EXHIBIT 10.5
EAGLE TEST SYSTEMS, INC.
PROFIT SHARING PLAN AND TRUST
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................ 1
1.1 "Act".................................................... 1
1.2 "Administrator".......................................... 1
1.3 "Affiliated Employer".................................... 1
1.4 "Aggregate Account"...................................... 1
1.5 "Anniversary Date"....................................... 2
1.6 "Beneficiary"............................................ 2
1.7 "Code"................................................... 2
1.8 "Compensation"........................................... 2
1.9 "Contract" or "Policy"................................... 3
1.10 "Early Retirement Date".................................. 3
1.11 "Eligible Employee"...................................... 3
1.12 "Employee"............................................... 3
1.13 "Employer"............................................... 3
1.14 Fiduciary"............................................... 3
1.15 "Fiscal Year"............................................ 3
1.16 "Forfeiture"............................................. 3
1.17 "Former Participant"..................................... 4
1.18 "415 Compensation"....................................... 4
1.19 "Highly Compensated Employee"............................ 4
1.20 "Highly Compensated Participant"......................... 5
1.21 "Hour of Service"........................................ 5
1.22 "Investment Manager"..................................... 6
1.23 "Key Employee"........................................... 6
1.24 "Late Retirement Date"................................... 7
1.25 "Leased Employee"........................................ 7
1.26 Non-Highly Compensated Participant"...................... 8
1.27 "Non-Key Employee"....................................... 8
1.28 "Normal Retirement Age".................................. 8
1.29 "Normal Retirement Date"................................. 8
1.30 "1-Year Break in Service"................................ 8
1.31 "Participant"............................................ 9
1.32 "Participant's Account".................................. 9
1.33 "Participant's Transfer/Rollover Account"................ 9
1.34 "Plan"................................................... 9
1.35 "Plan Year".............................................. 9
1.36 "Regulation"............................................. 9
1.37 "Retired Participant".................................... 9
1.38 "Retirement Date"........................................ 9
1.39 "Terminated Participant"................................. 9
1.40 "Top Heavy Plan"......................................... 9
1.41 "Top Heavy Plan Year".................................... 9
(i)
TABLE OF CONTENTS
1.42 "Trustee"............................................... 9
1.43 "Trust Fund"............................................ 10
1.44 "Valuation Date"........................................ 10
1.45 "Vested"................................................ 10
1.46 "Year of Service"....................................... 10
ARTICLE II ADMINISTRATION........................................ 10
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER............. 10
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY................. 11
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR.................. 11
2.4 RECORDS AND REPORTS..................................... 12
2.5 APPOINTMENT OF ADVISERS................................. 12
2.6 PAYMENT OF EXPENSES..................................... 13
2.7 CLAIMS PROCEDURE........................................ 13
2.8 CLAIMS REVIEW PROCEDURE................................. 13
ARTICLE III ELIGIBILITY........................................... 13
3.1 CONDITIONS OF ELIGIBILITY............................... 13
3.2 EFFECTIVE DATE OF PARTICIPATION......................... 14
3.3 DETERMINATION OF ELIGIBILITY............................ 14
3.4 TERMINATION OF ELIGIBILITY.............................. 14
3.5 OMISSION OF ELIGIBLE EMPLOYEE........................... 14
3.6 INCLUSION OF INELIGIBLE EMPLOYEE........................ 14
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE................. 14
3.8 ELECTION NOT TO PARTICIPATE............................. 16
ARTICLE IV CONTRIBUTION AND ALLOCATION........................... 16
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION........... 16
4.2 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION................ 16
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS.... 16
4.4 MAXIMUM ANNUAL ADDITIONS................................ 19
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS............... 21
4.6 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLAN 22
4.7 QUALIFIED MILITARY SERVICE.............................. 23
ARTICLE V VALUATIONS............................................ 24
5.1 VALUATION OF THE TRUST FUND............................. 24
5.2 METHOD OF VALUATION..................................... 24
ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS............ 24
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT............... 24
6.2 DETERMINATION OF BENEFITS UPON DEATH.................... 24
6.3 DISABILITY RETIREMENT BENEFITS.......................... 26
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.............. 26
6.5 DISTRIBUTION OF BENEFITS................................ 28
(ii)
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.......................... 30
6.7 TIME OF SEGREGATION OR DISTRIBUTION.......................... 30
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY............ 30
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN............... 31
6.10 PRE-RETIREMENT DISTRIBUTION.................................. 31
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP............................ 31
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.............. 32
ARTICLE VII TRUSTEE.................................................... 32
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE........................ 32
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.................. 33
7.3 OTHER POWERS OF THE TRUSTEE.................................. 33
7.4 LOANS TO PARTICIPANTS........................................ 36
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS..................... 37
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES................ 37
7.7 ANNUAL REPORT OF THE TRUSTEE................................. 37
7.8 AUDIT........................................................ 38
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE............... 38
7.10 TRANSFER OF INTEREST......................................... 39
7.11 TRUSTEE INDEMNIFICATION...................................... 39
7.12 DIRECT ROLLOVER.............................................. 40
ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS......................... 40
8.1 AMENDMENT.................................................... 40
8.2 TERMINATION.................................................. 41
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS.................. 42
ARTICLE IX TOP HEAVY.................................................. 42
9.1 TOP HEAVY PLAN REQUIREMENTS.................................. 42
9.2 DETERMINATION OF TOP HEAVY STATUS............................ 42
ARTICLE X MISCELLANEOUS.............................................. 45
10.1 PARTICIPANT'S RIGHTS......................................... 45
10.2 ALIENATION................................................... 45
10.3 CONSTRUCTION OF PLAN......................................... 46
10.4 GENDER AND NUMBER............................................ 46
10.5 LEGAL ACTION................................................. 46
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS....................... 46
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE................... 47
10.8 INSURER'S PROTECTIVE CLAUSE.................................. 47
10.9 RECEIPT AND RELEASE FOR PAYMENTS............................. 47
10.10 ACTION BY THE EMPLOYER....................................... 47
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY........... 47
10.12 HEADINGS..................................................... 48
10.13 APPROVAL BY INTERNAL REVENUE SERVICE......................... 48
10.14 UNIFORMITY................................................... 48
(iii)
ARTICLE XI PARTICIPATING EMPLOYERS.................................... 48
11.1 ADOPTION BY OTHER EMPLOYERS.................................. 48
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS...................... 48
11.3 DESIGNATION OF AGENT......................................... 49
11.4 EMPLOYEE TRANSFERS........................................... 49
11.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES.......... 49
11.6 AMENDMENT.................................................... 49
11.7 DISCONTINUANCE OF PARTICIPATION.............................. 49
11.8 ADMINISTRATOR'S AUTHORITY.................................... 50
(iv)
EAGLE TEST SYSTEMS, INC.
PROFIT SHARING PLAN AND TRUST
THIS AGREEMENT, hereby made and entered into this ____ day of
____________________________, by and between Eagle Test Systems, Inc. and Analog
Test Institute, Inc. (herein jointly referred to as the "Employer") and Leonard
Foxman (herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan and
Trust effective October 1, 1982, (hereinafter called the "Effective Date") known
as Eagle Test Systems, Inc. Profit Sharing Plan and Trust (herein referred to as
the "Plan") in recognition of the contribution made to its successful operation
by its employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to
amend the Plan, provided the Trustee joins in such amendment if the provisions
of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective October 1, 2001, except as otherwise provided,
the Employer and the Trustee in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 9.2.
1
1.5 "Anniversary Date" means the last day of the Plan Year.
1.6 "Beneficiary" means the person (or entity) to whom the share of a
deceased Participant's total account is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401 (a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. Compensation must be determined without regard to any rules under Code
Section 3401 (a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For purposes of this Section, the determination of Compensation shall be
made by:
(a) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 132(f)(4)for Plan Years
beginning after December 31, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions.
For a Participant's initial year of participation, Compensation shall be
recognized for the entire Plan Year.
Compensation in excess of $150,000 (or such other amount provided in the
Code) shall be disregarded. Such amount shall be adjusted for increases in the
cost of living in accordance with Code Section 401(a)(17)(B), except that the
dollar increase in effect on January 1 of any calendar year shall be effective
for the Plan Year beginning with or within such calendar year. For any short
Plan Year the Compensation limit shall be an amount equal to the Compensation
limit for the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short Plan Year by
twelve (12).
For Plan Years beginning after December 31, 1996, for purposes of
determining Compensation, the family member aggregation rules of Code Section
401(a)(17) and Code Section 414(q)(6) (as in effect prior to the Small Business
Job Protection Act of 1996) are eliminated.
For purposes of this Section, if the Plan is a plan described in Code
Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income policy or annuity contract (group or individual) issued pursuant to the
terms of the Plan. In the event of
2
any conflict between the terms of this Plan and the terms of any contract
purchased hereunder, the Plan provisions shall control.
1.10 "Early Retirement Date" means the first day of the month (prior to
the Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 60, and has completed at least
five (5) Years of Service with the Employer (Early Retirement Age). A
Participant shall become fully Vested upon satisfying this requirement if still
employed at Early Retirement Age.
A Former Participant who separates from service after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive benefits under this
Plan.
1.11 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to participate in
this Plan unless such Affiliated Employers have specifically adopted this Plan
in writing.
Employees classified by the Employer as independent contractors who are
subsequently determined by the Internal Revenue Service to be Employees shall
not be Eligible Employees.
1.12 "Employee" means any person who is employed by the Employer or
Affiliated Employer, and excludes any person who is employed as an independent
contractor. Employee shall include Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and such Leased Employees do not
constitute more than 20% of the recipient's non-highly compensated work force.
1.13 "Employer" means Eagle Test Systems, Inc. and Analog Test Institute,
Inc. and any successor which shall maintain this Plan; and any predecessor which
has maintained this Plan. The Employers are corporations with principal offices
in the State of Illinois.
1.14 Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
1.15 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on October 1st of each year and ending the following September 30th.
1.16 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of the
Participant's Account of a Former Participant who has severed employment with
the Employer. For purposes of this provision, if the Former Participant has a
Vested benefit of zero, then such Former Participant
3
shall be deemed to have received a distribution of such Vested benefit as of the
year in which the severance of employment occurs, or
(b) the last day of the Plan Year in which a Former Participant
who has severed employment with the Employer incurs five (5) consecutive 1-Year
Breaks in Service.
Regardless of the preceding provisions, if a Former Participant is
eligible to share in the allocation of Employer contributions or Forfeitures in
the year in which the Forfeiture would otherwise occur, then the Forfeiture will
not occur until the end of the first Plan Year for which the Former Participant
is not eligible to share in the allocation of Employer contributions or
Forfeitures. Furthermore, the term "Forfeiture" shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.17 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.18 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401 (a) and all other payments
of compensation by the Employer (in the course of the Employer's trade or
business) for a Plan Year for which the Employer is required to furnish the
Participant a written statement under Code Sections 6041(d), 6051(a)(3) and
6052. "415 Compensation" must be determined without regard to any rules under
Code Section 3401 (a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
For "limitation years" beginning after December 31, 1997, for purposes of
this Section, the determination of "415 Compensation" shall include any elective
deferral (as defined in Code Section 402(g)(3)), and any amount which is
contributed or deferred by the Employer at the election of the Participant and
which is not includible in the gross income of the Participant by reason of Code
Sections 125, 132(f)(4) for "limitation years" beginning after December 31, 2000
or 457.
1.19 "Highly Compensated Employee" means, for Plan Years beginning after
December 31, 1996, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a "five percent owner" as defined in Section 1.23(c) at
any time during the "determination year" or the "look-back year"; or
(b) for the "look-back year" had "415 Compensation" from the
Employer in excess of $80,000. The $80,000 amount is adjusted at the same time
and in the same manner as under Code Section 415(d), except that the base period
is the calendar quarter ending September 30, 1996.
The "determination year" means the Plan Year for which testing is being
performed, and the "look-back year" means the immediately preceding twelve (12)
month period.
4
Notwithstanding the above, for the first Plan Year beginning after
December 31, 1996, the "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period").
A highly compensated former Employee is based on the rules applicable to
determining Highly Compensated Employee status as in effect for the
"determination year," in accordance with Regulation 1.414(q)-1T, A-4 and IRS
Notice 97-45 (or any superseding guidance).
In determining whether an Employee is a Highly Compensated Employee for a
Plan Year beginning in 1997, the amendments to Code Section 414(q) stated above
are treated as having been in effect for years beginning in 1996.
For purposes of this Section, for Plan Years beginning prior to January 1,
1998, the determination of "415 Compensation" shall be made by including amounts
that would otherwise be excluded from a Participant's gross income by reason of
the application of Code Sections 125, 402(e)(3), 402(h)(1)(B), and, in the case
of Employer contributions made pursuant to a salary reduction agreement, Code
Section 403(b).
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.20 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the component of the Plan being
tested.
1.21 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
5
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of (2) above, a payment shall be deemed to be made by or due
from the Employer regardless of whether such payment is made by or due from the
Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
1.22 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.23 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of the Employee's or former Employee's Beneficiaries) is considered
a Key Employee if the Employee, at any time during the Plan Year that contains
the "Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual "415
Compensation" greater than 50 percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in effect under
Code Section 415(c)(1)(A) for the calendar year in which such Plan Year ends and
owning (or considered as owning within the meaning of Code Section 318) both
more than one-half percent interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of Code
Section 318) more
6
than five percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined voting power of all
stock of the Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder, employers that would
otherwise be aggregated under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent owner" means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the outstanding stock of the Employer
or stock possessing more than one percent (1%) of the total combined voting
power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than one percent (1%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in determining
whether an individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated under Code Sections
414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 132(fl(4)for Plan Years
beginning after December 31, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or 457(b),
and Employee contributions described in Code Section 414(h)(2) that are treated
as Employer contributions.
1.24 "Late Retirement Date" means a Participant's actual Retirement Date
after having reached Normal Retirement Date.
1.25 "Leased Employee" means, for Plan Years beginning after December 31,
1996, any person (other than an Employee of the recipient Employer) who pursuant
to an agreement between the recipient Employer and any other person or entity
("leasing organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient Employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.
Furthermore, Compensation for a Leased Employee shall only include Compensation
from the leasing organization that is attributable to services performed for the
recipient Employer. A Leased Employee shall not be considered an Employee of the
recipient Employer:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a nonintegrated employer contribution rate of at least
10% of compensation, as defined in Code Section 415(c)(3), but for Plan
Years beginning prior to January 1, 1998, including amounts which are
contributed by the Employer pursuant to
7
a salary reduction agreement and which are not includible in the gross
income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in
Code Section 414(h)(2) that are treated as Employer contributions, and for
Plan Years beginning prior to January 1, 2001, excluding amounts that are
not includible in gross income under Code Section 132(f)(4);
(2) immediate participation;
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient Employer's nonhighly compensated work force.
1.26 Non-Highly Compensated Participant" means, for Plan Years beginning
after December 31, 1996, any Participant who is not a Highly Compensated
Employee.
1.27 "Non-Key Employee" means any Employee or former Employee (and such
Employee's or former Employee's Beneficiaries) who is not, and has never been a
Key Employee.
1.28 "Normal Retirement Age" means the Participant's 62nd birthday. A
Participant shall become fully Vested in the Participant's Account upon
attaining Normal Retirement Age.
1.29 "Normal Retirement Date" means the Participant's Normal Retirement
Age.
1.30 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means an absence from work for
any period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period in which the absence from
work begins, only if credit therefore is necessary to prevent the Employee from
incurring a 1-Year Break in Service, or, in any other case, in the immediately
following computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have been
credited but for such absence, or, in any case in which the Administrator is
unable to determine such hours normally credited, eight (8) Hours of Service per
day. The total Hours of Service required to be credited for a "maternity or
paternity leave of
8
absence" shall not exceed the number of Hours of Service needed to prevent the
Employee from incurring a 1-Year Break in Service.
1.31 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.32 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to such Participant's
total interest in the Plan and Trust resulting from the Employer contributions.
1.33 "Participant's Transfer/Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to the Participant's total interest in the Plan resulting from amounts
transferred to this Plan from a direct plan-to-plan transfer and/or with respect
to such Participant's interest in the Plan resulting from amounts transferred
from another qualified plan or "conduit" Individual Retirement Account in
accordance with Section 4.6.
A separate accounting shall be maintained with respect to that portion of
the Participant's Transfer/Rollover Account attributable to transfers (within
the meaning of Code Section 414(1)) and "rollovers."
1.34 "Plan" means this instrument, including all amendments thereto.
1.35 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on October 1st of each year and ending the following September 30th.
1.36 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or a delegate of the Secretary of the Treasury, and as
amended from time to time.
1.37 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.38 "Retirement Date" means the date as of which a Participant retires
whether such retirement occurs on a Participant's Normal Retirement Date, Early
or Late Retirement Date (see Section 6.1).
1.39 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death or retirement.
1.40 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.41 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.42 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
9
1.43 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.44 "Valuation Date" means the Anniversary Date and may include any
other date or dates deemed necessary or appropriate by the Administrator for the
valuation of the Participants' accounts during the Plan Year, which may include
any day that the Trustee, any transfer agent appointed by the Trustee or the
Employer or any stock exchange used by such agent, are open for business.
1.45 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.46 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the required
Hours of Service in both the initial computation period (or the computation
period beginning after a 1-Year Break in Service) and the Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.
For vesting purposes, the computation periods shall be the Plan Year,
excluding periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set forth
herein.
Notwithstanding the foregoing, for any short Plan Year, the determination
of whether an Employee has completed a Year of Service shall be made in
accordance with Department of Labor regulation 2530.203-2(c). However, in
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.
(a) In addition to the general powers and responsibilities
otherwise provided for in this Plan, the Employer shall be empowered to appoint
and remove the Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan
10
to ensure that the Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the terms of the Plan,
the Code, and the Act. The Employer may appoint counsel, specialists, advisers,
agents (including any nonfiduciary agent) and other persons as the Employer
deems necessary or desirable in connection with the exercise of its fiduciary
duties under this Plan. The Employer may compensate such agents or advisers from
the assets of the Plan as fiduciary expenses (but not including any business
(settlor) expenses of the Employer), to the extent not paid by the Employer.
(b) The Employer shall establish a "funding policy and method,"
i.e., it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and investment
growth (and stability of same) is a more current need, or shall appoint a
qualified person to do so. The Employer or its delegate shall communicate such
needs and goals to the Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy and method" shall
not, however, constitute a directive to the Trustee as to the investment of the
Trust Funds. Such "funding policy and method" shall be consistent with the
objectives of this Plan and with the requirements of Title I of the Act.
(c) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated by it
under the provisions of this Plan or pursuant to procedures established
hereunder. This requirement may be satisfied by formal periodic review by the
Employer or by a qualified person specifically designated by the Employer,
through day-to-day conduct and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY. The Employer shall be the
Administrator. The Employer may appoint any person, including, but not limited
to, the Employees of the Employer, to perform the duties of the Administrator.
Any person so appointed shall signify acceptance by filing written acceptance
with the Employer. Upon the resignation or removal of any individual performing
the duties of the Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR. The primary responsibility
of the Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the Plan.
The Administrator shall administer the Plan in accordance with its terms and
shall have the power and discretion to construe the terms of the Plan and to
determine all questions arising in connection with the administration,
interpretation, and application of the Plan. Any such determination by the
Administrator shall be conclusive and binding upon all persons. The
Administrator may establish procedures, correct any defect, supply any
information, or reconcile any inconsistency in such manner and to such extent as
shall be deemed necessary or advisable to carry out the purpose of the Plan;
provided, however, that any procedure, discretionary act, interpretation or
construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish the Administrator's duties under the Plan.
11
The Administrator shall be charged with the duties of the general
administration of the Plan as set forth under the terms of the Plan, including,
but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder and to
receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
discretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any insurer, and to designate the insurer from which such Contract shall be
purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to the
Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish specific
objectives;
(i) to determine the validity of, and take appropriate action with
respect to, any qualified domestic relations order received by it; and
(j) to assist any Participant regarding the Participant's rights,
benefits, or elections available under the Plan.
2.4 RECORDS AND REPORTS. The Administrator shall keep a record of all
actions taken and shall keep all other books of account, records, policies, and
other data that may be necessary for proper administration of the Plan and shall
be responsible for supplying all information and reports to the Internal Revenue
Service, Department of Labor, Participants, Beneficiaries and others as required
by law.
2.5 APPOINTMENT OF ADVISERS. The Administrator, or the Trustee with the
consent of the Administrator, may appoint counsel, specialists, advisers, agents
(including nonfiduciary agents) and other persons as the Administrator or the
Trustee deems necessary or desirable in connection with the administration of
this Plan, including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries.
12
2.6 PAYMENT OF EXPENSES. All expenses of administration may be paid out
of the Trust Fund unless paid by the Employer. Such expenses shall include any
expenses incident to the functioning of the Administrator, or any person or
persons retained or appointed by any named Fiduciary incident to the exercise of
their duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, and other specialists and their agents, the costs
of any bonds required pursuant to Act Section 412, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund.
2.7 CLAIMS PROCEDURE. Claims for benefits under the Plan may be filed in
writing with the Administrator. Written notice of the disposition of a claim
shall be furnished to the claimant within ninety (90) days after the application
is filed, or such period as is required by applicable law or Department of Labor
regulation. In the event the claim is denied, the reasons for the denial shall
be specifically set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
2.8 CLAIMS REVIEW PROCEDURE. Any Employee, former Employee, or
Beneficiary of either, who has been denied a benefit by a decision of the
Administrator pursuant to Section 2.7 shall be entitled to request the
Administrator to give further consideration to a claim by filing with the
Administrator a written request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes the claim should be
allowed, shall be filed with the Administrator no later than sixty (60) days
after receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next sixty (60) days, at
which the claimant may be represented by an attorney or any other representative
of such claimant's choosing and expense and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of the
claim. At the hearing (or prior thereto upon five (5) business days written
notice to the Administrator) the claimant or the claimant's representative shall
have an opportunity to review all documents in the possession of the
Administrator which are pertinent to the claim at issue and its disallowance.
Either the claimant or the Administrator may cause a court reporter to attend
the hearing and record the proceedings. In such event, a complete written
transcript of the proceedings shall be furnished to both parties by the court
reporter. The full expense of any such court reporter and such transcripts shall
be borne by the party causing the court reporter to attend the hearing. A final
decision as to the allowance of the claim shall be made by the Administrator
within sixty (60) days of receipt of the appeal (unless there has been an
extension of sixty (60) days due to special circumstances, provided the delay
and the special circumstances occasioning it are communicated to the claimant
within the sixty (60) day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY. Any Eligible Employee who has completed
one (1) Year of Service and has attained age 21 shall be eligible to participate
hereunder as of the
13
date such Employee has satisfied such requirements. However, any Employee who
was a Participant in the Plan prior to the effective date of this amendment and
restatement shall continue to participate in the Plan.
3.2 EFFECTIVE DATE OF PARTICIPATION. An Eligible Employee shall become a
Participant effective as of the date on which the Employee satisfies the
eligibility requirements of Section 3.1.
3.3 DETERMINATION OF ELIGIBILITY. The Administrator shall determine the
eligibility of each Employee for participation in the Plan based upon
information furnished by the Employer. Such determination shall be conclusive
and binding upon all persons, as long as the same is made pursuant to the Plan
and the Act. Such determination shall be subject to review pursuant to Section
2.8.
3.4 TERMINATION OF ELIGIBILITY. In the event a Participant shall go from
a classification of an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in the Plan for each Year of Service
completed while a noneligible Employee, until such time as the Participant's
Account is forfeited or distributed pursuant to the terms of the Plan.
Additionally, the Former Participant's interest in the Plan shall continue to
share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE. If, in any Plan Year, any Employee
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not made until after a contribution by the
Employer for the year has been made and allocated, then the Employer shall make
a subsequent contribution, if necessary after the application of Section 4.3(c),
so that the omitted Employee receives a total amount which the Employee would
have received (including both Employer contributions and earnings thereon) had
the Employee not been omitted. Such contribution shall be made regardless of
whether it is deductible in whole or in part in any taxable year under
applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE. If, in any Plan Year, any person
who should not have been included as a Participant in the Plan is erroneously
included and discovery of such inclusion is not made until after a contribution
for the year has been made and allocated, the Employer shall be entitled to
recover the contribution made with respect to the ineligible person provided the
error is discovered within twelve (12) months of the date on which it was made.
Otherwise, the amount contributed with respect to the ineligible person shall
constitute a Forfeiture for the Plan Year in which the discovery is made.
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE.
(a) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is reemployed by the Employer
before a 1-Year Break in Service occurs, the Former Participant shall become a
Participant as of the reemployment date.
(b) If any Participant becomes a Former Participant due to
severance from employment with the Employer and is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall include Years of Service
prior to the 1-Year Break in Service subject to the following rules:
14
(1) In the case of a Former Participant who under the Plan
does not have a nonforfeitable right to any interest in the Plan resulting
from Employer contributions, Years of Service before a period of 1-Year
Break in Service will not be taken into account if the number of
consecutive 1-Year Breaks in Service equal or exceed the greater of (A)
five (5) or (B) the aggregate number of pre-break Years of Service. Such
aggregate number of Years of Service will not include any Years of Service
disregarded under the preceding sentence by reason of prior 1-Year Breaks
in Service.
(2) A Former Participant who has not had Years of Service
before a 1-Year Break in Service disregarded pursuant to (1) above, and
completes a Year of Service for eligibility purposes, shall participate in
the Plan as of the date immediately following completion of a Year of
Service.
(c) After a Former Participant who has severed employment with the
Employer incurs five (5) consecutive 1-Year Breaks in Service, the Vested
portion of said Former Participant's Account attributable to pre-break service
shall not be increased as a result of post-break service. In such case, separate
accounts will be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing the Participant's Employer
derived account balance in the Plan attributable to post-break service.
(d) If any Participant becomes a Former Participant due to
severance of employment with the Employer and is reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of the entire Vested interest prior to
reemployment, then the forfeited account shall be reinstated only if the Former
Participant repays the full amount which had been distributed. Such repayment
must be made before the earlier of five (5) years after the first date on which
the Participant is subsequently reemployed by the Employer or the close of the
first period of five (5) consecutive 1-Year Breaks in Service commencing after
the distribution. If a distribution occurs for any reason other than a severance
of employment, the time for repayment may not end earlier than five (5) years
after the date of distribution. In the event the Former Participant does repay
the full amount distributed, the undistributed forfeited portion of the
Participant's Account must be restored in full, unadjusted by any gains or
losses occurring subsequent to the Valuation Date preceding the distribution.
The source for such reinstatement may be Forfeitures occurring during the Plan
Year. If such source is insufficient, then the Employer will contribute an
amount which is sufficient to restore any such forfeited Accounts provided,
however, that if a discretionary contribution is made for such year, such
contribution shall first be applied to restore any such Accounts and the
remainder shall be allocated in accordance with Section 4.3.
If a non-Vested Former Participant was deemed to have received a
distribution and such Former Participant is reemployed by the Employer before
five (5) consecutive 1-Year Breaks in Service, then such Participant will be
deemed to have repaid the deemed distribution as of the date of reemployment.
15
3.8 ELECTION NOT TO PARTICIPATE. An Employee, for Plan Years beginning
on or after the later of the adoption date or effective date of this amendment
and restatement, may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
irrevocable and communicated to the Employer, in writing, within a reasonable
period of time before the beginning of the first Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION.
(a) For each Plan Year, the Employer shall contribute to the Plan
such amount as shall be determined by the Employer.
(b) The Employer contribution shall not be limited to years in
which the Employer has current or accumulated net profit. Additionally, to the
extent necessary, the Employer shall contribute to the Plan the amount necessary
to provide the top heavy minimum contribution. All contributions shall be made
in cash or in such property as is acceptable to the Trustee.
4.2 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION. The Employer may make its
contribution to the Plan for a particular Plan Year at such time as the
Employer, in its sole discretion, determines. If the Employer makes a
contribution for a particular Plan Year after the close of that Plan Year, the
Employer will designate to the Trustee the Plan Year for which the Employer is
making its contribution.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS.
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other Valuation Date, all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of the
Employer contribution for each Plan Year. Within a reasonable period of time
after the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution to each Participant's Account in
the same proportion that each such Participant's Compensation for the year bears
to the total Compensation of all Participants for such year.
(c) On or before each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date may be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 3.7(d), be used to satisfy any contribution that may be
required pursuant to Section 3.5 and/or 6.9, or be used to pay any
administrative expenses of the Plan. The remaining Forfeitures, if any, shall be
used to reduce the contribution of the Employer hereunder for the Plan Year in
which such Forfeitures occur.
16
(d) Participants shall be eligible to share in the allocation of
contributions for a Plan Year in accordance with the following:
(1) Only Participants who have completed a Year of Service
during the Plan Year and are actively employed on the last day of the Plan
Year shall be eligible to share in the allocation of contributions for
that Plan Year.
(2) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement
(Early, Normal or Late) or death shall not be eligible to share in the
allocation of contributions for that Plan Year.
(3) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions as provided above,
shall receive the minimum allocation provided for in Section 4.3(f) if
eligible pursuant to the provisions of Section 4.3(h).
(e) As of each Valuation Date, before the current valuation period
allocation of Employer contributions, any earnings or losses (net appreciation
or net depreciation) of the Trust Fund shall be allocated in the same proportion
that each Participant's and Former Participant's nonsegregated accounts bear to
the total of all Participants' and Former Participants' nonsegregated accounts
as of such date.
Participants' transfers from other qualified plans deposited in the
general Trust Fund shall share in any earnings and losses (net appreciation or
net depreciation) of the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant shall be credited or
charged with its separate earnings and losses.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer contributions allocated to the Participant's Account of each Employee
shall be equal to at least three percent (3%) of such Employee's "415
Compensation" (reduced by contributions and forfeitures, if any, allocated to
each Employee in any defined contribution plan included with this Plan in a
Required Aggregation Group). However, if (1) the sum of the Employer
contributions allocated to the Participant's Account of each Key Employee for
such Top Heavy Plan Year is less than three percent (3%) of each Key Employee's
"415 Compensation" and (2) this Plan is not required to be included in an
Aggregation Group to enable a defined benefit plan to meet the requirements of
Code Section 401(a)(4) or 410, the sum of the Employer contributions allocated
to the Participant's Account of each Employee shall be equal to the largest
percentage allocated to the Participant's Account of any Key Employee.
However, no such minimum allocation shall be required in this Plan for any
Employee who participates in another defined contribution plan subject to Code
Section 412 included with this Plan in a Required Aggregation Group.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Account of any Key Employee shall be
equal to the ratio of the sum of the Employer contributions allocated on behalf
of such Key Employee divided by the "415 Compensation" for such Key Employee.
17
(h) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Account of all Employees who are
Participants and who are employed by the Employer on the last day of the Plan
Year, including Employees who have (1) failed to complete a Year of Service; (2)
declined to make mandatory contributions (if required) to the Plan; and (3) been
excluded from participation because of their level of Compensation.
(i) For the purposes of this Section, "415 Compensation" in excess
of $150,000 (or such other amount provided in the Code) shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17)(B), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan Year beginning
with or within such calendar year. If "415 Compensation" for any prior
determination period is taken into account in determining a Participant's
minimum benefit for the current Plan Year, the "415 Compensation" for such
determination period is subject to the applicable annual "415 Compensation"
limit in effect for that prior period. For this purpose, in determining the
minimum benefit in Plan Years beginning on or after January 1, 1989, the annual
"415 Compensation" limit in effect for determination periods beginning before
that date is $200,000 (or such other amount as adjusted for increases in the
cost of living in accordance with Code Section 415(d) for determination periods
beginning on or after January 1, 1989, and in accordance with Code Section
401(a)(17)(B) for determination periods beginning on or after January 1, 1994).
For determination periods beginning prior to January 1, 1989, the $200,000 limit
shall apply only for Top Heavy Plan Years and shall not be adjusted. For any
short Plan Year the "415 Compensation" limit shall be an amount equal to the
"415 Compensation" limit for the calendar year in which the Plan Year begins
multiplied by the ratio obtained by dividing the number of full months in the
short Plan Year by twelve (12).
(j) Notwithstanding anything in this Section to the contrary, all
information necessary to properly reflect a given transaction may not be
available until after the date specified herein for processing such transaction,
in which case the transaction will be reflected when such information is
received and processed. Subject to express limits that may be imposed under the
Code, the processing of any contribution, distribution or other transaction may
be delayed for any legitimate business reason (including, but not limited to,
failure of systems or computer programs, failure of the means of the
transmission of data, force majeure, the failure of a service provider to timely
receive values or prices, and the correction for errors or omissions or the
errors or omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan.
(k) Notwithstanding anything to the contrary, if this is a Plan
that would otherwise fail to meet the requirements of Code Section 410(b)(1) and
the Regulations thereunder because Employer contributions would not be allocated
to a sufficient number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include the
minimum number of Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above. The specific
Participants who shall become eligible under the terms of this paragraph
shall be those who have not separated from service prior to the last day
18
of the Plan Year and have completed the greatest number of Hours of
Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution for the Plan Year shall
be further expanded to include the minimum number of Participants who have
separated from service prior to the last day of the Plan Year as are
necessary to satisfy the applicable test. The specific Participants who
shall become eligible to share shall be those Participants who have
completed the greatest number of Hours of Service in the Plan Year before
terminating employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have previously
been allocated to Participants may not be reallocated to satisfy these
requirements. In such event, the Employer shall make an additional
contribution equal to the amount such affected Participants would have
received had they been included in the allocations, even if it exceeds the
amount which would be deductible under Code Section 404. Any adjustment to
the allocations pursuant to this paragraph shall be considered a
retroactive amendment adopted by the last day of the Plan Year.
(4) Notwithstanding the foregoing, if the plan would fail to
satisfy Code Section 410(b) if the coverage tests were applied by treating
those Participants whose only allocation would otherwise be provided under
the top heavy formula as if they were not currently benefiting under the
Plan, then, for purposes of this Section 4.3(k), such Participants shall
be treated as not benefiting and shall therefore be eligible to be
included in the expanded class of Participants who will share in the
allocation provided under the Plan's non top heavy formula.
4.4 MAXIMUM ANNUAL ADDITIONS.
(a) Notwithstanding the foregoing, for "limitation years"
beginning after December 31, 1994, the maximum "annual additions" credited to a
Participant's accounts for any "limitation year" shall equal the lesser of: (1)
$30,000 adjusted annually as provided in Code Section 415(d) pursuant to the
Regulations, or (2) twenty-five percent (25%) of the Participant's "415
Compensation" for such "limitation year." If the Employer contribution that
would otherwise be contributed or allocated to the Participant's accounts would
cause the "annual additions" for the "limitation year" to exceed the maximum
"annual additions," the amount contributed or allocated will be reduced so that
the "annual additions" for the "limitation year" will equal the maximum "annual
additions," and any amount in excess of the maximum "annual additions," which
would have been allocated to such Participant may be allocated to other
Participants. For any short "limitation year," the dollar limitation in (1)
above shall be reduced by a fraction, the numerator of which is the number of
full months in the short "limitation year" and the denominator of which is
twelve (12).
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after
19
March 31, 1984, to an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan maintained by the Employer
and (5) amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, 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 plan
(as defined in Code Section 419(e)) maintained by the Employer. Except, however,
the "415 Compensation" percentage limitation referred to in paragraph (a)(2)
above shall not apply to: (1) any contribution for medical benefits (within the
meaning of Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount otherwise treated
as an "annual addition" under Code Section 415(1)(1).
(c) For purposes of applying the limitations of Code Section 415,
the transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for the
purposes of Section 4.4(b)(2): (1) rollover contributions (as defined in Code
Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans
made to a Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415,
the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
contribution plans (whether terminated or not) ever maintained by the Employer
shall be treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer is a member
of a controlled group of corporations, trades or businesses under common control
(as defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified
by Code Section 415(h)), is a member of an affiliated service group (as defined
by Code Section 414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all Employees of
such Employers shall be considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, each Employer who maintains this Plan will be considered to
be a separate Employer.
(h) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan shall
equal the maximum "annual additions" for the "limitation year" minus any
"annual additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined contribution
plan not subject to Code Section 412 maintained by the Employer which have
the same Anniversary Date, "annual
20
additions" will be credited to the Participant's accounts under the
defined contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the defined
contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the
Employer which have the same Anniversary Date, the maximum "annual
additions" under this Plan shall equal the product of (A) the maximum
"annual additions" for the "limitation year" minus any "annual additions"
previously credited under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the "annual additions" which
would be credited to such Participant's accounts under this Plan without
regard to the limitations of Code Section 415 and (ii) the denominator of
which is such "annual additions" for all plans described in this
subparagraph.
(i) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in this
Section shall at all times comply with the provisions of Code Section 415 and
the Regulations thereunder.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, 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 Participant under the limits of Section 4.4 or other
facts and circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would cause the maximum "annual
additions" to be exceeded for any Participant, the "excess amount" will be
disposed of in one of the following manners, as uniformly determined by the
Administrator for all Participants similarly situated.
(1) If the Participant is covered by the Plan at the end of
the "limitation year," the "excess amount" will be used to reduce the
Employer contribution for such Participant in the next "limitation year,"
and each succeeding "limitation year" if necessary;
(2) If, after the application of subparagraph (1) above, an
"excess amount" still exists, and the Participant is not covered by the
Plan at the end of the "limitation year," the "excess amount" will be held
unallocated in a "Section 415 suspense account." The "Section 415 suspense
account" will be applied to reduce future Employer contributions for all
remaining Participants in the next "limitation year," and each succeeding
"limitation year" if necessary;
(3) If a "Section 415 suspense account" is in existence at
any time during the "limitation year" pursuant to this Section, it will
not participate in the allocation of investment gains and losses of the
Trust Fund. If a "Section 415 suspense account" is in existence at any
time during a particular "limitation year," all amounts in the "Section
415 suspense account" must be allocated and reallocated to Participants'
accounts before any Employer contributions or any Employee contributions
may be made
21
to the Plan for that "limitation year." "Excess amounts" may not be
distributed to Participants or Former Participants.
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, of (1) the
"annual additions" which would be credited to the Participant's account under
the terms of the Plan without regard to the limitations of Code Section 415 over
(2) the maximum "annual additions" determined pursuant to Section 4.4.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year."
4.6 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS.
(a) With the consent of the Administrator, amounts may be
transferred (within the meaning of Code Section 414(1)) to this Plan from other
tax qualified plans under Code Section 401 (a) by Eligible Employees, provided
the trust from which such funds are transferred permits the transfer to be made
and the transfer will not jeopardize the tax exempt status of the Plan or Trust
or create adverse tax consequences for the Employer. Prior to accepting any
transfers to which this Section applies, the Administrator may require an
opinion of counsel that the amounts to be transferred meet the requirements of
this Section. The amounts transferred shall be set up in a separate account
herein referred to as a Participant's Transfer/Rollover Account. Furthermore,
for vesting purposes, the Participant's portion of the Participant's
Transfer/Rollover Account attributable to any transfer shall be subject to
Section 6.4(b).
Except as permitted by Regulations (including Regulation 1.411(d)-4),
amounts attributable to elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as elective contributions, which
are transferred from another qualified plan in a plan-to-plan transfer (other
than a direct rollover) shall be subject to the distribution limitations
provided for in Regulation 1.401(k)-1(d).
(b) With the consent of the Administrator, the Plan may accept a
"rollover" by Eligible Employees, provided the "rollover" will not jeopardize
the tax exempt status of the Plan or create adverse tax consequences for the
Employer. Prior to accepting any "rollovers" to which this Section applies, the
Administrator may require the Employee to establish (by providing opinion of
counsel or otherwise) that the amounts to be rolled over to this Plan meet the
requirements of this Section. The amounts rolled over shall be set up in a
separate account herein referred to as a "Participant's Transfer/Rollover
Account." Such account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
For purposes of this Section, the term "qualified plan" shall mean any tax
qualified plan under Code Section 401(a), or, any other plans from which
distributions are eligible to be rolled over into this Plan pursuant to the
Code. The term "rollover" means: (i) amounts transferred to this Plan directly
from another qualified plan; (ii) distributions received by an Employee from
other "qualified plans" which are eligible for tax-free rollover to a "qualified
plan" and which are
22
transferred by the Employee to this Plan within sixty (60) days following
receipt thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual retirement
account has no assets other than assets which (A) were previously distributed to
the Employee by another "qualified plan," (B) were eligible for tax-free
rollover to a "qualified plan" and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof; (iv) amounts
distributed to the Employee from a conduit individual retirement account meeting
the requirements of clause (iii) above, and transferred by the Employee to this
Plan within sixty (60) days of receipt thereof from such conduit individual
retirement account; and (v) any other amounts which are eligible to be rolled
over to this Plan pursuant to the Code.
(c) Amounts in a Participant's Transfer/Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part, except as
provided in paragraph (d) of this Section. The Trustee shall have no duty or
responsibility to inquire as to the propriety of the amount, value or type of
assets transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to be held by
the Trustee under the terms of this Plan.
(d) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount credited to the
Participant's Transfer/Rollover Account. Any distributions of amounts held in a
Participant's Transfer/Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder. Furthermore, such amounts shall be considered as
part of a Participant's benefit in determining whether an involuntary cash-out
of benefits may be made without Participant consent.
(e) The Administrator may direct that Employee transfers and
rollovers made after a Valuation Date be segregated into a separate account for
each Participant until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as part of
the general Trust Fund.
(f) This Plan shall not accept any direct or indirect transfers
(as that term is defined and interpreted under Code Section 401(a)(11) and the
Regulations thereunder) from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan which
would otherwise have provided for a life annuity form of payment to the
Participant.
(g) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only be permitted if it will not result in the
elimination or reduction of any "Section 411(d)(6) protected benefit" as
described in Section 8.1.
4.7 QUALIFIED MILITARY SERVICE. Notwithstanding any provision of this
Plan to the contrary, effective December 12, 1994, contributions, benefits and
service will be provided in accordance with Code Section 414(u).
23
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND. The Administrator shall direct the
Trustee, as of each Valuation Date, to determine the net worth of the assets
comprising the Trust Fund as it exists on the Valuation Date. In determining
such net worth, the Trustee shall value the assets comprising the Trust Fund at
their fair market value (or their contractual value in the case of a Contract or
Policy) as of the Valuation Date and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION. In determining the fair market value of
securities held in the Trust Fund which are listed on a registered stock
exchange, the Administrator shall direct the Trustee to value the same at the
prices they were last traded on such exchange preceding the close of business on
the Valuation Date. If such securities were not traded on the Valuation Date, or
if the exchange on which they are traded was not open for business on the
Valuation Date, then the securities shall be valued at the prices at which they
were last traded prior to the Valuation Date. Any unlisted security held in the
Trust Fund shall be valued at its bid price next preceding the close of business
on the Valuation Date, which bid price shall be obtained from a registered
broker or an investment banker. In determining the fair market value of assets
other than securities for which trading or bid prices can be obtained, the
Trustee may appraise such assets itself, or in its discretion, employ one or
more appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT. Every Participant may
terminate employment with the Employer and retire for the purposes hereof on the
Participant's Normal Retirement Date or Early Retirement Date. However, a
Participant may postpone the termination of employment with the Employer to a
later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.3, shall
continue until such Participant's Late Retirement Date. Upon a Participant's
Retirement Date or attainment of Normal Retirement Date without termination of
employment with the Employer, or as soon thereafter as is practicable, the
Trustee shall distribute, at the election of the Participant, all amounts
credited to such Participant's Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH.
(a) Upon the death of a Participant before the Participant's
Retirement Date or other termination of employment, all amounts credited to such
Participant's Account shall become fully Vested. The Administrator shall direct
the Trustee, in accordance with the provisions of Sections 6.6 and 6.7, to
distribute the value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute any remaining
24
Vested amounts credited to the accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be taken into
account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and of the right of
any person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the Participant may
designate a Beneficiary other than the spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke a
designation of a Beneficiary or change a Beneficiary by filing written (or in
such other form as permitted by the Internal Revenue Service) notice of such
revocation or change with the Administrator. However, the Participant's spouse
must again consent in writing (or in such other form as permitted by the
Internal Revenue Service) to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to relinquish such
right.
(f) In the event no valid designation of Beneficiary exists, or if
the Beneficiary is not alive at the time of the Participant's death, the death
benefit will be paid in the following order of priority:
(1) the Participant's surviving spouse;
(2) the Participant's children, including adopted children,
per stirpes;
(3) the Participant's surviving parents, in equal shares; or
(4) the Participant's estate.
25
If the Beneficiary does not predecease the Participant, but dies prior to
distribution of the death benefit, the death benefit will be paid to the
Beneficiary's estate.
(g) Notwithstanding anything in this Section to the contrary, if a
Participant has designated the spouse as a Beneficiary, then a divorce decree or
a legal separation that relates to such spouse shall revoke the Participant's
designation of the spouse as a Beneficiary unless the decree or a qualified
domestic relations order (within the meaning of Code Section 414(p)) provides
otherwise.
(h) Any consent by the Participant's spouse to waive any rights to
the death benefit must be in writing (or in such other form as permitted by the
Internal Revenue Service), must acknowledge the effect of such waiver, and be
witnessed by a Plan representative or a notary public. Further, the spouse's
consent must be irrevocable and must acknowledge the specific nonspouse
Beneficiary.
6.3 DISABILITY RETIREMENT BENEFITS. No disability benefits, other than
those payable upon termination of employment, are provided in this Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.
(a) If a Participant's employment with the Employer is terminated
for any reason other than death or retirement, then such Participant shall be
entitled to such benefits as are provided hereinafter pursuant to this Section
6.4.
Distribution of the funds due to a Terminated Participant shall be made on
the occurrence of an event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer (upon the
Participant's death, Early or Normal Retirement). Any distribution under this
paragraph shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations thereunder.
For purposes of this Section 6.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall be deemed
to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to the Participant's Account determined
on the basis of the Participant's number of Years of Service according to the
following schedule:
Vesting Schedule
Years of Service Percentage
Less than 5 0%
5 100%
(c) Notwithstanding the vesting provided for in paragraph (b)
above, for any Top Heavy Plan Year, the Vested portion of the Participant's
Account of any Participant who has an Hour of Service after the Plan becomes top
heavy shall be a percentage of the total amount
26
credited to the Participant's Account determined on the basis of the
Participant's number of Years of Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy Plan,
the Administrator shall revert to the vesting schedule in effect before this
Plan became a Top Heavy Plan. Any such reversion shall be treated as a Plan
amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the Vested
percentage attained as of the later of the effective date or adoption date of
this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer contributions to the Plan or upon any full or
partial termination of the Plan, all amounts then credited to the account of any
affected Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
(f) The computation of a Participant's nonforfeitable percentage
of such Participant's interest in the Plan shall not be reduced as the result of
any direct or indirect amendment to this Plan. In the event that the Plan is
amended to change or modify any vesting schedule, or if the Plan is amended in
any way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage, or if the Plan is deemed amended by an automatic
change to a top heavy vesting schedule, then each Participant with at least
three (3) Years of Service as of the expiration date of the election period may
elect to have such Participant's nonforfeitable percentage computed under the
Plan without regard to such amendment or change. If a Participant fails to make
such election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the adoption date
of the amendment and shall end sixty (60) days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g) In determining Years of Service for purposes of vesting under
the Plan, Years of Service prior to the Effective Date of the Plan and prior to
the vesting computation period in which an Employee attains age eighteen (18)
shall be excluded.
27
6.5 DISTRIBUTION OF BENEFITS.
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant or such
Participant's Beneficiary any amount to which the Participant is entitled under
the Plan in one lump-sum payment in cash.
(b) Any distribution to a Participant, for Plan Years beginning
after August 5, 1997, who has a benefit which exceeds $5,000 ($3,500 for Plan
Years beginning prior to August 6, 1997) or, if the distribution is made prior
to March 22, 1999, has ever exceeded $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997) at the time of any prior distribution, shall require
such Participant's written (or in such other form as permitted by the Internal
Revenue Service) consent pursuant to this Section if such distribution occurs
prior to the time the benefit is "immediately distributable." A benefit is
"immediately distributable" if any part of the benefit could be distributed to
the Participant (or surviving spouse) before the Participant attains (or would
have attained if not deceased) the later of the Participant's Normal Retirement
Age or age 62.
(c) The following rules will apply to the consent requirements set
forth in subsection (b):
(1) The Participant must be informed of the right to defer
receipt of the distribution. If a Participant fails to consent, it shall
be deemed an election to defer the distribution of any benefit. However,
any election to defer the receipt of benefits shall not apply with respect
to distributions which are required under Section 6.5(d).
(2) Notice of the rights specified under this paragraph
shall be provided no less than thirty (30) days and no more than ninety
(90) days before the date the distribution commences.
(3) Written (or such other form as permitted by the Internal
Revenue Service) consent of the Participant to the distribution must not
be made before the Participant receives the notice and must not be made
more than ninety (90) days before the date the distribution commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.
Any such distribution may commence less than thirty (30) days after the
notice required under Regulation 1.411 (a)-11(c) is given, provided that: (1)
the Administrator clearly informs the Participant that the Participant has a
right to a period of at least thirty (30) days after receiving the notice to
consider the decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the Participant, after
receiving the notice, affirmatively elects a distribution.
(d) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits made on or after January 1, 1997 shall
be made in accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the
28
Regulations thereunder (including Regulation 1.401(a)(9)-2), the provisions of
which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed not later than April 1st of the calendar year
following the later of (i) the calendar year in which the Participant
attains age 70 1/2 or (ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall not apply in the
case of a Participant who is a "five (5) percent owner" at any time during
the Plan Year ending with or within the calendar year in which such owner
attains age 70 1/2. Such distributions shall be equal to or greater than
any required distribution.
(2) Distributions to a Participant and the Participant's
Beneficiaries shall only be made in accordance with the incidental death
benefit requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
With respect to distributions under the Plan made for calendar years
beginning on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of Code Section 401(a)(9) in accordance with the
Regulations under Code Section 401(a)(9) that were proposed on January 17, 2001,
notwithstanding any provision of the Plan to the contrary. This amendment shall
continue in effect until the end of the last calendar year beginning before the
effective date of final Regulations under Code Section 401(a)(9) or such other
date specified in guidance published by the Internal Revenue Service.
(e) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse shall not be redetermined in accordance
with Code Section 40 1 (a)(9)(D). Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(f) The restrictions imposed by this Section shall not apply if a
Participant has, prior to January 1, 1984, made a written designation to have
retirement benefits paid in an alternative method acceptable under Code Section
401(a)(9) as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall comply with
all of the requirements of the Plan.
(h) If a distribution is made to a Participant who has not severed
employment and who is not fully Vested in the Participant's Account and the
Participant may increase the Vested percentage in such account, then, at any
relevant time the Participant's Vested portion of the account will be equal to
an amount ("X") determined by the formula:
X equals P(AB plus D) - D
For purposes of applying the formula: P is the Vested percentage at the
relevant time, AB is the account balance at the relevant time, and D is the
amount of distribution.
29
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in cash subject to
the rules of Section 6.6(b).
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in accordance with
the following requirements and shall otherwise comply with Code Section
401(a)(9) and the Regulations thereunder. If it is determined, pursuant to
Regulations, that the distribution of a Participant's interest has begun and the
Participant dies before the entire interest has been distributed, the remaining
portion of such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of the date of death.
If a Participant dies before receiving any distributions of the interest in the
Plan or before distributions are deemed to have begun pursuant to Regulations,
then the death benefit shall be distributed to the Participant's Beneficiaries
by December 31st of the calendar year in which the fifth anniversary of the
Participant's date of death occurs.
(c) For purposes of this Section, any amount paid to a child of
the Participant will be treated as if it had been paid to the surviving spouse
if the amount becomes payable to the surviving spouse when the child reaches the
age of majority.
(d) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have death benefits
paid in an alternative method acceptable under Code Section 401(a)(9) as in
effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act of
1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION. Except as limited by Sections
6.5 and 6.6, whenever the Trustee is to make a distribution the distribution may
be made on such date or as soon thereafter as is practicable. However, unless a
Former Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the
payment of benefits shall occur not later than the sixtieth (60th) day after the
close of the Plan Year in which the latest of the following events occurs: (a)
the date on which the Participant attains the earlier of age 65 or the Normal
Retirement Age specified herein; (b) the tenth (10th) anniversary of the year in
which the Participant commenced participation in the Plan; or (c) the date the
Participant terminates service with the Employer.
Notwithstanding the foregoing, the failure of a Participant to consent to
a distribution that is "immediately distributable" (within the meaning of
Section 6.5), shall be deemed to be an election to defer the commencement of
payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY. In the event a
distribution is to be made to a minor or incompetent Beneficiary, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none in the case of a minor Beneficiary, to a parent of such Beneficiary
or a responsible adult with whom the Beneficiary maintains residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to
Minors Act, if such is permitted by the laws of the state in which said
Beneficiary
30
resides. Such a payment to the legal guardian, custodian or parent of a minor
Beneficiary shall fully discharge the Trustee, Employer, and Plan from further
liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN. In the event that
all, or any portion, of the distribution payable to a Participant or Beneficiary
hereunder shall, at the later of the Participant's attainment of age 62 or
Normal Retirement Age, remain unpaid solely by reason of the inability of the
Administrator, after sending a registered letter, return receipt requested, to
the last known address, and after further diligent effort, to ascertain the
whereabouts of such Participant or Beneficiary, the amount so distributable
shall be treated as a Forfeiture pursuant to the Plan. Notwithstanding the
foregoing, effective October 1, 2001, or if later, the adoption date of this
amendment and restatement, if the value of a Participant's Vested benefit
derived from Employer and Employee contributions does not exceed $5,000 ($3,500
for Plan Years beginning prior to August 6, 1997), then the amount distributable
may, in the sole discretion of the Administrator, either be treated as a
Forfeiture, or be paid directly to an individual retirement account described in
Code Section 408(a) or an individual retirement annuity described in Code
Section 408(b) at the time it is determined that the whereabouts of the
Participant or the Participant's Beneficiary cannot be ascertained. In the event
a Participant or Beneficiary is located subsequent to the Forfeiture, such
benefit shall be restored, first from Forfeitures, if any, and then from an
additional Employer contribution if necessary. However, regardless of the
preceding, a benefit which is lost by reason of escheat under applicable state
law is not treated as a Forfeiture for purposes of this Section nor as an
impermissable forfeiture under the Code.
6.10 PRE-RETIREMENT DISTRIBUTION. Unless otherwise provided, at such time
as a Participant shall have attained the age of 62 years, the Administrator, at
the election of the Participant who has not severed employment with the
Employer, shall direct the Trustee to distribute all or a portion of the amount
then credited to the accounts maintained on behalf of the Participant. However,
no distribution from the Participant's Account shall occur prior to 100%
vesting. No distribution shall be made from the Participant's account unless the
Participant has completed five (5) years of participation in the Plan. In the
event that the Administrator makes such a distribution, the Participant shall
continue to be eligible to participate in the Plan on the same basis as any
other Employee. Any distribution made pursuant to this Section shall be made in
a manner consistent with Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the Regulations
thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP.
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year up to
the lesser of 100% of the Participant's Account valued as of the last Valuation
Date or the amount necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later, the
Valuation Date immediately preceding the date of distribution, and the
Participant's Account shall be reduced accordingly. Withdrawal under this
Section is deemed to be on account of an immediate and heavy financial need of
the Participant if the withdrawal is for:
31
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse, or any of the
Participant's dependents (as defined in Code Section 152) or necessary for
these persons to obtain medical care as described in Code Section 213(d);
(2) The costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition, related educational fees, and room
and board expenses for the next twelve (12) months of post-secondary
education for the Participant and the Participant's spouse, children, or
dependents;
(5) Payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or foreclosure on
the mortgage on that residence; or
(6) An immediate and heavy financial need of the Participant
provided that the Administrator applies the need to all the Participants
in a uniform and nondiscriminatory manner.
(b) No such distribution shall be made from the Participant's
Account until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any "alternate payee" under a "qualified
domestic relations order." Furthermore, a distribution to an "alternate payee"
shall be permitted if such distribution is authorized by a "qualified domestic
relations order," even if the affected Participant has not separated from
service and has not reached the "earliest retirement age" under the Plan. For
the purposes of this Section, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meaning set forth under Code
Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and control the Plan assets
subject, however, to the direction of the Employer or an Investment
Manager if the Trustee should appoint such manager as to all or a portion
of the assets of the Plan;
32
(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event of
their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a written
annual report pursuant to Section 7.7.
(b) In the event that the Trustee shall be directed by the
Employer, or an Investment Manager with respect to the investment of any or all
Plan assets, the Trustee shall have no liability with respect to the investment
of such assets, but shall be responsible only to execute such investment
instructions as so directed.
(1) The Trustee shall be entitled to rely fully on the
written (or other form acceptable to the Administrator and the Trustee,
including, but not limited to, voice recorded) instructions of the
Employer, or any Fiduciary or nonfiduciary agent of the Employer, in the
discharge of such duties, and shall not be liable for any loss or other
liability, resulting from such direction (or lack of direction) of the
investment of any part of the Plan assets.
(2) The Trustee may delegate the duty of executing such
instructions to any nonfiduciary agent, which may be an affiliate of the
Trustee or any Plan representative.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign papers
on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.
(a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and income and in
such securities or property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks, common or
preferred, open-end or closed-end mutual funds, bonds and other evidences of
indebtedness or ownership, and real estate or any interest therein. The Trustee
shall at all times in making investments of the Trust Fund consider, among other
factors, the short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments, the Trustee
shall not be restricted to securities or other property of the character
expressly authorized by the applicable law for trust investments; however, the
Trustee shall give due regard to any limitations imposed by the Code or the Act
so that at all times the Plan may qualify as a qualified Profit Sharing Plan and
Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the duties
of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
7.3 OTHER POWERS OF THE TRUSTEE. The Trustee, in addition to all powers
and authorities under common law, statutory authority, including the Act, and
other provisions of
33
the Plan, shall have the following powers and authorities, to be exercised in
the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with the
Trustee shall be bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any such sale or other
disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights or
other options, and to make any payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate reorganizations or other
changes affecting corporate securities, and to delegate discretionary powers,
and to pay any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property. However, the Trustee shall not vote proxies
relating to securities for which it has not been assigned full investment
management responsibilities. In those cases where another party has such
investment authority or discretion, the Trustee will deliver all proxies to said
party who will then have full responsibility for voting those proxies;
(d) To cause any securities or other property to be registered in
the Trustee's own name, in the name of one or more of the Trustee's nominees, in
a clearing corporation, in a depository, or in book entry form or in bearer
form, but the books and records of the Trustee shall at all times show that all
such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem advisable;
and for any sum so borrowed, to issue a promissory note as Trustee, and to
secure the repayment thereof by pledging all, or any part, of the Trust Fund;
and no person lending money to the Trustee shall be bound to see to the
application of the money lent or to inquire into the validity, expediency, or
propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best interests
of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as Trustee
hereunder, whether or not such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers herein granted;
34
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend suits
or legal or administrative proceedings, and to represent the Plan in all suits
and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or may not
be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance companies,
to be selected by the Administrator, as an investment of the Trust Fund such
annuity, or other Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or from time to time,
whatever rights and privileges may be granted under such annuity, or other
Contracts; to collect, receive, and settle for the proceeds of all such annuity
or other Contracts as and when entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest or in cash or cash balances
without liability for interest thereon;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under
the Investment Company Act of 1940;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if the
options are not traded on a national securities exchange, are guaranteed by a
member firm of the New York Stock Exchange regardless of whether such options
are covered;
(p) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(q) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust created
by the Employer or any Affiliated Employer, and to commingle such assets and
make joint or common investments and carry joint accounts on behalf of this Plan
and Trust and such other trust or trusts, allocating undivided shares or
interests in such investments or accounts or any pooled assets of the two or
more trusts in accordance with their respective interests;
(r) To do all such acts and exercise all such rights and
privileges although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
35
7.4 LOANS TO PARTICIPANTS.
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances: (1) loans
shall be made available to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants and Beneficiaries; (3) loans shall bear a reasonable rate of
interest; (4) loans shall be adequately secured; and (5) loans shall provide for
periodic repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the Participant) may,
in accordance with a uniform and nondiscriminatory policy established by the
Administrator, be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant during the
one year period ending on the day before the date on which such loan is
made, over the outstanding balance of loans from the Plan to the
Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(c) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to exceed five (5)
years. However, loans used to acquire any dwelling unit which, within a
reasonable time, is to be used (determined at the time the loan is made) as a
"principal residence" of the Participant shall provide for periodic repayment
over a reasonable period of time that may exceed five (5) years. For this
purpose, a "principal residence" has the same meaning as a "principal residence"
under Code Section 1034. Loan repayments may be suspended under this Plan as
permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in writing and
must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
36
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will
be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate written
document which, when properly executed, is hereby incorporated by reference and
made a part of the Plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the necessity of
amending this Section.
(e) Notwithstanding anything in this Plan to the contrary, if a
Participant or Beneficiary defaults on a loan made pursuant to this Section,
then the loan default will be a distributable event to the extent permitted by
the Code and Regulations.
(f) Notwithstanding anything in this Section to the contrary, any
loans made prior to the date this amendment and restatement is adopted shall be
subject to the terms of the plan in effect at the time such loan was made.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS. At the direction of the
Administrator, the Trustee shall, from time to time, in accordance with the
terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be
responsible in any way for the application of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES. The Trustee shall be
paid such reasonable compensation as set forth in the Trustee's fee schedule (if
the Trustee has such a schedule) or as agreed upon in writing by the Employer
and the Trustee. However, an individual serving as Trustee who already receives
full-time pay from the Employer shall not receive compensation from the Plan. In
addition, the Trustee shall be reimbursed for any reasonable expenses, including
reasonable counsel fees incurred by it as Trustee. Such compensation and
expenses shall be paid from the Trust Fund unless paid or advanced by the
Employer. All taxes of any kind whatsoever that may be levied or assessed under
existing or future laws upon, or in respect of, the Trust Fund or the income
thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE.
(a) Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan Year, the
Trustee, or its agent, shall furnish to the Employer and Administrator a written
statement of account with respect to the Plan Year for which such contribution
was made setting forth:
(1) the net income, or loss, of the Trust Fund;
(2) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
37
(3) the increase, or decrease, in the value of the Trust
Fund;
(4) all payments and distributions made from the Trust Fund;
and
(5) such further information as the Trustee and/or
Administrator deems appropriate.
(b) The Employer, promptly upon its receipt of each such statement
of account, shall acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof. Failure by the
Employer to disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The approval by
the Employer of any statement of account shall be binding on the Employer and
the Trustee as to all matters contained in the statement to the same extent as
if the account of the Trustee had been settled by judgment or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having or
claiming an interest in the Plan were parties. However, nothing contained in
this Section shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.8 AUDIT.
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator shall direct
the Trustee to engage on behalf of all Participants an independent qualified
public accountant for that purpose. Such accountant shall, after an audit of the
books and records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of the audit setting forth the
accountant's opinion as to whether any statements, schedules or lists that are
required by Act Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity with generally accepted
accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and
may, at the election of the Employer, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated, supervised, and subject to periodic
examination by a state or federal agency, then it shall transmit and certify the
accuracy of that information to the Administrator as provided in Act Section 103
(b) within one hundred twenty (120) days after the end of the Plan Year or such
other date as may be prescribed under regulations of the Secretary of Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE.
(a) Unless otherwise agreed to by both the Trustee and the
Employer, a Trustee may resign at any time by delivering to the Employer, at
least thirty (30) days before its effective date, a written notice of
resignation.
38
(b) Unless otherwise agreed to by both the Trustee and the
Employer, the Employer may remove a Trustee at any time by delivering to the
Trustee, at least thirty (30) days before its effective date, a written notice
of such Trustee's removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such successor, upon
accepting such appointment in writing and delivering same to the Employer,
shall, without further act, become vested with all the powers and
responsibilities of the predecessor as if such successor had been originally
named as a Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms of the
Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event a
successor is so designated by the Employer and accepts such designation, the
successor shall, without further act, become vested with all the powers and
responsibilities of the predecessor as if such successor had been originally
named as Trustee herein immediately upon the death, resignation, incapacity, or
removal of the predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, the
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the portion of the Plan Year during which the individual
or entity served as Trustee. This statement shall be either (i) included as part
of the annual statement of account for the Plan Year required under Section 7.7
or (ii) set forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the annual
statement of account for the Plan Year. The procedures set forth in Section 7.7
for the approval by the Employer of annual statements of account shall apply to
any special statement of account rendered hereunder and approval by the Employer
of any such special statement in the manner provided in Section 7.7 shall have
the same effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of any predecessor who
has rendered all statements of account required by Section 7.7 and this
subparagraph.
7.10 TRANSFER OF INTEREST. Notwithstanding any other provision contained
in this Plan, the Trustee at the direction of the Administrator shall transfer
the Vested interest, if any, of a Participant to another trust forming part of a
pension, profit sharing or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.11 TRUSTEE INDEMNIFICATION. The Employer agrees to indemnify and hold
harmless the Trustee against any and all claims, losses, damages, expenses and
liabilities the Trustee may incur in the exercise and performance of the
Trustee's power and duties hereunder, unless the same are determined to be due
to gross negligence or willful misconduct.
39
7.12 DIRECT ROLLOVER.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a "distributee's" election under this Section, a
"distributee" may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an "eligible rollover distribution" that
is equal to at least $500 paid directly to an "eligible retirement plan"
specified by the "distributee" in a "direct rollover."
(b) For purposes of this Section the following definitions shall
apply:
(1) An "eligible rollover distribution" is any distribution
of all or any portion of the balance to the credit of the "distributee,"
except that an "eligible rollover distribution" does not include: any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the "distributee" or the joint lives (or joint life
expectancies) of the "distributee" and the "distributee's" designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code
Section 401(a)(9); the portion of any other distribution that is not
includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities); any
hardship distribution described in Code Section 401 (k)(2)(B)(i)(IV) made
after December 31, 1999; and any other distribution that is reasonably
expected to total less than $200 during a year.
(2) An "eligible retirement plan" is an individual
retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan
described in Code Section 403(a), or a qualified trust described in Code
Section 401(a), that accepts the "distributee's" "eligible rollover
distribution." However, in the case of an "eligible rollover distribution"
to the surviving spouse, an "eligible retirement plan" is an individual
retirement account or individual retirement annuity.
(3) A "distributee" includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are "distributees" with regard to the interest of the
spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the
"eligible retirement plan" specified by the "distributee."
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT.
(a) The Employer shall have the right at any time to amend this
Plan, subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee or Administrator
may only be made with the Trustee's or
40
Administrator's written consent. Any such amendment shall become effective as
provided therein upon its execution. The Trustee shall not be required to
execute any such amendment unless the amendment affects the duties of the
Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is required to
pay taxes and administration expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4) or other IRS guidance, no Plan amendment or transaction having the
effect of a Plan amendment (such as a merger, plan transfer or similar
transaction) shall be effective if it eliminates or reduces any "Section
411(d)(6) protected benefit" or adds or modifies conditions relating to "Section
411(d)(6) protected benefits" which results in a further restriction on such
benefits unless such "Section 411(d)(6) protected benefits" are preserved with
respect to benefits accrued as of the later of the adoption date or effective
date of the amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit. A Plan amendment that
eliminates or restricts the ability of a Participant to receive payment of the
Participant's interest in the Plan under a particular optional form of benefit
will be permissible if the amendment satisfies the conditions in (1) and (2)
below:
(1) The amendment provides a single-sum distribution form
that is otherwise identical to the optional form of benefit eliminated or
restricted. For purposes of this condition (1), a single-sum distribution
form is otherwise identical only if it is identical in all respects to the
eliminated or restricted optional form of benefit (or would be identical
except that it provides greater rights to the Participant) except with
respect to the timing of payments after commencement.
(2) The amendment is not effective unless the amendment
provides that the amendment shall not apply to any distribution with an
annuity starting date earlier than the earlier of: (i) the ninetieth
(90th) day after the date the Participant receiving the distribution has
been furnished a summary that reflects the amendment and that satisfies
the Act requirements at 29 CFR 2520.104b-3 (relating to a summary of
material modifications) or (ii) the first day of the second Plan Year
following the Plan Year in which the amendment is adopted.
8.2 TERMINATION.
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. Upon any full or partial termination, all amounts credited to the
affected Participants' Accounts shall become 100% Vested as provided in Section
6.4 and shall not thereafter be subject to forfeiture, and all unallocated
amounts, including Forfeitures, shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
41
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to Participants in a
manner which is consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or through the purchase of
irrevocable nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in accordance with Section
8.1(c).
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. This Plan and Trust may
be merged or consolidated with, or its assets and/or liabilities may be
transferred to any other plan and trust only if the benefits which would be
received by a Participant of this Plan, in the event of a termination of the
Plan immediately after such transfer, merger or consolidation, are at least
equal to the benefits the Participant would have received if the Plan had
terminated immediately before the transfer, merger or consolidation, and such
transfer, merger or consolidation does not otherwise result in the elimination
or reduction of any "Section 411(d)(6) protected benefits" in accordance with
Section 8.1(c).
ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS. For any Top Heavy Plan Year, the Plan
shall provide the special vesting requirements of Code Section 416(b) pursuant
to Section 6.4 of the Plan and the special minimum allocation requirements of
Code Section 416(c) pursuant to Section 4.3 of the Plan.
9.2 DETERMINATION OF TOP HEAVY STATUS.
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued Benefits
of Key Employees and (2) the sum of the Aggregate Accounts of Key Employees
under this Plan and all plans of an Aggregation Group, exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and the Aggregate Accounts of all
Key and Non-Key Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not be
taken into account for purposes of determining whether this Plan is a Top Heavy
Plan (or whether any Aggregation Group which includes this Plan is a Top Heavy
Group). In addition, if a Participant or Former Participant has not performed
any services for any Employer maintaining the Plan at any time during the five
year period ending on the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy Plan.
(b) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) the Participant's Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date.
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(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the Valuation Date but due on or before
the Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made after
the Determination Date that are allocated as of a date in that first Plan
Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding Plan
Years. However, in the case of distributions made after the Valuation Date
and prior to the Determination Date, such distributions are not included
as distributions for top heavy purposes to the extent that such
distributions are already included in the Participant's Aggregate Account
balance as of the Valuation Date. Notwithstanding anything herein to the
contrary, all distributions, including distributions made prior to January
1, 1984, and distributions under a terminated plan which if it had not
been terminated would have been required to be included in an Aggregation
Group, will be counted. Further, distributions from the Plan (including
the cash value of life insurance policies) of a Participant's account
balance because of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a part of
the Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan transfers, it shall
always consider such rollovers or plan-to-plan transfers as a distribution
for the purposes of this Section. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not consider such rollovers
or plan-to-plan transfers as part of the Participant's Aggregate Account
balance. However, rollovers or plan-to-plan transfers accepted prior to
January 1, 1984 shall be considered as part of the Participant's Aggregate
Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a distribution for
purposes of this Section. If this Plan is the plan accepting such rollover
or plan-to-plan transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Participant's Aggregate Account balance,
irrespective of the date on which such rollover or plan-to-plan transfer
is accepted.
(7) For the purposes of determining whether two employers
are to be treated as the same employer in (5) and (6) above, all employers
aggregated under Code Section 414(b), (c), (m) and (o) are treated as the
same employer.
(c) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
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(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key
Employee is a participant in the Plan Year containing the Determination
Date or any of the four preceding Plan Years, and each other plan of the
Employer which enables any plan in which a Key Employee participates to
meet the requirements of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a Required Aggregation
Group.
In the case of a Required Aggregation Group, each plan in the group will
be considered a Top Heavy Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation Group will be considered
a Top Heavy Plan if the Required Aggregation Group is not a Top Heavy
Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole, would
continue to satisfy the provisions of Code Sections 401(a)(4) and 410.
Such group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be aggregated
in order to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan
of the Employer if it was maintained within the last five (5) years ending
on the Determination Date.
(d) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day of such Plan
Year.
(e) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant other than
a Key Employee, shall be as determined using the single accrual method used for
all plans of the Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall 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
and the Regulations thereunder for the first and second plan years of a defined
benefit plan.
(f) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
44
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all Participants.
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS. This Plan shall not be deemed to constitute a
contract between the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time regardless of the
effect which such discharge shall have upon the Employee as a Participant of
this Plan.
10.2 ALIENATION.
(a) Subject to the exceptions provided below, and as otherwise
permitted by the Code and the Act, no benefit which shall be payable out of the
Trust Fund to any person (including a Participant or the Participant's
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or against
such person, and the same shall not be recognized by the Trustee, except to such
extent as may be required by law.
(b) Subsection (a) shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, by reason of a loan made pursuant to
Section 7.4. At the time a distribution is to be made to or for a Participant's
or Beneficiary's benefit, such proportion of the amount to be distributed as
shall equal such indebtedness shall be paid to the Plan, to apply against or
discharge such indebtedness. Prior to making a payment, however, the Participant
or Beneficiary must be given written notice by the Administrator that such
indebtedness is to be so paid in whole or part from the Participant's Account.
If the Participant or Beneficiary does not agree that the indebtedness is a
valid claim against the Vested Participant's Account, the Participant or
Beneficiary shall be entitled to a review of the validity of the claim in
accordance with procedures provided in Sections 2.7 and 2.8.
(c) Subsection (a) shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other domestic
relations orders permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified orders.
Further, to the extent
45
provided under a "qualified domestic relations order," a former spouse of a
Participant shall be treated as the spouse or surviving spouse for all purposes
under the Plan.
(d) Subsection (a) shall not apply to an offset to a Participant's
accrued benefit against an amount that the Participant is ordered or required to
pay the Plan with respect to a judgment, order, or decree issued, or a
settlement entered into, on or after August 5, 1997, in accordance with Code
Sections 401(a)(13)(C) and (D).
10.3 CONSTRUCTION OF PLAN. This Plan and Trust shall be construed and
enforced according to the Act and the laws of the State of Illinois, other than
its laws respecting choice of law, to the extent not pre-empted by the Act.
10.4 GENDER AND NUMBER. Wherever any words are used herein in the
masculine, feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so apply, and
whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where
they would so apply.
10.5 LEGAL ACTION. In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS.
(a) Except as provided below and otherwise specifically permitted
by law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the happening of
any contingency, by collateral arrangement or by any other means, for any part
of the corpus or income of any Trust Fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Former Participants, or their
Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Act Section 403(c)(2)(A), the Employer may
demand repayment of such excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return such amount to the
Employer within the one (1) year period. Earnings of the Plan attributable to
the contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
(c) Except for Sections 3.5, 3.6, and 4.1(b), any contribution by
the Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may, within one (1) year following the
final determination of the disallowance, whether by agreement with the Internal
Revenue Service or by final decision of a competent jurisdiction, demand
repayment of such disallowed contribution and the Trustee shall return such
contribution within one (1) year
46
following the disallowance. Earnings of the Plan attributable to the
contribution may not be returned to the Employer, but any losses attributable
thereto must reduce the amount so returned.
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE. The Employer,
Administrator and Trustee, and their successors, shall not be responsible for
the validity of any Contract issued hereunder or for the failure on the part of
the insurer to make payments provided by any such Contract, or for the action of
any person which may delay payment or render a Contract null and void or
unenforceable in whole or in part.
10.8 INSURER'S PROTECTIVE CLAUSE. Except as otherwise agreed upon in
writing between the Employer and the insurer, an insurer which issues any
Contracts hereunder shall not have any responsibility for the validity of this
Plan or for the tax or legal aspects of this Plan. The insurer shall be
protected and held harmless in acting in accordance with any written direction
of the Trustee, and shall have no duty to see to the application of any funds
paid to the Trustee, nor be required to question any actions directed by the
Trustee. Regardless of any provision of this Plan, the insurer shall not be
required to take or permit any action or allow any benefit or privilege contrary
to the terms of any Contract which it issues hereunder, or the rules of the
insurer.
10.9 RECEIPT AND RELEASE FOR PAYMENTS. Any payment to any Participant,
the Participant's legal representative, Beneficiary, or to any guardian or
committee appointed for such Participant or Beneficiary in accordance with the
provisions of the Plan, shall, to the extent thereof, be in full satisfaction of
all claims hereunder against the Trustee and the Employer, either of whom may
require such Participant, legal representative, Beneficiary, guardian or
committee, as a condition precedent to such payment, to execute a receipt and
release thereof in such form as shall be determined by the Trustee or Employer.
10.10 ACTION BY THE EMPLOYER. Whenever the Employer under the terms of the
Plan is permitted or required to do or perform any act or matter or thing, it
shall be done and performed by a person duly authorized by its legally
constituted authority.
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY. The "named
Fiduciaries" of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee and (4) any Investment Manager appointed hereunder. The named
Fiduciaries shall have only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan including, but not
limited to, any agreement allocating or delegating their responsibilities, the
terms of which are incorporated herein by reference. In general, the Employer
shall have the sole responsibility for making the contributions provided for
under Section 4.1; and shall have the authority to appoint and remove the
Trustee and the Administrator; to formulate the Plan's "funding policy find
method"; and to amend or terminate, in whole or in part, the Plan. The
Administrator shall gave the sole responsibility for the administration of the
Plan, including, but not limited to, the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Trustee shall
have the sole responsibility of management of the assets held under the Trust,
except to the extent directed pursuant to Article II or with respect to those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or
47
action taken by it shall be in accordance with the provisions of the Plan,
authorizing or providing for such direction, information or action. Furthermore,
each named Fiduciary may rely upon any such direction, information or action of
another named Fiduciary as being proper under the Plan, and is not required
under the Plan to inquire into the propriety of any such direction, information
or action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under the Plan as specified or allocated herein. No named
Fiduciary shall guarantee the Trust Fund in any manner against investment loss
or depreciation in asset value. Any person or group may serve in more than one
Fiduciary capacity.
10.12 HEADINGS. The headings and subheadings of this Plan have been
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
10.13 APPROVAL BY INTERNAL REVENUE SERVICE. Notwithstanding anything
herein to the contrary, if, pursuant to an application for qualification filed
by or on behalf of the Plan by the time prescribed by law for filing the
Employer's return for the taxable year in which the Plan is adopted, or such
later date that the Secretary of the Treasury may prescribe, the Commissioner of
Internal Revenue Service or the Commissioner's delegate should determine that
the Plan does not initially qualify as a tax-exempt plan under Code Sections 401
and 501, and such determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void ab initio and all
amounts contributed to the Plan by the Employer, less expenses paid, shall be
returned within one (1) year and the Plan shall terminate, and the Trustee shall
be discharged from all further obligations. If the disqualification relates to
an amended plan, then the Plan shall operate as if it had not been amended.
10.14 UNIFORMITY. All provisions of this Plan shall be interpreted and
applied in a uniform, nondiscriminatory manner. In the event of any conflict
between the terms of this Plan and any Contract purchased hereunder, the Plan
provisions shall control.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS. Notwithstanding anything herein to the
contrary, with the consent of the Employer and Trustee, any other corporation or
entity, whether an affiliate or subsidiary or not, may adopt this Plan and all
of the provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by Participating Employers,
as well as all increments thereof.
48
(c) Any expenses of the Plan which are to be paid by the Employer
or borne by the Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the credit of all
Participants.
11.3 DESIGNATION OF AGENT. Each Participating Employer shall be deemed to
be a party to this Plan; provided, however, that with respect to all of its
relations with the Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS. In the event an Employee is transferred between
Participating Employers, accumulated service and eligibility shall be carried
with the Employee involved. No such transfer shall effect a termination of
employment hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to such
Employee in the same manner as was the Participating Employer from whom the
Employee was transferred.
11.5 PARTICIPATING EMPLOYER CONTRIBUTION AND FORFEITURES. Any
contribution or Forfeiture subject to allocation during each Plan Year shall be
determined and allocated separately by each Participating Employer, and shall be
allocated only among the Participants eligible to share of the Employer or
Participating Employer making the contribution or by which the forfeiting
Participant was employed. On the basis of the information furnished by the
Administrator, the Trustee shall keep separate books and records concerning the
affairs of each Participating Employer hereunder and as to the accounts and
credits of the Employees of each Participating Employer. The Trustee may, but
need not, register Contracts so as to evidence that a particular Participating
Employer is the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing Employer
shall immediately notify the Trustee thereof.
11.6 AMENDMENT. Amendment of this Plan by the Employer at any time when
there shall be a Participating Employer hereunder shall only be by the written
action of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of this
Plan.
11.7 DISCONTINUANCE OF PARTICIPATION. Any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan at any time. At
the time of any such discontinuance or revocation, satisfactory evidence thereof
and of any applicable conditions imposed shall be delivered to the Trustee. The
Trustee shall thereafter transfer, deliver and assign Contracts and other Trust
Fund assets allocable to the Participants of such Participating Employer to such
new trustee or insurer as shall have been designated by such Participating
Employer, in the event that it has established a separate qualified retirement
plan for its employees provided, however, that no such transfer shall be made if
the result is the elimination or reduction of any "Section 411(d)(6) protected
benefits" as described in Section 8.1(c). If no successor is designated, the
Trustee shall retain such assets for the Employees of said Participating
Employer pursuant to the provisions of Article VII hereof. In no such event
shall
49
any part of the corpus or income of the Trust as it relates to such
Participating Employer be used for or diverted for purposes other than for the
exclusive benefit of the Employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY. The Administrator shall have authority to
make any and all necessary rules or regulations, binding upon all Participating
Employers and all Participants, to effectuate the purpose of this Article.
50
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
Eagle Test Systems, Inc.
By /s/ Leonard Foxman
---------------------------------
EMPLOYER
Analog Test Institute, Inc.
By /s/ Theodore Foxman
----------------------------------
EMPLOYER
/s/ Leonard Foxman
-------------------------------------
TRUSTEE
51