents to the distribution in writing
after the information described above has been provided to him or her.
Notwithstanding the foregoing, such distribution may commence less than 30 days
after the required notification described above is given, provided that (i) the
Committee clearly informs the Participant that the Participant has a right to a
period of at least 30
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days after receiving the notice to consider whether or not to elect a
distribution; and (ii) the Participant, after receiving the notice, elects a
distribution.
For purposes of this Section, a Participant's Accounts will be considered to be
valued in excess of $3,500 if the value of his or her Accounts exceeds such
amount at the time of the distribution in question or exceeded such amount at
the time of any prior distribution to (or withdrawal by) the Participant under
the Plan.
A. LIMITATION OF WITHDRAWABLE AMOUNT. In the event that there is allocated to a
Participant's Account a promissory note with respect to a loan made from the
Plan, the maximum amount of cash that may be withdrawn from the Account prior to
the Participant's separation from service shall be determined without regard to
the value of such note.
A. REQUIRED DISTRIBUTIONS AFTER AGE 70-1/2.
1. Notwithstanding any provision of the Plan to the contrary, in the
case of a Participant who remains an Employee on or after his or her
Required Beginning Date, the entire vested portion of the Employee's
Accounts will be distributed, beginning on such date and in accordance
with Regulation sections 1.401(a)(9)-1 and 1.401 (a)(9)-2, over a
period not extending beyond the life expectancy of such Employee or the
joint life expectancy of the Employee and his or her Beneficiary.
1. In general, for any calender year (a "distribution year") beginning
with the year prior to a Participant's Required Beginning Date, the
minimum required distribution shall be the quotient obtained by
dividing the Participant;'s vested Account balances by the applicable
life expectancy for the distribution year determined by use of the
expected return multiples in Tables V and VI of Regulation section
1.72-9. The minimum distribution for the first distribution year shall
be made on the April 1st next following the required Beginning Date.
The distribution for each subsequent distribution year shall be made on
the December 31st of that year.
1. The vested Account balances to be used for determining the minimum
distribution for a distribution year are the vested balances as of the
last Valuation Date in the calendar year prior to the distribution
year, increased by any contributions or forfeitures allocated to the
Account and decreased by any distributions made from the Account as of
dates in the calendar year after the last Valuation Date. In the case
of determining the Account balance for purposes of the second
distribution year, the Account balance will be further decreased by any
distribution from the Account made in the second distribution year and
before the Required Beginning Date which is not in excess of the amount
required for the first distribution year.
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1. For purposes of determining the applicable life expectancy for any
distribution year, life expectancies will not be recalculated annually
pursuant to Code section 401(a)(9).
To the extent a Participant changes or revokes a Beneficiary designation after
his or her Required Beginning Date, life expectancies will be decreased (but not
extended) by the measuring life of the substitute Beneficiary.
A. DISTRIBUTIONS REQUIRED BY A QUALIFIED DOMESTIC RELATIONS ORDER. To the extent
required by a Qualified Domestic Relations Order, the Committee shall make
distributions from a Participant's Accounts to alternate payees named in such
order in a manner consistent with the distribution options otherwise available
under the Plan, regardless of whether the Participant is otherwise entitled to a
distribution at such time under the Plan.
A. CERTAIN DISPOSITIONS. In connection with the disposition by a Participating
Employer of at least 85 percent of the assets used by the Participating Employer
in a trade or business to an unrelated corporation, or the disposition of a
Participating Employer's interest in a subsidiary to an unrelated entity,
distribution of the entire vested Account balance of an Employee who continues
employment with the acquirer may be made to the Employee in a single sum, but
only if the acquirer does not maintain the Plan after the disposition, and only
if such distribution is otherwise made in accordance with Code section
401(k)(10).
A. SPOUSAL CONSENT TO WITHDRAWALS BY CERTAIN FORMER PARTICIPANTS IN OTHER PLANS.
In the case of a married Participant for whom amounts have been transferred
under Section 4.6 from another plan and who has at any time elected an annuity
form of payment under Section 8.7, no withdrawal may be made under Sections 6.1
or 6.2 unless (a) his or her spouse consents in writing to such withdrawal, such
consent acknowledges the effect of the withdrawal and is witnessed by a Plan
representative or a notary public, and such consent specifies the form of the
withdrawal (i.e., a lump sum cash payment), or (b) it is established to the
satisfaction of the Committee that the foregoing consent may not be obtained
because the spouse cannot be located, or because of such other circumstances as
the Secretary of the Treasury may prescribe.
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I. ARTICLE LOANS TO PARTICIPANTS.
A. IN GENERAL. Upon the written request of a Participant on a form acceptable to
the Committee, and subject to the conditions of this Article, the Committee
shall direct the Trustee to make a loan from the Trust to the Participant.
Notwithstanding the foregoing, a Participant who is an owner-employee or member
of the family (as defined in Code section 267(e)(4) of an owner-employee is not
eligible to receive a loan under this Article 7. An "owner-employee" shall mean
an owner employee as defined in Code section 401(c)(3), and shall include an
employee or officer of an electing small business (Subchapter S) corporation
which is an Affiliated Employer who owns (or is considered as owning within the
meaning of Code section 318(a)(1)), on any day during the taxable year of such
corporation, more than 5% of the outstanding stock of such corporation. For
purposes of this Article, "Participant" includes any former Participant who is a
"party in interest" within the meaning of ERISA section 3(14) and a deceased
Participant's Beneficiary who has not yet received the entire vested portion of
the Participant's Accounts and who is a "party in interest" as described above.
A. RULES AND PROCEDURES. The Committee shall promulgate such rules and
procedures, not inconsistent with the express provisions of this Article, as it
deems necessary to carry out the purposes of this Article including, but not
limited to, rules for charging loan fees directly to a Participant's Accounts.
All such rules and procedures shall be deemed a part of the Plan for purposes of
the Department of Labor regulation section 2550.408b-1(d). Loans shall not be
made available to Participants who are Highly Compensated Employees in an amount
(determined under Department of Labor regulation section 2550.408b-1(b)) greater
than the amount made available to other Participants.
A. MAXIMUM AMOUNT OF LOAN. The following limitations shall apply in determining
the amount of any loan to a Participant hereunder:
(a) The amount of the loan, together with any other
outstanding indebtedness of the Participant under the Plan or any other
qualified retirement plans of the Affiliated Employers, shall not
exceed $50,000 reduced by the excess of (i) the highest outstanding
loan balance of the Participant from such plans during the one-year
period ending on the day prior to the date on which the loan is made,
over (ii) the Participant's outstanding loan balance from such plans
immediately prior to the loan.
(b) The amount of the loan shall not exceed 50% of the
Participant's vested interest in his or her Accounts, determined as of
the Valuation Date immediately preceding the date of the loan.
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A. MINIMUM AMOUNT OF LOANS; LIMIT ON NUMBER OF LOANS. The amount of any single
loan under this Plan shall not be less than $1,000. No more than two loans may
be outstanding to a Participant at any one time.
A. NOTE; SECURITY; INTEREST. Each loan shall be evidenced by a note signed by
the Participant and shall be secured by the Participant's vested interest in his
or her Accounts, including in such security the note evidencing the loan. The
loan shall bear interest at a reasonable annual percentage interest rate to be
determined by the Committee. In determining the interest rate, the Committee
shall take into consideration interest rates currently being charged by persons
in the business of lending money with respect to loans made in similar
circumstances. The Committee shall make such determination through consultation
with one or more lending institutions, as the Committee deems appropriate.
A. REPAYMENT. Each loan made to a Participant who is receiving regular payments
of compensation from a Participating Employer shall be repayable by payroll
deduction. Loans made to other Participants (and, in all events, where payroll
deduction is no longer practicable) shall be repayable in such manner as the
Committee may from time to time determine. The documents evidencing a loan shall
provide that payments shall be made not less frequently than quarterly and over
a specified term as determined by the Committee (but not to exceed five years;
ten years if the loan is being applied toward the purchase of a principal
residence for the Participant); such documents shall also require that the loan
be amortized with level payments of principal and interest. A Participant may
prepay all, but not less than all, of his or her loan at any time, without
penalty, by paying the loan principal then outstanding together with interest
accrued and unpaid to the date of payment.
A. REPAYMENT UPON DISTRIBUTION. If, at the time benefits are to be distributed
(or to commence being distributed) to a Participant with respect to a separation
from service, there remains any unpaid balance of a loan hereunder, such unpaid
balance shall, to the extent consistent with Department of Labor regulations,
become immediately due and payable in full. Such unpaid balance, together with
any accrued but unpaid interest on the loan, shall be deducted from the
Participant's Accounts, subject to the default provisions below, before any
distribution of benefits is made. Except as may be required in order to comply
(in a manner consistent with continued qualification of the Plan under Code
section 401(a)) with Department of Labor regulations, no loan shall be made or
remain outstanding with respect to a Participant under this Article after the
time distributions to the Participant with respect to a separation from service
are to be paid or commence.
A. DEFAULT. In the event of a default in making any payment of principal or
interest when due under the note evidencing any loan under this Article, if such
default continues for more than 90 days of the due date thereof, the unpaid
principal balance of the note shall immediately become due and payable in full.
Such unpaid
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principal, together with any accrued but unpaid interest, shall thereupon be
deducted from the Participant's Accounts, subject to the further provisions of
this Section. The amount so deducted shall be treated as distributed to the
Participant and applied by the Participant as a payment of the unpaid interest
and principal (in that order) under the note evidencing such loan. In no event
shall the Committee apply the Participant's Accounts to satisfy the
Participant's repayment obligation, whether or not he or she is in default,
unless the amount so applied otherwise could be distributed in accordance with
the Plan.
A. NOTE AS TRUST ASSET. The note evidencing a loan to a Participant under this
Article shall be an asset of the Trust which is allocated to the Account of such
Participant, and shall for purposes of the Plan be deemed to have a value at any
given time equal to the unpaid principal balance of the note plus the amount of
any accrued but unpaid interest.
A. NONDISCRIMINATION. Loans shall be made available under this Article to all
Participants on a reasonably equivalent basis, except that the Committee may
make reasonable distinctions based on creditworthiness.
A. DESIGNATION OF ACCOUNTS. Loans shall be made from the Participant's Accounts
in the following order: (1) from his or her Rollover Account, if any, (2) from
his or her Matching Contribution Account, (3) from his or her Elective
Contribution Account, and (4) from the vested portion of his or her
Discretionary Contribution Account, if any. The crediting of loan repayments
shall be made to the foregoing Accounts in the same order and shall be allocated
among the investment options in accordance with the Participant's then-effective
instructions regarding the investment of contributions made on his or her
behalf.
A. SPOUSAL CONSENT TO LOANS TO CERTAIN FORMER PARTICIPANTS IN OTHER PLANS. In
the case of a married Participant for whom amounts have been transferred under
Section 4.6 from a transferor plan and who has at any time elected an annuity
form of payment under Section 8.7 or under the transferor plan, no loan shall be
made unless (a) the Participant's spouse consents in writing to such loan and to
the use of the Participant's Accounts as security for the loan, and such consent
acknowledges the effect of the loan and the use of the Accounts as security, is
witnessed by a Plan representative or a notary public, and is provided no more
than 90 days before the date on which the loan is to be secured by the Accounts,
or (b) it is established to the satisfaction of the Committee that the foregoing
consent may not be obtained because there is no spouse, because the spouse
cannot be located, or because of such other circumstances as the Secretary of
the Treasury may prescribe.
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II. ARTICLE BENEFITS UPON DEATH OR SEPARATION FROM SERVICE
A. SEPARATION FROM SERVICE FOR REASONS OTHER THAN DEATH. Following a
Participant's separation from the service of an Affiliated Employer for any
reason other than death, the Participant will receive the vested portion of his
or her Accounts in cash in a single sum or, if the Participant elects and the
value of such portion exceeds $3,500, in monthly, quarterly, semi-annual, or
annual installments over a period certain not to exceed the Participant's life
expectancy or the joint life and last survivor expectancy of the Participant and
his or her Beneficiary. An election to receive monthly, quarterly, semi-annual,
or annual installment distributions in lieu of a single sum, and the period over
which such installments are to be made, shall be made by the Participant on a
form approved by the Committee. Notwithstanding the foregoing, in the case of
Participant for whom amounts have been transferred under Section 4.6, the
Participant shall be entitled to elect any other form of distribution of his
benefits hereunder that would have been permitted under the transferor plan, as
set forth in Schedule B.
A. TIME OF DISTRIBUTIONS. Distribution with respect to a Participant's
separation from service normally will be made as soon as practicable after such
separation. In the case of a Participant whose Accounts are valued in excess of
$3,500 and who has not yet attained the Normal Retirement Age, however,
distribution may not be made under this Section unless
(a) between the 30th and 90th day prior to the date
distribution is to be made, the Committee notifies the Participant in
writing that he or she may defer distribution until the Normal
Retirement Age; and
(b) the Participant consents to the distribution in writing
after the information described above has been provided to him or her,
and files such consent with the Committee.
Notwithstanding the foregoing, such distribution may commence less than 30 days
after the required notification described above is given, provided that (i) the
Committee clearly informs the Participant that the Participant has a right to a
period of at least 30 days after receiving the notice to consider whether or not
to elect a distribution; and (ii) the Participant, after receiving the notice,
elects a distribution.
A Participant's Accounts will be considered to be valued in excess of $3,500 if
the value of such Accounts exceeds such amount at the time of the distribution
in question or exceeded such amount at the time of any prior distribution to the
Participant under the Plan. Distribution under this Section in all events will
be made no later than the 60th day after the close of the Plan Year in which
occurs the later of the Participant's separation from service or the
Participant's attainment of the Normal Retirement Age.
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A. AMOUNT OF DISTRIBUTION.
(a) SINGLE SUMS. In the case of a distribution to be made in a
single sum, the amount of the distribution shall be determined as of
the Valuation Date which immediately precedes the date distribution is
to be made.
(b) INSTALLMENTS. In the case of distributions to be made in
monthly, quarterly, semi-annual, or annual installments, the aggregate
installment amount for a particular calendar year (the "installment
year") shall be determined by dividing
(i) the value of the vested portion of the
Participant's Accounts as of the Valuation Date coinciding
with the beginning of the installment year by
(ii) the greater of (A) the number of remaining
installment years in the installment period elected by the
Participant as of the beginning of the installment year and
(B) the number of years in the applicable remaining life
expectancy for the installment year determined pursuant to
Regulation section 1.401(a)(9)-1, or (if the Participant's
Beneficiary is not his or her spouse) the applicable divisor
for the installment period determined under Regulation section
1.401(a)(9)-2. For purposes of determining the amount of any
installment distribution, life expectancies will not be
recalculated annually pursuant to Code section 401(a)(9)
unless the Participant elects otherwise. Any such election
shall be in writing on a form prescribed or approved by the
Committee and filed prior to the Participant's attainment of
age 70-1/2.
A. DISTRIBUTIONS AFTER A PARTICIPANT'S DEATH.
(a) Death Prior to Separation From Service. If a Participant
dies prior to his or separation from the service of the Company, the
Participant's Beneficiary will receive the Participant's Accounts in
either of the following forms, as elected by the Beneficiary on a form
approved by the Committee:
(i) in cash in a single sum as soon as practicable
following the Participant's death (but in no event later than
December 31 of the calendar year following the year of the
Participant's death); or
(ii) in monthly, quarterly, semi-annual, or annual
installments over a period certain not to exceed the life
expectancy of the Beneficiary, such installments to begin not
later than December 31 of the calendar year following the year
of the Participant's death and to be
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made in amounts determined in the same manner as under Section
8.3(b) above.
(b) Death After Separation From Service. If a Participant
dies after separation from service but before the complete distribution
of his or her Accounts has been made, the Participant's Beneficiary
will receive the vested portion of the Participant's Accounts.
Distribution will be made in cash in a single sum as soon as
practicable following the Participant's death (but no later than
December 31 of the calendar year following the year of the
Participant's death) provided, however, that if distribution to the
Participant had begun following his or her separation from service in a
form elected by the Participant, distribution will continue to be made
to the Beneficiary at least as rapidly in such form unless the
Beneficiary elects to receive the distribution in cash in a single sum
as soon as practicable following the Participant's death. Any such
election must be made on a form approved by the Committee and must be
received by the Committee within such period following the
Participant's death as the Committee may prescribe.
Any distribution to a Beneficiary under this Section shall be determined as of
the Valuation Date immediately preceding the date distribution is to be made.
A. DESIGNATION OF BENEFICIARY. Subject to the provisions of this Section, a
Participant's Beneficiary shall be the person or persons and entity or entities,
if any, designated by the Participant from time to time on a form approved by
the Committee. In the absence of an effective beneficiary designation, the full
amount payable upon the death of the Participant shall be paid to his or her
surviving spouse or, if none, to his or her issue per stirpes or, if no issue,
to his or her heirs at law determined under the laws of intestacy of the
jurisdiction of his or her last domicile. If any of such issue is a minor, the
Trustee may deposit his or her share in a savings account to his or her credit.
If any Beneficiary survives the Participant but dies prior to receipt of his or
her interest in the Participant's Account, such beneficiary's remaining interest
shall be paid to the beneficiary's estate (unless the Participant had
effectively designated a successor or contingent Beneficiary for the
Beneficiary's remaining interest). A nonspouse beneficiary designation by a
Participant who is married at the time of his or her death shall not be
effective unless
(a) prior to the Participant's death, the Participant's
surviving spouse consented to and acknowledged the effect of the
Participant's designation of a specific non-spouse Beneficiary
(including any class of Beneficiaries or any contingent Beneficiaries)
on a written form approved by the Committee and witnessed by a notary
public or a duly authorized Plan representative; or
(b) it is established to the satisfaction of the Committee
that spousal consent may not be obtained because there is no spouse,
because the spouse has
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died (evidenced by a certificate of death), because the spouse cannot
be located (based on information supplied by a government agency or
independent investigator), or because of such other circumstances as
the Secretary of the Treasury may prescribe; or
(c) the spouse had earlier executed a general consent form
permitting the Participant (i) to select from among certain specified
beneficiaries without any requirement of further consent by the spouse
(and the Participant designates a Beneficiary from the specified list),
or (ii) to change his or her Beneficiary without any requirement of
further consent by the spouse. Any such general consent shall be on a
form approved by the Committee, and must acknowledge that the spouse
has the right to limit consent to a specific beneficiary and that the
spouse voluntarily elects to relinquish such right.
In the event a spouse is legally incompetent to give consent, the spouse's legal
guardian, even if the guardian is the Participant, may give consent on behalf of
the spouse. Any consent and acknowledgment by (or on behalf of) a spouse, or the
establishment that the consent and acknowledgment cannot be obtained, shall be
effective only with respect to such spouse, but shall be irrevocable once made.
A. DIRECT ROLLOVERS OF ELIGIBLE DISTRIBUTIONS. Notwithstanding any provision of
the Plan to the contrary that may otherwise limit a distributee's election under
this Section, for Plan Years beginning after December 31, 1992, a distributee
may elect, at the time and in the manner prescribed by the Committee, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover. For purposes
of this Section, the following terms have the following meanings:
(a) 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 of the distributee
and the distributee's Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under Code section 401(a)(9); 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).
(b) with respect to a distributee other than the Participant's
surviving spouse, an "eligible retirement plan" is an individual
retirement account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust described in
Code section 401(a). With respect to a distributee who is a
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Participant's surviving spouse, an eligible retirement plan is an
individual retirement account or an individual retirement annuity.
(c) 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 an
alternate payee under a Qualified Domestic Relations Order, are
distributees with regard to the interest of the spouse or former
spouse.
(d) a "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
A. SPECIAL RULES FOR FORMER PARTICIPANTS IN MERGED PLANS. If the vested portion
of the Account of a Participant for whom accounts have been transferred under
Section 4.6 from a transferor plan to which the requirements of Code section
401(a)(11) were applicable at the time of the transfer, as indicated on Schedule
B, becomes payable under Section 8.1, and if the Participant elects during the
90-day period preceding his or her annuity starting date (or has elected at any
time under the transferor plan) the payment of benefits in the form of a life
annuity, the Participant's vested portion of his or her Accounts shall be
applied to the purchase from an insurance company of a single premium
nontransferable annuity contract providing (a) if the Participant is married on
his or her annuity starting date, an annuity for the life of the Participant,
and upon the death of the Participant providing a further annuity for the life
of the spouse (to whom the Participant was married on his or her annuity
starting date) in an amount equal to 50 percent of the amount of the annuity
payable during the joint lives of the Participant and his or her spouse, and (b)
if the Participant is not married on his or her annuity starting date, an
annuity for the life of the Participant. Any Participant subject to the
provisions of this Section 8.7 may elect, during the 90-day period preceding his
or her annuity starting date, not to have his or her vested Account balance
applied to purchase the annuity described above and either (1) to have his or
her vested Account balance distributed in the form of a single cash lump sum
payment or (2) to have his or her vested Account balance applied to the purchase
from an insurance company of a single premium nontransferable annuity contract
providing any form of optional form of payment provided under the transferor
plan, as described on Schedule B applicable to such transferor plan.
If the Participant is married on his or her annuity starting date, any
election pursuant to the preceding sentence shall be effective only if:
(i) his or her spouse consents in writing to such election
and, if applicable, to distribution of the Participant's vested Account
balance before age 65, such consent acknowledges the effect of the
election and is witnessed by a Plan representative or a notary public,
and such consent either (1) specifies the form of distribution to the
Participant and, if distribution is to be made in installments, any
nonspouse Beneficiary (including any class of Beneficiaries or
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any contingent Beneficiaries), or (2) authorizes the Participant to
change the form of distribution or the Beneficiary without further
consent, or
(ii) it is established to the satisfaction of the Committee
that the foregoing consent may not be obtained because the spouse
cannot be located, or because of such other circumstances as the
Secretary of the Treasury may prescribe,
(iii) the Participant elects a joint and survivor annuity
naming his or her surviving spouse as beneficiary which provides a
survivor annuity greater than 50 percent of the annuity payable during
the joint lives of the Participant and his or her spouse.
Any consent by a spouse under (i) above, or a determination by the Committee
under (ii) above with respect to such spouse, shall be effective only with
respect to such spouse and shall be obtained within 90 days prior to the annuity
starting date. Any such consent shall be irrevocable. Any such consent that
authorizes the Participant to change the form of distribution of the Beneficiary
without further consent must acknowledge the spouse's right to limit consent to
specific form of distribution and Beneficiary and the spouse's voluntary
election to relinquish such right. For purposes of this Section 8.7, the term
"annuity starting date" means the first day of the first period for which an
annuity is payable under the annuity contract described above.
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I. ARTICLE ADMINISTRATION.
A. COMMITTEE. The Plan will be administered by a committee of individuals
selected by the Board of Directors to serve at its pleasure. The Committee will
be a "named fiduciary" for purposes of Section 402(a)(1) of ERISA with authority
to control and manage the operation and administration of the Plan, and will be
responsible for complying with all of the reporting and disclosure requirements
of Part 1 of Subtitle B of Title I of ERISA. The Committee will not, however,
have any authority over the investment of assets of the Trust in its capacity as
Committee.
A. POWERS OF COMMITTEE. The Committee will have full discretionary power to
administer the Plan in all of its details, subject, however, to the requirements
of ERISA. For this purpose the Committee's discretionary power will include, but
will not be limited to, the following authority:
(a) to make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan or
required to comply with applicable law;
(b) to interpret the Plan;
(c) to decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan;
(d) to compute the amounts to be distributed under the Plan,
and to determine the person or persons to whom such amounts will be
distributed;
(e) to authorize the payment of distributions;
(f) to keep such records and submit such filings, elections,
applications, returns or other documents or forms as may be required
under the Code and applicable regulations, or under other federal,
state or local law and regulations;
(g) to allocate and delegate its ministerial duties and
responsibilities and to appoint such agents, counsel, accountants and
consultants as may be required or desired to assist in administering
the Plan; and
(h) by written instrument, to allocate and delegate its
fiduciary responsibilities in accordance with ERISA section 405.
A. EFFECT OF INTERPRETATION OR DETERMINATION. Any interpretation of the Plan or
other determination with respect to the Plan by the Committee shall be final and
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conclusive on all persons in the absence of clear and convincing evidence that
the Committee acted arbitrarily and capriciously.
A. RELIANCE ON TABLES, ETC. In administering the Plan, the Committee will be
entitled, to the extent permitted by law, to rely conclusively on all tables,
valuations, certificates, opinions and reports which are furnished by any
accountant, trustee, counsel or other expert who is employed or engaged by the
Committee or by the Plan Sponsor on the Committee's behalf.
A. CLAIMS AND REVIEW PROCEDURES. The Committee shall adopt procedures for the
filing and review of claims in accordance with ERISA section 503.
A. INDEMNIFICATION OF COMMITTEE AND ASSISTANTS. Each Participating Employer
agrees, jointly and severally, to indemnify and defend to the fullest extent of
the law any Employee or former Employee (a) who serves or has served as
Committee, (b) who has been appointed to assist the Committee in administering
the Plan, or (c) to whom the Committee has delegated any of its duties or
responsibilities against any liabilities, damages, costs and expenses (including
attorneys' fees and amounts paid in settlement of any claims approved by the
Plan Sponsor) occasioned by any act or omission to act in connection with the
Plan, if such act or omission to act is in good faith and without gross
negligence.
A. ANNUAL REPORT. The Committee shall submit annually to the Employer a report
showing in reasonable summary form, the financial position of the Trust and
giving a brief account of the operations of the Plan for the past year, and such
further information as the Plan Sponsor may reasonably require.
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II. ARTICLE AMENDMENT AND TERMINATION.
A. AMENDMENT. The Plan Sponsor reserves the power at any time or times to amend
the provisions of the Plan and Trust to any extent and in any manner that it may
deem advisable. Upon delivery to the Trustee and each Participating Employer of
an amendment adopted by the Board of Directors, the Plan shall be amended at the
time and in the manner set forth therein, and all Participants and all persons
claiming an interest hereunder shall be bound thereby. Moreover, the Plan
Sponsor may amend or modify any plan provisions which relate to ERISA section
404(c) compliance, including changes which would eliminate the Plan's status as
an ERISA section 404(c) plan. However, the Plan Sponsor will not have the power:
(a) to amend the Plan or Trust in such manner as would cause
or permit any part of the assets of the Trust to be diverted to
purposes other than for the exclusive benefit of each Participant and
his or her Beneficiary (except as permitted by the Plan with respect to
Qualified Domestic Relations Orders or the return of contributions upon
nondeductibility, mistake of fact, or the failure to qualify
initially), unless such amendment is required or permitted by law,
governmental regulation or ruling; or
(b) to amend the Plan or Trust retroactively in such a manner
as would reduce the accrued benefit of any Participant, except as
otherwise permitted or required by law. For purposes of this paragraph,
an amendment which has the effect of decreasing a Participant's Account
balance or eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment, shall be treated
as reducing an accrued benefit.
A. TERMINATION. The Plan Sponsor has established the Plan and authorized the
establishment of the Trust with the bona fide intention and expectation that
contributions will be continued indefinitely, but may discontinue contributions
under the Plan or terminate the Plan at any time by written notice delivered to
the Trustee without liability whatsoever for any such discontinuance or
termination. In addition, the Participating Employers will have no obligation or
liability whatsoever to maintain the Plan for any given length of time and may
cease to be Participating Employers in a manner acceptable to the Plan Sponsor.
A. DISTRIBUTIONS UPON TERMINATION OF THE PLAN. Upon termination of the Plan by
the Plan Sponsor, the Trustee will distribute to each Participant (or other
person entitled to distribution) the value of the Participant's Accounts in a
single sum as soon as practicable following such termination. The amount of such
distribution shall be determined as of the Valuation Date immediately preceding
the date distribution is to be made.
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A. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In case of any
merger or consolidation of the Plan with, or transfer of assets and liabilities
of the Plan to, any other plan, provision must be made so that each Participant
would, if the Plan then terminated, receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the benefit
he or she would have been entitled to receive immediately before the merger,
consolidation or transfer if the Plan had then terminated.
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II. ARTICLE LIMITS ON CONTRIBUTIONS.
A. CODE SECTION 404 LIMITS. The sum of the contributions made by each
Participating Employer under the Plan for any Plan Year shall not exceed the
maximum amount deductible under the applicable provisions of the Code. All
contributions under the Plan made by a Participating Employer are expressly
conditioned on their deductibility under Code section 404 for the taxable year
when paid (or treated as paid under Code section 404(a)(6)).
A. CODE SECTION 415 LIMITS.
(a) Incorporation by reference. Code section 415 is hereby
incorporated by reference into the Plan.
(b) Annual addition. The Committee shall determine an "annual
addition" for each Participant for each limitation year, which shall
consist of the following amounts:
(i) Elective Contributions allocated to the
Participant's Accounts for the year;
(ii) Qualified Nonelective Contributions allocated to
the Participant's Accounts for the year;
(iii) amounts allocated to an individual medical
amount (as defined in Code section 415(l)(2)) which is part of
a pension or annuity plan maintained by an Affiliated
Employer; and
(iv) amounts derived from contributions paid or
accrued which are attributable to post-retirement medical
benefits allocated to the separate account of a key employee
(as defined in Code section 419A(d)(3)) under a welfare
benefit fund (as defined in Code section 419(e)) maintained by
an Affiliated Employer.
(c) General limitation on annual additions. The annual
addition of a Participant under (b) above for any limitation year, when
added to the annual additions to his or her accounts for such year
under all other defined contribution plans maintained by the Affiliated
Employers, shall not exceed the lesser of (i) $30,000 (increased from
time to time in accordance with Code section 415(d)), or (ii) 25% of
the Participant's Compensation for such limitation year.
(d) Combined limitations. In the case of a Participant who
also participates in a defined benefit plan maintained by an Affiliated
Employer, the annual addition for a limitation year will, if necessary,
be further limited so that
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the sum of the Participant's defined contribution fraction and his or
her defined benefit plan fraction for such limitation year does not
exceed 1.0.
(i) A Participant's "defined contribution fraction"
shall be a fraction, the numerator of which is the sum of
the annual additions to the Participant's accounts under all
the defined contribution plans (whether or not terminated)
maintained by an Affiliated Employer for the current and all
prior limitation years (including the annual additions
attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by an Affiliated Employer, and the
annual additions attributable to all welfare benefit funds,
as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(l)(2) of the
Code, maintained by an Affiliated Employer), and the
denominator of which is the sum of the maximum aggregate
amounts for the current and all prior limitation years of
service with the Affiliated Employers (regardless of whether
a defined contribution plan was maintained by an Affiliated
Employer). The maximum aggregate amount in any limitation
year is the lesser of 125 percent of the dollar limitation
determined under Code sections 415(b) and (d) in effect
under Code section 415(c)(1)(A) or 35 percent of the
Participant's Compensation for such year.
(ii) A Participant's "defined benefit fraction"
shall be a fraction, the numerator of which is the sum of
the Participant's projected annual benefits under all the
defined benefit plans (whether or not terminated) maintained
by an Affiliated Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation
determined for the limitation year under Code sections
415(b) and (d) or 140 percent of the highest average
compensation, including any adjustments under Code section
415(b).
(e) Limitation Year. For purposes of determining the Code
section 415 limits under the Plan, the "limitation year" shall be the
Plan Year.
(f) Order of reductions. To the extent necessary to satisfy
the limitations of Code section 415 for any Participant, the annual
addition which would otherwise be made on behalf of the Participant
under the Plan shall be reduced before the Participant's benefit is
reduced under any and all defined benefit plans, and before the
Participant's annual addition is reduced under any other defined
contribution plan.
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(g) Return of excess contributions. If, as a result of a
reasonable error in estimating a Participant's Compensation for a Plan
Year or limitation year, a reasonable error in determining the amount
of elective deferrals (within the meaning of Code section 402(g)(3))
that may be made with respect to any individual under the limits of
Code section 415, or under such other facts and circumstances as may be
permitted under regulation or by the Internal Revenue Service, the
annual addition under the Plan for a Participant would cause the Code
section 415 limitations for a limitation year to be exceeded, the
excess amounts shall be held in an unallocated suspense account and
allocated in subsequent years in accordance with the rules provided in
Internal Revenue Service Reg. Section 1.415-6(b)(6)(i).
A. CODE SECTION 402(g) LIMITS.
(a) In general. The maximum amount of Elective Contributions
made on behalf of any Participant for any calendar year, when added to
the amount of elective deferrals under all other plans, contracts and
arrangements of an Affiliated Employer with respect to the Participant
for the calendar year), shall in no event exceed the maximum applicable
limit in effect for the calendar year under Regulation section
1.402(g)-1(d). For purposes of the Plan, an individual's elective
deferrals for a taxable year are the sum of the following:
(i) Any elective contribution under a qualified cash
or deferred arrangement (as defined in Code section 401(k)) to
the extent not includible in the individual's gross income for
the taxable year on account of Code section 402(a)(8) (before
applying the limits of Code section 402(g) or this section);
(ii) Any employer contribution to a simplified
employee pension (as defined in code section 408(k) to the
extent not includible in the individual's gross income for the
taxable year on account of Code section 402(h)(1)(B) (before
applying the limits of Code section 402(g)); and
(iii) Any employer contribution to a custodial
account or annuity contract under section 403(b) under a
salary reduction agreement (within the meaning of Code section
3121(a)(5)(D)), to the extent not includible in the
individual's gross income for the taxable year on account of
Code section 403(b) before applying the limits of Code section
402(g).
A Participant will be considered to have made "excess deferrals" for a
taxable year to the extent that the Participant's elective deferrals for the
taxable year exceed the applicable limit described above for the year.
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(b) Distribution of excess deferrals. In the event that an
amount is included in a Participant's gross income for a taxable year
as a result of an excess deferral under Code section 402(g), and the
Participant notifies the Committee on or before the March 1 following
the taxable year that all or a specified part of an Elective
Contribution made for his or her benefit represents an excess deferral,
the Committee shall make every reasonable effort to cause such excess
deferral, adjusted for allocable income, to be distributed to the
Participant no later than the April 15 following the calendar year in
which such excess deferral was made. The income allocable to excess
deferrals is equal to the allocable gain or loss for the taxable year
of the individual, but not the allocable gain or loss for the period
between the end of the taxable year and the date of distribution (the
"gap period"). Income allocable to excess deferrals for the taxable
year shall be determined by multiplying the gain or loss attributable
to the Participant's Elective Contribution Account for the taxable year
by a fraction, the numerator of which is the Participant's excess
deferrals for the taxable year, and the denominator of which is the sum
of the Participant's Elective Contribution Account balance as of the
beginning of the taxable year plus the Participant's Elective
Contributions for the taxable year. No distribution of an excess
deferral shall be made during the taxable year of a Participant in
which the excess deferral was made unless the correcting distribution
is made after the date on which the Plan received the excess deferral
and both the Participant and the Plan designate the distribution as a
distribution of an excess deferral. The amount of any excess deferrals
that may be distributed to a Participant for a taxable year shall be
reduced by the amount of Elective Contributions that were excess
contributions and were previously distributed to the Participant for
the Plan Year beginning with or within such taxable year.
(c) Treatment of excess deferrals. For other purposes of the
Code, including Code sections 401(a)(4), 401(k)(3), 404, 409, 411, 412,
and 416, excess deferrals must be treated as employer contributions
even if they are distributed in accordance with paragraph (b) above.
However, excess deferrals of a non-Highly Compensated Employee are not
to be taken into account for purposes of Code section 401(k)(3) (the
actual deferral percentage test) to the extent the excess deferrals are
prohibited under Code section 401(a)(30). Excess deferrals are also to
be treated as employer contributions for purposes of Code section 415
unless distributed under paragraph (b) above.
A. CODE SECTION 401(k)(3) LIMITS.
(a) In general. Elective Contributions made under the Plan are
subject to the limits of Code section 401(k)(3), as more fully
described below. The Plan provisions relating to the 401(k)(3) limits
are to be interpreted and applied in accordance with Code sections
401(k)(3) and 401(a)(4), which are hereby incorporated by reference,
and in such manner as to satisfy such other
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requirements relating to Code section 401(k) as may be prescribed by
the Secretary of the Treasury from time to time.
(b) Actual deferral ratios. For each Plan Year, the Committee
will determine the "actual deferral ratio" for each Participant who is
eligible for Elective Contributions. The actual deferral ratio shall be
the ratio, calculated to the nearest one-hundredth of one percent, of
the Elective Contributions (plus any Qualified Nonelective
Contributions treated as Elective Contributions) made on behalf of the
Participant for the Plan Year to the Participant's Compensation for the
applicable period. For purposes of determining a Participant's actual
deferral ratio,
(i) Elective Contributions will be taken into account
only if each of the following requirements are satisfied:
(A) the Elective Contribution is allocated
to the Participant's Elective Contribution Account as
of a date within the Plan Year, is not contingent
upon participation in the Plan or performance of
services on any date subsequent to that date, and is
actually paid to the Trust no later than the end of
the 12-month period immediately following the Plan
Year to which the contribution relates; and
(B) the Elective Contribution relates to
Compensation that either would have been received by
the Participant in the Plan Year but for the
Participant's election to defer under the Plan, or is
attributable to services performed in the Plan Year
and, but for the Participant's election to defer,
would have been received by the Participant within
2-1/2 months after the close of the Plan Year.
To the extent Elective Contributions which meet the
requirements of (A) and (B) above constitute excess deferrals,
they will be taken into account for each Highly Compensated
Employee, but will not be taken into account for any
non-Highly Compensated Employee;
(ii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to
have elective deferrals (and qualified nonelective
contributions, to the extent treated as elective deferrals)
allocated to his or her accounts under two or more cash or
deferred arrangements described in Code section 401(k)
maintained by an Affiliated Employer, the Participant's
actual deferral ratio shall be determined as if such
elective deferrals (as well as qualified nonelective or
qualified ) are made under a single arrangement, and if two
or more of the cash or deferred arrangements have different
Plan Years, all Plan
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Years ending with or within the same calendar year shall be
treated as a single Plan Year;
(iii) for purposes of determining the actual deferral
ratio of a Participant who is a 5 percent owner or one of the
10 most highly paid Highly Compensated Employees, the Elective
Contributions (and any Qualified Nonelective Contributions
treated as Elective Contributions) and Compensation of such
Participant shall include the Elective Contributions (and
Qualified Nonelective Contributions treated as Elective
Contributions) and Compensation for the Plan Year of the
Participant's family members (as defined in Code section
414(q)(6)), such family members shall be disregarded as
separate employees for purposes of determining the actual
deferral ratio of both Highly Compensated Employees and
non-Highly Compensated Employees, and in the event that there
are excess contributions with respect to such family members,
the excess shall be allocated among such family members in
proportion to their Elective Contributions;
(iv) the applicable period for determining
Compensation for each Participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided, that to the extent permitted under Regulations, the
Committee may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was eligible to make Elective
Contributions;
(v) Qualified Nonelective Contributions made on
behalf of Participants who are eligible to receive Elective
Contributions shall be treated as Elective Contributions to
the extent permitted by Regulation section 1.401(k)-1(b)(5);
(vi) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
plan year, or if one or more other plans with the same Plan
Year satisfy such Code sections only if aggregated with this
Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single
plan;
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(vii) an employee who would be a Participant but for
the failure to make Elective Contributions shall be treated as
a Participant on whose behalf no Elective Contributions are
made; and
(viii) Elective Contributions which are made on
behalf of non-Highly Compensated Employees which could be used
to satisfy the Code section 401(k)(3) limits but are not
necessary to be taken into account in order to satisfy such
limits, may instead be taken into account for purposes of the
Code section 401(m) limits to the extent permitted by
Regulation sections 1.401(m)-1(b)(5).
(c) Actual deferral percentages. The actual deferral ratios
for all Highly Compensated Employees who are eligible for Elective
Contributions for a Plan Year shall be averaged to determine the actual
deferral percentage for the highly compensated group for the Plan Year,
and the actual deferral ratios for all Employees who are not Highly
Compensated Employees but are eligible for Elective Contributions for
the Plan Year shall be averaged to determine the actual deferral
percentage for the nonhighly compensated group for the Plan Year. The
actual deferral percentages for any Plan Year must satisfy at least one
of the following tests:
(i) the actual deferral percentage for the highly
compensated group does not exceed 125% of the actual deferral
percentage for the nonhighly compensated group; or
(ii) the excess of the actual deferral percentage for
the highly compensated group over the actual deferral
percentage for the nonhighly compensated group does not exceed
two percentage points, and the actual deferral percentage for
the highly compensated group does not exceed twice the actual
deferral percentage of the nonhighly compensated group.
(d) Adjustments by Committee. If, prior to the time all
Elective Contributions for a Plan Year have been contributed to the
Trust, the Committee determines that Elective Contributions are being
made at a rate which will cause the Code section 401(k)(3) limits to be
exceeded for the Plan Year, the Committee may, in its sole discretion,
limit the amount of Elective Contributions to be made with respect to
one or more Highly Compensated Employees for the balance of the Plan
Year by suspending or reducing Elective Contribution elections to the
extent the Committee deems appropriate. Any Elective Contributions
which would otherwise be made to the Trust shall instead be paid to the
affected Participant in cash.
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(e) Excess contributions. If the Code section 401(k)(3) limits
have not been met for a Plan Year after all contributions for the Plan
Year have been made, the Committee will determine the amount of excess
contributions with respect to Participants who are Highly Compensated
Employees. To do so, the Committee will reduce the actual deferral
ratio of the Highly Compensated Employee with the highest actual
deferral ratio to the extent necessary to (i) enable the Plan to
satisfy the 401(k)(3) limits or (ii) cause such employee's actual
deferral ratio to equal the actual deferral ratio of the Highly
Compensated Employee with the next highest actual deferral ratio, and
will repeat this process until the Plan satisfies the Code section
401(k)(3) limits. The amount of excess contributions for each Highly
Compensated Employee for the Plan Year shall equal the amount of
Elective Contributions (plus Qualified Nonelective Contributions which
are treated as Elective Contributions for purposes of the Code section
401(k)(3) limits) actually made to the Trust for the Plan Year, less
the product of the (i) the Highly Compensated Employee's reduced actual
deferral ratio as determined under the preceding sentence, and (ii) his
or her Compensation. Any excess contributions will be distributed as
provided below. In no event will excess contributions remain
unallocated or be allocated to a suspense account for allocation in a
future Plan Year.
(f) Family Aggregation. The determination and correction of
excess contributions with respect to a Highly Compensated Employee
whose actual deferral ratio is determined pursuant to the family
aggregation rules will be accomplished by reducing the actual deferral
ratio as required above and allocating the excess contributions for the
family group among family members in proportion to the Elective
Contribution of each family member that is combined to determine the
actual deferral ratio.
(g) Distribution of excess contributions. A Participant's
excess contributions, adjusted for income, will be designated by the
Participating Employer as a distribution of excess contributions and
distributed to the Participant. The income allocable to excess
contributions is equal to the allocable gain or loss for the Plan Year,
but not the allocable gain or loss for the period between the end of
the Plan Year and the date of distribution (the "gap period"). Income
allocable to excess contributions for the Plan Year shall be determined
by multiplying the gain or loss attributable to the Participant's
Elective Contribution Account and QNEC Account balances by a fraction,
the numerator of which is the excess contributions for the Participant
for the Plan Year, and the denominator of which is the sum of the
Participant's Elective Contribution Account and QNEC Account balances
as of the beginning of the Plan Year plus the Participant's Elective
Contributions and Qualified Nonelective Contributions for the Plan
Year. Distribution of excess contributions will be made after the close
of the Plan Year to which the contributions relate, but within 12
months
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after the close of such Plan Year. Excess contributions shall be
treated as annual additions under the Plan, even if distributed under
this paragraph.
(h) Special rules. For purposes of distributing excess
contributions, the amount distributed with respect to a Highly
Compensated Employee for a Plan Year shall be reduced by the amount of
excess deferrals previously distributed to the Highly Compensated
Employee for his or her taxable year ending with or within such Plan
Year.
(i) Recordkeeping requirement. The Committee, on behalf of the
Participating Employers, shall maintain such records as are necessary
to demonstrate compliance with the Code section 401(k)(3) limits,
including the extent to which Qualified Nonelective Contributions are
taken into account in determining the actual deferral ratios.
(j) Excise tax where failure to correct. If the excess
contributions are not corrected within 2-1/2 months after the close of
the Plan Year to which they relate, the Participating Employers will be
liable for a 10 percent excise tax on the amount of excess
contributions attributable to them, to the extent provided by Code
section 4979. Qualified Nonelective Contributions properly taken into
account under this Section for the Plan Year may enable the Plan to
avoid having excess contributions, even if the contributions are made
after the close of the 2-1/2 month period.
A. CODE SECTION 401(m) LIMITS.
(a) In General. Matching Contributions made under the Plan are
subject to the limits of Code section 401(m), as more fully described
below. The Plan provisions relating to the 401(m) limits are to be
interpreted and applied in accordance with Code sections 401(m) and
401(a)(4), which are hereby incorporated by reference, and in such
manner as to satisfy such other requirements relating to Code section
401(m) as may be prescribed by the Secretary of the Treasury from time
to time.
(b) Actual contribution ratios. For each Plan Year, the
Administrator will determine the "actual contribution ratio" for each
Participant who is eligible for Matching Contributions. The actual
contribution ratio shall be the ratio, calculated to the nearest
one-hundredth of one percent, of the sum of the Matching Contributions
and Qualified Nonelective Contributions which are not treated as
Elective Contributions made on behalf of the Participant for the Plan
Year, to the Participant's Compensation for the Plan Year. For purposes
of determining a Participant's actual contribution ratio,
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(i) A Matching Contribution will be taken into
account only if the Contribution is allocated to a
Participant's Account as of a date within the Plan Year, is
actually paid to the Trust no later than 12 months after the
close of the Plan Year, and is made on behalf of a Participant
on account of the Participant's Elective Contributions for the
Plan Year;
(ii) for purposes of determining the actual
contribution ratio of a Participant who is a 5 percent owner
or one of the 10 most highly paid Highly Compensated
Employees, the Matching Contributions and Compensation of such
Participant shall include the Matching Contributions,
Qualified Nonelective Contributions treated as Matching
Contributions, and Compensation for the Plan Year of the
Participant's family members (as defined in Code section
414(q)(6)), and such family members shall be disregarded as
separate employees for purposes of determining the actual
contribution ratio of both Highly Compensated Employees and
non-Highly Compensated Employees;
(iii) in the case of a Participant who is a Highly
Compensated Employee for the Plan Year and is eligible to have
Matching Contributions or employee contributions (including
amount treated as Matching Contributions) allocated to his or
her accounts under two or more plans maintained by an
Affiliated Employer which may be aggregated for purposes of
Code sections 410(b) and 401(a)(4), the Participant's actual
contribution ratio shall be determined as if such
contributions are made under a single plan, and if two or more
of the plans have different Plan Years, all Plan Years ending
with or within the same calendar year shall be treated as a
single Plan Year;
(iv) the applicable period for determining
Compensation for each Participant for a Plan Year shall be the
12-month period ending on the last day of such Plan Year;
provided that to the extent permitted under Regulations, the
Administrator may choose, on a uniform basis, to treat as the
applicable period only that portion of the Plan Year during
which the individual was eligible for Matching Contributions;
(v) Elective Contributions not applied to satisfy the
Code section 401(k)(3) limits and Qualified Nonelective
Contributions not treated as Elective Contributions may be
treated as Matching Contributions to the extent permitted by
Regulation section 1.401(m)-1(b)(5);
(vi) in the event that the Plan satisfies the
requirements of Code sections 401(k), 410(a)(4), or 410(b)
only if aggregated with one or more other plans with the same
Plan Year, or if one or more other plans with the same Plan
Year satisfy such code sections only if aggregated
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with this Plan, then this section shall be applied by
determining the actual deferral ratios as if all such plans
were a single plan; and
(vii) any forfeitures under the Plan which are
applied against Matching Contributions shall be treated as
Matching Contributions.
(c) Actual contribution percentages. The actual contribution
ratios for all Highly Compensated Employees who are eligible for
Matching Contributions for a Plan Year shall be averaged to determine
the actual contribution percentage for the highly compensated group for
the Plan Year, and the actual contribution ratios for all Employees who
are not Highly Compensated Employees but are eligible for Matching
Contributions for the Plan Year shall be averaged to determine the
actual contribution percentage for the nonhighly compensated group for
the Plan Year. The actual contribution percentages for any Plan Year
must satisfy at least one of the following tests:
(i) The actual contribution percentage for the highly
compensated group does not exceed 125% of the actual
contribution percentage for the nonhighly compensated group;
or
(ii) The excess of the actual contribution percentage
for the highly compensated group over the actual contribution
percentage for the nonhighly compensated group does not exceed
two percentage points, and the actual contribution percentage
for the highly compensated group does not exceed twice the
actual contribution percentage of the nonhighly compensated
group.
(d) Multiple use test. In the event that (i) the actual
deferral percentage and actual contribution percentage for the highly
compensated group exceed 125% of the respective actual deferral and
actual contribution percentages for the nonhighly compensated group,
and (ii) the sum of the actual deferral percentage and the actual
contribution percentage for the highly compensated group exceeds the
"aggregate limit" within the meaning of Regulation section
1.401(m)-2(b)(3), the Administrator shall reduce the actual
contribution ratios of Highly Compensated Employees who had both an
actual deferral ratio and an actual contribution ratio for the Plan
Year to the extent required by such section and in the same manner as
described in paragraph (f) below.
(e) Adjustments by Administrator. If, prior to the time all
Matching Contributions for a Plan Year have been contributed to the
Trust, the Administrator determines that such contributions are being
made at a rate which will cause the Code section 401(m) limits to be
exceeded for the Plan Year, the Administrator may, in its sole
discretion, limit the amount of such contributions to be made with
respect to one or more Highly Compensated Employees for the
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balance of the Plan Year by limiting the amount of such contributions
to the extent the Administrator deems appropriate.
(f) Excess aggregate contributions. If the Code section 401(m)
limits have not been satisfied for a Plan Year after all contributions
for the Plan Year have been made, the excess of the aggregate amount of
the Matching Contributions (and any Qualified Nonelective Contribution
or elective deferral taken into account in computing the actual
contribution percentages) actually made on behalf of Highly Compensated
Employees for the Plan Year over the maximum amount of such
contributions permitted under Code section 401(m)(2)(A) shall be
considered to be "excess aggregate contributions". The Administrator
shall determine the amount of excess aggregate contributions made with
respect to each Participant who is a Highly Compensated Employee. To do
so, the Administrator will reduce the actual contribution ratio of the
Highly Compensated Employee with the highest actual contribution ratio
to the extent necessary to (i) enable the Plan to satisfy the section
401(m) limits or (ii) cause such employee's actual contribution ratio
to equal the actual contribution ratio of the Highly Compensated
Employee with the next highest actual contribution ratio, and will
repeat this process until the Plan satisfies the Code section 401(m)
limits. The amount of excess aggregate contributions for each Highly
Compensated Employee for the Plan Year shall equal the amount of
Matching Contributions (plus Elective Contributions and Qualified
Nonelective Contributions which are treated as Matching Contributions
for purposes of the Code section 401(m) limits) actually made to the
Trust for the Plan Year, less the product of (i) the Highly Compensated
Employee's reduced actual contribution ratio as determined under the
preceding sentence, and (ii) his or her Compensation. Any excess
aggregate contributions will be distributed as provided below to the
Highly Compensated Employee to which they are attributable. In no event
will excess aggregate contributions remain unallocated or be allocated
to a suspense account for allocation in a future Plan Year.
(g) Distribution of excess aggregate contributions. A
Participant's excess aggregate contributions, adjusted for income, will
be designated by the Participating Employer as a distribution of excess
aggregate contributions, and distributed to the Participant. The income
allocable to excess aggregate contributions is equal to the allocable
gain or loss for the taxable year of the individual, but not the
allocable gain or loss for the period between the end of the taxable
year and the date of distribution (the "gap period"). Income allocable
to excess aggregate contributions for the taxable year shall be
determined by multiplying the gain or loss attributable to the
Participant's Matching Contribution Account balances by a fraction, the
numerator of which is the excess aggregate contributions for the
Participant for the Plan Year, and the denominator of which is the sum
of the Participant's Matching Contribution Account balances as of the
beginning of the Plan Year plus the Participant's Matching
Contributions for the Plan Year. Distribution of excess aggregate
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contributions will be made after the close of the Plan Year to which
the contributions relate, but within 12 months after the close of such
Plan Year. Excess aggregate contributions shall be treated as employer
contributions for purposes of Code sections 401(a)(4), 404, and 415
even if distributed from the Plan.
(h) Special Rules. For purposes of distributing excess
aggregate contributions, the determination and distribution of excess
aggregate contributions with respect to a Highly Compensated Employee
whose actual contribution ratio is determined pursuant to the family
aggregation rules will be accomplished by reducing the actual
contribution ratio as required above and allocating the excess
aggregate contributions for the family group among family members in
proportion to the Matching Contributions of each family member that is
combined to determine the actual contribution ratio.
(i) Recordkeeping requirement. The Administrator, on behalf of
the Participating Employers, shall maintain such records as are
necessary to demonstrate compliance with the Code section 401(m)
limits, including the extent to which Elective Contributions and
Qualified Nonelective Contributions are taken into account in
determining the actual contribution ratios.
(j) Excise tax where failure to correct. If the excess
aggregate contributions are not corrected within 2-1/2 months after the
close of the Plan Year to which they relate, the Participating
Employers will be liable for a 10 percent excise tax on the amount of
excess aggregate contributions attributable to them, to the extent
provided by Code section 4979. Qualified Nonelective Contributions
properly taken into account under this section for the Plan Year may
enable the Plan to avoid having excess aggregate contributions, even if
the contributions are made after the close of the 2-1/2 month period.
A. SECTION 401(a)(26)/410(b) LIMITS.
(a) Notwithstanding anything in this Plan to the contrary, if
the number of Participants who are eligible to share in any
contribution for a Plan Year is such that the Plan would fail to meet
the requirements of Code sections 410(a)(26), 410(b)(1), or
410(b)(2)(A)(i), because a Participating Employer's contribution would
not be allocated to a sufficient number of Participants, then the group
of Participants eligible to share in the contribution for the Plan Year
will be increased to include such minimum number of Participants who
are not in the service of the Participating Employer on the anniversary
date, as may be necessary to satisfy the applicable tests under the
above Code sections. The Participants who will become eligible to share
in the contribution will be those participants who, when compared to
Participants who are similarly situated, completed the greatest number
of hours of service in the Plan Year before the termination of their
service.
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(b) The preceding paragraph will not be construed to permit
the reduction of any Participant's Account balance, and any amounts
which were allocated to Participants whose eligibility to share in the
contribution did not result from the application of the preceding
paragraph will not be reallocated to satisfy such requirements.
Instead, the Participating Employer will make an additional
contribution equal to the amount which the affected Participants would
have received had they been included initially in the allocation of the
Participating Employer's Contribution, even if it would cause the
contributions of the participating Employer for the Plan Year to exceed
the amount which is deductible by the Participating Employer for such
Plan Year under Code section 404. Any adjustments pursuant to this
paragraph will be considered to be a retroactive amendment of the Plan
which was adopted by the last day of the Plan Year.
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I. ARTICLE SPECIAL TOP-HEAVY PROVISIONS.
A. PROVISIONS TO APPLY. The provisions of this Article shall apply for any
top-heavy Plan Year notwithstanding anything to the contrary in the Plan.
A. MINIMUM CONTRIBUTION. For any Plan Year which is a top-heavy plan year, the
Participating Employers shall contribute to the Trust a minimum contribution on
behalf of each Participant who is not a key employee for such year and who has
not separated from service from the Affiliated Employers by the end of the Plan
Year, regardless of whether or not the Participant has elected to make Elective
Contributions for the Year. The minimum contribution shall, in general, equal 3%
of each such Participant's Compensation, but shall be subject to the following
special rules:
(a) If the largest contribution on behalf of a key employee
for such year, taking into account only Elective Contributions,
Matching Contributions (if any), Discretionary Contributions and
Qualified Nonelective Contributions, is equal to less than 3% of the
key employee's Compensation, such lesser percentage shall be the
minimum contribution percentage for Participants who are not key
employees. This special rule shall not apply, however, if the Plan is
required to be included in an aggregation group and enables a defined
benefit plan to meet the requirements of Code section 401(a)(4) or 410.
(b) No minimum contribution will be required with respect to a
Participant who is also covered by another top-heavy defined
contribution plan of an Affiliated Employer which meets the vesting
requirements of Code section 416(b) and under which the Participant
receives the top-heavy minimum contribution.
(c) If a Participant is also covered by a top-heavy defined
benefit plan of an Affiliated Employer, "5%" shall be substituted for
"3%" above in determining the minimum contribution.
(d) The minimum contribution with respect to any Participant
who is not a key employee for the particular year will be offset by any
Discretionary Contributions and any Qualified Nonelective
Contributions, but not any other type of contribution otherwise made
for the Participant's benefit for such year.
(e) If additional minimum contributions are required under
this Section, such contributions shall be credited to the Participant's
Discretionary Contribution Account.
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(f) A minimum contribution required under this Section shall
be made even though, under other Plan provisions, the Participant would
not otherwise be entitled to receive an allocation for the year because
of (i) the Participant's failure to complete 1,000 hours of service (or
any equivalent provided in the Plan), or (ii) the Participant's failure
to make mandatory contributions or Elective Contributions to the Plan,
or (iii) Compensation less than a stated amount.
A. ADJUSTMENT TO LIMITATION ON BENEFITS. For purposes of the Code section 415
limits, the definitions of "defined contribution plan fraction" and "defined
benefit plan fraction" contained therein shall be modified, for any Plan Year
which is a top-heavy Plan Year, by substituting "1.0" for "1.25" in Code
sections 415(e)(2)(B) and 415(e)(3)(B).
A. DEFINITIONS. For purposes of these top-heavy provisions, the following terms
have the following meanings:
(a) "key employee" means a key employee described in Code
section 416(i)(1), and "non-key employee" means any employee who is not
a key employee (including employees who are former key employees);
(b) "top-heavy plan year" means a Plan Year if any of the
following conditions exist:
(i) the top-heavy ratio for the Plan exceeds 60
percent and the Plan is not part of any required aggregation
group or permissive aggregation group of plans;
(ii) this Plan is a part of a required aggregation
group of plans but not part of a permissive aggregation group
and the top-heavy ratio for the group of plans exceeds 60
percent; or
(iii) the Plan is part of a required aggregation
group and part of a permissive aggregation group of plans and
the top-heavy ratio for the permissive aggregation group
exceeds 60 percent.
(c) "top-heavy ratio":
(i) If the employer maintains one or more defined
contribution plans (including any Simplified Employee Pension
Plan) and the employer has not maintained any defined benefit
plan which during the 5-year period ending on the
determination date(s) has or has had accrued benefits, the
top-heavy ratio for the Plan alone or for the required or
permissive aggregation group as appropriate is a fraction, the
numerator
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of which is the sum of the account balances of all key
employees on the determination date(s) (including any part of
any account balance distributed in the 5-year period ending on
the determination date(s)), and the denominator of which is
the sum of all account balances (including any part of an
account balance distributed in the 5-year period ending on the
determination date(s)), both computed in accordance with Code
section 416. Both the numerator and the denominator of the
top-heavy ratio are increased to reflect any contribution not
actually made as of the determination date, but which is
required to be taken into account on that date under Code
section 416.
(ii) If the employer maintains one or more defined
contribution plans (including any Simplified Employee Pension
Plan) and the employer maintains or has maintained one or more
defined benefit plans which during the 5-year period ending on
the determination date(s) has or has had any accrued benefits,
the top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of the account balances under the aggregated defined
contribution plan or plans for all key employees, determined
in accordance with (i) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans
for all key employees as of the determination date(s), and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all
participants, determined in accordance with (i) above, and the
present value of all accrued benefits under the defined
benefit plan or plans for all participants as of the
determination date(s), all determined in accordance with Code
section 416. The accrued benefits under a defined benefit plan
in both the numerator and denominator of the top-heavy ratio
are increased for any distribution of an accrued benefit made
in the 5-year period ending on the determination date.
(iii) For purposes of (i) and (ii) above, the value
of account balances and the present value of accrued benefits
will be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
determination date, except as provided in Code section 416 for
the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of a participant (A) who
is not a key employee but who was a key employee in a prior
year, or (B) who has not been credited with at least one Hour
of Service with any employer maintaining the plan at any time
during the 5-year period ending on the determination date will
be disregarded. The calculation of the top-heavy ratio, and
the extent to which distributions, rollovers, and transfers
are taken into account will be made in accordance with Code
section 416. Deductible employee contributions will not be
taken into account for purposes of computing the top-heavy
ratio. When
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aggregating plans, the value of account balances and accrued
benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
(iv) The accrued benefit of a Participant other than
a key employee shall be determined under (A) the method, if
any, that uniformly applies for accrual purposes under all
defined benefit plans maintained by the employer, or (B) if
there is no such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under the
fractional rule of Code section 411(b)(1)(C).
(d) The "permissive aggregation group" is the required
aggregation group of plans plus any other plan or plan of the employer
which, when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Code sections 401(a)(4)
and 410.
(e) The "required aggregation group" is (i) each qualified
plan of the employer in which at least one key employee participates or
participated at any time during the determination period (regardless of
whether the plan has terminated), and (ii) any other qualified plan of
the employer which enables a plan described in (i) to meet the
requirements of Code sections 401(a)(4) and 410(b).
(f) For purposes of computing the top-heavy ratio, the
"valuation date" shall be the last day of the applicable plan year.
(g) For purposes of establishing present value to compute the
top-heavy ratio, any benefit shall be discounted only for mortality and
interest based on the interest and mortality rates specified in the
defined benefit plan(s), if applicable.
(h) The term "determination date" means, with respect to the
initial plan year of a plan, the last day of such plan year and, with
respect to any other plan year of a plan, the last day of the preceding
plan year of such plan. The term "applicable determination date" means,
with respect to the Plan, the determination date for the Plan Year of
reference and, with respect to any other plan, the determination date
for any plan year of such plan which falls within the same calendar
year as the applicable determination date of the Plan.
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I. ARTICLE MISCELLANEOUS.
A. EXCLUSIVE BENEFIT RULE. No part of the corpus or income of the Trust
allocable to the Plan will be used for or diverted to purposes other than for
the exclusive benefit of each Participant and Beneficiary, except as otherwise
provided under the provisions of the Plan relating to Qualified Domestic
Relations Orders, the payment of reasonable expenses of administering the Plan,
the return of contributions upon nondeductibility or mistake of fact, or the
failure of the Plan to qualify initially.
A. LIMITATION OF RIGHTS. Neither the establishment of the Plan or the Trust, nor
any amendment thereof, nor the creation of any fund or account, nor the payment
of any benefits, will be construed as giving to any Participant or other person
any legal or equitable right against any Participating Employer or Committee or
Trustee, except as provided herein, and in no event will the terms of employment
or service of any Participant be modified or in any way be affected hereby. It
is a condition of the Plan, and each Participant expressly agrees by his or her
participation herein, that each Participant will look solely to the assets held
in the Trust for the payment of any benefit to which he or she is entitled under
the Plan.
A. NONALIENABILITY OF BENEFITS. The benefits provided hereunder will not be
subject to the voluntary or involuntary alienation, assignment, garnishment,
attachment, execution or levy of any kind, and any attempt to cause such
benefits to be so subjected will not be recognized, except to such extent as may
be required by law, except that if the Committee receives any Qualified Domestic
Relations Order that requires the payment of benefits hereunder or the
segregation of any Account, such benefits shall be paid, and such Account
segregated, in accordance with the applicable requirements of such Order. In
addition, the Account balance may be pledged as security for a loan from the
Plan in accordance with the Plan's loan procedures.
A. ADEQUACY OF DELIVERY. Any payment to be made under the Plan by the Trustee
may be made by the Trustee's check. Mailing to a person or persons entitled to
distributions hereunder at the addresses designated by the Participating
Employer or Committee shall be adequate delivery by the Trustee of such
distributions for all purposes. In the event the whereabout of a person entitled
to benefits under the Plan cannot be determined after diligent search by the
Committee, the Committee may place the benefits in a federally insured,
interest-bearing bank account opened in the name of such person. Such action
shall constitute a full distribution of such benefits under the terms of the
Plan and Trust.
A. GOVERNING LAW. The Plan and Trust will be construed, administered and
enforced according to the laws of Massachusetts to the extent such laws are not
preempted by ERISA.
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II. ARTICLE DEFINITIONS.
Wherever used in the Plan, the following terms have the following
meanings:
A. "ACCOUNTS" mean, for any Participant, the accounts established under the Plan
to which contributions made for the Participant's benefit, and any allocable
income, expense, gain and loss, are allocated.
A. "AFFILIATED EMPLOYER" means (a) the Plan Sponsor, (b) any corporation that is
a member of a controlled group of corporations (as defined in Code section
414(b)) of which the Plan Sponsor is also a member, (c) any trade or business,
whether or not incorporated, that is under common control (as defined in Code
section 414(c)) with the Plan Sponsor, (d) any trade or business that is a
member of an affiliated service group (as defined in Code section 414(m)) of
which the Plan Sponsor is also a member, or (e) to the extent required by
Regulations issued under Code section 414(o), any other organization; provided,
that the term "Affiliated Employer" shall not include any corporation or
unincorporated trade or business prior to the date on which such corporation,
trade or business satisfies the affiliation or control tests of, (b), (c), (d)
or (e) above. In identifying any "Affiliated Employers" for purposes of the Code
section 415 limits, the definitions in Code sections 414(b) and (c) shall be
modified as provided in Code section 415(h).
A. "BENEFICIARY" means any person entitled to receive benefits under the Plan
upon the death of a Participant.
A. "BOARD OF DIRECTORS" means the members of the Board of Directors of Boston
Scientific Corporation.
A. "CODE" means the Internal Revenue Code of 1986, as amended from time to time.
Reference to any section or subsection of the Code includes reference to any
comparable or succeeding provisions of any legislation which amends, supplements
or replaces such section or subsection, and also includes reference to any
Regulation issued pursuant to or with respect to such section or subsection.
A. "COMMITTEE" means the entity or persons appointed by the Board of Directors
to administer the Plan pursuant to its provisions.
A. "COMPANY STOCK" means any stock of the Employer or an Affiliate constituting
a "qualifying employer security" within the meaning of section 407(d)(5) of
ERISA.
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A. "COMPENSATION" means,
(a) for purposes of determining the Code section 415 limits and the
amount of any minimum contribution under the special top-heavy provisions, the
Participant's wages as defined in Code section 3401(a) for purposes of income
tax withholding at the source but determined without regard to any rules that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed; and
(b) for all other purposes under the Plan, the same as in (a) above,
reduced by all of the following items (even if includible in gross income):
reimbursements or other expense allowances, bonuses, deferred compensation, and
moving expenses, provided however that any elective contributions made by the
Participating Employer that are not includible in gross income by reason of Code
section 125, 402(e)(3), 402(h), 403(b), or 451(b) shall in all cases be
includible as "Compensation" for purposes of this paragraph (b). Notwithstanding
the foregoing, for purposes of allocating Discretionary Contributions for a Plan
Year, commissions paid to any field sales commissioned Employee who is a Highly
Compensated Employee for such Plan Year shall be taken into consideration only
to the extent of the less of (i) fifty percent of the amount of the commissions
so paid, and (ii) the amount, not in excess of the commissions so paid, which
when added to all other amounts paid such Employee and qualifying as
Compensation results in an aggregate amount of Compensation of $85,000.
(c) Compensation shall include only that compensation which is actually
paid to the Participant during the applicable Plan Year. With respect to Plan
Years beginning on or after January 1, 1994, for all purposes under the Plan,
Compensation for any individual will be limited for any Plan Year to $150,000 as
adjusted by the Secretary of the Treasury under Code section 401(a)(17). If the
period for determining Compensation used in calculating a Participant's
allocation for a determination period is shorter than 12 months, the annual
Compensation limit shall be an amount equal to the otherwise applicable limit
multiplied by a fraction, the numerator of which is the number of months in the
period, and the denominator of which is 12. In determining the Compensation of a
Participant for purposes of this limitation, the family aggregation rules of
Code section 414(q)(6) shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the Plan Year. If, as a result of the application of such rules the adjusted
limitation is exceeded, then the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as determined
under this Section prior to the application of this limitation.
A. "DISABILITY" means a medically determinable physical or mental impairment
which makes a Participant unable to engage in any substantial gainful activity
and can be expected to result in death or to be of long-continued and indefinite
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duration, as determined by the Plan Sponsor or an Affiliated Employer after
taking the advice of a qualified physician.
A. "DISCRETIONARY CONTRIBUTION" means a contribution made for the benefit of a
Participant by a Participating Employer in the discretion of the Board of
Directors.
A. "DISCRETIONARY CONTRIBUTION ACCOUNT" means an Account to which Discretionary
Contributions are allocated.
A. "ELECTIVE CONTRIBUTION" means a contribution made to the Plan for the benefit
of a Participant pursuant to a compensation reduction authorization.
A. "ELECTIVE CONTRIBUTION ACCOUNT" means an Account to which Elective
Contributions are allocated.
A. "ELIGIBLE EMPLOYEE" means any Employee who is employed by a Participating
Employer, and who, in the opinion of his or her Participating Employer, may
reasonably be expected to complete 1,000 or more Hours of Service with a
Participating Employer in a Plan Year. Notwithstanding the foregoing, an
Employee employed by a Participating Employer who is not initially deemed to be
an Eligible Employee nevertheless shall be considered an Eligible Employee as of
the first January 1 or July 1 first following a computation period in which he
or she completes 1,000 or more Hours of Service with a Participating Employer,
provided he or she is employed by a Participating Employer on such day. The
initial computation period shall be the 12-consecutive month period beginning on
the date the Employee first performs an Hour of Service (the "employment
commencement date"). The succeeding computation periods commence with the first
Plan Year commencing after the Employee's employment commencement date. In no
event shall a "leased employee" within the meaning of Code section 414(n) become
an Eligible Employee until he or she becomes actually employed by a
Participating Employer.
A. "EMPLOYEE" means, effective as of January 1, 1989, any individual employed by
an Affiliated Employer, including any leased employee and any other individual
required to be treated as an employee pursuant to Code sections 414(n) and
414(o).
A. "ENTRY DATE" means the first day of each full pay period.
A. "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended, and any successor statute or statutes of similar import.
A. "HIGHLY COMPENSATED EMPLOYEE" means an Employee who is a
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"highly compensated employee" within the meaning of Code section 414(q). The
term Highly Compensated Employee includes highly compensated active Employees
and highly compensated former Employees.
(a) A highly compensated active Employee includes any Employee
who performs service for an Affiliated Employer during the
determination year and who, during the look-back year: (i) received
Compensation from the Affiliated Employers in excess of $75,000 (as
adjusted pursuant to Code section 414(q)(1); (ii) received Compensation
from the Affiliated Employers in excess of $50,000 (as adjusted
pursuant to Code section 414(q)(1) and was a member of the top-paid
group for such year; or (iii) was an officer of the Affiliated
Employers and received Compensation during such year that is greater
than 50 percent of the dollar limitation in effect under Code section
415(b)(1)(A).
(b) A highly compensated active Employee also includes: (i) an
Employee who is described in paragraph (a) if the term "determination
year" is substituted for the term "look-back year", and who is one of
the 100 Employees who received the most Compensation from the Employers
during the determination year; and (ii) an Employee who is a 5 percent
owner at any time during the look-back year or determination year. If
no officer has satisfied the compensation requirement of (a)(iii) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a Highly Compensated
Employee. For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the immediately preceding Plan Year.
(c) The Plan Sponsor may elect, subject to the conditions of
the Regulations under Code section 414(q), to treat as highly
compensated active Employees for any Plan Year those Employees
performing service for an Affiliated Employer during the Plan Year who,
during the Plan Year itself: (i) received Compensation from the
Affiliated Employers in excess of $75,000 (as adjusted pursuant to Code
section 414(q)(1); (ii) received Compensation from the Affiliated
Employers in excess of $50,000 (as adjusted pursuant to Code section
414(q)(1) and was a member of the top-paid group for such year; (iii)
was an officer of the Affiliated Employers and received Compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Code section 415(b)(1)(A); or (iv) is a 5
percent owner at any time during the Plan Year. If such an election is
made for a Plan Year, the provisions of (a) and (b) above shall not
apply.
(d) A highly compensated former Employee includes any Employee
who separated from service (or was deemed to have separated) prior to
the determination year, performs no service for the Affiliated
Employers during the determination year, and was a highly compensated
active Employee for either the
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separation year or any determination year ending on or after the
Employee's 55th birthday.
(e) If an Employee is, during a determination year or
look-back year, a family member of either a 5 percent owner who is an
active or former Employee or a Highly Compensated Employee who is one
of the 10 most Highly Compensated Employees ranked on the basis of
Compensation paid by the Affiliated Employers during such year, then
the family member and the 5 percent owner or top 10 Highly Compensated
Employee shall be aggregated. In such case, the family member and 5
percent owner or top 10 Highly Compensated Employee shall be treated as
a single Employee receiving compensation and Plan contributions equal
to the sum of such compensation and contributions of the family member
and 5 percent owner or top-ten Highly Compensated Employee. For
purposes of this section, family member includes the spouse, lineal
ascendants and descendants of the employee or former employee and the
spouses of such lineal ascendants and descendants.
(f) The top paid group shall consist of the top 20 percent of
active Employees, ranked on the basis of Compensation received from the
Affiliated Employers during the year.
(g) The number of officers shall be limited to the lesser of
(i) 50 Employees or (ii) the greater of 3 Employees or 10 percent of
the Employees.
(h) The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of employees in
the top-paid group, the top 100 Employees, the number of employees
treated as officers and the compensation that is considered, will be
made in accordance with Code section 414(q).
A. "HOUR OF SERVICE" means, with respect to any Employee,
(a) Each hour for which the Employee is paid or entitled to
payment for the performance of duties for an Affiliated Employer, each
such hour to be credited to the Employee for the computation period in
which the duties were performed;
(b) Each hour for which the Employee is directly or indirectly
paid or entitled to payment by any Affiliated Employer (including
payments made or due from a trust fund or insurer to which the
Affiliated Employer contributes or pays premiums) 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, disability, layoff, jury duty, military
duty,
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or leave of absence, each such hour to be credited to the Employee for the
computation period in which such period of time occurs, subject to the following
rules;
(i) No more than 501 Hours of Service shall be
credited under this paragraph (b) to the Employee on account
of any single continuous period during which the Employee
performs no duties;
(ii) Hours of Service shall not be credited under
this paragraph (b) to an Employee for a payment which solely
reimburses the Employee for medically related expenses
incurred by the Employee, or which is made or due under a plan
maintained solely for the purpose of complying with applicable
worker's compensation, unemployment compensation or disability
insurance laws; and
(iii) If the period during which the Employee
performs no duties falls within two or more computation
periods, and if the payment made on account of such period is
not calculated on the basis of units of time, the number of
Hours of Service credited with respect to such period shall be
allocated between not more than the first two such periods
based on the amount of the payment divided by the Employee's
most recent hourly rate of Compensation before the period
during which no duties were performed;
(c) Each hour not counted under paragraph (a) or (b) for which
back pay, irrespective of mitigation of damages, has been either
awarded or agreed to be paid by any Affiliated Employer, each such hour
to be credited to the Employee for the computation period to which the
award or agreement for back pay pertains, provided that crediting of
Hours of Service under this paragraph (c) with respect to periods
described in paragraph (b) above shall be subject to the limitations
and special rules set forth in clauses (i), (ii) and (iii) of paragraph
(b);
(d) Each noncompensated hour while an Employee during a period
of absence from any Affiliated Employer in the armed forces of the
United States if the Employee returns to work for any Affiliated
Employer at a time when he or she has reemployment rights under federal
law, and each noncompensated hour while an Employee on an unpaid leave
of absence granted by the Employer; and
(e) Solely for purposes of Section 5.5, each hour not counted
under paragraph (a) or (b) for which the Employee is absent form work
for maternity or paternity reasons, provided that no more than 501
Hours of Service shall be credited under this paragraph (e) to the
Employee. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of the birth of a child of
the individual, (3) by reason of the placement of a child with
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the individual in connection with the adoption of such child by such individual,
or (4) for purposes of caring for such child for a period beginning immediately
following such birth or placement.
Hours of Service to be credited to an Employee under (a), (b) and (c) above will
be calculated and credited pursuant to paragraphs (b) and (c) of Section
2530.200b-2 of the Department of Labor Regulations, which are incorporated
herein by reference. Hours of Service to be credited to an Employee during a
period described in (d) and (e) above will be determined by the Committee with
reference to the individual's most recent normal work schedule, or at the rate
of eight hours per day in the event the Committee is unable to establish such
schedule.
A. "MATCHING CONTRIBUTION ACCOUNT" means an Account to which Matching
Contributions are allocated.
A. "NORMAL RETIREMENT AGE" means age 65.
A. "PARTICIPANT" means each Eligible Employee who participates in the Plan
pursuant to its provisions.
A. "PARTICIPATING EMPLOYER" means the Plan Sponsor and each other Affiliated
Employer that, with the consent of the Board of Directors, adopt the Plan by
executing the Instrument of Participation attached as Schedule A.
A. "PLAN" means the Boston Scientific Corporation 401(k) Savings Plan set forth
herein, and all subsequent amendments thereto.
A. "PLAN SPONSOR" means Boston Scientific Corporation, a Delaware Corporation.
A. "PLAN YEAR" means the calendar year.
A. "PREDECESSOR EMPLOYER" means any trade or business acquired by a
Participating Employer, or any entity from which a Participating Employer has
acquired substantially all of its assets.
A. "QUALIFIED DOMESTIC RELATIONS ORDER" means any judgment, decree or order
(including approval of a property settlement agreement) which constitutes a
"qualified domestic relations order" within the meaning of Code section 414(p).
A judgment, decree or order shall not be considered not to be a Qualified
Domestic Relations Order merely because it requires a distribution to an
alternate payee (or the segregation of accounts pending distribution to an
alternate payee) before the Participant is otherwise entitled to a distribution
under the Plan.
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A. "QUALIFIED NONELECTIVE CONTRIBUTION" means a contribution made in the
discretion of the Plan Sponsor which is designated by the Plan Sponsor as a
Qualified Nonelective Contribution and which falls within the definition of a
"qualified nonelective contribution" under Regulation section 1.401(k)-1(g)(13).
A. "QNEC ACCOUNT" means an Account to which Qualified Nonelective Contributions
are allocated.
A. "REGULATION" means a regulation issued by the Department of Treasury,
including any final regulation, proposed regulation, temporary regulation, as
well as any modification of any such regulation contained in any notice, revenue
procedure, or similar pronouncement issued by the Internal Revenue Service.
A. "REQUIRED BEGINNING DATE" for a Participant shall be determined as follows:
(i) For a Participant who attains age 70-1/2 after
December 31, 1987, the Required Beginning Date is April 1
following the calendar year in which the Participant attains
age 70-1/2.
(ii) For a Participant who attained age 70-1/2 before
January 1, 1988 and is not a 5 percent owner, the Required
Beginning Date is April 1 following the later of (A) the
calendar year in which the Participant attains age 70-1/2, and
(B) the calendar year in which the Participant retires.
(iii) For a Participant who attained age 70-1/2
before January 1, 1988 and is a 5 percent owner, the Required
Beginning Date is April 1 after the later of (A) the calendar
year in which the Participant attains age 70-1/2, and (B) the
earlier of the calendar year in which the Participant retires
or the calendar year with or within which ends the Plan Year
in which the Participant becomes a 5 percent owner.
A Participant shall be a "5 percent owner" for purposes of this definition if
such Participant is a 5 percent owner within the meaning of Code section 416(i)
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age 66-1/2 or any subsequent Plan Year. The
determination of whether or not a Participant is a 5 percent owner will be made
in accordance with Code section 416 but will be made without regard to whether
the Plan is top-heavy.
A. "ROLLOVER CONTRIBUTION" means a contribution made by a Participant which
satisfies the requirements for rollover contributions as set forth in the Plan.
A. "SECTION" means a section of the Plan.
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A. "TRUST" means the trust established under Section 3.12.
A. "TRUSTEE" means the person or persons who are at any time acting as trustee
under the Trust.
A. "VALUATION DATE" means each day on which the New York Stock Exchange is open
for trading.
A. "YEAR OF SERVICE FOR VESTING" means a Plan Year during which the Employee
completes at least 1,000 Hours of Service. The following special rules shall
apply:
(a) Unless otherwise provided in Schedule B, in the event the
Employer acquires a business of another employer, through an
acquisition either of assets or stock of such other employer, an
Employee who was employed by such other employer immediately prior to
such acquisition shall have his or her prior service with such other
employer taken into account, as if it were service with the Employer.
(b) A "leased employee", within the meaning of Code section
414(n) shall accrue Years of Service for vesting purposes and shall be
credited with such Years of Service for Vesting upon hire by a
Participating Employer as a common law employee.
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Schedule A
INSTRUMENT OF PARTICIPATION
_________________________, by its duly authorized officer, hereby
adopts and approves the Boston Scientific Corporation 401(k) Savings Plan and
its related Trust, agrees to make contributions thereto and perform such other
actions as may be required thereby, in accordance with the terms and conditions
of said Plan and Trust, and agrees to the appointment of Boston Scientific
Corporation as its agent, to perform such actions on its behalf as may be
permitted under the terms of said Plan and Trust to be the "Employer"
thereunder, of the foregoing to take effect on the ___ day of _________, 199__.
By: _________________________________
Dated: ______________________________
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Schedule B
Special Provisions Regarding Former Participants in Other Plans
The following plans have been merged into this Plan as of the dates
indicated below. Any elections made by participants in such plans with respect
to contributions, beneficiaries, investments, loans or benefit distributions
shall carry over and be treated as if made under this Plan, except as otherwise
provided by the Committee.
1. Cardiovascular Imaging Systems, Inc. 401(k) Salary Reduction Plan
and Trust
Effective ______, 199_, the Cardiovascular Imaging Systems, Inc. 401(k)
salary reduction plan is hereby merged into this Plan.
Special participation rules (Section 2.1(c)): No
Special rules re allocation of transferred accounts
(Section 4.6(a)): No
Special Vesting rules (Sections 5.6 and 14.41): No
QJSA rules applicable (Section 8.7): Yes
Optional forms of payment to preserve (Sections 8.1 and 8.7):
Immediate life annuity.
Immediate life annuity with a period certain of 10, 15, or
20 years.
Immediate annuity for the life of the Participant, with a
survivor annuity for the Participant's beneficiary which is
100%, 66 2/3% or 50% of the amount payable during the life
of the Participant.
Any combination of the above options and the benefit forms
described in Section 8.1.
2. Scimed Life Systems, Inc. Retirement Savings and Profit Sharing Plan
Effective ________, 199_, the Scimed Life Systems, Inc. Retirement
Savings and Profit Sharing Plan is hereby merged into this Plan.
Special participation rules (Section 2.1(c)): No
Special rules re allocation of transferred accounts
(Section 4.6(a)): No
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Special Vesting rules (Sections 5.6 and 14.41): No
QJSA rules applicable (Section 8.7): No
Optional forms of payment to preserve
(Sections 8.1 and 8.7): No
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