EXHIBIT 10.29
SILICON VALLEY BANK
MONEY PURCHASE PENSION PLAN
ESTABLISHED EFFECTIVE JANUARY 1, 1995
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SILICON VALLEY BANK
MONEY PURCHASE PENSION PLAN
ESTABLISHED EFFECTIVE JANUARY 1, 1995
Silicon Valley Bank hereby establishes the Silicon Valley Bank Money Purchase
Pension Plan effective January 1, 1995, for the benefit of eligible employees of
the Company and its participating affiliates. The Plan is intended to
constitute a qualified money purchase pension plan, as described in Code section
401(a).
The Silicon Valley Bank Money Purchase Pension Plan, as set forth in this
document, is hereby established effective as of January 1, 1995.
Date: May 28, 1996 SILICON VALLEY BANK
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By: /s/ Glen Simmons
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Title: E.V.P. Human Resources
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1. DEFINITIONS
When capitalized, the words and phrases below have the following meanings unless
different meanings are clearly required by the context:
1.1 ACCOUNT. The records maintained for purposes of accounting for a
Participant's interest in the Plan. "Account" refers to the following account
which has been created on behalf of a Participant to hold Contributions under
the Plan:
1.2 MONEY PURCHASE PENSION ACCOUNT. An account created to hold Money
Purchase Pension Contributions.
1.3 ADMINISTRATOR. The Company, which may delegate all or a portion of
the duties of the Administrator under the Plan to a Committee in accordance with
Section 14.6.
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1.4 BENEFICIARY. The person or persons who is to receive benefits after
the death of the Participant pursuant to the "Beneficiary Designation" paragraph
in Section 11, or as a result of a QDRO.
1.5 BREAK IN SERVICE. The fifth anniversary (or sixth anniversary if
absence from employment was due to a Parental Leave) of the date on which a
Participant's employment ends.
1.6 CODE. The Internal Revenue Code of 1986, as amended. Reference to
any specific Code section shall include such section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.
1.7 COMMITTEE. If applicable, the committee which has been appointed by
the Company to administer the Plan in accordance with Section 14.6.
1.8 COMPANY. Silicon Valley Bank or any successor by merger, purchase or
otherwise.
1.9 COMPANY STOCK. Shares of common stock of Silicon Valley Bancshares,
the parent company of the Company, its predecessor(s), or its successors or
assigns, or any corporation with or into which said corporation may be merged,
consolidated or reorganized, or to which a majority of its assets may be sold.
1.10 COMPENSATION. The sum of a Participant's Taxable Income and salary
reductions, if any, pursuant to Code sections 125, 402(e)(3), 402(h), 403(b),
414(h)(2) or 457 for the Plan Year.
For purposes of determining benefits under this Plan, Compensation is
limited to $150,000, (as adjusted for the cost of living pursuant to Code
sections 401(a)(17) and 415(d)) per Plan Year. For purposes of the preceding
sentence, in the case of an HCE who is a 5% Owner or one of the 10 most highly
compensated Employees, (i) such HCE and such HCE's family group (as defined
below) shall be treated as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of such HCE, and (ii) the
limitation on Compensation shall be allocated among such HCE and his or her
family group members in proportion to each individual's Compensation before the
application of this sentence. For purposes of this Section, the term "family
group" shall mean an Employee's spouse and lineal descendants who have not
attained age 19 before the close of the year in question.
1.11 CONTRIBUTION. An amount contributed to the Plan by the Employer and
allocated by contribution type to Participants' Accounts, as described in
Section 1.1. Contributions to the Plan consist of:
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1.12 MONEY PURCHASE PENSION CONTRIBUTION. An amount contributed by the
Employer on an eligible Participant's behalf and allocated on a pay based
formula.
1.13 CONVERSION PERIOD. The period of converting the prior accounting
system of any plan and trust which is merged into this Plan subsequent to the
Effective Date, to the accounting system described in Section 6.
1.14 DIRECT ROLLOVER. An Eligible Rollover Distribution that is paid
directly to an Eligible Retirement Plan for the benefit of a Distributee.
1.15 DISABILITY. A Participant's mental or physical disability resulting
in termination of employment as evidenced by presentation of medical evidence
satisfactory to the Administrator.
1.16 DISTRIBUTEE. An Employee or former Employee, the surviving spouse of
an Employee or former Employee and a spouse or former spouse of an Employee or
former Employee determined to be an alternate payee under a QDRO.
1.17 EARLY RETIREMENT DATE. The date of a Participant's 55th birthday and
completion of 10 Years of Vesting Service.
1.18 EFFECTIVE DATE. The date upon which the provisions of this document
become effective. This date is January 1, 1995, unless stated otherwise.
1.19 ELIGIBLE EMPLOYEE. An Employee of an Employer, except any Employee:
(a) whose compensation and conditions of employment are covered by a
collective bargaining agreement to which an Employer is a party unless the
agreement calls for the Employee's participation in the Plan;
(b) who is treated as an Employee because he or she is a Leased
Employee; or
(c) who is a nonresident alien who (i) either receives no earned
income (within the meaning of Code section 911(d)(2)), from sources within the
United States under Code section 861(a)(3); or (ii) receives such earned income
from such sources within the United States but such income is exempt from United
States income tax under an applicable income tax convention.
1.20 ELIGIBLE RETIREMENT PLAN. An individual retirement account described
in Code section 408(a), an individual retirement annuity described in Code
section 408(b), an annuity plan described in Code section 403(a), or a qualified
trust described in Code section 401(a), that accepts a Distributee's Eligible
Rollover Distribution, except that with
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regard to an Eligible Rollover Distribution to a surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.
1.21 ELIGIBLE ROLLOVER DISTRIBUTION. A distribution of all or any portion
of the balance to the credit of a Distributee, excluding a distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of a Distributee or the
joint lives (or joint life expectancies) of a Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten years or more; a
distribution to the extent such distribution is required under Code section
401(a)(9); and the portion of a distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
1.22 EMPLOYEE. An individual who is:
(a) directly employed by any Related Company and for whom any income
for such employment is subject to withholding of income or social security
taxes, or
(b) a Leased Employee.
1.23 EMPLOYER. The Company and any Related Company which adopts this Plan
with the approval of the Company.
1.24 ERISA. The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific ERISA section shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.
1.25 FORFEITURE ACCOUNT. An account holding amounts forfeited by
Participants who have terminated employment with all Related Companies, invested
in interest bearing deposits of the Trustee, pending disposition as provided in
this Plan and as directed by the Administrator.
1.26 HCE OR HIGHLY COMPENSATED EMPLOYEE. With respect to each Employer
and its Related Companies, an Employee during the Plan Year or "lookback year"
who (in accordance with Code section 414(q)):
(a) was a more than 5% Owner at any time during the "lookback year"
or Plan Year;
(b) received Compensation during the "lookback year" (or in the Plan
Year if among the 100 Employees with the highest Compensation for such Year) in
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excess of (i) $75,000 (as adjusted for such Year pursuant to Code sections
414(q)(1) and 415(d)), or (ii) $50,000 (as adjusted for such Year pursuant to
Code sections 414(q)(1) and 415(d)) in the case of a member of the "top-paid
group" (within the meaning of Code section 414(q)(4)) for such Year, provided,
however, that if the conditions of Code section 414(q)(12)(B)(ii) are met, the
Company may elect for any Plan Year to apply clause (i) by substituting $50,000
for $75,000 and not to apply clause (ii); or
(c) was an officer of a Related Company and received Compensation
during the "lookback year" (or in the Plan Year if among the 100 Employees with
the highest Compensation for such Year) that is greater than 50% of the dollar
limitation in effect under Code section 415(b)(1)(A) and (d) for such Year (or
if no officer has Compensation in excess of the threshold, the officer with the
highest Compensation), provided that the number of officers shall be limited to
50 Employees (or, if less, the greater of three Employees or 10% of the
Employees).
A former Employee shall be treated as an HCE if (1) such former
Employee was an HCE when he separated from service, or (2) such former Employee
was an HCE in service at any time after attaining age 55.
The determination of who is an HCE, including the determinations of the
number and identity of Employees in the top-paid group, the top 100 Employees
and the number of Employees treated as officers shall be made in accordance with
Code section 414(q).
Pursuant to Code section 414(q), the Company elects as the "lookback year"
the 12 months ending immediately prior to the start of the Plan Year.
1.27 INELIGIBLE. The Plan status of an individual during the period in
which he or she is (1) an Employee of a Related Company which is not then an
Employer, (2) an Employee, but not an Eligible Employee, or (3) not an Employee.
1.28 INVESTMENT FUND OR FUND. An investment fund as described in Section
15.2.
1.29 LEASED EMPLOYEE. An individual who is deemed to be an employee of
any Related Company as provided in Code section 414(n) or (o).
1.30 LEAVE OF ABSENCE. A period during which an individual is deemed to be
an Employee, but is absent from active employment, provided that the absence:
(a) was authorized by a Related Company; or
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(b) was due to military service in the United States armed forces and
the individual returns to active employment within the period during which he or
she retains employment rights under federal law.
1.31 NORMAL RETIREMENT DATE. The date of a Participant's 62nd birthday.
1.32 OWNER. A person with an ownership interest in the capital, profits,
outstanding stock or voting power of a Related Company within the meaning of
Code section 318 or 416 (which exclude indirect ownership through a qualified
plan).
1.33 PARENTAL LEAVE. The period of absence from work by reason of
pregnancy, the birth of an Employee's child, the placement of a child with the
Employee in connection with the child's adoption, or caring for such child
immediately after birth or placement as described in Code section 410(a)(5)(E).
1.34 PARTICIPANT. The Plan status of an Eligible Employee after he or she
completes the eligibility requirements as described in Section 2.1. A
Participant's participation continues until his or her employment with all
Related Companies ends and his or her Account is distributed or forfeited.
1.35 PAY. All cash compensation, excluding incentive pay (annual incentive
awards, referral fees and other recognition/achievement awards), paid to an
Eligible Employee by an Employer while a Participant during the current period.
Pay excludes reimbursements or other expense allowances, cash and non-cash
fringe benefits, moving expenses, deferred compensation and welfare benefits.
Pay shall be determined further by including amounts contributed by an
Employer pursuant to Code sections 125 and 402(e)(3). Pay is limited to $150,000
(as adjusted for the cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year.
For purposes of the Contributions described in Section 5.1, the limitations
as described in the second paragraph of Section 1.9 shall also apply.
1.36 PERIOD OF EMPLOYMENT. The period beginning on the date an Employee
first performs an hour of service and ending on the date his or her employment
ends. Employment ends on the date the Employee quits, retires, is discharged,
dies or (if earlier) the first anniversary of his or her absence for any other
reason. The period of absence starting with the date an Employee's employment
temporarily ends and ending on the date he or she is subsequently reemployed is
(1) included in his or her Period of Employment if the period of absence does
not exceed one year, and (2) excluded if such period exceeds one year.
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Period of Employment includes the period prior to a Break in Service.
An Employee's service with a predecessor or acquired company shall only be
counted in the determination of his or her Period of Employment for eligibility
and/or vesting purposes if (1) the Company directs that credit for such service
be granted, or (2) a qualified plan of the predecessor or acquired company is
subsequently maintained by any Employer or Related Company.
1.37 PLAN. The Silicon Valley Bank Money Purchase Pension Plan set forth
in this document, as from time to time amended.
1.38 Plan Year. The annual accounting period of the Plan which ends on
each December 31.
1.39 QDRO. A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the meaning of Code
section 414(p).
1.40 REDUCTION IN FORCE. An Employer sponsored program developed to reduce
force on a permanent basis.
1.41 RELATED COMPANY. With respect to any Employer, that Employer and any
corporation, trade or business which is, together with that Employer, a member
of the same controlled group of corporations, a trade or business under common
control, or an affiliated service group within the meaning of Code sections
414(b), (c), (m) or (o), except that for purposes of Section 12 "within the
meaning of Code sections 414(b), (c), (m) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to "within the meaning
of Code section 414(b), (c), (m) or (o)."
1.42 SENIOR PARTICIPANT. A Participant who is age 55 or over.
1.43 SETTLEMENT DATE. For each Trade Date, the Trustee's next business
day.
1.44 SPOUSAL CONSENT. The written consent given by a spouse to a
Participant's election or waiver of a specified form of benefit or Beneficiary
designation. The spouse's consent must acknowledge the effect on the spouse of
the Participant's election, waiver or designation, and be duly witnessed by a
Plan representative or notary public. Spousal Consent shall be valid only with
respect to the spouse who signs the Spousal Consent and only for the particular
choice made by the Participant which requires Spousal Consent. A Participant may
revoke (without Spousal Consent) a prior election, waiver or designation that
required Spousal Consent at any time before payments begin. Spousal Consent also
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means a determination by the Administrator that there is no spouse, the spouse
cannot be located, or such other circumstances as may be established by
applicable law.
1.45 SWEEP ACCOUNT. The subsidiary Account for each Participant through
which all transactions are processed, which is invested in interest bearing
deposits of the Trustee.
1.46 SWEEP DATE. The cut off date and time for receiving instructions for
transactions to be processed on the next Trade Date.
1.47 TAXABLE INCOME. Compensation in the amount reported by the Employer
or a Related Company as "Wages, tips, other compensation" on Form W 2, or any
successor method of reporting under Code section 6041(d).
1.48 TRADE DATE. Each day the Investment Funds are valued, which is
normally every day the assets of such Funds are traded.
1.49 TRUST. The legal entity created by those provisions of the Silicon
Valley Bank 401(k) and Employee Stock Ownership Plan and Trust and which relate
to the Trustee and any successor Trust that may be created to hold the Plan
assets. The Trust is part of the Plan and holds the Plan assets which are
comprised of the aggregate of Participants' Accounts, any unallocated funds
invested in deposit or money market type assets pending allocation to
Participants' Accounts or disbursement to pay Plan fees and expenses and the
Forfeiture Account.
1.50 TRUSTEE. Wells Fargo Bank, National Association.
1.51 YEAR OF VESTING SERVICE. A 12 month Period of Employment.
Notwithstanding, Years of Vesting Service shall be calculated as follows if
(and only if) it would be of benefit to the Employee:
(a) For service from January 1, 1995, each 12 month Period of
Employment;
(b) For service prior to January 1, 1995, a 12 month period ending on
the anniversary of the date an individual became an Employee, or as that date
may be adjusted as a result of his or her termination of employment with all
Related Companies and subsequent rehire as an Employee, in which an Employee is
credited with at least 1,000 hours of service, as such term was defined for this
purpose under the terms of the Silicon Valley Bancshares Employee Stock
Ownership Plan as then in effect prior to the Effective Date.
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Years of Vesting Service shall include service credited prior to January 1,
1995.
2. ELIGIBILITY
2.1 ELIGIBILITY. Each Eligible Employee shall become a Participant on the
later of January 1, 1995 or on the first January 1, April 1, July 1 or October 1
after the date he or she attains age 18, and completes one hour of service.
2.2 INELIGIBLE EMPLOYEES. If an Employee completes the above eligibility
requirements, but is Ineligible at the time participation would otherwise begin
(if he or she were not Ineligible), he or she shall become a Participant on the
first subsequent date on which he or she is an Eligible Employee.
2.3 INELIGIBLE OR FORMER PARTICIPANTS. A Participant may not share in
Plan Contributions during the period he or she is Ineligible, but he or she
shall continue to participate for all other purposes. An Ineligible Participant
or former Participant shall automatically become an active Participant on the
date he or she again becomes an Eligible Employee.
3. PARTICIPANT CONTRIBUTIONS
Participant Contributions are not permitted under the Plan.
4. TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
4.1 TRANSFERS FROM AND TO OTHER QUALIFIED PLANS. The Administrator may
accept assets in cash or in-kind directly from another qualified plan or
transfer assets in cash or in-kind directly to another qualified plan; provided
that receipt of a transfer shall not be permitted if:
(a) any amounts are not exempted by Code section 401(a)(11)(B) from
the annuity requirements of Code section 417 unless the Plan complies with such
requirements; or
(b) any amounts include benefits protected by Code section 411(d)(6)
which would not be preserved under applicable Plan provisions.
The Administrator may refuse the receipt of any transfer if:
(a) the Administrator finds the in-kind assets unacceptable; or
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(b) instructions for posting amounts to Participants' Accounts are
incomplete.
Such amounts shall be posted to the appropriate Accounts of Participants as of
the date received.
5. EMPLOYER CONTRIBUTIONS AND FORFEITURE ACCOUNT ALLOCATIONS
5.1 MONEY PURCHASE PENSION CONTRIBUTIONS AND FORFEITURE ACCOUNT
ALLOCATIONS.
(a) FREQUENCY AND ELIGIBILITY. For each quarter of the Plan Year,
the Employer shall make a Money Purchase Pension Contribution on behalf of each
Participant who was an Eligible Employee on the last day of the period. Such
Contributions shall also be made on behalf of each Participant who was an
Eligible Employee at any time during the period but who ceased being an Employee
during the period after having attained his or her Early Retirement Date, Normal
Retirement Date or by reason of his or her Disability or death.
For each Plan Year, the Employer shall allocate any Forfeiture Account
balance remaining as of the end of the Plan Year as Money Purchase Pension
Contributions on behalf of each Participant who was an Eligible Employee on the
last day of the period. Such an allocation shall also be made on behalf of each
Participant who ceased being an Employee during the period after having attained
his or her Early Retirement Date, Normal Retirement Date or by reason of his or
her Disability or death.
5.2 ALLOCATION METHOD. The Money Purchase Pension Contribution for each
period, shall be equal to 5% of each eligible Participant's Pay (not including
Forfeiture Account amounts allocated as Money Purchase Pension Contributions).
Forfeiture Account amounts allocated as Money Purchase Pension
Contributions shall be allocated among eligible Participants in direct
proportion to their Pay.
(a) TIMING, MEDIUM AND POSTING. The Employer shall make each period's
Money Purchase Pension Contribution in cash and allocate Forfeiture Account
amounts as soon as administratively feasible, and for purposes of deducting such
Money Purchase Pension Contribution, not later than the Employer's federal tax
filing date, including extensions. Such amounts shall be posted to each
Participant's Money Purchase Pension Account once the total Contribution
received or Forfeiture Account amount to be allocated has been balanced against
the specific amount to be credited to each Participant's Money Purchase Pension
Account.
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6. ACCOUNTING
6.1 INDIVIDUAL PARTICIPANT ACCOUNTING. The Administrator shall maintain
an individual set of Accounts for each Participant in order to reflect
transactions both by type of Account and investment medium. Financial
transactions shall be accounted for at the individual Account level by posting
each transaction to the appropriate Account of each affected Participant.
Participant Account values shall be maintained in shares for the Investment
Funds and in dollars for the Sweep Account. At any point in time, the Account
value shall be determined using the most recent Trade Date values provided by
the Trustee.
6.2 SWEEP ACCOUNT IS TRANSACTION ACCOUNT. All transactions related to
amounts being contributed to or distributed from the Trust shall be posted to
each affected Participant's Sweep Account. Any amount held in the Sweep Account
shall be credited with interest up until the date on which it is removed from
the Sweep Account.
6.3 TRADE DATE ACCOUNTING AND INVESTMENT CYCLE. Participant Account
values shall be determined as of each Trade Date. For any transaction to be
processed as of a Trade Date, the Trustee must receive instructions for the
transaction by the Sweep Date. Such instructions shall apply to amounts held in
the Account on that Sweep Date. Financial transactions of the Investment Funds
shall be posted to Participants' Accounts as of the Trade Date, based upon the
Trade Date values provided by the Trustee, and settled on the Settlement Date.
6.4 ACCOUNTING FOR INVESTMENT FUNDS. Investments in each Investment Fund
shall be maintained in shares. The share value of each Investment Fund shall be
based on the fair market value of its underlying assets.
6.5 PAYMENT OF FEES AND EXPENSES. Except to the extent Plan fees and
expenses related to Account maintenance, transaction and Investment Fund
management and maintenance, as set forth below, are paid by the Employer
directly, or indirectly, through the Forfeiture Account as directed by the
Administrator, such fees and expenses shall be paid as set forth below. The
Employer may pay a lower portion of the fees and expenses allocable to the
Accounts of Participants who are no longer Employees or who are not
Beneficiaries, unless doing so would result in discrimination.
(a) ACCOUNT MAINTENANCE: Account maintenance fees and expenses, may
include but are not limited to, administrative, Trustee, government annual
report preparation, audit, legal, nondiscrimination testing and fees for any
other special services. Account maintenance fees shall be charged to
Participants on a per Participant basis provided that no fee shall reduce a
Participant's Account balance below zero.
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(b) TRANSACTION: Transaction fees and expenses, may include but are
no limited to, periodic installment payment and Investment Fund election change
fees. Transaction fees shall be charged to the Participant's Account involved in
the transaction provided that no fee shall reduce a Participant's Account
balance below zero.
(c) Investment Fund Management and Maintenance: Management and
maintenance fees and expenses related to the Investment Funds shall be charged
at the Investment Fund level and reflected in the net gain or loss of each Fund.
As of the Effective Date, a breakdown of which Plan fees and expenses shall
generally be borne by the Trust (and charged to individual Participants'
Accounts or charged at the Investment Fund level and reflected in the net gain
or loss of each Fund) and those that shall be paid by the Employer is set forth
in Appendix B and may be changed from time to time by the Administrator, in
writing, without the necessity of amending this Plan or the Trust.
6.6 ERROR CORRECTION. The Administrator may correct any errors or
omissions in the administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to the Account had no
error or omission been made. Funds necessary for any such restoration shall be
provided through payment made by the Employer, unless the Trustee is required to
provide such restoration funds pursuant to the Trust, or if the restoration
involves an Account holding amounts contributed by an Employer, the
Administrator may direct the Trustee to use amounts from the Forfeiture Account.
6.7 PARTICIPANT STATEMENTS. The Administrator shall provide Participants
with statements of their Accounts as soon after the end of each quarter of the
Plan Year as administratively feasible.
6.8 SPECIAL ACCOUNTING DURING CONVERSION PERIOD. The Administrator may
use any reasonable accounting methods in performing its duties during any
Conversion Period. This includes, but is not limited to, the method for
allocating net investment gains or losses and the extent, if any, to which
contributions received by and distributions paid from the Trust during this
period share in such allocation.
6.9 ACCOUNTS FOR QDRO BENEFICIARIES. A separate Account shall be
established for an alternate payee entitled to any portion of a Participant's
Account under a QDRO as of the date and in accordance with the directions
specified in the QDRO. In addition, a separate Account may be established during
the period of time the Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic relations order qualifies
as a QDRO. Such a separate Account shall be valued and accounted for in the same
manner as any other Account.
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(a) DISTRIBUTIONS PURSUANT TO QDROS. If a QDRO so provides, the
portion of a Participant's Account payable to an alternate payee may be
distributed, in a form as permissible under Section 11 and Code section 414(p),
to the alternate payee at the time specified in the QDRO, regardless of whether
the Participant is entitled to a distribution from the Plan at such time.
(b) INVESTMENT DIRECTION. Where a separate Account has been
established on behalf of an alternate payee and has not yet been distributed,
the alternate payee may direct the investment of such Account in the same manner
as if he or she were a Participant.
7. INVESTMENT AUTHORITY AND INVESTMENT FUNDS
7.1 GENERAL INVESTMENT AUTHORITY. The Administrator shall be responsible
for directing the investment of all Plan assets, except that a Senior
Participant shall be provided the option to direct the investment of his or her
Account as described in this Section. Except for Participants' Sweep Accounts,
the Plan assets shall be maintained in one or more Investment Funds. The
Administrator shall select the Investment Funds and may change the number or
composition of the Investment Funds.
7.2 SPECIAL INVESTMENT AUTHORITY PROVISIONS RELATED TO SENIOR
PARTICIPANTS. A Senior Participant may direct the investment of the balance in
his or her Account in any combination of one or any number of the Investment
Funds offered in accordance with the procedures established by the
Administrator. Any amount deposited to a Senior Participant's Account shall be
invested as directed by the Administrator, until otherwise directed by the
Senior Participant. During any Conversion Period, Plan assets may be held in any
investment vehicle permitted by the Plan, as directed by the Administrator,
irrespective of a Senior Participant's investment elections.
The Administrator shall select the Investment Funds offered to Senior
Participants and may change the number or composition of the Investment Funds.
A Senior Participant may change his or her investment election at any time in
accordance with the procedures established by the Administrator. Investment
elections received by the Sweep Date shall be effective on the following Trade
Date. A reasonable processing fee may be charged directly to a Senior
Participant's Account for Investment Fund election changes in excess of a
specified number per year as determined by the Administrator.
A Senior Participant shall be solely responsible for the selection of his
or her Investment Fund choices. No fiduciary with respect to the Plan is
empowered to advise a Senior Participant as to the manner in which his or her
Account is to be invested, and the fact that an Investment Fund is offered shall
not be construed to be a recommendation for investment.
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As of the Effective Date, a list of the Investment Funds offered under the
Plan to Senior Participants is set forth in Appendix A, and may be changed from
time to time by the Administrator, in writing, without the necessity of amending
this Plan or the Trust.
8. VESTING AND FORFEITURES
8.1 FULL VESTING UPON CERTAIN EVENTS. A Participant's entire Account
shall become fully vested once he or she has attained his or her Normal
Retirement Date as an Employee or upon his or her terminating employment with
all Related Companies due to a Reduction in Force or his or her Disability or
death.
8.2 VESTING SCHEDULE. In addition to the vesting provided above, a
Participant's Money Purchase Pension Account shall become vested in accordance
with the following schedule:
Years of Vesting Vested
Service Percentage
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
If this vesting schedule is changed, the vested percentage for each
Participant shall not be less than his or her vested percentage determined as of
the last day prior to this change, and for any Participant with at least three
Years of Vesting Service when the schedule is changed, vesting shall be
determined using the more favorable vesting schedule.
8.3 FORFEITURES. A Participant's non-vested Account balance shall be
forfeited as of the Settlement Date following the Sweep Date on which the
Administrator has reported to the Trustee that the Participant's employment has
terminated with all Related Companies. Forfeitures from all Employer
Contribution Accounts shall be transferred to and maintained in a single
Forfeiture Account. Forfeiture Account amounts shall be utilized to restore
Accounts, to pay Plan fees and expenses at the discretion of the Administrator
and in accordance with Section 5 to increase the amount allocated as Money
Purchase Pension Contributions as directed by the Administrator.
8.4 REHIRED EMPLOYEES.
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(a) SERVICE. If a former Employee is rehired, all Periods of
Employment credited when his or her employment last terminated shall be counted
in determining his or her vested interest.
(b) ACCOUNT RESTORATION. If a former Employee is rehired before he
or she has a Break in Service, the amount forfeited when his or her employment
last terminated shall be restored to his or her Account. The restoration shall
include the interest which would have been credited had such forfeiture been
invested in the Sweep Account from the date forfeited until the date the
restoration amount is restored. The amount shall come from the Forfeiture
Account to the extent possible, and any additional amount needed shall be
contributed by the Employer. The vested interest in his or her restored Account
shall then be equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
9. PARTICIPANT LOANS
Loans to Participants from the Plan are not permitted.
10. In-Service Withdrawals
In-service withdrawals to a Participant who is an Employee are not
permitted other than as required by law pursuant to the terms and conditions as
set forth in Section 11.
11. DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW
11.1 BENEFIT INFORMATION, NOTICES AND ELECTION. A Participant, or his or
her Beneficiary in the case of his or her death, shall be provided with
information regarding all optional times and forms of distribution available, to
include the notices prescribed by Code section 402(f) and Code section
411(a)(11). Subject to the other requirements of this Section, a Participant, or
his or her Beneficiary in the case of his or her death, may elect, in such
manner and with such advance notice as prescribed by the Administrator, to have
his or her vested Account balance paid to him or her beginning upon any
Settlement
16
Date following the Participant's termination of employment with all Related
Companies or, if earlier, at the time required by law as set forth in Section
11.7.
If a distribution is one to which Code sections 401(a)(11) and 417 do not
apply, such distribution may commence less than 30 days after the aforementioned
notices are provided, if:
(a) the Participant is clearly informed that he or she has the right
to a period of at least 30 days after receipt of such notices to consider the
decision as to whether to elect a distribution and if so to elect a particular
form of distribution and to elect or not elect a Direct Rollover for all or a
portion, if any, of his or her distribution which shall constitute an Eligible
Rollover Distribution; and
(b) the Participant after receiving such notices, affirmatively
elects a distribution and a Direct Rollover for all or a portion, if any, of his
or her distribution which shall constitute an Eligible Rollover Distribution or
alternatively elects to have all or a portion made payable directly to him or
her, thereby not electing a Direct Rollover for all or a portion thereof.
11.2 SPOUSAL CONSENT. A Participant is required to obtain Spousal Consent
in order to receive a distribution under the Plan, except with regard to a
distribution made to a Participant without his or her consent.
11.3 PAYMENT FORM AND MEDIUM. Except to the extent otherwise provided by
Section 11.4, a married Participant's benefit shall be paid in the form of an
immediate qualified joint and 50% survivor annuity with the Participant's spouse
as the joint annuitant and a single Participant's or surviving spouse
Beneficiary's benefit shall be paid in the form of a single life annuity.
Notwithstanding, except to the extent otherwise provided by Section 11.4 and
subject to the requirements of Section 11.12, he or she may instead elect:
(a) a single lump sum, or
(b) a portion paid in a lump sum, and the remainder paid later, or
(c) periodic installments over a period not to exceed the life
expectancy of the Participant and his or her Beneficiary, or
(d) a single life annuity or a joint and 50% or 100% survivor
annuity.
Any annuity option permitted shall be provided through the purchase of a
non-transferable single premium contract from an insurance company which must
conform to
17
the terms of the Plan and which shall be distributed to the Participant or
Beneficiary in complete satisfaction of the benefit due.
Distributions (other than annuity contracts) shall be made in cash, or if a
Participant so elects, payment may be made in the form of whole shares of
Company Stock and cash in lieu of fractional shares to the extent invested in
the Company Stock Fund. With regard to the portion of a distribution
representing an Eligible Rollover Distribution, a Distributee may elect a Direct
Rollover for all or a portion of such amount.
11.4 DISTRIBUTION OF SMALL AMOUNTS. If after a Participant's employment
with all Related Companies ends, the Participant's vested Account balance is
$3,500 or less, and if at the time of any prior in-service withdrawal or
distribution the Participant's vested Account balance did not exceed $3,500, the
Participant's benefit shall be paid as a single lump sum as soon as
administratively feasible in accordance with procedures prescribed by the
Administrator.
11.5 SOURCE AND TIMING OF DISTRIBUTION FUNDING. A distribution to a
Participant shall be made solely from the assets of his or her own Account and
shall be based on the Account values as of the Trade Date the distribution is
processed. The available assets shall be determined first by Account type and
then within each Account used for funding a distribution, amounts shall first be
taken from the Sweep Account and then taken by Investment Fund in direct
proportion to the market value of the Participant's interest in each Investment
Fund as of the Trade Date on which the distribution is processed.
The distribution shall be funded on the Settlement Date following the Trade
Date as of which the distribution is processed. The Administrator shall direct
the Trustee to make payment as soon thereafter as administratively feasible.
11.6 DEEMED DISTRIBUTION. For purposes of Section 8.3, if at the time a
Participant's employment with all Related Companies has terminated, the
Participant's vested Account balance attributable to Accounts subject to vesting
as described in Section 8, is zero, his or her vested Account balance shall be
deemed distributed as of the Settlement Date following the Sweep Date on which
the Administrator has reported to the Trustee that the Participant's employment
with all Related Companies has terminated.
11.7 LATEST COMMENCEMENT PERMITTED. In addition to any other Plan
requirements and unless a Participant elects otherwise, his or her benefit
payments shall begin not later than 60 days after the end of the Plan Year in
which he or she attains his or her Normal Retirement Date or retires, whichever
is later. However, if the amount of the payment or the location of the
Participant (after a reasonable search) cannot be ascertained by that deadline,
payment shall be made no later than 60 days after the earliest
18
date on which such amount or location is ascertained but in no event later than
as described below. A Participant's failure to elect in such manner as
prescribed by the Administrator to have his or her vested Account balance paid
to him or her, shall be deemed an election by the Participant to defer his or
her distribution.
Benefit payments shall begin by the April 1 immediately following the end
of the calendar year in which the Participant attains age 70 1/2, whether or not
he or she is an Employee.
If benefit payments cannot begin at the time required because the location
of the Participant cannot be ascertained (after a reasonable search), the
Administrator may, at any time thereafter, treat such person's Account as
forfeited subject to the provisions of Section 15.5.
11.8 PAYMENT WITHIN LIFE EXPECTANCY. The Participant's payment election
must be consistent with the requirement of Code section 401(a)(9) that all
payments are to be completed within a period not to exceed the lives or the
joint and last survivor life expectancy of the Participant and his or her
Beneficiary. The life expectancies of a Participant and his or her Beneficiary,
if such Beneficiary is his or her spouse, may be recomputed annually.
11.9 INCIDENTAL BENEFIT RULE. The Participant's payment election must be
consistent with the requirement that, if the Participant's spouse is not his or
her sole primary Beneficiary, the minimum annual distribution for each calendar
year, beginning with the year in which he or she attains age 70 1/2, shall not
be less than the quotient obtained by dividing (a) the Participant's vested
Account balance as of the last Trade Date of the preceding year by (b) the
applicable divisor as determined under the incidental benefit requirements of
Code section 401(a)(9).
11.10 PAYMENT TO BENEFICIARY. Payment to a Beneficiary must either: (1)
be completed by the end of the calendar year that contains the fifth anniversary
of the Participant's death or (2) begin by the end of the calendar year that
contains the first anniversary of the Participant's death and be completed
within the period of the Beneficiary's life or life expectancy, except that:
(a) If the Participant dies after the April 1 immediately following
the end of the calendar year in which he or she attains age 70 1/2, payment to
his or her Beneficiary must be made at least as rapidly as provided in the
Participant's distribution election;
19
(b) If the surviving spouse is the Beneficiary, payments need not
begin until the end of the calendar year in which the Participant would have
attained age 70 1/2 and must be completed within the spouse's life or life
expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (1) before the April 1 immediately following the end of the
calendar year in which the Participant would have attained age 70 1/2 and (2)
before payments have begun to the spouse, the spouse shall be treated as the
Participant in applying these rules.
11.11 BENEFICIARY DESIGNATION. Each Participant may complete a
beneficiary designation form indicating the Beneficiary who is to receive the
Participant's remaining Plan interest at the time of his or her death. The
designation may be changed at any time. However, a Participant's spouse shall be
the sole primary Beneficiary unless the designation includes Spousal Consent for
another Beneficiary. If no proper designation is in effect at the time of a
Participant's death or if the Beneficiary does not survive the Participant, the
Beneficiary shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, (or if a child does
not survive the Participant, and that child leaves issue, the issue shall be
entitled to that child's share, by right of representation) or
(c) Participant's estate.
11.12 QJSA and QPSA Information and Elections. The following definitions,
information and election rules shall apply to any Participant who is eligible
for an annuity form of payment:
(a) Annuity Starting Date. The first day of the first period for
which an amount is payable as an annuity, or, in the case of a benefit not
payable in the form of an annuity, the first day on which all events have
occurred which entitle the Participant to such benefit.
(b) QJSA. A qualified joint and survivor annuity, meaning for a
married Participant, a form of benefit payment which is the actuarial equivalent
of the Participant's vested Account balance at the Annuity Starting Date,
payable to the Participant in monthly payments for life and providing that, if
the Participant's spouse survives him or her, monthly payments equal to 50% of
the amount payable to the Participant during his or her lifetime shall be paid
to the spouse for the remainder of such person's lifetime and for a single
Participant, a form of benefit payment which is the actuarial equivalent of the
Participant's vested Account balance at the Annuity Starting Date, payable to
the Participant in monthly payments for life.
20
(c) QPSA. A qualified pre-retirement survivor annuity, meaning
that upon the death of a Participant before the Annuity Starting Date, the
vested portion of the Participant's Account becomes payable to the surviving
spouse as a life annuity, unless Spousal Consent has been given to a different
Beneficiary or the surviving spouse chooses a different form of payment.
(d) QJSA INFORMATION TO A PARTICIPANT. No less than 30 and no more
than 90 days before the Annuity Starting Date, each Participant shall be given a
written explanation of (1) the terms and conditions of the QJSA, (2) the right
to make an election to waive this form of payment and choose an optional form of
payment and the effect of this election, (3) the right to revoke this election
and the effect of this revocation, and (4) the need for Spousal Consent.
(e) QJSA ELECTION. A Participant may elect, and such election
shall include Spousal Consent if married, at any time within the 90 day period
ending on the Annuity Starting Date, to (1) waive the right to receive the QJSA
and elect an optional form of payment, or (2) revoke or change any such
election.
(f) QPSA Beneficiary Information to a Participant. Upon becoming a
Participant, and with updates as needed to insure such information is accurate
and readily available to each Participant who is between the ages of 32 and 35,
each married Participant shall be given written information stating that (1) his
or her death benefit is payable to his or her surviving spouse, (2) he or she
may choose that the benefit be paid to a different Beneficiary, (3) he or she
has the right to revoke or change a prior designation and the effects of such
revocation or change, and (4) the need for Spousal Consent.
(g) QPSA BENEFICIARY DESIGNATION BY PARTICIPANT. A married
Participant may designate, with Spousal Consent, a non-spouse Beneficiary at any
time after the Participant has been given the information in the QPSA
Beneficiary Information to a Participant paragraph above and upon the earlier of
(1) the date the Participant has terminated employment, or (2) the beginning of
the Plan Year in which the Participant attains age 35.
(h) QPSA INFORMATION TO A SURVIVING SPOUSE. Each surviving spouse
shall be given a written explanation of (1) the terms and conditions of being
paid his or her Account balance in the form of a single life annuity, (2) the
right to make an election to waive this form of payment and choose an optional
form of payment and the effect of this election, and (3) the right to revoke
this election and the effect of this revocation.
(i) QPSA ELECTION BY SURVIVING SPOUSE. A surviving spouse may
elect, at any time up to the Annuity Starting Date, to (1) waive the right to
receive a single
21
life annuity and elect an optional form of payment, or (2) revoke or change any
such election.
12. MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
12.1 ANNUAL ADDITION DEFINED. Annual Addition means the sum of all amounts
allocated to the Participant's Account for a Plan Year. Amounts include
contributions (except for rollovers or transfers from another qualified plan),
forfeitures and, if the Participant is a Key Employee (pursuant to Section 13)
for the applicable or any prior Plan Year, medical benefits provided pursuant to
Code section 419A(d)(1). For purposes of this Section 12.1, Account also
includes a Participant's account in all other defined contribution plans
currently or previously maintained by any Related Company. The Plan Year refers
to the year to which the allocation pertains, regardless of when it was
allocated. The Plan Year shall be the Code section 415 limitation year.
12.2 MAXIMUM ANNUAL ADDITION. The Annual Addition to a Participant's
accounts under this Plan and any other defined contribution plan maintained by
any Related Company for any Plan Year shall not exceed the lesser of (1) 25% of
his or her Taxable Income or (2) $30,000 (as adjusted for the cost of living
pursuant to Code section 415(d)).
12.3 CORRECTING AN EXCESS ANNUAL ADDITION. Upon the discovery of an excess
Annual Addition to a Participant's Account (resulting from forfeitures,
allocations, reasonable error in determining Participant compensation or the
amount of elective contributions, or other facts and circumstances acceptable to
the Internal Revenue Service) the excess amount (adjusted to reflect investment
gains) shall be forfeited by the Participant and used as described in Section
8.3.
12.4 CORRECTING A MULTIPLE PLAN EXCESS. If a Participant, whose Account is
credited with an excess Annual Addition, received allocations to more than one
defined contribution plan, the excess shall be corrected by reducing the Annual
Addition to this Plan only after all possible reductions have been made to the
other defined contribution plans.
12.5 DEFINED BENEFIT FRACTION DEFINED. The fraction, for any Plan Year,
where the numerator is the "projected annual benefit," as defined below, and the
denominator is the greater of 125% of the "protected current accrued benefit,"
as defined below, or the normal limit which is the lesser of (1) 125% of the
maximum dollar limitation provided under Code section 415(b)(1)(A) for the Plan
Year or (2) 140% of the amount which may be taken into account under Code
section 415(b)(1)(B) for the Plan Year, where a Participant's:
22
(a) projected annual benefit is the annual benefit provided by the
Plan determined pursuant to Code section 415(e)(2)(A), and
(b) protected current accrued benefit in a defined-benefit plan in
existence (1) on July 1, 1982, shall be the accrued annual benefit provided for
under Public Law 97-248, section 235(g)(4), as amended, or (2) on May 6, 1986,
shall be the accrued annual benefit provided for under Public Law 99-514,
section 1106(i)(3).
12.6 DEFINED CONTRIBUTION FRACTION DEFINED. The fraction where the
numerator is the sum of the Participant's Annual Addition for each Plan Year to
date and the denominator is the sum of the "annual amounts" for each year in
which the Participant has performed service with a Related Company. The "annual
amount" for any Plan Year is the lesser of (1) 125% of the Code section
415(c)(1)(A) dollar limitation (determined without regard to subsection (c)(6))
in effect for the Plan Year and (2) 140% of the Code section 415(c)(1)(B) amount
in effect for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code section
415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248, section
235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).
12.7 COMBINED PLAN LIMITS AND CORRECTION. If a Participant has also
participated in a defined benefit plan maintained by a Related Company, the sum
of the Defined Benefit Fraction and the Defined Contribution Fraction for any
Plan Year may not exceed 1.0. If the combined fraction exceeds 1.0 for any Plan
Year, the Participant's benefit under any defined benefit plan (to the extent it
has not been distributed or used to purchase an annuity contract) shall be
limited so that the combined fraction does not exceed 1.0 before any defined
contribution limits shall be enforced.
13. TOP HEAVY RULES
13.1 TOP HEAVY DEFINITIONS. When capitalized, the following words and
phrases have the following meanings when used in this Section:
(a) AGGREGATION GROUP. The Aggregation Group is the group consisting
of each qualified plan of an Employer (and its Related Companies) (1) in which a
Key Employee is a participant or was a participant during the determination
period (regardless of whether such plan has terminated), or (2) which enables
another plan in the group to meet the requirements of Code sections 401(a)(4) or
410(b). The Employer may also treat any other qualified plan as part of the
group if the group would continue to meet the requirements of Code sections
401(a)(4) and 410(b) with such plan being taken into account.
23
(b) DETERMINATION DATE. The Determination Date is last Trade Date of
the preceding Plan Year or, in the case of the Plan's first year, the last Trade
Date of the first Plan Year.
(c) KEY EMPLOYEE. A Key Employee is a current or former Employee (or
his or her Beneficiary) who at any time during the five year period ending on
the Determination Date was:
(i) an officer of a Related Company whose Compensation (i)
exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and (ii)
places him within the following highest paid group of officers:
Number of Employees Number of
Not Excluded Under Code Highest Paid
Section 414(q)(8) fficers Included
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(ii) a more than 5% Owner,
(iii) a more than 1% Owner whose Compensation exceeds $150,000,
or
(iv) a more than 0.5% Owner who is among the 10 Employees owning
the largest interest in a Related Company and whose Compensation exceeds
the amount in effect under Code section 415(c)(1)(A).
(d) PLAN BENEFIT. Plan Benefit is the sum as of the Determination
Date of (1) an Employee's Account, (2) the present value of his or her other
accrued benefits provided by all qualified plans within the Aggregation Group,
and (3) the aggregate distributions made within the five year period ending on
such date. Plan Benefits shall exclude rollover contributions and plan to plan
transfers made after December 31, 1983 which are both employee initiated and
from a plan maintained by a non-related employer.
(e) TOP HEAVY. The Plan is Top Heavy if the Plan Benefits of Key
Employees account for more than 60% of the Plan Benefits of all Employees who
have
24
performed services at any time during the five year period ending on the
Determination Date. The Plan Benefits of Employees who were, but are no longer,
Key Employees (because they have not been an officer or Owner during the five
year period), are excluded in the determination.
13.2 SPECIAL CONTRIBUTIONS.
(a) Minimum Contribution Requirement. For each Plan Year in which the
Plan is Top Heavy, the Employer shall not allow any contributions (other than a
rollover contribution from a plan maintained by a non-related employer, if
otherwise permitted under the Plan) to be made by or on behalf of any Key
Employee unless the Employer makes a contribution on behalf of all Participants
who were Eligible Employees as of the last day of the Plan Year in an amount
equal to at least 3% of each such Participant's Taxable Income. The
Administrator shall remove any such contributions (including applicable
investment gain or loss) credited to a Key Employee's Account in violation of
the foregoing rule and return them to the Employer or Employee to the extent
permitted by the Limited Return of Contributions paragraph of Section 15.
(b) Overriding Minimum Benefit. Notwithstanding, contributions shall
be permitted on behalf of Key Employees if the Employer also maintains a defined
benefit plan which automatically provides a benefit which satisfies the Code
section 416(c)(1) minimum benefit requirements, including the adjustment
provided in Code section 416(h)(2)(A), if applicable. If this Plan is part of an
aggregation group in which a Key Employee is receiving a benefit and no minimum
is provided in any other plan, a minimum contribution of at least 3% of Taxable
Income shall be provided to the Participants specified in the preceding
paragraph. In addition, the Employer may offset a defined benefit minimum by
contributions made to this Plan.
13.3 ADJUSTMENT TO COMBINED LIMITS FOR DIFFERENT PLANS. For each Plan
Year in which the Plan is Top Heavy, 100% shall be substituted for 125% in
determining the Defined Benefit Fraction and the Defined Contribution Fraction.
14. Plan Administration
14.1 PLAN DELINEATES AUTHORITY AND RESPONSIBILITY. Plan fiduciaries
include the Company, the Administrator, the Committee and/or the Trustee, as
applicable, whose specific duties are delineated in this Plan and in the Trust.
In addition, Plan fiduciaries also include any other person to whom fiduciary
duties or responsibility is delegated with respect to the Plan. Any person or
group may serve in more than one fiduciary capacity with respect to the Plan. To
the extent permitted under ERISA section 405, no fiduciary shall be liable for a
breach by another fiduciary.
14.2 FIDUCIARY STANDARDS. Each fiduciary shall:
25
(a) discharge his or her duties in accordance with this Plan to the
extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that a
prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying reasonable expenses of
administering the Plan;
(d) diversify Plan investments, to the extent such fiduciary is
responsible for directing the investment of Plan assets, so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
14.3 COMPANY IS ERISA PLAN ADMINISTRATOR. The Company is the plan
administrator, within the meaning of ERISA section 3(16), which is responsible
for compliance with all reporting and disclosure requirements, except those that
are explicitly the responsibility of the Trustee under applicable law. The
Administrator and/or Committee shall have any necessary authority to carry out
such functions through the actions of the Administrator, duly appointed officers
of the Company, and/or the Committee.
14.4 ADMINISTRATOR DUTIES. The Administrator shall have the discretionary
authority to construe this Plan and to do all things necessary or convenient to
effect the intent and purposes thereof, whether or not such powers are
specifically set forth in this Plan. Actions taken in good faith by the
Administrator shall be conclusive and binding on all interested parties, and
shall be given the maximum possible deference allowed by law. In addition to
the duties listed elsewhere in this Plan, the Administrator's authority shall
include, but not be limited to, the discretionary authority to:
(a) determine who is eligible to participate, the allocation of
Contributions and the eligibility for distributions;
(b) provide each Participant with a summary plan description no later
than 90 days after he or she has become a Participant (or such other period
permitted under ERISA section 104(b)(1)), as well as informing each Participant
of any material modification to the Plan in a timely manner;
(c) make a copy of the following documents available to Participants
during normal work hours: this Plan, (including subsequent amendments), the
Trust, all
26
annual and interim reports of the Trustee related to the entire Plan, the latest
annual report and the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's interest based upon
such proof and evidence as it deems necessary;
(e) establish and review at least annually a funding policy bearing
in mind both the short-run and long-run needs and goals of the Plan and to the
extent Participants may direct their own investments, the funding policy shall
focus on which Investment Funds are available for Participants to use; and
(f) adjudicate claims pursuant to the claims procedure described in
Section 15.
14.5 ADVISORS MAY BE RETAINED. The Administrator may retain such agents
and advisors (including attorneys, accountants, actuaries, consultants, record
keepers, investment counsel and administrative assistants) as it considers
necessary to assist it in the performance of its duties. The Administrator shall
also comply with the bonding requirements of ERISA section 412.
14.6 DELEGATION OF ADMINISTRATOR DUTIES. The Company, as Administrator of
the Plan, has appointed a Committee to administer the Plan on its behalf. Any
Committee member appointed by the Company shall serve at the pleasure of the
Company, but may resign by written notice to the Company. Committee members
shall serve without compensation from the Plan for such services. Except to the
extent that the Company otherwise provides, any delegation of duties to a
Committee shall carry with it the full discretionary authority of the
Administrator to complete such duties.
14.7 COMMITTEE OPERATING RULES.
(a) ACTIONS OF MAJORITY. Any act delegated by the Company to the
Committee may be done by a majority of its members. The majority may be
expressed by a vote at a meeting or in writing without a meeting, and a majority
action shall be equivalent to an action of all Committee members.
(b) MEETINGS. The Committee shall hold meetings upon such notice,
place and times as it determines necessary to conduct its functions properly.
15. RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
15.1 PLAN DOES NOT AFFECT EMPLOYMENT RIGHTS. The Plan does not provide any
employment rights to any Employee. The Employer expressly reserves the right to
27
discharge an Employee at any time, with or without cause, without regard to the
effect such discharge would have upon the Employee's interest in the Plan.
15.2 LIMITED RETURN OF CONTRIBUTIONS. Except as provided in this
paragraph, (1) Plan assets shall not revert to the Employer nor be diverted for
any purpose other than the exclusive benefit of Participants or their
Beneficiaries; and (2) a Participant's vested interest shall not be subject to
divestment. As provided in ERISA section 403(c)(2), the actual amount of a
Contribution made by the Employer (or the current value of the Contribution if a
net loss has occurred) may revert to the Employer if:
(a) such Contribution is made by reason of a mistake of fact;
(b) initial qualification of the Plan under Code section 401(a) is
not received and a request for such qualification is made within the time
prescribed under Code section 401(b) (the existence of and Contributions under
the Plan are hereby conditioned upon such qualification); or
(c) such Contribution is not deductible under Code section 404 (such
Contributions are hereby conditioned upon such deductibility) in the
taxable year of the Employer for which the Contribution is made.
The reversion to the Employer must be made (if at all) within one year of the
mistaken payment of the Contribution, the date of denial of qualification, or
the date of disallowance of deduction, as the case may be. A Participant shall
have no rights under the Plan with respect to any such reversion.
15.3 ASSIGNMENT AND ALIENATION. As provided by Code section 401(a)(13) and
to the extent not otherwise required by law, no benefit provided by the Plan may
be anticipated, assigned or alienated, except to create, assign or recognize a
right to any benefit with respect to a Participant pursuant to a QDRO.
15.4 FACILITY OF PAYMENT. If a Plan benefit is due to be paid to a minor
or if the Administrator reasonably believes that any payee is legally incapable
of giving a valid receipt and discharge for any payment due him or her, the
Administrator shall have the payment of the benefit, or any part thereof, made
to the person (or persons or institution) whom it reasonably believes is caring
for or supporting the payee, unless it has received due notice of claim therefor
from a duly appointed guardian or conservator of the payee. Any payment shall to
the extent thereof, be a complete discharge of any liability under the Plan to
the payee.
15.5 REALLOCATION OF LOST PARTICIPANT'S ACCOUNTS. If the Administrator
cannot locate a person entitled to payment of a Plan benefit after a reasonable
search, the Administrator may at any time thereafter treat such person's Account
as forfeited and use
28
such amount as described in Section 8.3. If such person subsequently presents
the Administrator with a valid claim for the benefit, such person shall be paid
the amount treated as forfeited, plus the interest that would have been earned
in the Sweep Account to the date of determination. The Administrator shall pay
the amount through an additional amount contributed by the Employer or direct
the Trustee to pay the amount from the Forfeiture Account.
15.6 CLAIMS PROCEDURE.
(a) RIGHT TO MAKE CLAIM. An interested party who disagrees with the
Administrator's determination of his or her right to Plan benefits must submit a
written claim and exhaust this claim procedure before legal recourse of any type
is sought. The claim must include the important issues the interested party
believes support the claim. The Administrator, pursuant to the authority
provided in this Plan, shall either approve or deny the claim.
(b) PROCESS FOR DENYING A CLAIM. The Administrator's partial or
complete denial of an initial claim must include an understandable, written
response covering (1) the specific reasons why the claim is being denied (with
reference to the pertinent Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) APPEAL OF DENIAL AND FINAL REVIEW. The interested party may make
a written appeal of the Administrator's initial decision, and the Administrator
shall respond in the same manner and form as prescribed for denying a claim
initially.
(d) TIME FRAME. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the following timetable:
Days to Respond
Action from Last Action
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum response time for
its initial and final review if it provides an explanation within the normal
period of why an extension is needed and when its decision shall be forthcoming.
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15.7 CONSTRUCTION. Headings are included for reading convenience. The text
shall control if any ambiguity or inconsistency exists between the headings and
the text. The singular and plural shall be interchanged wherever appropriate.
References to Participant shall include Beneficiary when appropriate and even if
not otherwise already expressly stated.
15.8 JURISDICTION AND SEVERABILITY. The Plan shall be construed, regulated
and administered under ERISA and other applicable federal laws and, where not
otherwise preempted, by the laws of the State of California. If any provision of
this Plan shall become invalid or unenforceable, that fact shall not affect the
validity or enforceability of any other provision of this Plan. All provisions
of this Plan shall be so construed as to render them valid and enforceable in
accordance with their intent.
16. AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
16.1 AMENDMENT. The Company reserves the right to amend this Plan at any
time, to any extent and in any manner it may deem necessary or appropriate. The
Company shall be responsible for adopting any amendments necessary to maintain
the qualified status of this Plan under Code sections 401(a) and 501(a). If the
Committee is acting as the Administrator in accordance with Section 14.6, it
shall have the authority to adopt Plan amendments which have no substantial
adverse financial impact upon any Employer or the Plan. All interested parties
shall be bound by any amendment, provided that no amendment shall:
(a) become effective unless it has been adopted in accordance with
the procedures set forth in Section 16.5;
(b) except to the extent permissible under ERISA and the Code, make
it possible for any portion of the Plan assets to revert to an Employer or to be
used for, or diverted to, any purpose other than for the exclusive benefit of
Participants and Beneficiaries entitled to Plan benefits and to defray
reasonable expenses of administering the Plan; nor
(c) decrease the rights of any Employee to benefits accrued
(including the elimination of optional forms of benefits) to the date on which
the amendment is adopted, or if later, the date upon which the amendment becomes
effective, except to the extent permitted under ERISA and the Code.
16.2 MERGER. This Plan may not be merged or consolidated with, nor may its
assets or liabilities be transferred to, another plan unless each Participant
and Beneficiary would, if the resulting plan were then terminated, receive a
benefit just after the merger,
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consolidation or transfer which is at least equal to the benefit which would be
received if either plan had terminated just before such event.
16.3 DIVESTITURES. In the event of a sale by an Employer which is a
corporation of: (1) substantially all of the Employer's assets used in a trade
or business to an unrelated corporation, or (2) a sale of such Employer's
interest in a subsidiary to an unrelated entity or individual, lump sum
distributions shall be permitted from the Plan, except as provided below, to
Participants with respect to Employees who continue employment with the
corporation acquiring such assets or who continue employment with such
subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the purchaser
agrees, in connection with the sale, to be substituted as the Company as the
sponsor of the Plan or to accept a transfer of the assets and liabilities
representing the Participants' benefits into a plan of the purchaser or a plan
to be established by the purchaser.
16.4 PLAN TERMINATION. The Company may, at any time and for any reason,
terminate the Plan in accordance with the procedures set forth in Section 16.5,
or completely discontinue contributions. Upon either of these events, or in the
event of a partial termination of the Plan within the meaning of Code section
411(d)(3), the Accounts of each affected Employee who has not yet incurred a
Break in Service shall be fully vested. Lump sum distributions shall be made in
accordance with the terms of the Plan as in effect at the time of the Plan's
termination or as thereafter amended provided that a post-termination amendment
shall not be effective to the extent that it violates Section 16.1 unless it is
required in order to maintain the qualified status of the Plan upon its
termination. The Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated and distributed.
16.5 AMENDMENT AND TERMINATION PROCEDURES. The following procedural
requirements shall govern the adoption of any amendment or termination (a
"Change") of this Plan:
(a) The Company may adopt any Change by action of its board of
directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance with
Section 14.6, may adopt any amendment within the scope of its authority provided
under Section 16.1 and in the manner specified in Section 14.7(a).
(c) Any Change must be (1) set forth in writing, and (2) signed and
dated by an authorized officer of the Company or, in the case of an amendment
adopted by the Committee, at least one of its members.
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(d) If the effective date of any Change is not specified in the
document setting forth the Change, it shall be effective as of the date it is
signed by the last person whose signature is required under clause (2) above,
except to the extent that another effective date is necessary to maintain the
qualified status of this Plan under Code sections 401(a) and 501(a).
16.6 TERMINATION OF EMPLOYER'S PARTICIPATION. Any Employer may, at any
time and for any reason, terminate its Plan participation by action of its board
of directors in accordance with its normal procedures. Written notice of such
action shall be signed and dated by an authorized officer of the Employer and
delivered to the Company. If the effective date of such action is not specified,
it shall be effective on, or as soon as reasonably practicable after, the date
of delivery. Upon the Employer's request, the Company may instruct the Trustee
and Administrator to spin off all affected Accounts and underlying assets into a
separate qualified plan under which the Employer shall assume the powers and
duties of the Company. Alternatively, the Company may treat the event as a
partial termination described above or continue to maintain the Accounts under
the Plan.
APPENDIX A
INVESTMENT FUNDS
I. Investment Funds Available to Senior Participants
The Investment Funds offered under the Plan to Senior Participants as of
the Effective Date include this set of daily valued funds:
Category Funds
Income U.S. Treasury Allocation
Equity Company Stock
S&P 500 Stock
Aim Constellation
Combination LifePath
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APPENDIX B
PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as follows:
(1) Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants, except that the Employer shall pay the fees related to the Company
Stock Fund. These are paid by the Employer on a quarterly basis.
Recordkeeping Fees: These are paid by the Employer on a quarterly basis, except
that with regard to a Participant who is no longer an Employee or a Beneficiary,
these are paid by the Participant and are assessed monthly and billed/collected
from Accountsquarterly.
Investment Fund Election Changes: For each Investment Fund election change by
Senior Participant, in excess of 4 changes per year, a $10 fee shall be assessed
and billed/collected quarterly from the Senior Participant's Account.
Periodic Installment Payment Fees: A $3.00 per check fee shall be assessed and
billed/collected quarterly from the Participant's Account.
Additional Fees Paid by Employer: All other Plan related fees and expenses
shall be paid by the Employer. To the extent that the Administrator later
elects that any such fees shall be borne by Participants, estimates of the fees
shall be determined and reconciled, at least annually, and the fees shall be
assessed monthly and billed/collected from Accounts quarterly.
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