Barclays
Global
Investors
Longview Fibre Company
Salaried Savings Plan
and Trust Agreement
Amended and Restated
Effective November 1, 1997
Longview Fibre Company Salaried Savings Plan and Trust
As Amended and Restated Effective November 1, 1997
Longview Fibre Company (the "Company") previously established the Longview
Fibre Company Salaried Savings Plan (the "Plan"), for the exclusive benefit of
eligible employees of the Company and its participating affiliates. The Plan
is intended to constitute a qualified profit sharing plan, as described in Code
section 401(a), which includes a qualified cash or deferred arrangement, as
described in Code section 401(k).
The provisions of the Plan and Trust relating to the Trustee constitute the
trust agreement which is entered into by and between Longview Fibre Company and
Barclays Global Investors, National Association. The Trust is intended to be
tax exempt, as described in Code section 501(a).
The Plan is intended to comply with the qualification requirements of the Small
Business Job Protection Act of 1996 (the "SBJPA") and is intended to comply in
operation therewith. To the extent that the Plan, as set forth below, is
subsequently determined to be insufficient to comply with such requirements and
any regulations issued under the SBJPA, the Plan shall later be amended to so
comply.
The Plan constitutes an amendment and restatement of the Longview Fibre Company
Salaried Savings Plan effective November 1, 1997, which was originally
established effective as of June 1, 1977, and its related trust agreement. The
Plan and Trust were last restated effective November 1, 1990 and amended seven
times thereafter.
The Longview Fibre Company Salaried Savings Plan and Trust, as set forth in
this document, is hereby amended and restated effective as of November 1, 1997.
Date: Dec 26 , 1997 Longview Fibre Company
\s\ ▇.▇. ▇▇▇▇▇▇▇▇
By: ▇.▇. ▇▇▇▇▇▇▇▇
Title: SR VP Finance
The trust agreement set forth in those provisions of the Plan and Trust which
relate to the Trustee is hereby executed.
Date: December 30 , 1997 Barclays Global Investors,
National Association
By ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Inc.
\s\ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Manager of Consulting Services
TABLE OF CONTENTS
1 DEFINITIONS 1
2 ELIGIBILITY 11
2.1 Eligibility 11
2.2 Ineligible Employees 11
2.3 Ineligible, Terminated or Former Participants 11
3 PARTICIPANT CONTRIBUTIONS 12
3.1 Pre-Tax Contribution Election 12
3.2 After-Tax Contribution Election 12
3.3 Changing a Contribution Election 12
3.4 Revoking and Resuming a Contribution Election 12
3.5 Contribution Percentage Limits 13
3.6 Refunds When Contribution Dollar Limit Exceeded 13
3.7 Timing, Posting and Tax Considerations 14
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED
PLANS 15
4.1 Rollover Contributions 15
4.2 Transfers From and To Other Qualified Plans 15
5 EMPLOYER CONTRIBUTIONS 17
5.1 Match Contributions 17
6 ACCOUNTING 18
6.1 Individual Participant Accounting 18
6.2 Sweep Account is Transaction Account 18
6.3 Trade Date Accounting and Investment Cycle 18
6.4 Accounting for Investment Funds 18
6.5 Payment of Fees and Expenses 18
6.6 Accounting for Participant Loans 19
6.7 Error Correction 19
6.8 Participant Statements 20
6.9 Special Accounting During Conversion Period 20
6.10 Accounts for Alternate Payees 20
7 INVESTMENT FUNDS AND ELECTIONS 22
7.1 Investment Funds 22
7.2 Responsibility for Investment Choice 22
7.3 Investment Fund Elections 23
7.4 Default if No Valid Investment Election 23
7.5 Investment Fund Election Change Fees 23
8 VESTING & FORFEITURES 24
8.1 Fully Vested Accounts 24
8.2 Full Vesting Upon Certain Events 24
8.3 Vesting Schedule 24
8.4 Non-Vested Account Balances of Terminated Participants 24
8.5 Forfeitures of Non-Vested Account Balances Upon Certain
Events 25
8.6 Use of Forfeiture Amounts 25
8.7 Rehired Employees 25
9 PARTICIPANT LOANS 27
9.1 Participant Loans Permitted 27
9.2 Limitations on Purpose of Participant Loan 27
9.3 Loan Application, Note and Security 27
9.4 Spousal Consent 27
9.5 Loan Approval 27
9.6 Loan Funding Limits, Account Sources and Funding Order 27
9.7 Maximum Number of Loans 28
9.8 Source and Timing of Loan Funding 28
9.9 Interest Rate 28
9.10 Loan Payment 29
9.11 Loan Payment Hierarchy 29
9.12 Repayment Suspension 29
9.13 Loan Default 29
9.14 Call Feature 30
10 IN-SERVICE WITHDRAWALS 31
10.1 In-Service Withdrawals Permitted 31
10.2 In-Service Withdrawal Application and Notice 31
10.3 Spousal Consent 31
10.4 In-Service Withdrawal Approval 31
10.5 Payment Form and Medium 31
10.6 Source and Timing of In-Service Withdrawal Funding 32
10.7 Hardship Withdrawals 32
10.8 After-Tax Account Withdrawals 34
10.9 Over Age 59.5 Withdrawals 35
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S
REQUIRED BEGINNING DATE 36
11.1 Benefit Information, Notices and Election 36
11.2 Spousal Consent 37
11.3 Payment Form and Medium 37
11.4 Distribution of Small Amounts 37
11.5 Source and Timing of Distribution Funding 37
11.6 Latest Commencement Permitted 38
11.7 Payment Within Life Expectancy 38
11.8 Incidental Benefit Rule 38
11.9 Payment to Beneficiary 38
11.10 Beneficiary Designation 39
12 ADP AND ACP TESTS 40
12.1 Contribution Limitation Definitions 40
12.2 ADP and ACP Tests 42
12.3 Correction of ADP and ACP Tests 43
12.4 Multiple Use Test 44
12.5 Correction of Multiple Use Test 44
12.6 Adjustment for Investment Gain or Loss 45
12.7 Testing Responsibilities and Required Records 45
12.8 Separate Testing 45
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS 46
13.1 "Annual Addition" Defined 46
13.2 Maximum Annual Addition 46
13.3 Avoiding an Excess Annual Addition 46
13.4 Correcting an Excess Annual Addition 46
13.5 Correcting a Multiple Plan Excess 47
13.6 "Defined Benefit Fraction" Defined 47
13.7 "Defined Contribution Fraction" Defined 47
13.8 Combined Plan Limits and Correction 48
14 TOP HEAVY RULES 49
14.1 Top Heavy Definitions 49
14.2 Special Contributions 50
14.3 Special Vesting 51
14.4 Adjustment to Combined Limits for Different Plans 51
15 PLAN ADMINISTRATION 52
15.1 Plan Delineates Authority and Responsibility 52
15.2 Fiduciary Standards 52
15.3 Company is ERISA Plan Administrator 52
15.4 Administrator Duties 53
15.5 Advisors May be Retained 53
15.6 Delegation of Administrator Duties 54
15.7 Committee Operating Rules 54
16 MANAGEMENT OF INVESTMENTS 55
16.1 Trust Agreement 55
16.2 Investment Funds 55
16.3 Authority to Hold Cash 56
16.4 Trustee to Act Upon Instructions 56
16.5 Administrator Has Right to
Vote Registered Investment Company Shares 56
16.6 Custom Fund Investment Management 56
16.7 Master Custom Fund 57
16.8 Authority to Segregate Assets 57
16.9 Investment in Company Stock 58
16.10 Participants Have Right to Vote and Tender Company Stock 58
16.11 Registration and Disclosure for Company Stock 58
17 TRUST ADMINISTRATION 59
17.1 Trustee to Construe Trust 59
17.2 Trustee To Act As Owner of Trust Assets 59
17.3 United States Indicia of Ownership 59
17.4 Tax Withholding and Payment 60
17.5 Trust Accounting 60
17.6 Valuation of Certain Assets 60
17.7 Legal Counsel 61
17.8 Fees and Expenses 61
17.9 Trustee Duties and Limitations 61
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION 62
18.1 Plan Does Not Affect Employment Rights 62
18.2 Compliance With USERRA 62
18.3 Limited Return of Contributions 62
18.4 Assignment and Alienation 63
18.5 Facility of Payment 63
18.6 Reallocation of Lost Participant's Accounts 63
18.7 Suspension of Certain Plan Provisions During Conversion
Period 63
18.8 Suspension of Certain Plan Provisions During Other Periods 64
18.9 Claims Procedure 64
18.10 Construction 65
18.11 Jurisdiction and Severability 65
18.12 Indemnification by Employer 65
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION 66
19.1 Amendment 66
19.2 Merger 66
19.3 Divestitures 66
19.4 Plan Termination and Complete Discontinuance of
Contributions 67
19.5 Amendment and Termination Procedures 67
19.6 Termination of Employer's Participation 68
19.7 Replacement of the Trustee 68
19.8 Final Settlement and Accounting of Trustee 68
APPENDIX A - INVESTMENT FUNDS ▇▇
▇▇▇▇▇▇▇▇ ▇ - PAYMENT OF PLAN FEES AND EXPENSES 70
APPENDIX C - LOAN INTEREST RATE 71
1 DEFINITIONS
When capitalized, the words and phrases below have the following meanings
unless different meanings are clearly required by the context:
0.1 "Account". The records maintained by the Administrator for
purposes of accounting for a Participant's interest in the Plan. "Account" may
refer to one or all of the following accounts which have been created on behalf
of a Participant to hold amounts attributable to specific types of
Contributions under the Plan, contributions previously permitted under the Plan
and/or amounts transferred to the Plan from the Hourly Plan and/or the Branch
Plant Hourly Plan on behalf of a Participant who was formerly eligible to
participate in the Hourly Plan and/or the Branch Plant Hourly Plan:
(a) "Pre-Tax Account". An account created to hold amounts
attributable to Pre-Tax Contributions and amounts transferred from the Hourly
Plan and/or the Branch Plant Hourly Plan designated as "Pre-Tax Account"
amounts thereunder.
(b) "After-Tax Account". An account created to hold amounts
attributable to After-Tax Contributions and amounts transferred from the Hourly
Plan and/or the Branch Plant Hourly Plan designated as "After-Tax Account"
amounts thereunder.
(c) "Rollover Account". An account created to hold amounts
attributable to Rollover Contributions and amounts transferred from the Hourly
Plan and/or the Branch Plant Hourly Plan designated as "Rollover Account"
amounts thereunder.
(d) "Match Account". An account created to hold amounts
attributable to Match Contributions for periods after October 31, 1990 and
amounts transferred from the Hourly Plan and/or the Branch Plant Hourly Plan
designated as "Match Account" amounts thereunder.
(e) "Prior Match Account". An account created to hold amounts
attributable to amounts previously contributed by the Employer for periods
prior to November 1, 1990 on an eligible Participant's behalf based upon the
amount contributed by the Participant under former Plan provisions.
(f) "PAYSOP Account". An account created to hold amounts
attributable to amounts previously contributed by the Employer on an eligible
Participant's behalf and allocated on a pay based formula under former Plan
provisions.
0.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
0.3 "Administrator". The Company or the Committee to whom the Company
has delegated all or a portion of the duties of the Administrator under the
Plan in accordance with Section 15.6 or any delegate of the Committee.
0.4 "ADP" or "Average Deferral Percentage". The percentage calculated
in accordance with Section 12.1.
0.5 "Alternate Payee". Any spouse, former spouse, child or other
dependent (as defined in Code section 152) of a Participant who is recognized
by a domestic relations order as having a right to receive all, or a portion,
of the Participant's Account under the Plan.
0.6 "Beneficiary". The person or persons who is to receive benefits
under the Plan after the death of the Participant pursuant to the "Beneficiary
Designation" paragraph in Section 11.
0.7 "Board". The board of directors of the Company.
0.8 "Branch Plant Hourly Plan". The Longview Fibre Company Branch
Plant Hourly Employees' 401(k) Plan, a qualified profit sharing plan including
a cash or deferred arrangement, originally established March 1, 1993.
0.9 "Break in Service". The fifth anniversary (or sixth anniversary
if absence from employment was due to a Parental Leave) of the date on which a
Participant's employment ends in accordance with Section 1.44 and during which
he or she is not credited with an hour of service.
0.10 "Code". The Internal Revenue Code of 1986, as amended. Reference
to any specific Code section shall include such section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.
0.11 "Committee". If applicable, the committee or committees appointed
by the Administrator to administer the Plan in accordance with Section 15.6.
0.12 "Company". Longview Fibre Company or any successor by merger,
purchase or otherwise.
0.13 "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any corporation with or into
which said corporation may be merged, consolidated or reorganized, or to which
a majority of its assets may be sold.
0.14 "Compensation". The sum of a Participant's Taxable Income and
salary reductions, if any, pursuant to Code section 125, 402(e)(3),
402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or 457.
For purposes of determining benefits under the Plan, Compensation
is limited to $150,000 per Plan Year (as adjusted for cost of living increases
pursuant to Code sections 401(a)(17) and 415(d)).
For purposes of determining HCEs and key employees and for Plan
Years commencing after December 31, 1997, for purposes of Section 13.2,
Compensation for the entire Plan Year shall be used. For purposes of
determining ADP and ACP, Compensation shall be limited to amounts paid to an
Eligible Employee while a Participant.
0.15 "Contribution". An amount contributed to the Plan by the Employer
or an Eligible Employee, and allocated by contribution type to Participants'
Accounts, as described in Section 1.1. Specific types of contribution include:
(a) "Pre-Tax Contribution". An amount contributed by an
eligible Participant in conjunction with his or her Code section 401(k) salary
deferral election which shall be treated as made by the Employer on the
eligible Participant's behalf.
(b) "After-Tax Contribution". An amount contributed by an
eligible Participant on an after-tax basis.
(c) "Rollover Contribution". An amount contributed by an
Eligible Employee which originated from another employer's or an Employer's
qualified plan.
(d) "Match Contribution". An amount contributed by the Employer
on an eligible Participant's behalf based upon the amount contributed by the
eligible Participant.
0.16 "Contribution Dollar Limit". The annual limit placed on each
Participant's Pre-Tax Contributions, which shall be $7,000 per calendar year
(as adjusted for cost of living increases pursuant to Code sections 402(g)(5)
and 415(d)). For purposes of this Section, a Participant's Pre-Tax
Contributions shall include (i) any employer contribution under a qualified
cash or deferred arrangement (as defined in Code section 401(k)) to the extent
not includible in gross income for the taxable year under Code section
402(e)(3) (determined without regard to Code section 402(g)), (ii) any employer
contribution to the extent not includible in gross income for the taxable year
under Code section 402(h)(1)(B) (determined without regard to Code section
402(g)), (iii) any employer contribution to purchase an annuity contract under
Code section 403(b) under a salary reduction agreement (within the meaning of
Code section 3121(a)(5)(D)) and (iv) for calendar years commencing after
December 31, 1996, any elective employer contribution under Code section
408(p)(2)(A)(i).
0.17 "Conversion Period". The period of converting the prior
accounting system of any plan and trust which is merged, in whole or in part,
into the Plan and Trust, to the accounting system described in Section 6.
0.18 "Direct Rollover". An Eligible Rollover Distribution that is paid
by the Plan directly to an Eligible Retirement Plan for the benefit of a
Distributee.
0.19 "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment as evidenced by
presentation of medical evidence satisfactory to the Administrator.
0.20 "Distributee". A Participant, a Beneficiary (if he or she is the
surviving spouse of a Participant) or an Alternate Payee under a QDRO (if he or
she is the spouse or former spouse of a Participant).
0.21 "Effective Date". The date upon which the provisions of this
document become effective. This date is November 1, 1997, unless stated
otherwise. In general, the provisions of this document only apply to
Participants who are Employees on or after the Effective Date. However,
investment and distribution provisions apply to all Participants with Account
balances to be invested or distributed after the Effective Date.
0.22 "Eligible Employee". A salaried Employee of an Employer, except
any Employee who is treated as an Employee because he or she is a Leased
Employee.
An Eligible Employee shall not include any individual who is not
treated as a common-law employee on the Employer's payroll and personnel
records at the time he or she performs services for the Employer, regardless of
whether the Employer's relationship with such individual is later
recharacterized (by an agency, court, mutual agreement or otherwise) as a
employer/employee relationship.
0.23 "Eligible Retirement Plan". An individual retirement account
described in Code section 408(a), an individual retirement annuity described in
Code section 408(b), an annuity plan described in Code section 403(a), or a
qualified trust described in Code section 401(a), that accepts a Distributee's
Eligible Rollover Distribution, except that, if the Distributee is the
surviving spouse of a Participant, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
0.24 "Eligible Rollover Distribution". A distribution of all or any
portion of the balance to the credit of a Distributee, excluding (i) a
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated Beneficiary, or for a specified
period of ten years or more; (ii) a distribution to the extent such
distribution is required under Code section 401(a)(9); and (iii) the portion of
a distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
Employer securities).
0.25 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom any
income for such employment is subject to withholding of income or social
security taxes, or
(b) a Leased Employee.
0.26 "Employer". The Company and any other Related Company which
adopts the Plan with the approval of the Company.
0.27 "ERISA". The Employee Retirement Income Security Act of 1974, as
amended. Reference to any specific ERISA section shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of
any future legislation amending, supplementing or superseding such section.
0.28 "Former Participant". The Plan status of an individual after he
or she is determined to be a Terminated Participant and his or her Account is
distributed or forfeited.
0.29 "HCE" or "Highly Compensated Employee". An Employee described as
a Highly Compensated Employee in Section 12.
0.30 "Hour of Service". Each hour for which an Employee is entitled
to:
(a) payment for the performance of duties for any Related
Company; or
(b) back pay, irrespective of mitigation of damages, by award or
agreement with any Related Company (and these hours shall be credited to the
period to which the award or agreement pertains).
The crediting of Hours of Service shall be in accordance with the
U.S. Department of Labor regulation sections 2530.200b-2 and 3. Actual hours
shall be used whenever an accurate record of hours are maintained for an
Employee. Otherwise, an equivalent number of hours shall be credited for each
payroll period in which the Employee would be credited with at least 1 Hour of
Service. The payroll period equivalencies are 45 hours weekly, 90 hours
biweekly, 95 hours semimonthly and 190 hours monthly.
An Employee's service described in Code section 414(n)(4)(B) shall
be included in the determination of his or her Hours of Service for eligibility
and/or vesting purposes.
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Hours of Service for
eligibility and/or vesting purposes if (1) the Company directs that credit for
such service be granted, or (2) a qualified plan of the predecessor or acquired
company is subsequently maintained by any Related Company.
0.31 "Hourly Plan". The Longview Fibre Company Hourly Employees 401(k)
Plan, a qualified profit sharing plan including a cash or deferred arrangement,
originally established June 3, 1985.
0.32 "Ineligible". The Plan status of an individual who is (1) an
Employee of a Related Company which is not then an Employer, (2) an Employee of
an Employer, but not an Eligible Employee, or (3) not an Employee.
0.33 "Ineligible Participant". The Plan status of a Participant who is
(1) an Employee of a Related Company which is not then an Employer, or (2) an
Employee of an Employer, but not an Eligible Employee.
0.34 "Investment Fund". An investment fund as described in Section
16.2. The Investment Funds authorized by the Administrator to be offered under
the Plan as of the Effective Date are set forth in Appendix A.
0.35 "Leased Employee". An individual, not otherwise an Employee, who,
pursuant to an agreement between a Related Company and a leasing organization,
has performed, on a substantially full-time basis, for a period of at least 12
months, services under the primary direction or control of the Related Company,
unless:
(a) the individual is covered by a money purchase pension plan
maintained by the leasing organization and meeting the requirements of Code
section 414(n)(5)(B), and
(b) such individuals do not constitute more than 20% of all Non-
Highly Compensated Employees of all Related Companies (within the meaning of
Code section 414(n)(5)(C)(ii)).
0.36 "Leave of Absence". A period during which an individual is deemed
to be an Employee, but is absent from active employment, provided that the
absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed
forces and the individual returns to active employment within the period during
which he or she retains employment rights under federal law.
0.37 "Loan Account". The record maintained for purposes of accounting
for a Participant's loan and payments of principal and interest thereon.
0.38 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section 12.
0.39 "Normal Retirement Date". The date of a Participant's 65th
birthday.
0.40 "Owner". A person with an ownership interest in the capital,
profits, outstanding stock or voting power of a Related Company within the
meaning of Code section 318 or 416 (which exclude indirect ownership through a
qualified plan).
0.41 "Parental Leave". The period of absence from work by reason of
the pregnancy of an Employee, the birth of the Employee's child, the placement
of a child with the Employee in connection with the child's adoption, or the
caring for such child immediately after birth or placement as described in Code
section 410(a)(5)(E).
0.42 "Participant". The Plan status of an Eligible Employee after he
or she completes the eligibility requirements and enters the Plan as described
in Section 2.1 and any individual for whom assets have been transferred from a
predecessor plan merged, in whole or in part, with the Plan. An Eligible
Employee who makes a Rollover Contribution prior to completing the eligibility
requirements as described in Section 2.1 shall also be considered a
Participant, except that he or she shall not be considered a Participant for
purposes of Plan provisions related to Contributions, other than a Rollover
Contribution, until he or she completes the eligibility requirements and enters
the Plan as described in Section 2.1. A Participant's participation continues
until his or her employment with all Related Companies ends and his or her
Account is distributed or forfeited.
0.43 "Pay". All cash compensation paid to an Eligible Employee by an
Employer while he or she is a Participant during the current period. Pay
excludes reimbursements or other expense allowances, cash and non-cash fringe
benefits, moving expenses, deferred compensation and welfare benefits.
Pay is neither increased by any salary credit or decreased by any
salary reduction pursuant to Code sections 125 or 402(e)(3). Pay is limited to
$150,000 per Plan Year (as adjusted for cost of living increases pursuant to
Code sections 401(a)(17) and 415(d)).
0.44 "Period of Employment". The period beginning on the date an
Employee first performs an hour of service and ending on the date his or her
employment ends. Employment ends on the date the Employee quits, is
discharged, retires or dies or (if earlier) the first anniversary of his or her
absence for any other reason. The period of absence starting with the date an
Employee's employment ends and ending on the date he or she next performs an
hour of service is (1) included in his or her Period of Employment if the
period of absence does not exceed one year, and (2) excluded if such period
exceeds one year.
An Employee's service described in Code section 414(n)(4)(B) shall
be included in the determination of his or her Period of Employment for
eligibility and/or vesting purposes.
An Employee's service with a predecessor or acquired company shall
only be counted in the determination of his or her Period of Employment for
eligibility and/or vesting purposes if (1) the Company directs that credit for
such service be granted, or (2) a qualified plan of the predecessor or acquired
company is subsequently maintained by any Related Company.
0.45 "Plan". The Longview Fibre Company Salaried Savings Plan set
forth in this document, as from time to time amended.
0.46 "Plan Year". The annual accounting period of the Plan and Trust
which ends on each October 31.
0.47 "QDRO". A domestic relations order which the Administrator has
determined to be a qualified domestic relations order within the meaning of
Code section 414(p).
0.48 "Rehab Plan". The Plan of Rehabilitation of MBL Life Assurance
Corporation.
0.49 "Related Company". With respect to any Employer, that Employer
and any corporation, trade or business which is, together with that Employer, a
member of the same controlled group of corporations, a trade or business under
common control, or an affiliated service group within the meaning of Code
sections 414(b), (c), (m) or (o), except that for purposes of Section 13
"within the meaning of Code sections 414(b), (c), (m) or (o), as modified by
Code section 415(h)" shall be substituted for the preceding reference to
"within the meaning of Code sections 414(b), (c), (m) or (o)".
0.50 "Required Beginning Date". The latest date benefit payments shall
commence to a Participant. Such date shall mean the April 1 that next follows
the calendar year in which the Participant attains age 70.5, except with regard
to a Participant who attained age 70.5 before January 1, 1988 and who is not 5%
Owner, such date shall mean the April 1 that next follows the later of (i) the
calendar year in which the Participant attained age 70.5, or (ii) the calendar
year in which the Participant terminates employment with all Related Companies.
A Participant shall be considered a 5% Owner for this purpose if
such Participant is a 5% Owner as defined in Code section 416(i) (determined in
accordance with Code section 416 but without regard to whether the Plan is top-
heavy) at any time during the Plan Year ending with or within the calendar year
in which the Participant attains age 66.5 or in any subsequent Plan Year.
0.51 "Restricted Amounts". The Plan status of the portion of a
Participant's Account invested in the Mutual Benefit GIC Fund during any period
such Fund is not available to be liquidated for purposes of investment
transfers, loans, in-service withdrawals or distributions (other than in
accordance with the Rehab Plan).
0.52 "Settlement Date". For each Trade Date, the Trustee's next
business day.
0.53 "Spousal Consent". The written consent given by a spouse to a
Participant's Beneficiary designation. The spouse's consent must acknowledge
the effect on the spouse of the Participant's designation, and be duly
witnessed by a Plan representative or notary public. Spousal Consent shall be
valid only with respect to the spouse who signs the Spousal Consent and only
for the particular choice made by the Participant which requires Spousal
Consent. A Participant may revoke (without Spousal Consent) a prior
designation that required Spousal Consent at any time before payments begin.
Spousal Consent also means a determination by the Administrator that there is
no spouse, the spouse cannot be located, or such other circumstances as may be
established under Code section 417(a)(2)(B).
0.54 "Sweep Account". The subsidiary Account for each Participant
through which all transactions are processed, which is invested in interest
bearing deposits (which may include interest bearing deposits of the Trustee)
and/or money market type assets or funds.
0.55 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the next Trade Date.
0.56 "Taxable Income". Compensation in the amount reported by the
Employer or a Related Company as "Wages, tips, other compensation" on Form W-2,
or any successor method of reporting under Code section 6041(d).
0.57 "Terminated Participant". The Plan status of a Participant who is
not an Employee and with respect to whom the Administrator has reported to the
Trustee that the Participant's employment has terminated with all Related
Companies.
0.58 "Trade Date". Each day the Investment Funds are valued, which is
normally every day the assets of such Investment Funds are traded.
0.59 "Transition Account". An account consisting of the sum of the
sub-accounts of individual non-vested Account balances of Terminated
Participants.
0.60 "Trust". The legal entity created by those provisions of this
document which relate to the Trustee. The Trust is part of the Plan and holds
the Plan assets which are comprised of the aggregate of Participants' Accounts,
any unallocated funds invested in interest bearing deposits (which may include
interest bearing deposits of the Trustee) and/or money market type assets or
funds, pending allocation to Participants' Accounts or disbursement to pay Plan
fees and expenses.
0.61 "Trustee". Barclays Global Investors, National Association.
0.62 "USERRA". The Uniformed Services Employment and Reemployment
Rights Act of 1994, as amended.
0.63 "Year of Vesting Service". A 12-month Period of Employment.
Years of Vesting Service shall include service credited prior to
June 1, 1977.
2 ELIGIBILITY
2.1 Eligibility
All Participants as of November 1, 1997 shall continue their
eligibility to participate. Each other Eligible Employee shall become a
Participant on the first day of the next month after the date he or she
completes a 12-consecutive month eligibility period for which he or she is
credited with at least 870 Hours of Service. The initial eligibility period
begins on the date an Employee first performs an Hour of Service. Subsequent
eligibility periods begin with the start of each Plan Year beginning after the
first Hour of Service is performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements, but
is Ineligible at the time participation would otherwise begin (if he or she
were not Ineligible), he or she shall become a Participant on the first
subsequent date on which he or she is an Eligible Employee.
2.3 Ineligible, Terminated or Former Participants2.3 Ineligible,
Terminated or Former Participants2.3 Ineligible, Terminated or Former
Participants
An Ineligible, Terminated or Former Participant may not make or
share in any Contributions, other than such Contributions due to be made on his
or her behalf after the date he or she became an Ineligible, Terminated or
Former Participant for periods prior to such date, nor may an Ineligible or
Terminated Participant be eligible for a new Plan loan (except as described in
Section 9.1), during the period he or she is an Ineligible or Terminated
Participant, but he or she shall continue to participate for all other
purposes. An Ineligible, Terminated or Former Participant shall automatically
become an active Participant on the date he or she again becomes an Eligible
Employee.
3 PARTICIPANT CONTRIBUTIONS
3.1 Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to
reduce his or her Pay by an amount which does not exceed the Contribution
Dollar Limit or the limits described in the Contribution Percentage Limits
paragraph of this Section 3, and have such amount contributed to the Plan by
the Employer as a Pre-Tax Contribution. The election shall be made in such
manner and with such advance notice as prescribed by the Administrator and may
be limited to a whole percentage of Pay. In no event shall an Employee's Pre-
Tax Contributions under the Plan and comparable contributions to all other
plans, contracts or arrangements of all Related Companies exceed the
Contribution Dollar Limit for the Employee's taxable year beginning in the Plan
Year.
3.2 After-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect to
make After-Tax Contributions to the Plan in an amount which does not exceed the
limits described in the Contribution Percentage Limits paragraph of this
Section 3. The election shall be made in such manner and with such advance
notice as prescribed by the Administrator and may be limited to a whole
percentage of Pay.
3.3 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or her
Contribution election at any time in such manner and with such advance notice
as prescribed by the Administrator, and such election change shall be effective
with the first payroll paid after such date. A Participant who has changed his
or her Contribution election shall be required to wait at least six months
before he or she may again change his or her Contribution election.
A Participant's Contribution election made as a percentage of Pay
shall automatically apply to Pay increases or decreases.
3.4 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at any
time in such manner and with such advance notice as prescribed by the
Administrator, and such revocation shall be effective with the first payroll
paid after such date.
A Participant who has revoked his or her Contribution election
shall be required to wait at least six months before he or she may resume
Contributions to the Plan. Thereafter, a Participant who is an Eligible
Employee may resume Contributions by making a new election at any time in such
manner and with such advance notice as prescribed by the Administrator, and
such election shall be effective with the first payroll paid after such date.
3.5 Contribution Percentage Limits
The Administrator may establish and change from time to time, in
writing, without the necessity of amending the Plan and Trust, the separate
minimum, if applicable, and maximum Pre-Tax and After-Tax Contribution
percentages, and/or a maximum combined Pre-Tax and After-Tax Contribution
percentage, prospectively or retrospectively (for the current Plan Year), for
all Participants. In addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it deems necessary to
satisfy the tests described in Section 12. As of the Effective Date, the
minimum Pre-Tax and After-Tax Contribution percentages are 1%, and the maximum
Contribution percentages are:
Contribution
Type
Highly
Compensated
Employees
All Other
Participants
Pre-Tax
After-Tax
Sum of Both
10%
7%
12%
10%
7%
12%
Irrespective of the limits that may be established by the
Administrator in accordance with the paragraph above, in no event shall the
Contributions made by or on behalf of a Participant for a Plan Year exceed the
maximum allowable under Code section 415.
3.6 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Pre-Tax Contributions for a calendar year
to the Plan and comparable contributions to any other qualified defined
contribution plan in excess of the Contribution Dollar Limit may notify the
Administrator in writing by the following March 1 (or as late as April 14 if
allowed by the Administrator) that an excess has occurred. In this event, the
amount of the excess specified by the Participant, adjusted for investment gain
or loss, shall be refunded to him or her by the April 15 following the year of
deferral and shall not be included as an Annual Addition (as defined in Section
13.1) under Code section 415 for the year contributed. The excess amounts
shall first be taken from unmatched Pre-Tax Contributions and then from matched
Pre-Tax Contributions. Any Match Contributions attributable to refunded excess
Pre-Tax Contributions as described in this Section, adjusted for investment
gain or loss, shall be forfeited and used as described in Section 8. Refunds
and forfeitures shall not include investment gain or loss for the period
between the end of the applicable calendar year and the date of distribution or
forfeiture.
3.7 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover Contributions,
may only be made through payroll deduction. Such amounts shall be paid to the
Trustee in cash and posted to each Participant's Account(s) as soon as such
amounts can reasonably be separated from the Employer's general assets and
balanced against the specific amount made on behalf of each Participant. In no
event, however, shall such amounts be paid to the Trustee more than 90 days
after the date amounts are deducted from a Participant's Pay, except that
effective February 3, 1997, "15 business days following the end of the month
that includes the date amounts are deducted from a Participant's Pay (or as
that maximum period may be otherwise extended by ERISA)" shall be substituted
for the preceding reference to "90 days after the date amounts are deducted
from a Participant's Pay". Pre-Tax Contributions shall be treated as
Contributions made by an Employer in determining tax deductions under Code
section 404(a).
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
4.1 Rollover Contributions
The Administrator may authorize the Trustee to accept a Rollover
Contribution in cash, directly from an Eligible Employee or as a Direct
Rollover from another qualified plan on behalf of the Eligible Employee, even
if he or she is not yet a Participant. The Employee shall be responsible for
providing satisfactory evidence, in such manner as prescribed by the
Administrator, that such Rollover Contribution qualifies as a rollover
contribution, within the meaning of Code section 402(c) or 408(d)(3)(A)(ii).
Such amounts received directly from an Eligible Employee must be paid to the
Trustee in cash within 60 days after the date received by the Eligible Employee
from a qualified plan or conduit individual retirement account. Rollover
Contributions shall be posted to the Eligible Employee's Rollover Account as of
the date received by the Trustee.
If the Administrator later determines that an amount contributed
pursuant to the above paragraph did not in fact qualify as a rollover
contribution, within the meaning of Code section 402(c) or 408(d)(3)(A)(ii),
the balance credited to the Participant's Rollover Account shall immediately be
(1) segregated from all other Plan assets, (2) treated as a nonqualified trust
established by and for the benefit of the Participant, and (3) distributed to
the Participant. Any such amount shall be deemed never to have been a part of
the Plan.
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets in
cash or in kind directly from another qualified plan or to transfer assets in
cash or in kind directly to another qualified plan; provided that receipt of a
transfer shall not be directed if:
(a) any amounts are not exempted by Code section 401(a)(11)(B)
from the annuity requirements of Code section 417 unless the Plan complies with
such requirements; or
(b) any amounts include benefits protected by Code section
411(d)(6) which would not be preserved under applicable Plan provisions.
The Trustee may refuse to receive any such transfer if:
(a) the Trustee finds the in kind assets unacceptable; or
(b) instructions for posting amounts to Participants' Accounts
are incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee. To the extent a receipt
of a transfer includes Participant loans, such loans shall continue in effect
subject to the terms and conditions in effect as of the date of the transfer.
Such transfers from and to other qualified plans may be for the
purpose of transferring assets from the Branch Plant Hourly Plan and/or the
Hourly Plan representing assets attributable to the vested and non-vested
account balances of participants thereunder who are no longer eligible to
participate in the Branch Plant Hourly Plan and/or the Hourly Plan and are
eligible to participate in the Plan (which amounts shall then become subject to
the Plan's vesting schedule which schedule is the same as the vesting schedule
in the Branch Plant Hourly Plan and the Hourly Plan) or for the purpose of
transferring assets from the Plan to the Branch Plant Hourly Plan and/or the
Hourly Plan representing assets attributable to the vested and non-vested
Account balances of Participants hereunder who are no longer eligible to
participate in the Plan and who are eligible to participate in the Branch Plant
Hourly Plan or the Hourly Plan (which amounts shall then become subject to the
Branch Plant Hourly Plan's or the Hourly Plan's vesting schedule, respectively,
each of which is the same as the vesting schedule in the Plan).
5 EMPLOYER CONTRIBUTIONS
5.1 Match Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer shall make Match
Contributions, as described in the following Allocation Method paragraph, on
behalf of each Participant who contributed during the period.
(b) Allocation Method. The Match Contributions (including any
forfeiture amounts applied as Match Contributions in accordance with Section 8)
for each period shall total 60% of each eligible Participant's Pre-Tax
Contributions for the period, provided that no Match Contributions (and
forfeiture amounts) shall be made based upon a Participant's Contributions in
excess of 5% of his or her Pay. The Employer may change the 60% matching rate
or the 5% of considered Pay to any other percentages, including 0%, generally
by notifying eligible Participants in sufficient time to adjust their
Contribution elections prior to the start of the period for which the new
percentages apply.
(c) Timing, Medium and Posting. The Employer shall make each
period's Match Contribution in cash as soon as administratively feasible, and
for purposes of deducting such Contribution, not later than the Employer's
federal tax filing date, including extensions. Such amounts shall be paid to
the Trustee and posted to each Participant's Match Account once the total Match
Contribution received has been balanced against the specific amount to be
credited to each Participant's Match Account.
6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of Accounts for
each Participant in order to reflect transactions both by type of Account and
investment medium. Financial transactions shall be accounted for at the
individual Account level by posting each transaction to the appropriate Account
of each affected Participant. Participant Account values shall be maintained in
shares for the Investment Funds and in dollars for the Sweep and Loan Accounts.
At any point in time, the Account value shall be determined using the most
recent Trade Date values provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected Participant's Sweep
Account. Any amount held in the Sweep Account shall be credited with interest
up until the date on which it is removed from the Sweep Account.
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each Trade
Date. For any transaction to be processed as of a Trade Date, the Trustee must
receive instructions for the transaction by the Sweep Date. Such instructions
shall apply to amounts held in the Account on that Sweep Date. Financial
transactions of the Investment Funds shall be posted to Participants' Accounts
as of the Trade Date, based upon the Trade Date values provided by the Trustee,
and settled on the Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in shares.
The Trustee is responsible for determining the share values of each Investment
Fund as of each Trade Date. To the extent an Investment Fund is comprised of
collective investment funds offered by the Trustee or any other entity
authorized to offer collective investment funds, the share values shall be
determined in accordance with the rules governing such collective investment
funds, which are incorporated herein by reference. All other share values shall
be determined by the Trustee. The share value of each Investment Fund shall be
based on the fair market value of its underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to Account
maintenance, transaction and Investment Fund management and maintenance, set
forth below, are paid by the Employer directly, or indirectly, through
forfeiture amounts as directed by the Administrator, such fees and expenses
shall be paid as set forth below.
(a) Account Maintenance: Account maintenance fees and expenses,
may include but are not limited to, administrative, Trustee, government annual
report preparation, audit, legal, nondiscrimination testing and fees for any
other special services. Account maintenance fees shall be charged to
Participants on a per Participant basis provided that no fee shall reduce a
Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may include but
are not limited to, periodic installment payment, Investment Fund election
change and loan fees. Transaction fees shall be charged to the Participant's
Account involved in the transaction provided that no fee shall reduce a
Participant's Account balance below zero.
(c) Investment Fund Management and Maintenance: Management and
maintenance fees and expenses related to the Investment Funds shall be charged
at the Investment Fund level and reflected in the net gain or loss of each
Investment Fund.
The Company may determine that the Employers pay a lower portion
of the fees and expenses allocable to the Accounts of Participants who are no
longer Employees or who are not Beneficiaries, unless doing so would result in
discrimination prohibited under Code section 401(a)(4) or a significant
detriment prohibited by Code section 411(a)(11). As of the Effective Date, a
breakdown of which Plan fees and expenses shall generally be borne by the Trust
(and charged to individual Participants' Accounts or charged at the Investment
Fund level and reflected in the net gain or loss of each Investment Fund) and
those that shall be paid by the Employer is set forth in Appendix B, which may
be changed from time to time by the Company, in writing, without the necessity
of amending the Plan and Trust.
The Trustee shall have the authority to pay any such fees and
expenses, which remain unpaid by the Employer for 60 days, from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account of the
Participant and accounted for in dollars as an earmarked asset of the borrowing
Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's Account balance with
the amount that would be credited to the Account had no error or omission been
made. Funds necessary for any such restoration shall be provided through
payment made by the Employer, or by the Trustee to the extent the error or
omission is attributable to actions or inactions of the Trustee, or if the
restoration involves an Account holding amounts contributed by an Employer, the
Administrator may direct the Trustee to use forfeiture amounts.
6.8 Participant Statements
The Administrator shall provide Participants with statements of
their Accounts as soon after the end of each quarter of the Plan Year as
administratively feasible. With regard to a Terminated Participant, such
statements shall not include the portion, if any, of his or her non-vested
Account balance maintained in the Transition Account.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable accounting
methods in performing their respective duties during any Conversion Period.
This includes, but is not limited to, the method for allocating net investment
gains or losses and the extent, if any, to which contributions received by and
distributions paid from the Trust during this period share in such allocation.
6.10 Accounts for Alternate Payees
A separate Account shall be established for an Alternate Payee
entitled to any portion of a Participant's Account under a QDRO as of the date
and in accordance with the directions specified in the QDRO. In addition, a
separate Account may be established during the period of time the
Administrator, a court of competent jurisdiction or other appropriate person is
determining whether a domestic relations order qualifies as a QDRO. Such a
separate Account shall be valued and accounted for in the same manner as any
other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so provides, the
portion of a Participant's Account payable to an Alternate Payee may be
distributed, in a form permissible under Section 11, to the Alternate Payee at
any time beginning as soon as practicable after the QDRO determination is made,
regardless of whether the Participant is entitled to a distribution from the
Plan at such time. The Alternate Payee shall be provided the notice prescribed
by Code section 402(f).
(b) Participant Loans. Except to the extent required by law, an
Alternate Payee, on whose behalf a separate Account has been established, shall
not be entitled to borrow from such Account. If a QDRO specifies that the
Alternate Payee is entitled to any portion of the Account of a Participant who
has an outstanding loan balance, all outstanding loans shall continue to be
held in the Participant's Account and shall not be divided between the
Participant's and Alternate Payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an Alternate Payee and has not yet been distributed,
the Alternate Payee may direct the investment of such Account in the same
manner as if he or she were a Participant.
7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants' Sweep and Loan Accounts and any
unallocated funds invested in interest bearing deposits (which may include
interest bearing deposits of the Trustee) and/or money market type assets or
funds, pending allocation to Participants' Accounts or disbursement to pay Plan
fees and expenses and the Transition Account, the Trust shall be maintained in
various Investment Funds. The Administrator shall select the Investment Funds
offered to Participants and may change the number or composition of the
Investment Funds, subject to the terms and conditions agreed to with the
Trustee. As of the Effective Date, a list of the Investment Funds offered
under the Plan is set forth in Appendix A, which may be changed from time to
time by the Administrator, in writing, and as agreed to by the Trustee, without
the necessity of amending the Plan and Trust.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific Investment Fund, which
maximum, if any, as of the Effective Date is set forth in Appendix A, which may
be changed from time to time by the Administrator, in writing, without the
necessity of amending the Plan and Trust.
7.2 Responsibility for Investment Choice
Each Participant shall direct the investment of all of his or her
Accounts except for his or her PAYSOP Account which shall be entirely invested
in the Investment Fund specified by the Administrator, which Investment Fund as
of the Effective Date is set forth in Appendix A.
Each Participant shall be solely responsible for the selection of
his or her Investment Fund choices. No fiduciary with respect to the Plan is
empowered to advise a Participant as to the manner in which his or her Accounts
are to be invested, and the fact that an Investment Fund is offered shall not
be construed to be a recommendation for investment.
Notwithstanding, a Terminated Participant shall not direct the
investment of his or her non-vested Account balance. A Terminated
Participant's non-vested Account balance shall be held in the Transition
Account and invested in interest bearing deposits (which may include interest
bearing deposits of the Trustee) and/or money market type assets or funds.
During any Conversion Period, Trust assets may be held in any
investment vehicle permitted by the Plan, as directed by the Administrator,
irrespective of prior Participant investment elections.
7.3 Investment Fund Elections
A Participant shall provide his or her initial investment election
upon becoming a Participant and may change his or her investment election at
any time in accordance with procedures established by the Administrator and the
Trustee. A Participant shall make his or her investment election in any
combination of one or any number of the Investment Funds offered in accordance
with the procedures established by the Administrator and Trustee. Investment
elections received by the Trustee by the Sweep Date shall be effective on the
following Trade Date.
7.4 Default if No Valid Investment Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which is not yet held in
an Investment Fund and for which no valid investment election is on file. The
Investment Fund specified as of the Effective Date is set forth in Appendix A,
which may be changed from time to time by the Administrator, in writing,
without the necessity of amending the Plan and Trust.
7.5 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes in excess of a
specified number per year as determined by the Administrator.
8 VESTING & FORFEITURES
8.1 Fully Vested Accounts
A Participant shall be fully vested in these Accounts at all
times:
Pre-Tax Account
After-Tax Account
Rollover Account
Prior Match Account
PAYSOP Account
8.2 Full Vesting Upon Certain Events
A Participant's entire Account shall become fully vested once he
or she has attained his or her Normal Retirement Date while an Employee or upon
his or her terminating employment with all Related Companies due to his or her
Disability or death.
8.3 Vesting Schedule
In addition to the vesting provided above, a Participant's Match
Account shall become vested in accordance with the following schedule:
Years of Vesting
Service
Vested
Percentage
Less than 5
5 or more
0%
100%
If this vesting schedule is changed, the vested percentage for
each Participant shall not be less than his or her vested percentage determined
as of the last day prior to this change, and for any Participant with at least
three Years of Vesting Service when the schedule is changed, his or her vested
percentage shall be determined using the more favorable vesting schedule.
8.4 Non-Vested Account Balances of Terminated Participants
The non-vested balance of a Terminated Participant's Account shall
be deposited to the Transition Account as of the Settlement Date following the
Sweep Date on which the Administrator has reported to the Trustee that the
Participant's employment has terminated with all Related Companies and shall be
maintained as a sub-account in the Transition Account. The Trustee shall
maintain records necessary to identify each Terminated Participant's non-vested
Account balance at least annually and as of the earlier of the date the
Administrator reports to the Trustee that the Terminated Participant is again
an Employee or the date the Terminated Participant incurs a forfeitable event
described in this Section.
If a Terminated Participant again becomes an Employee before
incurring a forfeitable event described in this Section, his or her non-vested
Account balance shall no longer be maintained as a sub-account in the
Transition Account and shall be recombined with his or her remaining Account
balance. The non-vested Account balance shall be credited to the Investment
Funds based upon the Participant's current investment election for new
Contributions.
8.5 Forfeitures of Non-Vested Account Balances Upon Certain Events
A Terminated Participant shall forfeit his or her non-vested
Account balance as soon as administratively feasible after the earliest of the
date he or she:
(a) is determined to be a Terminated Participant, if his or her
vested Account balance is zero;
(b) receives a complete distribution of his or her vested
Account balance; or
(c) incurs a Break in Service.
8.6 Use of Forfeiture Amounts
Forfeiture amounts shall be used to restore Accounts, to pay Plan
fees and expenses and to reduce future Match Contributions to be made as
directed by the Administrator.
8.7 Rehired Employees
(a) Service Restoration. If a former Employee is rehired before
incurring a Break in Service, or after incurring a Break in Service if (1) he
or she had a vested interest in his or her Accounts derived from Contributions
made by an Employer, or (2) the length of his or her break does not equal or
exceed his or her pre-break service, all Periods of Employment credited when
his or her employment last terminated shall be counted in determining his or
her vested interest. Otherwise, his or her Periods of Employment credited when
his or her employment last terminated shall not be counted in determining his
or her vested interest.
(b) Account Restoration. If a former Employee again becomes an
Employee before he or she incurs a Break in Service, but after he or she incurs
a forfeitable event as described in this Section, the amount forfeited after
his or her employment last terminated shall be restored to his or her Account
as if such Employee had repaid any vested portion of his or her Account from
which such amount was forfeited. The restoration shall include the interest
earned on such amount from the date deposited to the Transition Account until
the date the restoration amount is restored. The restoration amount shall come
from forfeiture amounts to the extent possible, and any additional amount
needed shall be contributed by the Employer. His or her vested interest in the
restored Account shall then be equal to:
V% times (AB + D) - D
where:
V% = current vested percentage
AB = current Account balance
D = amount previously distributed from Account and deemed
repaid
9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms and
conditions set forth in this Section, except that a loan shall not be permitted
to a Participant who is no longer an Employee or to a Beneficiary or an
Alternate Payee, unless such Participant, Beneficiary or Alternate Payee is
otherwise a party in interest (as defined in ERISA section 3(14)).
9.2 Limitations on Purpose of Participant Loan
A Participant may only borrow to satisfy a financial need
determined to be a hardship as defined by the Administrator and communicated to
Participants.
9.3 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and with
such advance notice as prescribed by the Administrator. Each loan shall be
evidenced by a promissory note, secured only by the portion of the
Participant's Account from which the loan is made, and the Plan shall have a
lien on this portion of his or her Account.
9.4 Spousal Consent
A Participant is not required to obtain Spousal Consent in order
to borrow from his or her Account under the Plan.
9.5 Loan Approval
The Administrator, or the Trustee, if otherwise authorized by the
Administrator and agreed to by the Trustee, is responsible for determining that
a loan request conforms to the requirements described in this Section and
granting such request.
9.6 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as
determined as of the Sweep Date the loan is processed and shall be funded from
the Participant's Accounts as follows:
(a) Plan Minimum Limit. The minimum amount for any loan is
$1,000.
(b) Plan Maximum Limit, Account Sources and Funding Order.
Subject to the legal limit described in (c) below, the maximum a Participant
may borrow, including the aggregate outstanding balances of existing Plan
loans, is 50% of the following of the Participant's Accounts which are fully
vested (excluding any Restricted Amounts) in the priority order as follows:
Pre-Tax Account
Match Account
Prior Match Account
Rollover Account
After-Tax Account
(c) Legal Maximum Limit. The maximum a Participant may borrow,
including the aggregate outstanding balances of existing Plan loans, is 50% of
his or her vested Account balance, not to exceed $50,000. However, the $50,000
maximum is reduced by the Participant's highest aggregate outstanding Plan loan
balance during the 12-month period ending on the day before the Sweep Date as
of which the loan is made. For purposes of this paragraph, the qualified plans
of all Related Companies shall be treated as though they are part of the Plan
to the extent it would decrease the maximum loan amount.
9.7 Maximum Number of Loans
A Participant may have only one loan outstanding at any given
time.
9.8 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets of
his or her own Account. The available assets shall be determined first by
Account and then within each Account used for funding a loan, amounts shall
first be taken from the Sweep Account and then taken by Investment Fund in
direct proportion to the market value of the Participant's interest in each
Investment Fund as of the Trade Date on which the loan is processed. A
Participant's investment in the Mutual Benefit GIC Fund shall be excluded for
this purpose during any period such Fund is not available to be liquidated for
this purpose.
The loan shall be funded on the Settlement Date following the
Trade Date as of which the loan is processed. The Trustee shall make payment
to the Participant as soon thereafter as administratively feasible.
9.9 Interest Rate
The interest rate charged on Participant loans shall be a fixed
reasonable rate of interest, determined from time to time by the Administrator,
which provides the Plan with a return commensurate with the prevailing interest
rate charged by persons in the business of lending money for loans which would
be made under similar circumstances. As of the Effective Date, the interest
rate is determined as set forth in Appendix C, which may be changed from time
to time by the Administrator, in writing, without the necessity of amending the
Plan and Trust.
9.10 Loan Payment
Substantially level amortization shall be required of each loan
with payments made at least monthly, generally through payroll deduction.
Loans may be prepaid in full or in part at any time. The Participant may
choose the loan repayment period, not to exceed five years, except that the
repayment period may be for any period not to exceed 15 years if the purpose of
the loan is to acquire the Participant's principal residence.
9.11 Loan Payment Hierarchy
Loan principal payments shall be credited to the Participant's
Accounts in the inverse of the order used to fund the loan. Loan interest
shall be credited to the Participant's Accounts in direct proportion to the
principal payment. Loan payments are credited to the Investment Funds based
upon the Participant's current investment election for new Contributions.
9.12 Repayment Suspension
The Administrator may agree to a suspension of loan payments for
up to 12 months for a Participant who is on a Leave of Absence without pay.
During the suspension period, interest shall continue to accrue on the
outstanding loan balance. At the expiration of the suspension period all
outstanding loan payments and accrued interest thereon shall be due unless
otherwise agreed upon by the Administrator.
9.13 Loan Default
A loan is treated as in default if a scheduled loan payment is not
made at the time required. A Participant shall then have a grace period to
cure the default before it becomes final. Such grace period shall be for a
period that does not extend beyond the last day of the calendar quarter
following the calendar quarter in which the scheduled loan payment was due or
such lesser or greater maximum period as may later be authorized by Code
section 72(p).
In the event a default is not cured within the grace period, the
Administrator may direct the Trustee to report the outstanding principal
balance of the loan and accrued interest thereon as a taxable distribution to
the Participant. As soon as a Plan withdrawal or distribution to such
Participant would otherwise be permitted, the Administrator may instruct the
Trustee to execute upon its security interest in the Participant's Account by
distributing the note to the Participant.
9.14 Call Feature
The Administrator shall have the right to call any Participant
loan once a Participant's employment with all Related Companies has terminated,
unless he or she is otherwise a party in interest (as defined in ERISA section
3(14)), or if the Plan is terminated.
10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee are
permitted pursuant to the terms and conditions set forth in this Section and
pursuant to the terms and conditions set forth in Section 11 with regard to an
in-service withdrawal made in accordance with a Participant's Required
Beginning Date.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in such
manner and with such advance notice as prescribed by the Administrator. The
Participant shall be provided the notice prescribed by Code section 402(f).
Code sections 401(a)(11) and 417 do not apply to in-service
withdrawals under the Plan. An in-service withdrawal may commence less than 30
days after the aforementioned notice is provided, if:
(a) the Participant is clearly informed that he or she has the
right to a period of at least 30 days after receipt of such notice to consider
his or her option to elect or not elect a Direct Rollover for all or a portion,
if any, of his or her in-service withdrawal which constitutes an Eligible
Rollover Distribution; and
(b) the Participant after receiving such notice, affirmatively
elects a Direct Rollover for all or a portion, if any, of his or her in-service
withdrawal which constitutes an Eligible Rollover Distribution or alternatively
elects to have all or a portion made payable directly to him or her, thereby
not electing a Direct Rollover for all or a portion thereof.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in order
to receive an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized by the
Administrator and agreed to by the Trustee, is responsible for determining
whether an in-service withdrawal request conforms to the requirements described
in this Section and granting such request.
10.5 Payment Form and Medium
The form of payment for an in-service withdrawal shall be a single
lump sum and payment shall be made in cash, except that a Participant may elect
that payment be made in the form of whole shares of Company Stock and cash in
lieu of fractional shares to the extent that such withdrawal is funded from the
Company Stock Fund. With regard to the portion of an in-service withdrawal
representing an Eligible Rollover Distribution, a Participant may elect a
Direct Rollover for all or a portion of such amount.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made solely
from the assets of his or her own Account and shall be based on the Account
values as of the Trade Date the in-service withdrawal is processed. The
available assets shall be determined first by Account and then within each
Account used for funding an in-service withdrawal, amounts shall first be taken
from the Sweep Account and then taken by Investment Fund in direct proportion
to the market value of the Participant's interest in each Investment Fund
(which excludes his or her Loan Account balance) as of the Trade Date on which
the in-service withdrawal is processed. A Participant's investment in the
Mutual Benefit GIC Fund shall be excluded for this purpose during any period
such Fund is not available to be liquidated for this purpose.
The in-service withdrawal shall be funded on the Settlement Date
following the Trade Date as of which the in-service withdrawal is processed.
The Trustee shall make payment to the Participant or on behalf of the
Participant as soon thereafter as administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may request
the withdrawal of up to the amount necessary to satisfy a financial need
including amounts necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the withdrawal. Only requests
for withdrawals (1) on account of a Participant's "Deemed Financial Need" or
"Demonstrated Financial Need", and (2) which are "Deemed Necessary" or
"Demonstrated as Necessary" to satisfy the financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy financial
need relating to:
(1) the payment of unreimbursed medical care expenses
(described under Code section 213(d)) incurred (or to be incurred) by the
Employee, his or her spouse or dependents (as defined in Code section 152);
(2) the purchase (excluding mortgage payments) of the
Employee's principal residence;
(3) the payment of unreimbursed tuition, related
educational fees and room and board for up to the next 12 months of post-
secondary education for the Employee, his or her spouse or dependents (as
defined in Code section 152);
(4) the payment of funeral expenses of an Employee's
family member;
(5) the payment of amounts necessary for the Employee to
prevent losing his or her principal residence through eviction or foreclosure
on the mortgage; or
(6) any other circumstance specifically permitted under
Code section 401(k)(2)(B)(i)(IV).
(c) "Demonstrated Financial Need". A determination by the
Administrator that an immediate and heavy financial need exists relating to:
(1) a sudden and unexpected illness or accident to the
Employee or his or her spouse or dependents;
(2) the loss, due to casualty, of the Employee's property
other than nonessential property (such as a boat or a television); or
(3) some other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Employee.
(d) "Deemed Necessary". A withdrawal is "Deemed Necessary" to
satisfy the financial need only if the withdrawal amount does not exceed the
financial need and all of these conditions are met:
(1) the Employee has obtained all possible withdrawals
(other than hardship withdrawals) and nontaxable loans available from the Plan
and all other plans maintained by Related Companies;
(2) the Administrator shall suspend the Employee from
making any contributions to the Plan and all other qualified and nonqualified
plans of deferred compensation and all stock option or stock purchase plans
maintained by Related Companies for 12 months from the date the withdrawal
payment is made; and
(3) the Administrator shall reduce the Contribution
Dollar Limit for the Employee with regard to the Plan and all other plans
maintained by Related Companies, for the calendar year next following the
calendar year of the withdrawal by the amount of the Employee's Pre-Tax
Contributions for the calendar year of the withdrawal.
(e) "Demonstrated as Necessary". A withdrawal is "Demonstrated
as Necessary" to satisfy the financial need only if the withdrawal amount does
not exceed the financial need, the Employee represents that he or she is unable
to relieve the financial need (without causing further hardship) by doing any
or all of the following and the Administrator does not have actual knowledge to
the contrary:
(1) receiving any reimbursement or compensation from
insurance or otherwise;
(2) reasonably liquidating his or her assets and the
assets of his or her spouse or minor children that are reasonably available to
the Employee;
(3) ceasing his or her contributions to the Plan;
(4) obtaining other withdrawals and nontaxable loans
available from the Plan, plans maintained by Related Companies and plans
maintained by any other employer; and
(5) obtaining loans from commercial sources on reasonable
commercial terms.
(f) Account Sources and Funding Order. All available amounts
must first be withdrawn from a Participant's After-Tax Account (excluding any
Restricted Amounts). The remaining withdrawal amount shall come from the
following of the Participant's fully vested Accounts (excluding any Restricted
Amounts), in the priority order as follows:
Rollover Account
Match Account
Prior Match Account
Pre-Tax Account
The amount that may be withdrawn from a Participant's Pre-
Tax Account shall not include any earnings credited after December 31, 1988.
(g) Minimum Amount. There is no minimum amount for a hardship
withdrawal.
(h) Permitted Frequency. There is no restriction on the number
of hardship withdrawals permitted to a Participant.
(i) Suspension from Further Contributions. Upon making a
hardship withdrawal, a Participant may not make additional Pre-Tax or After-Tax
Contributions (or additional contributions to all other qualified and
nonqualified plans of deferred compensation and all stock option or stock
purchase plans maintained by Related Companies), if his or her hardship
withdrawal was "Deemed Necessary" for a period of 12 months from the date the
withdrawal payment is made.
10.8 After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may make an
After-Tax Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from a Participant's After-Tax Account (excluding any Restricted Amounts).
(c) Minimum Amount. There is no minimum amount for an After-Tax
Account withdrawal.
(d) Permitted Frequency. There is no restriction on the number
of After-Tax Account withdrawals permitted to a Participant.
(e) Suspension from Further Contributions. Upon making an
After-Tax Account withdrawal, a Participant may not make additional After-Tax
Contributions for a period of six months from the date the withdrawal payment
is made.
10.9 Over Age 59.5 Withdrawals
(a) Requirements. A Participant who is an Employee and over age
59.5 may make an Over Age 59.5 withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from the following of the Participant's fully vested Accounts (excluding
any Restricted Amounts), in the priority order as follows, except that the
Participant may instead choose to have amounts taken from his or her After-Tax
Account first:
Rollover Account
Pre-Tax Account
Match Account
Prior Match Account
After-Tax Account
(c) Minimum Amount. There is no minimum amount for an Over Age
59.5 withdrawal.
(d) Permitted Frequency. There is no restriction on the number
of Over Age 59.5 withdrawals permitted to a Participant.
(e) Suspension from Further Contributions. An Over Age 59.5
withdrawal shall not affect a Participant's ability to make or be eligible to
receive further Contributions.
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A PARTICIPANT'S
REQUIRED BEGINNING DATE
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his or her
death, shall be provided with information regarding all optional times and
forms of distribution available under the Plan, including the notices
prescribed by Code sections 402(f) and 411(a)(11). Subject to the other
requirements of this Section, a Participant, or his or her Beneficiary in the
case of his or her death, may elect, in such manner and with such advance
notice as prescribed by the Administrator, to have his or her vested Account
balance (excluding any Restricted Amounts unless otherwise permitted by the
Rehab Plan) paid to him or her beginning upon any Settlement Date following the
Participant's termination of employment with all Related Companies and a
reasonable period of time during which the Administrator shall process, and
inform the Trustee of, the Participant's termination or, if earlier, at the
time of the Participant's Required Beginning Date.
Notwithstanding, if a Participant's termination of employment with
all Related Companies does not constitute a separation from service for
purposes of Code section 401(k)(2)(B)(i)(I) or otherwise constitute an event
set forth under Code section 401(k)(10)(A)(ii) or (iii) as described in Section
19.3, the portion of a Participant's Account subject to the distribution rules
of Code section 401(k) may not be distributed until such time as he or she
separates from service for purposes of Code section 401(k)(2)(B)(i)(I) or, if
earlier, upon such other event as described in Code section 401(k)(2)(B) and as
provided for in the Plan.
Code sections 401(a)(11) and 417 do not apply to distributions
under the Plan. A distribution may commence less than 30 days after the
aforementioned notices are provided, if:
(a) the Participant is clearly informed that he or she has the
right to a period of at least 30 days after receipt of such notices to consider
the decision as to whether to elect a distribution and if so to elect a
particular form of distribution and to elect or not elect a Direct Rollover for
all or a portion, if any, of his or her distribution which constitutes an
Eligible Rollover Distribution; and
(b) the Participant after receiving such notices, affirmatively
elects a distribution and a Direct Rollover for all or a portion, if any, of
his or her distribution which constitutes an Eligible Rollover Distribution or
alternatively elects to have all or a portion made payable directly to him or
her, thereby not electing a Direct Rollover for all or a portion thereof.
11.2 Spousal Consent
A Participant is not required to obtain Spousal Consent in order
to receive a distribution under the Plan.
11.3 Payment Form and Medium
Except to the extent otherwise provided by Section 11.4, a
Participant may elect to be paid in any of these forms:
(a) a single lump sum;
(b) a partial payment, limited to four per Plan Year;
(c) quarterly periodic installments over a period not to exceed
the life expectancy of the Participant and his or her Beneficiary; or
(d) with regard to Restricted Amounts, in accordance with
procedures established by the Administrator and the Trustee, such forms (other
than an annuity) as are permitted under the Rehab Plan.
Distributions shall be made in cash, except to the extent a
distribution consists of a loan call as described in Section 9. Alternatively,
a Participant may elect that a distribution be made in the form of whole shares
of Company Stock and cash in lieu of fractional shares to the extent the
distribution consists of amounts from the Company Stock Fund. With regard to
the portion of a distribution representing an Eligible Rollover Distribution, a
Distributee may elect a Direct Rollover for all or a portion of such amount.
11.4 Distribution of Small Amounts
If after a Participant's employment with all Related Companies
ends, the Participant's vested Account balance is $5,000 or less, and if at the
time of any prior in-service withdrawal or distribution the Participant's
vested Account balance did not exceed $5,000, the Participant's benefit shall
be paid as a single lump sum as soon as administratively feasible in accordance
with procedures prescribed by the Administrator.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from the
assets of his or her own Account and shall be based on the Account values as of
the Trade Date the distribution is processed. The available assets shall be
determined first by Account and then within each Account used for funding a
distribution, amounts shall first be taken from the Sweep Account and then
taken by Investment Fund in direct proportion to the market value of the
Participant's interest in each Investment Fund as of the Trade Date on which
the distribution is processed. A Participant's investment in the Mutual
Benefit GIC Fund shall be excluded for this purpose during any period such Fund
is not available to be liquidated for this purpose.
11.6 Latest Commencement Permitted
In addition to any other Plan requirements and unless a
Participant elects otherwise, his or her benefit payments shall begin not later
than 60 days after the end of the Plan Year in which he or she attains his or
her Normal Retirement Date or retires, whichever is later. However, if the
amount of the payment or the location of the Participant (after a reasonable
search) cannot be ascertained by that deadline, payment shall be made no later
than 60 days after the earliest date on which such amount or location is
ascertained but in no event later than the Participant's Required Beginning
Date. A Participant's failure to elect in such manner as prescribed by the
Administrator to have his or her vested Account balance paid to him or her,
shall be deemed an election by the Participant to defer his or her distribution
but in no event shall his or her benefit payments commence later than his or
her Required Beginning Date.
If benefit payments cannot begin at the time required because the
location of the Participant cannot be ascertained (after a reasonable search),
the Administrator may, at any time thereafter, treat such person's Account as
forfeited subject to the provisions of Section 18.6.
11.7 Payment Within Life Expectancy
The Participant's payment election must be consistent with the
requirement of Code section 401(a)(9) that all payments are to be completed
within a period not to exceed the lives or the joint and last survivor life
expectancy of the Participant and his or her Beneficiary. The life
expectancies of a Participant and his or her Beneficiary may not be recomputed
annually.
11.8 Incidental Benefit Rule
The Participant's payment election must be consistent with the
requirement that, if the Participant's spouse is not his or her sole primary
Beneficiary, the minimum annual distribution for each calendar year, beginning
with the calendar year preceding the calendar year that includes the
Participant's Required Beginning Date, shall not be less than the quotient
obtained by dividing (a) the Participant's vested Account balance as of the
last Trade Date of the preceding year by (b) the applicable divisor as
determined under the incidental benefit requirements of Code section 401(a)(9).
11.9 Payment to Beneficiary
Payment to a Beneficiary must either (i) be completed by the end
of the calendar year that contains the fifth anniversary of the Participant's
death or (ii) begin by the end of the calendar year that contains the first
anniversary of the Participant's death and be completed within the period of
the Beneficiary's life or life expectancy, except that:
(a) If the Participant dies after his or her Required Beginning
Date, payment to his or her Beneficiary must be made at least as rapidly as
provided in the Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments need
not begin until the later of (i) the end of the calendar year that includes the
first anniversary of the Participant's death, or (ii) the end of the calendar
year in which the Participant would have attained age 70.5 and must be
completed within the spouse's life or life expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (i) before the Participant's Required Beginning Date and (ii)
before payments have begun to the spouse, the spouse shall be treated as the
Participant in applying these rules.
11.10 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the Participant's remaining Plan
interest at the time of his or her death. The designation may be changed at
any time. However, a Participant's spouse shall be the sole primary
Beneficiary unless the designation includes Spousal Consent for another
Beneficiary. If no proper designation is in effect at the time of a
Participant's death or if the Beneficiary does not survive the Participant, the
Beneficiary shall be the Participant's surviving spouse or, if there is no
surviving spouse, the Participant's estate.
12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12 (where
a definition is contained in both Sections 1 and 12, for purposes of Section 12
the Section 12 definition shall be controlling):
(a) "ACP" or "Average Contribution Percentage". The Average
Percentage calculated using Contributions allocated to Participants as of a
date within the Plan Year.
(b) "ACP Test". The determination of whether the ACP is in
compliance with the Basic or Alternative Limitation for a Plan Year (as defined
in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to Participants as of a date
within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in
compliance with the Basic or Alternative Limitation for a Plan Year (as defined
in Section 12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified group. The calculated
percentage refers to either the "Deferrals" or "Contributions" (as defined in
this Section) made on each Participant's behalf for the Plan Year, divided by
his or her Compensation for the portion of the Plan Year in which he or she was
an Eligible Employee while a Participant. (Pre-Tax Contributions to the Plan
or comparable contributions to plans of Related Companies which must be
refunded solely because they exceed the Contribution Dollar Limit are included
in the percentage for the HCE Group but not for the NHCE Group.)
(f) "Contributions" shall include Match and After-Tax
Contributions. In addition, Contributions may include Pre-Tax Contributions,
but only to the extent that (1) the Administrator elects to use them, (2) they
are not used or counted in the ADP Test, and (3) they otherwise satisfy the
requirements as prescribed under Code section 401(m) permitting treatment as
Contributions for purposes of the ACP Test.
(g) "Deferrals" shall include Pre-Tax Contributions.
(h) "HCE" or "Highly Compensated Employee". With respect to all
Related Companies, an Employee who (in accordance with Code section 414(q)):
(1) Was a more than 5% Owner (within the meaning of Code
section 414(q)(2)) at any time during the Plan Year or the preceding Plan Year;
or
(2) Received Compensation during the preceding Plan Year
in excess of $80,000 (as adjusted for such Year pursuant to Code sections
414(q)(1) and 415(d)) or, if the Company elects for such preceding Plan Year,
"in excess of $80,000 (as adjusted for such Year pursuant to Code sections
414(q)(1) and 415(d)) and was a member of the "top-paid group" (within the
meaning of Code section 414(q)(3)) for such preceding Plan Year" shall be
substituted for the preceding reference to "in excess of $80,000 (as adjusted
for such Year pursuant to Code sections 414(q)(1) and 415(d))".
A former Employee shall be treated as an HCE if (1) such
former Employee was an HCE when he or she separated from service, or (2) such
former Employee was an HCE in service at any time after attaining age 55.
The determination of who is an HCE and the determination of
the number and identity of Employees in the top-paid group shall be made in
accordance with Code section 414(q).
(i) "HCE Group" and "NHCE Group". With respect to all Related
Companies, the respective group of HCEs and NHCEs who are eligible to have
amounts contributed on their behalf for the Plan Year, including Employees who
would be eligible but for their election not to participate or to contribute,
or because their Pay is greater than zero but does not exceed a stated minimum.
For Plan Years commencing after December 31, 1998, with respect to all Related
Companies, if the Plan permits participation prior to an Eligible Employee's
satisfaction of the minimum age and service requirements of Code section
410(a)(1)(A), Eligible Employees who have not met the minimum age and service
requirements of Code section 410(a)(1)(A) may be excluded in the determination
of the NHCE Group, but not in the determination of the HCE Group, for purposes
of (i) the ADP Test, if Code section 410(b)(4)(B) is applied in determining
whether the 401(k) portion of the Plan meets the requirements of Code section
410(b), or (ii) the ACP Test, if Code 410(b)(4)(B) is applied in determining
whether the 401(m) portion of the Plan meets the requirements of Code section
410(b).
(1) If the Related Companies maintain two or more plans
which are subject to the ADP or ACP Test and are considered as one plan for
purposes of Code sections 401(a)(4) or 410(b), all such plans shall be
aggregated and treated as one plan for purposes of meeting the ADP and ACP
Tests, provided that the plans may only be aggregated if they have the same
plan year.
(2) If an HCE is covered by more than one cash or
deferred arrangement, or more than one arrangement permitting employee or
matching contributions, maintained by the Related Companies, all such plans
shall be aggregated and treated as one plan (other than those plans that may
not be permissively aggregated) for purposes of calculating the separate
percentage for the HCE which is used in the determination of the Average
Percentage. For purposes of the preceding sentence, if such plans have
different plan years, the plans are aggregated with respect to the plan years
ending with or within the same calendar year.
(j) "Multiple Use Test". The test described in Section 12.4
which a Plan must meet where the Alternative Limitation (described in Section
12.2) is used to meet both the ADP and ACP Tests.
(k) "NHCE" or "Non-Highly Compensated Employee". An Employee
who is not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must meet
either the Basic or Alternative Limitation when compared to the respective
preceding Plan Year's ADP and ACP for the preceding Plan Year's NHCE Group,
defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may not
exceed 1.25 times the NHCE Group Average Percentage.
(b) Alternative Limitation. The HCE Group Average Percentage is
limited by reference to the NHCE Group Average Percentage as follows:
If the NHCE Group
Average Percentage
is:
Then the Maximum HCE
Group Average Percentage is:
Less than 2%
2% to 8%
More than 8%
2 times NHCE Group Average %
NHCE Group Average % plus 2%
NA - Basic Limitation applies
Alternatively, the Company may elect to use the Plan Year's ADP
for the NHCE Group for the Plan Year and/or the Plan Year's ACP for the NHCE
Group for the Plan Year. If such election is made, such election may not be
changed except as provided by the Code.
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a maximum percentage to
be used in place of the calculated percentage for all HCEs that would reduce
the ADP and/or ACP for the HCE Group by a sufficient amount to meet the ADP and
ACP Tests.
With regard to each HCE whose Deferral percentage and/or
Contribution percentage is in excess of the maximum percentage, a dollar amount
of excess Deferrals and/or excess Contributions shall then be determined by (i)
subtracting the product of such maximum percentage for the ADP and the HCE's
Compensation from the HCE's actual Deferrals and (ii) subtracting the product
of such maximum percentage for the ACP and the HCE's Compensation from the
HCE's actual Contributions. Such amounts shall then be aggregated to determine
the total dollar amount of excess Deferrals and/or excess Contributions. ADP
and/or ACP corrections shall be made in accordance with the leveling method as
described below.
(a) ADP Correction. The HCE with the highest Deferral dollar
amount shall have his or her Deferral dollar amount reduced in an amount equal
to the lesser of the dollar amount of excess Deferrals for all HCEs or the
dollar amount that would cause his or her Deferral dollar amount to equal that
of the HCE with the next highest Deferral dollar amount. The process shall be
repeated until the total of the Deferral dollar amount reductions equals the
dollar amount of excess Deferrals for all HCEs.
To the extent an HCE's Deferrals were determined to be
reduced as described in the paragraph above, Pre-Tax Contributions shall, by
the end of the next Plan Year, be refunded to the HCE, except that such amount
to be refunded shall be reduced by Pre-Tax Contributions previously refunded
because they exceeded the Contribution Dollar Limit. The excess amounts shall
first be taken from unmatched Pre-Tax Contributions and then from matched Pre-
Tax Contributions. Any Match Contributions attributable to refunded excess
Pre-Tax Contributions as described in this Section, adjusted for investment
gain or loss for the Plan Year to which the excess Pre-Tax Contributions
relate, shall be forfeited and used as described in Section 8.
(b) ACP Correction. The HCE with the highest Contribution
dollar amount shall have his or her Contribution dollar amount reduced in an
amount equal to the lesser of the dollar amount of excess Contributions for all
HCEs or the dollar amount that would cause his or her Contribution dollar
amount to equal that of the HCE with the next highest Contribution dollar
amount. The process shall be repeated until the total of the Contribution
dollar amount reductions equals the dollar amount of excess Contributions for
all HCEs.
To the extent an HCE's Contributions were determined to be
reduced as described in the paragraph above, Contributions shall, by the end of
the next Plan Year, be refunded to the HCE to the extent vested, and forfeited
and used as described in Section 8 to the extent such amounts were not vested,
as of the end of the Plan Year being tested. The excess amounts shall first be
taken from After-Tax Contributions and then from Match Contributions.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined, and with regard to excess
Contributions, allocated by type of Contribution, within each Account from
which amounts are refunded or forfeited, amounts shall first be taken from the
Sweep Account and then taken by Investment Fund in direct proportion to the
market value of the Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) as of the Trade Date on which the
correction is processed. A Participant's investment in the Mutual Benefit GIC
Fund shall be excluded for this purpose during any period such Fund is not
available to be liquidated for this purpose.
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is used to
meet both the ADP and ACP Tests, the ADP and ACP for the HCE Group must also
comply with the requirements of Code section 401(m)(9). Such Code section
requires that the sum of the ADP and ACP for the HCE Group (as determined after
any corrections needed to meet the ADP and ACP Tests have been made) not exceed
the sum (which produces the most favorable result) of:
(a) the Basic Limitation (defined in Section 12.2) applied to
either the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE Group
percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator shall
determine a maximum percentage to be used in place of the calculated percentage
for all HCEs that would reduce either or both the ADP or ACP for the HCE Group
by a sufficient amount to meet the multiple use limit. Any excess shall be
corrected in the same manner that excess Deferrals or Contributions are
corrected.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant or forfeited in accordance with this Section 12 shall be adjusted
for investment gain or loss. Refunds or forfeitures shall not include
investment gain or loss for the period between the end of the applicable Plan
Year and the date of distribution or forfeiture.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the Plan
meets the ADP Test, the ACP Test and the Multiple Use Test, and that the
Contribution Dollar Limit is not exceeded. The Administrator shall maintain
records which are sufficient to demonstrate that the ADP Test, the ACP Test and
the Multiple Use Test, have been met for each Plan Year for at least as long as
the Employer's corresponding tax year is open to audit.
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs, and
the performance of the ADP Test, the ACP Test and the Multiple Use Test, and
any corrective action resulting therefrom, shall be conducted separately with
regard to the Employees of each Employer (and its Related Companies) that is
not a Related Company with respect to the other Employer(s).
(b) Collective Bargaining Units: The performance of the ADP
Test, and if applicable, the ACP Test and the Multiple Use Test, and any
corrective action resulting therefrom, shall be conducted separately with
regard to Employees who are eligible to participate in the Plan as a result of
a collective bargaining agreement.
In addition, testing may be conducted separately, at the
discretion of the Administrator and to the extent permitted under Treasury
regulations, with regard to any group of Employees for whom separate testing is
permissible under such regulations.
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum for a Plan Year of all (i) contributions (excluding
rollover contributions) and forfeitures allocated to the Participant's Account
and his or her account in all other defined contribution plans maintained by
any Related Company, (ii) amounts allocated to the Participant's individual
medical account (within the meaning of Code section 415(l)(2)) which is part of
a defined benefit plan maintained by any Related Company, and (iii) if the
Participant is a key employee (within the meaning of Code section 419A(d)(3))
for the applicable or any prior Plan Year, amounts attributable to post-
retirement medical benefits allocated to his or her separate account under a
welfare benefit fund (within the meaning of Code section 419(e)) maintained by
any Related Company. The Plan Year refers to the year to which the allocation
pertains, regardless of when it was allocated. The Plan Year shall be the Code
section 415 limitation year.
13.2 Maximum Annual Addition
A Participant's Annual Addition for any Plan Year shall not exceed
the lesser of (i) 25% of his or her Taxable Income or (ii) $30,000 (as adjusted
for cost of living increases pursuant to Code section 415(d)); provided,
however, that clause (i) shall not apply to Annual Additions described in
clauses (ii) and (iii) of Section 13.1 and except that for Plan Years
commencing before November 1, 1995, "or one-quarter of the dollar limitation in
effect under Code section 415(b)(1)(A)" shall be substituted for the preceding
reference to "(as adjusted for cost of living increases pursuant to Code
section 415(d))" and for Plan Years commencing after December 31, 1997,
"Compensation" shall be substituted for the preceding reference to "Taxable
Income".
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual Addition for such year,
Contributions to be made for the remainder of the Plan Year shall be limited to
the amount needed for each affected Participant to receive the maximum Annual
Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a Participant's
Account (resulting from a reasonable error in determining a Participant's
compensation or the maximum permissible amount of his or her elective deferrals
(within the meaning of Code section 402(g)(3)), or other facts and
circumstances acceptable to the Internal Revenue Service), the excess amount
(adjusted to reflect investment gains) shall first be returned to the
Participant to the extent of his or her After-Tax Contributions, and then to
the extent of his or her Pre-Tax Contributions (however to the extent Pre-Tax
Contributions were matched, the applicable Match Contributions shall be
forfeited in proportion to the returned matched Pre-Tax Contributions) and the
remaining excess, if any, shall be forfeited by the Participant and together
used as described in Section 8.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess Annual
Addition, received allocations to more than one defined contribution plan, the
excess shall be corrected by reducing the Annual Addition to the Plan only
after all possible reductions have been made to the other defined contribution
plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the greater of 125% of the
"protected current accrued benefit" or the normal limit which is the lesser of
(i) 125% of the dollar limitation in effect under Code section 415(b)(1)(A) for
the Plan Year or (ii) 140% of the amount which may be taken into account under
Code section 415(b)(1)(B) for the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit provided by
the plan determined pursuant to Code section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined benefit
plan in existence (1) on July 1, 1982, shall be the accrued annual benefit
provided for under Public Law 97-248, section 235(g)(4), as amended, or (2) on
May 6, 1986, shall be the accrued annual benefit provided for under Public Law
99-514, section 1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the Participant's
Annual Addition for each Plan Year to date (including the annual additions to
his or her account under any other defined contribution plan maintained by any
Related Company) and the denominator is the sum of the "annual amounts" for
each year in which the Participant has performed service with a Related
Company. The "annual amount" for any Plan Year is the lesser of (i) 125% of
the dollar limitation in effect under Code section 415(c)(1)(A) (determined
without regard to subsection (c)(6)) for the Plan Year or (ii) 140% of the
amount which may be taken into account under Code section 415(c)(1)(B) for the
Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code
section 415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-248,
section 235(g)(3), as amended, or Public Law 99-514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
The sum of a Participant's Defined Benefit Fraction and Defined
Contribution Fraction for any Plan Year may not exceed 1.0. If the combined
fraction exceeds 1.0 for any Plan Year, the Participant's benefit under the
Plan (to the extent it has not been distributed) shall be limited so that the
combined fraction does not exceed 1.0 before any defined benefit limits shall
be enforced.
For Plan Years commencing after December 31, 1999, the provisions
of the preceding paragraph shall no longer be effective.
14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each qualified
plan of the Related Companies (1) in which a Key Employee is a participant or
was a participant during the determination period (regardless of whether such
plan has terminated), or (2) which enables another plan in the group to meet
the requirements of Code sections 401(a)(4) or 410(b). The Administrator may
also treat any other qualified plan of the Related Companies as part of the
group if the resulting group would continue to meet the requirements of Code
sections 401(a)(4) and 410(b) with such plan being taken into account.
(b) "Determination Date". For any Plan Year, the last Trade
Date of the preceding Plan Year or, in the case of the Plan's first Plan Year,
the last Trade Date of that Plan Year.
(c) "Key Employee". A current or former Employee (or his or her
Beneficiary) who at any time during the five year period ending on the
Determination Date was:
(1) an officer of a Related Company whose Compensation
(i) exceeds 50% of the amount in effect under Code section 415(b)(1)(A) and
(ii) places him or her within the following highest paid group of officers:
Number of Employees
not Excluded Under Code
Section 414(q)(5)
Number of
Highest Paid
Officers Included
Less than 30
30 to 500
More than 500
3
10% of the number of
Employees not excluded
under Code section
414(q)(8)
50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds
$150,000, or
(4) a more than 0.5% Owner who is among the 10 Employees
owning the largest interest in a Related Company and whose Compensation exceeds
the amount in effect under Code section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date of (1)
an Employee's Account, (2) the present value of his or her other accrued
benefits provided by all qualified plans within the Aggregation Group, and (3)
the aggregate distributions made within the five year period ending on such
Date. For this purpose, the present value of the Employee's accrued benefit in
a defined benefit plan shall be determined by the method that is used for
benefit accrual purposes under all such plans maintained by the Related
Companies or, if there is no such single method used under all such plans, as
if the benefit accrues no more rapidly than the slowest rate permitted by the
fractional accrual rule in Code section 411(b)(1)(C). Plan Benefits shall
exclude rollover contributions and similar transfers made after December 31,
1983 as provided in Code section 416(g)(4)(A).
(e) "Top Heavy". The Plan's status when the Plan Benefits of
Key Employees account for more than 60% of the Plan Benefits of all Employees
who have performed services at any time during the five year period ending on
the Determination Date. The Plan Benefits of Employees who were, but are no
longer, Key Employees (because they have not been an officer or Owner during
the five year period), are excluded in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in
which the Plan is Top Heavy, the Employer shall not allow any contributions
(other than a Rollover Contribution from a plan maintained by a non Related
Company) to be made by or on behalf of any Key Employee unless the Employer
makes a contribution (other than contributions made by an Employer in
accordance with a Participant's salary deferral election or contributions made
by an Employer based upon the amount contributed by a Participant) on behalf of
all Participants who were Eligible Employees as of the last day of the Plan
Year in an amount equal to at least 3% of each such Participant's Taxable
Income.
(b) Overriding Minimum Benefit. Notwithstanding, contributions
shall be permitted on behalf of Key Employees if the Employer also maintains a
defined benefit plan which automatically provides a benefit which satisfies the
Code section 416(c)(1) minimum benefit requirements, including the adjustment
provided in Code section 416(h)(2)(A), if applicable. If the Plan is part of
an Aggregation Group under which a Key Employee is receiving a benefit and no
minimum contribution is provided under any other plan, a minimum contribution
of at least 3% of Taxable Income shall be provided to the Participants
specified in the preceding paragraph, except that if the Aggregation Group
consists of a top heavy defined benefit plan "5%" shall be substituted for the
preceding reference to "3%" with regard to the Participants specified in the
preceding paragraph who are also covered under the defined benefit plan.
14.3 Special Vesting
If the Plan becomes Top Heavy after the Effective Date, vesting
for all Employees shall thereafter be accelerated to the extent the following
vesting schedule produces a greater vested percentage for the Employee than the
normal vesting schedule at any relevant time:
Years of Vesting
Service
Vested
Percentage
Less than 3
3 or more
0%
100%
14.4 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100% shall be
substituted for 125% in determining the Defined Benefit Fraction and the
Defined Contribution Fraction. For Plan Years commencing after December 31,
1999, the provisions of the preceding sentence shall no longer be effective.
15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator and the
Trustee, as applicable, whose specific duties are delineated in the Plan and
Trust. In addition, Plan fiduciaries also include any other person to whom
fiduciary duties or responsibilities are delegated with respect to the Plan.
Any person or group may serve in more than one fiduciary capacity with respect
to the Plan. To the extent permitted under ERISA section 405, no fiduciary
shall be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with the Plan and
Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence that
a prudent person acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying reasonable expenses of
administering the Plan;
(d) diversify Plan investments, to the extent such fiduciary is
responsible for directing the investment of Plan assets, so as to minimize the
risk of large losses, unless under the circumstances it is clearly prudent not
to do so; and
(e) treat similarly situated Participants and Beneficiaries in a
uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the administrator of the Plan (within the meaning
of ERISA section 3(16)) and is responsible for compliance with all reporting
and disclosure requirements, except those that are explicitly the
responsibility of the Trustee under applicable law. The Administrator shall
have any necessary authority to carry out such functions through the actions of
the duly appointed officers of the Company.
15.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe the Plan and Trust, other than the provisions which relate to the
Trustee, and to do all things necessary or convenient to effect the intent and
purposes thereof, whether or not such powers are specifically set forth in the
Plan and Trust. Actions taken in good faith by the Administrator shall be
conclusive and binding on all interested parties, and shall be given the
maximum possible deference allowed by law. In addition to the duties listed
elsewhere in the Plan and Trust, the Administrator's authority shall include,
but not be limited to, the discretionary authority to:
(a) determine who is eligible to participate, if a contribution
qualifies as a rollover contribution, the allocation of Contributions, and the
eligibility for loans, in-service withdrawals and distributions;
(b) provide each Participant with a summary plan description no
later than 90 days after he or she has become a Participant (or such other
period permitted under ERISA section 104(b)(1)), as well as informing each
Participant of any material modification to the Plan in a timely manner;
(c) make a copy of the following documents available to
Participants during normal work hours: the Plan and Trust (including subsequent
amendments), all annual and interim reports of the Trustee related to the
entire Plan, the latest annual report and the summary plan description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased Participant's interest based upon
such proof and evidence as it deems necessary;
(e) establish and review at least annually a funding policy
bearing in mind both the short-run and long-run needs and goals of the Plan and
to the extent Participants may direct their own investments, the funding policy
shall focus on which Investment Funds are available for Participants to use;
and
(f) adjudicate claims pursuant to the claims procedure described
in Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors (including
attorneys, accountants, actuaries, consultants, record keepers, investment
counsel and administrative assistants) as it considers necessary to assist it
in the performance of its duties. The Administrator shall also comply with the
bonding requirements of ERISA section 412.
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, may appoint a Committee
to administer the Plan on its behalf. The Company shall provide the Trustee
with the names and specimen signatures of any persons authorized to serve as
Committee members and act as or on its behalf. Any Committee member appointed
by the Company shall serve at the pleasure of the Company, but may resign by
written notice to the Company. Committee members shall serve without
compensation from the Plan for such services. Except to the extent that the
Company otherwise provides, any delegation of duties to the Committee shall
carry with it the full discretionary authority of the Administrator to complete
such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company to
the Committee may be done by a majority of its members. The majority may be
expressed by a vote at a meeting or in writing without a meeting, and a
majority action shall be equivalent to an action of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such
notice, place and times as it determines necessary to conduct its functions
properly.
(c) Reliance by Trustee. The Committee may authorize one or
more of its members to execute documents on its behalf and may authorize one or
more of its members or other individuals who are not members to give written
direction to the Trustee in the performance of its duties. The Committee shall
provide such authorization in writing to the Trustee with the name and specimen
signatures of any person authorized to act on its behalf. The Trustee shall
accept such direction and rely upon it until notified in writing that the
Committee has revoked the authorization to give such direction. The Trustee
shall not be deemed to be on notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in the performance of its
duties, or the duties delegated to and by the Committee until notified in
writing.
16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of the Plan and Trust which relate to the
Trustee, for use in providing Plan benefits and paying Plan fees and expenses
not paid directly by the Employer. Plan benefits shall be drawn solely from
the Trust and paid by the Trustee as directed by the Administrator.
Notwithstanding, the Company may appoint, with the approval of the Trustee,
another trustee to hold and administer Plan assets which do not meet the
requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the
Trustee to invest Trust assets in one or more Investment Funds. The number and
composition of Investment Funds may be changed from time to time, without the
necessity of amending the Plan and Trust. The Trustee may establish reasonable
limits on the number of Investment Funds as well as the acceptable assets for
any such Investment Fund. Each of the Investment Funds may be comprised of any
of the following:
(a) shares of a registered investment company, whether or not
the Trustee or any of its affiliates is an advisor to, or other service
provider to, such company;
(b) collective investment funds maintained by the Trustee, or
any other fiduciary to the Plan, which are available for investment by trusts
which are qualified under Code sections 401(a) and 501(a);
(c) individual equity and fixed income securities which are
readily tradable on the open market;
(d) synthetic guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company and/or synthetic guaranteed
investment contracts and bank investment contracts issued by a bank;
(e) interest bearing deposits (which may include interest
bearing deposits of the Trustee); and
(f) Company Stock.
Any Investment Fund assets invested in a collective investment
fund, shall be subject to all the provisions of the instruments establishing
and governing such fund. These instruments, including any subsequent
amendments, are incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient deposit or money market
type assets in each Investment Fund to handle the Investment Fund's liquidity
and disbursement needs. Each Participant's and Beneficiary's Sweep Account,
which is used to hold assets pending investment or disbursement, shall consist
of interest bearing deposits (which may include interest bearing deposits of
the Trustee) and/or money market type assets or funds.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in the
Investment Funds as soon as practicable after such instructions are received
from the Administrator, Participants or Beneficiaries. Such instructions shall
remain in effect until changed by the Administrator, Participants or
Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment Company
Shares
The Administrator shall be entitled to vote proxies or exercise
any shareholder rights relating to shares held on behalf of the Plan in a
registered investment company. Notwithstanding, the authority to vote proxies
and exercise shareholder rights related to such shares held in a Custom Fund is
vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the Trustee,
an investment manager for any Investment Fund established by the Trustee solely
for Participants of the Plan and, subject to Section 16.7, any other qualified
plan of the Company or a Related Company (a "Custom Fund"). The investment
manager may be the Administrator, Trustee or an investment manager pursuant to
ERISA section 3(38). The Administrator shall advise the Trustee in writing of
the appointment of an investment manager and shall cause the investment manager
to acknowledge to the Trustee in writing that the investment manager is a
fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the Trustee,
shall be established for a Custom Fund. If a Custom Fund consists solely of
collective investment funds or shares of a registered investment company (and
sufficient deposit or money market type assets to handle the Custom Fund's
liquidity and disbursement needs), its underlying instruments shall constitute
the guidelines.
(b) Authority of Investment Manager. The investment manager of
a Custom Fund shall have the authority to vote or execute proxies, exercise
shareholder rights, manage, acquire, and dispose of Trust assets.
Notwithstanding, the authority to vote proxies and exercise shareholder rights
related to shares of Company Stock held in a Custom Fund is vested as provided
otherwise in Section 16.
(c) Custody and Trade Settlement. Unless otherwise agreed to by
the Trustee, the Trustee shall maintain custody of all Custom Fund assets and
be responsible for the settlement of all Custom Fund trades. For purposes of
this Section, shares of a collective investment fund, shares of a registered
investment company and synthetic guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company and/or synthetic guaranteed
investment contracts and bank investment contracts issued by a bank, shall be
regarded as the Custom Fund assets instead of the underlying assets of such
instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to invest or otherwise manage
any Custom Fund assets for which the Trustee or Administrator is not the
investment manager nor shall the Administrator or Trustee be liable for acts or
omissions with regard to the investment of such assets except to the extent
required by ERISA.
16.7 Master Custom Fund
The Trustee may establish, at the direction of the Administrator,
a single Custom Fund (the "Master Custom Fund"), for the benefit of the Plan
and any other qualified plan of the Company or a Related Company for which the
Trustee acts as trustee pursuant to a plan and trust document that contains a
provision substantially identical to this provision. The assets of the Plan,
to the extent invested in the Master Custom Fund, shall consist only of that
percentage of the assets of the Master Custom Fund represented by the shares
held by the Plan.
16.8 Authority to Segregate Assets
The Administrator may direct the Trustee to split an Investment
Fund into two or more funds in the event any assets in the Investment Fund are
illiquid or the value is not readily determinable. In the event of such
segregation, the Administrator shall give instructions to the Trustee on what
value to use for the split-off assets, and the Trustee shall not be responsible
for confirming such value.
16.9 Investment in Company Stock
If the Company provides for a Company Stock Fund, directly or
through a Master Custom Fund, the Company Stock Fund shall be comprised of
Company Stock and sufficient deposit or money market type assets to handle the
Company Stock Fund's liquidity and disbursement needs. The Company Stock Fund
may be as large as necessary to comply with Participants' and Beneficiaries'
investment elections as well the total investment of Participants' and
Beneficiaries' PAYSOP Accounts.
16.10 Participants Have Right to Vote and Tender Company Stock
Each Participant or Beneficiary shall be entitled to instruct the
Trustee as to the voting or tendering of any full or partial shares of Company
Stock held on his or her behalf in the Company Stock Fund. The Company shall
be responsible for distributing to each such Participant or Beneficiary on a
timely basis, such information as shall be distributed to shareholders of the
Company in connection with any shareholder vote or tender decision and for
informing each such Participant or Beneficiary of the following:
(a) a failure to instruct the Trustee with regard to a
shareholder vote shall be regarded as a direction to abstain with respect to
each matter or group of related matters to be acted upon (other than elections
to office) and to withhold authority to vote for any nominee for election to
office; and
(b) a failure to instruct the Trustee with regard to a tender
decision shall be regarded as a direction not to tender.
The Trustee shall be responsible for the tabulation of the
instructions furnished by such Participants and Beneficiaries. The Trustee
shall act with respect to such shares as instructed. The Trustee shall hold
any instructions it receives in confidence and shall not divulge or release any
specific information regarding such to any person, including officers or
Employees.
The Trustee will act in accordance with (a) or (b) set forth
above, as applicable, with regard to shares for which instructions are not
received from Participants or Beneficiaries.
16.11 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the requirements of the
Securities Act of 1933, as amended, the California Corporate Securities Law of
1968, as amended, and any other applicable blue sky law. The Administrator
shall also specify what restrictive legend or transfer restriction, if any, is
required to be set forth on the certificates for the securities and the
procedure to be followed by the Trustee to effectuate a resale of such
securities.
17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to construe
those provisions of the Plan and Trust which relate to the Trustee and to do
all things necessary or convenient to the administration of the Trust, whether
or not such powers are specifically set forth in the Plan and Trust. Actions
taken in good faith by the Trustee shall be conclusive and binding on all
interested parties, and shall be given the maximum possible deference allowed
by law.
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth in
the Plan and Trust, the Trustee shall have all the power, authority, rights and
privileges of an absolute owner of the Trust assets and, not in limitation but
in amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell, tender,
exchange, dispose of, encumber, hypothecate, pledge, mortgage, lease, grant
options respecting, repair, alter, insure, or distribute any and all property
in the Trust;
(b) borrow money, participate in reorganizations, pay calls and
assessments, vote or execute proxies, exercise subscription or conversion
privileges, exercise options and register any securities in the Trust in the
name of the nominee, in federal book entry form or in any other form as shall
permit title thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate, adjust,
settle, enforce or foreclose, by judicial proceedings or otherwise, or defend
against the same, any obligations or claims in favor of or against the Trust;
and
(d) lend, through a collective investment fund, any securities
held in such collective investment fund to brokers, dealers or other borrowers
and to permit such securities to be transferred into the name and custody and
be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of any
Trust assets outside the jurisdiction of the United States, except as
authorized under ERISA section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes with regard to any Eligible
Rollover Distribution that is not paid as a Direct Rollover in accordance with
the Participant's withholding election or as required by law if no election is
made or the election is less than the amount required by law. With regard to
any taxable distribution that is not an Eligible Rollover Distribution, the
Trustee shall calculate and withhold federal (and, if applicable, state) income
taxes in accordance with the Participant's withholding election or as required
by law if no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay from
the Investment Fund any taxes or assessments imposed by any taxing or
governmental authority on such Investment Fund or its income, including related
interest and penalties.
17.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable period)
following the close of the Plan Year, the Trustee shall provide the
Administrator with an annual accounting of Trust assets and information to
assist the Administrator in meeting ERISA's annual reporting and audit
requirements.
(b) Periodic Reports. The Trustee shall maintain records and
provide sufficient reporting to allow the Administrator to properly monitor the
Trust's assets and activity.
(c) Administrator Approval. Approval of any Trustee accounting
shall automatically occur 90 days after such accounting has been received by
the Administrator, unless the Administrator files a written objection with the
Trustee within such time period. Such approval shall be final as to all
matters and transactions stated or shown therein and binding upon the
Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is not
readily tradable and listed on a national securities exchange registered under
the Securities Exchange Act of 1934, as amended, the Trustee may engage a
qualified independent appraiser to determine the fair market value of such
property, and the appraisal fees shall be paid from the Investment Fund
containing the asset.
17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the Trustee, upon any question
or matter arising under the Plan and Trust. When relied upon by the Trustee,
the opinion of such counsel shall be evidence that the Trustee has acted in
good faith.
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such as
may be mutually agreed upon by the Company and the Trustee. Trustee fees and
all reasonable expenses of counsel and advisors retained by the Trustee shall
be paid in accordance with Section 6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the Trustee,
shall be confined to construing the terms of the Plan and Trust as they relate
to the Trustee, receiving funds on behalf of and making payments from the
Trust, safeguarding and valuing Trust assets, investing and reinvesting Trust
assets in the Investment Funds as directed by the Administrator, Participants
or Beneficiaries, and those duties as described in this Section 17.
The Trustee shall have no duty or authority to ascertain whether
Contributions are in compliance with the Plan, to enforce collection or to
compute or verify the accuracy or adequacy of any amount to be paid to it by
the Employer. The Trustee shall not be liable for the proper application of
any part of the Trust with respect to any disbursement made at the direction of
the Administrator.
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any Employee.
The Employer expressly reserves the right to discharge an Employee at any time,
with or without cause, without regard to the effect such discharge would have
upon the Employee's interest in the Plan.
18.2 Compliance With USERRA
Notwithstanding any provision of the Plan to the contrary,
effective October 13, 1996, with regard to an Employee who after serving in the
uniformed services is reemployed on or after December 12, 1994, within the time
required by USERRA, contributions shall be made and benefits and service credit
shall be provided under the Plan with respect to his or her qualified military
service (as defined in Code section 414(u)(5)) in accordance with Code section
414(u). Furthermore, notwithstanding any provision of the Plan to the contrary,
Participant loan payments may be suspended during a period of qualified
military service.
18.3 Limited Return of Contributions
Except as provided in this Section 18.3, (i) Plan assets shall not
revert to the Employer nor be diverted for any purpose other than the exclusive
benefit of Participants and Beneficiaries and defraying reasonable expenses of
administering the Plan; and (ii) a Participant's vested interest shall not be
subject to divestment. As provided in ERISA section 403(c)(2), the actual
amount of a Contribution or portion thereof made by the Employer (or the
current value of such if a net loss has occurred) may revert to the Employer
if:
(a) such Contribution or portion thereof is made by reason of a
mistake of fact; or
(b) such Contribution or portion thereof is not deductible under
Code section 404 (such Contributions are hereby conditioned upon such
deductibility) in the taxable year of the Employer for which the Contribution
is made.
The reversion to the Employer must be made (if at all) within one
year of the mistaken payment or the date of disallowance of deduction, as the
case may be. A Participant shall have no rights under the Plan with respect to
any such reversion.
18.4 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan may be anticipated,
assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit with
respect to an Alternate Payee pursuant to a QDRO; or
(b) to use a Participant's vested Account balance as security
for a loan from the Plan which is permitted pursuant to Code section 4975.
18.5 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally incapable of giving
a valid receipt and discharge for any payment due him or her, the Administrator
shall have the payment of the benefit, or any part thereof, made to the person
(or persons or institution) whom it reasonably believes is caring for or
supporting the payee, unless it has received due notice of claim therefor from
a duly appointed guardian or conservator of the payee. Any payment shall to
the extent thereof, be a complete discharge of any liability under the Plan to
the payee.
18.6 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to payment of
a Plan benefit after a reasonable search, the Administrator may at any time
thereafter treat such person's Account as forfeited and use such amount as
described in Section 8. If such person subsequently presents the Administrator
with a valid claim for the benefit, such person shall be paid the amount
treated as forfeited, plus the interest that would have been earned in the
Sweep Account to the date of determination. The Administrator shall pay the
amount through an additional amount contributed by the Employer or direct the
Trustee to pay the amount from forfeiture amounts.
18.7 Suspension of Certain Plan Provisions During Conversion Period
Notwithstanding any provision of the Plan to the contrary, during
any Conversion Period, in accordance with procedures established by the
Administrator and the Trustee, the Administrator may temporarily suspend, in
whole or in part, certain provisions under the Plan, which may include, but are
not limited to, a Participant's right to change his or her Contribution
election, a Participant's right to change his or her investment election and a
Participant's right to borrow or withdraw from his or her Account or obtain a
distribution from his or her Account.
18.8 Suspension of Certain Plan Provisions During Other Periods
Notwithstanding any provision of the Plan to the contrary, in
accordance with procedures established by the Administrator and the Trustee,
the Administrator may temporarily suspend a Participant's right to borrow or
withdraw from his or her Account or obtain a distribution from his or her
Account, if (i) the Administrator receives a domestic relations order and the
Participant's Account is a source of the payment for such domestic relations
order, or (ii) if the Administrator receives notice that a domestic relations
order is being sought by the Participant, his or her spouse, former spouse,
child or other dependent (as defined in Code section 152) and the Participant's
Account is a source of the payment for such domestic relations order. Such
suspension may continue for a reasonable period of time (as determined by the
Administrator) which may include the period of time the Administrator, a court
of competent jurisdiction or other appropriate person is determining whether
the domestic relations order qualifies as a QDRO.
18.9 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees with
the Administrator's determination of his or her right to Plan benefits must
submit a written claim and exhaust this claim procedure before legal recourse
of any type is sought. The claim must include the important issues the
interested party believes support the claim. The Administrator, pursuant to
the authority provided in the Plan, shall either approve or deny the claim.
(b) Process for Denying a Claim. The Administrator's partial or
complete denial of an initial claim must include an understandable, written
response covering (1) the specific reasons why the claim is being denied (with
reference to the pertinent Plan provisions) and (2) the steps necessary to
perfect the claim and obtain a final review.
(c) Appeal of Denial and Final Review. The interested party may
make a written appeal of the Administrator's initial decision, and the
Administrator shall respond in the same manner and form as prescribed for
denying a claim initially.
(d) Time Frame. The initial claim, its review, appeal and final
review shall be made in a timely fashion, subject to the following time table:
Days to Respond
Action From Last Action
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the maximum
response time for its initial and final review if it provides an explanation
within the normal period of why an extension is needed and when its decision
shall be forthcoming.
18.10 Construction
Headings are included for reading convenience. The text shall
control if any ambiguity or inconsistency exists between the headings and the
text. The singular and plural shall be interchanged wherever appropriate.
References to Participant shall include Alternate Payee and/or Beneficiary when
appropriate and even if not otherwise already expressly stated.
18.11 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and administered
under ERISA and other applicable federal laws and, where not otherwise
preempted, by the laws of the State of California. If any provision of the
Plan and Trust is or becomes invalid or otherwise unenforceable, that fact
shall not affect the validity or enforceability of any other provision of the
Plan and Trust. All provisions of the Plan and Trust shall be so construed as
to render them valid and enforceable in accordance with their intent.
18.12 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or inaction,
(including a Plan termination in which the Company fails to apply for a
favorable determination from the Internal Revenue Service with respect to the
qualification of the Plan upon its termination), in relation to the Plan or
Trust (i) including (without limitation) expenses reasonably incurred in the
defense of any claim relating to the Plan or its assets, and amounts paid in
any settlement relating to the Plan or its assets, but (ii) excluding liability
resulting from actions or inactions made in bad faith, or resulting from the
negligence or willful misconduct of the Trustee. The Company shall have the
right, but not the obligation, to conduct the defense of any action to which
this Section applies. The Plan fiduciaries are not entitled to indemnity from
the Plan assets relating to any such action.
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
19.1 Amendment
The Company reserves the right to amend the Plan and Trust at any
time, to any extent and in any manner it may deem necessary or appropriate.
The Company (and not the Trustee) shall be responsible for adopting any
amendments necessary to maintain the qualified status of the Plan and Trust
under Code sections 401(a) and 501(a). The Administrator shall have the
authority to adopt Plan and Trust amendments which have no substantial adverse
financial impact upon any Employer or the Plan. All interested parties shall
be bound by any amendment, provided that no amendment shall:
(a) become effective unless it has been adopted in accordance
with the procedures set forth in Section 19.5;
(b) except to the extent permissible under ERISA and the Code,
make it possible for any portion of the Trust assets to revert to an Employer
or to be used for, or diverted to, any purpose other than for the exclusive
benefit of Participants and Beneficiaries entitled to Plan benefits and to
defray reasonable expenses of administering the Plan;
(c) decrease the rights of any Participant to benefits accrued
(including the elimination of optional forms of benefits) to the date on which
the amendment is adopted, or if later, the date upon which the amendment
becomes effective, except to the extent permitted under ERISA and the Code; nor
(d) permit a Participant to be paid any portion of his or her
Account subject to the distribution rules of Code section 401(k) unless the
payment would otherwise be permitted under Code section 401(k).
19.2 Merger
The Plan and Trust may not be merged or consolidated with, nor may
its assets or liabilities be transferred to, another plan unless each
Participant and Beneficiary would, if the resulting plan were then terminated,
receive a benefit just after the merger, consolidation or transfer which is at
least equal to the benefit which would be received if either plan had
terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation of:
(i) substantially all of the Employer's assets used in a trade or business to
an unrelated corporation, or (ii) a sale of such Employer's interest in a
subsidiary to an unrelated entity or individual, lump sum distributions shall
be permitted from the Plan, except as provided below, to Participants with
respect to Employees who continue employment with the corporation acquiring
such assets or who continue employment with such subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the
purchaser agrees, in connection with the sale, to be substituted as the Company
as the sponsor of the Plan or to accept a transfer in a transaction subject to
Code section 414(l)(1) of the assets and liabilities representing the
Participants' benefits into a plan of the purchaser or a plan to be established
by the purchaser.
19.4 Plan Termination and Complete Discontinuance of Contributions
The Company may, at any time and for any reason, terminate the
Plan in accordance with the procedures set forth in Section 19.5, or completely
discontinue contributions. Upon either of these events, or in the event of a
partial termination of the Plan within the meaning of Code section 411(d)(3),
the Accounts of each affected Participant who has not yet incurred a
forfeitable event as described in Section 8 shall be fully vested.
In the event of the Plan's termination, if no successor plan is
established or maintained, lump sum distributions shall be made in accordance
with the terms of the Plan as in effect at the time of the Plan's termination
or as thereafter amended, provided that a post-termination amendment shall not
be effective to the extent that it violates Section 19.1 unless it is required
in order to maintain the qualified status of the Plan upon its termination.
The Trustee's and Employer's authority shall continue beyond the Plan's
termination date until all Trust assets have been liquidated and distributed.
19.5 Amendment and Termination Procedures
Any amendment to (including a termination of) the Plan and Trust
by the Company shall be made only pursuant to action of the Board or on behalf
of the Board by the Board's executive committee as authorized in the Company
bylaws in accordance with the Board's normal procedures and by written
instrument of amendment, signed and dated. Any amendment to the Plan and Trust
by the Committee, as Administrator, shall be made pursuant to action of the
Committee in accordance with the procedures set forth in Section 15.7(a) and by
written instrument of amendment, signed and dated.
The effective date of any amendment may be before, on or after the
date of such Board action or Committee action, as applicable. If no effective
date is specified, the effective date of the amendment shall be the date of the
Board action or the Committee action, as applicable. However, no amendment
shall become effective until it is accepted and signed by the Trustee (which
acceptance shall not be unreasonably withheld.)
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate its
Plan participation by action of its board of directors in accordance with its
normal procedures. Written notice of such action shall be signed and dated by
an executive officer of the Employer and delivered to the Company. If the
effective date of such action is not specified, it shall be effective on, or as
soon as reasonably practicable after, the date of delivery. Upon the
Employer's request, the Company may instruct the Trustee and Administrator to
spin off all affected Accounts and underlying assets into a separate qualified
plan under which the Employer shall assume the powers and duties of the
Company. Alternatively, the Company may continue to maintain the Accounts
under the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under the Plan and Trust or may
be removed by the Company at any time upon at least 90 days written notice (or
less if agreed to by both parties). In such event, the Company shall appoint a
successor trustee by the end of the notice period. The successor trustee shall
then succeed to all the powers and duties of the Trustee under the Plan and
Trust. If no successor trustee has been named by the end of the notice period,
the Company's chief executive officer shall become the trustee, or if he or she
declines, the Trustee may petition the court for the appointment of a successor
trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible
after its resignation or removal as Trustee, the Trustee shall transfer to the
successor trustee all property currently held by the Trust. However, the
Trustee is authorized to reserve such sum of money as it may deem advisable for
payment of its accounts and expenses in connection with the settlement of its
accounts or other fees or expenses payable by the Trust. Any balance remaining
after payment of such fees and expenses shall be paid to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of the date Trust assets are
transferred to the successor trustee.
(c) Administrator Approval. Approval of the final accounting
shall automatically occur 90 days after such accounting has been received by
the Administrator, unless the Administrator files a written objection with the
Trustee within such time period. Such approval shall be final as to all
matters and transactions stated or shown therein and binding upon the
Administrator.
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective Date
include this set of daily valued funds:
Category Funds
Income Income Accumulation 1/
U.S. Treasury Allocation
Balanced Asset Allocation
Equity Company Stock
S&P 500 Stock
Combination LifePath Series
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the Income
Accumulation Fund.
III. Accounts For Which Investment is Restricted
A Participant may direct the investment of his or her entire Account
except for the following Accounts, which shall be invested as of the Effective
Date as follows:
PAYSOP Company Stock Fund
IV. Maximum Percentage Restrictions Applicable to Certain Investment Funds
As of the Effective Date, there are no maximum percentage restrictions
applicable to any Investment Funds.
1/ On July 16, 1991, New Jersey Insurance regulators took control of Mutual
Benefit Life Insurance Company. As of July 16, 1991, approximately 37% of the
Longview Income Accumulation Fund was invested in a GIC with Mutual Benefit.
Due to the uncertain condition of Mutual Benefit Life Insurance Company, the
portion of the Fund represented by the Mutual Benefit GIC was segregated into a
separate fund called the Mutual Benefit GIC Fund, to remain segregated until
such time as the ability of Mutual Benefit Life Insurance Company to meet its
obligations is known. The portion of a Participant's investment in the Longview
Income Accumulation Fund as of July 16, 1991 attributable to the Mutual Benefit
GIC was frozen in the separate Mutual Benefit GIC Fund and is not available for
investment transfers or for funding loans, in-service withdrawals or
distributions (other than in accordance with the Rehab Plan) until otherwise
permitted by MBL Life Assurance Corporation. Investments in the Longview
Income Accumulation Fund after July 1991 are not affected by the seizure of
Mutual Benefit Life Insurance Company by state insurance regulators.
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be as
follows:
I. Investment Management Fees: These are paid by Participants in that
management fees reduce the investment return reported and credited to
Participants.
II. Recordkeeping Fees: These are paid by the Employer on a quarterly basis,
except that with regard to a Participant who is no longer an Employee or a
Beneficiary, these are paid by the Participant and are assessed monthly and
billed/collected from Accounts quarterly.
III. Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an outstanding loan
balance.
IV. Investment Fund Election Changes: For each Investment Fund election
change by a Participant, in excess of four changes per year, a $10 fee shall be
assessed and billed/collected quarterly from the Participant's Account.
V. Periodic Installment Payment Fees: A $3.00 per check fee shall be
assessed and billed/collected quarterly from the Account of each Participant
for whom a check is issued.
VI. Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the Administrator
later elects that any such fees shall be borne by Participants, estimates of
the fees shall be determined and reconciled, at least annually, and the fees
shall be assessed monthly and billed/collected from Accounts quarterly.
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant loans shall
be equal to the U.S. Treasury rate for a note of the same maturity, plus 2%.
The rate may be determined once for all loans made in a month, and the maturity
may be determined to the nearest year.
10/29/97
