EXHIBIT 4.1
THE XXXXXX SAVINGS AND LOAN CO.
401(K) PROFIT SHARING PLAN
THE XXXXXX SAVINGS AND LOAN CO.
401(K) PROFIT SHARING PLAN
THIS AGREEMENT, hereby made and entered into this 17th day of
June 2002, by and between The Xxxxxx Savings and Loan Co. (herein referred to as
the "Employer") and The Xxxxxx Savings and Loan Co. (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing
Plan and Trust effective October 1, 1994, (hereinafter called the "Effective
Date") known as The Xxxxxx Savings and Loan Co. 401(k) Profit Sharing Plan
(herein referred to as the "Plan") in recognition of the contribution made to
its successful operation by its employees and for the exclusive benefit of its
eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the
ability to amend the Plan, provided the Trustee joins in such amendment if the
provisions of the Plan affecting the Trustee are amended;
NOW, THEREFORE, effective October 1, 2001, except as otherwise
provided, the Employer and the Trustee in accordance with the provisions of the
Plan pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity
has been designated by the Employer pursuant to Section 2.2 to administer the
Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 9.2.
1.5 "Anniversary Date" means the last day of the Plan Year.
1.6 "Beneficiary" means the person (or entity) to whom the share of a
deceased Participant's total account is payable, subject to the restrictions of
Sections 6.2 and 6.6.
1
1.7 "Code" means the Internal Revenue Code of 1986, as amended or
replaced from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation
must be determined without regard to any rules under Code Section 3401(a) that
limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Code Section 3401(a)(2)).1.8 p.22
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding (even if includible in gross income)
reimbursements or other expense allowances, fringe benefits
(cash or noncash), moving expenses, deferred compensation, and
welfare benefits.
(b) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which
are not includible in the gross income of the Participant
under Code Sections 125, 132(f)(4)for Plan Years beginning
after December 31, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized for the entire Plan Year.
Compensation in excess of $150,000 (or such other amount
provided in the Code) shall be disregarded for all purposes other than for
purposes of salary deferral elections pursuant to Section 4.2. Such amount shall
be adjusted for increases in the cost of living in accordance with Code Section
401(a)(17)(B), except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or within such
calendar year. For any short Plan Year the Compensation limit shall be an amount
equal to the Compensation limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full months in
the short Plan Year by twelve (12).
For Plan Years beginning after December 31, 1996, for purposes
of determining Compensation, the family member aggregation rules of Code Section
401(a)(17) and Code Section 414(q)(6) (as in effect prior to the Small Business
Job Protection Act of 1996) are eliminated.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income policy or annuity contract (group or individual) issued pursuant to the
terms of the Plan. In the event of any conflict between the terms of this Plan
and the terms of any contract purchased hereunder, the Plan provisions shall
control.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
2
1.11 "Early Retirement Date" means the date on which a Participant or
Former Participant attains age 55. A Participant shall become fully Vested upon
satisfying this requirement if still employed at Early Retirement Age.1.11 p.33
A Former Participant who separates from service and who
thereafter reaches the age requirement contained herein shall be entitled to
receive benefits under this Plan.
1.12 "Elective Contribution" means the Employer contributions to the
Plan of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, the Employer
matching contribution made pursuant to Section 4.1(b) which is used to satisfy
the "Actual Deferral Percentage" tests and any Employer Qualified Non-Elective
Contribution made pursuant to Section 4.1(c) and Section 4.6(b) which is used to
satisfy the "Actual Deferral Percentage" tests shall be considered an Elective
Contribution for purposes of the Plan. Any contributions deemed to be Elective
Contributions (whether or not used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests) shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the nondiscrimination requirements of Regulation 1.401(k)-1(b)(5) and
Regulation 1.401(m)-1(b)(5), the provisions of which are specifically
incorporated herein by reference.
1.13 "Eligible Employee" means any Employee.1.13 p.33
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
Employees classified by the Employer as independent
contractors who are subsequently determined by the Internal Revenue Service to
be Employees shall not be Eligible Employees.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, and excludes any person who is employed as an independent
contractor. Employee shall include Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a
plan described in Code Section 414(n)(5) and such Leased Employees do not
constitute more than 20% of the recipient's non-highly compensated work force.
1.15 "Employee Stock Ownership Transfer Account" means the account
established and maintained by the Administrator for each Participant with
respect to the Participant's total interest in the Plan resulting from amounts
transferred to this Plan from the Xxxxxx Financial Corporation Employee Stock
Ownership Plan. All Employee Stock Ownership Transfer Accounts will remain 100%
vested and nonforfeitable.
1.16 "Employer" means The Xxxxxx Savings and Loan Co. and any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. The Employer is a corporation, with principal offices in the State of
Ohio.
3
1.17 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the "Actual Deferral Percentage" tests) and any qualified
non-elective contributions or elective deferrals taken into account pursuant to
Section 4.7(c) on behalf of Highly Compensated Participants for such Plan Year,
over the maximum amount of such contributions permitted under the limitations of
Section 4.7(a) (determined by hypothetically reducing contributions made on
behalf of Highly Compensated Participants in order of the actual contribution
ratios beginning with the highest of such ratios). Such determination shall be
made after first taking into account corrections of any Excess Deferred
Compensation pursuant to Section 4.2 and taking into account any adjustments of
any Excess Contributions pursuant to Section 4.6.
1.18 "Excess Contributions" means, with respect to a Plan Year, the
excess of Elective Contributions used to satisfy the "Actual Deferral
Percentage" tests made on behalf of Highly Compensated Participants for the Plan
Year over the maximum amount of such contributions permitted under Section
4.5(a) (determined by hypothetically reducing contributions made on behalf of
Highly Compensated Participants in order of the actual deferral ratios beginning
with the highest of such ratios). Excess Contributions shall be treated as an
"annual addition" pursuant to Section 4.9(b).
1.19 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 9.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on October 1 of each year and ending the following September 30.
1.22 "Forfeiture." Under this Plan, Participant accounts are 100%
Vested at all times. Any amounts that may otherwise be forfeited under the Plan
pursuant to Section 3.6, 4.2(f), 4.6(a) or 6.9 shall be used to reduce the
contribution of the Employer.
1.23 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
4
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052. "415
Compensation" must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
For "limitation years" beginning after December 31, 1997, for
purposes of this Section, the determination of "415 Compensation" shall include
any elective deferral (as defined in Code Section 402(g)(3)), and any amount
which is contributed or deferred by the Employer at the election of the
Participant and which is not includible in the gross income of the Participant
by reason of Code Sections 125, 132(f)(4) for "limitation years" beginning after
December 31, 2000 or 457.
1.25 "414(s) Compensation" means any definition of compensation that
satisfies the nondiscrimination requirements of Code Section 414(s) and the
Regulations thereunder. The period for determining 414(s) Compensation must be
either the Plan Year or the calendar year ending with or within the Plan Year.
An Employer may further limit the period taken into account to that part of the
Plan Year or calendar year in which an Employee was a Participant in the
component of the Plan being tested. The period used to determine 414(s)
Compensation must be applied uniformly to all Participants for the Plan Year.
For Plan Years beginning after December 31, 1996, for purposes
of this Section, the family member aggregation rules of Code Section 414(q)(6)
(as in effect prior to the Small Business Job Protection Act of 1996) are
eliminated.
1.26 "Highly Compensated Employee" means, for Plan Years beginning
after December 31, 1996, an Employee described in Code Section 414(q) and the
Regulations thereunder, and generally means any Employee who:
(a) was a "five percent owner" as defined in Section
1.30(c) at any time during the "determination year" or the
"look-back year"; or
(b) for the "look-back year" had "415 Compensation"
from the Employer in excess of $80,000 and was in the Top-Paid
Group for the "look-back year". The $80,000 amount is adjusted
at the same time and in the same manner as under Code Section
415(d), except that the base period is the calendar quarter
ending September 30, 1996.
The "determination year" means the Plan Year for which testing
is being performed, and the "look-back year" means the immediately preceding
twelve (12) month period.
A highly compensated former Employee is based on the rules
applicable to determining Highly Compensated Employee status as in effect for
the "determination year," in accordance with Regulation 1.414(q)-1T, A-4 and IRS
Notice 97-45 (or any superseding guidance).
5
In determining whether an Employee is a Highly Compensated
Employee for a Plan Year beginning in 1997, the amendments to Code Section
414(q) stated above are treated as having been in effect for years beginning in
1996.
For purposes of this Section, for Plan Years beginning prior
to January 1, 1998, the determination of "415 Compensation" shall be made by
including amounts that would otherwise be excluded from a Participant's gross
income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B), and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b).
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.27 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the component of the Plan being
tested.
1.28 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
6
For purposes of (2) above, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
For purposes of this Section, Hours of Service will be
credited for employment with other Affiliated Employers. The provisions of
Department of Labor regulations 2530.200b-2(b) and (c) are incorporated herein
by reference.
1.29 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.30 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.31 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of the Employee's or former Employee's Beneficiaries) is considered
a Key Employee if the Employee, at any time during the Plan Year that contains
the "Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is
defined within the meaning of the Regulations under Code
Section 416) having annual "415 Compensation" greater than 50
percent of the amount in effect under Code Section
415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than
the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year
ends and owning (or considered as owning within the meaning of
Code Section 318) both more than one-half percent interest and
the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five
percent owner" means any person who owns (or is considered as
owning within the meaning of Code Section 318) more than five
percent (5%) of the outstanding stock of the Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than five
percent (5%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
7
(d) a "one percent owner" of the Employer having an
annual "415 Compensation" from the Employer of more than
$150,000. "One percent owner" means any person who owns (or is
considered as owning within the meaning of Code Section 318)
more than one percent (1%) 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 or,
in the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under
Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 132(f)(4)for
Plan Years beginning after December 31, 2000, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section 414(h)(2) that are
treated as Employer contributions.
1.32 "Late Retirement Date" means a Participant's actual Retirement
Date after having reached Normal Retirement Date.
1.33 "Leased Employee" means, for Plan Years beginning after December
31, 1996, any person (other than an Employee of the recipient Employer) who
pursuant to an agreement between the recipient Employer and any other person or
entity ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient Employer. Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer.
Furthermore, Compensation for a Leased Employee shall only include Compensation
from the leasing organization that is attributable to services performed for the
recipient Employer. A Leased Employee shall not be considered an Employee of the
recipient Employer:
(a) if such employee is covered by a money purchase
pension plan providing:
(1) a nonintegrated employer contribution rate of
at least 10% of compensation, as defined in Code
Section 415(c)(3), but for Plan Years beginning prior
to January 1, 1998, including amounts which are
contributed by the Employer pursuant to a salary
reduction agreement and which are not includible in
the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer
contributions, andfor Plan Years beginning prior to
January 1, 2001, excluding amounts that are not
includible in gross income under Code Section
132(f)(4);
8
(2) immediate participation;
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than
20% of the recipient Employer's nonhighly compensated work
force.
1.34 "Non-Elective Contribution" means the Employer contributions to
the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2, matching contributions (which are
used in the "Actual Deferral Percentage" tests) made pursuant to Section 4.1(b)
and any Qualified Non-Elective Contribution used in the "Actual Deferral
Percentage" tests.
1.35 "Non-Highly Compensated Participant" means, for Plan Years
beginning after December 31, 1996, any Participant who is not a Highly
Compensated Employee. However, for purposes of Section 4.5(a) and Section 4.6,
if the prior year testing method is used, a Non-Highly Compensated Participant
shall be determined using the definition of Highly Compensated Employee in
effect for the preceding Plan Year.
1.36 "Non-Key Employee" means any Employee or former Employee (and such
Employee's or former Employee's Beneficiaries) who is not, and has never been a
Key Employee.
1.37 "Normal Retirement Age" means the Participant's 59-1/2 birthday. A
Participant shall become fully Vested in the Participant's Account upon
attaining Normal Retirement Age.
1.38 "Normal Retirement Date" means the Participant's Normal Retirement
Age.
1.39 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means 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. For this purpose,
Hours of Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary to prevent the
Employee from incurring a 1-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for a
"maternity or paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which the
Administrator is 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 leave of absence" shall not exceed the number of Hours
of Service needed to prevent the Employee from incurring a 1-Year Break in
Service.
9
1.40 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.41 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.12 and observed by the Administrator and
applied to Participants who have Participant Directed Accounts.
1.42 "Participant's Account" means the account established and
maintained by the Administrator for each Participant with respect to such
Participant's total interest in the Plan and Trust resulting from the Employer
Non-Elective Contributions.
A separate accounting shall be maintained with respect to that
portion of the Participant's Account attributable to Employer matching
contributions made pursuant to Section 4.1(b), Employer discretionary
contributions made pursuant to Section 4.1(d) and any Employer Qualified
Non-Elective Contributions.
1.43 "Participant's Combined Account" means the total aggregate amount
of each Participant's Elective Account and Participant's Account.
1.44 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.45 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to the
Participant's total interest in the Plan and Trust resulting from the Employer
Elective Contributions used to satisfy the "Actual Deferral Percentage" tests. A
separate accounting shall be maintained with respect to that portion of the
Participant's Elective Account attributable to such Elective Contributions
pursuant to Section 4.2, Employer matching contributions made pursuant to
Section 4.1(b) and any Employer Qualified Non-Elective Contributions.
1.46 "Participant's Transfer/Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to the Participant's total interest in the Plan resulting from amounts
transferred to this Plan from a direct plan-to-plan transfer and/or with respect
to such Participant's interest in the Plan resulting from amounts transferred
from another qualified plan or "conduit" Individual Retirement Account in
accordance with Section 4.11.
A separate accounting shall be maintained with respect to that
portion of the Participant's Transfer/Rollover Account attributable to transfers
(within the meaning of Code Section 414(l)) and "rollovers."
1.47 "Plan" means this instrument, including all amendments thereto.
10
1.48 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on October 1 of each year and ending the following September 30.
1.49 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.1(c) and Section 4.6(b) and Section
4.8(f). Such contributions shall be considered an Elective Contribution for the
purposes of the Plan and may be used to satisfy the "Actual Deferral Percentage"
tests or the "Actual Contribution Percentage" tests.
1.50 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or a delegate of the Secretary of the Treasury,
and as amended from time to time.
1.51 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.52 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.53 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.54 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.55 "Top Heavy Plan Year" means a Plan Year during which the Plan is
a Top Heavy Plan.
1.56 "Top-Paid Group" means the top 20 percent of Employees who
performed services for the Employer during the applicable year, ranked according
to the amount of "415 Compensation" received from the Employer during such year.
All Affiliated Employers shall be taken into account as a single employer, and
Leased Employees within the meaning of Code Sections 414(n)(2) and 414(o)(2)
shall be considered Employees unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. Employees who are non-resident aliens who received
no earned income (within the meaning of Code Section 911(d)(2)) from the
Employer constituting United States source income within the meaning of Code
Section 861(a)(3) shall not be treated as Employees. Furthermore, for the
purpose of determining the number of active Employees in any year, the following
additional Employees shall also be excluded, however, such Employees shall still
be considered for the purpose of identifying the particular Employees in the
Top-Paid Group:
(a) Employees with less than six (6) months of
service;
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age
twenty-one (21).
11
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top-Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.57 "Total and Permanent Disability" means a physical or mental
condition of a Participant resulting from bodily injury, disease, or mental
disorder which renders such Participant incapable of continuing usual and
customary employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.1.56 p.1313
1.58 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.59 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
1.60 "Valuation Date" means the Anniversary Date and may include any
other date or dates deemed necessary or appropriate by the Administrator for the
valuation of the Participants' accounts during the Plan Year, which may include
any day that the Trustee, any transfer agent appointed by the Trustee or the
Employer or any stock exchange used by such agent, are open for business.
1.61 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.62 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.1.61 p.1313
The computation period shall be the Plan Year if not otherwise
set forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with any Affiliated Employer shall be
recognized.
12
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and
responsibilities otherwise provided for in this Plan, the
Employer shall be empowered to appoint and remove the Trustee
and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to ensure that the
Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may
appoint counsel, specialists, advisers, agents (including any
nonfiduciary agent) and other persons as the Employer deems
necessary or desirable in connection with the exercise of its
fiduciary duties under this Plan. The Employer may compensate
such agents or advisers from the assets of the Plan as
fiduciary expenses (but not including any business (settlor)
expenses of the Employer), to the extent not paid by the
Employer.
(b) The Employer may, by written agreement or
designation, appoint at its option an Investment Manager
(qualified under the Investment Company Act of 1940 as
amended), investment adviser, or other agent to provide
direction to the Trustee with respect to any or all of the
Plan assets. Such appointment shall be given by the Employer
in writing in a form acceptable to the Trustee and shall
specifically identify the Plan assets with respect to which
the Investment Manager or other agent shall have authority to
direct the investment.
(c) The Employer shall establish a "funding policy
and method," i.e., it shall determine whether the Plan has a
short run need for liquidity (e.g., to pay benefits) or
whether liquidity is a long run goal and investment growth
(and stability of same) is a more current need, or shall
appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the
Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy
and method" shall not, however, constitute a directive to the
Trustee as to the investment of the Trust Funds. Such "funding
policy and method" shall be consistent with the objectives of
this Plan and with the requirements of Title I of the Act.
(d) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties
have been delegated or allocated by it under the provisions of
this Plan or pursuant to procedures established hereunder.
This requirement may be satisfied by formal periodic review by
the Employer or by a qualified person specifically designated
by the Employer, through day-to-day conduct and evaluation, or
through other appropriate ways.
13
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may
appoint any person, including, but not limited to, the Employees of the
Employer, to perform the duties of the Administrator. Any person so appointed
shall signify acceptance by filing written acceptance with the Employer. Upon
the resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and to determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry out
the purpose of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish the Administrator's duties under the
Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan as set forth under the terms of the Plan,
including, but not limited to, the following:
(a) the discretion to determine all questions relating
to the eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the
Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all discretionary or otherwise directed disbursements from
the Trust;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the
Plan in order that the Trustee can exercise any investment
discretion in a manner designed to accomplish specific
objectives;
14
(i) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(j) to determine the validity of, and take appropriate
action with respect to, any qualified domestic relations
order received by it; and
(k) to assist any Participant regarding the
Participant's rights, benefits, or elections available under
the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, policies, and other data that
may be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any Named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, agents (including nonfiduciary agents) appointed
for the purpose of assisting the Administrator or the Trustee in carrying out
the instructions of Participants as to the directed investment of their accounts
and other specialists and their agents, the costs of any bonds required pursuant
to Act Section 412, and other costs of administering the Plan. Until paid, the
expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within ninety (90) days after the application is
filed, or such period as is required by applicable law or Department of Labor
regulation. In the event the claim is denied, the reasons for the denial shall
be specifically set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
15
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to Section
2.7 shall be entitled to request the Administrator to give further consideration
to a claim by filing with the Administrator a written request for a hearing.
Such request, together with a written statement of the reasons why the claimant
believes the claim should be allowed, shall be filed with the Administrator no
later than sixty (60) days after receipt of the written notification provided
for in Section 2.7. The Administrator shall then conduct a hearing within the
next sixty (60) days, at which the claimant may be represented by an attorney or
any other representative of such claimant's choosing and expense and at which
the claimant shall have an opportunity to submit written and oral evidence and
arguments in support of the claim. At the hearing (or prior thereto upon five
(5) business days written notice to the Administrator) the claimant or the
claimant's representative shall have an opportunity to review all documents in
the possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within sixty (60) days of receipt of the appeal
(unless there has been an extension of sixty (60) days due to special
circumstances, provided the delay and the special circumstances occasioning it
are communicated to the claimant within the sixty (60) day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed six (6) months of
service and has attained age 21 shall be eligible to participate hereunder as of
the date such Employee has satisfied such requirements. However, any Employee
who was a Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.
For purposes of this Section, an Eligible Employee will be
deemed to have completed the required number of months of service if such
Employee is in the employ of the Employer at any time after such months after
the Employee's employment commencement date. Employment commencement date shall
be the first day that the Employee is entitled to be credited with an Hour of
Service for the performance of duty.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the first day of the month coinciding with or next following the date on
which such Employee met the eligibility requirements of Section 3.1, provided
said Employee was still employed as of such date (or if not employed on such
date, as of the date of rehire if a 1-Year Break in Service has not occurred or,
if later, the date that the Employee would have otherwise entered the Plan had
the Employee not terminated employment).
16
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review pursuant to Section 2.8.
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in the Plan for each Year of Service completed while a
noneligible Employee, until such time as the Participant's Account is forfeited
or distributed pursuant to the terms of the Plan. Additionally, the Former
Participant's interest in the Plan shall continue to share in the earnings of
the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by the Employer for the year has been made
and allocated, then the Employer shall make a subsequent contribution, if
necessary after the application of Section 4.4(c), so that the omitted Employee
receives a total amount which the Employee would have received (including both
Employer contributions and earnings thereon) had the Employee not been omitted.
Such contribution shall be made regardless of whether it is deductible in whole
or in part in any taxable year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such inclusion is not made until after a contribution for the year has been made
and allocated, the Employer shall be entitled to recover the contribution made
with respect to the ineligible person provided the error is discovered within
twelve (12) months of the date on which it was made. Otherwise, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
for the Plan Year in which the discovery is made. Notwithstanding the foregoing,
any Deferred Compensation made by an ineligible person shall be distributed to
the person (along with any earnings attributable to such Deferred Compensation).
3.7 REHIRED EMPLOYEES
If any Participant becomes a Former Participant due to
severance from employment with the Employer and is reemployed by the Employer,
the Former Participant shall become a Participant as of the reemployment date.
17
3.8 ELECTION NOT TO PARTICIPATE
An Employee, for Plan Years beginning on or after the later of
the adoption date or effective date of this amendment and restatement, may,
subject to the approval of the Employer, elect voluntarily not to participate in
the Plan. The election not to participate must be irrevocable and communicated
to the Employer, in writing, within a reasonable period of time before the
beginning of the first Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section 4.2(a),
which amount shall be deemed an Employer Elective
Contribution.4.1(a) p.2020
(b) On behalf of each Participant who is eligible to
share in matching contributions for the Plan Year, a
discretionary matching contribution equal to a uniform
percentage of each such Participant's Deferred Compensation,
the exact percentage, if any, to be determined each year by
the Employer, which amount, if any, shall be deemed an
Employer Elective Contribution.4.1(b) p.2020
Except, however, in applying the matching
percentage specified above, only salary reductions up to 6% of
payroll period Compensation shall be considered.
(c) On behalf of each Participant who is eligible to
share in the Qualified Non-Elective Contribution for the Plan
Year, a discretionary Qualified Non-Elective Contribution
equal to a uniform percentage of each eligible individual's
Compensation, the exact percentage, if any, to be determined
each year by the Employer. Any Employer Qualified Non-Elective
Contribution shall be deemed an Employer Elective
Contribution.4.1(c) p.2020
(d) A discretionary amount, which amount, if any,
shall be deemed an Employer Non-Elective Contribution.
(e) Additionally, to the extent necessary, the
Employer shall contribute to the Plan the amount necessary to
provide the top heavy minimum contribution. All contributions
by the Employer shall be made in cash or in such property as
is acceptable to the Trustee.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of
Compensation which would have been received in the Plan Year
(except for the deferral election) by up to the maximum amount
which will not cause the Plan to violate the provisions of
Sections 4.5(a) and 4.9. A deferral election (or modification
18
of an earlier election) may not be made with respect to
Compensation which is currently available on or before the
date the Participant executed such election. For purposes of
this Section, Compensation shall be determined prior to any
reductions made pursuant to Code Sections 125, 132(f)(4) for
Plan Years beginning after December 31, 2000, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 414(h)(2) that are treated as
Employer contributions.4.2(a) p.2121
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to
that Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and, except as
otherwise provided herein, shall not be subject to Forfeiture
for any reason.4.2(b) p.2121
(c) Notwithstanding anything in the Plan to the
contrary, amounts held in the Participant's Elective Account
may not be distributable (including any offset of loans)
earlier than:
(1) a Participant's separation from service, Total
and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the existence
at the time of Plan termination of another defined
contribution plan or the establishment of a successor
defined contribution plan by the Employer or an
Affiliated Employer within the period ending twelve
months after distribution of all assets from the Plan
maintained by the Employer. For this purpose, a
defined contribution plan does not include an
employee stock ownership plan (as defined in Code
Section 4975(e)(7) or 409), a simplified employee
pension plan (as defined in Code Section 408(k)), or
a simple individual retirement account plan (as
defined in Code Section 408(p));
(4) the date of disposition by the Employer to an
entity that is not an Affiliated Employer of
substantially all of the assets (within the meaning
of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation
continues to maintain this Plan after the disposition
with respect to a Participant who continues
employment with the corporation acquiring such
assets;
(5) the date of disposition by the Employer or an
Affiliated Employer who maintains the Plan of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an
Affiliated Employer but only with respect to a
Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant,
subject to the limitations of Section 6.11.
19
(d) For each Plan Year, a Participant's Deferred
Compensation made under this Plan and all other plans,
contracts or arrangements of the Employer maintaining this
Plan shall not exceed, during any taxable year of the
Participant, the limitation imposed by Code Section 402(g), as
in effect at the beginning of such taxable year. If such
dollar limitation is exceeded, a Participant will be deemed to
have notified the Administrator of such excess amount which
shall be distributed in a manner consistent with Section
4.2(f). The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in
accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution from the Participant's Elective Account
pursuant to Section 6.11(b) or pursuant to Regulation
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by the
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan
for a period of twelve (12) months following the receipt of
the distribution. Furthermore, the dollar limitation under
Code Section 402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which
the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this
Plan (and any other plan maintained by the Employer) for the
taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under
this Plan together with any elective deferrals (as defined in
Regulation 1.402(g)-1(b)) under another qualified cash or
deferred arrangement (as described in Code Section 401(k)), a
simplified employee pension (as described in Code Section
408(k)(6)), a simple individual retirement account plan (as
described in Code Section 408(p)), a salary reduction
arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code
Section 457(b), or a trust described in Code Section
501(c)(18) cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to
Regulations) for such Participant's taxable year, the
Participant may, not later than March 1 following the close of
the Participant's taxable year, notify the Administrator in
writing of such excess and request that the Participant's
Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator
may direct the Trustee to distribute such excess amount (and
any Income allocable to such excess amount) to the Participant
not later than the first April 15th following the close of the
Participant's taxable year. Any distribution of less than the
entire amount of Excess Deferred Compensation and Income shall
be treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan
for the taxable year (and any Income allocable to such excess
amount). Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on
which the Plan received the Excess Deferred
Compensation;
20
(2) the Participant shall designate the distribution
as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this
Section 4.2(f) shall be made first from unmatched Deferred
Compensation and, thereafter, from Deferred Compensation which
is matched. Matching contributions which relate to such
Deferred Compensation shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year
beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date
when the Participant shall be entitled to receive benefits,
the fair market value of the Participant's Elective Account
shall be used to provide additional benefits to the
Participant or the Participant's Beneficiary.
(i) Employer Elective Contributions made pursuant to
this Section may be segregated into a separate account for
each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall
implement the salary reduction elections provided for herein
in accordance with the following:
(1) A Participant must make an initial salary
deferral election within a reasonable time, not to
exceed thirty (30) days, after entering the Plan
pursuant to Section 3.2. If the Participant fails to
make an initial salary deferral election within such
time, then such Participant may thereafter make an
election in accordance with the rules governing
modifications. The Participant shall make such an
election by entering into a written salary reduction
agreement with the Employer and filing such agreement
with the Administrator. Such election shall initially
be effective beginning with the pay period following
the acceptance of the salary reduction agreement by
the Administrator, shall not have retroactive effect
and shall remain in force until revoked.
(2) A Participant may modify a prior election during
the Plan Year and concurrently make a new election by
filing a written notice with the Administrator within
a reasonable time before the pay period for which
such modification is to be effective. However,
modifications to a salary deferral election shall
only be permitted quarterly, during election periods
established by the Administrator prior to the first
day of each Plan Year quarter. Any modification shall
not have retroactive effect and shall remain in force
until revoked.
21
(3) A Participant may elect to prospectively revoke
the Participant's salary reduction agreement in its
entirety at any time during the Plan Year by
providing the Administrator with thirty (30) days
written notice of such revocation (or upon such
shorter notice period as may be acceptable to the
Administrator). Such revocation shall become
effective as of the beginning of the first pay period
coincident with or next following the expiration of
the notice period. Furthermore, the termination of
the Participant's employment, or the cessation of
participation for any reason, shall be deemed to
revoke any salary reduction agreement then in effect,
effective immediately following the close of the pay
period within which such termination or cessation
occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer may make its contribution to the Plan for a
particular Plan Year at such time as the Employer, in its sole discretion,
determines. If the Employer makes a contribution for a particular Plan Year
after the close of that Plan Year, the Employer will designate to the Trustee
the Plan Year for which the Employer is making its contribution.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date, or
other Valuation Date, all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with
all information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year.
Within a reasonable period of time after the date of receipt
by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(a), to each
Participant's Elective Account in an amount equal to
each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer Elective
Contribution made pursuant to Section 4.1(b), to each
Participant's Elective Account when used to satisfy
the "Actual Deferral Percentage" tests or
Participant's Account in accordance with Section
4.1(b).
Any Participant actively employed during the Plan
Year shall be eligible to share in the matching
contribution for the Plan Year.
(3) With respect to the Employer Qualified
Non-Elective Contribution made pursuant to Section
4.1(c), to each Participant's Elective Account when
used to satisfy the "Actual Deferral Percentage"
tests or Participant's Account in accordance with
Section 4.1(c).
22
Only Participants who have completed a Year of
Service during the Plan Year and are actively
employed on the last day of the Plan Year shall be
eligible to share in the Qualified Non-Elective
Contribution for the year.
(4) With respect to the Employer Non-Elective
Contribution made pursuant to Section 4.1(d), to each
Participant's Account in the same proportion that
each such Participant's Compensation for the year
bears to the total Compensation of all Participants
for such year.
Only Participants who have completed a Year of
Service during the Plan Year and are actively
employed on the last day of the Plan Year shall be
eligible to share in the discretionary contribution
for the year.
(c) On or before each Anniversary Date any amounts
which became Forfeitures since the last Anniversary Date may
be used to satisfy any contribution that may be required
pursuant to Section 3.5 and/or 6.9, or be used to pay any
administrative expenses of the Plan. The remaining
Forfeitures, if any, shall be used to reduce the contribution
of the Employer hereunder for the Plan Year in which such
Forfeitures occur.
(d) For any Top Heavy Plan Year, Non-Key Employees
not otherwise eligible to share in the allocation of
contributions as provided above, shall receive the minimum
allocation provided for in Section 4.4(g) if eligible pursuant
to the provisions of Section 4.4(i).
(e) Notwithstanding the foregoing, Participants who
are not actively employed on the last day of the Plan Year due
to Retirement (Early, Normal or Late), Total and Permanent
Disability or death shall share in the allocation of
contributions for that Plan Year.
(f) As of each Valuation Date, any earnings or losses
(net appreciation or net depreciation) of the Trust Fund shall
be allocated in the same proportion that each Participant's
and Former Participant's time weighted average nonsegregated
accounts bear to the total of all Participants' and Former
Participants' time weighted average nonsegregated accounts as
of such date. Earnings or losses with respect to a
Participant's Directed Account shall be allocated in
accordance with Section 4.12.
Participants' transfers from other qualified
plans deposited in the general Trust Fund shall share in any
earnings and losses (net appreciation or net depreciation) of
the Trust Fund in the same manner provided above. Each
segregated account maintained on behalf of a Participant shall
be credited or charged with its separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall
23
be equal to at least three percent (3%) of such Non-Key
Employee's "415 Compensation" (reduced by contributions and
forfeitures, if any, allocated to each Non-Key Employee in any
defined contribution plan included with this Plan in a
Required Aggregation Group). However, if (1) the sum of the
Employer contributions allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is
less than three percent (3%) of each Key Employee's "415
Compensation" and (2) this Plan is not required to be included
in an Aggregation Group to enable a defined benefit plan to
meet the requirements of Code Section 401(a)(4) or 410, the
sum of the Employer contributions allocated to the
Participant's Combined Account of each Non-Key Employee shall
be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However,
in determining whether a Non-Key Employee has received the
required minimum allocation, such Non-Key Employee's Deferred
Compensation and matching contributions needed to satisfy the
"Actual Deferral Percentage" tests pursuant to Section 4.5(a)
or the "Actual Contribution Percentage" tests pursuant to
Section 4.7(a) shall not be taken into account.
However, no such minimum allocation shall be
required in this Plan for any Non-Key Employee who
participates in another defined contribution plan subject to
Code Section 412 included with this Plan in a Required
Aggregation Group.
(h) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined
Account of any Key Employee shall be equal to the ratio of the
sum of the Employer contributions allocated on behalf of such
Key Employee divided by the "415 Compensation" for such Key
Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Non-Key Employees who
are Participants and who are employed by the Employer on the
last day of the Plan Year, including Non-Key Employees who
have (1) failed to complete a Year of Service; and (2)
declined to make mandatory contributions (if required) or, in
the case of a cash or deferred arrangement, elective
contributions to the Plan.
(j) In lieu of the above, if a Non-Key Employee
participates in this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is top heavy, a
minimum allocation of five percent (5%) of "415 Compensation"
shall be provided under this Plan.
(k) For the purposes of this Section, "415
Compensation" in excess of $150,000 (or such other amount
provided in the Code) shall be disregarded. Such amount shall
be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17)(B), except that the dollar
increase in effect on January 1 of any calendar year shall be
effective for the Plan Year beginning with or within such
calendar year. If "415 Compensation" for any prior
determination period is taken into account in determining a
Participant's minimum benefit for the current Plan Year, the
"415 Compensation" for such determination period is subject to
24
the applicable annual "415 Compensation" limit in effect for
that prior period. For this purpose, in determining the
minimum benefit in Plan Years beginning on or after January 1,
1989, the annual "415 Compensation" limit in effect for
determination periods beginning before that date is $200,000
(or such other amount as adjusted for increases in the cost of
living in accordance with Code Section 415(d) for
determination periods beginning on or after January 1, 1989,
and in accordance with Code Section 401(a)(17)(B) for
determination periods beginning on or after January 1, 1994).
For determination periods beginning prior to January 1, 1989,
the $200,000 limit shall apply only for Top Heavy Plan Years
and shall not be adjusted. For any short Plan Year the "415
Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).
(l) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the salary reduction
contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
(m) Notwithstanding anything in this Section to the
contrary, all information necessary to properly reflect a
given transaction may not be available until after the date
specified herein for processing such transaction, in which
case the transaction will be reflected when such information
is received and processed. Subject to express limits that may
be imposed under the Code, the processing of any contribution,
distribution or other transaction may be delayed for any
legitimate business reason (including, but not limited to,
failure of systems or computer programs, failure of the means
of the transmission of data, force majeure, the failure of a
service provider to timely receive values or prices, and the
correction for errors or omissions or the errors or omissions
of any service provider). The processing date of a transaction
will be binding for all purposes of the Plan.
(n) Notwithstanding anything to the contrary, if this
is a Plan that would otherwise fail to meet the requirements
of Code Section 410(b)(1) and the Regulations thereunder
because Employer contributions would not be allocated to a
sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in
the Employer's contribution for the Plan Year shall
be expanded to include the minimum number of
Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test
specified above. The specific Participants who shall
become eligible under the terms of this paragraph
shall be those who have not separated from service
prior to the last day of the Plan Year and have
completed the greatest number of Hours of Service in
the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the
group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be
further expanded to include the minimum number of
25
Participants who have separated from service prior to
the last day of the Plan Year as are necessary to
satisfy the applicable test. The specific
Participants who shall become eligible to share shall
be those Participants who have completed the greatest
number of Hours of Service in the Plan Year before
terminating employment.
(3) Nothing in this Section shall permit the
reduction of a Participant's accrued benefit.
Therefore any amounts that have previously been
allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the
Employer shall make an additional contribution equal
to the amount such affected Participants would have
received had they been included in the allocations,
even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to
the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the
last day of the Plan Year.
(4) Notwithstanding the foregoing, if the portion of
the Plan which is not a Code Section 401(k) or 401(m)
plan would fail to satisfy Code Section 410(b) if the
coverage tests were applied by treating those
Participants whose only allocation would otherwise be
provided under the top heavy formula as if they were
not currently benefiting under the Plan, then, for
purposes of this Section 4.4(n), such Participants
shall be treated as not benefiting and shall
therefore be eligible to be included in the expanded
class of Participants who will share in the
allocation provided under the Plan's non top heavy
formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1996, the annual allocation
derived from Employer Elective Contributions to a Highly
Compensated Participant's Elective Account shall satisfy one
of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than
the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) multiplied
by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group over the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) shall not
be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly
Compensated Participant group shall not exceed the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group (for the preceding Plan
26
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) multiplied
by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by
reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals
pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions
under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have a
combination of such Participant's Elective
Contributions and Employer matching contributions
reduced pursuant to Section 4.6(a) and Regulation
1.401(m)-2, the provisions of which are incorporated
herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group
for a Plan Year, the average of the ratios, calculated
separately for each Participant in such group, of the amount
of Employer Elective Contributions allocated to each
Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated
Participant's Elective Account shall be reduced by Excess
Deferred Compensation to the extent such excess amounts are
made under this Plan or any other plan maintained by the
Employer and by any matching contributions which relate to
such Excess Deferred Compensation.
Notwithstanding the above, if the prior year
test method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group for the preceding Plan Year shall be
calculated pursuant to the provisions of the Plan then in
effect.
(c) For the purposes of Sections 4.5(a) and 4.6, a
Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to make a
deferral election pursuant to Section 4.2, whether or not such
deferral election was made or suspended pursuant to Section
4.2.
Notwithstanding the above, if the prior year
testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
purposes of Section 4.5(a) and 4.6, a Non-Highly Compensated
Participant shall include any such Employee eligible to make a
deferral election, whether or not such deferral election was
made or suspended, pursuant to the provisions of the Plan in
effect for the preceding Plan Year.
27
(d) For the purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k), if two or more plans
which include cash or deferred arrangements are considered one
plan for the purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii)), the cash or
deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements
satisfy Code Sections 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section
and Code Sections 401(a)(4), 410(b) and 401(k). Any adjustment
to the Non-Highly Compensated Participant actual deferral
ratio for the prior year shall be made in accordance with
Internal Revenue Service Notice 98-1 and any superseding
guidance. Plans may be aggregated under this paragraph (d)
only if they have the same plan year. Notwithstanding the
above, for Plan Years beginning after December 31, 1996, if
two or more plans which include cash or deferred arrangements
are permissively aggregated under Regulation 1.410(b)-7(d),
all plans permissively aggregated must use either the current
year testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or 409 may
not be combined with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(k).
(e) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more
cash or deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan
as defined in Code Section 4975(e)(7) or 409) of the Employer
or an Affiliated Employer, all such cash or deferred
arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral
ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different
plan years, this paragraph shall be applied by treating all
cash or deferred arrangements ending with or within the same
calendar year as a single arrangement.
(f) For the purpose of this Section, for Plan Years
beginning after December 31, 1996, when calculating the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participant group, the current year testing method shall be
used. Any change from the current year testing method to the
prior year testing method shall be made pursuant to Internal
Revenue Service Notice 98-1, Section VII (or superseding
guidance), the provisions of which are incorporated herein by
reference.
(g) Notwithstanding anything in this Section to the
contrary, the provisions of this Section and Section 4.6 may
be applied separately (or will be applied separately to the
extent required by Regulations) to each plan within the
meaning of Regulation 1.401(k)-1(g)(11). Furthermore, for Plan
Years beginning after December 31, 1998, the provisions of
Code Section 401(k)(3)(F) may be used to exclude from
consideration all Non-Highly Compensated Employees who have
not satisfied the minimum age and service requirements of Code
Section 410(a)(1)(A).
28
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial
allocations of the Employer Elective Contributions made pursuant to Section 4.4
do (or might) not satisfy one of the tests set forth in Section 4.5(a) for Plan
Years beginning after December 31, 1996, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, but in no event later
than the close of the following Plan Year, the Highly
Compensated Participant having the largest dollar amount of
Elective Contributions shall have a portion of such
Participant's Elective Contributions distributed until the
total amount of Excess Contributions has been distributed, or
until the amount of such Participant's Elective Contributions
equals the Elective Contributions of the Highly Compensated
Participant having the second largest dollar amount of
Elective Contributions. This process shall continue until the
total amount of Excess Contributions has been distributed. In
determining the amount of Excess Contributions to be
distributed with respect to an affected Highly Compensated
Participant as determined herein, such amount shall be reduced
pursuant to Section 4.2(f) by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated
Participant for such Participant's taxable year ending with or
within such Plan Year and any forfeited matching contributions
which relate to such Excess Deferred Compensation.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than the
close of the Plan Year following the Plan
Year to which they are allocable;
(ii) shall be made first from unmatched
Deferred Compensation and, thereafter,
proportionately from Deferred Compensation
which is matched and matching contributions
which relate to such Deferred Compensation,
if used in the "Actual Deferral Percentage"
tests pursuant to Section 4.5;
(iii) shall be made from Qualified
Non-Elective Contributions only to the
extent that Excess Contributions exceed the
balance in the Participant's Elective
Account attributable to Deferred
Compensation and Employer matching
contributions made pursuant to Section
4.1(b);
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as
a distribution of Excess Contributions
(and Income).
29
(2) Any distribution of less than the entire amount
of Excess Contributions shall be treated as a pro
rata distribution of Excess Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related
matching contribution is distributed as an Excess
Contribution pursuant to (1) above or as an Excess
Aggregate Contribution pursuant to Section 4.8.
(b) Notwithstanding the above, within twelve (12)
months after the end of the Plan Year, the Employer may make a
special Qualified Non-Elective Contribution in accordance with
one of the following provisions which contribution shall be
allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant eligible to share in the
allocation in accordance with such provision. The Employer
shall provide the Administrator with written notification of
the amount of the contribution being made and for which
provision it is being made pursuant to:
(1) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution
shall be allocated in the same proportion that each
Non-Highly Compensated Participant's 414(s)
Compensation for the year (or prior year if the prior
year testing method is being used) bears to the total
414(s) Compensation of all Non-Highly Compensated
Participants for such year.
(2) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution
shall be allocated in the same proportion that each
Non-Highly Compensated Participant electing salary
reductions pursuant to Section 4.2 in the same
proportion that each such Non-Highly Compensated
Participant's Deferred Compensation for the year (or
at the end of the prior Plan Year if the prior year
testing method is being used) bears to the total
Deferred Compensation of all such Non-Highly
Compensated Participants for such year.
(3) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution
shall be allocated in equal amounts (per capita).
(4) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants electing salary reductions pursuant to
Section 4.2 in an amount sufficient to satisfy (or to
prevent an anticipated failure of) one of the tests
set forth in Section 4.5(a). Such contribution shall
be allocated for the year (or at the end of the prior
Plan Year if the prior year testing method is used)
to each Non-Highly Compensated Participant electing
salary reductions pursuant to Section 4.2 in equal
amounts (per capita).
30
(5) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.5(a). Such contribution
shall be allocated to the Non-Highly Compensated
Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 4.5(a) is
satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has
received the maximum "annual addition" pursuant to
Section 4.9. This process shall continue until one of
the tests set forth in Section 4.5(a) is satisfied
(or is anticipated to be satisfied).
Notwithstanding the above, at the Employer's
discretion, Non-Highly Compensated Participants who are not
employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being
used) shall not be eligible to receive a special Qualified
Non-Elective Contribution and shall be disregarded.
Notwithstanding the above, for Plan Years
beginning after December 31, 1998, if the testing method
changes from the current year testing method to the prior year
testing method, then for purposes of preventing the double
counting of Qualified Non-Elective Contributions for the first
testing year for which the change is effective, any special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants used to satisfy the "Actual Deferral
Percentage" or "Actual Contribution Percentage" test under the
current year testing method for the prior year testing year
shall be disregarded.
(c) If during a Plan Year, it is projected that the
aggregate amount of Elective Contributions to be allocated to
all Highly Compensated Participants under this Plan would
cause the Plan to fail the tests set forth in Section 4.5(a),
then the Administrator may automatically reduce the deferral
amount of affected Highly Compensated Participants, beginning
with the Highly Compensated Participant who has the highest
deferral ratio until it is anticipated the Plan will pass the
tests or until the actual deferral ratio equals the actual
deferral ratio of the Highly Compensated Participant having
the next highest actual deferral ratio. This process may
continue until it is anticipated that the Plan will satisfy
one of the tests set forth in Section 4.5(a). Alternatively,
the Employer may specify a maximum percentage of Compensation
that may be deferred.
(d) Any Excess Contributions (and Income) which are
distributed on or after 2 1/2 months after the end of the Plan
Year shall be subject to the ten percent (10%) Employer excise
tax imposed by Code Section 4979.
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan
Years beginning after December 31, 1996 for the Highly
Compensated Participant group shall not exceed the greater
of:
31
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for
the Non-Highly Compensated Participant group); or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group (for the
preceding Plan Year if the prior year testing method
is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated
Participant group), or such percentage for the
Non-Highly Compensated Participant group (for the
preceding Plan Year if the prior year testing method
is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated
Participant group) plus 2 percentage points. However,
to prevent the multiple use of the alternative method
described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to
Section 4.2 or any other cash or deferred arrangement
maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive
matching contributions under this Plan or under any
plan maintained by the Employer or an Affiliated
Employer shall have a combination of Elective
Contributions and Employer matching contributions
reduced pursuant to Regulation 1.401(m)-2 and Section
4.8(a). The provisions of Code Section 401(m) and
Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group (for the preceding
Plan Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group), the average of the
ratios (calculated separately for each Participant in each
group and rounded to the nearest one-hundredth of one percent)
of:
(1) the sum of Employer matching contributions made
pursuant to Section 4.1(b) (to the extent such
matching contributions are not used to satisfy the
"Actual Deferral Percentage" tests) on behalf of each
such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such
Plan Year.
Notwithstanding the above, if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
purposes of Section 4.7(a), the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the preceding Plan Year shall be determined pursuant to
the provisions of the Plan then in effect.
32
(c) For purposes of determining the "Actual
Contribution Percentage," only Employer matching contributions
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees
eligible to have Employer matching contributions pursuant to
Section 4.1(b) (to the extent such matching contributions are
not used to satisfy the "Actual Deferral Percentage" tests)
allocated to their accounts, elective deferrals (as defined in
Regulation 1.402(g)-1(b)) and qualified non-elective
contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions
shall be treated as Employer matching contributions subject to
Regulation 1.401(m)-1(b)(5) which is incorporated herein by
reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the
qualified non-elective contributions are made.
(d) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the
Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Sections 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)),
such plans shall be treated as one plan. In addition, two or
more plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as
a single plan for purposes of determining whether or not such
plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section
and Code Sections 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Any adjustment to the
Non-Highly Compensated Participant actual contribution ratio
for the prior year shall be made in accordance with Internal
Revenue Service Notice 98-1 and any superseding guidance.
Plans may be aggregated under this paragraph (d) only if they
have the same plan year. Notwithstanding the above, for Plan
Years beginning after December 31, 1996, if two or more plans
which include cash or deferred arrangements are permissively
aggregated under Regulation 1.410(b)-7(d), all plans
permissively aggregated must use either the current year
testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock
ownership plan described in Code Section 4975(e)(7) or 409 may
not be aggregated with this Plan for purposes of determining
whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and
401(m).
(e) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7) or
409) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans
have different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar
year as a single plan.
33
(f) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant
shall include any Employee eligible to have Employer matching
contributions (whether or not a deferral election was made or
suspended) allocated to the Participant's account for the Plan
Year.
Notwithstanding the above, if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group
for the first Plan Year of this amendment and restatement, for
the purposes of Section 4.7(a), a Non-Highly Compensated
Participant shall include any such Employee eligible to have
Employer matching contributions (whether or not a deferral
election was made or suspended) allocated to the Participant's
account for the preceding Plan Year pursuant to the provisions
of the Plan then in effect.
(g) For the purpose of this Section, for Plan Years
beginning after December 31, 1996, when calculating the
"Actual Contribution Percentage" for the Non-Highly
Compensated Participant group, the current year testing method
shall be used. Any change from the current year testing method
to the prior year testing method shall be made pursuant to
Internal Revenue Service Notice 98-1, Section VII (or
superseding guidance), the provisions of which are
incorporated herein by reference.
(h) Notwithstanding anything in this Section to the
contrary, the provisions of this Section and Section 4.8 may
be applied separately (or will be applied separately to the
extent required by Regulations) to each plan within the
meaning of Regulation 1.401(k)-1(g)(11). Furthermore, for Plan
Years beginning after December 31, 1998, the provisions of
Code Section 401(k)(3)(F) may be used to exclude from
consideration all Non-Highly Compensated Employees who have
not satisfied the minimum age and service requirements of Code
Section 410(a)(1)(A).
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that, for
Plan Years beginning after December 31, 1996, the "Actual
Contribution Percentage" for the Highly Compensated
Participant group exceeds (or might exceed) the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct
the Trustee to distribute to the Highly Compensated
Participant having the largest dollar amount of contributions
determined pursuant to Section 4.7(b)(1), the portion of such
contributions (and Income allocable to such contributions)
until the total amount of Excess Aggregate Contributions has
been distributed, or until the Participant's remaining amount
equals the amount of contributions determined pursuant to
Section 4.7(b)(1) of the Highly Compensated Participant having
the second largest dollar amount of contributions. This
process shall continue until the total amount of Excess
Aggregate Contributions has been distributed.
34
(b) Any distribution of less than the entire amount
of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate
Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income).
(c) Excess Aggregate Contributions shall be treated
as Employer contributions for purposes of Code Sections 404
and 415 even if distributed from the Plan.
(d) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall be
made after first determining the Excess Contributions, if any,
to be treated as after-tax voluntary Employee contributions
due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code
Section 401(k)) maintained by the Employer that ends with or
within the Plan Year or which are treated as after-tax
voluntary Employee contributions due to recharacterization
pursuant to Section 4.6(a).
(e) If during a Plan Year the projected aggregate
amount of Employer matching contributions to be allocated to
all Highly Compensated Participants under this Plan would, by
virtue of the tests set forth in Section 4.7(a), cause the
Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided
in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an
amount necessary to satisfy one of the tests set forth in
Section 4.7(a).
(f) Notwithstanding the above, within twelve (12)
months after the end of the Plan Year, the Employer may make a
special Qualified Non-Elective Contribution in accordance with
one of the following provisions which contribution shall be
allocated to the Participant's Account of each Non-Highly
Compensated eligible to share in the allocation in accordance
with such provision. The Employer shall provide the
Administrator with written notification of the amount of the
contribution being made and for which provision it is being
made pursuant to:
(1) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.7. Such contribution
shall be allocated in the same proportion that each
Non-Highly Compensated Participant's 414(s)
Compensation for the year (or prior year if the prior
year testing method is being used) bears to the total
414(s) Compensation of all Non-Highly Compensated
Participants for such year.
(2) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.7. Such contribution
shall be allocated in the same proportion that each
Non-Highly Compensated Participant electing salary
35
reductions pursuant to Section 4.2 in the same
proportion that each such Non-Highly Compensated
Participant's Deferred Compensation for the year (or
at the end of the prior Plan Year if the prior year
testing method is being used) bears to the total
Deferred Compensation of all such Non-Highly
Compensated Participants for such year.
(3) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.7. Such contribution
shall be allocated in equal amounts (per capita).
(4) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants electing salary reductions pursuant to
Section 4.2 in an amount sufficient to satisfy (or to
prevent an anticipated failure of) one of the tests
set forth in Section 4.5(a). Such contribution shall
be allocated for the year (or at the end of the prior
Plan Year if the prior year testing method is used)
to each Non-Highly Compensated Participant electing
salary reductions pursuant to Section 4.2 in equal
amounts (per capita).
(5) A special Qualified Non-Elective Contribution may
be made on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or
to prevent an anticipated failure of) one of the
tests set forth in Section 4.7. Such contribution
shall be allocated to the Non-Highly Compensated
Participant having the lowest 414(s) Compensation,
until one of the tests set forth in Section 4.7 is
satisfied (or is anticipated to be satisfied), or
until such Non-Highly Compensated Participant has
received the maximum "annual addition" pursuant to
Section 4.9. This process shall continue until one of
the tests set forth in Section 4.7 is satisfied (or
is anticipated to be satisfied).
Notwithstanding the above, at the Employer's
discretion, Non-Highly Compensated Participants who are not
employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being
used) shall not be eligible to receive a special Qualified
Non-Elective Contribution and shall be disregarded.
Notwithstanding the above, for Plan Years
beginning after December 31, 1998, if the testing method
changes from the current year testing method to the prior year
testing method, then for purposes of preventing the double
counting of Qualified Non-Elective Contributions for the first
testing year for which the change is effective, any special
Qualified Non-Elective Contribution on behalf of Non-Highly
Compensated Participants used to satisfy the "Actual Deferral
Percentage" or "Actual Contribution Percentage" test under the
current year testing method for the prior year testing year
shall be disregarded.
(g) Any Excess Aggregate Contributions (and Income)
which are distributed on or after 2 1/2 months after the end
of the Plan Year shall be subject to the ten percent (10%)
Employer excise tax imposed by Code Section 4979.
36
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, for "limitation
years" beginning after December 31, 1994, the maximum "annual
additions" credited to a Participant's accounts for any
"limitation year" shall equal the lesser of: (1) $30,000
adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations, or (2) twenty-five percent (25%) of the
Participant's "415 Compensation" for such "limitation year."
If the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts would
cause the "annual additions" for the "limitation year" to
exceed the maximum "annual additions," the amount contributed
or allocated will be reduced so that the "annual additions"
for the "limitation year" will equal the maximum "annual
additions," and any amount in excess of the maximum "annual
additions," which would have been allocated to such
Participant may be allocated to other Participants. For any
short "limitation year," the dollar limitation in (1) above
shall be reduced by a fraction, the numerator of which is the
number of full months in the short "limitation year" and the
denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however,
the "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to
another is not an "annual addition." In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Sections 402(e)(6), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
37
(e) For the purpose of this Section, all qualified
defined benefit plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
benefit plan, and all qualified defined contribution plans
(whether terminated or not) ever maintained by the Employer
shall be treated as one defined contribution plan.
(f) For the purpose of this Section, if the Employer
is a member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group
(as defined by Code Section 414(m)), or is a member of a group
of entities required to be aggregated pursuant to Regulations
under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
(g) For the purpose of this Section, if this Plan is
a Code Section 413(c) plan, each Employer who maintains this
Plan will be considered to be a separate Employer.
(h)(1) If a Participant participates in more than one
defined contribution plan maintained by the Employer which
have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, "annual additions" will be credited
to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior
to crediting "annual additions" to the Participant's
accounts under the defined contribution plan not
subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, the maximum "annual additions"
under this Plan shall equal the product of (A) the
maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited
under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the
"annual additions" which would be credited to such
Participant's accounts under this Plan without regard
to the limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for
all plans described in this subparagraph.
(i) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder.
38
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or
other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to
be exceeded for any Participant, the "excess amount" will be
disposed of in one of the following manners, as uniformly
determined by the Administrator for all Participants similarly
situated.
(1) Any unmatched Deferred Compensation and,
thereafter, proportionately from Deferred
Compensation which is matched and matching
contributions which relate to such Deferred
Compensation, will be reduced to the extent they
would reduce the "excess amount." The Deferred
Compensation (and for "limitation years" beginning
after December 31, 1995, any gains attributable to
such Deferred Compensation) will be distributed to
the Participant and the Employer matching
contributions (and for "limitation years" beginning
after December 31, 1995, any gains attributable to
such matching contributions) will be used to reduce
the Employer contribution in the next "limitation
year";
(2) If, after the application of subparagraph (1)
above, an "excess amount" still exists, and the
Participant is covered by the Plan at the end of the
"limitation year," the "excess amount" will be used
to reduce the Employer contribution for such
Participant in the next "limitation year," and each
succeeding "limitation year" if necessary;
(3) If, after the application of subparagraphs (1)
and (2) above, an "excess amount" still exists, and
the Participant is not covered by the Plan at the end
of the "limitation year," the "excess amount" will be
held unallocated in a "Section 415 suspense account."
The "Section 415 suspense account" will be applied to
reduce future Employer contributions for all
remaining Participants in the next "limitation year,"
and each succeeding "limitation year" if necessary;
(4) If a "Section 415 suspense account" is in
existence at any time during the "limitation year"
pursuant to this Section, it will not participate in
the allocation of investment gains and losses of the
Trust Fund. If a "Section 415 suspense account" is in
existence at any time during a particular "limitation
year," all amounts in the "Section 415 suspense
account" must be allocated and reallocated to
Participants' accounts before any Employer
contributions or any Employee contributions may be
made to the Plan for that "limitation year." Except
as provided in (1) above, "excess amounts" may not be
distributed to Participants or Former Participants.
39
(b) For purposes of this Article, "excess amount" for
any Participant for a "limitation year" shall mean the excess,
if any, of (1) the "annual additions" which would be credited
to the Participant's account under the terms of the Plan
without regard to the limitations of Code Section 415 over (2)
the maximum "annual additions" determined pursuant to Section
4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year."
4.11 ROLLOVERS AND PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts
may be transferred (within the meaning of Code Section 414(l))
to this Plan from other tax qualified plans under Code Section
401(a) by Eligible Employees, provided the trust from which
such funds are transferred permits the transfer to be made and
the transfer will not jeopardize the tax exempt status of the
Plan or Trust or create adverse tax consequences for the
Employer. Prior to accepting any transfers to which this
Section applies, the Administrator may require an opinion of
counsel that the amounts to be transferred meet the
requirements of this Section. The amounts transferred shall be
set up in a separate account herein referred to as a
Participant's Transfer/Rollover Account except such transfer
amounts which were transferred to this Plan from the Xxxxxx
Financial Corporation Employee Stock Ownership Plan effective
as of February 28, 2002 shall be set up in their own separate
Employee Stock Ownership Account. Such account shall be fully
Vested at all times and shall not be subject to Forfeiture for
any reason.
Except as permitted by Regulations
(including Regulation 1.411(d)-4), amounts attributable to
elective contributions (as defined in Regulation
1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified
plan in a plan-to-plan transfer (other than a direct rollover)
shall be subject to the distribution limitations provided for
in Regulation 1.401(k)-1(d).
(b) With the consent of the Administrator, the Plan
may accept a "rollover" by Eligible Employees, provided the
"rollover" will not jeopardize the tax exempt status of the
Plan or create adverse tax consequences for the Employer.
Prior to accepting any "rollovers" to which this Section
applies, the Administrator may require the Employee to
establish (by providing opinion of counsel or otherwise) that
the amounts to be rolled over to this Plan meet the
requirements of this Section. The amounts rolled over shall be
set up in a separate account herein referred to as a
"Participant's Transfer/Rollover Account." Such account shall
be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
For purposes of this Section, the term
"qualified plan" shall mean any tax qualified plan under Code
Section 401(a), or, any other plans from which distributions
are eligible to be rolled over into this Plan pursuant to the
Code. The term "rollover" means: (i) amounts transferred to
this Plan directly from another qualified plan; (ii)
distributions received by an Employee from other "qualified
40
plans" which are eligible for tax-free rollover to a
"qualified plan" and which are transferred by the Employee to
this Plan within sixty (60) days following receipt thereof;
(iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by
another "qualified plan," (B) were eligible for tax-free
rollover to a "qualified plan" and (C) were deposited in such
conduit individual retirement account within sixty (60) days
of receipt thereof; (iv) amounts distributed to the Employee
from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the
Employee to this Plan within sixty (60) days of receipt
thereof from such conduit individual retirement account; and
(v) any other amounts which are eligible to be rolled over to
this Plan pursuant to the Code.
(c) Amounts in a Participant's Transfer/Rollover
Account shall be held by the Trustee pursuant to the
provisions of this Plan and may not be withdrawn by, or
distributed to the Participant, in whole or in part, except as
provided in Section 6.10 and Section 6.11 and paragraph (d) of
this Section. The Trustee shall have no duty or responsibility
to inquire as to the propriety of the amount, value or type of
assets transferred, nor to conduct any due diligence with
respect to such assets; provided, however, that such assets
are otherwise eligible to be held by the Trustee under the
terms of this Plan.
(d) At such date when the Participant or the
Participant's Beneficiary shall be entitled to receive
benefits, the Participant's Transfer/Rollover Account shall be
used to provide additional benefits to the Participant or the
Participant's Beneficiary. Any distributions of amounts held
in a Participant's Transfer/Rollover Account shall be made in
a manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining
whether an involuntary cash-out of benefits may be made
without Participant consent.
(e) The Administrator may direct that Employee
transfers and rollovers made after a Valuation Date be
segregated into a separate account for each Participant until
such time as the allocations pursuant to this Plan have been
made, at which time they may remain segregated or be invested
as part of the general Trust Fund or be directed by the
Participant pursuant to Section 4.12.
(f) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a
defined benefit plan, money purchase plan (including a target
benefit plan), stock bonus or profit sharing plan which would
otherwise have provided for a life annuity form of payment to
the Participant.
(g) Notwithstanding anything herein to the contrary,
a transfer directly to this Plan from another qualified plan
(or a transaction having the effect of such a transfer) shall
only be permitted if it will not result in the elimination or
reduction of any "Section 411(d)(6) protected benefit" as
described in Section 8.1.
41
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure
established by the Administrator (the Participant Direction
Procedures) and applied in a uniform nondiscriminatory manner,
direct the Trustee, in writing (or in such other form which is
acceptable to the Trustee), to invest all of their accounts in
specific assets, specific funds or other investments permitted
under the Plan and the Participant Direction Procedures. That
portion of the interest of any Participant so directing will
thereupon be considered a Participant's Directed Account.
(b) As of each Valuation Date, all Participant
Directed Accounts shall be charged or credited with the net
earnings, gains, losses and expenses as well as any
appreciation or depreciation in the market value using
publicly listed fair market values when available or
appropriate as follows:
(1) to the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets
or investments, the allocation of earnings, gains and
losses of each Participant's Directed Account shall
be based upon the total amount of funds so invested
in a manner proportionate to the Participant's share
of such pooled investment; and
(2) to the extent that the assets in the
Participant's Directed Account are accounted for as
segregated assets, the allocation of earnings, gains
and losses from such assets shall be made on a
separate and distinct basis.
(c) Investment directions will be processed as soon
as administratively practicable after proper investment
directions are received from the Participant. No guarantee is
made by the Plan, Employer, Administrator or Trustee that
investment directions will be processed on a daily basis, and
no guarantee is made in any respect regarding the processing
time of an investment direction. Notwithstanding any other
provision of the Plan, the Employer, Administrator or Trustee
reserves the right to not value an investment option on any
given Valuation Date for any reason deemed appropriate by the
Employer, Administrator or Trustee. Furthermore, the
processing of any investment transaction may be delayed for
any legitimate business reason (including, but not limited to,
failure of systems or computer programs, failure of the means
of the transmission of data, force majeure, the failure of a
service provider to timely receive values or prices, and
correction for errors or omissions or the errors or omissions
of any service provider). The processing date of a transaction
will be binding for all purposes of the Plan and considered
the applicable Valuation Date for an investment transaction.
(d) With respect to any Employer stock which is
allocated to a Participant's Directed Investment Account, the
Participant or Beneficiary shall direct the Trustee with
regard to any voting, tender and similar rights associated
with the ownership of Employer stock in the same manner
provided in Section 11.5 for Employer Shares held in the
Employee Stock Ownership Transfer Account.
42
4.13 QUALIFIED MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary,
effective December 12, 1994, contributions, benefits and service will be
provided in accordance with Code Section 414(u).
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Valuation Date, to determine the net worth of the assets comprising the Trust
Fund as it exists on the Valuation Date. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value (or their contractual value in the case of a Contract or Policy) as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund. The Trustee may
update the value of any shares held in the Participant Directed Account by
reference to the number of shares held by that Participant, priced at the market
value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate employment with the Employer
and retire for the purposes hereof on the Participant's Normal Retirement Date
or Early Retirement Date. However, a Participant may postpone the termination of
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.4, shall continue until such Participant's Late Retirement
Date. Upon a Participant's Retirement Date or attainment of Normal Retirement
Date without termination of employment with the Employer, or as soon thereafter
as is practicable, the Trustee shall distribute, at the election of the
Participant, all amounts credited to such Participant's Combined Account in
accordance with Section 6.5.
43
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the
Participant's Retirement Date or other termination of
employment, all amounts credited to such Participant's
Combined Account shall become fully Vested. The Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 6.6 and 6.7, to distribute the value of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by reason
of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the death benefit.
(d) The Administrator may require such proper proof
of death and such evidence of the right of any person to
receive payment of the value of the account of a deceased
Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and
of the right of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant's spouse.
Except, however, the Participant may designate a Beneficiary
other than the spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and
there is no "qualified domestic relations order" as
defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a
Beneficiary shall be made on a form satisfactory to the
Administrator. A Participant may at any time revoke a
designation of a Beneficiary or change a Beneficiary by filing
written (or in such other form as permitted by the Internal
Revenue Service) notice of such revocation or change with the
Administrator. However, the Participant's spouse must again
consent in writing (or in such other form as permitted by the
Internal Revenue Service) to any change in Beneficiary unless
the original consent acknowledged that the spouse had the
right to limit consent only to a specific Beneficiary and that
the spouse voluntarily elected to relinquish such right.
44
(f) In the event no valid designation of Beneficiary
exists, or if the Beneficiary is not alive at the time of the
Participant's death, the death benefit will be paid in the
following order of priority to:
(1) the Participant's surviving spouse;
(2) the Participant's children, including adopted
children, per stirpes;
(3) the Participant's surviving parents, in equal
shares; or
(4) the Participant's estate.
If the Beneficiary does not predecease the
Participant, but dies prior to distribution of the death
benefit, the death benefit will be paid to the Beneficiary's
estate.
(g) Notwithstanding anything in this Section to the
contrary, if a Participant has designated the spouse as a
Beneficiary, then a divorce decree or a legal separation that
relates to such spouse shall revoke the Participant's
designation of the spouse as a Beneficiary unless the decree
or a qualified domestic relations order (within the meaning of
Code Section 414(p)) provides otherwise.
(h) Any consent by the Participant's spouse to waive
any rights to the death benefit must be in writing (or in such
other form as permitted by the Internal Revenue Service), must
acknowledge the effect of such waiver, and be witnessed by a
Plan representative or a notary public. Further, the spouse's
consent must be irrevocable and must acknowledge the specific
nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to the Participant's Retirement Date or other termination of employment,
all amounts credited to such Participant's Combined Account shall become fully
Vested. In the event of a Participant's Total and Permanent Disability, the
Administrator, in accordance with the provisions of Sections 6.5 and 6.7, shall
direct the distribution to such Participant of all Vested amounts credited to
such Participant's Combined Account.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer
is terminated for any reason other than death, Total and
Permanent Disability or retirement, then such Participant
shall be entitled to such benefits as are provided hereinafter
pursuant to this Section 6.4.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of the Employer
(upon the Participant's death, Total and Permanent Disability,
Early or Normal Retirement). However, at the election of the
45
Participant, the Administrator shall direct the Trustee that
the entire Vested portion of the Terminated Participant's
Combined Account be payable to such Terminated Participant.
Any distribution under this paragraph shall be made in a
manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
If, for Plan Years beginning after August 5,
1997, the value of a Terminated Participant's Vested benefit
derived from Employer and Employee contributions does not
exceed $5,000 ($3,500 for Plan Years beginning prior to August
6, 1997) and, if the distribution is made prior to March 22,
1999, has never exceeded $5,000 ($3,500 for Plan Years
beginning prior to August 6, 1997) at the time of any prior
distribution, then the Administrator shall direct the Trustee
to cause the entire Vested benefit to be paid to such
Participant in a single lump sum.
(b) A Participant shall become fully Vested
immediately upon entry into the Plan.6.4(b) p.5151
(c) The computation of a Participant's nonforfeitable
percentage of such Participant's interest in the Plan shall
not be reduced as the result of any direct or indirect
amendment to this Plan. In the event that the Plan is amended
to change or modify any vesting schedule, or if the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage, or
if the Plan is deemed amended by an automatic change to a top
heavy vesting schedule, then each Participant with at least
three (3) Years of Service as of the expiration date of the
election period may elect to have such Participant's
nonforfeitable percentage computed under the Plan without
regard to such amendment or change. If a Participant fails to
make such election, then such Participant shall be subject to
the new vesting schedule. The Participant's election period
shall commence on the adoption date of the amendment and shall
end sixty (60) days after the latest of:6.4(c) p.5252
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of
the Participant, shall direct the Trustee to distribute to a
Participant or such Participant's Beneficiary any amount to
which the Participant is entitled under the Plan in one or
more of the following methods:
(1) One lump-sum payment in cash or in property
allocated to the Participant's account except,
however, for property distributions made prior to the
earlier of (A) the effective date of an amendment
46
limiting distribution in property to property
allocated to the Participant's account, or (B) the
adoption date of this amendment and restatement,
distributions in property are not limited to property
in the Participant's account.
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or
other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant
and the Participant's designated Beneficiary).
(b) Any distribution to a Participant, for Plan Years
beginning after August 5, 1997, who has a benefit which
exceeds $5,000 ($3,500 for Plan Years beginning prior to
August 6, 1997) or, if the distribution is made prior to March
22, 1999, has ever exceeded $5,000 ($3,500 for Plan Years
beginning prior to August 6, 1997) at the time of any prior
distribution, shall require such Participant's written (or in
such other form as permitted by the Internal Revenue Service)
consent if such distribution commences prior to the time the
benefit is "immediately distributable." A benefit is
"immediately distributable" if any part of the benefit could
be distributed to the Participant (or surviving spouse) before
the Participant attains (or would have attained if not
deceased) the later of the Participant's Normal Retirement Age
or age 62. However, for distributions prior to October 17,
2000, if a Participant has begun to receive distributions
pursuant to an optional form of benefit under which at least
one scheduled periodic distribution has not yet been made, and
if the value of the Participant's benefit, determined at the
time of the first distribution under that optional form of
benefit, exceeded $5,000 ($3,500 for Plan Years beginning
prior to August 6, 1997), then the value of the Participant's
benefit prior to October 17, 2000 is deemed to continue to
exceed such amount.
(c) The following rules will apply to the consent
requirements set forth in subsection (b):
(1) The Participant must be informed of the right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of
benefits shall not apply with respect to
distributions which are required under Section
6.5(d).
(2) Notice of the rights specified under this
paragraph shall be provided no less than thirty (30)
days and no more than ninety (90) days before the
date the distribution commences.
(3) Written (or such other form as permitted by the
Internal Revenue Service) consent of the Participant
to the distribution must not be made before the
Participant receives the notice and must not be made
more than ninety (90) days before the date the
distribution commences.
47
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the distribution.
Any such distribution may commence less than
thirty (30) days after the notice required under Regulation
1.411(a)-11(c) is given, provided that: (1) the Administrator
clearly informs the Participant that the Participant has a
right to a period of at least thirty (30) days after receiving
the notice to consider the decision of whether or not to elect
a distribution (and, if applicable, a particular distribution
option), and (2) the Participant, after receiving the notice,
affirmatively elects a distribution.
(d) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits made on
or after January 1, 1997 shall be made in accordance with the
following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Regulations thereunder (including
Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed or
must begin to be distributed not later than April 1st
of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70
1/2 or (ii) the calendar year in which the
Participant retires, provided, however, that this
clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any
time during the Plan Year ending with or within the
calendar year in which such owner attains age 70 1/2.
Such distributions shall be equal to or greater than
any required distribution.
Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as
determined under the preceding paragraph and must be
made over a period certain measured by the life
expectancy of the Participant (or the life
expectancies of the Participant and the Participant's
designated Beneficiary) in accordance with
Regulations.
(2) Distributions to a Participant and the
Participant's Beneficiaries shall only be made in
accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
With respect to distributions under the Plan
made for calendar years beginning on or after January 1, 2001,
the Plan will apply the minimum distribution requirements of
Code Section 401(a)(9) in accordance with the Regulations
under Code Section 401(a)(9) that were proposed on January 17,
2001, notwithstanding any provision of the Plan to the
contrary. This amendment shall continue in effect until the
end of the last calendar year beginning before the effective
date of final Regulations under Code Section 401(a)(9) or such
other date specified in guidance published by the Internal
Revenue Service.
(e) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse shall not be
redetermined in accordance with Code Section 401(a)(9)(D).
Life expectancy and joint and last survivor expectancy shall
be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
48
(f) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of
any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of the Plan.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a)(1) The death benefit payable pursuant to Section
6.2 shall be paid to the Participant's Beneficiary within a
reasonable time after the Participant's death by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by
the Participant's Beneficiary) subject, however, to the rules
specified in Section 6.6(b):
(i) One lump-sum payment in cash or in
property allocated to the Participant's
account except, however, for property
distributions made prior to the earlier of
(A) the effective date of an amendment
limiting distribution in property to
property allocated to the Participant's
account, or (B) the adoption date of this
amendment and restatement, distributions in
property are not limited to property in the
Participant's account.
(ii) Payment in monthly, quarterly,
semi-annual, or annual cash installments
over a period to be determined by the
Participant or the Participant's
Beneficiary. After periodic installments
commence, the Beneficiary shall have the
right to direct the Trustee to reduce the
period over which such periodic installments
shall be made, and the Trustee shall adjust
the cash amount of such periodic
installments accordingly.
(2) In the event the death benefit payable pursuant
to Section 6.2 is payable in installments, then, upon
the death of the Participant, the Administrator may
direct the Trustee to segregate the death benefit
into a separate account, and the Trustee shall invest
such segregated account separately, and the funds
accumulated in such account shall be used for the
payment of the installments.
(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall
be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If it is determined, pursuant to
Regulations, that the distribution of a Participant's interest
has begun and the Participant dies before the entire interest
has been distributed, the remaining portion of such interest
shall be distributed at least as rapidly as under the method
of distribution selected pursuant to Section 6.5 as of the
date of death. If a Participant dies before receiving any
distributions of the interest in the Plan or before
distributions are deemed to have begun pursuant to
Regulations, then the death benefit shall be distributed to
the Participant's Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of the
Participant's date of death occurs.
49
(c) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse shall not be
redetermined in accordance with Code Section 401(a)(9)(D).
Life expectancy and joint and last survivor expectancy shall
be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(d) For purposes of this Section, any amount paid to
a child of the Participant will be treated as if it had been
paid to the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of
majority.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments the
distribution or series of payments may be made or begun on such date or as soon
thereafter as is practicable. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall begin
not later than the sixtieth (60th) day after the close of the Plan Year in which
the latest of the following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age specified herein; (b)
the tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates service
with the Employer.
Notwithstanding the foregoing, the failure of a Participant to
consent to a distribution that is "immediately distributable" (within the
meaning of Section 6.5), shall be deemed to be an election to defer the
commencement of payment of any benefit sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or
incompetent Beneficiary, then the Administrator may direct that such
distribution be paid to the legal guardian, or if none in the case of a minor
Beneficiary, to a parent of such Beneficiary or a responsible adult with whom
the Beneficiary maintains residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. Notwithstanding the foregoing, effective October 1, 2001,
or if later, the adoption date of this amendment and restatement, if the value
of a Participant's Vested benefit derived from Employer and Employee
contributions does not exceed $5,000 ($3,500 for Plan Years beginning prior to
August 6, 1997), then the amount distributable may, in the sole discretion of
the Administrator, either be treated as a Forfeiture, or be paid directly to an
50
individual retirement account described in Code Section 408(a) or an individual
retirement annuity described in Code Section 408(b) at the time it is determined
that the whereabouts of the Participant or the Participant's Beneficiary cannot
be ascertained. In the event a Participant or Beneficiary is located subsequent
to the Forfeiture, such benefit shall be restored, first from Forfeitures, if
any, and then from an additional Employer contribution if necessary. However,
regardless of the preceding, a benefit which is lost by reason of escheat under
applicable state law is not treated as a Forfeiture for purposes of this Section
nor as an impermissable forfeiture under the Code.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of
59-1/2 years, the Administrator, at the election of the Participant who has not
severed employment with the Employer, shall direct the Trustee to distribute all
or a portion of the amount then credited to the accounts maintained on behalf of
the Participant. In the event that the Administrator makes such a distribution,
the Participant shall continue to be eligible to participate in the Plan on the
same basis as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted prior to the Participant
attaining age 59 1/2 except as otherwise permitted under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year up to the lesser of 100% of
the Participant's Elective Account and Participant's Account
and Participant's Transfer/Rollover Account valued as of the
last Valuation Date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to
be made as of the first day of the Plan Year or, if later, the
Valuation Date immediately preceding the date of distribution,
and the Participant's Elective Account and Participant's
Account and Participant's Transfer/Rollover Account shall be
reduced accordingly. Any withdrawal made pursuant to this
Section shall be made in accordance with 6.11(b) or 6.11(c)
below. Withdrawal pursuant to Section 6.11(b) below is deemed
to be on account of an immediate and heavy financial need of
the Participant if the withdrawal is for purposes of Sections
(1), (2), (4) or (5) below:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's
spouse, or any of the Participant's dependents (as
defined in Code Section 152) or necessary for these
persons to obtain medical care as described in Code
Section 213(d);
(2) The costs directly related to the purchase
(excluding mortgage payments) of a principal
residence for the Participant;
(3) Funeral expenses for a member of the
Participant's family;
51
(4) Payment of tuition, related educational fees, and
room and board expenses for the next twelve (12)
months of post-secondary education for the
Participant and the Participant's spouse, children,
or dependents;
(5) Payments necessary to prevent the eviction of the
Participant from the Participant's principal
residence or foreclosure on the mortgage on that
residence; or
(6) An immediate and heavy financial need of the
Participant provided that the Administrator applies
the need to all the Participants in a uniform and
nondiscriminatory manner.
(b) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions
are satisfied:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the
Participant. The amount of the immediate and heavy
financial need may include any amounts necessary to
pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the
distribution;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable
(at the time of the loan) loans currently available
under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective
deferrals and after-tax voluntary Employee
contributions will be suspended for at least twelve
(12) months after receipt of the hardship
distribution or, the Participant, pursuant to a
legally enforceable agreement, will suspend elective
deferrals and after-tax voluntary Employee
contributions to the Plan and all other plans
maintained by the Employer for at least twelve (12)
months after receipt of the hardship distribution;
and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals for the Participant's taxable year
immediately following the taxable year of the
hardship distribution in excess of the applicable
limit under Code Section 402(g) for such next taxable
year less the amount of such Participant's elective
deferrals for the taxable year of the hardship
distribution.
(c) No distribution shall be made pursuant to this
Section unless the Administrator determines, based upon all
relevant facts and circumstances, that the amount to be
distributed is not in excess of the amount required to relieve
the financial need and that such need cannot be satisfied from
other resources reasonably available to the Participant. For
this purpose, the Participant's resources shall be deemed to
include those assets of the Participant's spouse and minor
52
children that are reasonably available to the Participant. The
amount of the immediate and heavy financial need may include
any amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result
from the distribution. A distribution may be treated as
necessary to satisfy a financial need if the Administrator
relies upon the Participant's representation that the need
cannot be relieved:6.11(c) p.5959
(1) Through reimbursement or compensation by
insurance or otherwise;
(2) By reasonable liquidation of the Participant's
assets, to the extent such liquidation would not
itself increase the amount of the need;
(3) By cessation of elective deferrals under the
Plan; or
(4) By other distributions or loans from the Plan or
any other qualified retirement plan, or by borrowing
from commercial sources on reasonable commercial
terms, to the extent such amounts would not
themselves increase the amount of the need.
(d) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall
be limited solely to the Participant's total Deferred
Compensation as of the date of distribution, reduced by the
amount of any previous distributions pursuant to this Section
and Section 6.10.
(e) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories
of responsibilities:
(1) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and
control the Plan assets subject, however, to the
53
direction of a Participant with respect to
Participant Directed Accounts, the Employer or an
Investment Manager appointed by the Employer or any
agent of the Employer;
(2) At the direction of the Administrator, to pay
benefits required under the Plan to be paid to
Participants, or, in the event of their death, to
their Beneficiaries; and
(3) To maintain records of receipts and disbursements
and furnish to the Employer and/or Administrator for
each Plan Year a written annual report pursuant to
Section 7.7.
(b) In the event that the Trustee shall be directed
by a Participant (pursuant to the Participant Direction
Procedures), or the Employer, or an Investment Manager or
other agent appointed by the Employer with respect to the
investment of any or all Plan assets, the Trustee shall have
no liability with respect to the investment of such assets,
but shall be responsible only to execute such investment
instructions as so directed.
(1) The Trustee shall be entitled to rely fully on
the written (or other form acceptable to the
Administrator and the Trustee, including, but not
limited to, voice recorded) instructions of a
Participant (pursuant to the Participant Direction
Procedures), or the Employer, or any Fiduciary or
nonfiduciary agent of the Employer, in the discharge
of such duties, and shall not be liable for any loss
or other liability, resulting from such direction (or
lack of direction) of the investment of any part of
the Plan assets.
(2) The Trustee may delegate the duty of executing
such instructions to any nonfiduciary agent, which
may be an affiliate of the Trustee or any Plan
representative.
(3) The Trustee may refuse to comply with any
direction from the Participant in the event the
Trustee, in its sole and absolute discretion, deems
such directions improper by virtue of applicable law.
The Trustee shall not be responsible or liable for
any loss or expense which may result from the
Trustee's refusal or failure to comply with any
directions from the Participant.
(4) Any costs and expenses related to compliance with
the Participant's directions shall be borne by the
Participant's Directed Account, unless paid by the
Employer.
(c) If there shall be more than one Trustee, they
shall act by a majority of their number, but may authorize one
or more of them to sign papers on their behalf.
54
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust
Fund to keep the Trust Fund invested without distinction
between principal and income and in such securities or
property, real or personal, wherever situated, as the Trustee
shall deem advisable, including, but not limited to, stocks,
common or preferred, open-end or closed-end mutual funds,
bonds and other evidences of indebtedness or ownership, and
real estate or any interest therein. The Trustee shall at all
times in making investments of the Trust Fund consider, among
other factors, the short and long-term financial needs of the
Plan on the basis of information furnished by the Employer. In
making such investments, the Trustee shall not be restricted
to securities or other property of the character expressly
authorized by the applicable law for trust investments;
however, the Trustee shall give due regard to any limitations
imposed by the Code or the Act so that at all times the Plan
may qualify as a qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust
company shall be of a custodial, clerical and record-keeping
nature.
(c) The Trustee may transfer to a common, collective,
pooled trust fund or money market fund maintained by any
corporate Trustee or affiliate thereof hereunder, all or such
part of the Trust Fund as the Trustee may deem advisable, and
such part or all of the Trust Fund so transferred shall be
subject to all the terms and provisions of the common,
collective, pooled trust fund or money market fund which
contemplate the commingling for investment purposes of such
trust assets with trust assets of other trusts. The Trustee
may transfer any part of the Trust Fund intended for temporary
investment of cash balances to a money market fund maintained
by The Xxxxxx Savings and Loan Co. or its affiliates. The
Trustee may withdraw from such common, collective, pooled
trust fund or money market fund all or such part of the Trust
Fund as the Trustee may deem advisable.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions of the
Plan, shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or
other property and to retain the same. In conjunction with the
purchase of securities, margin accounts may be opened and
maintained;
(b) To sell, exchange, convey, transfer, grant
options to purchase, or otherwise dispose of any securities or
other property held by the Trustee, by private contract or at
public auction. No person dealing with the Trustee shall be
bound to see to the application of the purchase money or to
inquire into the validity, expediency, or propriety of any
such sale or other disposition, with or without advertisement;
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(c) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of
attorney with or without power of substitution; to exercise
any conversion privileges, subscription rights or other
options, and to make any payments incidental thereto; to
oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate
securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with
respect to stocks, bonds, securities, or other property.
However, the Trustee shall not vote proxies relating to
securities for which it has not been assigned full investment
management responsibilities. In those cases where another
party has such investment authority or discretion, the Trustee
will deliver all proxies to said party who will then have full
responsibility for voting those proxies;
(d) To cause any securities or other property to be
registered in the Trustee's own name, in the name of one or
more of the Trustee's nominees, in a clearing corporation, in
a depository, or in book entry form or in bearer form, but the
books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the
Plan in such amount, and upon such terms and conditions, as
the Trustee shall deem advisable; and for any sum so borrowed,
to issue a promissory note as Trustee, and to secure the
repayment thereof by pledging all, or any part, of the Trust
Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any
borrowing;
(f) To keep such portion of the Trust Fund in cash or
cash balances as the Trustee may, from time to time, deem to
be in the best interests of the Plan, without liability for
interest thereon;
(g) To accept and retain for such time as the Trustee
may deem advisable any securities or other property received
or acquired as Trustee hereunder, whether or not such
securities or other property would normally be purchased as
investments hereunder;
(h) To make, execute, acknowledge, and deliver any
and all documents of transfer and conveyance and any and all
other instruments that may be necessary or appropriate to
carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
(j) To employ suitable agents and counsel and to pay
their reasonable expenses and compensation, and such agent or
counsel may or may not be agent or counsel for the Employer;
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(k) To apply for and procure from responsible
insurance companies, to be selected by the Administrator, as
an investment of the Trust Fund such annuity, or other
Contracts (on the life of any Participant) as the
Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or
other Contracts as and when entitled to do so under the
provisions thereof;
(l) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest or in
cash or cash balances without liability for interest thereon,
including the specific authority to invest in any type of
deposit of the Trustee (or of a financial institution related
to a Trustee);
(m) To invest in Treasury Bills and other forms of
United States government obligations;
(n) To invest in shares of investment companies
registered under the Investment Company Act of 1940, including
any money market fund advised by or offered through The Xxxxxx
Savings and Loan Co.;
(o) To sell, purchase and acquire put or call options
if the options are traded on and purchased through a national
securities exchange registered under the Securities Exchange
Act of 1934, as amended, or, if the options are not traded on
a national securities exchange, are guaranteed by a member
firm of the New York Stock Exchange regardless of whether such
options are covered;
(p) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and
loan associations including the specific authority to make
deposit into any savings accounts or certificates of deposit
of the Trustee (or a financial institution related to the
Trustee);
(q) To pool all or any of the Trust Fund, from time
to time, with assets belonging to any other qualified employee
pension benefit trust created by the Employer or any
Affiliated Employer, and to commingle such assets and make
joint or common investments and carry joint accounts on behalf
of this Plan and Trust and such other trust or trusts,
allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(r) To appoint a nonfiduciary agent or agents to
assist the Trustee in carrying out any investment instructions
of Participants and of any Investment Manager or Fiduciary,
and to compensate such agent(s) from the assets of the Plan,
to the extent not paid by the Employer;
(s) To do all such acts and exercise all such rights
and privileges, although not specifically mentioned herein, as
the Trustee may deem necessary to carry out the purposes of
the Plan.
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7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion,
make loans to Participants and Beneficiaries under the
following circumstances: (1) loans shall be made available to
all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount
made available to other Participants and Beneficiaries; (3)
loans shall bear a reasonable rate of interest; (4) loans
shall be adequately secured; and (5) loans shall provide for
periodic repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added
to the outstanding balance of all other loans made by the Plan
to the Participant) may, in accordance with a uniform and
nondiscriminatory policy established by the Administrator, be
limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to
the Participant during the one year period ending on
the day before the date on which such loan is made,
over the outstanding balance of loans from the Plan
to the Participant on the date on which such loan was
made, or
(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Participant
under the Plan (excluding Employee Stock Ownership
Transfer Account).
For purposes of this limit, all plans of the
Employer shall be considered one plan.
(c) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a
period not to exceed five (5) years. However, loans used to
acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as a
"principal residence" of the Participant shall provide for
periodic repayment over a reasonable period of time that may
exceed five (5) years. For this purpose, a "principal
residence" has the same meaning as a "principal residence"
under Code Section 1034. Loan repayments may be suspended
under this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be made
pursuant to a Participant loan program. Such loan program
shall be established in writing and must include, but need not
be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan
program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
58
(4) limitations, if any, on the types and amounts of
loans offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps
that will be taken to preserve Plan assets.
Such Participant loan program shall be
contained in a separate written document which, when properly
executed, is hereby incorporated by reference and made a part
of the Plan. Furthermore, such Participant loan program may be
modified or amended in writing from time to time without the
necessity of amending this Section.
(e) Notwithstanding anything in this Plan to the
contrary, if a Participant or Beneficiary defaults on a loan
made pursuant to this Section, then the loan default will be a
distributable event to the extent permitted by the Code and
Regulations.
(f) Notwithstanding anything in this Section to the
contrary, any loans made prior to the date this amendment and
restatement is adopted shall be subject to the terms of the
plan in effect at the time such loan was made.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee shall not be responsible in any way for the application
of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set
forth in the Trustee's fee schedule (if the Trustee has such a schedule) or as
agreed upon in writing by the Employer and the Trustee. However, an individual
serving as Trustee who already receives full-time pay from the Employer shall
not receive compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from the
Trust Fund unless paid or advanced by the Employer. All taxes of any kind
whatsoever that may be levied or assessed under existing or future laws upon, or
in respect of, the Trust Fund or the income thereof, shall be paid from the
Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
(a) Within a reasonable period of time after the
later of the Anniversary Date or receipt of the Employer
contribution for each Plan Year, the Trustee, or its agent,
shall furnish to the Employer and Administrator a written
statement of account with respect to the Plan Year for which
such contribution was made setting forth:
59
(1) the net income, or loss, of the Trust Fund;
(2) the gains, or losses, realized by the Trust Fund
upon sales or other disposition of the assets;
(3) the increase, or decrease, in the value of the
Trust Fund;
(4) all payments and distributions made from the
Trust Fund; and
(5) such further information as the Trustee and/or
Administrator deems appropriate.
(b) The Employer, promptly upon its receipt of each
such statement of account, shall acknowledge receipt thereof
in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to
disapprove any such statement of account within thirty (30)
days after its receipt thereof shall be deemed an approval
thereof. The approval by the Employer of any statement of
account shall be binding on the Employer and the Trustee as to
all matters contained in the statement to the same extent as
if the account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee, the
Employer and all persons having or claiming an interest in the
Plan were parties. However, nothing contained in this Section
shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be
required by the Act and the regulations thereunder for any
Plan Year, the Administrator shall direct the Trustee to
engage on behalf of all Participants an independent qualified
public accountant for that purpose. Such accountant shall,
after an audit of the books and records of the Plan in
accordance with generally accepted auditing standards, within
a reasonable period after the close of the Plan Year, furnish
to the Administrator and the Trustee a report of the audit
setting forth the accountant's opinion as to whether any
statements, schedules or lists that are required by Act
Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity with
generally accepted accounting principles applied consistently.
(b) All auditing and accounting fees shall be an
expense of and may, at the election of the Employer, be paid
from the Trust Fund.
(c) If some or all of the information necessary to
enable the Administrator to comply with Act Section 103 is
maintained by a bank, insurance company, or similar
institution, regulated, supervised, and subject to periodic
examination by a state or federal agency, then it shall
transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one
hundred twenty (120) days after the end of the Plan Year or
such other date as may be prescribed under regulations of the
Secretary of Labor.
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7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) Unless otherwise agreed to by both the Trustee
and the Employer, a Trustee may resign at any time by
delivering to the Employer, at least thirty (30) days before
its effective date, a written notice of resignation.
(b) Unless otherwise agreed to by both the Trustee
and the Employer, the Employer may remove a Trustee at any
time by delivering to the Trustee, at least thirty (30) days
before its effective date, a written notice of such Trustee's
removal.
(c) Upon the death, resignation, incapacity, or
removal of any Trustee, a successor may be appointed by the
Employer; and such successor, upon accepting such appointment
in writing and delivering same to the Employer, shall, without
further act, become vested with all the powers and
responsibilities of the predecessor as if such successor had
been originally named as a Trustee herein. Until such a
successor is appointed, the remaining Trustee or Trustees
shall have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a
Trustee. In the event a successor is so designated by the
Employer and accepts such designation, the successor shall,
without further act, become vested with all the powers and
responsibilities of the predecessor as if such successor had
been originally named as Trustee herein immediately upon the
death, resignation, incapacity, or removal of the predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, the Trustee shall furnish to the Employer and
Administrator a written statement of account with respect to
the portion of the Plan Year during which the individual or
entity served as Trustee. This statement shall be either (i)
included as part of the annual statement of account for the
Plan Year required under Section 7.7 or (ii) set forth in a
special statement. Any such special statement of account
should be rendered to the Employer no later than the due date
of the annual statement of account for the Plan Year. The
procedures set forth in Section 7.7 for the approval by the
Employer of annual statements of account shall apply to any
special statement of account rendered hereunder and approval
by the Employer of any such special statement in the manner
provided in Section 7.7 shall have the same effect upon the
statement as the Employer's approval of an annual statement of
account. No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account
required by Section 7.7 and this subparagraph.
7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of a Participant to another trust forming part of a pension,
profit sharing or stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the requirements of Code
Section 401(a), provided that the trust to which such transfers are made permits
the transfer to be made.
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7.11 TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and hold harmless the Trustee
against any and all claims, losses, damages, expenses and liabilities the
Trustee may incur in the exercise and performance of the Trustee's power and
duties hereunder, unless the same are determined to be due to gross negligence
or willful misconduct.
7.12 DIRECT ROLLOVER
(a) Notwithstanding any provision 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 Administrator, to have any
portion of an "eligible rollover distribution" that is equal
to at least $500 paid directly to an "eligible retirement
plan" specified by the "distributee" in a "direct rollover."
(b) For purposes of this Section the following
definitions shall apply:
(1) An "eligible rollover distribution" is any
distribution of all or any portion of the balance to
the credit of the "distributee," except that an
"eligible rollover distribution" does not include:
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the "distributee" or the joint lives
(or joint life expectancies) of the "distributee" and
the "distributee's" designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); the portion of
any other distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities); any hardship
distribution described in Code Section
401(k)(2)(B)(i)(IV) made after December 31, 1999; and
any other distribution that is reasonably expected to
total less than $200 during a year.
(2) An "eligible retirement plan" is an individual
retirement account described in Code Section 408(a),
an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts 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.
(3) 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
62
alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are
"distributees" with regard to the interest of the
spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to
the "eligible retirement plan" specified by the
"distributee."
7.13 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities," as such term is defined in the Act, in excess of 10% of
the fair market value of all the assets in the Trust Fund.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend this Plan, subject to the limitations of this Section.
However, any amendment which affects the rights, duties or
responsibilities of the Trustee or Administrator may only be
made with the Trustee's or Administrator's written consent.
Any such amendment shall become effective as provided therein
upon its execution. The Trustee shall not be required to
execute any such amendment unless the amendment affects the
duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than
such part as is required to pay taxes and administration
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations (including
Regulation 1.411(d)-4) or other IRS guidance, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective if it eliminates or reduces any "Section
411(d)(6) protected benefit" or adds or modifies conditions
relating to "Section 411(d)(6) protected benefits" which
results in a further restriction on such benefits unless such
"Section 411(d)(6) protected benefits" are preserved with
respect to benefits accrued as of the later of the adoption
date or effective date of the amendment. "Section 411(d)(6)
protected benefits" are benefits described in Code Section
411(d)(6)(A), early retirement benefits and retirement-type
subsidies, and optional forms of benefit. A Plan amendment
that eliminates or restricts the ability of a Participant to
receive payment of the Participant's interest in the Plan
under a particular optional form of benefit will be
permissible if the amendment satisfies the conditions in (1)
and (2) below:
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(1) The amendment provides a single-sum distribution
form that is otherwise identical to the optional form
of benefit eliminated or restricted. For purposes of
this condition (1), a single-sum distribution form is
otherwise identical only if it is identical in all
respects to the eliminated or restricted optional
form of benefit (or would be identical except that it
provides greater rights to the Participant) except
with respect to the timing of payments after
commencement.
(2) The amendment is not effective unless the
amendment provides that the amendment shall not apply
to any distribution with an annuity starting date
earlier than the earlier of: (i) the ninetieth (90th)
day after the date the Participant receiving the
distribution has been furnished a summary that
reflects the amendment and that satisfies the Act
requirements at 29 CFR 2520.104b-3 (relating to a
summary of material modifications) or (ii) the first
day of the second Plan Year following the Plan Year
in which the amendment is adopted.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. Upon any
full or partial termination, all amounts credited to the
affected Participants' Combined Accounts shall become 100%
Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts, including
Forfeitures, shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the
Employer shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or in
property allocated to the Participant's account or through the
purchase of irrevocable nontransferable deferred commitments
from an insurer except, however, for property distributions
made prior to the earlier of (A) the effective date of an
amendment limiting distribution in property to property
allocated to the Participant's account, or (B) the adoption
date of this amendment and restatement, distributions in
property are not limited to property in the Participant's
account. Except as permitted by Regulations, the termination
of the Plan shall not result in the reduction of "Section
411(d)(6) protected benefits" in accordance with Section
8.1(c).
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
This Plan and Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to any other plan and trust only if
the benefits which would be received by a Participant of this Plan, in the event
of a termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
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ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of
the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds sixty percent (60%)
of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and
all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key Employee for any
prior Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan is
a Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a
Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time
during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant
shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy Plan.
(b) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) the Participant's Combined Account balance as of
the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date.
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
Valuation Date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.
(3) 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 top heavy
purposes to the extent that such distributions are
already included in the Participant's Aggregate
Account balance as of the Valuation Date.
65
Notwithstanding anything herein to the contrary, all
distributions, including distributions under a
terminated plan which if it had not been terminated
would have been required to be included in an
Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value
of life insurance policies) of a Participant's
account balance because of death shall be treated as
a distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax
deductible qualified voluntary employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and
plan-to-plan transfers (ones which are both initiated
by the Employee and made from a plan maintained by
one employer to a plan maintained by another
employer), if this Plan provides the rollovers or
plan-to-plan transfers, it shall always consider such
rollovers or plan-to-plan transfers as a distribution
for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or
plan-to-plan transfers as part of the Participant's
Aggregate Account balance.
(6) with respect to related rollovers and
plan-to-plan transfers (ones either not initiated by
the Employee or made to a plan maintained by the same
employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or
plan-to-plan transfer, it shall consider such
rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective
of the date on which such rollover or plan-to-plan
transfer is accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(c) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a participant
in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other
plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements
of Code Sections 401(a)(4) or 410, will be required
to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan
if the Required Aggregation Group is a Top Heavy
66
Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. 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.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(d) "Determination Date" means (a) the last day of
the preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(e) Present Value of Accrued Benefit: In the case of
a defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee, shall be as
determined using the single accrual method used for all plans
of the Employer and Affiliated Employers, or if no such single
method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination
of the Present Value of Accrued Benefit shall be determined as
of the most recent Valuation Date that falls within or ends
with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined
benefit plan.
(f) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
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ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon the Employee as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, and as
otherwise permitted by the Code and the Act, no benefit which
shall be payable out of the Trust Fund to any person
(including a Participant or the Participant's Beneficiary)
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;
and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or
torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and
the same shall not be recognized by the Trustee, except to
such extent as may be required by law.
(b) Subsection (a) shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, by reason
of a loan made pursuant to Section 7.4. At the time a
distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount to be
distributed as shall equal such indebtedness shall be paid to
the Plan, to apply against or discharge such indebtedness.
Prior to making a payment, however, the Participant or
Beneficiary must be given written notice by the Administrator
that such indebtedness is to be so paid in whole or part from
the Participant's Combined Account. If the Participant or
Beneficiary does not agree that the indebtedness is a valid
claim against the Vested Participant's Combined Account, the
Participant or Beneficiary shall be entitled to a review of
the validity of the claim in accordance with procedures
provided in Sections 2.7 and 2.8.
(c) Subsection (a) shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and
those other domestic relations orders permitted to be so
treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall
establish a written procedure to determine the qualified
status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order,"
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
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(d) Subsection (a) shall not apply to an offset to a
Participant's accrued benefit against an amount that the
Participant is ordered or required to pay the Plan with
respect to a judgment, order, or decree issued, or a
settlement entered into, on or after August 5, 1997, in
accordance with Code Sections 401(a)(13)(C) and (D).
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according
to the Code, the Act and the laws of the State of Ohio, other than its laws
respecting choice of law, to the extent not pre-empted by the Act.
10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise
specifically permitted by law, it shall be impossible by
operation of the Plan or of the Trust, by termination of
either, by power of revocation or amendment, by the happening
of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund
maintained pursuant to the Plan or any funds contributed
thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Former Participants, or
their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the contributions may not
be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
(c) Except for Sections 3.5, 3.6, and 4.1(e), any
contribution by the Employer to the Trust Fund is conditioned
upon the deductibility of the contribution by the Employer
under the Code and, to the extent any such deduction is
69
disallowed, the Employer may, within one (1) year following
the final determination of the disallowance, whether by
agreement with the Internal Revenue Service or by final
decision of a competent jurisdiction, demand repayment of such
disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the contribution may not
be returned to the Employer, but any losses attributable
thereto must reduce the amount so returned.
10.7 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors,
shall not be responsible for the validity of any Contract issued hereunder or
for the failure on the part of the insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.8 INSURER'S PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the
Employer and the insurer, an insurer which issues any Contracts hereunder shall
not have any responsibility for the validity of this Plan or for the tax or
legal aspects of this Plan. The insurer shall be protected and held harmless in
acting in accordance with any written direction of the Trustee, and shall have
no duty to see to the application of any funds paid to the Trustee, nor be
required to question any actions directed by the Trustee. Regardless of any
provision of this Plan, the insurer shall not be required to take or permit any
action or allow any benefit or privilege contrary to the terms of any Contract
which it issues hereunder, or the rules of the insurer.
10.9 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participant's legal
representative, Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of the Plan, shall,
to the extent thereof, be in full satisfaction of all claims hereunder against
the Trustee and the Employer, either of whom may require such Participant, legal
representative, Beneficiary, guardian or committee, as a condition precedent to
such payment, to execute a receipt and release thereof in such form as shall be
determined by the Trustee or Employer.
10.10 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator, (3) the Trustee and (4) any Investment Manager appointed
hereunder. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan
including, but not limited to, any agreement allocating or delegating their
responsibilities, the terms of which are incorporated herein by reference. In
general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1; and shall have the authority to
70
appoint and remove the Trustee and the Administrator; to formulate the Plan's
"funding policy and method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the sole responsibility for the
administration of the Plan, including, but not limited to, the items specified
in Article II of the Plan, as the same may be allocated or delegated thereunder.
The Trustee shall have the sole responsibility of management of the assets held
under the Trust, except to the extent directed pursuant to Article II or with
respect to those assets, the management of which has been assigned to an
Investment Manager, who shall be solely responsible for the management of the
assets assigned to it, all as specifically provided in the Plan. Each named
Fiduciary warrants that any directions given, information furnished, or action
taken by it shall be in accordance with the provisions of the Plan, authorizing
or providing for such direction, information or action. Furthermore, each named
Fiduciary may rely upon any such direction, information or action of another
named Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or action.
It is intended under the Plan that each named Fiduciary shall be responsible for
the proper exercise of its own powers, duties, responsibilities and obligations
under the Plan as specified or allocated herein. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity.
10.12 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.13 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant
to an application for qualification filed by or on behalf of the Plan by the
time prescribed by law for filing the Employer's return for the taxable year in
which the Plan is adopted, or such later date that the Secretary of the Treasury
may prescribe, the Commissioner of Internal Revenue Service or the
Commissioner's delegate should determine that the Plan does not initially
qualify as a tax-exempt plan under Code Sections 401 and 501, and such
determination is not contested, or if contested, is finally upheld, then if the
Plan is a new plan, it shall be void ab initio and all amounts contributed to
the Plan by the Employer, less expenses paid, shall be returned within one (1)
year and the Plan shall terminate, and the Trustee shall be discharged from all
further obligations. If the disqualification relates to an amended plan, then
the Plan shall operate as if it had not been amended.
10.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE XI
PLAN MERGER
11.1 GENERAL. Effective as of February 28, 2002, the Xxxxxx Financial
Corporation Employee Stock Ownership Plan as amended and restated (the "ESOP")
was terminated by the Board of Directors of Xxxxxx Financial Corporation and
then merged with and into this Plan. As a result of the termination, the ESOP
71
participants were fully vested in their accounts under the ESOP, and, as a
result of the merger, the ESOP participants' accounts have been transferred to
this Plan and are referred to in this Plan as the Employee Stock Ownership
Transfer Accounts. Except to the extent provided in this Article XI, the
Participants' Employee Stock Ownership Transfer Accounts shall be subject to the
provisions of the Plan. The provisions set forth in this Article XI are
effective as of February 28, 2002, except as otherwise provided herein.
11.2 SEGREGATED ACCOUNTS. Subject to the remaining provisions of this Section
11.2, the Employee Stock Ownership Transfer Accounts shall be segregated from
the Participants' other accounts under the Plan and shall remain invested in the
common stock of Xxxxxx Financial Corporation ("Employer Shares") as if they
constituted a separate frozen plan. Effective as of the later of August 1, 2002,
or the date this provision is communicated to the Participants, the Participants
shall have the authority to self direct the investment of their Employee Stock
Ownership Transfer Accounts. If, pursuant to such authority, a Participant
directs that Employer Shares be sold from his Employee Stock Ownership Transfer
Account, the proceeds received from such sale remain in the segregated account
but instead shall be invested among the other investment options offered under
the Plan in the same proportion as the Participant has the assets in his other
Accounts under the Plan invested. Until such time as the preceding two sentences
become effective, the decision to sell the Employer Shares held in the Transfer
Accounts shall be made by the Trustee, subject to Section 11.4 below.
Notwithstanding the foregoing, the Trustee shall not sell Employer Shares either
at its discretion or as directed by a Participant if to do so would be in
violation of applicable federal or Ohio securities laws.
11.3 NOT READILY TRADABLE STOCK. As of February 28, 2002, the date of the merger
of the ESOP with and into this Plan, the Employer Shares were publicly traded.
If the Employer Shares cease to be publicly traded and become not readily
tradable on an established securities market, then the following provisions
shall apply:
(a) Valuation. For purposes of setting the annual value of the Employer
Shares for account valuation as well as for all other purposes, an independent
appraiser shall be engaged to make such determination. The term "independent
appraiser" shall mean any appraiser meeting requirements similar to the
requirements of Treasury Regulations prescribed under section 170(a)(1) of the
Code.
(b) Put Option.
(1) If a Participant or Beneficiary receives a distribution of
Employer Shares which are not readily tradable on an established market, then he
shall have an option to put such Employer Shares to Xxxxxx Financial
Corporation. The put option shall be exercisable only by the Participant or
Beneficiary, his donees, a person (including an estate or its distributee) to
whom the Employer Shares pass by reason of his death, or the custodian or
trustee of an individual retirement account (within the meaning of section
408(a) of the Code) to which such Employer Shares were rolled over. A put option
shall be exercised by the holder's notifying Xxxxxx Financial Corporation in
writing that the put option is being exercised.
(2) Duration. The put option shall initially be exercisable
during a 60-day period beginning on the date the Employer Shares subject to the
put option are distributed by the Plan. If the distributee does not exercise the
put option during the initial period, then the distributee shall have a second
60-day period during which to exercise such put option which period shall begin
72
as of the date the distributee is notified of the value of the Employer Shares
as of the end of the Plan Year which contains the date the distributee received
the distribution.
(3) Price. The price at which the put option shall be
exercisable is the fair market value of the Employer Shares determined as of the
September 30th coinciding with or immediately preceding the exercise of the put
option; provided, however, if such Employer Shares are sold by a disqualified
person within the meaning of section 4975(e)(2) of the Code, then such fair
market value shall be determined as of the date of exercise of the put option.
(4) Payment Terms. At the option of the party repurchasing the
Employer Shares under the put option, payment can be made in full within 30 days
after the date the option is exercised or the Employer Shares may be repurchased
on an installment basis over a period of not more than 5 years, using a
promissory note bearing a reasonable rate of interest and providing for adequate
security as provided for in the Treasury Regulations.
(c) Right of First Refusal.
(1) During any period when Employer Shares are not readily
tradable on an established securities market, all distributions of Employer
Shares to any Participant or his Beneficiary by the Plan shall be subject to a
"right of first refusal" upon the terms and conditions hereinafter set forth.
The "right of first refusal" shall provide that prior to any transfer (as
determined by the Plan Administrator) of the Employer Shares, the Participant or
Beneficiary must first offer to sell such Employer Shares to the Plan; and if
the Plan refuses to exercise its right to purchase the Employer Shares, then
Xxxxxx Financial Corporation shall have a "right of first refusal" to purchase
such Employer Shares. Neither the Plan nor Xxxxxx Financial Corporation shall be
required to exercise the "right of first refusal". This Section 11.3(c) shall
not be operative unless and until the Board of Directors of the Employer so
directs.
(2) The terms and conditions of the "right of first refusal"
shall be determined as follows:
(A) If the Participants or Beneficiary receives a
bona fide offer for the purchase of all or any part of his Employer Shares from
a third party, the Participant or Beneficiary shall forthwith deliver (by
registered mail, return receipt requested) a copy of any such offer to the Plan
Administrator. The Trustee (as directed by the Plan Administrator) or Xxxxxx
Financial Corporation, as the case may be, shall then have 14 days after receipt
by the Plan Administrator of the written offer to exercise the right to purchase
all or any portion of the Employer Shares.
(B) The selling price and other terms under the
"right of first refusal" must not be less favorable to the Participant or
Beneficiary than the purchase price and other terms offered by a buyer other
than Xxxxxx Financial Corporation or the Plan, making a good faith offer to
purchase the Employer Shares.
11.4 DIVERSIFICATION
(a) The provisions of this Section 11.4 shall be operative during such
time periods as the Participants do not have the right to self direct the
investment of their Employee Stock Ownership Transfer Accounts.
73
(b) Any Participant who has completed at least ten years of
participation in the Xxxxxx Financial Corporation Employee Stock Ownership Plan
and/or the Plan and who has attained age 55 (the "diversification
requirements"), may elect within the first 90 days of each of the six Plan Years
immediately following the Plan Year in which he first satisfies the
diversification requirements, to direct the Plan as to the investment of up to
25% of the total balance of his Employee Stock Ownership Transfer Account (to
the extent such 25% portion exceeds the amount to which a prior election under
this paragraph applies). In the case of the Plan Year in which the Participant
can make his last such election, the preceding sentence shall be applied by
substituting "50%" for "25%"). The Participant's direction shall be provided to
the Plan Administrator in writing.
(c) The Plan may satisfy the requirements of paragraph (a) by offering
at last three investment options (other than Employer Shares) to each
Participant making the election, and by investing the amount in question in the
option(s) selected by the Participant.
11.5 VOTING RIGHTS. All Employer Shares held in the Employee Stock Ownership
Transfer Accounts shall be voted, on all corporate matters, by the Trustee
pursuant to written instructions received from each Participant or Beneficiary
with respect to the Employer Shares allocated to his or her Employee Stock
Ownership Transfer Account. To the extent a Participant or Beneficiary does not
instruct the Trustee to vote Employer Shares, the Participant or Beneficiary
shall be deemed to have directed the Trustee to abstain from voting such
Employer Shares.
11.6 PLAN LOANS AND HARDSHIP DISTRIBUTIONS. No plan loans or hardship
distributions shall be made to a Participant from his Employee Stock Ownership
Transfer Account.
11.7 MEDIUM OF DISTRIBUTIONS. Distributions to a Participant from his Employee
Stock Ownership Transfer Account shall be made at the discretion of the Plan
Administrator either in cash, in Employer Shares, or partially in cash and
partially in Employer Shares, provided, however, that if the Plan Administrator
decides to make a distribution all or in part in cash, the Participant shall
first be notified in writing that he has a right to demand that the distribution
be made in full in Employer Shares. Notwithstanding the preceding sentence, any
distribution that might otherwise have been made in the form of a fraction of an
Employer Share shall instead be made in cash in an amount equal to the value of
the fractional interest, valued as of the applicable day.
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IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered in the presence of:
The Xxxxxx Savings and Loan Co.
/s/ Xxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxxx, President
----------------------------- --------------------------------
EMPLOYER
/s/ Xxxxx X. Xxxxxx
-----------------------------
WITNESSES AS TO EMPLOYER
ATTEST /s/ Xxxxxxx X. Xxxxxx
----------------------------
The Xxxxxx Savings and Loan Co.
/s/ Xxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxxx
----------------------------- --------------------------------
TRUSTEE
/s/ Xxxxx X. Xxxxxx
-----------------------------
WITNESSES AS TO TRUSTEE
ATTEST /s/ Xxxxxx X. Xxxxxx
------------------------------
75