AMENDED AND RESTATED
CASH OR DEFERRED
PROFIT SHARING PLAN AND TRUST
BY AND BETWEEN
PENNSYLVANIA SAVINGS BANK
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, TRUSTEE
AND
▇▇▇▇▇▇▇ DI SANDRO, TRUSTEE
ARTICLE ONE
PURPOSE, CREATION AND NAME
1.1 WHEREAS, the Employer heretofore established a Cash or Deferred
Profit Sharing Plan and Trust effective December 1, 1983, (hereinafter called
the "Original Effective Date") known as the Pennsylvania Savings Association
Cash or Deferred Profit Sharing Plan and Trust and which plan shall hereinafter
be known as Pennsylvania Savings Bank Cash or Deferred Profit Sharing Plan and
Trust (herein referred to as the "Plan") in recognition of the contribution made
to its successful operation by its employees and for the exclusive benefit of
its eligible employees; and
WHEREAS, under the terms of the Plan and Trust, the Employer has the
ability to amend the Plan and Trust;
NOW, THEREFORE, effective January 1, 1990 except as otherwise provided,
the Employer and the Trustee in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amend the Plan and Trust in its
entirety and restate the Plan and Trust;
The provisions of this Plan shall apply only to an Employee who
terminates employment on or after the effective date of this amendment and
restatement. The rights and benefits, if any, of a former employee shall be
determined in accordance with the prior provisions of the Plan in effect on the
date his employment terminated;
1.2 THIS AGREEMENT, hereby made and entered into this 15th day of
November, 1990, by and between PENNSYLVANIA SAVINGS BANK (herein referred to as
the "Employer") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ DI ▇▇▇▇▇▇ (herein referred to as
the "Trustees").
I-1
INDEX
Page
ARTICLE ONE
Purpose, Creation and Name ............. I-1
ARTICLE TWO
Definitions of Terms ................... II-1
ARTICLE THREE
Eligibility ............................ III-1
ARTICLE FOUR
Contributions and Management of Funds .. IV-1
ARTICLE FIVE
Retirement Benefits .................... V-1
ARTICLE SIX
Disability Benefits .................... VI-1
ARTICLE SEVEN
Death Benefits ......................... VII-1
ARTICLE EIGHT
Separation Benefits .................... VIII-1
ARTICLE NINE
Payment of Benefits .................... IX-1
ARTICLE TEN
Spendthrift Clause ..................... X-1
ARTICLE ELEVEN
Insurance Contracts .................... XI-1
ARTICLE TWELVE
Right to Alter, Amend or Terminate Trust XII-1
ARTICLE THIRTEEN
Loans .................................. XIII-1
i
Page
ARTICLE FOURTEEN
Trustee ................................. XIV-1
ARTICLE FIFTEEN
Insurer ................................. XV-1
ARTICLE SIXTEEN
No Reversion to Company ................. XVI-1
ARTICLE SEVENTEEN
Direct Transfers and Rollovers .......... XVII-1
ARTICLE EIGHTEEN
Determination of Top-Heavy Status......... XVIII-1
ARTICLE NINETEEN
Miscellaneous Provisions ................ XIX-1
ii
ARTICLE TWO
DEFINITION OF TERMS
2.1 The following words and terms as used in this Plan and Trust shall
have the meaning set forth below, unless a different meaning is clearly required
by the context.
(a) Actual Deferred Percentage: The total contribution, both
elective and non-elective, allocated to a Participant during
a Plan Year divided by the Compensation of the Participant.
(b) Affiliated Employer: The Employer and any corporation which
is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which includes the
Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in
Section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member
of an affiliated service group (as defined in Section 414(m)
of the Code) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant
to regulations under Section 414(o) of the Code.
(c) Age: A person's age at his last birthday.
(d) Aggregate Account: With respect to each Participant, the
value of all accounts maintained on behalf of a Participant,
whether attributable to Employer or Employee contributions,
subject to the provisions of Article XVIII.
(e) Agreement: This instrument with all amendments and
supplements thereto.
(f) Anniversary Date: First day of Plan Year.
(g) Annual Addition: Means the amount allocated to a
Participant's account during the Limitation Year that
constitutes:
(i) Employer contributions,
(ii) Employee contributions,
(iii) Forfeitures, and
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(iv) Amounts described in Sections 415 (1) (1) and
419(A)(d)(2) of the Code.
For the purposes of this definition, Employee contributions
are determined without regard to any rollover
contributions.
(h) Average Actual Deferred Percentage: The sum of the Actual
Deferred Percentages of Participants divided by the number
of Participants.
(i) Beneficiary: The person or persons to whom the share of a
deceased Participant's total account is payable, as provided
in the Plan. For purposes of determining whether the Plan is
a Top-Heavy Plan, a Beneficiary of a deceased Participant
shall be considered a Key Employee or a Non-Key Employee, as
the case may be.
(j) Break in Service: For the purposes of eligibility, any
Eligibility Computation Period in which an Employee has no
more than 500 hours of service. For purposes of vesting, any
Vesting Computation Period in which an Employee has no more
than 500 hours of service.
(k) Cash Value: A Cash Value of Contract providing specific
allocations of amounts to individual participants.
(1) Code: The Internal Revenue Code of 1986, as amended or
replaced from time to time.
(m) Company: Pennsylvania Savings Bank
(n) Compensation: Compensation actually paid to or for the
benefit of an Employee during the Plan Year, inclusive of
overtime pay and commissions, but excluding bonuses, except
that in the event Company is an accrual basis taxpayer,
Company may by written resolution elect to use accrued
compensation in lieu of paid compensation. Compensation
shall be such remuneration that is subject to tax under
Section 3101(a) of the Internal Revenue code, without the
dollar limitation of Section 3121(a). However, Compensation
for any Self-Employed Individual shall be equal to his
earned income; that is, the net earnings from
self-employment as defined in Code Section 401(c)(2),
(reduced by Company's deductible contribution made on
behalf of such individual for such year). Effective for Plan
Years beginning after 12/31/88 this Plan shall not take into
consideration a Participants Compensation to the extent it
exceeds 200,000.00, as indexed under Code Section 415(d).
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In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer
or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be
treated as a single Participant, except that for this
purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not
attained age nineteen (19) before the close of the year.
Notwithstanding the above, for any Top-Heavy Plan Year,
Compensation in excess of $200,000 (or such other amount as
the Secretary of the Treasury may designate) shall be
disregarded, except for purposes of determining maximum
permissible voluntary contributions and the Annual Additions
resulting therefrom, and for purposes of satisfying the
minimum contribution or benefit provisions regarding
Top-Heavy Plans, compensation is determined in accordance
with the definition of Compensation contained in Article IV
with respect to limits on maximum contributions or benefits.
(o) Contract: Any individual or group annuity policy or life
insurance policy for and/or on any Plan Participant, or any
unallocated investment contract issued by an insurer.
(p) Contribution: Non-Integrated.
Maximum Contribution: In any Top-Heavy Plan Year, a
Participant otherwise eligible to share in Contributions or
Forfeitures, but who is paid for fewer than 1,000 Hours of
Service, shall be limited to a maximum allocation of
Contributions and Forfeitures of 3% Percent of Compensation
from all the retirement plans maintained by the Company.
Said contribution shall be provided first from a Money
Purchase Pension Plan, if applicable, in an amount equal to
1% of Compensation and the remainder of the 3% contribution
shall next be provided from the Profit Sharing Plan in an
amount equal to 2% of Compensation. In the event said
contribution is not made from the above-mentioned Plans,
said maximum contribution shall be provided by this Plan
maintained by the Company.
If a Participant also participates in another defined
contribution plan maintained by Company, then the Maximum
Contribution referred to above shall be reduced
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by any allocation made on his behalf to said other
defined contribution plan.
(q) Deferred Compensation: The portion of a Participant's total
Compensation which has been contributed to the Plan in
accordance with the Participant's election pursuant to
Article IV.
(r) Defined Benefit Fraction: A fraction the numerator of which
is the projected annual benefit of the Participant under all
qualified defined benefit Plans of Company (determined as of
the close of the Limitation Year), and the denominator of
which is the lesser of:
(1) the product of 1.25 multiplied by the dollar
limitation in effect for defined benefit plans under
Internal Revenue Code Section 415(b)(1)(A) for such
year, or
(2) the product of 1.4 multiplied by the percentage of the
Participant's high three (3) consecutive years
compensation which may be taken into account under
Internal Revenue Code Section 415(b)(1)(B) with
respect to such Participant under the Plan for
such year.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
1.0 shall be substituted for 1.25 above if any Non-Key
Employee Participant eligible for an accrual of benefits
who does not have either an allocation of Company
contributions or forfeitures to a defined contribution plan
of at least 7.5 percent of Compensation for such year or an
accrued benefit in a defined benefit plan in which he
participates of not less than the 3% minimum benefit as
provided in Internal Revenue Code Section 416(h)(2)(A)
(ii)(I) (but not both). However, for any Plan Year in which
this Plan is a Super Top-Heavy Plan, 1.0 shall be
substituted for 1.25 in any event.
(s) Defined Contribution Plan Fraction: A fraction the numerator
of which is the sum of the Annual Additions to the
Participant's account(s) under all qualified defined
contribution plans of Company including voluntary
contribution accounts as of the close of the Limitation
Year, and the denominator of which is the sum of the lesser
of the following amounts determined for such year and for
each prior Year of Service with the Company:
II-4
(1) Such amount as is determined by multiplying 1.25 by the
dollar limitation in effect for the defined
contribution plans under Internal Revenue Code
Subsection 415(c)(1)(A) for such year (determined
without regard to Section 415(c)(6) of the Code), or
(2) 35 percent of the Participant's compensation for such
year.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
1.0 shall be substituted for 1.25 above if any Non-Key
Employee Participant eligible for any accrual of benefits
does not have either an allocation of Company contributions
and forfeitures of at least 7.5 percent of Compensation for
such year or an accrued benefit in a defined benefit plan in
which he participates of not less than the 3% minimum benefit
as provided in Code Section 416(h)(2)(A)(ii)(I)(but not
both). However, for any Plan Year in which this Plan is a
Super Top-Heavy Plan, 1.0 shall be substituted for 1.25 in
any event.
(t) Determination Date: For purposes of determining if the Plan
is Top-Heavy, the last day of the preceding Plan Year, or in
the case of the first Plan Year, the last day of such Plan
Year.
(U) Early Retirement Date: The first day of the next Plan year
coinciding with or folowing a Participant's 55th birthday,
but preceding Normal Retirement Date.
(v) Effective Date of this Plan: First day of Plan Year
beginning January 1, 1990.
(w) Elective Contribution: The portion of the Contribution
allocated to a Participant as a result of the Participant's
election to reduce his salary during the Plan Year.
(x) Eligibility Computation Period: The consecutive 12 month
period beginning on the date on which the Employee commenced
employment, and successive consecutive 12 month periods
thereafter. An Employee's Employment Commencement Date is
the first day for which the Employee is entitled to be
credited with an Hour of Service from the Employer
maintaining the Plan. If an Employee incurs a Break in
Service and subsequently is credited with additional hours
of service, his Eligibility Computation Period shall be the
consecutive 12 month period beginning with the date on which
he is
II - 5
first credited with an hour of service after the Break in
Service, and successive consecutive 12 month periods
thereafter.
(y) Employee: Means employees of the Employer, but excludes any
person who is employed as an independent contractor.
Employee shall include leased employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such leased
employees are covered by a plan described in Code Section
414(n)(5) and such leased employees do not constitute more
than 20% of the recipient's non-highly compensated work
force.
(z) Employer: The Company and any corporation which is a member
of a controlled group of corporations (as defined in Section
414(b) of the Code) which includes the Company; any trade or
business (whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with the
Company; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined
in Section 414(m) of the Code) which includes the Company;
and any other entity required to be aggregated with the
Company pursuant to regulations under Section 414(o) of the
Code.
(aa) Excess Deferred Compensation: With respect to any taxable
year of the Participant, the excess of the aggregate amount
of such Participant's Elective Contribution and the
Non-Elective Contribution made on behalf of a Participant
for such taxable year, over the dollar limitation provided
for in Code Section 402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as
an Annual Addition pursuant to Article IV.
(bb) Family Member: With respect to an affected Participant,
such Participant's spouse, such Participant's lineal
descendants and ascendants and their spouses, all as
described in Code Section 414(g)(6)(B).
(cc) 415 compensation: Compensation as defined in Section
4.10(a).
(dd) 414(s) Compensation: With respect to any Employee means his
Deferred Compensation plus 415 Compensation paid during a
Plan Year. 414(s) Compensation in excess of $200,000 shall
be disregarded. Such amount shall be adjusted at the same
time and in such manner as permitted under Code Section
415(d).
II-6
(ee) Highly Compensated Employee: An Employee who performed
services for the Employer during the "determination year"
and is in one or more of the following groups:
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall
be the immediately preceding twelve-month period.
The "look-back year" shall be the calendar year ending with
or within the Plan Year for which testing is being
performed, and the "determination year" (if applicable)
shall be the period of time, if any, which extends beyond
the "look-back year" and ends on the last day of the Plan
Year for which testing is being performed (the "lag
period"). If the "lag period" is less than twelve months
long, the dollar threshold amounts specified in (b), (c) and
(d) below shall be prorated based upon the number of months
in the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made without regard to Code Sections
125, 402(a)(8), 402(h)(1)(B) and, in the case of
Employer contributions made pursuant to a salary reduction
agreement, without regard to Code Section 403(b).
Additionally, the dollar threshold amounts specified in (b)
and (c) below shall be adjusted at such time and in such
manner as is provided in Regulations. In the case of such an
adjustment, the dollar limits which shall be applied are
those for the calendar year in which the "determination
year" or "look-back year" begins.
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners"
of the Employer. "Five percent owner" means any person
who owns (or is considered as owning within the meaning
of Code Section 318) more than five percent of the
outstanding stock of the Employer or stock possessing
more than five percent of the total combined voting
power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more
than five percent of the capital or profits interest in
the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be
treated as separate employers.
II-7
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of
$75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000
and were in the Top Paid Group of Employees for the
Plan Year.
(d) Employees who during the "look-back year" were officers
of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) and
received "415 Compensation" during the "look-back year"
from the Employer greater than 50 percent of the limit
in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to
the lesser of (i) 50 employees; or (ii) the greater of
3 employees or 10 percent of all employees. If the
Employer does not have at least one officer whose
annual "415 Compensation" is in excess of 50 Percent of
the Code Section 415(b)(1)(A) limit, then the highest
paid officer of the Employer will be treated as a
Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during
the "determination year" and are also described in (b),
(c) or (d) above when these paragraphs are modified to
substitute "determination year" for "look-back year".
In determining who is a Highly Compensated Employee, all
Affiliated Employers shall be taken into account as a
single employer and leased employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) shall be
considered Employees unless such leased employees are
covered by a plan described in Code Section 414(n)(5) and
are not covered in any qualified plan maintained by the
Employer. In addition, Highly Compensated Former
Employees shall be treated as Highly Compensated
Employees without regard to whether they performed
services during the "determination year".
(ff) Highly Compensated Former Employee: A former Employee who
had a separation year prior to the "determination year" and
was a Highly Compensated Employee in the year of separation
from service or in any "determination
II-8
year" after attaining age 55. Notwithstanding the foregoing,
an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if
during the separation year (or year preceding the separation
year) or any year after the Employee attains 55 (or the last
year ending before the Employee's 55th birthday), the
Employee either received "415 Compensation" in excess of
$50,000 or was a "five percent owner". For purposes of this
Section, "determination year", "415 Compensation" and "five
percent owner" shall be determined in accordance with
Section 2.1(ee). Highly Compensated Former Employees shall
be treated as Highly Compensated Employees.
(gg) Highly Compensated Participant: Any Highly Compensated
Employee who is eligible to participate in the Plan.
(hh) Inactive Participant: Any Employee or former Employee who
has ceased to be a Participant and on whose behalf an
account is maintained under the Plan.
(ii) Insurer: Any legal reserve life insurance company.
(jj) Key-Employee: Any Participant (and his Beneficiary) who, at
any time during the Plan Year or any of the preceding four
(4) Plan Years, is:
(1) an officer of Company (as that term is defined
within the meaning of the regulations under
Internal Revenue Code Section 416).
(2) one of the 10 Employees owning (or considered as
owning within the meaning of Code Section 318) the
largest interests in all employers required to be
aggregated under Code Sections 414(b), (c), and
(m) and receiving Compensation at least equal to
the maximum dollar limitation under Internal
Revenue Code Section 415(c)(1) (A) as in effect
for the calendar year in which the Determination
Date falls.
(3) a "five percent owner" of Company. "Five percent
owner" means any person who owns (or is considered
as owning within the meaning of Internal Revenue
Code Section 318) more than 5 percent of the
outstanding stock of Company or stock possessing
more than 5 percent of the total combined voting
power of all stock of Company. In determining
percentage ownership hereunder, employers that
would otherwise be aggregated under Internal
II-9
Revenue Code Sections 414(b), (c), and (m) shall
be treated as separate employers.
(4) a "one percent owner" of Company having an annual
compensation from Company of more than $150,000.
"one percent owner" means any person who owns (or
is considered as owning within the meaning of
Internal Revenue Code Section 318) more than one
percent (1%) of the outstanding stock of Company
or stock possessing more than one percent (1%) of
the total combined voting power of all stock of
Company. In determining percentage ownership
hereunder, employers that would otherwise be
aggregated under Internal Revenue Code Sections
414(b), (c), and (m) shall be treated as separate
employers. However, in determining whether an
individual has compensation of more than $150,000,
compensation from each employer required to be
aggregated under Internal Revenue Code Sections
414(b), (c), and (m) shall be taken into account.
(kk) Leased Employee: Any person who is not an Employee of
Company and who has, for a period of 1 or more years, and on
a substantially full-time basis, provided services to
Company of a type historically performed by Employees of the
Company, which services are or have been provided pursuant
to an agreement between Company and a leasing organization.
For any Plan Year, any Leased Employee shall be treated as
an Employee of Company for purposes of the participation
standards of Article III, the contribution standards of
Article IV and the vesting standards of Article VIII, unless
such Leased Employee is, for such Plan Year or any portion
thereof during which such Leased Employee provides services
for the Company, a participant in a safe Harbor Plan
provided for such Leased Employee by the leasing
organization leasing the services of such Leased Employee to
the Company. For purposes of the foregoing sentence, a
Leased Employee shall not be treated as an Employee of the
Company until after the close of the aforementioned 1-year
period during which such individual has provided
substantially full-time services to the Company, except that
Years of Service for the Company shall be determined by
taking into account the entire period for which the
individual performed services for the Company.
(ll) Length of Service Required:
(1) on the Effective Date of this Plan: 2 years
II-10
(2) After the Effective Date of this Plan: 2 years
(mm) Limitation Year: Any period of one year ending on the last
day of the Plan Year. If the Plan Year is changed the
limitation year shall correspond to the new Plan Year
beginning with the first full twelve month Plan Year
subsequent to the commencement of change in Plan Year. In
the event the Limitation Year is or has been changed, by
reason of change in the Plan Year or otherwise, the
limitations of Paragraph 4.1 shall be applicable in the
normal manner as if no change had occurred with respect to
the new Limitation Year, but with respect to the Limitation
Year within which the change is made (the former Limitation
Year) the following rule shall apply. The dollar limit for
Annual Additions shall be prorated for allocations made from
the first day of the former Limitation Year through the day
before the first day of the new Limitation Year (the
limitation period) by multiplying (1) the applicable dollar
limitation for the calendar year in which the limitation
period ends by (2) a fraction, the numerator of which is the
number of months (including any fractional parts of a month)
in the limitation period, and the denominator of which is
12.
(nn) Minimum Participation Age Required:
(1) on the Effective Date of the Plan: 21
(2) After the Effective Date of the Plan: 21
(oo) Named Fiduciary: President of Company, except that if
Company is an unincorporated business, the proprietor of
Company if a sole-proprietorship or the partner designated
in the summary plan description for the Plan for purposes of
service of legal process.
(pp) Net Income: The current or accumulated earnings and profits
of the Company as of the fiscal year of Company ending
within or with the Plan Year for which the contribution is
made before any contribution to any qualified retirement
plan.
(qq) Non-Elective Contribution: The portion of the Contribution
allocated to a Participant which the Company must contribute
in order to satisfy the coverage and discriminatory
requirements of Section 401(k)(3)(A)(i) of the Internal
Revenue Code of 1986, as amended.
II-11
(rr) Non-Highly Compensated Participant: shall mean any
Participant who is neither a Highly Compensated Employee nor
a Family Member.
(ss) Non-Key Employee: Any Employee who is not a Key-Employee.
(tt) Normal Retirement Age: The earlier of (1) the Participant's
65th birthday or the date 5 years following a Participant's
commencement of participation in the Plan, whichever is
later; or (2) the Normal Retirement Date.
(uu) Normal Retirement Date: Participant's 65th birthday provided
he has completed five (5) Years of Participation.
(vv) Participant: Any Employee who has qualified under this Plan.
A Participant ceases to be a Participant when all funds in
his account to which he is entitled under the Plan have been
distributed in accordance with the Plan.
(ww) Participation Date: The earlier of the first day of the Plan
Year or the first day of the seventh month of such Plan Year
coincident with or following the date an Employee completes
his eligibility requirements of Section 3.1, provided the
Employee was still employed as of that date (or if not
employed on that date, as of the date of rehire a 1-Year
Break in service has not occured).
(xx) Plan Administrator: Company
(yy) Plan Year: Any period of one year ending December 31. The
first Plan Year shall be the period January 1, 1990 through
December 31, 1990.
(zz) Safe Harbor Plan: A money purchase pension plan with a
nonintegrated employer contribution rate of at least 7 1/2
percent of compensation, and providing for immediate
participation and full and immediate vesting.
(A) Service for Predecessor Employer: In any case in which
Company maintains a plan of a predecessor employer, service
for such predecessor shall be treated as service for
Company, and in any case in which Company maintains a plan
which is not the plan maintained by a predecessor employer,
service for such predecessor shall [as provided in Internal
Revenue Code Section
II-12
414(a) (2)], to the extent required in regulations
prescribed by the Secretary of the treasury or his delegate,
be treated as service for Company.
(B) Shareholder-Employee: If Company is an S Corporation, an
Employee of Company who either individually or together with
his spouse, children, grandchildren and parents, owns more
than 5% of Company's outstanding stock on any day during the
Plan Year.
(C) S Corporation: An electing small business corporation within
the meaning of Internal Revenue Code Section 1362(a).
(D) Super Top-Heavy Plan: A Top-Heavy Plan under which the
present value of accrued benefits or the sum of account
balances (including accounts for Employee contributions) of
Key-Employees under this Plan and any plan of an Aggregation
Group, exceeds 90 percent of the present value of accrued
benefits or the sum of the account balances (including
accounts for Employee contributions) of all Participants
under this Plan and any plan of an Aggregation Group,
measured as of the Determination Date.
(E) Top-Heavy Plan: For Plan Years commencing after December 31,
1983, a Plan under which the present value of accrued
benefits of Key-Employees or the sum of the account balances
(including accounts for Employee contributions) of
Key-Employees under this Plan and any plan of an Aggregation
Group, exceeds 60 percent of the present value of accrued
benefits or the sum of the account balances (including
accounts for Employee contributions) of all Participants
under this Plan and any plan of an Aggregate Group, measured
as of the Determination Date.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan
Year, such Participant's present value of accrued benefit
and/or account balances shall not be taken into account for
purposes of determining whether this Plan is a Top Heavy
Plan (or whether any Aggregation Group which includes this
Plan is a Top-Heavy Group).
(F) Top-Heavy Plan Year: A particular Plan Year commencing after
December 31, 1983, in which the Plan is a Top-Heavy Plan.
II-13
(G) Top Paid Group: "Top Paid Group" means the top 20 percent of
Employees who performed services for the Employer during the
applicable year, ranked according to the amount of "415
Compensation" received from the Employer during such year.
All Affiliated Employers shall be taken into account as a
single employer, and leased employees within the meaning of
Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such leased employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in
any qualified plan maintained by the Employer. For the
purpose of determining the number of active Employees in any
year, the following Employees shall be excluded. However,
such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2 hours
per week;
(c) Employees who normally work less than six (6)
months during a year;
(d) Employees who have not yet attained age 21;
and
(e) Employees who are non-resident aliens and who
received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer
constituting United States source income within the
meaning of Code Section 861(a)(3).
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
(H) Trust Situs: Pennsylvania
(I) Trustee: The Trustee or Trustees named above and any
successor Trustee or Trustees.
II-14
(J) Vesting Computation Period: The consecutive 12 month period
beginning on the first day of the Plan Year. If the Vesting
Computation Period is or has been changed, by reason of a
change in the Plan Year or otherwise, the first Vesting
Computation Period after such change shall begin before the
last day of the preceding Vesting Computation Period and an
Employee who is credited with a Year of Service in both the
last Vesting Computation Period before the change and the
first Vesting Computation Period after the change shall be
credited with 2 Years of Service for purposes of vesting.
(K) Year of Service: For purposes of eligibility, any
Eligibility Computation Period in which Employee has not
less than 1,000 hours of service. For purposes of vesting,
any Vesting Computation Period in which Employee has not
less than 1,000 hours of service. If the Length of Service
required under the Plan is or includes a fractional year, an
Employee shall not be required to have any minimum number of
hours of service to receive credit for such fractional year
for purposes of eligibility. For purposes of benefit
accrual, any Plan Year commencing with the Plan Year in
which the Participant commenced participation in which
Employee has not less than 1,000 hours of service.
II-15
ARTICLE THREE
ELIGIBILITY
3.1 All Employees in the employ of Company on the Effective Date shall
participate as of the Effective Date, provided that on such date they have met
the Minimum Participation Age and Length of Service requirements applicable to
such Employees.
In the event that any Employee in the employ of Company on the Effective
Date does not meet the applicable Minimum Age and service requirements
on the Effective Date, such Employee shall commence participation on the
applicable Participation Date.
3.2 All Employees whose employment commences after the Effective Date
shall commence Participation on the applicable Participation Date.
3.3 Notwithstanding any service requirement of less than one year which
may be contained herein, no Employee who is credited with 1,000 or more hours of
service in an Eligibility Computation Period shall not be considered to have met
at the expiration of said Eligibility Computation Period such required Length of
Service requirement.
3.4 An Employee shall be credited with an hour of service for purposes
of eligibility, vesting and eligibility for Company contributions according to
the following:
(a) An hour of service is each hour for which an Employee is paid, or
entitled to payment, for the performance of duties for Company
during the applicable computation period.
(b) An hour of service is each hour for which an Employee is
paid, or entitled to payment, by Company 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
(including disability), layoff, jury duty, military duty
or leave of absence. Notwithstanding the preceding
sentence:
(1) No more than 501 hours of service are required to be
credited under this subparagraph (b) to an Employee on
account of any single continuous period during which the
Employee performs no duties (whether or not such period
occurs in a single computation period);
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(2) An hour for which an Employee is directly or indirectly paid
or entitled to payment on account of a period during which
no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan
maintained solely for the purpose of complying with
applicable workmen's compensation, or unemployment
compensation or disability insurance laws; and
(3) Hours of service are not required to be credited for a
payment which solely reimburses an Employee for medical or
medically related expenses incurred by the Employee.
For purposes of this subparagraph (b), a payment shall be
deemed to be made by or due from Company regardless of whether
such payment is made by or due from Company directly, or
indirectly through, among others, a trust fund, or insurer, to
which Company contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer,
or other entity are for the benefit of particular Employees or
are on behalf of a group of Employees in the aggregate.
(c) An hour of service is each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by
Company. The same hours of service shall not be credited both
under subparagraph (a) or subparagraph (b), as the case may be,
and under this subparagraph. Crediting of hours of service for
back pay awarded or agreed to with respect to periods described
in subparagraph (b) shall be subject to the requirements set
forth in that subparagraph.
Also included is the special rule for determining hours of
service for reasons other than the performance of duties,
as well as the rule for crediting of hours of service to
computation periods, as set forth in Labor Department
Regulations Section 2530.200b-2(b) and (c), respectively.
(d) Additional hours of service in the minimum amount necessary to
prevent a break in service shall be credited to employees for the
following absences:
(1) Authorized leave of absence, provided the Employee
returns to active employment on or before the end of
such leave of absence. Authorized leave of absence
shall include
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illness and reserve duty in the Armed Forces of
the United states.
(2) Absence of an Employee subsequent to the effective
date who enters the Armed Forces of the United
states and has reemployment rights under law,
provided, he complies with the requirements of the
law as to employment and reemployment.
(e) Additional Hours of Service, but not in excess of 501, based on
the number of Hours of Service which otherwise would normally
have been credited to individuals but for such absence as is
described below, (or if such number cannot be determined, 8 Hours
of Service per day of such absence), shall be credited to
individuals for purposes of eligibility and vesting, but not for
purposes of benefit accrual, (notwithstanding 3.4 above), in the
Eligibility and Vesting Computation Periods in which such absence
begins, if necessary to prevent a 1 year Break in Service in such
Computation Period, but if not so necessary, in the immediately
following Eligibilty and Vesting Computation Periods, provided
that the absence is for maternity or paternity reasons and shall
mean an absence on account of the following:
(i) The pregnancy of the individual;
(ii) The birth of a child of the individual;
(iii) The placement of a child with the
individual in connection with the
adoption of such child by such
individual;
(iv) Care of such child for a period beginning
immediately after his birth or placement.
However, no Hours of Service will be credited under this
subparagraph unless the individual furnishes to the Plan
Administrator such timely information as the Plan
Administrator may reasonably require to establish the number
of days of absence and the reason or reasons therefore.
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3.5 Hours of service shall be counted for purposes of eligibility,
vesting and benefit accrual on the basis of actual hours for which an Employee
is paid or entitled to payment, as determined in accordance with Paragraph 3.4.
3.6 Within 90 days of the Participation Date on which an Employee shall
become eligible to participate, the Plan Administrator shall notify each such
Employee of his eligibility to participate by providing such Employee with a
summary plan description.
3.7 In the case of an Employee who has a vested benefit and sustains a
Break in Service, such Employee shall recommence active participation on the
first day of his first Eligibility Computation Period after the break during
which he has completed 1,000 hours of service or more. In the case of an
Employee with no vested benefit who sustains a Break in Service, where the
number of consecutive years in which he incurred a Break in service are less
than the aggregate number of years in which he attained a Year of Service before
such break, such Employee shall recommence active participation on the first day
of his first Eligibility Computation Period after the break during which he has
completed 1,000 hours of service or more. In the case of an Employee with no
vested benefit who sustains a Break in Service, where the number of consecutive
years in which he incurred a Break in service are equal to or greater than the
aggregate number of years in which he attained a Year of Service before such
break, such Employee shall be treated as if he were a new Employee for purposes
of eligibility to participate. The aggregate number of Years of Service before a
Break in service shall not include any Years of Service not required to be taken
into account under this Paragraph by reason of any prior Break in Service! For
purposes of vesting for an Employee who has sustained a Break in service, the
provisions of Article 8 shall apply. For purposes of benefit accrual, the
provisions of Article 4 shall apply.
Notwithstanding any provision of the Plan to the contrary, in the case
of an Employee who sustains a Break in Service under a Plan that
provides a Length of Service requirement in excess of one year,
provided such Employee has not satisfied such Length of Service
requirements prior to incurring a Break in service, service before such
Break in Service shall not be taken into account for purposes of
eligibility.
3.8 Notwithstanding any provision of this Plan to the contrary, this
Plan shall not provide contributions or benefits for an Owner-Employee who
controls, or a group of Owner-Employees who together control an unincorporated
trade or business with respect to which the Plan is established, and such Owner-
III-4
Employee, or group of Owner-Employees also control one or more
unincorporated trades or businesses, unless this Plan and the plans
established with respect to such other trades or businesses when
coalesced constitute a single plan which satisfies the requirements of
Section 401(a) and (d) of the Internal Revenue Code with respect to
the employees of all such unincorporated trades or businesses.
Furthermore, the Plan shall not provide contributions or benefits for
one or more Owner-Employees who control one or more unincorporated
trades or businesses, unless the employees of each such unincorporated
trade or business which such Owner-Employees control are included
under a plan which satisfies the requirements of Section 401(a) and
(d) of the Internal Revenue Code and which provides contributions or
benefit for employees not less favorable than those provided for such
owner-Employees under this Plan. For purposes of this Paragraph 3.8,
an owner-Employee, or a group of Owner-Employees, shall be considered
to control a trade or business if such owner-Employee, or such group
of Owner-Employees together own the entire interest in an
unincorporated trade or business, or in the case of a partnership, own
more than 50% of either the capital interest or the profits interest
in such partnerships. An Owner-Employee shall mean a sole proprietor,
or, in the case of a partnership, any person who owns more than 10% of
the capital or profits interest.
III-5
ARTICLE FOUR
CONTRIBUTIONS AND MANAGEMENT OF FUNDS
4.1 Company, subject to its rights to terminate and amend this Plan and
Trust, shall contribute to the Trust, within thirty (30) days after the last day
of the Plan Year, such portion of a Participant's compensation with respect to
which the Participant has made a written election to reduce his or her
compensation in accordance with the provisions of Paragraph 4.3 (hereinafter
referred to as the "Elective Contribution").
The Company may make a contribution to the Plan for any Plan Year. Said
contribution (hereinafter referred to as the "Non-Elective Contribution") shall
be a discretionary amount made out of the Company's Net Income. Participants
who perform less than a Year of Service during the Plan Year or are not employed
on the last day of the Plan Year shall not share in this Employer discretionary
contribution. Such Non-Elective Contribution shall be allocated to each
Participant in the same proportion that each such Participant's Compensation for
the year bears to the total Compensation of all Participants for such year.
Only Compensation paid or accrued during a Plan Year on and after the
date an Employee commenced participation shall be taken into account
for purposes of making contributions.
(a) For each Plan Year the annual allocation derived from Elective
Contributions to a Participant's Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral Percentage" of the
Non-Highly Compensated Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group shall not be more than two percentage
points. Additionally, the "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the "Actual Deferral Percentage"
for the Non-Highly Compensated Participant group multiplied by 2. The provisions
of Code Section 401(k)(3) and Regulation 1.401(k)-l(b) are incorporated herein
by reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to
IV-1
make elective deferrals and to make Employee contributions or to
receive matching contributions under this Plan or under any other
plan maintained by the Employer or an Affiliated Employer shall have
his actual contribution ratio reduced pursuant to Regulation
1.401(m)-2, the provisions of which are incorporated herein by
reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and Non-Highly
Compensated Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of the amount of
Employer Elective Contributions allocated to each Participant's Elective Account
for such Plan Year to such Participant's "414(s) Compensation" for such Plan
Year. The actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest one hundredth of
one percent. Elective Contributions allocated to each Non-Highly Compensated
Participant's Account shall be reduced by Excess Deferred Compensation to the
extent such excess amounts are made under this Plan or any other plan maintained
by the Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Code Section 414(q)(6) because such Participant is either a "five
percent owner" of the Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during the year, the following
shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be the
greater of: (i) the ratio determined by aggregating Elective
Contributions and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants without regard to
family aggregation; and (ii) the ratio determined by aggregating
Elective Contributions and "414(s) Compensation" of all eligible
Family Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation", Family
Member shall include only the affected Employee's spouse and any
lineal descendants who have not attained age 19 before the close of
the Plan Year.
(2) The Elective Contributions and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in
paragraph (1) above.
IV-2
(3) If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as
one family group in accordance with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.1(a) and 4.2, a Highly Compensated
Participant and a Non-Highly Compensated Participant shall include any Employee
eligible to make a deferral election pursuant to this Article, whether or not
such deferral election was made or suspended pursuant to such Article.
(e) For the purposes of this Section, if two or more plans (other than
an employee stock ownership plan as defined in Code Section 4975(e) (7)) which
include cash or deferred arrangements are considered one plan for the purposes
of Code Section 401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)
the cash or deferred arrangements included in such plans shall be treated as one
arrangement.
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or deferred arrangements
(other than a cash or deferred arrangement which is part of an employee stock
ownership plan as defined in Code Section 4975(e)(7) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements shall be treated as
one (1) cash or deferred arrangement for the purpose of determining the deferral
percentage with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different Plan Year's, this paragraph shall
be applied by treating all cash or deferred arrangements ending with or within
the same calendar year as a single arrangement.
4.2 In the event that the initial allocations of the Elective
Contributions pursuant to section 4.1 do not satisfy one of the tests set forth
in Section 4.1(a) the Administrator shall adjust Excess Contributions pursuant
to the options set forth below:
(a) On or before the fifteenth day of the third month following the end
of each Plan Year, the Highly Compensated Participant having the highest actual
deferral ratio shall have his portion of Excess Contributions distributed to
him, until one of the tests set forth in Section 4.1(a) is satisfied, or until
his actual deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual deferral ratio. This
process shall continue until one of the tests set forth in Section 4.1(a) is
satisfied. For each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on behalf of such Highly
Compensated Participant determined prior to the application of this paragraph)
minus the amount determined by multiplying the
IV-3
Highly Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s) Compensation". However,
in determining the amount of Excess Contributions to be distributed with
respect to an affected Highly Compensated Participant as determined
herein, such amount shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated Participant
for his taxable year ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions pursuant
to (a) above, such distribution:
(i) may be postponed but not later than the close of the
succeeding Plan Year;
(ii) shall be made from Qualified Non-Elective Contributions
only to the extent that Excess Contributions exceed the balance
in the Participant's Elective Account attributable to Deferred
Compensation;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a distribution of
Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess Contributions
pursuant to (a) above, such recharacterized amounts:
(i) shall be deemed to have occurred on the date on which the
last of those Highly Compensated Participants with Excess
contributions to be recharacterized is notified of the
recharacterization and the tax consequences of such
recharacterization;
(ii) shall not exceed the amount of Deferred Compensation on
behalf of any Highly Compensated Participant for any Plan Year;
(iii) shall be treated as voluntary Employee contributions for
purposes of Code Section 401(a)(4) and regulation
1.401(k)-l(b). Excess Contributions characterized as voluntary
Employee contributions shall continue to be nonforfeitable and
subject to the same distribution rules provided for in Section
4.11;
(iv) are not permitted if the amount recharacterized plus
voluntary Employee contributions actually made by such Highly
Compensated Participant, exceed the maximum amount of voluntary
Employee contributions (determined prior to application of
Section 4.5(a) that such Highly Compensated
IV-4
Participant is permitted to make under the Plan in the
absence of recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of Excess
Contributions and Income.
(b) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is determined under
the family aggregation rules shall be accomplished as follows:
(1) If the actual deferral ratio for the Highly Compensated
Participant is determined in accordance with Section 4.1(c)(1)(ii),
then the actual deferral ratio shall be reduced as required herein
and Excess Contributions for the family unit shall be allocated
among the Family Members in proportion to the Elective Contributions
of each Family Member that were combined to determine the group
actual deferral ratio.
(2) If the actual deferral ratio for the Highly Compensated
Participant is determined under Section 4.1(c)(1)(i), then the
actual deferral ratio shall first be reduced as required herein, but
not below the actual deferral ratio of the group of Family Members
who are not Highly Compensated Participants without regard to family
aggregation. The Excess Contributions resulting from this initial
reduction shall be allocated (in proportion to Elective
Contributions) among the Highly Compensated Participants whose
Elective Contributions were combined to determine the actual
deferral ratio. If further reduction is still required, then Excess
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among then in proportion to their
respective Elective Contributions.
(c) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Non-Elective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.1(a). Such contribution shall be allocated to the
Participant's Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly Compensated Participants.
4.3 A Participant may elect to reduce his or her Compensation or to
forgo an increase in Compensation and direct that the said amount be contributed
to his account by the Company. At any time
IV-5
the Participant may file a written election, provided by the Plan Administrator
with the Plan Administrator, thus permitting a Participant to reduce his
Compensation by way of a payroll reduction. The Plan Administrator may limit the
frequency of changes in authorized payroll deductions such that no more than two
rates of reduction apply in any Plan Year and shall establish by rules of
general applicability the effective date of such reductions, but contributions
made by payroll reduction may be terminated at any time by the Participant by
means of a written request filed with the Plan Administrator at least 20 days in
advance of the date on which such termination is effective.
A Participant's election to reduce his or her salary will be limited to
fifteen percent (15%) of Compensation not to exceed the dollar limit
imposed on Deferred Compensation under Code Section 401(k) for a specific
calendar year, and further subject to the limitations contained in
Paragraphs 4.1, 4.2, 4.6, 4.8 and 4.11. If any Participant's election would
violate the aforementioned restrictions, the application of the
aforementioned limitations by the Plan Administrator shall be made in a
non-discriminatory manner and may include the distribution of Elective
Contributions.
4.4 Participants are not required to make any contributions under this
Plan. However, a Participant may each Plan Year voluntarily contribute to the
Plan on an after-tax basis up to a maximum of 10 percent of Compensation,
reduced by the voluntary contribution to any other qualified plan of the
Company. Contributions by a Participant may be made at any interval determined
by the Plan Administrator to be convenient. Said maximum shall be based upon the
Participant's cumulative Compensation paid to him by the Company since becoming
a Participant.
(a) For purposes of determining Annual Additions for a Participant
under the Plan, voluntary contributions shall be deemed credited
when made, except that contributions made within 30 days after
the close of a Limitation Year shall be deemed credited to that
Limitation Year, if made with respect thereto.
(b) The voluntary contribution made by a Participant shall be
accounted for as a separate fund under the Trust, apart from that
part of the fund which is a result of the Company's contribution.
Records of the amount contributed by a Participant shall be
maintained separately by the Trustee. A Participant's voluntary
contribution shall be 100 percent vested at the time such
contribution is made. Contributions made hereunder by
Participants are not intended to be deductible by Participants
under Section 219(a) of the Internal Revenue Code. All earnings
on the
IV-6
above mentioned fund shall immediately be 100 percent vested.
Each Participant's account shall be valued at least annually at
fair market value.
(c) Amounts credited to a voluntary account shall be invested by the
Trustee in such proportion and in such investments as Participant
shall direct (unless all assets of the Trust are invested in
Contracts), in which case any investment income and loss shall be
allocated solely to such account. In the absence of such
direction (or in the event all assets of the Trust are invested
in Contracts), Trustee, in its discretion, shall invest the
account proportionately, as Trustee determines, and income and
loss shall be allocated as provided in Subparagraph 4.5(b). The
right of a Participant to direct the investment of his account
shall cease with the termination of his employment with Company.
(d) A Participant who contributed voluntarily may withdraw his
contributions and/or earnings thereon at any time upon 60 days
written notice to the Plan Administrator of such intent to
withdraw, with the written consent of the Participant's spouse,
if any, and with the Plan Administrator's approval; except that
in the event a Participant becomes permanently disabled, retires,
dies, or otherwise terminates employment, distribution of the
amount credited to his voluntary account shall be paid to him or
his Beneficiary in a lump sum payment within a reasonable period
of time following his disability, retirement, death or
termination, if so requested by such Participant, if living; or
if not living, if so requested by the Beneficiary of such
participant. At the request of the Participant or his
Beneficiary, as the case may be, and with the consent of the Plan
Administrator, the amount credited to his voluntary account
distributable upon disability, retirement or death, may be paid
under the options for settlement provided in Paragraph 9.3. If
after a reasonable period of time following termination of a
Participant's employment, the Participant or his Beneficiary, as
the case may be, has not requested payment of the amounts
credited to his voluntary account, the Plan Administrator may
direct the trustee to distribute such amount in a lump sum
payment.
(e) Any withdrawal or distribution from a Participant's account for
voluntary contributions shall be deemed made first from
contributions. Earnings shall be withdrawn or distributed only to
the extent that the total withdrawals and distributions exceeds
the total of the Participant's voluntary contributions.
IV-7
Limitations, The Employer may limit, revoke or amend its
agreement to make employee contributions under Section 4.2 on
behalf of any Participant at any time, but only if it determines
that such limitation, revocation or amendment is necessary under
one of the following circumstances:
(i) in the case of a Participant's after-tax contributions, to
insure that the discrimination tests of Section 401(m) of the
Internal Revenue Code governing permissible levels of employee
contributions are met for such Plan Year, or to insure that one
of the following tests is met for such Plan Year.
(A) The actual Average Percentage of the employee
contributions of the Highly-Compensated Employees eligible
to participate is not more than 1.25 times the Actual
Average Percentage of the employee contributions for all
other Employees eligible to participate; or
(B) The Actual Average Percentage of the employee
contributions for the Highly-Compensated Employees eligible
to participate is not more than 2.0 times the Actual
Average Percentage of the employee contributions for all
other Employees eligible to participate and the Actual
Average Percentage of the employee contributions for the
Highly-Compensated Employees eligible to participate does
not exceed the Actual Average Percentage of the employee
contributions for all other Employees eligible to
participate by more than two (2) percentage points; or
(ii) to insure that a Participant's Additions for any calendar
year will not exceed the limitations of Section 4.3; or
(iii) to insure deductibility of the Employer's entire
contribution to the Plan for federal income tax purposes.
If a limitation or amendment becomes necessary pursuant to
paragraph (i) or (iii) above, such limitation or amendment will
be first applied to the Participant who is the
Highly-Compensated Employee electing the highest percentage of
employee contributions pursuant to Section 4.2 until the tests
of (i) or (iii) are met or until such Participant's election
pursuant to Section 4.2 is reduced to the same percentage level
as the Participant who is the Highly-Compensated Employee
electing the second highest percentage of employee contributions
pursuant to Section 4.2. If further limitations are required,
then both such
IV-8
Participants' percentage elections shall be reduced until the
tests of (i) or (iii) are met or until the two Participants'
elections pursuant to Section 4.2 are reduced to the same
percentage level as the Participant who is the Highly
Compensated Employee electing the third highest percentage of
employee contributions pursuant to Section 4.2, and such
limitations or amendments shall continue to be made in a similar
manner from the Participants who are Highly-Compensated
Employees making the highest percentage elections to the lowest
until the tests of (i) or (iii) are satisfied.
If a Participant is prevented from making a portion of his
employee contributions due to a permissible limitation,
revocation or amendment by the Employer, such portion shall be
returned to the Participant prior to its contribution to the
Trust Fund.
In applying the discrimination tests under this Section,
the employer shall treat employee contributions under plans
which are aggregated under Section 401(a)(4) or 410(b) of the
Internal Revenue Code as made under a single plan. In addition,
if a Highly-Compensated Employee is eligible under more than one
plan subject to Section 401(m) of the Code maintained by the
Employer, the Employee's Actual Average percentage is calculated
by treating all of the plans as one plan.
For purposes of this Section, the family aggregation rules
set forth in Section 2.1 of this Plan shall apply. Where the
family aggregation rule is applicable, the family group shall be
treated as one Highly-Compensated Employee and the Actual
Average Percentage for the family group shall be the greater of:
(1) the ratio determined by combining the
compensation and employee contributions of all eligible
family members who are highly-compensated without regard to
family aggregation; and
(2) the ratio determined by combining the
compensation and employee contributions of all eligible
family members.
For purposes of this Section 4.2(f) the following meanings
shall apply. The "Actual Average Percentage" for a specified
group of Employees for a Plan Year shall be the amount of
employer contributions actually paid to the Trust by each such
Employee for each Plan Year to the Employee's Compensation for
such Plan Year. The term "Compensation" shall include all
amounts paid by the
IV-9
Employer to the Employee which are currently includible in the
Employee's gross income. The Employer shall have the right to
use such alternate definition of Compensation as the Internal
Revenue Service may provide by regulation under Code Section
414(s).
4.5(a) The "Actual Contribution Percentage" for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2 percentage points.
However, to prevent the multiple use of the alternative method
described in this paragraph and Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make elective deferrals
pursuant to Section 4.1 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer and to make
Employee contributions or to receive matching contributions under
this Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2. The provisions of Code Section
401(m) and Regulations 1.401(m)-l(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.6, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group the ratios (calculated separately for each
Participant in each group) of:
(1) the sum of voluntary Employee contributions and Excess
Contributions recharacterized as voluntary Employee contributions on
behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution Percentage"
and the amount of Excess Aggregate Contributions pursuant to Section
4.5(d), the Administrator may elect to take into account, with respect
to Employees eligible to have Employer matching contributions;
voluntary Employee contributions; allocated to their accounts, elective
deferrals (as defined in Regulation 1.402(g)-l(b)) and qualified
non-elective contributions (as defined in Code Section 401(m)(4)(C)
contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2)
which is incorporated herein by
IV-10
reference. However, the Plan Year must be the same as the plan year of
the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution ratio of
a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant) shall
be the greater of: (i) the ratio determined by aggregating Employer
matching contributions made: voluntary Employee contributions,
Excess Contributions recharacterized as voluntary Employee
contributions and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants without regard to
family aggregation; and (ii) the ratio determined by aggregating
Employer matching contributions made : voluntary Employee
contributions made: Excess Contributions recharacterized as
voluntary Employee contributions: and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s) Compensation,"
Family Members shall include only the affected Employee's spouse and
any lineal descendants who have not attained age 19 before the
close of the Plan Year.
(2) The Employer matching contributions made; voluntary Employee
contributions made; Excess Contributions recharacterized as
voluntary Employee contributions; and "414(s) Compensation" of all
Family Members shall be disregarded for purposes of determining the
"Actual Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in
paragraph (1) above.
If a Participant is required to be aggregated as a member of more
than one family group in a plan, all Participants who are members of
those family groups that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section, if two or more plans of the
Employer (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7) to which matching contributions, Employee
contributions, or both, are made are treated as one plan for purposes
of Code Sections 401(a)(4) or 410(b) (other than the average
benefits test under Code Section 410(b)(2)(A)(ii) such
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plans shall be treated as one plan for purposes of this Section 4.6.
In addition, two or more plans of the Employer to which matching
contributions, Employee contributions or elective deferrals are made
may be considered as a single plan for purposes of this Section. In
such a case, the aggregated plans must satisfy Code Sections 401(a)(4)
and 410(b) as though such aggregated plans were a single plan.
Notwithstanding the above, contributions to an employee stock
ownership plan as defined in Code Section 4975(e)(7) shall not be
aggregated with this Plan.
(f) If a Highly Compensated Participant participates in two or more
plans (other than an employee stock ownership plan as defined in Code
Section 4975(e)(7) which are maintained by the Employer or an
Affiliated Employer to which matching contributions, Employee
contributions or elective deferrals are made, all such contributions
on behalf of such Highly Compensated Participant shall be aggregated
for purposes of this Section.
(g) For purposes of Sections 4.6(a) and 4.7, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions (whether or
not a deferral election was made or suspended) voluntary Employee
contributions (whether or not voluntary Employee contributions are
made) allocated to his account for the Plan Year.
4.7 (a) In the event that the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.6(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant
having the highest actual contribution ratio, his portion of Excess
Aggregate Contributions (and Income allocable to such contributions)
until either one of the tests set forth in Section 4.6(a) is
satisfied, or until his actual contribution ratio equals the actual
contribution ratio of the Highly Compensated Participant having the
second highest actual contribution ratio. This process shall continue
until one of the tests set forth in Section 4.6(a) is satisfied.
(b) Any distribution of less than the entire amount of Excess
Aggregate Contributions (and Income) shall be treated as a pro rata
distribution, of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and
Income).
(c) Excess Aggregate Contributions attributable to amounts other
than voluntary Employee contributions, including forfeited
IV-12
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate contributions is equal to the total Employer matching
contributions: voluntary Employee contributions made Excess
Contributions recharacterized as voluntary Employee contributions: and
any qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.6(c) on behalf of the Highly
Compensated Participant (determined prior to the application of this
paragraph) minus the amount determined by multiplying the Highly
Compensated Participant's actual contribution ratio (determined after
application of this paragraph) by his "414(s) Compensation". The
actual contribution ratio must be rounded to the nearest one-hundredth
of one percent. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed
the amount of Employer matching contributions made : voluntary Employee
contributions made, Excess Contributions recharacterized as voluntary
Employee contributions: and any qualified non-elective contributions
or elective deferrals taken into account pursuant to Section 4.6(c) on
behalf of such Highly Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the plan
year of any other qualified cash or deferred arrangement (as defined in
Code Section 401(k)) maintained by the Employer that ends with or
within the Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section 4.6(a).
(f) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules
shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly Compensated
Participant is determined in accordance-with Section 4.6 (d)(1)
(ii), then the actual contribution ratio shall be reduced and the
Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the of Employer
matching contributions made : voluntary Employee contributions made,
Excess Contributions recharacterized as voluntary Employee
contributions : and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.6(c) of
each Family
IV-13
Member that were combined to determine the group actual contribution
ratio.
(2) If the actual contribution ratio for the Highly Compensated
Participant is determined under Section 4.6(d)(1)(i), then the actual
contribution ratio shall first be reduced, as required herein, but
not below the actual contribution ratio of the group of Family
Members who are not Highly Compensated Participants without regard to
family aggregation. The Excess Aggregate Contributions resulting from
this initial reduction shall be allocated among the Highly
Compensated Participants whose Employer matching contributions made;
voluntary Employee contributions made, Excess Contributions
recharacterized as voluntary Employee contributions; and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.6(c) were combined to determine the
actual contribution ratio. If further reduction is still required,
then Excess Aggregate Contributions resulting from this further
reduction shall be determined by taking into account the
contributions of all Family Members and shall be allocated among them
in proportion to their respective Employer matching contributions
made; voluntary Employee contributions made, Excess Contributions
recharacterized as voluntary Employee contributions; and any
qualified non-elective contributions or elective deferrals taken into
account pursuant to Section 4.6(c).
(g) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.6(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total Compensation
of all Non-Highly Compensated Participants. A separate accounting shall
be maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 4.1(a).
4.8 All payments by the Company shall be made to the Trustee to be
administered in accordance with the Trust Agreement, and consistent
with the provisions of Paragraph 4.11.
4.9 As of the last day of the Plan Year, the fund shall be valued at
fair market value and there shall be added to each Participant's
account derived from Company contributions:
(a) That proportion of the Company's contribution in
accordance with Paragraph 4.1; and
IV-14
(b) That portion of the net accretions and diminutions to the
fund by way of income and loss and realized and unrealized
gains and losses which bears the same ratio to the total
of such net accretions and diminutions as his account
(exclusive of Cash Value) at the preceding Anniversary
Date (reduced by any distributions during the Plan Year)
bore to the total account of all Participants (exclusive
of Cash Value and reduced by any distributions or
forfeitures during the Plan Year) plus any increases in
Cash Value and less the cost of insurance Contracts
allocated to the participant's account. (During the first
Plan Year, such proportion shall be based on the
Participant's share of the Company's contribution.)
4.10 The fact that an allocation shall be made and credited to the
account of the Participant whether by mistake or otherwise shall not
vest in the Participant any right, title or interest in and to any
assets, except at the time or times and upon the terms and conditions
expressly set forth in the Plan.
4.11 The following limits apply to allocations of Annual Additions:
(a) Notwithstanding any provision to the contrary contained
herein, no allocation of an Annual Addition shall be made
to a Participant's account(s) to the extent that such
allocation shall cause the Annual Addition to this Plan,
and to any other qualified defined contribution plan of
the Company (or of any other entity which is a member of a
controlled group of entities as defined in Internal
Revenue Code Section 414(b), (c) and (m) of which Employer
is also a member), to exceed the lesser of $30,000 or 25%
of the Participant's compensation in any given limitation
year. For purposes of applying these limitations
"compensation" shall mean the Participant's "wages,
salaries, fees for professional services and other amounts
received for personal services actually rendered in the
course of employment" with Company and such other amounts
as are specified by Treasury Department Regulation Section
1.415-2(d)(1). Compensation shall exclude all items
specified in Treasury Department Regulation Section
1.415-2(d)(2), including contributions to a plan of deferred
compensation, amounts realized from qualified or non-
qualified stock options, and other amounts which receive
special Federal Income Tax benefit (such as contributions
to 403(b) annuity contracts or premiums qualifying for
exclusion from income under Section 79 of the Code). The
above mentioned dollar limitation shall be adjusted so as
to be equal to the maximum dollar limitation for defined
contribution plans prescribed by the Secretary of the
IV-15
Treasury or his delegate. In the case of a Self-Employed
individual, "Compensation" shall mean the participant's
"Earned Income (within the meaning of Internal Revenue Code
Section 401(c)(2) but determined without regard to any
exclusion under Internal Revenue Code Section 911) from
Company."
(b) If the Annual Addition under this Plan to a Participant's
account is to be reduced as a result of the above limitation,
such reduction shall be effected by:
(i) first, returning any employee contributions made during
the Plan Year which are Annual Additions, (and any
earnings attributable thereto),
(ii) next, allocating Company contributions otherwise
allocable to a Participant's account up to the limitation
on Annual Additions.
(c) Company shall endeavor to avoid making contributions which
would, if allocated according to the terms of the Plan
result in Annual Additions in excess of the limits
described in this paragraph, (an excess amount), but if as
a result of the amount of forfeitures to be allocated or
errors in estimating Compensation or under such other
facts and circumstances as the Commissioner of Internal
Revenue permits there is an excess amount such amount
shall be held unallocated in a suspense account and
allocated in the next Limitation Year (and succeeding
Limitation Years if necessary) to all Participants for
whom allocations of contributions or forfeitures would
normally be made and in the manner and up to the limits
prescribed by this Article and shall reduce any Company
contribution which would otherwise be made to the Plan.
Investment gains and losses shall not be allocated to the
suspense account. If it is discovered that an excess
amount has been improperly allocated, such amount shall be
subtracted immediately from the affected Participant's
account (including the earnings allocated as a result of
such improper allocation) and held in suspense as
described above.
In the event of termination of the Plan the suspense account
shall revert to the Employer pursuant to Paragraph 16.5.
(d) If in any Limitation Year Company maintains any other qualified
defined contribution plan(s), Annual Additions shall be deemed
allocated first to any money purchase pension plan and next to
any profit sharing plan.
IV-16
(e) In any case in which an individual is or has been a
Participant in both a defined benefit plan and a defined
contribution plan maintained by Company (or by any other
entity which is a member of a controlled group of entities
as defined in Code Section 414(b), (c) and (m) of which
Employer Plan is a member), the sum of the Defined Benefit
Plan Fraction and the Defined Contribution Plan Fraction
for any Limitation Year may not exceed 1.0. If any
reductions are required in order not to exceed this
fraction they shall be made first to the defined
contribution plans of Company, first to any profit sharing
plan of Company and next to any money purchase pension
plan of Company. Such reduction shall be effected by
reducing the sum of the current Limitation Year Annual
Additions in accordance with the procedure of Subparagraph
4.10(d) so that the Defined Contribution Plan Fraction
does not exceed 1.0 minus the defined benefit fraction at
the end of the Limitations Year. Any amount received by
this reduction shall be held in suspense in accordance
with Subparagraph 4.10(c). Provided further that if this
reduction is insufficient to reduce the overall limit to
1.0 then the Defined Benefit Plan Fraction shall be
reduced to the extent necessary to bring about compliance.
4.12 Notwithstanding any provision of the Plan to the contrary,
Elective Contributions attributable to Participant deferrals shall not
be distributable earlier than upon the Participant's hardship,
retirement death, disability, separation from service
or attainment of age 59 1/2.
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ARTICLE FIVE
RETIREMENT BENEFITS
5.1 A Participant may elect to retire on his Normal Retirement Date,
whereupon his eligibility for Company contributions hereunder shall cease. If a
Participant remains in the employ of Company subsequent to Normal Retirement
Date contributions shall be made for such Participant. If Company consents, a
participant may retire on his Early Retirement Date, whereunder his eligibility
for Company contributions hereunder shall cease.
In the case of Early Retirement, the vesting schedule shall apply. In
the case of Normal Retirement, the total amount credited to an employed
Participant's account shall become 100 percent vested at the
Participant's Normal Retirement Age. If the Company makes a contribution
for a Participant subsequent to such date, such Participant shall be 100
percent vested in that contribution and any earnings thereon.
5.2 The Trustee shall distribute to a retired Participant the value of
his vested amount in accordance with the provisions of Article 9.
V-1
ARTICLE SIX
DISABILITY BENEFITS
6.1 Any Participant who has become totally and permanently disabled
shall be entitled to retire effective the first day of the next Plan Year
subsequent to the date disability commenced, but payment shall be made only
after the Plan Administrator receives written notice of a determination of such
disability by a medical certificate issued by a doctor selected or approved by
the Plan Administrator. Total disability shall mean disability of either a
physical or mental nature, so as to prevent the Participant from performing the
duties of his employment with the Company. Permanent Disability shall mean
disability of either a physical or mental nature which is expected to last for a
period of 6 months or longer and which results in a termination of the
Participant's employment with Company. All Participants shall be treated alike
under similar circumstances.
6.2 A Participant retiring because of such disability shall receive his
total account calculated as of the most recent valuation date. Payment shall be
made after the Participant is entitled to retire and within 6 months of the date
on which the Plan Administrator receives notice in accordance with the preceding
paragraph, unless the Participant elects to defer commencement of payment,
pursuant to Paragraph 9.2, but in no circumstances shall payment be made later
than the period prescribed in Paragraph 9.2.
6.3 In lieu of a determination of disability pursuant to Paragraph 6.1
above, a determination of entitlement for disability benefits under Social
Security shall be conclusive evidence of total and permanent disability, but a
failure to attain such determination shall not be determinative of any rights to
receive disability benefits under this Plan. Recovery from total and/or
permanent disability subsequent to entitlement for receipt of benefits under
this Article shall not prejudice any right to receive or to continue to receive
such benefits.
VI-1
ARTICLE SEVEN
DEATH BENEFITS
7.1 In the event of the death of a Participant prior to the
commencement of payment of his retirement benefits, his death benefit shall be
the entire amount in his account (exclusive of Cash Value), as of the most
recent valuation date, and the proceeds of any Contract allocated to his
account, provided that the death benefit of a Participant who has terminated
service with Company shall be equal to his vested interest as computed under
Article 8 or Article 6, as the case may be, (exclusive of Cash Value) and the
proceeds of any Contracts allocated to his account. Such death benefits shall be
paid to his designated Beneficiary as soon as is convenient, but not later than
60 days after the next valuation date.
(a) If insurance exists as a Trust asset, the following shall apply
to the insurance proceeds.
(1) The Plan Administrator, at the direction of the
Participant, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 for the
insurance.
(2) If no mode of settlement has been selected in accordance
with (a) (1) above, the Plan Administrator at the direction
of the Beneficiary, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 within 60
days after the day on which a lump sum in full discharge of
the death benefit obligation under any insurance Contracts
first becomes payable.
Under no circumstances may the mode of settlement from the
insurance proceeds be other than one permitted by Paragraph
9.3.
(b) In regard to non-insurance Trust assets, the following shall
apply:
(1) The Plan Administrator, at the direction of the
Participant, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 for the
Trust assets.
(2) If no mode of settlement has been selected in accordance
with (b) (1) above, the Plan administrator, after
consultation with the
VII-1
Beneficiary, shall direct the Trustee to designate a
settlement option as permitted in Paragraph 9.3 within 60
days after the day on which a lump sum in full discharge
of the death benefit obligation first becomes payable.
7.2 The Beneficiary or successor Beneficiary of any death benefit shall
be in accordance with the designation made by the Participant. The Participant
shall have the right to designate the Beneficiary or successor Beneficiary by
filing a designation of Beneficiary form with the Plan Administrator. At any
time, and from time to time, each Participant shall have the unrestricted right
to change the designation of the Beneficiary to receive any death benefits
hereunder. All designations shall be made in writing on the form required by the
Plan Administrator and shall be filed with the Plan Administrator. If no
designation has been made, if the designated Beneficiary has predeceased the
Participant, or if the designation of beneficiary is inoperative for any reason
as to any part of any death benefit hereunder, then the Participant shall be
deemed to have designated the following as his Beneficiary with priority in the
order named:
(a) his widow or her widower, as the case may be;
(b) his issue, per stirpes;
(c) his parents;
(d) his brothers and sisters, per stirpes; and
(e) his estate.
Notwithstanding anything to the contrary contained herein, if a
Participant is married, no designation of a beneficiary other than the
Participant's spouse or change of designation from a Participant's
spouse to someone else, shall be valid, unless (a) the Participant's
spouse consents in writing to such election or change, (b) such
Participant election designates a beneficiary (or a form of benefits)
which may not be changed without spousal consent (or the consent of
the spouse expressly permits designations by the Participant without
any requirement of further consent by the spouse), and (c) the
spouse's consent acknowledges the effect of such election, and is
witnessed by the Plan Administrator or a notary public, unless it is
established to the satisfaction of the Plan Administrator that such
consent may not be obtained because there is no spouse, because the
spouse cannot be located, or because of such other circumstance as may
be prescribed by regulations to be issued by the Secretary of the
Treasury. Any such consent by a spouse shall be effective only with
respect to such spouse.
VII-2
7.3 The Trustee shall be designated to receive the proceeds of any
Contract which becomes payable upon the death of the Participant. The Trustee
may, however, request Insurer to make any beneficiary designation as may be made
by the Participant under Paragraph 7.2 above. In such event the Beneficiary so
designated may be revoked only upon the completion of the requirement
established by the Insurer and the terms of any contracts and the rules of the
Insurer.
7.4 Upon the death of a Participant, the Trustee shall take all
necessary steps and shall execute all required documents to permit the
Beneficiary to collect the death benefits provided pursuant to the specified
method of payment.
VII-3
ARTICLE EIGHT
SEPARATION BENEFITS
8.1(a) Vesting. A Participant shall become fully vested in his
Participant account immediately upon entry into the Plan, and as such shall have
at all times a 100% nonforfeitable right to his Participant account.
No Participant shall forfeit any part of his account until the earlier
of (a) five (5) consecutive one-year Breaks in service or (b) a
cash-out distribution of the entire vested portion of his account
balance derived from Company Contributions, following the Participant's
termination of employment. As of the last day of the Plan Year with or
within which such Breaks in Service or cash-out distribution has
occurred, the nonvested portion of such Participant's account, if any,
shall be forfeited and administered as provided in Article 4.
(b) Distribution. If, upon termination of a Participant's
employment for any reason other than retirement, death or
total and permanent disability, the present value of the
Participant's vested account shall not exceed $3,500, (or
such lesser amount as may be prescribed by the regulations
of the Secretary of the Treasury governing such payments),
the Plan Administrator may direct the Trustee to
distribute the value of the vested account to the
Participant.
If the present value of the Participant's vested account exceeds
the amount specified in the preceding sentence, the Participant
and his spouse, if any, may file with the Plan Administrator a
written request for the payment of the entire amount of his
vested account, and the Plan Administrator may thereupon direct
the Trustee to pay out this amount.
(c) Administration of Participants' Accounts. No share of gains or
losses shall be credited to the forfeitable portion of a
Participant's account, if any, after the last valuation date
prior to the date the forfeiture occurs, until the next
valuation date following the date, if any, as of which the
Participant's account is restored.
Following completion of distributions, a Participant's account
derived from Company contributions shall be cancelled, as of the
date the non-vested portion of his account, if any, would be
forfeited.
VIII-1
If the Participant is not vested in any portion of his account,
upon forfeiture the account shall be cancelled.
If the Participant is vested in all or a portion of his account,
and no distribution is made following termination of employment
or the occurrence of a 1 year Break in Service, a 100% vested
account shall be maintained for his vested interest in the Plan,
as of the date the nonvested portion of his account, if any,
would be forfeited. If this account is subsequently distributed,
upon completion of payment the account shall be cancelled.
Subject to Subparagraph 8.1(d) below, if the Participant,
subsequent to cancellation of his account, becomes eligible at a
later date to share in Company Contributions (including
forfeitures) and earnings thereon they shall be allocated to a
newly established regular account.
(d) Restoration of a Participant's Accounts Following Forfeiture.
The concept "Restoration of a Participant's Account" does not
apply in the case of a Participant who was already 100% vested
in his account prior to the occurrence of an event (distribution
or incurrence of a 1 year Break in Service) which would
otherwise cause a forfeiture.
Only the amount in an account which has been forfeited is
subject potentially to restoration. Such an amount shall be
equal to the amount forfeited to the Trust, unadjusted for gains
or losses, and shall be termed the "Restoration Amount".
If a Year of Service is credited to a Participant following an
event causing forfeiture, restoration of the amount forfeited is
possible, provided that said Year of Service is not preceded by
the incurrence of a period of 5 or more consecutive 1 year
Breaks in Service.
A possible restoration automatically will become an actual
restoration, if no distribution has occurred with respect to the
vested portion of the affected Participant's account deriving
from Company Contributions.
If distribution of all of a Participant's vested account
deriving from Company Contributions has occurred, in order for a
possible restoration to become an actual restoration, the
Participant must repay the full amount of the distribution. Such
repayment may be made no later than the later of: the end of the
5 year period following distribution, or the end of the Vesting
Computation Period within which the Participant has the 5th of 5
consecutive
VIII-2
1 year Breaks in Service. In the event the Participant repays
the distribution within the time allowed, Company shall add the
amount of repayment to the amount in the Participant's account.
An actual restoration shall occur on the date as of which
Company Contributions, if any, would be allocated, coincident
with or next following the fulfillment of all conditions
required for restoration, and such date shall be termed the
"Restoration Date".
The Restoration Amount shall be derived from Company
contributions, which shall accrue as of the Restoration Date.
Said company Contributions shall be paid no later than the Plan
Year following the end of the Plan Year in which the
contribution is accrued, notwithstanding any absence of profits
of Company.
No repayment by any Participant and no Restoration Amount shall
constitute Annual Additions under the Plan.
It shall be the duty of the Plan Administrator to give timely
notification to any rehired Employee, if such Employee is
eligible to make repayment, of his right to make repayment.
In the event a restoration of a Participant's account following
forfeiture occurs, service performed both prior to and
subsequent to the forfeiture shall be credited, to determine his
vested interest in his entire account derived from Company
contributions.
If an Employee has the right to repay a distribution, service
performed prior to forfeiture may not be disregarded, whether or
not repayment is made, for purposes of determining the
Participant's vested interest in account allocations made
subsequent to the date of forfeiture.
If an Employee is rehired prior to a 1 year Break in Service,
and if no distribution has been made to such Employee in
accordance with Subparagraph 8.1(b), for purposes of determining
the Employee's vested interest in both his pre-termination and
post-termination account allocations under the Plan, service
performed prior to termination shall be taken into account.
If an Employee completes a Year of Service after a Break in
Service consisting of 5 or more consecutive 1 year Breaks in
Service, whether or not a distribution has been made to such
Employee, for purposes of determining the
VIII-3
Employee's vested percentage in his account allocated to him
before such break, post-break Years of Service shall not be
credited, but pre-break Years of Service shall be credited to
determine the Employee's vested percentage in post-break account
allocations, unless the rule of parity provided in Subparagraph
8.2 (a) applies.
8.2 For purposes of determining Years of Service under Paragraph 8.1
above, all Years of Service with the Company are to be credited for purposes of
vesting, except:
(a) Years of Service prior to any period of consecutive 1 year
Breaks in Service, if the Employee was not vested in
benefits deriving from Company Contributions at the time
he incurs a period of consecutive 1 year Breaks in
Service, and his number of consecutive 1 year Breaks in
Service equals or exceeds the greater of 5 or the
aggregate number of his Years of Service, whether or not
consecutive, completed before such period of consecutive 1
year Breaks in Service.
(b) Years of Service prior to any period of consecutive 1 year
Breaks in Service, until the Participant has completed 1 year of
Service after such period.
8.3 The nonforfeitable account of a Participant shall be the product of
his vested percentage times his account balance. If the vesting schedule of the
Plan is or has been amended, for all Plan Years beginning with the Plan Year in
which the amended vesting schedule is effective, the vested percentage of a
Participant's account balance shall be computed in accordance with the amended
schedule.
However, at no time after the date of adoption of an amended vesting
schedule (or the effective date, if later) shall a Participant's
nonforfeitable amount be less than an amount ("V") determined by the
formula: V = (A x C(1)) + (B x (C(2) - C(1)). For purposes of applying
the formula: A is the vested percentage at the date of adoption of an
amended vesting schedule (or its effective date, if later), B is the
vested percentage at any time after the amendment, computed in
accordance with the amended vesting schedule, C(1) is the account
balance at the date of adoption of the amended vesting schedule (or its
effective date, if later), and C(2) is the account balance at any time
subsequent to the date or adoption (or its effective date, if later).
8.4 A Participant having at least 5 Years of Service with the Company,
prior to the expiration of the election period described below, may elect to
have his vested portion computed under the Plan, without regard to any
subsequent amendment to the vesting schedule. An amendment to the vesting
schedule includes any
VIII-4
amendment which directly or indirectly affects the computation of the vested
percentage of an Employee's account balance, and includes any change resulting
from the operation of Paragraph 18.4. Such an election shall be irrevocable, and
must be filed with the Plan Administrator no later than 60 days after the day
the Plan amendment is adopted, or becomes effective, or the Participant is
issued written notice of the amended vesting schedule by the Plan Administrator
(whichever last occurs). In the event that a Participant makes the election as
hereinabove provided, the vesting schedule in effect prior to the amendment of
the vesting schedule shall apply to determine the vested percentage of such
participant's account.
Notwithstanding the above, no election shall be permitted if the
vesting schedule in effect prior to the amendment did not satisfy the
requirements of Internal Revenue Code Section 411(a) (2), unless under
such schedule all Participants are at least 50 percent vested after 10
Years of Service and 100 percent vested after 15 Years of Service.
Furthermore, no election shall be allowed to any Participant whose
vested percentage under the Plan, as amended, cannot be less at any
time than such percentage determined without regard to such amendment.
8.5 Any Participant who has terminated employment or who is no longer a
member of an eligible class of Employees, and who is entitled to a deferred
vested benefit under the Plan, and who has not received a distribution of such
benefit by the end of the Plan Year following the Plan Year in which such
termination of employment or eligibility occurred, shall be given notification
of the following by the Plan Administrator: the amount of his vested benefit,
the amount of his pre-retirement death benefit, the Normal Retirement Date of
the Plan, any benefits which are forfeitable if the Participant dies before a
certain date, and such other information as may be prescribed by regulations
issued by the Secretary of the Treasury or his delegate.
VIII-5
ARTICLE NINE
PAYMENT OF BENEFITS
9.1 When a participant's employment is terminated or where a 1 year
Break in Service has occurred, the Plan Administrator shall determine his
interest, and if the full amount of his vested interest is not to be distributed
immediately to the Participant, the Plan Administrator shall cause such
Participant's interest to continue to be separately accounted for on the books
and records of the Plan. Until the full amount of his vested interest shall have
been distributed to the Participant in accordance with the terms hereof, there
shall be added to the balance of such Participant's account the income earned by
his account. The Plan Administrator may direct the trustee to place the value of
such account in one or more federally insured bank or savings and loan accounts
(including certificate of deposit accounts) in the name of the Trustee in trust
for said Participant, in which case the interest shall be credited to his
account at such times as are provided by the account but at least annually. In
the absence of such direction, Trustee, in its discretion shall invest the
account proportionately as Trustee determines and income and loss shall be
allocated as provided in Subparagraph 4.5(b). The Trustee may charge against
such account a prorate portion of the fees and expenses incurred in the
administration of the Plan.
9.2 Payments by Trustee to any Participant of such Participant's entire
interest hereunder shall begin on the first day of the month following the
latest to occur of:
(a) the Normal Retirement Age; or
(b) The Plan Anniversary Date coinciding with or following
termination of service with Company. However, in no event
shall such payments commence after April 1st of the
calendar year following (a) the calendar year in which he
attains age 70 1/2, or (b) in the case of a Participant
who is not a 5 percent owner (as defined in Subparagraph
2.1(t)), the calendar year in which he retires, whichever
is the later. Notwithstanding anything herein to the
contrary, clause (b) above shall not apply in the case of
an employee who is a 5 percent owner (as defined in IRC
section 416 (i) (1) (B)) at any time during the 5-plan-year
period ending in the calendar year in which the employee
attains age 70 1/2. If the employee becomes a 5 percent
owner during any subsequent plan year, the required
beginning date shall be April 1 of the calendar year
following the calendar year in which such subsequent plan
year ends.
IX-1
Trustee may make payments at an earlier date than hereinabove set
forth as directed by the Plan Administrator for reasons of death,
disability, early retirement or termination of service; provided,
however, that all Participants shall be treated alike under like
circumstances.
A Participant may make an election to defer commencement of payment of
benefits beyond the latest of the dates given above, provided that the
election is made in writing, signed by the Participant and submitted to
the Plan Administrator prior to the close of the Plan Year following
which payment of benefits would otherwise commence. The election shall
describe the mode of payment of the benefit and the date on which the
payment of such benefit will commence. If payment is to be other than in
the form of a qualified joint and survivor annuity the decision of the
Plan Administrator as to the form in which the benefit shall be payable
shall be required as provided in Subparagraph 9.3(c). In no event may an
election be made which would violate the restrictions contained in
Subparagraph 9.3(c) or which would defer commencement of benefits beyond
the taxable year of the Participant in which he attains 70 1/2.
If a Participant has separated from service with a vested benefit
before the first day of the next Plan Year after attaining his 55th
birthday, he is entitled at that date to receive a benefit equal to the
benefit to which he would be entitled at the Early Retirement Date.
9.3 The Plan Administrator shall take action as may be necessary to
provide a settlement of Participant's account. All payments hereunder shall be
made in cash, securities or such other property as the Plan Administrator may
determine in its sole and absolute discretion. All modes of settlement, basic
and optional, are available to Participants or Beneficiaries under Article 5, 6
and 7 as provided herein. Payments made under Article 8 shall be in the form of
complete lump sum payments only.
(a) The basic mode of settlement for a Participant married on
the date benefits commence shall be a qualified joint and
survivor annuity contract, providing for non-increasing
payments of an actuarially equivalent value of the
Participant's vested Account Balance derived from both
Employer and Employee contributions. Benefits will be
distributed in the form of a qualified joint and survivor
annuity to a married Participant, unless both the
Participant and his spouse elect not to have his benefits
paid in that form. If the Participant is unmarried,
benefits will be provided in the form of an annuity for
IX-2
the life of the Participant, unless the Participant elects
not to receive benefits in that form.
The term "Annuity Starting Date" shall mean (a) the first day of
the first period for which an amount is payable as an annuity,
or (b) in the case of a benefit not payable in the form of an
annuity, the first day on which all events have occurred which
entitle the Participant to such benefit.
A qualified joint and survivor annuity is an annuity for the
life of the participant with a survivor annuity for the life of
his spouse which is not less than one half of, or greater than,
the amount of the annuity payable during the joint lives of the
participant and his spouse and which is the actuarial equivalent
of a single annuity for the life of the Participant.
The specific ratio of the survivor annuity to the joint life
annuity shall be 100% unless the Participant requests otherwise
in which case the ratio shall be determined by the Plan
Administrator subject to the requirement that it be qualified.
Participants with respect to which benefits shall be paid,
absent a contrary election, in the form of a qualified joint and
survivor annuity are those who:
(1) Begin to receive payments on or after the qualified Early
Retirement Date. The qualified Early Retirement Date shall
be the latest of: (A) the earliest date under the Plan for
early retirement, (B) the first day of the 120th month
beginning before the Participant reaches the Normal
Retirement Age, or (C) the date on which the Participant
begins participation; or
(2) Begin to receive payments on or after the Normal Retirement
Date.
If a Participant has not elected not to receive his benefit in
the form of a qualified joint and survivor annuity, the spouse
of such Participant if the participant dies under the
circumstances described below, shall receive a survivor annuity
for life payable at the later of Normal Retirement Date or 60
days after the date of death of the Participant. The spouse may
elect not to receive the survivor annuity, as provided below.
The amount of the survivor annuity shall be in the amount which
can be purchased by the balance in the Participant's account at
the time for commencement of payment of
IX-3
benefits but not less than the amount the spouse would have
received had the Participant commenced receiving benefits at the
later of Normal Retirement Age, or the day before his death in
the form of a qualified joint and survivor annuity which
provided a survivor annuity in an amount equal to the amount of
the annuity payable during the joint lives of the Participant
and his spouse.
In no event, however, shall the spouse survivor annuity be in an
amount greater than that which can be purchased by the balance
in the Participant's account at the time for commencement of
payment of such survivor benefit, less the proceeds of any
Contract payable to a named person (other than the Trustee) who
is not the spouse of the Participant.
The spouse survivor annuity shall be paid, absent any contrary
elections, if the Participant:
(1) Dies on or after the Normal Retirement Age while
employed by Company, or
(2) Dies before beginning to receive benefits after separating
from service on or after the Normal Retirement Age or the
qualified Early Retirement Date but after satisfaction of
eligibility requirements for the payment of benefits under
the Plan.
(b) During the election period described below the Participant, or
his surviving spouse, may elect in writing not to receive
benefits under the Plan in the basic mode of settlement, or the
survivor annuity, as the case may be. In the event that the
Participant or his spouse makes the above election any death
benefits under the Plan shall be paid as provided in Article 7
and any retirement benefits shall be paid as provided under
Subparagraph 9.3(c) below.
The Plan Administrator shall furnish the married Participant in
writing the following basic information:
A general description of the qualified joint and survivor
annuity; the circumstances in which it will be provided
unless the Participant elects not to have benefits provided
in that form; the availability of such election; a general
explanation of the relative financial effect on a
Participant's benefit of such an election; and the
availability of additional information to be furnished
within 30 days from the date of the Participant's written
request on the specific terms and conditions of the
qualified joint
IX-4
and survivor annuity and the specific financial
effect on the particular Participant of making the
above election.
The Participant must make such written request for additional
information so that it be received by the Plan Administrator
within 90 days prior to the commencement of benefits. Such basic
information may be furnished to a married Participant at any time
but even if the information has been previously provided, it
must be furnished by mailing or personal delivery so as to be
received on or about the later of 9 months before the married
Participant reaches the qualified early Retirement Date or the
date the married Participant begins participation in the Plan.
The election period shall commence on the day the above basic
information is furnished and shall end on the 60th day before the
commencement of benefits. If the married Participant requests
additional information as provided above the election shall be
extended, if necessary, to include the 90 days following the day
the requested additional information is personally delivered or
mailed to the Participant.
The Plan Administrator shall furnish the surviving spouse
eligible for a survivor annuity a written explanation of the
survivor annuity and of the amounts, forms, and recipients of
payments available pursuant to the provisions of Article 7 of the
Plan. Such information shall be furnished within 30 days after
notification of the death of the Participant. The surviving
spouse may elect to have benefits paid pursuant to the provisions
of Article 7, in lieu of receiving the survivor annuity for which
she is eligible. If such election is not made, the amount
otherwise payable under Article 7 shall instead be payable to the
surviving spouse pursuant to the provisions of this Paragraph.
The period for making this spousal election shall commence on the
day of the receipt of the above written explanation and shall end
on the 30th day thereafter. The period for making the above
election may be extended at the discretion of the Plan
Administrator. Any election made by the Participant or his
surviving spouse, as the case may be, may be revoked in writing
during the applicable election period, and after such election
has been revoked, another election may be made during the
applicable election period.
(c) If the married Participant elects not to receive payment in the
form of a qualified joint and survivor annuity or if the
Participant is not married at the time benefits
IX-5
commence, the Plan Administrator upon consultation with the
Participant shall provide a settlement from among the optional
modes of settlement provided below and in conformity with the
following requirements. All modes of settlement, both basic and
optional, shall have an equal present actuarial value at the
time of commencement of payment. No optional settlement shall be
allowed for payments due under Article 5 and 6 under which the
actuarial present value of the payments to be made to the
Participant is not more than 50% of the actuarial present value
of the total payments to be made to the Participant and his
Beneficiaries, except in the case of a distribution over the
joint life and last survivor expectancy of the Participant and
his spouse. No insurance contract distributed as provided below
may permit the time, amount, or duration of payment to be not in
conformity with the above restriction. At any time after
payments commence but before the taxable year of the Participant
following the taxable year in which he attains 70 1/2, a
Participant may request and the Plan Administrator may permit a
change in the optional mode of settlement.
The following optional modes of settlement are provided:
(1) Payment of all or (in the case of (5) below) part of the
Participant's vested accrued benefit in a lump sum.
(2) Payments over the lifetime of the Participant or the life
of the Participant and his spouse.
(3) Payments in annual, semi-annual, quarterly or monthly
installments over a period certain not extending beyond the
life expectancy of the Participant or beyond the joint life
and last survivor expectancy of the Participant and his
spouse, with such expectancy being computed by use of the
expected return multiples contained in Treasury Regulation
Section 1.72-9, or, in the case of payments by Insurer,
the period computed by use of the mortality tables
utilized under the contract.
(4) In the form of a non-transferable annuity Contract
providing payments over a period described in (2) or (3)
above in either non-increasing payments or at a rate which
satisfies the requirements contained in subparagraph 9.3(d)
below.
(5) Any combination of the above.
IX-6
(d) The timing and amount of any payment to be made (limited to the
unpaid portion of a Participant's accrued benefit) under an
optional mode of settlement shall be determined by the
Participant or by Insurer whose payments are made under a
Contract (subject to such rights as the Contract reserves to the
Participant), subject to the following minimum distribution
requirement: beginning in the later of the taxable year in which
the Participant attains age 70 1/2, or in the case of a
Participant who is not a Key-Employee in a Top-Heavy Plan the
taxable year in which he retires, the amount to be distributed
each year shall be no less than the lesser of the unpaid portion
of the participant's accrued benefit or an amount equal to the
quotations obtained by dividing the entire unpaid portion of the
Participant's accrued benefit at the beginning of such year by
the life expectancy of the Participant (or the joint life and
last survivor expectancy of the Participant and spouse (whichever
is applicable)), determined in either case as of the
Determination Date, that is the date the Participant attains age
70, or, if later, in the case of a Participant who is not a Key-
Employee in a Top-Heavy Plan as of the age (counted in whole
years) at the date the Participant retires, by use of the
expected return multiples in Treasury Regulations Section 1.72-9,
or in case of payments by Insurer or the period computed by use
of the mortality tables utilized under the Contract, reduced by 1
for each taxable year commencing after the measurement date.
However, no distribution need be made in any year, or a lessor
amount may be distributed, if beginning with the year the minimum
distribution requirement first applies, the aggregate amounts
distributed by the end of any taxable year are at least equal to
the aggregate of the minimum amounts required to have been
distributed by the end of such year.
(e) Any sums remaining payable under an optional mode of settlement
at the death of a Participant, either before or after
commencement of distributions to him, shall be paid to his
Beneficiary as follows: If the Beneficiary is the surviving
spouse, the spouse shall have available to him all methods of
distribution permitted under Article 9; if the Beneficiary is
other than a surviving spouse, unless distribution has commenced
over a period certain in accordance with Subparagraph 9. 3 (c)
(3) above, the entire balance remaining payable must be
distributed within 5 Years after the death of the Participant.
However, if distribution has commenced to the Participant under a
method of distribution which takes into account the life or life
expectancy of the Participant's spouse, the 5 year period within
which distributions must be completed will be measured from the
later of the date of death of the
IX-7
Participant or his spouse. Further provided, however, that the 5
year distribution rule shall not apply if the Participant has,
prior to January 1, 1984, made a written designation to have his
death benefits paid in an alternative method. Any written
designation, if made, shall be binding upon the Plan
Administrator notwithstanding the provision of 9.3.
(f) Actuarial equivalence shall be determined by the Plan
Administrator on the basis of consistently applied reasonable
actuarial factors. Such factors shall be the same for all
Participants retiring during the same Plan Year, but they may be
adjusted from year to year in order to remain reasonable.
(g) "Spouse" for purposes of any spouse survivor benefits payable
under this Plan shall mean "the Spouse of the Participant on the
date payment of benefits commences."
(h) Notwithstanding anything to the contrary contained herein, no
qualified joint and survivor annuity, and no qualified
pre-retirement survivor annuity will be paid, and no optional
mode of settlement will be available if the present value of such
benefit does not exceed $3,500 prior to the Annuity Starting
Date. Such value will be distributed in a lump sum immediately
upon determination of the amount due on account of retirement
(including disability retirement) or death. If the present value
of such benefit exceeds $3,500, the written consent of the
Participant and his spouse, if any, is required before the
commencement of distribution of such benefits.
9.4 A claim for benefits must be filed before payment of retirement,
disability, or death benefits will commence. A claim shall be deemed
filed when a Participant, or Beneficiary, in the case of death
benefits, or their authorized representative, requests, orally or in
writing, payment of benefits due under the Plan. The claim may be
filed with the Plan Administrator; any officer of the Company; or if
the Company has an organizational unit which customarily handles
Employee benefit matters, with any person employed in such unit. In
the event that a claim for benefits is filed, the Plan Administrator,
within 90 days after the claim is filed, shall give notice of the
decision on the claim; and if notice on the denial of a claim is not
furnished, and the claim has not been granted within the 90 day claims
Proceeding period, the claim shall be deemed denied for the purpose of
processing to the review stage as hereinafter Described.
(a) The 90 day time period mentioned above may be extended by the
Plan Administrator for an additional 90 days if
IX-8
special circumstances require an extension of time for
processing the claim. If an extension is required the Plan
Administrator shall furnish written notice of the 90 day
extension to the claimant prior to the termination of the
initial 90 day period. The extension notice shall indicate the
special circumstances requiring an extension of time and the
date by which the Plan Administrator expects to render the final
decision.
(b) The Plan Administrator shall provide to every claimant who is
denied a claim for benefits written notice setting forth:
(1) The specific reason or reasons for the denial,
(2) The specific reference to the pertinent Plan provisions on
which the denial is based,
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary, and
(4) An explanation of the Plan's claim review procedure.
(c) In the event that the claim of the Participant or Beneficiary is
denied, the claimant or his duly authorized representative may
request a review of the denied claim by means of a written
application for review delivered to the Plan Administrator.
Pursuant to this right to review, the claimant or his duly
authorized representative may review pertinent documents and
submit issues and comments in writing.
(d) Any request for review of a denied claim must be filed no later
than 60 days after the earlier of receipt by the claimant of
written notification of denial of a claim, or the expiration of
the 90 day claims processing period including any extension
thereof.
(e) In the event a request for review has been made as herein above
provided, the Plan Administrator shall make a decision on the
request for review within 60 days after the receipt by the Plan
Administrator of the request for the review, unless special
circumstances require an extension of time for processing the
review, in which case the Plan Administrator shall render a
decision as soon as possible, but in no event later than 120 days
after the Plan Administrator has received the request for review.
IX-9
If an extension is required the Plan Administrator shall furnish
written notice of the extension to the claimant prior to the
commencement of the extension. The decision on review shall be
furnished to the claimant in writing within the time for review
and shall include specific reasons for the decision, as well as
specific references to the pertinent Plan provisions on which the
decision is based.
9.5 If the Plan Administrator is unable after diligent search to locate
a Participant or Beneficiary to whom a benefit is due under the provisions of
this Plan, such benefit shall be forfeited on the last day of the Plan Year in
which such search is concluded and such forfeiture shall be administered in
accordance with Article 4. If a claim is made subsequently by such Participant
or Beneficiary for the forfeited benefit, such benefit shall be restored in
full.
IX-10
ARTICLE TEN
SPENDTHRIFT CLAUSE
10.1 The provisions of this Plan are intended as personal protection
for the Participant. A Participant shall not have any right to assign,
anticipate or hypothecate any assets held for his benefit, including amounts
credited to his account, except as security for a loan from the Plan to the
Participant. The benefits under this Plan shall not be subject to seizure, legal
process or be in any way subject to the claim of the Participant's creditors,
including, without limitation, any liability for contracts, debts, torts,
alimony or support of any relatives, except that the Plan has the right to
recover overpayments of benefits previously made to a Participant. None of the
Plan's benefits or the Trust's assets shall be considered an asset of the
Participant in the event of insolvency or bankruptcy.
10.2 Notwithstanding the provisions of this Article the Plan
Administrator and/or Trustee are hereby authorized to comply without objection
to any court order pertaining to benefits in pay status with respect to alimony,
separate maintenance, child support or division of property in the event of
divorce, provided they have received an opinion from counsel that such
compliance would not violate any federal law, jeopardize the qualification of
the trust, or render the Plan Administrator or the Trustee liable to any Plan
Participant or Beneficiary on account of such compliance.
X-1
ARTICLE ELEVEN
INSURANCE CONTRACTS
11.1 Trustee shall, within 60 days after being directed by the Plan
Administrator, by uniform procedures applicable to all Participants, and with
due regard to the preference of each Participant, purchase paid-up or annual
premium life insurance, endowment, retirement income or annuity Contracts for
the benefit of each Participant. Each Participant has the right to direct the
Plan Administrator to have the Trustee purchase Contract(s) on his life, to
specify the amount of premium on such Contract and type of Contract (subject to
the limitations of this Article and the underwriting limitations of the Insurer
selected by Trustee) or to waive any such purchase contemplated by the Plan
Administrator. Trustee shall be the complete and absolute owner of all Contracts
held in the trust and shall exercise all rights, options and privileges under or
incident to the Contracts, including the privilege to designate the Beneficiary.
Premiums shall be charged, and dividends, refunds or cash surrender values
received under a Contract shall be credited to the account of the participant
for whose benefit the Contract is held. Proceeds payable upon death shall be
paid to the Beneficiary designated, in accordance with Article 7. The aggregate
amount of the premium paid on all ordinary life insurance Contracts purchased
for the benefit of any particular participant shall, at all times, be less than
50 percent of the total Company contributions and forfeitures used to reduce
Company contributions allocated to such Participant's account, provided,
however, if such Participant so elects and voluntary contributions are made by
him, Contracts may be purchased for such Participant in excess of this
limitation, if the premiums on such Contracts will be less than 50 percent of
the total Company contributions and forfeitures used to reduce Company
contributions allocated to the Participant's account plus voluntary
contribution. The aggregate amount of the premiums paid on all term life
insurance contracts purchased for the benefit of any particular participant
shall, at all times, be less than 25 percent of the total Company contributions
and forfeitures used to reduce Company contributions allocated to such
Participant's account, provided, however, if such Participant so elects and
voluntary contributions are made by him, Contracts may be purchased for such
Participant in excess of this limitation, if the premiums on such Contracts will
be less than 25 percent of the total Company contributions and forfeitures used
to reduce Company contributions allocated to the Participant's account plus such
voluntary contribution.
XI-1
If any Company contributions to any Participant's account are applied to pay
premiums on both ordinary life insurance and term life insurance policies, the
total of the term life insurance premiums and one-half of the ordinary life
insurance premiums shall be less than 25 percent of the total Company
contributions and forfeitures used to reduce Company contributions allocated to
such Participant's account, provided, however, if such Participant so elects and
voluntary contributions are made by him, Contracts may be purchased for
Participant in excess of this limitation, if the total of the term life
insurance premiums and one-half of the ordinary life insurance premiums on such
Contracts will be less than 25 percent of the total amount of Company
contributions and forfeitures used to reduce Company contributions allocated to
the Participant's account plus such voluntary contribution. Solely for purposes
of computing the limitations contained in this paragraph, contributions made by
Company prior to the end of the Plan Year shall be deemed allocated to specific
Participant accounts.
11.2 If at any time the Trustee shall be unable to pay all or any
portion of the premiums for any reason, the Trustee shall be empowered in his
sole and absolute discretion to borrow prorate all or any portion of the
required payment from the Insurer on the security of the Contract, or to convert
the Contract into a paid-up policy, or to cash in the Contract.
11.3 Trustee shall convert the entire value of any life insurance
Contract at or before retirement into cash or an annuity to provide periodic
income, so that no portion of such value may be used to continue lifetime
insurance protection beyond retirement, or Trustee may distribute the Contract
to the Participant. If a Participant terminates employment prior to retirement
such conversion shall take place no later than one year after the date any
benefits would, if forfeitable, be forfeited pursuant to Paragraph 8.1, but if a
distribution is made to such Participant prior to that time the Trustee shall,
if directed by the Plan Administrator, distribute the Contract to the
Participant. In the event that the Participant is less than 100% vested in his
account balance at the time of distribution the Trustee shall, if so directed by
the Plan Administrator, allocate the Participant's vested interest first to the
cash value of the Contract after determining the total dollar value of his
vested interest, with any value of his vested interest in excess of the cash
value of the Contract to be allocated to the remaining portion of his account.
If after making the above allocation, the Participant's vested interest in the
contract is less than the total cash value, the Trustee shall, as directed by
the Plan Administrator, either take a loan against the Contract for the amount
of the non-vested cash value and then distribute the Contract, or sell the
Contract to the Participant for an
XI-2
amount equal to the difference between the total cash value and the
participant's vested interest therein.
In the event the Contract has no cash value, the trustee shall, when directed by
the Plan Administrator, distribute the Contract to the terminated Participant if
he so requests, whether or not such Participant is vested in all or any portion
of his account.
XI-3
ARTICLE TWELVE
RIGHT TO ALTER, AMEND OR TERMINATE TRUST
12.1 The Company shall have the right at any time to discontinue its
contributions hereunder and to terminate or partially terminate this Plan and
Trust. In the event that Company shall be legally dissolved, or declared
bankrupt, shall make a general assignment for the benefit of creditors or merge
into or with another company which shall not assume the obligations of this
Agreement, this Plan shall automatically terminate.
In the event the Plan and Trust is automatically terminated as provided in above
or in the event that subsequent to the voluntary termination of the plan by
Company any of the events causing automatic termination occur prior to the final
and complete distribution of assets from the Trust, Trustee shall automatically
be vested with all rights, powers and duties otherwise reserved in this
Agreement and Trust to Company. Plan Administrator and Named Fiduciary,
including but not limited to the right to amend this Agreement and Trust, to
liquidate the Trust, and to continue the Plan and Trust in force.
12.2 The Company reserves the right to amend this Plan and Trust in
writing at any time without the consent of any Participant or Beneficiary;
provided, however, that no amendment to this Plan or Trust shall deprive any
Participant or Beneficiary (including any Participant or Beneficiary who is
already receiving benefits) of any vested interest herein except as may be
allowed by Federal Law nor shall such amendment increase the duties or
obligation of the Trustee herein except with his consent.
12.3 This Plan may not merge or consolidate with, or transfer assets or
liabilities to, any other plan unless each Participant in the Plan would, if the
plan then terminated, receive a benefit immediately after the merger,
consolidation, or transfer which is equal to or greater than the benefit that
such Participant would have been entitled to receive immediately before the
merger, consolidation or transfer if the Plan had then terminated.
12.4 In the event of partial or complete termination of this Plan and
Trust, or upon the complete discontinuance of Company contributions under the
Plan, the Trustee shall when so directed by the Plan Administrator distribute
the assets of the fund to the Participants affected or their Beneficiaries. The
Plan Administrator may but is not required to grant each
XII-1
Participant the right to elect in an irrevocable election to receive a complete
distribution from his account. Failure to elect such a distribution shall
constitute an irrevocable election to defer distribution until the times
specified with regard to death, disability and retirement payments as provided
in this Plan or in any successor Plan, and Trustee is hereby precluded from
making distributions at any earlier time to any Participant who fails to elect
complete distribution and whose employment with Company has not terminated. Said
election shall take place during a period of time not exceeding 60 days
prescribed by the Plan Administrator and communicated to Plan Participants.
Alternatively, the Plan Administrator may direct that complete distributions be
made to all participants affected or their Beneficiaries or that all
distributions be made as set forth in the other provisions of the Plan and
Trust. Distributions shall be made in cash, unless the Plan Administrator
directs the Trustee to make distributions in securities or other property
(including Contracts on the lives of Participants). In the absence of any
direction to make distribution to all Participants and/or Beneficiaries, the
Plan and Trust will continue in force, and distributions will be made in the
same manner and under the same conditions as set forth in the Plan and Trust,
and the Plan and Trust will not terminate until all the assets of the Trust have
been distributed. It is the intent of the parties that the exempt status of the
Trust under Section 501 of the Internal Revenue Code of 1986, as amended, will
continue.
12.5 Upon the date of termination of the Plan, partial termination of
the Plan, or complete discontinuance of contributions, the rights of each
affected Participant to the amount credited to his account at such time shall be
fully vested, except as provided in Article 16. If any funds (other than Company
contributions or forfeitures not required to be allocated to meet the
liabilities of this Plan) have not been allocated prior to date of termination,
partial termination, or complete discontinuance of contributions, such funds
shall be allocated on the earlier of the date of liquidation or the Trust on the
next regular allocation date pursuant to Paragraph 4.5, and subject to the
limitations provided in Paragraph 4.3. Any investment earnings and realized or
unrealized gains and losses subsequent to such allocation date shall likewise be
allocated pursuant to Paragraphs 4.5 and 4.3, at least annually and, in any
event, as of the date of final and complete distribution.
XII-2
ARTICLE THIRTEEN
LOANS
13.1 Trustee, upon application from any Participant, in accordance with
a uniform nondiscriminatory policy, may make a loan or loans to such
Participant.
13.2 Loans will be limited to the lesser of:
(i) 1/2 of the present value of the Participant's
nonforfeitable account balance (except that loans of up to $10,000 may
be made to participants if these loans are adequately secured and are
not in excess of the present value of the Participant's total accrued
benefit);
(ii) $50,000 reduced by the maximum outstanding loan
balance (if any) during the 12 month period ending on the day before the
loan is taken.
13.3 Loans must be made available to all Participants on a reasonably
equitable basis and the availability shall be communicated to all Participants.
Loans shall not be made available to Highly Compensated Employees in an amount
greater than that made available to other Employees.
13.4 A reasonable rate of interest shall be charged on each loan. What
is reasonable depends on factors such as the amount of loan, adequacy of
security, duration of loan, repayment schedule, current market conditions,
variable or fixed rate of interest, what is customary in similar arm's length
transactions in the community; ie, average rate charged by area commercial banks
for the same type of consumer loan, and other economic and time factors.
13.5 All loan agreements shall provide for repayment within five (5)
years from the date of the loan, unless the loan is used to acquire the
Participant's primary residence.
13.6 All plans of all related businesses are to be combined for the
purposes of maximum limits on loans.
13.7 All loans must be evidenced by a written loan agreement signed by
all relevant parties to the loan and evidenced by a promissory note of the
borrower where the borrower personally guarantees the repayment of the loan and
secures the loan on the Participant's account balance.
13.8 A Participant's spouse must consent in writing for a Participant
to use any part of his account balance as security
XIII-1
for the loan. Spousal consent shall be obtained no earlier than the beginning of
the 90 day period ending on the date the loan is made. The consent must
acknowledge the effect of the loan and must be witnessed by a plan
representative or notary public. The consent is binding with respect to the loan
for which it is given, on any subsequent spouse. A new consent shall be required
if the loan is revised, renegotiated, renewed or extended.
13.9 Loans may not be made to Owner-Employees or Shareholder-Employees
as defined in Code Section 1379.
13.10 The loan document must provide for payments to be made at least
quarterly in a level amount, which will fully amortize the loan over its
duration.
13.11 The Plan Administrator may provide for loans to be considered an
asset of the Trust Fund or as an investment of the borrower's account. The Plan
Administrator shall act consistently in making this determination.
13.12 A loan will not be foreclosed and security attached before a
distributable event occurs under the Plan. Any loan outstanding at the time a
Participant receives a distribution, shall be repaid by offsetting the balance
due (plus accrued interest and any costs) against the amount to be distributed.
13.13 If a valid spousal consent has been obtained in accordance with
Section 13.8, and the Participant's spouse does not receive the Participant's
entire vested benefits, then the vested benefits shall be reduced by the balance
due before determining the benefit payable to the Participant's surviving
spouse.
XIII-2
ARTICLE FOURTEEN
TRUSTEE
14.1 The duties and responsibilities of the Trustee are limited to
those set forth in this Plan and Trust, and it shall be liable only for the
safeguarding and administration of the Trust principal in accordance with the
provisions of this Plan and Trust, except as otherwise provided by state or
federal law. If at any time there is more than 1 Trustee, all of them will
jointly manage and control the fund unless the responsibilities, obligations and
duties specified in this Plan are allocated among them in accordance with the
procedure set forth below. The Trustee shall discharge its duties with respect
to the Plan solely in the interest of the Participants and the Beneficiaries and
for the exclusive purpose of providing benefits to the Participants and their
Beneficiaries and defraying reasonable expenses of the Plan by administering the
Plan with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims.
14.2 The Trustee shall maintain full and complete records of the
administration of the Trust and shall be responsible for the management of the
Trust operation and its administration.
The Company and Plan Administrator may examine such records from time to time
during business hours. A Participant may also examine such records, as they
relate to his interest in the Trust principal, at such time deemed reasonable by
the Trustee.
14.3 Within a reasonable time after each Plan Year, and within 90 days
after its removal or resignation, Trustee shall file with the Company an account
of its administration of the Trust during such year or from the end of the
preceding Plan Year to the date of removal or resignation. Neither Company nor
any other person shall be entitled to any further accounting by Trustee, except
as provided by law.
14.4 To the extent permitted by the Employee Retirement Income Security
Act of 1974, Trustee shall be released from all liability to anyone as to any
transaction shown in an account stated under Section 14.3 except those as to
which the Company shall, within 90 days after the Trustee's filing of the
account, file with Trustee a written statement setting forth in detail the items
in or with respect to such account to which exception is taken. If such a
statement is filed, Trustee shall, unless the
XIV-1
matter be compromised with the Company, file its account in any court of
competent jurisdiction for audit and adjudication.
14.5 Upon separate agreement between Trustee and Company, the fund may
be valued more frequently than annually for purposes of determining benefits or
costs under the Plan. If such agreement is made, the provisions of Section 14.4
shall also apply with respect to each such valuation.
14.6 The Trustee shall act at the direction of the Company and the Plan
Administrator, and Company agrees to indemnify Trustee against any liability
imposed as a result of a claim asserted by any person or persons where Trustee
acted in good faith at direction of Company or the Plan Administrator. The
Trustee is authorized on behalf of the Trust to execute the applications and any
other documents required by an Insurer issuing Contracts on the lives of the
Participants, and to exercise all of the rights, privileges and powers under
such Contracts. Written notification to an Insurer setting forth the name of the
Trustee hereunder shall be conclusive evidence for all purposes that the party
so named is Trustee hereunder at the date of such notification. The signature of
the Trustee shall be conclusive proof to the Insurer that the application is
being made for the proper Contract and is in accordance with the terms of this
Plan and Trust.
14.7 The Trustee may consult with any legal counsel even through
counsel for Company with respect to the construction of the Plan and Trust
either as to its duties thereunder or with respect to any legal proceedings or
questions of law, and will be fully protected with respect to any action taken
or omitted by it in good faith pursuant to the advice of such counsel. In
addition, the Company at the request of or with the concurrence of the Trustee
may employ such actuaries, accountants, specialists and other persons as the
Company or Trustee deems necessary or desirable in connection with the
administration of the Plan.
14.8 A Trustee shall not be liable, either individually or as Trustee,
for any losses resulting to the Plan arising from the acts or omissions on the
part of a Co-Trustee or Investment Manager to whom responsibilities, obligations
and duties have been allocated as to certain assets of the Fund. Any such
allocation of responsibilities among Trustees and/or the appointment of an
Investment Manager shall be made by the Named Fiduciary and evidenced by a
writing executed by all of the Trustees, the Named Fiduciary and the Investment
Manager, if any. Except as stated in the foregoing, in addition to any liability
which the Trustee may have under any other section of this Plan, the Trustee
with respect to the Plan shall be liable for breach of fiduciary duty of another
Trustee (1) if such Trustee
XIV-2
participates knowingly in, or knowingly undertakes to conceal, an act or
omission of such other Trustee, including knowing such act or omission is a
breach; (2) if, by such Trustee's failure to comply with the standards in
performing its duties as set forth in Paragraph 14.1 hereof, in the
administration of such Trustee's specific responsibilities which give rise to
its status as a Trustee it has enabled such other Trustee to commit a breach;
(3) if such Trustee has knowledge of a breach by such other Trustee unless such
Trustee makes reasonable efforts under the circumstances to remedy the breach.
14.9 Trustee shall invest and reinvest the principal and income of the
trust and keep the same invested without distinction between the principal and
income.
14.10 Trustee shall have the following powers in addition to the powers
customarily vested in the Trustee by law and in no way in derogation thereof:
(a) With any cash at any time held by it, to purchase or subscribe
for any authorized investment, and to retain such authorized
investment in trust.
(b) To sell for cash or on credit, convert, redeem or exchange for
another authorized investment, or otherwise dispose of, any
authorized investment at any time held by it.
(c) To maintain a cash reserve in such a manner as the Trustee
shall deem advisable from time to time. Such cash reserve
may consist of uninvested contributions or of the proceeds
of the sale of the investments of the Trust, as the
Trustee in its sole discretion may determine. Such cash
reserve may be in a deposit account or invested in the
savings department of the Trustee if any, or as Trustee
may direct, in a bank, savings and loan association,
building and loan association, or savings bank, including
time deposits or certificates of deposit with maturities
of less than or more than one year.
(d) To exercise any options appurtenant to any authorized investment
in which the fund is invested for conversion thereof into another
authorized investment, or to exercise any rights to subscribe for
additional authorized investment, and to make all necessary
payment therefore.
(e) To join in, consent to, dissent from, oppose or deposit in
connection with the reorganization, consolidation,
recapitalization, sale, merger, foreclosure, or readjustment of
the finances of any corporations or properties in which the fund
may be invested, or the sale, mortgage, pledge or lease on any
such terms and conditions
XIV-3
as it may deem wise; to do any act (including the exercise of
options, making agreements or subscriptions, and payment of
expenses, assessments or subscriptions) which may be deemed
necessary or advisable in connection therewith; and to accept
any authorized investment which may be issued in or as a result
of any proceeding, and thereafter to hold the same.
(f) To vote, in person or by general or limited proxy, at any
election of any corporation in which the fund is invested, and
similarly to exercise personally or by a general or limited
power of attorney, any right appurtenant to any authorized
investment held in the fund.
(g) To sell, option to sell, mortgage, lease for a term of
years less than or continuing beyond the possible date of
the termination of the trust created hereunder, partition
or exchange any real property which may from time to time
or at any time constitute a portion of the fund either at
public or private sale, for such prices and upon such
terms as it may deem best and to make, execute and deliver
to the purchasers thereof good and sufficient deeds of
conveyance thereof and all assignments, transfers and
other legal instruments, either necessary or convenient
for passing the title and ownership thereof to the
purchaser, free and discharge of all trusts and without
liability on the part of such purchasers to see to the
proper application of the purchase price.
(h) To repair, alter, or improve any buildings which may be on real
estate forming part of the fund, or to erect entirely new
structures thereon.
(i) To renew or extend or participate in the renewal or
extension of any mortgage, upon such terms as may be
deemed advisable, and to agree to a reduction in the rate
of interest on any mortgage or to any other modification
or change in the terms of any mortgage or of any guarantee
pertaining thereto, in any manner and to any extent that
may be deemed advisable for the protection of the fund or
the preservation of the value of the investment; to waive
any default, whether in the performance of any covenant or
condition of any mortgage or in the performance of any
guarantee, or to enforce any such default in such manner
and to such extent as may be deemed advisable; to exercise
and enforce any and all rights or foreclosure, to bid in
property on foreclosure, to take a deed in lieu of
foreclosure with or without paying a consideration
therefore, and in connection therewith to release the
obligation on the bond secured by such mortgage; and to
exercise and enforce in any action, suit or proceeding at
XIV-4
law or in equity any right or remedies in respect to any
mortgage or guarantee.
(j) To purchase authorized investments at a premium or discount.
(k) To employ suitable agents and counsel with respect to investment
transactions and to pay their reasonable expenses and
compensation.
(l) To borrow or raise monies for the purpose of the Trust, in such
amounts and upon such terms and conditions as Trustee in its
absolute discretion may deem advisable, and for any sum so
borrowed to issue its promissory note as Trustee, and to secure
the repayments thereof by pledging or mortgaging all or any part
of the fund, provided that loans and repayments shall be made
prorata on all property and the Contracts of the same class or
type. No person lending money to Trustee shall be bound to see to
the application of the money lent or to inquire into the
validity, expediency or propriety of such borrowing.
(m) To cause any investment in the fund to be registered in,
or transferred into, its name as Trustee or the name of
its nominee or nominees or to retain them unregistered or
in form permitting transfer by delivery, if authorized by
the Company, but the books and records of Trustee shall at
all times show that all such investments are part of the
fund, and Trustee shall be fully responsible for any
misappropriation or defalcation in respect to any
investment held by its nominee or held in unregistered
form.
(n) To do all acts which it may deem necessary or proper and to
exercise any and all powers appurtenant to Trustee under this
Plan and Trust, upon terms and conditions as to it may seem best
for the best interest of the fund, except as otherwise provided
by state or federal law.
(o) To purchase securities on margins and to rehypothecate same.
(p) To purchase life insurance on the lives of the directors,
principal officers, or other key personnel of the Company made
payable to the Trust for the benefit of the fund.
14.11 "Authorized investment" as used herein shall include stock
(whether preferred or common), bank common trust funds (including those of the
Trustee, if any), bonds, debentures, notes or other evidences of indebtedness or
ownership (secured by mortgages including second mortgages or otherwise), put or
call
XIV-5
options to buy or sell securities (whether listed or unlisted on any exchange
and whether covered or uncovered), any life insurance, retirement income,
endowment or annuity contract in a legal reserve life insurance company
authorized to do business in the state of domicile of the Trustee; and real and
personal property of all kinds, including leaseholds on improved and unimproved
real estate. Authorized investments shall not be limited to that class of
investments which is specifically authorized as a legal investment for trust
funds under the law of the state of domicile of the Trustee, but no investment
shall constitute an Authorized investment if such investment is prohibited by
governing local or federal law.
14.12 The Trustee shall not cause the Plan to engage in any transaction
if it knows that such transaction constitutes directly or indirectly a
prohibited transaction as described in Section 406 and 407 of the Employee
Retirement Income Security Act of 1974 and Section 4975 of the Internal Revenue
Code, or any amendments thereto, unless such transaction is excluded or exempted
from the provisions of Section 406 and 407 or Code Section 4975, by Section 407
and 408, or Code Section 4975, any exemption issued thereunder, or any
amendments thereto.
14.13 The initial Trustee heretofore designated in this Agreement and
Trust shall serve until his respective resignation, death, incapacity or
removal. Whenever a vacancy shall exist among the Trustees, the Company shall if
no Trustee remains or may if at least 1 Trustee remains name a successor Trustee
who may be an officer or director of the Company or who may be an Employee, or
who may be a person not employed by the Company. Whenever a successor Trustee
shall be appointed, he shall immediately and automatically succeed to and become
vested with the title to any trust assets theretofore vested in the Trustee that
such successor Trustee is replacing and the title of such former Trustee shall
automatically and immediately be extinguished. A successor Trustee shall
likewise serve until his resignation, death, incapacity or removal. The Company
shall always have the right to remove a Trustee for cause or without cause at
any time. Any Trustee may resign at any time by giving the Company 10 days
written notice in advance of such resignation.
14.14 The Company shall pay all expenses of administering the Plan and
Trust, which expenses shall include, but not be limited to, expenses incident to
the functioning of those to whom the Company has delegated certain duties such
as the payment of professional fees and consultants fees, and the costs of
administering the Plan. Notwithstanding the above, if any expenses of
administering the Plan and trust are not paid by Company, they may be paid from
the Trust, at the direction of the Company.
XIV-6
14.15 The Trustee may be paid such reasonable compensation as shall
from time to time be agreed upon by the Company and the Trustee, except that no
Trustee who is a fulltime paid Employee of Company may be compensated for his
services as Trustee. In addition, the Trustee shall be reimbursed for any
reasonable direct expenses, including reasonable counsel fees (if specifically
authorized in advance in writing by Company), properly and actually incurred by
it in the administration of the Trust and not otherwise reimbursed. All taxes of
any and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust or the income thereof shall be
paid from the Trust.
14.16 The Company shall establish an investment policy to provide for
the benefits provided under this Plan. In accordance with the foregoing, the
Company shall determine whether the Plan has a short term need for liquidity, or
whether liquidity is a long term goal, or whatever other investment policy
should be followed, and communicate this to the Trustees or investment
manager(s), so that the investment policy can be appropriately coordinated with
Plan needs.
14.17 The Named Fiduciary shall be responsible for and have the
authority to control and manage the operation and administration of this Plan
and Trust, although fiduciary and other responsibilities may be allocated to
other parties by the Named Fiduciary by written notification to such parties of
their responsibilities, and written acceptance by such parties of such
responsibilities. Trustee responsibilities may be allocated only among Trustees
or to an investment manager. An investment manager is any fiduciary, other than
the Trustee or Named Fiduciary, who: (a) has the power to manage, acquire or
dispose of any portion of the Fund; (b) is registered as an investment adviser
under the Investment Advisers Act of 1940 or is a bank as defined in that Act or
an insurance company qualified to perform the services described in subsection
(a) hereof; and (c) has acknowledged in writing that he is a fiduciary with
respect to the Plan.
14.18 Whenever the Trust has an investment in a common trust fund
available only to Trusts qualified under Section 401(a) of the Internal Revenue
Code of 1986 as amended, or the corresponding provisions of subsequent law of
similar purpose, all of the provisions of the particular common trust fund
declarations of trust, as amended from time to time, shall be deemed to be
incorporated herein and be a part hereof.
14.19 If at any time there is more than 1 Trustee hereunder, The
Trustees need not call or hold meetings to make any decision or to take any
action, but any decision may be made
XIV-7
and any action may be taken by written documents signed by the Trustees then
acting, or, if there are more than 2 Trustees, then by a majority of the
Trustees then acting. However, any one Trustee, acting alone, will have the
authority to sign checks, drafts, notes, insurance applications or any other
documents on behalf of the Trustees and to perform purely ministerial acts. If
at any time there is more than 1 Trustee hereunder, and if any difference of
opinion at any time exists between or among the Trustees in respect of doing or
omitting to do any act in the execution of the Trust, the opinion of the
majority of the Trustees will prevail.
14.20 A Trustee may be a Participant, but if any matter pertaining to
his own particular Participation comes up for the action of the Trustee, such
person will be disqualified to act upon the particular matter (unless he is the
sole Trustee) and such matter will be resolved by the other Trustee(s).
XIV-8
ARTICLE FIFTEEN
INSURER
15.1 No Insurer issuing any Contract hereunder shall be deemed a party
to this Plan and Trust or to be responsible for its validity. The obligations
and responsibilities of an Insurer shall be measured and determined solely by
the terms of its Contract and it shall not be required to do any act not
provided for, or contrary to the provisions of its Contract.
15.2 An Insurer shall not be required to look into the terms of the
Plan and Trust or question any action of the Trustee nor shall it be responsible
to see that any action of the Trustee is authorized.
15.3 An Insurer may conclusively assume that the Trustee has full
authority, and is acting within that authority, in any transaction concerning
the Contracts, and shall be fully discharged from any and all liabilities for
any action taken in accordance with the direction of the Trustee. In accepting
application for Contracts, an Insurer has no responsibility for determining
whether the Employee is eligible or whether the proper Contract is being applied
for. In all transactions with the Trustee, an Insurer shall deal with it as
though it were the sole and absolute owner of the Contracts. one Trustee's
signature is sufficient in all matters regarding insurance transactions.
15.4 An Insurer shall be fully protected from any liability for any
action taken prior to receiving notice of any amendment or termination of this
Agreement and Trust, or for dealing with any prior Trustee prior to receiving
notice of appointment of a successor Trustee.
XV-1
ARTICLE SIXTEEN
NO REVERSION TO COMPANY
16.1 No part of the principal or income or other assets of the Trust
shall be used for or diverted to purposes other than for the exclusive benefit
of the Participants or their Beneficiaries and the Company shall not be entitled
to receive back any part of its contribution to the Trust, except as provided in
the remaining Paragraphs of this Article.
16.2 Company contributions are conditioned on initial qualification of
the Plan under Internal Revenue Code Section 401 and if the Plan does not
qualify such contribution shall be returned to Company within 1 year after the
date of denial of initial qualification of the Plan.
16.3 Company contributions are conditioned on the deductibility of the
contribution under Internal Revenue Code Section 404 and to the extent any
deduction is disallowed, such contribution shall be returned to Company within 1
year after the date of disallowance of the deduction.
16.4 In the case of a Company contribution made by reason of a mistake
of fact, such contribution shall be returned to Company within 1 year after the
payment of the contribution. Mistakes of fact shall include but not be limited
to arithmetical errors in calculating the amounts to be contributed to the Plan
under the contribution and allocation sections of the Plan.
16.5 The Company reserves the right to recover at the termination of
this Agreement and Trust any balance remaining in the Trust due to erroneous
actuarial computations after the satisfaction of all liabilities with respect to
the Participants and their Beneficiaries under this Plan and Trust. A balance
due to erroneous actuarial computations is the surplus arising because actual
liabilities differ from expected liabilities. Any funds held in a suspense
account required to prevent violations of the limitations on annual additions
and benefits established by Internal Revenue Code Section 415 and which are not
required to be allocated at time of termination to satisfy the liabilities of
the Plan shall be considered a balance due to erroneous actuarial computations.
16.6 The amount which shall be returned to Company as provided in
Paragraph 16.3 and 16.4 is the excess of (1) the amount contributed over (2) the
amount that would have been contributed had there not occurred a mistake of fact
or a mistake in determining the amount of the deduction. Earnings
XVI-1
attributable to the excess contribution shall not be returned to Company, but
losses attributable thereto shall reduce the amount to be so returned.
Furthermore, no excess contribution shall be returned to Company to the extent
that such reversion would cause the balance of the account, derived from Company
contributions, of any Participant to be reduced to less than the balance which
would have been in the account had the mistaken amount not been contributed.
XVI-2
ARTICLE SEVENTEEN
DIRECT TRANSFERS AND ROLLOVER
17.1 If a Participant shall be entitled to receive benefits under this
Plan pursuant to Article 5, 6 and 7 or 8 above, the Trustee, at the direction of
the Plan Administrator, may transfer the Participant's vested benefits under
this Plan directly to the Trustee of a Plan and Trust qualified pursuant to
Section 401 of the Internal Revenue Code of 1986 or any successor provisions
thereof, of the Participant's current or new employer if the following
conditions are satisfied:
(a) the Trustee of the other plan shall be authorized to accept the
benefits under this Plan; and
(b) the value of the Participant's transferred assets shall be
separately accounted for in the other Trust; and
(c) the Participant's transferred assets shall not be forfeitable or
reduce in any way the obligation of the employer receiving
benefits from this Plan.
The Trustee of this Plan is authorized to accept, at the direction of the Plan
Administrator, assets for the benefit of an Employee upon the conditions as set
forth above from a trustee of another plan and trust maintained by either a
corporate or non-corporate Plan sponsor qualified pursuant to Section 401 of the
Internal Revenue Code of 1986 or any successor provisions thereof.
17.2 With the permission of the Plan Administrator any Employee who is
a member of a class of Employees eligible to participate may make a Rollover
Contribution to the Trustee at any time. The Trustee shall credit the fair
market value of any Rollover Contribution to the account of the contributing
Employee as of the date of the Rollover Contribution is made. For purposes of
the Plan's vesting provisions a Rollover Contribution shall be considered to be
an Employee Contribution and shall be 100% vested on the date of contribution.
The term "Rollover Contribution" is defined as the contribution of a Qualifying
Rollover Distribution on or before the 60th day immediately following the day
the contributing Employee receives the Qualifying Rollover Distribution.
The term "Qualifying Rollover Distribution" is defined as:
XVII-1
(a) Any portion of the property received from a qualified plan and
trust, provided that the balance to the credit of an Employee
reduced by any Employee contributions has been paid to him in
one or more distributions
(1) within one taxable year of the Employee on account of the
termination of a qualified plan or, in the case of a
profit-sharing or stock bonus plan, a complete
discontinuance of contributions under such plan; or
(2) which constitute a lump sum distribution within the
meaning of Section 402 (e) (4) (A) [determined without
reference to Section 402 (e) (4) (B) and (H) ] of the
Internal Revenue Code of 1986.
In the case of a distribution of property other than money from
a qualified plan and trust, except for the proceeds from the
sale of such property (including appreciation from date of
distribution) other property (including money) may not be
substituted in making a Rollover Contribution; or
(b) The entire amount (including money and any other property)
in an Individual Retirement Account, Individual Retirement
Annuity, or Individual Retirement Bond (as defined in
Sections 408 and 409 of the Internal Revenue Code of 1986)
maintained for the benefit of the Employee making the
Rollover Contribution, which amount has been distributed
from such Individual Retirement Account, Individual
Retirement Annuity or Individual Retirement Bond. Such
amount will constitute a Qualifying Rollover Distribution
only if the amount in such Individual Retirement Account,
Individual Retirement Annuity, or Individual Retirement
Bond is solely attributable to a Rollover Contribution
made by the Employee from his interest as a Participant in
a trust described in Section 401(a) of the Internal
Revenue Code of 1986 or an annuity plan described in
Section 403(a) of the Internal Revenue Code of 1986 plus
the earnings thereon; but
(c) In no case does a Qualifying Rollover Distribution include any
amount which is attributable to a distribution from a trust or
annuity plan if the Employee who received the distribution was
an Employee within the meaning of Section 401(c) (1) of the
Internal Revenue Code of 1986 at the time contributions to such
trust or annuity plan were made on his behalf.
17.3 No assets transferred to this Plan in accordance with the
provisions of this Article shall be considered Employee contributions for
purposes of Subparagraph 2.1(d) and Paragraph 4.2.
XVII-2
17.4 Distribution of said assets shall follow the general provisions of
the Plan for distribution of the Participant's account derived from employer
contributions.
17.5 The specific assets transferred to the Plan shall be general
assets of the trust, subject to the general investment powers of the Trustees
(or the Participants, if such powers have been granted them).
17.6 For purposes of valuing gains and losses in the account(s)
maintained for transferred assets, the provisions of Paragraph 4.5 shall apply.
Premiums on any insurance policies transferred to the Plan may be paid from the
account established for employer contributions, subject to the limits of
Paragraph 11.1. In the event of said premium payments, an equitable share of
increases in Cash Value from the date of transfer shall be allocated to the
account established for employer contributions. Said equitable share shall be
equal to the difference between the actual Cash Value of the policy and the Cash
Value the policy would have had if it had been placed in reduced paid-up status.
XVII-3
ARTICLE EIGHTEEN
DETERMINATION OF TOP-HEAVY STATUS
18.1 In determining whether or not this Plan is Top-Heavy or Super
Top-Heavy for any Plan Year, the following calculations shall be made:
(a) In the case of a defined benefit plan, a Participant's
present value of accrued benefit shall be determined as of
the most recent valuation date used for computing plan
costs which is within a 12 month period ending on the
Determination Date, as if the individual terminated
service as of such valuation date. In the first year of a
Plan, however, the accrued benefit shall be determined as
if the individual terminated service as of the
Determination Date. The assumptions used for the
calculation shall be the interest and post-retirement
mortality assumptions used in determining Actuarial
Equivalence. The benefit valued is that payable at Normal
Retirement Date (or attained age, if later). Employee
contribution accounts shall be included in determining the
value of benefits.
(b) In the case of a defined contribution plan, a Participant's
account balance (including accounts for Employee contributions)
as of the Determination Date is the sum of:
(1) his account balance as of the most recent valuation
occurring within a 12 month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date.
In the case of a plan not subject to the minimum funding
requirements of Internal Revenue Code Section 412 such
adjustment shall be the amount of any contributions
actually made after the valuation date but before the
Determination Date, except for the first Plan year when
such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year. In the
case of a plan that is subject to the minimum funding
requirements, the account balance shall also be adjusted
to include contributions allocated as of a date not later
than
XVIII-1
the Determination Date, even though those amounts are
not yet required to be contributed.
Also, the adjustment shall reflect the amount of any
contribution actually made (or due to be made) after the
valuation date but before the expiration of the extended
payment period in Internal Revenue Code Section 412 (c) 10);
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the 4 preceding
Plan Years. However, in the case of distributions made after
the valuation date and prior to the Determination Date, such
distributions are not included as distributions for
Top-Heavy purposes to the extent that such distributions are
already included in the Participant's present value of
accrued benefit or account balance as of the valuation date;
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered to
be a part of the Participant's account balance;
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides for
rollovers or plan-to-plan transfers, it shall always
consider such rollover or plan-to-plan transfer made to
another plan as a distribution for the purposes of this
Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such
rollovers or plan-to-plan transfers accepted after December
31, 1983 as part of the Participant's account balance.
However, rollovers or plan-to-plan transfers accepted prior
to January 1, 1984 shall be considered as part of the
Participant's account balance; with respect to related
rollovers and plan-to-plan transfers (ones either not
initiated by the Employee or made to a plan maintained by
the same employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is
the plan accepting such rollover or plan-to-plan transfer,
it shall consider such rollover or plan-to-plan transfer as
part of the Participant's present value of accrued benefits
or account balance,
XVIII-2
irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
In determining whether or not rollovers or plan-to-plan
transfers are made to the same or another Employer, all
Employers aggregated under Internal Revenue Code Sections
414(b), (c) or (m) are treated as the same Employer.
In calculating the accrued benefits or account balances of
Participants there shall not be considered any benefit or
account balances of any Participant who is not a Key-Employee
but who in any prior year was a Key-Employee.
(c) In the case of both a defined benefit plan and a defined
contribution plan, a Participant's accrued benefit or account
balance shall be increased by:
(1) any plan distributions made within the Plan Year that
includes the Determination Date, or within the four
preceding Plan Years. The preceding sentence shall also
apply to distributions under a terminated plan which, if it
had not been terminated, would have been required to be
included in an aggregation group. However, in the case of
distributions made after the valuation date and prior to
the Determination Date, such distributions are not included
as distributions for Top-Heavy purposes, to the extent that
such distributions are already included in the
Participant's present value of accrued benefit or account
balance as of the valuation date;
(2) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified
deductible employee contributions shall not be considered
to be a part of the Participant's account balance;
(3) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee
and made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides for
rollovers or plan-to-plan transfers, it shall always
consider such rollover or plan-to-plan transfer made to
another plan as a distribution for the purposes of this
Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such
rollover or plan-to-plan transfer accepted after December
31, 1983 as part of the Participant's account balance.
However, any rollover or plan-to-plan transfer accepted
prior to January 1, 1984 shall
XVIII-3
be considered as part of the Participant's account
balance;
(4) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or
made to a plan maintained by the same employer), if this
Plan provides the rollover or plan-to-plan transfer, it
shall not be counted as a distribution for purposes of
this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's present value of accrued benefits or account
balance, irrespective of the date on which such rollover
or plan-to-plan transfer is accepted.
In determining whether or not rollovers or plan-to-plan
transfers are made to the same or another Employer, all
Employers aggregated under Internal Revenue Code Sections 414
(b), (c) or (m) are treated as the same Employer.
(d) In calculating the accrued benefits or account balances of
Participants, there shall not be considered any benefit or
account balances of any Participant who is not a Key-Employee
but who in any prior year was a Key-Employee.
(e) For Plan Years commencing after December 31, 1984, in
calculating the accrued benefits or account balances of
Participants, there shall not be considered any benefit or
account balance of any individual who has not performed any
service for the Company (other than benefits under the Plan) at
any time during the five year period ending on the
Determination Date.
18.2 If Company maintains more than one plan, the plans shall
constitute an Aggregation Group provided the following conditions are satisfied:
(a) Each plan of Company in which a Key Employee is a Participant,
including any terminated plan and each other plan of Company
which enables any plan in which a Key-Employee participates to
meet the requirements of Internal Revenue Code Sections 401 (a)
(4) or 410, will be required to be aggregated. Such group shall
be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a
XVIII-4
Top-Heavy Plan if the Aggregation Group is not a Top-
Heavy Group.
(b) Company may by execution of a written resolution provide
for the creation of a Permissive Aggregation Group to
consist of the Required Aggregation Group and any other
plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as
a whole, would continue to satisfy the provisions of
Internal Revenue Code Sections 401(a) (4) or 410. If the
Permissive Aggregation Group is not Top-Heavy no plans in
the Group will be considered Top-Heavy.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top-Heavy Plan if the Permissive Aggregation
Group is a Top-Heavy Group.
(c) Only those plans of the Employer in which the Determination
Dates fall within the same calendar year shall be aggregated
in order to determine whether such plans are Top-Heavy Plans.
(d) A Top-Heavy Group is an Aggregation Group in which, as of the
Determination Date, the sum of the present value of accrued
benefits of Key Employees under all defined benefit plans
included in the group, and the account balances of
Key-Employees under all defined contribution plans included in
the group, exceed 60 percent of a similar sum determined for
all Participants.
18.3 In determining whether or not an Employee is a Key-Employee, the
following shall apply:
(a) An officer shall be an administrative executive in regular
and continued service. If the number of Employees of all
the employers aggregated under Internal Revenue Code
Sections 414(b), (c) or (m) is less than 30 employees for
a particular year, no more than 3 individuals shall be
treated as Key-Employees for that year by reason of being
officers. If the number of Employees of all organizations
aggregated under Internal Revenue Code Sections 414(b), (c) or
(m) is greater than 30 but less than 500 for a particular
year, no more than 10 percent of the number of Employees will
be treated as Key-Employees for that year by reason of being
officers. If the number of Employees of employers aggregated
under Internal Revenue Code Sections 414(b), (c) and (m)
exceed 500 for a particular year, no more than 50 Employees
are considered as Key Employees for that year by reason of
being officers. This limited number of officers is comprised
of the individual
XVIII-5
officers, selected from the group of all individuals who were
officers in the current Plan Year or any one of the four
preceding Plan Years, who had the largest annual compensation
in that five-year period.
(b) An individual who is a "one percent owner" shall be considered
as having compensation of more than $150,000 based on the
definition of compensation contained in Article 4 herein used
for purposes of computing limits on maximum contributions or
benefits, but contributions more on behalf of a Self Employed
Individual shall be excluded from the definition of
compensation.
18.4 In any Top-Heavy Plan Year, a Participant shall have a
nonforfeitable right to a percentage of his accrued benefit derived from Company
contributions determined as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
Notwithstanding the above, the vesting schedule contained in this Paragraph
shall not apply in any Top-Heavy Plan Year if the vesting schedule contained
elsewhere herein provides for equal or more rapid vesting at every year shown on
the schedule, nor shall it apply if the Plan otherwise provides for 100 percent
vesting after 3 or fewer Years of Service.
18.5 The vesting schedule applicable to any Top-Heavy Plan Year shall
not apply to any Employee who does not have an hour of service after the Plan
becomes Top-Heavy. His vested interest shall be determined under the vesting
provision of the Plan as in effect on the date of his last hour of service.
18.6 In any Top-Heavy Plan Year an eligible Participant who is a
Non-Key Employee shall receive no less than either a minimum contribution to a
defined contribution plan equal to the lesser of 3% of compensation or the
largest percentage of compensation provided on behalf of any Key-Employee or a
minimum accrual in a defined benefit plan equal in value to an accrued benefit
at any point in time of 2% of his Average Annual Compensation for the five
consecutive years in which his compensation was highest times his Years of
Service for benefit accrual beginning on or after January 1, 1984 and during
which the Plan was Top-Heavy up to a maximum of 20%, payable at Normal
Retirement Date in the form of a straight life annuity. If a
XVIII-6
Non-Key Employee is a Participant in both a defined benefit plan and a defined
contribution plan which are Top-Heavy the Participant shall receive no less than
either a defined contribution minimum equal to 5% of compensation or the defined
benefit minimum accrual described above (but not including a 2% accrual and
reducing the 20% maximum by 2% for each Top-Heavy Plan Year during the first 10
Top-Heavy Plan Years in which the minimum 5% contribution is made on his behalf
to a defined contribution plan). Compensation for purposes of the defined
benefit minimum benefit shall not include compensation after the last Plan Year
in which the Plan is Top-Heavy and shall be compensation as defined in Article 4
for purposes or computing limits on maximum contributions or benefits.
For any Top Heavy Plan Year, the minimum allocations set forth above shall be
allocated to the Participant's Account of all Non-Key Employees who are
Participants and who are employed by the Employer on the last day of the Plan
Year, including Non-Key Employees who have (1) failed to complete a Year of
Service; (2) declined to make mandatory contributions (if required) to the Plan;
and (3) been excluded from participation because of their level of Compensation.
18.7 In the case of a Participant in a defined benefit plan, in no case
will the operation of the Top-Heavy rules, including rules applicable to Super
Top-Heavy Plans, pertaining for example and not by way of limitation to the
definitions of the Defined Benefit Plan Fraction or Defined Contribution Plan
Fraction, effect a reduction in the Participant's accrued benefit. However, the
mere application of the rules for establishing which Plan is primary in assuring
compliance with Section 415 of the Code in the case of a Participant in both a
defined benefit plan and a defined contribution plan shall not be considered as
effecting a reduction in an accrued benefit.
XVIII-7
ARTICLE NINETEEN
MISCELLANEOUS PROVISIONS
19.1 Purpose: This Agreement and Trust which is created is purely
voluntary on the part of the Company, and the Company may change or discontinue
payments hereunder at any time or from time to time as the Company may decide;
provided, however, that such discontinuance of payment or termination is
approved as required by federal law. Except as otherwise provided by federal
law, neither the establishment of the Agreement and Trust nor any modification
hereof, nor the creation of any fund or account, nor the payment of any benefit,
shall be construed as giving any person whomsoever any legal or equitable right
against the Company or the Trustee, but any and all claims or rights arising
under this Agreement and Trust shall be expressly limited in enforcement to the
assets of the Trust fund, and in those instances where a Contract has been
issued, the right to such benefits shall also be limited by the terms and
conditions of the Contract. Nothing contained in this Agreement and Trust shall
be construed or interpreted as giving any Employee the right to be retained in
the service of the Company or shall affect or impair the right of the Company to
control its Employees and to terminate the service of any Employee at any time.
19.2 Headings: Headings or titles of Articles are for general
information only and this Agreement and Trust shall not be construed by
reference to such titles.
19.3 Severability: If any provision of this Agreement and Trust is held
invalid or unenforceable, such invalidity or unenforceability shall not effect
any other provision, and this Agreement and Trust shall be construed and
enforced as if such provision had not been included.
19.4 The terms of this Trust shall be construed in accordance with the
laws of the Trust Situs, except to the extent preempted by federal law.
19.5 Binding Effect: This Agreement and Trust shall be binding upon and
inure to the benefit of the Company and the Trustee, their successors and the
Participants and their Beneficiaries in accordance with the terms of this
Agreement and Trust.
19.6 Construction: Whenever used in this Agreement and Trust unless the
context indicates otherwise, singular shall include plural and the plural shall
include singular; and the male gender shall include the female gender.
XIX-1
19.7 Termination: Upon the return of all contributions to the Company
as provided in Paragraph 16.2 hereof, the Trust shall terminate, and the Trustee
shall be discharged from all obligations under the Trust.
19.8 Indemnification: The Company shall indemnify those to whom the
Company has delegated fiduciary responsibilities against any and all claims,
losses, damages, expenses and liabilities arising from their responsibilities in
connection with the Plan, unless the same is determined to be due to gross
negligence or willful misconduct.
19.9 Interpretation: Except as otherwise provided by federal law, in
all matters concerning the interpretation of this Agreement and Trust and the
operation of the Plan and Trust, the decisions made by the Plan Administrator
shall be final and conclusive upon all the parties. All such decisions shall
apply uniformly to all Participants in like situations.
19.10 Rules: The Plan Administrator may from time to time formulate and
issue such rules and regulations, not inconsistent with the declared purposes
and provisions of the Plan, as the Plan Administrator may deem necessary to
administer and carry out the Plan and Trust. No such rule or regulation will be
ineffective by reason of the fact that such rule or regulation may amend the
purely administrative provisions of the Plan or conform to any change in the
Plan as may be made by amendment.
19.11 Conformity with federal Law: This Agreement and Trust shall at
all times be construed and administered so as to conform to the requirements for
qualification under the Internal Revenue Code of 1986, as amended, as well as to
conform to the requirements of all governing federal law and the Agreement and
Trust shall be deemed amended automatically to conform to such legal
requirements, to the extent necessary.
19.12 Controlled Group: For purposes of interpreting and administering
Plan provisions required for tax qualification under Internal Revenue Code
Section 401, including Plan provisions relating to participation, vesting,
benefit accrual, and limitations on benefits and contributions, all employees
of all entities which are members of a Controlled Group of entities, as defined
in Internal Revenue Code Section 414(b) and (c), and/or which are members of an
Affiliated Service Group as defined in Internal Revenue Code Section 414 (m),
shall be treated as if employed by a single employer.
For purposes of determining years of Service for eligibility and
vesting purposes for any Employee or former Employee of Company,
service with any entity which is a member of a Controlled Group
XIX-2
or an Affiliated Service Group in which Company is included shall be
considered service with Company. In determining service for purposes
of benefit accrual for any Employee or former Employee of Company,
service during any Plan Year in which an Employee was a Participant in
a Plan maintained by a member of a Controlled Group or an Affiliated
Service Group in which Company is included shall be taken into
account.
19.13 Successor Company: Any successor organization of Company may
adopt this Plan and Trust, with the written consent of Company, if then in
existence. Such successor shall thereby succeed to all the rights, powers, and
duties of Company hereunder.
IN WITNESS WHEREOF, Company and Trustee have caused this Agreement to
be executed the day and date previously written.
ATTEST: PENNSYLVANIA SAVINGS BANK
By:
--------------------------- -----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Secretary President
--------------------------- -----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Treasurer Trustee
-----------------------------------
▇▇▇▇▇▇▇ Di ▇▇▇▇▇▇,
Trustee
XIX-3
The undersigned President of the above named Corporation does hereby
certify that the foregoing are true and correct copies of the Cash or Deferred
Profit Sharing Plan and Trust instruments, adopted by said Corporation and
approved by its Board of Directors at a special meeting of the Directors.
He further certifies that the Cash or Deferred Profit Sharing Plan and
Trust instruments were duly executed by the Corporation and the Trustees named
in said instruments.
(SEAL)
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
President
XIX-4
FIRST AMENDMENT TO THE AMENDED
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
OF PENNSYLVANIA, A SAVINGS BANK
Amendment made this 17th day of November, 1994 to the above Plan and
Trust.
WHEREAS, the Employer maintains the retirement plan and trust qualified
for Federal income tax purposes; and
WHEREAS, certain changes in the plan and trust are deemed advisable and
desirable.
NOW THEREFORE, the plan and trust is amended as follows to be effective
January 1, 1994.
1. 2.1(n) compensation is amended by adding the following paragraphs at
the end thereof:
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to
the contrary, for plan years beginning on or after January 1,
1994, the annual compensation of each employee taken into
account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with section 401(a)(17)(B) of the
Internal Revenue Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision. If
compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination
period. For this purpose, for determination periods beginning
before the first day of the first plan year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit
is $150,000.
-2-
2. There is added to the plan a new Article XX. Article XX
provides the following:
This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to
the contrary that would otherwise limit a distributee's
election, under this Article, a distributee may elect, at the
time and in the manner prescribed by the Plan Administrator,
to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover.
a. 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 distributions 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
-3-
distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
b. Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in section
408(b) of the Code, an individual retirement annuity 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 the
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
c. 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-
d. Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by the
distributee.
3. Articles 12.1 and 12.2 are deleted in their entirety and restated as follows:
12.1 The Company, through its duly elected Board of
Directors, shall have the right at any time to
discontinue its contributions hereunder, and to
terminate or partially terminate this Plan and Trust. In
the event that Company shall be legally dissolved, or
declared bankrupt, shall make a general assignment for
the benefit of creditors, or merge into or with another
company which shall not assume the obligations of this
Agreement, this Plan shall automatically terminate.
In the event the Plan and Trust is automatically
terminated as provided above, or in the event that
subsequent to the voluntary termination of the plan by
Company, any of the events causing automatic termination
occur prior to the final and
-5-
complete distribution of assets from the Trust, Trustee
shall automatically be vested with all rights, powers
and duties otherwise reserved in this Agreement and
Trust to Company, Plan Administrator and Named
Fiduciary, including but not limited to the right to
amend this Agreement and Trust, to liquidate the Trust,
and to continue the Plan and Trust in force.
12.2 The Company, through its duly elected Board of
Directors, reserves the right to amend this Plan and
Trust in writing at any time without the consent of any
Participant or Beneficiary; provided, however, that no
amendment to this Plan or Trust shall deprive any
Participant or Beneficiary (including any Participant or
Beneficiary who is already receiving benefits) of any
vested interest herein, except as may be allowed by
Federal Law, nor shall such amendment increase the
duties or obligations of the Trustee herein except with
his consent. Further provided, that to the extent
required by Federal Law, subject to regulations issued
by the Secretary of the Treasury, no amendment to
-6-
this Plan and Trust shall be permitted which has the
effect of: (a) eliminating or reducing an early
retirement benefit or a retirement-type subsidy for a
Participant who satisfied (either before or after the
amendment) the pre-amendment conditions for the benefit
or subsidy, or (b) eliminating an optional form of
benefit, in both cases with respect to benefits
attributable to service before such amendment.
IN WITNESS WHEREOF, Pennsylvania Savings Bank has caused this Amendment
to be executed by its duly authorized officers the date above written.
ATTEST: SAVING BANK
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇▇ Di Sandro
------------------------------ ----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Di Sandro
Secretary President
-7-
AMENDMENT
TO
CASH OR DEFERRED PROFIT SHARING PLAN AND TRUST
OF
PENNSYLVANIA SAVINGS BANK
WHEREAS, Article 12 permits the Employer to amend the Plan,
WHEREAS, the Employer has determined that it is advisable to amend the
Plan to permit directed investment accounts,
Now, THEREFORE, the Plan is amended by the addition of the following
which shall be known as Article 20.
ARTICLE 20
DIRECTED INVESTMENT ACCOUNT
(a) The Administrator shall determine that all Participants be
permitted to direct a Trustee as to the investment of all or a
portion of the vested interest in any one or more of their individual
account balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and applied
in a uniform, non-discriminatory manner, direct the Trustee in
writing to invest the vested portion of their account in specific
assets, specific funds or other investments permitted under the Plan
and the directed investment procedure. That portion of the vested
account of any Participant so directing will thereupon be considered
a directed investment account, which shall not share the trust fund
earnings.
(b) A separate directed investment account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and his directed
investment account shall be charged and credited as the case may be
to each account. The directed investment account shall not share in
trust fund earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and expenses as well
as any appreciation or depreciation in market value during each Plan
Year attributable to such account.
(c) The Trustee shall not be responsible for, nor liable
for, any loss or expense which may arise from or result from
compliance with any directions from the Participant. The Trustee
shall not be responsible for, nor liable for, any loss or expense
which may result from the Trustee's refusal or failure to comply with
any directions from the Participant. The Trustee may refuse to comply
with any direction from the Participant in the event the Trustee, in
its sole and absolute discretion, deems such direction improper by
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virtue of applicable law. Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
account.
IN WITNESS WHEREOF, the Employer has executed this Amendment on the
date indicated below.
PENNSYLVANIA SAVINGS BANK
BY: /s/ ▇▇▇▇▇▇▇ Di ▇▇▇▇▇▇
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President
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Secretary
DATED:
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