As filed with the Securities and Exchange Commission on June 27, 1997
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2708455
(State or other jurisdiction (I.R.S. employer identification no.)
of incorporation or organization)
80 South Main Street
Hanover, New Hampshire 03755-2053
(603) 643-1567
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
VALLEY GROUP EMPLOYEES'
401(K) SAVINGS PLAN
(Full title of the plan)
Michael S. Paquette
Vice President and Controller
Fund American Enterprises Holdings, Inc.
80 South Main Street
Hanover, New Hampshire 03755-2053
(603) 643-1567
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
CALCULATION OF REGISTRATION FEE
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Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered(1) registered(2) offering price per share(3) aggregate offering price(3) registration fee
- ------------------------------ ------------- --------------------------- --------------------------- ----------------
Common Stock, 300,000 $ 104.69 $31,407,000 $9,517.28
$1.00 par value shares
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(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as amended
(the "Securities Act"), this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the employee benefit plan
described herein (the "Plan").
(2) Includes shares that may be contributed as, or acquired with, matching
contributions, and shares that may be purchased under the Plan with elective
contributions and at the direction of Plan participants.
(3) Pursuant to Rule 457(h)(1) under the Securities Act, the offering
price is based upon the average high and low sales prices of the Common Stock as
reported on the New York Stock Exchange on June 25, 1997.
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed by Fund American Enterprises
Holdings, Inc. (the "Registrant") (Commission file no. 1-8993) or the Valley
Group Employees 401(k) Savings Plan (the "Plan") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), hereby are incorporated
in this Registration Statement by reference: (a) Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 (the "1996 Form 10-K"); (b)
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997;
(c) the Plan's Annual Report on Form 11-K for the year ended December 31, 1996;
and (d) the description of Registrant's common stock, $1.00 par value per share,
included in Registrant's Registration Statement on Form S-3 dated July 26, 1994,
as amended by an amendment to said Form S-3 dated November 7, 1994. All
documents subsequently filed by Registrant or the Plan pursuant to Sections
13(a), 14, and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment which indicates that all securities offered have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law ("GCL") of the State of Delaware provides
that a Delaware corporation, such as the registrant, may indemnify a director or
officer against his or her expenses and judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with any action, suit
or proceeding (other than an action by or in the right of the corporation)
involving such person by reason of the fact that such person is or was a
director or officer, concerning actions taken in good faith and in a manner
reasonably believed to be in or not opposed to the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The GCL also
provides that in a derivative action, a Delaware corporation may indemnify its
directors and officers against expenses actually and reasonably incurred to the
extent that such director or officer acted in good faith and in a manner such
director or officer reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made with
respect to any claim, issue or matter as to which such director or officer is
adjudged to be liable to the corporation unless and only to the extent that the
court determines upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such director or officer is
fairly and reasonably entitled to indemnity for such expenses which the court
deems proper. The GCL also generally permits the advancement of a director's or
officer's expenses, including by means of a mandatory charter or bylaw provision
to that effect, in lieu of requiring the authorization of such advancement by
the Board of Directors in specific cases.
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Article XI of Registrant's Amended and Restated By-Laws contains the
indemnification provisions that follow:
ARTICLE XI
Indemnification
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54. Indemnification of Directors, Officers, Agents and
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Employees.
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Section 1. Right to Indemnification. The Corporation shall to
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the fullest extent permitted by applicable law as then in effect, indemnify
any person (the "Indemnitee") unless otherwise agreed to by Indemnitee, who
was or is involved in any manner (including, without limitation, as a party
or a witness) or is threatened to be made so involved in any threatened,
pending or completed investigation, claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative (including without
limitation, any action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor) (a "Proceeding") by reason
of the fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise (including, without limitation,
any employee benefit plan) against all expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such Proceeding. Such
indemnification shall be a contract right and shall include the right to
receive payment in advance of any expenses incurred by the Indemnitee in
connection with such Proceeding, consistent with the provisions of
applicable law as then in effect.
Section 2. Insurance, Contracts and Funding. The Corporation
--------------------------------
may purchase and maintain insurance to protect itself and any Indemnitee
against any expenses, judgments, fines and amounts paid in settlement as
specified in Section 1 of this Article or incurred by any Indemnitee in
connection with any Proceeding referred to in Section 1 of this Article, to
the fullest extent permitted by applicable law as then in effect. The
Corporation may enter into contracts with any director, officer, employee
or agent of the Corporation in furtherance of the provisions of this
Article and may create a trust fund, grant a security interest or use other
means (including without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect indemnification as
provided in this Article.
Section 3. Indemnification; Not Exclusive Right. The right of
------------------------------------
indemnification provided in this Article shall not be exclusive of any
other rights to which those seeking indemnification may otherwise be
entitled, and the provisions of this Article shall inure to the benefit of
the heirs and legal representatives of any person entitled to indemnity
under this Article and shall be applicable to Proceedings commenced or
continuing after the adoption of this Article, whether arising from acts or
omissions occurring before or after such adoption.
Section 4. Advancement of Expenses, Procedures; Presumptions and
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Effect of Certain Proceedings; Remedies. In furtherance, but not in
---------------------------------------
limitation of the foregoing provisions, the following procedures,
presumptions and remedies shall apply with respect to advancement of
expenses and the right to indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses incurred by
-----------------------
or on behalf of the indemnitee in connection with any Proceeding shall
be advanced to the Indemnitee by the Corporation within twenty (20)
business days after the receipt by the Corporation of a statement or
statements from the Indemnitee requesting such advance
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or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall
reasonably evidence the expenses incurred by the Indemnitee and, if
required by law or requested by the Corporation at the time of such
advance, shall include or be accompanied by an undertaking by or on
behalf of the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to be
indemnified against such expenses pursuant to this Article.
(b) Procedure for Determination of Entitlement to
---------------------------------------------
Indemnification. (i) To obtain indemnification under this Article, an
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Indemnitee shall submit to the Secretary of the Corporation a written
request, including such documentation and information as is reasonably
available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination of
the Indemnitee's entitlement to indemnification shall be made not
later than 120 days after receipt by the Corporation of the written
request for indemnification together with the Supporting
Documentation. The Secretary of the Corporation shall, promptly upon
receipt of such a request for indemnification, advise the Board of
Directors or its designee in writing that the Indemnitee has requested
indemnification.
(ii) The Indemnitee's entitlement to indemnification under
this Article shall be determined in one of the following ways: (A) by
a majority vote of the Disinterested Directors (as hereinafter
defined), if they constitute a quorum of the Board of Directors; (B)
by a written opinion of Independent Counsel (as hereinafter defined)
if (x) a Change of Control (as hereinafter defined) shall have
occurred and the Indemnitee so requests or (y) a quorum of the Board
of Directors consisting of Disinterested Directors is not obtainable
or, even if obtainable, a majority of such Disinterested Directors so
directs; (C) by the stockholders of the Corporation (but only if a
majority of the Disinterested Directors, if they constitute a quorum
of the Board of Directors, presents the issue of entitlement or
indemnification to the stockholders for their determination); or (D)
as provided in Section 4(c), below.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 4(b)(ii), a majority of the Disinterested Directors shall
select the Independent Counsel, but only an Independent Counsel to
which the Indemnitee does not reasonably object; provided, however,
that if a Change of Control shall have occurred, the Indemnitee shall
select such Independent Counsel, but only an Independent Counsel to
which the Board of Directors does not reasonably object.
(c) Presumption and Effect of Certain Proceedings. Except as
---------------------------------------------
otherwise expressly provided in this Article, if a Change of Control
shall have occurred the Indemnitee shall be presumed to be entitled to
indemnification under this Article upon submission of a request for
indemnification together with the Supporting Documentation in
accordance with Section 4(b)(i), thereafter the Corporation shall have
the burden of proof to overcome that presumption in reaching a
contrary determination. In any event, if the person or persons
empowered under Section 4(b) to determine entitlement to
indemnification shall not have been appointed or shall not have made a
determination within one hundred twenty (120) days after receipt by
the Corporation of the request, therefore together with the Supporting
Documentation, the Indemnitee shall be deemed to be entitled to
indemnification and the Indemnitee shall be entitled to such
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indemnification unless (A) the Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification or
in the Supporting Documentation or (B) such indemnification is
prohibited by law. The termination of any Proceeding described in
Section 1, or of any claim, issue or matter therein, by judgement,
order, settlement or conviction, or upon a plea of nolo contendere or
---- ----------
its equivalent, shall not, of itself, adversely affect the right of
the Indemnitee to indemnification or create a presumption that the
Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal Proceeding, that the
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
(d) Remedies of Indemnitee. (i) In the event that a
----------------------
determination is made pursuant to Section 4(b) that the Indemnitee is
not entitled to indemnification under this Article, (A) the Indemnitee
shall be entitled to seek an adjudication of his entitlement to such
indemnification either, at the Indemnitee's sole option, in (x) an
appropriate court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted by a
single arbitrator pursuant to the rules of the American Arbitration
Association; (B) any such judicial proceeding or arbitration shall be
de novo and the Indemnitee shall not be prejudiced by reason of such
-- ----
adverse determination; and (C) if a Change of Control shall have
occurred, in any such judicial proceeding or arbitration the
Corporation shall have the burden of proving that the Indemnitee is
not entitled to indemnification under this Article.
(ii) If a determination shall have been made or deemed to
have been made, pursuant to Section 4(b) or (c), that the Indemnitee
is entitled to indemnification, the Corporation shall be obligated to
pay the amounts constituting such indemnification within fifteen (15)
business days after such determination has been made or deemed to have
been made and shall be conclusively bound by such determination unless
(A) the indemnitee misrepresented or failed to disclose a material
fact in making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law.
(Subparagraph (A) and (B) are each referred to hereafter as a
"Disqualifying Event"). In the event that (C) advancement of expenses
is not timely made pursuant to Section 4(a) or (D) payment of
indemnification is not made within fifteen (15) business days after a
determination of entitlement to indemnification has been made or
deemed to have been made pursuant to Section 4(b) or (c), the
Indemnitee shall be entitled to seek judicial enforcement of the
Corporation's obligation to pay to the Indemnitee such advancement of
expenses or indemnification. Notwithstanding the foregoing, the
Corporation may bring an action, in an appropriate court in the State
of Delaware or any other court of competent jurisdiction, contesting
the right of the Indemnitee to receive indemnification hereunder due
to the occurrence of Disqualifying Event; provided, however, that in
any such action the Corporation shall have the burden of proving the
occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from asserting in
any judicial proceeding or arbitration commenced pursuant to this
Section 4(d) that the procedures and presumptions of this Article are
not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Corporation is bound by
all the provisions of this Article.
(iv) In the event that the Indemnitee, pursuant to this
Section 4(d), seeks a judicial adjudication of an award in arbitration
to enforce his rights under, or to
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recover damages for breach of, this Article, the Indemnitee shall be
entitled to recover from the Corporation, and shall be indemnified by
the Corporation against, any expenses actually and reasonably incurred
by him if the Indemnitee prevails in such judicial adjudication or
arbitration. If it shall be determined in such judicial adjudication
or arbitration that the Indemnitee is entitled to receive part but not
all of the indemnification or advancement of expenses sought, the
expenses incurred by the indemnitee in connection with such judicial
adjudication or arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Section 4:
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(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 (the "Act"), whether or not
the Corporation is then subject to such reporting requirement;
provided that, without limitation, such change in control shall be
deemed to have occurred if (A) any "person" (as such term is used in
Section 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 30% or more
of the combined voting power of the Corporation's then outstanding
securities without the prior approval of at least two-thirds (2/3) of
the members of the Board of Directors in office immediately prior to
such acquisition; (b) the Corporation is a party to a merger,
consolidation, sale of assets or other reorganization, or proxy
contest, as a consequence of which members of the Board of Directors
in office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (C)
during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (including
for this purpose any new director whose election or nomination for
election by the Corporation's stockholders was approved by a vote of
at least a majority of the directors then still in office who were
directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.
(ii) "Disinterested Director" means a director of the
Corporation who is not or was not a party to the Proceeding in respect
of which indemnification is sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member of
a law firm that neither presently is, nor in the past five (5) years
has been, retained to represent: (i) the Corporation or the Indemnitee
in any matter material to either such party or (ii) any other party to
the Proceeding giving rise to a claim for indemnification under this
Article. Notwithstanding the foregoing, the term "Independent Counsel"
shall not include any person who, under the applicable standards of
professional conduct then prevailing under the law of the State of
Delaware, would have a conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the
Indemnitee's rights under this Article.
Section 5. Severability. If any provision or provisions of this
------------
Article shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Article (including, without limitation, all
portions of any paragraph of this Article containing any such provision
held to be invalid, illegal or
II-5
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (b) to the
fullest extent possible, the provisions of this Article (including, without
limitation, all portions of any paragraph of this Article containing any
such provision held to be invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
Section 102(b)(7) of the GCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision may not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the GCL (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock) or
(iv) for any transaction from which the director derived an improper personal
benefit.
Article Eleventh of Registrant's Restated Certificate of Incorporation, as
amended, implements the foregoing provision and provides as follows:
Eleventh: (a) To the fullest extent that the General Corporation Law of
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the State of Delaware (as it exists on the date hereof [March 11, 1994] or
as it may hereafter be amended) permits the limitation or elimination of
the liability of directors, no director of the Corporation shall be liable
to the Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director. No amendment to or repeal of this Article
shall apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.
(b) In addition to any requirements of law and any other
provisions herein or in the terms of any class or series of capital stock
having preference over the common stock of the Corporation as to dividends
or upon liquidation (and notwithstanding that a lesser percentage may be
specified by law), the affirmative vote of the holders of seventy-five
percent (75%) or more of the voting power of the then outstanding voting
stock of the Corporation, voting together as a single class, shall be
required to amend, alter or repeal any provision of this Article.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the registrant out of its foregoing indemnification provisions,
subject to certain exclusions and to the policy limits.
Item 7. Exemption from Registration Claimed.
Not applicable.
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Item 8. Exhibits.
The following exhibits are furnished with this Registration Statement:
Exhibit No. Description
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(4)(a) Amended and Restated Certificate of
Incorporation of Registrant (filed as Exhibit
3(a) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993
(Commission file number 1-8993) and incorporated
herein by reference).
(4)(b) Amended and Restated By-Laws of Registrant as
amended to date (filed as Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1993 (Commission
file number 1-8993) and incorporated herein by
reference).
(4)(c) Valley Group Employees' 401(k) Savings Plan and
Trust Agreement, as amended.*
(5)(a) Opinion and consent of Miller, Canfield, Paddock
and Stone, P.L.C.*
(5)(b) The undersigned registrant hereby undertakes
that it will cause the Plan and any amendments
thereto to be submitted to the Internal Revenue
Service (the "IRS") in a timely manner and will
make all changes required by the IRS in order to
qualify the Plan under Section 401 of the
Internal Revenue Code of 1986, as amended, or
any successor thereto.
(23)(a) Consent of Miller, Canfield, Paddock and Stone,
P.L.C. (contained in Exhibit (5)(a)).
(23)(b) Consent of Ernst & Young LLP.*
(23)(c) Consent of Coopers & Lybrand L.L.P.*
(23)(d) Consent of Coopers & Lybrand L.L.P.*
(24) Powers of attorney (contained in the signature
pages hereto).*
_____________________________
* Filed herewith.
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Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference into the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Hanover, State of New Hampshire, on June 26,
1997.
FUND AMERICAN ENTERPRISES HOLDINGS, INC.
By /s/ John J. Byrne
--------------------------------------------
Name: John J. Byrne
Title: Chairman, President and
Chief Executive Officer
The Plan. Pursuant to the requirements of the Securities Act of 1933,
Valley Group Employees' 401(k) Savings Plan has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Albany, State of Oregon, on June 26, 1997.
Valley Group Employees' 401(k) Savings Plan
By: /s/ Stuart E. Olson
------------------------------------------
Name: Stuart E. Olson
Title: Trustee
And: /s/ Kenneth R. Hisel
-----------------------------------------
Name: Kenneth R. Hisel
Title: Trustee
And: /s/ Carey D. Benson
-----------------------------------------
Name: Carey D. Benson
Title: Trustee
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated and on the dates indicated below. By so signing, each of
the undersigned, in his capacity as a director or officer, or both, as the case
may be, of the registrant, does hereby appoint John J. Byrne, K. Thomas Kemp,
Allan L. Waters and Michael S. Paquette, and each of them severally, his true
and lawful attorney to execute in his name, place and stead, in his capacity as
a director or officer, or both, as the case may be, of the registrant, any and
all amendments to this Registration Statement including post-effective
amendments thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission.
Each of said attorneys shall have full power and authority to do and perform in
the name and on behalf of each of the undersigned, in any and all capacities,
every act whatsoever requisite or necessary to be done in the premises as fully,
and for all intents and purposes, as each of the undersigned might or could do
in person, the undersigned hereby ratifying and approving the acts of said
attorneys and each of them.
Signatures Title Date
---------- ----- ----
(1) Principal Executive Officer:
Chairman, President and Chief
/s/ John J. Byrne Executive Officer June 26, 1997
- -------------------------------
John J. Byrne
(2) Principal Financial Officer:
Senior Vice President and
/s/ Allan L. Waters Chief Financial Officer June 26, 1997
- -------------------------------
Allan L. Waters
Principal Accounting Officer:
Vice President and
/s/ Michael S. Paquette Controller June 26, 1997
- -------------------------------
Michael S. Paquette
(3) Directors:
/s/ John J. Byrne Director June 26, 1997
- -------------------------------
John J. Byrne
/s/ Howard L. Clark Director June 26, 1997
- -------------------------------
Howard L. Clark
/s/ Howard L. Clark, Jr. Director June 26, 1997
- -------------------------------
Howard L. Clark, Jr.
/s/ Robert P. Cochran Director June 26, 1997
- -------------------------------
Robert P. Cochran
/s/ George J. Gillespie III Director June 26, 1997
- -------------------------------
George J. Gillespie III
/s/ K. Thomas Kemp Director June 26, 1997
- -------------------------------
K. Thomas Kemp
/s/ Gordon S. Macklin Director June 26, 1997
- -------------------------------
Gordon S. Macklin
/s/ Frank A. Olson Director June 26, 1997
- -------------------------------
Frank A. Olson
/s/ Arthur Zankel Director June 26, 1997
- -------------------------------
Arthur Zankel
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EXHIBIT INDEX
Exhibit No. Description
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(4)(c) Valley Group Employees' 401(k) Savings Plan and Trust
Agreement, as amended.*
(5)(a) Opinion and consent of Miller, Canfield, Paddock and Stone,
P.L.C.*
(5)(b) The undersigned registrant hereby undertakes that it will
cause the Plan and any amendments thereto to be submitted to
the Internal Revenue Service (the "IRS") in a timely manner
and will make all changes required by the IRS in order to
qualify the Plan under Section 401 of the Internal Revenue
Code of 1986, as amended, or any successor thereto.
(23)(a) Consent of Miller, Canfield, Paddock and Stone, P.L.C.
(contained in Exhibit (5)(a)).
(23)(b) Consent of Ernst & Young LLP.*
(23)(c) Consent of Coopers & Lybrand L.L.P.*
(23)(d) Consent of Coopers & Lybrand L.L.P.
(24) Powers of attorney (contained in the signature pages
hereto).*
_____________________________
* Filed herewith.
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
DEFINED CONTRIBUTION PLAN AND TRUST
Copyright 1990 Employers Life Insurance Company of Wausau
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS...........................................................................
ARTICLE II TOP HEAVY PROVISIONS AND ADMINISTRATION...............................................
2.1 TOP HEAVY PLAN REQUIREMENTS....................................................................... 19
2.2 DETERMINATION OF TOP HEAVY STATUS................................................................. 19
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER....................................................... 24
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY........................................................... 25
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES..................................................... 25
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR............................................................ 25
2.7 RECORDS AND REPORTS............................................................................... 27
2.8 APPOINTMENT OF ADVISERS........................................................................... 27
2.9 INFORMATION FROM EMPLOYER......................................................................... 27
2.10 PAYMENT OF EXPENSES............................................................................... 27
2.11 MAJORITY ACTIONS.................................................................................. 27
2.12 CLAIMS PROCEDURE.................................................................................. 28
2.13 CLAIMS REVIEW PROCEDURE........................................................................... 28
ARTICLE III ELIGIBILITY...........................................................................
3.1 CONDITIONS OF ELIGIBILITY......................................................................... 29
3.2 EFFECTIVE DATE OF PARTICIPATION................................................................... 29
3.3 DETERMINATION OF ELIGIBILITY...................................................................... 29
3.4 TERMINATION OF ELIGIBILITY........................................................................ 29
3.5 OMISSION OF ELIGIBLE EMPLOYEE..................................................................... 30
3.6 INCLUSION OF INELIGIBLE EMPLOYEE.................................................................. 30
3.7 ELECTION NOT TO PARTICIPATE....................................................................... 30
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE............................................................. 30
ARTICLE IV CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...................................................... 31
4.2 EMPLOYER'S CONTRIBUTION FOR TARGET BENEFIT........................................................... 33
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION........................................................... 34
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................................................. 34
4.5 MAXIMUM ANNUAL ADDITIONS............................................................................. 42
4.6 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS............................................................ 52
4.7 TRANSFERS FROM QUALIFIED PLANS....................................................................... 53
4.8 VOLUNTARY CONTRIBUTIONS.............................................................................. 55
4.9 DIRECTED INVESTMENT ACCOUNT.......................................................................... 56
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS................................................................. 57
4.11 INTEGRATION IN MORE THAN ONE PLAN.................................................................... 57
ARTICLE V VALUATIONS...........................................................................
5.1 VALUATION OF THE TRUST FUND.......................................................................... 57
5.2 METHOD OF VALUATION.................................................................................. 57
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ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS..............................................
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT............................................................ 58
6.2 DETERMINATION OF BENEFITS UPON DEATH................................................................. 58
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY..................................................... 60
6.4 DETERMINATION OF BENEFITS UPON TERMINATION........................................................... 60
6.5 DISTRIBUTION OF BENEFITS............................................................................. 65
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.................................................................. 71
6.7 TIME OF SEGREGATION OR DISTRIBUTION.................................................................. 77
6.8 DISTRIBUTION FOR MINOR BENEFICIARY................................................................... 78
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN....................................................... 78
6.10 PRE-RETIREMENT DISTRIBUTION.......................................................................... 78
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP.................................................................... 79
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS............................................................ 80
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS................................................................... 80
ARTICLE VII TRUSTEE.................................................................................
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE................................................................ 81
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.......................................................... 81
7.3 OTHER POWERS OF THE TRUSTEE.......................................................................... 83
7.4 LOANS TO PARTICIPANTS................................................................................ 86
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS............................................................. 89
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES........................................................ 89
7.7 ANNUAL REPORT OF THE TRUSTEE......................................................................... 90
7.8 AUDIT................................................................................................ 90
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE....................................................... 91
7.10 TRANSFER OF INTEREST................................................................................. 92
7.11 TRUSTEE INDEMNIFICATION.............................................................................. 92
7.12 EMPLOYER SECURITIES AND REAL PROPERTY................................................................ 93
ARTICLE VIII AMENDMENT, TERMINATION, AND MERGERS.....................................................
8.1 AMENDMENT............................................................................................ 93
8.2 TERMINATION.......................................................................................... 94
8.3 MERGER OR CONSOLIDATION.............................................................................. 95
ARTICLE IX MISCELLANEOUS...........................................................................
9.1 EMPLOYER ADOPTIONS................................................................................... 95
9.2 PARTICIPANT'S RIGHTS................................................................................. 95
9.3 ALIENATION........................................................................................... 96
9.4 CONSTRUCTION OF PLAN................................................................................. 97
9.5 GENDER AND NUMBER.................................................................................... 97
9.6 LEGAL ACTION......................................................................................... 97
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS............................................................... 97
9.8 BONDING.............................................................................................. 98
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE........................................................... 98
9.10 INSURER'S PROTECTIVE CLAUSE.......................................................................... 98
9.11 RECEIPT AND RELEASE FOR PAYMENTS..................................................................... 98
9.12 ACTION BY THE EMPLOYER............................................................................... 99
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................................................... 99
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9.14 HEADINGS............................................................................................. 99
9.15 APPROVAL BY INTERNAL REVENUE SERVICE................................................................. 100
9.16 UNIFORMITY........................................................................................... 100
9.17 PAYMENT OF BENEFITS.................................................................................. 100
ARTICLE X PARTICIPATING EMPLOYERS.................................................................
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER............................................................... 101
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.............................................................. 101
10.3 DESIGNATION OF AGENT................................................................................. 102
10.4 EMPLOYEE TRANSFERS.................................................................................. 102
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES................................................ 102
10.6 AMENDMENT............................................................................................ 102
10.7 DISCONTINUANCE OF PARTICIPATION...................................................................... 102
10.8 ADMINISTRATOR'S AUTHORITY............................................................................ 103
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE.................................................... 103
ARTICLE XI CASH OR DEFERRED PROVISIONS....................................................
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...................................................... 104
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION.............................................................. 105
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................................................. 109
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS..................................................................... 112
11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS....................................................... 119
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS................................................................. 119
11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS................................................... 123
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP.................................................................... 127
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ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the
Employer pursuant to Section 2.4 to administer the Plan on behalf of the
Employer.
1.3 "Adoption Agreement" means the separate Agreement which is
executed by the Employer and accepted by the Trustee which sets forth the
elective provisions of this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Code
Section 414(b)) which includes the Employer; any trade or business (whether
or not incorporated) which is under common control (as defined in Code
Section 414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined
in Code Section 414(m)) which includes the Employer; and any other entity
required to be aggregated with the Employer pursuant to Regulations under
Code Section 414(o).
1.5 "Aggregate Account" means with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the
provisions of Section 2.2.
1.6 "Anniversary Date" means the anniversary date specified in C3 of
the Adoption Agreement.
1.7 "Average Monthly Compensation" means the monthly Compensation of a
Participant as specified in E2 of the Adoption Agreement. If a Participant
has less than the number of Years of Service or Plan Years of Service
specified in the Adoption Agreement from his date of employment (or, if
applicable, date of participation) to his date of termination, his Average
Monthly Compensation will be based on his monthly Compensation during his
months of service from his date of employment (or, if applicable, date of
participation). Compensation subsequent to termination of participation
pursuant to Section 3.4 shall not be recognized.
1.8 "Beneficiary" means the person to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the restrictions
of Sections 6.2 and 6.6.
1.9 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.10 "Compensation" with respect to any Participant means such
Participant's compensation as specified by the Employer in E1 of the
Adoption Agreement that is paid during the applicable period. Compensation
for any Self-Employed Individual shall be equal to his Earned Income.
In addition, if specified in the Adoption Agreement, Compensation for
all Plan purposes shall also include compensation which is not currently
includible in the Participant's gross income by reason of the application
of Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d). In applying this limitation, the family group of a
Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
shall be treated as a single Participant, except that for this purpose
Family Members shall include only the affected Participant's spouse and any
lineal descendants who have not attained age nineteen (19) before the close
of the year. If, as a result of the application of such rules, the
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if this
plan is integrated), the limitation shall be prorated among the affected
individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation.
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to Family Member aggregation) shall apply only for Top
Heavy Plan Years and shall not be adjusted.
1.11 "Contract" or "Policy" means any life insurance policy,
retirement income policy, or annuity contract (group or individual) issued
by the Insurer. In the event of any conflict between the terms of this
Plan and the terms of any insurance contract purchased hereunder, the Plan
provisions shall control.
1.12 "Covered Compensation" with respect to any Participant for a Plan
Year means the average (without
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indexing) of the Taxable Wage Bases in effect for each calendar year during
the 35-year period ending with the last day of the calendar year in which
the Participant attains (or will attain) Social Security Retirement Age. A
Participant's Covered Compensation shall be adjusted each Plan Year and no
increase in Covered Compensation shall decrease a Participant's Accrued
Benefit. In determining the Participant's Covered Compensation for a Plan
Year, the Taxable Wage Base in effect for the current Plan Year and any
subsequent Plan Year will be assumed to be the same as the Taxable Wage
Base in effect as of the beginning of the Plan Year for which the
determination is being made. A Participant's Covered Compensation for a
Plan Year before the 35-year period described above is the Taxable Wage
Base in effect as of the beginning of the Plan Year. A Participant's
Covered Compensation for a Plan Year after the 35-year period described
above is the Participant's Covered Compensation for the Plan Year during
which the Participant attained Social Security Retirement Age. However, if
a frozen Covered Compensation table is selected in the Adoption Agreement,
"Covered Compensation" with respect to any Participant for a Plan Year
means the Participant's Covered Compensation under the table selected in
the Adoption Agreement. For Plan Years beginning six (6) years after the
year selected in the Adoption Agreement, the Participant's Covered
Compensation will be that determined under the Covered Compensation table
for the Plan Year five (5) years prior to the current Plan Year. Any
change in a Participant's Covered Compensation shall not cause any
reduction in his Accrued Benefit.
1.13 "Deferred Compensation" means, with respect to any Participant,
that portion of the Participant's total Compensation which has been
contributed to the Plan in accordance with the Participant's deferral
election pursuant to Section 11.2.
1.14 "Early Retirement Date" means the date specified in the Adoption
Agreement on which a Participant or Former Participant has satisfied the
age and service requirements specified in the Adoption Agreement (Early
Retirement Age). A Participant shall become fully Vested upon satisfying
this requirement if still employed at his Early Retirement Age.
A Former Participant who terminates employment after satisfying the
service requirement for Early Retirement and who thereafter reaches the age
requirement contained herein shall be entitled to receive his benefits
under this Plan.
1.15 "Earned Income" means with respect to a Self-Employed Individual,
the net earnings from self-employment in the trade or business with respect
to which the Plan is established, for which the personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not
-3-
included in gross income and the deductions allocable to such items. Net
earnings are reduced by contributions by the Employer to a qualified Plan
to the extent deductible under Code Section 404. In addition, for Plan
Years beginning after December 31, 1989, net earnings shall be determined
with regard to the deduction allowed to the Employer by Code Section
164(f).
1.16 "Elective Contribution" means the Employer's contributions to the
Plan that are made pursuant to the Participant's deferral election pursuant
to Section 11.2. In addition, if selected in E3 of the Adoption Agreement,
the Employer's matching contribution made pursuant to Section 11.1(b) shall
be considered an Elective Contribution for purposes of the Plan. Elective
Contributions shall be subject to the requirements of Sections 11.2(b) and
11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(3), the provisions of which are
specifically incorporated herein by reference.
1.17 "Eligible Employee" means any Employee specified in D1 of the
Adoption Agreement.
1.18 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The term
Employee shall also include Leased Employees as provided in Code Section
414(n) or (o).
Except as provided in the Non-Standardized Adoption Agreement, all
Employees of all entities which are an Affiliated Employer will be treated
as employed by a single employer.
1.19 "Employer" means the entity specified in the Adoption Agreement,
any Participating Employer (as defined in Section 10.1) which shall adopt
this Plan, any successor which shall maintain this Plan and any predecessor
which has maintained this Plan.
1.20 "Excess Compensation" means, with respect to a Plan that is
integrated with Social Security, a Participant's Compensation which is in
excess of the amount set forth in the Adoption Agreement.
1.21 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions and Qualified Non-Elective Contributions
made on behalf of Highly Compensated Participants for the Plan Year over
the maximum amount of such contributions permitted under Section 11.4(a).
1.22 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the elective deferrals pursuant to
Section 11.2(f)
-4-
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference.
1.23 "Family Member" means, with respect to an affected Participant,
such Participant's spouse, and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code Section
414(q)(6)(B).
1.24 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of
its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the
Plan or has any authority or responsibility to do so, or (c) has any
discretionary authority or discretionary responsibility in the
administration of the Plan, including, but not limited to, the Trustee, the
Employer and its representative body, and the Administrator.
1.25 "Fiscal Year" means the Employer's accounting year as specified
in the Adoption Agreement.
1.26 "Forfeiture" means that portion of a Participant's Account that
is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term
Forfeiture shall also include amounts deemed to be Forfeitures pursuant to
any other provision of this Plan.
1.27 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.28 "414(s) Compensation" with respect to any Employee means his
Compensation as defined in Section 1.10. However, for purposes of this
Section, Compensation shall be Compensation paid and shall be determined by
including, in the case of a non-standardized Adoption Agreement, any items
that are excluded from Compensation pursuant to the Adoption Agreement.
The amount of "414(s) Compensation" with respect to any Employee shall
include "414(s) Compensation" during the
-5-
entire twelve (12) month period ending on the last day of such Plan Year.
In addition, if specified in the Adoption Agreement, "414(s)
Compensation" shall also include compensation which is not currently
includible in the Participant's gross income by reason of the application
of Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b), plus Elective
Contributions attributable to Deferred Compensation recharacterized as
voluntary Employee contributions pursuant to 11.5(a).
1.29 "415 Compensation" means compensation as defined in Section
4.5(f)(2).
1.30 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder and generally means an
Employee who performed services for the Employer during the "determination
year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section
1.37(c).
(b) Employees who received "415 Compensation" during the "look-
back" year from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-
back year" from the Employer in excess of $50,000 and were in the Top
Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees; or (ii) the greater of 3 employees or 10 percent of
all employees. If the Employer does not have at least one officer
whose annual "415 Compensation" is in excess of 50 percent of the Code
Section 415(b)(1)(A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year".
-6-
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately
preceding twelve-month period. However, if the Plan Year is a calendar
year, or if another Plan of the Employer so provides, then the "look-back
year" shall be the calendar year ending with or within the Plan Year for
which testing is being performed, and the "determination year" (if
applicable) shall be the period of time, if any, which extends beyond the
"look-back year" and ends on the last day of the Plan Year for which
testing is being performed (the "lag period"). With respect to this
election, it shall be applied on a uniform and consistent basis to all
plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b) and (c) above
shall be adjusted at such time and in such manner as is provided in
Regulations. In the case of such an adjustment, the dollar limits which
shall be applied are those for the calendar year in which the
"determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the meaning
of Code Section 911(d)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into
account as a single employer and Leased Employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees unless
such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the
Employer. The exclusion of Leased Employees for this purpose shall be
applied on a uniform and consistent basis for all of the Employer's
retirement plans. In addition, Highly Compensated Former Employees shall
be treated as Highly Compensated Employees without regard to whether they
performed services during the "determination year".
1.31 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the
foregoing, an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year after
the Employee attains age 55 (or the last year
-7-
ending before the Employee's 55th birthday), the Employee either received
"415 Compensation" in excess of $50,000 or was a "five percent owner". For
purposes of this Section, "determination year", "415 Compensation" and
"five percent owner" shall be determined in accordance with Section 1.30.
Highly Compensated Former Employees shall be treated as Highly Compensated
Employees. The method set forth in this Section for determining who is a
"Highly Compensated Former Employee" shall be applied on a uniform and
consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.32 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.33 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the
Employer for the performance of duties during the applicable computation
period; (2) each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer (irrespective of
whether the employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury duty,
disability, lay-off, military duty or leave of absence) during the
applicable computation period; (3) each hour for which back pay is awarded
or agreed to by the Employer without regard to mitigation of damages. The
same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such
period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account
of a period during which no duties are performed is not required to be
credited to the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with applicable worker's
compensation, or unemployment compensation or disability insurance laws;
and (iii) Hours of Service are not required to be credited for a payment
which solely reimburses an Employee for medical or medically related
expenses incurred by the Employee.
For purposes of this Section, 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
-8-
Employees or are on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for purposes of accrued benefits,
a 1-Year Break in Service, and employment commencement date (or
reemployment commencement date). The provisions of Department of Labor
regulations 2530.200b-2(b) and (c) are incorporated herein by reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee
pursuant to Code Sections 414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
1.34 "Insurer" means any legal reserve insurance company which shall
issue one or more policies under the Plan.
1.35 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm,
or corporation registered as an investment adviser under the Investment
Advisers Act of 1940, a bank, or an insurance company.
1.36 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's
spouse which is not less than 1/2, nor greater than the amount of the
annuity payable during the joint lives of the Participant and the
Participant's spouse. The Joint and Survivor Annuity will be the amount of
benefit which can be purchased with the Participant's Vested interest in
the Plan.
1.37 "Key Employee" means an Employee as defined in Code Section
416(i) and the Regulations thereunder. Generally, any Employee or former
Employee (as well as each of his Beneficiaries) is considered a Key
Employee if he, at any time during the Plan Year that contains the
"Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section
-9-
415(c)(1)(A) for the calendar year in which such Plan Year ends and
owning (or considered as owning within the meaning of Code Section
318) both more than one-half percent interest and the largest
interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections
414(b), (c), (m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code Sections
414(b), (c), (m) and (o) shall be treated as separate employers.
However, in determining whether an individual has "415 Compensation"
of more than $150,000, "415 Compensation" from each employer required
to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be
taken into account.
For purposes of this Section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions
made pursuant to a salary reduction agreement, Code Section 403(b).
1.38 "Late Retirement Date" means the date of, or the first day of the
month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a
Participant's actual retirement after having reached his Normal Retirement
Date.
1.39 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement
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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 of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to
services 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: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Code Sections
125, 402(a)(8), 402(h) or 403(b), (2) immediate participation, and (3) full
and immediate vesting; and (ii) leased employees do not constitute more
than 20 percent of the recipient's nonhighly compensated workforce.
1.40 "Level Funding Amount" means that level annual amount necessary,
using the factor table specified in the Adoption Agreement, to fund a
Participant's Target Benefit.
1.41 "Net Profit" means with respect to any Fiscal Year the Employer's
net income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted
accounting principles, without any reduction for taxes based upon income,
or for contributions made by the Employer to this Plan and any other
qualified plan.
1.42 "Non-Elective Contribution" means the Employer's contributions to
the Plan other than those made pursuant to the Participant's deferral
election made pursuant to Section 11.2 and any Qualified Non-Elective
Contribution. In addition, if selected in E3 of the Adoption Agreement,
the Employer's Matching Contribution made pursuant to Section 4.4(b) shall
be considered a Non-Elective Contribution for purposes of the Plan.
1.43 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.44 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.45 "Normal Retirement Age" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in his
Participant's Account.
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1.46 "Normal Retirement Date" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have his benefits
distributed to him.
1.47 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than one-half of the Hours
of Service needed to be credited with a Year of Service pursuant to Section
1.77 with the Employer. Further, solely for the purpose of determining
whether a Participant has incurred a 1-Year Break in Service, Hours of
Service shall be recognized for "authorized leaves of absence" and
"maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service,
or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of
such child, or any absence for the purpose of caring for such child for a
period immediately following such birth or placement. For this purpose,
Hours of Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary to prevent
the Employee from incurring a 1-Year Break in Service, or, in any other
case, in the immediately following computation period. The Hours of
Service credited for a "maternity or paternity leave of absence" shall be
those which would normally have been credited but for such absence, or, in
any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of
absence" shall not exceed 501.
1.48 "Owner-Employee" means a sole proprietor who owns the entire
interest in the Employer or a partner who owns more than 10% of either the
capital interest or the profits interest in the Employer and who receives
income for personal services from the Employer.
1.49 "Participant" means any Eligible Employee who participates in the
Plan as provided in Section 3.2 and has not for any reason become
ineligible to participate further in the Plan.
1.50 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to his
total interest under the Plan resulting from (a) the Employer's
contributions in the case of a Profit Sharing Plan, Target Benefit Plan, or
Money Purchase
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Plan, and (b) the Employer's Non-Elective Contributions in the case of a
401(k) Profit Sharing Plan.
1.51 "Participant's Combined Account" means the account established
and maintained by the Administrator for each Participant with respect to
his total interest under the Plan resulting from the Employer's
contributions.
1.52 "Participant's Elective Account" means the account established
and maintained by the Administrator for each Participant with respect to
his total interest in the Plan and Trust resulting from the Employer's
Elective Contributions and Qualified Non-Elective Contributions. A
separate accounting shall be maintained with respect to that portion of the
Participant's Elective Account attributable to Elective Contributions made
pursuant to Section 11.2 and Employer matching contributions if they are
deemed to be Elective Contributions.
1.53 "Participant's Rollover Account" means the account established
and maintained by the Administrator for each Participant with respect to
his total interest in the Plan resulting from amounts transferred from
another qualified plan or "conduit" Individual Retirement Account in
accordance with Section 4.7.
1.54 "Plan" means this instrument (hereinafter referred to as
Employers Life Insurance Company of Wausau Defined Contribution Plan and
Trust Basic Plan Document #01) including all amendments thereto, and the
Adoption Agreement as adopted by the Employer.
1.55 "Plan Year" means the Plan's accounting year as specified in C2
of the Adoption Agreement.
1.56 "Pre-Retirement Survivor Annuity" means an immediate annuity for
the life of the Participant's spouse, the payments under which must be
equal to the actuarial equivalent of 50% of the Participant's Vested
interest in the Plan as of the date of death.
1.57 "Qualified Non-Elective Account" means the account established
hereunder to which Qualified Non-Elective Contributions are allocated.
1.58 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to E5 of the Adoption
Agreement and Section 11.1(d) which are used to satisfy the "Actual
Deferral Percentage" tests. Qualified Non-Elective Contributions are
nonforfeitable when made and are distributable only as specified in
Sections 11.2(c) and 11.8. In addition, the Employer's contributions to
the Plan that are made pursuant to Section 11.7(h) and which are used to
satisfy the "Actual Contribution Percentage"
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tests shall be considered Qualified Non-Elective Contributions.
1.59 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to
time.
1.60 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.61 "Retirement Date" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early or Late
Retirement Date (see Section 6.1).
1.62 "Self-Employed Individual" means an individual who has earned
income for the taxable year from the trade or business for which the Plan
is established, and, also, an individual who would have had earned income
but for the fact that the trade or business had no net profits for the
taxable year. A Self-Employed Individual shall be treated as an Employee.
1.63 "Shareholder-Employee" means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any
year in which the Employer elected to be taxed as a Small Business
Corporation under the applicable Code Section.
1.64 "Short Plan Year" means, if specified in the Adoption Agreement,
that the Plan Year shall be less than a 12 month period. If chosen, the
following rules shall apply in the administration of this Plan. In
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the Short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of days in
the Short Plan Year. The determination of whether an Employee has
completed a Year of Service for vesting purposes shall be made in
accordance with Department of Labor Regulation 2530.203-2(c).
1.65 "Social Security Retirement Age" with respect to a Participant
means age 65 if the Participant attains age 62 before January 1, 2000, age
66 if the Participant attains age 62 after December 31, 1999 but before
January 1, 2017, and age 67 if the Participant attains age 62 after
December 31, 2016.
1.66 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.67 "Target Benefit" means the monthly benefit calculated pursuant to
Section 4.2, and which shall be the
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basis for determining the Level Funding Amount, but which may be more or
less than the benefit actually available upon a distributable event.
1.68 "Taxable Wage Base" means, with respect to any year, the maximum
amount of earnings which may be considered wages for such year under Code
Section 3121(a)(1).
1.69 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.
1.70 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.71 "Top Heavy Plan Year" means a Plan Year commencing after December
31, 1983 during which the Plan is a Top Heavy Plan.
1.72 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked
according to the amount of "415 Compensation" (as determined pursuant to
Section 1.30) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and leased
employees within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall
be considered Employees unless such leased employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified
plan maintained by the Employer. Employees who are non-resident aliens who
received no earned income (within the meaning of Code Section 911(d)(2))
from the Employer constituting United States source income within the
meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, for the purpose of determining the number of active Employees
in any year, the following additional Employees may, at the election of the
Administrator, also be excluded, however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the
Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months during
a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between
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Employee representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then Employees covered
by such agreements shall be excluded from both the total number of active
Employees as well as from the identification of particular Employees in the
Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied on
a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.73 "Total and Permanent Disability" means the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months. The disability of a Participant shall be determined
by a licensed physician chosen by the Administrator. However, if the
condition constitutes total disability under the federal Social Security
Acts, the Administrator may rely upon such determination that the
Participant is Totally and Permanently Disabled for the purposes of this
Plan. The determination shall be applied uniformly to all Participants.
1.74 "Trustee" means the person or entity named in B6 of the Adoption
Agreement and any successors.
1.75 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.76 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.77 "Voluntary Contribution Account" means the account established
and maintained by the Administrator for each Participant with respect to
his total interest in the Plan resulting from the Participant's
nondeductible voluntary contributions made pursuant to Section 4.8.
1.78 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has
completed the number of Hours of Service specified in the Adoption
Agreement.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an
Hour of Service. The computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs
an Hour of Service. The succeeding computation periods shall begin with
the first anniversary of the Employee's employment commencement date.
However, if one (1) Year of Service or less is required as a condition of
eligibility, then after the initial eligibility computation period, the
eligibility computation period shall shift to the
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current Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service. An Employee who is credited
with the requisite Hours of Service in both the initial eligibility
computation period and the first Plan Year which commences prior to the
first anniversary of the Employee's initial eligibility computation period
will be credited with two Years of Service for purposes of eligibility to
participate.
For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless
specifically excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the same
computation period. Years of Service with any predecessor Employer which
maintained this Plan shall be recognized. Years of Service with any other
predecessor Employer shall be recognized as specified in the Adoption
Agreement. Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4(i) of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year beginning
after December 31, 1983, in which, as of the Determination Date, (1) the
Present Value of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but such
Participant was a Key Employee for any prior Plan Year, such Participant's
Present Value of Accrued Benefit and/or Aggregate Account balance shall not
be taken into account for purposes of determining whether this Plan is a
Top Heavy or Super Top Heavy Plan (or whether any Aggregation
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Group which includes this Plan is a Top Heavy Group). In addition, if a
Participant or Former Participant has not performed any services for any
Employer maintaining the Plan at any time during the five year period
ending on the Determination Date, any accrued benefit for such Participant
or Former Participant shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period ending on
the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such adjustment shall
be the amount of any contributions actually made after the valuation
date but before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are allocated as
of a date in that first Plan Year;
(3) for a Money Purchase Plan or Target Benefit Plan,
contributions that would be allocated as of a date not later than the
Determination Date, even though those amounts are not yet made or
required to be made.
(4) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4) preceding Plan
Years. However, in the case of distributions made after the valuation
date and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. In the case of a
distribution of an annuity Contract, the amount of such distribution
is deemed to be the current actuarial value of the Contract,
determined on the date of the distribution. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to
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January 1, 1984, and distributions under a terminated plan which if it
had not been terminated would have been required to be included in an
Aggregation Group, will be counted. Further, distributions from the
Plan (including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purpose of this paragraph.
(5) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and made from
a plan maintained by one employer to a plan maintained by another
employer), if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of this Section. If this
Plan is the plan accepting such rollovers or plan-to-plan transfers,
it shall not consider such rollovers or plan-to-plan transfers
accepted after December 31, 1983 as part of the Participant's
Aggregate Account balance. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984 shall be considered as
part of the Participant's Aggregate Account balance.
(7) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as a distribution
for purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or plan-to-
plan transfer is accepted.
(8) For the purposes of determining whether two employers are to
be treated as the same employer in 2.2(c)(6) and 2.2(c)(7) above, all
employers aggregated under Code Section 414(b), (c), (m) and (o) are
treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.
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(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of the Employer,
including any Simplified Employee Pension Plan, in which a Key
Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and each
other qualified plan of the Employer which enables any qualified plan
in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group. In the case of
a Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is a Top
Heavy Group. No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation Group is not a
Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also include
any other plan of the Employer, including any Simplified Employee
Pension Plan, not required to be included in the Required Aggregation
Group, provided the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4) and 410. Such
group shall be known as a Permissive Aggregation Group. In the case
of a Permissive Aggregation Group, only a plan that is part of the
Required Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered a Top Heavy Plan if
the Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated in order
to determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of
the Employer if it was maintained within the last five (5) years
ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of such Plan
Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant other
than a Key Employee shall be as determined using the single accrual method
used for all plans of the Employer and Affiliated Employers, or if no such
single method exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code Section
411(b)(1)(C). The determination of the Present
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Value of Accrued Benefit shall 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. However, any such determination must include present value
of accrued benefit attributable to any Plan distributions referred to in
Section 2.2(c)(4) above, any Employee contributions referred to in Section
2.2(c)(5) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under
all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty percent (60%)
of a similar sum determined for all Participants.
(h) The Administrator shall determine whether this Plan is a Top
Heavy Plan on the Anniversary Date specified in the Adoption Agreement.
Such determination of the top heavy ratio shall be in accordance with Code
Section 416 and the Regulations thereunder.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary for the
proper administration of the Plan to assure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries in
accordance with the terms of the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and method", i.e.,
it shall determine whether the Plan has a short run need for liquidity
(e.g., to pay benefits) or whether liquidity is a long run goal and
investment growth (and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate such
Plan needs with its investment policy. The communication of such a
"funding policy and method" shall not, however, constitute a directive to
the Trustee as to investment of the Trust Funds. Such "funding policy and
method" shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
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(c) The Employer may, in its discretion, appoint an Investment
Manager to manage all or a designated portion of the assets of the Plan.
In such event, the Trustee shall follow the directive of the Investment
Manager in investing the assets of the Plan managed by the Investment
Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or allocated
by it under the provisions of this Plan or pursuant to procedures
established hereunder. This requirement may be satisfied by formal
periodic review by the Employer or by a qualified person specifically
designated by the Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer
does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by the Employer and accepted in writing
by each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and determine all questions arising in connection with
-22-
the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant hereunder
and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust Fund;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the terms
hereof;
(f) to determine the size and type of any Contract to be purchased
from any Insurer, and to designate the Insurer from which such Contract
shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to
the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can
exercise any investment discretion in a manner designed to accomplish
specific objectives;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights
-23-
to elect Joint and Survivor Annuities and Pre-Retirement Survivor Annuities
if required by the Code and Regulations thereunder;
(j) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of such of the foregoing facts as may be
pertinent to the Trustee's duties under the Plan. The Administrator may rely
upon such information as is supplied by the Employer and shall have no duty or
responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability
of the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred. Any administration expense paid to the Trust
Fund as a reimbursement shall not be considered an Employer contribution.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be
-24-
more than one Administrator, they shall act by a majority of their number, but
may authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.12. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall have
an opportunity to submit written and oral evidence and arguments in support of
his claim. At the hearing (or prior thereto upon 5 business days written notice
to the Administrator) the claimant or his representative shall have an
opportunity to review all documents in the possession of the Administrator which
are pertinent to the claim at issue and its disallowance. Either the claimant
or the Administrator may cause a court reporter to attend the hearing and record
the proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court reporter. The full
expense of any such court reporter and such transcripts shall be borne by the
party causing the court reporter to attend the hearing. A final decision as to
the allowance of the claim shall be made by the Administrator within 60 days of
receipt of the appeal (unless there has been an extension of 60 days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
-25-
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on the
date he has satisfied the requirements specified in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the day specified in the Adoption
Agreement.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant as of the date he becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant shall go from a
classification of an Eligible Employee to a noneligible Employee and becomes
ineligible to participate and has not incurred a 1-Year Break in Service, such
Employee shall participate in the Plan as of the date he returns to an eligible
class of Employees. If such Employee does incur a 1-Year Break in Service,
eligibility will be determined under the Break in Service rules of the Plan.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an Eligible
Employee to an ineligible Employee, such Former Participant shall continue to
vest in his interest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as his Participant's Account shall be
forfeited or distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
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If, in any Plan Year, any Employee who should be included as a Participant
in the Plan is erroneously omitted and discovery of such omission is not made
until after a contribution by his Employer for the year has been made, the
Employer shall make a subsequent contribution, if necessary after the
application of Section 4.4(e), so that the omitted Employee receives a total
amount which the said Employee would have received had he not been omitted.
Such contribution shall be made regardless of whether or not it is deductible in
whole or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
Employer shall not be entitled to recover the contribution made with respect to
the ineligible person regardless of whether or not a deduction is allowable with
respect to such contribution. In such event, the amount contributed with
respect to the ineligible person shall constitute a Forfeiture for the Plan Year
in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, and may not be retroactive. For
Standardized Plans, a Participant or an Eligible Employee may not elect not to
participate.
3.8 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other entities, this Plan and the plan
established for other trades or businesses must, when looked at as a single
Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and
all other entities.
(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for Owner-
Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which are not controlled and the
individual controls a trade or business, then the benefits or contributions
of the employees
-27-
under the plan of the trades or businesses which are controlled must be as
favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.
(d) For purposes of the preceding paragraphs, an Owner-Employee, or
two or more Owner-Employees, will be considered to control an entity if the
Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated entity, or
(2) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or two
or more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or indirectly, by a partnership which
such Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) For each Plan Year, on behalf of each Participant eligible
to share in the allocations, the Employer shall contribute the amount
specified in the Adoption Agreement. All contributions by the
Employer shall be made in cash or in such property as is acceptable to
the Trustee. The Employer shall be required to obtain a waiver from
the Internal Revenue Service for any Plan Year in which it is unable
to make the full required contribution to the Plan.
(2) For any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, the Employer shall not
contribute on behalf of a Participant who performs less than a Year of
Service during any Plan Year, unless there is a Short Plan Year or a
contribution is required pursuant to 4.4(h).
(3) Notwithstanding the foregoing, the Employer's contribution
for any Fiscal Year shall not exceed the
-28-
maximum amount allowable as a deduction to the Employer under the
provisions of Code Section 404. However, to the extent necessary to
provide the top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds the amount which is deductible under
Code Section 404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute to the
Plan such amount as specified by the Employer in the Adoption
Agreement. All contributions by the Employer shall be made in cash or
in such property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a contribution even
if it exceeds current or accumulated Net Profit.
4.2 EMPLOYER'S CONTRIBUTION FOR TARGET BENEFIT
(a) The Employer shall contribute on behalf of each Participant
eligible to share in allocations, for each Plan Year, the Level Funding
Amount which is projected to be necessary to fund his Target Benefit, or,
if greater, the percentage of Compensation specified in the Adoption
Agreement.
(b) For any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who performs less
than a Year of Service during any Plan Year shall not share in the
Employer's contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.4(h).
(c) Notwithstanding the foregoing, the Employer's contribution for
any Fiscal Year shall not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
However, to the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds the
amount which is deductible under Code Section 404.
(d) The Target Benefit at Normal Retirement Date for each Participant
shall be equal to the formula selected in the Adoption Agreement and shall
be assumed to be a monthly pension commencing on the Participant's
Retirement Date and continuing for the period specified in the Adoption
Agreement as the Normal Retirement Benefit. The form of distribution of
such benefit, however, shall be determined pursuant to the provisions of
Section 6.5.
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(e) A Participant's actual benefit at any point in time shall be the
value of the Participant's Combined Account.
(f) The Level Funding Amount for each Participant as of his effective
date of participation in the Plan shall be determined using either the
factor Table or the actuarial assumptions as specified in the Adoption
Agreement.
If this Plan is amended to change the Target Benefit or the factor
Table or if this Plan is an amendment and restatement of a predecessor
plan, the Level Funding Amount shall be adjusted to reflect prior Plan
contributions.
(g) The Level Funding Amount shall remain constant unless there has
been a change in a Participant's Target Benefit. In the event of such a
change, the Level Funding Amount shall be increased or decreased by an
amount equal to the level amount necessary to fund the increase or decrease
in the Target Benefit from the Anniversary Date, when the increase or
decrease becomes effective, to the Normal Retirement Date.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year ending with or within such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administration with all
information required by the Administrator to make a proper allocation of
the Employer's contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be allocated to each
Participant's Combined Account in the manner set forth in Section
4.1 herein and as specified in Section E2 of the Adoption
Agreement.
(2) For an Integrated Profit Sharing Plan:
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(i) The Employer's contribution shall be allocated to
each Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year, up to the
percentage of Compensation specified in the Adoption Agreement.
For Top Heavy Plan Years, this percentage shall in no event be
less than 3%, notwithstanding any election in the Adoption
Agreement.
(ii) Any remaining contribution shall be allocated to each
Participant's Account in the same proportion that each such
Participant's Excess Compensation for the year bears to the total
Excess Compensation of all Participants for such year; provided,
however, that the percentage of Excess Compensation allocated in
this subsection shall not exceed the percentage of Compensation
allocated in subsection (i).
(iii) Any remaining contribution shall be allocated to each
Participant's Account in the same proportion that each such
Participant's Compensation plus Excess Compensation bears to the
total Compensation plus Excess Compensation of all Participants
for such year; provided, however, that the sum of the percentage
allocated in subsection (ii) and the percentage allocated in this
subsection (iii) shall not exceed 5.7% (as adjusted for future
years).
(iv) The balance of the Employer's contribution over the
amount allocated above, if any, shall be allocated to each
Participant's Combined Account in the same proportion that his
total Compensation for the Year bears to the total Compensation
of all Participants for such year. Regardless of the preceding,
4.3% (as adjusted) shall be substituted for 5.7% (as adjusted)
above if Excess Compensation is based on more than 20% and less
than or equal to 80% of the Taxable Wage Base. If Excess
Compensation is based on less than 100% and more than 80% of the
Taxable Wage Base, then 5.4% (as adjusted) shall be substituted
for 5.7% (as adjusted) above.
(v) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there
-31-
is a Short Plan Year or a contribution is required pursuant to
Section 4.4(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be allocated to
each Participant's Account in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for such year, (or under such
other method specified in the Adoption Agreement).
(ii) Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption
Agreement for any Plan Year beginning on or after January 1,
1990, a Participant who performs less than a Year of Service
during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.4(h).
(4) For a Target Benefit Plan:
(i) The Employer's contribution shall be allocated to
each Participant's Combined Account in the manner set forth in
Section 4.1.
(c) As of each Anniversary Date or other valuation date, before
allocation of Employer contributions and Forfeitures, any earnings or
losses (net appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all Participants'
and Former Participants' nonsegregated accounts as of such date. If any
nonsegregated account of a Participant has been distributed prior to the
Anniversary Date or other valuation date subsequent to a Participant's
termination of employment, no earnings or losses shall be credited to such
account.
(d) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends or interest
received on insurance contracts.
(e) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to reinstate
previously forfeited account balances of Former Participants, if any, in
accordance with Section 6.4(g)(2) or be used to satisfy any contribution
that may be required pursuant to Section 3.5 and/or 6.9. The remaining
Forfeitures, if any, shall be treated in accordance with the Adoption
Agreement. Provided, however, that in the event the allocation of
Forfeitures provided herein shall
-32-
cause the "annual addition" (as defined in Section 4.5) to any
Participant's Account to exceed the amount allowable by the Code, the
excess shall be reallocated in accordance with Section 4.6. Except,
however, for any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who performs less than
a Year of Service during any Plan Year shall not share in the Plan
Forfeitures for that year, unless there is a Short Plan Year or a
contribution required pursuant to Section 4.4(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However, if (i) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee's "415 Compensation" and (ii) this
Plan is not required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code Section 401(a)(4) or
410, the sum of the Employer's contributions and Forfeitures allocated to
the Participant's Combined Account of each Non-Key Employee shall be equal
to the largest percentage allocated to the Participant's Combined Account
of any Key Employee. However, for each Non-Key Employee who is a
Participant in a paired Profit Sharing Plan or 401(k) Profit Sharing Plan
and a paired Money Purchase Plan or Target Benefit Plan, the minimum 3%
allocation specified above shall be provided in the Money Purchase Plan or
Target Benefit Plan. For each Non-Key Employee who is a Participant in
this Plan and another non-paired defined contribution plan maintained by
the Employer, the minimum 3% allocation specified above shall be provided
as specified in F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth in
this Section shall be allocated to the Participant's Combined Account of
all Non-Key Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Non-Key Employees who
-33-
have (1) failed to complete a Year of Service; (2) declined to make
mandatory contributions (if required) to the Plan; or (3) been excluded
from participation because of their level of Compensation. However,
employees included in a unit of employees covered by a collective
bargaining agreement shall not receive any minimum allocations under this
subsection.
(i) Notwithstanding anything herein to the contrary, in any Plan Year
in which the Employer maintains both this Plan and a defined benefit
pension plan included in a Required Aggregation Group which is top heavy,
the Employer shall not be required to provide a Non-Key Employee with both
the full separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if the Employer
maintains both a Defined Benefit and a Defined Contribution Plan that are a
Top Heavy Group, the top heavy minimum benefits shall be provided as
follows:
(1) Applies if F1b (or G1b with respect to a Target Benefit
Plan) of the Adoption Agreement is Selected -
(i) The requirements of Section 2.1 shall apply except
that each Non-Key Employee who is a Participant in the Profit
Sharing Plan, Target Benefit Plan or Money Purchase Plan and who
is also a Participant in the Defined Benefit Plan shall receive a
minimum allocation of five percent (5%) of such Participant's
"415 Compensation" from the applicable Defined Contribution
Plan(s).
(ii) For each Non-Key Employee who is a Participant only
in the Defined Benefit Plan the Employer will provide a minimum
non-integrated benefit equal to 2% of his highest five
consecutive year average "415 Compensation" for each Year of
Service while a Participant in the Plan, in which the Plan is top
heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a Participant only
in this Defined Contribution Plan, the Employer shall provide a
contribution equal to the minimum allocation required under
subsection (f).
(2) Applies if F1c (or G1c with respect to a Target Benefit
Plan) of the Adoption Agreement is Selected -
(i) The minimum allocation specified in Section
4.4(i)(1)(i) shall be 7 1/2% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy, but
not Super Top Heavy.
-34-
(ii) The minimum benefit specified in Section
4.4(i)(1)(ii) shall be 3% if the Employer elects in the Adoption
Agreement for years in which the Plan is Top Heavy, but not Super
Top Heavy.
(iii) The minimum allocation specified in Section
4.4(i)(1)(iii) shall be 4% if the Employer elects in the Adoption
Agreement for years in which the Plan is Top Heavy, but not Super
Top Heavy.
(j) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000 (unless adjusted in such manner as permitted under Code
Section 415(d)). However, for Plan Years beginning prior to January 1,
1989, the $200,000 limit shall apply only for Top Heavy Plan Years and
shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, any Participant
who terminated employment during the Plan Year shall or shall not share in
the allocations of the Employer's Contributions and Forfeitures as provided
in the Adoption Agreement. Notwithstanding the foregoing, for Plan Years
beginning after 1989, if this is a standardized Plan, any such terminated
Participant shall share in the allocations as provided in this Section
provided such Participant completed more than 500 Hours of Service.
(l) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as
follows:
(1) one account for nonforfeitable benefits attributable to pre-
break service; and
(2) one account representing his employer derived account
balance in the Plan attributable to post-break service.
(m) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or percentage
of Participants for a Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution and Forfeitures for the Plan Year shall be
expanded to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable test
specified above. The specific participants who shall be come eligible
under the terms of this paragraph shall be those who are
-35-
actively employed on the last day of the Plan Year and, when compared
to similarly situated Participants, have completed the greatest number
of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants eligible
to share in the Employer's contribution and Forfeitures for the Plan
Year shall be further expanded to include the minimum number of
Participants who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan
Year before terminating employment. Nothing in this Section shall
permit the reduction of a Participant's accrued benefit. Therefore
any amounts that have previously been allocated to Participants may
not be reallocated to satisfy these requirements. In such event, the
Employer shall make an additional contribution equal to the amount
such affected Participants would have received had they been included
in the allocations, even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
4.5 MAXIMUM ANNUAL ADDITIONS
(a) (1) 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, which provides Annual
Additions, the amount of Annual Additions which may be credited to the
Participant's accounts 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 accounts
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated will
be reduced or reallocated so that the Annual Additions for the
Limitation Year will equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a
-36-
Participant on the basis of a reasonable estimation of the
Participant's Compensation for the Limitation Year, uniformly
determined for all Participants similarly situated.
(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation
Year shall be determined on the basis of the Participant's actual
compensation for such Limitation Year.
(4) If pursuant to Section 4.5(a)(2) or as a result of the
allocation of Forfeitures, or under such other circumstances which the
Commissioner finds justify such treatment there is an Excess Amount,
the excess will be disposed of as follows:
(i) Any nondeductible Voluntary Employee Contributions,
to the extent they would reduce the Excess Amount, will be
returned to the Participant;
(ii) If this Plan is a profit-sharing plan (or a money
purchase plan which allocates forfeitures), and an excess amount
still exists after the application of paragraph (i), then the
excess amount shall be allocated and reallocated in accordance
with Section 4.4 to other Plan Participants. If after such
allocation and reallocation an excess amount still exists, such
amount shall be held in an unallocated suspense account to be
allocated and reallocated in the next Limitation Year (and
succeeding Limitation Years if necessary) in accordance with
Section 4.4. The suspense account shall be allocated prior to
any Employer or Participant contributions for such succeeding
Limitation Year(s).
(iii) If this Plan is a money purchase pension plan which
does not allocate forfeitures, and an excess amount still exists
after the application of paragraph (i), then the excess amount
shall be held in an unallocated suspense account, which shall be
used to reduce future Employer contributions for all remaining
Participants in the next Limitation Year (and succeeding
Limitation Years, if necessary.)
(iv) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Section, it will not
participate in the allocation of investment gains and 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
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to participants' accounts before any employer contributions or
any employee contributions may be made to the plan for that
limitation year. Excess amounts may not be distributed to
participants or former participants.
(b) (1) This subsection applies if, in addition to this Plan, the
Participant is covered under another qualified Prototype defined
contribution 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, which provides Annual
Additions, during any Limitation Year. The Annual Additions which may
be credited to a Participant's accounts under this Plan for any such
Limitation Year shall not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's accounts
under the other plans and welfare benefit funds for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefit
funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts under this Plan
would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated will be reduced
so that the Annual Additions under all such plans and welfare benefit
funds for the Limitation Year will equal the Maximum Permissible
Amount. If the Annual Additions with respect to the Participant under
such other defined contribution plans and welfare benefit funds in the
aggregate are equal to or greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to the Participant's
account under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual Compensation
for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Section 4.5(a)(2).
(3) 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.
(4) If, pursuant to Section 4.5(b)(2) or as a result of the
allocation of Forfeitures, a Participant's Annual Additions under this
Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the
Annual
Additions last allocated, except that Annual Additions attributable to
a welfare benefit fund or individual medical account will be deemed to
have been allocated first regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Amount attributed to this Plan will be the
product of,
(i) the total Excess Amount allocated as of such date,
times
(ii) the ratio of (1) the Annual Additions allocated to
the Participant for the Limitation Year as of such date under
this Plan to (2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under this
and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be disposed
in the manner described in Section 4.5(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Prototype Plan,
Annual Additions which may be credited to the Participant's account under
this Plan for any Limitation Year will be limited in accordance with
Section 4.5(b), unless the Employer provides other limitations in the
Adoption Agreement.
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan covering any Participant in this Plan the sum of the
Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
Fraction will not exceed 1.0 in any Limitation Year. The Annual Additions
which may be credited to the Participant's account under this Plan for any
Limitation Year will be limited in accordance with the Limitation on
Allocations Section of the Adoption Agreement.
Except, however, if the Plans are standardized paired plans, the rate
of accrual in the defined benefit plan will be reduced to the extent
necessary so that the sum of the Defined Contribution Fraction and Defined
Benefit Fraction will equal 1.0.
(e) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition". In addition, the following are not Employee contributions for
the purposes of Section 4.5(f)(1)(2):
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(1) rollover contributions (as defined in Code Sections
402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee pursuant
to Code Section 411(a)(7)(B) (cash-outs);
(4) repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408(k)(6).
(f) For purposes of this Section, the following terms shall be
defined as follows:
(1) Annual Additions means the sum credited to a Participant's
accounts for any Limitation Year of (1) Employer contributions, (2)
effective with respect to "limitation years" beginning after December
31, 1986, Employee contributions, (3) forfeitures, (4) amounts
allocated, after March 31, 1984, to an individual medical account, as
defined in Code Section 415(l)(2), which is part of a pension or
annuity plan maintained by the Employer and (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 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. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is otherwise
treated as an "annual addition", or (2) any amount otherwise treated
as an "annual addition" under Code Section 415(l)(1). Notwithstanding
the foregoing, for "limitation years" beginning prior to January 1,
1987, only that portion of Employee contributions equal to the lesser
of Employee contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be
considered an "annual addition". For this purpose, any Excess Amount
applied under Sections 4.5(a)(4) and 4.5(b)(6) in the Limitation Year
to reduce Employer contributions shall be considered Annual Additions
for such Limitation Year.
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(2) Compensation means a Participant's earned income, wages,
salaries, fees for professional services and other amounts received
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, and
bonuses) and excluding the following:
(i) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the
extent such contributions are excludable from the Employee's
gross income, or any distributions from a plan of deferred
compensation;
(ii) contributions made by the Employer to a plan of
deferred compensation to the extent that all or a portion of such
contributions are recharacterized as a voluntary Employee
contribution;
(iii) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(v) other amounts which received special tax benefits, or
contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are excludable from the gross income of the
Employee). For purposes of applying the limitations of this
Section 4.5, Compensation for any Limitation Year is the
Compensation actually paid or includible in gross income during
such year. Notwithstanding the preceding sentence, Compensation
for a Participant in a profit-sharing plan who is permanently and
totally disabled (as defined in Code Section 22(e)(3)) is the
Compensation such Participant would have received for the
Limitation Year if the Participant had been paid at the rate of
Compensation paid immediately before becoming permanently and
totally disabled; such imputed Compensation for the disabled
-41-
Participant may be taken into account only if the Participant is
not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(3) Defined Benefit 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 125
percent of the dollar limitation determined for the Limitation Year
under Code Sections 415(b) and (d) or 140 percent of his Highest
Average Compensation including any adjustments under Code Section
415(b). 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 end 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 aggregate satisfied the requirements of Code Section 415 for all
Limitation Years beginning before January 1, 1987. Notwithstanding
the foregoing, for any Top Heavy Plan Year, 100 shall be substituted
for 125 unless the extra minimum allocation is being made pursuant to
the Employer's election in F1 of the Adoption Agreement. However, for
any Plan Year in which this Plan is a Super Top Heavy Plan, 100 shall
be substituted for 125 in any event.
(4) Defined Contribution Dollar Limitation means $30,000, or, if
greater, one-fourth of the defined benefit dollar limitation set forth
in Code Section 415(b)(1) as in effect for the Limitation Year.
(5) Defined Contribution 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 voluntary employee
contributions to any defined benefit plans, whether or not terminated,
maintained by the Employer and the annual additions attributable to
all welfare benefit funds, as defined in Code Section 419(e), and
individual medical accounts, as defined in Code Section 415(l)(2),
maintained by the Employer), and the denominator of which
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is the sum of the maximum aggregate 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
125 percent of the Defined Contribution Dollar Limitation or 35
percent of the Participant's Compensation for such year. For
Limitation Years beginning prior to January 1, 1987, the "annual
addition" shall not be recomputed to treat all Employee contributions
as an Annual Addition. 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 5, 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 (1) the excess of the sum of the fractions over 1.0
times (2) 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. Notwithstanding the foregoing, for any Top Heavy Plan Year,
100 shall be substituted for 125 unless the extra minimum allocation
is being made pursuant to the Employer's election in F1 of the
Adoption Agreement. However, for any Plan Year in which this Plan is
a Super Top Heavy Plan, 100 shall be substituted for 125 in any event.
(6) Employer means the Employer that adopts this Plan and all
Affiliated Employers. For purposes of determining Affiliated
Employers under this Section, the rules of Code Sections 414(b) and
(c) shall be modified in accordance with Code Section 415(h).
(7) Excess Amount means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(8) Highest Average Compensation means the average Compensation
for the three consecutive Years of Service with the Employer that
produces the highest average. A Year of Service with the Employer is
the 12 consecutive month period defined in Section E1 of the Adoption
Agreement which is used to determine Compensation under the Plan.
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(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the Employer must use
the same Limitation Year. If the Limitation Year is amended to a
different 12 consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the amendment is
made.
(10) Master or Prototype Plan means a plan the form of which is
the subject of a favorable opinion letter from the Internal Revenue
Service.
(11) 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, which shall not exceed
the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation for the
Limitation Year. The Compensation Limitation referred to in (ii)
shall not apply to any contribution for medical benefits (within
the meaning of Code Sections 401(h) or 419A(f)(2)) which is
otherwise treated as an annual addition under Code Sections
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 12 consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Contribution
multiplied by the following fraction:
number of months in the short Limitation Year
---------------------------------------------
12
(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:
(13) the Participant will continue employment until Normal
Retirement Age (or current age, if later), and
(14) 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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(g) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements prescribed in
this Section shall at all times comply with the provisions of Code Section
415 and the Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
4.6 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual Compensation, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the
"annual additions" under this Plan would cause the maximum provided in
Section 4.5 to be exceeded, the Administrator shall treat the excess in
accordance with Section 4.5(a)(4).
4.7 TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the consent of
the Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax exempt
status of the Plan or create adverse tax consequences for the Employer. The
amounts transferred shall be set up in a separate account herein referred
to as a "Participant's Rollover Account". Such account shall be fully
Vested at all times and shall not be subject to forfeiture for any reason.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from his Participant's Rollover Account.
Any distribution shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
(c) Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred from another qualified plan in a plan-
to-plan transfer shall be subject to the distribution limitations provided
for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Participant's Rollover Account shall be used to
provide additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11)
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and 417 and the Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining whether an
involuntary cash-out of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each Participant
until such time as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part of the general
Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term "amounts
transferred from other qualified plans" shall mean:
(i) amounts transferred to this Plan directly from another
qualified plan;
(ii) lump-sum distributions received by an Employee from
another qualified plan which are eligible for tax free rollover to a
qualified plan and which are transferred by the Employee to this Plan
within sixty (60) days following his receipt thereof;
(iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement
account has no assets other than assets which (A) were previously
distributed to the Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than
earnings on said assets; and
(iv) amounts distributed to the Employee from a conduit
individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60)
days of his receipt thereof from such conduit individual retirement
account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this Section and may
also require the Employee to provide an opinion of counsel satisfactory to
the Employer that the amounts to be transferred meet the requirements of
this Section.
(h) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or
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a transaction having the effect of such a transfer) shall only be permitted
if it will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 8.1.
4.8 VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously allowed
voluntary Employee contributions, such contributions shall be maintained,
but, except as provided in 4.8(b) below, this Plan will not accept
voluntary Employee contributions for Plan Years beginning after the Plan
Year in which this Plan is adopted by the Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such contributions
shall be paid to the Trustee within a reasonable period of time but in no
event later than 90 days after the receipt of the contribution.
(c) The balance in each Participant's Voluntary Contribution Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(d) A Participant may elect to withdraw his voluntary contributions
from his Voluntary Contribution Account and the actual earnings thereon in
a manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder. If the
Administrator maintains sub-accounts with respect to voluntary
contributions (and earnings thereon) which were made on or before a
specified date, a Participant shall be permitted to designate which sub-
account shall be the source for his withdrawal. No Forfeitures shall occur
solely as a result of an Employee's withdrawal of Employee contributions.
In the event such a withdrawal is made, or in the event a Participant has
received a hardship distribution pursuant to Regulation 1.401(k)-
1(d)(2)(iii)(B) from any plan maintained by the Employer, then such
Participant shall be barred from making any voluntary contributions for a
period of twelve (12) months after receipt of the withdrawal or
distribution.
(e) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Voluntary Contribution Account shall be used to
provide additional benefits to the Participant or his Beneficiary.
(f) The Administrator may direct that voluntary contributions made
after a valuation date be segregated into
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a separate account until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be invested as
part of the general Trust Fund, to be determined by the Administrator.
4.9 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants may direct
the Trustee as to the investment of all or a portion of any one or more of
their individual account balances. Participants may direct the Trustee in
writing to invest their account in specific assets as permitted by the
Administrator provided such investments are in accordance with final
Department of Labor regulations and are permitted by the Plan. That
portion of the account of any Participant so directing will thereupon be
considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be established for
each Participant who has directed an investment. Transfers between the
Participant's regular account and their Directed Investment Account shall
be charged and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund Earnings, but it shall be
charged or credited as appropriate with the net earnings, gains, losses and
expenses as well as any appreciation or depreciation in market value during
each Plan Year attributable to such account.
(c) The Administrator shall establish a procedure, to be applied in a
uniform and nondiscriminatory manner, setting forth the permissible
investment options under this Section, how often changes between
investments may be made, and any other limitations that the Administrator
shall impose on a Participant's right to direct investments.
4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning after
December 31, 1986, such contributions must satisfy the provisions of Code
Section 401(m) and the Regulations thereunder.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified retirement
plans integrated with Social Security such that any Participant in this Plan is
covered under more than one of such plans, then such plans will be considered to
be one plan and will be considered to be integrated if the extent of the
integration of all such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits,
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benefit rate, offset rate, or employer contribution rate, whatever is
applicable, under the Plan bears to the limitation applicable to such Plan. If
the Employer maintains two or more standardized paired plans, only one plan may
be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date". In determining such net worth,
the Trustee shall value the assets comprising the Trust Fund at their fair
market value as of the "valuation date" and may deduct all expenses for which
the Trustee has not yet obtained reimbursement from the Employer or the Trust
Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Administrator shall direct
the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and retire
for the purposes hereof on or after his Normal Retirement Date or Early
Retirement Date. Upon such Normal Retirement Date or Early Retirement Date, all
amounts credited to such Participant's Combined Account shall become
distributable in
-49-
accordance with the further provisions of this Article. However, a Participant
may postpone the termination of his employment with the Employer to a later
date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date,
or as soon thereafter as is practicable, the Administrator shall direct the
distribution of all amounts credited to such Participant's Combined Account in
accordance with the further provisions of this Article.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the further provisions of
this Article, the distribution of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct, in accordance with the further provisions of this Article, the
distribution of any remaining amounts credited to the accounts of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the 58
Administrator may deem desirable. The Administrator's determination of
death and of the right of any person to receive payment shall be
conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6,
the Beneficiary of the Pre-Retirement Survivor Annuity shall be the
Participant's spouse. Except, however, the Participant may designate a
Beneficiary other than his spouse for the Pre-Retirement Survivor Annuity
if:
(1) the Participant and his spouse have validly waived the Pre-
Retirement Survivor Annuity in the manner prescribed in Section 6.6,
and the spouse has waived his or her right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic relations
order" as defined in Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
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In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke
his designation of a Beneficiary or change his Beneficiary by filing
written notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged that the
spouse had the right to limit consent only to a specific Beneficiary and
that the spouse voluntarily elected to relinquish such right. The
Participant may, at any time, designate a Beneficiary for death benefits
payable under the Plan that are in excess of the Pre-Retirement Survivor
Annuity. In the event no valid designation of Beneficiary exists at the
time of the Participant's death, the death benefit shall be payable to his
estate. (e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which he is entitled
under the Plan is effected, his death benefit from such insurance coverage
shall be limited to the standard rated premium which was or should have
been used for such purpose.
(f) In the event of any conflict between the terms of this Plan and
the terms of any Contract issued hereunder, the Plan provisions shall
control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of
a Participant's Total and Permanent Disability, the Administrator, in accordance
with the further provisions of this Article, shall direct the distribution to
such Participant of all amounts credited to such Participant's Combined Account
as though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) In the event of a Participant's termination of employment for any
reason other than retirement, death, or Total and Permanent Disability, the
Administrator may direct that the amount of the Vested portion of such
Terminated Participant's Combined Account be segregated and invested
separately. In the event the Vested portion of a Participant's Combined
Account is not segregated, the amount shall remain in a separate account
for the Terminated Participant and share in allocations pursuant to Section
4.4 until such time as a distribution is made to the Terminated
Participant. The amount of the portion of the Participant's Combined
Account which is not Vested may be credited to a separate account (which
will always share in gains and losses of the Trust Fund) and at such time
as the amount becomes a Forfeiture shall be treated in accordance with the
provisions of the Plan regarding Forfeitures. Regardless of whether
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distributions in kind are permitted, in the event that the amount of the
Vested portion of the Terminated Participant's Combined Account equals or
exceeds the fair market value of any insurance Contracts, the Trustee, when
so directed by the Administrator and agreed to by the Terminated
Participant, shall assign, transfer, and set over to such Terminated
Participant all Contracts on his life in such form or with such
endorsements, so that the settlement options and forms of payment are
consistent 60 with the provisions of Section 6.5. In the event that the
Terminated Participant's Vested portion does not at least equal the fair
market value of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution equal to the
value of the Contracts being assigned or transferred, or the Trustee,
pursuant to the Participant's election, may borrow the cash value of the
Contracts from the Insurer so that the value of the Contracts is equal to
the Vested portion of the Terminated Participant's Combined Account and
then assign the Contracts to the Terminated Participant. Distribution of
the funds due to a Terminated Participant shall be made on the occurrence
of an event which would result in the distribution had the Terminated
Participant remained in the employ of the Employer (upon the Participant's
death, Total and Permanent Disability, Early or Normal Retirement).
However, at the election of the Participant, the Administrator shall direct
that the entire Vested portion of the Terminated Participant's Combined
Account to be payable to such Terminated Participant provided the
conditions, if any, set forth in the Adoption Agreement have been
satisfied. Any distribution under this paragraph shall be made in
accordance with the further provisions of this Article in a manner which is
consistent with and satisfies the provisions of Section 6.5, including but
not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder. Notwithstanding the
above, if the value of a Terminated Participant's Vested benefit derived
from Employer and Employee contributions does not exceed, and at the time
of any prior distribution, has never exceeded $3,500, the Administrator
shall direct that the entire Vested benefit be paid to such Participant in
accordance with the further provisions of this Article in a single lump-sum
without regard to the consent of the Participant or the Participant's
spouse. A Participant's Vested benefit shall not include Qualified
Voluntary Employee Contributions within the meaning of Code Section
72(o)(5)(B) for Plan Years beginning prior to January 1, 1989.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the basis of the
Participant's number of Years of Service according to the vesting schedule
specified in the Adoption Agreement.
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(c) For any Top Heavy Plan Year, one of the minimum top heavy vesting
schedules as elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. The minimum top heavy vesting schedule
applies to all benefits within the meaning of Code Section 411(a)(7) except
those attributable to Employee contributions, including benefits accrued
before the effective date of Code Section 416 and benefits accrued before
the Plan became top heavy. Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status as top heavy changes
for any Plan Year. However, this Section does not apply to the account
balances of any Employee who does not have an Hour of Service after the
Plan has initially become top heavy and the Vested percentage of such
Employee's Participant's Account shall be determined without regard to this
Section 6.4(c). If in any subsequent Plan Year, the Plan ceases to be a
Top Heavy Plan, the Administrator shall continue to use the vesting
schedule in effect while the Plan was a Top Heavy Plan for each Employee
who had an Hour of Service during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any full
or partial termination of the Plan, all amounts credited to the account of
any affected Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding the
vesting schedule specified in the Adoption Agreement, the Vested percentage
of a Participant's Account shall not be less than the Vested percentage
attained as of the later of the effective date or adoption date of this
amendment and restatement. The computation of a Participant's
nonforfeitable percentage of his interest in the Plan 62 shall not be
reduced as the result of any direct or indirect amendment to this Article,
or due to changes in the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the computation of
the Participant's nonforfeitable percentage or if the Plan is deemed
amended by an automatic change to a top heavy vesting schedule, then each
Participant with at least 3 Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable percentage
computed under the Plan without regard to such amendment or change.
Notwithstanding the foregoing, for Plan Years beginning before January 1,
1989, or with respect to Employees who fail to complete at least one (1)
Hour of Service in a Plan Year beginning after December 31, 1988, five (5)
shall be substituted for three (3) in the preceding sentence. If a
Participant fails to make such election, then such Participant shall be
subject to the new vesting schedule.
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The Participant's election period shall commence on the adoption date of
the amendment and shall end 60 days after the latest of: (1) the adoption
date of the amendment, (2) the effective date of the amendment, or (3) the
date the Participant receives written notice of the amendment from the
Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and
such Former Participant had received a distribution of his entire
Vested interest prior to his reemployment, his forfeited account shall
be reinstated only if he repays the full amount distributed to him
before the earlier of five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer or the close of
the first period of 5 consecutive 1-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a separation from service, the time for repayment may not end
earlier than five (5) years after the date of separation. In the
event the Former Participant does repay the full amount distributed to
him, the undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date preceding
his termination. If an employee receives a distribution pursuant to
this section and the employee resumes employment covered under this
plan, the employee's employer-derived account balance will be restored
to the amount on the date of distribution if the employee repays to
the plan the full amount of the distribution attributable to employer
contributions before the earlier of 5 years after the first date on
which the participant is subsequently re-employed by the employer, or
the date the participant incurs 5 consecutive 1-year breaks in service
following the date of the distribution. If a non-Vested Former
Participant was deemed to have received a distribution and such Former
Participant is reemployed by the Employer before five (5) consecutive
1-Year Breaks in Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a 1-Year Break
in Service has occurred, Years of Service shall include Years of
Service prior to his 1-Year Break in Service subject to the following
rules:
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(i) Any Former Participant who under the Plan does not have
a nonforfeitable right to any interest in the Plan resulting from
Employer contributions shall lose credits if his consecutive 1-
Year Breaks in Service equal or exceed the greater of (A) five
(5) or (B) the aggregate number of his pre-break Years of
Service;
(ii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to pre-
break service shall not be increased as a result of post-break
service;
(iii) A Former Participant who is reemployed and who has
not had his Years of Service before a 1-Year Break in Service
disregarded pursuant to (i) above, shall participate in the Plan
as of his date of reemployment;
(iv) If a Former Participant completes a Year of Service (a
1-Year Break in Service previously occurred, but employment had
not terminated), he shall participate in the Plan retroactively
from the first day of the Plan Year during which he completes one
(1) Year of Service.
(h) In determining Years of Service for purposes of vesting under the
Plan, Years of Service shall be excluded as specified in the Adoption
Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a Participant who
is married on the "annuity starting date" and who does not die before
the "annuity starting date" shall receive the value of all of his
benefits in the form of a Joint and Survivor Annuity. The Joint and
Survivor Annuity is an annuity that commences immediately and shall be
equal in value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to the
spouse during the spouse's lifetime at a rate equal to 50% of the rate
at which such benefits were payable to the Participant. This Joint
and Survivor Annuity shall be considered the designated qualified
Joint and Survivor Annuity and automatic form of payment for the
purposes of this Plan. However, the Participant may elect to receive
a smaller annuity benefit with continuation of payments to the spouse
at a rate of sixty-six and two-thirds percent (66 2/3%) or one hundred
percent (100%) of the rate payable to a Participant during his
lifetime which alternative Joint and Survivor Annuity shall be equal
in value to the automatic Joint and 50% Survivor Annuity. An
unmarried Participant shall receive the value of his benefit in the
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form of a life annuity. Such unmarried Participant, however, may
elect in writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an election to waive
the Joint and Survivor Annuity by a married Participant, but without
the spousal consent requirement.
(2) Any election to waive the Joint and Survivor Annuity must be
made by the Participant in writing during the election period and be
consented to by the Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal guardian, even if such
guardian is the Participant, may give consent. Such election shall
designate a Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the
requirement of further consent by the spouse). Such spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Administrator that the required consent cannot be obtained
because there is no spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election
made by the Participant and consented to by his spouse may be revoked
by the Participant in writing without the consent of the spouse at any
time during the election period. The number of revocations shall not
be limited. Any new election must comply with the requirements of
this paragraph. A former spouse's waiver shall not be binding on a
new spouse.
(3) The election period to waive the Joint and Survivor Annuity
shall be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section and Section 6.6, the "annuity
starting date" means the first day of the first period for which an
amount is paid as an annuity, or, in the case of a benefit not payable
in the form of an annuity, the first day on which all events have
occurred which entitles the Participant to such benefit.
(5) With regard to the election, the Administrator shall provide
to the Participant no less than 30 days and no more than 90 days
before the "annuity starting date" a written explanation of:
(i) the terms and conditions of the Joint and Survivor
Annuity, and
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(ii) the Participant's right to make and the effect of an
election to waive the Joint and Survivor Annuity, and
(iii) the right of the Participant's spouse to consent to
any election to waive the Joint and Survivor Annuity, and
(iv) the right of the Participant to revoke such election,
and the effect of such revocation.
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive his benefit in the form of a Joint
and Survivor Annuity, or if such Participant is not married, in the form of
a life annuity, the Administrator, pursuant to the election of the
Participant, shall direct the distribution to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or
more of the following methods which are permitted pursuant to the Adoption
Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide such
installment payments, the Administrator may direct that the
Participant's interest in the Plan be segregated and invested
separately, and that the funds in the segregated account be used for
the payment of the installments. The period over which such payment
is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his
designated Beneficiary);
(3) Purchase of or providing an annuity. However, such annuity
may not be in any form that will provide for payments over a period
extending beyond either the life of the Participant (or the lives of
the Participant and his designated Beneficiary) or the life expectancy
of the Participant (or the life expectancy of the Participant and his
designated Beneficiary).
(c) The present value of a Participant's Joint and Survivor Annuity
derived from Employer and Employee contributions may not be paid without
his written consent if the value exceeds, or has ever exceeded at the time
of any prior distribution, $3,500. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If the value of the
Participant's benefit derived from Employer and Employee contributions does
not exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator may immediately distribute such benefit
without such Participant's consent. No distribution may be made under the
preceding sentence after
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the "annuity starting date" unless the Participant and his spouse consent
in writing to such distribution. Any written consent required under this
paragraph must be obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with Section
6.5(a)(2).
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded at the time of any prior distribution, $3,500
shall require such Participant's consent if such distribution commences
prior to the later of his Normal Retirement Age or age 62. With regard to
this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features and an
explanation of the relative values of the optional forms of benefit
available under the Plan that would satisfy the notice requirements of
Code Section 417.
(2) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to consent, it
shall be deemed an election to defer the commencement of payment of
any benefit. However, any election to defer the receipt of benefits
shall not apply with respect to distributions which are required under
Section 6.5(e).
(3) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
"annuity starting date".
(4) Written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must not be
made more than 90 days before the "annuity starting date".
(5) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to the
distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after January 1, 1985,
whether under the Plan or through the purchase of an annuity Contract,
shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation Section 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed to him not
later than April 1st of the calendar year following the later of (i)
the calendar year in which the Participant attains age 70 1/2 or (ii)
the calendar year
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in which the Participant retires, provided, however, that this clause
(ii) shall not apply in the case of a Participant who is a "five (5)
percent owner" at any time during the five (5) Plan Year period ending
in the calendar year in which he attains age 70 1/2 or, in the case of
a Participant who becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer apply and the
required beginning date shall be the April 1st of the calendar year
following the calendar year in which such subsequent Plan Year ends.
Alternatively, distributions to a Participant must begin no later than
the applicable April 1st as determined under the preceding sentence
and must be made over the life of the Participant (or the lives of the
Participant and the Participant's designated Beneficiary) or, if
benefits are paid in the form of a Joint and Survivor Annuity, the
life expectancy of the Participant (or the life expectancies of the
Participant and his designated Beneficiary) in accordance with
Regulations. For Plan Years beginning after December 31, 1988, clause
(ii) above shall not apply to any Participant unless the Participant
had attained age 70 1/2 before January 1, 1988 and was not a "five (5)
percent owner" at any time during the Plan Year ending with or within
the calendar year in which the Participant attained age 66 1/2 or any
subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder. Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which
provides that the then present value of the payments to be made over
the period of the Participant's life expectancy exceeds fifty percent
(50%) of the then present value of the total payments to be made to
the Participant and his Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall be redetermined annually in accordance with Regulations. If
the Participant or the Participant's spouse elects that recalculations will
be made, then the election, once made, shall be irrevocable. If no
election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables V and VI
of Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-transferable
when distributed. Furthermore, the terms of any annuity Contract purchased
and distributed to a
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Participant or spouse shall comply with all of the requirements of this
Plan.
(h) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his
retirement benefit paid in an alternative method acceptable under Code
Section 401(a) as in effect prior to the enactment of the Tax Equity and
Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has
not terminated employment is not fully Vested in his Participant's Account
and the Participant may increase the Vested percentage in such account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of the distribution,
and
(2) At any relevant time the Participant's Vested portion of the
separate account shall be equal to an amount ("X") determined by the
formula:
X equals P (AB plus D) - D
For purposes of applying the formula: P is the Vested percentage at
the relevant time, AB is the account balance at the relevant time, and
D is the amount of distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested Participant
who dies before the annuity starting date and who has a surviving spouse
shall have the Pre-Retirement Survivor Annuity paid to his surviving
spouse. The Participant's spouse may direct that payment of the Pre-
Retirement Survivor Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment of such
benefit will commence at the time the Participant would have attained the
later of his Normal Retirement Age or age 62. However, the spouse may
elect a later commencement date. Any distribution to the Participant's
spouse shall be subject to the rules specified in Section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity before
the Participant's death must be made by the Participant in writing during
the election period and shall require the spouse's irrevocable consent in
the same manner provided for in Section 6.5(a)(2). Further, the spouse's
consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need
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not be acknowledged, provided the consent of the spouse acknowledges that
the spouse has the right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor Annuity
shall begin on the first day of the Plan Year in which the Participant
attains age 35 and end on the date of the Participant's death. An earlier
waiver (with spousal consent) may be made provided a written explanation of
the Pre-Retirement Survivor Annuity is given to the Participant and such
waiver becomes invalid at the beginning of the Plan Year in which the
Participant turns age 35. In the event a Vested Participant separates from
service prior to the beginning of the election period, the election period
shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant
(and consistent with Regulations), a written explanation of the Pre-
Retirement Survivor Annuity containing comparable information to that
required pursuant to Section 6.5(a)(5). For the purposes of this
paragraph, the term "applicable period" means, with respect to a
Participant, whichever of the following periods ends last:
(1) 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;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual who
becomes a Participant after age 32, the explanation must be provided
by the end of the three-year period beginning with the first day of
the first Plan Year for which the individual is a Participant;
(3) A reasonable period ending after the Plan no longer fully
subsidizes the cost of the Pre-Retirement Survivor Annuity with
respect to the Participant;
(4) A reasonable period ending after Code Section 401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35. For this
purpose, the Administrator must provide the explanation beginning one
year before the separation from service and ending one year after
separation.
(e) The Pre-Retirement Survivor Annuity provided for in this Section
shall apply only to Participants who are credited
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with an Hour of Service on or after August 23, 1984. Former Participants
who are not credited with an Hour of Service on or after August 23, 1984
shall be provided with rights to the Pre-Retirement Survivor Annuity in
accordance with Section 303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator
shall direct the immediate distribution of such amount to the Participant's
spouse. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds, or has ever exceeded at the time of any prior distribution,
$3,500, an immediate distribution of the entire amount may be made to the
surviving spouse, provided such surviving spouse consents in writing to
such distribution. Any written consent required under this paragraph must
be obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6.5(a)(2).
(g) (1) In the event there is an election to waive the Pre-Retirement
Survivor Annuity, and for death benefits in excess of the Pre-
Retirement Survivor Annuity, such death benefits shall be paid to the
Participant's Beneficiary by either of the following methods, as
elected by the Participant (or if no election has been made prior to
the Participant's death, by his Beneficiary) subject to the rules
specified in Section 6.6(h) and the selections made in the Adoption
Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the
Participant or his Beneficiary. After periodic installments
commence, the Beneficiary shall have the right to reduce the
period over which such periodic installments shall be made, and
the cash amount of such periodic installments shall be adjusted
accordingly.
(iii) If death benefits in excess of the Pre-Retirement
Survivor Annuity are to be paid to the surviving spouse, such
benefits may be paid pursuant to (i) or (ii) above, or used to
purchase an annuity so as to increase the payments made pursuant
to the Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant to Section
6.2 is payable in installments, then, upon the death of the
Participant, the Administrator may direct
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that the death benefit be segregated and invested separately, and that
the funds accumulated in the segregated account be used for the
payment of the installments.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant made on or after January 1,
1985, shall be made in accordance with the following requirements and shall
otherwise comply with Code Section 401(a)(9) and the Regulations
thereunder.
(1) If it is determined, pursuant to Regulations, that the
distribution of a Participant's interest has begun and the Participant
dies before his entire interest has been distributed to him, the
remaining portion of such interest shall be distributed at least as
rapidly as under the method of distribution selected pursuant to
Section 6.5 as of his date of death.
(2) If a Participant dies before he has begun to receive any
distributions of his interest in the Plan or before distributions are
deemed to have begun pursuant to Regulations, then his death benefit
shall be distributed to his Beneficiaries in accordance with the
following rules subject to Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be distributed to the
Participant's Beneficiaries by December 31st of the calendar year
in which the fifth anniversary of the Participant's death occurs;
(ii) The 5-year distribution requirement of (i) above shall
not apply to any portion of the deceased Participant's interest
which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion shall be distributed
over the life of such designated Beneficiary (or over a period
not extending beyond the life expectancy of such designated
Beneficiary) provided such distribution begins not later than
December 31st of the calendar year immediately following the
calendar year in which the Participant died;
(iii) However, in the event the Participant's spouse
(determined as of the date of the Participant's death) is his
designated Beneficiary, the provisions of (ii) above shall apply
except that the requirement that distributions commence within
one year of the Participant's death shall not apply. In lieu
thereof, distributions must commence on or before the later of:
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(1) December 31st of the calendar year immediately
following the calendar year in which the Participant died;
or
(2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse
begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, if a
Participant's death benefits are to be paid in the form of a
Pre-Retirement Survivor Annuity, then distributions to the
Participant's surviving spouse must commence on or before
the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year
in which the Participant would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a designated
Beneficiary to be excepted from the 5-year distribution requirement must be
made no later than December 31st of the calendar year following the
calendar year of the Participant's death. Except, however, with respect to
a designated Beneficiary who is the Participant's surviving spouse, the
election must be made by the earlier of:
(1) December 31st of the calendar year immediately following the
calendar year in which the Participant died or, if later, the calendar
year in which the Participant would have attained age 70 1/2; or
(2) December 31st of the calendar year which contains the fifth
anniversary of the date of the Participant's death. An election by a
designated Beneficiary must be in writing and shall be irrevocable as
of the last day of the election period stated herein. In the absence
of an election by the Participant or a designated Beneficiary, the 5-
year distribution requirement shall apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall be redetermined annually as provided in accordance with
Regulations. If the Participant or the Participant's spouse elects to have
life expectancies recalculated, then the election, once made, shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and
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the Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's interest in
the Plan is distributed to such Participant's spouse, the portion of the
distribution attributable to the Participant's Voluntary Contribution
Account shall be in the same proportion that the Participant's Voluntary
Contribution Account bears to the Participant's total interest in the Plan.
(l) Subject to the spouse's right of consent afforded under the Plan,
the restrictions imposed by this Section shall not apply if a Participant
has, prior to January 1, 1984, made a written designation to have his death
benefits paid in an alternative method acceptable under Code Section 401(a)
as in effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a distribution is to be
made, or a series of payments are to commence, on or as of a date, the
distribution or series of payments may be made or begun on such date or as soon
thereafter as is practicable, but in no event later than 180 days after such
date. However, unless a Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs:
(a) the date on which the Participant attains the earlier of age 65
or the Normal Retirement Age specified herein;
(b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or
(c) the date the Participant terminates his service with the
Employer.
In the event directed investment accounts are maintained under this Plan,
the date benefits are to commence shall be the Valuation Date coincident with or
first following the date the Participant becomes eligible for a benefit (subject
to delay of payments for terminated Participants as specified in the Adoption
Agreement). In the event directed investment accounts are not maintained, the
date benefits are to commence shall be the date of eligibility for benefits
(again, subject to delay as provided in the Adoption Agreement).Notwithstanding
the foregoing, the failure of a Participantthe Participant's spouse, to consent
to a distribution pursuant to Section 6.5(d), shall be
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deemed to be an election to defer the commencement of payment of any benefit
sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall remain unpaid solely by reason of
the inability of the Administrator, after sending a registered letter, return
receipt requested, to the last known address, and after further diligent effort,
to ascertain the whereabouts of such Participant or his Beneficiary, the amount
so distributable shall be treated as a Forfeiture pursuant to the Plan. In the
event a Participant or Beneficiary is located subsequent to his benefit being
reallocated, such benefit shall be restored, first from Forfeitures, if any, and
then from an additional Employer contribution if necessary.
6.10 PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans, if elected in the Adoption Agreement, at such
time as a Participant shall have attained the age specified in the Adoption
Agreement, the Administrator, at the election of the Participant, shall direct
the distribution of up to the entire amount then credited to the accounts
maintained on behalf of the Participant. In the event that the Administrator
makes such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption Agreement,
the Administrator, at the election of the Participant, shall direct the
distribution to any Participant in any one Plan Year up to the lesser of
100% of his Participant's Combined Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to satisfy
the immediate and heavy financial need of
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the Participant. Any distribution made pursuant to this Section shall be
deemed to be made as of the first day of the Plan Year or, if later, the
valuation date immediately preceding the date of distribution, and the
account from which the distribution is made shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the distribution
is on account of: (1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152); (2) The purchase (excluding mortgage
payments) of a principal residence for the Participant; (3) Payment of
tuition for the next semester or quarter of post-secondary education for
the Participant, his spouse, children, or dependents; (4) The need to
prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; (5)
any other event which the Commissioner of the IRS has determined to be an
immediate and heavy financial need; or (6) any other event specified in the
Adoption Agreement as constituting an immediate and heavy financial need.
(b) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
(c) No repayment of a distribution made pursuant to this Section
shall be permitted.
6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
reached the "earliest retirement age" under the Plan. For the purposes of this
Section, "alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code Section 414(p).
6.13 SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply to a
Participant in a Profit Sharing Plan or 401(k) Profit Sharing Plan and to any
distribution, made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account attributable solely to
accumulated deductible employee contributions, as defined in Code Section
72(o)(5)(B), and maintained on behalf of a participant in a money purchase
pension plan, (including a target benefit plan):
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(a) The Participant shall be prohibited from electing benefits in the
form of a life annuity;
(b) Upon the death of the Participant, the Participant's entire
Vested account balances will be paid to his or her surviving spouse, or, if
there is no surviving spouse or the surviving spouse has already consented
to waive his or her benefit, in accordance with Section 6.6, to his
designated Beneficiary; and
(c) Except to the extent otherwise provided in this Section and
Section 6.5(h), the other provisions of Sections 6.2, 6.5 and 6.6 regarding
spousal consent and the forms of distributions shall be inoperative with
respect to this Plan. This Section shall not apply to any Participant if
it is determined that this Plan is a direct or indirect transferee of a
defined benefit plan or money purchase plan, or a target benefit plan,
stock bonus or profit sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by the
Employer to invest, manage, and control the Plan assets subject, however,
to the direction of an Investment Manager if the Employer should appoint
such manager as to all or a portion of the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits required
under the Plan to be paid to Participants, or, in the event of their death,
to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish to
the Employer and/or Administrator for each Plan Year a written annual
report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to sign
papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income and in
such securities or property, real
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or personal, wherever situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or preferred, bonds and other
evidences of indebtedness or ownership, and real estate or any interest
therein. The Trustee shall at all times in making investments of the Trust
Fund consider, among other factors, the short and long-term financial needs
of the Plan on the basis of information furnished by the Employer. In
making such investments, the Trustee shall not be restricted to securities
or other property of the character expressly authorized by the applicable
law for trust investments; however, the Trustee shall give due regard to
any limitations imposed by the Code or the Act so that at all times this
Plan may qualify as a qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which the
duties of such bank or trust company shall be of a custodial, clerical and
record-keeping nature.
(c) The Trustee may from time to time transfer to a common,
collective, or pooled trust fund maintained by any corporate Trustee
hereunder pursuant to Revenue Ruling 81-100, all or such part of the Trust
Fund as the Trustee may deem advisable, and such part or all of the Trust
Fund so transferred shall be subject to all the terms and provisions of the
common, collective, or pooled trust fund which contemplate the commingling
for investment purposes of such trust assets with trust assets of other
trusts. The Trustee may withdraw from such common, collective, or pooled
trust fund all or such part of the Trust Fund as the Trustee may deem
advisable.
(d) The Trustee, at the direction of the Administrator and pursuant
to instructions from the individual designated in the Adoption Agreement
for such purpose and subject to the conditions set forth in the Adoption
Agreement, shall ratably apply for, own, and pay all premiums on Contracts
on the lives of the Participants. Any initial or additional Contract
purchased on behalf of a Participant shall have a face amount of not less
than $1,000, the amount set forth in the Adoption Agreement, or the
limitation of the Insurer, whichever is greater. If a life insurance
Contract is to be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than 50% of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. For purposes of this limitation, ordinary life insurance
Contracts are Contracts with both non-decreasing death benefits and non-
increasing premiums. If term insurance or universal life insurance is
purchased with such contributions, the aggregate premium must be 25% or
less of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. If both term
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insurance and ordinary life insurance are purchased with such
contributions, the amount expended for term insurance plus one-half of the
premium for ordinary life insurance may not in the aggregate exceed 25% of
the aggregate Employer contributions and Forfeitures allocated to a
Participant's Combined Account. The 82 Trustee must distribute the
Contracts to the Particpant or convert the entire value of the Contracts at
or before retirement into cash or provide for a periodic income so that no
portion of such value may be used to continue life insurance protection
beyond retirement. Notwithstanding the above, the limitations imposed
herein with respect to the purchase of life insurance shall not apply, in
the case of a Profit Sharing Plan, to the portion of a Participant's
Account that has accumulated for at least two (2) Plan Years.
(e) The Trustee will be the owner of any life insurance Contract
purchased under the terms of this Plan. The Contract must provide that the
proceeds will be payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the Contract to the Participant's
designated Beneficiary in accordance with the distribution provisions of
Article VI. A Participant's spouse will be the designated Beneficiary
pursuant to Section 6.2, unless a qualified election has been made in
accordance with Sections 6.5 and 6.6 of the Plan, if applicable. Under no
circumstances shall the Trust retain any part of the proceeds. However,
the Trustee shall not pay the proceeds in a method that would violate the
requirements of the Retirement Equity Act, as stated in Article VI of the
Plan, or Code Section 401(a)(9) and the Regulations thereunder.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of this Plan, shall
have the following powers and authorities to be exercised in the Trustee's sole
discretion:
(a) To purchase, or subscribe for, any securities or other property
and to retain the same. In conjunction with the purchase of securities,
margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase,
or otherwise dispose of any securities or other property held by the
Trustee, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money
or to inquire into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with
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or without power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments incidental
thereto; to oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities,
and to delegate discretionary powers, and to pay any assessments or charges
in connection therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities, or other property;
(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees,
and to hold any investments in bearer form, but the books and records of
the Trustee shall at all times show that all such investments are part of
the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any part,
of the Trust Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances
as the Trustee may, from time to time, deem to be in the best interests of
the Plan, without liability for interest thereon;
(g) To accept and retain for such time as it may deem advisable any
securities or other property received or acquired by it as Trustee
hereunder, whether or not such securities or other property would normally
be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or defend
suits or legal or administrative proceedings, and to represent the Plan in
all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be
agent or counsel for the Employer;
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(k) To apply for and procure from the Insurer as an investment of the
Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at any
time or from time to time, whatever rights and privileges may be granted
under such annuity, or other Contracts; to collect, receive, and settle for
the proceeds of all such annuity, or other Contracts as and when entitled
to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the options
are traded on and purchased through a national securities exchange
registered under the Securities Exchange Act of 1934, as amended, or, if
the options are not traded on a national securities exchange, are
guaranteed by a member firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or any Affiliated Employer, and to commingle such
assets and make joint or common investments and carry joint accounts on
behalf of this Plan and such other trust or trusts, allocating undivided
shares or interests in such investments or accounts or any pooled assets of
the two or more trusts in accordance with their respective interests;
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem
necessary to carry out the purposes of the Plan.
(r) Directed Investment Account. The powers granted to the Trustee
---------------------------
shall be exercised in the sole fiduciary discretion of the Trustee.
However, if elected in the Adoption Agreement, each Participant may direct
the Trustee to separate and keep separate all or a portion of his interest
in the Plan; and further each Participant is authorized and empowered, in
his sole and absolute discretion, to give directions to the Trustee in such
form as the Trustee may require concerning the investment of the
Participant's Directed Investment Account, which directions must be
followed by the Trustee subject, however, to restrictions on payment of
life insurance premiums. Neither the Trustee nor any other
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persons including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any securities
or other property, real or personal, or to make any suggestions to the
Participant in connection therewith, and the Trustee shall comply as
promptly as practicable with directions given by the Participant hereunder.
Any such direction may be of a continuing nature or otherwise and may be
revoked by the Participant at any time in such form as the Trustee may
require. The Trustee may refuse to comply with any direction from the
Participant in the event the Trustee, in its sole and absolute discretion,
deems such directions improper by virtue of applicable law, and in such
event, the Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
Directed Investment Account.
7.4 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee may, in the
Trustee's sole discretion, make loans to Participants or Beneficiaries under the
following circumstances: (1) loans shall be made available to all Participants
and to Beneficiaries who are parties-in-interest as defined in Section 3(14) of
ERISA on a reasonably equivalent basis; (2) loans shall not be made available to
Highly Compensated Employees in an amount greater than the amount made available
to other Participants; (3) loans shall bear a reasonable rate of interest; (4)
loans shall be adequately secured; and (5) shall provide for periodic repayment
over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or Owner-Employee
unless an exemption for such loan is obtained pursuant to Act Section 408 and
further provided that such loan would not be subject to tax pursuant to Code
Section 4975.
(c) Loans shall not be granted to any Participant that provide for a
repayment period extending beyond such Participant's Normal Retirement Date.
(d) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the Participant) shall be limited
to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one year
period ending on the day before the date on which such loan is made, over
the outstanding balance of loans from the Plan to the Participant on the
date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Employee under the
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Plan. For purposes of this limit, all plans of the Employer shall be
considered one plan. Additionally, with respect to any loan made prior to
January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) Loans shall provide for level amortization with payments to be made
not less frequently than quarterly over a period not to exceed five (5) years.
However, loans used to acquire any dwelling unit which, within a reasonable
time, is to be used (determined at the time the loan is made) as a principal
residence of the Participant shall provide for periodic repayment 87 over a
reasonable period of time that may exceed five (5) years. Notwithstanding the
foregoing, loans made prior to January 1, 1987 which are used to acquire,
construct, reconstruct or substantially rehabilitate any dwelling unit which,
within a reasonable period of time is to be used (determined at the time the
loan is made) as a principal residence of the Participant or a member of his
family (within the meaning of Code Section 267(c)(4)) may provide for periodic
repayment over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for periodic
payments which are made less frequently than quarterly and which do not
necessarily result in level amortization.
(f) An assignment or pledge of any portion of a Participant's interest in
the Plan and a loan, pledge, or assignment with respect to any insurance
Contract purchased under the Plan, shall be treated as a loan under this
Section.
(g) Any loan made pursuant to this Section after August 18, 1985 where the
Vested interest of the Participant is used to secure such loan shall require the
written consent of the Participant's spouse in a manner consistent with Section
6.5(a) provided the spousal consent requirements of such Section apply to the
Plan. Such written consent must be obtained within the 90-day period prior to
the date the loan is made. Any security interest held by the Plan by reason of
an outstanding loan to the Participant shall be taken into account in
determining the amount of the death benefit or Pre-Retirement Survivor Annuity.
However, no spousal consent shall be required under this paragraph if the total
accrued benefit subject to the security is not in excess of $3,500.
(h) With regard to any loans granted or renewed on or after the last day
of the first Plan Year beginning after December 31, 1988, a Participant loan
program shall be established which must include, but need not be limited to, the
following:
(1) the identity of the person or positions authorized to administer
the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
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(4) limitations, if any, on the types and amounts of loans offered,
including what constitutes a hardship or financial need if selected in the
Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate
of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken
to preserve plan assets. Such Participant loan program shall be contained
in a separate written document which, when properly executed, is hereby
incorporated by reference and made a part of this plan. Furthermore, such
Participant loan program may be modified or amended in writing from time to
time without the necessity of amending this Section of the Plan.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of the Trust
Fund. The Trustee shall not be responsible in any way for the application of
such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set forth in the
Trustee's fee schedule (if the Trustee has such a schedule) or as agreed upon in
writing by the Employer and the Trustee. An individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from this Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee, or
its agent, shall furnish to the Employer and Administrator a written statement
of account with respect to the Plan Year for which such contribution was made
setting forth: (a) the net income, or loss, of the Trust Fund; (b) the gains, or
losses, realized by the Trust Fund upon sales or other disposition of the
assets; (c) the increase, or decrease, in the value of the Trust Fund; (d) all
payments and distributions made from the Trust Fund; and (e) such further
information as the Trustee and/or Administrator deems appropriate. The
Employer, forthwith upon its
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receipt of each such statement of account, shall acknowledge receipt thereof in
writing and advise the Trustee and/or Administrator of its approval or
disapproval thereof. Failure by the Employer to disapprove any such statement
of account within thirty (30) days after its receipt thereof shall be deemed an
approval thereof. The approval by the Employer of any statement of account
shall be binding as to all matters embraced therein as between the Employer and
the Trustee to the same extent as if the account of the Trustee had been settled
by judgment or decree in an action for a judicial settlement of its account in a
court of competent jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were parties; provided,
however, that nothing herein contained shall deprive the Trustee of its right to
have its accounts judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the Act and the
regulations thereunder for any Plan Year, the Administrator shall direct the
Trustee to engage on behalf of all Participants an independent qualified public
accountant for that purpose. Such accountant shall, after an audit of the books
and records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists, that are required by
Act Section 103 or the Secretary of Labor to be filed with the Plan's annual
report, are presented fairly in conformity with generally accepted accounting
principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and may, at
the election of the Administrator, be paid from the Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank, insurance
company, or similar institution, regulated and supervised and subject to
periodic examination by a state or federal agency, it shall transmit and certify
the accuracy of that information to the Administrator as provided in Act Section
103(b) within one hundred twenty (120) days after the end of the Plan Year or
such other date as may be prescribed under regulations of the Secretary of
Labor.
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the Employer, at
least thirty (30) days before its effective date, a written notice of his
resignation.
(b) The Employer may remove the Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last
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known address, at least thirty (30) days before its effective date, a written
notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any Trustee, a
successor may be appointed by the Employer; and such successor, upon accepting
such appointment in writing and delivering same to the Employer, shall, without
further act, become vested with all the estate, rights, powers, discretions, and
duties of his predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors prior to the death,
resignation, incapacity, or removal of a Trustee. In the event a successor is
so designated by the Employer and accepts such designation, the successor shall,
without further act, become vested with all the estate, rights, powers,
discretions, and duties of his predecessor with the like effect as if he were
originally named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he shall
furnish to the Employer and Administrator a written statement of account with
respect to the portion of the Plan Year during which he served as Trustee. This
statement shall be either (i) included as part of the annual statement of
account for the Plan Year required under Section 7.7 or (ii) set forth in a
special statement. Any such special statement of account should be rendered to
the Employer no later than the due date of the annual statement of account for
the Plan Year. The procedures set forth in Section 7.7 for the approval by the
Employer of annual statements of account shall apply to any special statement of
account rendered hereunder and approval by the Employer of any such special
statement in the manner provided in Section 7.7 shall have the same effect upon
the statement as the Employer's approval of an annual statement of account. No
successor to the Trustee shall have any duty or responsibility to investigate
the acts or transactions of any predecessor who has rendered all statements of
account required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at
the direction of the Administrator shall transfer the Vested interest, if any,
of such Participant in his account to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
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7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee against any
and all claims, losses, damages, expenses and liabilities the Trustee may incur
in the exercise and performance of the Trustee's powers and duties hereunder,
unless the same are determined to be due to gross negligence or willful
misconduct.
7.12 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act. However, no more than 100%, in the case of a Profit Sharing Plan or
401(k) Plan or 10%, in the case of a Money Purchase Plan or Target Benefit Plan
of the fair market value of all the assets in the Trust Fund may be invested in
"qualifying Employer securities" and "qualifying Employer real property".
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend this Plan
subject to the limitations of this Section. However, any amendment which
affects the rights, duties or responsibilities of the Trustee and Administrator
may only be made with the Trustee's and Administrator's written consent. Any
such amendment shall become effective as provided therein upon its execution.
The Trustee shall not be required to execute any such amendment unless the
amendment affects the duties of the Trustee hereunder.
(b) The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code Sections 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model amendments
published by the Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as an individually designed plan.
An Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirement under Code Section 412(d), will no longer
participate in this Prototype Plan and will be considered to have an
individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by submitting a copy of
the amendment to each Employer who has adopted this Plan after first having
received a ruling or favorable determination from the Internal Revenue Service
that the Plan as amended qualifies under Code Section 401(a) and the Act. For
purposes of this Section, the mass submitter shall be recognized as
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the agent of the 93 sponsoring organization. If the sponsoring organization does
not adopt the amendments made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter plan.
(d) No amendment to the Plan shall be effective if it authorizes or
permits any part of the Trust Fund (other than such part as is required to pay
taxes and administration expenses) to be used for or diverted to any purpose
other than for the exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(e) Except as permitted by Regulations (including Regulation 1.411(d)-4),
no Plan amendment or transaction having the effect of a Plan amendment (such as
a merger, plan transfer or similar transaction) shall be effective if it
eliminates or reduces any "Section 411(d)(6) protected benefit" or adds or
modifies conditions relating to "Section 411(d)(6) protected benefits" the
result of which is a further restriction on such benefit unless such protected
benefits are preserved with respect to benefits accrued as of the later of the
adoption date or effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the Plan in
whole or in part by delivering to the Trustee and Administrator written notice
of such termination. Upon any such full or partial termination all amounts
credited to the affected Participants' Combined Accounts shall become 100%
Vested and shall not thereafter be subject to forfeiture, and all unallocated
amounts shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full or partial termination of the Plan, the Employer shall
direct the distribution of the assets to affected Participants in a manner which
is consistent with and satisfies the provisions of Section 6.5. Distributions
to a Participant shall be made in cash (or in property if permitted in the
Adoption Agreement) or through the purchase of irrevocable nontransferable
deferred commitments from the Insurer. Except as permitted by Regulations, the
termination of the Plan shall not result in the reduction of "Section 411(d)(6)
protected benefits" as described in Section 8.1.
8.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits which
would be received by a Participant of this Plan, in
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the event of a termination of the plan immediately after such transfer, merger
or consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation and such merger or consolidation does not otherwise result in the
elimination or reduction of any "Section 411(d)(6) protected benefits" as
described in Section 8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by executing the
Adoption Agreement in form satisfactory to the Trustee, and it shall provide
such additional information as the Trustee may require. The consent of the
Trustee to act as such shall be signified by its execution of the Adoption
Agreement.
(b) Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate and apart
from that of any other employer and its participants hereunder.
9.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.3 ALIENATION
(a) Subject to the exceptions provided below, no benefit which shall be
payable to any person (including a Participant or his Beneficiary) shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void; and no
such benefit shall in any manner be liable for, or subject to, the debts,
contracts, liabilities, engagements, or torts of any such person, nor shall it
be subject to attachment or legal process for or against such person, and the
same shall not be recognized except to such extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason,
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under any provision of this Plan. At the time a distribution is to be made to
or for a Participant's or Beneficiary's benefit, such proportion of the amount
to be distributed as shall equal such indebtedness shall be paid to the Plan, to
apply against or discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written notice by the
Administrator that such indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or Beneficiary does not
agree that the indebtedness is a valid claim against his Vested Participant's
Combined Account, he shall be entitled to a review of the validity of the claim
in accordance with procedures provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations orders
permitted to be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the extent
provided under a "qualified domestic relations order", a former spouse of a
Participant shall be treated as the spouse or surviving spouse for all purposes
under the Plan.
9.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act
and the laws of the State or Commonwealth in which the Employer's principal
office is located, other than its laws respecting choice of law, to the extent
not pre-empted by the Act.
9.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted by law,
it shall be impossible by operation of the Plan
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or of the Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund maintained
pursuant to the Plan or any funds contributed thereto to be used for, or
diverted to, purposes other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution under a mistake of
fact pursuant to Section 403(c)(2)(A) of the Act, the Employer may demand
repayment of such contribution at any time within one (1) year following the
time of payment and the Trustees shall return such amount to the Employer within
the one (1) year period. Earnings of the Plan attributable to the contributions
may not be returned to the Employer but any losses attributable thereto must
reduce the amount so returned.
9.8 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of and may, at the election
of the Administrator, be paid from the Trust Fund or by the Employer.
9.9 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the Insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
9.10 INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The Insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of
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any funds paid to the Trustee, nor be required to question any actions directed
by the Trustee. Regardless of any provision of this Plan, the Insurer shall not
be required to take or permit any action or allow any benefit or privilege
contrary to the terms of any Contract which it issues hereunder, or the rules of
the Insurer.
9.11 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or
to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer.
9.12 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY The "named
Fiduciaries" of this Plan are (1) the Employer, (2) the Administrator, (3) the
Trustee, and (4) any Investment Manager appointed hereunder. The named
Fiduciaries shall have only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan. In general, the
Employer shall have the sole responsibility for making the contributions
provided for under Section 4.1; and shall have the sole authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's "funding
policy and method"; and to amend the elective provisions of the Adoption
Agreement or terminate, in whole or in part, the Plan. The Administrator shall
have the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The Trustee shall have
the sole responsibility of management of the assets held under the Trust, except
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan. Each named Fiduciary
warrants that any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan, authorizing or providing
for such direction, information or action. Furthermore, each named Fiduciary
may rely upon any such direction, information or action of another named
Fiduciary as being proper under the Plan, and is not required under the Plan to
inquire into the propriety of any such direction, information or action. It is
intended under the Plan that each named Fiduciary shall be responsible for the
proper exercise of its own powers, duties, responsibilities and obligations
under the Plan. No named Fiduciary shall guarantee the Trust Fund in any manner
against investment loss or depreciation in asset value. Any person or group may
serve in more than one Fiduciary capacity. 9.14 HEADINGS
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The headings and subheadings of this Plan have been inserted for convenience of
reference and are to be ignored in any construction of the provisions hereof.
9.15 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if, pursuant to a
timely application filed by or in behalf of the Plan, the Commissioner of
Internal Revenue Service or his delegate should determine that the Plan does not
initially qualify as a tax-exempt plan under Code Sections 401 and 501, and such
determination is not contested, or if contested, is finally upheld, then if the
Plan is a new plan, it shall be void ab initio and all amounts contributed to
the Plan, by the Employer, less expenses paid, shall be returned within one year
and the Plan shall terminate, and the Trustee shall be discharged from all
further obligations. If the disqualification relates to an amended plan, then
the Plan shall operate as if it had not been amended and restated. In the event
that a contribution is made to the Plan conditioned upon qualification of the
Plan as amended, such contribution must be returned to Employer upon the
determination that the amended Plan fails to qualify under the Code.
(b) Except as specifically stated in the Plan, any contribution by the
Employer to the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer may within one (1) year following a final
determination of the disallowance, whether by agreement with the Internal
Revenue Service or by final decision of a court of competent jurisdiction,
demand repayment of such disallowed contribution and the Trustee shall return
such contribution within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount so
returned.
9.16 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner.
9.17 PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10 and Section
6.11 only upon death, Total and Permanent Disability, normal or early
retirement, termination of employment, or upon Plan Termination.
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ARTICLE X
PARTICIPATING EMPLOYERS
10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the consent of the
Employer and Trustee, any Affiliated Employer may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to select the same
Adoption Agreement provisions as those selected by the Employer other than such
items that must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers, as
well as all increments thereof.
(d) The transfer of any Participant from or to an Employer participating in
this Plan, whether he be an Employee of the Employer or a Participating
Employer, shall not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as well as his
accumulated service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(e) Any expenses of the Plan which are to be paid by the Employer or borne
by the Trust Fund shall be paid by each Participating Employer in the same
proportion that the total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the credit of all
Participants.
(f) The determination of top heavy status and the minimum allocations
and vesting required of top heavy plans shall be determined separately for each
employer (within the meaning of Code Sections 414(b), 414(c), 414(m), and
414(o)) which participates in this Plan.
10.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the Trustee
and Administrator for the purpose of this Plan, each Participating Employer
shall be deemed to have
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designated irrevocably the Employer as its agent. Unless the context of the
Plan clearly indicates the contrary, the word "Employer" shall be deemed to
include each Participating Employer as related to its adoption of the Plan.
10.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between Participating
Employers, and in the event of any such transfer, the Employee involved shall
carry with him his accumulated service and eligibility. No such transfer shall
effect a termination of employment hereunder, and the Participating Employer to
which the Employee is transferred shall thereupon become obligated hereunder
with respect to such Employee in the same manner as was the Participating
Employer from whom the Employee was transferred.
10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each Plan Year
shall be allocated among all Participants of all Participating Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
10.6 AMENDMENT
This Plan may be amended by the Employer at any time without the consent of
any other Participating Employer.
10.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or revoke its
participation in the Plan at any time. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate qualified plan for its Employees provided, however, that
no such transfer shall be made if the result is the elimination or reduction of
any "Section 411(d)(6) protected benefits" in accordance with Section 8.1(e). If
no successor is designated, the Trustee shall retain such assets for the
Employees of said Participating Employer pursuant to the provisions of Article
VII hereof. In no such event shall any part
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of the corpus or income of the Trust Fund as it relates to such Participating
Employer be used for or diverted for purposes other than for the exclusive
benefit of the Employees of such Participating Employer.
10.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part from making
a contribution which it would otherwise have made under the Plan by reason of
having no current or accumulated earnings or profits, or because such earnings
or profits are less than the contribution which it would otherwise have made,
then, pursuant to Code Section 404(a)(3)(B), so much of the contribution which
such Participating Employer was so prevented from making may be made, for the
benefit of the participating employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group within the
meaning of Code Section 1504 to the extent of their current or accumulated
earnings or profits, except that such contribution by each such other
Participating Employer shall be limited to the proportion of its total current
and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph. A Participating
Employer on behalf of whose employees a contribution is made under this
paragraph shall not be required to reimburse the contributing Participating
Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary, the provisions
of this Article shall apply with respect to any 401(k) Profit Sharing Plan.
11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 11.2(a), which amount shall be deemed
an Employer's Elective Contribution, plus
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(b) If specified in the Adoption Agreement, a matching contribution
equal to the percentage specified in the Adoption Agreement of the Deferred
Compensation of each Participant eligible to share in the allocations of
the matching contribution, which amount shall be deemed an Employer's Non-
Elective or Elective Contribution as selected in the Adoption Agreement,
plus
(c) If specified in the Adoption Agreement, a discretionary amount,
if any, which shall be deemed an Employer's Non-Elective Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a Qualified Non-
Elective Contribution.
(e) All contributions by the Employer shall be made in cash or in
such property as is acceptable to the Trustee.
(f) To the extent necessary to provide the top heavy minimum
allocations, the Employer shall make a contribution even if it exceeds
current or accumulated Net Profit.
(g) Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from the Employer's general
assets, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash.
The provisions of Department of Labor regulations 2510.3-102 are
incorporated herein by reference. Furthermore, any additional Employer
contributions which are allocable to the Participant's Elective Account for
a Plan Year shall be paid to the Plan no later than the twelve-month period
immediately following the close of such Plan Year.
11.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each Participant may elect
to defer his Compensation which would have been received in the Plan Year,
but for the deferral election, subject to the limitations of this Section
and the Adoption Agreement. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation which is
currently available on or before the date the Participant executed such
election, or if later, the latest of the date the Employer adopts this cash
or deferred arrangement, or the date such arrangement first became
effective. Any elections made pursuant to this Section shall become
effective as soon as is administratively feasible. The amount by which
Compensation is reduced shall be that Participant's Deferred Compensation
and be treated as an Employer Elective Contribution and allocated to that
Participant's Elective Account. Once made, a Participant's election to
reduce Compensation shall remain in effect until
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modified or terminated. Modifications may be made as specified in the
Adoption Agreement, and terminations may be made at any time. Any
modification or termination of an election will become effective as soon as
is administratively feasible.
(b) The balance in each Participant's Elective Account shall be fully
Vested at all times and shall not be subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account and Qualified
Non-Elective Account may be distributable as permitted under the Plan, but
in no event prior to the earlier of:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant, subject to
the limitations of Section 11.8;
(4) the termination of the Plan without the existence at the
time of Plan termination of another defined contribution plan (other
than an employee stock ownership plan as defined in Code Section
4975(e)(7)) or the establishment of a successor defined contribution
plan (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) by the Employer or an Affiliated Employer within
the period ending twelve months after distribution of all assets from
the Plan maintained by the Employer;
(5) the date of the sale by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets (within
the meaning of Code Section 409(d)(2)) with respect to a Participant
who continues employment with the corporation acquiring such assets;
or
(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity that is not an Affiliated Employer
with respect to a Participant who continues employment with such
subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This dollar
limitation shall be
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adjusted annually pursuant to the method provided in Code Section 415(d) in
accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any other plan
maintained by the Employer or from his Participant's Elective Account
pursuant to Section 11.8, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on his behalf
for a period of twelve (12) months following the receipt of the
distribution. Furthermore, the dollar limitation under Code Section 402(g)
shall be reduced, with respect to the Participant's taxable year following
the taxable year in which the hardship distribution was made, by the amount
of such Participant's Deferred Compensation, if any, made pursuant to this
Plan (and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan together
with any elective deferrals (as defined in Regulation 1.402(g)-1(b)) under
another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)),
a salary reduction arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code Section 457, or a
trust described in Code Section 501(c)(18) cumulatively exceed the
limitation imposed by Code Section 402(g) (as adjusted annually in
accordance with the method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the Participant may, not
later than March 1st following the close of his taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator shall direct the Trustee to
distribute such excess amount (and any Income allocable to such excess
amount) to the Participant not later than the first April 15th following
the close of the Participant's taxable year. Distributions in accordance
with this paragraph may be made for any taxable year of the Participant
which begins after December 31, 1986. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall be treated
as a pro rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred Compensation
under the Plan for the taxable year. Any distribution on or before the
last day of the Participant's taxable year must satisfy each of the
following conditions: 107 (1) the Participant shall designate the
distribution as Excess Deferred Compensation; (2) the distribution must be
made after the date on which the Plan received the Excess Deferred
Compensation; and (3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation. For the purpose of this
Section, "Income" means
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the amount of income allocable to a Participant's Excess Deferred
Compensation and shall be equal to the sum of the allocable gain for the
taxable year of the Participant and the allocable gain for the period
between the end of the taxable year of the Participant and the date of
distribution ("gap period"). The income allocable to each such period is
calculated separately and is determined by multiplying the income allocable
to the Participant's Deferred Compensation for the respective period by a
fraction. The numerator of the fraction is the Participant's Excess
Deferred Compensation for the taxable year of the Participant. The
denominator is the balance, as of the last day of the respective period, of
the Participant's Elective Account that is attributable to the
Participant's Deferred Compensation reduced by the gain allocable to such
total amount for the respective period. In lieu of the "fractional method"
described above, a "safe harbor method" may be used to calculate the
allocable income for the "gap period". Under such "safe harbor method",
allocable income for the "gap period" shall be deemed to equal ten percent
(10%) of the income allocable to a Participant's Excess Deferred
Compensation for the taxable year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of determining
the number of calendar months in the "gap period", a distribution occurring
on or before the fifteenth day of the month shall be treated as having been
made on the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the first
day of the next subsequent month. Income allocable to any distribution of
Excess Deferred Compensation on or before the last day of the taxable year
of the Participant shall be calculated from the first day of the taxable
year of the Participant to the date on which the distribution is made
pursuant to either the "fractional method" or the "safe harbor method".
Notwithstanding the above, for the 1987 calendar year, Income during the
"gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any distribution of
Excess Contributions pursuant to Section 11.5(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value of
the Participant's Elective Account shall be used to provide benefits to the
Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section may
be segregated into a separate account for each Participant in a federally
insured savings account, certificate of deposit in a bank or savings and
loan association, money market certificate, or other short-term
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debt security acceptable to the Trustee until such time as the allocations
pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided for herein.
11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as of each
Anniversary Date, or other valuation date, all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions for each Plan Year. Within a reasonable period of time after
the date of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 11.1(a), to each Participant's Elective Account in
an amount equal to each such Participant's Deferred Compensation for
the year.
(2) With respect to the Employer's Matching Contribution made
pursuant to Section 11.1(b), to each Participant's Account, or
Participant's Elective Account as selected in the Adoption Agreement,
in accordance with Section 11.1(b). Except, however, a Participant
who is not credited with a Year of Service during any Plan Year shall
or shall not share in the Employer's Matching Contribution for that
year as provided in the Adoption Agreement. However, for Plan Years
beginning after 1989, if this is a standardized Plan, a Participant
shall share in the Employer's Matching Contribution regardless of
Hours of Service.
(3) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 11.1(c), to each Participant's Account in
accordance with the provisions of Sections 4.4(b)(2) or 4.4(b)(3),
whichever is applicable, and 4.4(k).
(4) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section, to each Participant's Qualified
Non-Elective Contribution Account in the same proportion that each
such Participant's Compensation for the year bears to the total
Compensation of all Participants for such year.
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(c) Notwithstanding anything in the Plan to the contrary, for Plan
Years beginning after December 31, 1988, in determining whether a Non-Key
Employee has received the required minimum allocation pursuant to section
4.4(f) such Non-Key Employee's Deferred Compensation and matching
contributions used to satisfy the "Actual Deferral Percentage" test
pursuant to Section 11.4(a) or the "Actual Contribution Percentage" test of
Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, participants who
terminated employment during the Plan Year shall share in the salary
reduction contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other than
Sections 11.3(d) and 11.3(f)), any Participant who terminated employment
during the Plan Year shall or shall not share in the allocations of the
Employer's Matching Contribution made pursuant to Section 11.1(b), the
Employer's Non-Elective Contributions made pursuant to Section 11.1(c), and
Forfeitures as provided in the Adoption Agreement. Notwithstanding the
foregoing, for Plan Years beginning after 1989, if this is a standardized
Plan, any terminated Participant shall share in such allocations provided
the terminated Participant completed more than 500 Hours of Service.
(f) Notwithstanding any election in the Adoption Agreement to the
contrary, if this is a non-standardized Plan that would otherwise fail to
meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section 11.1(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified Non-
Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) Allocations of the Employer's Contributions and Forfeitures
shall first be made to all active Participants who are employed on the
last day of the Plan Year, regardless of the number of Hours of
Service completed; and
(2) Allocations of the Employer's Contributions and Forfeitures
shall be made to all Participants who terminated employment during the
Plan Year for reasons other than death, disability, or retirement and
who completed more than 500 Hours of Service.
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(3) The group of Participants eligible to share in the
respective contributions for the Plan Year shall be expanded to
include the minimum number of Participants who would not otherwise be
eligible as are necessary to satisfy the applicable test specified
above. The specific participants who shall be come eligible under the
terms of this paragraph shall be those who are actively employed on
the last day of the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of Service
in the Plan Year.
(4) If after application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants eligible
to share for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on the
last day of the Plan Year as are necessary to satisfy the applicable
test. The specific Participants who shall become eligible to share
shall be those Participants, when compared to similarly situated
Participants, who have completed the greatest number of Hours of
Service in the Plan Year before terminating employment.
11.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year beginning after
December 31, 1986, the annual allocation derived from Employer Elective
Contributions and Qualified Non-Elective Contributions to a Participant's
Elective Account and Qualified Non-Elective Account shall satisfy one of
the following tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group shall not
be more than two percentage points. Additionally, the "Actual
Deferral Percentage" for the Highly Compensated Participant group
shall not exceed the "Actual Deferral Percentage" for the Non-Highly
Compensated Participant group multiplied by 2. The provisions of Code
Section 401(k)(3) and Regulation 1.401(k)-1(b) are incorporated herein
by reference. However, for Plan Years beginning after December 31,
1988, to prevent the multiple use of the alternative method described
in (2) above and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section
11.2 and to make Employee contributions or to receive matching
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contributions under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have either his actual
deferral ratio or his actual contribution ratio reduced as elected in
the Adoption Agreement.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-
Highly Compensated Participant group for a Plan Year, the average of the
ratios, calculated separately for each Participant in such group, of the
amount of Employer Elective Contributions and Qualified Non-Elective
Contributions allocated to each Participant's Elective Account and
Qualified Non-Elective Account for such Plan Year, to such Participant's
"414(s) Compensation" for such Plan Year. The actual deferral ratio for
each Participant and the "Actual Deferral Percentage" for each group, for
Plan Years beginning after December 31, 1988, shall be calculated to the
nearest one-hundredth of one percent of the Participant's "414(s)
Compensation". Employer Elective Contributions allocated to each Non-
Highly Compensated Participant's Elective Account shall be reduced by
Excess Deferred Compensation to the extent such excess amounts are made
under this Plan or any other plan maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
the following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be the greater of:
(i) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants without regard to
family aggregation; and
(ii) the ratio determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However, in
applying the $200,000 limit to "414(s) Compensation" for Plan
Years beginning after December 31, 1988, Family Members shall
include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the
Plan Year.
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(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for purposes
of determining the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into account
in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are members
of those family groups that include the Participant are aggregated as
one family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii) as in effect
for Plan Years beginning after December 31, 1988), the cash or deferred
arrangements included in such plans shall be treated as one arrangement.
In addition, two or more cash or deferred arrangements may be considered as
a single arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans and the
plans including such arrangements shall be treated as one arrangement and
as one plan for purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k). For plan years beginning after December 31, 1989, plans
may be aggregated under this paragraph (e) only if they have the same plan
year. Notwithstanding the above, for Plan Years beginning after December
31, 1988, an employee stock ownership plan described in Code Section
4975(e)(7) may not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan satisfies this
Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part of an
employee stock ownership plan as defined in Code Section 4975(e)(7) for
Plan Years beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of determining
the actual deferral ratio with respect to such Highly Compensated
Participant. However, for Plan Years beginning after December 31, 1988, if
the cash or deferred arrangements have different Plan Years, this paragraph
shall be applied by treating all cash or deferred arrangements ending with
or within the same calendar year as a single arrangement.
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11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions and Qualified Non-Elective Contributions do not satisfy one of the
tests set forth in Section 11.4, for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) Within 12 months following the end of each Plan Year, the Highly
Compensated Participant having the highest actual deferral ratio shall have
his portion of Excess Contributions distributed to him until one of the
tests set forth in Section 11.4 is satisfied, or until his actual deferral
ratio equals the actual deferral ratio of the Highly Compensated
Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth in Section 11.4 is
satisfied. For each 115 Highly Compensated Participant, the amount of
Excess Contributions is equal to the Elective Contributions and Qualified
Non-Elective Contributions made on behalf of such Highly Compensated
Participant (determined prior to the application of this paragraph) minus
the amount determined by multiplying the Highly Compensated Participant's
actual deferral ratio (determined after application of this paragraph) by
his "414(s) Compensation". However, in determining the amount of Excess
Contributions to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount shall be reduced
by any Excess Deferred Compensation previously determined to be
distributable to such affected Highly Compensated Participant for his
taxable year ending with or within such Plan Year. Any distribution of
Excess Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are allocable;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions which
relate to such Deferred Compensation. However, any such matching
contributions shall be forfeited in lieu of being distributed;
(iii) shall be made from Qualified Non-Elective
Contributions only to the extent that Excess Contributions exceed
the balance in the Participant's Elective Account attributable to
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Deferred Compensation and Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a distribution
of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and Income.
(3) The determination and correction of Excess Contributions of
a Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be accomplished as
follows:
(i) If the actual deferral ratio for the Highly
Compensated Participant is determined in accordance with Section
11.4(c)(1)(ii), then the actual deferral ratio shall be reduced
as required herein and the Excess Contributions for the family
unit shall be allocated among the Family Members in proportion to
the Elective Contributions of each Family Member that were
combined to determine the group actual deferral ratio.
(ii) If the actual deferral ratio for the Highly
Compensated Participant is determined under Section
11.4(c)(1)(i), then the actual deferral ratio shall first be
reduced as required herein, but not below the actual deferral
ratio of the group of Family Members who are not Highly
Compensated Participants without regard to family aggregation.
The Excess Contributions resulting from this initial reduction
shall be allocated (in proportion to Elective Contributions)
among the Highly Compensated Participants whose Elective
Contributions were combined to determine the actual deferral
ratio. If further reduction is still required, then Excess
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among them in proportion to their
respective Elective Contributions.
(b) Within twelve (12) months after the end of the Plan Year,
the Employer shall make a special Qualified Non-Elective Contribution
on behalf of all Non-Highly Compensated Participants who are employed
at the end of the Plan Year, but without regard to Hours of Service
during the Plan Year in an amount sufficient to satisfy one of the
tests set forth in Section 11.4(a). Such
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contribution shall be allocated to the Participant's Qualified Non-
Elective Account of each Non-Highly Compensated Participant in the
same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all Non-
Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the income
allocable to Excess Contributions which shall equal the sum of the
allocable gain for the Plan Year and the allocable gain for the period
between the end of the Plan Year and the date of distribution ("gap
period"). The income allocable to Excess Contributions for the Plan
Year and the "gap period" is calculated separately and is determined
by multiplying the income for the Plan Year or the "gap period" by a
fraction. The numerator of the fraction is the Excess Contributions
for the Plan Year. The denominator of the fraction is the total of
the Participant's Elective Account attributable to Elective
Contributions and the Participant's Qualified Non-Elective Account as
of the end of the Plan Year or the "gap period", reduced by the gain
allocable to such total amount for the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the
"gap period" shall be deemed to equal ten percent (10%) of the Income
allocable to Excess Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap
period", a distribution occurring on or before the fifteenth day of
the month shall be treated as having been made on the last day of the
preceding month and a distribution occurring after such fifteenth day
shall be treated as having been made on the first day of the next
subsequent month. Notwithstanding the above, for Plan Years which
began in 1987, Income during the "gap period" shall not be taken into
account.
(d) Any amounts not distributed within 2 1/2 months after the
end of the Plan Year shall be subject to the 10% Employer excise tax
imposed by Code Section 4979.
11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years beginning
after the later of the Effective Date of this Plan or December 31, 1986,
for the Highly Compensated Participant group shall not exceed the greater
of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
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(2) the lesser of 200 percent of such percentage for the Non-
Highly Compensated Participant group, or such percentage for the Non-
Highly Compensated Participant group plus 2 percentage points.
However, for Plan Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described in this paragraph
and Code Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 11.2 or any
other cash or deferred arrangement maintained by the Employer or an
Affiliated Employer and to make Employee contributions or to receive
matching contributions under any plan maintained by the Employer or an
Affiliated Employer shall have either his actual deferral ratio or his
actual contribution ratio as elected in the Adoption Agreement. The
provisions of Code Section 401(m) and Regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect to the Highly
Compensated Participant group and Non-Highly Compensated Participant group,
the average of the ratios (calculated separately for each Participant in
each group) of: 119 (1) the sum of Employer matching contributions made
pursuant to Section 11.1(b) (to the extent such matching contributions are
not used to satisfy the tests set forth in Section 11.4) and voluntary
Employee contributions made pursuant to Section 4.8 on behalf of each such
Participant for such Plan Year; to (2) the Participant's "414(s)
Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
11.7(d), only Employer matching contributions contributed to the Plan prior
to the end of the succeeding Plan Year shall be considered. In addition,
the Administrator may elect to take into account, with respect to Employees
eligible to have Employer matching contributions made pursuant to Section
11.1(b) or voluntary Employee contributions made pursuant to Section 4.8
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer.
Such elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation
1.401(m)-1(b)(2) which is incorporated herein by reference. However, for
Plan Years beginning after December 31, 1988, the Plan Year must be the
same as the plan year of the plan to which the elective deferrals and the
qualified non-elective contributions are made.
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(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Employee is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the
following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be the greater of:
(i) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent
such matching contributions are not used to satisfy the tests set
forth in Section 11.4) and "414(s) Compensation" of all eligible
Family Members who are Highly Compensated Participants without
regard to family aggregation; and
(ii) the ratio determined by aggregating Employer matching
contributions made pursuant to Section 11.1(b) (to the extent
such matching contributions are not used to satisfy the tests set
forth in Section 11.4) and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s) Compensation"
for Plan Years beginning after December 31, 1988, Family Members
shall include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the
Plan Year.
(2) The Employer matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions are not used to
satisfy the tests set forth in Section 11.4) and "414(s) Compensation"
of all Family Members shall be disregarded for purposes of determining
the "Actual Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in paragraph
(1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are members
of those family groups that include the Participant are aggregated as
one family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated as one
plan for
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purposes of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii) as in effect for Plan
Years beginning after December 31, 1988), such plans shall be treated as
one plan. In addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be considered
as a 121 single plan for purposes of determining whether or not such plans
satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such a case, the
aggregated plans must satisfy this Section and Code Sections 401(a)(4),
410(b) and 401(m) as though such aggregated plans were a single plan. For
plan years beginning after December 31, 1989, plans may be aggregated under
this paragraph only if they have the same plan year. Notwithstanding the
above, for Plan Years beginning after December 31, 1988, an employee stock
ownership plan described in Code Section 4975(e)(7) may not be aggregated
with this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two or
more plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan Years beginning
after December 31, 1988, if the plans have different plan years, this
paragraph shall be applied by treating all plans ending with or within the
same calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any
Employee eligible to have matching contributions made pursuant to Section
11.1(b) (whether or not a deferred election was made or suspended pursuant
to Section 11.2(e)) allocated to his account for the Plan Year or to make
salary deferrals pursuant to Section 11.2 (if the Employer uses salary
deferrals to satisfy the provisions of this Section) or voluntary Employee
contributions pursuant to Section 4.8 (whether or not voluntary Employee
contributions are made) allocated to his account for the Plan Year.
(h) For purposes of this Section, "Matching Contribution" shall mean
an Employee contribution made to the Plan, or to a contract described in
Code Section 403(b), on behalf of a Participant on account of an Employee
contribution made by such Participant, or on account of a participant's
deferred compensation, under a plan maintained by the Employer.
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11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after December 31,
1986, the "Actual Contribution Percentage" for the Highly Compensated
Participant group exceeds the "Actual Contribution Percentage" for the Non-
Highly Compensated Participant group pursuant to Section 11.6(a), the
Administrator (on or before the fifteenth day of the third month following
the end of the Plan Year, but in no event later than the close of the
following Plan Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution ratio, his
portion of Excess Aggregate Contributions (and Income allocable to such
contributions) or, if forfeitable, forfeit such non-Vested Excess Aggregate
Contributions attributable to Employer matching contributions (but not
Income allocable to such Forfeitures) until either one of the tests set
forth in Section 11.6(a) is satisfied, or until his actual contribution
ratio equals the actual contribution ratio of the Highly Compensated
Participant having the second highest actual contribution ratio. This
process shall continue until one of the tests set forth in Section 11.6(a)
is satisfied. The distribution and/or Forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Employer matching contributions distributed and/or
forfeited pursuant to Section 11.5(a)(1);
(2) Voluntary Employee contributions;
(3) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire amount of
Excess Aggregate Contributions (and Income) shall be treated as a pro rata
distribution of Excess Aggregate Contributions and Income. Distribution of
Excess Aggregate Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income). Forfeitures
of Excess Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes of
Code Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year, the excess
of: (1) the aggregate amount of Employer matching contributions made
pursuant to Section 11.1(a) (to the extent such contributions are taken
into account pursuant to Section 11.6(a)), and any Qualified Non-Elective
Contributions or elective deferrals taken into account
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pursuant to Section 11.6(c) actually made on behalf of the Highly
Compensated Participant group for such Plan Year, over (2) the maximum
amount of such contributions permitted under the limitations of Section
11.6(a).
(e) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.6(a)) and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to Section
11.6(c) on behalf of the Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed the
amount of Employer matching contributions made pursuant to Section 11.1(b)
(to the extent taken into account pursuant to Section 11.6(a)) and any
Qualified Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) on behalf of such Highly Compensated
Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate Contributions
with respect to any Plan Year shall be made after first determining the
Excess Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section 401(k))
maintained by the Employer that ends with or within the Plan Year.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family aggregation rules shall be
accomplished as follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance with Section 11.6(d)(1)(ii),
then the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken
into account pursuant to Section 11.6(a)) and any Qualified Non-
Elective Contributions or elective deferrals taken into account
pursuant to Section 11.6(c) of each Family Member that were combined
to determine the group actual contribution ratio.
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(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 11.6(d)(1)(i), then the actual
contribution ratio shall first be reduced, as required herein, but not
below the actual contribution ratio of the group of Family Members who
are not Highly Compensated Participants without regard to family
aggregation. The Excess Aggregate Contributions resulting from this
initial reduction shall be allocated among the Highly Compensated
Participants whose Employer matching contributions made pursuant to
Section 11.1(b) (to the extent taken into account pursuant to Section
11.6(a)) and any Qualified 125 Non-Elective Contributions or elective
deferrals taken into account pursuant to Section 11.6(c) were combined
to determine the actual contribution ratio. If further reduction is
still required, then Excess Aggregate Contributions resulting from
this further reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated among them
in proportion to their respective Employer matching contributions made
pursuant to Section 11.1(b) (to the extent taken into account pursuant
to Section 11.6(a)) and any Qualified Non-Elective Contributions or
elective deferrals taken into account pursuant to Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special Qualified Non-
Elective Contribution on behalf of Non-Highly Compensated Participants who
are employed at the end of the Plan Year, but without regard to Hours of
Service in an amount sufficient to satisfy one of the tests set forth in
Section 11.6. Such contribution shall be allocated to the Participant's
Qualified Non-Elective Account of each Non-Highly Compensated Participant
in the same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all Non-Highly
Compensated Participants. A separate accounting shall be maintained for the
purpose of excluding such contributions from the "Actual Deferral
Percentage" tests pursuant to Section 11.4.
(i) For purposes of this Section, "Income" means the income allocable
to Excess Aggregate Contributions which shall equal the sum of the
allocable gain for the Plan Year and the allocable gain for the period
between the end of the Plan Year and the date of distribution ("gap
period"). The income allocable to Excess Aggregate Contributions for the
Plan Year and the "gap period" is calculated separately and is determined
by multiplying the income for the Plan Year or the "gap period" by a
fraction. The numerator of the fraction is the Excess Aggregate
Contributions for the Plan Year. The denominator of the fraction is the
total Participant's Account and Voluntary Contribution Account attributable
to Employer matching contributions subject to Section 11.6, voluntary
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Employee contributions made pursuant to Section 4.8, and any Qualified Non-
Elective Contributions and elective deferrals taken into account pursuant
to Section 11.6(c) as of the end of the Plan Year or the "gap period",
reduced by the gain allocable to such total amount for the Plan Year or the
"gap period". In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income allocable
to Excess Aggregate Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap period",
a distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and a
distribution occurring after such fifteenth day shall be treated as having
been made on the first day of the next subsequent month. Notwithstanding
the above, for Plan Years which began in 1987, Income during the "gap
period" shall not be taken into account.
11.8 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan Year up
to the lesser of (1) 100% of his accounts as specified in the Adoption
Agreement valued as of the last Anniversary Date or other valuation date or
(2) the amount necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this Section shall
be deemed to be made as of the first day of the Plan Year or, if later, the
valuation date immediately preceding the date of distribution, and the
account from which the distribution is made shall be reduced accordingly.
Withdrawal under this Section shall be authorized only if the distribution
is on account of one of the following or any other items permitted by the
Internal Revenue Service: (1) Medical expenses described in Code Section
213(d) incurred by the Participant, his spouse, or any of his dependents
(as defined in Code Section 152); 127 (2) The purchase (excluding mortgage
payments) of a principal residence for the Participant; (3) Payment of
tuition for the next semester or quarter of post-secondary education for
the Participant, his spouse, children, or dependents; (4) The need to
prevent the eviction of the Participant from his principal residence or
foreclosure on the mortgage of the Participant's principal residence; (5)
any other event which the Commissioner of the IRS has determined to be an
immediate and heavy financial need; or (6) any other event specified in the
Adoption Agreement as constituting an immediate and heavy financial need.
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(b) No distribution shall be made pursuant to this Section unless the
Administrator, based upon the Participant's representation and such other
facts as are known to the Administrator, determines that all of the
following conditions are satisfied: (1) The distribution is not in excess
of the amount of the immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer; (3) The Plan, and all other plans maintained by
the Employer, provide that the Participant's elective deferrals and
voluntary Employee contributions will be suspended for at least twelve (12)
months after receipt of the hardship distribution; and (4) The Plan, and
all other plans maintained by the Employer, provide that the Participant
may not make elective deferrals for the Participant's taxable year
immediately following the taxable year of the hardship distribution in
excess of the applicable limit under Code Section 402(g) for such next
taxable year less the amount of such Participant's elective deferrals for
the taxable year of the hardship distribution.
(c) Notwithstanding the above, distributions from the Participant's
Elective Account and Qualified Non-Elective Account pursuant to this
Section shall be limited solely to the Participant's Deferred Compensation
and any income attributable thereto credited to the Participant's Elective
Account as of the Plan's valuation date coincident with or first preceding
December 31, 1988.
(d) Any distribution made pursuant to this Section shall be made in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements of
Code Sections 411(a)(11) and 417 and the Regulations thereunder.
(e) No repayment of a distribution made pursuant to this Section
shall be permitted.
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AMENDMENT NUMBER ONE TO
THE EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
DEFINED CONTRIBUTION PLAN AND TRUST
The Employers Life Insurance Company of Wausau Defined Contribution Plan and
Trust is hereby amended as follows:
1. Section 1.9 is amended by replacing the first paragraph with the following
paragraphs:
"Compensation" with respect to any Participant means one of the following
as elected in the Adoption Agreement. However, compensation for any Self-
Employed Individual shall be equal to his Earned Income.
i. Information required to be reported under sections 6041, 6051 and 6052
(Wages, Tips and Other Compensation Box on Form W-2). Compensation is
defined as wages as defined in 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 sections 6041(d) and
6051(a)(3) of the Code. Compensation must be determined without regard
to any rules under 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 section 3401(a)(2)).
ii. Section 3401(a) wages. Compensation is defined as wages within the
meaning of section 3401(a) for the purposes of income tax withholding
at the source but determined without regard to any rules 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 section 3401(a)(2)).
iii. 415 safe-harbor compensation. Compensation is defined as wages,
salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment
with the employer maintaining the plan to the extent that the amounts
are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense
allowances under a nonaccountable plan (as described in 1.62-2(c)),
and excluding the following:
a. Employer contributions to a plan of deferred compensation which
are not includible in the employee's gross income for the taxable
year in
which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are
deductible by the employee, or any distributions from a plan of
deferred compensation;
b. Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
c. Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of the
employee).
If, in connection with the adoption of this or any other amendment, the
definition of Compensation has been modified, then, for Plan Years prior to
the Plan Year which includes the adoption date of such amendment,
Compensation means compensation determined pursuant to the Plan then in
effect.
2. Section 1.14 is amended in its entirety to read as follows:
"Elective Contribution" means the Employer's contributions to the Plan that
are made pursuant to the Participant's deferral election pursuant to Section
11.2, excluding any such amounts distributed as "excess annual additions"
pursuant to Section 4.4. In addition, if selected in E3 of the Adoption
Agreement, the Employer's matching contribution shall or shall not be considered
an Elective Contribution for purposes of the Plan, as provided in Section
11.1(b). Elective Contributions shall be subject to the requirements of Sections
11.2(b) and 11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation 1.401(k)-1(b)(3), the provisions of which are
specifically incorporated herein by reference.
3. Section 1.20 is amended in its entirety to read as follows:
"Excess Deferred Compensation" means, with respect to any taxable year of a
Participant, the excess of the aggregate amount of such Participant's Deferred
Compensation and the elective deferrals pursuant to Section 11.2(f) actually
made on behalf of such Participant for such taxable year, over the dollar
limitation provided for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as an
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"annual addition" pursuant to Section 4.4 when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year.
4. Section 1.26 is amended in its entirety to read as follows:
5. Section 1.22 is amended in its entirety to read as follows:
"414(s) Compensation" with respect to any Employee means his Compensation
as defined in Section 1.9. However, for purposes of this Section, Compensation
shall be Compensation paid and, if selected in the Adoption Agreement, shall
only be recognized as of an Employee's effective date of participation. If, in
connection with the adoption of this or any other amendment, the definition of
"414(s) Compensation" has been modified, then, for Plan Years prior to the Plan
Year which includes the adoption date of such amendment, "414(s) Compensation"
means compensation determined pursuant to the Plan then in effect.
6. Section 1.27 ("415 Compensation") is amended by the addition of the
following paragraph:
7. Section 1.23 ("415 Compensation") is amended by the addition of the
following paragraph:
If, in connection with the adoption of this or any other amendment, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
the Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then in effect.
8. Section 4.4(a)(4) and 4.4(a)(4)(i) are amended to read as follows:
(4) If there is an excess amount pursuant to Section 4.4(a)(2) or Section
4.5, the excess will be disposed of in one of the following manners, as
uniformly determined by the Plan Administrator for all Participants
similarly situated:
(i) Any Deferred Compensation or nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess Amount
will be distributed to the Participant;
9. Section 4.4(f)(2) is amended in its entirety to read as follows:
Compensation means a Participant's Compensation as elected in the Adoption
Agreement. However, regardless of any selection made in the Adoption Agreement,
"415 Compensation" shall exclude compensation which is not currently includible
in the Participant's
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gross income by reason of the application of Code Sections 125, 402(a)(8),
402(h)(1)(B), or 403(b).
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation year is
the compensation actually paid or made available during such limitation year.
Notwithstanding the preceding sentence, compensation for a participant in a
defined contribution plan who is permanently and totally disabled (as defined in
section 22(e)(3) of the Internal Revenue Code) is the compensation such
participant would have received for the limitation year if the participant had
been paid at the rate of compensation paid immediately before becoming
permanently and totally disabled; such imputed compensation for the disabled
participant may be taken into account only if the participant is not a Highly
Compensated Employee and contributions made on behalf of such participant are
nonforfeitable when made.
10. Section 4.5(a) is amended in its entirety to read as follows:
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual Compensation, 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 Participant under the limits of
Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, the "annual additions" under this Plan would cause the
maximum provided in Section 4.4 to be exceeded, the Administrator shall treat
the excess in accordance with Section 4.4(a)(4).
11. Sections 6.11(a)(1) and (a)(4) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by the
Participant, his spouse, or any of his dependents (as defined in Code Section
152) or expenses necessary for these persons to obtain medical care;
(4) Payment of tuition and related educational fees for the next 12 months
of post-secondary education for the Participant, his spouse, children, or
dependents;
12. Section 7.10 is amended by the addition of the following paragraphs:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time
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and manner prescribed by the Administrator, specify the amount to be directly
transferred and the "eligible retirement plan" to receive the transfer. Any
portion of a distribution which is not transferred shall be distributed to the
Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not eligible
rollover distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise be
includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement
plan" means an individual retirement account as described in Code Section
408(a), an individual retirement annuity as described in Code Section 408(b), an
annuity plan as described in Code Section 403(a), or a defined contribution plan
as described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however, distributions to the
surviving spouse may only be transferred to an individual retirement account or
individual retirement annuity. For purposes of subsection (a), a spouse or
former spouse who is the alternate payee under a qualified domestic relations
order as defined in Code Section 414(p) will be treated as the Participant.
13. Section 11.2(d) is amended in its entirety to read as follows:
(d) In any Plan Year beginning after December 31, 1986, a
Participant's Deferred Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this Plan shall not exceed
the limitation imposed by Code Section 402(g), as in effect for the calendar
year in which such Plan Year began. If such dollar limitation is exceeded solely
from elective deferrals made under this Plan or any other Plan maintained by the
Employer, a Participant will be deemed to have notified the Administrator of
such excess amount which shall be distributed in a manner consistent with
Section 11.2(f). This dollar limitation shall be adjusted annually pursuant to
the method provided in Code Section 415(d) in accordance with Regulations.
14. Section 11.2(f) is amended by the addition of the following paragraph
after paragraph (f)(3) to read as follows:
Any distribution under this Section shall be made first from unmatched
Deferred Compensation and, thereafter, simultaneously from Deferred Compensation
which is matched and matching
-5-
contributions which relate to such Deferred Compensation. However, any such
matching contributions which are not Vested shall be forfeited in lieu of being
distributed.
15. Section 11.2(f) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
16. Section 11.5(c) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
17. Section 11.6(c) is amended in its entirety to read as follows:
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section 11.7(d),
only Employer matching contributions (excluding matching contributions forfeited
or distributed pursuant to Section 11.2(f), 11.5(a), or 11.7(a)) contributed to
the Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect to
Employees eligible to have Employer matching contributions made pursuant to
Section 11.1(b) or voluntary Employee contributions made pursuant to Section 4.7
allocated to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2) which is
incorporated herein by reference. However, for Plan Years beginning after
December 31, 1988, the Plan Year must be the same as the plan year of the plan
to which the elective deferrals and the qualified non-elective contributions are
made.
18. Section 11.7(i) is amended by the addition of the following paragraph
as the second to the last paragraph of such subsection:
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Notwithstanding the above, for any distribution under this Section
which is made after August 15, 1991, such distribution shall not include any
Income for the "gap period". Further provided, for any distribution under this
Section which is made after August 15, 1991, the amount of Income may be
computed using a reasonable method that is consistent with Section 4.3(c),
provided such method is used consistently for all Participants and for all such
distributions for the Plan Year.
19. Sections 11.8(a)(1) and (a)(3) are amended in their entirety to read as
follows:
(1) Medical expenses described in Code Section 213(d) incurred by
the Participant, his spouse, or any of his dependents (as defined in Code
Section 152) or expenses necessary for these persons to obtain medical care;
(3) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Participant, his spouse, children, or
dependents; or
20. Section 11.8(c)(1) is amended in its entirety to read as follows:
(1) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Participant. The amount of the immediate and
heavy financial need may include any amounts necessary to pay any federal, state
or local income taxes or penalties reasonably anticipated to result from the
distribution.
21. Article XI is amended by the addition of the following:
Notwithstanding anything in this Article to the contrary, effective as
of the Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code Section
414(q)(6).
22. Section E1a. of the Adoption Agreement is amended in its entirety to
read as follows:
Compensation with respect to any Participant means:
1. ( ) Wages, Tips and other Compensation (Box 10 on Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding purposes).
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3. ( ) 415 Safe-harbor compensation.
AND Compensation
( ) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses,
deferred compensation, and welfare benefits.
23. Section E3 of the 401(k) Adoption Agreement(s) is amended by the
addition of the following:
( ) Notwithstanding anything in the Plan to the contrary, all
matching contributions which relate to distributions of Excess
Deferred Compensation, Excess Contributions and Excess Aggregate
Contributions shall be Forfeited. (Select this option only if it
is applicable.)
NOTE: THIS AMENDMENT ONLY NEEDS TO BE EXECUTED BELOW BY THE EMPLOYER IF THE PLAN
IS BEING AMENDED TO UTILIZE THE MODIFICATIONS MADE TO SECTION E1 OR E3 OF THE
ADOPTION AGREEMENT.
IN WITNESS WHEREOF, the Employer hereby causes this amendment to be
executed on this _____ day of ____________________, 19___.
EMPLOYER: PARTICIPATING EMPLOYER:
- -------------------------------- -----------------------------------
(enter name) (enter name)
By: By:
----------------------------- --------------------------------
-8-
NOTICE TO INTERESTED PARTIES
I. GENERAL INFORMATION
Notice to Employees or Participants. Your Employer has amended your
retirement plan effective as of ___________________.
Name of Plan:
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Plan Number:
-----
Opinion Letter Number:
-----------
Name and address of Employer:
----------------------------------
----------------------------------
----------------------------------
Employer Identification Number:
--------------
Name and Address of Plan Administrator:
----------------------------------
----------------------------------
----------------------------------
( ) No other Employers have adopted the provisions of the Plan.
( ) The following are other Employers who have adopted the
provisions of the Plan:
The Employer does not intend to submit this Plan to the Internal
Revenue Service for an advance determination as to whether the Plan qualifies
under Section 401 and 403(a) of the Internal Revenue Code of 1986, with respect
to its amendment.
A determination letter for the Plan ____________ (has/has not) previously been
issued.
All Employees will be eligible to participate when age and service
requirements, if applicable, are satisfied except for the following (select all
that apply):
( ) Employees who are paid on a salary only basis.
( ) Employees who derive their total compensation in the form of
commissions or sales incentives.
( ) Employees who are paid on an hourly only basis.
( ) Employees whose employment is governed by a collective
bargaining agreement under which retirement benefits were the
subject of good faith bargaining.
( ) Highly Compensated Employees.
( ) Non-resident aliens who have no earned income from sources
within the United States.
( ) Other:
------------------------------------------------
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II. RIGHTS OF INTERESTED PARTIES
You have the right to submit to the Key District Director, at the
address below, either individually or jointly with other interested parties,
your comments as to whether this plan meets the qualification requirements of
the Internal Revenue Code. You may instead, individually or jointly with other
interested parties, request the Department of Labor to submit, on your behalf,
comments to the Key District Director regarding qualification of the plan. If
the Department declines to comment on all or some of the matters you raise, you
may, individually, or jointly if your request was made to the Department
jointly, submit your comments on these matters directly to the Key District
Director.
III. REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR
The Department of Labor may not comment on behalf of interested parties
unless requested to do so by the lesser of 10 employees or 10 percent of the
employees who qualify as interested parties. The number of persons needed for
the Department to comment with respect to this plan is _____. If you request the
Department to comment, your comment must be in writing and must specify the
matters upon which comments are requested, and must also include:
(a) the name, address and I.D. Number of the applicant;
(b) the opinion letter number;
(c) the name of the plan, the plan identification number, and
the name and address of the plan administrator; and
(d) the number of persons needed for the Department to
comment.
A request to the Department to comment should be addressed as follows:
Deputy Assistant Secretary
Pension and Welfare Benefits Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ATTN: 3001 Comment Request
IV. COMMENTS TO THE INTERNAL REVENUE SERVICE
Comments submitted by you to the Key District Director must be in
writing and received by him by ____________________ (the 75th day after the plan
or amendment is adopted). However, if there are matters that you request the
Department of Labor to comment upon your behalf, and the Department declines,
you may submit comments on these matters to the Key District Director to be
received by him within 15 days from the time the Department notifies you that it
will not comment on a particular matter, or by ____________________ (the 75th
day after the plan or amendment is adopted), whichever is later, but in no event
later than ____________________ (the 90th day after the plan or amendment is
adopted). A request to the Department of Labor to comment on your behalf must be
received by ____________________ (the 45th day after the plan or amendment is
adopted) if you wish to preserve your right to comment on a matter upon which
the Department declines to comment, or by ____________________ (the 55th day
after the plan or amendment is adopted) if you wish to waive that right.
V. ADDITIONAL INFORMATION
Detailed instructions regarding the requirements for notification of
interested parties may be found in Sections 16, 17, and 18 of Revenue Procedure
92-6. Additional information concerning this amendment (including where
applicable, a description of the circumstances which may result in ineligibility
or loss of benefits; a description of the source of financing of the plan; and
copies of Section 16 of Revenue Procedure 92-6) is available at the company's
principal and/or local office during the hours of 10:00 a.m to 3:00 p.m. for
inspection and copying. (There is a nominal charge for copying and/or mailing.)
Key District Having Jurisdiction Over Plan:
( ) Internal Revenue Service
EP/EO Division
P.O. Box 941
Atlanta, GA 30370
( ) Internal Revenue Service
EP/EO Division
P.O. Box 17288
Room 713
Baltimore, Md 21203
( ) Internal Revenue Service
EP/EO Division
P.O. Box 1680
Brooklyn, NY 11202
( ) Internal Revenue Service
EP/EO Division
P.O. Box 3159
Cincinnati, OH 45201
( ) Internal Revenue Service
EP/EO Division
230 S. Dearborn Street
Chicago, IL 60604
( ) Internal Revenue Service
EP/EO Division
1100 Commerce Street
Dallas, TX 75242
( ) Internal Revenue Service
EP Application Receiving
P.O. Box 2350
Los Angeles, CA 90053-0536
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of ______________________________________
(the Corporation) hereby certifies that the following resolutions were duly
adopted by the board of directors of the Corporation on ____________________,
and that such resolutions have not been modified or rescinded as of the date
hereof:
RESOLVED, that the amendment to the __________________________________
(Name of Plan) is hereby approved and adopted.
The undersigned further certifies that attached hereto as Exhibit A is
a true copy of the amendment approved and adopted in the foregoing resolution.
---------------------------------
Secretary
Date:
----------------------------
SUMMARY OF MATERIAL MODIFICATIONS
Your Employer has amended your retirement plan. This is a summary of the
modifications that were made. It should be read in conjunction with the Summary
Plan Description that has already been distributed to you.
The definition of Compensation has been modified as selected below. However,
except as provided below, any exclusions from Compensation that are set forth in
the Summary Plan Description will still apply.
( ) Your total wages for the applicable period that are
subject to withholding taxes.
( ) Your total wages for the applicable period that are
subject to federal income tax.
In addition, Compensation
( ) will
( ) will not
exclude expense allowances, fringe benefits, moving expenses, deferred
compensation, and welfare benefits.
The hardship provisions of the plan have been modified as follows:
( ) N/A plan does not permit hardship distributions.
( ) The amount of a hardship distribution may include the amount of
any applicable taxes and penalties which may apply because of the
distribution.
In addition, the events which may qualify for a hardship include
the payment of tuition and related education fees for the next 12
months of post-secondary education for you, your spouse, your
children, or any of your dependents and payments for medical
expenses (or to obtain medical care) for you or your dependents.
AMENDMENT TO
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
DEFINED CONTRIBUTION PLAN AND TRUST
1. Section 1.9 is amended by the addition of the following:
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2. Section 6.13 is amended by the addition of the following:
If a distribution is one to which Sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less than 30
days after the notice required under Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
(1) the plan administrator clearly informs the participant that the
participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and
(2) the participant, after receiving the notice, affirmatively elects a
distribution.
3. Section 7.10 is amended by the addition of the following:
(a) Notwithstanding any provision of the plan to the contrary, with
respect to distributions made after December 31, 1992, a Participant shall be
permitted to elect to have any "eligible rollover distribution" transferred
directly to an "eligible retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to apply to the direct
transfer option. The Participant shall, in the time and manner prescribed by the
Administrator, specify the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a distribution which is
not transferred shall be distributed to the Participant.
(b) For purposes of this Section, the term "eligible rollover
distribution" means any distribution other than a distribution of substantially
equal periodic payments over the life or life expectancy of the Participant (or
joint life or joint life expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten years or more.
Amounts required to be distributed under Code Section 401(a)(9) are not eligible
rollover distributions. The direct transfer option described in subsection (a)
applies only to eligible rollover distributions which would otherwise be
includible in gross income if not transferred.
(c) For purposes of this Section, the term "eligible retirement plan"
means an individual retirement account as described in Code Section 408(a), an
individual retirement annuity as described in Code Section 408(b), an annuity
plan as described in Code Section 403(a), or a defined contribution plan as
described in Code Section 401(a) which is exempt from tax under Code Section
501(a) and which accepts rollover distributions.
(d) The election described in subsection (a) also applies to the surviving
spouse after the Participant's death; however, distributions to the surviving
spouse may only be transferred to an individual retirement account or individual
retirement annuity. For purposes of subsection (a), a spouse or former spouse
who is the alternate payee under a qualified domestic relations order as defined
in Code Section 414(p) will be treated as the Participant.
NOTICE TO INTERESTED PARTIES
I. GENERAL INFORMATION
Notice to Employees or Participants. Your Employer has amended your
retirement plan effective as of .
-------------------
Name of Plan:
----------------------------------------------------------
Plan Number:
-------
Opinion Letter Number:
-----------
Name and address of Employer:
----------------------------------
----------------------------------
----------------------------------
Employer Identification Number:
--------------
Name and Address of Plan Administrator:
----------------------------------
----------------------------------
----------------------------------
( ) No other Employers have adopted the provisions of the Plan.
( ) The following are other Employers who have adopted the provisions
of the Plan:
The Employer does not intend to submit this Plan to the Internal Revenue
Service for an advance determination as to whether the Plan qualifies under
Section 401 and 403(a) of the Internal Revenue Code of 1986, with respect to its
amendment.
A determination letter for the Plan ____________ (has/has not) previously been
issued.
All Employees will be eligible to participate when age and service
requirements, if applicable, are satisfied except for the following (select all
that apply):
( ) Employees who are paid on a salary only basis.
( ) Employees who derive their total compensation in the form of
commissions or sales incentives.
( ) Employees who are paid on an hourly only basis.
( ) Employees whose employment is governed by a collective bargaining
agreement under which retirement benefits were the subject of
good faith bargaining.
( ) Highly Compensated Employees.
( ) Non-resident aliens who have no earned income from sources within
the United States.
( ) Other:
----------------------------------------------------------
----------------------------------------------------------
II. RIGHTS OF INTERESTED PARTIES
You have the right to submit to the Key District Director, at the
address below, either individually or jointly with other interested parties,
your comments as to whether this plan meets the qualification requirements of
the Internal Revenue Code. You may instead, individually or jointly with other
interested parties, request the Department of Labor to submit, on your behalf,
comments to the Key District Director regarding qualification of the plan. If
the Department declines to comment on all or some of the matters you raise, you
may, individually, or jointly if your request was made to the Department
jointly, submit your comments on these matters directly to the Key District
Director.
III. REQUESTS FOR COMMENTS BY THE DEPARTMENT OF LABOR
The Department of Labor may not comment on behalf of interested parties
unless requested to do so by the lesser of 10 employees or 10 percent of the
employees who qualify as interested parties. The number of persons needed for
the Department to comment with respect to this plan is _____. If you request the
Department to comment, your comment must be in writing and must specify the
matters upon which comments are requested, and must also include:
(a) the name, address and I.D. Number of the applicant;
(b) the opinion letter number;
(c) the name of the plan, the plan identification number, and
the name and address of the plan administrator; and
(d) the number of persons needed for the Department to comment.
A request to the Department to comment should be addressed as follows:
Deputy Assistant Secretary
Pension and Welfare Benefits Administration
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ATTN: 3001 Comment Request
IV. COMMENTS TO THE INTERNAL REVENUE SERVICE
Comments submitted by you to the Key District Director must be in
writing and received by him by ____________________ (the 75th day after the plan
or amendment is adopted). However, if there are matters that you request the
Department of Labor to comment upon your behalf, and the Department declines,
you may submit comments on these matters to the Key District Director to be
received by him within 15 days from the time the Department notifies you that it
will not comment on a particular matter, or by ____________________ (the 75th
day after the plan or amendment is adopted), whichever is later, but in no event
later than ____________________ (the 90th day after the plan or amendment is
adopted). A request to the Department of Labor to comment on your behalf must be
received by ____________________ (the 45th day after the plan or amendment is
adopted) if you wish to preserve your right to comment on a matter upon which
the Department declines to comment, or by ____________________ (the 55th day
after the plan or amendment is adopted) if you wish to waive that right.
V. ADDITIONAL INFORMATION
Detailed instructions regarding the requirements for notification of
interested parties may be found in Sections 16, 17, and 18 of Revenue Procedure
94-6. Additional information concerning this amendment (including where
applicable, a description of the circumstances which may result in ineligibility
or loss of benefits; a description of the source of financing of the plan; and
copies of Section 16 of Revenue Procedure 94-6) is available at the company's
principal and/or local office during the hours of 10:00 a.m to 3:00 p.m. for
inspection and copying. (There is a nominal charge for copying and/or mailing.)
Key District Having Jurisdiction Over Plan:
( ) Internal Revenue Service
EP/EO Division
P.O. Box 941
Atlanta, GA 30370
( ) Internal Revenue Service
EP/EO Division
P.O. Box 17010
Room 713
Baltimore, Md 21203
( ) Internal Revenue Service
EP/EO Division
P.O. Box 1680, GPO
Brooklyn, NY 11202
( ) Internal Revenue Service
EP/EO Division
P.O. Box 3159
Cincinnati, OH 45201
( ) Internal Revenue Service
EP/EO Division
230 S. Dearborn Street
Chicago, IL 60604
( ) Internal Revenue Service
EP/EO Division
1100 Commerce Street
Dallas, TX 75242
( ) Internal Revenue Service
EP Application Receiving
2 Cupania Circle
Monterey Park, CA 91754
SUMMARY OF MATERIAL MODIFICATIONS
Your Employer has amended your retirement plan. This is a summary of the
modifications that were made. It should be read in conjunction with the Summary
Plan Description that has already been distributed to you.
1. Compensation
Effective as of the first day of the 1994 Plan Year, the definition of
Compensation has been modified to exclude compensation in excess of
$150,000.
2. Treatment of Distributions from Your Plan
Whenever you receive a distribution from your Plan, it will normally be
subject to income taxes. You may, however, reduce, or defer entirely, the
tax due on your distribution through use of one of the following methods:
(a) The rollover of all or a portion of the distribution to an Individual
Retirement Account (IRA) or another qualified employer plan. This will
result in no tax being due until you begin withdrawing funds from the
IRA or other qualified employer plan. The rollover of the
distribution, however, MUST be made within strict time frames
(normally, within 60 days after you receive your distribution). Under
certain circumstances all or a portion of a distribution may not
qualify for this rollover treatment. In addition, most distributions
made after December 31, 1992 will be subject to mandatory federal
income tax withholding at a rate of 20%. This will reduce the amount
you actually receive. For this reason, if you wish to rollover all or
a portion of your distribution amount, the direct transfer option
described in paragraph (b) below would be the better choice.
(b) You may request for most distributions made after December 31, 1992,
that a direct transfer of all or a portion of your distribution amount
be made to either an Individual Retirement Account (IRA) or another
qualified employer plan willing to accept the transfer. A direct
transfer will result in no tax being due until you withdraw funds from
the IRA or other qualified employer plan. Like the rollover, under
certain circumstances all or a portion of the amount to be distributed
may not qualify for this direct transfer. If you elect to actually
receive the distribution rather than request a direct transfer, then
in most cases 20% of the distribution amount will be withheld for
federal income tax purposes.
(c) The election of favorable income tax treatment under "10-year forward
averaging", "5-year forward averaging" or, if you qualify, "capital
gains" method of taxation.
WHENEVER YOU RECEIVE A DISTRIBUTION, THE ADMINISTRATOR WILL DELIVER TO YOU
A MORE DETAILED EXPLANATION OF THESE OPTIONS. HOWEVER, THE RULES WHICH
DETERMINE WHETHER YOU QUALIFY FOR FAVORABLE TAX TREATMENT ARE VERY COMPLEX.
YOU SHOULD CONSULT WITH QUALIFIED TAX COUNSEL BEFORE MAKING A CHOICE.
ADOPTION AGREEMENT FOR
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the Employers Life Insurance Company of
Wausau Non-Standardized 401(k) Profit Sharing Plan for those Employees who shall
qualify as Participants hereunder, to be known as the
A1 Valley Group Employees' 401(K) Savings Plan
-------------------------------------------------------------------------
(Enter Plan Name)
It shall be effective as of the date specified below. The Employer hereby
selects the following Plan specifications:
EMPLOYER INFORMATION
B1 Name of Employer Valley Pacific, Inc.
----------------------------------------------------------
----------------------------------------------------------
B2 Address 2450 14th Avenue SE, Post Office Box 1119
------------------------------------------------------------------
Albany , OR 97321-0421
---------------------- -------- -------------
City State Zip
Telephone (503) 928-2344
------------------
B3 Employer Identification Number 93-0890992
--------------------
B4 Date Business Commenced 06/30/85
------------------
CAUTION: The failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan.
Copyright 1990-N Employers Life Insurance Company of Wausau
1
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. (X) Corporation
d. ( ) Sole Proprietorship
f. ( ) Other
----------------------------------------
AND, is the Employer a member of...
g. a controlled group? (X)Yes ( )No
h. an affiliated service group? ( )Yes (X)No
B6 NAME(S) OF TRUSTEE(S) a. Stuart E. Olson
---------------------------
b. Kenneth R. Hisel
---------------------------
c. Carey D. Benson
---------------------------
B7 TRUSTEES' ADDRESS a. (X) Use Employer Address
b. ( )
-----------------------------------------------
Street
--------------------, -------------- -------
City State Zip
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (X) state of b. ( ) commonwealth of c. Oregon
-----------
and this Plan and Trust shall be governed under the
same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. January 1 (e.g., January 1st) and
--------------------
month day
ending on b. December 31 .
-----------------------
month day
2
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the Employers Life Insurance Company of Wausau
Non-Standardized 401(k) Profit Sharing Plan and Trust shall:
a. ( ) establish a new Plan and Trust effective as of ______________________
(hereinafter called the "Effective Date").
b. (X) constitute an amendment and restatement in its entirety of a
previously established qualified Plan and Trust of the Employer which
was effective January 1, 1988 (hereinafter called the" Effective
Date"). Except
---------------
as specifically provided in the Plan, the effective date of this
amendment and restatement is December 1, 1995 (For TRA '86
----------------
amendments, enter the first day of the first Plan Year beginning in
1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1 (e.g., January 1st)
----------------
and ending on b. December 31 .
----------------
IS THERE A SHORT PLAN YEAR?
c. (X) No
d. ( ) Yes, beginning
-----------------------
and ending .
---------------------------
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31
--------------
month day
C4 VALUATION DATES (in addition to the Anniversary Date)
( ) none
( ) semi-annual dates
(X) quarterly dates
( ) other:
---------------
C5 PLAN NUMBER assigned by the Employer (select one)
a.(X) 001 b.( ) 002 c.( ) 003 d.( ) Other .
-----
3
C6 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to appoint an
Administrator. If none is named, the Employer will become the
Administrator.)
a. (X) Employer (Use Employer Address)
b. ( ) Name
------------------------------------------------
Address
---------------------------------------------
,
------------------------ ---------------- --------
City State Zip
Telephone
------------------------------
Administrator's I.D. Number -
-------- ----------------
C7 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (X) Employer (Use Employer Address)
b. ( ) Name
------------------------------------------------
Address
---------------------------------------------
,
------------------------ ---------------- --------
City State Zip
4
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.17) shall mean:
a. (X) all Employees who have satisfied the eligibility requirements.
b. ( ) all Employees who have satisfied the eligibility requirements except
those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. ( ) Employees whose employment is governed by a collective
bargaining agreement between the Employer and "employee
representatives" under which retirement benefits were the
subject of good faith bargaining unless such agreement
provides for participation in this Plan. 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 of the Employer.
5. ( ) Highly Compensated Employees.
6. ( ) Employees who are non-resident aliens who received no earned
income (within the meaning of Code Section 911(d)(2)) from the
Employer which constitutes income from sources within the
United States (within the meaning of Code Section 861(a)(3)).
7. ( ) Other
---------------------------------------
NOTE: For purposes of this section, the term Employee shall include all
Employees of this Employer and any leased employees deemed to be
Employees under Code Section 414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.18)
Employees of Affiliated Employers:
a. ( ) will not or N/A
b. (X) will
be treated as Employees of the Employer adopting the Plan.
NOTE: If D2b is elected each Affiliated Employer should execute this
Adoption Agreement as a Participating Employer.
5
D3 HOURS OF SERVICE (Plan Section 1.33) will be determined on
the basis of the method selected below. Only one method may
be selected. The method selected will be applied to all
Employees covered under the Plan.
a. (X) On the basis of actual hours for which an Employee
is paid or entitled to payment.
b. ( ) On the basis of days worked. An Employee will be
credited with ten (10) Hours of Service if under the
Plan such Employee would be credited with at least
one (1) Hour of Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be
credited forty-five (45) Hours of Service if under
the Plan such Employee would be credited with at
least one (1) Hour of Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An
Employee will be credited with ninety-five (95) Hours
of Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the semi-monthly payroll period.
e. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of
Service if under the Plan such Employee would be
credited with at least one (1) Hour of Service during
the month.
6
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
Any Eligible Employee will be eligible to participate in
the Plan if such Eligible Employee has satisfied the
service and age requirements, if any, specified below:
a. AGE REQUIREMENT (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 20 1/2
3. (X) 21
4. ( ) Other
-------------------
b. SERVICE REQUIREMENT. (may not exceed 1 year.)
1. ( ) None
2. ( ) 1/2 Year of Service
3. ( ) 1 Year of Service
4. (X) Other 90 days
-------------
NOTE: If the Year(s) of Service selected is or
includes a fractional year, an Employee will not be
required to complete any specified number of Hours of
Service to receive credit for such fractional year.
c. ( ) FOR NEW PLANS ONLY - Regardless of any of the above
age or service requirements, any Eligible Employee
who was employed on
--------------------------
month day year
shall be required to meet the following age and
service requirements:
( ) age (not to exceed 21)
-----
( ) Year(s) of Service (not to exceed 1)
-----
7
D5 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the
first 6 months of the Plan Year, or as of the first
day of the next succeeding Plan Year if he met the
requirements in the last 6 months of the Plan Year.
c. ( ) the earlier of the first day of the seventh month or
the first day of the Plan Year coinciding with or
next following the date on which he met the
requirements.
d. ( ) the first day of the Plan Year next following the
date on which he met the requirements. (Eligibility
must be 1/2 Year of Service or less or 1 1/2 Years
of Service or less if 100% immediate vesting is
selected and age 20 1/2 or less.)
e. ( ) the first day of the month coinciding with or next
following the date on which he met the requirements.
f. (X) Other: The first day of the quarter coinciding with
---------------------------------------------
or next following the date on which he met the
----------------------------------------------
requirements, however those employees employed by the
-----------------------------------------------------
Charter Group will be able to continue their participation
----------------------------------------------------------
upon the 12/1/95 amendment date, provided that an Employee
--------------------------------
who has satisfied the maximum age and service requirements
that are permissible in Section D4 above and who is
otherwise entitled to participate, shall commence
participation no later than the earlier of (a) 6 months
after such requirements are satisfied, or (b) the first day
of the first Plan Year after such requirements are
satisfied, unless the Employee separates from service
before such participation date.
8
D6 VESTING OF PARTICIPANT'S INTEREST OTHER THAN MATCHING
CONTRIBUTIONS (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service,
shall be as follows:
*a. (X) 100% upon entering Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c. ( ) 0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 year 0% e. ( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
**f. (X) 1 year 20% g. ( ) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h. ( ) Other - Must be at least as liberal as either c or g
above.
Years of Service Percentage
_____1_________ ________
_____2_________ ________
_____3_________ ________
_____4_________ ________
_____5_________ ________
_____6_________ ________
_____7_________ 100 %
D6.1 VESTING OF MATCHING CONTRIBUTIONS
a. ( ) 100% vested at all times
b. (X) in accordance with above schedule
c. ( ) N/A
* For those employees employed prior to December 1, 1995.
** For those employees employed after December 1, 1995.
9
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting
schedule has been amended to a less favorable schedule,
enter the pre-amended schedule below:
a. (X) Vesting schedule has not been amended or amended
schedule is more favorable in all years.
b. ( ) Years of Service Percentage
______________ ________
______________ ________
______________ ________
______________ ________
______________ ________
______________ ________
______________ ________
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan
becomes a Top Heavy Plan, the following vesting schedule,
based on number of Years of Service, for such Plan Year
and each succeeding Plan Year, whether or not the Plan is a
Top Heavy Plan, shall apply and shall be treated as a Plan
amendment pursuant to this Plan. Once effective, this
schedule shall also apply to any contributions made prior
to the effective date of Code Section 416 and/or before the
Plan became a Top Heavy Plan.
a. (X) N/A (D6a, b, d, e or f was selected)
b. ( ) 0-1 year 0% c. ( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account
balances of any Participant who does not have an
Hour of Service after the Plan has initially become
top heavy. Such Participant's Account balance
attributable to Employer contributions and
Forfeitures will be determined without regard to
this section.
10
D9 VESTING (Plan Section 6.4(h)) In determining Years of Service
for vesting purposes, the following Hours of Service
shall be EXCLUDED:
a. ( ) Hours of Service prior to the Effective Date of the
Plan or a predecessor plan. b. (X) N/A
c. ( ) Hours of Service prior to the time an Employee
attained age 18. d. (X) N/A
D10 PLAN SHALL RECOGNIZE SERVICE WITH ANOTHER EMPLOYER
a. ( ) No.
b. (X) Yes: Hours of Service with any company within the
----------------------
Controlled Group shall be recognized for the purpose
----------------
of this Plan.
NOTE: If the other Employer maintained this
qualified Plan, then Years of Service with such
predecessor Employer shall be recognized pursuant
to Section 1.78 and b. must be marked.
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.45) means:
a. (X) the date a Participant attains his 65th birthday.
--------
(not to exceed 65th)
b. ( ) the later of the date a Participant attains his _____
birthday (not to exceed 65th) or the c.______ (not to
exceed 5th) anniversary of the first day of the Plan
Year in which participation in the Plan commenced.
c. ( ) the later of age _____ (not to exceed 65) or the
completion of _____ Years of ( ) Service, ( ) Vesting
Service.
D12 NORMAL RETIREMENT DATE (Plan Section 1.46) shall commence:
a. (X) as of the Participant's "NRA".
OR (must select b. or c. AND 1. or 2.)
b. ( ) as of the first day of the month...
c. ( ) as of the Anniversary Date...
1. ( ) coinciding with or next following the
Participant's "NRA".
2. ( ) nearest the Participant's "NRA".
11
D13 EARLY RETIREMENT DATE (Plan Section 1.14) means the:
a. ( ) No Early Retirement provision provided.
b. (X) date on which a Participant...
c. ( ) first day of the month coinciding with or next
following the date on which a Participant...
d. ( ) Anniversary Date coinciding with or next following
the date on which a Participant...
AND, if b, c or d was selected...
1. (X) attains his 55th birthday and has
--------
2. ( ) completed at least Years of ( ) Service,
------
( ) Vesting Service
D14 YEAR OF SERVICE means, for purposes of eligibility and
vesting, the applicable computation period during which an
Employee has completed at least one (maximum of 1,000)
-------
Hours of Service.
12
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION with respect to any Participant means:
1. (X) Wages, Tips and other Compensation (Box 10 on Form W-2).
2. ( ) Section 3401(a) wages (wages for withholding purposes).
3. ( ) 415 Safe-harbor Compensation
AND Compensation
(X) shall
( ) shall not
exclude (even if includible in gross income) reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving
expenses, deferred compensation, and welfare benefits.
b. HOWEVER, for non-integrated plans, Compensation
shall exclude (select all that apply):
1. ( ) N/A. No exclusions
2. ( ) overtime
3. (X) bonuses
4. ( ) commissions
5. ( ) other
--------------
c. FOR PURPOSES OF THIS SECTION E1, Compensation shall be
based on:
1. (X) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending
within the Plan Year.
3. ( ) the Calendar Year coinciding with or ending
within the Plan Year.
NOTE: The Limitation Year shall be the Plan Year.
d. HOWEVER, for an Employee's first year of participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (X) the date the Participant entered the Plan.
e. IN ADDITION, COMPENSATION and "414(s) Compensation"
1. (X) shall 2. ( ) shall not include compensation
which is not currently includible in the Participant's
gross income by reason of the application of Code
Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
13
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION
(Plan Section 11.2) Each Employee may elect to have his
Compensation reduced by:
a. ( ) %
--------
b. ( ) up to %
--------
c. (X) from 1% to 15%
-------- ---------
AND...
d. (X) A Participant may elect to commence salary reductions
as of January 1, April 1, July 1 or October 1 (ENTER AT
---------------------------------------
LEAST ONE DATE OR PERIOD). A Participant may modify the
amount of salary reductions as of January 1, April 1,
-------------------
July 1 or October 1 (ENTER AT LEAST ONE DATE OR PERIOD).
-------------------
14
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION
(Plan Section 11.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. (X) The Employer shall make matching contributions
equal to 50 % (e.g. 50%) of the Participant's
------
salary reductions.
c. ( ) The Employer may make matching contributions equal
to a discretionary percentage, to be determined by
the Employer, of the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal
to ______% of the first ______% of the Participant's
Compensation deferred, plus ______% of the next
______% of the Participant's Compensation deferred.
FOR PLANS WITH MATCHING CONTRIBUTIONS
e. (X) Matching contributions f. ( ) shall g. (X) shall not
be used in satisfying the deferral percentage tests.
(If used, full vesting and restrictions on
withdrawals will apply and the match will be deemed
to be an Elective Contribution).
h. (X) Shall a Year of Service be required in order to share
in the matching contributions?
With respect to Plan Years beginning after 1989...
1. ( ) Yes (Could cause Plan to violate minimum
participation and coverage requirements under
Code Sections 401(a)(26) and 410)
2. (X) No
With respect to Plan Years beginning before 1990...
1. ( ) N/A New Plan or same as years beginning after 1990.
2. ( ) Yes
3. (X) No
i. ( ) In determining matching contributions, only salary
reductions up to ______% of a Participant's
Compensation will be matched. j. ( ) N/A
k. ( ) The matching contribution made on behalf of a
Participant for any Plan Year shall not exceed
$_________________. l. (X) N/A
m. ( ) Matching contributions shall not be made on any Salary
reduction contributions which result from a salary
reduction percentage which exceeds 6 %.
-------
n. (X) Matching contributions shall be made o.(X) during
the Plan Year p. ( ) within 30 days after the end
of the Plan Year (discretionary matches only).
q. (X) Notwithstanding anything in the Plan to the contrary,
all matching contributions which relate to distributions
of Excess Deferred Compensation, Excess Contributions and
Excess Aggregate Contributions shall be Forfeited.
NOTE: SALARY REDUCTION IN EXCESS OF $8994 (AS ADJUSTED
AFTER 1993) SHALL NOT BE MATCHED.
15
E3.1 AGGREGATE LIMIT COMPLIANCE - In the event of the multiple
use of the alternative method described in Code Section
401(m)(9)(A), a Highly-Compensated Employee's:
(X) actual deferral ratio shall be reduced
( ) actual contribution ratio shall be reduced
( ) N/A - plan has no matching contribution
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED
(OTHER THAN A DISCRETIONARY QUALIFIED NON-ELECTIVE
CONTRIBUTION) (Plan Section 11.1(c))?
a. ( ) No.
b. ( ) Yes, the Employer may make a discretionary
contribution out of its current or accumulated Net
Profit.
c. (X) Yes, the Employer may make a discretionary
contribution which is not limited to its current or
accumulated Net Profit.
IF YES (b. or c. is selected above), the Employer's
discretionary contribution shall be allocated as follows:
d. (X) PRO RATA ALLOCATION
The Employer discretionary contribution for the Plan Year
shall be allocated in the same ratio as each Participant's
Compensation bears to the total of such Compensation of
all Participants.
e. ( ) INTEGRATED ALLOCATION
The Employer discretionary contribution for the Plan Year
shall be allocated first, in the same ratio as each
Participant's Compensation bears to the total of such
Compensation of all Participants, but in no event shall the
allocation exceed _______ % of each such Participant's
Compensation; then in accordance with Plan Section 4.4(b)(2)
based on a Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable
Wage Base.
h. ( ) ______% of the Taxable Wage Base. (See Note
below)
i. ( ) $_______________. (see Note below)
NOTE: The integration percentage of 5.7% shall be
reduced to:
1. 4.3% if h. or i. above is more than 20% and less
than or equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more
than 80% of the Taxable Wage Base.
16
j. ( ) PER CAPITA ALLOCATION
The Employer contribution for the Plan Year shall be
allocated equally to all eligible Participants.
k. ( ) POINT ALLOCATION
The Employer contribution for the Plan Year shall be
allocated to all eligible Participants in the same
proportion that each Participant's points bears to the
total points of all eligible Participants, where ______
point(s) are credited for each full $ ________ of
Compensation, and _______ point(s) are credited for each
Year of ( ) Service, ( ) Vesting Service.
17
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section)
a. (X) N/A. There shall be no Qualified Non-Elective
Contributions except as provided in Section 11.5(b)
and 11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective
Contribution equal to ___% of the total Compensation
of all Participants eligible to defer salary during
the Plan Year.
c. ( ) The Employer may make a Qualified Non-Elective
Contribution in an amount to be determined by the
Employer, to all Participants eligible to defer salary
during the Plan Year.
E6 FORFEITURES (Plan Section 4.3(e))
Forfeitures shall be...
1. (X) used to reduce required Employer contributions
under the Plan for the current and future Plan
Years.
2. ( ) allocated to all Participant's eligible to share
in the allocations in proportion to each such
Participant's Compensation for the year.
3. ( ) added to the Employer's contribution under the
Plan.
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3)
With respect to Plan Years beginning AFTER 1989, a
Participant...
a. ( ) shall (Plan may become discriminatory)
b. (X) shall not
be required to complete a Year of Service in order to share
in any Non-Elective Contributions (other than matching
contributions) or Qualified Non-Elective Contributions. For
Plan Years beginning before 1990, the Plan provides that a
Participant must complete a Year of Service to share in the
allocations.
E7.1 YEAR OF SERVICE means, for purposes of sharing in the
allocations as set forth in Section 4.3 a Plan Year in
which a Participant has completed at least 0
-------
(maximum of 1000) Hours of Service.
18
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan
Year for reasons OTHER THAN death, Total and Permanent
Disability or retirement:
a. With respect to Employer Non-Elective Contributions
(other than matching), Qualified Non-Elective
Contributions, and Forfeitures:
1. For Plan Years beginning BEFORE 1990,
i. ( ) N/A
ii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iii.(X) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning AFTER 1989,
i. ( ) N/A
ii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. (X) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If a.2.iii or iv is selected, the Plan could
become discriminatory in operation.
b. With respect to the allocation of Employer Matching
Contributions, a Participant:
1. For Plan Years beginning BEFORE 1990,
i. ( ) N/A
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. ( ) shall not share in such allocations,
regardless of Hours of Service.
19
2. For Plan Years beginning AFTER 1989,
i. ( ) N/A
ii. (X) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iv. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
v. ( ) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If b.2.iv or v is selected, the Plan could
become discriminatory in operation.
Any Participant who terminated employment during the Plan
Year for reasons OF death, Total and Permanent
Disability or retirement:
a. With respect to Employer Non-Elective Contributions
(other than matching), Qualified Non-Elective
Contributions, and Forfeitures:
1. For Plan Years beginning BEFORE 1990,
i. ( ) N/A
ii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iii.(X) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning AFTER 1989,
i. ( ) N/A
ii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. (X) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If a.2.iii or iv is selected, the Plan could
become discriminatory in operation.
20
b. With respect to the allocation of Employer Matching
Contributions, a Participant:
1. For Plan Years beginning BEFORE 1990,
i. ( ) N/A
ii. (X) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in the allocations provided such
Participant completed a Year of Service.
iv. ( ) shall not share in such allocations,
regardless of Hours of Service.
2. For Plan Years beginning AFTER 1989,
i. ( ) N/A
ii. (X) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
v. ( ) shall not share in such allocations,
regardless of Hours of Service.
NOTE: If b.2.iv or v is selected, the Plan could
become discriminatory in operation.
21
E9 LIMITATIONS ON ALLOCATIONS (Plan Section 4.5)
a. If any Participant is or was covered under another
qualified defined contribution plan maintained by the
Employer, other than a Master or Prototype Plan, or if
the Employer maintains a welfare benefit fund, as
defined in Code Section 419(e), or an individual medical
account, as defined in Code Section 415(l)(2), under
which amounts are treated as Annual Additions with
respect to any Participant in this Plan:
1. ( ) N/A.
2. (X) The provisions of Section 4.5(b) of the Plan will
apply as if the other plan were a Master or
Prototype Plan.
3. ( ) Provide the method under which the Plans will
limit total Annual Additions to the Maximum
Permissible Amount, and will properly reduce any
Excess Amounts, in a manner that precludes
Employer discretion.
------------------------------------------------
------------------------------------------------
b. If any Participant is or ever has been a Participant in
a defined benefit plan maintained by the Employer:
1. ( ) N/A.
2. (X) In any Limitation Year, the Annual Additions
credited to the Participant under this Plan may
not cause the sum of the Defined Benefit Plan
Fraction and the Defined Contribution Fraction to
exceed 1.0. If the Employer's contribution that
would otherwise be made on the Participant's
behalf during the limitation year would cause the
1.0 limitation to be exceeded, the rate of
contribution under this Plan will be reduced so
that the sum of the fractions equals 1.0. If the
1.0 limitation is exceeded because of an Excess
Amount, such Excess Amount will be reduced in
accordance with Section 4.5(a)(4) of the Plan.
3. ( ) Provide the method under which the Plans involved
will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
------------------------------------------------
------------------------------------------------
22
E10 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to
Section 6.4(a) of the Plan shall not be made unless the
following conditions have been satisfied:
a. (X) N/A. Distributions may be made at the
Participant's election.
b. ( ) The Participant has incurred _____ 1-Year Break(s)
in Service.
c. ( ) The Participant has reached his or her Early or
Normal Retirement Age.
d. ( ) The Participant's interest in the Plan is less than
$______________. If the Participant's interest in the
Plan exceeds such amount, then no distribution shall
be made until the Participant reaches his or her
Early or Normal Retirement Age.
e. ( ) Other ---------------------------------------------
NOTE: Regardless of the above, for amounts of $3,500
or less, the Plan requires immediate distributions.
23
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.4(i)): When a Non-Key
Employee is a Participant in this Plan and a Defined
Benefit Plan maintained by the Employer, indicate
which method shall be utilized to avoid duplication of top
heavy minimum benefits.
a. (X) The Employer does not maintain a Defined Benefit
Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each
Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section 4.4(i).
(The Defined Benefit and Defined Contribution
Fractions will be computed using 100% if this choice
is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of
each Non-Key Employee's total Compensation shall be
provided in this Plan, as specified in Section 4.4(i).
(If this choice is selected, the Defined Benefit and
Defined Contribution Fractions will be computed using
125% for all Plan Years in which the Plan is Top
Heavy, but not Super Top Heavy.)
d. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
24
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for
Top Heavy purposes where the Employer maintains a Defined
Benefit Plan in addition to this Plan, shall be based on...
a. (X) N/A. The Employer does not maintain a defined benefit
plan.
b. ( ) Interest Rate:
--------------------------------------
Mortality Table:
------------------------------------
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or
more Defined Contribution Plans.
a. ( ) N/A.
b. (X) A minimum, non-integrated contribution of 3% of each
Non-Key Employee's total Compensation shall be
provided in the Money Purchase Plan (or other plan
subject to Code Section 412), where the Employer
maintains two (2) or more non-paired Defined
Contribution Plans.
c. ( ) Specify the method under which the Plans will provide
top heavy minimum benefits for Non-Key Employees that
will preclude Employer discretion and avoid
inadvertent omissions, including any adjustments
required under Code Section 415(e).
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
25
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. (X) Yes, loans may be made pursuant to the Administrator's
written policy.
b. ( ) No, loans may not be made.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.9) are
permitted for the interest in any one or more accounts.
a. (X) Yes pursuant to the Administrator's written policy.
b. ( ) No.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.7)
a. (X) Yes, transfers from qualified plans (and rollovers)
will be allowed.
b. ( ) No, transfers from qualified plans (and rollovers)
will not be allowed.
AND, transfers shall be permitted...
c. (X) from any Employee, even if not a Participant.
d. ( ) from Participants only.
26
G4 EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.8)
a. ( ) Yes, Voluntary Contributions are allowed subject to
the limits of Section 4.10.
b. (X) No, Voluntary Contributions will not be allowed.
NOTE: TRA '86 subjects voluntary contributions to
strict discrimination rules.
G5 HARDSHIP DISTRIBUTIONS (Plan Section 6.11 and 11.8)
a. (X) Yes, from any accounts.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to accounts other than the
Participant's Elective Account only.
d. ( ) No.
e. ( ) In addition to Sections 6.11 and 11.8, the following
events shall constitute immediate and heavy
financial need:
-----------------------------------------------------
-----------------------------------------------------
NOTE: Distributions from a Participant's Elective
Account are limited to the portion of such account
attributable to such Participant's Deferred
Compensation and earnings attributable thereto up
to December 31, 1988. Also hardship distributions
are not permitted from a Participant's Qualified
Non-Elective Account.
G6 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. (X) If a Participant has reached the age of ______,
distributions may be made, at the Participant's
election, without requiring the Participant to
terminate employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective
Account and Qualified Non-Elective Account are not
permitted prior to age 59 1/2.
G7 LIFE INSURANCE (Plan Section 7.2(d)) may be purchased with
Plan contributions.
a. (X) No life insurance may be purchased.
b. ( ) Yes, in accordance with the Administrator's
written policy.
27
The adopting Employer may not rely on an opinion letter issued by
the National Office of the Internal Revenue Service as evidence
that the plan is qualified under Code Section 401. In order to
obtain reliance with respect to plan qualification, the Employer
must apply to the appropriate Key District Office for a
determination letter.
This Adoption Agreement may be used only in conjunction with
basic Plan document #01. This Adoption Agreement and the basic
Plan document shall together be known as Employers Life Insurance
Company of Wausau Non-Standardized 401(k) Profit Sharing Plan
#01-005.
The adoption of this Plan, its qualification by the IRS, and the
related tax consequences are the responsibility of the Employer
and its independent tax and legal advisors.
Employers Life Insurance Company of Wausau will notify the
Employer of any amendments made to the Plan or of the
discontinuance or abandonment of the Plan provided this Plan has
been acknowledged by Employers Life Insurance Company of Wausau
or its authorized representative. Furthermore, in order to be
eligible to receive such notification, we agree to notify
Employers Life Insurance Company of Wausau of any change in
address.
28
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this
Plan to be executed on this _____ day of ___________, 1995.
Furthermore, this Plan may not be used unless acknowledged by
Employers Life Insurance Company of Wausau or its authorized
representative.
EMPLOYER:
Valley Pacific, Inc.
------------------------------- ---------------------------
(enter name) TRUSTEE
By:
-------------------------------- ---------------------------
TRUSTEE
PARTICIPATING EMPLOYER(S):
---------------------------
TRUSTEE
1. The Charter Group, Inc. Fiscal Year End:
---------------------------- -----------
(enter name)
EIN: - Effective Date:
---- ---------- ---------
By:
--------------------------
2. Fiscal Year End:
---------------------------- ---------
(enter name)
EIN: - Effective Date:
---- ---------- ---------
By:
--------------------------
This Plan may not be used, and shall not be deemed to be a
Prototype Plan, unless an authorized representative of Employers
Life Insurance Company of Wausau has acknowledged the use of the
Plan. Such acknowledgment is for administerial purposes only. It
acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the
Adoption Agreement, has been reviewed by a representative of the
sponsor or constitutes a qualified retirement plan.
Employers Life Insurance Company of Wausau
By:
-----------------------------
29
With regard to any questions regarding the provisions of the
Plan, adoption of the Plan, or the effect of an opinion letter
from the IRS, call or write (this information must be completed
by the sponsor of this Plan or its designated representative):
Name Ross A. Solverud
--------------------------------------------------
Address Employers Life Insurance Company of Wausau
--------------------------------------------------
Post Office Box 8017
--------------------------------------------------
Wausau, Wisconsin 54402-8017
--------------------------------------------------
Telephone ( 715 ) 842-6886
----- ------------------------------------------
30
Exhibit (5)(a)
--------------
[Miller, Canfield, Paddock and Stone, P.L.C. Letterhead]
June 26, 1997
Fund American Enterprises Holdings, Inc.
80 South Main Street
Hanover, New Hampshire 03755-2053
Gentlemen:
With respect to the registration statement on Form S-8 (the "Registration
Statement") being filed today with the Securities and Exchange Commission (the
"Commission") by Fund American Enterprises Holdings, Inc., a Delaware
corporation (the "Company"), for the purpose of registering under the Securities
Act of 1933, as amended (the "Act"), an indeterminate amount of interests in the
Valley Group Employees' 401(k) Savings Plan (the "Plan") and 300,000 shares of
the common stock, $1.00 par value, of the Company (the "Registered Shares"),
which may consist of shares already issued or newly issued shares, we, as your
counsel, have examined such certificates, instruments, and documents and have
reviewed such questions of law as we have considered necessary or appropriate
for the purposes of this opinion, and, on the basis of such examination and
review, we advise you that, in our opinion:
1. The Registered Shares have been legally authorized.
2. When the Registration Statement has become effective and any newly
issued Registered Shares have been acquired at the election of a participant in
accordance with the Plan and paid for, said newly issued Registered Shares will
be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission.
Very truly yours,
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
EXHIBIT 23(b)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 dated June 27, 1997) pertaining to the Valley Group Employees' 401(k)
Savings Plan of our report dated March 21, 1997, with respect to the
consolidated financial statements of Fund American Enterprises Holdings, Inc.,
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
New York, New York
June 26, 1997
EXHIBIT 23(c)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 of Fund American Enterprises Holdings, Inc. dated June 27, 1997) pertaining
to the Valley Group Employees' 401(k) Savings Plan of our reports dated January
24, 1997 and February 14, 1997, with respect to the consolidated financial
statements of Financial Security Assurance Holdings, Ltd. and Subsidiaries and
the consolidated financial statements of Valley Group, Inc. and Subsidiaries,
respectively, included as Exhibits in its Annual Report (Form 10-K) for the year
ended December 31, 1996, filed with the Securities and Exchange Commission.
Coopers & Lybrand L.L.P.
New York, New York
June 26, 1997
EXHIBIT 23(d)
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement of
Fund American Enterprises Holdings, Inc., on Form S-8 as filed on June 27, 1997
of our reports dated June 4, 1997 on our audits of the financial statements and
supplemental schedules of the Valley Group Employees' 401(k) Savings Plan (the
Plan) as of December 31, 1996 and 1995, and for the years then ended, which
report is included in the Annual Report on Form 11-k.
Coopers & Lybrand L.L.P.
Portland, Oregon
June 27, 1997
