1
Exhibit 4(c)
THE GORMAN-RUPP COMPANY
INDIVIDUAL PROFIT SHARING RETIREMENT PLAN
(As Amended and Restated as of January 1, 1987)
Table of Contents
Page
ARTICLE I - DEFINITIONS AND CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(1) Account and Sub-Account . . . . . . . . . . . . . . . . . . 1
(2) Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(3) Administrator or Plan Administrator . . . . . . . . . . . . 1
(4) Before-Tax Contributions . . . . . . . . . . . . . . . . . . 1
(5) Before-Tax Contributions Sub-Account . . . . . . . . . . . . 1
(6) Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . 1
(7) Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(8) Committee . . . . . . . . . . . . . . . . . . . . . . . . . 3
(9) Common Equity Fund . . . . . . . . . . . . . . . . . . . . . 3
(10) Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(11) Contributing Member . . . . . . . . . . . . . . . . . . . . 3
(12) Controlled Group . . . . . . . . . . . . . . . . . . . . . . 4
(13) Covered Employee . . . . . . . . . . . . . . . . . . . . . . 4
(14) Credited Compensation . . . . . . . . . . . . . . . . . . . 4
(15) Effective Date . . . . . . . . . . . . . . . . . . . . . . . 5
(16) Eligible Employee . . . . . . . . . . . . . . . . . . . . . 5
(17) Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(18) Employer . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(19) Employer Contributions . . . . . . . . . . . . . . . . . . . 5
(20) Employer Matching Contributions . . . . . . . . . . . . . . 5
(21) Employer Matching Contributions Sub-Account . . . . . . . . 5
(22) Employer Profit Sharing Contributions . . . . . . . . . . . 5
(23) Employer Profit Sharing Contributions
Sub-Account . . . . . . . . . . . . . . . . . . . . . . . 5
(24) Enrollment Date . . . . . . . . . . . . . . . . . . . . . . 6
(25) Fiduciary . . . . . . . . . . . . . . . . . . . . . . . . . 6
(26) Gorman-Rupp Stock . . . . . . . . . . . . . . . . . . . . . 6
(27) Gorman-Rupp Stock Fund . . . . . . . . . . . . . . . . . . . 6
(28) Hardship . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(29) Hours of Service . . . . . . . . . . . . . . . . . . . . . . 6
(30) Investment Fund . . . . . . . . . . . . . . . . . . . . . . 10
(31) Member . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(32) Money Market Fund . . . . . . . . . . . . . . . . . . . . . 10
(33) Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . 11
(34) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(35) Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . 11
(36) Prior Written Notice . . . . . . . . . . . . . . . . . . . . 11
(37) Salary Reduction Agreement . . . . . . . . . . . . . . . . . 11
(38) Spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(39) Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(40) Trust Agreement . . . . . . . . . . . . . . . . . . . . . . 11
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(41) Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . 11
(42) Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(43) Valuation Date . . . . . . . . . . . . . . . . . . . . . . . 12
(44) Year of Eligibility Service . . . . . . . . . . . . . . . . 12
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II - ELIGIBILITY AND MEMBERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1 Eligible Employee . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 Commencement of Membership . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Contributing Membership . . . . . . . . . . . . . . . . . . . . . . . 14
2.4 Duration of Membership . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III - BEFORE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Amount of Contributions . . . . . . . . . . . . . . . . . . . . . . . 17
3.2 Payments to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.3 Changes in Contributions . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 Suspension and Resumption of Contributions . . . . . . . . . . . . . . 18
ARTICLE IV - EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1 Amount of Employer Contributions . . . . . . . . . . . . . . . . . . . 19
4.2 Time for Making Employer Contributions . . . . . . . . . . . . . . . . 20
4.3 Return of Employer Contributions . . . . . . . . . . . . . . . . . . . 21
4.4 Allocation of Employer Profit Sharing
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.5 Cash Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Allocation of Employer Matching Contributions . . . . . . . . . . . . 24
4.7 Funding Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE V - LIMITATIONS ON CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 25
5.1 Limitation on Deferrals . . . . . . . . . . . . . . . . . . . . . . . 25
5.2 Limitation on Before-Tax and Employer Profit Sharing Contributions . . 26
5.3 Limitation on Matching Contributions . . . . . . . . . . . . . . . . . 29
5.4 Monitoring Procedures . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5 Limitation on Individual Allocations . . . . . . . . . . . . . . . . . 32
5.6 Limitation on Total Individual Benefits . . . . . . . . . . . . . . . 35
5.7 Definitions for Limitations Provisions . . . . . . . . . . . . . . . . 36
5.8 Limitation on Employer Contributions . . . . . . . . . . . . . . . . . 37
ARTICLE VI - INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . 38
6.1 Investment Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.2 Account; Sub-Account . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.3 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.4 Investment of Contributions . . . . . . . . . . . . . . . . . . . . . 39
6.5 Directions to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII - MAINTENANCE AND VALUATION
OF MEMBERS' ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . 42
7.1 Valuation of Investment Funds . . . . . . . . . . . . . . . . . . . . 42
7.2 Procedures in Making All and Corrections . . . . . . . . . . . . . . . 43
7.3 Registration and Voting of Gorman-Rupp Stock . . . . . . . . . . . . . 44
7.4 Tender or Sale of Gorman-Rupp Stock . . . . . . . . . . . . . . . . . 45
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ARTICLE VIII - VESTING, DISTRIBUTIONS AND WITHDRAWALS . . . . . . . . . . . . . . . . . . 52
8.1 Nonforfeitable Member Interests . . . . . . . . . . . . . . . . . . . 52
8.2 Distributions on Death While an Employee . . . . . . . . . . . . . . . 52
8.3 Distributions on Other Termination of Employment . . . . . . . . . . . 52
8.4 Distributions on Death after Termination
of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.5 Time of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.6 Withdrawal of Contributions . . . . . . . . . . . . . . . . . . . . . 53
8.7 Order of Distributions and Withdrawals . . . . . . . . . . . . . . . . 54
8.8 Facility of Payment . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.9 Duplication of Benefits . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE IX - ADMINISTRATION OF THE TRUST FUND . . . . . . . . . . . . . . . . . . . . . . 56
9.1 Appointment of Trustee . . . . . . . . . . . . . . . . . . . . . . . . 56
9.2 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.3 The Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.4 No Guarantee Against Loss . . . . . . . . . . . . . . . . . . . . . . 57
9.5 Payment of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.6 Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . . 57
9.7 No Diversion of Trust Fund . . . . . . . . . . . . . . . . . . . . . . 58
9.8 Transfer to this Plan from Other Plans . . . . . . . . . . . . . . . . 58
ARTICLE X - ADOPTION OF THE PLAN BY OTHER EMPLOYERS . . . . . . . . . . . . . . . . . . . 60
10.1 Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.2 Withdrawal of Employer . . . . . . . . . . . . . . . . . . . . . . . . 60
10.3 Withdrawal of Employee Group . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE XI - THE COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11.1 Appointment of Committee . . . . . . . . . . . . . . . . . . . . . . . 62
11.2 Formalities of Committee Action . . . . . . . . . . . . . . . . . . . 62
11.3 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11.4 Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
11.5 Uniform Administration of Plan . . . . . . . . . . . . . . . . . . . . 63
ARTICLE XII - ADMINISTRATION OF THE PLAN
AND FIDUCIARY RESPONSIBILITY . . . . . . . . . . . . . . . . . . . 64
12.1 Responsibility for Administration . . . . . . . . . . . . . . . . . . 64
12.2 Named Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.3 Delegation of Fiduciary Responsibilities . . . . . . . . . . . . . . . 64
12.4 Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
12.5 Limitation on Exculpatory Provisions . . . . . . . . . . . . . . . . . 66
ARTICLE XIII - CLAIMS PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
13.1 Method of Filing Claim . . . . . . . . . . . . . . . . . . . . . . . . 68
13.2 Notification by Committee . . . . . . . . . . . . . . . . . . . . . . 68
13.3 Review Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE XIV - AMENDMENT, SUSPENSION OR TERMINATION . . . . . . . . . . . . . . . . . . . 71
14.1 Right to Amend, Suspend or Terminate . . . . . . . . . . . . . . . . . 71
14.2 Procedure for Amendment, Suspension
or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
14.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . 71
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ARTICLE XV - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
15.1 Spendthrift Provisions . . . . . . . . . . . . . . . . . . . . . . . . 72
15.2 No Enlargement of Employment Rights . . . . . . . . . . . . . . . . . 72
15.3 Notices, Reports and Statements . . . . . . . . . . . . . . . . . . . 72
15.4 Action by Company . . . . . . . . . . . . . . . . . . . . . . . . . . 73
15.5 Merger or Transfer of Assets . . . . . . . . . . . . . . . . . . . . . 73
15.6 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
15.7 Severability Provision . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE XVI - TOP-HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . 75
16.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(1) Aggregation Group . . . . . . . . . . . . . . . . . . . . . 75
(2) Compensation . . . . . . . . . . . . . . . . . . . . . . . . 75
(3) Defined Benefit Plan . . . . . . . . . . . . . . . . . . . . 75
(4) Defined Contribution Plan . . . . . . . . . . . . . . . . . 75
(5) Determination Date . . . . . . . . . . . . . . . . . . . . . 75
(6) Extra Top-Heavy Group . . . . . . . . . . . . . . . . . . . 75
(7) Extra Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . 75
(8) Former Key Employee . . . . . . . . . . . . . . . . . . . . 75
(9) Key Employee . . . . . . . . . . . . . . . . . . . . . . . . 76
(10) Non-Key Employee . . . . . . . . . . . . . . . . . . . . . . 76
(11) Permissive Aggregation Group . . . . . . . . . . . . . . . . 76
(12) Required Aggregation Group . . . . . . . . . . . . . . . . . 77
(13) Top-Heavy Account Balance . . . . . . . . . . . . . . . . . 77
(14) Top-Heavy Group . . . . . . . . . . . . . . . . . . . . . . 78
(15) Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . . . . 78
16.2 Determination of Top-Heavy Status . . . . . . . . . . . . . . . . . . 78
16.3 Determination of Extra Top-Heavy Status . . . . . . . . . . . . . . . 79
16.4 Top-Heavy Plan Requirements . . . . . . . . . . . . . . . . . . . . . 80
16.5 Minimum Contribution Requirement . . . . . . . . . . . . . . . . . . . 80
16.6 Limitation on Compensation Requirement . . . . . . . . . . . . . . . . 82
16.7 Adjustment to Minimum Benefits and Allocations . . . . . . . . . . . . 82
16.8 Coordination With Other Plans . . . . . . . . . . . . . . . . . . . . 82
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THE GORMAN-RUPP COMPANY
INDIVIDUAL PROFIT SHARING RETIREMENT PLAN
(As Amended and Restated as of January 1, 1987)
-----------------------------------------------
The Gorman-Rupp Company, an Ohio corporation, hereby amends
and completely restates The Gorman-Rupp Individual Profit Sharing Retirement
Plan to read as follows effective as of January 1, 1987.
ARTICLE I - DEFINITIONS AND CONSTRUCTION
----------------------------------------
1.1 DEFINITIONS. The following terms when used in the Plan
and Trust Agreement with initial capital letters, unless the context clearly
indicates otherwise, shall have the following respective meanings:
(1) ACCOUNT AND SUB-ACCOUNT: See Section 6.2.
(2) ACT: The Employee Retirement Income Security Act of
1974, as the same has been and may be amended from time to time.
(3) ADMINISTRATOR OR PLAN ADMINISTRATOR: The Administrator
of the Plan as defined in section 3(16)(A) of the Act and section 414(g) of the
Code, shall be the Company, which may delegate all or any part of its powers,
duties and authorities in such capacity (without ceasing to be the
Administrator of the Plan) as hereinafter provided.
(4) BEFORE-TAX CONTRIBUTIONS: See Section 3.1.
(5) BEFORE-TAX CONTRIBUTIONS SUB-ACCOUNT: See Section 6.2.
(6) BENEFICIARY: A Member's Spouse or, if he has no Spouse
or his Spouse consents (in the manner hereinafter described in this Subsection
(6)) to the designation hereinafter
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provided for in this Subsection (6), such person or persons other than, or in
addition to, his Spouse as may be designated by a Member as his death
beneficiary under the Plan. Such a designation may be made, revoked or changed
only by an instrument (in form acceptable to the Committee) which is signed by
the Member, which, if he has a Spouse, includes his Spouse's written consent to
the action to be taken pursuant to such instrument (unless such action results
in the Spouse being named as the Member's sole Beneficiary), and which is filed
with the Committee before the Member's death. A Spouse's consent required by
this Subsection (6) shall be signed by the Spouse, shall acknowledge the effect
of such consent, shall be witnessed by a member of the Committee or by a notary
public and shall be effective only with respect to such Spouse. At any time
when all the persons designated by the Member as his Beneficiary have ceased to
exist, his Beneficiary shall be his Spouse or, if he does not then have a
Spouse, such relative or relatives of the Member (by blood, marriage or
adoption) and in such proportions as the Committee may select, or, in the
discretion of the Committee, the Member's estate. If a Member has no Spouse
and he has not made an effective Beneficiary designation pursuant to this
Subsection (6), his Beneficiary shall be determined by the Committee as
provided in the immediately preceding sentence. A person (or persons)
designated by a Participant as his Beneficiary who or which ceases to exist
shall not be entitled to any part of any payment thereafter to be made to the
Participant's Beneficiary unless the Participant's designation specifically
provided to the
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contrary or unless the Participant's Beneficiary is his Spouse who shall have
survived him, in which event any remaining payments shall be made to such
Spouse's estate unless the Participant has otherwise provided and the Spouse
has consented thereto as hereinabove set forth. If two or more persons
designated as a Member's Beneficiary are in existence, any action permitted or
required to be taken by a Beneficiary pursuant to any provision of the Plan
shall not be effective unless such action is taken by all such persons other
than any contingent Beneficiary who is not entitled to any payment under the
Plan until after another then existing Beneficiary ceases to exist; and if all
such persons cannot agree in respect of any such action required to be taken by
a Beneficiary, such action shall be taken by the Committee and shall be binding
on all such persons to the extent permitted by applicable law.
(7) CODE: The Internal Revenue Code of 1986, as the same has
been and may be amended from time to time.
(8) COMMITTEE: The committee provided for in Article XI.
(9) COMMON EQUITY FUND: One of the three Investment Funds
which shall be invested and reinvested solely in common or capital stocks
(other than Gorman-Rupp Stock), or in bonds, debentures or preferred stocks
convertible into common or capital stocks.
(10) COMPANY: The Gorman-Rupp Company, an Ohio corporation.
(11) CONTRIBUTING MEMBER: See Section 2.3.
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(12) CONTROLLED GROUP: The Employers and any and all other
corporations in which the Employers own at least 80% of the voting power or the
total value of all classes of stock. The Controlled Group shall also include
any and all corporations, trades and/or businesses, the employees of which
together with Employees of the Employers are required, by the first sentence of
subsection (b) or of subsection (c) of section 414 of the Code, to be treated
as if they were employed by a single employer.
(13) COVERED EMPLOYEE: An Employee of an Employer, but
excluding in the case of the Company each Employee who is employed as a Student
Employee by the Company; provided, however, that no Employee of the Company who
is employed in the Durham Products or Ramparts Divisions of the Company shall
become a Covered Employee before January 1, 1989. For the purposes of the
Plan, an Employee is employed as a Student Employee if he is employed by the
Company pursuant to its interns, cooperative education, work experience or
summer help programs.
(14) CREDITED COMPENSATION: Regular salary and regular
hourly wages paid to an Employee by the Employers, including cost of living,
shift, supervisory and longevity differentials, but excluding overtime pay,
bonuses, commissions, and all other forms of extra compensation; provided,
however, that effective January 1, 1989 the term "Credited Compensation" shall
mean the total (not in excess of $200,000 as such amount may be adjusted for
increases in the cost of living pursuant to regulations prescribed by the
Secretary of the Treasury) of an Employee's compensation for services performed
for a Controlled
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Group Member which is currently includible in gross income determined without
regard to any Salary Reduction Agreement to which the Employee is a party.
(15) EFFECTIVE DATE: January 1, 1984, for the Company and
Members who enter the Plan as its Employees, and, for any other Employers and
Members who enter the Plan as their Employees, the effective date specified by
such Employer in connection with its adoption of the Plan.
(16) ELIGIBLE EMPLOYEE: An Employee who satisfies the
eligibility requirements for membership in the Plan set forth in Section 2.1.
(17) EMPLOYEE: An employee of a member of the Controlled
Group, including an officer but not a director as such.
(18) EMPLOYER: The Company and any other member of the
Controlled Group adopting the Plan pursuant to Section 10.1.
(19) EMPLOYER CONTRIBUTIONS: Employer Matching Contributions
and Employer Profit Sharing Contributions.
(20) EMPLOYER MATCHING CONTRIBUTIONS: See Section 4.1(2).
(21) EMPLOYER MATCHING CONTRIBUTIONS SUB-ACCOUNT: See
Section 6.2.
(22) EMPLOYER PROFIT SHARING CONTRIBUTIONS: See Section
4.1(1).
(23) EMPLOYER PROFIT SHARING CONTRIBUTIONS SUB-ACCOUNT: See
Section 6.2.
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(24) ENROLLMENT DATE: The first day of each calendar quarter
commencing with January 1, 1989.
(25) FIDUCIARY: Any person, including each Named Fiduciary,
who is a fiduciary as defined in section 3(21)(A) of the Act.
(26) GORMAN-RUPP STOCK: Common shares, without par value, of
the Company.
(27) GORMAN-RUPP STOCK FUND: One of the three Investment
Funds which shall be invested and reinvested in Gorman-Rupp Stock.
(28) HARDSHIP: Immediate and heavy financial need on the
part of a Member that cannot be satisfied from other resources reasonably
available to the Member. The existence of Hardship and the amount necessary to
meet it shall be determined in a uniform and non-discriminatory manner by the
Committee, taking into account Treasury Department Regulations under section
401(k) of the Code, on the basis of information supplied by the Member.
(29) HOURS OF SERVICE: Hours of Service shall be credited in
accordance with the following rules:
(a) An Employee shall be credited with one Hour of Service
for each hour for which he is paid, or entitled to payment, by one or
more members of the Controlled Group for the performance of duties.
(b)(i) An Employee shall be credited with one Hour of Service
(on the basis set forth in subparagraph (iv) below) for each hour for
which he is paid, or entitled to payment,
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by one or more members of the Controlled Group on account of a period
of time during which no duties are performed (irrespective of whether
the employment relationship has terminated).
(ii) Notwithstanding the foregoing provisions of this
paragraph (b).
(A) no more than 501 Hours of Service shall be
credited under this paragraph (b) to an Employee on account of
any single continuous period during which he performs no
duties (whether or not such period occurs in a single Plan
Year);
(B) 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 shall not be
credited to the Employee if such payment is made or due under
a plan maintained solely for the purpose of complying with
applicable workmen's compensation or unemployment compensation
or disability insurance laws; and
(C) Hours of Service shall not be credited for a
payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
(iii) For purposes of this paragraph (b), a payment shall be
deemed to be made or due from a member of the Controlled Group
regardless of whether such payment is made by or due from such
Controlled Group member directly, or indirectly through, among others,
a trust fund, or insurer,
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to which such Controlled Group member 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
on behalf of a group of Employees in the aggregate.
(iv) For purposes of this paragraph (b), an Employee shall be
credited with Hours of Service on the basis of his regularly scheduled
working hours per week (or per day if he is paid on a daily basis) or,
in the case of an Employee without a regular work schedule, on the
basis of 40 Hours of Service per week (or 8 Hours of Service per day
if he is paid on a daily basis) for each week (or day) during such
period of time during which no duties are performed. Notwithstanding
the foregoing provisions of this subparagraph (iv), an Employee shall
not be credited with a greater number of Hours of Service for a period
during which no duties are performed than the number of hours for
which he is regularly scheduled for the performance of duties during
such period.
(c) An Employee shall be credited with one Hour of Service
for each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by one or more members
of the Controlled Group; provided, however, that (i) an hour shall not
be credited under both paragraph (a) or (b), as the case may be, and
this paragraph (c), and (ii) Hours of Service credited under this
paragraph (c) with respect to periods described in paragraph (b) shall
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9
be subject to the limitations and provisions set forth in said
paragraph (b).
(d)(i) If an Employee is absent from work on or after January
1, 1985 for any period (A) by reason of the pregnancy or such
Employee, (B) by reason of the birth of a child of such Employee, (C)
by reason of the placement of a child with such Employee, or (D) for
purposes of caring for a child for a period beginning immediately
following the birth or placement of such child, such Employee shall be
credited with Hours of Service (solely for the purpose of determining
whether he has incurred a break in service under Section 1.1(44))
equal to (I) the number of Hours of Service which otherwise would
normally have been credited to him but for such absence, or (II) is
not determinable, 8 Hours of Service per normal workday of such
absence, provided, however, that the total number of Hours of Service
credited to an Employee under this paragraph (d) by reason of any
pregnancy, birth or placement shall not exceed 501 Hours of Service.
(ii) Hours of Service credited to an Employee pursuant to
this paragraph (d) shall be treated as Hours of Service (A) only in
the eligibility computation period or (if applicable) reemployment
eligibility computation period specified in Section 1.1(44) in which
an absence from work described in this paragraph (d) begins, if the
Employee would be prevented from incurring a break in service (as such
term is defined in Section 1.1(44)) in such computation
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10
period solely because he is credited with Hours of Service during such
absence pursuant to subparagraph (i) of this paragraph (d), or (B) in
any other case, in the immediately following computation period.
(iii) Hours of Service shall not be credited to an Employee
under this paragraph (d) unless the Employee furnishes to the
Committee such timely information as the Committee may reasonably
require to establish that the Employee's absence from work is for a
reason specified in subparagraph (i) of this paragraph (d) and the
number of days for which there was such an absence.
(e) No hour shall be counted more than once or be counted as
more than one Hour of Service even though the Employee may receive
more than straight-time pay for it.
(f) Except as otherwise provided in paragraph (d) of this
Subsection (29), Hours of Service shall be credited to eligibility
computation periods and Plan Years in accordance with the provisions
of Department of Labor Regulations Section 2530.200b-2(c), which
provisions are hereby incorporated by reference.
(30) INVESTMENT FUND: Any of the three Funds provided for in
Section 6.1.
(31) MEMBER: An Eligible Employee who has become or
continues to be a Member of the Plan in accordance with the provisions of
Article II.
(32) MONEY MARKET FUND: One of the three Investment Funds
which shall be invested and reinvested principally in U.S.
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Government securities (including repurchase agreements, corporate obligations
and bank issues), bankers acceptances and certificates of deposit.
(33) NAMED FIDUCIARIES: The persons designated in or
pursuant to Section 12.2.
(34) PLAN: The Gorman-Rupp Individual Profit Sharing
Retirement Plan, the terms of which are herein set forth, as the same may be
amended, supplemented or restated from time to time.
(35) PLAN YEAR: A calendar year.
(36) PRIOR WRITTEN NOTICE: A notice in writing on a form or
forms furnished by and filed with the Committee, the designated period being
indicated by the context.
(37) SALARY REDUCTION AGREEMENT: An arrangement made under
the Plan pursuant to which an Employee agrees to reduce, or to forego an
increase in, his Credited Compensation and his Employer agrees to contribute to
the Trust the amount so reduced or foregone as a Before-Tax Contribution.
(38) SPOUSE: The person to whom a Member is legally married
at the specified time.
(39) TRUST: The trust created by the Trust Agreement.
(40) TRUST AGREEMENT: The Trust Agreement between the
Company and the Trustee dated as of January 1, 1984, creating the Trust
contemplated by the Plan, as the same may be amended, supplemented or restated
from time to time, or any trust agreement superseding the same.
(41) TRUST FUND: The trust estate held by the Trustee under
the provisions of the Plan and Trust Agreement.
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(42) TRUSTEE: Bank One Trust Company, NA or its successor or
successors in trust under the Trust Agreement.
(43) VALUATION DATE: The last business day of each calendar
quarter commencing on and after January 1, 1984.
(44) YEAR OF ELIGIBILITY SERVICE: (a) An Employee shall be
credited with a Year of Eligibility Service if he is credited with at least
1,000 Hours of Service (i) during his initial eligibility computation period,
namely, the 12-month period beginning on the first day on which he is credited
with an Hour of Service pursuant to Section 1.1(29)(a) or (ii) during any
12-month period commencing on an anniversary of such first day.
(b) An Employee who incurs a break in service (by not being
credited with more than 500 Hours of Service in a 12-month period described in
paragraph (a) of this Subsection) shall be credited with a Year of Eligibility
Service if he is credited with at least 1,000 Hours of Service (i) during his
reemployment eligibility computation period, namely, the 12-month period
beginning on the first day of which he is credited with an Hour of Service
pursuant to Section 1.1(29)(a) following such break in service or (ii) during
any 12-month period commencing on an anniversary of such first day.
1.2 CONSTRUCTION. (1) Unless the context otherwise
indicates, the masculine wherever used in the Plan shall include the feminine,
the singular shall include the plural and the plural shall include the
singular.
(2) Whenever the word "person" appears in the Plan, it shall refer to
both natural and legal persons.
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(3) Where headings have been supplied for portions of the Plan and of
the Trust Agreement (other than the headings to the Subsections in Section
1.1), they have been supplied for convenience only and are not to be taken as
limiting or extending the meaning of any of such portions of such documents.
(4) Except to the extent federal law controls, the Plan shall be
governed, construed and administered according to the laws of the State of
Ohio, and all persons accepting or claiming benefits under the Plan or Trust
Agreement shall be bound and deemed to consent to their provisions.
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ARTICLE II - ELIGIBILITY AND MEMBERSHIP
---------------------------------------
2.1 ELIGIBLE EMPLOYEE. An Employee shall become an Eligible
Employee under the Plan on any May 1 or November 1 after January 1, 1984 and
before December 31, 1988 and on any Enrollment Date thereafter on which he
meets the following requirements:
(a) he is a Covered Employee,
(b) he has been credited with two Years of Eligibility
Service (one Year of Eligibility Service on and after January 1,
1989), and
(c) in the case of an Employee of an Employer who adopts the
Plan pursuant to Section 10.1, on the first date on which he satisfies
the eligibility requirements of such Employer's instrument of
adoption.
2.2 COMMENCEMENT OF MEMBERSHIP. Each Eligible Employee shall
be notified of his eligibility for membership in the Plan by the Committee. An
Eligible Employee may become a Member in the Plan either by enrolling as a
Contributing Member pursuant to Section 2.3 or by having an Employer
Contribution allocated to his Account pursuant to Section 4.4.
2.3 CONTRIBUTING MEMBERSHIP. Any Eligible Employee (whether
or not he is a Member) may enroll as a Contributing Member in the Plan on any
Enrollment Date by filing with the Committee at least 30 days (or such shorter
period as the Committee shall determine) before such Date an enrollment form
prescribed by the Committee, which form shall include (a) the effective date on
which the Eligible Employee is to become a
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Contributing Member, (b) his agreement, commencing on or after such effective
date, to have his Employer make Before-Tax Contributions for him to the Trust,
(c) his authorization to his Employer to withhold from, or reduce, each payment
of Credited Compensation made to him on or after such effective date by the
amount of any designated Before-Tax Contributions and to pay the same to the
Trust, and (d) if there is no investment election in effect for him under
Section 6.4, his direction that the Before-Tax Contributions and Employer
Contributions made for him be invested in any one of the investment options
permitted by Section 6.4.
2.4 DURATION OF MEMBERSHIP. Once an Eligible Employee
becomes a Member, he shall remain a Member so long as he continues to be an
Employee whether or not he continues to be an Eligible Employee, provided,
however, that if a Member ceases to be an Eligible Employee, Before-Tax
Contributions may not be made for him pursuant to Section 3.1 and he may not
share in Employer Profit Sharing Contributions made pursuant to Article IV
until he again becomes an Eligible Employee and, in the case of Before-Tax
Contributions, he again enrolls as a Contributing Member pursuant to Sections
2.3 and 3.1. A Member who is on authorized leave of absence shall be deemed to
be an Eligible Employee only for the purpose of sharing in Employer Profit
Sharing Contributions during such leave if he otherwise meets the requirements
of Section 4.4. If a Member ceases to be an Employee and later again becomes
an Employee, he shall again become a Member on the
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day he so again becomes an Employee if he is then an Eligible Employee.
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ARTICLE III - BEFORE-TAX CONTRIBUTIONS
--------------------------------------
3.1 AMOUNT OF CONTRIBUTIONS. Upon enrollment pursuant to
Section 2.3, a Member shall agree pursuant to a Salary Reduction Agreement to
have his Employer make Before-Tax Contributions for him to the Trust of up to
6% (in 1% increments) of his unreduced Credited Compensation through equal
percentage reductions of each payment of Credited Compensation otherwise
payable to him. If a Member's Before-Tax Contributions must be reduced to
comply with the requirements of Section 5.4 or the requirements of applicable
law, his Before-Tax Contributions as so reduced shall be the maximum percentage
of his unreduced Credited Compensation permitted by such Section or law
notwithstanding the foregoing provisions of this Section requiring that
Before-Tax Contributions be made in 1% increments of his unreduced Credited
Compensation.
3.2 PAYMENTS TO TRUSTEE. Before-Tax Contributions made for a
Member pursuant to his Salary Reduction Agreement shall be transmitted by his
Employer to the Trustee not later than 30 days after the end of the month in
which such Contributions would otherwise have been payable to him as Credited
Compensation.
3.3 CHANGES IN CONTRIBUTIONS. The percentage of Before-Tax
Contributions designated by a Member pursuant to Section 3.1 shall continue in
effect, notwithstanding any changes in the Member's Credited Compensation. A
Member may, however, in accordance with the percentages permitted by Sections
3.1, change the percentage of his Before-Tax Contributions effective as of
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any Enrollment Date upon at least 30 days Prior Written Notice filed with the
Committee.
3.4 SUSPENSION AND RESUMPTION OF CONTRIBUTIONS. A Member may
suspend his Before-Tax Contributions effective as of any date upon at least 30
days Prior Written Notice filed with the Committee. A Member who has suspended
his Before-Tax Contributions may, upon at least 30 days Prior Written Notice
filed with the Committee, resume making such Before-Tax Contributions as of any
Enrollment Date if he is then an Eligible Employee and he has again enrolled
pursuant to Sections 2.3 and 3.1.
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ARTICLE IV - EMPLOYER CONTRIBUTIONS
-----------------------------------
4.1 AMOUNT OF EMPLOYER CONTRIBUTIONS. (1) (Employer Profit Sharing
Contributions) Subject to the provisions of the Plan and Trust Agreement and
to the extent it lawfully may, the Company shall contribute to the Trust on
account of each Plan Year commencing on or after January 1, 1984, and each
Employer which adopts the Plan pursuant to Article X shall contribute to the
Trust on account of each Plan Year, beginning with the Plan Year in which it
adopts the Plan or such other Plan Year as it may designate at the time of such
adoption, such portion of its net earnings for each applicable Plan Year,
and/or its accumulated earnings from prior Plan Years, as its Board of
Directors may fix by resolution adopted by such Board prior to the end of each
such Plan Year (the "Employer Profit Sharing Contributions"). Such a
resolution of the Board of Directors fixing the amount of the Employer Profit
Sharing Contribution to the Trust for any Plan Year may not be rescinded after
the close of such Year and the amount so fixed may not be decreased by action
of such Board after the close of such Year. Notwithstanding any other
provision of the Plan to the contrary, no Employer shall make any Employer
Profit Sharing Contributions on account of any Plan Year commencing on or after
January 1, 1989.
(2) (Employer Matching Contributions) Subject to the
provisions of the Plan and Trust Agreement and to the extent it lawfully may,
each Employer shall contribute to the Trust on account of each Plan Year
commencing on or after January 1, 1989,
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out of its net earnings for such Plan Year, and/or its accumulated earnings
from prior Plan Years, an amount (the "Employer Matching Contributions") equal
to 20% of the first 2% of Before-Tax Contributions and 10% of the next 4% of
Before-Tax Contributions made during such Plan Year pursuant to Section 3.1 for
its Employees who are entitled to an allocation of the Employer's Employer
Matching Contributions for such Year pursuant to Section 4.6.
(3) As used in this Section, the terms "net earnings" and
"accumulated earnings" shall mean the net earnings and accumulated earnings,
respectively, of each Employer as determined by the auditor of such Employer in
accordance with generally accepted accounting principles.
4.2 TIME FOR MAKING EMPLOYER CONTRIBUTIONS. (1) (Employer
Profit Sharing Contributions) Each Employer may make its Employer Profit
Sharing Contributions on account of any Plan Year, or partial payments of such
Contributions, at any time during such Year or within the time following the
close of such Year which is prescribed by law for the filing of the Employer's
federal income tax return for such Year (including extensions thereof).
(2) (Employer Matching Contributions) Each Employer shall
make its Employer Matching Contributions to the Trust not later than 30 days
after the end of each calendar quarter and shall be equal to 20% of the first
2% of Before-Tax Contributions and 10% of the next 4% of Before-Tax
Contributions made during
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21
such calendar quarter for Members who are Employees of such Employer.
4.3 RETURN OF EMPLOYER CONTRIBUTIONS. (1) Except as
provided in Subsection (2) of this Section or in Sections 4.6, 5.1(3), 5.2(5)
and 5.5(4), the Trust Fund shall never inure to the benefit of the Employers
and shall be held for the exclusive purposes of providing benefits to
Employees, Members and their Beneficiaries and defraying reasonable expenses of
administering the Plan.
(2) If an Employer Contribution to the Trust is made by an
Employer by a mistake of fact, the excess of the amount contributed over the
amount that would have been contributed had there not occurred a mistake of
fact shall be returned to such Employer if the Employer so directs within one
year after the payment of such contribution. If an Employer Contribution made
by an Employer which is conditioned upon the deductibility of the Contribution
under section 404 of the Code (or any successor thereto) is not fully
deductible under such Code Section (or any successor thereto), such
Contribution, to the extent the deduction therefor is disallowed, shall be
returned to the Employer if the Employer so directs within one year after the
disallowance of the deduction.
(3) Earnings attributable to Employer Contributions returned
to an Employer pursuant to this Section may not be returned, but losses
attributable thereto shall reduce the amount to be returned.
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4.4 ALLOCATION OF EMPLOYER PROFIT SHARING CONTRIBUTIONS. (1)
Each Member who receives Credited Compensation from an Employer with respect to
a Plan Year shall be entitled to share in any Employer Profit Sharing
Contributions made to the Trust on account of such Plan Year by such Employer
if he is both a Member and an Eligible Employee on the last day of such Plan
Year and he has been credited with at least 1,000 Hours of Service (determined
without regard to Section 1.1(29)(d)) during the twelve-month period ending on
October 31 of such Plan Year.
(2) Subject to the provisions of Articles V and XVI, the
share of each Member who, pursuant to Subsection (1) of this Section, is
entitled to share in any Employer Profit Sharing Contributions under the Plan
for a Plan Year shall be calculated by the Committee and shall be equal to the
product obtained by multiplying such Employer Profit Sharing Contributions for
such Year by a fraction, the numerator of which is the Member's Credited
Compensation (as defined in Subsection (3) of this Section) for such Plan Year,
and the denominator of which is the aggregate of the Credited Compensation (as
defined in Subsection (3) of this Section) for such Plan Year of all such
Members entitled to participate in such Employer Profit Sharing Contributions.
The amount of a Member's share of Employer Profit Sharing Contributions for a
Plan Year, less any portion thereof paid or to be paid to him in cash pursuant
to Section 4.5, shall be paid to the Trust Fund and be credited to his Account,
regardless of whether his employment with the Controlled Group
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terminates after the close of such Plan Year and before such share is paid to
the Trust Fund.
(3) A Member's Credited Compensation for any Plan Year for
the purposes of this Section shall be his annual rate of regular salary or
regular hourly wages in effect on November 1 of such Plan Year. In the case of
an Employee employed on a monthly salary basis on November 1, his annual rate
of regular salary on such day shall be determined by multiplying his monthly
rate of regular salary in effect on such November 1 by 12. In the case of an
Employee employed on an hourly wages basis on November 1, his annual rate of
regular hourly wages on such day shall be determined by multiplying the rate of
his regular hourly wages in effect on such November 1 by the product of 52
times the number of hours in his regular work week in which such November 1
falls or, if he does not have such a regular work week, by the product of 52
times 40.
4.5 CASH OPTION. Each Member who, under Section 4.4, may be
entitled to share in any Employer Profit Sharing Contributions to be made under
the Plan for a Plan Year may elect, by filing a written election with the
Committee before November 15 of such Plan Year, to receive in cash all or any
part (but not less than 10%) of his share of any Employer Profit Sharing
Contributions for such Year determined under Section 4.4. Such election shall
be on a form approved by the Committee and signed by the Member. A Member who
has elected for any Plan Year a cash option provided for in this Section may
not change or rescind his election of such option after November 14 of such
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Plan Year. Amounts to be paid in cash pursuant to this Section shall be paid
by the Employers to the Members entitled thereto.
4.6 ALLOCATION OF EMPLOYER MATCHING CONTRIBUTIONS. Each
Employer's Employer Matching Contributions made in respect of a calendar
quarter pursuant to Section 4.2(2) shall, subject to the provisions of this
Section and Articles V and XVI, be allocated and credited to the Account of
each Employee of the Employer for whom Before-Tax Contributions were made
during such calendar quarter, with each such Employee being credited with a
portion of such Employer's Employer Matching Contribution equal to 20% of the
first 2% of Before-Tax Contributions and 10% of the next 4% of Before-Tax
Contributions made for him pursuant to Section 3.1 during such calendar
quarter. Notwithstanding the foregoing provisions of this Section, Employer
Matching Contributions for a Plan Year (and any income allocable thereto) which
are allocated and credited to the Account of an Employee who is not both a
Member and Eligible Employee on the last day of such Plan Year or who is not
credited with at least 1,000 Hours of Service (determined without regard to
Section 1.1(29)(d)) during such Plan Year shall be returned to the Employer
which made such Employer Matching Contributions.
4.7 FUNDING POLICY. To the extent such has not already been
done, the Company shall determine, establish and carry out a funding policy and
method consistent with the objectives of the Plan and the requirements of Title
I of the Act.
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ARTICLE V - LIMITATIONS ON CONTRIBUTIONS
----------------------------------------
5.1 LIMITATION ON DEFERRALS. (1) Notwithstanding the
foregoing provisions of Articles III and IV, the sum of a Member's Before-Tax
Contributions and the Employer Profit Sharing Contributions allocated to his
Account pursuant to Section 4.4 shall not, for any taxable year of such Member
commencing on or after January 1, 1987, exceed $7,000 (as such amount may be
adjusted for increases in the cost of living pursuant to regulations prescribed
by the Secretary of the Treasury). For purposes of this Section a Member's
Before-Tax Contributions shall include (a) any employer contribution made under
any qualified cash or deferred arrangement as defined in section 401(k) of the
Code to the extent not includible in gross income for the taxable year under
section 402(a)(8) of the Code (determined without regard to section 402(i) of
the Code), (b) any employer contribution to the extent not includible in gross
income for the taxable year under section 402(h)(1)(B) of the Code (determined
without regard to section 402(i) of the Code) and (c) any employer contribution
to purchase an annuity contract under section 403(b) of the Code under a salary
reduction agreement within the meaning of section 3121(A)(5)(D) of the Code.
(2) In the event that the amount described in Subsection (1)
of this Section is exceeded for a Member for any taxable year of such Member
specified in such Subsection (1) (hereinafter called the "excess deferrals"),
such excess deferrals (and any income allocable thereto) shall be distributed
30
26
to the Member by April 1 following the close of the taxable year in which such
excess deferrals occurred if (and only if), by March 1 following the close of
such taxable year the Member (a) allocates the amount of such excess deferrals
among the plans under which the excess deferrals were made and (b) notifies the
Committee of the portion allocated to this Plan.
(3) In the event that a portion of a Member's Before-Tax
Contributions are distributed to him pursuant to Subsection (2) of this
Section, Employer Matching Contributions made with respect to such Before-Tax
Contributions (and any income allocable thereto) shall be returned to the
Employer which made such Employer Matching Contributions.
5.2 LIMITATION ON BEFORE-TAX AND EMPLOYER PROFIT SHARING
CONTRIBUTIONS. (1) Notwithstanding the foregoing provisions of Articles III
and IV, for any Plan Year commencing on or after January 1, 1987,
(a) the actual deferral percentage (as defined in Subsection
(2) of this Section) for the group of highly compensated Eligible
Employees (as defined in Subsection (3) of this Section) for such Plan
Year shall not exceed the actual deferral percentage for all other
Eligible Employees for such Plan Year multiplied by 1.25, or
(b) the excess of the actual deferral percentage for the
group of highly compensated Eligible Employees for such Plan Year over
the actual deferral percentage for all other Eligible Employees for
such Plan Year shall not exceed 2 percentage points, and the actual
deferral percentage for
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27
the group of highly compensated Eligible Employees for such Plan Year
shall not exceed the actual deferral percentage for all other Eligible
Employees for such Plan Year multiplied by 2.
If two or more plans which include cash or deferred arrangements are considered
as one plan for purposes of sections 401(a)(4) or 410(b) of the Code, such
arrangements included in such plans shall be treated as one arrangement for the
purposes of this Subsection; and if any highly compensated Eligible Employee is
a participant under two or more cash or deferred arrangements of the Controlled
Group, all such arrangements shall be treated as one cash or deferred
arrangement for purposes of determining the deferral percentage with respect to
such Eligible Employee.
(2) For the purposes of this Section, the actual deferral
percentage for a specified group of Eligible Employees for a Plan Year shall be
the average of the ratios (calculated separately for each Eligible Employee in
such group) of (a) the amount of Before-Tax Contributions and Employer Profit
Sharing Contributions actually paid to the Trust for each such Eligible
Employee for such Plan Year (including any "excess deferrals" described in
Section 5.1) to (b) the Eligible Employee's Credited Compensation for such Plan
Year.
(3) For the purposes of this Section, the term "highly
compensated Eligible Employee" for a particular Plan Year shall mean any
Eligible Employee (a) who, during the preceding Plan Year, (i) was at any time
a 5-percent owner (as such term is defined in section 416(i)(1) of the Code),
(ii) received
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28
compensation from the Controlled Group in excess of $75,000 (as such amount may
be adjusted for increases in the cost of living pursuant to regulations
prescribed by the Secretary of the Treasury), (iii) received compensation from
the Controlled Group in excess of $50,000 (as such amount may be adjusted for
increases in the cost of living pursuant to regulations prescribed by the
Secretary of the Treasury), and was in the top-paid group of Employees for such
Year, or (iv) was at any time an officer (limited to no more than 50 Employees
or, if lesser, the greater of 3 Employees or 10 percent of the Employees) and
received compensation greater than 150 percent of the amount in effect under
Section 5.5(1)(b) for such Year, or (b) who during the particular Plan Year
(but not the prior Plan Year) (I) was at any time a 5-percent owner (as such
term is defined in section 416(i)(1) of the Code) or (II) was included in the
foregoing clauses (ii), (iii) or (iv) and was in the group consisting of the
100 Employees paid the greatest compensation by the Controlled Group during
such Plan Year. For the purposes of this Subsection (3), the term
"compensation" shall mean the sum of an Employee's compensation under Section
5.5(3) and his Before-Tax Contributions, and the term "top-paid group of
Employees" shall mean that group of Employees of the Controlled Group
consisting of the top 20 percent of such Employees when ranked on the basis of
compensation paid by the Controlled Group during the Plan Year.
(4) In the event that excess contributions (as such term is
hereinafter defined) are made to the Trust for any Plan
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29
Year, then, prior to March 15 of the following Plan Year, such excess
contributions (and any income allocable thereto) shall be distributed to the
highly compensated Eligible Employees on the basis of the respective portions
of the excess contributions attributable to each such Eligible Employee. For
the purposes of this Subsection (4), the term "excess contributions" shall
mean, for any Plan Year, the excess of (a) the aggregate amount of Before-Tax
Contributions and Employer Profit Sharing Contributions actually paid to the
Trust on behalf of highly compensated Eligible Employees for such Plan Year
over (b) the maximum amount of such Before-Tax Contributions and Employer
Profit Sharing Contributions permitted for such Plan Year under Subsection (1)
of this Section, determined by reducing Before-Tax Contributions and Employer
Profit Sharing Contributions made on behalf of highly compensated Eligible
Employees in order of the actual deferral percentages (as defined in Subsection
2 of this Section) beginning with the highest of such percentages.
(5) In the event all or a portion of a Member's Before-Tax
Contributions are distributed to him pursuant to Subsection (4) of this
Section, Employer Matching Contributions made with respect to such Before-Tax
Contributions (and any income allocable thereto) shall be returned to the
Employer which made such Employer Matching Contributions.
5.3 LIMITATION ON MATCHING CONTRIBUTIONS. (1)
Notwithstanding the foregoing provisions of Article IV, for any Plan Year
commencing on or after January 1, 1987 the contribution percentage (as defined
in Subsection (2) of this Section) for the
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group of highly compensated Eligible Employees (as defined in Section 5.2(3))
for such Plan Year shall not exceed the greater of (a) 125 percent of the
contribution percentage for all other Eligible Employees or (b) the lesser of
200 percent of the contribution percentage for all other Eligible Employees or
the contribution percentage for all other Eligible Employees plus 2 percentage
points. If two or more plans of the Controlled Group to which employer
matching contributions are made are treated as one plan for purposes of section
410(b) of the Code, such plans shall be treated as one plan for purposes of
this Subsection (1); and if a highly compensated Eligible Employee participates
in two or more plans of the Controlled Group to which such contributions are
made, all such contributions shall be aggregated for purposes of this
Subsection (1).
(2) For the purposes of this Section, the contribution
percentage for a specified group of Eligible Employees for a Plan Year shall be
the average of the ratios (calculated separately for each Eligible Employee in
such group) of (a) the Employer Matching Contributions made under the Plan on
behalf of each such Eligible Employee for such Plan Year to (b) the Eligible
Employee's Credited Compensation for such Plan Year.
(3) In the event that excess aggregate contributions (as such
term is hereinafter defined) are made to the Trust for any Plan Year, then,
prior to March 15 of the following Plan Year, such excess contributions (and
any income allocable thereto) shall be distributed to the highly compensated
Eligible Employees on the basis of the respective portions of the excess
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31
contributions attributable to each such Eligible Employee. For the purposes of
this Subsection (3), the term "excess aggregate contributions" shall mean, for
any Plan Year, the excess of (a) the aggregate amount of the Employer Matching
Contributions actually paid to the Trust on behalf of highly compensated
Eligible Employees for such Plan Year over (b) the maximum amount of such
Employer Matching Contributions permitted for such Plan Year under Subsection
(1) of this Section, determined by reducing Employer Matching Contributions
made on behalf of highly compensated Eligible Employees in order of their
contribution percentages (as defined in Subsection 2 of this Section) beginning
with the highest of such percentages.
(4) The determination of excess aggregate contributions under
this Section shall be made after (a) first determining the excess deferrals
under Section 5.1 and (b) then determining the excess contributions under
Section 5.2.
5.4 MONITORING PROCEDURES. (1) In order to ensure that at
least one of the actual deferral percentages specified in Section 5.2(1) and at
least one of the contribution percentages specified in Section 5.3(1) is
satisfied for each applicable Plan Year, the Company shall monitor (or cause to
be monitored) the amount of Before-Tax Contributions and Employer Contributions
being made to the Plan for each Eligible Employee during each Plan Year. In
the event that the Company determines that neither of such actual deferral
percentages or neither of such contribution percentages will be satisfied for a
Plan Year, the Before-Tax Contributions and Employer Contributions made
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thereafter for each highly compensated Eligible Employee (as defined in Section
5.2(3)) shall be reduced (pursuant to non-discriminatory rules adopted by the
Company) to the extent necessary to decrease the actual deferral percentage
and/or the contribution percentage for highly compensated Eligible Employees
for such Plan Year to a level which satisfies either of the actual deferral
percentages and/or the contribution percentages.
(2) In order to ensure that excess deferrals (as such term is
defined in Section 5.1(2)) shall not be made to the Plan for any taxable year
for any Member, the Company shall monitor (or cause to be monitored) the amount
of Before-Tax Contributions and Employer Profit Sharing Contributions being
made, or to be made, to the Plan for each Member during each taxable year and
shall take such action (pursuant to non-discriminatory rules adopted by the
Company) to prevent Before Tax Contributions and Employer Profit Sharing
Contributions made, or to be made, for any Member under the Plan for any
taxable year from exceeding the maximum amount applicable under Section 5.1(1).
5.5 LIMITATION ON INDIVIDUAL ALLOCATIONS. (1)
Notwithstanding any other provision of the Plan, the maximum annual addition
(as defined in Subsection (2) of this Section) to a Member's account for any
Plan Year (which shall be the limitation year) commencing on or after January
1, 1987 shall in no event exceed the lesser of (a) 25% of the Member's
compensation for such Plan Year or (b) $30,000 (or, if greater, one-fourth of
the dollar limitation in effect under section 415(b)(1)(A) of the Code).
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(2) For the purposes of this Section, the term "annual
addition" means the sum for any Plan Year of:
(a) all contributions (including, without limitation,
Before-Tax Contributions made pursuant to Section 3.1) made by a
member of the Controlled Group which are allocated to the Member's
account pursuant to a defined contribution plan maintained by a member
of the Controlled Group,
(b) all employee contributions made by the Member to a
defined contribution plan maintained by a member of the Controlled
Group,
(c) all forfeitures allocated to the Member's account
pursuant to a defined contribution plan maintained by a member of the
Controlled Group, and
(d) any amount attributable to medical benefits allocated to
the Member's account established under section 419A(d)(1) of the Code
if the Member is or was a key-employee (as such term is defined in
section 416(i) of the Code) during such Plan Year or any preceding
Plan Year.
(3) For the purposes of this Section, the term "compensation"
shall include only those items specified in Internal Revenue Service
Regulations Section 1.415-2(d)(1)(i) and shall exclude all those items
specified in Internal Revenue Service Regulations Section
1.415-2(d)(2), which excluded items shall include, without limitation,
Before-Tax Contributions made pursuant to Section 3.1 and Employer Profit
Sharing Contributions allocated to a Member's Account under Section 4.4. For
any Plan Year commencing on or after January 1, 1989, a Member's compensation
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as used in this Section shall not exceed $200,000 as such amount may be
adjusted for increases in the cost of living pursuant to regulations prescribed
by the Secretary of the Treasury.
(4) If a Member's annual addition (as defined in Subsection
(2) of this Section) for a Plan Year would exceed the limitations of Subsection
(1) of this Section as a result of the allocation of forfeitures, a reasonable
error in estimating the Member's compensation (or other facts and circumstances
which the Commissioner of Internal Revenue finds justify application of the
following rules of this Subsection), Before-Tax Contributions (if any) made by
the Member for such Plan Year (together with any gains attributable thereto)
shall be returned to him to the extent necessary to effectuate the required
reduction in his annual addition. If the return of all such Before-Tax
Contributions is not sufficient to effectuate such reduction, Employer Profit
Sharing Contributions and, if necessary, Employer Matching Contributions
allocable to such Member's Account for such Year shall, to the extent necessary
to effectuate that such reduction, be held by the Trustee in a suspense account
and shall be used to reduce Employer Profit Sharing Contributions and/or
Employer Matching Contributions for the next Year (and succeeding Years, as
necessary) for such Member if such Member is covered by the Plan at the end of
any such Year; and if he is not covered by the Plan at the end of any such
Year, such Employer Contributions held by the Trustee in such suspense account
shall be allocated and reallocated to the accounts of other Members, except
that no such allocation or reallocation shall cause the limitations of
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Subsection (1) of this Section to be exceeded for any such other Member for
such Year. Investment gains and losses shall not be allocated to the suspense
account during the period such suspense account is required to be maintained
pursuant to this Subsection (4). In the event of termination of the Plan, any
then remaining balance of the suspense account, to the extent it may not then
be allocated to Employee-Members, shall revert to the Company.
5.6 LIMITATION ON TOTAL INDIVIDUAL BENEFITS. Except as
otherwise provided in section 415(e) of the Code, in any case in which an
individual is a participant in both a defined benefit plan an a defined
contribution plan maintained by the Controlled Group, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for any Plan
Year commencing on or after January 1, 1987 shall not exceed 1. For purposes
of the preceding sentence,
(a) the defined benefit plan fraction for any Plan Year is a
fraction, (i) the numerator of which is the projected annual benefit
of the participant under the plan (determined as of the close of the
Plan Year), and (ii) the denominator of which is the lesser of (A) the
product of 1.25 multiplied by the dollar limitation in effect under
section 415(b)(1)(A) of the Code for such Year or (B) the product of
1.4, multiplied by the amount which may be taken into account under
section 415(b)(1)(B) of the Code with respect to such participant
under the plan for such Year; and
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(b) the defined contribution plan fraction for any Plan Year
is a fraction (i) the numerator of which is the sum of the annual
additions to the participant's account as of the close of the Plan
Year and for all prior Plan Years, and (ii) the denominator of which
is the sum of the lesser of the following amounts determined for such
Plan Year and for each prior Plan Year of service with the Controlled
Group:
(A) the product of 1.25, multiplied by the dollar
limitation in effect under section 415(c)(1)(A) of the Code
for such Year, or
(B) the product of 1.4, multiplied by the amount
which may be taken into account under section 415(c)(1)(B) of
the Code with respect to such participant under such plan for
such Year.
5.7 DEFINITIONS FOR LIMITATIONS PROVISIONS. (1) For
purposes of applying the limitations set forth in Sections 5.5 and 5.6, all
qualified defined benefit plans (whether or not terminated) ever maintained by
the Controlled Group shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether or not terminated) ever
maintained by the Controlled Group shall be treated as one defined contribution
plan.
(2) As used in Sections 5.5, 5.6 and this Section 5.7, the
term "Controlled Group" shall be construed in the light of sections 414(b) and
414(c) of the Code, as modified by section 415(h) of the Code.
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5.8 LIMITATION ON EMPLOYER CONTRIBUTIONS. An Employer's
Employer Contributions to the Trust on account of any Plan Year shall in no
event exceed the amount that would be deductible for such Year for purposes of
federal taxes on income under applicable provisions of the Code and shall be
made on the condition that such Contributions are deductible under applicable
provisions of the Code. For the purposes of this Section, the term "Employer
Contributions" shall include Before-Tax Contributions made for an Employee of
an Employer.
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ARTICLE VI - INVESTMENT OF CONTRIBUTIONS
----------------------------------------
6.1 INVESTMENT FUNDS. The Trust Fund shall be divided into
three Investment Funds, namely, the Gorman-Rupp Stock Fund, the Money Market
Fund and the Common Equity Fund, and all Before-Tax Contributions and Employer
Contributions shall be invested therein as provided in Section 6.4. Subject to
applicable provisions of the Plan and Trust Agreement, the Trustee shall hold,
manage, administer, value, invest, reinvest, account for and otherwise deal
with each Investment Fund separately. The Trustee shall invest and reinvest
the principal and income of each such Fund and shall keep each such Fund
invested, without distinction between principal and income, as required under
the terms of the Plan and Trust Agreement. Dividends, interest and other
distributions received by the Trustee in respect of each Investment Fund shall
be reinvested in the same Fund. The determination of the Trustee as to whether
an investment is within the category of investments which may be purchased for
the Gorman-Rupp Stock Fund, the Money Market Fund or the Common Equity Fund
shall be conclusive. The Trustee in its sole discretion may keep such portion
of each Investment Fund in cash or cash equivalents pending the selection and
purchase of suitable investments under each such Fund or as the Trustee may
from time to time deem to be advisable to maintain sufficient liquidity to meet
the obligations of the Plan or for other reasons, and the Trustee shall not be
liable for interest on uninvested funds.
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6.2 ACCOUNT; SUB-ACCOUNT. The Trustee shall establish and
maintain an Account for each Member, which Account shall reflect, pursuant to
Sub-Accounts established and maintained thereunder, the amount, if any, of the
Member's (a) Before-Tax Contributions, (b) Employer Profit Sharing
Contributions and (c) Employer Matching Contributions. The Trustee shall also
maintain separate records which shall show (i) the portion of each such
Sub-Account invested in each Investment Fund and (ii) the amount of
contributions thereto, payments and withdrawals therefrom and the amount of
income, expenses, gains and losses attributable thereto. The interest of each
Member in the Trust Fund at any time shall consist of his Account balance (as
determined pursuant to Sections 7.1 and 7.2) as of the last preceding Valuation
Date plus credits and minus debits to such Account since that Date.
6.3 REPORTS. The Trustee shall cause reports to be made
quarterly to each Member and to the Beneficiary of each deceased Member as to
the value of his Account. In addition, the Trustee shall cause such a report
to be made to each Member who (a) requests such a report in writing (provided
that only one report shall be furnished a Member upon such a request in any
12-month period) or (b) terminates his employment with an Employer.
6.4 INVESTMENT OF CONTRIBUTIONS. (1) Each Member shall, by
written direction filed with the Committee, direct that all Before-Tax
Contributions and Employer Contributions made for him to the Trust Fund be
invested in such of the Investment Funds provided in Section 6.1 as the Member
shall elect, provided,
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however, that investment elections shall be made in multiples of 10% of such
Contributions. An investment election made by a Member shall remain in effect
and be applicable to all subsequent Before-Tax Contributions and Employer
Contributions made for him unless an investment change is made by him and
becomes effective pursuant to Subsection (2) of this Section. In the absence
of an effective investment election by a Member, all Before-Tax Contributions
and Employer Contributions made to the Trust Fund for such Member shall be
invested in the Money Market Fund.
(2) A Member may, as of any November 15 (any June 30 or
December 31 after January 1, 1989), upon at least 30 days Prior Written Notice
filed with the Committee, change his investment election to any other election
permitted by Subsection (1) of this Section with respect to all subsequent
Before-Tax Contributions and Employer Contributions made for him. In addition,
a Member may, as of any June 30 or December 31, elect to transfer all or a part
(in 10% increments) of the portion of his Account which has been invested in an
Investment Fund (based on the value of such Account on the Valuation Date
immediately preceding such June 30 or December 31) to any other Investment Fund
specified by him, provided that Prior Written Notice is filed with the
Committee on or before May 15 in the case of a June 30 election or on or before
November 15 in the case of a December 31 election.
6.5 DIRECTIONS TO TRUSTEE. The Committee shall give
appropriate and timely directions to the Trustee in order to permit the Trustee
to give effect to the investment elections and
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investment change elections made under Section 6.4 and to provide funds for
distributions and withdrawals pursuant to Article VIII and other provisions of
the Plan.
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ARTICLE VII - MAINTENANCE AND VALUATION
---------------------------------------
OF MEMBERS' ACCOUNTS
--------------------
7.1 VALUATION OF INVESTMENT FUNDS. (1) The Trustee shall,
as of the close of business on each Valuation Date, determine the value of each
Investment Fund. Each such valuation shall be made on the basis of the market
value (as determined by the Trustee) of the assets of each Fund, except that
property which the Trustee determines does not have a readily determinable
market value, and bonds and notes issued or guaranteed by the United States,
shall be valued at fair market value as determined by the Trustee in such
manner as it deems appropriate, and the Trustee's determination of such value
shall be conclusive on all interested persons for all purposes of the Plan. A
similar valuation shall be made at any other time upon the written direction of
the Committee to the Trustee or when the Trustee deems it appropriate to make
such a valuation.
(2) The Trustee shall determine, from the change in value of
each Investment Fund between the current Valuation Date and the then last
preceding Valuation Date, the net gain or loss of each such Fund during such
period resulting from expenses and realized and unrealized earnings, profits
and losses of the Fund during such period. For this purpose, income or other
earnings accrued but not collected during such period and expenses incurred but
not paid during such period shall not be counted, and the transfer of funds to
or from an Investment Fund pursuant to Section 6.4, Before-Tax Contributions
and Employer Contributions allocated to an Investment Fund, and payments,
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distributions and withdrawals from an Investment Fund to provide benefits under
the Plan for Members or Beneficiaries shall not be deemed to be earnings,
profits, expenses or losses of the Investment Fund.
(3) After each Valuation Date, the net gain or loss of each
Investment Fund determined pursuant to Subsections (1) and (2) of this Section
shall be allocated as of such Valuation Date to the Accounts of Members and
Beneficiaries of deceased Members in proportion to the amounts of such Accounts
invested in each Fund on such Valuation Date. In determining the amounts of
Accounts on a Valuation Date for the purposes of this Subsection (3),
Before-Tax Contributions and Employer Contributions to the Trust during or on
account of a Plan Year shall be deemed to have been made and allocated to the
Accounts of Members on the first day following the close of such Year.
However, the Committee may adopt rules to the effect that in determining the
allocation of the net gain or loss of each Investment Fund for any such period
there shall be counted, on a proportionate basis, distributions from or other
debits to the Accounts of Members and Beneficiaries since the beginning of such
period to the extent the amounts so distributed or debited were in such Fund
during such period. Such rules shall be uniform in their application to all
persons who are similarly situated.
7.2 PROCEDURES IN MAKING ALL AND CORRECTIONS. In computing
the allocation of Employer Contributions and of the net gain or loss of each
Investment Fund, computations shall be made to four decimal places unless the
Committee determines that a
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different number of decimal places should be used. In computing the amounts to
be allocated and credited or debited to the Accounts of Members or
Beneficiaries, computations shall be made to the nearest cent or, in the
discretion of the Committee, to the last full cent, ten cents or dollar, and
any resulting excess or deficiency shall either be treated as general earnings
or expenses of the Fund or be used to correct errors in determining or making
any debits or credits to the Accounts of Members or Beneficiaries, all as
determined by the Committee in its discretion. Errors in determining or making
any credits or debits to Accounts may be adjusted in such manner as the
Committee and the Trustee deem to be fair and feasible, including, but not
limited to, the recomputation of the credits or debits in question, the
addition of adjustments to the income or expenses of an Investment Fund or the
making of adjustments as provided in the preceding sentence. The Trustee need
not delay distributions because of the possibility of such recomputations and
adjustments, and, to the extent permitted by applicable law, neither the
Trustee, any Employer nor the Committee (either as a committee or as
individuals) shall be liable for any overpayment made by the Trustee in
reliance upon the amounts of the Accounts of Members or Beneficiaries as
reflected at the time of such distribution in the record of such Accounts
maintained by the Trustee as provided in Section 6.2.
7.3 REGISTRATION AND VOTING OF GORMAN-RUPP STOCK. All shares
of Gorman-Rupp Stock acquired by the Trustee shall be held in the possession of
the Trustee or in a depository until
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disposed of pursuant to provisions of the Plan. Such shares may be registered
in the name of the Trustee or its nominee. Before each annual or special
meeting of its stockholders, the Company shall cause to be sent to each Member
and Beneficiary of a deceased Member who has Gorman-Rupp Stock allocated to his
Account on the record date of such meeting a copy of the proxy solicitation
material therefor, together with a form requesting confidential instructions to
the Trustee on how to vote the shares of Gorman-Rupp Stock (including
fractional shares) allocated to such Member's Account. Upon receipt of such
instructions, the Trustee shall vote the shares as instructed. Instructions
received from individual Members and Beneficiaries by the Trustee shall be held
in the strictest confidence and shall not be divulged or released to any person
including officers or Employees of the Company. To the extent a Member or
Beneficiary does not direct the Trustee in whole or in part with respect to the
exercise of voting rights arising under Gorman-Rupp Stock allocated to his
Account, such voting rights shall not be exercised by the Trustee.
7.4 TENDER OR SALE OF GORMAN-RUPP STOCK. (1) Except as
otherwise expressly provided in the Plan or the Trust Agreement, the Trustee
shall not sell, alienate, encumber, pledge, transfer or otherwise dispose of,
or tender or withdraw, any Gorman-Rupp Stock held by it under the Plan. In the
event the Committee determines that a tender offer for shares of Gorman-Rupp
Stock has commenced, then, notwithstanding any other
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provision of the Plan or Trust Agreement, the following provisions of this
Section shall become applicable.
(2) In the event it is determined that an offer described in
Subsection (1) of this Section has commenced, the Trustee shall cause to be
sent to each Member and Beneficiary of a deceased Member who, on the effective
date of such offer or at any time during the effective period of such offer,
has Gorman-Rupp Stock allocated to his Account all pertinent information in
respect of such offer, including all the terms and conditions thereof, together
with a form prescribed by the Trustee pursuant to which each such Member and
Beneficiary may direct the Trustee to tender or sell pursuant to such offer all
or part of the shares of Gorman-Rupp Stock so allocated to his Account. The
Trustee shall tender or sell only those shares of Gorman-Rupp Stock as to which
valid and timely directions to tender or sell are received and not validly and
timely revoked, and, subject to the provisions of Subsection (6) of this
Section, all other shares of Gorman-Rupp Stock held under the Plan shall
continue to be held by the Trustee. If in the course of an offer described in
Subsection (1) of this Section there shall arise any issue on which Members or
Beneficiaries of deceased Members who have directed the tender or sale of
shares of Gorman-Rupp Stock are required or have an opportunity to alter their
circumstances (including but not limited to an opportunity to withdraw shares
of Gorman-Rupp Stock previously tendered and an opportunity to tender shares of
Gorman-Rupp Stock in a competing offer), the Trustee shall, in accordance with
the foregoing provisions of
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this Subsection (2) and to the extent reasonably practicable, solicit the
directions of such Members and Beneficiaries with respect to each such issue
and act in response to such directions.
(3) To the extent that an offer described in Subsection (1)
of this Section is for cash, proceeds received by the Trustee from the tender
or sale of any shares of Gorman-Rupp Stock pursuant to such offer shall be held
by the Trustee in a Government Bond Fund which shall be established by the
Trustee upon the occurrence of any such offer. To the extent that an offer
described in Subsection (1) of this Section is for property other than cash,
property received by the Trustee from the tender or sale of any shares of
Gorman-Rupp Stock pursuant to such offer shall be held by the Trustee in a
General Investment Fund which shall be established by the Trustee upon the
occurrence of any such offer. The Trustee shall hold, manage, administer,
value, invest, reinvest, account for and otherwise deal with each such Fund
separately. The Trustee shall invest and reinvest the principal and income of
the Government Bond Fund and shall keep such Fund invested, without distinction
between principal and income, in such direct obligations guaranteed as to the
payment of interest and principal by the United States Government or agencies
thereof as the Trustee in its discretion may elect. The Trustee shall invest
and reinvest the principal and income of the General Investment Fund and shall
keep such Fund invested, without distinction between principal and income, in
the property received pursuant to an offer described in Subsection (1) of this
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Section for property other than cash. Notwithstanding the foregoing provisions
of this Subsection, the Trustee in its discretion may keep such portion of the
Government Bond Fund or the General Investment Fund in cash as the Trustee may
from time to time deem to be advisable and shall not be liable for interest on
uninvested funds.
(4) In the event of an offer described in Subsection (1) of
this Section, the Trustee, in its discretion but subject to the provisions of
Subsection (6) of this Section, shall invest Before-Tax Contributions and
Employer Contributions which, pursuant to Section 6.4, have been directed for
investment in the Gorman-Rupp Stock Fund and which are in its possession but
not invested on the effective date of such offer, or which are transferred to
it on or after the effective date of such offer, in Gorman-Rupp Stock (as
provided in Section 6.1) or in the Government Bond Fund or the General
Investment Fund established by the Trustee upon the occurrence of such offer as
provided in Subsection (3) of this Section. Notwithstanding the immediately
preceding sentence, upon not less than fourteen (14) days' Prior Written Notice
to the Committee, effective as of any Valuation Date, a Member may direct that
all or part of his share of Before-Tax Contributions and Employer Contributions
which, pursuant to Section 6.4, have been directed for investment in the
Gorman-Rupp Stock Fund and which are in the possession of the Trustee but not
invested on such Valuation Date, or which are transferred to the Trustee on or
after such Valuation Date, be invested in Gorman-Rupp Stock and if, as of such
Valuation Date
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and thereafter, shares of Gorman-Rupp Stock are available for purchase, the
Trustee, in accordance with such direction but subject to the provisions of
Subsection (6) of this Section, shall purchase shares of Gorman-Rupp Stock (as
provided in Section 6.1) and shall allocate such shares to the Account of such
Member.
(5)(a) The Trustee shall, as of the close of business on each
Valuation Date, determine the value of the Government Bond Fund and the General
Investment Fund. Each such valuation shall be made on the basis of the market
value (as determined by the Trustee) of the assets of each Fund, except that
property which the Trustee determines does not have a readily determinable
market value shall be valued at fair market value as determined by the Trustee
in such manner as it deems appropriate, and the Trustee's determination of such
value shall be conclusive on all interested persons for all purposes of the
Plan. A similar valuation shall be made at any other time upon the written
direction of the Committee to the Trustee or when the Trustee deems it
appropriate to make such a valuation.
(b) The Trustee shall determine, from the changes in value of
the Government Bond Fund and the General Investment Fund thus determined
between Valuation Dates, the net gain or loss of each Fund resulting from
expenses and realized and unrealized earnings, profits and losses of the Fund
between such dates. For this purpose, income or other earnings accrued but not
collected during such period shall not be counted, and Before-Tax
Contributions, Employer Contributions and payments from the Trust
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to provide benefits under the Plan for Members and their Beneficiaries, shall
not be deemed to be earnings, profits, expenses or losses of the Fund.
(c) After each Valuation Date, said net gain or loss of the
Government Bond Fund and the General Investment Fund shall be allocated and
credited as of such Valuation Date to the Accounts of Members and Beneficiaries
of deceased Members in proportion to the amounts of such Accounts invested in
each Fund on such Valuation Date. For the purposes of the preceding sentence,
Before-Tax Contributions and Employer Contributions to the Trust during or on
account of a Plan Year shall be deemed to have been made and allocated to the
Accounts of Members on the first day following the close of such Year.
(6) Notwithstanding any other provision of this Section, as
promptly as is practicable after the expiration of an offer described in
Subsection (1) of this Section, the Trustee shall invest in "employer
securities", as such term is defined in section 409(l) of the Code, (a) all of
the Trust Fund which is then not invested in such employer securities,
excluding Before-Tax Contributions and Employer Contributions (including any
net gain or loss thereon) which, pursuant to Section 6.4 have been directed for
investment in the Money Market Fund or the Common Equity Fund and (b) all
Before-Tax Contributions and Employer Contributions in cash which are then in
the Trustee's possession but not invested or which are thereafter transferred
to the Trustee, excluding all such Contributions (including any net gain or
loss thereon) which, pursuant to Section 6.4 have
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been directed for investment in the Money Market Fund or the Common Equity
Fund. Unless the context clearly indicates otherwise, the provisions of the
Plan applicable to Gorman-Rupp Stock shall be applicable to such employer
securities.
(7) Any decision by a Member or Beneficiary to tender (or not
tender) or to sell (or not sell) pursuant to Subsection (2) of this Section and
any direction made by a Member pursuant to Subsection (4) of this Section shall
constitute an exercise of control over the assets in his Account by such Member
or Beneficiary within the meaning of section 404(c) of the Act, and each Member
or Beneficiary who so exercises such control shall by such exercise release and
agree, on his behalf and on the behalf of his heirs and beneficiaries, to
indemnify and hold harmless the Trustee, the Employers and the Committee from
and against any claim, demand, loss, liability, cost or expense (including
reasonable attorney's fees) caused by or arising out of such exercise,
including without limitation any diminution in value or losses incurred from
such exercise.
(8) That portion of the interest of a Member or a Beneficiary
of a deceased Member in the Trust Fund which is invested in the Government Bond
Fund or the General Investment Fund and which is distributed pursuant to
Article VIII shall be valued as provided in Sections 8.3 or 8.4, whichever is
applicable, and paid to such Member or Beneficiary in cash.
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ARTICLE VIII - VESTING, DISTRIBUTIONS AND WITHDRAWALS
-----------------------------------------------------
8.1 NONFORFEITABLE MEMBER INTERESTS. Each Member's interest
in the Trust Fund shall be nonforfeitable at all times and shall be distributed
and withdrawn only as provided in the following Sections of this Article.
8.2 DISTRIBUTIONS ON DEATH WHILE AN EMPLOYEE. If a Member
dies while in the employ of a Controlled Group Member, his entire Account,
valued as of the Valuation Date coinciding with or next following the date of
his death, shall be paid to the Member's Beneficiary in a lump sum in cash
within 60 days after such Valuation Date.
8.3 DISTRIBUTIONS ON OTHER TERMINATION OF EMPLOYMENT. If a
Member's employment with the Controlled Group terminates other than by reason
of his death, his entire Account, valued as of the Valuation Date coinciding
with or next following the date his employment so terminates, shall be paid to
him in a lump sum in cash within 60 days after such Valuation Date.
Notwithstanding the foregoing provisions of this Section, if the value of a
Member's Account exceeds $3,500, distribution of such Account shall not be made
prior to the Member's attainment of age 62 (which shall be the normal
retirement date for the purposes hereof) without his written consent.
8.4 DISTRIBUTIONS ON DEATH AFTER TERMINATION OF EMPLOYMENT.
If a Member dies after his employment with the Controlled Group terminates and
before his Account has been paid to him, his Account shall be paid to his
Beneficiary as provided in Section 8.3.
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8.5 TIME OF DISTRIBUTION. Subject to the provisions of
Section 8.6, the distribution of a Member's Account shall occur as provided in
the preceding Sections of this Article, but in no event later than 60 days
after the close of the Plan Year in which the latest of the following events
occur: (a) the date on which the Member attains age 62, (b) the 10th
anniversary of the year in which the Member commenced membership in the Plan,
or (c) the date of the Member's termination of employment with the Controlled
Group; provided, however, that (i) a distribution to a Member pursuant to
Section 8.3 shall be made not later than April 1 of the calendar year following
the calendar year in which he attains age 70-1/2 and (ii) a distribution to a
Beneficiary pursuant to Sections 8.2 and 8.4 shall be made within five years
after the Member's death.
8.6 WITHDRAWAL OF CONTRIBUTIONS. (1) Upon at least 30 days
Prior Written Notice to the Committee, effective as of any Valuation Date, a
Member who has established the existence of a Hardship may withdraw in cash
such part of his Before-Tax Contributions Sub-Account (except any earnings
allocated thereto) as is necessary to alleviate such Hardship.
(2) Upon at least 30 days Prior Written Notice to the
Committee, effective as of any Valuation Date, a Member who has withdrawn his
entire Before-Tax Contributions Sub-Account (except any earnings allocated
thereto) and who has established the existence of a Hardship may withdraw in
cash such part of his Employer Profit Sharing Contributions Sub-Account as is
necessary to alleviate such Hardship.
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(3) Upon at least 30 days Prior Written Notice to the
Committee, effective as of any Valuation Date, a Member who has withdrawn his
entire Before-Tax Contributions Sub-Account (except any earnings allocated
thereto) and his entire Employer Profit Sharing Contributions Sub-Account and
who has established the existence of a Hardship may withdraw in cash such part
of his Employer Matching Contributions Sub-Account as is necessary to alleviate
such Hardship.
8.7 ORDER OF DISTRIBUTIONS AND WITHDRAWALS. In the event a
distribution or withdrawal is to be made from the Trust Fund pursuant to any
provision of the Plan or Trust Agreement and it is necessary to liquidate part
(but not all) of the Member's Account which is invested in more than one
Investment Fund to effect such distribution or withdrawal, such Member shall
designate (on a form approved by the Trustee, signed by him and filed with the
Committee) which Investment Fund or Funds in which his Account is invested
shall be liquidated (to the extent of his interest therein) in order to make
such distribution or withdrawal. If the Member is not able or willing to make
the decision contemplated by the first sentence of this Section, such decision
shall be made by the Trustee.
8.8 FACILITY OF PAYMENT. In the event the Committee finds
that any Member or Beneficiary to whom a benefit is payable hereunder is unable
to care for his affairs because of physical, mental, or legal incompetence, the
Committee, in its discretion, may cause any payment due to him hereunder, for
which prior claim has been made by a duly qualified guardian or other legal
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representative, to be paid to the individual or institution deemed by the
Committee to be maintaining or responsible for the maintenance of such Member
or Beneficiary. Any such payment shall be deemed a payment for the account of
such Member or Beneficiary and shall constitute a complete discharge of any
liability therefor under the Plan.
8.9 DUPLICATION OF BENEFITS. To the extent permitted by law
and except as otherwise provided in the Plan, benefits under this Plan shall be
in addition to benefits provided under any other employee pension benefit plan
(as such term is defined in section 3(2) of the Act) which is now or hereafter
adopted or maintained by any member of the Controlled Group.
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ARTICLE IX - ADMINISTRATION OF THE TRUST FUND
---------------------------------------------
9.1 APPOINTMENT OF TRUSTEE. The Company has appointed Bank
One Trust Company, NA to act as Trustee under the Plan and has executed the
Trust Agreement with such Trustee. The Company may, without the consent of any
Member, other Employer or other person, execute amendments to such Trust
Agreement, execute such further agreements as it in its sole discretion may
deem necessary or desirable to carry out the Plan, or at any time, upon 60 days
written notice, remove the Trustee and appoint a successor.
9.2 DUTIES OF TRUSTEE. The Trustee shall invest Before-Tax
Contributions and Employer Contributions paid to it and earnings thereon in
accordance with the Plan and Trust Agreement. The Trustee shall also establish
and maintain separate Accounts for each Member in accordance with Articles IV,
VI and VII. The Trustee in its relation to the Plan shall be entitled to all
of the rights, privileges, immunities and benefits conferred upon it by the
Plan or Trust Agreement and shall be subject to all of the duties imposed upon
it by the Plan and Trust Agreement. The Trustee Agreement is hereby
incorporated in the Plan by reference, and each Employer, by adopting the Plan,
approves the Trust Agreement and authorizes the Company to execute any
amendment or supplement thereto in its behalf.
9.3 THE TRUST FUND. The Trust Fund shall be held by the
Trustee for the exclusive benefit of the Members and their Beneficiaries and
shall be invested by the Trustee upon such
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terms and in such property as is provided in the Plan and in the Trust
Agreement. The Trustee shall from time to time make payments and distributions
from the Trust Fund as provided in the Plan.
9.4 NO GUARANTEE AGAINST LOSS. Neither the Trustee nor any
Employer nor the Committee nor any member of the Committee in any manner
guarantees the Trust Fund or any part thereof against loss or depreciation.
All persons having any interest in the Trust Fund shall look solely to the
Trust Fund for payment with respect to such interest.
9.5 PAYMENT OF BENEFITS. All payments of benefits provided
for by the Plan shall be made solely out of the Trust Fund and in accordance
with instructions given to the Trustee by the Committee pursuant to the terms
of the Plan, and neither any Employer nor the Trustee nor the Committee nor any
member of the Committee shall be otherwise liable for any benefits payable
under the Plan.
9.6 COMPENSATION AND EXPENSES. The Trustee shall be entitled
to receive such reasonable compensation for its services as may be agreed upon
by it and the Company. Such compensation and the expenses of the Trustee and
other expenses necessary for the proper administration of the Plan and Trust,
including without limitation, costs incident to the purchase and sale of
securities, such as brokerage fees, commissions and transfer taxes, shall be
paid by the Trustee from the Trust Fund, except that the Employers may, in
their sole discretion, pay all or any part of such compensation and expenses.
Taxes, if any, on any
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property held by the Trustee shall be paid out of the Trust Fund and taxes, if
any, other than transfer taxes, on distributions to a Member or Beneficiary of
a Member shall be paid by the Member or the Beneficiary, respectively.
9.7 NO DIVERSION OF TRUST FUND. Except as provided in
Sections 4.3(2), 4.6, 5.1(3), 5.2(5), 5.5(4) and 9.6, it shall be and is hereby
made impossible, at any time prior to the satisfaction of all liabilities with
respect to Employees and their Beneficiaries under the Plan, for any part of
the corpus or income of the Trust Fund to be (within the taxable year or
thereafter) used for, or diverted to, purposes other than the exclusive benefit
of Employees or their Beneficiaries.
9.8 TRANSFER TO THIS PLAN FROM OTHER PLANS. (1) The Trustee
shall, at the direction of the Committee, receive and thereafter hold and
administer as a part of the Trust Fund for a Member all cash and other property
(a) which may be transferred to the Trustee from a trust held under another
plan in which the Member was a participant, which meets the requirements of
sections 401(a) and 501(a) of the Code and which for the purposes of this
clause (a) but not the following clause (b), is not subject to the survivor
annuity requirements of section 401(a)(11) of the Code (each such trust and
plan being hereinafter in this Section called a "Comparable Plan"), or (b)
which shall have been distributed to the Member (other than a Member who is a
5-percent owner (as such term is defined in section 416(i)(1)(B)(i) of the
Code) at any time during the five plan years preceding the plan year in which
the distribution is
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made) from a Comparable Plan in a distribution which constitutes a "qualified
total distribution" as such term is defined in section 402(a)(5)(E)(i) of the
Code and which cash and other property, or any part thereof (other than amounts
contributed by him to such Comparable Plan as employee contributions), is
transferred by him to the Trustee on or before the 60th day after which he
received such cash and other property and which transfer otherwise meets the
requirements of sections 402(a)(5) or 402(a)(6) of the Code. Subject to other
provisions of the Plan and Trust Agreement, the Trustee shall have authority to
sell or otherwise convert to cash any property transferred to it pursuant to
this Section.
(2) Cash or other property transferred to the Trustee
pursuant to Subsection (1) of this Section shall be allocated to such
Investment Fund(s) (including a new Investment Fund or Investment Funds
established and maintained by the Trustee) as the Trustee shall determine.
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ARTICLE X - ADOPTION OF THE PLAN BY OTHER EMPLOYERS
---------------------------------------------------
10.1 ADOPTION. Any member of the Controlled Group may, with
the consent of the Company, adopt the Plan and thereby become an Employer
hereunder by executing an instrument evidencing such adoption on the order of
its Board of Directors and filing a copy thereof with the Company and the
Trustee, and such instrument shall (subject to such terms and conditions as the
Company may require or approve) become incorporated in the Plan by reference.
10.2 WITHDRAWAL OF EMPLOYER. Any Employer (other than the
Company) which adopts the Plan may elect separately to withdraw from the Plan,
and such withdrawal shall constitute a termination of the Plan as to it, but
amendments to the Plan (except those made pursuant to Sections 2.1(c), 10.1 and
10.3) may be made only by the Company. Any such withdrawal shall be expressed
in an instrument executed by the withdrawing Employer on the order of its Board
of Directors and filed with the Company, the Committee and the Trustee. In the
event of such a withdrawal of an Employer or in the event the Plan is
terminated as to an Employer (but not all the Employers) pursuant to Section
14.1, such Employer shall cease to be an Employer and, as soon as practicable
after such withdrawal or termination, the Trustee shall make distribution (if
such distribution is permitted by applicable law) pursuant to Section 8.3 to
Members affected by such withdrawal or termination as if each such Member's
employment with the Controlled Group had terminated.
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10.3 WITHDRAWAL OF EMPLOYEE GROUP. Any Employer may elect to
withdraw from the Plan any designated group of its Employees while continuing
to include another group or other groups of its Employees within the Plan, and
any such withdrawal shall constitute a termination of the Plan as to the
Employees to which it is applicable. Any such withdrawal of a designated group
of Employees shall be expressed in an instrument executed by the Employer on
the order of its Board of Directors and filed with the Company (if the Employer
making such withdrawal is not the Company), the Committee and the Trustee. In
the event of such a withdrawal by an Employer or in the event the Plan is
terminated by the Company as to a group of Employees of another Employer
pursuant to Section 14.1, the Trustee shall, as soon as practicable after such
withdrawal or termination, make distribution (if such distribution is permitted
by applicable law) pursuant to Section 8.3 to Members affected by such
withdrawal or termination as if each such Member's employment with the
Controlled Group had terminated.
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ARTICLE XI - THE COMMITTEE
--------------------------
11.1 APPOINTMENT OF COMMITTEE. The President of the Company
shall appoint a Committee of at least three persons (who may or may not be
Members) to administer the Plan, shall fill vacancies whenever necessary to
maintain three members serving on the Committee, shall designate the Chairman
of the Committee and from time to time may remove members from the Committee
and add members thereto. The Company shall certify the number and names of the
members of the Committee to the Trustee, which may rely upon such certification
until it receives written notice from the Company as to a change in the
membership of the Committee.
11.2 FORMALITIES OF COMMITTEE ACTION. The Committee shall
hold its meetings at such times and places as it may determine. A majority of
its members shall constitute a quorum and all decisions and determinations of
the Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by a majority of the members of the
Committee shall be as fully effective as if it had been made by a majority vote
at the meeting duly called and held. The Committee may authorize any one
member to sign documents on behalf of the Committee in order to give evidence
with respect to action taken by the Committee. The Committee may appoint a
Secretary who need not be a member of the Committee and who shall keep minutes
of its meetings. The Committee may make such rules and regulations for the
conduct of its business as it deems advisable.
11.3 AUTHORITY. The Committee may adopt rules and
regulations for carrying out and administering the Plan and shall
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have full power and authority to construe, interpret and administer the Plan.
The Committee shall determine the rights and status of Members and other
persons under the Plan, decide disputes arising under the Plan and make any
determinations and findings with respect to the benefits payable thereunder and
the persons entitled thereto as may be required for purposes of the Plan. Such
determinations and findings shall be final and conclusive, to the extent
permitted by law and subject to the provisions of Article XIII, as to all
persons for all purposes of the Plan. The Committee shall instruct the Trustee
as to the benefits to be paid from the Trust Fund and shall furnish the Trustee
with any further information reasonably required by it for the purpose of the
distribution of such benefits.
11.4 ASSISTANCE. The Committee may employ or retain such
clerical, legal, accounting, investment or other assistance as it deems
necessary or advisable for the proper administration of the Plan and Trust
Fund.
11.5 UNIFORM ADMINISTRATION OF PLAN. All action taken by the
Committee under the Plan shall treat all persons similarly situated in a
uniform and consistent manner.
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ARTICLE XII - ADMINISTRATION OF THE PLAN
----------------------------------------
AND FIDUCIARY RESPONSIBILITY
----------------------------
12.1 RESPONSIBILITY FOR ADMINISTRATION. Except to the extent
that particular responsibilities are assigned to other Fiduciaries pursuant to
the Trust Agreement or some other Section of the Plan, the Company (as the Plan
Administrator) shall be responsible for the administration of the Plan. Each
other Fiduciary shall have such powers, duties, responsibilities and
authorities as shall be conferred upon him or delegated to him pursuant to
provisions of the Plan or Trust Agreement. Any person may serve in more than
one fiduciary capacity with respect to the Plan or Trust Fund if, pursuant to
the Plan and/or Trust Agreement, he is assigned or delegated any multiple
fiduciary capacities.
12.2 NAMED FIDUCIARIES. For purposes of the Plan, the Named
Fiduciaries shall be the Company, the Committee and the Trustee. The Company
may, by an instrument authorized and signed by the President of the Company,
designate any other person or persons as a Named Fiduciary or Named Fiduciaries
to perform functions specified in such instrument (or in a delegation pursuant
to Section 12.3) which relate to the administration of the Plan or the Trust
Fund, provided such designee accepts such designation. Such a designation may
be terminated at any time by written notice from the President of the Company
to the designee or by written notice from the designee to such President.
12.3 DELEGATION OF FIDUCIARY RESPONSIBILITIES. (1) The
Company may delegate to any person or persons any one or more
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powers, functions, duties and/or responsibilities with respect to the Plan or
the Trust Fund, other than trustee responsibilities (as defined in section
405(c) of the Act) assigned to the Trustee by the Trust Agreement or some other
Section of the Plan. However, no such power, function, duty or responsibility
which is assigned to a Fiduciary (other than the Company) pursuant to the Trust
Agreement or some other Section of the Plan shall be so delegated without the
written consent of such Fiduciary.
(2) Any delegation pursuant to Subsection (1) of this Section
(a) shall be signed by the President of the Company, be delivered to and
accepted in writing by the delegatee, (b) shall contain such provisions and
conditions relating to such delegation as such President deems appropriate, (c)
shall specify the powers, functions, duties and/or responsibilities therein
delegated, (d) may be amended from time to time by written agreement signed by
the President of the Company and by the delegatee, and (e) may be revoked (in
whole or in part) at any time by written notice (i) from the President of the
Company delivered to the delegatee or (ii) from the delegatee delivered to the
President of the Company.
12.4 IMMUNITIES. Except as otherwise provided in Section
12.5 or by applicable law, (a) no Fiduciary shall have the obligation to
discharge any duty, function or responsibility which is specifically assigned
to another Fiduciary or Fiduciaries by the terms of the Plan or the Trust
Agreement or is delegated exclusively to another Fiduciary or Fiduciaries
pursuant to procedures for such delegation provided for in the
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Plan or in the Trust Agreement; (b) no Fiduciary shall be liable for any action
taken or not taken with respect to the Plan or Trust Fund except for his own
negligence, bad faith or willful misconduct; (c) no Fiduciary shall be
personally liable upon any contract or other instrument made or executed by him
or in his behalf in the administration of the Plan or Trust Fund; (d) no
Fiduciary shall be liable for the neglect, omission or wrongdoing of another
Fiduciary; (e) each Employer and each officer or director thereof, Employees,
the Committee and each member thereof, and any other person(s) to whom the
Company delegates (or the Plan or the Trust Agreement assigns) any duty with
respect to the Plan or Trust Fund, may rely and shall be fully protected in
acting in good faith (i) upon the advice of counsel (who may be of counsel for
an Employer or another Fiduciary), (ii) upon the records of a member of the
Controlled Group, (iii) upon the opinion, certificate, valuation, report,
recommendation or determination (A) of the auditor selected by an Employer or
of the Trustee or (B) of any person employed by the Trustee to render advice
with regard to any responsibility the Trustee has under the Plan or Trust
Agreement and (iv) upon any certificate, statement or other representation made
by or any information furnished by an Employee, a Member, a Beneficiary or the
Trustee and (f) the Committee and its members shall not be required to make
inquiry into the propriety of any action by an Employer or the Trustee.
12.5 LIMITATION ON EXCULPATORY PROVISIONS. Notwithstanding
any other provision of the Plan or Trust
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Agreement, no provision of the Plan or Trust Agreement shall be construed to
relieve or have the effect of relieving any Fiduciary from any responsibility
or liability for any obligation, responsibility or duty imposed on such
Fiduciary by Part 4 of Title I of the Act.
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ARTICLE XIII - CLAIMS PROCEDURES
--------------------------------
13.1 METHOD OF FILING CLAIM. Any Member or Beneficiary who
thinks that he is entitled to have received a distribution under the Plan or
the Trust Agreement which he has not received or that the amounts credited to
his Account are inaccurate may file with any member of the Committee a written
claim specifying the basis for his claim and the facts upon which he relies in
making such claim. Such claim must be signed by the claimant or his authorized
representative and shall be deemed filed when delivered to such a Committee
member.
13.2 NOTIFICATION BY COMMITTEE. Unless such claim is allowed
in full by the Committee, the Committee shall (within 90 days after such was
filed, plus an additional 90 days if required for processing and if notice of
the additional 90-day extension of time indicating the specific circumstances
requiring the extension and the day by which a decision shall be rendered is
given to the claimant within the first 90-day period) cause written notice to
be mailed to the claimant of the total or partial denial of such claim. Such
notice shall be written in a manner calculated to be understood by the claimant
and shall state the specific reason(s) for the denial of the claim, specific
reference(s) to pertinent provisions of the Plan and/or Trust Agreement on
which the denial of the claim was based, a description of any additional
material or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary, and appropriate
information as to the steps to be taken if the claimant wishes to
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submit his claim for review. If a claimant does not receive any notice from
the Committee within 90 days after his claim is filed with the Committee, his
claim shall be deemed to have been denied.
13.3 REVIEW PROCEDURE. Within six months after the denial of
his claim, the claimant or his duly authorized representative may appeal such
denial by filing with any officer of the Company a written request for a review
of said claim. If such an appeal is so filed within such six months, a Named
Fiduciary designated by the Company, shall conduct a full and fair review of
such claim and mail or deliver to the claimant a written decision within 60
days after such appeal was filed unless special circumstances require an
extension of time, in which case such decision shall be rendered not later than
120 days after such appeal was filed. If an extension of time for review is
required, written notice of the extension shall be furnished to the claimant
prior to the commencement of the extension. Such decision shall be written in
a manner calculated to be understood by the claimant, shall state the specific
reason(s) for the decision, shall make specific reference(s) to pertinent
provisions of the Plan and/or Trust Agreement on which the decision is based
and shall, to the extent permitted by applicable law, be final and binding on
all interested persons. During such review, the claimant or his duly
authorized representative shall be given an opportunity to review documents
that are pertinent to the claimant's claim and to submit issues and comments in
writing. If the decision on review is not
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furnished within such 60-day or 120-day period, as the case may be, the claim
shall be deemed denied on review.
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ARTICLE XIV - AMENDMENT, SUSPENSION OR TERMINATION
--------------------------------------------------
14.1 RIGHT TO AMEND, SUSPEND OR TERMINATE. Subject to the
limitations of Section 9.7, the Company has reserved, and does hereby reserve,
the right at any time, without the consent of any other Employer or of the
Members, Beneficiaries or any other person, (a) to amend the Plan, in whole or
in part, and (b) to suspend Employer Contributions to the Plan and (c) to
terminate the Plan, in whole or in part or as to any or all of the Employers or
as to any designated group of Employees, Members and their Beneficiaries. No
such amendment, suspension or termination shall decrease the amount to be
contributed by the Employers on account of any Plan Year preceding the Plan
Year in which such amendment, suspension or termination is approved by the
Company.
14.2 PROCEDURE FOR AMENDMENT, SUSPENSION OR TERMINATION. Any
amendment, suspension or termination of the Plan pursuant to Section 14.1 shall
be expressed in an instrument executed by the Company and shall become
effective as of the date designated in such instrument or, if no date is so
designated, on the date of its execution.
14.3 EFFECT OF TERMINATION. If the Plan shall be terminated
by the Company as to all Employers, Before-Tax Contributions and Employer
Contributions shall cease and, as soon as practicable after such termination,
the Trustee shall make distribution (if such distribution is permitted by
applicable law) to all Members pursuant to Section 8.3 as if each Member's
employment with the Controlled Group had terminated.
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ARTICLE XV - MISCELLANEOUS
--------------------------
15.1 SPENDTHRIFT PROVISIONS. No right or interest of any
kind of a Member or Beneficiary in the Trust Fund shall be anticipated,
assigned (either in law or in equity), alienated or be subject to encumbrance,
garnishment, attachment, execution or levy of any kind, voluntary or
involuntary, or any other legal or equitable process, except in accordance with
a qualified domestic relations order as defined in section 414(p) of the Code.
The Committee shall establish procedures to determine the qualified status of
domestic relations orders and to administer distributions under such qualified
orders in accordance with section 414(p) of the Code.
15.2 NO ENLARGEMENT OF EMPLOYMENT RIGHTS. The establishment
of the Plan shall not be construed as conferring any legal rights upon any
Employee or any person in respect of commencement, continuation, suspension,
resumption or termination of employment nor shall it interfere with or in any
other way affect the rights of an Employer to terminate or suspend employment
and to treat any Employee or other person without regard to the effect which
such treatment might have upon him as a Member.
15.3 NOTICES, REPORTS AND STATEMENTS. (1) All notices,
reports and statements given, made, delivered or transmitted to a Member shall
be deemed duly given, made, delivered or transmitted when mailed with postage
prepaid and addressed to the Member at the address last appearing on the books
of the Committee. A Member may change his address from
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time to time by written notice in the form prescribed by the Committee.
(2) Written directions, instructions, notices and other
communications from Members to the Employers or the Committee shall be mailed
by first class mail or delivered to
The Gorman-Rupp Company
305 Bowman Street
P.O. Box 1217
Mansfield, Ohio 44901
Attention: Individual Profit Sharing
Retirement Plan Committee
or to such other address as may be communicated in writing by the Company. Any
such direction, instruction, notice or other communication shall be deemed to
have been given when actually received at such location.
15.4 ACTION BY COMPANY. Whenever the Company is authorized
to act under the Plan, such action shall be taken, unless otherwise provided in
the Plan or in a resolution of the Board of Directors of the Company, by
written instrument executed by (a) the President or a Vice President of the
Company and (b) the Secretary, Treasurer, an Assistant Treasurer or an
Assistant Secretary of the Company. To the extent permitted by applicable law,
the Trustee may rely on any instrument so executed as being validly authorized
and as properly evidencing the action of the Company.
15.5 MERGER OR TRANSFER OF ASSETS. There shall be no merger
or consolidation of this Plan with, or transfer of assets or liabilities of
such Plan to, any other plan unless each Member in the Plan would (if the Plan
then terminated) receive a benefit immediately after the merger, consolidation,
or transfer which is
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equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated).
15.6 ACQUISITIONS. In the event an Employer acquires all or
a part of another business organization (whether by merger, purchase of assets
or otherwise), the Committee shall determine the terms and conditions under
which, and the extent, if any, to which, remuneration paid by such business
organization and its predecessors, subsidiaries and affiliates shall be
recognized as Credited Compensation for purposes of the Plan, but no action
shall be taken pursuant to this Section which would discriminate in favor of
shareholders, officers or highly compensated employees of such business
organization as compared with other employees of such business organization.
15.7 SEVERABILITY PROVISION. If any provision of the Plan or
Trust Agreement or the application of such provision to any person or
circumstances shall be held invalid, the remainder of the Plan and Trust
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
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ARTICLE XVI - TOP-HEAVY PLAN REQUIREMENTS
-----------------------------------------
16.1 DEFINITIONS. For the purposes of this Article, the
following terms, when used with initial capital letters, shall have the
following respective meanings:
(1) AGGREGATION GROUP: Permissive Aggregation Group or
Required Aggregation Group, as the context shall require.
(2) COMPENSATION: An Employee's compensation as defined in
Section 5.5(3).
(3) DEFINED BENEFIT PLAN: A qualified plan as defined in
section 414(j) of the Code.
(4) DEFINED CONTRIBUTION PLAN: A qualified plan as defined
in section 414(i) of the Code.
(5) DETERMINATION DATE: For any Plan Year, the last day of
the immediately preceding Plan Year, except that in the case of the first Plan
Year of the Plan, the Determination Date shall be the last day of such first
Plan Year.
(6) EXTRA TOP-HEAVY GROUP: An Aggregation Group if, as of a
Determination Date, the aggregate present value of accrued benefits for Key
Employees in all plans in the Aggregation Group (whether Defined Benefit Plans
or Defined Contribution Plans) is more than ninety percent (90%) of the
aggregate present value of all accrued benefits for all employees in such
plans.
(7) EXTRA TOP-HEAVY PLAN: See Section 16.3.
(8) FORMER KEY EMPLOYEE: A Non-Key Employee with respect to
a Plan Year who was a Key Employee in a prior Plan
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Year. Such term shall also include his Beneficiary in the event of his death.
(9) KEY EMPLOYEE: An Employee or former Employee who, at any
time during the current Plan Year or any of the four preceding Plan Years, is
(a) an officer of an Employer (limited to no more than 50 Employees (or, if
lesser, the greater of 3 or 10 percent of the Employees)) having an annual
Compensation greater than 150% of the dollar amount referred to in Section
5.5(1) applicable for any such Plan Year, (b) one of the 10 Employees owning
(or considered as owning within the meaning of section 318 of the Code) the
largest interests in an Employer and having annual Compensation of more than
the applicable dollar amount referred to in Section 5.5(1), (c) a 5-percent
owner (as such term is defined in section 416(i)(1)(B)(i) of the Code) or (d) a
1-percent owner (as such term is defined in section 416(i)(1)(B)(ii) of the
Code) having an annual Compensation of more than $150,000. For purposes of
clause (b) of this Subsection (9), if two Employees have the same interest in
an Employer, the Employee having greater annual Compensation shall be treated
as having a larger interest. The term "Key Employee" shall also include such
Employee's Beneficiary in the event of his death.
(10) NON-KEY EMPLOYEE: An Employee or former Employee who is
not a Key Employee. Such term shall also include his Beneficiary in the event
of his death.
(11) PERMISSIVE AGGREGATION GROUP: The group of qualified
plans of the Employer consisting of:
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(a) the plans in the Required Aggregation Group; plus
(b) one (1) or more plans designated from time to time by the
Committee that are not part of the Required Aggregation Group but that
satisfy the requirements of sections 401(a)(4) and 410 of the Code
when considered with the Required Aggregation Group.
If the group includes two or more Defined Benefit Plans, the same actuarial
assumptions shall be used with respect to all such Plans and shall be specified
in such Plans.
(12) REQUIRED AGGREGATION GROUP: The group of qualified
plans of the Employer consisting of:
(a) each plan in which a Key Employee participates; plus
(b) each other plan which enables a plan in which a Key
Employee participates to meet the requirements of sections 401(a)(4)
or 410 of the Code.
If the group includes two or more Defined Benefit Plans, the same actuarial
assumptions shall be used with respect to all such Plans and shall be specified
in such Plans.
(13) TOP-HEAVY ACCOUNT BALANCE: A Member's (including a
Member who has received a total distribution from this Plan) or a Beneficiary's
aggregate-balance standing to his Account as of the Valuation Date coinciding
with or immediately preceding the Determination Date (as adjusted by the amount
of any Employer Contributions made or due to be made after such Valuation Date
but before the expiration of the extended payment period in section 412(c)(10)
of the Code); provided, however, that such
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balance shall include the aggregate distributions made during the five (5)
consecutive Plan Years ending with the Plan Year that includes the
Determination Date (including distributions under a terminated plan which if it
had not been terminated would have been included in a Required Aggregation
Group), and provided further that if an Employee or former Employee has not
performed services for any Employer maintaining the Plan at any time during the
5-year period ending on the Determination Date, his Account (and/or the Account
of his Beneficiary) shall not be taken into account.
(14) TOP-HEAVY GROUP: An Aggregation Group if, as of a
Determination Date, the aggregate present value of accrued benefits for Key
Employees in all plans in the Aggregation Group (whether Defined Benefit Plans
or Defined Contribution Plans) is more than sixty percent (60%) of the
aggregate present value of accrued benefits for all employees in such plans.
Proportional subsidies shall be ignored in determining the top-heavy status of
a Defined Benefit Plan, but non-proportional subsidies shall be considered when
making such determination.
(15) TOP-HEAVY PLAN: See Section 16.2.
16.2 DETERMINATION OF TOP-HEAVY STATUS. (1) Except as
provided by Subsections (2) and (3) of this Section, the Plan shall be a
Top-Heavy Plan if, as of a Determination Date:
(a) the aggregate of Top-Heavy Account Balances for Key
Employees is more than sixty percent (60%) of the aggregate of all
Top-Heavy Account Balances, excluding for
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this purpose the aggregate Top-Heavy Account Balances of Former Key
Employees; or
(b) if the Plan is included in a Required Aggregation Group
which is a Top-Heavy Group.
(2) If the Plan is included in a Required Aggregation Group
which is not a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan
notwithstanding the fact that the Plan would otherwise be a Top-Heavy Plan
under Subsection (1) of this Section.
(3) If the Plan is included in a Permissive Aggregation Group
which is not a Top-Heavy Group, the Plan shall not be a Top-Heavy Plan
notwithstanding the fact that the Plan would otherwise be a Top-Heavy Plan
under Subsection (1) of this Section.
16.3 DETERMINATION OF EXTRA TOP-HEAVY STATUS. (1) Except as
provided by Subsections (2) and (3) of this Section, the Plan shall be an Extra
Top-Heavy Plan if, as of the Determination Date:
(a) the aggregate of Top-Heavy Account Balances for Key
Employees is more than ninety percent (90%) of the aggregate of all
Top-Heavy Account Balances, excluding for this purpose the aggregate
Top-Heavy Account Balances of Former Key Employees; or
(b) if the Plan is included in a Required Aggregation Group
which is an Extra Top-Heavy Group.
(2) If the Plan is included in a Required Aggregation Group
which is not an Extra Top-Heavy Group, the Plan shall not
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be an Extra Top-Heavy Plan notwithstanding the fact that the Plan would
otherwise be an Extra Top-Heavy Plan under Subsection (1) of this Section.
(3) If the Plan is included in a Permissive Aggregation Group
which is not an Extra Top-Heavy Group, the Plan shall not be an Extra Top-Heavy
Plan notwithstanding the fact that the Plan would otherwise be an Extra
Top-Heavy Plan under Subsection (1) of this Section.
16.4 TOP-HEAVY PLAN REQUIREMENTS. Notwithstanding any other
provisions of the Plan to the contrary, if the Plan is a Top-Heavy Plan for any
Plan Year, the Plan shall then satisfy the following requirements for such Plan
Year:
(a) The minimum contribution requirement as set forth in
Section 16.5.
(b) The limitation on Compensation set forth in Section 16.6.
(c) The adjustment to minimum benefits and allocations as set
forth in Section 16.7.
16.5 MINIMUM CONTRIBUTION REQUIREMENT. If the Plan is a
Top-Heavy Plan for any Plan Year:
(a) Each Non-Key Employee who is eligible to share in any
Employer Contribution for such Plan Year (determined without regard to
whether he has been credited with 1000 Hours of Service during such
Year) shall be entitled to receive an allocation of such Contribution
which is at least equal to three percent (3%) of his Compensation for
such Plan Year.
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(b) The percentage minimum contribution requirement set forth
in paragraph (a) above with respect to a Plan Year shall not exceed
the percentage at which Employer Contributions are made (or required
to be made) under the Plan for such Plan Year for the Key Employee for
whom such percentage is the highest for such Year. The determination
referred to in the immediately preceding sentence shall be determined
for each Key Employee by dividing the Employer Contributions allocated
to such Key Employee in that Plan Year by such Key Employee's
Compensation for such Plan Year; provided, however, that for any Plan
Year commencing before January 1, 1989 only the first $200,000 of a
Key Employee's compensation shall be used.
(c) The percentage minimum contribution requirement set forth
in paragraph (a) above may also be reduced or eliminated in accordance
with Section 16.8(2).
(d) For the purpose of paragraph (b) above, contributions
taken into account shall include like contributions under all other
Defined Contribution Plans in the Required Aggregation Group,
excluding any such plan in the Required Aggregation Group if that plan
enables a Defined Benefit Plan in such Required Aggregation Group to
meet the requirements of section 401(a)(4) or section 410 of the Code.
(e) For the purpose of this Section, the term "Employer
Contributions" shall include Before-Tax Contributions made for an
Employee.
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16.6 LIMITATION ON COMPENSATION REQUIREMENT. If the Plan is
a Top-Heavy Plan for any Plan Year commencing before January 1, 1989, the
annual Compensation of each Employee taken into account under the Plan for such
Plan Year shall not exceed the first $200,000; provided, however, that said
$200,000 amount shall be automatically adjusted each Plan Year to the amount
prescribed by the Secretary of the Treasury, or his delegate, for that Plan
Year pursuant to section 416(d)(2) of the Code and the Regulations thereunder.
16.7 ADJUSTMENT TO MINIMUM BENEFITS AND ALLOCATIONS. If the
Plan is a Top-Heavy Plan for any Plan Year, and if the Employer maintains a
Defined Benefit Plan which could or does provide benefits to Members in this
Plan:
(a) The minimum contribution requirement under Section
16.5(a) shall be five percent (5%) for a Non-Key Employee who is
covered by this Plan and the Defined Benefit Plan.
(b) Calculations under parts (a) and (b) of Section 5.6 shall
be made by substituting "1.0" for "1.25" for each place such "1.25"
figure appears, and calculations under section 415(e)(6)(B)(I) of the
Code shall be made by substituting "$41,500" for "$51,875" for each
place such "$51,875" amount appears.
16.8 COORDINATION WITH OTHER PLANS. (1) In applying this
Article, an Employer and all Controlled Group Members shall be treated as a
single employer, and the qualified plans maintained by such single employer
shall be taken into account.
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(2) In the event that another Defined Contribution Plan
maintained by the Controlled Group provides contributions or benefits on behalf
of Members in this Plan, such other plan(s) shall be taken into account in
determining whether this Plan satisfies Section 16.4; and, the minimum
contribution required for a Non-Key Employee in this Plan under Section 16.5
will be reduced or eliminated, in accordance with the requirements of section
416 of the Code and the Regulations thereunder, if a minimum contribution is
made in whole or in part in respect of such other plan(s).
(3) Principles similar to those specifically applicable to
this Plan under this Article, and in general as provided for in section 416 of
the Code and the Regulations thereunder, shall be applied to the other plan(s)
required to be taken into account under this Article in determining whether
this Plan and such other plan(s) meet the requirements of such section 416 of
the Code and the Regulations thereunder.
* * * * *
DATED as of January 1, 1987, but actually executed at
Mansfield, Ohio, on August 8, 1988.
THE GORMAN-RUPP COMPANY
By /s/ James C. Gorman
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President
And /s/ Jeffrey S. Gorman
--------------------------
Secretary