Exhibit 10.34
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based on our understanding of the desired provisions. It may not fit your
situation. You should consult with your lawyer on the plan's legal and tax
implications. Neither Principal Life Insurance Company nor its agents can be
responsible for the legal or tax aspects of the plan nor its appropriateness for
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may ask us to prepare new sample wording for you and your lawyer to review.
CASEY'S GENERAL STORES
401(k) PLAN
Defined Contribution Plan 8.0
Restated April 30, 2003
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I FORMAT AND DEFINITIONS
Section 1.01 Format
Section 1.02 Definitions
ARTICLE II PARTICIPATION
Section 2.01 Active Participant
Section 2.02 Inactive Participant
Section 2.03 Cessation of Participation
ARTICLE III CONTRIBUTIONS
Section 3.01 Employer Contributions
Section 3.01A Rollover Contributions
Section 3.02 Forfeitures
Section 3.03 Allocation
Section 3.04 Contribution Limitation
Section 3.05 Excess Amounts
Section 3.06 Prohibited Allocations of Qualifying Employer Securities
ARTICLE IV INVESTMENT OF CONTRIBUTIONS
Section 4.01 Investment and Timing of Contributions
Section 4.02 Investment in Qualifying Employer Securities
ARTICLE V BENEFITS
Section 5.01 Retirement Benefits
Section 5.02 Death Benefits
Section 5.03 Vested Benefits
Section 5.04 When Benefits Start
Section 5.05 Withdrawal Benefits
Section 5.06 Loans to Participants
Section 5.07 Distributions Under Qualified Domestic Relations Orders
ARTICLE VI DISTRIBUTION OF BENEFITS
Section 6.01 Automatic Forms of Distribution
Section 6.02 Optional Forms of Distribution
Section 6.03 Election Procedures
Section 6.04 Notice Requirements
Section 6.05 Form of Distribution From ESOP Matching and Non-Matching
Contribution Accounts
Section 6.06 Put Option
ARTICLE VII DISTRIBUTION REQUIREMENTS
Section 7.01 Application
Section 7.02 Definitions
Section 7.03 Distribution Requirements
ARTICLE VIII TERMINATION OF THE PLAN
ARTICLE IX ADMINISTRATION OF THE PLAN
Section 9.01 Administration
Section 9.02 Expenses
Section 9.03 Records
Section 9.04 Information Available
Section 9.05 Claim and Appeal Procedures
Section 9.06 Delegation of Authority
Section 9.07 Exercise of Discretionary Authority
Section 9.08 Voting and Tender of Qualifying Employer Securities
ARTICLE X GENERAL PROVISIONS
Section 10.01 Amendments
Section 10.02 Direct Rollovers
Section 10.03 Mergers and Direct Transfers
Section 10.04 Provisions Relating to the Insurer and Other Parties
Section 10.05 Employment Status
Section 10.06 Rights to Plan Assets
Section 10.07 Beneficiary
Section 10.08 Nonalienation of Benefits
Section 10.09 Construction
Section 10.10 Legal Actions
Section 10.11 Small Amounts
Section 10.12 Word Usage
Section 10.13 Change in Service Method
Section 10.14 Military Service
ARTICLE XI TOP-HEAVY PLAN REQUIREMENTS
Section 11.01 Application
Section 11.02 Definitions
Section 11.03 Modification of Vesting Requirements
Section 11.04 Modification of Contributions
Section 11.05 Modification of Contribution Limitation
PLAN EXECUTION
INTRODUCTION
The Primary Employer previously established a 401(k) plan on January 1,
1990. The Primary Employer previously established a profit sharing plan on May
1, 1966 and converted that profit sharing plan to an employee stock ownership
plan effective as of May 1, 1981.
The Primary Employer is of the opinion that the 401(k) plan and the
employee stock ownership plan should be merged. It believes that the best means
to accomplish this merger is to completely restate both plans' terms, provisions
and conditions. The restatement, effective April 30, 2003, is set forth in this
document and is substituted in lieu of the prior documents. Notwithstanding the
prior sentence, the Good Faith Compliance Amendment for the Economic Growth and
Tax Relief and Reconciliation Act of 2001 (EGTRRA) dated December 20, 2001
amending the Casey's General Stores 401(k) Plan shall continue to apply to this
document.
Prior to the restatement, the employee stock ownership plan had a short
plan year from May 1, 2002 through April 29, 2003. Any contribution or
allocation of forfeitures for the plan year ending on April 29, 2003 were
governed under the terms of the prior plan document with statutory limitations
adjusted to reflect the short plan year as required by ERISA and the Code.
The restated plan continues to be for the exclusive benefit of employees of
the Employer. All persons covered under either plan on April 30, 2003, shall
continue to be covered under the restated plan with no loss of benefits.
It is intended that the merged plan, as restated, shall consists of two
components. One component is intended to qualify as a qualified stock bonus plan
under Code Section 401(a) and as an employee stock ownership plan under Code
Section 4975(e)(7). This component includes both contributions made under the
prior employee stock ownership plan and all matching contributions made in
company stock (including such matching contributions made under the 401(k) plan
prior to this restatement). The other component is intended to qualify as a
profit sharing plan under Code Section 401(a). The profit sharing component
includes a qualified cash or deferred arrangement under Code Section 401(k). The
profit sharing component provides for participant-directed investments and is
intended to comply with ERISA Section 404(c). The underlying Trust is intended
to be exempt from taxation under Code Section 501.
The purpose of the Plan is to offer Participants a systematic program for
accumulation of retirement and savings income, as well as a means to obtaining
beneficial interest of ownership in company stock. The ESOP component of the
Plan is intended to invest primarily (and may be exclusively invested) in common
stock of the Employer.
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ARTICLE I
FORMAT AND DEFINITIONS
SECTION 1.01--FORMAT.
Words and phrases defined in the DEFINITIONS SECTION of Article I shall
have that defined meaning when used in this Plan, unless the context clearly
indicates otherwise.
These words and phrases have an initial capital letter to aid in
identifying them as defined terms.
SECTION 1.02--DEFINITIONS.
Account means, for a Participant, his share of the Plan Fund. Separate
accounting records are kept for those parts of his Account that result from:
(a) Elective Deferral Contributions
(b) ESOP Matching Contributions (other than cash dividends paid on
Qualifying Employer Securities and initially reinvested in Qualifying
Employer Securities at the election of the Participant)
(c) ESOP Non-Matching Contributions (other than cash dividends paid on
Qualifying Employer Securities and initially reinvested in Qualifying
Employer Securities at the election of the Participant)
(d) Other Employer Contributions
(e) Specified Minimum Employer Contributions
(f) Rollover Contributions
(g) Diversification Amounts
(h) Cash dividends paid on shares of Qualifying Employer Securities
credited to the account maintained to reflect ESOP Matching and ESOP
Non-Matching (with a separate dividend source account for each such
type of Contribution) that are initially reinvested in Qualifying
Employer Securities at the election of the Participant
If the Participant's Vesting Percentage is less than 100% as to any of the
Employer Contributions, a separate accounting record will be kept for any part
of his Account resulting from such Employer Contributions and, if there has been
a prior Forfeiture Date, from such Contributions made before a prior Forfeiture
Date.
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A Participant's Account shall be reduced by any distribution of his Vested
Account and by any Forfeitures. A Participant's Account shall participate in the
earnings credited, expenses charged, and any appreciation or depreciation of the
Investment Fund. His Account is subject to any minimum guarantees applicable
under the Annuity Contract or other investment arrangement and to any expenses
associated therewith.
If a Participant makes a diversification election under Section 4.02(b),
such amount shall be credited to a Diversification Account, which is maintained
under the non-ESOP component of the Plan.
Accounts and Subaccounts in addition to those specified above may also be
maintained if considered appropriate in the administration of the Plan.
Accrual Computation Period means a consecutive 12-month period ending on
the last day of each Plan Year, including corresponding consecutive 12-month
periods before January 1, 1990.
ACP Test means the nondiscrimination test described in Code Section
401(m)(2) as provided for in subparagraph (d) of the EXCESS AMOUNTS SECTION of
Article III.
Active Participant means an Eligible Employee who is actively participating
in the Plan according to the provisions in the ACTIVE PARTICIPANT SECTION of
Article II.
ADP Test means the nondiscrimination test described in Code Section
401(k)(3) as provided for in subparagraph (c) of the EXCESS AMOUNTS SECTION of
Article III.
Affiliated Service Group means any group of corporations, partnerships or
other organizations of which the Employer is a part and which is affiliated
within the meaning of Code Section 414(m) and regulations thereunder. Such a
group includes at least two organizations one of which is either a service
organization (that is, an organization the principal business of which is
performing services), or an organization the principal business of which is
performing management functions on a regular and continuing basis. Such service
is of a type historically performed by employees. In the case of a management
organization, the Affiliated Service Group shall include organizations related,
within the meaning of Code Section 144(a)(3), to either the management
organization or the organization for which it performs management functions. The
term Controlled Group, as it is used in this Plan, shall include the term
Affiliated Service Group.
Alternate Payee means any spouse, former spouse, child, or other dependent
of a Participant who is recognized by a qualified domestic relations order as
having a right to receive all, or a portion of, the benefits payable under the
Plan with respect to such Participant.
Annual Compensation means, for a Plan Year, the Employee's Compensation for
the Compensation Year ending with or within the consecutive 12-month period
ending on the last day of the Plan Year.
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Annuity Contract means the annuity contract or contracts into which the
Primary Employer enters with the Insurer for guaranteed benefits, for the
investment of Contributions in separate accounts, and for the payment of
benefits under this Plan. The term Annuity Contract as it is used in this Plan
shall include the plural unless the context clearly indicates the singular is
meant.
Annuity Starting Date means, for a Participant, the first day of the first
period for which an amount is payable as an annuity or any other form.
Beneficiary means the person or persons named by a Participant to receive
any benefits under the Plan when the Participant dies. See the BENEFICIARY
SECTION of Article X.
Claimant means any person who makes a claim for benefits under this Plan.
See the CLAIM AND APPEAL PROCEDURES SECTION of Article IX.
Code means the Internal Revenue Code of 1986, as amended.
Compensation means, except for purposes of the CONTRIBUTION LIMITATION
SECTION of Article III and Article XI, the total earnings, except as modified in
this definition, paid or made available to an Employee by the Employer during
any specified period.
"Earnings" in this definition means wages within the meaning of Code
Section 3401(a) and all other payments of compensation to an Employee by the
Employer (in the course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement under Code
Sections 6041(d), 6051(a)(3), and 6052. Earnings must be determined without
regard to any rules under Code Section 3401(a) that limit the remuneration
included in wages based on the nature or location of the employment or the
services performed (such as the exception for agricultural labor in Code Section
3401(a)(2)). The amount reported in the "Wages, Tips and Other Compensation" box
on Form W-2 satisfies this definition.
For any Self-employed Individual, Compensation means Earned Income.
Compensation shall exclude reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation
(other than elective contributions), and welfare benefits.
Compensation shall also include elective contributions. For this purpose,
elective contributions are amounts contributed by the Employer pursuant to a
salary reduction agreement and which are not includible in the gross income of
the Employee under Code Section 125, 402(e)(3), 402(h)(1)(B), or 403(b).
Elective contributions also include compensation deferred under a Code Section
457 plan maintained by the Employer and employee contributions "picked up" by a
governmental entity and, pursuant to Code Section 414(h)(2), treated as Employer
contributions. For years beginning after December 31, 1997, elective
contributions shall also include amounts contributed by the Employer pursuant to
a salary reduction agreement and which are not includible in the gross income of
the Employee under Code Section 132(f)(4).
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For purposes of the EXCESS AMOUNTS SECTION of Article III, the Employer may
elect to use an alternative nondiscriminatory definition of Compensation in
accordance with the regulations under Code Section 414(s).
For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all benefits
provided under the Plan for any determination period shall not exceed $150,000,
as adjusted for increases in the cost-of-living in accordance with Code Section
401(a)(17)(B). The cost-of-living adjustment in effect for a calendar year
applies to any determination period beginning in such calendar year.
If a determination period consists of fewer than 12 months, the annual
limit is an amount equal to the otherwise applicable annual limit multiplied by
a fraction. The numerator of the fraction is the number of months in the short
determination period, and the denominator of the fraction is 12.
If Compensation for any prior determination period is taken into account in
determining a Participant's contributions or benefits for the current Plan Year,
the Compensation for such prior determination period is subject to the
applicable annual compensation limit in effect for that determination period.
For this purpose, in determining contributions or benefits in Plan Years
beginning on or after January 1, 1994, the annual compensation limit in effect
for determination periods beginning before that date is $150,000.
Compensation means, for a Leased Employee, Compensation for the services
the Leased Employee performs for the Employer, determined in the same manner as
the Compensation of Employees who are not Leased Employees, regardless of
whether such Compensation is received directly from the Employer or from the
leasing organization.
Compensation Year means the consecutive 12-month period ending on the last
day of each Plan Year, including corresponding periods before January 1, 1990.
Contingent Annuitant means an individual named by the Participant to
receive a lifetime benefit after the Participant's death in accordance with a
survivorship life annuity.
Contributions means
Elective Deferral Contributions
ESOP Matching Contributions
Matching Contributions
Discretionary Contributions
ESOP Non-Matching Contributions
Specified Minimum Employer Contributions
Rollover Contributions
as set out in Article III, unless the context clearly indicates only
specific contributions are meant.
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Controlled Group means any group of corporations, trades, or businesses of
which the Employer is a part that are under common control. A Controlled Group
includes any group of corporations, trades, or businesses, whether or not
incorporated, which is either a parent-subsidiary group, a brother-sister group,
or a combined group within the meaning of Code Section 414(b), Code Section
414(c) and regulations thereunder and, for purposes of determining contribution
limitations under the CONTRIBUTION LIMITATION SECTION of Article III, as
modified by Code Section 415(h) and, for the purpose of identifying Leased
Employees, as modified by Code Section 144(a)(3). The term Controlled Group, as
it is used in this Plan, shall include the term Affiliated Service Group and any
other employer required to be aggregated with the Employer under Code Section
414(o) and the regulations thereunder.
Direct Rollover means a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
Discretionary Contributions means discretionary contributions made by the
Employer to fund this Plan. See the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
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 Code Section 414(p), are Distributees
with regard to the interest of the spouse or former spouse.
Early Retirement Age means age 55.
Early Retirement Date means the first day of any month before a
Participant's Normal Retirement Date which the Participant selects for the start
of his retirement benefits. This day may be on or after the date on which he
ceases to be an Employee and reaches Early Retirement Age. If a Participant
ceases to be an Employee before satisfying any age requirement for Early
Retirement Age, the Participant shall be entitled to elect an early retirement
benefit upon satisfying such age requirement.
Earned Income means, for a Self-employed Individual, net earnings from
self-employment in the trade or business for which this Plan is established if
such Self-employed Individual's personal services are a material income
producing factor for that trade or business. Net earnings shall be determined
without regard to items not included in gross income and the deductions properly
allocable to or chargeable against such items. Net earnings shall be reduced for
the employer contributions to the Employer's qualified retirement plan(s) to the
extent deductible under Code Section 404.
Net earnings shall be determined with regard to the deduction allowed to
the Employer by Code Section 164(f) for taxable years beginning after December
31, 1989.
Elective Deferral Contributions means contributions made by the Employer to
fund this Plan in accordance with elective deferral agreements between Eligible
Employees and the Employer.
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Elective deferral agreements shall be made, changed, or terminated
according to the provisions of the EMPLOYER CONTRIBUTIONS SECTION of Article
III.
Elective Deferral Contributions shall be 100% vested and subject to the
distribution restrictions of Code Section 401(k) when made. See the WHEN
BENEFITS START SECTION of Article V.
Eligibility Break in Service means an Eligibility Computation Period in
which an Employee is credited with 500 or fewer Hours-of-Service. An Employee
incurs an Eligibility Break in Service on the last day of an Eligibility
Computation Period in which he has an Eligibility Break in Service.
Eligibility Computation Period means a consecutive 12-month period. The
first Eligibility Computation Period begins on an Employee's Employment
Commencement Date. Later Eligibility Computation Periods shall be consecutive
12-month periods ending on the last day of each Plan Year that begins after his
Employment Commencement Date.
To determine an Eligibility Computation Period after an Eligibility Break
in Service, the Plan shall use the consecutive 12-month period beginning on an
Employee's Reemployment Commencement Date as if his Reemployment Commencement
Date were his Employment Commencement Date.
Eligibility Service means one year of service for each Eligibility
Computation Period that has ended and in which an Employee is credited with at
least 1,000 Hours-of-Service.
However Eligibility Services is modified as follows:
Service before a date excluded:
Service before January 1, 1989, is excluded for Employees of the
franchise stores.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
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Eligible Employee means any Employee of the Employer who meets the
following requirement. His employment classification with the Employer is the
following:
Not an Employee who became an Employee as the result of a Code Section
410(b)(6)(C) transaction. These Employees will be excluded during the
period beginning on the date of the transaction and ending on the last
day of the first Plan Year after the date of the transaction. A Code
Section 410(b)(6)(C) transaction is an asset or stock acquisition,
merger, or similar transaction involving a change in the employer of
the employees of a trade or business.
Eligible Retirement Plan means an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a) or a qualified
trust described in Code Section 401(a), that accepts 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.
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: (i) 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 years or more; (ii) any
distribution to the extent such distribution is required under Code Section
401(a)(9); (iii) any hardship distribution described in Code Section
401(k)(2)(B)(i)(IV) received after December 31, 1998; (iv) the portion of any
other distribution(s) that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities); and (v) any other distribution(s) that is reasonably expected to
total less than $200 during a year.
Employee means an individual who is employed by the Employer or any other
employer required to be aggregated with the Employer under Code Sections 414(b),
(c), (m), or (o). A Controlled Group member is required to be aggregated with
the Employer.
The term Employee shall include any Self-employed Individual treated as an
employee of any employer described in the preceding paragraph as provided in
Code Section 401(c)(1). The term Employee shall also include any Leased Employee
deemed to be an employee of any employer described in the preceding paragraph as
provided in Code Section 414(n) or (o).
Employer means, except for purposes of the CONTRIBUTION LIMITATION SECTION
of Article III, the Primary Employer. This will also include any successor
corporation or firm of the Employer which shall, by written agreement, assume
the obligations of this Plan or any Predecessor Employer which maintained this
Plan.
Employer Contributions means
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Elective Deferral Contributions
ESOP Matching Contributions
Matching Contributions
Discretionary Contributions
ESOP Non-Matching Contributions
Specified Minimum Employer Contributions
as set out in Article III and contributions made by the Employer to fund
this Plan in accordance with the provisions of the MODIFICATION OF CONTRIBUTIONS
SECTION of Article XI, unless the context clearly indicates only specific
contributions are meant.
ESOP Matching Contributions means Matching Contributions contributed by the
Employer in the form of Qualifying Employer Securities or designated by the
Employer to be invested in Qualifying Employer Securities. See the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
ESOP Non-Matching Contributions means contributions made by the Employer or
a Controlled Group Member to repay any outstanding Exempt Loan, to provide a
discretionary contribution or for other purposes as described in the EMPLOYER
CONTRIBUTIONS SECTION of Article III.
Exempt Loan means a loan or other extension of credit to the Plan to enable
the Plan to acquire shares of Qualifying Employer Securities, or to refinance a
prior Exempt Loan.
Employment Commencement Date means the date an Employee first performs an
Hour-of-Service.
Entry Date means the date an Employee first enters the Plan as an Active
Participant. See the ACTIVE PARTICIPANT SECTION of Article II.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
Fiscal Year means the Primary Employer's taxable year. The last day of the
Fiscal Year is April 30.
Forfeiture means the part, if any, of a Participant's Account that is
forfeited. See the FORFEITURES SECTION of Article III.
Forfeiture Date means, as to a Participant, the date the Participant incurs
five Vesting Breaks in Service.
Highly Compensated Employee means any Employee who:
(a) was a 5-percent owner at any time during the year or the preceding
year, or
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(b) for the preceding year had compensation from the Employer in excess of
$80,000 and, if the Employer so elects, was in the top-paid group for
the preceding year. The $80,000 amount is adjusted at the same time
and in the same manner as under Code Section 415(d), except that the
base period is the calendar quarter ending September 30, 1996.
For this purpose the applicable year of the plan for which a determination
is being made is called a determination year and the preceding 12-month period
is called a look-back year. If the Employer makes a calendar year data election,
the look-back year shall be the calendar year beginning with or within the
look-back year. The Plan may not use such election to determine whether
Employees are Highly Compensated Employees on account of being a 5-percent
owner.
In determining who is a Highly Compensated Employee, the Employer does not
make a top-paid group election. In determining who is a Highly Compensated
Employee, the Employer does not make a calendar year data election.
Calendar year data elections and top-paid group elections, once made, apply
for all subsequent years unless changed by the Employer. If the Employer makes
one election, the Employer is not required to make the other. If both elections
are made, the look-back year in determining the top-paid group must be the
calendar year beginning with or within the look-back year. These elections must
apply consistently to the determination years of all plans maintained by the
Employer which reference the highly compensated employee definition in Code
Section 414(q), except as provided in Internal Revenue Service Notice 97-45 (or
superseding guidance). The consistency requirement will not apply to
determination years beginning with or within the 1997 calendar year, and for
determination years beginning on or after January 1, 1998 and before January 1,
2000, satisfaction of the consistency requirement is determined without regard
to any nonretirement plans of the Employer.
The determination of who is a highly compensated former Employee is based
on the rules applicable to determining Highly Compensated Employee status as in
effect for that determination year, in accordance with section 1.414(q)-1T, A-4
of the temporary Income Tax Regulations and Internal Revenue Service Notice
97-45.
In determining whether an Employee is a Highly Compensated Employee for
years beginning in 1997, the amendments to Code Section 414(q) stated above are
treated as having been in effect for years beginning in 1996.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the compensation that is considered, and the identity of the 5-percent owners,
shall be made in accordance with Code Section 414(q) and the regulations
thereunder.
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Hour-of-Service means the following:
(a) Each hour for which an Employee is paid, or entitled to payment, for
performing duties for the Employer during the applicable computation
period.
(b) Each hour for which an Employee is paid, or entitled to payment, by
the Employer because of a period of time in which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence.
Notwithstanding the preceding provisions of this subparagraph (b), no
credit will be given to the Employee:
(1) for more than 501 Hours-of-Service under this subparagraph (b)
because of any single continuous period in which the Employee
performs no duties (whether or not such period occurs in a single
computation period); or
(2) for an Hour-of-Service for which the Employee is directly or
indirectly paid, or entitled to payment, because of a period in
which no duties are performed if such payment is made or due
under a plan maintained solely for the purpose of complying with
applicable worker's or workmen's compensation, or unemployment
compensation, or disability insurance laws; or
(3) for an Hour-of-Service for a payment which solely reimburses the
Employee for medical or medically related expenses incurred by
him.
For purposes of this subparagraph (b), a payment shall be deemed to be
made by, or due from the Employer, regardless of whether such payment
is made by, or due from the Employer, directly or indirectly through,
among others, a trust fund or insurer, to which the Employer
contributes or pays premiums and regardless of whether contributions
made or due to the trust fund, insurer or other entity are for the
benefit of particular employees or are on behalf of a group of
employees in the aggregate.
(c) Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same
Hours-of-Service shall not be credited both under subparagraph (a) or
subparagraph (b) above (as the case may be) and under this
subparagraph (c). Crediting of Hours-of-Service for back pay awarded
or agreed to with respect to periods described in subparagraph (b)
above will be subject to the limitations set forth in that
subparagraph.
The crediting of Hours-of-Service above shall be applied under the rules of
paragraphs (b) and (c) of the Department of Labor Regulation 2530.200b-2
(including any interpretations or opinions implementing such rules); which
rules, by this reference, are specifically incorporated in full within this
Plan. The reference to paragraph (b) applies to the special rule for determining
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hours of service for reasons other than the performance of duties such as
payments calculated (or not calculated) on the basis of units of time and the
rule against double credit. The reference to paragraph (c) applies to the
crediting of hours of service to computation periods.
Hours-of-Service shall be credited for employment with any other employer
required to be aggregated with the Employer under Code Sections 414(b), (c),
(m), or (o) and the regulations thereunder for purposes of eligibility and
vesting. Hours-of-Service shall also be credited for any individual who is
considered an employee for purposes of this Plan pursuant to Code Section 414(n)
or (o) and the regulations thereunder.
Solely for purposes of determining whether a one-year break in service has
occurred for eligibility or vesting purposes, during a Parental Absence an
Employee shall be credited with the Hours-of-Service which otherwise would
normally have been credited to the Employee but for such absence, or in any case
in which such hours cannot be determined, eight Hours-of-Service per day of such
absence. The Hours-of-Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the crediting is necessary
to prevent a break in service in that period; or in all other cases, in the
following computation period.
Inactive Participant means a former Active Participant who has an Account.
See the INACTIVE PARTICIPANT SECTION of Article II.
Insurer means Principal Life Insurance Company and any other insurance
company or companies named by the Trustee or Primary Employer.
Investment Fund means the total of Plan assets, excluding the guaranteed
benefit policy portion of any Annuity Contract and excluding any Unallocated
Reserve. All or a portion of these assets may be held under the Trust Agreement.
The Investment Fund shall be valued at current fair market value as of the
Valuation Date. The valuation shall take into consideration investment earnings
credited, expenses charged, payments made, and changes in the values of the
assets held in the Investment Fund.
The Investment Fund shall be allocated at all times to Participants, except
as otherwise expressly provided in the Plan. The Account of a Participant shall
be credited with its share of the gains and losses of the Investment Fund. That
part of a Participant's Account invested in a funding arrangement which
establishes one or more accounts or investment vehicles for such Participant
thereunder shall be credited with the gain or loss from such accounts or
investment vehicles. The part of a Participant's Account which is invested in
other funding arrangements shall be credited with a proportionate share of the
gain or loss of such investments. The share shall be determined by multiplying
the gain or loss of the investment by the ratio of the part of the Participant's
Account invested in such funding arrangement to the total of the Investment Fund
invested in such funding arrangement.
Investment Manager means any fiduciary (other than a trustee or Named
Fiduciary):
-12-
(a) who has the power to manage, acquire, or dispose of any assets of the
Plan;
(b) who (i) is registered as an investment adviser under the Investment
Advisers Act of 1940; (ii) is not registered as an investment adviser
under such Act by reason of paragraph (1) of section 203A(a) of such
Act, is registered as an investment adviser under the laws of the
state (referred to in such paragraph (1)) in which it maintains its
principal office and place of business, and, at the time it last filed
the registration form most recently filed by it with such state in
order to maintain its registration under the laws of such state, also
filed a copy of such form with the Secretary of Labor, (iii) is a
bank, as defined in that Act; or (iv) is an insurance company
qualified to perform services described in subparagraph (a) above
under the laws of more than one state; and
(c) who has acknowledged in writing being a fiduciary with respect to the
Plan.
Late Retirement Date means the first day of any month which is after a
Participant's Normal Retirement Date and on which retirement benefits begin. If
a Participant continues to work for the Employer after his Normal Retirement
Date, his Late Retirement Date shall be the earliest first day of the month on
or after the date he ceases to be an Employee. An earlier or a later Retirement
Date may apply if the Participant so elects. An earlier Retirement Date may
apply if the Participant is age 70 1/2. See the WHEN BENEFITS START SECTION of
Article V.
Leased Employee means any person (other than an employee of the recipient)
who, pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient (or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient. Contributions or benefits provided by the leasing organization to a
Leased Employee, which are attributable to service performed for the recipient
employer, shall be treated as provided by the recipient employer.
A Leased Employee shall not be considered an employee of the recipient if:
(a) such employee is covered by a money purchase pension plan providing
(i) a nonintegrated employer contribution rate of at least 10 percent
of compensation, as defined in Code Section 415(c)(3), but for years
beginning before January 1, 1998, including amounts contributed
pursuant to a salary reduction agreement which are excludible from the
employee's gross income under Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), (ii) immediate participation, and (iii) full
and immediate vesting, and
(b) Leased Employees do not constitute more than 20 percent of the
recipient's nonhighly compensated work force.
-13-
Loan Administrator means the person(s) or position(s) authorized to
administer the Participant loan program.
The Loan Administrator is Corporate Secretary with ministerial duties
delegated to the Payroll Manager.
Matching Contributions means contributions made by the Employer to fund
this Plan which are contingent on a Participant's Elective Deferral
Contributions. See the EMPLOYER CONTRIBUTIONS SECTION of Article III.
Monthly Date means each Yearly Date and the last day of each following
month during the Plan Year beginning on such Yearly Date.
Named Fiduciary means the person or persons who have authority to control
and manage the operation and administration of the Plan.
The Named Fiduciary is the Employer.
Nonhighly Compensated Employee means an Employee of the Employer who is not
a Highly Compensated Employee.
Nonvested Account means the excess, if any, of a Participant's Account over
his Vested Account.
Normal Form means a single life annuity with installment refund.
Normal Retirement Age means the age at which the Participant's normal
retirement benefit becomes nonforfeitable if he is an Employee. A Participant's
Normal Retirement Age is 62.
Normal Retirement Date means the earliest first day of the month on or
after the date the Participant reaches his Normal Retirement Age. Unless
otherwise provided in this Plan, a Participant's retirement benefits shall begin
on a Participant's Normal Retirement Date if he has ceased to be an Employee on
such date and has a Vested Account. Even if the Participant is an Employee on
his Normal Retirement Date, he may choose to have his retirement benefit begin
on such date. See the WHEN BENEFITS START SECTION of Article V.
Owner-employee means a Self-employed Individual who, in the case of a sole
proprietorship, owns the entire interest in the unincorporated trade or business
for which this Plan is established. If this Plan is established for a
partnership, an Owner-employee means a Self-employed Individual who owns more
than 10 percent of either the capital interest or profits interest in such
partnership.
Parental Absence means an Employee's absence from work:
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(a) by reason of pregnancy of the Employee,
(b) by reason of birth of a child of the Employee,
(c) by reason of the placement of a child with the Employee in connection
with 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.
Participant means either an Active Participant or an Inactive Participant.
Period of Military Duty means, for an Employee
(a) who served as a member of the armed forces of the United States, and
(b) who was re-employed by the Employer at a time when the Employee had a
right to re-employment in accordance with seniority rights as
protected under Chapter 43 of Title 38 of the U. S. Code,
the period of time from the date the Employee was first absent from active
work for the Employer because of such military duty to the date the Employee was
reemployed.
Plan means the retirement and savings plan of the Employer set forth in
this document, including any later amendments to it. The portion of the Plan
that consists of the Qualifying Employer Securities Fund is a stock bonus and
employee stock ownership plan within the meaning of Code Section 4975(e)(7). The
remaining portion of the Plan is a profit sharing plan with a qualified cash or
deferred arrangement under Code Section 401(k).
Plan Administrator means the person or persons who administer the Plan.
The Plan Administrator is the Employer.
Plan Fund means the total of the Investment Fund and the guaranteed benefit
policy portion of any Annuity Contract and any Unallocated Reserve. The
Investment Fund shall be valued as stated in its definition. The guaranteed
benefit policy portion of any Annuity Contract shall be determined in accordance
with the terms of the Annuity Contract and, to the extent that such Annuity
Contract allocates contract values to Participants, allocated to Participants in
accordance with its terms. The total value of all amounts held under the Plan
Fund, less amounts held in any Unallocated Reserve or reflected in a Forfeiture
Account, shall equal the value of the aggregate Participants' Accounts under the
Plan.
Plan Year means a period beginning on a Yearly Date and ending on the day
before the next Yearly Date.
-15-
Predecessor Employer means a firm of which the Employer was once a part
(e.g., due to a spinoff or change of corporate status) or a firm absorbed by the
Employer because of a merger or acquisition (stock or asset, including a
division or an operation of such company).
Primary Employer means Casey's General Stores, Inc..
Qualified Joint and Survivor Annuity means, for a Participant who has a
spouse, an immediate survivorship life annuity with installment refund, where
the survivorship percentage is 50% and the Contingent Annuitant is the
Participant's spouse. A former spouse will be treated as the spouse to the
extent provided under a qualified domestic relations order as described in Code
Section 414(p).
The amount of benefit payable under the Qualified Joint and Survivor
Annuity shall be the amount of benefit which may be provided by the
Participant's Vested Account.
Qualified Preretirement Survivor Annuity means a single life annuity with
installment refund payable to the surviving spouse of a Participant who dies
before his Annuity Starting Date. A former spouse will be treated as the
surviving spouse to the extent provided under a qualified domestic relations
order as described in Code Section 414(p).
Qualifying Employer Securities means any security which is issued by the
Employer or any Controlled Group member and which meets the requirements of Code
Section 409(l) and ERISA Section 407(d)(5). This shall also include any
securities that satisfied the requirements of the definition when these
securities were assigned to the Plan.
Qualifying Employer Securities Fund means that part of the assets of the
Trust Fund that are designated to be held primarily or exclusively in Qualifying
Employer Securities for the purpose of providing benefits for Participants.
Reemployment Commencement Date means the date an Employee first performs an
Hour-of-Service following an Eligibility Break in Service.
Reentry Date means the date a former Active Participant reenters the Plan.
See the ACTIVE PARTICIPANT SECTION of Article II.
Retirement Date means the date a retirement benefit will begin and is a
Participant's Early, Normal, or Late Retirement Date, as the case may be.
Rollover Contributions means the Rollover Contributions which are made by
an Eligible Employee or an Inactive Participant according to the provisions of
the ROLLOVER CONTRIBUTIONS SECTION of Article III.
Self-employed Individual means, with respect to any Fiscal Year, an
individual who has Earned Income for the Fiscal Year (or who would have Earned
Income but for the fact the trade or business for which this Plan is established
did not have net profits for such Fiscal Year).
-16-
Semi-yearly Date means each Yearly Date and the sixth Monthly Date after
each Yearly Date which is within the same Plan Year.
Specified Minimum Employer Contributions means an amount contributed by the
Employer to the Trust pursuant to Section 3.01(d) of the Plan.
Totally and Permanently Disabled means that a Participant is disabled, as a
result of sickness or injury, to the extent that he is prevented from engaging
in any substantial gainful activity, and is eligible for and receives a
disability benefit under Title II of the Federal Social Security Act.
Trust Agreement means an agreement of trust between the Primary Employer
and Trustee established for the purpose of holding and distributing the Trust
Fund under the provisions of the Plan. The Trust Agreement may provide for the
investment of all or any portion of the Trust Fund in the Annuity Contract.
Trust Fund means the total funds held under the Trust Agreement.
Trustee means the party or parties named in the Trust Agreement. The term
Trustee as it is used in this Plan is deemed to include the plural unless the
context clearly indicates the singular is meant.
Unallocated Reserve means the portion of the Trust Fund that consists of
the proceeds of an Exempt Loan, the shares of Qualifying Employer Securities
that were acquired with the proceeds of an Exempt Loan and that have not yet
been allocated to Participant Accounts, the dividends and other investment
earnings on the assets held in the Unallocated Reserve, and the proceeds from
any sale of shares of Qualifying Employer Securities held in the Unallocated
Reserve.
Valuation Date means the date on which the value of the assets of the
Investment Fund is determined. The value of each Account which is maintained
under this Plan shall be determined on the Valuation Date. In each Plan Year,
the Valuation Date shall be the last day of the Plan Year. At the discretion of
the Plan Administrator, Trustee, or Insurer (whichever applies), assets of the
Investment Fund may be valued more frequently. These dates shall also be
Valuation Dates.
Vested Account means the vested part of a Participant's Account. The
Participant's Vested Account is determined as follows.
If the Participant's Vesting Percentage is 100%, his Vested Account equals
his Account.
If the Participant's Vesting Percentage is less than 100%, his Vested
Account equals the sum of (a), (b) and (c) below:
(a) The part of the Participant's Account that results from Employer
Contributions made before a prior Forfeiture Date and all other
Contributions which were 100% vested when made.
-17-
(b) The part of the Participant's Account that results from cash dividends
paid on shares of Qualifying Employer Securities credited to the
source account for ESOP Matching or ESOP Non-Matching Contributions
that are initially reinvested in Qualifying Employer Securities at the
election of the Participant.
(c) The balance of the Participant's Account in excess of the amount in
(a) above multiplied by his Vesting Percentage.
The Participant's Vested Account is nonforfeitable.
Vesting Break in Service means a Vesting Computation Period in which an
Employee is credited with 500 or fewer Hours-of-Service. An Employee incurs a
Vesting Break in Service on the last day of a Vesting Computation Period in
which he has a Vesting Break in Service.
Vesting Computation Period means a consecutive 12-month period ending on
the last day of each Plan Year, including corresponding consecutive 12-month
periods before January 1, 1990.
Vesting Percentage means the percentage used to determine the
nonforfeitable portion of a Participant's Account attributable to Employer
Contributions which were not 100% vested when made.
A Participant's Vesting Percentage for Employer Contributions other than
ESOP Non-Matching Contributions is shown in the following schedule opposite the
number of whole years of his Vesting Service.
VESTING SERVICE VESTING
(whole years) PERCENTAGE
Less than 1 0
1 10
2 20
3 40
4 60
5 80
6 or more 100
A Participant's Vesting Percentage for ESOP Non-Matching Contributions is
shown in the following schedule opposite the number of whole years of his
Vesting Service.
VESTING SERVICE VESTING
(whole years) PERCENTAGE
Less than 5 0
5 or more 100
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The Vesting Percentage for a Participant who is an Employee on or after the
date he reaches Normal Retirement Age or Early Retirement Age shall be 100%. The
Vesting Percentage for a Participant who is an Employee on the date he becomes
Totally and Permanently Disabled or dies shall be 100%.
If the schedule used to determine a Participant's Vesting Percentage is
changed, the new schedule shall not apply to a Participant unless he is credited
with an Hour-of-Service on or after the date of the change and the Participant's
nonforfeitable percentage on the day before the date of the change is not
reduced under this Plan. The amendment provisions of the AMENDMENTS SECTION of
Article X regarding changes in the computation of the Vesting Percentage shall
apply.
Vesting Service means the sum of (a) and (b) below:
(a) The total of an Employee's service with the Employer before January 1,
1990. This total is expressed in whole years and fractional parts of a
year (counting a partial month as a complete month).
(b) One year of service for each Vesting Computation Period ending on or
after January 1, 1990, in which an Employee is credited with at least
1,000 Hours-of-Service.
However, Vesting Service is modified as follows:
Service before a date excluded:
Service before January 1, 1989, is excluded for Employees of the
franchise stores.
Period of Military Duty included:
A Period of Military Duty shall be included as service with the
Employer to the extent it has not already been credited. For purposes
of crediting Hours-of-Service during the Period of Military Duty, an
Hour-of-Service shall be credited (without regard to the 501
Hour-of-Service limitation) for each hour an Employee would normally
have been scheduled to work for the Employer during such period.
Controlled Group service included:
An Employee's service with a member firm of a Controlled Group while
both that firm and the Employer were members of the Controlled Group
shall be included as service with the Employer.
Yearly Date means January 1, 1990, and each following May 1 through May 1,
1999, and each following April 30.
-19-
Years of Service means an Employee's Vesting Service disregarding any
modifications which exclude service.
ARTICLE II
PARTICIPATION
SECTION 2.01--ACTIVE PARTICIPANT.
(a) An Employee shall first become an Active Participant (begin active
participation in the Plan) on the earliest Semi-yearly Date on which
he is an Eligible Employee and has met both of the eligibility
requirements set forth below. This date is his Entry Date.
(1) He has completed one year of Eligibility Service before his Entry
Date.
(2) He is age 21 or older.
Each Employee who was an Active Participant under the Plan on April
29, 2003, shall continue to be an Active Participant if he is still an
Eligible Employee on April 30, 2003, and his Entry Date shall not
change.
If a person has been an Eligible Employee who has met all of the
eligibility requirements above, but is not an Eligible Employee on the
date which would have been his Entry Date, he shall become an Active
Participant on the date he again becomes an Eligible Employee. This
date is his Entry Date.
In the event an Employee who is not an Eligible Employee becomes an
Eligible Employee, such Eligible Employee shall become an Active
Participant immediately if such Eligible Employee has satisfied the
eligibility requirements above and would have otherwise previously
become an Active Participant had he met the definition of Eligible
Employee. This date is his Entry Date.
(b) An Inactive Participant shall again become an Active Participant
(resume active participation in the Plan) on the date he again
performs an Hour-of-Service as an Eligible Employee. This date is his
Reentry Date.
Upon again becoming an Active Participant, he shall cease to be an
Inactive Participant.
(c) A former Participant shall again become an Active Participant (resume
active participation in the Plan) on the date he again performs an
Hour-of-Service as an Eligible Employee. This date is his Reentry
Date.
-20-
There shall be no duplication of benefits for a Participant under this Plan
because of more than one period as an Active Participant.
SECTION 2.02--INACTIVE PARTICIPANT.
An Active Participant shall become an Inactive Participant (stop accruing
benefits under the Plan) on the earlier of the following:
(a) the date the Participant ceases to be an Eligible Employee, or
(b) the effective date of complete termination of the Plan under
Article VIII.
An Employee or former Employee who was an Inactive Participant under the
Plan on April 30, 1997, shall continue to be an Inactive Participant on May 1,
1997. Eligibility for any benefits payable to the Participant or on his behalf
and the amount of the benefits shall be determined according to the provisions
of the prior document, unless otherwise stated in this document.
SECTION 2.03--CESSATION OF PARTICIPATION.
A Participant shall cease to be a Participant on the date he is no longer
an Eligible Employee and his Account is zero.
ARTICLE III
CONTRIBUTIONS
SECTION 3.01--EMPLOYER CONTRIBUTIONS.
Employer Contributions shall be made without regard to current or
accumulated net income, earnings or profits of the Employer. Notwithstanding the
foregoing, the Plan shall continue to be designed to qualify as a profit sharing
plan for purposes of Code Sections 401(a), 402, 412, and 417; except that, the
portion of the Plan that consists of the Qualifying Employer Securities Fund is
designed to qualify as a stock bonus plan and employee stock ownership plan
under Code Section 4975(e)(7). Employer Contributions shall be equal to the
amount described below:
(a) The amount of each Elective Deferral Contribution for a Participant
shall be equal to a portion of Compensation as specified in the
elective deferral agreement. An Employee who is eligible to
participate in the Plan may file an elective deferral agreement with
the Employer. The Participant shall modify or terminate the elective
deferral agreement by filing a new elective deferral agreement. The
elective deferral agreement may not be made retroactively and shall
remain in effect until modified or terminated.
-21-
The elective deferral agreement to start or modify Elective Deferral
Contributions shall be effective on the first day of the first pay
period following the pay period in which the Participant's Entry Date
(Reentry Date, if applicable) or any following date occurs. The
elective deferral agreement must be entered into on or before the date
it is effective.
The elective deferral agreement to stop Elective Deferral
Contributions may be entered into on any date. Such elective deferral
agreement shall be effective on the first day of the pay period
following the pay period in which the elective deferral agreement is
entered into.
Elective Deferral Contributions cannot be more than 15% of
Compensation for the pay period.
Elective Deferral Contributions are fully (100%) vested and
nonforfeitable.
(b) The Employer shall make Matching Contributions in an amount equal to
100% of Elective Deferral Contributions. Elective Deferral
Contributions which are over 4% of Compensation won't be matched.
Matching Contributions are calculated based on Elective Deferral
Contributions and Compensation for the pay period. Matching
Contributions are made for all persons who were Active Participants at
any time during that pay period. Matching Contributions may be made in
the form of Qualifying Employer Securities or the Employer may
designate that Matching Contributions are to be invested in Qualifying
Employer Securities. Such Matching Contributions shall be referred to
as ESOP Matching Contributions and shall be part of the ESOP component
of the Plan.
Matching Contributions and ESOP Matching Contributions are subject to
the Vesting Percentage. However, the separate account maintained to
reflect the cash dividends paid on shares of Qualifying Employer
Securities attributable to Matching Contributions (and earnings
thereon) that are initially reinvested in Qualifying Employer
Securities under the Plan at the election of the Participant is fully
(100%) vested and nonforfeitable.
(c) Discretionary Contributions may be made for each Plan Year in an
amount determined by the Employer.
Discretionary Contributions are subject to the Vesting Percentage.
(d) ESOP Non-Matching Contributions will be made for each Plan Year for
which a payment is due on an Exempt Loan. The amount of the ESOP
Non-Matching Contribution for the Plan Year will be determined at the
sole discretion of the Primary Employer, but will not be less than the
minimum amount sufficient to
-22-
enable the Trustee to make the payment due on the Exempt Loan to the
extent that such payment cannot be satisfied from cash dividends paid
on shares of Qualifying Employer Securities held in the ESOP
Non-Matching Accounts (if the Primary Employer directs that such
dividends be applied to the Exempt Loan), or cash dividends paid on
shares of Qualifying Employer Securities held in the Unallocated
Reserve or other investment earnings of the Unallocated Reserve.
Additional ESOP Non-Matching Contributions may be made for each Plan
Year in an amount determined by the Employer.
ESOP Non-Matching Contributions are subject to the Vesting Percentage.
However, the separate account maintained to reflect the cash dividends
paid on shares of Qualifying Employer Securities attributable to ESOP
Non-Matching Contributions (and earnings thereon) that are initially
reinvested in Qualifying Employer Securities under the Plan at the
election of the Participant is fully (100%) vested and nonforfeitable.
(e) The Employer, in its sole discretion, may contribute an amount, for
any Plan Year, which it designates as a Specified Minimum Employer
Contribution. Notwithstanding any provision of the Plan to the
contrary, the following provisions shall govern the treatment of
Specified Minimum Employer Contributions.
(1) Frequency. For each Plan Year, the Employer shall make a
Specified Minimum Employer Contribution, as described in the
following allocation method, on behalf of each individual who is
both an Employee and a Participant on the first day of the Plan
Year (a "SMEC Participant"). The Specified Minimum Employer
Contribution for each Plan Year shall be in an amount determined
by the Board of Directors by appropriate resolution on or before
the last day of the Employer's taxable year that ends within such
Plan Year.
(2) Allocation Method. Any Specified Minimum Employer Contribution
made by the Employer pursuant to this Section 3.01(e) shall be
allocated to the SMEC Participants as follows:
(i) The Specified Minimum Employer Contribution shall be
allocated to the payment of Elective Deferral Contributions
and Matching Contributions to be made to SMEC Participants'
accounts pursuant to Section 3.03 of the Plan.
(ii) Second, the balance, if any, of the Specified Minimum
Employer Contribution remaining after the allocation next
above shall be allocated as to the payment of Matching
Contribution, if any, on the last day of the Plan Year to
the Account of each SMEC
-23-
Participant who is not also a Highly Compensated Employee,
in the ratio that each such SMEC Participant's Elective
Deferral Contributions during the Plan Year bears to the
Elective Deferral Contributions of all such SMEC
Participants during the Plan Year.
(3) Notwithstanding anything to the contrary contained herein, the
following limitations shall apply to any Specified Minimum
Employer Contribution made pursuant to this Section of the Plan:
(i) The Plan Administrator shall reduce the proportionate
allocation of the Specified Minimum Employer Contribution
under this section to Highly Compensated Employees to the
extent necessary to comply with the provisions of this Plan
and the Code, include Code Section 401(a)(4) and the
regulations thereunder.
(ii) Any payment/allocation of Elective Deferral Contributions
to a SMEC Participant's Account shall be made under either
Section 3.03 or this Section, as appropriate, but not both
sections.
(iii) The Specified Minimum Employer Contribution allocated as a
Matching Contribution to a SMEC Participant's account
pursuant to this Section of the Plan, shall be treated in
the same manner as Matching Contributions for all purposes
under the Plan.
(iv) A Participant's allocation determined under this Section
may be subject to an adjustment as may be necessary to
prevent Contributions made by or on behalf of a Participant
for a Plan Year to exceed the maximum allowable under Code
Section 415, or any other provision of the Code or this
Plan.
(4) Timing, Medium and Posting. The employer shall make the Specified
Minimum Employer Contribution in cash, in one or more
installments without interest, at any time during the Plan Year,
and for purposes of deducting such Contribution, not later than
the Employer's federal tax filing date, including extensions, for
its taxable year that ends within such Plan Year. The Trustee
shall post such amount to each Participant's account as Elective
Deferral Contributions or Matching Contributions once the
allocations under this Section of the Plan as provided above are
determined.
The Specified Minimum Employer Contribution shall be held in a
suspense account until posted. Such suspense account shall not
participate in the allocation of investment gains, losses, income
and deductions of the Trust as a whole, but shall be invested
separately and all gains, losses, income and deductions
attributable to such investment shall be applied to
-24-
reduce Plan fees and expenses and, thereafter, to reduce Employer
contributions.
(5) Deduction Limitation. In no event shall the Specified Minimum
Employer Contribution, when aggregated with other Employer
contributions for the Employer's taxable year that ends within
such Plan Year, exceed the amount deductible by the Employer for
federal income tax purposes for such taxable year.
No Participant shall be permitted to have Elective Deferral Contributions,
as defined in the EXCESS AMOUNTS SECTION of this article, made under this Plan,
or any other qualified plan maintained by the Employer, during any taxable year,
in excess of the dollar limitation contained in Code Section 402(g) in effect at
the beginning of such taxable year.
An elective deferral agreement (or change thereto) must be made in such
manner and in accordance with such rules as the Employer may prescribe
(including by means of voice response or other electronic system under
circumstances the Employer permits) and may not be made retroactively.
Employer Contributions are allocated according to the provisions of the
ALLOCATION SECTION of this article.
The Employer may make all or any portion of the Matching Contributions,
which are to be invested in Qualifying Employer Securities, to the Trustee in
the form of Qualifying Employer Securities.
A portion of the Plan assets resulting from Employer Contributions (but not
more than the original amount of those Contributions) may be returned if the
Employer Contributions are made because of a mistake of fact or are more than
the amount deductible under Code Section 404 (excluding any amount which is not
deductible because the Plan is disqualified). The amount involved must be
returned to the Employer within one year after the date the Employer
Contributions are made by mistake of fact or the date the deduction is
disallowed, whichever applies. Except as provided under this paragraph and
Article VIII, the assets of the Plan shall never be used for the benefit of the
Employer and are held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for defraying reasonable expenses of
administering the Plan.
SECTION 3.01A--ROLLOVER CONTRIBUTIONS.
A Rollover Contribution may be made by an Eligible Employee or an Inactive
Participant if the following conditions are met:
(a) The Contribution is of amounts distributed from a plan that satisfies
the requirements of Code Section 401(a) or from a "conduit" individual
retirement account described in Code Section 408(d)(3)(A). In the case
of an Inactive
-25-
Participant, the Contribution must be of an amount distributed from
another plan of the Employer, or a plan of a Controlled Group member,
that satisfies the requirements of Code Section 401(a).
(b) The Contribution is of amounts that the Code permits to be transferred
to a plan that meets the requirements of Code Section 401(a).
(c) The Contribution is made in the form of a direct rollover under Code
Section 401(a)(31) or is a rollover made under 402(c) or 408(d)(3)(A)
within 60 days after the Eligible Employee or Inactive Participant
receives the distribution.
(d) The Eligible Employee or Inactive Participant furnishes evidence
satisfactory to the Plan Administrator that the proposed rollover
meets conditions (a), (b), and (c) above.
A Rollover Contribution shall be allowed in cash only and must be made
according to procedures set up by the Plan Administrator.
If the Eligible Employee is not an Active Participant when the Rollover
Contribution is made, he shall be deemed to be an Active Participant only for
the purpose of investment and distribution of the Rollover Contribution.
Employer Contributions shall not be made for or allocated to the Eligible
Employee until the time he meets all of the requirements to become an Active
Participant.
Rollover Contributions made by an Eligible Employee or an Inactive
Participant shall be credited to his Account. The part of the Participant's
Account resulting from Rollover Contributions is fully (100%) vested and
nonforfeitable at all times. A separate accounting record shall be maintained
for that part of his Rollover Contributions consisting of voluntary
contributions which were deducted from the Participant's gross income for
Federal income tax purposes.
SECTION 3.02--FORFEITURES.
The Nonvested Account of a Participant shall be forfeited as of the earlier
of the following:
(a) the date the Participant dies (if prior to such date he had ceased to
be an Employee), or
(b) the Participant's Forfeiture Date.
All or a portion of a Participant's Nonvested Account shall be forfeited before
such earlier date if, after he ceases to be an Employee, he receives, or is
deemed to receive, a distribution of his entire Vested Account or a distribution
of his Vested Account derived from Employer Contributions which were not 100%
vested when made, under the RETIREMENT BENEFITS
-26-
SECTION of Article V, the VESTED BENEFITS SECTION of Article V, or the SMALL
AMOUNTS SECTION of Article X. The forfeiture shall occur as of the date the
Participant receives, or is deemed to receive, the distribution. If a
Participant receives, or is deemed to receive, his entire Vested Account, his
entire Nonvested Account shall be forfeited. If a Participant receives a
distribution of his Vested Account from Employer Contributions which were not
100% vested when made, but less than his entire Vested Account from such
Contributions, the amount to be forfeited shall be determined by multiplying his
Nonvested Account from such Contributions by a fraction. The numerator of the
fraction is the amount of the distribution derived from Employer Contributions
which were not 100% vested when made and the denominator of the fraction is his
entire Vested Account derived from such Contributions on the date of
distribution.
A Forfeiture shall also occur as provided in the EXCESS AMOUNTS SECTION of
this article.
Forfeitures shall be determined at least once during each Plan Year.
Forfeitures may first be used to pay administrative expenses. Forfeitures of
Matching Contributions which relate to excess amounts as provided in the EXCESS
AMOUNTS SECTION of this article, which have not been used to pay administrative
expenses, shall be applied to reduce the earliest Employer Contributions made
after the Forfeitures are determined. Any other Forfeitures which have not been
used to pay administrative expenses shall be applied to reduce the earliest
Employer Contributions made after the Forfeitures are determined. Upon their
application to reduce Employer Contributions, Forfeitures shall be deemed to be
Employer Contributions.
Forfeitures of Qualifying Employer Securities held in an ESOP Matching or
ESOP Non-Matching Account may be used to satisfy any allocation of Qualifying
Employer Securities required under the ALLOCATIONS SECTION of this article.
If a Participant again becomes an Eligible Employee after receiving a
distribution which caused all or a portion of his Nonvested Account to be
forfeited, he shall have the right to repay to the Plan the entire amount of the
distribution he received (excluding any amount of such distribution resulting
from Contributions which were 100% vested when made). The repayment must be made
in a single sum (repayment in installments is not permitted) before the earlier
of the date five years after the date he again becomes an Eligible Employee or
the end of the first period of five consecutive Vesting Breaks in Service which
begin after the date of the distribution.
If the Participant makes the repayment above, the Plan Administrator shall
restore to his Account an amount equal to his Nonvested Account which was
forfeited on the date of distribution, unadjusted for any investment gains or
losses. If no amount is to be repaid because the Participant was deemed to have
received a distribution, or only received a distribution of Contributions which
were 100% vested when made, and he again performs an Hour-of-Service as an
Eligible Employee within the repayment period, the Plan Administrator shall
restore the Participant's Account as if he had made a required repayment on the
date he performed such Hour-of-Service. Restoration of the Participant's Account
shall include restoration of all Code Section 411(d)(6) protected benefits with
respect to that restored Account, according to applicable Treasury regulations.
Provided, however,
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the Plan Administrator shall not restore the Nonvested Account if (i) a
Forfeiture Date has occurred after the date of the distribution and on or before
the date of repayment and (ii) that Forfeiture Date would result in a complete
forfeiture of the amount the Plan Administrator would otherwise restore.
The Plan Administrator shall restore the Participant's Account by the close
of the Plan Year following the Plan Year in which repayment is made. Permissible
sources for the restoration of the Participant's Account are Forfeitures or
special Employer Contributions. Such special Employer Contributions shall be
made without regard to profits. The repaid and restored amounts are not included
in the Participant's Annual Additions, as defined in the CONTRIBUTION LIMITATION
SECTION of this article.
SECTION 3.03--ALLOCATION.
A person meets the allocation requirements of this section if he is an
Active Participant on the last day of the Plan Year and has at least 1,000
Hours-of-Service during the latest Accrual Computation Period ending on or
before that date.
Elective Deferral Contributions shall be allocated to Participants for whom
such Contributions are made under the EMPLOYER CONTRIBUTIONS SECTION of this
article. Such Contributions shall be allocated when made and credited to the
Participant's Account.
Matching Contributions (including ESOP Matching Contributions) shall be
allocated to the persons for whom such Contributions are made under the EMPLOYER
CONTRIBUTIONS SECTION of this article. Such Contributions shall be allocated
when made and credited to the person's Account.
Discretionary Contributions shall be allocated as of the last day of the
Plan Year using Annual Compensation for the Plan Year. The amount allocated
shall be determined as follows:
STEP ONE: This step one shall only apply in years in which the Plan is a
Top-heavy Plan, as defined in the DEFINITIONS SECTION of Article XI, and the
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of Article
XI is not being provided by other contributions to this Plan or another plan of
the Employer.
The allocation in this step one shall be made to each person meeting the
allocation requirements of this section and each person who is entitled to a
minimum contribution under the MODIFICATION OF CONTRIBUTIONS SECTION of Article
XI. Each such person's allocation shall be an amount equal to the Discretionary
Contributions multiplied by the ratio of such person's Annual Compensation to
the total Annual Compensation of all such persons. Such amount shall not exceed
3% of such person's Annual Compensation. The allocation for any person who does
not meet the allocation requirements of this section shall be limited to the
amount necessary to fund the minimum contribution.
STEP TWO: The allocation in this step two shall be made to each person meeting
the allocation requirements of this section. Each such person's allocation shall
be equal to any amount remaining
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after the allocation in step one multiplied by the ratio of such person's Annual
Compensation to the total Annual Compensation of all such persons.
This amount shall be credited to the person's Account.
The ESOP Non-Matching Contribution for the Plan Year (if any), together
with the cash dividends paid on Qualifying Employer Securities held in the ESOP
Non-Matching Contribution Accounts (if the Primary Employer directs that such
dividends be applied to the Exempt Loan), cash dividends paid on Qualifying
Employer Securities held in the Unallocated Reserve and other investment
earnings of the Unallocated Reserve (if any), shall be applied to make the
payment due on any Exempt Loan for the Plan Year. The Qualifying Employer
Securities released from the Unallocated Reserve as a result of that payment
shall be allocated as of the last day of the Plan Year as follows:
STEP ONE: This step one shall apply only if the cash dividends paid on
Qualifying Employer Securities held in the ESOP Non-Matching Contribution
Accounts are applied to the Exempt Loan.
The allocation in this step one shall be made to each person who received a cash
dividend on Qualifying Employer Securities held in his/her ESOP Non-Matching
Contribution Account that was applied to the Exempt Loan.
The number of shares of Qualifying Employer Securities allocated under this step
one shall equal the number of shares with a value equal to the total cash
dividends paid on Qualifying Employer Securities held in the ESOP Non-Matching
Contribution Accounts and applied to the Exempt Loan. The number of shares of
Qualifying Employer Securities allocated to each such person shall be determined
by multiplying the number of shares of Qualifying Employer Securities to be
allocated under this step one by a fraction, the numerator of which is the cash
dividends paid on Qualifying Employer Securities held in the ESOP Non-Matching
Account of such person and applied to the Exempt Loan, and the denominator of
which is the total cash dividends paid on Qualifying Employer Securities held in
the ESOP Non-Matching Accounts of all such persons and applied to the Exempt
Loan.
STEP TWO: The allocation in this step two shall be made among those persons who
meet the allocation requirements of this section, but subject to the PROHIBITED
ALLOCATION OF QUALIFYING EMPLOYER SECURITIES SECTION of this article.
The number of shares of Qualifying Employer Securities allocated to each such
person shall be determined by multiplying the number of shares of Qualifying
Employer Securities released from the Unallocated Reserve (and not allocated
under step one) by a fraction, the numerator of which is the Annual Compensation
of such person for the Plan Year, and the denominator of which is the aggregate
Annual Compensation of all such persons for the Plan Year. However, if the
aggregate amount of Qualifying Employer Securities that would be allocated under
this paragraph to Highly Compensated Employees exceeds one-third of the total
Qualifying Employer Securities allocated, then the amount of Qualifying Employer
Securities in excess of one-third
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shall be reallocated to the Nonhighly Compensated Employees in proportion to
each Nonhighly Compensated Employee's Annual Compensation to the total Annual
Compensation of all such Nonhighly Compensated Employees.
If the ESOP Non-Matching Contributions exceed the amount needed to make the
payment for the Exempt Loan for the Plan Year, or if there is no Exempt Loan for
the Plan Year in which the ESOP Non-Matching Contribution is made, the ESOP
Non-Matching Contribution shall be allocated in the same manner as Discretionary
Contributions.
Specified Minimum Employer Contributions shall be allocated to the Account
of the eligible Participants in accordance with subparagraph 3.01(e)(2).
If Leased Employees are Eligible Employees, in determining the amount of
Employer Contributions allocated to a person who is a Leased Employee,
contributions provided by the leasing organization which are attributable to
services such Leased Employee performs for the Employer shall be treated as
provided by the Employer. Those contributions shall not be duplicated under this
Plan.
SECTION 3.04--CONTRIBUTION LIMITATION.
(a) Definitions. For the purpose of determining the contribution
limitation set forth in this section, the following terms are defined.
Annual Additions means the sum of the following amounts credited to a
Participant's account for the Limitation Year:
(1) employer contributions; provided that, ESOP Non-Matching Contributions
under this Plan that are applied to pay interest on an Exempt Loan
will not be an Annual Addition if no more than one-third (1/3/rd/) of
the ESOP Non-Matching Contribution that is applied to pay principal or
interest on an Exempt Loan for the Plan Year is allocated to Highly
Compensated Employees;
(2) employee contributions; and
(3) forfeitures.
Annual Additions to a defined contribution plan shall also include the
following:
(4) amounts allocated, after March 31, 1984, to an individual medical
account, as defined in Code Section 415(l)(2), which are part of a
pension or annuity plan maintained by the Employer,
(5) amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable
to post-retirement
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medical benefits, allocated to the separate account of a key employee,
as defined in Code Section 419A(d)(3), under a welfare benefit fund,
as defined in Code Section 419(e), maintained by the Employer; and
(6) allocations under a simplified employee pension.
For this purpose, any Excess Amount applied under (e) below in the
Limitation Year to reduce Employer Contributions shall be considered Annual
Additions for such Limitation Year.
Compensation means wages within the meaning of Code Section 3401(a) and all
other payments of compensation to an Employee by the Employer (in the course of
the Employer's trade or business) for which the Employer is required to furnish
the Employee a written statement under Code Sections 6041(d), 6051(a)(3), and
6052. Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)). The amount
reported in the "Wages, Tips and Other Compensation" box on Form W-2 satisfies
this definition.
For any Self-employed Individual, Compensation shall mean Earned Income.
For purposes of applying the limitations of this section, Compensation for
a Limitation Year is the Compensation actually paid or made available in gross
income during such Limitation Year.
For Limitation Years beginning after December 31, 1997, for purposes of
applying the limitations of this section, Compensation paid or made available
during such Limitation Year shall include any elective deferral (as defined in
Code Section 402(g)(3)), and any amount which is contributed or deferred by the
Employer at the election of the Employee and which is not includible in the
gross income of the Employee by reason of Code Section 125, 132(f)(4), or 457.
Defined Benefit Plan Fraction means a fraction, the numerator of which is
the sum of the Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of (i) 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b)(1)(A) and (d) or
(ii) 140 percent of the Highest Average Compensation, including any adjustments
under Code Section 415(b)(5).
Notwithstanding the above, if the Participant was a participant as of the
first day of the first Limitation Year beginning after December 31, 1986, in one
or more defined benefit plans maintained by the Employer which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning before January
1, 1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the
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aggregate satisfied the requirements of Code Section 415 for all Limitation
Years beginning before January 1, 1987.
Defined Contribution Dollar Limitation means, for Limitation Years
beginning after December 31, 1994, $30,000, as adjusted under Code Section
415(d).
Defined Contribution Plan Fraction means a fraction, the numerator of which
is the sum of the Annual Additions to the Participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible employee contributions
to all defined benefit plans, whether or not terminated, maintained by the
Employer, and the Annual Additions attributable to all welfare benefit funds,
individual medical accounts, and simplified employee pensions, maintained by the
Employer), and the denominator of which is the sum of the maximum aggregated
amounts for the current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution plan was maintained by
the Employer). The maximum aggregate amount in any Limitation Year is the lesser
of (i) 125 percent of the dollar limitation under Code Section 415(c)(1)(A)
after adjustment under Code Section 415(d) or (ii) 35 percent of the
Participant's Compensation for such year.
If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (i)
the excess of the sum of the fractions over 1.0 times (ii) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the plan made
after May 5, 1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
The Annual Addition for any Limitation Year beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as Annual
Additions.
Employer means the employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code Section 414(b) as modified
by Code Section 415(h)), all commonly controlled trades or businesses (as
defined in Code Section 415(c) as modified by Code Section 415(h)) or affiliated
service groups (as defined in Code Section 414(m)) of which the adopting
employer is a part, and any other entity required to be aggregated with the
employer pursuant to regulations under Code Section 414(o).
Excess Amount means the excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
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Highest Average Compensation means the average Compensation for the three
consecutive Limitation Years while he was an Employee (actual consecutive
Limitation Years while he was an Employee, if employed less than three years)
that produces the highest average.
Limitation Year means the consecutive 12-month period ending on the last
day of each Plan Year, including corresponding consecutive 12-month periods
before January 1, 1990. If the Limitation Year is other than the calendar year,
execution of this Plan (or any amendment to this Plan changing the Limitation
Year) constitutes the Employer's adoption of a written resolution electing the
Limitation Year. If the Limitation Year is amended to a different consecutive
12-month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
Maximum Permissible Amount means the maximum Annual Addition that may be
contributed or allocated to a Participant's Account under the Plan for any
Limitation Year. This amount shall not exceed the lesser of:
(1) The Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Compensation for the Limitation Year.
The compensation limitation referred to in (2) shall not apply to any
contribution for medical benefits (within the meaning of Code Section 401(h) or
419A(f)(2)) which is otherwise treated as an Annual Addition under Code Section
415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different consecutive 12-month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:
Number of months in the short Limitation Year
12
Projected Annual Benefit means the annual retirement benefit (adjusted to
an actuarially equivalent straight life annuity if such benefit is expressed in
a form other than a straight life annuity or qualified joint and survivor
annuity) to which the Participant would be entitled under the terms of the plan
assuming:
(1) The Participant will continue employment until normal retirement age
under the plan (or current age, if later), and
(2) the Participant's Compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
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(b) If the Participant does not participate in, and has never
participated in, another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in Code Section
419(e), maintained by the Employer, or an individual medical
account, as defined in Code Section 415(l)(2), maintained by the
Employer, or a simplified employee pension, as defined in Code
Section 408(k), maintained by the Employer, which provides an
Annual Addition, the amount of Annual Additions which may be
credited to the Participant's Account for any Limitation Year
shall not exceed the lesser of the Maximum Permissible Amount or
any other limitation contained in this Plan. If the Employer
Contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated shall be reduced so that the
Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
(c) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable
estimation of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants similarly
situated.
(d) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(e) If a reasonable error in estimating a Participant's Compensation
for the Limitation Year, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any individual under
the limits of Code Section 415, or under other facts and
circumstances allowed by the Internal Revenue Service, there is
an Excess Amount, the excess will be disposed of as follows:
(1) Any Elective Deferral Contributions that are not the basis for
Matching Contributions (plus attributable earnings), to the extent
they would reduce the Excess Amount, will be distributed to the
Participant.
(2) If after the application of (1) above an Excess Amount still exists,
any Elective Deferral Contributions that are the basis for Matching
Contributions (plus attributable earnings), to the extent they would
reduce the Excess Amount, will be distributed to the Participant.
Concurrently with the distribution of such Elective Deferral
Contributions, any Matching Contributions which relate to any Elective
Deferral Contributions distributed in the preceding sentence, to the
extent such
-34-
application would reduce the Excess Amount, will be applied as
provided in (3) or (4) below:
(3) If after the application of (2) above an Excess Amount still exists,
and the Participant is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the Participant's Account will
be used to reduce Employer Contributions for such Participant in the
next Limitation Year, and each succeeding Limitation Year if
necessary.
(4) If after the application of (2) above an Excess Amount still exists,
and the Participant is not covered by the Plan at the end of the
Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future Employer Contributions for all remaining Participants in the
next Limitation Year, and each succeeding Limitation Year if
necessary.
(5) If a suspense account is in existence at any time during a Limitation
Year pursuant to this (e), it will participate in the allocation of
investment gains or losses. If a suspense account is in existence at
any time during a particular Limitation Year, all amounts in the
suspense account must be allocated and reallocated to Participant's
Accounts before any Employer Contributions may be made to the Plan for
that Limitation Year. Excess Amounts held in a suspense account may
not be distributed to Participants or former Participants.
(f) This (f) applies if, in addition to this Plan, the Participant is
covered under another qualified defined contribution plan
maintained by the Employer, a welfare benefit fund maintained by
the Employer, an individual medical account maintained by the
Employer, or a simplified employee pension maintained by the
Employer which provides an Annual Addition during any Limitation
Year. The aggregate Annual Additions under all such qualified
defined contribution plans, welfare benefit funds, individual
medical accounts, and simplified employee pensions for the
Limitation Year will not exceed the Maximum Permissible Amount.
Any reduction necessary shall be made first to the profit sharing
plans, then to all other such qualified defined contribution
plans and welfare benefit funds, individual medical accounts, and
simplified employee pensions and, if necessary, by reducing first
those that were most recently allocated. Simplified employee
pensions shall be deemed to be allocated first, followed by
welfare benefit funds and individual medical accounts. However,
elective deferral contributions shall be the last contributions
reduced before the simplified employee pension, welfare benefit
fund, or individual medical account is reduced.
(g) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan, the
sum of the
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Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation
Year. The Projected Annual Benefit shall be limited first. If the
Participant's annual benefit(s) equal his Projected Annual
Benefit, as limited, then Annual Additions to the defined
contribution plan(s) shall be limited to the extent needed to
reduce the sum to 1.0 in the same manner in which the Annual
Additions are limited to meet the Maximum Permissible Amount.
This subparagraph shall cease to apply effective as of the first
Limitation Year beginning on or after January 1, 2000.
SECTION 3.05--EXCESS AMOUNTS.
(a) Definitions. For the purposes of this section, the following
terms are defined:
ACP means the average (expressed as a percentage) of the Contribution
Percentages of the Eligible Participants in a group.
ADP means the average (expressed as a percentage) of the Deferral
Percentages of the Eligible Participants in a group.
Aggregate Limit means the greater of:
(1) The sum of:
(i) 125 percent of the greater of the ADP of the Nonhighly
Compensated Employees for the prior Plan Year or the ACP of the
Nonhighly Compensated Employees under the plan subject to Code
Section 401(m) for the Plan Year beginning with or within the
prior Plan Year of the cash or deferred arrangement, and
(ii) the lesser of 200 percent or 2 percent plus the lesser of such
ADP or ACP.
(2) The sum of:
(i) 125 percent of the lesser of the ADP of the Nonhighly Compensated
Employees for the prior Plan Year or the ACP of the Nonhighly
Compensated Employees under the plan subject to Code Section
401(m) for the Plan Year beginning with or within the prior Plan
Year of the cash or deferred arrangement, and
(ii) the lesser of 200 percent or 2 percent plus the greater of such
ADP or ACP.
If the Employer has elected to use the current testing method, then, in
calculating the Aggregate Limit for a particular Plan Year, the Nonhighly
Compensated Employees' ADP and
-36-
ACP for that Plan Year, instead of the prior Plan Year, is used.
Contribution Percentage means the ratio (expressed as a percentage) of the
Eligible Participant's Contribution Percentage Amounts to the Eligible
Participant's Compensation for the Plan Year (whether or not the Eligible
Participant was an Eligible Participant for the entire Plan Year). In
modification of the foregoing, Compensation shall be limited to the Compensation
received while an Eligible Participant. For an Eligible Participant for whom
such Contribution Percentage Amounts for the Plan Year are zero, the percentage
is zero.
Contribution Percentage Amounts means the sum of the Participant
Contributions and Matching Contributions (that are not Qualified Matching
Contributions taken into account for purposes of the ADP Test) made under the
Plan on behalf of the Eligible Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions that are forfeited
either to correct Excess Aggregate Contributions or because the Contributions to
which they relate are Excess Elective Deferrals, Excess Contributions, or Excess
Aggregate Contributions. Under such rules as the Secretary of the Treasury shall
prescribe, in determining the Contribution Percentage the Employer may elect to
include Qualified Nonelective Contributions under this Plan which were not used
in computing the Deferral Percentage. The Employer may also elect to use
Elective Deferral Contributions in computing the Contribution Percentage so long
as the ADP Test is met before the Elective Deferral Contributions are used in
the ACP Test and continues to be met following the exclusion of those Elective
Deferral Contributions that are used to meet the ACP Test.
Deferral Percentage means the ratio (expressed as a percentage) of Elective
Deferral Contributions under this Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's Compensation for the Plan Year
(whether or not the Eligible Participant was an Eligible Participant for the
entire Plan Year). In modification of the foregoing, Compensation shall be
limited to the Compensation received while an Eligible Participant. The Elective
Deferral Contributions used to determine the Deferral Percentage shall include
Excess Elective Deferrals (other than Excess Elective Deferrals of Nonhighly
Compensated Employees that arise solely from Elective Deferral Contributions
made under this Plan or any other plans of the Employer or a Controlled Group
member), but shall exclude Elective Deferral Contributions that are used in
computing the Contribution Percentage (provided the ADP Test is satisfied both
with and without exclusion of these Elective Deferral Contributions). Under such
rules as the Secretary of the Treasury shall prescribe, the Employer may elect
to include Qualified Nonelective Contributions and Qualified Matching
Contributions under this Plan in computing the Deferral Percentage. For an
Eligible Participant for whom such contributions on his behalf for the Plan Year
are zero, the percentage is zero.
Elective Deferral Contributions means any employer contributions made to a
plan at the election of a participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction agreement or other
deferral mechanism. With respect to any taxable year, a participant's Elective
Deferral Contributions are the sum of all employer contributions made on behalf
of such participant pursuant to an election to defer under any qualified cash or
deferred arrangement described in Code Section 401(k), any salary reduction
simplified employee pension
-37-
plan described in Code Section 408(k)(6), any SIMPLE IRA plan described in Code
Section 408(p), any eligible deferred compensation plan under Code Section 457,
any plan described under Code Section 501(c)(18), and any employer contributions
made on behalf of a participant for the purchase of an annuity contract under
Code Section 403(b) pursuant to a salary reduction agreement. Elective Deferral
Contributions shall not include any deferrals properly distributed as excess
annual additions.
Eligible Participant means, for purposes of determining the Deferral
Percentage, any Employee who is otherwise entitled to make Elective Deferral
Contributions under the terms of the Plan for the Plan Year. Eligible
Participant means, for purposes of determining the Contribution Percentage, any
Employee who is eligible (i) to make a Participant Contribution or an Elective
Deferral Contribution (if the Employer takes such contributions into account in
the calculation of the Contribution Percentage), or (ii) to receive a Matching
Contribution (including forfeitures) or a Qualified Matching Contribution. If a
Participant Contribution is required as a condition of participation in the
Plan, any Employee who would be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible Participant on behalf of
whom no Participant Contributions are made.
Excess Aggregate Contributions means, with respect to any Plan Year, the
excess of:
(1) The aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made
on behalf of Highly Compensated Employees for such Plan Year, over
(2) The maximum Contribution Percentage Amounts permitted by the ACP Test
(determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
Excess Contributions means, with respect to any Plan Year, the excess of:
(1) The aggregate amount of employer contributions actually taken into
account in computing the Deferral Percentage of Highly Compensated
Employees for such Plan Year, over
(2) The maximum amount of such contributions permitted by the ADP Test
(determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in the order of the Deferral Percentages,
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals.
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Excess Elective Deferrals means those Elective Deferral Contributions that
are includible in a Participant's gross income under Code Section 402(g) to the
extent such Participant's Elective Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section. Excess Elective Deferrals
shall be treated as Annual Additions, as defined in the CONTRIBUTION LIMITATION
SECTION of this article, under the Plan, unless such amounts are distributed no
later than the first April 15 following the close of the Participant's taxable
year.
Matching Contributions means employer contributions made to this or any
other defined contribution plan, or to a contract described in Code Section
403(b), on behalf of a participant on account of a Participant Contribution made
by such participant, or on account of a participant's Elective Deferral
Contributions, under a plan maintained by the Employer or a Controlled Group
member.
Participant Contributions means contributions made to the plan by or on
behalf of a participant that are included in the participant's gross income in
the year in which made and that are maintained under a separate account to which
the earnings and losses are allocated.
Qualified Matching Contributions means Matching Contributions which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k) when made.
Qualified Nonelective Contributions means any employer contributions (other
than Matching Contributions) which an employee may not elect to have paid to him
in cash instead of being contributed to the plan and which are subject to the
distribution and nonforfeitability requirements under Code Section 401(k) when
made.
(b) Excess Elective Deferrals. A Participant may assign to this Plan
any Excess Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator in writing on or
before the first following March 1 of the amount of the Excess
Elective Deferrals to be assigned to the Plan. A Participant is
deemed to notify the Plan Administrator of any Excess Elective
Deferrals that arise by taking into account only those Elective
Deferral Contributions made to this Plan and any other plan of
the Employer or a Controlled Group member. The Participant's
claim for Excess Elective Deferrals shall be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Elective Deferrals will exceed the limit
imposed on the Participant by Code Section 402(g) for the year in
which the deferral occurred. The Excess Elective Deferrals
assigned to this Plan cannot exceed the Elective Deferral
Contributions allocated under this Plan for such taxable year.
Notwithstanding any other provisions of the Plan, Elective
Deferral Contributions in an amount equal to the Excess Elective
Deferrals assigned to this Plan, plus any income and minus any
loss allocable thereto, shall be distributed no later than April
15 to any Participant to whose Account Excess Elective Deferrals
were assigned for the preceding year and who claims Excess
Elective Deferrals for such taxable year.
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The Excess Elective Deferrals shall be adjusted for income or loss.
The income or loss allocable to such Excess Elective Deferrals shall
be equal to the income or loss allocable to the Participant's Elective
Deferral Contributions for the taxable year in which the excess
occurred multiplied by a fraction. The numerator of the fraction is
the Excess Elective Deferrals. The denominator of the fraction is the
closing balance without regard to any income or loss occurring during
such taxable year (as of the end of such taxable year) of the
Participant's Account resulting from Elective Deferral Contributions.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Elective Deferrals, plus
any income and minus any loss allocable thereto, shall be forfeited.
(c) ADP Test. As of the end of each Plan Year after Excess Elective
Deferrals have been determined, the Plan must satisfy the ADP Test.
The ADP Test shall be satisfied using the prior year testing method,
unless the Employer has elected to use the current year testing
method.
(1) Prior Year Testing Method. The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for each Plan
Year and the prior year's ADP for Eligible Participants who were
Nonhighly Compensated Employees for the prior Plan Year must
satisfy one of the following tests:
(i) The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the prior year's ADP for Eligible Participants who
were Nonhighly Compensated Employees for the prior Plan
Year multiplied by 1.25; or
(ii) The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:
A. shall not exceed the prior year's ADP for Eligible
Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 2, and
B. the difference between such ADPs is not more than 2.
If this is not a successor plan, for the first Plan Year the Plan
permits any Participant to make Elective Deferral Contributions,
for purposes of the foregoing tests, the prior year's Nonhighly
Compensated Employees' ADP shall be 3 percent, unless the
Employer has elected to use the Plan Year's ADP for these
Eligible Participants.
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(2) Current Year Testing Method. The ADP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for each Plan
Year and the ADP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year must satisfy one of the
following tests:
(i) The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the ADP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25;
or
(ii) The ADP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:
A. shall not exceed the ADP for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and
B. the difference between such ADP's is not more than 2.
If the Employer has elected to use the current year testing method,
that election cannot be changed unless (i) the Plan has been using the
current year testing method for the preceding five Plan Years, or if
less, the number of Plan Years the Plan has been in existence; or (ii)
the Plan otherwise meets one of the conditions specified in Internal
Revenue Service Notice 98-1 (or superseding guidance) for changing
from the current year testing method.
A Participant is a Highly Compensated Employee for a particular Plan
Year if he meets the definition of a Highly Compensated Employee in
effect for that Plan Year. Similarly, a Participant is a Nonhighly
Compensated Employee for a particular Plan Year if he does not meet
the definition of a Highly Compensated Employee in effect for that
Plan Year.
The Deferral Percentage for any Eligible Participant who is a Highly
Compensated Employee for the Plan Year and who is eligible to have
Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if treated
as Elective Deferral Contributions for purposes of the ADP Test)
allocated to his account under two or more arrangements described in
Code Section 401(k) that are maintained by the Employer or a
Controlled Group member shall be determined as if such Elective
Deferral Contributions (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both) were made
under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have
different plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. The foregoing notwithstanding, certain plans shall be
treated as separate if mandatorily
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disaggregated under the regulations of Code Section 401(k).
In the event this Plan satisfies the requirements of Code Section
401(k), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then this section
shall be applied by determining the Deferral Percentage of Employees
as if all such plans were a single plan. Any adjustments to the
Nonhighly Compensated Employee ADP for the prior year shall be made in
accordance with Internal Revenue Service Notice 98-1 (or superseding
guidance), unless the Employer has elected to use the current year
testing method. Plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same plan year and use the same
testing method for the ADP Test.
For purposes of the ADP Test, Elective Deferral Contributions,
Qualified Nonelective Contributions, and Qualified Matching
Contributions must be made before the end of the 12-month period
immediately following the Plan Year to which the contributions relate.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP Test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
If the Plan Administrator should determine during the Plan Year that
the ADP Test is not being met, the Plan Administrator may limit the
amount of future Elective Deferral Contributions of the Highly
Compensated Employees.
Notwithstanding any other provisions of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of each Plan Year to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year. Excess Contributions are
allocated to the Highly Compensated Employees with the largest amounts
of employer contributions taken into account in calculating the ADP
Test for the year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such employer
contributions and continuing in descending order until all of the
Excess Contributions have been allocated. For purposes of the
preceding sentence, the "largest amount" is determined after
distribution of any Excess Contributions. If such excess amounts are
distributed more than 2 1/2 months after the last day of the Plan Year
in which such excess amounts arose, a 10 percent excise tax shall be
imposed on the employer maintaining the plan with respect to such
amounts.
Excess Contributions shall be treated as Annual Additions, as defined
in the CONTRIBUTION LIMITATION SECTION of this article.
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The Excess Contributions shall be adjusted for income or loss. The
income or loss allocable to such Excess Contributions allocated to
each Participant shall be equal to the income or loss allocable to the
Participant's Elective Deferral Contributions (and, if applicable,
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) for the Plan Year in which the excess occurred
multiplied by a fraction. The numerator of the fraction is the Excess
Contributions. The denominator of the fraction is the closing balance
without regard to any income or loss occurring during such Plan Year
(as of the end of such Plan Year) of the Participant's Account
resulting from Elective Deferral Contributions (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if such contributions are included in the ADP Test).
Excess Contributions allocated to a Participant shall be distributed
from the Participant's Account resulting from Elective Deferral
Contributions. If such Excess Contributions exceed the balance in the
Participant's Account resulting from Elective Deferral Contributions,
the balance shall be distributed from the Participant's Account
resulting from Qualified Matching Contributions (if applicable) and
Qualified Nonelective Contributions, respectively.
Any Matching Contributions which were based on the Elective Deferral
Contributions which are distributed as Excess Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited.
(d) ACP Test. As of the end of each Plan Year, the Plan must satisfy the
ACP Test. The ACP Test shall be satisfied using the prior year testing
method, unless the Employer has elected to use the current year
testing method.
(1) Prior Year Testing Method. The ACP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for each Plan
Year and the prior year's ACP for Eligible Participants who were
Nonhighly Compensated Employees for the prior Plan Year must
satisfy one of the following tests:
(i) The ACP for the Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the prior year's ACP for Eligible Participants who
were Nonhighly Compensated Employees for the prior Plan
Year multiplied by 1.25; or
(ii) The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:
A. shall not exceed the prior year's ACP for Eligible
Participants who were Nonhighly Compensated Employees
for the prior Plan Year multiplied by 2, and
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B. the difference between such ACPs is not more than 2.
If this is not a successor plan, for the first Plan Year the Plan
permits any Participant to make Participant Contributions,
provides for Matching Contributions, or both, for purposes of the
foregoing tests, the prior year's Nonhighly Compensated
Employees' ACP shall be 3 percent, unless the Employer has
elected to use the Plan Year's ACP for these Eligible
Participants.
(2) Current Year Testing Method. The ACP for a Plan Year for Eligible
Participants who are Highly Compensated Employees for each Plan
Year and the ACP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year must satisfy one of the
following tests:
(i) The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year shall not
exceed the ACP for Eligible Participants who are Nonhighly
Compensated Employees for the Plan Year multiplied by 1.25;
or
(ii) The ACP for a Plan Year for Eligible Participants who are
Highly Compensated Employees for the Plan Year:
A. shall not exceed the ACP for Eligible Participants who
are Nonhighly Compensated Employees for the Plan Year
multiplied by 2, and
B. the difference between such ACPs is not more than 2.
If the Employer has elected to use the current year testing method,
that election cannot be changed unless (i) the Plan has been using the
current year testing method for the preceding five Plan Years, or if
less, the number of Plan Years the Plan has been in existence; or (ii)
the Plan otherwise meets one of the conditions specified in Internal
Revenue Service Notice 98-1 (or superseding guidance) for changing
from the current year testing method.
A Participant is a Highly Compensated Employee for a particular Plan
Year if he meets the definition of a Highly Compensated Employee in
effect for that Plan Year. Similarly, a Participant is a Nonhighly
Compensated Employee for a particular Plan Year if he does not meet
the definition of a Highly Compensated Employee in effect for that
Plan Year.
Multiple Use. If one or more Highly Compensated Employees participate
in both a cash or deferred arrangement and a plan subject to the ACP
Test maintained by the Employer or a Controlled Group member, and the
sum of the ADP and ACP of those Highly Compensated Employees subject
to either or both tests exceeds the
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Aggregate Limit, then the Contribution Percentage of those Highly
Compensated Employees who also participate in a cash or deferred
arrangement will be reduced in the manner described below for
allocating Excess Aggregate Contributions so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet the
ADP Test and ACP Test and are deemed to be the maximum permitted under
such tests for the Plan Year. Multiple use does not occur if either
the ADP or ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP, respectively, of the Nonhighly
Compensated Employees.
The Contribution Percentage for any Eligible Participant who is a
Highly Compensated Employee for the Plan Year and who is eligible to
have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code Section 401(a) or arrangements
described in Code Section 401(k) that are maintained by the Employer
or a Controlled Group member shall be determined as if the total of
such Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. The foregoing
notwithstanding, certain plans shall be treated as separate if
mandatorily disaggregated under the regulations of Code Section
401(m).
In the event this Plan satisfies the requirements of Code Section
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then this section
shall be applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan. Any adjustments to
the Nonhighly Compensated Employee ACP for the prior year shall be
made in accordance with Internal Revenue Service Notice 98-1 (or
superseding guidance), unless the Employer has elected to use the
current year testing method. Plans may be aggregated in order to
satisfy Code Section 401(m) only if they have the same plan year and
use the same testing method for the ACP Test.
For purposes of the ACP Test, Participant Contributions are considered
to have been made in the Plan Year in which contributed to the Plan.
Matching Contributions and Qualified Nonelective Contributions will be
considered to have been made for a Plan Year if made no later than the
end of the 12-month period beginning on the day after the close of the
Plan Year.
The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP Test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in
such test.
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Notwithstanding any other provisions of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if not vested, or distributed, if vested, no later
than the last day of each Plan Year to Participants to whose Accounts
such Excess Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions are allocated to the Highly
Compensated Employees with the largest Contribution Percentage Amounts
taken into account in calculating the ACP Test for the year in which
the excess arose, beginning with the Highly Compensated Employee with
the largest amount of such Contribution Percentage Amounts and
continuing in descending order until all of the Excess Aggregate
Contributions have been allocated. For purposes of the preceding
sentence, the "largest amount" is determined after distribution of any
Excess Aggregate Contributions. If such Excess Aggregate Contributions
are distributed more than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a 10 percent excise tax shall
be imposed on the employer maintaining the plan with respect to such
amounts.
Excess Aggregate Contributions shall be treated as Annual Additions,
as defined in the CONTRIBUTION LIMITATION SECTION of this article.
The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to such Excess Aggregate
Contributions allocated to each Participant shall be equal to the
income or loss allocable to the Participant's Contribution Percentage
Amounts for the Plan Year in which the excess occurred multiplied by a
fraction. The numerator of the fraction is the Excess Aggregate
Contributions. The denominator of the fraction is the closing balance
without regard to any income or loss occurring during such Plan Year
(as of the end of such Plan Year) of the Participant's Account
resulting from Contribution Percentage Amounts.
Excess Aggregate Contributions allocated to a Participant shall be
distributed from the Participant's Account resulting from Participant
Contributions that are not required as a condition of employment or
participation or for obtaining additional benefits from Employer
Contributions. If such Excess Aggregate Contributions exceed the
balance in the Participant's Account resulting from such Participant's
Contributions, the balance shall be forfeited, if not vested, or
distributed, if vested, on a pro-rata basis from the Participant's
Account resulting from Contribution Percentage Amounts.
(e) Employer Elections. The Employer has not made an election to use the
current year testing method.
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SECTION 3.06--PROHIBITED ALLOCATIONS OF QUALIFYING EMPLOYER SECURITIES
Notwithstanding any contrary provision of the Plan, Qualifying Employer
Securities will not be allocated under the following circumstances.
(a) Sale under Code Section 1042. Qualifying Employer Securities that have
been acquired by the Plan in a sale to which Code Section 1042 applies
shall not be allocated during the non-allocation period directly or
indirectly under the Plan (or any qualified plan of any Employer) to
the Accounts of:
(1) The individual who makes the election under Code Section 1042.
(2) Any individual who is related (within the meaning of Code Section
267(b)) to the individual who makes the election under Code
Section 1042. However, this paragraph shall not apply to lineal
descendents of the individual who makes the election under Code
Section 1042, provided that the aggregate amount allocated to the
benefit of such lineal descendents during the non-allocation
period does not exceed than five percent (5%) of the Qualifying
Employer Securities (or amounts allocated in lieu thereof) held
by the Plan which are attributable to a sale to the Plan by any
person related to such descendents (within the meaning of Code
Section 267(c)(4)) in a transaction subject to Code Section 1042.
The "non-allocation period" is the period for this purpose beginning on the
date of the sale of the Qualifying Employer Securities to the Plan and ending on
the later of the date which is ten (10) years after the date of sale or the date
of the allocation attributable to the final payment of an Exempt Loan incurred
in connection with such sale to the Plan.
Further, notwithstanding any contrary provision of the Plan, Qualifying
Employer Securities that have been acquired by the Plan in a sale to which Code
Section 1042 applies shall not be allocated, during or after the non-allocation
period, directly or indirectly under the Plan (or any qualified plan of any
Employer) to the Account of any individual who owns (after application of the
aggregation rules of Code Section 318(a) applied without regard to the employee
trust exception in Code Section 318(a)(2)(B)(i)) more than twenty-five percent
(25%) of any class of outstanding stock of any Employer, or the total value of
any class of outstanding stock of the Employer.
(b) S-Corporation Shareholders. For Plan Years beginning after December
31, 2004, if the Plan holds Qualifying Employer Securities of an S
Corporation, no allocations of such Qualifying Employer Securities
shall be made to disqualified persons during any nonallocation year.
The terms "disqualified person" and "nonallocation year" shall have
the meaning set forth under Code Section 409(p).
-47-
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
SECTION 4.01--INVESTMENT AND TIMING OF CONTRIBUTIONS.
The handling of Contributions is governed by the provisions of the Trust
Agreement, the Annuity Contract, and any other funding arrangement in which the
Plan Fund is or may be held or invested. To the extent permitted by the Trust
Agreement, Annuity Contract, or other funding arrangement, the parties named
below shall direct the Contributions to the guaranteed benefit policy portion of
the Annuity Contract, any of the investment options available under the Annuity
Contract, or any of the investment vehicles available under the Trust Agreement
and may request the transfer of amounts resulting from those Contributions
between such investment options and investment vehicles or the transfer of
amounts between the guaranteed benefit policy portion of the Annuity Contract
and such investment options and investment vehicles.
The Plan, other than the ESOP Matching Contribution Account and the ESOP
Non-Matching Contribution Account, is intended to qualify under ERISA Section
404(c). Accordingly, a Participant or Beneficiary (following the death of the
Participant) generally shall be allowed to direct the investment of his/her
Contributions (other than his/her ESOP Matching and Non-Matching Contributions),
and a Participant, Beneficiary or Alternate Payee generally shall be allowed to
direct the investment of his/her Account (other than his/her ESOP Matching and
Non-Matching Contribution Accounts) among the guaranteed benefit policy portion
of the Annuity Contract, any of the investment options available under the
Annuity Contract, or any of the investment vehicles available under the Trust
Agreement excluding the Qualifying Employer Securities Fund. Any investment
direction may be given in such percentage or dollar increments, in such manner
and in accordance with such other rules as may be prescribed for this purpose by
the Plan Administrator (including by means of a voice response or other
electronic system under circumstances so authorized by the Employer). Investment
directions will be processed as soon as administratively practicable after
proper investment directions are received from the Participant, Beneficiary or
Alternate Payee. The Plan provides no guarantee that investment directions will
be processed on a daily basis, and provides no guarantee in any respect as to
the processing time of an investment direction. Circumstances may arise from
time to time where investment direction is not available under the Plan (for
example, a "blackout period" may be imposed to facilitate account or fund
transitions). The Plan Administrator further reserves the right to delay any
investment transaction for any legitimate business reason (including, but not
limited to, failure of systems or computer programs, failure of the means of the
transmission of data, force majeure, the failure of a record keeper to timely
receive values or prices, to correct for its errors or omissions or the errors
or omissions of any record keeper or other service provider). With respect to
any investment transaction, the processing date of the transaction will be
considered the applicable Valuation Date for that transaction and will be
binding for all purposes of the Plan. All investment directions will be complete
as to the terms of the investment transaction and will remain in effect until a
new investment direction is filed by the Participant, Beneficiary or Alternate
Payee.
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A Participant, Beneficiary or Alternate Payee may not direct the Trustee or
Insurer to invest the Participant's Account in collectibles. Collectibles mean
any work of art, rug or antique, metal or gem, stamp or coin, alcoholic
beverage, or other tangible personal property specified by the Secretary of the
Treasury. However, for tax years beginning after December 31, 1997, certain
coins and bullion as provided in Code Section 408(m)(3) shall not be considered
collectibles. To the extent that a Participant who has investment direction
fails to give timely direction, the Primary Employer shall direct the investment
of his Account. If the Primary Employer has investment direction, such Account
shall be invested ratably in the guaranteed benefit policy portion of the
Annuity Contract, the investment options available under the Annuity Contract,
or the investment vehicles available under the Trust Agreement in the same
manner as the Accounts of all other Participants who do not direct their
investments. The Primary Employer shall have investment direction for amounts
which have not been allocated to Participants. To the extent an investment is no
longer available, the Primary Employer may require that amounts currently held
in such investment be reinvested in other investments.
At least annually, the Named Fiduciary shall review all pertinent Employee
information and Plan data in order to establish the funding policy of the Plan
and to determine appropriate methods of carrying out the Plan's objectives. The
Named Fiduciary shall inform the Trustee and any Investment Manager of the
Plan's short-term and long-term financial needs so the investment policy can be
coordinated with the Plan's financial requirements.
(a) Employer Contributions other than Elective Deferral Contributions,
ESOP Matching Contributions and ESOP Non-Matching Contributions: The
Participant shall direct the investment of Elective Deferral
Contributions and transfer of amounts resulting from those
Contributions.
(b) Elective Deferral Contributions: The Participant shall direct the
investment of Elective Deferral Contributions and transfer of amounts
resulting from those Contributions.
(c) Rollover Contributions: The Participant shall direct the investment of
Rollover Contributions and transfer of amounts resulting from those
Contributions.
(d) ESOP Matching Contributions and ESOP Non-Matching Contributions: These
amounts shall be invested in Qualifying Employer Securities.
However, the Named Fiduciary may delegate to the Investment Manager
investment discretion for Contributions and amounts which are not subject to
Participant direction.
The Employer shall pay to the Insurer or Trustee, as applicable, the
Elective Deferral Contributions for each Plan Year not later than the end of the
12-month period immediately following the Plan Year for which they are deemed to
be paid.
All Contributions are forwarded by the Employer be held under the terms of
the Custodial Agreement, as applicable. Contributions that are accumulated
through payroll deduction shall be
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paid to the Trustee or Insurer, as applicable, by the earlier of (i) the date
the Contributions can reasonably be segregated from the Employer's assets, or
(ii) the 15th business day of the month following the month in which the
Contributions would otherwise have been paid in cash to the Participant.
SECTION 4.02--INVESTMENT IN QUALIFYING EMPLOYER SECURITIES.
(a) ESOP Designation. The portion of the Plan that consists of the ESOP
Matching Contribution Accounts, the ESOP Non-Matching Contribution
Accounts and the Unallocated Reserve is an employee stock ownership
plan (within the meaning of Code Section 4975(e)(7)) and is designed
to invest primarily in Qualifying Employer Securities. All shares of
Qualifying Employer Securities held under the Plan will be held in the
Trust Fund in the name of the Trustee or the nominee of the Trustee.
(b) Diversification of Employer Stock Investments into Other Investment
Options. Except as provided in this subsection and subsection (c), a
Participant may not direct the investment of his or her ESOP Matching
Contribution Account or ESOP Non-Matching Contribution Account.
(1) Diversification Election: Each Participant, Beneficiary and
Alternate Payee may make an election at any time during the Plan
Year to direct the Trustee in writing as to the investment of 33
and 1/3 percent of the number of shares of Qualifying Employer
Securities credited to his/her ESOP Matching and ESOP
Non-Matching Accounts as of the last day of the previous Plan
Year. If the Participant, Beneficiary or Alternate Payee elects
to diversify less than the maximum number of shares of Qualifying
Employer Securities eligible to diversified under this paragraph,
the Participant, Beneficiary or Alternate Payee may make a second
election during the Plan Year to diversify some or all of the
remaining number of shares of Qualifying Employer Securities
eligible for diversification under this paragraph.
(2) Procedures: The elections under this section must be made in such
manner and in accordance with such rules as may be prescribed for
this purpose by the Employer. Any amounts in the ESOP Matching
and ESOP Non-Matching Account with respect to which a
Participant, Beneficiary or Alternate Payee elects to direct
investment pursuant to this Section shall be transferred to a
Diversification Account and invested as the Participant,
Beneficiary or Alternate Payee directs pursuant to Section 4.01.
(c) Statutory Diversification. Each Qualified Account Holder shall be
eligible to make an additional diversification election with respect
to the Qualifying
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Employer Securities
(1) Diversification Election: Each Qualified Account Holder may make
an election within ninety (90) days after the close of each Plan
Year during the Qualified Election Period to direct the Trustee
in writing as to the investment of 25 percent of the number of
shares of Qualifying Employer Securities that have ever been
credited to his or her ESOP Matching and ESOP Non-Matching
Accounts, reduced by the number of shares of Qualifying Employer
Securities that have previously been diversified pursuant to
either subsection (b) or this subsection (c).
(2) Final Election: For the last Plan Year in the Qualified Election
Period, 50 percent shall be substituted for 25 percent in
paragraph (1) above.
(3) Procedures: The elections under this section must be made in such
manner and in accordance with such rules as may be prescribed for
this purpose by the Employer. If the Qualified Account Holder
elects to direct the Trustee as to the investment of his ESOP
Matching and ESOP Non-Matching Accounts, such direction shall be
effective no later than 180 days after the close of the Plan Year
to which such direction applies. Any amounts in the ESOP Matching
and ESOP Non-Matching Account with respect to which a Qualified
Account Holder elects to direct investment pursuant to this
Section shall be transferred to a Diversification Account and
invested as the Qualified Account Holder directs pursuant to
Section 4.01.
(4) Definition of Qualified Account Holder: For purposes of this
section, "Qualified Account Holder" means a Participant or former
Participant who on the last day of the Plan Year has completed at
least ten (10) years of participation in the Plan and has
attained age 55, or the Beneficiary or Alternate Payee with
respect to such Participant or former Participant.
(5) Definition of Qualified Election Period: For purposes of this
section, "Qualified Election Period means the six Plan Year
period beginning with the Plan Year in which the Participant
first becomes a Qualified Participant.
(6) Special Distribution Rule for ESOP Non-Matching Account: To the
extent that the diversification election provided under this
subsection (c) (without taking into account amounts previously
diversified under subsection (b)) allows for the diversification
of Qualifying Employer Securities allocated to the ESOP
Non-Matching Account
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of the Qualified Account holder as of April 30, 2003, the
Qualified Account Holder may elect to receive a lump sum
distribution of those Qualifying Employer Securities in lieu of
having those Qualifying Employer Securities transferred to a
Diversification Account.
(d) Dividends. For purposes of determining dividends, shares of Qualifying
Employer Securities shall be deemed to be credited to the ESOP
Matching or Non-Matching Contribution Account of a Participant,
Beneficiary or Alternate Payee as of the record date of a dividend if
they are credited to his/her ESOP Matching or Non-Matching
Contribution Account as of the close of the day prior to the ex-date
of such dividend (or, if the ex-date is after the record date, as of
the close of the day prior to the record date).
(1) Stock Dividend. In the event of any stock dividend or any stock
split, such dividend or split shall be credited to the Accounts
based on the number of shares of Qualifying Employer Securities
credited to each Account as of the payable date of such dividend
or split.
(2) Cash Dividend. As determined by the Employer, cash dividends paid
on shares of Qualifying Employer Securities credited to an ESOP
Matching or Non-Matching Contribution Account of a Participant,
Beneficiary or Alternate Payee as of the record date of such
dividend will be either (i) applied to repay an Exempt Loan then
outstanding (but only if such Qualifying Employer Security is
attributable to such Exempt Loan); (ii) made subject to the
election procedure described in paragraph (3) below; or (iii)
retained in the Trust and treated as net income of the Trust. The
Employer shall not direct that dividends paid on shares of
Qualifying Employer Securities held in the ESOP Matching or
Non-Matching Contribution Accounts be applied to repay an Exempt
Loan, unless the shares of Qualifying Employer Securities
released from the Unallocated Reserve will have a value at least
sufficient to allow for the full allocation required in step one
under the allocation of ESOP Non-Matching Contributions
provisions of the ALLOCATIONS SECTION of Article 3 (the Employer
may make ESOP Non-Matching Contributions necessary to allow for
such full allocation).
(3) Cash Dividend Election. If the Employer elects, cash dividends
paid on shares of Qualifying Employer Securities credited to an
ESOP Matching or Non-Matching Account of a Participant,
Beneficiary or Alternate Payee as of the record date of such
dividend will be:
(A) Paid to the Participant, Beneficiary or Alternate Payee if
so elected under the procedure outlined below; or
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(B) Otherwise, added to the balance of his/her Account as soon
as administratively practicable after such dividends are
paid into the Trust Fund.
A Participant, Beneficiary or Alternate Payee may elect to have cash
dividends on shares of Qualifying Employer Securities credited to
his/her ESOP Matching and ESOP Non-Matching Accounts either paid to
him/her in cash or added to the balance of his/her Account and
reinvested in Qualifying Employer Securities. Cash dividends that the
Participant, Beneficiary or Alternate Payee elects to receive in cash
will be paid on or as soon as administratively practicable following
the payable date of such dividend. Cash dividends that the
Participant, Beneficiary or Alternate Payee elects to have reinvested
in Qualifying Employer Securities will be credited to a separate
source account that reflects only such cash dividends, and shall be
reinvested in additional shares of Qualifying Employer Securities on
or as soon as administratively practicable following the payable date
of such dividend.
Shares of Qualifying Employer Securities shall be deemed to be
credited to the ESOP Matching or ESOP Non-Matching Account of a
Participant, Beneficiary or Alternate Payee as of the record date of a
dividend if they are credited to his/her ESOP Matching or ESOP
Non-Matching Account as of the close of the day prior to the ex-date
of such dividend (or, if the ex-date is after the record date, as of
the close of the day prior to the record date).
An election hereunder must be made in such manner and in accordance
with such rules as may be prescribed for this purpose by the Plan
Administrator (including by means of a voice response or other
electronic system under circumstances so authorized by the Plan
Administrator). In the absence of an affirmative election received by
the deadline established for this purpose by the Plan Administrator
(which shall be no less than thirty (30) days after notice of the
dividend election is provided), a Participant, Beneficiary or
Alternate Payee will be deemed to have elected to have cash dividends
added to his/her Account and reinvested in Qualifying Employer
Securities. To the extent so prescribed by the Plan Administrator, an
election hereunder will be "evergreen" - that is, it will continue to
apply until changed by the Participant, Beneficiary or Alternate
Payee. Under the rules prescribed by the Plan Administrator, a
Participant, Beneficiary or Alternate Payee shall be allowed to revise
his/her election no less than once a year, and if there is a change in
the terms of the Plan governing the manner in which dividends are paid
or distributed, a Participant, Beneficiary or Alternate Payee shall be
allowed a reasonable opportunity to make a new election.
The Account of a Participant, Beneficiary or Alternate Payee may be
charged with the distribution costs (for example, the actual
check-writing
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fee) of any distribution made at his/her election under this Section.
(e) Authorization for Exempt Loan. The Employer may direct that the Plan
engage in an Exempt Loan that satisfies the following requirements:
(1) Lender. The Exempt Loan may be made by the Employer or any lender
acceptable to the Employer, and may be made or guaranteed by a
party in interest (as defined in ERISA Section 3(14)) or a
disqualified person (as defined in Code Section 4975).
(2) Use of Loan Proceeds. The Exempt Loan must be used within a
reasonable time after receipt to acquire shares of Qualifying
Employer Securities for the Unallocated Reserve or to repay a
prior Exempt Loan (or for any combination of the foregoing
purposes).
(3) No Recourse Against Trust Fund. The Exempt Loan must be without
recourse against the Plan except that:
(i) The Qualifying Employer Securities acquired with the
proceeds of the Exempt Loan may be pledged or otherwise
used to secure repayment of the Exempt Loan, and the
Qualifying Employer Securities acquired with the proceeds
of a prior Exempt Loan which is repaid with the proceeds of
the Exempt Loan may be pledged or otherwise used to secure
repayment of the Exempt Loan, and
(ii) Any ESOP Non-Matching Contributions that are made for the
purpose of satisfying the obligations under the Exempt Loan
(and earnings thereon) may be pledged or otherwise used to
secure repayment of the Exempt Loan, and
(iii) The earnings attributable to shares of Qualifying Employer
Securities acquired with the proceeds of an Exempt Loan may
be used to repay that Exempt Loan or any renewal or
extension thereof, and
(iv) The earnings attributable to unallocated shares of
Qualifying Employer Securities that were acquired with the
proceeds of an Exempt Loan may be pledged or otherwise used
as security for another Exempt Loan.
(4) Term of Loan. The Exempt Loan must provide for principal and
interest to be paid over a specific term, and not payable upon
demand except in the event of default.
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(5) Release of Shares from Unallocated Reserve. The number of shares
released each Plan Year shall equal "A" multiplied by "B" where:
"A" = the number of shares held in the Unallocated Reserve
immediately before the release;
"B" = a fraction, the numerator of which is equal to the
principal and interest paid on the Exempt Loan for the Plan Year
and the denominator of which is equal to the sum of the numerator
and the total principal and interest scheduled to be paid on the
Exempt Loan for all future Plan Years (without consideration of
possible extensions or renewal periods).
If the interest rate under the Exempt Loan is variable, the
amount of interest to be paid in future Plan Years shall be
calculated by using the interest rate in effect on the last day
of the current Plan Year.
If an Exempt Loan is repaid as a result of a refinancing by
another Exempt Loan, such repayment shall not be considered a
repayment under this subsection and the release of shares
thereafter shall be determined by aggregating principal and
interest on the loan and any refinancing of the loan.
(6) Interest Rate. The Exempt Loan must bear interest at a fixed or
variable rate that is not in excess of a reasonable rate of
interest considering all relevant factors (including, but not
limited to, the amount and duration of the loan, the security
given, the guarantees involved, the credit standing of the Plan,
the Employer, and the guarantors, and the generally prevailing
rates of interest).
(7) Default. The Exempt Loan must provide that, in the event of
default, the fair market value of Qualifying Employer Securities
and other assets which can be transferred in satisfaction of the
loan must not exceed the amount of the loan. If the lender is a
party in interest or disqualified person, the loan must provide
for a transfer of Plan assets upon default only upon and to the
extent of the failure of the Plan to satisfy the payment schedule
of the Exempt Loan.
(8) Restrictions. Unless required under Code Section 409(h), no
options, puts, call, rights of first refusal or other
restrictions on alienability will attach to any shares of
Qualifying Employer Securities acquired with the proceeds of an
Exempt Loan and held in the Trust Fund or distributed from the
Plan, whether or not this Plan continues to be an employee stock
ownership plan with the meaning of Code Section 4975(e)(7).
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(f) Valuation of Qualifying Employer Securities. For purposes of
determining the annual valuation of the Plan, and for reporting to
Participants and regulatory authorities, the assets of the Plan shall
be valued at least annually on the Valuation Date which corresponds to
the last day of the Plan Year. The fair market value of Qualifying
Employer Securities shall be determined on such Valuation Date. The
prices of Qualifying Employer Securities as of the date of the
transaction shall apply for purposes of valuing distributions and
other transactions of the Plan to the extent such value is
representative of the fair market value of such securities in the
opinion of the Plan Administrator. The value of a Participant's
Account held in the Qualifying Employer Securities Fund may be
expressed in units.
If the Qualifying Employer Securities are not publicly traded, or if
an extremely thin market exists for such securities so that reasonable
valuation may not be obtained from the market place, then such
securities must be valued at least annually by an independent
appraiser who is not associated with the Employer, the Plan
Administrator, the Trustee, or any person related to any fiduciary
under the Plan. The independent appraiser may be associated with a
person who is merely a contract administrator with respect to the
Plan, but who exercises no discretionary authority and is not a plan
fiduciary.
If there is a public market for Qualifying Employer Securities of the
type held by the Plan, then the Plan Administrator may use as the
value of the securities the price at which such securities trade in
such market. If the Qualifying Employer Securities do not trade on the
relevant date, or if the market is very thin on such date, then the
Plan Administrator may use for the valuation the next preceding
trading day on which the trading prices are representative of the fair
market value of such securities in the opinion of the Plan
Administrator.
(g) Purchases or Sales of Qualifying Employer Securities. The Plan
Administrator may direct the Trustee to sell, resell, or otherwise
dispose of Qualifying Employer Securities to any person, including the
Employer, provided that any such sales to any disqualified person or
party-in-interest, including the Employer, will be made at not less
than the fair market value and no commission will be charged. Any such
sale shall be made in conformance with ERISA Section 408(e). If it is
necessary to purchase Qualifying Employer Securities for the Trust
Fund, such purchase may be on the open market or from the Employer or
any member of the Controlled Group. All purchases of Qualifying
Employer Securities shall be made at a price, or prices, which, in the
judgement of the Plan Administrator, do not exceed the fair market
value of such securities. If shares are purchase from or sold to the
Employer or a member of the Controlled Group, the
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purchase or sale will be made at the price determined under paragraph
(f) above.
In the event that the Trustee acquires Qualifying Employer Securities
by purchase from a "disqualified person" as defined in Code Section
4975(e)(2) or from a "party-in-interest" as defined in ERISA Section
3(14), the terms of such purchase shall contain the provision that in
the event there is a final determination by the Internal Revenue
Service, the Department of Labor, or court of competent jurisdiction
that the fair market value of such securities as of the date of
purchase was less than the purchase price paid by the Trustee, then
the seller shall pay or transfer, as the case may be, to the Trustee
an amount of cash or shares of Qualifying Employer Securities equal in
value to the difference between the purchase price and such fair
market value for all such shares. In the event that cash or shares of
Qualifying Employer Securities are paid or transferred to the Trustee
under this provision, such securities shall be valued at their fair
market value as of the date of such purchase, and interest at a
reasonable rate from the date of purchase to the date of payment or
transfer shall be paid by the seller on the amount of cash paid.
(h) Compliance with Securities Laws. The Employer is responsible for
compliance with any applicable Federal or state securities law with
respect to all aspects of the Plan except for the Trustee's obligation
to report its ownership of Qualifying Employer Securities. If the
Qualifying Employer Securities or interest in this Plan are required
to be registered in order to permit investment in the Qualifying
Employer Securities Fund as provided in this section, then such
investment will not be effective until the later of the effective date
of the Plan or the date such registration or qualification is
effective. The Employer, at its own expense, will take or cause to be
taken any and all such actions as may be necessary or appropriate to
effect such registration or qualification. Further, if the Trustee is
directed to dispose of any Qualifying Employer Securities held under
the Plan under circumstances which require registration or
qualification of the securities under applicable Federal or state
securities laws, then the Employer will, at its own expense, take or
cause to be taken any and all such action as may be necessary or
appropriate to effect such registration or qualification. The Employer
is responsible for all compliance requirements under Section 16 of the
Securities Act.
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ARTICLE V
BENEFITS
SECTION 5.01--RETIREMENT BENEFITS.
On a Participant's Retirement Date, his Vested Account shall be distributed
to him according to the distribution of benefits provisions of Article VI and
the provisions of the SMALL AMOUNTS SECTION of Article X.
SECTION 5.02--DEATH BENEFITS.
If a Participant dies before his Annuity Starting Date, his Vested Account
shall be distributed according to the distribution of benefits provisions of
Article VI and the provisions of the SMALL AMOUNTS SECTION of Article X.
SECTION 5.03--VESTED BENEFITS.
If an Inactive Participant's Vested Account is not payable under the SMALL
AMOUNTS SECTION of Article X, he may elect, but is not required, to receive a
distribution of his Vested Account after he ceases to be an Employee. The
Participant's election shall be subject to his spouse's consent as provided in
the ELECTION PROCEDURES SECTION of Article VI. A distribution under this
paragraph shall be a retirement benefit and shall be distributed to the
Participant according to the distribution of benefits provisions of Article VI.
A Participant may not elect to receive a distribution under the provisions
of this section after he again becomes an Employee until he subsequently ceases
to be an Employee and meets the requirements of this section.
If an Inactive Participant does not receive an earlier distribution, upon
his Retirement Date or death, his Vested Account shall be distributed according
to the provisions of the RETIREMENT BENEFITS SECTION or the DEATH BENEFITS
SECTION of Article V.
The Nonvested Account of an Inactive Participant who has ceased to be an
Employee shall remain a part of his Account until it becomes a Forfeiture.
However, if he again becomes an Employee so that his Vesting Percentage can
increase, the Nonvested Account may become a part of his Vested Account.
SECTION 5.04--WHEN BENEFITS START.
(a) Unless otherwise elected, benefits shall begin before the 60th day
following the close of the Plan Year in which the latest date below
occurs:
(1) The date the Participant attains age 65 (or Normal Retirement
Age, if earlier).
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(2) The 10th anniversary of the Participant's Entry Date.
(3) The date the Participant ceases to be an Employee.
Notwithstanding the foregoing, the failure of a Participant and spouse to
consent to a distribution while a benefit is immediately distributable, within
the meaning of the ELECTION PROCEDURES SECTION of Article VI, shall be deemed to
be an election to defer the start of benefits sufficient to satisfy this
section.
The Participant may elect to have his benefits begin after the latest date
for beginning benefits described above, subject to the following provisions of
this section. The Participant shall make the election in writing. Such election
must be made before his Normal Retirement Date or the date he ceases to be an
Employee, if later. The election must describe the form of distribution and the
date benefits will begin. The Participant shall not elect a date for beginning
benefits or a form of distribution that would result in a benefit payable when
he dies which would be more than incidental within the meaning of governmental
regulations.
Benefits shall begin on an earlier date if otherwise provided in the Plan.
For example, the Participant's Retirement Date or Required Beginning Date, as
defined in the DEFINITIONS SECTION of Article VII.
(b) The Participant's Vested Account which results from Elective Deferral
Contributions may not be distributed to a Participant or to his
Beneficiary (or Beneficiaries) in accordance with the Participant's or
Beneficiary's (or Beneficiaries') election, earlier than separation
from service, death, or disability. Such amount may also be
distributed upon:
(1) Termination of the Plan, as permitted in Article VIII.
(2) The disposition by the Employer, if the Employer is a
corporation, to an unrelated corporation of substantially all of
the assets, within the meaning of Code Section 409(d)(2), used in
a trade or business of the Employer if the Employer continues to
maintain the Plan after the disposition, but only with respect to
Employees who continue employment with the corporation acquiring
such assets.
(3) The disposition by the Employer, if the Employer is a
corporation, to an unrelated entity of the Employer's interest in
a subsidiary, within the meaning of Code Section 409(d)(3), if
the Employer continues to maintain the Plan, but only with
respect to Employees who continue employment with such
subsidiary.
(4) The hardship of the Participant as permitted in the WITHDRAWAL
BENEFITS SECTION of this article.
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All distributions that may be made pursuant to one or more of the
foregoing distributable events will be a retirement benefit and shall
be distributed to the Participant according to the distribution of
benefit provisions of Article VI. In addition, distributions that are
triggered by (1), (2) and (3) above must be made in a lump sum. A lump
sum shall include a distribution of an annuity contract.
(c) The Participant's Vested Account which results from ESOP Matching
Contributions and ESOP Non-Matching Contributions are subject to the
following special distribution rights:
(1) After a Participant attains age 62, the Participant, until he or
she retires, has a continuing right to elect to receive all of
his or her Vested ESOP Non-Matching Contribution Account.
(2) Unless the Participant elects in writing to have the Trustee
apply other distribution provisions of the Plan, or unless other
distribution provisions of the Plan require earlier distribution,
the Trustee shall distribute the portion of the Participant's
ESOP Matching and Non-Matching Contribution Accounts attributable
to Qualifying Employer Securities (the "Eligible Portion") no
later that time prescribed below:
(A) If the Participant terminated employment by reason of the
attainment of Normal Retirement Age, death or disability,
the Plan Administrator shall direct the Trustee to
distribute the Eligible Portion not later than one year
after the close of the Plan Year in which that event
occurs.
(B) If the Participant terminates employment for any other
reason, the Plan Administrator shall direct the Trustee to
distribute the Eligible Portion not later than one year
after the close of the Plan Year in which the Participant
terminated employment. If the Participant resumes
employment with an Employer on or before the last day of
the fifth Plan Year following the Plan Year of his
termination of employment, the distribution of this
subparagraph (B) do not apply.
For purposes of this paragraph (2), Qualifying Employer Securities do not
include any Qualifying Employer Securities acquired with the proceeds of an
Exempt Loan until the close of the Plan Year in which the borrower repays the
Exempt Loan in full.
SECTION 5.05--WITHDRAWAL BENEFITS.
A Participant may withdraw any part of his Vested Account which results
from the following Contributions:
Elective Deferral Contributions
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Rollover Contributions
in the event of hardship due to an immediate and heavy financial need.
Withdrawals from the Participant's Account resulting from Elective Deferral
Contributions shall be limited to the amount of the Participant's Elective
Deferral Contributions. Immediate and heavy financial need shall be limited to:
(i) expenses incurred or necessary for medical care, described in Code Section
213(d), of the Participant, the Participant's spouse, or any dependents of the
Participant (as defined in Code Section 152); (ii) purchase (excluding mortgage
payments) of a principal residence for the Participant; (iii) payment of
tuition, related educational fees, and room and board expenses, for the next 12
months of post-secondary education for the Participant, his spouse, children, or
dependents; (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) any other distribution which is deemed by the
Commissioner of Internal Revenue to be made on account of immediate and heavy
financial need as provided in Treasury regulations.
No withdrawal shall be allowed which is in excess of the amount required to
relieve the financial need or if such need can be satisfied from other resources
that are reasonably available to the Participant. The amount of an immediate and
heavy financial need may include any amount necessary to pay any Federal, state,
or local income taxes or penalties reasonably anticipated to result from the
distribution. The Participant's request for a withdrawal shall include his
written statement that the amount requested does not exceed the amount needed to
meet the financial need. The Participant's request for a withdrawal shall
include his written statement that the need cannot be relieved: (i) through
reimbursement or compensation by insurance or otherwise; (ii) by reasonable
liquidation of the Participant's assets, to the extent such liquidation would
not itself cause immediate and heavy financial need; (iii) by cessation of
elective contributions or participant contributions under the Plan; or (iv) by
other distributions or nontaxable (at the time of the loan) loans currently
available from plans maintained by the Employer or any other employer (including
currently available cash dividends on Qualifying Employer Securities), or by
borrowing from commercial sources on reasonable commercial terms.
A request for withdrawal shall be made in such manner and in accordance
with such rules as the Employer will prescribe for this purpose (including by
means of voice response or other electronic means under circumstances the
Employer permits). Withdrawals shall be a retirement benefit and shall be
distributed to the Participant according to the distribution of benefits
provisions of Article VI. A forfeiture shall not occur solely as a result of a
withdrawal.
SECTION 5.06--LOANS TO PARTICIPANTS.
Loans shall be made available to all Participants on a reasonably
equivalent basis. For purposes of this section, and unless otherwise specified,
Participant means any Participant or Beneficiary who is a party-in-interest as
defined in ERISA. Loans shall not be made to Highly Compensated Employees in an
amount greater than the amount made available to other Participants.
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No loans will be made to any shareholder-employee or Owner-employee. For
purposes of this requirement, a shareholder-employee means an employee or
officer of an electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)), on any day
during the taxable year of such corporation, more than 5 percent of the
outstanding stock of the corporation.
A loan to a Participant shall be a Participant-directed investment of his
Account. The loan is a Trust Fund investment but no Account other than the
borrowing Participant's Account shall share in the interest paid on the loan or
bear any expense or loss incurred because of the loan.
Loans shall be made from a Participant's Vested Account attributable to his
Elective Deferral Contributions and Rollover Contributions only.
The number of outstanding loans shall be limited to one. No more than one
loan shall be approved for any Participant in any 12-month period. The minimum
amount of any loan shall be $1,000.
Loans must be adequately secured and bear a reasonable rate of interest.
The amount of the loan shall not exceed the maximum amount that may be
treated as a loan under Code Section 72(p) (rather than a distribution) to the
Participant and shall be equal to the lesser of (a) or (b) below:
(a) $50,000, reduced by the highest outstanding loan balance of loans
during the one-year period ending on the day before the new loan is
made.
(b) The greater of (1) or (2), reduced by (3) below:
(1) One-half of the Participant's Vested Account.
(2) $10,000.
(3) Any outstanding loan balance on the date the new loan is made.
For purposes of this maximum, a Participant's Vested Account does not include
any accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and all qualified employer plans, as defined in Code Section
72(p)(4), of the Employer and any Controlled Group member shall be treated as
one plan.
The foregoing notwithstanding, the amount of such loan shall not exceed 50
percent of the amount of the Participant's Vested Account. For purposes of this
maximum, a Participant's Vested Account does not include any accumulated
deductible employee contributions, as defined in Code Section 72(o)(5)(B). No
collateral other than a portion of the Participant's Vested Account (as limited
above) shall be accepted. The Loan Administrator shall determine if the
collateral is adequate for the amount of the loan requested.
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A Participant must obtain the consent of his spouse, if any, to the use of
the Vested Account as security for the loan. Spousal consent shall be obtained
no earlier than the beginning of the 90-day period that ends on the date on
which the loan to be so secured is made. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by a plan
representative or a notary public. Such consent shall thereafter be binding with
respect to the consenting spouse or any subsequent spouse with respect to that
loan. A new consent shall be required if the Vested Account is used for
collateral upon renegotiation, extension, renewal, or other revision of the
loan. No consent shall be required if subparagraph (d) of the ELECTION
PROCEDURES SECTION of Article VI applies.
If a valid spousal consent has been obtained in accordance with the above,
or spousal consent is not required, then, notwithstanding any other provision of
this Plan, the portion of the Participant's Vested Account used as a security
interest held by the Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the amount of the Vested
Account payable at the time of the death or distribution, but only if the
reduction is used as repayment of the loan. If spousal consent is required and
less than 100 percent of the Participant's Vested Account (determined without
regard to the preceding sentence) is payable to the surviving spouse, then the
Vested Account shall be adjusted by first reducing the Vested Account by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the surviving spouse.
Each loan shall bear a reasonable fixed rate of interest to be determined
by the Loan Administrator. In determining the interest rate, the Loan
Administrator shall take into consideration fixed interest rates currently being
charged by commercial lenders for loans of comparable risk on similar terms and
for similar durations, so that the interest will provide for a return
commensurate with rates currently charged by commercial lenders for loans made
under similar circumstances. The Loan Administrator shall not discriminate among
Participants in the matter of interest rates; but loans granted at different
times may bear different interest rates in accordance with the current
appropriate standards.
The loan shall by its terms require that repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan. The period of
repayment for any loan shall be arrived at by mutual agreement between the Loan
Administrator and the Participant.
The Participant shall make an application for a loan in such manner and in
accordance with such rules as the Employer shall prescribe for this purpose
(including by means of voice response or other electronic means under
circumstances the Employer permits). The application must specify the amount and
duration requested.
Information contained in the application for the loan concerning the
income, liabilities, and assets of the Participant will be evaluated to
determine whether there is a reasonable expectation that the Participant will be
able to satisfy payments on the loan as due. Additionally, the Loan
Administrator will pursue any appropriate further investigations concerning the
creditworthiness and credit history of the Participant to determine whether a
loan should be approved.
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Each loan shall be fully documented in the form of a promissory note signed
by the Participant for the face amount of the loan, together with interest
determined as specified above.
There will be an assignment of collateral to the Plan executed at the time
the loan is made.
In those cases where repayment through payroll deduction is available,
installments are so payable, and a payroll deduction agreement shall be executed
by the Participant at the time the loan is made. Loan repayments that are
accumulated through payroll deduction shall be paid to the Trustee by the
earlier of (i) the date the loan repayments can reasonably be segregated from
the Employer's assets, or (ii) the 15th business day of the month following the
month in which such amounts would otherwise have been paid in cash to the
Participant.
Where payroll deduction is not available, payments in cash are to be timely
made. Any payment that is not by payroll deduction shall be made payable to the
Employer or the Trustee, as specified in the promissory note, and delivered to
the Loan Administrator, including prepayments, service fees and penalties, if
any, and other amounts due under the note. The Loan Administrator shall deposit
such amounts into the Plan as soon as administratively practicable after they
are received, but in no event later than the 15th business day of the month
after they are received.
The promissory note may provide for reasonable late payment penalties and
service fees. Any penalties or service fees shall be applied to all Participants
in a nondiscriminatory manner. If the promissory note so provides, such amounts
may be assessed and collected from the Account of the Participant as part of the
loan balance.
Each loan may be paid prior to maturity, in part or in full, without
penalty or service fee, except as may be set out in the promissory note.
The Plan shall suspend loan payments for a period not exceeding one year
during which an approved unpaid leave of absence occurs other than a military
leave of absence. The Loan Administrator shall provide the Participant a written
explanation of the effect of the suspension of payments upon his loan.
If a Participant separates from service (or takes a leave of absence) from
the Employer because of service in the military and does not receive a
distribution of his Vested Account, the Plan shall suspend loan payments until
the Participant's completion of military service or until the Participant's
fifth anniversary of commencement of military service, if earlier, as permitted
under Code Section 414(u). The Loan Administrator shall provide the Participant
a written explanation of the effect of his military service upon his loan.
If any payment of principal and interest, or any portion thereof, remains
unpaid for more than 90 days after due, the loan shall be in default. For
purposes of Code Section 72(p), the Participant shall then be treated as having
received a deemed distribution regardless of whether or not a distributable
event has occurred.
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Upon default, the Plan has the right to pursue any remedy available by law
to satisfy the amount due, along with accrued interest, including the right to
enforce its claim against the security pledged and execute upon the collateral
as allowed by law. The entire principal balance whether or not otherwise then
due, along with accrued interest, shall become immediately due and payable
without demand or notice, and subject to collection or satisfaction by any
lawful means, including specifically, but not limited to, the right to enforce
the claim against the security pledged and to execute upon the collateral as
allowed by law.
In the event of default, foreclosure on the note and attachment of security
or use of amounts pledged to satisfy the amount then due shall not occur until a
distributable event occurs in accordance with the Plan, and shall not occur to
an extent greater than the amount then available upon any distributable event
which has occurred under the Plan.
All reasonable costs and expenses, including but not limited to attorney's
fees, incurred by the Plan in connection with any default or in any proceeding
to enforce any provision of a promissory note or instrument by which a
promissory note for a Participant loan is secured, shall be assessed and
collected from the Account of the Participant as part of the loan balance.
If payroll deduction is being utilized, in the event that a Participant's
available payroll deduction amounts in any given month are insufficient to
satisfy the total amount due, there will be an increase in the amount taken
subsequently, sufficient to make up the amount that is then due. If any amount
remains past due more than 90 days, the entire principal amount, whether or not
otherwise then due, along with interest then accrued, shall become due and
payable, as above.
If no distributable event has occurred under the Plan at the time that the
Participant's Vested Account would otherwise be used under this provision to pay
any amount due under the outstanding loan, this will not occur until the time,
or in excess of the extent to which, a distributable event occurs under the
Plan. An outstanding loan will become due and payable in full 60 days after a
Participant ceases to be an Employee and a party-in-interest as defined in ERISA
or after complete termination of the Plan.
SECTION 5.07--DISTRIBUTIONS UNDER QUALIFIED DOMESTIC RELATIONS ORDERS.
The Plan specifically permits distributions to an Alternate Payee under a
qualified domestic relations order as defined in Code Section 414(p), at any
time, irrespective of whether the Participant has attained his earliest
retirement age, as defined in Code Section 414(p), under the Plan. A
distribution to an Alternate Payee before the Participant has attained his
earliest retirement age is available only if the order specifies that
distribution shall be made prior to the earliest retirement age or allows the
Alternate Payee to elect a distribution prior to the earliest retirement age.
Nothing in this section shall permit a Participant to receive a
distribution at a time otherwise not permitted under the Plan nor shall it
permit the Alternate Payee to receive a form of payment not permitted under the
Plan.
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The benefit payable to an Alternate Payee shall be subject to the
provisions of the SMALL AMOUNTS SECTION of Article X if the value of the benefit
does not exceed $5,000 ($3,500 for Plan Years beginning before August 6, 1997).
The Plan Administrator shall establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator shall promptly notify the Participant
and the Alternate Payee named in the order, in writing, of the receipt of the
order and the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the domestic relations
order, the Plan Administrator shall determine the qualified status of the order
and shall notify the Participant and each Alternate Payee, in writing, of its
determination. The Plan Administrator shall provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations. The Plan
Administrator may treat as qualified any domestic relations order entered into
before January 1, 1985, irrespective of whether it satisfies all the
requirements described in Code Section 414(p).
If any portion of the Participant's Vested Account is payable during the
period the Plan Administrator is making its determination of the qualified
status of the domestic relations order, a separate accounting shall be made of
the amount payable. If the Plan Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts are
first payable following receipt of the order, the payable amounts shall be
distributed in accordance with the order. If the Plan Administrator does not
make its determination of the qualified status of the order within the 18-month
determination period, the payable amounts shall be distributed in the manner the
Plan would distribute if the order did not exist and the order shall apply
prospectively if the Plan Administrator later determines the order is a
qualified domestic relations order.
If a domestic relations order divides an Account that is invested in the
Qualifying Employer Securities Fund, and a cash dividend on Qualifying Employer
Securities becomes payable during the period the Plan Administrator is making
its determination of the qualified status of the domestic relations order then
the following will apply:
(a) If the division date specified in the order is prior to the ex-date of
such dividend, then so much of the dividend that is attributable to
the Alternate Payee's share of the investment in the Qualifying
Employer Security Fund shall be deemed to be earnings on the Alternate
Payee share. If the Participant has elected to receive the dividend in
cash, the Alternate Payee's portion of the dividend shall be drawn
from the remaining portion of the Account after payment of the
dividend to the Participant.
(b) If the division date specified in the order is on or after the ex-date
of such dividend, then no portion of the dividend shall be attributed
to the Alternate Payee.
The Plan shall make payments or distributions required under this section
by separate benefit checks or other separate distribution to the Alternate
Payee(s).
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ARTICLE VI
DISTRIBUTION OF BENEFITS
SECTION 6.01--AUTOMATIC FORMS OF DISTRIBUTION.
Unless an optional form of benefit is selected pursuant to a qualified
election within the election period (see the ELECTION PROCEDURES SECTION of this
article), the automatic form of benefit payable to or on behalf of a Participant
is determined as follows:
(a) Retirement Benefits. The automatic form of retirement benefit for a
Participant who does not die before his Annuity Starting Date shall
be:
(1) The Qualified Joint and Survivor Annuity for a Participant who
has a spouse.
(2) The Normal Form for a Participant who does not have a spouse.
(b) Death Benefits. The automatic form of death benefit for a Participant
who dies before his Annuity Starting Date shall be:
(1) A Qualified Preretirement Survivor Annuity for a Participant who
has a spouse to whom he has been continuously married throughout
the one-year period ending on the date of his death. The spouse
may elect to start receiving the death benefit on any first day
of the month on or after the Participant dies and by the date the
Participant would have been age 70 1/2. If the spouse dies before
benefits start, the Participant's Vested Account, determined as
of the date of the spouse's death, shall be paid to the spouse's
Beneficiary.
(2) A single-sum payment to the Participant's Beneficiary for a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity.
Before a death benefit will be paid on account of the death of a
Participant who does not have a spouse who is entitled to a
Qualified Preretirement Survivor Annuity, it must be established
to the satisfaction of a plan representative that the Participant
does not have such a spouse.
SECTION 6.02--OPTIONAL FORMS OF DISTRIBUTION.
(a) Retirement Benefits. The optional forms of retirement benefit shall be
the following: (i) a straight life annuity; (ii) single life annuities
with certain periods of 5, 10 or 15 years; (iii) a single life annuity
with installment refund; (iv) survivorship
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life annuities with installment refund and survivorship percentages of
50%, 66 2/3% or 100%; (v) fixed period annuities for any period of
whole months which is not less than 60 and does not exceed the Life
Expectancy, as defined in Article VII, of the Participant where the
Life Expectancy is not recalculated; and (vi) a full flexibility
option. A single sum payment is also available.
The full flexibility option is an optional form of benefit under which
the Participant receives a distribution each calendar year, beginning
with the calendar year in which his Annuity Starting Date occurs. The
Participant may elect the amount to be distributed each year (not less
than $1,000). The amount payable in his first Distribution Calendar
Year, as defined in Article VII, must satisfy the minimum distribution
requirements of Article VII for such year. Distributions for later
Distribution Calendar Years, as defined in Article VII, must satisfy
the minimum distribution requirements of Article VII for such years.
If the Participant's Annuity Starting Date does not occur until his
second Distribution Calendar Year, as defined in Article VII, the
amount payable for such year must satisfy the minimum distribution
requirements of Article VII for both the first and second Distribution
Calendar Years, as defined in Article VII.
If the Plan is amended to eliminate or restrict an optional form of
distribution and the Plan provides a single sum distribution form that
is otherwise identical to the optional form of distribution eliminated
or restricted, the amendment shall not apply to any distribution with
an Annuity Starting Date earlier than the first day of the second Plan
Year following the Plan Year in which the amendment is adopted.
Election of an optional form is subject to the qualified election
provisions of the ELECTION PROCEDURES SECTION of this article and the
distribution requirements of Article VII.
Any annuity contract distributed shall be nontransferable. The terms
of any annuity contract purchased and distributed by the Plan to a
Participant or spouse shall comply with the requirements of this Plan.
(b) Death Benefits. The optional forms of death benefit are a single-sum
payment and any annuity that is an optional form of retirement
benefit. However, the full flexibility option shall not be available
if the Beneficiary is not the spouse of the deceased Participant.
Election of an optional form is subject to the qualified election
provisions of the ELECTION PROCEDURES SECTION of this article and the
distribution requirements of Article VII.
SECTION 6.03--ELECTION PROCEDURES.
The Participant, Beneficiary, or spouse shall make any election under this
section in
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writing. The Plan Administrator may require such individual to complete and sign
any necessary documents as to the provisions to be made. Any election permitted
under (a) and (b) below shall be subject to the qualified election provisions of
(c) below.
(a) Retirement Benefits. A Participant may elect his Beneficiary or
Contingent Annuitant and may elect to have retirement benefits
distributed under any of the optional forms of retirement benefit
available in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this
article.
(b) Death Benefits. A Participant may elect his Beneficiary and may elect
to have death benefits distributed under any of the optional forms of
death benefit available in the OPTIONAL FORMS OF DISTRIBUTION SECTION
of this article.
If the Participant has not elected an optional form of distribution
for the death benefit payable to his Beneficiary, the Beneficiary may,
for his own benefit, elect the form of distribution, in like manner as
a Participant.
The Participant may waive the Qualified Preretirement Survivor Annuity
by naming someone other than his spouse as Beneficiary.
In lieu of the Qualified Preretirement Survivor Annuity described in
the AUTOMATIC FORMS OF DISTRIBUTION SECTION of this article, the
spouse may, for his own benefit, waive the Qualified Preretirement
Survivor Annuity by electing to have the benefit distributed under any
of the optional forms of death benefit available in the OPTIONAL FORMS
OF DISTRIBUTION SECTION of this article.
(c) Qualified Election. The Participant, Beneficiary or spouse may make an
election at any time during the election period. The Participant,
Beneficiary, or spouse may revoke the election made (or make a new
election) at any time and any number of times during the election
period. An election is effective only if it meets the consent
requirements below.
(1) Election Period for Retirement Benefits. The election period as
to retirement benefits is the 90-day period ending on the Annuity
Starting Date. An election to waive the Qualified Joint and
Survivor Annuity may not be made before the date the Participant
is provided with the notice of the ability to waive the Qualified
Joint and Survivor Annuity. If the Participant elects a full
flexibility option, he may revoke his election at any time before
his first Distribution Calendar Year, as defined in Article VII.
When he elects to have benefits begin again, he shall have a new
Annuity Starting Date. His election period for this election is
the 90-day period ending on the Annuity Starting Date for the
optional form of retirement benefit elected.
(2) Election Period for Death Benefits. A Participant may make an
election as
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to death benefits at any time before he dies. The spouse's
election period begins on the date the Participant dies and ends
on the date benefits begin. The Beneficiary's election period
begins on the date the Participant dies and ends on the date
benefits begin.
An election to waive the Qualified Preretirement Survivor Annuity
may not be made by the Participant before the date he is provided
with the notice of the ability to waive the Qualified
Preretirement Survivor Annuity. A Participant's election to waive
the Qualified Preretirement Survivor Annuity which is made before
the first day of the Plan Year in which he reaches age 35 shall
become invalid on such date. An election made by a Participant
after he ceases to be an Employee will not become invalid on the
first day of the Plan Year in which he reaches age 35 with
respect to death benefits from that part of his Account resulting
from Contributions made before he ceased to be an Employee.
(3) Consent to Election. If the Participant's Vested Account exceeds
$5,000 ($3,500 for Plan Years beginning before August 6, 1997),
any benefit which is (i) immediately distributable or (ii)
payable in a form other than a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity, requires
the consent of the Participant and the Participant's spouse (or
where either the Participant or the spouse has died, the
survivor). Such consent shall also be required if the
Participant's Vested Account at the time of any prior
distribution exceeded $5,000 ($3,500 for Plan Years beginning
before August 6, 1997). The rule in the preceding sentence shall
not apply effective October 17, 2000. However, consent will still
be required if the Participant had previously had an Annuity
Starting Date with respect to any portion of such Vested Account.
The consent of the Participant or spouse to a benefit which is
immediately distributable must not be made before the date the
Participant or spouse is provided with the notice of the ability
to defer the distribution. Such consent shall be made in writing.
The consent shall not be made more than 90 days before the
Annuity Starting Date. Spousal consent is not required for a
benefit which is immediately distributable in a Qualified Joint
and Survivor Annuity. Furthermore, if spousal consent is not
required because the Participant is electing an optional form of
retirement benefit that is not a life annuity pursuant to (d)
below, only the Participant need consent to the distribution of a
benefit payable in a form that is not a life annuity and which is
immediately distributable. Neither the consent of the Participant
nor the Participant's spouse shall be required to the extent that
a distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415.
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In addition, upon termination of this Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider),
and if the Employer (or any entity within the same Controlled
Group) does not maintain another defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)), the Participant's Account balance will, without the
Participant's consent, be distributed to the Participant.
However, if any entity within the same Controlled Group maintains
another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)) then the
Participant's Account will be transferred, without the
Participant's consent, to the other plan if the Participant does
not consent to an immediate distribution.
A benefit is immediately distributable if any part of the benefit
could be distributed to the Participant (or surviving spouse)
before the Participant attains (or would have attained if not
deceased) the older of Normal Retirement Age or age 62.
If the Qualified Joint and Survivor Annuity is waived, the spouse
has the right to limit consent only to a specific Beneficiary or
a specific form of benefit. The spouse can relinquish one or both
such rights. Such consent shall be made in writing. The consent
shall not be made more than 90 days before the Annuity Starting
Date. If the Qualified Preretirement Survivor Annuity is waived,
the spouse has the right to limit consent only to a specific
Beneficiary. Such consent shall be in writing. The spouse's
consent shall be witnessed by a plan representative or notary
public. The spouse's consent must acknowledge the effect of the
election, including that the spouse had the right to limit
consent only to a specific Beneficiary or a specific form of
benefit, if applicable, and that the relinquishment of one or
both such rights was voluntary. Unless the consent of the spouse
expressly permits designations by the Participant without a
requirement of further consent by the spouse, the spouse's
consent must be limited to the form of benefit, if applicable,
and the Beneficiary (including any Contingent Annuitant), class
of Beneficiaries, or contingent Beneficiary named in the
election.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the plan representative that
the consent of the spouse cannot be obtained because there is no
spouse or the spouse cannot be located. A spouse's consent under
this paragraph shall not be valid with respect to any other
spouse. A Participant may revoke a prior election without the
consent of the spouse. Any new election will require a new
spousal consent, unless the consent of the spouse expressly
permits such election by the Participant without further consent
by the spouse. A spouse's consent may be revoked at any time
within the Participant's election period.
(d) Special Rule for Profit Sharing Plans. This subparagraph (d) applies
if the Plan is
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not a direct or indirect transferee after December 31, 1984, of a
defined benefit plan, money purchase plan, target benefit plan, stock
bonus plan, or profit sharing plan which is subject to the survivor
annuity requirements of Code Sections 401(a)(11) and 417. If the above
condition is met, spousal consent is not required for electing an
optional form of retirement benefit that is not a life annuity. If
such condition is not met, such consent requirements shall be
operative.
(e) Dividend Distributions. Cash dividends that are available to a
Participant, Beneficiary or Alternate Payee shall not be subject to
the distribution form and notice requirements of this Article. If a
Participant, Beneficiary or Alternate Payee elects to receive such
dividends, such dividends shall be payable in a lump-sum (and only a
lump-sum) in cash, and are payable without regard to any notice and
consent otherwise required under the Plan.
SECTION 6.04--NOTICE REQUIREMENTS.
(a) Optional Forms of Retirement Benefit and Right to Defer. The Plan
Administrator shall furnish to the Participant and the Participant's
spouse a written explanation of the optional forms of retirement
benefit in the OPTIONAL FORMS OF DISTRIBUTION SECTION of this article,
including the material features and relative values of these options,
in a manner that would satisfy the notice requirements of Code Section
417(a)(3) and the right of the Participant and the Participant's
spouse to defer distribution until the benefit is no longer
immediately distributable.
The Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the Participant
and the Participant's spouse no less than 30 days, and no more than 90
days, before the Annuity Starting Date.
The Participant (and spouse, if applicable) may waive the 30-day
election period if the distribution of the elected form of retirement
benefit begins more than 7 days after the Plan Administrator provides
the Participant (and spouse, if applicable) the written explanation
provided that: (i) the Participant has been provided with information
that clearly indicates that the Participant has at least 30 days to
consider the decision of whether or not to elect a distribution and a
particular distribution option, (ii) the Participant is permitted to
revoke any affirmative distribution election at least until the
Annuity Starting Date or, if later, at any time prior to the
expiration of the 7-day period that begins the day after the
explanation is provided to the Participant, and (iii) the Annuity
Starting Date is a date after the date that the written explanation
was provided to the Participant.
(b) Qualified Joint and Survivor Annuity. The Plan Administrator shall
furnish to the Participant a written explanation of the following: the
terms and conditions of the Qualified Joint and Survivor Annuity; the
Participant's right to make, and the effect
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of, an election to waive the Qualified Joint and Survivor Annuity; the
rights of the Participant's spouse; and the right to revoke an
election and the effect of such a revocation.
The Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the Participant
no less than 30 days, and no more than 90 days, before the Annuity
Starting Date.
The Participant (and spouse, if applicable) may waive the 30-day
election period if the distribution of the elected form of retirement
benefit begins more than 7 days after the Plan Administrator provides
the Participant (and spouse, if applicable) the written explanation
provided that: (i) the Participant has been provided with information
that clearly indicates that the Participant has at least 30 days to
consider whether to waive the Qualified Joint and Survivor Annuity and
elect (with spousal consent, if applicable) a form of distribution
other than a Qualified Joint and Survivor Annuity, (ii) the
Participant is permitted to revoke any affirmative distribution
election at least until the Annuity Starting Date or, if later, at any
time prior to the expiration of the 7-day period that begins the day
after the explanation of the Qualified Joint and Survivor Annuity is
provided to the Participant, and (iii) the Annuity Starting Date is a
date after the date that the written explanation was provided to the
Participant.
After the written explanation is given, a Participant or spouse may
make a written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Joint and Survivor Annuity and the financial effect upon the
Participant's benefit (in terms of dollars per benefit payment) of
electing not to have benefits distributed in accordance with the
Qualified Joint and Survivor Annuity.
(c) Qualified Preretirement Survivor Annuity. The Plan Administrator shall
furnish to the Participant a written explanation of the following: the
terms and conditions of the Qualified Preretirement Survivor Annuity;
the Participant's right to make, and the effect of, an election to
waive the Qualified Preretirement Survivor Annuity; the rights of the
Participant's spouse; and the right to revoke an election and the
effect of such a revocation.
The Plan Administrator shall furnish the written explanation by a
method reasonably calculated to reach the attention of the Participant
within the applicable period. The applicable period for a Participant
is whichever of the following periods ends last:
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(1) the period beginning one year before the date the individual
becomes a Participant and ending one year after such date; or
(2) the period beginning one year before the date the Participant's
spouse is first entitled to a Qualified Preretirement Survivor
Annuity and ending one year after such date.
If such notice is given before the period beginning with the first day
of the Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in which the
Participant attains age 35, an additional notice shall be given within
such period. If a Participant ceases to be an Employee before
attaining age 35, an additional notice shall be given within the
period beginning one year before the date he ceases to be an Employee
and ending one year after such date.
After the written explanation is given, a Participant or spouse may
make a written request for additional information. The written
explanation must be personally delivered or mailed (first class mail,
postage prepaid) to the Participant or spouse within 30 days from the
date of the written request. The Plan Administrator does not need to
comply with more than one such request by a Participant or spouse.
The Plan Administrator's explanation shall be written in nontechnical
language and will explain the terms and conditions of the Qualified
Preretirement Survivor Annuity and the financial effect upon the
spouse's benefit (in terms of dollars per benefit payment) of electing
not to have benefits distributed in accordance with the Qualified
Preretirement Survivor Annuity.
SECTION 6.05--FORM OF DISTRIBUTION FROM ESOP MATCHING AND NON-MATCHING
CONTRIBUTION ACCOUNTS.
Notwithstanding any provision of this Article VI to the contrary,
distributions from a Participant's ESOP Matching and Non-Matching Contribution
Accounts shall be governed by this Section 6.05 and Section 6.06.
(a) Distribution in Cash. The part of a Participant's Vested ESOP
Matching, Non-Matching and Diversification Accounts will be
distributed in cash unless the Participant affirmatively elects under
paragraph (b) below to receive the distribution in the form of
Qualifying Employer Securities with cash in lieu of fractional shares.
The cash value of Qualifying Employer Securities shall be equal to the
fair market value of such stock determined as of the last Valuation
Date prior to the date of distribution.
(b) Distribution in Qualifying Employer Securities. Unless subsection (c)
applies, a Participant may elect to have the Participant's Vested ESOP
Matching and Non-Matching Contribution Accounts distributed in the
form of Qualifying Employer
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Securities with cash in lieu of fractional shares. Any cash or other
property in the Participant's Vested ESOP Matching or Non-Matching
Contribution Account ("non-stock assets") shall be used to acquire
Qualifying Employer Securities for distribution but only if such
Participant further elects and only if such Qualifying Employer
Securities are available for purchase on the open market.
(c) Distribution in Qualifying Employer Securities Prohibited. If the
Employer's corporate charter or by-law provisions restrict ownership
of substantially all outstanding Qualifying Employer Securities to
Employees or to a plan or trust described in Code Section 401(a), then
any distribution of a Participant's ESOP Matching and ESOP
Non-Matching Accounts shall only be in cash.
SECTION 6.06--PUT OPTION.
If shares of Qualifying Employer Securities are distributed from the Fund,
and if such shares are not publicly traded when distributed or are subject to a
trading limitation when distributed, then such shares shall be subject to an
initial and second put option as follows:
(a) The put option shall be exercisable by the distributee (whether the
Participant or a Beneficiary), any person to whom shares of Qualifying
Employer Securities have passed by gift from the distributee, or any
person (including an estate or the distributee from an estate) to whom
the shares of Qualifying Employer Securities passed upon the death of
the distributee (hereinafter referred to as the "holder").
(b) The initial put option must be exercised during the 60-day period
which begins on the date the shares of Qualifying Employer Securities
are distributed from the Fund. If not exercised during that period,
the initial put option shall lapse.
(c) As soon as is reasonably practicable following the last day of the
Plan Year in which the initial 60-day period expires, the Employer
shall notify all of the non-electing holders of the valuation of such
Qualifying Employer Securities as of the most recent Valuation Date.
During the 60-day period following the receipt of such valuation
notice, any such non-electing holder shall have a second put option.
(d) The period during which the put option is exercisable shall not
include any time when a holder is unable to exercise the put option
because the Employer is prohibited from honoring the put option by
federal or state law. If the shares of Qualifying Employer Securities
are publicly traded without restriction when distributed but cease to
be traded within either of the 60-day periods described herein after
distribution, the Employer must notify each holder in writing on or
before the tenth day after the date the shares cease to be so traded
that for the remainder of the applicable 60-day period the shares are
subject to a put option. The number of days between such tenth day and
the date on which notice is actually given, if later than the tenth
day, must be added to the duration of the put option. The notice must
inform the holders of the terms of the put option.
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(e) The put option may be exercised by written notice of exercise to the
Employer or its designee made on such form and in accordance with such
rules as may be prescribed for this purpose by the Plan Administrator.
(f) Upon receipt of such notice, the Employer shall tender to the holder
the fair market value of the Qualifying Employer Securities (as
determined under Sections 4.02(e) and (f)) for such shares.
(i) If the Qualifying Employer Securities were distributed in a
total distribution then the Employer may pay either in a lump
sum or substantially equal installments (bearing a reasonable
rate of interest and providing adequate security to the holder)
over a period beginning within 30 days following the date the
put option is exercised and ending not more than five years
after the date the put option is exercised.
(ii) If the Qualifying Employer Securities were not distributed in a
total distribution then the Employer must pay the holder in a
single lump sum payment.
(iii) If payment is made in installments, the Employer shall, within
30 days of the date the holder exercises the put option, give
the holder a promissory note for the full unpaid balance of the
options price. Such note shall, at a minimum, provide adequate
security, state a rate of interest reasonable under the
circumstances (but at least equal to the imputed compound rate
in effect as of the exercise date pursuant to the regulations
promulgated under Code Sections 483 or 1274, whichever shall be
applicable) and provide that the full amount of such note shall
accelerate and become due immediately in the even that the
Employer defaults in the payment of a scheduled payment.
(g) The Plan Fund is not bound to purchase shares of Qualifying Employer
Securities pursuant to the put option, but the Employer may direct the
Trustee to cause the Plan Fund to assume the Employer's rights and
obligations to acquire shares of Qualifying Employer Securities under
the put option.
(h) A "trading limitation" for this purpose means a restriction under any
federal or state securities law or under any agreement affecting the
shares that would make the shares not as freely tradable as shares not
subject to such restriction.
(i) A "total distribution" for this purpose means a distribution to a
Participant or Beneficiary within one taxable year of such recipient
to the entire balance to the credit of the Participant.
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
SECTION 7.01--APPLICATION.
The optional forms of distribution are only those provided in Article VI.
An optional form of distribution shall not be permitted unless it meets the
requirements of this article. The timing of any distribution must meet the
requirements of this article.
SECTION 7.02--DEFINITIONS.
For purposes of this article, the following terms are defined:
Applicable Life Expectancy means Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the Participant (or
Designated Beneficiary) as of the Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first calculated. If Life
Expectancy is being recalculated, the Applicable Life Expectancy shall be the
Life Expectancy so recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being recalculated, such
succeeding calendar year.
Designated Beneficiary means the individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9) and the
regulations thereunder.
Distribution Calendar Year means a calendar year for which a minimum
distribution is required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which distributions are
required to begin pursuant to (e) of the DISTRIBUTION REQUIREMENTS SECTION of
this article.
5-percent Owner means a 5-percent owner as defined in Code Section 416. A
Participant is treated as a 5-percent Owner for purposes of this article if such
Participant is a 5-percent Owner at any time during the Plan Year ending with or
within the calendar year in which such owner attains age 70 1/2.
In addition, a Participant is treated as a 5-percent Owner for purposes of
this article if such Participant becomes a 5-percent Owner in a later Plan Year.
Such Participant's Required Beginning Date shall not be later than the April 1
of the calendar year following the calendar year in which such later Plan Year
ends.
Once distributions have begun to a 5-percent Owner under this article, they
must continue to be distributed, even if the Participant ceases to be a
5-percent Owner in a subsequent year.
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Joint and Last Survivor Expectancy means joint and last survivor expectancy
computed using the expected return multiples in Table VI of section 1.72-9 of
the Income Tax Regulations.
Unless otherwise elected by the Participant by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant and shall apply to all
subsequent years. The life expectancy of a nonspouse Beneficiary may not be
recalculated.
Life Expectancy means life expectancy computed using the expected return
multiples in Table V of section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (e)(2)(ii) of the DISTRIBUTION REQUIREMENTS SECTION
of this article) by the time distributions are required to begin, life
expectancy shall be recalculated annually. Such election shall be irrevocable as
to the Participant (or spouse) and shall apply to all subsequent years. The life
expectancy of a nonspouse Beneficiary may not be recalculated.
Participant's Benefit means:
(a) The Account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (valuation
calendar year) increased by the amount of any contributions or
forfeitures allocated to the Account balance as of the dates in the
valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation
Date.
(b) Exception for Second Distribution Calendar Year. For purposes of (a)
above, if any portion of the minimum distribution for the first
Distribution Calendar Year is made in the second Distribution Calendar
Year on or before the Required Beginning Date, the amount of the
minimum distribution made in the second Distribution Calendar Year
shall be treated as if it had been made in the immediately preceding
Distribution Calendar Year.
Required Beginning Date means, for a Participant who is a 5-percent Owner,
the April 1 of the calendar year following the calendar year in which he attains
age 70 1/2.
Required Beginning Date means, for any Participant who is not a 5-percent
Owner, the April 1 of the calendar year following the later of the calendar year
in which he attains age 70 1/2 or the calendar year in which he retires.
The pre-retirement age 70 1/2 distribution option is only eliminated with
respect to Participants who reach age 70 1/2 in or after a calendar year that
begins after the later of December 31, 1998, or the adoption date of the
amendment which eliminated such option. The pre-retirement age 70 1/2
distribution is an optional form of benefit under which benefits payable in a
particular distribution form (including any modifications that may be elected
after benefits begin) begin at a time during the period that begins on or after
January 1 of the calendar year in which the
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Participant attains age 70 1/2 and ends April 1 of the immediately following
calendar year.
The options available for Participants who are not 5-percent Owners and
attained age 70 1/2 in calendar years before the calendar year that begins after
the later of December 31, 1998, or the adoption date of the amendment which
eliminated the preretirement age 70 1/2 distribution shall be the following. Any
such Participant attaining age 70 1/2 in years after 1995 may elect by April 1
of the calendar year following the calendar year in which he attained age 70 1/2
(or by December 31, 1997 in the case of a Participant attaining age 70 1/2 in
1996) to defer distributions until the calendar year following the calendar year
in which he retires. Any such Participant attaining age 70 1/2 in years prior to
1997 may elect to stop distributions which are not purchased annuities and
recommence by the April 1 of the calendar year following the year in which he
retires. There shall be a new Annuity Starting Date upon recommencement.
SECTION 7.03--DISTRIBUTION REQUIREMENTS.
(a) General Rules.
(1) Subject to the AUTOMATIC FORMS OF DISTRIBUTION SECTION of Article
VI, joint and survivor annuity requirements, the requirements of
this article shall apply to any distribution of a Participant's
interest and shall take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the
provisions of this article apply to calendar years beginning
after December 31, 1984.
(2) All distributions required under this article shall be determined
and made in accordance with the proposed regulations under Code
Section 401(a)(9), including the minimum distribution incidental
benefit requirement of section 1.401(a)(9)-2 of the proposed
regulations.
(3) With respect to distributions under the Plan made on or after
June 14, 2001, for calendar years beginning on or after January
1, 2001, the Plan will apply the minimum distribution
requirements of Code Section 401(a)(9) in accordance with the
regulations under Code Section 401(a)(9) that were proposed on
January 17, 2001 (the 2001 Proposed Regulations), notwithstanding
any provision of the Plan to the contrary. If the total amount of
required minimum distributions made to a Participant for 2001
prior to June 14, 2001, are equal to or greater than the amount
of required minimum distributions determined under the 2001
Proposed Regulations, then no additional distributions are
required for such Participant for 2001 on or after such date. If
the total amount of required minimum distributions made to a
Participant for 2001 prior to June 14, 2001, are less than the
amount determined under the 2001 Proposed Regulations, then the
amount of required minimum distributions for 2001 on or after
such date will be determined so that the total amount of required
minimum distributions for 2001 is the amount determined under the
2001 Proposed Regulations.
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These provisions shall continue in effect until the last calendar
year beginning before the effective date of final regulations
under Code Section 401(a)(9) or such other date as may be
published by the Internal Revenue Service.
(b) Required Beginning Date. The entire interest of a Participant must be
distributed or begin to be distributed no later than the Participant's
Required Beginning Date.
(c) Limits on Distribution Periods. As of the first Distribution Calendar
Year, distributions, if not made in a single sum, may only be made
over one of the following periods (or combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated Beneficiary,
(3) a period certain not extending beyond the Life Expectancy of the
Participant, or
(4) a period certain not extending beyond the Joint and Last Survivor
Expectancy of the Participant and a Designated Beneficiary.
(d) Determination of Amount to be Distributed Each Year. If the
Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the Required Beginning Date:
(1) Individual Account.
(i) If a Participant's Benefit is to be distributed over
A. a period not extending beyond the Life Expectancy of
the Participant or the Joint Life and Last Survivor
Expectancy of the Participant and the Participant's
Designated Beneficiary, or
B. a period not extending beyond the Life Expectancy of
the Designated Beneficiary,
the amount required to be distributed for each calendar
year beginning with the distributions for the first
Distribution Calendar Year, must be at least equal to the
quotient obtained by dividing the Participant's Benefit by
the Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least
50 percent of the
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present value of the amount available for distribution is
paid within the Life Expectancy of the Participant.
(iii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year
shall not be less than the quotient obtained by dividing
the Participant's Benefit by the lesser of:
A. the Applicable Life Expectancy, or
B. if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the
table set forth in Q&A-4 of section 1.401(a)(9)-2 of
the proposed regulations.
Distributions after the death of the Participant shall be
distributed using the Applicable Life Expectancy in (1)(i)
above as the relevant divisor without regard to section
1.401(a)(9)-2 of the proposed regulations.
(iv) The minimum distribution required for the Participant's
first Distribution Calendar Year must be made on or before
the Participant's Required Beginning Date. The minimum
distribution for other calendar years, including the
minimum distribution for the Distribution Calendar Year in
which the Participant's Required Beginning Date occurs,
must be made on or before December 31 of that Distribution
Calendar Year.
(2) Other Forms. If the Participant's Benefit is distributed in the
form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Code Section 401(a)(9) and the proposed
regulations thereunder.
(e) Death Distribution Provisions.
(1) Distribution Beginning Before Death. If the Participant dies
after distribution of his interest has begun, the remaining
portion of such interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior
to the Participant's death.
(2) Distribution Beginning After Death.
(i) If the Participant dies before distribution of his interest
begins, distribution of the Participant's entire interest
shall be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death
except to the extent that an election is made to
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receive distributions in accordance with A or B below:
A. if any portion of the Participant's interest is payable
to a Designated Beneficiary, distributions may be made
over the life or over a period certain not greater than
the Life Expectancy of the Designated Beneficiary
beginning on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died;
B. if the Designated Beneficiary is the Participant's
surviving spouse, the date distributions are required
to begin in accordance with A above shall not be
earlier than the later of:
1. December 31 of the calendar year immediately
following the calendar year in which the
Participant died, or
2. December 31 of the calendar year in which the
Participant would have attained age 70 1/2.
(ii) If the Participant has not made an election pursuant to
this (e)(2) by the time of his death, the Participant's
Designated Beneficiary must elect the method of
distribution no later than the earlier of:
A. December 31 of the calendar year in which distributions
would be required to begin under this subparagraph, or
B. December 31 of the calendar year which contains the
fifth anniversary of the date of death of the
Participant.
(iii) If the Participant has no Designated Beneficiary, or if the
Designated Beneficiary does not elect a method of
distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's
death.
(3) For purposes of (e)(2) above, if the surviving spouse dies after
the Participant, but before payments to such spouse begin, the
provisions of (e)(2) above, with the exception of (e)(2)(i)(B)
therein, shall be applied as if the surviving spouse were the
Participant.
(4) For purposes of this (e), distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or if (e)(3) above is applicable, the date
distribution is required to begin to the surviving spouse
pursuant to (e)(2) above). If distribution in the form of an
annuity
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irrevocably begins to the Participant before the Required
Beginning Date, the date distribution is considered to begin is
the date distribution actually begins.
ARTICLE VIII
TERMINATION OF THE PLAN
The Employer expects to continue the Plan indefinitely but reserves the
right to terminate the Plan in whole or in part at any time upon giving written
notice to all parties concerned. Complete discontinuance of Contributions
constitutes complete termination of the Plan.
The Account of each Participant shall be fully (100%) vested and
nonforfeitable as of the effective date of complete termination of the Plan. The
Account of each Participant who is included in the group of Participants deemed
to be affected by the partial termination of the Plan shall be fully (100%)
vested and nonforfeitable as of the effective date of the partial termination of
the Plan. The Participant's Account shall continue to participate in the
earnings credited, expenses charged, and any appreciation or depreciation of the
Investment Fund until his Vested Account is distributed.
A Participant's Account which does not result from the Contributions listed
below may be distributed to the Participant after the effective date of the
complete termination of the Plan:
Elective Deferral Contributions
A Participant's Account resulting from such Contributions may be
distributed upon complete termination of the Plan, but only if neither the
Employer nor any Controlled Group member maintain or establish a successor
defined contribution plan (other than an employer stock ownership plan as
defined in Code Section 4975(e)(7), a simplified employee pension plan as
defined in Code Section 408(k) or a SIMPLE IRA plan as defined in Code Section
408(p)) and such distribution is made in a lump sum. A distribution under this
article shall be a retirement benefit and shall be distributed to the
Participant according to the provisions of Article VI.
The Participant's entire Vested Account shall be paid in a single sum to
the Participant as of the effective date of complete termination of the Plan if
(i) the requirements for distribution of Elective Deferral Contributions in the
above paragraph are met and (ii) consent of the Participant is not required in
the ELECTION PROCEDURES SECTION of Article VI to distribute a benefit which is
immediately distributable. This is a small amounts payment. The small amounts
payment is in full settlement of all benefits otherwise payable.
Upon complete termination of the Plan, no more Employees shall become
Participants and no more Contributions shall be made.
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The assets of this Plan shall not be paid to the Employer at any time,
except that, after the satisfaction of all liabilities under the Plan, any
assets remaining may be paid to the Employer. The payment may not be made if it
would contravene any provision of law.
ARTICLE IX
ADMINISTRATION OF THE PLAN
SECTION 9.01--ADMINISTRATION.
Subject to the provisions of this article, the Plan Administrator has
complete control of the administration of the Plan. The Plan Administrator has
all the powers necessary for it to properly carry out its administrative duties.
Not in limitation, but in amplification of the foregoing, the Plan Administrator
has complete discretion to construe or interpret the provisions of the Plan,
including ambiguous provisions, if any, and to determine all questions that may
arise under the Plan, including all questions relating to the eligibility of
Employees to participate in the Plan and the amount of benefit to which any
Participant, Beneficiary, spouse or Contingent Annuitant may become entitled.
The Plan Administrator's decisions upon all matters within the scope of its
authority shall be final.
Unless otherwise set out in the Plan or Annuity Contract, the Plan
Administrator may delegate recordkeeping and other duties which are necessary
for the administration of the Plan to any person or firm which agrees to accept
such duties. The Plan Administrator shall be entitled to rely upon all tables,
valuations, certificates and reports furnished by the consultant or actuary
appointed by the Plan Administrator and upon all opinions given by any counsel
selected or approved by the Plan Administrator.
The Plan Administrator shall receive all claims for benefits by
Participants, former Participants, Beneficiaries, spouses, and Contingent
Annuitants. The Plan Administrator shall determine all facts necessary to
establish the right of any Claimant to benefits and the amount of those benefits
under the provisions of the Plan. The Plan Administrator may establish rules and
procedures to be followed by Claimants in filing claims for benefits, in
furnishing and verifying proofs necessary to determine age, and in any other
matters required to administer the Plan.
SECTION 9.02--EXPENSES.
Expenses of the Plan, to the extent that the Employer does not pay such
expenses, may be paid out of the assets of the Plan provided that such payment
is consistent with ERISA. Such expenses include, but are not limited to,
expenses for bonding required by ERISA; expenses for recordkeeping and other
administrative services; fees and expenses of the Trustee or Annuity Contract;
expenses for investment education service; and direct costs that the Employer
incurs with respect to the Plan.
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SECTION 9.03--RECORDS.
All acts and determinations of the Plan Administrator shall be duly
recorded. All these records, together with other documents necessary for the
administration of the Plan, shall be preserved in the Plan Administrator's
custody.
Writing (handwriting, typing, printing), photostating, photographing,
microfilming, magnetic impulse, mechanical or electrical recording, or other
forms of data compilation shall be acceptable means of keeping records.
SECTION 9.04--INFORMATION AVAILABLE.
Any Participant in the Plan or any Beneficiary may examine copies of the
Plan description, latest annual report, any bargaining agreement, this Plan, the
Annuity Contract or any other instrument under which the Plan was established or
is operated. The Plan Administrator shall maintain all of the items listed in
this section in its office, or in such other place or places as it may designate
in order to comply with governmental regulations. These items may be examined
during reasonable business hours. Upon the written request of a Participant or
Beneficiary receiving benefits under the Plan, the Plan Administrator shall
furnish him with a copy of any of these items. The Plan Administrator may make a
reasonable charge to the requesting person for the copy.
SECTION 9.05--CLAIM AND APPEAL PROCEDURES.
A Claimant must submit any required forms and pertinent information when
making a claim for benefits under the Plan.
If a claim for benefits under the Plan is denied, the Plan Administrator
shall provide adequate written notice to the Claimant whose claim for benefits
under the Plan has been denied. The notice must be furnished within 90 days of
the date that the claim is received by the Plan Administrator. The Claimant
shall be notified in writing within this initial 90-day period if special
circumstances require an extension of time needed to process the claim and the
date by which the Plan Administrator's decision is expected to be rendered. The
written notice shall be furnished no later than 180 days after the date the
claim was received by the Plan Administrator.
The Plan Administrator's notice to the Claimant shall specify the reason
for the denial; specify references to pertinent Plan provisions on which denial
is based; describe any additional material and information needed for the
Claimant to perfect his claim for benefits; explain why the material and
information is needed; inform the Claimant that any appeal he wishes to make
must be in writing to the Plan Administrator within 60 days after receipt of the
Plan Administrator's notice of denial of benefits and that failure to make the
written appeal within such 60-day period renders the Plan Administrator's
determination of such denial final, binding and conclusive.
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If the Claimant appeals to the Plan Administrator, the Claimant (or his
authorized representative) may submit in writing whatever issues and comments
the Claimant (or his authorized representative) feels are pertinent. The
Claimant (or his authorized representative) may review pertinent Plan documents.
The Plan Administrator shall reexamine all facts related to the appeal and make
a final determination as to whether the denial of benefits is justified under
the circumstances. The Plan Administrator shall advise the Claimant of its
decision within 60 days of his written request for review, unless special
circumstances (such as a hearing) would make rendering a decision within the
60-day limit unfeasible. The Claimant must be notified within the 60-day limit
if an extension is necessary. The Plan Administrator shall render a decision on
a claim for benefits no later than 120 days after the request for review is
received.
SECTION 9.06--DELEGATION OF AUTHORITY.
All or any part of the administrative duties and responsibilities under
this article may be delegated by the Plan Administrator to a retirement
committee. The duties and responsibilities of the retirement committee shall be
set out in a separate written agreement.
SECTION 9.07--EXERCISE OF DISCRETIONARY AUTHORITY.
The Employer, Plan Administrator, and any other person or entity who has
authority with respect to the management, administration, or investment of the
Plan may exercise that authority in its/his full discretion, subject only to the
duties imposed under ERISA. This discretionary authority includes, but is not
limited to, the authority to make any and all factual determinations and
interpret all terms and provisions of the Plan documents relevant to the issue
under consideration. The exercise of authority will be binding upon all persons;
will be given deference in all courts of law; and will not be overturned or set
aside by any court of law unless found to be arbitrary and capricious or made in
bad faith.
SECTION 9.08--VOTING AND TENDER OF QUALIFYING EMPLOYER SECURITIES.
(a) Tenders For Employer Securities.
(1) Notwithstanding any other provision of this Plan to the contrary,
if any, but subject to the provisions of paragraphs (2), (3),
(4), (5) and (6) of this subsection (a), in the event an offer
shall be received by the Trustee (including but not limited to a
tender offer or exchange offer within the meaning of the
Securities Exchange Act of 1934, as from time to time amended and
in effect) to acquire any shares of Qualifying Employer
Securities held by the Trustee in the Trust, whether or not
allocated to the Account of any Participant (hereinafter referred
to as an "Offer"), the Trustee shall have no discretion or
authority to sell, exchange or transfer any of such shares
pursuant to such Offer except to the extent, and only to the
extent, that the Trustee is timely directed to do so in writing
(i) with respect to any Qualifying Employer Securities held by
the Trustee subject to such Offer and allocated to the Account of
any Participant, by each
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Participant to whose Account any of such shares are allocated, as
a named fiduciary, within the meaning of Section 403(a)(1) of
ERISA (referred to in this Section 9.08 as "named fiduciary") and
(ii) with respect to any Qualifying Employer Securities held by
the Trustee subject to such Offer and not allocated to the
Account of any Participant, by each Participant who has
Qualifying Employer Securities allocated to his or her Account,
as named fiduciary, with respect to an amount of such unallocated
Qualifying Employer Securities equal to the total amount of
unallocated Qualifying Employer Securities, multiplied by a
fraction the numerator of which is the amount of Qualifying
Employer Securities allocated to the Participant's Account under
the Plan and the denominator of which is the total amount of
Qualifying Employers Securities allocated to the Accounts of all
Participants under the Plan.
Upon timely receipt of such instructions, the Trustee shall,
subject to the provisions of paragraphs (3), (4) and (6) of this
subsection (a), sell, exchange or transfer pursuant to such
Offer, only such shares as to which such instructions were given.
The Trustee shall use its best efforts to communicate or cause to
be communicated to each Participant the consequences of any
failure to provide timely instructions to the Trustee.
In the event, under the terms of an Offer or otherwise, any
shares of Qualifying Employer Securities tendered for sale,
exchange or transfer pursuant to such Offer may be withdrawn from
such Offer, the Trustee shall follow such instructions respecting
the withdrawal of such securities from such Offer in the same
manner and the same proportion as shall be timely received by the
Trustee from the Participants as named fiduciaries entitled under
this paragraph to give instructions as to the sale, exchange or
transfer of securities pursuant to such Offer.
(2) In the event that an Offer for fewer than all of the shares of
Qualifying Employer Securities held by the Trustee in the Trust
shall be received by the Trustee, each Participant who has been
allocated any of such Qualifying Employer Securities subject to
such Offer shall be entitled to direct the Trustee as to the
acceptance or rejection of such Offer (as provided by paragraph
(1) of this subsection (a)) with respect to the largest portion
of such Qualifying Employer Securities as may be possible given
the total number or amount of shares of Qualifying Employer
Securities the Plan may sell, exchange or transfer pursuant to
the Offer based upon the instructions received by the Trustee
from all other Participants who shall timely instruct the Trustee
pursuant to this paragraph to sell, exchange or transfer such
shares pursuant to such Offer, each on a pro rata basis in
accordance with the number or amount of such shares allocated to
their respective Accounts.
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(3) Notwithstanding the provisions of paragraphs (1) and (2) of this
subsection to the contrary, in the event that an Offer for fewer
than 10 percent of all Qualifying Employer Securities held by the
Trustee subject to such Offer held by the Trustee in the Trust
shall be received by the Trustee, the Trustee shall determine, in
its sole discretion, whether to sell, exchange or transfer any
Qualifying Employer Securities pursuant to such Offer, taking
into consideration items set forth in paragraph (6) of this
subsection (a); provided, however, if there are multiple Offers
within any twelve month period (each Offer being for fewer than
10 percent of the Qualifying Employer Securities held by the
Trustee), the Trustee shall be required to solicit directions
from Participants, as named fiduciaries, pursuant to the
provisions of this Section 9.08 with respect to each outstanding
Offer that, after taking into account all Qualifying Employer
Securities sold, exchanged or transferred in accordance with any
other Offer within the preceding 12 months and all outstanding
Offers for Qualifying Employer Securities, would result in the
sale, exchange or transfer within such 12-month period, in the
aggregate with all other outstanding Offers, of more than 10
percent of the Qualifying Employer Securities held by the Trustee
if all outstanding Offers were accepted by the Trustee.
(4) In the event an Offer shall be received by the Trustee and
instructions shall be solicited from Participants in the Plan
pursuant to paragraph (1) of this subsection (a) regarding such
Offer, and prior to termination of such Offer, another Offer is
received by the Trustee for the Qualifying Employer Securities
subject to the first Offer, the Trustee shall use its best
efforts under the circumstances to solicit instructions from the
Participants to the Trustee (i) with respect to Qualifying
Employer Securities tendered for sale, exchange or transfer
pursuant to the first Offer, whether to withdraw such tender, if
possible, and, if withdrawn, whether to tender any Qualifying
Employer Securities so withdrawn for sale, exchange or transfer
pursuant to the second Offer and (ii) with respect to Qualifying
Employer Securities not tendered for sale, exchange or transfer
pursuant to the first Offer, whether to tender or not to tender
such Qualifying Employer Securities for sale, exchange or
transfer pursuant to the second Offer. The Trustee shall follow
all such instructions received in a timely manner from
Participants in the same manner and in the same proportion as
provided in subparagraph (a) of this subsection (a). With respect
to any further Offer for any Qualifying Employer Securities
received by the Trustee and subject to any earlier Offer
(including successive Offers from one or more existing offerors),
the Trustee shall act in the same manner as described above.
(5) In the event an Offer for any Qualifying Employer Securities held
by the Trustee in the Trust shall be received by the Trustee and
the Participants shall be entitled to determine to accept, reject
or withdraw an acceptance
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of such Offer pursuant to paragraphs (1) through (4) of this
subsection (a), (i) the Employer and the Trustee shall not
interfere in any manner with the decision of any Participant
regarding the action of the Participant with respect to such
Offer (hereinafter referred to as an "Investment Decision"), and
the Trustee shall arrange for such Investment Decision to be made
on a confidential basis; (ii) the Trustee shall use its best
efforts to communicate or cause to be communicated to all
Participants the provisions of the Plan and Trust Agreement
relating to the right of Participants to direct the Trustee with
respect to Qualifying Employer Securities subject to such Offer,
including unallocated Qualifying Employer Securities, and of the
obligation of the Trustee to follow such directions; (iii) the
Trustee shall use its best efforts to distribute or cause to be
distributed to Participants all communications directed generally
to the owners of the Qualifying Employer Securities to whom such
Offer is made or is available; and (iv) the Trustee shall use its
best efforts to distribute or cause to be distributed to
Participants all communications that the Trustee may receive, if
any, from the persons making the Offer or any other interested
party (including the Employer) relating to the Offer. The
Employer and the Plan Administrator shall provide the Trustee
with such information and assistance as the Trustee may
reasonably request in connection with any communications or
distributions to Participants. In no event shall the
communications to Participants by the offeror, the Employer or
other interested parties or public communications directed
generally to the owners of the Qualifying Employer Securities
which are the subject of an Offer be deemed to be interference in
the making of an Investment Decision by any Participant;
provided, however, that ERISA Section 510 shall apply to any
communication which threatens or intimates that actions which
would violate ERISA Section 510 will or might be taken with
respect to any Participant who does not make an Investment
Decision in accord with the wishes of the Employer.
(6) In the event a court of competent jurisdiction shall issue to the
Plan, the Employer or the Trustee an opinion or order, which
shall, in the opinion of counsel to the Employer or the Trustee,
invalidate under ERISA, in all circumstances or in any particular
circumstances, any provision or provisions of this subsection (a)
regarding the determination to be made as to whether or not
Qualifying Employer Securities held by the Trustee shall be
tendered pursuant to an Offer or cause any such provision or
provisions to conflict with ERISA, then, upon notice thereof to
the Employer or the Trustee, as the case may be, such invalid or
conflicting provisions of this subsection (a) shall be given no
further force or effect. In such circumstances the Trustee shall
have no discretion to tender or not to tender Qualifying Employer
Securities held in the Trust unless required under such order or
opinion, but shall follow instructions received from
Participants, to the extent such instructions have not been
invalidated by
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such order or opinion. To the extent required to exercise any
residual fiduciary responsibility with respect to such sale,
exchange or transfer, the Trustee shall take into account in
exercising its fiduciary judgment, unless it is clearly imprudent
to do so, directions timely received from Participants, as such
directions are most indicative of what action is in the best
interests of Participants. Further, the Trustee, in addition to
taking into consideration any relevant financial factors bearing
on any such decision, shall take into consideration any relevant
non-financial factors, including but not limited to, the
continuing job security of Participants as employees of the
Employer or any of its subsidiaries, conditions of employment,
employment opportunities and other similar matters, and the
prospect of the Participants and prospective Participants for
future benefits under the Plan (including any subsequent release
and allocation of Qualifying Employer Securities held in the
Unallocated Reserve).
(7) Notwithstanding anything elsewhere in this Plan or Trust
Agreement to the contrary, any proceeds received by the Trustee
as a result of the sale, exchange or transfer of Qualifying
Employer Securities pursuant to an Offer shall be reinvested in
Qualifying Employer Securities by the Trustee, if such securities
are available for purchase and if not, to the extent attributable
to unallocated stock in the Unallocated Reserve, shall be used to
pay down the Exempt Loan. The balance of the proceeds, if any,
and the proceeds attributable to allocated Qualifying Employer
Securities shall be invested in short-term, fixed income
investments selected by the Trustee and having a maturity of not
more than two years from the time such investment is made until
the Trustee is otherwise directed by the Plan Administrator or
until the Participants to whose accounts such investments are
allocated shall be entitled to make investment elections with
respect to such accounts in accordance with the Plan.
(b) Voting Employer Securities; Options and Other Rights.
(1) Notwithstanding any other provision of this Plan to the contrary,
if any, the Trustee shall have no discretion or authority to vote
Qualifying Employer Securities held in the Trust by the Trustee
on any matter presented for a vote by the stockholders of the
Employer except in accordance with timely directions received by
the Trustee from Participants who have Qualifying Employer
Securities allocated to their Accounts under the Plan. Such
directions shall be given by Participants acting in their
capacity as named fiduciaries with respect to both allocated and
unallocated Qualifying Employer Securities and, upon timely
receipt of such instructions, the Trustee shall vote the
Qualifying Employer Securities held in the Trust pursuant to the
directions of Participants giving instructions to the Trustee as
set forth below.
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(i) Qualifying Employer Securities in Accounts. Each
Participant who has Qualifying Employer Securities
allocated to his or her Account shall provide directions to
the Trustee on any matter to be presented for a vote by the
stockholders of the Employer with respect to Qualifying
Employer Securities allocated to the Account of the
Participant under the Plan and the Trustee shall follow
such directions.
With respect to Qualifying Employer Securities in any
Account for which no instructions were timely received by
the Trustee, the Trustee shall vote such Qualifying
Employer Securities in accordance with the directions of
the Participants who gave timely instructions to the
Trustee, in the same manner and in the same proportion to
the voting of Participants on such Qualifying Employer
Securities with respect to which timely instructions were
given.
(ii) Qualifying Employer Securities in the Unallocated Reserve
and other Unallocated Qualifying Employer Securities. Each
Participant who has been allocated Qualifying Employer
Securities to his or her Account shall, as named fiduciary,
direct the Trustee with respect to the vote of Qualifying
Employer Securities held by the Trustee in the Unallocated
Reserve and all other unallocated Qualifying Employer
Securities, and the Trustee shall follow the directions of
those Participants who provide timely instructions to the
Trustee. Each Participant who has been allocated Qualifying
Employer Securities to his or her Account entitled to vote
on any matter presented for a vote by the stockholders
shall separately direct the Trustee with respect to the
vote of a portion of the shares of Qualifying Employer
Securities that are not allocated to the Account of any
Participant or for which no instructions were timely
received by the Trustee, whether or not allocated to the
Account of any Participant. Such direction shall be with
respect to such number of votes equal to the total number
of votes attributable to Qualifying Employer Securities not
allocated or with respect to which no responses were
received multiplied by a fraction the numerator of which is
the number of votes attributable to such Qualifying
Employer Securities allocated to the Participant's Account
and the denominator of which is the total number of votes
attributable to such Qualifying Employer Securities
allocated to the Account of all such Participants who have
provided directions to the Trustee under this subparagraph.
(iii) The Trustee shall use its best efforts to communicate or
cause to be communicated to all Participants the provisions
of this Plan and the
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Trust Agreement relating to the right of Participants to
direct the Trustee with respect to the voting of Qualifying
Employer Securities allocated to their Accounts under the
Plan and of Qualifying Employer Securities not allocated to
the Account of any Participant. The Trustee shall use its
best efforts to distribute or cause to be distributed to
Participants all communications directed generally to the
owners of Qualifying Employer Securities entitled to vote,
and the Trustee shall use its best efforts to distribute or
cause to be distributed to Participants all communications
that the Trustee may receive, if any, from any person
soliciting proxies or any other interested party (including
the Employer) relating to the matters being presented for a
vote by the stockholders of the Employer. The Employer and
the Plan Administrator shall provide the Trustee with such
information and assistance as the Trustee may reasonably
request in connection with any communications or
distributions to Participants. In no event shall the
communications to Participants with respect to matters
being presented for a vote at a meeting of the stockholders
of the Employer by the Employer or other interested parties
or public communications directed generally to the
stockholders of the Employer be deemed to be interference
in the making of a decision by any Participant as to the
voting of Qualifying Employer Securities; provided,
however, that ERISA Section 510 shall apply to any
communication which threatens or intimates that actions
which would violate ERISA Section 510 will or might be
taken with respect to any Participant who does not issue
directions to the Trustee in accord with the wishes of the
Employer.
(iv) In the event a court of competent jurisdiction shall issue
an opinion or order to the Plan, the Employer or the
Trustee which shall, in the opinion of counsel to the
Employer or the Trustee, invalidate under ERISA, in all
circumstances or in any particular circumstances, any
provision or provisions of this subsection (b) regarding
the manner in which Qualifying Employer Securities held in
the Trust shall be voted or cause any such provision or
provisions to conflict with ERISA, then, upon notice
thereof to the Employer or the Trustee, as the case may be,
such invalid or conflicting provision of this subsection
(b) shall be given no further force or effect. In such
circumstances the Trustee shall nevertheless have no
discretion to vote Qualifying Employer Securities held in
the Trust unless required under such order or opinion but
shall follow instructions received from Participants, to
the extent such instructions have not been invalidated. To
the extent required to exercise any residual fiduciary
responsibility with respect to voting, the Trustee shall
take into account in exercising its fiduciary judgment,
unless it is
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clearly imprudent to do so, directions timely received from
Participants, as such directions are most indicative of
what is in the best interests of Participants. Further, the
Trustee, in addition to taking into consideration any
relevant financial factors bearing on any such decision,
shall take into consideration any relevant non-financial
factors, including but not limited to, the continuing job
security of Participants as employees of the Employer or
any of its subsidiaries, conditions of employment,
employment opportunities and other similar matters, and the
prospect of the Participants and prospective Participants
for future benefits under the Plan (including any
subsequent release and allocation of Qualifying Employer
Securities held in the Unallocated Reserve).
(2) In the event that any option, right, warrant or similar property
derived from or attributable to the ownership of Qualifying
Employer Securities shall be granted, distributed or otherwise
issued which is and shall become exercisable, each Participant
shall be entitled, subject to the provisions set forth below, to
direct the Trustee to sell, exercise, distribute or retain any
such option, right, warrant or similar property. For such purpose
there shall be furnished to each Participant, on a timely and
confidential basis, a form to be returned to the Trustee on which
he or she may set forth his or her direction whether to sell,
exercise, distribute or retain part or all of such option, right,
warrant or similar property. Upon timely receipt of such form or
other appropriate written direction, the Trustee shall follow
such direction to sell, exercise, distribute or retain part or
all of any such options, rights, warrants or similar property
and, if such direction is to retain the same, the Trustee shall
follow any later appropriate written directions to sell, exercise
or distribute such options, rights, warrants or similar property
upon receipt thereof. If a Participant shall direct the Trustee
to exercise part or all of such options, rights, warrants or
similar property, the Trustee shall accumulate the amount equal
to the consideration necessary to exercise, from among the
following sources by obtaining appropriate written direction and
authorization from the Participant respecting one or more of (i)
if and to the extent necessary, the transfer and use, as he or
she may designate, of the balance of his or her Account that is
not invested in Qualifying Employer Securities; and (ii) if and
to the extent necessary, the sale of part of his or her options,
rights, warrants or similar property, and use of the proceeds
thereof to exercise the remaining options, rights, warrants or
similar property which he or she has directed to be exercised.
The securities acquired by the Trustee upon such exercise shall
be held in a special account or accounts established in the Trust
at that time. If a Participant shall direct the Trustee to
distribute to him or her any such options, rights, warrants or
similar property, the Trustee shall distribute such options,
rights, warrants or similar property provided, as certified by
the Plan Administrator, (a) the Participant is age
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65 or more or has five or more years of Vesting Service and (b)
such distribution will not adversely affect the continued
qualified status of the Plan or continued exempt status of the
Trust under the Code. If a Participant fails or refuses to file,
with the Plan Administrator, an election not to withhold any
Federal taxes upon such distribution, the Trustee shall be deemed
to be authorized, to the extent necessary, as instructed by the
Plan Administrator, to sell part of such options, rights,
warrants, or similar property and use the proceeds therefrom to
pay all applicable Federal withholding taxes due in connection
with such distribution. Upon any such distribution, the Trustee
shall report the same to the Plan Administrator to permit
compliance with the applicable reporting provisions of the Code.
For all Plan purposes, all options, rights, warrants or similar
property described in this paragraph (2) of subsection (b)
hereof, shall be treated as income added to the appropriate
Accounts of Participants. If, within a reasonable period of time
after the form soliciting direction from a Participant has been
sent, no written direction shall have been received by the
Trustee from him or her, the Trustee shall, in its sole
discretion, sell, exercise or retain and keep unproductive of
income such option, right, warrant or similar property for which
no response has been received from such Participant and also for
options, rights, warrants or similar property derived from, or
attributable to, the ownership of Qualifying Employer Securities
not yet allocated to any Participant's Account.
In addition the Trustee shall, in its sole discretion, sell,
exercise or retain and keep unproductive of income such option,
right, warrant or similar property attributable to unallocated
Qualifying Employer Securities held in the Unallocated Reserve or
other Account. In the event of a discretionary decision by the
Trustee to exercise, the Trustee shall be deemed to be authorized
to accumulate the amount equal to the consideration necessary to
exercise from any of the sources specified herein and to hold
such acquired securities in the Trust as specified herein. In
connection with any discretionary decisions by the Trustee to
sell, exercise or retain and keep unproductive of income any such
option, right, warrant or similar property, the Trustee shall
consider, in addition to any relevant financial factors, such as
those set out in subparagraph (b)(1)(iv), all as evidenced by the
proportion of the directions received from Participants to either
sell, exercise or retain such options, rights, warrants or
similar property, and shall also consider such other factors as
the Trustee may deem relevant.
(c) Beneficiaries and Alternate Payees. For purposes of this section,
references to a Participant include a Beneficiary of a deceased
Participant and an Alternate Payee under a qualified domestic
relations order.
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01--AMENDMENTS.
The Employer may amend this Plan at any time, including any remedial
retroactive changes (within the time specified by Internal Revenue Service
regulations), to comply with any law or regulation issued by any governmental
agency to which the Plan is subject.
An amendment may not diminish or adversely affect any accrued interest or
benefit of Participants or their Beneficiaries nor allow reversion or diversion
of Plan assets to the Employer at any time, except as may be required to comply
with any law or regulation issued by any governmental agency to which the Plan
is subject.
No amendment to this Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. However, a Participant's
Account may be reduced to the extent permitted under Code Section 412(c)(8). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account with respect to benefits attributable to service before
the amendment shall be treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of the Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his employer-derived accrued benefit shall not be less
than his percentage computed under the Plan without regard to such amendment.
No amendment to the Plan shall be effective to eliminate or restrict an
optional form of benefit with respect to benefits attributable to service before
the amendment except as provided in the MERGERS AND DIRECT TRANSFERS SECTION of
this article and below:
(a) The Plan is amended to eliminate or restrict the ability of a
Participant to receive payment of his Account balance under a
particular optional form of benefit and the amendment satisfies the
condition in (1) and the Plan satisfies the condition in (2) below:
(1) The amendment provides a single sum distribution form that is
otherwise identical to the optional form of benefit eliminated or
restricted. For purposes of this condition (1), a single sum
distribution form is otherwise identical only if it is identical
in all respects to the eliminated or restricted optional form of
benefit (or would be identical except that it provides greater
rights to the Participant) except with respect to the timing of
payments after commencement.
(2) The Plan provides that the amendment shall not apply to any
distribution with an Annuity Starting Date earlier than the
earlier of:
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(i) the 90th day after the date the Participant receiving the
distribution has been furnished a summary that reflects the
amendment and that satisfies the ERISA requirements at 29
CFR 2520.104b-3 relating to a summary of material
modifications, or
(ii) the first day of the second Plan Year following the Plan
Year in which the amendment is adopted.
(b) The Plan is amended to eliminate or restrict in-kind distributions and
the conditions in Q&A 2(b)(2)(iii) in section 1.411(d)-4 of the
regulations are met.
If, as a result of an amendment, an Employer Contribution is removed that
is not 100% immediately vested when made, the applicable vesting schedule shall
remain in effect after the date of such amendment. The Participant shall not
become immediately 100% vested in such Contributions as a result of the
elimination of such Contribution except as otherwise specifically provided in
the Plan.
An amendment shall not decrease a Participant's vested interest in the
Plan. If an amendment to the Plan, or a deemed amendment in the case of a change
in top-heavy status of the Plan as provided in the MODIFICATION OF VESTING
REQUIREMENTS SECTION of Article XI, changes the computation of the percentage
used to determine that portion of a Participant's Account attributable to
Employer Contributions which is nonforfeitable (whether directly or indirectly),
each Participant or former Participant
(c) who has completed at least three Years of Service on the date the
election period described below ends (five Years of Service if the
Participant does not have at least one Hour-of-Service in a Plan Year
beginning after December 31, 1988) and
(d) whose nonforfeitable percentage will be determined on any date after
the date of the change
may elect, during the election period, to have the nonforfeitable percentage of
his Account that results from Employer Contributions determined without regard
to the amendment. This election may not be revoked. If after the Plan is
changed, the Participant's nonforfeitable percentage will at all times be as
great as it would have been if the change had not been made, no election needs
to be provided. The election period shall begin no later than the date the Plan
amendment is adopted, or deemed adopted in the case of a change in the top-heavy
status of the Plan, and end no earlier than the 60th day after the latest of the
date the amendment is adopted (deemed adopted) or becomes effective, or the date
the Participant is issued written notice of the amendment (deemed amendment) by
the Employer or the Plan Administrator.
SECTION 10.02--DIRECT ROLLOVERS.
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this section, a Distributee may
elect, at the time and in the manner
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prescribed by the Plan Administrator, to have any portion of an Eligible
Rollover Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
Any distributions made under the SMALL AMOUNTS SECTION of this article (or
which are small amounts payments made under Article VIII at complete termination
of the Plan) which are Eligible Rollover Distributions and for which the
Distributee has not elected to either have such distribution paid to him or to
an Eligible Retirement Plan shall be paid to the Distributee.
SECTION 10.03--MERGERS AND DIRECT TRANSFERS.
The Plan may not be merged or consolidated with, nor have its assets or
liabilities transferred to, any other retirement plan, unless each Participant
in the plan would (if the plan then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to or greater than
the benefit the Participant would have been entitled to receive immediately
before the merger, consolidation, or transfer (if this Plan had then
terminated). The Employer may enter into merger agreements or direct transfer of
assets agreements with the employers under other retirement plans which are
qualifiable under Code Section 401(a), including an elective transfer, and may
accept the direct transfer of plan assets, or may transfer plan assets, as a
party to any such agreement. The Employer shall not consent to, or be a party to
a merger, consolidation, or transfer of assets with a defined benefit plan if
such action would result in a defined benefit feature being maintained under
this Plan.
Notwithstanding any provision of the Plan to the contrary, to the extent
any optional form of benefit under the Plan permits a distribution prior to the
Employee's retirement, death, disability, or severance from employment, and
prior to plan termination, the optional form of benefit is not available with
respect to benefits attributable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the meaning of Code
Section 414(l), to this Plan from a money purchase pension plan qualified under
Code Section 401(a) (other than any portion of those assets and liabilities
attributable to voluntary employee contributions).
The Plan may accept a direct transfer of plan assets on behalf of an
Eligible Employee. If the Eligible Employee is not an Active Participant when
the transfer is made, the Eligible Employee shall be deemed to be an Active
Participant only for the purpose of investment and distribution of the
transferred assets. Employer Contributions shall not be made for or allocated to
the Eligible Employee, until the time he meets all of the requirements to become
an Active Participant.
The Plan shall hold, administer, and distribute the transferred assets as a
part of the Plan. The Plan shall maintain a separate account for the benefit of
the Employee on whose behalf the Plan accepted the transfer in order to reflect
the value of the transferred assets.
Unless a transfer of assets to the Plan is an elective transfer as
described below, the Plan shall apply the optional forms of benefit protections
described in the AMENDMENTS SECTION of this article to all transferred assets.
A Participant's protected benefits may be eliminated upon transfer between
qualified defined
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contribution plans if the conditions in Q&A 3(b)(1) in section 1.411(d)-4 of the
regulations are met. The transfer must meet all of the other applicable
qualification requirements.
A Participant's protected benefits may be eliminated upon transfer between
qualified plans (both defined benefit and defined contribution) if the
conditions in Q&A 3(c)(1) in section 1.411(d)-4 of the regulations are met.
Beginning January 1, 2002, if the Participant is eligible to receive an
immediate distribution of his entire nonforfeitable accrued benefit in a single
sum distribution that would consist entirely of an eligible rollover
distribution under Code Section 401(a)(31), such transfer will be accomplished
as a direct rollover under Code Section 401(a)(31). The rules applicable to
distributions under the plan would apply to the transfer, but the transfer would
not be treated as a distribution for purposes of the minimum distribution
requirements of Code Section 401(a)(9).
SECTION 10.04--PROVISIONS RELATING TO THE INSURER AND OTHER PARTIES.
The obligations of an Insurer shall be governed solely by the provisions of
the Annuity Contract. The Insurer shall not be required to perform any act not
provided in or contrary to the provisions of the Annuity Contract. Each Annuity
Contract when purchased shall comply with the Plan. See the CONSTRUCTION SECTION
of this article.
Any issuer or distributor of investment contracts or securities is governed
solely by the terms of its policies, written investment contract, prospectuses,
security instruments, and any other written agreements entered into with the
Trustee with regard to such investment contracts or securities.
Such Insurer, issuer or distributor is not a party to the Plan, nor bound
in any way by the Plan provisions. Such parties shall not be required to look to
the terms of this Plan, nor to determine whether the Employer, the Plan
Administrator, the Trustee, or the Named Fiduciary have the authority to act in
any particular manner or to make any contract or agreement.
Until notice of any amendment or termination of this Plan or a change in
Trustee has been received by the Insurer at its home office or an issuer or
distributor at their principal address, they are and shall be fully protected in
assuming that the Plan has not been amended or terminated and in dealing with
any party acting as Trustee according to the latest information which they have
received at their home office or principal address.
SECTION 10.05--EMPLOYMENT STATUS.
Nothing contained in this Plan gives an Employee the right to be retained
in the Employer's employ or to interfere with the Employer's right to discharge
any Employee.
SECTION 10.06--RIGHTS TO PLAN ASSETS.
An Employee shall not have any right to or interest in any assets of the
Plan upon termination of employment or otherwise except as specifically provided
under this Plan, and then only to the extent of the benefits payable to such
Employee according to the Plan provisions.
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Any final payment or distribution to a Participant or his legal
representative or to any Beneficiaries, spouse or Contingent Annuitant of such
Participant under the Plan provisions shall be in full satisfaction of all
claims against the Plan, the Named Fiduciary, the Plan Administrator, the
Insurer, the Trustee, and the Employer arising under or by virtue of the Plan.
SECTION 10.07--BENEFICIARY.
Each Participant may name a Beneficiary to receive any death benefit (other
than any income payable to a Contingent Annuitant) that may arise out of his
participation in the Plan. The Participant may change his Beneficiary from time
to time. Unless a qualified election has been made, for purposes of distributing
any death benefits before the Participant's Retirement Date, the Beneficiary of
a Participant who has a spouse who is entitled to a Qualified Preretirement
Survivor Annuity shall be the Participant's spouse. The Participant's
Beneficiary designation and any change of Beneficiary shall be subject to the
provisions of the ELECTION PROCEDURES SECTION of Article VI. It is the
responsibility of the Participant to give written notice to the Insurer of the
name of the Beneficiary on a form furnished for that purpose.
With the Employer's consent, the Plan Administrator may maintain records of
Beneficiary designations for Participants before their Retirement Dates. In that
event, the written designations made by Participants shall be filed with the
Plan Administrator. If a Participant dies before his Retirement Date, the Plan
Administrator shall certify to the Insurer the Beneficiary designation on its
records for the Participant.
If there is no Beneficiary named or surviving when a Participant dies, the
Participant's Beneficiary shall be the Participant's surviving spouse, or where
there is no surviving spouse, the executor or administrator of the Participant's
estate.
SECTION 10.08--NONALIENATION OF BENEFITS.
Benefits payable under the Plan are not subject to the claims of any
creditor of any Participant, Beneficiary, spouse or Contingent Annuitant. A
Participant, Beneficiary, spouse or Contingent Annuitant does not have any
rights to alienate, anticipate, commute, pledge, encumber, or assign any of such
benefits, except in the case of a loan as provided in the LOANS TO PARTICIPANTS
SECTION of Article V. The preceding sentences shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant according to a domestic relations order, unless such order is
determined by the Plan Administrator to be a qualified domestic relations order,
as defined in Code Section 414(p), or any domestic relations order entered
before January 1, 1985. The preceding sentences shall not apply to any offset of
a Participant's benefits provided under the Plan against an amount the
Participant is required to pay the Plan with respect to a judgement, order, or
decree issued, or a settlement entered into, on or after August 5, 1997, which
meets the requirements of Code Sections 401(a)(13)(C) or (D).
SECTION 10.09--CONSTRUCTION.
The validity of the Plan or any of its provisions is determined under and
construed according
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to Federal law and, to the extent permissible, according to the laws of the
state in which the Employer has its principal office. In case any provision of
this Plan is held illegal or invalid for any reason, such determination shall
not affect the remaining provisions of this Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had never been
included.
In the event of any conflict between the provisions of the Plan and the
terms of any Annuity Contract or Insurance Policy issued hereunder, the
provisions of the Plan control.
SECTION 10.10--LEGAL ACTIONS.
No person employed by the Employer; no Participant, former Participant, or
their Beneficiaries; nor any other person having or claiming to have an interest
in the Plan is entitled to any notice of process. A final judgment entered in
any such action or proceeding shall be binding and conclusive on all persons
having or claiming to have an interest in the Plan.
SECTION 10.11--SMALL AMOUNTS.
If consent of the Participant is not required for a benefit which is
immediately distributable in the ELECTION PROCEDURES SECTION of Article VI, a
Participant's entire Vested Account shall be paid in a single sum as of the
earliest of his Retirement Date, the date he dies, or the date he ceases to be
an Employee for any other reason (the date the Employer provides notice to the
record keeper of the Plan of such event, if later). For purposes of this
section, if the Participant's Vested Account is zero, the Participant shall be
deemed to have received a distribution of such Vested Account. If a Participant
would have received a distribution under the first sentence of this paragraph
but for the fact that the Participant's consent was needed to distribute a
benefit which is immediately distributable, and if at a later time consent would
not be needed to distribute a benefit which is immediately distributable and
such Participant has not again become an Employee, such Vested Account shall be
paid in a single sum. This is a small amounts payment.
If a small amounts payment is made as of the date the Participant dies, the
small amounts payment shall be made to the Participant's Beneficiary (spouse if
the death benefit is payable to the spouse). If a small amounts payment is made
while the Participant is living, the small amounts payment shall be made to the
Participant. The small amounts payment is in full settlement of benefits
otherwise payable.
No other small amounts payments shall be made.
SECTION 10.12--WORD USAGE.
The masculine gender, where used in this Plan, shall include the feminine
gender and the singular words, as used in this Plan, may include the plural,
unless the context indicates otherwise.
The words "in writing" and "written," where used in this Plan, shall
include any other forms, such as voice response or other electronic system, as
permitted by any governmental agency to which the Plan is subject.
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SECTION 10.13--CHANGE IN SERVICE METHOD.
(a) Change of Service Method Under This Plan. If this Plan is amended to
change the method of crediting service from the elapsed time method to
the hours method for any purpose under this Plan, the Employee's
service shall be equal to the sum of (1), (2), and (3) below:
(1) The number of whole years of service credited to the Employee
under the Plan as of the date the change is effective.
(2) One year of service for the applicable computation period in
which the change is effective if he is credited with the required
number of Hours-of-Service. If the Employer does not have
sufficient records to determine the Employee's actual
Hours-of-Service in that part of the service period before the
effective date of the change, the Hours-of-Service shall be
determined using an equivalency. For any month in which he would
be required to be credited with one Hour-of-Service, the Employee
shall be deemed for purposes of this section to be credited with
190 Hours-of-Service.
(3) The Employee's service determined under this Plan using the hours
method after the end of the computation period in which the
change in service method was effective.
If this Plan is amended to change the method of crediting service from
the hours method to the elapsed time method for any purpose under this
Plan, the Employee's service shall be equal to the sum of (4), (5),
and (6) below:
(4) The number of whole years of service credited to the Employee
under the Plan as of the beginning of the computation period in
which the change in service method is effective.
(5) the greater of (i) the service that would be credited to the
Employee for that entire computation period using the elapsed
time method or (ii) the service credited to him under the Plan as
of the date the change is effective.
(6) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable computation
period in which the change in service method was effective.
(b) Transfers Between Plans with Different Service Methods. If an Employee
has been a participant in another plan of the Employer which credited
service under the elapsed time method for any purpose which under this
Plan is determined using the hours method, then the Employee's service
shall be equal to the sum of (1), (2), and (3) below:
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(1) The number of whole years of service credited to the Employee
under the plan as of the date he became an Eligible Employee
under this Plan.
(2) One year of service for the applicable computation period in
which he became an Eligible Employee if he is credited with the
required number of Hours-of-Service. If the Employer does not
have sufficient records to determine the Employee's actual
Hours-of-Service in that part of the service period before the
date he became an Eligible Employee, the Hours-of-Service shall
be determined using an equivalency. For any month in which he
would be required to be credited with one Hour-of-Service, the
Employee shall be deemed for purposes of this section to be
credited with 190 Hours-of-Service.
(3) The Employee's service determined under this Plan using the hours
method after the end of the computation period in which he became
an Eligible Employee.
If an Employee has been a participant in another plan of the Employer
which credited service under the hours method for any purpose which
under this Plan is determined using the elapsed time method, then the
Employee's service shall be equal to the sum of (4), (5), and (6)
below:
(4) The number of whole years of service credited to the Employee
under the other plan as of the beginning of the computation
period under that plan in which he became an Eligible Employee
under this Plan.
(5) The greater of (i) the service that would be credited to the
Employee for that entire computation period using the elapsed
time method or (ii) the service credited to him under the other
plan as of the date he became an Eligible Employee under this
Plan.
(6) The Employee's service determined under this Plan using the
elapsed time method after the end of the applicable computation
period under the other plan in which he became an Eligible
Employee.
If an Employee has been a participant in a Controlled Group member's plan
which credited service under a different method than is used in this Plan, in
order to determine entry and vesting, the provisions in (b) above shall apply as
though the Controlled Group member's plan were a plan of the Employer.
Any modification of service contained in this Plan shall be applicable to
the service determined pursuant to this section.
SECTION 10.14--MILITARY SERVICE.
Notwithstanding any provision of this Plan to the contrary, the Plan shall
provide contributions,
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benefits, and service credit with respect to qualified military service in
accordance with Code Section 414(u). Loan repayments shall be suspended under
this Plan as permitted under Code Section 414(u).
ARTICLE XI
TOP-HEAVY PLAN REQUIREMENTS
SECTION 11.01--APPLICATION.
The provisions of this article shall supersede all other provisions in the
Plan to the contrary.
For the purpose of applying the Top-heavy Plan requirements of this
article, all members of the Controlled Group shall be treated as one Employer.
The term Employer, as used in this article, shall be deemed to include all
members of the Controlled Group, unless the term as used clearly indicates only
the Employer is meant.
The accrued benefit or account of a participant which results from
deductible employee contributions shall not be included for any purpose under
this article.
The minimum vesting and contribution provisions of the MODIFICATION OF
VESTING REQUIREMENTS and MODIFICATION OF CONTRIBUTIONS SECTIONS of this article
shall not apply to any Employee who is included in a group of Employees covered
by a collective bargaining agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and one or more
employers, including the Employer, if there is evidence that retirement benefits
were the subject of good faith bargaining between such representatives. For this
purpose, the term "employee representatives" does not include any organization
more than half of whose members are employees who are owners, officers, or
executives.
SECTION 11.02--DEFINITIONS.
For purposes of this article the following terms are defined:
Aggregation Group means:
(a) each of the Employer's qualified plans in which a Key Employee is a
participant during the Plan Year containing the Determination Date
(regardless of whether the plan was terminated) or one of the four
preceding Plan Years,
(b) each of the Employer's other qualified plans which allows the plan(s)
described in (a) above to meet the nondiscrimination requirement of
Code Section 401(a)(4) or the minimum coverage requirement of Code
Section 410, and
(c) any of the Employer's other qualified plans not included in (a) or (b)
above which the Employer desires to include as part of the Aggregation
Group. Such a qualified plan shall be included only if the Aggregation
Group would continue to satisfy the
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requirements of Code Section 401(a)(4) and Code Section 410.
The plans in (a) and (b) above constitute the "required" Aggregation Group.
The plans in (a), (b), and (c) above constitute the "permissive"
Aggregation Group.
Compensation means compensation as defined in the CONTRIBUTION LIMITATION
SECTION of Article III. For purposes of determining who is a Key Employee in
years beginning before January 1, 1998, Compensation shall include, in addition
to compensation as defined in the CONTRIBUTION LIMITATION SECTION of Article
III, elective contributions. Elective contributions are amounts excludible from
the gross income of the Employee under Code Sections 125, 402(e)(3),
402(h)(1)(B), or 403(b), and contributed by the Employer, at the Employee's
election, to a Code Section 401(k) arrangement, a simplified employee pension,
cafeteria plan, or tax-sheltered annuity. Elective contributions also include
amounts deferred under a Code Section 457 plan maintained by the Employer.
Determination Date means as to any plan, for any plan year subsequent to
the first plan year, the last day of the preceding plan year. For the first plan
year of the plan, the last day of that year.
Key Employee means any Employee or former Employee (and the Beneficiaries
of such Employee) who at any time during the determination period was:
(a) an officer of the Employer if such individual's annual Compensation
exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A),
(b) an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the Employer if such individual's annual
Compensation exceeds 100 percent of the dollar limitation under Code
Section 415(c)(1)(A),
(c) a 5-percent owner of the Employer, or
(d) a 1-percent owner of the Employer who has annual Compensation of more
than $150,000.
The determination period is the Plan Year containing the Determination Date
and the four preceding Plan Years.
The determination of who is a Key Employee shall be made according to Code
Section 416(i)(1) and the regulations thereunder.
Non-key Employee means any Employee who is not a Key Employee.
Present Value means the present value of a participant's accrued benefit
under a defined benefit plan. For purposes of establishing Present Value to
compute the Top-heavy Ratio, any benefit shall be discounted only for 7.5%
interest and mortality according to the 1971 Group Annuity Table (Male) without
the 7% margin but with projection by Scale E from 1971 to the later of (a) 1974,
or (b) the year
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determined by adding the age to 1920, and wherein for females the male age six
years younger is used.
Top-heavy Plan means a plan which is top-heavy for any plan year beginning
after December 31, 1983. This Plan shall be top-heavy if any of the following
conditions exist:
(a) The Top-heavy Ratio for this Plan exceeds 60 percent and this Plan is
not part of any required Aggregation Group or permissive Aggregation
Group.
(b) This Plan is a part of a required Aggregation Group, but not part of a
permissive Aggregation Group, and the Top-heavy Ratio for the required
Aggregation Group exceeds 60 percent.
(c) This 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 percent.
Top-heavy Ratio means:
(a) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer has
not maintained any defined benefit plan which during the five-year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top-heavy Ratio for this Plan alone or for the required
or permissive Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of the account balances of all Key
Employees as of the Determination Date(s) (including any part of any
account balance distributed in the five-year period ending on the
Determination Date(s)), and the denominator of which is the sum of all
account balances (including any part of any account balance
distributed in the five-year period ending on the Distribution
Date(s)), both computed in accordance with Code Section 416 and the
regulations thereunder. Both the numerator and denominator of the
Top-heavy Ratio are increased to reflect any contribution not actually
made as of the Determination Date, but which is required to be taken
into account on that date under Code Section 416 and the regulations
thereunder.
(b) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans which
during the five-year period ending on the Determination Date(s) has or
has had accrued benefits, the Top-heavy Ratio for any required 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 of all Key Employees
determined in accordance with (a) above, and the Present
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Value of accrued benefits under the aggregated defined benefit plan or
plans for all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the account balances under the
aggregated defined contribution plan or plans for all participants,
determined in accordance with (a) above, and the Present Value of
accrued benefits under the defined benefit plan or plans for all
participants as of the Determination Date(s), all determined in
accordance with Code Section 416 and the regulations thereunder. The
accrued benefits under a defined benefit plan in both the numerator
and denominator of the Top-heavy Ratio are increased for any
distribution of an accrued benefit made in the five-year period ending
on the Determination Date.
(c) For purposes of (a) and (b) 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 or ends with the 12-month
period ending on the Determination Date, except as provided in Code
Section 416 and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and accrued
benefits of a participant (i) who is not a Key Employee but who was a
Key Employee in a prior year or (ii) who has not been credited with at
least an hour of service with any employer maintaining the plan at any
time during the five-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 Code Section 416 and the
regulations thereunder. Deductible employee contributions will not be
taken into account for purposes of computing the Top-heavy Ratio. When
aggregating plans, the value of account balances and accrued benefits
will be calculated with reference to the Determination Dates that fall
within the same calendar year.
The accrued benefit of a participant other than a Key Employee shall
be determined under (i) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
Employer, or (ii) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).
SECTION 11.03--MODIFICATION OF VESTING REQUIREMENTS.
If a Participant's Vesting Percentage determined under Article I is not at
least as great as his Vesting Percentage would be if it were determined under a
schedule permitted in Code Section 416, the following shall apply. During any
Plan Year in which the Plan is a Top-heavy Plan, the Participant's Vesting
Percentage for Employer Contributions other than ESOP Non-Matching Contributions
shall be the greater of the Vesting Percentage determined under Article I or the
schedule below.
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
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During any Plan Year in which the Plan is a Top-heavy Plan, the Participant's
Vesting Percentage for ESOP Non-Matching Contributions shall be the greater of
the Vesting Percentage determined under Article I or the schedule below.
VESTING SERVICE NONFORFEITABLE
(whole years) PERCENTAGE
Less than 2 0
2 20
3 40
4 60
5 or more 100
The schedules above shall not apply to Participants who are not credited
with an Hour-of-Service after the Plan first becomes a Top-heavy Plan. The
Vesting Percentages determined above apply to the portion of the Participant's
Account which is multiplied by a Vesting Percentage to determine his Vested
Account, including benefits accrued before the effective date of Code Section
416 and benefits accrued before this Plan became a Top-heavy Plan.
If, in a later Plan Year, this Plan is not a Top-heavy Plan, a
Participant's Vesting Percentages shall be determined under Article I. A
Participant's Vesting Percentages determined under either Article I or the
schedule above shall never be reduced and the election procedures of the
AMENDMENTS SECTION of Article X shall apply when changing to or from the
schedule as though the automatic change were the result of an amendment.
The part of the Participant's Vested Account resulting from the minimum
contributions required pursuant to the MODIFICATION OF CONTRIBUTIONS SECTION of
this article (to the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or (D).
SECTION 11.04--MODIFICATION OF CONTRIBUTIONS.
During any Plan Year in which this Plan is a Top-heavy Plan, the Employer
shall make a minimum contribution as of the last day of the Plan Year for each
Non-key Employee who is an Employee on the last day of the Plan Year and who was
an Active Participant at any time during the Plan Year. A Non-key Employee is
not required to have a minimum number of Hours-of-Service or minimum amount of
Compensation in order to be entitled to this minimum. A Non-key Employee who
fails to be an Active Participant merely because his Compensation is less than a
stated amount or merely because of a failure to make mandatory participant
contributions or, in the case of a cash or deferred arrangement, elective
contributions shall be treated as if he were an Active Participant. The minimum
is the lesser of (a) or (b) below:
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(a) 3 percent of such person's Compensation for such Plan Year.
(b) The "highest percentage" of Compensation for such Plan Year at which
the Employer's contributions are made for or allocated to any Key
Employee. The highest percentage shall be determined by dividing the
Employer Contributions made for or allocated to each Key Employee
during the Plan Year by the amount of his Compensation for such Plan
Year, and selecting the greatest quotient (expressed as a percentage).
To determine the highest percentage, all of the Employer's defined
contribution plans within the Aggregation Group shall be treated as
one plan. The minimum shall be the amount in (a) above if this Plan
and a defined benefit plan of the Employer are required to be included
in the Aggregation Group and this Plan enables the defined benefit
plan to meet the requirements of Code Section 401(a)(4) or 410.
For purposes of (a) and (b) above, Compensation shall be limited by Code
Section 401(a)(17).
If the Employer's contributions and allocations otherwise required under
the defined contribution plan(s) are at least equal to the minimum above, no
additional contribution shall be required. If the Employer's total contributions
and allocations are less than the minimum above, the Employer shall contribute
the difference for the Plan Year.
The minimum contribution applies to all of the Employer's defined
contribution plans in the aggregate which are Top-heavy Plans. A minimum
contribution under a profit sharing plan shall be made without regard to whether
or not the Employer has profits.
If a person who is otherwise entitled to a minimum contribution above is
also covered under another defined contribution plan of the Employer's which is
a Top-heavy Plan during that same Plan Year, any additional contribution
required to meet the minimum above shall be provided in this Plan.
If a person who is otherwise entitled to a minimum contribution above is
also covered under a defined benefit plan of the Employer's which is a Top-heavy
Plan during that same Plan Year, the minimum benefits for him shall not be
duplicated. The defined benefit plan shall provide an annual benefit for him on,
or adjusted to, a straight life basis equal to the lesser of:
(c) 2 percent of his average compensation multiplied by his years of
service, or
(d) 20 percent of his average compensation.
Average compensation and years of service shall have the meaning set forth
in such defined benefit plan for this purpose.
For purposes of this section, any employer contribution made according to a
salary reduction or similar arrangement and employer contributions which are
matching contributions, as defined in Code Section 401(m), shall not apply in
determining if the minimum contribution requirement has been met, but shall
apply in determining the minimum contribution required.
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The requirements of this section shall be met without regard to any Social
Security contribution.
SECTION 11.05--MODIFICATION OF CONTRIBUTION LIMITATION.
If the provisions of subparagraph (g) of the CONTRIBUTION LIMITATION
SECTION of Article III are applicable for any Limitation Year during which this
Plan is a Top-heavy Plan, the contribution limitations shall be modified. The
definitions of Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction in the CONTRIBUTION LIMITATION SECTION of Article III shall be modified
by substituting "100 percent" in lieu of "125 percent." In addition, an
adjustment shall be made to the numerator of the Defined Contribution Plan
Fraction. The adjustment is a reduction of that numerator similar to the
modification of the Defined Contribution Plan Fraction described in the
CONTRIBUTION LIMITATION SECTION of Article III, and shall be made with respect
to the last Plan Year beginning before January 1, 1984.
The modifications in the paragraph above shall not apply with respect to a
Participant so long as employer contributions, forfeitures, or nondeductible
employee contributions are not credited to his account under this or any of the
Employer's other defined contribution plans and benefits do not accrue for such
Participant under the Employer's defined benefit plan(s), until the sum of his
Defined Contribution and Defined Benefit Plan Fractions is less than 1.0.
This section shall cease to apply effective as of the first Limitation Year
beginning on or after January 1, 2000.
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By executing this Plan, the Primary Employer acknowledges having counseled
to the extent necessary with selected legal and tax advisors regarding the
Plan's legal and tax implications.
Executed this 28th day of April, 2003.
CASEY'S GENERAL STORES, INC.
By: /s/ William J. Walljasper
-----------------------------------
Title: Vice President Human Resources
Defined Contribution Plan 8.0
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