1
EXHIBIT 10.39
[XXXXXXXXX & XXXXXX LETTERHEAD]
DISCRETIONARY INVESTMENT ADVISORY AGREEMENT
RE: XXXXX ASSOCIATES MONEY PURCHASE PENSION PLAN & TRUST,
----------------------------------------------------------------------------
EFFECTIVE 1/1/91
----------------------------------------------------------------------------
(ACCOUNT NO. 255-31921 )
----------------------------------- ----------------------------
Xxxxxxxxx & Xxxxxx ("N&B"), a New York limited partnership, and the
undersigned ("Client") agree that N&B shall act as sole investment manager with
respect to the Client's above-captioned account ("Account") on the following
terms and conditions:
1. The Account shall consist of such cash, stocks, bonds, options
(where permissible) and other securities which Client places in the Account or
which shall become part of the Account as a result of transactions or otherwise.
Client may make additions to and withdrawals from the Account provided N&B gives
advance approval to additions and receives at least seven business days prior
written notice of withdrawals.
2. N&B shall have full discretion and authority to manage the Account
in accordance with client's investment policy statement.
A partner or employee of N&B who is acceptable to Client shall be
available for periodic meetings with Client regarding the Account.
N&B as Client's agent and attorney in fact and at Client's expense, is
duly authorized without further approval, except as otherwise required by law
(a) to make all investment decisions; (b) to buy, sell and otherwise trade in
securities; and (c) in furtherance of the foregoing, to do that which N&B deems
appropriate, including the submission of instructions to the custodian of the
Account, if any, and the selection of such brokers or dealers as N&B shall
determine.
3. N&B may be used as broker if the use of N&B for that particular
transaction is in accordance with applicable law.
Whether using N&B or others as broker, N&B will seek to obtain the best
results for Client. N&B's selection of a broker will take into account such
relevant facts as (a) price, (b) the broker's facilities, reliability and
financial responsibility, (c) the ability of the broker to effect securities
transactions, particularly with regard to such aspects as timing, order size,
and execution of orders, and (d) the research and other services provided by
such brokers to N&B which are expected to enhance general portfolio management
capabilities, notwithstanding that Client may not be the direct or exclusive
beneficiary of such services. Commission rates,
1
2
being a component of price, is one factor considered together with such other
factors. N&B is authorized to execute Over-the-Counter transactions through
market makers although N&B will charge its posted commissions on such
transactions. Other investment advisers may enter such orders with market
makers in their investment advisory capacity and not generate a
commission for such transactions. Certain institutional accounts and
professional trading accounts do not pay N&B commissions on Over-the-Counter
transactions.
4. For N&B's services as investment adviser to the Account, Client
shall pay N&B an advisory fee based on the rate in Schedule A*. For N&B's
services as broker to the Account, Client shall pay N&B brokerage commissions in
accordance with N&B's applicable posted commission rate, which is summarized in
Schedule B, or based on such higher rate as N&B may subsequently declare to be
its commission rate. *Client written approval will be required prior to any fee
change.
Client acknowledges receipt of Part II of Form ADV, which is filed with
the Securities and Exchange Commission, and which contains information
concerning N&B's full range of services and fees.
5. N&B will promptly send to Client and its Trustee confirmations or
other records confirming all purchases and sales and monthly statements of the
Account valued at market. Upon the written request of Client, copies will be
sent to other persons.
6. N&B and its affiliates manage accounts and perform investment
advisory and brokerage services for others. Particular facts unique to
particular accounts, such as investment objectives and cash availability affect
investment decisions. To the maximum extent permissible, purchases and sales and
investment advice are based upon the judgment of the portfolio manager
supervising the particular account and each portfolio manager is encouraged to
use those investment techniques and methods with which he has been most
successful. N&B, its partners, affiliates, officers and employees may have an
interest in an issue of a security whose purchase or sale is recommended or
which is purchased, sold or otherwise traded for the Account. As a result, N&B
or its affiliates or particular portfolio managers may sell or recommend the
sale of a particular security for certain accounts (including accounts in which
they have an interest) and they or others at N&B or its affiliates may buy or
recommend the purchase of such security for other accounts (including accounts
in which they may have an interest) and accordingly, transactions in a
particular account may not be consistent with transactions in other accounts or
investment recommendations.
2
3
When there is a limited supply of a security, N&B will use its best
efforts to allocate or rotate investment opportunities, but N&B cannot assure
equality among all accounts.
7. With respect to Section 11(a) or the Securities Exchange Act of 1934
and Securities Commission Rule 240.11(a) 2-2T ("Rule"), when N&8 uses itself as
broker to effect a transaction (as defined in the Rule) for the Account on an
exchange of N&B is a member, N&B will transmit the order for such transaction
from off the exchange floor to an independent member of that exchange whom N&B
shall select but who shall execute such order without participation by N&B. N&B
shall obtain all commissions paid by Client to N&B for effecting such
transactions. Out of those commissions, N&B shall pay to all others their
charges for their participation in effecting such transactions.
8. Client and each person signing this agreement on behalf of Client
warrant and represent that:
(a) The Account consists of an employee benefit plan (the
"Plan") covered by Part 4 of Title I of the Employee
Retirement Income Security Act of 1974 (the "Act");
(b) Client has duly authorized the execution and
implementation of this Agreement;
(c) This agreement executed on behalf of Client by persons who
are authorized to transact business on behalf of Client;
(d) The Plan is the owner of all the securities which Client
places in the Account and that there are and will be no
restrictions on the public sale, distribution or ownership of
such securities;
(e) N&B has been duly appointed pursuant to Section 402(c)(3)
of the Act, to manage the assets of the Plan which from time
to time are contained in the Account;
(f) Client will deliver to N&B following:
(i) Instrument of appointment of N&B as investment
adviser by a named fiduciary of Client in the event
this document shall not be sufficient to constitute
same under the terms of the Plan,
(ii) Statement of investment objective of the
Account * attached hereto as an exhibit.
3
4
(iii) Statement of the Plan's income requirement
if it is a factor affecting management of the
Account, and
(iv) If the Account contains less than all of the
assets of the Plan and the other assets may affect
management of the Account, then a statement as to the
effect of the other assets on the management
of the Account with regard to diversification and
other requirements of the Act;
(g) Client shall promptly deliver such information, papers and
documents required or reasonably requested by N&B in
connection with the performance of its duties under the Act
and this Agreement; and
(h) Client shall promptly notify N&B of any change which may
affect the management of the Account.
9. N&B acknowledges (a) its appointment in accordance with the previous
Paragraph, (b) that it is a fiduciary with respect to the Account and (c) that
it is a registered investment adviser under the Investment Advisers Act of 1940.
10. In the absence of instructions from Client, dividends and interest
received will be retained in the Account. If payment of such dividends or
interest is requested, then unless Client otherwise requests, payment shall be
made at the close of the month after such dividends or interest have been
credited to the Account.
11. The term of this agreement shall terminate upon N&B or Client
receiving from the other written notice of termination. If such termination
occurs other than at the end of a quarter, N&B is entitled to receive its
investment advisory fee for the portion of the quarter elapsed prior to
termination.
12. This Agreement may not be assigned by either party without the
written consent of the other. No assignment of this Agreement shall be deemed to
result from changes in the membership of N&B, except as defined in the
Investment Advisor Act of 1940. N&B shall notify the Client in writing of any
changes in its membership within a reasonable time after such change.
13. To the extent federal law does not apply, this Agreement shall be
construed in accordance with and governed by the laws of the State of New York.
14. If the assets of the Account shall be held in the custody of a
bank, trust company or other entity, such custodian shall be selected by the
Client. N&B shall have no responsibility or liability with respect to
4
5
custody arrangements or the acts, omissions or other conduct of the custodian.
15. This Agreement may not be amended or modified in any respect unless
in a writing signed by both parties. If any provision of this Agreement is
declared to be invalid such declaration shall not be deemed to affect the
validity of any of the other provisions.
As set forth above, this Agreement is to be executed on behalf of
Client by persons authorized to transact business on behalf of Client.
Agreed to as of February 18, 1993
------------------------------------------------- ---
CLIENT: XXXXX ASSOCIATES MONEY PURCHASE PENSION PLAN AND TRUST
----------------------------------------------------------------
By: /s/ Xxxxxx X. XxXxxxx (Please sign above line and print
--------------------------------- name and title below line. Use
Xxxxxx X. XxXxxxx additional signature lines if
Trustee necessary.)
By:
---------------------------------
By:
---------------------------------
XXXXXXXXX & XXXXXX
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
General Partner
5
6
SCHEDULE A
COMPUTATION OF THE FULL INVESTMENT ADVISORY FEE
The market value of each of the securities in the account shall be computed as
of the close of trading on the last business day of March, June, September and
December. The Investment Advisory fee for the account for the following quarter
shall be computed on the valuation as of the close of the previous quarter as
follows:
1. For common stocks, convertible bonds, convertible preferred
shares, and all other assets of the account not treated as
permanent fixed income securities, the fee shall be one
quarter of
1 1/2% of the first $500,000 of market value, and
1 1/4% of the next $2,000,000 of market value, and
1% of the next $2,500,000 of market value, and
3/4 of 1% of the balance of the market value.
2. For permanent fixed income securities the fee shall be one
quarter of
1/4 of 1% of the market value of the permanent fixed income securities.
The Investment Advisory fee for each quarter is due at the beginning of
that quarter and Xxxxxxxxx & Xxxxxx shall receive same by debiting
clients account the appropriate amount computed in accordance with the
foregoing.
7
SCHEDULE B
POSTED DISCOUNTED COMMISSION RATE SCHEDULE
(To be charged when full investment advisory fee is elected)
EQUITIES (IN CENTS PER SHARE)
NUMBER
$/SHARE OF SHARES 100 300 500 1,000 1,500 2,000 2,500 5,000 10,000
5.00 0.12 0.12 0.11 0.09 0.08 0.08 0.08 0.07 0.06
10.00 0.18 0.16 0.14 0.14 0.13 0.12 0.11 0.09 0.08
15.00 0.22 0.19 0.19 0.17 0.16 0.14 0.13 0.11 0.09
20.00 0.27 0.25 0.23 0.21 0.18 0.16 0.15 0.12 0.11
25.00 0.31 0.29 0.26 0.23 0.20 0.18 0.16 0.14 0.12
30.00 0.35 0.32 0.30 0.26 0.21 0.19 0.18 0.15 0.14
35.00 0.38 0.36 0.33 0.27 0.23 0.21 0.20 0.17 0.15
40.00 0.41 0.39 0.37 0.29 0.25 0.22 0.21 0.19 0.15
45.00 0.44 0.43 0.39 0.30 0.26 0.24 0.23 0.20 0.16
50.00 0.46 0.46 0.42 0.32 0.28 0.26 0.24 0.22 0.17
60.00 0.52 0.52 0.47 0.35 0.31 0.29 0.27 0.25 0.19
70.00 0.52 0.52 0.50 0.38 0.34 0.32 0.31 0.26 0.20
80.00 0.52 0.52 0.52 0.42 0.37 0.35 0.34 0.28 0.22
90.00 0.52 0.52 0.52 0.45 0.41 0.38 0.37 0.30 0.24
100.00 0.52 0.52 0.52 0.48 0.41 0.42 0.40 0.32 0.26
All comparable accounts electing to pay a full investment advisory fee shall pay
commissions on securities transactions which shall be 40% below Xxxxxxxxx &
Berman's full commission rate. (The full commission rate is 7% above the minimum
New York Stock Exchange rate in effect immediately prior to May 1, 1975).
However, the rate may vary depending upon the nature and size of the
transaction, special services provided, and other unique factors. The above
table indicates the charge in cents per share of typical equity transactions
based on this rate rounded to the nearest xxxxx per share (actual charges will
not be rounded).
DEBT SECURITIES (PER $1,000 PRINCIPAL AMOUNT)
U.S. GOVERNMENT OBLIGATIONS
MATURITY RATE MINIMUM CHARGE MAXIMUM CHARGE
under 1 year $0.25 $15.00 $100.00
1 to 5 years 2.50 on first $50,000 25.00 Negotiated
0.75 over $50,000
5 years & over 3.75 on first $50,000 25.00 Negotiated
1.00 over $50,000
Treasury Xxxx Auction.....$15.00 per ticket
OTHER DEBT SECURITIES
MATURITY RATE MINIMUM CHARGE MAXIMUM CHARGE
under 1 year $0.25 $15.00 $100.00
1 to 5 years 2.50 25.00 Negotiated
5 years & over 3.75 25.00 Negotiated
CONVERTIBLE BONDS-ON TRANSACTIONS IN CONVERTIBLE BONDS, THE COMMISSION CHARGE
WILL BE $5.00 PER THOUSAND
These commission rates may be changed at any time by either providing actual
notice of such change to customer or by sending customer a notice of such change
by first class mail, 10 days in advance of the effective date of such change.
8
INVESTMENT POLICY STATEMENT
REGARDING THE MANAGEMENT OF PENSION FUNDS
XXXXX ASSOCIATES, INC.
I. PERFORMANCE OBJECTIVES
A. The primary objective shall be capital appreciation consistent
with preservation of the funds' capital.
B. On an average annualized basis, it will be our objective that
the equity portion of the pension fund outperform the
benchmark S&P 500 index. On an average annualized basis the
fixed income portion of the pension funds should outperform
the benchmark Shearson Xxxxxx Government bond index.
II. DIVERSIFICATION
A. Based on existing and ongoing economic conditions, as of the
date of this statement, approximately 65% of the total value
of the funds assets will be invested in equities and
approximately 35% in fixed income. This percentage can be
adjusted in accordance with changing economic conditions. The
trustee shall direct the company's contribution in such a
manner as to maintain the established ratio. Xxxxxxxxx &
Xxxxxx, through Xxxx Xxxxxxx, must receive prior approval from
the trustee and the Chairman of the PIC if the percentages on
both the equity and fixed income portion of the portfolio
exceed the given parameters by 10%. For example if Xxxxxxxxx &
Xxxxxx through Xxxx Xxxxxxx decides to invest more than 75% of
the funds in equities, the trustee and the Chairman of the PlC
at Xxxxx Associates must be notified and approval must be
received. The same holds true if Xxxxxxxxx & Xxxxxx through
Xxxx Xxxxxxx decides to invest more than 45% of the portfolio
in fixed income instruments.
B. The number of issues held in the fund will be sufficient to
maintain a reasonably broad base, but not so excessive as to
preclude good management for an enhanced return.
C. No more than 15% of the total cost value of the fund shall be
invested in a four digit coded single industry classification
as delineated in the Standard Industrial Classification
("SIC") standard. The Trustee and Chairman of the PlC must
approve any exceptions.
9
D. No more than 5% of the total value of the fund is to be
invested in any one security. The trustee and the Chairman of
the PlC at Xxxxx Associates must approve any exception.
III. RESTRICTIONS
A. The following types of transactions are prohibited:
1. Short sales, puts, calls or straddles except for such
investments which constitute "covered" puts or calls
or bona fide hedging.
2. Purchase of letter stock or pink sheet stock. All
securities shall be fully negotiable and marketable.
3. Margin purchases or other uses of borrowed funds.
B. No more than 15% of the total cost value of the funds will be
invested in securities traded solely on a stock exchange not
based in the United States. Manager must receive the
written consent of the trustee and the Chairman of the PlC at
Xxxxx Associates prior to going over this limit.
C. If considering the purchase of the stock or debt of the
investment manager 5 organization the money manager must
obtain the written consent of the trustee and the Chairman of
the PlC at Xxxxx Associates.
IV. REPORTING AND ACCOUNT
A. On a semiannual basis the investment manager will be asked to
meet with the PlC and the trustee to review the investment
policy in connection with:
1. the world economy and.related economic events. These
include but are not limited to monetary policy and
international political change.
2. the current and potential future performance of the
equity market.
3. the current plans for investment as well as
disposition of securities as to industry and type of
companies within the industry.
-2-
10
4. the reasons for any changes in the portfolio since
the last meeting.
5. the performance results of the portfolio since the
last period, the last twelve months and since
inception, compared to the benchmark S&P 500 and
Shearson Government Bond Index.
X. Xxxxxxxxx & Xxxxxx through Xxxx Xxxxxxx, in addition to the
usual advices to the trustees will furnish the PlC with copies
of all transactions and confirmation slips.
C. A detailed quarterly report listing the securities held, the
cost of the securities and the market value at date of the
report will be made to the PlC within fifteen days after the
close of the quarter.
-3-
11
TRUST AGREEMENT
under the
XXXXX ASSOCIATES MONEY PURCHASE PENSION PLAN
--------------------------------------------
(name of Plan)
This TRUST AGREEMENT is between XXXXX ASSOCIATES, INC., a Delaware corporation
with its principal office at 000 0xx Xxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"employer") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association with an office at Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000,
as Trustee, to amend and restate the Trust maintained under the Xxxxx Associates
Money Purchase Pension (the Plan), effective as of August 1, 1994. This Trust is
intended to be a qualified trust exempt from tax under Section 501(a) of the
Internal Revenue Code of 1986, as amended.
NOW , THEREFORE, the parties agree as follows:
12
ARTICLE I
---------
GENERAL DUTIES OF THE PARTIES
SECTION 1.1. GENERAL DUTIES OF EMPLOYER.
The Employer shall provide the Trustee with a certified copy of the
Plan and with copies of all amendments promptly upon their adoption and shall
certify to the Trustee the names and specimen signatures of those individuals
responsible for the administration of the Plan (individually and collectively
referred to in this Agreement as the "Administrator"). Each person so certified
to the Trustee as the Administrator shall have full authority to act as the
Administrator for purposes of this Agreement. The Employer shall make its
contributions as the same may be appropriated by due corporate action.
Contributions may be in cash or in other property acceptable to the Trustee. The
Employer shall keep accurate books and records with respect to its employees and
their compensation.
SECTION 1.2. FUNDING POLICY.
From time to time the Administrator shall communicate in writing to the
Trustee, and to any Investment Manager who may have been appointed, the current
funding policy and method that have been established to carry out the objectives
of the Plan.
SECTION 1.3. GENERAL DUTIES OF TRUSTEE.
The Trustee shall hold all property received by it under this Agreement, which,
together with any income, gains and additions, shall constitute the Trust Fund.
The Trustee shall manage, invest and reinvest the Trust Fund (except as
otherwise provided in this Agreement), collect the income, and make payments as
provided in this Agreement. The Trustee shall be responsible only for the
property actually received by it under this Agreement. It shall have no duty or
13
-2-
authority to compute any amount to be paid to it by the Employer or to bring any
action or proceeding to enforce the collection from the Employer of any
contribution to the Trust Fund.
ARTICLE II
----------
INVESTMENT, ADMINISTRATION AND DISBURSEMENT
OF THE TRUST FUND
SECTION 2.1. ELIGIBLE INVESTMENTS FOR THE TRUST FUND.
The Trust Fund may be invested in any real, personal, or mixed
property, regardless of where it is situated and whether or not it is productive
of income or consists of wasting assets. Eligible investments include, without
limitation, common and preferred stocks, bonds, notes, debentures, financial
futures and options, swaps and other derivatives, convertible securities,
mortgages (including, without limitation, any collective or part interest in any
bond and mortgage or note and mortgage), certificates of deposit, demand or time
deposits (including any deposit with the Trustee or an affiliate of the
Trustee), shares of investment companies and mutual funds, interests in
partnerships and trusts, insurance policies and contracts, and oil, mineral or
gas properties, royalties, interests or rights (including related equipment).
Investments shall not be limited to the classes of property in which trustees
are authorized to invest trust funds by any law or rule of any court or state.
Nevertheless, the Trust Fund shall not be invested in any stock or securities of
the Employer or the Company except as permitted by law. Investments may be made
without regard to the proportion any property may bear to the entire amount of
the Trust Fund, provided, however, that, except as otherwise provided in this
Agreement, investments shall be so diversified as to minimize the risk of large
losses unless it is clearly prudent not to do so under the circumstances in the
sole judgment of the Trustee or Investment Manager, as the case may be. Any
property received at any time by the Trustee may be retained in the Trust Fund.
14
-3-
SECTION 2.2. INVESTMENT MANAGEMENT RESPONSIBILITIES OF THE TRUSTEE.
(a) The Trustee shall manage invest, and reinvest the Trust Fund in its
discretion, except to the extent otherwise provided in Sections 2.3 or 2.4.
(b) The Trustee may invest and reinvest any assets under its management
collectively with funds of other pension and profit-sharing trusts exempt from
tax under Section 501(a) of the Internal Revenue Code of 1986, as amended (the
"Code") by reason of qualifying under Section 401(a) of the Code either in short
term obligations selected by the Trustee or by investment collectively with
other funds through the medium of one or more collective investment funds which
have been or may be established and maintained by it or any bank affiliated with
it. Any investment in a collective investment fund shall be subject to the terms
of the instrument or instruments governing the fund.
(c) Any Investment Manager appointed under Section 2.3 may delegate to
the Trustee authority by written authorization to invest any specified portion
of the assets managed by the Investment Manager in the Trustee's sole
discretion, in short term obligations or in one or more mutual funds which
invests primarily in short-term obligations. The Trustee may make these
investments collectively with other funds, including without limitation through
the medium of one or more collective investment funds. Any such collective
investment fund shall be managed by the Trustee or any bank affiliated with it
in its sole discretion.
(d) The Trustee shall have all the investment powers given to trustees
by applicable law. Without limiting this grant of authority, the Trustee shall
have the power:
(i) To sell or exchange any property at public or private
sale for cash or on credit and to grant options for the purchase or exchange of
that property;
(ii) To participate in any plan of reorganization,
consolidation, merger, combination, liquidation or other similar plan relating
to any property held in the Trust Fund, and
15
-4-
to consent to or oppose such a plan or any action under such a plan, or any
contract, lease, mortgage, purchase, sale or other action by any person or
corporation.
(iii) To exercise conversion and subscription rights
pertaining to any property held in the Trust Fund;
(iv) To extend the time of payment of any obligation held in
the Trust Fund.
(v) To enter into stand-by agreements for future investment,
either with or without a stand-by fee; and
(vi) To hold uninvested, without liability for interest
thereon, any moneys received by the Trustee until the same shall be reinvested
or disbursed.
Nevertheless, the Trustee shall exercise these powers only with respect
to assets of the Trust Fund which are under its management or, with respect to
assets which are not under its management, in accordance with the direction of
an Investment Manager, the Administrator, or a Participant, as the case may be.
(e) THE TRUSTEE IS AUTHORIZED TO INVEST ASSETS UNDER ITS MANAGEMENT
FROM TIME TO TIME IN REGISTERED INVESTMENT COMPANIES TO WHICH IT OR AN AFFILIATE
ACTS AS INVESTMENT ADVISER OR PROVIDES OTHER SERVICES. FROM TIME TO TIME THE
TRUSTEE SHALL DETERMINE THE TRUST'S PRO RATA SHARE OF ANY FEES RECEIVED BY THE
TRUSTEE OR ITS AFFILIATES FROM THE INVESTMENT COMPANY FOR SERVICES RENDERED
(WHETHER OR NOT FOR INVESTMENT ADVISORY SERVICES). THE TRUSTEE THEN SHALL REDUCE
THE COMPENSATION PAYABLE TO THE TRUSTEE UNDER THIS AGREEMENT BY AN AMOUNT EQUAL
TO THE TRUST'S PRO RATA SHARE OF THOSE FEES. ALTERNATIVELY, IF THE TRUSTEE AND
THE
16
-5-
ADMINISTRATOR SO AGREE, THE TRUSTEE SHALL WAIVE ITS COMPENSATION UNDER THIS
AGREEMENT FOR THAT PORTION OF THE TRUST FUND WHICH IS INVESTED IN ANY SUCH
INVESTMENT COMPANY FOR THE DURATION OF THE INVESTMENT. NEVERTHELESS, NOTHING IN
THIS SUBSECTION SHALL REQUIRE ANY OFFSET OF THE TRUSTEE'S COMPENSATION OR
REIMBURSEMENT FOR ANY FEE WHICH THE TRUSTEE RECEIVES FROM AN INVESTMENT COMPANY
WITH RESPECT TO AN INVESTMENT MADE BY AN INVESTMENT MANAGER OR THE ADMINISTRATOR
UNDER SECTION 2.3 OR AT THE DIRECTION OF A PARTICIPANT UNDER SECTION 2.4.
(f) Except as provided in the next sentence, the Trustee shall have the
power in its discretion to exercise all voting rights with respect to any
investment held in the Trust Fund and to grant proxies, discretionary or
otherwise. The Trustee shall not exercise its discretion, however, with respect
to voting any securities which are under the management of an Investment
Manager. In that case; the Trustee shall send the Investment Manager all proxies
and proxy materials relating to the applicable securities, signed by the Trustee
without indication of voting preference, and the Investment Manager shall
exercise all voting rights with respect to them. Additionally, except as
otherwise required by law, the Trustee shall not exercise its discretion with
respect to the voting of securities issued by the Employer or any of its
affiliates which are held subject to the direction of Participants (the
"Employer Securities"). The Trustee shall send all proxies and proxy materials
relating to the Employer Securities to the appropriate Participants. Moreover,
unless the Plan provides otherwise, the Trustee shall allocate the votes for any
Employer Securities for which a Participant fails to complete a proxy in
proportion to the Participants' vote of the remaining Employer Securities.
SECTION 2.3. MANAGEMENT BY INVESTMENT MANAGERS OR THE ADMINISTRATOR.
(a) IN GENERAL. From time to time the Administrator shall specify by
written notice to the Trustee whether the investment of the Trust Fund shall be
managed in whole or in part by the Trustee, one or more investment managers
appointed by the Board of Directors of the
17
-6-
Employer (each an "Investment Manager"), or the Administrator. If the investment
management of the Trust Fund is to be shared, the notice shall specify how the
investment responsibility is to be divided with respect to assets, classes of
assets or separate investment funds. Each Investment Manager shall either (i) be
registered as an investment adviser under the Investment Advisers Act of 1940,
(ii) be a bank as defined in that Act, or (iii) be an insurance Employer
qualified to perform investment management services under the laws of more than
one state.
(b) MANAGEMENT BY INVESTMENT MANAGERS.
(i) If investment of the Trust Fund is to be managed in whole
or in part by one or more Investment Managers, the Trustee shall be given copies
of the instruments appointing the Investment Manager, evidencing its acceptance
of the appointment and acknowledging that it is a fiduciary of the Plan, and a
certificate evidencing the Investment Manager's registration under the
Investment Advisers Act. The Trustee may continue to rely upon these instruments
and that certificate until otherwise notified in writing by the Administrator.
(ii) The Trustee shall follow the directions of the Investment
Manager regarding the investment and reinvestment of the Trust Fund, or that
portion of the Trust Fund as shall be under management by the Investment
Manager. The Trustee shall be under no duty or obligation to review any
investment to be acquired, held or disposed of in accordance with those
directions or to make any recommendations with respect to the disposition or
continued retention of any investment under the Investment Manager management.
The Trustee shall have no liability or responsibility for acting without
question on the direction of, or failing to act in the absence of any direction
from, the Investment Manager, unless the Trustee knows that, as a result, it
will be participating in a breach of fiduciary duty by the Investment Manager.
(iii) The Investment Manager at any time and from time to time
may issue orders directly to a broker for the purchase or sale of securities. In
order to facilitate those transactions, the Trustee shall execute and deliver
appropriate trading authorizations upon request. Written or electronic
notification of the issuance of each order given directly to a broker shall
18
-7-
be given promptly to the Trustee by the Investment Manager. The execution of
each order shall be confirmed to the Trustee by the broker. The notification
shall be authority for the Trustee to pay for securities purchased against
receipt and to deliver securities sold against payment, as the case may be.
(iv) If an Investment Manager should resign or be removed by
the Employer, the Employer shall give the Trustee written notice of the
resignation or removal. Upon receipt of the notice, the Trustee shall manage the
investment of the Trust Fund unless and until it shall be notified of the
appointment of another Investment Manager.
(c) MANAGEMENT BY THE ADMINISTRATOR
(i) If the Plan so provides, the Administrator may direct any
or all investments of the Trust Fund, and the Trustee generally shall follow the
directions of the Administrator the investment and reinvestment of any part of
the Trust Fund. Investments made at the direction of the Administrator may
consist to the extent authorized by the plan of investments in group annuity
contracts containing terms and conditions acceptable to the Administrator,
investment companies, collective pension and profit sharing trusts sponsored by
financial institutions not affiliated with the Trustee, real estate investment
trusts, guarantied investment contracts, deposits at banks and other depositor
institutions, and any other investment, provided that, for any investment
directed by the Administrator, the investment is reasonably satisfactory' to the
Trustee from a systems and operations standpoint. The terms and conditions of
the declaration of trust for any such collective pension and profit sharing
trust are incorporated herein by reference. If the Administrator and the
Trustees agree in writing, the Administrator may transmit the funds directly to
third parties such as insurance companies, investment companies, or dealers to
settle any investment transaction directed by the Administrator.
(ii) The Trustee shall be under no duty or obligation to
review any investment to be acquired, held, or disposed of in accordance with
the Administrator's directions or to make any recommendations with respect to
the acquisition, disposition, or continued retention of any
19
-8-
investment directed by the Administrator. Nevertheless, the Trustee may refuse
to comply with any direction of the Administrator, or dispose of any investment
held at the direction of the Administrator and reinvest the proceeds, if it
reasonably determines that it may be required to take such an action under the
Employee Retirement Income Security Act of 1974, as amended ("ERlSA").
(d) NOTWITHSTANDING SECTION 2.2(c), THE TRUSTEE MAY RETAIN, WITHOUT
OFFSET AGAINST ANY FEE OWED TO IT UNDER THIS AGREEMENT, ANY REASONABLE FEES PAID
TO IT, OR TO ANY OF ITS AFFILIATES, BY ANY PERSON FOR THE PROVISION OF
INVESTMENT ADVISORY, SHAREHOLDER SERVICING ADMINISTRATIVE, CUSTODIAL,
SPONSORSHIP, DISTRIBUTION, OR SIMILAR SERVICES TO ANY REGISTERED INVESTMENT
COMPANY, OR TO ANY COLLECTIVE PENSION AND PROFIT-SHARING TRUST WHICH IS EXEMPT
FROM TAX BY REASON OF SECTION 501(a) OF THE CODE, IN WHICH ANY INVESTMENT
MANAGER (OR THE ADMINISTRATOR) MAY INVEST ASSETS OF THE TRUST FUND.
SECTION 2.4. DIRECTION OF INVESTMENTS BY PARTICIPANTS.
(a) If the Plan so provides, Participants may direct the investment of
assets held in their respective individual account or accounts in investment
alternatives selected by the Administrator or set forth in the Plan document or
Plan adoption agreement, as the case may be (each an "Investment Alternative").
The Administrator may select as Investment Alternatives collective investment
funds managed by the Trustee, portfolios of assets managed by the Trustee or an
Investment Manager as the case may be, or other Investment Alternatives
(including registered investment companies) acceptable to the Trustee from an
administration and operations standpoint.
(b) The Trustee may establish rules and procedures from time to time
for the direction of investments by Participants. Instructions provided to the
Trustee in accordance with this
20
-9-
subsection 2.4(b) for the direction of investments shall be deemed a
certification by the Administrator and the Employer that the investment is (i)
in accordance with the terms of the Plan, (ii) in accordance with the investment
instructions of the Participant if provided by the Administrator or some other
person designated by the Administrator on the Participant's behalf and (iii)
complies with applicable law and is otherwise proper. The Trustee shall be fully
protected in relying on the truth of any instruction or representation which
purports to be given in accordance with this subsection and shall have no duty
to investigate the accuracy or authenticity of such an instruction or
representation.
(c) Participants directing their investments shall be solely
responsible for the designation of investments for their individual accounts,
and neither the Trustee nor any Investment Manager shall be responsible or have
any authority with respect to any such designation except for complying with
ERISA and with investment directions provided by the Participants in accordance
with this Agreement and any procedures established by the Trustee. Further,
neither the Trustee nor any Investment Manager shall be obligated to review
investments held in any of these Participants' accounts or be responsible for
the failure of any Participant to diversify investments. Nevertheless, the
Trustee or an Investment Manager, as the case may be, shall remain responsible
under this Agreement for the management of any collective investment fund or
other portfolio of assets selected as an Investment Alternative (other than a
registered investment company) which it manages.
(d) NOTWITHSTANDING SECTION 2.2(e), THE TRUSTEE MAY RETAIN, WITHOUT
OFFSET AGAINST ANY FEE OWED TO IT UNDER THIS AGREEMENT, ANY REASONABLE FEES PAID
TO IT, OR TO ANY OF THE AFFILIATES, BY ANY PERSON FOR THE PROVISION OF
INVESTMENT ADVISORY, SHAREHOLDER SERVICING, ADMINISTRATIVE, CUSTODIAL,
SPONSORSHIP, DISTRIBUTION, OR SIMILAR SERVICES TO ANY REGISTERED INVESTMENT
COMPANY OR TO ANY COLLECTIVE PENSION AND PROFIT-SHARING TRUST WHICH IS EXEMPT
FROM TAX BY REASON OF SECTION 501(a) OF THE CODE WHICH THE ADMINISTRATOR SELECTS
AS AN INVESTMENT ALTERNATIVE.
21
-10-
(e) If the Administrator selects one or more investments managed by the
Trustee as Investment Alternatives, the Trustee shall invest in its discretion
in accordance with Section 2.2, those Trust Fund assets which Participants may
direct from time to time to the alternatives managed by the Trustee.
Nevertheless, the Trustee's investments shall be in accordance with investment
objectives selected by the Administrator and shall be made without regard to the
Trust Fund's other investments on behalf of those Participants. Further, the
Trustee's investments may be made without regard to the proportion any property
may bear to the entire amount of the Trust Fund, provided, however, that
investments within an Investment Alternative managed by the Trustee shall be so
diversified as to minimize the risk of large losses within that Investment
Alternative unless it is clearly prudent not to do so under the circumstances in
the sole judgment of the Trustee.
(f) Investment Alternatives consisting of registered investment
companies for which the Trustee or any of its affiliates acts as investment
adviser shall not be considered to be investment Alternatives managed by the
Trustee for purposes of this Agreement. Neither the Trustee nor any of its
affiliates assumes any fiduciary responsibility to the Trust or the participants
with respect to the management of such a registered investment company except as
may otherwise be provided in the investment advisory agreement with the
investment company or the Investment Company Act of 1940.
(g) If the Employer intends that, with respect to any portion of the
Trust which is invested in accordance with this Section 2.4, the Plan shall
qualify as an o ERISA Section 404(c) Plan,N as that term is defined in
Regulation Section 2550.404c-l of the United States Department of Labor or any
successor to that regulation. The Employer and the Administrator shall be solely
responsible for the Plan satisfying the various criteria set forth in that
regulation for qualification as an ERISA Section 404(c) Plan. Thus, among other
things, the Employer and the Administrator shall be solely responsible for
satisfying the regulation's criteria with respect to selecting a broad range of
investment alternatives among which Participants may designate investments of
their accounts, providing Participants with adequate information concerning the
designated investment alternatives, and restricting the frequency with which
22
-11-
Participants may issue investment instructions.
SECTION 2.5. ADMINISTRATIVE POWERS OF TRUSTEE.
The Trustee shall have power in its discretion:
(a) To cause any investment to be registered and held in the
name of one or more of its nominees, or one or more nominees of any
system for the central handling of securities without increase or
decrease of liability;
(b) To collect and receive any and all money and other
property due to the Trust Fund and to give full discharge for the money
or property;
(c) To settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trust; to commence or
defend suits or legal proceedings to protect any interest of the Trust;
and to represent the Trust in all suits or legal proceedings in any
court or before any other body or tribunal;
(d) To organize under the laws of any state a corporation for
the purpose of acquiring and holding title to any property which it is
authorized to acquire under this Agreement and exercise with respect to
that corporation any or all of the powers set forth in this Agreement:
(e) To manage, operate, repair, improve, develop, preserve,
mortgage or lease for any period any real property or any oil, mineral
or gas properties, royalties, interests or rights held by it directly
or through any corporation, either alone or by joining with others,
using other Trust assets for any of such purposes; to modify, extend,
renew, waive or otherwise adjust any or all of the provisions of any
such mortgage or lease; and to make provision for amortization of the
investment in or depreciation of the value of such property; and
23
-12-
(f) To borrow money from others, to issue its promissory note
or notes, and to secure repayment by pledging any property in its
possession. Nevertheless, no loan or advance shall be made by the
Trustee other than temporary advances to the Trust Funds, on a cash or
overdraft basis, on which no interest is payable.
(g) To employ accountants, actuaries, brokers, appraisers,
counsel and others deemed necessary by the Trustee in its
administration of the Trust, and to pay from the Trust Fund the
reasonable compensation and expenses for such services;
(h) To pay from the Trust fund all expenses of the Plan and
Trust, including all taxes and all reasonable fees and expenses of the
Trust; and
(i) Generally to do all acts, whether or not expressly
authorized, which the Trustee may deem necessary or desirable for the
protection of the Trust Fund.
SECTION 2.6 TRUSTEE'S AUTHORITY.
Persons dealing with the Trustee shall be under no obligation to see to
the proper application of any money paid or property delivered to the Trustee or
to inquire into the Trustee's authority as to any transaction.
SECTION 2.7 PAYMENTS AND DISTRIBUTIONS FROM TRUST FUND.
(a) The Trustee shall make payments, transfers, and distributions from
the Trust Fund in accordance with any written directions of the Administrator.
The Trustee shall not be responsible for the application of any payment,
transfer, or distribution made to a paying agent at such time or times and to
such person or person, including, for example, a paying agent or agents
designated by the Administrator or the Administrator as paying agent. (Any cash
or property so paid or delivered to any paying agent shall be held in trust by
the payee until it is disbursed in accordance with the Plan.) The Trustee shall
comply with directions to transfer and
24
-13-
deliver any part of the Trust Fund to any other trust established for the
purpose of funding benefits under the Plan or under any other plan qualifying
under Section 401 of the Code established for the benefit of Participants in the
Plan or their beneficiaries by the Employer or any successor or transferee of
the Employer, but only if the transfer conforms with the requirements of Federal
law. Neither during the existence nor upon the discontinuance of the Plan shall
any part of the Trust Fund be used for or diverted to purposes other than for
the exclusive benefit of the employees of the Employer or their beneficiaries,
except as provided by law or in Section 7.2. Any written direction of the
Administrator shall constitute a certification that the distribution or payment
so directed is one which the Administrator is authorized to direct.
(b) The Trustee may make any distribution or payment required to be
mailing its check for the specified amount, or delivering the specified
property, to the person to whom such distribution or payment is to be made, at
the address which may have been last furnished to the Trustee. If no such
address shall have been so furnished, the Trustee may make the distribution or
payment to that person in care of the Employer or the Administrator, or (if so
directed by the Administrator) by crediting the account of that person or by
transferring funds to such person's account by bank wire or transfer.
SECTION 2.8. LOANS TO PARTICIPANTS.
If specified in the Plan, the Trustee (or, if loans are treated as
Directed Investments under the Plan, the Administrator) may, in the Trustee's
(or, if applicable, the Administrator's) sole discretion, make loans to
Participants or Beneficiaries as provided in the Plan.
ARTICLE ILL
-----------
ADDITIONAL PROVISIONS RELATING TO THE TRUSTEE
SECTION 3.1. AUTHORITY OF INDIVIDUALS DESIGNATED AS THE ADMINISTRATOR.
25
-14-
(a) The Trustee may continue to rely on the authority of each person
designated by the Employer as the Administrator until notified in accordance
with Section 1.1 that that person has ceased to act in that capacity. If at any
time no Administrator has been appointed, the Board of Directors of the Employer
(or, if the Employer is a partnership, its management committee) shall be deemed
to be the Administrator.
(b) The Administrator may appoint employees of the Employer to act on
its behalf on matters relating to the Trust Fund and this Agreement, and, from
time to time, it shall certify to the Trustee the name or names of any person or
persons so authorized to act. The Trustee may continue to rely on the
authority of a person to act for the Administrator until the Administrator
notifies the Trustee that that person is no longer authorized to act for the
Administrator.
SECTION 3.2. ACTION BY THE EMPLOYER, THE ADMINISTRATOR OR ITS DESIGNATE;
NOTICES.
(a) The Trustee may rely upon any certificate, notice or direction
purporting to have been signed by or on behalf of the Administrator which the
Trustee believes to have been signed by the Administrator or the person or
persons authorized to act for the Administrator. The Trustee also may rely upon
any certificate, notice, or direction of the Employer which the Trustee believes
to have been signed by a duly authorized officer or agent of the Employer.
(b) Communications to the Trustee shall be sent to the Trustee's office
or to any such other address as the Trustee may specify. No communication shall
be binding upon the Trust Fund or the Trustee until it is received by the
Trustee. Communications to the Administrator or to the Employer shall be sent to
the Employer's principal office or to any other address as the Employer may
specify.
SECTION 3.3. ADVICE OF COUNSEL OR ADMINISTRATOR.
The Trustee may consult with any legal counsel, including its internal
legal staff and counsel to the Employer or the Administrator, with respect to
the construction of this Agreement,
26
-15-
its duties, or any act which it proposes to take or omit and shall be protected
fully with respect to any action or omission taken in reasonable reliance on the
advice received. The Trustee may pay the reasonable fees and expenses of any
such counsel (including the allocated cost of internal counsel) from the Trust
Fund.
SECTION 3.4. Responsibility of the Trustee.
(a) The Trustee shall discharge its duties under this Agreement with
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with similar matters
would use in the conduct of an enterprise of a like character and with like
aims. The Trustee shall not be liable for any loss sustained by the Trust Fund
by reason of the purchase, retention, sale or exchange of any investment in good
faith and in accordance with the provisions of this Agreement and of any
applicable Federal law.
(b) The Trustee's duties and obligations shall be limited to those
expressly imposed upon it by this Agreement, notwithstanding any reference to
the Plan.
Section 3.5. INDEMNIFICATION OF THE TRUSTEE.
(a) The Employer shall indemnify, hold harmless, and defend the
Trustee, its affiliates, and their officers, agents and employees from and
against all damages, claims, losses, liabilities, demands, penalties,
obligations, costs, disbursements, and expenses (including, for example,
attorneys' and experts' fees, expenses, and disbursements) which it or they may
receive, suffer or incur, arising out of or resulting from the performance of
the Trustee's responsibilities with respect to the Trust, except to the extent
that the same is determined to be the result of the negligence or wilful
misconduct of the Trustee or its affiliates or their officers, agents, or
employees.
(b) Additionally, the Employer and the Trust, jointly and separately,
shall indemnify, hold harmless, and defend the Trustee, its affiliates, and
their officers, agents and employees from
27
-16-
and against all damages, claims, losses, liabilities, demands, penalties,
obligations, costs, disbursements, and expenses ~including, for example,
attorneys' and experts' fees, expenses, and disbursements) which it or they may
receive, suffer or incur, arising out of or resulting from the performance of
the Trustee's responsibilities with respect to the Trust, except to the extent
that the same is determined to be the result of the negligence or willful
misconduct of the Trustee or its affiliates or their officers, agents, or
employees.
SECTION 3.6. DELEGATION.
The Trustee may delegate its authority (other than the management and
control of the Trust Fund) to one or more persons or entities provided its
delegation is prudent. The Trustee shall not be liable for any error or omission
by any such delegee provided that the delegation was prudent and the Trustee
monitored the performance of the delegee from time to time in a prudent manner.
SECTION 3.7. RETENTION OF THE TRUSTEE AS AGENT.
The Employer, the Administrator or both at any time may employ the
Trustee as agent to perform any act, keep any records or accounts, or make any
computations required of the Employer or the Administrator by this Agreement or
the Plan. Nothing done by the Trustee as agent shall affect its responsibility
or liability as Trustee.
SECTION 3.8. EXPENSES AND COMPENSATION.
The Trustee shall pay from the Trust Fund its reasonable expenses of
management and administration of the Trust including, for example, reasonable
compensation of counsel and of any agents engaged by the Trustee to assist it in
the management and administration of the Trust Fund, to the extent they are not
paid by the Employer. When directed by the Administrator to do so, the Trustee
shall also pay from the Trust Fund any specified expenses of administration of
the Plan. The Trustee shall be entitled to reasonable compensation for its
services as Trustee,
28
-17-
to be paid from the Trust Fund from time to time unless first paid by the
Employer.
ARTICLE IV
----------
RECORDS - SETTLEMENT OF ACCOUNTS
SECTION 4.1. RECORDS.
The Trustee shall keep accurate and detailed accounts of all receipts,
disbursements, investments, and other transactions of the Trust and all
accounts, books and records relating thereto. The Trustee shall not be required
to keep records as to the contributions or earnings or losses of the Trust Fund
credited or debited to individual Participants, or to the benefits to which
individual participants are entitled, except to the extent provided in a
separate written agreement between the Employer and the Trustee. Financial
statements, books and records with respect to the Trust Fund shall be open to
inspection by the Employer or the Administrator or their representatives upon
reasonable notice at all reasonable times during business hours of the Trustee
and may be audited not more frequently than once in each fiscal year by an
independent certified public accountant engaged by the Administrator.
SECTION 4.2. SETTLEMENT OF ACCOUNTS OF TRUSTEE AND ADMINISTRATOR.
(a) Within 90 days after the close of each year, or any termination of
the duties of the Trustee, the Trustee shall prepare, sign and mail to the
Employer an account of its acts and transactions as Trustee. If the Employer
finds the account to be correct, the Employer shall so inform the Trustee in
writing, and the account shall then become an account stated as between the
Trustee and the Employer. If within 90 days after receipt of the account or any
amended account the Employer has neither indicated its acceptance in writing to
the Trustee, nor given the Trustee written notice of any objection to any act or
transaction of the Trustee, the account or amended account shall then become an
account stated as between the Trustee and the Employer.
29
-18-
If any written notice of objection has been sent to the Trustee, and if the
Employer is satisfied that it should be withdrawn or if the account is adjusted
to its satisfaction, the Employer shall so inform the Trustee and it shall
become an account stated as between the Trustee and the Employer.
(b) When an account becomes an account stated, it shall be considered
to be finally settled, and the Trustee shall be completely discharged and
released, as if such account had been settled and allowed by a judgment or
decree of a court of competent jurisdiction in an action or proceeding in which
the Trustee and the Employer were parties.
(c) The Trustee, the Administrator or the Employer shall have the right
to apply at any time to a court of competent jurisdiction for judicial
settlement of any account of the Trustee which has not become an account stated.
It shall be necessary to join as parties only the Trustee, the Administrator and
the Employer (although the Trustee may also join such other parties as it may
deem appropriate). Any judgment or decree entered in such an action or
proceeding shall be conclusive.
(d) The Administrator may also render supplementary or separate
accounts of its proceedings to the Employer. All provisions of this Section
respecting settlement of the accounts of the Trustee shall prevail with respect
to accounts of the Administrator with the same force and effect as if the
Administrator were named wherever the Trustee is named in this Section.
SECTION 4.3. DETERMINATION OF INTERESTS UNDER PLAN OR IN TRUST FUND--ENFORCEMENT
OF TRUST--LEGAL PROCEEDINGS.
The Administrator shall have authority to determine the interests of
all persons in the Trust Fund or under the Plan, and the Trustee shall have no
duty to question any direction given by the Administrator to the Trustee. The
Employer and the Administrator shall have authority, either jointly or
severally, to enforce this Agreement on behalf of all persons claiming any
interest in the Trust Fund or under the Plan.
30
-19-
ARTICLE V
---------
RESIGNATION AND REMOVAL OF TRUSTEE
SECTION 5.1. RESIGNATION OF TRUSTEE.
The Trustee may resign at any time by notifying the Employer in
writing. The resignation shall take effect upon the earlier of the appointment
of a successor under Section 5.3 or 60 days from the date the notice is given.
SECTION 5.2. REMOVAL OF TRUSTEE.
The Board of Directors of the Employer may remove the Trustee at any
time by delivering to the Trustee a written notice of its removal and an
appointment of a successor under Section 5.3. No removal shall take effect prior
to 60 days after the delivery of the notice unless the Trustee agrees to an
earlier effective date.
SECTION 5.3. APPOINTMENT OF SUCCESSOR TRUSTEE.
The appointment of a successor to the Trustee shall take effect upon
deliver' to the Trustee of (a) an instrument in writing appointing the
successor, executed by the Employer, and (b) an acceptance in writing, executed
by such successor, both acknowledged in the same form as this Agreement. The
Employer shall send notice of such appointment to the Administrator. If a
successor is not appointed within 60 days after the Trustee gives notice of its
resignation pursuant to Section 5.1, the Trustee or the Administrator may apply
to any court of competent jurisdiction for appointment of a successor. All of
the provisions set forth in this Agreement with respect to the Trustee shall
relate to each successor with the same force and effect as if the successor had
been originally named as Trustee.
31
-20-
SECTION 5.4. TRANSFER OF FUND TO SUCCESSOR.
Upon the resignation or removal of the Trustee and appointment of a
successor, and after the final account of the Trustee has been settled as
provided in Article IV, the Trustee shall transfer and deliver the Trust Fund to
the successor.
ARTICLE VI
DURATION AND TERMINATION OF TRUST--AMENDMENT
SECTION 6.1. DURATION AND TERMINATION.
This Trust shall continue for as long as may be necessary to accomplish
the purpose for which it was created, but it may be terminated at any time by
the Employer by action of its Board of Directors. Notice of the termination
shall be given to the Trustee by an acknowledged instrument in writing executed
by the Employer, together with a certified copy of the resolution of the Board
of Directors of the Employer authorizing the termination.
SECTION 6.2. DISTRIBUTION UPON TERMINATION.
If this Trust is terminated, the Trustee shall liquidate the Trust Fund
to the extent required for distribution upon the written direction of the
Administrator. After the Trustee's final account has been settled as provided in
Article IV, the Trustee shall distribute the net balance of the Trust Fund in
accordance with the directions of the Administrator, or in the absence of the
Administrator's direction, as may be directed by a judgment or decree of a court
of competent jurisdiction. Upon making the distributions, the Trustee shall be
relieved from all further liability. The powers of the Trustee under this
Agreement shall continue so long as any assets of the Trust Fund remain in its
hands.
32
-21-
SECTION 6.3. AMENDMENT.
The Employer shall have the right at any time and from time to time to
amend this Agreement in whole or in part by an acknowledged written instrument
delivered to the Trustee executed in accordance with the order of the Employer's
Board of Directors. No amendment shall affect the rights and responsibilities of
the Trustee without its written consent. Further, no amendment to this Agreement
shall divert any part of the Trust Fund to purposes other than the exclusive
benefit of the employees of the Employer or their beneficiaries. Any amendment
shall become effective upon (i) delivery to the Trustee of the written
instrument of amendment, together with a certified copy of the resolution of the
Board of Directors of the Employer authorizing the amendment, and (ii)
endorsement of receipt by the Trustee on the instrument, together with its
consent, if that consent is required.
ARTICLE VII
-----------
MISCELLANEOUS
SECTION 7.1. GOVERNING LAW.
This Agreement and the Trust hereby created shall be construed and
regulated by the laws of the State of New York, except as those laws are
superseded by ERISA or other Federal law.
SECTION 7.2. REORGANIZATION OF TRUSTEE.
Any corporation into which the Trustee may be merged or with which it
may be consolidated, or any corporation resulting from any merger,
reorganization or consolidation to which the Trustee may be a party, or any
corporation to which all or substantially all the pension trust business of the
Trustee's Regional Banking line of business may be transferred, shall be the
successor of the Trustee under this Agreement, without the execution of any
instrument or the performance of any further act.
33
-22-
SECTION 7.3. HEADINGS
Section names and other headings are included only for purposes of easy
reference and shall not affect the meaning of any provision of this Agreement.
SECTION 7.4. COUNTERPARTS
The parties may execute separate counterparts of this Agreement which,
when taken together, shall constitute one Agreement.
IN WITNESS WHEREOF, The Company and The Chase Manhattan Bank, N.A. have
caused this Agreement to be executed by their duly authorized officers on the
dates set by their respective signatures.
THE TRUSTEE THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
BY: /s/ Xxxxxxxx Xxxxx
------------------------------
ATTEST: /s/ Xxxxx Xxxxxx ITS: Assistant Treasurer
------------------ -----------------------------
DATED: 8/18/94
---------------------------
THE EMPLOYER
BY: /s/ Xxxxxx X. XxXxxxx
------------------------------
ATTEST: /s/ Xxxxxxx X. Xxxxxxxx ITS: Xxxxxx X. XxXxxxx, President
------------------------ -----------------------------
DATED: 8/9/94
----------------------------
34
[XXXXX ASSOCIATES, INC. LETTERHEAD]
July 15, 1997
Xxxxx Xxxxxx
Implementation Project Manager
Fidelity Investments
000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Dear Xxxxx:
Attached please fin the Addendum to Articles I, II, III and IV of the Corporate
Plan Service Agreement relating to payment of expenses.
Please call me if you have any questions at (000)000-0000.
Sincerely,
/s/ Xxxx Xxxxx Xxxxx
Xxxx Xxxxx Xxxxx
Director, Employee Benefits
35
XXXXX ASSOCIATES 401(k) SAVINGS PLAN
ADDENDUM TO ARTICLES I, II, III AND IV OF
THE CORPORATEplan (sm) SERVICE AGREEMENT
EXPENSES OF THE PLAN WILL BE:
TYPE OF FEE PAID BY CHARGED TO
----------- EMPLOYER PARTICIPANT
(on a flat $ basis)
1. SET-UP X
2. CONVERSION X
3. ADMIN. SERVICE - Base X
4. ADMIN. SERVICE - Per
Participant X
5. ADDITIONAL INVESTMENT FUND X
6. RETURN OF EXCESS CONTRIBUTION X *
7. EMPLOYEE COMMUNICATIONS X
8. PARTICIPANT LOAN SET-UP X *
9. PARTICIPANT LOAN - ANNUAL X *
10. TRUSTEE FEE X
* Charged only to affected participants
--------------------------------------------------------------------------
NOTE: The Employer shall consult with their attorney to determine if the above
expenses are reasonable expenses of the Plan under Sections 403(c)(1) AND
404(a)(1)(A) of the Employee Retirement Income Security Act of 1974. This form
will serve as notification to Fidelity of the party responsible for paying the
Fidelity fees of the Employer's Plan.
ACCEPTED BY: FIDELITY MANAGEMENT TRUST COMPANY,
AS TRUSTEE:
BY: /s/ N.E. Paciotti BY:
---------------------------------- --------------------------------
TITLE: Chief Financial Officer TITLE:
------------------------------- -----------------------------
DATE: 7/15/97 DATE:
-------------------------------- -------------------------------
36
SERVICE AGREEMENT
PROFIT SHARING/401(k) PLAN
This Agreement is between Fidelity Management Trust Company ("Fidelity") and
Xxxxx Associates, Inc.
--------------------------------------------------------------------------------
(the "Employer"), who maintains the Plan designated below.
PLAN NAME: Xxxxx Associates 401(k) Savings Plan & Trust
------------------------------------------------
------------------------------------------------
IMPLEMENTATION DATE:
------------------------------------------------
NUMBER OF ELIGIBLE EMPLOYEES: 188
------------------------------------------------
SELECT ONE: [ ] Start Up Plan
[x] Conversion Plan or Start Up plan with
assets transferred from another plan
- ARTICLE I. IMPLEMENTATION SERVICE FEES:
SET UP FEE:
Includes:
- Camera-ready copy of all relevant Administrative Forms
- Employee Communication Materials
- Fidelity Retirement Services Workbench software and Reference
Manuals
- Implementation Conference Call - Issues covered include
electronic data transmission, contribution processing cycles,
ordering communication materials, plan administrative needs,
plan profile, project timetables, and resource coordination.
- One Administrative Manual
- One original Summary Plan Description
- Prototype plan document (updated as required to ensure
compliance with the Internal Revenue Code)
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 1
37
CONVERSION FEE: $ 0 *
(For Conversion Plans or Start-up Plans with Assets Transferred
From Another Plan)
Includes:
- Establishment of historical data on the Fidelity Participant
Recordkeeping System (FPRS)
- Implementation Meeting, if necessary - Issues covered include
data transmission, contribution processing cycles, plan
administrative needs, plan profile, project timetables, and
resource coordination
- Preparation of Participant and plan records for FPRS
- Reconciliation of all conversion data
- Transfer of assets from current Trustee
*To be completed and initialed by a Fidelity-Representative.
- ARTICLE II. ADMINISTRATIVE SERVICE FEES:
ANNUAL FEES (SUM OF (1) THROUGH (4)):
(1) BASE FEE $2,000
(2) PER PARTICIPANT FEE:
Contributions will be remitted to Fidelity via wire transfer
on a (select one):
--
x Monthly (or less frequent) Cycle $28 per Participant
--
--
Biweekly or Semimonthly Cycle $35 per Participant
--
--
Weekly Cycle $40 per Participant
--
The minimum fee under Sections (1) and (2) is $4,500 except if
the Employer elected a biweekly, semimonthly or weekly
contribution cycle. If a biweekly or semimonthly cycle is
selected then the minimum fee is $4,500 plus an additional $7
per participant. If a weekly cycle is selected then the
minimum fee is $4,500 plus an additional $12 per participant.
Includes:
- Contribution processing on the designated cycle
- Daily valuation
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 2
38
- Investment exchanges of existing Participant account
balances
- Investment direction of future contributions
- Monthly Trial Balance Report
- Monthly withdrawals
- Quarterly Administrative Report*
- Quarterly Statements mailed directly to Participants'
homes*
- Twenty-four hour Participant telephone access to
account balance and fund price information
* The Quarterly Administrative Report and Quarterly Statements will be generated
on an off calendar quarter cycle.
(3) (OPTIONAL)
----------------------------------------------------------------------------------------------------------
PARTICIPANTS AMOUNT PER FUND
----------------------------------------------------------------------------------------------------------
ADDITIONAL FEE FOR EACH FIDELITY FUND 1-1,000 $ 500
OFFERED FOR THE PLAN IN EXCESS OF SEVEN. 1,001-2,000 $1,000
MORE THAN 2,000 $1,500
----------------------------------------------------------------------------------------------------------
INDICATE THE NUMBER OF FUNDS OFFERED UNDER THE PLAN IN EXCESS OF SEVEN: THREE .
-----------
(4)(OPTIONAL)
ADDITIONAL PER-PARTICIPANT FEE FOR FROZEN EMPLOYEE
VOLUNTARY AFTER-TAX CONTRIBUTION (FROZEN OR ACTIVE) ACCOUNT: $ 10
(Only for those Participants with active or inactive after-tax balances.)
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 3
39
- ARTICLE III. TRUSTEE SERVICE FEES:
ANNUAL FEE: $ 2,800
Includes:
- Annual Plan-Year-End Summary Reporting Package on a cash basis
- Custody of plan assets held in trust at Fidelity
- Distribution checks and annual IRS Form 1099-R Tax reporting
- Plan assets invested at the direction of Participants, or the
Employer if Employer direction is elected
- Service for Exiting Employees (SEE) Kit for XXX Rollovers
- ARTICLE IV. ADDITIONAL FEES:
(1) EMPLOYEE COMMUNICATION
- Initial Employee enrollment No charge for one day-one city meetings**
meeting presentations
- Meetings for additional $500 per day for same city**
consecutive days of $750 per day for additional sites**
initial Employee enrollment
meetings
** Limit of four meetings per day
(2) PARTICIPANT LOANS
- Participant loan application fee processed via batched hardcopy $75 setup
- Participant loan maintenance $25 per year
(Loan fees must be paid by the Employer unless paid by the Participant.)
(3) RECORDKEEPING GUARANTEED INSURANCE CONTRACT (GIC)
- Annual Fee $_________
(Based upon Fidelity's review of the GIC.
To be completed and initiated by a Fidelity Representative.)
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 4
40
Three percent of the GIC assets will be maintained as a
Reserve Fund by Fidelity in a money market portfolio for
Participant redemptions. The annual GIC recordkeeping fee will
not apply to this Reserve Fund. Instead, an investment
management fee of up to 18 basis points will be charged and
deducted from the Reserve Fund's interest income.
(4) MISCELLANEOUS DISTRIBUTIONS
- Refund of Participant 401(k) excess deferrals, $25 per Participant
contributions, or annual additions. This fee will be (Only for those
charged to the Employer Participants who receive
refunds.)
(5) NON-DISCRIMINATION TESTING (SELECT ONE): / x/ YES / / NO
By indicating "yes" in the above box, the Employer authorizes Fidelity to perform the Core
and/or Additional Tests listed below. PLEASE CHOOSE EITHER PACKAGE TESTING SERVICES
(OPTION "a") OR ONE OR MORE OF THE TESTS OFFERED UNDER THE INDIVIDUAL TESTING SERVICES
(OPTION "b"). (Note: The services included under option "a" include all of the individual
tests listed under option "b.") The Employer understands that the non-discrimination tests'
results are based upon the information provided to Fidelity by the Employer. Fidelity
cannot be responsible for invalid test results that are based upon incorrect or incomplete
information provided to Fidelity. Fidelity has no obligation to solicit data, nor does t have
an obligation to ascertain the accuracy or completeness of the data received. The
Employer must complete a Fidelity non-discrimination testing questionnaire before the initial
test can be performed.
(a) [X] PACKAGE TESTING
(Effective for plan years beginning on or after january 1, 1994)
If the Package Testing Service is elected, Fidelity will
perform SEMI-ANNUAL Actual Deferral Percentage, Actual
Contribution Percentage, Annual Addition and Deferral
Contribution Limitation tests (as outlined in the Core Testing
Services section below) and, as necessary, the ANNUAL Top
Heavy, Minimum Coverage, and Minimum Participation tests (as
outlined in the Additional
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 5
41
Testing section below) for the Employer's Plan. The fees for
these services are as follows:
Initial test date for semi-annual test: June 30, 1997 (Please specify.)
-------------
=============================================================================================================
PLAN SIZE PACKAGE TESTS
(BASED ON NUMBER OF ELIGIBLE EMPLOYEES)
-------------------------------------------------------------------------------------------------------------
1 - 500 $2,250
501 - 1,000 $3,300
1,001 - 2,000 $4,350
=============================================================================================================
(b) [ ] INDIVIDUAL TESTING SERVICES
(1) SEMI-ANNUAL OR ANNUAL CORE TESTING SERVICES
If elected, Fidelity will perform the non-discrimination test
required by Internal Revenue Code (IRC) Section 401(k)(3)
(Actual Deferral Percentage Test (ADP)) and, if applicable, by
IRC Section 401(m)(2) (Actual Contribution Percentage Test
(ACP)). The annual fee for performing the tests is listed
below. Fidelity must receive complete and accurate data in the
required format thirty days prior to the anticipated
distribution date of Participant refunds due to the Plan's
failure of the non-discrimination tests under IRC Section
401(k)(3) and/or 401(m)(2). Fidelity must receive proper
written authorization from the Employer before making any such
distributions.
There are two CORE TESTING SERVICE Options, Semi-Annual or
Annual Testing. You may elect one of the following options.
Semi-Annual ADP, ACP, IRC Section 415(c)(1) and IRC
Section 402(g) Limit Testing Annual ADP, ACP, IRC
Section 415(c)(1) and IRC Section 402(g) Limit
Testing
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 6
42
Initial test date for semi-annual test: (Please specify.)
---------------
============================================================================================================================
PLAN SIZE ANNUAL SEMI-ANNUAL
(BASED ON NUMBER OF (ONE TEST) (TWO TEST)
ELIGIBLE EMPLOYEES) CYCLE* CYCLES*
----------------------------------------------------------------------------------------------------------------------------
1 - 500 $1,300 $1,500
501 - 1,000 $1,800 $2,200
1,001 - 2,000 $2,000 $2,900
============================================================================================================================
*Each CORE TESTING SERVICES CYCLE includes an ADP Test, an ACP Test,
IRC Section 402(g) Deferral Limitation Monitoring (for calendar year
plans only), and IRC Section 415(c)(1) Limitation Monitoring (for
Defined Contribution Plans only). A quarterly testing cycle is
available, and the fee will be quoted upon request.
(2) ADDITIONAL TESTING SERVICES
[ ] IRC Section 416(c)(2) Top-Heavy Test (Annual Top-Heavy Test
for Defined Contribution Plan(s)). Fidelity will perform the
top-heavy test for an Employer that also has a defined benefit
plan that is aggregated with the defined contribution plan.
However, the Employer must timely provide Fidelity with the
relevant defined benefit plan information.
[ ] IRC Section 410(b)(1) Minimum Coverage Test (Annual Ratio
Percentage Test only) and IRC Section 401(a)(26) Minimum
Participation Test.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 7
43
The fees for the Additional Testing Services, if they are elected individually,
are as follows:
===================================================================================================================================
PLAN SIZE IRC MINIMUM COVERAGE
(BASED ON NUMBER OF SECTION 416(C)(2) (RATIO PERCENTAGE TEST ONLY)
ELIGIBLE EMPLOYEES) TOP-HEAVY TEST AND MINIMUM
-----------------------------------------------------------------------------------------------------------------------------------
1 - 500 $750 $750
501 - 1,000 $1,100 $1,100
1,001 - 2,000 $1,450 $1,450
===================================================================================================================================
** This fee includes the Minimum Coverage Test and the Minimum Participation
Test.
Any annual IRC tests not elected in options "a" or "b" are the responsibility of
the Employer. The data for the Core and/or Additional Testing Services must be
transmitted to Fidelity on magnetic tape or via Fidelity Retirement Service
Workbench Software.
The Employer will be billed a pro-rata portion of the entire annual
Non-Discrimination Testing Service fee at the end of each quarter based upon the
number of tests elected in the Employer's Authorization for Non-discrimination
Tests. If testing is required for more than one plan of the Employer, a fee will
be charged for each plan based upon the number of Employees eligible to
participate in that plan. If extraordinary consulting regarding the results of
the non-discrimination tests is provided by Fidelity personnel to the Employer,
then such consulting will be provided at the rate of $100 per hour. In addition,
any correction or manipulation of Plan data by Fidelity personnel at the request
of the Employer will be charge at the rate of $100 per hour.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 8
44
- ARTICLE V. BILLING INFORMATION
Fidelity's quarterly invoice for services rendered will be sent to the
following address:
Contact Name: Xxxx Xxxxx Xxxxx
-----------------------------------
Telephone Number: (000) 000-0000
-----------------------------------
Title: Director, Employee Benefits
-----------------------------------
Address: Xxxxx Associates, Inc.
-----------------------------------
City/State/Zip Code: 000 0xx Xxx., Xxx Xxxx, XX 00000
-----------------------------------
- ARTICLE VI. CONTACTS:
PRIOR RECORDKEEPER: Buck Consultants
-----------------------------------
Contact Name: Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxx
-----------------------------------
Telephone Number: (000) 000-0000, (000) 000-0000
-----------------------------------
Title: Manager, Consulting Actuary
-----------------------------------
Address: 000 Xxxxx Xxxxx
-----------------------------------
City/State/Zip Code: Xxxxxxxx, XX 00000-0000
-----------------------------------
PRIOR TRUSTEE: Chase Manhattan Bank, N.A.
-----------------------------------
Contact Name: Xxxxxxxx Xxxxx
-----------------------------------
Telephone Number: (000) 000-0000
-----------------------------------
Title: Assistant Treasurer
-----------------------------------
Address: Institutional Trust Services, One Chase Square
-----------------------------------
City/State/Zip Code: Xxxxxxxxx, XX 00000
-----------------------------------
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 9
45
PRIOR CUSTODIAN:
(if not Trustee) -----------------------------------
Contact Name:
-----------------------------------
Telephone Number:
-----------------------------------
Title:
-----------------------------------
Address:
-----------------------------------
City/State/Zip Code:
EXTERNAL PAYROLL VENDOR: Ceridian
-----------------------------------
Contact Name: Level One Services
-----------------------------------
Telephone Number: 0-000-000-0000
-----------------------------------
Title: Account #s M641,2,3
-----------------------------------
Address: 000 Xxxx 00xx Xxxxxx
-----------------------------------
City/State/Zip Code: Xxx Xxxx, XX 00000
-----------------------------------
INTERNAL PAYROLL CONTACT: Xxxxx Associates
-----------------------------------
Contact Name: Xxxxxx Xxxxxxxx
-----------------------------------
Telephone Number: (000) 000-0000
-----------------------------------
Title: Payroll Manager
-----------------------------------
Address: 000 Xxxxx Xxx., 0xx Xx
-----------------------------------
City/State/Zip Code: Xxx Xxxx, XX 00000
-----------------------------------
Payroll Frequency/Dates: 15th & 31st of each month
-----------------------------------
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 10
46
- ARTICLE VII. TERMS OF AGREEMENT:
The Implementation, Administrative, Trustee Services, and Additional
Fees specified on pages one through eight are contingent upon both
parties fulfilling their respective responsibilities in the following
sections:
1. DATA SUBMISSION:
The Employer or Plan Administrator will provide Fidelity with accurate
and complete data via electronic data transmission, magnetic tape, or
the Fidelity Retirement Services Workbench Software on a timely basis.
As of the Implementation Date, the Employer or Plan Administrator must
send Fidelity the following required data for each new or existing
Participant: name, Social Security Number, address, employment dates,
employment status, and initial investment elections. After the
Implementation Date, the Employer or Plan Administrator may only send
Fidelity the aforementioned information for a new Participant or
changes to the name, address, employment dates, or employment status
for an existing Participant. Investment election changes may only be
made as provided in this Article VII, Section Four. Fidelity will not
be responsible for any losses and/or expenses that arise due to the
submission of incorrect or incomplete data, or data transmitted to
Fidelity in an improper format.
2. SERVICES:
Fidelity will have the responsibility to perform only the services set
forth in Articles I, II, III, and IV of this Agreement, effective as of
the Implementation Date. All other regulatory and administrative
matters relating to the Plan shall be the responsibility of the
Employer and the Plan Administrator. If so elected, the Employer may
engage Fidelity to perform the required annual Internal Revenue Code
tests offered by its Non-discrimination Testing Services Group.
3. INITIAL INVESTMENT ELECTION:
If Participant direction is elected by the Employer, each Participant
in the Plan shall submit his/her initial investment elections to the
Employer or Plan Administrator. These elections will then be submitted
to Fidelity by the Employer or Plan Administrator in accordance with
the terms set forth in Section One. All subsequent investment elections
for existing Participants must be made in accordance with Section Four
using the Fidelity telephone exchange system. Existing Participants
must use the Fidelity telephone exchange in Section Four to make
investment changes.
4. TELEPHONE DIRECTIONS BY PARTICIPANTS:
If Participant direction is chosen by the Employer each Participant in
the Plan shall be permitted to direct the investment of his/her
individual account balance and investment of future
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 11
47
contributions among available investment options through the use of
Fidelity's telephone exchange system. The Employer hereby directs
Fidelity to act upon such telephone instructions without questioning
the authenticity of such direction other than as provided in the third
paragraph of this section. Fidelity will not be responsible for any
losses and/or expenses that arise for clients who provide changes for
existing Participant investment elections via the Fidelity Retirement
Services Workbench Application electronic data transmission or magnetic
tape.
This service allows Participants to telephone Fidelity between the
hours of 8:30 AM and 8:00 PM Eastern Time on any business day. the
number of exchanges from a Participant's existing account balance will
be governed by the mutual fund prospectus unless otherwise limited by
the Employer in accordance with Section 6.03 of The CORPORATEplan for
Retirement(SM) Prototype Basic Plan Document. Fidelity reserves the
right to modify or withdraw the exchange privilege in the future. All
telephone conversations will be recorded for the protection of
Fidelity and the Participants. Fidelity will not be responsible for
determining he authenticity of Participant and his/her telephone
instructions. A confirmation of the exchange of existing account
balances and/or a change in investment of future contributions will be
mailed to the Participant within seven business days of the call. If
the telephone call is received prior to 4:00 PM Eastern Time, the
requested exchange will be effective with that day's mutual fund
closing prices. If the telephone call is received after 4:00 PM
Eastern Time, the exchange will be effective with the next
business day's closing prices.
A Participant will be required to provide the Fidelity telephone
exchange system representative with his/her Employer's plan number,
Social Security Number and personal identification number. For security
purposes, upon proper notice to Fidelity, the Employer shall have the
right to require a Participant to respond to additional questions
(i.e., date of birth, date of hire, etc.) before being able to access
his/her accounts. Only authorized Plan contact(s) and the Participant
shall have access to a Participant's account. A Participant's ex-spouse
who has a segregated account in the Plan under a Qualified Domestic
Relations Order (QDRO) shall have access only to this account. A
Participant's spouse or any other third party may not have access to
the Participant's account or make exchanges of existing account
balances and/or changes in the investment of future contributions. Upon
proper documentation and notice of the Employer, an individual who
becomes an active Beneficiary in accordance with Section 2.01(a)(3) of
the Basic Plan Document due to the death of the Participant shall have
the right to access the deceased Participant's account. Fidelity
reserves the right to establish a separate account for the Beneficiary
based upon his/her entitlement to the deceased Participant's account.
A Participant may not change his/her address through the telephone
exchange system. All such changes must be submitted to the Employer in
writing. The Employer shall then send such changes to Fidelity in the
required format.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 12
48
5. EMPLOYER INVESTMENT DIRECTION:
If Employer investment direction is chosen by the Employer, then all
Participant accounts must be invested in Fidelity Fund(s) elected in
Section 1.14(b) of the Adoption Agreement. A Participant will not be
allowed to make any telephone exchanges of his/her account balance.
Fidelity will provide the Employer with procedures for exchanging
Participant account balances between/among Fidelity Fund(s) offered
under the Plan. Exchanges requested by an authorized Plan
representative will be executed within the time period specified in the
procedures. Fidelity reserves the right to modify the procedures upon
notice to the Employer.
6. CONTRIBUTIONS:
The Employer will be responsible for computing Employer contributions
for eligible Participants unless Fidelity provides such a service.
Contribution information must be received by Fidelity in an acceptable
media: diskette, electronic data transmission, Fidelity Retirement
Services Workbench Software or magnetic tape in the required Fidelity
format. The Employer must consolidate the contribution information for
multiple payrolls and/or multiple payroll sites onto one diskette,
electronic data transmission. Fidelity Retirement Services Workbench
Software or magnetic tape before sending it to Fidelity. The Employer
will remit contributions by wire transfer to Fidelity after receiving
notification and approval from Fidelity to wire the funds. Employer
contributions may be sent on a quarterly or a less frequent cycle. The
trade date of the transaction will be the day the funds are received by
Fidelity. Unsolicited or unidentified wire transfers of contributions
will not be invested until they can be properly identified and
reconciled by Fidelity.
7. WITHDRAWALS:
Withdrawal requests, including loans, will be processed monthly based
upon a mutually acceptable date determined immediately after the
implementation period by Fidelity and the Plan Administrator except no
withdrawal will be processed between December 15 and January 1.
Fidelity will process all withdrawals and mail the checks to the
Participants within ten business days of the monthly processing date.
Withdrawals will only be processed if there is complete, accurate and
properly authorized data received by Fidelity in the required media.
All withdrawal requests received after the monthly cutoff date will be
processed the following month. The monthly withdrawal date may be
changed once each Plan Year based upon the written consent of Fidelity
and the Employer. Fidelity reserves the right to process withdrawals on
a more frequent basis.
8. IRS DETERMINATION LETTER FILING:
The Employer must use the Fidelity CORPORATEplan for Retirement(sm)
Prototype Basic Plan Document and corresponding Adoption Agreement. The
Employer can not add, delete, or modify
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 13
49
them in any way. The Employer will be responsible for completing and
executing the Adoption Agreement Standardized or Non-Standardized.
Fidelity as the Prototype Plan is responsible for updating and amending
the Prototype Plan Documents. If the Nonstandardized Adoption Agreement
is used, or if the Standardized Adoption Agreement is used and the
Employer maintains, or has ever maintained, another plan, the Employer
may not rely on the opinion letter issued by the national Office of the
Internal Revenue Service as evidence that this Plan is qualified under
section 401 of the Internal Revenue Code. The Employer is responsible
for filing a request with the appropriate Internal Revenue Service
office to obtain an individual determination letter for its Plan.
9. INITIAL EMPLOYEE COMMUNICATION MEETINGS:
The initial day of Employee enrollment meetings will be limited to four
meetings. Additional fees will be incurred if meetings are held on
additional consecutive days or at multiple sites. Initial meetings
represent those meetings conducted by Fidelity before or immediately
after the Implementation Date of the Plan. Additional fees will be
charged for all re-enrollment meeting or meetings conducted sixty days
after the Implementation Date.
10. TRANSITION PERIOD:
An existing Employer Plan converting to Fidelity's CORPORATEplan for
Retirement(sm) will be subject to a transition period to facilitate the
movement of Participant records and Plan assets from the prior
recordkeeper and/or trustee to Fidelity. The Employer will be
responsible for ensuring the prior recordkeeper provides Fidelity with
all of the required Participant account balance history and related
information. The Plan assets must be converted to cash and wired to
Fidelity on the Implementation Date unless the assets are already
invested in a Fidelity mutual fund offered under The CORPORATEplan for
Retirement(sm) (Fidelity reserves the right, upon sufficient written
notice, to require the Employer to liquidate all holdings in Fidelity
mutual funds as of the Implementation Date). The assets will be
invested in a money market fund until the transition period is
completed. The transition period will be from the Effective Date in
Section 1.01(g) of the Adoption Agreement through the date the
conversion process is completed and approved by the Employer.
Participants will not be able to make withdrawals, exchanges, or
redirect future contributions during the transition period. Fidelity
will provide the Employer with information about the conversion process
and the transition period.
The duration of the transition period is dependent upon the cooperation
of the prior recordkeeper, prior trustee, the Employer and the Plan
Administrator. Fidelity can not guarantee that the transition period
will end as of a specified date, or the length of time required to
complete the implementation period.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 14
50
11. FEES:
As consideration for its services under this Agreement, Fidelity shall
be entitled to the fees computed in accordance with Articles I, II, III
and IV of this Agreement and any additional fees described in this
Section. A reasonable additional fee will be charged if Fidelity has to
reprocess any contribution data transmission due to excessive errors of
the Employer or payroll vendor. Additional services and special reports
or statements may be provided if Fidelity and Employer enter into a
separate written agreement identifying such services and the associated
fees. Fidelity shall be entitled to reasonable compensation for its
costs and expenses incurred in the event of termination of this
Agreement. Fidelity reserves the right to charge a termination fee
equal to a full year of fees identified under Articles I, II, III and
IV in the event the Employer terminates its relationship with Fidelity
within one year after the Implementation Date.
Fidelity will charge an additional Conversion Fee under Article I if
either the Employer acquires another Company and merges the acquired
Company's plan with its Plan or the Employer receives additional assets
to be added to its existing Plan. The Conversion Fee will be determined
after the relevant information has been received by Fidelity. This fee
will be communicated to the Employer prior to the conversion of
additional assets into the Employer's Plan.
The implementation service fee in Article I will be billed during the
implementation process. The annual base fees in Article II will become
effective as of the earlier of the date the telephone exchange service
becomes available to Participants and/or the Employer, or the date
Fidelity processes withdrawals. These fees will be prorated through the
end of the initial quarter. All Fidelity fees in Articles II, III and
IV will be billed in arrears to the Employer on a quarterly basis. An
Employee is treated as a Participant for purposes of the annual
per-participant fee if he/she has an account balance on any day of the
quarter or any previous quarter in the twelve-month annual billing
cycle. Therefore a Participant receiving a distribution will be
considered a Participant in each quarter in which he/she had an account
and each quarter thereafter in the billing cycle. The trustee fees in
Article III will become effective as of the later of the Plan's
Effective Date in Section 1.01(g) of the Adoption Agreement or the
Implementation Date.
If payment of the aforementioned fees is not received by Fidelity
within sixty days of receipt of Fidelity's quarterly invoice, or the
fees are to be paid by the Participants, then the fees shall be paid
from the Trust fund. Unless allocable to the accounts of particular
Participants, such fees shall be charge against the respective accounts
of all Participants in such reasonable manner as the Trustee may
determine.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 15
51
12. DURATION AND AMENDMENT:
This Agreement shall remain in effect for the remainder of the current
calendar year and shall thereafter be automatically extended for
successive one-year terms. Either party, however, by sixty days prior
written notice to the other, may terminate this Agreement unless the
receiving party agrees to a shorter notice period. This Agreement may
be amended or modified at any time and from time to time by an
instrument executed by the parties. Notwithstanding the foregoing,
Fidelity reserves the right to amend unilaterally the fee schedule upon
sixty days prior written notice to the Employer.
13. PARTICIPANT LOANS:
The Employer or Plan Administrator shall act as the Trustee's agent for
the purpose of holding Participant loans and the related documentation
and as such shall (1) hold physical custody of and keep safe the
promissory notes and other loan documents, (2) collect and remit all
principal and interest payments to the Trustee, (3) advise the Trustee
of the date, amount and payee of the checks to be drawn representing
loans, and (4) cancel and surrender the promissory note and other loan
documentation to the Participant when a loan has been paid in full.
14. BENEFICIARY DESIGNATION FORMS:
The Employer or Plan Administrator will be responsible for physical
custody of all Participant beneficiary designation forms.
15. RECORDKEEPING GUARANTEED INVESTMENT CONTRACTS:
Fidelity may provide recordkeeping services for an additional fee for a
guaranteed investment contract ("GIC") held in an existing plan that
converts to The CORPORATEplan for Retirement(sm). The Employer's Plan
must meet all of the criteria established by Fidelity before the GIC
can be recordkept. Fidelity will review the GIC to determine any
required changes. Fidelity will then notify the Employer of the
required changes. The Employer will be responsible for negotiating
directly with the Insurance Company for any changes that will be
required to the GIC for Fidelity to recordkeep it. Fidelity will not
conduct any Employee communication meetings until after all of the
required changes have been agreed to by the Employer and the Insurance
Company.
Upon maturity of the GIC all proceeds must be invested into Fidelity
Funds. Fidelity will not trustee the GIC assets and the Employer will
be responsible for the establishment of a separate trust or fund under
The CORPORATEplan for Retirement(sm) Prototype Basic Plan Document. The
Employer will be required to sign a Consent to a Separate Trust/Fund
and GIC Operating Agreement with Fidelity prior to the Effective Date
listed in Section 1.01(g) of the Adoption Agreement. the former
Agreement will identify the procedures and conditions for Fidelity to
recordkeep the GIC.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 16
52
16. USE OF SERVICE AGREEMENT:
The use of this Service Agreement is contingent upon the use of The
CORPORATEplan for Retirement(SM) Prototype Basic Plan Document and
Corresponding Adoption Agreement. Fidelity shall have no responsibility
whatsoever if the Employer attempts to use a plan document other than
The CORPORATEplan for Retirement(SM) Document.
17. INVESTMENTS:
Fidelity shall have no discretion or authority with respect to the
investment of the Plan assets but shall act solely as a directed
trustee of the contributed funds. All Plan assets must be invested in
allowable Fidelity Funds under The CORPORATEplan for Retirement(SM) as
selected by the Employer unless a separate trust or fund is
established under the Prototype Basic Plan Document with the written
consent of Fidelity. The Employer may add, delete or replace any
Fidelity Fund with another by providing Fidelity with proper written
direction at least xxxxx days prior to the effective date of the
change. Fidelity may charge the Employer a reasonable fee to facilitate
the replacement of mutual fund(s).
18. SERVICE PROVIDERS:
Fidelity Management Trust Company is the Trustee of the Employer's Plan
under The CORPORATEplan for Retirement(SM). Fidelity may use its
affiliates in providing the services described in this Agreement.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 17
53
- SPECIMEN SIGNATURES:
At least one person is required to be authorized to provide
instructions to Fidelity Management Trust Company regarding The
CORPORATEplan for Retirement(SM) Account. Only the following person(s)
designed below is/are authorized to advise Fidelity on all plan
administrative matters:
NAME & TITLE SPECIMEN SIGNATURE
Xxxx Xxxxx Xxxxx /s/ Xxxx Xxxxx Xxxxx
-------------------------------- ----------------------------------
Director, Employee Benefits
--------------------------------
N.E. Paciotti /s/ N.E. Paciotti
-------------------------------- ----------------------------------
Chief Financial Officer
--------------------------------
Xxxxxx X. XxXxxxx /s/ Xxxxxx X. XxXxxxx
-------------------------------- ----------------------------------
President
--------------------------------
-------------------------------- ----------------------------------
--------------------------------
PROCEDURE FOR CHANGING SPECIMEN SIGNATURES
The specimen signatures can be changed by the Employer at any time. To add new
authorized signer, the Employer must send a letter of instruction signed by an
authorized individual to the Account Manager, with an original specimen
signature of the new authorized signer. To delete or replace a signer, the
Employer should identify the name(s) of the individual(s) who is/are no longer
authorized signer(s). The Employer must provide any change at least ten business
days prior to the date the change will become effective.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 18
54
EXECUTION PAGE
(FIDELITY'S COPY)
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts except to the extent such laws are superseded by Section 514 of
ERISA. This Agreement shall be effective for the Plan as of the later of the
Effective Date in Section 1.01(g) of the Adoption Agreement or the
Implementation Plan.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR DULY AUTHORIZED OFFICERS.
EMPLOYER: EMPLOYER:
Print Name: N.E. Paciotti Print Name:
---------------------------- ---------------------------
Signature: /s/ N.E. Paciotti Signature:
---------------------------- ---------------------------
Title: Chief Financial Officer Title:
--------------------------------- --------------------------------
Date: 12-19-96 Date:
--------------------------------- --------------------------------
Note: Only one authorized signature is required to execute this Agreement unless
the Employer's corporate policy mandates two authorized signatures.
FIDELITY MANAGEMENT TRUST COMPANY
Print Name: Xxxx X. Xxxxxxxx
----------------------------
Signature: /s/ Xxxx X. Xxxxxxxx
Authorized Signatory
----------------------------
Title:
---------------------------------
Date: 2/14/97
----------------------------------
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 19
55
EXECUTION PAGE
(EMPLOYER'S COPY)
This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts except to the extent such laws are superseded by Section 514 of
ERISA. This Agreement shall be effective for the Plan as of the later of the
Effective Date in Section 1.01(g) of the Adoption Agreement or the
Implementation Plan.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR DULY AUTHORIZED OFFICERS.
EMPLOYER: EMPLOYER:
Print Name: N.E. Paciotti Print Name:
---------------------------- ---------------------------
Signature: /s/ N.E. Paciotti Signature:
---------------------------- ---------------------------
Title: Chief Financial Officer Title:
--------------------------------- --------------------------------
Date: 12-19-96 Date:
--------------------------------- --------------------------------
Note: Only one authorized signature is required to execute this Agreement unless
the Employer's corporate policy mandates two authorized signatures.
FIDELITY MANAGEMENT TRUST COMPANY
Print Name: Xxxx X. Xxxxxxxx
----------------------------
Signature: /s/ Xxxx X. Xxxxxxxx
Authorized Signatory
----------------------------
Title:
---------------------------------
Date: 2/14/97
----------------------------------
Note: This page should be signed by both the Employer and fidelity. The Employer
should forward this page to Fidelity after signing it. Fidelity will return it
to the Employer after it is executed by an authorized Fidelity representative.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 20
56
ADDENDUM TO ARTICLES I, II, III AND IV
OF THE CORPORATEplan for Retirement(sm)
SERVICE AGREEMENT
PLEASE INDICATE BY CHECKING THE APPROPRIATE BOX WHETHER EACH APPLICABLE FEE
SHOULD BE BILLED TO THE EMPLOYER OR CHARGED TO THE EMPLOYEE.
PAID BY CHARGED TO
TYPE OF FEE EMPLOYER PARTICIPANT
(ON A FLAT $ BASIS)
1. Set up x
2. Conversion N/A
3. Admin. Service - Base x
4. Admin. Service - Per Participant x
5. Additional Investment Fund x
6. Return of Excess Contribution x *
7. Employee Communications x
8. Non-Discrimination Testing x
9. Recordkeeping GIC (Guaranteed Insurance Contract) *
10. Trustee Fee x
*Charged only to affected participants.
NOTE: The employer shall consult with their attorney to determine if the above
expenses are reasonable expenses of the Plan under Sections 403(c)(1) and
404(a)(1)(A) of the Employee Retirement Income Security Act of 1974. This form
will serve as notification to Fidelity of the party responsible for paying the
Fidelity fees of the Employer's Plan.
SERVICE AGREEMENT - PROFIT SHARING/401(k) PLAN - FORM SIDE 21
57
1/28/97
XXXXX ASSOCIATES 401(K) PLAN
PRIOR PLAN PROVISIONS
VS.
PROVISIONS UNDER FIDELITY'S CORPORATE PLAN FOR RETIREMENT (CPR)
Provision Categories Prior Provisions (Effective 1/l/94) CPR Provisions (Effective 4/l/97)
if different than prior
1. Plan Year End 12/31 --
2. Age Requirement 21 --
3. Service Requirmnt 6 months-- --
4. Excluded Class(es) None----------- Leased/Union/Non-resident Aliens
/Temps-----
5. Entry Dates First day of plan year & 7th month ----
6. Comp Exclusions Overtime------------ None-----
7. Deferral Limits 1-15% of compensation-- ----
8. Other 401(k) Contr QNEC/Recharacterization---- QNEC/Bonus/Catch-up----
9. Match 25% of deferrals up to 5% of comp/ ----
Maximum match=$500
1O. Match Eligibility None----- ------
11. Employer Contr Discretionary, non-integrated --
12. Er Contrib Eligblty Last day of year & 1000 hours Last day of year & 1000 hours----
(or death, disability, or retirement)
13. AfterTax Withdrwl 1x/year--if any contributions --
14. Rollover Withdrwl 1x/year* --
15. Hardship Withdrwl Deferrals (& Rollovers) --
/Profit sharing & Match*
16. Hardship Test Safe Harbor-- --
17. Inservice Withdrwl All accounts @ age 59.5-- ----
18. Loans 1 at a time/all sources/for hardship ------
19. Er Contr. Vesting 2 years=50%/3=100 --
20. Match Vesting 2 years=50%/3=100 --
21. Top Heavy Vesting 2 years=50%/3=100 --
22. Vest Computation Completed hours from hire date Elapsed-time from hire date
23. Normal Retirement Age 65 & 5 years of participation-- ------
24. Early Retirement None---- ------
25. Disability Per doctor selected by employer-------- ----------
26. Payment Methods Lump Sum/Installments--------- ------------
27. Investment Types Not specified-------- Mutual funds
28. Exch Restrictions 1x/quarter Unrestricted by plan--
29. 404(c) Not specified Yes
30. Load Waiver Not specified Yes
*Protected Benefit ----------------------------------------------------
58
The CORPORATE plan
FOR RETIREMENT
REQUEST FOR WAIVER OF SALES CHARGE
An Employee Benefits Plan will qualify for net asset value purchase of shares
of certain Fidelity funds which impose a sales change if such a Plan covers at
least 200 eligible employees or has $3,000,000 in plan assets invested in
Fidelity Investments mutual funds (as provided in the fund prospectus). To
obtain such an exemption from the sales charge for your Plan, an authorized
person at your company must complete this form and forward it to your Fidelity
Institutional Retirement Services Company Representative. The waiver of sales
charges is not retroactive. The sales load waiver becomes effective when the
form is signed by an authorized Fidelity Representative. Approval can take up
to 30 days.
Name of Plan XXXXX ASSOCIATES 401(k) SAVINGS PLAN & TRUST
--------------------------------------------------------------
Address 000 XXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
--------------------------------------------------------------------
Name of Fund(s) SEE ATTACHED LIST OF TEN FUNDS
--------------------------------------------------------------
Account Number(s)
----------------------------------------------------------
(if available)
On behalf of the above-referenced Plan, I hereby attest that the Plan covers
200 or more eligible employees or has $3,000,000 in plan assets invested in
Fidelity Investments mutual funds, making the Plan eligible for investments in
the above-referenced Fidelity fund accounts(s) at net asset value.
I understand that Fidelity Institutional Retirement Services Company reserves
the right to make a determination as to the accuracy and status of this Request
for Waiver of Sales Charge as it deems necessary.
Signed /s/ N. E. Paciotti
------------------------------------------------------------------------
Please Print Name N. E. Paciotti
--------------------------------------------------------------
Title Chief Financial Officer Date 01/16/97
-------------------------------------------------------------------------
Please return this completed form to your Fidelity Institutional Retirement
Services Company Representative.
Xxxx X. Xxxxxxxx
Authorized Signatory
TO BE COMPLETED BY FIDELITY INVESTMENTS
Authorized Representative /s/ Xxxx X. Xxxxxxxx 2/14/97
----------------------------------------------------
Effective Date 4/1/97
----------------------------------------------------------------
Comments
----------------------------------------------------------------------
[Fidelity Investments Logo]
59
The CORPORATE plan
FOR RETIREMENT
ERISA SECTION 404(c)
ELECTION FORM
Employer: Xxxxx Associates, Inc. ("Employer")
---------------------------------------------------
Plan Name: Xxxxx Associates 401(k) Savings Plan and Trust ("Plan")
--------------------------------------------------
The Employer should use this form to notify Fidelity of its intention to
designate the above-referenced plan as an ERISA Section 404(c) plan. The
Employer should refer to the ERISA Section 404(c) Information Guide
before making an election below. Check one:
X The Employer designates the Plan as an ERISA Section 404(c)
--- plan. Fidelity will include the Notice of Limited Liability in
the Plan Highlights brochure and Summary Plan Description.
The Employer does not designate the Plan as a 404(c) plan.
---
"EMPLOYER"
By: /s/ N. E. Paciotti Date: 12-19-96
-------------------------------------------------------------------
Title: N. E. Paciotti, Chief Financial Officer
-----------------------------------------------------------------
Please return to Fidelity with executed Adoption Agreement.
[Fidelity Investments Logo]
60
XXXXX ASSOCIATES
MONEY PURCHASE PENSION PLAN
Amended and Restated
Effective January 1, 1994
61
WHEREAS, Xxxxx Associates, Inc. (the "Company") has adopted the Xxxxx
Associates Money Purchase Pension Plan ("Plan") effective January 1, 1991; and
WHEREAS, the Plan is intended to qualify as a money purchase plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended ("Code"); and
WHEREAS, the Company wishes to amend and restate the Plan to comply
with various legislation subsequent to the Tax Reform Act of 1986 and to
incorporate other miscellaneous amendments adopted prior to January 1, 1994; and
WHEREAS, the Company wishes to amend the contribution formula with
respect to a certain group of employees; and
NOW, THEREFORE, the Plan shall be amended and restated effective
January 1, 1994 except for Section 12.12 which shall be effective as of January
1, 1993.
62
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE ONE
Definitions
-----------
1.01 Account Value
1.02 Administrative Committee
1.03 Beneficiary
1.04 Code
1.05 Company
1.06 Company Contribution Account
1.07 Compensation
1.08 Eligible Spouse
1.09 Employee
1.10 Employer
1.11 Entry Date
1.12 ERISA
1.13 ERISA Affiliate
1.14 Highly Compensated Employee
1.15 Hour of Service
1.16 Investment Manager
1.17 Limitation Year
1.18 Normal Retirement Date
1.19 One-Year Break in Service
1.20 Participant
1.21 Plan
1.22 Plan Year
1.23 Termination of Employment
1.24 Total and Permanent Disability
1.25 Transfer Account
1.26 Trust, Trust Fund or Fund
1.27 Trustee or Trustees
1.28 Valuation Date
1.29 Year of Service
63
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE TWO
Participation And Service
-------------------------
2.01 Participation
2.02 Transfers and Automatic Suspension of Participation
2.03 Re-employment
2.04 Special Rules
ARTICLE THREE
Participant's Contributions
---------------------------
3.01 General Rule
ARTICLE FOUR
Contributions
-------------
4.01 Employer Contributions
4.02 Employer Contributions Irrevocable
4.03 Treatment of Certain Family Members
ARTICLE FIVE
Allocation to Participant's Accounts
------------------------------------
5.01 Method of Allocating Contributions
5.02 Limitation on Annual Additions
5.03 Multiple Plan Reduction
5.04 Cessation of Participant Status
64
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE SIX
Investment of Plan Assets
-------------------------
6.01 Funding Policy
6.02 Investment of Trust Fund
ARTICLE SEVEN
Participant's Accounts
----------------------
7.01 Separate Accounts
7.02 Allocation
7.03 Valuation
ARTICLE EIGHT
Administration
--------------
8.01 Appointments of the Committee
8.02 Responsibility for Administration
of the Plan
8.03 Responsibility for Administration of the Trust Fund
8.04 Delegation of Power
8.05 Records
8.06 General Administrative Powers
8.07 Appointment of Professional
Assistants and Investment Manager
8.08 Actions by the Committee
8.09 Directives of the Committee
8.10 Discretionary Acts
8.11 Indemnity by Company
8.12 Responsibilities of Fiduciaries
8.13 Indemnity by Company
65
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE EIGHT (Continued)
Administration
--------------
8.14 Plan Administrator
8.15 Allocation and Delegation of Committee Responsibilities
8.16 Appointment of Trustees
ARTICLE NINE
Retirement and Death Benefits
-----------------------------
9.01 Retirement Benefits
9.02 Death Benefits
ARTICLE TEN
Disability Benefits
-------------------
10.01 Disability Benefits
10.02 Determination of Disability
ARTICLE ELEVEN
Termination Benefits
--------------------
11.01 Vested Benefits
11.02 Non-Includable Service
11.03 Forfeitures
11.04 Distribution and Re-Employment
Before a Break in Service
66
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE TWELVE
Payment of Benefits
-------------------
12.01 Retirement Benefits
12.02 Distribution Upon Termination of Employment or
Total and Permanent Disability
12.03 Methods of Payment of Benefits
12.04 Optional Forms of Benefit Payment
12.05 Time of Payment
12.06 Required Beginning Date
12.07 Beneficiary Designation by Participant
12.08 Failure of Participant to Designate
12.09 Beneficiary's Rights
12.10 Unclaimed Account Procedure
12.11 Distribution of Accounts
12.12 Direct Rollover Provisions
ARTICLE THIRTEEN
Claims Procedure
----------------
13.01 Claims Procedure
ARTICLE FOURTEEN
Inalienability of Benefits
--------------------------
14.01 Inalienability of Benefits
67
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE FIFTEEN
Permanency of the Plan
----------------------
15.01 Right to Terminate Plan
15.02 Merger or Consolidation of Plan and Trust
15.03 Amendment of the Plan
ARTICLE SIXTEEN
Discontinuance of Contributions And Termination
-----------------------------------------------
16.01 Discontinuance of Contributions
16.02 Termination of Plan
16.02 Rights to Benefits Upon Termination of Plan or
Complete Discontinuance of Contributions
ARTICLE SEVENTEEN
Exclusive Benefit of Trust Fund
-------------------------------
17.01 Limitation Upon Reversions
17.02 Failure of Qualification of Plan
ARTICLE EIGHTEEN
Applicable Law
--------------
18.01 Applicable Law
68
TABLE OF CONTENTS
Section Title
------- -----
ARTICLE NINETEEN
Withdrawals
-----------
19.01 Withdrawals
ARTICLE TWENTY
Loans
-----
20.01 Loans
ARTICLE TWENTY-ONE
Top Heavy Provisions
--------------------
21.01 Special Definitions
21.02 Determination of Top Heavy Status
21.03 Top Heavy Plan Requirements
21.04 Minimum Allocations and Benefits
21.05 Multiple Plan Reduction for Top
Heavy Plan Years
21.06 Minimum Vesting
ARTICLE TWENTY-TWO
Miscellaneous
-------------
22.01 Interpretation of the Plan and Trust
22.02 Gender and Number
69
TABLE OF CONTENTS
APPENDIX I
Adopting Employers
------------------
APPENDIX II
Transfer Contributions
----------------------
70
ARTICLE ONE
Definitions
-----------
For the purposes of this Plan, the following words and phrases shall
have the meanings indicated, unless a different meaning is plainly required
by the context:
1.01. "Account Value" means the fair market value of each of the accounts
determined in accordance with Article Seven as determined on any date which the
assets therein are required to be valued. "Accounts" means a Participant's
Company Contribution Account and Transfer Account.
1.02. "Administrative Committee" or "Committee" means the Committee appointed by
the Board of Directors of the Company to administer the Plan in accordance with
Article Eight.
1.03. "Beneficiary" means any person entitled to receive any amount payable
under the Plan upon the death of a Participant.
1.04. "Code" means the Internal Revenue Code of 1986, as amended.
1.05. "Company" means Xxxxx Associates, Inc., and any predecessors or successors
thereto.
1.06. "Company Contribution Account" means the separate account maintained for
each Participant reflecting Employer contributions allocated on behalf of such
Participant in accordance with the provisions or Section 5.01 of the Plan.
1.07. "Compensation" means the aggregate remuneration for services paid by an
Employer to an Employee during the Plan Year; however, Compensation shall not
include bonuses, commissions, overtime pay, relocation pay or imputed income
from fringe benefits, and shall be determined without giving effect to any
salary reduction agreement entered into by the Employee under the Xxxxx
Associates 401(k) Savings Plan and Trust or under any Plan
I-1
71
described in Section 125 of the Code that is maintained by the Company or an
ERISA Affiliate.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding anything herein 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 S 150,000, as adjusted by the
Commissioner for increases in the cost-of-living in accordance with section
401(a)(17) of the Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
Compensation limit will be multiplied by 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 alter 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 as set forth above.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefit 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 January 1, 1994, the
OBRA '93 annual Compensation limit is $150,000.
If a Participant is either the spouse or a lineal descendant under age
nineteen (19) of another Participant who is (A) a five- percent (5%) owner or
(B) a highly compensated employee who is among the ten (10) most highly
compensated employees, then for purposes of determining such Participant's
Compensation, such Participant shall not be considered a
I-2
72
separate individual and any Compensation paid to such Participant shall be
treated as paid to the five-percent (5%) owner or highly compensated employee to
whom such Participant is related as per the provisions of this paragraph. If the
limit described in the preceding paragraph is exceeded by a family unit as
described in this paragraph, then the Compensation of such family unit, as so
limited by such preceding paragraph, shall be allocated among the referenced
members of the family unit in proportion to their compensation as determined
prior to the application of this and the preceding paragraph.
For purposes of Section 5.02 and Article Twenty-One, Compensation shall
include:
I) The participant's wages, salaries, fees for professional
service and other amounts received for personal services actually rendered in
the course of employment with the Employer maintaining the Plan (including, but
not limited to, commissions paid to salesmen, compensation for services on the
basis of a percentage of profits, commissions or insurance premiums, tips and
bonuses)
II) In the case of a Participant who is Employee within the
meaning of Section 401(c)(1) of the Code and the regulations thereunder, the
Participant's earned income (as described in Section 401(c)(2) of the Code and
the regulations thereunder).
III) For purposes of subdivisions (I) and (II) of this
subparagraph, earned income from sources outside the United States (as defined
in Section 911(b) of the Code), whether or not excludable from gross income
under Section 911 of the Code or deductible under Section 913 of the Code.
IV) Amounts described in Sections 104(a)(3), 105(a) and 105(h)
of the Code, but only to the extent that these amounts are includable in the
gross income of the Employee.
V) Amounts described in Section 105(d) of the Code, whether or
not these amounts are excludable from the gross income of the Employee under
that Section.
I-3
73
VI) 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 Section 217 of the Code.
VII) 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.
VIII) The amount includable in the gross income of an Employee
upon making the election described in Section 83(b) of the Code, but shall not
include
i) Contributions made by an Employer to a plan of deferred
compensation to the extent that, before the application of Code Section 415
limitations to that plan, the contributions are not includable in the gross
income of the Employee for the taxable year in which contributed. In addition,
Employer contributions made on behalf of an Employee to a simplified Employee
pension described in Section 408(k) of the Code are not considered as
compensation for the taxable year in which contributed to the extent such
contributions are deductible by' the Employee under Section 219(b)(7) of the
Code. Additionally. any distributions from a funded plan of deferred
compensation are not considered as compensation for Code Section 415 purposes,
regardless of whether such amounts are includable in the gross income of the
Employee when distributed. However, any amounts received by an Employee pursuant
to an unfunded non-qualified plan may be considered as compensation for Code
Section 415 purposes in the year such amounts are includable in the gross income
of the Employee.
ii) Amounts realized from the exercise of a non- qualified
stock option, or when restricted stock (or property) held by an Employee either
becomes freely transferable of is no longer subject to a substantial risk of
forfeiture (see Section 83 and the regulations thereunder).
I-4
74
iii) Amounts realized from the sale, exchange, or other
disposition of stock under a qualified stock option.
iv) Other amounts which receive special tax benefits, such
as premiums for group term life insurance (but only to the extent that the
premiums are not includable in the gross income of the Employee), or
contributions made by an Employer (whether or not under a salary reduction
agreement) towards the purchase of an annuity contract described in Section
403(b) or under a Section 401(k) Plan (whether or not the contributions are
excludable from the gross income of the Employee).
If for a Plan Year the average of the ratios of the Compensation for
each Employee who is not a highly compensated employee to his compensation as
determined under Section 5.02 for such year is less than the corresponding
average of the ratios during such Plan Year for Employees who are highly
compensated employees, the Compensation of each Employee who is not a highly
compensated employee shall be his Compensation (including amounts deferred under
a Section 401(k) plan or Section 125 plan maintained by an Employer) plus 10%
of any bonus which is paid during such year.
If for a Plan Year the average of the ratios of the Compensation for
each Employee who is not a highly compensated employee as adjusted pursuant to
the preceding paragraph to his compensation as determined under Section 5.02 for
such year is less than the average of the ratios for such Plan Year of the
Compensation for each Employee which is a highly compensated employee to his
compensation as determined under Section 5.02 for such year, the Compensation of
each Employee who is not a highly compensated employee shall be his compensation
as determined under Section 5.02 for such year (including amounts deferred under
a Section 401(k) plan or Section 125 plan maintained by an Employer) but after
application of the second and third paragraphs of this Section 1.07).
I-5
75
1.08. "Eligible Spouse" shall mean a Participant's spouse if the Participant and
such spouse had been legally married (as determined in accordance with the laws
of the jurisdiction in which the Participant resides) throughout the one-year
period ending on the earlier of the date upon which payment of a Participant's
benefit commences whether by reason of retirement, disability or other
termination of employment with the Employer, or the date of the Participant's
death; provided, however, that if the Participant marries within one year before
his benefit starting date and the Participant and his spouse in such marriage
have been married for at least the one-year period ending on or before the date
of the Participant's death, the Participant and his spouse shall be treated as
having been married throughout the one-year period ending on the Participant's
benefit starting date.
1.09. "Employee" means any person who is employed by an Employer.
1.10. "Employer" means the Company. or any ERISA Affiliate that, with the
consent of the Company, hereafter adopts the Plan.
1.11. "Entry Date" means the first day of January in each year.
1.12. "ERISA" means the Employee Retirement Income Security Act of 1974, as
1.13. "ERISA Affiliate" means any organization (whether or not incorporated)
which, together with the Company, is a member of a controlled group of
corporations, is under "common control" or is a member of an "affiliated service
group" within the meaning of Sections 414(b), 414(c) and 414(m) of the Code,
respectively.
1.14. "Highly Compensated Employee" is an employee who during the Plan Year of
the preceding Plan Year satisfied on the following criteria: He is (was)
i) A five-percent owner;
ii) Earned more than $75,000;
I-6
76
iii) Earned more than $50,000 and was a member of the top
paid group (top twenty percent (20%)); or
iv) An officer with earnings greater than 50 percent of the
defined benefit annual dollar limit under Section 415(b)(1)(A) of the Code as
adjusted in accordance with regulations issued by the Secretary of the Treasury
or his delegates pursuant to Section 415(d) of the Code.
- The maximum number to be considered officers is the
lesser of (i) 50 employees, or (ii) the greater of three employees or ten
percent (10%) of all employees.
For purposes of the above, an employee is considered to meet one of the
last three criteria for the current year only if the employee met such criteria
for the preceding year or is one of the 100 highest paid employees for the
current year. The dollar amounts referred to in subparagraphs (ii) and (iii)
above shall be adjusted in accordance with regulations issued by the Secretary
of the Treasury or his delegate pursuant to Section 415(d) of the Code, such
adjustment to be effective for the Plan Year beginning in the calendar year for
which such adjustment is announced.
For this purpose, a former employee shall be treated as a
highly compensated employee if
A) such former employee was a highly compensated employee
when he terminated his employment, or
B) such former employee was a highly compensated employee
at any time after attaining age 55.
1.15. "Hour of Service" means:
I-7
77
a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for an Employer. These hours shall be
credited to the Employee for the computation period or periods in which duties
are performed; and
b) Each hour for which an Employee is paid, or entitled to
payment, by an Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. For purposes
of this paragraph (b) a payment shall be deemed to be made by or due from an
Employer regardless of whether such payment is made by or due from an Employer
directly, or indirectly through, among others, a trust fund or insurer to which
an 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 particular Employees 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 an Employer. The same Hours of
Service shall not be credited under both paragraph (a) or paragraph (b), as the
case may be, under this paragraph (c). These hours shall be credited to the
Employee for the computation period or periods to which the award or agreement
pertains rather than the computation period or periods in which the award,
agreement or payment is made. Crediting of Hours of Service for back pay or
agreed to with respect to periods described in paragraph (b) above shall be
subject to the limitations set forth in that paragraph.
d) No more than 501 Hours of Service shall be credited under
paragraphs (b) and (c) for the non-performance of duties for any single
continuous period (whether or not such period occurs in a single computation
period). Hours of Service hereunder shall be calculated and credited pursuant to
Section 2530.200b-2(b) and (c) of the Department of
I-8
78
Labor regulations which are incorporated herein by this reference. In crediting
Hours of Service hereunder, each Employee for whom the Employer does not
maintain hourly work records and who completes at least one Hour of Service
pursuant to paragraphs (a) (b) or (c) above) during any week shall be credited
with 45 Hours of Service for such week. For each other Employee, Hours of
Service shall be credited based on the number of hours actually worked. For the
purposes of this Section 1.15, the term Employee shall include all persons
employed by an Employer including employees covered by a collective bargaining
agreement and the term Employer shall include all ERISA Affiliates whether or
not they have adopted the Plan.
1.16. "Investment Manager" means any party that (i) is either (a) registered as
an investment adviser under the Investor adviser under the Investment Advisers
Act of 1940, or (b) a bank (as defined in the Investment Advisers Act of 1940),
or (c) an insurance company qualified to manager, acquire and dispose of Plan
assets under the laws of more than one state, (ii) acknowledges in writing that
it is fiduciary with respect to the Plan, and (iii) is granted the power to
manager, acquire or dispose of any asset of the Plan pursuant to Section 8.06 of
the Plan.
1.17. "Limitation Year" means the Plan Year.
1.18. "Normal Retirement Date" means the a Participant's 65th birthday and the
fifth anniversary of commencement of participation in the Plan.
1.19. "One-Year Break in Service" occurs during an eligibility or vesting
computation period in which an Employee has not completed more than 500 Hours of
Service. Solely for the purpose of determining whether an Employee has incurred
a One- year Break in Service, Hours of Service shall be counted for a temporary
leave of absence or a maternity or paternity absence.
"Temporary leave of absence" means an unpaid temporary cessation from
active employment pursuant to a temporary layoff, illness, disability, military
service or leave of
I-9
79
absence granted under a nondiscriminatory leave policy, whether occasioned by
illness, military service, or any other reason.
A "maternity or paternity absence" shall mean an absence from work for
any period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. Hours of Service shall be
credited for the Plan Year in which the Trustees are unable to determine such
hours normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a maternity or paternity absence shall not
exceed 501.
1.20. "Participant" means an Employee who becomes eligible to participate in
the Plan in accordance with the provisions of Article Two.
1.21. "Plan" means Xxxxx Associates Money Purchase Pension as set forth in this
document, and any amendments thereto.
1.22. "Plan Year" means the twelve (12) consecutive month period beginning on
January 1 and ending on the following December 31.
1.23. "Termination of Employment" means termination of employment with an
Employer, whether voluntarily or involuntarily, other than by reason of a
Participant's retirement after attaining his Normal Retirement Date, sustaining
Total and Permanent Disability, or his death.
1.24. "Total and Permanent Disability" means physical and/or mental incapacity
of such a nature that it is expected to prevent a Participant from engaging in
or performing the
I-10
80
principal duties of his customary employment or occupation on a continuing or
sustained basis.
1.25. "Transfer Account" means the separate account maintained for each
Participant reflecting contributions made pursuant to Appendix II of the Plan.
1.26. "Trust," "Trust Fund" or "Fund" means all monies received by the Trustees
from the Employer or Participants and held by them for investment purposes,
adjusted for any income, gain, losses or expenses in accordance with the Trust
Agreement.
1.27. "Trustee" or "Trustees" means the person or persons named as Trustees in
the Trust Agreement, or any additional or successor trustees as may be appointed
by the Company pursuant to Article Eight, and his, their, or its successors.
1.28. "Valuation Date" means the last business day of December and any such
additional date or dates as the Trustees, shall, from time to time, select.
1.29. "Year of Service" means a twelve (12) consecutive month period during
which an Employee is credited with at least one thousand (1,000) Hours of
Service, including periods prior to the effective date of the Plan. For purposes
of determining an Employee's eligibility for participation in the Plan and
vesting, the initial twelve (12) consecutive month period shall a) begin on the
first day on which such Employee is credited with an Hour of Service; and b)
subsequent twelve (12) consecutive month periods shall begin on anniversaries
thereof.
If prior to becoming and Participant, an Employee incurs a One-Year
Break in Service and if his number of One-Year Breaks in Service exceeds the
greater of the number of Years of Service he was credited with for eligibility
purposes prior to such Breaks in Service, or five (5), then if he again becomes
an Employee, his prior service shall be disregarded for eligibility purposes,
and the initial completion period for determining his eligibility for
participation following such One-Year Breaks in Service begin on the date such
Employee first completes an Hour of Service following such One-year Breaks in
Service.
I-11
81
Years of Service include (i) Years of Service prior to the effective
date of the Plan, (ii) Years of Service worked for the Company or an ERISA
Affiliate located outside the United States, and (iii) Years of Service credited
under the special provisions of Appendix I of the Plan, if applicable.
I-12
82
ARTICLE TWO
-----------
Participation And Service
-------------------------
2.01. PARTICIPATION. An Employee shall become a Participant on the January 1
coinciding with or next following his completion of six (6) continuous Months of
Service and attainment of age 21. For purposes of this section 2.01, a Month of
Service is any month in which an Employee is credited with at least one Hour of
Service.
Notwithstanding the foregoing, in no event shall an Employee become a
Participant in the Plan later than the January 1 nearest his completion of one
Year of Service.
2.02. TRANSFERS AND AUTOMATIC SUSPENSION OF PARTICIPATION. Each Employee who
becomes a Participant and subsequently is transferred to employment with an
ERISA Affiliate that has not adopted this Plan shall have his participation in
the Plan suspended for as long as he continues to be an Employee of such ERISA
Affiliate, subject to the following:
a) During any period of suspension, his service shall
accumulate as if employed by an Employer.
b) Except as provided in paragraph (c) below, the suspended
Participant's eligibility for distributions pursuant to Article Eleven and his
vested interest in his Accounts shall be determined when he ceases to be an
Employee of the Company and all ERISA Affiliates.
c) If a suspended Participant returns to employment as
an Employee, he shall be eligible to recommence participation in the Plan
immediately as of the date he returns to employment as an Employee.
2.03. RE-EMPLOYMENT. If an Employee who terminates service prior to becoming a
Participant again becomes an Employee, then if his prior eligibility service is
not disregarded under Section 1.29 and the Employee had previously completed on
Year of Service for
II-1
83
eligibility purposes he shall become a Participant in this Plan on his date of
re-employment, or, if later, on the date he would have otherwise become a
Participant had his employment not terminated.
If such Employee had not previously completed at least one Year of
Service for eligibility purposes, he shall become a Participant in this Plan in
accordance with Section 2.01 taking into account his prior service for
eligibility purposes.
If a former Participant should again become an Employee then he shall
reparticipate in the Plan immediately upon his rehire.
2.04. SPECIAL RULES. Notwithstanding the provisions of Sections 2.01 or 2.02
above, an Employee shall not be eligible to participate in this Plan if (A) he
is included in a unit of employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining agreement between employee
representatives and one or more employers, if there is evidence that retirement
benefits were the subject of good faith bargaining between such employee
representatives and such employer or employers, or (B) he is an Employee who is
a non-resident alien who receives no earned income (within the meaning of
Section 911(d)(2) of the Code) which constitutes income from sources within the
United States (within the meaning of Section 801(a)(3) of the Code), or (C) he
is employed as an outside contractor.
For purposes of this Section 2.04, in determining whether there is a
collective bargaining agreement between employee representatives and one or more
employers, the term "employee representative" shall not include any organization
more than one-half of the members of which are employees who are owners,
officers or executives of the employer.
II-2
84
ARTICLE THREE
-------------
Participant's Contributions
---------------------------
3.01. GENERAL RULE. Participants shall neither be required nor permitted to make
contributions to this Plan.
III-1
85
ARTICLE FOUR
------------
Contributions
-------------
4.01. EMPLOYER CONTRIBUTIONS.
a) For each Plan Year, the Employer shall contribute to the
Trust Fund on behalf of each Participant eligible to share in such contribution
pursuant to Section 5.01 an amount equal to (i) 5% of such Participant's
Compensation plus (ii) an amount equal to 4% of such Participant's Compensation
in excess of the OASDI contribution wage base as in effect at the beginning of
the Plan Year.
For purposes of this paragraph 4.01(a), the term "OASDI" means the
system of old-age, survivors and disability insurance established under Title II
of the Social Security Act and the Federal Insurance Contributions Act.
b) If greater than the amount produced by the formula in
Section 4.01(a) above for a Plan Year, then in lieu of the amount determined
under Section 4.01(a) above the Employer shall contribute with respect to such
year on behalf of each Participant eligible to share in such contribution
pursuant to Section 5.01 who is not considered a Highly Compensated Employee
within the meaning of Section 414(q) of the Internal Revenue Code and who earns
less than the compensation limit under Section 414(q)(1)(c) of the Internal
Revenue Code, an amount which shall be determined under the following schedule:
Contribution Percentage
Years of Service of Compensation
---------------- ---------------
0 to 5 years 5%
6 or 7 years 10%
8 to 14 years 12%
15 or more years 15%
IV-1
86
For purposes of this paragraph, a Participant's Years of Service with
respect to a Plan Year shall be such Participant's Years of Service for vesting
purposes determined as of the close of the Participant's vesting computation
period that ends coincident with or immediately before the end of such Plan
Year.
c) If greater than the amount produced by the formula in
Section 4.01(a) above for a Plan Year, then in lieu of the amount determined
under Section 401(a) above, the Employer shall contribute with respect to such
year on behalf of each Participant who is classified as a managing director of
the Company and who is eligible to share in such contribution pursuant to
Section 5.01, an amount which shall be determined under the following schedule:
Contribution Percentage
Managing Director Level of Compensation
----------------------- -----------------------
Xxxxx X 00.0
Xxxxx XX 00.0
Xxxxx XXX 11.0
Xxxxx XX 00.0
Xxxxx X 0.
Xxxxx XX 0.
Xxxxx XXX 0.
For purposes of this paragraph a Participant's "Level" shall be
determined by the Company on an annual basis pursuant to objective criteria
established by the Company which is used to compensate the managing director
group.
d) (i) In the event that contributions made to the Plan
pursuant to paragraphs 4.01(a), 4.01(b) and 4.01(c) above, and allocated
pursuant to paragraph 5.01 of the Plan, shall be deemed discriminatory under
section 401(a)(4) of the Internal Revenue Code, a contribution equal to .5% of
Compensation shall be made on behalf of those Participants who are not
considered Highly Compensated Employees within the meaning of
IV-2
87
Section 414(q) of the Internal Revenue Code and who earn less than the
Compensation limit under Section 414(q)(1)(c) of the Internal Revenue Code.
(ii) If after the contribution described in 4.01(d)(i)
above is allocated to Participants in accordance with Section 5.01(a) the Plan
does not satisfy the nondiscrimination requirements of Section 401(a)(4) of the
Internal Revenue Code, additional contributions shall be made to Participants
eligible to share in contributions pursuant to Section 5.01(a) of the Plan in
increments of .1% of Compensation until the Plan meets the requirements of such
Code Section.
4.02. EMPLOYER CONTRIBUTIONS IRREVOCABLE. Except as otherwise provided in this
Section 4.02 all contributions made by the Employer to the Fund shall be
irrevocable. Contributions made by the Employer are hereby conditioned upon
their deductibility under the Code for the taxable year of the Employer with
respect to which such contribution is made without the need for explicit action
by the Employer and, to the extent any deduction is disallowed for such taxable
year, the amount of such disallowance shall be returned to the Employer within
one (1) year after such disallowance. In the event a contribution is made by
reason of a mistake of fact, so much of the contribution as is attributable to
the mistake of fact shall be returned to the Employer within on e(1) year after
the payment of the contribution. The amount by which any contribution may be
returned pursuant to this Section 4.02 shall be reduced for any losses or
expenses of the Trust Fund attributable thereto.
If an Employer Contribution is made to the Plan which does not
initially qualify under Section 401(a) of the Code or any successor provision
thereto, then the contribution shall be returned to the Employer within one (1)
year after the date of denial of qualification of the Plan.
IV-3
88
4.03. TREATMENT OF CERTAIN FAMILY MEMBERS.
a) In General - If any individual is a member of the family of
a 5-percent owner of a Highly Compensated Employee in the group consisting of
the 10 Highly Compensated Employees paid the greatest compensation during the
Plan Year, then -- except as provided in Section 414(q)(6)(C)(ii) of the Code.
(i) such individual shall not be considered a separate
employee, and
(ii) any Compensation paid to such individual (and any
applicable contribution or benefit on behalf of such individual) shall be
treated as if it were paid to (or on behalf of) the 5-percent owner or Highly
Compensated Employee, as the case may be.
b) Family - For purposes of paragraph (a) above, the term
"family" means, with respect to any individual, such individual's spouse and
lineal ascendants or descendants and the spouses of such lineal ascendants or
descendants.
IV-4
89
ARTICLE FIVE
Allocation to Participant's Accounts
------------------------------------
5.01. METHOD OF ALLOCATING CONTRIBUTIONS. Contributions, if any, made by an
Employer, on behalf of a Participant pursuant to Section 4.01 for any Plan Year
shall be allocated to the Company Contribution Account of each such Participant
eligible to share in such contributions.
For purposes of this Section 5.01, a Participant shall be eligible to
share in contributions for a Plan Year if he has (A) completed at least 1,000
Hours of Service during such year and is employed on the last day of such year
or (B) died, retired on or after his Normal Retirement Date, or suffered a Total
and Permanent Disability during such year.
5.02. LIMITATION ON ANNUAL ADDITIONS.
a) Notwithstanding any other provision of the Plan, the sum of
the annual additions to a Participant's Account(s) for any Limitation Year shall
not exceed the lesser of (i) $30,000, or such other amount as may be permitted
by regulations prescribed by the Secretary of the Treasury or his delegate
pursuant to Section 415(d) of the Code, such adjustment to take effect in the
Limitation Year which ends in the calendar year in which such adjustment is
effective, or (ii) twenty-five percent (25%) of such Participant's Limitation
Year Compensation (including for this purpose Compensation earned during that
portion of the Limitation Year prior to the date an employee became a
Participant in the Plan). The term "annual additions to a Participant's
Account." for any Limitation Year, means the sum of (A) all Employer
contributions allocated pursuant to Section 5.01 to such Accounts, (B) all
forfeitures allocated pursuant to Section 11.03 to such Account(s), (C) all
suspense account amounts, if any, allocated pursuant to Section 5.02(c) to such
Account(s), and (D) any voluntary (post-tax) contributions allocated to such
Account(s). For purposes of applying
V-1
90
the dollar limitation of clause (i) above, annual additions shall also include
any amount credited to an individual medical account (as defined in Section
415(l) of the Code) or on behalf of a Participant, or to a Key Employee's
post-retirement medical benefit account (as referred to in Section 419A of the
Code) maintained by an Employer. In the case of a Limitation Year of less than
twelve (12) months' duration, the dollar limit of clause (i) above, as adjusted,
shall be proportionately reduced.
b) In the event it is determined the annual additions to a
Participant's Accounts for any Limitation Year would be in excess of the
limitations described in Section 5.02(a), such annual additions shall be reduced
as described in (c) below, to bring such annual additions within the limitations
contained in subsections 5.02(a).
c) To the extent necessary, amounts allocated to a
Participant's Accounts for such Limitation Year shall be held in a suspense
account (which shall share in earnings, losses, and expenses of the Trust Fund)
and shall be allocated in the following Limitation Year to the Accounts of
Participants as part of the Employer contributions for such Limitation Year.
d) All qualified defined contribution plans, terminated or
not, maintained by any Employer shall, for purposes of these limitations, be
considered as one plan, and all references in this Section 5.02 to a
Participant's Accounts shall include any accounts maintained for the Participant
under any other qualified defined contribution plan of any Employer. To the
extent necessary, "annual additions" to the Participant's account under other
defined contribution plans maintained by an Employer shall be reduced in
accordance with the terms of such Plans.
5.03. MULTIPLE PLAN REDUCTION.
a) If an Employee is a Participant in one or more qualified
defined benefit plans and one or more qualified defined contribution plans
maintained by any Employer, the
V-2
91
sum of the defined benefit plan fraction and the defined contribution plan
fraction for any Limitation Year may not exceed 1.0. The defined benefit plan
fraction for any Limitation Year is a fraction (I) the numerator of which is the
projected "annual benefit" (or, if greater, the "current accrued benefit" as
defined in Section 1106(i)(3) of the Tax Reform Act of 1986) of a Participant
under all defined benefit plan(s), determined as of the close of the Limitation
Year, and (II) the denominator of which is the lesser of: (1) the product of
1.25 multiplied by the maximum dollar limitation in effect under Section
415(b)(1)(A) of the Code for such Limitation Year, or (2) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Code for such Limitation Year. The defined contribution plan
fraction for any Limitation Year is a fraction (I) the numerator of which is the
sum of the "annual additions" to the Participant's combined accounts under all
defined contribution plan(s), determined as of the close of the Limitation Year,
and (II) the denominator of which is the sum of the lesser of the following
amounts determined for such Limitation Year and each prior year of service with
any Employer (including years prior to the effective date of this Plan): (1) the
product of 1.25 multiplied by the dollar limitation in effect under Section
415(c)(1)(A) of the Code for such Limitation Year (determined without regard to
Section 415(c)(6) of the Code), or (2) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(c)(1)(B) of the Code
for such Limitation Year.
b) Special Rule for defined contribution fraction: In applying
the provisions of Section 5.03(a) with respect to the defined contribution plan
fraction for any Plan Year ending after December 31, 1982, the amount taken into
account for the denominator for each Participant for all Plan Years ending
before January 1, 1983 shall be an amount equal to the product of the amount of
the denominator determined under Section 5.03(a) (as in effect for the Plan Year
ending in 1982) for Plan Years ending in 1982,
V-3
92
multiplied by the "transition fraction." This paragraph shall apply only if the
Plan was in existence on or before July 1, 1982.
For the purposes of the preceding paragraph, the term "transition
fraction" means a fraction (I) the numerator of which is the lesser of (1)
$51,875, or (2) 1.4 multiplied by twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year ending in 1981, and, (II) the denominator
of which is the lesser of (1) $41,500, or (2) twenty-five percent (25%) of the
Participant's Compensation for the Limitation Year ending in 1981.
Notwithstanding the foregoing, for any Top Heavy Plan Year, $41,500
shall be substituted for $51,875 in determining the "transition fraction."
c) Excessive Benefit: If the sum of the defined benefit plan
fraction and the defined contribution plan fraction exceeds 1.0 in any
Limitation Year for any Participant, the Company shall adjust the numerator of
the defined contribution plan fraction so that the sum of both fractions shall
not exceed 1.0 in any Limitation Year for such Participant. The adjustment shall
be made as provided in Sections 5.02(b).
The Company may also modify the defined contribution fraction in
accordance with Section 1106(i)(4) of the Tax Reform Act of 1986 with respect to
any Participant.
d) For the purpose of Section 5.02 and this Section 5.03, the
term Employer shall include all ERISA Affiliates (as defined in Section 1.13 of
the Plan, as modified, as required by Section 415(h) of the Code as it applies
to Sections 414(b) and (c) thereof) whether or not they have adopted the Plan.
5.04. CESSATION OF PARTICIPANT STATUS. If any Participant ceases to be eligible
to participate in the Plan by reason of becoming included in a unit of
employees covered by a collective bargaining agreement described in Section
2.04 of the Plan, then unless the applicable collective bargaining agreement
otherwise provides, during the period of such coverage (i) the Accounts of such
Participant shall not receive further allocations of any contributions, or
V-4
93
suspense amounts under the Plan, and (ii) the Accounts of such Participant
shall, however, continue to share in the earnings or losses of the Trust Fund.
V-5
94
ARTICLE SIX
-----------
Investment of Plan Assets
-------------------------
6.01. FUNDING POLICY. The Committee shall establish a funding policy and method
consistent with the objectives of the Plan and the requirements of Title I of
ERISA. The Committee shall meet at least annually to review such funding policy
and method. All actions of the Committee, and the reasons therefor, taken
pursuant to this Section 6.01 shall be recorded in the minutes of the meeting of
the Committee.
6.02. INVESTMENT OF TRUST FUND. The Committee or Investment Manager shall have
the sole and complete discretion with respect to the management and control of
the Trust Fund. The Committee may reserve from investment such amounts of cash
as they, from time to time, deem necessary or advisable in the administration of
the Trust Fund.
VI-1
95
ARTICLE SEVEN
-------------
Participant's Accounts
----------------------
7.01. SEPARATE ACCOUNTS. There shall be maintained for each Participant separate
Accounts reflecting amounts allocated only on behalf of such Participant. All
payments to a Participant or his Beneficiaries shall be charged against the
Accounts of such Participant. These Accounts will consist of the Participant's
Company Contribution Account and Transfer Account, if any.
7.02. ALLOCATION. All interest and dividend income, gains, and losses, with
respect to a Participant's Accounts, shall be allocated to each such
Participant's Accounts as soon as practicable after they accrue or arise in
proportion to the account values of such Accounts which are invested in the
accumulation facilities from which such interest, dividend income, gains, and
losses accrue or arise. Any expenses of the Plan or of the Trust Fund, to the
extent that they are not otherwise paid by an Employer shall be paid by the
Trust Fund and charged against the Accounts of Participants in proportion to
Account balances at the beginning of the month in which such charges arise.
7.03. VALUATION. The account value of a Participant's Accounts shall be
determined for each allocation, distribution, or withdrawal, at each Valuation
Date, or at any other time as may be deemed necessary by the Committee. The
assets of the Trust Fund shall be valued at their fair market value.
VII-1
96
ARTICLE EIGHT
-------------
Administration
--------------
8.01. APPOINTMENT OF THE COMMITTEE. The Company shall appoint a
Committee. The Committee shall be responsible for the management, operation and
administration of the Plan. Any member of the Committee may resign upon (10)
days prior written notice to the Board of Directors of the Company. The Company
shall be authorized to remove any member of the Committee at any time and in its
sole discretion to appoint a successor whenever a vacancy on the Committee
occurs. In the event that the Company does not appoint a Committee, the Company
shall act as the Committee and perform all duties of the Committee as described
herein.
8.02. RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN. The Committee
shall be responsible for the management, operation and administration of the
Plan. The Company shall be the "named fiduciary" as provided in Section 402(a)
of ERISA.
8.03. RESPONSIBILITY FOR ADMINISTRATION OF THE TRUST FUND. The
Committee shall be responsible for the management and control of the assets of
the Trust Fund.
8.04. DELEGATION OF POWERS. The Committee may appoint such assistants
or representatives as it deems necessary for the effective exercise of its
duties in accordance with the Plan and Trust. The Committee may delegate to such
assistants and representatives any power and duties, both ministerial and
discretionary, as they deem expedient or appropriate.
8.05. RECORDS. All acts and determinations with respect to the
administration of the Plan made by the Committee, and any of its appointed
assistants or representatives, shall be duly recorded by the Committee or by the
assistants or representatives appointed to keep such records. All records,
together with such other documents as may be necessary for the
VIII-1
97
administration of the Plan, shall be preserved in the custody of the Committee
or the assistants or representatives appointed by it.
8.06. GENERAL ADMINISTRATIVE POWERS. The Committee shall have all
powers necessary to administer the Plan in accordance with its provisions,
including the power to construe the Plan and its provisions and determine all
questions that may arise thereunder.
8.07. APPOINTMENT OF PROFESSIONAL ASSISTANTS AND INVESTMENT MANAGER.
The Committee may engage accountants, recordkeepers, attorneys, physicians and
such other personnel as it deems necessary or advisable. The Committee may, in
their sole discretion, appoint one or more Investment Manager(s) to manage
(including the power to acquire or dispose of) all or any of the assets of the
Trust. The functions of any such persons engaged by the Committee shall be
limited to the specific services and duties for which they are engaged, and such
persons shall have no other duties, obligations or responsibilities under the
Plan or Trust. Such persons shall exercise no discretionary authority or
discretionary control with respect to the administration of the Plan. The fees
and costs of such services are an administrative expense of the Plan to be paid
out of the Trust Fund, except to the extent such fees and costs are paid by the
Company.
8.08. ACTIONS BY THE COMMITTEE. All actions of the Committee shall be
taken pursuant to the decision of the majority of the then members of the
Committee. Such action may be taken at a meeting of the Committee duly called
and held, or by written consent in lieu of a meeting.
8.09. DIRECTIVES OF THE COMMITTEE. Directives of the Committee shall be
in writing and signed by an appropriate member of the Committee.
8.10. DISCRETIONARY ACTS. Any discretionary actions of the Committee or
the Company with respect to the administration of the Plan and Trust shall be
made in a manner which does not discriminate in favor of stockholders, officers
or highly compensated
VIII-2
98
employees. In the event the Committee exercises any discretionary authority
under the Plan and Trust with respect to a Participant who is a member of the
Committee, such discretionary authority shall be exercised solely and
exclusively by those Participants of the Committee other than such Participant,
or, if such Participant is the sole member of the Committee, such discretionary
authority shall be exercised solely and exclusively by the Board of Directors of
the Company.
8.11. RESPONSIBILITY OF FIDUCIARIES. The members of the Committee, and
their assistants and representatives (other than any Investment Manager), shall
be free from all liability for their acts and conduct in the administration of
the Plan and Trust except for acts of willful misconduct; provided, however,
that the foregoing shall not relieve any of them from any liability for any
responsibility, obligation or duty they may have pursuant to ERISA or the Code.
8.12. INDEMNITY BY COMPANY. In the event of and to the extent not
insured against by any insurance company pursuant to provisions of any
applicable insurance policy, the Company shall indemnify and hold harmless, to
the extent permitted by law, the members of the Committee and their assistants
and representatives (other than assistants and Investment Managers appointed
under 8.07) from any and all claims, demands, suits, proceedings, costs, losses
or damage which may in connection with the Plan or Trust be brought by the
Employers, Employees, Participants or their Beneficiaries or legal
representatives, or by any other person, corporation entity, government or
agency thereof; provided, however, that such indemnification shall not apply to
any such person for such person's acts of willful misconduct in connection with
the Plan or Trust.
8.13. PAYMENT OF FEES AND EXPENSES. The members of the Committee and
their assistants and representative shall be entitled to payment from the Trust
Fund for all reasonable costs, charges and expenses incurred in the
administration of the Plan and Trust,
VIII-3
99
including, but not limited to, reasonable fees for accounting, legal and other
services rendered, as may be incurred by the members of the Committee or their
assistants and representatives in the course of performance of their duties
under the Plan and the Trust, except to the extent that such fees and costs are
paid by the Company. Notwithstanding any other provision of the Plan or Trust,
no person who is a fiduciary of the Plan, within the meaning of Section 3(21) of
ERISA, and who receives full-time pay from an Employer or ERISA Affiliate shall
receive compensation from the Trust Fund, except for reimbursement of expenses
properly and actually incurred.
8.14. PLAN ADMINISTRATOR. The Company shall be the "administrator" (as
defined in Section 3(16)(A) of ERISA) of the Plan, and shall be responsible for
the performance of all reporting and disclosure obligations under ERISA and all
other obligations required or permitted under ERISA to be performed by the Plan
administrator. The Plan administrator shall be the designated agent for service
of legal process.
8.15. ALLOCATION AND DELEGATION OF COMMITTEE RESPONSIBILITIES. The
Committee may upon approval of a majority of the members of the Committee, (i)
allocate among the members of the Committee any of the responsibilities of the
Committee under the Plan or (ii) designate any person, Company or corporation
that is not a member of the Committee to carry out any of the responsibilities
of the Committee under the Plan and Trust. Any such allocation of designation
shall be made pursuant to a written instrument executed by a majority of the
members of the Committee.
8.16. APPOINTMENT OF COMMITTEE. The Company shall appoint the Trustee
or Committee of this Plan. Any such appointment may be revoked or modified by
the Company at any time, and a new appointment of successor and additional
Committee may be made hereunder.
VIII-4
100
Notwithstanding the foregoing, appointment of Committee shall not be
required to the extent that all the assets of the plan are invested in insurance
contracts or policies insured by an insurance company qualified to do business
in a State. For this purpose the term State shall be defined in accordance with
Section 3(10) of ERISA.
VIII-5
101
ARTICLE NINE
------------
Retirement and Death Benefits
-----------------------------
9.01. RETIREMENT BENEFITS. A Participant's Company Contribution Account shall
fully (100%) vest upon the attainment of his Normal Retirement Date (A) while
employed by the Company or an ERISA Affiliate or (B) during a maternity or
paternity absence. If the Participant continues in the employ of an Employer
after his Normal Retirement Date, he shall continue to be a Participant in the
Plan until his actual retirement. Each such Participant shall be entitled to
receive benefits equal to the total amount in his Accounts upon his retirement
after his attainment of his Normal Retirement Date.
9.02. DEATH BENEFITS. (a) Upon the death of a Participant while in the employ of
an Employer or any ERISA Affiliates, or during a maternity or paternity absence,
his Beneficiary shall be entitled to receive benefits equal to the total amount
in the deceased Participant's Accounts, plus the proceeds of any life insurance
maintained under the Plan on the life of the Participant. Upon the death of a
Participant after terminating employment with his Employer and all ERISA
Affiliates, but not during a maternity or paternity absence and before his
annuity starting date, his Beneficiary shall be entitled to receive a benefit
equal to the vested portion of the Participant's Accounts. Payment of the
foregoing death benefits shall be made in a single lump sum to the deceased
Participant's Beneficiary or Beneficiaries as soon as possible, provided,
however, that if the value of such death benefit exceeds $3,500, then a
Beneficiary may elect to defer such distribution to a date not later than the
end of the calendar year in which the fifth anniversary of the Participant's
death occurs; and further provided, however that if upon his death the
Participant was married to an Eligible Spouse, then 50% of such death benefit
(including the proceeds of any insurance policies maintained under the Plan on
the life of the Participant) shall be paid in the form of a Qualified Pre-
IX-1
102
Retirement Survivor Annuity to such Eligible Spouse unless the Participant
waives the Qualified Pre-Retirement Survivor Annuity and such waiver is
consented to by his Eligible Spouse. If the value of the Eligible Spouse's death
benefit exceeds $3,500, then the Qualified Pre-Retirement Survivor Annuity shall
commence within a reasonable time after the Participant's death, unless the
Eligible Spouse elects to defer commencement of the distribution of such benefit
until a date not later than the date that the Participant would have attained
age 70-1/2. Alternatively, an Eligible Spouse may elect that the Qualified
Pre-Retirement Survivor Annuity to which she is entitled be paid to her as a
lump sum as of any Valuation Date following the Participant's death and prior to
the date the Participant would have attained age 70-1/2. If the value of the
Qualified Pre-Retirement Survivor Annuity is $3,500 or less, then such benefit
shall be paid to the Participant's Eligible Spouse in a single lump sum as soon
as is practicable following the Participant's death, but in no event later than
the end of the calendar year in which the first anniversary of the Participant's
death occurs. The waiver by the Participant of the Qualified Pre-Retirement
Survivor Annuity, and such spouse's consent to such waiver, shall be obtained in
the manner described in Section 12.03(c). If a Participant's Eligible Spouse
dies before payment of the Qualified Pre-Retirement Survivor commences, such
benefit shall be paid to the Participant's Beneficiary as aforesaid.
(b) Upon the death of a Participant after his annuity starting
date, his Beneficiary shall be entitled to the benefits, if any, provided under
any contingent annuity provision then in effect or, if the Participant was being
paid in installments, the Beneficiary shall be entitled to receive the remaining
undistributed installments of the Participant's benefit, or if the Beneficiary
elects, such remaining installments shall be paid to the Beneficiary in a single
lump sum as soon as is practicable after the date of the Participant's death but
in all
IX-2
103
events at least as rapidly as under the installment payment method that
was in effect to the Participant while he was alive.
For the purposes of this Plan, the term Qualified Pre-Retirement
Survivor Annuity shall mean an annuity payable monthly to a Participant's
Eligible Spouse for her life, the actuarial value of which is not less than 50%
of the value of the non-forfeitable portion (as determined on the date of a
Participant's death) of the Participant's Accounts (including the proceeds of
any insurance policies maintained under the Plan on the life of the
Participant).
IX-3
104
ARTICLE ELEVEN
--------------
Termination Benefits
--------------------
11.01. VESTED BENEFITS. A Participant shall have a non-forfeitable right to a
percentage of his Company Contribution Account under the following schedule:
Non-forfeitable
Years of Service Percentage
---------------- ---------------
0 but less than 2 yrs. 0%
2 but less than 3 yrs. 20%
3 but less than 4 yrs. 40%
4 but less than 5 yrs. 60%
5 but less than 6 yrs. 80%
6 yrs. or more 100%
A Participant's Company Contribution Account shall be one hundred percent (100%)
non-forfeitable upon his death, Total and Permanent Disability, or attainment of
Normal Retirement Date while (A) employed by the Company or an ERISA Affiliate,
or (B) while on a maternity or paternity leave of absence. A Participant's
Transfer Account will be 100% fully vested at all times.
11.02. NON-INCLUDABLE SERVICE. The following rules shall apply to the
determination of a Participant's non-forfeitable percentage:
a) Years of Service before any series of One-Year Breaks in
Service shall be disregarded if a Participant terminates employment, has no
non-forfeitable interest in his benefits, and incurs a consecutive series of
One-Year Breaks in Service that equals or exceeds the greater of:
i) his Year of Service prior to such consecutive One-year
Breaks in Service; or
ii) five (5).
XI-1
105
b) Years of Service after any five (5) consecutive year
One-Year Breaks in Service shall not increase the non-forfeitable percentage of
the Participant's Company Contribution Account which accrued before such
One-Year Breaks in Service.
11.03. FORFEITURES. The non-forfeitable portion of a Participant's Company
Contribution Account shall be forfeited at the time the Participant incurs a
consecutive series of One-Year Breaks in Service of five (5) years, or if
earlier, at the time the Participant receives a lump sum distribution of the
non- forfeitable portion of his benefit on account of his termination of
participation in the Plan. A distribution shall be deemed to be made on account
of his termination of participation in this Plan if such distribution is made
prior to the close of the second Plan Year following the Plan Year in which such
termination occurs. A Participant who incurs a Termination of Employment without
a vested interest in his Accounts shall be deemed to receive a lump sum
distribution of the vested portion of his Accounts on the date of such
Termination of Employment.
Forfeitures arising under this Section 11.03 shall be used to reduce
Employer contributions under Section 4.01 in the year in which such forfeitures
arise.
11.04 DISTRIBUTION AND RE-EMPLOYMENT BEFORE A BREAK IN SERVICE. In the
event that a former Participant who was not one hundred (100%) vested in his
Company Contribution Account, and who received a lump-sum distribution upon his
Termination of Employment prior to the time he incurred consecutive One-Year
Breaks in Service of five (5) years and who forfeited a portion of his Company
Contribution Account upon such distribution, is reemployed by the Company or an
ERISA Affiliate prior to the time he incurs a consecutive series of One-Year
Breaks in Service of five (5) years, such Participant may elect on a form
prescribed by the Committee to repay to the Plan in cash, on any Valuation Date
prior to the earlier of (A) the fifth anniversary date of re-employment or (B)
his incurring a consecutive series of One-Year Breaks in Service of five (5)
years, the full amount distributed
XI-2
106
to him upon his prior Termination of Employment. In such event, the amount
repaid plus the amount forfeited by such Participant upon his prior Termination
of Employment will be restored and credited to his Company Contribution Account
as of such Valuation Date. Any forfeited amounts so restored shall be derived,
to the extent necessary and in the following order, from:
a) The amount, if any, of Participant forfeitures that would
otherwise be allocated under Section 11.03;
b) The amount, if any, of the Trust Fund net income or gain
for the Plan Year.
To the extent the amount(s) available for restoration for a particular
Plan Year is insufficient to enable the Administrative Committee to make the
required restoration, the Employer shall contribute, without regard to any
requirement or condition of Article Four, such additional amount as is necessary
to enable the Administrative Committee to make the required restoration. If, for
a particular Plan Year, the Administrative Committee must restore the Company
Contribution Account of more than one (1) reemployed Participant, then the
Administrative Committee shall make the restoration allocation(s) to each such
Participant's Company Contribution Account in the same proportion that a
Participant's restored amount for the Plan Year bears to the aggregate restored
amount for the Plan Year of all re-employed Participants. The Administrative
Committee shall not take into account the allocation(s) under this Section 11.04
in applying the limitations set forth in Sections 5.02 and 5.03.
XI-3
107
ARTICLE TWELVE
--------------
Payment of Benefits
-------------------
12.01. RETIREMENT BENEFITS. The Administrative Committee shall direct that the
distribution of the benefits payable to a Participant upon his retirement after
attaining his Normal Retirement Date, or to his Beneficiary upon his death,
commence as soon as practicable after the Valuation Date coincident with or next
following such event based upon the balance in such Participants Accounts as of
such Valuation Date. A Participant who retires after his Normal Retirement Date
and whose benefit exceeds $3,500 may elect to postpone commencement of the
distribution of his benefit until the date prescribed in Section 12.06.
12.02. DISTRIBUTION UPON TERMINATION OF EMPLOYMENT OR TOTAL AND PERMANENT
DISABILITY. When a Participant incurs a Termination of Employment or a Total and
Permanent Disability, his benefits shall be held by the Administrative Committee
until the earlier of (A) the later of his Normal Retirement Date or 62nd
birthday, or (B) his death. In such case, the Participant's benefits shall be
paid in accordance with Section 12.03 or 12.04 as soon as is practicable after
the Valuation Date coincident with or next following such event, based upon the
balance in such Participant's Accounts as of such Valuation Date.
Notwithstanding any other provision of this Plan to the contrary, the
Administrative Committee shall begin to distribute a former Participant's
benefit as of any Valuation Date coincident with or following his Termination
of Employment or Total and Permanent Disability, as the case may be, but prior
to the date otherwise determined in accordance with the preceding paragraph as
the Participant selects, provided, however, that if a Participant's benefit is
greater than $3,500 then distribution of such benefit may not commence prior to
the date the Participant would have reached his Normal Retirement Date, or his
62nd birthday, if
XII-1
108
later, unless the Participant consents and, in the case of a Participant who
has an Eligible Spouse and whose benefit is not being paid in the form of a
Qualified Joint and Survivor Annuity, the Participant's Eligible Spouse also
consents. Such consent shall be obtained in the manner described in Section
12.03(c).
A Participant who incurs a Termination of Employment or a Total and
Permanent Disability and whose benefits exceed $3,500 may elect to postpone the
commencement of his benefit until the date prescribed in Section 12.06.
Notwithstanding the above, if the value of a Participant's benefit
is not more than $3,500, his benefit shall be distributed in a single lump sum
as soon as practicable following his Termination of Employment or Total and
Permanent Disability, as the case may be.
12.03. METHODS OF PAYMENT OF BENEFITS
a) Unless otherwise waived as provided below, (i) a
Participant who has an Eligible Spouse on the annuity starting date shall
receive the value of his benefit in the form of a Qualified Joint and Survivor
Annuity, and (ii) a Participant who does not have an Eligible Spouse on the
annuity starting date shall receive the value of his benefit in the form of an
annuity for his life only ("Life Annuity").
b) Such Qualified Joint and Survivor Annuity shall be an
annuity payable for the life of the Participant, with a survivor annuity payable
to his Eligible Spouse for her lifetime following the Participant's death at a
rate equal to 50% of the amount payable to the Participant while he lived.
c) A waiver of the Qualified Joint and Survivor Annuity or
Life Annuity, or a waiver of the Qualified Pre-Retirement Survivor Annuity must
be made by the Participant in writing during the applicable election period and,
in the case of a waiver of the Qualified Joint and Survivor Annuity or Qualified
Pre-Retirement Survivor Annuity, must be consented to by the Participant's
Eligible Spouse. Any waiver by a Participant who has an Eligible Spouse of
XII-2
109
a Qualified Joint and Survivor Annuity or a Qualified Pre-Retirement Survivor
Annuity, as the case may be, must designate a specific alternative beneficiary
and/or form of benefit payment with respect to the benefit that would otherwise
be payable to such Eligible Spouse. Such alternative beneficiary and/or form of
benefit payment may not be changed by the Participant without the further
consent of the Participant's Eligible Spouse unless her original consent
expressly permits the Participant to select at any time a new alternative
beneficiary and/or form of benefit payment without the need of such Eligible
Spouse's further consent. Any such waiver may be revoked by the Participant
during the applicable election period (as defined below) without the consent of
his Eligible Spouse. Any new waiver thereafter must comply with the waiver and
consent requirements of this paragraph. Any consent referred to in this
paragraph by a Participant's Eligible Spouse shall be irrevocable. The consent
of a Participant's Eligible Spouse shall acknowledge the effect thereof, and
shall be witnessed by a Plan representative or notary public. A consent by a
Participant's Eligible Spouse shall not be required if it is established to the
satisfaction of the Committee that the required consent cannot be obtained
because there is no Eligible Spouse, or the Eligible Spouse cannot be located,
or in other circumstances that may be prescribed by the Secretary of the
Treasury.
d) The applicable period to waive the Qualified Joint and
Survivor Annuity or Life Annuity shall be the 90 day period ending on the
"annuity starting date." The applicable period to waive the Qualified
Pre-Retirement Survivor Annuity shall begin on the first day of the Plan Year in
which the Participant attains age 35 and shall end on the date of the
Participant's death, provided, however, that in the case of a Participant who
has separated from service, such applicable period with respect to benefits
accrued before such separation shall begin not later than the date upon which
separation from service occurs.
e) For purposes of this Plan, the "annuity starting date"
means the first day of the first period for which an amount is payable as an
annuity (whether by reason of
XII-3
110
retirement, termination of employment, or disability), or, in the case of a
benefit not payable in the form of an annuity, the first date on which all
events have occurred which entitle a Participant to such benefit.
f) With regard to the waiver described in paragraph (a) above,
the Administrative Committee shall provide the Participant within a reasonable
period of time before the annuity starting date (and consistent with Treasury
regulations), a written explanation of:
i) the terms and conditions of the Life Annuity or
Qualified Joint and Survivor Annuity.
ii) the Participant's right to waive the Life Annuity or
Qualified Joint and Survivor Annuity,
iii) the right of the Participant's Eligible Spouse to
consent to any waiver of the Qualified Joint and Survivor Annuity, and
iv) the right of the Participant to revoke such waiver, and
the effect of such revocation.
g) Notwithstanding the foregoing, if the lump sum value of the
Participant's benefit is not more than $3.500, then prior to the Participant's
annuity starting date the Administrative Committee shall direct the immediate
distribution of such benefit in a single lump sum to the Participant. If the
value of the Participant's benefit exceeds $3,500 then an immediate lump sum
distribution may not be made unless the Participant consents and if the
Participant has an Eligible Spouse, such Eligible Spouse consents, to such
distribution in the same manner as set forth in Section 12.03(c).
12.04. OPTIONAL FORMS OF BENEFIT PAYMENT. If a waiver of the Qualified Joint and
Survivor Annuity is in effect with regard to a Participant who has an Eligible
Spouse, or a waiver of the Life Annuity is in effect with regard to a
Participant who does not have an Eligible
XII-4
111
Spouse, or if such Participant does not have an Eligible Spouse, the
Participant may direct the Administrative Committee to distribute the value of
his benefit in one or more of the following forms:
a) Benefits payable on account of a Participant's retirement
on or after his Normal Retirement Date, or on account of Total and Permanent
Disability, or Termination of Employment may be in the form of a lump sum.
b) Benefits payable on account of a Participant's retirement
on or after his Normal Retirement Date, or on accounts of Total and Permanent
Disability or Termination of Employment may be paid in the form of installments
(payable at least annually) over a period not to exceed the lesser of ten years
(or the life expectancy of the Participant and his Beneficiary if applicable).
Benefits payable in accordance with 12.04 a) or b) above may
be distributed, as permitted by regulation, in accordance with
Section 12.11 of the Plan.
In all events the present value of the portion of the benefit payable
to the Participant shall be greater than fifty percent (50%) of the total
benefit payable to the Participant and his Beneficiary unless the Participant's
Beneficiary is his Eligible Spouse, and the distribution of a Participant's
benefit (or the distribution of any benefit payable upon the death of a
Participant) shall comply with the provisions of Section 401(a)(9) of the Code
and regulations published thereunder. This paragraph shall be administered in
accordance with the Minimum Distribution Incidental Benefit Requirements of Reg.
Section 1-401(a)(9)-2, and shall apply notwithstanding any other contrary
provisions in this Plan.
12.05. TIME OF PAYMENT. All benefits payable under the Plan shall be paid or
provided for solely by the Fund. Neither the Company nor any other Employer
assumes any liability or responsibility therefor. Notwithstanding any provision
hereof, and unless the Participant
XII-5
112
otherwise elects, in no event shall the payment of benefits commence later than
sixty (60) days after the close of the Plan Year in which occurs the latest of:
a) the Participant reaching his Normal Retirement Date;
b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or,
c) the Participant's termination of employment.
12.06. REQUIRED BEGINNING DATE. Notwithstanding any other provision of this Plan
to the contrary, other than paragraph (B) below, (A) in the case of a
Participant who attains age seventy and one-half (70-1/2) after December 31,
1987, his benefits shall commence no later than April 1 of the calendar year
following the calendar year in which he attains age seventy and one-half
(70-1/2)), and (B) in the case of a Participant who attains age seventy and
one-half (70-1/2) before January 1, 1988, his benefits shall commence no later
than April 1 of the calendar year following the later of (i) the calendar year
in which he attains age seventy and one-half (70-1/2), or (ii) the earlier
of (I) the calendar year with or within which ends the Plan Year in which he
becomes a "5% percent owner" or (II) the calendar year in which he retires. For
purposes of this Section 12.06, a Participant shall be considered to be a "5%
owner" if during the Plan Year in which such Participant attains age sixty-six
and one-half (66-1/2) or any subsequent Plan Year the Participant is a 5% owner
within the meaning of Section 416 of the Code, ignoring for this purpose Plan
Years beginning before January 1, 1980. The amount to be distributed pursuant
to this Section 12.06(a) shall be the minimum amount required with respect to
such Participant for each year under Section 401(a)(9) of the Code, and
regulations issued thereunder by the Secretary of the Treasury or his delegate.
This paragraph shall be administered in accordance with Section 401(a)(9) of
the Code and regulations issued thereunder by the Secretary of the Treasury or
his delegate. For purposes of this paragraph (a), if a Participant who is not a
"5% owner" and who has not retired prior
XII-6
113
to January 1, 1989, attains age 70-1/2 during 1988, he shall be deemed to have
retired on January 1, 1989 so that his benefits shall commence by April 15,
1990.
12.07. DESIGNATION BY PARTICIPANT. Each Participant may designate one or more
Beneficiaries and contingent Beneficiaries by delivering a written designation
thereof to the Administrative Committee. Upon the death of a Participant, his
Beneficiaries shall be entitled to payment of benefits in an amount and in the
manner provided in the Plan. A Participant may change his Beneficiary
designation at any time by delivering a new written designation to the
Administrative Committee. The most recent designation received by the
Administrative Committee shall Supersede all prior designations. A designation
of Beneficiary shall be effective only if the designated Beneficiary survives
the Participant.
12.08. FAILURE OF PARTICIPANT TO DESIGNATE. If a Participant fails to designate
a Beneficiary, in accordance with Section 12.07, or if no designated Beneficiary
survives the Participant, the Participants spouse, if he is married at the date
of his death, shall be deemed to be his designated Beneficiary. If, under such
circumstances, the Participant is not married at the date of his death, his
designated Beneficiary shall be deemed to be his estate.
12.09. BENEFICIARY'S RIGHTS. Whenever the rights of a Participant are stated or
limited in the Plan, his Beneficiary or Beneficiaries shall be bound thereby.
12.10. UNCLAIMED ACCOUNT PROCEDURE. The Plan does not require the Administrative
Committee to search for, or ascertain the whereabouts of, any Participant or
Beneficiary. The Employer, by certified or registered mail addressed to his last
known address of record with the Administrative Committee, shall notify any
Participant or Beneficiary that he is entitled to a distribution under the Plan.
If the Participant or Beneficiary fails to claim his Accounts or make his
whereabouts known in writing to the Administrative Committee within twelve (12)
months of the date of mailing of the notice, or before the termination or
discontinuance of the Plan, whichever should first occur, the Administrative
Committee shall
XII-7
114
treat the Participant's or Beneficiary's unclaimed Accounts as forfeited and
shall apply such Accounts as provided in Section 11.03 for the Plan Year in
which such forfeiture occurs. If a Participant or Beneficiary who has incurred a
forfeiture of his Accounts under the provisions of this Section 12.10 makes a
claim, at any time, for its forfeited Accounts, the Administrative Committee
shall direct the Employer to restore the Participant's or Beneficiary's
forfeited Accounts to the same dollar amount as the dollar amount of the
Accounts so forfeited, unadjusted for any gains or losses occurring subsequent
to the date of forfeiture. The Employer shall make the restoration within sixty
(60) days after the close of the Plan Year in which the Participant or
Beneficiary makes such claim.
12.11. DISTRIBUTION OF ACCOUNTS.
Notwithstanding any other provisions of the Plan to the contrary,
amounts held in a Participant's Accounts may not be distributed to the
Participant or his Beneficiary earlier than upon the Participant's retirement,
death, Total and Permanent Disability, or Termination of Employment.
12.12. DIRECT ROLLOVER PROVISIONS.
This Section applies to distributions made on or after January 1, 1993.
Notwithstanding any provisions of the Plan 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 plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(a) Definitions
(i) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or
XII-8
115
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 often years or more; any distribution to the extent
such distribution is required under Section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(ii) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(iii) Distributee: A distributee includes an employee or
former employee. In addition. the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse who is
the alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(iv) Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
XII-9
116
ARTICLE THIRTEEN
----------------
Claims Procedure
----------------
13.01. CLAIMS PROCEDURE. The Board of Directors of the Company shall establish a
procedure for the resolution of disputes and dispositions of claims arising
under the Plan. Until modified by the Board of Directors of the Company, this
procedure is as follows:
Any of the Employees, former Employees, or any Beneficiaries of such
Employees or former Employees may, if they so desire, file with the
Administrative Committee a written claim for benefits under the Plan. Within
ninety (90) days after the filing of such a claim, the Administrative Committee
shall notify the claimant whether his claim is upheld or denied. The
Administrative Committee may, under special circumstances, extend the period of
time for processing a claim by an additional ninety (90) days. If such an
extension of time is required, written notice shall be furnished to the claimant
or his duly authorized representative prior to the termination of the initial
ninety (90) day period. Such notice will indicate the special circumstance
requiring an extension. In the event the claim is denied, the Administrative
Committee shall state in writing:
a) the specific reasons for the denial;
b) specific references to pertinent Plan provisions on
which the denial is based;
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 claim review procedure set forth
in this Section 13.01.
XIII-1
117
Within sixty (60) days after receipt of notice that his claim has been
denied, the claimant or his duly authorized representative may file with the
Administrative Committee a written request for a review hearing and may, in
conjunction therewith, submit written issues and comments. The Administrative
Committee shall then schedule, within sixty (60) days after the filing of such
request, a full and fair hearing of the claim. The Administrative Committee may,
under special circumstances, extend such period of time by an additional sixty
(60) days. Prior to said hearing, the claimant or his representative shall have
a reasonable opportunity to review a copy of the Plan, the Trust agreement, and
other pertinent documents in the possession of the Administrative Committee. The
Administrative Committee shall communicate their decision in writing to the
claimant within thirty (30) days after the hearing. Any claim for benefits and
any request for a review hearing hereunder must be filed on forms to be
furnished by the Administrative Committee upon a Participant's request.
XIII-2
118
ARTICLE FOURTEEN
----------------
Inalienability of Benefits
--------------------------
14.01. INALIENABILITY OF BENEFITS.
a) Subject to the exceptions provided below, no benefit which
shall be payable out of the Trust Fund to any person (including a Participant or
his Beneficiary) (i) shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void, or (ii) shall be subject to the debts, contracts,
liabilities, engagements or torts of any such person, or shall be subject to
attachment or legal process for or against such person, and the same shall not
be recognized by the Administrative Committee.
b) This provision shall not apply to a "qualified domestic
relations order" which meets the requirements of Code Section 414(p), nor to
those other domestic relations orders permitted to be so treated by the
Committee under the provisions of Section 206(d)(3)l of ERISA. The
Administrative Committee shall establish a written procedure to determine the
status of qualified domestic relations orders.
XIV-1
119
ARTICLE FIFTEEN
---------------
Permanency of the Plan
----------------------
15.01. RIGHT TO TERMINATE PLAN. The Company contemplates that the Plan shall be
permanent and the Employer shall be able to Continue to make contributions under
the Plan. Nevertheless, the Company reserves the right, at any time or times, by
action of the Board of Directors of the Company, to terminate the Plan, in whole
or in part.
15.02. MERGER OR CONSOLIDATION OF PLAN AND TRUST. The Plan may not be merged or
consolidated with, nor may its assets or liabilities be transferred to, any
other plan or trust, unless each Participant would (if the Plan then terminated)
receive a benefit which, immediately after the merger, consolidation, or
transfer, is equal to or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation or transfer if the Plan had
then terminated.
15.03. AMENDMENT OF THE PLAN.
a) The Board of Directors of the Company (or its designee), by
its action, shall have the right at any time and from time to time to amend, in
whole or in part, any or all of the provisions of this Plan. Further, the
Administrative Committee shall have the right at any time and from time to time
to amend the Plan to comply with changes in applicable law and to make other
changes as they deem appropriate but which would not result in any increase in
contributions by Employers or Participants, or in any increase in benefits. No
amendment (i) shall authorize or permit any part of the Fund (other than such
part as is required to pay taxes and administrative expenses) to be used for or
diverted to purposes other than for the exclusive benefit of the Participants
or their Beneficiaries or estates; (ii) shall cause any reduction in the
Account balance of any Participant accumulated theretofore, or cause or permit
any portion of the Fund to revert to or become the property of the
XV-1
120
Employer; (iii) shall affect the method of determining a Participant's vested
interest in his Plan benefits unless such amendment complies with the
requirements of Section 411(a)(10) of the Code; or (iv) shall affect the rights,
duties or responsibilities of the Administrative Committee without the
Administrative Committee' written consent.
b) A Plan amendment shall not reduce the non-forfeitable
percentage of a Participants Accounts derived from Employer contributions
determined as of the later of the date that such amendment is adopted, or the
date that such amendment becomes effective. If an amendment changes the vesting
schedule under the Plan, then if a Participant's non-forfeitable interest in his
Accounts under the Plan as amended can at any time be less than such percentage
under the Plan without regard to such amendment and if such Participant has
completed at least three (3) or more Years of Service (determined without regard
to Section 11.02(a) of the Plan), he shall be permitted to elect, within a
"reasonable period" (as defined below) after the adoption of such amendment, to
have the non-forfeitable percentage of his Accounts computed under the Plan
without regard to such amendment. Such election shall be in writing on a form
prescribed by the Administrative Committee and shall be irrevocable. For
purposes of this Section 15.03(b), a "reasonable period" shall begin no later
than the date upon which a Plan amendment changing the vesting schedule is
adopted, and shall end no earlier than the latest of (i) the sixtieth day after
the adoption of such amendment, (ii) the sixtieth day after such amendment
becomes effective, or (iii) the sixtieth day after the Participant is issued
written notice of such amendment by his Employer or the Administrative
Committee.
XV-2
121
ARTICLE SIXTEEN
---------------
Discontinuance of Contributions and Termination
-----------------------------------------------
16.01. DISCONTINUANCE OF CONTRIBUTIONS. Whenever an Employer, or the Company
acting with respect to an Employer, determines that it is impossible or
inadvisable for such Employer to make further contributions as provided in the
Plan, the Board of Directors of the Employer or the Company, as the case may be,
may adopt an appropriate resolution permanently discontinuing all further
contributions by the Employer. In such event, the Administrative Committee
force, other than the provisions relating to contributions by the affected
Employer.
16.02. TERMINATION OF PLAN. Upon a complete termination of the Plan, in
accordance with Section 15.01, after payment of all expenses and proportional
adjustment of Accounts of Participants to reflect such expenses. Trust Fund
profits or losses, and allocations of any previously unallocated funds to the
date of termination, the Participants shall be entitled to receive the amount
then credited to their respective Accounts in the Trust Fund.
16.03. RIGHTS TO BENEFITS UPON TERMINATION OF PLAN OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS. Upon the termination or partial termination of the Plan or the
complete discontinuance of contributions by an Employer, the rights of each of
the Participants affected by such termination or partial termination or
discontinuance of contributions to the amount credited to their Accounts at such
time shall be non-forfeitable without reference to any formal action on the part
of the Company or the Administrative Committee.
XVI-1
122
ARTICLE SEVENTEEN
-----------------
Exclusive Benefit of Trust Fund
-------------------------------
17.01. LIMITATION UPON REVERSIONS. Except as provided in Sections 4.02, the
assets of the Plan shall not inure to the benefit of any Employer and shall be
held for the exclusive purposes of providing benefits to Participants and their
Beneficiaries and defraying reasonable expenses of administering the Plan.
XVII-1
123
ARTICLE EIGHTEEN
----------------
Applicable Law
--------------
18.01. APPLICABLE LAW. Except as otherwise required under the laws of the United
States, the Plan shall be construed, regulated, interpreted and administered
under and in accordance with the laws of the State of New York, except to the
extent that such laws have been preempted by ERISA.
XVIII-1
124
ARTICLE NINETEEN
----------------
Withdrawals
-----------
19.01. WITHDRAWALS.
No withdrawals of benefits are permitted while a Participant is still
employed.
XIX-1
125
ARTICLE TWENTY
--------------
Loans
-----
20.01. LOANS.
No loans are permitted.
XX-1
126
ARTICLE TWENTY-ONE
------------------
Top Heavy Provisions
--------------------
21.01. SPECIAL DEFINITIONS. For the purposes of this Article Twenty-One, the
following words and phrases shall have the meanings set forth below:
a) "Aggregate Account" means, as of the Determination Date,
the sum of:
i) a Participant's account balance as of the most recent
Valuation Date occurring within a twelve (12) consecutive month period ending on
the Determination Date, including, in the case of a plan subject to the minimum
funding standards of Section 412 of the Code, amounts that would be allocated to
such account as of a date not later than the Determination Date even though such
amounts are not yet required to be contributed to the plan by such Determination
Date;
ii) an adjustment for any contribution due as of the
Determination Date. In the case of a plan not subject to the minimum funding
standards of Section 412 of the Code, such adjustment shall be the amount of any
contributions actually made after the Valuation Date but on or before the
Determination Date. In the case of a plan that is subject to the minimum funding
standards of Section 412 of the Code, such adjustment shall include any
contribution made, or due to be made, after the Valuation Date but before the
expiration of the extended payment period described in Section 412(c)(10) of the
Code. In the first P]an Year, such adjustment shall also reflect the amount of
any contributions made after the Determination Date that are allocated as of a
date in the first Plan Year;
iii) any plan distributions 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
the purposes of this Article Twenty-One to
XXI-1
127
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;
iv) any Employee contributions, whether voluntary or
mandatory; provided, however, that amounts attributable to "deductible employee
contributions," as defined in Section 72(o)(5)(A) of the Code, if any, shall not
be considered to be a part of the Participant's Aggregate Account balance;
v) 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 that is not
an ERISA Affiliate), the Plan making the distribution or transfer shall consider
such distribution or transfer as a distribution for the purposes of this Article
Twenty-One.
If the plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider any such rollovers or plan-to-plan transfers
accepted after December 31, 1983 as part of the Participant's Aggregate Account
balance. However, such unrelated rollovers or plan-to-plan transfers accepted
prior to January 1, 1984 shall be considered as part of the Participant's
Aggregate Account balance;
vi) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a plan
maintained by an ERISA Affiliate), the plan making the distribution or transfer
shall not count such distribution or transfer as a distribution for purposes of
this Article Twenty- One. If the 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.
XXI-2
128
b) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group, as hereinafter determined.
i) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in which a Key Employee
is a Participant, or has been a Participant during the Plan Year containing the
Determination Date, or in any of the four (4) preceding Plan Years (whether or
not such plan has been terminated), and each other plan of the Employer which
enables any plan in which a Key Employee participates to meet the requirements
of Section 401(a)(4) or 410 of the Code during such period, 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 or Super Top Heavy Plan, as the case may be, if the Required
Aggregation Group is a Top Heavy Group, or Super Top Heavy Group, as the case
may be. No plan in the Required Aggregation Group will be considered a Top Heavy
Plan or Super Top Heavy Plan, as the case may be, if the Aggregation Group is
not a Top Heavy Group;
ii) Permissive Aggregation Group: the Employer may also
include any other plan which provides comparable benefits but is not required to
be included in the Required Aggregation Group, provided the resulting group,
taken as a whole, would satisfy the provisions of Sections 401(a)(4) and 410 of
the Code. 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, or Super Top Heavy Plan,
as the case may be, if the Permissive Aggregation Group is a Top Heavy Group, or
Super Top Heavy Group, as the case may be. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
XXI-3
129
iii) 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 or Super Top Heavy Plans.
c) "Determination Date" means (1) the last day of the
preceding Plan Year, or (2) in the case of the first Plan Year of a Plan, the
last day of such Plan Year.
d) "Key Employee" means any Employee, former Employee, or the
Beneficiary of such Employee who, at any time during the Plan Year containing
the Determination Date or any of the preceding four (4) Plan Years, is or was:
i) an "officer" (as defined within the meaning of the
regulations issued under Section 416 of the Code) of the employer having annual
compensation that, for a plan year, exceeds fifty percent (50%) of the amount
referred to in Section 415(b)(1)(A) of the Code as in effect for the calendar
year in which the Plan Year ends. For this purpose, no more than fifty Employees
(or, if lesser, the greater of three (3) or ten percent (10%) of the Employees)
shall be treated as officers;
ii) one of the ten (10) Employees owning (or considered as
owning within the meaning of Section 318 of the Code) the largest percentage
ownership interest in value in the Employer or in any organization required to
be aggregated with the Employer under Sections 414(b), (c) or (m) of the Code,
if: (A) such ownership interest exceeds one-half percent (1/2%) and, (B) such
Employee's annual Compensation during the Plan Year of such ownership exceeds
the amount referred to in Section 415(c)(1)(A) of the Code as in effect for the
calendar year in which such plan year ends;
iii) a "5-percent owner" of the employer. "5-percent owner"
means any Employee who owns (or is considered as owning within the meaning of
Section 318 of the Code) more than five percent (5%) of the value of the
outstanding stock of the
XXI-4
130
employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the employer.
iv) a "1-percent owner" of the employer having an annual
compensation from the employer of more than $150,000. "1-percent owner" means
any Employee who owns (or is considered as owning within the meaning of Section
318 of the Code) more than one percent (1%) of the value of the outstanding
stock of the Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of the Employer;
v) For the purposes of determining percentage ownership in
accordance with the provisions of this Article Twenty-One, Employers that would
otherwise be aggregated under Section 4 14(b), (c) or (m) of the Code shall be
treated as separate Employers. However, in determining whether an Employee has
Compensation of more than $150,000 or Compensation that exceeds the threshold
amounts described in this Section 21.0(d)(i) and (ii), compensation from all
Employers required to be aggregated under Section 414(b), (c) or (m) of the Code
shall be taken into account.
e) "Non-Key Employee" means any Employee who is not a Key
Employee.
f) "Top Heavy Plan Year" means that, for a particular Plan
Year commencing after December 31, 1983, the Plan is a Top Heavy Plan.
21.02. DETERMINATION OF TOP HEAVY STATUS:
a) An Aggregation Group shall be a "Top Heavy Group" for any
Plan Year commencing after December 31, 1983 in which, as of the Determination
Date, the sum of the Present Value of Accrued Benefits of Key Employees and the
Aggregate Account balances of Key Employees under all plans of an Aggregation
Group exceeds sixty percent (60%) of the sum of the Present Value of Accrued
Benefits and the Aggregate Account balances of all Employees under the Plan and
all plans of the Aggregation Group.
XXI-5
131
b) An Aggregation Group shall be a "Super Top Heavy Group" for
any Plan Year commencing after December 31, 1983 in which, at the Determination
Date, the sum of the Present Value of Accrued Benefits of Key Employees and the
Aggregate Account balances of Key Employees and all plans in an Aggregation
Group exceeds ninety percent (90%) of the sum of the Present Value of Accrued
Benefits and the Aggregate Account balances of all Employees under all plans of
the Aggregation Group.
c) "Present Value of Accrued Benefit" means, in the case of a
defined benefit plan, the present value of an accrued benefit, as determined
under the provisions of the applicable defined benefit plan and in compliance
with Treasury Regulations Section 1.416-1(T-25 and T-26). For this purpose the
accrued benefit of any Employee (other than a Key Employee) shall be
determined--
i) under the method which is used for accrual purposes for
all plans of the employer, or
ii) if there is no method described in clause (I), as if
such benefit accrued not more rapidly than the slowest accrual rate permitted
under Section 411(b)(1)(C) of the Code.
d) In determining Top Heavy Status, the accrued benefit of (I)
an individual who is not a Key Employee with respect to any plan in an
Aggregation Group for a Plan Year but who was a Key Employee with respect to a
Plan in an Aggregation Group for a prior Plan Year and (II) an individual who
performed no services for the Company of an ERISA Affiliate during the five-year
period ending on the Determination Date, shall be disregarded.
21.03. TOP HEAVY PLAN REQUIREMENTS. For any Top Heavy Plan Year, the Plan shall
provide the following:
a) Special minimum benefit and contribution requirements of
Section 416(c) of the Code pursuant to Section 21.04 of the Plan.
XXI-6
132
b) Special vesting requirements of Section 416(b) of the Code,
pursuant to Section 21.07 of the Plan.
c) Special Compensation requirements of Section 416(d) of the
Code, pursuant to Section 21.06 of the Plan.
d) Special benefit limitations of Section 416(h) of the Code,
pursuant to Section 21.05 of the Plan.
21.04. MINIMUM ALLOCATIONS AND BENEFITS.
a) In the case of a defined contribution plan, for any Top
Heavy Plan Year, the sum of Employer contributions and forfeitures allocated to
the account of each Non-Key Employee who is a Participant and who has not
terminated employment by the end of such Plan Year (including (A) Participants
who fail to complete at least 1,000 Hours of Service during the Plan Year, (B)
Employees who are excluded from the Plan or accrue no benefit because their
Compensation is less than a stated amount, and (C) Employees who are excluded
from the Plan or accrue no benefit because they fail to make mandatory
contributions, or, in the case of a plan intended to qualify under Section
401(k) of the Code, elective contributions) shall be equal to at least three
percent (3%) of such Non-Key Employee's Compensation. However, should the sum of
the employer's contributions and forfeitures allocated to the account of each
Key Employee for such Top Heavy Plan Year be less than three percent (3%) of
each such Key Employee's Compensation, the sum of the Employer's contributions
and forfeitures allocated to the account of each Non-Key Employee who is a
Participant (including the employees referred to in the preceding sentence)
shall be equal to the highest percentage allocated to the account of a Key
Employee. The preceding sentence shall not apply to any plan required to be
included in an Aggregation Group if such plan enables a defined benefit plan
required to be included in an Aggregation Group to meet
XXI-7
133
the requirements of Section 401(a)(4) or Section 410 of the Code. For purposes
of satisfying the minimum contribution requirements of this subparagraph, an
Employee's elective deferrals under a cash or deferred arrangement (as defined
in Section 401(k) of the Code) and any contributions made by an Employer that
are treated as matching contributions for purposes of either Section 401(k) or
Section 401(m) of the Code shall not be treated as an Employer contribution.
b) In the case of a defined benefit plan, for any Top Heavy
Plan Year) the accrued benefit, when expressed as an Annual Retirement Benefit
(as defined below), of a Participant who is a Non-Key Employee and who has
completed at least one thousand (1,000) Hours of Service during the plan year
(including Employees who are excluded from the Plan or accrue no benefit because
their Compensation is less than a stated amount and Employees who are excluded
from the Plan or accrue no benefit because they fail to make mandatory
contributions) shall not be less than the product of (A) the number of years of
Top Heavy Service (as defined below), and (B) two percent (2%) of the
Participant's average Compensation during the period of the five (5) consecutive
years of Top Heavy Service during which the Participant had the greatest
aggregate Compensation. However, under no circumstances will such product exceed
twenty percent (20%) of the average Compensation.
i) The foregoing defined benefit minimum shall be
determined without regard to any Social Security contribution or benefit.
ii) "Annual Retirement Benefit" means a benefit which
commences at age 65 and is payable annually in the form of a single life
annuity.
iii) A "Year of Top Heavy Service" shall be a Year of
Service which is credited for benefit accrual purposes during a Top Heavy Plan
Year.
c) Notwithstanding anything herein to the contrary, in any
Plan Year in which a Non-Key Employee participates in both a defined benefit
plan and a defined
XXI-8
134
contribution plan, and both such plans are Top Heavy Plans, the Employer shall
not be required to provide a Non-Key Employee with both the defined benefit
minimum and the defined contribution minimum. Therefore, for such Non-Key
Employee who is participating in a Top Heavy defined benefit plan maintained by
the Employer, the defined benefit minimum, as provided under Section 21.04(b)
above, shall accrue and the defined contribution minimum shall not be
applicable.
21.05. MULTIPLE PLAN REDUCTION FOR TOP HEAVY PLAN YEARS.
a) For any Top Heavy Plan Year, 1.0 shall be substituted for
1.25 in Section 5.03, wherever it shall apply, unless (1) the defined
contribution minimum is made pursuant to Section 21.04(a) with "four percent
(4%)" substituted for "three percent (3%)," or (2) the defined benefit minimum
accrues pursuant to Section 21.04(b) with "three percent (3%)" substituted for
"two percent (2%)," and "thirty percent (30%)" substituted for "twenty percent
(20%)." However, for any Plan Year in which the Plan is a Super Top Heavy Plan,
1.0 shall be substituted for 1.25 without exception.
b) For any Top Heavy Plan Year, $41,500 shall be substituted
for $51,875 in determining the "transition fraction" defined in Section 5.04,
unless the extra minimum benefit accrual is made pursuant to Section 21.05(a).
However, for any Limitation Year in which the Plan is a Super Top Heavy Plan,
$41,500 shall be substituted for $51,875 without exception.
21.06. MINIMUM VESTING.
For any Top Heavy Plan Year, the vested interest of each Participant
who has been credited with at least one (1) Hour of Service during such Top
Heavy Plan Year in his accrued benefit (including benefits accrued before the
effective date of Section 416 of the Code and before the Plan became a Top Heavy
Plan, but not including benefits that were forfeited before the Plan became a
Top Heavy Plan) shall not be less than the vested
XXI-9
135
percentage specified in Article Eleven of the Plan, nor less than the applicable
percentage indicated by the following minimum vesting schedule:
YEARS OF SERVICE MINIMUM VESTING PERCENTAGE
---------------- --------------------------
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
Should the Plan cease to be a Top Heavy Plan, this minimum vesting
schedule shall no longer apply; provided, however, that: (a) a Participant's
vested percentage shall not be less than his vested percentage determined
pursuant to the above minimum vesting schedule as of the end of the last Top
Heavy Plan Year, and (b) such reversion to the original vesting schedule of the
Plan shall be treated as a change in the Plan's vesting schedule so that the
provisions of Section 15.03(b) of this Plan shall apply.
For purposes of this Section 21.06. Years of Service during which
neither the Company nor any ERISA Affiliate maintained the Plan, Years of
Service completed by an Employee before he attained age eighteen (IS), and Years
of Service that are disregarded under Section 11.02. shall be disregarded.
XXI-10
136
ARTICLE TWENTY-TWO
------------------
Miscellaneous
-------------
22.01. INTERPRETATION OF THE PLAN AND TRUST. It is the intention of the Company
that the Plan, and the Trust established to implement the Plan, shall comply
with the provisions of Sections 401 and 501 of the Code and the requirements of
ERISA, and the corresponding provisions of any subsequent laws, and the
provisions of the Plan shall be construed to effectuate such intention.
22.02. GENDER AND NUMBER. Wherever appropriate, words used in the Plan in the
singular may mean the plural, the plural may mean the singular and the masculine
may mean the feminine.
XXII-1
137
IN WITNESS WHEREOF, this Plan has been executed this 22nd day
of December, 1994.
XXXXX ASSOCIATES, INC.
By: /s/ Xxxxxx X. XxXxxxx
-----------------------------
Xxxxxx X. XxXxxxx,
President and
Chief Executive Officer
ATTEST:
/s/ Xxxxxx Xxxxxxxx
----------------------
Xxxxxx Xxxxxxxx,
Secretary
XXII-2
138
APPENDIX I
----------
Adopting Employers
------------------
The following employers have adopted the Xxxxx Associates Money Purchase Pension
Plan for their employees.
- XXXXX INFORMATION SERVICES, INC.
- KROLL ENVIRONMENTAL ENTERPRISES, INC. - An Employee's
Years of Service shall be measured from the earlier of
(i) his most recent date of hire with Xxxxxxxx
Environmental Services, Inc., or (ii) his date of hire
with Xxxxxxxx/Kroll Environmental Services Inc. or
(iii) Kroll Environmental Services.
- XXXXX ASSOCIATES U.K. LIMITED
- XXXXX ASSOCIATES (ASIA) LIMITED
- XXXXX ASSOCIATES FRANCE S.A.R.L.
- KROLL ELECTRONIC RECOVERY, INC.
XXII-3
139
APPENDIX II
-----------
Transfer Contributions
----------------------
A Participant's Transfer Account, if any, shall consist of amounts transferred
from the Kroll Pension Plan Trust, which was terminated effective July 15, 1991.
Such Transfer Account shall be at all times fully 100% vested and shall be
subject to the same rules upon distribution as are all other Accounts under the
Plan.
XXII-4
140
AMENDMENT NO. 1 TO THE
KROLL ASSOCIATES MONEY PURCHASE
PENSION PLAN
WHEREAS, Kroll Associates, Inc. (the "Company") has adopted the Kroll
Associates Money Purchase Pension Plan (the "Plan") effective January 1. 1991;
and
WHEREAS, the Internal Revenue Service has requested clarifying
amendments; and
WHEREAS, in accordance with Section 15.03, the Company may amend the
Plan at any time.
NOW, THEREFORE, the Plan is amended, effective January 1, 1994, as
follows:
1. Section 4.01(c) is amended in its entirety to read as follows:
"If greater than the amount produced by the formula in Section 4.01(a)
above for a Plan Year, then in lieu of the amount determined under Section
4.01(a) above, the Employer shall contribute with respect to such year on behalf
of each Participant who is classified as a managing director of the Company and
who is eligible to share in such contribution pursuant to Section 5.01, an
amount which shall be determined under the following schedule
CONTRIBUTION PERCENTAGE
MANAGING DIRECTOR LEVEL OF COMPENSATION
----------------------- -----------------------
Level I (Compensation in excess of $235,000) 12.5
Level II (Compensation between $225,000 and 12.0
$235,000)
Level III (Compensation between $200,001 and 11.0
$224,999)
Level VI (Compensation between $190,000 and 10.0
$200,000)
Level V (Compensation between $165,001 and 9.0
$189,999)
Level VI (Compensation between $150,001 and 8.0
$165,000)
Level VII (Compensation of $150,000 and less) 0
141
PAGE 2
The levels described above will be adjusted annually by 5% to reflect cost of
living adjustments. However, the Employer is not required to contribute more
than the maximum amount allowable as a current deduction under Section 404 of
the Code, except to the extent necessary to restore forfeited accounts and
satisfy top heavy minimum allocations to Non-Key Employees as required in
Section 21.04. If the amount of Employer contribution calculated above would
exceed this amount, then the regular allocation amounts shall be reduced
proportionately to eliminate the excess.
For each Plan Year, the Employer's contribution and forfeitures in excess of
those used to restore forfeited accounts, hereafter in this Section jointly
referred to as the Employer's contribution, shall be allocated, up to the
maximum amount permitted under Section 5.02 and any other applicable limitation
on allocations in the Plan, as provided in the following subsections of this
Section.
(i) The preliminary allocation for each Participant who is eligible for
a regular allocation for the Plan Year shall be the percentage of the
Participant's Compensation specified in Sections 4.01(a), (b) and (c) above for
the group of which the Participant is a member, up to the maximum amount
permitted under Section 5.02 and any other applicable limitation on allocations
in the Plan.
(ii) If the Plan is not top heavy for the Plan Year, the preliminary
allocations are then tested for appropriateness under (iii) below. If the Plan
is top heavy, and if any Participant who is eligible for a top heavy allocation
is determined to have a preliminary allocation which is less than the top heavy
allocation described in Section 21.04, then instead the preliminary allocation
for the Plan Year for that Participant shall be the amount described in Section
21.04.
(iii) The resulting preliminary allocations shall be tested for
appropriateness. The preliminary allocations will be considered to be
appropriate if they meet the "ratio percentage" test in subsection (v). As an
alternative, the preliminary allocations will be considered to be appropriate if
they satisfy the "average benefits" test in subsection (vi) taking into account
all of the applicable "aggregated plans". For purposes of this section,
"aggregated plans" mean any qualified plans maintained by the Employer under
which Employees will receive an allocation or accrual for the Plan Year ending
in the same calendar year as the Plan Year for which the preliminary allocation
is being determined. However, plans which cover a qualified separate line of
business other than the one of which this Plan is a part and plans which cover
collectively bargained employees will not be included as aggregated plans.
(iv) The rules of this subsection apply for purposes of performing the
ratio percentage and average benefits tests below.
Highly Compensated Employees and Non-Highly Compensated Employees
refer to such Employees who are not "excludable employees". Excludable employees
are for the Plan Year being tested, any Employees who failed to meet the age and
service
142
PAGE 3
requirements for eligibility to participate in the Plan, any Employees who
failed to be eligible for an allocation solely because they terminated before
the end of the Plan Year with not more than 500 Hours of Service, and any
Employees whose employment is governed by a collective bargaining agreement
under which retirement benefits were the subject of good faith bargaining.
Both tests involve evaluation of all of the rate groups for the Plan
Year. There is a separate "rate group" for each Highly Compensated Employee who
has received an allocation. The rate group consists of all Participants who have
received an allocation in the Plan Year and whose percentage is equal to or
greater than the Highly Compensated Employee's percentage. The same Participants
may be included in more than one rate group. For this purpose the Employer may
group allocation rates in accordance with Regulation Section
1.401(a)(4)-2(c)(2)(v).
A Participant's "percentage" for the Plan Year is determined as
follows:
(1) The allocation rate for a Participant for a Plan Year equals the
sum of the allocations to the Participant's account for the Plan Year, expressed
as a percentage of Plan Year Compensation.
(2) The amounts taken into account in determining allocation rates for
a Plan Year include all Employer contributions and forfeitures that are
allocated or treated as allocated to the account of a Participant under the Plan
for the Plan Year, other than amounts described in (3) below. For purposes of
this Plan, an Employer contribution is taken into account in the Plan Year for
which it is required to contributed and allocated to Participants' accounts
under the Plan, even if all or part of the required contribution is not actually
made.
(3) Allocations of income, expenses, gains, and losses attributable to
the balance in a Participant's account are not taken into account in determining
allocation rates
If the Plan preliminary allocations fail to be considered appropriate
when tested under subsection (iii), the Plan may use an alternate method of
calculating a Participant's "percentage" for the Plan Year as follows:
(1) Determine for each Participant the present value of the preliminary
allocation at the Participant's age 65, using a Standard Interest Rate
assumption as defined under Regulation Section 1.401(a)(4)-12.
(2) Divide the present value determined in (1) above by the factor for
a life income of $1 per year beginning at the Participant's testing age based on
a Standard Interest Rate assumption as defined under Regulation Section
1.401(a)(4)-12 and an assumption of no pre-testing age mortality and
post-testing age mortality based on a Standard Mortality Table as defined under
by Regulation Section 1.401(a)(4)-12.
143
PAGE 4
(3) Divide the result determined in (2) above by the Participant's Plan
Year Compensation to determine the Participant's percentage.
For purposes of this paragraph, a Participant's "testing age" is age 65.
For purposes of calculating the Participant's percentage, Participants who are
older than the testing age shall be deemed to be the testing age.
The disparity permitted under Section 401(l) may be imputed when determining a
Participant's "percentage" for the Plan Year in accordance with the rules of
Regulation Section 1.401(a)(4)-7.
(v) THE RATIO PERCENTAGE TEST. The Ratio Percentage Test is performed
as follows:
(1) Within each rate group, calculate the Highly Compensated
Fraction and the Non-Highly Compensated Fraction. The numerator of the Highly
Compensated Fraction is the number of Highly Fraction is the number of Highly
Compensated Employees in the rate group and the denomination of the fraction is
the total number of Highly Compensated Employees for the Plan Year. The
numerator of the Non-Highly Compensated Fraction is the number of Non-Highly
Compensated Employees in the rate group and the denominator of the fraction is
the total number of Non-Highly Compensated Employees for the Plan Year.
(2) If for each rate group the Non-Highly Compensated Fraction is
at least 70% of the Highly Compensated Fraction, the ratio percentage test is
satisfied.
(vi) THE AVERAGE BENEFITS TEST. The Average Benefits Test is satisfied
if the plan satisfies the average benefits percentage test of subsection (vii)
and each rate group satisfies the nondiscriminatory classification test of
subsection (viii).
(vii) THE AVERAGE BENEFITS PERCENTAGE TEST. The Average Benefits
Percentage Test is performed as follows:
(1) Determine for all "aggregated plans" the sum of the
Participant's accrual rates of all of the Non-Highly Compensated Employees and
separately determine the sum of the Participant's accrual rates of all of the
Highly Compensated Employees.
(2) For this purpose, a Participant's accrual rate with respect to
a defined contribution plan is determined by adding together the preliminary
allocation under this Plan and the allocations for the Plan Year ending in the
same calendar year under any other "aggregated plans" and then applying the
procedure described in (iv)(1) - (iv)(3).
(3) For this purpose, a Participant's accrual rate with respect to
defined benefit plans is determined by:
144
PAGE 5
(a) determining, for each such, for the Plan Year ending in
the same calendar year as the Plan Year being tested under this Plan, the
increase in the individual's accrued benefit for that Plan Year, then
(b) with respect to any such accrued benefits stated in terms
other than the payment of a straight life annuity at the testing age, converting
those accrued benefits to an equivalent accrual of a straight life annuity at
the testing age based a standard interest rate assumption as allowed by
Regulation Section 1.401(a)(4)-12, and a standard mortality table as allowed by
Regulation Section 1.401(a)(4)-12, then
(c) adding the accruals and equivalent accruals for the
individual for the year calculating an accrual rate equal to the sum of those
accruals as a percentage of the individual's average annual compensation. For
this purpose, average annual compensation means the average of the individual's
three highest consecutive Compensations.
(4) Determine the average percentage for each group by dividing
the sum for that group by the number of Employees in that group.
(5) Divide the average percentage for the Non-Highly Compensated
Employees by the average percentage for the Highly Compensated Employees.
(6) If the result in (5) is at least 70%, the plan satisfies the
Average Benefits Percentage Test.
(viii) THE NONDISCRIMINATORY CLASSIFICATION TEST. A rate group
satisfies the Nondiscriminatory Classification Test if the ratio percentage for
that rate group, determined by dividing the Non-Highly Compensated Fraction of
(v)(1) by the Highly Compensated Fraction of (v)(1), is greater than or equal to
the testing percentage from subsection (ix) below.
(ix) TESTING PERCENTAGE FOR THE NONDISCRIMINATORY CLASSIFICATION TEST.
The testing percentage is determined as follows:
(1) Calculate a ratio percentage for the Plan as follows. First
calculate the Highly Compensated Fraction and the Non-Highly Compensated
Fraction. The numerator of the Highly Compensated Fraction is the number of
Highly Compensated Employees who have received an allocation for the Plan Year
and the denominator of the fraction is the total number of Highly Compensated
Employees for the Plan Year. The numerator of the Non-Highly Compensated
Fraction is the number of Non-Highly Compensated Employees who have received an
allocation for the Plan Year and the denominator of the fraction is the total
number of Non-Highly Compensated Employees for the Plan Year. The ratio
percentage is determined by dividing the Non-Highly Compensated Fraction by the
Highly Compensated Fraction.
145
PAGE 6
(2) Determine the concentration percentage by dividing the number
of Non-Highly Compensated Employees by the sum of the number of Non-Highly
Compensated Employees plus the number of Highly Compensated Employees.
(3) Determine the safe harbor percentage, which is 50% reduced by
.75% for each whole percentage point by which the concentration percentage
exceeds 60%.
(4) Determine the unsafe harbor percentage, which is 40% reduced
by .75% for each whole percentage point by which the concentration percentage
exceeds 60%, but in no event less than 20%.
(5) Determine the midpoint percentage, which is 50% of the sum of
the safe harbor percentage plus the unsafe harbor percentage.
(6) The testing percentage is the smaller of the ratio percentage
calculated in (1) and the midpoint percentage calculated in (5).
(x) If the preliminary allocations are determined to be appropriate
when tested under subsection (iii), then the preliminary allocation as
determined in (a) above is the regular allocation amount (or if determined under
(ii), the top heavy allocation amount) for the Plan Year. If the preliminary
allocations are not determined to be appropriate when tested under subsection
(iii), then instead of the preliminary allocation as calculated above, the
regular allocation amount for all Participants eligible for such an allocation
for the Plan Year shall be the amount determined by applying the default
percentage specified in Section 4.01(a) to each such Participant's
Compensation.
2 Section 4.01(d) is deleted in its entirety.
IN WITNESS WHEREOF, this Amendment has been executed this 12th day of
April, 1996.
KROLL ASSOCIATES, INC.
By: /s/ Xxxxxx X. XxXxxxx
------------------------------------
Xxxxxx X. XxXxxxx
ATTEST:
/s/ Xxxx Xxxxx Xxxxx
---------------------
146
KROLL ASSOCIATES MONEY PURCHASE PENSION
PLAN AND TRUST
ATTACHMENT TO FORM 5300
ITEM 8a
NAME OF PLAN: Kroll Associates 401(k) Savings
Plan and Trust
TYPE OF PLAN: 401(k) Plan
FORM OF PLAN: Individually Designed
PAIRED OR NOT PAIRED: Not Paired
BENEFIT FORMULA: Elective deferrals with
discretionary match equal to the
lesser of (1) 25% of first 5% of
elective deferrals or (2) $500 and
discretionary profit sharing
contribution based on compensation.
NUMBER OF PARTICIPANTS: 178
