Exhibit 10.7
CORTLAND SAVINGS BANK
401(k) SAVINGS PLAN
In RSI Retirement Trust
TABLE OF CONTENTS
Article Title Page
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article I Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Article II Eligibility and Participation
2.1 Eligibility. . . . . . . . . . . . . . . . . . . . . . . .10
2.2 Ineligible Employees . . . . . . . . . . . . . . . . . . .10
2.3 Participation. . . . . . . . . . . . . . . . . . . . . . .10
2.4 Termination of Participation . . . . . . . . . . . . . . .10
2.5 Eligibility upon Reemployment. . . . . . . . . . . . . . .11
Article III Contributions and Limitations on Contributions
3.1 Basic Contributions. . . . . . . . . . . . . . . . . . . .11
3.2 Limitation on Basic Contributions. . . . . . . . . . . . .11
3.3 Changes in Basic Contributions . . . . . . . . . . . . . .12
3.4 Matching Contributions . . . . . . . . . . . . . . . . . .13
3.5 Special Contributions. . . . . . . . . . . . . . . . . . .14
3.6 Cessation of Contributions . . . . . . . . . . . . . . . .14
3.7 Limitation on Matching Contributions . . . . . . . . . . .14
3.8 Aggregate Limit; Multiple Use of Alternative Limitation. .15
3.9 Interest on Excess Contributions . . . . . . . . . . . . .16
3.10 Payment of Contributions to the Trust and the
Separate Agency. . . . . . . . . . . . . . . . . . . . . .17
3.11 Rollover Contributions . . . . . . . . . . . . . . . . . .17
3.12 Section 415 Limits on Contributions. . . . . . . . . . . .18
Article IV Vesting and Forfeitures
4.1 Vesting. . . . . . . . . . . . . . . . . . . . . . . . . .20
4.2 Forfeitures. . . . . . . . . . . . . . . . . . . . . . . .21
4.3 Vesting upon Reemployment. . . . . . . . . . . . . . . . .22
Article V Trust Fund and Separate Assets
5.1 Trust Fund and Separate Assets . . . . . . . . . . . . . .23
5.2 Investment Accounts. . . . . . . . . . . . . . . . . . . .23
5.3 Interim Investments. . . . . . . . . . . . . . . . . . . .24
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5.4 Account Values . . . . . . . . . . . . . . . . . . . . . .24
5.5 Voting Rights. . . . . . . . . . . . . . . . . . . . . . .25
Article Title Page
5.6. Tender Offers and Other Offers . . . . . . . . . . . . . .25
5.7 Dissenters' Rights . . . . . . . . . . . . . . . . . . . .26
5.8 Separate Assets. . . . . . . . . . . . . . . . . . . . . .27
5.9 Power to Invest in Employer Securities . . . . . . . . . .27
Article VI Investment Directions, Changes of Investment Directions and
Transfers Between Investment Accounts
6.1 Investment Directions. . . . . . . . . . . . . . . . . . .27
6.2 Change of Investment Directions. . . . . . . . . . . . . .27
6.3 Transfers Between Investment Accounts. . . . . . . . . . .28
6.4 Employees Other than Participants. . . . . . . . . . . . .28
6.5 Restrictions on Investments in the Employer Stock Fund
for Certain Participants . . . . . . . . . . . . . . . . .29
Article VII Payment of Benefits
7.1 General. . . . . . . . . . . . . . . . . . . . . . . . . .29
7.2 Non-Hardship Withdrawals . . . . . . . . . . . . . . . . .30
7.3 Hardship Distributions . . . . . . . . . . . . . . . . . .30
7.4 Distribution of Benefits Following Retirement or
Termination of Service . . . . . . . . . . . . . . . . . .33
7.5 Payments Upon Retirement or Disability . . . . . . . . . .34
7.6 Payments Upon Termination of Service for Reasons
Other Than Retirement or Disability. . . . . . . . . . . .35
7.7 Payments Upon Death. . . . . . . . . . . . . . . . . . . .35
7.8 Direct Rollover of Eligible Rollover Distributions . . . .37
7.9 Commencement of Benefits . . . . . . . . . . . . . . . . .38
7.10 Manner of Payment of Distributions from the Employer
Stock Fund . . . . . . . . . . . . . . . . . . . . . . . .38
Article VIII Loans to Participant
8.1 Definitions and Conditions . . . . . . . . . . . . . . . .39
8.2 Loan Amount. . . . . . . . . . . . . . . . . . . . . . . .39
8.3 Term of Loan . . . . . . . . . . . . . . . . . . . . . . .39
8.4 Operational Provisions . . . . . . . . . . . . . . . . . .39
8.5 Repayments . . . . . . . . . . . . . . . . . . . . . . . .41
8.6 Default. . . . . . . . . . . . . . . . . . . . . . . . . .42
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8.7 Coordination of Outstanding Account and Payment
Of Benefits. . . . . . . . . . . . . . . . . . . . . . . .43
Article Title Page
Article IX Administration
9.1 General Administration of the Plan . . . . . . . . . . . .43
9.2 Designation of Named Fiduciaries . . . . . . . . . . . . .43
9.3 Responsibilities of Fiduciaries. . . . . . . . . . . . . .44
9.4 Plan Administrator . . . . . . . . . . . . . . . . . . . .44
9.5 Committee. . . . . . . . . . . . . . . . . . . . . . . . .45
9.6 Powers and Duties of the Committee . . . . . . . . . . . .45
9.7 Certification of Information . . . . . . . . . . . . . . .46
9.8 Authorization of Benefit Payments. . . . . . . . . . . . .46
9.9 Payment of Benefits to Legal Custodian . . . . . . . . . .46
9.10 Service in More Than One Fiduciary Capacity. . . . . . . .47
9.11 Payment of Expenses. . . . . . . . . . . . . . . . . . . .47
9.12 Administration of Separate Assets. . . . . . . . . . . . .47
Article X Benefit Claims Procedure
10.1 Definition . . . . . . . . . . . . . . . . . . . . . . . .47
10.2 Claims . . . . . . . . . . . . . . . . . . . . . . . . . .48
10.3 Disposition of Claim . . . . . . . . . . . . . . . . . . .48
10.4 Denial of Claim. . . . . . . . . . . . . . . . . . . . . .48
10.5 Inaction by Plan Administrator . . . . . . . . . . . . . .48
10.6 Right to Full Fair Review. . . . . . . . . . . . . . . . .48
10.7 Time of Review . . . . . . . . . . . . . . . . . . . . . .49
10.8 Final Decision . . . . . . . . . . . . . . . . . . . . . .49
Article XI Amendment, Termination and Withdrawal
11.1 Amendment and Termination. . . . . . . . . . . . . . . . .49
11.2 Withdrawal from the Trust Fund . . . . . . . . . . . . . .50
Article XII Top-Heavy Plan Provisions
12.1 Introduction . . . . . . . . . . . . . . . . . . . . . . .50
12.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . .50
12.3 Limit on Top-Heavy Earnings. . . . . . . . . . . . . . . .53
12.4 Minimum Contributions. . . . . . . . . . . . . . . . . . .53
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12.5 Impact on Section 415 Maximum Benefits . . . . . . . . . .54
Article XIII Miscellaneous Provisions
13.1 No Right to Continued Employment . . . . . . . . . . . . .55
13.2 Merger, Consolidation, or Transfer . . . . . . . . . . . .55
13.3 Nonalienation of Benefits. . . . . . . . . . . . . . . . .55
Article Title Page
13.4 Missing Payee. . . . . . . . . . . . . . . . . . . . . . .55
13.5 Affiliated Employers . . . . . . . . . . . . . . . . . . .55
13.6 Successor Employer . . . . . . . . . . . . . . . . . . . .55
13.7 Return of Employer Contributions . . . . . . . . . . . . .55
13.8 Construction of Language . . . . . . . . . . . . . . . . .56
13.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . .56
13.10 Governing Law . . . . . . . . . . . . . . . . . . . .56
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INTRODUCTION
Effective as of June 1, 1986, Cortland Savings Bank ("Employer") adopted
the Cortland Savings Bank 401(k) Savings Plan in Retirement System for
Savings Institutions ("Plan") and the Retirement System for Savings
Institutions Agreement and Declaration of Trust ("Agreement").
Effective as of January 1, 1987, the Plan is amended and restated in its
entirety to comply with applicable laws. The amended and restated Plan shall
contain the terms and conditions set forth herein, and shall in all respects
be subject to the provisions of the Agreement, which are incorporated herein
and made a part hereof.
Effective as of August 1, 1990, Retirement System for Savings
Institutions effectuated a reorganization through a transfer of its operating
assets and business and certain intangible assets to subsidiaries of a newly
organized corporation, Retirement System Group Inc., in exchange for shares
of the common stock of such company and the spin-off of such company through
the allocation of such shares to the affected organizations participating in
the Trust on such date. Also effective as of August 1, 1990, (a) the Trust
became known as the RSI Retirement Trust; and (b) all investment, advisory,
administrative, distribution and consulting services previously performed by
the Trustees are performed under contracts with the newly organized
corporation and/or its subsidiaries, or such other servicing agencies as may
be selected by the Trustees from time to time.
The Plan shall constitute a profit-sharing plan within the meaning of
Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code").
Subject to any amendments that may subsequently be adopted by the
Employer pursuant to Section 11.1, the provisions set forth in this Plan
shall apply to any Employee who is in the employment of the Employer on or
after January 1, 1987. Except to the extent specifically required to the
contrary under the terms of this Plan, for terminations of employment prior
to January 1, 1987, the rights and benefits of a former participant shall be
determined in accordance with the provisions of the Plan as in effect on the
date of the former participant's termination of employment.
Effective July 9, 1991, Units of Investment Account RS were sold
pursuant to the authority set forth in the Agreement and as of such date,
Investment Account RS was terminated and the value of Units held on behalf of
a Participant or Beneficiary in Investment Account RS was invested as if such
amount was a contribution to be invested in accordance with Section 6.1.
Effective as of the Conversion Date (the date of conversion of the
Employer from mutual to stock ownership), the Employer adopted resolutions
which (i) added an investment fund to the Plan consisting of common stock of
CNY Financial Corporation and (ii) established the Plan as a Plan of Partial
Participation as defined under the Agreement. In conjunction with such
resolutions, the Employer adopted a Separate Agreement to provide for the
investment of such common stock and designated a Separate Agency to act as
trustee/custodian of such Separate Assets.
The Employer has established, and from time to time amended, the Plan
with the intention that (a) the Plan shall at all times be qualified under
Section 401(a) of the Code, (b) the Agreement and the Separate Agreement
shall be tax-exempt under Section 501(a) of the Code, and (c) Employer
contributions under the Plan shall be tax deductible under Section 404 of the
Code. The provisions of the
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Plan, the Agreement and the Separate Agreement shall be construed to effectuate
such intentions.
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ARTICLE I
Definitions
The following words and phrases shall have the meanings hereinafter
ascribed to them. Those words and phrases which have limited application are
defined in the respective Articles in which such terms appear.
1.1 Accounts means the Basic Contribution Account (including Special
Contributions, if any), Matching Contribution Account and Rollover
Contribution Account established under the Plan on behalf of an Employee.
1.2 Actual Contribution Percentage means the ratio (expressed as a
percentage) of the Matching Contributions under the Plan which are made on
behalf of an Eligible Employee for the Plan Year to such Eligible Employee's
compensation (as defined under Section 414(s) of the Code) for the Plan Year.
Commencing January 1, 1989, an Eligible Employee's compensation hereunder
shall include compensation receivable from the Employer for that portion of
the Plan Year during which the Employee is an Eligible Employee, up to a
maximum of $200,000, adjusted as prescribed by the Secretary of the Treasury
under Section 401(a)(17) of the Code. Commencing January 1, 1994, the amount
of compensation taken into account for a Plan Year shall not exceed $150,000,
adjusted in multiples of $10,000 for increases in the cost-of-living as
prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
the Code. In determining compensation, the rules of Section 414(q)(6) of the
Code shall apply except that the term "family" shall include only the spouse
and those lineal descendants of the Employee who have not attained age
nineteen (19) before the close of the Plan Year.
1.3 Actual Deferral Percentage means the ratio (expressed as a
percentage) of the sum of Basic Contributions, and those Qualified
Nonelective Contributions taken into account under the Plan for the purpose
of determining the Actual Deferral Percentage, which are made on behalf of an
Eligible Employee for the Plan Year to such Eligible Employee's compensation
(as defined under Section 414(s) of the Code) for the Plan Year. Commencing
January 1, 1989, an Eligible Employee's compensation hereunder shall include
compensation receivable from the Employer for that portion of the Plan Year
during which the Employee is an Eligible Employee, up to a maximum of
$200,000, adjusted as prescribed by the Secretary of the Treasury under
Section 401(a)(17) of the Code. Commencing January 1, 1994, the amount of
compensation taken into account for a Plan Year shall not exceed $150,000,
adjusted in multiples of $10,000 for increases in the cost-of-living as
prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
the Code. In determining compensation, the rules of Section 414(q)(6) of the
Code shall apply except that the term "family" shall include only the spouse
and those lineal descendants of the Employee who have not attained age
nineteen (19) before the close of the Plan Year.
1.4 Affiliated Employer means a member of an affiliated service group
(as defined under Section 414(m) of the Code), a controlled group of
corporations (as defined under Section 414(b) of the Code), a group of trades
or businesses under common control (as defined under Section 414(c) of the
Code) of which the Employer is a member, any leasing organization (as defined
under Section 414(n) of the Code) providing the services of Leased Employees
to the Employer, or any other group provided for under any and all Income Tax
Regulations promulgated by the Secretary of the Treasury under Section 414(o)
of the Code.
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1.5 Affiliated Service means employment with an employer during the
period that such employer is an Affiliated Employer.
1.6 Agreement means the Retirement System for Savings Institutions
Agreement and Declaration of Trust as amended and restated August 31, 1984,
as amended from time to time. Commencing August 1, 1990, Agreement means the
RSI Retirement Trust Agreement and Declaration of Trust as amended and
restated August 1, 1990, as amended from time to time. The Agreement shall
be incorporated herein and constitute a part of the Plan.
1.7 Average Actual Contribution Percentage means the average of the
Actual Contribution Percentages of (a) the group comprised of Eligible
Employees who are Highly Compensated Employees or (b) the group comprised of
Eligible Employees who are Non-Highly Compensated Employees, whichever is
applicable.
1.8 Average Actual Deferral Percentage means the average of the Actual
Deferral Percentages of (a) the group comprised of Eligible Employees who are
Highly Compensated Employees or (b) the group comprised of Eligible Employees
who are Non-Highly Compensated Employees, whichever is applicable.
1.9 Basic Contribution Account means the separate, individual account
established on behalf of a Participant to which Basic Contributions and
Special Contributions made on his behalf are credited, together with all
earnings and appreciation thereon, and against which are charged any
withdrawals, loans and other distributions made from such account and any
losses, depreciation or expenses allocable to amounts credited to such
account.
1.10 Basic Contributions means the contributions of the Employer made In
accordance with the Compensation Reduction Agreements of Participants
pursuant to Section 3.1.
1.11 Beneficiary means any person who is receiving or is eligible to
receive a benefit under Section 7.7 of the Plan upon the death of an Employee
or former Employee.
1.12 Board means the board of trustees, directors or other governing
body of the Employer.
1.13 Code means the Internal Revenue Code of 1986, as amended from time
to time.
1.14 Committee means the person or persons appointed by the Employer in
accordance with Section 9.2(b).
1.15 Company means CNY Financial Corporation or any successor
organization.
1.16 Compensation means the base compensation receivable by an Employee
from the Employer for the calendar year prior to any reduction pursuant to a
Compensation Reduction Agreement. Base compensation shall include salary,
Basic Contributions, wages and wage continuation payments to an Employee who
is absent due to illness or disability of a short-term nature, and exclude
overtime, commissions, expense allowances, severance pay, fees, bonuses,
contributions other than Basic Contributions made by the Employer to the
Plan, and contributions made by the Employer to any other pension, insurance,
welfare, or other employee benefit plan.
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For any Plan Year commencing on or after January 1, 1989, Compensation
shall not exceed $200,000, adjusted as prescribed by the Secretary of the
Treasury under Section 401(a)(17) of the Code. Commencing January 1, 1994,
compensation shall not exceed $150,000, adjusted in multiples of $10,000 for
increases in the cost-of-living as prescribed by the Secretary of the
Treasury under Section 401(a)(17)(B) of the Code. In determining the dollar
limitation hereunder, compensation received from any Affiliated Employer
shall be recognized as Compensation and the rules of Section 414(q)(6) of the
Code shall apply except that the term "family" shall include only the Spouse
and those lineal descendants of the Employee who have not attained age
nineteen (19) before the close of the Plan Year.
1.17 Compensation Reduction Agreement means an agreement between the
Employer and an Eligible Employee whereby the Eligible Employee agrees to
reduce his Compensation during the applicable payroll period by an amount
equal to any whole percentage thereof and the Employer agrees to contribute
to the Trust, on behalf of such Eligible Employee, an amount equal to the
specified reduction In Compensation.
1.18 Conversion Date means the date of the conversion of the Employer
from mutual to stock ownership.
1.19 Disability means a physical or mental condition, determined after
review of those medical reports deemed satisfactory for this purpose, which
renders the Participant totally and permanently incapable of engaging in any
substantial gainful employment based on his education, training and
experience.
1.20 Early Retirement Date means the first day of any month coincident
with or following the date the Participant completes a minimum of five (5)
consecutive years of Credited Service, provided that (a) the Participant has
attained age sixty (60) or (b) the Participant has completed thirty (30) or
more years of Vested Service. For purposes of this Section 1.20, credited
service and vested service mean credited service and vested service as
defined in the Employer's defined benefit retirement plan.
1.21 Effective Date means June 1, 1986.
1.22 Eligible Employee means an Employee who is eligible to participate
in the Plan pursuant to the provisions of Article II.
1.23 Employee means any person employed by the Employer.
1.24 Employer means Cortland Savings Bank or any successor organization
which shall continue to maintain the Plan set forth herein.
1.25 Employer Resolutions means resolutions adopted by the Board.
1.26 Employer Stock Fund means, commencing on the Conversion Date, the
Separate Assets consisting of common stock of the Company which shall be
maintained in an Investment Account established for such purpose.
1.27 Employment Commencement Date means the date on which an Employee
first performs
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an Hour of Service for the Employer upon initial employment or, if applicable,
upon reemployment.
1.28 ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.29 Forfeitures means any amounts forfeited pursuant to Section 4.2 by
a Participant whose Termination of Service occurs prior to such Participant's
being fully vested in the Net Value of his Account.
1.30 Hardship means the condition described in Section 7.3.
1.31 Highly Compensated Employee means, with respect to a Plan Year, an
Employee or an employee of an Affiliated Employer who is such an Employee or
employee during the Plan Year for which a determination is being made and who:
(a) during the Plan Year immediately preceding the Plan Year for which a
determination is being made:
(i) received compensation as defined under Section 414(q)(7) of the Code
("Section 414(q) Compensation") from the Employer of greater than $75,000,
adjusted as prescribed by the Secretary of the Treasury under Section
415(d) of the Code, or
(ii) received Section 414(q) Compensation from the Employer of greater than
$50,000, adjusted as prescribed by the Secretary of the Treasury under
Section 415(d) of the Code, and was a member of the top-paid group of
Employees (as defined under Section 414(q)(4) of the Code) ("Top-Paid
Group"), or
(iii) was an officer (as determined in accordance with Section 414(q)(5) of
the Code) of the Employer who received Section 414(q) Compensation from the
Employer of greater than fifty percent (50%) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code, or if no such officer of the
Employer satisfied such compensation requirement, was the highest paid
officer for such year, or
(b) during the Plan Year for which a determination is being made,
satisfies the requirements of subsection (a)(i), (ii) or (iii) above,
determined without regard to "during the Plan Year immediately preceding
the Plan Year for which a determination is made", and is a member of the
group consisting of the one-hundred (100) Employees receiving the highest
Section 414(q) Compensation from the Employer during such Plan Year ("Top
100 Employees"), or (c) at any time during the Plan Year for which a
determination is being made or at any time during the Plan Year immediately
preceding the Plan Year for which a determination is being made, was a
five-percent owner as described under Section 414(q)(3) of the Code.
Highly Compensated Employee also means a former Employee who (A)
incurred a Termination of Service prior to the Plan Year of the
determination, (B) is not credited with an Hour of Service during the Plan
Year of the determination and (C) satisfied the requirements of subsection
(a), (b) or (c) above during either the Plan Year of his Termination of
Service or any Plan Year ending coincident with or subsequent to the
Employee's attainment of age fifty-five (55).
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If, during either the Plan Year of the determination or the preceding
Plan Year, an Employee is a Family Member of either (1) a five-percent owner
(as defined under Section 414(q)(3) of the Code), or (2) a Highly Compensated
Employee who is among the ten (10) highly compensated Employees receiving the
highest Section 414(q) Compensation from the Employer during such Plan Year,
the Section 414(q) Compensation and the Accounts of the Family Member shall
be aggregated with the Section 414(q) Compensation and the Accounts of such
Highly Compensated Employee and the Family Member and the Highly Compensated
Employee shall be treated as a single Employee. For purposes of this Section
1.31, Family Member includes the Spouse, lineal ascendants and descendants of
the Employee or former Employee and the spouse of a lineal ascendant or
descendant.
The determination 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 Section 414(q) of the Code and
regulations promulgated thereunder by the Secretary of the Treasury.
1.32 Hour of Service means each hour for which an Employee is paid or
entitled to be paid by the Employer for the performance of duties.
1.33 Investment Accounts means, prior to April 28, 1995, any and all of
the investment accounts described in Section 5.2. Commencing April 28, 1995,
Investment Accounts means any and all of the investment accounts established
by Board resolution and presented to the Trustees, for the purpose of
investing contributions made to the Plan Funds in accordance with the
provisions of the Agreement or Separate Agreement, as applicable. The
securities and other property in which contributions to the Investment
Accounts of the Plan Funds may be invested shall be specified in the
Agreement or the Separate Agreement, and the rights of the Trustees or
Separate Agency shall be established in accordance with the provisions of
such Agreement and Separate Agreement, respectively.
1.34 Leased Employee means any individual (other than an Employee of the
Employer or an employee of an Affiliated Employer) who, pursuant to an
agreement between the Employer or any Affiliated Employer and any other
person ("leasing organization"), has performed services for the Employer or
any Affiliated Employer on a substantially full-time basis for a period of at
least one (1) year, and such services are of a type historically performed by
employees in the business field of the Employer or any Affiliated Employer.
A determination as to whether a Leased Employee shall be treated as an
Employee of the Employer or an Affiliated Employer shall be made in
accordance with Section 414(n) of the Code and any and all Income Tax
Regulations promulgated thereunder.
1.35 Matching Contribution Account means the separate, individual
account established on behalf of a Participant to which the Matching
Contributions made on such Participant's behalf are credited, together with
all earnings and appreciation thereon, and against which are charged any
withdrawals, loans and other distributions made from such account and any
losses, depreciation or expenses allocable to amounts credited to such
account.
1.36 Matching Contributions means the contributions made by the Employer
pursuant to Section 3.4.
1.37 Named Fiduciaries means the Trustees, the Committee and commencing
on the Conversion Date, the Separate Agency and such other parties who are
designated by the Employer to
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control and manage the operation and administration of the Plan.
1.38 Net Value means the value of an Employee's Accounts as determined
as of the Valuation Date coincident with or next following the event
requiring such determination.
1.39 Non-Highly Compensated Employee means, with respect to a Plan Year, an
Employee who is neither a Highly Compensated Employee nor a family member
as provided in Section 414(q)(6) of the Code.
1.40 Normal Retirement Age means the date an Employee attains age
sixty-five (65).
1.41 Normal Retirement Date means the first day of the month coincident
with or next following the Participant's Normal Retirement Age.
1.42 One Year Period of Severance means a twelve (12) consecutive month
period following an Employee's Termination of Service with the Employer
during which the Employee did not perform an Hour of Service.
Notwithstanding the foregoing, if an Employee is absent from employment
for maternity or paternity reasons, such absence during the twenty-four (24)
month period commencing on the first date of such absence shall not
constitute a One Year Period of Severance. An absence from employment for
maternity or paternity reasons means an absence (a) by reason of pregnancy of
the Employee, or (b) by reason of a birth of a child of the Employee, or (c)
by reason of the placement of a child with the Employee in connection with
the adoption of such child by such Employee, or (d) for purposes of caring
for such child for a period beginning immediately following such birth or
placement.
1.43 Participant means an Eligible Employee who, in accordance with the
provisions of Section 2.3, has elected to participate in the Plan and whose
participation in the Plan has not been terminated in accordance with the
provisions of Section 2.4.
1.44 Period of Service means a period commencing with an Employee's
Employment Commencement Date and ending on the date such Employee first
incurs a Termination of Service.
Notwithstanding the foregoing, the period between the first and second
anniversary of the first date of a maternity or paternity absence described
under Section 1.42 shall not be included in determining a Period of Service.
A period during which an individual was not employed by the Employer
shall nevertheless be deemed to be a Period of Service if such individual
incurred a Termination of Service and:
(a) such Termination of Service was the result of resignation, discharge
or retirement and such individual is reemployed by the Employer within one
(1) year after such Termination of Service; or
(b) such Termination of Service occurred when the individual was otherwise
absent for less than one (1) year and he was reemployed by the Employer
within one (1) year after the date such absence began.
-8-
All Periods of Service not disregarded under Sections 2.5 and 4.3 shall
be aggregated.
Wherever used in the Plan, a Period of Service means the quotient
obtained by dividing the days in all Periods of Service not disregarded
hereunder by 365 and disregarding any fractional remainder.
1.45 Plan means the Cortland Savings Bank 401(k) Savings Plan in
Retirement System for Savings Institutions, as amended from time to time.
Commencing August 1, 1990, the name of the Plan shall be the Cortland Savings
Bank 401(k) Savings Plan in RSI Retirement Trust. Commencing on the
Conversion Date, the Plan shall be a Plan of Partial Participation as defined
under the Agreement.
1.46 Plan Administrator means the person or persons who have been
designated as such by the Employer in accordance with the provisions of
Section ___.
1.47 Plan Funds means the assets of the Plan held in the Trust Fund and
Separate Assets held under any Separate Agreement.
1.48 Plan Year means the calendar year.
1.49 Postponed Retirement Date means the first day of the month
coincident with or next following a Participant's date of actual retirement
which occurs after his Normal Retirement Date.
1.50 Qualified Nonelective Contributions means contributions, other than
Matching Contributions, made by the Employer, which (a) Participants may not
elect to receive in cash in lieu of their being contributed to the Plan; (b)
are 100% nonforfeitable when made; and (c) are not distributable under the
terms of the Plan to Participants or their Beneficiaries until the earliest
of:
(i) the Participant's death, Disability or separation from service for
other reasons;
(ii) the Participant's attainment of age 59-1/2;
(iii)termination of the Plan; or
(iv) during Plan Years which commence prior to January 1, 1989, Hardship of
the Participant determined in accordance with the provisions of Section
7.3.
Special Contributions defined in Section 1.52 are Qualified Nonelective
Contributions.
1.51 Restatement Date means January 1, 1987.
1.52 Retirement Date means the Participant's Normal Retirement Date,
Early Retirement Date or Postponed Retirement Date, whichever is applicable.
1.53 Rollover Contribution means a contribution to the Plan of money
received by an Employee from a qualified plan which the Code permits to be
rolled over into the Plan.
1.54 Rollover Contribution Account means the separate, individual
account established on behalf of an Employee to which his Rollover
Contributions are credited together with all earnings and appreciation
thereon, and against which are charged any withdrawals, loans and other
distributions made
-9-
from such account and any losses, depreciation or expenses allocable to amounts
credited to such account.
1.55 Separate Agency means a trustee or a custodian holding Plan Funds
that maintains a Separate Agreement.
1.56 Separate Agreement means the agreement between the Employer and a
trustee or a custodian to provide for the investment in common stock of the
Company. Such Separate Agreement shall be incorporated herein and constitute
a part of the Plan.
1.57 Separate Assets means assets of the Plan as described in Article V
which are held other than under the Trust.
1.58 Special Contributions means the contributions made by the Employer
pursuant to Section 3.5. Special Contributions are Qualified Nonelective
Contributions as defined in Section 1.50.
1.59 Spouse means a person to whom the Employee was legally married and
which marriage had not been dissolved by formal divorce proceedings that had
been completed prior to the date on which payments to the Employee are
scheduled to commence.
1.60 Termination of Service means the earlier of (a) the date on which
an Employee's service is terminated by reason of his resignation, retirement,
discharge, death or Disability or (b) the first anniversary of the date on
which such Employee's service is terminated for layoff or any other reason.
Service in the Armed Forces of the United States shall not constitute a
Termination of Service but shall be considered to be a period of employment
by the Employer provided that (I) such military service is caused by war or
other emergency or the Employee is required to serve under the laws of
conscription in time of peace, (II) the Employee returns to employment with
the Employer within six (6) months following discharge from such military
service and (III) such Employee is reemployed by the Employer at a time when
the Employee had a right to reemployment at his former position or
substantially similar position upon separation from such military duty in
accordance with seniority rights as protected under the laws of the United
States. A leave of absence granted to an Employee by the Employer shall not
constitute a Termination of Service provided that the Participant returns to
the active service of the Employer at the expiration of any such period for
which leave has been granted.
Notwithstanding the foregoing, an Employee who is absent from service
with the Employer beyond the first anniversary of the first date of his
absence for maternity or paternity reasons set forth in Section 1.42 shall
incur a Termination of Service for purposes of the Plan on the second
anniversary of the date of such absence.
1.61 Trust means the trust established or maintained under the Agreement
with respect to the Plan.
1.62 Trust Fund means the assets held in accordance with the Agreement.
1.63 Trustees means the Trustees of the Retirement System for Savings
Institutions. Commencing August 1, 1990, Trustees means the Trustees of the
RSI Retirement Trust.
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1.64 Units means the units of measure of an Employee's proportionate
undivided beneficial interest in one or more of the Investment Accounts,
valued as of the close of business.
1.65 Valuation Date means each business day.
ARTICLE II
Eligibility and Participation
2.1 Eligibility
(a) Every Employee who was a Participant in the Plan immediately prior to
the Restatement Date shall continue to be a Participant on the Restatement Date.
(b) Every other Employee who is not excluded under the provisions of
Section 2.2 shall become an Eligible Employee upon satisfying all of the
following conditions:
(i) completion of a Period of Service of one (1) year;
(ii) attainment of age twenty-one (21); and
(iii) classification as a salaried Employee.
(c) For purposes of determining if an Employee completed a Period of
Service of one (1) year, employment with an Affiliated Employer shall be
deemed employment with the Employer.
(d) An employee who otherwise satisfied the requirements of this
Section 2.1 but who is excluded under the provisions of Section 2.2 shall
become an Eligible Employee immediately upon classification as an Employee
under the provisions of Section 2.1(b)(iii).
2.2 Ineligible Employees
The following classes of Employees are ineligible to participate in the
Plan:
(a) Employees compensated on an hourly, daily, commission, fee, or
retainer basis;
(b) Leased Employees;
(c) Employees in a unit of Employees covered by a collective bargaining
agreement with the Employer pursuant to which employee benefits were the
subject of good faith bargaining and which agreement does not expressly
provide that Employees of such unit be covered under the Plan; and
(d) Owner-Employees. For purposes of this Section 2.2(d),
Owner-Employee means an individual who is a sole proprietor or who is a
partner owning more than ten percent (10%) of either the capital or profits
interest of a partnership which adopted the Plan.
2.3 Participation
Participation in the Plan is voluntary. An Eligible Employee may elect
to participate as of the first day of any payroll period of any calendar
month following satisfaction of the eligibility requirements set forth in
Section 2.1. Such election shall be evidenced by completing and filing the
form prescribed by the Committee not less than ten (10) days prior to the
date participation is to commence. Such form shall
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Include, but not be limited to, a Compensation Reduction Agreement, a
designation of Beneficiary, and an investment direction as described in Section
6.1. By completing and filing such form, the Eligible Employee authorizes the
Employer to make the applicable payroll deductions from Compensation, commencing
on the first applicable payday coincident with or next following the effective
date of the Eligible Employee's election to participate.
2.4 Termination of Participation
Participation in the Plan shall terminate on the earlier of the date a
Participant dies or the entire vested interest in the Net Value of such
Participant's Accounts has been distributed.
2.5 Eligibility upon Reemployment
If an Employee incurs a One Year Period of Severance prior to satisfying
the eligibility requirements of Section 2.1, service prior to such One Year
Period of Severance shall be disregarded and such Employee must satisfy the
eligibility requirements of Section 2.1 as a new Employee.
If an Employee incurs a One Year Period of Severance after satisfying
the eligibility requirements of Section 2.1 and:
(a) if such Employee is not vested in any Matching Contributions,
incurs a One Year Period of Severance and again performs an Hour of Service,
the Employee shall receive credit for Periods of Service prior to a One Year
Period of Severance only if the number of consecutive One Year Periods of
Severance is less than the greater of: (i) five (5) years or (ii) the
aggregate number of such Employee's Periods of Service credited before his
One Year Period of Severance. If such former Employee's Periods of Service
prior to his One Year Period of Severance are recredited under this Section
2.5, such former Employee shall be eligible to participate immediately upon
reemployment, provided such Employee is not excluded from participating under
the provisions of Section 2.2. If such former Employee's Periods of Service
prior to his One Year Period of Severance are not recredited under this
Section 2.5, such Employee must satisfy the eligibility requirements of
Section 2.1 as a new Employee;
(b) if such Employee is vested in any Matching Contributions, incurs a One
Year Period of Severance and again performs an Hour of Service, the
Employee shall receive credit for Periods of Service prior to his One
Year Period of Severance and shall be eligible to participate in the
Plan immediately upon reemployment, provided such Employee is not
excluded from participating under the provisions of Section 2.2.
ARTICLE III
Contributions and Limitations on Contributions
3.1 Basic Contributions
The Employer shall make Basic Contributions for each payroll period in
an amount equal to the amount by which a Participant's Compensation has been
reduced with respect to such period under his Compensation Reduction
Agreement. Subject to the limitations set forth in Sections 3.2 and 3.11, the
amount of reduction authorized by the Eligible Employee shall not be less
than 2% nor greater than 6%. Commencing January 1, 1997, subject to the
limitations set forth in Sections 3.2 and 3.12, the amount of reduction
authorized by the Eligible Employee shall not be less than two percent (2%)
nor greater than ten percent (10%). The Basic Contributions made on behalf
of a Participant shall be credited to such Participant's Basic Contribution
Account and shall be invested in accordance with Article VI of the Plan.
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3.2 Limitation on Basic Contributions
(a) The percentage of Basic Contributions made on behalf of a
Participant who is a Highly Compensated Employee shall be limited so that the
Average Actual Deferral Percentage for the group of such Highly Compensated
Employees for the Plan Year does not exceed the greater of:
(i) the Average Actual Deferral Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the Plan Year
multiplied by 1.25; or
(ii) the Average Actual Deferral Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the Plan
Year, multiplied by two (2); provided that the difference in the Average
Actual Deferral Percentage for eligible Highly Compensated Employees and
eligible Non-Highly Compensated Employees does not exceed two percent (2%).
Commencing January 1, 1989, use of this alternative limitation shall be
subject to the provisions of Income Tax Regulations Section 1.401(m)-2
regarding the multiple use of the alternative deferral tests set forth in
Sections 401(k) and 401(m) of the Code.
If the Average Actual Deferral Percentage for the group of eligible
Highly Compensated Employees exceeds the limitations set forth in the
preceding paragraph, the amount of excess Basic Contributions for a Highly
Compensated Employee shall be determined by "leveling" the highest Actual
Deferral Percentage until the Average Actual Deferral Percentage for the
group of eligible Highly Compensated Employees complies with such
limitations. For purposes of this paragraph, "leveling" means reducing the
Actual Deferral Percentage of the Highly Compensated Employee with the
highest Actual Deferral Percentage to the extent required to: (A)
enable the Average Actual Deferral Percentage limitations to be met, or
(B) cause such Highly Compensated Employee's Actual Deferral Percentage
to equal the Actual Deferral Percentage of the Highly Compensated Employee
with the next highest Actual Deferral Percentage and repeating such process
until the Average Actual Deferral Percentage for the group of eligible Highly
Compensated Employees complies with the Average Actual Deferral Percentage
limitations.
If Basic Contributions made on behalf of a Participant during any Plan
Year exceed the maximum amount applicable to a Participant as set forth
above, any such contributions, including any earnings thereon as determined
under Section 3.9, shall be characterized as Compensation payable to the
Participant and shall be paid to the Participant from his Basic Contribution
Account no later than two and one-half (271/2) months after the close of such
Plan Year.
(b) Basic Contributions made on behalf of any Participant during any
Plan Year shall not exceed $7,000, adjusted as prescribed by the Secretary of
the Treasury under Section 415(d) of the Code for Plan Years beginning after
December 31, 1987. For Plan Years commencing after December 31, 1988, Basic
Contributions and elective deferrals (as defined In Section 402(g) of the
Code) under all other plans, contracts or arrangements of the Employer shall
not exceed $7,000, adjusted as prescribed by the Secretary of the Treasury
under Section 415(d) of the Code.
(c) If Basic Contributions made on behalf of a Participant during any
Plan Year exceed the dollar limitation set forth In subsection (b), such
contributions, including any earnings thereon as determined under Section
3.9, shall be characterized as Compensation payable to the Participant and
shall be paid to the
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Participant from his Basic Contribution Account no later than April 15th of the
calendar year following the close of such Plan Year.
(d) Subject to the requirements of Sections 401(a) and 401(k) of the
Code, the maximum amounts under subsections (a) and (b) may differ in amount
or percentage as between individual Participants or classes of Participants,
and any Compensation Reduction Agreement may be terminated, amended, or
suspended without the consent of any such Participant or Participants In
order to comply with the provisions of such subsections (a) and (b).
3.3 Changes in Basic Contributions
Unless (a) an election is made to the contrary, or (b) a Participant
receives a Hardship distribution pursuant to Section 7.3(c)(iii), the
percentage of Basic Contributions made under Section 3.1 shall continue in
effect so long as the Participant has a Compensation Reduction Agreement in
force. A Participant may, by completing the applicable form, prospectively
increase or decrease the rate of Basic Contributions made on his behalf to
any of the percentages authorized under Section 3.1 or suspend Basic
Contributions without withdrawing from participation in the Plan. Such form
must be filed at least ten (10) days prior to the first day of the payroll
period with respect to which such change is to become effective. A
Participant who has Basic Contributions made on his behalf suspended may
resume such contributions by completing and filing the applicable form. Only
twice in any Plan Year may an election be made which would prospectively
increase, decrease, suspend or resume Basic Contributions made on behalf of a
Participant.
Notwithstanding the foregoing, a Participant who receives a Hardship
distribution pursuant to Section 7.3(c)(iii) shall have his Compensation
Reduction Agreement deemed null and void and all Basic Contributions made on
behalf of such Participant shall be suspended until the later to occur of:
(i) twelve (12) months after receipt of the Hardship distribution and (ii)
the first payroll period which occurs ten (10) days following the completion
and filing of a Compensation Reduction Agreement authorizing the resumption
of Basic Contributions to be made on his behalf. Basic Contributions
following a Hardship distribution made pursuant to Section 7.3(c)(iii) shall
be subject to the following limitations:
(A) Basic Contributions for the Participant's taxable year immediately
following the taxable year of the Hardship distribution shall not exceed the
applicable limit under Section 402(g) of the Code for such next taxable year
less the amount of such Participant's Basic Contributions for the taxable
year of the Hardship distribution, and
(B) the percentage of Basic Contributions for the twelve (12) month
period following the mandatory twelve (12) month suspension period shall not
exceed the percentage of Basic Contributions made on behalf of the
Participant as set forth in the last Compensation Reduction Agreement in
effect prior to the Hardship distribution.
Basic Contributions based an Compensation for the period during which
such contributions had been suspended or decreased may not be made up at a
later date.
3.4 Matching Contributions
(a) The Employer shall, out of its current or accumulated earnings or
profits, make contributions on behalf of each Participant in an amount equal
to 50% of such Participant's Basic Contributions up to a maximum of 3% of the
Participant's Compensation.
-14-
Commencing January 1, 1989, the Employer shall make contributions on
behalf of each Participant in an amount equal to 75% of such Participant's
Basic Contributions up to a maximum of 4.5% of the Participant's Compensation.
(b) Matching Contributions shall be credited to the Participant's
Matching Contribution Account and shall be Invested in accordance with
Article VI, of the Plan.
(c) If a Participant terminates his Basic Contributions, Matching
Contributions attributable to such contributions will also cease. If Basic
Contributions are suspended, the Matching Contributions attributable to such
contributions will be suspended for the same period. Subject to the
limitations set forth in subsection (a), if Basic Contributions are increased
or decreased, Matching Contributions attributable to such contributions will
be increased or decreased during the same period. Matching Contributions for
the period during which Basic Contributions had been suspended or decreased
may not be made up at a later date.
(d) Matching Contributions will be reviewed at least once during the
Plan Year and may be modified by the Employer's Board.
3.5 Special Contributions
In addition to any other contributions, the Employer may, in its
discretion, make Special Contributions for a Plan Year, to the Basic
Contribution Account of any Eligible Employees. Such Special Contributions
may be limited to the amount necessary to insure that the Plan complies with
the requirements of Section 401(k) of the Code.
Prior to January 1, 1989, the Employer may provide that Special
Contributions be made only on behalf of each Participant who (a) is a
Non-Highly Compensated Employee, and (b) is a Participant with a Compensation
Reduction Agreement in effect on the last day of the Plan Year. Such Special
Contributions shall be allocated in proportion to each such Participant's
Basic Contributions for such Plan Year.
Commencing January 1, 1989, the Employer may provide that Special
Contributions be made only on behalf of each Eligible Employee who is a
Non-Highly Compensated Employee on the last day of the Plan Year. Such
Special Contributions shall be allocated in proportion to each such Eligible
Employee's Compensation for the Plan Year.
Any other provision of the Plan to the contrary notwithstanding, no
Matching Contributions shall be made with respect to any Special
Contributions.
3.6 Cessation of Contributions
If the Employer shall determine at any time that the current or
accumulated earnings or profits of the Employer are insufficient to pay the
full amount of contributions required under this Article III in a Plan Year,
the Employer may reduce or cease, whichever is applicable, Matching
Contributions.
3.7 Limitation on Matching Contributions
The Actual Contribution Percentage made on behalf of a Participant who
is a Highly Compensated Employee shall be limited so that the Average Actual
Contribution Percentage for the group of such Highly Compensated Employees
for the Plan Year shall not exceed the greater of:
(a) the Average Actual Contribution Percentage for the group of
Eligible Employees who are
-15-
Non-Highly Compensated Employees for the Plan Year multiplied by 1.25; or
(b) the Average Actual Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year, multiplied
by two (2); provided that the difference in the Average Actual Contribution
Percentage for Highly Compensated Employees and Non-Highly Compensated Employees
does not exceed two percent (2%). Commencing January 1, 1989, use of this
alternative limitation shall be subject to the provisions of Income Tax
Regulations Section 1.401(m)-2 regarding the multiple use of the alternative
deferral tests set forth in Sections 401(k) and 401(m) of the Code.
If the Average Actual Contribution Percentage for the group of eligible
Highly Compensated Employees exceeds the limitations set forth in the
preceding paragraph, the amount of excess Matching Contributions for a Highly
Compensated Employee shall be determined by "leveling" the highest Actual
Contribution Percentage until the Average Actual Contribution Percentage for
the group of eligible Highly Compensated Employees complies with such
limitations. For purposes of this paragraph, "leveling" means reducing the
Actual Contribution Percentage of the Highly Compensated Employee with the
highest Actual Contribution Percentage to the extent required to:
(i) enable the Average Actual Contribution Percentage limitations to be
met, or
(ii) cause such Highly Compensated Employee's Actual Contribution
Percentage to equal the Actual Contribution Percentage of the Highly
Compensated Employee with the next highest Actual Contribution Percentage and
repeating such process until the Average Actual Contribution Percentage for
the group of eligible Highly Compensated Employees complies with the Average
Actual Contribution Percentage limitations.
If Matching Contributions during any Plan Year exceed the maximum amount
applicable to a Participant as set forth above, any such contributions,
including any earnings thereon as determined under Section 3.9, shall, to the
extent vested, be characterized as Compensation payable to the Participant
and any such vested Matching Contribution, including earnings thereon as
determined under Section 3.9, shall be paid to the Participant from the
applicable Account no later than two and one-half (2-1/2) months after the
close of such Plan Year.
In the event that the Plan satisfies the requirements of Section 410(b)
of-the Code only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of Section 410(b) of the Code only
if aggregated with the Plan, then this Section 3.7 shall be applied by
determining the Actual Contribution Percentages of Eligible Employees as if
all such plans were a single plan.
3.8 Aggregate Limit; Multiple Use of Alternative Limitation
Commencing January 1, 1989, multiple use of the alternative limitation in
determining the Average Actual Deferral Percentage and Average Actual
Contribution Percentage shall not be permitted.
Multiple use of the alternative limitation occurs if, for the group of
Eligible Employees who are Highly Compensated Employees, the sum of the Average
Actual Deferral Percentage and the Average Actual Contribution Percentage
exceeds the Aggregate Limit.
For purposes of this Section 3.8, Aggregate Limit shall mean the greater of
(a) or (b), where (a) and (b) are as follows:
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(a) the sum of:
(i) one hundred twenty-five percent (125%) of the greater of:
(A) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year; or
(B) the Average Actual Contribution Percentage for the group of
Eligible Employees who are Non-Highly Compensated Employees for the Plan Year;
and
(ii) two (2) plus the lesser of subsection (a)(i)(A) or (a)(i)(B),
above. In no event shall this amount exceed two hundred percent (200%) of the
lesser of subsection (a)(i)(A) or (a)(i)(B), above.
(b) the sum of:
(i) one hundred twenty-five percent (125%) of the lesser of:
(A) the Average Actual Deferral Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year; or
(B) the Average Actual Contribution Percentage for the group of Eligible
Employees who are Non-Highly Compensated Employees for the Plan Year; and
(ii) two (2) plus the greater of subsection (b)(i)(A) or (b)(i)(B),
above. In no event shall this amount exceed two hundred percent (200%) of the
greater of subsection (b)(i)(A) or (b)(i)(8), above.
If multiple use of the alternative limitation occurs, the Average Actual
Deferral Percentage for all Highly Compensated Employees under the Plan shall
be reduced in accordance with the provisions of Income Tax Regulations
Section 1.401(m)-2(c).
3.9 Interest on Excess Contributions
In the event Basic Contributions and/or Matching Contributions made on
behalf of a Participant during a Plan Year exceed the maximum allowable
amount as described in Section 3.2(a), 3.2(b) or 3.7 (Excess Contributions")
and such Excess Contributions and earnings thereon are payable to the
Participant under the applicable provisions of the Plan, earnings on such
Excess Contributions for the period commencing with the first day of the Plan
Year in which the Excess Contributions were made and ending with the date of
payment to the Participant ("Allocation Period") shall be determined in
accordance with the provisions of this Section 3.9.
The earnings allocable to excess Basic Contributions and/or Special
Contributions made on behalf of the Participant during the Plan Year
beginning January 1, 1987 shall be equal to the amount of earnings
attributable to the Participant's Basic Contribution Account for the
Allocation Period multiplied by a fraction, the numerator of which is the
excess Basic Contributions, and the denominator of which is the Net Value of
the Participant's Basic Contribution Account on the first day of the Plan
Year in which the payment is made to the Participant.
The earnings allocable to excess Matching Contributions made on behalf
of the Participant during the Plan Year beginning January 1, 1987 shall be
equal to the amount of earnings attributable to the Participant's Matching
Contribution Account for the Allocation Period multiplied by a fraction, the
numerator
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of which is the excess Matching Contributions, and the denominator of which is
the Net Value of the Participant's Matching Contribution Account on the first
day of the Plan Year in which the payment is made to the Participant.
Commencing January 1, 1988, the earnings allocable to excess Basic
Contributions for an Allocation Period shall be equal to the sum of (a) plus
(b) where (a) and (b) are determined as follows:
(a) The amount of earnings attributable to the Participant's Basic
Contribution Account for the Plan Year multiplied by a fraction,
the numerator of which is the excess Basic Contributions and
Special Contributions for the Plan Year, and the denominator of
which is the sum of (i) the Net Value of the Participant's Basic
Contribution Account as of the last day of the immediately
preceding Plan Year and (ii) the contributions (including the
Excess Contributions) made to the Basic Contribution Account on
the Participant's behalf during such Plan Year.
(b) The amount of earnings attributable to the Participant's Basic
Contribution Account for the period commencing with the first day
of the Plan Year in which payment is made to the Participant and
ending with the date of payment to the Participant multiplied by
a fraction, the numerator of which is the excess Basic
Contributions and Special Contributions made to the Basic
Contribution Account on the Participant's behalf during the Plan
Year immediately preceding the Plan Year in which the payment is
made to the Participant, and the denominator of which is the Net
Value of the Participant's Basic Contribution Account on the
first day of the Plan Year in which the payment is made to the
Participant.
Commencing January 1, 1988, the earnings allocable to excess Matching
Contributions for an Allocation Period shall be equal to the sum of (A) and
(B) where (A) and (B) are determined as follows:
(A) The amount of earnings attributable to the Participant's Matching
Contribution account for the Plan Year multiplied by a fraction,
the numerator of which is the excess Matching Contributions for
the Plan Year, and the denominator of which is the sum of (I) the
Net Value of the Participant's Matching Contribution Account as
of the last day of the immediately preceding Plan Year and (II)
the contributions (including the Excess Contributions) made to
the Matching Contribution Account on the Participant's behalf
during such Plan Year.
(B) The amount of earnings attributable to the Participant's Matching
Contribution Account for the period commencing with the first day
of the Plan Year in which payment is made to the Participant and
ending with the date of payment to the Participant multiplied by
a fraction, the numerator of which is the excess Matching
Contributions made to the Matching Contribution Account on the
Participant's behalf during the Plan Year immediately preceding
the Plan Year in which the payment is made to the Participant,
and the denominator of which is the Net Value of the
Participant's Matching Contribution Account on the first day of
the Plan Year in which the payment is made to the Participant.
3.10 Payment of Contributions to the Trust and the Separate Agency
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As soon as possible after each payroll period, but not less often than
once a month, the Employer shall deliver (a) to the Trustees: (i) the Basic
Contributions required to be made to the Trust during such payroll period
under the applicable Compensation Reduction Agreements and (ii) the amount of
all Matching Contributions required to be made to the Trust for such payroll
period and (b) to the Separate Agency: (i) the Basic Contributions required
to be made to the Separate Agency during such payroll period under the
applicable Compensation Reduction Agreements and (ii) the amount of all
Matching Contributions required to be made to the Separate Agency for such
payroll period.
Special Contributions to the Trust and to the Separate Agency shall be
forwarded by the Employer to the Trustees and to the Separate Agency no later
than the time for filing the Employer's federal income tax return, plus any
extensions thereon, for the Plan Year to which they are attributable.
3.11 Rollover Contributions
Subject to such terms and conditions as may from time to time be
established by the Committee, the Trustees and the Separate Agency, an
Employee, whether or not a Participant, may contribute a Rollover
Contribution to the Plan Fund; provided, however, that (a) such Rollover
Contribution does not constitute a direct or indirect transfer from (i) any
defined benefit plan, (ii) any defined contribution plan subject to the
funding standards of Section 412 of the Code or (iii) any other defined
contribution plan as described in Section 401(a)(11)(8)(iii) of the Code; and
(b) such Employee shall submit a written certification, in form and substance
satisfactory to the Committee, that the contribution qualifies as a Rollover
Contribution. The Committee shall be entitled to rely on such certification
and shall accept the contribution on behalf of the Trustees and the Separate
Agency, as applicable. Rollover Contributions shall be credited to an
Employee's Rollover Contribution Account and shall be invested in accordance
with Article VI of the Plan.
3.12 Section 415 Limits on Contributions
(a) For purposes of this Section 3.11, the following terms and
phrases shall have the meanings hereafter ascribed to them:
(i) "Annual Additions" shall mean the sum of the following amounts
credited to a Participant's Accounts for the Limitation Year:
(A) Employer contributions, including Basic Contributions and Matching
Contributions; (6) any other Employee contributions; (C) Forfeitures; and (D)
contributions attributable to medical benefits as described in Sections
415(l)(1) and 419A(d)(2) of the Code.
Annual Additions include the following contributions credited to a
Participant's Accounts for the Limitation Year, regardless of whether such
contributions have been distributed to the Participant: (I) Basic
Contributions which exceed the limitations set forth in Section 3.2(a);
(II) Basic Contributions made on behalf of a Highly Compensated Employee
which exceed the limitations set forth in Section 3.2(b); and
(III) Matching Contributions made on behalf of a Highly Compensated
Employee which exceed the limitations set forth in Section 3.7.
(II) "Current Accrued Benefit" shall mean a Participant's annual accrued
benefit under a defined benefit plan, determined in accordance with the
meaning of Section 415(b)(2) of the Code, as if the Participant had separated
from service as of the close of the last Limitation Year beginning before
January
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1, 1987. In determining the amount of a Participant's Current Accrued Benefit,
the following shall be disregarded:
(A) any change In the terms and conditions of the defined benefit plan
after May 5, 1986; and
(B) any cost of living adjustment occurring after May 5, 1986.
"Defined Benefit Plan" and "Defined Contribution Plan" shall have the
meanings set forth in Section 415(k) of the Code.
(iv) "Defined Benefit Plan Fraction" for a Limitation Year shall mean a
fraction, (A) the numerator of which is the aggregate projected annual
benefit (determined as of the last day of the Limitation Year) of the
Participant under all defined benefit plans (whether or not terminated)
maintained by the Employer, and (B) the denominator of which is the lesser
of: (I) the product of 1.25 (or such adjustment as required under Section
12.5) and the dollar limitation in effect under Section 415(b)(1)(A) of the
Code, adjusted as prescribed by the Secretary of the Treasury under Section
415(d) or the Code, or (II) the product of 1.4 and the amount which may be
taken into account with respect to such Participant under Section
415(b)(1)(B) of the Code for such Limitation Year. Notwithstanding the
above, if the Participant was a participant In one or more defined benefit
plans of the Employer in existence on May 6, 1986, the dollar limitation of
the denominator of this fraction will not be less than the Participant's
Current Accrued Benefit.
(v) "Defined Contribution Plan Fraction" for a Limitation Year shall
mean a fraction, (A) the numerator of which is the sum of the Participant's
Annual Additions under all defined contribution plans (whether or not
terminated) maintained by the Employer for the current year and all prior
Limitation Years (including annual additions attributable to the
Participant's nondeductible employee contributions to all defined benefit
plans (whether or not terminated) maintained by the Employer), and (B) the
denominator of which is the sum of the maximum aggregate amounts for the
current year and all prior Limitation Years with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).
"Maximum aggregate amounts" shall mean the lesser of (I) the product of
1.25 (or such adjustment as required under Section 12.5) and the dollar
limitation in effect under Section 415(c)(1)(A) of the Code, adjusted as
prescribed by the Secretary of the Treasury under Section 415(d) of the Code,
or (II) the product of 1.4 and the amount that may be taken into account
under Section 415 (c)(1)(8) of the Code; provided, however, that the
Committee may elect, on a uniform and nondiscriminatory basis, to apply the
special transition rule of Section 415(e)(6) of the Code applicable to
Limitation Years ending before January 1, 1983 in determining the denominator
of the Defined Contribution Plan Fraction.
(vi) "Limitation Year" shall mean the calendar year.
(vii) "Section 415 Compensation" shall be a Participant's earned income,
wages, salaries, fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan, as provided in Income Tax Regulation Section
1.415-2(d).
(b) For purposes of applying the Section 415 limitations, the
Employer and all members of a controlled group of corporations (as defined under
Section 414(b) of the Code as modified by Section 415(h) of the Code), all
commonly controlled trades or businesses (as defined under Section 414(c) of the
Code as modified by Section 415(h) of the Code), all affiliated service groups
(as defined under Section
-20-
414(m) of the Code) of which the Employer is a member, any leasing organization
(as defined under Section 414(n) of the Code) that employs any person who is
considered an Employee under Section 414(n) of the Code and any other group
provided for under any and all Income Tax Regulations promulgated by the
Secretary of the Treasury under Section 414(o) of the Code, shall be treated as
a single employer.
(c) If the Employer maintains more than one qualified Defined Contribution
Plan on behalf of its Employees, such plans shall be treated as one Defined
Contribution Plan for purposes of applying the Section 415 limitations of the
Code.
(d) Notwithstanding anything contained in the Plan to the contrary, in no
event shall the Annual Additions to a Participant's Accounts for a Limitation
Year exceed the lesser of:
(i) $30,000 or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Section 415(b)(1)(A) of the Code as in effect for the
Limitation Year; or
(ii) 25% of the Participant's Section 415 Compensation for such Limitation
Year. For purposes of this subsection (d)(ii), Section 415 Compensation shall
not include (A) any contribution for medical benefits within the meaning of
Section 419A(f)(2) of the Code after separation from service, which is otherwise
treated as an Annual Addition, and (B) any amount otherwise treated as an Annual
Addition under Section 415(l)(1) of the Code.
(e) If the Annual Additions to a Participant's Accounts for a Limitation
Year exceed the limitation set forth in subsection (d) above during the
Limitation Year, any or all of the following contributions on behalf of such
Participant shall be immediately adjusted to that amount which will result in
such Annual Additions not exceeding the limitation set forth in subsection (d):
(i) Basic Contributions;
(ii) Special Contributions; and
(iii) Matching Contributions.
(f) If the Annual Additions to a Participant's Accounts for a
Limitation Year exceed the limitations set forth in subsection (d) above at
the end of a Limitation Year, such excess amounts shall not be treated as
Annual Additions in such Limitation Year but shall instead be used to reduce
the Basic Contributions, Matching Contributions and/or Special Contributions
to be made on behalf of such Participant in the succeeding Limitation Year,
provided that such Participant is an Eligible Employee during such succeeding
Limitation Year. If such Participant is not an Eligible Employee or ceases
to be an Eligible Employee during such succeeding Limitation Year, any
remaining excess amounts from the preceding Limitation Year shall be
allocated during such succeeding Limitation Year to each Participant then
actively participating in the Plan. Such allocation shall be in proportion to
the Basic Contributions made to date on his behalf for such Limitation Year,
or the prior Limitation Year with respect to an allocation as of the
beginning of a Limitation Year, before any other contributions are made in
such succeeding Limitation Year.
(g) If a Participant participates in both (1) the Plan and/or any other
defined contribution plan maintained by the Employer and (ii) any defined
benefit plan or plans maintained by the Employer, the sum of the Defined
Contribution Plan Fraction and the Defined Benefit Plan Fraction shall not
exceed the sum of 1.0.
(h) If the sum determined under subsection (g) for any Participant
exceeds 1.0, the Defined Benefit Plan Fraction of such Participant as
provided in the defined benefit plan or plans maintained by the
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Employer shall be reduced in order that such sum shall not exceed 1.0.I v
ARTICLE IV
Vesting and Forfeitures
4.1 Vesting
(a) An Employee shall always be fully vested in the Net Value of
his Basic Contribution Account and the Net Value of his Rollover Contribution
Account.
(b) A Participant shall become fully vested in the Net Value of
his Matching Contribution Account upon the earlier of such Participant's (i)
Normal Retirement Age or (ii) termination of employment by reason of death,
Disability or reaching his Retirement Date.
(c) A Participant who is not fully vested under subsection (b)
shall be vested in the Net Value of his Matching Contribution Account in
accordance with the following schedule:
Period of Service Vested Percentage@
Less than 1 year 0%
1 year but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 or more years 100%
For purposes of determining a Participant's Period of Service,
employment with an Affiliated Employer shall be deemed employment with the
Employer.
For purposes of determining a Participant's vested percentage of the Net
Value of his Matching Contribution Account, all Periods of Service shall be
included except the following:
(i) Periods of Service during which an Eligible Employee does not have
a Compensation Reduction Agreement in force; provided, however, that if a
Participant has suspended his Basic Contributions, such Periods of Service
shall not be disregarded;
(ii) Periods of Service prior to an Employee's attainment of age
eighteen (18);
(iii) Periods of Service during which the Employer did not maintain the
Plan; provided however, that if such Eligible Employee has a Compensation
Reduction Agreement in force as of June 1, 1986, a Period of Service of one
(1) year prior to June 1, 1986 shall not be disregarded.
Notwithstanding the provisions of the immediately preceding paragraph,
the vested percentage of a Participant who is an Employee on or after January
1, 1994, shall be determined based on such Participant's total Period of
Service, except Periods of Service prior to the Employee's attainment of age
eighteen (18).
(d) The vested Net Value of a Participant's Matching Contribution
Account, shall be determined as follows:
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(i) the Participant's Matching Contribution Account shall first be
increased to include
(A) that portion of such Account which had been previously withdrawn in
accordance with Section 7.3 and (6) that portion of such Account which had been
borrowed in accordance with Article VIII and is outstanding on the date of this
determination;
(II) the applicable vested percentage determined in accordance with
subsection (c) shall then be applied to the Account as determined in accordance
with clause (I);
(III) the amount determined in accordance with clause (II) shall then be
reduced by (A) that portion of such Account which had been previously withdrawn
in accordance with Section 7.3 and (B) that portion of such Account which had
been borrowed in accordance with Article VIII and is outstanding on the date of
this determination.
4.2 Forfeitures
If a Participant who is not fully vested in the Net Value of his Accounts
terminates employment, the Units representing the nonvested portion of his
Accounts shall constitute Forfeitures. Forfeitures shall be treated as Matching
Contributions and shall be applied to reduce the amount of subsequent Matching
Contributions otherwise required to be made.
If a former Participant who is not fully vested in the Net Value of his
Accounts receives a distribution of his vested interest in the Net Value of
his Accounts and is subsequently reemployed by the Employer prior to
incurring five (5) consecutive One Year Periods of Severance, he shall have
the Net Value of his Accounts as of the date he previously terminated
employment reinstated provided he repays the full amount of his distribution
in cash or cash equivalents before the end of the five (5) consecutive One
Year Periods of Severance commencing with his termination of employment. The
reinstated amount shall be unadjusted by any gains or losses occurring
subsequent to the Participant's termination of employment and prior to
repayment of such distribution. Any forfeited amounts required to be
reinstated hereunder shall be made by an additional Employer contribution for
such Plan Year. If such former Participant does not repay the full amount of
his distribution in cash or cash equivalents before the end of the five (5)
consecutive One Year Periods of Severance commencing with his termination of
employment, the Net Value of his Accounts as of the date he previously
terminated employment shall not be reinstated.
If a former Participant who is not fully vested in the Net Value of his
Accounts elects to defer distribution of his vested account interest, the
nonvested portion of such former Participant's Account shall be forfeited as
of the date of his Termination of Service; provided, however, that if such
former Participant is reemployed before incurring five (5) consecutive One
Year Periods of Severance, the nonvested portion of his Accounts shall be
reinstated in its entirety, unadjusted by any gains or losses occurring
subsequent to the distribution.
4.3 Vesting upon Reemployment
For the purpose of determining a Participant's vested interest in the Net
Value of his Matching Contribution Account:
(a) if an Employee is not vested in any Matching Contributions,
incurs a One Year Period of Severance and again performs an Hour
of Service, such Employee shall
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receive credit for his Periods of Service prior to his One Year
Period of Severance only if the number of consecutive One Year
Periods of Severance is less than the greater of: (i) five (5)
years or (ii) the aggregate number of his Periods of Service
credited before his One Year Period of Severance.
(b) if a Participant is partially vested in any Matching
Contributions, incurs a One Year Period of Severance and again
performs an Hour of Service, such Participant shall receive
credit for his Periods of Service prior to his One Year Period of
Severance; provided, however, that after five (5) consecutive One
Year Periods of Severance, a former Participant's vested interest
in the Net Value of the Matching Contribution Account
attributable to Periods of Service prior to his One Year Period
of Severance shall not be increased as a result of his Periods of
Service following his reemployment date.
(c) if a Participant is fully vested in any Matching Contributions,
incurs a One Year Period of Severance and again performs an Hour
of Service, such Participant shall receive credit for all his
Periods of Service prior to his One Year Period of Severance.
ARTICLE V
Trust Fund, Investment Accounts and Voting Rights
5.1 Trust Fund and Separate Assets
The Employer has adopted the Agreement as the funding vehicle with respect
to Investment Accounts. Commencing on the Conversion Date, the Employer has
adopted the Separate Agreement as the funding vehicle with respect to the
Employer Stock Fund.
All contributions forwarded by the Employer to the Trustees pursuant to
the Agreement shall be held by them in trust and shall be used to purchase
Units on behalf of the Plan in accordance with the terms and provisions of
the Agreement. Contributions designated for investment in any Investment
Account of the Plan Funds shall be allocated proportionately to and among the
classes of Units so selected for such Investment Account.
Commencing on the Conversion Date, all contributions forwarded by the
Employer to the Separate Agency pursuant to the Plan and the Separate
Agreement shall be held by it in trust in accordance with the terms and
provisions of the Separate Agreement.
All assets of the Plan shall be held for the exclusive benefit of
Participants, Beneficiaries or other persons entitled to benefits. No part
of the corpus or income of the Plan Funds shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants, Beneficiaries
or other persons entitled to benefits and for defraying reasonable
administrative expenses of the Plan, Trust and the Separate Agency. No
person shall have any interest in or right to any part of the earnings of the
Plan Funds, or any rights in, to or under the Plan Funds or any part of its
assets, except to the extent expressly provided in the Plan.
The Trustees and the Separate Agency shall invest and reinvest the Plan
Funds, and the income therefrom, without distinction between principal and
income, in accordance with the terms and provisions
-24-
of the Agreement and Separate Agreement, respectively. The Trustees and the
Separate Agency may maintain such part of the Trust Fund and the Separate
Assets, respectively, in cash uninvested as they shall deem necessary or
desirable. The Trustees shall be the owner of and have title to all the assets
of the Plan Funds other than the Separate Assets and shall have full power to
manage the same, except as otherwise specifically provided in the Agreement.
The Separate Agency shall be the owner of and shall have title to the Separate
Assets, and shall have full power to manage the same, except as otherwise
specifically provided in the Separate Agreement.
5.2 Investment Accounts
Commencing April 28, 1995, this Section 5.2 shall no longer apply.
(a) The Trust Fund shall consist of the Investment Accounts A, 6, C
and D which shall generally have the following composition:
(i) Account A - (Core Equity Fund): Primarily common stocks of
medium to large market capitalized companies and investments convertible into
common stocks of such companies.
(ii) Account B - (1/2 Emerging Growth Equity Fund; 1/2 Value
Equity Fund): Common stocks of rapidly growing, emerging companies and common
stocks of companies perceived by the investment manager to be undervalued and
investments convertible into common stocks of such companies.
(iii) Account C - (113 Intermediate-Term Bond Fund; 213
Actively Managed Bond Fund:
Bonds, notes, debentures, mortgages and other fixed income investments.
(iv) Account D - (Short-Term Investment Fund): Bonds, notes,
debentures and government securities whose dollar weighted average maturity
shall not exceed one (1) year.
(b) The securities and other property in which any contributions of the
Investment Accounts of the Trust Fund may be invested shall be specified in the
Agreement and the rights of the Trustees shall be established in accordance with
the provisions of such Agreement.
(c) Contributions designated for investment in any Investment Account of
the Trust Fund shall be allocated proportionately to and among the classes of
Units so selected for such Investment Account.
5.3 Interim Investments
Notwithstanding the provisions of Section 5.2, the Trustees may
temporarily invest any amounts designated for investment in any of the
Investment Accounts of the Trust Fund identified herein in (a) prior to April
28, 1995, Investment Account D or other Investment Accounts providing
short-term investments and (b) commencing April 28, 1995, in the Investment
Account which provides for short-term investments, and retain the value of
such contributions therein pending the allocation of such values to the
Investment Accounts designated for investment. The Separate Agency may
temporarily invest any amounts in short-term investment pending investment in
the Employer Stock Fund.
5.4 Account Values
The Net Value of the Accounts of an Employee means the sum of the total
Net Value of each
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Account maintained on behalf of the Employee in the Trust and Separate Agency as
determined as of the Valuation Date coincident with or next following the event
requiring the determination of such Net Value. The assets of any Account shall
consist of the Units credited to such Account. The applicable Units shall be
valued from time to time by the Trustees and Separate Agency, respectively, in
accordance with the Agreement and Separate Agreement, but not less often than
monthly. On the basis of such valuations, each Employee's Accounts shall be
adjusted to reflect the effect of income collected and accrued, realized and
unrealized profits and losses, expenses and all other transactions during the
period ending on the applicable Valuation Date.
Upon receipt by the Trustees of Basic Contributions, Matching
Contributions, and, if applicable, Rollover Contributions and Special
Contributions, and commencing on the Conversion Date, upon receipt by a
Separate Agency of any Basic Contributions, Matching Contributions, and, if
applicable, Rollover Contributions and Special Contributions, such
contributions shall be applied to purchase for such Employee's Account, (a)
Units other than Units of the Employer Stock Fund, using the value of such
Units as of the close of business on the date received and (b) Units of the
Employer Stock Fund, using the value of such Units as of the close of
business on the date received. Whenever a distribution or withdrawal is made
to a Participant, Beneficiary or other person entitled to benefits, the
appropriate number of Units credited to such Employee shall be reduced
accordingly and each such distribution or withdrawal shall be charged against
the Units of the Investment Accounts of such Employee pro rata according to
their respective values.
For the purposes of this Section 5.4, fractions of Units computed to
four decimal places as well as whole Units may be purchased or redeemed for
the Account of an Employee.
5.5 Voting Rights
Each Participant with Units in the Employer Stock Fund shall have the
right to participate confidentially in the exercise of voting rights
appurtenant to shares held in such Investment Account, provided that such
person had Units in such Account as of the most recent Valuation Date
coincident with or preceding the applicable record date for which records are
available. Such participation shall be achieved by completing and filing
with the inspector of elections, or such other person who shall be
independent of the issuer of shares as the Committee shall designate, at
least ten (10) days prior to the date of the meeting of holders of shares at
which such voting rights will be exercised, a written direction in the form
and manner prescribed by the Committee. The inspector of elections, or other
such person designated by the Committee shall tabulate the directions given
on a strictly confidential basis, and shall provide the Committee with only
the final results of the tabulation. The final results of the tabulation
shall be followed by the Committee in the direction as to the manner in which
such voting rights shall be exercised. As to each matter in which the
holders of shares are entitled to vote:
(a) a number of affirmative votes shall be cast equal to the product of:
(i) the total number of shares held in the Employer Stock Fund as of the
applicable record date; and
(ii) a fraction, the numerator of which is the aggregate value (as of the
Valuation Date coincident with or immediately preceding the applicable
record date) of the Units in the Employer Stock Fund of all persons
directing that an affirmative vote be cast, and the denominator of which is
the aggregate value (as of the Valuation Date coincident with or
immediately preceding the applicable record date) of the Units in the
Employer Stock Fund of all persons directing that an affirmative or
negative
-26-
vote be cast; and
(b) a number of negative votes shall be cast equal to the product of:
(i) the total number of shares held in the Employer Stock Fund as of
the applicable record date; and
(ii) a fraction, the numerator of which is the aggregate value (as of
the Valuation Date coincident with or immediately preceding the
applicable record date) of the Units in the Employer Stock Fund of all
persons directing that a negative vote be cast, and the denominator of
which is the aggregate value (as of the Valuation Date coincident with
or immediately preceding the applicable record date) of the Units in
the Employer Stock Fund of all persons directing that an affirmative
or negative vote be cast.
The Committee shall furnish, or cause to be furnished, to each person
with Units in the Employer Stock Fund, all annual reports, proxy materials
and other information known to have been furnished by the issuer of the
shares or by any proxy solicitor, to the holders of shares.
5.6 Tender Offers and Other Offers
Each Participant with Units in the Employer Stock Fund shall have the
right to participate confidentially in the response to a tender offer, or any
other offer, made to the holders of shares generally, to purchase, exchange,
redeem or otherwise transfer shares; provided that such person has Units in
the Employer Stock Fund as of the Valuation Date coincident with or
immediately preceding the first day for delivering shares or otherwise
responding to such tender or other offer. Such participation shall be
achieved by completing and filing with the inspector of elections, or such
other person who shall be independent of the issuer of shares as the
Committee shall designate, at least ten (10) days prior to the last day for
delivering shares or otherwise responding to such tender or other offer, a
written direction in the form and manner prescribed by the Committee. The
inspector of elections, or other such person designated by the Committee
shall tabulate the directions given on a strictly confidential basis, and
shall provide the Committee with only the final results of the tabulation.
The final results of the tabulation shall be followed by the Committee in the
direction as to the number of shares to be delivered. On the last day for
delivering shares or otherwise responding to such tender or other offer, a
number of shares equal to the product of:
(a) the total number of shares held in the Employer Stock Fund; and
(b) a fraction, the numerator of which is the aggregate value (as of the
Valuation Date coincident with or immediately preceding the first day for
delivering shares or otherwise responding to such tender or other offer) of
the Units in the Employer Stock Fund of all persons directing that shares
be delivered in response to such tender or other offer, and the denominator
of which is the aggregate value (as of the Valuation Date coincident with
or immediately preceding the first day for delivering shares or otherwise
responding to such tender or other offer) of the Units in the Employer
Stock Fund of all persons directing that shares be delivered or that the
delivery of shares be withheld;
shall be delivered in response to such tender or other offer. Delivery of the
remaining shares then held in the Employer Stock Fund shall be withheld. The
Committee shall furnish, or cause to be furnished, to each
-27-
person whose Account is invested in whole or in part in the Employer. Stock
Fund, all information concerning such tender offer furnished by the issuer of
shares, or information furnished by or on behalf of the person making the tender
or such other offer.
5.7 Dissenters' Rights
Each Participant with Units in the Employer Stock Fund shall have the
right to participate confidentially in the decision as to whether to exercise
the Dissenters' rights appurtenant to shares held in such Investment Account,
provided that such person had Units in such Account as of the most recent
Valuation Date coincident with or preceding the applicable record date for
which records are available. Such participation shall be achieved by
completing and filing with the inspector of elections, or such other person
who shall be independent of the issuer of shares as the Committee shall
designate, at least ten (10) days prior to the date of the meeting of holders
of shares at which such dissenters' rights will be exercised, a written
direction in the form and manner prescribed by the Committee. The inspector
of elections, or other such person designated by the Committee shall tabulate
the directions given on a strictly confidential basis, and shall provide the
Committee with only the final results of the tabulation. The final results
of the tabulation shall be followed by the Committee in the directions as to
the manner in which such dissenters' rights shall be exercised. As to each
matter in which the holders of shares are entitled to exercise dissenters'
rights, the number of shares for which dissenters' rights will be exercised
shall be equal to the product of:
(a) the total number of shares held in the Employer Stock Fund as of the
applicable record date; and
(b) a fraction, the numerator of which is the aggregate value (as of the
Valuation Date coincident with or immediately preceding the applicable
record date) of the Units in the Employer Stock Fund of all persons
directing that the dissenters' rights appurtenant to which shares be
exercised, and the denominator of which is the aggregate value (as of the
Valuation Date coincident with or immediately preceding the applicable
record date) of all of the Units in the Employer Stock Fund.
Dissenters' rights shall not be exercised with respect to the remaining shares
held in the Employer Stock Fund.
5.8 Separate Assets
Subject to the terms and conditions of the Agreement and upon approval
by the Trustees, a designated portion of the assets of the Plan may be held
as Separate Assets under the Separate Agreement pursuant to investment
elections made by Plan Participants from time to time. The Trustees shall
have no responsibility or liability with respect to the management and
control of any Separate Assets and shall have only those administrative
duties with respect to such Separate Assets as are set forth in the Plan and
the Agreement.
5.9 Power to Invest in Employer Securities
The Committee may direct the Separate Agency to acquire or hold any
security issued by the Employer or any Affiliated Employer which is a
"qualifying employer security" as such term is defined under ERISA and to invest
that portion of the assets of the Plan Funds in such securities.
ARTICLE VI
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Investment Directions, Changes of Investment Directions
and Transfers Between Investment Accounts
6.1 Investment Directions
Upon electing to participate, each Participant shall direct that the
contributions made to his Accounts shall be applied to purchase Units in any
one or more of the Investment Accounts of the Trust Fund and commencing on
the Conversion Date, purchase Units in the Employer Stock Fund. Such
direction, if made prior to April 28, 1995, shall indicate the percentage, in
multiples of twenty-five percent (25%), in which Basic Contributions,
Matching Contributions, Special Contributions and Rollover Contributions
shall be made to the designated Investment Accounts. Such direction, if made
on or after April 28, 1995, shall indicate the percentage, in multiples of
one percent (1%), in which such contributions shall be made to the designated
Investment Accounts.
To the extent a Participant shall fail to make an investment direction,
contributions made on his behalf shall be applied to purchase Units in the
Investment Account which provides for short-term investments.
6.2 Change of Investment Directions
A Participant may change any investment direction not more often than
two (2) times in any Plan Year by completing and filing a notice in the form
and manner prescribed by the Committee at least ten (10) days prior to the
effective date of such direction. Commencing January 1, 1994, a Participant
may change any investment direction not more often than once in any calendar
quarter by completing and filing a notice in the form and manner prescribed
by the Committee at least ten (10) days prior to the effective date of such
direction. Participants in the Plan on April 28, 1995 shall be permitted to
make one (1) additional change in investment direction within sixty (60) days
of such date and such additional election shall not count as one (1) of the
investment directions that are otherwise permitted to be made in any Plan
Year. If no change is made hereunder, such Participant shall continue in the
investment direction last effective, with respect to each Investment Account
previously elected, notwithstanding the percentage requirements for
investments set forth in Section 6.1. Participants in the Plan on the
Conversion Date shall be permitted to make one (1) additional change in
investment direction in order to invest in the Employer Stock Fund within
sixty (60) days of such date and such additional election shall not count as
one (1) of the changes in investment direction that are otherwise permitted
to be made in any Plan Year. Any such change shall be subject to the same
conditions as if it were an initial direction and shall be applied only to
any contributions to be invested on or after the effective date of such
direction.
6.3 Transfers Between Investment Accounts
By filing a notice in the form and manner prescribed by the Committee at
least ten (10) days prior tot he effective date of such change, a Participant
or Beneficiary may, not more often than once in any calendar quarter,
redirect the investment of his Investment Accounts to one or more other
Investment Accounts, such that the Net Value of any one or more of such
accounts shall be in multiples of twenty-five percent (25%). Commencing
April 28, 1995, a Participant or Beneficiary may, not more often than once in
any calendar quarter, redirect the investment of his Investment Accounts such
that a percentage of any one or more Investment Accounts may be transferred
to any one or more other Investment Accounts. Participants in the Plan on
April 28, 1995 shall be permitted to redirect the investment, as described
above, one (1) additional time within sixty (60) days of such date and such
additional transfer shall not count as one (1) of the transfers that are
otherwise permitted to be made in any Plan Year. Participants in the Plan on
the Conversion Date shall be permitted to make one (1) additional transfer in
order to invest in the Employer
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Stock Fund within sixty (60) days of such date and such additional transfer
shall not count as one (1) of the transfers that are otherwise permitted to be
made in any Plan Year. The requisite transfers shall be valued as of the
Valuation Date on which the direction is received by the Trustees and shall be
affected within seven (7) days of the Trustees' receipt of such direction.
6.4 Employees Other than Participants
(a) Investment Direction
An Employee who is not a Participant but who has made a Rollover
Contribution in accordance with the provisions of Section 3.11, shall direct,
in the form and manner prescribed by the Committee, that such contribution be
applied to the purchase of Units in any one or more of the Investment
Accounts, and commencing on the Conversion Date, to purchase Units in the
Employer Stock Fund. Such direction, if made on or after April 28, 1995,
shall indicate the percentage, in multiples of one percent (1%), in which
contributions shall be made to the designated Investment Accounts.
To the extent any Employee shall fail to make an investment direction,
the Rollover Contributions shall be applied to the purchase of Units in the
Investment Account which provides for short-term investments.
(b) Transfers Between Investment Accounts
An Employee who is not a Participant may, subject to the provisions of
Section 6.3, not more often than once in any calendar quarter, redirect the
investment of his Investment Accounts to one or more other Investment
Accounts, such that the Net Value of any one or more of such accounts shall
be in multiples of twenty-five percent (25%). Commencing April 28, 1995, an
Employee who is not a Participant may, subject to the provisions of Section
6.3, not more often than once in any calendar quarter, redirect the
investment of his Investment Accounts such that a percentage of any one or
more Investment Accounts may be transferred to any one or more other
Investment. Employees subject to this Section 6.4 on April 28, 1995 shall be
permitted to redirect the investment, as described above, one (1) additional
time within sixty (60) days of such date and such additional transfer shall
not count as one (1) of the transfers that are otherwise permitted to be made
in any Plan Year. Commencing on the Conversion Date, an Employee who is not
a Participant in the Plan shall be permitted to make one (1) additional
transfer in order to invest in the Employer Stock Fund within sixty (60) days
of such date and such additional transfer shall not count as one (1) of the
transfers that are otherwise permitted to be made in any Plan Year. The
requisite transfers shall be valued as of the Valuation Date on which the
direction is received by the Trustees and shall be affected within seven (7)
days of the Trustees' receipt of such direction.
6.5 Restrictions on Investments in the Employer Stock Fund for Certain
Participants
Notwithstanding anything in the Plan to the contrary, any Participant
subject to the provisions of Section 16(b) of the Securities Exchange Act of
1934 may be subject to Section 16(b) liability if such Participant has an
intra-plan transfer, in accordance with the provisions of Section 6.3 and/or
Section 6.4, involving the Employer Stock Fund within six (6) months of the next
preceding transfer into or out of the Employer Stock Fund. In addition, any
Participant subject to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 who elects to receive a cash distribution from his Employer
Stock Fund account under the Plan, including redemption of such stock for
purposes of cash withdrawals under Section 7.2 and/or Section 7.3 and/or loans
under Article VIII, may similarly be subject to Section 16(b) liability for any
short swing profits within six (6) months of the next preceding transfer into or
out of the Employer Stock Fund.
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However, unless otherwise required by rules and regulations of the
Securities and Exchange Commission, Section 16(b) liability will not result
from distributions made in connection with a Participant's death, Disability,
termination of employment or retirement; pursuant to a domestic relations
order described under Section 414(p) of the Code; as a result of the minimum
distribution requirements described under Section 401(a)(9) of the Code; or
as a result of the limitations described under Sections 401(k), 401(m),
402(g) and 415 of the Code.
ARTICLE VII
Payment of Benefits
7.1 General
(a) The vested interest in the Net Value of any one or more of the
Accounts of a Participant, Beneficiary or any other person entitled to benefits
under the Plan shall be paid only at the times, to the extent, in the manner,
and to the persons provided in this Article.
(b) Notwithstanding the foregoing, if payments are to be made on a
monthly basis and if, in the judgment of the Committee, payments are too small
to warrant monthly payments, the Committee, in its sole discretion, may
determine to make such payments in a lump sum or in quarterly, semi-annual, or
annual installments.
(c) The Net Value of any one or more of the Accounts of a Participant
shall be subject to the provisions of Section 8.6.
(d) Notwithstanding any provisions of the Plan to the contrary, any
and all withdrawals, distributions or payments made under the provisions of this
Article VII shall be made in accordance with Section 401(a)(9) of the Code and
any and all Income Tax Regulations promulgated thereunder.
(e) Distributions from the Employer Stock Fund under this Article
VII, shall be made in accordance with Section 7.10 hereunder.
7.2 Non-Hardship Withdrawals
(a) Subject to the terms and conditions contained in this Section
7.2, upon ten (10) days prior written notice to the Committee each
Participant who has attained age 59-1/2 shall be entitled to withdraw not
more often than twice during any Plan Year all or any portion of the Net
Value of his Basic Contribution Account.
(b) Withdrawals under this Section 7.2 shall be made in the following
order of priority:
(i) by the redemption of Units from the Participant's Basic Contribution
Account in the Trust Fund, on a pro rata basis from the Investment Accounts
thereunder, as were selected by the Participant pursuant to Article VI; and
(ii) by the redemption of Units invested in the Employer Stock Fund from
the Participant's Basic Contribution Account invested under the Separate
Agreement, if selected by the Participant pursuant to Article VI.
(c) Any withdrawals under this Section 7.2 shall be subject to the
restrictions of Section
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6.5.
7.3 Hardship Distributions
(a) For purposes of this Section 7.3, a "Hardship" distribution shall
mean a distribution that is (i) made on account of a condition which has given
rise to immediate and heavy financial need of a Participant and
(ii) necessary to satisfy such financial need. A determination of the
existence of an immediate and heavy financial need and the amount necessary to
meet the need shall be made by the Committee in accordance with uniform
nondiscriminatory standards with respect to similarly situated persons.
(b) Immediate and Heavy Financial Need:
A Hardship distribution shall be deemed to be made on account of an
immediate and heavy financial need if the distribution is on account of:
(i) medical expenses described in Section 213(d) of the Code which are
incurred by the Participant, the Participant's Spouse or any of the
Participant's dependents as defined in Section 152 of the Code; provided that,
commencing January 1, 1994, such expenses shall be for medical care described
under Section 213(d) of the Code which were previously incurred by the Employee,
the Employee's Spouse or any of the Employee's dependents as defined under
Section 152 of the Code or expenses which are necessary to obtain medical care
described under Section 213(d) of the Code for the Employee, the Employee's
Spouse or any of the Employee's dependents as defined under Section 152 of the
Code; or
(ii) purchase (excluding mortgage payments) of a principal residence of
the Participant; or
(iii) payment of tuition for the next semester or quarter of
post-secondary education for the Participant, the Participant's Spouse,
children or dependents; provided that, commencing January 1, 1994, such
payments shall be for tuition and related educational fees for the next
twelve (12) months of post-secondary education for the Employee, the
Employee's Spouse, children or any of the Employee's dependents as defined
under Section 152 of the Code; or
(iv) the need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
(v) for Plan Years prior to January 1, 1989, a condition which the
Committee, in its sole and absolute discretion, determined (in accordance
with Proposed Income Tax Regulation Section 1.401(k)-I(d)(2) published on
November 10, 1981) had given rise to a hardship distribution;
(vi) any other condition which the Commissioner of Internal Revenue,
through the publication of revenue rulings, notices and other documents of
general applicability, deems to be an immediate and heavy financial need.
(c) Necessary to Satisfy Such Financial Need:
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(i) A distribution will not be treated as necessary to satisfy an
immediate and heavy financial need of a Participant to the extent the amount of
the distribution is in excess of the amount required to relieve the financial
need or to the extent such need may be satisfied from other resources that are
reasonably available to the Participant. Commencing January 1, 1994, a
distribution will be treated as necessary to satisfy an immediate and heavy
financial need of an Employee if: (A) the amount of the distribution is not in
excess of (1) the amount required to relieve the financial need of the Employee
and (2) if elected by the Employee, an amount necessary to pay any federal,
state or local income taxes or penalties reasonably anticipated to result from
such distribution, and (B) such need may not be satisfied from other resources
that are reasonably available to the Employee.
(ii) Commencing January 1, 1989, a distribution will be treated as
necessary to satisfy a financial need if the Committee reasonably relies upon
the Participant's representation that the need cannot be relieved:
(A) through reimbursement or compensation by insurance or otherwise,
(B) by reasonable liquidation of the Participant's assets, to the
extent such liquidation would not itself cause an immediate and heavy financial
need,
(C) by cessation of Basic Contributions or Employee contributions, if
any, under the Plan, or
(D) by other distributions or nontaxable loans from plans maintained by
the Employer or by any other employer, or by borrowing from commercial
sources on reasonable commercial terms.
For purposes of this subsection (c)(ii), the Participant's resources
shall be deemed to include those assets of his Spouse and minor children that
are reasonably available to the Participant.
(iii) Alternatively, commencing January 1, 1989, a Hardship
distribution will be deemed to be necessary to satisfy an immediate and heavy
financial need of a Participant if
(A) or (B) are met:
(A) all of the following requirements are satisfied:
(I) the distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant; and commencing January 1, 1994,
the distribution is not in excess of (1) the amount of the immediate and
heavy financial need of the Employee and (2) if elected by the Employee, an
amount necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from such distribution;
(II) the Participant has obtained all distributions, other than Hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer;
(III) the Plan, and all other plans maintained by the Employer, provide
that the Participant's elective contributions and Employee contributions, if
any, will be suspended for at least twelve (12) months after receipt of the
Hardship distribution; and
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(IV) the Plan, and all other plans maintained by the Employer, provide
that the Participant may not make elective contributions for the
Participant's taxable year immediately following the taxable year of the
Hardship distribution in excess of the applicable limit under Section 402(g)
of the Code for such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the Hardship distribution; or
(B) the requirements set forth in additional methods, if any,
prescribed by the Commissioner of Internal Revenue (through the publication
of revenue rulings, notices and other documents of general applicability) are
satisfied.
(d) A Participant who has withdrawn the maximum amounts available to
such Participant under Section 7.2 or a Participant who is not eligible for a
withdrawal thereunder, may, In case of Hardship (as defined in this Section
7.3), apply not more often than twice in any Plan Year to the Committee for a
Hardship distribution. Any application for a Hardship distribution shall be
made in writing to the Committee at least ten (10) days prior to the
requested date of payment. Prior to January 1, 1989, Hardship distributions
shall be made by a distribution of all or a portion of the Net Value of his
Basic Contribution Account, plus all or a portion of the vested Net Value of
his Matching Contribution Account. Commencing January 1, 1989, Hardship
distributions may be made by a distribution of all or a portion of (i) an
Employee's Basic Contributions, (ii) earnings on Basic Contributions which
accrued prior to January 1, 1989, and (iii) all or a portion of his vested
interest in the Net Value of his Matching Contribution Account.
(e) Prior to January 1, 1989, distributions under this Section 7.3
shall be made in the following order of priority:
(i) the Net Value of the Participant's Basic Contribution Account; and
(ii) the vested interest in the Net Value of the Participant's Matching
Contribution Account.
Commencing January 1, 1989 and, distributions under this Section 7.3
shall be made in the following order of priority:
(A) Participant's Basic Contributions and earnings on Basic
Contributions which accrued prior to January 1, 1989; and
(B) the vested interest in the Net Value of the Participant's Matching
Contribution Account.
(f) Distributions under this Section 7.3 shall be made in the following
order of priority:
(i) by the redemption of Units from that portion of the applicable
Employee's Accounts which are specified in Section 7.3(d), above, in the
order set forth in Section 7.3(e), on a pro rata basis from among the
Investment Accounts, thereunder, other than the Employer Stock Fund,
selected by the Employee pursuant to Article VI; and
(ii) by the redemption of Units invested in the Employer Stock Fund from
that portion of the applicable Participant's Accounts which are specified
in Section 7.3(d), above, invested under the Separate Agreement, in the
order set forth in Section 7.3(e), as selected by the Employee pursuant to
Article VI.
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(g) A Participant who receives a Hardship distribution under this
Section 7.3 may have his Basic Contributions suspended in accordance with
Section 3.3.
(h) Any withdrawals under this Section 7.3 shall be subject to the
restrictions of Section 6.5.
7.4 Distribution of Benefits Following Retirement or Termination of
Service
(a) if an Employee incurs a Termination of Service for any reason other
than death, a distribution of the. vested interest in the Net Value of his
Accounts shall be made to the Employee in accordance with the provisions of
Section 7.5 or 7.6. The amount of such distribution shall be the vested
interest in the Net Value of his Accounts as of the Valuation Date coincident
with the date of receipt by the Trustees of the proper documentation
acceptable to the Trustees for such purpose.
(b) An election by an Employee to receive the vested interest in the
Net Value of his Accounts in a form other than in the normal form of benefit
payment set forth in Sections 7.5(a) and (b) and Sections 7.6(a) and (b) may
not be revoked or amended by him after he terminates his employment.
Notwithstanding the foregoing, an Employee who elected to receive payment of
benefits as of a deferred Valuation Date or in the form of installments, may,
by completing and filing the form prescribed by the Committee, change to
another form of benefit payment.
(c) An Employee who incurs a Termination of Service and is reemployed
by the Employer prior to the distribution of All or part of the entire vested
interest in the Net Value of his Accounts in accordance with the provisions
of Section 7.5 or 7.6, shall not be eligible to receive or to continue to
receive such distribution during his period of reemployment with the
Employer. Upon such Employee's subsequent Termination of Service, his prior
election to receive a distribution in a form other than the normal form of
benefit payment shall be null and void and the vested interest in the Net
Value of his Accounts shall be distributed to him in accordance with the
provisions of Section 7.5 or 7.6.
(d) An Employee's vested interest in the Net Value of his Accounts in
the Employer Stock Fund shall be distributed to the Participant, in
accordance with the provisions of Sections 7.5 and 7.6, by the Separate
Agency as soon as administratively possible following the date the Employer
is informed by the Trustees of the Participant's vested interest in such
Investment Accounts. The distribution shall be made in accordance with
Section 7.10 and the terms and provisions of the Separate Agreement.
7.5 Payments Upon Retirement Or Disability
(a) If an Employee incurs a Termination of Service as of a Retirement
Date or if an Employee incurs a Termination of Service due to Disability and
the vested Interest in the Net Value of the Employee's Accounts is equal to
or less than $3,500, a lump sum distribution of the vested interest in the
Net Value of his Accounts shall be made to the Employee within seven (7) days
of the Valuation Date coincident with the date of receipt by the Trustees of
the proper documentation indicating the date the Employee incurred a
Termination of Service.
(b) If an Employee incurs a Termination of Service as of his Normal
Retirement Date or his Postponed Retirement Date and the vested interest in
the Net Value of the Employee's Accounts exceeds $3,500, a lump sum
distribution of the Net Value of his Accounts shall be made to the Employee
within seven (7) days of the Valuation Date coincident with the date of
receipt by the Trustees of the proper documentation indicating that the
Employee incurred a Termination of Service as of such Retirement
-35-
Date.
(c) If an Employee incurs a Termination of Service as of his Early
Retirement Date or if an Employee incurs a Termination of Service due to
Disability, has not elected to receive his benefit pursuant to an optional
form of benefit payment in accordance with the provisions of subsection (d)
or (e) and the vested interest in the Net Value of the Employee's Accounts
exceeds $3,500, a lump sum distribution of the vested interest in the Net
Value of his Accounts shall be made to the Employee within seven (7) days of
the Valuation Date coincident with the date of receipt by the Trustees of the
proper documentation indicating the date the Employee would have attained his
Normal Retirement Date if he were still employed by the Employer.
(d) In lieu of the normal form of benefit payment set forth in
subsections (b) and (c), an Employee who incurs a Termination of Service as
of a Retirement Date or incurs a Termination of Service due to Disability
may, subject to the provisions of Sections 7.9(b) and 7.9(c), file an
election form to receive the vested interest in the Net Value of his Accounts
as a lump sum distribution as of some other Valuation Date following his
termination; provided, however, that the Valuation Date may not be later than
thirteen (13) months following his Termination of Service. Subject to the
required minimum distribution provisions of Sections 7.9(b) and 7.9(c), the
vested interest in the Net Value of his Accounts shall be distributed to such
Employee as a lump sum distribution within seven (7) days of the Valuation
Date coincident with the date of receipt by the Trustees of the proper
documentation indicating the Employee's distribution date.
(e) In lieu of the normal form of benefit payment set forth in
subsections (b) and (c), an Employee who incurs a Termination of Service as
of a Retirement Date or incurs a Termination of Service due to Disability
may, subject to the required minimum distribution provisions of Sections
7.9(b) and 7.9(c), file an election form to receive the vested interest in
the Net Value of his Accounts in the form of installments over a period not
to exceed twenty (20) years. The vested interest in the Net Value of his
Accounts shall be determined as of such Valuation Date or Valuation Dates in
each such Plan Year as may be elected by such Employee and shall be based on
the respective values of the Employee's Units in each Investment Account as
of such Valuation Date or Valuation Dates. The amount of the installment
payment shall be distributed by the redemption of Units from the Employee's
Accounts on a pro-rata basis among such Employee's Investment Accounts. Any
portion of the vested interest in the Net Value of the Accounts of such
former Employee which shall not have been so paid shall continue to be held
for his benefit or for the benefit of his Beneficiary in the Employee's
Investment Accounts. If an Employee elects to receive his benefit pursuant
to this subsection (e), the installment period may not extend beyond the life
expectancy of such Employee or the life expectancy of such Employee and his
Beneficiary.
7.6 Payments Upon Termination of Service For Reasons Other Than
Retirement or Disability
(a) If an Employee Incurs a Termination of Service as of a date other
than a Retirement Date or for reasons other than Disability, and the vested
interest in the Net Value of the Employee's Accounts is equal to or less than
$3,500, a lump sum distribution of the vested interest in the Net Value of
his Accounts shall be made to the Employee within seven (7) days of the
Valuation Date coincident with the date of receipt by the Trustees of the
proper documentation indicating the date the Employee incurred a Termination
of Service.
(b) If an Employee incurs a Termination of Service as of a date other
than a Retirement Date or for reasons other than Disability, has not elected
to receive his benefit pursuant to an optional form
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of benefit payment in accordance with the provisions of subsection
(c) and the vested interest in the Net Value of the Employee's Accounts
exceeds $3,500, a lump sum distribution of the vested interest in the Net
Value of his Accounts shall be made to the Employee within seven (7) days of
the Valuation Date coincident with the date of receipt by the Trustees of the
proper documentation indicating the date the Employee would have attained his
Normal Retirement Date if he were still employed by the Employer.
(c) In lieu of the normal form of benefit payment set forth in
subsection (b), an Employee who incurs a Termination of Service as of a date
other than a Retirement Date or for reasons other than Disability may file an
election form to receive the vested interest in the Net Value of his Accounts
as an immediate lump sum distribution following his termination. The vested
interest in the Net Value of his Accounts shall be distributed to such
Employee as a lump sum distribution within seven (7) days of the Valuation
Date coincident with the date of receipt by the Trustees of the proper
documentation Indicating the Employee's distribution date.
7.7 Payments upon Death
(a) In the case of a married Participant, the Spouse shall be the
designated Beneficiary. Notwithstanding the foregoing, such Participant may
effectively elect to designate a person or persons other than the Spouse as
Beneficiary. Such an election shall not be effective unless (I) such
Participant's Spouse irrevocably consents to such election in writing, (II) such
election designates a Beneficiary which may not be changed without spousal
consent or the consent of the Spouse expressly permits designation by the
Participant without any requirement of further consent by the Spouse, (III) the
Spouse's consent acknowledges understanding of the effect of such election and
(iv) the consent is witnessed by a Plan representative or acknowledged before a
notary public. Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of the Plan representative that such written
consent cannot be obtained because there is no Spouse or the Spouse cannot be
located, the consent hereunder shall not be required. Any consent necessary
under this provision shall be valid only with respect to the Spouse who signs
the consent.
(b) In the case of a single Participant, Beneficiary means a person or
persons who have been designated under the Plan by such Participant or who
are otherwise entitled to a benefit under the Plan.
(c) The designation of a Beneficiary who is other than a Participant's
Spouse and the designation of any contingent Beneficiary shall be made in
writing by the Participant in the form and manner prescribed by the Committee
and shall not be effective unless filed prior to the death of such person.
If more than one person is designated as a Beneficiary or a contingent
Beneficiary, each designated Beneficiary in such Beneficiary classification
shall have an equal share unless the Participant directs otherwise. For
purposes of this Section, "person" includes an individual, a trust, an
estate, or any other person or entity designated as a Beneficiary.
(d) A married Participant who has designated a person or persons other
than the Spouse as Beneficiary may, without the consent of such Spouse,
revoke such prior election by submitting written notification of such
revocation. Such revocation shall result in the reinstatement of the Spouse
as the designated Beneficiary unless the Participant effectively designates
another person as Beneficiary in accordance with the provisions of subsection
(a). The number of election forms and revocations shall not
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be limited.
(e) Upon the death of a Participant the remaining vested interest in
the Net Value of his Accounts shall become payable, in accordance with the
provisions of subsection (g), to his Beneficiary or contingent Beneficiary.
If there is no such Beneficiary, the remaining vested interest in the Net
Value of his Accounts shall be payable to the executor or administrator of
his estate, or, if no such executor or administrator is appointed and
qualifies within a time which the Committee shall, in its sole and absolute
discretion, deem to be reasonable, then to such one or more of the
descendants and blood relatives of such deceased Participant as the
Committee, in its sole and absolute discretion, may select.
(f) If a designated Beneficiary entitled to payments hereunder shall
die after the death of the Participant but before the entire vested interest
in the Net Value of Accounts of such Participant has been distributed, then
the remaining vested interest in the Net Value of Accounts of such
Participant shall be paid, in accordance with the provisions of subsection
(g), to the surviving Beneficiary who is not a contingent Beneficiary, or, if
there are no such surviving Beneficiaries then living, to the designated
contingent Beneficiaries as shall be living at the time such payment is to be
made. If there is no designated contingent Beneficiary then living, the
remaining interest in the Net Value of his Accounts shall be paid to the
executor or administrator of the estate of the last to die of the
Beneficiaries who are not contingent Beneficiaries.
(g) If a Participant dies before his entire vested interest in the Net
Value of his Accounts has been distributed to him, the remainder of such
vested interest shall be paid to his Beneficiary or, if applicable, his
contingent Beneficiary, in a lump sum distribution as soon as practicable
following the date of the Participant's death. Notwithstanding the
foregoing, if, prior to the Participant's death:
(i) the Participant had elected to receive a deferred lump sum
distribution and had not yet received such distribution, such Beneficiary
shall receive a lump sum distribution as of the earlier of: (A) the Valuation
Date set forth in the Participant's election or (8) the last Valuation Date
which occurs within one (1) year of the Participant's death; or
(ii) the Participant had elected to receive and had begun receiving a
distribution in the form of installments, such Beneficiary shall receive
distributions over the remaining installment period, at the times set forth
in such election.
If the Beneficiary is the Participant's Spouse and if benefits are
payable to such Beneficiary as an immediate or deferred lump sum
distribution, such Spouse may defer the distribution up to the date on which
the Participant would have attained age seventy and one-half (70-1/2). If
such Spouse dies prior to such distribution, the prior sentence shall be
applied as if the Spouse were the Participant.
(h) Anything in the Plan to the contrary notwithstanding, the
provisions of Sections 7.7(a) through (g) shall also apply to a person who is
not a Participant but who has made a contribution to and maintains a Rollover
Contribution Account under the Plan.
7.8 Direct Rollover of Eligible Rollover Distributions
For purposes of this Section 7.8, the following definitions shall apply:
(a) "Direct Rollover" means a payment by the Plan to the Eligible
Retirement
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Plan specified by the Distributee.
(b) "Distributee" means an Employee or former Employee. In addition,
the Employee's or former Employee's surviving Spouse and the
Employee's or former Employee's Spouse or former spouse who is
the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are Distributees with
regard to the interest of the Spouse or former spouse.
(c) "Eligible Retirement Plan" means an individual retirement account
described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
Spouse, an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
(d) "Eligible Rollover Distribution" means any distribution of all or
any portion of the balance to the credit of the Distributee,
except that an Eligible Rollover Distribution does not include:
any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period
of ten (10) years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
realized appreciation with respect to employer securities). This
Section 7.8 applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would other wise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner
prescribed by the Committee to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement
Plan specified by the Distributee in a Direct Rollover.
7.9 Commencement of Benefits
(a) Unless the Employee elects otherwise in accordance with the Plan,
in no event shall the payment of benefits commence later than the sixtieth
(60th) day after the close of the Plan Year in which the latest of the
following events occur: (I) the attainment by the Employee of age sixty-five
(65), (II) the tenth (10th) anniversary of the year in which the Participant
commenced participation in the Plan, or (III) the termination of the
Employee's employment with the Employer; provided, however, that if the
amount of the payment required to commence on the date determined under this
sentence cannot be ascertained by such date, a payment retroactive to such
date may be made no later than sixty (60) days after the earliest date on
which the amount of such payment can be ascertained under the Plan.
(b) Distributions to five-percent owners:
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The vested interest in the Net Value of the Accounts of a five-percent
owner (as described in Section 416(i) of the Code and determined with respect
to the Plan Year ending in the calendar year in which such individual attains
age seventy and one-half (70-1/2)) must be distributed or commence to be
distributed no later than the first day of April following the calendar year
in which such individual attains age seventy and one-half (70-1/2). The
vested interest in the Net Value of the Accounts of an Employee who Is not a
five-percent owner (as described in Section 416(i) of the Code) for the Plan
Year ending In the calendar year in which such person attains age seventy and
one-half (70-1/2) but who becomes a five-percent owner (as described in
Section 416(i) of the Code) for a later Plan Year must be distributed or
commence to be distributed no later than the first day of April following the
last day of the calendar year that includes the last day of the first Plan
Year for which such individual is a five-percent owner (as described in
Section 416(i) of the Code).
(c) Distributions to other than five-percent owners:
The vested interest in the Net Value of the Accounts of an Employee who
is not a five-percent owner and who attained age seventy and one-half
(70-1/2) prior to January 1, 1988 must be distributed or commence to be
distributed no later than the first day of April following the calendar year
in which occurs the later of: (ii) his termination of employment or (ii) his
attainment of age seventy and one-half (70-1/2).
Commencing January 1, 1989, by Notice issued by the Internal Revenue
Service, the vested interest in the Net Value of the Accounts of any Employee
who attains age seventy and one-half (70-1/2) after December 31, 1987, must
be distributed or commence to be distributed no later than the first day of
April following the later of (A) the 1989 calendar year or
(B) the calendar year in which such individual attains age seventy and
one-half (70-1/2).
7.10 Manner of Payment of Distributions from the Employer Stock Fund
Distributions from the Employer Stock Fund shall be made to Participants
and Beneficiaries in cash. Notwithstanding the foregoing and except for
withdrawals under Sections 7.2 and 7.3 and loans under Article VIII, the
Participant or Beneficiary may elect that such distributions be made wholly
or partially in shares. If the Participant or Beneficiary elects that such
distributions may be made wholly or partially in shares, subject to such
terms and conditions as may be established from time to time by the
Committee, the maximum number of shares to be distributed shall be equal to
the number of whole shares that could be purchased on the date of
distribution based on the fair market value of shares determined as of the
date of payment and on the fair market value of the Participant's Units in
the Employer Stock Fund on the valuation date preceding the distribution. An
amount of money equal to any remaining amount of the payment that is less
than the fair market value of a whole share shall be distributed in cash.
For purposes of this Section 7.10, the fair market value of a share shall be
determined on a uniform and nondiscriminatory basis in such manner as the
Separate Agency may, in its discretion, prescribe.
ARTICLE VIII
Loans to Participant
8.1 Definitions and Conditions
(a) For purposes of this Article, the following terms and phrases shall
have the
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meanings hereafter ascribed to them:
(i) "Borrower" means a Participant. Commencing October 18, 1989,
"Borrower" shall mean a Participant or a "Party in Interest" (as defined in
Section 3(14) of ERISA) who maintains an Account, provided such Participant
or Party in Interest is not receiving a benefit payment in accordance with
the provisions of Section 7.5(e) or 7.7.
(ii) "Loan Account" means the separate, individual account established
on behalf of a Borrower in accordance with the provisions of Section 8.4(d).
(b) To the extent permitted under the provisions of this Article and
subject to the terms and conditions set forth herein, a Borrower may request
a loan from his Accounts. Any loans made in accordance with this Article
shall not be subject to the provisions of Article VI.
8.2 Loan Amount
Upon a finding by the Committee that all requirements hereunder have
been met, a Borrower may request a loan from his Accounts in an amount up to
the lesser of: (a) fifty percent (50%) of the Net Value as of the close of
business on the date the loan is processed of the Basic Contribution Account,
vested Matching Contribution Account and Rollover Contribution Account, or
(b) $50,000, reduced by the highest outstanding loan balance during the
preceding twelve (12) months. The minimum loan permitted shall be $500.
8.3 Term of Loan
All loans shall be for a fixed term of not more than five (5) years,
except that a loan which shall be used to acquire any dwelling which within a
reasonable time is to be used as the principal residence of the Participant,
may, in the discretion of the Committee, be made for a term of not more than
fifteen (15) years. Interest on a loan shall be based on a reasonable rate
of interest. The rate of interest on a loan shall be based on the rate of
interest on United States Treasury obligations for a comparable term,
increased by one percent (1%) and adjusted to the nearest quarter (1/4) of
one percent (1%). The rate shall be the rate as in effect as of the date
determined by the Committee in accordance with the provisions of Section
9.6(b). Such rate shall remain in effect until the Loan Account is closed.
8.4 Operational Provisions
(a) An application for a loan shall be filed in the form and manner
prescribed by the Committee ten (10) days prior to the Valuation Date as of
which such loan is requested. If the Committee shall approve such
application, the Committee shall establish the amount of such loan and such
loan shall be effected as of such Valuation Date.
(b) The amount of the loan shall be distributed from the Investment
Accounts in which the Borrower's Accounts are invested in the following order
of priority:
(i) Basic Contribution Account;
(ii) Rollover Contribution Account; and
(iii) Vested Matching Contribution Account.
Distributions from each of the foregoing Accounts shall be made in the
following order of
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priority:
(A) by the redemption of Units from each of the Borrower's Accounts in the
Trust Fund in the order set forth above, on a pro rata basis from the
Investment Accounts thereunder, as were selected by the Participant
pursuant to Article VI, and
(B) by the redemption of Units invested in the Employer Stock Fund from
each of the Borrower's Accounts invested under the Separate Agreement, in
the order set forth above, if selected by the Borrower pursuant to Article
VI.
(c) The proceeds of a loan shall be distributed to the Borrower as soon
as practicable after the Valuation Date as of which the loan is processed;
provided, however, that the Borrower shall have satisfied such reasonable
conditions as the Committee shall deem necessary, including, without
limitation: (i) the delivery of an executed promissory note for the amount of
the loan, including interest, payable to the order of the Trustees; (ii) an
assignment to the Plan of such Borrower's interest in his Accounts to the
extent of such loan; and (iii) if the Borrower is a Participant who is
actively employed by the Employer, an authorization to the Employer to make
payroll deductions in order to repay his loan to the Plan. The
aforementioned promissory note shall be duly acknowledged and executed by the
Borrower and shall be held by the Trustees, or the Committee as agent for the
Trustees, as an asset of the Borrower's Loan Account pursuant to subsection
(d).
(d) A Loan Account shall be established for each Borrower with an
outstanding loan pursuant to this Article. Each Loan Account shall be
comprised of a Borrower's executed promissory note and (ii) installment
payments of principal and interest made pursuant to Section 8.5(a). Upon full
payment and satisfaction of the outstanding Loan Account balance, a
Borrower's promissory note shall be marked paid in full, returned to the
Borrower, and his Loan Account thereupon closed.
(e) As of each Valuation Date coincident with or next succeeding each
payment of principal and interest on a loan, the then current balance of each
Borrower's Loan Account shall be debited by the amount of such payment and
such amount shall be transferred for investment in accordance with Section
8.5(c) to the appropriate Borrower's Account. If the Committee established a
lien against the Participant's Accounts pursuant to Section 8.6(c), and
foreclosure of such lien is deferred until the Participant's Termination of
Service pursuant to Section 8.6(c)(ii)(A), for each month that foreclosure of
the lien is deferred, the then current balance of the Participant's Loan
Account shall be charged with interest on the unpaid principal and interest
thereon.
(f) Notwithstanding the provisions of subsections (a) through (e)
above, the following provisions shall apply with respect to the Borrower of
any loans distributed during the period commencing February 1, 1989 and
ending September 30, 1989:
(i) Upon distribution of the loan proceeds to the Borrower pursuant to
subsection (c), an amount equal to said loan proceeds shall be
automatically transferred from the Borrower's current Investment Accounts
into Account D and shall constitute the Plan's security interest with
respect to such loan. Such amount shall be transferred from the Borrower's
Accounts in the order of priority and on a pro rata basis among the
Investment Accounts as set forth in subsection (b). Such transfer shall
not constitute a transfer between Investment Accounts as described in
Section 6.3 or Section 6.4(b).
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Prior to October 1, 1989, the Borrower may not make any withdrawals
under Section 7.2 or Section 7.3 which would reduce the vested portion of the
Net Value of his Accounts to an amount which is less than the amount of his
outstanding loan.
(iii) Commencing October 1, 1989, the Plan shall no longer maintain
a security interest in Fund D, and as soon as administratively practicable
thereafter, each Borrower may request that all or a portion of the amount
held in Account D constituting the Plan security interest be transferred to
any one or more of the other Investment Accounts. Such transfer shall be
subject to the provisions of Section 6.3 or Section 6.4(b) except that such
transfer shall not be counted towards the maximum number of transfers
permitted during the Plan Year.
(g) Only one (1) loan shall be outstanding to any Borrower under this
Article VIII at any time.
(h) Any loans under this Article VIII shall be subject to the
restrictions of Section 6.5.
8.5 Repayments
(a) If the Borrower is the Participant and unless otherwise agreed to
by the Committee, repayments of loan principal, or the unpaid balance
thereof, and interest thereon shall be made through payroll deductions. The
first repayment shall be deducted as of the first payroll date in the second
month following the granting of the loan. Commencing January 1, 1991, the
first repayment shall be deducted as of the first payroll date occurring no
later than three (3) weeks after the Committee submits the loan form for
processing.
If the Borrower is not on the payroll of the Employer, and unless
otherwise agreed to by the Committee, repayments of loan principal, or the
unpaid balance thereof, and interest thereon, shall be made in cash or cash
equivalencies to the Employer in equal monthly installments for payment to
his Loan Account.
(b) Any amount repaid to the Plan by a Borrower with respect to a loan,
including interest thereon, shall be invested as if such amount were a
contribution to be invested in accordance with Section 6.1.
(c) With respect to each Borrower's Loan Account, any repayment of
principal and interest made by a Borrower shall be credited, as of the
Valuation Date coincident with or next succeeding such payment, to the
Borrower's Accounts in the order of priority established under Section
8.4(b). No Account having a lesser degree of priority shall be credited
until the Account having the immediately preceding degree of priority has
been restored by an amount equal to that which had been borrowed from such
Account.
(d) A Borrower may prepay his entire loan, plus all interest accrued
and unpaid thereon, as of any Valuation Date. Alternatively and subject to
such other terms and conditions as may be established from time to time by
the Committee, a Borrower may prepay a portion of his loan on any Valuation
Date. Such prepayment shall be applied first to all accrued and unpaid
interest on the outstanding balance of the loan. After any partial
prepayment of principal, interest will only be charged on the remaining
outstanding balance of the loan. However, commencing on or after December 9,
1996, a Borrower will not be permitted to make partial prepayments to his
Loan Account.
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(e) Commencing February 1, 1989, with respect to loans (i) distributed
commencing on or after February 1, 1989 and (ii) prepaid prior to October 1,
1989, upon prepayment of all of such loan, a Borrower may, subject to the
provisions of Section 6.3 or Section 6.4(b), request that all or a portion of
the amount previously held as a Plan security interest be transferred from
Account D. Such transfer shall not be counted towards the maximum number of
transfers permitted during the Plan Year.
(f) In the event the Plan is terminated, the entire unpaid principal
amount of the loan hereunder, together with any accrued and unpaid interest
thereon, shall become immediately due and payable.
8.6 Default
(a) If a Borrower fails to make any payment on any loan when due under
this Article, the entire unpaid principal amount of such loan, together with
any accrued and unpaid interest thereon, shall be deemed in default and
become due and payable ninety (90) days after the initial date of payment
delinquency.
(b) Prior to February 1, 1989, upon direction by the Committee, any
unpaid principal and interest under subsection (a) shall be paid by applying
the value of the Borrower's Loan Account (determined as of the next following
Valuation Date) in satisfaction of said unpaid principal and interest,
whereupon the Borrower's Loan Account shall be closed. Such closing of a
Borrower's Loan Account shall be deemed to be and treated by the Committee as
a Hardship withdrawal (as defined in Section 7.3), without reference to the
amount and timing of the withdrawals otherwise permitted thereunder.
(c) Commencing February 1, 1989, if a Borrower fails to make any
payment on a loan and is deemed to be in default pursuant to subsection (a),
the Committee shall establish a lien against the Borrower's Accounts in an
amount equal to any unpaid principal and interest. The lien shall be
foreclosed by applying either (I) the value of the Borrower's Loan Account
(determined as of the next Valuation Date immediately following foreclosure)
or (II), If applicable, the Plan security interest held in Account D, In
satisfaction of said unpaid principal and interest as follows:
(A) if the Borrower is a Participant who is in the employment of the
Employer, upon the Participant's Termination of Service; or
(B) if the Borrower is not in the employment of the Employer,
immediately upon default. Thereupon, the vested interest in the balance
of the Borrower's Accounts shall be distributed in accordance with the
applicable provisions of the Plan.
(d) The Committee may, in accordance with uniform rules established by
it, restrict the right of any Borrower who has defaulted on a loan from the
Plan to: (I) make withdrawals and/or loans from his Matching Contribution
Account, Basic Contribution Account, and/or Rollover Contribution Account for
a period not exceeding twelve (12) months or (II) if the Borrower is an
Eligible Employee, authorize Basic Contributions to be made on his behalf or
make any other contributions to the Plan for a period not exceeding twelve
(12) months.
8.7 Coordination of Outstanding Account and Payment of Benefits
(a) If the Borrower has an outstanding Loan Account and is either (i)
scheduled to
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receive or elects to receive a lump sum distribution in accordance with the
provisions of Article VII, or (ii) scheduled to receive the last installment
payment under a previous election made in accordance with the provisions of
Article VII to receive payments in a form other than the normal form of benefit
payments, then, at the time of the distribution or payment under clause (i) or
(ii) above, the entire unpaid principal amount of the loan together with any
accrued and unpaid interest thereon, shall become immediately due and payable.
No Plan distribution, except as permitted under Section 7.2 or Section 7.3,
shall be made to any Borrower unless and until such Borrower's Loan Account,
including accrued interest thereunder, has been liquidated and closed.
Notwithstanding the foregoing provisions, if a Participant incurs a Termination
of Service for any reason prior to October 1, 1989, the entire unpaid principal
amount of the loan thereunder, together with any accrued and unpaid interest
thereon, shall become immediately due and payable. If a Borrower fails to pay
the outstanding balance of his Loan Account hereunder, such loan shall be
satisfied as if a default had occurred pursuant to Section 8.6.
(b) Any reference in the Plan to the Net Value of Units in a Participant's
Accounts available for distribution to any Borrower shall mean the
value after the satisfaction of the entire unpaid principal loan
amount and any accrued, unpaid interest thereon, as provided in this
Article.
ARTICLE IX
Administration
9.1 General Administration of the Plan
The operation and administration of the Plan shall be subject to the
management and control of the Named Fiduciaries and Plan Administrator
designated by the Employer. The designation of such Named Fiduciaries and
Plan Administrator, the terms of their appointment, and their duties and
responsibilities allocated among them shall be as set forth in this Article.
9.2 Designation of Named Fiduciaries
The management and control of the operation and administration of the
Plan shall be allocated in the following manner:
(a) The Employer shall designate the Trustees as a Named Fiduciary to
perform those functions set forth in the Agreement or the Plan which
are applicable to a Plan of Partial Participation.
(b) The Employer shall designate the Separate Agency to perform those
functions relating to the Separate Agency in the Plan or the Separate
Agreement.
(c) The Employer shall designate one or more individuals to serve as
member(s) of an employee benefits Committee to perform those functions
set forth in the Agreement, the Separate Agreement or the Plan that
are assigned to such Committee.
(d) A Trust Participant (as defined under the Agreement) may delegate to a
person or persons the duties and responsibilities for voting Units set
forth under the Agreement and Separate Agreement.
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(e) The Employer shall designate the Separate Agency as a Named Fiduciary
to perform those functions set forth in the Separate Agreement or the
Plan that are assigned to the Separate Agency, including the voting
and tender of shares of the Employer Stock.
9.3 Responsibilities of Fiduciaries
The Named Fiduciaries and Plan Administrator shall have only those
powers, duties, responsibilities and obligations that are specifically
allocated to them under the Plan, the Agreement or the Separate Agreement.
To the extent permitted by ERISA, each Named Fiduciary and Plan
Administrator may rely upon any direction, information or action of another
Named Fiduciary, Plan Administrator or the Employer as being proper under the
Plan, the Agreement or the Separate Agreement, and is not required to inquire
into the propriety of any such direction, information or action and no Named
Fiduciary or Plan Administrator shall be responsible for any act or failure
to act of another Named Fiduciary, Plan Administrator or the Employer.
No Named Fiduciary, Plan Administrator or the Employer guarantees the
Trust Fund or Separate Assets in any manner against investment loss or
depreciation in asset value.
The allocation of responsibility between the Trustees and the Employer
or between the Separate Agency and the Employer may be changed by written
agreement. Such reallocation shall be evidenced by Employer Resolutions and
shall not be deemed an amendment to the Plan.
To the extent permitted by ERISA, the Trustees shall have no liability
or responsibility with respect to the administration of any Separate Assets
held outside the Trust except as specifically set forth in the Agreement.
The authority and responsibility of the Trustees shall extend only to those
Plan assets held in accordance with the Agreement.
9.4 Plan Administrator
The Employer shall designate the Trustees as the Trustee Administrator
to perform those functions applicable to Plans of Partial Participation as
set forth in the Agreement. The Employer shall also designate one or more
persons to act as Plan Administrator and to perform those functions set forth
in the Agreement, the Plan or the Separate Agreement that are assigned to the
Plan Administrator.
The duties and responsibilities of a plan administrator under ERISA
shall be allocated between the Plan Administrator and the Trustee
Administrator as set forth herein or in the Agreement. Such allocation may
be changed only by written agreement between the parties and shall not be
deemed an amendment to the Plan.
The Plan Administrator shall be solely responsible for monitoring and
notifying the Trustees of an Employee's age for all purposes under the Plan.
The Plan Administrator is designated as the Plan's agent for the service
of legal process.
9.5 Committee
The members of the Committee designated by the Employer under Section
9.2(b) shall serve for such term(s) as the Employer shall determine and until
their successors are designated and qualified. The term of any member of the
Committee may be renewed from time to time without limitation as to the
number
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of renewals. Any member of the Committee may (a) resign upon at least sixty
(60) days written notice to the Employer or (b) be removed from office but only
for his failure or inability, in the opinion of the Employer, to carry out his
responsibilities in an effective manner. Termination of employment with the
Employer shall be deemed to give rise to such failure or inability.
The powers and duties allocated to the Committee shall be vested jointly
and severally in its members. Notwithstanding specific instructions to the
contrary, any instrument or document signed on behalf of the Committee by any
member of the Committee may be accepted and relied upon by the Trustees and
Separate Agency as the act of the Committee. The Trustees and Separate
Agency shall not be required to inquire into the propriety of any such action
taken by the Committee nor shall they be held liable for any actions taken by
them in reliance thereon.
The Employer may, pursuant to Employer Resolutions and upon notice to
the Trustees and Separate Agency, change the number of individuals comprising
the Committee, their terms of office or other conditions of their incumbency
provided that there shall be at all times at least one individual member of
the Committee. Any such change shall not be deemed an amendment to the Plan.
9.6 Powers and Duties of the Committee
The Committee shall have authority to perform all acts it may deem
necessary or appropriate in order to exercise the duties and powers imposed
or granted by ERISA, the Plan, the Agreement, the Separate Agreement or any
Employer Resolutions. Such duties and powers shall include, but not be
limited to, the following:
(a) Power to Construe - Except as otherwise provided in the Agreement
or the Separate Agreement, the Committee shall have the power to construe the
provisions of the Plan and to determine any questions of fact which may arise
thereunder.
(b) Power to Make Rules and Regulations - The Committee shall have the
power to make such reasonable rules and regulations as it may deem necessary
or appropriate to perform its duties and exercise its powers. Such rules and
regulations shall include, but not be limited to, those governing (I) the
manner in which the Committee shall act and manage its own affairs, (II) the
procedures to be followed In order for Employees or Beneficiaries to claim
benefits, and (III) the procedures to be followed by Participants,
Beneficiaries or other persons entitled to benefits with respect to
notifications, elections, designations or other actions required by the Plan
or ERISA. All such rules and regulations shall be applied in a uniform and
nondiscriminatory manner.
(c) Powers and Duties with Respect to Information - The Committee shall
have the power and responsibility:
(i) to obtain such information as shall be necessary for the proper
discharge of its duties;
(ii) to furnish to the Employer, upon request, such reports as are
reasonable and appropriate;
(iii) to receive, review and retain periodic reports of the
financial condition of the Plan Funds; and
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(iv) to receive, collect and transmit to the Trustees all information
required by the Trustees in the administration of the Accounts of the Employee
as contemplated in Section 9.7.
(d) Power of Delegation - The Committee shall have the power to
delegate fiduciary responsibilities (other than trustee responsibilities
defined in Section 405(c)(3) of ERISA) to one or more persons who are not
members of the Committee. Unless otherwise expressly indicated by the
Employer, the Committee must reserve the right to terminate such delegation
upon reasonable notice.
(e) Power of Allocation - Subject to the written approval of the
Employer, the Committee shall have the power to allocate among its members
specified fiduciary responsibilities (other than trustee responsibilities
defined in Section 405(c)(3) of ERISA). Any such allocation shall be in
writing and shall specify the persons to whom such allocation is made and the
terms and conditions thereof.
(f) Duty to Report - Any member of the Committee to whom specified
fiduciary responsibilities have been allocated under subsection (e) above
shall report to the Committee at least annually. The Committee shall report
to the Employer at least annually regarding the performance of its
responsibilities as well as the performance of any persons to whom any powers
and responsibilities have been further delegated.
(g) Power to Employ Advisors and Retain Services - The Committee may
employ such legal counsel, enrolled actuaries, accountants, pension
specialists, clerical help and other persons as it may deem necessary or
desirable in order to fulfill its responsibilities under the Plan.
9.7 Certification of Information
The Committee shall certify to the Trustees on such periodic or other
basis as may be agreed upon, but in no event later than ten (10) days before
any Valuation Date as of which the Trustees must effect any action with
respect to any Accounts held under the provisions of the Plan, relevant facts
regarding the establishment of the Accounts of an Employee, periodic
contributions with respect to such Accounts, investment elections and
modifications thereof and withdrawals and distributions therefrom. The
Trustees shall be fully protected in maintaining individual Account records
and in administering the Accounts of the Employee on the basis of such
certifications and shall have no duty of inquiry or otherwise with respect to
any transactions or communications between the Committee and Employees
relating to the information contained in such certifications.
9.8 Authorization of Benefit Payments
The Committee shall forward to the Trustees and, if applicable, any
Separate Agency, any application for payment of benefits within a reasonable
time after it has approved such application. The Trustees and such Separate
Agency may rely on any such information set forth in the approved application
for the payment of benefits to the Participant, Beneficiary or any other
person entitled to benefits.
9.9 Payment of Benefits to Legal Custodian
Whenever, in the Committee's opinion, a person entitled to receive any
benefit payment is a minor or deemed to be physically, mentally or legally
incompetent to receive such benefit, the Committee may direct the Trustees
and Separate Agency to make payment for his benefit to such individual or
institution having legal custody of such person or to his legal
representative. Any benefit payment made in accordance with the provisions of
this Section 9.9 shall operate as a valid and complete discharge of any
liability for
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payment of such benefit under the provisions of the Plan.
9.10 Service in More Than One Fiduciary Capacity
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan, regardless of whether any such person is an
officer, employee, agent or other representative of a party in interest.
9.11 Payment of Expenses
The Employer will pay the ordinary administrative expenses of the Plan
and compensation of the Trustees and the Separate Agency to the extent
required. However, any expenses directly related to the Trust Fund, such as
transfer taxes, brokers' commissions, registration charges, or administrative
expenses of the Trustees (including expenses of counsel retained by it in
accordance with the Agreement), shall be paid from the Trust Fund or from
such Investment Account to which such expenses directly relate. In addition,
any expenses directly related to the Employer Stock Fund such as transfer
taxes, brokers' commissions, registration charges, and other expenses
incurred in the sale and purchase of common stock of the Company for the
Employer Stock Fund (including expenses of counsel retained by it in
accordance with the Separate Agreement), will be paid out of a cash account
managed by the Separate Agency.
The Employer may charge Employees all or part of the reasonable expenses
associated with withdrawals and other distributions, loans or Account
transfers.
9.12 Administration of Separate Assets
The Committee and the Separate Agency shall be solely responsible for
the administration of the Separate Assets, including the administration,
collection and enforcement of any loans held therein. All contributions to
and withdrawals or disbursements from the Separate Assets shall be made
directly to or by the Separate Agency.
The Trustees may, as agreed upon with the Committee, provide such
combined or coordinated Plan records and reports, which include the Separate
Assets. The Trustees shall be fully protected in relying upon any
information provided to them by the Committee or Separate Agency with respect
to such Separate Assets. The inclusion of any information pertaining to
Separate Assets in such combined or coordinated Plan records and reports
shall not increase the responsibility or liability of the Trustees with
respect to the Separate Assets. If Plan Funds may be transferred between the
Separate Assets and the other Investment Accounts, the manner in which such
transfers may be made must be agreed to in a written instrument entered into
among the Committee, the Trustees and the Separate Agency.
ARTICLE X
Benefit Claims Procedure
10.1 Definition
For purposes of this Article, "Claimant" shall mean any Participant,
Beneficiary or any other person entitled to benefits under the Plan or his
duly authorized representative.
10.2 Claims
A Claimant may file a written claim for a Plan benefit with the Plan
Administrator on the appropriate form to be supplied by the Plan
Administrator. The Plan Administrator shall, in its sole and
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absolute discretion, review the Claimant's application for benefits and
determine the disposition of such claim.
10.3 Disposition of Claim
The Plan Administrator shall notify the Claimant as to the disposition
of the claim for benefits under this Plan within ninety (90) days after the
appropriate form has been filed unless special circumstances require an
extension of time for processing. If such an extension of time Is required,
the Plan Administrator shall furnish written notice of the extension to the
Claimant prior to the termination of the initial ninety (90) day period. The
extension notice shall indicate the special circumstances requiring the
extension of time and the date the Plan Administrator expects to render a
decision. In no event shall such extension exceed a period of one hundred
eighty (180) days from the receipt of the claim.
10.4 Denial of Claim
If a claim for benefits under this Plan is denied in whole or in part by
the Plan Administrator, a notice written in a manner calculated to be
understood by the Claimant shall be provided by the Plan Administrator to the
Claimant and such notice shall include the following:
(a) a statement that the claim for the benefits under this Plan has been
denied;
(b) the specific reasons for the denial of the claim for benefits, citing
the specific provisions of the Plan which set forth the reason or reasons
for the denial;
(c) a description of any additional material or information necessary for
the Claimant to perfect the claim for benefits under this Plan and an
explanation of why such material or information is necessary; and
(d) appropriate information as to the steps to be taken if the Claimant
wishes to appeal such decision.
10.5 Inaction by Plan Administrator
A claim for benefits shall be deemed to be denied if the Plan
Administrator shall not take any action on such claim within ninety (90) days
after receipt of the application for benefits by the Claimant or, if later,
within the extended processing period established by the Plan Administrator
by written notice to the Claimant, in accordance with Section 10.3.
10.6 Right to Full and Fair Review
A Claimant who is denied, in whole or in part, a claim for benefits under
the Plan may file an appeal of such denial.
Such appeal must be made in writing by the Claimant or his duly
authorized representative and must be filed with the Committee within sixty
(60) days after receipt of the notification under Section 10.4 or the date
his claim is deemed to be denied under Section 10.5. The Claimant or his
representative may review pertinent documents and submit issues and comments
in writing.
10.7 Time of Review
The Committee, independent of the Plan Administrator, shall conduct a
full and fair
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review of the denial of claim for benefits under this Plan to a Claimant within
sixty (60) days after receipt of the written request for review described in
Section 10.6; provided, however, that an extension, not to exceed sixty (60)
days, may apply in special circumstances. Written notice shall be furnished to
the Claimant prior to the commencement of the extension period.
10.8 Final Decision
The Claimant shall be notified in writing of the final decision of such
full and fair review by such Committee. Such decision shall be written in a
manner calculated to be understood by the Claimant, shall state the specific
reasons for the decision and shall include specific references to the
pertinent Plan provisions upon which the decision is based. In no event
shall the decision be furnished to the Claimant later than sixty (60) days
after the receipt of a request for review, unless special circumstances
require an extension of time for processing, in which case a decision shall
be rendered within one hundred-twenty (120) days after receipt of the appeal.
ARTICLE XI
Amendment, Termination and Withdrawal
11.1 Amendment and Termination
The Employer expects to continue the Plan indefinitely, but specifically
reserves the right, in its sole and absolute discretion, at any time, by
appropriate action of the Board, to terminate its Plan or to amend (subject
to the approval of the Trustees), in whole or in part, any or all of the
provisions of the Plan. Subject to the provisions of Section 13.7, no such
amendment or termination shall permit any part of the Plan Funds to be used
for or diverted to purposes other than for exclusive benefit of Participants,
Beneficiaries or other persons entitled to benefits, and no such amendment or
termination shall reduce the interest of any Participant, Beneficiary or
other person who may be entitled to benefits, without his consent. In the
event of a termination or partial termination of the Plan, or upon complete
discontinuance of contributions under the Plan, the Accounts of each affected
Participant shall become fully vested and shall be distributable in
accordance with the provisions of Article VII.
If any amendment changes the vesting schedule, any Participant who has a
Period of Service of five (5) or more years may, by filing a written request
with the Employer, elect to have his vested percentage computed under the
vesting schedule in effect prior to the amendment.
Commencing January 1, 1989, if any amendment changes the vesting
schedule, any Participant who has a Period of Service of three (3) or more
years may, by filing a written request with the Employer, elect to have his
vested percentage computed under the vesting schedule In effect prior to the
amendment.
The period during which the Participant may elect to have his vested
percentage computed under the prior vesting schedule shall commence with the
date the amendment is adopted and shall end on the latest of:
(a) sixty (60) days after the amendment is adopted;
(b) sixty (60) days after the amendment becomes effective; or
(c) sixty (60) days after the Participant is issued written notice of the
amendment from the Employer.
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11.2 Withdrawal from the Trust Fund
An Employer may withdraw its Plan from the Trust Fund in accordance with
and subject to the provisions of the Agreement.
ARTICLE XII
Top-Heavy Plan Provisions
12.1 Introduction
Any other provisions of the Plan to the contrary notwithstanding, the
provisions contained in this Article shall be effective with respect to any
Plan Year in which this Plan is a Top-Heavy Plan, as hereinafter defined.
12.2 Definitions
For purposes of this Article, the following words and phrases shall have
the meanings stated herein unless a different meaning is plainly required by
the context.
(a) "Account," for the purpose of determining the Top-Heavy Ratio,
means the sum of (i) a Participant's Accounts as of the most recent Valuation
Date and (ii) an adjustment for contributions due as of the Determination
Date.
(b) "Determination Date" means, with respect to any Plan Year, the last
day of the preceding Plan Year. With respect to the first Plan Year,
"Determination Date" means the last day of such Plan Year.
(c) "Five-Percent Owner" means, if the Employer is a corporation, any
Employee who owns (or is considered as owning within the meaning of Section
318 of the Code modified by Section 416(i)(1)(B)(iii) of the Code) more than
5% of the value of the outstanding stock of, or more than 5% of the total
combined voting power of all the stock of, the Employer. If the Employer is
not a corporation, a Five-Percent Owner means any Employee who owns more than
5% of the capital or profits interest in the Employer.
(d) "Key Employee" means any Employee or former Employee (or, where
applicable, such person's Beneficiary) in the Plan who, at any time during
the Plan Year containing the Determination Date or any of the preceding four
(4) Plan Years, is: (i) an Officer having Top-Heavy Earnings from the
Employer of greater than 50% of the dollar limitation in effect under Section
415(b)(1)(A) of the Code; (ii) one of the ten (10) Employees having Top-Heavy
Earnings from the Employer of more than the dollar limitation in effect under
Section 415(c)(1)(A) of the Code and owning (or considered as owning within
the meaning of Section 318 of the Code modified by Section 416(i)(1)(B)(iii)
of the Code) both more than a 1/2% interest in value and the largest
interests in the value of the Employer; (iii) a Five-Percent Owner of the
Employer; or (iv) a One-Percent Owner of the Employer having Top-Heavy
Earnings from the Employer greater than $150,000. For purposes of computing
the Top-Heavy Earnings in subsections (d)(i), (d)(ii) and (d)(iv) above, the
aggregation rules of Sections 414(b), (c), (m) and (o) of the Code shall
apply.
(e) "Non-Key Employee" means an Employee or former Employee (or, where
applicable, such person's Beneficiary) who is not a Key Employee.
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(f) "Officer" means an Employee who is an administrative executive in
the regular and continued service of his Employer; any Employee who has the
title but not the authority of an officer shall not be considered an Officer
for purposes of this Article. Similarly, an Employee who does not have the
title of an officer but has the authority of an officer shall be considered
an Officer. For purposes of this Article, the maximum number of Officers that
must be taken Into consideration shall be determined as follows: (I) three
(3), if the number of Employees is less than thirty (30); (II) 10% of the
number of Employees, if the number of Employees is between thirty (30) and
five hundred (500); or (III) fifty (50), if the number of Employees is
greater than five hundred (500). In determining such limit, the term
"Employer" shall be determined in accordance with Sections 414(b), (c), (m)
and (o) of the Code and "Employee" shall include Leased Employees and exclude
employees described in Section 414(q)(8) of the Code.
(g) "One-Percent Owner" means, if the Employer is a corporation, any
Employee who owns (or is considered as owning within the meaning of Section
318 of the Code modified by Section 416(i)(1)(B)(iii) of the Code) more than
1% of the value of the outstanding stock of, or more than 1% of the total
combined voting power of all the stock of, the Employer. If the Employer is
not a corporation, a One-Percent Owner means any Employee who owns more than
1% of the capital or profits interest in the Employer.
(h) A "Permissive Aggregation Group" consists of one or more plans of
the Employer that are part of a Required Aggregation Group, plus one or more
plans that are not part of a Required Aggregation Group but that satisfy the
requirements of Sections 401(a)(4) and 410 of the Code when considered
together with the Required Aggregation Group. If two (2) or more defined
benefit plans are included in the aggregation group, the same actuarial
assumptions must be used with respect to all such plans in determining the
Present Value of Accrued Benefits.
(I) "Present Value of Accrued Benefits" shall be determined in
accordance with the actuarial assumptions set forth in the defined benefit
plan and the assumed benefit commencement date shall be determined taking
into account any nonproportional subsidy.
(j) "Related Rollover Contributions" means rollover contributions
received by the Plan that are not Initiated by the Employee nor made from
another plan maintained by the Employer.
(k) A "Required Aggregation Group" consists of each plan of the
Employer (whether or not terminated) in which a Key Employee participates or
participated at any time during the Plan Year containing the Determination
Date or any of the four (4) preceding Plan Years and each other plan of the
Employer (whether or not terminated) which enables any plan in which a Key
Employee participates or participated to meet the requirements of Section
401(a)(4) or 410 of the Code. If two (2) or more defined benefit plans are
included in the aggregation group, the same actuarial assumptions must be
used with respect to all such plans in determining the Present Value of
Accrued Benefits.
(1) A "Super Top-Heavy Plan" means a Plan in which, for any Plan Year:
(i) the Top-Heavy Ratio (as defined in subsection (o)) for the Plan
exceeds 90% and the Plan is not part of any Required Aggregation Group (as
defined in subsection (k)) or Permissive Aggregation Group (as defined in
subsection (h)); or
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(ii) the Plan is a part of a Required Aggregation Group (but is not part of
a Permissive Aggregation Group) and the Top-Heavy Ratio for the group of plans
exceeds 90%; or
(iii) the Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 90%.
(m) "Top-Heavy Earnings" means, for any year, an individual's annual
compensation as stated on such individual's federal tax Form W-2 for the
calendar year that ends with or within the Plan Year. Commencing January 1,
1989, Top-Heavy Earnings means, for any year, compensation as defined in
Section 414(q)(7) of the Code, up to a maximum of $200,000 adjusted as
prescribed by the Secretary of the Treasury under Section 401(a)(17) of the
Code. Commencing January 1, 1994, the maximum compensation taken into
account for any year shall be $150,000, adjusted in multiples of $10,000 for
increases in the cost-of-living as prescribed by the Secretary of the
Treasury under Section 401(a)(17)(B) of the Code. In determining Top-Heavy
Earnings, the rules of Section 414(q)(6) of the Code shall apply except that
the term "family" shall include only the Spouse and those lineal descendants
of the Employee who have not attained age nineteen (19) before the close of
the Plan Year.
(n) A "Top-Heavy Plan" means a Plan in which, for any Plan Year:
(i) the Top-Heavy Ratio (as defined in subsection (o)) for the Plan
exceeds 60% and the Plan is not part of any Required Aggregation Group (as
defined in subsection (k) or Permissive Aggregation Group (as defined in
subsection (h)); or
(ii) the Plan is a part of a Required Aggregation Group but is not part
of a Permissive Aggregation Group and the Top-Heavy Ratio for the group of
plans exceeds 60%; or
(iii) the Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60%.
(o) "Top-Heavy Ratio" means:
(i) if the Employer maintains one or more qualified defined
contribution plans and the Employer has not maintained any qualified defined
benefit plans which during the five (5) year period ending on the
Determination Date have or have had accrued benefits, the Top-Heavy Ratio for
the Plan alone or for the Required Aggregation Group or Permissive
Aggregation Group, as appropriate, is a fraction, the numerator of which is
the sum of the Account balances under the aggregated defined contribution
plan or plans for all Key Employees as of the Determination Date, including
any part of any Account balance distributed in the five (5) year period
ending on the Determination Date but excluding distributions attributable to
Related Rollover Contributions, if any, and the denominator of which is the
sum of all Account balances under the aggregated qualified defined
contribution plan or plans for all Participants as of the Determination Date,
including any part of any Account balance distributed in the five (5) year
period ending on the Determination Date but excluding distributions
attributable to Related Rollover Contributions, if any, determined in
accordance with Section 416 of the Code and the regulations thereunder.
(ii) if the Employer maintains one or more qualified defined
contribution plans and
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the Employer maintains or has maintained one or more qualified defined benefit
plans which during the five (5) year period ending on the Determination Date
have or have had any accrued benefits, the Top-Heavy Ratio for any Required
Aggregation Group or Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the Account balances under the
aggregated qualified defined contribution plan or plans for all Key Employees,
determined in accordance with (I) above, and the sum of the Present Value of
Accrued Benefits under the aggregated qualified defined benefit plan or plans
for all Key Employees as of the Determination Date, and the denominator of which
Is the sum of the Account balances under the aggregated qualified defined
contribution plan or plans determined in accordance with (I) above, for all
Participants and the sum of the Present Value of Accrued Benefits under the
aggregated qualified defined benefit plan or plans for all Participants as of
the Determination Date, all determined in accordance with Section 416 of the
Code and the regulations thereunder. The accrued benefits under a qualified
defined benefit plan in both the numerator and denominator of the Top-Heavy
Ratio are adjusted for any distribution of an accrued benefit made in the five
(5) year period ending on the Determination Date.
(III) For purposes of (I) and (II) above, the value of Account
balances and the Present Value of Accrued Benefits will be determined as of
the most recent Valuation Date that falls within the' twelve (12) month
period ending on the Determination Date, except as provided in Section 416 of
the Code and the regulations thereunder for the first and second Plan Years
of a qualified defined benefit plan. The Account balances and Present Value
of Accrued Benefits of a Participant (A) who is a Non-Key Employee but who
was a Key Employee in a prior year, or (B) who has not been credited with at
least an Hour of Service with any employer maintaining the Plan at any time
during the five (5) year period ending on the Determination Date will be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be made
in accordance with Section 416 of the Code and the regulations thereunder.
When aggregating plans, the value of Account balances and the Present Value
of Accrued Benefits will be calculated with reference to the Determination
Date that falls within the same calendar year.
(p) "Valuation Date", for the purpose of computing the Top-Heavy Ratio
as defined in subsection (o) means the last date of the Plan Year.
For purposes of subsections (h), (j) and (k), the rules of Sections
414(b), (c), (m) and (o) of the Code shall be applied in determining the
meaning of the term "Employer".
12.3 Limit on Top-Heavy Earnings
For any Plan Year commencing prior to January 1, 1989 in which the Plan
is a Top-Heavy Plan, Top-Heavy Earnings taken into account for purposes of
determining Employer contributions for such Plan Year on behalf of any
Participant shall be limited to a maximum of $200,000. This maximum shall be
subject to annual cost-of-living adjustments prescribed by the Secretary of
the Treasury or his delegate in accordance with regulations adopted by the
Secretary for such purpose.
12.4 Minimum Contributions
If the Plan becomes a Top-Heavy Plan, then any provision of Article III to
the contrary notwithstanding, the following provisions shall apply:
(a) Subject to subsection (b), the Employer shall contribute on behalf
of each Participant who is employed by the Employer on the last day of the
Plan Year and who is a Non-Key
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Employee an amount with respect to each Top-Heavy year which, when added to the
amount of Matching Contributions, Special Contributions and Forfeitures made on
behalf of such Participant, shall not be less than the lesser of: (I) 3% of such
Participant's Section 415 Compensation (as defined in Section 3.11(a)(vii) of
the Plan and modified by Section 401(a)(17) of the Code), or (II) if the
Employer has no defined benefit plan which is designated to satisfy Section 416
of the Code, the largest of Employer Contributions and forfeitures, as a
percentage of the Key Employees' Top-Heavy Earnings; provided, however, that in
no event shall any contributions be made under this Section 12.4 in an amount
which will cause the percentage of contributions made by the Employer on behalf
of any Participant who is a Non-Key Employee to exceed the percentage at which
contributions are made by the Employer on behalf of the Key Employee for whom
the percentage of Matching Contributions is highest In such Top-Heavy year. Any
such contribution shall be allocated to the Matching Contribution Account of
each such Participant and, for purposes of vesting and withdrawals only, shall
be deemed to be a Matching Contribution.
(b) Notwithstanding the foregoing, this Section shall not apply to any
Participant to the extent that such Participant is covered under any other
plan or plans of the Employer (determined in accordance with Sections 414(b),
(c), (m) and (o) of the Code) and such other plan provides that the minimum
allocation or benefit requirement will be met by such other plan should this
Plan become Top-Heavy.
(c) For purposes of this Article, prior to January 1, 1989 any amount
contributed by the Employer pursuant to a Compensation Reduction Agreement
shall be considered as a contribution made by the Employer. Commencing
January 1, 1989, the following shall be considered as a contribution made by
the Employer:
(i) Qualified Nonelective Contributions;
(ii) Matching Contributions made by the Employer on behalf of Key
Employees; and
(iii) Basic Contributions made by the Employer on behalf of Key
Employees.
(d) Subject to the provisions of subsection (b), all NonKey Employee
Participants who are employed by the Employer on the last day of the Plan
Year shall receive the defined contribution minimum provided under subsection
(a). A Non-Key Employee may not fail to accrue a defined contribution
minimum merely because such Employee was excluded from participation or
failed to accrue a benefit because (i) his Compensation is less than a stated
amount, or (ii) he failed to make Basic Contributions.
12.5 Impact on Section 415 Maximum Benefits
For any Plan Year in which the Plan is a Super Top-Heavy Plan, Section
3.11(a)(iv) and (v) shall be read by substituting the number 1.0 for the
number 1.25 wherever it appears therein. For any Plan Year in which the Plan
is a Top-Heavy Plan but not a Super Top-Heavy Plan, the Plan shall be treated
as a Super Top-Heavy Plan under this Section 12.5, unless each Non-Key
Employee who is entitled to a minimum contribution or benefit receives an
additional minimum contribution or benefit. If the Non-Key Employee is
entitled to a minimum contribution under Section 12.4(a), the Plan shall not
be treated as a Super Top-Heavy Plan under this Section 12.5 if the minimum
contribution satisfies Section 12.4(a) when 4% is substituted for 3% in
Section 12.4(a)(i).
ARTICLE XIII
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Miscellaneous Provisions
13.1 No Right to Continued Employment
Neither the establishment of the Plan, nor any provisions of the Plan,
of the Agreement establishing the Trust or of any Separate Agreement nor any
action of any Named Fiduciary, Plan Administrator or the Employer, shall be
held or construed to confer upon any Employee any right to a continuation of
his employment by the Employer. The Employer reserves the right to dismiss
any Employee or otherwise deal with any Employee to the same extent and in
the same manner that it would if the Plan had not been adopted.
13.2 Merger, Consolidation, or Transfer
The Plan shall not be merged or consolidated with, nor transfer its
assets or liabilities to, any other plan unless each Employee, Participant,
Beneficiary and other person entitled to benefits under the Plan, would (if
such other plan then terminated) receive a benefit immediately after the
merger, consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive if the Plan had terminated
immediately before the merger, consolidation or transfer.
13.3 Nonalienation of Benefits
Benefits payable under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution, or levy of any kind, either voluntary or
involuntary and any attempt to so anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, garnish, execute, levy or otherwise affect
any right to benefits payable hereunder, shall be void. Notwithstanding the
foregoing, the Plan shall permit the payment of benefits in accordance with a
qualified domestic relations order as defined in Section 414(p) of the Code.
13.4 Missing Payee
Any other provision in the Plan, Separate Agreement or Agreement to the
contrary notwithstanding, if the Trustees and, if appropriate, any Separate
Agency are unable to make payment to any Employee, Participant, Beneficiary
or other person to whom a payment is due ("Payee") under the Plan because the
identity or whereabouts of such Payee cannot be ascertained after reasonable
efforts have been made to identify or locate such person (including mailing a
certified notice of the payment due to the last known address of such Payee
as shown on the records of the Employer), such payment and all subsequent
payments otherwise due to such Payee shall be forfeited twenty-four (24)
months after the date such payment first became due. However, such payment
and any subsequent payments shall be reinstated retroactively, without
interest, no later than sixty (60) days after the date on which the Payee is
identified and located.
13.5 Affiliated Employers
All employees of all Affiliated Employers shall, for purposes of the
limitations in Article XII and for measuring Hours of Service and Periods of
Service, be treated as employed by a single employer. No employee of an
Affiliated Employer shall become a Participant of this Plan unless employed by
the Employer or an Affiliated Employer which has adopted the Plan.
13.6 Successor Employer
In the event of the dissolution, merger, consolidation or reorganization
of the Employer, the successor organization may, upon satisfying the
provisions of the Agreement and the Plan, adopt and continue this Plan. Upon
adoption, the successor organization shall be deemed the Employer with all
its
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powers, duties and responsibilities and shall assume all Plan liabilities.
13.7 Return of Employer Contributions
Any other provision of the Plan, Separate Agreement or Agreement to the
contrary notwithstanding, upon the Employer's request and with the consent of
the Trustees and, if appropriate, any Separate Agency, a contribution to the
Plan by the Employer which was (a) made by mistake of fact, or (b)
conditioned upon initial qualification of the Plan with the Internal Revenue
Service, or (c) conditioned upon the deductibility by the Employer of such
contributions under Section 404 of the Code, shall be returned to the
Employer within one (1) year after: (i) the payment of a contribution made by
mistake of fact, or (ii) the denial of such qualification or (iii) the
disallowance of the deduction (to the extent disallowed), as the case may be.
Any such return shall not exceed the lesser of (A) the amount of such
contributions (or, if applicable, the amount of such contribution with
respect to which a deduction is denied or disallowed) or (B) the amount of
such contributions net of a proportionate share of losses incurred by the
Plan during the period commencing on the Valuation Date as of which such
contributions are made and ending on the Valuation Date as of which such
contributions are returned. All such refunds shall be limited in amount,
circumstances and timing to the provisions of Section 403(c) of ERISA.
13.8 Construction of Language
Wherever appropriate in the Plan, words used in the singular may be read
in the plural; words used in the plural may be read in the singular; and
words importing the masculine gender shall be deemed equally to refer to the
female gender. Any reference to a section number shall refer to a section of
this Plan, unless otherwise indicated.
13.9 Headings
The headings of articles and sections are included solely for
convenience of reference, and if there be any conflict between such headings
and the text of the Plan, the text shall control.
13.10 Governing Law
The Plan shall be governed by and construed and enforced in accordance
with the laws of the State of New York, except to the extent that such laws
are preempted by the Federal laws of the United States of America.
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