Exhibit 10.14
SAVINGS AND PROTECTION PLAN
JOINDER AGREEMENT
(EQUITABLE LIFE)
(HOURS OF SERVICE)
(1989)
SAVINGS AND PROTECTION PLAN
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TABLE OF CONTENTS
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ARTICLE PAGE
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I. Purpose 1
II. Definitions 2
III. Participation and Service 19
IV. Contributions; In-Service Withdrawals;
Loans 21
V. Allocation of Employer Contributions
and Forfeitures 41
VI. Allocation of Trust Fund Earnings 45
VII. Vesting; Benefits on Termination
of Employment 47
VIII. Benefits on Retirement or Disability 52
IX. Benefits on Death 58
X. Administration of the Plan 62
XI. Amendments and Termination of the Plan 69
XII. Top-Heavy Provisions 71
XIII. General Provisions 78
Schedule A, Savings and Protection Plan,
Joinder Agreement 83
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ARTICLE I
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PURPOSE
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1.1 Intention. This Plan has been adopted by the Employer to provide for
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the payment of benefits on account of retirement, death, or total disability to
or for the benefit of certain of its Employees who are eligible to participate
hereunder. The Plan is intended to qualify under applicable provisions of the
Code, ERISA, and similar provisions of state law as a cash or deferred profit
sharing plan.
1.2 Effective Date. The initial Effective Date of this Plan (or, as
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appropriate, the Effective Date of an amendment to an existing plan) shall be
the date provided in the Joinder Agreement. No individual shall become a
Participant in the Plan unless he is an Eligible Employee on or after the
Effective Date of this Plan.
ARTICLE II
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DEFINITIONS
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Except as otherwise clearly indicated by context, the masculine shall
include the feminine, the singular shall include the plural, and vice-versa.
2.1 General. The following terms, when capitalized, shall have the
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meaning specified below unless the context clearly indicates to the contrary.
Additional defined terms are found in Article XII.
2.2 "Account" shall mean, with respect to a Participant, each of the
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separate accounts established and maintained in the records of the Recordkeeper
which represent the Participant's interest in the Trust Fund.
2.3 "Actuarial Equivalent" shall mean a benefit in a form which, as of the
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date of reference, has the same single-sum dollar value as the benefit expressed
in an alternative form. The actuarial equivalent shall be based on the factors
and assumptions utilized by the insurance company from which the Employer
directs the purchase of annuity contracts for the purpose of providing benefits
under the Plan.
2.4 "ACP Test" shall mean the test described in Section 4.3(c).
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2.5 "Actual Contribution Percentage" shall mean, for a specific group of
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Eligible Employees, the average of the ratios, expressed as a percentage,
calculated separately for each Eligible Employee in the group, of:
(a) the Matching Contributions and such other Contributions which are
required or permitted to be aggregated with Matching Contributions made on
behalf of such Eligible Employee for the Plan Year
to
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(b) such Eligible Employee's Compensation for that Plan Year; however, for
any Plan Year beginning before January 1, 1992, Compensation attributable to a
period before the Eligible Employee becomes a Participant shall not be taken
into account, and for Plan Years beginning after 1988, Compensation in this
clause shall be limited to $200,000 or such greater amount as may be described
by appropriate governmental authorities.
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For purposes of this Section, an Eligible Employee is any Employee who is
directly or indirectly eligible to receive an allocation of Matching
Contributions under the Plan. In the case of an Eligible Employee who makes no
Deferrals and receives no Matching Contributions, the ratio described above
shall be zero.
For purposes of this Section, each Eligible Employee's Actual Contribution
Percentage shall be rounded to the nearer one-hundredth of one percent of the
Eligible Employee's Compensation.
At the Plan Administrator's discretion, Deferrals may be added to Matching
Contributions in computing the ratio described in the preceding paragraph.
Similarly, at the Plan Administrator's discretion, Qualified Nonelective
Contributions, if any, and Qualified Matching Contributions, if any and to the
extent not already used in determining the Actual Deferral Percentage, may be
added to Matching Contributions in computing the ratio described in the
preceding paragraph. However, Deferrals, Qualified Nonelective Contributions
and/or Qualified Matching Contributions may be added to Matching Contributions
in computing the ratio described above only if such Deferrals, Qualified
Nonelective, and/or Qualified Matching Contributions satisfy the requirements of
IRS Reg. (S)l.401(m)-l(b)(5).
If in any Plan Year a Highly Compensated Employee is an Eligible Employee
in this Plan and in any other plan(s) maintained by the Employer or Related
Company to which matching contributions (as defined in section 401(m)(4)(A) of
the Code) or Employee contributions are made, then, in determining the ratio
described above for such Highly Compensated Employee, all such contributions
shall be aggregated in determining the Aggregate Matching Contribution Rate.
If a Highly Compensated Employee participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred arrangements
with plan years ending with or within the same calendar year shall be treated as
a single arrangement.
If this Plan is treated, for purposes of section 401(a) (4) or 410(b) of
the Code, as one plan with any other plan(s) maintained by the Employer or a
Related Company to which matching contributions, Employee contributions, or
elective deferrals are made, this Plan and such other plan(s) shall be treated
as one plan in determining the Actual Contribution Percentage. For Plan Years
beginning after December 31, 1989, plans that are aggregated in order to satisfy
section 401(m) of the Code must have the same plan year.
If a Highly Compensated Employee is subject to the family aggregation rules
of Code section 414(q)(6) because he is
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either a five-percent owner of the Employer or one of the 10 most highly paid
employees, the family group (as described in Section 2.29 of the Plan) shall be
treated as one Highly Compensated Employee for purposes of determining the
Actual Contribution Percentage. The Matching Contributions, amounts treated as
Matching Contributions, and the Compensation of the members of the family group
shall be combined in calculating the Actual Contribution Percentage. Except to
the extent taken into account in the preceding sentence, the Matching
Contributions, amounts treated as Matching Contributions, and Compensation of
all family members are disregarded in determining the Actual Contribution
Percentages for the groups of Highly Compensated Employees and Non-Highly
Compensated Employees.
2.6 "Actual Deferral Percentage" shall mean, for a specific group of
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Eligible Employees, the percentage determined by averaging the Deferral rates of
such Eligible Employees. An Eligible Employee's Deferral rate shall be
determined by dividing:
(a) the sum of (1) the Eligible Employee's Deferrals (if any) for the
Plan Year, and (2) at the election of the Plan Administrator, Qualified Matching
and/or Qualified Nonelective Contributions made to this Plan (provided such
Qualified Matching and/or Qualified Nonelective Contributions satisfy the
requirements of IRS Reg. (S)l.401(k)-l(b)(5), and are not included in the
numeration of the Actual Contribution Percentage)
by
(b) the Eligible Employee's Compensation for the Plan Year; however,
for any Plan Year beginning before January 1, 1992, Compensation attributable to
a period before the Eligible Employee becomes a Participant shall not be taken
into account and, for Plan Years beginning after 1988, Compensation in this
clause shall be limited to $200,000 or such greater amount as may be described
by appropriate governmental authorities.
In determining the Actual Deferral Percentage of an Eligible Employee who
is a Highly Compensated Employee, the numerator described in clause (a) above
shall include any Excess Deferral made in the Plan Year. In the case of an
Eligible Employee who is not a Highly Compensated Employee, the numerator shall
not include any Excess Deferral.
For purposes of this Section, an Eligible Employee is any Employee who is
directly or indirectly eligible to receive an allocation of Matching
Contributions under the Plan. In the case
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of an Eligible Employee who makes no Deferrals and receives no Matching
Contributions, the ratio described above shall be zero.
For purposes of this Section, each Eligible Employee's Actual Deferral
Percentage shall be rounded to the nearer one- hundredth of one percent of the
Eligible Employee's Compensation.
If in any Plan Year a Highly Compensated Employee is an Eligible Employee
in this Plan and in any other cash or deferred arrangement(s) (as described in
section 401(k) of the Code) maintained by the Employer or a Related Company
then, in determining the ratio described above for such Highly Compensated
Employee, this Plan and the other cash or deferred arrangement(s) shall be
treated as one plan. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan years, all cash or
deferred arrangements with plan years ending with or within the same calendar
year shall be treated as a single arrangement.
If this Plan is treated, for purposes of section 401(a)(4) or 410(b) of the
Code, as one plan with any other cash or deferred arrangement(s) maintained by
the Employer or a Related Company, this Plan and the other cash or deferred
arrangement(s) shall be treated as one plan in determining the Actual Deferral
Percentage. For Plan Years beginning after December 31, 1989, plans that are
aggregated must have the same plan year.
If a Highly Compensated Employee is subject to the family aggregation rules
of Code section 414(q)(6) because he is either a five-percent owner of the
Employer or one of the 10 most highly paid employees, the family group (as
described in Section 2.29 of the Plan) shall be treated as one Highly
Compensated Employee for purposes of determining the Actual Deferral Percentage.
The Deferrals, amounts treated as Deferrals, and the Compensation of the members
of the family group shall be combined in calculating the Actual Deferral
Percentage. Except to the extent taken into account in the preceding sentence,
the Deferrals, amounts treated as Deferrals, and Compensation of all family
members are disregarded in determining the Actual Deferral Percentages for the
groups of Highly Compensated Employees and Non-Highly Compensated Employees.
2.7 "ADP Test" shall mean the test described in Section 4.2(d).
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2.8 "Annual Additions" shall mean the sum of (a) Basic Contributions,
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Matching Contributions, Deferrals, Qualified Matching Contributions, Qualified
Nonelective Contributions, Excess Deferrals, Excess Aggregate Contributions, and
Excess
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Contributions, (b) forfeitures, and (c) the Participant's after-tax
contributions (excluding Rollover Contributions), if any, allocated in any
Limitation Year to a Participant's Accounts under this and any other defined
contribution plan maintained by the Employer or any Related Company. The Annual
Additions for any Limitation Year beginning before 1987 shall not be recomputed
to treat all of a Participant's own Contributions as Annual Additions.
Any Excess Aggregate Contributions, Excess Contributions, and Excess
Deferrals shall be included in determining a Participant's Annual Additions for
the Limitation Year for which such excess amounts are contributed to the Plan.
2.9 "Annuity Starting Date" shall mean (a) the first day of the period for
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which an amount is payable as an annuity under the Plan (whether by reason of
death, Retirement, or Disability), or (b) in the case of a benefit not payable
in the form of an annuity, the first day on which all events have occurred which
entitle the Participant or his spouse or beneficiary to such benefit.
2.10 "Basic Contributions" shall mean the amounts contributed to the Trust
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Fund pursuant to Item 14 of the Joinder Agreement.
2.11 "Break in Service" shall mean receiving credit for not more than 500
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Hours of Service during the 12-month period of any Plan Year.
(a) Notwithstanding the foregoing, if an employee is absent for one or
more of the following reasons, he shall be credited with an Hour of Service,
solely for purposes of this Section, for each Hour of Service for which he would
have received credit if he had continued in the active employ of the Employer
during the period of absence:
(1) layoff for a period not in excess of one year;
(2) leave of absence with approval of the Plan Administrator for
a period not in excess of one year, unless such period is extended by the Plan
Administrator;
(3) military service such that his right to reemployment is
protected by law.
(b) If an employee is absent from work by reason of pregnancy,
childbirth, or adoption, or for purposes of the care of such employee's child
immediately after birth or
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adoption such employee shall be credited, solely for purposes of this Section,
with the Hours of Service which would have been credited to such individual but
for such absence, or, if such hours cannot be determined, at the rate of eight
hours per normal workday, except that the total number of hours treated as Hours
of Service under this Subsection (b) shall not exceed 501.
(c) the hours described in Subsection (b) shall be treated as Hours of
Service:
(1) only in the Plan Year in which the absence from work begins,
if an employee would be prevented from incurring a Break in Service in such Plan
Year solely because the period of absence is treated as Hours of Service under
Subsection (b) ; or
(2) in any other case, the immediately following Plan Year.
2.12 "Code" shall mean the Internal Revenue Code of
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1986, as amended from time to time.
2.13 "Compensation" shall mean Compensation as described in Item 26 of the
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Joinder Agreement. Compensation shall include Deferrals under this Plan and
earnings deferred or waived by a Participant pursuant to a salary reduction
arrangement under this Plan or any other cash or deferred arrangement(s) or
cafeteria plan of the Employer. Compensation shall also include the earned
income of a Self-Employed Individual, as defined in section 401(c) (2) of the
Code.
Effective for Plan Years beginning after December 31, 1988, Compensation
shall not be more than $200,000 (or such greater amount as may be prescribed by
appropriate governmental authorities). In the case of a Plan Year beginning
after 1988 which is less than 12 months long, the dollar limit on Compensation
shall be determined by multiplying $200,000 by a fraction, the numerator of
which is the number of full calendar months occurring in the short Plan Year,
and the denominator of which is 12.
If, in a given Plan Year, a Participant is a five percent (5%) owner of the
Company or one of the 10 Highly Compensated Employees who receive the most pay
from the Company and all Affiliated Companies, and if any such Participant's
family members are also Participants in the Plan, the Participant and his family
member(s) shall be considered to be one Participant for purposes of applying the
dollar limit on Compensation described in the preceding paragraph. For purposes
of this paragraph, a Participant's "family members" are his
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spouse and his lineal descendants who have not attained age 19 by the end of the
Plan Year in question. If, as a result of the application of such rules, the
adjusted $200,000 limitation is exceeded, the limitation shall be prorated among
the affected individuals in proportion to each individual's Compensation as
determined under this Section prior to the application of the limitation.
2.14 "Contributions" shall mean (a) as to a Participant, his Deferrals and
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Rollover Contributions, and (b) as to the Employer, its Basic, Matching,
Qualified Matching, Qualified Nonelective, and top-heavy minimum Contributions.
2.15 "Deferrals" shall mean Contributions made by the Employer for a
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Participant out of amounts which would otherwise have been paid to the
Participant as salary or wages, pursuant to a salary reduction agreement between
the Employer and the Participant.
2.16 "Disability" shall mean (a) for a Participant covered under a long-
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term disability plan sponsored by the Employer, a disability of a nature which
enables the Participant to qualify for and to receive disability benefits under
such long-term disability plan; (b) for a Participant who is not covered under a
long-term disability plan sponsored by the Employer, his permanent inability to
perform his customary duties for the Employer due to a mental or physical
condition which can be expected to result in death or be of a long, continued,
and indefinite duration. Determination of whether a Participant who is not
covered under a long-term disability plan sponsored by the Employer is suffering
a Disability and the date on which the Disability commenced shall be made solely
by the Plan Administrator and shall be based on a medical certificate from a
physician or physicians found to be satisfactory by the Plan Administrator.
2.17 "Early Retirement Date" shall mean the first day of the calendar
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month in which the Participant attains the age designated in Item 8 of the
Joinder Agreement and terminates employment with the Employer and all Related
Companies.
2.18 "Effective Date" shall mean the date designated in Item 2 of the
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Joinder Agreement.
2.19 "Eligible Employee" shall mean any Employee eligible to participate in
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this Plan under Section 3.1.
2.20 "Employee" means any person who is employed by the Employer in an
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eligible classification (as designated in Item 7 of the Joinder Agreement)
including Self-Employed Individuals but
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excluding any person (a) who is retained as an independent contractor, or (b)
who is covered by a collective bargaining agreement unless such collective
bargaining agreement specifically provides for participation hereunder, or (c)
unless so specified in Item 7 of the Joinder Agreement, who is a part- time
employee regularly scheduled to perform fewer than 19 Hours of Service per week
and has not completed at least 1,000 Hours of Service in a Plan Year. Employees
of Related Companies shall be entitled to participate in the Plan only if such
Related Companies adopt the Plan. Unless so specified in the Joinder Agreement,
the term Employee shall not include any person who is a leased employee, whether
or not such person is a leased Employee within the meaning of section 414(n) of
the Code.
The term "leased employee" means any person (other than an employee of the
Employer) who is pursuant to an agreement between the Employer and any other
person ("leasing organization") has performed services for the Employer (or for
related persons determined in accordance with section 414(n) (6) of the Code) 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 Employer. Contributions or benefits provided to a leased employee by the
leasing organization which are attributable to services performed for the
Employer shall be treated as provided by the Employer.
A leased employee shall not be considered an employee of the Employer if:
(i) such employee is covered by a money purchase pension plan providing: (1) a
nonintegrated employer contribution rate of at least ten percent (10%) of
compensation, as defined in section 415(c) (3) of the Code, but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under section 125, section
402(a)(8), section 402(h), or section 403(b) of the Code, (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased employees do
not constitute more than twenty percent (20%) of the Employer's nonhighly
compensated workforce.
2.21 "Employer" shall mean the organization named in Item 1 of the
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Joinder Agreement, any additional organization which adopts the Plan, and any
successor entity which continues the Plan. The Employer shall, except as
otherwise provided in this Plan, act through the Plan Administrator. Where
required by the provisions of this Plan, a Related Company which has not adopted
the Plan may be treated as the Employer.
2.22 "Employer Contribution Account" shall mean the Account of each
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Participant to which Basic or Matching Contributions and forfeitures (if
allocated pursuant to the method
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specified in Item 20(a) of the Joinder Agreement) and top-heavy minimum
Contributions, if any, are credited, together with gains and losses thereon.
2.23 "Entry Date" shall mean each date specified in Item 10 of the Joinder
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Agreement.
2.24 "ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time.
2.25 "Excess Aggregate Contributions" shall means, for a given Plan Year,
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the excess of (a) the amount of those contributions made by or on behalf of a
Highly Compensated Employee which are taken into account for purposes of the ACP
Test in that Plan Year, over (b) the maximum amount of such contributions
permitted to be made for that Plan Year, as determined by the Plan Administrator
under Section 4.3(c).
2.26 "Excess Contributions" shall mean, for a given Plan year, the excess
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of (a) the amount of Deferrals made on behalf of a Highly Compensated Employee
in that Plan Year, over (b) the maximum amount of Salary Reduction Savings
permitted to be made for that Plan Year, as determined by the Plan Administrator
under Section 4.2(d).
2.27 "Excess Deferral" shall mean the excess of (a) the amount of Deferrals
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plus any other elective deferrals (as defined in section 402(g)(3)(A) of the
Code) made on behalf of an individual in the individual's taxable year over (b)
$7,000 (as adjusted to reflect cost-of-living increases), or, if applicable, the
lesser amount described in Section 4.8(b)(3)(B)(iii).
2.28 "401(k) Account" shall mean the Account of each Participant to which
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his Deferrals are credited, together with the gains and losses thereon. All
401(k) Accounts shall be fully vested at all times.
2.29 "Highly Compensated Employee" for a given Plan Year shall be the
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Highly Compensated Active and Former Employees who are described below. The
determination as to whether an employee is a Highly Compensated Employee shall
be made in accordance with section 414(q), the regulations thereunder, and the
rules described below.
(a) (1) "Highly Compensated Active Employee" shall
mean any employee who performs service for the Employer during the Determination
Year and who:
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(A) was at any time during either the Determination Year or the Look-
Back Year a five-percent (5%) owner of the Employer;
(B) had Income during the Look-Back Year which is in excess of $75,000
(as adjusted by the Internal Revenue Service to reflect cost-of-living
increases);
(C) had Income during the Look-Back Year which is in excess of $50,000
(as adjusted by the Internal Revenue Service to reflect cost-of-living
increases), provided that the employee is also in the Top-Paid Group for the
Look-Back Year;
(D) was at any time during the Look-Back Year an officer of the
Employer who had Income which is in excess of fifty percent (50%) of the amount
in effect under section 415(b) (1) (A) of the Code for the calendar year in
which the Look- Back Year begins (or, if there is no such officer, the highest-
paid officer of the Employer);
(E) had Income during the Determination Year which is in excess of
$75,000 (as adjusted by the Internal Revenue Service to reflect cost-of-living
increases) and is one of the 100 employees who have the most Income during the
Determination Year;
(F) had Income during the Determination Year which is in excess of
$50,000 (as adjusted by the Internal Revenue Service to reflect cost-of-living
increases), provided that the employee is also in the Top-Paid Group for the
Determination Year and is one of the 100 employees who have the most Income
during the Determination Year; or
(G) was at any time during the Determination Year an officer of the
Employer who had Income which is in excess of fifty percent (50%) of the amount
in effect under section 415(b) (1) (A) of the Code for the calendar year in
which the Determination Year begins (or, if there is no such officer, the
highest-paid officer of the Employer) and is also one of the 100 employees who
have the most Income during the Determination Year.
For purposes of Subsections (a) (1) CD) and (a) (1) (G), no more than 50
employees (or, if less, the greater of three employees or ten percent (10%) of
the employees) shall be treated as officers.
(2) "Determination Year" shall mean the Plan Year for which the
determination of Highly Compensated Employees is
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being made. "Look-Back Year" shall mean the 12 months preceding the
Determination Year.
(3) "Income" shall mean Limitation Compensation, including elective
deferrals under sections 125 and 402(a)(8) of the Code.
(4) "Top-Paid Group" shall mean the group consisting of the top twenty
percent (20%) of employees of the Employer for the Look-Back Year or
Determination Year, when employees are ranked on the basis of Income paid during
the relevant year. Solely for purposes of determining the number of employees
to be included in such group, the following employees shall not be counted:
(A) employees who have not completed six months of employment by
the end of the relevant year;
(B) employees who are normally scheduled to work fewer than 17-
1/2 hours per week;
(C) employees who normally work not more than six months during
any year;
(D) employees who have not attained age 21 by the end of the
relevant year: and
(E) employees who are non-resident aliens who receive no U.S.
source income from the Employer or any Related Company.
Employees covered by a collective bargaining agreement shall be counted in
determining the number of employees to be included in the Top-Paid Group unless
ninety percent (90%) or more of the employees of the Employer and all Related
Companies are covered by collective bargaining agreements and this Plan covers
only employees who are not covered by collective bargaining agreements. In such
a case, employees covered by a collective bargaining agreement shall not be
counted in determining the number of employees to be included in the Top-Paid
Group.
(5) "Highly Compensated Former Employee" shall mean any employee who
separated from service (or was deemed to have separated) prior to the
Determination Year, who performs no service for the Employer during the
Determination Year, and who was a Highly Compensated Active Employee for either
the separation year or any Determination Year ending on or after the employee's
55th birthday. However, an employee who separated from service prior to January
1, 1987 is a Highly Compensated
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Former Employee if during either (A) the year he separated from service or (B)
any year ending on or after his 55th birthday, he was a five-percent (5%) owner
of the Employer or had Income in excess of $50,000.
(b) If in any Look-Back Year or Determination Year an employee is a
member of
(1) the family of a five-percent (5%) owner of the Employer or
(2) the family of a Highly Compensated Employee who is one of
the 10 Highly Compensated Employees who have the most Income for the relevant
year,
the employee shall not be considered to be a separate employee, and the
employee's Income (and any contributions made on behalf of the employee) shall
be treated as paid to (or made on behalf of) the five-percent (5%) owner or the
Highly Compensated Employee.
For purposes of this Subsection, "family" means, with respect to any
Employee, the Employee's Spouse and lineal ascendants and descendants, and the
spouses of such lineal ascendants and descendants.
2.30 "Hour of Service" shall mean an hour for which:
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(a) an individual is directly or indirectly paid or entitled to
payment by the Employer for the performance of service to the Employer;
(b) back pay, irrespective of mitigation of damages, is either awarded
or agreed to; or
(c) an employee is directly or indirectly paid or entitled to payment
by the Employer on account of a period of time during which no duties are
performed due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, maternity or paternity leave of absence, or
any other leave of absence.
There shall be excluded from the foregoing those periods during which
payments are made or due under a plan maintained solely for the purpose of
complying with applicable workers' compensation, unemployment compensation, or
disability insurance laws. No more than 501 Hours of Service shall be credited
under clause (c) on account of any single, continuous period during which no
duties are performed, except to the extent provided in the Plan. Except as
otherwise provided in this Plan,
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an Hour of Service shall not be credited where an employee is being reimbursed
solely for medical or medically related expenses.
Hours of Service shall include employment with Related Companies, as
described in Section 3.3.
Hours of Service shall be credited in accordance with the rules set forth
in U.S. Department of Labor Reg. (S)2530.20Ob- 2(b) and (c).
Notwithstanding the foregoing, the Plan Administrator may, in accordance
with rules applied in a uniform and nondiscriminatory manner, elect to credit
Hours of Service using the following equivalencies:
Basis Upon Which Credit Granted to
Records Are Maintained Individual for Period
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shift actual hours for full shift
day 10 Hours of Service
week 45 Hours of Service
semi-monthly period 95 Hours of Service
month 190 Hours of Service
Hours of Service shall be credited for any individual who is considered a
leased employee for purposes of this Plan under Section 414(n) of the Code.
Hours of Service will also be credited as required by Code section 414(o).
2.31 "Joinder Agreement" shall mean the document executed by the Employer
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which describes additional terms applicable to the Plan.
2.32 "Limitation Compensation" shall mean, with respect to any Limitation
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Year, the amount in Subsection (a) reduced by the amount in Subsection (b)
where:
(a) is equal to the Participant's wages, salary, fees for professional
services, and other amounts received for personal services rendered in the
course of employment with the Employer or a Related Company, including, but not
limited to, commissions paid to salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips, bonuses,
taxable amounts received by the Participant through accident or health insurance
for personal
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injury or sickness or from a self-insured medical expense reimbursement plan,
moving expenses paid or reimbursed by the Employer or a Related Company in
excess of any amount deductible by the Participant, wages or payments in lieu of
wages received on account of absence from work for permanent and total
disability, the amount included in the taxable income of the Participant as a
result of the grant of a non-qualified stock option by the Employer or a Related
Company, and the amount includible in the gross income of the Participant as the
result of an election described in section 83(b) of the Code; and
(b) is equal to (1) the contributions made by the Employer to a
qualified plan to the extent that, before the application of section 415 of the
Code to that plan, the contributions are not includible in the gross income of
the Participant for the year in which contributed, (2) any distributions from a
plan of deferred compensation, except that any amounts received by an Employee
pursuant to an unfunded non-qualified plan may be included in the year that such
amounts are included in gross income, (3) amounts realized from the exercise of
a non-qualified stock option or from stock or property which is currently
taxable under section 83 of the Code, (4) amounts realized from the sale,
exchange, or other disposition of stock acquired through the exercise of a
qualified or incentive stock option, and (5) other amounts which receive special
tax benefits, such as premiums for group term life insurance to the extent not
includible in gross income, or contributions made by the Employee to a
simplified employee pension plan which are deductible by the Employee or toward
the purchase of an annuity contract described in section 403(b) of the Code,
determined in accordance with the provisions of Treas. Reg. 51.415-2(d) (1)
2.33 "Limitation Year" shall mean the Plan Year or such other 12-
---------------
consecutive month period as may be designated by the Employer in Item 5 of the
Joinder Agreement; provided, however, that for the first Limitation Year, it
shall mean the period commencing on the Effective Date and ending on the last
day of the Plan Year or such other period as designated in Item 5 of the Joinder
Agreement.
2.34 "Matching Contributions" shall mean the amounts contributed to the
----------------------
Trust Fund pursuant to Item 13 of the Joinder Agreement.
2.35 "Net Profits" shall mean the Employer's current or accumulated
-----------
worldwide profits, determined on either (a) a consolidated basis or (b) a non-
consolidated basis as to the Employer or any subsidiary or subsidiaries of the
Employer which participate in the Plan. Profits shall be calculated from
-15-
financial reports of the Employer before federal and state taxes on, or measured
by, income and before contributions under this Plan.
2.36 "Non-Highly Compensated Employee" shall mean any Employee of the
-------------------------------
Employer who is not a Highly Compensated Employee.
2.37 "Normal Retirement Date" shall mean the first day of the calendar
----------------------
month in which the Participant attains the age designated in Item 9 of the
Joinder Agreement; provided, however, that if no age is specified, it shall mean
the first day of the calendar month in which the Participant attains age 65. An
Employee who continues in the employ of the Employer after attaining his Normal
Retirement Date shall continue to participate in the Plan on or after attaining
his Normal Retirement Date.
2.38 "Owner-Employee" shall mean a Self-Employed Individual who owns more
--------------
than ten percent (10%) of either the capital interest or the profits interest in
the Employer and who receives earned income from the Employer.
2.39 "Participant" shall mean any individual for whom an Account is
-----------
maintained in the Plan; provided, however, that an employee who makes a Rollover
Contribution prior to his becoming a Participant shall not be deemed a
Participant for purposes of Employer Basic and Matching Contributions or for
Deferrals or for the allocation of forfeitures, if any.
2.40 "Plan" shall mean this document, including the Joinder Agreement, as
----
it may be amended from time to time.
2.41 "Plan Administrator" shall mean the Employer or such other
------------------
individual(s) designated by the Employer to administer the Plan.
2.42 "Plan Year"shall mean the 12-consecutive-month period designated in
---------
Item 4 of the Joinder Agreement; provided, however, that for the first Plan
Year, it shall mean the period commencing on the Effective Date and ending on
the last day of the Plan Year, as designated in Item 4 of the Joinder Agreement.
2.43 "Preretirement Survivor Annuity" shall mean an annuity for the life of
------------------------------
a Participant's surviving Spouse, the Actuarial Equivalent of which is equal to
the value of the Participant's Account as of the date of the Participant's
death, reduced by the amount of any loan outstanding as of the date of the
Participant's death.
-16-
2.44 "Qualified Joint and Survivor Annuity" shall mean an annuity for the
------------------------------------
life of the Participant and his Spouse which is not less than fifty percent
(50%) and not more than one hundred percent (100%) of the amount of the annuity
which is payable during the joint lives of the Participant and the Spouse and
which is the Actuarial Equivalent of a single annuity for the life of the
Participant. The term "Qualified Joint and Survivor Annuity" also includes any
annuity in a form having the effect of an annuity described in the preceding
sentence. The actual percentage of the survivor benefit will be elected by the
Participant. If no election is made by the Participant, the percentage of the
survivor benefit will be fifty percent (50%).
2.45 "Qualified Matching Contribution" shall mean a Matching Contribution
-------------------------------
made by the Employer which is allocated to the Qualified Matching Contribution
Account of a Participant who is not a Highly Compensated Employee and which the
Participant may not elect to receive in cash. Qualified Matching Contributions
shall be fully vested, and may not be distributed to the Participant earlier
than the earliest of the times specified in Section 4.8, Article VII, Article
VIII, Article IX, or Section 11.2 of the Plan.
2.46 "Qualified Matching Contribution Account" shall mean the Account to
---------------------------------------
which are credited Qualified Matching Contributions and gains and losses
thereon.
2.47 "Qualified Nonelective Contribution" shall mean a Basic Contribution
----------------------------------
made by the Employer which is allocated to the Qualified Nonelective
Contribution Account of a Participant who is not a Highly Compensated Employee
and which the Participant may not elect to receive in cash. Qualified
Nonelective Contributions shall be fully vested, and may not be distributed to
the Participant earlier than the earliest of the times specified in Section 4.8,
Article VII, Article VIII, Article IX, or Section 11.2 of the Plan.
2.48 "Qualified Nonelective Contribution Account" shall mean the Account to
------------------------------------------
which are credited Qualified Nonelective Contributions and gains and losses
thereon.
2.49 "Recordkeeper" shall mean the person or entity retained by the Plan
------------
Administrator on behalf of the Plan to provide specified administrative services
to the Plan.
2.50 "Related Company" shall mean an organization which, with the Employer,
---------------
is a member of a controlled group of corporations, a group of trades or
businesses under common control, or an affiliated group, within the meaning of
sections 414(b), 414(c) and 414(m) of the Code and, for purposes of
-17-
Sections 2.32 and 5.2 of the Plan, under section 415(h) of the Code.
2.51 "Retirement" shall mean a Participant's termination of employment on
----------
or after his Normal or Early Retirement Date.
2.52 "Rollover Account" shall mean the Account of an Employee to which his
----------------
Rollover Contributions are credited, together with the gains and losses thereon.
All Rollover Accounts shall be fully vested at all times.
2.53 "Rollover Contribution" shall mean the amount transferred by or for an
---------------------
Employee to this Plan from another tax- qualified retirement plan or from a
"conduit" individual retirement account, in accordance with Section 4.6.
2.54 "Self-Employed Individual" shall mean an individual who has earned
------------------------
income for the taxable year from the trade or business for which the Plan is
established; also, individual who would have had earned income but for the fact
the trade or business had no net profits for the taxable year.
2.55 "Spouse" shall mean the spouse or surviving spouse of a Participant;
------
provided, however, that a former Spouse will be treated as the Spouse or
surviving Spouse to the extent provided under a qualified domestic relations
order, as that term is described in section 414(p) of the Code.
2.56 "Trust Fund" shall mean the fund established under the Trust
----------
Agreement.
2.57 "Trust Agreement" shall mean the trust agreement entered into for the
---------------
purpose of investing and administering the Trust Fund.
2.58 "Trustee" shall mean the Trustee appointed by the Employer under the
-------
Trust Agreement. The Trustee shall be the named fiduciary with respect to
management and control of Plan assets held by it and shall have exclusive and
sole responsibility for the custody and investment thereof in accordance with
the Trust Agreement.
2.59 "Valuation Date" shall mean the last day of each Plan Year and each
--------------
interim date on which the Recordkeeper determines that a valuation of the Trust
Fund shall be made.
2.60 "Years of Service" shall mean the number of years of an employee's
----------------
employment counted with respect to determining
-18-
an employee's participation and vested status under the Plan, as further
described in Articles III and VII.
-19-
ARTICLE III
-----------
PARTICIPATION AND SERVICE
-------------------------
3.1 Requirements for Participation
------------------------------
(a) An Employee who meets the requirements for participation specified
in Item 7 of the Joinder Agreement shall become eligible to participate as of
the first Entry Date coincident with or next following the date on which he
meets such requirements. No Employee shall become eligible to participate in
the Plan prior to the Effective Date of the Plan, and no Employee shall become
eligible to participate unless he is an Employee on or after the date as of
which this Plan was first established.
(b) If the Joinder Agreement requires completion of a period of
service to participate, the following rules shall apply:
(1) For the purposes of this Article, a Year of Service shall mean
a 12-consecutive-month period, beginning with the date of an Employee's
commencement of employment, during which the Employee is credited with 1,000 or
more Hours of Service. An Employee who is not credited with 1,000 Hours of
Service during his initial 12 months of employment shall complete a Year of
Service as of the end of any Plan Year in which he is credited with 1,000 or
more Hours of Service. The first Plan Year in which an Employee shall have the
opportunity to meet such requirement shall be the Plan Year which includes the
first anniversary of the Employee's commencement of employment.
(2) For the purposes of this Article, if an Employee is required
to complete a period of service which is less than a Year of Service, an
Employee must be employed with the Employer for such consecutive-month period of
service without regard to the number of Hours of Service the Employee performs
during such period.
(c) A Participant shall cease to actively participate in the Plan when
his employment terminates.
(d) A Participant whose employment is terminated and who is later
reemployed as an Employee shall resume his participation in the Plan as of the
date of his reemployment. Deferrals may resume on the first Entry Date following
his rehire, provided that he is an Eligible Employee on that date.
-20-
(e) If an Employee meets the requirements for participation specified
in Item 7 of the Joinder Agreement but terminates his employment before becoming
a Participant, he shall become a Participant in the Plan on the Entry Date
immediately following his date of reemployment, if he is reemployed as an
Employee before he has a Break in Service. If such an individual is reemployed
after he has a Break in Service, he shall be treated as a new Employee for
purposes of this Plan.
(f) If an Employee terminates his employment before meeting the
requirements for participation specified in Item 7 of the Joinder Agreement and
then is reemployed, he shall be treated as a new Employee for purposes of this
Plan.
3.2 Data. Each Eligible Employee shall furnish to the Plan Administrator
----
such data as the Plan Administrator may consider necessary for the determination
of the Eligible Employee's rights and benefits under the Plan and shall
otherwise cooperate fully with the Plan Administrator in the administration of
the Plan.
3.3 Related Companies. For purposes of this Article III and Article VII,
-----------------
service with any Related Company shall be treated as if it were employment with
the Employer, and all Employees of the Employer and any Related Company shall be
treated as employed by a single Employer, but no Employee shall become a
Participant on account of being employed by such a Related Company. A
Participant shall cease to be eligible to make and receive Contributions if he
transfers to such a Related Company unless he continues simultaneously to be an
Employee.
-21-
ARTICLE IV
----------
CONTRIBUTIONS: IN-SERVICE WITHDRAWAL: LOANS
--------------------------------------------
4.1 General.
-------
(a) The Joinder Agreement may authorize four types of Contributions:
(1) Deferrals; (2) Matching Contributions; (3) Basic Contributions; and (4)
Rollover Contributions; provided, however, that Rollover Contributions shall be
made in accordance with Section 4.6.
(b) The Joinder Agreement may require that the Employer's
Contributions (excluding Deferrals) shall not exceed the amount of the
Employer's Net Profits.
4.2 Participant Deferrals.
---------------------
(a) Subject to the Joinder Agreement, Participants may elect to have a
portion of their Compensation deferred and to have these Deferrals contributed
to the Plan by the Employer. Deferrals shall be withheld from a Participant's
paychecks in accordance with the rules established by the Plan Administrator. A
Participant's Deferrals cannot exceed in any one taxable year the amount
determined in Subsection (c), and Deferrals shall cease at such time as the
limit determined in Subsection (c) has been reached.
All Deferrals shall be paid by the Employer to the Trustee as soon as
practicable, but in no event more than 90 days after the date on which such
Deferrals were withheld from the Participant's Compensation; provided, however,
that in no event shall Deferrals for a Plan Year be paid by the Employer to the
Trustee later than 30 days after the end of the Plan Year.
A Participant who does not make an authorization under Subsection (a) when
he first joins the Plan may make one at any later date. The effective date of
such an authorization shall be the Entry Date following the date on which the
Plan Administrator receives the authorization form.
If the contribution rate of Participants who are Highly Compensation
Employees must be reduced as provided in this Section and/or Section 4.3, the
Plan Administrator shall advise each affected Participant of his reduced
contribution rate(s).
(b) The Recordkeeper shall establish on its books a 401(k) Account in
the name of each Participant who elects to
-22-
make Deferrals. A Participant's 401(k) Account shall be credited with his
Deferrals, credited or debited with gains or losses of the Trust Fund, debited
for the purchase of life insurance, and debited for distributions.
(c) A Participant's maximum allowable Deferral shall not exceed the lowest
of:
(1) the maximum amount permitted under the Joinder Agreement;
(2) the amount which, when added to his Annual Additions for the
Limitation Year (as determined in accordance with Section 5.2 before taking the
Deferral into account) equals the Participant's maximum allowable Annual
Additions for such Limitation Year;
(3) the maximum Deferral allowable under Subsection (d); and
(4) for years beginning on or after January 1, 1987, $7,000, or such
other amount permitted under section 402(g) of the Code for such year.
(d) For Plan Years beginning on or after January 1, 1987, the Actual
Deferral Percentage of Highly Compensated Employees shall not exceed the Actual
Deferral Percentage of Non-Highly Compensated Employees by more than the
applicable amount set forth in the following ADP Test:
If the Non-Highly The Actual Deferral
Compensated Employees Percentage of the Highly
Have an Actual Compensated Employees
Deferral Percentage of: Shall Not Exceed:
---------------------- -----------------
0% 0%
More than 0% but 2.0 times the Non-
less than 2% Highly Compensated Employees'
Actual Deferral Percentage
2% to 8% The Non-Highly Compensated
Employees' Actual Deferral
Percentage plus two percentage
points
More than 8% 1.25 times the Non-Highly
Compensated Employees' Actual
Deferral Percentage
-23-
(e) If the Actual Deferral Percentage of Highly Compensated Employees
for a Plan Year would exceed the maximum Deferral rate permissible, the Employer
shall, to the extent permitted under applicable Regulations promulgated by the
Secretary of the Treasury, require one or more Highly Compensated Employees who
are Participants in the Plan to adjust their Deferral rates so that the Actual
Deferral Percentage of Highly Compensated Employees will not exceed the maximum
Deferral rate permissible. The Employer shall prescribe adjustment to Deferral
rates in a uniform and nondiscriminating manner. In the alternative, the
Employer may make a Qualified Nonelective Contribution or a Qualified Matching
Contribution for Non-Highly Compensated Employees; provided, however, that such
Contribution shall not cause the Participants' annual Deferrals to exceed the
maximum allowable limits as determined in accordance with Subsection (c)
(f) (1) In the event that the Plan does not satisfy the tests set
forth in Subsection (d) as of the last day of a given Plan Year, the Employer
shall direct the Trustee to distribute to each Highly Compensated Employee his
Excess Contributions, plus any income attributable thereto. For purposes of
this Subsection, the Deferral rate of each Highly Compensated Employee shall be
reduced, beginning with the Deferral rate of the Highly Compensated Employee
with the highest Deferral rate, to the extent required to enable the Plan to
satisfy the ADP Test of Subsection (d), but not below the Deferral rate as
adjusted by this Subsection of the Highly Compensated Employee with the next
highest Deferral rate. This leveling process shall be repeated until the Plan
satisfies the ADP Test.
(2) For the purposes of this Section, in the event that the Plan
does not satisfy the ADP Test set forth in Subsection (d) as of the last day of
a given Plan Year, the income (or loss) allocable to Excess Contributions is the
sum of (A) income or loss allocable to the Participant's 401(k) Account for the
Plan Year multiplied by a fraction, the numerator of which is such Participant's
Excess Contributions for the year and the denominator of which is the
Participant's 401(k) Account balance attributable to Deferrals without regard to
any income or loss occurring during such Plan Year; and (B) ten percent of the
amount determined under (A) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution counting the month
of distribution if distribution occurs after the 15th of such month.
(3) Excess Contributions shall be distributed as soon as is
administratively practicable after receipt of such direction, but in no event
later than the last day of the Plan
-24-
Year following the Plan Year in which the Excess Contributions were contributed
to the Plan.
(g) Excess Contributions shall be treated as Annual Additions under
the Plan.
(h) The amount of Excess Contributions to be distributed under
Subsection (f) shall be reduced by the amount of Excess Deferrals which exceed
the limits of Subsection (c) (4) that have been distributed to a Participant.
(i) No nondeductible voluntary Employee contributions shall be
permitted.
(j) In the case or a Highly Compensated Employee whose contribution
rate is determined under the family aggregation rules of Code section 414(q)(6),
the family group shall be treated as one Highly Compensated Employee for
purposes of determining the maximum permissible contribution rate under
Subsection (f). After the amount of Excess Contributions for the family group
has been determined, such amount shall be ratably apportioned among the members
of the family group on the basis of the Deferrals (and amounts treated as
Deferrals) of each family member that is combined to determine the combined
Actual Deferral Percentage.
(k) Matching Contributions which are attributable to Excess
Contributions shall be forfeited and shall be used as Matching Contributions.
4.3 Employer Contributions.
----------------------
(a) The amount of the Employer's Contributions to the Plan shall be
determined in accordance with the Joinder Agreement. In the event the Plan is
determined to be a Top-Heavy Plan or a Super Top-Heavy Plan, a minimum
Contribution for Non-Key Employees shall be made in accordance with the
provisions of Article XII. If any Related Company is prevented from making a
Contribution under this Section by reason of having (1) made an election under
Item 15(a) of the Joinder Agreement, and (2) insufficient Net Profits, a
Contribution on behalf of such Related Company may be made by the Employer or by
any other Related Company.
(b) The Recordkeeper shall establish on its books an Employer
Contribution Account in the name of each Participant. Each Participant's
Employer Contribution Account shall be credited with the Basic and/or Matching
Contributions allocated to such Participant, credited or debited with gains or
losses of the Trust Fund, and debited for distributions.
-25-
(c) (1) For any Plan Year, the Actual Contribution Percentage of
Highly Compensated Employees shall not exceed the Actual Contribution Percentage
of Non-Highly Compensated Employees by more than the applicable amount set forth
in the following ACP Test:
If the Non-Highly
Compensated Employees The Actual Contribution
have an Actual Percentage of
Contribution the Highly Compensated
Percentage of: Employees Shall Not Exceed:
-------------- ---------------------------
0% 0%
More than 0% but 2.0 times the Non-Highly
less than 2% Compensated Employees' Actual
Contribution Percentage
2% to 8% The Non-Highly Compensated
Employees' Actual Contribution
Percentage plus two percentage
points
More than 8% 1.25 times the Non-Highly
Compensated Employees' Actual
Contribution Percentage
(2) If at any time before the end of a Plan Year the Plan
Administrator determines that the Plan does not satisfy the ACP Test, it may
reduce the contribution rates of one or more Participants who are Highly
Compensated Employees so that the ACP Test is satisfied. The Plan Administrator
shall prescribe such reductions in a uniform and nondiscriminatory manner.
(3) In the event that the Plan does not satisfy the ACP Test set
forth in Subsection (c) (1) as of the last day of a Plan Year, Excess Aggregate
Contributions shall be disposed of as follows:
(A) the Actual Contribution Percentage of each Highly
Compensated Employee shall be reduced, beginning with the Actual Contribution
Percentage of the Highly Compensated Employee with the highest Actual
Contribution Percentage, to the extent required to enable the Plan to satisfy
the ACP test of Section 4.3; but not below the Actual Contribution Percentage as
adjusted by this Subsection (c) of the Highly Compensated Employee with the next
highest Actual Contribution Percentage. This leveling process shall be repeated
until the Plan satisfies the ACP Test.
-26-
(B) (i) In the case of each Highly Compensated Employee who
has no vested interest (determined in accordance with Article VII) in his
Employer Contribution Account as of the last day of such Plan Year, the Highly
Compensated Employee's Excess Aggregate Contributions, plus any income
attributable thereto, shall be forfeited. Such amounts shall be held in the Plan
to pay administrative expenses of the Plan and, to the extent of any such
amounts remaining after payment of the administrative expenses of the Plan, be
used as Matching Contributions.
(ii) In the case of each Highly Compensated Employee who
is partially or fully vested in his Employer Contribution Account as of the last
day of such Plan Year, a percentage of the Highly Compensated Employee's Excess
Aggregate Contributions shall be distributed to the Highly Compensated Employee,
and the remainder, if any, shall be forfeited. The percentage to be distributed
shall be equal to the Highly Compensated Employee's vested percentage,
determined in accordance with the vesting provisions of the Plan. Such
percentage of the Excess Aggregate Contributions, plus any income attributable
thereto, shall be distributed to the Highly Compensated Employee no later than
the last day of the Plan Year following the Plan Year in which the Excess
Aggregate Contributions were contributed to the Plan. The forfeited amount, plus
any income attributable thereto, shall be held in the Plan to pay administrative
expenses of the Plan and, to the extent of any such amounts remaining after
payment of the administrative expenses of the Plan, be used as Matching
Contributions.
(iii) Excess Aggregate Contributions of Participants who
are subject to the family aggregation rules of Code section 414(q)(6) shall be
allocated among the family members in proportion to the Matching Contributions
(and amounts treated as Matching Contributions) of each family member that is
combined to determine the combined Actual Contribution Percentage.
(C) The income (or loss) allocable to Excess Aggregate
Contributions is the sum of: (i) income (or loss) allocable to the portion of
the Participant's Employer Contribution Account attributable to Matching
Contributions for the taxable year multiplied by a fraction, the numerator of
which is the Participant's Excess Aggregate Contributions and the denominator of
which is the portion of such Participant's Employer Contribution Account which
is attributable to Matching Contributions without regard to any income (or loss)
occurring during such taxable year; and (ii) ten percent of the amount
determined under (i) multiplied by the number of whole calendar
-27-
months between the end of the Participant's taxable year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
(4) Excess Aggregate Contributions shall be treated as Annual
Additions under the Plan.
4.4 Time for Payment for Employer Contributions. Except as otherwise
-------------------------------------------
required in Section 4.2(a), Employer Contributions for a Plan Year with or
within the Employer's taxable year may be made at any time during such taxable
year, but in no event later than the date, including extensions, on which the
Employer's federal income tax return is due with respect to such taxable year,
or such later date as may be permitted under applicable law. If the Employer
makes a Contribution after the end of a Plan Year or taxable year, as the case
may be, it shall notify the Recordkeeper in writing that the Contribution is
made for a specified prior Plan Year or taxable year and the Recordkeeper and
the Trustee shall treat such Contribution as having been made on the last day of
such prior Plan Year or taxable year.
4.5 Additional Limitation on Participant Deferrals and Employer
------------------------------------------------------------
Contributions
-------------
(a) In addition to the limitations imposed by other provisions of this
Plan, the sum of the Actual Deferral Percentage of the entire group of Eligible
Employees who are Highly Compensated Employees and the Actual Contribution
Percentage of that entire group may not exceed the aggregate limit described in
Subsection (b).
(b) For the purposes of this Section, the aggregate limit for any Plan
Year is the greater of the amounts described in paragraphs (1) and (2) below:
(1) This amount is the sum of:
(A) one hundred twenty-five percent (125%) of the greater of
(i) the Actual Deferral Percentage of the group of Eligible Employees who are
Non-Highly Compensated Employees in the Plan Year or (ii) the Actual
Contribution Percentage of the group of Eligible Employees who are Non-Highly
Compensated Employees in the Plan Year, and
(B) 2.0 plus the lesser of (i) or (ii) above. In no event,
however, shall this amount exceed two hundred percent (200%) of the lesser of
(i) or (ii) above.
(2) This amount is the sum of:
-28-
(A) one hundred twenty-five percent (125%) of the lesser of
(i) the Actual Deferral Percentage of the group of Eligible Employees who are
Non-Highly Compensated Employees in the Plan Year or (ii) the Actual
Contribution Percentage of the group of Eligible Employees who are Non-Highly
Compensated Employees in the Plan Year, and
(B) 2.0 plus the greater of (i) or (ii) above. In no event,
however, shall this amount exceed two hundred percent (200%) of the greater of
(i) or (ii) above.
(c) For purposes of this Section, the Actual Deferral Percentage and
Actual Contribution Percentage of the group of Eligible Employees who are Highly
Compensated Employees shall be determined after any corrective distributions of
Excess Deferrals, Excess Contributions, and Excess Aggregate Contributions.
(d) If the Plan does not satisfy the aggregate limit test of this
Section as of the last day of a given Plan Year, the Actual Contribution
Percentage of the group of Eligible Employees who are Highly Compensated
Employees shall be reduced by the leveling process described in Section
4.3(c)(2).
4.6 Rollover Contributions
----------------------
(a) To the extent permitted by rules established by the Plan
Administrator and the provisions of this Section, an Employee may transfer or
have transferred directly to the Trust Fund, from any qualified retirement plan
of a former employer, all or a portion of his interest in the distributing plan;
provided, however, that the interest being transferred shall not include
nondeductible contributions made to the distributing plan by the Employee,
unless the transfer to the Trust Fund is directly from the funding agent of the
distributing plan.
(b) To the extent permitted by rules established by the Plan
Administrator and the provisions of this Section, an Employee who has
established an individual retirement account to hold distributions received from
qualified retirement plans of former employers may, with the consent of the Plan
Administrator, transfer all of the assets of such individual retirement account
to the Trust Fund.
(c) The Recordkeeper shall establish on its books a Rollover Account
in the name of each Employee who elects to make a Rollover Contribution. The
distributions transferred by or for an Employee from another qualified
retirement plan or from an individual retirement account shall be credited to a
separate account which shall be part of the Employee's Rollover Account.
-29-
If the Employee is not otherwise a Participant, he shall be considered a
Participant with respect to his Rollover Account, but for no other Plan purposes
until he otherwise becomes a Participant in the Plan, pursuant to the provisions
of Section 3.1.
(d) The Trustee shall not accept a distribution from any other
qualified retirement plan or from an individual retirement account unless the
following conditions are met:
(1) the distribution being transferred must be transferred
directly from the fiduciary of the distributing plan or from the sponsor of the
individual retirement account, or it must be transferred by the Employee within
60 days after the Employee receives the distribution from such other qualified
retirement plan or individual retirement account; and
(2) distributions from a plan for a self-employed person
shall not be transferred to this Plan, unless the transfer is directly to the
Trust Fund from the fiduciary of the distributing plan.
(e) The Plan Administrator shall maintain the records required by
section 401(a) (9) of the Code and Regulations promulgated by the Secretary of
the Treasury.
4.7 Fund
----
(a) All Contributions to the Trust Fund in accordance with this
Article shall constitute a fund held for the benefit of Participants and their
Spouses and beneficiaries under and in accordance with the Plan and the Trust
Agreement. No part of the principal or income of the Trust Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of such
Participants and their Spouses and beneficiaries and the payment of
administrative expenses of the Plan and the Trust Fund; provided, however, that
in the case of a Contribution made by the Employer (1) as a mistake of fact, or
(2) for which a tax deduction is disallowed, in whole or in part, by the
Internal Revenue Service, or (3) which is conditioned upon the initial
qualification of the Plan under section 401(a) of the Code, the application for
determination relating to initial qualification is filed by the due date of the
Employer's return for the taxable in which the Plan is adopted, or such later
date as the Secretary of the Treasury may prescribe, and such initial
qualification cannot be obtained, the Employer shall be entitled to a refund of
such Contributions.
(b) Any refund of Contributions described in Subsection (a) must be
made (1) within one year after payment of
-30-
a Contribution made as a mistake of fact, or (2) within one year after
disallowance of the tax deduction, limited to the extent of such disallowance,
or (3) within one year of the date on which the initial qualification or the
Plan is denied by the Internal Revenue Service, as the case may be.
(c) All Contributions are expressly conditioned on their deductibility
for federal income tax purposes.
4.8 Withdrawals
-----------
(a) (1) Until March 31, 1989, with the approval of the Plan
Administrator, and in accordance with rules established by the Plan
Administrator, a Participant may withdraw up to the total value of the vested
portion of his Employer Contribution, his Rollover, and his 401(k) Accounts, but
excluding amounts invested in life insurance and earnings credited to his 401(k)
Account after December 31, 1988. Except as otherwise provided in this Plan,
such withdrawal will not affect the Participant's eligibility to participate in
the Plan or his vesting service under the Plan. The Participant shall submit to
the Plan Administrator, in the manner specified by the Plan Administrator, a
written request for such withdrawal, which request shall state the amount of the
withdrawal and represent that the withdrawal is to be made for one or more of
the following purposes:
(A) purchase of a principal residence for the Participant;
(B) post-secondary educational expenses for the
Participant's children;
(C) major medical expenses of the Participant or his
immediate family which are not reimbursed under any medical insurance plan; or
(D) such other hardship as shall be approved by the Plan
Administrator and which is consistent with applicable law.
(2) A withdrawal shall be permitted under this Section only if the
Plan Administrator finds that it is necessary in light of immediate and heavy
financial needs of the Participant. The amount of the withdrawal may not exceed
the amount required to meet the immediate financial need created by the hardship
and which is not reasonably available from other resources of the Participant.
The Plan Administrator may prohibit Participants who receive hardship
distributions from making Deferrals under Section 4.2 for a stated period of
time;
-31-
provided, however, that such suspension period shall not exceed one year from
the date of the withdrawal on account of hardship.
(b) (1) Commencing on April 1, 1989, with the approval of the Plan
Administrator, and in accordance with rules established by the Plan
Administrator, a Participant may withdraw up to the total value of the vested
portion of his Employer Contribution, his Rollover, and his 401(k) Accounts, but
excluding amounts invested in life insurance and earnings credited to his 401(k)
Account after December 31, 1988. Except as otherwise provided in this Plan,
such withdrawal will not affect the Participant's eligibility to participate in
the Plan or his vesting service under the Plan.
(2) The Employer shall elect, in Item 27 the Joinder Agreement,
the manner in which the existence of a hardship shall be determined.
(3) The Plan Administrator shall approve a hardship withdrawal
only if the Participant, at the Participant's election, meets the requirements
of either Subsection (A) or (B) as follows.
(A) The Participant must deliver with his withdrawal
application a signed statement that he has attempted to meet and has failed to
meet his immediate and heavy financial need by all of the following means:
(i) ceasing to make Deferrals to this Plan;
(ii) receiving all distributions (other than hardship
distributions) and all non-taxable loans available to him from all plans
maintained by the Employer and all Related Companies;
(iii) borrowing from commercial sources on reasonable
commercial terms;
(iv) reimbursement or compensation by insurance or
otherwise;
(v) reasonable liquidation of his assets (including the
assets of his spouse and minor children that are reasonably available to him),
to the extent that such liquidation would not itself cause an immediate and
heavy financial need.
(B) The Participant must:
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(i) obtain all distributions (other than hardship
distributions) and all non-taxable loans available to him under all plans
maintained by the Employer and all Related Companies;
(ii) suspend his Deferrals under this Plan and his
elective contributions and employee contributions under all other plans
maintained by the Employer and all Related Companies (except contributions to a
health or welfare plan and mandatory contributions to a defined benefit pension
plan) for a period of 12 months, beginning with the first payroll period that
begins after the date on which the withdrawn amount is paid to the Participant;
(iii) limit the maximum amount of Deferrals which he
may make in his taxable year following the year in which the hardship withdrawal
is taken to an amount equal to that described in Subsection 4.2(c) (4) during
the Participant's taxable year following the year of his hardship distribution
less the amount of Deferrals the Participant made during the taxable year in
which he received the hardship distribution.
If a Participant must suspend his Deferrals under this Plan for a period of
12 months as described in Subsection (B) (ii), such Participant shall again be
eligible to make Deferrals to the Plan as of the first Entry Date which next
follows the end of the 12-month suspension of Deferrals.
(c) A Participant who has attained age 59-1/2 may withdraw amounts
from his Accounts in the absence of a hardship in accordance with rules
established by the Plan Administrator.
(d) With the approval of the Plan Administrator, a Participant may
withdraw the total value of his Accounts upon:
(1) termination of the Plan without establishment of another
defined contribution plan, other than an employee stock ownership plan (as
defined in section 4975(e) or section 409 of the Code) or a simplified employee
pension plan as defined in section 408(k) of the Code;
(2) the sale of the Employer of substantially all of its assets
used in a trade or business, if the Participant making the withdrawal begins
employment with the corporation acquiring such assets; or
(3) the date of the sale by the Employer of its interest in a
subsidiary, if the withdrawal is made by a Participant who continues employment
with such subsidiary.
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(e) Withdrawals under Subsections (a), (b), and (c) may only be made
from a Participant's vested interest in his Accounts and shall not include
amounts attributable to the cash value of life insurance investments.
(f) The amount of any withdrawal shall be determined on the basis of
the value of the Participant's Accounts as of the Valuation Date coincident with
or immediately preceding the date of such withdrawal.
(g) Distribution shall be made out of the Participant's Accounts
invested in the fixed income investment fund, and then out of the balance of his
Accounts invested in other investment funds, as directed by the Plan
Administrator.
(h) A Participant may not repay any portion of his Accounts withdrawn
pursuant to the provisions of this Section.
(i) Each Participant who makes a written request for a withdrawal must
execute and deliver to the Plan Administrator written consent acknowledging that
his Spouse, if any, agrees to the withdrawal and acknowledging that such
withdrawal will reduce the amount of any benefits payable under the Plan. Such
consent must be signed by his Spouse and witnessed by a Plan representative or a
notary public.
4.9 Loans to Participants
---------------------
(a) (1) Until October 17, 1989, a Participant who is an Employee may
receive a loan from the Plan in accordance with the provisions of this
Subsection (a). A pooled loan account may be established in accordance with
Section 10.8. No loans shall be available to an Owner-Employee or shareholder
in an S Corporation.
(2) A Participant who wishes to borrow money from the Plan shall
file a written loan request with the Plan Administrator. The Plan Administrator,
in its sole discretion, shall approve or deny the loan and the Plan
Administrator shall exercise its discretion in a uniform and non-discriminatory
manner. No loan shall be granted unless the following requirements are
satisfied:
(A) A Participant must have participated in the Plan for at
least 12-consecutive months prior to making the request.
(B) A Participant can not have any other loan outstanding at
the time of such request.
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(C) The loan must be in an amount of not less than $1,000
and loans in excess of $1,000 shall be made in multiples of $250.
(D) Loans shall only be available from the Participant's
Accounts invested in the fixed income investment fund.
(E) The maximum amount that a Participant may borrow, when
aggregated with all outstanding loans of the Participant from the Plan and all
other plans qualified under section 401(a) of the Code which are sponsored by
the Employer or a Related Company, shall not exceed the lesser of:
(i) the amount set forth in the following table:
Vested Balance in
Participant's Accounts: Maximum Loan Limit:
---------------------- -------------------
$0 to $11,111 90% of vested Account balances
$11,112 to $20,000 $10,000
$20,001 to $100,000 50% of vested Account balances
$100,001 or more $50,000
(ii) $50,000 reduced by the excess, if any, of (I) the
highest outstanding loan balance during the 12-consecutive month period ending
on the day before the date on which a new loan is made, over (II) the
----
outstanding loan balance on the date of the new loan.
(F) The loan shall bear interest at a rate equal to the
interest rate in effect in the fixed income investment fund at the time such
loan is made; provided, however, that such interest rate shall not exceed the
maximum interest rate permitted by law.
(G) The loan shall be adequately secured as provided in
Subsection (a) (4)
(H) All loans shall be repaid in substantially equal monthly
or quarterly installments over the
-35-
term of the loan through payroll deductions or in such other manner as the Plan
Administrator may determine. A Participant may repay the outstanding balance of
any loan in one lump sum at any time by notifying the Plan Administrator of his
intent to do so and by forwarding to the Plan Administrator payment in full of
the then outstanding balance, plus interest accrued through the date of payment.
(I) The loan shall be documented by such notes, evidences of
indebtedness, and other instruments executed by the Participant which the Plan
Administrator, in its discretion, requires. Each such note shall specify the
period of repayment, which shall be 12, 24, 36, 48, 54 or 60 months from the
date on which the loan is distributed; provided, however, that if the purpose of
the loan is to acquire any dwelling unit which is used within a reasonable
period of time as the principle residence of the Participant, the period of
repayment may be as long as, but shall not exceed, 180 months.
(3) Each Participant who makes a written request for a loan must
execute and deliver to the Plan Administrator, within the 90-day period ending
on the date the loan is made, a written consent acknowledging that the
Participant and his Spouse, if any, are consenting to the loan and agreeing that
a default on the loan may reduce the amount of any benefits payable to the
Participant and his Spouse, if any, under the Plan. Such consent must be
witnessed by a Plan representative or a notary public.
(4) Each loan from the Plan shall be secured by the borrowing
Participant's vested interest in his Accounts in the Plan, which security shall
give the Trustee a first lien in such interest to the extent of the entire
outstanding amount of such loan, unpaid interest thereon, and all costs of
collection. The Plan Administrator may require the Participant to provide
additional collateral as security for the loan. If the Participant's employment
terminates, the Plan terminates, the Participant dies, or the Participant files
for relief under the United States Bankruptcy Code, before the Participant has
fully repaid the loan, any balance due on the loan shall immediately become due
and payable and shall be repaid out of the Participant's vested interest in his
Accounts, and such Accounts shall be reduced accordingly. A Participant's
401(k) Account may be used as security for a loan, but, notwithstanding anything
in this Plan to the contrary, in the event of default, no recourse shall be
available against such a 401(k) Account until the 401(k) Account is otherwise
distributable.
(5) In addition to the limitations contained in Subsection (a)
(2), the Plan Administrator may further limit
-36-
the amount of a loan made to any Participant in order to maintain a reserve
chargeable against the Participant's vested interest in his Accounts for income
taxes which may have to be withheld by the Trustee if the loan becomes a deemed
distribution to the Participant. Any such taxes required to be withheld by the
Trustee, whether or not such a reserve has been created, shall be charged to and
shall reduce the Participant's vested interest in his Accounts to the extent
possible, and any excess taxes shall be treated as an administrative expense of
the Plan which shall be reimbursed by the Participant.
(6) Loans may be processed at any time during the Plan Year, but
not less frequently than the last day of each quarter of the Plan Year.
(7) Loans shall be earmarked investments of the Participant's
Accounts pursuant to the provisions of Section 6.3.
(b) (1) Effective October 18, 1989, the Trustee is authorized to
establish a program under which assets of the Plan may be loaned to certain
Participants and beneficiaries of deceased Participants. This loan program
shall be administered by the Plan Administrator in accordance with the
provisions of this Section and in accordance with any related documents
describing procedures to be followed in the administration of the loan program
which have been made a part of the Plan.
(2) The Trustee shall not be liable for any act or omission of
the Plan Administrator in its administration of the loan program except to the
extent set forth in section 405 of ERISA.
(3) Vested Participants and beneficiaries of deceased
participants who are parties in interest," as that term is defined in section
3(14) of ERISA, shall be eligible to apply for loans from the Plan. However, no
loans shall be available to either (A) a more than five percent (5%) shareholder
in a Subchapter S corporation or (B) an Owner-Employee or a family member of an
Owner-Employee. An individual who is eligible to apply for a loan from the Plan
shall hereinafter be called a "Borrower."
(4) A pooled loan account may be established in accordance with
Section 10.8.
(5) A Borrower who wishes to borrow money from the Plan shall
file a written loan request with the Plan Administrator which request shall
specify:
-37-
(A) the amount of the loan being requested, which shall not
be less than the amount specified in Subsection (b) (7) (B);
(B) the intended use of the loan proceeds;
(C) the intended security for the loan;
and
(D) the intended repayment period, which shall be a period
authorized under Subsection (b) (7) (I).
(6) The Plan Administrator, in its sole discretion, shall approve or
deny the loan, and the Plan Administrator shall exercise its discretion in a
uniform and non-discriminatory manner taking into consideration only those
factors which would be considered in a normal commercial setting by an entity in
the business of making similar types of loans. If a request for a loan is
denied, the Borrower may appeal the denial in the manner described in Section
10.6.
(7) In ruling on a loan application, the Plan Administrator shall not
consider the Borrower's race, color, religion, sex, age, or national origin, but
may consider his creditworthiness, collateral, and financial need. No loan
shall be granted unless the following requirements are satisfied:
(A) A Borrower can not have any other loan outstanding at
the time of such request.
(B) The loan must be in an amount of not less than $1,000
and loans in excess of $1,000 shall be made in multiples of $250.
(C) Loans shall only be available from the Borrower's
Accounts invested in the fixed income investment fund.
(D) The value of a Borrower's outstanding loans under this
Plan and all other plans qualified under section 401(a) of the Code which are
sponsored by the Employer and Related Companies shall not exceed the lesser of:
(i) $50,000 reduced by the excess of (I) the highest
outstanding loan balance during the 12 months before a new loan is made over
(II) the outstanding loan balance on the date of the new loan, or
-38-
(ii) fifty percent (50%) of the value of the Borrower's vested
interest in the Plan, determined as of the Valuation Date on which the loan
proceeds are paid to the Borrower.
(E) If a request for a loan is approved, the loan proceeds shall be
paid to the Borrower as of the Valuation Date coincident with or immediately
following the date on which the loan is approved. Any fees or charges
associated with the processing of the loan shall be paid by the Borrower.
(F) The rate of interest to be charged on a given loan shall be
determined when that loan is approved by the Plan Administrator, and shall be a
rate selected by the Plan Administrator which the Plan Administrator deems to be
commensurate with the interest rates being charged at that time by financial
institutions which are in the business of making similar types of loans.
(G) The loan shall be adequately secured as provided in
Subsection (b) (9)
(H) All loans shall be repaid in substantially equal monthly or
quarterly installments over the term of the loan through payroll deductions or
in such other manner as the Plan Administrator may determine. A Participant may
repay without penalty the outstanding balance of any loan in one lump sum at any
time by notifying the Plan Administrator of his intent to do so and by
forwarding to the Plan Administrator payment in full of the then outstanding
balance, plus interest accrued through the date of payment.
(I) The loan shall be documented by such notes, evidences of
indebtedness, and other instruments executed by the Participant which the Plan
Administrator, in its discretion, requires. Each such note shall specify the
period of repayment, which shall be 12, 24, 36, 48, 54 or 60 months from the
date on which the loan is distributed; provided, however, that if the purpose of
the loan is to acquire any dwelling unit which is used within a reasonable
period of time as the principle residence of the Participant, the period of
repayment may be as long as, but shall not exceed, 180 months.
(8) Each Participant who makes a written request for a loan must
execute and deliver to the Plan Administrator, within the 90-day period ending
on the date the loan is made, a written consent acknowledging that the
Participant and his Spouse, if any, are consenting to the loan and agreeing that
a default on the loan may reduce the amount of
-39-
any benefits payable to the Participant and his Spouse, if any, under the Plane
Such consent must be witnessed by a Plan representative or a notary public.
(9) Security for a loan granted pursuant to this Section must be at
least equal to the proceeds of the loan. Not more than fifty percent (50%) of
the Borrower's vested interest in the Plan, valued as of the Valuation Date on
which the loan proceeds are paid to the Borrower, may be used as security for a
loan granted pursuant to this Section, which security shall give the Trustee a
first lien in such interest to the extent of the entire outstanding amount of
such loan, unpaid interest thereon, and all costs of collection. To the extent
that the Plan Administrator determines that additional security is required, the
additional security shall consist of such collateral as the Plan Administrator
and the Borrower mutually agree upon. The value and liquidity of any additional
security shall be such that it may reasonably be anticipated that, in the event
of default, the Plan will not lose principal and interest. If the Participant's
employment terminates, the Plan terminates the Participant dies, or the
Participant files for relief under the United States Bankruptcy Code, before the
Participant has fully repaid the loan, any balance due on the loan shall
immediately become due and payable and shall be repaid out of the Participant's
vested interest in his Accounts, and such Accounts shall be reduced accordingly.
A Participant's 401(k) Account may be used as security for a loan, but,
notwithstanding anything in this Plan to the contrary, in the event of default,
no recourse shall be available against such a 401(k) Account until the 401(k)
Account is otherwise distributable.
(10) In addition to the limitations contained in Subsection (b) (7),
the Plan Administrator may further limit the amount of a loan made to any
Participant in order to maintain a reserve chargeable against the Participant's
vested interest in his Accounts for income taxes which may have to be withheld
by the Trustee if the loan becomes a deemed distribution to the Participant.
Any such taxes required to be withheld by the Trustee, whether or not such a
reserve has been created, shall be charged to and shall reduce the Participant's
vested interest in his Accounts to the extent possible, and any excess taxes
shall be treated as an administrative expense of the Plan which shall be
reimbursed by the Participant.
(11) Loans may be processed at any time during the Plan Year, but not
less frequently than the last day of each quarter of the Plan Year.
-40-
(12) Loans shall be earmarked investments of the Participant's
Accounts pursuant to the provisions of Section 6.3.
(13) In addition to the limitations contained in this Subsection (b),
the Plan Administrator may further limit the amount of a loan made to any
Participant in order to maintain a reserve chargeable against the Participant's
vested interest in his Accounts for income taxes which may have to be withheld
by the Trustee if the loan becomes a deemed distribution to the Participant.
Any such taxes required to be withheld by the Trustee, whether or not such a
reserve has been created, shall be charged to and shall reduce the Participant's
vested interest in his Accounts and shall reduce the Participant's vested
interest in his Accounts to the extent Possible, and any excess taxes shall be
treated as an administrative expense of the Plan which shall be reimbursed by
the Participant.
(14) When the Plan Administrator forecloses on a Borrower's security,
it shall first reduce that Borrower's vested interest in the Plan by the lesser
of (A) the full amount of the unpaid balance of the loan, plus accrued interest
(determined as of the date of foreclosure), or (B) the entire portion of the
Borrower's vested interest in the Plan which is security for the loan.
(15) The Plan Administrator shall not use Matching or Basic
Contributions which were allocated to the Borrower's Account(s) less than 24
months prior to the date of foreclosure to reduce that Borrower's indebtedness
unless, as of the date of foreclosure, the Borrower has retired or terminated
his employment with the Company.
(16) When the full amount of the unpaid balance of the loan, plus
accrued interest, has been restored to the Plan, any portion of the Borrower's
security which remains shall be released and shall no longer be security for any
loan.
(17) Foreclosing on a Borrower's security shall not operate as a
waiver of the rights of the Plan Administrator, the Company, or the Plan to
pursue additional means of preventing loss to the Plan in the event of default
on a loan.
(18) If a Borrower defaults on a loan and the Plan Administrator is
entitled to foreclose on the Borrower's security, the unpaid balance of the
loan, plus accrued interest, shall be deemed to be immediately distributed to
the Borrower.
-41-
ARTICLE V
---------
ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES
----------------------------------------------------
5.1 Allocation. Participants for a Plan Year shall share in both the
----------
Employer's Basic and/or Matching Contributions and forfeitures for the Plan Year
in the amounts and in accordance with the methods specified in the Joinder
Agreement. Deferrals shall be allocated in accordance with Section 4.2(b).
5.2 Maximum Allocation. The provisions of this Section shall be construed
------------------
so as to comply with section 415 of the Code.
(a) Notwithstanding anything in this Plan to the contrary, a
Participant's Annual Additions shall not exceed the lesser of twenty-five
percent (25%) of such Participant's Limitation Compensation for the Limitation
Year or $30,000, or such larger amount equal to 1/4 of the defined benefit
dollar limitation as adjusted for cost-of-living increases pursuant to Code
sections 415(c)(l), 4l5(d)(l) and 4l5(d)(3).
For purposes of the $30,000 limitation in this Subsection, there shall be
treated as Employer Contributions with respect to a Participant's Accounts (1)
any amount attributable to post-retirement medical benefits and allocated for
Limitation Years beginning after December 31, 1985 to an account established for
such Participant pursuant to section 419A(d) (1) of the Code in a welfare
benefit fund, as defined in section 419(e) of the Code, by the Employer or a
Related Company and (2) any amounts allocated for Limitation Years beginning
after March 31, 1984 to such Participant's individual medical benefit account
established pursuant to section 415(1) (2) of the Code under a defined pension
or annuity plan sponsored by the Employer or a Related Company.
(b) If the amount otherwise allocable to the Accounts of a Participant
would exceed the amount described in Subsection (a) as a result of a reasonable
error in estimating the Participant's Limitation Compensation or the allocation
of forfeitures, if any, the Recordkeeper, at the direction of the Plan
Administrator, shall adjust the Participant's Accounts in accordance with the
provisions of Subsection (c).
(c) The excess amount determined under Subsection (b) that is
attributable to Basic and/or Matching Contributions, shall be held in a suspense
account by the Trustee until the following Plan Year (or succeeding Plan Years),
at which time it shall be used to reduce the Employer's Basic and/or Matching
-42-
Contributions to the Plan in such Plan Year. Amounts held in the suspense
account shall not be permitted to share in investment gains and losses of the
Trust Fund. Amounts attributable to the Participant's Deferrals shall be
treated as after-tax contributions and shall be returned to the Participant with
interest.
(d) If in any Limitation Year a Participant in this Plan is also a
participant in one or more defined benefit plans maintained by the Employer or
any Related Company, the annual benefit referred to in Subsection (d) (1) shall
be reduced, if necessary, so that the sum of the fractions described in
Subsections (d) (1) and (d) (2) does not exceed 1.0 for such Limitation Year.
(1) Defined Benefit Fraction - a fraction, the numerator of
------------------------
which is the Participant's protected annual benefit under all defined benefit
pension plans sponsored by the Employer or a Related Company in which he has
participated, determined as of the close of the limitation years of such plans,
and the denominator of which is the lesser of:
(A) 1.25 x $90,000 (as adjusted to reflect cost-of-living
increases) or
(B) one hundred forty percent (140%) of the Participant's
highest average Limitation Compensation for the three consecutive calendar years
which result in the highest such average. For the purpose of this Subsection,
"projected annual benefit" shall mean the annual benefit to which a Participant
would be entitled under the terms of a defined benefit plan if he had continued
employment until his normal retirement date under such plan and if his
Limitation Compensation for the purpose of such plan had continued at the same
rate. For these purposes, it may be assumed that a Participant is a full-time
Employee during such period if he is currently a full-time Employee.
(2) Defined Contribution Fraction - a fraction, the numerator of which
-----------------------------
is the sum of the annual additions to the Participant's accounts under all
defined contribution plans sponsored by the Employer or any Related Company for
all limitation year, and the denominator of which is the sum of the lesser of
the following amounts, determined for each of such limitation years and for each
prior limitation year of service with the Employer or Related Company: (A) 1.25
x $30,000 or (B) thirty-five percent (35%) of
-43-
the Participant's Limitation Compensation for such limitation year.
(e) (1) The dollar limitations described in Subsections (a) and (d)
shall be adjusted in accordance with Regulations promulgated by the Secretary of
the Treasury prescribing the method and amount of such adjustments.
(2) The dollar limitations described in Subsections (a) and (d)
shall not reduce the Annual Additions to the Accounts of any Participant under
the Plan prior to the Effective Date using the applicable maximum dollar
limitations then in effect under section 415 of the Code.
(f) (l) If the Plan was in existence on July 1, 1982, the Plan
Administrator may elect to apply Subsection (d) (2) with respect to any Plan
Year ending after December 31, 1982 by calculating the denominator under
Subsection (d) (2) using an alternate amount for all Plan Years ending before
January 1, 1983. The alternate amount shall be equal to the amount determined
for the denominator under Subsection (d) (2) as in effect for the Plan Year
ending in 1982 multiplied by the "transition fraction."
(2) The "transition fraction" shall be a fraction determined as
follows:
(A) the numerator shall consist of the lesser of: (i)
$51,875 or (ii) thirty-five percent (35%) of the Participant's Limitation
Compensation for the Plan Year ending in 1981; and
(B) the denominator shall consist of the lesser of: (i)
$41,500 or (ii) twenty-five percent (25%) of the Participant's Limitation
Compensation for the Plan Year ending in 1981.
(g) The dollar limitations described in this Section shall not reduce
any benefit which was accrued by a Participant under the Plan prior to the first
day of its Limitation Year beginning in 1987, using the applicable maximum
dollar limitations then in effect; provided, however, that this Subsection (g)
shall not apply to any Participant unless he was a Participant in the Plan on
the first day of its Limitation Year beginning in 1987. For the purpose of this
Subsection (g), no change in the Plan after May 5, 1986 shall be taken into
account.
(h) (1) The Plan Administrator may elect to apply Subsection (d) (2)
with respect to any Limitation Year ending
-44-
after December 31, 1986 by adjusting the numerator under Subsection (d) (2) by
using an alternate amount for all Limitation Years beginning on or before
December 31, 1986. The adjustment is to subtract permanently from the numerator
or the defined contribution fraction an amount equal to the product of (A) times
(B) where:
(A) Is the sum of the defined contribution fraction and
the defined benefit fraction as of the "determination date", minus 1.0, and
(B) is the denominator of the defined contribution
fraction as of the "determination date."
(2) For purposes of (1) above, the "determination date'" is the last
day of the Plan Year beginning in 1986. In addition, the defined benefit
fraction and the defined contribution fraction are computed in accordance with
the limitations set forth in Subsections (a) and (b), taking into account the
modifications of Subsection (c).
(3) The adjustment described in this Subsection may be made only if
(A) any accruals in excess of the limits set forth in Subsections (a) and (d)
(as modified by Subsection (c)) are reduced and (B) both the defined
contribution plan in question and this Plan were in existence on May 6, 1986.
Any changes in the terms and conditions of the Plan made after May 5, 1986 may
not be recognized in making this adjustment to the defined contribution
fraction.
-45-
ARTICLE VI
----------
ALLOCATION OF TRUST FUND EARNINGS
---------------------------------
6.1 Frequency and Method. As of each Valuation Date, the recordkeeper
--------------------
shall allocate the gains and losses of the Trust Fund (and any suspense
accounts) since the prior Valuation Date among the Participants' Accounts by
adjusting the stated value of each Account to reflect the actual value of such
Account as of the current Valuation Date, in accordance with the provisions of
this Article and Section 10.8(c).
6.2 Valuation of Trust Fund.
-----------------------
(a) As of each Valuation Date, the Recordkeeper shall value the entire
Trust Fund consisting of its separate investment funds. Earmarked investments
described in this Article shall not be taken into account in valuing the Trust
Fund.
(b) The Recordkeeper shall determine the fair market-value of Trust
Fund assets in compliance with this Section. The fair market value of each
investment fund shall be the value as established and reported by the manager of
such investment fund.
6.3 Special Rules for Earmarked Investments As of each Valuation Date,
---------------------------------------
the Recordkeeper shall determine the fair market value of earmarked investments.
All gains and losses on investments earmarked to a Participant's Account shall
be credited or debited to that Account. Investments earmarked to a
Participant's Account shall be:
(a) loans to the Participant; and
(b) individual life insurance policies purchased on behalf of the
Participant.
6.4 Account Values. The value of an Account for all purposes of this Plan
--------------
shall be its value as of the prior Valuation Date, adjusted on a pro rata basis
on the value of the Account for gains or losses of the Trust Fund, for the
period between the prior Valuation Date and the business day immediately
preceding the date in question. Earmarked investments credited or debited to an
Account under Section 6.3 shall be valued at their fair market value, which
shall be the outstanding balance of principal and interest of each loan and the
cash surrender
-46-
value of any policies of insurance owned in such Account on the business day
immediately preceding the date in question.
-47-
ARTICLE VII
-----------
VESTING: BENEFITS ON TERMINATION OF EMPLOYMENT
-----------------------------------------------
7.1 Vesting of Accounts. A Participant shall be fully vested in his
-------------------
401(k), Rollover, Qualified Matching Contribution, and Qualified Nonelective
Contribution Accounts at all times. Except as otherwise provided in this Plan, a
Participant's Employer Contribution Account shall be vested as specified in the
Joinder Agreement.
7.2 Additional Vesting of Accounts. A Participant's Employer Contribution
------------------------------
Account which is not otherwise fully vested shall become fully vested upon the
earliest to occur of:
(a) the date on which the Participant attains his Normal Retirement
Date while an Employee of the Employer or a Related Company,
(b) the date of the Participants death while an Employee of the
Employer or a Related Company, and
(c) the date on which the Participant suffers a Disability while an
Employee of the Employer or a Related Company.
7.3 Service for Vesting.
-------------------
(a) For the purposes of determining a Participant's vesting service,
an employee shall earn a Year of Service for each Plan Year (including years
before the Effective Date) during which he is credited with 1,000 or more Hours
of Service.
(b) Notwithstanding any provisions of this Plan to the contrary, an
employee shall not receive credit for purposes of this Article for service in
any Plan Year ending prior to the employees 18th birthday.
(c) Notwithstanding any provisions of this Plan to the contrary, an
employee shall not receive credit for purposes of this Article for service prior
to the date on which ERISA and the Code, as amended by ERISA, became applicable
to the Plan, if such service would have been disregarded under the rules of the
Plan with regard to Breaks in Service as in effect on the applicable date.
-48-
7.4 Treatment of Terminated Vested Participant.
------------------------------------------
(a) In the case of a Participant whose employment with the Employer
and all Related Companies has terminated, other than by Retirement, death, or
Disability, and who has a vested interest in his Accounts which is less than or
equal to $3,500, the vested benefit of such Participant, calculated in
accordance with Article VI, shall be paid to or applied for the benefit of such
Participant in a single sum as soon as is administratively practicable after the
Valuation Date immediately following the date on which such Participant's
termination of employment occurs.
(b) In the case of a Participant whose employment with the Employer
and all Related Companies has terminated, other than by Retirement, death, or
Disability, and who has a vested interest in his Accounts which exceeds $3,500,
or at the time of any prior distribution has exceeded $3,500, the vested benefit
of such Participant, calculated in accordance with Article VI, shall be paid to
or applied for the benefit of such Participant at the earliest date provided
under Article VIII as if the Participant had continued employment. Such benefit
shall be paid in a form provided under Article VIII. The Trustee shall,
however, if directed by the Plan Administrator, make a distribution to the
Participant, in a form determined under Section 8.2, earlier than the date
described above if the Participant and his Spouse, if any, requests the earlier
distribution in writing. Such request must acknowledge its own effect and must
be witnessed by a Plan representative or a notary public. The distribution
shall be made or shall commence as soon as administratively practicable after
the Valuation Date immediately following the Participant's election of an early
distribution.
7.5 Forfeitures. If a Participant terminates his employment with the
-----------
Employer and he is not reemployed by the Employer before the end of the Plan
Year in which occurs the earlier of (a) the date on which he receives a
distribution under this Article or (b) the date on which he incurs his fifth
consecutive one-year Break in Service, his Employer Contribution Account shall
be closed as of the Valuation Date on or immediately succeeding such date, and
the non-vested amount held therein shall be forfeited and shall be applied in
accordance with Item 20 of the Joinder Agreement.
7.6 Restoration of Forfeited Amounts Upon Reemployment. If a terminated
--------------------------------------------------
vested Participant has received a distribution pursuant to the provisions of
this Article VII and is reemployed by the Employer before the date on which he
incurs five consecutive one-year Breaks in Service, the amount forfeited, if
any, from his previous Employer Contribution
-49-
Account will be restored to his new Employer Contribution Account only if he
repays the full amount of the distribution which he received on his prior
termination of employment. Such amount, which shall be credited to his new
Employer Contribution Account, must be repaid prior to the earlier of (a) the
end of the Participant's fifth consecutive one-year Break in Service, or (b) the
fifth anniversary of his reemployment date with the Employer. No portion of a
repayment shall be subject to the ADP Test or ACP Test.
7.7 Restoration of Service on Reemployment. A Participant who terminates
--------------------------------------
his employment with the Employer and who incurs a Break in Service shall have
his pre-break and post- break service aggregated hereunder in the event he is
subsequently reemployed by the Employer if:
(a) (1) he has a vested interest and (2) he incurs a Break in
Service; or
(b) (1) he does not have a vested interest, (2) he first incurs a
Break in Service after the first day of the Plan Year beginning in 1985, and (3)
the number of his consecutive Breaks in Service does not exceed the greater of
(A) the number of Years of Service he had accrued prior to his Break in Service,
or (B) five; or
(c) (1) he does not have a vested interest, (2) he first incurs a
Break in Service prior to the first day of the Plan Year beginning in 1985, (3)
as of the last day of the Plan Year beginning in 1984, the number of his
consecutive one-year Breaks in Service is less than the number of Years of
Service he had accrued prior to his Break in Service, (4) he is reemployed on or
after the first day of the Plan Year beginning in 1985, and (5) as of the date
of his reemployment, the number of his consecutive Breaks in Service is less
than the greater of (A) the number of Years of Service he had accrued prior to
his Breaks in Service, or (B) five; or
(d) (1) he does not have a vested interest, (2) he first incurs a
Break in Service prior to the first day of the Plan Year beginning in 1985, (3)
he is reemployed before the first day of the Plan Year beginning in 1985, and
(4) as of the date of his reemployment, the number of his consecutive Breaks in
Service is less than the number of Years of Service he had accrued prior to his
Break in Service.
In the case of a Participant who terminates his employment with the
Employer and who is rehired by the Employer prior to incurring a Break in
Service, such Participant shall
-50-
have all of his service aggregated hereunder upon his reemployment with the
Employer.
In any other case, a reemployed Participant shall receive no credit for his
pre-break Service.
7.8 Effect of Post-Break Years of Service For Plan Years beginning after
-------------------------------------
December 31, 1984,
(a) if the number of a Participant's consecutive Breaks in Service is
equal to or greater than five, the Participant's post-break Years of Service
shall not increase the vesting percentage, if any, in that part of his Employer
Contribution Account accrued prior to his Break in Service; or
(b) if the number of a Participant's consecutive one-year Breaks in
Service is less than five, the Participant's post-break Years of Service shall
increase the vesting percentage in that part of his Employer Contribution
Account accrued prior to his Break in Service, including amounts restored on the
repayment of prior distributions under Section 7.6.
For Plan Years beginning before January 1, 1985, the Participant's post-
break Years of Service shall not increase the vesting percentage, if any, in
that part of his Employer Contribution Account accrued prior to his one-year
Break in Service.
7.9 Amendments to Vesting Schedule. If the vesting schedule of this Plan
------------------------------
is amended or if the Plan is amended in any way which directly or indirectly
affects the computation of a Participant's vested percentage, the rate of
vesting for any Participant shall not be diminished because of such amendment.
In addition, if the vesting schedule of this Plan is amended, each Participant
who is credited with not less than three Years of Service as described in
Section 7.3 of the Plan shall be permitted to elect, within a reasonable period
after the adoption of such amended vesting schedule, to have his nonforfeitable
percentage computed under the Plan without regard to such amendment. The period
during which the election may be made shall commence with the date the amended
vesting schedule is adopted and shall end on the later of:
(a) 60 day. after the amended vesting schedule is adopted;
(b) 60 days after the amended vesting schedule becomes effective; or
-51-
(c) 60 days after the Participant is given written notice of the
amended vesting schedule by the Employer.
7.10 Participation after Attaining Normal Retirement. A Participant shall
-----------------------------------------------
continue to participate in the Plan on or after attaining his Normal Retirement
Date.
-52-
ARTICLE VIII
------------
BENEFITS ON RETIREMENT OR DISABILITY
------------------------------------
8.1 Distribution of Accounts.
------------------------
A Participant's Accounts shall be distributed to him in the event of
his Retirement or in the event of his Disability in the manner, in the amount,
and at the time provided in this Article. If the Participant's Accounts are
invested in life insurance, the special distribution rules and option in Section
10.9 shall also apply.
8.2 Modes of Distribution.
---------------------
(a) A Participant may elect one of the following forms of distribution
of Retirement or Disability benefits hereunder:
(1) a single sum payment;
(2) a single life annuity with substantially equal monthly
installments payable to the Participant for his lifetime;
(3) a single life or joint and survivor annuity with a minimum
guaranteed number of monthly benefits payable to the Participant and his
designated beneficiary; or
(4) substantially equal, annual installments payable over a
period not to exceed the life expectancy or joint life expectancies of the
Participant or of the Participant and his designated beneficiary, adjusted
periodically for gains and losses.
(b) If an election is not made under Subsection (a) and spousal
consent is not received under Subsection (e), a married Participant shall
receive his Accounts in the form of a Qualified Joint and Survivor Annuity, and
an unmarried Participant shall receive his Accounts in the form of a single life
annuity.
(c) If distribution at any time under this Section is made in a form
other than a single sum, it must be distributed in installments not extending
beyond the life or life expectancy of the Participant or the joint lives or
joint life expectancies of the Participant and his designated beneficiary, as
determined in accordance with the provisions of section
-53-
401(a)(9) of the Code and the Regulation promulgated by the Secretary of the
Treasury, including the incidental benefit requirements in proposed Treas. Reg.
(S)1.401(a)(9)-2. Life expectancies shall be determined under the tables set
forth in Treas. Reg. (S)l.72-9 and shall not be recalculated annually if
benefits are provided in a form other than a life annuity.
(d) No distribution shall be made under Section 8.2(a) or (b) which is
inconsistent with the provisions of section 401(a)(9) of the Code.
(e) If a married Participant elects to waive the Qualified Joint and
Survivor Annuity, the Participant's Spouse (1) must consent in writing to the
form of benefit chosen, and (2) if applicable~ must consent in writing to the
specific beneficiary designated by the Participant. The Participant may not
change the form of benefit and/or designated beneficiary without the consent of
his Spouse, unless the original consent of the Spouse expressly permits the
Participant to make changes without further consent of the Spouse. All such
consents must acknowledge their own effect and must be witnessed by a Plan
representative or a notary public. A married Participant is not required to
comply with the foregoing if he establishes to the satisfaction of a Plan
representative that his Spouse cannot be located. The election to waive the
Qualified Joint and Survivor Annuity made by the Participant and consented to by
his Spouse shall be made in the 90-day period ending on the Annuity Starting
Date. The Participant may revoke the waiver of the Qualified Joint and Survivor
Annuity in writing prior to the Annuity Starting Date without the consent of his
Spouse. Any consent which is given by the Participant's Spouse shall be valid
for such Spouse only, and will not be valid for any other Spouse of the
Participant. The elections described in this Subsection may be made any number
of times prior to the Annuity Starting Date.
(f) In the event of the death of a Participant's Spouse or other
designated beneficiary prior to the Participant's Annuity Starting Date but
after an election of a Qualified Joint and Survivor Annuity has been made
hereunder, the election shall be automatically revoked.
(g) A Participant may elect the mode of payment at any time prior to
the first day of the calendar month for which benefits are first payable to the
Participant. Such election shall be on a form prescribed by the Plan
Administrator.
(h) If the Participant elects to have his benefit paid in installments
or on a deferred basis, the Participant may thereafter elect to change the time
or manner of payment of the unpaid balance within the maximum time limits of
Subsection (g);
-54-
provided however, that reasonable advance written notice of such election is
given by the Participant to the Plan Administrator.
(i) Payment made in installments shall be made in an amount of $100 or
more.
(j) If a contingent or joint annuitant or designated beneficiary is
other than the Participants Spouse, the form of payment elected shall provide
that at least fifty percent (50%) of the benefit is payable to the Participant
over his life, in accordance with the provisions of section 401(a)(9) of the
Code and the Regulations promulgated by the Secretary of the Treasury
thereunder.
(k) With regard to any election to waive the Qualified Joint and
Survivor Annuity form of benefit, the Plan Administrator shall no less that 30
days and no more than 90 days before the Annuity Starting Date provide to the
Participant a written explanation of:
(1) the terms and conditions of the Qualified Joint and Survivor
Annuity;
(2) the Participant's right to make, and the effect of, an
election to waive the Qualified Joint and Survivor Annuity;
(3) the rights of the Participant's Spouse to consent to any
election to waive the Qualified Joint and Survivor Annuity; and
(4) the right of the Participant to revoke such election and the
effect of such revocation.
(l) If a Participant's vested benefit is less than or equal to $3,500,
the Plan Administrator may immediately distribute such benefit without such
Participant's or Spouse's consent. If a Participant's vested benefit is greater
than $3,500, such benefit may not be paid in a single-sum payment without the
consent of the Participant and the Participant's Spouse. In addition, a partial
or total distribution of benefits may not be made after the Annuity Starting
Date, regardless of the Participant's vested benefit, unless the Participant and
the Participant's Spouse consent to such a distribution. Any consent under this
Subsection (1) must acknowledge its own effect and must be witnessed by a Plan
representative or a notary public.
8.3 Timing of Distribution.
----------------------
-55-
(a) A Participant entitled to receive benefits under the Plan shall
commence to receive benefits as Soon as administratively practicable.
(b) (1) Distribution of a Participant's benefits under this Plan
shall be made (or shall commence) by the mandatory commencement date described
in paragraph (2) or (3), whichever is applicable.
(2) Until January 1, 1989, the "mandatory commencement date" for
purposes of paragraph (1) shall be the April 1st that follows the later of:
(A) the end of the calendar year in which the Participant
attains age 70-1/2, or
(B) the end of the calendar year in which the Participant's
employment with the Employer and all Related Companies terminates.
Notwithstanding the foregoing, effective for Plan Years beginning after
December 31, 1984, clause (B) shall not apply in the case of a Participant who
is a five-percent (5%) owner (as defined in section 416(i) (1) (B) of the Code)
at any time during the five-Plan-Year period ending in the calendar year in
which the Participant attains age 70-1/2.
If a Participant becomes a five-percent (5%) owner during any Plan Year
after the end of the five-Plan-Year period described above, distribution of his
benefits under this Plan shall commence not later than the April 1st that
follows the end of the calendar year which includes the last day of the Plan
Year in which the Participant becomes a five-percent (5%) owner.
(3) Beginning on January 1, 1989, the mandatory commencement
date" for purposes of paragraph (1) shall be the April 1st that follows the end
of the calendar year in which the Participant attains age 70-1/2; provided,
however, that in the case of a Participant who attains age 70-1/2 before January
1, 1988 and who is not a five-percent (5%) owner (as defined in section 416(i)
(1) (B) of the Code) at any time during the Plan Year ending during the calendar
year in which he attains age 66-1/2 or any subsequent Plan Year, the "mandatory
commencement date" shall continue to be the date described in paragraph (2).
(c) A Participant shall begin to receive benefits as soon as is
administratively practicable after the Valuation Date following the
Participant's Retirement date or the date on which he suffers a Disability, but
in no event later than 60 days
-56-
after the end of the Plan Year in which he attains his formal Retirement Date
or, if later, his Retirement date; provided, however, that a Participant may
elect that distribution be made or commence at a later date. Such deferred
distribution may be made under any distribution option available under Section
8.2, but distributions must commence no later than the mandatory commencement
date described in subparagraph (b).
(d) This Section shall be construed to comply with the provisions of
section 401(a)(9) of the Code and the regulations thereunder. Such provisions
shall override any distribution options in the Plan which are inconsistent with
section 401(a) (9) of the Code.
(e) Benefits under this Plan shall be paid when a properly written
application is received by the Plan Administrator. In the event that a
Participant fails to apply to the Plan Administrator for his benefits by his
Normal Retirement Date or by the date on which his employment terminates, if
later, the Plan Administrator shall make diligent efforts to locate such
Participant. The Plan Administrator shall be under no obligation to make
payments at any time for the period in which benefits would have been payable if
the Participant had made timely application for his benefits.
(f) If a Participant suffers a Disability prior to his Retirement and
the value of his Accounts exceeds, or at the time of any prior distribution has
ever exceeded, $3,500, his Accounts shall not be paid to him or applied for his
benefit until (1) he and his Spouse, if any, consent in writing to such payment
or application, or (2) he attains what would have been his Normal Retirement
Date, or (3) he dies.
8.4 Distribution of Contracts. If the vested portion of a terminated
-------------------------
Participant's Accounts equals or exceeds the cash surrender value of any
insurance contracts held in such Accounts, the Trustee shall assign, transfer,
and set over to such terminated Participant part or all of the insurance
contracts on his life, provided, however, if directed by the Plan Administrator
at the Participant's request, the Trustee shall borrow or partially withdraw the
cash surrender value of the insurance contracts from the insurer and credit such
amount to the Participant's Accounts. If the value of the terminated
Participant's vested Accounts is less than the cash surrender value of the
insurance contracts, the terminated Participant may either (a) pay to the
Trustee the sum which, when added to the distribution, shall equal the value of
the insurance contracts being assigned or transferred, or (b) authorize the
Trustee to borrow or partially withdraw the cash surrender value of the
-57-
insurance contracts from the insurer and assign the insurance contracts to the
terminated Participant.
-58-
ARTICLE IX
----------
BENEFITS ON DEATH
-----------------
9.1 Designation of Beneficiary. Subject to the provisions of Section 9.4,
--------------------------
each Participant or former Participant may designate, revoke, and redesignate
beneficiaries to whom death benefits are payable. Such actions shall be taken
only in writing on a form provided by the Plan Administrator and shall be
effective only upon delivery to the Plan Administrator.
9.2 Distribution on Death
---------------------
(a) Except as otherwise provided in this Plan, a Participant's
Accounts shall be distributed in the event of death. In addition, and subject
to the rules of Section 10.9 relating to life insurance, on the death or
presumed death of a Participant or former Participant, the life insurance
proceeds paid to the Trustee shall be paid to, or applied for the benefit of,
the Participant or his designated beneficiary. Such payment or application
shall be made in accordance with the provisions of this Article. Any portion of
the death benefit not distributed shall be credited to the Participant's 401(k)
Account and shall be fully allocated to the fixed income investment fund.
(b) In the event an unmarried Participant fails to designate a
beneficiary, or if a Participant is pre-deceased by his designated beneficiary,
the benefits hereunder shall be paid to the administrators or executors or the
Participant's estate.
(c) Members of a class of beneficiaries shall cease to be entitled to
benefits on the Plan Administrator's determination that no members of the class
exist or the Plan Administrator's failure to locate any members of the class
after making reasonable efforts to do so.
(d) The Recordkeeper and Trustee shall be under no obligation to
commence payment on account of a Participant's death until the Plan
Administrator has notified the Recordkeeper, in writing, of the death of such
Participant or former Participant.
9.3 Required Distribution Provisions.
--------------------------------
(a) If a Participant dies prior to the commencement of benefit
payments under the Plan, the death benefit payable hereunder to a beneficiary
other than the
-59-
Participant's Spouse shall be determined as of the Valuation Date on or
immediately preceding the Participant's date or death and payments shall
commence as soon as is administratively practicable after such Valuation Date.
The Participant's entire vested interest shall be distributed within five years
of the Participant's death. The amount payable shall be adjusted in accordance
with the provisions of Section 6.4.
(b) If a Participant dies prior to the Annuity Starting Date, the
death benefit payable hereunder to a beneficiary who is the Participant's Spouse
shall be paid, if the Participant and his Spouse have filed the election
provided in Section 9.4, as of the Valuation Date on or immediately preceding
the Participant's date of death in a form provided in Section 8.2(a), and
payments shall commence as soon as is administratively practicable after such
Valuation Date; provided, however, that the Participant's Spouse can delay
payment of such benefit until any later Valuation Date, but in no event after
the later of (1) the December 31 of the calendar year in which the Participant
would have attained age 70-1/2, or (2) December 31 of the calendar year
following the calendar year in which the Participant dies. The amount payable
shall be adjusted in accordance with the provisions of Section 6.4.
(c) If a Participant dies while receiving installment payments under
this Plan, the remaining payments shall be distributed at least as rapidly as
under the method being used as of the date or the Participant's death; provided,
however, that the Trustee shall, as directed by the Plan Administrator, pay to
the Participant's designated beneficiary as a single sum the present value of
all unpaid future installments provided that the Participant's designated
beneficiary consents to such a distribution. If a Participant dies while
receiving annuity payments under this Plan, the annuity payments will be
continued in the manner previously selected by the Participant prior to the
Annuity Starting Date.
9.4 Preretirement Survivor Annuity
------------------------------
(a) Except as otherwise provided in this Plan, in the event of the
death of a Participant who has a surviving Spouse, the Participant's surviving
Spouse shall receive a Preretirement Survivor Annuity. The benefit shall
commence on the first day of the month selected by the surviving Spouse,
beginning within a reasonable time after the Participant's death and ending not
later than the December 31 of the calendar year in which the Participant would
have attained age 70-1/2, or, if later, the December 31 of the calendar year
following the calendar year in which the Participant died. In the absence of
such an election, benefits under this Section shall commence on
-60-
the first day of the month following the date which would have been the
Participant's Normal Retirement Date. The election shall acknowledge its own
effect and shall be witnessed by a Plan representative or a notary public.
(b) A Participant may elect to waive the Preretirement Survivor
Annuity benefit at any time during the period commencing on the first day of the
Plan Year in which the Participant attains age 35 and ending on the date of the
Participant's death. In the case of a Participant who is separated from
service, the election to waive the Preretirement Survivor Annuity with respect
to benefits accrued before the date of such separation from service shall not
begin later than such date.
(c) A Participant who has a Spouse may elect to waive the
Preretirement Survivor Annuity benefit only if his Spouse (1) consents in
writing (A) not to receive the Preretirement Survivor Annuity, (B) to the form
of benefit chosen and (C) to the specific beneficiary designated by the
Participant, (2) such consent acknowledges its own effect, and (3) such consent
is witnessed by a Plan representative or a notary public. The Participant may
not change the designated beneficiary and/or form of benefit without the consent
of his Spouse; unless the original consent of the Spouse expressly permits the
Participant to make changes without further consent of the Spouse. A
Participant is not required to comply with the foregoing steps if he establishes
to the satisfaction of a Plan representative either that he has no Spouse or
that his Spouse cannot be located. The Participant may revoke the waiver of the
Preretirement Survivor Annuity without his Spouse's consent. The elections
described in Subsections (b) and (C) may be made any number of times prior to
the Participant's death.
(d) The Plan Administrator shall provide to each Participant a written
explanation of:
(1) the terms and conditions of the Preretirement Survivor
Annuity;
(2) the Participant's right to waive the Preretirement Survivor
Annuity and the effect of such waiver;
(3) the rights of the Participant's Spouse with respect to such
waiver; and
(4) the right to revoke a waiver of the Preretirement Survivor
Annuity and the effect of such revocation.
-61-
The Plan Administrator must provide this explanation at the latest of the
following times:
(1) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with 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, if the individual becomes a Participant after the first day of
the Plan Year in which he or she attains age 32;
(3) a reasonable period ending after the date the Plan ceases to
fully Subsidize the cost of such benefit;
(4) a reasonable period after separation from service in the
case of a Participant who separates before attaining age 35; or
(5) a reasonable period ending after such benefit applies to the
Participant.
(e) Notwithstanding any provision in this Plan to the contrary, if the
Participant's vested benefit is less than or equal to $3,500, the Plan
Administrator may immediately distribute such benefit without the consent of the
Participant's surviving Spouse. However, if the Participant's vested benefit
exceeds, or at the time of any prior distribution has exceeded, $3,500, such
benefit may not be paid in a single-sum payment without the consent of the
Participant's surviving Spouse. Such consent must be in writing, must
acknowledge its own effect, and must be witnessed by a Plan representative or a
notary public. In addition, a partial or total distribution of benefits under
this Section may not be made after the Annuity Starting Date, regardless of the
vested benefit to be paid to the Participant's surviving Spouse, without the
consent of the Participant's surviving Spouse.
(f) All distributions made under Article IX shall comply with the
provisions of section 401(a) (9) of the Code and Regulations promulgated by the
Secretary of the Treasury.
-62-
ARTICLE X
---------
ADMINISTRATION OF THE PLAN
--------------------------
10.1 Duties of the Plan Administrator. The Plan Administrator shall be the
--------------------------------
named fiduciary of the Plan and shall be responsible for the general
administration of the Plan. The Plan shall be administered on a
non~discriminatory basis in accordance with its terms. The Plan Administrator
shall have all discretionary powers and duties necessary to fulfill its
responsibilities, including, but not limited to, the following:
(a) to interpret the provisions of the Plan and to determine all
questions relating to the eligibility of employees to participate;
(b) to determine, compute, and certify to the Recordkeeper the method
in which benefits are to be paid to the Participants and their Spouse and
designated beneficiaries;
(c) to authorize all disbursements by the Trustee;
(d) to maintain all records necessary for the administration of the
Plan, including records pertaining to a Participant's designation of a
beneficiary and loans made to Participant, but excluding records maintained by
the Employer and Related Company, the Trustee or the Recordkeeper;
(e) to provide for disclosure of all information and filing or
provision of all reports and statements to Participants, Spouses, beneficiaries,
or governmental bodies as shall be required of the Plan Administrator by the
Code or ERISA or any other applicable law:
(f) to make and publish rules for the administration, regulation, or
application of the Plan;
(g) to administer the claims procedure set forth in Section 10.6;
(h) to delegate any power or duty to any person or entity in
accordance with Section 10.4;
(i) to establish reasonable procedures to determine the qualified
status of domestic relations orders which relate to the Plan, pursuant to the
provisions and requirements of section 414(p) of the Code; and
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(j) to exercise all other powers or duties granted to the Plan
Administrator by other provisions of the Plan or the Trust Agreement.
10.2 Duties of the Recordkeeper. The Recordkeeper shall be responsible for
--------------------------
those duties assigned to it by the Plan Administrator, including the valuation
of the Trust Fund and accounting of loans made to Participants, and the
Recordkeeper shall have all powers and duties necessary to fulfill its
responsibilities.
10.3 Investments and Funding Policy.
------------------------------
(a) The Trustee shall have the responsibilities to manage the
investments of the Trust Fund in accordance with the provisions of the Trust
Agreement, except to the extent such responsibility is delegated to other
persons pursuant to the Trust Agreement. Subject to the provisions of the
Joinder Agreement and applicable Plan rules, each Participant shall have the
right to select among the investments chosen by the Trustee in accordance with
the funding policy established by the Employer.
(b) The Employer shall establish a funding policy. The Employer shall
advise the Trustee and any other person to whom investment management
responsibility has been delegated of such funding policy and all other matters,
if any, as may be pertinent to their duties.
10.4 Delegation of Administrative Responsibility. The Plan Administrator
-------------------------------------------
may delegate all or any portion of its administrative responsibilities with
respect to the Plan to any other person or persons. Investment responsibilities
may be delegated only to the extent permitted under the Trust Agreement.
10.5 Compensation. Indemnity and Liability.
--------------------------------------
(a) Any fiduciary or delegate who is an Employee of the Employer shall
serve without compensation for services rendered to the Plan. Any person
responsible for Plan assets shall be bonded as required by applicable law,
provided individuals eligible to participate in the Plan include individuals
other than self-employed individuals or the sole shareholder, if applicable, of
the Employer or the Spouse of such self-employed individual or shareholder. The
Employer shall furnish the Plan Administrator and/or Recordkeeper and any such
delegate with all clerical or other assistance necessary in the performance of
their duties. The Plan Administrator is authorized to employ such legal
counsel, including legal counsel
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of the Employer, and advisors as it may deem advisable to assist in the
performance of its duties hereunder.
(b) All costs of administering the Plan, including the cost of the
bond and legal services described in Subsection (a), shall be paid, in the
discretion of the Employer, either out of Plan assets or by the Employer.
Expenses attributable to investments earmarked to a Participant's Account under
Article VII shall be charged to such Participant's Account unless otherwise paid
by the Employer. Costs associated with the distribution of benefits shall be
paid in the manner selected in Item 28 of the Joinder Agreement.
(c) To the extent permitted by applicable law, the Employer shall
indemnify and hold harmless the Plan Administrator, the Recordkeeper, the
Trustee and any delegate appointed pursuant to Section 10.4 against any and all
expenses, liabilities, and claims, including legal fees incurred to defend
against such liabilities and claims, arising out of their discharge, in good
faith, of responsibilities under or incident to the Plan. Expenses and
liabilities arising out of willful misconduct shall not be indemnified by the
Employer, Trustee and/or the Plan or Trust Fund. This indemnity shall not
preclude such further indemnities as may be available under insurance purchased
by the Employer or provided by the Employer; provided, however, that such
indemnities are permitted under applicable law. Payment with respect to any
indemnity and payment of expenses or fees shall be made only from assets of the
Employer and shall not be made directly or indirectly from the Trust Fund.
10.6 Claims Procedure.
----------------
(a) A claim by a Participant, former Participant, Spouse, beneficiary,
or any other person shall be presented to the Plan Administrator in writing
within the maximum time permitted by law or under Regulations promulgated by the
Secretary of Labor or his delegate.
(b) The Plan Administrator shall, within a reasonable time, consider
the claim and shall issue its determination thereon in writing.
(c) If the claim is granted, the appropriate distribution or payment
shall be made from the Trust Fund as soon as is administratively practicable
following such grant.
(d) If the claim is wholly or partially denied, the Plan Administrator
shall, within 90 days provide the claimant with written notice of such denial,
setting forth, in a manner calculated to be understood by the claimant:
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(1) the specific reason or reasons for such denial;
(2) specific references to pertinent Plan provisions on which the
denial is based,
(3) a description of any additional material or Information
necessary for the claimant to perfect the claim~ and an explanation of why such
material or information is necessary, and
(4) an explanation of the Plan's claim review procedure.
The 90-day period described in the preceding sentence may be extended in special
circumstances for up to an additional 90 days if the claimant is given written
notice of the extension that specifies the reason(s) for the extension.
(e) Each claimant shall have the opportunity to appeal the Plan
Administrator's denial of a claim to the Employer in writing for a full and fair
review. The claimant or his duly authorized representative:
(1) may request a review by filing a written application with the
Employer,
(2) may review pertinent documents, and
(3) may submit issues and comments in writing.
(f) The Plan Administrator may establish such time limits within which
a claimant may request review of a denied claim as are reasonable in relation to
the nature of the benefit which is the subject of the claim and to other
attendant circumstances, but which shall not be less than 60 days after receipt
by the claimant of written notice of denial of his claim.
(g) The decision by the Plan Administrator on review of a claim shall
be made not later than 60 days after its receipt of the request for review,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered as soon as practicable, but in no event
later than 120 days after receipt of the request for review. Written notice of
the extension must be sent to the claimant prior to the commencement of the
extension.
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(h) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant with specific references to the pertinent Plan
provisions on which the decision is based.
(i) To the extent permitted by law, the decision of the Plan
Administrator, if no review is properly requested, the decision at the Employer
on review, as the case may be, shall be final and Binding on all parties. No
legal action for benefits under the Plan shall be brought unless and until the
claimant has exhausted his remedies under the Plan.
(j) If for any reason the written notice at denial described above is
not furnished within 90 days at the Plan Administrator's receipt of a claim for
benefits, the lain shall be deemed to be denied. Likewise, if for any reason
the written decision on review described above Is not furnished within the time
prescribed, the claim shall be deemed to be denied on review.
(k) Notwithstanding any other provision of this Section, any
controversy or claim arising out of or relating to a claim for benefits payable
by this Plan may, at the option of the claimant, be submitted for settlement by
arbitration in accordance with the Employee Benefit Plan Claims Arbitration
Rules of the American Arbitration Association, and such rules are incorporated
herein by reference. The decision of the arbitrator shall be final and binding
on all parties thereto and judgment upon the award may be entered in any court
having competent jurisdiction.
10.7 Effect of Plan Administrator Action. All actions taken and all
-----------------------------------
determinations made by the Plan Administrator in good faith shall be final and
binding upon all Participants, their Spouses and designated beneficiaries, the
Recordkeeper, the Trustee, the Plan Administrator, the Employer, any Related
Company, and any person interested in the Plan or Trust Fund.
10.8 Investment Funds.
----------------
(a) For investment purposes, the assets of the Trust Fund, other than
earmarked investments described in Sections 4.9 and 10.9, shall be invested in
accordance with the Plan Administrator's instructions among the investment funds
specified in the Joinder Agreement and any loan account authorized under Section
4.9.
(b) Each Participant may specify the extent to which his Accounts
shall be invested in each of the investment
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funds. Investment directions shall be made in writing in the manner specified
by the Plan Administrator and in accordance with the Joinder Agreement and
applicable Plan rules. In the absence of proper elections under this Article,
the affected portion of the participant's Account shall be invested in the fixed
income investment fund and all distributions shall be charged first the portion
of the Participant's Accounts invested in the fixed income investment fund and
then to the balance of his Accounts as directed by the Plan Administrator.
(c) All gains and losses with respect to an investment fund shall be
credited or debited to it, and in allocating investment gains and losses among
the Participant's Accounts, Article VI shall be applied to each investment fund
separately, with each Participant's Account receiving a pro rata portion of such
gains and losses, based on the value of each Participant's Account invested in
such investment fund.
10.9 Life Insurance Investments.
--------------------------
(a) Subject to the limitations contained in the Joinder Agreement and
this Section, individual or group life insurance policies and individual or
group annuity contracts issued by one or more insurance companies may be
purchased by the Plan. If individual policies or contracts are purchased for a
Participant, such purchases may only be made with the Participant's written
consent unless purchased pro rata for all Participants. The insured under such
an individual policy or contract may be the Participant, his Spouse or his child
or children under age 25, at the Participant's designation. The Plan
Administrator may impose restrictions on the maximum amount of insurance which a
Participant may select on his Spouse and/or children. Individual policies or
contracts shall be considered an earmarked investment of the Participant's
401(k) Account, and premiums on such policies or contracts shall be charged to
such 401(k) Account. Any death benefit payable under a policy or contract on
the life of a Participant while it is held by the Trust shall be made in
accordance with Section 9.2. Any life insurance proceeds payable under a policy
or contract issued on the life of a Participant's Spouse or child are to be paid
to, or applied for the benefit of, the Participant. Any portion of the death
benefit under such policy or contract not distributed shall be paid to the
Participant's 401(k) Account and shall be allocated to investment funds in the
same manner as Deferrals.
(b) Not later than the earlier of a Participant's Retirement or
termination of employment, the Plan Administrator shall direct the Trustee to
distribute to the Participant in kind, any individual policies or contracts as
part of his benefit under the Plan; provided, however, that if the Participant
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elects, in writing, the Plan Administrator shall direct the Trustee to convert
into cash the entire value of such policies or contracts and the Trustee shall
use the proceeds of such conversion to pay the Participant's benefit.
(c) A Participant may increase life insurance investments at
enrollment periods designated by the Plan Administrator. A Participant may
decrease or cancel insurance after reasonable advance notice at any time. Not
more than forty-nine and nine-tenths percent (49.9%) of the aggregate amount of
Contributions made on behalf of a Participant may be Invested in ordinary life
insurance Policies or contracts, and not more than twenty-five percent (25%) of
the aggregate amount of Contributions on behalf of a Participant may be invested
in term life insurance or adjustable life insurance or universal life insurance
policies or contracts. If both ordinary and term life insurance policies or
contracts are purchased, the sum of the annual term and adjustable and universal
life insurance premium, plus one-half of the ordinary life insurance premiums,
may not exceed twenty-five percent (25%) of the Contributions made on behalf of
such Participant for the Plan Year in question.
(d) Any dividends which become payable on any life insurance policies
or contracts shall be used to reduce the premium on such life insurance policies
or contracts.
(e) In the case of any conflict between the provisions of the Plan and the
terms of any life insurance policy or contract, the provisions of the Plan shall
control.
-69-
ARTICLE XI
----------
AMENDMENTS AND TERMINATION OF THE PLAN
--------------------------------------
11.1 Amendments.
----------
(a) The Employer reserves the right to amend this Plan and all
amendments shall be in writing. Amenients to the Plan shall be effective as of
the date designated in the amendment or the amended Joinder Agreement, or in the
absence of any designation, as of the date of execution.
(b) No amendment or any other action by the Employer shall divert any
assets of the Plan to any purpose other than the exclusive benefit of the
Participants or their Spouse or beneficiaries. No amendment shall decrease the
vested percentage or amount of a Participant's Accounts.
(c) All rights under the Plan shall be determined under the terms of
the Plan as in effect at the time such determination is made.
(d) No amendment, unless it expressly provides otherwise, shall be
applied retroactively to increase the vested percentage of a former Participant
whose employment terminated before the date such amendment became effective
unless and until he or she again becomes a Participant and additional Employer
Contributions are allocated to the Participant's Accounts.
11.2 Termination of Plan: Discontinuance of Contributions
----------------------------------------------------
(a) The Plan is intended to be a permanent program, but the Employer
reserves the right at any time to terminate the Plan in whole or in part. In
the event of any termination or partial termination without the establishment of
a successor plan:
(1) an allocation of amounts being held in suspense under Section
5.2 shall be made in accordance with such Section;
(2) a Participant shall become fully vested in his Accounts or
portion of his Accounts if affected by such termination or partial termination
as the case may be; and
(3) if the Plan or any portion thereof is terminated, the Plan
Administrator shall direct the Trustee to
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liquidate the necessary portion of the Trust Fund and to distribute affected
Accounts, less a proportionate share of the expenses of term inaction, to the
persons entitled thereto in the manner specified in Article VIII.
(b) The Employer reserves the right to discontinue in whole or in
part, some or all types of Contributions to the Plan. In the event of complete
discontinuance of Contributions to the Plan, the Plan and Trust fund shall
otherwise remain in full force and effect, and all Accounts affected by such
discontinuance shall thereupon become fully vested.
11.3 Merger. The Plan shall not be merged with or consolidated with, nor
------
shall its assets be transferred to, any other qualified retirement plan unless
each Participant would receive a benefit after such merger, consolidation, or
transfer (assuming the Plan then terminated) which is of actuarial value equal
to or greater than the benefit he would have received from his Accounts if the
Plan had been terminated on the day before such merger, consolidation, or
transfer.
-71-
ARTICLE XII
-----------
TOP-HEAVY PROVISIONS
--------------------
12.1 General. The following provisions shall apply automatically to the
-------
Plan and shall supersede any contrary provisions for each Plan Year in which the
Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy Plan. This
Article shall be construed in accordance with the provisions of section 416 of
the Code.
12.2 Definitions. The following definitions shall supplement those set
-----------
forth in Article II of the Plan:
(a) "Aggregation Group" shall mean:
-----------------
(1) each plan (including a frozen plan or a plan which has been
terminated during the 60-month period ending on the Determination Date) of the
Employer or a Related Company in which a Key Employee is a participant,
(2) each other plan (including a frozen plan or a plan which
has been terminated during the 60-month period ending on the Determination Date)
of the Employer or a Related Company which enables any plan in which a Key
Employee participates to meet the requirements of sections 401(a) (4) or 410 of
the Code, and
(3) each other plan (including a frozen plan or a plan which
has been terminated during the 60-month period ending on the Determination Date)
of the Employer or a Related Company which is included by the Plan Administrator
if the Aggregation Group, including such a plan, would continue to meet the
requirements of sections 401(a) (4) and 410 of the Code.
(b) "Determination Date" shall mean the last day of the preceding Plan
------------------
Year; provided, however, that for the first Plan Year it shall mean the last day
of that Plan Year. If the Employer or a Related Company maintains any other
plan which is aggregated with this Plan under Subsection (a), the "Determination
Date" for each of such plans shall be determined in accordance with this
Subsection (b), and such plans shall then be aggregated by adding the results
for all plans as of the Determination Dates that fall within the same calendar
year.
(c) "Key Employee" shall mean any employee, former employee, or the
------------
beneficiaries of such employee or former employees, who at any time during the
60-month period ending on the Determination Date, is:
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(1) an Officer of the Employer having ~imitation Compensation
from the Employer and all Related Companies in a Plan Year during such period
greater than fifty percent (50%) of the amount in effect under section 415(b)
(1) (A of the Code for the calendar year in which such Plan Year ends;
(2) one of the 10 employees during the entire 60-month period
having Limitation Compensation from the Employer and all related Companies
greater than the amount in effect under section 415(c) (1) (A) of the Code and
who own, considered as owning within the meaning of section 318 of the Code, the
largest interests in the Employer or any related company; provided, however,
that such interest exceeds one-half percent (0.5%) of the total ownership of the
Employer or Related Company;
(3) a five-percent (5%) owner of the employer (or an employee who
is considered as owning five percent (5%) of the Employer within the meaning of
section 318 of the Code)
(4) a one-percent (1%) owner of the Employer (or an employee who
is considered as owning one percent (1%) of the Employer within the meaning of
section 318 of the Code) having Limitation Compensation from the Employer and
all Related Companies for a Plan Year during such period which is in excess of
$150,000.
The above determinations shall be made in accordance with section 416(i) of
the Code. No more than 50 employees or, if less, the greater of three employees
or ten percent (10%) of the greatest number of employees, including leased
employees within the meaning of section 414(n) of the Code, employed by Employer
and all Related Companies during the 60-month period ending on the Determination
Date, shall be treated as officers.
(d) "Non-Key Employee" shall mean any employee or former employee of
----------------
the Employer or a Related Company in any Plan Year who is not a Key Employee as
to that Plan Year, including the beneficiaries of such persons.
(e) "Super Top-Heavy Plan" shall mean each plan in an Aggregation
--------------------
Group if, as of the applicable Determination Date, the Top-Heavy Ratio exceeds
ninety percent (90%), determined in accordance with section 416 of the Code.
(f) "Top-Heavy Plan" shall mean each plan in an Aggregation Group if,
--------------
as of the applicable Determination Date, the Top-Heavy Ratio exceeds sixty
percent (60%), determined in accordance with section 416 of the Code.
-73-
(g) "Top-Heavy Ratio" shall mean the ratio for any Plan Year,
---------------
calculated as of the Determination Date of such Plan Year, determined by
comparing the amount described in Subsection (g) (1) with the amount described
in Subsection (g) (2) after deducting from each such amount any portion thereof
described in Subsection (g) (3):
(1) the sum of (A) the present value to all accrued benefits of
Key Employees under all qualified defined benefit plans included in the
Aggregation Group, (B) the balances in all of the accounts of Key Employees
under all qualified defined contribution plans included in the Aggregation
Group, and (C) the amounts distributed from all plans in such Aggregation group
to or on behalf of any Key Employee during the period of five Plan Years ending
on the Determination Date, and excluding benefits paid on account of death in
excess of the accrued benefit or account balances immediately prior to death;
(2) the sum of (A) the present value of all accrued benefits of
all participants under all qualified defined benefit plans included in the
Aggregation Group, (B) the balances in all of the accounts of all participants
under all qualified defined contribution plans included in the Aggregation Group
and (C) the amounts distributed from all plans in such Aggregation Group to or
on behalf of any participant during the period of five Plan Years ending on the
Determination Date;
(3) the sum of (A) all Rollover Contributions (or fund-to-fund
transfers) to the Plan by an Employee after December 31, 1983 from a plan
sponsored by an employer which is not the Employer or a Related Company, (B) any
amount that is included in Subsections (g) (1) and (g) (2) for a person who is a
Non-Key Employee as to the Plan Year of reference but who was a Key Employee as
to any earlier Plan Year, and (C) for Plan Years beginning after December 31,
1984, any amount that is included in Subsections (g) (1) and (g) (2) for a
person who had not performed any service for the Employer during the five-year
period ending on the Determination Date.
(4) The present value of accrued benefits under all qualified
defined benefit plans included in the Aggregation Group shall be determined on
the basis of the 1984 Unisex Mortality Table and an interest rate of seven
percent (7%). Solely for the purpose of determining if the Plan or any other
plan included in a required Aggregation Group of which this Plan is a part, is
top-heavy, the accrued benefit of an Employee other than a Key Employee shall be
determined under (A) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Employer and all Related Companies,
or (B) if there is no such method, as if such benefit accrued not
-74-
more rapidly than at the slowest accrual rate permitted under the fractional
accrual method of section 411(b) (1) (C) of the Code.
12.3 Minimum Contribution for Non-Key Employees.
------------------------------------------
(a) In each Plan Year in which the Plan is a Top-Heavy Plan, each
Participant who is a Non-Key Employee and who's actively employed by the
Employer on the last day of such Plan year shall receive a total minimum
Employer contribution, including forfeitures, under all plans described in
Sections 12.2(a) (1) and (a) (2) in an amount which is not less than three
percent (3%) of the Participant's Limitation Compensation. This minimum
Contribution shall be credited to a Participants Employer Contribution Account.
Such Contribution shall be made to each eligible Non Key Employee regardless of
the number of Hours of Service such Non-Key Employee completes during the Plan
Year, and regardless of the level of Compensation the Non-Key Employee receives
during such Plan Year. Salary reduction contributions to such plans made on
behalf of a Participant in Plan Years beginning after December 31, 1984 shall be
deemed to be Employer contributions for the purposes of this Subsection.
Beginning with the first Plan Year which begins after December 31, 1988, a
Participant's Deferrals and any Matching Contributions made by the Employer on
behalf of a Participant may not be used to satisfy this three percent (3%) of
Limitation Compensation contribution.
(b) The percentage set forth in Subsection (a) shall be reduced to the
percentage at which contributions, including Deferrals and forfeitures, are made
(or are required to be made) for a Plan Year for the Key Employee for whom such
percentage is the highest for that Plan Year. This percentage shall be
determined for each Key Employee by dividing the Contribution for such Key
Employee by his Limitation Compensation for the Plan Year, determined under
Section 12.5. All defined contribution plans required to be included in an
Aggregation Group shall be treated as one plan for the purposes of this Section;
provided, however, that this Section shall not apply to any plan which is
required to be included in an Aggregation Group if such plan enables a defined
benefit plan in the Aggregation Group to satisfy the requirements of section
401(a) (4) or section 410 of the Code.
(c) If a Non-Key Employee described in Subsection (a) participates in
both a defined benefit plan and a defined contribution plan described in Section
12.2(a)(1) and (a)(2), the Employer shall not be required to provide such Non-
Key Employee with both the minimum benefit under the defined benefit plan and
the minimum benefit under the defined contribution plan. In such event, the
Non-Key Employee shall receive the minimum
-75-
contribution under Subsection (a) in an amount which is not less than five
percent (5%) of the Non-Key Employee's annual Limitation Compensation for the
Plan Year and not more than the minimum amount required to satisfy the minimum
benefit required by section 416 of the Code.
12.4 Vesting.
-------
(a) Change in Schedule. Each Participant's vested interest in his
------------------
Employer Contribution Account shall be determined in accordance with the
following schedule for any Plan Year in which the Plan is a Top-Heavy Plan
unless the schedule is set forth in the Joinder Agreement provides more rapid
vesting for such Participant:
Years of
Service Percent Vested
------- --------------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(b) Shift Out of Top-Heavy Status. If a Top- Heavy Plan ceases to be
-----------------------------
a Top-Heavy Plan, the vesting schedule set forth in the Joinder Agreement shall
again apply to all Years of Service; provided, however, that a Participant shall
maintain the same vested interest in his Employer Contribution Account,
determined under the schedule in Subsection (a) as of the date on which the Plan
ceases to be a Top-Heavy Plan, until the Participant's vested percentage under
the schedule in the Joinder Agreement exceeds the percentage maintained under
the schedule in Subsection (a)
(c) Special Election of Vesting Schedule. Each Participant with at
------------------------------------
least three Years of Service (as described in Section 7.3 of the Plan) at the
time that the Plan ceases to be a Top-Heavy Plan may elect to continue to have
his vested percentage computed under the Plan in accordance with the vesting
schedule set forth in Subsection (a). The period during which the election may
be made shall commence on the date on which the Participant is informed that the
Plan is no longer a Top-Heavy Plan and shall end 60 days thereafter and the Plan
Administrator shall provide each affected Participant with a timely notice
thereof.
12.5 Compensation. For each Plan Year in which the Plan is a Top-Heavy
------------
Plan, the Limitation Compensation of any
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Participant for purposes of accruing a benefit under the Plan for that Plan Year
shall not exceed $200,000, or such greater amount as may be prescribed by
Regulation promulgated by the Secretary of the Treasury. In the case of a Plan
Year which is less than 12-consecutive months and in which the Plan is a Top-
Heavy Plan, Limitation Compensation shall exclude total taxable income of any
Participant in excess of the amount determined by multiplying, $200,000, as
adjusted, by a fraction, the numerator of which is the number of full calendar
months occurring in such short Plan Year and the denominator of which is 12.
12.6 Social Security. For each Plan Year in which the Plan is a Top-Heavy
---------------
Plan, the requirements of this Article shall be satisfied without taking to
account any Social Security or similar contributions or benefits.
12.7 Adjustment to Maximum Allocation Limitation.
-------------------------------------------
(a) For each Plan Year in which the Plan is (1) a Top-Heavy Plan or
(2) a Super Top-Heavy Plan, and the Employer does not make the election
described in Subsection (c) and for which a similar election has not been made
as to another plan in the Aggregation Group, the one hundred twenty-five percent
(125%) factor in the defined benefit and defined contribution fractions
described in Section 5.2(d) shall be reduced to 100%. The adjustment described
in this Subsection shall not apply to any Participant during any period in which
the Participant earns no additional accrued benefit under any defined benefit
plan and has no employer contributions, forfeitures, or voluntary contributions
allocated to his accounts under any defined contribution plan.
(b) In the case of any Top-Heavy Plan to which Section 5.2 applies,
"$41,500" shall be substituted for "$51,875" in the calculation of the numerator
of the transition fraction in Section 5.2(f).
(c) If, in any Plan Year in which the Plan is a Top-Heavy Plan but not
a Super Top-Heavy Plan, the Aggregation Group described in Sections 12.2(a)(l)
and (a) (2) also includes a defined benefit plan, the Employer may elect to use
a factor of 1.25 in computing the denominator of the defined benefit and defined
contribution fractions described in Article V. In the event of such an
election, the minimum Employer contribution described in Section 12.3(a) for
each Non-Key Employee who is not covered under a defined benefit plan shall be
increased to four percent (4%), and the minimum Employer contribution described
in Section 12.3(c) for each Non-Key Employee who is covered under a defined
benefit plan shall be increased to seven and one-half percent (7-1/2%).
-77-
ARTICLE XIII
------------
GENERAL PROVISIONS
------------------
13.1 Payments
--------
(a) In the event any amount becomes payable under the Plan to a minor
or a person who, in the sole judgement of the Plan Administrator, is considered
to be unable to give a Valid receipt for the payment by reason of physical or
mental condition, the Plan Administrator may direct that such a payment be made
to any person found by the Plan Administrator, in its sole judgment, to have
assumed the care of the person in question. Any payment made pursuant to such
determination shall constitute a full release and discharge of the Plan, the
Plan Administrator, the Trustee, the Recordkeeper, the Employer, a Related
Company and their officers, directors, employees, agents, and representatives.
(b) If the Plan Administrator is unable to locate any person to whom a
benefit becomes payable under the Plan, the amount payable shall be held under
the law until it escheats under applicable law or, alternatively, the Employer
may elect that such amount be treated as a forfeiture and allocate such amount
to the Plan Participants in accordance with the provisions of Article V;
provided, however, that if the amount is treated as a forfeiture and the person
to whom the benefit is payable is subsequently located, such forfeited amount,
without any earnings thereon, shall be contributed to the Plan by the Employer
within one year of location and the amount shall be distributed to such person
in accordance with the provisions of Article VIII.
(c) If the Plan Administrator retains at the Plan's expense a private
investigator, other person or service to assist in locating a missing person,
all costs incurred for such services shall be paid from the Accounts to which
the missing person was entitled.
(d) All benefits payable under the Plan shall be paid or provided for
solely from the Trust Fund, and the Employer assumes no liability or
responsibility therefor.
13.2 Consolidation or Merger of Employer. In the event of the
-----------------------------------
consolidation or merger of the Employer with or into any other business entity,
or the sale by the Employer of its assets, the successor employer may continue
the Plan by adopting the same. If, within ninety (90) days from the effective
date of such consolidation, merger, or sale of assets such new
-78-
corporation, partnership, or Proprietorship does not adopt the Plan, the Plan
shall be terminated. Neither the Plan nor its assets or liabilities shall be
transferred to any other plan unless immediately after the merger,
consolidation, or transfer each Participant would receive, immediately after the
merger, consolidation, or transfer, a benefit which is equal to or greater than
the benefit he would have received from his Accounts if the Plan had been
terminated on the business day immediately before such merger, consolidation, or
transfer. This provision shall not be construed as prohibiting the commingling
of assets of this Plan and any other qualified plans for investment purposes.
13.3 Participating Companies. Any employer may, with the approval of the
-----------------------
Plan Administrator, adopt the Plan (as to the entire business or as to any one
or more divisions or facilities of such employer) effective as of the date it
specifies. Adoption shall be accomplished by resolution of the adopting
corporation's own board of directors or agreement of its partners or sole
proprietor. By its adoption of this Plan, a Participating Company shall be
deemed to appoint the Employer, the Plan Administrator appointed by the Employer
and the Trustee designated by the Employer its exclusive agent to exercise on
its behalf all the power and authority conferred by this Plan or by the Trust
Agreement upon the Employer, the Plan Administrator, and the Trustee all as
defined herein. The authority of the Employer, the Plan Administrator, and the
Trustee to act as such agent shall continue until the Plan is terminated as to
the Participating Company and the relevant trust fund assets have been
distributed as herein provided. The Participating Company may terminate its
participation in the Plan at any time by action of its board of directors or
agreement of its partners or sole proprietor.
13.4 Termination of Employment
-------------------------
(a) A person's employment shall not terminate on account of an
authorized leave of absence, sick leave, vacation, or on account of a military
leave described in Subsection (b), a direct transfer between the Employer and a
Related Company, or a temporary layoff for lack of work; provided, however:
(1) if a temporary layoff for lack of work continues beyond the
period allowed under applicable personnel policies of the Employer, a person's
employment shall terminate as of the last day of such period; and
(2) failure to return to work upon expiration of any leave of
absence, sick leave, vacation, or military leave within the time period allowed
under applicable
-79-
personnel policies of the Employer after recall from a temporary layoff for
lack of work shall be considered a resignation effective as of the expiration of
such leave of absence, sick leave, vacation, military leave, or temporary
layoff.
(b) Any Employee who leaves the Employer directly to perform service
in the Armed Forces of the United States or in the United States Public Health
Services under conditions entitling the Employee to reemployment rights as
provided in the laws of the United States shall be considered to be on military
leave. An Employee's military leave shall expire if such Employee voluntarily
resigns from the Employer during such leave, or if he fails to make application
for reemployment rights. In such event, the individual's employment shall
terminate by resignation on the day such military leave expired.
13.5 Corrective Contributions. To the extent required by an order of a
------------------------
court of competent jurisdiction, or a settlement, or agreement granting back
pay, the Employer shall make corrective Contributions, subject to the applicable
limitations on deductible Contributions and maximum Annual Additions, to the
Plan. On a voluntary basis, the Employer may also make such Contributions in
order to correct mistakes made in distributing or crediting amounts to one or
more Accounts. Any such Contributions shall be allocated or credited as
specified by the Employer.
13.6 Limitation on Rights of Employees. Except as provided in any
---------------------------------
applicable basic labor agreement, the Plan is strictly a voluntary undertaking
on the part of the Employer and shall not constitute a contract between the
Employer and any employee, or consideration for, or an inducement or condition
of, the employment of an employee. Except as otherwise required by law or such
an employment agreement, nothing contained in the Plan shall give any employee
the right to be retained in the service of the Employer or to interfere with or
restrict the right of the Employer, which is hereby expressly reserved, to
discharge or retire any employee at any time, with or without cause. Except as
otherwise required by law, inclusion under the Plan will not give any employee
any right or claim to any benefit hereunder except to the extent such right has
specifically become fixed under the terms of the Plan and there are Trust Funds
available to pay the benefit.
13.7 Nonalienation of Benefits.
-------------------------
(a) Except as otherwise provided in Subsection (b), the payments,
benefits, or rights of any Participant, Spouse, or beneficiary shall not be
subject to assignment, alienation, or the claim of any creditor. To the fullest
extent
-80-
permitted by law, all such payments, benefits, and rights shall be free from
attachment, alienation, garnishment\\1\\ or any other legal or equitable process
available to any creditor of such Participant, Spouse, or beneficiary. Except
as provided in Section 4.9, no Participant's Spouse or beneficiary shall have
the right to alienate, anticipate, commute, pledge, encumber, or assign any of
the benefits or payments under the Plan, except that such person shall have the
right to designate a beneficiary or beneficiaries as hereinabove provided.
(b) (1) 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 (as those terms are
defined in section 414(p) of the Code), including any other domestic relations
orders permitted to be treated as a qualified domestic relations order under the
provisions of the Code and ERISA The Plan Administrator shall establish a
written procedure to determine the qualified status of domestic relations orders
and to administer distributions under such qualified orders.
(2) To the extent provided under a qualified domestic relations
order, a former spouse of a Participant shall be treated as the Spouse of a
Participant for all purposes under this Plan.
(3) The Plan Administrator shall have the right to use a
Participant's Accounts to satisfy a federal tax levy assessed against the
Participant pursuant to section 6331 of the Code.
13.8 Duty to Provide Data.
--------------------
(a) The Employer, a Related Company, and every other person with an
interest in the Plan or claiming benefits under the Plan shall furnish the Plan
Administrator on a timely and accurate basis with such documents, evidence, or
information as the Plan Administrator in its discretion deems necessary or
desirable for the purpose of administering the Plan. The Plan Administrator may
postpone payment of benefits until such documents, evidence, or information has
been furnished.
(b) Every Participant and other person claiming a benefit under this
Plan shall give written notice to the Plan Administrator of his post office
address and each change of post office address. Any communication, statement,
or notice addressed to such person at his latest post office address, as filed
with the Plan Administrator will, on deposit in the United States mail with
postage prepaid, be binding upon such person for all purposes of the Plan. The
Plan Administrator, the Employer,
-81-
a Related Company, and all Plan fiduciaries shall not be obliged to search for,
or to ascertain, the whereabouts of any person who fails to give notice of his
correct address.
13.9 Service of Process. The Plan Administrator is hereby designated as
------------------
agent for the service of legal process on the Plan.
13.10 Governing Law. The Plan and Trust shall be interpreted,
-------------
administered, and enforced in accordance with the Code and ERISA, and rights of
Participants, former Participants, Spouses, beneficiaries, and all other persons
shall be determined in accordance therewith; provided, however, that, to the
extent that state law is applicable, the laws of the state in which the
Employer's principal place of business is located shall apply.
13.11 Titles. Titles are provided herein for convenience only and shall
------
not serve as a basis for interpretation or construction of the Plan or Trust
Agreement.
13.12 References. Unless the context clearly indicates to the contrary, a
----------
reference to a Plan or Trust Agreement provision, statute, regulation, or
document shall be construed as referring to any subsequently enacted, adopted,
or executed counterpart.
-82-
SCHEDULE A EQ-HS
PETROLEUM DEVELOPMENT CORPORATION
---------------------------------
SAVINGS AND PROTECTION PLAN
JOINDER AGREEMENT
The Employer desires to adopt the Savings and Protection Plan to which this
Joinder Agreement is a Schedule.
The special features applicable to the Plan are set forth in this Joinder
Agreement. These provisions shall take precedence over any contrary terms of
the Plan.
A. GENERAL INFORMATION
-------------------
(1) Name of Employer: Petroleum Development Corporation
---------------------------------
Employer is successor to: N/A
------------------
Employee's service with the Employer's predecessor shall be recognized for
eligibility, participation, and vesting purposes (choose one):
Yes_____ No_____ N/A
(2) This is (choose one):
(a) _____ new plan: Effective Date:_____________
(b) x amendment to existing plan.
--------
Effective Date of amendment: January 1. 1989
---------------
Original effective date of Plan: May 1, 1987
-----------
(3) Employer's fiscal (taxable) year: 1/1-12/31
---------
(4) Plan Year: 1/1 - 12/31 Plan Number: 001
----------- ---
(5) Limitation Year (if other than the Plan Year):
-83-
B. ELIGIBILITY. RETIREMENT AGE. AND COMPENSATION
---------------------------------------------
(6) Service Required to Participate: Eligibility service shall be
-------------------------------
calculated on the Hours of Service basis.
(7) (a) Service Requirement: To participate, an Eligible Employee (see
-------------------
Item 7(b)) must have completed (choose one):
(1) ___ ______ month(s) of service (up to 11 months)
(2) X one Year of Service
--
(If less than one Year of Service is required, an Eligible Employee must be
continuously employed for the number of months specified above. The Eligible
Employee shall not be required to complete a stated number of Hours of Service.)
(b) Covered Positions: An employee will become a Participant in the Plan
-----------------
only if he has attained age 19 (not greater than age 21), and he also meets the
following special requirements (choose as many as desired):
(1) ___ all employees, including part-time employees, as defined in
Section 2.20 of the Plan
X the employee is a salaried employee
-
X the employee is an hourly employee the employee is a
-
commissioned salesperson
the employee is a part-time employee (as defined in Section
--
2.20 of the Plan)
other: _________
--
(2) ___ the employee is a union employee (whose collective bargaining
agreement provides for participation hereunder)
the employee is a non-union employee
--
the employee is either a non-union or a union employee
--
not applicable (the Employer has no union employees)
--
-84-
(3) __ the employee is a leased employee (as defined in section 414(n) of
the Code)
(8) Early Retirement: shall be age 591/2 (not earlier than age 55).
---------------- -----
(9) Normal Retirement Date: shall be age 65 (not earlier than 60 and not later
----------------------
than 65).
(10) Entry Dates: January 1 and JulY 1 (generally, the first day of the Plan
------------ --------- ------
Year and the first day of the seventh month of the Plan Year). In
addition, the Effective Date of this Plan shall be an Entry Date in the
first Plan Year.
C. PARTICIPANT DEFERRALS AND EMPLOYER CONTRIBUTIONS
------------------------------------------------
(11) Participant Deferrals: Each Participant shall be entitled to defer
---------------------
from 2% to 20% (specify allowable whole percentages) of his Compensation for the
-- ---
period in question by electing to have the Employer contribute the Deferral to
the Participant's 401(k) Account instead of paying the deferred amount to the
Participant in cash.
(12) Participant Rollovers: Participants may make rollover contributions:
---------------------
Yes X No _____
-----
(13) Matching Contributions: Participant Deferrals with respect to which
----------------------
Matching Employer Contributions are to be made are referred to as
"Matchable Deferrals." Choose one of the following options:
(a) ___ the Employer shall not match a Participant's
---
Deferrals.
(b) X the Employer shall, at its discretion, match
---
a Participant's Deferrals in an amount to be
determined by the Employer which shall be
allocated among Participants entitled to
Contributions under Item 16 for the Plan Year
in proportion to their Matchable Deferrals
for the Plan Year. In making this allocation
(choose one):
(1) X all of a Participant's Matchable
---
Deferrals will be taken into account.
-85-
(2) ___ only a Participant's Matchable Deferrals not in excess of
$_________ or _____% of Compensation shall be taken into account.
(c) _____ the Employer shall match a Participant's Deferrals in the
following manner:
(1) X an amount which is equal to _____% of the
----
Matchable Deferrals of each Participant
entitled to Matching Contributions under
Item 16 for the Plan Year.
(2) ____ _____% of the Matchable Deferrals,
provided that such Matching Contribution
does not exceed $___________ or _____% of
the Participant's Compensation for the
period in question for each Participant
entitled to matching Contributions under
Item 16 for the Plan Year.
In no event shall a Matching Contribution under (b) or (c) above exceed the
lesser of (1) the maximum amount which may be contributed as Deferrals under
Code section 402(g) for such Plan Year, or (ii) the amount determined in (b) or
(c) above.
(14) Basic Employer Contributions (i.e., non-Matching Contributions)
----------------------------
(choose one):
(a) ___ the Employer shall not make Basic Contributions.
---
(b) X the Employer shall contribute (choose one):
---
(1) X a discretionary amount to be determined by
---
the Employer and allocated in the proportion that each
eligible Participant's Compensation for the period in
question bears to the total Compensation of all
eligible Participants for the period in question.
(2) ___ $__________ for all Participants who meet
the requirements of Item 16 for the Plan
Year.
-86-
(3) ____ an amount equal to _____% of the
Compensation of all Participants who meet
the requirements of Item 16 for the Plan
Year.
(15) Basic and Matching Contributions (choose one):
--------------------------------
(a) ____ shall not exceed the Net Profits of the
Employer.
(b) X may exceed the Net Profits of the Employer.
----
(16) Eligibility for Employer Contributions: Each Eligible Employee
--------------------------------------
employed during the Plan Year shall be eligible to share in Basic Contributions
if the Eligible Employee receives Compensation and is employed by the Employer
on the last day of the period for which such Contribution is made. Each
Participant employed during the Plan Year who made Matchable Deferrals shall be
eligible to share in Matching Contributions if the Participant is employed by
the Employer on the last day of the period for which the Contribution was made.
D. ALLOCATION OF AMOUNTS TO PARTICIPANT ACCOUNTS
---------------------------------------------
(17) Participant Deferrals: A Participant's Deferrals shall be credited to
---------------------
the Participant's 401(k) Account as of the date the Deferrals are deducted by
the Employer from the Participant's Compensation, but without any portion of the
gains or losses of the Trust Fund earnings thereon until such time as they are
invested by the Trustee.
Qualified Nonelective Contributions shall be allocated to the Qualified
Nonelective Contribution Accounts of the Eligible Employees who are not Highly
Compensated Employees in the Plan Year for which the Qualified Nonelective
Contributions are made and shall be allocated to the Qualified Nonelective
Contribution Account of each such Eligible Employee in the proportion that his
Compensation for the Plan Year bears to the Compensation of all such Eligible
Employees for the Plan Year.
(18) Matching Contributions: Matching Contributions for the period in
----------------------
question, if any, shall be credited to a Participant's Employer Contribution
Account in accordance with Item 13 as of the last day of the period for which
they are made, but without any portion of the gains or losses of the Trust Fund
or earnings thereon until such time as they are invested by the Trustee.
Qualified Matching Contributions shall be allocated to the Qualified
Matching Contribution Accounts of the Participants
-87-
who are not Highly Compensated Employees in the Plan Year for which the
Contributions shall be allocated to the Qualified Matching Contribution
Participant in the proportion that his Salary Reduction Savings for the Plan
Year bears to the Salary Reduction Savings of all such Participants for the Plan
Year.
(19) Basic Contributions: Basic Contributions shall be made as of the last
-------------------
day of the period specified by the Plan Administrator. Basic Contributions made
in accordance with Item 14(b) (1) shall be allocated to the Employer
Contribution Account of each Eligible Employee who meets the requirements of
Item 16 of the Joinder Agreement as of the last day of the period for which the
Contributions are made, in the method specified in Item 14.
(20) Forfeitures: Forfeitures, if any, shall (choose one):
-----------
(a) X be applied to increase benefits by adding them
--- to and allocating them with Basic Contributions.
If there are no Basic Contributions under this
Plan, forfeitures will be allocated to the
Employer Contribution Accounts of eligible
Participants on a pro-rata basis in the
proportion that each eligible Participant's
Compensation bears to the total Compensation of
all eligible Participants.
(b) be applied to reduce the amount the Employer is
--- required to contribute for the year.
A Participant shall be eligible to share in forfeitures if the Participant is
employed by the Employer on the last day of the period for which the forfeitures
are being made.
E. CHANGES IN PARTICIPANT DEFERRAL RATES
-------------------------------------
(21) Timing of Changes: A Participant may suspend his Deferrals at any
-----------------
time and, following a suspension, the Participant may resume making Deferrals at
such time as the Plan Administrator specifies, but in no event later than one
year following the filing of an election to resume Deferrals. In addition,
Participants may change their Deferral rate at such times as the Plan
Administrator specifies.
(22) Effective Date of Change: A change in Deferral rate shall become
------------------------
effective on the date the Plan Administrator specifies, but in no event later
than one year following the filing of an election for a new Deferral rate.
-88-
F. VESTING
-------
(23) Service for Vesting Purposes: Vesting credit shall be determined
----------------------------
under the Hours of Service method. A Participant's 401(k) and Rollover Accounts
shall at all times be fully vested. A Participant's Employer Contribution
Account shall vest as follows (choose one):
(a) X full and immediate vesting
-
(b) _____ "2-20" vesting
Vested
Years of Service Percentage
---------------- ----------
less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
(c) _____ "3-20" vesting
Vested
Years of Service Percentage
---------------- ----------
less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
(d) _____ "cliff" vesting. Full vesting after _____ years of service
(not to exceed five), with no interim vesting.
(N.B. The schedules in (c) and (d) above may only be used if the Plan is not
"top-heavy".)
-89-
If this Plan is meant to be an amendment of an existing plan (see Item 2), and
if the vesting schedule of the predecessor plan document is to be used with
respect to account balances prior to the effective date of the amendment, that
vesting schedule must be specified below:
Years of Vesting Vested
Service Percentage
------- ----------
1 ___%
2 ___%
3 ___%
4 ___%
5 ___%
6 ___%
7 ___%
8 ___%
9 ___%
10 ___%
11 ___%
12 ___%
13 ___%
14 ___%
15 ___%
Years of Service to be excluded for vesting purposes:(specify):
G. INVESTMENTS
-----------
(24) Investment Funds: Accounts may be invested in one or more of the
----------------
following investment funds:
(a) fixed income investment fund
(b) common stock investment fund
(c) balanced investment fund
(d) aggressive stock investment fund
(e) individual life insurance policies or contracts
(25) Investment Elections: Subject to the rules established by the Plan
--------------------
Administrator, if more than one investment fund is being offered (as determined
by the Employer), Participants may choose how their Accounts are to be invested.
To the extent a Participant fails to elect an investment fund
-90-
properly, such Participants Accounts shall be invested in the fixed income
investment fund.
H. MISCELLANEOUS
-------------
(26) Compensation:
------------
(a) Compensation shall be defined as:
(1) an employee's compensation as described in
(S)414(s); or
(2) an employee's Limitation Compensation; or
X (3) an employee's total taxable income paid by the
-
Employer, exclusive of:
(A) overtime
(B) bonuses
If this Item (a) (3) is selected, notwithstanding
the foregoing, Compensation for a given Plan Year
shall be the total wages of a Participant that
would be required to be reported on the Participant's
Form W-2 for income tax purposes if, for that Plan
Year, the definition given in this Item 26(a) (3)
does not meet the compensation percentage test. The
definition given in this Item 26 (a) (3) meets
the compensation percentage test for a given
Plan Year if the compensation percentage for the
Highly Compensated Employees is not more than
the compensation percentage for all other
Eligible Employees. The compensation percentage
for a group of individuals is the average of the
ratios, calculated separately for each
individual in the group, of (a) the individual's
compensation as defined in this Item 26(a) (3)
for the Plan Year in question to (b) the total
wages that would be required to be reported on
the individual's Form W-2 for income tax
purposes for the Plan Year in question.
-91-
(b) For Plan Years beginning prior to January 1, 1992, Compensation:
(1) shall
X (2) shall not
-
include Compensation earned by an employee prior to the date on which he becomes
eligible to participate in the Plan under Section 3.1(a).
(27) Hardship Withdrawals: For purposes of Section 4.8 of the Plan, the
--------------------
determination as to whether a Participant is undergoing a hardship shall be
determined under either (a) or (b) as follows:
X (a) The Participant shall submit to the Plan Administrator a written
-
request for a hardship withdrawal. The Participant's application shall
represent that the withdrawal is to be made for one or more of the following
purposes:
(1) to pay medical expenses incurred by the
Participant or his spouse or any of his dependents, not
reimbursed by insurance or otherwise;
(2) to purchase a principal residence for the
Participant (but not to pay mortgage payments);
(3) to pay tuition and related educational fees for
the next twelve months of post-secondary education for the
Participant or his spouse or any of his children or
dependents;
(4) to prevent the eviction of the Participant from
his principal residence or to prevent the foreclosure on the
mortgage of his principal residence.
For the purposes of this Item 27(a), the term
"dependent" shall have the meaning given to it by section
152 of the Code.
A withdrawal shall not be permitted under this Item
27(a) for any reason not listed above, unless the
Commissioner of Internal Revenue expands the list of "deemed
immediate and heavy
-92-
financial needs" set forth in IRS Reg. (S)1.401(k)- 1(d)(2)(iv)(A), in which
event withdrawals shall be permitted for the additional reason(s) described by
the Commissioner.
The amount of the Participant's withdrawal may not exceed the amount
necessary to meet the Participant's hardship (including amounts necessary to pay
any federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution).
_____ (b) If a Participant does not qualify for a hardship withdrawal because he
does not meet one of the requirements of Item 27(a), a hardship withdrawal may
be permitted if the Committee decides that the Participant's hardship meets
written standards set by the Committee and administered on a nondiscriminatory
basis.
(28) Distribution Costs: Costs associated with the distribution of benefits to
------------------
a Participant, Spouse, or beneficiary will be paid (choose one):
(a) _____ by the Employer.
(b) X from the amount to be distributed to the Participant, Spouse, or
-
beneficiary.
(29) Other Special Provisions: (add additional sheets, if necessary):
------------------------
Petroleum Development Corporation
---------------------------------- ---------------------------------
Date Employer's Name
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Attest:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President By: Executive VP
----------------------------- ------------------------
Name and Title Name and Title
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------- ------------------------
Signature Signature
-93-
AMENDMENT NO. 1
To The
PETROLEUM DEVELOPMENT CORPORATION
SAVINGS AND PROTECTION PLAN
WHEREAS, Petroleum Development Corporation adopted the Petroleum
Development Corporation Savings and Protection Plan (the "Plan/11/) for its
employees, effective May 1, 1987; and
WHEREAS, the Plan has been amended from time to time, and was amended and
restated effective January 1, 1989; and
WHEREAS, the Company now wishes to further amend the Plan in order to
comply with certain requirements of the Unemployment Compensation Amendments of
1992 and the Omnibus Budget Reconciliation Act of 1993 through the adoption of
model language proposed by the Internal Revenue Service in Rev. Proc.93-12 and
Rev. Proc. 94-13 respectively; and
NOW, THEREFORE, the Plan is hereby amended, effective January 1, 1994 as
follows:
I. Section 2.13 is amended by the addition of the following paragraph at
the end of the Section:
"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
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000."
II. Section 8.5 is added to Article VIII and shall provide as follows:
Section 8.5 Direct Rollover. This Section applies to distributions made
---------------
on or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this Article,
a distributee may elect, at the time and in the manner prescribed by the plan
administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
(a) An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under section 401 (a)
(9) of the Code; and the portion of any distribution that is not includible in
gross income (determined without regard to the
-2-
exclusion for net unrealized appreciation with respect to employer securities).
(b) An eligible retirement plan is an individual retirement account
described in section 408(a) of the Code an individual retirement annuity
described in section 408(b') of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(c) A distributee includes an employee or former employee. In addition,
the employee's or former employee's surviving spouse and the employee's or
former employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the Code,
are distributes with regard to the interest of the spouse or former spouse.
(d) A direct rollover is a payment by the plan to the eligible retirement
plan specified by the distributee.
IN WITNESS WHEREOF, Petroleum Development Corporation has authorized its
duly appointed officers to execute this Amendment No. 1 this 31st day of
December, 1994.
SEAL PETROLEUM DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
President
Attest: s/s ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Assistant Secretary
-3-
AMENDMENT NO. 2
TO THE
PETROLEUM DEVELOPMENT CORPORATION 401(K) PLAN
WHEREAS, Petroleum Development Corporation (the "Company") adopted the
Petroleum Development Corporation 401(k) Plan (the "Plan") for its employees,
effective May 1, 1987; and
WHEREAS, the Plan has been amended from time to time, and was amended and
restated effective January 1, 1989; and
WHEREAS, the Company now wishes to amend the Plan further;
NOW, THEREFORE, the Plan is hereby amended, effective May 1, 1996 as
follows:
I. Subsections H.29(a), (b), and (c) are added to the Joinder Agreement
to provide as follows:
(a) Effective May 1, 1996, ▇▇▇▇▇ Natural Gas Company is a Related
Company.
(b) Except for purposes of Sections C.l1, 13, and 14 of this Joinder
Agreement, all service with ▇▇▇▇▇ Natural Gas Company prior to May 1, 1996 shall
be treated as if it were employment with the Employer.
(c) The first Entry Date for Employees of ▇▇▇▇▇ Natural Gas Company
will be May 1, 1996.
II. Section 3.3 of the Plan is amended to include the following sentence:
For purposes of Article III, service with ▇▇▇▇▇ Natural Gas Company
prior to May 1, 1996 shall be treated as if it were employment with the
Employer.
IN WITNESS WHEREOF, the Company has authorized its duly appointed officers
to execute this Amendment No. 2 this 1st day of June 1996.
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[SEAL] PETROLEUM DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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President
Attest: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Assistant Secretary
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