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EXHIBIT 10.10
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The CORPORATEplan for Retirement
THE PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 07
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THE CORPORATE PLAN FOR RETIREMENT
PROFIT SHARING/401(K) PLAN
ARTICLE I
ADOPTION AGREEMENT
ARTICLE 2
DEFINITIONS
2.01 - Definitions
ARTICLE 3
PARTICIPATION
3.01 - Date of Participation
3.02 - Resumption of Participation Following Reemployment
3.03 - Cessation or Resumption of Participation Following a Change in Status
3.04 - Participation by Owner-Employee; Controlled Businesses
3.05 - Omission of Eligible Employee
ARTICLE 4
CONTRIBUTIONS
4.01 - Deferral Contributions
4.02 - Additional Limit on Deferral Contributions
4.03 - Hatching Contributions
4.04 - Limit on Matching Contributions and Employee Contributions
4.05 - Special Rules
4.06 - Fixed/Discretionary Employer Contributions
4.07 - Time of Making Employer Contributions
4.08 - Return of Employer Contributions
4.09 - Employee Contributions
4.10 - Rollover Contributions
4.11 - Deductible Voluntary Employee Contributions
4.12 - Additional Rules for Paired Plans
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.01 - Individual Accounts
5.02 - Valuation of Accounts
5.03 - Code Section 415 Limitations
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.01 - Manner of Investment
6.02 - Investment Decisions
6.03 - Participant Directions to Trustee
ARTICLE 7
RIGHT TO BENEFITS
7.01 - Normal or Early Retirement
7.02 - Late Retirement
7.03 - Disability Retirement
7.04 - Death
7.05 - Other Termination of Employment
7.06 - Separate Account
7.07 - Forfeitures
7.08 - Adjustment for Investment Experience
7.09 - Participant Loans
7.10 - In-Service Withdrawals
7.11 - Prior Plan In-Service Distribution Rules
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ARTICLE 8
DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE
8.01 - Distribution of Benefits to Participants and Beneficiaries
8.02 - Annuity Distributions
8.03 - Joint and Survivor Annuities/Preretirement Survivor Annuities
8.04 - Installment Distributions
8.05 - Immediate Distributions
8.06 - Determination of Method of Distribution
8.07 - Notice to Trustee
8.08 - Time of Distribution
8.09 - Whereabouts of Participants and Beneficiaries
ARTICLE 9
TOP-HEAVY PROVISIONS
9.01 - Application
9.02 - Definitions
9.03 - Minimum Contribution
9.04 - Adjustment to the Limitation on Contributions and Benefits
9.05 - Minimum Vesting
ARTICLE 10
AMENDMENT AND TERMINATION
10.01 - Amendment by Employer
10.02 - Amendment by Prototype Sponsor
10.03 - Amendments Affecting Vested and/or Accrued Benefits
10.04 - Retroactive Amendments
10.05 - Termination
10.06 - Distribution upon Termination of that Plan
10.07 - Merger or Consolidation of Plan; Transfer of Plan Assets
ARTICLE 11
AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS
TO OR FROM OTHER QUALIFIED PLANS
11.01 - Amendment and Continuation of Predecessor Plan
11.02 - Transfer of Funds from an Existing Plan
11.03 - Acceptance of Assets by Trustee
11.04 - Transfer of Assets from Trust
ARTICLE 12
MISCELLANEOUS
12.01 - Communication to Participants
12.02 - Limitation of Rights
12.03 - Nonalienability of Benefits and Qualified Domestic Relations
Orders
12.04 - Facility of Payment
12.05 - Information Between Employer and Trustee
12.06 - Effect of Failure to Qualify Under Code
12.07 - Notices
12.08 - Governing Law
ARTICLE 13
PLAN ADMINISTRATION
13.01 - Powers and Responsibilities of the Administrator
13.02 - Nondiscriminatory Exercise of Authority
13.03 - Claims and Review Procedures
13.04 - Named Fiduciary
13.05 - Costs of Administration
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ARTICLE 14
TRUST AGREEMENT
14.01 - Acceptance of Trust Responsibilities
14.02 - Establishment of Trust Fund
14.03 - Exclusive Benefit
14.04 - Powers of Trustee
14.05 - Accounts
14.06 - Approving of Accounts
14.07 - Distribution from Trust Fund
14.08 - Transfer of Amounts from Qualified Plan
14.09 - Transfer of Assets from Trust
14.10 - Separate Trust or Fund for Existing Plan Assets
14.11 - Voting; Delivery of Information
14.12 - Compensation and Expenses of Trustee
14.13 - Reliance by Trustee on other Persons
14.14 - Indemnification by Employer
14.15 - Consultation by Trustee with Counsel
14.16 - Persons Dealing with the Trustee
14.17 - Resignation or Removal of Trustee
14.18 - Fiscal Year of the Trust
14.19 - Discharge of Duties by Fiduciaries
14.20 - Amendment
14.21 - Plan Termination
14.22 - Permitted Reversion of Funds to Employer
14.23 - Governing Law
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Article 1. Adoption Agreement.
Article 2. Definitions.
2.01. Definitions.
(a) Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
(1) "Account" means an account established on the books of the Trust
for the purpose of recording contributions made on behalf of a
Participant and any income, expenses, gains or losses incurred
thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article 1 under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates
the optional provisions selected by the Employer, and the Trustee
accepts its responsibilities under Article 14. The provisions of the
Adoption Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period
for which an amount is payable as annuity or in any other form.
(5) "Beneficiary" means that person or persons entitled under Section
7.04 to receive benefits under the Plan upon the death of a
Participant, provided that for purposes of Section 7.04 such term
shall be applied in accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(7) "Compensation" shall mean:
(A) for purposes of Article 4 (Contributions), compensation as
defined in Section 5.03(e)(2) excluding any items elected by the
Employer in Section 1.04(a), reimbursements or other expense
allowances, fringe benefits (cash and non-cash), moving expenses,
deferred compensation and welfare benefits, but including amounts
that are not includable in the gross income of the Participant
under a salary reduction agreement by reason of the application
of Sections 125, 402(a)(8), 402(h), or 403(b) of the Code; and
(B) for purposes of Section 2.01(a)(16) (Highly Compensated
Employees), Section 5.03 (Code Section 415 Limitations), and
Section 9.03 (Top Heavy Plan Minimum Contributions), compensation
as defined in Section 5.03(e)(2).
Compensation shall generally be based on the amount actually paid
to the Participant during the Plan Year or, for purposes of Article 4
if so elected by the Employer in Section 1.04(b), during that portion
of the Plan Year during which the Employee is eligible to participate.
Notwithstanding the preceding sentence, compensation for purposes of
Section 5.03 (Code Section 415 Limitations) shall be based on the
amount actually paid or made available to the Participant during the
Limitation Year. Compensation for the initial Plan Year for a new plan
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shall be based upon eligible Participant Compensation, subject to
Section 1.04(b), from the Effective Date listed in Section 1.01(g)(1)
through the end of the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall
mean the Individual's Earned Income.
For years beginning after December 31, 1988, the annual
Compensation of each Participant taken into account for determining
all benefits provided under the plan for any determination period
shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Section
415(d) of the Code, except that the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in
such calendar year and the first adjustment to the $200,000 limitation
is effected on January 1, 1990. If a plan determines Compensation on a
period of time that contains fewer than 12 calendar months, then
annual compensation limit is amount equal to the annual Compensation
limit for the calendar year in which the Compensation period begins
multiplied by the ratio obtained by dividing the number of full months
in the period by 12.
If Compensation for any prior determination period is taken into
account in determining an Employee's allocations or benefits for the
current determination period, the Compensation for such prior year is
subject to the applicable annual compensation limit in effect for that
prior year. For this purpose, for years beginning before January 1,
1990, the applicable annual compensation limit is $200,000.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of Section 414(q)(6) of the Code shall
apply, except that in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal descendants
of the Participant who have not attained age 19 before the close of
the year. If the $200,000 limitation is exceeded as a result of the
application of these rules, then the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application
of this limitation.
(8) "Earned Income" means the net earnings of a Self-Employed
Individual derived from the trade or business with respect to which
the Plan is established and for which the personal services of such
individual are a material income-providing factor, excluding any items
not included in gross income and the deductions allocated to such
items, except that for taxable years beginning after December 31, 1989
net earnings shall be determined with regard to the deduction allowed
under Section 164(f) of the Code, to the extent applicable to the
Employer. Net earnings shall be reduced by contributions of the
Employer to any qualified plan, to the extent a deduction is allowed
to the Employer for such contributions under Section 404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month
period beginning with the Employment Commencement Date and each
anniversary thereof or, in the case of an Employee who before
completing the eligibility requirements set forth in Section
1.03(a)(1) incurs a break in service for participation purposes and
thereafter returns to the employ of the Employer or
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Related Employer, each 12-consecutive month period beginning with the
first day of reemployment and each anniversary thereof.
A "break in service for participation purposes" shall mean an
Eligibility Computation Period during which the participant does not
complete more than 500 Hours of Service with the Employer.
(10) "Employee" means any employee of the Employer, any Self-Employed
Individual or Owner-Employee. The Employer must specify in section
1.03(a)(3) any Employee, or class of Employees, not eligible to
participate in the Plan. If the Employer elects to exclude collective
bargaining employees, the exclusion applies to any employee of the
Employer included in a unit of employees covered by an agreement which
the Secretary of Labor finds to be a collective bargaining agreement
between employee representatives and one or more employers unless the
collective bargaining agreement requires the employee to be included
within the Plan. The term "employee representatives" does not include
any organization more than half the members of which are owners,
officers, or executives of the Employer.
For purposes of the Plan, an individual shall be considered to
become an Employee on the date on which he first completes an Hour of
Service and he shall be considered to have ceased to be an Employee on
the date on which he last completes an Hour of Service. The term also
includes a Leased Employee, such that contributions or benefits
provided by the leasing organization which are attributable to
services performed for the Employer shall be treated as provided by
the Employer. Notwithstanding the above, a Leased Employee shall not
be considered an Employee if Leased Employees do not constitute more
than 20 percent of the Employer's non-highly compensated work force
(taking into account all Related Employers) and the Leased Employee is
covered by a money purchase pension plan maintained by the leasing
organization which plan provides (i) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined
for purposes of Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from gross income under Section 125, Section 402(a)(8),
Section 402(h) or Section 403(b) of the Code, (ii) full and immediate
vesting, and (iii) immediate participation by each employee of the
leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any
Related Employers required by this Section 2.01(a)(11). If Article 1
of the Employer's Plan in the Standardized Adoption Agreement, the
term "Employer" includes all Related Employers. If Article 1 of the
Employer's Plan is the Non-Standardized Adoption Agreement, the term
"Employers" includes those Related Employers designated in Section
1.02(b).
(12) "Employment Commencement Dates" means the date on which the
Employee first performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of
1974, as from time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or
Managed Income Portfolio of the Fidelity Group Trust for Employee
Benefit Plans which is made available to plans utilizing the
CORPORATEplan for Retirement.
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(15) "Fund Share" means the share, unit, or other evidence of
ownership in a Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated
active Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (i) received compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Employer in excess
of $50,000 (as adjusted pursuant to Section 415(d) of the Code) and
was a member of the top-paid group for such year; or (iii) was an
officer of the Employer and received compensation during such year
that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term highly compensated
Employee also includes: (i) Employees who are both described in the
preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the Employee is one of the 100 Employees
who received the most compensation from the Employer during the
determination year; and (ii) Employees who are 5 percent owners at any
time during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii)
above during either a determination year or look-back year, the
highest paid officer for such year shall be treated as a highly
compensated Employee.
For this purpose, the determination year shall be the Plan Year.
The look-back year shall be the twelve-month period immediately
preceding the determination year. The Employer may elect to make the
look-back year calculation for a determination on the basis of the
calendar year ending with or within the applicable determination year,
as prescribed by Section 414(q) of the Code and the regulations issued
thereunder.
A highly compensated former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a highly compensated active Employee for
either the separation year or any determination year ending on or
after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year,
a family member of either a 5 percent owner who is an active or former
Employee or a highly compensated Employee who is one of the 10 most
highly compensated Employees ranked on the basis of compensation paid
by the Employer during such year, then the family member and the 5
percent owner or top-ten highly compensated Employee shall be
aggregated. In such case, the family member and 5 percent owner or
top-ten highly compensated Employee shall be treated as a single
Employee receiving compensation and plan contributions or benefits
equal to the sum of such compensation and contributions or benefits of
the family member and 5 percent owner or top-ten highly compensated
Employee. For purposes of this Section, family member includes the
spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants.
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The determination of who is a highly compensated Employee,
including the determinations of the number and identity of Employees
in the top-paid group, the top 100 Employees, the number of Employees
treated as officers and the compensation that is considered, will be
made in accordance with Section 414(q) of the Code and the regulations
thereunder.
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, for the performance of duties for
the Employer or a Related Employer, each such hour to be credited
to the Employee for the Eligibility Computation Period in which
the duties were performed;
(B) Each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer or Related Employer
(including payments made or due from a trust fund or insurer to
which the Employer contributes or pays premiums) on account of a
period of time during which no duties are performed (irrespective
of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity, disability, layoff, jury
duty, military duty, or leave of absence, each such hour to be
credited to the Employee for the Eligibility Computation Period
in which such period of time occurs, subject to the following
rules:
(i) No more than 501 Hours of Service shall be credited
under this paragraph (B) on account of any single continuous
period during which the Employee performs no duties;
(ii) Hours of Service shall not be credited under this
paragraph (B) for a payment which solely reimburses the
Employee for medically-related expenses, or which is made or
due under a plan maintained solely for the purpose of
complying with applicable workmen's compensation,
unemployment compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no
duties falls within two or more Eligibility Computation
Periods, and if the payment made on account of such period
is not calculated on the basis of units of time, the Hours
of Service credited with respect to such period shall be
allocated between not more than the first two such
Eligibility Computation Periods on any reasonable basis
consistently applied with respect to similarly situated
Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which
back pay, irrespective of mitigation of damages, has been either
awarded or agreed to be paid by the Employer or a Related
Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period to which the award or agreement
pertains rather than the Eligibility Computation Period in which
the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of
the Employer and of all Related Employers will be treated as
employed by a single employer. For purposes of paragraphs (B) and
(C) above, Hours of Service will be calculated in accordance with
the provisions of Section 2530.200b-2(b) of the Department of
Labor regulations which are incorporated herein by reference.
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Solely for purposes of determining whether a break in
service for participation purposes has occurred in a computation
period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the hours of service
which would otherwise been credited to such individual but for
such absence, or in any case in which such hours cannot be
determined, 8 hours of service per day of such absence. For
purposes of this paragraph, an absence from work for maternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The hours of service credited under this paragraph shall be
credited (1) in the computation period in which the absence
begins if the crediting is necessary to prevent a break in
service in that period, or (2) in all other cases, in the
following computation period.
(18) "Leased Employee" means any individual who provides services to
the Employer or a Related Employer (the "recipient") but is not
otherwise an employee of the recipient if (i) such services are
provided pursuant to an agreement between the recipient and any other
person (the "leasing organization"), (ii) such individual has
performed services for the recipient (or for the recipient and any
related persons within the meaning of Section 414(n)(6) of the Code)
on a substantially full-time basis for at least one year, and (iii)
such services are of a type historically performed by employees in the
business field of the recipient.
(19) "Normal Retirement Age" means the normal retirement age specified
in Section 1.06(a) of the Adoption Agreement. If the Employer enforces
a mandatory retirement age, the Normal Retirement Age is the lesser of
that mandatory age or the age specified in Section 1.06(a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship,
the individual who is the sole proprietor, or if the Employer is a
partnership, a partner who owns more than 10 percent of either the
capital interest or the profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the plan established by the Employer in the form of
the prototype plan as set forth herein as a new plan or as an
amendment to an existing plan, by executing the Adoption Agreement,
together with any and all amendments hereto.
(23) "Plan Year" means the 12-consecutive month period designated by
the Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research
Company, or its successor.
(25) "Registered Investment Company" means any one or more
corporations, partnerships or trusts registered under the Investment
Company Act of 1940 for which Fidelity Management and Research Company
serves as investment advisor.
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(26) "Related Employer" means any employer other than the Employer
named in Section 1.02(a), if the Employer and such other employer are
members of a controlled group of corporations (as defined in Section
414(b) of the Code) or an affiliated service group (as defined in
Section 414(m)), or are trades or businesses (whether or not
incorporated) which are under common control (as defined in Section
414(c)), or such other employer is required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o).
(27) "Self-Employed Individual" means an individual who has Earned
Income for the taxable year from the Employer or who would have had
Earned Income but for the fact that the trade or business had no net
profits for the taxable year.
(28) "Trust" means the trust created by the Employer in accordance
with the provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and
the Trustee, as set forth in Article 14, under which the assets of the
plan are held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for
the Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its
successor.
(32) "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee
has been credited with at least 1,000 Hours of Service. If the Plan
maintained by the Employer is the plan of a predecessor employer, an
Employee's Years of Service for Participation shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for
the Employer, to the extent provided in Section 1.08.
(33) "Years of Service for Vesting" means, with respect to any
Employee, the number of whole years of his periods of service with the
Employer or a Related Employer (the elapsed time method to compute
vesting service), subject to any exclusions elected by the Employer in
Section 1.07(b). An Employee will receive credit for the aggregate of
all time period(s) commencing with the Employee's Employment
Commencement Date and ending on the date a break in service begins,
unless any such years are excluded by Section 1.07(b). An Employee
will also receive credit for any period of severance of less than 12
consecutive months. Fractional periods of a year will be expressed in
terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks
in service, all years of service after such breaks in service will be
disregarded for the purpose of vesting the Employer-derived account
balance that accrued before such breaks, but both pre-break and
post-break service will count for the purposes of vesting the
Employer-derived account balance that accrues after such breaks. Both
accounts will share in the earnings and losses of the fund.
In the case of a Participant who does not have 5 consecutive
1-year breaks in service, both the pre-break and post-break service
will count in vesting both the pre-break and post-break
employer-derived account balance.
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A break in service is a period of severance of at least 12
consecutive months. Period of severance is a continuous period of time
during which the Employee is not employed by the Employer. Such period
begins on the date the Employee retires, quite or is discharged, or if
earlier, the 12 month anniversary of the date on which the Employee
was otherwise first absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period
beginning on the first anniversary of the first date of such absence
shall not constitute a break in service. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of the birth of a child of the individual, (3) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement.
If the Plan maintained by the Employer is the plan of a
predecessor employer, an Employee's Years of Service for Vesting shall
include years of service with such predecessor employer. In any case
in which the Plan maintained by the Employer is not the plan
maintained by a predecessor employer, service for such predecessor
shall be treated as service for the Employer to the extent provided in
Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include the
feminine gender unless the context clearly indicates otherwise.
Article 3. Participation.
3.01. Date of Participation. All Employees in the eligible class (as defined in
Section 1.03(a)(3)) who are in the service of the Employer on the Effective Date
will become Participants on the date elected by the Employer in Section 1.03(c).
Any other Employee will become a Participant in the Plan as of the first Entry
Date on which he first satisfies the eligibility requirements set forth in
Section 1.03(a). In the event that an Employee who is not a member of an
eligible class (as defined in Section 1.03(a)(3)) becomes a member of an
eligible class, the individual shall participate immediately if such individual
had already satisfied the eligibility requirements and would have otherwise
previously become a Participant.
If an eligibility requirement other than one Year of Service is elected in
1.03(a)(1), an Employee may not be required to complete a minimum number of
Hours of Service before becoming a Participant. An otherwise eligible Employee
subject to a minimum months of service requirement shall become a Participant on
the first Entry Date following his completion of the required number of
consecutive months of employment measured from his Employment Commencement Date
to the coinciding date in the applicable following month. For purposes of
determining consecutive months of service, the Related Employer and predecessor
employer rules contained in Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
3.02. Resumption of Participation Following Reemployment. If a Participant
ceases to be an Employee and thereafter returns to the employ of the Employer he
will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his reemployment
and is in the eligible class of Employees as defined in section 1.03(a)(3),
and
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(b) any distribution which he is receiving under the Plan will cease except
as otherwise required under Section 8.08.
3.03. Cessation or Resumption of Participation Following a Change in Status. If
any Participant continues in the employ of the Employer or Related Employer but
ceases to be a member of an eligible class as defined in Section 1.03(a)(3), the
individual shall continue to be a Participant for most purposes until the entire
amount of his benefit is distributed; however, the individual shall not be
entitled to receive an allocation of contributions or forfeitures during the
period that he is not a member of the eligible class. Such Participant shall
continue to receive credit for service completed during the period for purposes
of determining his vested interest in his Accounts. In the event that the
individual subsequently again becomes a member of an eligible class of
Employees, the Individual shall resume full participation immediately upon the
date of such change in status.
3.04. Participation by Owner-Employee; Controlled Businesses. If the Plan
provides contributions or benefits for one or more Owner-Employees who control
both the trade or business with respect to which the Plan is established and one
or more other trades or businesses, the Plan and any plan established with
respect to such other trades or businesses must, when looked at as a single
plan, satisfy Sections 401(a) and 401(d) of the Code with respect to the
employees of this and all such other trades or businesses. If the Plan provides
contributions or benefits for one or more Owner-Employees who control one or
more other trades or businesses, the Employees of each such other trade or
business must be included in a plan which satisfies Sections 401(a) and 401(d)
of the Code and which provides contributions and benefits not less favorable
than provided for Owner-Employees under the Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the Employees under the
plan of the trades or businesses which are controlled must be as favorable as
those provided for him under the most favorable plan of the trade or business
which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such Owner-Employees together, (i) own the entire interest in
an unincorporated trade or business, or (ii) in the case of a partnership, own
more than 50 percent of either the capital interest or the profits interest in
such partnership. For this purpose, an Owner-Employee, or two or more
Owner-Employees, shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership controlled by such
Owner-Employee or such Owner-Employees.
3.05. Omission of Eligible Employee. If any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution, if necessary, so that the
omitted Employee receives the total amount which the said Employee would have
received had he not been omitted. For purposes of this Section 3.05, the term
"contribution" shall not include Deferral Contributions and Matching
Contributions made pursuant to Sections 4.01 and 4.03, respectively.
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Article 4. Contributions.
4.01. Deferral Contributions.
(a) 4.01. Deferral Contributions. If so provided by the Employer in Section
1.05(b), each Participant may elect to execute a salary reduction agreement
with the Employer to reduce his compensation by a specified percentage not
exceeding 15% per payroll period, subject to any exceptions elected by the
Employer in Section 1.05(b)(2) and 1.05(b)(3) and equal to a whole number
multiple of one (1) percent. Such agreement shall become effective on the
first day of the first payroll period for which the Employer can reasonably
process the request. The Employer shall make a Deferral Contribution on
behalf of the Participant corresponding to the amount of said reduction,
subject to the restrictions set forth below. Under no circumstances may a
salary reduction agreement be adopted retroactively.
(b) A Participant may elect to change or discontinue the percentage by
which his Compensation is reduced by notice to the Employer as provided in
Section 1.05(b)(1).
(c) No Participant shall be permitted to have Deferral Contributions made
under the Plan, or any other qualified plan maintained by the Employer,
during the taxable year, in excess of the dollar limitation contained in
Section 402(g) of the Code in effect at the beginning of such taxable year.
A Participant may assign to the Plan any Excess Deferrals made during
the taxable year of the Participant by notifying the Plan Administrator on
or before March 15 following the taxable year of the amount of the Excess
Deferrals to be assigned to the Plan. A Participant is deemed to notify the
Administrator of any Excess Deferrals that arise by taking into account
only those Deferral contributions made to the Plan and any other plan of
the Employer. Notwithstanding any other provision of the Plan, Excess
Deferrals, plus any income and minus any lose allocable thereto, shall be
distributed no later than April 15 to any Participant to whose account
Excess Deferrals were so assigned for the preceding year and who claims
Excess Deferrals for such taxable year.
"Excess Deferrals" shall mean those Deferral contributions that are
includable in a participant's gross income under Section 402(g) of the Code
to the extent such Participant's Deferral Contributions for a taxable year
exceed the dollar limitation under such code section. For purposes of
determining Excess Deferrals, the term "Deferral Contributions" shall
include the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified CODA as
described in Section 401(k) of the Code, any simplified employee pension
cash or deferred arrangement as described in Section 402(h)(1)(B) of the
Code, any eligible deferred compensation plan under Section 457, any plan
as described under Section 501(c)(18) of the Code, and any Employer
Contributions made on the behalf of a Participant for the purchase of an
annuity contract under Section 403(b) of the Code pursuant to a salary
reduction agreement. Deferral Contributions shall not include any deferrals
properly distributed as excess annual additions. Excess Deferrals shall be
treated as annual additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the
Participant's taxable year.
Excess Deferrals shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess
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Deferrals is (1) income or loss allocable to the Participant's Deferral
Contributions account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Deferrals for the year and
the denominator is the Participant's account balance attributable to
Deferral Contributions without regard to any income or loss occurring
during such taxable year, or (2) such other amount determined under any
reasonable method, provided that such method is used consistently for all
Participants in calculating the distributions required under this Section
4.01(c) and Sections 4.02(d) and 4.04(d) for the Plan Year, and is used by
the Plan in allocating income or loss to Participants' accounts. Income or
loss allocable to the period between the end of the Plan Year and the date
of distribution shall be disregarded in determining income or lose.
(d) In order for the Plan to comply with the requirements of Sections
401(k), 402(g) and 415 of the Code and the regulations promulgated
thereunder, at any time in a Plan Year the Administrator may reduce the
rate of Deferral Contributions to be made on behalf of any Participant, or
class of Participants, for the remainder of that Plan Year, or the
Administrator may require that all Deferral Contributions to be made on
behalf of a Participant be discontinued for the remainder of that Plan
Year. Upon the close of the Plan Year or such earlier date as the
Administrator may determine, any reduction or discontinuance in Deferral
Contributions shall automatically cease until the Administrator again
determines that such a reduction or discontinuance of Deferral
Contributions is required.
4.02. Additional Limit on Deferral Contributions.
(a) The Actual Deferral Percentage (hereinafter "ADP") for Participants who
are Highly Compensated Employees for each Plan Year and the ADP for
participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests.
(1) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ADP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ADP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
2.0, provided that the ADP for participants who are Highly Compensated
Employees does not exceed the ADP for Participants who are Non-highly
Compensated Employees by more than two (2) percentage points.
(b) The following special rules apply for the purposes of this Section:
(1) The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Deferral Contributions
(and Qualified Discretionary Contributions if treated as Deferral
Contributions for purposes of the ADP test) allocated to his or her
accounts under two or more arrangements described in Section 401(k) of
the Code, that are maintained by the Employer, shall be determined as
if such Deferral Contributions (and, if applicable, such Qualified
Discretionary Contributions) were made under a single arrangement. If
a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all cash
16
8/1/93
or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Section 401(k) of the Code.
(2) In the event that this Plan satisfies the requirements of Sections
401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such Sections of the Code only if aggregated with this
plan, then this Section shall be applied by determining the ADP of
Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to
satisfy section 401(k) of the Code only if they have the same Plan
Year.
(3) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the Deferral Contributions (and Qualified Discretionary
Contributions if treated as Deferral Contributions for purposes of the
ADP test) and Compensation of such Participant shall include the
Deferral Contributions (and, if applicable, Qualified Discretionary
Contributions) and compensation for the Plan Year of Family Members
(as defined in Section 414(q)(6) of the Code). Family Members, with
respect to such Highly Compensated Employees, shall be disregarded as
separate employees in determining the ADP both for Participants who
are Non-highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(4) For purposes of determining the ADP test, Deferral Contributions
and Qualified Discretionary Contributions must be made before the last
day of the twelve-month period immediately following the Plan Year to
which contributions relate.
(5) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Discretionary
Contributions used in such test.
(6) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the trust on behalf of
such Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year. Employer contributions on behalf of
any Participant shall include: (1) any Deferral Contributions made
pursuant to the Participant's deferral election, including Excess
Deferrals of Highly Compensated Employees, but excluding (a) Excess
Deferrals of Non-Highly Compensated Employees that arise solely from
Deferral Contributions made under the Plan or plans of the Employer
and (b) Deferral Contributions that are taken into account in the
Contribution Percentage test (provided the ADP test is satisfied both
with and without exclusion of these Deferral contributions); and (2)
at the election of the Employer, Qualified Discretionary
Contributions. Matching Contributions, whether or not non-forfeitable
when made, shall not be
17
8/1/93
considered as Employer Contributions for purposes of this paragraph.
For purposes of computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make Deferral
Contributions shall be treated as a Participant on whose behalf no
Deferral Contributions are made.
(2) "Excess Contributions" shall mean, with respect to any Plan Year,
the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated Employees
for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with
the highest of such percentages).
(3) "Qualified Discretionary Contributions" shall mean contributions
made by the Employer as elected in Section 1.05(g) and allocated to
Participant accounts of Non-highly Compensated Employees that such
Participants may not elect to receive in cash until distributed from
the plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions that
are applicable to Deferral Contributions. Participants shall not be
required to satisfy any hours of service or employment requirement in
order to receive an allocation of such contributions.
(d) Notwithstanding any other provision of this plan, Excess Contributions,
plus any income and minus any loss allocable thereto, shall be distributed
no later than the last day of each Plan Year to participants to whose
accounts such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2-1/2 months after
the last day of the Plan Year in which such excess amounts arose, a ten
(10) percent excise tax will be imposed on the employer maintaining the
plan with respect to such amounts. Such distributions shall be made to
Highly Compensated Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such employees. Excess
Contributions of Participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code shall be allocated among
the family members in proportion to the Deferral Contributions (and amounts
treated as Deferral Contributions) of each family member that is combined
to determine the combined ADP.
Excess Contributions shall be treated as annual additions under the
plan.
Excess Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to Excess
Contributions is (1) income or loss allocable to the Participant's Deferral
Contribution account (and if applicable, the Qualified Discretionary
Contribution account) for the Plan Year multiplied by a fraction, the
numerator of which is such Participant's Excess Contributions for the year
and the denominator is the Participant's account balance attributable to
Deferral Contributions without regard to any income or loss occurring
during such Plan Year, or (2) an amount determined under any reasonable
method, provided that such method is used consistently for all Participants
in calculating any distributions required under Section 4.02(d) and
Sections 4.01(c) and 4.04(d) for the Plan Year, and is used by the Plan in
allocating income or loss to the
18
8/1/93
Participants' accounts. Income or loss allocable to the period between the
end of the Plan Year and the date of distribution shall be disregarded in
determining income or loss.
Excess Contributions shall be distributed from the Participant's
Qualified Discretionary Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's Deferral
Contributions account.
4.03. Matching Contributions. If so provided by the Employer in Section 1.05(c),
the Employer shall make a Matching Contribution on behalf of each Participant
who had Deferral Contributions made on his behalf during the year and who meets
the requirement, if any, of Section 1.05(c)(4). The amount of the Matching
Contribution shall be determined in accordance with Section 1.05(c), subject to
the limitations set forth in Section 4.04 and Section 404 of the Code. Matching
Contributions will not be allowed to be made by the Employer on any voluntary
nondeductible Employee Contributions.
4.04. Limit on Matching Contributions and Employee Contributions.
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
1.25; or
(2) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are
Non-highly Compensated Employees for the same Plan Year multiplied by
two (2), provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for Participants who are
Non-highly Compensated Employees by more than two (2) percentage
points.
(b) The following special rules apply for purposes of this section:
(1) If one or more Highly Compensated Employees participate in both a
qualified cash or deferred arrangement described in Section 401(k) of
the Code (hereafter "CODA") and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds
the Aggregate Limit, then the ACP of those Highly Compensated
Employees who also participate in a CODA will be reduced (beginning
with such Highly Compensated Employee whose ACP is the highest) so
that the limit is not exceeded. The amount by which each Highly
Compensated Employee's Contribution Percentage Amounts is reduced
shall be treated as an Excess Aggregate Contribution. The ADP and ACP
of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does
not occur if either the ADP or ACP of the Highly Compensated Employees
does not exceed 1.25 multiplied by the ADP and ACP of the Non-highly
Compensated Employees.
(2) For purposes of this section, the Contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible
to have Contribution Percentage Amounts allocated to
19
8/1/93
his or her account under two or more plans described in section 401(a)
of the Code, or arrangements described in section 401(k) of the Code
that are maintained by the Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under each
plan. If a Highly Compensated Employee participates in two or more
cash or deferred arrangements that have different plan years, all cash
or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement. Notwithstanding the
foregoing, certain plans shall be treated as separate if mandatorily
disaggregated under regulations under Section 401(m) of the Code.
(3) In the event that this plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such sections of the code only if aggregated with this
plan, then this section shall be applied by determining the
Contribution Percentage of Employees as if all such plans were a
single plan. For plan years beginning after December 31, 1989, plans
may be aggregated in order to satisfy Section 401(m) of the Code only
if they have the a Plan Year.
(4) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most
highly-paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for the Plan Year of
Family Members (as defined in Section 414(q)(6) of the Code). Family
Members, with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the Contribution
Percentage both for Participants who are Non-highly Compensated
Employees and for Participants who are Highly Compensated Employees.
(5) For purposes of determining the Contribution Percentage test,
Employee Contributions made pursuant to Section 1.05(d)(l) are
considered to have been made in the Plan Year in which contributed to
the Trust. Matching Contributions and Qualified Discretionary
Contributions will be considered made for a Plan Year if made no later
on than the end of the twelve-month period beginning on the day after
the close of the Plan Year.
(6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Discretionary
Contributions used in such test.
(7) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Aggregate Limit" shall mean the greater of (A) or (B) where (A)
is the sum of (i) 125 percent of the greater of the ADP of the
Non-highly Compensated Employees for the Plan Year or the ACP of
Non-highly Compensated Employees under the plan subject to Section
401(m) of the Code for the Plan Year beginning with or within the Plan
Year of the CODA and (ii) the lesser of 200% or two plus the lesser of
such ADP or ACP and where (B) is the sum of (i) 125 percent of the
lesser of the ADP of the Non-highly Compensated Employees for the Plan
Year or the
20
8/1/93
ACP of Non-highly Compensated Employees under the Plan subject to
Section 401(m) of the Code for the Plan Year beginning with or within
the Plan Year of the CODA and (ii) the lesser of 200% or two plus the
greater of such ADP or ACP.
(2) "Average Contribution Percentage" or "ACP" shall mean the average
of the Contribution Percentages of the Eligible Participants in a
group.
(3) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to
the Participant's Compensation for the Plan Year.
(4) "Contribution Percentage Amounts" shall mean the sum of the
Employee Contributions and Matching Contributions made under the plan
on behalf of the Participant for the Plan Year. Such Contribution
Percentage Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or because
the contributions to which they relate are Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions. If so elected by the
Employer in Section 1.05(b)(4), the Employer may include Qualified
Discretionary Contributions in the Contribution Percentage Amounts.
The Employer also may elect to use Deferral Contributions in the
Contribution Percentage Amounts so long as the ADP test is met before
the Deferral Contributions are used in the ACP test and continues to
be met following the exclusion of those Deferral Contributions that
are used to meet the ACP test.
(5) "Deferral Contribution" shall mean any contribution made at the
election of the Participant pursuant to a salary reduction agreement
in accordance with Section 4.01(a).
(6) "Eligible Participant" shall mean any Employee who is eligible to
make an Employee Contribution, or a Deferral Contribution (if the
employer takes such contributions into account in the calculation of
the Contribution Percentage), or to receive a Matching Contribution.
(7) "Employee Contribution" shall mean any voluntary nondeductible
contribution made to the plan by or on behalf of a Participant that is
included in the Participant's gross income in the year in which made
and that is maintained in a separate account to which earnings and
losses are allocated.
(8) "Matching Contribution" shall mean an Employer Contribution made
to this or any other defined contribution plan on behalf of a
Participant on account of a Participant's Deferral Contribution.
(9) "Excess Aggregate Contributions" shall mean, with respect to any
Plan Year, the excess of:
(A) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such
Plan Year, over
(B) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
21
Such determination shall be made after first determining Excess
Deferrals pursuant to Section 4.01 and then determining Excess
Contributions pursuant to Section 4.02.
(d) Notwithstanding any other provision of the Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall
be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose accounts such
Excess Aggregate Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions of Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the Employee and
Matching Contributions of each family member that is combined to determine
the combined ACP. If such Excess Aggregate Contributions are distributed
more than 2 1/2 months after the last day of the Plan Year in which such
excess amounts arose, a ten (10) percent excise tax will be imposed on the
employer maintaining the plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as annual additions under the
Plan.
Excess Aggregate Contributions shall be adjusted for any income or
loss up to the date of distribution. The income or loss allocable to Excess
Aggregate Contributions is (1) income or loss allocable to the
Participant's Employee Contribution account, Matching Contribution account
(if any, and if all amounts therein are not used in the ADP test) and if
applicable, Qualified Nonelective Contribution account for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's account balance(s) attributable to Contribution Percentage
Amounts without regard to income or loss occurring during such Plan Year,
or (2) such other amount determined under any reasonable method, provided
that such method is used consistently for all Participants in calculating
any distributions required under Section 4.04(d) and Sections 4.01(c) and
4.02(d) for the Plan Year, and is used by the Plan in allocating income or
loss to the Participants' accounts. Income or loss allocable to the period
between the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions shall be applied to
reduce Employer contributions; the forfeitures shall be held in the money
market fund, if any, listed in Section 1.14(b) pending such application.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a prorata basis from the Participant's Employee Contribution
Account, Matching Contribution Account and if applicable, the Participant's
Deferral Contributions Account or Qualified Discretionary Contribution
Account or both.
4.05. Special Rules. Deferral Contributions and Qualified Discretionary
Contributions and income allocable to each are not distributable to a
Participant or his or her beneficiary or beneficiaries, in accordance with such
Participant's or beneficiary or beneficiaries election, earlier than upon
separation from service, death, or disability, except as otherwise provided in
Section 7.10, 7.11 or 10.06. Such amounts may also be distributed, but after
March 31, 1988 in the form of a lump sum only, upon:
(a) Termination of the Plan without establishment of another defined
contribution plan, other than an employee stock
22
ownership plan (as defined in Section 4979(e) or Section 409 of the Code)
or a simplified employee pension plan as defined in Section 408(k) of the
Code.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2) of
the Code) used in a trade or business of such corporation if such
corporation continues to maintain this Plan after the disposition, but only
with respect to employees who continue employment with the corporation
acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Section
409(d)(2) of the Code) if such corporation continues to maintain this Plan,
but only with respect to employees who continue employment with such
subsidiary.
The Participant's accrued benefit derived from Deferral Contributions,
Qualified Discretionary Contributions and Employee Contributions (as defined in
Section 4.09) is nonforfeitable. Separate accounts for Deferral Contributions,
Qualified Discretionary Contributions, Employee Contributions and Matching
Contributions will be maintained for each Participant. Each account will be
credited with the applicable contributions and earnings thereon.
4.06. Fixed/Discretionary Employer Contributions. If so provided by the Employer
in Sections 1.05(a)(1) or 1.05(a)(2), for the Plan Year in which the Plan is
adopted and for each Plan Year thereafter, the Employer will make Fixed or
Discretionary Employer Contributions to the Trust in accordance with Section
1.05 to be allocated as follows:
(a) Fixed Employer Contributions shall be allocated among eligible
Participants (as determined in accordance with Section 1.05(a)(3)) in the
manner specified in Section 1.05(a).
(b) Discretionary Employer Contributions shall be allocated among
eligible Participants, as determined in accordance with Section 1.05(a)(3),
as follows:
(1) If the Non-Integrated Formula is elected in Section
1.05(a)(2)(A), such contributions shall be allocated to eligible
Participants in the ratio that each Participant's Compensation
bears to the total Compensation paid to all eligible Participants
for the Plan Year; and
(2) If the Integrated Formula is elected in Section
1.05(a)(2)(B), such contributions shall be allocated in the
following steps:
(A) First, to each eligible Participant in the same ratio
that the sum of the Participant's Compensation plus Excess
Compensation for the plan Year bears to the sum of the
Compensation plus Excess Compensation of all Participants
for the Plan Year. This allocation as a percentage of the
sum of each Participant's Compensation plus Excess
Compensation shall not exceed 5.7%.
(B) Any remaining Discretionary Employer Contribution shall
be allocated to each eligible Participant in the same ratio
that each Participant's Compensation for the Plan Year bears
23
to the total Compensation of all Participants for the Plan
Year.
For purposes of this Section, "Excess Compensation" means
Compensation in excess of the taxable wage base, as determined
under Section 230 of the Social Security Act, in effect on the
first day of the Plan Year. Further, this Section 4.06(b)(2)
shall be modified as provided in Section 9.03 for years in which
the Plan is top heavy under Article 9.
4.07. Time of Making Employer Contributions. The Employer will pay its
contribution for each Plan Year not later than the time prescribed by law for
filing the Employer's Federal income tax return for the fiscal (or taxable) year
with or within which such Plan Year ends (including extensions thereof). The
Trustee will have no authority to inquire into the correctness of the amounts
contributed and paid over to the Trustee, to determine whether any contribution
is payable under this Article 4, or to enforce, by suit or otherwise, the
Employer's obligation, if any, to make a contribution to the Trustee.
4.08. Return of Employer Contributions. The Trustee shall, upon request by the
Employer, return to the Employer the amount (if any) determined under Section
14.22. Such amount shall be reduced by amounts attributable thereto which have
been credited to the Accounts of Participants who have since received
distributions from the Trust, except to the extent such amounts continue to be
credited to such Participants' Accounts at the time the amount is returned to
the Employer. Such amount shall also be reduced by the losses of the Trust
attributable thereto, if and to the extent such losses exceed the gains and
income attributable thereto, but will not be increased by the gains and income
of the Trust attributable thereto, if and to the extent such gains and income
exceed the losses attributable thereto. In no event will the return of a
contribution hereunder cause the balance of the individual Account of any
Participant to be reduced to less than the balance which would have been
credited to the Account had the mistaken amount not been contributed.
4.09. Employee Contributions. If the Employer elected to permit Deferral
Contributions in Section 1.05(b) and if so provided by the Employer in Section
1.05(d), each Participant may elect to make Employee Contributions to the Plan
in accordance with the rules and procedures established by the Employer and in
an amount not less than one percent (1%) and not greater than ten percent (10%)
of such Participant's Compensation for the Plan Year. Such contributions and all
Employee Contributions for Plan Years beginning after December 31, 1986 shall
be subject to the nondiscrimination requirements of Section 401(m) of the Code
as set forth in Section 4.04.
For purposes of this Plan, "Employee Contributions" shall mean any
voluntary non-deductible contribution made to a plan by or on behalf of a
Participant that is or was included in the Participant's gross income in the
year in which made and that is maintained under a separate account to which
applicable earnings and losses are allocated. Excess Contributions may not be
recharacterized as Employee Contributions.
Employee Contributions shall be paid over to the Trustee not later than
thirty (30) days following the end of the month in which the Participant makes
the contribution. A Participant shall have a fully vested 100% nonforfeitable
right to his Employee Contributions and the earnings or losses allocated
thereon. Distributions of Employee Contributions shall be made in accordance
with Section 7.10.
24
4.10 Rollover Contributions.
(a) Rollover of Eligible Rollover Distributions
(1) An Employee who is or was a distributee of an "eligible rollover
distribution" (as defined in Section 402(c)(4) of the Code and the
regulations issued thereunder) from a qualified plan or Section
403(b) annuity may directly transfer all or any portion of such
distribution to the Trust or transfer all or any portion of such
distribution to the Trust within sixty (60) days of payment. The
transfer shall be made in the form of cash or allowable Fund Shares
only.
(2) The Employer may refuse to accept rollover contributions or
instruct the Trustee not to accept rollover contributions under the
Plan.
(b) Treatment of Rollover Amount.
(1) An account will be established for the transferring Employee under
Article 5, the rollover amount will be credited to the account and
such amount will be subject to the terms of the Plan, including
Section 8.01, except as otherwise provided in this Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) Entry into Plan by Transferring Employee. Although an amount may be
transferred to the Trust Fund under this Section 4.10 by an Employee who
has not yet become a Participant in accordance with Article 4, and such
amount in subject to the terms of the Plan as described in paragraph (b)
above, the Employee will not become a Participant entitled to share in
Employer contributions until he has satisfied such requirements.
(d) Monitoring of Rollovers.
(1) The Administrator shall develop such procedures and require such
information from transferring Employees as it deems necessary to
insure that amounts transferred under this Section 4.10 meet the
requirements for tax-free rollovers established by such Section and by
Section 402(c) of the Code. No such amount may be transferred until
approved by the Administrator.
(2) If a transfer made under this Section 4.10 is later determined by
the Administrator not to have met the requirements of this Section or
of the Code or Treasury regulations, the Trustee shall, within a
reasonable time after such determination is made, and on instructions
from the Administrator, distribute to the Employee the amounts then
held in the Trust attributable to the transferred amount.
4.11. Deductible Voluntary Employee Contributions. The Administrator will not
accept deductible employee contributions which are made for a taxable year
beginning after December 31, 1986. Contributions made prior to that date will be
maintained in a separate account which will be nonforfeitable at all times and
which will share in the gains and losses of the trust in the same manner as
described in Section 5.02. No part of the deductible voluntary contribution
account will be used to purchase life insurance. Subject to Article VIII, the
Participant may
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withdraw any part of the deductible voluntary contribution account upon request.
4.12. Additional Rules for Paired Plans. If the Employer has adopted a qualified
plan under Fidelity Basic Plan Document No. 09 which is to be considered as a
paired plan with this Plan, the elections in Section 1.03 must be identical to
the Employer's corresponding elections for the other plan. When the paired plans
are top-heavy or are deemed to be top-heavy as provided in Section 9.01, the
Plan paired with this Plan will provide a minimum contribution to each non-key
Employee which is equal to 3 percent (or such other percent elected by the
Employer in Section 1.12(c)) of such Employee's Compensation. Notwithstanding
the preceding sentence, the minimum contribution shall be provided by this Plan
if contributions under the other Plan paired with this Plan are frozen.
Article 5. Participants' Accounts.
5.01. Individual Accounts. The Administrator will establish and maintain an
Account for each Participant which will reflect Employer and Employee
Contributions made on behalf of the Participant and earnings, expenses, gains
and losses attributable thereto, and investments made with amounts in the
Participant's Account. The Administrator will establish and maintain such other
accounts and records as it decides in its discretion to be reasonably required
or appropriate in order to discharge its duties under the Plan.
5.02. Valuation of Accounts. Participant Accounts will be valued at their fair
market value at least annually as of a date specified by the Administrator in
accordance with a method consistently followed and uniformly applied, and on
such date earnings, expenses, gains and losses on investments made with amounts
in each Participant's Account will be allocated to such Account. Participants
will be furnished statements of their Account values at least once each Plan
Year.
5.03. Code Section 415 Limitations. Notwithstanding any other provisions of the
Plan:
Subsections (a)(1) through (a)(4)--(These subsections apply to Employers
who do not maintain any qualified Plan including a Welfare Benefit Fund, an
Individual Medical Account, or a simplified employee pension in addition to this
Plan.)
(a)(1) If the Participant does not participate in, and has never
participated in any other qualified plan, Welfare Benefit Fund, Individual
Medical Account, or a simplified employee pension, as defined in section
408(k) of the Code, maintained by the Employer, which provides an annual
addition as defined in Section 5.03(c)(1), the amount of Annual Additions
to a Participant's Account for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's account would cause the
annual additions for the limitation year to exceed the maximum permissible
amount, the amount contributed or allocated will be reduced so that the
annual additions for the limitation year will equal the maximum permissible
amount.
(a)(2) Prior to the determination of the Participant's actual compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on
the basis of a reasonable estimation of the
26
Participant's compensation for such Limitation year, uniformly determined
for all Participants similarly situated. Any Employer Contributions based
on estimated annual compensation shall be reduced by any Excess Amounts
carried over from prior years.
(a)(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year
shall be determined on the basis of the Participant's actual Compensation
for such Limitation Year.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the allocation
of forfeitures, or a reasonable error in determining the total Elective
Deferrals there is an Excess Amount with respect to a Participant for a
Limitation Year, such Excess Amount shall be disposed of as follows:
(A) Any nondeductible voluntary employee contributions ("employee
contributions") or Elective Deferrals, to the extent they would reduce the
Excess Amount, will be returned to the Participant. Any gains attributable
to returned employee contributions will also be returned or will be treated
as additional employee contributions for the Limitation Year in which the
employee contributions were made.
(B) If after the application of paragraph (A) an Excess amount still
exists and the Participant is in the service of the Employer which is
covered by the Plan at the end of the Limitation Year, then such Excess
Amount shall be reapplied to reduce future Employer contributions under
this Plan for the next Limitation Year (and for each succeeding year, as
necessary) for such Participant, so that in each such Year the sum of
actual Employer contributions plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to such
Participant's Account.
(C) If after the application of paragraph (A) an Excess Amount still
exists and the Participant is not in the service of the Employer which is
covered by the Plan at the end of a Limitation Year, then such Excess
Amount will be held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer contributions for all remaining
Participants in the next Limitation Year and each succeeding Limitation
Year if necessary.
(D) if a suspense account is in existence at any time during the
Limitation Year pursuant to this subsection, it will not participate in the
allocation of the Trust Fund's investment gains and losses. All amounts in
the suspense account must be allocated to the Accounts of Participants
before any Employer contribution may be made for the Limitation Year.
Except as provided in paragraph (A), Excess Amounts may not be distributed
to Participants or former Participants.
Subsections (b)(1) through (b)(6)--(These subsections apply to Employers
who, in addition to this Plan, maintain one or more plans, all of which are
qualified Master or Prototype defined contribution Plans, any Welfare Benefit
Fund, any Individual Medical Account, or any simplified employee pension.)
(b)(1) If, in addition to this Plan, the Participant is covered under any
other qualified defined contribution plans (all of which are qualified
Master or Prototype Plans), Welfare Benefit Funds, Individual Medical
Accounts, or simplified employee pension Plans, maintained by the Employer,
that provide an annual addition as
27
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defined in Section 5.03(e)(1), the amount of Annual Additions to a
Participant's Account for a Limitation Year, shall not exceed the lesser
of:
(A) the Maximum Permissible Amount, reduced by the sum of any Annual
Additions to the Participant's accounts for the same Limitation Year under
such other qualified master or Prototype defined contribution plans, and
Welfare Benefit Funds, Individual Medical Accounts, and simplified employee
pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other
qualified Master or Prototype defined contribution plans Welfare Benefit
Funds, Individual Medical Accounts and simplified employee pensions
maintained by the Employer are less than the maximum permissible amount and
the Employer contribution that would otherwise be contributed or allocated
to the Participant's Account under this plan would cause the annual
additions for the limitation year to exceed this limitation, the amount
contributed or allocated will be reduced so that the annual additions under
all such plans and funds for the limitation year will equal the maximum
permissible amount. If the annual additions with respect to the Participant
under such other qualified Master or Prototype defined contribution plans,
Welfare Benefit Funds, Individual Medical Accounts and simplified employee
pensions in the aggregate are equal to or greater than the maximum
permissible amount, no amount will be contributed or allocated to the
Participant's Amount under this plan for the limitation year.
(b)(2) Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the amounts referred to in (b)(1)(A) above may be
determined on the basis of a reasonable estimation of the Participant's
Compensation for such Limitation Year, uniformly determined for all
Participants similarly situated. Any Employer contribution based on
estimated annual Compensation shall be reduced by any Excess Amounts
carried over from prior years.
(b)(3) As soon as administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be determined
on the basis of the Participant's actual Compensation for such Limitation
Year.
(b)(4) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall be deemed
to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a Welfare
Benefit Fund or individual Medical Account regardless of the actual
allocation date.
(b)(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan,
the Excess Amount attributed to this Plan will be the product of:
(A) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of
Section 415 of the Code), times
(B) the ratio of (i) the Annual Additions allocated to the Participant
as of such date under this Plan, divided by (ii) the Annual Additions
allocated as of such date under all
28
qualified defined contribution plans (determined without regard to the
limitations of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as
provided in subsection (a)(4).
Subsection (c)--(This subsection applies only to Employers who, in addition
to this Plan, maintain one or more qualified plans which are qualified defined
contribution plans other than Master or Prototype Plans.)
(c) If the Employer also maintains another plan which is a qualified
defined contribution plan other than a Master or Prototype Plan, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of (b)(1) through (b)(6), as
though the other plan were a Master or Prototype Plan, unless the Employer
provides other limitations in the Adoption Agreement.
Subsection (d)--(This subsection applies only to Employers who, in addition
to this Plan, maintain or at any time maintained a qualified defined benefit
plan.)
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan, the sum of any Participant's Defined Benefit Fraction
and Defined Contribution Fraction shall not exceed the combined plan
limitation of 1.0 in any Limitation Year. The combined plan limitation will
be met as provided by the Employer in the Adoption Agreement.
Subsections (e)(1) through (e)(9)--(Definitions.)
(e)(1) "Annual Additions" means the sum of the following amounts credited
to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee contributions,
(C) all forfeitures,
(D) ▇▇▇▇▇▇▇ allocated, after March 31, 1984, to an Individual Medical
Account which is part of a pension or annuity plan maintained by the
Employer are treated as Annual Additions to a defined contribution
plan. Also, amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee, as defined in Section 419A(d)(3)
of the Code, under a Welfare Benefit Fund maintained by the Employer
are treated as Annual Additions to a defined contribution plan, and
(E) Allocations under a simplified employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce
Employer contributions under subsection (a)(4) shall also be included as
Annual Additions.
(e)(2) "Compensation" means wages as defined in Section 3401(a) of the Code
and all other payments of compensation to an employee by the employer (in
the course of the employer's trade or business) for which the employer is
required to furnish the employee a written statement under Sections 6041(d)
and 6051(a)(3) of the
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8/1/93
Code. Compensation must be determined without regard to any rules under
Section 3401(a) of the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section 3401(a)(2) of the
Code.)
For any Self-Employed Individual compensation will mean Earned Income.
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation
year is the compensation actually paid or made available during such
limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of which
is the sum of the Participant's annual benefits (adjusted to an actuarially
equivalent straight life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified joint and survivor annuity)
under all the defined benefit plans (whether or not terminated) maintained
by the Employer, each such annual benefit computed on the assumptions that
the Participant will remain in employment until the normal retirement age
under each such plan (or the Participant's current age, if later) and that
all other factors used to determine benefits under such plan will remain
constant for all future Limitation Years, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code or 140
percent of the Participant's average Compensation for the 3 highest
consecutive calendar years of service during which the Participant was
active in each such plan, including any adjustments under Section 415(b) of
the Code. However, if the Participant was a participant as of the first day
of the first Limitation Year beginning after December 31, 1986 in one or
more defined benefit plans maintained by the Employer which were in
existence on May 6, 1986 then the denominator of the Defined Benefit
Fraction shall not be less than 125 percent of the Participant's total
accrued benefit as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986, under all such defined benefit
plans as met, individually and in the aggregate, the requirements of
Section 415 of the Code for all Limitation Years beginning before January
1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum for the current and all prior Limitation Years of (A) all
Annual additions (if any) to the Participant's accounts under each defined
contribution plan (whether or not terminated) maintained by the Employer,
and (B) all Annual Additions attributable to the Participant's
nondeductible employee contributions to all defined benefit plans (whether
or not terminated) maintained by the Employer, and the Participant's Annual
Additions attributable to all Welfare Benefit Funds, Individual Medical
Accounts, and simplified employee pensions, maintained by the Employer, and
the denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years during which the Participant was
an Employee (regardless of whether the Employer maintained a defined
contribution plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the dollar limitation in effect under
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8/1/93
Section 415(c)(1) (A) of the Code for each such year or 35 percent of the
Participant's Compensation for each such year.
If the Participant was a participant as of the first day of the first
Limitation Year beginning after December 31, 1986 in one or more defined
contribution plans maintained by the Employer which were in existence on
May 6, 1986 then the numerator of the Defined Contribution Fraction shall
be adjusted if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under the
adjustment an amount equal to the product of (i) the excess of the sum of
the fractions over 1.0 times (ii) the denominator of this fraction will be
permanently subtracted from the numerator of this fraction. The adjustment
is calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the plan made after
May 6, 1986, but using the Section 415 limitation applicable to the first
Limitation Year beginning on or after January 1, 1987.
The annual addition for any limitation year beginning before January
1, 1987 shall not be recomputed to treat all employee contributions as
annual additions.
(e)(5) "Employer" means the Employer and any Related Employer that adopts
this Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Section 414(b) of the Code
as modified by Section 415(h)) or which constitutes trades or businesses
(whether or not incorporated) which are under common control (as defined in
Section 414(c) of the Code as modified by Section 415(h) of the Code) or
which constitutes an affiliated service group (as defined in Section 414(m)
of the Code) and any other entity required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o) of the Code,
all such employers shall be considered a single employer for purposes of
applying the limitations of this Section 5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical account as
defined in Section 415(l)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified plans of the
Employer must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment
is made.
(e)(9) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with
respect to any Participant the lesser of (i) $30,000 or, if greater, 25
percent of the dollar limitation set forth in Section 415(b)(1) of the
Code, as in effect for the Limitation Year, or (ii) 25 percent of the
Participant's Compensation for the Limitation Year. If a short Limitation
Year is created because of an amendment changing the Limitation Year to a
different 12-consecutive month period, the Maximum Permissible Amount will
not exceed the limitation in (e)(10)(i) multiplied by a fraction whose
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8/1/93
numerator is the number of months in the short Limitation Year and whose
denominator is 12.
The compensation limitation referred to in subsection (e)(10)(ii)
shall not apply to any contribution for medical benefits within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code after separation from
service which is otherwise treated as an Annual Addition under Section
419A(d)(2) or Section 415(l)(1) of the Code.
(e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined in
Section 419(e) of the Code.
Article 6. Investment of Contributions.
6.01. Manner of Investment. All contributions made to the Accounts of
Participants shall be held for investment by the Trustee. The Accounts of
Participants shall be invested and reinvested only in eligible investments
selected by the Employer in Section 1.14(b), subject to Section 14.10.
6.02. Investment Decisions. Investments shall be directed by the Employer or by
each Participant or both, in accordance with the Employer's election in Section
1.14(a). Pursuant to Section 14.04, the Trustee shall have no discretion or
authority with respect to the investment of the Trust Fund.
(a) With respect to those Participant Accounts for which Employer
investment direction is elected, the Employer has the right to direct the
Trustee in writing with respect to the investment and reinvestment of
assets comprising the Trust Fund in the Fidelity Fund(s) designated in
Section 1.14(b) and as allowed by the Trustee.
(b) If Participant investment direction is elected, each Participant shall
direct the investment of his Account among the Fidelity Funds listed in
Section 1.14(b). The Participant shall file initial investment instructions
with the Administrator, on such form as the Administrator may provide,
selecting the Funds in which amounts credited to his Account will be
invested.
(1) Except as provided in this Section 6.02, only authorized Plan
contacts and the Participant shall have access to a Participant's
account. While any balance remains in the Account of a Participant
after his death, the Beneficiary of the Participant shall make
decisions as to the investment of the Account as though the
Beneficiary were the Participant. To the extent required by a
qualified domestic relations order as defined in Section 414(p) of the
Code, an alternate payee shall make investment decisions with respect
to a Participant's Account as though such alternate payee were the
Participant.
(2) If the Trustee receives any contribution under the Plan as to
which investment instructions have not been provided, the Trustee
shall promptly notify the Administrator and the Administrator shall
take steps to elicit instructions from the Participant. The Trustee
shall credit any such contribution to the Participant's Account and
such amount shall be invested in the Fidelity Fund selected by the
Employer for such purposes or, absent Employer selection, in the most
conservative Fidelity Fund listed in Section 1.14(b), until investment
instructions have been received by the Trustee.
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(c) All dividends, interest, gains and distributions of any nature received
in respect of Fund Shares shall be reinvested in additional shares of that
Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such Investment is
made.
6.03. Participant Directions to Trustee. All Participant initial investment
instructions filed with the Administrator pursuant to the provisions of Section
6.02 shall be promptly transmitted by the Administrator to the Trustee. A
Participant shall transmit subsequent investment instructions directly to the
Trustee by means of the telephone exchange system maintained by the Trustee for
such purposes. The method and frequency for change of investments will be
determined under the (1) rules applicable to the investments selected by the
Employer in Section 1.14(b) and (2) the additional rules of the Employer, if
any, limiting the frequency of investment changes, which are included in a
separate written administrative procedure adopted by the Employer and accepted
by the Trustee. The Trustee shall have no duty to inquire into the investment
decisions of a Participant or to advise him regarding the purchase, retention or
sale of assets credited to his Account.
Article 7. Right to Benefits.
7.01. Normal or Early Retirement. Each Participant who attains his Normal
Retirement Age or, if so provided by the Employer in Section 1.06(b), Early
Retirement Age will have a 100 percent nonforfeitable interest in his Account
regardless of any vesting schedule elected in Section 1.07. If a Participant
retires upon the attainment of Normal or Early Retirement Age, such retirement
in referred to as a normal retirement. Upon his normal retirement the balance of
the Participant's Account, plus any amounts thereafter credited to his Account,
subject to the provisions of Section 7.08, will be distributed to him in
accordance with Article 8.
If a Participant separates from service before satisfying the age
requirements for early retirement, but has satisfied the service requirement,
the Participant will be entitled to elect an early retirement distribution upon
satisfaction of such age requirement.
7.02. Late Retirement. If a Participant continues in the service of the Employer
after attainment of Normal Retirement Age, he will continue to have a 100
percent nonforfeitable interest in his Account and will continue to participate
in the Plan until the date he establishes with the Employer for his late
retirement. Until he retires, he has a continuing election to receive all or any
portion of his Account. Upon the earlier of his late retirement or the
distribution date required under Section 8.08, the balance of his Account, plus
any amounts thereafter credited to his Account, subject to the provisions of
Section 7.08, will be distributed to him in accordance with Article 8 below.
7.03. Disability Retirement. If so provided by the Employer in Section 1.06(c),
a Participant who becomes disabled will have a 100 percent nonforfeitable
interest in his Account, the balance of which Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section 7.08,
will be distributed to him in accordance with Article 8 below. A Participant is
considered disabled if he cannot
33
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engage in any substantial, gainful activity because of a medically determinable
physical or mental impairment likely to result in death or to be of a continuous
period of not less than 12 months, and terminates his employment with the
employer. Such termination of employment is referred to as a disability
retirement. Determinations with respect to disability shall be made by the
Administrator who may rely on the criteria set forth in Section 1.06(c) as
evidence that the Participant is disabled.
7.04. Death. Subject, if applicable, to Section 8.04, if a Participant dies
before the distribution of his Account has commenced, or before such
distribution has been completed, his Account shall become 100 percent vested and
his designated Beneficiary or Beneficiaries will be entitled to receive the
balance or remaining balance of his Account, plus any amounts thereafter
credited to his Account, subject to the provisions of Section 7.08. Distribution
to the Beneficiary or Beneficiaries will be made in accordance with Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change any
prior designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one person
in designated as the Beneficiary, their respective interests shall be as
indicated on the designation form. In the case of a married Participant the
Participant's spouse shall be deemed to be the designated Beneficiary unless the
Participant's spouse has consented to another designation in the manner
described in section 8.03(d).
A copy of the death notice or other sufficient documentation must be filed
with and approved by the Administrator. If upon the death of the Participant
there is, in the opinion of the Administrator, no designated Beneficiary for
part or all of the Participant's Account, such amount will be paid to his
surviving spouse or, if none, to his estate (such spouse or estate shall be
deemed to be the Beneficiary for purposes of the Plan). If a Beneficiary dies
after benefits to such Beneficiary have commenced, but before they have been
completed, and, in the opinion of the Administrator, no person has been
designated to receive such remaining benefits, then such benefits shall be paid
in a lump sum to the deceased Beneficiary's estate.
7.05. Other Termination of Employment. If a Participant terminates his
employment for any reason other than death or normal, late, or disability
retirement, he will be entitled to a termination benefit equal to (i) the vested
percentages of the value of the Matching and/or Fixed/Discretionary
Contributions to his Account, as adjusted for income, expense, gain, or loss,
such percentage(s) determined in accordance with the vesting schedule(s)
selected by the Employer in Section 1.07, and (ii) the value of the Deferral,
Employee, Qualified Discretionary and Rollover Contributions to his Account as
adjusted for income, expense, gain or loss. The amount payable under this
Section 7.05 will be subject to the provisions of Section 7.08 and will be
distributed in accordance with Article 8 below.
7.06. Separate Account. If a distribution from a Participant's Account has been
made to him at a time when he has a nonforfeitable right to less than 100
percent of his Account, the vesting schedule in Section 1.07 will thereafter
apply only to amounts in his Account attributable to Employer Contributions
allocated after such distribution. The balance of his Account immediately after
such distribution will be transferred to a separate account which will be
maintained for the purpose of determining his interest therein according to the
following provisions.
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At any relevant time prior to a forfeiture of any portion thereof under
Section 7.07 a Participant's nonforfeitable interest in his Account held in a
separate account described in the preceding paragraph will be equal to P(AB +
(RxD))-(RxD), where P is the nonforfeitable percentage at the relevant time
determined under Section 7.05; AB is the account balance of the separate account
at the relevant time; D is the amount of the distribution; and R is the ratio of
the account balance at the relevant time to the account balance after
distribution. Following a forfeiture of any portion of such separate account
under Section 7.07 below, any balance in the Participant's separate account will
remain fully vested and nonforfeitable.
7.07. Forfeitures. If a Participant terminates his employment, any portion of
his Account (including any amounts credited after his termination of employment)
not payable to him under Section 7.05 will be forfeited by him upon the complete
distribution to him of the vested portion of his Account, if any, subject to the
possibility of reinstatement as described in the following paragraph. For
purposes of this paragraph, if the value of an Employee's vested account balance
is zero, the Employee shall be deemed to have received a distribution of his
vested interest immediately following termination of employment. Such
forfeitures will be applied to reduce the contributions of the Employer next
payable under the Plan (or administrative expenses of the Plan); the forfeitures
shall be held in a money market fund pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but does again become an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or gains
of the assets credited to his Account since the date forfeited, will be
recredited to his Account (or to a separate account as described in Section
7.06, if applicable) but only if he repays to the Plan before the earlier of
five years after the date of his reemployment or the date he incurs 5
consecutive 1-year breaks in service following the date of the distribution the
amount previously distributed to him, without interest, under Section 7.05. If
an Employee is deemed to receive a distribution pursuant to this Section 7.07,
and the Employee resumes employment before 5 consecutive 1-year breaks in
service, the Employee shall be deemed to have repaid such distribution on the
date of his reemployment. Upon such an actual or deemed repayment, the
provisions of the Plan (including Section 7.06) will thereafter apply as if no
forfeiture had occurred. The amount to be recredited pursuant to this paragraph
will be derived first from the forfeitures, if any, which as of this date of
recrediting have yet to be applied as provided in the preceding paragraph and,
to the extent such forfeitures are insufficient, from a special Employer
contribution to be made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his
Account following his termination of employment, the non-vested portion of his
Account shall be forfeited after the Participant has incurred five consecutive
1-year breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's withdrawal
of Employee contributions.
7.08. Adjustment for Investment Experience. If any distribution under this
Article 7 is not made in a single payment, the amount retained by the Trustee
after the distribution will be subject to adjustment until distributed to
reflect the income and gain or loss on the investments in which such amount is
invested and any expenses properly charged under the Plan and Trust to such
amounts.
35
7.09. Participant Loans. If permitted under Section 1.09, the Administrator
shall allow Participants to apply for a loan from the Plan, subject to the
following:
(a) Loan Application. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the Administrator on
forms available from the Administrator. Loans shall be made available to
all Participants on a reasonably equivalent basis. For this purpose, the
term "Participant" means any Participant or Beneficiary, including an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, who is a party-in-interest (as determined under
ERISA Section 3(14)) with respect to the Plan except no loans will be made
to: (i) an Employee who makes a rollover contribution in accordance with
Section 4.10 who has not satisfied the requirements of Section 3.01, or
(ii) a shareholder-employee or Owner-Employee. For purposes of this
requirement, a shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A Participant with an existing loan may not apply for another loan
until the existing loan is paid in full and may not refinance an existing
loan or attain a second loan for the purpose of paying off the existing
loan. A Participant may not apply for more than one loan during each Plan
Year.
(b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other Employees. No loan to any Participant or
Beneficiary can be made to the extent that such loan when added to the
outstanding balance of all other loans to the Participant or Beneficiary
would exceed the lesser of (a) $50,000 reduced by the excess (if any) of
the highest outstanding balance of loans during the one year period ending
on the day before the loan is made over the outstanding balance of loans
from the plan on the date the loan is made, or (b) one-half the present
value of the nonforfeitable Account of the Participant. For the purpose of
the above limitation, all loans from all plans of the Employer and Related
Employers are aggregated. A Participant may not request a loan for less
than $1,000. The Employer may provide that loans only be made from certain
contribution sources within Participant Account(s) by notifying the Trustee
in writing of the restricted source.
Loans may be made for any purpose or if elected by the Employer in
Section 1.09(a), on account of hardship only. A loan will be considered to
be made on account of hardship only if made on account of an immediate and
heavy financial need described in Section 7.10(b)(1).
(c) Terms of Loan. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates
charged by persons in the business of lending money for loans which would
be made under similar circumstances. The determination of a reasonable rate
of interest must be based on appropriate regional factors unless the Plan
is administered on a national basis in which case the Administrator may
establish a uniform reasonable rate of interest applicable to all regions.
All loans shall by their terms require that repayment (principal and
interest) be amortized in level payments, not less
36
8/1/93
than quarterly, over a period not extending beyond five years from the date
of the loan unless such loan is for the purchase of a Participant's primary
residence, in which case the repayment period may not extend beyond ten
years from the date of the loan. A Participant may prepay the outstanding
loan balance prior to maturity without penalty.
(d) Security. Loans must be secured by the Participant's Accounts not to
exceed 50 percent of the Participant's vested Account. A Participant must
obtain the consent of his or her spouse, if any, to use a Participant
Account as security for the loan, if the provisions of Section 8.03 apply
to the Participant. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is
to be so secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a Plan representative or
notary public. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan.
(e) Default. The Administrator shall treat a loan in default if:
(1) any scheduled repayment remains unpaid more than 90 days;
(2) there is an outstanding principal balance existing on a loan after
the last scheduled repayment date.
Upon default or termination of employment, the entire outstanding
principal and accrued interest shall be immediately due and payable. If a
distributable event (as defined by the Code) has occurred, the
Administrator shall direct the Trustee to foreclose on the promissory note
and offset the Participant's vested Account by the outstanding balance of
the loan. If a distributable event has not occurred, the Administrator
shall direct the Trustee to foreclose on the promissory note and offset the
Participant's vested Account as soon as a distributable event occurs.
(f) Pre-existing loans. The provision in paragraph (a) of this Section 7.09
limiting a Participant to one outstanding loan shall not apply to loans
made before the Employer adopted this prototype plan document. A
Participant may not apply for a new loan until all outstanding loans made
before the Employer adopted this prototype plan have been paid in full. The
Trustee may accept any loans made before the Employer adopted this
prototype plan document except such loans which require the Trustee to hold
as security for the loan property other than the Participant's vested
Account.
As of the effective date of amendment of this Plan in Section
1.01(g)(2), the Trustee shall have the right to reamortize the outstanding
principal balance of any Participant loan that is delinquent. Such
reamortization shall be based upon the remaining life of the loan and the
original maturity date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account used as a security interest held by the plan
by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the Account payable at
the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's vested
Account (determined without regard to the preceding sentence) is payable to
the surviving spouse, then the Account shall be adjusted by first reducing
the vested Account by the amount of the security used as repayment of
37
the loan, and then determining the benefit payable to the surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent
that such loan when added to the outstanding balance of all other loans to
the Participant or Beneficiary would exceed the lesser of (a) $50,000
reduced by the excess (if any) of the highest outstanding balance of loans
during the one year period ending on the day before the loan is made over
the outstanding balance of loans from the plan on the date the loan is
made, or (b) one-half the present value of the nonforfeitable Account of
the Participant. For the purpose of the above limitation, all loans from
all plans of the Employer and Related Employers are aggregated.
7.10. In-Service/Hardship Withdrawals. Subject to the provisions of Article 8, a
Participant shall not be permitted to withdraw any Employer or Employee
Contributions (and earnings thereon) prior to retirement or termination of
employment, except as follows:
(a) Age 59 1/2. If permitted under Section 1.11(b), a Participant who has
attained the age of 59 1/2 is permitted to withdraw upon request all or any
portion the Accounts specified by the Employer in 1.11(b).
(b) Hardship. If permitted under Section 1.10, a Participant may apply to
the Administrator to withdraw some or all of his Deferral Contributions (and
earnings thereon accrued as of December 31, 1988) and, if applicable, Rollover
Contributions and such other amounts allowed by a predecessor plan, if such
withdrawal is made on account of a hardship. For purposes of this Section, a
distribution is made on account of hardship if made on account of an immediate
and heavy financial need of the Employee where such Employee lacks other
available resources. Determinations with respect to hardship shall be made by
the Administrator and shall be conclusive for purposes of the Plan, and shall be
based on the following special rules:
(1) The following are the only financial needs considered immediate
and heavy: expenses incurred or necessary for medical care (within the
meaning of Section 213(d) of the Code) of the Employee, the Employee's
spouse, children, or dependents; the purchase (excluding mortgage
payments) of a principal residence for the Employee; payment of
tuition and related educational fees for the next twelve (12) months
of post-secondary education for the Employee, the Employee's spouse,
children or dependents; or the need to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the Employee's
principal residence.
(2) A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other than the
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all plans maintained by the
Employer;
(ii) The Employee suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the
date of his hardship distribution. The suspension must also apply
to all elective contributions and employee contributions to all
other qualified plans and non-qualified plans maintained by the
Employer, other than any mandatory employer contribution portion
of a defined benefit plan, including stock option, stock purchase
and other
38
8/1/93
similar plans, but not including health and welfare benefit plans
(other than the cash or deferred arrangement portion of a
cafeteria plan);
(iii) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary
to pay any Federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution); and
(iv) The Employee agrees to limit Deferral Contributions
(elective contributions) to the Plan and any other qualified plan
maintained by the Employer for the Employee's taxable year
immediately following the taxable year of the hardship
distribution to the applicable limit under Section 402(g) of the
Code for such taxable year less the amount of such Employee's
Deferral Contributions for the taxable year of the hardship
distribution.
(3) A Participant must obtain the consent of his or her spouse, if
any, to obtain a hardship withdrawal, if the provisions of Section
8.03 apply to the Participant.
(c) Employee Contributions. A Participant may elect to withdraw, in cash,
up to one hundred percent of the amount then credited to his Employee
Contribution Account. Such withdrawals shall be limited to one, (1) per
Plan Year unless this prototype plan document is an amendment of a prior
plan document, in which case the rules and restrictions governing employee
contribution withdrawals, If any, are incorporated herein by reference.
7.11. Prior Plan In-Service Distribution Rules. If designated by the Employer
in Section 1.11(b), a Participant shall be entitled to withdraw at anytime prior
to his termination of employment, subject to the provisions of Article 8 and the
prior plan, any vested Employer Contributions maintained in a Participant's
Account for the specified period of time.
Article 8. Distribution of Benefits Payable after Termination of Service.
8.01. Distribution of Benefits to Participants and Beneficiaries.
(a) Distributions from the Trust to a Participant or to the Beneficiary of
the Participant shall be made in a lump sum in cash or, if elected by the
Employer in Section 1.11, under a systematic withdrawal plan
(installment(s)) upon retirement, death, disability, or other termination
of employment, unless another form of distribution is required or permitted
in accordance with paragraph (d) of this section 8.01 or sections 1.11(c),
8.02, 8.03, 8.04 or 11.02. A distribution may be made in Fund Shares, at
the election of the Participant, pursuant to the qualifying rollover of
such distribution to a Fidelity Investments individual retirement account.
(b) Distributions under a systematic withdrawal plan must be made in
substantially equal annual, or more frequent, installments, in cash, over a
period certain which does not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary, or, if the Participant dies prior
39
8/1/93
to the commencement of his benefits the life expectancy of the
Participant's Beneficiary, as further described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s) was,
$3,500 or less, the balance of such Account shall be distributed in a lump
sum as soon as practicable following retirement, disability, death or other
termination of employment.
(d) This paragraph (d) applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 8, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. The following definitions shall apply for purposes of
this paragraph (d):
(1) Eligible rollover distribution: An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit
of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution in required
under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in Section 408(a) of the code,
an individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to a surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(3) Distributee: A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in Section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
8.02. Annuity Distributions. If so provided in Section 1.11(b), a Participant
may elect distributions made in whole or in part in the form of an annuity
contract subject to the provisions of Section 8.03.
(a) An annuity contract distributed under the Plan must be purchased from
an insurance company and must be nontransferable. The terms of an annuity
contract shall comply with the requirements
40
of the Plan and distributions under such contract shall be made in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
(b) The payment period of an annuity contract distributed to the
Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or
designated Beneficiary, the payment period of an annuity contract may
be for as long as either the Participant or his spouse or designated
Beneficiary lives. Such an annuity may provide for an annuity certain
feature for a period not exceeding the life expectancy of the
Participant. If the annuity is payable to the Participant and his
spouse such period may not exceed the joint life and last survivor
expectancy of the Participant and his spouse, or, if the annuity is
payable to the Participant and a designated Beneficiary, the joint
life and last survivor expectancy of the Participant and such
Beneficiary. If the Participant dies prior to the commencement of his
benefits, the payment period of an annuity contract distributed to the
Beneficiary of the Participant may be as long as the Participant's
Beneficiary lives, and may provide for an annuity certain feature for
a period not exceeding the life expectancy of the Beneficiary. Any
annuity contract distributed under the Plan must provide for
nonincreasing, payments.
8.03. Joint and Survivor Annuities/Proretirement Survivor Annuities.
(a) Application. The provisions of this Section supersede any
conflicting provisions of the Plan; provided, however, that paragraph
(b) of this Section shall not apply if the Participant's Account does
not exceed or at the time of any prior distribution did not exceed
$3,500. A Participant is described in this Section only if (i) the
Participant has elected distribution of his Account in the form of an
Annuity Contract in accordance with Section 8.02, or (ii) the Trustee
has directly or indirectly received a transfer of assets from another
plan (including a predecessor plan) to which Section 401(a)(11) of the
Code applies with respect to such Participant.
(b) Retirement Annuity. Unless the Participant elects to waive
the application of this subsection in a manner satisfying the
requirements of subsection (d) below, to the extent applicable to the
Participant, within the 90-day period preceding his Annuity Starting
Date (which election may be revoked, and if revoked, remade, at any
time in such period), the vested Account due any Participant to whom
this subsection (b) applies will be paid to him by the purchase and
delivery to him of an annuity contract described in Section 8.02
providing a life annuity only form of benefit or, if the Participant
is married as of his Annuity Starting Date, providing an immediate
annuity for this life of the Participant with a survivor annuity for
the life of the Participant's spouse (determined as of the date of
distribution of the contract) which is 50 percent of the amount of the
annuity which is payable during the joint lives of the Participant and
such spouse. The Participant may elect to receive distribution of his
benefits in the form of such annuity as of the earliest date on which
he could elect to receive retirement benefits under the Plan. Within
the period beginning 90 days prior to the Participant's Annuity
Starting Date and ending 30 days prior to such Date, the Administrator
will provide such Participant with a written explanation of (i) the
terms and conditions of the annuity contract described herein, (ii)
the Participant's right to make and the effect of an election to waive
application of this subsection, (iii) the rights of the Participant's
spouse under subsection (d),
41
and (iv) the right to revoke and the period of time effect of a
revocation of the election to waive application of this subsection.
(c) Annuity Death Benefit. Unless the Participant elects to waive
the application of this subsection in a manner satisfying the
requirements of subsection (d) below at any time within the applicable
election period (which election may be revoked, and if revoked,
remade, at any time in such period), if a married Participant to whom
this Section applies dies before his Annuity Starting Date, then
notwithstanding any designation of a Beneficiary to the contrary, 50
percent of his vested Account will be applied to purchase an annuity
contract described in Section 8.02 providing an annuity for the life
of the Participant's surviving spouse, which contract will then be
promptly distributed to such spouse. In lieu of the purchase of such
an annuity contract, the spouse may elect in writing to receive
distributions under the Plan as if he or she had been designated by
the Participant as his Beneficiary with respect to 50 percent of his
Account. For purposes of this subsection, the applicable election
period will commence on the first day of the Plan Year In which the
Participant attains age 35 and will end on the date of the
Participant's death, provided that in the case of a Participant who
terminates his employment the applicable election period with respect
to benefits accrued prior to the date of much termination will in no
event commence later than the date of his termination of employment.
A participant may elect to waive the application of this subsection
prior to the Plan Year in which he attains age 35, provided that any
such waiver will cease to be effective as of the first day of the Plan
Year in which the Participant attains age 35.
The Administrator will provide a Participant to whom this subsection
applies with a written explanation with respect to the annuity death
benefit described in this subsection (c) comparable to that required
under subsection (b) above. Such explanation shall be furnished
within whichever of the following periods ends last: (i) the period
beginning with the first day at the Plan Year in which the Participant
reaches age 32 and ending with the end of the Plan Year preceding the
Plan Year in which he reaches age 35, (ii) a reasonable period ending
after the Employee becomes a Participant, (iii) a reasonable period
ending after this Section 8.04 first becomes applicable to the
Participant in accordance with Section 8.04(a), (iv) in the case of a
Participant who separates from service before age 35, a reasonable
period of time ending after separation from service. For purposes of
the preceding sentence, the two-year period beginning one year prior
to the date of the event described in clause (ii), (iii) or (iv),
whichever in applicable, and ending one year after such date shall be
considered reasonable, provided, that in the case of a Participant who
separates from service under (iv) above and subsequently recommences
employment with the Employer, the applicable period for such
Participant shall be redetermined in accordance with this subsection.
(d) Requirements of Elections. This subsection will be satisfied
with respect to a waiver or designation which is required to satisfy
this subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing,
which consent must acknowledge the effect of such waiver or
designation and be witnessed by a notary public or Plan
representative, or
42
(2) the Participant establishes to the satisfaction of
the Administrator that the consent of the Participant's spouse
cannot be obtained because there is no spouse, because the
spouse cannot be located or because of such other
circumstances as the Secretary of Treasury may prescribe.
Any consent by a spouse, or establishment that the
consent of a spouse may not be obtained, will be effective
only with respect to a specific Beneficiary (including any
class of beneficiaries or any contingent beneficiaries) or
form of benefits identified in the Participant's waiver or
designation, unless the consent of the spouse expressly
permits designations by the Participant without any
requirement of further consent by the spouse. A consent which
permits such designations by the Participant shall acknowledge
that the spouse has the right to limit consent to a specific
Beneficiary and form of benefits and that the spouse
voluntarily elects to relinquish both such rights. A consent
by a spouse shall be irrevocable once made. Any such consent,
or establishment that such consent may not be obtained, will
be effective only with respect to such spouse. For purposes
of subsections (b) and (c) above, no consent of a spouse shall
be valid unless the notice required by such subsection,
whichever is applicable, has been provided to the Participant.
(e) Former Spouse. For purposes of this Section 8.03, a former
spouse of a Participant will be treated as the spouse or surviving
spouse of the Participant, and a current spouse will not be so
treated, to the extent required under a qualified domestic relations
order, as defined in Section 414(p) of the Code.
(f) Vested Account Balance. For purposes of this Section, vested
Account shall the aggregate value of the Participant's vested Account
derived from Employer and Employee contributions (including
rollovers), whether vested before or upon death. The provisions of
this Section shall apply to a Participant who is vested in amounts
attributable to Employer contributions, Employee contributions, or
both, upon death or at the time of distribution.
8.04 Installment Distributions. This Section shall be interpreted and
applied in accordance with the regulations under Section 401(a)(9) of the Code,
including the minimum distribution incidental benefit requirement of section
1.401(a)(9)-2 of the regulations.
(a) In General. If a Participant's benefit may be distributed in
accordance with Section 8.01(b), the amount to be distributed for each
calendar year for which a minimum distribution is required shall be at
least an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the life expectancy of the
Participant or Beneficiary or the joint life and last survivor
expectancy of the Participant and his Beneficiary, whichever is
applicable. For calendar years beginning before January 1, 1989, if a
Participant's Beneficiary is not his spouse, the method of
distribution selected must insure that at least 50 percent of the
present value of the amount available for distribution is paid within
the life expectancy of the Participant. For calendar years beginning
after December 31, 1988 the amount to be distributed for each calendar
year shall not be less than an amount equal to the quotient obtained
by dividing the Participant's interest in his Account by the lesser of
(i) the applicable life expectancy under Section 8.01(b), or (ii) if a
Participant's Beneficiary is not his spouse, the applicable divisor
determined under Section 1.401(a)(9)-2, Q&A 4 of the Proposed
Treasury Regulations, or any successor regulations of similar import.
43
Distributions after the death of the Participant shall be made using
the applicable life expectancy under (i) above, without regard to
Section 1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section
8.08(b), occurs shall be made on or before the Participant's required
beginning date, an so determined. Minimum distributions for other
calendar years shall be made on or before the close of such calendar
year.
(b) Additional Requirements for Distributions After Death of
Participant.
(1) Distribution beginning before Death. If the
Participant dies before distribution of his benefits has
begun, distributions shall be made in accordance with the
provisions of this paragraph. Distributions under Section
8.01(a) shall be completed by the close of the calendar year
in which the fifth anniversary of the death of the Participant
occurs. Distributions under Section 8.01(b) shall commence,
if the Beneficiary is not the Participant's spouse, not later
than the close of the calendar year immediately following the
calendar year in which the death of the Participant occurs.
Distributions under Section 8.01(b) to a Beneficiary who is
the Participant's surviving spouse shall commence not later
than the close of the calendar year in which the Participant
would have attained age 70 1/2 or, if later, the close of the
calendar year immediately following the calendar year in which
the death of the Participant occurs. In the event such spouse
dies prior to the date distribution to him or her commences,
he or she will be treated for purposes of this subsection
(other than the preceding sentence) as if he or she were the
Participant. If the Participant has not designated a
Beneficiary, or the Participant or Beneficiary has not
effectively selected a method of distribution, distribution of
the Participant's benefit shall be completed by the close of
the calendar year in which the fifth anniversary of the death
of the Participant occurs.
Any amount paid to a child of the Participant will be treated
as if it had been paid to the surviving spouse if the amount
becomes payable to the surviving spouse when the child reaches
the age of majority.
For purposes of this subsection (b) (1), the life expectancy
of a Beneficiary who is the Participant's surviving spouse
shall be recalculated annually unless the Participant's spouse
irrevocably elects otherwise prior to the time distributions
are required to begin. Life expectancy shall be computed in
accordance with the provisions of subsection (a) above.
(2) Distribution beginning after Death. If the
Participant dies after distribution of his benefits has begun,
distributions to the Participant's Beneficiary will be made at
least as rapidly as under the method of distribution being
used as of the date of the Participant's death.
For purposes of this Section 8.04(b), distribution of a
Participant's interest in his Account will be considered to begin as of the
Participant's required beginning date, as determined under Section 8.08(b). If
distribution in the form of an annuity irrevocably commences prior to such
date, distribution will be considered to begin as of the actual date
distribution commences.
44
(c) Life Expectancy. For purposes of this Section, life
expectancy shall be recalculated annually in the case of the
Participant or a Beneficiary who is the Participant's spouse unless
the Participant or Beneficiary irrevocably elects otherwise prior to
the time distributions are required to begin. If not recalculated in
accordance with the foregoing, life expectancy shall be calculated
using the attained age of the Participant or Beneficiary, whichever is
applicable, as of such individual's birth date in the first year for
which a minimum distribution is required reduced by one for each
elapsed calendar year since the date life expectancy was first
calculated. For purposes of this Section, life expectancy and joint
life and last survivor expectancy shall be computed by use of the
expected return multiples in Table V and VI of section 1.72-9 of the
income tax Regulations.
A Participant's interest in his Account for purposes of this
Section 8.04 shall be determined as of the last valuation date in the
calendar year immediately preceding the calendar year for which a
minimum distribution is required, increased by the amount of any
contributions allocated to, and decreased by any distributions from,
such Account after the valuation date. Any distribution for the first
year for which a minimum distribution is required made after the close
of such year shall be treated as if made prior to the close of such
year.
8.05. Immediate Distributions. If the Account distributable to a
Participant exceeds, or at the time of any prior distribution exceeded, $3,500,
no distribution will be made to the Participant before he reaches his Normal
Retirement Age (or age 62, if later), unless the written consent of the
Participant has been obtained. Such consent shall be made in writing within
the 90-day period ending on the Participant's Annuity Starting Date. Within the
period beginning 90 days before the Participant's Annuity Starting Date and
ending 30 days before such Date, the Administrator will provide such
Participant with written notice comparable to the notice described in Section
8.03(b) containing a general description of the material features and an
explanation of the relative values of the optional forms of benefit available
under the Plan and informing the Participant of his right to defer receipt of
the distribution until his Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the
Participant is subject to the provisions of Section 8.03(a), unless the
distribution will be made in the form of the applicable retirement annuity
contract described in Section 8.03(b). A spouse's consent to early
distribution, if required, must satisfy the requirements of section 8.03(d).
Neither the consent of the Participant nor the Participant's spouse
shall be required to the extent that a distribution is required to satisfy
Section 401(a)(9) or Section 415 of the Code. In addition, upon termination
of the Plan if it does not offer an annuity option (purchased from a commercial
provider) and if the Employer or any Related Employer does not maintain another
defined contribution plan (other than an employee stock ownership plan
as defined in Code Section 4975(e)(7)) the Participant's Account will, without
the Participant's consent, be distributed to the Participant. However, if any
Related Employer maintains another defined contribution plan (other than an
employee stock ownership plan an defined in Section 4975(e)(7) of the Code)
then the Participant's Account will be transferred, without the Participant's
consent, to the other plan if the Participant does not consent to an immediate
distribution.
45
8.06. Determination of Method of Distribution. The Participant will
determine the method of distribution of benefits to himself and may determine
the method of distribution to his Beneficiary. Such determination will be made
prior to the time benefits become payable under the Plan. If the Participant
does not determine the method of distribution to his Beneficiary or if the
Participant permits his Beneficiary to override his determination, the
Beneficiary, in the event of the Participant's death, will determine the method
of distribution of benefits to himself as if he were the Participant. A
determination by the Beneficiary must be made no later than the close of the
calendar year in which distribution would be required to begin under Section
8.04(b) or, if earlier, the close of the calendar year in which the fifth
anniversary of the death of the Participant occurs.
8.07. Notice to Trustee. The Administrator will notify the Trustee in
writing whenever any Participant or Beneficiary is entitled to receive benefits
under the Plan. The Administrator's notice shall indicate the form of benefits
that such Participant or Beneficiary shall receive and (in the case of
distributions to a Participant) the name of any designated Beneficiary or
Beneficiaries.
8.08. Time of Distribution. In no event will distribution to a Participant
be made later than the earlier of the dates described in (a)and (b) below:
(a) Absent the consent of the Participant (and his spouse, if
appropriate), the 60th day after the close of the Plan Year in which
occurs the later of the date on which the Participant attains age 65,
the date on which the Participant ceases to be employed by the
Employer; or the 10th anniversary of the year in which the Participant
commenced participation in the Plan; and
(b) April 1 of the calendar year first following the calendar year
in which the Participant attains age 70 1/2 or, in the case of a
Participant who had attained age 70 1/2 before January 1, 1988, the
required beginning date determined in accordance with (1) or (2)
below:
(1) The required beginning date of a Participant who is
not a 5-percent owner in the first day of April of the
calendar year following the calendar year in which the later
of retirement or attainment of age 70-1/2 occurs.
(2) The required beginning date of a Participant who is a
5-percent owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(i) the calendar year in which the participant
attains age 70-1/2, or
(ii) the earlier of the calendar year with or
within which ends the plan year in which the
participant becomes a 5-percent owner, or the
calendar year in which the participant retires.
Notwithstanding the foregoing, in the case of a Participant who
attained age 70 1/2 during 1988 and who had not retired prior to January 1,
1989, the required beginning date described in this paragraph shall be April 1,
1990.
Notwithstanding (a) above, the failure of a Participant (and spouse)
to consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 8.05, shall be deemed to be
46
an election to defer commencement of payment of any benefit sufficient to
satisfy (a) above.
Once distributions have begun to a 5-percent owner under (b) above,
they must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
For purposes of (b) above, a Participant is treated as a 5-percent
owner if such participant in a 5-percent owner as defined in Section 416(i) of
the Code (determined in accordance with 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 such owner attains age 66-1/2 or any
subsequent plan year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution
rules set forth in this Section.
8.09. Whereabouts of Participants and Beneficiaries. The Administrator will
at all times be responsible for determining the whereabouts of each Participant
or Beneficiary who may be entitled to benefits under the Plan and will at all
times be responsible for instructing the Trustee in writing as to the current
address of each such Participant or Beneficiary. The Trustee will be entitled
to rely on the latest written statement received from the Administrator as to
such addresses. The Trustee will be under no duty to make any distributions
under the Plan unless and until it has received written instructions from the
Administrator satisfactory to the Trustee containing the name and address of
the distributee, the time when the distribution is to occur, and the form which
the distribution will take. Notwithstanding the foregoing, if the Trustee
attempts to make a distribution in accordance with the Administrator's
instructions but is unable to make such distribution because the whereabouts of
the distributee is unknown, the Trustee will notify the Administrator of such
situation and thereafter the Trustee will be under no duty to make any further
distributions to such distributee until it receives further written
instructions from the Administrator. If a benefit is forfeited because the
Administrator determines that the Participant or beneficiary cannot be found,
such benefit will be reinstated by the Sponsor if a claim is filed by the
Participant or Beneficiary with the Administrator and the Administrator
confirms the claim to the Sponsor.
Article 9. Top-Heavy Provisions.
9.01 Application. If the Plan is or becomes a Top-Heavy Plan in any Plan
Year or is automatically deemed to be Top-Heavy in accordance with the
Employer's election in Section 1.12(a)(1) of the Adoption Agreement, the
provisions of this Article 9 shall supersede any conflicting provision in the
Plan.
9.02 Definitions. For purposes of this Article 9, the following terms have
the meanings set forth below:
(a) Key Employee. Any Employee or former Employee (and the
Beneficiary of any such Employee) who at any time during the
determination period was (i) an officer of the Employer whose annual
compensation exceeds 50 percent of the dollar limitation under Section
415(b)(1)(A) of the Code, (ii) an owner (or considered an owner under
Section 318 of the Code) of one of the ten largest interests in the
Employer if such individual's annual compensation exceeds the dollar
limitation under Section 415(c)(1)(A) of the Code, (iii) a 5-percent
owner of the Employer, or (iv) a 1-percent owner of the Employer who
has annual compensation of more than $150,000. For purposes of this
47
paragraph, the determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee shall be made in accordance
with Section 416(i)(1) of the Code and the regulations thereunder.
Annual compensation means compensation as defined in Section
5.03(e)(2), but including amounts contributed by the Employer pursuant
to a salary reduction agreement which are excludable from the
employee's gross income under Section 125, Section 402(a)(8), and
Section 403(b) of the Code.
(b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the
following conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent
and the Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group;
(2) the Plan is a part of a Required Aggregation Group
but not part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the Required Aggregation Group exceeds 60
percent; or
(3) the Plan is a part of a Required Aggregation Group
and a Permissive Aggregation Group and the Top-Heavy Ratio for
both Groups exceeds 60 percent.
(c) Top-Heavy Ratio.
(1) With respect to this Plan, or with respect to any
Required Aggregation Group or Permissive Aggregation Group
that consists solely of defined contribution plans (including
any simplified employee pension plans) and the Employer has
not maintained any defined benefit plan which during the
5-year period ending on the determination date(s) has or has
had accrued benefits, the Top-Heavy Ratio is a fraction, the
numerator of which is the sum of the account balances of all
Key Employees under the plans as of the Determination Date
(including any part of any account balance distributed in the
5-year period ending on the Determination Date), and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the
5-year period ending on the Determination Date) of all
participants under the plans as of the Determination Date.
Both the numerator and denominator of the Top-Heavy Ratio
shall be increased, to the extent required by Section 416 of
the Code, to reflect any contribution which is due but unpaid
as of the Determination Date.
(2) With respect to any Required Aggregation Group or
Permissive Aggregation Group that includes one or more defined
benefit plans which, during the 5-year period ending on the
Determination Date, has covered or could cover a Participant
in this Plan, the Top-Heavy Ratio is a fraction, the numerator
of which is the sum of the account balances under the defined
contribution plans for all Key Employees and the present value
of accrued benefits under the defined benefit plans for all
Key Employees, and the denominator of which is the sum of the
account balances under the defined contribution plans for all
participants and the present value of accrued benefits under
the defined benefit plans for all participants. Both the
numerator and denominator of the Top-Heavy Ratio shall be
increased for any distribution of an account balance or an
accrued benefit made in the 5-year period ending on the
Determination Date and any contribution due but unpaid as of
the Determination Date.
48
(3) For purposes of (1) and (2) above, the value of
Accounts and the present value of accrued benefits will be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The Account and accrued
benefits of a Participant (i) who is not a Key Employee but
who was a Key Employee in a prior year, or (ii) who has not
been credited with at least one Hour of Service with the
Employer at any time during the 5-year period ending on the
Determination Date, will be disregarded. The calculation of
the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account, shall be made
in accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions shall not be
taken into account for purposes of computing the Top-Heavy
Ratio. When aggregating plans, the value of Accounts and
accrued benefits shall be calculated with reference to the
Determination Dates that fall within the same calendar year.
For purposes of determining if the Plan, or any other
plan included in a Required Aggregation Group of which this
Plan is a part, is a Top-Heavy Plan, the accrued benefit in a
defined benefit plan of an Employee other than a Key Employee
shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all plans
maintained by the Employer, or (b) if there is no such method,
as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of
Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group
plus any other qualified plans of the Employer or a Related Employer
which, when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Sections 401(a)(4) and
410 of the Code.
(e) Required Aggregation Group.
(1) Each qualified plan of the Employer or Related
Employer in which at least one Key Employee participates, or
has participated at any time during the determination period
(regardless of whether the plan has terminated), and
(2) any other qualified plan of the Employer or Related
Employer which enables a plan described in (1) above to meet
the requirements of Sections 401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent
to the first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date.
(h) Present Value. Present value shall be based only on the
interest rate and mortality table specified in the Adoption Agreement.
9.03. Minimum Contribution.
49
(a) Except as otherwise provided in (b) and (c) below, the
Fixed/Discretionary Contributions made on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of 3
percent (or such other percent elected by the Employer in Section
1.12(c)) of such Participant's Compensation or, in the case where the
Employer has no defined benefit plan which designates this Plan to
satisfy Section 401 of the Code, the largest percentage of Employer
contributions, as a percentage of the first $200,000 of the Key
Employee's Compensation, made on behalf of any Key Employee for that
year. If the Employer selected the Integrated Formula in Section
1.05(a)(2), the minimum contribution shall be determined under
paragraph (e) of this Section 9.03. Further, the minimum contribution
under this Section 9.03 shall be made even though, under other Plan
provisions, the Participant would not otherwise be entitled to receive
a contribution, or would have received a lesser contribution for the
year, because (i) the Participant failed to complete 1,000 Hours of
Service or any equivalent service requirement provided in the Adoption
Agreement; or (ii) the Participant's Compensation was less than a
stated amount.
(b) The provisions of (a) above shall not apply to any Participant
who was not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of
each Participant who is not a Key Employee and who is a participant in
a defined benefit plan maintained by the Employee shall not be less
than 5 percent of such Participant's compensation, unless the Employer
has provided in Section 1.12(c) that the minimum contribution
requirement will be met in the other plan or plans of the Employer.
(d) The minimum contribution required under (a) above (to the
extent required to be nonforfeitable under Section 416(b) of the Code)
may not be forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the
Code.
(e) If the Employer elected an Integrated Formula in Section
1.05(a)(2), the allocation steps in Section 4.06(b)(2) shall be
preceded by the following steps:
(1) The Discretionary Employer Contributions will be
allocated to each eligible Participant (as determined under this
Section 9.03) in the ratio that the Participant's Compensation bears
to all Participants' Compensation, but not in excess of 3% (or such
other percent elected by the Employer in Section 1.12(c).
(2) Any Discretionary Employer Contributions remaining after
(e)(1) above will be allocated to each eligible Participant in the
ratio that the Participant's Excess Compensation for the Plan Year
bears to the Excess Compensation of all eligible Participants, but not
in excess of 3% (or such other percent elected by the Employer in
Section 1.12(c)).
9.04. Adjustment to the Limitation on Contributions and Benefits. If this
Plan is in Top-Heavy status, the number 100 shall be substituted for the number
125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this
substitution shall not take effect with respect to this Plan in any Plan Year
in which the following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf
of each Participant who is not a Key Employee and who is a
50
participant in a defined benefit plan maintained by the Employer is
not less than 7 1/2 percent of such Participant's Compensation.
(b) The sum of the present value as of the Determination Date of
(i) the aggregate accounts of all Key Employees under all defined
contribution plans of the Employer and (ii) the cumulative accrued
benefits of all Key Employees under all defined benefit plans of the
Employer does not exceed 90 percent of the same amounts determined for
all Participants under all plans of the Employer that are Top-Heavy
Plans, excluding Accounts and accrued benefits for Employees who
formerly were but are no longer Key Employees.
The substitutions of the number 100 for 125 shall not take
effect in any limitation Year with respect to any Participant for whom
no benefits are accrued or contributions made for such Year.
9.05. Minimum Vesting. For any Plan Year in which the Plan in a Top-Heavy
Plan and all Plan Years thereafter, the Top-Heavy vesting schedule elected in
Section 1.12(d) will automatically apply to the Plan. The Top-Heavy vesting
schedule applies to all benefits within the meaning of Section 411(a)(7) of the
Code except those attributable to Employee Contributions or those already
subject to a vesting schedule which vests at least as rapidly in all cases as
the schedule elected in Section 1.12(d), including benefits accrued before the
Plan becomes a Top-Heavy Plan. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year. However, this Section 9.O5 does not
apply to the Account of any Employee who does not have an Hour of Service after
the Plan has initially become a Top-Heavy Plan and such Employee's Account
attributable to Employer Contributions will be determined without regard to
this Section 9.05.
Article 10. Amendment and Termination.
10.01 Amendment by Employer. The Employer reserves the authority, subject
to the provisions of Article I and Section 10.03, to amend the Plan:
(a) Changing Elections Contained in the Adoption Agreement. By
filing with the Trustee an amended Adoption Agreement, executed by the
Employer only, on which said Employer has indicated a change or
changes in provisions previously elected by it. Such changes are to
be effective on the effective date of such amended Adoption Agreement
except that retroactive changes to a previous election or elections
pursuant to the regulations issued under Section 401(a)(4) of the Code
shall be permitted. Any such change notwithstanding, no Participant's
Account shall be reduced by such change below the amount to which the
Participant would have been entitled if he had voluntarily left the
employ of the Employer immediately prior to the date of the change.
The Employer may from time to time make any amendment to the Plan that
may be necessary to satisfy Sections 415 or 416 of the Code because of
the required aggregation of multiple plans by completing overriding
Plan language in the Adoption Agreement. The Employer may also add
certain model amendments published by the Internal Revenue Service
which specifically provide that their adoption will not cause the Plan
to be treated as an individually designed plan; or
(b) Other Changes. By amending any provision of the Plan for any
reason other than those specified in (a) above. However, upon making
such amendment, including a waiver of the minimum funding requirement
under Section 412(d) of the Code, the Employer may no longer
participate in this prototype plan arrangement and will be
51
deemed to have an individually designed plan. Following such
amendment, the Trustee may transfer the assets of the Trust to the
trust forming part of such newly adopted plan upon receipt of
sufficient evidence (such as a determination letter or opinion letter
from the Internal Revenue Service or an opinion of counsel
satisfactory to the Trustee) that such trust will be a qualified trust
under the Code.
10.02. Amendment by Prototype Sponsor. The Prototype Sponsor may in its
discretion amend the Plan or the Adoption Agreement at any time, subject to the
provisions of Article I and Section 10.03, and provided that the Prototype
Sponsor mails a copy of such amendment to the Employer at its last known
address as shown on the books of the Prototype Sponsor.
10.03. Amendments Affecting Vested and/or Accrued Benefits.
(a) Except as permitted by Section 10.04, no amendment to the Plan
shall be effective to the extent that it has the effect of decreasing
a Participant's Account or eliminating an optional form of benefit
with respect to benefits attributable to service before the amendment.
Furthermore, if the vesting schedule of the Plan in amended, the
nonforfeitable interest of a Participant in his Account, determined as
of the later of the date the amendment is adopted or the date it
becomes effective, will not be less than the Participant's
nonforfeitable interest in his Account determined without regard to
such amendment.
(b) If the Plan's vesting schedule is amended, including any
amendment resulting from a change to or from Top-Heavy Plan status, or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's nonforfeitable interest in his Account,
each Participant with at least three (3) Years of Service for Vesting
with the Employer may elect, within a reasonable period after the
adoption of the amendment, to have the nonforfeitable percentage of
his Account computed under the Plan without regard to such amendment.
The Participant's election may be made within 60 days from the latest
of (i) the date the amendment is adopted; (ii) the date the amendment
becomes effective; or (iii) the date the Participant is issued written
notice of the amendment by the Employer or the Administrator.
10.04. Retroactive Amendments. An amendment made by the sponsor in
accordance with Section 10.02 may be made effective on a date prior to the
first day of the Plan Year in which it is adopted if such amendment is
necessary or appropriate to enable the Plan and Trust to satisfy the applicable
requirements of the Code or to conform the Plan to any change in federal law,
or to any regulations or ruling thereunder. Any retroactive amendment by the
Employer shall be subject to the provisions of Section 10.01.
10.04. Termination. The Employer has adopted the Plan with the intention and
expectation that contributions will be continued indefinitely. However, said
Employer has no obligation or liability whatsoever to maintain the Plan for any
length of time and may discontinue contributions under the Plan or terminate
the Plan at any time by written notice delivered to the Trustee without any
liability hereunder for any such discontinuance or termination.
10.06. Distribution upon Termination of the Plan. Upon termination or
partial termination of the Plan or complete discontinuance of contributions
thereunder, each Participant (including a terminated Participant with respect
to amounts not previously forfeited by him) who is affected by such termination
or partial termination or discontinuance
52
will have a fully vested interest in his Account, and, subject to section 4.05
and Article 8, the Trustee will distribute to each Participant or other person
entitled to distribution the balance of the Participant's Account in a single
lump sum payment. In the absence of such instructions, the Trustee will notify
the Administrator of such situation and the Trustee will be under no duty to
make any distributions under the Plan until it receives written instructions
from the Administrator. Upon the completion of such distributions, the Trust
will terminate, the Trustee will be relieved from all liability under the
Trust, and no Participant or other person will have any claims thereunder,
except as required by applicable law.
10.07. Merger or Consolidation of Plan; Transfer of Plan Assets. In case of
any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that each
Participant would, if the Plan then terminated, receive a benefit immediately
after the merger, consolidation or transfer which is equal to or greater than
the benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
Article 11. Amendment and Continuation of Predecessor Plan: Transfer of Funds
to or from Other Qualified Plans.
11.01. Amendment and Continuation of Predecessor Plan. In the event the
Employer has previously established a plan (the "predecessor plan") which is a
defined contribution plan under the Code and which an the date of adoption of
the Plan meets the applicable requirements of section 401(a) of the code, the
Employer may, in accordance with the provisions of the predecessor plan, amend
and continue the predecessor plan in the form of the Plan and become the
Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was
a Participant or former Participant in the predecessor plan
immediately prior to the effective date of such amendment and
continuation will become a Participant or former Participant in the
Plan;
(b) No election may be made under the vesting provisions of the
Adoption Agreement if such election would reduce the benefits of a
Participant under the Plan to less than the benefits to which he would
have been entitled if he voluntarily separated from the service of the
Employer immediately prior to such amendment and continuation;
(c) No amendment to the Plan shall decrease a Participant's
accrued benefit or eliminate an optional form of benefit and if the
amendment of the predecessor plan in the form of the Plan results in a
change in the method of crediting service for vesting purposes between
the general method set forth in Section 2530.200b-2 of the Department
of Labor Regulations and the elapsed time method in Section
2.01(a)(33) of the Plan, each Participant with respect to whom the
method of crediting vesting service is changed shall be treated in the
manner set forth by the provisions of Section 1.410(a)-7(f)(1) of the
Treasury Regulations which are incorporated herein by reference.
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent
the amounts properly attributable to (i) contributions by the
Participant and (ii) contributions by the Employer and
53
forfeitures will constitute the opening balance of his Account or
Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary
in accordance with the provisions of the predecessor plan will
continue to be paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement
annuity in effect after August 23, 1984, under the predecessor plan
immediately before such amendment and continuation will be deemed a
valid election and waiver of Beneficiary under Section 8.04 if such
designation satisfies the requirements of Section 8.04(d), unless and
until the Participant revokes such election and waiver under the Plan;
and
(g) Unless the Employer and the Trustee agree otherwise, all
assets of the predecessor trust will be deemed to be assets of the
Trust as of the effective date of such amendment. Such assets will
be invested by the Trustee as soon as reasonably practicable pursuant
to Article 6. The Employer agrees to assist the Trustee in any way
requested by the Trustee in order to facilitate the transfer of
assets from the predecessor trust to the Trust Fund.
11.02. Transfer of Funds from an Existing Plan. The Employer may from time
to time direct the Trustee, in accordance with such rules as the Trustee may
establish, to accept cash, allowable Fund Shares or participant loan promissory
notes transferred for the benefit of Participants from a trust forming part of
another qualified plan under the Code, provided such plan is a defined
contribution plan. Such transferred assets will become assets of the Trust as
of the date they are received by the Trustee. Such transferred assets will be
credited to Participants' Account in accordance with their respective interests
immediately upon receipt by the Trustee. A Participant's interest under the
Plan in transferred assets which were fully vested and nonforfeitable under the
transferring plan will be fully vested and nonforfeitable at all times. Such
transferred assets will be invested by the Trustee in accordance with the
provisions of paragraph (g) of Section 11.01 as if such assets were transferred
from a predecessor plan. No transfer of assets in accordance with this Section
may cause a loss of an accrued or optional form of benefit protected by Section
411(d)(6) of the Code.
11.03. Acceptance of Assets by Trustee. The Trustee will not accept assets
which are not either in a medium proper for investment under the Plan, as set
forth in Section 1.14(b), or in cash. Such assets shall be accompanied by
written instructions showing separately the respective contributions by the
prior employer and by the Employee, and identifying the assets attributable to
such contributions. The Trustee shall establish such accounts as may be
necessary or appropriate to reflect such contributions under the Plan. The
Trustee shall hold such assets for investment in accordance with the provisions
of Article 6, and shall in accordance with the written instructions of the
Employer make appropriate credits to the Accounts of the Participants for whose
benefit assets have been transferred.
11.04. Transfer of Assets from Trust. The Employer may direct the Trustee to
transfer all or a specified portion of the Trust assets to any other plan or
plans maintained by the Employer or the employer or employers of a former
Participant or Participants, provided that the Trustee has received evidence
satisfactory to it that such other plan meets all applicable requirements of
the Code. The assets so transferred shall be accompanied by written
instructions from the Employer naming the persons for whose benefit such assets
have been
54
transferred, showing separately the respective contributions by the Employer
and by each Participant, if any, and identifying the assets attributable to the
various contributions. The Trustee shall have no further liabilities with
respect to assets so transferred.
Article 12. Miscellaneous.
12.01. Communication to Participants. The Plan will be communicated to all
Participants by the Employer promptly after the Plan is adopted.
12.02. Limitation of Rights. Neither the establishment of the Plan and the
Trust, nor any amendment thereof, nor the creation of any fund or account, nor
the payment of any benefits, will be construed as giving to any Participant or
other person any legal or equitable right against the Employer, Administrator
or Trustee, except as provided herein; and in no event will the terms of
employment or service of any Participant be modified or in any way affected
hereby. It is a condition of the Plan, and each Participant expressly agrees
by his participation herein, that each Participant will look solely to the
assets held in the Trust for the payment of any benefit to which he is entitled
under the Plan.
12.03. Nonalienability of Benefits and Qualified Domestic Relations Orders.
The benefits provided hereunder will not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind, either voluntarily or
involuntarily, and any attempt to cause such benefits to be so subjected will
not be recognized, except to such extent as may be required by law. The
preceding sentence shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined by the Plan
Administrator to be a qualified domestic relations order, as defined in Section
414(p) of the Code, or any domestic relations order entered before January 1,
1985. The Administrator must establish reasonable procedures to determine the
qualified status of a domestic relations order. upon receiving a domestic
relations order, the Administrator will promptly notify the Participant and any
alternate payee named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the order. Within
a reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must notify
the Participant and each alternate payee, in writing, of its determination.
The Administrator must provide notice under this paragraph by mailing to the
individual's address specified in the domestic relations order, or in a manner
consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the
period the Administrator is making its determination of the qualified status of
the domestic relations order, the Administrator must make a separate accounting
of the amounts payable. If the Administrator determines the order is a
qualified domestic relations order within 18 months of the date amounts first
are payable following receipt of the order, the Administrator will direct the
Trustee to distribute the payable amounts in accordance with the order. If the
Administrator does not make his determination of the qualified status of the
order within the 18 month determination period, the Administrator will direct
the Trustee to distribute the payable amounts in the manner the Plan would
distribute if the order did not exist and will apply the order prospectively if
the Administrator later determines the order in a qualified domestic relations
order.
A domestic relations order will not fail to be deemed a qualified
domestic relations order merely because it requires the distribution or
segregation of all or part of a Participant's Account with respect to an
55
alternate payee prior to the Participant's earliest retirement age (as defined
in Section 414(p) of the Code) under the Plan. A distribution to an alternate
payee prior to the Participant's attainment of the earliest retirement age is
available only if: (1) the order specifies distribution at that time; and (2)
if the present value of the alternate payee's benefits under the Plan exceeds
$3,500, and the order requires, the alternate payee consents to any
distribution occurring prior to the Participant's attainment of earliest
retirement age.
12.04. Facility of Payment. In the event the Administrator determines, on
the basis of medical reports or other evidence satisfactory to the
Administrator, that the recipient of any benefit payments under the Plan is
incapable of handling his affairs by reason of minority, illness, infirmity or
other incapacity, the Administrator may direct the Trustee to disburse such
payments to a person or institution designated by a court which has
jurisdiction over such recipient or a person or institution otherwise having
the legal authority under State law for the care and control of such recipient.
The receipt by such person or institution of any such payments shall be
complete acquittance therefore, and any such payment to the extent thereof,
shall discharge the liability of the Trust for the payment of benefits
hereunder to such recipient.
12.05. Information between Employer and Trustee. The Employer agrees to
furnish the Trustee, and the Trustee agrees to furnish the Employer with such
information relating to the Plan and Trust as may be required by the other in
order to carry out their respective duties hereunder, including without
limitation information required under the Code and any regulations issued or
forms adopted by the Treasury Department thereunder or under the provisions of
ERISA and any regulations issued or forms adopted by the Labor Department
thereunder.
12.06. Effect of Failure to Qualify under Code. Notwithstanding any other
provision contained herein, if the Employer fails to obtain or retain approval
of the Plan by the Internal Revenue Service as a qualified Plan under the Code,
the Employer may no longer participate in this prototype Plan arrangement and
will be deemed to have an individually designed plan.
12.07. Notices. Any notice or other communication in connection with this
Plan shall be deemed delivered in writing if addressed as provided below and if
either actually delivered at said address or, in the case of a letter, three
business days shall have elapsed after the same shall have been deposited in
the United States mails, first-class postage prepaid and registered or
certified:
(a) If to the Employer or Administrator, to it at the address set
forth in the Adoption Agreement, to the attention of the person
specified to receive notice in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the
Adoption Agreement;
or, in each case at such other address as the addressee shall have specified
by written notice delivered in accordance with the foregoing to the addressor's
then effective notice address.
12.08. Governing Law. The Plan and the accompanying Adoption Agreement will
be construed, administered and enforced according to ERISA, and to the extent
not preempted thereby, the laws of the Commonwealth of Massachusetts.
56
Article 13. Plan Administration.
13.01. Powers and responsibilities of the Administrator. The Administrator
has the full power and the full responsibility to administer the Plan in all of
its details, subject, however, to the requirements of ERISA. The
Administrator's powers and responsibilities include, but are not limited to,
the following:
(a) To make and enforce such rules and regulations as it deems
necessary or proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good
faith to be final and conclusive on all persons claiming benefits
under the Plan;
(c) To decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan;
(d) To administer the claims and review procedures specified in
Section 13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will
be paid;
(g) To authorize the payment of benefits and provide for the
distribution of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of
Part 1 of Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants
as may be required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of
ERISA.
13.02. Nondiscriminatory Exercise of Authority. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.
13.03. Claims and Review Procedures.
(a) Claims Procedure. If any person believes he is being denied
any rights or benefits under the Plan, such person may file a claim in
writing with the Administrator. If any such claim is wholly or
partially denied, the Administrator will notify such person of its
decision in writing. Such notification will contain (i) specific
reasons for the denial, (ii) specific reference to pertinent Plan
provisions, (iii) a description of any additional material or
information necessary for such person to perfect such claim and an
explanation of why such material or information is necessary, and (iv)
information as to the steps to be taken if the person wishes to submit
a request for review. Such notification will be given
57
within 90 days after the claim is received by the Administrator (or
within 180 days, if special circumstances require an extension of time
for processing the claim, and if written notice of such extension and
circumstances is given to such person within the initial 90-day
period). If such notification in not given within such period, the
claim will be considered denied as of the last day of such period and
such person may request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a
person receives a written notice of a denied claim (or, if applicable,
within 60 days after the date on which such denial in considered to
have occurred), such person (or his duly authorized representative)
may (i) file a written request with the Administrator for a review of
his denied claim and of pertinent documents and (ii) submit written
issues and comments to the Administrator. The Administrator will
notify such person of its decision in writing. Such notification will
be written in a manner calculated to be understood by such person and
will contain specific reasons for the decision as well as specific
references to pertinent Plan provisions. The decision on review will
be made within 60 days after the request for review is received by the
Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by
the Administrator to hold a hearing, and if written notice of such
extension and circumstances is given to such person within the initial
60-day period). If the decision on review is not made within such
period, the claim will be considered denied.
13.04. Named Fiduciary. The Administrator is a "named fiduciary" for purposes
of Section 402(a)(1) of ERISA and has the powers and responsibilities with
respect to the management and operation of the Plan described herein.
13.05. Costs of Administration. Unless some or all are paid by the Employer,
all reasonable costs and expenses (including legal, accounting, and employee
communication fees) incurred by the Administrator and the Trustee in
administering the Plan and Trust will be paid first from the forfeitures (if
any) resulting under Section 7.07, then from the remaining Trust Fund. All
such costs and expenses paid from the Trust Fund will, unless allocable to the
Accounts of particular Participants, be charged against the Accounts of all
Participants on a prorata basis or in such other reasonable manner as may be
directed by the Employer.
ARTICLE 14. Trust Agreement.
14.01. Acceptance of Trust Responsibilities. By executing the Adoption
Agreement, the Employer establishes a trust to hold the assets of the plan. By
executing the Adoption Agreement, the Trustee agrees to accept the rights,
duties and responsibilities set forth in this Article 14.
14.02. Establishment of Trust Fund. A trust is hereby established under the
Plan and the Trustee will open and maintain a Trust account for the Plan and,
as part thereof, Participants' Accounts for such individuals as the Employer
shall from time to time give written notice to the Trustee are Participants in
the Plan. The Trustee will accept and hold in the Trust Fund such
contributions on behalf of Participants as it may receive from time to time
from the Employer. The Trust Fund shall be fully invested and reinvested in
accordance with the applicable provisions of the Plan in Fund Shares or as
otherwise provided in Section 14.10.
14.03. Exclusive Benefit. The Trustee shall hold the assets of the Trust
Fund for the exclusive purpose of providing benefits to
58
Participants and Beneficiaries and defraying the reasonable expenses of
administering the Plan. No assets of the Plan shall revert to the Employer
except as specifically permitted by the terms of the Plan.
14.04. Powers of Trustee. The Trustee shall have no discretion or authority
with respect to the investment of the Trust Fund but shall act solely as a
directed trustee of the funds contributed to it. In addition to and not in
limitation of such powers as the Trustee has by law or under any other
provisions of the Plan, the Trustee will have the following powers, each of
which the Trustee exercises solely as directed Trustee in accordance with the
written direction of the Employer except to the extent a Plan asset is subject
to Participant direction of investment and provided that no such power shall be
exercised in any manner inconsistent with the provisions of ERISA:
(a) to deal with all or any part of the Trust Fund and to invest all
or a part of the Trust Fund in investments available under the Plan, without
regard to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or
advisable, without liability for interest thereon, for the administration of the
Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or
any part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights an behalf
of the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) to employ such agents and counsel an may be reasonably necessary
in collecting, managing, administering, investing, distributing and protecting
the Trust Fund or the assets thereof and to pay them reasonable compensation;
(f) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise, to pay
assessments and expenses in connection therewith, and to deposit securities
under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with
Section 8.02;
(i) to hold securities unregistered, or to register them in its own
name or in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction
of the district courts of the United States and to deposit securities with stock
clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments
that it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect
to all or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates
of the Trustee may act as its agent in the performance of
59
ministerial, nonfiduciary duties under the Trust. The expenses and
compensation of such agent shall be paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any
claim filed against the Plan or Trust or with regard to any related matter, or
of any claim filed by the Trustee on behalf of the Plan or Trust or with regard
to any related matter.
14.O5. Accounts. The Trustee will keep full accounts of all receipts and
disbursements and other transactions hereunder. Within 60 days after the close
of each Plan Year, within 60 days after termination of the Trust, and at such
other times as may be appropriate, the Trustee will determine the then net fair
market value of the Trust Fund as of the close of the Plan Year, as of the
termination of the Trust, or as of such other time, whichever in applicable,
and will render to the Employer and Administrator an account of its
administration of the Trust during the period since the last such accounting,
including all allocations made by it during such period.
14.06. Approving of Accounts. To the extent permitted by law, the written
approval of any account by the Employer or Administrator will be final and
binding, as to all matters and transactions stated or shown therein, upon the
Employer, Administrator, Participants and all persons who then are or
thereafter become interested in the Trust. The failure of the Employer or
Administrator to notify the Trustee within six (6) months after the receipt of
any account of its objection to the account will, to the extent permitted by
law, be the equivalent of written approval. If the Employer or Administrator
files any objections within such six (6) month period with respect to any
matters or transactions stated or shown in the account, and the Employer or
Administrator and the Trustee cannot amicably settle the question raised by
such objections, the Trustee will have the right to have such questions settled
by judicial proceedings. Nothing herein contained will be construed so as to
deprive the Trustee of the right to have judicial settlement of its accounts.
In any proceeding for a judicial settlement of any account or for instructions,
the only necessary parties will be the Trustee, the Employer and the
Administrator.
14.07. Distribution from Trust Fund. The Trustee shall make such
distribution from the Trust Fund as the Employer or Administrator may in
writing direct, as provided by the terms of the Plan, upon certification by the
Employer or Administrator that the same is for the exclusive benefit of
Participants or their Beneficiaries, or for the payment of expenses of
administering the Plan.
14.08. Transfer of Amounts from Qualified Plan. If the Plan provides that
amounts may be transferred to the Plan from another qualified plan or trust
under Section 401(a) of the Code, such transfer shall be made in accordance
with the provisions of the Plan and with such rules as may be established by
the Trustee. The Trustee will only accept assets which are in a medium proper
for investment under this Agreement or in cash. Such amounts shall be
accompanied by written instructions showing separately the respective
contributions by the prior employer and the transferring Employee, and
identifying the assets attributable to such contributions. The Trustee shall
hold such assets for investment in accordance with the provisions of this
Agreement.
14.09. Transfer of Assets from Trust. Subject to the provisions of the Plan,
the Employer may direct the Trustee to transfer all or a specified portion of
the Trust assets to any other plan or plans maintained by the Employer or the
employer or employers of a former Participant or Participants, provided that
the Trustee has received evidence satisfactory to it that such other plan meets
all applicable requirements of the Code. The assets so transferred shall be
60
accompanied by written instructions from the Employer naming the persons for
whose benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any, and
identifying the assets attributable to the various contributions. The Trustee
shall have no further liabilities with respect to assets so transferred.
14.10. Separate Trust or Fund for Existing Plan Assets. With the consent of
the Trustee, the Employer may maintain a trust or fund (including a group
annuity contract) under this prototype plan document separate from the Trust
Fund for Plan assets purchased prior to the adoption of this prototype plan
document which are not Fidelity Funds listed in Section 1.14(b). The Trustee
shall have no authority and no responsibility for the Plan assets held in such
separate trust or fund. The duties and responsibilities of the trustee of a
separate trust shall be provided by a separate trust agreement, between the
Employer and the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate
of the Trustee may agree in writing to provide ministerial recordkeeping
services for guaranteed investment contracts held in the separate trust or
fund. The guaranteed investment contract(s) shall be valued an directed by the
Employer or the Trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee")
will be the owner of any insurance contract purchased prior to the adoption of
this prototype plan document. The insurance contract(s) must provide that
proceeds will be payable to the trustee, however the trustee shall be required
to pay over all proceeds of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution provisions of this plan. A
Participant's spouse will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in accordance with
Article 8. Under no circumstances shall the trust retain any part of the
proceeds. In the event of any conflict between the terms of this plan and the
terms of any insurance contract purchased hereunder, the plan provisions shall
control.
Any life insurance contracts held in the Trust Fund or in the separate
trust are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance
provisions, ordinary life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. If such
contracts are held, less than 1/2 of the aggregate employer
contributions allocated to any Participant will be used to pay the
premiums attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate
employer contributions allocated to any participant will be used to
pay the premiums on term life insurance contracts, universal life
insurance contracts, and all other life insurance contracts which are
not ordinary life.
(c) Combination - The sum of 1/2 of the ordinary life insurance
premiums and all other life insurance premiums will not exceed 1/4 of
the aggregate employer contributions allocated to any Participant.
14.11. Voting; Delivery of Information. The Trustee shall deliver, or cause
to be executed and delivered, to the Employer or Plan Administrator all
notices, prospectuses, financial statements, proxies and proxy soliciting
materials received by the Trustee relating to securities held by the Trust or,
if applicable, deliver these materials
61
to the appropriate Participant or the Beneficiary of a deceased Participant.
The Trustee shall not vote any securities held by the Trust except in
accordance with the written instructions of the Employer, Participant or the
Beneficiary of the Participant, if the Participant is deceased; provided,
however, that the Trustee may, in the absence of instructions, vote "present"
for the sole purpose of allowing such shares to be counted for establishment of
a quorum at a shareholders' meeting. The Trustee shall have no duty to solicit
instructions from Participants, the Beneficiary or the Employer.
14.12. Compensation and Expenses of Trustee. The Trustee's fee for
performing its duties hereunder will be such reasonable amounts as the Trustee
may from time to time specify by written agreement with the Employer. Such
fee, any taxes of any kind which may be levied or assessed upon or in respect
of the Trust Fund and any and all expenses, including without limitation legal
fees and expenses of administrative and judicial proceedings, reasonably
incurred by the Trustee in connection with its duties and responsibilities
hereunder will, unless some or all have been paid by said Employer, be paid
first from forfeitures resulting under Section 7.07, then from the remaining
Trust Fund and will, unless allocable to the Accounts of particular
Participants, be charged against the respective Accounts of all Participants,
in such reasonable manner an the Trustee may determine.
14.13. Reliance by Trustee on Other Persons. The Trustee may rely upon and
act upon any writing from any person authorized by the Employer or
Administrator to give instructions concerning the Plan and may conclusively
rely upon and be protected in acting upon any written order from the Employer
or Administrator or upon any other notice, request, consent, certificate, or
other instructions or paper reasonably believed by it to have been executed by
a duly authorized person, so long as it acts in good faith in taking or
omitting to take any such action. The Trustee need not inquire as to the basis
in fact of any statement in writing received from the Employer or
Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Administrator as to any person or persons
authorized to act for the Employer or Administrator hereunder and to sign on
behalf of the Employer or Administrator any directions or instructions, until
it receives from the Employer or Administrator written notice that such
authority has been revoked.
Notwithstanding any provision contained herein, the Trustee will be
under no duty to take any action with respect to any Participant's Account
(other than an specified herein) unless and until the Employer or Administrator
furnishes the Trustee with written instructions on a form acceptable to the
Trustee, and the Trustee agrees thereto in writing. The Trustee will not be
liable for any action taken pursuant to the Employer's or Administrator's
written instructions (nor for the collection of contributions under the Plan,
nor the purpose or propriety of any distribution made thereunder).
14.14. Indemnification by Employer. The Employer shall indemnify and save
harmless the Trustee from and against any and all liability to which the
Trustee may be subjected by reason of any act or conduct (except willful
misconduct or gross negligence) in its capacity as Trustee, including all
expenses reasonably incurred in its defense.
14.15. Consultation by Trustee with Counsel. The Trustee may consult with
legal counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
will, to the extent permitted by law, be full and complete protection in
respect of any action taken or omitted by the
62
Trustee hereunder in good faith and in accordance with the opinion of such
counsel.
14.16. Persons Dealing with the Trustee. No person dealing with the Trustee
be bound to see to the application of any money or property paid or delivered
to the Trustee or to inquire into the validity or propriety of any
transactions.
14.17. Resignation or Removal of Trustee. The Trustee may resign at any time
by written notice to the Employer, which resignation shall be effective 60 days
after delivery to the Employer. The Trustee may be removed by the Employer by
written notice to the Trustee, which removal shall be effective 60 days after
delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a
successor trustee. Any such successor trustee will, upon written acceptance of
his appointment, become vested with the estate, rights, powers, discretion,
duties and obligations of the Trustee hereunder as if he had been originally
named as Trustee in this Agreement.
Upon resignation or removal of the Trustee, the Employer will no
longer participate in this prototype plan and will be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer the
assets of the Trust to the successor trustee upon receipt of sufficient
evidence (such as a determination letter or opinion letter from the Internal
Revenue Service or an opinion of counsel satisfactory to the Trustee) that such
trust will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by
delivery to the Trustee of written notice that the Employer has appointed such
successor trustee, and written acceptance of such appointment by the successor
trustee. The Trustee may, upon transfer and delivery of the Trust Fund to a
successor trustee, reserve such reasonable amount as it shall deem necessary to
provide for its fees, compensation, costs and expenses, or for the payment of
any other liabilities chargeable against the Trust Fund for which it may be
liable. The Trustee shall not be liable for the acts or omissions of any
successor trustee.
14.18. Fiscal Year of the Trust. The fiscal year of the Trust will coincide
with the Plan Year.
14.19. Discharge of Duties by Fiduciaries. The Trustee and the Employer and
any other fiduciary shall discharge their duties under the Plan and this Trust
Agreement solely in the interests of Participants and their Beneficiaries in
accordance with the requirements of ERISA.
14.20. Amendment. In accordance with provisions of the Plan, and subject to
the limitations set forth therein, this Trust Agreement may be amended by an
instrument in writing signed by the Employer and the Trustee. No amendment to
this Trust Agreement shall divert any part of the Trust Fund to any purpose
other than as provided in Section 2 hereof.
14.21. Plan Termination. Upon termination or partial termination of the Plan
or complete discontinuance of contributions thereunder, the Trustee will make
distributions to the Participants or other persons entitled to distributions as
the Employer or Administrator directs in accordance with the provisions of the
Plan. In the absence of such instructions and unless the Plan otherwise
provides, the Trustee will notify the Employer or Administrator of such
situation and the Trustee
63
will be under no duty to make any distributions under the Plan until it
receives written instructions from the Employer or Administrator. Upon the
completion of such distributions, the Trust will terminate, the Trustee will be
relieved from all liability under the Trust, and no Participant or other person
will have any claims thereunder, except as required by applicable law.
14.22. Permitted Reversion of Funds to Employer. If it is determined by the
Internal Revenue Service that the Plan does not initially qualify under Section
401 of the Code, all assets then held under the Plan will be returned by the
Trustee, as directed by the Administrator, to the Employer, but only if the
application for determination is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan was adopted or
such later date as may be prescribed by regulations. Such distribution will be
made within one year after the date the initial qualification is denied. Upon
such distribution the Plan will be considered to be rescinded and to be of no
force or effect.
Contributions under Plan are conditioned upon their deductibility
under Section 404 of the Code. In the event the deduction of a contribution
made by the Employer is disallowed under Section 404 of the Code, such
contribution (to the extent disallowed) must be returned to the Employer within
one year of the disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact
must be returned to the Employer within one year of the contribution.
14.23. Governing Law. This Trust Agreement will be construed, administered
and enforced according to ERISA and, to the extent not preempted thereby, the
laws of the Commonwealth of Massachusetts.
64
THE CORPORATEplan FOR RETIREMENT
(PROFIT SHARING/401(K) PLAN)
A FIDELITY PROTOTYPE PLAN
NON-STANDARDIZED ADOPTION AGREEMENT 002
BASIC PLAN NO. 07
65
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
----------------
(a) Name of Plan:
This is the JAYCOR 401 (K) PLAN
----------------------------------------------------
Plan (the "Plan").
---------------------------------------------
(b) Type of Plan:
(1) [ ] 401(k) and Profit Sharing
(2) [ ] Profit Sharing Only
(3) [X] 401(k) Only
(c) Name of Plan Administrator, if not the Employer:
401 (K) PLAN COMMITTEE
----------------------------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------------------
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------------
The Plan Administrator is the agent for service of legal process
for the Plan.
(d) Limitation Year (check one):
(1) [ ] Calendar Year
(2) [X] Plan Year
(3) [ ] Other:
-------
(e) Three Digit Plan Number: 004
--------
(f) Plan Year End (month/day): 12-31
--------
(g) Plan Status (check one):
(1) [ ] Effective Date of new Plan:
-----------------
66
(2) [X] Amendment Effective Date: 01-01-94. This is
(check one):
[ ] (A) an amendment of The CORPORATE plan for
Retirement Adoption Agreement previously
executed by the Employer, or
[X] (B) a conversion from another plan document
into The CORPORATE plan for Retirement.
The original effective date of the Plan: 07-01-87
----------
The substantive provisions of the Plan shall apply
prior to the Effective Date to the extent required
by the Tax Reform Act of 1986 or other applicable
laws.
1.02 EMPLOYER
--------
(a) The Employer is: JAYCOR
------------------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
San Diego, CA 92121
------------------------------------------
Contact's Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------------------------
(1) Employer's Tax Identification Number: ▇▇-▇▇▇▇▇▇▇
----------------
(2) Business form of Employer (check one):
(A) [X] Corporation (D) [ ] Governmental
(B) [ ] Sole proprietor (E) [ ] Tax-exempt
or partnership organization
(C) [ ] Subchapter S (F) [ ] Rural Electronic
Corporation Cooperative
(3) Employer's fiscal year end: Friday Closet To 1-31
--------------------------
(4) Date business commenced: 1-27-75
--------------------------
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(b) The term "Employer" includes the following Related Employer(s)
(as defined in Section 2.01(a)(26)):
JAYCOR TECHNICAL SERVICES, INC.
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
1.03 COVERAGE
--------
(a) All Non-excluded Employees who meet the conditions specified
below will be eligible to participate in the Plan:
(1) Service requirement (check one):
(A) [X] no service requirement.
(B) [ ] three consecutive months of service (no minimum
number Hours of Service can be required).
(C) [ ] six consecutive months of service (no minimum
number Hours of Service can be required).
(D) [ ] one Year of Service (1,000 Hours of Service is
required during the Eligibility Computation
Period.)
(2) Age requirement (check one):
(A) [X] no age requirement.
(B) [ ] must have attained age ____ (not to exceed 21).
(3) the class of Non-excluded Employees eligible to
participate in the Plan (check one):
(A) [ ] includes all Employees of the Employer.
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68
(B) [X] includes all Employees of the Employer except
for (check the appropriate box(es)):
(i) [X] Employees covered by a collective
bargaining agreement.
(ii) [ ] Highly Compensated Employees as
defined in Code Section 414(q).
(iii) [ ] Leased Employees as defined in Section
2.01(a)(18).
(iv) [X] Nonresident aliens who do not receive
any earned income from the Employer
which constitutes United States
source income.
(v) [X] Other
PART-TIME 1 AND TEMPORARY
--------------------------------------
EMPLOYEES
--------------------------------------
--------------------------------------
--------------------------------------
NOTE: No exclusion in this section may create a
discriminatory class of employees. An Employer's
plan must still pass the Internal Revenue Code
coverage and participation requirements if one or
more of the above groups of Employees have been
excluded from the Plan.
(b) The Entry Date(s) shall be (check one):
(1) [ ] the first day of each Plan Year (not if
Section 1.03(a)(1)(D) is elected).
(2) [X] the first day of each Plan Year and the
date six months later.
(3) [ ] the first day of each Plan Year and the
first day of the fourth, seventh, and
tenth months.
(4) [ ] the first day of each month.
(c) Date of Initial Participation - An Employee will become
a Participant unless excluded by Section 1.03(a)(3)
above on the Entry Date immediately following the date
the Employee completes the service and age
requirement(s) in Section 1.03(a), if any, except
(check one):
(1) [ ] No exceptions.
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69
(2) [X] Non-excluded Employees employed on the Effective
Date in Section 1. 01(g) will become Participants
on that date.
(3) [ ] Employees who meet the age and service
requirement(s) of Section 1. 03(a) on the Effective
Date in Section 1. 01(g) will become Participants
on that date.
1.04 COMPENSATION
(a) For purposes of determining Contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7), but
excluding (check the appropriate box(es)):
(1) [ ] Overtime Pay.
(2) [X] Bonuses.
(3) [X] Commissions.
(4) [X] The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer to
the extent such value is includable in the
Employee's taxable income.
Note: These exclusions shall not apply for purposes of
the "Top Heavy" requirements in section 9.03, or
allocating Discretionary Employer Contributions if
an Integrated Formula is elected in Section
1.05(a)(2)(B).
(5) [ ] No exclusions.
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee first
becomes a Participant shall be determined based on the
Employee's Compensation (check one):
(1) [X] For the entire Plan Year
(2) [ ] For the portion of the Plan Year in which the
Employee is eligible to participate in the Plan.
1.05 CONTRIBUTIONS
(a) [ ] Employer Contributions:
(1) [ ] Fixed Formula - Nonintegrated Formula (check (A)
or (B)):
(A) [ ] Fixed Percentage Employer Contribution:
For each Plan Year, the Employer will
contribute for each eligible Participant
an amount equal to ____% (not to exceed
15%) of such Participant's Compensation.
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70
(2) [X] Non-excluded Employees employed on the Effective
Date in Section 1.01(g) will become Participants
on that date.
(3) [ ] Employees who meet the age and service
requirement(s) of Section 1.03(a) on the
Effective Date in Section 1.01(g) will become
Participants on that date.
1.04 COMPENSATION
------------
(a) For purposes of determining Contributions under the Plan,
Compensation shall be as defined in Section 2.01(a)(7), but
excluding (check the appropriate box(es)):
(1) [ ] Overtime Pay.
(2) [ ] Bonuses.
(3) [ ] Commissions.
(4) [ ] The value of a qualified or a non-qualified stock
option granted to an Employee by the Employer to
the extent such value is includable in the
Employee's taxable income.
NOTE: These exclusions shall not apply for purposes of
the "Top Heavy" requirements in Section 9.03, or
allocating Discretionary Employer Contributions
if an Integrated Formula is elected in
Section 1.05(a)(2)(B).
(5) [X] No exclusions.
(b) Compensation for the First Year of Participation
Contributions for the Plan Year in which an Employee first
becomes a Participant shall be determined based on the
Employee's Compensation (check one):
(1) [X] For the entire Plan Year.
(2) [ ] For the portion of the Plan Year in which the
Employee is eligible to participate in the Plan.
1.05 CONTRIBUTIONS
-------------
(a) [ ] Employer Contributions:
(1) [ ] Fixed Formula - Nonintegrated Formula
(check (A) or (B)):
(A) [ ] Fixed Percentage Employer Contribution:
For each Plan Year, the Employer will
contribute for each eligible Participant an
amount equal to ___________% (not to exceed
15%) of such Participant's Compensation.
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71
(B) [ ] Fixed Flat Dollar Employer Contribution
For each Plan Year, the Employer will
contribute for each eligible Participant
an amount equal to $___________.
(2) [ ] Discretionary Formula.
The Employer may decide each Plan Year whether to make a
Discretionary Employer Contribution on behalf of
eligible Participants in accordance with Section 4.06.
Such contributions may only be funded by the Employer
after the Plan Year ends and shall be allocated to
eligible Participants based upon the following (check
(A) or (B)).
(A) [ ] Nonintegrated Allocation Formula:
In the ratio that each eligible
Participant's Compensation bears to the
total Compensation paid to all eligible
Participants for the Plan Year.
(B) [ ] Integrated Allocation Formula:
In accordance with Section 4.06.
NOTE: An Employer who maintains any other plan that
provides for Social Security Integration
(permitted disparity) may not elect (2)(B).
(3) Eligibility Requirement(s)
A Participant shall be entitled to Employer
Contributions for a Plan Year under this Subsection (a)
if the Participant satisfies the following
requirement(s) (Check the appropriated box(es) -
Options(B) and (C) may not be elected together):
(A) [ ] is employed by the Employer on the last
day of the Plan Year.
(B) [ ] earns at least 500 Hours of Service during
the Plan Year.
(C) [ ] earns at least 1,000 Hours of Service
during the Plan Year.
(D) [ ] no requirements.
NOTE: If option (A), (B) or (C) above is selected
then Employer Contributions can only be funded
by the Employer after Plan Year end.
(b) [X] Deferral Contributions
(1) Regular Contributions
The Employer shall make a Deferral Contribution in
accordance with Section 4.01 on behalf of each
Participant who has an executed salary reduction
agreement in effect with the Employer for the payroll
period in question, not to exceed 15% (NO MORE THAN
15%) of Compensation for that period.
6
72
(A) A Participant may increase or decrease, on a
prospective basis, his salary reduction
agreement percentage (check one):
(i) [ ] As of the beginning of each
payroll period.
(ii) [ ] As of the first day of each month.
(iii) [X] As of the next Entry Date.
(iv) [ ] (Specify, but must be at least once
per Plan Year)
----------------------------------
----------------------------------
(B) A Participant may revoke, on a prospective
basis, a salary reduction agreement at any time
upon proper notice to the Administrator but in
such case may not file a new salary reduction
agreement until (check one):
(i) [ ] The first day of next Plan Year.
(ii) [X] Any subsequent Plan Entry Date.
(iii) [ ] (Specify, but must be at least
once per Plan Year)
----------------------------------
----------------------------------
(2) [ ] Catch-Up Contributions
The Employer may allow Participants upon proper notice
and approval to enter into a special salary reduction
agreement to make additional Deferral Contributions in
amount up to 100% of their Compensation for the payroll
period(s) in the final month of the Plan Year.
(3) [ ] Bonus Contributions
The Employer may allow Participants upon proper notice
and approval to enter into a special salary reduction
agreement to make Deferral Contributions in an amount up
to 100% of any Employer paid cash bonuses made for such
Participants during the Plan Year. The Compensation
definition elected by the Employer in Section 1.04(a)
must include bonuses if bonus contributions are
permitted.
NOTE: A Participant's Contributions under (2) and/or
(3) may not cause the Participant to exceed the
percentage limit specified by the Employer in (1)
after the Plan Year. The Employer has the right
to restrict a Participant's right to make
Deferral Contributions if they will adversely
effect the Plan's ability to pass the Actual
Deferral Percentage and/or the Actual
Contribution Percentage test.
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73
(4) [ ] Qualified Discretionary Contributions
The Employer may contribute an amount which it
designates as a Qualified Discretionary
Contribution to be included in the Actual Deferral
Percentage or Actual Contribution Percentage test.
Qualified Discretionary Contributions shall be
allocated to Non-highly Compensated Employees
(check one):
(A) [ ] in the ratio which each such Participant's
Compensation for the Plan Year bears to
the total of all such Participant's
Compensation for the Plan Year.
(B) [ ] as a flat dollar amount for each such
Participant for the Plan Year.
(c) [ ] Matching Contributions (only if Section 1.05(b) is checked)
(1) The Employer shall make a Matching Contribution on
behalf of each Participant in an amount equal to the
following percentage of a Participant's Deferral
Contributions during the Plan Year (check one):
(A) [ ] 50%
(B) [ ] 100%
(C) [ ] ______%
(D) [ ] (Tiered Match) ___% of the first ____% of
the Participant's Compensation contributed
to the Plan,
_____% of the next _____% of the
Participant's Compensation contributed to
the Plan,
-----% of the next _____% of the
Participant's Compensation contributed to
the Plan.
NOTE: THE PERCENTAGES SPECIFIED ABOVE FOR MATCHING
CONTRIBUTIONS MAY NOT INCREASE AS THE PERCENTAGE
OF COMPENSATION CONTRIBUTED INCREASES.
(E) [ ] The percentage declared for the year, if
any, by a Board of Directors' resolution.
(2) [ ] The Employer may at Plan Year end make an
additional Matching Contribution equal to a
percentage declared by the Employer, through a
Board of Directors' resolution, of the Deferral
Contributions made by each Participant during the
Plan Year (only if an option is checked under
Section 1.05(c)(1)).
(3) [ ] Matching Contribution Limits (check the
appropriate box(es)):
(A) [ ] Deferral Contributions in excess of ____%
of the Participant's Compensation for the
period in question shall not be considered
for Matching Contributions.
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74
Note: If the Employer elects a percentage limit in (A)
above and requests the Trustee to account
separately for matched and unmatched Deferral
Contributions, the Matching Contributions
allocated to each Participant must be computed,
and the percentage limit applied; based upon
each payroll period.
(B) [ ] Matching Contributions for each Participant for
each Plan Year shall be limited to $__________.
(4) Eligibility Requirement(s)
A Participant who makes Deferral Contributions during the Plan
Year under Section 1.05(b) shall be entitled to Matching
Contributions for that Plan Year if the Participant satisfies
the following requirement(s) (Check the appropriate box(es).
Options (B) and (C) may not be elected together):
(A) [ ] Is employed by the Employer on the last day of
the Plan Year.
(B) [ ] Earns at least 500 Hours of Service during the
Plan Year.
(C) [ ] Earns at least 1,000 Hours of Service during the
Plan Year.
(D) [ ] Is not a Highly Compensated Employee for the
Plan Year.
(E) [ ] Is not a Partner of the Employer, if the
Employer is a partnership.
(F) [ ] No requirements.
NOTE: If option (A), (B) or (C) above is selected then
Matching Contributions can only be funded by the
Employer after the Plan Year ends. Any Matching
Contribution funded before Plan Year end shall
not be subject to the eligibility requirements
of this Section 1.05(c)(4)). If option (A), (B),
or (C) is adopted during a Plan Year, such
option shall not become effective until the
first day of the next Plan Year.
(d) [ ] Employee After-Tax Contributions (check one):
(1) [ ] Future Contributions
Participants may make voluntary non-deductible Employee
Contributions pursuant to Section 4.09 of the Plan. This
option may only be elected if the Employer has elected
to permit Deferral Contributions under Section 1.05(b).
Matching Contributions by the Employer are not allowed
on any voluntary non-deductible Employee Contributions.
Withdrawals are limited to one per year unless Employee
Contributions were allowed under a previous plan
document which authorized more frequent withdrawals.
9
75
(2) [ ] Frozen Contributions
Participants may not make voluntary non-deductible
Employee Contributions but the Employer does maintain
frozen Participant voluntary non-deductible Employee
Contribution accounts.
1.06 RETIREMENT AGE(S)
(a) The Normal Retirement Age under the Plan is (check one):
(1) [X] age 65.
(2) [ ] age _____ (specify between 55 and 64).
(3) [ ] later of the age _____ (can not exceed 65) or
the fifth anniversary of the Participant's
Commencement Date.
(b) [ ] The Early Retirement Age is the first day of the month
after the Participant attains age _____ (specify 55 or
greater) and completes _____Years of Service for
Vesting.
(c) [ ] A Participant is eligible for Disability Retirement if
he/she (check the appropriate box(es)):
(1) [ ] satisfies the requirements for benefits under
the Employer's Long-Term Disability Plan.
(2) [ ] satisfies the requirements for Social Security
disability benefits.
(3) [ ] is determined to be disabled by a physician
approved by the Employer.
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76
1.07 VESTING SCHEDULE
(a) The Participant's vested percentage in Employer Contributions
(Fixed or Discretionary) elected in Section 1.05(a) and/or
Matching Contributions elected in Section 1.05(c) shall be based
upon the schedule(s) selected below, except with respect to any
Plan Year during which the Plan is Top-Heavy. The schedule
elected in Section 1.12(d) shall automatically apply for a
Top-Heavy Plan Year and all Plan Years thereafter unless the
Employer has already elected a more favorable vesting schedule
below.
(1) Employer Contributions (2) Matching Contributions
(check one): (check one):
(A) [X] N/A - No Employer Contributions (A) [X] N/A - No Matching Contributions
(B) [ ] 100% Vesting immediately (B) [ ] 100% Vesting immediately
(C) [ ] 3 year cliff (see C below) (C) [ ] 3 year cliff (see C below)
(D) [ ] 5 year cliff (see D below) (D) [ ] 5 year cliff (see D below)
(E) [ ] 6 year graduated (see E below) (E) [ ] 6 year graduated (see E below)
(F) [ ] 7 year graduated (see F below) (F) [ ] 7 year graduated (see F below)
(G) [ ] Other vesting (complete G1 below) (G) [ ] Other vesting (complete G2 below)
Years of Vesting Schedule
Service for ----------------
Vesting C D E F G1 G2
----------- ---- ---- ---- ---- ---- ----
0-1 0% 0% 0% 0% ____ ____
2 0% 0% 20% 0% ____ ____
3 100% 0% 40% 20% ____ ____
4 100% 0% 60% 40% ____ ____
5 100% 100% 80% 60% ____ ____
6 100% 100% 100% 80% ____ ____
7 100% 100% 100% 100% 100% 100%
NOTE: A schedule elected under G1 or G2 above must be at least as
favorable as one of the schedules in C, D, E or F above.
(b) [ ] Years of Service for Vesting shall exclude (check one):
(1) [ ] for new plans, service prior to the Effective
Date as defined in Section 1.01(g)(1)
(2) [ ] for existing plans converting from another plan
document, service prior to the original
Effective Date as defined in Section 1.01(g)(2).
11
77
1.08 PREDECESSOR EMPLOYER SERVICE
[ ] Service for purposes of eligibility in Section 1.03(a)(1) and
vesting in Section 1.07(a) of this Plan shall include service
with the following employer(s):
(a) _____________________________________________________________
(b) _____________________________________________________________
(c) _____________________________________________________________
(d) _____________________________________________________________
1.09 PARTICIPANT LOANS
Participant loans (check (a) or (b)):
(a) [X] will be allowed in accordance with Section 7.09, subject
to a $1,000 minimum amount and will be granted (check
(1) or (2)):
(1) [X] for any purpose.
(2) [ ] for hardship withdrawal (as defined in Section
7.10) purposes only.
(b) [ ] will not be allowed.
1.10 HARDSHIP WITHDRAWALS
Participant withdrawals for hardship prior to termination of employment
(check one):
(a) [ ] will be allowed in accordance with Section 7.10, subject
to a $1,000 minimum amount.
(b) [X] will not be allowed.
1.11 DISTRIBUTIONS
(a) Subject to Articles 7 and 8 and (b) below, distributions under
the Plan will be paid (check the appropriate box(es)):
(1) [X] as a lump sum.
(2) [X] under a systematic withdrawal plan (installments).
12
78
(b) [X] Check if a Participant will be entitled to receive
a distribution of all or any portion of the
following Accounts without terminating employment
upon attainment of age 59 1/2 (check one):
(1) [ ] Deferral Contribution Account
(2) [X] All Accounts
(c) [ ] Check if the Plan was converted (by plan
amendment) from another defined contribution plan,
and the benefits were payable as (check the
appropriate box(es)):
(1) [ ] a form of single or joint and survivor life
annuity.
(2) [ ] an in-service withdrawal of vested
Employer Contributions maintained in a
Participant's Account (check (A) and/or
(B)):
(A) [ ] for at least ____ (24 or more)
months.
(B) [ ] after the Participant has at
least 60 months of
participation.
(3) [ ] another distribution option that is a
"protected benefit" under Section 411(d)(6)
of the Internal Revenue Code. Please
attach a separate page identifying the
distribution option(s):
These additional forms of benefit may be provided for
such plans under Article 7 or 8.
NOTE: Under Federal Law, distributions to
Participants must generally begin no later than
April 1 following the year in which the
Participant attains age 70 1/2.
1.12 TOP HEAVY STATUS
(a) The Plan shall be subject to the Top-Heavy Plan requirements of
Article 9 (check one):
(1) [ ] for each Plan Year.
(2) [X] for each Plan Year, if any, for which the Plan is
Top-Heavy as defined in Section 9.02.
(3) [ ] Not applicable. (This option is available for
plans covering only employees subject to a
collective bargaining agreement and there are no
Employer or Matching Contributions elected in
Section 1.05.)
(b) In determining Top-Heavy status, if necessary, for an employer
with at least one defined benefit plan, the following
assumptions shall apply:
(1) Interest rate: ___% per annum
(2) Mortality table _____________
(3) [X] Not Applicable
13
79
(c) In the event that the Plan is treated as Top-Heavy for a Plan
Year, each non-key Employee shall receive an Employer
Contribution of at least 3% (3,4,5,or 7-1/2)% of Compensation
for the Plan Year in accordance with Section 9.03 (check one):
(1) [ ] under this Plan in any event.
(2) [X] under this Plan only if the Participant is not
entitled to such contribution under another
qualified plan of the Employer.
(3) [ ] Not applicable. (This option is available for
plans covering only employees subject to a
collective bargaining agreement and there are no
Employer or Matching Contributions elected in
Section 1.05.)
Note: Such minimum Employer contribution may be less
than the percentage indicated in (c) above to
the extent provided in Section 9.03(a).
(d) In the event that the Plan is treated as Top-Heavy for a Plan
Year, the following vesting schedule shall apply instead of the
schedule(s) elected in Section 1.07(a) for such Plan Year and
each Plan Year thereafter (check one):
(1) [ ] 100% vested after _______ (not in excess of
3) Years of Service for Vesting.
(2) [X] YEARS OF SERVICE FOR VESTING VESTING PERCENTAGE MUST BE AT LEAST
---------------------------- ------------------ ----------------
0 0% 0%
1 0% 0%
2 20% 20%
3 40% 40%
4 60% 60%
5 80% 80%
6 100% 100%
NOTE: If one or both schedules elected in Section
1.07(a) is(are) more favorable in all cases than
the schedules elected in (d) above then such
schedule(s) will continue to apply even in Plan
Years in which the Plan is Top-Heavy.
14
80
1.13 TWO OR MORE PLANS - Code Section 415 limitation on annual additions
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a participant or could
become a participant, the Employer must complete this section. The
Employer must also complete this section if it maintains a welfare
benefit fund, as defined in Section 419(e) of the Code, or an individual
medical account, as defined in Section 415(l)(2) of the Code, under
which amounts are treated as annual additions with respect to any
Participant in this Plan.
(a) If the Employer maintains, or had maintained, any other defined
contribution plan or plans which are not Master or Prototype
Plans, Annual Additions for any Limitation Year to this Plan
will be limited (check one):
(1) [X] in accordance with Section 5.03 of this Plan.
(2) [ ] in accordance with another method set forth on an
attached separate sheet
(3) [ ] Not Applicable
(b) If the Employer maintains, or had maintained, a defined benefit
plan or plans, the sum of the Defined Contribution Fraction and
Defined Benefit Fraction for a Limitation Year may not exceed
the limitation specified in Code Section 415(e), modified by
section 416(h)(1) of the Code. This combined plan limit will
be met as follows (check one):
(1) [X] Annual Additions to this Plan are limited so that the
sum of the Defined Contribution Fraction and the
Defined Benefit Fraction does not exceed 1.0.
(2) [ ] another method to limiting Annual Additions or reducing
projected annual benefits is set forth on an attached
schedule.
(3) [ ] Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(a) Investment Directions
Participant Accounts will be invested (check one):
(1) [ ] in accordance with investment directions provided to
the Trustee by the Employer for allocating all
Participant Accounts among the options listed in (b)
below.
(2) [X] in accordance with investment directions provided to
the Trustee by each Participant for allocating his
entire Account among the options listed in (b) below.
15
81
(3) [ ] in accordance with investment directions provided to the
Trustee by each Participant for all contribution sources
in a Participant's Account except the following sources
shall be invested as directed by the Employer (check (A)
and/or (B))
(A) [ ] Fixed or Discretionary Employer
Contributions
(B) [ ] Employer Matching Contributions
The Employer must direct the applicable sources among
the same investment options made available for
Participant directed sources listed in (b) below:
(b) Plan Investment Options
The Employer hereby establishes a Trust under the plan in
accordance with the provisions of Article 14, and the Trustee
signifies acceptance of its duties under Article 14 by its
signature below. Participant Accounts under the Trust will be
invested among the Fidelity Funds listed below pursuant to
Participant and/or Employer directors.
FUND NAME FUND NUMBER
--------- -----------
(1) FMMT Retirement Government Money March 631
(2) Investment Grade Bond Fund 26
(3) Fidelity Asset Manager 314
(4) Puritan Fund 4
(5) Growth & Income Portfolio 27
(6) Fidelity U.S. Equity Index Portfolio 650
(7) Contrafund 22
(8) Magellan Fund 21
(9)
(10)
NOTE: An additional annual recordkeeping fee will be charged
for each fund in excess of five funds.
To the extent that the Employer selects as an investment
option the Managed Income Portfolio of the Fidelity
Group Trust for Employee Benefit Plans (the "Group
Trust"), the Employer hereby (A) agrees to the terms of
the Group Trust and adopts said terms as a part of this
Agreement and (B) acknowledges that it has received from
the Trustee a copy of the Group Trust, the Declaration
of Separate Fund for the Managed Income Portfolio of the
Group Trust, and the Circular for the Managed Income
Portfolio.
16
82
Note: The method and frequency for change of investments will
be determined under the rules applicable to the selected
funds or, if applicable, the rules of the Employer
adopted in accordance with Section 6.03. Information will
be provided regarding expenses, if any, for changes in
investment options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this
Plan is qualified under Section 401 of the Code. If the Employer wishes
to obtain reliance that his or her plan(s) are qualified, application
for a determination letter should be made to the appropriate Key
District Director of the Internal Revenue Service. Failure to properly
fill out the Adoption Agreement may result in disqualification of the
Plan.
This Adoption Agreement may be used only in conjunction with Fidelity
Prototype Plan Basic Plan Document No. 07. The Prototype Sponsor shall
inform the adopting Employer of any amendments made to the Plan or of
the discontinuance or abandonment of the prototype plan documents.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Questions regarding this prototype document may be directed to the
following telephone number:
▇-(▇▇▇) ▇▇▇-▇▇▇▇
17
83
EXECUTION PAGE
(Employer's Copy)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this 12th day of October, 1993.
Employer JAYCOR
--------------------------------
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title CHIEF FINANCIAL OFFICER
--------------------------------
Employer JAYCOR TECHNICAL SERVICES, INC.
--------------------------------
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title CHIEF FINANCIAL OFFICER
--------------------------------
Accepted by
Fidelity Management Trust Company, as Trustee
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Date October 22, 1993
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Title Director
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19
84
AMENDMENT TO ADOPTION AGREEMENT
OF
JAYCOR 401(K) PLAN
This Amendment is made on February 28, 1995 to amend the JAYCOR 401(k) Plan,
effective as of January 1, 1995, as follows:
1. Section 1.03(a)(1) of the Adoption Agreement shall be modified to
select Option (D) in addition to the existing option (A), with Option (D) to
read as follows:
(D) One Year of Service (1,000 Hours of Service is required during
the Eligibility Computation Period) for any employee who is classified by the
Employer as a part-time 1 or temporary employee, using Hours of Service which
are credited on or after January 1, 1995.
2. Section 1.03(a)(3)(B)(v) of the Adoption Agreement shall be amended by
deleting the categories of excluded employees presently contained therein.
3. Except as so amended, the Adoption Agreement is ratified and confirmed.
JACOR
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
JAYCOR Technical Services, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
85
AMENDMENT TO ADOPTION AGREEMENT
OF
JAYCOR 401(K) PLAN
This Amendment is made on September 25, 1996 to amend the JAYCOR 401(k) Plan,
effective as of January 1, 1996, as follows:
1. Section 1.03(a)(3)(B)(v) of the Adoption Agreement shall be amended by
adding to following excluded employees:
All employees of JAYCOR Multimedia Services, Inc.
All employees of ▇▇▇▇▇▇ Intelligence Services, Inc.
2. Except as so amended, the Adoption Agreement is ratified and confirmed.
JACOR
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
JAYCOR Technical Services, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇, President
86
BOARD OF DIRECTORS RESOLUTION
JAYCOR
At a duly constituted meeting of the Board of Directors of JAYCOR, (the
"Corporation"), a Corporation organized under the laws of the State of
California, held on September 25, 1996, at which meeting a quorum was present
and voting throughout:
WHEREAS, the Corporation previously adopted the JAYCOR 401(k) Plan and
the JAYCOR Money Purchase Pension Plan (the "Plans") effective January 1, 1994,
WHEREAS, the Corporation reserves the authority to amend the Plans in
Section 10.01 (a) of the Fidelity CORPORATEplan for Retirement(SM) Basic Plan
Document by filing with the Trustee an amended Adoption Agreement, executed by
the Corporation, on which said Corporation has indicated a change or changes in
provisions previously elected;
WHEREAS, the Corporation desires to add two Fidelity Funds to the Plan;
NOW THEREFORE BE IT RESOLVED, that, effective November 1, 1996, the
Corporation amend Section 1.14(b) of the Adoption Agreements to add the
following Fidelity Funds:
Name of Fund Fund Number
------------ -----------
Fidelity Emerging Growth Fund 0324
Fidelity Diversified International Fund 0325
The Addendums to Section 1.14(b) of the Fidelity CORPORATEplan for
Retirement(SM) Adoption Agreements are attached hereto and made a part of the
minutes of this meeting; and
RESOLVED that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Corporate Secretary and/or ▇▇▇▇▇ ▇▇▇▇▇▇▇,
the Chief Financial Officer of the Corporation are hereby authorized and
directed to take such actions as may be necessary or desirable to effectuate the
foregoing resolution.
In witness whereof, I have hereunto set my hand and affixed the seal of the
Corporation this 26th day of September, 1996.
JAYCOR
By /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Corporate Secretary
A true copy
ATTEST:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
87
Addendum To Section 1.14(b) of the
Fidelity CORPORATEplan for Retirement(SM)
Adoption Agreement - Plan Investment Options
Employer: JAYCOR
Plan Name: JAYCOR 401(k) Plan
Plan Number: 40536
The employer originally elected that Participant Accounts under the Plan would
be invested among the Fidelity Funds listed below pursuant to Participant and/or
Employer direction:
Fund Name Fund Number
--------- -----------
Fidelity Retirement Government Money Market 0631
Fidelity Investment Grade Bond Fund 0026
Fidelity Asset Manager Portfolio 0314
Fidelity Puritan Fund 0004
Fidelity Growth and Income Portfolio 0027
Fidelity U.S. Equity Index Portfolio 0650
Fidelity Magellan Fund 0021
Fidelity Contrafund 0022
The Employer amends the Plan to add the following Fidelity Funds effective
November 1, 1996:
Fund Name Fund Number
--------- -----------
Fidelity Emerging Growth Fund 0324
Fidelity Diversified International Fund 0325
Note: The Employer may elect up to ten Fidelity Funds. An additional annual
recordkeeping fee will be charged for each Fidelity Fund in excess of seven.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Authorized Signature
9/26/96
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Date Signed