EXHIBIT 10.30
Silicon Valley Bank
Money Purchase Pension
Plan and Trust Agreement
As Amended and Restated
Effective January 1, 1996
Silicon Valley Bank Money Purchase Pension Plan and Trust
As Amended and Restated Effective January 1, 1996
Silicon Valley Bank previously established 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 provisions of this Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Silicon Valley Bank and
BZW Barclays Global Investors, National Association. The Trust is intended to
be tax exempt as described under Code section 501(a).
The Silicon Valley Bank Money Purchase Pension Plan and Trust, as set forth in
this document, is hereby amended and restated effective as of January 1, 1996.
Date: May 28, 1996 Silicon Valley Bank
By: /s/ Glen G. Simmons
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Title: Executive V.P. Human Resources/
Administration
The trust agreement set forth in those provisions of this Plan and Trust which
relate to the Trustee is hereby executed.
Date: May 30, 1996 BZW Barclays Global Investors, National
Association
By: /s/ Dolores Upton
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Title: Principal
Date: May 30, 1996 BZW Barclays Global Investors, National
Association
By: /s/ Lisa M. Maloney
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Title: Principal
TABLE OF CONTENTS
1 DEFINITIONS............................................................ 1
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2 ELIGIBILITY............................................................ 8
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2.1 Eligibility..................................................... 8
2.2 Ineligible Employees............................................ 8
2.3 Ineligible or Former Participants............................... 8
3 PARTICIPANT CONTRIBUTIONS.............................................. 9
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4 TRANSFERS FROM AND TO OTHER QUALIFIED PLANS............................ 10
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4.1 Transfers From and To Other Qualified Plans..................... 10
5 EMPLOYER CONTRIBUTIONS................................................. 11
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5.1 Money Purchase Pension Contributions............................ 11
6 ACCOUNTING............................................................. 12
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6.1 Individual Participant Accounting............................... 12
6.2 Sweep Account is Transaction Account............................ 12
6.3 Trade Date Accounting and Investment Cycle...................... 12
6.4 Accounting for Investment Funds................................. 12
6.5 Payment of Fees and Expenses.................................... 12
6.6 Error Correction................................................ 13
6.7 Participant Statements.......................................... 14
6.8 Special Accounting During Conversion Period..................... 14
6.9 Accounts for QDRO Beneficiaries................................. 14
7 INVESTMENT AUTHORITY AND INVESTMENT FUNDS.............................. 15
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7.1 General Investment Authority.................................... 15
7.2 Special Investment Authority Provisions Related to Senior
Participants.................................................... 15
8 VESTING & FORFEITURES.................................................. 16
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8.1 Full Vesting Upon Certain Events................................ 16
8.2 Vesting Schedule................................................ 16
8.3 Forfeitures..................................................... 16
8.4 Rehired Employees............................................... 16
9 PARTICIPANT LOANS...................................................... 18
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10 IN-SERVICE WITHDRAWALS................................................. 19
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11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW............... 20
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11.1 Benefit Information, Notices and Election....................... 20
11.2 Spousal Consent................................................. 20
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11.3 Payment Form and Medium......................................... 20
11.4 Distribution of Small Amounts................................... 21
11.5 Source and Timing of Distribution Funding....................... 21
11.6 Deemed Distribution............................................. 22
11.7 Latest Commencement Permitted................................... 22
11.8 Payment Within Life Expectancy.................................. 22
11.9 Incidental Benefit Rule......................................... 23
11.10 Payment to Beneficiary.......................................... 23
11.11 Beneficiary Designation......................................... 23
11.12 QJSA and QPSA Information and Elections......................... 24
12 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS........................... 26
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12.1 "Annual Addition" Defined....................................... 26
12.2 Maximum Annual Addition......................................... 26
12.3 Correcting an Excess Annual Addition............................ 26
12.4 Correcting a Multiple Plan Excess............................... 26
12.5 "Defined Benefit Fraction" Defined.............................. 26
12.6 "Defined Contribution Fraction" Defined......................... 27
12.7 Combined Plan Limits and Correction............................. 27
13 TOP HEAVY RULES........................................................ 28
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13.1 Top Heavy Definitions........................................... 28
13.2 Special Contributions........................................... 29
13.3 Adjustment to Combined Limits for Different Plans............... 30
14 PLAN ADMINISTRATION.................................................... 31
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14.1 Plan Delineates Authority and Responsibility.................... 31
14.2 Fiduciary Standards............................................. 31
14.3 Company is ERISA Plan Administrator............................. 31
14.4 Administrator Duties............................................ 32
14.5 Advisors May be Retained........................................ 32
14.6 Delegation of Administrator Duties.............................. 33
14.7 Committee Operating Rules....................................... 33
15 MANAGEMENT OF INVESTMENTS.............................................. 34
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15.1 Trust Agreement................................................. 34
15.2 Investment Funds................................................ 34
15.3 Authority to Hold Cash.......................................... 35
15.4 Trustee to Act Upon Instructions................................ 35
15.5 Administrator Has Right to Vote Registered Investment Company
Shares.......................................................... 35
15.6 Custom Fund Investment Management............................... 35
15.7 Master Custom Fund.............................................. 36
15.8 Authority to Segregate Assets................................... 36
15.9 Maximum Permitted Investment in Company Stock................... 36
15.10 Participants Have Right to Vote and Tender Company Stock........ 37
15.11 Registration and Disclosure for Company Stock................... 37
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16 TRUST ADMINISTRATION................................................... 38
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16.1 Trustee to Construe Trust....................................... 38
16.2 Trustee To Act As Owner of Trust Assets......................... 38
16.3 United States Indicia of Ownership.............................. 38
16.4 Tax Withholding and Payment..................................... 39
16.5 Trust Accounting................................................ 39
16.6 Valuation of Certain Assets..................................... 39
16.7 Legal Counsel................................................... 40
16.8 Fees and Expenses............................................... 40
16.9 Trustee Duties and Limitations.................................. 40
17 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION...................... 41
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17.1 Plan Does Not Affect Employment Rights.......................... 41
17.2 Limited Return of Contributions................................. 41
17.3 Assignment and Alienation....................................... 41
17.4 Facility of Payment............................................. 41
17.5 Reallocation of Lost Participant's Accounts..................... 42
17.6 Claims Procedure................................................ 42
17.7 Construction.................................................... 43
17.8 Jurisdiction and Severability................................... 43
17.9 Indemnification by Employer..................................... 43
18 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION........................ 44
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18.1 Amendment....................................................... 44
18.2 Merger.......................................................... 44
18.3 Divestitures.................................................... 44
18.4 Plan Termination................................................ 45
18.5 Amendment and Termination Procedures............................ 45
18.6 Termination of Employer's Participation......................... 46
18.7 Replacement of the Trustee...................................... 46
18.8 Final Settlement and Accounting of Trustee...................... 46
APPENDIX A - INVESTMENT FUNDS............................................... 47
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES.............................. 48
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1 DEFINITIONS
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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:
(a) "Money Purchase Pension Account". An account created to hold
Money Purchase Pension Contributions.
1.2 "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.
1.3 "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.
1.4 "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.
1.5 "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.
1.6 "Committee". If applicable, the committee which has been appointed
by the Company to administer the Plan in accordance with Section
14.6.
1.7 "Company". Silicon Valley Bank or any successor by merger, purchase
or otherwise.
1.8 "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.
1.9 "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,
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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.
1.10 "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:
(a) "Money Purchase Pension Contribution". An amount contributed
by the Employer on an eligible Participant's behalf and
allocated on a pay based formula.
1.11 "Conversion Period". The period of converting the prior accounting
system of any plan and trust which is merged into this Plan and
Trust subsequent to the Effective Date, to the accounting system
described in Section 6.
1.12 "Direct Rollover". An Eligible Rollover Distribution that is paid
directly to an Eligible Retirement Plan for the benefit of a
Distributee.
1.13 "Disability". A Participant's mental or physical disability
resulting in termination of employment as evidenced by presentation
of medical evidence satisfactory to the Administrator.
1.14 "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.
1.15 "Early Retirement Date". The date of a Participant's 55th birthday
and completion of 10 Years of Vesting Service.
1.16 "Effective Date". The date upon which the provisions of this
document become effective. This date is January 1, 1996, unless
stated otherwise. In general, the provisions of this document only
apply to Participants who are Employees on or after the Effective
Date. However, investment and distribution provisions apply to all
Participants with Account balances to be invested or distributed
after the Effective Date.
1.17 "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;
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(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.
1.18 "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 regard to an Eligible Rollover
Distribution to a surviving spouse, an Eligible Retirement Plan is
an individual retirement account or individual retirement annuity.
1.19 "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).
1.20 "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.
1.21 "Employer". The Company and any Related Company which adopts this
Plan with the approval of the Company.
1.22 "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.
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1.23 "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 Trust and as
directed by the Administrator.
1.24 "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 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.
1.25 "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.
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1.26 "Investment Fund" or "Fund". An investment fund as described in
Section 15.2.
1.27 "Leased Employee". An individual who is deemed to be an employee of
any Related Company as provided in Code section 414(n) or (o).
1.28 "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
(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.
1.29 "Normal Retirement Date". The date of a Participant's 62nd
birthday.
1.30 "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).
1.31 "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).
1.32 "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.
1.33 "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 excluding 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.
1.34 "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,
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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.
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.
1.35 "Plan". The Silicon Valley Bank Money Purchase Pension Plan set
forth in this document, as from time to time amended.
1.36 "Plan Year". The annual accounting period of the Plan and Trust
which ends on each December 31.
1.37 "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).
1.38 "Reduction in Force". An Employer sponsored program developed to
reduce force on a permanent basis.
1.39 "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)".
1.40 "Senior Participant". A Participant who is age 55 or over.
1.41 "Settlement Date". For each Trade Date, the Trustee's next business
day.
1.42 "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
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designation that required Spousal Consent at any time before
payments begin. Spousal Consent also 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.
1.43 "Sweep Account". The subsidiary Account for each Participant
through which all transactions are processed, which is invested in
interest bearing deposits of the Trustee.
1.44 "Sweep Date". The cut off date and time for receiving instructions
for transactions to be processed on the next Trade Date.
1.45 "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).
1.46 "Trade Date". Each day the Investment Funds are valued, which is
normally every day the assets of such Funds are traded.
1.47 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. 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.
1.48 "Trustee". BZW Barclays Global Investors, National Association.
1.49 "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.
Years of Vesting Service shall include service credited prior to
January 1, 1995.
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2 ELIGIBILITY
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2.1 Eligibility
All Participants as of January 1, 1996 shall continue their
eligibility to participate. Each other Eligible Employee shall
become a Participant 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.
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3 PARTICIPANT CONTRIBUTIONS
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Participant Contributions are not permitted under the Plan.
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4 TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
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4.1 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive 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 should not be directed 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 Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable; or
(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 by the Trustee.
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5 EMPLOYER CONTRIBUTIONS
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5.1 Money Purchase Pension Contributions
(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.
(b) Allocation Method. The Money Purchase Pension Contribution for
each period, shall be equal to 5% of each eligible
Participant's Pay (including Forfeiture Account amounts
applied as Money Purchase Pension Contributions).
(c) Timing, Medium and Posting. The Employer shall make each
period's Money Purchase Pension Contribution in cash 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. The
Trustee shall post such amounts to each Participant's Money
Purchase Pension Account once the total Contribution received
has been balanced against the specific amount to be credited
to each Participant's Money Purchase Pension Account.
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6 ACCOUNTING
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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 Trustee is responsible for determining the share values of each
Investment Fund as of each Trade Date. To the extent an Investment
Fund is comprised of collective investment funds of the Trustee, or
any other fiduciary to the Plan, the share values shall be
determined in accordance with the rules governing such collective
investment funds, which are incorporated herein by reference. All
other share values shall be determined by the Trustee. 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
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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.
(b) Transaction: Transaction fees and expenses, may include but
are not 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 and Trust.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days, from 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,
or by the Trustee to the extent the error or omission is
attributable to actions or inactions of the Trustee, 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.
13
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 and Trustee may use any reasonable accounting
methods in performing their respective 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.
(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.
14
7 INVESTMENT AUTHORITY AND INVESTMENT FUNDS
-----------------------------------------
7.1 General Investment Authority
The Administrator shall be responsible for directing the investment
of all Trust 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 Trust 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, subject
to the terms and conditions agreed to with the Trustee.
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 and Trustee. 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, Trust 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, subject to the terms and conditions agreed to
with the Trustee. A Senior Participant may change his or her
investment election at any time in accordance with the procedures
established by the Administrator and Trustee. Investment elections
received by the Trustee 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.
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, and as agreed to by the Trustee, without the necessity of
amending this Plan and Trust.
15
8 VESTING & 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, which shall be invested
in interest bearing deposits of the Trustee. Forfeiture Account
amounts shall be utilized to restore Accounts, to pay Plan fees and
expenses at the discretion of the Administrator and to reduce Money
Purchase Pension Contributions as directed by the Administrator.
8.4 Rehired Employees
(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.
16
(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 plus D) minus D
where:
V% = current vested percentage
AB = current account balance
D = amount previously distributed
17
9 PARTICIPANT LOANS
-----------------
Loans to Participants from the Plan are not permitted.
18
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.
19
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 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.
A distribution may commence less than 30 days, but more than seven
days if such distribution is one to which Code sections 401(a)(11)
and 417 apply, 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;
(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; and
(c) if such distribution is one to which Code sections 401(a)(11)
and 417 apply, the Participant's election includes Spousal
Consent.
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
20
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 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.
21
The distribution shall be funded on the Settlement Date following
the Trade Date as of which the distribution is processed. The
Trustee shall 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 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 17.5.
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.
22
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;
(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,
23
(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 all Participants:
(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. Such date shall be a date no
earlier than the expiration of the seven-day period that
commences the day after the information described in the QJSA
Information to a Participant paragraph below is provided to
the Participant.
(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.
(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 more than 90 days before
the Annuity Starting Date, each Participant who is eligible
for an annuity form of payment shall be given a written
explanation of (1) the terms and conditions of the QJSA, (2)
the right to a period of at least 30 days after receipt of the
written explanation 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.
24
(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 affected
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 is no longer an Employee, or (2) the
beginning of the Plan Year in which the Participant attains
age 35. A Participant who has been given the information in
the QPSA Beneficiary Information to a Participant paragraph
above may, prior to the time described in the preceding
sentence, make a special qualified election to designate, with
Spousal Consent, a non-spouse Beneficiary. Such special
qualified designation shall become invalid at the beginning of
the Plan Year in which the Participant attains age 35 and a
new designation, with Spousal Consent, shall be necessary.
(h) QPSA Information to a Surviving Spouse. Each surviving spouse
who is eligible for an annuity form of payment 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 life annuity and elect an
optional form of payment, or (2) revoke or change any such
election.
25
12 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
--------------------------------------------
12.1 "Annual Addition" Defined
The 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:
26
(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.
27
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.
(b) "Determination Date". The Determination Date is the 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:
(1) 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) OFFICERS 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
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds $150,000,
or
28
(4) 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". The 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 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 17.
(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.
29
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.
30
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 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:
(a) discharge his or her duties in accordance with this Plan and
Trust 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.
31
14.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe this Plan and Trust, other than the provisions which
relate to the Trustee, 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 and Trust. 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 and Trust, 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 and Trust
(including subsequent amendments), all 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 17.
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.
32
14.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a
Committee to administer the Plan on its behalf. The Company shall
provide the Trustee with the names and specimen signatures of any
persons authorized to serve as Committee members and act as or 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.
(c) Reliance by Trustee. The Committee may authorize one or more
of its members to execute documents on its behalf and may
authorize one or more of its members or other individuals who
are not members to give written direction to the Trustee in
the performance of its duties. The Committee shall provide
such authorization in writing to the Trustee with the name and
specimen signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and rely upon
it until notified in writing that the Committee has revoked
the authorization to give such direction. The Trustee shall
not be deemed to be on notice of any change in the membership
of the Committee, parties authorized to direct the Trustee in
the performance of its duties, or the duties delegated to and
by the Committee until notified in writing.
33
15 MANAGEMENT OF INVESTMENTS
-------------------------
15.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of this Plan and Trust which
relate to the Trustee, for use in providing Plan benefits and
paying Plan fees and expenses not paid directly by the Employer.
Plan benefits shall be drawn solely from the Trust and paid by the
Trustee as directed by the Administrator. Notwithstanding, the
Administrator may appoint, with the approval of the Trustee,
another trustee to hold and administer Plan assets which do not
meet the requirements of Section 15.2.
15.2 Investment Funds
The Administrator is hereby granted authority to direct the Trustee
to invest Trust assets in one or more Investment Funds. The number
and composition of Investment Funds may be changed from time to
time, without the necessity of amending this Plan and Trust. The
Trustee may establish reasonable limits on the number of Investment
Funds as well as the acceptable assets for any such Investment
Fund. Each of the Investment Funds may be comprised of any of the
following:
(a) shares of a registered investment company, whether or not the
Trustee or any of its affiliates is an advisor to, or other
service provider to, such company;
(b) collective investment funds maintained by the Trustee, or any
other fiduciary to the Plan, which are available for
investment by trusts which are qualified under Code sections
401(a) and 501(a);
(c) individual equity and fixed income securities which are
readily tradeable on the open market;
(d) guaranteed investment contracts issued by a bank or insurance
company;
(e) interest bearing deposits of the Trustee; and
(f) Company Stock.
Any Investment Fund assets invested in a collective investment
fund, shall be subject to all the provisions of the instruments
establishing and governing such fund. These instruments, including
any subsequent amendments, are incorporated herein by reference.
34
15.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient deposit or
money market type assets in each Investment Fund to handle the
Fund's liquidity and disbursement needs. Each Participant's and
Beneficiary's Sweep Account, which is used to hold assets pending
investment or disbursement, shall consist of interest bearing
deposits of the Trustee.
15.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are
received from the Administrator, Participants, or Beneficiaries.
Such instructions shall remain in effect until changed by the
Administrator, Participants or Beneficiaries.
15.5 Administrator Has Right to Vote Registered Investment Company
Shares
The Administrator shall be entitled to vote proxies or exercise any
shareholder rights relating to shares held on behalf of the Plan in
a registered investment company. Notwithstanding, the authority to
vote proxies and exercise shareholder rights related to such shares
held in a Custom Fund is vested as provided otherwise in Section
15.
15.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee,
an investment manager for any Investment Fund established by the
Trustee solely for Participants of this Plan and, subject to
Section 15.7, any other qualified plan of the Company or a Related
Company (a "Custom Fund"). The investment manager may be the
Administrator, Trustee or an investment manager pursuant to ERISA
section 3(38). The Administrator shall advise the Trustee in
writing of the appointment of an investment manager and shall cause
the investment manager to acknowledge to the Trustee in writing
that the investment manager is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee,
shall be established for a Custom Fund. If a Custom Fund
consists solely of collective investment funds or shares of a
registered investment company (and sufficient deposit or money
market type assets to handle the Fund's liquidity and
disbursement needs), its underlying instruments shall
constitute the guidelines.
(b) Authority of Investment Manager. The investment manager of a
Custom Fund shall have the authority to vote or execute
proxies,
35
exercise shareholder rights, manage, acquire, and dispose of
Trust assets. Notwithstanding, the authority to vote proxies
and exercise shareholder rights related to shares of Company
Stock held in a Custom Fund is vested as provided otherwise in
Section 15.
(c) Custody and Trade Settlement. Unless otherwise agreed to by
the Trustee, the Trustee shall maintain custody of all Custom
Fund assets and be responsible for the settlement of all
Custom Fund trades. For purposes of this section, shares of a
collective investment fund, shares of a registered investment
company and guaranteed investment contracts issued by a bank
or insurance company, shall be regarded as the Custom Fund
assets instead of the underlying assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the Administrator
nor the Trustee shall be obligated to invest or otherwise
manage any Custom Fund assets for which the Trustee or
Administrator is not the investment manager nor shall the
Administrator or Trustee be liable for acts or omissions with
regard to the investment of such assets except to the extent
required by ERISA.
15.7 Master Custom Fund
The Trustee may establish, at the direction of the Company, a
single Custom Fund (a "Master Custom Fund"), for the benefit of
this Plan and any other qualified plan of the Company or a Related
Company for which the Trustee acts as trustee pursuant to a plan
and trust document that contains a provision substantially
identical to this provision. The assets of this Plan, to the
extent invested in the Master Custom Fund, shall consist only of
that percentage of the assets of the Master Custom Fund represented
by the shares held by this Plan.
15.8 Authority to Segregate Assets
The Company may direct the Trustee to split an Investment Fund into
two or more funds in the event any assets in the Fund are illiquid
or the value is not readily determinable. In the event of such
segregation, the Company shall give instructions to the Trustee on
what value to use for the split-off assets, and the Trustee shall
not be responsible for confirming such value.
15.9 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund, the Fund shall be
comprised of Company Stock and sufficient deposit or money market
type assets to handle the Fund's liquidity and disbursement needs.
The Fund may be as large as necessary to comply with the
Administrator's and a Senior Participant's investment direction to
invest Trust assets in the Company Stock Fund.
36
15.10 Participants Have Right to Vote and Tender Company Stock
Each Participant or Beneficiary shall be entitled to instruct the
Trustee as to the voting or tendering of any full or partial shares
of Company Stock held on his or her behalf in the Company Stock
Fund. Prior to such voting or tendering of Company Stock, each
Participant or Beneficiary shall receive a copy of the proxy
solicitation or other material relating to such vote or tender
decision and a form for the Participant or Beneficiary to complete
which confidentially instructs the Trustee to vote or tender such
shares in the manner indicated by the Participant or Beneficiary.
Upon receipt of such instructions, the Trustee shall act with
respect to such shares as instructed. The Administrator shall
instruct the Trustee with respect to how to vote or tender any
shares for which instructions are not received from Participants or
Beneficiaries.
15.11 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the requirements
of the Securities Act of 1933, as amended, the California Corporate
Securities Law of 1968, as amended, and any other applicable blue
sky law. The Administrator shall also specify what restrictive
legend or transfer restriction, if any, is required to be set forth
on the certificates for the securities and the procedure to be
followed by the Trustee to effectuate a resale of such securities.
37
16 TRUST ADMINISTRATION
--------------------
16.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe
those provisions of this Plan and Trust which relate to the Trustee
and to do all things necessary or convenient to the administration
of the Trust, whether or not such powers are specifically set forth
in this Plan and Trust. Actions taken in good faith by the Trustee
shall be conclusive and binding on all interested parties, and
shall be given the maximum possible deference allowed by law.
16.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in
this Plan and Trust, the Trustee shall have all the power,
authority, rights and privileges of an absolute owner of the Trust
assets and, not in limitation but in amplification of the
foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge, mortgage,
lease, grant options respecting, repair, alter, insure, or
distribute any and all property in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription or
conversion privileges, exercise options and register any
securities in the Trust in the name of the nominee, in federal
book entry form or in any other form as shall permit title
thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or
otherwise, or defend against the same, any obligations or
claims in favor of or against the Trust; and
(d) lend, through a collective investment fund, any securities
held in such collective investment fund to brokers, dealers or
other borrowers and to permit such securities to be
transferred into the name and custody and be voted by the
borrower or others.
16.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any
Trust assets outside the jurisdiction of the United States, except
as authorized by ERISA section 404(b).
38
16.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold federal
(and, if applicable, state) income taxes with regard to any
Eligible Rollover Distribution that is not paid as a Direct
Rollover in accordance with the Participant's withholding
election or as required by law if no election is made or the
election is less than the amount required by law. With regard
to any taxable distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and withhold federal
(and, if applicable, state) income taxes in accordance with
the Participant's withholding election or as required by law
if no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay from
the Investment Fund any taxes or assessments imposed by any
taxing or governmental authority on such Fund or its income,
including related interest and penalties.
16.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall
provide the Administrator with an annual accounting of Trust
assets and information to assist the Administrator in meeting
ERISA's annual reporting and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records and
provide sufficient reporting to allow the Administrator to
properly monitor the Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting
shall automatically occur 90 days after such accounting has
been received by the Administrator, unless the Administrator
files a written objection with the Trustee within such time
period. Such approval shall be final as to all matters and
transactions stated or shown therein and binding upon the
Administrator.
16.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradeable and listed on a national securities exchange
registered under the Securities Exchange Act of 1934, as amended,
the Trustee may engage a qualified independent appraiser to
determine the fair market value of such property, and the appraisal
fees shall be paid from the Investment Fund containing the asset.
39
16.7 Legal Counsel
The Trustee may consult with legal counsel of its choice, including
counsel for the Employer or counsel of the Trustee, upon any
question or matter arising under this Plan and Trust. When relied
upon by the Trustee, the opinion of such counsel shall be evidence
that the Trustee has acted in good faith.
16.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as may
be mutually agreed upon by the Company and the Trustee. Trustee
fees and all reasonable expenses of counsel and advisors retained
by the Trustee shall be paid in accordance with Section 6.
16.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the Trustee,
shall be confined to construing the terms of the Plan and Trust as
they relate to the Trustee, receiving funds on behalf of and making
payments from the Trust, safeguarding and valuing Trust assets,
investing and reinvesting Trust assets in the Investment Funds as
directed by the Administrator, Participants or Beneficiaries and
those duties as described in this Section 16.
The Trustee shall have no duty or authority to ascertain whether
Contributions are in compliance with the Plan, to enforce
collection or to compute or verify the accuracy or adequacy of any
amount to be paid to it by the Employer. The Trustee shall not be
liable for the proper application of any part of the Trust with
respect to any disbursement made at the direction of the
Administrator.
40
17 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
-------------------------------------------------
17.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee.
The Employer expressly reserves the right to 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.
17.2 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.
17.3 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.
17.4 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
41
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.
17.5 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 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.
17.6 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 time table:
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
42
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.
17.7 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.
17.8 Jurisdiction and Severability
The Plan and Trust 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 and Trust shall become invalid or
unenforceable, that fact shall not affect the validity or
enforceability of any other provision of this Plan and Trust. All
provisions of this Plan and Trust shall be so construed as to
render them valid and enforceable in accordance with their intent.
17.9 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Company fails
to apply for a favorable determination from the Internal Revenue
Service with respect to the qualification of the Plan upon its
termination), in relation to the Plan or Trust (1) including
(without limitation) expenses reasonably incurred in the defense of
any claim relating to the Plan or its assets, and amounts paid in
any settlement approved by the Employer relating to the Plan or its
assets, but (2) excluding liability resulting from actions or
inactions made in bad faith, or resulting from the negligence or
willful misconduct of the Trustee. The Company shall have the
right, but not the obligation, to conduct the defense of any action
to which this Section applies. The Plan fiduciaries are not
entitled to indemnity from the Plan assets relating to any such
action.
43
18 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
-----------------------------------------------
18.1 Amendment
The Company reserves the right to amend this Plan and Trust at any
time, to any extent and in any manner it may deem necessary or
appropriate. The Company (and not the Trustee) shall be
responsible for adopting any amendments necessary to maintain the
qualified status of this Plan and Trust 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 and Trust 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 18.5;
(b) except to the extent permissible under ERISA and the Code,
make it possible for any portion of the Trust 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.
18.2 Merger
This Plan and Trust 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,
consolidation or transfer which is at least equal to the benefit
which would be received if either plan had terminated just before
such event.
18.3 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.
44
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.
18.4 Plan Termination
The Company may, at any time and for any reason, terminate the Plan
in accordance with the procedures set forth in Section 18.5, 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 18.1 unless it is required in order to maintain
the qualified status of the Plan upon its termination. The
Trustee's and Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated and
distributed.
18.5 Amendment and Termination Procedures
The following procedural requirements shall govern the adoption of
any amendment or termination (a "Change") of this Plan and Trust:
(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 18.1 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.
(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 and Trust under Code sections 401(a) and
501(a).
(e) No Change affecting the Trustee in its capacity as Trustee or
in any other capacity shall become effective until it is
accepted and signed by the Trustee (which acceptance shall not
unreasonably be withheld).
45
18.6 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.
18.7 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust or may
be removed by the Company at any time upon at least 90 days written
notice (or less if agreed to by both parties). In such event, the
Company shall appoint a successor trustee by the end of the notice
period. The successor trustee shall then succeed to all the powers
and duties of the Trustee under this Plan and Trust. If no
successor trustee has been named by the end of the notice period,
the Company's chief executive officer shall become the trustee, or
if he or she declines, the Trustee may petition the court for the
appointment of a successor trustee.
18.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible after
its resignation or removal as Trustee, the Trustee shall
transfer to the successor trustee all property currently held
by the Trust. However, the Trustee is authorized to reserve
such sum of money as it may deem advisable for payment of its
accounts and expenses in connection with the settlement of its
accounts or other fees or expenses payable by the Trust. Any
balance remaining after payment of such fees and expenses
shall be paid to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final accounting
to the Administrator within 90 days of the date Trust assets
are transferred to the successor trustee.
(c) Administrator Approval. Approval of the final accounting shall
automatically occur 90 days after such accounting has been
received by the Administrator, unless the Administrator files
a written objection with the Trustee within such time period.
Such approval shall be final as to all matters and
transactions stated or shown therein and binding upon the
Administrator.
46
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
-----------
47
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.
2) 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 Accounts quarterly.
3) Investment Fund Election Changes: For each Investment Fund election
change by a 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.
4) Periodic Installment Payment Fees: A $3.00 per check fee shall be
assessed and billed/collected quarterly from the Participant's Account.
5) 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.
48
AMENDMENT NO. 1
TO THE
SILICON VALLEY BANK
MONEY PURCHASE PENSION PLAN AND TRUST
WHEREAS, Silicon Valley Bank (the "Company"), approved and adopted the
Silicon Valley Bank Money Purchase Pension Plan (the "Plan") and Trust
Agreement (the "Trust") which were originally effective January 1, 1995 and
most recently restated effective January 1, 1996;
WHEREAS, Section 18.1 of the Plan and Trust provides that the Company
reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Sections 1, 7 and 15 and Appendices A and B
are amended effective May 28, 1996 as follows:
1. Section 1 is amended to hereby delete Subsection 1.40 and to redesignate
each existing Subsection.
2. Section 7 is amended to restate the Heading thereof, to restate
Subsections 7.1 and 7.2 each in its entirety including the Titles
thereof and to add new Subsections 7.3, 7.4, 7.5 and 7.6 as follows:
7 INVESTMENT FUNDS AND ELECTIONS
------------------------------
7.1 Investment Funds
Except for Participants' Sweep Accounts, the Trust shall be
maintained in various Investment Funds. The Administrator
shall select the Investment Funds offered to Participants and
may change the number or composition of the Investment Funds,
subject to the terms and conditions agreed to with the
Trustee. A list of the Investment Funds offered under the
Plan is set forth in Appendix A, and may be changed from time
to time by the Administrator, in writing, and as agreed to by
the Trustee, without the necessity of amending this Plan and
Trust. If the Company provides for a Company Stock Fund, the
Administrator has the discretion to deny or restrict the
availability of the Company Stock Fund to certain
Participants in accordance with procedures prescribed by the
Administrator to the extent such denial or restriction does
not violate Code section 401(a).
7.2 Investment Fund Elections
Each Participant shall direct the investment of his or her
Account. A Participant shall make his or her investment
election in any combination of one or any number of the
Investment Funds offered in accordance with the procedures
established by the Administrator and Trustee. However,
during any Conversion Period, Trust assets may be held in any
investment vehicle permitted by the Plan, as directed by the
Administrator, irrespective of Participant investment
elections.
1
SILICON VALLEY BANK AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN AND TRUST
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, 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 and Trust.
7.3 Responsibility for Investment Choice
Each 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
Participant as to the manner in which his or her Accounts are
to be invested, and the fact that an Investment Fund is
offered shall not be construed to be a recommendation for
investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which
is not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund
specified 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 and Trust.
7.5 Timing
A Participant shall make his or her initial investment
election upon becoming a Participant and may change his or
her investment election at any time in accordance with the
procedures established by the Administrator and Trustee.
Investment elections received by the Trustee by the Sweep
Date shall be effective on the following Trade Date.
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in
excess of a specified number per year as determined by the
Administrator.
3. Section 15 is amended to restate Subsection 15.9 in its entirety as
follows:
15.9 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund, the Fund shall be
comprised of Company Stock and sufficient deposit or money market
type assets to handle the Fund's liquidity and disbursement needs.
The Fund may be as large as necessary to comply with Participants'
and Beneficiaries' investment elections.
2
SILICON VALLEY BANK AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN TRUST
4. Appendix A is amended to restate in its entirety in the form attached
hereto.
5. Appendix B is amended to restate item 3) in its entirety as follows:
3) Investment Fund Election Changes: For each Investment Fund
election change by a Participant, in excess of 4 changes per year,
a $10 fee shall be assessed and billed/collected quarterly from the
Participant's Account.
Date: May 28, 1996 SILICON VALLEY BANK
By: /s/ Glen G. Simmons
--------------------------------------
Title: Executive V.P. Human Resources/
Administration
The provisions of the above amendment which relate to the Trustee are
hereby approved and executed.
Date: May 30,1996 BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
ASSOCIATION
By: /s/ Dolores Upton
--------------------------------------
Title: Principal
Date: May 30, 1996 BZW BARCLAYS GLOBAL INVESTORS, NATIONAL
ASSOCIATION
By: /s/ Lisa M. Maloney
--------------------------------------
Title: Principal
3
SILICON VALLEY BANK AMENDMENT NO. 1
MONEY PURCHASE PENSION PLAN AND TRUST
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan 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
-----------
II. Default Investment Fund
The default Investment Fund is the U.S. Treasury Allocation Fund.
III. Maximum Percentage Restrictions Applicable to Certain Investment Funds
A Participant or Beneficiary may not elect to invest more than the
following percentages in these Investment Funds:
Company Stock Fund 25%
47 05/01/96