HAMPSHIRE GROUP, LIMITED AND SUBSIDIARIES
401(k) RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
Page
INTRODUCTION Name and Date of Agreement 1
SECTION 1 Definitions 1
SECTION 2 Administration of Plan by Committee 23
SECTION 3 Eligibility and Participation 31
SECTION 4 Employer Non-Elective Contributions
and Elective Contributions 34
SECTION 5 Allocation of Contributions and
Forfeitures 40
SECTION 6 Top Heavy Provision and Administration 48
SECTION 7 Retirement Benefits 51
SECTION 8 Death Benefits 51
SECTION 9 Disability Benefits 53
SECTION 10 Benefits and Vesting Upon Termination
of Employment Other Than By Reason of
Retirement, Death, or Disability 53
SECTION 11 Annuity Requirements 57
SECTION 12 Distribution Requirements 58
SECTION 13 Valuation Upon Distribution 69
SECTION 14 Trustee 70
SECTION 15 Amendment and Termination of Plan 83
SECTION 16 Limitation on Benefits and Contributions 86
SECTION 17 Rollovers and Other Transfers 89
SECTION 18 Miscellaneous Provisions 91
SECTION 19 Voluntary Participant Contributions 93
SECTION 20 Participant Loans 93
SECTION 21 Hardship Distributions 96
SECTION 22 Cash or Deferred Limitations 97
SECTION 23 Investment Direction By Participant 112
SECTION 24 Initial Qualification 115
HAMPSHIRE GROUP, LIMITED AND SUBSIDIARIES
401(k) RETIREMENT SAVINGS PLAN
AND TRUST AGREEMENT
AGREEMENT made this 30th day of December, 1994, by and between HAMPSHIRE
GROUP, LIMITED, a corporation organized and existing under the laws of the State
of Delaware, (hereinafter called "Employer"), and XXXXXXX X. XXXXXXX, XXXXXXXX
X. XXXXXXXXX and XXXXXX X. XXXXXXX, XX., as Trustees of the Trust herein
created, (hereinafter called "Trustee")
WHEREAS, Employer did establish a 401(k) Profit-Sharing Plan and Trust
Agreement on January 1, 1988, which was amended and restated on March 13, 1992;
and
WHEREAS, it is now deemed necessary to amend and restate said 401(k)
Profit-Sharing Plan and Trust Agreement.
NOW, THEREFORE, Employer and Trustee mutually do covenant and agree to
amend and restate said 401(k) Profit-Sharing Plan and Trust Agreement by
substituting in its entirety the following:
SECTION 1 - Definitions
When used herein, the following terms shall have the indicated meanings,
unless the context clearly indicates otherwise:
1.1 "Account" or "Accounts" includes a Participant's Account for Employer
Non-Elective Contributions which do not satisfy the Code Sections 401(k) (2) (B)
and (C) Provisions, Account for Employer Non-Elective Contributions which
satisfy the Code Sections 401(k) (2) (B) and (C) Provisions, and the
Participant's Elective Account, unless the context indicates otherwise.
1.2 "Accrued Benefit" shall mean the amount standing in a Participant's
Account (including his Non-Elective Account and Elective Account) as of any
particular date.
1.3 "Affiliated Employer" shall mean the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Code Section
414 (b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414 (c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to regulations under Code Section 414 (o).
1.4 "Aggregate Account" shall mean, 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 Top Heavy
Provision and Administration Section.
1.5 "Anniversary Date" shall mean December 31.
1.6 "Annuity" or "Annuity Contract" shall mean a qualified, nontransferable
Annuity Contract.
1.7 "Authorized Leave of Absence" shall mean a temporary cessation of
active employment with the Employer pursuant to a nondiscriminatory policy,
provided the cessation was approved by the Employer and the Employee returns to
work for the Employer not later than the expiration of such approved cessation
of employment.
1.8 "Beneficiary" or "Beneficiaries" shall mean such person or persons or
legal entity as may be designated by a Participant to receive benefits hereunder
after the Participant's death, or if the Participant fails to designate a
Beneficiary, then the estate of the participant, except as otherwise provided in
the Death Benefits Section and Annuity Requirements Section where the
Participant's spouse is the required Beneficiary.
1.9 "Code" shall mean the Internal Revenue Code of 1986, and any amendments
thereto.
1.10 "Code Section 415 Compensation" shall mean:
(a) a Participant's wages, salaries, and fees for professional
services, and other amounts received (without regard to whether or not an
amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to the extent
that the amounts are includable in gross income (including, but not limited
to, commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, reimbursements, and expense allowances);
(b) in the case of a Participant who is an Employee within the meaning
of Code Section 401(c) (1) and the regulations thereunder, the
Participant's Earned income (as described in Code Section 401(c) (2) and
the regulations thereunder);
(c) amounts described in Code Section 104 (a) (3), 105 (a) and 105
(h), but only to the extent that these amounts are includable in the gross
income of the Employee;
(d) amounts paid or reimbursed by the Employer for moving expenses
incurred by an Employee, but only to the extent that these amounts are not
deductible by the Employee under Code Section 217;
(e) the value of a non-qualified stock option granted to an Employee
by the Employer, but only to the extent that the value of the option is
includable in the gross income of the Employee for the taxable year in
which granted; and
(f) the amount includable in the gross income of an Employee upon
making the election described in Code Section 83 (b)
Subparagraphs (a) and (b) above include foreign earned income (as defined
in Code Section 911(b)), whether or not excludable from gross income under
Section 911.
Code Section 415 Compensation does not include the following:
(a) Employer contributions to a plan of deferred compensation which
are not included in the Employee's gross income for the taxable year in
which contributed or Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(b) amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a substantial risk
of forfeiture;
(c) amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option; and
(d) other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in Code Section 403
(b) (whether or not the amounts are actually excludable from the gross
income of the Employee).
Code Section 415 Compensation for any Limitation Year is the compensation
actually paid or made available to a Participant within such Limitation Year.
For any Limitation Year beginning after December 31, 1991, Code Section 415
Compensation shall not include accrued compensation (other than de minimis
accrued compensation as provided for in Treasury Regulations)
1.11 "Code Sections 401(k) (2) (A), (B) and (C) Provisions" shall mean a
qualified cash or deferred arrangement under which
(a) a covered employee may elect to have the Employer make payments as
contributions to a trust under the plan on behalf of the Employee, or to
the Employee in cash;
(b) the amounts held in the trust attributable to Employer
contributions made pursuant to the Employee's election may not be
distributable to the Participant or Beneficiary earlier than separation
from service, death, disability, termination of the Plan without
establishment of a successor plan, the attainment of age 59 1/2, or
Hardship; and
(c) the Employee's right to his Accrued Benefit derived from Employer
contributions made to the trust pursuant to his election is
non-forfeitable.
1.12 "Code Sections 401(k) (2) (B) and (C) Provisions" shall mean a
qualified cash or deferred arrangement under which
(a) the amounts held in the trust attributable to Employer
contributions are treated as made pursuant to the Employee's election and
may not be distributable to the Participant or Beneficiary earlier than
separation from service, death, disability, termination of the Plan without
establishment of a successor plan, or the attainment of age 59 1/2; and
(b) the Employee's right to his Accrued Benefit derived from Employer
contributions when made to the trust pursuant to his election is
non-forfeitable.
1.13 "Committee" shall mean the Plan committee appointed by the Employer
pursuant to the Administration of Plan by Committee Section.
1.14 "Compensation" shall mean the entire amount paid to an Employee by the
Employer during the Plan Year as salary, hourly wages, commissions, overtime pay
and bonuses but excluding nontaxable fringe benefits, severance pay, earnings
prior to entering the Plan and any benefits and credits under this or any other
employee benefit plan of the Employer. Notwithstanding the preceding sentence,
all Code Section 415 Compensation during the entire Limitation Year shall be
taken into account for determining the required minimum allocation for a Non-Key
Employee if the Plan is a Top Heavy Plan and the required minimum benefit has
not been otherwise provided under Code Section 416(c). For years beginning
after December 31, 1988 and before January 1, 1994, the annual Compensation of
each Participant taken into account under the Plan for any year shall not exceed
$200,000. This limitation shall be adjusted by the Secretary at the same time
and in the same manner as under Code Section 415 (d), except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If the Plan determines compensation
on a period of time that contains fewer than twelve (12) calendar months, then
the annual Compensation limit is an amount equal to the annual Compensation
limit for the calendar year in which the Compensation period begins multiplied
by the ratio obtained by dividing the number of full months in the period by 12.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q) (6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age nineteen
(19) before the close of the year. If, as a result of the application of such
rules the adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if this Plan
provides for permitted disparity), the limitation shall be prorated among the
affected individuals in proportion to each such individual's Compensation as
determined under this Section prior to the application of this limitation.
If Compensation for any prior Plan Year is taken into account in
determining an Employee's contributions or benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
Compensation limit in effect for that prior year. For this purpose, for years
beginning before January 1, 1990, the applicable annual Compensation limit is
$200, 000.
In 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
twelve (12) months, over which compensation is determined (determination period)
beginning in such calendar year. If a determination period consists of fewer
than twelve (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.
Compensation shall include Employer contributions made pursuant to a salary
reduction agreement which are not includible in the gross income of the Employee
under Code Section 125. Compensation shall include Employer contributions made
to a Code Section 401(k) plan pursuant to a salary reduction agreement which are
not includible in the gross income of the Employee under Code Section 402 (a)
(8). Compensation shall include Employer contributions made pursuant to a salary
reduction agreement which are not includible in the gross income of the Employee
under Code Section 402 (h) and Code Section 403 (b).
1.15 "Deferred Compensation" shall mean with respect to any Participant
that part of such Participant's Compensation paid or accrued by the Employer for
a Plan Year that such Participant has elected to defer pursuant to Section 4.2.
1.16 "Determination Date" shall mean (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of such Plan Year.
1.17 "Disability" shall mean total and permanent physical or mental
incapacity of a Participant to perform the duties of his employment with the
Employer unless such physical or mental incapacity occurs as a result of the
willfulness or gross negligence of the Participant. Such incapacity shall be
established by a medical examination by a medical doctor selected or approved by
the Committee.
1.18 "Effective Date" of this amended and restated Plan and Trust shall be
January 1, 1993 except as provided below for the following special Effective
Dates
(a) The requirements for Sections 1.22 and 1.54 are effective January
1, 1994.
(b) The requirements for Section 1.55 are effective January 1, 1995.
(c)The requirements for Section 3.1 are effective January 1, 1995.
(d) The requirements for Section 3.3 are effective January 1, 1995.
(e) The requirements for Section 4.2 are effective January 1, 1995.
(f) The requirements for Section 5.11 are effective January 1, 1995.
(g) The requirements for Section 12.5 are effective January 1, 1995.
(h)The requirements for Section 20 are effective January 1, 1994.
(i)The requirements for Section 24.1 are effective January 1, 1995.
The Plan provisions in effect prior to a special Effective Date for such
provisions shall control until such special Effective Date.
1.19 "Elective Account" shall mean the account established and maintained
for each Participant with respect to his total interest in the Plan and Trust
resulting from Employer Elective Contributions and Employer Non-Elective
contributions which satisfy the Code Sections 401(k) (2) (B) and (C) Provisions.
1.20 "Elective Contribution" shall mean the Employer's contributions to the
Plan that are made pursuant to the Participant's cash or deferred election.
1.21 "Employee" shall mean any individual employed by the Employer other
than an independent contractor. Any Leased Employee, as defined in Code Section
414(n) (2), shall be treated as an Employee of the Employer. The preceding
sentence shall not apply to any Leased Employees if such employees are covered
by a money purchase pension plan as described in Code Section 414(n) (5)
providing (a) a nonintegrated employer contribution rate of at least ten (10%)
percent of compensation as defined in Code Section 415(c) (3) but including
amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Sections 125, 402(a) (8),
402(h) or 403(b), (b) immediate participation, and (c) full and immediate
vesting, and such Leased Employees, with respect to services performed after
December 31, 1986, do not constitute more than twenty (20%) percent of the
Employer's Non-Highly Compensated Employee work force.
1.22 "Employer" shall mean HAMPSHIRE GROUP, LIMITED and any holding
company, subsidiary or affiliated company authorized by HAMPSHIRE GROUP, LIMITED
to adopt and participate in this Plan and Trust. The following subsidiaries of
Hampshire Group, Limited have adopted and are participating in this Plan and
Trust:
Hampshire Hosiery, Inc., Glamourette Fashion Xxxxx, Inc. and Hampshire
Designers, Inc. Glamourette Fashion Xxxxx, Inc. adopted this Plan and Trust
effective January 1, 1994.
1.23 "Five Percent Owner" shall mean any person who owns (or is considered
as owning within the meaning of Code Section 318) more than five (5%) percent of
the outstanding stock of the Employer or stock possessing more than five (5%)
percent of the total combined voting power of all stock of the Employer. In
determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414 (b), (c), (in) and (o) shall be treated as
separate employers.
1.24 "Hardship" shall mean a distribution that is made only if the
distribution is made both on account of an immediate and heavy financial need of
the Employee and is necessary to satisfy such financial need. A distribution
will be made on account of an immediate and heavy financial need of the Employee
only if the distribution is on account of:
(a) medical expenses described in Code Section 213 (d) incurred by the
Employee, the Employee's spouse, children or any dependents of the Employee
(as defined in Code Section 152);
(b) costs (excluding mortgage payments) directly related to the
purchase of a principal residence for the Employee;
(c) payment of tuition for the next twelve (12) months of
post-secondary education for the Employee, his spouse, children, or
dependents (as defined in Code Section 152);
(d) the need to prevent the eviction of the Employee from his
principal residence or foreclose on the mortgage of the Employee's
principal residence; or
(e) a need designated by the Treasury Department which is a safe
harbor for Hardship distributions.
A distribution will be considered necessary to satisfy an immediate and
heavy financial need of an Employee only if all of the following requirements
are satisfied:
(a) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Employee. The amount of an immediate and
heavy financial need may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably anticipated to result
from the distribution.
(b) The Employee has obtained all distributions, other than hardship
distributions, and all nontaxable (at the time of the loan) loans currently
available under all plans maintained by the Employer.
(c) All other plans maintained by the Employer limit the Employee's
elective contributions for the next taxable year to the applicable limit
under Code Section 402(g) for that year minus the Employee's elective
contributions for the year of the hardship distribution.
(d) The Employee is prohibited, under the terms of the Plan or an
otherwise legally enforceable agreement, from making elective contributions
and Employee contributions to the Plan and all other plans maintained by
the Employer for at least twelve (12) months after receipt of the hardship
distribution. For this purpose the phrase "all other plans maintained by
the Employer" means all qualified and nonqualified plans of deferred
compensation maintained by the Employer. The phrase includes a stock
option, stock purchase, or similar plan, or a cash or deferred arrangement
that is part of a cafeteria plan within the meaning of Section 125.
However, it does not include the mandatory Employee contribution portion of
a defined benefit plan. It also does not include a heath or welfare benefit
plan, including one that is part of a cafeteria plan within the meaning of
Code Section 125.
1.25 "Highly Compensated Employee" shall mean highly compensated active
Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year: (a) received compensation from the Employer in excess of $75,000
(as adjusted pursuant to Code Section 415(d)); (b) received compensation from
the Employer in excess of $50,000 (as adjusted pursuant to Code Section 415(d))
and was a member of the top-paid group for such year; or (c) was an officer of
the Employer and received compensation during such year that is greater than
fifty (50%) percent of the dollar limitation in effect under Code Section 415(b)
(1) (A)
The term Highly Compensated Employee also includes: (i) Employees who are
both described in the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and the Employee is one of the 100
Employees who received the most compensation from the Employer during the
determination year; and (ii) Employees who are Five Percent Owners at any time
during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (c) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve (12) month period immediately preceding the
determination year. Top-paid group means the group consisting of the top 20% of
the Employees when ranked on the basis of compensation paid during such year.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination year,
performs no service for the Employer during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's fifty-fifth (55th)
birthday.
If any Employee is, during the determination year or look-back year, a
family member of either a Five Percent Owner who is an active or former Employee
or a Highly Compensated Employee who is one of the ten (10) most Highly
Compensated Employees ranked on the basis of compensation paid by the Employer
during such year, then the family member and the Five Percent Owner or top-ten
Highly Compensated Employee shall be aggregated. In such case, the family member
and Five Percent Owner or top-ten Highly Compensated Employee shall be treated
as a single Employee receiving compensation and Plan contributions or benefits
equal to the sum of such compensation and contributions or benefits of the
family member and Five Percent Owner or top-ten Highly Compensated Employee. For
purposes of this Section, family member includes the spouse, lineal ascendants
and descendants of the Employee or former Employee and the spouses of such
lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
compensation that is considered, will be made in accordance with Code Section
414(q) and the regulations thereunder.
In determining Highly Compensated Employees, Employers shall be
appropriately aggregated under Code Section 414 (b), (c), (in) and (o).
With respect to an Employee who separated from service before January 1,
1987, such Employee will be included as a Highly Compensated Employee only if
the Employee was a Five Percent Owner or received compensation in excess of
$50,000 during (i) the Employee's separation year (or the year preceding such
separation year) or (ii) any year ending on or after such Employee's 55th
birthday (or the last year ending before such Employee's 55th birthday).
For purposes of this Section, compensation shall mean Code Section 415
Compensation.
1.26 "Hour of Service" shall mean:
(a) each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer during the applicable
period.
(b) each hour for which an Employee is paid, or entitled to payment,
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 or pregnancy),
layoff, jury duty, military duty or Authorized Leave of Absence.
Notwithstanding the foregoing:
(i) no more than 501 Hours of Service will be credited to an
Employee on account of any single continuous period during which no
duties are performed (whether or not such period occurs in a single
Plan Year or other period); and
(ii) no credit for an Hour of Service will be given for which an
Employee is directly or indirectly paid, or entitled to payment, on
account of a period during which no duties were performed 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 (iii) no credit for an
Hour of Service will be given for payment which solely reimburses an
Employee for medical or medically related expenses incurred by the
Employee.
For purposes of this subsection, a payment shall be deemed to be made
by or due from the Employer, regardless of whether such payment is made by,
or due from the Employer, directly or indirectly through, among others, a
trust fund, or insurer to which the Employer contributes or pays premiums,
and regardless of whether contributions made or due to the trust fund,
insurer or other entity are for the benefit of a particular Employee or are
on behalf of a group of Employees in the aggregate.
(c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer.
Crediting of Hours of Service for back pay awarded or agreed to with
respect to the periods described in (b) above shall be subject to the
limitations of that Subsection.
The same Hours of Service shall not be credited both under (a) or (b), as
the case may be, and under (c) above of this Section.
In the case of a payment which is made or due on account of a period during
which an Employee performs no duties, and which results in the crediting of
Hours of Service under (b) above of this Section, or in the case of an award or
agreement for back pay, to the extent that such award or agreement is made with
respect to such a period described in (b) above of this Section, the number of
Hours of Service to be credited shall be determined pursuant to applicable Labor
Department regulations.
The computation and crediting of Hours of Service shall be determined
pursuant to Department of Labor regulations section 2530.200b-2(b) and (c).
Nothing in this Section shall be construed as denying an Employee credit
for an Hour of Service if credit is required by separate federal law.
Military service shall mean service in the armed forces of the United
States if the Employer is required by applicable federal law to re-employ such
Employee and reinstate such Employee's rights and benefits.
Solely for purposes of determining whether a One-Year Break in Service for
participation and vesting purposes has occurred in a computation period for Plan
Years beginning after 1984, an individual who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such Hours of Service cannot be determined, eight (8) Hours of
Service per day of such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (a) by reason of the
pregnancy of the individual, (b) by reason of a birth of a child of the
individual, (c) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this paragraph
shall be credited (a) in the computation period in which the absence begins if
the crediting is necessary to prevent a One-Year Break in Service in that
period, or (b) in all other cases, in the following computation period.
An Hour of Service with an Affiliated Employer shall be credited as an Hour
of Service under this Plan. Hours of Service will also be credited for any
individual considered an Employee for purposes of this Plan under Code Section
414(n) or Code Section 414(o) and the regulations thereunder.
1.27 "Inactive Participant" shall mean any Employee or former Employee who
has ceased to be a Participant and on whose behalf an Account is maintained
under the Plan.
1.28 "Investment Manager" shall mean any party that (a) is either (i)
registered as an investment advisor under the Investment Advisors Act of 1940,
or (ii) a bank, or (iii) an insurance company; (b) acknowledges in writing that
it is a fiduciary with respect to the Plan; and (c) is granted the power to
manage, acquire, or dispose of any asset of the Plan.
1.29 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiaries) who, at any time during the Plan Year containing the
Determination Date or any of the preceding four (4) Plan Years, is or was:
(a) an officer of an Employer having annual compensation greater than
fifty (50%) percent of the amount in effect under Code Section 415 (b) (1)
(A) for any such Plan Year;
(b) an owner (or considered an owner under Code Section 318) of one of
the ten largest interests in the Employer if such individual's annual
compensation exceeds one hundred (100%) percent of the dollar limitation
under Code Section 415(c) (1) (A);
(c) a "Five Percent Owner" of the Employer; or
(d) a "One Percent Owner" of the Employer having an annual
compensation from the Employer of more than $150,000.
Annual compensation means compensation as defined in Code Section 415(c)
(3) but including amounts contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the Employee's gross income under
Code Section 125, Code Section 402(a) (8), Code Section 402(h) or Code Section
403(b) of the Code. The determination of who is a Key Employee will be made in
accordance with Code Section 416(i) (1) and the regulations thereunder.
1.30 "Leased Employee" shall mean any person (other than a common law
Employee of the Employer) who pursuant to an agreement between the recipient and
any other person ("leasing organization") has performed services for the
recipient (or for the Employer and related persons determined in accordance with
Code Section 414(n) (6)) on a substantially full time basis for a period of at
least one year and such services are of a type historically performed by
Employees in the business field of the recipient Employer. Contributions or
benefits provided a Leased Employee by the leasing organization which are
attributable to services performed for the recipient Employer shall be treated
as provided by the recipient Employer. A Leased Employee shall be credited with
service performed for an Affiliated Employer.
1.31 "Limitation Year" shall mean the Plan Year.
1.32 "Named Fiduciary" shall be the Committee.
1.33 "Non-Elective Contribution" shall mean the Employer's contributions to
the Plan other than those made pursuant to the Participant's cash or deferred
election.
1.34 "Non-Highly Compensated Employee" shall mean an Employee of the
Employer who is neither a Highly Compensated Employee nor a Family Member.
1.35 "Non-Key Employee" means any Employee who is not a Key Employee.1.36
"Normal Retirement Age" shall mean the day on which the Participant attains his
sixty-second (62nd) birthday.
1.37 "Normal Retirement Date" shall mean the day on which the Participant
attains his sixty-second (62nd) birthday, unless the Participant's employment is
continued beyond his sixty-second (62nd) birthday in which case the
Participant's Normal Retirement Date shall be the day on which he actually
retires.
1.38 "One Percent Owner" shall mean any person who owns (or is considered
as owning within the meaning of Code Section 318) more than one (1%) percent of
the outstanding stock of the Employer or stock possessing more than one (1%)
percent of the total combined voting power of all stock of the Employer. In
determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c) and (in) 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 Code Sections 414(b),(c) and (in) shall be taken into account.
1.39 "One-Year Break in Service shall mean the applicable computation
period during which an" Employee has not completed more than 500 Hours of
Service with the Employer. An Authorized Leave of Absence shall not cause a
One-Year Break in Service. The applicable computation period shall mean the
period or periods used in the definition of Year of Service.
1.40 "Participant" shall mean any Employee of the Employer who has met the
eligibility requirements and participation requirements of this Plan and becomes
a Participant in this Plan.
1.41 "Plan" shall mean the profit-sharing and 401(k) plan of the Employer
as set forth in and by this document and all subsequent amendments thereto.
1.42 "Plan Administrator" shall be the Employer.
1.43 "Plan Name" shall be HAMPSHIRE GROUP, LIMITED AND SUBSIDIARIES 401(k)
RETIREMENT SAVINGS PLAN.
1.44 "Plan Year" shall be the twelve (12) consecutive month period
beginning on January 1 and ending on December 31.
1.45 "Shareholder-Employee" shall mean a Participant who owns more than
five (5%) percent of the Employer's outstanding capital stock interest during
any year in which the Employer elects to be taxed as an "5" corporation under
the Code.
1.46 "Super Top Heavy Plan" shall mean, for Plan Years commencing after
December 31, 1983, that, as of the Determination Date, (a) the Present Value of
Accrued Benefits of Key Employees, and (b) the sum of the Aggregate Accounts. of
Key Employees under this Plan and all plans of an Aggregation Group, exceeds
ninety (90%) percent of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Participants under this Plan and all plans of an Aggregation
Group.
1.47 "Taxable Year" shall mean the twelve (12) consecutive month period
beginning on January 1 and ending on December 31.
1.48 "Top Heavy Group" shall mean an Aggregation Group in which, as of the
Determination Date, the sum of:
(a) the Present Value of Accrued Benefits of Key Employees under all
defined benefit plans included in the group, and
(b) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group, exceeds sixty (60%) percent of a
similar sum determined for all Participants.
1.49 "Top Heavy Plan" shall mean, for Plan Years commencing after December
31, 1983, that, as of the Determination Date, (a) the Present Value of Accrued
Benefits of Key Employees, and (b) the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an Aggregation Group, exceeds sixty
(60%) percent of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Participants under this Plan and all plans of an Aggregation
Group.
1.50 "Top Heavy Plan Year" shall mean that, for a particular Plan Year
commencing after December 31, 1983, the Plan is a Top Heavy Plan as defined
herein.
1.51 "Trust" as herein used shall mean the legal entity resulting from the
agreement between the Employer and the Trustee by which the contributions
hereunder shall be made, received, held, invested, reinvested and disbursed to
or for the benefit of the Participants or their Beneficiaries, or both,
according to the terms of this Plan.
1.52 "Trust Fund" shall mean all funds received by the Trustee, together
with all income, profits, losses or increments thereon.
1.53 "Trustee" shall mean a corporation, association, individual, group of
individuals, or any combination of them, or any successor or successors who
shall accept the designation and enter into the duties of Trustee as
specifically set forth in this Trust Agreement.
1.54 "Valuation Date" shall mean March 31, June 30, September 30 and
December 31.
1.55 "Year of Service" shall mean for purposes of
(a) eligibility to participate in this Plan, a period of twelve
consecutive months, as hereinafter set forth, during which an Employee
completes at least 1,000 Hours of Service. The initial eligibility
computation period to be taken into account for this purpose shall be the
twelve consecutive month period commencing with the day on which the
Employee first performs an Hour of Service ("employment year"). The
eligibility computation period shall shift to the Plan Year. The first Plan
Year so used shall be the Plan Year which includes the first anniversary of
the day on which the Employee first performs an Hour of Service. An
Employee who is credited with 1,000 Hours of Service in both the initial
eligibility computation period and the first Plan Year which commences
prior to the first anniversary of the Employee's initial eligibility
computation period will be credited with two (2) Years of Service for
purposes of eligibility to participate.
(b)vesting in this Plan, a Plan Year during which an Employee
completes at least 1,000 Hours of Service.
(c) accrual of benefits in this Plan, a Plan Year during which a
Participant completes at least 1,000 Hours of Service, except as otherwise
specifically provided for herein.
A Year of Service with an Affiliated Employer and a predecessor employer
that maintained this Plan shall be credited as a Year of Service with the
Employer for purposes of vesting and eligibility to participate in this Plan.
SECTION 2 - Administration of Plan by Committee
2.1 The Employer hereby delegates its administrative duties and
responsibilities in connection with the administration of this Plan to the
Committee who shall be an individual or individuals designated by the Employer.
2.2 The Committee shall appoint a chairman and a secretary and may appoint
an acting chairman and an acting secretary. One person may hold more than one
position on the Committee.
2.3 The Committee shall hold meetings upon such notice, at such place and
at such times as they may from time to time determine. Notice of a meeting shall
not be required if waived in writing, or if all of the members are present at
the meeting. A majority of the members of the Committee at any time in office
shall constitute a quorum. All resolutions or other actions taken by the
Committee at any meeting shall be by vote of a majority present at any such
meeting and entitled to vote. Resolutions may be adopted or other action taken
without a meeting upon written consent signed by all of the members.
2.4 The Committee shall maintain full and complete records of their
deliberations and decisions. The minutes of their proceedings shall be
conclusive proof of the facts of the operation of the Plan. Their records shall
contain all relevant data pertaining to individual Participants and their rights
under the Plan and in the Trust Fund.
2.5 The members of the Committee shall be bonded to the extent required by
law.
2.6 No fee or compensation shall be paid to any member for his services as
such, but any expenses properly incurred by the Committee shall be paid or
reimbursed by the Trust Fund unless voluntarily paid by Employer.
2.7 The Committee shall have the duty and complete authority to interpret
and construe the provisions of the Plan and this Agreement, and to decide any
dispute which may arise regarding the rights and benefits of any Participant,
his legal representatives or Beneficiaries, which determinations shall apply
uniformly to all persons similarly situated and shall be binding and conclusive
upon all interested persons. The Committee may adopt rules, regulations or
by-laws for use in the administration of the Plan, appoint agents and compensate
them, and, in general, direct the administration of this Plan. Interpretation
and administration of this Plan and Trust shall always be made with the
fundamental purpose that the Plan and Trust is a retirement plan qualified under
Code Section 401.
2.8 Any member of the Committee may resign at any time and may be removed
with or without cause by the Employer. The Employer may (but shall not be
required to) appoint a successor to fill any vacancy in the membership of the
Committee and shall notify the Trustee of any such appointment.
2.9 The Committee or its designee shall, within a reasonable time preceding
a Participant's Normal Retirement Date, consult and advise such Participant
concerning his benefits, options and rights under the Plan.
2.10 The Committee may correct errors and, so far as practicable and in
conformity with the Code and other applicable law and regulations, may adjust
any benefit or payment or credit accordingly.
2.11 The Committee shall determine the eligibility of Employees in
accordance with the provisions of this Plan from the information furnished to it
by Employer in accordance with the request of the Committee.
2.12 On or about the date upon which Employer shall make payment of any
contribution under the Plan by payment to the Trustee, the Committee shall
deliver to the Trustee a schedule showing the names of the Participants,
Inactive Participants and Beneficiaries, the Compensation of each Participant
for the Plan Year, the amount of Employer contributions, the amount of each
Participant's contributions, if any, the names of the Inactive Participants
whose employment was terminated during the Plan Year together with forfeitures,
if any, and such other information as shall be necessary for the Trustee to
allocate contributions and if otherwise permitted herein, forfeitures to the
Participants (unless the Trustee and Committee have agreed in writing that the
Committee is to make such allocations)
2.13 In any case involving termination of employment of a Participant or
any question as to vested interest, the Committee shall determine the percentage
of vesting and shall communicate its determination to the Trustee. If a
terminated Participant's benefits are to be received or invested in Annuity
Contracts (if Annuities are otherwise specifically permitted under the Annuity
Requirements Section), the Committee shall make proper application for such an
Annuity to an insurance company and shall direct the Trustee to purchase said
Annuity Contract and deliver it in accordance with the Committee's instructions
after taking into account the consent requirements of Code Section 401(a) (11),
Code Section 417 and the Annuity Requirements Section.
2.14 The Committee shall be the agent for service of legal process.
2.15 The Committee is authorized to secure such legal, medical, accounting,
actuarial, or other consultant's advice, and to appoint qualified appraisers of
real, personal, or intangible property, and to pay their reasonable expenses and
compensation from the Trust Fund, unless the Employer voluntarily makes such
payments.
2.16 In the event and to the extent not insured against by any insurance
company, the Employer shall indemnify and hold harmless the Committee members,
their assistants and representatives, from any and all claims, demands, suits,
losses, damages and any other liability arising from their responsibilities in
connection with the Plan or Trust, unless the same is determined to be due to
gross negligence or willful misconduct.
2.17 A Participant, Inactive Participant or Beneficiary shall have the
right to file a claim, inquire if he has any right to benefits and the amounts
thereof, or appeal the denial of a claim.
A claim will be considered as having been filed when a written
communication is made by the Participant or his authorized representative who
brings his claim request to the attention of the Plan Administrator or any
member of the Committee.
The Committee shall notify the claimant in writing within ninety (90) days
after receipt of the claim if the claim is wholly or partially denied. If an
extension of time beyond the initial ninety (90) day period for processing the
claim is required, written notice of the extension shall be provided the
claimant prior to the termination of the initial ninety (90) day period. In no
event shall the extension exceed a period of ninety (90) days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Committee
expects to render a final decision.
Notice of a wholly or partially denied claim for benefits will be in
writing in a manner calculated to be understood by the claimant and shall
include:
(a) The reason or reasons for denial;
(b) Specific reference to the Plan provisions that apply in the case;
(c) 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
(d) An explanation of the Plan's claim appeal procedure.
If a claim is denied, the claimant may file an appeal asking the Committee
to conduct a full and fair review of his claim. An appeal must be made in
writing no more than sixty (60) days after the claimant receives written notice
of the denial. The claimant may review any documents that apply to the case and
may also submit points of disagreement and other comments in writing along with
the appeal.
The decision of the Committee regarding the appeal shall be given to the
claimant in writing no later than sixty (60) days following receipt of the
appeal. However, if the Committee, in its sole discretion, grants a hearing, or
there are special circumstances involved, the decision will be given no later
than one-hundred twenty (120) days after receiving the appeal. If such an
extension of time for review is required because of special circumstances,
written notice of the extension shall be furnished to the claimant prior to the
commencement of the extension. The decision shall include specific reasons for
the decision, written in a manner calculated to be understood by the claimant,
as well as specific references to the pertinent Plan provisions on which the
decision is based.
2.18 The Committee from time to time may appoint one or more Investment
Managers to direct or approve all investments and reinvestments of the Trust
Fund, by written notice to the Trustee. However, until notified to the contrary
by the Committee or unless the Plan and Trust specifically permits a Participant
to self-direct the investment of his Account, the Trustee is responsible for all
investments and reinvestments. After the Committee has notified the Trustee of
its appointment of an Investment Manager to direct or approve investments and
reinvestments, the Investment Manager then shall become responsible for any and
all investments and reinvestments made by it. The Trustee may rely upon the
directions and instructions of the Committee and Investment Manager without
being in any way liable or responsible for the consequences.
2.19 The Committee from time to time, either itself or through its duly
appointed agents, may direct or approve all investments and reinvestments of the
Trust Fund, by written notice to the Trustee. However, until notified to the
contrary by the Committee or unless the Plan and Trust specifically permits a
Participant to self-direct the investment of his Account, the Trustee is
responsible for all investments and reinvestments. After the Committee has
notified the Trustee of its intention to direct or approve investments and
reinvestments, the Committee then shall become responsible for any and all
investments and reinvestments made pursuant to such direction or approval. The
Trustee may rely upon the directions and instructions of the Committee without
being in any way liable or responsible for the consequences.
2.20 The Committee shall have the responsibility for developing a funding
policy for the Plan, if required, and shall communicate such funding policy to
the Trustee, or other Investment Manager, and shall see to it that the funding
policy is carried out.
2.21 If a Participant or a Beneficiary receives a qualifying rollover
distribution from the Plan, the Committee shall provide a written explanation to
the recipient (a) that the distribution will not be taxed currently to the
extent transferred to another qualified plan or individual retirement account
within sixty (60) days after the date on which the recipient received the
distribution, and (b) of income averaging and capital gains provisions, if
applicable. In the case of a series of distributions the notice shall explain
that the sixty (60) day period does not begin to run until the last distribution
is made.
2.22 If any person entitled to receive any benefit hereunder shall be a
minor child or incompetent person, but no legal representative has been
appointed for him or her, the Committee may, in its discretion, cause any
benefit otherwise payable to such person to be paid to the conservator, parent
or guardian or spouse of such person, or to the institution maintaining such
person, or to the individual having custody of such person, or may otherwise
cause the same to be applied for the benefit of such person in any manner which
the Committee may deem proper, without regard to the duty of any person to
support such minor or incompetent person, and without regard to any other funds
which may be available for the purpose, and, in the case of any payment made for
the benefit of such person in any of the manners just authorized, the receipt by
the person to whom the payment is made shall be in full discharge of all
liability under the Plan and Trust in respect of such payment. Deposit to the
credit of a Participant or Beneficiary in any bank, savings and loan or trust
company shall be deemed payment into the hands of such person.
2.23 Notwithstanding anything in this Plan and Trust to the contrary, the
Trustee and Committee may agree in writing that the Committee will perform
certain record keeping functions delegated to the Trustee herein such as
allocating contributions and in such event the Trustee shall be fully relieved
of such duties.
SECTION 3 - Eligibility and Participation
3.1 Any Employee who has completed one (1) Year of Service and has attained
the age of twenty (20) shall be eligible to participate in this Plan as of the
earlier of the January 1, April 1, July 1 or October 1 next following the date
upon which the Employee has completed the aforesaid service and age
requirements, provided such Employee is so employed on such January 1, April 1,
July 1 or October 1. A Leased Employee shall not be eligible to participate in
this Plan. Any Employee who is included in a unit of Employees covered by an
agreement in which retirement benefits are the subject of good faith bargaining
between Employee representatives and the Employer shall not be eligible to
participate in this Plan. Any Employee who is a nonresident alien and who
receives no earned income (within the meaning of Code Section 911 (d) (2)) from
the Employer which constitutes income from sources within the United States
(within the 31 meaning of Code Section 861(a) (3)) shall not be eligible to
participate in this Plan. Any Employee who was participating in this Plan on the
day before the Effective Date of this amended and restated Plan shall continue
to participate in this Plan subject to the other requirements herein.
3.2 For purposes of Years of Service for participation, all Years of
Service with the Employer shall be taken into account, and an Employee who
incurs a One-Year Break in Service shall participate in this Plan effective on
the re-employment commencement date. Notwithstanding the preceding sentence, for
Plan Years beginning before 1985, Years of Service prior to any One-Year Break
in Service shall not be credited and the Participant shall satisfy again the
eligibility for participation requirements if the Employee was not vested in
Employer contributions and the number of consecutive One-Year Breaks in Service
equals or exceeds the aggregate number of Years of Service before such break.
Such aggregate number of Years of Service before such break shall be deemed not
to include any Years of Service not required to be taken into account by reason
of any prior One-Year Break in Service. For Plan Years beginning after 1984,
Years of Service for eligibility to participate prior to a period of consecutive
One-Year Breaks in Service shall not be credited and the Participant shall
satisfy again the eligibility for participation requirements if the Employee was
not vested in Employer contributions and the number of consecutive One-Year
Breaks in Service equals or exceeds the greater of five (5) or the aggregate
number of Years of Service before such breaks in service. Such aggregate number
of Years of Service before such break shall not include any Years of Service
disregarded under the preceding sentence by reason of prior breaks in service.
Such Employee shall be considered as a new Employee and shall again become
eligible for participation when he shall have met the eligibility requirements
of the Plan and Trust in connection with the period of his re-employment. The
re-employment commencement date is the first day on which the Employee is
credited with an Hour of Service for the performance of duties after the first
eligibility computation period in which the Employee incurs a One-Year Break in
Service
3.3 Participation in this Plan shall be mandatory on the part of each
eligible Employee. An Employee shall automatically participate in this Plan upon
first becoming eligible to participate.
3.4 If, in any Plan Year, any Employee who should have been included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been made
and allocated, the Employer shall make a subsequent contribution with respect to
the omitted Employee in the amount which the Employer would have contributed
with respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any Taxable
Year under applicable provisions of the Code by such Employer.
3.5 If, in any Plan Year, any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made and
allocated, the Employer shall not be entitled to recover the contribution made
with respect to the ineligible person regardless of whether or not a deduction
is allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a forfeiture
for the Plan Year in which the discovery is made.
3.6 In the event a Participant is no longer a member of an eligible class
of Employees and becomes ineligible to participate, but has not incurred a
One-Year Break in Service, eligibility will be determined under the break in
service rules of the Plan. In the event an Employee who is not a member of the
eligible class of Employees becomes a member of the eligible class such Employee
will participate immediately if such Employee has satisfied the minimum age and
service requirements and would have otherwise previously become a Participant.
SECTION 4 -Employer Non-Elective Contributions and Elective Contributions
4.1 For each Taxable Year during the continuance of this Plan, the Employer
shall contribute such amount (if any) to the Trust Fund as the Employer in its
sole discretion shall determine; provided, however, Employer's aggregate
contributions of both Elective Contributions and Non-Elective Contributions for
any Taxable Year shall not exceed the maximum amount that can be allowed as a
deduction under the applicable provisions of the Code. Employer contributions
made under this Section 4.1 are generally referred to in this Plan and Trust as
"Employer Profit Sharing Contributions' and shall be deemed an Employer
Non-Elective Contribution subject to the vesting requirements contained in
Section 10.
4.2 In addition to Employer Profit-Sharing Contributions, upon adoption and
execution of this Plan by the Employer each Participant in the Plan pursuant to
a uniform, non-discriminatory policy may elect to defer a portion of his
Compensation of not less than one (1%) percent and not more than eighteen (l8%)
percent of Compensation or the maximum amount which will not cause the Plan to
violate the annual additions limitations under Code Section 415. However, under
no circumstances shall a Participant defer an amount of his Compensation which
causes the Plan to exceed the maximum amount allowable as a deduction to the
Employer under Code Section 404. Further, the Employee's deferrals shall be
further limited as provided in the Cash or Deferral Limitations Section.
Contributions under this Section 4.2 are generally referred to in this Plan and
Trust as the "Employee Elective Deferrals." The Committee may establish payroll
deduction procedures and other contribution procedures to facilitate the
Employee's contribution to the Plan. The Committee shall provide deferral forms
and determine such time or times that a Participant may commence deferral of his
Compensation and cease deferral of his Compensation; provided however, that at
least once during each calendar year a Participant may elect to commence and
terminate (or modify) deferral of his Compensation. The Employer shall
contribute to the Trust Fund the amount of the Participant's Deferred
Compensation which shall be deemed an Employer Elective Contribution. The
Participant shall be 100% fully vested in and have a non-forfeitable right to
Employee Elective Deferrals made under this Section 4.2. Prior to the end of
each Plan Year, all Participants may commence, change or terminate their
deferral of Compensation for the next Plan Year, or such shorter period of time
as announced by the Committee. Additionally, the Committee may allow other time
periods during the Plan Year when all Participants may prospectively commence,
change or terminate their deferral of Compensation.
Employee Elective Deferrals shall satisfy the Code Sections 401(k) (2) (A),
(B) and (C) Provisions.
4.3 In addition to Employer Profit-Sharing Contributions and Employee
Elective Deferral, for each Taxable Year during the continuance of this Plan,
the Employer may in its sole discretion contribute a discretionary amount to the
Trust Fund. Any contribution made by the Employer under this Section 4.3 are
generally referred to as Qualified Non-Elective Contributions (as defined in
Section 22.13) and must be specifically designated by the Employer to the
Trustee. The Participant shall be 100% fully vested in and have a nonforfeitable
right to Qualified Non-Elective Contributions made under this Section 4.3.
Further Qualified Non-Elective Contributions shall satisfy the Code Sections
401(k) (2) (B) and (C) Provisions. The Employer may direct that Qualified
Non-Elective Contributions shall be allocated only to Non-Highly Compensated
Employees.
4.4 In addition to Employer Profit-Sharing Contributions, Employee Elective
Deferrals and Qualified Non-Elective Contributions, the Employer may make
Matching Contributions to a Participant's Account for a Plan Year in such
amounts and in such manner as the Employer shall determine in its sole
discretion. Further, at any time the Employer may make a bonus Matching
Contribution. Any Matching Contributions are generally referred to in this Plan
and Trust as "Employer Matching Contributions" and shall be deemed an Employer
Non-Elective Contribution subject to the vesting schedule requirements in
Section 10.
Prior to the beginning of a Matching Contribution period, the Employer
shall announce the Matching Contribution formula for such period if the Employer
intends to contribute a Matching Contribution. The Matching Contribution formula
shall contain the following:
(a) the ratio of the amount of contribution the Employer will
contribute to the amount of the Participant's Elective Deferrals during the
Matching Contribution period;
(b) the maximum dollar amount (if any) the Employer will contribute as
a Matching Contribution;
(c) the dollar amount limitation (if any) the Employer will contribute
as Matching Contribution for any one Participant;
(d) a percentage limitation based upon each Participant's Compensation
or portion of Compensation; and
(e) the Matching Contribution period which shall be a period of time
not to exceed the Plan Year
In addition to the above Matching Contribution, effective for the Plan Year
beginning after a Participant completes twenty (20) continuous years of
employment with the Employer, the Employer shall contribute for such Participant
an additional amount equal to the Matching Contribution percentage received
above. This contribution shall be referred to as the "Long Service Match".
Except, however, in applying these matching percentages specified above,
only salary reductions up to four (4%) percent of Compensation shall be
considered.
Any Matching Contributions are generally referred to in this Plan and Trust
as "Employer Matching Contributions" and shall be deemed an Employer
Non-Elective Contribution subject to the vesting schedule requirements in
Section 10.
The Plan shall meet the non-discrimination requirements set forth in Code
Section 401(m) and Regulations l.401(m-l) and 1.401(m)-2 which are incorporated
herein by reference.
The Employer may also make Qualified Matching Contributions. Qualified
Matching Contributions shall satisfy the Code Sections 401(k) (2) (B) and (C)
Provisions. The Participant shall be 100% fully vested in and have a
non-forfeitable right to Qualified Matching Contributions. Further, Qualified
Matching Contributions and Matching Contributions shall be defined and meet the
requirements of the Cash or Deferred Limitation Section including Sections 22.10
and 22.11.
4.5 Except as provided below, the Employer may make payment of its
contributions for any Taxable Year on any date or dates it elects, provided only
that the total amount of its contributions for any Taxable Year shall be paid in
full not later than twelve (12) months (or within the time prescribed by
Treasury Department Regulations) after the Plan Year for which they are deemed
paid. Notwithstanding the preceding sentence, Employer Elective Contributions
resulting from a Participant's deferral of Compensation shall be paid to the
Trustee as soon as the Deferred Compensation can reasonably be segregated from
the Employer's assets.
4.6 The Employer may make payment of its Non-Elective Contribution for any
Taxable Year on any date or dates it elects, provided only that the total amount
of its contribution for any Taxable Year shall be paid in full on or before the
date required by law for filing its federal income tax return for such Taxable
Year, including any extensions granted for filing such tax return.
4.7 The Employer's Non-Elective Contribution and Elective Contributions for
each Taxable Year shall be paid by the Employer directly to the Trustee. On or
about the date of such payment, the Committee shall be advised of the amount of
such payment upon which the allocation to Participants is to be calculated.
4.8 All contributions made to this Plan and Trust by the Employer are
expressly made upon the condition that such contributions are fully deductible
for income tax purposes unless the Employer otherwise specifies in writing. -
Contributions made by the Employer to the Plan shall be made irrevocably and it
shall be impossible for the assets of the Plan to inure to the benefit of the
Employer or to be used in any manner other than for the exclusive purpose of
providing benefits to Participants, retired Participants, and Beneficiaries, and
for defraying reasonable expenses of administering the Plan; provided, however
that
(a) if the Plan does not initially qualify by the Internal Revenue
Service, then any contribution made to the Plan by the Employer must be
returned to the Employer within one year after the date of denial of
qualification of the Plan;
(b) if a contribution is made by the Employer by a mistake of fact,
such contribution must be returned to the Employer within one year after
the payment of the contribution; or
(c) to the extent the deduction for a contribution under Code Section
404 is disallowed, the contribution (to the extent disallowed) must be
returned to the Employer within one year after the disallowance of the
deduction.
4.9 Unless otherwise specifically provided in this Plan and Trust, a
Participant must have a Year of Service for accrual of benefits during a Plan
Year in order to accrue benefits for such Plan Year.
SECTION 5 - Allocation of Contributions and Forfeitures
5.1 The Employer's Profit-Sharing Contribution for any Plan Year shall be
allocated and credited by the Trustee among the Accounts of the Participants as
of the last day of such Plan Year in the proportion that each Participant's
Compensation bears to the total Compensation received by all the Participants
during the Plan Year.
5.2 The Employee Elective Deferrals shall be allocated and credited by the
Trustee to the Participant's Elective Contribution Account who made the
deferral.
5.3 The Employer Qualified Non-Elective Contributions shall be allocated
and credited by the Trustee among the Participant's Elective Accounts as of the
last day of the Plan Year in proportion that each Participant's Compensation
bears to the total Compensation received by all the Participants during the Plan
Year; provided, however, the Employer, in its sole discretion, may direct that
only Non-Highly Compensated Employees shall be eligible to receive an allocation
or credit of Qualified Non-Elective Contributions.
5.4 The Employer Matching Contribution shall be allocated and credited by
the Trustee to the Employee's Non-Elective Account in such manner as the
Employer may designate in a nondiscriminatory manner in accordance with the
Employer Matching Contribution formula. Qualified Matching Contributions shall
be allocated to the Employee's Qualified Matching Contribution Account as the
Employer designates and may, in the Employer's sole discretion, be allocated
only to Non-Highly Compensated Employees.
5.5 Any forfeitures for a Plan Year shall be used first to pay the Plan's
administration costs and expenses for the Plan Year and any remainder for the
Plan Year to reduce the Employer's contribution, and shall not be allocated
among the Participant's Accounts.
5.6 For any Top Heavy Plan Year, the total of the Employer's contribution
and, if otherwise permitted herein, forfeitures allocated to the Participant's
Account of each Non-Key Employee shall not be less than the lesser of (i) three
(3%) percent of such Non-Key Employee's compensation (as defined below), or (ii)
in the case where the Employer has no defined benefit plan which designates this
Plan to satisfy Code Section 401(a) (4) or Code Section 410, the largest
percentage of Employer contributions and forfeitures, as a percentage of the
first $200,000 (or $150,000, as adjusted by the Internal Revenue Service, for
Plan Years beginning after 1993) of the Key Employee's Code Section 415
Compensation (including any amounts contributed as a result of a salary
reduction agreement under a Code Section 401 (k) plan), allocated on behalf of
any Key Employee for that year. Neither Elective Deferrals nor Employer Matching
Contributions shall be taken into account for purposes of satisfying the minimum
Top Heavy Plan minimum allocation requirements; provided, however, that any
Employer Matching Contributions not necessary to satisfy the non-discrimination
requirements of Code Sections 401(k) and 401(m) may be taken into account for
purposes of satisfying the Top Heavy Plan minimum allocation requirements. For
any Plan Year when (i) the Plan is a Top Heavy Plan but not a Super Top Heavy
Plan and (ii) a Key Employee is a Participant in both this Plan and a defined
benefit plan included in a Required Aggregation Group which is top heavy, the
extra minimum allocation (required by Code Section 416(h) to provide higher
limitations) shall be provided for each Non-Key Employee who is a Participant
only in this Plan by substituting four (4%) percent for three (3%) percent in
the preceding sentence. For purposes of determining the minimum allocation, all
Code Section 415 Compensation during the entire Limitation Year shall be taken
into account for determining the required minimum allocation for such Non-Key
Employee. The minimum allocation is determined without regard to any Employer
Social Security contribution or the Non-Key Employee's level of Compensation.
This Section shall not apply to any Participant to the extent the Participant is
covered under any other plan or plans of the Employer and the Employer has
provided that minimum allocation or benefit requirements applicable to a Top
Heavy Plan will be met in the other plan or plans.
The minimum allocation required (to the extent required to be
non-forfeitable under Code Section 416(b)) may not be forfeited under Code
Sections 411 (a) (3) (B) or 411(a) (3) (D). The minimum allocation required
shall be allocated to a Non-Key Employee's Account if the Non-Key Employee is a
Participant even though he has not completed a Year of Service and declined to
make mandatory contributions to the Plan, if required. Any Participant who is
not employed on the last day of the Plan Year shall not receive the minimum Top
Heavy Plan benefit allocation for such Plan Year. The minimum Top Heavy Plan
benefit allocation shall not be provided to each Key Employee. If the Employer
maintains another qualified plan and a Non-Key Employee participates in this
Plan and the other plan, then such other plan shall first satisfy the minimum
Top Heavy Plan benefits required herein.
5.7 The fact that an allocation shall be made and credited to the
Non-Elective Account of a Participant shall not vest in such Participant any
right, title, or interest in and to any assets of the Trust Fund, except at the
time or times and upon such terms and conditions as are expressly set forth in
this Plan
5.8 Any assets contributed by the Employer to the Trust Fund shall be
allocated only as set forth herein and, until allocated in accordance with the
provisions of this Plan, shall be held in suspense by the Trustee.
5.9 Notwithstanding any other provision of the Plan or the effect thereof,
this Plan and Trust shall comply with the annual additions limitations contained
in Code Section 415. The maximum annual additions that may be contributed or
allocated by the Employer (including any Affiliated Employer) to a Participant's
Account under the Plan for any Limitation Year shall not exceed the lesser of
(a) the Defined Contribution Dollar Limitation, or (b) twenty-five (25%) percent
of the Code Section 415 Compensation paid to the Participant by the Employer for
the Limitation Year, or such other limits as may, from time to time, be
prescribed by regulations promulgated by the Secretary of the Treasury. The
compensation limitation in (b) above shall not apply to (i) any contribution for
medical benefits (within the meaning of Section 419A(f) (2) of the Code) after
separation from service which is otherwise treated as an annual addition, or
(ii) any amount otherwise treated as an annual addition under Section 415(1) (1)
of the Code.
For purposes of this Section, the Defined Contribution Dollar Limitation
means $30,000 or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Code Section 415(b) (i) (A) as in effect for the
Limitation Year.
For purposes of this Section, for any Limitation Year "annual additions"
shall mean for this Plan Which shall include an Affiliated Employer's plan), the
sum of: -
(a) the Participant's share of the Employer contribution;
(b) the Participant's contributions, if any;
(c) the Participant's share of forfeitures, if any, added to his
Account;
(d) amounts allocated after March 31, 1984 to an individual medical
account, as defined in Code Section 415(1) (2), which is part of a pension
or annuity plan maintained by the Employer; and
(e) amounts derived from contributions paid or accrued after December
31, 1985, in Limitation Years ending after such date, which are
attributable to post-retirement medical benefits allocated to the separate
account of a Key Employee, as defined in Code Section 419A (d) (2)
Solely for purposes of determining the annual additions under this Section,
a Participant's contributions shall exclude any rollover amount or rollover
contribution and any contributions to a simplified employee pension plan which
are excludable from income under Code Section 408(k) (6).
In the event the Employer has two or more defined contribution plans which
allow aggregate contributions to exceed the limits of Code Section 415, as
amended, as the result of allocation of forfeitures, a reasonable error in
estimating a Participant's annual Compensation, or under other facts and
circumstances which the Commissioner of Internal Revenue Service determines
justifies the excess, then the defined contribution plan with the latest
effective date shall sufficiently reduce contributions and allocations to
prevent an excess annual addition.
For purposes of this Section and the annual additions limitations,
compensation used in this Section shall mean all Code Section 415 Compensation
paid during the Limitation Year and Employer means the Employer and all
Affiliated Employers. Further, this Section applies to all defined contribution
plans (whether or not terminated) of the Employer in the aggregate.
5.10 In the event that it is determined that the annual additions to a
Participant's Account for a Plan Year would be in excess of the limits contained
herein as the result of allocation of forfeitures, a reasonable error in
estimating a Participant's annual Compensation, or under other facts and
circumstances which the Commissioner of Internal Revenue Service determines
justifies the excess, such annual additions shall be reduced to the extent
necessary in the following order:
(a) Any contributions (including Elective Contributions) made by the
Participant during the Plan Year, including the earnings thereon, which are
included in such annual additions shall be returned to such Participant to
the extent necessary to reduce the annual additions to the limitations
contained herein.
(b) If, after complying with (a) above of this Section, there are any
amounts remaining which cannot be allocated to any Participant for the
Limitation Year as a result of the limitations contained herein, such
amounts shall be maintained unallocated in a suspended Account under the
Trust Fund. If a suspended Account is in existence at any time during a
particular Limitation Year, other than the Limitation Year described in the
preceding sentence, all amounts in the suspended Account must be allocated
and reallocated to Participants' Accounts subject to Code Section 415
before any Employer contributions and any Employee contributions which
would constitute annual additions may be made to the Plan for that
Limitation Year. If forfeitures are used to pay Plan administration costs
and expenses or reduce Employer contributions, then such suspended amounts
shall be used to pay Plan administration costs and expenses or reduce
contributions prior to any contribution by the Employer.
(c) Upon termination of this Plan, any amounts held in a suspended
Account because such amounts cannot be allocated to the Participants as a
result of the limitations contained herein shall revert to the Employer.
For purposes of the annual additions limitations used in this Section,
compensation used in this Section shall mean all Code Section 415 Compensation
paid during the Limitation Year.
5.11 For purposes of allocating Employer contributions and forfeitures, if
otherwise permitted herein, only Compensation paid after an Employee has
satisfied the initial eligibility requirements of the Plan and has entered the
Plan shall be taken into account. Notwithstanding the preceding sentence, all
compensation as defined in Code Section 415 during the entire Limitation Year
shall be taken into account for determining the required minimum allocation for
a Non-Key Employee if the Plan is a Top Heavy Plan.
5.12 Unless otherwise required in a Top Heavy Plan, a Participant shall not
receive an allocation or credit of the Employer's Profit-Sharing contribution
unless the Participant is employed with the Employer as of the last day of the
Plan Year and has a Year of Service for accrual of benefits for such Plan Year.
5.13 A Participant who terminates employment before the next Valuation Date
shall not be ineligible to receive an allocation or credit of the Employer
Matching Contribution solely because of the Participant's termination of
employment prior to such Valuation Date or such Participant failed to have a
Year of Service for accrual of benefits.
5.14 Notwithstanding anything in this Plan and Trust to the contrary, if
the Plan and Trust would violate either or both the participation test under
Code Section 401 (a) (26) or the coverage test under Code Section 410(b) for a
particular Plan Year, then the following shall apply in the order designated to
the extent necessary to satisfy both the aforesaid participation test and
coverage test for such Plan Year:
(a) First, each Participant who is employed with the Employer on the
last day of the Plan Year that did not receive any accrual of benefits for
such Plan Year shall nevertheless receive an accrual of benefits. If after
complying with this subparagraph (a) the Plan and Trust continues to
violate either or both the participation test and coverage test, then
subparagraph (b) shall apply for such Plan Year.
(b) Second, each Participant who is not employed on the last day of
the Plan Year and did not receive an accrual of benefits for such Plan Year
but was credited with 501 or more Hours of Service during such Plan Year
shall receive an accrual of benefits.
In accruing benefits under subparagraphs (a) or (b) above, if the Plan is a
Top Heavy Plan for such Plan Year, then the Participant shall only receive the
minimum Top Heavy Plan benefit for such Plan Year if the minimum Top Heavy Plan
benefit is all that is required for the Plan and Trust to satisfy Code Sections
401 (a) (26) and 410 (b), otherwise the Participant shall receive a full benefit
accrual.
SECTION 6 - To heavy Provision and Administration
6.1 For any Top Heavy Plan Year, the Plan hereby provides the following:
(a) special vesting requirements of Code Section 416 (b);
(b) special minimum allocation requirements of Code Section 416(c);
and
(c) special Compensation requirements of Code Section 416(d) for Plan
Years beginning before January 1, 1989.
6.2 A Participant's Aggregate Account as of the Determination Date is the
sum of:
(a) The Participant's Account balance as of the most recent valuation
occurring within a twelve (12) month period ending on the Determination
Date.- The Account balance and Accrued Benefit of a Participant who is (i)
not a Key Employee but who was a Key Employee in a prior year, or (ii) has
not been credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the five (5) year period ending on
the Determination Date will be disregarded;
(b) An adjustment for any contributions due as of the Determination
Date. Such adjustment shall be the amount of any contributions actually
made after the valuation date but before the Determination Date, except for
the first Plan Year when such adjustment shall also reflect the amount of
any contributions made after the Determination Date that are allocated as
of the date in that first Plan Year;
(c) Any Plan distributions (including distributions from a terminated
plan) made within the Plan Year that includes the Determination Date or
within the four (4) preceding Plan Years. However, in the case of
distributions made after the valuation date and prior to the Determination
Date, such distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already included in the
Participant's Aggregate Account balance as of the valuation date.
Notwithstanding anything herein to the contrary, all distributions,
including distributions made prior to January 1, 1984, will be counted;
(d) Any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified employee
contributions shall not be considered to be a part of the Participant's
Aggregate Account balance;
(e) 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 as a distribution for
purposes of this Section. If this Plan is the plan accepting such rollovers
or plan-to-plan transfers, it shall not consider such rollovers or
plan-to-plan transfers accepted after December 31, 1983 as part of the
Participant's Aggregate Account balance. However, rollovers or plan-to-plan
transfers accepted prior to January 1, 1984 shall be considered as part of
the Participant's Aggregate Account balance; and
(f) With respect to related rollovers and plan-to-plan transfers (ones
either not initiated by the Employee or made to a plan maintained by the
same employer), if this Plan provides the rollover or plan-to-plan
transfer, it shall not be counted as a distribution for purposes of this
Section. If this Plan is the plan accepting such rollover or plan-to-plan
transfer, it shall consider such rollover or plan-to-plan transfer as part
of the Participant's Aggregate Account balance, irrespective of the date on
which such rollover or plan-to-plan transfer is accepted.
6.3 Aggregation Group shall mean either a Required Aggregation Group or a
Permissive Aggregation Group as hereinafter determined
(a) In determining a Required Aggregation Group hereunder, each plan
of the Employer in which at least one Key Employee participates, or
participated at any time during the determination period (regardless of
whether the plan has terminated), and each other plan of the Employer which
enables any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a) (4) or 410, will be required to be
aggregated. Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the group
will be considered a Top Heavy Plan if the Required Aggregation Group is a
Top Heavy Group. No plan in the Required Aggregation Group will be
considered a Top Heavy Plan if the Required Aggregation Group is not a Top
Heavy Group.
(b) The Employer may also include 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 Code Section
401(a) (4) and 410. Such group shall be known as a Permissive Aggregation
Group. In the case of a Permissive Aggregation Group, only a plan that is
part of the Required Aggregation Group will be considered a Top Heavy Plan
if the Permissive Aggregation Group is a Top Heavy Group. To plan in the
Permissive Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not 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.
6.4 In the case of a defined benefit plan, a Participant's Present Value of
Accrued Benefit shall be as determined under the provisions of the applicable
defined benefit plan. Further, the accrued benefit in such defined benefit plan
of any Employee (other than a Key Employee) shall be determined
(a) under the method which is used for accrual purposes for all Plans
of the Employer; o
(b) if there is no method described in (a), as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under Code Section
411(b) (1) (C).
6.5 Annual Compensation of each Employee taken into account during any Top
Heavy Plan Year shall not exceed the sum of Two Hundred Thousand ($200,000)
Dollars, or One Hundred Fifty Thousand ($150,000) Dollars for Plan Years
beginning after 1993 (subject to an annual cost of living increase as determined
by Treasury regulations).
6.6 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 or Aggregate Account balance 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)
If a Participant has not performed services for any Employer maintaining the
Plan at any time during the five (5) year period ending on the Determination
Date, any Accrued Benefit for such Participant (and the Account of such
Participant) shall not be taken into account for purposes of determining whether
this Plan is a Top Heavy Plan.
SECTION 7 - Retirement Benefits
7.1 A Participant may retire from the employ of the Employer as of his
Normal Retirement Date. If the Participant continues in the employ of the
Employer beyond his Normal Retirement Date, he shall for purposes of this Plan
and Trust continue to be treated in all respects as an Employee and Participant
until his actual retirement. After determination of the value of the Inactive
Participant's Account, the Trustee shall pay the Account to the Inactive
Participant in accordance with the Annuity Requirements Section and the
Distribution Requirements Section. Notwithstanding anything in this Plan and
Trust to the contrary, there is no early retirement date in this Plan and Trust.
SECTION 8 - Death Benefits
8.1 In the event of the death of a Participant while employed with the
Employer, the Inactive Participant's Account shall be one hundred (100%) percent
fully vested and non-forfeitable. After determination of the value of the
Inactive Participant's Account, the Account (including the proceeds of any life
insurance on the Participant's life other than key man life insurance) shall be
paid to the Inactive Participant's surviving spouse in accordance with the
Distribution Requirements Section. If the Inactive Participant has no surviving
spouse, or the spouse has consented to the Account being paid to another
designated Beneficiary, then the Account shall be paid to such other designated
Beneficiary. Such consent shall acknowledge the specific non-spouse Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries. Any
consent by the spouse shall be in writing and shall acknowledge the effect of
such election. Prior to the death of the Participant, the Participant may revoke
such non-spouse Beneficiary designation at any time and cause the death benefit
to be payable to the Participant's spouse. Further, if all of the designated
non-spouse Beneficiaries predecease the Participant or if the designation of the
non-spouse Beneficiary is not legally effective to cause payment of the Account
to the non-spouse Beneficiary, then the Participant's spouse shall receive
payment of the Account if the spouse survives the Participant. The spouse's
consent shall be witnessed by a notary public or Committee member. Any consent
by the spouse shall be effective only with respect to such spouse. A former
spouse will be treated as the spouse, or surviving spouse, to the extent
provided under a qualified domestic relations order as described in Code Section
414 (p)
8.2 Except as provided above, at any time, and from time to time, each
Participant or Inactive Participant shall have the unrestricted right to
designate a Beneficiary or Beneficiaries to receive his Account, and to revoke
any such designation at any time thereafter. Each such designation shall be in
writing, filed with the Committee, signed by the Participant or Inactive
Participant, and bearing the signature of at least one (1) witness. If no such
designation is on file at the death of the Participant, or if the designated
Beneficiary or Beneficiaries are not living at the death of the Participant,
then the estate of the Participant shall receive the Account.
8.3 The Committee or the Trustee, or both, may require the execution and
delivery of such documents, papers and receipts as may be deemed necessary in
order to be assured that the payment of any of said death benefits is properly
made and is made to the proper person or party entitled thereto.
SECTION 9 - Disability Benefits
9.1 In the event of termination of employment of a Participant by the
Employer by reason of Disability, the Participant's right to his Account shall
be one hundred (100%) percent fully vested and non-forfeitable. After
determination of the value of the Inactive Participant's Account, the Disability
benefit shall be paid to the Inactive Participant in accordance with the Annuity
Requirements Section and the Distribution Requirements Sect ion.
SECTION 10 - Benefits and Vesting Upon Termination of Employment Other Than By
Reason of Retirement, Death, or Disability
10.1 Upon termination of employment (other than by reason of attainment of
Normal Retirement Date, early retirement, if applicable, death, or Disability),
a Participant shall be entitled to the percentage vesting of his Account
resulting from Employer Non-Elective Contributions and if otherwise permitted
herein, forfeitures as shown in the following vesting schedule:
Credited Years Vested
of Service Percentage
-------------- ----------
Less than 1 0%
1 10%
2 20%
3 30%
4 40%
5 60%
6 80%
7 or more 100%
Such vested percentage shall be determined as provided for herein and any
amount not vested either under this provision, or because of attainment of
Normal Retirement Date (or early retirement, if applicable), death, or
Disability, shall be forfeited and shall remain in the Trust Fund subject to all
the other provisions of this Plan. A Participant shall be one hundred (100%)
percent fully vested and non-forfeitable in his Account as of his Normal
Retirement Age if he is then employed with the Employer. Further, a Participant
shall be one-hundred (100%) percent fully vested and non-forfeitable in his
Elective Account at all times, including any Qualified Non-Elective
Contributions and Qualified Matching Contributions.
10.2 Notwithstanding anything in this Plan and Trust to the contrary, for
any Top Heavy Plan Year, a Participant shall be entitled to the percentage
vesting of his Account resulting from Employer Non-Elective Contributions and if
otherwise permitted herein, forfeitures as shown in the following vesting
schedule:
Credited Years Vested
of Service Percentage
-------------- ----------
Less than 1 0%
1 10%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
10.3 For purposes of crediting a Year of Service for vesting, all Years of
Service with the Employer shall be taken into account, except as follows:
(a) In the case of any Employee who has any One-Year Break in Service,
Years of Service before such break shall not be taken into account until
such Employee has completed one Year of Service after such break, computed
from the date of rehire, at which time the one Year of Service waiting
period shall also be counted
(b) For Plan Years beginning after 1984, in the case of a Participant
who has five (5) or more consecutive One-Year Breaks in Service, all
service after such consecutive One-Year Breaks in Service will be
disregarded for the purpose of vesting the Employer-derived Account balance
that accrued before such breaks in service. Such Participant's pre-break
service will count in vesting the post-break Employer-derived Account
balance only if either:
(i) such Participant has any nonforfeitable interest in the
Account balance attributable to Employer contributions at the time of
separation from service; or
(ii) upon returning to service with the Employer the number of
consecutive One-Year Breaks in Service is less than the number of
Years of Service. Separate accounts will be maintained for the
Participant's pre-break and post-break Employer-derived Account
balance. Both Accounts will share in the earnings and losses of the
Trust Fund.
Any Employee whose status changes from being excluded from participation in
the Plan to an Employee eligible to participate in this Plan, shall receive
credit for vesting purposes for all Hours of Service and Years of Service with
the Employer, whether covered or non-covered, subject to the provisions of this
Section. Any Employee whose status changes from being eligible to participate in
this Plan to an Employee excluded from participation shall receive credit for
vesting purposes for all Hours of Service and Years of Service with the
Employer, whether covered or non-covered, subject to the provisions of this
Section.
10.4 After the employment of a Participant is terminated (other than by
reason of attainment of Normal Retirement Date, early retirement, if applicable,
death, or Disability), the Committee shall determine and advise the Trustee of
the percentage of vesting of the Inactive Participant's Account. After
determination of the value of the Inactive Participant's Account, the vested
portion of the Inactive Participant's Account shall be paid to him in accordance
with the Annuity Requirements Section and Distribution Requirements Section.
10.5 No amendment to the vesting schedule shall deprive a Participant of
his nonforfeitable right to benefits accrued to the date of the amendment, or
the date the amendment is effective, if later. Further, if the vesting schedule
of the Plan is amended or, if the Plan is deemed amended by an automatic change
to or from a Top Heavy Plan vesting schedule, each Participant with at least
three (3) Years of Service for vesting purposes (whether or not consecutive and
without regard to Years of Service which may be excluded) with the Employer may
elect, within a reasonable period after adoption of the amendment or change, to
have his nonforfeitable percentage computed under the Plan without regard to
such amendment, or change, unless the Participant's nonforfeitable percentage
computed under the Plan, as amended, at any time cannot be less than such
percentage determined without regard to such amendment. For Participants who do
not have at least one (1) Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by substituting "five
(5) Years of Service" for "three (3) Years of Service" where such language
appears. The period during which the election may be made commences with the
date the amendment is adopted and ends on the later of:
(a) Sixty (60) days after the amendment is adopted;
(b) Sixty (60) days after the amendment becomes effective; or
(c) Sixty (60) days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
Further, no amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's Accrued Benefit. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Code Section 412(c) (8). For purposes of this paragraph,
a Plan amendment which has the effect of decreasing a Participant's Account
balance or eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment shall be treated as reducing an
Accrued Benefit. Furthermore, if the vesting schedule of the Plan is amended, in
the case of an Employee who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's Employer derived
Accrued Benefit will not be less than the percentage computed under the Plan
without regard to such amendments
SECTION 11 - Annuity Requirements
11.1 Notwithstanding anything in this Plan and Trust to the contrary, a
Participant, his spouse or other Beneficiary shall not receive payment of his
Accrued Benefit in any form of a life Annuity, specifically including a joint
and survivor Annuity. Further, if an insurance policy is distributed from the
Plan and Trust, such policy shall not be a life Annuity or contain any life
Annuity conversion option. Nothing in this Plan and Trust shall be construed as
allowing for the purchase or distribution of an Annuity.
SECTION 12 - Distribution Requirements
12.1 Except as otherwise provided in the Annuity Requirements Section, the
requirements of this Distribution Requirements Section shall apply to any
distribution of an Inactive Participant's Accrued Benefit (or active Participant
after attainment of age 70 1/2). Except as provided below, the Trustee shall
commence distribution of the Inactive Participant's (or active Participant's
after attainment of age 70 1/2) Accrued Benefit (to the extent vested) as soon
as reasonably practical after the Valuation Date coinciding with or next
following the Participant's termination of employment, death or attainment of
age 70 1/2, whichever occurs first. Notwithstanding the preceding, if the vested
value of the Inactive Participant's Accrued Benefit (including both Employer and
Employee contributions, if applicable) exceeds $3,500 (or at the time of any
prior distribution exceeded $3,500), the Inactive Participant and, if payment in
the form of an Annuity is permitted in this Plan under Section 11.1, the
Participant's spouse (or the surviving spouse, as the case may be) must consent
to any such distribution if the distribution occurs prior to the Inactive
Participant's Normal Retirement Age or attainment of age sixty-two (62) if later
than Normal Retirement Age. If the distribution occurs after the Participant's
Normal Retirement Age, or attainment of age sixty-two (62) if later than Normal
Retirement Age, the Accrued Benefit shall be distributed without the Inactive
Participant's consent and if applicable, his spouse's consent. Further, if
payment in the form of an Annuity is not permitted in this Plan under Section
11.1, then distribution of the Accrued Benefit upon the Participant's death to
the Participant's spouse (or other Beneficiary, if applicable) shall not require
the spouse's (or other Beneficiary's) consent. Additionally, in the event the
date for commencing initial payment of benefits specified above would not occur
until after the April 1 following the calendar year the Participant attains age
70 1/2, then nevertheless distribution shall commence prior to such April 1 for
such Participant so as to not violate Code Section 401(a) (9). Further, if the
vested value of the Inactive Participant's Accrued Benefit is $3,500 or less,
the Trustee shall distribute the Accrued Benefit without the Participant's
consent. If the Inactive Participant (or his spouse if payment in the form of an
Annuity is permitted in this Plan under Section 11.1) does not initially consent
to the distribution, the Inactive Participant's Accrued Benefit shall not again
be available for distribution until after the Valuation Date following the
earlier of the Inactive Participant's consent, death or Normal Retirement Date.
If this Plan terminates and this Plan does not provide for payment of
benefits in the form of an Annuity under Section 11.1, then the Participant's
Accrued Benefit may be distributed without the Participant's consent if the
Employer (or any entity within the same controlled group as the Employer) does
not maintain another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975 (e) (7)). If another defined
contribution plan is so maintained, the Participant's Accrued Benefit may be
transferred without the Participant's consent to such other plan if the
Participant does not consent to the immediate distribution from this Plan. If
this Plan does provide for payment of benefits in the form of an Annuity under
Section 11.1 and the Plan terminates, then the Plan shall purchase and
distribute deferred Annuities as required in the Annuity Requirements Section
unless the Participant and his spouse (if applicable) properly elect another
form of payment as provided above.
12.2 Subject to the Annuity Requirements Section, a Participant's Accrued
Benefit may be distributed in one of the following forms of payment as the
Participant directs the Trustee after the Participant is otherwise eligible for
payment.
(a) lump sum payment of the Accrued Benefit
(b) installment payments
Distributions made in installment payments (if installment payments are
otherwise specifically permitted above) may be made over one of the following
periods:
(a) a period certain not extending beyond the life expectancy of the
Participant; or
(b) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and his designated Beneficiary.
Any distributions from a Participant's self-directed Account which is
invested in Employer Stock pursuant to Section 23 may be made in whole shares of
Employer Stock, as the Participant shall elect.
All distributions under this Distribution Requirements Section shall comply
with the requirements of Code Section 401(a) (9) and the regulations thereunder
including the minimum incidental benefit requirement of Regulation 1.401(a)
(9)-2
12.3 Subject to the Annuity Requirement Section, the requirements of this
Distribution Requirements Section shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent provisions
of this Plan. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's required beginning date.
As of the first distribution calendar year, distributions, if not made in a
single lump sum (if otherwise permitted herein), may only be made over one of
the following periods (or a combination thereof)
(i) the life of the Participant,
(ii) the life of the Participant and a designated beneficiary,
(iii) a period certain not extending beyond the life expectancy of the
Participant, or
(iv) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a designated beneficiary.
If the Participant's Accrued Benefit is to be distributed in other than a
single lump sum (if otherwise permitted herein), the following minimum
distribution rules shall apply on or after the required beginning date:
(a) If a Participant's benefit is to be distributed over (i) a period
not extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the Participant's
designated Beneficiary or (ii) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with distributions for the
first distribution calendar year, must at least equal the quotient obtained
by dividing the Participant's benefit by the applicable life expectancy.
(b) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated Beneficiary, the method of
distribution selected must assure that at least fifty (50%) percent of the
present value of the amount available for distribution is paid within the
life expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the amount
to be distributed each year, beginning with distributions for the first
distribution calendar year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of (i) the applicable life
expectancy or (ii) if the Participant's spouse is not the designated
Beneficiary, the applicable advisor determined from the table set forth in
Q&A4 of Section 1.401(a) (9)-2 of the regulations. Distributions after the
death of the Participant shall be distributed using the applicable life
expectancy in (a) above as the relevant advisor without regard to
regulations Section 1.401(a) (9)-2.
(d) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's
required beginning date. The minimum distribution for other calendar years,
including the minimum distribution for the distribution calendar year in
which the Employee's required date occurs, must be made on or before
December 31 of that distribution calendar year.
If the participant's benefit is distributed in the form of an Annuity
purchased from an insurance company, distributions thereunder shall be made
in accordance with the requirements of Code Section 401(a) (9) and the
proposed regulations thereunder.
Upon the death of the Participant, the following distribution
provisions shall apply:
(e) If the Participant dies after distribution of his Accrued Benefit
has begun, the remaining portion of such Accrued Benefit will continue to
be distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
(f) If the Participant dies before distribution of his Accrued Benefit
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death, except to the extent that an
election is made to receive distributions in accordance with (i) or (ii)
below:
(i) If any portion of the Participant's interest is payable to a
designated Beneficiary, distributions may be made over the life or
over a period certain not greater than the life expectancy of the
designated Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in which the
Participant died.
(ii) If the designated Beneficiary is the Participant's surviving
spouse, the date distributions are required to begin in accordance
with (i) above shall not be earlier than the later of (1) December 31
of the calendar year immediately following the calendar year in which
the Participant died and (2) December 31 of the calendar year in which
the Participant would have attained age 70 1/2.
(g) If the Participant has not made an election pursuant to this
Section 12.3 by the time of his death, the Participant's designated
Beneficiary must elect the method of distribution no later than the earlier
of (i) December 31 of the calendar year in which distributions would be
required to begin under this Section, or (ii) December 31 of the calendar
year which contains the fifth anniversary of the date of death of the
Participant. If the Participant has no designated Beneficiary, or if the
designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(h) For purposes of this Section 12.3, if the surviving spouse dies
after the Participant, but before payments to such spouse begin, the
provisions of this Section above, with the exception of paragraph (f) (ii)
therein, shall be applied as if the surviving spouse were the Participant.
(i) For purposes of this Section 12.3, any amount paid to a child of
the Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when the child
reaches the age of majority.
(j) For the purposes of this Section 12.3, distribution of a
Participant's interest is considered to begin on the Participant's required
beginning date (or, if paragraph (h) above is applicable, the date
distribution is required to begin to the surviving spouse pursuant to
paragraphs (f) and (g) above). If distribution in the form of an Annuity
irrevocably commences to the Participant before the required beginning
date, the date distribution is considered to begin is the date distribution
actually commences.
When used in this Distribution Requirements Section, the following
terms shall have the indicated meanings:
(k) "Applicable life expectancy" shall mean the life expectancy (or
joint and last survivor expectancy) calculated using the attained age of
the Participant (or designated Beneficiary) as of the Participant's (or
designated Beneficiary's) birthday in the applicable calendar year reduced
by one for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being recalculated,
the applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first distribution
calendar year, and if life expectancy is being recalculated such succeeding
calendar year.
(1) "Designated beneficiary" shall mean the individual who is
designated as the Beneficiary under the Plan in accordance with Code
Section 401(a) (9) and the regulations thereunder.
(m) "Distribution calendar year" shall mean a calendar year for which
a minimum distribution is required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar
year immediately preceding the calendar year which contains the
Participant's required beginning date. For distributions beginning after
the Participant's death, the first distribution calendar year is the
calendar year in which distributions are required to begin in this Section
12.3.
(n) "Life expectancy" shall mean the life expectancy and joint and
last survivor expectancy as computed by use of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or spouse, in the case of
distributions described in (f) (ii) above) by the time distributions are
required to begin, life expectancies shall be recalculated annually. Such
election shall be irrevocable as to the Participant (or spouse) and shall
apply to all subsequent years. The life expectancy of a non-spouse
Beneficiary may not be recalculated.
(o) "Participant's benefit" shall mean:
(i) The Account balance as of the last Valuation Date in the
calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions
or forfeitures allocated to the Account balance as of dates in the
valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation
Date.
(ii) For purposes of (i) above, if any portion of the minimum
distribution for the first distribution calendar year is made in the
second distribution calendar year on or before the required beginning
date, the amount of the minimum distribution made in the second
distribution calendar year shall be treated as if it had been made in
the immediately preceding distribution calendar year.
(p) "Required beginning date" shall mean:
(i) Except as provided in (ii) below, the required beginning date
of a Participant is the first day of April of the calendar year
following the calendar year in which the Participant attains age 70
1/2.
(ii) The required beginning date of a Participant who attains age
701/2 before January 1,1988, shall be determined in accordance with
(1) or (2) below:
(1) The required beginning date of a Participant who is not
a five percent owner is the first day of April of the calendar
year following the calendar year in which the later of retirement
or attainment of age 702/2 occurs.
(2) The required beginning date of a Participant who is a
five percent owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(I) the calendar year in which the Participant attains
age 701/2, or
(II) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a
five percent owner, or the calendar year in which the
Participant retires.
The required beginning date of a Participant who is not
a five percent owner who attains age 701/2 during 1988 and
who has not retired as of January 1,1989, is April 1,1990.
(iii) A Participant is treated as a five percent owner for
purposes of this Section if such Participant is a five percent owner
as defined in Section 416(i) of the Code (determined in accordance
with Section 416 but without regard to whether the plan is a Top-Heavy
Plan) at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 661/2 or any subsequent
Plan Year.
(iv) Once distributions have begun to a five percent owner under
this Section, they must continue to be distributed, even if the
Participant ceases to be a five percent owner in a subsequent year.
The provisions set forth in this Section 12.3 will take
precedence over any inconsistent provisions in this Plan and Trust.
12.4 Distribution of the Accrued Benefit to a Participant who is a Five
(5%) Percent Owner, and for Plan Years beginning after December 31, 1988, all
Participants, must commence no later than the first day of April following the
calendar year in which a Participant attains age 7Q 1/2. Except as otherwise
provided in the preceding sentence, no distribution of an Employee's Accrued
Benefit derived from Employer contributions shall be made while the Employee is
employed with the Employer. Further, unless the Participant elects otherwise,
payment of Accrued Benefits must begin not later than the sixtieth (60th) day
after the close of the Plan Year in which the latest of the following events
occur: (a) the Participant attains age 65 (or Normal Retirement Age, if
earlier), (b) the occurrence of the tenth anniversary of the year in which the
Participant commences participation in the Plan, or (c) the Participant
terminates his service with the Employer.
12.5 For Plan Years beginning after 1984, a Participant shall not incur a
forfeiture until he has five (5) consecutive One-Year Breaks in Service.
Notwithstanding the preceding sentence or anything in this Plan to the contrary,
a Participant who terminates employment with the Employer pursuant to this
Section and receives (or is deemed to receive) a distribution of his Account
prior to incurring five (5) consecutive One-Year Breaks in Service f or Plan
Years beginning after 1984, shall forfeit amounts that are not nonforfeitable
immediately subsequent to such distribution. However, if the Participant returns
to the employment of the Employer before five (5) consecutive One-Year Breaks in
Service for Plan Years beginning after 1984, any amounts so forfeited shall be
reinstated to the Participant's Account within a reasonable time after repayment
by the Participant of the amount of the distribution. Such repayment must be
made
(a) in the case of a payment on account of separation from service
before the earlier of
(i) five (5) years after the first date on which the Participant
is subsequently re-employed by the Employer, or
(ii) the close of the first period of five (5) consecutive
One-Year Breaks in Service commencing after the withdrawal; or
(b) in the case of any other withdrawal, within five (5) years after
the date of withdrawal.
For purposes of this Section, if the value of an Employee's vested Account
balance is zero, the Employee shall be deemed to have received a distribution of
such vested Account balance. If an Employee is deemed to receive a distribution
pursuant to the preceding sentence and the Employee resumes employment covered
under this Plan before the date the Participant incurs five (5) consecutive
One-Year Breaks in Service, upon the re-employment of such Employee, the
Employer-derived Account balance of the Employee will be restored to the amount
on the date of such deemed distribution. A Participant's vested Account balance
shall not include accumulated deductible Employee contributions within the
meaning of Code Section 72(o) (5) (B) for Plan Years beginning prior to January
1,1989.
Notwithstanding anything in this Plan and Trust to the contrary, to
reinstate the Participant's Account, the Trustee, to the extent necessary, shall
allocate to the Participant's Account
(a) first, the amount, if any, of Participant forfeitures for the Plan
Year which would otherwise be allocated under the Allocation of
Contributions and Forfeiture Section; and
(b) second, the Employer contribution for the Plan Year to the extent
made under a discretionary formula.
12.6 In the event of a qualified domestic relations order (as defined in
Code Section 414(p)), distribution shall be made to the alternate payee pursuant
to the order at any time, irrespective of whether the Participant has attained
his earliest retirement age under the Plan. A distribution to an alternate payee
prior to the Participant's attainment of earliest retirement age is available
only if
(a) the order specifies distribution at that time or permits an
agreement between the Plan and the alternate payee to authorize an earlier
distribution, and
(b) if the present value of the alternate payee's benefits under the
Plan exceeds $3,500, and the order requires, the alternate payee consents
to any distribution occurring prior to the Participant's attainment of
earliest retirement age. Nothing in this Section regarding earlier payment
under a qualified domestic relations order shall be construed or deemed to
permit a Participant a right to receive distribution at a time otherwise
not permitted under this Plan nor does it permit the alternate payee to
receive a form of payment not permitted under the Plan.
12.7 This Section 12.7 applies to distributions made on or after January
1,1993. Notwithstanding any provision in this Plan and Trust to the contrary
that would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct
rollover.
When used in this Section 12.7, the following terms shall have the
indicated meanings:
(a) "Eligible rollover distribution" shall mean any distribution of
all or any portion of the Accrued Benefit of the distributee, except that
an eligible rollover distribution does not include: any distribution that
is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated Beneficiary, or for a
specified period of ten (10) years or more; any distribution to the extent
such distribution is required under Code Section 401 (a) (9); 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" shall mean an individual retirement
account described in Code Section 408(a), an individual retirement annuity
described in Code Section 438 (b), an annuity plan described in Code
Section 403 (a), or a qualified trust described in Code Section 401(a),
that accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(c) "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
Code Section 414(p) are distributees with regard to the interest of the
spouse or former spouse.
(d) "Direct rollover" shall mean a payment by the Plan to the eligible
retirement plan specified by the distributee.
SECTION 13 - Valuation Upon Distribution
13.1 Upon the Participant's termination of employment, or attainment of age
731/2 while employed with the Employer, the value of the amount credited to the
Inactive Participant's Account (or active Participant after attainment of age
731/2) for payment purposes (if payment is otherwise to commence) shall be
determined as of the Valuation Date coinciding with or next following the date
such termination of employment or attainment of age 701/2, as the case may be,
occurs, If payment is not to commence following the aforesaid Valuation Date,
then the amount credited to the Participant's Account shall be determined as of
the Valuation Date coinciding with or immediately preceding the date payment is
otherwise to commence. The Account shall include the proceeds of any life
insurance policy received as a result of the Participant's death (other than a
key man Employee policy). In the event the Valuation Date specified above would
not occur until after the April 1 following the calendar year following the
Participant attains age 701/2, then a reasonable estimate of the value shall be
used until a final value can be determined so that payment in all events shall
commence prior to such April 1. Except for a Participant's self-directed
investment Account, no earnings or losses of the Trust shall be applied to the
Participant's Account after the value of the Account is determined as provided
above for purposes of paying the Account to the Participant unless the Account
is paid in installment payments over more than one (1) Plan Year (if installment
payments are otherwise specifically permitted herein).
13.2 Where the Trustee is directed by the Inactive Participant to defer
payment of the vested portion of the Inactive Participant's Account for any
period, or where the vested portion of the Account is to be paid in
installments, (if installment payments are otherwise specifically permitted
herein), the Inactive Participant may continue to direct the investment of his
Account pursuant to the Investment Direction By Participant Section.
SECTION 14 - Trustee
14.1 The Trustee xxxxxx accepts the Trust created hereunder and agrees to
carry out its duties and responsibilities hereunder. The Trustee shall serve at
the pleasure of the Employer, or upon such length of term or terms as may be
determined by the Employer. Whenever more than one Trustee serves hereunder, the
decision of a majority of the Trustees shall control, Any documents, including
checks, shall be valid if signed by a majority of the Trustees, or such person
or persons designated in writing by the Trustees. The Trustee shall maintain a
separate Account for each Participant to which will be credited the Employer
contributions and earnings thereon.
14.2 Except as specifically provided for, all contributions voluntarily
paid by or in behalf of the Employer to the Trustee from time to time, and all
contributions voluntarily paid by Participants, and all income and enhancement
shall constitute and be held and administered by the Trustee as a single Trust
Fund; provided, however, that the Trustee may maintain separate trusts and
separate subtrusts subject to the provisions contained herein,
14 .3 The Trustee shall allocate to each Participant his share of the
Employer contributions and if otherwise permitted herein, forfeitures in
accordance with the provisions of this Plan and Trust agreement, based upon the
information furnished by the Committee. The Trustee and the Committee may agree
that the Committee, and not the Trustee, shall be responsible for making such
allocations.
14.4 Except as provided in the Investment Direction By Participant Section,
the Trustee shall invest and reinvest the Trust Fund and keep it invested,
without distinction between principal and income, and without restriction to
properties and securities authorized for investment by trustees under any
present or future law, in any and all common stocks, preferred stocks, bonds,
notes, debentures, mortgages, equipment trust certificates, options and in such
other property, real or personal, investments and securities of any kind, class,
or character, (specifically including any kind or class of savings accounts,
statement account, certificates of deposit, or any other types of deposits of
the Employer if the Employer is a bank or savings and loan association) as the
Trustee may deem advisable and suitable, including, but not limited to,
qualifying Employer securities and qualifying Employer real property,
partnership interests and stock or securities in other companies, any common
trust fund, or funds maintained by the Trustee, insurance policies on the lives
of key Employees of the Employer payable on death to the Trust as beneficiary,
and if the Employer permits, insurance policies on the lives of Participants.
After giving consideration to diversifying the investment of assets, the Trustee
shall not acquire or hold any qualifying Employer securities or qualifying
Employer real property if immediately after such acquisition the aggregate fair
market value of the Employer securities or Employer real property exceeds one
hundred (100%) percent of the fair market value of the Plan assets. The Trustee,
in its discretion, may keep such portion of the Trust Fund in cash or cash
balances as the Trustee from time to time may deem to be in the best interests
of the Plan and Trust. The Trustee is authorized to invest an any type of
deposit of the Trustee provided the Trustee is a bank or savings and loan
association and the deposit earns a reasonable rate of interest. The Trustee
shall apply for and be the owner of the insurance policies. The proceeds of the
insurance policies shall be payable to the Trustee to provide the benefits
required in this Plan. In the case of any conflict between the terms of this
Plan and an insurance policy, then the Plan's provisions shall control. The
Trustee shall, in its discretion, either convert the entire value of any life
insurance contract at or before a Participant's retirement into cash, or
distribute the life insurance contract to the Participant at retirement. In no
event shall any life insurance be continued for the benefit of a Participant
after his retirement.
Notwithstanding anything in this Plan and Trust to the contrary, the
Employer specifically authorizes the Trustee to invest all or any portion of the
assets comprising the Trust Fund in any group trust fund which at the time of
the investment provides for the pooling of the assets of plans qualified under
Code Section 431(a). This authorization applies solely to a group trust fund
exempt from taxation under Code Section 531(a) and the trust agreement of which
satisfies the requirements of Internal Revenue Service Revenue Ruling 81-100.
The provisions of the group trust fund agreement, as amended from time to time,
are by this reference incorporated within this Plan and Trust. The provisions of
the group trust fund shall govern any investment of Plan assets in that fund.
The Employer shall specify in a resolution of its governing body the group trust
funds to which this authorization applies.
Furthermore, the Trustee, for collective investment purposes, may combine
into one (1) trust fund the Trust created under this Plan with the trust created
under any other qualified retirement plan the Employer maintains. However, the
Trustee shall maintain separate records of account for the assets of each Trust
in order to reflect properly each Participant's Accrued Benefit under the
plan(s) in which he is a Participant.
If payment of benefits in the form of an Annuity is otherwise permitted in
this Plan and Trust, any Annuity or insurance contract distributed hereunder
shall comply with the requirements set forth in the Code Section 401(a) (11),
Code Section 417 and the Annuity Requirements Section.
14.5 If the Employer consents to the purchase of life insurance policies
used to provide incidental life insurance for Plan Participants, then the
following limitations shall apply.
(a) If ordinary life insurance contracts are purchased, then less than
fifty (50%) percent of the aggregate Employer contributions allocated to
any Participant will be used to pay the premiums attributable to them.
Ordinary life insurance contracts for these purposes are contracts with
both nondecreasing death benefits and nonincreasing premiums.
(b) No more than twenty-five (25%') percent of the aggregate Employer
contributions allocated to any Participant will be used to pay the premiums
on term life insurance contracts, universal life insurance contracts, and
all other life insurance contracts which are not ordinary life contracts.
(c) The sum of fifty (50%) percent of the ordinary life insurance
premiums and all other life insurance premiums will not exceed twenty-five
(25%) percent of the aggregate Employer contributions allocated to any
Participant.
Premiums on each policy, after taking credit for any policy dividends,
shall be deemed paid from each Participant's Account, and shall be debited
for purposes of allocations under this Plan first to such Participant's
voluntary contribution Account, if any, and then to his other Account. Any
life insurance on the life of a Participant shall not violate the
incidental benefits rule as required under Treasury Department Regulations.
14.6 In addition to the powers conferred by common law or by statute, the
Trustee is authorized and empowered:
(a) To sell, exchange, convey, transfer, or otherwise dispose of any
property held by it, by private contract or at public auction, and no
person dealing with the Trustee shall be bound to see to the application of
the purchase money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition;
(b) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power of
substitution; to exercise any conversion privileges, subscription rights,
or other options and to make any payments incidental thereto; to consent to
or otherwise participate in corporate reorganizations or other changes
affecting corporate securities and to delegate discretionary powers and to
pay any assessments or charges in connection therewith; and, generally, to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property held in the Trust Fund;
(c) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(d) To register any investment held in the Trust Fund in its own name
or in the name of a nominee and to hold any investment in bearer form, but
the books and records of the Trustee shall at all times show that all such
investments are part of the Trust Fund;
(e) To manage, administer, operate, lease for any number of years,
develop, improve, repair, alter, demolish, mortgage, pledge, grant options
with respect to, partition, build entire new structures on, abandon,
foreclose, or otherwise deal with any real property or interest therein at
any time held by it, including specifically, qualifying Employer real
property, using other Trust assets for any of such purposes if deemed
advisable;
(f) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation;
(g) To borrow or raise monies for the purposes of the Trust and for
any sum so borrowed to issue its promissory note as Trustee and to secure
the repayment thereof by pledging all or any part of the Trust Fund, but
nothing herein contained shall obligate the Trustee to render itself liable
individually for the amount of any such borrowing; and no person loaning
money to the Trustee shall be bound to see to the application of the money
loaned or to inquire into the validity, expediency, or propriety of any
such borrowing; and any borrowing against life insurance policies shall be
done on a pro rata basis so as to avoid discrimination; and
(h) To acquire real estate by purchase, exchange, or as the result of
any foreclosure, liquidation, or other salvage of any investment previously
made hereunder; to hold such real estate in such manner and upon such terms
as the Trustee may deem advisable; and to manage, operate, repair, improve,
partition, mortgage, build entire new structures on, or lease for any term
of years any such real estate or any other real estate constituting a part
of the Trust Fund, upon such terms and conditions as the Trustee deems
proper, using other Trust assets for any of such purposes if deemed
advisable.
14.7 Notwithstanding the broad powers granted to the Trustee, the Trustee
and Committee are prohibited from engaging in certain transactions with a
party-in-interest. Such transactions include engaging in (a) selling,
exchanging, or leasing property between the Plan and Trust and a
party-in-interest, except qualifying Employer securities or Employer real
property; (b) loaning or extending credit between the Plan and Trust and a
party-in-interest; (c) furnishing goods, services or facilities between the Plan
and Trust and a party-in-interest; (d) transferring Plan and Trust assets to a
party-in-interest; (e) dealing with the income or assets of the Plan and Trust
for their own benefit; (f) receiving any consideration for their own benefit
from any party dealing with the Plan and Trust in connection with a transaction
involving Plan and Trust assets; or (g) acting in any transaction (in any
capacity) involving a Plan on behalf of a party whose interests are adverse to
the interests of the Plan and Trust, its Participants or Beneficiaries.
14.8 The term "party in interest" means:
(a) any fiduciary (including, but not limited to, any administrator,
officer, Trustee, or custodial), counsel, or employee of the Plan;
(b) a person providing services to the Plan;
(c) an Employer any of whose Employees are covered by the Plan;
(d) an Employee organization any of whose members are covered by the
Plan;
(e) an owner, direct or indirect, of fifty (50%) percent or more of-
(i) the combined voting power of all classes of stock entitled to
vote or the total value of shares of all classes of stock of a
corporation; or
(ii) the capital interest or profits interest of a partnership;
or
(iii) the beneficial interest of a trust or unincorporated
enterprise which is an Employer or an Employee organization described
in subparagraphs (c) or (d).
(f) a relative as defined herein of any individual described in
subparagraphs (a), (b), (c) or (e);
(g) a corporation, partnership, trust or estate of which (or in which)
fifty (50%) percent or more of-
(i) the combined voting power of all classes of stock entitled to
vote, or the total value of shares of all classes of stock of such
corporation; or
(ii) the capital interest or profits interest of such
partnership; or
(iii) the beneficial interest of such trust or estate, is owned,
directly or indirectly, or held by persons described in subparagraphs
(a), (b) (c), (d) or (e);
(h) an officer, director (or an individual having powers or
responsibilities similar to those of officers or directors), or a ten (10%)
percent or more shareholder, or a highly compensated employee (earning ten
(10%) percent or more of the yearly wages of an employer) of a person
described in subparagraphs (b), (c), (d) (e) or (g); or
(i) a ten (10%) percent or more (directly or indirectly in capital or
profits) partner or joint venture of a person described in subparagraphs
(b), (c), (d) (e), or (g). The term "relative" means a spouse, ancestor,
lineal descendant, or spouse of a lineal descendant.
14.9 The Trustee shall keep accurate and detailed records of its
administration of the Trust Fund, which records shall be open to inspection at
all reasonable times by any person designated in writing by the Committee or the
Employer. Within ninety (90) days following the close of each Plan Year (and at
such other times as the Trustee shall determine in its sole discretion), the
Trustee shall value the Trust Fund (exclusive of Employer's contributions and
forfeitures for such Plan Year and segregated Accounts) as of the last day of
such Plan Year, at the current fair market value of the respective assets, but
life insurance policies shall be shown at their carrying value on the books of
the Trustee. As soon as practicable after making such valuation, but not more
than fifteen (15) days thereafter, the Trustee shall file with the Committee a
written report setting forth the valuation made and, in addition, setting forth
all investments made, together with disbursements and receipts and other
transactions effected by it during such Plan Year, and securities and
investments held at the end of such Plan Year, and the cost of each item as
carried on the books of the Trustee.
14.10 Except as provided in the Investment Direction By Participant
Section, any earnings, gains, profits or losses of the Trust Fund since the
immediately preceding Valuation Date shall be credited or debited to the Account
of a Participant (or Inactive Participant as the case may be) as of a particular
Valuation Date in the proportion that such Account of such Participant on such
Valuation Date, exclusive of the Employer's contribution, any forfeitures, if
otherwise permitted herein, and any Employee voluntary contributions, if
otherwise permitted herein, since such immediately preceding Valuation Date,
bears to the total of all such Accounts. Any dividends or credits earned on
insurance contracts (other than a key man Employee policy) will be allocated to
the Participant's Account derived from Employer contributions for whose benefit
the contract is held.
14.11 If a corporate Trustee (other than the Employer) serves hereunder,
then the corporate Trustee shall be paid for its service rendered hereunder
compensation and other charges as agreed by the Employer and the Trustee, but if
no agreement is in effect then as stipulated in its regularly adopted schedules
of compensation in effect and applicable at the time of performance of such
services, together with all reasonable expenses incurred by the Trustee in and
about the execution of its duties hereunder, including counsel fees and
disbursements. Except as provided below, if a non-corporate Trustee serves
hereunder, then the non-corporate Trustee shall be entitled to such reasonable
compensation for services rendered by it as may from time to time be agreed upon
between the Employer and the non-corporate Trustee, together with all reasonable
expenses incurred by the non-corporate Trustee in and about the execution of its
duties hereunder, including counsel fees and disbursements. Unless the Employer
agrees to pay the Trustee for services rendered, such compensation and expenses
shall be charged against and paid out of the Trust Fund and any segregated (or
self-directed) Accounts pro rata among the Participants. If the Employer advises
the Trustee in writing of its determination to make no further contributions to
the Trust Fund, and the Employer decides not to continue payment of the Trustee
compensation and expenses, such compensation and expenses of the Trustee shall
be charged against and paid out of the Trust Fund and any segregated (or
self-directed) Accounts pro rata among the Participants, and a lien for the
payment thereof shall be impressed upon any cash, securities or other property
held by the Trustee hereunder the same to be charged pro rata against the credit
of each Participant. Not-withstanding anything herein to the contrary, no
compensation shall be paid to a fully paid Employee of the Employer or, if a
corporation, to a member of its Board of Directors, for serving as a fiduciary,
but such person may be reimbursed for expenses reasonably incurred.
14.12 The Trustee may consult with counsel, who may be counsel for the
Employer, in respect of any of its duties or obligations hereunder, and the
Trustee shall be fully protected in acting or refraining from acting in
accordance with the advice of such counsel.
14.13 Any determination or action of the Employer pursuant to the
provisions of this Agreement shall be evidenced in writing duly executed by the
Employer and delivered to the Trustee. All authorizations, directions,
instructions, notices, or information given by the Committee to the Trustee
shall be in writing and signed in the name of the members of the Committee or by
such member or representative of the Committee as a majority of it shall specify
in writing. If the Trustee acts in accordance with authorizations, directions,
instructions, notices, or information given to it by the Employer or the
Committee, the Trustee shall be indemnified and held harmless by the Employer,
except for its own gross negligence or willful misconduct.
14.14 If neither the Employer nor the Committee gives authorizations,
directions, instructions, notices, or information to the Trustee, the Trustee
may act without such authorizations, directions, instructions, notices, or
information as it, in its sole discretion, deems advisable and appropriate in
the circumstances for the carrying out of the provisions of this Agreement.
14.15 The Trustee shall not be responsible for the adequacy of the Trust
Fund to meet and discharge any and all payments and liabilities under the Plan.
All persons dealing with the Trustee are released from inquiry into the decision
or authority of the Trustee to act, and from responsibility for the application
of any monies, securities or other property paid or delivered to the Trustee,
The Trustee shall not be obligated to pay interest on uninvested cash balances.
14.16 The Trustee shall not be required to determine, or to make any
investigation to determine, the identity or mailing address of any person
entitled to benefits under this Agreement, and shall have discharged its
obligation in that respect when it shall have sent checks or other papers by
ordinary mail to such persons and addresses as may be furnished to it by the
Committee.
14.17 The Trustee may be removed by the Employer by the delivery to the
Trustee of a written notice duly executed by the Employer to that effect. The
Trustee may resign as Trustee hereunder upon written notice to that effect,
delivered to the Employer. Any such removal or resignation shall become
effective sixty (60) days from the date of the delivery of such written notice,
unless an earlier date is agreed upon by the Employer and the Trustee. In the
event of such removal or resignation (or in the event the office of Trustee
becomes vacant for any reason), a successor Trustee or Trustees shall be
appointed by the Employer and such successor Trustee or Trustees, upon accepting
such appointment by an instrument in writing delivered to the Employer, shall
become vested with all the duties, immunities, powers, privileges and rights as
Trustee hereunder as if it originally had been designated Trustee in this
Agreement. No successor Trustee shall be liable or responsible in any way for
any acts or defaults of any predecessor Trustee, but such successor Trustee
shall be liable only for its own acts and defaults with respect to property
actually received by it as such Trustee. The successor Trustee may accept the
accounting rendered and the assets and property delivered to it by the
predecessor Trustee and shall incur no liability or responsibility to any
Participant or Beneficiary under this Plan and Trust by reason of relying
thereon. The Employer may designate as many Trustees to serve hereunder as it
shall from time to time determine. Upon such appointment and acceptance, the
replaced Trustee shall assign, endorse, convey, deliver and transfer to the
successor Trustee all of the funds, securities and other property then held by
it under this Trust Agreement and such records as may reasonably be required in
order that the successor Trustee may properly administer the Trust hereunder. In
the event of such removal or resignation of any Trustee hereunder, within sixty
(60) days from the date of such removal or resignation such Trustee shall file
with the Employer and with the Committee a statement and report of its Accounts
and proceedings covering the period since the date of its last annual statement
and report to the date of such removal or resignation.
14.18 In the event and to the extent not insured against by any insurance
company pursuant to provisions of any applicable insurance policy, the Employer
shall indemnify and hold harmless any Trustees who are natural persons, their
assistants and representatives, from any and all claims, demands, suits, losses,
damages, and any other liability arising from their responsibilities in
connection with this Plan or Trust, unless the same is determined to be due to
gross negligence or willful misconduct.
14.19 In the event an individual is sole Trustee of this Trust while a
beneficiary of this Trust, then the Employer shall appoint a Co-Trustee to serve
with the individual Trustee immediately before the individual Trustee becomes
the sole beneficiary of the Trust if a merger would occur under state law.
SECTION 15 - Amendment and Termination of Plan
15.1 The Board of Directors of the Employer may amend this Plan and Trust
at any time and from time to time. However, it is the intention of the Employer
and Trustee that this Plan and Trust shall always be a retirement plan and trust
qualified under Code Section 401, et. etg. and this Plan and Trust shall be
interpreted and administered accordingly. Except to the extent permitted in Code
Section 412(c) (8), no amendment shall decrease a Participant's Accrued Benefit
or otherwise violate Code Section 411(d) (6). For purposes of the preceding
sentence, a Plan amendment which has the effect of (a) eliminating or reducing a
subsidy or an early retirement benefit, if applicable, (as defined in Treasury
Regulations), or (b) eliminating an optional form of benefit, with respect to
benefits attributable to service before the amendment, shall be treated as
reducing Accrued Benefits. In the case of a retirement-type subsidy, the
preceding sentence shall apply only with respect to a Participant who satisfies
(either before or after the amendment) the pre-amendment conditions for the
subsidy. Treasury Regulations may provide that this Section shall not apply to a
Plan amendment described in (b) above (other than a Plan amendment having an
effect described in (a) above). Any amendment shall be in writing and shall be
executed by an officer of the Employer. The Trustee and the Plan Administrator
shall be given a copy of the amendment,
15.2 No change may be made in the Plan and Trust which shall vest in the
Employer, directly or indirectly, any control, interest, or ownership in any of
the present or subsequent assets or funds of the Trust, or in any of the present
or subsequent assets or funds set aside for Participants pursuant to this Plan
and Trust.
15.3 No part of the Trust Fund shall, by reason of any amendment, be used
for or directed to purposes other than for the exclusive benefit of Participants
and their Beneficiaries or for administration expenses of the Plan, The corpus
or income of the Trust may not be diverted to or used for other than the
exclusive benefit of the Participants and their Beneficiaries.
15.4 It is the present intention of the Employer to continue this Plan
indefinitely; however, the Board of Directors of the Employer may partially or
completely terminate this Plan, or completely discontinue contributions
hereunder, in which events the Accrued Benefit of all affected Participants in
the Trust Fund shall vest immediately and fully, without forfeiture, Any
complete termination of this Plan shall be in writing. Notice of the complete
termination shall be given to each Participant. In the event the Plan is
terminated, the Accrued Benefit of all Participants shall be distributed to
them, In the event contributions are completely discontinued, the Accrued
Benefit of all Participants may be distributed to them, or the Plan may continue
to operate for the benefit of the Participants pursuant to its terms, in which
case the Accrued Benefits shall be paid upon attainment of Normal Retirement
Date (or early retirement, if applicable), death, Disability, or other
termination of employment as provided in the Plan. Complete discontinuance of
contributions or termination of the Plan by an Employer, including a partial
termination, shall be considered a complete discontinuance of contributions or
termination of the Plan only with respect to that particular Employer.
Suspension of contributions on a temporary basis for reasons of business deemed
adequate by the Employer shall not be considered a complete discontinuance of
contributions or a termination of the Plan.
15.5 In any event, the liabilities of the Employer to make contributions
under the Plan shall automatically terminate upon dissolution of the Employer,
upon its adjudication as a bankrupt, upon its making a general assignment for
the benefit of creditors, or upon its merger or consolidation with any other
corporation or corporations unless the Employer's liabilities to make further
contributions under the Plan are assumed by such other corporation or
corporations.
15.6 In the event of termination of the Employer's liabilities to make
further contributions under this Plan, such liabilities may be assumed by any
other corporation or business organization which employs a substantial number of
the Participants of the Plan. Such assumption of liabilities shall be expressed
in an agreement between such other corporation or business organization and the
Employer. Any Participant under this Plan who does not become an Employee of
such other corporation or other business organization shall have the rights
hereunder of an Employee whose employment terminated by normal retirement, 15.7
In the event of any merger or consolidation with, or transfer of assets or
liabilities to, any other retirement plan of the Employer, its affiliate, or of
any Employer, each Participant in the Plan will (as if the Plan then terminated)
receive a benefit immediately after the merger, consolidation, or transfer which
is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation, or transfer (as if the Plan had
then terminated).
SECTION 16 - Limitation on Benefits and Contributions
16.1 If an Employee is a Participant in one or more defined benefit plans
and one or more defined contribution plans (whether or not terminated)
maintained by the Employer or an Affiliated Employer, the sum of his defined
benefit plan fraction and his defined contribution plan fraction shall not
exceed 1,0 for any year. If the sum of the defined benefit plan fraction in the
Employer's defined benefit plan and the defined contribution plan fraction in
the Employer's defined contribution plan shall exceed 1.0 in any year of any
Participant in this Plan, the Employer shall adjust the numerator of the defined
contribution plan fraction so that the sum of the defined benefit plan fraction
and the defined contribution plan fraction shall not be in excess of 1.0 in any
year for such Participant in the order set forth in Section 5,10.
For the purpose of this Section, the term defined benefit plan fraction for
any year shall mean a fraction the numerator of which is the projected annual
benefits payable to a Participant under all such defined benefit plans as of the
close of the current year and the denominator of which is the lesser of:
(a) the product of 1.25 multiplied by $90,000, (or such other dollar
limitation in effect under Code Section 415(b) (1) (A) for such year), or
(b) the product of 1.4 multiplied by the average Compensation of the
Participant.
Notwithstanding the above, if the Participant was a participant as of the
first day of the first Limitation Year beginning after December 31, 1986, in one
or more defined benefit plans maintained by the Employer which were in existence
on May 6, 1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the Participant
had accrued as of the close of the last Limitation Year beginning before January
1,1987, disregarding any changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code Section 415
for all Limitation Years beginning before January 1,1987.
The term defined contribution plan fraction for any year shall mean a
fraction the numerator of which is the aggregate amount of annual additions
under all such defined contribution plans made to a Participant's Account
balances as of the close of the current 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 Employer:
(a) the product of 1.25 multiplied by. $30,000, (or such other dollar
limitation in effect under Code Section 415(c) (1) (A) for such year,
without regard to Code Section 415(c) (6)), or
(b) the product of 1.4 multiplied by twenty-five (25%) percent of the
Compensation of the Participant.
If the Employee was a participant as of the end of the first day of the
first Limitation Year beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in existence on May 6,
1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (i)
the excess of the sum of the fractions over 1.0 times (ii) the denominator of
this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the plan made
after May 5,1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1,1987.
The annual addition for any Limitation Year beginning before January
1,1987, shall not be recomputed to treat all Employee contributions as annual
additions.
For any Plan Year this Plan is a Top Heavy Plan or a Super Top Heavy Plan,
then 1.0 shall be substituted for 1.25 in both subparagraphs (a) of this
Section. However, 1.25 will continue to be used for any Plan Year that this Plan
is a Top Heavy Plan (but not a Super Top Heavy Plan) provided the minimum
allocation requirements of Code Section 416(c) are increased pursuant to Code
Section 416(h) (2) (A) (ii). Further, if the special minimum allocation of 7
1/2% is provided for in Section 5.6, then 1.25 will continue to be used for any
Plan Year that this Plan is a Top Heavy Plan (but not a Super Top Heavy Plan).
If this Plan and a pre-tax Equity and Fiscal Responsibility Act (TEFRA) defined
benefit plan are aggregated, a permanent adjustment will be made to the
numerator of the defined contribution fraction to insure that the sum of the
defined contribution fraction and defined benefit fraction does not exceed 1.0
as of the effective date of TEFRA. Annual additions in the numerator of the
defined contribution plan fraction shall not exceed annual additions in the
denominator of the defined contribution plan fraction in any year beginning
prior to January 1,1976.
SECTION 17 - Rollovers and Other Transfers
17.1 My Employee may file a written petition with the Committee requesting
that the Trustee accept a rollover contribution from such Employee or a direct
transfer from another qualified plan or individual retirement account. The
Committee, in its sole discretion, shall determine whether or not such Employee
shall be permitted to make a rollover contribution or direct transfer to the
Trust Fund. Any written petition shall set forth the amount of the rollover
amount, the nature of the property in the rollover amount, and a statement,
satisfactory to the Committee, that such contribution constitutes a rollover
amount as defined in this Section. The Trustee shall hold any such contribution
in a segregated Account for the Employee making such contribution. The Employee
shall at all times be one hundred (100%) percent vested in his rollover
contribution and any earnings credited thereon. Unless the Employee is permitted
to self-direct the investment of the rollover amount, the Trustee may invest and
reinvest the rollover amount with the general Trust Fund, in which case it shall
share on a pro-rata basis in any earnings, gains, profits, or losses, or the
Trustee may separately invest such rollover amount in a bank or savings and loan
association, in United States Treasury Bills or Bonds, or other fixed income
securities, or any combination thereof, as the Trustee shall decide, in which
case it shall not share in any earnings, gains, profits, or losses of the Trust
Fund. The Committee shall instruct the Trustee whether the rollover amount is to
be invested as part of the general Trust Fund. Any rollover or transfer shall
meet the requirements of Code Sections 402(a) (5) (E) and 411(d) (6).
17.2 The term rollover amount shall mean any rollover amount or rollover
contribution defined in (a) Code Section 402(a) (5) or Code Section 403(a) (4)
relating to certain lump sum distributions from a Trust or annuity described in
Code Section 401(a) or Code Section 403(a); or (b) Code Section 408(d) (3)
relating to certain distributions from an Individual Retirement Account or an
Individual Retirement Annuity; or (c) Code Section 409(b) (3) (C) relating to
certain distributions from a retirement bond.
17.3 The Trustee may, with the approval of the Committee, receive and hold
as a part of the Trust Fund assets transferred directly from the Trustee or
custodian of any other retirement plan which is qualified under Code Section
401, as amended or superseded, as evidenced by a current favorable determination
letter issued by the Commissioner of Internal Revenue or his proper delegate,
provided such transfer meets the requirements of Code Section 411(d) (6).
17.4 Notwithstanding anything herein to the contrary, unless the
distribution of payments in the form of an Annuity are allowed pursuant to the
Annuity Requirements Section or the transfer does not cause a reduction or
elimination of any Code Section 411(d) (6) protected benefit, this Plan shall
not accept any direct or indirect transfers from a defined benefit plan, money
purchase plan (including a target benefit plan), stock bonus plan,
profit-sharing plan, 401(k) plan or any other qualified plan which would
otherwise have provided for a life annuity form of payment to the Participant.
In order for a transfer not to reduce or eliminate a Code Section 411(d) (6)
protected benefit, the elective transfer provisions under Regulation 1.411(d)-4
must be complied with.
17.5 Any amount transferred or rolled over by an Employee to the Plan under
this Rollovers and Other Transfers Section shall be used to provide additional
benefits to such Employee at the time benefits are otherwise payable under this
Plan; provided, however, that such transferred or rollover amount shall be an
asset of the entire Trust.
SECTION 18 - Miscellaneous Provisions
18.1 The adoption and maintenance of this Plan shall not be deemed to
constitute a contract, express or implied, between the Employer and any Employee
or to be a consideration for, or inducement or condition of, the employment of
any person. Nothing herein contained shall be deemed to give any Employee the
right to be retained in the employ of the Employer or to interfere with the
right of the Employer to discharge any Employee at any time, nor shall it give
the Employer the right to require the Employee to remain in its employ.
18.2 All benefits payable under this Plan shall be paid or provided for
solely from the Trust Fund. Neither the Employer nor the Trustee assumes any
liability or responsibility therefor.
18.3 Headings of Sections are included solely for convenience of reference,
and, if there is any conflict between such headings and the text, the text shall
control.
18.4 As used in this Plan and Trust, the masculine gender shall include the
feminine, and the singular shall include the plural, unless the context clearly
indicates otherwise.
18.5 All legal questions pertaining to the Plan shall be determined in
accordance with the laws of the State of South Carolina, unless pre-empted under
Federal law.
18.6 The right of any Participant or his Beneficiary to any benefit or to
any payment herein or to any separate Account or insurance contract shall not be
subject to alienation, assignment, attachment, garnishment, or other legal or
equitable process, and if such Participant shall attempt to assign, transfer, or
dispose of such right, or should an attempt be made to subject such right to
attachment, execution, garnishment, or other legal or equitable process, such
attempt shall be null and void. The preceding sentence shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a qualified domestic relations order, as defined in
Code Section 414(p), or any domestic relations order entered into before January
1, 1985.
18.7 Every fiduciary of this Plan and Trust shall be bonded to the extent
required by law.
18.8 No provision of this Plan and Trust is purported to relieve any
fiduciary from liability for any responsibilities, obligations, or duties
imposed on such fiduciary by the Employee Retirement Income Security Act of
1974, including any amendments thereto.
SECTION 19 - Voluntary Participant Contributions
19.1 A Participant shall not make, and the Trustee shall not accept,
voluntary Participant contributions in this Plan and Trust,
SECTION 20 - Participant Loans
20.1 The Committee, in accordance with its uniform non-discriminatory loan
policy, may direct the Trustee to make a loan or loans to a Participant, subject
to the limitations contained in this Section and Code Section 72(p), as amended.
The Committee is authorized to establish a loan program to carry out the
provisions of this Participant Loans Section. Loans shall not be made available
to Highly Compensated Employees in an amount greater than the amount made
available to other Employees; provided, however, the Committee may require a
minimum loan amount not greater than $1,000. The loan shall allow for a setoff
of the Participant's Account. In no event shall the total of any such loan to
any Participant when added to the outstanding balance of all other loans from
this Plan, or any other Plan of the Employer, or a related company as defined in
Code Section 72(p) (2) (D), exceed the lesser or
(a) $50,000, reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan during the one (1) year period ending on the
day before the date on which such loan was made over the outstanding
balance of loans from the Plan on the date on which such loan was made, or
(b) one-half (1/2) of the present value of the non-forfeitable Accrued
Benefit of the Employee under the Plan.
For purposes of (b) above the present value of the non-forfeitable Accrued
Benefit shall be determined without regard to any accumulated deductible
Employee contributions as defined in Code Section 72(o) (5) (B).
20.2 Any Participant may apply for a loan from the Plan. For purposes of
this Participant Loans Section, the term Participant includes any Participant or
Beneficiary who is a party in interest (as determined under ERISA 3(14)) with
respect to the Plan, A Participant must apply for each loan in writing with an
application which specifies the amount of the loan desired, the requested
duration for the loan and the source of security for the loan.
20.3 All such loans to a Participant shall charge interest thereon at a
commercially reasonable rate, Periodically, the Committee will determine the
appropriate interest rate by obtaining at least one quote from a financial
institution, as chosen by the Committee, that is in the business of lending
money. If Participants in the Plan live in different geographical regions, the
Committee may establish a uniform commercially reasonable interest rate
applicable to all regions based on information obtained from at least one region
in which Participants live. The Committee must periodically reevaluate interest
rates for loans. A loan shall provide for a fixed rate of interest. The
Committee will determine whether the interest rate is commercially reasonable at
the time it approves the loan and, in the case of the renewal of a loan, at the
time of the renewal. Every loan applicant shall receive a clear statement of the
charges involved in each loan transaction. This statement shall include the
dollar amount and the annual interest rate of the finance charge.
20.4 Any such loan or loans shall be repaid by the Participant in such
manner as the Committee shall determine. In no event shall the repayment of a
loan by its terms exceed five (5) years from the date on which the loan is made,
or the Participant's Normal Retirement Date, whichever is the shorter period of
time. In all circumstances, the Trustee may, in its discretion, require full and
immediate payment of the outstanding loan balance and accrued and unpaid
interest if the Participant dies or his employment terminates for any reason,
Except as provided by Treasury Regulations, payment (principal and interest) of
any loan shall be made in substantially level amortization payments over the
term of the loan (with payments not less frequently than quarterly). Under no
circumstances may the repayment term of any loan be extended beyond its due
date.
20.5 Such loan shall be adequately secured at all times. The Participant
must secure each loan with an irrevocable pledge and assignment of 50% of the
nonforfeitable amount of the borrowing Participant's Accrued Benefit under the
Plan, In the event that the Participant does not repay such loan within the time
prescribed by the Committee, and the loan is secured by the Participant's
Account in the Plan, and the Trustee does not accelerate payment as provided
herein, the Committee may deduct the total amount of such loan or any portion
thereof (including accrued and unpaid interest) from any payment or distribution
(including a distribution occurring as a result of the Participant's death) from
the Trust Fund to which such Participant or his Beneficiary or Beneficiaries may
be entitled; provided, however, that no deduction shall be made from such
Participant's Account until the Participant is entitled to a distribution from
the Plan, In the event that the amount of any such payment or distribution is
not sufficient to repay the remaining balance of any such loan, such Participant
shall be liable for and continue to make payments on any balance still due from
such Participant.
20.6 The Committee will treat a loan in default if:
(a) any scheduled payment remains unpaid more than thirty (30) days;
(b) the making or furnishing of any representation or statement to the
Plan by or on behalf of the Participant which proves to have been false in
any material respect when made or furnished;
(c) loss, theft, damage, destruction, sale or encumbrance to or of any
of the collateral, or the making of any levy seizure or attachment thereof
or thereon; or
(d) death, dissolution, insolvency, business failure, appointment of
receiver of any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceeding under any bankruptcy or
insolvency laws of, by or against the Participant.
The Participant will have the opportunity to repay the loan, resume current
status of the loan by repaying any missed payment plus interest. If the loan
remains in default, the Committee has the option of foreclosing on any security
it holds. Pending final disposition of the note, the Participant remains
obligated for any unpaid principal and accrued interest.
20.7 Each loan to a Participant shall be evidenced by a promissory note
from such Participant for the amount of the loan, including interest, payable to
the order of the Trustee.
20.8 Notwithstanding anything herein to the contrary, no loan shall be made
to a Shareholder-Employee.
20.9 Any interest resulting from a Participant's loan shall be credited to
the Participant's respective Accounts from which the loan originated.
SECTION 21 - Hardship Distributions
21.1 In the discretion of the Committee in accordance with uniform
non-discriminatory principles consistently applied, the Committee, upon
application and consent of an Employee, may direct the Trustee to make a
Hardship distribution to an Employee. The consent shall be obtained within the
ninety (90) day period before the Hardship distribution is made, Under no
circumstances shall a Hardship distribution exceed the aggregate total amount of
the Participant's Deferred Compensation portion in the Participant's Elective
Account as of the Valuation Date coinciding with or immediately preceding the
Hardship withdrawal request. No earnings credited for any period after December
31, 1988 shall be distributed as part of a Hardship withdrawal. Hardship
distributions shall be deemed to be made as of the Valuation Date coinciding
with or immediately preceding the Hardship withdrawal request and the Employee's
Elective Account shall be reduced accordingly
21.2 If an Employee receives a Hardship distribution, then
(i) the Employee may not defer any Compensation in the Plan until
at least twelve (12) months after the Employee receives the Hardship
distribution, and (ii) the Employee shall not make Elective
contributions for the Employee's taxable year immediately following
the taxable year of the Hardship distribution in excess of the
applicable limits under Code Section 402(g) for the next taxable year
less the amount of such Employee's Elective Contributions for the
taxable year of the Hardship distribution.
SECTION 22 - Cash or Deferred Limitations
22.1 No Participant shall be permitted to have Elective Deferrals made
under this Plan, or any other qualified plan maintained by the Employer, during
any taxable year, in excess of the dollar limitation contained in Code Section
402(g) in effect at the beginning of such taxable year.
22.2 A Participant may assign to this Plan any Excess Elective Deferrals
made during a taxable year of the Participant by notifying the Committee in
writing on or before February 15 of the amount of the Excess Elective Deferrals
to be assigned to the Plan. A Participant is deemed to notify the Committee of
any Excess Elective Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plans of this Employer.
Notwithstanding any other provision of the Plan, Excess Elective Deferrals,
plus any income and minus any loss allocable thereto, shall be distributed no
later than April 15 to any Participant to whose Account Excess Elective
Deferrals were assigned for the preceding year and who claims Excess Elective
Deferrals for such taxable year.
When used in this Plan, the following terms shall have the indicated
meanings:
(a) "Elective Deferrals" shall mean any Employer contributions made to
the Plan at the election of the Participant, in lieu of cash compensation,
and shall include contributions made pursuant to a salary reduction
agreement or other deferral mechanism. With respect to any taxable year, a
Participant's Elective Deferral is the sum of all Employer contributions
made on behalf of such Participant pursuant to an election to defer under
any qualified cash or deferred arrangement (CODA) as described in Code
Section 401 (k), any simplified Employee pension cash or deferred
arrangement as described in Code Section 402(h) (1) (B), any eligible
deferred compensation plan under Code Section 457, any plan as described
under Code Section 501 (c) (18), and any Employer contributions made on the
behalf of a Participant for the purchase of an annuity contract under Code
Section 403(b) pursuant to a salary reduction agreement. Elective Deferrals
shall not include any deferrals properly distributed as excess annual
additions.
(b) "Excess Elective Deferrals" shall mean those Elective Deferrals
that are includible in a Participant's gross income under Code Section
402(g) to the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code Section. Excess Elective
Deferrals shall be treated as annual additions under the plan, unless such
amounts are distributed no later than the first April 15 following the
close of the Participant's taxable year.
22.3 Excess Elective Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess Elective
Deferrals is the sum of:
(a) income or loss allocable to the Participant's Elective Deferral
account for the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Elective Deferrals for the year and the
denominator is the Participant's Account balance attributable to Elective
Deferrals without regard to any income or loss occurring during such
taxable year; and (b) ten (10%) percent of the amount determined under (a)
multiplied by the number of whole calendar months between the end of the
Participant's taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such month.
22.4 Qualified Matching Contributions and Qualified Non-Elective
Contributions may be taken into account as Elective Deferrals for purposes of
calculating the Actual Deferral Percentages. In determining Elective Deferrals
for the purpose of the Actual Deferral Percentage test, the Employer shall
include Qualified Matching Contributions and Qualified Non-Elective
Contributions under this Plan or any other plan of the Employer, as provided by
regulations under the Code.
The amount of Qualified Matching Contributions made under the Employer
Non-Elective Contributions and Elective Contributions Section of this Plan and
taken into account as Elective Deferrals for purposes of calculating the Actual
Deferral Percentage, subject to such other requirements as may be prescribed by
the Secretary of the Treasury, shall be: such Qualified Matching Contributions
that are needed to meet the Actual Deferral Percentage test stated in this Cash
or Deferred Limitations Section. The amount of Qualified Non-Elective
Contributions made under the Employer Non-Elective Contributions and Elective
Contributions Section of this Plan and taken into account as Elective Deferrals
for purposes of calculating the Actual Deferral Percentages, subject to such
other requirements as may be prescribed by the Secretary of the Treasury, shall
be: such Qualified Non-Elective Contributions that are needed to meet the Actual
Deferral Percentage test stated in this Cash or Deferred Limitations Section.
22.5 The Actual Deferral Percentage (hereinafter "APP") for Participants
who are Highly Compensated Employees for each Plan Year and the APP for
Participants who are Non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(a) The APP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the APP for Participants who are Non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The APP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the APP for Participants who are Non-Highly
Compensated Employees for the same Plan Year multiplied by 2.0, provided
that the APP for Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-Highly Compensated Employees by
more than two (2) percentage points.
The following special rules shall apply:
(a) The SPP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified Matching Contributions,
or both, if treated as Elective Deferrals for purposes of the APP test)
allocated to his accounts under two or more arrangements described in Code
Section 401(k), that are maintained by the Employer, shall be determined as
if such Elective Deferrals (and, if applicable, such Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both) were made under
a single arrangement. If a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
(b) In the event that this Plan satisfies the requirements of Code
Sections 401 (k), 401(a) (4), or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
Code Sections only if aggregated with this Plan, then this Section shall be
applied by determining the ADP of Employees as if all such plans were a
single plan. For Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Code Section 401(k) only if they have the
same Plan Year.
(c) For purposes of determining the APP of a Participant who is a Five
Percent Owner or one of the ten most highly-paid Highly Compensated
Employees, the Elective Deferrals (and Qualified Non-Elective Contributions
or Qualified Matching Contributions, or both, if treated as Elective
Deferrals for purposes of the APP test) and Compensation of such
Participant shall include the Elective Deferrals (and, if applicable,
Qualified Non-Elective Contributions and Qualified Matching Contributions,
or both) and Compensation for the Plan Year of Family Members (as defined
in Code Section 414 (q) (6)) Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the APP both for Participants who are Non-Highly Compensated
Employees and for Participants who are Highly Compensated Employees.
(d) For purposes of determining the APP test, Elective Deferrals,
Qualified Non-Elective Contributions and Qualified Matching Contributions
must be made before the last day of the twelve-month period immediately
following the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to demonstrate
satisfaction of the APP test and the amount of Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, used in such
test. Qualified Non-Elective Contributions and Matching Contributions may
only be used in the test if they satisfy Regulation 1,401(k)-1(b) (3).
(f) The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
When used in this Plan, the following terms shall have the indicated
meaning:
(a) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (i) the amount of
Employer contributions actually paid over to the Trust on behalf of such
Participant for the Plan Year to (ii) the Participant's Compensation for
such Plan Year. Employer contributions on behalf of any Participant shall
include:
(1) any Elective Deferrals made pursuant to the Participant's
deferral election (including Excess Elective Deferrals of Highly
Compensated Employees), but excluding (a) Excess Elective Deferrals of
Non-highly Compensated Employees that arise solely from Elective
Deferrals made under the plan or plans of this Employer and
(b) Elective Deferrals that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both with and without
exclusion of these Elective Deferrals); and (2) at the election of the
Employer, Qualified Non-Elective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
22.6 Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose accounts such Excess Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than 2 1/2 months after the
last day of the Plan Year in which such excess amounts arose, a ten (10%)
percent excise tax will be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess contributions
attributable to each of such Employees. Excess Contributions shall be allocated
to Participants who are subject to the family member aggregation rules of Code
Section 414(q) (6) among the family members in proportion to the Elective
Contribution of each family member that is combined to determine the Actual
Deferral Percentage in accordance with Treasury regulations.
22.7 Excess Contributions (including the amounts recharacterized if
otherwise allowed herein) shall be treated as annual additions under this Plan.
22.8 Excess Contributions shall be or loss up to the date of distribution.
allocable to Excess Contributions is the adjusted for any income The income or
loss sum of
(a) income or loss allocable to the Participant's Elective Deferral
account (and, if applicable, the Qualified Non-Elective Contribution
account or the Qualified Matching Contributions account or both) for the
Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the denominator is the
Participant's Account balance attributable to Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified Matching Contributions,
or both, if any of such contributions are included in the ALP test) without
regard to any income or loss occurring during such Plan Year; and (b) ten
(10%) percent of the amount determined under (a) multiplied by the number
of whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs
after the 15th of such month.
Excess Contributions shall be distributed from the Participant's Elective
Deferral account and Qualified Matching Contribution account (if applicable) in
proportion to the Participant's Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ALP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's Qualified Non-Elective
Contribution account only to the extent that such Excess Contributions exceed
the balance in the Participant's Elective Deferral account and Qualified
Matching Contribution account. Excess Contributions shall be distributed to
Participants who are subject to the family member aggregation rules of Code
Section 414(q) (6) among the family members in proportion to the Elective
Contribution of each family member that is combined to determine the Actual
Deferral Percentage in accordance with Treasury regulations.
Excess Contributions shall be reduced by the amount of excess Elective
Deferrals already distributed,
When used in this Plan, the following terms shall have the indicated
meanings:
(a) "Excess Contribution" shall mean, with respect to any Plan Year,
the excess of:
(i) The aggregate amount of Employer contributions actually taken
into account in computing the ALP of Highly Compensated Employees for
such Plan Year, over
(ii) The maximum amount of such contributions permitted by the
ALP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with the
highest of such percentages)
22.9 If this Plan and Trust otherwise specifically permit all Participants
to make voluntary non-deductible contributions, then a Participant may treat his
Excess Contributions as an amount distributed to the Participant and then
contributed by the Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly Compensated Employee
to the extent that such amount in combination with other Employee Contributions
made by that Employee would exceed any stated limit under the Plan on Employee
Contributions.
Recharacterization must occur no later than two and one-half months after
the last day of the Plan Year in which such Excess Contributions arose and is
deemed to occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the Participant's
tax year in which the Participant would have received them in cash. Under no
circumstances shall recharacterization be permitted if the Plan and Trust does
not otherwise specifically permit voluntary non-deductible contributions by all
Participants.
22.10 The Employer may make Qualified Matching Contributions to the Plan.
"Qualified Matching Contributions" shall mean Matching Contributions which are
subject to the distribution and nonforfeitability requirements under Code
Section 401(k) when made, Further, after December 31, 1988 Qualified Matching
Contributions may not be distributed to a Participant or Beneficiary because of
Hardship, if Hardship distributions are otherwise specifically permitted in this
Plan and Trust.
22.11 The Actual Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and the ACP
for Participants who are Non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(a) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are Non-Highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the ACP for Participants who are Non-Highly
Compensated Employees for the same Plan Year multiplied by two (2) provided
that the ACP for Participants who are Highly Compensated Employees exceed
the ACP for Participants who are Non-Highly Compensated Employees by more
than two (2) percentage points.
The following special rules shall apply:
(a) If one or more Highly Compensated Employees participate in both a
CODA and a plan subject to the ACP test maintained by the Employer (whether
or not one or more plans exist) and the sum of the ALP and ACP of those
Highly Compensated Employees subject to either or both tests exceeds the
Aggregate Limit, then the ALP of those Highly Compensated Employees who
also participate in a CODA will be reduced (beginning with such Highly
Compensated Employee whose AD? is the highest) so that the limit is not
exceeded. The amount by which each Highly Compensated Employee's
Contribution Percentage Amounts is reduced shall be treated as an Excess
Contribution. The ALP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ALP and ACP tests.
Multiple use does not occur if both the ALP and AC? of the Highly
compensated Employees does not exceed 1.25 multiplied by the ALP and ACP of
the Non-Highly Compensated Employees.
(b) For purposes of this Section, the contribution Percentage for any
Participant who is a Highly Compensated Employee and who is eligible to
have Contribution Percentage Amounts allocated to his account under two or
more plans described in Code Section 401(a), or arrangements described in
Code Section 401(k) that are maintained by the Employer, shall be
determined as if the total of such Contribution Percentage Amounts was
under each plan. If a Highly Compensated Employee made participates in two
or more cash or deferred arrangements that have different plan years, all
cash or deferred arrangements ending with or within the same calendar year
shall be treated as a single arrangement.
(c) In the event that this Plan satisfies the requirements of Code
Sections 401 (m) 401(a) (4) or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this Section
shall be applied by determining the contribution Percentage of Employees as
if all such plans were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in order to satisfy Code Section
401(m) only if they have the same Plan Year.
(d) For purposes of determining the Contribution Percentage of a
Participant who is a Five-Percent Owner or one of the ten most highly-paid
Highly Compensated Employees, the Contribution Percentage Amounts and
Compensation of such participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of Family Members (as defined in
Code Section 414 (q) (6)). Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants who are
Non-Highly Compensated Employees and for Participants who are Highly
Compensated Employees.
(e) For purposes of determining the Contribution Percentage test
Employee Contributions are considered to have been made in the Plan Year in
which contributed to the Trust. Matching Contributions and Qualified
Non-Elective Contributions will be considered made for a Plan Year if made
no later than the end of the twelve (12) month period beginning on the day
after the close of the Plan Year.
(f) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Non-Elective
Contributions or Elective Contributions, or both, used in such test.
Qualified Non-Elective Contributions and Elective Contributions may only be
used in the test if they satisfy Regulation l,401(m)-1(b) (2).
(g) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
When used in this Plan, the following terms shall have the indicated meanings:
(a) "Aggregate Limit" shall mean the sum of (i) 125 percent of the
greater of the ADP of the Non-Highly Compensated Employees for the Plan
Year or the ACP of Nonhighly Compensated Employees under the Plan subject
to Code Section 401(m) for the Plan Year beginning with or within the Plan
Year of the CODA and (ii) the lesser of 200% or two plus the lesser of such
ALP or ACP, For Plan Years beginning before the later of January 1, 1992 or
the date that is sixty (60) days after publication of final regulations
regarding multiple use, the Aggregate limit is increased to the greater of
the Aggregate Limit in the preceding sentence or the sum of 125 percent of
the lesser of (i) the AD? of Non-Highly Compensated Employees for the Plan
Year or the ACP of Non-Highly Compensated Employees under the Plan subject
to Code Section 401(m) for the Plan Year beginning with or within the Plan
Year of the CODA and (ii) the greater of 200% or two plus the greater of
such ADP or ACP.
(b) "Average Contribution Percentage" shall mean the average of the
Contribution Percentages of the Eligible Participants in a group.
(c) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (whether or not the Employee
was a Participant for the entire Plan Year),
(d) "Contribution Percentage Amounts" shall mean the sum of the
Employee Contributions, Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account for purposes of the AD?
test) made under the Plan on behalf of the Participant for the Plan Year.
Such Contribution Percentage Amounts shall include forfeitures of Excess
Aggregate Contributions or Matching Contributions allocated to the
Participant's account which shall be taken into account in the year in
which such forfeiture is allocated. The Employer may include Qualified
Non-Elective Contributions in the Contribution Percentage Amounts. The
Employer also may elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ALP test is met before the Elective
Deferrals are used in the ACP test and continues to be met following the
exclusion of those Elective Deferrals that are used to meet the ACP test.
(e) "Eligible Participant" shall mean any Employee who is eligible to
make an Employee Contribution, or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution (including
forfeitures) or a Qualified Matching Contribution. If an Employee
Contribution is required as a condition of participation in the Plan, any
Employee who would be a Participant in the Plan if such Employee made such
a contribution shall be treated as an eligible Participant on behalf of
whom no Employee Contributions are made.
(f) "Employee Contribution" shall mean any contribution made to the
Plan by or on behalf of a Participant that is included in the Participant's
gross income in the year in which made and that is maintained under a
separate account to which earnings and losses are allocated.
(g) "Matching Contribution" shall mean an Employer contribution made
to this or any other defined contribution plan on behalf of a Participant
on account of an Employee Contribution made by such Participant, or on
account of a Participant's Elective Deferral, under a plan maintained by
the Employer.
22.12 Notwithstanding any other provision of this Plan, Excess Aggregate
Contributions, plus any income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable, distributed no later than the
last day of each Plan Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the preceding Plan Year. Excess
Aggregate Contributions shall be allocated to Participants who are subject to
the family member aggregation rules of Code Section 414(q) (6) among the family
members in proportion to the Employee Contributions and Matching Contributions
of each family member that are combined to determine the Actual Contribution
Percentage in accordance with Treasury regulations. If such Excess Aggregate
Contributions are distributed sore than 2 1/2 months after the last day of the
Plan Year in which such excess amounts arose, a ten (10%) percent excise tax
will be imposed on the Employer maintaining the Plan with respect to those
amounts. Excess Aggregate Contributions shall be treated as annual additions
under the Plan.
Excess Aggregate Contributions shall be adjusted for any income or loss up
to the date of distributions. The income or loss allocable to Excess Aggregate
Contributions is the sum of:
(a) income or loss allocable to the Participant's Employee
Contribution account, Matching Contribution account (if any, and if all
amounts therein are not used in the AD? test) and, if applicable, qualified
Non-Elective Contribution account and Elective Deferral account for the
Plan Year multiplied by a fraction, the numerator of which is such
Participant's Excess Aggregate Contributions for the year and the
denominator is the Participant's account balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during such Plan Year; and (b) ten (10%) percent of the amount
determined under (a) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution, counting the
month of distribution if distribution occurs after the 15th of such month.
Forfeitures of Excess Aggregate Contributions shall be applied to reduce
Employer contributions.
Excess Aggregate Contributions shall be forfeited, if forfeitable or
distributed on a pro-rata basis from the Participant's Employee Contribution
account, Matching Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified Non-Elective
Contribution account or Elective Deferral account, or both).
When used in this Plan, the following terms shall have the indicated
meanings:
(a) "Excess Aggregate Contributions" shall mean, with respect to any
plan Year, the excess of:
(i) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution percentage
actually made on behalf of Highly Compensated Employees for such Plan
Year, over
(ii) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages)
Such determination shall be made after first determining Excess Elective
Deferrals and then determining Excess Contributions.
22.13 In lieu of distributing Excess Contributions, or Excess Aggregate
Contributions, the Employer may make Qualified between investments pursuant to
the terms and conditions of this Investment Direction By Participant Section.
The Trustee shall carry out the Participant's investment direction as soon as
reasonably practical.
The Committee shall have the sole authority for establishing the
investments.
23.2 In the event a Participant does not make a subsequent investment
direction of his Accounts then the prior investment direction shall continue to
apply.
23.3 Any investment direction made by a Participant shall remain in effect
until another valid written direction has been made by the Participant. The
Participant shall be responsible for his investment directions and the
Committee, the Trustee and the Employer shall be relieved of any liability of
any kind therefor. Any investment direction made by a Participant shall apply to
present or future contributions, earnings or losses in such fund until the
investment direction is changed as provided herein. The Participant's directed
investment Accounts shall not share in any earnings, gains, profits or losses of
the Trust Fund, but instead any earnings, gains, profits or losses shall be
credited or debited to the directed investment Accounts as appropriate to
properly reflect such directed investments.
23.4 All investments in the Employer Stock fund shall be made by the
Trustee by purchasing Employer common stock from the Employer or in the open
market at a price per share equal to the prevailing market price at the time of
the purchase, as determined by the Trustee, and if such stock is acquired from
any party in interest (within the meaning of Section 3(14) of ERISA without
payment of any commission. If any options, rights, or warrants shall be granted
or issued with respect to any Employer Stock held in the Employer Stock fund,
the Trustee shall exercise or sell such options, rights, or warrants in the open
market, as directed by the Participants according to their pro-rata investment
in the Employer Stock fund.
Voting rights with respect to any Registration-Type Securities held in
trust shall be passed through to the Participants.
In the event that any Registration-Type Securities held in trust have not
been allocated to the Accounts of the Participants at the time of voting or
Registration-Type Securities held in trust have been allocated to the Accounts
of the Participants at the time of voting but the Participants have failed to
direct on how to vote such shares, the Trustee shall vote the shares.
Notwithstanding the directions by a Participant, the Trustee may, pursuant
to the written directions of the Committee, limit the amount that may be used to
acquire or sell Employer Stock so as to maintain a prudent investment policy for
the Plan.
To the extent that a Participant exercises control over the assets by
directing them toward the purchase of Employer common stock, neither the
Committee, the Trustee nor any other fiduciary shall be liable for any loss or
any breach of fiduciary duties as a result of the Participant's direction to
invest such funds in Employer common stock, other than the responsibilities of
acquiring, holding, and disposing of such qualifying Employer common stock as
directed by the Participant or a Beneficiary.
If a Participant directs investment of any portion of his Account in
Employer common stock, any dividends paid on such common stock shall either be
invested in additional Employer common stock or under uniform rules which the
Committee may establish from time to time. For purposes of this Investment
Direction By Participant Section the following definitions shall apply:
(a) "Registration-Type Securities" shall mean the shares of common
stock of the Employer that are either (i) a class of securities required to
be registered under section 12 of the Securities Exchange Act of 1934 or
(ii) a class of securities which would be required to be so registered
except for the exemption from registration provided in subsection (9) (2)
(H) of such section 12.
(b) "Employer Stock fund" shall mean the investment fund consisting of
the common stock of the Hampshire Group, Limited
SECTION 24 - Withdrawal
24.1 After a Participant attains age sixty-two (62) he may withdraw from
the following Accounts the percentage of the vested portion of the Account
balance indicated:
% of Vested Portion
Account of Account Balance
Elective Account 100%
Non-Elective Account 100%
The amount of the vested portion of the Account balance shall be determined
as of the preceding Valuation Date. Any distribution shall be subject to the
Annuity Requirements Section.
IN WITNESS WHEREOF, the Employer, by its duly authorized officer, and the
Trustee, have caused this amended and restated Plan and Trust Agreement to be
executed as of the day and year first above written.
Witnesses: /s/ Xxxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxx X. Xxxx
HAMPSHIRE GROUP, LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
Its: Vice President
Witnesses: /s/ Xxxxxxx X. Xxxxxxx, Xx.
/s/ Xxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxxxxx, Trustee
/s/ Xxxxxxxx X. XxxXxxxxx, Trustee
/s/ Xxxxxx X. Xxxxxxx, Xx., Trustee
