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Exhibit 4(c)
THE GORMAN-RUPP COMPANY
INDIVIDUAL PROFIT SHARING RETIREMENT PLAN
(As Amended and Restated as of January 1, 1987)
Table of Contents
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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
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(36) Prior Written Notice.............................................................. 11
(37) Salary Reduction Agreement........................................................ 11
(38) Spouse............................................................................ 11
(39) Trust............................................................................. 11
(40) Trust Agreement................................................................... 11
(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
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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
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
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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
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
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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.
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(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 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
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(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
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.
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(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.
(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
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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
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.
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(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.
(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.
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(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, 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).
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(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, to which such Controlled Group member
contributes or pays
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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
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(c), and (ii) Hours of Service credited under this paragraph (c) with
respect to periods described in paragraph (b) shall 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
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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 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
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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. 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
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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.
(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.
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(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.
(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
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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
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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 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
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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 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
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20
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 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.
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(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, 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
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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 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
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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.
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
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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 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
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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 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
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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
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29
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 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
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30
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 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
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31
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 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
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32
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 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
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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 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
39
34
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
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
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35
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
thereafter for each highly compensated Eligible Employee (as defined in Section
5.2(3)) shall be reduced (pursuant to
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36
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,
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37
one-fourth of the dollar limitation in effect under section 415(b)(1)(A) of the
Code).
(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
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38
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 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
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39
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 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,
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(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
(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
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41
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.
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
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43
reasons, and the Trustee shall not be liable for interest on uninvested funds.
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.
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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, 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
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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 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,
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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, 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.
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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 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,
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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 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
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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 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
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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 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
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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 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.
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(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 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,
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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
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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 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
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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
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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.
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.
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(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.
(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
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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
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.
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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 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
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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 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
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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 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
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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
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such withdrawal or termination as if each such Member's employment with the
Controlled Group had terminated.
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
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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 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
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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 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.
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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 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
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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 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
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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 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
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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 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
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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,
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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 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
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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 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
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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.
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(8) FORMER KEY EMPLOYEE: A Non-Key Employee with respect to a
Plan Year who was a Key Employee in a prior Plan 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.
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(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:
(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.
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(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 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
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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 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.
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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 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
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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.
(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
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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.
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
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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.
(2) In the event that another Defined Contribution Plan
maintained by the Controlled Group provides contributions or
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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
--------------------------------
President
And /s/ Jeffrey S. Gorman
--------------------------------
Secretary